AGREEMENT OF MERGER
▇▇▇▇▇▇▇ RESEARCH CORPORATION,
▇▇▇▇▇▇▇ SELECT CORPORATION,
TXEN, INC.,
AND
THE SHAREHOLDERS OF
TXEN, INC.
Dated: August 27, 1997
TABLE OF CONTENTS
TO
AGREEMENT OF MERGER
SECTION 1. EFFECTIVE DATE ..................................................1
SECTION 2. GOVERNING LAW ...................................................2
SECTION 3. CAPITALIZATION AND CERTIFICATE OF INCORPORATION .................2
SECTION 4. BYLAWS ..........................................................2
SECTION 5. MERGER CONSIDERATION, CONVERSION OF SHARES AND CAPITAL STOCK OF
THE SURVIVING CORPORATION........................................2
5.1 Contribution to Capital ...........................................2
5.2 Stock of Subsidiary; Class B Common Stock .........................2
5.3 Merger Consideration ..............................................3
5.4 Exchange of Stock Certificates ....................................3
5.5 Exchange Agents ...................................................3
5.6 Stock Options .....................................................3
5.7 Restricted Stock ..................................................5
SECTION 6. BOARD OF DIRECTORS AND OFFICERS .................................5
SECTION 7. EFFECT OF MERGER ................................................5
SECTION 8. APPROVAL OF SHAREHOLDERS ........................................6
SECTION 9. REPRESENTATIONS AND WARRANTIES OFNICHOLS RESEARCH
CORPORATION AND SUBSIDIARY.....................................6
9.1 Organization; Standing; Corporate Power ...........................6
9.2 Authority .........................................................7
9.3 Approvals and Consents ............................................7
9.4 Validity ..........................................................7
9.5 No Breach .........................................................7
9.6 Finders ...........................................................7
9.7 Periodic Reports ..................................................7
9.8 Financial Statements ..............................................7
SECTION 10. REPRESENTATIONS AND WARRANTIESOF TXEN AND SHAREHOLDERS..........8
10.1 Organization; Standing; Corporate Power ...........................8
10.2 Authority ........................................................10
10.3 Approvals and Consents ...........................................10
10.4 Validity .........................................................10
10.5 No Breach ........................................................10
10.6 Personal Property ................................................10
10.7 Financial Statements .............................................10
10.8 No Material Change ...............................................11
10.9 Undisclosed Liabilities and Obligations ..........................11
10.10 Actions Since June 30, 1997 .....................................11
10.11 Inventory .......................................................13
10.12 Tax Matters .....................................................13
10.13 Real Property ...................................................13
10.14 Title and Condition of the Assets and Properties ................14
10.15 Proprietary Rights ..............................................15
10.16 Software and Information Systems ................................15
10.17 Contracts and Leases ............................................16
10.18 Material Commitments ............................................18
10.19 Warranties, Service Commitments, and Maintenance Agreements......18
10.20 Permits and Licenses; Compliance with Laws ......................19
10.21 Employee Benefits ...............................................19
10.22 Labor Matters ...................................................20
10.23 Employees; Wage Increases .......................................20
10.24 No Pending or Threatened Litigation and Claims ..................21
10.25 Environmental Matters ...........................................21
10.26 Customers .......................................................21
10.27 Suppliers .......................................................21
10.28 Insurance .......................................................21
10.29 Product Specifications ..........................................22
10.30 Accounts Receivable .............................................22
10.31 Disclosure ......................................................22
10.32 Accounts ........................................................22
10.33 Transactions with Related Parties ...............................22
10.34 Finders .........................................................23
10.35 Surviving Corporation's Ability to Operate the Business..........23
10.36 Capitalization ..................................................23
10.37 Subsidiaries ....................................................23
10.38 Securities Matters ..............................................23
10.39 Availability of Information .....................................24
10.40 Limited Representations and Warranties of the University.........24
10.40.1 Authority ...............................................25
10.40.2 Ownership ...............................................25
10.40.3 Enforceability ..........................................25
10.40.4 No Consent ..............................................25
10.40.5 Estoppel Provisions .....................................25
10.41 Special Representations and Warranties of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇....25
10.41.1 Authority ...............................................25
10.41.2 Ownership ...............................................26
10.41.3 Enforceability ..........................................26
10.41.4 No Consent ..............................................26
10.41.5 Estoppel Provisions .....................................26
SECTION 11. CONDUCT OF CONSTITUENT CORPORATION SPENDING THE
EFFECTIVE DATE.................................................26
11.1 Certificate of Incorporation and Bylaws ..........................26
11.2 Capitalization ...................................................26
11.3 Operate in Ordinary Course .......................................26
11.4 Not Sell or Encumber Purchased Assets ............................27
11.5 Preserve Business Organization ...................................27
11.6 Maintain Properties ..............................................27
11.7 Maintain Books of Account ........................................27
11.8 Comply with Law ..................................................27
11.9 Inventory ........................................................27
11.10 Maintain Insurance ..............................................27
11.11 Advise Surviving Corporation of Adverse Change ..................27
11.12 Access for NRC ..................................................27
11.13 Third-Party Consents ............................................28
11.14 Not Incur Indebtedness ..........................................28
11.15 Preserve Capital Structure ......................................28
11.16 TXEN Authorization ..............................................28
SECTION 12. CONDITIONS PRECEDENT TO OBLIGATIONS OF ▇▇▇▇▇▇▇ RESEARCH
CORPORATION AND SUBSIDIARY.....................................28
12.1 Representations and Warranties True as of Closing Date............28
12.2 Compliance with Agreement ........................................28
12.3 No Litigation ....................................................29
12.4 Third-Party Consents and Approvals ...............................29
12.5 Compliance with Law ..............................................29
12.6 Material Adverse Effect ..........................................29
12.7 Opinion of Counsel for TXEN ......................................29
12.8 Employment Agreements ............................................29
12.9 Certified Resolutions ............................................29
12.10 Certificates of Fulfillment of Conditions .......................29
12.11 Shareholder Approval ............................................29
12.12 No Dissenting Shareholders ......................................29
12.13 Fairness Opinion ................................................30
12.14 University Resolution ...........................................30
SECTION 13. CONDITIONS PRECEDENT TO OBLIGATIONS OF TXEN ...................30
13.1 Representations and Warranties True on Closing Date ..............30
13.2 Compliance with Agreement ........................................30
13.3 No Litigation ....................................................30
13.4 Opinion of Counsel for Subsidiary ................................30
13.5 Certified Resolutions ............................................30
13.6 Certificates of Fulfillment of Conditions ........................30
SECTION 14. DESIGNATIONS AND AGREEMENTS REQUIRED BY LAW ...................31
SECTION 15. ACCESS ........................................................31
SECTION 16. TERMINATION ...................................................31
16.1 Circumstances of Termination .....................................31
16.2 Effect of Termination ............................................31
SECTION 17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND
INDEMNIFICATION................................................32
17.1 Survival .........................................................32
17.2 Definition .......................................................32
17.3 Indemnification by Shareholders ..................................32
17.4 Indemnification by Surviving Corporation and NRC .................32
17.5 Allocation of Damages ............................................32
17.6 Notice of Claim ..................................................33
17.7 Defense of Third Party Claims ....................................33
17.8 Reduction for Insurance and Tax Benefits .........................33
17.9 Deductible .......................................................33
17.10 Limitations .....................................................34
17.11 Arbitration .....................................................34
SECTION 18. CERTAIN COVENANTS OF THE PARTIES WITH RESPECT TO TAX MATTERS...34
18.1 Tax Records ......................................................34
18.2 TXEN Final Tax Return ............................................34
SECTION 19. PIGGYBACK REGISTRATION RIGHTS OF SHAREHOLDERS .................34
19.1 In General .......................................................34
19.2 Expenses, Limitations and Agreements .............................36
19.3 No Assignment of Piggyback Rights ................................36
19.4 Transfer Restriction .............................................36
19.5 Termination ......................................................36
SECTION 20. POST CLOSING COVENANTS ........................................37
SECTION 21. GENERAL PROVISIONS ............................................37
21.1 Further Assurances ...............................................37
21.2 Waiver ...........................................................37
21.3 Broker ...........................................................37
21.4 Notices ..........................................................37
21.5 Entire Agreement .................................................38
21.6 Governing Law ....................................................38
21.7 Assignment .......................................................38
21.8 Counterparts .....................................................38
21.9 Interpretation and Construction ..................................38
21.10 Shareholder Representative ......................................39
21.11 Corporate Policies, etc .........................................39
21.12 Severability ....................................................39
21.13 Knowledge .......................................................39
EXHIBITS
EXHIBIT
A Articles of Merger
B Certificate of Merger
C Merger Consideration Allocation
D Escrow Agreement
E Schedule of Disclosures
F Opinion of Counsel for TXEN
G-1 Amendment to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Employment Agreement
G-2 Amendment to ▇▇▇▇ ▇. ▇▇▇▇▇▇ Employment Agreement
G-3 H. Grey Wood Employment Agreement
H Opinion of Counsel for Subsidiary
I Arbitration Provisions
SCHEDULE OF DISCLOSURES
SECTION
10.1 Foreign Jurisdiction List
10.3 Required Consents and Approvals List
10.6 Personal Property List
10.7 Financial Statements
10.8 Material Change List
10.9 Liabilities and Obligations List
10.10 List of Exceptions to Actions Since June 30, 1997
10.12 Taxes List
10.13 Leased Real Property List
10.15 Proprietary Rights List
10.16 Software List
10.17 Contracts List
10.18 Material Commitments List
10.19 Product Warranty List
10.20 Permit List
10.21 Employee Benefits List
10.23 Employee List
10.24 Litigation and Claims List
10.26 Customer List
10.27 Supplier List
10.28 Insurance Policies List
10.32 Accounts List
10.33 Transactions with Related Parties List
10.36 Shareholders/Number of Shares List
AGREEMENT OF MERGER
THIS AGREEMENT OF MERGER, (sometimes referred to as the "Agreement" or
the "Merger"), dated as of August 27, 1997, is among ▇▇▇▇▇▇▇ RESEARCH
CORPORATION, a Delaware corporation ("NRC"); NRC's wholly owned subsidiary,
▇▇▇▇▇▇▇ SELECT CORPORATION, a Delaware corporation ("Subsidiary" and
sometimes referred to as the "Surviving Corporation"); TXEN, INC., an
Alabama corporation, ("TXEN") and the holders of all of the $0.002 par
value Class A common stock of TXEN listed on the signature page to this
Agreement (the "Shareholders"). Subsidiary and TXEN shall sometimes be
referred to collectively as the "Constituent Corporations" and individually
as a "Constituent Corporation." The Shareholders execute and deliver this
Agreement for the purposes of (i) joining in the representations and
warranties of TXEN, (ii) providing indemnification to NRC and the Surviving
Corporation and (iii) acknowledging receipt and acquiescence in the
disclosures of certain matters with respect to NRC and its common stock.
W I T N E S S E T H:
Each Constituent Corporation deems it advisable for the general
welfare of Constituent Corporation and its shareholders that the
Constituent Corporations merge into a single corporation pursuant to this
Agreement and the applicable laws of the States of Delaware and Alabama.
Accordingly, TXEN shall be merged with and into the Subsidiary with
Subsidiary as the Surviving Corporation in accordance with and pursuant to
the provisions of Section 252 of the General Corporation Law of the State
of Delaware and Section 10-2B-11.07 of the Alabama Business Corporation
Act. The name of the Surviving Corporation shall be "▇▇▇▇▇▇▇ SELECT
CORPORATION." The Shareholders of the Constituent Corporations have
consented to this Agreement of Merger in accordance with Delaware and
Alabama law. NRC will make available to Subsidiary (as a contribution to
capital) a sufficient amount of cash and a sufficient number of restricted
(and unregistered) shares of NRC common stock, par value of $0.01 per share
(the "NRC Common Stock") to effect the Merger.
It is agreed that the terms and conditions of the Merger and the mode
of carrying it into effect shall be as follows:
SECTION 1. EFFECTIVE DATE
On August 29, 1997 (the "Closing Date"), provided the conditions to
the consummation of this Agreement have been satisfied or waived, a meeting
(the "Closing") shall take place at the office of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
L.L.C., in Birmingham, Alabama, at which time the parties to this Agreement
shall execute and deliver (i) the Articles of Merger and Certificate of
Merger attached hereto as Exhibits "A" and "B", respectively, to comply
with applicable filing and recording requirements of the States of Alabama
and Delaware and (ii) all other documents, certificates, opinions and
instruments contemplated herein. The date of such Articles and Certificate
shall be the Closing Date and the effective date of the Merger set forth in
such Articles and Certificate shall be August 31, 1997, at 11:59 p.m.,
Central Daylight Saving Time (the "Effective Date"). On the Closing Date,
an executed counterpart of the Certificate of Merger and Articles of Merger
shall be personally delivered, mailed or transmitted by facsimile for
filing in the appropriate filing offices in the States of Delaware and
Alabama.
SECTION 2. GOVERNING LAW
The Surviving Corporation shall be governed by the laws of the State
of Delaware.
SECTION 3. CAPITALIZATION AND CERTIFICATE OF INCORPORATION
The number of authorized shares of the capital stock of the Surviving
Corporation shall be 1,000 shares of common stock, par value of $1.00 per
share. The Certificate of Incorporation of Subsidiary as in effect on the
date of this Agreement shall be the Certificate of Incorporation of the
Surviving Corporation from and after the Effective Date.
SECTION 4. BYLAWS
The Bylaws of Subsidiary as in effect on the date of this Agreement
shall be the Bylaws of the Surviving Corporation.
SECTION 5. MERGER CONSIDERATION, CONVERSION OF SHARES
AND CAPITAL STOCK OF THE SURVIVING CORPORATION
5.1 CONTRIBUTION TO CAPITAL. On or prior to the Effective Date, NRC
shall transfer and deliver to Subsidiary, as a contribution to its capital,
such number of shares of NRC Common Stock and such amount of cash or other
immediately funds as shall be necessary to carry out the provisions of this
Section 5.
5.2 STOCK OF SUBSIDIARY; CLASS B COMMON STOCK. None of the capital
stock of Subsidiary issued and outstanding immediately prior to the
Effective Date shall be converted as a result of the Merger, but all of
such shares of capital stock shall remain issued and outstanding shares of
capital stock of the Surviving Corporation. On the Effective Date, each
share of $0.002 par value Class B common stock of TXEN, all of which is
owned by NRC, shall be cancelled and extinguished and none of the merger
consideration set forth in Section 5.3 below shall be paid to NRC.
5.3 MERGER CONSIDERATION. The Class A common stock of TXEN (the
"TXEN Common Stock") issued and outstanding immediately prior to the
Effective Date (excluding shares held by TXEN as treasury stock, which
shares shall be cancelled and extinguished on the Effective Date) shall,
upon the Effective Date, by virtue of the Merger and without any action on
the part of the holders thereof, be exchanged for and converted into such
number of shares of fully paid and nonassessable NRC Common Stock having a
value as hereinafter determined of $26,324,706.77 and cash in the amount of
$17,550,265.13 (the "Merger Consideration"). The TXEN Common Stock so
exchanged and converted is herein sometimes referred to as the "Converted
TXEN Stock." The value of the NRC shares of Common Stock shall be
determined based on the average of the daily weighted sale price of such
stock as quoted by National Association of Securities Dealers Automated
Quotation System for the ten business day period ending five days
immediately preceding the Closing. The Merger Consideration shall be paid
and allocated to each Shareholder in accordance with Exhibit "C" attached
hereto for each Shareholder and made a part hereof. The Shareholders shall
deposit into escrow a portion of the Merger Consideration identified on
Exhibit "C" for each Shareholder to be held pursuant to the Escrow
Agreement attached hereto as Exhibit "D."
5.4 EXCHANGE OF STOCK CERTIFICATES. As promptly as practicable after
the Effective Date, each holder of an outstanding certificate or
certificates theretofore representing shares of Converted TXEN Stock shall
surrender the same to an agent or agents designated by the Surviving
Corporation, and shall thereupon be entitled to receive in exchange
therefor the Merger Consideration as shown on Exhibit "C" for each
Shareholder. Dividends payable after the Effective Date to holders of
record in respect of shares of NRC Common Stock into which certificates for
shares of Converted TXEN Stock shall be exchangeable shall not be paid to
holders of such certificates until their certificates are surrendered for
exchange. Until so surrendered, each outstanding certificate which, prior
to the Effective Date, represented Converted TXEN Stock shall be deemed for
all corporate purposes to evidence ownership of the Merger Consideration
into which the shares of Converted TXEN Stock prior to the Effective Date
shall have been converted.
5.5 EXCHANGE AGENTS. NRC may direct the Surviving Corporation to
appoint an NRC employee, agent or representative, including, without
limitation, ▇▇▇▇▇ ▇▇▇▇▇▇▇, as the exchange agent for purposes of this
Section of the Merger Agreement. Adoption of this Agreement by the
Shareholders of TXEN shall constitute ratification of the appointment of
such exchange agent at the direction of NRC or the Surviving Corporation.
5.6 STOCK OPTIONS.
(a) At the Effective Date, each option to purchase shares of
TXEN Class A Common Stock pursuant to an option grant under the TXEN, Inc.,
1996 Incentive Stock Option Plan or the TXEN, Inc., Key Employee Incentive
Stock Option Plan (the "Option Plans") which are outstanding at the
Effective Date (the "TXEN Options"), whether or not exercisable, shall be
converted into and become rights with respect to NRC Common Stock, and NRC
shall assume each TXEN Option, in accordance with the terms of the Option
Plan by which it is evidenced, except that from and after the Effective
Date, (i) NRC and NRC's Board of Directors shall be substituted for TXEN
and the Committee of TXEN's Board of Directors (including, if applicable,
the entire Board of Directors of TXEN) administering such Option Plans,
(ii) each TXEN Option assumed by NRC may be exercised solely for shares of
NRC Common Stock, (iii) the number of shares of NRC Common Stock subject to
such options shall be equal to the number of shares of TXEN Common Stock
subject to each such TXEN Option immediately prior to the Effective Date
multiplied by .451677 (the "Exchange Ratio"), and (iv) the per share
exercise price under each such TXEN Option shall be adjusted by dividing
the per share exercise price under each such TXEN Option by the Exchange
Ratio and rounding up to the nearest cent. Notwithstanding the provisions
of clause (iii) of the preceding sentence, NRC shall not be obligated to
issue any fraction of a share of NRC Common Stock upon exercise of TXEN
Options, and any fraction of a share of NRC Common Stock that otherwise
would be subject to a converted TXEN Option shall represent the right to
receive a cash payment upon exercise between the market value of one share
of NRC Common Stock at the time of exercise of such option and the per
share exercise price of such option. The market value of one share of NRC
Common Stock at the time of exercise of an option shall be the closing
price of such NRC Common Stock on the Nasdaq National Market (as reported
by THE WALL STREET JOURNAL or, if not reported thereby, any other
authoritative source selected by NRC) on the last trading day preceding the
date of exercise. NRC and TXEN agree to take all necessary steps to
effectuate the foregoing provisions of this Section 5.6.
(b) As soon as practicable after the Effective Date, NRC shall
deliver to the participants in the Option Plans an appropriate notice,
setting forth such participant's rights pursuant thereto and the grants
subject to such Option Plans shall continue in effect on the same terms and
conditions (subject to the adjustments required by Section 5.6(a) after
giving effect to the Merger). Within 90 days after the Effective Date, NRC
shall file a registration statement on Form S-8 (or any successor or other
appropriate forms), with respect to the shares of NRC Common Stock subject
to such options and shall use its reasonable efforts to maintain the
effectiveness of such registration statements (and maintain the current
status of the prospectus or prospectuses contained therein) for so long as
such options remain outstanding.
(c) All contractual restrictions or limitations on transfer with
respect to TXEN Common Stock awarded under the Option Plans or any other
plan, program or contract of TXEN, to the extent that such restrictions or
limitations shall not have already lapsed (whether as a result of the
Merger or otherwise), and except as otherwise expressly provided in such
plan, program, or contract, shall remain in full force and effect with
respect to shares of NRC Common Stock into which such restricted stock is
converted pursuant to Section 5.6 of this Agreement.
(d) TXEN has an option to purchase 119,732 shares of TXEN Common
Stock from ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇, which constitute the
source of the TXEN Common Stock needed to fund the Option Plans. At the
Closing, such option shall be assigned by virtue of the Merger to the
Surviving Corporation which shall thereupon have the right to purchase from
Messrs. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ the shares of NRC Common Stock into which such
119,732 shares of TXEN Common Stock have been converted for the purpose of
funding the Option Plans with NRC Common Stock.
5.7 RESTRICTED STOCK. The NRC Common Stock to be transferred to the
Shareholders in exchange for their TXEN Common Stock will not be registered
under the Securities Act of 1933 (the "1933 Act") or the securities laws of
any state, and will therefore be restricted securities. Consequently, the
NRC Common Stock to be received by the Shareholders in the Merger will not
be transferrable unless registered under the 1933 Act or exempt from
registration thereunder and registered under securities laws of applicable
states or exempt from registration thereunder. By their signature to this
Merger Agreement, each Shareholder represents and warrants that he or she
has been advised that the NRC Common Stock will be "Restricted Securities"
within the meaning of the 1933 Act and applicable state securities laws and
further represents and warrants that he or she has been advised of the
resale limitations.
SECTION 6. BOARD OF DIRECTORS AND OFFICERS
On the Effective Date, the members of the Board of Directors of the
Surviving Corporation shall be ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
SECTION 7. EFFECT OF MERGER
On the Effective Date, the separate existence of TXEN shall cease and
it shall be merged with and into the Surviving Corporation. On the
Effective Date, all the rights, privileges, powers and franchises of each
of the Constituent Corporations, both of a public and private nature, all
property, real, personal, and mixed, all debts due on account, and all
other things in action and all intangible assets belonging to each of the
Constituent Corporations and all and every other interests shall be
transferred to and vested in the Surviving Corporation, without further act
or deed, as effectually as they were vested in the respective Constituent
Corporations; and the title to any property, whether vested by deed or
otherwise, in either of the Constituent Corporations shall not revert or be
in any way impaired by reason of the Merger. The Surviving Corporation
shall thereafter be responsible for all debts, liabilities, obligations,
restrictions, disabilities and duties of each of the Constituent
Corporations and all said debts, liabilities, obligations, restrictions,
disabilities and duties shall thereafter attach to the Surviving
Corporation and may be enforced against it to the same extent as if they
had been incurred or contracted by it, but the liabilities of each
Constituent Corporation or of its stockholders, directors, or officers
shall not be affected, nor shall the rights of creditors of each
Constituent Corporation or of any person dealing with either Constituent
Corporation or any liens upon the property of either Constituent
Corporation be impaired by the Merger and any action or proceeding pending
by or against either of the Constituent Corporations may be carried to
judgment the same as if the Merger had not taken place, which judgment
shall bind the Surviving Corporation, or the Surviving Corporation may be
proceeded against or substituted in its place. In accordance with the
provisions of this Agreement, the General Corporation Law of the State of
Delaware and the Alabama Business Corporation Act, at the Effective Date,
TXEN shall be merged with and into Subsidiary, with Subsidiary as the
Surviving Corporation, and the Surviving Corporation shall be a wholly
owned subsidiary of NRC, but shall continue its corporate existence under
the laws of the State of Delaware. The separate corporate existence of
TXEN shall terminate at the Effective Date.
SECTION 8. APPROVAL OF SHAREHOLDERS
This Agreement, the Certificate of Merger and the Articles of Merger
have been approved by the shareholders of each Constituent Corporation as
provided by Section 228 of the General Corporation Laws of the State of
Delaware and Section 10-2B-11.03 of the Alabama Business Corporation Act.
However, it shall be a condition to the Closing of the transaction
contemplated by this Agreement that no Shareholder shall have filed
dissenter's rights, an appraisal remedy or similar proceeding seeking the
fair value of his common stock in TXEN.
SECTION 9. REPRESENTATIONS AND WARRANTIES OF
▇▇▇▇▇▇▇ RESEARCH CORPORATION AND SUBSIDIARY
NRC and Subsidiary, jointly and severally, represent and warrant that:
9.1 ORGANIZATION; STANDING; CORPORATE POWER. Subsidiary and NRC are
each a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. Subsidiary is a wholly-owned
subsidiary of NRC. NRC and Subsidiary each have all requisite power and
authority, corporate and otherwise, to carry on and conduct their
respective businesses as they are now being conducted and to own and lease
their properties and assets.
9.2 AUTHORITY. Subsidiary and NRC each has full legal right, power,
and authority to execute and deliver this Agreement and to carry out the
transactions contemplated hereby. All corporate and other acts or
proceedings required to be taken by Subsidiary and NRC to authorize the
execution, delivery, and performance of this Agreement and all transactions
contemplated hereby have been duly and properly taken.
9.3 APPROVALS AND CONSENTS. No approval, authorization, consent,
order, or action of, or filing with, any person, entity, court,
administrative agency, or other governmental authority is required for the
execution and delivery by Subsidiary and NRC of this Agreement or the
documents to be delivered at Closing or the consummation by Subsidiary and
NRC of the transactions contemplated hereby or thereby.
9.4 VALIDITY. This Agreement has been, and the documents to be
delivered by Subsidiary and NRC at Closing will be, duly executed and
delivered and constitute lawful, valid, and binding obligations of
Subsidiary and NRC enforceable in accordance with their terms, subject to
bankruptcy, insolvency, reorganization, moratorium, and other laws
affecting the rights of creditors generally and to the discretion of a
court in granting equitable relief. The approval of the shareholders of
NRC is not required for the authorization or issuance of the NRC Common
Stock or for any of the other transactions contemplated by this Agreement.
9.5 NO BREACH. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby are not prohibited by,
will not violate or conflict with any provision of, and will not constitute
a default under or a breach of (a) the charter or bylaws of Subsidiary or
NRC, (b) any contract, agreement, or other instrument to which Subsidiary
or NRC is a party, (c) any order, writ, injunction, decree, or judgment of
any court or governmental agency, or (d) any law, rule, or regulation
applicable to Subsidiary or NRC.
9.6 FINDERS. No finder or broker has acted or is acting on behalf of
Subsidiary or NRC in connection with the transactions contemplated by this
Agreement.
9.7 PERIODIC REPORTS. The information in the NRC Forms 10-Q Reports
for the first, second and third quarters of 1997, NRC's Annual Report to
its Shareholders for 1996, NRC's Proxy Statement for the 1996 Annual
Shareholders Meeting and NRC's Form 10-K for 1996 (copies of which have
been furnished to each Shareholder of TXEN) did not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
9.8 FINANCIAL STATEMENTS. The Consolidated Balance Sheets of NRC and
its subsidiaries as of August 31, 1996, and the related Consolidated
Statements of Income, Shareholders' Equity and Cashflow for the year ended
August 31, 1996, including the Notes thereto, as included in the NRC Form
10-K Report for 1996, have been prepared in conformity with generally
accepted accounting principles consistently applied and present fairly the
consolidated financial position of NRC and its subsidiaries as of August
31, 1996, and their consolidated results of operations for the period then
ended. The Consolidated Balance Sheets, Statements of Income,
Shareholders' Equity and Cashflows, and the Notes thereto set forth in the
NRC Quarterly 10-Q Reports for the first, second and third quarters of
fiscal year 1997 have been prepared in conformity with generally accepted
accounting principles consistently applied and present fairly the
consolidated financial position of NRC and its subsidiaries as of such
quarterly date then ended, subject to normal year-end audit adjustments and
any other adjustments described therein.
SECTION 10. REPRESENTATIONS AND WARRANTIES
OF TXEN AND SHAREHOLDERS
Subject to any exceptions described in the schedule of disclosures
attached as Exhibit "E" to this Agreement (the "Schedule"), and the limited
representations and warranties with respect to the Board of Directors of
the University of Alabama for the use of and on behalf of the University of
Alabama, Tuscaloosa, Alabama (the "University") set forth in Section 10.40
hereof, TXEN and each of the Shareholders, jointly and severally,
represent and warrant to NRC and Subsidiary that:
10.1 ORGANIZATION; STANDING; CORPORATE POWER. TXEN is a corporation
duly organized, validly existing, and in good standing under the laws of
the State of Alabama. TXEN has full power and authority, and all requisite
licenses, permits, and franchises, to own, lease, and operate its
properties and to carry on its business as currently conducted. TXEN is
duly licensed and qualified to do business as a foreign corporation and is
in good standing in all jurisdictions where failure to be so licensed or
qualified would have a material adverse effect upon its business or
properties. Schedule 10.1 sets forth an accurate, correct, and complete
list of all jurisdictions in which TXEN is licensed and qualified to do
business. The authorized capital stock of TXEN consists of the following:
Par Value Shares Shares
Designation Per Share Authorized Outstanding
----------- --------- ---------- -----------
Class A Common Stock $0.002 5,000,000 4,000,500
Class B Common Stock $0.002 1,250,000 999,500
Preferred Stock $0.002 1 -0-
The shares of TXEN capital stock issued and outstanding are owned as
follows:
Shareholder Number of Shares
----------- ----------------
Class A Class B
------- --------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 1,820,763 -0-
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Trustee of the
▇▇▇▇▇▇▇▇▇ Family Charitable Unitrust,
established August 5, 1997 366,000 -0-
▇▇▇▇ ▇. ▇▇▇▇▇▇ 781,255 -0-
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 245,000 -0-
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 50,000 -0-
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 18,750 -0-
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 42,500 -0-
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 22,500 -0-
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 31,266 -0-
▇▇▇▇ ▇▇▇▇▇▇▇ 7,500 -0-
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 2,500 -0-
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 22,500 -0-
▇▇▇ ▇. ▇▇▇▇▇▇▇ 25,000 -0-
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 25,000 -0-
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ 11,000 -0-
▇▇▇▇ ▇. ▇▇▇▇▇▇ 37,500 -0-
▇▇▇▇▇ ▇. ▇▇▇▇▇ 2,000 -0-
▇▇▇ ▇. Sailor 12,500 -0-
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 46,200 -0-
▇▇▇▇▇ ▇. Till 31,266 -0-
▇▇▇▇▇▇ ▇▇▇▇ 7,500 -0-
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 25,000 -0-
▇▇▇▇▇ ▇. ▇▇▇▇▇ 7,500 -0-
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 37,500 -0-
H. Grey Wood 165,000 -0-
▇▇▇▇▇▇▇ Research Corporation -0- 999,500
University 157,000 -0-
There are no warrants, options or other rights with respect to the capital
stock of TXEN, except with respect to an option described below to acquire
119,732 shares of Class A common stock for issuance pursuant to the Option
Plans. A list of the Optionees has been furnished NRC. TXEN has an
option, a copy of which has been furnished NRC, to purchase up to 119,732
shares of TXEN Common Stock from ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇ for
the purpose of funding the Option Plans. The aggregate purchase price for
the stock TXEN may purchase from Messrs. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ is equal to
the aggregate option exercise price TXEN will receive upon exercise of
options granted pursuant to the Option Plans.
10.2 AUTHORITY. TXEN has full legal right, power, and authority to
execute and deliver this Agreement and to carry out the transactions
contemplated hereby. All corporate and other acts or proceedings required
to be taken by TXEN to authorize the execution, delivery, and performance
of this Agreement and all transactions contemplated hereby have been duly
and properly taken.
10.3 APPROVALS AND CONSENTS. Except for the consents required as set
forth on Schedule 10.3, no approval, authorization, consent, order, or
action of, or filing with, any person, entity, court, administrative
agency, or other governmental authority is required for the execution and
delivery by TXEN of this Agreement or the documents to be delivered at
Closing or the consummation by TXEN of the transactions contemplated hereby
or thereby.
10.4 VALIDITY. This Agreement has been, and the documents to be
delivered at Closing will be, duly executed and delivered and constitute
lawful, valid, and binding obligations of TXEN and the Shareholders
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, reorganization, moratorium, and other laws affecting the rights
of creditors generally and to the discretion of a court in granting
equitable relief.
10.5 NO BREACH. Subject to the receipt of all consents and approvals
set forth on Schedule 10.3, the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby will not
result in the creation of a lien, charge, or encumbrance on the business or
properties of TXEN and are not prohibited by, will not violate or conflict
with any provision of, and will not constitute a default under or a breach
of (a) the charter or by-laws of TXEN, (b) any contract, agreement, or
other instrument to which TXEN is a party or to which any of its assets or
properties are subject, (c) any order, writ, injunction, decree or judgment
of any court or governmental agency, or (d) any law, rule, or regulation
applicable to TXEN or its business and assets.
10.6 PERSONAL PROPERTY. Schedule 10.6 contains a materially true and
complete list of all of TXEN's tangible personal property, whether owned or
leased, including, without limitation, all of the machinery, equipment,
computer equipment, furniture, vehicles, fixtures, tools, tooling
inventory, materials handling equipment, parts and other tangible property
of TXEN (the "Personal Property"). Except as disclosed on Schedule 10.6,
TXEN has, and will on the Closing Date have, good and marketable title to
all of the Personal Property free and clear of all security interests,
liens, pledges, encumbrances, or restrictions, other than liens for
personal property taxes and assessments, both general and special, that are
not yet due and payable.
10.7 FINANCIAL STATEMENTS. Set forth on Schedule 10.7 are the
following financial statements of TXEN: (i) an audited balance sheet as of
June 30, 1997, and (ii) an audited income statement for the year ended June
30, 1997. These financial statements (i) were prepared in accordance with
the books and records of TXEN, and (ii) fairly present the financial
condition and results of operations of TXEN as of the dates and for the
period indicated and fairly present the information purported to be shown
therein.
10.8 NO MATERIAL CHANGE. Except as set forth on Schedule 10.8, since
June 30, 1997, there has not been:
(a) Any material adverse change in the financial condition,
results of operations, or prospects of TXEN or any adverse change
in TXEN's personnel, or in TXEN's relationships with suppliers,
customers, distributors, lenders, or others having a business
relationship with it;
(b) Any damage, destruction, or loss, whether or not
covered by insurance, materially adversely affecting the assets
or properties of TXEN or the operations of TXEN's business; or
(c) Any labor dispute materially affecting TXEN's
operations.
10.9 UNDISCLOSED LIABILITIES AND OBLIGATIONS. Except as disclosed on
Schedule 10.9, TXEN has no liabilities or obligations, whether fixed or
contingent, known or unknown, other than:
(a) Liabilities fully shown or reserved against on TXEN's
balance sheet as of June 30, 1997, or disclosed in the notes to
the financial statements;
(b) Current liabilities, not unusual in nature or amount,
incurred by TXEN in the ordinary course of business since June
30, 1997;
(c) Obligations to be performed under the leases,
contracts, and commitments identified on Schedule 10.17; and
(d) Obligations to be performed pursuant to the warranty
obligations identified on Schedule 10.19.
10.10 ACTIONS SINCE JUNE 30, 1997. Except as disclosed in Schedule
10.10 since June 30, 1997, and prior to the Effective Date TXEN has not and
will not have:
(a) Except in the usual and ordinary course of business,
consistent with past practice, incurred any indebtedness,
obligations or liabilities, or guaranteed any indebtedness;
(b) Increased the regular rate of compensation payable by TXEN
to any employee or increased such compensation to employees by bonus,
percentage, compensation service award or similar arrangement and no
such increase is required by the terms of any law or contracts;
(c) Established or agreed to establish any pension, retirement
or welfare plan for the benefit of employees;
(d) Made any single capital expenditure which exceeded $25,000
or made aggregate capital expenditures which exceeded $50,000;
(e) Written down the value of any of its assets or properties or
written off as uncollectible any notes or accounts receivable, except
for write-downs and write-offs in the ordinary course of business of
TXEN, consistent with past practice, or revalued any of its assets or
properties;
(f) Paid, loaned or advanced any amount to, or sold, transferred
or leased any properties or assets to, or entered into any agreement
or arrangement with, NRC, Subsidiary, any Shareholder or any of the
officers or directors of NRC, Subsidiary, TXEN, or Shareholders,
except for reimbursement of ordinary and reasonable business expenses
related to the business of TXEN;
(g) Amended or terminated any material contract, agreement or
license to which TXEN is a party;
(h) Made any change in any method of accounting or accounting
practice;
(i) Cancelled, or failed to continue, insurance coverage;
(j) Acquired, whether by merger, purchase of stocks or purchase
of assets, all or substantially all of the business or assets of any
other business or entity, or engaged in negotiations of any sort
concerning such acquisitions;
(k) Issued any stock or other securities, or taken any action
with respect thereto, or paid any dividends, or made any other
distributions to Shareholders with respect to their stock in TXEN;
(l) Entered into any material contracts, agreements, licenses or
leases except in the ordinary course of TXEN's business, consistent
with past practice;
(m) Mortgaged, pledged, or subjected to lien or other
encumbrance any of the assets or properties of TXEN;
(n) Disposed of any assets or rights, other than the disposal
of property that is worn-out or obsolete, and other than the sale of
inventory in the ordinary course of business;
(o) Canceled or waived any rights or claims of material value;
(p) Changed any credit practices or methods of maintaining books,
accounts, or business records; or
(q) Entered into any material transactions other than in the
ordinary course of business.
10.11 INVENTORY. TXEN has no material inventory for resale and does
not carry material inventory in the ordinary course of business.
10.12 TAX MATTERS. TXEN has previously delivered to NRC true and
correct copies of the tax returns and work papers of TXEN for the 5-year
period ending June 30, 1997. Except as set forth on Schedule 10.12, TXEN
has timely filed with the appropriate governmental agencies all tax returns
and tax reports (including, without limitation, those pertaining to income
taxes, excise taxes, sales and use taxes, payroll taxes, real property
taxes, tangible and intangible personal property taxes, and franchise taxes
- collectively, "Taxes") required to be filed by TXEN as of the Effective
Date; all Tax returns previously filed by TXEN constitute complete and
accurate representations of the Tax liabilities of TXEN for the periods
covered thereunder; all Taxes, interest, and penalties shown or claimed to
be due thereon have been paid; TXEN has no liability, contingent or
otherwise, for any Taxes, interest, and penalties except for amounts shown
on the Financial Statements described in Section 10.7 and accrued on the
books and records of TXEN thereafter in the ordinary course of business; no
agreement has been made by TXEN with the Internal Revenue Service or any
state or municipal official waiving any statute of limitation or extending
the period for assessment and collection of any Tax; TXEN is not a party to
any action or proceeding by any governmental authority for the assessment
or collection of Taxes, interest, or penalties, and no outstanding claim
for assessment or collection of Taxes, interest, or penalties has been
asserted against TXEN. The Internal Revenue Service has not examined the
federal income tax returns of TXEN. There is no audit for any year
pending. No agreement has been made with the Internal Revenue Service or
with any other governmental agency for extending the period of assessment
or collection of any Tax that would involve TXEN.
10.13 REAL PROPERTY.
(a) TXEN owns no fee simple interest in real property or
easement rights. Except as disclosed on Schedule 10.13, TXEN does not
lease any real property. All real property noted on Schedule 10.13 as
being leased is referred to herein as the "Leased Real Property" and
all leases relating to the Leased Real Property are disclosed on
Schedule 10.13 and are referred to herein as the "Leases." TXEN has a
good and valid leasehold as to the Leased Real Property leased by it,
free and clear of all mortgages, security interests, title defects,
pledges, liens and the possibility of liens, charges, tenancies,
restrictions and encumbrances other than Taxes and assessments, both
general and special, which are a lien but not yet due and payable that
do not, individually or in the aggregate, materially detract from the
value of the Leased Real Property or materially impair the use and
operation thereof in carrying on the business of TXEN. There are no
pending or, to the best knowledge of TXEN, threatened proceedings in
eminent domain involving the Leased Real Property or any portion
thereof, or for a sale in lieu thereof, or of any plans for a possible
widening of the streets abutting the Leased Real Property or the
imposition of any special taxes or assessments against the Leased Real
Property or any portion thereof. To the best knowledge of TXEN, the
applicable zoning (without reliance on any variance, special permit or
nonconforming use or other similar use), building, environmental,
health and safety laws and regulations permit as a matter of right and
without the incurrence by Surviving Corporation of any obligation or
liability (including the obligation to incur any costs or expenses)
the continued use of the Leased Real Property by Surviving Corporation
for the same purposes and uses as same have been heretofore used by
TXEN, including the operation of TXEN's business.
(b) Except as disclosed on Schedule 10.13, there are no
outstanding written or oral leases covering or in any way affecting,
and there are no tenants occupying or having the right to occupy, the
Leased Real Property or any part thereof, other than the Leases. To
the best of TXEN's knowledge, no person or entity has any right with
respect to such Leased Real Property (whether by option to purchase,
land contract, or otherwise) which would prevent or interfere with
possession or use of the Leased Real Property by the Surviving
Corporation on and after the Effective Date.
(c) The Leases are in full force and effect. TXEN has
heretofore provided to NRC a complete, true, and correct copy of the
Leases, including any and all modifications or amendments thereof and
any supplements thereto. All material terms, conditions, and
provisions of the Leases to be performed by TXEN and, to the best
knowledge of TXEN, by the landlords, have been duly and timely
performed and complied with. To the best knowledge of TXEN, no event
has occurred or failed to occur which with the giving of notice, the
passage of time, or both, would constitute a default by the landlords
or TXEN under any of the Leases. The landlords have not waived, or
extended the time for performance of, any obligation of TXEN under any
of the Leases. There are no security deposits or prepaid rent
(including last month's rent in advance) with respect to the Leased
Real Property.
(d) To the best knowledge of TXEN, there are no prohibitions or
other limitations, whether contained in the Leases or otherwise, on
TXEN's right to transfer the Leased Real Property in connection with
this Agreement. Except as specifically noted on Schedule 10.13, no
consent, authorization, or approval is required under the Leases in
connection with the consummation of the transactions contemplated
hereby or TXEN's ability to consummate the transactions contemplated
hereby.
10.14 TITLE AND CONDITION OF THE ASSETS AND PROPERTIES. The assets
and properties currently utilized by TXEN, whether owned or leased, are in
all material respects in good operating condition and repair and are
suitable for the purposes for which they are presently being used. Such
assets and properties conform in all material respects to all applicable
laws, ordinances, and regulations, and TXEN has not received any written
notice to the contrary. TXEN is the sole and exclusive legal and equitable
owner of all right, title and interest in, and has good and marketable
title to, all of its assets and properties, tangible and intangible, except
for such Personal Property that is leased by TXEN and specifically
identified as being leased on Schedule 10.6 and except for licenses
specifically identified on Schedules 10.15 or 10.16.
10.15 PROPRIETARY RIGHTS. Schedule 10.15 sets forth a list of
material inventions, trade secrets, processes, proprietary rights, product
specifications, blueprints, drawings, technical data, engineering
information, other proprietary knowledge and know-how, patents, trademarks,
service marks, trade names, copyrights, marks, symbols, logos, and all
material documentation related thereto, and all licenses and agreements in
respect thereof and applications therefor (collectively, "Proprietary
Rights") used or related to TXEN's business. The Proprietary Rights
described on Schedule 10.15 include all of the Proprietary Rights necessary
for the operation of TXEN's business. Except as set forth on
Schedule 10.15, which includes a listing of contracts or licenses pursuant
to which TXEN uses the intellectual property of third parties, with respect
to the Proprietary Rights, (a) TXEN is the sole and exclusive owner of and
has the sole and exclusive right to use its Proprietary Rights; (b) no
action, suit, arbitration, or other proceeding or investigation is pending
or, to the best knowledge of TXEN, threatened which involves any
Proprietary Rights, (c) to the best knowledge of TXEN, none of the
Proprietary Rights infringes upon, conflicts with, or otherwise violates
the rights of others or is being infringed upon by others, (d) none of the
Proprietary Rights is subject to any outstanding order, decree, judgment,
stipulation, or charge, (e) there are no royalty, commission, or similar
arrangements and no licenses, sublicenses, or agreements relating to any of
the Proprietary Rights, (f) TXEN has not received any notice of
interference or infringement of or by the Proprietary Rights, (g) TXEN has
not agreed to indemnify any person or entity for or against any
infringement of or by the Proprietary Rights, (h) no other Proprietary
Rights not owned by TXEN are necessary for the conduct of TXEN's business,
and (i) to the best knowledge of TXEN, no other party is operating a
business or otherwise acting in violation or infringement of, TXEN's
Proprietary Rights. Except as set forth on Schedule 10.15, TXEN has good
and marketable title to the Proprietary Rights listed on Schedule 10.15,
free and clear of all security interests, liens, pledges, encumbrances and
restrictions. Except as set forth on Schedule 10.15, all rights of TXEN in
and to its Proprietary Rights are transferable to Surviving Corporation as
contemplated herein without the consent or approval of any third party.
TXEN is not subject to any judgment, order, writ, injunction, or decree of
any court, arbitrator, or governmental agency or instrumentality, domestic
or foreign, and is not party to any agreement, which restricts or impairs
the use of any Proprietary Rights.
10.16 SOFTWARE AND INFORMATION SYSTEMS.
(a) The software described on Schedule 10.16 includes all
information systems, programs and software, other than non-exclusive
commercial software, used in or related to TXEN's business or
necessary for the operation of such business. Schedule 10.16 lists
all such software and identifies (a) software which is owned by TXEN,
(b) software which is licensed to TXEN, and (c) any other software in
which TXEN has any use, possessory, or proprietary rights and which is
used in or related to its business. Except as set forth on
Schedule 10.16, TXEN has the sole and exclusive right, title, and
interest in and to all software listed on Schedule 10.16. Except as
set forth on Schedule 10.16, TXEN has good and marketable title to the
software listed, free and clear of all security interests, liens,
pledges, encumbrances and restrictions. Except as set forth on
Schedule 10.16, all of the software which is owned by TXEN, including
all related source codes and documentation, is owned solely by TXEN
and has not been disclosed to any unaffiliated entity or person. The
proprietary software owned by TXEN includes, without limitation, TXEN
FirstStepp. The proprietary software owned by TXEN is (i) owned
exclusively by TXEN, (ii) not subject to any liens, claims, security
interests or encumbrances, (iii) not subject to any outstanding
licenses or agreements, except for the non-exclusive licensing of such
proprietary software by TXEN to customers in the ordinary course of
business in the manner disclosed to Subsidiary, (iv) merchantable and
fit for the purposes for which such software is intended for use, (v)
conforming in all material respects with the specifications and
documentation for such software and (vi) without material defects or
material programming errors.
(b) Schedule 10.16 incorporates by reference manuals (copies of
which have been made available to and furnished to NRC) which describe
the functions of all proprietary information systems, programs and
software of TXEN. TXEN has documentation in reasonable detail
relating to all such proprietary information systems, programs and
software. Schedule 10.16 identifies each person or entity to whom
TXEN has licensed or granted any other rights to any other proprietary
information systems, programs and software. Except as disclosed on
Schedule 10.16(b), no source code or object code of TXEN is escrowed
for the benefit of any third party. Except as disclosed on Schedule
10.16(b), none of the information systems, programs and software of
TXEN infringe on any patents, trademarks, copyrights or other rights
or intellectual property rights of any third persons. To the best
knowledge of TXEN, no information systems, programs and software used
or owned by any third person or entity infringe on any rights of TXEN
in and to the information systems, programs and software of TXEN.
TXEN has taken reasonable measures necessary to maintain and protect
the information systems, programs and software of TXEN and no claims
have been asserted by any person or entity to the use of the same or
challenging or questioning the validity or effectiveness of the same,
and, to the best knowledge of TXEN, there is no valid basis to any
such claim.
(c) Schedule 10.16 also contains a list of the current software
development and consulting activities and projects of TXEN. TXEN has
described such projects and developments to NRC. TXEN knows of no
impediments to fully developing and exploiting the information
systems, programs and software currently under development or to
performing its currently pending consulting contracts.
10.17 CONTRACTS AND LEASES. Schedule 10.17 sets forth an accurate and
complete list of each of the following verbal or written contracts,
agreements and leases ("Contracts") to which TXEN is a party:
(a) Personal and real property leases;
(b) Material licenses, including without limitation,
licenses of software, intellectual property or Proprietary
Rights;
(c) Contracts for capital expenditures in excess of
$25,000;
(d) Contracts for the purchase of machinery, equipment, or
fixtures involving expenditures in excess of $25,000;
(e) Royalty agreements;
(f) Agencies;
(g) Marketing agreements, reseller agreements, original
equipment manufacturer agreements and training agreements;
(h) Contracts, arrangements, consulting agreements, bids,
proposals, software agreements, licenses, maintenance agreements,
support agreements, warranties, purchase orders, agreements, or
commitments of any kind or character which (i) relate in any
material way to the business activities of TXEN, to the
information systems, programs and software of TXEN or to TXEN's
services with respect thereto or (ii) involve the expenditure by
or receipt of TXEN of more than $25,000 or involve any commitment
or obligations of TXEN for a period of over one (1) month;
(i) Instruments evidencing or related to the deferred
purchase price of property in excess of $25,000 (including trade
payables);
(j) Joint venture, partnership, limited liability company
or other arrangements involving a sharing of profits;
(k) Contracts with any government or any agency or
instrumentality thereof;
(l) Contracts with respect to the discharge or removal of
effluent, wastes, or pollutants;
(m) Contracts with any dealer, agent, representative,
manufacturer's representative, distributor, or sales agent;
(n) Employee benefit, bonus or compensation agreements,
collective bargaining agreements or employment agreements or any
other agreements or arrangements with respect to employees
(including, without limitation, a list of employee accrued
vacation and sick leave, severance, and other benefits);
(o) Confidentiality or non-competition agreements; and
(p) Other agreements not entered into in the ordinary
course of business.
Except as set forth on Schedule 10.17, to the best knowledge of TXEN, TXEN
has performed and is performing all material obligations to be performed by
it under each Contract, and, to the best knowledge of TXEN, the other
parties thereto have performed and are performing all material obligations
to be performed by them. To the best knowledge of TXEN, TXEN is not in
default, and has not received any notice of default, under any Contract.
No event has occurred which, with notice or lapse of time or both, would
constitute a default by TXEN thereunder. To the best knowledge of TXEN,
none of the Contracts is subject to any impending cancellation or breach
that will result in a loss or otherwise materially adversely affect the
operations of TXEN's business. Except as disclosed on Schedule 10.17, all
Contracts are assignable to Surviving Corporation and no consents are
required except as provided on Schedule 10.3.
10.18 MATERIAL COMMITMENTS. As used in this Section 10.18, the term
"Material Commitments" means each Contract of TXEN which obligates TXEN to
sell, license, distribute, deliver or provide products or services for a
consideration in excess of $25,000 or over a period of more than one (1)
month. Schedule 10.18 sets forth a "Project List" with respect to each
Material Commitment. The Project List sets forth TXEN's production
schedule or performance schedule, and budget, with regard to each Material
Commitment. Except as described in the Project List, the performance of
TXEN or any other party involved with each Material Commitment is on
schedule and within budget, and no practical or technological problems have
been encountered that might reasonably be expected to impede completion or
materially increase the cost of TXEN's performance. Each Material
Commitment was made on a basis calculated to produce a profit under the
circumstances prevailing when it was made, and TXEN is not aware of any
circumstances that might reasonably be expected to prevent the realization
of a profit. Except as set forth on the Project List, no Material
Commitment involves the development of any product or technology that, to
the best knowledge of TXEN, would infringe on the proprietary rights of any
other party.
10.19 WARRANTIES, SERVICE COMMITMENTS, AND MAINTENANCE AGREEMENTS.
Schedule 10.19 contains a correct and complete list of all warranties,
service commitments, and maintenance and/or support agreements, and a
statement or description of the warranties and commitments (e.g. length of
warranty, claims covered, etc.) including, without limitation, all software
service and maintenance agreements, in effect with respect to any products
or services heretofore manufactured, sold, licensed or provided by TXEN.
Except as described on Schedule 10.19, there are no express or implied
warranties outstanding with respect to products or services created, sold,
licensed, provided or otherwise distributed by TXEN. The warranty and
return experience for the three years ended June 30, 1997, is set forth on
Schedule 10.19. Except as set forth on Schedule 10.19, since June 30,
1994, no warranty or service claim in excess of $5,000 has been made
against TXEN, or is pending or, to the best knowledge of TXEN, is
threatened in connection with any product or service manufactured, sold,
licensed or provided by TXEN.
10.20 PERMITS AND LICENSES; COMPLIANCE WITH LAWS. Except as set forth
on Schedule 10.20, TXEN does not own any material permits, licenses, or
other governmental authorizations, and none are required for the operation
of the business as presently conducted. Neither the ownership of its
assets by TXEN, nor the operation of its business as presently and
ordinarily conducted, violates any applicable order, law, ordinance, code,
or regulation. No investigation is pending or, to the best knowledge of
TXEN, threatened concerning any such matter, and TXEN has not received any
notice of any such violation and no basis therefor exists.
10.21 EMPLOYEE BENEFITS. Schedule 10.21 sets forth an employee
benefits list, which identifies each agreement, plan, or arrangement for
employee benefits, including any bonus, deferred compensation, severance,
disability, sick pay, salary continuation, death benefit, vacation, stock
purchase or stock option, hospitalization or other medical, life, or other
insurance, supplemental unemployment benefit, profit-sharing, pension, or
retirement plan or arrangement maintained or contributed to by TXEN in
connection with its business (the "Benefit Plans"). Except as identified
on Schedule 10.21, none of TXEN's Benefit Plans is an "employee pension
benefit plan" as defined in Section 3(2) of ERISA. To the best of TXEN's
knowledge, all of the Benefit Plans and related trusts are in form and have
been administered in compliance with all applicable laws, including ERISA
and the Code; none of the Benefit Plans or related trusts, or any
administrator or trustee thereof, or party-in-interest or disqualified
person thereto has engaged in a transaction that could cause any of them to
be liable for a civil penalty under Section 409 or 502(i) or other section
of ERISA or a tax under Section 4975 or 4976 or other section of Chapter 43
of Subtitle D of the Code; all amounts required to be paid by TXEN to or
pursuant to each of the Benefit Plans or related trusts on or before the
date of this Agreement have been paid; no employee pension benefit plan has
incurred any "accumulated funding deficiency," as defined in Section 412 of
the Code; no "reportable event" within the meaning of Title IV of ERISA has
occurred with respect to any Benefit Plan subject thereto; and, except as
described on Schedule 10.21, TXEN is not obligated to pay any additional
amounts to or pursuant to, and have not guaranteed the obligations of, any
Benefit Plan or related trust. No employees of TXEN participate in any
"multi-employer pension plan" within the meaning of the Multi-employer
Pension Plan Amendments Act of 1980, as amended, and TXEN does not have any
liability under ERISA for any complete or partial withdrawal from any such
multi-employer plan. To the best of TXEN's knowledge, no liability under
Title IV of ERISA has been incurred by TXEN or any trade or business,
whether or not incorporated, that would be aggregated with TXEN for
purposes of imposition of liability under Title IV of ERISA (an "ERISA
Affiliate") that has not been satisfied in full, and no condition exists
that presents, nor will the consummation of the transactions contemplated
by this Agreement directly result in, a material risk to TXEN or an ERISA
Affiliate of incurring a liability under such Title IV. Neither TXEN nor
an ERISA Affiliate, nor any of their respective directors, officers,
employees, or fiduciaries, has committed any breach of fiduciary
responsibility imposed by ERISA or any other applicable law that would
subject TXEN to liability under ERISA or any other applicable law,
contract, agreement, or commitment. The Pension Benefit Guaranty
Corporation ("PBGC") has not instituted proceedings to terminate any
Benefit Plans in which TXEN participates, and no condition exists that
presents a risk that such proceedings will be instituted. No Benefit Plan
provides benefits, including, without limitation death or medical benefits
(whether or not insured), with respect to current or former employees
beyond their retirement or other termination of service (other than
(i) coverage mandated by applicable law, (ii) deferred compensation accrued
on the books of TXEN, (iii) death benefits or retirement benefits under any
"employee pension benefit plan," as that term is defined in Section 3(2) of
ERISA, or (iv) benefits the full cost of which is borne by the current or
former employee (or his or her beneficiary)). If a Benefit Plan is
designed to satisfy the requirements of Section 125, Section 401,
Section 401(k), Section 409, Section 501(c)(9), Section 4975(e)(7), and/or
Section 4980B of the Code, the Benefit Plan satisfies such section. No
"leased employee," as that term is defined in Section 414(n) of the Code,
performs services for TXEN. TXEN has heretofore delivered to NRC true and
correct copies of all of the Benefit Plans, the most recent determination
letters from the Internal Revenue Service with respect thereto, the most
recent annual reports (Form 5500 and the schedules thereto), the most
recent summary plan descriptions, and the most recent actuarial valuations.
10.22 LABOR MATTERS. TXEN is not a party to any collective bargaining
agreement relating to TXEN's employees. TXEN is in all material respects
in compliance with all applicable laws respecting employment and employment
practices, terms and conditions of employment, wages and hours,
nondiscrimination in employment, and occupational health and safety, and is
not engaged in any unfair labor practice. Except as disclosed on Schedule
10.22, there are no pending labor grievances or sexual harassment,
discrimination or other claims as to age, sex, religion, national origin or
physical or mental disability, civil rights, or equal employment
opportunity charges against TXEN relating to or involving employees, or any
settlements, consent orders, or prior decrees of any court or governmental
body requiring any continued observance by TXEN relating to or involving
employees. No complaint has been filed or is pending or, to the best
knowledge of TXEN, threatened with the National Mediation Board or the
National Labor Relations Board relating to or involving any employee of
TXEN alleging any unfair labor practices, and there have not been any work
stoppages, strikes, or other significant labor troubles involving employees
of TXEN.
10.23 EMPLOYEES; WAGE INCREASES. Schedule 10.23 lists (i) all current
employees of TXEN, including those employees of TXEN currently on layoff,
disability or any other leave ("Employees"), including their names,
addresses, ages, current rates of compensation and (ii) all employment
commitments made by TXEN to persons other than the Employees. To the
extent not set forth on Schedule 10.17, Schedule 10.23 also lists all
employment agreements with current Employees. TXEN has not, with respect
to Employees, made any wage or salary increase other than the increases
already reflected on Schedule 10.23.
10.24 NO PENDING OR THREATENED LITIGATION AND CLAIMS. Except as set
forth on Schedule 10.24, TXEN is not a party to or, to the best knowledge
of TXEN, threatened with any claim, complaint, charge, suit, action,
proceeding, hearing, arbitration, or other method of settling disputes or
disagreements, or any private or governmental investigation. TXEN is not
subject to any judgment, order, writ, injunction, stipulation, or decree of
any court, arbitrator, or governmental agency or instrumentality.
10.25 ENVIRONMENTAL MATTERS. To the best knowledge of TXEN, the TXEN
business as presently conducted by TXEN complies with all applicable laws
and regulations relating to environmental protection, health, and safety,
including, without limitation, laws and regulations relating to the
generation, transportation, handling, treatment, storage, disposal,
discharge, emission, release or threatened release of hazardous substances,
solid waste, hazardous waste, hazardous materials, asbestos containing
materials, petroleum or any fraction thereof, pollutants, irritants,
contaminants, toxic substances, or any other materials defined as such in,
or regulated by, any such applicable laws and regulations. To the best
knowledge of TXEN, none of TXEN, its agents, their affiliates, and prior
owners or users of the properties listed on Schedule 10.13 have ever
generated, stored, treated, transported, handled, disposed of, released, or
threatened to release, any regulated material in a manner that could give
rise to any liability on the part of the Surviving Corporation. TXEN has
complied with the reporting requirements concerning the disposal,
discharge, emission, spillage, release or threatened release of any
hazardous substance with respect to such properties. TXEN is not a
"potentially responsible party," as defined in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended,
or under any comparable state or local statute, in connection with any past
or present waste disposal practices undertaken by it or on its behalf.
10.26 CUSTOMERS. Schedule 10.26 identifies all customers who
purchased any product or service manufactured, licensed, sold, or provided
by TXEN since June 30, 1994. TXEN is not aware of any existing or
anticipated changes in the purchasing policies or practices of these
customers, or in their financial condition, that might reasonably be
expected to have a material adverse effect on future orders of TXEN's
business.
10.27 SUPPLIERS. Schedule 10.27 is a list of all material suppliers
of materials and services to TXEN since June 30, 1994. Except as listed on
Schedule 10.27, no supplier represents TXEN's sole source of any type or
types of supplies. Except as set forth in Schedule 10.27, no supplier has
materially increased its prices as applicable to the products purchased by
TXEN since June 30, 1994 and TXEN has not received notice of any such price
increase. TXEN is not aware of any existing or anticipated changes in the
policies or practices of these suppliers, or in their financial condition,
that might reasonably be expected to have a material adverse effect on the
Surviving Corporation's ability to obtain supplies from these suppliers.
10.28 INSURANCE. Schedule 10.28 identifies all of TXEN's insurance
policies and bonds (the "Insurance Policies"). The Insurance Policies are
in full force and effect; are sufficient for compliance by TXEN with all
requirements of law and of all agreements to which it is a party; and are
valid, outstanding, and enforceable policies and provide that they will
remain in full force and effect through the Effective Date.
10.29 PRODUCT SPECIFICATIONS. To the best knowledge of TXEN, all
products manufactured, developed, licensed and/or distributed by TXEN
comply with the specifications and other criteria contained in the product,
sales, and marketing literature and other documentation used by TXEN in
connection with the sale or marketing of TXEN's products and services and
in any applicable customer specifications.
10.30 ACCOUNTS RECEIVABLE. All outstanding accounts receivable and
notes receivable of TXEN are bona fide receivables, arose in the usual and
ordinary course of business, are due and valid claims against customers for
goods delivered or services performed, subject to no offsets or
counterclaims, and are fully collectable, net of the reserve for doubtful
accounts shown on the Financial Statements of TXEN described in Section
10.7.
10.31 DISCLOSURE. To the best knowledge of TXEN, no representation or
warranty by TXEN and Shareholders in this Agreement, nor any schedules or
exhibits to this Agreement nor any statement or certificate furnished or to
be furnished to NRC or Surviving Corporation pursuant to this Agreement,
contains or will contain any untrue statement of a material fact or omit or
will omit to state a material fact necessary to make the statements
contained therein not misleading. TXEN and the Shareholders do not know of
any facts or conditions relating to the TXEN business which have a
reasonably likelihood of materially adversely affecting the TXEN business.
10.32 ACCOUNTS. Schedule 10.32 sets forth the names and locations of
all banks and other institutions in which TXEN has an account or safe
deposit box and the names of all persons authorized to draw thereon or to
have access thereto. Schedule 10.32 also sets forth the balance in each
checking, savings or other deposit account of TXEN as of June 30, 1997.
10.33 TRANSACTIONS WITH RELATED PARTIES. Except as disclosed on
Schedule 10.33, no Shareholder, officer, director, or employee of TXEN, or
any corporation or other entity controlled by or under common control with
any of the foregoing and no relative of any of the foregoing has:
(a) borrowed money from or loaned money to TXEN which remains
outstanding (excluding travel advances in the ordinary course of
business and consistent with past practice);
(b) any contractual or other claim (except for compensation as
disclosed in the schedules to this Agreement) expressed or implied, of
any kind whatsoever against TXEN;
(c) any interest in any business, assets or properties of TXEN
(whether ownership, contractual or otherwise); or
(d) engaged in any other transaction with TXEN (other than
employment relationships) since the date of TXEN's incorporation, not
otherwise reflected on the Financial Statements described in Section
10.7.
10.34 FINDERS. No finder or broker has acted or is acting on behalf
of TXEN in connection with the transactions contemplated by this Agreement.
10.35 SURVIVING CORPORATION'S ABILITY TO OPERATE THE BUSINESS. Upon
the Effective Date, Surviving Corporation shall have received from TXEN all
the property, equipment, inventory, contracts, permits, intellectual
property, leasehold interests, books and records, hardware and software,
and other assets and rights necessary for Surviving Corporation to conduct
TXEN's business as the same is presently conducted by TXEN.
10.36 CAPITALIZATION. TXEN's authorized capital consists of 1 share
of Convertible Preferred Stock, par value of $.002 per share (the
"Preferred Stock"), 5,000,000 shares of Class A Common Stock of the par
value of $.002 per share (the "Class A Common Stock") and 1,250,000 shares
of Class B Common Stock of the par value of $.002 per share (the "Class B
Common Stock"). The issued and outstanding shares of TXEN Stock are held
by those individuals and entities in those amounts shown in Section 10.1.
Except for options issued in connection with the Option Plans, there is no
other class of equity securities or instruments convertible into equity
securities outstanding (or options, warrants, or other rights granting
persons the right to acquire same or any TXEN Common Stock) and TXEN has
not issued any bonds, debentures, or other evidences of indebtedness of a
similar nature. From the date of the execution of this Agreement to the
Effective Date, TXEN agrees not to and the Shareholders agree not to cause
TXEN to issue, transfer, assign or sell any additional shares of TXEN Stock
or authorize, create, issue or sell any other class of equity securities or
bonds, debentures or instruments of a similar nature, and further agree not
to execute any options, warrants or other rights to acquire TXEN stock or
any additional rights. All of the shares of TXEN Stock held by the
Shareholders are free and clear of all liens, claims, pledges, options,
rights, security interests and encumbrances, except as provided in Section
5.6(d) hereof. All outstanding shares of TXEN stock have been duly
authorized and issued and are fully paid and nonassessable. Except as
described on Schedule 10.36, there are no agreements restricting the
transfer of TXEN stock or granting any options, agreements, contracts,
cause or commitments of any character which would restrict the transfer or
issuance of any TXEN stock or which would require the issuance of TXEN
stock, or which would require TXEN to purchase or redeem any shares of TXEN
stock. By executing this Agreement, Shareholders, waive all provisions of
any stockholder agreement and consent to transactions contemplated hereby.
10.37 SUBSIDIARIES. TXEN has no subsidiaries.
10.38 SECURITIES MATTERS. The Shareholders jointly and severally
represent and warrant that they are acquiring their respective portions of
NRC Common Stock for their own accounts, to hold for investment, and with
no intention of dividing their respective parts or their participation with
others, or reselling or otherwise participating, directly or indirectly, in
a distribution of the NRC Common Stock, and that each Shareholder shall not
make any sale, transfer or other disposition of the NRC Common Stock in
violation of the 1933 Act or the securities laws of any state. Each of the
Shareholders have been advised that the NRC Common Stock is not being
registered under the 1933 Act on the grounds that such transactions are
exempt from registration under one or more exemptions under the 1933 Act
and also are not being registered under any securities laws of the various
states on the grounds that such transactions are exempt from registration
thereunder, and that reliance by NRC on such exemptions is predicated, in
part, on the representation from the Shareholders set forth in this Section
10.38. The Shareholders further understand that NRC is required to file
periodic reports with the Securities and Exchange Commission and that,
following a one-year holding period, certain sales of the NRC Common Stock
may be exempt from registration under the 1933 Act by virtue of Rule 144,
provided that such sales are made in accordance with all of the terms and
conditions of Rule 144, including compliance with the required one-year
holding period. It is understood and agreed that if Rule 144 is not
available for the sales of the NRC Common Stock, the NRC Common Stock may
not be sold without registration under the 1933 Act or compliance with some
other exemption from such registration, and, except as provided in Section
19 below, that NRC is not obligated to register the NRC Common Stock to be
transferred pursuant to this Agreement or to take any action necessary in
order to make compliance with an exemption from registration available. It
is acknowledged that all shares of NRC Common Stock shall bear a
restrictive legend to the effect that such shares have not been registered
and may not be sold or transferred except pursuant to a registration or an
exemption therefrom. The Shareholders acknowledge and agree that they have
not received any public solicitation or advertisement concerning an offer
to sell or to acquire the NRC Common Stock.
10.39 AVAILABILITY OF INFORMATION. TXEN and the Shareholders have
received and have had an opportunity to review copies of NRC's Form 10-K
Report for the fiscal year ended August 31, 1996, Proxy Statement for the
1997 Annual Shareholders Meeting and Annual Report to Shareholders for the
year ended August 31, 1996, and the NRC Quarterly 10-Q Reports for the
periods ended November 30, 1996, February 28, 1997, and May 31, 1997. TXEN
and the Shareholders have had an opportunity to meet with officers of NRC
to discuss the information contained in the above-referenced documents and
to receive answers to any questions they had regarding NRC and the
acquisition by Shareholders of the NRC Common Stock. TXEN and the
Shareholders acknowledge and agree that they are not relying on any
representations and warranties (oral or written) of NRC or Surviving
Corporation or their respective officers, directors, employees and
representatives, except those representations and warranties expressly set
forth in this Agreement and the matters set forth in the Annual and
Quarterly Reports described in this Section. Each individual Shareholder
for himself represents and warrants that he, individually or with the aid
of an investor representative of his choice, has the knowledge and
experience to evaluate the merits and risks of accepting the NRC Common
Stock in exchange for their TXEN Common Stock.
10.40 LIMITED REPRESENTATIONS AND WARRANTIES OF THE UNIVERSITY. The
University does not make the representations and warranties set forth in
Sections 10.1 through 10.39 above, and in lieu thereof makes the following
representations and warranties as of the Closing Date and Effective Date:
10.40.1 AUTHORITY. The University has full right, power and
authority to enter into this Agreement and to surrender the Shares owned by
it in exchange for its share of the Merger Consideration as provided in
this Agreement. The execution and performance of this Agreement by the
University has been duly authorized by its Board of Trustees.
10.40.2 OWNERSHIP. The University owns legally and beneficially
the number of Shares of stock set opposite its name in Section 10.1 hereof,
free and clear of all liens, security interests, pledges or encumbrances.
10.40.3 ENFORCEABILITY. This Agreement has been duly and
validly executed and delivered by the University and constitutes the legal,
valid and binding obligation of the University in accordance with its
terms.
10.40.4 NO CONSENT. No consent of any lender, trustee,
director, security holder or any other person is required for the
University to enter into this Agreement or to consummate the transactions
contemplated hereby, nor do the governing instruments of the University or
any mortgage, indenture or other agreement, or any law, statute, ordinance,
rule or regulation to which the University is a party or by which it is
bound or which affects any of its properties, including, without
limitation, the Shares, conflict with or restrict the execution, delivery
and performance of this Agreement by the University or the consummation of
the transactions contemplated hereby or thereby.
10.40.5 ESTOPPEL PROVISIONS. As of the Closing Date and the
Effective Date, the University acknowledges that it has no title, claim,
demand, interest, action or cause of action in, to or against TXEN or any
of its officers, directors or shareholders in any capacity whatsoever.
This SECTION 10.40.5 shall be construed to constitute a release by the
University of any and all of the foregoing and shall constitute a waiver of
any and all of the foregoing.
TXEN and the other Shareholders do not make the representations and
warranties contained in this Section 10.40.
10.41 SPECIAL REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, individually and in his capacity as Trustee of the
▇▇▇▇▇▇▇▇▇ Family Charitable Unitrust, established August 5, 1997 (the
"Trust"), represents and warrants as of the Closing Date and the Effective
Date:
10.41.1 AUTHORITY. As Trustee, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ has full
right, power and authority to enter into this Agreement and to surrender
the Shares owned by him as Trustee in exchange for the Trust's share of the
Merger Consideration as provided in this Agreement.
10.41.2 OWNERSHIP. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, in his capacity as such
Trustee, owns legally the number of Shares of stock set opposite his name
in Section 10.1 hereof free and clear of all liens, security interests,
pledges or encumbrances.
10.41.3 ENFORCEABILITY. This Agreement has been duly and
validly executed and delivered by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ in his capacity as
such Trustee and constitutes the legal, valid and binding obligation of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ as Trustee in accordance with its terms.
10.41.4 NO CONSENT. No consent of any lender, trustee, security
holder or any other person is required for ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ as Trustee
to enter into this Agreement or to consummate the transactions contemplated
hereby, nor does the Trust instrument or any mortgage, indenture or other
agreement or any law, statute, ordinance, rule or regulation to which the
Trust is a party or by which it is bound or which affects any of its
properties, including, without limitation, the Shares, conflict with or
restrict the execution, delivery and performance of this Agreement by
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ as Trustee or the consummation of the transactions
contemplated hereby or thereby. The execution and performance of this
Agreement by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ in his capacity as Trustee does not
violate any statute, rule or regulations regarding private foundations,
including, but not limited to, provisions contained in Sections 4940-4948
of the Internal Revenue Code.
10.41.5 ESTOPPEL PROVISIONS. As of the Closing Date and the
Effective Date, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ as Trustee acknowledges that he has no
title, claim, demand, interest, action or cause of action in, to or against
TXEN or any of its officers, directors or Shareholders in any capacity
whatsoever. This Section 10.41.5 shall be construed to constitute a
release by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ in his capacity as Trustee of any and all of
the foregoing and shall constitute a waiver of any and all of the
foregoing.
SECTION 11. CONDUCT OF CONSTITUENT CORPORATIONS
PENDING THE EFFECTIVE DATE
Each Constituent Corporation agrees that, between the date of this
Agreement and the Effective Date:
11.1 CERTIFICATE OF INCORPORATION AND BYLAWS. No change will be made
in the Certificate of Incorporation or Bylaws of either Constituent
Corporation without the prior written consent of the other Constituent
Corporation.
11.2 CAPITALIZATION. Neither Constituent Corporation will make any
change in its authorized or issued capital stock, declare or pay any
dividend or other distribution or issue, encumber, purchase or otherwise
acquire any of its capital stock.
11.3 OPERATE IN ORDINARY COURSE. TXEN shall operate its business in
the usual and ordinary manner as heretofore conducted; perform in all
material respects all its respective obligations and not materially modify,
amend, supplement, or waive any obligation under any Contract without the
prior written consent of NRC, which will not be unreasonably withheld.
11.4 NOT SELL OR ENCUMBER PURCHASED ASSETS. TXEN shall not sell or
otherwise dispose of any of its assets or properties, except for the sale
of inventory in the ordinary course of business, and not create or agree to
create any mortgage, security interest, lien, pledge, encumbrance, or
restriction on any of its assets or properties.
11.5 PRESERVE BUSINESS ORGANIZATION. TXEN shall use all reasonable
efforts to preserve intact TXEN's present business organization; to keep
available the services of the current Employees; to preserve TXEN's
relationships with suppliers, distributors, customers, and others having
business relationships with TXEN; and to refrain from changing any material
policies (including, without limitation, accounting, advertising,
marketing, pricing, purchasing, personnel, sales, or budget policies)
without the prior written consent of NRC, which will not be unreasonably
withheld.
11.6 MAINTAIN PROPERTIES. TXEN shall retain and maintain all of its
assets and properties in customary repair, order, and condition, except for
reasonable wear, the disposal of worn-out or obsolete equipment, and damage
due to unavoidable casualty.
11.7 MAINTAIN BOOKS OF ACCOUNT. TXEN shall maintain TXEN's books of
account and records in the usual and ordinary manner and in accordance with
generally accepted accounting principles.
11.8 COMPLY WITH LAW. TXEN shall comply in all respects with all laws
applicable to TXEN or contest or settle in good faith, upon the advice of
counsel, any alleged failure to comply with any such laws.
11.9 INVENTORY. Consistent with past practices, TXEN shall not
acquire any inventory.
11.10 MAINTAIN INSURANCE. TXEN shall maintain the Insurance Policies
in full force and effect, with policy limits and scope of coverage not less
than is now provided.
11.11 ADVISE SURVIVING CORPORATION OF ADVERSE CHANGE. TXEN shall
promptly advise NRC of the occurrence of any material adverse change in the
financial condition or results of the operations of TXEN; the occurrence of
any other event or condition that materially and adversely affects its
business; or the imposition of any lien, pledge, or encumbrance on any of
its assets or properties.
11.12 ACCESS FOR NRC. TXEN shall provide NRC's employees, agents, and
authorized representatives with reasonable access, during business hours
and consistent with the normal operation of its business, to the locations
owned or leased by TXEN, and to the books and records of TXEN, to the
extent necessary to enable NRC to make a thorough investigation of the
business, to make a physical examination of its assets and properties, to
conduct environmental examinations (if any), and to examine TXEN's books
and records. NRC's employees, agents, and authorized representatives shall
hold all such information and materials in strict confidence, shall not use
the same for any purpose other than to evaluate this transaction and, treat
all such information in a manner consistent with NRC's policies and
procedures concerning its own confidential and proprietary information. If
the transactions contemplated hereby are not consummated for any reason,
NRC shall (a) upon the request of TXEN, return all originals, copies, and
summaries of such information to TXEN and (b) continue to treat all such
information as strictly confidential in a manner consistent with NRC's
policies and procedures concerning its own confidential and proprietary
information.
11.13 THIRD-PARTY CONSENTS. TXEN shall use its best efforts to obtain
all required consents and approvals of third parties, if any, described on
Schedule 10.3.
11.14 NOT INCUR INDEBTEDNESS. TXEN shall not incur any indebtedness,
other than indebtedness incurred in the ordinary course of business to fund
working capital arising in the ordinary course of business.
11.15 PRESERVE CAPITAL STRUCTURE. TXEN shall not acquire, merge with,
or consolidate with, or agree to acquire, merge with, or consolidate with,
any business entity, or amend their respective charter or bylaws.
11.16 TXEN AUTHORIZATION. The TXEN directors and shareholders shall
approve this Agreement of Merger and the transactions described herein in
accordance with the Alabama Business Corporation Act on or before the
Closing Date.
SECTION 12. CONDITIONS PRECEDENT TO OBLIGATIONS OF
▇▇▇▇▇▇▇ RESEARCH CORPORATION AND SUBSIDIARY
NRC's and Subsidiary's obligation to consummate this Merger shall be
subject to the fulfillment on or before the Effective Date of each of the
following conditions, unless waived, in writing:
12.1 REPRESENTATIONS AND WARRANTIES TRUE AS OF CLOSING DATE. TXEN's
and Shareholders' representations and warranties made in this Agreement and
the exhibits and schedules hereto are true in all respects on and as of the
Closing Date as though such representations and warranties were made on and
as of the Closing Date.
12.2 COMPLIANCE WITH AGREEMENT. TXEN and each Shareholder has
performed and complied in all respects with all of its or his obligations
under this Agreement that are to be performed or complied with by it or him
on or before the Closing Date, and neither TXEN nor any Shareholder is
otherwise in default in any respect under any of the provisions of this
Agreement.
12.3 NO LITIGATION. No litigation, proceeding, investigation, or
inquiry is pending or threatened with respect to TXEN or which, if
sustained, would enjoin or prevent the consummation of the transactions
contemplated by this Agreement.
12.4 THIRD-PARTY CONSENTS AND APPROVALS. TXEN has obtained all third-
party consents and approvals, if any, described on Schedule 10.3, all in
form and substance reasonably satisfactory to NRC and its counsel. At or
before the Closing, TXEN will deliver to NRC all such third-party consents
or approvals.
12.5 COMPLIANCE WITH LAW. NRC has made a good faith determination,
with the assistance and advice of counsel, that the Surviving Corporation
can acquire and own the TXEN business following the Effective Date in
substantial compliance with all applicable laws, orders, ordinances, codes,
and regulations.
12.6 MATERIAL ADVERSE EFFECT. There has not occurred any event or
casualty that materially and adversely affects TXEN or its assets or
properties, or Surviving Corporation's ability to carry on TXEN's business
as presently and ordinarily conducted.
12.7 OPINION OF COUNSEL FOR TXEN. TXEN has delivered to Surviving
Corporation and NRC an opinion of counsel dated as of the Closing Date in a
form attached hereto as Exhibit "F."
12.8 EMPLOYMENT AGREEMENTS. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇
shall have entered into an Amendment of their Employment Agreements in the
forms attached hereto, respectively, as Exhibits "G-1" and "G-2." H. Grey
Wood shall have entered into an Employment Agreement with the Surviving
Corporation in the form attached hereto as Exhibit "G-3" (the "Employment
Agreements").
12.9 CERTIFIED RESOLUTIONS. TXEN has delivered to NRC a copy of
resolutions adopted by TXEN's Board of Directors, certified as of the
Closing Date by the Secretary or an Assistant Secretary of TXEN, approving
the execution and delivery of this Agreement and the performance by TXEN of
its obligations under this Agreement.
12.10 CERTIFICATES OF FULFILLMENT OF CONDITIONS. TXEN shall have
delivered to NRC certificates, dated as of the Closing Date and signed by
its President, stating that the conditions set forth in this Section 12
have been fulfilled.
12.11 SHAREHOLDER APPROVAL. TXEN's Shareholders shall have
unanimously approved the consummation of the transactions contemplated by
this Agreement.
12.12 NO DISSENTING SHAREHOLDERS. Each Shareholder shall have
approved this transaction and no Shareholder shall have filed or perfected
dissenter's rights or appraisal rights.
12.13 FAIRNESS OPINION. NRC shall have received a "fairness opinion"
from The ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, Inc. that the transactions contemplated
by this Agreement are fair to NRC and its shareholders from a financial
point of view, dated within 10 days of the Closing.
12.14 UNIVERSITY RESOLUTION. The University shall have delivered to
NRC a certificate dated as of the Closing Date signed by an authorized
representative of the University evidencing authority to execute, deliver
and perform this Agreement.
SECTION 13. CONDITIONS PRECEDENT TO OBLIGATIONS OF TXEN
TXEN's and Shareholders' obligation to consummate this Merger shall be
subject to fulfillment on or before the Effective Date of each of the
following conditions, unless waived in writing by TXEN:
13.1 REPRESENTATIONS AND WARRANTIES TRUE ON CLOSING DATE.
Subsidiary's and NRC's representations and warranties made in this
Agreement are true in all respects on and as of the Closing Date as though
such representations and warranties were made on and as of the Closing
Date.
13.2 COMPLIANCE WITH AGREEMENT. Subsidiary and NRC have performed and
complied in all respects with all of their obligations under this Agreement
that are to be performed or complied with by them on or before the Closing
Date, and Subsidiary and NRC are not otherwise in default in any respect
under any of the provisions of this Agreement.
13.3 NO LITIGATION. No litigation, proceeding, investigation, or
inquiry is pending or threatened which, if sustained, would enjoin or
prevent the consummation of the transactions contemplated by this
Agreement.
13.4 OPINION OF COUNSEL FOR SUBSIDIARY. Subsidiary has delivered to
TXEN an opinion of counsel dated as of the Closing Date in a form attached
hereto as Exhibit "H."
13.5 CERTIFIED RESOLUTIONS. Subsidiary and NRC have delivered to TXEN
copies of resolutions adopted by Subsidiary's and NRC's Board of Directors,
certified as of the Closing Date by the Secretary or an Assistant Secretary
of Subsidiary and NRC, approving the execution and delivery of this
Agreement and the performance by Subsidiary and NRC of their respective
obligations under this Agreement.
13.6 CERTIFICATES OF FULFILLMENT OF CONDITIONS. Subsidiary and NRC
shall have delivered to TXEN certificates, dated as of the Closing Date,
stating that the conditions set forth in this Section 13 have been
fulfilled.
SECTION 14. DESIGNATIONS AND AGREEMENTS REQUIRED BY LAW
As of the Effective Date, if NRC waives the condition set forth in
Section 12.12, the Surviving Corporation agrees that it will promptly pay
to any dissenting Shareholder of TXEN the amount, if any, to which such
Shareholder shall be entitled under the laws of the State of Alabama.
SECTION 15. ACCESS
From the date of this Agreement to the Effective Date, each
Constituent Corporation shall provide the other with such information and
permit each other's officers and representatives such access to its
properties, books and records as the other may, from time to time,
reasonably request. Each Constituent Corporation shall inform the other of
materially adverse events occurring after the date of this Agreement. If
the Merger is not consummated, all documents received in connection with
this Agreement shall be returned to the party furnishing such documents and
all information received shall be treated as confidential.
SECTION 16. TERMINATION
16.1 CIRCUMSTANCES OF TERMINATION. This Agreement may be terminated
(notwithstanding approval by the shareholders of either party):
(a) By the mutual consent in writing of the Board of Directors
of each Constituent Corporation;
(b) By the Board of Directors of TXEN if any condition provided
in Section 13 has not been satisfied or waived on or before the
Effective Date;
(c) By the Board of Directors of NRC or Subsidiary if any
condition provided in Section 12 has not been satisfied or waived on
or before the Effective Date;
16.2 EFFECT OF TERMINATION. In the event of a termination of this
Agreement pursuant to this Section, each party shall pay the costs and
expenses incurred by it in connection with this Agreement and no party (or
any of its officers, directors and shareholders) shall be liable to any
other party for any costs, expenses, damage or loss of anticipated profits
hereunder, except for any breach by a party or parties of any
representations, warranties or covenants herein contained.
SECTION 17. SURVIVAL OF
REPRESENTATIONS AND WARRANTIES AND INDEMNIFICATION
17.1 SURVIVAL. The representations, warranties, and covenants made by
TXEN, Shareholders, Subsidiary and NRC in this Agreement will survive the
Closing Date and any investigation or inquiry made by either party. The
indemnifications contained in this Section 17 shall survive the Closing
until November 30, 1998. No indemnified party shall be entitled to assert
any claim for indemnification under this Section 17 with respect to the
breach of any representation, warranty or covenant contained herein after
the date on which such representation or warranty ceases to survive
pursuant to this Section 17.1. If an indemnified party shall have notified
the indemnifying party of a claim for indemnification under this Section 17
prior to the date on which the right of indemnification ceases to survive,
then the indemnified party shall be entitled to prosecute the claim to its
completion and be entitled to indemnification hereunder.
17.2 DEFINITION. As used herein, "Damages" shall mean any
obligations, losses, liabilities, security interests, liens, claims,
encumbrances, charges, damages, costs, and expenses (including, without
limitation, attorneys' fees and other costs and expenses incident to and
paid by an indemnified party in connection with the investigation, trial or
settlement of any claim, suit, action or proceedings) incurred, suffered or
sustained or paid or required to be paid by an indemnified party or
reasonably expected to be incurred by an indemnified party. Damages shall
be net of any insurance proceeds received by the indemnified party.
17.3 INDEMNIFICATION BY SHAREHOLDERS. After Closing, each Shareholder
agrees to and shall pay, defend and promptly indemnify Surviving
Corporation and NRC against, and save and hold Surviving Corporation and
NRC harmless from any and all Damages resulting from, arising out of or in
connection with (a) any breach or inaccuracy of any of the representations
and warranties made by TXEN and Shareholders in this Agreement, the
exhibits and schedules hereto, and the certificates and documents executed
by them in connection herewith, (b) the breach or non-fulfillment of any
agreement or covenant made by TXEN and Shareholders in or pursuant to this
Agreement and the transactions contemplated by this Agreement, (c) any
undisclosed liabilities or obligations of TXEN and/or (d) any liability or
claim or any threatened or potential liability or claim disclosed on
Schedules 10.15 and 10.24 hereto. The liability of each Shareholder shall
be prorata based on the Merger Consideration received by such Shareholder
over the total Merger Consideration received by all Shareholders.
17.4 INDEMNIFICATION BY SURVIVING CORPORATION AND NRC. Surviving
Corporation and NRC agree to jointly and severally pay, defend and promptly
indemnify the Shareholders against and save and hold them harmless from any
Damages resulting from, arising out of or in connection with (a) any breach
or inaccuracy of any of the representations or warranties made by
Subsidiary or NRC in this Agreement or (b) the breach of any of the
covenants made by Subsidiary or NRC in this Agreement.
17.5 ALLOCATION OF DAMAGES. Any Damages under Section 17.3 may be
recovered either by Surviving Corporation or NRC, as elected by NRC, or
such Damages may be allocated to NRC and Surviving Corporation as NRC, in
its sole discretion, may determine.
17.6 NOTICE OF CLAIM. Any party seeking indemnification hereunder
(the "Indemnitee") shall promptly notify the indemnifying party (the
"Indemnitor") in writing, of any claim for recovery, specifying in
reasonable detail the nature of the Damage, and, if known, the amount, or
an estimate of the amount, of the liability arising therefrom. The
Indemnitee shall provide to the Indemnitor as promptly as practicable
thereafter information and documentation reasonably requested by the
Indemnitor to support and verify the claim asserted.
17.7 DEFENSE OF THIRD PARTY CLAIMS. If the facts pertaining to such
Damages arise out of the claim of any third party, the Indemnitor may
assume the defense thereof by written notice to Indemnitee, including the
employment of counsel or accountants at the Indemnitor's cost and expense.
The Indemnitee shall have the right to employ counsel separate from counsel
employed by the Indemnitor in any such action and to participate therein,
but the fees and expenses of such counsel employed by the Indemnitee shall
be at its expenses. The Indemnitor shall not be liable for any settlement
of any such claim effected without its prior written consent, which shall
not be unreasonably withheld; provided that if the Indemnitor does not
assume the defense or the prosecution of the claim within thirty (30) days
of notice thereof, the Indemnitee may settle such claim without the
Indemnitor's consent. The Indemnitor shall not agree to a settlement of
any claim which provides for any relief other than the payment of monetary
damages without the Indemnitee's prior written consent, which shall not be
unreasonably withheld. Whether or not the Indemnitor defends such claims,
all the parties hereto shall cooperate in the defense or prosecution
thereof and shall furnish such records, information and testimony, and
attend such conferences, discovery proceedings, hearings, trials and
appeals, as may be reasonably requested in connection therewith.
17.8 REDUCTION FOR INSURANCE AND TAX BENEFITS. The Damages which
Indemnitor is liable to, for or on behalf of the Indemnitee pursuant to
this Section 17 shall be reduced (including, without limitation,
retroactively) through subsequent repayment as described below in this
Section 17.8, by an amount equal to any insurance proceeds and tax benefits
actually recovered by or on behalf of such Indemnitee relating to the
Damages. If an Indemnitee shall have received or shall have paid on its
behalf an indemnity payment in respect of any Damages and insurance
proceeds and tax benefits in respect of such Damages are also received by
the Indemnitee, then such Indemnitee shall pay Indemnitor the amount of
such insurance proceeds and tax benefits or, if less, the amount of such
indemnity payment. The Indemnitee covenants and agrees to use all
reasonable efforts to collect all such sums as are available to it under
its existing insurance policies which would be applicable to any such
Damages. Whether or not Indemnitee receives any tax benefit shall be
determined by Ernst & Young, L.L.P.
17.9 DEDUCTIBLE. An indemnified party shall make no claim against any
indemnifying party for indemnification under this Section 17 unless and
until the aggregate amount of such claims against the indemnifying party
exceeds $200,000.00 (the "Deductible"), in which event an indemnified party
may claim indemnification for all Damages in excess of the Deductible.
17.10 LIMITATIONS. The amount of indemnification either party may be
entitled hereto shall not exceed $4,387,497.19 unless such claims are based
on pending or threatened (in writing) litigation, in which case the amount
of indemnification will not exceed $10,968,742.98. The limitations set
forth herein shall not apply in the case of fraud.
17.11 ARBITRATION. The parties agree that any claim, controversy or
dispute arising out of or relating in any way to this Agreement or the
formation, interpretation, performance, enforcement, breach, termination or
validity thereof, including the construction and scope of the agreement to
arbitrate shall be resolved in accordance with the provisions of Exhibit
"I."
SECTION 18. CERTAIN COVENANTS OF THE PARTIES
WITH RESPECT TO TAX MATTERS
18.1 TAX RECORDS. TXEN will provide to NRC and Subsidiary copies of
all its Tax Returns and other Tax related matters between the date of the
execution of this Agreement and the Effective Date and will provide copies
to NRC and Subsidiary of all records and information which may be relevant
to such returns and matters and will retain such records and information.
Any information obtained pursuant to this Section shall be kept
confidential by the parties hereto.
18.2 TXEN FINAL TAX RETURN. The Surviving Corporation agrees that,
before filing TXEN's federal income tax return for any taxable period
ending on or before the Effective Date, including, without limitation, the
information return of TXEN for the partial tax year of TXEN ended on the
Effective Date, they will obtain Shareholder Representative's approval and
consent (which approval and consent shall not be unreasonably withheld or
delayed) for all items of income and deduction shown thereon. The
Surviving Corporation will cause the federal and state income tax returns
of TXEN for the period ending the day before the Effective Date to be filed
with the Internal Revenue Service and state authorities.
SECTION 19. PIGGYBACK REGISTRATION RIGHTS OF SHAREHOLDERS
19.1 IN GENERAL. The rights provided for in this section (the
"Piggyback Rights") shall apply to those TXEN Shareholders who receive NRC
Common Stock in exchange for their TXEN Common Stock pursuant to this
Agreement. As used in this section, the term "NRC Common Stock" shall mean
the par value $0.01 per share common stock of NRC outstanding as of the
date of the execution of this Agreement and shall not include any preferred
stock or other special class of stock that may be registered under the
Securities Act of 1933 (the "Act"). If (but without any obligation to do
so) NRC proposes to register any NRC Common Stock under the Act in
connection with the public offering of such NRC Common Stock solely for
cash (other than a registration relating solely to the sale of securities
to employees of NRC pursuant to a stock option, stock purchase or similar
plan, relating to a Rule 145 transaction, relating to a merger or other NRC
acquisition, or a registration on any form which does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of the NRC Common Stock owned by
the Shareholders), NRC shall, at such time, promptly give each Shareholder
who owns NRC Common Stock pursuant to an exchange for his or her TXEN
Common Stock under this Agreement written notice of such registration.
Upon NRC's receipt of the written request of each such Shareholder given
within 20 days after NRC's mailing of such notice, NRC shall, subject to
the other provisions of this section, cause to be registered under the Act
all of the NRC Common Stock that each such Shareholder has requested to be
registered, provided, however, that each such Shareholder may only request
registration for those shares of NRC Common Stock acquired in exchange for
TXEN Common Stock pursuant to this Agreement (the "Registerable
Securities"). NRC shall pay all costs for registering the Registerable
Securities. When required under the terms of this section to effect the
registration of the Registerable Securities, NRC shall, as expeditiously as
reasonably possible:
(a) prepare and file with the Securities and Exchange Commission
(the "Commission") a registration statement with respect to such
Registerable Securities and use its best efforts to cause such
registration statement to become effective.
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to
comply with the provisions of the Act with respect to the disposition
of all securities covered by such registration statement.
(c) furnish to the Shareholders who acquired NRC Common Stock
pursuant to this Agreement such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may
reasonably request in order to facilitate the distribution of the
Registerable Securities owned by them.
(d) use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or
Blue Sky Laws of such jurisdictions as shall be reasonably requested
by the underwriters, provided, however, that the holders of the
Registerable Securities shall not be allowed to cause NRC to register
and qualify the Registerable Securities under any particular security
or Blue Sky Law of any particular state or jurisdiction.
(e) in the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement with terms
generally satisfactory to the managing underwriter of such offering.
Each holder of Registerable Securities participating in the
underwriting shall also enter into and perform his or her respective
obligations, as reasonably requested by the managing underwriter,
under such an agreement.
It shall be a condition precedent to the obligations of NRC to register the
Registerable Securities that the holders of the Registerable Securities
shall furnish to NRC such information regarding themselves, the
Registerable Securities held by them, and the intended method of
disposition of such Registerable Securities as shall be required to effect
the registration of such Registerable Securities. Notwithstanding any of
the foregoing, NRC shall have the right, in its sole discretion, to
terminate the registration of the Registerable Securities and the
registration of the other NRC Common Stock which triggered the Piggyback
Rights if, at such time, the underwriters are of the opinion that a
registration at such time would not be advisable, or if there has been a
material adverse change in the condition, business or prospects of NRC or
if, for any good and sufficient reason, NRC determines to terminate the
registration causing the existence of the Piggyback Rights.
19.2 EXPENSES, LIMITATIONS AND AGREEMENTS. The holders of the
Registerable Securities must bear and pay their prorata portion of any
underwriting discounts and commissions. In connection with any offering
involving an underwriting, NRC shall not be required to include any of the
holders of Registerable Securities in such underwriting unless such holders
accept the terms of the underwriting as agreed upon between NRC and the
underwriters selected by NRC, and then only in such quantity as will not,
in the opinion of the underwriters, jeopardize the success of the offering
by NRC or the NRC shareholders demanding such registration. If the total
amount of Registerable Securities that all Shareholders with Piggyback
Rights under this section request to be included in such offering exceeds
(when combined with the securities being offered by NRC or its other
shareholders) the amount of securities that the underwriters reasonably
believe compatible with the success of the offering, then NRC shall be
required to include in the offering only that number of Registerable
Securities which the underwriters believe will not jeopardize the success
of the offering and the Registerable Securities so included shall be
apportioned, prorata, among the Shareholders in accordance with their
respective ownership percentages or in such other proportions as they shall
mutually agree. The definitive agreements shall contain such other
provisions as the parties may require and agree in connection with the
Piggyback Rights, to include provisions requiring the Shareholders to
indemnify NRC or any underwriter in connection with any untrue statement of
material fact or the omission to state material facts committed or omitted
by the Shareholders in connection with the offering.
19.3 NO ASSIGNMENT OF PIGGYBACK RIGHTS. The Piggyback Rights may not
be assigned by a Shareholder owning Registerable Securities to any person,
executor, personal representative, transferee or assignee of the
Registerable Securities owned by the Shareholder.
19.4 TRANSFER RESTRICTION. Each Shareholder exercising Piggyback
Rights will agree that he or she will not, to the extent requested by NRC
and/or any underwriter, sell, make any short sale of, loan, grant any
option for the purchase of or otherwise transfer or dispose of any NRC
Common Stock (including the Registerable Securities) without the prior
written consent of NRC and/or such underwriter, as the case may be, during
the 180 day period following the effective date of the Registration
Statement of NRC filed under the Act. In order to enforce the foregoing
covenant, NRC may impose stop-transfer instructions with respect to the
Registerable Securities until the end of such 180 day period.
19.5 TERMINATION. These Piggyback Rights under this Section shall
terminate one year after the Effective Date and thereafter, no Shareholder
shall have any right to require registration of his or her NRC Common
Stock.
SECTION 20. POST CLOSING COVENANTS
After the Closing, NRC and Subsidiary covenant as follows:
(a) Any key employee term life insurance policies owned by TXEN where
TXEN was named beneficiary insuring the Shareholders shall be distributed
to the insured.
(b) Stock options covering 30,000 shares of NRC Common Stock will be
reserved for issuance under the NRC Stock Option Plan to employees of the
Subsidiary as recommended by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, and as approved by the
NRC Stock Option Committee.
(c) The 401(k) Plan of TXEN shall continue to be maintained by the
Subsidiary after the Closing, provided that Subsidiary may maintain such a
separate plan under applicable provisions of the Internal Revenue Code as a
member of a controlled group of corporations and that maintenance of such
separate plan will not disqualify the 401(k) Plan maintained by NRC or the
401(k) Plan maintained by Subsidiary under the qualification provisions of
the Internal Revenue Code or ERISA. Nothing contained herein shall require
NRC to amend or terminate its qualified retirement plan in order to
maintain the separate existence of the 401(k) Plan of TXEN.
SECTION 21. GENERAL PROVISIONS
21.1 FURTHER ASSURANCES. At any time, and from time to time, before
and after the Effective Date, each party will execute such additional
instruments and documents and take such action as may be reasonably
requested by any other party to confirm or perfect title to any property
transferred hereunder or otherwise to carry out the intent and purposes of
this Agreement.
21.2 WAIVER. Any failure on the part of any party to comply with any
of its obligations, agreements or conditions hereunder may be waived in
writing by any other party.
21.3 BROKER. Each party represents to the others that no broker or
finder has acted for it in connection with this Agreement and agrees to
indemnify and hold harmless the other parties against any fee, loss or
expense arising out of claims by brokers or finders.
21.4 NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to have been given if delivered in person or
on the second day after sent by prepaid first-class, registered or
certified mail, return receipt requested or on the next day after sent by
nationally recognized overnight delivery service, as follows:
If to Subsidiary or ▇▇▇▇▇▇▇ SELECT CORPORATION
the Surviving c/o ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Research Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
If to NRC: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman and
▇▇▇▇▇▇▇ ▇▇▇▇, President
▇▇▇▇▇▇▇ Research Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
If to the ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Shareholders: Shareholder Representative
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to TXEN prior to the ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
Effective Date: TXEN, INC.
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
21.5 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties and supersedes and cancels any other
Agreement, representation or communication, whether oral or written,
between the parties hereto relating to the transactions contemplated herein
or the subject matter hereof.
21.6 GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Alabama.
21.7 ASSIGNMENT. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their successors and assigns, provided,
however, that no party may assign its rights or delegate its duties under
this Agreement and no party may assign this Agreement without the written
consent of the other party, which may be withheld in the sole discretion of
the other party, provided, however, that NRC may assign and/or delegate the
Subsidiary's duties, rights and obligations hereunder and may assign the
Agreement as it relates to Subsidiary to any other wholly owned Subsidiary
of NRC.
21.8 COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
21.9 INTERPRETATION AND CONSTRUCTION. Each party to this Agreement
acknowledges and agrees that it and he is sophisticated in business matters
and has been represented, at all times, by counsel of its and his own
choosing. Consequently, any rule of law or construction which would
require ambiguities in this Agreement to be resolved against the party that
has drafted this Agreement shall not be applicable and is waived.
21.10 SHAREHOLDER REPRESENTATIVE. The Shareholders hereby elect and
appoint ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ as the Shareholder Representative and vest him
with the full power and authority, as agent and attorney-in-fact for the
Shareholders, to communicate and receive all notices, to give notices,
counter notices, joint written instructions and make payments and other
communications on behalf of the Shareholders, and to make agreements,
compromises, waivers and settlements with respect to this Agreement and the
Escrow Agreement executed herewith and to resolve all disputes under this
Agreement. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ shall serve as Shareholder Representative
until NRC receives written notice from Shareholders who held, prior to the
Effective Date, more than 50% of the outstanding TXEN Common Stock, that
another Shareholder has been named as the Shareholder Representative. The
appointment of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ as Shareholder Representative shall be
considered a durable power of attorney, a power of attorney coupled with an
interest and to the extent permitted by law shall survive the incapacity of
any Shareholder and the death of any Shareholder and the incapacity or
death of any Shareholder shall not affect the validity of such appointment
by the other Shareholders.
21.11 CORPORATE POLICIES, ETC. All corporate acts, plans, policies,
approvals and authorizations of TXEN which were valid and effective
immediately prior to the Effective Date shall be taken for all purposes as
the acts, plans, policies, approvals and authorizations of the Subsidiary
and shall be as effective and binding thereon as they were on TXEN.
Without limiting the foregoing, all welfare benefit plans, salaries of the
employees of TXEN, employment policies, and sales and other policies in
effect immediately prior to the Merger shall be continued by the
Subsidiary, except to the extent such employees become employees of NRC.
This Section shall not prevent the Board of Directors or officers of the
Subsidiary from amending or termination such acts, plans, policies,
approvals and authorizations after the Effective Date. This Section is not
intended to benefit any employee of TXEN or any other third party.
21.12 SEVERABILITY. In the event any provision contained in this
Agreement shall be deemed or rendered illegal, against public policy or
unenforceable by any court of competent jurisdiction for any reason, then
such provision shall be deemed amended to the extent consistent with law
and public policy, provided, however, that if such amendment cannot be
accomplished, such provision shall be deemed severed from this Agreement
and shall not make or render any other provision contained herein
unenforceable or affect any other provision in this Agreement in any
respect whatsoever.
21.13 KNOWLEDGE. Whenever a matter is represented or warranted with
respect to the knowledge of TXEN, the knowledge of any Shareholder with
regard to such matter shall be deemed to be the knowledge of TXEN and the
knowledge of persons other than a Shareholder shall not be deemed to be the
knowledge of TXEN.
IN WITNESS WHEREOF, each Constituent Corporation, pursuant to
authority duly given by its Board of Directors and NRC, has caused this
Agreement to be executed on its behalf by its duly authorized officers, all
in accordance with Section 103 of the General Corporation Law of the State
of Delaware and Section 10-2B-11.05 of Alabama Business Corporation Act,
and the Shareholders have hereunto set their hands and seals, all as of the
day and year first above written.
▇▇▇▇▇▇▇ RESEARCH CORPORATION, a
Delaware corporation
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
By: ___________________________________
Its President
ATTEST:
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______________________
Secretary
▇▇▇▇▇▇▇ SELECT CORPORATION, a
Delaware corporation
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By: ___________________________________
Its Chief Executive Officer
ATTEST:
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----------------------
Secretary
TXEN, INC., an Alabama corporation
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By: ___________________________________
ATTEST: Its President
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______________________
Secretary
THE SHAREHOLDERS OF TXEN, INC.:
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▇▇▇ ▇. Sailor
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▇▇▇ ▇. Sailor
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▇▇▇▇▇ ▇. Till
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H. Grey Wood
______________________________________
H. Grey Wood
Board of Trustees of the University of
Alabama, for use of and on behalf of the
University of Alabama, Tuscaloosa, Alabama
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By: __________________________________________
Its Vice President for Financial
Affairs and Treasurer
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By: __________________________________________
Its Comptroller and Associate Treasurer
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______________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Trustee of the ▇▇▇▇▇▇▇▇▇
Family Charitable Unitrust, established
August 5, 1997