Exhibit 10.8.2
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ARRANGEMENT AGREEMENT
THIS ARRANGEMENT AGREEMENT dated for reference the 13th day
of November, 1996.
BETWEEN:
INDUSTRA SERVICE CORPORATION,
a company incorporated under the laws of
the Province of British Columbia,
(hereinafter referred to as "Industra"),
OF THE FIRST PART;
-AND-
519742 B.C. LTD.,
a company incorporated under the laws of
the Province of British Columbia,
(hereinafter referred to as "519742"),
OF THE SECOND PART;
-AND-
AMERICAN ECO CORPORATION,
a corporation incorporated under the laws of
the Province of Ontario,
(hereinafter called "American Eco"),
OF THE THIRD PART.
WHEREAS together with the Industra Common Shares acquired
pursuant to the Offer on the basis of an exchange of 0.425
American Eco Common Shares for each Industra Common Share,
American ECO owns 3,477,604 Industra Common Shares;
AND WHEREAS the Offer contemplated that American Eco might
complete a subsequent transaction pursuant to which Industra
would become a wholly-owned subsidiary of American Eco;
AND WHEREAS 519742 is a wholly-owned subsidiary of American
Eco incorporated for the sole purpose of effecting the
Arrangement;
AND WHEREAS Industra intends to propose to its shareholders
an arrangement under section 276 of the Act, in accordance with
the terms of the Arrangement;
AND WHEREAS the parties hereto wish to enter into this
Agreement to set forth their respective obligations with respect
to the Arrangement;
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in
consideration of the premises and the respective covenants and
agreements herein contained, the parties hereto covenant and
agree as follows:
ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS
In this Agreement, unless the subject matter or context is
inconsistent therewith, the following terms and phrases shall
have the following meanings respectively:
"Act" means the British Columbia Company Act, R.S.B.C. 1979,
c.59, as amended from time to time;
"Agreement" means this arrangement agreement;
"Amalgamated Company" refers to Industra after completion of
the Arrangement;
"Amalgamating Companies" means Industra and 519742;
"American Eco Common Shares" means the common shares in the
capital of American Eco;
"American Eco Exchange Rights" means rights to exchange
shares of certain subsidiaries of Industra for American Eco
Common Shares to be issued to holders of Industra Exchange Rights
upon completion of the Arrangement;
"American Eco Options" means options of American Eco to be
issued to holders of Industra Options upon completion of the
Arrangement;
"Arrangement" means the arrangement under the provisions of
section 276 of the Act, on the terms and conditions set forth in
Schedule "A" hereto, or any amendment or variation thereto made
in accordance with Section 8.3 or 8.4 hereof;
"Business Day" means a day which is not a Saturday, a Sunday
or a statutory holiday within the meaning of the Interpretation
Act (Canada), as amended;
"Court" means the Supreme Court of British Columbia;
"Effective Date" means the date on which a certified copy of
the Final Order has been accepted for filing by the Registrar,
"Final Order" means the order of the Court approving the
Arrangement, following the application therefor contemplated by
Section 4.4 hereof;
"Industra Exchange Rights" means rights to exchange shares
of certain subsidiaries of Industra for Industra Shares;
"Industra Information Circular" means the management
information circular of Industra together with all schedules
thereto to be prepared in connection with the Industra Special
Meeting,
"Industra Options" means options and rights to acquire
shares of Industra as at the Effective Date;
"Industra Shares" means the issued and outstanding common
shares in the capital of Industra;
"Industra Shareholders" means collectively the holders of
the Industra Shares;
"Industra Special Meeting" means the special meeting of the
Industra Shareholders to be held to consider and, if deemed
advisable, among other things, to approve the Arrangement,
including any adjournments thereof;
"Interim Order" means the order of the Court providing for
among other things, the calling of the Industra Special Meeting;
"Offer means the offer made on June 28, 1996 by American Eco
to purchase all of the issued and outstanding Industra Shares;
and
"Plan of Arrangement" means the Plan of Arrangement appended
as Schedule "A" hereto;
"Registrar" means the Registrar of Companies under the Act.
1.2 CURRENCY
All sums of money which are referred to in this Agreement
are expressed in lawful money of Canada unless otherwise
specified.
1.3 INTERPRETATION NOT AFFECTED BY HEADING, ETC.
The division of this Agreement into articles, sections,
paragraphs and other portions and the insertion of headings are
for convenience of reference only and shall not affect the
construction or interpretation of this Agreement. The words "this
Agreement", "hereof", "herein" and "hereunder" and similar
expressions refer to this Agreement and not to any particular
article, section, paragraph or other portion hereof and include
any agreement or instrument supplementary or ancillary hereto.
1.4 NUMBER AND GENDER
Unless the subject matter or context requires the contrary,
words importing the singular number only shall include the plural
and vice versa; words importing the use of any gender shall
include all genders; and words importing persons shall include
firms and corporations.
1.5 DATE FOR ANY ACTION
In the event that any date on which any action is required
to be taken hereunder by either of the parties hereto is not a
Business Day, in the place where the action is required to be
taken, such action shall be required to be taken on the next
succeeding day which is a Business Day.
ARTICLE 2
ARRANGEMENT
2.1 ARRANGEMENT
The Amalgamating Companies have agreed to perform the
Arrangement pursuant to the provisions of Section 276 of the Act
whereby they shall amalgamate and holders of Industra Shares,
Industra Options and Industra Exchange Rights shall receive, on
the terms and subject to conditions contained in this Agreement
and the Plan of Arrangement, American Eco Common Shares, American
Eco Options and American Eco Exchange Rights, respectively, on
the following basis:
(a) .425 American Eco Common Shares for each Industra
Share;
(b) One American Eco Option for each Industra Option; and
(c) American Eco Exchange Rights entitling the holders to
acquire .425 American Eco Shares for each one Industra
Share that such holder would have been entitled to
acquire pursuant to any Industra Exchange Right.
2.2 EFFECTIVE DATE OF ARRANGEMENT
The Arrangement shall become effective at 12:01 a.m.
(Pacific Standard Time), on the Effective Date and at such time,
the Amalgamating Companies shall merge on the terms and subject
to the conditions contained in this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF INDUSTRA
Industra represents and warrants to and in favour of 519742 and
American Eco as follows and acknowledges that each of 519742 and
American Eco is relying upon such representations and warranties
in connection with the matters contemplated by this Agreement:
(a)Industra is duly organized and is validly existing as a
company under the laws of the Province of British Columbia and
has the corporate power and authority to own or lease its
property and assets and to carry on its business as is now being
carried on;
(b) Industra has the corporate power and authority to enter
into this Agreement and, subject to obtaining the
requisite approvals contemplated herein, to perform its
obligations hereunder;
(c) the execution and delivery of this Agreement by
Industra and the performance by Industra of its
obligations hereunder and under the Arrangement have
been duly authorized by the Board of Directors of
Industra and this Agreement constitutes a valid and
binding obligation of Industra enforceable against it
in accordance with its terms, subject to the
availability of equitable remedies and the enforcement
of creditors' rights generally;
(d) as at the date hereof, the authorized share capital of
Industra consists of 10,000,000 common shares without
par value and such shares have the attributes described
in the Industra Information Circular;
(e) as at the date hereof, the issued share capital of
Industra consists of 3,687,500 all of which are issued
and outstanding as fully paid and non-assessable;
(f) no person holds any securities convertible into any
shares of Industra or has any agreement, warrant or
option or right capable of becoming an agreement,
warrant or option for the purchase of any unissued
shares of Industra except for Industra Exchange Rights
held by William Austin, Lee Reisinger and John Wong
pursuant to agreements entered into with Industra
entitling the holders to acquire 65,000 Industra Shares
and stock options granted by Industra pursuant to its
stock option plan;
(g) the execution and delivery of this Agreement by
Industra and the completion of the transactions
contemplated herein: (i) do not and will not result in
the breach of, or violate any term or provision of, the
articles or by-laws of Industra; (ii) will not as of
the Effective Date conflict with, result in the breach
of, constitute a default under, or accelerate or permit
the acceleration of the performance required by any
agreement, instrument, licence, permit or authority to
which Industra is a party or by which it is bound and
which is material to Industra, or to which any material
property of Industra is subject or result in the
creation of any lien, charge or encumbrance upon any of
the material assets of Industra under any such
agreement or instrument, or give to others any material
interest or right, including rights of purchase,
termination, cancellation or acceleration, under any
such agreement, instrument, licence, permit or
authority; and (iii) do not and will not as of the
Effective Date violate any provision of law or
administrative regulation or any judicial or
administrative award, judgment or decree applicable and
known to Industra (after due inquiry), the breach of
which would have a material adverse effect on Industra;
(h) the financial statements of Industra contained in the
Industra Information Circular present fairly the
financial position of Industra at the date thereof and
the results of operations and the changes in its
financial position for the period indicated and have
been prepared in accordance with accounting principles
generally accepted in Canada;
(i) except as disclosed in the Industra Information
Circular, there has been no material adverse change in
the business or condition, financial or otherwise, of
Industra, from that shown in the financial statements
referred to in Section 3.1(h);
(j) there are no known or anticipated material liabilities
of Industra of any kind whatsoever (including absolute,
accrued or contingent liabilities) nor any commitments
whether or not determined or determinable in respect of
which Industra is or may become liable other than the
liabilities disclosed on, reflected in or provided for
in the financial statements referred to in Section
3.1(h) or reflected in the Industra Information
Circular incurred in the ordinary course of business;
(k) the corporate records and minute books of Industra as
required to be maintained by it under the laws of its
jurisdiction of incorporation are up to date and
contain complete and accurate minutes of all meetings
of its directors and shareholders and all resolutions
consented to in writing;
(l) Industra owns good and marketable title to its property
and assets free and clear of any and all mortgages,
liens, pledges, charges, security interests,
encumbrances, actions, claims or demands of any nature
whatsoever or howsoever arising which would have a
materially adverse effect on the property or assets of
Industra except as disclosed in the Industra
Information Circular,
(m) Industra has duly filed on a timely basis all tax
returns required to be filed by it and has paid all
taxes which are due and payable and has paid all
assessments and reassessments and all other taxes,
governmental charges, penalties, interest and fines due
and payable on or before the date hereof; adequate
provision has been made for taxes payable for the
current period for which tax returns are not yet
required to be filed; there are no agreements, waivers
or other arrangements providing for an extension of
time with respect to the filing of any tax return by or
payment or any tax, governmental charge or deficiency
against Industra;
(n) Industra has withheld from each payment made to any of
its officers, directors, former directors and employees
the amount of all taxes including without limitation,
income tax and other deductions required to be withheld
therefrom and has paid the same to the proper tax and
other receiving officers within the time required under
any applicable tax legislation;
(o) to the best of the knowledge of Industra (after due
inquiry), there are no actions, suits, proceedings or
investigations commenced, contemplated or threatened
against or affecting Industra, at law or in equity,
before or by any governmental department, commission,
board, bureau, court, agency, arbitrator or
instrumentality, domestic or foreign, of any kind nor,
to the best of the knowledge of Industra (after due
inquiry), are there any existing facts or conditions
which may reasonably be expected to be a proper basis
for any actions, suits, proceedings or investigations
which in any case would prevent or hinder the
consummation of the transactions contemplated by this
Agreement or the Arrangement, or which can reasonably
be expected to have a material adverse eflfect on the
business, operations, properties, assets or affairs,
financial or otherwise, of Industra, either before or
after the Effective Date and other than those contained
in the Industra Information Circular, and
(p) the information set forth in the Industra Information
Circular relating to Industra and its business and
property and the effect of the Arrangement thereon is
true, correct and complete in all material respects and
does not contain any untrue statement of any material
fact or omit to state any material fact required to be
stated therein or necessary in order to make the
statements therein not misleading in light of the
circumstances in which they are made.
3.2 REPRESENTATIONS AND WARRANTIES OF 519742
519742 represents and warrants to and in favour of Industra
as follows and acknowledges that Industra is relying upon such
representations and warranties in connection with the matters
contemplated by this Agreement:
(a) 519742 is duly organized and is validly existing as a
company under the laws of the Province of British
Columbia and has the corporate power and authority to
own or lease its property and assets and to carry on
its business as is now being carried on;
(b) 519742 has the corporate power and authority to enter
into this Agreement and, subject to obtaining the
requisite approvals contemplated herein, to perform its
obligations hereunder,
(c) the execution and delivery of this Agreement by 519742
and the performance by 519742 of its obligations
hereunder and under the Arrangement have been duly
authorized by the Board of Directors of 519742 and by
American Eco, the sole shareholder of 519742, and this
Agreement constitutes a valid and binding obligation of
519742 enforceable against it in accordance with its
terms, subject to the availability of equitable
remedies and the enforcement of creditors' rights
generally;
(d) the execution and delivery of this Agreement by 519742
and the completion of the transactions contemplated
herein: (i) does not and will not result in the breach
of, or violate any term or provision of, the articles
or by-laws of 519742; (ii) will not as of the Effective
Date conflict with, result in the breach of, constitute
a default under, or accelerate or permit the
acceleration of the performance required by any
agreement, instrument, licence, permit or authority to
which 519742 is a party or by which it is bound and
which is material to 519742, or to which any material
property of 519742 is subject or result in the creation
of any lien, charge or encumbrance upon any of the
material assets of 519742 under any such agreement or
instrument, or give to others any material interest or
right, including rights of purchase, termination,
cancellation or acceleration, under any such agreement,
instrument, licence, permit or authority, and (iii) do
not and will not as of the Effective Date violate any
provision of law or administrative regulation or any
judicial or administrative award, judgment or decree
applicable and known to 519742 (after due inquiry), the
breach of which would have a material adverse effect on
519742;
(e) there are no known or anticipated material liabilities
of 519742 of any kind whatsoever (including absolute,
accrued or contingent liabilities) nor any commitments
whether or not determined or determinable in respect of
which 519742 is or may become liable;
(f) the corporate records and minute books of 519742 as
required to be maintained by it under the laws of its
jurisdiction of incorporation are up to date and
contain complete and accurate minutes of all meetings
of its directors and shareholders and all resolutions
consented to in writing; and
(g) to the best of the knowledge of 519742 (after due
inquiry), there are no actions, suits, proceedings or
other investigations commenced, contemplated or
threatened against or affecting 519742, at law or in
equity, before or by any governmental department,
commission, board, bureau, court, agency, arbitrator or
instrumentality, domestic or foreign, of any kind nor,
to the best of the knowledge of 519742 (after due
inquiry), are there any existing facts or conditions
which may reasonably be expected to be a proper basis
for any actions, suits, proceedings or investigations
which in any case would prevent or hinder the
consummation of the transactions contemplated by this
Agreement, or which can reasonably be expected to have
a material adverse effect on the business, operations,
properties, assets or affairs, financial or otherwise,
of 519742, either before or after the Effective Date
and other than those contained in the 519742
Information Circular.
3.3 REPRESENTATIONS AND WARRANTIES OF AMERICAN ECO
American Eco represents and warrants to and in favour of
Industra as follows and acknowledges that Industra is relying
upon such representations and warranties in connection with the
matters contemplated by this Agreement:
(a) American Eco is duly organized and is validly existing
as a corporation under the laws of the Province of
Ontario and has the corporate power and authority to
own or lease its property and assets and to carry on
its business as is now being carried on;
(b) American Eco has the corporate power and authority to
enter into this Agreement and, subject to obtaining the
requeisite approvals contemplated herein, to perform
its obligations hereunder;
(c) the execution and delivery of this Agreement by
American Eco and the performance by American Eco of its
obligations hereunder and under the Arrangement have
been duly authorized by the Board of Directors of
American Eco and this Agreement constitutes a valid and
binding obligation of American Eco enforceable against
it in accordance with its terms, subject to the
availability of equitable remedies and the enforcement
of creditors' rights generally;
(d) as at the date hereof the authorized share capital of
American Eco consists of an unlimited number of
American Eco Common Shares and an unlimited number of
Preference Shares and such shares have the attributes
described in the Industra Information Circular;
(e) as the date hereof, the issued share capital of
American Eco consists of 13,822,092 American Eco Common
Shares which are issued and outstanding as fully paid
and non-assessable;
(f) except for 472,100 American Eco Common Shares issuable
pursuant to the exercise of stock options granted to
certain of firms, directors and full-time employees of
American Eco 858,000 American Eco Common Shares
issuable upon the exercise of share purchase warrants,
333,333 American Eco Common Shares issuable upon the
conversion of secured debentures, 500,000 American Eco
Common Shares and 500,000 warrants issuable subject to
certain performance requirements, and the 89,206
American Eco Common Shares to be issued pursuant to the
Arrangement, no person holds any securities convertible
into any shares of American Eco or has any agreement,
warrant or option or right capable of becoming an
agreement, warrant or option for the purchase of any
unissued shares of American Eco;
(g) the execution and delivery of this Agreement by
American Eco and the completion of the transactions
contemplated herein: (i) does not and will not result
in the breach of, or violate any term or provision of,
the articles or by-laws of American Eco; (ii) will not
as of the Effective Date conflict with, result in the
breach of, constitute a default under, or accelerate or
permit the acceleration of the performance required by
any agreement, instrument, licence, permit or authority
to which American Eco is a party or by which it is
bound and which is material to American Eco, or to
which any material property of American Eco is subject
or result in the creation of any lien, charge or
encumbrance upon any of the material assets of American
Eco under any such agreement or instrument, or give to
others any material interest or right, including rights
of purchase, termination, cancellation or acceleration,
under any such agreement, instrument, licence, permit
or authority; and (iii) do not and will not as of the
Effective Date violate any provision of law or
administrative regulation or any judicial or
administrative award, judgment or decree applicable and
known to American Eco (after due inquiry), the breach
of which would have a material adverse effect on
American Eco;
(h) the financial statements of American Eco contained in
the Industra Information Circular present fairly the
financial position of American Eco at the date thereof
and the results of operations and the changes in its
financial position for the period indicated and have
been prepared in accordance with accounting principles
generally accepted in Canada;
(i) except as disclosed in the Industra Information
Circular, there has been no material adverse change in
the business or condition, financial or otherwise, of
American Eco, from that shown in the financial
statements referred to in Section 3.3;
(j) there are no known or anticipated material liabilities
of American Eco of any kind whatsoever (including
absolute, accrued or contingent liabilities) nor any
commitments whether or not determined or determinable
in respect of which American Eco is or may become
liable other than the liabilities disclosed on,
reflected in or provided for in the financial
statements referred to in Section 3.3(h) or reflected
in the Industra Information Circular or incurred in the
ordinary course of business;
(k) the corporate records and minute books of American Eco
as required to be maintained by it under the laws of
its jurisdiction of incorporation are up to date and
contain complete and accurate minutes of all meetings
of its directors and shareholders and all resolutions
consented to in writing;
(l) American Eco owns good and marketable title to its
property and assets free and clear of any and all
mortgages, liens, pledges, charges, security interests,
encumbrances, actions, claims or demands of any nature
whatsoever or howsoever arising which would have a
materially adverse effect on the property or assets of
American Eco except as disclosed in the Industra
Information Circular;
(m) American Eco has duly filed on a timely basis all tax
returns required to be filed by it and has paid all
taxes which are due and payable and has paid all
assessments and reassessments and all other taxes,
governmental charges, penalties, interest and fines due
and payable on or before the date hereof; adequate
provision has been made for taxes payable for the
current period for which tax returns are not yet
required to be filed; there are no agreements, waivers
or other arrangements providing for an extension of
time with respect to the filing of any tax return by or
payment or any tax, governmental charge or deficiency
against American Eco;
(n) American Eco has withheld from each payment made to any
of its officers, directors, former directors and
employees the amount of all taxes including without
limitation, income tax and other deductions required to
be withheld therefrom and has paid the same to the
proper tax and other receiving officers within the time
required under any applicable tax legislation; and
(o) to the best of the knowledge of American Eco (after due
inquiry), there are no actions, suits, proceedings or
other investigations commenced, contemplated or
threatened against or affecting American Eco, at law or
in equity, before or by any governmental department,
commission, board, bureau, court, agency, arbitrator or
instrumentality, domestic or foreign, of any kind nor,
to the best of the knowledge of American Eco (after due
inquiry), are there any existing facts or conditions
which may reasonably be expected to be a proper basis
for any actions, suits, proceedings or investigations
which in any case would prevent or hinder the
consummation of the transactions contemplated by this
Agreement or the Arrangement, or which can reasonably
be expected to have a material adverse effect on the
business, operations, properties, assets or affairs,
financial or otherwise, of American Eco, either before
or after the Effective Date and other than those
contained in the Industra Information Circular.
ARTICLE 4
COVENANTS
4.1 COVENANTS OF INDUSTRA
Industra hereby covenants and agrees as follows:
(a) until the Effective Date, Industra shall carry on
business in the ordinary course and shall not enter
into any transaction or incur any obligation or
liability out of the ordinary course of its business,
except as othcrwise contemplated in this Agreement or
in the Industra Information Circular,
(b) until the Effective Date, Industra shall not:
(i) merge into or with, or amalgamate or consolidate
with, or enter into any other corporate
reorganization with, any other corporation or
person except as otherwise contemplated in this
Agreement or the Industra Information Circular,
(ii) declare, pay or make distributions by way of
dividend, return of capital or otherwise to or for
the benefit of its shareholders, except for the
payment of regular dividends payable in the
ordinary course to shareholders of such
corporation; or
(iii) purchase, redeem or issue any of its shares
or other securities convertible into shares
or enter into any commitment or agreement
therefor except pursuant to options or other
rights outstanding as of the date hereof and
referred to in paragraph (f) of Section 3.1
hereof.
(c) Industra shall, in a timely and expeditious manner,
file the Industra Information Circular in all
jurisdictions where the same is required and mail the
same to Industra Shareholders in accordance with the
Interim Order and applicable law;
(d) Industra shall not alter or amend its constating
documents as the same exist at the date of this
Agreement;
(e) Industra shall furnish to the other parties hereto such
information, in addition to the information contained
in this Agreement, relating to the financial condition,
business, properties and affairs of Industra as may
reasonably be requested by the other parties hereto
which information shall be true and complete in all
material respects and shall not contain an untrue
statement of any material fact or omit to state any
material fact required to be stated therein or
necessary in order to make the statements therein in
the light of the circumstances in which they are made,
not misleading;
(f) Industra shall use all reasonable efforts to apply for
and obtain, as soon as practicable:
(i) the approval of the Industra Shareholders required
for the implementation of the Arrangement;
(ii) the Interim Order and the Final Order as provided
for in Section 4.4 hereof; and
(iii) such other consents, orders and approvals as
counsel may advise are necessary or desirable
for the implementation of the Arrangement,
including those referred to in Section 5.1
hereof; and
(g) subject to the satisfaction or waiver of the conditions
contained in Sections 5.1 and 5.2 hereof, Industra
shall perform the obligations required to be performed
by it under the Arrangement and shall do any such other
acts and things as may be necessary or required in
order to give effect to the Arrangement.
4.2 COVENANTS OF 519742
519742 hereby covenants and agrees as follows:
(a) until the Effective Date, 519742 shall carry on
business in the ordinary course and shall not enter
into any transaction or incur any obligation or
liability except as otherwise contemplated in this
Agreement;
(b) until the Effective Date, 519742 shall not:
(i) merge into or with, or amalgamate or consolidate
with, or enter into any other corporate
reorganization with, any other corporation or
person except as otherwise contemplated in this
Agreement; or
(ii) declare, pay or make distributions by way of
dividend, return of capital or otherwise to or for
the benefit of its shareholders, except for the
payment of regular dividends payable in the
ordinary course to shareholders of such
corporation; or
(iii) purchase, redeem or issue any of its shares or
other securities convertible into shares or enter into
any commitment or agreement therefor.
(c) 519742 shall not alter or amend its constating
documents as the same exist at the date of this
Agreement;
(d) 519742 shall furnish to Industra such information, in
addition to the information contained in this
Agreement, relating to the financial condition,
business, properties and affairs of 519742 as may
reasonably be requested by Industra which information
shall be true and complete in all material respects and
shall not contain an untrue statement of any material
fact or omit to state any material fact required to be
stated therein or necessary in order to make the
statements therein in the light of the circumstances in
which they are made, not mislcading;
(e) 519742 shall use all reasonable efforts to apply for
and obtain, as soon as practicable:
(i) the Interim Order and the Final Order as provided
for in Section 4.4 hereof; and
(ii) such other consents, orders and approvals as
counsel may advise are necessary or desirable for
the implementation of the Arrangement, including
those referred to in Section 5.1 hereof; and
(f) subject to the satisfaction or waiver of the conditions
contained in Sections 5.1 and 5.2 hereof, 519742 shall
perform the obligations required to be performed by it
under the Arrangement and shall do any such other acts
and things as may be necessary or required in order to
give effect to the Arrangement.
4.3 COVENANTS OF AMERICAN ECO
American Eco hereby covenants and agrees as follows:
(a) until the Effective Date, American Eco shall carry on
business in the ordinary course and shall not enter
into any transaction or incur any obligation or
liability except as otherwise contemplated in this
Agreement or in the Industra Information Circular;
(b) until the Effective Date, American Eco shall not:
(i) merge into or with, or amalgamate or consolidate
with, or enter into any other corporate
reorganization with, any other corporation or
person except as otherwise contemplated in this
Agreement or the Industra Information Circular; or
(ii) declare, pay or make distributions by way of
dividend, return of capital or otherwise to or for
the benefit of its shareholders, except for the
payment of regular dividends payable in the
ordinary course to shareholders of such
corporation; or
(iii) purchase, redeem or issue any of its shares
or other securities convertible into shares
or enter into any commitment or agreement
therefor except pursuant to options or other
rights outstanding as of the date hereof and
referred to in paragraph (f) of Section 3.3
hereof.
(d) American Eco shall not alter or amend its constating
documents as the same exist at the date of this
Agreement;
(e) American Eco shall furnish to the other party hereto
such information, in addition to the information
contained in this Agreement, relating to the financial
condition, business, properties and affairs of American
Eco as may reasonably be requested by the other party
hereto which information shall be true and complete in
all material respects and shall not contain an untrue
statement of any material fact or omit to state any
material fact required to be stated therein or
necessary in order to make the statements therein in
the light of the circumstances in which they are made,
not misleading;
(f) American Eco shall provide or use all reasonable
efforts to apply for and obtain, as soon as
practicable:
(i) the approval of American Eco as the sole
shareholder of 519742 required for the
implementation of the Arrangement;
(ii) such other consents, orders and approvals as
counsel may advise are necessary or desirable for
the implementation of the Arrangement, including
those referred to in Section 5.1 hereof; and
(g) subject to the satisfaction or waiver of the conditions
contained in Sections 5.1 and 5.2 hereof, American Eco
shall perform the obligations required to be performed
by it under the Arrangement and shall do any such other
acts and things as may be necessary or required in
order to give effect to the Arrangement.
4.4 INTERIM ORDER AND FINAL ORDER
Industra and 519742 covenant and agree that they will, as
soon as reasonably practicable, apply to the Court for the
Interim Order providing for, among other things, the calling and
holding of the Industra Special Meeting for the purpose of
considering and, if deemed advisable, approving the Arrangement
and that, if the approval of the Arrangement as set forth in the
Interim Order is obtained, thereafter Industra and 519742 will
take the necessary steps to submit the Arrangement to the Court
and apply for the Final Order in such fashion as the Court may
direct and, as soon as practicable thereafter, and subject to
compliance with any other conditions provided for in Article 5
hereof, file the Final Order with the Registrar on the Effective
Date.
4.5 OTHER COVENANTS
The parties hereto agree that, subject to the limitations
imposed by the Act, all rights of indemnification in favour of
present or former directors and officers of each of Industra and
519742 with respect to actions taken in their capacities as
directors or officers of each of Industra and 519742 prior to the
Arrangement becoming effective as provided in the by-laws of each
of Industra and 519742 in effect on the date hereof and in any
indemnification agreement between any of such directors or
officers and each of Industra and 519742 in effect as at the date
hereof shall survive the Arrangement and continue in full force
and effect.
ARTICLE 5
CONDlTIONS
5.1 MUTUAL CONDITIONS PRECEDENT
The respective obligations of the parties hereto to complete the
transactions contemplated by this Agreement and to file the Final
Order with the Registrar to give effect to the Arrangement shall
be subject to the satisfaction, on or before the Effective Date,
of the following conditions, none of which may be waived by any
party hereto in whole or in part:
(a) the Arrangement, with or without amendment, shall have
been approved at the Industra Special Meeting and shall
have been approved by American Eco, the sole
shareholder of 519742 in accordance with the Interim
Order and the Arrangement shall otherwise have been
approved by the requisite majority of persons entitled
or required to vote thereon as determined by the Court;
(b) the Interim Order and Final Order shall have been
obtained in form and substance satisfactory to each
party hereto;
(c) all consents, orders and approvals, including
regulatory and judicial approvals and orders, required
or necessary for the completion of the transactions
provided for in this Agreement and the Arrangement
shall have been obtained or received from the persons,
authorities or bodies having jurisdiction in the
circumstances including without limitation, The Toronto
Stock Exchange and pursuant to the Securities Act
(British Columbia) and the comparable securities
legislation of the other provinces of Canada in which
either Industra or American Eco is a reporting issuer,
(d) there shall not be in force any order or decree
restraining or enjoining the consummation of the
transactions contemplated by this Agreement and the
Arrangement;
(e) any approval advised by counsel to American Eco to be
necessary or desirable shall have been received from
The Toronto Stock Exchange (in connection with the
listing of the American Eco Common Shares issuable
under the Arrangement);
(f) none of the consents, orders, regulations or approvals
contemplated herein shall contain terms or conditions
or require undertakings or security deemed
unsatisfactory or unacceptable by the parties hereto;
(g) the issuance of the American Eco Common Shares pursuant
to the Arrangement will have been approved by all
nccessary corporate action to permit such American Eco
Common Shares to be issued as fully paid and
non-assessable and will be exempt from the registration
and prospectus requirements of applicable securities
laws in each of the Provinces of Canada in which
Industra Shareholders are resident; and
(h) this Agreement shall not have been terminated under
Article 8 hereof.
5.2 CONDITIONS TO OBLIGATIONS OF EACH PARTY
The obligation of each party to complete the transactions
contemplated by this Agreement is further subject to the
condition, which may be waived by such party without prejudice to
its right to rely on any other condition in favour of such party,
that the covenants of each other party hereto to be performed on
or before the Effective Date pursuant to the terms of this
Agreement shall have been duly performed by such party and that,
except as affected by the transactions contemplated by this
Agreement, the representations and warranties of each other party
hereto shall be true and correct in all material respects as at
the Effective Date, with the same effect as if such
representations and warranties had been made at and as of such
time, and each such party shall have received a certificate,
dated the Effective Date, of a senior officer of the other party
confirming the same.
5.3 MERGER OF CONDITIONS
The conditions set out in Sections 5.1 and 5.2 hereof shall
be conclusively deemed to have been satisfied, waived or released
on the filing by Industra and 5l9742 of the Final Order with the
Registrar.
ARTICLE 6
AMALGAMATION
6.1 AMALGAMATION OF AMALGAMATING COMPANIES
The Amalgamating Companies do hereby agree to amalgamate as
part of the Arrangement pursuant to the provisions of the Act and
to continue as one company on the terms and conditions set forth
in this Arrangement Agreement. On the Effective Date, the
amalgamation of the Amalgamating Companies, and their
continuation as one company shall become effective; the property
of each Amalgamating Company shall continue to be the property of
the Amalgamated Company; the Amalgamated Company shall continue
to be liable for the obligations of each Amalgamating Company,
any existing cause of action, claim or liability to prosecution
shall be unaffected; any civil, criminal or administrative action
or proceeding pending by or against any Amalgamating Company may
be continued to be prosecuted by or against the Amalgamated
Company; any conviction against, or ruling under a judgment in
favour of or against an Amalgamating Company may be enforced by
or against the Amalgamated Company.
ARTICLE 7
EXCHANGE OF SHARES, OPTIONS AND EXCHANGE RIGHTS
7.1 EXCHANGE OF SHARES
On the Effective Date:
(a) subject to the provisions of Section 7.2 each Industra
shareholder, other than American Eco, shall receive,
instead of shares of the Amalgamated Company, .425
American Eco Common Shares in exchange for each
Industra Share held by such shareholder and the
Industra Shares thus exchanged shall be cancelled; and
in consideration of the issue by American Eco of the
American Eco Common Shares, the Amalgamated Company
shall issue to American Eco one (1) fully paid common
share of the Amalgamated Company for each American Eco
Common Share so issued;
(b) each shareholder of 519742 shall receive one (1) issued
and fully paid common share of the Amalgamated Company
in exchange for each issued and outstanding common
share of 519742 held by such shareholder, and such
shares of 519742 thus exchanged shall be cancelled; and
(c) the issued and outstanding Industra Shares held by
American Eco shall be converted into common shares of
the Amalgamated Company;
(d) holders of Industra Options shall have such options
cancelled and exchanged for American Eco Options on a
one for one basis, exercisable at a price equal to the
greater of 2.35 times the exercise price of the
Industra Options and the market price of the American
Eco Common Shares on The Toronto Stock Exchange on
November 13, 1996; and
(e) holders of Industra Exchange Rights shall have such
rights cancelled and exchanged for American Eco Common
Exchange Rights entitling the holders to acquire 0.425
American Eco Common Shares upon exercise for each
Industra Share such holders would have been entitled to
receive upon exercise of their Industra Exchange
Rights.
7.2 NO SHARES IN FRACTIONS
No fractional American Eco Common Shares will be issued.
ARTICLE 8
TERMINATION AND AMENDMENT
8.1 TERMINATION
(a)Subject to any agreement of Industra, 519742 and American Eco
to the contrary, this Agreement shall forthwith terminate in the
event that:
(i)the Industra Shareholders fail to approve the Arrangement at
the Industra Special Meeting;
(ii) a final determination from the Court or any court
of appeal denies the granting of the Final Order;
or
(iii) the Arrangement is not effected prior to
February 28, 1997 and any party hereto wishes
to terminate the Arrangement and gives
written notice to the other parties of
termination.
(b) This Agreement may be terminated at any time before the
Arrangement becomes effective:
(i) by Industra if there shall have been a breach by
519742 or American Eco of an obligation or
covenant contained in this Agreement or a breach
of any of the representations and warranties
contained in this Agreement on the part of 519742
or American Eco and such breach shall not have
been waived by Industra; or
(ii) by 519742 or American Eco if there shall have been
a breach by Industra of an obligation or covenant
contained in this Agreement or a breach of any of
the representations and warranties on the part of
Industra contained in this Agreement by Industra
and such breach shall not have been waived by
519742 or American Eco.
8.2 EFFECT OF TERMINATION
Upon the termination of this Agreement pursuant to Section
8.1 hereof, neither party shall have any liability or further
obligation to the other party other than liability of one party
to another for breach of the provisions of this Agreement.
8.3 AMENDMENT
This Agreement may, at any time and, from time to time
before and after the holding of the Industra Special Meeting, but
not later than the Effective Date, be amended by written
agreement of the parties hereto (or, in the case of a waiver, by
written instrument of the party giving the waiver) without,
subject to applicable law, further notice to or authorization on
the part of the security holders of Industra, or the Court.
Without limiting the generality of the foregoing, any such
amendment may:
(a) change the time for performance of any of the
obligations or acts of the parties hereto;
(b) waive any inaccuracies or modify any representation
contained herein or in any documents to be delivered
pursuant hereto; and
(c) waive compliance with or modify any of the covenants
herein contained or waive or modify performance of any
of the obligations of the parties hereto;
provided that, notwithstanding the foregoing, the terms of the
Arrangement and this Agreement shall not be amended in a manner
prejudicial to the Industra Shareholders without the approval of
such shareholders given in the same manner as required for the
approval of the Arrangement or as may be ordered by the Court.
8.4 AMENDMENT RESULTING FROM FINAL ORDER
This Agreement and the Arrangement may be amended in
accordance with the Final Order by written agreement of the
parties hereto.
ARTICLE 9
GENERAL PROVISIONS
9.1 NOTICES
All notices that may be or are required to be given pursuant
to any provision of this Agreement shall be given or made in
writing and shall be deemed to be validly given or served
personally or by telecopy, in each case to the attention of a
senior officer and in each case addressed to the particular party
at:
If to 519742 or American Eco: 11011 Jones Road,
Houston, Texas 77070
Attention: Michael McGinnis
Telecopier: (281) 774-7005
with a copy to: Cassels Brock & Blackwell
Suite 2100, Scotia Plaza
40 King Street West
Toronto, Ontario
M5H 3C2
Attention: Mark Young
Telecopier: (416) 869-5380
If to Industra: 401 Salter Street
New Westminster, British
Columbia
V3M 5Y1
Attention: Wayne Shaw
Telecopier: (604) 521-3057
with a copy to: Sangra, Moller
1900 700 West Georgia Street
P.O. Box 10354, Pacific Centre
Vancouver, British Columbia
V7Y 1G5
Attention: Kim C. Moller
Telecopier: (604) 669-8803
or such other addresses or telecopy numbers of which a party may,
from time to time, advise the other party hereto by notice in
writing given in accordance with the foregoing. The date of
receipt of any such notice shall be deemed to be the date of
delivery thereof, or in the case of notice sent by telecopy, the
date of successful transmission thereof if given during normal
business hours and on the date during which such normal business
hours next occur if not given during such hours.
9.2 APPLICABLE LAW
This Agreement shall be governed by and construed in
accordance with the laws of the Province of British Columbia and
the laws of Canada applicable therein and shall be treated in all
respects as a British Columbia contract.
9.3 ASSIGNMENT
This Agreement and all the provisions hereof shall be
binding upon and enure to the benefit of the parties hereto and
their respective successors and permitted assigns. Neither this
Agreement nor any of the rights hereunder or under the
Arrangement shall be assigned by any party hereto without the
prior written consent of the other party hereto.
9.4 COUNTERPARTS
This Agreement may be executed in two or more counterparts,
each of which shall when delivered (either in originally executed
form or by facsimile transmission) shall be deemed an original,
but all of which together shall constitute one and the same
instrument.
9.5 BINDING EFFECT
This Agreement and the Arrangement shall be binding upon and
shall enure to the benefit of the parties hereto and their
respective successors and permitted assigns.
9.6 TIME OF THE ESSENOE
Time shall of the essence of this Agreement.
9.7 ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the
parties pertaining to the subject matter hereof and supersedes
all prior agreements, understandings, negotiations, and
discussions, whether oral or written, among the parties with
respect to the subject matter hereof.
IN WITNESS WHEREOF each of the parties hereto has executed
this Agreement as of the date first written above.
INDUSTRA SERVICE CORPORATION
Per: /s/ WAYNE SHAW
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519742 B.C. LTD.
Per: /s/ WAYNE SHAW
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AMERICAN ECO CORPORATION
Per: /s/ MICHAEL McGINNlS
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