EXHIBIT 10.1
AGREEMENT AND PLAN OF MERGER
by and among
CHART INDUSTRIES, INC.,
("Chart")
NCI ACQUISITION CORP.,
("Merger Sub")
NCI SALES AND LEASING, INC.,
(the "Company")
MARK A. BAUMAN and PATRICK J. FLYNN
("Shareholders")
March 15, 1999
TABLE OF CONTENTS
PAGE
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ARTICLE 1 THE MERGER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.1 The Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.2 Articles of Incorporation . . . . . . . . . . . . . . . . . . . . . . . . .2
1.3 Code of Regulations.. . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.4 Directors and Officers. . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.5 Effective Time; Effective Date. . . . . . . . . . . . . . . . . . . . . . .2
ARTICLE 2 STATUS AND CONVERSION OF SHARES . . . . . . . . . . . . . . . . . . . . .3
2.1 Merger Sub Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
2.2 Company Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
2.3 Certain Definitions.. . . . . . . . . . . . . . . . . . . . . . . . . . . .4
2.4 Estimated Merger Consideration. . . . . . . . . . . . . . . . . . . . . . .5
2.5 Adjustment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.5.1 Closing Balance Sheet Preparation. . . . . . . . . . . . . . . . . .6
2.5.2 Closing Balance Sheet Review . . . . . . . . . . . . . . . . . . . .6
2.5.3 Closing Balance Sheet Dispute. . . . . . . . . . . . . . . . . . . .6
2.5.4 Post-Closing Delivery of Chart Common Stock. . . . . . . . . . . . .7
ARTICLE 3 SHAREHOLDERS' REPRESENTATIONS AND WARRANTIES CONCERNING THE
TRANSACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
3.1 Authority and Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
3.2 Authorized and Issued Stock . . . . . . . . . . . . . . . . . . . . . . . .8
3.3 Title to Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
3.4 Execution and Delivery; Enforceability. . . . . . . . . . . . . . . . . . .9
3.5 Noncontravention. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
3.6 Brokerage.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
3.7 Investment Intent; Restricted Securities. . . . . . . . . . . . . . . . . .9
ARTICLE 4 SHAREHOLDERS' REPRESENTATIONS AND WARRANTIES CONCERNING THE
COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.1 Organization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.1.1 Organization and Power . . . . . . . . . . . . . . . . . . . . . . 10
4.1.2 Qualification. . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.1.3 Other Ventures . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.1.4 {Intentionally omitted.} . . . . . . . . . . . . . . . . . . . . . 11
4.2 Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.2.1 {Intentionally omitted.} . . . . . . . . . . . . . . . . . . . . . 11
4.2.2 {Intentionally omitted.} . . . . . . . . . . . . . . . . . . . . . 11
4.2.3 Consents.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ii
4.2.4 No Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.3 Financial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.3.1 Financial Records. . . . . . . . . . . . . . . . . . . . . . . . . 11
4.3.2 Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.3.3 No Changes.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.3.4 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.4 Legal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.4.1 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . 13
4.4.2 Product and Service Warranties . . . . . . . . . . . . . . . . . . 13
4.4.3 Product Liability. . . . . . . . . . . . . . . . . . . . . . . . . 14
4.4.4 Litigation.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.5 Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.5.1 Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.5.2 Employment Termination.. . . . . . . . . . . . . . . . . . . . . . 15
4.5.3 Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.5.4 Compliance with Contracts. . . . . . . . . . . . . . . . . . . . . 16
4.5.5 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.5.6 Customers and Suppliers. . . . . . . . . . . . . . . . . . . . . . 17
4.5.7 Purchases and Sales. . . . . . . . . . . . . . . . . . . . . . . . 17
4.5.8 Prepayments and Deposits . . . . . . . . . . . . . . . . . . . . . 17
4.5.9 Capital Projects.. . . . . . . . . . . . . . . . . . . . . . . . . 17
4.6 Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.7 Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.7.1 Title. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.7.2 Receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.7.3 Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.7.4 Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . 19
4.7.5 Condition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.7.6 Location . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.7.7 Intellectual Property. . . . . . . . . . . . . . . . . . . . . . . 19
4.7.8 Extent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.8 Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.9 Additional Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.9.1 Conflicts of Interest. . . . . . . . . . . . . . . . . . . . . . . 21
4.9.2 Full Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF CHART AND MERGER SUB. . . . . . . . . 21
5.1 Organization and Power. . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.2 Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.2.1 Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.2.2 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.2.3 No Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.3 SEC Documents; Absence of Certain Changes . . . . . . . . . . . . . . . . 22
5.4 Chart Common Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
iii
ARTICLE 6 CLOSING; CLOSING CONDITIONS . . . . . . . . . . . . . . . . . . . . . . 23
6.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.2 Conditions to Chart's and Merger Sub's Obligation . . . . . . . . . . . . 23
6.3 Conditions to Shareholders' and Company's Obligations . . . . . . . . . . 26
ARTICLE 7 ADDITIONAL COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.1 Pre-Closing Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.1.1 Conduct of Business. . . . . . . . . . . . . . . . . . . . . . . . 27
7.1.2 Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.1.3 Interim Financial Statements . . . . . . . . . . . . . . . . . . . 28
7.1.4 Supplemental Disclosure. . . . . . . . . . . . . . . . . . . . . . 28
7.1.5 Satisfaction of Conditions . . . . . . . . . . . . . . . . . . . . 29
7.1.6 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.2 Nondisclosure, Noncompetition and Noninterference . . . . . . . . . . . . 29
7.3 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.4 Expenses; Transfer Taxes. . . . . . . . . . . . . . . . . . . . . . . . . 30
7.5 {Intentionally omitted.}. . . . . . . . . . . . . . . . . . . . . . . . . 30
7.6 Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.7 Employment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.8 {Intentionally omitted.}. . . . . . . . . . . . . . . . . . . . . . . . . 31
7.9 No Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.10 Consent to Jurisdiction. . . . . . . . . . . . . . . . . . . . . . . . . 31
7.11 Further Assurances and Assistance. . . . . . . . . . . . . . . . . . . . 31
7.12 {Intentionally omitted.} . . . . . . . . . . . . . . . . . . . . . . . . 31
7.13 Certain Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE 8 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.1 Indemnification by Shareholders . . . . . . . . . . . . . . . . . . . . . 33
8.2 Indemnification by Chart and Merger Sub . . . . . . . . . . . . . . . . . 33
8.3 Notification of and Participation in Claims . . . . . . . . . . . . . . . 33
8.4 Survival; Limitations on Indemnification. . . . . . . . . . . . . . . . . 34
ARTICLE 9 MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . 34
9.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.2 Binding Effect. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.3 Inclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.4 {Intentionally omitted.}. . . . . . . . . . . . . . . . . . . . . . . . . 36
9.5 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
9.6 Execution in Counterparts; Signature Pages. . . . . . . . . . . . . . . . 36
9.7 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
9.8 Amendments, Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
9.9 No Third-Party Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 36
9.10 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
iv
9.11 Schedules and Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . 37
9.12 Time Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
9.13 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
LIST OF SCHEDULES:
Schedule 4.1.2 (Qualification)
Schedule 4.2.3 (Consents)
Schedule 4.2.4 (Conflicts)
Schedule 4.3.1(a) (Financial Statements)
Schedule 4.3.1(b) (Exceptions from GAAP)
Schedule 4.3.2 (Liabilities)
Schedule 4.4.1 (Compliance with Laws)
Schedule 4.4.2 (Product and Service Warranties)
Schedule 4.4.3 (Product Liability)
Schedule 4.4.4 (Litigation)
Schedule 4.5.1 (Employment)
Schedule 4.5.2 (Employment Termination)
Schedule 4.5.3 (Contracts)
Schedule 4.5.5 (Insurance)
Schedule 4.5.8 (Prepayments and Deposits)
Schedule 4.5.9 (Capital Projects)
Schedule 4.6 (Employee Benefits)
Schedule 4.7.1 (Title)
Schedule 4.7.2 (Receivables)
Schedule 4.7.6 (Location of Assets)
Schedule 4.7.7 (Intellectual Property)
Schedule 4.8 (Real Property)
Schedule 4.9.1 (Conflicts of Interest)
v
INDEX OF DEFINED TERMS
Where
Term Defined
- --------------------------------------------------------- ----------------
Acquisition Balance Sheet . . . . . . . . . . . . . . . . Section 4.3.1(a)
Agreement . . . . . . . . . . . . . . . . . . . . . . . . Page 1
Asset Purchase Agreement. . . . . . . . . . . . . . . . . Section 6.2(n)
Automobile Note . . . . . . . . . . . . . . . . . . . . . Section 6.2(p)
Certificate of Merger . . . . . . . . . . . . . . . . . . Section 1.5
Chart . . . . . . . . . . . . . . . . . . . . . . . . . . Page 1
Chart Common Stock. . . . . . . . . . . . . . . . . . . . Section 2.2
Chart SEC Documents . . . . . . . . . . . . . . . . . . . Section 5.3
Closing . . . . . . . . . . . . . . . . . . . . . . . . . Section 6.1
Closing Date. . . . . . . . . . . . . . . . . . . . . . . Section 6.1
Closing Working Capital . . . . . . . . . . . . . . . . . Section 2.3(b)
Code . . . . . . . . . . . . . . . . . . . . . . . . . . Page 1
Company . . . . . . . . . . . . . . . . . . . . . . . . . Page 1
Company Share AND Company Shares. . . . . . . . . . . . . Section 3.2
Contracts . . . . . . . . . . . . . . . . . . . . . . . . Section 4.5.3
Definitive Merger Consideration . . . . . . . . . . . . . Section 2.4
Effective Date. . . . . . . . . . . . . . . . . . . . . . Section 1.5
Effective Time. . . . . . . . . . . . . . . . . . . . . . Section 1.5
Estimated Merger Consideration. . . . . . . . . . . . . . Section 2.4
Expenses. . . . . . . . . . . . . . . . . . . . . . . . . Section 8.1
Final Closing Balance Sheet . . . . . . . . . . . . . . . Section 2.5.2 OR
Section 2.5.3
Final Post-Closing Merger Consideration Adjustment. . . . Section 2.5.2 OR
Section 2.5.3
Hazardous Substances. . . . . . . . . . . . . . . . . . . Section 4.7.4
Hazardous Waste . . . . . . . . . . . . . . . . . . . . . Section 4.7.4
Independent Accountants . . . . . . . . . . . . . . . . . Section 2.5.3
Intellectual Property Rights. . . . . . . . . . . . . . . Section 4.7.7
Liability . . . . . . . . . . . . . . . . . . . . . . . . Section 4.3.1(b)
Liens . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.3
Losses. . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.1
Merger. . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1
Merger Sub. . . . . . . . . . . . . . . . . . . . . . . . Page 1
vi
Where
Term Defined
- --------------------------------------------------------- ----------------
Net Closing Indebtedness. . . . . . . . . . . . . . . . . Section 2.3(a)
Net Worth Differential. . . . . . . . . . . . . . . . . . Section 2.3(c)
Northcoast/America. . . . . . . . . . . . . . . . . . . . Section 6.2(n)
Northcoast/Kansas . . . . . . . . . . . . . . . . . . . . Section 6.2(n)
Northcoast/Texas. . . . . . . . . . . . . . . . . . . . . Section 6.2(n)
OGCL . . . . . . . . . . . . . . . . . . . . . . . . . . Page 1
Per-Share Merger Consideration. . . . . . . . . . . . . . Section 2.2
Post-Closing Merger Consideration Adjustment. . . . . . . Section 2.4
Preliminary Closing Balance Sheet . . . . . . . . . . . . Section 2.5.1
Preliminary Post-Closing Merger Consideration Adjustment. Section 2.5.1
Pre-Closing Inventory . . . . . . . . . . . . . . . . . . Section 2.5.1
Pre-Closing Taxes . . . . . . . . . . . . . . . . . . . . Section 7.13(a)
Product Liability Claim . . . . . . . . . . . . . . . . . Section 4.4.3
SEC . . . . . . . . . . . . . . . . . . . . . . . . . . Section 5.3
Shareholder AND Shareholders. . . . . . . . . . . . . . . Page 1
Stock Purchase Agreement. . . . . . . . . . . . . . . . . Section 6.2(n)
Surviving Corporation . . . . . . . . . . . . . . . . . . Section 1.1
Tax Returns . . . . . . . . . . . . . . . . . . . . . . . Section 4.3.4
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.3.4
1933 Act. . . . . . . . . . . . . . . . . . . . . . . . . Section 3.7
vii
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into on this 15th day of March, 1999, by and among NCI SALES AND
LEASING, INC., an Ohio corporation (hereinafter referred to alternatively as
the "Company" or the "Surviving Corporation"), MARK A. BAUMAN and PATRICK J.
FLYNN (each, a "Shareholder"), NCI ACQUISITION CORP., an Ohio corporation
(hereinafter referred to as "Merger Sub"), and CHART INDUSTRIES, INC., a
Delaware corporation (hereinafter referred to as "Chart"). As used in this
Agreement, the term "Shareholders" shall mean and include Mark A. Bauman
individually, Patrick J. Flynn individually, and both of them collectively.
WITNESSETH:
WHEREAS, the authorized capital stock of the Company consists of 850
Common Shares, without par value, of which a total of 20 are issued and
outstanding (as more particularly defined in Section 3.2 hereof, the "Company
Shares"), and all 20 of such Company Shares are owned by the Shareholders;
WHEREAS, the authorized capital stock of Merger Sub consists of 850
Common Shares, without par value, of which a total of 20 are issued and
outstanding, and all 20 of the issued and outstanding shares of Merger Sub
are owned by Chart;
WHEREAS, the Board of Directors of each of the Company, of Merger Sub
and of Chart deems it advisable and generally to its and its respective
shareholders' welfare and advantage to merge Merger Sub with and into the
Company under and pursuant to Section 1701.78 of the Ohio General Corporation
Law (the "OGCL"), subject to and in accordance with the terms and conditions
of this Agreement, and has approved this Agreement in accordance with the
requirements of the OGCL;
WHEREAS, the shareholders of each of the Company and of Merger Sub
have approved and adopted this Agreement in accordance with the requirements
of the OGCL; and
WHEREAS, the parties intend that the merger of Merger Sub with and
into the Company hereunder shall qualify as a "reorganization" within the
meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended
(the "Code");
NOW, THEREFORE, in consideration of and in reliance upon the mutual
covenants, agreements, representations and warranties set forth in this
Agreement, the Company, Shareholders, Merger Sub and Chart hereby adopt the
following plan of merger and agree as follows:
1
ARTICLE 1
THE MERGER
1.1 THE MERGER.
Effective at the Effective Time (as defined in Section 1.5),
Merger Sub shall be merged with and into the Company (the "Merger"). The
Company shall be the surviving corporation in the Merger (the "Surviving
Corporation"). At the Effective Time, the separate corporate existence of
Merger Sub shall cease, and the Surviving Corporation, to the extent
permitted by applicable law, shall succeed to all of the business,
properties, assets, and liabilities of Merger Sub and shall continue as the
surviving corporation under the laws of the State of Ohio and with the name
"NCI Sales and Leasing, Inc."
1.2 ARTICLES OF INCORPORATION.
The Articles of Incorporation of the Company as in effect
immediately prior to the Effective Time shall continue in effect following
the Merger and shall be the Articles of Incorporation of the Surviving
Corporation, subject to amendment from time to time after the Merger in
accordance with the terms thereof and with applicable law.
1.3 CODE OF REGULATIONS.
The Code of Regulations of the Company as in effect immediately
prior to the Effective Time shall continue in effect following the Merger and
shall be the Code of Regulations of the Surviving Corporation, subject to
amendment from time to time after the Merger in accordance with the terms
thereof, the Articles of Incorporation of the Surviving Corporation, as
amended, and applicable law.
1.4 DIRECTORS AND OFFICERS.
Each director and each officer of the Company holding office at
the Effective Time shall at the Effective Time be removed from office, and
the directors and the officers of Merger Sub holding office immediately prior
to the Effective Time shall at the Effective Time become the directors and
the officers, respectively, of the Company, and shall continue in office
following the Merger until they shall have resigned or been removed or
replaced in accordance with the Articles of Incorporation and the Code of
Regulations of the Surviving Corporation, each as amended, or otherwise in
accordance with applicable law.
1.5 EFFECTIVE TIME; EFFECTIVE DATE.
The Merger shall become effective at and as of the time at
which an appropriate certificate of merger with respect to the Merger (the
"Certificate of Merger") shall have been duly filed in the office of the
Secretary of State of Ohio in accordance with Section 1701.81 of the OGCL
(the "Effective Time"). The date on which the Effective Time occurs is
herein referred to as the "Effective Date." At the Closing (as hereinafter
defined), subject to the
2
satisfaction of the conditions set forth in this Agreement, the Company and
Merger Sub shall each execute and cause the Certificate of Merger to be so
filed.
ARTICLE 2
STATUS AND CONVERSION OF SHARES
The terms of the Merger and the mode of carrying them into effect, and
the manner and basis of converting the outstanding shares of the capital
stock of the Company and of Merger Sub, shall be as follows:
2.1 MERGER SUB SHARES.
Each one (1) Common Share, without par value, of Merger Sub
which is issued and outstanding immediately prior to the Effective Time shall
at the Effective Time, by virtue of the Merger and without any action on the
part of the holder thereof or any other person, be changed and converted into
one (1) issued and outstanding Common Share, without par value, of the
Company.
2.2 COMPANY SHARES.
Each one (1) Company Share which is issued and outstanding
immediately prior to the Effective Time shall, by virtue of the Merger and
without any action on the part of the holder thereof or any other person, be
canceled, extinguished and converted at the Effective Time into the right to
receive from Chart, in accordance with the terms and conditions of this
Agreement, that number of shares of Common Stock, $.01 par value, of Chart
("Chart Common Stock") that is determined by reference to the following
formula (the "Per-Share Merger Consideration"):
PSMC = ( ( $723,000 - Excess Debt - Working Capital Shortfall - NWD )
DIVIDED BY 20 ) DIVIDED BY CTI
where: (a) "PSMC" is the number of shares of Chart Common Stock
constituting the Per-Share Merger Consideration;
(b) "EXCESS DEBT" means the amount, if any, by which the Net
Closing Indebtedness (as defined below) exceeds
$196,139.00;
(c) "WORKING CAPITAL SHORTFALL" means the amount, if any, by
which $29,930.00 exceeds the Closing Working Capital (as
defined below);
(d) "NWD" means the amount of the Net Worth Differential (as
defined below); and
3
(e) "CTI" equals $7.0875, which is the average of the closing
prices of the Chart Common Stock on the New York Stock
Exchange on each of the five (5) trading days beginning
Friday, March 5, 1999, and ending Thursday, March 11, 1999.
The preceding sentence notwithstanding, Chart shall not be required to issue,
and no holder of Company Shares shall be entitled to receive, any fractional
share of Chart Common Stock by virtue of the Merger. If a holder of Company
Shares would otherwise be entitled to receive a fractional interest in a
share of Chart Common Stock by virtue of the Merger, in lieu thereof such
holder shall be entitled to receive from Chart, as part of the Per-Share
Merger Consideration payable to such holder in accordance with this
Agreement, an amount in cash equal to the fair value of such fractional
interest, at the rate per share equal to the value of a share of Chart Common
Stock as determined in accordance with paragraph 2.2(d) above. Neither Chart
nor the Surviving Corporation shall have any obligation to recognize the
claim of any holder of Company Shares who was not the holder of record
thereof as of the Effective Time. No interest shall accrue or be paid on the
Per-Share Merger Consideration. No holder of Company Shares shall be
entitled to receive any part of the Per-Share Merger Consideration in respect
of his Company Shares unless and until all certificate representing the same
shall have been delivered to Chart in accordance with Section 2.4 hereof and
the Final Post-Closing Merger Consideration Adjustment shall have been
finally determined in accordance with Section 2.5 hereof. If any certificate
representing Company Shares is lost, stolen or destroyed, Chart shall
determine the amount of the bond, if any, and the type of additional
documents, information or assurances as shall be reasonably required to
protect Chart from other claimants with respect to the Company Shares
represented thereby in conformity with applicable law.
2.3 CERTAIN DEFINITIONS.
(a) "Net Closing Indebtedness" means an amount equal to (i)
the sum of all of the Company's indebtedness for borrowed money (including
obligations in respect of principal, accrued interest, and any applicable
prepayment charges or premiums), MINUS (ii) the sum of all cash and cash
equivalents held by the Company (not including checks or drafts issued but
not yet cleared), all as reflected on the Final Closing Balance Sheet (as
defined below). On the Closing Date, Shareholders will cause the Company to
estimate in good faith the amount of the Net Closing Indebtedness in
accordance with the preceding sentence, and will deliver to Chart a
certificate signed by Shareholders and the Company's chief financial officer
setting forth such estimate (the "Debt Certificate"), together with such
supporting detail and lender confirmations as Chart may request.
(b) "Closing Working Capital" means the difference between
(i) the Company's current assets MINUS (ii) the Company's current
liabilities, all as reflected on the Final Closing Balance Sheet; PROVIDED,
HOWEVER, that for purposes of such calculation, the Company's current assets
will not include any accounts or notes receivable from Northcoast/America,
Northcoast/Texas or Northcoast/Kansas, and the Company's current liabilities
will not include any accounts or notes payable to Northcoast/America,
Northcoast/Texas or Northcoast/Kansas and will not include any indebtedness
for borrowed
4
money (including obligations in respect of principal, accrued interest, and
any applicable prepayment charges or premiums) taken into account in
determining Net Closing Indebtedness.
(c) "Net Worth Differential" means the difference between
(i) the net worth of the Company (I.E., all assets, net of depreciation and
amortization, less all liabilities) as actually reflected on the Final
Closing Balance Sheet, allowing for the variances from generally accepted
accounting principles identified on Schedule 4.3.1(b) hereto, MINUS (ii) the
net worth of the Company (I.E., all assets, net of depreciation and
amortization, less all liabilities) as it would be reflected on the Final
Closing Balance Sheet if the same were prepared without allowance for any of
the variances from generally accepted accounting principles identified on
Schedule 4.3.1(b) hereto.
2.4 ESTIMATED MERGER CONSIDERATION.
Upon the surrender and delivery by each Shareholder to Chart at
the Closing, or following the Closing at Chart's principal executive office
in Mayfield Heights, Ohio, of all certificates representing the Company
Shares held by such Shareholder, duly endorsed to Chart or in blank and
otherwise in proper form for transfer to Chart, Chart shall cause to be
issued in the name of such Shareholder, and dated as of the date of such
surrender and delivery, a certificate for the number of shares of Chart
Common Stock that would be issuable in respect of all of such Shareholder's
Company Shares pursuant to Section 2.2 hereof if the Net Closing Indebtedness
were exactly as set forth in the Debt Certificate and if the Working Capital
Shortfall and the Net Worth Differential were both zero ($0) (as to each
Shareholder, his "Estimated Merger Consideration"). Chart shall retain
possession of each such certificate until the Final Post-Closing Merger
Consideration Adjustment has been determined in accordance with Section 2.5.
Pending such determination, the shares of Chart Common Stock represented by
each certificate so issued and retained shall be issued and outstanding for
all purposes and owned of record by the Shareholder in whose name such
certificate is registered, and such Shareholder shall be entitled to exercise
all voting and other consensual rights pertaining to the shares of Chart
Common Stock represented thereby, and shall be entitled to receive all
dividends and other distributions, if any, that shall be paid upon such
shares from the date of issuance thereof to the date of delivery thereof to
such Shareholder hereunder. If the number of shares of Chart Common Stock
issuable to a Shareholder pursuant to Section 2.2, as finally determined in
accordance with Section 2.5 hereof (as to each Shareholder, his "Definitive
Merger Consideration"), is less than his Estimated Merger Consideration, then
Chart shall cancel the certificate representing his Estimated Merger
Consideration and shall issue in the name of such Shareholder and deliver to
him a certificate representing his Definitive Merger Consideration in
accordance with Section 2.5.4 (the "Post-Closing Merger Consideration
Adjustment").
5
2.5 ADJUSTMENT.
2.5.1 CLOSING BALANCE SHEET PREPARATION.
Promptly after the Closing, the Shareholders will prepare a
balance sheet of the Company as of the Closing ("Preliminary Closing Balance
Sheet"). The Preliminary Closing Balance Sheet will be prepared in
accordance with generally accepted accounting principles and, to the extent
permitted thereby, on a basis consistent with the past practices of the
Company; PROVIDED, HOWEVER, that the preparation of the Closing Balance Sheet
may vary from generally accepted accounting principles by not taking into
account the accruals and adjustments identified as "GAAP Adjustments" on
Schedule 4.3.1(b) hereto. Seller caused the Company to conduct a physical
inventory as of March 7, 1999 (the "Pre-Closing Inventory"), the results of
which shall be accurately reflected in the Preliminary Closing Balance Sheet.
Based on the Preliminary Closing Balance Sheet, Shareholders will prepare a
written calculation of the Net Closing Indebtedness in accordance with the
provisions of Section 2.3(a), a written calculation of the Closing Working
Capital in accordance with the provisions of Section 2.3(b), and a written
calculation of the Net Worth Differential in accordance with the provisions
of Section 2.3(c), and based thereon, a calculation of the Post-Closing
Merger Consideration Adjustment in accordance with the provisions of Section
2.4 (the "Preliminary Post-Closing Merger Consideration Adjustment").
2.5.2 CLOSING BALANCE SHEET REVIEW.
Not later than forty-five (45) days after the Closing Date, the
Shareholders will deliver to Chart the Preliminary Closing Balance Sheet and
the Shareholders' calculation of the Preliminary Post-Closing Merger
Consideration Adjustment. All work papers, documents and records used or
generated by the Shareholders and their accountants and other representatives
in connection with the preparation of its Preliminary Closing Balance Sheet
and the calculation of the Preliminary Post-Closing Merger Consideration
Adjustment will be made available to Chart. Unless Chart gives the
Shareholders a written objection by the thirtieth (30th) day after Chart's
receipt of the Preliminary Closing Balance Sheet and the Preliminary
Post-Closing Merger Consideration Adjustment, the Preliminary Closing Balance
Sheet and the Preliminary Post-Closing Merger Consideration Adjustment will
become final and binding on the parties and shall be deemed to be the "Final
Closing Balance Sheet" and the "Final Post-Closing Merger Consideration
Adjustment," respectively.
2.5.3 CLOSING BALANCE SHEET DISPUTE.
If Chart objects to the Preliminary Closing Balance Sheet or to
the Preliminary Post-Closing Merger Consideration Adjustment and Chart and
the Shareholders are able to resolve their dispute within fifteen (15) days
after Chart's objection, the Preliminary Closing Balance Sheet and the
Preliminary Post-Closing Merger Consideration Adjustment (each as adjusted to
reflect such resolution) will become final and binding on the parties and
shall be deemed to be the "Final Closing Balance Sheet" and the "Final
Post-Closing Merger Consideration Adjustment," respectively. If Chart
objects to the Preliminary Closing Balance
6
Sheet or to the Preliminary Post-Closing Merger Consideration Adjustment and
Chart and the Shareholders are unable to resolve their dispute within fifteen
(15) days after Chart's objection, the dispute will be resolved in accordance
with the terms of this Agreement by the firm of Arthur Andersen LLP (the
"Independent Accountants"). The Independent Accountants will be instructed to
perform their services as expeditiously as possible. The resolution of the
Independent Accountants shall be presented in a "Final Closing Balance Sheet"
with respect to the Company and a "Final Post-Closing Merger Consideration
Adjustment" with respect to the Company, each prepared by the Independent
Accountants, which shall be final and binding on the parties. The fees and
expenses of the Independent Accountants for the resolution of any dispute
shall be paid by Chart and Shareholders in inverse proportion to the
respective amounts of the disputed matters which are resolved in their favor.
For example, if:
(a) Chart claims that the Final Post-Closing Merger Consideration
Adjustment should be $100;
(b) Shareholders claim that the Final Post-Closing Merger
Consideration Adjustment should be $20; and
(c) the Independent Accountants determine that the Final Post-Closing
Merger Consideration Adjustment is $40;
then the fees and expenses of the Independent Accountants would be paid 25%
by Shareholders (i.e., 20 DIVIDED BY 80), and 75% (i.e., 60 DIVIDED BY 80) by
Chart.
2.5.4 POST-CLOSING DELIVERY OF CHART COMMON STOCK.
(a) If, after giving effect to the Final Post-Closing Merger
Consideration Adjustment, a Shareholder's Definitive Merger Consideration
equals his Estimated Merger Consideration, then Chart will deliver to such
Shareholder, not more than seven (7) days after the Preliminary Post-Closing
Merger Consideration Adjustment becomes the Final Post-Closing Merger
Consideration Adjustment, the certificate representing his Estimated Merger
Consideration, together with any stock power deposited by such Shareholder
with Chart at the Closing for purposes of Section 2.5.4(b) hereof.
(b) If, after giving effect to the Final Post-Closing Merger
Consideration Adjustment, a Shareholder's Definitive Merger Consideration is
less than his Estimated Merger Consideration, then Chart will cancel the
certificate representing the Estimated Merger Consideration and, not more
than seven (7) days after the Preliminary Post-Closing Merger Consideration
Adjustment becomes the Final Post-Closing Merger Consideration Adjustment,
will issue and deliver to such Shareholder a new certificate representing his
Definitive Merger Consideration, which shall be dated as of the same date as
the certificate representing his Estimated Merger Consideration.
7
ARTICLE 3
SHAREHOLDERS' REPRESENTATIONS AND WARRANTIES CONCERNING THE TRANSACTION
The Company and each Shareholder jointly and severally represent and
warrant to Chart and to Merger Sub as follows:
3.1 AUTHORITY AND CAPACITY.
Each Shareholder possesses all requisite legal right, power,
authority and capacity to execute, deliver and perform this Agreement,
including the authority and capacity to sell and transfer his Company Shares
to Chart as provided by this Agreement. The Merger and this Agreement have
been duly authorized, approved and adopted by the Board of Directors of the
Company and by the shareholders of the Company in accordance with all
applicable requirements of the OGCL (including Section 1701.78 thereof), the
Articles of Incorporation of the Company, as amended, and the Code of
Regulations of the Company, as amended.
3.2 AUTHORIZED AND ISSUED STOCK.
The total authorized capital stock of the Company consists of
850 shares, all of which are Common Shares, without par value. Of such
authorized shares, a total of twenty (20) are issued and outstanding (each, a
"Company Share," and collectively, the "Company Shares"). Ten (10) of the
Company Shares are owned of record and beneficially by Mark A. Bauman
exclusively, and ten (10) of the Company Shares are owned of record and
beneficially by Patrick J. Flynn exclusively. All of the Company Shares have
been duly authorized and validly issued, are fully paid and nonassessable,
and have been issued in compliance with (and since issuance, have not been
transferred except in compliance with) all applicable federal and state
securities laws and any preemptive rights, rights of first refusal, or
similar rights of any person. There does not exist any right or security
granted or issued by the Company, either Shareholder or any other person to
cause the Company or either Shareholder to issue or sell any shares of
capital stock of the Company to any person (including, without limitation,
any stock option, warrant, convertible debt obligation, subscription for
stock or securities convertible into stock of the Company, or any other
similar right, security, instrument or agreement). Neither the Company nor
any Shareholder is a party to, and none of the Company Shares is subject to,
any close corporation agreement, voting trust agreement, buy-sell agreement,
or other similar agreement relating in any way to the voting or the transfer
of any Company Shares.
3.3 TITLE TO SHARES.
Each Shareholder owns all of the Company Shares that are issued
and outstanding in his name free and clear of all liens, charges, covenants,
conditions, adverse claims, demands, encumbrances, limitations, security
interests or other title defects or restrictions of any kind (collectively,
"Liens").
8
3.4 EXECUTION AND DELIVERY; ENFORCEABILITY.
This Agreement has been, and each other document, instrument or
agreement to be executed and delivered by the Company and each Shareholder in
connection herewith will upon such delivery be, duly executed and delivered
by the Company and such Shareholder, and constitutes, or will upon such
delivery constitute, the legal, valid and binding obligation of the Company
and each Shareholder, respectively, enforceable in accordance with its terms.
3.5 NONCONTRAVENTION.
Neither the Company nor either Shareholder is required to
submit any notice, report or other filing with any governmental authority in
connection with the execution, delivery or performance by the Company or
either Shareholder of this Agreement or any other document, instrument or
agreement to be executed and delivered by the Company or by either
Shareholder in connection herewith, and such execution, delivery and
performance will not violate any statute, rule, regulation, ordinance,
arbitration award, judgment, order or decree (each, a "Law") by which the
Company or either Shareholder is bound or any agreement to which the Company
or either Shareholder is a party. No consent, approval or authorization of
any governmental authority or any other person is required to be obtained by
the Company or either Shareholder in connection with the execution, delivery
and performance by the Company or either Shareholder of this Agreement or any
other document, instrument or agreement to be executed and delivered by the
Company or either Shareholder in connection herewith.
3.6 BROKERAGE.
No person is or will become entitled, by reason of any
agreement or arrangement entered into or made by or on behalf of the Company
or either Shareholder, to receive any commission, brokerage, finder's fee or
other similar compensation in connection with the consummation of any of the
transactions contemplated by this Agreement.
3.7 INVESTMENT INTENT; RESTRICTED SECURITIES.
Each Shareholder is acquiring the shares of Chart Common Stock
issuable to him in the Merger solely for his own account, for investment
purposes only, and not with a view to, or with any present intention of, any
resale or distribution of such shares. Each Shareholder understands and
acknowledges that none of the shares of Chart Common Stock issuable to him in
the Merger will be registered under the federal Securities Act of 1933, as
amended (the "1933 Act"), or qualified under the securities laws of any
state, in reliance upon specific exemptions thereunder for transactions not
involving any public offering; that all of such shares will constitute
"restricted securities" as defined in Rule 144 under the 1933 Act; and that,
as a result, all of such shares will generally be non-transferable for a
period of one year after the Closing. Each Shareholder understands and
acknowledges that: (i) such shares may not be transferred unless they become
registered under the 1933 Act, or unless it is established to Chart's
satisfaction that an exemption from such registration is available;
9
(ii) Chart will have no obligation to provide any such registration under the
1933 Act or to take such steps as are necessary to permit sale of any such
shares without such registration pursuant to Rule 144 or otherwise; (iii) all
certificates representing such shares will bear an appropriate legend
concerning the foregoing restrictions on transfer; and (iv) Chart's stock
transfer agent and registrar will be advised of the foregoing restrictions on
transfer and will be instructed to notify Chart of any attempted transfer of
such shares in violation of such restrictions. Each Shareholder acknowledges
that he has received the Chart SEC Documents (as defined below), and has been
given the opportunity to ask questions of and receive answers from Chart's
officers concerning Chart, its business and the risks associated with an
investment in the Chart Common Stock, and the terms and conditions of this
Agreement. All such questions have been answered to each Shareholder's
satisfaction, and each Shareholder has been supplied with all additional
information and documents requested and deemed necessary by him to make an
informed investment decision with respect to the Chart Common Stock being
acquired by him pursuant to this Agreement. Each Shareholder, either by
reason of his net worth, his income, or both, is an "accredited investor" as
defined in Rule 501(a) of Regulation D under the 1933 Act, or, either alone
or with a purchaser representative, has extensive knowledge and experience in
financial and business matters and is capable of evaluating the merits and
risks of investing in and holding the Chart Common Stock, and has the ability
to bear the economic risks of his investment in the Chart Common Stock.
ARTICLE 4
SHAREHOLDERS' REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY
The Company and Shareholders jointly and severally represent
and warrant to Chart and to Merger Sub as follows.
4.1 ORGANIZATION.
4.1.1 ORGANIZATION AND POWER.
The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Ohio. The Company has
full corporate power to own, lease and operate its assets and carry on its
business as and where such assets are now owned or leased and as such
business is presently being conducted.
4.1.2 QUALIFICATION.
Schedule 4.1.2 lists each state or foreign country in which the
Company (i) owns or leases real property, (ii) has employees or sales agents,
or (iii) maintains inventory. The Company is qualified to do business as a
foreign corporation in each of the states and foreign countries listed in
Schedule 4.1.2. The Company is not required to be qualified to do business
in any other state or foreign country where the failure to be so qualified
would have a material adverse effect on the Company.
10
4.1.3 OTHER VENTURES.
The Company does not have any ownership interest in any other
business entity, is not a member of any partnership, joint venture or limited
liability company, and has never operated as a subsidiary or division of any
other corporation or other business entity.
4.1.4 {Intentionally omitted.}
4.2 AGREEMENTS.
4.2.1 {Intentionally omitted.}
4.2.2 {Intentionally omitted.}
4.2.3 CONSENTS.
Except as set forth on Schedule 4.2.3, no approval or consent
of, or filing with, any person, entity or governmental authority is required
to be obtained by the Company in connection with the transactions
contemplated hereby or the execution, delivery or performance by the Company
or Shareholders of this Agreement or any other agreement or document
delivered or to be delivered by or on behalf of Shareholders or the Company.
4.2.4 NO CONFLICTS.
Except as set forth on Schedule 4.2.4, no action taken by or on
behalf of Shareholders or the Company in connection herewith, including but
not limited to the execution, delivery and performance of this Agreement by
Shareholders and the Company and each other agreement and document to be
delivered by Shareholders or the Company in connection herewith, (i) gives
rise to a right of termination or acceleration or the loss or impairment of
any material right or benefit under any Contract by which the Company or any
of its assets is bound, (ii) disrupts or impairs any business relationship
which the Company has with any dealer, distributor, sales representative,
supplier or customer, (iii) conflicts with or violates any law, the Company's
Articles of Incorporation, the Company's Code of Regulations, any Contract by
which the Company or a Shareholder is bound, or any order, arbitration award,
judgment, decree or other similar restriction to which the Company or a
Shareholder is subject, or (iv) constitutes an event which, after notice or
lapse of time or both, could result in any of the foregoing.
4.3 FINANCIAL.
4.3.1 FINANCIAL RECORDS.
(a) Schedule 4.3.1(a) consists of (i) the balance sheets of
the Company as of December 31, 1997, 1996 and 1995 and the related statements
of income and retained earnings for the twelve-month periods then ended, and
(ii) the balance sheet of the Company as of
11
November 30, 1998, and the related income statement for the 11-month period
then ended, and (iii) the balance sheet of the Company as of January 31, 1999
(the "Acquisition Balance Sheet"), all as prepared by the Company.
(b) Except as expressly disclosed in Schedule 4.3.1(b), all
such financial statements were prepared from the Company's books of account
in accordance with generally accepted accounting principles, consistently
applied, are accurate and complete, and present fairly the financial position
and results of operations of the Company at the dates and for the periods
indicated, except, in the case of the Acquisition Balance Sheet and related
income statement, for customary year-end adjustments of a normal recurring
type which would not be material in the aggregate and the absence of
footnotes. The books of account of the Company accurately reflect all items
of income and expense (including, but not limited to, accruals) and all
assets and Liabilities of the Company in accordance with normal accrual
accounting practices, subject to customary year-end adjustments of a normal,
recurring type which would not be material in the aggregate.
As used in this Agreement, the term "Liability" means and
includes any responsibility, obligation, duty, commitment, claim or
liability, whether known or unknown, accrued, absolute, contingent or
otherwise.
4.3.2 LIABILITIES.
The Company has no Liabilities except (i) to the extent
provided for or reserved against on the Acquisition Balance Sheet, (ii)
current Liabilities which have arisen in the ordinary course of business
consistent with past practice since the date of the Acquisition Balance Sheet
(all of which have been recorded on the Company's books), or (iii) as listed
on Schedule 4.3.2. Since the date of the Acquisition Balance Sheet, there has
not been any incurrence (whether discharged or not) of any Liability by the
Company other than current Liabilities incurred in the ordinary course of
business consistent with past practice.
4.3.3 NO CHANGES.
Since the date of the Acquisition Balance Sheet, the Company
has been operated only in the ordinary course, consistent with past practice.
Since that date, there has not been any adverse change, or event or
circumstance which might reasonably be expected to result in an adverse
change, in the Company's assets, Liabilities, operating performance, business
relationships or prospects. Since the date of the Acquisition Balance Sheet,
there has been no change in any accounting policy or practice of the Company,
including practices with respect to the payment of accounts payable or the
collection of accounts receivable. Since the date of the Acquisition Balance
Sheet, the Company has not paid any dividend (whether in cash or in property)
or engaged in any transaction that has resulted in any shareholder of the
Company, any relative of a shareholder of the Company, or any entity
affiliated with any such shareholder or relative receiving any direct or
indirect economic benefit, other than payments of normal wages, salaries or
rents, and reimbursement of deductible business expenses actually incurred in
the ordinary course of business.
12
4.3.4 TAXES.
All tax returns, reports and declarations (collectively, "Tax
Returns") required by any governmental authority to be filed in connection
with the properties, business, income, expenses, net worth or franchises of
the Company have been timely filed, and all such Tax Returns are correct and
complete. Shareholders have delivered to Chart copies of each of the
Company's most recent federal, state and local Tax Returns. All governmental
taxes, charges or assessments and related deficiencies, interest and
penalties (collectively, "Taxes") due in connection with the properties,
business, income, expenses, net worth or franchises of the Company have been
paid. There are no Tax claims, audits or proceedings pending in connection
with the properties, business, income, expenses, net worth or franchises of
the Company, and, to the best knowledge of Shareholders and the Company,
there are no such threatened claims, audits or proceedings.
4.4 LEGAL.
4.4.1 COMPLIANCE WITH LAWS.
The Company is not in violation of (i) any outstanding
arbitration award, judgment, order or decree, or (ii) any law, regulation or
ordinance (each, a "law"), including any law relating to discrimination,
employment practices, protection of the environment, occupational health or
safety, working conditions, payroll withholding, pensions, zoning, or Taxes.
Except as disclosed on Schedule 4.4.1, there have been no allegations of or
inquiries concerning any violations of any law by the Company within the past
three years. Neither Shareholders nor the Company have received any notice or
allegation from any governmental authority of any jurisdiction to the effect
that the Company is or might be required to acquire or modify any asset or
change any aspect of its business operations in order to comply with any
applicable law. Except as listed on Schedule 4.4.1, no permits, licenses,
approvals or authorizations of any governmental authority are required to
conduct the Company's business. All such permits, licenses, approvals and
authorizations have been legally obtained and maintained by the Company and
are in full force and effect. No proceeding is pending to revoke or limit
any of them or otherwise to impose any conditions or obligations on the
possession or transfer of any of them. In addition, there is no state of
facts or event which could reasonably be expected to form the basis for any
revocation or limitation of them or other imposition of conditions or
obligations on the possession or transfer of any of them. In the past three
years, there have been no claims, notices, orders or directives issued by any
governmental authority with respect to the business of the Company or any of
the Company's assets. The Company is not required to make, and has no
reasonable expectation that it will be required to make in order to operate
its business after the Closing, any expenditures to achieve or maintain
compliance with any law, except in amounts similar to those reflected in the
financial statements contained on Schedule 4.3.1.
4.4.2 PRODUCT AND SERVICE WARRANTIES.
Except as set forth on Schedule 4.4.2, there have been no product
warranty or service warranty claims made by customers of the Company in the past
three years and there
13
are no product warranties or service warranties outstanding or currently
being offered to customers of the Company.
4.4.3 PRODUCT LIABILITY.
Except as set forth on Schedule 4.4.3, no claims alleging
bodily injury or property damage as a result of any defect in the design or
manufacture of any product or the breach of any duty to warn, test, inspect
or instruct of dangers therein (each a "Product Liability Claim"), have been
made or threatened against the Company within the past three years. There
are no defects in the design or manufacture of products manufactured or sold
by the Company which defects could result in a Product Liability Claim, and
there has not been any failure by the Company to warn, test, inspect or
instruct of dangers which could form the basis for a product recall or any
Product Liability Claim against the Company.
4.4.4 LITIGATION.
Except as set forth on Schedule 4.4.4, no claim, litigation,
investigation or proceeding is pending or, to the knowledge of Shareholders
and the Company, threatened against the Company or involving the Company has
been concluded in the past three years, and there is no state of facts or
event which could reasonably be expected to form the basis for such a claim,
litigation, investigation or proceeding. No arbitration award, judgment,
order, decree or similar restriction is outstanding against or relating to
the Company or its assets, business or products.
4.5 BUSINESS.
4.5.1 EMPLOYMENT.
The Company employs a total of not more than five (5)
employees. The Company does not use any leased or temporary employees.
Schedule 4.5.1 lists the names, current annual compensation rates and other
compensation arrangements of all of the Company's employees whose
compensation paid or accrued during 1998 exceeded $50,000.00 on an annualized
basis. The Company has paid in full to all employees, or made appropriate
accruals for on its books of account, all wages, commissions, bonuses and
other direct compensation for all services performed by its employees. The
Company has withheld or collected from each payment made to each of its
employees the amount of all Taxes required to be withheld or collected
therefrom, and the Company has paid the same when due to the proper
governmental authorities. Except as set forth on Schedule 4.5.1, during the
past three years there have been no controversies, grievances or claims by
any of the employees, former employees or beneficiaries of any employees of
the Company with respect to their employment or employment benefits,
including but not limited to any discrimination claims, sexual harassment
claims or workers' compensation claims. There is no union representation of
any of the Company's employees and, to the knowledge of Shareholders and the
Company, there has never been any attempt by a labor organization to organize
the Company's employees into a collective bargaining unit. Since the date of
the Acquisition Balance Sheet, there has not
14
been any general increase made or promised in the level or rate of salaries
or other compensation of any of the Company's employees.
4.5.2 EMPLOYMENT TERMINATION.
Except as set forth on Schedule 4.5.2, upon the termination of
employment of any of the Company's employees, the Company will not by reason
of anything done prior to or at the Closing be liable to any of its employees
for so-called "severance pay" or any other payments. To the knowledge of
Shareholders and the Company, none of the employees of the Company intends to
resign or seek other employment as a result of the transactions contemplated
hereby or otherwise.
4.5.3 CONTRACTS.
As used in this Agreement, the term "Contracts" means and
includes all agreements, contracts, leases, licenses, purchase or sales
orders, commitments, promises and similar arrangements evidencing or creating
any obligation, whether written or oral. Schedule 4.5.3 contains a complete
and accurate list of:
(a) all Contracts to which the Company is a party or by
which it is bound, involving amounts in excess of $50,000.00 or which are
cancelable by the Company only after giving at least 30 days' notice;
(b) all loan, financing, security, credit or other Contracts
evidencing or relating to indebtedness, guarantees or Liens;
(c) all Contracts with distributors, dealers or sales
representatives;
(d) all management, employment, consulting, or agency
Contracts and all collective bargaining Contracts;
(e) all Contracts providing employee benefits;
(f) all Contracts which contain an obligation of
confidentiality with respect to information furnished by the Company to a
third party or received by the Company from a third party;
(g) all Contracts containing covenants limiting the freedom
of the Company to compete in any line of business or with any person or in
any geographic area or market;
(h) all Contracts relating to patents, trademarks, trade
names or copyrights or applications for any of the foregoing, inventions,
trade secrets or other proprietary information;
(i) all Contracts relating to the past or present disposal
of waste;
15
(j) all Contracts pursuant to which the Company leases or
subleases any real property, or any interest therein, from or to any person;
(k) all Contracts pursuant to which the Company leases or
subleases any personal property, or any interest therein, from or to any
person;
(l) all Contracts with any shareholder, officer, director,
consultant or employee of the Company, or any relative of any of the
foregoing, or any corporation, partnership, limited liability company or
other entity directly or indirectly owned or controlled by a Shareholder, or
one or more of his relatives; and
(m) all other Contracts entered into other than in the
ordinary course of business consistent with past practice, including but not
limited to Contracts (i) with suppliers for the purchase of goods or services
in excess of normal requirements or at prices in excess of the current market
price, (ii) for the sale by the Company of goods or services at prices not
reasonably calculated to produce gross profit margins consistent with those
achieved by the Company during its three prior fiscal years, or (iii) which
contain terms or conditions which the Company cannot reasonably expect to
fulfill in their entirety.
Shareholders have delivered to Chart accurate and complete copies of each
such written Contract, and an accurate and complete written description of
each such oral Contract, in each case with all modifications and amendments
thereto. Since the date of the last year-end balance sheet included in the
financial statements on Schedule 4.3.1, there has been no modification or
termination of any Contract under circumstances which might have an adverse
effect on the Company.
4.5.4 COMPLIANCE WITH CONTRACTS.
With respect to each Contract which is required to be disclosed
on any Schedule to this Agreement, (i) the Company is not in default under or
in violation thereof, and (ii) no event has occurred which, with notice or
lapse of time or both, would constitute such a default or violation. There
have been no discussions or correspondence concerning the breach by the
Company of, or the termination of, any of such Contracts. To the knowledge
of Shareholders and the Company, there is no default under or violation of
any such Contract by any other party thereto.
4.5.5 INSURANCE.
Schedule 4.5.5 lists all insurance policies maintained by the
Company and identifies for each such policy the following information:
underwriter, policy number, coverage type, premium, expiration date, coverage
amount and deductible. All such policies are in full force and effect, and
all premiums have been paid. The Company is not, and has not been at any
time, subject to Liability as a self-insurer. Schedule 4.5.5 also sets forth
a description of all claims pending under such insurance policies.
16
4.5.6 CUSTOMERS AND SUPPLIERS.
No customer or supplier which has accounted for more than two
percent (2%) of the Company's sales or purchases in the past year and no
other customer or supplier material to the Company's business (including any
supplier which is the Company's sole source of supply of any product or
service) has terminated, or threatened to terminate, its relationship with
the Company or has during the past year decreased or delayed materially, or
threatened to decrease or delay materially, its purchases from the Company or
its sale of services or supplies to the Company, and there is no state of
facts or event which could reasonably be expected to form the basis for such
a decrease or delay. To the knowledge of Shareholders and the Company, the
transactions contemplated by this Agreement will not adversely affect the
relationship of the Company with any customer or supplier. The Company is
not required, in the ordinary course of business, to provide any bonding or
any other financial security arrangements in connection with transactions
with any supplier.
4.5.7 PURCHASES AND SALES.
Since the date of the most recent year-end balance sheet
included in the financial statements on Schedule 4.3.1, the Company has not
made any purchase commitments in excess of its normal business requirements
and there has not been any reduction in the aggregate dollar volume of the
Company's backlog of sales orders.
4.5.8 PREPAYMENTS AND DEPOSITS.
Except as disclosed on Schedule 4.5.8, the Company has not
received any prepayments or deposits from customers for products to be
shipped, or for services to be performed, after the Closing.
4.5.9 CAPITAL PROJECTS.
Schedule 4.5.9 contains a description of all capital projects
committed for or authorized by the Company involving the expenditure of
$10,000.00 or more. Except as disclosed on Schedule 4.5.9, the estimated
aggregate cost of completing all capital projects does not exceed $50,000.00.
4.6 EMPLOYEE BENEFITS.
Except as otherwise set forth on Schedule 4.6, the Company does
not maintain and is not required to contribute to any employee benefit plan,
welfare benefit plan or pension plan. Shareholders have delivered to Chart
accurate and complete copies of each such written plan, and an accurate and
complete written description of each such oral plan, in each case with all
modifications and amendments thereto. Each employee benefit plan, welfare
benefit plan or pension plan maintained by the Company has been operated in
accordance with its terms and all applicable laws. The Company has not
engaged in any prohibited transaction with respect to any employee benefit
plan which it maintains or to which it contributes. The Company has the
right to amend or terminate, without the consent of any other person or
17
entity, any employee benefit plan which it maintains, except as otherwise
prohibited by law. No welfare benefit plan maintained by the Company is
funded by a trust or fails to satisfy any applicable requirement for
tax-favored treatment. There are no unfunded benefit liabilities or
accumulated funding deficiencies under any pension plan maintained by the
Company. The Company is not required, nor has it ever been required, to
contribute to or with respect to any multiemployer plan.
4.7 ASSETS.
4.7.1 TITLE.
Except as set forth on Schedule 4.7.1, the Company owns, with
good title, and in every case free and clear of all Liens, all of the
properties and assets which it purports to own (whether real, personal or
mixed, and whether tangible or intangible), including all properties and
assets reflected on the Acquisition Balance Sheet (other than assets disposed
of in the ordinary course of business since the date of the Acquisition
Balance Sheet).
4.7.2 RECEIVABLES.
All of the Company's accounts receivable represent valid
obligations arising from sales actually made or services actually performed.
None of the Company's accounts receivable is subject to any set-off or
counterclaim, and, to the knowledge of Shareholders and the Company, all of
the Company's accounts receivable are collectible to the extent included on
the Final Closing Balance Sheet. Schedule 4.7.2 sets forth a 30/60/90 day
aging summary of the Company's accounts receivable as of January 31, 1999.
Shareholders have delivered to Chart the Company's complete aging schedule of
accounts receivables as of such date.
4.7.3 INVENTORIES.
All inventory has been valued on the Acquisition Balance Sheet
and on the Company's records and books of account at the lower of cost
(determined on a first-in, first-out basis) or market value on a basis
consistent with that reflected in the annual financial statements included on
Schedule 4.3.1. Obsolete inventory and inventory of below-standard quality
has been written down to amounts not in excess of net realizable value. All
of the Company's finished goods inventories are currently salable in the
ordinary course of business consistent with past practice at gross profit
margins consistent with the levels reflected in the annual financial
statements included on Schedule 4.3.1. All of the Company's work-in-process,
raw materials and supplies inventories can be used or consumed in the usual
and ordinary course of business as now conducted and are not in amounts in
excess of normal requirements. The Pre-Closing Inventory was conducted in
accordance with the Company's past practices and will be accurately reflected
in the Preliminary Closing Balance Sheet. The Company's actual inventories
as of the Closing will be the same as reflected in the Pre-Closing Inventory
except for sales or purchases of inventory in the ordinary course of business
during the period from March 7, 1999, to the Closing.
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4.7.4 ENVIRONMENTAL MATTERS.
The Company has not generated, used, treated, released, stored
or disposed of any Hazardous Substances or any Hazardous Waste (as such terms
are hereinafter defined) in a manner that has caused or could cause the
Company or Chart to incur any Liability under any applicable laws. The
Company has complied in all respects with all federal, state and local
environmental laws, rules and regulations applicable to the Company and its
operations. To the knowledge of Shareholders and the Company, there are no
underground storage tanks located on (nor, to the knowledge of Shareholders
and the Company, have any underground storage tanks been removed from) any
real property currently owned or leased by the Company or formerly owned or
leased by the Company. For purposes of this Agreement, the term "Hazardous
Substances" shall have the meaning set forth in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended,
and the regulations thereunder, or as defined by any similar law of any
jurisdiction where the Company has conducted business or has generated, used,
treated, released, stored or disposed of any Hazardous Substances, and also
shall include petroleum products, asbestos, urea formaldehyde and
polychlorinated biphenyls. For purposes of this Agreement, the term
"Hazardous Waste" shall have the meaning set forth in the Resource
Conversation and Recovery Act, as amended, and the regulations thereunder, or
as defined by any similar law of any jurisdiction where the Company has
conducted business or has generated, used, treated, released, stored or
disposed of any Hazardous Waste. To the knowledge of Shareholders and the
Company, there has not been any release of Hazardous Substances or Hazardous
Waste at or from any properties adjacent to any current or former facilities
of the Company. To the knowledge of Shareholders and the Company, there are
no materials containing asbestos or urea formaldehyde incorporated into the
building or interior improvements that are part of the Company's owned or
leased facilities, and there is no equipment or fixture containing any
polychlorinated biphenyls located at any of the Company's owned or leased
facilities.
4.7.5 CONDITION.
All of the Company's tangible assets, and all of the tangible
assets leased by the Company, are in good operating condition, normal wear
and tear excepted, neither require nor are reasonably expected to require any
special or extraordinary expenditures to remain in such condition beyond
maintenance and repairs necessary in the ordinary course of business, and are
capable of being used for their intended purpose in the ordinary course of
business consistent with past practice.
4.7.6 LOCATION.
All of the Company's assets are located at the address or
addresses set forth on Schedule 4.7.6.
4.7.7 INTELLECTUAL PROPERTY.
Schedule 4.7.7 lists all Intellectual Property Rights (as
defined below) owned by the Company or in which (as noted on such Schedule)
the Company has any rights or licenses.
19
To the knowledge of Shareholders and the Company, there has not been any
infringement or alleged infringement by others of any such Intellectual
Property Rights. Except as set forth on Schedule 4.7.7, the Company is not a
party to any Contract, whether as licensor, licensee, franchisor, franchisee,
dealer, distributor or otherwise, with respect to any Intellectual Property
Rights. The Company has the right to use all Intellectual Property Rights as
are necessary to enable the Company to conduct, and to continue to conduct
after the Closing, all phases of its business in the manner presently
conducted by the Company, and that use has not conflicted with, infringed
upon or otherwise violated any rights of any person or entity. The
Intellectual Property Rights listed on Schedule 4.7.7 are valid and in full
force and effect and are not subject to any Taxes, maintenance fees, or
actions falling due within the next three months. Except as set forth on
Schedule 4.7.7, there have been no interference actions or other judicial,
arbitration or other adversary proceedings concerning the Intellectual
Property Rights listed on Schedule 4.7.7. The Company has not infringed any
intellectual property right or other right of any other person or entity. To
the knowledge of Shareholders and the Company, none of the Intellectual
Property Rights has been used, divulged or appropriated for the benefit of
any past or present employees of the Company or any other person or entity,
or to the detriment of the Company. The Company has not disposed of or
permitted to lapse, or otherwise failed to preserve the Company's right to
use, any rights referenced in this Section 4.7.7.
"Intellectual Property Rights" means and includes all
intellectual property, including trade names, trademarks and service marks
and all registrations and applications therefor, together with the goodwill
of the business symbolized or represented by the foregoing, mask works, works
of authorship and all copyrights related thereto and all registrations and
applications therefor, inventions, discoveries, designs, industrial models
and all patent rights relating thereto and all applications therefor and all
reissues, divisions, continuations and extensions thereof, know-how, trade
secrets, processes, technology, discoveries, formulae and procedures.
4.7.8 EXTENT.
The Company owns, or has a valid and subsisting interest as a
lessee or licensee in, and in any case has the right to hold and to use, all
assets (whether real, personal or mixed, and whether tangible or intangible)
which have been used to conduct its business in the ordinary course as such
business is presently being conducted. Since the date of the most recent
fiscal year-end balance sheet included on Schedule 4.3.1, there has not been
any damage to or disposition (except for the sale of inventory in the
ordinary course of business consistent with past practice) or loss of
(whether or not covered by insurance) any asset of the Company. Over the
period covered by the financial statements included on Schedule 4.3.1, no
aspect of the business of the Company was conducted by any affiliate of the
Company or any affiliate of a Shareholder or any former shareholder of the
Company.
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4.8 REAL PROPERTY.
Complete and accurate legal descriptions of all real property
owned or leased by the Company are set forth on Schedule 4.8. There is no
state of facts or event which could reasonably be expected to form the basis
for any condemnation proceedings which could effect such real property or any
future improvements by any public authority, any part of the cost of which
could be assessed against such real property. In the past three years, the
Company has not experienced any interruption in the delivery of adequate
utilities required in the operation of its business. The roof and foundation
of the real property owned or leased by the Company are watertight and free
of leaks, seepages and moisture.
4.9 ADDITIONAL MATTERS.
4.9.1 CONFLICTS OF INTEREST.
Except as set forth on Schedule 4.9.1, no shareholder, director
or employee of the Company, nor any relative of any shareholder, director or
employee of the Company, nor any affiliate of any of the foregoing, (i) owns,
directly or indirectly, any interest in, or is an employee or agent of, any
entity which is a competitor, lessor, lessee, customer or supplier of the
Company, (ii) owns, directly or indirectly, any interest in any tangible or
intangible property, asset or right which the Company uses in its business,
(iii) has any cause of action or claim against, owes any amount to, or is
owed any amount by the Company other than salary and reimbursement of
deductible business expenses in the ordinary course of business, or (iv) is a
party to any Contract with the Company.
4.9.2 FULL DISCLOSURE.
No representation or warranty by Shareholders or the Company in
this Agreement, and no statement contained in any Schedule to this Agreement,
contains any untrue statement of a material fact, or omits to state a
material fact necessary to make the statements contained therein, in light of
the circumstances in which they are made, not misleading. To the knowledge
of Shareholders and the Company, there is no event or circumstance which
Shareholders or the Company have not disclosed to Chart in writing which
adversely affects or could reasonably be expected to adversely affect the
business, prospects, or condition (financial or otherwise) of the Company or
the ability of the Company or Shareholders to perform this Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF CHART AND MERGER SUB
Chart and Merger Sub jointly and severally represent and
warrant to Shareholders and the Company as follows:
21
5.1 ORGANIZATION AND POWER.
Chart is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. Merger Sub is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Ohio. Each of Chart and Merger Sub has full corporate
power to execute, deliver and perform this Agreement and all other agreements
and documents to be executed and delivered by it in connection herewith.
5.2 AGREEMENTS.
5.2.1 ENFORCEABILITY.
All requisite corporate action to approve, execute, deliver and
perform this Agreement and each other agreement and document delivered or to
be delivered by Chart or Merger Sub in connection herewith has been taken by
Chart and Merger Sub, respectively. This Agreement and every other agreement
and document delivered or to be delivered by Chart or Merger Sub in
connection herewith has been, or upon delivery will be, duly executed and
delivered by Chart and Merger Sub, respectively, and constitutes a binding
obligation of Chart and Merger Sub, respectively, enforceable in accordance
with its terms.
5.2.2 CONSENTS.
No approval or consent of, or filing with, any person, entity
or governmental authority is required in connection with the transactions
contemplated hereby or the execution, delivery or performance by Chart or
Merger Sub of this Agreement or any other agreement or document delivered or
to be delivered by or on behalf of Chart or Merger Sub in connection
herewith, except for filings required to be made by Chart or its affiliates
under the Securities Exchange Act of 1934, as amended, and the regulations
thereunder.
5.2.3 NO CONFLICTS.
No action taken by or on behalf of Chart or Merger Sub in
connection herewith, including, but not limited to, the execution, delivery
and performance of this Agreement and each other agreement and document
delivered or to be delivered by it in connection herewith, (i) conflicts with
or violates any law, Chart's Certificate of Incorporation and By-Laws, each
as amended, Merger Sub's Articles of Incorporation or Code of Regulations,
each as amended, or any Contract by which Chart or Merger Sub is bound, or
(ii) constitutes an event which, after notice or lapse of time or both, could
result in any of the foregoing.
5.3 SEC DOCUMENTS; ABSENCE OF CERTAIN CHANGES.
Chart has delivered to Shareholders complete and accurate
copies of Chart's (i) Annual Report to Stockholders for the fiscal year ended
December 31, 1997, (ii) Annual Reports on Form 10-K as filed with the United
States Securities and Exchange Commission (the "SEC") with respect to the
fiscal years ended December 31, 1997 and 1998, (iii) Proxy Statement dated
March 31, 1998, with respect to Chart's 1998 annual meeting of stockholders,
22
(iv) Quarterly Reports on Form 10-Q as filed with the SEC with respect to the
quarters ended March 31, June 30 and September 30, 1998, and (v) Current
Reports on Form 8-K dated February 16, 1999, April 27, 1998, March 30, 1998,
and March 27, 1998 (collectively, the "Chart SEC Documents"). The Chart SEC
Documents were true and complete in all material respects as at their
respective dates, and did not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary
to make the statements contained therein, in light of the circumstances in
which they were made, not misleading. Since the filing of its Quarterly
Report on Form 10-Q with respect to the quarter ended September 30, 1998,
there has not been any material adverse change in Chart's business condition
(financial or otherwise), results of operations or liabilities not reflected
in the Chart SEC Documents.
5.4 CHART COMMON STOCK.
Each share of Chart Common Stock issuable to Shareholders by
virtue of the Merger pursuant to Section 2.2 hereof shall upon issuance
thereof, and against delivery to Chart of the Company Shares in accordance
with the terms hereof, be duly authorized, validly issued, fully paid and
nonassessable.
ARTICLE 6
CLOSING; CLOSING CONDITIONS
6.1 CLOSING.
The consummation of the purchase and sale of the Shares and the
other transactions contemplated hereby (the "Closing") shall take place
simultaneously with the execution and delivery of this Agreement on the date
hereof, or on such other date as Chart and the Company may agree in writing,
and in any event simultaneously with the filing of the Certificate of Merger
pursuant to Section 1.5, at the offices of Calfee, Halter & Griswold LLP at
800 Superior Avenue, Suite 1400, Cleveland, Ohio 44114, or at such other
place as Chart and the Company may agree in writing. The date on which the
Closing occurs is referred to herein as the "Closing Date." The transfers
and deliveries described in this Article 6 shall be mutually interdependent
and shall be regarded as occurring simultaneously, and, notwithstanding any
other provision of this Agreement, no such transfer or delivery shall become
effective or shall be deemed to have occurred until all of the other
transfers and deliveries provided for in this Article 6 shall also have
occurred or have been waived. Such transfers and deliveries shall be deemed
to have occurred and the Closing shall be effective as of the commencement of
business of the Company on the Closing Date.
6.2 CONDITIONS TO CHART'S AND MERGER SUB'S OBLIGATION.
The obligation of Chart and of Merger Sub to perform this
Agreement is subject to satisfaction of the following conditions at or before
the Closing:
23
(a) AGREEMENTS PERFORMED. Shareholders and the Company
shall have performed all of the obligations under this Agreement to be
performed by them at or before the Closing;
(b) REPRESENTATIONS AND WARRANTIES ACCURATE. The
representations and warranties of Shareholders and the Company contained
herein shall continue to be accurate in all material respects just as if made
at and as of the Closing;
(c) CERTIFICATE OF SHAREHOLDERS AND COMPANY. Chart and
Merger Sub shall have received a certificate from Shareholders and the
Company certifying as to the fulfillment of the conditions set forth in
Sections 6.2(a) and 6.2(b), signed by Shareholders and the Company by its
chief executive officer;
(d) FILINGS. All applicable governmental filings necessary
to consummate the Merger in accordance with the OGCL and any other applicable
laws, including the filing of the Certificate of Merger with the Secretary of
State of Ohio, shall have been duly executed and made.
(e) GOOD STANDING. Chart and Merger Sub shall have received
a certificate as to the Company's good standing, dated no more than 10 days
prior to the Closing Date, from the secretary of state of Ohio and of each
other state in which the Company is qualified to do business as a foreign
corporation;
(f) NO CHANGE. There shall not have occurred any material
adverse change, or any event, fact or circumstance which might reasonably be
expected to result in a material adverse change, in the financial condition,
results of operations, assets, business or prospects of the Company;
(g) LEGAL ACTION. There shall be no pending or threatened
legal action or inquiry which challenges the validity or legality of or seeks
to or could reasonably be expected to prevent, delay or impose conditions on
the consummation of the transaction contemplated by this Agreement;
(h) MINUTE AND STOCK RECORD BOOKS. Shareholders and the
Company shall have delivered to Chart and Merger Sub the complete originals
of all existing corporate minute books and stock record books of the Company;
(i) SHARE CERTIFICATES. Shareholders shall have delivered
to Chart all certificates evidencing or representing all of the Company
Shares, in each case duly endorsed for transfer to Chart or in blank, or
accompanied by a stock power duly endorsed to Chart or in blank, and
otherwise in proper form for transfer to Chart, free and clear of all Liens;
(j) CONSENTS. Chart and Merger Sub shall have received all
consents, approvals, permits, licenses and registrations of all persons,
entities, and governmental authorities necessary for Chart, Merger Sub,
Shareholders and the Company to execute,
24
deliver and perform this Agreement and for the Company to continue operate
its business as heretofore conducted;
(k) STOCK POWERS. Each Shareholder shall have delivered to
Chart a stock power, duly executed by such Shareholder in blank, with respect
to the certificate representing his Estimated Merger Consideration, to be
held by Chart with such certificate for purposes of Section 2.5.4(b) hereof
or returned to such Shareholder pursuant to Section 2.5.4(a) hereof;
(l) RELEASE OF GUARANTY. The Company shall have received an
unconditional release of its obligations under that certain Commercial
Guaranty, dated September 3, 1998, by the Company in favor of Heller
Financial, Inc., and evidence of such release shall have been given to Chart;
(m) {Intentionally omitted.}
(n) OTHER CLOSINGS. The "Closing," as defined in that
certain Asset Purchase Agreement, dated as of the date of this Agreement (the
"Asset Purchase Agreement"), by and among Northcoast Acquisition Corp., an
Ohio corporation ("Northcoast Acquisition"), Northcoast of Texas Cryogenics,
Inc. ("Northcoast/Texas"), Northcoast of Kansas Cryogenics, Inc.
("Northcoast/Kansas"), and Shareholders with respect to substantially all of
the assets of Northcoast/Texas and Northcoast/Kansas, shall have occurred;
and the "Closing," as defined in that certain Stock Purchase Agreement, dated
as of the date of this Agreement (the "Stock Purchase Agreement"), by and
between Northcoast Acquisition and Mark A. Bauman with respect to all of the
outstanding capital stock of Northcoast of America Cryogenic Inc., an Ohio
corporation ("Northcoast/America"), shall have occurred;
(o) AFFILIATE RECEIVABLES. All accounts receivable of and
notes payable to the Company from Shareholders or from any entity directly or
indirectly controlled by a Shareholder (other than Northcoast/Texas,
Northcoast/Kansas, or Northcoast/America) shall have been repaid to the
Company in full, and Shareholders shall have delivered evidence of such
repayment to Chart and Merger Sub;
(p) VEHICLE. Shareholders shall have purchased or caused to
have been purchased from the Company the 1995 Dodge Stealth automobile
referenced in that certain Simple Interest Note and Security Agreement, dated
January 27, 1996, between the Company and Fifth Third Bank of Northwest Ohio,
N.A. (the "Automobile Note"), for cash at a price equal to the unpaid
principal amount and all accrued but unpaid interest (including prepayment
premiums, if any) on the Automobile Note, all measured as of November 30,
1998, and Shareholders shall have delivered evidence of such purchase to
Chart and Merger Sub;
(q) SHAREHOLDER PAYABLE. The Company shall have been
released and discharged of all liability for and under a certain note payable
by the Company to Patrick J. Flynn in the amount of $2,500.00 as reflected on
the balance sheet of the Company as of November 30, 1998, and Shareholders
shall have delivered evidence of such forgiveness to Chart.
25
(r) RESIGNATIONS AND RELEASES. Chart shall have received
the written resignations of all Directors and officers of the Company from
their respective directorships and offices as of the Closing, and shall have
received from each Shareholder a duly executed general release of claims
against the Company;
(s) OTHER. Chart and Merger Sub shall have received each
other document required to be delivered to them hereunder.
Any agreement or document to be delivered to Chart or Merger Sub pursuant to
this Section 6.2, the form of which is not attached to this Agreement as an
exhibit, shall be in form and substance satisfactory to Chart and Merger Sub.
6.3 CONDITIONS TO SHAREHOLDERS' AND COMPANY'S OBLIGATIONS.
The obligations of Shareholders and the Company to perform this
Agreement are subject to satisfaction of the following conditions at or
before the Closing:
(a) AGREEMENTS PERFORMED. Chart and Merger Sub shall have
performed all of the obligations under this Agreement to be performed by them
at or before the Closing;
(b) REPRESENTATIONS ACCURATE. The representations and
warranties of Chart and Merger Sub contained herein shall continue to be
accurate in all material respects just as if made at and as of the Closing;
(c) CERTIFICATE OF CHART AND MERGER SUB. Shareholders and
the Company shall have received a certificate from Chart and Merger Sub
certifying as to the fulfillment of the conditions set forth in Sections
6.3(a) and 6.3.(b), signed by the chief executive officer of each of Chart
and Merger Sub;
(d) LEGAL ACTION. There shall be no pending or threatened
legal action or inquiry which challenges the validity or legality of or seeks
to or could reasonably be expected to prevent, delay or impose conditions on
the consummation of the transactions contemplated by this Agreement;
(e) CHART COMMON STOCK. Chart shall have caused to be
issued and registered to each Shareholder on its books the shares of Chart
Common Stock constituting such Shareholder's Estimated Merger Consideration
in accordance with Section 2.4 hereof;
(f) {Intentionally omitted.}
(g) {Intentionally omitted.}
(h) OTHER CLOSINGS. The "Closing," as defined in the Stock
Purchase Agreement, shall have occurred; and the "Closing," as defined in the
Asset Purchase Agreement, shall have occurred;
(i) {Intentionally omitted.}
26
(j) OTHER. Shareholders and the Company shall have received
each other document required to be delivered to them hereunder.
ARTICLE 7
ADDITIONAL COVENANTS
7.1 PRE-CLOSING COVENANTS.
7.1.1 CONDUCT OF BUSINESS.
From the date hereof until the Closing, except to the extent
that Chart otherwise consents in writing, Shareholders will cause the Company
to operate its business substantially as presently operated and only in the
ordinary course. Shareholders will, and will cause the Company to, use their
respective best efforts to preserve intact the present business organization
and the relationships with persons having business dealings with the Company.
Without limiting the generality of the foregoing, Shareholders will cause the
Company not to:
(i) purchase or lease (or commit to purchase or lease)
any assets (other than inventory) in excess of
$10,000.00 individually or $50,000.00 in the
aggregate, except as otherwise expressly
contemplated by Section 4.5.9 hereof;
(ii) create, incur or assume any debt; assume, guarantee,
endorse or otherwise become liable or responsible
for the obligation of any other person or entity; or
make any loans, advances or capital contributions
to, or investments in, any other person or entity;
(iii) increase in any manner the rate of compensation of
any of its employees, other than normal increases
using standards consistent with past practice or as
required by any collective bargaining agreement; or
pay or agree to pay any bonus, pension, retirement
allowance, severance or other employee benefit not
required by any existing employee benefit plan;
(iv) permit any of its assets to be subjected to any
Lien;
(v) enter into any Contract, except in the ordinary
course of business consistent with past practice, or
modify or terminate any Contract under circumstances
which might adversely affect the condition
(financial or otherwise) or prospects of the
Company's business;
(vi) sell or dispose of any assets other than inventory
in the ordinary course of business;
27
(vii) engage in any unusual or novel method of transacting
business, or change any accounting procedures or
practices, including practices with respect to the
payment of accounts payable or the collection of
accounts receivable, or change its financial
structure; or
(viii) take any action the taking of which, or omit to take
any action the omission of which, would cause any of
the representations and warranties herein to fail to
be true and correct in all respects as of the date
of such action or omission as though made at and as
of the date of such action or omission, except as
otherwise specifically contemplated by this
Agreement.
7.1.2 ACCESS.
From the date hereof until the Closing, Shareholders will cause
the Company to provide Chart, its lenders and their representatives full
access to the Company's personnel, facilities and all books and records and
such other information and persons relating to the Company as Chart may
request. In addition, Shareholders will cause the Company to permit Chart to
perform engineering, environmental and workplace condition surveys and such
other physical inspections as Chart deems necessary. If the transactions
contemplated by this Agreement are not consummated for any reason, Chart
agrees to return to Shareholders all materials obtained from Shareholders or
the Company and not to use for its own benefit any information not available
to Chart from a source other than Shareholders or the Company and not to
disclose any information contained in the materials except information
available to Chart from a source other than Shareholders or the Company or
required to be disclosed by law.
7.1.3 INTERIM FINANCIAL STATEMENTS.
Within 15 days after the end of each calendar month, if any,
prior to the Closing, Shareholders will deliver to Chart unaudited balance
sheets of the Company and the related statements of income for the months
then ended and for that portion of such fiscal year ended with the last day
of such monthly accounting period, in each case certified by Shareholders to
fairly present the financial position and results of operations of the
Company as at or for the periods indicated on a basis consistent with past
practice.
7.1.4 SUPPLEMENTAL DISCLOSURE.
Shareholders will immediately notify Chart of any event or
circumstance which makes it necessary to correct any representation and
warranty contained in Article 3 or Article 4 which has been rendered
inaccurate thereby; or arises hereafter and which, had it existed on or prior
to the date hereof, would have resulted in an inaccuracy in a representation
and warranty contained in Article 3 or Article 4.
28
7.1.5 SATISFACTION OF CONDITIONS.
Shareholders and the Company will use their respective best
efforts to cause each of the conditions set forth in Section 6.2 to Chart's
and Merger Sub's proceeding with the Closing to be satisfied at or before the
Closing. Chart and Merger Sub shall use their respective best efforts to
cause each of the conditions set forth in Section 6.3 to Shareholders' and
the Company's proceeding with the Closing to be satisfied at or before the
Closing.
7.1.6 TERMINATION.
This Agreement may be terminated (i) by the written agreement
of Chart, Merger Sub and the Company, or (ii) by Chart, Merger Sub or the
Company at any time after March 23, 1999, if the Closing shall not have taken
place on or before such date. If this Agreement is terminated pursuant to
clause (i) of the preceding sentence, all provisions of this Agreement except
Sections 7.3, 7.4 and 8 shall become void without any liability on the part
of any party. If this Agreement is terminated pursuant to clause (ii) of the
first sentence of this Section 7.1.6, all rights and remedies of each party
hereunder and all other provisions hereof related thereto shall survive
termination to the extent required so that any party responsible for any
breach or nonperformance of its obligations hereunder prior to termination
shall remain liable for the damages resulting therefrom.
7.2 NONDISCLOSURE, NONCOMPETITION AND NONINTERFERENCE.
Each Shareholder (i) shall at all times hold in strictest
confidence any and all confidential data and other confidential information
concerning the products, services, businesses, suppliers and customers of the
Company, (ii) for a period of five (5) years following the Closing Date,
shall not, without the prior written consent of Chart, either directly or
indirectly operate or perform any advisory or consulting services for, invest
in (other than publicly traded stock constituting less than 5% of the equity
of a publicly held corporation), or otherwise operate or become associated in
any capacity with, any corporation, partnership, organization, proprietorship
or other business entity or association which sells or performs services then
in competition with the Company at any place within the United States of
America, and (iii) for a period of five (5) years following the Closing Date,
shall not, without the prior written consent of Chart, directly or indirectly
induce or attempt to induce any employee, agent or other representative or
associate of the Company to terminate his or its relationship with the
Company, or in any way knowingly interfere with such a relationship or a
relationship between the Company and any of its suppliers or customers. Each
Shareholder acknowledges that compliance with his covenants in this Section
7.2 is necessary to protect Chart's and the Company's legitimate business
interests and that any breach of any such covenant will result in irreparable
and continuing damage to Chart and the Company for which money damages alone
will not provide an adequate remedy, and that in the event of any such breach
or threatened breach of any such covenant, Chart and the Company and their
respective successors and assigns shall be entitled to injunctive relief,
without having to post any bond, and to such other and further relief at law
or in equity as is proper under the circumstances.
29
7.3 PUBLICITY.
Neither Chart, Merger Sub, Shareholders nor the Company will
make any public announcement relating to this Agreement or the transactions
contemplated hereby without the written consent of the other parties, unless
and except to the extent otherwise required by law. If public disclosure or
notice is required by law, the disclosing party will use his or its best
efforts to give the other parties prior written notice of the disclosure to
be made.
7.4 EXPENSES; TRANSFER TAXES.
Except to the extent otherwise specifically provided herein,
Chart and Merger Sub shall pay all of the expenses incident to the
transactions contemplated by this Agreement which are incurred by Chart,
Merger Sub or their respective representatives, and Shareholders shall pay
all of the expenses incident to the transactions contemplated by this
Agreement which are incurred by the Company or by Shareholders or by their
respective representatives. Shareholders shall pay all sales or other
transfer Taxes, if any, which may be payable in connection with the
transactions contemplated by this Agreement.
7.5 {Intentionally omitted.}
7.6 RECEIVABLES.
Chart shall cause the Company to use all reasonable efforts to
collect the accounts receivable reflected on the Final Closing Balance Sheet
but neither Chart nor the Company shall be required to take or threaten legal
action to collect any such accounts receivable. At the option of Chart,
Shareholders agree to purchase from the Company, for an amount equal to the
unpaid balance thereof, less any allowance for doubtful accounts reflected on
the Final Closing Balance Sheet, all or any part of the accounts receivable
included thereon which shall not have been paid within ninety (90) days after
the Closing Date (other than accounts receivable from Northcoast/Texas,
Northcoast/Kansas or Northcoast/America), it being understood that Chart
shall exercise such option at any time after such date up to the first
anniversary of the Closing Date without waiving any rights hereunder.
Shareholders shall have the right to verify the existence of the unpaid
balance of any accounts receivable.
7.7 EMPLOYMENT.
Shareholders shall pay the cost of any compensation, severance
or other benefits which may be payable to any employees of the Company or to
such other persons as shall claim compensation, severance or other benefits
in connection with the consummation of the transactions contemplated by this
Agreement. Subject to Sections 6.2(m) and 6.3(i), nothing in this Agreement
shall be deemed to require the Company to retain after the Closing any of its
employees for any period of time or at any particular compensation rate or in
any particular position.
30
7.8 {Intentionally omitted.}
7.9 NO ASSIGNMENT.
Without the consent of Shareholders, Chart may assign all or
any part of this Agreement and all or any part of its rights and obligations
hereunder to any affiliate of Chart, to any of Chart's lenders, and to any
person or entity which purchases from Chart substantially all of Chart's
business, in which event Shareholders shall execute and deliver any documents
reasonably requested by the assignee in connection with such assignment.
Except as provided in the preceding sentence, no assignment by any party of
this Agreement or any right or obligation hereunder may be made without the
prior written consent of all other parties, and any assignment attempted
without such consent will be void.
7.10 CONSENT TO JURISDICTION.
Any action or proceeding brought by a party against any other
party in connection with this Agreement may be commenced in any federal or
state court located in Cuyahoga County, Ohio, or Lucas County, Ohio, and all
objections to personal jurisdiction and venue in any action or proceeding so
commenced are hereby waived. So long as service and process is by notice as
provided in Section 9.1 of this Agreement or as required by any such court,
all objections to improper service of process are hereby waived.
7.11 FURTHER ASSURANCES AND ASSISTANCE.
The parties agree that each will execute and deliver any and
all documents in addition to those expressly provided for herein that may be
necessary or appropriate to effect or give evidence to the provisions of this
Agreement and each of the other agreements and instruments delivered by them
in connection herewith and the consummation of the transactions contemplated
hereby. Each Shareholder further agrees that at any time and from time to
time after the Closing, he will execute and deliver to Chart such further
conveyances, assignments or other written assurances as Chart may reasonably
request to perfect and protect Chart's title to the Company Shares.
7.12 {Intentionally omitted.}
7.13 CERTAIN TAX MATTERS.
(a) After the Closing, Chart, the Company and Shareholders
will coordinate the preparation of all necessary Tax Returns relating to the
Company with respect to periods ending on or before the Closing Date. Each
party agrees to timely furnish to the other parties any records and other
information reasonably requested by it in connection therewith.
Notwithstanding any other provision of this Agreement or any disclosure to
Chart hereunder or otherwise, Shareholders shall be responsible for the
payment of, and shall pay, any and all federal, state and local income taxes
(including interest and penalties, if any) payable by the Company with
respect to all periods ending on or before the Closing Date (collectively,
"Pre-Closing Taxes"), and will promptly reimburse Chart or the Company upon
demand for any
31
payments of Pre-Closing Taxes which either Chart or the Company or any of
their affiliates may make after the Closing.
(b) It is the intent of the parties that the Merger qualify
as a tax-free reorganization under Section 368 of the Code. Chart and Merger
Sub will use commercially reasonable efforts to consummate the Merger in such
fashion, but neither Chart nor Merger Sub makes any representation or
warranty as to the treatment of the Estimated Merger Consideration or the
Definitive Merger Consideration for any Tax purposes. Chart, Merger Sub, the
Company and Shareholders agree to reasonably cooperate with each other,
provided that there shall be no requirement to incur any loss, cost or
expense as a result of such cooperation, in order to comply with the
requirements of Code Section 368(a)(2)(E) and the regulations and rulings
thereunder, including the requirement of continuity of interest and the
requirement of continuity of business enterprise. Notwithstanding any other
provision in this Agreement, Shareholders will remain solely liable for any
Tax consequences to them as a result of the Merger.
32
ARTICLE 8
INDEMNIFICATION
8.1 INDEMNIFICATION BY SHAREHOLDERS.
Shareholders shall jointly and severally indemnify Chart and
the Company against and hold Chart and the Company harmless from (i) any and
all loss, damage, liability or deficiency (collectively, "Losses") resulting
from or arising out of any inaccuracy in or breach of any representation,
warranty, covenant or obligation made or incurred by Shareholders herein or
in any other agreement, instrument or document delivered by or on behalf of
Shareholders in connection herewith; and (ii) any and all costs and expenses
(including reasonable legal and accounting fees) (collectively, "Expenses")
related to any of the foregoing. In addition, and notwithstanding any
disclosure to Buyer hereunder or otherwise, Seller shall indemnify Buyer and
the Company and their respective Affiliates against and hold them harmless
from any and all Losses resulting from or arising out of: (i) the death of
the Company's employee Hillard Mitchell Jr. in or about September 1998, and
any and all Expenses related thereto, including in any present or future
litigation relating thereto; and (ii) any matters alleged by plaintiffs in
the pending litigation captioned ANDREW WILBORN AND DEMETRIUS WILBORN VS.
NORTHCOAST OF TEXAS CRYOGENIC, INC. [sic], Case No. 98-42541 in the 151st
Judicial District, Harris County, Texas, or in the pending litigation
captioned ANDREW WILBORN AND DEMETRIUS WILBORN V. NORTHCOAST CRYOGENIC, INC.
[sic], Case No. 2:98-CV-296 PG in the United States District Court for the
Southern District of Mississippi, Hattiesburg Division, and any and all
Expenses related thereto, including in any other present or future litigation
relating to such matters; and (iii) any matters alleged in or arising out of
the pending litigation captioned MILWAUKEE PRECISION CASTING, INC. VS.
NORTHCOAST OF AMERICA CRYOGENIC, INC., Case No. 98CV009914 in the Circuit
Court of Milwaukee County, Wisconsin, and any and all Expenses related
thereto, including in any other present or future litigation relating to such
matters.
8.2 INDEMNIFICATION BY CHART AND MERGER SUB.
Chart and Merger Sub shall jointly and severally indemnify
Shareholders against and hold Shareholders harmless from (i) any and all
Losses resulting from or arising out of any inaccuracy in or breach of any
representation, warranty, covenant or obligation made or incurred by Chart or
Merger Sub herein or in any other agreement, instrument or document delivered
by or on behalf of Chart or Merger Sub in connection herewith; and (ii) any
and all Expenses related to any of the foregoing.
8.3 NOTIFICATION OF AND PARTICIPATION IN CLAIMS.
No claim for indemnification will arise until notice thereof is
given to the party from whom indemnity is sought. In the event that any
legal proceedings shall be instituted or any claim or demand be asserted by
any third party in respect of which Shareholders on the one hand, or Chart or
Merger Sub on the other hand, may have an obligation to indemnify the other,
the party asserting such right to indemnity shall give or cause to be given
to the party
33
from whom indemnity may be sought written notice thereof, and such party
shall have the right, at its option and expense, to be present at the defense
of such proceeding, claim or demand, but not to control the defense,
negotiation or settlement thereof, which control shall at all times rest with
the party asserting such right to indemnity, unless the party from whom
indemnity may be sought irrevocably acknowledges full and complete
responsibility for indemnification of the party asserting such right to
indemnity, in which case such party may assume such control through counsel
of its choice. The parties agree to cooperate fully with each other in
connection with the defense, negotiation or settlement of any such third
party legal proceeding, claim or demand.
8.4 SURVIVAL; LIMITATIONS ON INDEMNIFICATION.
The representations, warranties, covenants and agreements of
the parties contained herein or in any other agreements or documents executed
in connection herewith shall survive the Closing. Notwithstanding the
foregoing, the indemnification of Chart and the Company provided under
Section 8.1 shall be limited in certain respects as follows: any claim for
indemnification relating to any inaccuracy in or breach of any representation
or warranty of Shareholders must be made within eighteen (18) months after
the Closing Date, except that (i) there shall be no limits on the time for
making a claim for indemnification relating to the representations and
warranties contained in Article 3 ("Shareholders' Representations and
Warranties Concerning the Transaction"), Sections 4.1.1 ("Organization and
Power"), or 4.7.1 ("Title"), (ii) any claim for indemnification relating to
the representations and warranties contained in Section 4.3.4 ("Taxes") may
be made until the expiration of the applicable statute of limitations for
either the assessment or collection of Taxes for the periods referred to
therein, and (iii) any claim for indemnification relating to the
representations and warranties contained in Sections 4.6 ("Employee
Benefits") or 4.7.4 ("Environmental Matters") may be made until the second
(2nd) anniversary of the Closing Date. There shall be no limits on the time
for making a claim for indemnification relating to the undertakings of
Shareholders set forth in Section 7.13 hereof or in the second sentence of
Section 8.1 hereof.
ARTICLE 9
MISCELLANEOUS PROVISIONS
9.1 NOTICES.
All notices and other communications required by this Agreement
shall be in writing and shall be deemed given if delivered by hand or mailed
by registered or certified mail to the parties at the following addresses (or
at such other address for a party as shall be specified by like notice):
34
(a) If to Chart or
Merger Sub, to: Chart Industries, Inc.
5885 Landerbrook Drive, Suite 150
Mayfield Heights, Ohio 44124
Attention: James R. Sadowski
With a copy to: Calfee, Halter & Griswold LLP
1400 McDonald Investment Center
800 Superior Avenue
Cleveland, Ohio 44114
Attention: Thomas F. McKee, Esq.
(b) If to Mark A. Bauman, to: Mark A. Bauman
8106 Beck Road
Ottawa Lake, Michigan 49267
If to Patrick J. Flynn, to: Patrick J. Flynn
9478 Douglas Road
Temperance, Michigan 48182
If to the Company prior to the Closing, to the Company in
care of both Mark A. Bauman and Patrick J. Flynn at their
respective addresses as provided herein.
In each case,
with a copy to: Wasserman, Bryan, Landry & Honold
300 Inns of Court Building
405 North Huron Street
Toledo, Ohio 43604
Attention: David L. Honold, Esq.
9.2 BINDING EFFECT.
This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
9.3 INCLUSION.
In every place where it is used in this Agreement, the word
"including" is intended and shall be construed to mean "including, without
limitation".
35
9.4 {Intentionally omitted.}
9.5 HEADINGS.
The headings in this Agreement are intended solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
9.6 EXECUTION IN COUNTERPARTS; SIGNATURE PAGES.
This Agreement may be executed and delivered in multiple
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument. This Agreement may be
executed and delivered with separate signature pages with the same effect as
though all parties had executed and delivered the same signature page.
9.7 SEVERABILITY.
In the event any part of Section 7.2 of this Agreement shall be
found by a court of competent jurisdiction to be invalid or unenforceable for
any reason, each Shareholder hereby grants to such court full authority and
discretion, and hereby authorizes and requests such court to exercise all
such authority and discretion as it may possess hereunder or under applicable
law, to reform such provision to the end that such Shareholder shall be
subject to nondisclosure, noncompetition and noninterference covenants that
are reasonable under the circumstances and enforceable by Chart and the
Company. In the event any other provision of this Agreement shall be held
unenforceable or invalid to any extent for any reason, such provision shall
remain in force and effect to the maximum extent permitted, and the
enforceability or validity of the remaining provisions of this Agreement
shall not be affected thereby.
9.8 AMENDMENTS, WAIVERS.
No amendment to or waiver of any of the provisions of this
Agreement, including this Section 9.8, shall be valid or enforceable unless
such amendment or waiver is set forth in writing and signed by the party
against whom enforcement of such amendment or waiver is sought or such
party's authorized representative. Unless otherwise expressly stated
therein, each such amendment or waiver shall be effective only with respect
to the specific instance in which it is given, and no such amendment or
waiver shall constitute a waiver of any other provision hereof (whether or
not similar), or a continuing waiver.
9.9 NO THIRD-PARTY RIGHTS.
Nothing expressed or implied in this Agreement is intended or
shall be construed to confer on any person, other than the parties hereto and
their respective successors and permitted assigns, any rights under this
Agreement.
36
9.10 ENTIRE AGREEMENT.
This Agreement and the other agreements and documents to be
delivered hereunder constitute the entire agreement among the parties
pertaining to the subject matter hereof and supersede all prior and
contemporaneous negotiations, agreements and understandings of the parties.
There are no warranties, representations or other agreements among the
parties in connection with the subject matter hereof except as specifically
set forth herein or in the agreements or instruments delivered in connection
herewith, and no supplement, modification, waiver or termination of this
Agreement shall be binding unless executed in writing by the party sought to
be bound thereby.
9.11 SCHEDULES AND EXHIBITS.
The schedules and exhibits referenced in this Agreement
constitute an integral part of this Agreement as if fully rewritten herein.
All references in this document to "this Agreement" and the terms "herein,"
"hereof," "hereunder" and the like shall be deemed to include all of such
schedules and exhibits.
9.12 TIME PERIODS.
Any action required hereunder to be taken within a certain
number of days shall, except as may otherwise be expressly provided herein,
be taken within that number of calendar days; PROVIDED, HOWEVER, that if the
last day for taking such action falls on a Saturday, a Sunday, or a day which
shall be in Cleveland, Ohio, or New York, New York, a legal holiday or a day
on which banking institutions therein are authorized by law to close, then
the period during which such action may be taken shall automatically be
extended to the next business day.
9.13 GOVERNING LAW.
This Agreement shall be construed in accordance with and
governed by the laws of the State of Ohio, without giving effect to the
choice-of-laws or conflict-of-laws provisions thereof.
{The remainder of this page is intentionally left blank.}
37
IN WITNESS WHEREOF, Chart, Merger Sub, the Company and
Shareholders have executed and delivered this Agreement and Plan of Merger as
of the date first written above.
/s/ Mark A. Bauman
------------------------------
MARK A. BAUMAN
/s/ Patrick J. Flynn
------------------------------
PATRICK J. FLYNN
NCI ACQUISITION CORP.
By: /s/ James R. Sadowski
---------------------------
James R. Sadowski,
President and Chief Operating Officer
CHART INDUSTRIES, INC.
By: /s/ James R. Sadowski
---------------------------
James R. Sadowski,
President and Chief Operating Officer
38