AGREEMENT
BY AND AMONG
HAVENWOOD VENTURES, INC.
HAVENWOOD ACQUISITION CORP.
AND
IWC SERVICES, INC.
DATED AS OF JULY 28, 1997
TABLE OF CONTENTS
PAGE
ARTICLE I THE MERGER 1
SECTION 1.01. The Merger 1
SECTION 1.02. Effective Time 2
ARTICLE II REPRESENTATIONS AND WARRANTIES OF IWC 2
SECTION 2.01. Organization and Qualification; Subsidiaries 2
SECTION 2.02. Articles of Incorporation and By-Laws 2
SECTION 2.03. Capitalization 3
SECTION 2.04. Authority 3
SECTION 2.05. No Conflict; Required Filings and Consent 3
SECTION 2.06. Permits; Compliance 4
SECTION 2.07. Financial Statements 4
SECTION 2.08. No Undisclosed Liabilities 4
SECTION 2.09. Absence of Certain Changes or Events 4
SECTION 2.10. Absence of Litigation 4
SECTION 2.11. Taxes 4
SECTION 2.12. Brokers 5
SECTION 2.13. IWC Corporate Action 5
SECTION 2.14. Environmental Laws and Regulations 5
ARTICLE III REPRESENTATIONS AND WARRANTIES
OF HAVENWOOD AND NEWCO 5
SECTION 3.01. Organization and Qualification 6
SECTION 3.02. Articles of Incorporation and By-Laws 6
SECTION 3.03. Capitalization 6
SECTION 3.04. Authority 7
SECTION 3.05. No Conflict; Required Filings and Consents 7
SECTION 3.06. Permits; Compliance 8
SECTION 3.07. Reports; Financial Statements 8
SECTION 3.08. Absence of Certain Changes or Events 8
SECTION 3.09. No Undisclosed Liabilities 9
SECTION 3.10. Absence of Litigation 9
SECTION 3.11. Ownership of Newco; No Prior Activities 9
SECTION 3.12. Taxes 9
SECTION 3.13. Brokers 9
SECTION 3.14. Environmental Laws and Regulations. 9
SECTION 3.15. Contract Rights 10
SECTION 3.16. Employee Benefit Plans 10
SECTION 3.17. Public Offering. 10
ARTICLE IV ADDITIONAL AGREEMENTS 11
SECTION 4.01. Appropriate Action; Consents; Filings 11
SECTION 4.02. Tax Treatment; Pooling of Interests 11
SECTION 4.03. Indemnification. 11
SECTION 4.04. Officers and Directors of Havenwood 14
SECTION 4.05. Opinion of Counsel to Havenwood 14
ARTICLE V GENERAL PROVISIONS 14
SECTION 5.01. Effectiveness of Representations, Warranties and Agreements 15
SECTION 5.02. Notices 15
SECTION 5.03. Certain Definitions 16
SECTION 5.04. Headings 16
SECTION 5.05. Severability 16
SECTION 5.06. Entire Agreement 16
SECTION 5.07. Assignment 16
SECTION 5.08. Parties in Interest 16
SECTION 5.09. Failure or Indulgence Not Waiver; Remedies Cumulative 17
SECTION 5.10. Governing Law 17
SECTION 5.11. Jurisdiction 17
SECTION 5.12. Counterparts 17
AGREEMENT
AGREEMENT dated as of July __, 1997 ('Agreement'), among HAVENWOOD
VENTURES, INC., a Delaware corporation ('Havenwood'), HAVENWOOD ACQUISITION
CORP., a Texas corporation ('Newco'), and a wholly owned subsidiary of
Havenwood, MARK LEIBOVIT, individually ('Leibovit'), REED SLATKIN individually
('Slatkin') and IWC SERVICES, INC., a Texas corporation ('IWC').
WHEREAS, upon the terms and subject to the conditions of this
Agreement and in accordance with the Texas Business Corporations Act ('TBCA'),
Newco will merge with and into IWC (the 'Merger') as a result of which the
stockholders of IWC will own together approximately 92% of the issued and
outstanding shares of the common stock, $.00001 par value, of Havenwood (on a
fully diluted basis);
WHEREAS, the Board of Directors of IWC has determined that the Merger
is fair to, and in the best interests of, IWC and its stockholders; has approved
and adopted this Agreement and the transactions contemplated herein; and this
Agreement and the transactions contemplated herein have been approved by the
stockholders of IWC;
WHEREAS, the Board of Directors of Havenwood has determined that the
Merger is in the best interests of Havenwood and its stockholders and has
approved and adopted this Agreement and the transactions contemplated herein;
WHEREAS, the Board of Directors of Newco has determined that the
Merger is in the best interests of Newco and its stockholder and the Board of
Directors of Newco and Havenwood, as the sole stockholder of Newco, have
approved and adopted this Agreement and the transactions contemplated herein;
WHEREAS, for Federal income tax purposes, it is intended that the
Merger qualify as a reorganization under the provisions of section 368(a) of the
United States Internal Revenue Code of 1986, as amended (the 'Code') and that
this Agreement and the Annexes hereto shall constitute a 'plan of
reorganization' for the purposes of section 368 of the Code;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the TBCA, at the
Effective Time (as defined in Section 1.02), Newco and IWC shall effect a merger
by executing the Plan and Agreement of Merger (the 'Plan') in substantially the
form attached hereto as Annex I, and by executing and filing Articles of Merger
(the 'Articles'), substantially in the form attached hereto as Annex II, in the
manner provided in Article 5.04 of the TBCA. As a result of the Merger, the
separate corporate existence of Newco shall cease and IWC shall continue as the
surviving corporation in the Merger (the 'Surviving Corporation'). The name of
the Surviving Corporation shall continue to be 'IWC SERVICES, INC.' Prior to
the Merger, Havenwood shall, pursuant to the terms of the Subscription
Agreement, a copy of which is attached as Annex III hereto (the 'Subscription
Agreement'), issue and deliver to Newco shares of Havenwood Stock, Havenwood
Warrants and Havenwood Options equivalent to the number of shares of Havenwood
Stock, the number of Havenwood Warrants and the number of Havenwood Options to
be transferred pursuant to the terms and provisions of the Plan.
SECTION 1.02. Effective Time. As promptly as practicable after the
execution and delivery of this Agreement by each of the parties hereto, the
parties hereto shall cause the Merger to be consummated by filing the Articles
with the Secretary of State of the State of Texas, in such form as required by,
and executed in accordance with the relevant provisions of the TBCA (the date
and time of such filing being the 'Effective Time').
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF IWC
IWC hereby represents and warrants to Havenwood and Newco as follows
that:
SECTION 2.01. Organization and Qualification; Subsidiaries. Each of
IWC, its wholly owned subsidiaries Hell Fighters, Inc., a Texas corporation, and
International Well Control Services, Ltd., a Cayman Islands corporation, and its
90%-owned subsidiary, IWC de Venezuela, S.A., a Venezuelan corporation
(collectively the 'Subsidiaries'), is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, has all requisite corporate or other power and
authority to own, lease and operate its properties and to carry on its business
as it is now being conducted, and is duly qualified and in good standing to do
business in each jurisdiction in which the nature of the business conducted by
it or the ownership or leasing of its properties makes such qualification
necessary. Hell Fighters, Inc., International Well Control Services, Ltd., and
IWC de Venezuela, S.A. are IWC's only directly or indirectly owned subsidiaries.
SECTION 2.02. Articles of Incorporation and By-Laws. IWC has
heretofore furnished to Havenwood complete and correct copies of the Articles of
Incorporation and the By-Laws or the equivalent organizational documents, in
each case as amended or restated, of IWC and the Subsidiaries. Neither IWC nor
any Subsidiary is in violation of any of the provisions of its respective
Articles of Incorporation or By-Laws or equivalent organizational documents.
SECTION 2.03. Capitalization. (a) The authorized capital stock of
IWC consists of 50,000,000 shares of common stock, $0.01 par value ('IWC
Common') and 5,000,000 shares of preferred stock, $0.01 par value ('IWC
Preferred'). As of the date hereof (i) 6,740,000 shares of IWC Common and no
shares of IWC Preferred, are issued and outstanding, all of the issued and
outstanding shares of IWC Common are duly authorized, validly issued, fully paid
and nonassessable and not subject to preemptive rights created by statute, IWC's
Articles of Incorporation or By-Laws or any agreement to which IWC is a party or
bound (ii) a presently indeterminate number of shares of IWC Common are reserved
for issuance upon the exercise of warrants to purchase shares of IWC Common
having an aggregate value of $3,000,000 based on a conversion price equal to
one-half of the average closing bid price of the IWC Common during the 60-day
period commencing 30 days after the completion of a public stock offering or
business combination transaction that results in the creation of a public market
for the IWC Common ('IWC Warrants') and (iii) 850,000 shares of IWC Common are
reserved for issuance at a price of $1.00 per share upon the exercise of
outstanding common stock purchase options ('IWC Options'). The IWC Common; IWC
Preferred, IWC Warrants and IWC Options are referred to herein, collectively, as
the 'IWC Securities'). There are no bonds, debentures, notes or other
indebtedness issued or outstanding having the right to vote on any matters on
which IWC's stockholders may vote. Except for the IWC Warrants and IWC Options
set forth in Schedule 2.03(a), there are no options, warrants, calls or other
rights (including registration rights), agreements, arrangements or commitments
presently outstanding obligating IWC to issue, deliver or sell shares of its
capital stock or debt securities, or obligating IWC to grant, extend or enter
into any such option, warrant, call or other such right, agreement, arrangement
or commitment. Schedule 2.03(a) sets forth a true and complete list of all IWC
Warrants and IWC Options, showing for each warrant or option holder the number
of shares of IWC Common for which such warrants or options are exercisable (or
the basis for the determination thereof), the exercise price(s) thereof (or the
basis for the determination thereof), the date(s) of grant, the date(s) of
expiration and the vesting date(s) thereof, all as of the date hereof.
(b) In addition to the IWC Securities, IWC has previously sold
$3,000,000 aggregate principal amount of 12% Senior Subordinated Notes due
December 31, 2000 ('IWC Notes'). The IWC Notes are held beneficially and
proportionally by the holders of IWC Warrants and immediately after the
consummation of the transactions contemplated hereby, IWC intends to offer the
holders of IWC Notes an opportunity, for a period of 30 days, to convert such
notes into common stock at a price of $0.75 per share.
(c) All the outstanding shares of capital stock of the Subsidiaries
are duly authorized, validly issued, fully paid and nonassessable and such
shares are owned by IWC as set forth in Section 2.01 free and clear of any
security interests, liens, claims, pledges, agreements, limitations on voting
rights, charges or other encumbrances of any nature whatsoever ('Encumbrances').
There are no options, warrants, calls or other rights (including registration
rights), agreements, arrangements or commitments of any character to which IWC
or any Subsidiary is a party relating to the issued or unissued capital stock
of, or other equity interests in, any Subsidiary.
SECTION 2.04. Authority. IWC has all requisite corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated herein. The execution
and delivery of this Agreement and the
consummation of the transactions contemplated herein have been duly authorized
by all necessary corporate action and no other corporate proceeding on the part
of IWC is necessary to authorize this Agreement or to consummate the
transactions contemplated herein. This Agreement has been duly executed and
delivered by IWC and, assuming the due authorization, execution and delivery
thereof by Havenwood and Newco, constitutes the legal, valid and binding
obligation of IWC enforceable in accordance with its terms (i) except as limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to or affecting creditors' rights generally, and
without limitation, the effect of statutory or other laws regarding fraudulent
conveyances and preferential transfers and (ii) subject to the limitations
imposed by general rules of equity (regardless of whether such enforceability is
considered at law or in equity).
SECTION 2.05. No Conflict; Required Filings and Consent. (a) The
execution and delivery of this Agreement by IWC does not, and the performance of
this Agreement by IWC will not (i) conflict with or violate the Articles of
Incorporation or By-Laws, or the equivalent organizational documents, in each
case as amended or restated, of IWC or any Subsidiary, (ii) conflict with or
violate any federal, state, foreign or local law, statute, ordinance, rule,
regulation, order, judgment or decree (collectively, 'Laws') in effect as of the
date of this Agreement and applicable to IWC or any Subsidiary or by which their
respective properties is bound or subject, or (iii) result in any breach of or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or require payment under, or result
in the creation of an Encumbrance on, any of the properties or assets of IWC or
any Subsidiary pursuant to any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which IWC or any Subsidiary is a party or by which IWC or any Subsidiary or
their respective properties is bound or subject except for breaches, defaults,
events, rights of termination, amendment, acceleration or cancellation, payment
obligations or liens or Encumbrances that would not have a material adverse
effect on the business, properties, assets, condition (financial or otherwise)
operations or prospects of IWC and its Subsidiaries, taken as a whole ('IWC
Material Adverse Effect').
(b) The execution and delivery of this Agreement by IWC does not, and
the performance of this Agreement by IWC will not, require IWC to obtain any
consent, approval, authorization or permit of, or to make any filing with or
notification to, any governmental or regulatory authority, domestic or foreign
('Governmental Entities') based on laws, rules, regulations and other
requirements of Governmental Entities in effect as of the date of this
Agreement, except for applicable requirements, if any, of (i) federal or state
securities laws and the filing and recordation of appropriate merger documents
as required by the TBCA and (ii) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications,
would not, either individually or in the aggregate, prevent IWC from performing
its obligations under this Agreement or have a IWC Material Adverse Effect.
SECTION 2.06. Permits; Compliance. IWC and each of its Subsidiaries
is in possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exemptions, consents, certificates, approvals and orders
necessary to own, lease and operate its properties and to carry on its business
as it is now being conducted (collectively, the 'IWC Permits'), and there is no
action, proceeding or investigation pending or, to the knowledge of
IWC, threatened, regarding suspension or cancellation of any of IWC Permits.
Neither IWC nor any Subsidiary is in conflict with, or in default or violation
of (a) any Law applicable to IWC or any Subsidiary or by which any of their
respective properties is bound or subject or (b) any of the IWC Permits, except
for any such conflicts, defaults or violations which would not have a IWC
Material Adverse Effect.
SECTION 2.07. Financial Statements. Attached hereto as Schedule
2.07, the text of which is hereby incorporated herein by reference, are the
audited consolidated financial statements of IWC as of April 30, 1997,
containing the balance sheet of IWC and the related statement of operations and
statement of shareholders' equity for the period then ended (the 'IWC Financial
Statements'), as well as the audited consolidated financial statements of Boots
& Coots, L.P. as of December 31, 1996, containing the balance sheet of Boots & Coots and the related statement of operations and statement of shareholders'
equity for the period then ended (the 'Boots & Coots Financial Statements'). To
the best of IWC's knowledge, the IWC Financial Statements and the Boots & Coots
Financial Statements have been prepared in accordance with generally accepted
accounting principles and practices consistently followed by IWC and its
Subsidiaries and Boots & Coots and its subsidiaries throughout the periods
indicated, and fairly present the consolidated financial position of IWC and its
Subsidiaries and Boots & Coots and its subsidiaries as of the dates thereof.
SECTION 2.08. No Undisclosed Liabilities. Except for the obligations
of IWC set forth in that certain Asset Purchase Agreement dated July __, 1997
between IWC and Boots & Coots, L.P., a Colorado limited partnership, a true and
complete copy of which is attached hereto as Exhibit 2.08, there are no
liabilities of IWC or any Subsidiary of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise, and there is no
existing condition, situation or set of circumstances which could reasonably be
expected to result in such a liability, other than liabilities fully reflected
or reserved against on the IWC Financial Statements; and liabilities which,
individually or in the aggregate, would not have a IWC Material Adverse Effect.
SECTION 2.09. Absence of Certain Changes or Events. Except as and to
the extent disclosed herein since April 30, 1997, there has not been any
significant change by IWC or any Subsidiary in their accounting methods,
principles or practices or any circumstance which would constitute a IWC
Material Adverse Effect.
SECTION 2.10. Absence of Litigation. Except as set forth in Schedule
2.10 attached hereto, there is no claim, action, suit, litigation, proceeding,
arbitration or investigation of any kind, at law or in equity (including actions
or proceedings seeking injunctive relief), pending or, to the knowledge of IWC,
threatened against IWC or any Subsidiary or any properties or rights of IWC or
any Subsidiary and neither IWC nor any Subsidiary is subject to any continuing
order of, consent decree, settlement agreement or other similar written
agreement with, or, to the knowledge of IWC, continuing investigation by, any
Governmental Entity, or any judgment, order, writ, injunction, decree or award
of any Governmental Entity or arbitrator, including, without limitation, cease-
and-desist or other orders.
SECTION 2.11. Taxes. IWC and each of its Subsidiaries has filed all
federal, state and local tax returns required by law, or has filed proper
extensions, and has paid all Taxes (as
defined in Section 5.03 hereof), assessments and penalties due and payable. The
provisions for Taxes, if any, reflected in the most recent balance sheet
included in the IWC Financial Statements are adequate for any and all federal,
state, county and local taxes for the period ending on the date of that balance
sheet and for all prior periods, whether or not disputed. There are no present
disputes as to Taxes of any nature payable by IWC or any Subsidiary.
SECTION 2.12. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated in this Agreement based upon arrangements
made by or on behalf of IWC except for fees consisting of shares of IWC common
stock that have been issued to Arizona Securities Group, Inc. or its designees.
SECTION 2.13. IWC Corporate Action. The Board of Directors of IWC
has by the unanimous vote of all directors present (a) determined that the
Merger is advisable and fair and in the best interests of IWC and its
stockholders, (b) approved the Merger in accordance with the applicable
provisions of the TBCA, (c) recommended the approval of this Agreement and the
Merger by the holders of IWC Common and directed that the Merger be submitted
for consideration by IWC's stockholders and (d) obtained the unanimous consent
of all holders of IWC Common, of a resolution approving the Merger and the
transactions contemplated in this Agreement.
SECTION 2.14. Environmental Laws and Regulations. (a) IWC and its
Subsidiaries are in material compliance with all applicable foreign, federal
(including but not limited to the Outer Continental Shelf Lands Act, the Clean
Water Act, the Oil Pollution Act, the Resource Conservation and Recovery Act,
the Clean Air Act, the Comprehensive Environmental Response Compensation and
Liability Act, the Occupational Safety and Health Act and the Hazardous
Materials Transportation Act), state and local laws and regulations and common
law relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, ground water, land
surface or subsurface strata (collectively, 'Environmental Laws')), which
compliance includes, but is not limited to, the possession by IWC and its
Subsidiaries of all material permits and other governmental authorizations
required under applicable Environmental Laws, and compliance with the terms and
conditions thereof and compliance with notification, reporting and registration
provisions under applicable Environmental Laws; neither IWC nor any Subsidiary
has received notice of, or, to the knowledge of IWC, is the subject of, any
action, cause of action, claim, investigation, demand or notice by any person or
entity alleging liability under or noncompliance with any Environmental Law
('Environmental Claim'); and to the knowledge of IWC, there are no circumstances
that are reasonably likely to prevent or interfere with such material compliance
in the future, or to require material expenditures to maintain such material
compliance in the future.
(b) There are no Environmental Claims that are pending or, to the
knowledge of IWC or any Subsidiary, threatened against IWC or any Subsidiary,
or, to the knowledge of IWC and its Subsidiaries, against any person or entity
whose liability for any Environmental Claim IWC or any Subsidiary has or may
have retained or assumed either contractually or by operation of law.
(c) To the knowledge of IWC and its Subsidiaries, there are no
circumstances
that could form the basis for an Environmental Claim against IWC or any
Subsidiary, or against any person or entity whose liability for any
Environmental Claim IWC or any Subsidiary has or may have retained or assumed
either contractually or by operation of law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF HAVENWOOD AND NEWCO
Havenwood and Newco hereby jointly and severally represent and warrant
to IWC that:
SECTION 3.01. Organization and Qualification. Each of Havenwood and
Newco is a corporation, duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation and has all requisite
power and authority to own, lease and operate its properties and to carry on its
business as it is now being conducted, and is duly qualified and in good
standing to do business in each jurisdiction in which the nature of the business
conducted by it or the ownership or leasing of its properties makes such
qualification necessary.
SECTION 3.02. Articles of Incorporation and By-Laws. Havenwood has
heretofore furnished to IWC a complete and correct copy of the Articles of
Incorporation and the By-Laws, as amended or restated to the date hereof, of
each of Havenwood and Newco. Neither Havenwood nor Newco is in violation of any
of the provisions of its Articles of Incorporation or By-Laws.
SECTION 3.03. Capitalization. (a) Prior to the execution of this
agreement Havenwood had 258,365,000 shares of common stock ('Old Shares') issued
and outstanding. In accordance with the requirements of Delaware Law,
Havenwood's stockholders approved and Havenwood effected a 'reverse split' in
the ratio of one new share ('New Shares') for every 135 Old Shares held by a
stockholder, provided, however, that no single stockholder's ownership was
reduced to fewer than 100 New Shares. Immediately prior to the execution of this
Agreement, certain principal stockholders of Havenwood surrendered a total of
740,740 New Shares to Havenwood for cancellation, leaving a total of 1,173,074
shares of Common Stock issued and outstanding.
(b) The authorized capital stock of Havenwood consists of 50,000,000
shares of common stock, $.00001 par value ('Havenwood Common') and 5,000,000
shares of preferred stock, $0.00001 par value ('Havenwood Preferred'). As of
the date hereof (before giving effect to the transactions contemplated herein)
(i) 1,173,074 shares of Havenwood Common are issued and outstanding, all of
which are duly authorized, validly issued, fully paid and nonassessable and not
subject to preemptive rights created by statute, Havenwood's Articles of
Incorporation or By-Laws or any agreement to which Havenwood is a party or is
bound and (ii) no shares of Havenwood Preferred are outstanding. There are no
options, warrants, calls or other rights (including registration rights),
agreements, arrangements or commitments presently outstanding obligating
Havenwood to issue, deliver, sell or register shares of its capital stock or
debt securities, or obligating Havenwood to grant, extend or enter into any such
option, warrant, call or other such right, agreement, arrangement or commitment.
(c) All of the outstanding shares of capital stock of Newco are duly
authorized, validly issued, fully paid and nonassessable, and are owned by
Havenwood free and clear of any Encumbrances. There are no options, warrants,
calls or other rights (including registration rights), agreements, arrangements
or commitments of any character to which Havenwood or Newco is a party relating
to the issued or unissued capital stock of, or other equity interests in, Newco
or obligating Havenwood or Newco to grant, issue or sell any shares of the
capital stock of Newco; other than as contemplated in this Agreement and the
Subscription Agreement between Havenwood and Newco.
(d) The shares of Havenwood Common issued to Newco and exchanged
pursuant to the Merger as contemplated herein, upon issuance in accordance with
this Agreement and the Plan, will be duly authorized, validly issued, fully paid
and nonassessable and will not be subject to preemptive rights created by
statute, Havenwood's Articles of Incorporation or By-Laws or any agreement to
which Havenwood is a party or is bound.
(e) The Havenwood Warrants issued to Newco and exchanged pursuant to
the Merger as contemplated herein, upon issuance in accordance with this
Agreement and the Plan, will be duly authorized and validly issued, and
constitute the legal, valid and binding obligation of Havenwood enforceable in
accordance with their terms.
(f) The Havenwood Options issued to Newco and exchanged pursuant to
the Merger as contemplated herein, upon issuance in accordance with this
Agreement and the Plan, will be duly authorized and validly issued, and
constitute the legal, valid and binding obligation of Havenwood enforceable in
accordance with their terms.
(g) Other than SST Productions, Inc., Havenwood does not have any
subsidiaries or own any interest in any enterprise (whether or not such
enterprise is a corporation) except for Newco. Havenwood has either sold to
third parties, or dissolved in accordance with applicable law, all other
corporations, partnerships and other incorporated or unincorporated enterprises
in which it has previously had an interest, regardless of whether such interest
arose from stock ownership, management control or otherwise.
SECTION 3.04. Authority. Each of Havenwood, Newco, Mark Leibovit and
Slatkin has all requisite corporate or other appropriate power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated herein. The execution and delivery of
this Agreement and the consummation of the transactions contemplated herein have
been duly authorized by all necessary corporate action and no other corporate
proceeding on the part of Havenwood or Newco (including, without limitation, any
approval by the shareholders of Havenwood of this Agreement or the transactions
contemplated herein) is necessary to authorize this Agreement or to consummate
the transactions contemplated herein. This Agreement has been duly executed and
delivered by Havenwood, Newco, Mark Leibovit and Slatkin and, assuming the due
authorization, execution and delivery hereof by IWC, constitutes the legal,
valid and binding obligation of Havenwood, Newco, Leibovit and Slatkin
enforceable in accordance with its terms (i) except as limited by bankruptcy,
insolvency, reorganization, moratorium or other similar law now or hereafter in
effect relating to or affecting creditors' rights generally, and without
limitation, the effect of statutory or other laws regarding fraudulent
conveyances and preferential transfers and (ii) subject to the limitations
imposed by general rules of equity (regardless of whether such enforceability is
considered at law or in equity).
SECTION 3.05. No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by Havenwood and Newco does not, and
the performance of this Agreement by Havenwood and Newco will not (i) conflict
with or violate the Certificate of Incorporation or By-Laws, as amended or
restated, of Havenwood or Newco, (ii) conflict with or violate any Laws in
effect as of the date of this Agreement applicable to Havenwood or Newco or by
which any of their respective properties is bound, or (iii) result in any breach
of or constitute a default (or an event that with notice or lapse of time or
both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or require payment under, or result
in the creation of a lien or Encumbrance on, any of the properties or assets of
Havenwood or Newco pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which Havenwood or Newco is a party or by which Havenwood or Newco or any of
their respective properties is bound or subject except for breaches, defaults,
events, rights of termination, amendment, acceleration or cancellation, payment
obligations or liens or Encumbrances that would not have a material adverse
effect on the business, properties, assets, condition (financial or otherwise)
operations or prospects of Havenwood and its subsidiaries, taken as a whole, or
on the transactions herein contemplated ('Havenwood Material Adverse Effect').
(b) The execution and delivery of this Agreement by Havenwood and
Newco and the performance of this Agreement by Havenwood and Newco does not
require Havenwood or Newco to obtain any consent, approval, authorization or
permit of, or to make any filing with or notification to, any Governmental
Entities, except for applicable requirements, if any, of (i) the Securities Act
of 1933, as amended (the 'Securities Act'), the Securities Exchange Act of
1934, as amended (the 'Exchange Act') or the securities laws of any other
jurisdiction (the 'Blue Sky Laws'), the National Association of Securities
Dealers, and the filing and recordation of appropriate merger documents as
required by TBCA and (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not,
either individually or in the aggregate, prevent Havenwood from performing its
obligations under this Agreement or have a Havenwood Material Adverse Effect.
SECTION 3.06. Permits; Compliance. Each of Havenwood and Newco is in
possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exemptions, consents, certificates, approvals and orders
necessary to own, lease and operate its properties and to carry on its business
as it is now being conducted (collectively, the 'Havenwood Permits'), and there
is no action, proceeding or investigation pending or, to the knowledge of
Havenwood, threatened, regarding suspension or cancellation of any of the
Havenwood Permits. Neither Havenwood nor Newco is in conflict with, or in
default or violation of (a) any Law applicable to Havenwood or Newco or by which
any of their respective properties is bound or subject or (b) any of the
Havenwood Permits, except for any such conflicts, defaults or violations which
would not have a Havenwood Material Adverse Effect. Neither Havenwood nor Newco
has received from any Governmental Entity any written notification with respect
to possible conflicts, defaults or violations of Laws.
SECTION 3.07. Reports; Financial Statements. (a) Except as set forth
on Schedule 3.07, (x) Havenwood and its subsidiaries have filed (i) all forms,
reports, statements and other documents required to be filed with (A) the
Securities and Exchange Commission ('SEC'), including, without limitation (1)
all Annual Reports on Form 10-KSB, (2) all Quarterly Reports on Form 10-QSB, (3)
all proxy statements relating to meetings of stockholders (whether annual or
special), (4) all Reports on Form 8-K, (5) all other reports or registration
statements and (6) all amendments and supplements to all such reports and
registration statements (collectively, the 'Havenwood SEC Reports') and (B) any
applicable Blue Sky Laws and (ii) all forms, reports, statements and other
documents required to be filed with any other applicable federal or state
regulatory authorities (all such forms, reports, statements and other documents
in clauses (i) and (ii) of this Section 3.07(a) being referred to herein,
collectively, as the 'Havenwood Reports'). The Havenwood Reports were prepared
in all material respects in accordance with the requirements of applicable Law
(including, with respect to the Havenwood SEC Reports, the Securities Act and
Exchange Act, as the case may be, and the rules and regulations of the SEC
thereunder applicable to such Havenwood SEC Reports) and (y) did not at the time
they were filed contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(b) Each of the financial statements (including, in each case, any
related notes thereto) contained in the Havenwood SEC Reports filed prior to or
on the date of this Agreement (i) have been prepared in accordance with, and
complied as to form with, the published rules and regulations of the SEC and
generally accepted accounting principles applied on a consistent basis
throughout the periods involved (except as otherwise noted therein) and (ii)
fairly present the financial position of Havenwood as of the respective dates
thereof and the results of its operations and cash flows for the periods
indicated.
(c) To the best of Havenwood's knowledge after due inquiry, except as
set forth on Schedule 3.07(c) hereto, Havenwood's auditors have issued no
management letters in connection with Havenwood's financial statements.
SECTION 3.08. Absence of Certain Changes or Events. Except as
disclosed in Schedule 3.08, and as and to the extent disclosed in the Havenwood
SEC Reports filed prior to or on the date of this Agreement, there has not been
any significant change by Havenwood in its accounting methods, principles or
practices.
SECTION 3.09. No Undisclosed Liabilities. There are no liabilities
of Havenwood, Newco or any subsidiary of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise, and there is no
existing condition, situation or set of circumstances which could reasonably be
expected to result in such a liability, other than (a) liabilities fully
reflected or reserved against on the balance sheet contained in Havenwood's 1996
Annual Report on Form 10-KSB for the fiscal year ended June 30, 1996 or in the
unaudited consolidated balance sheet contained in the Quarterly Report on Form
10-QSB for the fiscal quarter ended March 31, 1997; (b) liabilities under this
Agreement and fees and expenses related thereto; and (c) liabilities which,
individually or in the aggregate would not have a Havenwood Material Adverse
Effect.
SECTION 3.10. Absence of Litigation. There is no claim, action,
suit, litigation, proceeding, arbitration or, to the knowledge of Havenwood,
investigation of any kind, at law or in equity (including actions or proceedings
seeking injunctive relief), pending or, to the knowledge of Havenwood,
threatened against Havenwood or Newco or any properties or rights of Havenwood
or Newco and neither Havenwood nor Newco is subject to any continuing order of,
consent decree, settlement agreement or other similar written agreement with,
or, to the knowledge of Havenwood, continuing investigation by, any Governmental
Entity, or any judgment, order, writ, injunction, decree or award of any
Governmental Entity or arbitrator, including, without limitation, cease and
desist or other orders.
SECTION 3.11. Ownership of Newco; No Prior Activities. (a) Newco was
formed solely for the purpose of engaging in the transactions contemplated in
this Agreement.
(b) Except for obligations or liabilities incurred in connection with
its incorporation or organization and the transactions contemplated in this
Agreement and any other agreements or arrangements contemplated in this
Agreement, Newco has not incurred, directly or indirectly, through any
subsidiary or affiliate, any obligations or liabilities or engaged in any
business activities of any type or kind whatsoever or entered into any
agreements or arrangements with any person.
SECTION 3.12. Taxes. Havenwood has timely filed all returns or
reports required to be filed with any taxing authority with respect to Taxes for
any period ending on or before the Effective Time, taking into account any
extension of time to file granted to or obtained on behalf of Havenwood or
Newco, all Taxes shown to be payable on such returns or reports that are due
prior to the Effective Time have been paid and, as of the date hereof, no
deficiency for any material amount of tax has been asserted or assessed by a
taxing authority against Havenwood or Newco and all liability for Taxes of
Havenwood or Newco that are or will become due or payable with respect to
periods covered by the financial statements referred to in Section 3.07(b)
hereof have been paid or adequately reserved for on such financial statements.
SECTION 3.13. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated in this Agreement based upon arrangements
made by or on behalf of Havenwood or Newco.
SECTION 3.14. Environmental Laws and Regulations. (a) Havenwood and
Newco are in material compliance with all applicable Environmental Laws, which
compliance includes, but is not limited to, the possession by Havenwood and
Newco of all material permits and other governmental authorizations required
under applicable Environmental Laws, and compliance with the terms and
conditions thereof and compliance with notification, reporting and registration
provisions under applicable Environmental Laws; neither Havenwood nor Newco has
received notice of, or, to the knowledge of Havenwood or Newco, is the subject
of any Environmental Claim; and to the knowledge of Havenwood, there are no
circumstances that are reasonably likely to prevent or interfere with such
material compliance in the future, or to require material expenditures to
maintain such material compliance in the future.
(b) There are no Environmental Claims that are pending or, to the
knowledge
of Havenwood and Newco, threatened against Havenwood or Newco or, to the
knowledge of Havenwood and Newco, against any person or entity whose liability
for any Environmental Claim Havenwood or Newco has or may have retained or
assumed either contractually or by operation of law.
(c) To the knowledge of Havenwood and Newco, there are no
circumstances that could form the basis for an Environmental Claim against
Havenwood or Newco, or against any person or entity whose liability for any
Environmental Claim Havenwood or Newco has or may have retained or assumed
either contractually or by operation of law.
SECTION 3.15. Contract Rights. Except for this Agreement and the
agreements contemplated herein or as described on Schedule 3.15, neither
Havenwood nor Newco is a party to or bound by any contract or agreement, whether
written or oral, including, without limitation, any contract or agreement for
employment, consulting or similar services, for capital expenditures or the
acquisition or construction of fixed assets, which constitutes any note, bond,
indenture or other evidence of indebtedness or guaranty or security for
indebtedness of others, for the sale of any asset, or the grant of any right or
option to purchase such asset, which constitutes a lease, which purports to
limit the freedom of Havenwood or any of its affiliates to compete in any line
of business or in any geographic area or to borrow money or incur indebtedness.
SECTION 3.16. Employee Benefit Plans.
(a) Havenwood and Newco do not have, and have not had any employee
benefit plan (including, without limitation, any 'employee benefit plan,' as
defined in Section 3(3) of the ERISA), or any bonus, pension, profit sharing,
deferred compensation, incentive compensation, stock ownership, stock purchase,
stock option, phantom stock, retirement, vacation, severance, disability, death
benefit, hospitalization, insurance or other plan, arrangement or understanding
(whether or not legally binding).
(b) Havenwood and Newco are not parties to any collective bargaining
agreement.
(c) Havenwood and Newco have no obligation for retiree health, medical
or life insurance benefits under any plan or arrangement.
(d) Schedule 3.16 lists each employee of Havenwood and Newco and the
terms of employment of each such employee.
SECTION 3.17. Public Offering. The initial public offering of
Havenwood was a bona fide offering to the 'public' as such term is used and
defined in connection with offerings of securities subject to the Securities Act
in material compliance with the Securities Act and the rules and regulations
promulgated thereunder. All shares issued in such offering were issued in
compliance with applicable Blue Sky Laws. Attached hereto as Schedule 3.17 is a
true and correct list, as of the date hereof, of the shareholders of Havenwood.
ARTICLE IV
ADDITIONAL AGREEMENTS
SECTION 4.01. Appropriate Action; Consents; Filings. IWC and
Havenwood shall each use its best efforts to (i) take, or cause to be taken, all
appropriate action, and do, or cause to be done, all things necessary, proper or
advisable under applicable Law or otherwise to consummate and make effective the
transactions contemplated in this Agreement, (ii) obtain from any Governmental
Entities any consents, licenses, permits, waivers, approvals, authorizations or
orders required to be obtained or made by Havenwood or IWC or any of their
subsidiaries in connection with the consummation of the transactions
contemplated herein, including, without limitation, the Merger, (iii) make all
necessary filings, and thereafter make any other required submissions, with
respect to this Agreement and the Merger required under (A) the Securities Act
and the Exchange Act and the rules and regulations thereunder (in the case of
Havenwood), and any other applicable federal or state securities laws and (B)
any other applicable Law. IWC and Havenwood shall furnish all information
required for any application or other filing to be made pursuant to the rules
and regulations of any applicable Law in connection with the transactions
contemplated in this Agreement.
SECTION 4.02. Tax Treatment. Each of IWC and Havenwood shall use its
best efforts to cause the Merger to qualify, and will not take any actions which
could prevent the Merger from qualifying, as a reorganization under the
provisions of section 368(a) of the Code.
SECTION 4.03. Indemnification. (a) Each of Havenwood, Leibovit and
Slatkin (collectively the 'Indemnitors') jointly and severally covenants and
agrees that it will indemnify the stockholders of IWC exchanging IWC Common, IWC
Warrants and IWC Options in connection with the Merger ('IWC Stockholders') and
Havenwood (after the Merger) from and against any Loss (as hereinafter defined)
asserted against, resulting to, imposed upon or incurred or suffered, directly
or indirectly (for example, on account of a Loss incurred by Havenwood after the
date hereof), by such IWC Stockholders or and Havenwood (after the Merger)
resulting or arising from any of the following ('IWC Indemnified Claims'):
(i) Any inaccuracy in any of the representations and warranties made
by Havenwood or Newco herein or in any exhibit or schedule
attached hereto or any facts or circumstances constituting such
inaccuracy; and
(ii) Any breach or nonfulfillment by Havenwood or Newco of the
covenants or agreements set forth herein or in any exhibit or
schedule attached hereto or any facts or circumstances
constituting such breach or nonfulfillment;
provided, however, that IWC Stockholders and Havenwood (after the Merger) shall,
in the event of a claim for such indemnification, be entitled to reimbursement
for Losses in connection with such claim only as provided herein.
(b) IWC covenants and agrees that it will indemnify the stockholders of
Havenwood prior to the Merger ('Havenwood Stockholders') from and against any
Loss asserted against,
resulting to, imposed upon or incurred or suffered, directly or indirectly (for
example, on account of a Loss incurred by Havenwood after the date hereof), by
such Havenwood Stockholders resulting or arising from any of the following
('Havenwood Indemnified Claims'):
(i) Any inaccuracy in any of the representations and warranties made
by IWC herein or in any exhibit or schedule attached hereto or
any facts or circumstances constituting such inaccuracy; and
(ii) Any breach or nonfulfillment by IWC of the covenants or
agreements set forth herein or in any exhibit or schedule
attached hereto or any facts or circumstances constituting such
breach or nonfulfillment;
provided, however, that Havenwood Stockholders shall, in the event of a claim
for such indemnification, be entitled to reimbursement for Losses in connection
with such claim only as provided herein.
(c) As used herein, 'Loss' or 'Losses' shall mean any damage, liability or
loss (including, without limitation, reasonable attorneys' fees and court costs
and reasonable costs and expenses incident to, and amounts paid by the IWC
Stockholders or Havenwood (after the Merger), or any of their respective
affiliates, in settlement of, any claim, suit, action or proceeding) sustained,
incurred, paid or required to be paid by the IWC Stockholders or Havenwood
(after the Merger), or any of their respective affiliates, after the date
hereof, plus interest thereon at an annual rate of interest equal to the prime
rate of interest of Texas Commerce Bank National Association from the date of
such Loss to the date such claim is paid, provided that losses shall not be
duplicative (with respect to the IWC Stockholders and Havenwood (after the
Merger)) and shall be paid to the party or parties incurring such loss.
(d) The period of indemnity for Losses (the 'Indemnity Period') shall begin
on the date hereof and end at midnight on the second anniversary of the
Effective Time, and upon such expiration, the Indemnitors shall have no further
liability in respect of IWC Indemnified Claims and IWC shall have no further
liability for Havenwood Indemnified Claims hereunder; provided, however, that if
there is an outstanding notice of claim at the expiration of the Indemnity
Period, the Indemnity Period shall continue until each such indemnified claim or
claim related to such claimed Loss is resolved. The Indemnity Period shall not
continue as a result of the mere sending of a general notice of a claim
unsupported by a reasonable basis for believing that grounds for indemnification
exist; provided that the party receiving a notice which it believes meets the
exception set forth in the preceding clause shall raise such objection within
five days of receipt thereof and the party sending such notice shall have five
days thereafter to amend such notice to identify the reasonable basis of such
claim.
(e) Notwithstanding anything to the contrary contained herein, IWC
Stockholders and Havenwood (after the Merger) shall not be permitted
indemnification for any IWC Indemnified Claim until the Losses incurred with
respect to all IWC Indemnified Claims aggregate $20,000, in which event IWC
Stockholders shall be indemnified for the full value of all such IWC Indemnified
Claims and the full value of all subsequent IWC Indemnified Claims for which,
individually, Losses in excess of $1,000 have been incurred or asserted.
(f) Notwithstanding anything to the contrary contained herein, Havenwood
Stockholders shall not be permitted indemnification for any Havenwood
Indemnified Claim until the Losses incurred with respect to all Havenwood
Indemnified Claims aggregate $50,000, in which event Havenwood Stockholders
shall be indemnified for the full value of all such Havenwood Indemnified Claims
and the full value of all subsequent Havenwood Indemnified Claims for which,
individually, Losses in excess of $1,000 have been incurred or asserted.
(g) Indemnification for a Havenwood Indemnified Claim shall be solely in
the form of issuance of additional shares of Havenwood Common to Havenwood
Stockholders (their successors, assigns and transferees) pro rata in accordance
with their ownership of Havenwood Stock equal to the aggregate amount of the
Loss associated with such Havenwood Indemnified Claim through the date of
issuance. The value of such Havenwood Common for the purposes of this Section
4.03 only in determining the number of shares to be issued to compensate
Havenwood Stockholders for such Havenwood Indemnified Claim shall be fixed at
the fair market value per share determined by reference to the average closing
bid price of the thirty (30) day period immediately preceeding the date payment
is due hereunder. No payment shall be required of the recipients of shares of
Havenwood Common issued pursuant to this Section 4.03 in respect to such shares,
and Havenwood shall provide for the transfer of funds from its surplus account
to its stated capital account as necessary in relation to the aggregate par
value of the shares so issued.
(h) A claim for indemnification hereunder shall be sent to Havenwood and
each other Representative (as defined in subsection (i) hereof) by registered or
certified mail prior to the expiration of the Indemnity Period and shall set
forth (i) a brief description of the nature of the potential or actual Loss, and
(ii) the total amount of the Loss anticipated or incurred. Upon receiving
notice, if the Representative receiving the notice rejects any Loss, such
Representative shall give written notice of such rejection within thirty days
after the date of the notice of claim. If no such rejection of a notice of a
claim shall be so sent within such 30-day period, Havenwood and the
Representative receiving notice of a claim for any Loss shall be deemed to
acknowledge the validity of such claim for the full amount thereof. Each
Representative shall endeavor to assert each claim for indemnification, if any,
promptly after it has actual notice of such claim, even if it has not determined
the full amount of Loss associated with such claim. In the event that the other
Representative shall have made timely rejection of any such claim, and the
parties shall have failed to resolve or compromise such claim within thirty days
from the date the receiving Representative shall have mailed notice of such
rejection, then such claim shall be settled by arbitration in Houston, Harris
County, Texas. Such arbitration shall be subject to the Texas General
Arbitration Act and the rules of the American Arbitration Association, in
accordance with this Section. After the initiation of arbitration, the parties
shall attempt to agree upon one arbitrator. In the absence of such agreement,
there shall be three arbitrators, one designated in writing by the
Representative sending the notice and one designated in writing by the
Representative receiving notice, both of which shall be designated within thirty
days after arbitration has been initiated. The third arbitrator shall be chosen
by the two designated arbitrators within forty days after arbitration has been
initiated. All expenses of the arbitration shall be borne by the parties to the
arbitration as the arbitrator(s) shall determine. Any award shall be a
conclusive determination of the matter, shall be binding upon the parties and
shall not be contested by them. Within ten days after the liability for
indemnity hereunder is finally established, whether by the agreement
(constructive or otherwise) with a notice of claim,
settlement, arbitration or otherwise, payment shall be made in the amount of the
Loss determined by the arbitrator(s) in accordance with the terms hereof.
(i) Charles T. Phillips is hereby appointed to act as the agent and
attorney-in-fact of the IWC Stockholders and Havenwood (after the Merger), in
connection with the performance of this Section 4.03, and Mark Leibovit is
hereby appointed to act as the agent and attorney-in-fact of Havenwood
Stockholders in connection with the performance of this Section 4.03
(individually a 'Representative' and collectively the 'Representatives'), each
of whom shall have authority including, but not limited to, executing and
delivering for and on behalf of such parties all notices, receipts, approvals,
consents, waivers, agreements, papers, instruments and other documents in
connection herewith which such Representative deems necessary or appropriate,
including, without limitation, in connection with any amendments to or waiver of
any of the terms or provisions hereof, the granting of any consent hereunder,
and in all other instances where the IWC Stockholders, Havenwood (after the
Merger) or the Havenwood Stockholders, as appropriate, are required or permitted
to take any action hereunder. Any instruments and other deliveries to be made or
delivered to any IWC Stockholders, Havenwood (after the Merger) or Havenwood
Stockholders pursuant to this Agreement may be made or delivered to or as
directed by the Representative of such parties, and upon any such payment or
delivery the other parties hereto shall have no further liability with respect
thereto. The IWC Stockholders, and Havenwood (after the Merger) may, by the vote
or consent of the holders of Havenwood Stock and Havenwood Warrants receiving a
majority of the Merger Consideration to be paid to IWC Stockholders hereunder,
from time to time designate another person to serve as their Representative, and
upon notice to the other parties hereto, such parties shall thereafter deal with
such successor as if he were the Representative named herein. Havenwood
Stockholders may, by the vote or consent of the holders of Havenwood Stock on
the date hereof, from time to time designate another person to serve as their
Representative, and upon notice to the other parties, such parties shall
thereafter deal with such successor as if he were the Representative named
herein. The appointment of each Representative or successor Representative shall
be coupled with an interest and shall be irrevocable and binding in all respects
upon each of the IWC Stockholders, Havenwood (after the Merger) and Havenwood
Stockholders and his, her or its respective successors, assigns, heirs and
personal representatives.
SECTION 4.04. Officers and Directors of Havenwood. Prior to the date
hereof, the board of directors of Havenwood has been increased in number in
accordance with the Certificate of Incorporation and By-laws of Havenwood and
the General Corporation Law of Delaware, to ten (10) and, as of the date hereof,
the board of directors of Havenwood has, in accordance with the Certificate of
Incorporation and By-laws of Havenwood and the General Corporation Law of
Delaware, filled the vacancies on the board of directors resulting from such
increase in number by electing as directors of Havenwood: Larry H. Ramming,
Brian Krause, Doug Johnson, K. Kirk Krist and Jerry Winchester, effective upon
the resignation of the members of the board of directors currently in office.
Immediately following the closing hereof by Havenwood and Newco, the directors
and officers of Havenwood and Newco currently in office shall tender their
resignations effective immediately and the above named directors shall be the
only directors of Havenwood, until their death, resignation, removal from office
or their successors are elected and qualified.
SECTION 4.05. Opinion of Counsel to Havenwood. In connection herewith and
as a
condition hereto, Cohan, Cohen & Flame, P.C., as counsel to Havenwood, shall
deliver to IWC a legal opinion to the effect that a vote of the stockholders of
Havenwood is not required pursuant to Delaware law in order to approve the
merger or the transactions herein contemplated.
ARTICLE V
GENERAL PROVISIONS
SECTION 5.01. Effectiveness of Representations, Warranties and
Agreements. The representations, warranties and agreements of each party hereto
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any other party hereto, any person
controlling any such party or any of their officers or directors, whether prior
to or after the execution of this Agreement.
SECTION 5.02. Notices. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been duly
given or made as of the date delivered, mailed or transmitted, and shall be
effective upon receipt, if delivered personally, mailed by registered or
certified mail (postage prepaid, return receipt requested) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like changes of address) or sent by electronic transmission to the telecopier
number specified below:
(a) If to Havenwood or Newco:
HAVENWOOD VENTURES, INC.
c/o Cohan, Cohen & Flame, P.C.
12301 Wilshire Boulevard, Suite 550
Los Angeles, California 90025
Attention: Norman R. Cohen
Telecopier No.: (310) 207-6184
(b) If to IWC:
IWC SERVICES, Inc.
5151 San Filipe, Suite 450
Houston, Texas 77056
Attention: Larry H. Ramming
Telecopier No.: (713) 621-7988
with a copy to:
Brown, Parker & Leahy, L.L.P.
3600 Citicorp Center
1200 Smith Street
Houston, Texas 77002-4595
Attention: William Heller
Telecopier No.: (713) 654-1871
(c) If to Charles T. Phillips, as the IWC Representative:
c/o IWC SERVICES, Inc.
5151 San Filipe, Suite 450
Houston, Texas 77056
Telecopier No.: (713) 621-7988
(d) If to Mark Leibovit, as the Havenwood Representative
c/o Paradise Valley Securities, Inc.
11811 North Tatum Boulevard, Suite 4040
Phoenix, Arizona 85028
Telecopier No.: (602) 953-7989
After consummation of the Merger, notices to Havenwood shall be sent to the
address set forth for IWC.
SECTION 5.03. Certain Definitions. For purposes of this Agreement,
the term:
'knowledge' or 'known' shall mean, with respect to any matter in
question, if an executive officer of IWC or Havenwood, as the case may be, has
actual knowledge of such matter as of the date as of which such matter is
represented;
'Person' means an individual, corporation, limited liability company,
partnership, association, trust, unincorporated organization, other entity or
group (as defined in Section 13(d) of the Exchange Act);
'Subsidiary' or 'Subsidiaries' of IWC or Havenwood or any other
person, means any corporation, limited liability company, partnership, joint
venture or other legal entity of which IWC, Havenwood or such other person, as
the case may be (either alone or through or together with any other subsidiary),
owns, directly or indirectly, 50% or more of the capital stock or other equity
interests the holders of which are generally entitled to vote for the election
of the board of directors or other governing body of such corporation or other
legal entity;
'Tax' or 'Taxes' shall mean any and all taxes, charges, fees or
levies, payable to any federal, state, local or foreign taxing authority or
agency, including, without limitation, (i) income, franchise, profits, gross
receipts, minimum, alternative minimum, estimated, ad valorem, value added,
sales, use, service, real or personal property, capital stock, license, payroll,
withholding, disability, employment, social security, workers compensation,
unemployment compensation, utility, severance, excise, stamp, windfall profits,
transfer and capital gains taxes, (ii) custom duties, imposts, charges, levies
or other similar assessments of any kind, and (iii) interest, penalties and
additions to tax imposed with respect thereto.
SECTION 5.04. Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 5.05. Severability. If any term or other provision of this
Agreement is determined to be invalid, illegal or incapable of being enforced by
any rule of law or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated herein is not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the extent possible.
SECTION 5.06. Entire Agreement. This Agreement (together with the
Annexes, Schedules and Exhibits hereto) constitutes the entire agreement of the
parties and supersedes all prior agreements and undertakings, both written and
oral, between the parties with respect to the subject matter hereof.
SECTION 5.07. Assignment. This Agreement shall not be assigned by
operation of law or otherwise without the prior express written consent of the
other parties hereto.
SECTION 5.08. Parties in Interest. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied (other than the provisions of Section 5.07), is
intended to or shall confer upon any other person any right, benefit or remedy
of any nature whatsoever under or by reason of this Agreement.
SECTION 5.09. Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any such right preclude other or
further exercise thereof or of any other right. All rights and remedies
existing under this Agreement are in addition to, and not exclusive of, any
rights or remedies otherwise available.
SECTION 5.10. Governing Law. It is the intention of the parties that
the internal laws, and not the laws of conflicts, of the State of Texas shall
govern the enforceability and validity of this Agreement, the construction of
its terms and the interpretation of the rights and duties of the parties;
provided, however, that with respect to matters of law concerning the internal
affairs of any entity that is a party to or the subject of this Agreement, the
law of the jurisdiction of organization of such entity shall govern.
SECTION 5.11. Jurisdiction. Each party hereby irrevocably submits to
the exclusive jurisdiction of the United States District Court for the Southern
District of Texas or any court of the State of Texas located in the City of
Houston in any action, suit or proceeding arising in connection with this
Agreement or the transactions contemplated herein, and agrees that any such
action, suit or proceeding shall be brought only in such court (and waives any
objection based on forum non conveniens or any other objection to venue
therein); provided, however, that such consent to jurisdiction is solely for the
purpose referred to in this Section 5.11 and shall not be deemed to be a general
submission to the jurisdiction of said Courts or in the State of Texas other
than for such purpose. All parties hereby waive any right to a trial by jury in
connection
with any such action, suit or proceeding; provided, however, that matters to be
resolved through arbitration as specified herein shall be resolved only by such
arbitration, and the final arbitration award may thereafter be enforced as
provided in this Section 5.11.
SECTION 5.12. Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
SECTION 5.13 Amendment. This Agreement may be amended only by
written instrument executed by the parties hereto.
IN WITNESS WHEREOF, Havenwood, Newco, IWC, Leibovit and Slatkin have
caused this Agreement to be executed as of the date first written above by their
respective officer thereunto duly authorized.
SIGNATURES ON FOLLOWING PAGE
HAVENWOOD VENTURES, INC.
By: /s/ MARK LEIBOVIT
Name: Mark Leibovit
Title: President
Attest:_______________________
___________________, Secretary
HAVENWOOD ACQUISITION CORP.
By: /s/ JOHN L. PETERSEN
Name: John L. Petersen
Title: President
Attest:_______________________
___________________, Secretary
MARK LEIBOVIT, INDIVIDUALLY
/s/ MARK LEIBOVIT
REED SLATKIN, INDIVIDUALLY
/s/ REED SLATKIN
IWC SERVICES, INC.
By: /s/ BRIAN KRAUSE
Name: Brian Krause
Title: President
/s/ JENNIFER LANE
Attest:_______________________
___________________, Secretary
Agreement - Havenwood Ventures Inc., Havenwood Acquisition Corp. and IWC Services Inc.
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