AGREEMENT AND PLAN OF
MERGER
SUPERIOR ENERGY SERVICES,
INC.,
SPN ACQUISITION SUB, INC.
WARRIOR ENERGY SERVICES
CORPORATION
Dated as of September 22,
2006
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Page
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1
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1
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8
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8
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Section 2.2 Effective Time
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8
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Section 2.3 Effects of The
Merger
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8
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Section 2.4 Certificate of Incorporation
and Bylaws
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8
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9
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Section 2.6 Further Assurances
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9
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9
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Article 3 Effect of The Merger on the
Capital Stock of The Constituent Companies; Exchange of
Certificates
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9
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Section 3.1 Effect on Capital
Stock
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9
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Section 3.2 Surviving Company to Make
Certificates Available
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11
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Section 3.3 Dividends; Transfer
Taxes
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12
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Section 3.4 No Fractional Shares
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12
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Section 3.5 Return of Exchange
Fund
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13
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Section 3.6 Further Ownership Rights in
Company Common Stock
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13
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Section 3.7 Closing of the Company’s
Transfer Books
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13
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Section 3.8 Withholding Rights
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13
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13
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Article 4 Representations and
Warranties
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14
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Section 4.1 Representations and Warranties
of The Company
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14
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Section 4.2 Representations and Warranties
of Parent and Merger Sub
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28
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Article 5 Covenants Relating to Conduct of
Business
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32
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Section 5.1 Conduct of Business of The
Company
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32
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Section 5.2 Conduct of Business of Parent
and Merger Sub
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34
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Article 6 Additional
Agreements
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35
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Section 6.1 Registration Statement;
Stockholder Approval
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35
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Section 6.2 Access to
Information
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36
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Section 6.3 Reasonable Efforts;
Notification
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37
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Section 6.4 Indemnification and
Insurance
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38
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Section 6.5 Fees and Expenses
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39
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Section 6.6 Public Announcements
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39
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Section 6.7 Agreement to Defend
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39
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Section 6.8 Benefit Matters
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39
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Section 6.9 Affiliate Agreements; Tax
Treatment
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40
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Article 7 Conditions
Precedent
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40
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Section 7.1 Conditions to Each
Party’s Obligation to Effect The Merger
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40
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Section 7.2 Conditions to Obligations of
Parent and Merger Sub
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41
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Section 7.3 Condition to Obligations of The
Company
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42
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Article 8 Termination, Amendment and
Waiver
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42
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42
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Page
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Section 8.2 Procedure for Termination,
Amendment, Extension or Waiver
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44
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Section 8.3 Effect of
Termination
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44
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44
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Section 8.5 Extension; Waiver
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44
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Article 9 Special Provisions as to Certain
Matters
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44
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Section 9.1 Takeover Defenses of The
Company
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44
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Section 9.2 No Solicitation
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44
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Section 9.3 Fee and Expense
Reimbursements
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47
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Article 10 General
Provisions
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48
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48
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48
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Section 10.3 Interpretation
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49
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Section 10.4 Counterparts
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49
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Section 10.5 Entire Agreement; No
Third-Party Beneficiaries
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49
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Section 10.6 Governing Law
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49
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49
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Section 10.8 Enforcement of the
Agreement
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50
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Section 10.9 Attorney’s
Fees
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50
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Section 10.10 Performance by Merger
Sub
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50
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Section 10.11 Severability
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50
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Schedule I — Company Disclosure
Schedule
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Schedule II — Company’s
Knowledge
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Schedule III — Parent’s
Knowledge
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Exhibit A — Form of Rule 145
Letter Agreement
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AGREEMENT AND PLAN OF
MERGER
This Agreement and
Plan of Merger (this “ Agreement ”), dated as of
September 22, 2006, is by and among Superior Energy Services,
Inc., a Delaware corporation (“ Parent ”), SPN
Acquisition Sub, Inc., a Delaware corporation and a wholly-owned
subsidiary of Parent (“ Merger Sub ”), and
Warrior Energy Services Corporation, a Delaware corporation (the
“ Company ”).
WHEREAS ,
the respective Boards of Directors of each of Parent, Merger Sub
and the Company, and Parent, as the sole stockholder of Merger Sub,
have determined that it is in the best interests of each
corporation and their respective stockholders for the Company to
merge with and into Merger Sub upon the terms and subject to the
conditions set forth in this Agreement (the “ Merger
”);
WHEREAS ,
the parties intend that the Merger will qualify as a reorganization
described in Section 368(a) of the Internal Revenue Code of 1986,
as amended, and that this Agreement constitute a plan of
reorganization; and
WHEREAS ,
Parent, Merger Sub and the Company desire to make certain
representations, warranties, covenants, and agreements in
connection with the Merger.
NOW,
THEREFORE , in consideration of the premises and the
representations, warranties, covenants and agreements herein
contained, the parties hereby agree as follows:
Section 1.1 Definitions . As used in this Agreement,
capitalized terms shall have the meanings set forth in this
Article 1.
an “
Affiliate ” of any Person means another Person that
directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, such
first person.
“
Acquisition Proposal ” is defined in
Section 9.2(a).
“
Agreement ” is defined in the first paragraph
hereof.
“
Applicable Period ” is defined in
Section 9.2(a).
“
Business Employee ” means an individual who is
employed by the Company as of the Effective Time and who becomes an
employee of Parent or a Subsidiary of Parent immediately following
the Effective Time.
“ Cash
Consideration ” means the aggregate amount payable
pursuant to Section 3.1(b)(i).
1
“ Capital
Budget ” is defined in
Section 5.1(a)(vii).
“
Certificate of Merger ” is defined in
Section 2.2.
“
Certificates ” is defined in
Section 3.2(a).
“
Claim ” means any complaint, notice, claim, demand,
action, suit or investigation or any judicial, administrative or
arbitral proceeding.
“
Closing ” is defined in Section 2.7.
“
Code ” means the Internal Revenue Code of 1986, as
amended.
“
Company ” is defined in the first paragraph
hereof.
“ Company
Balance Sheet ” means the most recent balance sheet of
the Company included in the Company Financial
Statements.
“ Company
Balance Sheet Date ” means June 30, 2006.
“ Company
Benefit Plan ” means (a) any employee welfare
benefit plan or employee pension benefit plan as defined in
Sections 3(1) and 3(2) of ERISA, respectively and (b) any
other plan, fund, program, arrangement or agreement (including any
employment agreement), whether or not in writing, to provide
deferred compensation, incentive, bonus, stock option, stock
purchase, stock award, golden parachute, severance, dependent care,
flexible benefit, cafeteria, employee assistance, scholarship,
retention incentive, noncompetition, consulting, confidentiality,
vacation, fringe or other benefits maintained by, participated in,
or contributed to by the Employer at any time during the three-year
period ending on the date of this Agreement, or with respect to
which the Employer may have any liability.
“ Company
Breach ” is defined in Section 8.1(d).
“ Company
Charter Documents ” means the Restated Certificate of
Incorporation and the Bylaws of the Company, each as amended
through the date hereof.
“ Company
Class A Option Value ” means, with respect to any
Company Class A Stock Option, an amount per share of Company
Stock subject to such Company Class A Stock Option equal to
the greater of: (a) $14.50; and (b)(i) the product of the Parent
Common Stock Closing FMV and 0.452, plus (ii) $14.50, less
(iii) the exercise price per share of such Company Stock
Option.
“ Company
Class B Option Value ” means, with respect to any
Company Class B Stock Option, an amount per share of Company
Stock subject to such Company Class B Stock Option equal to
(a) the product of the Parent Common Stock Closing FMV and
0.452, plus (b) $14.50, less (c) the exercise price per share
of such Company Stock Option.
“ Company
Class A Stock Option ” means each option to acquire
Company Shares outstanding or in effect as of the Effective Time,
excluding the Company Class B Options.
2
“ Company
Class B Stock Option ” means each option to acquire
Company Shares outstanding or in effect as of the Effective Time
with an exercise price, as adjusted through the date hereof, in
excess of $7.50.
“ Company
Disclosure Schedule ” means the disclosure schedules of
the Company attached hereto as Schedule I .
“ Company
Financial Statements ” is defined in
Section 4.1(g).
“ Company
Indemnified Parties ” is defined in
Section 6.4.
“ Company
Leased Properties ” is defined in
Section 4.1(u)(ii).
“ Company
Owned Properties ” is defined in
Section 4.1(u)(i).
“ Company
Representatives ” is defined in
Section 9.2(a).
“ Company
Restricted Stock Units ” means all restricted stock units
representing the right to acquire Company Shares outstanding or in
effect as of the Effective Time.
“ Company
SEC Documents ” means all forms and other documents
(including all amendments thereto and all exhibits and other
information incorporated therein) filed or required to be filed by
the Company with the SEC since January 1, 2004, including,
without limitation, (a) the Registration Statement on Form S-1
(Registration No. 333-131781) filed by the Company with the
SEC on February 13, 2006, as amended, (b) its Annual
Report on Form 10-K for the year ended December 31, 2005,
(c) its Quarterly Reports on Form 10-Q for the periods ended
March 31 and June 31, 2006, and (d) all proxy and
information statements relating to meetings of, or action by, the
Company’s stockholders held or taken since January 1,
2004.
“ Company
Shares ” means the issued and outstanding shares of
common stock, $0.0005 par value per share, of the
Company.
“ Company
Stockholder Approval ” is defined in
Section 4.1(l)(iv).
“ Company
Stock Options ” means the Company Class A Stock
Options and the Company Class B Stock Options.
“ Company
Stock Plan ” means any stock option, stock bonus, stock
award or stock purchase plan, program or arrangement of the Company
or any of its predecessors.
“
Confidentiality Agreement ” means that certain
Confidentiality and Standstill Agreement between the Company and
Parent dated July 31, 2006.
“
DGCL ” means the Delaware General Corporation
Law.
“
Dissenting Shares ” is defined in
Section 3.1(d).
“
Dissenting Stockholders ” is defined in
Section 3.1(d).
3
“
Effective Time ” is defined in
Section 2.2.
“
Employer ” means the Company and any member of a
controlled group or affiliated service group, as defined in
Sections 414(b), (c), (m) and (o) of the Code, or
Section 4001 of ERISA, of which the Company is a
member.
“
Environmental Claim ” means any Claim by any Person
to, against or involving the Company asserting liability or
potential liability (including without limitation, liability or
potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resource damages, property
damage, personal injury, fines or penalties) arising out of,
relating to, based on or resulting from (a) the use, presence,
disposal, discharge, emission, release or threatened release of any
Hazardous Materials at any location, (b) circumstances forming
the basis of any violation or alleged violation of any
Environmental Laws or Environmental Permits, or (c) otherwise
relating to obligations or liabilities of the Company under any
Environmental Law or in connection with Hazardous
Materials.
“
Environmental Permits ” means all Permits required
under Environmental Laws for the Company to own its properties and
conduct its operations as presently conducted.
“
Environmental Laws ” means all applicable foreign,
federal, state and local statutes, rules, regulations, ordinances,
orders, decrees and common law relating in any manner to pollution,
protection of the environment or the use, storage, treatment or
disposal of Hazardous Materials.
“
ERISA ” means the Employee Retirement Income Security
Act of 1974, as amended.
“
Exchange Act ” means the Securities Exchange Act of
1934, as amended.
“
Exchange Agent ” is defined in
Section 3.2(a).
“
Exchange Fund ” is defined in
Section 3.2(a).
“
GAAP ” means accounting principles generally accepted
in the United States.
“ GE
Loans ” means the Second Amended and Restated Credit
Agreement, dated as of December 16, 2005, among Black Warrior
Wireline Corp., as Borrower, the other credit parties from time to
time signatory thereto, as credit parties, the lenders signatory
thereto from time to time, as Lenders, and General Electric Capital
Corporation, as Administrative Agent, Agent and Lender, and GE
Capital Markets, Inc., as Lead Arranger (as amended through the
date hereof).
“
Governmental Entity ” means any court, administrative
agency or commission or other governmental authority or agency,
domestic or foreign, including local authorities.
“
Hazardous Materials ” means all hazardous or toxic
substances, wastes, materials or chemicals, petroleum (including
crude oil or any fraction thereof) and petroleum products, asbestos
and asbestos-containing materials, pollutants, contaminants,
radioactive materials and all other materials and substances
regulated pursuant to any Environmental Laws.
4
“
HIPAA ” means the Health Insurance Portability and
Accountability Act of 1996, as amended.
“ HSR
Act ” means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
“
Intellectual Property ” means any patents, patent
rights, trademarks, trademark rights, trade names, trade name
rights, service marks, service mark rights, copyrights, technology,
know-how, processes and other proprietary intellectual property
rights and computer programs.
“ IRS
” means the United States Internal Revenue
Service.
“
Knowledge ” with respect to (a) the Company means
the knowledge of the officers of the Company listed in
Schedule II hereto, after reasonable inquiry and
(b) Parent and Merger Sub means the knowledge of the officers
of Parent listed in Schedule III hereto, after
reasonable inquiry.
“
Leases ” means any executory lease having future
rental payments of more than $250,000 in the aggregate.
“
Lien ” means any lien, mortgage, pledge, security
interest, charge, Claim or other encumbrance of any kind or
nature.
“
Material Adverse Effect ” or “ Material
Adverse Change ” means, when used in connection with any
Person, any event, circumstance, condition, development or
occurrence causing, resulting in or having (or with the passage of
time likely to cause, result in or have) a material adverse effect
on the condition (financial or otherwise), business, properties,
assets or results of operations of that Person and its
Subsidiaries, taken as a whole; provided that, in no event shall
any of the following be deemed to constitute or be taken into
account in determining whether there has been a Material Adverse
Effect with respect to a Person:
(i) the
performance of obligations under this Agreement in accordance
herewith;
(ii) changes in
applicable law, rule or regulation or the application
thereof;
(iii) changes
affecting the economy or the oilfield services industry
generally;
(iv) changes in
the market price of oil or natural gas or the number of active
drilling rigs operating;
(v) changes in the
market price of the Company Shares or the Parent Common Stock;
or
(vi) the public
announcement or pending nature of the Merger.
“
Material Contract ” means any contract, lease,
indenture, agreement, arrangement or understanding to which the
Company is a party or subject or by which the Company or any of
its
5
assets are
bound that is currently in effect and (a) is of a type that
would be required to be included as an exhibit to a Registration
Statement on Form S-1 pursuant to the rules and regulations of the
SEC if such registration statement were filed by the Company,
(b) provides for future payments by or to the Company in
excess of $500,000 in the aggregate (excluding master service
agreements and other similar agreements) and that (i) is not
terminable upon 30 days’ notice or involve commitments
of six months or longer (excluding Leases) and (ii) even if so
terminable, contains no post-termination obligations, termination
penalties, buy-back obligations or similar obligations,
(c) grants a right of first refusal or first negotiation or
other preferential right to a third Person, (d) contains
covenants limiting the freedom of the Company to engage in any line
of business or compete with any Person or operate at any location,
(e) requires payment of more than $50,000 to any officer,
director or employee of the Company, (f) involves the
acquisition, disposition, sale or lease of any material property or
asset of the Company, (g) pertains to any joint venture agreement
or partnership with regard to the assets of the Company,
(h) provides any environmental indemnity or other similar
right related to the business or operations of the Company
(excluding master service agreements and other similar agreements),
(i) secures or guarantees the payment of an obligation of another
Person or (j) provides for the deferred payment of any
purchase price, including any “earn-out” or other
contingent payment arrangement.
“
Merger ” is defined in the recitals hereof.
“ Merger
Consideration ” is defined in
Section 3.1(b).
“ Merger
Sub ” is defined in the first paragraph
hereof.
“
Nasdaq ” means the Nasdaq Stock Market.
“ Notice
of Superior Proposal ” is defined in
Section 9.2(b).
“
NYSE ” means the New York Stock Exchange.
“
Parent ” is defined in the first paragraph
hereof.
“ Parent
Charter Documents ” means the Certificate of
Incorporation and Bylaws of Parent, each as amended through the
date hereof.
“ Parent
Common Stock ” means the common stock, $0.001 par value
per share, of Parent.
“ Parent
Common Stock Closing FMV ” means the average of the
closing sale prices of Parent Common Stock on the NYSE, as reported
by Bloomberg Financial Markets or such other service as the parties
may agree in writing, over the ten (10) consecutive trading
days immediately preceding the third trading day before the
Closing.
“ Parent
SEC Documents ” is defined in
Section 4.2(f).
“
Permit ” means any federal, state, provincial, local
or foreign permit, license, variance, exemption, order, franchise
and approval of a Governmental Entity.
6
“
Permitted Liens ” means (a) Liens for Taxes,
assessments or similar governmental charge not yet due and payable
or which are being contested in good faith and by appropriate
proceedings if adequate reserves with respect thereto are
maintained by the applicable party on their books in accordance
with GAAP, (b) mechanic’s, workmen’s,
landlord’s, operator’s, materialmen’s, maritime
or other similar Liens with respect to amounts not yet due and
payable or which are being contested in good faith by appropriate
proceedings with adequate reserves with respect thereto maintained
on the applicable Person’s books in accordance with GAAP and
(c) purchase money Liens incurred in connection with the
acquisition of assets permitted under Section
5.1(a)(vii).
“
Person ” means an individual, corporation,
partnership, limited liability company, association, trust,
unincorporated organization or other entity.
“
Personal Property ” means all machinery, equipment,
furniture, fixtures and other tangible or intangible personal
property used by a Person to carry on its business as presently
conducted.
“ Proxy
Statement / Prospectus ” means the proxy statement and
prospectus that are part of the Registration Statement to be mailed
to the stockholders of the Company in connection with the
Stockholder Meeting.
“
Registration Statement ” means the Registration
Statement on Form S-4 (or such successor form as shall then be
appropriate) pursuant to which the shares of Parent Common Stock to
be issued in the Merger will be registered by Parent under the
Securities Act and to be sent to the stockholders of the Company in
connection with the Stockholder Meeting, including any amendments
or supplements thereto.
“ SEC
” means the United States Securities and Exchange
Commission.
“
Securities Act ” means the Securities Act of 1933, as
amended.
“ SOX
” is defined in Section 4.1(g).
“
Stockholder Meeting ” means the special meeting of the
Company’s stockholders convened for the purpose of obtaining
Company Stockholder Approval.
a “
Subsidiary ” of any Person means any corporation,
partnership, association, joint venture, limited liability company
or other entity in which such Person owns more than 50% of the
stock or other equity interests, the holders of which are generally
entitled to vote for the election of directors or other governing
body of such other legal entity.
“
Superior Proposal ” is defined in
Section 9.2(c).
“
Surviving Company ” is defined in
Section 2.1.
“ Tax
” or “ Taxes ” shall mean (a) all
taxes of any kind, including, without limitation, those on or
measured by or referred to as federal, state, local or foreign
income, gross receipts, property, sales, use, ad valorem,
franchise, profits, license, withholding, payroll, alternative
or
7
added minimum,
employment, estimated, excise, transfer, severance, stamp,
occupation, premium, value added, or windfall profits taxes,
customs, duties or similar fees, assessments or charges of any kind
whatsoever, together with any interest and any penalties, additions
to tax or additional amounts imposed by any Governmental Entity,
(b) any transferee or secondary liability in respect of any
tax, and (c) any liability in respect of any tax as a result
of being a member of any affiliated, consolidated, combined,
unitary or similar group.
“ Tax
Return ” means any return, declaration, report,
statement, other document or information required to be filed with
any Governmental Entity with respect to Taxes and any Claims for
refunds of Taxes, including any amendments or supplements to any of
the foregoing.
“
Warrants ” is defined in
Section 4.1(c).
Section 2.1 The Merger . Upon the terms and subject to
the conditions set forth in this Agreement and in accordance with
the DGCL, the Company shall be merged with and into Merger Sub at
the Effective Time (as defined below). Following the Merger, the
separate corporate existence of the Company shall cease and Merger
Sub shall continue as the surviving corporation (the “
Surviving Company ”) and shall succeed to and assume
all the rights and obligations of the Company in accordance with
the DGCL.
Section 2.2 Effective Time . At or as soon as
practicable following the Closing, the parties shall file a
certificate of merger or other appropriate documents with the
Secretary of State of Delaware with respect to the Merger executed
in accordance with the relevant provisions of the DGCL (the “
Certificate of Merger ”). The Merger shall become
effective at such time as the Certificate of Merger is duly filed
with the Secretary of State of Delaware or at such other time as
Parent, Merger Sub and the Company shall agree should be specified
in the Certificate of Merger (the time the Merger becomes effective
being referred to herein as the “ Effective Time
”).
Section 2.3 Effects of The Merger . The Merger shall
have the effects specified in the DGCL.
Section 2.4 Certificate of Incorporation and Bylaws
.
(a) The
Certificate of Incorporation of Merger Sub, as in effect at the
Effective Time, shall be the Certificate of Incorporation of the
Surviving Company until thereafter changed or amended as provided
therein or by applicable law; provided, however, that the
Certificate of Merger shall contain a provision pursuant to which
the Certificate of Incorporation of the Surviving Corporation shall
be amended to change the name of the Surviving Corporation to
“Warrior Energy Services Corporation” effective as of
the Effective Time.
(b) The
bylaws of Merger Sub as in effect at the Effective Time shall be
the bylaws of the Surviving Company until thereafter changed or
amended as provided therein or by applicable law.
8
Section 2.5 Officers . The officers of the Company at
the Effective Time shall be the officers of the Surviving Company
and shall hold office until the earlier of their resignation or
removal or until their respective successors are duly elected and
qualified, as the case may be.
Section 2.6 Further Assurances . If at any time after
the Effective Time, the Surviving Company shall consider or be
advised that any deeds, bills of sale, assignments or assurances or
any other acts or things are necessary, desirable or proper
(a) to vest, perfect or confirm, of record or otherwise, in
the Surviving Company, its right, title or interest in, to or under
any of the rights, privileges, powers, franchises, properties or
assets of either of the constituent corporations to the Merger or
(b) otherwise to carry out the purposes of this Agreement, the
Surviving Company and its appropriate officers and directors or
their designees shall be authorized to execute and deliver, in the
name and on behalf of either of the constituent corporations to the
Merger, all such deeds, bills of sale, assignments and assurances
and do, in the name and on behalf of such constituent corporations,
all such other acts and things necessary, desirable or proper to
vest, perfect or confirm its right, title or interest in, to or
under any of the rights, privileges, powers, franchises, properties
or assets of such constituent corporation and otherwise to carry
out the purposes of this Agreement.
Section 2.7 Closing . The closing of the transactions
contemplated by this Agreement (the “ Closing ”)
shall take place at the offices of Jones, Walker, Waechter,
Poitevent, Carrère & Denègre, LLP, 201 St. Charles
Avenue, Suite 5100, New Orleans, Louisiana, at 9:00 a.m., New
Orleans time, no later than the third business day after the day on
which the last of the conditions set forth in Article 7 shall
have been fulfilled or waived (other than those conditions that by
their terms cannot be satisfied until the Closing) or at such other
time and place as Parent, Merger Sub and the Company shall
agree.
ARTICLE 3
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT COMPANIES;
EXCHANGE OF CERTIFICATES
Section 3.1 Effect on Capital Stock . As of the
Effective Time, by virtue of the Merger and without any action on
the part of the holders of any of the Company Shares, the following
shall occur:
(a)
Cancellation of Treasury Shares . All Company Shares that
are owned directly or indirectly by the Company as treasury stock
shall be canceled, and no consideration shall be delivered in
exchange therefor.
(b)
Conversion of Company Shares . Subject to the provisions of
Sections 3.1(a), 3.1(c), 3.1(d) and 3.4, each Company Share
issued and outstanding immediately prior to the Effective Time
(excluding Company Shares cancelled pursuant to
Section 3.1(a)) shall be converted into the right to receive
(collectively, the “ Merger Consideration
”):
(ii) .452 shares
of Parent Common Stock.
9
All such
Company Shares, when so converted, shall no longer be outstanding
and shall automatically be canceled and retired and each holder of
a Certificate representing any such shares shall cease to have any
rights with respect thereto, except the right to receive certain
dividends and other distributions as contemplated by
Section 3.3, the Cash Consideration, shares of Parent Common
Stock and any cash, without interest, in lieu of fractional shares
to be issued or paid in consideration therefor upon the surrender
of such Certificate in accordance with Section 3.2.
(c)
Treatment of Company Stock Options .
(i) Prior
to the Effective Time, the Company shall cause each Company
Class A Stock Option to be vested and shall cancel each such
Company Class A Stock Option immediately prior to the
Effective Time for consideration payable by Parent at or as
promptly as practicable following the Closing equal to the Company
Class A Option Value, and all such options shall terminate
immediately prior to the Effective Time. The Company Class A
Option Value with respect to each Company Stock Option shall be
paid as follows: $14.50 of the Company Class A Option Value
shall be paid in cash and the remainder of the Company Class A
Option Value shall be paid in shares of Parent Common Stock. The
number of shares of Parent Common Stock to be paid in respect of
the Company Class A Stock Options shall be determined by
dividing (i) the amount of the Class A Option Value to be
paid in the form of Parent Common Stock by (ii) the Parent
Common Stock Closing FMV.
(ii) Prior
to the Effective Time, the Company shall cause each Company
Class B Stock Option to be vested and shall cancel each such
Company Class B Stock Option immediately prior to the
Effective Time for consideration payable by Parent at or as
promptly as practicable following the Closing equal to the Company
Class B Option Value, and all such options shall terminate
immediately prior to the Effective Time. The Company Class B
Option Value with respect to each Company Stock Option shall be
paid in shares of Parent Common Stock. The number of shares of
Parent Common Stock to be paid in respect of the Company
Class B Stock Options shall be determined by dividing
(i) the amount of the Class B Option Value to be paid by
(ii) the Parent Common Stock Closing FMV.
(iii) The
Board of Directors of the Company (or an appropriate committee
thereof) shall adopt such resolutions or take such other actions as
may be required prior to the Effective Time to cause all
restrictions on the then outstanding Company Restricted Stock Units
to lapse as of immediately prior to the Effective Time and to cause
the Company Shares issuable upon vesting of the outstanding Company
Restricted Stock Units to be issued immediately prior to the
Effective Time. Each holder of Company Restricted Stock Units shall
be treated as a holder of Company Shares issued and outstanding as
of immediately prior to the Effective Time.
(iv)
As of the Effective Time, except as provided in this
Section 3.1, all rights under any Company Stock Option or
Company Restricted Stock Unit and any provision of any Company
Stock Plans providing for the issuance or grant of any other
interest in respect of the capital stock of the Company shall be
cancelled. The Company shall ensure that, as of and after the
Effective Time, except as provided in this Section 3.1, no
Person shall have any rights under any Company Stock
Plan.
10
(v) Any
amounts payable pursuant to this Section 3.1(c) shall be
subject to any required withholding of taxes and shall be paid
without interest.
(d)
Dissenting Shares . Notwithstanding anything in this
Agreement to the contrary, Company Shares that are outstanding
immediately prior to the Effective Time and that are held by
dissenting stockholders of the Company (the “ Dissenting
Stockholders ”) who shall have perfected
dissenters’ rights in accordance with Section 262 of the
DGCL (the “ Dissenting Shares ”) shall not be
converted into or represent the right to receive the Merger
Consideration (but instead shall be converted into the right to
receive payment from the Surviving Company with respect to such
Dissenting Shares in accordance with the DGCL), unless and until
such Dissenting Stockholder shall have failed to perfect or shall
have effectively withdrawn or lost such Dissenting
Stockholder’s rights to appraisal under the DGCL. If any such
Dissenting Stockholder shall have failed to perfect or shall have
effectively withdrawn or lost such holder’s rights to
appraisal of such Company Shares under the DGCL, such Dissenting
Stockholder’s Company Shares shall thereupon be deemed to
have been converted into and to have become exchangeable for, at
the Effective Time, the right to receive, upon surrender as
provided above, the Merger Consideration for the Certificate or
Certificates that formerly evidenced such Company Shares. The
Company shall, prior to the Effective Time, use all reasonable
efforts to give Parent and Merger Sub prompt notice of any written
demands for payment of the fair value of any Company Shares,
withdrawals of such demands, and any other instruments served on
the Company pursuant to the DGCL received by the Company relating
to stockholders’ rights of appraisal. Except with the prior
written consent of Parent and Merger Sub, the Company shall not
voluntarily make any payment with respect to any demands for
appraisal, or settle or offer to settle any such
demands.
Section 3.2 Surviving Company to Make Certificates
Available .
(a)
Exchange of Certificates . The Company and Parent shall
authorize American Stock Transfer & Trust Company (or such
other Person or Persons as shall be reasonably acceptable to the
Company and Parent) to act as exchange agent hereunder (the “
Exchange Agent ”). As soon as practicable after the
Effective Time, the Surviving Company shall deposit with the
Exchange Agent for the benefit of the holders of certificates which
immediately prior to the Effective Time represented Company Shares
(the “ Certificates ”), the Cash Consideration
and certificates representing the shares of Parent Common Stock
(such Cash Consideration and shares of Parent Common Stock,
together with any dividends or distributions with respect thereto
payable as provided in Section 3.3, being hereinafter referred
to as the “ Exchange Fund ”) issuable pursuant
to Section 3.1(c) in exchange for outstanding Company
Shares.
(b)
Exchange Procedures . Promptly after the Effective Time, the
Exchange Agent shall mail or deliver to each holder of record of a
Certificate whose shares were converted pursuant to
Section 3.1 into shares of Parent Common Stock a letter of
transmittal (which shall specify that delivery shall be effected,
and risk of loss and title to the Certificates shall pass, only
upon actual and proper delivery of the Certificates to the Exchange
Agent and shall contain instructions for use in effecting the
surrender of the Certificates in exchange for the Cash
Consideration and certificates representing shares of Parent Common
Stock and shall be in such form and contain such other provisions
as the Company and Parent may reasonably specify).
11
Upon surrender
of a Certificate for cancellation to the Exchange Agent, together
with such letter of transmittal, duly executed, the holder of such
Certificate shall be entitled to receive in exchange therefor the
Cash Consideration and a certificate representing that number of
whole shares of Parent Common Stock which such holder has the right
to receive pursuant to this Article 3, and the Certificate so
surrendered shall forthwith be canceled. Until surrendered as
contemplated by this Section 3.2, each Certificate shall, at
and after the Effective Time, be deemed to represent only the right
to receive, upon surrender of such Certificate, the Cash
Consideration, the certificate representing the appropriate number
of shares of Parent Common Stock, cash in lieu of fractional
shares, if any, as provided in Section 3.4 and certain
dividends and other distributions as contemplated by Section
3.3.
Section 3.3 Dividends; Transfer Taxes . No dividends or
other distributions that may be declared on or after the Effective
Time on Parent Common Stock or are payable to the holders of record
thereof on or after the Effective Time will be paid to Persons
entitled by reason of the Merger to receive certificates
representing Parent Common Stock until such Persons surrender their
Certificates, as provided in Section 3.2, and no Cash
Consideration or cash payment in lieu of fractional shares shall be
paid to any such holder pursuant to Section 3.4 until such
holder of such Certificate shall so surrender such Certificate.
Subject to the effect of applicable law, there shall be paid to the
record holder of the certificates representing such Parent Common
Stock (a) at the time of such surrender or as promptly as
practicable thereafter, the amount of any dividends or other
distributions theretofore paid with respect to whole shares of such
Parent Common Stock and having a record date on or after the
Effective Time and a payment date prior to such surrender and
(b) at the appropriate payment date or as promptly as
practicable thereafter, the amount of dividends or other
distributions payable with respect to whole shares of Parent Common
Stock and having a record date on or after the Effective Time but
prior to surrender and a payment date subsequent to surrender. In
no event shall the Person entitled to receive such dividends or
other distributions be entitled to receive interest on such
dividends or other distributions. If any cash or certificate
representing shares of Parent Common Stock is to be paid to or
issued in a name other than that in which the Certificate
surrendered in exchange therefor is registered, it shall be a
condition of such exchange that the Certificate so surrendered
shall be properly endorsed and otherwise in proper form for
transfer and that the Person requesting such exchange shall pay to
the Exchange Agent any transfer or other taxes required by reason
of the issuance of certificates for such shares of Parent Common
Stock in a name other than that of the registered holder of the
Certificate surrendered, or shall establish to the satisfaction of
the Exchange Agent that such tax has been paid or is not
applicable.
Section 3.4 No Fractional Shares . No certificates
representing fractional shares of Parent Common Stock shall be
issued upon the surrender for exchange of Certificates pursuant to
this Article 3, and no Parent dividend or other distribution
or stock split or combination shall relate to any fractional
security, and such fractional interests shall not entitle the owner
thereof to vote or to any rights of a security holder of Parent. In
lieu of any such fractional shares, each holder of Company Shares
who would otherwise have been entitled to receive a fraction of a
share of Parent Common Stock (after taking into account all Company
Shares then held of record by such holder) shall receive cash
(without interest) in an amount equal to the product of such
fractional part of a share and the average closing sale price of
Parent Common Stock on the New York Stock Exchange, as reported by
Bloomberg Financial Markets or such other service as the
12
parties may
agree in writing, for the ten (10) consecutive trading days
immediately preceding the third trading day before the
Closing.
Section 3.5 Return of Exchange Fund . Any portion of
the Exchange Fund that remains undistributed to the former
stockholders of the Company for one year after the Effective Time
shall be delivered to Parent, upon demand of Parent, and any former
stockholders of the Company who have not theretofore complied with
this Article 3 shall thereafter look only to Parent for
payment of their claim for Parent Common Stock, Cash Consideration,
any cash in lieu of fractional shares of Parent Common Stock and
any dividends or distributions with respect to Parent Common Stock.
None of the Company, Parent, Merger Sub or the Surviving Company
shall be liable to any holder of Company Shares for shares (or
dividends or distributions with respect thereto) or cash in lieu of
fractional shares of Parent Common Stock delivered to a public
official pursuant to any applicable abandoned property, escheat or
similar law.
Section 3.6 Further Ownership Rights in Company Common
Stock . All shares of Parent Common Stock issued upon the
surrender of Certificates for exchange in accordance with the terms
hereof (including any cash paid pursuant to Sections 3.3 or
3.4) shall be deemed to have been issued in full satisfaction of
all rights pertaining to the Company Shares, subject, however, to
the Surviving Company’s obligation to pay any dividends or
make any other distribution with a record date prior to the
Effective Time which may have been declared or made by the Company
on Company Shares in accordance with the terms of this
Agreement.
Section 3.7 Closing of the Company’s Transfer
Books . At the Effective Time, the stock transfer books of the
Company shall be closed and no transfer of Company Shares shall
thereafter be made. If, after the Effective Time, Certificates are
presented to the Surviving Company, they shall be canceled and
exchanged as provided in this Article 3.
Section 3.8 Withholding Rights . Parent and Surviving
Company shall be entitled to deduct and withhold from the
consideration otherwise payable to any holder of the Company
Shares, Company Stock Options or Company Restricted Stock Units
pursuant to this Agreement such amounts as may be required to be
deducted and withheld with respect to the making of such payment
under the Code, or under any provision of Federal, state or local
tax law. To the extent amounts are so withheld and paid over to the
appropriate taxing authority by Parent, such withheld amounts shall
be treated for all purposes of this Agreement as having been paid
to the holders of Company Shares, Company Stock Options or Company
Restricted Stock Units in respect of which such deduction and
withholding was made by Parent.
Section 3.9 Adjustments .
(a)
Stock Split, Stock Dividend, Recapitalization .
Notwithstanding anything contained in this Article III to the
contrary (but without limiting the covenants set forth in
Article V hereof), if between the date of this Agreement and
the Effective Time, the outstanding shares of Parent Common Stock
shall be changed into a different number of shares or a different
class by reason of the occurrence or record date of any stock
dividend, subdivision, reclassification, recapitalization, stock
split, combination, exchange of shares or similar transaction, then
the exchange ratio provided for in Section 3.1(b)(ii), the
Company Class A Option Value and the Company Class B
Option Value shall be appropriately and proportionately
13
adjusted to
reflect such stock dividend, subdivision, reclassification,
recapitalization, stock split, combination, exchange of shares or
similar transaction.
(b)
Merger . In the event that, prior to the Effective Time,
Parent shall consummate a merger, consolidation, share exchange or
other reorganization, or any other transaction pursuant to which
the holders of Parent Common Stock receive or become entitled to
receive securities, cash or other assets or any combination
thereof, each holder of Company Shares as of immediately prior to
the Effective Time shall be entitled to receive at the Effective
Time for each Company Share, the amount of cash included in the
Merger Consideration plus the amount of securities, cash or other
assets that such holder would have been entitled to receive or
become entitled to receive had such holder been the record holder
of the number of shares of Parent Common Stock issuable to such
holder of Company Shares pursuant to Section 3.1(b) had the
Effective Time occurred immediately prior to the consummation of
such transaction.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.1 Representations and Warranties of The
Company . The Company represents and warrants to Parent and
Merger Sub as follows:
(a)
Organization, Standing and Power . The Company is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has the requisite
corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted. The
Company is duly qualified to do business and is in good standing in
each jurisdiction in which the operation of its business or the
ownership or leasing of its properties makes such qualification
necessary, except to the extent the failure of the Company to be so
qualified and in good standing would not, or could not reasonably
be expected to, have a Material Adverse Effect on the
Company.
(b)
Subsidiaries . The Company has no Subsidiaries and does not
own, directly or indirectly, any capital stock, equity interest or
other ownership interest in any other Person.
(c)
Capital Structure . As of the date hereof, the authorized
capital stock of the Company consists of 35,000,000 Company Shares,
of which (i) 11,076,265 shares are issued and outstanding, and
2,500,000 shares of preferred stock, $0.0005 par value per share,
of which none have been issued or are outstanding,
(ii) 664,074 Company Shares are reserved for issuance upon the
exercise of outstanding Company Stock Options, (iii) 33,500
Company Shares are reserved for issuance upon the exercise of
outstanding warrants to purchase Company Shares (the “
Warrants ”) and (iv) 347,929 Company Shares are
reserved for issuance upon the vesting of outstanding Company
Restricted Stock Units. As of the Effective Time, the Warrants
shall have been repurchased by the Company, terminated or amended
to the reasonable satisfaction of Parent. The Company Shares are
listed on Nasdaq. Section 4.1(c) of the Company Disclosure
Schedule sets forth an accurate and complete list and brief
description (including, if applicable, the exercise price) of all
outstanding or authorized Warrants, Company Stock Options and
Company Restricted Stock Units. Except for the Warrants, Company
Stock Options or Company Restricted Stock Units or except as
otherwise set forth in Section 4.1(c) of the
14
Company
Disclosure Schedule, there are no other securities, options,
warrants, calls, rights, commitments, preemptive rights,
agreements, arrangements or undertakings of any kind to which the
Company is a party, or by which the Company is bound, obligating
the Company to issue, deliver or sell, or cause to be issued,
delivered or sold, any shares of capital stock or other equity or
voting securities of, or other ownership interests in, the Company
or obligating the Company to issue, grant, extend or enter into any
such security, option, warrant, call, right, commitment, agreement,
arrangement or undertaking. All outstanding Company Shares are, and
all Company Shares issuable upon the exercise of any outstanding
Company Stock Options or Warrants or vesting of Company Restricted
Stock Units will be when issued in accordance with their terms
thereunder, validly issued, fully paid and nonassessable and not
subject to preemptive rights. Except as set forth in
Section 4.1(c) of the Company Disclosure Schedule, no capital
stock has been issued by the Company since the Company Balance
Sheet Date, other than Company Shares issued pursuant to the
exercise of Warrants or Company Stock Options or vesting of Company
Restricted Stock Units outstanding on or prior to such date in
accordance with their terms. There are not as of the date of this
Agreement any stockholder agreements, voting trusts or other
agreements or understandings to which the Company is a party or by
which it is bound relating to the voting of any shares of the
capital stock of the Company, and there will be no such agreements
at the Effective Time.
(d)
Authority . The Company has the requisite corporate power
and authority to enter into this Agreement and, subject to
obtaining Company Stockholder Approval, to consummate the Merger
and the other transactions contemplated hereby. The execution and
delivery of this Agreement by the Company and the consummation by
the Company of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of the
Company, subject to obtaining Company Stockholder Approval. This
Agreement has been duly and validly executed and delivered by the
Company and constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its
terms, except to the extent that (i) such enforcement may be
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other similar laws or judicial
decisions now or hereafter in effect relating to creditors’
rights generally and (ii) general principles of equity,
whether considered in a proceeding at law or in equity.
(e)
Non-Contravention . Except as set forth in
Section 4.1(e) of the Company Disclosure Schedule, and except
for the GE Loans, the execution and delivery of this Agreement by
the Company does not, and the consummation of the transactions
contemplated hereby and compliance with the provisions hereof by
the Company will not, conflict with, or result in any violation of,
or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or
acceleration of or “put” right with respect to any
obligation or to loss of a material benefit under, or result in the
creation of any Lien on, any of the properties or assets of the
Company under, any provision of (i) the Company Charter
Documents, (ii) any Material Contract or license or permit
applicable to the Company or any of its properties or assets or
(iii) any judgment, order, decree, statute, law, ordinance, rule or
regulation or arbitration award applicable to the Company or any of
its properties or assets, except for such violations, conflicts,
losses, defaults, rights, accelerations or Liens that do not or
could not reasonably expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company.
15
(f)
Governmental Approvals . Except as set forth in
Section 4.1(f) of the Company Disclosure Schedule, no consent,
approval, order or authorization of, or registration, declaration
or filing with, any Governmental Entity is required by or with
respect to the Company in connection with the execution and
delivery of this Agreement by the Company or the consummation by
the Company of the transactions contemplated hereby, except for
(i) the filing of a premerger notification and report form by
the Company under the HSR Act, (ii) the filing with the SEC of
such reports under Section 13 or 14 of the Exchange Act as may
be required in connection with this Agreement and the transactions
contemplated hereby, (iii) the filing of the Certificate of
Merger with the Secretary of State of Delaware with respect to the
Merger as provided in the DGCL and appropriate documents with the
relevant authorities of other jurisdictions in which the Company is
qualified to do business, (iv) filings or notices required by
the rules of Nasdaq and (v) those consents, approvals, orders,
authorizations, registrations, declarations or filings which, if
not obtained or made, do not or could not reasonably be expected to
(A) impair the ability of the Company to perform its
obligations hereunder or prevent or delay the consummation of the
transactions contemplated by this Agreement or,
(B) individually or in the aggregate, have a Material Adverse
Effect on the Company.
(g)
Company SEC Documents .
(i) As
of their initial effective dates (in the case of registration
statements filed under the Securities Act) or filing dates (in the
case of all other Company SEC Documents), the Company SEC Documents
complied in all material respects with the requirements of the
Securities Act and the Exchange Act (as applicable) and the rules
and regulations of the SEC promulgated thereunder applicable to the
Company SEC Documents, and none of the Company SEC Documents
contained any untrue statement of a material fact or omitted to
state a 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. The financial
statements of the Company included in the Company SEC Documents
(the “ Company Financial Statements ”) comply in
all material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with GAAP applied on a
consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present in all material
respects the financial position of the Company as of the dates
thereof and the results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited statements,
to normal year-end audit adjustments and other adjustments
described therein). Management of the Company has established and
maintains disclosure controls and procedures (as defined in
Rule 13a-15(e) under the Exchange Act) that are effective to
ensure that all material information concerning the Company is made
known on a timely basis to the individuals responsible for
preparing the Company’s SEC filings and other public
disclosure by the Company and that are effective to ensure that the
Company is otherwise in compliance in all material respects with
the applicable provisions of the Sarbanes-Oxley Act of 2002, as
amended (“ SOX ”) and the applicable listing
standards of Nasdaq. Except as set forth in Section 4.1(g) of
the Company Disclosure Schedule, the management of the Company
(i) has established and maintains a system of internal
controls over financial reporting (as defined in
Rule 13a-15(f) under the Exchange Act) designed to provide
reasonable assurance regarding the reliability of the
Company’s financial reporting and the preparation of the
Company’s financial statements for external
16
purposes in
accordance with GAAP and (ii) has disclosed, based on its most
recent evaluation of its internal controls over financial
reporting, to the Company’s outside auditors (A) all
significant deficiencies and material weaknesses in the design or
operation of its internal controls over financial reporting which
are reasonably likely to adversely affect the Company’s
ability to record, process, summarize and report financial
information and (B) any fraud, whether or not material, that
involves management or other employees who have a significant role
in the Company’s internal control over financial reporting.
The Company has disclosed to Parent in writing prior to the date
hereof all disclosures described in clauses (A) and
(B) of the immediately preceding sentence.
(ii) The
chief executive officer and chief financial officer of the Company
have made all certifications (without qualification or exception to
the matters certified) required by, and would be able to make such
certifications (without qualification or exception to the matters
certified) as of the date hereof and as of the date of the Closing
as if required to be made as of such dates pursuant to, SOX and any
related rules and regulations promulgated by the SEC, and the
statements contained in any such certifications are true and
correct. Neither the Company nor its officers have received any
notice from any Governmental Entity questioning or challenging the
accuracy, completeness, form or manner of filing or submission of
such certifications.
(h)
Accounts Receivable . All of the accounts receivable
reflected on the Company Balance Sheet or created thereafter
(i) have arisen only from bona fide transactions in the
ordinary course of business, (ii) represent valid obligations
owing to the Company thereof, (iii) except as may be reserved
against in the Company Financial Statements (or the Company’s
accounting records as such reserves may be adjusted consistent with
past practice for operations and transactions through the Effective
Time) or set forth on Schedule 4.1(h) of the Company
Disclosure Schedule, are subject to no material valid counterclaims
or setoffs, and (iv) have been accrued in accordance with
GAAP. Section 4.1(h) of the Company Disclosure Schedule sets
forth a summary listing of all accounts receivable of the Company
as of the date specified therein and reflects receivables aged less
than 90 days from the date of invoice as a group and sets
forth all receivables aged more than 90 days individually by
customer, invoice and amount.
(i)
Absence of Certain Changes or Events . Except as set forth
in Section 4.1(i) of the Company Disclosure Schedule, since
the Company Balance Sheet Date, the Company has conducted its
business only in the ordinary course consistent with past practice
and as permitted by Article 5, and there has not been, except as
permitted pursuant to Section 5.1:
(i) any
event, occurrence, circumstance or development that has had, or
could reasonably be expected to have, a Material Adverse Effect
with respect to the Company;
(ii) any
declaration, setting aside or payment of any dividend (whether in
cash, stock or property) with respect to any of the Company’s
capital stock or any repurchase, redemption or other acquisition by
the Company of any amount of outstanding shares of capital stock or
other equity securities of, or other ownership interests in, the
Company;
(iii) any
amendment of any term of any outstanding security of the Company
that would increase the obligations of the Company under such
security;
17
(iv) (A) any
incurrence or assumption by the Company of any indebtedness for
borrowed money, or (B) any guaranty, endorsement or other
incurrence or assumption of liability, whether directly,
contingently or otherwise, by the Company for the obligations of
any other Person;
(v) any
creation or assumption by the Company of any Lien on any material
asset of the Company, other than Permitted Liens;
(vi) any
making of any loan, advance or capital contribution to or
investment in any Person by the Company other than loans, advances,
capital contributions or investments, in each case not exceeding
$50,000 or to the Company;
(vii) (A) any
Material Contract entered into by the Company on or prior to the
date hereof, or (B) any (i) modification, amendment,
assignment, in a manner adverse to the Company, or (ii) termination
or relinquishment by the Company, of any Material Contract or other
material contract, license or other right (including any insurance
policy naming it as a beneficiary or loss payable payee), in each
case except with respect to the execution and delivery of this
Agreement;
(viii) (A) any
granting by the Company to any director, officer or key employee of
the Company of any increase in compensation, (B) any granting
by the Company to any such director, officer or key employee of any
increase in severance or termination pay, except as was required
under employment, severance or termination agreements in effect as
of the Company Balance Sheet Date, or (C) any entry by the
Company into any employment, severance or termination agreement
with any such director, officer or key employee;
(ix) any
damage, destruction or loss suffered or incurred by the Company not
covered by insurance that has or reasonably could be expected to
exceed $500,000;
(x) any
change in accounting methods, principles or practices by the
Company materially affecting its assets, liabilities or business,
except insofar as may have been required by a change in GAAP;
or
(xi) any
event which, if it had taken place following the execution of this
Agreement, would not have been permitted by
Section 5.1.
(j)
No Undisclosed Liabilities . As of the date hereof, except
(a) as specifically disclosed or provided for in
Section 4.1(j) of the Company Disclosure Schedules or in the
Company Balance Sheet and (b) for liabilities and obligations
incurred in the ordinary course of business consistent with past
practices since the Company Balance Sheet Date, the Company has not
incurred any liabilities or obligations of any nature (contingent
or otherwise) that would or could reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect on
the Company.
(k)
No Default . The Company is not in default or violation (and
no event has occurred which, with notice or the lapse of time or
both, would constitute such a default or violation) of any term,
condition or provision of (i) the Company Charter Documents,
or (ii) any order, writ, injunction, decree, statute, rule or
regulation applicable to the Company except in the
18
case of clause
(ii) for such defaults or violations that do not or could not
reasonably expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company.
(l)
State Takeover Statutes; Corporate Approvals .
(i) Neither
this Agreement, the Merger nor any of the other transactions
contemplated hereby is subject to the requirements of any
moratorium, control share, fair price, affiliate transaction,
business combination or other anti-takeover laws and regulations of
any jurisdiction, including without limitation, Section 203 of
the DGCL.
(ii) The
Board of Directors of the Company, at a meeting duly called and
held, has unanimously (i) determined that this Agreement and
the transactions contemplated hereby, including the Merger, are
fair to and in the best interests of the stockholders of the
Company, (ii) approved this Agreement and the transactions
contemplated hereby, including the Merger, and
(iii) recommended adoption and approval of this Agreement and
the Merger by the stockholders of the Company and the transactions
contemplated thereby.
(iii) The
Company’s Board of Directors has received a written opinion
from Simmons & Company International to the effect that, as of
the date of such opinion, the consideration to be received in the
Merger by the holders of Company Shares is fair, from a financial
point of view, to the holders of the Company Shares. True and
complete copies of such opinion have been given to
Parent.
(iv) Except
for the adoption of the Merger by holders of at least a majority of
the outstanding Company Shares (the “ Company Stockholder
Approval ”), no consent or other vote of the stockholders
of the Company is required by applicable law, the Company Charter
Documents or otherwise in order for the Company to consummate the
Merger and the other transactions contemplated hereby.
(m)
Litigation . Except as set forth in Section 4.1(m) of
the Company Disclosure Schedule, (i) there are no pending, or
to the Company’s Knowledge, threatened, Claims against or
involving the Company, (ii) neither the Company nor any of its
assets or properties is subject to any order, writ, judgment,
award, injunction or decree of any Governmental Entity and
(iii) there is no judgment, decree, injunction, rule or order
of any Governmental Entity or arbitrator outstanding against the
Company, in each case, which could reasonably be expected to
prevent, hinder or materially delay the ability of the Company to
consummate the transactions contemplated by this
Agreement.
(n)
Employee Benefit Matters .
(i) Section 4.1(n)(i)
of the Company Disclosure Schedule contains a complete and correct
list of all Company Benefit Plans. With respect to each Company
Benefit Plan, to the extent applicable: (A) the plan is in
compliance in all material respects with the Code, ERISA, HIPAA,
all other applicable laws, and the regulations thereunder,
including all reporting and disclosure requirements of Part 1
of Subtitle B of Title I of ERISA; (B) the appropriate
Form 5500s have been timely filed; (C) there has been no
transaction described in Section 406 or Section 407 of
ERISA or Section 4975 of the Code unless exempt under
Section 408 of ERISA or Section 4975 of the Code, as
applicable; (D) there is no issue pending nor any
19
issue resolved
adversely to the Employer which may subject the Employer to the
payment of a penalty, interest, Tax or other amount, (E) each
Company Benefit Plan can be unilaterally terminated or amended by
the Employer; (F) all contributions or other amounts payable
by the Employer as of the Effective Time with respect to each
Company Benefit Plan have either been paid or accrued in the most
recent Company Financial Statements; and (G) there are no
pending or, to the Company’s Knowledge, threatened or
anticipated Claims (other than routine Claims for benefits), by, on
behalf of, against or relating to any Company Benefit Plan or their
related trusts, the plan sponsor, the plan administrator, or any
fiduciary of such plan.
(ii) With
respect to each Company Benefit Plan, the Company has made
available to Parent true and correct copies of each of the
following documents, to the extent applicable: (A) the Company
Benefit Plan document(s), including but not limited to, trust
agreements, insurance policies, service agreements and formal and
informal amendments to each (or if the Company Benefit Plan is not
a written agreement, a description thereof); (B) the most
recent annual Form 5500 reports filed with the IRS, with all
required attachments; (C) all “top-hat” statements
filed with the Department of Labor pursuant to Department of Labor
Regulation Section 2520.104-23; (D) the most recent IRS
opinion letter or determination letter; (E) all notices the
IRS, Department of Labor, or any other governmental agency or
entity issued to the Company within the four (4) years
preceding the date of this Agreement; and (F) the most recent
summary plan description and summaries of material modifications
thereof.
(iii) Since
September 1, 2000, the Employer has not maintained, had any
obligation to contribute to, or incurred any liability with respect
to a pension plan that is or was subject to Title IV of ERISA or
Section 412 of the Code or made or been obligated to make or
reimbursed or been obligated to reimburse another employer for,
contributions to any multiemployer plan (as defined in
Section 3(37) of ERISA). During the last six years, the
Employer has not maintained, had an obligation to contribute to or
in
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