EXHIBIT B
AGREEMENT AND PLAN OF MERGER
Among
UNIFAB INTERNATIONAL, INC.,
LATUSA Acquisition, Inc.
and
LATOKA USA, INC., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
AND ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Dated as of July 24, 1998
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS 1
Section 1.1 DEFINITIONS 1
ARTICLE 2. THE CLOSING; THE MERGER; EFFECTS OF THE MERGER 6
Section 2.1 CLOSING 6
Section 2.2 THE MERGER 6
Section 2.3 EFFECTS OF THE MERGER; ARTICLES AND OPERATING AGREEMENT;
DIRECTORS AND OFFICERS 6
ARTICLE 3. MERGER CONSIDERATION; CONVERSION OF SHARES 7
Section 3.1 CONVERSION OF SHARES 7
Section 3.2 EXCHANGE OF STOCK CERTIFICATES; RECORD DATE 7
Section 3.3 NO FURTHER RIGHTS IN LATOKA COMMON STOCK 8
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THELATOKA SHAREHOLDERS 8
Section 4.1 OWNERSHIP AND TRANSFER OF SHARES 8
Section 4.2 INVESTMENT REPRESENTATIONS 9
Section 4.3 REPRESENTATION; UNIFAB DISCLOSURE DOCUMENTS 9
Section 4.4 RESTRICTIVE LEGEND 9
Section 4.5 UNIFAB RELIANCE 10
Section 4.6 ORGANIZATION 10
Section 4.7 AFFILIATED ENTITIES 10
Section 4.8 CAPITALIZATION 10
Section 4.9 AUTHORITY; ENFORCEABLE AGREEMENTS 11
Section 4.10 NO CONFLICTS OR CONSENTS 11
Section 4.11 CORPORATE FORMALITIES; CORPORATE DOCUMENTS, SHAREHOLDER
AGREEMENTS AND BOARD OF DIRECTORS 12
Section 4.12 FINANCIAL STATEMENTS; LIABILITIES 13
Section 4.13 ABSENCE OF CERTAIN CHANGES OR EVENTS 14
Section 4.14 CONTRACTS 15
Section 4.15 PROPERTIES AND LEASES 16
Section 4.16 VOTING REQUIREMENTS 17
Section 4.17 SUPPLIERS AND CUSTOMERS 17
Section 4.18 EMPLOYEE MATTERS 18
Section 4.19 EMPLOYEE BENEFIT PLANS 20
Section 4.20 LATOKA TAX MATTERS 20
Section 4.20A LEL TAX MATTERS 22
Section 4.21 LITIGATION 23
Section 4.22 LATOKA ENVIRONMENTAL COMPLIANCE 23
Section 4.22A LEL ENVIRONMENTAL MATTERS 25
Section 4.23 COMPLIANCE WITH LAW; PERMITS 26
Section 4.24 SAFETY AND HEALTH. 26
Section 4.25 TRANSACTIONS WITH RELATED PARTIES 26
Section 4.26 BROKER'S AND FINDER'S FEE 27
Section 4.27 MATERIALITY 27
Section 4.28 DISCLOSURE 27
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF UNIFAB AND SUB 27
Section 5.1 ORGANIZATION 27
Section 5.2 CAPITALIZATION 28
Section 5.3 AUTHORITY; ENFORCEABLE AGREEMENTS 28
Section 5.4 NO CONFLICTS OR CONSENTS 28
Section 5.5 SEC DOCUMENTS; FINANCIAL STATEMENTS; LIABILITIES 29
Section 5.6 LEGALITY OF UNIFAB COMMON STOCK 30
Section 5.7 TAX MATTERS 30
Section 5.8 LITIGATION 32
Section 5.9 COMPLIANCE WITH LAW; PERMITS 32
Section 5.10 BROKER'S AND FINDER'S FEE 32
Section 5.11 DISCLOSURE 32
ARTICLE 5A. REPRESENTATIONS AND WARRANTIES OF THELATOKA SHAREHOLDERS AND
UNIFAB 33
ARTICLE 6. PRE-CLOSING COVENANTS 33
Section 6.1 CONDUCT OF BUSINESS PRIOR TO THE CLOSING DATE 33
Section 6.2 NO SOLICITATIONS 33
Section 6.3 PRESS RELEASES 34
Section 6.4 ACCESS TO INFORMATION AND CONFIDENTIALITY 34
Section 6.5 CONSULTATION AND REPORTING 34
Section 6.6 NOTIFICATION OF CHANGES 34
Section 6.7 SUB SHAREHOLDER APPROVAL 35
ARTICLE 7. POST-CLOSING COVENANTS 35
Section 7.1 RESTRICTIONS ON RESALE 35
Section 7.2 TAX-FREE REORGANIZATION 35
Section 7.3 RELEASE AND INDEMNIFICATION OF ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 35
ARTICLE 8. CLOSING CONDITIONS 36
Section 8.1 CONDITIONS APPLICABLE TO ALL PARTIES 36
Section 8.2 CONDITIONS TO UNIFAB'S OBLIGATIONS 36
Section 8.3 CONDITIONS TO THE OBLIGATIONS OF LATOKA AND THE LATOKA
SHAREHOLDERS 37
Section 8.4 WAIVER OF CONDITIONS 38
ARTICLE 9. TERMINATION 38
Section 9.1 TERMINATION 38
Section 9.2 EFFECT OF TERMINATION 39
ARTICLE 10. MISCELLANEOUS 39
Section 10.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES 39
Section 10.2 NOTICES 39
Section 10.3 GOVERNING LAW 40
Section 10.4 COUNTERPARTS 40
Section 10.5 INTERPRETATION; SCHEDULES 40
Section 10.6 ENTIRE AGREEMENT; SEVERABILITY 41
Section 10.7 AMENDMENT AND MODIFICATION 41
Section 10.8 EXTENSION; WAIVER 41
Section 10.9 BINDING EFFECT; BENEFITS 41
Section 10.10 ASSIGNABILITY 41
Section 10.11 EXPENSES 41
Section 10.12 GENDER AND CERTAIN DEFINITIONS 41
LIST OF SCHEDULES
LIST OF EXHIBITS
Exhibit 2.1(b) Certificate of Merger
Exhibit 8.2(g) Form of opinion of Simon, Peragine, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP
Exhibit 8.2(h) Form of Noncompetition Agreement
Exhibit 8.3(d) Form of Registration Rights Agreement
Exhibit 8.3(e) Form of opinion of Jones, Walker, Waechter, Poitevent,
Carrere & ▇▇▇▇▇▇▇, L.L.P.
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (the "Agreement") dated as of July
24, 1998 is by and among UNIFAB International, Inc., a Louisiana corporation
("UNIFAB"), LATUSA Acquisition Corp., a wholly owned subsidiary of UNIFAB
and a Louisiana corporation ("Sub"), LATOKA USA, Inc., a Louisiana
corporation ("LATOKA") and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. (each a
"LATOKA Shareholder" and together, the "LATOKA Shareholders").
W I T N E S S E T H :
WHEREAS, the respective Boards of Directors of UNIFAB, Sub and ▇▇▇▇▇▇
▇▇▇▇ it desirable to merge LATOKA with and into Sub (the "Merger") with the
result that the corporate existence of LATOKA shall cease and Sub shall be
the Surviving Corporation;
NOW, THEREFORE, in consideration of the representations, warranties and
covenants contained herein, the parties agree as follows:
ARTICLE 1. DEFINITIONS
Section 1.1 DEFINITIONS. As used in this Agreement, the following
terms when capitalized have the meanings indicated.
"Act" has the meaning assigned to it in Section 4.12(b).
"Affiliate" has the meaning given in Rule 12b-2 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
"Agreement" means this Agreement and Plan of Merger, including the
Schedules and Exhibits hereto, all as amended or otherwise modified from
time to time.
"Applicable Law" has the meaning assigned to it in Section 4.10(a).
"Benefit Arrangement" means any employment, severance or similar
contract, or any other contract, plan, policy or arrangement (whether or not
written) providing for compensation, bonus, profit-sharing, stock option or
other stock related rights or other forms of incentive or deferred
compensation, vacation benefits, insurance coverage (including any self-
insured arrangement), health or medical benefits, disability benefits,
severance benefits and post-employment or retirement benefits (including
compensation, pension, health, medical or life insurance benefits) that
(a) is maintained, administered or contributed to by the employer or
(b) covers any employee or former employee of the employer.
"Business Day" means a day other than a Saturday, a Sunday or a day on
which national banks or the NASDAQ Stock Market is closed.
"Certificate of Merger" has the meaning assigned to it in Section
2.1(b).
"Closing" and "Closing Date" have the meanings assigned to them in
Section 2.1(a).
"Code" means the Internal Revenue Code of 1986, as amended.
"Effective Date" has the meaning assigned to it in Section 2.1(b)
hereof.
"Effective Time" has the meaning assigned to it in Section 2.1(b)
hereof.
"Employee Plan" means a plan or arrangement as defined in Section 3(3)
of ERISA, that (a) is subject to any provision of ERISA, (b) is maintained,
administered or contributed to by the employer and (c) covers any employee
or former employee of the employer.
"Environmental Claim" refers to any complaint, summons, citation,
notice, directive, order, claim, litigation, investigation, judicial or
administrative proceeding, judgment, letter or written communication from
any governmental agency, department, bureau, office or other authority, or
any third party arising out of, attributable to, which may accrue out of, or
which may result from (a) a violation or alleged violation of Environmental
Laws; or (b) the presence, Release, or threatened Release of Hazardous
Materials at or from (i) any current or formerly owned or leased assets,
properties, or businesses of any of the parties to this Agreement, or their
predecessors-in-interest; (ii) properties adjoining any current or formerly
owned or leased assets, properties, or businesses of the parties to this
Agreement, or their predecessors-in-interest; or (iii) any facility to which
any Hazardous Materials generated by the parties to this Agreement or their
predecessors-in-interest, have been taken for treatment, storage, or
disposal.
"Environmental Laws" has the meaning assigned to it in Section 4.22(a).
"Environmental Liabilities" means any monetary obligations, losses,
liabilities (including strict liability), damages, punitive damages,
consequential damages, treble damages, costs and expenses (including all
reasonable out-of-pocket fees, disbursements and expenses of counsel, out-
of-pocket expert and consulting fees and out-of-pocket costs for
environmental site assessments, remedial investigations and feasibility
studies), fines, penalties, sanctions and interest incurred as a result of
any Environmental Claim arising out of, attributable to, which may accrue
out of, or which may result from (a) a violation or the alleged violation of
Environmental Laws; (b) a Remedial Action; or (c) a Release or threatened
Release from or onto (i) any property owned or leased by the respective
parties to this Agreement, or their predecessors-in-interest; or (ii) any
facility which received Hazardous Materials generated by the respective
parties to this Agreement, or their predecessors-in-interest.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"Governmental Entity" has the meaning assigned to it in Section
4.10(b).
"Hazardous Materials" means (a) any element, compound, or chemical that
is defined, listed or otherwise classified as a contaminant, pollutant,
toxic pollutant, toxic or hazardous substance, extremely hazardous substance
or chemical, hazardous waste, medical waste, biohazardous or infectious
waste, special waste, or solid waste under Environmental Laws; (b)
petroleum, petroleum-based or petroleum-derived products; (c)
polychlorinated biphenyls; (d) any substance exhibiting a hazardous waste
characteristic including but not limited to corrosivity, ignitability,
toxicity or reactivity as well as any radioactive or explosive materials;
and (e) any raw materials, building components, including lead-based paint,
asbestos-containing materials and manufactured products containing Hazardous
Materials.
"Intellectual Property" has the meaning assigned to it in Section
4.15(e).
"LATOKA Financial Statements" means the unaudited balance sheets and
related statements of income, retained earnings and cash flow, and the
related notes thereto of LATOKA for the periods ended 1996 and 1997 and the
LATOKA Interim Financial Statements, collectively.
"LATOKA Common Stock" means the shares of LATOKA common stock, no par
value per share.
"LATOKA Interim Financial Statements" means the unaudited balance
sheet, and the related unaudited statements of income, retained earnings and
cash flows of LATOKA for the five-month period ended May 31, 1998.
"LATOKA Latest Balance Sheet" means the latest balance sheet of LATOKA
included in the LATOKA Interim Financial Statements.
"LATOKA Shareholder" and "LATOKA Shareholders" have the meanings
assigned to them in Section 3.1(b).
"LBCL" means the Louisiana Business Corporation Law, as amended.
"LEL" has the meaning assigned to it in Section 4.7.
"LEL Audited Financial Statements" means the audited balance sheets of
LEL and the LEL Subsidiaries as at December 31, 1996 and December 31, 1997
and audited profit and loss accounts made as of such dates together with the
auditors' reports, directors reports and notes thereon.
"LEL Financial Statements" means the LEL Audited Financial Statements
and the LEL Interim Financial Statements, collectively.
"LEL Interim Financial Statements" means the unaudited balance sheet,
and profit and loss accounts of LEL for the five-month period ended May 31,
1998.
"LEL Latest Balance Sheet" means the latest balance sheet of LEL
included in the LEL Interim Financial Statements.
"LEL Subsidiaries" has the meaning assigned to it in Section 4.7.
"LEL Taxation" means all forms of taxation, charges, duties, imposts,
rates, levies and governmental charges (whether national or local) in the
nature of tax, whatsoever and whenever created, enacted or imposed and
whether of the United Kingdom or elsewhere, including, for the avoidance of
doubt and without limitation, income tax, corporation tax, advance
corporation tax, capital gains tax, rates, value added tax, customs duty,
capital transfer tax, inheritance tax, excise duties, capital duty, stamp
duty, stamp duty reserve tax, national insurance, social security or other
similar contributions and generally any tax, duty, charge, impost, rate,
levy or other amount payable to the Inland Revenue, H.M. Customs & Excise or
any statutory or governmental body or authority (whether of the United
Kingdom or elsewhere) involved in the imposition, assessment, collection or
administration of taxation or any other person as the result of any
enactment relating to taxation, together with all fines, penalties,
interest, costs, charges, surcharges and expenses in connection with the
same.
"Material Adverse Effect" means a material adverse effect on the
business, financial position, or earnings of such Person or on its ability
to carry out the transactions contemplated hereby.
"Merger" has the meaning assigned to it in the recitals hereto.
"Merger Consideration" has the meaning assigned to it in Section
3.1(b).
"Multiemployer Plan" means a plan or arrangement as defined in Section
4001(a)(3) and 3(37) of ERISA.
"Noncompetition Agreement" means a noncompetition agreement between
LATOKA and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, substantially in the form of the draft attached
hereto as EXHIBIT 8.2(H).
"Person" means an individual, firm, corporation, general or limited
partnership, limited liability company, limited liability partnership, joint
venture, trust, governmental authority or body, association, unincorporated
organization or other entity.
"Pre-Closing Period" means any Tax period ending at or before the
Effective Time and, with respect to any Tax period that includes but does
not end at the Effective Time, the portion of such period that ends at and
includes the Effective Time.
"Release" means any release, spill, leak, emission, discharge, pump,
empty, injection, escape, leaching, migration, dumping or disposal of
Hazardous Materials (including the abandonment or discarding of barrels,
containers or other closed receptacles containing Hazardous Materials) into
the environment, or any other means by which a Hazardous Material may be
introduced into the environment.
"Remedial Action" means all actions taken to (i) clean up, remove,
remediate, contain, treat, monitor, assess, evaluate or in any other way
address Hazardous Materials in the indoor or outdoor environment, (ii)
prevent or minimize a Release or threatened Release of Hazardous Materials
so they do not migrate or endanger or threaten to endanger public health or
welfare or the indoor or outdoor environment, (iii) perform post-remedial
operation and maintenance activities, or (iv) any other actions including
any removal, remedial, or other response actions defined in 42 U.S.C.
Section 9601.
"Returns" means all returns, computations, accounts, reports,
estimates, declarations and statements of any nature regarding Taxes for any
Pre-Closing Period required to be filed by the taxpayer relating to its
income, properties or operations.
"SEC" means the Securities and Exchange Commission of the United
States.
"Securities Act" means the Securities Act of 1933, as amended.
A "Subsidiary" of any person means another person, an amount of the
voting securities, other voting ownership or voting partnership interests
that is sufficient to elect at least a majority of its Board of Directors or
other governing body of which (or, if there are no such voting interests,
25% or more of the equity interests of which) is owned directly or
indirectly by such first person.
"Surviving Corporation" means Sub following the Effective Time.
"Tax" or "Taxes" means any federal, state, local, United Kingdom,
foreign or other taxes (including, without limitation, income, alternative
minimum, franchise, property, sales, use, lease, excise, value added,
corporation, advance corporation, capital transfer, stamp duty, customs
duty, premium, payroll, wage, employment or withholding taxes), fees,
duties, assessments, withholdings or governmental charges of any kind
whatsoever (including interest, penalties and additions to tax).
"Tax Deficiencies" is defined in Section 4.20(h).
"Title IV Plan" means an Employee Plan, other than any Multiemployer
Plan, subject to Title IV of ERISA.
"UNIFAB Affiliated Group" means UNIFAB and its Subsidiaries.
"UNIFAB Audited Financial Statements" means the audited balance sheets,
and the related statements of operations, shareholder's equity and cash
flow, and the related notes thereto of UNIFAB for the fiscal years ended
March 31, 1996, 1997 and 1998.
"UNIFAB Common Stock" means shares of UNIFAB Common Stock, $.01 par
value.
"UNIFAB Disclosure Documents" has the meaning assigned to it in Section
4.3.
"UNIFAB Financial Statements" means the UNIFAB Audited Financial
Statements and the UNIFAB Interim Financial Statements.
"UNIFAB Latest Balance Sheet" means the latest balance sheet included
in the UNIFAB Audited Financial Statements.
"UNIFAB Share Issuance" means the issuance of UNIFAB Common Stock to
the LATOKA shareholders upon consummation of the Merger.
ARTICLE 2. THE CLOSING; THE MERGER; EFFECTS OF THE MERGER
Section 2.1 CLOSING. (a) The closing of the transactions contemplated
herein (the "Closing") will take place, assuming satisfaction or waiver of
each of the conditions set forth in Article 8 hereof, at the offices of
Jones, Walker, Waechter, Poitevent, Carrre & ▇▇▇▇▇▇, L.L.P., ▇▇▇ ▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, at 10:00 A.M. (Central Time) on July
24, 1998 or such other date as may be mutually agreed upon between the
parties following satisfaction of the latest to occur of the conditions set
forth in Section 8.1, provided, in either case, that the other conditions
set forth in Article 8 shall have been satisfied or waived as provided in
Article 8 at or prior to the Closing (the date of the Closing being referred
to herein as the "Closing Date").
(b) At the Closing, the parties shall (i) deliver the documents,
certificates and opinions required to be delivered by Article 8 hereof, (ii)
provide proof or indication of the satisfaction or waiver of each of the
conditions set forth in Article 8 hereof, (iii) cause the appropriate
officer of Sub to execute and deliver the certificate of merger in
accordance with the provisions of the LBCL and substantially in the form
attached as EXHIBIT 2.1(B) hereto (the "Certificate of Merger"), and (iv)
consummate the Merger by causing to be filed such properly executed
Certificate of Merger with the Secretary of State of the State of Louisiana
in accordance with the provisions of the LBCL. The Merger shall be
effective as of the date and time specified in the Certificate of Merger
(such date and time being hereinafter referred to respectively as the
"Effective Date" and the "Effective Time").
Section 2.2 THE MERGER. Subject to the terms and conditions of this
Agreement, Sub shall be merged with and into LATOKA at the Effective Time.
Following the Merger, the separate corporate existence of Sub shall cease
and LATOKA shall be the Surviving Corporation and shall succeed to and
assume all the rights and obligations of Sub in accordance with the LBCL.
Section 2.3 EFFECTS OF THE MERGER; ARTICLES AND OPERATING AGREEMENT;
DIRECTORS AND OFFICERS. (a) The Merger shall have the effects specified in
Sections 115 and 117(G) of the LBCL.
(b) The articles of LATOKA, as in effect at the Effective Time,
shall be amended to provide as determined by UNIFAB and as set forth in or
as an attachment to the Certificate of Merger and, as so amended shall be
the articles of incorporation of the Surviving Corporation thereafter unless
and until amended in accordance with their terms and as provided by law.
(c) The bylaws of LATOKA as in effect at the Effective Time shall
be the bylaws of the Surviving Corporation thereafter unless and until
amended in accordance with its terms, the terms of the articles of
incorporation of the Surviving Corporation and as provided by law.
(d) The directors and officers of Sub at the Effective Time shall
be the directors and officers of the Surviving Corporation thereafter, each
to hold office in accordance with the articles of incorporation and bylaws
of the Surviving Corporation until their respective successors are duly
elected and qualified.
ARTICLE 3. MERGER CONSIDERATION; CONVERSION OF SHARES
Section 3.1 CONVERSION OF SHARES. (a) At the Effective Time, by
virtue of the Merger and without any further action on the part of UNIFAB,
Sub, LATOKA or the Surviving Corporation, or any holder of any of the
following securities:
(i) each share of common stock of Sub issued and outstanding
at the Effective Time shall be converted into one share
of the common stock of the Surviving Corporation;
(ii) each share of LATOKA Common Stock issued and outstanding
at the Effective Time shall be converted into the right
to receive 100 fully paid and nonassessable shares of
UNIFAB Common Stock in the manner described in Section
3.1(b) below; provided further that there shall be no
more than 790 shares of LATOKA Common Stock issued and
outstanding immediately prior to the Effective Time; and
(iii)each issued share of LATOKA that is held in treasury by
LATOKA or held by any subsidiary of LATOKA shall be
canceled and no stock of UNIFAB or other consideration
shall be delivered in exchange therefor.
(b) Upon conversion of the shares of LATOKA Common Stock into
rights to receive shares of UNIFAB Common Stock in the manner described in
paragraph 3.1(a)(ii) above, each LATOKA Shareholder shall have the right to
receive a certificate representing such whole number of shares of UNIFAB
Common Stock equal to the product of (i) 100 and (ii) the number of issued
and outstanding shares of LATOKA Common Stock of which he is the record
holder immediately prior to the Effective Time (the product of (i) and (ii)
being the "Merger Consideration").
Section 3.2 EXCHANGE OF STOCK CERTIFICATES; RECORD DATE. (a) On the
Closing Date, each LATOKA Shareholder whose shares were converted into the
Merger Consideration pursuant to Section 3.1 hereof shall surrender such
certificates for cancellation to UNIFAB, together with a duly executed
letter of transmittal in form and substance satisfactory to UNIFAB. In
exchange therefor, UNIFAB shall issue to such LATOKA Shareholder a
certificate representing the whole number of Closing Shares that such LATOKA
Shareholder has the right to receive pursuant to the provisions of Section
3.1(b). The certificates representing shares of LATOKA Common Stock so
surrendered shall forthwith be canceled.
(b) At the Closing LATOKA shall deliver to UNIFAB a stock
certificate (issued in the name of UNIFAB and dated as of the Effective
Date) representing 1,000 shares of LATOKA Common Stock (the "New LATOKA
Certificate"), which UNIFAB shall be entitled to exchange for its shares of
Sub that will be converted into shares of the Surviving Corporation at the
Effective Time in the manner described in Section 3.1(a)(i). At the
Closing, UNIFAB shall substitute the New LATOKA Certificate for its
certificate representing all of the issued and outstanding shares of Sub,
which certificate for shares of Sub shall be marked "canceled" and entered
in the stock records of Sub.
Section 3.3 NO FURTHER RIGHTS IN LATOKA COMMON STOCK. As of the
Effective Time, all shares of LATOKA Common Stock shall no longer be
outstanding and shall automatically be canceled and retired and shall cease
to exist, and each holder of a certificate representing shares of LATOKA
Common Stock as of the Effective Time shall cease to have any rights with
respect thereto, except the right to receive the Merger Consideration upon
surrender of such certificate as provided in Section 3.2.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THE
LATOKA SHAREHOLDERS
Each LATOKA Shareholder represents and warrants to and agrees with
UNIFAB and Sub, as of the date hereof, as follows:
Section 4.1 OWNERSHIP AND TRANSFER OF SHARES. (a) He is the lawful
owner of the number of shares of LATOKA Common Stock listed opposite his
name in SCHEDULE 4.8 hereto, free and clear of all Liens, encumbrances,
restrictions and claims of every kind; (b) he has the absolute legal right,
power and authority to enter into this Agreement and to sell, assign,
transfer, convey and deliver the shares of LATOKA Common Stock so owned
pursuant to this Agreement; (c) he is not a party to any option, warrant,
purchase right or other contract or commitment that could require him to
sell, transfer, or otherwise dispose of any capital stock of LATOKA (other
than this Agreement); (d) he is not a party to any voting trust, proxy or
other agreement or understanding with respect to the voting of any capital
stock of LATOKA; and (e) at the Effective Time, UNIFAB shall obtain and be
fully vested in record and beneficial ownership of all shares of capital
stock of the Surviving Corporation, after giving effect to the Merger, free
and clear of any restrictions on transfer (other than restrictions under the
Securities Act and state securities laws), Taxes, security interests,
options, warrants, purchase rights, contracts, commitments, equities, claims
and demands.
Section 4.2 INVESTMENT REPRESENTATIONS. (a) He is acquiring shares of
UNIFAB Common Stock pursuant hereto for investment for his own account and
has no present intention of reselling or otherwise distributing or
participating in a distribution of such shares; (b) he understands that such
shares will not be registered under the Securities Act, that such shares
will be "restricted securities" as that term is used in Rule 144 of the SEC
under the Securities Act ("Rule 144") and that such shares may not be
transferred unless they are subsequently registered under the Securities Act
and under any applicable state securities law or are transferred in a
transfer that is exempt from such registration; (c) except as otherwise
contemplated by Section 8.3(e), UNIFAB is not obligated by this Agreement to
register such shares under the Securities Act or under any such state laws
and UNIFAB will require, as a condition to the transfer of any such shares,
that the request for transfer be accompanied by an opinion of counsel, in
form and substance satisfactory to UNIFAB, to the effect that the proposed
transfer does not result in a violation of the Securities Act or any
applicable state securities law, unless such transfer is covered by an
effective registration statement; and (d) such shares of UNIFAB Common Stock
may not be sold publicly in reliance on the exemption from registration
under the Securities Act afforded by Rule 144 unless and until the minimum
holding period (currently one year) and other requirements of Rule 144 have
been satisfied.
Section 4.3 REPRESENTATION; UNIFAB DISCLOSURE DOCUMENTS. Each LATOKA
Shareholder, together with the other LATOKA Shareholder, has been
represented by competent and experienced legal counsel in connection with
the negotiation and execution of this agreement, has been granted the
opportunity to make a thorough investigation of and to obtain information
with respect to the business and affairs of UNIFAB, and has availed himself
of such opportunity either directly or through legal counsel and other
authorized representatives. Each LATOKA Shareholder acknowledges that he
has received from UNIFAB and has reviewed with his representatives a copy of
each of the following documents (the "UNIFAB Disclosure Documents"):
UNIFAB's prospectus dated September 18, 1997 relating to 2,815,000 shares of
UNIFAB International, Inc. Common Stock; UNIFAB's reports to the Securities
and Exchange Commission on Form 10-Q for the quarters ended September 30,
1997 and December 31, 1997; UNIFAB's report on Form 8-K/A-1 dated February
5, 1998 relating to UNIFAB's acquisition of Professional Industrial
Maintenance, LLC; and UNIFAB's press release dated May 18, 1998 relating to
UNIFAB's earnings for the year and fourth quarter ended March 31, 1998, and
UNIFAB's Form 10-K for the fiscal year ended march 31, 1998. Each
Shareholder acknowledges that (a) he has received and reviewed, with
adequate time to do so, this Agreement, the UNIFAB Disclosure Documents, and
such additional information with respect to UNIFAB and the transactions
contemplated by this Agreement as he or his representatives have requested.
Section 4.4 RESTRICTIVE LEGEND. Each LATOKA Shareholder understands
and agrees that all certificates evidencing shares of UNIFAB Common Stock to
be issued to him hereunder will bear restrictive legends in substantially
the following form:
The Securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"), or any applicable state law, and may not be transferred
without registration under the Act and any such state law or an
opinion of counsel satisfactory to the issuer of such securities
that registration is not required.
Section 4.5 UNIFAB RELIANCE. Each LATOKA Shareholder understands that
UNIFAB in issuing the shares of UNIFAB Common Stock pursuant to this
Agreement is relying upon, among other things, the representations,
warranties and agreements contained in this Article in concluding that such
issuance does not require compliance with the registration requirements of
the Securities Act.
Section 4.6 ORGANIZATION. LATOKA is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Louisiana and has all corporate power and authority to carry on its business
as now being conducted and to own its properties. LATOKA is duly qualified
to do business and is in good standing in each state and foreign
jurisdiction in which the character or location of the properties owned or
leased by it or the nature of the business conducted by it makes such
qualification necessary, except those jurisdictions, if any, in which the
failure to be so qualified would not have, in the aggregate for all such
jurisdictions, a Material Adverse Effect.
Section 4.7 AFFILIATED ENTITIES. LATOKA Engineering, Ltd. is a
corporation organized under the laws of England and Wales and a wholly owned
subsidiary of LATOKA ("LEL"). Each of ▇▇▇▇▇ Tank, Ltd., Latoka, Ltd. and
▇▇▇▇▇ Process Systems, Ltd. is an English corporation and a wholly owned
subsidiary of LEL (the "LEL Subsidiaries"). Except for LEL and the LEL
Subsidiaries, LATOKA does not, directly or indirectly, own of record or
beneficially, or have the right or obligation to acquire, any outstanding
securities or other interest in any corporation, partnership, joint venture
or other entity.
Section 4.8 CAPITALIZATION. (a) The authorized capital stock of LATOKA
consists exclusively of 1,000 shares of common stock, no par value per
share, of which 790 shares are issued and outstanding and held by the LATOKA
Shareholders in the respective amounts set forth on SCHEDULE 4.8, and 210
shares are held in its treasury. All of such issued and outstanding shares
have been validly issued, are fully paid and nonassessable and were issued
in compliance with any rights of first refusal, in compliance with all legal
requirements and, except as set forth in Schedule 4.8, free of preemptive
rights. No share of capital stock of LATOKA has been, or may be required to
be, reacquired by LATOKA for any reason or is, or may be required to be,
issued by LATOKA for any reason, including, without limitation, by reason of
any option, warrant, security or right convertible into or exchangeable for
such shares, or any agreement to issue any of the foregoing. No shares of
LATOKA Common Stock have been issued to or held by any person who is not a
LATOKA Shareholder.
(b) The authorized share capital of LEL consists exclusively of
500,000, divided into 500,000 shares of 1
each, of which 500,000 shares are issued and held by LATOKA. All of such
shares have been validly issued, are fully paid or credited as fully paid
and nonassessable and were issued free of preemptive rights, in compliance
with any rights of first refusal, and in compliance with all legal
requirements. No share of LEL has been, or may be required to be,
reacquired by LEL for any reason or is, or may be required to be, issued by
LEL for any reason, including, without limitation, by reason of any option,
warrant, security or right convertible into or exchangeable for such shares,
or any agreement to issue any of the foregoing. No shares of LEL are issued
to or held by any person other than LATOKA.
Section 4.9 AUTHORITY; ENFORCEABLE AGREEMENTS. (a) LATOKA has the
requisite corporate power and authority to enter into this Agreement and to
consummate the transactions described herein. The execution and delivery of
this Agreement by LATOKA and the consummation by LATOKA of the transactions
described herein have been duly authorized by all necessary corporate action
on the part of LATOKA, including without limitation approval of this
Agreement by LATOKA's Board of Directors in accordance with Section 112 of
the LBCL, the approval thereof by the LATOKA Shareholders being evidenced by
their execution of this Agreement.
(b) This Agreement has been duly executed and delivered by LATOKA
and the LATOKA Shareholders, and constitutes a valid and binding obligation
of LATOKA and the LATOKA Shareholders, enforceable in accordance with its
terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally or by general equitable principles. The other agreements entered,
or to be entered, into by LATOKA in connection with this Agreement have
been, or will be, duly executed and delivered by LATOKA, and constitute, or
will constitute, valid and binding obligations of LATOKA, enforceable in
accordance with their terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally or by general equitable principles.
Section 4.10 NO CONFLICTS OR CONSENTS. (a) Except as set forth on
SCHEDULE 4.10 neither the execution, delivery or performance of this
Agreement by LATOKA nor the consummation of the transactions contemplated
hereby will violate, conflict with, or result in a breach of any provision
of, constitute a default (or an event that, with notice or lapse of time or
both, would constitute a default) under, result in the termination of, or
accelerate the performance required by, or result in the creation of any
adverse claim against any of the properties or assets of LATOKA, LEL or any
of the LEL Subsidiaries under, (i) the articles of incorporation, bylaws,
memorandum of association, articles of association or any other
organizational documents of LATOKA, LEL or any of the LEL Subsidiaries, (ii)
any note, bond, mortgage, indenture, deed of trust, lease, license,
agreement or other instrument or obligation to which LATOKA, LEL or any of
the LEL Subsidiaries is a party, or by which either LATOKA , LEL or any of
the LEL Subsidiaries or any of their respective assets are bound, or (iii)
violate any order, writ, injunction, decree, judgment, statute, rule or
regulation of any governmental body to which LATOKA, LEL or any of the LEL
Subsidiaries is subject or by which LATOKA, LEL or any of the LEL
Subsidiaries or any of their respective assets are bound (an "Applicable
Law"), which would, individually or in the aggregate, have a Material
Adverse Effect.
(b) No consent or approval of, any court, commission,
governmental body, regulatory agency, authority, political subdivision or
tribunal (a "Governmental Entity") is required by or with respect to LATOKA,
LEL, or any LATOKA Shareholder in connection with the execution and delivery
of this Agreement by LATOKA, or is necessary for the consummation of the
Merger and the other transactions contemplated by this Agreement, except
for: (i) the filing and recordation requirements of the LBCL with respect to
the Certificate of Merger and the filing of appropriate documents with the
relevant authorities of other states in which LATOKA is qualified to do
business, and (ii) such other consents, orders, authorizations,
registrations, declarations and filings the failure of which to obtain or
make would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on LATOKA, LEL or any of the LEL Subsidiaries
and would not materially impair the ability of LATOKA or the LATOKA
Shareholders to perform their obligations hereunder or prevent the
consummation of any of the transactions contemplated hereby.
(c) Neither LEL nor any LEL Subsidiary is a party to any agency,
distributorship, franchising marketing, purchasing, manufacturing or
licensing agreement or arrangement or any restrictive trading or other
agreement pursuant to which any part of its business is carried on or which
restricts its freedom to carry on the whole or any part of its business in
any part of the world in such manner as it thinks fit or which in any way
infringes or which has or should have been registered or notified under the
Restrictive Trade Practices Acts 1976 and 1977, the Monopolies and Mergers
Acts, the Fair Trading ▇▇▇ ▇▇▇▇, the Competition ▇▇▇ ▇▇▇▇ or the Consumer
Credit ▇▇▇ ▇▇▇▇ in the United Kingdom, or which contravenes Articles 85 or
86 of the Treaty of Rome or any other anti-trust, anti-monopoly or anti-
cartel legislation or which has been notified to the Commission of the
European Communities for exemption or in respect of which an application has
been made to the said Commission for negative clearance.
(d) Except as disclosed in Schedule 4.10(d), neither LEL nor any
LEL Subsidiary is a party to any agreement or arrangement in the nature of a
joint venture or consortium or for profit sharing or whereby LEL takes part
in the management of any other company or business.
Section 4.11 CORPORATE FORMALITIES; CORPORATE DOCUMENTS, SHAREHOLDER
AGREEMENTS AND BOARD OF DIRECTORS. (a) Each of LATOKA and LEL has maintained
its separate corporate existence, has substantially complied with all
necessary corporate formalities, has not commingled funds with any other
Person, and has substantially complied with all other similar requirements
so as to maintain its separate existence in any action asserting that LATOKA
or LEL is the alter ego of any Person, for piercing of the corporate veil or
for any other similar action.
(b) LATOKA has delivered to UNIFAB true and complete copies of
its articles of incorporation and bylaws, as well as the organizational
documents of LEL, as amended or restated through the date of this Agreement.
The minute books of LATOKA contain substantially complete and accurate
records of all corporate actions of LATOKA's equity owners and board of
directors, including committees of such boards. The stock transfer records
of LATOKA contain complete and accurate records of all issuances, and
redemptions of stock by LATOKA. There are no agreements among or between
any shareholders with respect to the capital stock of LATOKA.
(c) The copies of the Memorandum and Articles of Association of
LEL and each of the LEL Subsidiaries attached hereto as EXHIBIT 4.11(C) are
accurate and complete in all respects .
(d) The register of members and other statutory books of LEL have
been properly kept and contain a true, accurate and complete record of the
matters which should be dealt with therein and no notice or allegation that
any of the same is incorrect or should be rectified has been received.
(e) All Returns, resolutions and documents required to be filed
with or delivered to the Registrar of Companies pursuant to the Act have
been properly and correctly made up and duly filed or delivered by or on
behalf of LEL.
Section 4.12 FINANCIAL STATEMENTS; LIABILITIES. (b)(i) The LATOKA
Financial Statements have been prepared in accordance with generally
accepted accounting principles consistently applied during the periods
involved, except as may be noted therein and present fairly the financial
position of LATOKA at such dates and the results of operations and cash flow
of LATOKA for the periods set forth therein (except, in the case of the
LATOKA Interim Financial Statements, to normal year-end audit adjustments
which would not be material in amount or effect). Except as and to the
extent set forth on the LATOKA Latest Balance Sheet, including all notes
thereto, LATOKA does not have any material liability or obligation of any
nature (whether accrued, absolute, contingent or otherwise) that would be
required to be reflected on, or reserved against in, a balance sheet of
LATOKA or in the notes thereto, prepared in accordance with generally
accepted accounting principles consistently applied, except liabilities
arising since the date of the LATOKA Latest Balance Sheet and as permitted
by this Agreement and that are not material individually or in the
aggregate.
(ii) The LATOKA Latest Balance Sheet includes appropriate reserves
for all Taxes and other liabilities incurred as of such date but not yet
payable.
(iii) Since the date of the LATOKA Latest Balance Sheet, there has
been no change that has had or is likely to have a Material Adverse Effect
on LATOKA.
(iv) The statements of income included in the LATOKA Financial
Statements do not contain any income or revenue realized from products or
services that the Surviving Corporation would be prohibited or restricted
from offering after the Effective Time pursuant to any covenant or provision
in any material contract to which any member of the LATOKA is a party.
(b)(i) The LEL Audited Financial Statements have been audited by
Simmons, Gainsford, chartered accountants, comply with the requirements of
the Companies ▇▇▇ ▇▇▇▇, as amended (the "Act"), and have been prepared in
accordance with the historic cost convention, all applicable statements of
standard accounting practice and financial reporting standards and
accounting principles and practices generally accepted in the United Kingdom
and other applicable statutes and regulations, except as may be noted
therein, and present fairly the financial position of LEL at such dates and
the profit and loss accounts of LEL for the periods set forth therein
(except, in the case of the LEL Interim Financial Statements, for normal
year-end audit adjustments which would not be material in amount or effect).
Except as and to the extent set forth on the LEL Latest Balance Sheet,
including all notes thereto, LEL does not have any material liability or
obligation of any nature (whether accrued, absolute, contingent or
otherwise) that would be required to be reflected on, or reserved against
in, a balance sheet of LEL or in the notes thereto, prepared in accordance
with such generally accepted accounting principles consistently applied,
except liabilities arising since the date of the LEL Latest Balance Sheet
and as permitted by this Agreement and that are not material individually or
in the aggregate.
(ii) The LEL Latest Balance Sheet includes appropriate reserves
for all Taxes and other liabilities incurred as of such date but not yet
payable.
(iii) Since the date of the LEL Latest Balance Sheet, there has
been no change that has had or is likely to have a Material Adverse Effect
on LEL.
(iv) The statements of income included in the LEL Financial
Statements do not contain any income or revenue realized from products or
services that the Surviving Corporation would be prohibited or restricted
from offering after the Effective Time pursuant to any covenant or provision
in any material contract to which any member of the LEL is a party.
Section 4.13 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the date of
the LATOKA Latest Balance Sheet and LEL Latest Balance Sheet, LATOKA and LEL
have conducted their respective businesses only in the ordinary course
consistent with their prior practices, and, except as set forth in SCHEDULE
4.13, neither has:
(a) amended its articles of incorporation, bylaws, memorandum and
articles of association or similar organizational documents;
(b) except as otherwise contemplated in Section 8.2(e), incurred
any liability or obligation of any nature (whether absolute or contingent,
accrued, fixed, known, unknown, matured or unmatured), except in the
ordinary course of business consistent with its prior practice, exceeding
$10,000 individually or $50,000 in the aggregate;
(c) suffered or permitted any of its assets to become subject to
any mortgage, charge, lien or other encumbrance;
(d) merged or consolidated with another entity or acquired or
agreed to acquire any business or any corporation, partnership or other
business organization, or sold, leased, transferred or otherwise disposed of
any assets except for fair value in the ordinary course of business;
(e) except as otherwise contemplated in Section 8.2(e), made any
capital expenditure or commitment therefor, except in the ordinary course of
business consistent with its prior practice, exceeding $10,000 individually
or $50,000 in the aggregate;
(f) declared or paid any dividend or made any distribution with
respect to any of its share capital or equity interests, or redeemed,
purchased or otherwise acquired any of its share capital or equity
interests, or issued, sold or granted any equity interests or any option,
warrant or other right to purchase or acquire any such interest;
(g) adopted any employee benefit plan or made any change in any
existing employee benefit plans or made any bonus or profit sharing
distribution or payment of any kind;
(h) increased indebtedness for borrowed money, or made any loan
to any Person;
(i) made any change affecting any banking, safe deposit or power
of attorney arrangements;
(j) entered into or amended any employment, severance or similar
agreement or arrangement with any director or employee, or granted any
increase in the rate of wages, salaries, bonuses or other compensation or
benefits of any executive or other employee;
(k) canceled, waived, released or otherwise compromised any debt,
claim or right;
(l) made any change in any method of accounting or auditing
practice;
(m) suffered the termination, suspension or revocation of any
material license or permit necessary for the operation of its business;
(n) entered into any material transaction other than on an arm's-
length basis;
(o) agreed, whether or not in writing, to do any of the
foregoing; or
(p) suffered any damage, destruction or loss (whether or not
covered by insurance) which has had or could have a Material Adverse Effect
on LATOKA or LEL, as the case may be.
Section 4.14 CONTRACTS. Except as may be set forth on SCHEDULE 4.14,
neither LATOKA, LEL or any of the LEL Subsidiaries is a party to: (i) any
collective bargaining agreement; (ii) any written or oral employment or
other agreement or contract with or commitment to any employee; (iii) any
agreement, contract or commitment containing any covenant limiting its
freedom to engage in any line of business or to compete with any Person;
(iv) any oral or written obligation of guaranty or indemnification arising
from any agreement, contract or commitment, except as provided in its
articles of incorporation or bylaws, or memorandum or articles of
association, as the case may be, (v) any joint venture, partnership or
similar contract involving a sharing of profits or expenses; (vi) any non-
disclosure agreement, non-competition agreement, agreement with any Person
who is or was an officer, director or employee of LATOKA, LEL or any of the
LEL Subsidiaries, as the case may be, tax indemnity, tax sharing or tax
allocation agreement, or severance, bonus or commission agreement; (vii) any
indenture, mortgage, charge, debenture, loan, credit, sale-leaseback or
similar contract under which LATOKA, LEL or any of the LEL Subsidiaries, as
the case may be, has borrowed any money or issued any note, bond or other
evidence of indebtedness for borrowed money or guaranteed indebtedness for
money borrowed by others; or (viii) any hedge, swap, exchange, futures or
similar agreements or contracts.
Section 4.15 PROPERTIES AND LEASES. (a) Neither LATOKA, LEL nor any
of the LEL Subsidiaries owns any real (immovable) or freehold property.
LATOKA, LEL and each of the LEL Subsidiaries have, except with respect to
assets disposed of for adequate consideration in the ordinary course of
business, consistent with its prior practice (none of which is material to
the operations of its business), good and merchantable title to all other
properties and assets reflected in the LATOKA Latest Balance Sheet and LEL
Latest Balance Sheet, respectively, free and clear of all pledges, liens,
defects, leases, licenses, equities, conditional sales contracts, charges,
claims, encumbrances, security interests, easements, restrictions, chattel
mortgages, mortgages or deeds of trust (collectively, "Liens"), except for
(i) Liens that secure indebtedness that is properly reflected in the LATOKA
Latest Balance Sheet or LEL Latest Balance Sheet, as the case may be, (ii)
Liens for Taxes accrued but not yet payable; and (iii) mechanic's, worker's,
materialmen's, operator's or other Liens arising as a matter of law in the
ordinary course of business with respect to obligations incurred after the
date of the LATOKA Latest Balance Sheet or LEL Latest Balance Sheet, as the
case may be, provided that the obligations secured by such Liens are not
delinquent. Each of LATOKA, LEL and the LEL Subsidiaries owns, or has valid
leasehold interests in, all properties and assets used in the conduct of its
business.
(b) With respect to each lease of any real (immovable) or
freehold property or any material personal (movable) property to which
either LATOKA, LEL or any of the LEL Subsidiaries is a party, (i) LATOKA,
LEL or any of the LEL Subsidiaries, as the case may be, has a valid
leasehold interest in such property, (ii) such lease is in full force and
effect in accordance with its terms; (iii) all rents and other monetary
amounts that have become due and payable thereunder have been paid in full;
(iv) no waiver, indulgence or postponement of the obligations thereunder has
been granted by the other party thereto; (v) there exists no material
default (or an event that, with notice or lapse of time or both would
constitute a default) under such lease; (vi) neither LATOKA, LEL nor any of
the LEL Subsidiaries has violated any of the terms or conditions under any
such lease and neither has knowledge, that (A) any condition or covenant to
be observed or performed by any other party under any such lease has not
been fully observed and performed and (B) in the case of each prime or head
lease concerning demised premises subleased to LATOKA, LEL or any of the LEL
Subsidiaries, any condition or covenant to be observed or performed by each
party thereto has not been fully observed and performed or that there exists
any event of default or event, occurrence, condition or act that, with the
giving of notice, the lapse of time or the happening of any further event or
condition, would become a default under any such prime lease; and (vii) the
transactions described in this Agreement will not constitute a default under
or cause for termination or modification of such lease.
(c) Neither LEL nor any LEL Subsidiary has at any time acquired,
assigned or otherwise disposed of any leasehold property in such a way that
it remains under any residual liability in respect thereof.
(d) Each building and premises owned or leased by LATOKA, LEL or
any of the LEL Subsidiaries is in a state of good maintenance and repair
(ordinary wear and tear excepted) and is adequate for the purposes for which
it is currently used.
(e) The rent charged to LATOKA, LEL or any of the LEL
Subsidiaries under any lease between LATOKA, LEL or any of the LEL
Subsidiaries and any Affiliate of LATOKA, LEL or any of the LEL Subsidiaries
is at or below the market rate and any such lease contains such other terms
and conditions that are no less favorable to LATOKA, LEL or any of the LEL
Subsidiaries than would be obtainable in an arms-length transaction with an
independent third party lessor.
(f) SCHEDULE 4.15(F) hereto contains an accurate and complete
list of all material domestic and foreign letters patent, patents, patent
applications, patent license, software licenses, know-how licenses, trade
names, trademarks, copyrights, unpatented inventions, service marks,
trademark registrations and applications, service ▇▇▇▇ registrations and
applications and copyright registrations and applications owned or used by
either LATOKA, LEL or any LEL Subsidiary in the operation of its business
(collectively the "Intellectual Property"). To the knowledge of each LATOKA
Shareholder except as stated in SCHEDULE 4.15(F), there are no adverse
claims affecting or with respect to the Intellectual Property. SCHEDULE
4.15(F) lists all notices or claims currently pending or received by either
LATOKA, LEL or any LEL Subsidiary of any domestic or foreign letters patent,
patent licenses and know-how licenses, trade marks, copyrights, copyright
registrations, trade secrets or other confidential proprietary information.
Except as set forth in SCHEDULE 4.15(F) hereto, there is, to the knowledge
of each LATOKA Shareholder, no reasonable basis upon which a claim may be
asserted against either LATOKA, LEL or any LEL Subsidiary for infringement
or breach of any domestic or foreign letters patent, patents, patent
licenses and know-how licenses, trade names, trademark registrations, common
law trademarks, service marks, copyrights, copyright registrations, trade
secrets or other confidential proprietary information. To the knowledge of
each LATOKA Shareholder, except as indicated on SCHEDULE 4.15(F), no Person
is infringing the Intellectual Property. Each material item of Intellectual
property owned or used by either LATOKA or LEL or their Affiliates
immediately prior to the Effective Time hereunder will be owned or available
for use by the Surviving Corporation on identical terms and conditions
immediately subsequent to the Effective Time hereunder.
Section 4.16 VOTING REQUIREMENTS. The affirmative vote of the holders
of the outstanding shares of LATOKA Common Stock entitled to vote on the
Merger is the only vote of the holders of any class or series of LATOKA's
capital stock necessary to approve this Agreement and the transactions
described herein.
Section 4.17 SUPPLIERS AND CUSTOMERS. No LATOKA Shareholder has actual
knowledge that (a) any supplier providing products, materials or services to
LATOKA, LEL or any of the LEL Subsidiaries intends to cease selling such
products, materials or services to LATOKA, LEL or any of the LEL
Subsidiaries or to limit or reduce such sales to LATOKA, LEL or any of the
LEL Subsidiaries or materially alter the terms or conditions of any such
sales, or (b) any customer of LATOKA, LEL or any of the LEL Subsidiaries
will terminate, limit or reduce its business relations with LATOKA or LEL.
Section 4.18 EMPLOYEE MATTERS. (a) LATOKA has no employees.
(b) (i) Since the date of the LEL Latest Balance Sheet there
have been no changes in the basis of the emoluments, remuneration or other
terms and conditions of employment or increase in the emoluments or
remuneration (including fringe benefits, etc.) of any employee or officer of
LEL or any of the LEL Subsidiaries.
(ii) No monies other than in respect of remuneration or
emoluments of employment are payable to or for the benefit of any officer or
employee of LEL or any of the LEL Subsidiaries.
(iii) All subsisting contracts of service to which LEL or any
of the LEL Subsidiaries is a party are determinable on three months' notice
or less without compensation (other than compensation in accordance with the
Employment Rights ▇▇▇ ▇▇▇▇ of the United Kingdom).
(iv) There are no amounts owing to any present or former
officers or employees of LEL or any of the LEL Subsidiaries other than
remuneration accrued (but not yet due for payment) in respect of the
calendar month in which this Agreement is executed or for reimbursement of
business expenses during such month.
(v) Except for the extent (if any) to which provision or
allowance has been made in the LEL Financial Statements, neither LEL nor any
of the LEL Subsidiaries has made or agreed to make any payment to, or
provided or agreed to provide any benefit for, any present or former officer
or employee which is not allowable as a deduction for the purposes of LEL
Taxation.
(vi) Except for the extent (if any) to which provision or
allowance has been made in the LEL Financial Statements:
(A) no liability has been incurred by LEL or any of the
LEL Subsidiaries for breach of any contract of service
or for services, for redundancy payments (including
protective awards) or for compensation for wrongful
dismissal or unfair dismissal or for failure to comply
with any order for the reinstatement or re-engagement of
any employee;
(B) no gratuitous payment has been made or promised by
LEL or any of the LEL Subsidiaries in connection with
the actual or proposed termination or suspension of
employment or variation of any contract of employment of
any present or former officer or employee.
(vii) Each of LEL and the LEL Subsidiaries has in relation to
each of its employees (and, so far as relevant, to each of its former
employees) complied in all material respects with:
(A) all obligations imposed on it by all statutes,
regulations and codes of conduct and practice relevant
to the relations between it and its employees or any
independent trade union and has maintained current
adequate and suitable records regarding the service of
each of its employees;
(B) all collective agreements and customs and practices
for the time being dealing with such relations or the
conditions of service of its employees;
(C) all relevant orders and awards made under any
relevant statute, regulation or code of conduct and
practice affecting the conditions of service of its
employees.
(viii) Within a period of one year preceding the date hereof
neither LEL nor any of the LEL Subsidiaries has given notice of any
redundancies to the relevant Secretary of State or started consultations
with any independent trade union or unions under the provisions of the
Employment Rights ▇▇▇ ▇▇▇▇ of the United Kingdom and has not failed to
comply with any such obligation under the said act.
(ix) Each of LEL and the LEL Subsidiaries has complied with
all recommendations made by the Advisory Conciliation and Arbitration
Service of the United Kingdom made to it and with all awards and
declarations made by the Central Arbitration Committee of the United
Kingdom.
(x) Neither LEL nor any of the LEL Subsidiaries is, and
during the preceding three years from the date hereof has never been,
involved in any industrial or trade dispute or any dispute or negotiation
regarding a claim of material importance with any trade union or association
of trade unions or organization or body of employees, and to the best of the
knowledge of the LATOKA Shareholders there are no circumstances which are
likely to give rise to any such dispute.
(xi) Each of LEL and the LEL Subsidiaries does not have in
existence, and is not proposing to introduce, any share incentive scheme,
share option scheme or profit sharing scheme for all or any of its directors
or employees.
(xii) No trade union or other body representing its employees
is or has been recognized in relation to any of the employees of LEL or the
LEL Subsidiaries.
(xiii) No employee has been given notice of termination of
his contract of employment or is under notice of dismissal.
(xiv) Neither LEL nor any of the LEL Subsidiaries has offered
any contract of employment to any person which offer remains outstanding.
(xv) There are no persons previously employed by LEL or the
LEL Subsidiaries who are on maternity leave, absent on grounds of disability
or other leave of absence and have a statutory or contractual right to
return to work for LEL or the LEL Subsidiaries.
(xvi) There are no enquiries or investigations existing,
pending or threatened affecting LEL or the LEL Subsidiaries by the Equal
Opportunities Commission or the Commission for Racial Equality of the United
Kingdom.
Section 4.19 EMPLOYEE BENEFIT PLANS. (a) LEL has no obligation (whether
legally binding or established after retirement, death or disability
(whether of a temporary or permanent nature) or otherwise) to provide
"relevant benefits" (within the meaning of Section 612 of the Income and
Corporate Taxes Act 1988 of the United Kingdom) to or in respect of any
person who is now, or has been, an officer or employee of LEL or spouse or
dependent of such officer or employee and is not a party to any scheme or
arrangement having as its purpose or one of its purposes the making of
payments or the provision of benefits as aforesaid.
(b) There are no schemes in operation by or in relation to LEL
whereunder any employee of LEL is entitled to a commission or remuneration
of any other sort calculated by reference to the whole or part of the
turnover, profits or sales of LEL.
Section 4.20 LATOKA TAX MATTERS. Each of the following is true with
respect to LATOKA:
(a) all Returns have been or will be timely filed by LATOKA when
due in accordance with all applicable laws; all Taxes shown on the Returns
have been or will be timely paid when due; the Returns have been properly
completed in compliance with all applicable laws and regulations and
completely and accurately reflected the facts regarding the income,
expenses, properties, business and operations required to be shown thereon;
the Returns are not subject to penalties under Section 6662 of the Code (or
any corresponding provision of state, local or foreign tax law);
(b) LATOKA has paid all Taxes required to be paid by it (whether
or not shown on a Return) or for which it could be liable, whether to taxing
authorities or to other persons under tax allocation agreements or
otherwise, and the charges, accruals, and reserves for Taxes due, or accrued
but not yet due, relating to its income, properties, transactions or
operations for any Pre-Closing Period as reflected on its books (including,
without limitation, the LATOKA Latest Balance Sheet) are adequate to cover
such Taxes;
(c) there are no agreements or consents currently in effect for
the extension or waiver of the time (A) to file any Return or (B) for
assessment or collection of any Taxes relating to the income, properties or
operations of LATOKA for any Pre-Closing Period, and LATOKA has not been
requested to enter into any such agreement or consent;
(d) there are no Liens for Taxes (other than for current Taxes
not yet due and payable) upon the assets of LATOKA;
(e) all material elections with respect to Taxes affecting LATOKA
are set forth in SCHEDULE 4.20(E);
(f) all Taxes that LATOKA is required by law to withhold or
collect have been duly withheld or collected, and have been timely paid over
to the appropriate governmental authorities to the extent due and payable;
(g) SCHEDULE 4.20(G) hereto sets forth (A) the taxable years of
LATOKA as to which the respective statutes of limitations with respect to
Taxes have not expired, and (B) with respect to such taxable years sets
forth those years for which examinations have not been completed, those
years for which examinations are currently being conducted, those years for
which examinations have not been initiated, and those years for which
required Returns have not yet been filed. SCHEDULE 4.20(G) lists each state
and foreign jurisdiction in which LATOKA has, in the last three years, filed
a Return, and no Return is required for any other state or foreign
jurisdiction;
(h) all tax deficiencies which have been asserted or, to the
knowledge of each LATOKA Shareholder, claimed or proposed against LATOKA
("Tax Deficiencies") have been fully paid or finally settled, and no issue
has been raised in any examination which, by application of similar
principles, can be expected to result in the proposal or assertion of a Tax
Deficiency for any other year not so examined;
(i) to the knowledge of each LATOKA Shareholder, no facts exist
that would constitute the basis for the proposal or assertion of any Tax
Deficiencies for any unexamined year or for the recharacterization of any
item of income, expense or deduction set forth on the Returns, and LATOKA
has complied in all material respects with all applicable Tax laws;
(j) LATOKA is not a party to any agreement, contract, arrangement
or plan that would result, separately or in the aggregate, in the payment of
any "excess parachute payments" within the meaning of Code Section 280G (or
any comparable provision of state or local law);
(k) LATOKA has not agreed, nor is it required, to make any
adjustment under Code Section 481(a) (or any comparable provision of state
or local law) by reason of a change in accounting method or otherwise;
(l) LATOKA has not filed a consent pursuant to the collapsible
corporation provisions of Section 341(f) of the Code (or any corresponding
provision of state, local or foreign income law) or agreed to have Section
341(f)(2) of the Code (or any corresponding provision of state, local or
foreign income law) apply to any disposition of any asset owned by it;
(m) none of the assets of LATOKA is property that it is required
to treat as being owned by any other person pursuant to the so-called "safe
harbor lease" provisions of former Section 168(f)(8) of the Code;
(n) none of the assets of LATOKA directly or indirectly secures
any debt, the interest on which is tax exempt under Section 103(a) of the
Code;
(o) none of the assets of LATOKA is "tax-exempt use property"
within the meaning of Section 168(h) of the Code;
(p) LATOKA has not made a deemed dividend election under former
Section 1.1502-32(f)(2) of the Treasury Regulations or a consent dividend
election under Section 565 of the Code;
(q) LATOKA has never been a member of an affiliated group filing
consolidated returns other than a group of which LATOKA is the parent
corporation;
(r) there are no outstanding balances of deferred gain or loss
accounts related to deferred intercompany transactions with respect to
LATOKA under Sections 1.1502-13 or 1.1502-14 of the Treasury Regulations;
and
(s) LATOKA is not (nor has ever been) a party to any tax sharing
agreement, has not assumed the liability of any other person under contract
and does not have any liability under Section 1.1502-6 of the Treasury
Regulations or analogous state, local or foreign law.
Section 4.20A LEL TAX MATTERS. Each of the following is true with
respect to LEL:
(a) The LEL Financial Statements contain full provision for all
LEL Taxation, including deferred LEL Taxation, liable to be assessed on LEL
for all accounting periods up to and ending on the date of the LEL Latest
Balance Sheet or for any subsequent period (on the basis of the rules of LEL
Taxation and LEL Taxation statutes in force at the date of the LEL Latest
Balance Sheet) in respect of any transaction, event or omission occurring,
(or deemed to have occurred), or any profit, gain or income (actual or
deemed) made or earned by LEL, on or prior to the date of the LEL Latest
Balance Sheet or for which LEL is accountable up to such date and all
contingent liabilities for LEL Taxation have been provided for or properly
disclosed in the LEL Financial Statements.
(b) Since the date of the LEL Latest Balance Sheet no further
liability or contingent liability for LEL Taxation has arisen otherwise than
as a result of trading activities in the ordinary course of its business,
consistent with prior practice.
(c) All notices, Returns, computations and accounts of LEL made
for LEL Taxation purposes were when made, and remain, correct and on a
proper basis and all other information supplied to the Inland Revenue or
other fiscal authority for such purpose was when supplied, and remains,
correct and on a proper basis and such returns include all returns and
information which LEL ought to have made or given for the purposes of LEL
Taxation and are not subject to any dispute at the date hereof with, and LEL
has not suffered within the past twelve months any investigation, audit or
visit by, the Inland Revenue, Customs & Excise or any other relevant fiscal
authority and there is no fact or matter known to the LATOKA Shareholders
which might be the occasion of any such dispute or of any liability for LEL
Taxation (present or future) not provided for in the LEL Financial
Statements.
(d) LEL has paid all LEL Taxation for which it is liable to
account to the Inland Revenue or other fiscal authority on the due date for
payment thereof and has within the past six years been, and is, under no
liability to pay any penalty or interest in connection therewith and,
without prejudice to the generality of the foregoing, LEL has deducted all
LEL Taxation required to be deducted from any payments made by LEL
including, but not limited to, interest, annuities or other annual payments,
royalties, rent, remuneration payable to employees or sub-contractors or
purchase consideration for land payable to a non-resident and, where
appropriate LEL has duly accounted for any such LEL Taxation deducted or
collected and LEL has paid all Advance Corporation Tax in relation to any
distribution or dividend (within the meanings of Section 209 to 211 of
Income and Corporation Taxes ▇▇▇ ▇▇▇▇ of the United Kingdom) made on or
before the date hereof to the Inland Revenue or other fiscal authority.
Section 4.21 LITIGATION. Except as disclosed on SCHEDULE 4.21, there
are no actions, suits, proceedings, arbitrations or investigations pending
or, to the knowledge of each LATOKA Shareholder, threatened before any
court, any governmental agency or instrumentality or any arbitration panel,
against or affecting any of LATOKA, LEL or any of the LEL Subsidiaries, or
their directors, officers, or employees, and neither LATOKA Shareholder
knows of any basis therefor. Neither LATOKA, LEL nor any of the LEL
Subsidiaries is not subject to any currently pending settlement, judgment,
order or decree entered in any lawsuit or proceeding. The current status of
the litigation (or settlement thereof) between LEL and PEC International,
Ltd., is disclosed on SCHEDULE 4.21.
Section 4.22 LATOKA ENVIRONMENTAL COMPLIANCE. (a) To the Knowledge of
each LATOKA Shareholder, LATOKA possesses all necessary licenses, permits
and other approvals and authorizations that are required under, and is, and
at all times has been, in material compliance with such licenses, permits
and other approvals and authorizations and is, and at all times has been, in
material compliance with, all federal, state, local and foreign laws, common
law duties, ordinances, codes and regulations relating to pollution or the
protection of the environment (collectively, "Environmental Laws"),
including without limitation all Environmental Laws governing the
generation, use, collection, treatment, storage, transportation, recovery,
removal, discharge, manufacture, processing, distribution, handling or
disposal of hazardous substances or wastes, and all Environmental Laws
imposing record-keeping, maintenance, testing, inspection, notification and
reporting requirements with respect to hazardous substances or wastes. For
purposes of this Agreement, "hazardous substances" and "hazardous wastes"
are materials defined as "hazardous substances," "hazardous wastes,"
"hazardous constituents," "toxic substances," or " radioactive materials" in
(i) the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, 42 U.S.C. Sections 9601-9675, as amended by the Superfund
Amendments and Reauthorization Act of 1986, and any amendments thereto and
regulations thereunder; (ii) the Resource Conservation and Recovery Act of
1976, 42 U.S.C. Sections 6901-6992, as amended by the Hazardous and Solid
Waste Amendments of 1984, and any amendments thereto and regulations
thereunder; (iii) the Clean Air Act, 42 U.S.C. 7401, et. seq., and any
amendments thereto and regulations thereunder; (iv) the Clean Water Act, 33
U.S.C. 1251, et. seq., and any amendments thereto and regulations
thereunder; (v) the Toxic Substances Control Act, 15 U.S.C. Section 2601,
et. seq., (vi) the Atomic Energy Act, 42 U.S.C. Section 2011, et. seq.
(vii) the Oil Pollution Act of 1990, 33 U.S.C. Sections 2701-2761, and any
amendments thereto and regulations thereunder; or (viii) any other federal,
state, local or foreign Environmental Law or regulation.
(b) No Environmental Claims have been asserted within the past
five years against LATOKA or, except as disclosed on SCHEDULE 4.22, a
predecessor-in-interest of LATOKA, regarding (i) the operations of LATOKA or
any predecessor-in-interest, (ii) the assets of LATOKA or any predecessor-
in-interest, or (iii) any properties now or previously owned or leased by
LATOKA or any predecessor-in-interest. To the knowledge of each LATOKA
Shareholder, there are no threatened or pending Environmental Claims against
LATOKA or a predecessor-in-interest of LATOKA which are reasonably likely to
result in Environmental Liabilities regarding (i) the operations of LATOKA
or any predecessor-in-interest, (ii) the assets of LATOKA or any
predecessor-in-interest, or (iii) any properties now or previously owned or
leased by any member of the LATOKA or any predecessor-in-interest. No
LATOKA Shareholder has actual knowledge of any Environmental Claims that
have been asserted against any facilities that may have received Hazardous
Materials generated by LATOKA or any predecessor-in-interest that is
reasonably likely to result in an Environmental Liability.
(c) Except as disclosed on SCHEDULE 4.22 or in an Environmental
Report referred to in Section 4.22(f), to the knowledge of each LATOKA
Shareholder, there are no Hazardous Materials used, disposed of, discharged
or stored by LATOKA, and any Hazardous Materials disclosed on SCHEDULE 4.22
as used, disposed of, discharged or stored are and have been so used,
disposed of, discharged or stored in compliance with Environmental Laws. To
the knowledge of each LATOKA Shareholder there has been no Release (i) at
any of the properties now or previously owned, operated or leased by LATOKA
or any predecessor-in-interest, (ii) from any assets owned, leased or
operated by LATOKA or any predecessor-in-interest, or (iii) at any disposal,
storage or treatment facility which received Hazardous Materials generated
by LATOKA or any predecessor-in-interest which is reasonably likely to
result in Environmental Liabilities. LATOKA has not engaged any person to
handle, transport or dispose of Hazardous Materials on its behalf, and the
disposal by LATOKA of its Hazardous Materials has been in compliance with
all Environmental Laws.
(d) There are no underground tanks, active or abandoned, of any
type (including tanks storing gasoline, diesel fuel, oil or other petroleum
products) or disposal sites for hazardous substances, hazardous wastes or
any other waste, located on or under the real estate currently owned, leased
or used by LATOKA and there were no such disposal sites located on or under
the real estate previously owned, leased or used by LATOKA on the date of
the sale thereof by LATOKA or during the period of lease for use by LATOKA.
(e) There are no past or present events, conditions,
circumstances, activities or practices which may interfere with or prevent
continued compliance with current Environmental Laws.
(f) There have been no environmental investigations, studies,
audits, tests, reviews or other analyses (collectively, "Environmental
Reports") conducted by, or which are in the possession or control of, LATOKA
that have been provided to a Governmental Entity in relation to any premises
owned, operated or leased by LATOKA except for those Environmental Reports
which have been made available to UNIFAB prior to the date hereof, which
Environmental Reports are listed on SCHEDULE 4.22. The LATOKA Shareholders
have caused UNIFAB to be provided with complete copies of any Environmental
Reports referenced herein.
Section 4.22A LEL ENVIRONMENTAL MATTERS. (a) To the knowledge of each
LATOKA Shareholder, except as set forth in SCHEDULE 4.22A and the reports or
the documentation referred to therein relating to environmental matters
there has at no time been any Release, discharge or treatment of any
hazardous substance upon, in or under any of LEL's or any of the LEL
Subsidiaries' properties; any storage, generation or disposal of any
special, hazardous or toxic waste upon, in or under any of LEL's or any of
the LEL Subsidiaries' properties; any spillage or leakage of petroleum
products upon, in or under the Properties (other than immaterial quantities
in connection with the operation of motor vehicles on any of LEL's or any of
the LEL Subsidiaries' properties; any radon gas detected at any of LEL's or
any of the LEL Subsidiaries' properties; any enforcement action brought her
Majesty's Inspectorate of Pollution (HMIP), the National Rivers Authority
(NRA) or local authority in relation to any of LEL's or any of the LEL
Subsidiaries' properties or any processes or activities carried on upon
them, nor has there been any third party claim relating to the Release,
threat of Release, discharge, storage, treatment, generation, emission or
disposal of any substance on, in or from any of LEL's or any of the LEL
Subsidiaries' properties.
(b) To the knowledge of each LATOKA Shareholder, neither LEL nor
any LEL Subsidiary has received and has in all material respects complied
with all consents, licenses, approvals and other authorizations required
under all environmental laws, and regulations, which are applicable to LEL
or any LEL Subsidiary and/or its properties and/or the business of LEL or
any LEL Subsidiary and all operations and processes undertaken by LEL or
any LEL Subsidiary upon its properties.
Section 4.23 COMPLIANCE WITH LAW; PERMITS. (a) The operations and
activities of LATOKA, LEL and the LEL Subsidiaries comply in all material
respects with all applicable laws, regulations, ordinances, rules or orders
of any federal, state or local court or any governmental authority.
(b) Each of LATOKA, LEL and the LEL Subsidiaries possesses all
material governmental licenses, permits and other governmental
authorizations that are (i) required under all federal, state, local,
English, United Kingdom, or other Applicable Laws and regulations for the
ownership, use and operation of its assets or (ii) otherwise necessary to
permit the conduct of its business without interruption, and such licenses,
permits and authorizations are in full force and effect and have been and
are being complied with by it. Neither LATOKA, LEL nor any of the LEL
Subsidiaries has received written notice of any violation of any of the
terms or conditions of any such license, permit or authorization and the
LATOKA Shareholders have no knowledge of any facts or circumstances that
could form the basis of a revocation, claim, citation or allegation against
it for a violation of any such license, permit or authorization. No such
license, permit or authorization or any renewal thereof will be terminated,
revoked, suspended, modified or limited in any respect as a result of the
transactions contemplated by this Agreement.
Section 4.24 SAFETY AND HEALTH. The property and assets of LATOKA, LEL
and the LEL Subsidiaries have been and are being operated in material
compliance with all Applicable Laws designed to protect safety or health, or
both, including, without limitation, the Occupational Safety and Health Act
and the regulations promulgated pursuant thereto. Neither LATOKA, LEL nor
any of the LEL Subsidiaries has received any written notice of any
violations, deficiency, investigation or inquiry from any Governmental
Entity, employer or third party under any such Applicable Law and, to the
knowledge of each LATOKA Shareholder, no such investigation or inquiry is
planned or threatened.
Section 4.25 TRANSACTIONS WITH RELATED PARTIES. Except for payments to
employees of salaries, wages and reimbursement of expenses incurred in the
course of their employment consistent with past practices,
(a) SCHEDULE 4.25(A) lists all transactions between the Latest
LATOKA Balance Sheet and the Latest LEL Balance Sheet, as the case may be,
and the date of this Agreement involving or for the benefit of LATOKA, LEL
or any of the LEL Subsidiaries, on the one hand, and any person who is or
was a shareholder, director or officer of LATOKA, LEL or any of the LEL
Subsidiaries or an Affiliate of such shareholder, director or officer, on
the other hand, including (i) any debtor or creditor relationship, (ii) any
transfer or lease of real or personal property, (iii) wages, salaries,
commissions, bonuses and agreements relating to employment, (iv) purchases
or sales of products or services, and (v) sales of products or services to
third parties.
(b) SCHEDULE 4.25(B) lists (i) all material agreements and claims
of any nature that any person who is or was a shareholder, officer or
director of LATOKA, LEL or any of the LEL Subsidiaries or Affiliate of such
shareholder, officer or director has with or against LATOKA, LEL or any of
the LEL Subsidiaries, as the case may be, as of the date of this Agreement
that are not specifically identified on the LATOKA Latest Balance Sheet or
the LEL Latest Balance Sheet and (ii) all material agreements and claims of
any nature that LATOKA has with or against any person who is or was a
shareholder, officer or director of LATOKA or Affiliate of such shareholder,
officer or director as of the date of this Agreement that are not
specifically identified on the LATOKA Latest Balance Sheet or the LEL Latest
Balance Sheet.
Section 4.26 BROKER'S AND FINDER'S FEE. No agent, broker, Person or
firm acting on behalf of LATOKA or the LATOKA Shareholders other than Chaffe
& Associates, Inc., is or will be entitled to any commission or broker's or
finder's fee from any of the parties hereto, or from any person controlling,
controlled by or under common control with any of the parties hereto, in
connection with any of the transactions contemplated herein.
Section 4.27 MATERIALITY. Where representations and warranties are
made in Article 4 the performance and fulfillment of which are qualified as
to materiality, such qualification as to all such representations and
warranties does not, in the aggregate, have a Material Adverse Effect.
Section 4.28 DISCLOSURE. To the knowledge of each LATOKA Shareholder
no representations or warranties by either of them in this Agreement and no
statement contained in any document (including, without limitation, the
financial statements, certificates, or other writings) furnished or to be
furnished by LATOKA or LEL to UNIFAB or any of its representatives pursuant
to the provisions hereof or in connection with the transactions contemplated
hereby, contains or will contain any untrue statement of material fact or
omits or will omit to state any material fact necessary, in light of the
circumstances under which it was made, in order to make the statements
herein or therein not misleading.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF UNIFAB AND SUB
UNIFAB and Sub represent and warrant to and agree with LATOKA and the
LATOKA Shareholders, as of the date hereof and as of the Closing Date, as
follows:
Section 5.1 ORGANIZATION. Each of UNIFAB and Sub is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Louisiana and has all requisite power and authority to carry on its
business as now being conducted and to own its properties. Each other
member of the UNIFAB Affiliated Group is duly organized under the laws of
the state or foreign nation of its organization and has all the requisite
power and authority under the laws of such jurisdiction to carry on its
business as now being conducted and to own its properties. Each member of
the UNIFAB Affiliated Group is duly qualified to do business and is in good
standing in each state and foreign jurisdiction in which the character or
location of the properties owned or leased by it or the nature of the
business conducted by it makes such qualification necessary, except those
jurisdictions, if any, in which the failure to be so qualified would not
individually or in the aggregate have a Material Adverse Effect.
Section 5.2 CAPITALIZATION. (a) The authorized capital stock of UNIFAB
consists exclusively of 25 million shares of capital stock, comprised of (i)
20 million shares of Common Stock, $.01 par value per share, of which
5,048,655 shares are issued and outstanding and no shares are held in its
treasury, and (ii) 5 million shares of preferred stock, no par value per
share, none of which are issued or outstanding. All of such issued and
outstanding shares have been validly issued, are fully paid and
nonassessable and were issued free of preemptive rights, in compliance with
any rights of first refusal, and in compliance with all legal requirements.
(b) UNIFAB is the sole shareholder of Sub and the owner of all of
Sub's issued and outstanding common stock. The common stock of Sub is the
only authorized class of stock of Sub.
Section 5.3 AUTHORITY; ENFORCEABLE AGREEMENTS. (a) UNIFAB and Sub
each has the requisite power and authority to enter into this Agreement and
to consummate the transactions described herein. The execution and delivery
of this Agreement by UNIFAB and Sub and the consummation by UNIFAB and Sub
of the transactions described herein have been duly authorized by all
necessary corporate action on the part of UNIFAB and all requisite action on
the part of Sub.
(b) This Agreement has been duly executed and delivered by UNIFAB
and Sub, and constitutes a valid and binding obligation of UNIFAB and Sub,
enforceable in accordance with its terms, except as such enforceability may
be limited by bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally or by general equitable principles.
The other agreements entered, or to be entered, into by UNIFAB and Sub in
connection with this Agreement have been, or will be, duly executed and
delivered by UNIFAB and Sub, and constitute, or will constitute, valid and
binding obligations of UNIFAB and Sub, enforceable in accordance with their
terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally or by general equitable principles.
Section 5.4 NO CONFLICTS OR CONSENTS. (a) Neither the execution,
delivery or performance of this Agreement by UNIFAB or Sub nor the
consummation of the transactions contemplated hereby will violate, conflict
with, or result in a breach of any provision of, constitute a default (or an
event that, with notice or lapse of time or both, would constitute a
default) under, result in the termination of, or accelerate the performance
required by, or result in the creation of any adverse claim against any of
the properties or assets of any member of the UNIFAB Affiliated Group under,
(i) the certificates of incorporation, bylaws, articles of organization,
operating agreements or other organizational documents of any member of the
UNIFAB Affiliated Group, (ii) any note, bond, mortgage, indenture, deed of
trust, lease, license, agreement or other instrument or obligation to which
any member of the UNIFAB Affiliated Group is a party, or by which any member
of the UNIFAB Affiliated Group or any of its assets are bound, or (iii) any
order, writ, injunction, decree, judgment, statute, rule or regulation of
any governmental body to which any member of the UNIFAB Affiliated Group is
subject or by which any member of the UNIFAB Affiliated Group or any of the
assets of the foregoing are bound that would, individually or in the
aggregate, have a Material Adverse Effect.
(b) No consent or approval of, any Governmental Entity is
required by or with respect to UNIFAB or any of its Subsidiaries in
connection with the execution and delivery of this Agreement by UNIFAB or is
necessary for the consummation of the Merger and the other transactions
contemplated by this Agreement, except for (i) the filing and recordation
requirements of the LBCL with respect to the Certificate of Merger and the
filing of appropriate documents with the relevant authorities of other
states in which UNIFAB or any of its Subsidiaries is qualified to do
business, and (ii) such other consents, orders, authorizations,
registrations, declarations and filings the failure of which to obtain or
make would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on UNIFAB or would not materially impair the
ability of UNIFAB to perform its obligations hereunder or prevent the
consummation of any of the transactions contemplated hereby.
Section 5.5 SEC DOCUMENTS; FINANCIAL STATEMENTS; LIABILITIES. (a)
UNIFAB has filed all required reports, schedules, forms, statements and
other documents with the SEC since September 18, 1997. As of their
respective dates, the UNIFAB Disclosure Documents, and any such reports,
forms and documents filed by UNIFAB with the SEC after the date hereof,
complied, or will comply, in all material respects with the requirements of
the Securities Act or the Exchange Act, as the case may be, and the rules
and regulations of the SEC promulgated thereunder applicable to such
Documents, and except to the extent that information contained in any UNIFAB
Disclosure Document has been revised or superseded by a later filed UNIFAB
Disclosure Document, none of such Documents contains any untrue statement of
a material fact or omits to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(b) The UNIFAB Audited Financial Statements included in the
UNIFAB Disclosure Documents have been audited by the certified public
accountants identified therein in accordance with generally accepted
auditing standards, have been prepared in accordance with generally
accepted accounting principles applied on a basis consistent with prior
periods, and present fairly the financial position of UNIFAB at such dates
and the results of operations and cash flow for the periods then ended,
except, in the case of the UNIFAB Interim Financial Statements, as permitted
by Rule 10-01 of Regulation S-X of the SEC. Except as and to the extent set
forth on the LEL Latest Balance Sheet, including all notes thereto, LEL does
not have any material liability or obligation of any nature (whether
accrued, absolute, contingent or otherwise) that would be required to be
reflected on, or reserved against in, a balance sheet of LEL or in the notes
thereto, prepared in accordance with generally accepted accounting
principles consistently applied, except liabilities arising since the date
of the LEL Latest Balance Sheet and as permitted by this Agreement and that
are not material individually or in the aggregate.
(c) The UNIFAB Latest Balance Sheet includes appropriate reserves
for all Taxes and other liabilities incurred as of such date but not yet
payable.
(d) Since the date of the UNIFAB Latest Balance Sheet, there has
been no change that has had or is likely to have a Material Adverse Effect
on UNIFAB.
Section 5.6 LEGALITY OF UNIFAB COMMON STOCK. The UNIFAB Common Stock
to be issued in connection with the Merger, when issued and delivered in
accordance with the terms hereof, will be duly authorized, validly issued,
fully paid and non-assessable.
Section 5.7 TAX MATTERS. Each of the following is true with respect to
UNIFAB:
(a) all Returns have been or will be timely filed by UNIFAB when
due in accordance with all applicable laws; all Taxes shown on the Returns
have been or will be timely paid when due; the Returns have been properly
completed in compliance with all applicable laws and regulations and
completely and accurately reflected the facts regarding the income,
expenses, properties, business and operations required to be shown thereon;
the Returns are not subject to penalties under Section 6662 of the Code (or
any corresponding provision of state, local or foreign tax law);
(b) UNIFAB has paid all Taxes required to be paid by it (whether
or not shown on a Return) or for which it could be liable, whether to taxing
authorities or to other persons under tax allocation agreements or
otherwise, and the charges, accruals, and reserves for Taxes due, or accrued
but not yet due, relating to its income, properties, transactions or
operations for any Pre-Closing Period as reflected on its books (including,
without limitation, the UNIFAB Latest Balance Sheet) are adequate to cover
such Taxes;
(c) there are no agreements or consents currently in effect for
the extension or waiver of the time (C) to file any Return or (D) for
assessment or collection of any Taxes relating to the income, properties or
operations of UNIFAB for any Pre-Closing Period, and UNIFAB has not been
requested to enter into any such agreement or consent;
(d) there are no Liens for Taxes (other than for current Taxes
not yet due and payable) upon the assets of UNIFAB;
(e) all material elections with respect to Taxes affecting UNIFAB
are set forth in SCHEDULE 5.7(E);
(f) all Taxes that UNIFAB is required by law to withhold or
collect have been duly withheld or collected, and have been timely paid over
to the appropriate governmental authorities to the extent due and payable;
(g) SCHEDULE 5.7(G) hereto sets forth (A) the taxable years of
UNIFAB as to which the respective statutes of limitations with respect to
Taxes have not expired, and (B) with respect to such taxable years sets
forth those years for which examinations have not been completed, those
years for which examinations are currently being conducted, those years for
which examinations have not been initiated, and those years for which
required Returns have not yet been filed. SCHEDULE 5.7(G) lists each state
and foreign jurisdiction in which UNIFAB has, in the last three years, filed
a Return, and no Return is required for any other state or foreign
jurisdiction;
(h) all tax deficiencies which have been asserted or, to UNIFAB's
knowledge, claimed or proposed against UNIFAB ("Tax Deficiencies") have been
fully paid or finally settled, and no issue has been raised in any
examination which, by application of similar principles, can be expected to
result in the proposal or assertion of a Tax Deficiency for any other year
not so examined;
(i) to UNIFAB's knowledge, no facts exist that would constitute
the basis for the proposal or assertion of any Tax Deficiencies for any
unexamined year or for the recharacterization of any item of income, expense
or deduction set forth on the Returns, and UNIFAB has complied in all
material respects with all applicable Tax laws;
(j) UNIFAB is not a party to any agreement, contract, arrangement
or plan that would result, separately or in the aggregate, in the payment of
any "excess parachute payments" within the meaning of Code Section 280G (or
any comparable provision of state or local law);
(k) UNIFAB has not agreed, nor is it required, to make any
adjustment under Code Section 481(a) (or any comparable provision of state
or local law) by reason of a change in accounting method or otherwise;
(l) UNIFAB has not filed a consent pursuant to the collapsible
corporation provisions of Section 341(f) of the Code (or any corresponding
provision of state, local or foreign income law) or agreed to have Section
341(f)(2) of the Code (or any corresponding provision of state, local or
foreign income law) apply to any disposition of any asset owned by it;
(m) none of the assets of UNIFAB is property that it is required
to treat as being owned by any other person pursuant to the so-called "safe
harbor lease" provisions of former Section 168(f)(8) of the Code;
(n) none of the assets of UNIFAB directly or indirectly secures
any debt, the interest on which is tax exempt under Section 103(a) of the
Code;
(o) none of the assets of UNIFAB is "tax-exempt use property"
within the meaning of Section 168(h) of the Code;
(p) UNIFAB has not made a deemed dividend election under former
Section 1.1502-32(f)(2) of the Treasury Regulations or a consent dividend
election under Section 565 of the Code;
(q) UNIFAB has never been a member of an affiliated group filing
consolidated returns other than a group of which UNIFAB is the parent
corporation;
(r) there are no outstanding balances of deferred gain or loss
accounts related to deferred intercompany transactions with respect to
UNIFAB under Sections 1.1502-13 or 1.1502-14 of the Treasury Regulations;
and
(s) UNIFAB is not (nor has ever been) a party to any tax sharing
agreement, has not assumed the liability of any other person under contract
and does not have any liability under Section 1.1502-6 of the Treasury
Regulations or analogous state, local or foreign law.
Section 5.8 LITIGATION. Except as disclosed on SCHEDULE 5.8, there are
no actions, suits, proceedings, arbitrations or investigations pending or,
to the knowledge of UNIFAB, threatened before any court, any governmental
agency or instrumentality or any arbitration panel, against or affecting
UNIFAB or its directors, officers, or employees, and UNIFAB knows of no
basis therefor. UNIFAB is not subject to any currently pending judgment,
order or decree entered in any lawsuit or proceeding.
Section 5.9 COMPLIANCE WITH LAW; PERMITS. (a) The operations and
activities of UNIFAB comply in all material respects with all applicable
laws, regulations, ordinances, rules or orders of any federal, state or
local court or any governmental authority.
(b) UNIFAB possesses all material governmental licenses, permits
and other governmental authorizations that are (i) required under all
federal, state and local laws and regulations for the ownership, use and
operation of its assets or (ii) otherwise necessary to permit the conduct of
its business without interruption, and such licenses, permits and
authorizations are in full force and effect and have been and are being
complied with by it. UNIFAB has received no notice of any violation of any
of the terms or conditions of any such license, permit or authorization and
UNIFAB has no knowledge of any facts or circumstances that could form the
basis of a revocation, claim, citation or allegation against it for a
violation of any such license, permit or authorization. No such license,
permit or authorization or any renewal thereof will be terminated, revoked,
suspended, modified or limited in any respect as a result of the
transactions contemplated by this Agreement.
Section 5.10 BROKER'S AND FINDER'S FEE. No agent, broker, Person or
firm acting on behalf of UNIFAB is or will be entitled to any commission or
broker's or finder's fee from any of the parties hereto, or from any person
controlling, controlled by or under common control with any of the parties
hereto, in connection with any of the transactions contemplated herein.
Section 5.11 DISCLOSURE. To UNIFAB's knowledge, no representations or
warranties by UNIFAB in this Agreement and no statement contained in any
document (including, without limitation, the financial statements,
certificates, or other writings) furnished or to be furnished by UNIFAB to
LATOKA or any of its representatives pursuant to the provisions hereof or in
connection with the transactions contemplated hereby, contains or will
contain any untrue statement of material fact or omits or will omit to state
any material fact necessary, in light of the circumstances under which it
was made, in order to make the statements herein or therein not misleading.
ARTICLE 5A. REPRESENTATIONS AND WARRANTIES OF THE
LATOKA SHAREHOLDERS AND UNIFAB
The LATOKA Shareholders and UNIFAB represent and warrant to each other
that they have each independently reviewed the provisions of the ▇▇▇▇-▇▇▇▇▇-
▇▇▇▇▇▇ Antitrust Improvements Act of 1976 and agree that no filing is
required thereunder with respect to the Merger.
ARTICLE 6. PRE-CLOSING COVENANTS
Section 6.1 CONDUCT OF BUSINESS PRIOR TO THE CLOSING DATE. During the
period from the date of this Agreement to the Effective Time, LATOKA, LEL
and UNIFAB shall each use its best efforts to preserve the possession and
control of all of its assets other than those consumed or disposed of for
value in the ordinary course of business or pursuant to the terms of this
Agreement, to preserve the goodwill of suppliers, customers and others
having business relations with it and to do nothing knowingly to impair its
ability to keep and preserve its business as it exists on the date of this
Agreement. Without the prior written consent of the other party, neither
LATOKA, LEL or any LATOKA Shareholder nor UNIFAB shall commit or suffer to
occur any act or omission that (i) would cause a breach of any agreement,
commitment or covenant of such party contained in this Agreement in any
material respect or (ii) would cause its representations and warranties
contained in Articles 4 and 5, respectively, to become untrue in any
material respect. Without limiting the generality of the foregoing, during
the period from the date of this Agreement to the Effective Time of the
Merger each of LATOKA, LEL and UNIFAB shall conduct its business only in the
ordinary course consistent with past practices.
Section 6.2 NO SOLICITATIONS. (a) Neither LATOKA nor any LATOKA
Shareholder shall directly or indirectly, either individually or through any
officer, director, employee, representative, agent or affiliate of LATOKA,
(i) initiate, solicit, encourage or otherwise facilitate the initiation or
submission of any inquiries, proposals or offers that constitute or may
reasonably be expected to lead to an Acquisition Proposal (as defined
below), (ii) enter into or maintain or continue discussions or negotiate
with any Person in furtherance of such inquiries or to obtain an Acquisition
Proposal or (iii) agree to, approve, recommend, or endorse any Acquisition
Proposal.
(b) For purposes of this Agreement, "Acquisition Proposal" means
an inquiry, offer or proposal regarding any of the following (other than the
transactions contemplated by this Agreement) involving LATOKA, LEL or any of
the LEL Subsidiaries: (i) any merger, reorganization, consolidation, share
exchange, recapitalization, business combination, liquidation, dissolution,
or other similar transaction involving, or, any sale, lease, exchange,
mortgage, pledge, transfer or other disposition of, all or any significant
portion of the assets or 10% or more of the equity securities of, LATOKA,
LEL or any of the LEL Subsidiaries in a single transaction or series of
related transactions which could reasonably be expected to interfere with
the completion of the Merger; (ii) any tender offer or exchange offer for
20% or more of the outstanding shares of capital stock of LATOKA, LEL or any
of the LEL Subsidiaries; or (iii) any public announcement of a proposal,
plan or intention to do any of the foregoing or any agreement to engage in
any of the foregoing.
(c) LATOKA or any LATOKA Shareholder shall promptly notify UNIFAB
after receipt of any Acquisition Proposal or any request for nonpublic
information relating to LATOKA, LEL or any of the LEL Subsidiaries in
connection with an Acquisition Proposal or for access to any of the
premises, books or records of LATOKA, LEL or any of the LEL Subsidiaries by
any person or entity that informs either of LATOKA, LEL or any of the LEL
Subsidiaries or its Board of Directors, formally or informally, that it is
considering making, or has made, an Acquisition Proposal. Such notice to
UNIFAB shall be made orally and in writing and shall indicate in reasonable
detail the identity of the offering party and the terms and conditions of
such proposal, inquiry or contact; except such disclosure shall be made to
UNIFAB only to the extent such disclosure does not violate the fiduciary
responsibilities of the Board of Directors of LATOKA, LEL or any of the LEL
Subsidiaries, after being advised by its legal counsel, in which case
LATOKA, LEL or the LATOKA Shareholders, as the case may be, shall provide
UNIFAB with a summary of the terms and conditions of such proposal, inquiry
or contact.
Section 6.3 PRESS RELEASES. LATOKA, the LATOKA Shareholders and UNIFAB
will consult with each other before issuing, and provide each other the
opportunity to review and comment upon, any press releases or other public
statements with respect to any transactions described in this Agreement,
including the Merger, and shall not issue any such press releases or make
any such public statement prior to such consultation, except as may be
required by applicable law, court process or by obligations pursuant to a
listing agreement with NASDAQ.
Section 6.4 ACCESS TO INFORMATION AND CONFIDENTIALITY. Until the
Effective Time, LATOKA and LEL shall afford to UNIFAB and to its officers,
employees, accountants, counsel, financial advisors and other
representatives, reasonable access during normal business hours to their
respective premises, books and records and will furnish UNIFAB such other
information with respect to their respective business and properties as
UNIFAB reasonably requests.
Section 6.5 CONSULTATION AND REPORTING. During the period from the
date of this Agreement to the Closing Date, each of LATOKA, LEL and UNIFAB
will confer on a regular and frequent basis with the other to report
material operational matters and to report on the general status of ongoing
operations. Each of LATOKA, LEL and UNIFAB will promptly notify the other
of any unexpected emergency or other change in the normal course of its
business or in the operation of its properties and of any governmental
complaints, investigations, adjudicatory proceedings, or hearings (or
communications indicating that the same may be contemplated) and will keep
the other fully informed of such events and permit its representatives
prompt access to all materials prepared by or on behalf of such party or
served on them, in connection therewith.
Section 6.6 NOTIFICATION OF CHANGES. (a) Each of LATOKA and the
LATOKA Shareholders shall promptly notify UNIFAB of any event that causes
any representation or warranty given by the LATOKA Shareholders in Article 4
to become untrue. UNIFAB shall promptly notify each of LATOKA and the
LATOKA Shareholders of any event that causes any representation or warranty
given by UNIFAB and Sub in Article 5 to become untrue.
(b) LATOKA, the LATOKA Shareholders and UNIFAB shall each have
the right until the Closing to supplement or amend any of the Schedules
described in Article 4 or 5 with respect to any matter arising or discovered
after the date of this Agreement which, if existing or known on the date of
this Agreement, would have been required to be set forth or described in
such Schedules. For all purposes of this Agreement, including for purposes
of determining whether the conditions set forth in Article 8 have been
fulfilled, the Schedules shall be deemed to include only that information
contained therein on the date of this Agreement and shall be deemed to
exclude all information contained in any supplement or amendment thereto,
except to the extent that they reflect an event or condition that would be
beneficial to the other party; provided, however, that if the Closing shall
occur, then all matters disclosed pursuant to any such supplement or
amendment shall be deemed included in the Schedules at Closing (without
necessity of a written waiver or other action on the part of any party) and
to modify the applicable representations and warranties for all purposes.
Section 6.7 SUB SHAREHOLDER APPROVAL. UNIFAB, as the sole shareholder
of Sub, shall take all action necessary to effect the necessary approval by
Sub of this Agreement.
ARTICLE 7. POST-CLOSING COVENANTS
Section 7.1 RESTRICTIONS ON RESALE. UNIFAB has informed the LATOKA
Shareholders that UNIFAB intends to account for the Merger as a pooling-of-
interests under generally accepted accounting principles. UNIFAB has also
informed the LATOKA Shareholders that its ability to account for the merger
as a pooling-of-interests was a material factor considered by UNIFAB in
UNIFAB's decision to enter into this Agreement. Therefore, pursuant to
generally accepted accounting principles, prior to the publication and
dissemination by UNIFAB of consolidated financial results which include
results of the combined operations of the Surviving Company and UNIFAB for
at least 30 days on a consolidated basis following the Effective Time, the
LATOKA Shareholders shall not sell, offer to sell, or otherwise transfer or
dispose of, any of the Merger Considerations received by LATOKA
Shareholders. The certificates evidencing the Merger Consideration to be
received by the LATOKA Shareholders will bear a legend substantially in the
form set forth in Section 4.4 hereof.
Section 7.2 TAX-FREE REORGANIZATION. UNIFAB and the LATOKA
Shareholders are entering into this Agreement with the intention that the
Merger qualify as a tax-free reorganization for federal income tax purposes
and neither the LATOKA Shareholders nor UNIFAB will take any actions that
disqualify the Merger for such treatment.
Section 7.3 RELEASE AND INDEMNIFICATION OF ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇. Promptly
after Closing, and in no event later than three business days after the
Closing Date, UNIFAB shall have released those items reflected on SCHEDULE
7.3 as obligations of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇. UNIFAB hereby agrees to indemnify
and hold harmless ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ from any and all liabilities, costs and
expenses whatsoever, including without limitation reasonable attorneys fees
and costs, arising from any enforcement, threatened enforcement or attempts
to enforce the aforementioned obligations against ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
ARTICLE 8. CLOSING CONDITIONS
Section 8.1 CONDITIONS APPLICABLE TO ALL PARTIES. The obligations of
each of the parties hereto to effect the Merger and the other transactions
contemplated by this Agreement are subject to the satisfaction or waiver of
the following conditions at or prior to the Closing:
(a) NO RESTRAINING ACTION. No action, suit, or proceeding before
any court or governmental or regulatory authority will be pending, no
investigation by any governmental or regulatory authority will have been
commenced, and no action, suit or proceeding by any governmental or
regulatory authority will have been threatened, against LATOKA, LEL, any
LATOKA Shareholder, UNIFAB or any of the principals, officers, managers or
directors of LATOKA, LEL or UNIFAB seeking to restrain, prevent or change
the transactions contemplated hereby or questioning the legality or validity
of any such transactions or seeking damages in connection with any such
transactions.
(b) STATUTORY REQUIREMENTS AND REGULATORY APPROVAL. All
statutory requirements under Section 112 or the LBCL for valid consummation
of the Merger shall have been fulfilled and all appropriate orders, consents
and approvals from all regulatory agencies and other governmental
authorities whose order, consent or approval is required by law for the
consummation of the Merger shall have been received.
Section 8.2 CONDITIONS TO UNIFAB'S OBLIGATIONS. The obligations of
UNIFAB to effect the Merger and the other transactions contemplated by this
Agreement are also subject to the satisfaction or waiver of the following
conditions at or prior to the Closing:
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. All
representations and warranties of the LATOKA Shareholders in this Agreement
or in any certificate or document delivered to UNIFAB pursuant hereto as of
the date hereof (without regard to any Schedule updates furnished by the
LATOKA Shareholders after the date hereof, as contemplated by Section
6.6(b)), if made on and as of the Closing Date, would then be true and
correct in all material respects, and LATOKA and the LATOKA Shareholders
will have performed and complied in all material respects with all
agreements and conditions required by this Agreement to be performed or
complied with by them prior to or on the Closing Date.
(b) NO MATERIAL ADVERSE CHANGE. There shall not have occurred
any Material Adverse Change from the date of the LATOKA Latest Balance Sheet
or the LEL Latest Balance sheet to the Closing Date in the financial
condition, results of operations or business of LATOKA, LEL or any of the
LEL Subsidiaries, respectively.
(c) SHAREHOLDER ACTION. Each and every LATOKA Shareholder shall
have waived, in writing, with respect to shares held by the remaining LATOKA
Shareholders, LATOKA's right to purchase LATOKA Common Stock pursuant to
Article V of LATOKA's articles of incorporation.
(d) CONSENTS AND APPROVALS. All governmental and other third-
party consents and approvals, if any, necessary to permit the consummation
of the transactions contemplated by this Agreement, or to permit the
continued operation of the business of LATOKA in substantially the same
manner after the Closing Date as before, will have been received.
(e) DEBT LIMITATION. LATOKA's, LEL's and the LEL Subsidiaries'
aggregate indebtedness shall not exceed $10 million, except (i) to provide
necessary working capital for such corporations to sustain their operations,
and (ii) as consented to in writing by UNIFAB, which consent shall not be
unreasonably withheld.
(f) NO TAXABLE GAIN. UNIFAB will be reasonably satisfied that no
taxable gain will be recognized by UNIFAB, Sub or LATOKA as a result of the
Merger under any applicable Tax law or regulation.
(g) OPINION OF COUNSEL. UNIFAB shall have received from Simon,
Peragine, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP, counsel to LATOKA and to the LATOKA
Shareholders, an opinion, dated as of the Closing Date, to the effect set
forth in EXHIBIT 8.2(G).
(h) NONCOMPETITION AGREEMENT. The receipt by UNIFAB of the
Noncompetition Agreement duly executed by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
Section 8.3 CONDITIONS TO THE OBLIGATIONS OF LATOKA AND THE LATOKA
SHAREHOLDERS. The obligations of LATOKA and the LATOKA Shareholders to
effect the Merger and the other transactions contemplated by this Agreement
are also subject to the satisfaction or waiver of the following conditions
at or prior to the Closing:
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. (i) The
representations and warranties of UNIFAB and Sub in this Agreement or in any
certificate or document delivered to LATOKA and the LATOKA Shareholders
pursuant hereto as of the date hereof (without regard to any Schedule
updates furnished by UNIFAB or Sub after the date hereof, as contemplated by
Section 6.6(b)), if made on and as of the Closing Date, would then be true
and correct in all material respects and (ii) UNIFAB and Sub will have
performed and complied in all material respects with all agreements and
conditions required by this Agreement to be performed or complied with by
them prior to or on the Closing Date.
(b) NO MATERIAL ADVERSE CHANGE. There shall not have occurred
any Material Adverse Change from the date of the UNIFAB Latest Balance Sheet
to the Closing Date in the financial condition, results of operations or
business of UNIFAB.
(c) CONSENTS AND APPROVALS. All governmental and other third-
party consents and approvals, if any, necessary to permit the consummation
of the transactions contemplated by this Agreement will have been received.
(d) REGISTRATION RIGHTS AGREEMENT. The LATOKA Shareholders shall
have received an agreement substantially in the form set forth in EXHIBIT
8.3(D) pursuant to which UNIFAB will grant to the LATOKA Shareholders
certain piggy-back registration rights with respect to the shares of UNIFAB
Common Stock received by them in the Merger.
(e) OPINION OF COUNSEL. LATOKA and the LATOKA Shareholders shall
have received from Jones, Walker, Waechter, Poitevent, Carrre &
▇▇▇▇▇▇, L.L.P., counsel for UNIFAB, an opinion, dated as of the Closing
Date, to the effect set forth in EXHIBIT 8.3(E).
(f) NO TAXABLE GAIN. The LATOKA Shareholders shall be reasonably
satisfied that they will not recognize any taxable gain as a result of the
Merger under any applicable Tax law or regulation.
Section 8.4 WAIVER OF CONDITIONS. Any condition to a party's
obligation to effect the Merger hereunder may be waived by that party.
ARTICLE 9. TERMINATION
Section 9.1 TERMINATION. (a) This Agreement may be terminated and the
Merger contemplated herein abandoned at any time before the Effective Time,
whether before or after approval by the shareholders of LATOKA or UNIFAB as
follows:
(b) MUTUAL CONSENT. By the mutual consent of LATOKA and UNIFAB.
(c) MATERIAL BREACH. By the Board of Directors of either LATOKA
or UNIFAB if there has been a material breach by the other of any
representation or warranty contained in this Agreement or of any covenant
contained in this Agreement, which in either case cannot be, or has not
been, cured within 15 days after written notice of such breach is given to
the party committing such breach, provided that the right to effect such
cure shall not extend beyond the date set forth in subparagraph (c) below.
(d) ABANDONMENT. By the Board of Directors of either LATOKA or
UNIFAB if (i) all conditions to Closing required by Article 8 hereof have
not been met by or waived by the Closing Date, (ii) any such condition
cannot be met by such date and has not been waived by each party in whose
favor such condition inures, or (iii) the Merger has not occurred by such
date; provided, however, that neither LATOKA nor UNIFAB shall be entitled to
terminate this Agreement pursuant to this subparagraph (c) if such party is
in material violation of any of its representations, warranties or covenants
in this Agreement.
(e) GOVERNMENT ACTION. If any governmental authority shall have
issued an order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the Merger and such order,
decree, ruling or other action shall have become final and nonappealable.
Section 9.2 EFFECT OF TERMINATION. Upon termination of this Agreement
pursuant to this Article 10, this Agreement shall be void and of no effect,
and shall result in no obligation of or liability to any party or their
respective directors, officers, employees, agents or shareholders, unless
such termination was the result of an intentional breach of any
representation, warranty or covenant in this Agreement in which case the
party who breached the representation, warranty or covenant shall be liable
to the other party for damages, and all costs and expenses incurred in
connection with the preparation, negotiation, execution and performance of
this Agreement.
ARTICLE 10. MISCELLANEOUS
Section 10.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties set forth in Articles 4 and 5 shall survive
the Closing for a period of two years from the date hereof; provided,
however, that representations and warranties that relate to Taxes shall
survive until the relevant statute of limitations has run, and further
provided that the representations and warranties in Section 4.1 and Section
4.2 shall survive without limit as to time. Notwithstanding anything
contained herein to the contrary, in the absence of fraud the sole remedy of
UNIFAB as a result of or incident to any breach or non-fulfillment of any
representation, warranty or agreement made by LATOKA or the LATOKA
Shareholders in this Agreement or any certificate delivered by them pursuant
to this Agreement, shall be limited in the aggregate to the sum of $2
million.
Section 10.2 NOTICES. All notices hereunder must be in writing and
will be deemed to have been duly given upon receipt of hand delivery;
certified or registered mail, return receipt requested; or telecopy
transmission with confirmation of receipt:
(a) If to UNIFAB:
UNIFAB International, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
P. O. ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
Fax No. ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Jones, Walker, Waechter, Poitevent, Carrere & ▇▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax No. ▇▇▇-▇▇▇-▇▇▇▇
(b) If to LATOKA:
▇/▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No. ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Simon, Peragine, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, L.L.P.
Suite 3000
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax No. ▇▇▇-▇▇▇-▇▇▇▇
Such names and addresses may be changed by written notice to each person
listed above.
Section 10.3 GOVERNING LAW. This Agreement shall be governed by,
construed and interpreted in accordance with the laws of the State of
Louisiana, regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws thereof.
Section 10.4 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which will be deemed an original but all of which
together will constitute one and the same instrument.
Section 10.5 INTERPRETATION; SCHEDULES. (a) When a reference is made
in this Agreement to an Article, Section, Exhibit or Schedule, such
reference shall be to an Article, or Section of, or an Exhibit or Schedule
to, this Agreement unless otherwise indicated. The table of contents and
headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation."
(b) The information set forth in the Schedules to this Agreement
is qualified in its entirety by reference to the specific provisions of this
Agreement, and is not intended to constitute, and shall not be construed as
constituting, separate representations or warranties of the party to which
such Schedules relate except as and to the extent provided in this
Agreement. Inclusion of information in the Schedules shall not be construed
as an admission that such information is material for purposes of the
specific provisions of this Agreement to which such information relates.
Information included in the Schedules that is not required to be so included
under the specific provisions of this Agreement shall be deemed to be
included for informational purposes only and information of a similar nature
need not be included, at the discretion of the party providing such
information.
Section 10.6 ENTIRE AGREEMENT; SEVERABILITY. (a) This Agreement,
including the Exhibits and Schedules hereto and the documents referred to
herein, embodies the entire agreement and understanding of the parties
hereto in respect of the subject matter contained herein. This Agreement
supersedes all prior agreements and understandings (whether written or oral)
between the parties with respect to such subject matter.
(b) If any provision of this Agreement is determined to be
invalid or unenforceable, in whole or in part, it is the parties' intention
that such determination will not affect the validity or enforceability of
any other provision of this Agreement, which provisions will otherwise
remain in full force and effect.
Section 10.7 AMENDMENT AND MODIFICATION. This Agreement may be amended
or modified only by written agreement of the parties hereto.
Section 10.8 EXTENSION; WAIVER. At any time prior to the Effective
Time of the Merger, the parties may (a) extend the time for the performance
of any of the obligations or other acts of the other parties, (b) waive any
inaccuracies in the representations and warranties contained in this
Agreement or in any document delivered pursuant to this Agreement or (c)
waive compliance with any of the agreements or conditions contained in this
Agreement except for Sections 8.1(a) or (b). The failure of a party to
insist upon strict adherence to any term of this Agreement on any occasion
shall not be considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other term of
this Agreement. No waiver of any breach of this Agreement shall be held to
constitute a waiver of any other or subsequent breach. Any waiver must be
in writing.
Section 10.9 BINDING EFFECT; BENEFITS. This Agreement will inure to
the benefit of and be binding upon the parties hereto and their respective
successors and assigns. Nothing in this Agreement, express or implied, is
intended to confer on any person other than the parties hereto and their
respective successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
Section 10.10 ASSIGNABILITY. This Agreement is not assignable by any
party hereto without the prior written consent of the other parties.
Section 10.11 EXPENSES. Each of the parties hereto shall pay all of
its own expenses relating to the transactions contemplated by this
Agreement, including without limitation the fees and expenses of its own
financial, legal, accounting and tax advisors.
Section 10.12 GENDER AND CERTAIN DEFINITIONS. All words used herein,
regardless of the number and gender specifically used, shall be deemed and
construed to include any other number, singular or plural, and any other
gender, masculine, feminine or neuter, as the context requires.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
UNIFAB INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
LATUSA ACQUISITION, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
LATOKA USA, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,▇▇.
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇., Treasurer
SHAREHOLDERS OF LATOKA USA, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.