Exhibit 3.2
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
FIBERCHEM, INC.
PANDEL INSTRUMENTS, INC.
PANDEL MERGERCO, INC.
AND
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
DATED AS OF ___________, 2000
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of ___________,
2000, by and among Fiberchem, Inc., a Delaware corporation ("Fiberchem"), Pandel
Mergerco, Inc., a Delaware corporation and a wholly-owned subsidiary of
Fiberchem ("Pandel Mergerco"), Pandel Instruments, Inc., a Texas corporation
("Pandel" or "Acquired Company") and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, the principal
shareholder of the Acquired Company (the "Principal Shareholder").
WHEREAS, the respective Boards of Directors of FiberChem, the Acquired
Company and Pandel Mergerco have approved and deem it in the best interests of
their respective shareholders to consummate the business combination transaction
provided for herein, in which Pandel would merge with and into Pandel Mergerco
(the "Merger");
WHEREAS, Pandel owns 2,089,000 (24.89%) of the outstanding common shares of
Intrex Data Communication Corp., a British Columbia corporation ("Intrex") and
Intrex and Fiberchem are entering into an Amended Arrangement Agreement dated as
of ____ __, 2000 (the "Arrangement Agreement"). Capitalized terms used in this
Agreement which are not otherwise defined shall have the meanings ascribed
thereto in the Arrangement Agreement;
WHEREAS, pursuant to this Agreement and the Arrangement Agreement the
businesses of Intrex and Fiberchem are to be combined on the terms and
conditions set forth herein and therein.
WHEREAS, following the Merger, Pandel Mergerco will remain a wholly-owned
subsidiary of FiberChem (Pandel Mergerco and Pandel are hereinafter referred to
as the "Constituent Corporations");
WHEREAS, the Principal Shareholder of Pandel by his execution of this
Agreement has agreed to vote in favor of the Merger and to execute the Articles
of Merger in the form set forth in Exhibit A and the Certificate of Merger, as
defined below;
WHEREAS, pursuant to the Merger, the shareholders of Pandel (the
"Shareholders"), are to receive the Merger Consideration provided for in this
Agreement;
WHEREAS, the laws of the States of Delaware and Texas permit such merger,
and the Constituent Corporations desire to merge under and pursuant to the
provisions of such laws;
WHEREAS, the parties desire to make certain undertakings, conditions,
representations, warranties and covenants in connection with the Merger; and
WHEREAS, for Federal income tax purposes it is intended that the Merger
qualify as a statutory merger under Sections 368(a)(1)(A) and 368(a)(2)(D) of
the Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE 1 - THE MERGER
1.1 THE MERGER.
The Merger shall not become effective unless this Agreement and the
Articles of Merger are duly approved by Shareholders holding the requisite
number of shares of each of Pandel and Pandel Mergerco. Subject to the terms and
conditions of this Agreement, at the Effective Time (as defined in SECTION 1.2),
(i) the Acquired Company shall be merged with and into Pandel Mergerco in
accordance with the provisions of the General Corporate Law of the State of
Delaware (the "GCL") and, the Business Corporation Act of the State of Texas
(the "TBCA"), (ii) the separate corporate existence of the Acquired Company
shall cease, (iii) the Merger shall in all respects have the effects provided in
SECTION 1.3 below, and (iv) Pandel Mergerco shall continue as the surviving
corporation (hereinafter sometimes referred to as the "Surviving Corporation")
under the laws of the State of Delaware.
1.2 EFFECTIVE TIME.
Upon fulfillment or waiver of the conditions specified in Articles 9, 10
and 11 and provided that this Agreement has not been terminated pursuant to
Article 12, and subject to the remaining terms and provisions of this Agreement,
there shall be filed with the Secretary of State of the State of Delaware, as
soon as practicable on or after the Closing Date (as defined in SECTION 1.7), a
certificate of merger with respect to the Merger (the "Certificate of Merger"),
in such form as is required by, and executed in accordance with, the applicable
provisions of the GCL. The Merger shall become effective at the time of filing,
by the Secretary of State of the State of Delaware in accordance with the GCL,
of the original, properly executed Certificate of Merger, or at the time
specified as the effective time in the Certificate of Merger. The Certificate of
Merger shall be submitted for filing at the time of the Closing and may be
submitted prior thereto for clearance. The time at which the Merger shall become
effective, which shall in all cases be immediately prior to the closing under
the Arrangement Agreement, is referred to herein as the "Effective Time."
Adoption of this Agreement by the Board of Directors of each of the respective
Constituent Corporations and approval by the shareholders of each of the
respective Constituent Corporations shall constitute adoption and approval of
the Articles of Merger.
1.3 EFFECT OF THE MERGER.
The Merger shall have the effects set forth in Section 259 of the GCL.
Without limiting the generality of the foregoing, and subject thereto, from and
after the Effective Time (i) the corporate identity, existence, purposes,
powers, objects, franchises, rights, immunities, liabilities and duties of and
property (real, personal and mixed), and all debts due on whatever account,
including subscriptions for shares, and all other choses in action and every
other interest of or belonging to the Surviving Corporation shall continue
unaffected and unimpaired by the Merger; and (ii) the corporate identity,
existence, purposes, powers, objects, franchises, rights, immunities,
liabilities and duties of and all property (real, personal and mixed), rights,
privileges, powers and franchises of the Acquired Company shall vest in Pandel
Mergerco, and all debts due on whatever account, including subscriptions to
shares and all other causes of action and every other liability and dutiy of the
Acquired Company shall become the debts, liabilities and duties of the Surviving
Corporation as of the Effective Time. From and after the Effective Time, by
virtue of the filing of the Merger Certificate with the Secretary of State of
the State of Delaware, all of the above shall be deemed to be transferred and so
vested in the Surviving Corporation without further act or deed.
1.4 FURTHER ASSURANCES.
If, at any time after the Effective Time, the Surviving Corporation
considers or is advised that
any deeds, bills of sale, assignments, assurances in law or any other actions or
things are necessary, desirable or proper to vest, perfect or confirm of record,
or otherwise, in the Surviving Corporation its right, title or interest in, to
or under any of the rights, properties or assets of the Acquired Company, or
otherwise to carry out the intent and purposes of this Agreement, the officers
and directors of the Surviving Corporation will be authorized to execute and
deliver, in the name and on behalf of the Acquired Company all such proper
deeds, bills of sale, assignments and assurances and to take and do, in the name
and on behalf of the Acquired Company all such other actions and things as may
be necessary or desirable to vest, perfect or confirm any and all right, title
and interest in, to and under such rights, properties or assets in the Surviving
Corporation and otherwise to carry out the purpose of this Agreement, and the
proper officers and directors of the Surviving Corporation are fully authorized
and directed in the name of the Constituent Corporations or otherwise to take
any and all such actions. Neither the rights of creditors nor any liens upon the
property of any of the Constituent Corporations shall be impaired by the Merger.
1.5 CERTIFICATE OF INCORPORATION AND BY-LAWS OF PANDEL MERGERCO.
The Certificate of Incorporation of Pandel Mergerco, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended in
accordance with the GCL and the terms of such Certificate of Incorporation. The
By-laws of Pandel Mergerco, as in effect immediately prior to the Effective
Time, shall be the By-laws of the Surviving Corporation until thereafter amended
in accordance with the GCL, the Certificate of Incorporation of the Surviving
Corporation and such By-laws.
1.6 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION.
The initial directors of the Surviving Corporation shall be the directors
of Pandel Mergerco at the Effective Time, and all such directors will continue
to hold office from the Effective Time until their respective successors are
duly elected or appointed and qualify in the manner provided in the Certificate
of Incorporation and By-laws of the Surviving Corporation, or as otherwise
provided by applicable law. The initial officers of the Surviving Corporation
shall be the officers of Pandel Mergerco at the Effective Time, and all such
officers will continue to hold office from the Effective Time until their
respective successors are duly appointed and qualify in the manner provided in
the By-laws of the Surviving Corporation, or as otherwise provided by applicable
law.
1.7 CLOSING.
The closing of the transactions contemplated by this Agreement (the
"Closing") shall take place immediately prior to the closing under the
Arrangement Agreement at the offices of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇▇-▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (the date on which the Closing takes place
being referred to herein as the "Closing Date").
1.8 TAKING OF NECESSARY ACTION; FURTHER ACTION.
Each of the Constituent Corporations will take all such reasonable and
lawful action as may be necessary or appropriate in order to effectuate the
Merger in accordance with this Agreement as promptly as possible. If, at any
time after the Effective Time, any such further action is necessary or desirable
to carry out the purposes of this Agreement or to vest the Surviving Corporation
with full right, title and possession to all assets, property, rights,
privileges, powers and franchises of the
Constituent Corporations, the officers and directors of FiberChem and Pandel
Mergerco immediately prior to the Effective Time are fully authorized in the
name of their respective corporations or otherwise to take, and will take, all
such lawful and necessary action.
ARTICLE 2 - MERGER CONSIDERATION;
CONVERSION AND EXCHANGE OF SECURITIES
2.1 AGGREGATE MERGER CONSIDERATION.
The aggregate merger consideration issuable to the Pandel shareholders
pursuant to the Merger shall be a number of shares of FiberChem common stock
equal to (a) the number of Intrex common shares owned by Pandel at the time of
closing under this Agreement multiplied by the Intrex Exchange Ratio plus (b)
9,450,000 shares.
The Intrex Exchange Ratio shall mean the ratio of (x) the aggregate number
of Intrex Class B shares deliverable to Intrex Participating Shareholders
pursuant to Section 3.8 of the Amended Arrangement Agreement including Intrex
Class B shares required to be deposited under the Pooling Agreement pursuant to
Section 3.8 of the Arrangement Agreement to (y) the aggregate number of Intrex
common shares held by Participating Intrex Shareholders immediately prior to the
Closing of the Arrangement pursuant to the Arrangement Agreement.
Upon delivery of the merger consideration to the Pandel Shareholders,
the Pandel Shareholders shall deposit under an escrow agreement (the "Merger
Consideration Escrow Agreement") among FiberChem, each Pandel Shareholder and an
escrow agent to be agreed upon by them a number of shares of FiberChem Common
Stock equal to the sum of (i) a portion of the merger consideration delivered to
the Pandel Shareholders pursuant to clause (a) of the first paragraph of this
Section 2.1 that bears the same ratio to the number of shares of FiberChem
Common Stock delivered pursuant to said clause (a) as the aggregate number of
Intrex Class B Shares required to be deposited under the Pooling Agreement
pursuant to Section 3.8 of the Arrangement Agreement bears to the aggregate
number of Intrex Class B Shares deliverable to Intrex Participating Shareholders
pursuant to Section 3.8 of the Amended Arrangement Agreement including the
Intrex Class B Shares required to be deposited under the Pooling Agreement
pursuant to Section 3.8 of the Amended Arrangement Agreement, plus (ii) all of
the 9,450,000 shares of FiberChem Common Stock payable to the Pandel
Shareholders pursuant to clause (b) of the first paragraph of Section 2.1. The
shares of FiberChem Common Stock deposited under the Merger Consideration Escrow
Agreement are herein sometimes called the Merger Consideration Escrow Shares.
The Merger Consideration Escrow Agreement shall be in form and substance
satisfactory to the Pandel Shareholders, FiberChem and the escrow agent
thereunder and shall provide for the exercise of the voting rights of the Merger
Consideration Escrow Shares and the receipt of dividends and other distributions
thereon by the by the Pandel Shareholders so long as such shares remain on
deposit.
2.2 RELEASE OF THE MERGER CONSIDERATION.
Upon each release of Pooled Shares pursuant to the Pooling Agreement, the
escrow agent under the Merger Consideration Escrow Agreement will release
therefrom to the former Pandel shareholders a number of shares of FiberChem
Common Stock equal to the sum of (a) a number of
shares of FiberChem Common Stock that bears the same ratio to the merger
consideration delivered pursuant to clause (a) of the first paragraph of Section
2.1 as the aggregate number of Pooled Shares so released pursuant to the Pooling
Agreement bears to the aggregate number of Intrex Class B Shares delivered to
Participating Intrex Shareholders pursuant to Section 3.8 of the Arrangement
Agreement including Intrex Class B shares required to be deposited under the
Pooling Agreement, plus (b) upon each such release, 3,150,000 shares of
FiberChem Common Stock.
If FiberChem does not have sufficient authorized shares of its Common Stock
at any time when it is required to deliver Common Stock as merger consideration,
FiberChem may deliver or cause to be delivered one one hundredth of a FiberChem
Participating Convertible Share, Pandel Series ("FiberChem Pandel Series Stock")
in lieu of each share of FiberChem Common Stock which it was obligated to
deliver. The FiberChem Pandel Series Stock shall be designated by FiberChem's
Board of Directors from FiberChem's authorized, undesignated shares of preferred
stock and the Certificate of Designation therefor shall be in the form
heretofore furnished to Pandel and the Principal Shareholder.
2.3 COMPUTATION AND DELIVERY OF THE INITIAL MERGER CONSIDERATION.
The Acquired Company owns on the date hereof and will own at all times
through the Closing 2,089,000 Intrex Common Shares. The initial merger
consideration will be computed on the basis of such number of Intrex Common
Shares.
2.4 OPEN ISSUES ESCROW SHARES.
The Shareholders shall set-aside from the Merger Consideration for the
benefit of FiberChem and Pandel Mergerco such number of shares of FiberChem
Common Stock for such periods to be mutually negotiated specifically based upon
FiberChem determining during its due diligence prior to the Closing that there
are open issues for which an escrow needs to be created (the "Open Issues"; such
shares so set aside being called the "Open Issues Escrow Shares"). The Open
Issues Escrow Shares shall be held for the purpose of satisfying the Open Issues
(and for no other purpose). The Open Issues Escrow Shares delivered to in
satisfaction of any Open Issues shall be valued (for the purpose of satisfying
such Open Issues) at the greater of $_____ per share or the average selling
price per share for the ten trading days ending on the last trading day
preceding the date of delivery of such shares in satisfaction of the Open
Issues. The escrow of the Open Issues Escrow Shares shall terminate (and any or
property remaining therein shall be paid or distributed to the Shareholders)
following mutual resolution and satisfaction of the Open Issue or Issues with
respect to which the escrow was established.
2.5 CONVERSION OF SHARES; PAYMENT OF MERGER CONSIDERATION.
(i) All of the Merger Consideration shall be exchanged for all of the
validly issued, fully paid and non-assessable shares of common stock of the
Acquired Company. At the Effective Time, by virtue of the Merger and without any
action the part of any party hereto, each share of common stock of the Acquired
Company issued and outstanding immediately prior to the Effective Time shall be
converted into and shall represent the right to receive, upon surrender of the
certificate representing such shares, the proportion of the Merger Consideration
allocable to it.
(ii) Each share of the common stock of Pandel Mergerco issued and
outstanding immediately prior to the Effective Time shall continue to be issued
and outstanding.
(iii) Until surrendered, each outstanding certificate which prior to
the Effective Time
represented one or more shares of common stock of the Acquired Company shall be
deemed upon the Effective Time for all purposes to represent only the right to
receive the Merger Consideration. No interest will be paid or accrued on the
Merger Consideration upon the surrender of the certificate or certificate
representing such shares, except as specifically provided herein. With respect
to any certificate for common stock of the Acquired Company that has been lost
or destroyed, FiberChem shall direct distribution of the Merger Consideration
attributable to such certificate upon receipt of a surety bond or other adequate
indemnity as required in accordance with FiberChem's standard policy, and
evidence reasonably satisfactory to FiberChem of ownership of the shares
represented thereby. After the Effective Time, no transfer of the shares of
common stock of the Acquired Company outstanding immediately prior to the
Effective Time shall be made on the stock transfer books of the Surviving
Corporation.
(iv) At least ten days prior to the Effective Time, FiberChem shall
cause to be delivered or mailed to each Shareholder a form of letter of
transmittal and instructions for use in effecting the surrender of the
certificates which, immediately prior to the Effective Time, represented shares
of common stock of the Acquired Company in exchange for the Merger
Consideration. Upon surrender at or after the Effective Time of such
certificates, together with such letter of transmittal duly executed and
completed in accordance with the instructions thereto, and such other documents
as may be reasonably requested, FiberChem shall direct that the Merger
Consideration be transferred to the persons entitled thereto as provided herein.
(v) In the event FiberChem changes the number of shares of FiberChem
Common Stock issued and outstanding prior to the Effective Time as a result of a
stock split, stock dividend or other similar recapitalization, and the record
date thereof (in the case of a stock dividend) or the effective date thereof (in
the case of a stock split or similar recapitalization for which a record date is
not established) shall be prior to the Effective Time, the amount of the Merger
Consideration shall be proportionately adjusted.
(vi) Any Shareholder who shall have dissented from the Merger in
accordance with applicable state law, and who has properly exercised such
Shareholder's right to demand payment of the value of the Shareholder's shares
of the Acquired Company (the "Dissenting Shares") shall thereafter have only
such rights, if any, as are provided a dissenting shareholder under applicable
state law and shall have no rights under this SECTION 2.5; provided, however,
that if such Shareholder shall withdraw the demand for such appraisal or shall
become ineligible for such appraisal, then such Shareholder's Dissenting Shares
automatically shall cease to be Dissenting Shares and shall be converted into
and represent only the right to receive the Merger Consideration provided for in
this Section upon surrender of the certificate representing the Dissenting
Shares.
2.6 LOCK-UP OF FIBERCHEM COMMON STOCK.
On or before the Closing the Lock-Up Agreement contemplated by Section 3.4
of the Arrangement Agreement shall have been executed and delivered.
2.7 REGISTRATION RIGHTS.
(i) If any or all of the shares of FiberChem Common Stock issued to the
former Pandel shareholders pursuant to the Merger (collectively the "REGISTERED
SHARES") are not eligible for sale in accordance with the volume and manner of
sale requirements of Rule 144 without registration, FiberChem shall file a
registration statement (the "REGISTRATION STATEMENT"), on Form S-4 or such
other appropriate form not later than 90 days after the Effective Time to
register the Registered Shares.
(ii) In the event that any of the Registered Shares cannot be sold pursuant
to the Registration Statement or are not eligible for sale pursuant to Rule 144,
subject to the volume and manner of sale requirements of Rule 144, commencing
one year from the Closing Date (the "REGISTRATION CONDITIONS"), the
Shareholders, acting together with the Participating Intrex Shareholders
pursuant to Section 3.6 of the Arrangement Agreement, shall have the demand
registration rights provided in this Section 2.7. If at any time during the
period commencing upon the expiration of the No-Sale Period (as such term is
defined in the Lock-Up Agreement attached as Exhibit 3.4 to the Arrangement
Agreement) and ending two years thereafter, Registration Conditions exist,
FiberChem covenants and agrees with the Shareholders that, upon written request
of the then holder(s) of at least 25% of the remaining shares of FiberChem
Common Shares, FiberChem will file with the SEC as promptly as practicable and,
in any event, within 45 days after receipt of such written request, on one
occasion at FiberChem's sole expense, a registration statement (the "DEMAND
REGISTRATION STATEMENT") and, together with the Registration Statement, on a
form which would be available for the resale of the FiberChem Common Shares by
the Shareholders under the Securities Act, registering or qualifying the
FiberChem Common Shares requested to be so registered for sale. Such request
shall specify the shares of FiberChem Common Shares intended to be sold and the
intended method of disposition. FiberChem shall not, without the consent of the
Principal Shareholder, grant to any person registration rights that would
entitle such holders to include any securities of FiberChem in the Demand
Registration Statement.
(iii) FiberChem will use its best efforts, through its officers, directors,
auditors and counsel in all matters necessary or advisable, to file and cause to
become effective the Registration Statements as promptly as practicable and to
maintain the effectiveness of the Registration Statements for a period of two
years thereafter, subject to subparagraph (v) below.
(iv) FiberChem shall notify each Shareholder upon discovery that, or upon
the happening of any event as a result of which, the prospectus included in any
of the Registration Statements includes an untrue statement of a material fact
or omits to state any material fact required to be stated therein or necessary
to make the statements therein not misleading in the light of the circumstances
under which they were made; and, at the request of any Shareholder, FiberChem
shall promptly prepare and furnish to each Shareholder a reasonable number of
copies of a supplement or an amendment to such prospectus as may be necessary.
(v) FiberChem shall prepare and file with the SEC such amendments and
supplements to the Registration Statements and the prospectuses contained
therein as may be necessary to keep the Registration Statements effective and to
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by the Registration Statements until such time as all
shares of FiberChem Common Stock have been disposed of in accordance with the
intended methods of disposition by the Shareholders set forth in such
Registration Statements; provided, that FiberChem shall not be required to
maintain the effectiveness of any Registration Statement as to any shares of
FiberChem Common Stock that may then be sold by a Shareholder in accordance with
Rule 144.
(vi) FiberChem shall furnish to each Shareholder such number of preliminary
and final prospectuses included in any of the Registration Statements and of
each such amendment and supplement thereto as such Shareholder may reasonably
request.
(vii) FiberChem shall use its best efforts to file in a timely manner all
reports required to be
filed with the SEC pursuant to Section 13 of the SECURITIES EXCHANGE ACT OF
1934, as amended, and shall otherwise maintain its eligibility (at all times
when it is eligible) to use Form S-3 and comply with the public information
requirements of paragraph (c) of Rule 144.
(viii) FiberChem shall indemnify and hold harmless the Shareholders against
any losses, claims, damages, liabilities, costs (including, without limitation,
the reasonable cost of preparation and attorney's fees) and reasonable expenses
(collectively, "Losses") arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any of the Registration
Statements or any prospectus or preliminary prospectus included therein or
arising out of or based upon any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as the same are based solely upon information
furnished in writing to FiberChem by such Shareholders expressly for use
therein.
(ix) In connection with any registration in which a Shareholder is
participating personally, and not in their capacity as an employee, officer or
director of FiberChem, such Shareholder shall furnish to FiberChem in writing
such information as FiberChem reasonably requests for use in connection
therewith and agrees to indemnify and hold harmless FiberChem, its directors,
officers, agents and employees and each person who controls FiberChem (within
the meaning of Section 15 of the Securities Act or Section 20 of the Securities
Exchange Act of 1934) from and against all losses arising out of or based upon
any untrue statement of a material fact contained in any of the Registration
Statements or any prospectus or preliminary prospectus included therein or
arising out of or based upon any omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading, to
the extent, but only to the extent, that such untrue statement or omission is
contained in any information so furnished in writing by such Shareholder to
FiberChem expressly for use in such Registration Statement, prospectus or
preliminary prospectus and that such information was solely relied upon by
FiberChem in preparation of such Registration Statement, prospectus or
preliminary prospectus. In no event shall the liability of any Shareholder
hereunder be greater in amount than the dollar amount of the proceeds (net of
the payment of all expenses) received by such Shareholder upon the sale of
shares of FiberChem Common Stock giving rise to such indemnification obligation.
(x) FiberChem will pay all expenses of FiberChem and the Shareholders in
connection with the Registration Statement described in Section 2.7(i) and one
Demand Registration Statement described in Section 2.7(ii) above, in each
instance exclusive of any underwriting discount or commission and the fees and
expenses of Shareholders' legal counsel in connection with the sale of shares by
the Shareholders pursuant to such registration.
(xi) FiberChem acknowledges that the registration rights provided in
this Section 2.7 are also for the benefit of any of the Shareholders'
permitted transferees.
(xii) If after December 31, 2000, FiberChem does not deliver FiberChem
Common Shares upon conversion of FiberChem Pandel Series Stock issued pursuant
to this Agreement in lieu of shares of FiberChem Common Stock due to the failure
of FiberChem to have sufficient authorized common share capital to permit such
conversion, FiberChem shall file a registration statement (the "Pandel Series
Stock Registration Statement) on Form S-4 or such other appropriate form to
register the FiberChem Pandel Series Stock held by the Shareholders. Such Pandel
Series Stock Registration Statement shall be filed not later than 90 days after
the failure of FiberChem to issue FiberChem Common Shares upon such conversion.
The Shareholders shall have the same rights with respect to the Pandel Series
Stock Registration Statement as apply to the Registration Statement under
sections 2.7(ii) through (xi) above.
2.8 ABANDONED PROPERTY LAWS.
Payment or delivery of any shares of FiberChem Common Stock shall be
subject to applicable abandoned property, escheat and similar laws and neither
FiberChem nor the Surviving Corporation shall be liable to any holder of shares
of the Acquired Company common stock for any such shares, for any dividends or
distributions with respect thereto or for any cash in lieu of fractional shares
which may be delivered to any public official pursuant to any abandoned
property, escheat or similar laws.
2.9 EMPLOYMENT & NON-COMPETITION AGREEMENTS.
At the Closing, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ Lagregren, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇'▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall each enter into an Employment and
Non-Competition Agreement with FiberChem in the form annexed as Exhibit 3.9 to
the Arrangement Agreement.
2.10 COMPENSATION AGREEMENTS.
Prior to Closing Intrex and FiberChem shall have entered into the
Compensation Agreements with each of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇ Lagregren in the
form attached as Exhibit 3.10 to the Arrangement Agreement.
2.11 BROKERS; FINDERS.
Intrex and Entrenet have entered into the Entrenet Agreement dated April
12, 1999 under which Entrenet will be paid a finder's fee of 5% of the
Arrangement Consideration paid to the Participating Intrex Shareholders pursuant
to the Arrangement Agreement and to the Shareholders pursuant to this Agreement
(to a maximum of 3,000,000 shares of FiberChem Common Stock for both
transactions) to be satisfied at Closing by the issuance to Entrenet of shares
of FiberChem Common Stock.
ARTICLE 3 - CERTAIN ACTIONS
3.1 REASONABLE EFFORTS.
Subject to the terms and conditions of this Agreement and applicable law,
each of the parties hereto shall use its reasonable efforts to take, or cause to
be taken, all actions, and to do, or cause to be done, all things reasonably
necessary, proper or advisable to consummate and make effective the transactions
contemplated by this Agreement as soon as reasonably practicable, including such
actions or things as any other party hereto may reasonably request in order to
cause any of the conditions to such other party's obligation to consummate such
transactions to be fully satisfied. Without limiting the generality of the
foregoing, the parties shall (and shall cause their respective subsidiaries, and
use their reasonable efforts to cause their respective affiliates, directors,
officers, employees, agents, attorneys, accountants and representatives, to)
consult and fully cooperate with and provide reasonable assistance to each other
in (i) obtaining all necessary consents, approvals, waivers, licenses, permits,
authorizations, registrations, qualifications or other permission or action by,
and giving all necessary notices to and making all necessary filings with and
applications and submissions to, any Governmental
Entity or other person or entity, (ii) providing all such information about such
party, its subsidiaries and its officers, directors, partners and affiliates and
making all applications and filings as may be necessary or reasonably requested
in connection with FiberChem securities filings (which obligation shall survive
the consummation of the Merger); and (iii) in general, consummating and making
effective the transactions contemplated hereby.
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES OF PANDEL AND
THE PRINCIPAL SHAREHOLDER
Pandel and the Principal Shareholder warrant and represent jointly and
severally to the FiberChem and Pandel Mergerco as follows (as used herein,
Pandel's and the Principal Shareholder's "best knowledge" or to the "best
knowledge" of Pandel and the Principal Shareholder shall mean information
actually known by executive management of Pandel or by the Principal Shareholder
without due inquiry):
4.1 OWNERSHIP OF SHARES.
The authorized, issued and outstanding share capital of Pandel (the "Pandel
Shares") is set forth in Schedule 4.1. The owners of record, of the issued and
outstanding shares of Pandel are set forth on Schedule 4.1. The voting shares
set forth on Schedule 4.1 are the sole issued and outstanding voting shares of
Pandel and the non-voting shares shown on Schedule 4.1 are the sole issued and
outstanding non-voting shares of Pandel. All of the outstanding shares of Pandel
are duly authorized, validly issued, fully paid and non-assessable.
4.2 CAPACITY; ORGANIZATION; STANDING.
Pandel has or will have prior to Closing full capacity to enter into and
perform under this Agreement and all other agreements and instruments to be
entered into in connection with the transactions contemplated hereby, and to
consummate such transactions. Except as set forth on SCHEDULE 4.2, Pandel: (a)
does not own any subsidiaries; and (b) does not own, directly or indirectly,
shares or other securities in any other corporation, or any interest in any
partnership, joint venture or other business entity. Except as set forth on
Schedule 4.2 of this Agreement, Pandel does not own, directly or indirectly,
shares or other securities in any corporation, or any interest in any
partnership, joint venture or other business entity which is engaged, directly
or indirectly, in businesses competitive with that of FiberChem. This Agreement
has been, and each of the other agreements and instruments to be executed by
Pandel hereunder will, at the Closing, be duly executed and delivered by Pandel.
This Agreement constitutes, and each of such other agreements and instruments
will constitute, the legal, valid and binding obligations of Pandel enforceable
in accordance with their respective terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights generally or by general equitable principles. No
proceedings for the bankruptcy or insolvency of Pandel are pending or, to the
best of Pandel's knowledge, are contemplated. Pandel has been duly organized and
is validly existing under the laws of the State of Texas, has full corporate
power and authority to conduct its business as it is now being conducted and,
except as set forth in Schedule 4.2, is duly qualified to do business in each
jurisdiction where the nature of the property owned or leased, or the nature of
the business conducted by Pandel requires such qualification. Pandel has all
necessary licenses and authority to operate its business as now being conducted
and as will be conducted after the Closing assuming such business is conducted
as now operated.
4.3 LEGAL PROCEEDINGS.
(i) Except as set forth in SCHEDULE 4.3 of this Agreement, Pandel is not a
party to any pending litigation, arbitration or administrative proceeding or, to
the best of Pandel's knowledge: (a) to any investigation, and (b) no such
litigation, arbitration or administrative proceeding or investigation that might
result in any material adverse change in the financial condition, business or
properties of Pandel is threatened.
(ii) Except as disclosed in Schedule 4.3 to this Agreement, Pandel has no
knowledge of and has not received notice of any complaints, claims or threats,
plans or intentions to discontinue commercial relations or transactions from any
customer of Pandel, any purchaser of goods or services from Pandel, or any
employee or independent contractor in each such case material or significant to
the conduct or operation of Pandel or its business or any party to any agreement
to which Pandel is a party.
(iii) Except as disclosed in Schedule 4.3, to the best of Pandel's
knowledge, there is no claim (whether based on statute, negligence, breach of
warranty, strict liability or any other theory) relating directly or indirectly
to any product manufactured or sold, or any services performed, by Pandel.
(iv) To the best of Pandel's knowledge, Pandel is under no obligation with
respect to the return of goods in the possession of customers.
4.4 AUTHORIZATION; NO GOVERNMENTAL CONSENTS REQUIRED.
The execution and delivery by Pandel of this Agreement, the Certificate of
Merger and the consummation of the transactions contemplated by this Agreement,
as well as the performance of its obligations under this Agreement, have been
duly and validly authorized by Pandel's Board of Directors.
4.5 ENCUMBRANCES.
Except as disclosed in SCHEDULE 4.5, there are no liens, mortgages, deeds
of trust, claims, charges, security interests or other encumbrances or
liabilities of any type whatsoever to which any of the assets of Pandel is
subject.
4.6 TRADEMARKS.
Pandel owns the trademarks, the trade names, service marks, assumed names,
copyrights and registrations therefor (collectively "PANDEL TRADEMARKS")
specified in SCHEDULE 4.6. The Pandel Trademarks have been duly issued and have
not been canceled, abandoned or otherwise terminated except as otherwise
indicated in Schedule 4.6. Pandel is not in default under any of the licenses or
agreements relating to the Pandel Trademarks as listed in Schedule 4.6 and all
of such licenses and agreements are in effect. Pandel has not granted, and will
not grant prior to the Closing, licenses or other rights to use such Pandel
Trademarks. No other trademarks are either owned or used by Pandel. To the best
of Pandel's knowledge, the operation of Pandel's business does not infringe on
the trademarks of any third party. No claim has been made that there is any such
infringement. To the best of Pandel's knowledge, except as disclosed in Schedule
4.6, no trademark of any other person infringes the Pandel Trademarks of Pandel.
4.7 PATENTS, ETC.
Pandel owns the inventions, letters patent, applications for letters patent
and patent license rights, inventions, processes, designs, formulas, trade
secrets, know-how and other industrial property rights (collectively "PANDEL
PATENTS") necessary for the conduct of its business, specified as belonging to
it in SCHEDULE 4.7. The Pandel Patents have been duly issued and have not been
canceled, abandoned or otherwise terminated except as otherwise indicated in
Schedule 4.7. Pandel is not in default under any of the licenses or agreements
relating to the Pandel Patents as listed in Schedule 4.7 and all of such
licenses and agreements are in effect. Pandel has not granted, and will not
grant prior to the Closing, licenses or other rights to third parties to use
such Pandel Patents. No other patents are owned or used by Pandel. To the best
of Pandel's knowledge, the operation of Pandel's business does not infringe on
the patent rights of any third party. No claim has been made that there is any
such infringement. To the best of Pandel's knowledge, no patent of any person
infringes the Pandel Patents.
4.8 FINANCIAL STATEMENTS.
(i) The financial statements of Pandel as of and for the years ended
December 31, 1998 and December 31, 1999, and the unaudited financial statements
of Pandel as of March 31, 2000 (collectively, the "PANDEL FINANCIALS") together
with the related notes and schedules, when required, true, correct and complete
copies of which are attached hereto as SCHEDULE 4.8, (a) are in accordance with
the books of account and records of Pandel; (b) except as disclosed on Schedule
4.8 present fairly in all material respects, and are true, correct and complete
statements of the financial condition and the results of operations of Pandel as
at and for the periods therein specified; and (c) do not include or omit to
state any material fact which renders the Pandel Financials misleading.
(ii) Except as and to the extent shown or provided for in the Pandel
Financials or the notes and schedules thereto or as disclosed in any of the
Schedules to this Agreement or such current liabilities as may have been
incurred since December 31, 1999 in the ordinary course of business, Pandel has
no material claims, liabilities or obligations (whether accrued, absolute,
contingent or otherwise) which might be or become a charge against the assets or
liabilities of Pandel; as of March 31, 2000 there was no material asset used by
Pandel in its operations that has not been reflected in the Pandel Financials,
and, except as set forth in the Pandel Financials, no assets have been acquired
by Pandel since such date except in the ordinary course of business; and (b) all
reserves (if any) established by Pandel and set forth in the Pandel Financials
are adequate, appropriate and reasonable.
(iii) The Pandel Financials do not include any assets, liabilities, income
or expenses of any entity other than Pandel. All transactions between Pandel and
any other entity in which any of its shareholders is an officer, director or
owns 5% or more of the equity have, since December 31, 1999, been at prices no
less favorable to Pandel than could have been obtained from any independent
third party and prior to December 31, 1999, Pandel is not aware of any such
material transaction except as set forth on Schedule 4.8.
4.9 ABSENCE OF CERTAIN CHANGES.
Except as disclosed in SCHEDULE 4.9 or the Pandel Financials, since March
31, 2000 there has not been any material adverse change in the condition
(financial or otherwise), operations, assets, liabilities, earnings, business,
prospects or results of operations of Pandel (in this Section 4.9 customary or
seasonal fluctuations in the Financials as a result of ordinary and normal
operation of the business of
Pandel shall not constitute a material adverse change).
4.10 TAX MATTERS.
Except as disclosed in SCHEDULE 4.10, Pandel has timely filed all required
income tax returns and has timely filed with all other appropriate governmental
agencies all sales, ad valorem, franchise and other tax, license, gross receipts
and other similar returns and reports required to be filed by Pandel. Pandel has
reported all taxable income and losses on those returns on which such
information is required to be reported, and paid or provided for the payment of
all taxes due and payable by Pandel on said returns or taxes due pursuant to any
assessment received by it, including without limitation, any taxes required by
law to be withheld and/or paid in connection with any officers or employees
compensation or due pursuant to any assessment received by it. There are no
agreements for the extension of time for the assessment or payment of any
amounts of tax. Pandel shall bear all expenses and responsibilities for the
filing of federal and applicable state, local or other income tax returns and
reports of Pandel for the taxable year ended December 31, 1999. Except as
disclosed in Schedule 4.10, all tax liabilities of Pandel arising through the
end of the taxable year ended December 31, 1999, have been paid and all tax
liabilities of Pandel arising after December 31, 1999 have been paid or
adequately disclosed and properly reserved for on the books and records and
financial statements of Pandel. No tax return of Pandel for any period is
currently under audit by any tax authorities except as set forth on Schedule
4.10. No claim has been made by any taxing authority relating to any such
returns or any audit. For purposes of this Section 4.10, the word "timely" shall
mean that such returns were filed within the time prescribed by law for the
filing thereof, including the time permitted under any applicable extensions.
All taxes which Pandel is required by law to withhold and collect have been duly
withheld and collected, and have been timely paid over to the proper authorities
to the extent due and payable.
4.11 ACCOUNTS RECEIVABLE AND INVENTORY.
(i) The accounts receivable of Pandel reflected in the Pandel Financials
as at March 31, 2000 and the accounts receivable acquired by Pandel since such
date are valid, bona fide, subsisting claims for the aggregate amounts thereof
reflected in the Pandel Financials net of the reserves or allowances for
doubtful receivables reflected in the Pandel Financials or thereafter in
Pandel's books and records uniformly maintained in accordance with the Pandel
Financials, accounted for in accordance with generally accepted accounting
principles; and Pandel knows of no reason that would make such accounts
receivable, net of such amounts as Pandel has reserved on their books as of
December 31, 1999, taken as a whole, not collectible.
(ii) The inventory of Pandel reflected in the Pandel Financials as at March
31, 2000 and the inventory acquired by Pandel since such date and as set forth
on SCHEDULE 4.11 (a) has been purchased in the ordinary course of business, (b)
has been fully paid for unless otherwise reflected in the Pandel Financials, (c)
is marketable or adequate provision for obsolescence has been provided and (d)
to the best of Pandel's knowledge, there is no reason that would make such
inventory, net of such amounts as Pandel has reserved on their books as of March
31, 2000 taken as a whole, not marketable.
4.12 TITLE AND CONDITION OF PROPERTIES.
(i) Pandel does not own any real property. Pandel has good and marketable
title to all properties and assets, tangible and intangible, reflected in the
Financials and all properties acquired subsequent to December 31, 1999, which
have not been disposed of in the ordinary course of business
since December 31, 1999, which property is subject to no mortgage, lien, deed of
trust, claim, security interest, liability, conditional sales agreement,
easement, right-of-way or any other encumbrance.
(ii) Schedule 4.12 contains an accurate list of the Leases under which
Pandel is lessee of any real property and/or any personal property. Pandel
enjoys peaceful and undisturbed possession under all of the Leases. True and
correct copies of the Leases have been made available to FiberChem for
inspection. No notice of default or claim under any of the Leases, or to the
best of Pandel's knowledge, no indication of any default or claim has occurred
or desire not to renew any of the Leases, has been received by Pandel, and
Pandel has performed in all material respects, all obligations required to be
performed by them to date under the Leases.
(iii) All personal property, machinery and equipment which is material to
the business, operations or condition (financial or otherwise) of Pandel is in
operating condition and, subject to routine maintenance and ordinary wear and
tear, have been maintained in accordance with reasonable industry standards and
are suitable for the purpose for which they are used. Except as disclosed in
Schedule 4.12, Pandel is not aware of nor has it received notice of, the
violation of any applicable zoning regulation, ordinance or other law, order,
regulation or requirement in force on the date hereof relating to Pandel's
businesses or its owned or leased real or personal properties.
4.13 DESCRIPTION OF MATERIAL CONTRACTS.
(i) SCHEDULE 4.13 contains a complete and correct list as of the date
hereof of all agreements, contracts, instruments and commitments, obligations
and understandings of the following types, written or oral, to which Pandel is a
party, under which Pandel has any rights or by which Pandel or any of its
properties is bound, as of the date hereof: (a) mortgages, indentures, security
agreements and other agreements and instruments relating to the borrowing of
money or extension of credit; (b) employment and consulting agreements with
annual compensation in excess of $60,000; (c) collective bargaining agreements;
(d) bonus, profit-sharing, compensation, stock option, pension, retirement,
deferred compensation or other plans, agreements, trusts, funds or arrangements
for the benefit of sales and management personnel (whether or not legally
binding); (e) sales agency, manufacturer's representative or distributorship
agreements; (f) agreements, orders or commitments for the purchase by Pandel of
materials, supplies or finished products exceeding $25,000 in the aggregate from
any one person; (g) agreements, orders or commitments for the sale by Pandel of
their products or services exceeding $200,000; (h) agreements or commitments for
capital expenditures in excess of $25,000 for any single project (it being
warranted that the commitment for all undisclosed contracts for such agreements
or commitments does not exceed $50,000 in the aggregate); (i) agreements
relating to research; (j) agreements relating to the payment of royalties; (k)
brokerage or finder's agreements; (l) joint venture agreements; and (m) other
agreements, contracts and commitments which individually or in the aggregate for
any one party involve any expenditure by Pandel of more than $25,000.
(ii) Pandel has made available to FiberChem complete and correct copies of
all written agreements, contracts, commitments, obligations and undertakings,
together with all amendments thereto, listed on the Schedules hereto, and such
Schedules contain accurate descriptions of all oral agreements listed on such
Schedules. To the best of Pandel's knowledge, all such agreements, contracts,
commitments, obligations and undertakings are in full force and effect and,
except as disclosed in Schedule 4.13, all parties to, or otherwise bound by,
such agreements, contracts, commitments, obligations and undertakings have
performed all obligations required to be performed by them to date and Pandel is
not in default and no event, occurrence, condition or act exists which gives
rise to (or which with notice or the lapse of time, or both, could result in) a
default or right of cancellation, acceleration or loss of contractual benefits
under, any such contract, agreement,
commitment, obligation or undertaking. There have been no threatened
cancellations thereof, and there are no outstanding disputes under any such
contract, agreement, commitment, obligation or undertaking. Except as set forth
in Schedule 4.13, or in the express terms of any written contract, agreement,
commitment, obligation or undertaking, no consent of any party is required under
any such contract, agreement, commitment, obligation or undertaking which would
make such agreements not binding and in full force and effect as of the Closing
Date.
(iii) Except as otherwise set forth in Schedule 4.13, to the best of
Pandel's knowledge, each contract, lease, instrument and commitment required to
be described in the Schedules hereto is, on the date hereof, and will be at the
Closing, except to the extent it terminates or is terminable by its terms, in
full force and effect and there is not, under any such contract, lease,
instrument or commitment, any existing default by Pandel or such other parties
or any event that, with notice, lapse of time or both, would constitute a
default by Pandel or such other parties in respect of which adequate steps have
not been taken to cure such default or to prevent a default from occurring or
continuing.
4.14 ACCOUNTS PAYABLE.
Schedule 4.14 to this Agreement sets forth a true, correct and complete
list of all accounts payable of Pandel at March 31, 2000 including amounts
payable to trade creditors (the "TRADE CREDITORS") and other short-term
liabilities commonly identified as accounts payable, which are, to the best of
their knowledge, bona fide, valid and binding obligations of Pandel incurred in
the ordinary course of business on an arms-length basis.
4.15 DEFAULT; VIOLATIONS OR RESTRICTIONS, THIRD PARTY CONSENTS.
The execution, delivery and performance of this Agreement and of any
agreement to be executed and delivered by Pandel in connection with the
transactions contemplated hereby and the fulfillment of the terms and conditions
herein set forth and the consummation of any of the transactions contemplated
hereby or thereby will not (or with the giving of notice or the lapse of time or
both would not) (i) result in the breach of any term or provision of the
Certificate of Incorporation or By-laws of Pandel or (ii) violate any provision
of or result in the breach of, modification of, acceleration of the maturity of
obligations under, or constitute a default, or give rise to any right of
termination, cancellation, acceleration or otherwise be in conflict with or
result in a loss of contractual benefits to Pandel, under any of the terms,
conditions or provisions of any contract, lease, note, bond, mortgage, deed of
trust, indenture, license, security agreement, agreement or other instrument or
obligation to which Pandel is a party or by which it is bound, or require any
consent, approval or notice under any law, rule or decree or any such document
or instrument; or result in the creation or imposition of any lien, claim,
Pandel's restriction, charge or encumbrance upon any of Pandel's assets or
interfere with or otherwise adversely affect the ability to carry on the
business of Pandel after the Closing Date on substantially the same basis as it
is now conducted by Pandel. Except as set forth in SCHEDULE 4.15, no consent of
any party to any material agreement, contract, instrument, lease, license, note,
bond, mortgage, indenture or other obligation to which Pandel is a party, or by
which they or any of their assets is subject, is required for the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby and the continuation thereof after the
Arrangement without Pandel becoming obligated to make payments greater than
would have been required in the event the Merger was not consummated.
4.16 COURT ORDERS AND DECREES.
Except as set forth in SCHEDULE 4.16, Pandel has not received written or
oral notice that there is outstanding, pending, or threatened any order, writ,
injunction or decree of any court, governmental agency or arbitration tribunal
against or affecting Pandel, the Stock or any of Pandel's assets. To Pandel's
best knowledge Pandel is in compliance in all material respects with all
applicable Federal, state, county, municipal (or of any subdivision thereof)
laws, regulations and administrative orders in force at any applicable time to
which Pandel may be subject.
4.17 BOOKS AND RECORDS.
The books and records of Pandel are in all material respects, complete and
correct and have been maintained in accordance with good business practice. True
and complete copies of the Certificate of Incorporation and By-laws of Pandel
and all amendments thereto and true and complete copies of all minutes,
resolutions, stock certificates and stock transfer records of Pandel are
contained in the minute books and stock transfer books of Pandel and will be
delivered to FiberChem at the Closing.
4.18 PENSION AND WELFARE PLANS.
Pandel does not have and has never had in effect any pension, profit
sharing or other employee benefit plan.
4.19 INSURANCE.
SCHEDULE 4.19 contains a correct and complete description of all current
policies of insurance by or on behalf of Pandel in which Pandel is named as an
insured party, beneficiary or loss payable payee.
4.20 RIGHTS OF THIRD PARTIES.
Other than as disclosed in SCHEDULE 4.20 attached hereto, or specifically
provided for in this Agreement, Pandel has not entered into any leases,
licenses, easements or other agreements, recorded or unrecorded, granting rights
to third parties in any real or personal property of Pandel, and no person or
other entity has any right to possession, use or occupancy of any of the
property of Pandel.
4.21 LABOR MATTERS.
Except as set forth in SCHEDULE 4.21, Pandel is not a party to any
collective bargaining agreement with any labor union or association. There are
no discussions, negotiations, demands or proposals that are pending or have been
conducted or made with or by any labor union or association, and there are not
pending or threatened any labor disputes, strikes or work stoppages that may
have a material adverse effect upon the continued business or operation of
Pandel. To the best of Pandel's knowledge, Pandel (i) is in compliance with all
laws respecting employment and employment practices, terms and conditions of
employment and wages and hours, and (ii) is not engaged in any unfair labor
practices.
4.22 RELATIONSHIPS WITH VENDORS AND CUSTOMERS.
To the best knowledge of Pandel there are no present or future conditions
or state of facts or circumstances that would materially adversely affect the
financial or business condition of Pandel after the Closing Date. Pandel's
relationships with its customers, clients and vendors are satisfactory, and
Pandel has no knowledge of any facts or circumstances which might materially
alter, negate, impair or in any way materially adversely affect the continuity
of any such relationships. Except as set forth in SCHEDULE 4.22, Pandel has no
knowledge of any material outstanding claims of any of its customers or clients
presently outstanding, pending or threatened against Pandel. Pandel has no
knowledge of any present or future condition or state of facts or circumstances
which would prevent the business of Pandel from being carried on after the
Closing Date in essentially the same manner as it is presently being carried on.
4.23 COMPENSATION PLANS.
Schedule 4.23 contains a correct and complete list of all employees of
Pandel whose annual compensation for 2000 is expected to exceed $60,000.
Schedule 4.23 contains a correct and complete description of all compensation
plans and arrangements; bonus and incentive plans and arrangements; deferred
compensation plans and arrangements; stock purchase and stock option plans and
arrangements; hospitalization and other life, health or disability insurance or
reimbursement programs; holiday, sick leave, severance, vacation, tuition
reimbursement, personal loan and product purchase discount policies and
arrangements, policy manuals and any other plans or arrangements providing for
benefits for employees of Pandel.
4.24 GOVERNMENTAL LICENSES.
Pandel has or will have prior to Closing all material governmental and
administrative consents, permits, appointments, approvals, licenses,
certificates and franchises which are (i) necessary for the operation of Pandel,
and (ii) required in connection with Pandel's execution, delivery or performance
of this Agreement, all of which have been obtained by Pandel and are in full
force and effect.
4.25 BINDING OBLIGATION.
This Agreement has been duly executed and delivered by Pandel and
constitutes the legal, valid and binding obligation of Pandel, enforceable
against Pandel in accordance with its terms, except to the extent that such
enforceability may be limited by general principles of equity or bankruptcy,
insolvency and other similar laws affecting the enforcement of creditors' rights
generally. All action of the Board of Directors of Pandel and all other
corporate action necessary to authorize the execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated hereby
has been duly and validly taken.
4.26 BROKERS.
No agent, broker, investment banker, person, or firm acting on behalf of
Pandel or any firm or corporation affiliated with it, or under its authority, is
or will be entitled to a financial advisory fee, brokerage commission, finder's
fee or other like payment in connection with the transactions contemplated
hereby except the consideration payable to Entrenet Group, LLC, by Intrex
pursuant to the Entrenet Agreement.
4.27 COMPLIANCE WITH LAWS.
(i) The operations and activities of Pandel have previously complied and
continue to comply in all material respects with all applicable United States
and Texas laws, statutes, codes,
ordinances, rules, regulations, permits, judgments, orders, writs, awards,
decrees or injunctions (collectively referred to in this Article as the "LAWS")
as in effect on or before the date of this Agreement. To the best of Pandel's
knowledge, neither the ownership of Pandel nor the conduct of the business of
Pandel as presently conducted conflicts with the rights of any other person,
firm or company or violates, with or without the giving of notice or the passage
of time, or both, will violate, conflict with or result in a default, right to
accelerate or loss of rights under, any terms or provisions of their
Certificates of Incorporation or By-laws as presently in effect, or any lien,
encumbrance, mortgage, deed of trust, lease, license, agreement, understanding,
or Laws to which Pandel is a party or by which it may be bound or affected.
Except as set forth in SCHEDULE 4.27, Pandel has received no notice or
communication from any third party asserting a failure to comply with any Laws,
nor has Pandel received any notice that any authority or third party intends to
seek enforcement against Pandel to compel compliance with any such Laws.
(ii) Except as set forth in Schedule 4.27, there are no existing claims or
to the best of Pandel's knowledge, potential claims which may exist against
Pandel, for, with respect to, or as direct or indirect result of, the presence
on or under, or the escape, seepage, leakage, spillage, discharge, or emission
discharging, from the real property of Pandel of any Hazardous Material,
including, without limitation, any losses, liabilities, damages, injuries,
costs, expenses, reasonable fees of counsel or claims asserted or arising under
any applicable United States federal, Canadian, state or local statute, law,
ordinance, code, rule, regulation, order or decree now or at any time hereafter
in effect, regulating, relating to or imposing liability or standards of conduct
concerning any Hazardous Material.
(iii) Except as set forth in Schedule 4.27, since the date first acquired
or leased by Pandel, Pandel has not placed any "Hazardous Material" on or under
the real property owned or leased by Pandel and, to the best of Pandel's
knowledge, there has been no "Hazardous Material" on or under the real property
owned or leased by Pandel. In this Agreement "Hazardous Material" means any
hazardous substances, hazardous materials, toxic substances or solid waste as
defined in the CLEAN AIR ACT (United States), the COMPREHENSIVE ENVIRONMENTAL
RESPONSE COMPENSATION AND LIABILITY ACT (United States), as amended, the
RESOURCE CONSERVATION AND RECOVERY ACT (United States), as amended, and the
HAZARDOUS MATERIALS TRANSPORTATION ACT (United States), any substances or
materials listed as hazardous or toxic in the United States Department of
Transportation Table, by the United States Environmental Protection Agency or
any successor agency or under any federal, state or local laws or regulations,
or any asbestos, polychlorinated bi-phenyls, urea formaldehyde foam, explosives
or radioactive materials.
(iv) Neither Pandel nor to the best knowledge and belief of Pandel, any
officer, employee or agent of Pandel acting on its behalf, nor any other person
acting on its behalf, has, directly or indirectly, within the past three years
given, agreed to give or received or agreed to receive any gift or similar
benefit to any customer, supplier, governmental employee or other person who is
or may be in a position to help or hinder Pandel (or assist Pandel in connection
with any actual or proposed transaction) which (i) might subject Pandel to any
damage or penalty in any civil, criminal or governmental litigation or
proceeding, (ii) if not given in the past might have had an adverse effect on
the assets, business or operation of Pandel, or (iii) if not continued in the
future, might adversely affect the assets, the business or the operations or
prospects of Pandel, or which might subject Pandel to suit or penalty in any
private or governmental litigation or proceeding.
4.28 GUARANTEES.
Except as disclosed in SCHEDULE 4.28, the shareholders of Pandel have not
personally
guaranteed any of the obligations of the business of Pandel.
4.29 BENEFITS.
All accrued holiday, vacation, sick or other compensation or benefits to
which employees of Pandel are entitled to receive from Pandel are set forth on
SCHEDULE 4.29.
4.30 INTREX.
Pandel represent and warrants to Fiberchem and Pandel Mergerco, with
respect to Intrex, to the effect set forth in Article 5 of the Arrangement
Agreement.
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF FIBERCHEM AND PANDEL MERGERCO
FiberChem warrants and represents jointly and severally to Pandel and to
the Shareholders to the effect set forth in Article 6 of the Arrangement
Agreement. FiberChem and Pandel Mergerco each warrants and represents jointly
and severally to Pandel and the Shareholders as follows (as used herein,
FiberChem's and Pandel Mergerco's "best knowledge" or to the "best knowledge" of
FiberChem and Pandel Mergerco shall mean information actually known by executive
management of FiberChem or by the Pandel Mergerco without due inquiry):
5.1 CAPACITY; ORGANIZATION; STANDING.
FiberChem and Pandel Mergerco each has or will have prior to Closing full
capacity to enter into and perform under this Agreement and all other agreements
and instruments to be entered into in connection with the transactions
contemplated hereby, and to consummate such transactions. This Agreement has
been, and each of the other agreements and instruments to be executed by
FiberChem and Pandel Mergerco hereunder will, at the Closing, be duly executed
and delivered by FiberChem and Pandel Mergerco. This Agreement constitutes, and
each of such other agreements and instruments will constitute, the legal, valid
and binding obligations of FiberChem and Pandel Mergerco enforceable in
accordance with their respective terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights generally or by general equitable principles. No
proceeding for the bankruptcy or insolvency of FiberChem or Pandel Mergerco is
pending or, to the best of FiberChem's or Pandel Mergerco's knowledge, is
contemplated. Each of FiberChem and Pandel Mergerco has been duly organized and
is validly existing under the laws of the State of Delaware, has full corporate
power and authority to conduct its business as it is now being conducted and is
duly qualified to do business in each jurisdiction where the nature of the
property owned or leased, or the nature of the business conducted by it requires
such qualification.
5.2 BUSINESS ACTIVITIES OF PANDEL MERGERCO.
Prior to the Effective Time, Pandel Mergerco will engage in no business
activities and will have no subsidiaries and will conduct its operations only as
contemplated by this Agreement.
ARTICLE 6 - SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
6.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made by the Acquired Company, the
Principal Shareholder, FiberChem or Pandel Mergerco in this Agreement,
including without limitation all representations and warranties made in any
Exhibit or Schedule hereto or certificate delivered hereunder, shall survive
the Closing until , 2001 (the "Survival Date"); provided, however,
that all representations and warranties made by the Acquired Company and the
Principal Shareholder in SECTIONS 4.1, 4.10 and 4.18, hereof shall survive
the Closing until and through three months after the expiration of the
applicable statute of limitations (the "Extended Survival Date").
6.2 INDEMNIFICATION BY PRINCIPAL SHAREHOLDER.
As an inducement to FiberChem to enter into this Agreement, provided that
the Merger contemplated by this Agreement is closed, the Principal Shareholder
hereby agrees to indemnify, defend and hold harmless FiberChem and Pandel
Mergerco from and against all liabilities, losses, costs or damages whatsoever,
both monetary and non-monetary (including reasonable expenses and reasonable
fees of legal counsel) ("Claims") made prior to the Survival Date or the
Extended Survival Date, if applicable, arising out of or based upon the
inaccuracy in any material respect of any representation, warranty, covenant or
any other agreement or obligation, of the Acquired Company set forth in this
Agreement (except to the extent of any inaccuracy disclosed in writing to
FiberChem and Pandel Mergerco prior to the Closing Date), to the extent of the
Merger Consideration paid or payable to the Principal Shareholder. The Principal
Shareholder hereby waives any rights of contribution and/or indemnification from
the Acquired Company and/or the Surviving Corporation.
Prior to the Closing, the foregoing indemnity shall be provided solely
by the Acquired Company and not the Principal Shareholder. However, once the
Closing has occurred, the Principal Shareholder shall not seek contribution from
the Acquired Company. The principal Shareholder shall have the right to pay
FiberChem, at his election, in cash or Escrow Shares or other shares of
FiberChem Common Stock, valued at $ per share for any payment made to FiberChem
under this ARTICLE 6.
6.3 INDEMNIFICATION BY FIBERCHEM AND PANDEL MERGERCO.
Provided that the Merger contemplated by this Agreement is closed,
FiberChem and Pandel Mergerco hereby agree to indemnify, defend and hold
harmless the Shareholders from and against all Claims made prior to the Survival
Date arising out of or from or based upon the inaccuracy in any material respect
of any representation or warranty contained in Article 5 by FiberChem and Pandel
Mergerco, the non-performance by FiberChem and Pandel Mergerco in any material
respect of any covenant, agreement or obligation to be performed by FiberChem
and Pandel Mergerco under this Agreement, or any liabilities arising out of the
operation of the business of the Acquired Company by FiberChem and Pandel
Mergerco after the Closing Date.
6.4 DEFENSE OF CLAIMS.
(i) Whenever any Claim shall arise for indemnification hereunder, the party
entitled to indemnification (the "Indemnitee") shall notify the indemnifying
party (the "Indemnitor") in writing within 30 days after the Indemnitee has
actual knowledge that it is entitled to indemnification of such Claim
constituting the basis for such Claim (the "Notice of Claim"). The Notice of
Claim shall specify all facts known to the Indemnitee giving rise to such
indemnification claim and the amount or an estimate of the amount of the
liability arising therefrom.
(ii) If the facts giving rise to any such indemnification shall involve any
actual, threatened or possible Claim or demand by any person against the
Indemnitee, the Indemnitor shall be entitled (without prejudice to the right of
the Indemnitee to participate at its expense through co-counsel of its own
choosing) to contest or defend such Claim at its expense and through counsel of
its own choosing if it gives written notice of the intention to do so to the
Indemnitee within 10 days after receipt of the Notice of Claim; provided that
Indemnitor diligently prosecutes or defends such Claim.
(iii) The Indemnitee shall not settle any claim which would give rise to
liability on the part of the Indemnitor under the indemnity contained in this
Section without the written consent of the Indemnitor, which consent shall not
unreasonably be withheld, conditioned or delayed. If a firm offer is made to
settle a Claim or litigation defended by the Indemnitee and the Indemnitor
refuses to accept such offer within 20 days after receipt of written notice from
the Indemnitee of the terms of such offer, then, in such event, the Indemnitee
shall continue to contest or defend such claim and shall be indemnified pursuant
to the terms hereof. If a firm offer is made to settle a Claim or litigation and
the Indemnitor notifies the Indemnitee in writing that the Indemnitor desires to
accept and agree to such settlement, but the Indemnitee elects not to accept or
agree to it, the Indemnitee may continue to contest or defend such Claim and, in
such event, the total maximum liability of the Indemnitor to indemnify or
otherwise reimburse the Indemnitee hereunder with respect to such Claim shall be
limited to and shall not exceed the amount of such settlement offer, plus
reasonable out-of-pocket costs and expenses (including reasonable attorneys'
fees and disbursements) to the date of notice that the Indemnitor desires to
accept such settlement.
ARTICLE 7 - COVENANTS OF ▇▇▇▇▇▇
▇▇▇▇▇▇ hereby covenants and agrees:
7.1 FURTHER ASSURANCES.
From time to time at the reasonable request of FiberChem, and without
further consideration, Pandel shall execute and deliver such additional
instruments and take such other action as FiberChem may reasonably require to
carry out the terms of this Agreement.
7.2 ACCESS.
Subsequent to the date hereof and prior to the Closing Date, Pandel will
continue to give to FiberChem and its counsel, accountants, and other
representatives, reasonable access during normal business hours to all of their
properties, books, contracts, commitments and records so that FiberChem may have
full opportunity to make such investigation as it shall reasonably desire.
FiberChem may use such information to commence, at FiberChem's expense, the
audit of Pandel, using ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP.
7.3 CONFIDENTIALITY.
From and after the date of this Agreement until the Closing or the
termination of this Agreement, Pandel and its representatives will maintain the
confidentiality of all documents and information of a confidential nature
disclosed to them in the course of negotiations and their due diligence review
and will in no event use any confidential information for any purpose other than
for the evaluation of the transactions contemplated herein, and in the event of
termination of this Agreement will destroy all copies of documentation which
each party may have delivered to them and will not use any confidential
information from FiberChem for its own benefit.
7.4 CLOSING DOCUMENTS.
Provided that FiberChem has fully performed its obligations and Pandel's
conditions have been satisfied, Pandel shall execute and deliver all instruments
and documents required as a condition precedent to the Closing under Article 9
hereof and take all action required to carry out the terms of this Agreement and
to consummate the transactions contemplated hereby.
7.5 THIRD PARTY CONSENTS.
Pandel will obtain and deliver to FiberChem all written consents of third
parties to any material contracts as specified on the Schedules in connection
with the Merger and to enable FiberChem to obtain the benefits intended to be
conferred by this Agreement.
7.6 NOTICE OF EVENTS OR CHANGES.
Pandel shall promptly notify FiberChem of any event, occurrence or
transaction which would have been required to have been disclosed on any
Schedule to this Agreement, had such event, occurrence or transaction existed on
the Effective Date, including, without limitation, any actions, claims, or
legal, administrative or arbitration proceedings, or investigations, threatened
or commenced, which, if pending on the Effective Date, would have been required
to be described in any Schedule hereto, or which otherwise relate to or affect
its business or assets in any material respect. Pandel shall use its best
efforts to defend against any such actions, claims, proceedings or
investigations.
7.7 CONDUCT OF BUSINESS UNTIL CLOSING.
Pandel agrees that until the Closing Date, unless it has received the prior
written consent of FiberChem, it will:
(i) operate its business only in the usual, regular and ordinary course
consistent with reasonable business practice;
(ii) use all reasonable efforts as to events within Pandel's control to
prevent the occurrence of any change or event which would prevent any of the
representations and warranties of Pandel contained herein from being true at and
as of the Closing Date with the same effect as though such representations and
warranties had been made at and as of the Closing Date;
(iii) use its best efforts to preserve its present relationship with
suppliers, customers and others having business dealings with it;
(iv) pay and discharge all costs and expenses of carrying on its business
consistent with past
business practices;
(v) not increase the compensation of any Employee or make any
representation or commitment to do so;
(vi) not create or suffer any Liens upon any of its assets (other than
Liens set forth in the Schedules);
(vii) not acquire or dispose of any assets or enter into any transaction,
except in the ordinary course of business consistent with past practice;
(viii) maintain books, accounts and records in the usual, regular, true and
ordinary manner;
(ix) not incur any obligation or liability (fixed or contingent), except in
the ordinary course of business consistent with past practice;
(x) not make any dividend or bonus disbursements without FiberChem's prior
approval (other than dividends reasonably estimated to pay taxes on corporate
earnings and bonuses payable pursuant to existing plans or agreements);
(xi) not cancel or compromise any material debt or claim owed to Pandel,
other than in the ordinary course of business consistent with past practice;
(xii) not waive or release any rights of material value with respect to its
assets, except in the ordinary course of business consistent with past practice;
(xiii) not modify or change in any material respect or terminate any
existing license, lease, contract or other document required to be listed on the
Schedules to this Agreement other than in the ordinary course of business
consistent with past practice, except that Pandel shall be permitted to modify
or change existing licenses, leases, Contracts and other documents to obtain the
consents referred in any Schedule hereto if FiberChem consents to such
modification or change, which consent shall not be unreasonably withheld;
(xiv) not make any loans or extensions of credit, except to trade
purchasers in the ordinary course of business consistent with past practice.
(xv) maintain its properties, machinery and equipment in their present
condition and repair, normal wear and tear excepted; and
(xvi) continue all policies of insurance in full force and effect up to and
including the Closing Date.
7.8 UPDATE SCHEDULES.
At the Closing, Pandel will update by amendments or supplements each of the
Schedules delivered pursuant to this Agreement and any other written disclosure
in writing from Pandel to reflect any change in the information set forth in
said Schedules or other disclosure. Pandel hereby represents and warrants that
such Schedules and such written disclosures, as so amended or supplemented,
shall be true, correct and complete in all material respects as of the Closing
Date.
7.9 NO SOLICITATION OF COMPETING OFFERS.
Prior to the Closing Date, Pandel will not, directly or indirectly, seek,
solicit, initiate or encourage (including by way of furnishing any non-public
information concerning the business, properties or assets of Pandel) or enter
into any discussions or negotiations with any person or group regarding any
Acquisition Proposal (as defined below). Pandel agrees to notify FiberChem
promptly by telephone, and thereafter confirm in writing, if any Acquisition
Proposal is received by Pandel. As used in this paragraph 7.9, "ACQUISITION
PROPOSAL" shall mean any proposal received by Pandel prior to the Closing Date
for a merger or other business combination involving Pandel or relating to the
acquisition of the shares of Pandel or the disposition of any of the assets of
Pandel except for dispositions of assets for not less than fair market value
which are made in the ordinary course of business and are consistent with past
practice and with this Agreement.
ARTICLE 8 - COVENANTS OF FIBERCHEM
FiberChem hereby covenants and warrants as follows:
8.1 CLOSING DOCUMENTS.
Provided that Pandel has fully performed its respective obligations and
FiberChem's conditions hereof have been satisfied, FiberChem shall execute and
deliver all instruments and documents required as a condition precedent to
Closing under Article 10 hereof and take all action required to carry out the
terms of this Agreement and to consummate the transactions contemplated hereby.
8.2 NONINTERFERENCE.
FiberChem shall not take or omit to take any action that (i) if taken or
omitted on or before the date of this Agreement, would make untrue any of the
representations and warranties contained in Article 5 of this Agreement, or (ii)
would interfere with FiberChem's ability to perform or would prevent performance
of any of its obligations under this Agreement or any of the Other Agreements or
instruments provided for herein.
8.3 CONFIDENTIALITY.
From and after the date of this Agreement until the Closing or the
termination of this Agreement, FiberChem and its representatives will maintain
the confidentiality of all documents and information of a confidential nature
disclosed by Pandel or the Shareholders in the course of their negotiations and
FiberChem's due diligence review and will in no event use any confidential
information for any purpose other than for the evaluation of the transactions
contemplated herein and the financing of this transaction. In the event this
Agreement is terminated, FiberChem will destroy all copies of documentation
which it received from or on behalf of Pandel and will not use any confidential
information for its own benefit.
8.4 ACCESS.
Subsequent to the date hereof, and prior to the Closing Date, FiberChem
will give to Pandel, their counsel, accountants and other representatives,
reasonable access to all of its properties, books, contracts, commitments and
records, so that Pandel may have full opportunity to make such investigation as
it shall reasonably desire.
8.5 THIRD PARTY CONSENTS.
FiberChem will obtain and deliver to Pandel all written consents of third
parties to any material contracts as specified on the Schedules in connection
with the Arrangement and to enable Pandel to obtain the benefits intended to be
conferred by this Agreement.
8.6 NOTICE OF EVENTS OR CHANGES.
FiberChem shall promptly notify Pandel of any event, occurrence or
transaction which would have been required to have been disclosed on any
Schedule to this Agreement, had such event, occurrence or transaction existed on
the Effective Date, including, without limitation, any actions, claims, or
legal, administrative or arbitration proceedings, or investigations, threatened
or commenced, which, if pending on the Effective Date, would have been required
to be described in any Schedule hereto, or which otherwise relate to or affect
its business or assets in any material respect. FiberChem shall use its best
efforts to defend against any such actions, claims, proceedings or
investigations.
8.7 CONDUCT OF BUSINESS UNTIL CLOSING.
FiberChem agrees that until the Closing Date, unless it has received the
prior written consent of Pandel, it will:
(i) operate its business only in the usual, regular and ordinary course
consistent with reasonable business practice;
(ii) use all reasonable efforts as to events within FiberChem's control to
prevent the occurrence of any change or event which would prevent any of its
representations and warranties of FiberChem contained herein from being true at
and as of the Closing Date with the same effect as though such representations
and warranties had been made at and as of the Closing Date;
(iii) use its best efforts to preserve its present relationship with
suppliers, customers and others having business dealings with it;
(iv) pay and discharge all costs and expenses of carrying on its business
consistent with past business practices;
(v) not increase the compensation of any Employee or make any
representation or commitment to do so except as contemplated by the Employment
and Non-Competition Agreements;
(vi) not create or suffer any Liens upon any of its assets (other than
Liens set forth in the Schedules);
(vii) not acquire or dispose of any assets or enter into any transaction,
except in the ordinary course of business consistent with past practice;
(viii) maintain books, accounts and records in the usual, regular, true and
ordinary manner;
(ix) not incur any obligation or liability (fixed or contingent), except in
the ordinary course of business consistent with past practice;
(x) not make any dividend or bonus disbursements without Pandel's prior
approval (other
than dividends to pay any taxes on corporate earnings and bonuses payable
pursuant to existing plans or arrangements);
(xi) not cancel or compromise any material debt or claim owed to FiberChem,
other than in the ordinary course of business consistent with past practice;
(xii) not waive or release any rights of material value with respect to its
assets, except in the ordinary course of business consistent with past practice;
(xiii) not modify or change in any material respect or terminate any
existing license, lease, contract or other document required to be listed on the
Schedules to this Agreement other than in the ordinary course of business
consistent with past practice, except that FiberChem shall be permitted to
modify or change existing licenses, leases, Contracts and other documents to
obtain the consents referred in any Schedule hereto if Intrex consents to such
modification or change, which consent shall not be unreasonably withheld;
(xiv) not make any loans or extensions of credit, except to trade
purchasers in the ordinary course of business consistent with past practice.
(xv) maintain its properties, machinery and equipment in their present
condition and repair, normal wear and tear excepted; and
(xvi) continue all policies of insurance in full force and effect up to and
including the Closing Date.
(xvii) not permit Pandel Mergerco to engage in any business or other
activity prior to the Effective Time except to perform its obligations under
this Agreement.
8.8 UPDATE SCHEDULES.
At the Closing, FiberChem will update by amendments or supplements each of
the Schedules delivered pursuant to this Agreement and any other written
disclosure in writing from FiberChem to reflect any change in the information
set forth in said Schedules or other disclosure. FiberChem hereby represents and
warrants that such Schedules and such written disclosures, as so amended or
supplemented, shall be true, correct and complete in all material respects as of
the Closing Date.
8.9 NO SOLICITATION OF COMPETING OFFERS.
Prior to the Closing Date, FiberChem will not, directly or indirectly,
seek, solicit, initiate or encourage (including by way of furnishing any
non-public information concerning the business, properties or assets of
FiberChem) or enter into any discussions or negotiations with any person or
group regarding any Acquisition Proposal (as defined below). FiberChem agrees to
notify Pandel promptly by telephone, and thereafter confirm in writing, if any
Acquisition Proposal is received by FiberChem. As used in this Section 8.9,
"Acquisition Proposal" shall mean any proposal received by FiberChem prior to
the Closing Date for a merger or other business combination involving FiberChem
or relating to the acquisition of the shares of FiberChem or the disposition of
any of the assets of FiberChem except for dispositions of assets for not less
than fair market value which are made in the ordinary course of business and are
consistent with past practice and with this Agreement.
8.10 SUBSEQUENT ACTION.
Subsequent to the consummation of the Merger, when and if deemed
appropriate by the Board of Directors FiberChem shall use its best efforts to
(a) cause the shares of FiberChem to be listed on NASDAQ, (b) raise additional
working capital, and (c) cause a reverse split of FiberChem's Common Shares of
up to 1 for 50 shares in order to effect a listing on NASDAQ or otherwise.
ARTICLE 9 - CONDITIONS PRECEDENT TO FIBERCHEM'S OBLIGATIONS
The obligations of FiberChem under this Agreement are subject to the
following conditions:
9.1 NO BREACH OF REPRESENTATIONS, ETC.
There shall not have been any breach of the representations, warranties,
covenants and agreements of Pandel contained in this Agreement, and all such
representations and warranties shall be true at all times on and before the
Closing as if given at such times, except to the extent that any such
representation or warranty is expressly stated to be true as of some other time.
9.2 COMPLIANCE WITH AGREEMENT.
Pandel shall have performed and complied in all material respects with all
agreements and covenants required by this Agreement to be performed or complied
with by them prior to or at the Closing Date. All documents and instruments
required in connection with this Agreement shall be reasonably satisfactory in
form and substance to FiberChem and Snow ▇▇▇▇▇▇ ▇▇▇▇▇▇ P.C., counsel for
FiberChem.
9.3 NO MATERIAL ADVERSE CHANGE.
There shall have been no material adverse change in the condition
(financial or otherwise), business, assets, liabilities or earnings of Pandel or
Intrex on a consolidated basis (including subsidiaries). For this purpose,
customary or seasonal fluctuations in Pandel's or Intrex's financial statements
as a result of ordinary and normal operation of their respective businesses
shall not constitute a material adverse change.
9.4 CERTIFICATES.
FiberChem shall have received certificates dated the Closing Date and
signed by Pandel, certifying that the conditions specified in subsections 9.1,
9.2 and 9.3 above have been fulfilled except to the extent that any
nonfulfillment was disclosed in writing to FiberChem prior to the Closing Date.
9.5 CONSENTS AND APPROVALS.
Pandel shall have obtained and delivered to FiberChem any required consents
or approvals of any third parties whose consent is required to the transactions
contemplated hereunder.
9.6 CORPORATE DOCUMENTS.
FiberChem shall have received originals or certified copies, reasonably
satisfactory in form and substance to FiberChem, of all such corporate documents
of Pandel as FiberChem shall reasonably require, including without limitation
the following:
(i) the Certificate of Incorporation and all amendments thereto and
restatements thereof
certified as of a recent date by the Secretary of State of the State of Texas;
(ii) Certificate of Good Standing issued by the Secretary of State of the
State of Texas;
(iii) copies of the minutes and resolutions of the Board of Directors and
shareholders of Pandel showing the authorization and approval by such Board and
of such shareholders of the execution and delivery by Pandel to FiberChem of
this Agreement and of the agreements and instruments provided for herein and of
the performance of the obligations under this Agreement and such other
instruments and agreements, certified as of a recent date by the Secretaries or
other officers of Pandel; and
(iv) a Certificate of Incumbency identifying the officers and directors of
Pandel immediately before Closing; and
(v) a Certificate of Officers of Pandel, in form and content acceptable to
FiberChem as to certain factual matters.
9.7 OPINIONS OF PANDEL'S COUNSEL.
FiberChem shall have received written opinions of counsel for Pandel dated
as of the Closing Date in form and content reasonably acceptable to FiberChem.
9.8 NO TERMINATION.
This Agreement shall not have been terminated prior to the Effective Time
by mutual consent or by FiberChem, as permitted in Article 12.
9.9 ARRANGEMENT AGREEMENT
All conditions to FiberChem's obligations under the Arrangement Agreement
shall have been satisfied or waived and the Effective Time under this Agreement
shall occur immediately prior to the closing under the Arrangement Agreement.
9.10 POOLING AGREEMENTS.
Each of the Participating Intrex Shareholders shall have executed a Pooling
Agreement.
9.11 FINANCIAL STATEMENTS.
FiberChem shall have received unaudited financial statements of Pandel for
the respective periods set forth in Section 4.8.
9.12 REGULATORY APPROVALS.
The parties shall have received all regulatory approvals required in
connection with the transactions contemplated by this Agreement, all notice
periods and waiting periods required after the granting of any such approvals
shall have passed, and all such approvals shall be in effect.
9.13 FAIRNESS OPINION.
FiberChem shall have received from an independent third party an opinion
that the Arrangement Consideration, as to the Arrangement, and the Merger
Consideration, as to the Merger, taken as a whole, is fair to FiberChem's public
shareholders.
ARTICLE 10 - CONDITIONS PRECEDENT TO PANDEL'S OBLIGATIONS
The obligations of Pandel under this Agreement are subject to the following
conditions:
10.1 NO BREACH OF REPRESENTATIONS, ETC.
There shall not have been any breach of the representations, warranties,
covenants and agreements of FiberChem or Pandel Mergerco contained in this
Agreement, and all such representations and warranties shall be true at all
times at and before the Closing, except to the extent that any such
representation or warranty is expressly stated to be true as of some other time.
10.2 COMPLIANCE WITH AGREEMENTS.
FiberChem and Pandel Mergerco shall each have performed and complied in all
material respects with all agreements and covenants required by this Agreement
to be performed or complied with by it prior to Closing. All documents and
instruments required in connection with this Agreement shall be reasonably
satisfactory in form and substance to ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Esq., counsel for
Pandel.
10.3 NO TERMINATION.
This Agreement shall not be terminated prior to the Effective Time by
mutual consent or by Pandel, as permitted in Article 12 hereof.
10.4 CERTIFICATES.
Pandel and the Shareholders shall have received certificates dated the
Closing Date and signed by FiberChem and Pandel Mergerco, certifying that the
conditions specified in Subsections 10.1, 10.2 and 10.3 above have been
fulfilled.
10.5 OPINION OF COUNSEL.
Pandel and the Shareholders shall have received a written opinion of Snow
▇▇▇▇▇▇ ▇▇▇▇▇▇ P.C., counsel for FiberChem and Pandel Mergerco, dated as of the
Closing Date, in form and content acceptable to Pandel.
10.6 NO MATERIAL ADVERSE CHANGE.
There shall have been no material adverse change in the condition
(financial or otherwise), business, assets, liabilities or earnings of
FiberChem.
10.7 CORPORATE DOCUMENTS.
Pandel shall have received originals or certified copies, reasonably
satisfactory in form and substance to it, of the following corporate documents
of FiberChem and Pandel Mergerco:
(i) a certificate of existence certifying as of a recent date that each of
them is a corporation
in good standing under the laws of the jurisdiction of its incorporation;
(ii) copies of the minutes and resolutions of the Board of Directors of
each of them showing the authorization and approval by such Boards of the
execution and delivery by each of them to Pandel of this Agreement and the
agreements and instruments provided for herein and of the performance of the
obligations of each of them under this Agreement and such other instruments and
agreements, certified as of a recent date by the Secretary or another officer of
FiberChem or Pandel Mergerco, as applicable; and
(iii) certificates of incumbency identifying the officers and directors of
each of them immediately before Closing; and
(iv) a Certificate of the Officers of FiberChem in form and content
acceptable to Pandel as to certain factual matters.
10.8 ARRANGEMENT AGREEMENT.
All conditions to FiberChem's obligations under the Arrangement Agreement
shall have been satisfied or waived and the Effective Time under this Agreement
shall occur immediately prior to the closing under the Arrangement
Agreement.
10.9 CONSENTS AND APPROVALS.
FiberChem shall have obtained and delivered to Pandel any required consents
or approvals of any third parties whose consent is required to the transactions
contemplated hereunder.
10.10 FINANCIAL STATEMENTS.
Pandel shall have received audited and unaudited financial statements of
FiberChem for the respective periods set forth in Section 6.8 of the Arrangement
Agreement.
10.11 REGULATORY APPROVALS.
The parties shall have received all regulatory approvals required in
connection with the transactions contemplated by this Agreement, all notice
periods and waiting periods required after the granting of any such approvals
shall have passed, and all such approvals shall be in effect.
ARTICLE 11 - CONDITIONS PRECEDENT TO OBLIGATIONSOF FIBERCHEM,
PANDEL MERGERCO AND PANDEL
The obligations of FiberChem, Pandel Mergerco and Pandel shall be subject
to the fulfillment at or prior to the Closing Date of the following conditions:
11.1 DUE DILIGENCE.
Pandel and FiberChem shall each have been afforded the opportunity to
complete their due diligence and conduct a review of the business and prospects
of the other.
11.2 APPROVALS AND CONSENTS.
(i) The Merger, with or without amendment, will have been approved by the
shareholders of Pandel in accordance with the TBCA.
(ii) All consents, orders, regulations and approvals, including regulatory
and judicial approvals and orders required or necessary or desirable for the
completion of the transactions provided for in this Agreement and the Merger
will have been obtained or received from the persons, authorities or bodies
having jurisdiction in the circumstances.
(iii) FiberChem's Common shares shall be quoted on the NASD-OTC Bulletin
Board; and
(iv) None of the consents, orders, regulations or approvals contemplated in
this Agreement will contain terms or conditions or require undertakings or
security deemed unsatisfactory or unacceptable by any of the Companies.
11.3 NO INJUNCTIONS.
No action or proceeding shall have been instituted or threatened by any
public authority or private person prior to the Closing before any court or
administrative body to restrain, enjoin or otherwise prevent the consummation of
this transaction or to recover any damages or obtain other relief as a result of
this transaction.
11.4 CORPORATE PROCEEDINGS.
All corporate and other proceedings in connection with the transactions
contemplated by this Agreement, and all documents and instruments incident
thereto, shall be reasonably satisfactory in substance and form to the parties
hereto and their counsel, and the parties hereto and their counsel shall have
received all certificates, documents and instruments, or copies thereof,
certified if requested, as may be reasonably requested.
ARTICLE 12 - TERMINATION
This Agreement may be terminated at any time (except where noted) prior to
the Closing Date:
(i) By mutual written consent of Pandel and FiberChem properly authorized
by their respective Boards of Directors.
(ii) By either FiberChem or Pandel if the Arrangement Agreement is
terminated in accordance with its terms or by mutual consent of the parties
thereto.
(iii) At any time prior to the Closing Date, by either Pandel and the
Pandel Shareholders; or by FiberChem and Pandel Mergerco: (a) in the event of a
material breach by the other party or parties of any covenant or agreement
contained in this Agreement, (b) in the event of an inaccuracy of any
representation or warranty of the other party contained in this Agreement which
inaccuracy would have a material adverse effect on the condition (financial or
otherwise), business, assets, liabilities or earnings of the other party or
parties; and, in the case of (a), if such breach or inaccuracy has not been
cured by the earlier of the Closing Date or thirty days following written notice
thereof to the party
committing such breach or permitting such inaccuracy.
(iv) In the event this Agreement is terminated pursuant to this ARTICLE 12,
this Agreement shall become void and have no effect, except that (i) the
provisions hereof relating to confidentiality and expenses set forth in SECTION
7.3, 8.3 and ARTICLE 20, respectively, shall survive any such termination and
(ii) a termination pursuant to Section 12(iii) shall not relieve the party at
fault from liability for an uncured breach or inaccuracy giving rise to such
termination.
ARTICLE 13 - FIBERCHEM'S AND PANDEL MERGERCO'S OBLIGATIONS AT CLOSING
At the Closing, in addition to fulfilling the conditions to closing
appearing in this Agreement, FiberChem and Pandel Mergerco shall deliver to the
Shareholders the Initial Merger Consideration as more specifically described in
ARTICLE 2 hereof, together with all other documents and agreements required to
be delivered by them hereunder.
ARTICLE 14 - PANDEL'S OBLIGATIONS AT CLOSING
At the Closing, in addition to fulfilling the conditions to Closing
appearing herein, Pandel shall, to the extent permitted by applicable laws,
deliver to FiberChem all original minute books, stock books, stock transfer
ledger, canceled stock certificates, corporate seals and financial records and
statements of Intrex together with all other documents and agreements required
to be delivered by them hereunder.
ARTICLE 15 - SUBSEQUENT EVENTS TO CLOSING
Pandel hereby agrees to provide FiberChem and its accountants with full and
free access to the books and records of Pandel and to cooperate fully with all
such representatives of FiberChem so that audited financial statements of
Pandel, the surviving corporation or FiberChem may be prepared on a timely
basis.
ARTICLE 16 - PARTIES IN INTEREST
This Agreement shall be binding upon and shall inure to the benefit of the
parties and their successors and assigns and nothing herein expressed or implied
is intended or shall be construed to confer upon or to give any person or firm,
other than the parties hereto any rights or remedies under or by reason hereof.
ARTICLE 17 - ENTIRE AGREEMENT
This Agreement, including the Schedules and Exhibits hereto, contains the
entire agreement and understanding among the parties hereto and supersedes any
prior agreements and understandings, with respect to the subject matter hereof
and shall not be modified or affected by any offer, proposal, statement or
representation, oral or written, made by or for any party in connection with the
negotiation of the terms hereof. All references herein to this Agreement shall
specifically include, incorporate and refer to the Schedules and Exhibits
attached hereto which are hereby made a part hereof. There are no
representations, promises, warranties, covenants, undertakings or assurances
(express or implied) other than those expressly set forth or provided for herein
and in the other documents referred to herein. This Agreement may not be
modified or amended orally, but only by a writing signed by all the parties
hereto.
ARTICLE 18 - GOVERNING LAW
This Agreement and all rights and obligations hereunder shall be governed
by, and construed in accordance with, the laws of the State of Delaware,
applicable to agreements made and to be performed wholly within said
jurisdictions, without regard to the conflicts of laws principles of such
jurisdictions.
ARTICLE 19 - CURRENCY
All sums of money expressed in this Agreement are expressed in the lawful
money of the United States.
ARTICLE 20 - EXPENSES
Each party hereto shall pay their own expenses incident to the preparation
of this Agreement, the carrying out of the provisions of this Agreement and the
consummation of the transactions contemplated hereby.
ARTICLE 21 - ARBITRATION
All disputes between the parties shall be settled by binding arbitration or
by either party initiating an action in a court of competent jurisdiction.
Arbitration of any dispute may be initiated by one party by sending a written
demand for arbitration to the other party. This demand will specify the matter
in dispute and request the appointment of an arbitration panel. The arbitration
panel will consist of one arbitrator named by FiberChem, one arbitrator named by
the Principal Shareholder and a third arbitrator named by the two arbitrators so
chosen. The arbitration hearing will be conducted by the American Arbitration
Association or Center for Public Resources, in accordance with the rules and
procedures of the American Arbitration Association. The sites of the arbitration
will be Las Vegas, Nevada. The arbitrators shall not be empowered to award
punitive or exemplary damages to either party.
ARTICLE 22 - SEVERABILITY
If any part of this Agreement is held to be unenforceable or invalid under,
or in conflict with, the applicable law of any jurisdiction, the unenforceable,
invalid or conflicting part shall, to the extent permitted by applicable law, be
narrowed or replaced, to the extent possible, with a judicial construction in
such jurisdiction that effectuates to the maximum extent possible the intent of
the parties regarding this Agreement and such unenforceable, invalid or
conflicting part. To the extent permitted by applicable law, notwithstanding the
unenforceability, invalidity or conflict with applicable law of any part of this
Agreement, the remaining parts shall be valid, enforceable and binding on the
parties.
ARTICLE 23 - NOTICES
All notices, requests, consents and demands by the parties hereunder
shall be delivered by hand, or telecopier at the applicable telecopier
numbers designated below (with confirmation received) by recognized national
overnight courier or by deposit in the United States mail, postage prepaid,
by registered or certified mail, return receipt requested, addressed to the
party to be notified at the addresses set forth below:
(i) if to Pandel to:
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Chief Executive Officer
Pandel Instruments, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Esq.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No. ▇▇▇-▇▇▇-▇▇▇▇
(ii) if to FiberChem or Pandel Mergerco to:
▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ President & Chief Executive Officer
FiberChem, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to:
Snow ▇▇▇▇▇▇ ▇▇▇▇▇▇ P.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(iii) Notices given by mail shall be deemed effective on the earlier of the
date shown on the proof of receipt of such mail or, unless the recipient proves
that the notice was received later or not received, three (3) days after the
date of mailing thereof. Other notices shall be deemed given on the date of
receipt. Any party hereto may change the address specified herein by written
notice to the other parties hereto.
ARTICLE 24 - NON-WAIVERS
Neither any failure nor any delay on the part of any party to this
Agreement in exercising any right, power or privilege hereunder shall operate as
a waiver of any rights of such party, unless such waiver is made by a writing
executed by the party and delivered to the other parties hereto; nor shall a
single or partial exercise of any right preclude any other or further exercise
of any other right, power or privilege accorded to any party hereto.
ARTICLE 25 - ASSIGNMENT
This Agreement may not be assigned by any party without the prior consent
of the other parties
ARTICLE 26 - DISCLOSURE
From and after the date of this Agreement until the Closing or the
termination of this Agreement, neither Pandel or FiberChem will (i) solicit or
encourage inquiries or proposals with respect to, or furnish any information
relating to, or participate in any negotiations or discussions
concerning the sale of their respective Shares or the sale of all or a
substantial portion of the their respective assets with anyone other than the
other or Intrex; or (ii) discuss the contents of this Agreement with anyone
other than the other or Intrex and their respective officers, directors,
shareholders and advisors and (iii) unless otherwise required by law or the
requirements of any applicable stock exchange, make any public announcement
without prior approval of the language of such announcement by the other.
ARTICLE 27 - MISCELLANEOUS
27.1 FURTHER ASSURANCES.
Each of the parties hereto shall use its best efforts to take or cause to
be taken, and to cooperate with the other party hereto to the extent necessary
with respect to all actions, and to do, or cause to be done, consistent with
applicable law, all things necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Agreement and to comply with the
conditions set forth in Articles 9, 10 and 11 hereof. Without limiting the
generality of the foregoing, all parties shall cooperate with and provide
assistance to the other in connection with the preparation and filing of all
federal, state, local and foreign income tax returns which relate to Pandel and
relate to pre-Closing periods but which are not required to be filed until after
the Closing, and shall also cooperate with and provide assistance to the other
with respect to any audit of any tax returns filed prior to the Closing;
provided, however, that FiberChem and Pandel hereby covenant and agree that
Pandel will not file amended income tax returns for any period prior to December
31, 1999 without first notifying the Shareholders and FiberChem.
27.2 HEADINGS.
The headings contained herein are for reference purposes only and shall not
affect the meaning or interpretation of this Agreement.
27.3 COUNTERPARTS.
This Agreement may be executed and delivered in multiple counterpart
copies, each of which shall be an original and all of which shall constitute one
and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the date first above written.
FIBERCHEM, INC.
By:
--------------------------------
PANDEL MERGERCO, INC.
By:
--------------------------------
PANDEL INSTRUMENTS, INC.
By:
--------------------------------
▇.▇. ▇▇▇▇▇, ▇▇., President
-----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇