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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported): DECEMBER 31, 1997
EVI, INC.
(Exact name of registrant as specified in charter)
DELAWARE 1-13086 04-2515019
(State of Incorporation) (Commission File No.) (I.R.S. Employer
Identification No.)
5 POST OAK PARK, SUITE 1760,
HOUSTON, TEXAS 77027-3415
(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 297-8400
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Exhibit Index Appears on Page 6
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ITEM 5. OTHER EVENTS.
CHRISTIANA ACQUISITION
On December 12, 1997, EVI, Inc. (the "Company") entered into an
Agreement and Plan of Merger (the "Merger Agreement") with Christiana
Acquisition, Inc., a Wisconsin corporation and wholly owned subsidiary of the
Company, Christiana Companies, Inc., a Wisconsin corporation ("Christiana"), and
C2, Inc.("C2"), a Wisconsin corporation, pursuant to a tax free merger (the
"Merger") in which approximately 3.9 million shares of the Company's common
stock, $1.00 par value (the "Common Stock"), will be issued to the stockholders
of Christiana.
Prior to the Merger, Christiana will sell two-thirds of its interest
(the "Logistic Sale") in Total Logistic Control, LLC, a Delaware limited
liability company and wholly owned subsidiary of Christiania ("Logistic"), to C2
for consideration of approximately $10.7 million. Following the Logistic Sale,
the remaining assets of Christiana will consist of (i) approximately 3.9 million
shares of the Company's Common Stock, (ii) a one-third interest in Logistic and
(iii) cash and other assets with a book value of approximately $10 million. It
is anticipated that Christiana will have no material debt as of the consummation
of the Merger, but will have various tax liabilities which will be paid with the
cash remaining in Christiana after the Merger. The acquisition of Christiana is
expected to increase the Company's stockholder base while allowing the company
to acquire a one-third interest in a profitable business engaged in the
refrigeration and warehousing business at an attractive price.
The Merger is subject to various conditions, including the receipt of
all required regulatory approvals and the expiration or termination of all
waiting periods (and extensions thereof) under the Hart-Scott-Rodino Act.
Although there can be no assurance that the Merger will close, the Company
currently anticipates that the acquisition will be consummated shortly after
receipt of such regulatory approvals and the approval of the Merger by the
stockholders of the Company and Christiania, and of the approval of the
Logistic Sale by the stockholders of Christiana.
COMPLETION OF TENDER OFFER
On December 15, 1997, the Company completed a cash tender offer and
consent solicitation (the "Tender Offer") relating to the Company's
outstanding 10 1/4% Senior Notes due 2004 and 10 1/4% Senior Notes due 2004,
Series B (collectively, the "Notes"). The Tender Offer expired at 12:00
midnight, New York City time, on Friday, December 12, 1997. An aggregate of
$119,980,000 principal amount of the Notes (representing 99.9% of the $120
million principal amount of Notes outstanding) validly tendered pursuant to the
Tender Offer were accepted for payment by the Company.
The Company entered into a supplemental indenture (the "Supplemental
Indenture") to the indenture governing the Notes (the "Indenture") incorporating
amendments to which tendering holders of the Notes consented. These amendments
eliminated or amended certain of the principal restrictive covenants contained
in the Indenture and released all subsidiary guarantors under the Indenture. As
a result, the holders of untendered Notes will be bound thereby. A copy of the
Supplemental Indenture is attached hereto as Exhibit 4.1 and is hereby
incorporated herein by reference.
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HOUSTON WELL SCREEN ACQUISITION
On December 17, 1997, the Company entered into an agreement to acquire
the Houston Well Screen group of companies from Van der Horst Limited, a
Singapore company, for a total purchase price of approximately $28 million. The
acquisition includes the purchase of Van der Horst USA Inc., which is the
holding company of Houston Well Screen Company ("HWS"), and of Houston Well
Screen Asia Pte Ltd. ("HWA") which has operations in Singapore and Indonesia.
HWS and HWA make wedge-wire screen products for use in oil and gas production
and other applications. The Company's acquisition of the Houston Well Screen
companies is subject to various conditions, including the receipt of all
necessary governmental consents and approvals and the expiration of all
applicable waiting periods.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
2.1 - Agreement and Plan of Merger by and among EVI, Inc.,
Christiana Acquisition, Inc., Christiana Companies, Inc.
and C2, Inc. dated December 12, 1997.
2.2 - Agreement by and among EVI, Inc., Total Logistic Control,
LLC, Christiana Companies, Inc. and C2, Inc. dated
December 12, 1997.
2.3 - Letter Agreement by and among EVI, Inc., Christiana
Acquisition, Inc., Christiana Companies, Inc. and C2,
Inc. dated December 12, 1997.
2.4 - Amended and Restated Arrangement Agreement by and between
Taro Industries Limited, and EVI, Inc. and 756745 Alberta
Ltd. and 759572 Alberta Ltd. dated as of December 5, 1997.
4.1 - Fifth Supplemental Indenture by and between EVI, Inc. and
The Chase Manhattan Bank dated as of December 12, 1997
(including the Form of Note and Form of Exchange Note).
4.2 - Second Amendment to Amended and Restated Credit Agreement
by and between EVI, Inc., the Subsidiary Guarantors
defined therein and The Chase Manhattan Bank and the other
lenders defined therein dated as of October 23, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EVI, INC.
Dated: December 31, 1997 /s/ Frances R. Powell
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Frances R. Powell
Vice President, Accounting
and Controller
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Number Exhibit
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<S> <C>
2.1 Agreement and Plan of Merger by and among EVI, Inc., Christiana
Acquisition, Inc., Christiana Companies, Inc. and C2, Inc. dated December
12, 1997.
2.2 Agreement by and among EVI, Inc., Total Logistic Control, LLC, Christiana
Companies, Inc. and C2, Inc. dated December 12, 1997.
2.3 Letter Agreement by and among EVI, Inc., Christiana Acquisition, Inc.,
Christiana Companies, Inc. and C2, Inc. dated December 12, 1997.
2.4 Amended and Restated Arrangement Agreement by and between Taro Industries
Limited, and EVI, Inc. and 756745 Alberta Ltd. and 759572 Alberta Ltd.
dated as of December 5, 1997.
4.1 Fifth Supplemental Indenture by and between EVI, Inc. and The Chase
Manhattan Bank dated as of December 12, 1997 (including the Form of Note
and Form of Exchange Note).
4.2 Second Amendment to Amended and Restated Credit Agreement by and between
EVI, Inc., the Subsidiary Guarantors defined therein and The Chase
Manhattan Bank and the other lenders defined therein dated as of October
23, 1997.
</TABLE>
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EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
EVI, INC.,
CHRISTIANA ACQUISITION, INC.,
CHRISTIANA COMPANIES, INC.
AND
C2, INC.
DECEMBER 12, 1997
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TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE I
THE MERGER . . . . . . . . . . . . . . 1
1.1 THE MERGER. . . . . . . . . . . . . . . . . . . . . . 1
1.2 CLOSING DATE. . . . . . . . . . . . . . . . . . . . . 2
1.3 CONSUMMATION OF THE MERGER. . . . . . . . . . . . . . 2
1.4 EFFECTS OF THE MERGER. . . . . . . . . . . . . . . . 2
1.5 CERTIFICATE OF INCORPORATION; BYLAWS. . . . . . . . . 2
1.6 DIRECTORS AND OFFICERS. . . . . . . . . . . . . . . . 2
1.7 CONVERSION OF SECURITIES. . . . . . . . . . . . . . . 2
1.8 EXCHANGE OF CERTIFICATES . . . . . . . . . . . . . . 4
(a) Exchange Agent . . . . . . . . . . . . . . . . 4
(b) Payment of Merger Consideration . . . . . . . 4
(c) Retention of Cash Pending Post Closing Audit . 4
(d) Payment of Contingent Cash Consideration . . . 4
(e) Exchange Procedure . . . . . . . . . . . . . . 5
(f) Distributions with Respect to Unexchanged
Christiana Shares . . . . . . . . . . . . . . 6
(g) No Further Ownership Rights in Christiana
Shares . . . . . . . . . . . . . . . . . . . . 6
(h) Escheat . . . . . . . . . . . . . . . . . . . 6
1.9 TAKING OF NECESSARY ACTION; FURTHER ACTION . . . . . 7
ARTICLE II
REPRESENTATIONS AND WARRANTIES . . . . . . . . . 7
2.1 REPRESENTATIONS AND WARRANTIES OF EVI AND SUB. . . . 7
(a) Organization and Compliance with Law. . . . . 7
(b) Capitalization . . . . . . . . . . . . . . . . 7
(c) Authorization and Validity of Agreement. . . 8
(d) No Approvals or Notices Required; No Conflict . 8
(e) Commission Filings; Financial Statements . . . 8
(f) Absence of Certain Charges and Events . . . . 9
(g) Tax Matters . . . . . . . . . . . . . . . . . 9
(h) Voting Requirements. . . . . . . . . . . . . . 9
(i) Brokers . . . . . . . . . . . . . . . . . . . 9
(j) Information Supplied . . . . . . . . . . . . . 10
2.2 REPRESENTATIONS AND WARRANTIES OF CHRISTIANA AND
C2. . . . . . . . . . . . . . . . . . . . . . 10
(a) Organization. . . . . . . . . . . . . . . . . 10
(b) Capitalization. . . . . . . . . . . . . . . . 10
(c) Authorization and Validity of Agreement. . . . 11
(d) No Approvals or Notices Required; No
Conflict with Instruments to which
Christiana is a Party. . . . . . . . . . . . . 12
(e) Commission Filings; Financial Statements. . . 13
(f) Conduct of Business in the Ordinary Course;
Absence of Certain Changes and Events. . . . . 13
(g) Litigation . . . . . . . . . . . . . . . . . . 14
(h) Employee Benefit Plans. . . . . . . . . . . . 14
(i) Taxes. . . . . . . . . . . . . . . . . . . . . 16
(j) Environmental Matters. . . . . . . . . . . . . 17
(k) Investment Company . . . . . . . . . . . . . . 18
</TABLE>
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<TABLE>
<S> <C> <C>
(l) Severance Payments. . . . . . . . . . . . . . 18
(m) Voting Requirements. . . . . . . . . . . . . . 19
(n) Brokers . . . . . . . . . . . . . . . . . . . 19
(o) Assets and Liabilities at Closing . . . . . . 19
(p) Compliance with Laws . . . . . . . . . . . . . 19
(q) Contracts . . . . . . . . . . . . . . . . . . 20
(r) Title to Property . . . . . . . . . . . . . . 21
(s) Insurance Policies . . . . . . . . . . . . . . 21
(t) Loans. . . . . . . . . . . . . . . . . . . . . 21
(u) No Fraudulent Transfer . . . . . . . . . . . . 21
(v) Information Supplied . . . . . . . . . . . . . 22
ARTICLE III
COVENANTS OF CHRISTIANA . . . . . . . . . . . 22
3.1 CONDUCT OF BUSINESS BY CHRISTIANA PENDING THE
MERGER. . . . . . . . . . . . . . . . . . . . . . . . 22
3.2 CASH REQUIREMENTS . . . . . . . . . . . . . . . . . . 25
3.3 AFFILIATES' AGREEMENTS . . . . . . . . . . . . . . . 25
ARTICLE IV
COVENANTS OF EVI PRIOR TO THE EFFECTIVE TIME . . . . . . 26
4.1 RESERVATION OF EVI STOCK . . . . . . . . . . . . . . 26
4.2 CONDUCT OF EVI PENDING THE MERGER . . . . . . . . . . 26
4.3 STOCK EXCHANGE LISTING. . . . . . . . . . . . . . . . 26
ARTICLE V
ADDITIONAL AGREEMENTS . . . . . . . . . . . . 26
5.1 JOINT PROXY STATEMENT/PROSPECTUS; REGISTRATION
STATEMENT. . . . . . . . . . . . . . . . . . . . . . 26
5.2 ACCOUNTANTS LETTER. . . . . . . . . . . . . . . . . . 26
5.3 MEETINGS OF STOCKHOLDERS. . . . . . . . . . . . . . . 27
5.4 FILINGS; CONSENTS; REASONABLE EFFORTS. . . . . . . . 27
5.5 NOTIFICATION OF CERTAIN MATTERS. . . . . . . . . . . 27
5.6 EXPENSES. . . . . . . . . . . . . . . . . . . . . . . 28
5.7 CHRISTIANA'S EMPLOYEE BENEFITS. . . . . . . . . . . . 28
5.8 LIQUIDATION OR MERGER OF CHRISTIANA. . . . . . . . . 28
ARTICLE VI
CONDITIONS . . . . . . . . . . . . . . 29
6.1 CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT
THE MERGER. . . . . . . . . . . . . . . . . . . . . . 29
6.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF EVI. . . . . 29
6.3 ADDITIONAL CONDITIONS TO OBLIGATIONS OF CHRISTIANA. . 31
ARTICLE VII
MISCELLANEOUS . . . . . . . . . . . . . . 32
7.1 TERMINATION. . . . . . . . . . . . . . . . . . . . . 32
7.2 EFFECT OF TERMINATION . . . . . . . . . . . . . . . . 33
7.3 WAIVER AND AMENDMENT . . . . . . . . . . . . . . . . 33
7.4 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. . . . 33
7.5 PUBLIC STATEMENTS. . . . . . . . . . . . . . . . . . 33
</TABLE>
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<TABLE>
<S> <C> <C>
7.6 ASSIGNMENT. . . . . . . . . . . . . . . . . . . . . . 33
7.7 NOTICES. . . . . . . . . . . . . . . . . . . . . . . 34
7.8 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . 35
7.9 ARBITRATION. . . . . . . . . . . . . . . . . . . . . 35
7.10 SEVERABILITY. . . . . . . . . . . . . . . . . . . . . 36
7.11 COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . 36
7.12 HEADINGS. . . . . . . . . . . . . . . . . . . . . . . 36
7.13 CONFIDENTIALITY AGREEMENT. . . . . . . . . . . . . . 36
7.14 ENTIRE AGREEMENT: THIRD PARTY BENEFICIARIES. . . . . 36
7.15 DISCLOSURE LETTERS. . . . . . . . . . . . . . . . . . 36
</TABLE>
LIST OF EXHIBITS
Exhibit A - Logistic Purchase Agreement
Exhibit B - Amended and Restated Certificate of Incorporation of Christiana
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER dated as of December 12, 1997 (this
"Agreement"), is made and entered into by and among EVI, INC., a Delaware
corporation ("EVI"), CHRISTIANA ACQUISITION, INC., a Wisconsin corporation and
wholly owned subsidiary of EVI ("Sub"), CHRISTIANA COMPANIES, INC., a Wisconsin
corporation ("Christiana"), and C2, INC., a Wisconsin corporation ("C2").
WHEREAS, subject to and in accordance with the terms and conditions of
this Agreement, the respective Boards of Directors of EVI, Sub and Christiana,
and EVI as sole stockholder of Sub, have approved the merger of Sub with and
into Christiana (the "Merger"), whereby each issued and outstanding share of
common stock, $1.00 par value, of Christiana ("Christiana Common Stock") not
owned directly or indirectly by Christiana will be converted into the right to
receive (i) common stock, $1.00 par value, of EVI ("EVI Common Stock") plus
(ii) the Cash Consideration Per Share (as defined in Section 1.7(e)) and (iii)
the Contingent Cash Consideration Per Share (as defined in Section 1.7(f));
WHEREAS, as a condition to the Merger, Christiana will sell to C2 two-
thirds of the interest (the "Logistic Interest") in Total Logistic Control,
LLC, a Delaware limited liability company and wholly owned subsidiary of
Christiana ("Logistic"), in consideration for $10,666,667 in cash (the
"Logistic Sale") pursuant to a Purchase Agreement between Christiana, C2, EVI
and Sub in substantially the form attached hereto as Exhibit A (the "Logistic
Purchase Agreement");
WHEREAS, immediately after the Effective Time, Christiana will only hold
the Christiana Assets, as such terms are hereinafter defined in Sections 1.3
and 2.2(o);
WHEREAS, for federal income tax purposes, it is intended that the Merger
shall qualify as a reorganization within the meaning of Section 368(a)(1)(A) by
reason of Section 368(a)(2)(E) of the Internal Revenue Code of 1986, as amended
(the "Code"); and
WHEREAS, the parties hereto desire to set forth certain representations,
warranties and covenants made by each to the other as an inducement to the
consummation of the Merger;
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties and covenants herein contained, the parties hereto
hereby agree as follows:
ARTICLE I
THE MERGER
1.1 THE MERGER. Subject to and in accordance with the terms and
conditions of this Agreement and in accordance with the General Corporation Law
of the State of Wisconsin ("WGCL"), at the Effective Time (as defined in
Section 1.3), Sub shall be merged with and into Christiana. As a result of the
Merger, the separate corporate existence of Sub shall cease and Christiana
shall continue as the surviving corporation (sometimes referred to herein as
the "Surviving Corporation"), and all the properties, rights, privileges,
powers and franchises of Sub and Christiana shall vest in the Surviving
Corporation, without any transfer or assignment having occurred, and certain
liabilities, debts and duties of Sub and Christiana shall attach to the
Surviving Corporation, all in accordance with the WGCL and subject to the
provisions of the Logistic Purchase Agreement.
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1.2 CLOSING DATE. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of Fulbright &
Jaworski L.L.P, Houston, Texas, as soon as practicable after the satisfaction
or waiver of the conditions set forth in Article VI hereof or at such other
time and place and on such other date as EVI and Christiana shall agree;
provided that the closing conditions set forth in Article VI hereof shall have
been satisfied or waived at or prior to such time. The date on which the
Closing occurs is herein referred to as the "Closing Date".
1.3 CONSUMMATION OF THE MERGER. As soon as practicable on the
Closing Date, the parties hereto will cause the Merger to be consummated by
filing with the Secretary of State of Wisconsin a certificate of merger in such
form as required by, and executed in accordance with, the relevant provisions
of the WGCL. The "Effective Time" of the Merger, as that term is used in this
Agreement, shall mean such time as a certificate of merger is duly filed with
the Wisconsin Secretary of State or at such later time (not to exceed seven
days from the date the certificate of merger is filed) as is specified in the
certificates of merger pursuant to the mutual agreement of EVI and Christiana.
1.4 EFFECTS OF THE MERGER. The Merger shall have the effects set
forth in the applicable provisions of the WGCL. If at any time after the
Effective Time of the Merger, the Surviving Corporation shall consider or be
advised that any further assignments or assurances in law or otherwise are
necessary or desirable to vest, perfect or confirm, of record or otherwise, in
the Surviving Corporation, all rights, title and interests in all real estate
and other property and all privileges, powers and franchises of Christiana and
Sub, the Surviving Corporation and its proper officers and directors, in the
name and on behalf of Christiana and Sub, shall execute and deliver all such
proper deeds, assignments and assurances in law and do all things necessary and
proper to vest, perfect or confirm title to such property or rights in the
Surviving Corporation and otherwise to carry out the purpose of this Agreement,
and the proper officers and directors of the Surviving Corporation are fully
authorized in the name of Christiana or otherwise to take any and all such
action.
1.5 CERTIFICATE OF INCORPORATION; BYLAWS. The Certificate of
Incorporation of Christiana, as amended and restated by the amendment set forth
in Exhibit B attached hereto, shall be the Certificate of Incorporation of the
Surviving Corporation and thereafter shall continue to be its Certificate of
Incorporation until amended as provided therein or under the WGCL. The bylaws
of Sub, as in effect immediately prior to the Effective Time, shall be the
bylaws of the Surviving Corporation and thereafter shall continue to be its
bylaws until amended as provided therein or under the WGCL.
1.6 DIRECTORS AND OFFICERS. The directors of Sub immediately prior
to the Effective Time shall be the directors of the Surviving Corporation at
and after the Effective Time, each to hold office in accordance with the
Certificate of Incorporation and bylaws of the Surviving Corporation, and the
officers of Sub immediately prior to the Effective Time shall be the officers
of the Surviving Corporation at and after the Effective Time, in each case
until the earlier of their resignation or removal or their respective
successors are duly elected or appointed and qualified.
1.7 CONVERSION OF SECURITIES. Subject to the terms and conditions of
this Agreement, at the Effective Time, by virtue of the Merger and without any
further action on the part of EVI, Christiana, Sub or their stockholders:
(a) Subject to adjustments pursuant to Sections 1.7(d) and
1.7(e) hereof, each share of Christiana Common Stock issued and
outstanding immediately prior to the Effective Time (the "Christiana
Shares") shall be converted into the right to receive
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(i) .75876 of one share of EVI Common Stock (the "Stock Exchange Ratio")
plus (ii) the Cash Consideration Per Share as defined in Section 1.7(e)
and (iii) the Contingent Cash Consideration Per Share (as defined in
Section 1.7(f)); provided, however, that no fractional shares of EVI
Common Stock shall be issued and, in lieu thereof, all fractional shares
of EVI Common Stock that would otherwise be issuable in the Merger shall
be rounded to the nearest whole share of EVI Common Stock. Except as
set forth in the preceding sentence with respect to the Cash
Consideration Per Share, no other consideration will be paid to the
Christiana stockholders.
(b) Each Christiana Share owned directly or indirectly by
Christiana as treasury stock and each Christiana Share owned by Sub, EVI
or any direct or indirect wholly-owned subsidiary of EVI or of
Christiana immediately prior to the Effective Time shall be canceled and
extinguished without any conversion thereof and no payment or other
consideration shall be made or paid with respect thereto.
(c) Each share of common stock, $1.00 par value, of Sub issued
and outstanding immediately prior to the Effective Time shall be
converted into one fully paid and nonassessable share of common stock,
$1.00 par value, of the Surviving Corporation.
(d) The Stock Exchange Ratio is based on (i) 5,136,630 shares
of Christiana Common Stock being issued and outstanding immediately
prior to the Effective Time and (ii) 3,897,462 shares of EVI Common
Stock being held by Christiana immediately prior to the Effective Time.
In the event the number of shares of Christiana Common Stock outstanding
immediately prior to the Effective Time is greater or less than
5,136,630 or the number of shares of EVI Common Stock held by Christiana
immediately prior to the Effective Time is greater or less than
3,897,462, the Stock Exchange Ratio shall be adjusted to equal the
number of shares of EVI Common Stock held by Christiana immediately
prior to the Effective Time divided by the number of shares of
Christiana Common Stock issued and outstanding immediately prior to the
Effective Time.
(e) The "Cash Consideration Per Share", shall equal the
quotient of the Christiana Net Cash divided by 5,136,630. The
"Christiana Net Cash" shall mean and be equal to (i) the sum of (A)
$20,000,000 obtained in connection with the TLC Dividend, (B)
$10,666,667 to be obtained in connection with the Logistic Sale
(provided, however, that if such funds are not received by Christiana
when and as required under the Logistic Purchase Agreement, such funds
will not be considered as part of Christiana Net Cash), (C) $3,000,000
obtained in connection with the Wiscold Note, (D) the cash received from
the exercise of stock options and (E) all other cash on hand of
Christiana at the Closing minus (ii) the sum of (A) an amount of cash
necessary to pay the Christiana Liabilities in full without giving
effect to the use or application of any tax deductions relating to the
exercise of options or any tax benefits that may be realized as a result
of amended Tax Returns and (B) $10,000,000. The "Cash Consideration Per
Share" is based on 5,136,630 shares of Christiana Common Stock being
issued and outstanding immediately prior to the Effective Time. In the
event the number of shares of Christiana Common Stock outstanding
immediately prior to the Effective Time is greater or less than
5,136,630, the Cash Consideration Per Share shall be adjusted to equal
the quotient of the Christiana Net Cash divided by the number of shares
of Christiana Common Stock issued and outstanding immediately prior to
the Effective Time. The terms "TLC Dividend," "Wiscold Note" and
"Christiana Liabilities" shall have the meanings set forth in Sections
3.1(s), 3.1(t) and 2.2(o), respectively.
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(f) The "Contingent Cash Consideration Per Share" shall mean
the Remaining Contingent Cash divided by 5,136,630. The "Remaining
Contingent Cash" shall mean $10,000,000 less the sum of (i) all Assumed
Liabilities (as defined in the C2 Purchase Agreement) paid by
Christiana, EVI or their respective successors and assigns during the
Contingent Liability Period and (ii) all other Liabilities (as defined
in the Logistic Purchase Agreement) incurred by or on behalf of them
during the Contingent Liability Period; provided, however, that no
subtraction shall be made in either (i) or (ii) for liabilities
previously subtracted for Christiana Liabilities in Section 1.7(e). The
Contingent Liability Period shall mean the period from the Effective
Date through the fifth anniversary of Effective Date; provided, however,
that if on the fifth anniversary of the Effective Date there is any
pending or threatened claim, demand or suit or existing matter for which
EVI has reasonably determined that an EVI Indemnified Party (as defined
in the Logistic Purchase Agreement) will be entitled to indemnification
under Section 6.1(a) of the Logistic Purchase Agreement, the Contingent
Liability Period shall be extended until such time that such claim,
demand, suit or matter is wholly resolved, paid and not subject to
appeal or further claims. The "Contingent Cash Consideration Per Share"
is based on 5,136,630 shares of Christiana Common Stock being issued and
outstanding immediately prior to the Effective Time. In the event the
number of shares of Christiana Common Stock outstanding immediately
prior to the Effective Time is greater or less than 5,136,630, the
Contingent Cash Consideration Per Share shall be adjusted to equal the
quotient of the Remaining Contingent Cash divided by the number of
shares of Christiana Common Stock issued and outstanding immediately
prior to the Effective Time.
1.8 EXCHANGE OF CERTIFICATES.
(a) Exchange Agent. Prior to the Effective Time of the
Merger, EVI shall select a bank or trust company to act as exchange
agent (the "Exchange Agent") for the issue of shares of EVI Common Stock
upon surrender of certificates representing Christiana Shares.
(b) Payment of Merger Consideration. EVI shall take all steps
necessary to enable and cause there to be provided to the Exchange Agent
on a timely basis, as and when needed after the Effective Time of the
Merger, certificates for the shares of EVI Common Stock to be issued
upon the conversion of the Christiana Shares pursuant to Section 1.7 and
the cash necessary to be issued for the Cash Consideration Per Share.
The Contingent Cash Consideration Per Share shall be paid as provided in
Section 1.8(d).
(c) Retention of Cash Pending Post Closing Audit. Within 30
days following the Effective Date, EVI shall (i) complete a post closing
audit by EVI of the Christiana Net Cash and (ii) pay to the Exchange
Agent on behalf of the holders of the Christiana Shares the Cash
Consideration Per Share in respect of such Christiana Shares subject to
the prior presentation of the certificates that immediately prior to the
Effective Time represented the outstanding Christiana Shares (the
"Certificates").
(d) Payment of Contingent Cash Consideration. Within 60 days
following the expiration of the Contingent Liability Period, EVI shall
send a notice to the prior holders of the Christiana Shares as of the
Effective Time of the Merger at their last known address advising them
as to the amount of the Contingent Cash Consideration Per Share as
determined in the reasonable good faith by EVI; provided, however, that
if on the fifth anniversary of the Effective Date there is any pending
or threatened claim, demand or suit or existing matter for which EVI has
reasonably determined an
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EVI Indemnified Party will be entitled to indemnification under Section
6.1(a) of the Logistic Agreement (an "Extension Event"), EVI shall
within 60 days thereafter determine the amount, if any, of the
Contingent Cash Consideration that is in excess of the sum of (i) the
amount necessary to pay the full amount of all such pending or
threatened claims, demands, suits or matters based on the amount
claimed, demanded or sought and (ii) the estimated costs of
investigation and defense of such matters (the "Excess Cash") and send a
notice to the prior holders of the Christiana Shares as of the Effective
Time of the Merger at their last known address advising them of the
amount of the Excess Cash Per Share (as defined below). The Excess Cash
Per Share shall mean the Excess Cash divided by the number of shares of
Christiana Common Stock issued and outstanding immediately prior to the
Effective Time. The Excess Cash Per Share shall be part of the
Contingent Cash Per Share and not a separate right to payment. Such
determinations shall be conclusive and binding on the prior holders of
the Christiana Shares. Subject to any limitations existing under law,
along with the aforementioned notice, EVI shall send to each holder of
record of a Certificate that was tendered for exchange pursuant to
Section 1.8(e) a check in an amount equal to (i) if an Extension Event
exists on the fifth anniversary of the Effective Date, the Excess Cash
Per Share with the first notice and the Contingent Cash Consideration
Per Share, if any, less the Excess Cash Per Share at the time of the
second notice and (ii) if an Extension Event does not exist on the fifth
anniversary of the Effective Time of the Merger, the Contingent Cash
Consideration Per Share, in each case, payable in respect of the
Christiana Shares represented by such Certificate. Such payments shall
be made without interest and be subject to any applicable withholding
for taxes thereon. The Contingent Cash Consideration Per Share shall
represent an inchoate right to receive cash in the future under certain
limited circumstances provided herein and shall not represent any right
to or in any of the assets of EVI or Christiana. The right to receive
the Contingent Cash Consideration Per Share shall not be transferrable
except for transfers by operation of law or by will or intestate
succession. EVI may, but shall not be required to, establish a trust or
escrow fund with respect to the Contingent Cash Consideration Per Share
that may be payable hereunder.
(e) Exchange Procedure. As soon as reasonably practical after
the Effective Time of the Merger, the Exchange Agent shall mail to each
holder of record of a Certificate or Certificates, other than EVI, Sub
and Christiana and any directly or indirectly wholly owned subsidiary of
EVI, Sub or Christiana, (i) a letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the
Exchange Agent and shall be in a form and have such other provisions as
EVI and Sub may reasonably specify) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for the
certificates representing the shares of EVI Common Stock, the Cash
Consideration Per Share and Contingent Cash Consideration Per Share.
Upon surrender of a Certificate for cancellation to the Exchange Agent
or to such other agent or agents as may be appointed by the Surviving
Corporation, together with such letter of transmittal, duly executed,
and such other documents as may reasonably be required by the Exchange
Agent, the holder of such Certificate shall be entitled to receive in
exchange therefor a certificate or certificates representing the number
of whole shares of EVI Common Stock into which the Christiana Shares
theretofore represented by such Certificate shall have been converted
pursuant to Section 1.7 and the Cash Consideration Per Share and
Contingent Cash Consideration Per Share as provided in Section 1.8(c)
and (d), and the Certificate so surrendered shall forthwith be canceled.
If the shares of EVI Common Stock are to be issued to an individual,
corporation, limited liability company, partnership, governmental
authority or any other entity (a "Person"), other than the person in
whose name the Certificate so surrendered is
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registered, it shall be a condition of exchange that such Certificate
shall be properly endorsed or otherwise in proper form for transfer and
that the Person requesting such exchange shall pay any transfer or other
taxes required by reason of the exchange to a Person other than the
registered holder of such Certificate or establish to the satisfaction
of the Surviving Corporation that such tax has been paid or is not
applicable. Until surrendered as contemplated by this Section 1.8, each
Certificate shall be deemed at any time after the Effective Time of the
Merger to represent only the right to receive upon such surrender the
number of shares of EVI Common Stock, the Cash Consideration Per Share
and Contingent Cash Consideration Per Share payable in respect of the
Christiana Shares pursuant to Section 1.7. The Exchange Agent shall not
be entitled to vote or exercise any rights of ownership with respect to
the shares of EVI Common Stock held by it from time to time hereunder,
except that it shall receive and hold all dividends or other
distributions paid or distributed with respect thereto for the account
of Persons entitled thereto. Any unexchanged shares of EVI Common Stock
issuable pursuant to the Merger in respect of the Christiana Shares
shall be issued in the name of the Exchange Agent pending the receipt by
the Exchange Agent of Certificates.
(f) Distributions with Respect to Unexchanged Christiana
Shares. No dividends or other distributions declared or made after the
Effective Time of the Merger with respect to the shares of EVI Common
Stock with a record date after the Effective Time of the Merger shall be
paid to the holder of any unsurrendered Certificate with respect to the
shares of EVI Common Stock represented thereby and the Cash
Consideration Per Share shall not be paid until the holder of record of
such Certificate shall surrender such Certificate. Subject to the
effect of applicable laws, following surrender of any such Certificate,
there shall be paid to the record holder of the Certificates
representing the shares of EVI Common Stock issued in exchange therefor,
without interest, (i) the amount of dividends or other distributions
with a record date after the Effective Time of the Merger theretofore
paid with respect to such whole shares of EVI Common Stock, as the case
may be, (ii) at the appropriate payment date, the amount of dividends or
other distributions with a record date after the Effective Time of the
Merger but prior to surrender and a payment date subsequent to surrender
payable with respect to such whole shares of EVI Common Stock and (iii)
the Cash Consideration Per Share and Contingent Cash Consideration Per
Share at the appropriate payment date as provided in this Section 1.8.
(g) No Further Ownership Rights in Christiana Shares. All
shares of EVI Common Stock issued upon the surrender of Certificates in
accordance with the terms of this Article I, together with any dividends
payable thereon to the extent contemplated by this Section 1.8 and the
rights to receive the Cash Consideration Per Share and the Contingent
Cash Consideration Per Share as provided herein, shall be deemed to have
been exchanged and paid in full satisfaction of all rights pertaining to
the Christiana Shares theretofore represented by such Certificates and
there shall be no further registration of transfers on the stock
transfer books of the Surviving Corporation of the Christiana Shares
that were outstanding immediately prior to the Effective Time of the
Merger. If, after the Effective Time of the Merger, Certificates are
presented to the Surviving Corporation for any reason, they shall be
canceled and exchanged as provided in this Article I.
(h) Escheat. None of EVI, Sub, Christiana, the Surviving
Corporation or their transfer agents shall be liable to a holder of the
Christiana Shares for any amount properly paid to a public official
pursuant to applicable property, escheat or similar laws.
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1.9 TAKING OF NECESSARY ACTION; FURTHER ACTION. The parties hereto
shall take all such reasonable and lawful action as may be necessary or
appropriate in order to effectuate the Merger and the Logistic Sale as promptly
as possible. If, at any time after the Effective Time, any such further action
is necessary or desirable to carry out the purposes of this Agreement or the
Logistic Sale, and to vest the Surviving Corporation with full right, title and
possession to all assets, property, rights, privileges, powers and franchises
of Christiana or Sub as of the Effective Time, such corporations shall direct
their respective officers and directors to take all such lawful and necessary
action.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF EVI AND SUB. EVI and Sub
hereby jointly and severally represent and warrant to Christiana that:
(a) Organization and Compliance with Law. EVI and Sub are
corporations duly incorporated, validly existing and in good standing
under the laws of the states of Delaware and Wisconsin, respectively.
Each of EVI and Sub has all requisite corporate power and corporate
authority to own, lease and operate all of its properties and assets and
to carry on its business as now being conducted, except where the
failure to be so organized, existing or in good standing would not have
a material adverse effect on the financial condition of EVI and its
subsidiaries (the "EVI Subsidiaries"), taken as a whole (an "EVI MAE").
Each of EVI and Sub is duly qualified to do business, and is in good
standing, in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification necessary, except in such jurisdictions where the failure
to be duly qualified would not have an EVI MAE. Each of EVI and Sub is
in compliance with all applicable laws, judgments, orders, rules and
regulations, except where such failure would not have an EVI MAE. EVI
has heretofore delivered to Christiana true and complete copies of EVI's
Restated Certificate of Incorporation, as amended (the "EVI
Certificate"), and Sub's Certificate of Incorporation and their
respective bylaws as in existence on the date hereof.
(b) Capitalization.
(i) The authorized capital stock of EVI consists of
80,000,000 shares of EVI Common Stock, $1.00 par value, and
3,000,000 shares of preferred stock, $1.00 par value ("EVI
Preferred Stock"). As of December 10, 1997, there were
47,103,494 shares of EVI Common Stock issued and outstanding. As
of December 10, 1997, (i) 5,031,250 shares of EVI Common Stock
were reserved for issuance pursuant to the conversion provisions
of EVI's 5% Convertible Subordinated Preferred Equivalent
Debentures due 2027, (ii) 800,000 shares of EVI Common Stock were
reserved for issuance pursuant to pending or proposed
acquisitions and (iii) 2,506,400 shares of EVI Common Stock were
reserved for issuance pursuant to EVI's employee and director
benefit plans and arrangements, of which 1,376,400 shares of EVI
Common Stock were reserved for issuance upon exercise of
outstanding options. At December 10, 1997, there were no shares
of EVI Preferred Stock issued or outstanding. No holder of EVI
Common Stock is entitled to preemptive rights under Delaware law
or EVI's Certificate of Incorporation.
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(ii) As of the date hereof, the authorized capital stock
of Sub consists of 1,000 shares of common stock, $1.00 par value,
all of which are validly issued, fully paid and nonassessable and
are owned by EVI.
(iii) Each share of EVI Common Stock to be issued
hereunder as a result of the Merger will be fully paid and non-
assessable upon issuance.
(c) Authorization and Validity of Agreement. The execution
and delivery by EVI and Sub of this Agreement and the consummation by
each of them of the transactions contemplated hereby have been duly
authorized by all necessary corporate action (subject only, with respect
to the Merger, to approval of this Agreement by each of their
stockholders as provided for in Section 5.3). On or prior to the date
hereof, the Board of Directors of EVI or duly authorized committee
thereof has determined to recommend approval of the Merger to the
stockholders of EVI, and such determination is in effect on the date
hereof. This Agreement has been duly executed and delivered by EVI and
Sub and is the valid and binding obligation of EVI and Sub, enforceable
against EVI and Sub in accordance with its terms.
(d) No Approvals or Notices Required; No Conflict . Neither
the execution and delivery of this Agreement nor the performance by EVI
or Sub of its obligations hereunder, nor the consummation of the
transactions contemplated hereby by EVI and Sub, will (i) conflict with
the EVI Certificate or the bylaws of EVI or Sub; (ii) assuming
satisfaction of the requirements set forth in clause (iii) below,
violate any provision of law applicable to EVI or any of the EVI
Subsidiaries; (iii) except for (A) requirements of Federal or state
securities laws, (B) requirements arising out of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (the "HSR Act"), (C) requirements of
notice filings in such foreign jurisdictions as may be applicable, and
(D) the filing of a Certificate of Merger by Sub in accordance with the
WGCL, require any consent or approval of, or filing with or notice to,
any public body or authority, domestic or foreign, under any provision
of law applicable to EVI or any of the EVI Subsidiaries; or (iv) require
any consent, approval or notice under, or violate, breach, be in
conflict with or constitute a default (or an event that, with notice or
lapse of time or both, would constitute a default) under, or permit the
termination of any provision of, or result in the creation or imposition
of any lien, mortgage, pledge, security interest, restriction on
transfer, option, charge, right of any third Person or any other
encumbrance of any nature (a "Lien") upon any properties, assets or
business of EVI or any of the EVI Subsidiaries under, any note, bond,
indenture, mortgage, deed of trust, lease, franchise, permit,
authorization, license, contract, instrument or other agreement or
commitment or any order, judgment or decree to which EVI or any of the
EVI Subsidiaries is a party or by which EVI or any of the EVI
Subsidiaries or any of its or their assets or properties is bound or
encumbered, except (A) those that have already been given, obtained or
filed and (B) those that, in the aggregate, would not have an EVI MAE.
(e) Commission Filings; Financial Statements. EVI has filed
all reports and documents required to filed with the Securities and
Exchange Commission (the "Commission") since December 31, 1994. All
reports, registration statements and other filings (including all notes,
exhibits and schedules thereto and documents incorporated by reference
therein) filed by EVI with the Commission since December 31, 1994,
through the date of this Agreement, together with any amendments
thereto, are sometimes collectively referred to as the "EVI Commission
Filings". EVI has heretofore delivered to, or made accessible to,
Christiana copies of the EVI Commission Filings. As of the respective
dates of their filing with the Commission, the EVI Commission
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Filings complied in all material respects with the applicable
requirements of the Securities Act of 1934 (the "Securities Act"), the
Securities Exchange Act of 1934 (the "Exchange Act") and the rules and
regulations of the Commission thereunder, and did not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not
misleading.
(f) Absence of Certain Charges and Events. Since December 31,
1996, except as contemplated by this Agreement or as disclosed in the
EVI Commission Filings filed with the Commission prior to the date
hereof, there has been no EVI MAE.
(g) Tax Matters.
(i) Except as set forth in Section 2.1(g) of the
disclosure letter delivered by EVI to Christiana on the date
hereof (the "EVI Disclosure Letter"), all returns and reports,
including, without limitation, information and withholding
returns and reports ("Tax Returns"), of or relating to any
foreign, federal, state or local tax, assessment or other
governmental charge ("Taxes" or a "Tax") that are required to be
filed on or before the Closing Date by or with respect to EVI or
any of the EVI Subsidiaries, or any other corporation that is or
was a member of an affiliated group (within the meaning of
Section 1504(a) of the Code) of corporations of which EVI was a
member for any period ending on or prior to the Closing Date,
have been or will be duly and timely filed, and all Taxes,
including interest and penalties, due and payable pursuant to
such Tax Returns have been paid or, except as set forth in
Section 2.1(g) of the EVI Disclosure Letter, adequately provided
for in reserves established by EVI, except where the failure to
file, pay or provide for would not have a EVI MAE.
(ii) EVI has no present plan or intention after the
Merger to (A) liquidate the Surviving Corporation, (B) merge the
Surviving Corporation with or into another corporation, (C) sell
or otherwise dispose of the stock of the Surviving Corporation,
(D) cause or permit the Surviving Corporation to sell or
otherwise dispose of any of the assets of Christiana or the
assets of Sub vested in the Surviving Corporation except for
dispositions made in the ordinary course of business or transfers
of assets to a corporation controlled by the Surviving
Corporation within the meaning of Section 368(a)(2)(C) of the
Code, or (E) reacquire any of the stock issued to the Christiana
stockholders pursuant to the Merger.
(iii) EVI is not an investment company as defined in
Section 368(a)(2)(F)(iii) and (iv) of the Code or as defined in
the Investment Company Act of 1940 and the rules and regulations
promulgated thereunder.
(h) Voting Requirements. The affirmative vote of the holders
of a majority of the shares of EVI Common Stock present at the special
stockholders' meeting and entitled to vote is the only vote of the
holders and any class or series of the capital stock of EVI necessary to
approve this Agreement and the Merger.
(i) Brokers. Except for fees and expenses payable by EVI to
Morgan Stanley & Co. Incorporated, no broker, investment banker, or
other Person acting on behalf of EVI is or will be entitled to any
broker's, finder's or other similar fee or commission in connection with
the transactions contemplated by this Agreement.
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<PAGE> 15
(j) Information Supplied. None of the information supplied or
to be supplied by EVI for inclusion or incorporation by reference in (i)
the Registration Statement (as defined in Section 5.1) will, at the time
the Registration Statement is filed with the Commission, and at any time
it is amended or supplemented or at the time it becomes effective under
the Securities Act, 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 therein not misleading, and (ii) the
Proxy Statement will, at the date the Proxy Statement is first mailed to
EVI's stockholders and at the time of the EVI Stockholders Meeting,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they are made, not misleading. The Proxy Statement will comply as to
form in all material respects with the requirements of the Exchange Act
and the rules and regulations thereunder. For purposes of this
Agreement, the parties agree that the statements made and information in
the Registration Statement and the Proxy Statement relating to the
Federal income tax consequences of the transactions contemplated hereby
shall be deemed to be supplied by Christiana and not by EVI or Sub.
2.2 REPRESENTATIONS AND WARRANTIES OF CHRISTIANA AND C2. Each of
Christiana and C2 hereby, jointly and severally, represents and warrants to EVI
that:
(a) Organization. Each of Christiana and C2 is a corporation
duly organized, validly existing and in good standing under the laws of
the state of Wisconsin. Logistic is a limited liability company duly
organized, validly existing and in good standing under the laws of the
state of Delaware. Each of Christiana, C2 and Logistic has all
requisite corporate (or equivalent) power and corporate (or equivalent)
authority and all necessary governmental authorizations to own, lease
and operate all of its properties and assets and to carry on its
business as now being conducted, except where the failure to be so
organized, existing or in good standing or to have such governmental
authority would not (i) have a material adverse effect on the financial
condition of Christiana or Logistic after giving effect to the Logistic
Sale or (ii) prevent or adversely affect the ability of Christiana and
C2 to perform and comply with their respective obligations under this
Agreement, the Logistic Purchase Agreement or any other agreement to be
executed and delivered in connection with the transactions contemplated
hereby or thereby (a "Christiana MAE"). Except as set forth in Section
2.2(a) of the disclosure letter delivered by Christiana to EVI on the
date hereof (the "Christiana Disclosure Letter"), each of Christiana,
Logistic and C2 is duly qualified as a foreign corporation or limited
liability company to do business, and is in good standing, in each
jurisdiction in which the property owned, leased or operated by it or
the nature of the business conducted by it makes such qualification
necessary, except in such jurisdictions where the failure to be duly
qualified does not and would not have a Christiana MAE. Each of
Christiana, Logistic and C2 is in compliance with all applicable laws,
judgments, orders, rules and regulations, domestic and foreign, except
where failure to be in such compliance would not have a Christiana MAE.
Christiana has heretofore delivered to EVI true and complete copies of
(i) Christiana's Certificate of Incorporation (the "Christiana
Certificate") and bylaws, (ii) Logistic's Certificate of Organization
and operating agreement and (iii) C2's Articles of Incorporation and
operating agreement, in each case as in existence on the date hereof.
(b) Capitalization.
(i) The authorized capital stock of Christiana consists
of 12,000,000 shares of Christiana Common Stock, $1.00 par value,
and 1,000,000 shares of
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<PAGE> 16
preferred stock, $10.00 par value ("Christiana Preferred Stock").
As of December 12, 1997, there were 5,136,630 shares of
Christiana Common Stock issued and outstanding and no shares of
Christiana Common Stock were held as treasury shares. There are
no outstanding shares of Christiana Preferred Stock. A total of
500,000 shares of Christiana Common Stock have been reserved for
issuance pursuant to the stock option plan described in Section
2.2(b)(iii). All issued and outstanding shares of Christiana
Common Stock are validly issued, fully paid and nonassessable
(except as set forth in Wis Stats Section 180.0622) and no holder
thereof is entitled to preemptive rights. Christiana is not a
party to, and is not aware of, any voting agreement, voting trust
or similar agreement or arrangement relating to any class or
series of its capital stock, or any agreement or arrangement
providing for registration rights with respect to any capital
stock or other securities of Christiana.
(ii) Christiana owns 100% of the membership interests in
Logistic. All issued and outstanding membership interests of
Logistic are validly issued, fully paid and nonassessable and no
holder thereof is entitled to preemptive rights. Logistic is not
a party to, any voting agreement, voting trust or similar
agreement or arrangement relating to its membership interests, or
any agreement or arrangement providing for registration rights
with respect to any membership interests or other interests of
Logistic.
(iii) As of the date hereof, there are outstanding
options (the "Christiana Options") to purchase an aggregate of
267,083 shares of Christiana Common Stock under the 1995 Stock
Option Plan (the "Christiana Option Plan"). All Christiana
Options shall be terminated or exercised prior to the Effective
Time. As of the Effective Time, there will be no options
outstanding under the Christiana Option Plan. There are not now
(other than as set forth in this Section 2.2(b)), and at the
Effective Time there will not be, any (A) shares of capital stock
or other equity securities of Christiana outstanding other than
Christiana Common Stock issued pursuant to the exercise of
Christiana Options or (B) outstanding options, warrants, scrip,
rights to subscribe for, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into
or exchangeable for, shares of any class of capital stock of
Christiana, or contracts, understandings or arrangements to which
Christiana is a party, or by which it is or may be bound, to
issue additional shares of its capital stock or options,
warrants, scrip or rights to subscribe for, or securities or
rights convertible into or exchangeable for, any additional
shares of its capital stock.
(iv) Section 2.2(b)(iv) of the Christiana Disclosure
Letter sets forth a list of all corporations, partnerships,
limited liability companies and other entities of which
Christiana owns directly or indirectly, an equity interest (such
entities, excluding EVI and its subsidiaries, referred to herein
as the "Christiana Subsidiaries").
(c) Authorization and Validity of Agreement. Each of
Christiana and C2 has all requisite corporate power and authority to
enter into this Agreement, the Logistic Purchase Agreement and the other
agreements and instruments contemplated to be executed and delivered in
connection with the Merger and the Logistic Sale (the Logistic Purchase
Agreement and such other agreements and instruments contemplated to be
executed and delivered in connection with the Merger and the Logistic
Sale being referred to as the "Other Agreements") and to perform its
obligations hereunder and
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<PAGE> 17
thereunder. The execution and delivery by Christiana and C2 of this
Agreement and the Other Agreements to which it is a party and the
consummation by it of the transactions contemplated hereby and thereby
have been duly authorized by all necessary corporate action (subject
only, with respect to the Merger and the Logistic Sale, to approval of
this Agreement and the Logistic Sale by the Christiana stockholders as
provided for in Section 5.3). On or prior to the date hereof the Board
of Directors of Christiana has determined to recommend approval of the
Merger and the Logistic Sale to the stockholders of Christiana, and such
determination is in effect as of the date hereof. This Agreement has
been duly executed and delivered by Christiana and C2 and is the valid
and binding obligation of Christiana and C2 enforceable against it in
accordance with its terms. The Other Agreements, when executed and
delivered by Christiana and C2, as applicable, will constitute valid and
binding obligations of Christiana and C2, enforceable against them in
accordance with their respective terms.
(d) No Approvals or Notices Required; No Conflict with
Instruments to which Christiana is a Party. The execution and delivery
of this Agreement and the Other Agreements do not, and the consummation
of the transactions contemplated hereby and thereby and compliance with
the provisions hereof and thereof will not, conflict with, or result in
any violation of, or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, cancellation or
acceleration of or "put" right with respect to any obligation or to loss
of a material benefit under, or result in the creation of any Lien upon
any of the properties or assets of Christiana, Logistic, C2 or any of
their subsidiaries under, any provision of (i) the Christiana
Certificate or bylaws of Christiana, the Certificate of Organization or
operating agreement of Logistic or the Articles of Incorporation or
bylaws of C2, or any provision of the comparable organizational
documents of its subsidiaries, (ii) except as set forth in Section
2.2(d) of the Christiana Disclosure Letter, any loan or credit
agreement, note, bond, mortgage, indenture, lease, guaranty or other
financial assurance agreement or other agreement, instrument, permit,
concession, franchise or license applicable to Christiana or its
properties or assets, (iii) except as set forth in Section 2.2(d) of the
Christiana Disclosure Letter, any loan or credit agreement, note, bond,
mortgage, indenture, lease, guaranty or other financial assurance
agreement or other agreement, instrument, permit, concession, franchise
or license applicable to Logistic or any other Christiana Subsidiary, or
their respective properties or assets and (iv) subject to governmental
filing and other matters referred to in the following sentence, any
judgment, order, decree, statute, law, ordinance, rule or regulation or
arbitration award applicable to Christiana, Logistic or C2 or any of
their subsidiaries or their respective properties or assets, other than,
in the case of clauses (ii) and (iii), any such conflicts, violations,
defaults, rights or Liens that individually or in the aggregate would
not have a Christiana MAE. No consent, approval, order or authorization
of, or registration, declaration or filing with, any court,
administrative agency or commission or other governmental authority or
agency, domestic or foreign, including local authorities (a
"Governmental Entity"), is required by or with respect to Christiana,
Logistic or C2 or any of their subsidiaries in connection with the
execution and delivery of this Agreement by Christiana and C2 or the
consummation by Christiana of the transactions contemplated hereby,
except for (i) the filing of a pre-merger notification and report form
by Christiana under the HSR Act, (ii) the filing with the Commission of
(A) a proxy or information statement relating to Stockholder Approval
(such proxy or information statement as amended or supplemented from
time to time, the "Proxy Statement"), and (B) such reports under Section
13(a) of the Exchange Act as may be required in connection with this
Agreement and the transactions contemplated hereby, (iii) the filing of
the Certificate of Merger with the Wisconsin Secretary of State with
respect to the Merger as provided in the WGCL and appropriate documents
with the
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<PAGE> 18
relevant authorities of other states in which Christiana is qualified to
do business and (iv) such other consents, approvals, orders,
authorizations, registrations, declarations, filings and notices as are
set forth in Section 2.2(d) of the Christiana Disclosure Letter.
(e) Commission Filings; Financial Statements. Christiana has
filed all reports, registration statements and other filings, together
with any amendments required to be made with respect thereto, that it
has been required to file with the Commission. All reports,
registration statements and other filings (including all notes, exhibits
and schedules thereto and documents incorporated by reference therein)
filed by Christiana with the Commission since December 31, 1994, through
the date of this Agreement, together with any amendments thereto, are
sometimes collectively referred to as the "Christiana Commission
Filings." Christiana has heretofore delivered to EVI copies of the
Christiana Commission Filings. As of the respective dates of their
filing with the Commission, the Christiana Commission Filings complied
in all material respects with the Securities Act, the Exchange Act and
the rules and regulations of the Commission thereunder, and did not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they
were made, not misleading. To the best knowledge of Christiana, all
material contracts of Christiana and its subsidiaries have been included
in the Christiana's filings with the Commission since the initial
registration of its stock under the Exchange Act, except for those
contracts not required to be filed pursuant to the rules and regulations
of the Commission.
Each of the consolidated financial statements (including any
related notes or schedules) included in the Christiana Commission
Filings was prepared in accordance with generally accepted accounting
principles applied on a consistent basis (except as may be noted therein
or in the notes or schedules thereto) and complied with the rules and
regulations of the Commission. Such consolidated financial statements
fairly present the consolidated financial position of Christiana as of
the dates thereof and the results of operations, cash flows and changes
in stockholders' equity for the periods then ended (subject, in the case
of the unaudited interim financial statements, to normal year-end audit
adjustments on a basis comparable with past periods). As of the date
hereof, Christiana has no liabilities, absolute or contingent, that may
reasonably be expected to have a Christiana MAE, that are not reflected
in the Christiana Commission Filings, except (i) those incurred in the
ordinary course of business consistent with past operations and not
relating to the borrowing of money and (ii) those set forth in Section
2.2(e) of the Christiana Disclosure Letter.
(f) Conduct of Business in the Ordinary Course; Absence of
Certain Changes and Events. Since December 31, 1995, except as
contemplated by this Agreement, the Logistic Purchase Agreement or as
disclosed in the Christiana Commission Filings or set forth in Section
2.2(f) of the Christiana Disclosure Letter, Christiana and its
subsidiaries have conducted their respective businesses only in the
ordinary and usual course in accordance with past practice, and there
has not been: (i) a Christiana MAE or any other material adverse change
in the financial condition, results of operations, assets or business of
Christiana, taken as a whole; (ii) to the knowledge of Christiana, any
other condition, event or development that reasonably may be expected to
result in any such material adverse change or a Christiana MAE; (iii)
any change by Christiana or Logistic in its accounting methods,
principles or practices; (iv) any revaluation by Christiana or Logistic
of any of its assets, including, without limitation, writing down the
value of inventory or writing off notes or accounts receivable other
than in the ordinary course of business and consistent with past
practice; (v) any entry
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by Christiana or Logistic into any commitment or transaction that would
be material to Christiana or Logistic; (vi) any declaration, setting
aside or payment of any dividends or distributions in respect of the
Christiana Common Stock or any redemption, purchase or other acquisition
of any of its securities; (vii) any damage, destruction or loss
(whether or not covered by insurance) adversely affecting the properties
or business of Christiana or Logistic; (viii) any increase in
indebtedness of borrowed money other than borrowing under existing
credit facilities as disclosed in Section 2.2(f) of the Christiana
Disclosure Letter; (ix) any granting of a security interest or Lien on
any property or assets of Christiana or Logistic, other than (A) Liens
for taxes not due and payable and (B) inchoate mechanics',
warehousemen's and other statutory Liens incurred in the ordinary course
of business (collectively, "Permitted Liens"); or (x) any increase in or
establishment of any bonus, insurance, severance, deferred compensation,
pension, retirement, profit sharing, stock option (including, without
limitation, the granting of stock options, stock appreciation rights,
performance awards or restricted stock awards), stock purchase or other
employee benefit plan or any other increase in the compensation payable
or to become payable to any directors, officers or key employees of
Christiana or Logistic or which Christiana or Logistic would be
responsible.
(g) Litigation. Except as disclosed in the Christiana
Commission Filings or as set forth in Section 2.2(g) of the Christiana
Disclosure Letter, there are no claims, actions, suits, investigations,
inquiries or proceedings, ("Demands"), pending or, to the knowledge of
Christiana, threatened against or affecting (i) Christiana or Logistic
or any of their respective properties at law or in equity, or any of
their employee benefit plans or fiduciaries of such plans, or (ii) C2 or
any Christiana or C2 subsidiaries or any of their respective properties
at law or in equity, or any of their respective employee benefit plans
or fiduciaries of such plans, before or by any federal, state, municipal
or other governmental agency or authority, or before any arbitration
board or panel (each a "Governmental Entity"), wherever located (i) that
exist today or (ii) that would otherwise, if adversely determined, have
a Christiana MAE. None of Christiana, Logistic or C2 is subject to any
judicial, governmental or administrative order, writ, judgment,
injunction or decree.
(h) Employee Benefit Plans.
(i) Section 2.2(h) of the Christiana Disclosure Letter
provides a description of each of the following which is
sponsored, maintained or contributed to by Christiana or any
corporation, trade, business or entity under common control with
Christiana within the meaning of Section 414(b),(c),(m) or (o) of
the Code or Section 4001 of ERISA (a "Christiana ERISA
Affiliate") for the benefit of its employees, or has been so
sponsored, maintained or contributed to within three years prior
to the Closing Date.
(A) each "employee benefit plan," as such term
is defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"),
("Plan"); and
(B) each stock option plan, collective
bargaining agreement, bonus plan or arrangement, incentive
award plan or arrangement, vacation policy, severance pay
plan, policy or agreement, deferred compensation agreement
or arrangement, executive compensation or supplemental
income arrangement, consulting agreement, employment
agreement and each other employee benefit plan, agreement,
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arrangement, program, practice or understanding that is
not described in Section 2.2(h)(i)(A) to which Christiana
or Logistic is a party or has any obligation ("Benefit
Program or Agreement").
True and complete copies of each of the Plans, Benefit Programs
or Agreements, related trusts, if applicable, and all amendments
thereto, together with (i) the Forms 5500, 990 and 1041, as
applicable, for the three most recent fiscal years, (ii) all
current summary plan descriptions for each such Plan, (iii) the
most recent Internal Revenue Service determination letters for
each such Plan, as applicable, and all correspondence with the
Internal Revenue Service and the Department of Labor relating to
such Plans, Benefit Programs and Agreements have been furnished
to EVI.
(ii) Except as otherwise set forth in Section 2.2(h) of
the Christiana Disclosure Letter,
(A) None of Christiana or any Christiana ERISA
Affiliate contributes to or has an obligation to
contribute to, or has at any time contributed to or had an
obligation to contribute to, a plan subject to Title IV of
ERISA, including, without limitation, a multi employer
plan within the meaning of Section 3(37) of ERISA, nor
have such companies engaged in any transaction described
in Sections 406 and 407 of ERISA (unless exempt under
Section 408) or Section 4975 of the Code (unless exempt);
(B) Each Plan and each Benefit Program or
Agreement has been administered, maintained and operated
in all material respects in accordance with the terms
thereof and in compliance with its governing documents and
applicable law (including, where applicable, ERISA and the
Code and timely filing of Form 5500's for each year);
(C) There is no matter pending with respect to
any of the Plans before any governmental agency, and there
are no actions, suits or claims pending (other than
routine claims for benefits) or, to the knowledge of
Christiana or C2, threatened against, or with respect to,
any of the Plans or Benefit Programs or Agreements or its
assets;
(D) No act, omission or transaction has occurred
which would result in imposition on Christiana or any
Christiana ERISA Affiliate of breach of fiduciary duty
liability damages under Section 409 of ERISA, a civil
penalty assessed pursuant to subsections (c), (i) or (l)
of Section 502 of ERISA or a tax imposed pursuant to
Chapter 43 of Subtitle D of the Code; and
(E) Except as provided in Section 5.7, the
execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will
not require Christiana or any Christiana ERISA Affiliate
to make a larger contribution to, or pay greater benefits
under, any Plan, Benefit Program or Agreement than it
otherwise would or create or give rise to any additional
vested rights or service credits under any Plan or Benefit
Program or Agreement or cause the companies to make
accelerated payments.
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<PAGE> 21
(iii) Except as set forth in Section 2.2(h) of the
Christiana Disclosure Letter, termination of employment of any
employee of Christiana immediately after consummation of the
transactions contemplated by this Agreement would not result in
payments under the Plans, Benefit Programs or Agreements which,
in the aggregate, would result in imposition of the sanctions
imposed under Sections 280G and 4999 of the Code.
(iv) Each Plan may be unilaterally amended or terminated
in its entirety without liability except as to benefits accrued
thereunder prior to such amendment or termination.
(v) Except as set forth in Section 2.2(h) of the
Christiana Disclosure Letter, none of the employees of Christiana
or Logistic are subject to union or collective bargaining
agreements.
(vi) None of Christiana or any of the Christiana ERISA
Affiliates has agreed or is obligated to provide retiree medical
coverage and each of such companies has fully complied with all
obligations under COBRA applicable to it.
(i) Taxes.
(i) Except as set forth in Section 2.2(i) of the
Christiana Disclosure Letter, all Tax Returns of or relating to
any Tax that are required to be filed on or before the Closing
Date by or with respect to Christiana or any Christiana
Subsidiary, or any other corporation that is or was a member of
an affiliated group (within the meaning of Section 1504(a) of the
Code) of corporations of which Christiana was a member for any
period ending on or prior to the Closing Date, have been or will
be duly and timely filed, and all Taxes, including interest and
penalties, due and payable pursuant to such Tax Returns have been
or will be duly and timely paid or adequately provided for in
reserves established by Christiana or any such Christiana
Subsidiary, except where the failure to file, pay or provide for
would not have a material adverse effect on the financial
condition, results of operations, or business of Christiana or
otherwise result in a Christiana MAE. All income Tax returns of
or with respect to Christiana or any Christiana Subsidiary have
been audited by the applicable Governmental Authority, or the
applicable statute of limitations has expired, for all periods up
to and including the tax year ended June 30, 1993. There is no
material claim against Christiana or any Christiana Subsidiary
with respect to any Taxes, and no material assessment, deficiency
or adjustment has been asserted or proposed with respect to any
Tax Return of or with respect to Christiana or any Christiana
Subsidiary that has not been adequately provided for in reserves
established by Christiana or such Christiana Subsidiary. The
total amounts set up as liabilities for current and deferred
Taxes in the consolidated financial statements included in the
Christiana Commission Filings have been prepared in accordance
with generally accepted accounting principles and are sufficient
to cover the payment of all material Taxes, including any
penalties or interest thereon and whether or not assessed or
disputed, that are, or are hereafter found to be, or to have
been, due with respect to the operations of Christiana or any
Christiana Subsidiary through the periods covered thereby.
Christiana has (and as of the Closing Date will have) made
estimated tax payments for taxable years for which the United
States consolidated federal income Tax return is not yet due
required with respect to Taxes. Except as set forth in
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Section 2.2(i) of the Christiana Disclosure Letter, no waiver or
extension of any statute of limitations as to any federal, state,
local or foreign Tax matter has been given by or requested from
Christiana or any Christiana Subsidiary. Except for statutory
Liens for current Taxes not yet due, no Liens for Taxes exist
upon the assets of Christiana. Except as set forth in paragraph
2.2(i) of the Christiana Disclosure Letter, none of Christiana or
any Christiana Subsidiary has filed consolidated income Tax
Returns with any corporation, other than consolidated federal,
state or foreign income Tax returns by Christiana for any taxable
period which is not now closed by the applicable statute of
limitations. Except as set forth in Section 2.2(i) of the
Christiana Disclosure Letter, none of Christiana or any
Christiana Subsidiary has any deferred intercompany gain as
defined in Treasury Regulations Section 1.1502-13.
(ii) As of the Closing Date, to Christiana's knowledge,
there is no plan or intention by the stockholders of Christiana
to sell, exchange or otherwise dispose of a number of shares of
EVI received in the Merger that would reduce the Christiana
stockholders' ownership of EVI shares to a number of shares
having a value, as of the date of the Merger, of less than 50% of
the value of all of the formerly outstanding Christiana Shares as
of the same date. The shares of EVI Common Stock held by the
Christiana stockholders and otherwise sold, redeemed or disposed
of prior or subsequent to the Merger will be considered in making
this representation.
(iii) Christiana is not under the jurisdiction of a court
in a Title 11 or similar case with the meaning of Section
368(a)(3)(A) of the Code.
(iv) There is no intercorporate indebtedness existing
between Christiana and EVI that was issued, acquired or will be
settled at a discount.
(v) As of the Closing Date, Christiana shall have fully
accrued for all Taxes that may be required to be paid as a result
of the Logistic Sale and the other transactions contemplated
hereby. The value of the interest in Logistic Common Stock to be
sold pursuant to the Logistic Sale has been determined pursuant
to an outside appraisal and reflects an amount equal to or
greater than the fair value and fair market value of such shares.
(j) Environmental Matters. Except as set forth in Section
2.2(j) of the Christiana Disclosure Letter, (i) the properties,
operations and activities of Christiana and each of its Subsidiaries
complies in all material respects with all applicable Environmental
Laws; (ii) none of Christiana or any of its Christiana Subsidiaries is
subject to any existing, pending or, to the knowledge of Christiana,
threatened action, suit, investigation, inquiry or proceeding by or
before any governmental authority under any Environmental Law; (iii)
except where the failure would have a Christiana MAE, all notices,
permits, licenses, or similar authorizations, if any, required to be
obtained or filed by Christiana under any Environmental Law in
connection with any aspect of the business of Christiana, Logistic or
any Christiana Subsidiary, including without limitation those relating
to the treatment, storage, disposal or release of a hazardous substance
or solid waste, have been duly obtained or filed and will remain valid
and in effect after the Merger and the Logistic Sale, and each of
Christiana, Logistic and each other Christiana Subsidiary is in
compliance with the terms and conditions of all such notices, permits,
licenses and similar authorizations; (iv) Christiana and each of its
Subsidiaries has satisfied and are currently in compliance
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with all financial responsibility requirements applicable to their
operations and imposed by any governmental authority under any other
Environmental Law, and none of such parties has received any notice of
noncompliance with any such requirements; (v) to Christiana's knowledge,
there are no physical or environmental conditions existing on any
property currently owned or previously owned by Christiana or any entity
in which it has or had ownership interest that could reasonably be
expected to give rise to any on-site or off-site remedial obligations
under any Environmental Laws; and (vi) to Christiana's knowledge, since
the effective date of the relevant requirements of applicable
Environmental Laws, all hazardous substances or solid wastes generated
by Christiana or used in connection with their properties or operations
have been transported only by carriers authorized under Environmental
Laws to transport such substances and wastes, and disposed of only at
treatment, storage, and disposal facilities authorized under
environmental laws to treat, store or dispose of such substances and
wastes, and, to the knowledge of Christiana, such carriers and
facilities have been and are operating in compliance with such
authorizations and are not the subject of any existing, pending, or
overtly threatened action, investigation, or inquiry by any governmental
authority in connection with any Environmental Laws.
For purposes of this Agreement, the term "Environmental Laws"
shall mean any and all laws, statutes, ordinances, rules, regulations,
orders or determinations of any Governmental Authority pertaining to
health or the environment currently in effect in any and all
jurisdictions in which the party in question and its subsidiaries own
property or conduct business, including without limitation, the Clean
Air Act, as amended, the Comprehensive Environmental, Response,
Compensation, and Liability Act of 1980 ("CERCLA"), as amended, the
Federal Water Pollution Control Act, as amended, the Occupational Safety
and Health Act of 1970, as amended, the Resource Conservation and
Recovery Act of 1976 ("RCRA"), as amended, the Safe Drinking Water Act,
as amended, the Toxic Substances Control Act, as amended, the Hazardous
& Solid Waste Amendments Act of 1984, as amended, the Superfund
Amendments and Reauthorization Act of 1986, as amended, the Hazardous
Materials Transportation Act, as amended, the Oil Pollution Act of 1990
("OPA"), any state laws pertaining to the handling of oil and gas
exploration and production wastes or the use, maintenance, and closure
of pits and impoundments, and all other environmental conservation or
protection laws. For purposes of this Agreement, the terms "hazardous
substance" and "release" have the meanings specified in RCRA; provided,
however, that to the extent the laws of the state in which the property
is located establish a meaning for "hazardous substance," "release,"
"solid waste" or "disposal" that is broader than that specified in
either CERCLA or RCRA, such broader meaning shall apply. For purposes
of this Agreement, the term "Governmental Authority" includes the United
States, any foreign jurisdiction, the state, county, city, and political
subdivisions in which the party in question owns property or conducts
business, and any agency, department, commission, board, bureau or
instrumentality of any of them.
(k) Investment Company. Christiana is not an investment
company as defined in the Investment Company Act of 1940 and the rules
and regulations promulgated thereunder.
(l) Severance Payments. Except as set forth in Section 2.2(l)
of the Christiana Disclosure Letter, Christiana will not have any
liability or obligation to pay a severance payment or similar obligation
to any of their respective employees, officers, or directors as a result
of the Merger or the transactions contemplated by this Agreement, nor
will any of such Persons be entitled to an increase in severance
payments or other benefits as a result of the Merger, the Logistic Sale
or the
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transactions contemplated by this Agreement or the Other Agreements in
the event of the subsequent termination of their employment.
(m) Voting Requirements. Subject to the provisions of Section
5.3(a), the affirmative vote of the holders of a majority of the
outstanding shares of Christiana Common Stock is the only vote of the
holders of any class or series of the capital stock of Christiana
necessary to approve this Agreement, the Merger, the Logistic Sale and
the transactions contemplated hereby and by the Other Agreements in
order to comply with the WGCL, Christiana's Certificate of Incorporation
and Bylaws and the rules and regulations of the New York Stock Exchange
(the "NYSE").
(n) Brokers. Except for Prudential Securities Incorporated,
whose fees shall be paid by Christiana, no broker, investment banker, or
other Person acting on behalf of Christiana is or will be entitled to
any broker's, finder's or other similar fee or commission in connection
with the transactions contemplated by this Agreement.
(o) Assets and Liabilities at Closing. At the Effective Time:
(i) the assets of Christiana (the "Christiana Assets")
shall consist of (1) 3,897,462 shares of EVI Common Stock, which
shall be held free and clear of all Liens, (2) cash in the amount
of $20,000,000 received in connection with the TLC Dividend as
defined in Section 3.1(s), (3) the right to receive $10,666,667
in connection with the Logistic Sale (4) $3,000,000 to be
received in connection with the Wiscold Note, (5) the cash
received from the exercise of stock options, (6) all other cash
on hand, (7) a one-third interest in Logistic, and (8) all tax,
financial, accounting and other general corporate records,
including records relating to all past operations and
subsidiaries (including partnerships and joint ventures);
(ii) the liabilities of Christiana (the "Christiana
Liabilities") shall consist only of (1) transactional expenses
related to the Merger and the Logistic Sale, (2) all Taxes of
Christiana relating to periods through the Closing Date,
including Taxes (other than the EVI Related Taxes) from the
Logistic Sale and deferred intercompany Taxes and (3) all other
outstanding and accrued liabilities to which Christiana may be
subject, other than Assumed Liabilities (as defined in the
Logistic Purchase Agreement) and EVI Related Taxes;
(iii) all obligations and liabilities (fixed or
contingent, known or unknown) of Christiana shall have been
assumed by C2 and Logistic other than liabilities described in
clause (ii); and
(iv) except as set forth in Section 2.2(o) of the
Disclosure Schedule or agreed to in writing by EVI prior to the
Closing, Christiana shall have been released from all continuing
obligations (i) relating to Logistic or any other historical
business of Christiana or its subsidiaries and affiliates and
(ii) under any and all agreements relating to the borrowing of
funds, including any and all guarantees or similar arrangements
relating thereto.
(p) Compliance with Laws. Christiana, Logistic, C2 and each
of their respective subsidiaries hold all required, necessary or
applicable permits, licenses, variances, exemptions, orders, franchises
and approvals of all Governmental Entities, except where the failure to
so hold could not reasonably be expected to have a Christiana MAE (the
"Christiana Permits"). All applications with respect to such
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<PAGE> 25
permits, licenses, variances, exemptions, orders, franchises and
approvals were complete and correct in all material respects when made
and neither Christiana nor C2 know of any reason why any of such
permits, licenses, variances, exemptions, orders, franchises and
approvals would be subject to cancellation. Christiana, Logistic, C2
and each of their respective subsidiaries are in compliance with the
terms of the Christiana Permits except where the failure to so comply
could not reasonably be expected to have a Christiana MAE. None of
Christiana, Logistic, C2 or any of their respective subsidiaries has
violated or failed to comply with any statute, law, ordinance,
regulation, rule, permit or order of any Federal, state or local
government, domestic or foreign, or any Governmental Entity, any
arbitration award or any judgment, decree or order of any court or other
Governmental Entity, applicable to Christiana, Logistic, C2 or any of
their respective subsidiaries or their respective business, assets or
operations, except for violations and failures to comply that would not
have a Christiana MAE.
(q) Contracts.
(i) Section 2.2(q) to the Christiana Disclosure Letter
contains a complete list of the following contracts, agreements,
arrangements and commitments: (i) all employment or consulting
contracts or agreements to which Christiana or Logistic is
contractually obligated; (ii) current leases, sales contracts and
other agreements with respect to any property, real or personal,
of Christiana or Logistic or to which Christiana or Logistic is
contractually obligated; (iii) contracts or commitments for
capital expenditures or acquisitions in excess of $30,000 to
which Christiana or Logistic is obligated; (iv) agreements,
contracts, indentures or other instruments relating to the
borrowing of money, or the guarantee of any obligation for the
borrowing of money, to which Christiana or Logistic or any of
their subsidiaries is a party or any of their respective
properties is bound; (v) contracts or agreements or amendments
thereto that would be required to be filed as an exhibit to an
Annual Report on Form 10-K filed by Christiana as of the date
hereof that has not been filed as an exhibit to the Christiana's
Annual Report on Form 10-K for the year ended June 30, 1997,
filed by it with the Commission or any report filed with the
Commission under the Exchange Act since such date; (vi) all
corporations, partnerships, limited liability companies and other
entities which Christiana has owed, directly or indirectly, an
equity interest since 1953, (vii) all material indemnification
and guaranty or other similar obligations to which Christiana or
Logistic is bound and which the officers of Christiana, after
reasonable investigation, are aware, (viii) any outstanding
bonds, letters of credit posted or guaranteed by Christiana or
Logistic with respect to any Person, (ix) any covenants not to
compete or other obligations affecting Christiana or Logistic
that would restrict the Surviving Corporation or EVI and its
affiliates from engaging in any business or activity which the
officers of Christiana or Logistic are aware, after reasonable
investigation and (x) contracts, agreements, arrangements or
commitments, other than the foregoing that could reasonably be
considered to be material to Christiana or Logistic.
(ii) True and correct copies of all the instruments
described in Section 2.2(q) of the Christiana Disclosure Letter
have been furnished or made a available to EVI. Except as noted
in the Christiana Disclosure Letter, all such agreements,
arrangements or commitments are valid and subsisting and each of
Christiana, Logistic and their respective subsidiaries to the
extent each is a party, has duly performed its obligations
thereunder in all material respects to
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the extent such obligations have accrued, and no breach or
default thereunder by Christiana, Logistic or their respective
subsidiaries or, to the knowledge of Christiana, any other party
thereto has occurred that could impair the ability of Christiana,
Logistic or their respective subsidiaries to enforce any material
rights thereunder. There are no material liabilities of any of
the parties to any of the contracts between Christiana, Logistic
or C2 or any of their respective subsidiaries and third parties
arising from any breach of or default in any provision thereof or
which would permit the acceleration of any obligation of any
party thereto or the creation of a Lien upon any asset of
Christiana, Logistic or any of their respective subsidiaries.
(r) Title to Property.
(i) At the Effective Time, Christiana will have good
and marketable title to, or valid leasehold interests in, all its
properties and assets. Christiana has good and valid title to
3,897,462 shares of EVI Common Stock, free and clear of all
Liens. Christiana has good and valid title to 1000 units of
Logistic, free and clear of all Liens, which units represents all
of the interest in Logistics.
(ii) Except as set forth in Section 2.2(r)(ii) of the
Christiana Disclosure Letter, each of Christiana and Logistic has
complied in all material respects with the terms of all leases to
which it is a party and under which it is in occupancy, and all
such leases are in full force and effect. Each of Christiana and
Logistic enjoys peaceful and undisturbed possession under all
such leases.
(s) Insurance Policies. Section 2.2(s) of the Christiana
Disclosure Letter contains a correct and complete description of all
insurance policies of Christiana covering Christiana, Logistic and their
respective subsidiaries, any employees or other agents of Christiana,
Logistic and their respective subsidiaries or any assets of Christiana
and its subsidiaries. Each such policy is in full force and effect, is
with responsible insurance carriers and is substantially equivalent in
coverage and amount to policies covering companies of the size of
Christiana and in the business in which Christiana and its subsidiaries
is engaged, in light of the risk to which such companies and their
employees, businesses, properties and other assets may be exposed. All
retroactive premium adjustments under any worker's compensation policy
of Christiana or any of its Subsidiaries have been recorded in
Christiana's financial statements in accordance with generally accepted
accounting principles and are reflected in the financial statements
contained in the Commission Filings.
(t) Loans. Section 2.2(t) of the Christiana Disclosure Letter
sets forth all existing loans, advances or other extensions of credit
(excluding accounts receivable arising in the ordinary course of
business) by Christiana or its subsidiaries to any party other than
intercompany loans, advances, guaranties or extensions of credit. All
items listed in Section 2.2(t) of the Christiana Disclosure Letter will
be repaid in full or assumed by C2 prior to the Effective Time of the
Merger. All intercompany obligations and loans between Christiana and
its subsidiaries, including C2, will be extinguished prior to the
Logistic Sale without any ongoing liability to Christiana or C2 with
respect thereto, except as set forth herein or in the Logistic Purchase
Agreement.
(u) No Fraudulent Transfer. Christiana has not within the
last twelve months made any transfer or incurred any obligation with
actual intent to hinder, delay or defraud any entity to which it was or
may become indebted and it has not transferred any material property
without receiving reasonably equivalent value for any
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such transfer obligation. Both immediately prior to and immediately
after the Logistic Sale and the Merger, (i) the fair value of (x)
Christiana's assets at the time of the Merger and (y) Logistic's and
C2's assets after the Logistic Sale and (z) the assets of CST Financial,
Inc. ("CST") Martinique Holdings, Inc. ("MHI") and Christiana Community
Builders, Inc. ("CCB") immediately prior to their liquidation in each
case at a fair valuation exceeds their respective debts and liabilities,
subordinated, contingent or otherwise, (ii) the present fair saleable
value of Christiana's, Logistic's, C2's, CST's, MHI's and CCB's property
is greater than the amount that will be required to pay its probable
liability on their respective debts and other liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute
and mature, (iii) Christiana prior to the Logistic Sale and Logistic, C2
after the Logistic Sale and CST, MHI and CCB prior to their liquidation
each reasonably expect to be able to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities
become absolute and matured, and (iv) Christiana before the Logistic
Sale and Logistic and C2 after the Logistic Sale will not have
unreasonably small capital with which to conduct the business in which
it is engaged as such business is now conducted and is proposed to be
conducted. For all purposes of clauses of (i) through (iv), the amount
of contingent liabilities at any time shall be computed as the amount
that, in light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an
actual or matured liability.
(v) Information Supplied. None of the information supplied or
to be supplied by Christiana or C2 for inclusion or incorporation by
reference in (i) the Registration Statement (as defined in Section 5.1)
will, at the time the Registration Statement is filed with the
Commission, and at any time it is amended or supplemented or at the time
it becomes effective under the Securities Act, 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 therein not
misleading, and (ii) the Proxy Statement will, at the date the Proxy
Statement is first mailed to Christiana's stockholders and at the time
of the Christiana Stockholders Meeting, contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light
of the circumstances under which they are made, not misleading. The
Proxy Statement will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations
thereunder. For purposes of this Agreement, the parties agree that the
statements made and information in the Registration Statement and the
Proxy Statement relating to the Federal income tax consequences of the
transactions contemplated hereby shall be deemed to be supplied by
Christiana and C2 and not by EVI or Sub.
ARTICLE III
COVENANTS OF CHRISTIANA
3.1 CONDUCT OF BUSINESS BY CHRISTIANA PENDING THE MERGER. Christiana
covenants and agrees that, from the date of this Agreement until the Effective
Time, unless EVI shall otherwise agree in writing or as otherwise expressly
contemplated by this Agreement or the Logistic Purchase Agreement or set forth
in Section 3.1 of the Christiana Disclosure Letter:
(a) the business of Christiana and the Christiana Subsidiaries
shall be conducted only in, and Christiana and the Christiana
Subsidiaries shall not take any action except in, the ordinary course of
business and consistent with past practice;
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(b) Christiana shall not directly or indirectly do any of the
following: (i) issue, sell, pledge, dispose of or encumber any capital
stock of Christiana except upon the exercise of Christiana Options; (ii)
split, combine, or reclassify any outstanding capital stock, or declare,
set aside, or pay any dividend payable in cash, stock, property, or
otherwise with respect to its capital stock whether now or hereafter
outstanding; (iii) redeem, purchase or acquire or offer to acquire any
of its capital stock; (iv) acquire, agree to acquire or make any offer
to acquire for cash or other consideration, any equity interest in or
assets of any corporation, partnership, joint venture, or other entity
in an amount greater than $500,000; or (v) enter into any contract,
agreement, commitment, or arrangement with respect to any of the matters
set forth in this Section 3.1(b);
(c) Christiana shall not transfer, dispose or otherwise convey
any of the shares of EVI Common Stock held by it or grant or permit
there to exist any Lien on such shares;
(d) Christiana shall not enter into any contract regarding its
business having a term greater than 120 days or involving an amount in
excess of $50,000 or commit to do the same and except for a cold storage
facility in Hudsonville, Michigan, no Christiana Subsidiary shall enter
into any contract outside the ordinary course of business;
(e) Christiana shall not become bound by any agreement or
obligation in an amount in excess of $500,000 in the aggregate for all
such agreements and obligations;
(f) Christiana shall not pledge or encumber any of the assets
to be held by Christiana following the Logistic Sale;
(g) Neither Christiana nor any of its Subsidiaries shall enter
into any employment or consulting contracts;
(h) Neither Christiana nor any of its Subsidiaries shall enter
into any contract or agreement that if effective on the date hereof
would be required to be identified as a disclosure pursuant to Section
2.2(q) of the Christiana Disclosure Letter;
(i) Neither Christiana nor any of its Subsidiaries shall sell,
lease, mortgage, pledge, grant a Lien on or otherwise encumber or
otherwise dispose of any of Christiana's or its Subsidiaries' properties
or assets, except sales of inventory in the ordinary course of business
consistent with past practice and Christiana may liquidate (in a manner
acceptable to EVI) CST Financial, Inc., Martinique Holdings, Inc. and
Christiana Community Builders, Inc. and transfer their assets to
Logistic without consideration;
(j) Neither Christiana nor any of its Subsidiaries shall,
directly or indirectly, incur any indebtedness for borrowed money or
guarantee any such indebtedness of another Person, issue or sell any
debt securities or warrants or other rights to acquire any debt
securities of Christiana or its Subsidiaries, guarantee any debt
securities of another Person, enter into any "keep well" or other
agreement to maintain any financial statement condition of another
Person or enter into any arrangement having the economic effect of any
of the foregoing, except for short-term borrowings incurred in the
ordinary course of business consistent with past practice which
obligations in respect of Christiana and its Subsidiaries other than
Logistic shall be released in connection with the Logistic Sale, or make
or permit to remain outstanding any loans,
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advances or capital contributions to, or investments in, any other
Person, other than to Christiana or any direct or indirect wholly owned
subsidiary of Christiana;
(k) Neither Christiana nor any of its Subsidiaries shall make
any election relating to Taxes except for those elections to be made in
connection with its 1997 Tax Returns that are consistent with the 1996
Tax Returns;
(l) Neither Christiana nor any of its Subsidiaries shall
change any accounting principle used by it;
(m) Christiana shall use its reasonable efforts (i) to
preserve intact the business organization of Christiana and Logistic
except Christiana may liquidate (in a manner acceptable to EVI) CST
Financial, Inc., Martinique Holdings, Inc. and Christiana Community
Builders, Inc. and transfer their assets to Logistic without
consideration, (ii) to maintain in effect any material authorizations or
similar rights of Christiana and Logistic, (iii) to preserve the
goodwill of those having material business relationships with it; (iv)
to maintain and keep each of Christiana's properties in the same repair
and condition as presently exists, except for deterioration due to
ordinary wear and tear and damage due to casualty; and (v) to maintain
in full force and effect insurance comparable in amount and scope of
coverage to that currently maintained by it;
(n) Christiana shall, and shall cause the Christiana
Subsidiaries to, perform their respective obligations under any
contracts and agreements to which it is a party or to which any of its
assets is subject, except to the extent such failure to perform would
not have a Christiana MAE and except for such obligations as Christiana
in good faith may dispute;
(o) Christiana shall cause there to exist immediately prior to
the Effective Time Christiana Net Cash (including $10,666,677 to be paid
by C2 under the Logistic Purchase Agreement) of not less than $20
million;
(p) Neither Christiana nor any of its Subsidiaries shall
settle or compromise any litigation (whether or not commenced prior to
the date of this Agreement) other than settlements or compromises: (i)
of litigation where the amount paid in settlement or compromise does not
exceed $500,000, or if greater, the amount of the reserve therefor
reflected in the most recent SEC Documents and the terms of the
settlement would not otherwise have a Christiana MAE, or (ii) in
consultation and cooperation with EVI, and, with respect to any such
settlement, with the prior written consent of EVI;
(q) Christiana shall cause the Logistic Purchase Agreement to
be executed and delivered by Christiana and the Logistic Sale to be
effected prior to the Merger immediately prior to the Effective Time;
(r) Christiana shall not authorize any of, or commit or agree
to take any of, or permit any Christiana Subsidiary to take any of, the
foregoing actions to the extent prohibited by the foregoing and shall
not, and shall not permit any of the Christiana Subsidiaries to, take
any action that would, or that reasonably could be expected to, result
in any of the representations and warranties set forth in this Agreement
becoming untrue or any of the conditions to the Merger set forth in
Article VI not being satisfied. Christiana promptly shall advise EVI
orally and in writing of any change or event having, or which, insofar
as reasonably can be foreseen, would have, a material
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adverse effect on Christiana and the Christiana Subsidiaries, taken as a
whole, or cause a Christiana MAE.
(s) Christiana shall cause Logistic to pay to Christiana a
distribution in the amount of $20 million cash prior to the Effective
Time (the "TLC Dividend");
(t) Christiana shall cause Logistic to pay in full the entire
principal amount of the Wiscold Note dated September 1, 1992, in the
principal amount of $3,000,000, together with all accrued interest
thereon (the "Wiscold Note"); and
(u) Except as set forth in Section 2.2(o) of the Disclosure
Schedule or agreed to in writing by EVI prior to the Closing, Christiana
shall cause all of its obligations (i) relating to Logistics or any
other historical business of Christiana or its Subsidiaries and (ii)
under any and all agreements relating to the borrowing of funds,
including all guarantees and other similar arrangements relating
thereto, to be fully released or otherwise satisfied in a manner
acceptable to EVI.
3.2 CASH REQUIREMENTS. Christiana covenants that as of the Effective
Time it shall have cash equal to the sum of (i) $30 million (including
$10,666,677 to be received under the Logistic Purchase Agreement) and (ii) all
accrued and unpaid liabilities and obligations of Christiana. For purposes of
this Section 3.2, the unpaid liabilities and obligations of Christiana shall
mean the full undiscounted amount of liabilities for which Christiana shall be
responsible, including any liabilities that will accrue as a result of the
Merger, the Logistic Sale or the transactions contemplated herein, whether or
not such liabilities would be required to be reflected as a liability by
generally accepted accounting principles; provided, however, that such
liabilities shall not include any liabilities for any gain on any EVI Common
Stock held by Christiana realized as a result of a sale of such stock by
Christiana or a liquidation or merger of Christiana (other than the Merger)
within two years after the Effective Time, nor any tax liability for income of
EVI attributable to Christiana under the equity method of accounting either
before or after the Effective Time (the "EVI Related Taxes). Further, for
purposes of calculating such liabilities, any Taxes (other than the EVI Related
Taxes) payable in respect of the Logistic Sale or other transactions
contemplated herein or under the Logistic Purchase Agreement shall be fully
accrued as a liability and any Tax credits, deductions, other Tax benefits of
Christiana shall not be considered or used to offset any such liability. The
provisions of this Section 3.2 shall not affect Logistic's and C2's obligations
under the Logistic Purchase Agreement to assume and indemnify EVI as set forth
therein.
3.3 AFFILIATES' AGREEMENTS. Prior to the Closing Date, Christiana
shall deliver to EVI a letter identifying all Persons that are, at the time
this Agreement is submitted for approval to the stockholders of Christiana,
"affiliates" of Christiana for purposes of Rule 145 under the Securities Act
("Affiliates"). Christiana shall deliver or cause to be delivered to EVI an
undertaking by each Affiliate in form satisfactory to EVI that no EVI Common
Stock received or to be received by such Affiliate pursuant to the Merger will
be sold or disposed of except pursuant to an effective registration statement
under the Securities Act or in accordance with the provisions of Rule 144 or
paragraph (d) of Rule 145 under the Securities Act or another exemption from
registration under the Securities Act.
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ARTICLE IV
COVENANTS OF EVI PRIOR TO THE EFFECTIVE TIME
4.1 RESERVATION OF EVI STOCK. EVI shall reserve for issuance, out of
its authorized but unissued capital stock, such number of shares of EVI Common
Stock as may be issuable upon consummation of the Merger.
4.2 CONDUCT OF EVI PENDING THE MERGER. EVI covenants and agrees
that, from the date of this Agreement until the Effective Time, unless
Christiana shall otherwise agree in writing or as otherwise expressly
contemplated by this Agreement, it will not take any action that would, or that
could be expected to, result in any of the representations and warranties set
forth in this Agreement becoming untrue or any of the conditions to the merger
set forth in Article VI not being satisfied.
4.3 STOCK EXCHANGE LISTING. EVI shall use reasonable efforts to
cause the shares of EVI Common Stock to be issued in the Merger to be approved
for listing on the NYSE, subject to official notice of issuance, prior to the
Closing Date.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 JOINT PROXY STATEMENT/PROSPECTUS; REGISTRATION STATEMENT. As
promptly as reasonably practicable after the execution of this Agreement, EVI
and Christiana shall prepare and file with the Commission preliminary proxy
materials that shall constitute the Proxy Statement of EVI and Christiana and
the registration statement with respect to the EVI Common Stock to be issued in
connection with the Merger (the "Registration Statement"). As promptly as
reasonably practicable after final comments are received from and cleared by
the Commission on the preliminary proxy materials, EVI and Christiana shall
file with the Commission a combined joint proxy statement and registration
statement on Form S-4 (or on such other form as shall be appropriate) relating
to the approval and adoption of the Merger and this Agreement by the
stockholders of EVI and the stockholders of Christiana and the issuance by EVI
of EVI Common Stock in connection with the Merger and shall use their
reasonable efforts to cause the Registration Statement to become effective as
soon as practicable. Subject to the terms and conditions set forth in Section
6.2 and the fiduciary obligations of the Board of Directors of EVI with respect
to such matters, the Proxy Statement shall contain a statement that the Board
of Directors of EVI recommended that the stockholders of EVI approve and adopt
the Merger and this Agreement. Subject to the terms and conditions set forth
in Section 6.3 and the fiduciary obligations of the Board of Directors of
Christiana with respect to such matters, the Proxy Statement shall contain a
statement that the Board of Directors of Christiana recommended that the
stockholders of Christiana approve and adopt the Merger and this Agreement.
5.2 ACCOUNTANTS LETTER. Christiana shall use its reasonable efforts
to cause Arthur Andersen LLP to deliver a letter pursuant to SAS 72 dated as of
the date of the Proxy Statement and confirmed and updated at the Closing as of
the Closing Date, and addressed to itself and EVI, in the form and substance
reasonably satisfactory to EVI and customary in the scope and substance for
agreed upon procedures letters delivered by independent public accountants in
connection with registration statements and proxy statements similar to the
Registration Statement and Proxy Statement.
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5.3 MEETINGS OF STOCKHOLDERS.
(a) Christiana shall promptly take all action reasonably
necessary in accordance with the WGCL and its Certificate of
Incorporation and bylaws to convene a meeting of its stockholders to
consider and vote upon the adoption and approval of the Merger and this
Agreement and the Logistic Sale. Christiana shall provide that, in
addition to any vote that may be required by law, the approval of the
Merger and this Agreement and the Logistic Sale shall require approval
of a majority of the votes cast for or against such matters excluding
any shares of Christiana Common Stock held by Lubar & Co. Incorporated
and its affiliates; provided, however, Christiana may, in lieu of such
requirement, obtain an agreement by Lubar & Co. Incorporated and its
affiliates to vote all of its shares of Christiana Common Stock for,
against or abstain from voting with respect to such matters in the same
proportion as the shares of Christiana Common Stock are voted on such
matters by the other stockholders of Christiana. Subject to the terms
and conditions set forth in Section 6.3 and the fiduciary obligations of
the Board of Directors of Christiana with respect to such matters, the
Board of Directors of Christiana (i) shall recommend at such meeting
that the stockholders of Christiana vote to adopt and approve the Merger
and this Agreement and the Logistic Sale, (ii) shall use its best
efforts to solicit from stockholders of Christiana proxies in favor of
such adoption and approval and (iii) shall take all other action
reasonably necessary to secure a vote of its stockholders in favor of
the adoption and approval of the Merger and this Agreement.
(b) EVI shall promptly take all action reasonably necessary in
accordance with the General Corporation Law of the State of Delaware
(the "DGCL") and its Certificate of Incorporation and bylaws to convene
a meeting of its stockholders to consider and vote upon the adoption and
approval of the Merger and this Agreement. Subject to the terms and
conditions set forth in Section 6.2 and the fiduciary obligations of the
Board of Directors of EVI with respect to such matters, the Board of
Directors of EVI (i) shall recommend at such meeting that the
stockholders of EVI vote to adopt and approve the Merger and this
Agreement, (ii) shall use its reasonable efforts to solicit from
stockholders of EVI proxies in favor of such adoption and approval and
(iii) shall take all other action reasonably necessary to secure a vote
of its stockholders in favor of the adoption and approval of the Merger
and this Agreement.
(c) EVI and Christiana shall coordinate and cooperate with
respect to the timing of such meetings and shall endeavor to hold such
meetings on the same day and as soon as practicable after the date
hereof.
5.4 FILINGS; CONSENTS; REASONABLE EFFORTS. Subject to the terms and
conditions of this Agreement, Christiana and EVI shall (i) make all necessary
filings with respect to the Merger and this Agreement under the HSR Act, the
Securities Act, the Exchange Act, and applicable blue sky or similar securities
laws and shall use all reasonable efforts to obtain required approvals and
clearances with respect thereto; (ii) use reasonable efforts to obtain all
consents, waivers, approvals, authorizations, and orders required in connection
with the authorization, execution, and delivery of this Agreement and the
consummation of the Merger; and (iii) use reasonable efforts to take, or cause
to be taken, all appropriate action, and do, or cause to be done, all things
necessary, proper, or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement.
5.5 NOTIFICATION OF CERTAIN MATTERS. Christiana shall give prompt
notice to EVI, and EVI shall give prompt notice to Christiana, orally and in
writing, of (i) the occurrence, or failure to occur, of any event which
occurrence or failure would be likely to cause any
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representation or warranty contained in this Agreement to be untrue or
inaccurate at any time from the date hereof to the Effective Time; and (ii) any
material failure of Christiana or EVI, as the case may be, or any officer,
director, employee or agent thereof, to comply with or satisfy any covenant,
condition or agreement to be compiled with or satisfied by it hereunder.
5.6 EXPENSES. Whether or not the Merger is consummated, all costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses, except
those out-of-pocket expenses (which do not include fees for attorneys,
accountants and financial advisors) incurred in connection with (i) the
registration fees for the EVI Common Stock under the Securities Act to be
issued in the Merger, (ii) the registration and qualification of the EVI Common
Stock under any state securities and blue sky laws, (iii) the listing of the
EVI Common Stock on the NYSE, (iv) the HSR filing fee (v) the investment
banking, appraisal, and related expenses of Christiana, (vi) the cost of any
proxy solicitors and (vii) the printing and mailing of the Registration
Statement and the Proxy Statement shall be paid by Christiana; provided,
however, that if this Agreement shall have been terminated pursuant to Section
7.1 as a result of the willful breach by a party of any of its representations,
warranties, covenants, or agreements set forth in this Agreement, such
breaching party shall pay the direct out-of-pocket costs and expenses of the
other parties in connection with the transactions contemplated by this
Agreement.
5.7 CHRISTIANA'S EMPLOYEE BENEFITS.
(a) Christiana shall take action prior to the Merger and the
Logistic Sale to (i) either cancel all outstanding Christiana Options or
accelerate such Christiana Options and make such Christiana Options
terminate prior to the Effective Time and (ii) and terminate the
Christiana Option Plan.
(b) Christiana shall pay to each holder of Christiana Options
an amount of cash necessary to obtain cancellation of all Christiana
Options held by such holders.
(c) Christiana shall cause all employee benefit plans to which
it is a sponsor or has obligations to be terminated or assumed by
Logistic or C2 without any continuing obligations on the part of
Christiana.
(d) Christiana shall transfer to Logistic or C2 all employees
of Christiana without any liability to the Surviving Corporation. C2
shall be responsible for all severance and other obligations with
respect to such terminated employees, if any. As of the Effective Time,
Christiana shall have no employees or employee benefit plans or
obligations.
5.8 LIQUIDATION OR MERGER OF CHRISTIANA. EVI agrees that for a
period of two years following the Effective Date it shall not cause or permit
Christiana to (i) liquidate or dissolve, (ii) sell or transfer any shares of
EVI Common Stock held by Christiana or (iii) merge Christiana into any other
entity unless EVI receives an opinion of a nationally-recognized tax counsel or
accounting firm that such transaction will not adversely affect the tax
treatment of the Merger; provided, however, this restriction shall not be
deemed to prohibit or restrict (i) a sale or disposition of Christiana's
interest in Logistic to the extent permitted by the Logistic Purchase Agreement
or the operating agreement relating to Logistic, (ii) a change in control of
EVI, (iii) a merger, consolidation, share exchange or similar transaction
involving EVI or its subsidiaries (other than Christiana) or (iv) a sale or
disposition of any assets of EVI or its subsidiaries (other than Christiana).
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ARTICLE VI
CONDITIONS
6.1 CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE MERGER. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment at or prior to the Closing Date of the following conditions:
(a) This Agreement and the Merger (and the Logistic Sale in
the case of Christiana) shall have been approved and adopted by the
requisite vote of the stockholders of Christiana and EVI, as may be
required by law, by the rules of the NYSE, by Section 5.3(a) and by any
applicable provisions of their respective charters or bylaws;
(b) The waiting period (and any extension thereof) applicable
to the consummation of the Merger under the HSR Act shall have expired
or been terminated;
(c) No order shall have been entered and remain in effect in
any action or proceeding before any foreign, federal or state court or
governmental agency or other foreign, federal or state regulatory or
administrative agency or commission that would prevent or make illegal
the consummation of the Logistic Sale and the Merger;
(d) The Registration Statement and a registration statement
under the Securities Act to be filed by C2 in connection with the Merger
shall each be effective on the Closing Date, and all post-effective
amendments thereto filed shall have been declared effective or shall
have been withdrawn; and no stop-order suspending the effectiveness
thereof shall have been issued and no proceedings for that purpose shall
have been initiated or, to the knowledge of the parties, threatened by
the Commission;
(e) There shall have been obtained any and all material
permits, approvals and consents of securities or blue sky commissions of
any jurisdiction, and of any other governmental body or agency, that
reasonably may be deemed necessary so that the consummation of the
Merger and the transactions contemplated thereby will be in compliance
with applicable laws, the failure to comply with which would have a
Christiana MAE or EVI MAE;
(f) The shares of EVI Common Stock issuable upon consummation
of the Merger shall have been approved for listing on the NYSE, subject
to official notice of issuance;
(g) EVI, C2 and Christiana shall have received an opinion,
dated as of the Effective Date, from American Appraisal Associates, Inc.
in form and substance satisfactory to them, in respect of the matters
described in Section 2.2(u); and
(h) All approvals and consents of third Persons (i) the
granting of which is necessary for the consummation of the Merger, the
Logistic Sale or the transactions contemplated in connection therewith
and (ii) the non-receipt of which would have a Christiana MAE or an EVI
MAE.
6.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF EVI. The obligation of
EVI to effect the Merger is, at the option of EVI, also subject to the
fulfillment at or prior to the Closing Date of the following conditions:
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(a) The representations and warranties of Christiana contained
in Section 2.2 shall be accurate as of the date of this Agreement and
(except to the extent such representations and warranties speak
specifically as of an earlier date) as of the Closing Date as though
such representations and warranties had been made at and as of that
time; all of the terms, covenants and conditions of this Agreement to be
complied with and performed by Christiana on or before the Closing Date
shall have been duly complied with and performed in all material
respects; and a certificate to the foregoing effect dated the Closing
Date and signed by the chief executive officer and the president of
Christiana shall have been delivered to EVI;
(b) There shall not have occurred or exist any fact or
condition that would reasonably result in a Christiana MAE or would
constitute a material fixed or contingent liability to Christiana, and
EVI shall have received a certificate signed by the president of
Christiana dated the Closing Date to such effect;
(c) The Board of Directors of EVI shall have received from
Morgan Stanley & Co. Incorporated, financial advisor to EVI, a written
opinion, satisfactory in form and substance to the Board of Directors of
EVI, to the effect that consideration to be paid by EVI in the Merger is
fair to EVI from a financial point of view, which opinion shall have
been confirmed in writing to such Board as of a date reasonably
proximate to the date the Proxy Statement is first mailed to the
stockholders of EVI and not subsequently withdrawn;
(d) The Christiana Options shall have been cancelled and the
Christiana Plans shall have been terminated or such options shall have
been exercised;
(e) Christiana shall have received, and furnished written
copies of EVI of, the Christiana affiliates' agreements pursuant to
Section 3.3;
(f) EVI shall have received from Foley & Lardner, counsel to
Christiana, an opinion dated the Closing Date covering customary matters
relating to the Agreement and the Merger, including an opinion in form
and substance satisfactory to EVI with respect to the matters described
in Section 2.2(a), (b), (c), (d) and (k) (provided that the form of such
opinion shall be agreed upon prior to the filing of the Registration
Statement with the Commission);
(g) EVI shall have received from Arthur Andersen LLP a written
opinion, in form and substance satisfactory to EVI, dated as of the date
that the Proxy Statement is first mailed to the Stockholders of
Christiana and EVI to the effect that (i) the Merger will be treated for
U.S. federal income tax purposes as a reorganization within the meaning
of Section 368(a)(1)(A) of the Code by reason of Section 368(a)(2)(E) of
the Code, (ii) EVI, Sub and Christiana will each be a party to that
reorganization within the meaning of Section 368(b) of the Code and
(iii) EVI, Sub and Christiana shall not recognize any gain or loss for
U.S. federal income tax purposes as a result of the Merger (although
Christiana will recognize gain or loss for U.S. federal income tax
purposes as a result of the Logistic Sale), and such opinion shall be
confirmed at the Closing;
(h) EVI shall have received from Arthur Andersen LLP a letter,
in form and substance satisfactory to EVI, dated as of the Closing Date,
to the effect that the Merger would not adversely affect the ability of
EVI to account for any prior or future business combination as a pooling
of interest;
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(i) C2 shall have executed and delivered to Christiana and EVI
the Logistic Purchase Agreement and agreement among members in form and
substance, including schedules, acceptable to EVI;
(j) The Logistic Sale shall have been consummated;
(k) Christiana shall have delivered to EVI a pro forma balance
sheet after giving effect to the Logistic Sale, including a full accrual
for Taxes thereon without regard to any tax credits or tax deductions
that Christiana may have in connection with the exercise of any stock
options, reflecting Christiana Net Cash in an amount not less than $20
million;
(l) Except as permitted by Section 3.1, all outstanding
Indebtedness (including guarantees thereof) of Christiana and its
Subsidiaries (other than Logistics) shall have been paid in full or
Christiana shall have been fully released therefrom;
(m) The assets of Christiana shall consist only of cash of at
least $30 million, 3,897,462 shares of EVI Common Stock and 333.333
units of Logistic representing one-third of the outstanding interests of
Logistic; and
(n) There shall not be pending any litigation involving
Christiana or any of its subsidiaries, that EVI, in its sole discretion,
considers to be a material liability for which adequate security has not
been provided.
6.3 ADDITIONAL CONDITIONS TO OBLIGATIONS OF CHRISTIANA. The
obligation of Christiana to effect the Merger is, at the option of Christiana,
also subject to the fulfillment at or prior to the Closing Date of the
following conditions:
(a) The representations and warranties of EVI and Sub
contained in Section 2.1 shall be accurate as of the date of this
Agreement and (except to the extent such representations and warranties
speak specifically as of an earlier date) as of the Closing Date as
though such representations and warranties had been made at and as of
that time; all the terms, covenants and conditions of this Agreement to
be complied with and performed by EVI on or before the Closing Date
shall have been duly complied with and performed in all material
respects; and a certificate to the foregoing effect dated the Closing
Date and signed by the chief executive officer of EVI shall have been
delivered to Christiana;
(b) The Board of Directors of Christiana and C2 shall have
received from Prudential Securities Corporation, financial advisor to
Christiana and C2, a written opinion, satisfactory in form and substance
to the Board of Directors of Christiana and C2, to the effect that from
a financial point of view to the Christiana Shareholders the Merger,
which includes (i) the consideration to be received in the Merger and
(ii) the purchase price for Logistic is fair to the Christiana
Shareholders, which opinion shall have been confirmed in writing to such
Board as of a date reasonably proximate to the date the Proxy Statement
is first mailed to the stockholders of Christiana and EVI and not
subsequently withdrawn;
(c) Christiana and C2 shall have received from Fulbright &
Jaworski L.L.P. counsel to EVI, an opinion dated the Closing Date
covering customary matters relating to this Agreement and the Merger,
including an opinion in form and substance with respect to the matters
described in Section 2.1(a), (b)(iii), (c) and (d)(i), (ii) and (iii);
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(d) C2 and Christiana shall have received from Arthur Andersen
LLP, a written opinion, in form and substance satisfactory to
Christiana, dated as of the date that the Proxy Statement is first
mailed to stockholders of Christiana and EVI to the effect that (i) the
Merger will be treated for U.S. federal income tax purposes as a
reorganization within the meaning of Section 368(a)(1)(A) of the Code by
reason of Section 368(a)(2)(E) of the Code; (ii) EVI, Sub and Christiana
will each be a party to that reorganization within the meaning of
Section 368(b) of the Code, and (iii) EVI, Sub and Christiana shall not
recognize any gain or loss for U.S. federal income tax purposes as a
result of the Merger (although Christiana will recognize gain or loss
for U.S. federal income tax purposes as a result of the Logistic Sale),
and such opinion shall be confirmed at the Closing; and
(e) The Logistic Sale under the Logistic Purchase Agreement
shall have occurred.
ARTICLE VII
MISCELLANEOUS
7.1 TERMINATION. This Agreement may be terminated and the Merger and
the other transactions contemplated herein may be abandoned at any time prior
to the Effective Time, whether prior to or after approval by the stockholders
of EVI or the stockholders of Christiana:
(a) by mutual written consent of EVI and Christiana;
(b) by either EVI or Christiana if (i) the Merger has not been
consummated on or before June 30, 1998 (provided that the right to
terminate this Agreement under this clause (i) shall not be available to
any party whose breach of any representation or warranty or failure to
fulfill any covenant or agreement under this Agreement has been the
cause of or resulted in the failure of the Merger to occur on or before
such date); (ii) any court of competent jurisdiction, or some other
governmental body or regulatory authority shall have issued an order,
decree or ruling or taken any other action restraining, enjoining or
otherwise prohibiting the Merger; (iii) the stockholders of Christiana
shall not approve the Logistic Sale or the Merger at the Christiana
stockholder meeting or at any adjournment thereof; (iv) the stockholders
of EVI shall not approve the Merger at the EVI stockholder meeting or
any adjournment thereof; or (v) in the exercise of its good faith
judgment as to its fiduciary duties to its stockholders imposed by law,
as advised by outside counsel, the Board of Directors of Christiana or
EVI determines that such termination is appropriate in complying with
its fiduciary obligations.
(c) by Christiana if (i) EVI shall have failed to comply in
any material respect with any of the covenants or agreements contained
in this Agreement to be complied with or performed by EVI or Sub at or
prior to such date of termination (provided such breach has not been
cured within 30 days following receipt by EVI of written notice from
Christiana of such breach and is existing at the time of termination of
this Agreement); (ii) any representation or warranty of EVI contained in
this Agreement shall not be true in all respects when made (provided
such breach has not been cured within 30 days following receipt by EVI
of written notice from Christiana of such breach and is existing at the
time of termination of this Agreement) or on and as of the Effective
Time as if made on and as of the Effective Time (except to the extent it
relates to a particular date), except for such failures to be so true
and correct which
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<PAGE> 38
would not individually or in the aggregate, reasonably be expected to
have an EVI MAE, assuming the effectiveness of the Merger; or (iii) the
Board of Directors of EVI withdraws, modifies or changes its
recommendation of this Agreement or the Merger in a manner adverse to
Christiana or shall have resolved to do any of the foregoing.
(d) by EVI if (i) Christiana shall have failed to comply in
any material respect with any of the covenants or agreements contained
in this Agreement to be complied with or performed by it at or prior to
such date of termination (provided such breach has not been cured within
30 days following receipt by Christiana of written notice from EVI of
such breach and is existing at the time of termination of this
Agreement; (ii) any representation or warranty of Christiana contained
in this Agreement shall not be true in all respects when made (provided
such breach has not been cured within 30 days following receipt by
Christiana of written notice from EVI of such breach and is existing at
the time of termination of this Agreement) or on and as of the Effective
Time as if made on and as of the Effective Time (except to the extent it
relates to a particular date), except for such failures to be so true
and correct which would not individually or in the aggregate, reasonably
be expected to have a Christiana MAE assuming the effectiveness of the
Merger or (iii) the Board of Directors of Christiana withdraws, modifies
or changes its recommendation of this Agreement or the Merger in a
manner adverse to EVI or shall have resolved to do any of the foregoing.
7.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement by either EVI or Christiana as provided in Section 7.1, this
Agreement shall forthwith become void and there shall be no liability or
obligation on the part of EVI, Sub or Christiana, except (i) with respect to
this Section 7.2, Section 5.6 and Section 7.13, and (ii) such termination shall
not relieve any party hereto for any intentional breach prior to such
termination by a party hereto of any of its representations or warranties or of
any of its covenants or agreements set forth in this Agreement.
7.3 WAIVER AND AMENDMENT. Any provision of this Agreement may be
waived at any time by the party that is, or whose stockholders are, entitled to
the benefits thereof. This Agreement may not be amended or supplemented at any
time, except by an instrument in writing signed on behalf of each party hereto,
provided that after this Agreement has been approved and adopted by the
stockholders of EVI and Christiana, this Agreement may be amended only as may
be permitted by applicable provisions of the DGCL and the WGCL. The waiver by
any party hereto of any condition or of a breach of another provision of this
Agreement shall not operate or be construed as a waiver of any other condition
or subsequent breach. The waiver by any party hereto of any of the conditions
precedent to its obligations under this Agreement shall not preclude it from
seeking redress for breach of this Agreement other than with respect to the
condition so waived.
7.4 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. Except for the
representations and warranties of C2 contained herein, which shall survive
without limitation, none of the representations and warranties in this
Agreement shall survive the Effective Time.
7.5 PUBLIC STATEMENTS. Christiana and EVI agree to consult with each
other prior to issuing any press release or otherwise making any public
statement with respect to the transactions contemplated hereby.
7.6 ASSIGNMENT. This Agreement shall inure to the benefit of and
will be binding upon the parties hereto and their respective legal
representatives, successors and permitted assigns.
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7.7 NOTICES. All notices, requests, demands, claims and other
communications which are required to be or may be given under this Agreement
shall be in writing and shall be deemed to have been duly given if (i)
delivered in Person or by courier, (ii) sent by telecopy or facsimile
transmission, answer back requested, or (iii) mailed, certified first class
mail, postage prepaid, return receipt requested, to the parties hereto at the
following addresses:
if to Christiana:
Christiana Companies, Inc.
700 N. Water Street, Suite 1200
Milwaukee, Wisconsin 53202
Attn: William T. Donovan
Facsimile: (414) 291-9061
with a copy to:
Foley & Lardner
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attn: Joseph B. Tyson, Jr.
Facsimile: (414) 297-4900
if to C2:
C2, Inc.
700 N. Water Street, Suite 1200
Milwaukee, Wisconsin 53202
Attn: William T. Donovan
Facsimile: (414) 291-9061
with a copy to:
Foley & Lardner
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attn: Joseph B. Tyson, Jr.
Facsimile: (414) 297-4900
if to EVI or Sub:
EVI, Inc.
5 Post Oak Park, Suite 1760
Houston, Texas 77027
Attn: Bernard J. Duroc-Danner
Facsimile: (713) 297-8488
with a copy to:
Fulbright & Jaworski, L.L.P.
1301 McKinney, Suite 5100
Houston, Texas 77010-3095
Attn: Curtis W. Huff
Facsimile: (713) 651-5246
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<PAGE> 40
or to such other address as any party shall have furnished to the other by
notice given in accordance with this Section 7.7. Such notices shall be
effective, (i) if delivered in Person or by courier, upon actual receipt by the
intended recipient, (ii) if sent by telecopy or facsimile transmission, when
the answer back is received, or (iii) if mailed, upon the earlier of five days
after deposit in the mail and the date of delivery as shown by the return
receipt therefor.
7.8 GOVERNING LAW. All questions arising out of this Agreement and
the rights and obligations created herein, or its validity, existence,
interpretation, performance or breach shall be governed by the laws of the
State of Delaware, without regard to conflict of laws principles.
7.9 ARBITRATION. Any disputes, claims or controversies connected
with, arising out of, or related to, this Agreement and the rights and
obligations created herein, or the breach, validity, existence or termination
hereof, shall be settled by Arbitration to be conducted in accordance with the
Commercial Rules of Arbitration of the American Arbitration Association, except
as such Commercial Rules may be changed by this Section 7.9. The disputes,
claims or controversies shall be decided by three independent arbitrators (that
is, arbitrators having no substantial economic or other material relationship
with the parties), one to be appointed by Christiana, if prior to the Merger,
or C2, if after the Merger, and one to be appointed by EVI within fourteen days
following the submission of the claim to the parties hereto and the third to be
appointed by the two so appointed within five days thereafter. Should either
party refuse or neglect to join in the timely appointment of the arbitrators,
the other party shall be entitled to select both arbitrators. Should the two
arbitrators fail timely to appoint a third arbitrator, either party may apply
to the Chief Judge of the United States District Court for the Southern
District of Texas to make such appointment. The arbitrators shall have ninety
days after the selection of the third arbitrator within which to allow
discovery, hear evidence and issue their decision or award and shall in good
faith attempt to comply with such time limits; provided, however, if two of the
three arbitrators believe additional time is necessary to reach a decision,
they may notify the parties and extend the time to reach a decision in thirty
day increments, but in no event to exceed an additional ninety days. Discovery
of evidence shall be conducted expeditiously by the parties, bearing in mind
the parties desire to limit discovery and to expedite the decision or award of
the arbitrators at the most reasonable cost and expense of the parties.
Judgment upon an award rendered pursuant to such Arbitration may be entered in
any court having jurisdiction, or application may be made to such court for a
judicial acceptance of the award, and an order of enforcement, as the case may
be. The place of Arbitration shall be Houston, Texas. The decision of the
arbitrators, or a majority thereof, made in writing, shall be final and binding
upon the parties hereto as to the questions submitted, and each party shall
abide by such decision. Notwithstanding the provisions of this Section 7.9,
neither party shall be prohibited from seeking injunctive relief pending the
completion of any arbitration. The costs and expenses of the arbitration
proceeding, including the fees of the arbitrators and all costs and expenses,
including legal fees and witness fees, incurred by the prevailing party, shall
be borne by the losing party.
Solely for purposes of injunctive relief, orders in aid of arbitration
and entry of the arbitrators' award:
(a) each of the parties hereto irrevocably consents to the
non-exclusive jurisdiction of, and venue in, any state court located in
Harris County, Texas or any federal court sitting in the Southern
District of Texas in any suit, action or proceeding seeking injunctive
relief, orders in aid of arbitration, or entry of an arbitral award
arising out of or relating to this Agreement or any of the other
agreements contemplated hereby and any other court in which a matter
that may result in a claim for indemnification hereunder by an EVI
Indemnified Party (as defined in the Logistic
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<PAGE> 41
Purchase Agreement) may be brought with respect to any claim for
indemnification by an EVI Indemnified Party;
(b) each of the parties hereto waives, to the fullest extent
permitted by law, any objection that it may now or hereafter have to the
laying of venue of any suit, action or proceeding seeking injunctive
relief, orders in aid of arbitration or entry of an arbitral award
arising out of or relating to this Agreement or any of the other
agreements contemplated hereby brought in any state court located in
Harris County, Texas or any federal court sitting in the Southern
District of Texas or any other court in which a matter that may result
in a claim hereunder or for indemnification under the Logistic Purchase
Agreement by an EVI Indemnified Party may be brought with respect to any
claim for indemnification by an EVI Indemnified Party, and further
irrevocably waive any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum;
(c) each of the parties hereto irrevocably designates,
appoints and empowers CT Corporation System, Inc. and any successor
thereto as its designee, appointee and agent to receive, accept and
acknowledge for and on its behalf, and in respect of its property,
service of any and all legal process, summons, notices and documents
which may be served in any suit, action or proceeding arising out of or
relating to this Agreement or any of the other agreements contemplated
hereby for the purposes of injunctive relief, orders in aid of
arbitration and entry of an arbitral award.
7.10 SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provision, covenants and
restrictions of this Agreement shall continue in full force and effect and
shall in no way be affected, impaired or invalidated.
7.11 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be an original, but all of which together shall constitute
one and the same agreement.
7.12 HEADINGS. The Section headings herein are for convenience only
and shall not affect the construction hereof.
7.13 CONFIDENTIALITY AGREEMENT. The Confidentiality Agreements
entered into between EVI and Christiana on December 10, 1997 (the
"Confidentiality Agreements") are hereby incorporated by reference herein and
made a part hereof.
7.14 ENTIRE AGREEMENT: THIRD PARTY BENEFICIARIES. This Agreement, the
Other Agreements and the Confidentiality Agreements constitute the entire
agreement and supersede all other prior agreements and understandings, both
oral and written, among the parties or any of them, with respect to the subject
matter hereof and neither this nor any document delivered in connection with
this Agreement confers upon any Person not a party hereto any rights or
remedies hereunder.
7.15 DISCLOSURE LETTERS.
(a) The Christiana Disclosure Letter, executed by Christiana
as of the date hereof, and delivered to EVI on the date hereof, contains
all disclosure required to be made by Christiana under the various terms
and provisions of this Agreement. Each item of disclosure set forth in
the Christiana Disclosure Letter specifically refers to the Article and
Section of the Agreement to which such disclosure responds, and shall
not be deemed to be disclosed with respect to any other Article or
Section of the Agreement.
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(b) The EVI Disclosure Letter, executed by EVI as of the date
hereof, and delivered to Christiana on the date hereof, contains all
disclosure required to be made by EVI under the various terms and
provisions of this Agreement. Each item of disclosure set forth in the
EVI Disclosure Letter specifically refers to the Article and Section of
the Agreement to which such disclosure responds, and shall not be deemed
to be disclosed with respect to any other Article or Section of the
Agreement.
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<PAGE> 43
IN WITNESS WHEREOF, each of the parties caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as of the
date first above written.
EVI, INC.
By: /s/ Bernard J. Duroc-Danner
---------------------------------
Name: Bernard J. Duroc-Danner
-------------------------------
Title: President
------------------------------
CHRISTIANA ACQUISITION, INC.
By: /s/ Bernard J. Duroc-Danner
---------------------------------
Name: Bernanrd J. Duroc-Danner
-------------------------------
Title: President
------------------------------
CHRISTIANA COMPANIES, INC.
By: /s/ William T. Donovan
---------------------------------
Name: William T. Donovan
Title: President
C2, INC.
By: /s/ William T. Donovan
---------------------------------
Name: William T. Donovan
Title: President
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<PAGE> 44
As permitted by Item 601(b)(2) of Regulation S-K, the Company has not
filed any schedules or exhibits with this Exhibit No. 2.1. Listed below is a
brief description of the omitted schedules and exhibits. The Company agrees to
furnish supplementally a copy of any of such omitted schedules and exhibits to
the Commission upon request.
EXHIBITS
A Logistic Purchase Agreement
B Amended and Restated Certificate of Incorporation of Christiana
SCHEDULES
2.1(g) EVI Tax Matters
2.2(a) Good Standing of Christiana
2.2(b)(iv) Subsidiaries of Christiana
2.2(d) No conflicts
2.2(e) Liabilities of Christiana
2.2(f) Absence of Certain Changes
2.2(g) Litigation
2.2(h) Employee Benefit Plans
2.2(i) Taxes
2.2(j) Environmental Matters
2.2(l) Employee Severance Obligations
2.2(o) Continuing Obligations of Christiana
2.2(q) Contracts
2.2(r)(ii) Real Property Leases
2.2(s) Insurance Policies
2.2(t) Loans of Christiana
<PAGE> 1
EXHIBIT 2.2
<PAGE> 2
AGREEMENT
THIS AGREEMENT ("Agreement") made as of this 12th day of
December, 1997 by and among EVI, INC., a Delaware corporation ("EVI"), TOTAL
LOGISTIC CONTROL, LLC, a Delaware limited liability company ("TLC"), CHRISTIANA
COMPANIES, INC., a Wisconsin corporation ("Christiana") and C2, INC., a
Wisconsin corporation ("C2").
W I T N E S S E T H :
WHEREAS, EVI, Christiana Acquisition, Inc., a Wisconsin
corporation ("Sub"), Christiana and C2 have entered into an Agreement and Plan
of Merger dated December 12, 1997 (the "Merger Agreement") pursuant to which
Sub, a wholly owned subsidiary of EVI, will merge with and into Christiana and
thereby Christiana will become a wholly owned subsidiary of EVI (the "Merger")
WHEREAS, as a condition to the Merger, Christiana will sell
666.667 Membership Units (as defined in Section 1.16 hereof) of TLC to C2
pursuant to the terms and conditions hereinafter set forth (the "Logistic
Sale").
NOW, THEREFORE, in consideration of the mutual covenants of the
parties herein and the mutual benefits derived from this Agreement
("Agreement"), the parties, intending to be legally bound, hereby agree as
follows:
1. Definitions.
1.1 Affiliate. Affiliate means, as to the person specified,
any person controlling, controlled by or under common control with such
person, with the concept of control in such context meaning the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of another, whether through the
ownership of voting securities, by contract or otherwise.
1.2 Assumed Liabilities. Assumed Liabilities means any and
all Liabilities and Environmental Liabilities (except for the Retained
Liabilities) to which Christiana, EVI or a Christiana Company may now or
at any time in the future become subject (whether directly or
indirectly, including by reason of Christiana or a Christiana Company
owning, controlling or operating any business or assets of any Person
(including any current or past Affiliate)), resulting from, arising out
of or relating to (i) any Christiana Company (other than TLC), (ii) the
business, operations or assets of Christiana or any Christiana Company
on or prior to the Effective Date, (iii) any Christiana Taxes for
periods ending on or before the Effective Date (except Christiana Taxes
to be expressly retained by Christiana pursuant to the Merger
Agreement), (iv) any obligation, matter, fact, circumstance or action or
omission by any Person in any way
<PAGE> 3
relating to or arising from the business, operations or assets of
Christiana or a Christiana Company that existed on or prior to the
Effective Date; (v) any product or service provided by Christiana or any
Christiana Company prior to the Effective Date, (vi) the Merger, the
Logistic Sale or any of the other transactions contemplated hereby,
(vii) previously conducted operations of Christiana or any Christiana
Company and (viii) C2's interest in TLC. The term "Assumed Liabilities"
shall include, without limitation, the following Liabilities (other than
Retained Liabilities):
(a) Any and all Liabilities and Environmental Liabilities
resulting from, arising out of or relating to (i) the
assets, activities, operations, current or former
facilities, actions or omissions of Christiana or any of
its officers, directors, employees, independent
contractors or agents occurring on or before the Effective
Date, (ii) the assets, activities, operations, current or
former facilities, actions or omissions of any Christiana
Company or any of its officers, directors, employees,
independent contractors or agents, (iii) any product
liability claim, recall, replacement, returns or customer
allowances of or relating to Christiana or any Christiana
Company, or (iv) any contract or permit of Christiana or
any Christiana Company;
(b) Any and all accounts and notes payable of Christiana or
any Christiana Company, excluding accounts payable which
have been accounted for in the calculation of Christiana
Net Cash set forth in the Merger Agreement;
(c) Any and all Liabilities relating to Christiana or any
Christiana Company employee benefit plans;
(d) Any and all Liabilities and Environmental Liabilities on
behalf of or which arise from or relate to active
employees, or retired and inactive employees, of
Christiana or any Christiana Company, including, without
limitation, (i) liability for any salaries, wages, tax
equalization payments, vacation pay, sick leave, personal
leave, severance pay, wrongful dismissal or discrimination
claims; (ii) liability for or under any employee benefit
plan, policy or arrangement, including, without
limitation, retirement, pension, medical, dental, profit
sharing, unemployment, supplemental unemployment or
disability plan policy or arrangement; (iii) liability for
any payroll taxes, social security or similar taxes or
withholding; (iv) liability arising from claims or
litigation; and (v) liability arising from any injury,
death, loss, disability, occupational disease or claims
under any worker's compensation laws;
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<PAGE> 4
(e) Any and all Liabilities and Environmental Liabilities
resulting from, arising out, relating to or occurring on
the Properties, including those properties listed on
Schedule 1.2 hereof, the operations on any of the
foregoing, and any off-site Environmental Liabilities
related to any of the foregoing, including without
limitation, those under any indemnification agreement or
obligation of Christiana or any Christiana Company and any
documents relating thereto;
(f) Any and all Liabilities of TLC or any of its subsidiaries
with respect to transactions or events occurring or
existing on or prior to the Effective Date;
(g) Any and all litigation and claims for Liabilities of
Christiana or any Christiana Company existing as of the
Effective Date;
(h) Any and all Liabilities for Christiana Taxes, arising out
of, or related to, Christiana for taxable periods on or
before the Effective Date (except such Christiana Taxes
expressly retained by Christiana pursuant to the Merger
Agreement);
(i) Any misrepresentation or incorrect representation or
warranty of Christiana under the Merger Agreement without
regard to any materiality or knowledge qualification; and
(j) Any and all legal, accounting, consulting and expert fees
and expenses incurred after the date hereof in
investigating, preparing, defending, settling or
discharging any claim or action arising under, out of or
in connection with any of the Assumed Liabilities other
than those associated with EVI's counsel's evaluation of
the Merger and the Logistic sale.
1.3 Business Day. Business Day means a day on which national
banks are generally open for the transaction of business in Houston,
Texas.
1.4 CERCLA. CERCLA means the Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C. Section 9601, et
seq.
1.5 Christiana. Christiana, for purposes of the assumption
indemnification provisions of this Agreement includes Christiana
Companies, Inc. and any and all predecessors thereto, whether by merger,
purchase or acquisition of assets or otherwise, and any and all
predecessors to any such entities.
1.6 Circumstance. Circumstance has the meaning specified in
Section 6.2 hereof.
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1.7 Effective Date. Effective Date means the time and date the
Merger is made effective.
1.8 Environmental Conditions. Environmental Conditions means
any pollution, contamination, degradation, damage or injury caused by,
related to, arising form or in connection with the generation, handling,
use, treatment, storage, transportation, disposal, discharge, release or
emission of any Waste Materials.
1.9 Environmental Law or Environmental Laws. Environmental
Law or Environmental Laws means all laws, rules, regulations, statutes,
ordinances, decrees or orders of any governmental entity now or at any
time in the future in effect relating to (i) the control of any
potential pollutant or protection of the air, water or land, (ii) solid,
gaseous or liquid waste generation, handling, treatment, storage,
disposal or transportation, and (iii) exposure to hazardous, toxic or
other substances alleged to be harmful. The term "Environmental Law" or
"Environmental Laws" includes, without limitation, (1) the terms and
conditions of any license, permit, approval or other authorization by
any governmental entity and (2) judicial, administrative or other
regulatory decrees, judgments and orders of any governmental entity.
The term "Environmental Law" or "Environmental Laws" includes, but is
not limited to the following statutes and the regulations promulgated
thereunder: the Clean Air Act, 42 U.S.C. Section 7401 et seq., The
Clean Water Act, 33 U.S.C. Section 1251 et seq., the Resource
Conservation Recovery Act, 42 U.S.C. Section 6901 et seq., the
Superfund Amendments and Reauthorization Act, 42 U.S.C. Section 11011
et seq., the Toxic Substances Control Act, 15 U.S.C. Section 2601 et
seq., the Water Pollution Control Act, 33 U.S.C. Section 1251, et seq.,
the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq., CERCLA and
any state, county or local regulations similar thereto.
1.10 Environmental Liabilities. Environmental Liabilities
means any and all liabilities, responsibilities, claims, suits, losses,
costs (including remediation, removal, response, abatement, clean-up,
investigative or monitoring costs and any other related costs and
expenses), other causes of action recognized now or at any later time,
damages, settlements, expenses, charges, assessments, liens, penalties,
fines, pre-judgment and post-judgment interest, attorney fees and other
legal fees (i) pursuant to any agreement, order, notice, requirement,
responsibility or directive (including directives embodied in
Environmental Laws), injunction, judgment or similar documents
(including settlements) arising out of or in connection with any
Environmental Laws, or (ii) pursuant to any claim by a governmental
entity or other person or entity for personal injury, property damage,
damage to natural resources, remediation or similar costs or expenses
incurred or asserted by such entity or person pursuant to common law or
statute.
1.11 EVI Indemnified Parties. EVI Indemnified Parties shall
have the meaning set forth in Section 6.1(a) hereof.
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<PAGE> 6
1.12 Christiana Company. Christiana Company means any
corporation, partnership, limited liability company, association or
other entity, of which Christiana or any Christiana Company now or at
any time in the past owned, directly or indirectly, an ownership
interest in (whether or not such ownership interest constituted control
of the entity and whether or not such interest represented a passive or
active investment), including those companies named on Schedule 1.12
hereto.
1.13 Christiana Taxes. Christiana Taxes means any and all
taxes (other than EVI Related Taxes as defined in the Merger Agreement)
to which Christiana or any Christiana Company may be obligated relating
to or arising from (i) the current or past operations or assets of
Christiana or any Christiana Company through the Effective Date, (ii)
the Logistic Sale, (iii) the Merger, (iv) any tax return filed by any
current or past member of Christiana's consolidated group, (v) any Tax
to which Christiana may be alleged to be liable by reason of being
affiliated with any other Person for all periods prior to the Effective
Date, (vi) property taxes with respect to the assets of Christiana or
any Christiana Company for all periods prior to the Effective Date and
(vii) any transfer taxes or value added taxes in connection with the
transactions contemplated by the Logistic Sale and the Merger.
1.14 Liability. Liability means any and all claims, demands,
liabilities, responsibilities, disputes, causes of action and
obligations of every nature whatsoever, liquidated or unliquidated,
known or unknown, matured or unmatured, or fixed or contingent.
1.15 Member. Member means each person who has been admitted to
TLC as a member as provided in the Delaware Limited Liability Company
Act (the "DLLCA") and the Operating Agreement.
1.16 Membership Units. Membership Units means the basis by
which a Member's ownership interest in TLC issued pursuant to the
Operating Agreement is measured.
1.17 Merger. Merger means the merger of Christiana
Acquisition, Inc. with and into Christiana Companies, Inc. as
contemplated by the Merger Agreement.
1.18 Merger Agreement. Merger Agreement means the Agreement
and Plan of Merger dated December 12, 1997, by and among EVI, Christiana
Acquisition, Inc., Christiana Companies, Inc. and C2, Inc.
1.19 Operating Agreement. Operating Agreement shall mean the
form of Operating Agreement attached hereto as Exhibit A.
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1.20 Person. Person means an individual, corporation, limited
liability company, partnership, governmental authority or any other
entity.
1.21 Properties. Properties means the properties currently or
previously owned or operated by Christiana or any Christiana Company.
1.22 Retained Liabilities. Retained Liabilities shall mean and
be limited solely to (i) those accounts payable relating to Christiana
that are reflected on the Effective Date balance sheet of Christiana,
(ii) those accounts payable reflected on the Effective Date balance
sheet of Christiana and agreed to by EVI prior to the Effective Date,
(iii) the obligations of Christiana that arise after the Effective Date
(other than obligations relating to matters existing or occurring on or
prior to the Effective Date and indemnification, warranty and product
liability, wrongful death or property claims associated with actions or
omissions prior to the Effective Date or any business conducted prior to
the Effective Date) and (iv) EVI Related Taxes (as defined in the Merger
Agreement).
1.23 Taxes. Taxes means all federal, state, local, foreign and
other taxes, charges, fees, duties, levies, imposts, customs or other
assessments, including, without limitation, all net income, gross
income, gross receipts, sales, use, ad valorem, transfer, franchise,
profits, profit share, license, lease, service, service use, value
added, withholding, payroll, employment, excise, estimated, severance,
stamp, occupation, premium, property, windfall profits or other taxes,
fees, assessments, customs, duties, levies, imposts, or charges of any
kind whatsoever with any interest, penalties, additions to tax, fines or
other additional amounts imposed thereon or related thereto, and the
term Tax means any one of the foregoing Taxes.
1.24 Waste Materials. Waste Material means any (i) toxic or
hazardous materials or substances; (ii) solid wastes, including
asbestos, polychlorinated biphenyls, mercury, buried contaminants,
chemicals, flammable or explosive materials; (iii) radioactive
materials; (iv) petroleum wastes and spills or releases of petroleum
products; and (v) any other chemical, pollutant, contaminant, substance
or waste that is regulated by any governmental entity under any
Environmental Law.
2. Purchase and Sale of Membership Units; Purchase Price.
2.1. Purchase and Sale of Membership Units.
(a) Effective as of the closing, Christiana shall sell, transfer,
assign, convey and deliver, and C2 shall purchase and accept, 666.667
Membership Units.
(b) CHRISTIANA MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, WITH RESPECT TO THE MEMBERSHIP UNITS OR THE ASSETS (CURRENT,
FIXED, PERSONAL, REAL, TANGIBLE OR
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INTANGIBLE) OF TLC AND ITS SUBSIDIARIES, INCLUDING, BUT NOT LIMITED TO,
CONDITION OR WORKMANSHIP THEREOF, OR THE ABSENCE OF ANY DEFECTS THEREIN,
WHETHER LATENT OR PATENT, CAPACITY, SUITABILITY, UTILITY, SALABILITY,
AVAILABILITY, COLLECTIBILITY, OPERATIONS, CONDITIONS, MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, IT BEING THE EXPRESS AGREEMENT OF C2,
TLC AND CHRISTIANA THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, C2 WILL ACQUIRE THE MEMBERSHIP UNITS AND INTEREST IN THE
ASSETS OF TLC THROUGH SUCH OWNERSHIP INTEREST IN THEIR PRESENT CONDITION
AND STATE OF REPAIR, ON AN "AS IS AND WHERE IS, WITH ALL FAULTS" BASIS.
2.2 Assumption. Effective as of the closing, as an inducement
to Sub to merge with Christiana, C2 hereby unconditionally assumes and
undertakes to pay, satisfy and discharge when due the Assumed
Liabilities. Notwithstanding the foregoing, Christiana hereby retains
and C2 will have no liability with respect to the Retained Liabilities.
In addition, effective as of the Closing, as a further inducement to Sub
to merge with Christiana, TLC hereby unconditionally assumes and
undertakes to pay, satisfy and discharge when due the Assumed
Liabilities to the extent such Assumed Liabilities relate to any of the
historical businesses, operations or assets of TLC and its subsidiaries.
The closing shall occur on or prior to the closing of the Merger.
2.3. Purchase Price. The aggregate purchase price ("Purchase
Price") for the 666.667 Membership Units shall be (i) $10,666,667,
payable on the same date that funds are paid by EVI to the Exchange
Agent (as defined in the Merger Agreement) pursuant to Section 1.8(c) of
the Merger Agreement by C2 to Christiana in the form of a certified or
cashier's check, or, at the option of Christiana, by wire transfer of
immediately available funds to an account designated by Christiana and
(ii) the assumption by C2 at the closing of the Assumed Liabilities.
2.4 ABSOLUTE ASSUMPTION. IT IS THE INTENT OF THE PARTIES THAT
THE LIABILITIES AND ENVIRONMENTAL LIABILITIES ASSUMED BY C2 AND TLC
UNDER THIS AGREEMENT SHALL BE WITHOUT REGARD TO THE CAUSE THEREOF OR THE
NEGLIGENCE OF ANY PERSON, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR
CONCURRENT, ACTIVE OR PASSIVE, AND WHETHER SUCH LIABILITY OR
ENVIRONMENTAL LIABILITY IS BASED ON STRICT LIABILITY, ABSOLUTE LIABILITY
OR ARISING AS AN OBLIGATION OF CONTRIBUTION. C2 AND TLC EACH HEREBY
WAIVES AND RELEASES FOR ITSELF AND ON BEHALF OF AFFILIATES (OTHER THAN
CHRISTIANA, EVI AND THEIR RESPECTIVE AFFILIATES) ANY CLAIMS, DEFENSES OR
CLAIMS FOR CONTRIBUTION THAT IT HAS OR MAY HAVE AGAINST CHRISTIANA, EVI
OR ANY OF THEIR RESPECTIVE AFFILIATES WITH RESPECT TO THE ASSUMED
LIABILITIES.
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3. Representations of Christiana.
3.1. Organization. Christiana is a corporation duly organized
and validly existing under the laws of the state of Wisconsin. TLC is a
limited liability company duly organized, validly existing and in good
standing under the laws of the state of Delaware.
3.2. Title. The 666.667 Membership Units being transferred
pursuant to this Agreement without any representation or warranty of any
kind, including any implied representations of the title.
4. Representations of C2 and TLC.
4.1. Organization. TLC is a limited liability company duly
organized and validly existing under the laws of the state of Delaware.
C2 is a corporation duly organized and validly existing under the laws
of the state of Wisconsin.
4.2. Corporate Power. Each of C2 and TLC has full power, legal
right and authority to enter into this Agreement, and to carry out the
transactions contemplated hereby. The execution of this Agreement, and
full performance hereunder, has been duly authorized by C2's Board of
Directors and TLC's Members.
4.3. Validity. This Agreement has been duly and validly
executed and delivered by C2 and TLC and is the legal, valid and binding
obligation of each of C2 and TLC, enforceable in accordance with its
terms.
5. Operating Agreement; Put and Participation Rights.
5.1 Operating Agreement. At the Closing, C2 and Christiana
shall enter into the Operating Agreement.
5.2 Put. At any time after the fifth anniversary date of the
Effective Date, Christiana shall have the option (but shall not be
required) to sell to C2 or TLC, at Christiana's option, and C2 and TLC,
as applicable, shall be required to purchase, all (but not less than
all) of Christiana's Membership Units for a price equal to $7 million.
To exercise this option, Christiana shall provide notice in writing to
C2 or TLC, as applicable, of such election. The closing of any purchase
pursuant to this Section 5.2 shall occur within 60 days of notice to C2
or TLC, as applicable. The price required to be paid by C2 or TLC, as
applicable pursuant to this Section 5.2 shall be paid in cash. The
rights contained in this Section 5.2 shall expire on the date one year
after the fifth anniversary of the Effective Date.
5.3 Participation Rights. If there is a proposed
merger, consolidation or share exchange involving C2 or TLC or if C2
shall propose to transfer or sell all its interest in TLC to an
unrelated third party (a "Third Party") in one or more transactions,
Christiana shall have the right to
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<PAGE> 10
participate (a "Tag Along Right") in such sale with respect to the
Membership Units held by it for the same equivalent consideration per
equivalent unit in TLC and otherwise on the same terms as such member
sells or transfers their interests in C2. If circumstances occur which
give rise to the Tag Along Right, then C2 shall give written notice
("Tag Along Notice") to Christiana providing a summary of the terms of
the proposed sale to the Third Party and advising Christiana of its Tag
Along Right. Christiana may exercise its Tag Along Right by delivery of
written notice to C2 within fifteen (15) days of its receipt of the Tag
Along Right. If Christiana gives written notice indicating that it
wishes to sell, it shall be obligated to sell its Membership Units upon
the substantially same terms and conditions as the members of C2 are
selling to the Third Party conditioned upon and contemporaneous with
completion of the transaction of purchase and sale with the Third Party.
6. Indemnification.
6.1 Indemnification Matters.
(a) Indemnification. Each of C2 and TLC, jointly and
severally, hereby agree to indemnify, defend and hold Christiana, EVI
and their respective officers, directors, employees, agents and assigns
(collectively, the "EVI Indemnified Parties") harmless from and against
any and all Liabilities or Environmental Liabilities (including, without
limitation, reasonable fees and expenses of attorneys, accountants,
consultants and experts) that the EVI Indemnified Parties incur, are
subject to a claim for, or are subject to, that are based upon, arising
out of, relating to or otherwise in respect of:
(i) Any breach of any covenant or agreement of C2 or TLC
contained in this Agreement or in any other agreement
contemplated hereby;
(ii) The acts or omissions of Christiana or any Christiana
Company on or before the Effective Date;
(iii) The acts or omissions of TLC, any Christiana Company or
any of its Affiliates (other than Christiana or EVI) or
the conduct of any business by them on or after the
Effective Date (it being understood that this
indemnification shall not apply to acts or omissions by
Christiana or EVI after the Effective Date);
(iv) The Assumed Liabilities;
(v) Any and all amounts for which Christiana or EVI may be
liable on account of any claims, administrative charges,
self-insured retentions, deductibles, retrospective
premiums or fronting provisions in insurance policies,
including as the result of any uninsured period, insolvent
insurance carriers or exhausted policies, arising from
claims by Christiana or any Christiana Company, or the
employees of any of the foregoing, or claims by
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insurance carriers of Christiana or any Christiana Company
for indemnity arising from or out of claims by or against
Christiana or any Christiana Company for acts or omissions
of Christiana or any Christiana Company, or related to any
current or past business of Christiana or any Christiana
Company or any product or service provided by Christiana
or any Christiana Company in whole or part prior to the
Effective Date;
(vi) Any settlements or judgments in any litigation commenced
by one or more insurance carriers against Christiana or
EVI on account of claims by any Christiana Company or
employees of any Christiana Company and, if filed prior to
the Effective Date, by Christiana or any employee of
Christiana;
(vii) Any Taxes (other than EVI Related Taxes) as a result of
the Logistic Sale and any Taxes as a result of the Merger
subsequently being determined to be a taxable transaction
for foreign, federal, state or local law purposes
regardless of the theory or reason for the transactions
being subject to Tax;
(viii) The on-site or off-site handling, storage, treatment or
disposal of any Waste Materials generated by Christiana or
any Christiana Company on or prior to the Effective Date
or any Christiana Company at any time;
(ix) Any COBRA Liability with respect to any employees of
Christiana or any Christiana Company prior to the Closing;
(x) Any and all Environmental Conditions, known or unknown,
existing on, at or underlying any of the Properties on or
prior to the Effective Date;
(xi) Any and all Liabilities incurred by Christiana or EVI
pursuant to its obligations hereunder in seeking to obtain
or obtaining any consent or approval to assign and
transfer any interest in TLC;
(xii) Any acts or omissions of Christiana or any Christiana
Company relating to the ownership or operation of the
business of Christiana or any Christiana Company or the
Properties on or prior to the Effective Date;
(xiii) Any Liability relating to any claim or demand by any
stockholder of Christiana or EVI with respect to the
Merger, the Logistic Sale or the transactions relating
thereto; and
(xiv) Any Liability relating to any Christiana or any Christiana
Company employee benefit or welfare plans arising out of
circumstances occurring on or prior to the Effective Date.
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(b) Allocation of Liability Payment Obligations. To the
extent a Liability exists or a claim for indemnification is made by an
EVI Indemnified Party hereunder, such Liability shall be paid and such
claim shall be defended and paid as follows:
(i) If the Liability or claim relates primarily to the
historic assets, liability operations of business TLC
(excluding [describe non TLC historic subs] (the "TLC
Historic Business"), TLC shall, as between C2 and TLC, be
primarily responsible for the payment of such Liability
and the defense and payment of such claim. If TLC does
not defend or pay such claim, C2 shall be responsible for
the defense and payment of such claim.
(ii) If the Liability or claim relates primarily to a matter
other than the TLC Historic Business, C2 shall, as between
C2 and TLC and subject to the provisions of clause (iii)
below, be primarily responsible for the payment of such
Liability and the defense and payment of such claim. If
C2 does not defend or pay such claim, TLC shall be
responsible for the defense and payment of such claim.
(iii) If the Liability or claim relates primarily to a matter
other than the TLC Historic Business, the costs of defense
and payment of the Liability shall be paid by EVI to the
extent and only to the extent of the Christiana Retained
Cash (as defined in the Merger Agreement); provided that
once such Christiana Retained Cash is paid pursuant to the
Merger Agreement, EVI shall have no obligation to pay such
amounts. Any such payments shall be subject to EVI being
provided with reasonable documentation regarding the
payment obligations.
(iv) If TLC pays any amounts relating to an Assumed Liability
or an indemnification claim hereunder, Christiana shall be
entitled to receive a cash payment equal to one-third of
any such amount paid when and if (i) TLC or all or
substantially all of its assets are sold, (ii) there is a
sale of Membership Units by C2 or (iii) there is a direct
or indirect transfer or sale of the membership units of
TLC held by C2 or of the membership units of C2. The
obligation to pay such amounts shall be payable by C2.
(v) To secure the obligations of C2 hereunder, C2 shall pledge
to Christiana all of C2's interest in TLC, including all
rights to distributions in respect thereof, pursuant to a
pledge agreement in such form and having such terms as
Christiana may reasonably request.
(vi) Notwithstanding the foregoing, nothing contained in this
Agreement shall be construed to be an assumption of any
obligation
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<PAGE> 13
or responsibility by EVI of any Assumed Liabilities and
its obligations hereunder shall be personal to TLC and C2
to the extent and only to the extent EVI has agreed to
fund the payment of indemnity claims by it with the
Christiana Retained Cash as expressly provided herein. No
third party shall be deemed to have any rights against EVI
as result of this Agreement.
(c) Absolute Indemnity. NONE OF THE EVI INDEMNIFIED PARTIES
WILL BE OBLIGATED TO INSTITUTE ANY LEGAL PROCEEDINGS IN
CONNECTION WITH THE COLLECTION OR PURSUIT OF ANY INSURANCE IN
ORDER TO EXERCISE AN INDEMNIFICATION REMEDY UNDER THIS SECTION
VI. UNLESS OTHERWISE SPECIFICALLY EXPRESSED, THIS INDEMNITY
OBLIGATION SHALL APPLY WITHOUT REGARD TO WHETHER THE LIABILITY OR
ENVIRONMENTAL LIABILITY WAS CAUSED BY THE ORDINARY OR GROSS
NEGLIGENCE OF ANY OF THE EVI INDEMNIFIED PARTIES (WHETHER SUCH
NEGLIGENCE BE SOLE, JOINT OR CONCURRENT OR ACTIVE OR PASSIVE), OR
WHETHER THE LIABILITY OR ENVIRONMENTAL LIABILITY IS BASED ON
STRICT LIABILITY, ABSOLUTE LIABILITY OR ARISES AS AN OBLIGATION
OF CONTRIBUTION OR INDEMNITY. EACH OF C2 AND TLC ACKNOWLEDGES
THAT IT IS AWARE OF VARIOUS THEORIES KNOWN AS THE "EXPRESS
NEGLIGENCE" DOCTRINE AND OTHER SIMILAR DOCTRINES AND THEORIES
THAT MAY LIMIT INDEMNIFICATION AND AGREES AND STIPULATES THAT THE
PROVISIONS OF THIS AGREEMENT REFLECT THE EXPRESS INTENT OF THE
PARTIES THAT THE INDEMNIFICATION TO BE PROVIDED BY TLC AND C2
APPLY NOTWITHSTANDING THE FACT THAT THE LIABILITY OR
ENVIRONMENTAL LIABILITY (I) MAY NOT CURRENTLY BE KNOWN BY IT OR
MANIFEST ITSELF IN ANY REGARD, (II) MAY ARISE UNDER A STATUTE OR
THEORY THAT MAY NOT CURRENTLY EXIST OR BE KNOWN TO TLC, (III) MAY
ARISE AS A RESULT OF A NEGLIGENT ACT OR OMISSION BY ANY OF THE
EVI INDEMNIFIED PARTIES (WHETHER SUCH CONDUCT BE SOLE, JOINT OR
CONCURRENT OR ACTIVE OR PASSIVE) OR (IV) MAY CONSTITUTE A
VIOLATION OF ANY APPLICABLE CIVIL OR CRIMINAL LAW OR REGULATION.
6.2 Notice of Circumstance. After receipt by an EVI
Indemnified Party of notice, or an EVI Indemnified Party's actual
discovery, of any action, proceeding, claim, demand or potential claim
which could give rise to a right to indemnification pursuant to any
provision of this Agreement (any of which is individually referred to a
as a "Circumstance"), the EVI Indemnified Party shall give TLC and C2
(collectively the "TLC Parties") written notice describing the
Circumstances in reasonable detail; provided, however, that no delay by
an EVI Indemnified Party in notifying the TLC Parties shall relieve the
TLC Parties from any Liability or Environmental Liability hereunder
unless (and then solely to the extent) the TLC Parties' position is
actually adversely prejudiced. In the
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event the TLC Parties notifies the EVI Indemnified Party within 15 days
after such notice that the TLC Parties is assuming the defense thereof,
(i) the TLC Parties will defend the EVI Indemnified Parties against the
Circumstances with counsel of its choice, provided such counsel is
reasonably satisfactory to EVI, (ii) the EVI Indemnified Parties may
retain separate co-counsel at its or their sole cost or expense (except
that the TLC Parties will be responsible for the fees and expenses for
the separate co-counsel to the extent EVI concludes reasonably that the
counsel the TLC Parties has selected has a conflict of interest), (iii)
the EVI Indemnified Parties will not consent to the entry of any
judgment or enter into any settlement with respect to the Circumstances
without the written consent of the TLC Parties, and (iv) the TLC Parties
will not consent to the entry of any judgment with respect to the
Circumstances, or enter into any settlement which (x) requires any
payments by or continuing obligations of an EVI Indemnified Party, (y)
requires an EVI Indemnified Party to admit any facts or liability that
could reasonably be expected to adversely affect an EVI Indemnified
Party in any other matter or (z) does not include a provision whereby
the plaintiff or claimant in the matter released the EVI Indemnified
Parties from all Liability with respect thereto, without the written
consent of EVI. In the event the TLC Parties does not notify EVI within
15 days after EVI has given notice of the Circumstance that the TLC
Parties is assuming the defense thereof, the EVI Indemnified Parties may
defend against, or enter into any settlement with respect to, the
Circumstance in any manner the EVI Indemnified Parties reasonably may
deem appropriate, at the TLC Parties' sole cost. The foregoing
provisions shall be subject to the provisions of Section 6.1(b).
6.3 Insurance. the TLC Parties shall not be obligated to
indemnify the EVI Indemnified Parties for amounts which shall have been
covered and paid by insurance of the EVI Indemnified Parties, provided,
however, insurance shall not include deductibles or self-insured
retentions.
6.4 Scope of Indemnification. INDEMNIFICATION UNDER THIS
SECTION VI SHALL BE IN ADDITION TO ANY REMEDIES CHRISTIANA, EVI OR ANY
EVI INDEMNIFIED PARTY MAY HAVE AT LAW OR EQUITY. THERE SHALL BE NO TIME
LIMIT AS TO C2'S OF TLC'S INDEMNIFICATION OBLIGATIONS HEREUNDER.
6.5 Indemnity for Certain Environmental Liabilities. It is
the intention of the parties that the indemnity provided herein with
respect to Environmental Liabilities under CERCLA and corresponding
provisions of state law is an agreement expressly not barred by 42
U.S.C. Section 9607(e)(i) and corresponding provisions of state law.
6.6 C2 and TLC Covenants. To assure the performance of the
obligations of C2 and TLC under this Agreement, C2 and TLC each hereby
covenants and agrees that it will not, and will cause its subsidiaries
to not, merge, convert into another entity, engage in a share or
interest exchange for a majority of its units or shares, liquidate or
transfer, assign or otherwise convey or allocate, directly or
indirectly, in one or more transactions, whether or not
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<PAGE> 15
related, a majority of C2's or TLC's assets (determined in good faith by
a board or similar managing body's resolution prior to the transaction
on a fair value and consolidated basis) to any Person unless the
acquiring Person expressly assumes the obligations of C2 or TLC, as the
case may be, hereunder, (ii) executes and delivers to Christiana and EVI
an agreement agreeing to be bound by each and every provision of this
Agreement as if it were C2 or TLC, as the case may be,and (iii) has a
net worth on a pro forma basis after giving effect to the acquisition or
business combination equal to or greater than that of C2 or TLC, as the
case may be, on a consolidated basis.
7. Miscellaneous.
7.1. Waiver and Amendment. Any provision of this Agreement may
be waived at any time by the party that is entitled to the benefits
thereof. This Agreement may not be amended or supplemented at any time,
except by an instrument in writing signed on behalf of each party
hereto, provided that this Agreement may be amended only as may be
permitted by the laws that govern EVI, TLC, Christiana and C2. The
waiver by any party hereto of any condition or of a breach of another
provision of this Agreement shall not operate or be construed as a
waiver of any other condition or subsequent breach. The waiver by any
party hereto of any of the conditions precedent to its obligations under
this Agreement shall not preclude it from seeking redress for breach of
this Agreement other than with respect to the condition so waived.
7.2 Arbitration. Any disputes, claims or controversies
connected with, arising out of, or related to, this Agreement and the
rights and obligations created herein, or the breach, validity,
existence or termination hereof, shall be settled by Arbitration to be
conducted in accordance with the Commercial Rules of Arbitration of the
American Arbitration Association, except as such Commercial Rules may be
changed by this Section 7.2. The disputes, claims or controversies
shall be decided by three independent arbitrators (that is, arbitrators
having no substantial economic or other material relationship with the
parties), one to be appointed by TLC and C2 and one to be appointed by
EVI within fourteen days following the submission of the claim to the
parties hereto and the third to be appointed by the two so appointed
within five days. Should either party refuse or neglect to join in the
timely appointment of the arbitrators, the other party shall be entitled
to select both arbitrators. Should the two arbitrators fail timely to
appoint a third arbitrator, either party may apply to the Chief Judge of
the United States District Court for the Southern District of Texas to
make such appointment. The arbitrators shall have ninety days after the
selection of the third arbitrator within which to allow discovery, hear
evidence and issue their decision or award and shall in good faith
attempt to comply with such time limits; provided, however, if two of
the three arbitrators believe additional time is necessary to reach a
decision, they may notify the parties and extend the time to reach a
decision in thirty day increments, but in no event to exceed an
additional ninety days. Discovery of evidence shall be conducted
expeditiously by the Parties, bearing in mind the parties desire to
limit discovery and to expedite the decision or award of the
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<PAGE> 16
arbitrators at the most reasonable cost and expense of the parties.
Judgment upon an award rendered pursuant to such Arbitration may be
entered in any court having jurisdiction, or application may be made to
such court for a judicial acceptance of the award, and an order of
enforcement, as the case may be. The place of Arbitration shall be
Houston, Texas. The decision of the arbitrators, or a majority thereof,
made in writing, shall be final and binding upon the parties hereto as
to the questions submitted, and each party shall abide by such decision.
Notwithstanding the provisions of this Section 7.2, neither party shall
be prohibited from seeking injunctive relief pending the completion of
any arbitration. The costs and expenses of the arbitration proceeding,
including the fees of the arbitrators and all costs and expenses,
including legal fees and witness fees, incurred by the prevailing party,
shall be borne by the losing party.
Solely for purposes of injunctive relief, orders in aid of arbitration
and entry of the arbitrator's award:
(a) each of the parties hereto irrevocably consents to the
non-exclusive jurisdiction of, and venue in, any state court located in
Harris County, Texas or any federal court sitting in the Southern
District of Texas in any suit, action or proceeding seeking injunctive
relief, arising out of or relating to this Agreement or any of the other
agreements contemplated hereby and any other court in which a matter
that may result in a claim for indemnification hereunder by an EVI
Indemnified Party may be brought with respect to any claim for
indemnification by an EVI Indemnified Party;
(b) each of the parties hereto waives, to the fullest extent
permitted by law, any objection that it may now or hereafter have to the
laying of venue of any suit, action or proceeding seeking injunctive
relief, orders in aid of arbitration or entry of an arbitration arising
out of or relating to this Agreement or any of the other agreements
contemplated hereby brought in any state court located in Harris County,
Texas or any federal court sitting in the Southern District of Texas or
any other court in which a matter that may result in a claim for
indemnification hereunder by an EVI Indemnified Party may be brought
with respect to any claim for indemnification by an EVI Indemnified
Party, and further irrevocably waive any claim that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum; and
(c) each of the parties hereto irrevocably designates,
appoints and empowers CT Corporation System, Inc. and any successor
thereto as its designee, appointee and agent to receive, accept and
acknowledge for and on its behalf, and in respect of its property,
service of any and all legal process, summons, notices and documents
which may be served in any suit, action or proceeding arising out of or
relating to this Agreement or any of the other agreements contemplated
hereby.
7.3. Assignment. This Agreement shall inure to the benefit of
and will be binding upon the parties hereto and their respective legal
representatives, successors and permitted assigns. Nothing in this
Agreement, express or
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implied, is intended to or shall confer upon any person other than TLC,
C2, Christiana, EVI, and the EVI Indemnified Parties any rights,
benefits or remedies of any nature whatsoever under or by reason of this
Agreement.
7.4. Notices. All notices, requests, demands, claims and other
communications which are required to be or may be given under this
Agreement shall be in writing and shall be deemed to have been duly
given if (i) delivered in Person or by courier, (ii) sent by telecopy or
facsimile transmission, answer back requested, or (iii) mailed,
certified first class mail, postage prepaid, return receipt requested,
to the parties hereto at the following addresses:
if to EVI:
EVI, Inc.
5 Post Oak Park, Suite 1760
Houston, Texas 77027
Attn: Bernard J. Duroc-Danner
Facsimile: (713) 297-8488
with a copy to:
Fulbright & Jaworski, L.L.P.
1301 McKinney, Suite 5100
Houston, Texas 77010-3095
Attn: Curtis W. Huff
Facsimile: (713) 651-5246
if to TLC:
Total Logistic Control, LLC
700 N. Water Street
Suite 1200
Milwaukee, Wisconsin 53202
Attn: William T. Donovan
Facsimile: (414) 291-9061
with a copy to:
Foley & Lardner
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attn: Joseph B. Tyson, Jr.
Facsimile: (414) 297-4900
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if to Christiana:
5 Post Oak Park, Suite 1760
Houston, Texas 77027
Attn: James G. Kiley
Facsimile: (713) 297-8488
with a copy to:
Fulbright & Jaworski, L.L.P.
1301 McKinney, Suite 5100
Houston, Texas 77010-3095
Attn: Curtis W. Huff
Facsimile: (713) 651-5246
if to C2:
700 N. Water Street
Suite 1200
Milwaukee, Wisconsin 53202
Attn: William T. Donovan
Facsimile: (414) 291-9061
with a copy to:
Foley & Lardner
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attn: Joseph B. Tyson, Jr.
Facsimile: (414) 297-4900
or to such other address as any party shall have furnished to the other
by notice given in accordance with this Section 7.4. Such notices shall
be effective, (i) if delivered in Person or by courier, upon actual
receipt by the intended recipient, (ii) if sent by telecopy or facsimile
transmission, when the answer back is received, or (iii) if mailed, upon
the earlier of five days after deposit in the mail and the date of
delivery as shown by the return receipt therefor.
7.5. Governing Law. All questions arising out of this
Agreement and the rights and obligations created herein, or its
validity, existence, interpretation, performance or breach shall by
governed by the laws of the State of Texas without regard to conflict of
laws principles.
7.6. Severability. If any provision of this Agreement is held
to be unenforceable, this Agreement shall be considered divisible and
such provision shall be deemed inoperative to the extent it is deemed
unenforceable, and in all other respects this Agreement shall remain in
full force and effect; provided, however, that if any such provision may
be made enforceable by limitation
-17-
<PAGE> 19
thereof, then such provision shall be deemed to be so limited and shall
be enforceable to the maximum extent permitted by applicable law.
7.7. Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original, but all of which
together shall constitute one and the same agreement.
7.8. Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.
7.9. Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all other prior agreements and understandings,
both oral and written, among the parties or any of them, with respect to
the subject matter hereof.
-18-
<PAGE> 20
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
EVI, INC.
("EVI")
By: /s/ Bernard J. Duroc-Danner
---------------------------------
Title: President
-------------------------------
TOTAL LOGISTIC CONTROL, LLC
("TLC")
By: /s/ William T. Donovan
---------------------------------
Title: President
------------------------------
CHRISTIANA COMPANIES, INC.
("Christiana")
By: /s/ William T. Donovan
---------------------------------
Title: President
-------------------------------
C2, INC.
("C2")
By: /s/ William T. Donovan
---------------------------------
Title: President
------------------------------
-19-
<PAGE> 21
As permitted by Item 601(b)(2) of Regulation S-K, the Company has not
filed any exhibits with this Exhibit No. 2.2. Listed below is a brief
description of the omitted exhibit. The Company agrees to furnish
supplementally a copy of the omitted exhibit to the Commission upon request.
Exhibit
A Operating Agreement of Logistic
<PAGE> 1
EXHIBIT 2.3
<PAGE> 2
Agreement
This letter agreement sets forth the agreement between and among EVI,
Inc., a Delaware corporation ("EVI"), Christiana Acquisition, Inc., a Wisconsin
corporation ("Sub"), Christiana Companies, Inc., a Wisconsin corporation
("Christiana"), and C2, Inc., a Wisconsin corporation ("C2"), with respect to
various matters contemplated by the Agreement and Plan of Merger by and among
Christiana, EVI, Sub and C2, dated December 12, 1997 (the "Merger Agreement').
In connection with such matters, the parties hereto agree as follows:
1. The parties agree that under Section 6.2(n) of the Merger
Agreement, EVI will have no obligation to close the transactions contemplated
by the Merger Agreement if there is pending any litigation involving Christiana
or any of its subsidiaries that EVI, in its sole discretion, considers to be a
material liability for which adequate security has not been provided. Section
2.2(g) of the Disclosure Schedule to the Merger Agreement describes in Item 5
thereof a certain class action suit pending in California. EVI and Christiana
agree that this item of litigation is material for purposes of Section 6.2(n)
of the Merger Agreement and that EVI will have no obligation whatsoever to
close the transactions contemplated by the Merger Agreement unless the
referenced settlement with respect to this litigation has been approved by the
court and made effective, all members of the class are found to be bound by the
settlement and the court approved settlement is not subject to any further
appeal or review.
2. It is anticipated that at the time of the closing of the Merger
(as defined in the Merger Agreement), Christiana will have various cash on
hand. EVI has advised Christiana and C2 that for a period of one year such
funds would only be advanced to EVI through a loan and not as a distribution.
EVI further agrees that any such loan would not be repaid by it for a period of
one year following the closing of the Merger without the prior consent of C2
unless EVI agrees that during such time it would not pay a distribution from
Christiana to EVI.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
dated as of the 12th day of December, 1997.
EVI, INC.
By: /s/ Bernard J. Duroc-Danner
---------------------------------
Name: Bernard J. Duroc-Danner
-------------------------------
Title: President
------------------------------
<PAGE> 3
CHRISTIANA ACQUISITION, INC.
By: /s/ Bernard J. Duroc-Danner
---------------------------------
Name: Bernard J. Duroc-Danner
-------------------------------
Title: President
------------------------------
CHRISTIANA COMPANIES, INC.
By: /s/ William T. Donovan
---------------------------------
Name: William T. Donovan
Title: President
C2, INC.
By: William T. Donovan
---------------------------------
Name: William T. Donovan
Title: President
<PAGE> 1
EXHIBIT 2.4
<PAGE> 2
================================================================================
AMENDED AND RESTATED
ARRANGEMENT AGREEMENT
BY AND BETWEEN
TARO INDUSTRIES LIMITED,
AND
EVI, INC.
AND
756745 ALBERTA LTD.
AND
759572 ALBERTA LTD.
DECEMBER 5, 1997
================================================================================
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE I
INTERPRETATION
1.1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 EXHIBIT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II
THE ARRANGEMENT
2.1 TARO OPTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 AMALGAMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3 COURT APPROVAL. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.4 CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.5 CONSUMMATION OF THE ARRANGEMENT. . . . . . . . . . . . . . . . . . 6
2.6 EFFECTS OF THE ARRANGEMENT. . . . . . . . . . . . . . . . . . . . . 6
2.7 BYLAWS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.8 DIRECTORS AND OFFICERS. . . . . . . . . . . . . . . . . . . . . . . 6
2.9 CONVERSION OF SECURITIES . . . . . . . . . . . . . . . . . . . . . 6
2.10 TAKING OF NECESSARY ACTION; FURTHER ACTION . . . . . . . . . . . . 7
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF EVI AND TAL. . . . . . . . . . . 7
(a) Organization and Compliance with Law. . . . . . . . . . . . 7
(b) Capitalization . . . . . . . . . . . . . . . . . . . . . . 8
(c) Authorization and Validity of Agreement. . . . . . . . . 8
(d) No Approvals or Notices Required; No Conflict . . . . . . . 8
(e) Voting Requirements. . . . . . . . . . . . . . . . . . . . 9
(f) Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(g) Information Supplied . . . . . . . . . . . . . . . . . . . 9
(h) Authorization for EVI Common Stock . . . . . . . . . . . . 9
(i) SEC Documents . . . . . . . . . . . . . . . . . . . . . . . 9
(j) Conduct of Business in the Ordinary Course; Absence of
Certain Changes and Events. . . . . . . . . . . . . . . . . 9
3.2 REPRESENTATIONS AND WARRANTIES OF TARO. . . . . . . . . . . . . . . 9
(a) Organization. . . . . . . . . . . . . . . . . . . . . . . . 9
(b) Capitalization. . . . . . . . . . . . . . . . . . . . . . . 10
(c) Authorization and Validity of Agreement. . . . . . . . . . 11
(d) No Approvals or Notices Required; No Conflict
with Instruments to which Taro is a Party . . . . . . . . . 11
(e) Commission Filings; Financial Statements. . . . . . . . . . 12
(f) Conduct of Business in the Ordinary Course; Absence
of Certain Changes and Events . . . . . . . . . . . . . . . 12
(g) Litigation . . . . . . . . . . . . . . . . . . . . . . . . 13
(h) Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . 13
(i) Employee Benefit Plans. . . . . . . . . . . . . . . . . . . 13
(j) Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
</TABLE>
<PAGE> 4
<TABLE>
<S> <C> <C>
(k) Environmental Matters. . . . . . . . . . . . . . . . . . . 15
(l) Severance Payments. . . . . . . . . . . . . . . . . . . . . 16
(m) Shareholder and Similar Agreements . . . . . . . . . . . . 16
(n) Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(o) Compliance with Laws . . . . . . . . . . . . . . . . . . . 16
(p) Contracts . . . . . . . . . . . . . . . . . . . . . . . . . 17
(q) Title to Property . . . . . . . . . . . . . . . . . . . . . 18
(r) Intellectual Property . . . . . . . . . . . . . . . . . . . 18
(s) Insurance Policies . . . . . . . . . . . . . . . . . . . . 18
(t) Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(u) No Fraudulent Transfer . . . . . . . . . . . . . . . . . . 19
(v) Information Supplied . . . . . . . . . . . . . . . . . . . 19
(w) Sales into the United States . . . . . . . . . . . . . . . 19
ARTICLE IV
COVENANTS OF TARO
4.1 CONDUCT OF BUSINESS BY TARO PENDING THE ARRANGEMENT. . . . . . . . 20
4.2 SUBSIDIARY DISSOLUTION . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 COOPERATION; CONSENTS AND APPROVALS . . . . . . . . . . . . . . . . 22
5.2 DEPOSITARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.3 FILINGS; CONSENTS; REASONABLE EFFORTS. . . . . . . . . . . . . . . 23
5.4 NOTIFICATION OF CERTAIN MATTERS. . . . . . . . . . . . . . . . . . 23
5.5 EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.6 TARO OPTION PLAN. . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.7 NO SOLICITATIONS . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.8 BETTER OFFERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.9 MUTUAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.10 DEPOSIT OF EVI STOCK . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE VI
CONDITIONS
6.1 CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE ARRANGEMENT. . 25
6.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF EVI AND TAL. . . . . . . . 25
6.3 ADDITIONAL CONDITIONS TO OBLIGATIONS OF TARO. . . . . . . . . . . . 26
</TABLE>
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<PAGE> 5
<TABLE>
<S> <C> <C>
ARTICLE VII
MISCELLANEOUS
7.1 TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.2 EFFECT OF TERMINATION . . . . . . . . . . . . . . . . . . . . . . . 29
7.3 FEE AND EXPENSE REIMBURSEMENTS . . . . . . . . . . . . . . . . . . 29
7.4 WAIVER AND AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . 29
7.5 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . 29
7.6 PUBLIC STATEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . 30
7.7 ASSIGNMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.8 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.9 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.10 SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.11 COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.12 ENTIRE AGREEMENT: THIRD PARTY BENEFICIARIES. . . . . . . . . . . . 31
7.13 DISCLOSURE LETTERS. . . . . . . . . . . . . . . . . . . . . . . . . 31
7.14 CURRENCY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.15 NUMBER AND GENDER. . . . . . . . . . . . . . . . . . . . . . . . . 32
7.16 DIVISIONS, HEADINGS, ETC.. . . . . . . . . . . . . . . . . . . . . 32
7.17 DATE OF ANY ACTION. . . . . . . . . . . . . . . . . . . . . . . . . 32
</TABLE>
LIST OF EXHIBITS
Exhibit 1 -- Plan of Arrangement
-iii-
<PAGE> 6
AMENDED AND RESTATED ARRANGEMENT AGREEMENT
THIS AMENDED AND RESTATED ARRANGEMENT AGREEMENT dated as of November
19, 1997 and amended and restated as of December 5, 1997 (this "Agreement"), is
made and entered into by and between EVI, INC., a Delaware corporation ("EVI"),
756745 ALBERTA LTD., ("TAL") an Alberta corporation and wholly owned subsidiary
of EVI, 759572 ALBERTA LTD. ("759572"), an Alberta corporation, and TARO
INDUSTRIES LIMITED, an Alberta corporation ("Taro").
WHEREAS, subject to and in accordance with the terms and conditions of
this Agreement, the respective Boards of Directors of EVI, TAL, 759572 and
Taro, and EVI as sole shareholder of TAL, have approved, as applicable, (i) the
change to the Taro Option Plan (as defined herein), whereby upon the exercise
of Taro Options (as defined herein), shares of EVI Common Stock (as defined
herein) will be issued in lieu of Taro Common Shares (as defined herein), (ii)
the exchange of each issued and outstanding Taro Common Share held by
Non-Residents of Canada (as defined herein) for 0.123 of a share of EVI Common
Stock, (iii) the amalgamation of TAL with 759572 and Taro, whereby each issued
and outstanding Taro Common Share held other than by 759572 and EVI will be
converted into one New Taro Class B Common Share (as defined herein), the
issued and outstanding 759572 Common Shares (as defined herein) will be
converted into that number of New Taro Class B Common Shares equal to the
number of Taro Common Shares held by 759572, each issued and outstanding Taro
Common Share held by EVI will be converted into one New Taro Class A Common
Share (as defined herein) and each issued and outstanding TAL Common Share will
be converted into one New Taro Class A Common Share (as defined herein) and
(iv) the exchange of each issued and outstanding New Taro Class B Common Share
for 0.123 of a share of EVI Common Stock (as defined herein);
WHEREAS, in furtherance of the Arrangement, the Board of Directors of
Taro has agreed to submit the Plan of Arrangement in the form of Exhibit 1
hereto and the other transactions contemplated by this Agreement to its
shareholders and the Court (as defined herein) for approval; and
WHEREAS, the parties hereto desire to set forth certain
representations, warranties and covenants made by each to the other as an
inducement to the consummation of the Arrangement;
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties and covenants herein contained, the parties hereto
hereby agree as follows:
ARTICLE I
INTERPRETATION
1.1 DEFINITIONS. In this Agreement, unless the context otherwise
requires, the following terms shall have the respective meanings set forth
below:
"ABCA" means the Business Corporations Act (Alberta), S.A. 1981, C. B-15, as
amended from time to time, including the regulations promulgated thereunder;
"ACQUISITION PROPOSAL" has the meaning set forth in Section 5.7;
-1-
<PAGE> 7
"AFFILIATE" with respect to any Person, means any Person that directly or
indirectly controls, is controlled by or is under common control with such
Person;
"ARRANGEMENT" means the arrangement under section 186 of the ABCA on the terms
and subject to the conditions set forth in the Plan of Arrangement;
"ARTICLES OF ARRANGEMENT" means the articles of arrangement in respect of the
Arrangement required by the ABCA to be sent to the Registrar after the Final
Order is made;
"BENEFIT PROGRAM OR AGREEMENT" means any stock option plan, collective
bargaining agreement, bonus plan or arrangement, incentive award plan or
arrangement, pension plan, vacation policy, severance pay plan, policy or
agreement, deferred compensation agreement or arrangement, executive
compensation or supplemental income arrangement, consulting agreement,
employment agreement and each other employee benefit plan, agreement,
arrangement, program, practice or understanding to which Taro or any Taro
Subsidiary is a party or has any obligation;
"BUSINESS DAY" means, with respect to any action to be taken, any day other
than Saturday, Sunday or a statutory holiday in the place where such action is
to be taken;
"CERTIFICATE" means the certificate of amalgamation giving effect to the
amalgamation effected by the Arrangement, issued pursuant to subsection 186(11)
of the ABCA after the Articles of Arrangement have been filed;
"CLOSING" means the closing of the transactions contemplated by this Agreement
on the Effective Date;
"COMMISSIONS" means the Alberta and Ontario Securities Commissions;
"COURT" means the Court of Queen's Bench of Alberta;
"DEMANDS" means any claims, actions, suits, investigations, inquiries or
proceedings;
"DEPOSITARY" means Montreal Trust Company of Canada at its offices located at
600, 530 - 8th Avenue S.W., Calgary, Alberta T2P 358;
"EFFECTIVE DATE" means the date shown on the Certificate issued by the
Registrar, or if no certificate is required to be issued, on the date the
Articles of Arrangement are filed with the Registrar;
"ENVIRONMENTAL LAWS" means any and all laws, statutes, ordinances, rules,
regulations, orders or determinations of any Governmental Entity pertaining to
health or the environment currently in effect in any and all jurisdictions in
which the party in question and its subsidiaries own property or conduct
business;
"EVI ARTICLES" means EVI's Restated Certificate of Incorporation, as amended;
"EVI COMMON STOCK" means the common stock, $1.00 par value, of EVI;
"EVI PREFERRED STOCK" means the preferred stock, $1.00 par value, of EVI;
"FINAL ORDER" means the final order of the Court approving the Arrangement to
be applied for following the Taro Shareholders Meeting pursuant to section
186(9) of the ABCA;
-2-
<PAGE> 8
"GOVERNMENTAL ENTITY" means any court, administrative agency or commission or
other governmental authority or agency, domestic or foreign, including local
authorities, and any arbitration board or panel;
"GST" means any and all taxes payable under Part IX of the Excise Tax Act
(Canada) as amended from time to time and any regulations promulgated
thereunder;
"INTERIM ORDER" means the interim order of the Court made in connection with
the approval of the Arrangement;
"LIEN" means any lien, mortgage, pledge, security interest, restriction on
transfer, option, charge, right of any third Person or any other encumbrance of
any nature;
"NEW TARO" means Taro Industries Limited, the corporation that will result from
the amalgamation of TAL, 759572 and Taro pursuant to the Plan of Arrangement;
"NEW TARO CLASS A COMMON SHARES" means the Class A common shares in the capital
of New Taro;
"NEW TARO CLASS B COMMON SHARES" means the Class B common shares in the capital
of New Taro;
"NON-RESIDENTS OF CANADA" means Persons who are non-residents of Canada for
purposes of the Income Tax Act (Canada);
"OTHER AGREEMENTS" means, other than this Agreement, the agreements and
instruments contemplated to be executed and delivered in connection with the
Arrangement;
"PERMITTED LIENS" means (A) Liens for taxes not due and payable and (B)
inchoate mechanics', warehousemen's and other statutory Liens incurred in the
ordinary course of business;
"PERSON" means an individual, corporation, limited liability company,
partnership, Governmental Entity or any other entity;
"PLAN OF ARRANGEMENT" means the plan of arrangement, which is attached as
Exhibit 1 and any amendment or supplement thereto made in accordance with
Section 7.4;
"PROPRIETARY RIGHTS" means all patents, inventions, shop rights, know how,
trade secrets, designs, plans, manuals, computer software, specifications,
confidentiality agreements, confidential information and other proprietary
technology and similar information; all registered and unregistered trademarks,
service marks, logos, names, trade names and all other trademark rights; all
registered and unregistered copyrights; and all registrations for, and
applications for registration of, any of the foregoing, in each case that are
used in the conduct of the business of Taro or any Taro Subsidiary;
"PROXY CIRCULAR" means the proxy circular, as amended or supplemented from time
to time, relating to the approval by the Taro Common Shareholders at the Taro
Shareholders Meeting of the Arrangement;
"RECOMMENDATION" has the meaning set forth in Section 5.1(e);
"REGISTRAR" means the Registrar of Corporations appointed pursuant to section
253 of the ABCA;
-3-
<PAGE> 9
"SEC" means the United States Securities and Exchange Commission;
"SEC DOCUMENTS" means EVI's Annual Report on Form 10-K for the year ended
December 31, 1996, its Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997, June 30, 1997 and September 30, 1997, its Current Reports on
Form 8-K dated January 23, 1997, March 17,1997, April 25, 1997, May 14, 1997,
August 26, 1997, October 21, 1997, October 27, 1997, November 5, 1997, November
12, 1997, and November 18, 1997, its Current Report on Form 8-K/A dated October
22, 1997, and its proxy statement with respect to the Annual Meeting of
Stockholders of EVI held on May 6, 1997;
"SECURITIES ACT" means the United States Securities Act of 1933, as amended;
"759572 COMMON SHARE" means the common share in the capital of 759572;
"TAL ARTICLES" means TAL's Articles of Incorporation;
"TAL COMMON SHAREHOLDERS" means the holders of the TAL Common Shares;
"TAL COMMON SHARES" means the Class A shares in the capital of TAL;
"TAL DISCLOSURE LETTER" means the disclosure letter delivered by TAL to Taro on
the date hereof;
"TAL MAE" means (i) a single event, occurrence or fact that (together with all
other events, occurrences and facts) would have, or might reasonably be
expected to have, a material adverse effect on the assets, business,
operations, prospects or financial condition of EVI or (ii) an item that
prevents or adversely affects the ability of TAL or EVI to perform and comply
with its obligations under this Agreement or any other agreement to be executed
and delivered in connection with the transactions contemplated hereby or
thereby;
"TARO ARTICLES" means Taro's Articles of Incorporation;
"TARO CERTIFICATE" means a certificate that immediately prior to the Effective
Date represented outstanding Taro Common Shares;
"TARO COMMISSION FILINGS" means all reports and other filings (including all
notes, exhibits and schedules thereto and documents incorporated by reference
therein) filed by Taro with the TSE or the Commissions since December 31, 1993,
through the date of this Agreement, together with any amendments thereto;
"TARO AFFILIATES" has the meaning set forth in Section 6.2(h);
"TARO COMMON SHAREHOLDERS" means the holders of the Taro Common Shares;
"TARO COMMON SHARES" means the common shares in the capital of Taro;
"TARO DISCLOSURE LETTER" means the disclosure letter delivered by Taro to TAL
on the date hereof;
"TARO MAE" means (i) a single event, occurrence or fact that (together with all
other events, occurrences and facts) would have, or might reasonably be
expected to have, a material adverse effect on the assets, business,
operations, prospects or financial condition of Taro or 759572 or (ii) an item
that prevents or adversely affects the ability of Taro or 759572 to perform and
-4-
<PAGE> 10
comply with its obligations under this Agreement or any other agreement to be
executed and delivered in connection with the transactions contemplated hereby
or thereby;
"TARO OPTIONS" means the outstanding options to purchase an aggregate of
295,968 Taro Common Shares under the Taro Option Plan;
"TARO OPTION PLAN" means the Taro Industries Limited Stock Option Plan;
"TARO PAYMENT" has the meaning set forth in Section 7.3(a);
"TARO PERMITS" has the meaning set forth in Section 3.2(o);
"TARO SHAREHOLDERS MEETING" means the special meeting of the shareholders of
Taro (including any adjournment thereof) that is to be convened as provided by
the Interim Order to consider, and if deemed advisable, approve the
Arrangement;
"TARO SUBSIDIARIES" means all corporations, partnerships, limited liability
companies and other entities of which Taro owns directly or indirectly, an
equity interest; and
"TSE" means The Toronto Stock Exchange.
1.2 EXHIBIT. The following Exhibit is annexed to and incorporated
into this Agreement by reference and is deemed to be a part hereof:
Exhibit 1 -- Plan of Arrangement
ARTICLE II
THE ARRANGEMENT
2.1 TARO OPTIONS. The Taro Option Plan and each outstanding Taro
Option (which has not been exercised or otherwise terminated or canceled prior
to the Effective Date) shall be deemed to be modified to reflect that upon
exercise of such outstanding Taro Option, shares of EVI Common Stock will be
issued in lieu of Taro Common Shares. Each Taro Option representing the right
to purchase Taro Common Shares shall be modified to represent the right to
purchase at the exercise price of such Taro Option 0.123 of a share of EVI
Common Stock for each Taro Common Share subject to the Taro Option. No
fractional shares of EVI Common Stock shall be issued in connection with any
such exercise. To the extent that the exercise of a Taro Option would result
in a fractional number of shares of EVI Common Stock being issued to the holder
of such Taro Option, the holder shall receive in lieu of such fractional share
an amount in United States dollars equal to the value of such fractional share
based on the closing price of the EVI Common Stock on the New York Stock
Exchange on the date notice of such exercise is received by EVI.
2.2 AMALGAMATION. Subject to and in accordance with the terms and
conditions of this Agreement and in accordance with the ABCA, at the Effective
Date, TAL shall, pursuant to the Arrangement, be amalgamated with Taro and
759572. As a result of the amalgamation, the separate corporate existence of
TAL, 759572 and Taro shall cease and New Taro shall be the surviving
corporation, and all the properties, rights, privileges, powers and franchises
of TAL, 759572 and Taro shall vest in New Taro, without any transfer or
assignment having occurred, and all the liabilities, debts and duties of TAL,
759572 and Taro shall attach to New Taro, all in accordance with the ABCA.
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2.3 COURT APPROVAL. As soon as reasonably practicable, Taro and
TAL shall apply to the Court pursuant to section 186 of the ABCA for an order
approving the Arrangement and in connection with such application shall:
(a) forthwith file, proceed with and diligently prosecute
an application for an Interim Order under section 186(4) of the ABCA
providing for, among other things, the calling and holding of the Taro
Shareholders Meeting as provided for in Section 5.1(a) for the purpose
of considering and, if deemed advisable, approving the Arrangement;
and
(b) subject to obtaining such approval of the Taro Common
Shareholders as may be directed by the Court in the Interim Order,
take the steps necessary to submit the Arrangement to the Court and
apply for the Final Order, and, subject to the fulfillment of the
conditions set forth in Article VI, shall deliver to the Registrar
Articles of Arrangement and such other documents as may be required to
give effect to the Arrangement.
2.4 CLOSING. The Closing shall take place at the offices of
Bennett Jones Verchere, 4500 Bankers Hall East, 855 -- 2nd Street S.W.,
Calgary, Alberta, Canada, as soon as practicable after the satisfaction or
waiver of the conditions set forth in Article VI but not later than three
Business Days after the Final Order is granted or at such other time and place
and on such other date as EVI, TAL and Taro shall agree; provided that the
closing conditions set forth in Article VI shall have been satisfied or waived
at or prior to such time.
2.5 CONSUMMATION OF THE ARRANGEMENT. At the Closing, the parties
hereto will cause the Arrangement to be consummated by filing with the
Registrar the Articles of Arrangement in such form as required by, and executed
in accordance with, the relevant provisions of the ABCA and the Final Order.
2.6 EFFECTS OF THE ARRANGEMENT. The Arrangement shall have the
effects set forth in the applicable provisions of the ABCA and the Final Order.
2.7 BYLAWS. The bylaws of TAL, as in effect immediately prior to
the Effective Date, shall be the bylaws of New Taro and thereafter shall
continue to be its bylaws until amended as provided therein or under the ABCA.
2.8 DIRECTORS AND OFFICERS. The directors of TAL immediately
prior to the Effective Date shall be the directors of New Taro at and after the
Effective Date, each to hold office in accordance with the Articles of
Incorporation and bylaws of New Taro, and the officers of TAL immediately prior
to the Effective Date shall be the officers of New Taro at and after the
Effective Date, in each case until the earlier of their resignation or removal
or their respective successors are duly elected or appointed and qualified.
2.9 CONVERSION OF SECURITIES. Subject to the terms and conditions
of this Agreement, at the Effective Date, by virtue of the Arrangement and
without any further action on the part of Taro, TAL, 759572 or their
shareholders:
(a) Each Taro Common Share issued and outstanding
immediately prior to the Effective Date and held by Non-Residents of
Canada shall be exchanged with EVI for 0.123 of a share of EVI Common
Stock.
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(b) Each TAL Common Share issued and outstanding
immediately prior to the Effective Date shall be converted into one
fully paid and nonassessable New Taro Class A Common Share.
(c) Each Taro Common Share owned immediately prior to the
Effective Date by EVI or any direct or indirect wholly-owned
subsidiary of EVI shall be converted into one fully paid and
nonassessable New Taro Class A Common Share.
(d) Each Taro Common Share issued and outstanding
immediately prior to the Effective Date and held by Persons other than
Non-Residents of Canada, EVI or any direct or indirect wholly-owned
subsidiary of EVI, TAL or 759572 shall be converted into one New Taro
Class B Common Share. No other consideration will be paid to Taro or
its shareholders.
(e) The 759572 Common Share issued and outstanding
immediately prior to the Effective Date shall be converted into that
aggregate number of fully paid and nonassessable New Taro Class B
Common Shares equal to the number of Taro Common Shares owned
immediately prior to the Effective Date by 759572.
(f) Each Taro Common Share owned immediately prior to the
Effective Date by TAL and 759572 shall be cancelled and extinguished
without any conversion thereof and no payment or other consideration
shall be made or paid with respect thereto.
(g) Each New Taro Class B Common Share issued and
outstanding upon the amalgamation of TAL, Taro and 759572 shall be
immediately exchanged with EVI for 0.123 of a share of EVI Common
Stock.
2.10 TAKING OF NECESSARY ACTION; FURTHER ACTION. The parties
hereto shall take all such reasonable and lawful action as may be necessary or
appropriate in order to effectuate the Arrangement as promptly as possible.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF EVI AND TAL. EVI and TAL
hereby represent and warrant to Taro that:
(a) Organization and Compliance with Law. Each of EVI
and TAL is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware and the Province
of Alberta, respectively. Each of EVI and TAL has all requisite
corporate power and corporate authority and all necessary governmental
authorizations to own, lease and operate all of its properties and
assets and to carry on its business as now being conducted, except
where the failure to have such governmental authority would not have a
TAL MAE. Each of EVI and TAL is duly qualified as a foreign
corporation to do business, and is in good standing, in each
jurisdiction in which the property owned, leased or operated by it or
the nature of the business conducted by it makes such qualification
necessary, except in such jurisdictions where the failure to be duly
qualified does not and would not have a TAL MAE. TAL is in compliance
with all applicable laws, judgments, orders, rules and regulations,
domestic and foreign, except where failure to be in such compliance
would not have a TAL MAE. TAL has heretofore delivered to Taro true
and complete copies of the EVI
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<PAGE> 13
Articles and the TAL Articles and their respective bylaws as in
existence on the date hereof.
(b) Capitalization.
(i) The authorized capital stock of EVI consists
of 80,000,000 shares of EVI Common Stock and 3,000,000 shares
of EVI Preferred Stock. As of November 11, 1997, there were
47,103,210 shares of EVI Common Stock issued and outstanding.
As of November 11, 1997, 2,506,400 shares of EVI Common Stock
were reserved for issuance pursuant to EVI's employee and
director benefit plans and arrangements, of which 1,376,400
shares of EVI Common Stock were reserved for issuance upon
exercise of outstanding options. At November 11, 1997, there
were no shares of EVI Preferred Stock issued or outstanding.
No holder of EVI Common Stock is entitled to preemptive rights
under Delaware law or the EVI Articles.
(ii) The authorized capital stock of TAL consists
of an unlimited number of TAL Common Shares. As of the date
hereof, there were 100 TAL Common Shares issued and
outstanding, all of which are validly issued, fully paid and
nonassessable and are owned by EVI.
(c) Authorization and Validity of Agreement. The
execution and delivery by EVI and TAL of this Agreement and the
consummation by EVI and TAL of the transactions contemplated hereby
have been duly authorized by all necessary corporate action. This
Agreement has been duly executed and delivered by EVI and TAL and is
the valid and binding obligation of EVI and TAL, enforceable against
EVI and TAL in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws from time to time in effect that affect
creditors' rights generally and by legal and equitable limitations on
the availability of specific remedies.
(d) No Approvals or Notices Required; No Conflict .
Neither the execution and delivery of this Agreement nor the
performance by EVI or TAL of its obligations hereunder, nor the
consummation of the transactions contemplated hereby by EVI and TAL,
will (i) conflict with the EVI Articles, the bylaws of EVI, the TAL
Articles or the bylaws of TAL; (ii) assuming satisfaction of the
requirements set forth in clause (iii) below, violate any provision of
law applicable to EVI or TAL; (iii) except for (A) issuance of the
Interim Order and the Final Order by the Court, (B) requirements of
Canadian, United States, provincial or state securities laws, (C)
requirements of notice filings in such foreign jurisdictions as may be
applicable and (D) the filing of Articles of Arrangement and Articles
of Amalgamation by TAL in accordance with the ABCA, require any
consent or approval of, or filing with or notice to, any public body
or authority, domestic or foreign, under any provision of law
applicable to EVI or TAL; or (iv) require any consent, approval or
notice under, or violate, breach, be in conflict with or constitute a
default (or an event that, with notice or lapse of time or both, would
constitute a default) under, or permit the termination of any
provision of, or result in the creation or imposition of any Lien upon
any properties, assets or business of EVI or TAL under, any note,
bond, indenture, mortgage, deed of trust, lease, franchise, permit,
authorization, license, contract, instrument or other agreement or
commitment or any order, judgment or decree to which EVI or TAL is a
party or by which EVI or TAL or any of their assets or properties is
bound or encumbered, except (A) those that have already been given,
obtained or filed and (B) those that, in the aggregate, would not have
a TAL MAE.
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<PAGE> 14
(e) Voting Requirements. No vote of the holders of
shares of the capital stock of EVI is necessary to approve this
Agreement and the Arrangement.
(f) Brokers. Except for fees and expenses payable by EVI
to SBC Warburg Dillon Read, no broker, investment banker, or other
Person acting on behalf of EVI or TAL is or will be entitled to any
broker's, finder's or other similar fee or commission in connection
with the transactions contemplated by this Agreement.
(g) Information Supplied. The information supplied or to
be supplied by TAL and EVI for inclusion or incorporation by reference
in the Proxy Circular shall, at the date the Proxy Circular is first
mailed to Taro Common Shareholders and at the time of the Taro
Shareholders Meeting, be true and complete in all material respects
and shall not contain any misrepresentation (as defined in the
Securities Act (Alberta)).
(h) Authorization for EVI Common Stock. EVI has taken
all necessary action to permit it to issue the number of shares of EVI
Common Stock required to be issued pursuant to the terms of the Plan
of Arrangement and this Agreement. The shares of EVI Common Stock
issued pursuant to the terms of the Plan of Arrangement and this
Agreement will, when issued, be validly issued, fully paid and
nonassessable and not subject to preemptive rights.
(i) SEC Documents. EVI has provided to Taro the SEC
Documents. As of their respective dates, the SEC Documents complied
in all material respects with the requirements of the United States
Securities Exchange Act of 1934, as amended, and the rules and
regulations of the SEC promulgated thereunder applicable to such SEC
Documents, and none of the SEC Documents contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading. The consolidated financial statements of
EVI included in the SEC Documents comply as to form in all material
respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been
prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly
present the consolidated financial position of EVI and its
consolidated subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended.
Except as set forth in the SEC Documents, no event has occurred since
the date of filing of such that would constitute a TAL MAE.
(j) Conduct of Business in the Ordinary Course; Absence
of Certain Changes and Events. Since December 31, 1996, except as
contemplated by this Agreement or as disclosed in the SEC Documents,
there has not been: (i) a TAL MAE or (ii) any other condition, event
or development that reasonably may be expected to result in a TAL MAE.
3.2 REPRESENTATIONS AND WARRANTIES OF TARO. Taro hereby
represents and warrants to TAL that:
(a) Organization. Taro is a corporation duly
incorporated, validly existing and in good standing under the laws of
the Province of Alberta. Taro has all requisite corporate power and
corporate authority and all necessary governmental authorizations to
own, lease and operate all of its properties and assets and to carry
on its business as now being conducted, except where the failure to
have such governmental authority
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<PAGE> 15
would not have a Taro MAE. Except as set forth in Section 3.2(a) of
the Taro Disclosure Letter, Taro is duly qualified as a foreign
corporation to do business, and is in good standing, in each
jurisdiction in which the property owned, leased or operated by it or
the nature of the business conducted by it makes such qualification
necessary, except in such jurisdictions where the failure to be duly
qualified does not and would not have a Taro MAE. Taro is in
compliance with all applicable laws, judgments, orders, rules and
regulations, domestic and foreign, except where failure to be in such
compliance would not have a Taro MAE. Taro has heretofore delivered
to TAL true and complete copies of the Taro Articles and the bylaws of
Taro as in existence on the date hereof.
(b) Capitalization.
(i) The authorized capital stock of Taro consists
of an unlimited number of common shares and an unlimited
number of Class A shares ("Taro Class A Shares"). As of
November 19, 1997, there were 5,893,818 Taro Common Shares
issued and outstanding. There are no outstanding Taro Class A
Shares. A total of 299,568 Taro Common Shares have been
reserved for issuance upon the exercise of the Taro Options,
all of which have now vested. All issued and outstanding Taro
Common Shares are validly issued, fully paid and nonassessable
and no holder thereof is entitled to preemptive rights. Taro
is not a party to, and is not aware of, any voting agreement,
voting trust or similar agreement or arrangement relating to
any class or series of its capital stock, or any agreement or
arrangement providing for registration rights with respect to
any capital stock or other securities of Taro.
(ii) Other than as described in Section 3.2(b)(i),
there are not now, and at the Effective Date there will not
be, any (A) shares of capital stock or other equity securities
of Taro outstanding other than Taro Common Shares issued
pursuant to the exercise of Taro Options or (B) outstanding
options, warrants, scrip, rights to subscribe for, calls or
commitments of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for,
shares of any class of capital stock of Taro, or contracts,
understandings or arrangements to which Taro is a party, or by
which it is or may be bound, to issue additional shares of its
capital stock or options, warrants, scrip or rights to
subscribe for, or securities or rights convertible into or
exchangeable for, any additional shares of its capital stock.
(iii) Section 3.2(b)(iii) of the Taro Disclosure
Letter sets forth a list of the Taro Subsidiaries. Each Taro
Subsidiary is a corporation duly incorporated, validly
existing and in good standing under the laws of its
jurisdiction of incorporation or organization set forth on
Section 3.2(b)(iii) of the Taro Disclosure Letter, and, except
to the extent specified in Section 3.2(b)(iii) of the Taro
Disclosure Letter, is duly authorized, qualified and licensed
and has all requisite power and authority under all applicable
laws, ordinances and orders of public authorities to own,
operate and lease its properties and assets and to carry on
its business in the places and in the manner currently
conducted. All of the outstanding shares in the capital of
the Taro Subsidiaries have been duly authorized and validly
issued and are fully paid, non-assessable, were not issued in
violation of any preemptive rights or other preferential
rights of subscription or purchase of any Person and, except
as set forth in Section 3.2(b)(iii) of the Taro Disclosure
Letter, are owned of record and beneficially by Taro or the
Taro Subsidiary identified on such schedule as owning such
interest free and clear of
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<PAGE> 16
all Liens (other than restrictions on sales of shares under
applicable securities laws). There are no outstanding
options, warrants, convertible securities, calls, rights,
commitments, preemptive rights, agreements, arrangements or
understandings of any character obligating any Taro Subsidiary
(i) to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares in the capital of any
Taro Subsidiary or any securities or obligations convertible
into or exchangeable for such shares or (ii) to grant, extend
or enter into any such option, warrant, convertible security,
call, right, commitment, preemptive right, agreement,
arrangement or understanding. Neither Taro nor any Taro
Subsidiary owns (directly or indirectly) any equity interest
or other interest or investment in any corporation,
partnership, joint venture, association or other entity or
organization, other than the Taro Subsidiaries and as set
forth in Section 3.2(b)(iii) of the Taro Disclosure Letter.
(c) Authorization and Validity of Agreement. Taro has
all requisite corporate power and authority to enter into this
Agreement and the Other Agreements and to perform its obligations
hereunder and thereunder. The execution and delivery by Taro of this
Agreement and the Other Agreements to which it is a party and the
consummation by it of the transactions contemplated hereby and thereby
have been duly authorized by all necessary corporate action (subject
only, with respect to the Arrangement, to approval of this Agreement
by the Taro Common Shareholders as provided for in Section 5.1). On
or prior to the date hereof the Board of Directors of Taro has
determined to recommend approval of the Arrangement to the Taro Common
Shareholders, and such determination is in effect as of the date
hereof. This Agreement has been duly executed and delivered by Taro
and is the valid and binding obligation of Taro enforceable against it
in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws from time to time in effect that affect creditors' rights
generally and by legal and equitable limitations on the availability
of specific remedies. The Other Agreements, when executed and
delivered by Taro, as applicable, will constitute valid and binding
obligations of Taro, enforceable against it in accordance with their
respective terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws from time to time in effect that affect creditors' rights
generally and by legal and equitable limitations on the availability
of specific remedies.
(d) No Approvals or Notices Required; No Conflict with
Instruments to which Taro is a Party. The execution and delivery of
this Agreement and the Other Agreements do not, and the consummation
of the transactions contemplated hereby and thereby and compliance
with the provisions hereof and thereof will not, conflict with, or
result in any violation of, or default (with or without notice or
lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of or "put" right with respect to any
obligation or to loss of a material benefit under, or result in the
creation of any Lien upon any of the properties or assets of Taro or
any of the Taro Subsidiaries under, any provision of (i) the Taro
Articles or bylaws of Taro or any provision of the comparable
organizational documents of the Taro Subsidiaries, (ii) except as set
forth in Section 3.2(d) of the Taro Disclosure Letter, any loan or
credit agreement, note, bond, mortgage, indenture, lease, guaranty or
other financial assurance agreement or other agreement, instrument,
permit, concession, franchise or license applicable to Taro or its
properties or assets, (iii) except as set forth in Section 3.2(d) of
the Taro Disclosure Letter, any loan or credit agreement, note, bond,
mortgage, indenture, lease, guaranty or other financial assurance
agreement or other agreement, instrument, permit, concession,
franchise or license applicable to any Taro
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<PAGE> 17
Subsidiary, or their respective properties or assets and (iv) subject
to governmental filing and other matters referred to in the following
sentence, any judgment, order, decree, statute, law, ordinance, rule
or regulation or arbitration award applicable to Taro or any of the
Taro Subsidiaries or their respective properties or assets, other
than, in the case of clauses (ii) and (iii), any such conflicts,
violations, defaults, rights or Liens that individually or in the
aggregate would not have a Taro MAE. No consent, approval, order or
authorization of, or registration, declaration or filing with, any
Governmental Entity is required by or with respect to Taro or any of
the Taro Subsidiaries in connection with the execution and delivery of
this Agreement by Taro or the consummation by Taro of the transactions
contemplated hereby, except for (i) issuance of the Interim Order and
the Final Order, (ii) the filing with the TSE and Commissions of the
Proxy Circular, (iii) the filing of the Articles of Arrangement and
Articles of Amalgamation with the Registrar with respect to the
Arrangement as provided in the ABCA and the Final Order and
appropriate documents with the relevant authorities of other
jurisdictions in which Taro is qualified to do business and (iv) such
other consents, approvals, orders, authorizations, registrations,
declarations, filings and notices as are set forth in Section 3.2(d)
of the Taro Disclosure Letter.
(e) Commission Filings; Financial Statements. Taro is a
reporting issuer under the securities laws of Alberta and Ontario and
is not in default of any requirement of such securities laws and it is
in compliance with the bylaws, rules and regulations of the TSE, being
the only exchange upon which the Taro Common Shares are listed. Taro
has filed all reports and other filings, together with any amendments
required to be made with respect thereto, that they have been required
to file with the TSE and the Commissions. Taro has heretofore
delivered to TAL copies of the Taro Commission Filings. As of the
respective dates of their filing with the TSE or the Commissions, the
Taro Commission Filings complied in all material respects with the
applicable securities laws, the rules and regulations of the
Commissions thereunder and the bylaws, rules and regulations of the
TSE, and were true and complete in all material respects and did not
contain any misrepresentation (as defined in the Securities Act
(Alberta)).
Each of the consolidated financial statements (including any
related notes or schedules) included in the Taro Commission Filings
was prepared in accordance with Canadian generally accepted accounting
principles applied on a consistent basis (except as may be noted
therein or in the notes or schedules thereto) and complied with the
rules and regulations of the TSE and the Commissions. Such
consolidated financial statements fairly present the consolidated
financial position of Taro as of the dates thereof and the results of
operations, cash flows and changes in shareholders' equity for the
periods then ended (subject, in the case of the unaudited interim
financial statements, to normal year-end audit adjustments on a basis
comparable with past periods). As of the date hereof, Taro has no
liabilities, absolute or contingent, that may reasonably be expected
to have a Taro MAE, that are not reflected in the Taro Commission
Filings, except (i) those incurred in the ordinary course of business
consistent with past operations and not relating to the borrowing of
money, and (ii) those set forth in Section 3.2(e) of the Taro
Disclosure Letter.
(f) Conduct of Business in the Ordinary Course; Absence
of Certain Changes and Events. Since December 31, 1996, except as
contemplated by this Agreement or as disclosed in the Taro Commission
Filings or set forth in Section 3.2(f) of the Taro Disclosure Letter,
Taro and the Taro Subsidiaries have conducted their respective
businesses only in the ordinary and usual course in accordance with
past practice, and there has not been: (i) a Taro MAE or any other
material adverse change in the
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financial condition, results of operations, prospects, assets or
business of Taro or any Taro Subsidiary, taken as a whole, or (ii) any
other condition, event or development that reasonably may be expected
to result in any such material adverse change or a Taro MAE; (iii) any
change by Taro in its accounting methods, principles or practices;
(iv) any amendment to the Taro Articles, bylaws or other governing
documents or any resolutions or proceedings pending for any amendment
thereto, except as may be contemplated therein; (v) any revaluation by
Taro or any Taro Subsidiary of any of its assets, including, without
limitation, writing down the value of inventory or writing off notes
or accounts receivable other than in the ordinary course of business
and consistent with past practice; (vi) any entry by Taro or any Taro
Subsidiary into any commitment or transaction that would be material
to Taro and not in the ordinary course of business; (vii) any
declaration, setting aside or payment of any dividends or
distributions in respect of the Taro Common Shares or any redemption,
purchase or other acquisition of any of its securities; (viii) any
damage, destruction or loss (whether or not covered by insurance)
adversely affecting the properties or business of Taro; (ix) any
increase in indebtedness of borrowed money other than borrowing under
existing credit facilities as disclosed in Section 3.2(f) of the Taro
Disclosure Letter; (x) any granting of a security interest or Lien on
any property or assets of Taro, other than Permitted Liens; (xi) any
increase in or establishment of any bonus, insurance, severance,
deferred compensation, pension, retirement, profit sharing, stock
option (including, without limitation, the granting of stock options,
stock appreciation rights, performance awards or restricted stock
awards), stock purchase or other employee benefit plan or any other
increase in the compensation payable or to become payable to any
directors, officers or key employees of Taro or which Taro would be
responsible; or (xii) any transaction with any Affiliate of Taro or
any Taro Subsidiary.
(g) Litigation. Except as disclosed in the Taro
Commission Filings or as set forth in Section 3.2(g) of the Taro
Disclosure Letter, there are no Demands, pending or, to the knowledge
of Taro, threatened against or affecting (i) Taro or any of its
properties at law or in equity, or any of their employee benefit plans
or fiduciaries of such plans or (ii) any Taro Subsidiary or any of
their respective properties at law or in equity, or any of their
respective employee benefit plans or fiduciaries of such plans, before
or by any Governmental Entity, wherever located that (i) exist today;
(ii) could prevent or hinder the consummation of the transactions
contemplated by this Agreement or the Plan of Arrangement or (iii)
would otherwise, if adversely determined, have a Taro MAE. Taro is
not subject to any judicial, governmental or administrative order,
writ, judgment, injunction or decree.
(h) Disclosure. Taro has made disclosure of all material
facts (as defined in the Securities Act (Alberta)) relating to its
business and financial affairs to TAL and acknowledges that TAL is
relying upon such disclosure in determining whether to proceed with
the Plan of Arrangement.
(i) Employee Benefit Plans.
(i) Section 3.2(i) of the Taro Disclosure Letter
provides a description of each Benefit Program or Agreement
that is sponsored, maintained or contributed to by Taro or any
Taro Subsidiary for the benefit of its employees, or has been
so sponsored, maintained or contributed to within three years
prior to the Effective Date. True and complete copies of each
of the Benefit Programs or Agreements, related trusts, if
applicable, and all amendments thereto have been furnished to
TAL.
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<PAGE> 19
(ii) Except as otherwise set forth in Section
3.2(i) of the Taro Disclosure Letter,
(A) Each Benefit Program or Agreement
has been administered, maintained and operated in all
material respects in accordance with the terms
thereof and in compliance with its governing
documents and applicable law;
(B) There are no actions, suits or
claims pending (other than routine claims for
benefits) or, to the knowledge of Taro, threatened
against, or with respect to, any of the Benefit
Programs or Agreements or its assets; and
(C) The execution and delivery of this
Agreement and the consummation of the transactions
contemplated hereby will not require Taro or any Taro
Subsidiary to make a larger contribution to, or pay
greater benefits under, any Benefit Program or
Agreement than it otherwise would or create or give
rise to any additional vested rights or service
credits under any Benefit Program or Agreement or
cause the companies to make accelerated payments.
(iii) Except as set forth in Section 3.2(i) of the
Taro Disclosure Letter, termination of employment of any
employee of Taro or any Taro Subsidiary immediately after
consummation of the transactions contemplated by this
Agreement would not result in payments under the Benefit
Programs or Agreements.
(iv) Except as set forth in Section 3.2(i) of the
Taro Disclosure Letter, each of the Benefit Programs or
Agreements may be unilaterally amended or terminated in its
entirety without liability except as to benefits accrued
thereunder prior to such amendment or termination.
(v) Except as set forth in Section 3.2(i) of the
Taro Disclosure Letter, none of the employees of Taro or any
Taro Subsidiary are subject to union or collective bargaining
agreements.
(vi) None of Taro or any Taro Subsidiary has
agreed or is obligated to provide retiree medical coverage.
(vii) Except as set forth in Section 3.2(i) of the
Taro Disclosure Letter, to the best knowledge of Taro, none of
Taro or any of the Taro Subsidiaries, any officer or director
of Taro or any of the Taro Subsidiaries or any of the Benefit
Plans, or any trusts created thereunder, or any trustee or
administrator thereof, has engaged in any prohibited
transaction or act or any other breach of fiduciary
responsibility that could subject Taro or any Taro Subsidiary
or TAL as the successor to the business of Taro to any tax or
penalty or to any liability under any applicable law or
regulation.
(j) Taxes.
(i) Except as set forth in Section 3.2(j) of the
Taro Disclosure Letter, Taro and its current and past
subsidiaries have duly and timely filed, in all material
respects, in proper form, returns in respect of taxes under
the Income
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Tax Act (Canada), the Alberta Corporate Tax Act, the income
tax legislation of any other province of Canada or any foreign
country having jurisdiction over its affairs or any of the
Taro Subsidiaries, and similar legislation of other provinces
having jurisdiction over its affairs, for all prior periods in
respect of which such filings have heretofore been required.
All taxes shown on such returns and all taxes now owing,
including interest and penalties, have been paid or accrued on
Taro's books. There are no outstanding agreements or waivers
extending the statutory period of limitations applicable to
any federal, provincial or other income tax return for any
period. There is no material claim against Taro or any Taro
Subsidiary with respect to any taxes, and no material
assessment, deficiency or adjustment has been asserted or
proposed with respect to any tax return of or with respect to
Taro or any Taro Subsidiary that has not been adequately
provided for in reserves established by Taro or such Taro
Subsidiary. All income tax returns of or with respect to Taro
or any Taro Subsidiary up to and including December 31, 1995,
have been assessed by the applicable Governmental Entity. The
time period for reassessment under the Income Tax Act
(Canada), the Alberta Corporate Tax Act, and the Income Tax
Act (B.C.) in the absence of misrepresentation attributable to
negligence, carelessness, willful default or fraud has expired
for all periods up to and including the tax year ended
September 30, 1992. The total amounts set up as liabilities
for current and deferred taxes in the consolidated financial
statements included in the Taro Commission Filings have been
prepared in accordance with Canadian generally accepted
accounting principles and are sufficient to cover the payment
of all material taxes, including any penalties or interest
thereon and whether or not assessed or disputed, that are, or
are hereafter found to be, or to have been, due with respect
to the operations of Taro or any Taro Subsidiary through the
periods covered thereby. Except for statutory Liens for
current taxes not yet due, no Liens for taxes exist upon the
assets of Taro.
(ii) Taro and each Taro Subsidiary has remitted to
the proper tax authority when required by law to do so, all
amounts payable by it on account of GST and is a "taxable
Canadian corporation" for the Income Tax Act (Canada).
(iii) As of the Effective Date, Taro shall have
fully accrued for all taxes that may be required to be paid as
a result of the transactions contemplated hereby.
(k) Environmental Matters. Except as set forth in
Section 3.2(k) of the Taro Disclosure Letter, (i) the properties,
operations and activities of Taro and each of the Taro Subsidiaries
complies in all material respects with all applicable Environmental
Laws; (ii) none of Taro or any of its Taro Subsidiaries is subject to
any existing, pending or, to the knowledge of Taro, threatened action,
suit, investigation, inquiry or proceeding by or before any
Governmental Entity under any Environmental Law; (iii) except where
the failure would not have a Taro MAE, all notices, permits, licenses,
or similar authorizations, if any, required to be obtained or filed by
Taro under any Environmental Law in connection with any aspect of the
business of Taro or any Taro Subsidiary, including without limitation
those relating to the treatment, storage, disposal or release of a
hazardous substance or solid waste, have been duly obtained or filed
and will remain valid and in effect after the Arrangement and Taro and
each Taro Subsidiary is in compliance with the terms and conditions of
all such notices, permits, licenses and similar authorizations; (iv)
Taro and each Taro Subsidiary has satisfied and are currently in
compliance with all financial responsibility requirements applicable
to
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their operations and imposed by any Governmental Entity under any
Environmental Law, and none of such parties has received any notice of
noncompliance with any such requirements; (v) to Taro's knowledge,
there are no physical or environmental conditions existing on any
property currently owned or leased or previously owned or leased by
Taro or any entity in which it has or had ownership interest that
could reasonably be expected to give rise to any on-site or off-site
remedial obligations under any Environmental Laws; and (vi) to Taro's
knowledge, since the effective date of the relevant requirements of
applicable Environmental Laws, all hazardous substances or solid
wastes generated by Taro or any Taro Subsidiary or used in connection
with their properties or operations have been transported only by
carriers authorized under Environmental Laws to transport such
substances and wastes, and disposed of only at treatment, storage, and
disposal facilities authorized under environmental laws to treat,
store or dispose of such substances and wastes, and, to the knowledge
of Taro, such carriers and facilities have been and are operating in
compliance with such authorizations and are not the subject of any
existing, pending, or overtly threatened action, investigation, or
inquiry by any Governmental Entity in connection with any
Environmental Laws.
(l) Severance Payments. Except as set forth in Section
3.2(l) of the Taro Disclosure Letter, Taro will not have any liability
or obligation to pay a severance payment or similar obligation to any
of their respective employees, officers, or directors as a result of
the Arrangement or the transactions contemplated by this Agreement,
nor will any of such Persons be entitled to an increase in severance
payments or other benefits as a result of the Arrangement or the
transactions contemplated by this Agreement or the Other Agreements in
the event of the subsequent termination of their employment.
(m) Shareholder and Similar Agreements. To the knowledge
and belief of Taro, except as disclosed in Section 3.2(m) of the Taro
Disclosure Letter, there are no shareholder, pooling, voting trust or
other agreements relating to the issued and outstanding shares of
Taro.
(n) Brokers. No broker, investment banker, or other
Person acting on behalf of Taro or any Taro Subsidiary is or will be
entitled to any broker's, finder's or other similar fee or commission
in connection with the transactions contemplated by this Agreement.
(o) Compliance with Laws. Taro and each of the Taro
Subsidiaries hold all required, necessary or applicable permits,
licenses, variances, exemptions, orders, franchises and approvals of
all Governmental Entities, except where the failure to so hold could
not reasonably be expected to have a Taro MAE (the "Taro Permits").
All applications with respect to such permits, licenses, variances,
exemptions, orders, franchises and approvals were complete and correct
in all material respects when made and Taro does not know of any
reason why any of such permits, licenses, variances, exemptions,
orders, franchises and approvals would be subject to cancellation.
Taro and each of the Taro Subsidiaries are in compliance with the
terms of the Taro Permits except where the failure to so comply could
not reasonably be expected to have a Taro MAE. Neither Taro nor any
of the Taro Subsidiaries has violated or failed to comply with any
statute, law, ordinance, regulation, rule, permit or order of any
federal, provincial or local government, domestic or foreign, or any
Governmental Entity, any arbitration award or any judgment, decree or
order of any court or other Governmental Entity, applicable to Taro or
any of the Taro Subsidiaries or their respective business,
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<PAGE> 22
assets or operations, except for violations and failures to comply
that would not have a Taro MAE.
(p) Contracts.
(i) Section 3.2(p) to the Taro Disclosure Letter
contains a complete list of the following contracts,
agreements, arrangements and commitments: (i) all employment
or consulting contracts or agreements to which Taro or any
Taro Subsidiary is contractually obligated; (ii) current
leases, sales contracts and other agreements with respect to
any property, real or personal, of Taro or any Taro Subsidiary
or to which Taro or any Taro Subsidiary is contractually
obligated; (iii) contracts or commitments for capital
expenditures or acquisitions in excess of $30,000 to which
Taro or any Taro Subsidiary is obligated; (iv) agreements,
contracts, indentures or other instruments relating to the
borrowing of money, or the guarantee of any obligation for the
borrowing of money, to which Taro or any Taro Subsidiary is a
party or any of their respective properties is bound; (v)
contracts or agreements or amendments thereto that would be
required to be filed as an exhibit to a Taro Commission Filing
that has not yet been filed as an exhibit; (vi) all
corporations, partnerships, limited liability companies and
other entities that Taro or any Taro Subsidiary has owned,
directly or indirectly, an equity interest in since June 15,
1993, (vii) all material indemnification and guaranty or other
similar obligations to which Taro or any Taro Subsidiary is
bound and which the officers of Taro or any Taro Subsidiary,
after reasonable investigation, are aware, (viii) any
outstanding bonds, letters of credit posted or guaranteed by
Taro or any Taro Subsidiary with respect to any Person, (ix)
any covenants not to compete or other obligations affecting
Taro or any Taro Subsidiary that would restrict New Taro or
EVI and its Affiliates from engaging in any business or
activity that the officers of Taro are aware, after reasonable
investigation (x) contracts or agreements requiring the
customer's payments for goods or services or the provision of
goods or services at a price less than Taro's or a Taro
Subsidiary's cost of producing such goods or providing such
services, (xi) agreements or obligations with any Affiliate of
Taro, (xii) any agreement, lease contract or commitment or
series of related agreements, leases, contracts or commitments
not entered into in the ordinary course of business or, except
for agreements to purchase or sell goods and services entered
into in the ordinary course of business, not cancelable by
Taro or any Taro Subsidiary within 30 calendar days, (xiii)
any agreement, contract or commitment that would limit the
freedom of Taro or any Taro Subsidiary or any Affiliate of
Taro following the Closing Date to engage in any line of
business, to own, operate, sell, transfer, pledge or otherwise
dispose of or encumber any of their assets or to compete with
any Person or to engage in any business or activity in any
geographic area, (xiv) any manufacturing, supply, sales,
distributorship or similar agreement relating to the products
manufactured or sold or services provided by Taro or any Taro
Subsidiary, (xv) any license, royalty or similar agreement and
(xvi) contracts, agreements, arrangements or commitments,
other than the foregoing, that could reasonably be considered
to be material to Taro or any Taro Subsidiary, taken as a
whole.
(ii) True and correct copies of all the
instruments described in Section 3.2(p) of the Taro Disclosure
Letter have been furnished or made available to TAL. Except
as noted in the Taro Disclosure Letter, all such agreements,
arrangements or commitments are valid and subsisting and each
of
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Taro and the Taro Subsidiaries to the extent each is a party,
has duly performed its obligations thereunder in all material
respects to the extent such obligations have accrued, and no
breach or default thereunder by Taro or the Taro Subsidiaries
or, to the knowledge of Taro, any other party thereto has
occurred that could impair the ability of Taro or the Taro
Subsidiaries to enforce any material rights thereunder. There
are no material liabilities of any of the parties to any of
the contracts between Taro or any of the Taro Subsidiaries and
third parties arising from any breach of or default in any
provision thereof or which would permit the acceleration of
any obligation of any party thereto or the creation of a Lien
upon any asset of Taro or any of the Taro Subsidiaries.
(q) Title to Property.
(i) At the Effective Date, Taro and each of the
Taro Subsidiaries will have good and marketable title to, or
valid leasehold interests in, all their respective properties
and assets.
(ii) Taro and each of the Taro Subsidiaries has
complied in all material respects with the terms of all leases
to which they are a party and under which they are in
occupancy, and all such leases are in full force and effect.
Taro and each of the Taro Subsidiaries enjoy peaceful and
undisturbed possession under all such leases.
(r) Intellectual Property. Taro or a Taro Subsidiary
owns or possesses licenses or other rights to use all Proprietary
Rights that, in each case, Taro or any Taro Subsidiary reasonably
believes are necessary for the conduct of their business as currently
conducted. Set forth in Section 3.2(r) of the Taro Disclosure Letter
is a complete and accurate list of all patents, trademarks and
licenses Taro or any Taro Subsidiary owns or possesses or otherwise
has rights to use and all patents, trademarks and licenses pertaining
to their business that Taro or any Taro Subsidiary owns or possesses
or otherwise has rights to use. No licenses, sublicenses, covenants
or agreements have been granted or entered into by Taro or any Taro
Subsidiary in respect of the items listed in Section 3.2(r) of the
Taro Disclosure Letter except as noted thereon. Neither Taro, any
Taro Subsidiary nor any Affiliate of Taro has received any notice of
infringement, misappropriation or conflict from any other Person with
respect to such Proprietary Rights except as noted in Section 3.2(r)
of the Taro Disclosure Letter, and, to the best knowledge of Taro, the
conduct of the business of Taro and the Taro Subsidiaries has not
infringed, misappropriated or otherwise conflicted with any
proprietary rights of any other Person. Neither Taro nor any Taro
Subsidiary has given indemnification for patent, trademark, service
mark or copyright infringements except to licensees or customers in
the ordinary course of business. All of the Proprietary Rights that
are owned by Taro or any Taro Subsidiary are owned free and clear of
all Liens except for Permitted Liens and as set forth in Section
3.2(r) of the Taro Disclosure Letter. All Proprietary Rights that are
licensed by Taro or any Taro Subsidiary from third parties are
licensed pursuant to valid and existing license agreements and such
interests are not subject to any Liens other than those under the
applicable license agreements. The consummation of the transactions
contemplated by this Agreement will not result in the loss of any
Proprietary Rights material to the business of Taro or any Taro
Subsidiary.
(s) Insurance Policies. Section 3.2(s) of the Taro
Disclosure Letter contains a correct and complete description of all
insurance policies held by Taro covering Taro and the Taro
Subsidiaries, any employees or other agents of Taro and the Taro
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<PAGE> 24
Subsidiaries or any assets of Taro and the Taro Subsidiaries. Each
such policy is in full force and effect, is with responsible insurance
carriers and is substantially equivalent in coverage and amount to
policies covering companies of the size of Taro and in the business in
which Taro and the Taro Subsidiaries is engaged, in light of the risk
to which such companies and their employees, businesses, properties
and other assets may be exposed. All retroactive premium adjustments
under any worker's compensation policy of Taro or any of the Taro
Subsidiaries have been recorded in Taro's financial statements in
accordance with Canadian generally accepted accounting principles and
are reflected in the financial statements contained in the Taro
Commission Filings.
(t) Loans. Section 3.2(t) of the Taro Disclosure Letter
sets forth all existing loans, advances or other extensions of credit
(excluding accounts receivable arising in the ordinary course of
business) by Taro or the Taro Subsidiaries to any party other than
intercompany loans, advances, guaranties or extensions of credit.
(u) No Fraudulent Transfer. Neither Taro nor any Taro
Subsidiary has within the last twelve months made any transfer or
incurred any obligation with actual intent to hinder, delay or defraud
any entity to which it was or may become indebted and it has not
transferred any material property without receiving reasonably
equivalent value for any such transfer obligation. Immediately prior
to the Arrangement, (i) the fair value of the assets of Taro and the
Taro Subsidiaries at a fair valuation exceeds their debts and
liabilities, subordinated, contingent or otherwise, (ii) the present
fair saleable value of the property of Taro and the Taro Subsidiaries
is greater than the amount that will be required to pay its probable
liability on its debts and other liabilities, subordinated, contingent
or otherwise, as such debts and liabilities become absolute and
mature, (iii) Taro and the Taro Subsidiaries reasonably expect to be
able to pay their debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured,
(iv) Taro and any Taro Subsidiary will not have unreasonably small
capital with which to conduct the business in which it is engaged as
such business is now conducted and is proposed to be conducted, and
(v) to the knowledge of Taro or any Taro Subsidiary, no creditor of
Taro, TAL, New Taro or any Taro Subsidiary will be prejudiced by the
Arrangement. For all purposes of clauses of (i) through (v), the
amount of contingent liabilities at any time shall be computed as the
amount that, in light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
(v) Information Supplied. The information included or
incorporated by reference in the Proxy Circular (except for any
information supplied or to be supplied by TAL) shall, at the date the
Proxy Circular is first mailed to Taro Common Shareholders and at the
time of the Taro Shareholders Meeting, be true and complete in all
material respects and shall not contain any misrepresentation (as
defined in the Securities Act (Alberta)). The Proxy Circular will
comply as to form in all material respects with the requirements of
the Securities Act (Alberta) and the rules and regulations thereunder.
(w) Sales into the United States. Revenues from sales of
goods and services attributable to the business of Taro and the Taro
Subsidiaries into and for use in the United States have, for each of
the three years preceding the date hereof, been less than an aggregate
total of US$25 million. The aggregate total book value of the assets
in the United States of Taro and the Taro Subsidiaries is less than
US$15 million.
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ARTICLE IV
COVENANTS OF TARO
4.1 CONDUCT OF BUSINESS BY TARO PENDING THE ARRANGEMENT. Taro
covenants and agrees that, from the date of this Agreement until the earlier of
the Effective Date or the date of termination of this Agreement, unless TAL
shall otherwise agree in writing or as otherwise expressly contemplated by this
Agreement or set forth in Section 4.1 of the Taro Disclosure Letter:
(a) the business of Taro and the Taro Subsidiaries shall
be conducted only in, and Taro and the Taro Subsidiaries shall not
take any action except in, the ordinary course of business and
consistent with past practice;
(b) Taro shall not directly or indirectly do any of the
following: (i) issue, sell, pledge, dispose of or encumber any
capital stock of Taro except upon the exercise of outstanding Taro
Options; (ii) split, combine, or reclassify any outstanding capital
stock, or declare, set aside, or pay any dividend payable in cash,
stock, property, or otherwise with respect to its capital stock
whether now or hereafter outstanding; (iii) redeem, purchase or
acquire or offer to acquire any of its capital stock; (iv) grant any
options to purchase any capital stock of Taro or any Taro Subsidiary;
(v) acquire, agree to acquire or make any offer to acquire for cash or
other consideration, any equity interest in or all or substantially
all of the assets of any corporation, partnership, joint venture, or
other entity; (vi) enter into any contract, agreement, commitment, or
arrangement with respect to any of the matters set forth in this
Section 4.1(b); (vii) amend its articles or bylaws; or (viii)
reorganize, amalgamate or merge with any other Person;
(c) Neither Taro nor any Taro Subsidiary shall enter into
any contract regarding its business having a term greater than 180
days or involving an amount in excess of $250,000 or commit to do the
same; provided, however, that if such contract directly relates to the
sale of compression products by Taro, then the amount involved may not
be in excess of $1 million.
(d) Except for the proviso contained in Section 4.1(c),
Taro and the Taro Subsidiaries shall not become bound by any agreement
or obligation in an amount in excess of $500,000 in the aggregate for
all such agreements and obligations;
(e) Taro and the Taro Subsidiaries shall not pledge or
encumber any of the assets of Taro or the Taro Subsidiaries;
(f) Neither Taro nor any of the Taro Subsidiaries shall
enter into any written employment or consulting contracts or, except
for the hiring of non-executive employees in the ordinary course of
business, any oral employment or consulting contracts;
(g) Other than in the ordinary course of business,
neither Taro nor any of the Taro Subsidiaries shall enter into any
contract or agreement that, if effective on the date hereof, would be
required to be identified as a disclosure pursuant to Section 3.2(p)
of the Taro Disclosure Letter.
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(h) Neither Taro nor any of the Taro Subsidiaries shall
sell, lease, mortgage, pledge, grant a Lien on or otherwise encumber
or otherwise dispose of any of Taro's or the Taro Subsidiaries'
properties or assets in an amount in excess of $50,000 in the
aggregate, except sales of inventory in the ordinary course of
business consistent with past practice;
(i) Neither Taro nor any of the Taro Subsidiaries shall,
directly or indirectly, incur any indebtedness for borrowed money or
guarantee any such indebtedness of another Person, issue or sell any
debt securities or warrants or other rights to acquire any debt
securities of Taro or the Taro Subsidiaries, guarantee any debt
securities of another Person, enter into any "keep well" or other
agreement to maintain any financial statement condition of another
Person or enter into any arrangement having the economic effect of any
of the foregoing, except for short-term borrowings incurred in the
ordinary course of business consistent with past practice, or make or
permit to remain outstanding any loans, advances or capital
contributions to, or investments in, any other Person, other than to
Taro or any direct or indirect wholly owned subsidiary of Taro;
(j) Neither Taro nor any of the Taro Subsidiaries shall
make any election relating to taxes;
(k) Neither Taro nor any of the Taro Subsidiaries shall
change any accounting principle used by it;
(l) Taro shall use its reasonable efforts (i) to preserve
intact the business organization of Taro, (ii) to maintain in effect
any material authorizations or similar rights of Taro, (iii) to
preserve the goodwill of those having material business relationships
with it, (iv) to maintain and keep each of Taro's properties in the
same repair and condition as presently exists, except for
deterioration due to ordinary wear and tear and damage due to casualty
and (v) to maintain in full force and effect insurance comparable in
amount and scope of coverage to that currently maintained by it;
(m) Taro shall, and shall cause the Taro Subsidiaries to,
perform their respective obligations under any contracts and
agreements to which it is a party or to which any of its assets is
subject, except to the extent such failure to perform would not have a
Taro MAE, and except for such obligations as Taro in good faith may
dispute;
(n) Neither Taro nor any of the Taro Subsidiaries shall
settle or compromise any litigation (whether or not commenced prior to
the date of this Agreement) other than settlements or compromises: (i)
of litigation where the amount paid in settlement or compromise does
not exceed $50,000, or if greater, the amount of the reserve therefor
reflected in the most recent Taro Commission Filings and the terms of
the settlement would not otherwise have a Taro MAE or (ii) in
consultation and cooperation with TAL, and, with respect to any such
settlement, with the prior written consent of TAL;
(o) Neither Taro nor any Taro Subsidiary shall enter into
any transaction with any Affiliate of Taro;
(p) Neither Taro nor any Taro Subsidiary shall grant any
management or shareholder bonus or, other than in the ordinary course
of business consistent with past practice, any salary increase; and
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(q) Taro shall not authorize any of, or commit or agree
to take any of, or permit any Taro Subsidiary to take any of, the
foregoing actions to the extent prohibited by the foregoing and shall
not, and shall not permit any of the Taro Subsidiaries to, take any
action that would, or that reasonably could be expected to, result in
any of the representations and warranties set forth in this Agreement
becoming untrue or any of the conditions to the Arrangement set forth
in Article VI not being satisfied. Taro promptly shall advise TAL
orally and in writing of any change or event having, or which, insofar
as reasonably can be foreseen, would have, a material adverse effect
on Taro and the Taro Subsidiaries, taken as a whole; or cause a Taro
MAE.
4.2 SUBSIDIARY DISSOLUTION. Taro will use its best efforts to
dissolve all of the Taro Subsidiaries prior to the Effective Date.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 COOPERATION; CONSENTS AND APPROVALS. In cooperation with TAL,
Taro shall prepare all necessary documents and filings and obtain all
approvals, including the obtaining of the Interim Order and the Final Order and
the preparation of the Proxy Circular.
(a) Without limiting the foregoing, Taro shall use all
reasonable efforts to, as soon as practicable, complete the
preparation of the Proxy Circular as agreed with TAL and, subject to
the grant of the Interim Order, to mail to the Taro Common
Shareholders and file in all jurisdictions where required the Proxy
Circular and other documentation required in connection with the Taro
Shareholders Meeting, all in accordance with National Policy No. 41 of
the Canadian Securities Administrators, the Interim Order and
applicable law, and Taro shall use all reasonable efforts, subject to
the grant of the Interim Order, to as soon as practicable and in any
event on the date specified in the Interim Order, to convene the Taro
Shareholders Meeting for the purpose of approving the Arrangement and
this Agreement in accordance with the Interim Order.
(b) Taro shall cause a list of Taro Common Shareholders
as of the record date for the Taro Shareholders Meeting and the
shareholder mailing information, in a form suitable for soliciting of
Taro Common Shareholders to be prepared by the Depositary, to be
delivered to TAL no later than the Business Day after such record
date.
(c) Taro shall ensure that the Proxy Circular complies
with all applicable disclosure laws as they relate to the disclosure
of information regarding Taro and, without limiting the generality of
the foregoing, provides the Taro Common Shareholders to which such
circular is sent with information in sufficient detail to permit them
to form a reasoned judgment concerning the matters before them.
(d) EVI and TAL shall provide all such information
reasonably required for inclusion in the Proxy Circular to permit Taro
to comply with Section 5.1(c).
(e) Subject to the terms and conditions set forth in
Section 6.3 and the fiduciary obligations of the Board of Directors of
Taro with respect to such matters, the Board of Directors of Taro (i)
shall recommend at such meeting that the Taro Common
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Shareholders vote to adopt and approve the Arrangement and this
Agreement (the "Recommendation"), (ii) shall use its reasonable
efforts to solicit from the Taro Common Shareholders proxies in favour
of such adoption and approval and (iii) shall take all other action
reasonably necessary to secure a vote of its shareholders in favour of
the adoption and approval of the Arrangement and this Agreement.
(f) Prior to the Effective Date, EVI shall have taken all
necessary action to permit it to issue the number of shares of EVI
Common Stock issuable upon the exercise of the Taro Options after the
Effective Date and the shares of EVI Common Stock to be so issued
will, when issued pursuant to the terms of the Taro Option Plan, be
validly issued, fully paid and non-assessable and not subject to any
preemptive rights.
5.2 DEPOSITARY. Taro shall permit and direct the Depositary to
act as New Taro's depositary under the Arrangement. EVI shall permit and
direct the Depositary to act as EVI's depositary under the Arrangement.
5.3 FILINGS; CONSENTS; REASONABLE EFFORTS. Subject to the terms
and conditions of this Agreement, Taro and TAL shall (i) make all necessary
filings with respect to the Arrangement and this Agreement under applicable
securities laws and shall use all reasonable efforts to obtain required
approvals and clearances with respect thereto; (ii) use reasonable efforts to
obtain all consents, waivers, approvals, authorizations, and orders required in
connection with the authorization, execution, and delivery of this Agreement
and the consummation of the Arrangement; (iii) use reasonable efforts to take,
or cause to be taken, all appropriate action, and do, or cause to be done, all
things necessary, proper, or advisable to consummate and make effective as
promptly as practicable the transactions contemplated by this Agreement; and
(iv) will permit the review by each other of all documents to be filed with the
Court or to be sent to the Taro Common Shareholders with respect to the Taro
Shareholders Meeting.
5.4 NOTIFICATION OF CERTAIN MATTERS. Taro shall give prompt
notice to TAL, and TAL shall give prompt notice to Taro, orally and in writing,
of (i) the occurrence, or failure to occur, of any event which occurrence or
failure would be likely to cause any representation or warranty contained in
this Agreement to be untrue or inaccurate at any time from the date hereof to
the Effective Date; and (ii) any material failure of Taro or TAL, as the case
may be, or any officer, director, employee or agent thereof, to comply with or
satisfy any covenant, condition or agreement to be compiled with or satisfied
by it hereunder.
5.5 EXPENSES. Except as provided in Section 7.3, whether or not
the Arrangement is consummated, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such expenses; provided, however, that if this Agreement
shall have been terminated pursuant to Section 7.1 as a result of the willful
breach by a party of any of its representations, warranties, covenants, or
agreements set forth in this Agreement, such breaching party shall pay the
direct out-of-pocket costs and expenses of the other parties in connection with
the transactions contemplated by this Agreement.
5.6 TARO OPTION PLAN. Taro shall take action prior to the
Arrangement to modify the Taro Option Plan to reflect that upon exercise of the
Taro Options, shares of EVI Common Stock will be issued in lieu of Taro Common
Shares.
5.7 NO SOLICITATIONS. Taro shall not, nor shall it permit any
Taro Subsidiary to, nor shall it authorize or permit any officer, director or
employee of or any investment banker, attorney or other advisor, agent or
representative of Taro or any Taro Subsidiary to, directly
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<PAGE> 29
or indirectly, make, solicit, initiate or encourage inquiries or the submission
of proposals or offers from any Person other than TAL relating to the
acquisition, recapitalization, merger, amalgamation, arrangement, purchase or
dissolution of Taro or, except with the prior written consent of TAL, of
material assets or any ownership or debt interest of or in Taro or any similar
or business combination transaction (any of the foregoing proposals or offers
being referred to herein as an "Acquisition Proposal"), or participate in
discussions or negotiations, or in any way assist, facilitate or cooperate with
any Person other than TAL seeking to do any of the foregoing, including by
furnishing information to any such Person, provided that the foregoing shall
not prevent the board of directors of Taro from responding to any bona fide
offer, proposal or inquiry made by a third party in connection with the
foregoing and providing information to such a Person, if, in the opinion of the
directors, acting in good faith and upon the advice of their financial and
legal advisors, the failure to do so would be inconsistent with the directors'
fiduciary duties under applicable law. In such event, Taro shall promptly
advise TAL orally and in writing of the material terms and conditions of such
Acquisition Proposal and the identity of the Person making such Acquisition
Proposal. Prior to Taro providing any information concerning Taro or any Taro
Subsidiaries to such Person, such Person shall sign a confidentiality agreement
substantially similar to the confidentiality agreement signed by EVI. Taro
shall keep TAL fully informed of the status and details of any such Acquisition
Proposal.
5.8 BETTER OFFERS.
(a) If a competing bona fide Acquisition Proposal is made
that is more favorable from a financial point of view to the Taro
Common Shareholders, then the board of directors of Taro may withdraw
the Recommendation provided that, in the opinion of the directors,
acting in good faith and upon the advice of their financial and legal
advisors, the directors' fiduciary duties under applicable law would
require withdrawal of the Recommendation.
(b) Taro and its board of directors may cause any
withdrawal of the Recommendation and any support for or recommendation
of a competing bona fide Acquisition Proposal made as permitted by
Section 5.8(a) to be reflected in a public announcement and in a proxy
circular or amendment thereto.
5.9 MUTUAL AGREEMENTS. Each of Taro and TAL covenants and agrees
that, until the Effective Date or the day upon which this Agreement is
terminated, whichever is earlier, it:
(a) will in a timely and expeditious manner, but in any
event not later than December 22, 1997, file, proceed with and
diligently prosecute an application to the Court under the ABCA for an
Interim Order with respect to the Arrangement;
(b) will, in a timely and expeditious manner, carry out
the terms of the Interim Order, provided that nothing shall require a
party to consent to any modification of this Agreement, the
Arrangement or such party's obligations hereunder.
(c) will, subject to the approval of the Arrangement at
the Taro Shareholders Meeting in accordance with the provisions on the
Interim Order, forthwith, but in any event not later than February 27,
1998, file, proceed with and diligently prosecute together with the
other party an application for the Final Order; and
(d) will forthwith carry out the terms of the Final Order
and will, together with the other party, file Articles of Arrangement
and the Final Order with the Registrar in order for the Arrangement to
become effective on or before March 31, 1998,
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<PAGE> 30
provided that nothing shall require a party to consent to any
modification of this Agreement, the Arrangement or such party's
obligations hereunder.
5.10 DEPOSIT OF EVI STOCK. EVI shall deposit with the Depositary
the shares of EVI Common Stock required for the exchange of Taro Common Shares
held by Non-Residents of Canada and the exchange of the New Taro Class B Common
Shares pursuant to this Agreement and the Plan of Arrangement and EVI shall
irrevocably direct the Depositary to exchange the Taro Common Shares held by
Non-Residents of Canada and to exchange the New Taro Class B Common Shares with
the shares of EVI Common Stock deposited.
5.11 TAL OBLIGATIONS. EVI covenants and agrees to cause TAL to
fulfill its obligations under this Agreement in accordance with the provisions
of this Agreement.
ARTICLE VI
CONDITIONS
6.1 CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE
ARRANGEMENT. The respective obligations of each party to effect the
Arrangement shall be subject to the fulfillment at or prior to the Effective
Date of the following conditions:
(a) This Agreement and the Arrangement shall have been
approved and adopted by the requisite vote of the Taro Common
Shareholders as may be required by law, by the Court, by the rules of
the TSE and by any applicable provisions of the Taro Articles or its
bylaws;
(b) No order shall have been entered and remain in effect
in any action or proceeding before any foreign, federal or state court
or governmental agency or other foreign, federal or province
regulatory or administrative agency or commission that would prevent
or make illegal the consummation of the Arrangement;
(c) There shall have been obtained any and all material
permits, approvals and consents of securities commissions of any
jurisdiction, and of any other governmental body or agency, that
reasonably may be deemed necessary so that the consummation of the
Arrangement and the transactions contemplated thereby will be in
compliance with applicable laws, the failure to comply with which
would have a Taro MAE or TAL MAE; and
(d) All approvals and consents of third Persons (i) the
granting of which is necessary for the consummation of the Arrangement
or the transactions contemplated in connection therewith and (ii) the
non- receipt of which would have a Taro MAE or a TAL MAE, including
the receipt of the Interim Order and the Final Order.
6.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF EVI AND TAL. The
obligations of EVI and TAL to effect the Arrangement is, at the option of EVI
and TAL, also subject to the fulfillment at or prior to the Effective Date of
the following conditions:
(a) The representations and warranties of Taro contained
in Section 3.2 shall be accurate as of the date of this Agreement and
(except to the extent such representations and warranties speak
specifically as of an earlier date) as of the Effective Date as though
such representations and warranties had been made at and as of that
time; all of the terms, covenants and conditions of this Agreement to
be
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<PAGE> 31
complied with and performed by Taro on or before the Effective Date
shall have been duly complied with and performed in all material
respects; and a certificate to the foregoing effect dated the
Effective Date and signed by the chief executive officer and the
president of Taro shall have been delivered to TAL;
(b) There shall not have occurred or exist any fact or
condition that would reasonably result in a Taro MAE or would
constitute a material fixed or contingent liability to Taro, and TAL
shall have received a certificate signed by the president of Taro
dated the Effective Date to such effect;
(c) The Recommendation shall have been made and not
withdrawn or altered;
(d) There shall be no more than 5% of the total issued
and outstanding Taro Common Shares having exercised rights of dissent
in relation to the Arrangement approved at the Taro Shareholders
Meeting;
(e) TAL shall have received from Bennett Jones Verchere,
counsel to Taro, an opinion dated the Effective Date covering
customary matters relating to the Agreement and the Arrangement;
(f) EVI and TAL shall be reasonably satisfied that
immediately prior to the Effective Date (i) the aggregate number of
Taro Common Shares issued and outstanding and reserved for issuance
upon the exercise of outstanding Taro Options is not greater than
6,192,386 and (ii) no Person has any agreement or option or any right
or privilege (whether by law, preemptive right, contract or otherwise)
capable of becoming an agreement, option, right or privilege for the
purchase, subscription, allotment or issuance of any unissued
securities of Taro;
(g) No preliminary or permanent injunction or other order
of any court or other Governmental Entity shall be in effect or
threatened nor shall there be in effect any statute, rule, regulation
or executive order promulgated or enacted by any Governmental Entity
that, in any such case, prevents the consummation of the transactions
contemplated by this Agreement. No suit, action, claim, proceeding or
investigation before any Governmental Entity shall have been commenced
or threatened by any Person (other than EVI, TAL or their Affiliates)
seeking to prevent the transaction or asserting that the transaction
would be unlawful; and
(h) EVI shall have received from Taro a list of such
Persons, if any, that EVI, after discussions with counsel for Taro,
believes may be "affiliates" of Taro (the "Taro Affiliates"), within
the meaning of Rule 145 promulgated under the Securities Act. Taro
shall deliver or cause to be delivered to EVI an undertaking by each
Taro Affiliate in form satisfactory to EVI that no EVI Common Stock
received or to be received by such Taro Affiliate pursuant to the
Arrangement will be sold or disposed of except pursuant to an
effective registration statement under the Securities Act or in
accordance with the provisions of Rule 144 or Rule 145(d) promulgated
under the Securities Act or another exemption from registration under
the Securities Act.
6.3 ADDITIONAL CONDITIONS TO OBLIGATIONS OF TARO. The obligation
of Taro to effect the Arrangement is, at the option of Taro, also subject to
the fulfillment at or prior to the Effective Date of the following conditions:
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<PAGE> 32
(a) The representations and warranties of EVI and TAL
contained in Section 3.1 shall be accurate as of the date of this
Agreement and (except to the extent such representations and
warranties speak specifically as of an earlier date) as of the
Effective Date as though such representations and warranties had been
made at and as of that time; all the terms, covenants and conditions
of this Agreement to be complied with and performed by EVI and TAL on
or before the Effective Date shall have been duly complied with and
performed in all material respects; and a certificate to the foregoing
effect dated the Effective Date and signed by the chief executive
officer of TAL shall have been delivered to Taro;
(b) Taro shall have received from Fulbright & Jaworski
L.L.P., United States counsel to EVI and TAL, an opinion dated the
Effective Date covering customary matters relating to the laws of the
United States with respect to this Agreement and the Arrangement,
including an opinion to the effect that (i) subject to approval of the
Court and the issuance of the shares of EVI Common Stock pursuant to
the terms of the Plan of Arrangement, the shares of EVI Common Stock
to be issued pursuant to the Plan of Arrangement will be fully paid
and non-assessable shares of EVI Common Stock, (ii) the issuance of
the shares of EVI Common Stock pursuant to the Plan of Arrangement is
exempt from registration under the Securities Act, (iii) the shares of
EVI Common Stock issuable pursuant to the Plan of Arrangement will not
be "restricted securities" within the meaning of Rule 144(a)(iii)
promulgated under the Securities Act and resells by non-affiliates may
be effected without reliance upon Rule 144 and (iv) resells by
affiliates of Taro or New Taro would be subject to Rule 144 (excluding
the holding period requirement) absent registration under the
Securities Act or an available exemption, except that no opinion need
be provided with respect to shares of EVI Common Stock issued in
respect of Taro Common Shares that would be "restricted securities"
within the meaning of Rule 144(a)(iii) promulgated under the
Securities Act;
(c) Taro shall have received from Milner Fenerty,
Canadian counsel to EVI and TAL, an opinion dated the Effective Date
covering customary matters relating to the laws of Canada and the
provinces of Alberta and Ontario with respect to this Agreement and
the Arrangement, including that the first trade of the shares of EVI
Common Stock deposited pursuant to Section 5.10 and to be issued to
Taro Common Shareholders in exchange for Taro Common Shares or New
Taro Class B Common Shares, as the case may be, will not constitute a
"distribution" under the securities laws of the provinces of Alberta
and Ontario, subject to the restrictions, if any, arising as a result
of the undertakings to be provided pursuant to Section 6.2(h); and
(d) EVI shall have deposited with the Depositary the
shares of EVI Common Stock required for the exchange of the Taro
Common Shares held by Non-Residents of Canada and the exchange of the
New Taro Class B Common Shares pursuant to this Agreement and the Plan
of Arrangement and EVI shall have irrevocably directed the Depositary
to exchange the Taro Common Shares held by Non-Residents of Canada and
to exchange the New Taro Class B Common Shares with the shares of EVI
Common Stock deposited.
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<PAGE> 33
ARTICLE VII
MISCELLANEOUS
7.1 TERMINATION. This Agreement may be terminated and the
Arrangement and the other transactions contemplated herein may be abandoned at
any time prior to the Effective Date, whether prior to or after approval by the
Taro Common Shareholders:
(a) by mutual written consent of EVI, TAL and Taro;
(b) by EVI, TAL or Taro if (i) the Arrangement has not
been consummated on or before March 31, 1998 (provided that the right
to terminate this Agreement under this clause (i) shall not be
available to any party whose breach of any representation or warranty
or failure to fulfill any covenant or agreement under this Agreement
has been the cause of or resulted in the failure of the Arrangement to
occur on or before such date); (ii) any court of competent
jurisdiction, or some other governmental body or regulatory authority
shall have issued a permanent order, decree or ruling or taken any
other action restraining, enjoining or otherwise prohibiting the
Arrangement; (iii) the Taro Common Shareholders shall not approve the
Arrangement at the Taro Shareholders Meeting or at any adjournment
thereof; or (iv) in the opinion of the directors of Taro, acting in
good faith and upon the advice of their financial and legal advisors,
the directors' fiduciary duties under applicable law would require
such termination.
(c) by Taro if (i) EVI or TAL shall have failed to comply
in any material respect with any of the covenants or agreements
contained in this Agreement to be complied with or performed by EVI or
TAL at or prior to such date of termination (provided such breach has
not been cured within 30 days following receipt by TAL of written
notice from Taro of such breach and is existing at the time of
termination of this Agreement); or (ii) any representation or warranty
of EVI or TAL contained in this Agreement shall not be true in all
respects when made (provided such breach has not been cured within 30
days following receipt by EVI and TAL of written notice from Taro of
such breach and is existing at the time of termination of this
Agreement) or on and as of the Effective Date as if made on and as of
the Effective Date (except to the extent it relates to a particular
date), except for such failures to be so true and correct which would
not individually or in the aggregate, reasonably be expected to have a
TAL MAE, assuming the effectiveness of the Arrangement.
(d) by EVI or TAL if (i) Taro shall have failed to comply
in any material respect with any of the covenants or agreements
contained in this Agreement to be complied with or performed by Taro
at or prior to such date of termination (provided such breach has not
been cured within 30 days following receipt by Taro of written notice
from EVI or TAL of such breach and is existing at the time of
termination of this Agreement); (ii) any representation or warranty of
Taro contained in this Agreement shall not be true in all respects
when made (provided such breach has not been cured within 30 days
following receipt by Taro of written notice from EVI or TAL of such
breach and is existing at the time of termination of this Agreement)
or on and as of the Effective Date as if made on and as of the
Effective Date (except to the extent it relates to a particular date),
except for such failures to be so true and correct which would not
individually or in the aggregate, reasonably be expected to have a
Taro MAE assuming the effectiveness of the Arrangement; or (iii) the
Board of Directors of Taro withdraws, modifies or changes the
Recommendation in a manner adverse to TAL or shall have resolved to do
any of the foregoing.
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<PAGE> 34
7.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement by EVI, TAL or Taro as provided in Section 7.1, this Agreement shall
forthwith become void and there shall be no liability or obligation on the part
of EVI, TAL, 759572 or Taro, except (i) with respect to Sections 5.5 and 7.3
and this Section 7.2 and (ii) such termination shall not relieve any party
hereto for any intentional breach prior to such termination by a party hereto
of any of its representations or warranties or of any of its covenants or
agreements set forth in this Agreement.
7.3 FEE AND EXPENSE REIMBURSEMENTS.
(a) In the event that (x) any Person shall have made an
Acquisition Proposal and thereafter this Agreement is terminated by
TAL pursuant to Section 7.1(d)(iii) or (y) the Board of Directors of
Taro shall have withdrawn or modified in a manner adverse to EVI or
TAL the Recommendation or shall have recommended an Acquisition
Proposal to the Taro Common Shareholders and EVI and TAL shall have
terminated this Agreement pursuant to Section 7.1(d)(iii), then Taro
shall promptly, but in no event later than two days after such
termination, pay TAL a fee of $1.0 million (the "Taro Payment") or (z)
this Agreement is terminated for any reason other than those set forth
in clauses (x) or (y) above or in Section 7.1(c), and if within 12
months thereafter any Acquisition Proposal shall have been
consummated, then Taro shall promptly, but in no event later than two
days after consummation of any such transaction, pay TAL the Taro
Payment. Any amount payable hereunder shall be payable by wire
transfer of same day funds. Taro acknowledges that the agreements
contained in this Section 7.3(a) are an integral part of the
transactions contemplated in this Agreement, and that, without these
agreements, EVI and TAL would not enter into this Agreement;
accordingly, if Taro fails to promptly pay the amount due pursuant to
this Section 7.3(a), and, in order to obtain such payment, EVI or TAL
commences a suit that results in a judgment against Taro for the fee
set forth in this Section 7.3(a), Taro shall pay to EVI and TAL their
costs and expenses (including attorneys' fees) in connection with such
suit, together with interest on the amount of the fee at the rate of
12% per annum.
(b) In the event that Taro shall have terminated this
Agreement pursuant to Section 7.1(c), such termination shall be
without prejudice to any other remedy available to Taro in respect of
damages to Taro arising in connection with such termination.
7.4 WAIVER AND AMENDMENT. Any provision of this Agreement may be
waived at any time by the party that is, or whose shareholders are, entitled to
the benefits thereof. This Agreement may not be amended or supplemented at any
time, except by an instrument in writing signed on behalf of each party hereto,
provided that after this Agreement has been approved and adopted by the Taro
Common Shareholders, this Agreement may only be amended without further
authorization if such amendment is not prejudicial to the Taro Common
Shareholders and is not otherwise prohibited by law. The waiver by any party
hereto of any condition or of a breach of another provision of this Agreement
shall not operate or be construed as a waiver of any other condition or
subsequent breach. The waiver by any party hereto of any of the conditions
precedent to its obligations under this Agreement shall not preclude it from
seeking redress for breach of this Agreement other than with respect to the
condition so waived.
7.5 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties in this Agreement shall remain in effect only
until the Effective Date, at which time they will expire.
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<PAGE> 35
7.6 PUBLIC STATEMENTS. Taro and TAL agree to consult with each
other prior to issuing any press release or otherwise making any public
statement with respect to the transactions contemplated hereby.
7.7 ASSIGNMENT. This Agreement shall inure to the benefit of and
will be binding upon the parties hereto and their respective legal
representatives, successors and permitted assigns. Notwithstanding anything to
the contrary contained in this Agreement, EVI shall have the right to
contribute the capital stock of TAL on or before the Effective Date to a direct
or indirect wholly-owned subsidiary of EVI.
7.8 NOTICES. All notices, requests, demands, claims and other
communications which are required to be or may be given under this Agreement
shall be in writing and shall be deemed to have been duly given if (i)
delivered in person or by courier, (ii) sent by facsimile transmission, answer
back requested, or (iii) mailed, certified first class mail, postage prepaid,
return receipt requested, to the parties hereto at the following addresses:
if to Taro:
Taro Industries Limited
#7, 3401 -- 19th Street N.E.
Calgary, Alberta, Canada T2E 6S8
Attn: Frank J. Killoran
Facsimile: 403.291.2170
with a copy to:
Bennett Jones Verchere
4500 Bankers Hall East
855 -- 2nd Street S.W.
Calgary, Alberta, Canada T2P 4K7
Attn: William S. Rice
Facsimile: 403.265.7219
if to EVI or TAL:
EVI, Inc.
5 Post Oak Park, Suite 1760
Houston, Texas, U.S.A. 77027
Attn: Bernard J. Duroc-Danner
Facsimile: 713.297.8488
with a copy to:
Fulbright & Jaworski L.L.P.
1301 McKinney, Suite 5100
Houston, Texas, U.S.A. 77010-3095
Attn: Curtis W. Huff
Facsimile: 713.651.5246
and
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<PAGE> 36
Milner Fenerty
2900, 10180 -- 101 Street
Manulife Place
Edmonton, Alberta, Canada T5J 3V5
Attn: Richard A. Miller
Facsimile: 403.423.7276
or to such other address as any party shall have furnished to the other by
notice given in accordance with this Section 7.8. Such notices shall be
effective, (i) if delivered in person or by courier, upon actual receipt by the
intended recipient, (ii) if sent by facsimile transmission, when the answer
back is received, or (iii) if mailed, upon the earlier of five days after
deposit in the mail and the date of delivery as shown by the return receipt
therefor.
7.9 GOVERNING LAW. All questions arising out of this Agreement
and the rights and obligations created herein, or its validity, existence,
interpretation, performance or breach shall be governed by the laws of the
Province of Alberta and the laws of Canada applicable therein.
7.10 SEVERABILITY. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provision, covenants and
restrictions of this Agreement shall continue in full force and effect and
shall in no way be affected, impaired or invalidated.
7.11 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be an original, but all of which together shall constitute
one and the same agreement.
7.12 ENTIRE AGREEMENT: THIRD PARTY BENEFICIARIES. This Agreement,
the Plan of Arrangement and the Other Agreements constitute the entire
agreement and supersede all other prior agreements and understandings, both
oral and written, among the parties or any of them, with respect to the subject
matter hereof and neither this nor any document delivered in connection with
this Agreement confers upon any Person not a party hereto any rights or
remedies hereunder.
7.13 DISCLOSURE LETTERS.
(a) The Taro Disclosure Letter, executed by Taro as of
the date hereof, and delivered to TAL on the date hereof, contains all
disclosure required to be made by Taro under the various terms and
provisions of this Agreement. Each item of disclosure set forth in
the Taro Disclosure Letter specifically refers to the Article and
Section of the Agreement to which such disclosure responds, and shall
not be deemed to be disclosed with respect to any other Article or
Section of the Agreement.
(b) The TAL Disclosure Letter, executed by TAL as of the
date hereof, and delivered to Taro on the date hereof, contains all
disclosure required to be made by TAL under the various terms and
provisions of this Agreement. Each item of disclosure set forth in
the TAL Disclosure Letter specifically refers to the Article and
Section of the Agreement to which such disclosure responds, and shall
not be deemed to be disclosed with respect to any other Article or
Section of the Agreement.
7.14 CURRENCY. References to "$" or "dollars" in this Agreement
are to the lawful currency of Canada unless otherwise specified.
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<PAGE> 37
7.15 NUMBER AND GENDER. In this Agreement, words importing the
singular number only shall include the plural and vice versa, and words
importing any gender shall include all genders.
7.16 DIVISIONS, HEADINGS, ETC.. Division of this Agreement into
articles, sections, subsections and paragraphs and the insertion of headings
are for convenience of reference only and shall not affect the construction or
interpretation hereof. The terms "HEREIN", "HEREOF", "HEREUNDER" and similar
expressions refer to this Agreement and not to any particular article, section,
subsection, paragraph or other portion hereof and include any exhibits or
appendices hereto and any agreement or instruments supplementary or ancillary
hereto.
7.17 DATE OF ANY ACTION. In the event that any date on which an
action is required or permitted to be taken hereunder is not a Business Day,
such action shall be required or permitted to be taken on or by the next
succeeding day that is a Business Day.
[SIGNATURES ON FOLLOWING PAGE]
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<PAGE> 38
IN WITNESS WHEREO, each of the parties caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as of the
date first above written.
EVI, INC.
By: /s/ JAMES G. KILEY
-------------------------------------------
JAMES G. KILEY
Vice President, Chief Financial Officer,
Secretary and Treasurer
756745 ALBERTA LTD.
By: /s/ JAMES G. KILEY
-------------------------------------------
JAMES G. KILEY
Vice President, Secretary and
Treasurer
TARO INDUSTRIES LIMITED
By: /s/ FRANK J. KILLORAN
-------------------------------------------
FRANK J. KILLORAN
President and Chief Executive Officer
By: /s/ T. JERROLD JACKSON
-------------------------------------------
T. JERROLD JACKSON
Senior Vice President and
Chief Financial Officer
759572 ALBERTA LTD.
By: /s/ TERRY J. OWEN
-------------------------------------------
TERRY J. OWEN
President
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<PAGE> 39
As permitted by Item 601(b)(2) of Regulation S-K, the Company has not
filed any schedules or exhibits with this Exhibit No. 2.4. Listed below is a
brief description of the omitted schedules and exhibits. The Company agrees to
furnish supplementally a copy of any of such omitted schedules and exhibits to
the Commission upon request.
Exhibits
1 Plan of Arrangement
Schedules
3.2(a) Good Standing of Taro
3.2(b)(iii) Taro's Subsidiaries
3.2(d) Conflict with Instruments to which Taro is a Party
3.2(e) Liabilities of Taro
3.2(f) Absence of Certain Changes
3.2(g) Litigation
3.2(i) Employee Benefit Plans
3.2(j) Taxes
3.2(k) Environmental Matters
3.2(l) Severance Payments
3.2(m) Shareholder Agreements
3.2(p) Contracts
3.2(r) Intellectual Property
3.2(s) Insurance Policies
3.2(t) Loans of Taro
<PAGE> 1
EXHIBIT 4.1
<PAGE> 2
================================================================================
EVI, INC.,
AS ISSUER
AND
THE CHASE MANHATTAN BANK
AS TRUSTEE
------------------------------
FIFTH SUPPLEMENTAL INDENTURE
DATED AS OF DECEMBER 12, 1997
------------------------------
$120,000,000
10 1/4% SENIOR NOTES DUE 2004
10 1/4% SENIOR NOTES DUE 2004, SERIES B
================================================================================
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1
INCORPORATION OF INDENTURE; DEFINITIONS . . . . . . . . . . . . . . . . . . 2
1.1 Incorporation of Indenture . . . . . . . . . . . . . . . . . 2
1.2 Definitions . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2
AMENDING AND MODIFYING PROVISIONS . . . . . . . . . . . . . . . . . . . . . 2
2.1 Amendments to Definitions . . . . . . . . . . . . . . . . . 2
2.2 Amendments and Modifications to Article IX . . . . . . . . . 3
2.3 Deletion of Article XII . . . . . . . . . . . . . . . . . . 3
2.4 Amendments to Certain Cross-References . . . . . . . . . . . 4
2.5 Amendment of Exhibit A: Form of Note . . . . . . . . . . . 4
2.6 Amendment of Exhibit B: Form of Exchange Note . . . . . . . 4
2.7 Deletion of Exhibit E: Form of Notation on
Security Relating to Guarantee . . . . . . . . . . . . . . . 4
ARTICLE 3
RELEASE OF SUBSIDIARY GUARANTORS . . . . . . . . . . . . . . . . . . . . . 4
3.1 Release . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.2 Removal as Parties . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 4
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.1 Full Force and Effect . . . . . . . . . . . . . . . . . . . 4
4.2 The Supplement. . . . . . . . . . . . . . . . . . . . . . 5
4.3 The Trustee . . . . . . . . . . . . . . . . . . . . . . . . 5
4.5 Multiple Counterparts . . . . . . . . . . . . . . . . . . . 5
4.6 Headings for Convenience Only . . . . . . . . . . . . . . . 5
EXHIBIT A Form of Note . . . . . . . . . . . . . . . . . . . . . . . . A-1
EXHIBIT B Form of Exchange Note . . . . . . . . . . . . . . . . . . . B-1
</TABLE>
-i-
<PAGE> 4
FIFTH SUPPLEMENTAL INDENTURE
FIFTH SUPPLEMENTAL INDENTURE (this "Supplement"), dated and effective as
of December 12, 1997, is entered into by and among EVI, Inc. (formerly known as
Energy Ventures, Inc.), a Delaware corporation (the "Company"), and The Chase
Manhattan Bank (formerly known as Chemical Bank), a New York corporation, as
Trustee (the "Trustee").
RECITALS OF THE COMPANY
WHEREAS, the Company, the Subsidiary Guarantors and the Trustee have
executed and delivered an Indenture dated as of March 15, 1994, among the
Company, the Subsidiary Guarantors and the Trustee (the "Original Indenture")
providing for the issuance by the Company of $120,000,000 aggregate principal
amount of the Company's 10 1/4% Senior Notes due 2004 and 10 1/4% Senior Notes
due 2004, Series B (collectively, the "Securities") and pursuant to which the
Subsidiary Guarantors have agreed, jointly and severally, to unconditionally
guarantee the due and punctual payment of the principal of, premium, if any,
and interest on the Securities and all other amounts due and payable under the
Original Indenture and the Securities by the Company ("Indenture Obligations");
WHEREAS, the Company, Prideco, Inc., a Texas corporation and a wholly
owned subsidiary of the Company ("Prideco"), and the Trustee executed a First
Supplemental Indenture (the "First Supplemental Indenture"), dated as of June
30, 1995, pursuant to which Prideco became a Subsidiary Guarantor and agreed to
unconditionally guarantee the Indenture Obligations;
WHEREAS, the Company, EVI Arrow, Inc., a Delaware corporation and a
wholly owned subsidiary of the Company ("EVI Arrow"), EVI Watson Packers, Inc.,
a Delaware corporation and a wholly owned subsidiary of the Company ("EVI
Watson"), and the Trustee executed a Second Supplemental Indenture (the "Second
Supplemental Indenture"), dated and effective as of December 6, 1996, pursuant
to which EVI Arrow and EVI Watson became Subsidiary Guarantors and agreed to
unconditionally guarantee the Indenture Obligations;
WHEREAS, the Company, Ercon, Inc., a Delaware corporation and a wholly
owned subsidiary of the Company ("Ercon"), and the Trustee executed a Third
Supplemental Indenture (the "Third Supplemental Indenture"), dated and
effective as of May 1, 1997, pursuant to which Ercon became a Subsidiary
Guarantor and agreed to unconditionally guarantee the Indenture Obligations;
WHEREAS, the Company, XLS Holding, Inc., a Texas corporation and wholly
owned subsidiary of the Company ("XLS"), XL Systems, Inc., a Texas corporation
and wholly owned subsidiary of XLS ("XL Systems"), and the Trustee executed a
Fourth Supplemental Indenture (the "Fourth Supplemental Indenture"), dated and
effective as of August 25, 1997, pursuant to which XLS and XL Systems became
Subsidiary Guarantors and agreed to unconditionally guarantee the Indenture
Obligations (the Original Indenture, as supplemented by the First Supplemental
Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture
and the Fourth Supplemental Indenture, is hereinafter referred to as the
"Indenture");
WHEREAS, Securities in the aggregate principal amount of $120,000,000
are outstanding as of the date of execution hereof;
WHEREAS, the Company, pursuant to an Offer to Purchase and Consent
Solicitation Statement dated November 14, 1997 (the "Offer/Solicitation"),
offered to purchase for cash,
-1-
<PAGE> 5
upon the terms and subject to the conditions set forth in the
Offer/Solicitation, any and all of the Securities at a cash price equal to the
present value on the date of payment of $1,038.44 per $1,000 principal amount
and all future semi-annual interest payments to March 15, 1999, which is the
first date on which the Securities are redeemable at the option of the Company,
plus accrued and unpaid interest through the payment date, minus $25 per $1,000
principal amount of the Securities, and solicited consents from Holders of the
Notes to certain proposed amendments (the "Proposed Amendments") to the
Indenture and offered to pay to each Holder of Notes validly consenting to the
Proposed Amendments prior to 5:00 p.m., New York City time on December 1, 1997,
$25 for each $1,000 principal amount of Securities so validly consenting;
WHEREAS, it is the desire of the Company and the Holders of not less
than a majority in aggregate principal amount of the Securities to make certain
changes in the provisions of the Indenture by amending the Indenture to reflect
the Proposed Amendments, which changes have been approved by a Board Resolution
of the Board of Directors of the Company and by the written consent, filed with
the Trustee, of the Holders of not less than a majority in aggregate principal
amount of the Securities outstanding; and
WHEREAS, all conditions and requirements necessary to make this
Supplement valid and binding upon the Company and enforceable against the
Company in accordance with its terms, have been performed and fulfilled;
NOW, THEREFORE, in consideration of the above premises, each of the
parties hereto agrees, for the benefit of the others and for the equal and
proportionate benefit of the Holders of the Securities, as follows:
ARTICLE 1
INCORPORATION OF INDENTURE; DEFINITIONS
1.1 Incorporation of Indenture. This Supplement constitutes a
supplement to the Indenture, and the Indenture and this Supplement shall be
read together and shall have effect so far as practicable as though all of the
provisions thereof and hereof are contained in one instrument.
1.2 Definitions. Except as otherwise expressly provided or unless
the context otherwise requires, all terms used herein that are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
ARTICLE 2
AMENDING AND MODIFYING PROVISIONS
2.1 Amendments to Definitions.
(a) Section 1.1 of the Indenture is hereby amended by deleting
in their entirety the following definitions: "Acquired Indebtedness",
"Adjusted Net Assets", "Affiliate Transaction", "Attributable Debt",
"Authorized Agent", "Consolidated EBITDA", "Consolidated Fixed Charges",
"Consolidated Fixed Charge Coverage Ratio", "Consolidated Interest Expense",
"Consolidated Net Income", "Foreign Restricted Subsidiaries", "Funding
Guarantor", "Guarantee", "Judgment Currency", "Material Restricted
Subsidiaries", "Non-U.S. Subsidiary Guarantor", "Permitted Liens", "Reference
Period", "Restricted Payment", "Sale-Leaseback Transaction" and "Subsidiary
Guarantor".
-2-
<PAGE> 6
(b) All references in the Indenture to the terms "Guarantee"
or "Guarantees" and "Subsidiary Guarantor" or "Subsidiary Guarantors" are
hereby deleted in their entirety.
(c) The definitions of each of "Restricted Subsidiary" and
"Unrestricted Subsidiary" contained in Section 1.1 of the Indenture are hereby
amended and restated in their entirety to read as follows:
" "Restricted Subsidiary" means any Subsidiary other than an
Unrestricted Subsidiary. The Board of Directors of the Company,
by a Board Resolution, may designate any Unrestricted Subsidiary
to be a Restricted Subsidiary; provided that, immediately after
giving effect to such designation, no Default or Event of Default
shall have occurred and be continuing."
" "Unrestricted Subsidiary" means (a) any Subsidiary of an
Unrestricted Subsidiary or (b) any Subsidiary of the Company or
of a Restricted Subsidiary that is designated as an Unrestricted
Subsidiary by a Board Resolution of the Company in accordance
with the requirements of the following sentence. The Company may
designate any Subsidiary of the Company or of a Restricted
Subsidiary (including a newly acquired or newly formed Subsidiary
of the Company or any Restricted Subsidiary) to be an
Unrestricted Subsidiary by a Board Resolution of the Company, as
evidenced by written notice thereof delivered to the Trustee, if
after giving effect to such designation, (i) such Subsidiary has
total assets of $25,000 or less, (ii) such Subsidiary does not
own or hold any Capital Stock of, or any lien on any property of,
the Company or any Restricted Subsidiary and (iii) such
Subsidiary is not liable, directly or indirectly, with respect to
any Indebtedness other than Unrestricted Subsidiary
Indebtedness."
2.2 Amendments and Modifications to Article IX.
(a) Sections 9.7, 9.8, 9.9. 9.10, 9.12, 9.14 and 9.16 of
Article IX of the Indenture are hereby deleted in their entirety.
(b) All provisions of the Indenture, as amended by this
Supplement, that relate to or reference any of Sections 9.7, 9.8, 9.9. 9.10,
9.12, 9.14 or 9.16 shall be of no further force and effect.
2.3 Deletion of Article XII.
(a) Article XII of the Indenture is hereby deleted in its
entirety.
(b) As a result of the deletion of Article XII from the
Indenture:
(i) all references to any of Article XII and Sections
12.1 through 12.11 are hereby deleted in their entirety;
(ii) Subsidiary Guarantors are no longer required under
the terms of the Indenture; and
(iii) all provisions of the Indenture, as amended by this
Supplement, that relate to or reference Subsidiary Guarantor(s) or
Guarantee(s) shall be of no further force and effect.
-3-
<PAGE> 7
2.4 Amendments to Certain Cross-References.
(a) All cross-references contained in the Indenture to Section
9.11 are hereby amended so that such cross-references are to Section 9.7.
(b) All cross-references contained in the Indenture to Section
9.13 are hereby amended so that such cross-references are to Section 9.8.
(c) All cross-references contained in the Indenture to Section
9.15 are hereby amended so that such cross-references are to Section 9.9.
(d) All cross-references contained in the Indenture to Section
9.17 are hereby amended so that such cross-references are to Section 9.10.
(e) All cross-references contained in the Indenture to Section
9.18 are hereby amended so that such cross-references are to Section 9.11.
2.5 Amendment of Exhibit A: Form of Note. Exhibit A to the
Indenture is hereby amended and restated in its entirety as set forth on
Exhibit A hereto.
2.6 Amendment of Exhibit B: Form of Exchange Note. Exhibit B to the
Indenture is hereby amended and restated in its entirety as set forth on
Exhibit B hereto.
2.7 Deletion of Exhibit E: Form of Notation on Security Relating to
Guarantee. Exhibit E to the Indenture is hereby deleted from the Indenture.
ARTICLE 3
RELEASE OF SUBSIDIARY GUARANTORS
3.1 Release. Upon the execution of this Supplement, all guarantees
by a Subsidiary Guarantor, or liabilities and obligations of a Subsidiary
Guarantor under any provision of the Indenture or contained in any document
executed in connection with the Indenture, including guarantees of payment,
guarantees of collection and all other guarantees and assurances, of Energy
Ventures Far East Limited, Ercon, EVI Arrow, EVI Oil Tools, Inc. (formerly
known as EVI-Highland Pump Company), EVI Watson, Grant Prideco, Inc. (formerly
known as Grant TFW Inc.), Prideco, Production Oil Tools, Inc., XLS and XL
Systems (collectively, the "Released Subsidiaries") with respect to the
indebtedness, liabilities and obligations of the Company or any Released
Subsidiary under the Indenture or any document executed in connection therewith
shall be terminated, extinguished, released, discharged and without further
force or effect.
3.2 Removal as Parties. Upon the execution of this Supplement to the
Indenture, each of the Released Subsidiaries shall not be deemed to be parties
to the Indenture nor considered guarantors thereof or signatories thereto.
ARTICLE 4
MISCELLANEOUS
4.1 Full Force and Effect. Except as supplemented hereby, the
Indenture and the Securities are in all respects ratified and confirmed and all
the terms and provisions thereof shall remain in full force and effect.
-4-
<PAGE> 8
4.2 The Supplement. This Supplement shall be effective as of the
date above written.
4.3 The Trustee. The recitals contained herein shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Supplement.
4.4 Governing Law. This Supplement shall be governed by and
construed in accordance with the laws of the jurisdiction which govern the
Indenture and its construction.
4.5 Multiple Counterparts. This Supplement may be executed in any
number of counterparts each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
4.6 Headings for Convenience Only. The headings of the Sections of
this Supplement are used for convenience of reference only and shall not be
deemed to affect the meaning or construction of any of the provisions hereof.
-5-
<PAGE> 9
IN WITNESS WHEREOF, the parties hereto have caused this Supplement to be
duly executed and their respective seals to be affixed hereunto and duly
attested all as of the day and year first above written.
EVI, INC.
By: /s/ James G. Kiley
----------------------------------
James G. Kiley
Vice President and
Chief Financial Officer
Attest: /s/ Frances R. Powell
----------------------------
Frances R. Powell
Assistant Secretary
THE CHASE MANHATTAN BANK,
as Trustee
By: /s/ William B. Dodge
----------------------------------
Name: William B. Dodge
--------------------------------
Title: Vice President
-------------------------------
Attest: /s/ R. Lorenzen
----------------------------
Name: R. Lorenzen
------------------------------
Title: Senior Trust Officer
-----------------------------
<PAGE> 10
EXHIBIT A
[FORM OF FACE OF NOTE]
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET
FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND
HAS ACQUIRED THE NOTES EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION PURSUANT TO
REGULATION S UNDER THE SECURITIES ACT; (2) AGREES THAT IT WILL NOT WITHIN THREE
YEARS AFTER THE ORIGINAL ISSUANCE OF THE NOTES EVIDENCED HEREBY RESELL OR
OTHERWISE TRANSFER THE NOTES EVIDENCED HEREBY, EXCEPT (A) TO EVI, INC. (THE
"COMPANY"), (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED
STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO THE CHASE MANHATTAN BANK, AS TRUSTEE, A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THE NOTES EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM
SUCH TRUSTEE), OR (D) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904
UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THE NOTES EVIDENCED HEREBY ARE TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE NOTES EVIDENCED
HEREBY WITHIN THREE YEARS AFTER THE ORIGINAL ISSUANCE OF SUCH NOTES, THE HOLDER
MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE
MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE CHASE MANHATTAN
BANK, AS TRANSFER AGENT. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
COMPANY AND THE CHASE MANHATTAN BANK, AS TRANSFER AGENT, SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. THIS LEGEND WILL BE REMOVED AFTER THE EXPIRATION OF THREE YEARS FROM THE
ORIGINAL ISSUANCE OF THE NOTES EVIDENCED HEREBY. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE RESPECTIVE
MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT.
<PAGE> 11
EVI, INC.
10 1/4% Senior Note due 2004
No. ______________ $______________
EVI, INC. (formerly known as Energy Ventures, Inc.), a Delaware
corporation (herein called the "Company," which term includes any successor
corporation under the Indenture hereinafter referred to), for value received,
hereby promises to pay to __________________________________ or registered
assigns the principal sum of _______________________________ Dollars
($______________) on March 15, 2004, at the office or agency of the Company
referred to below, and to pay interest thereon on September 15, 1994, and
semiannually thereafter, on March 15 and September 15, in each year, accruing
from March 24, 1994, or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, at the rate of 10 1/4% per annum,
until the principal hereof is paid or duly provided for. Such interest rate
may be increased under certain circumstances as provided in the Registration
Rights Agreement (as defined in the Indenture). The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Note (or
one or more Predecessor Securities, as defined in such Indenture) is registered
at the close of business on the Regular Record Date for such interest, which
shall be March 1 or September 1 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date. Any such interest on this
Note which is payable, but is not punctually paid or duly provided for on any
Interest Payment Date and interest on such defaulted interest at the then
applicable interest rate borne by the Notes, to the extent lawful, shall
forthwith cease to be payable to the Holder on such Regular Record Date, and
may be paid, at the election of the Company, to the Person in whose name this
Note (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date to be fixed by the Trustee for the payment of
such Defaulted Interest, notice whereof shall be given to Holders of Notes not
less than 10 days prior to such Special Record Date, or may be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in said Indenture.
Payment of the principal of (and premium, if any) and interest on this Note
will be made at the office or agency of the Company maintained for that purpose
in New York, New York or at such other office or agency of the Company as may
be maintained for such purpose, in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at the
option of the Company by check mailed to the address of the Person entitled
thereto as such address shall appear on the Security Register. Interest shall
be computed on the basis of a 360-day year of twelve 30-day months.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
A-2
<PAGE> 12
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: EVI, INC.
-------------------------
By:
------------------------------
President
Attest: [SEAL]
- - - - - - - - - - - - - - - -------------------------------
Secretary
[FORM OF REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Company
designated as its 10 1/4% Senior Notes due 2004 (herein called the "Notes"),
limited (except as otherwise provided in the Indenture referred to below) in
aggregate principal amount to $120,000,000, issued and to be issued under an
indenture (herein called the "Indenture") dated as of March 15, 1994, as
amended by the Fifth Supplemental Indenture dated December 12, 1997, between
the Company and The Chase Manhattan Bank (formerly known as Chemical Bank), as
trustee (herein called the "Trustee," which term includes any successor Trustee
under the Indenture), to which the Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties, obligations and immunities thereunder of the
Company, the Trustee and the Holders of the Notes, and of the terms upon which
the Notes are, and are to be, authenticated and delivered. All terms used in
this Note not otherwise defined shall have the meanings assigned to them in the
Indenture.
The Notes are senior unsecured obligations of the Company ranking pari
passu with all other existing and future senior Indebtedness of the Company and
senior in right of payment to all existing and future subordinated Indebtedness
of the Company.
The Indenture contains provisions for discharge at any time of (a) the
entire indebtedness on this Note and (b) certain restrictive covenants and
certain Events of Default, in each case upon compliance with certain conditions
set forth therein.
The Notes are subject to redemption upon not less than 30 days', but
not more than 60 days', prior notice by first class mail, at any time on or
after March 15, 1999, as a whole or in part, at the election of the Company, at
a Redemption Price equal to the percentage of the principal amount set forth
below if redeemed during the 12-month period beginning March 15 of the years
indicated below, in each case together with
A-3
<PAGE> 13
accrued interest to the Redemption Date (subject to the right of Holders of
record on relevant Regular Record Dates to receive interest due on an Interest
Payment Date):
<TABLE>
<CAPTION>
Redemption
Year Price
---- ----------
<S> <C>
1999 103.844%
2000 102.563%
2001 101.281%
2002 and thereafter 100.000%
</TABLE>
Notes (or portions thereof) for whose redemption and payment provision is made
in accordance with the Indenture shall cease to bear interest from and after
the date fixed for redemption. If fewer than all of the Notes are to be
redeemed, the Trustee shall select the Notes or portions thereof (in integral
multiples of $1,000) to be redeemed by lot or pro rata or by such other method
as it shall deem fair and reasonable. In the event of redemption of this Note
in part only, a new Note or Notes for the unredeemed portion hereof shall be
issued in the name of the Holder hereof upon the cancellation hereof.
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and its Restricted Subsidiaries to make Asset
Dispositions or merge or consolidate with, or transfer all or substantially all
of their assets to, any other Person. If a Change of Control occurs at any
time, each Holder shall have the right to require that the Company repurchase
such Holder's Notes, in whole or in part, in integral multiples of $1,000, at a
purchase price in cash in an amount equal to 101% of the principal amount
thereof plus accrued and unpaid interest, if any, to the date of purchase. In
the event of certain Asset Dispositions, the Company may be required to make a
Repurchase Offer to purchase Notes having an aggregate principal amount equal
to the Excess Proceeds at a purchase price equal to 100% of their principal
amount plus accrued and unpaid interest, if any, to the Repurchase Date.
Subject to certain limitations in the Indenture, if an Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then Outstanding Notes may, by written notice to the
Company, declare all the Notes to be due and payable immediately, except that
in the case of an Event of Default arising from certain events of bankruptcy,
insolvency or reorganization relating to the Company or any of its Restricted
Subsidiaries, the Notes shall become due and payable immediately without
further action or notice.
The holders of a majority of the outstanding principal amount of the
Notes, by written notice to the Trustee, may rescind and annul an acceleration
and its consequences if (a) the Company has paid or deposited with the Trustee
a sum sufficient to pay (i) all overdue installments of interest on all the
Notes, (ii) the principal of, and premium, if any, on any Notes that have
become due otherwise than by such declaration of acceleration and interest
thereon at the rate or rates prescribed therefor in the Notes, (iii) to the
extent that payment of such interest is lawful, interest on the defaulted
interest at the rate or rates prescribed therefor in the Notes, and (iv) all
money paid or advanced by the Trustee under the Indenture and the reasonable
A-4
<PAGE> 14
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel; (b) all existing Events of Default, other than the nonpayment of
principal of or interest on the Notes that have become due solely because of
the acceleration, have been cured or waived; (c) the rescission would not
conflict with any judgment or decree of a court of competent jurisdiction; and
(d) the Company has delivered an Officers' Certificate to the Trustee to the
effect of clauses (b) and (c) of this sentence.
Subject to certain exceptions, the Indenture may be amended or
modified at any time by the Company and the Trustee with the consent of the
Holders of a majority in aggregate principal amount of the Notes at the time
Outstanding, and any past default or compliance with any provision may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the Notes at the time Outstanding. Any such consent or waiver by or
on behalf of the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
regardless of whether notation of such consent or waiver is made upon this
Note. Without notice to or the consent of any Holder, the Company and the
Trustee may amend or supplement the Indenture to cure any ambiguity, defect or
inconsistency, to comply with the successor corporation provisions of the
Indenture, to provide for uncertificated Notes in addition to or in place of
certificated Notes, to comply with any requirement to maintain qualification of
the Indenture under the Trust Indenture Act of 1939, or to make any change that
does not adversely affect the rights of any Holders of the Notes.
The Holder of any Note shall have the right on the terms stated in the
Indenture, which is absolute and unconditional, to receive payment of the
principal of (and premium, if any) and interest on such Note on the stated
maturity therefor and to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without consent of such Holder.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable on the Security
Register of the Company, upon surrender of this Note for registration of
transfer at the office or agency of the Company maintained for such purpose in
New York, New York, or at such other office or agency of the Company as may be
maintained for such purpose, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed by, the Holder hereof or his attorney duly authorized
in writing, and thereupon one or more new Notes, of authorized denominations
and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the Notes are
exchangeable for a like aggregate principal amount of Notes of different
authorized denominations, as requested by the Holder surrendering the same.
No service charge shall be made to the Holders for any registration of
transfer or exchange or redemption of Notes, but, with respect to an exchange
or transfer, the
A-5
<PAGE> 15
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
Prior to and at the time of due presentment of this Note for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Note is registered as
the owner hereof for all purposes, whether or not this Note be overdue, and
neither the Company, the Trustee nor any agent shall be affected by notice to
the contrary.
The laws of the State of New York shall govern this Note without
regard to principles of conflicts of law.
A-6
<PAGE> 16
ASSIGNMENT
(To be executed by the registered holder
if such holder desires to transfer this Note)
FOR VALUE RECEIVED _______________________________________ hereby sells,
assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
TAX IDENTIFYING NUMBER OF TRANSFEREE
- - - - - - - - - - - - - - - --------------------------------------------------------------------------------
- - - - - - - - - - - - - - - --------------------------------------------------------------------------------
(Please print name and address of transferee)
- - - - - - - - - - - - - - - --------------------------------------------------------------------------------
this Note, together with all right, title and interest herein, and does hereby
irrevocably constitute and appoint _______ Attorney to transfer this Note on
the Security Register, with full power of substitution.
Dated:
------------------------------------
Signature
Signature Guaranteed:
------------------------------------
NOTICE: The signature to the foregoing Assignment must correspond to the name
as written upon the face of this Note in every particular, without alteration
or any change whatsoever.
A-7
<PAGE> 17
ELECTION OF HOLDER TO REQUIRE REPURCHASE
1. Pursuant to Section [ ] 9.8 [ ] 9.9 (check appropriate box) of
the Indenture, the undersigned hereby elects to have this Note, or portion
hereof in the principal amount designated below, repurchased by the Company, in
accordance with the terms of this Note and such Section.
2. The undersigned hereby directs that any new Note representing
any principal amount hereof that is not to be repurchased in accordance with
these instructions be issued and delivered to the registered Holder hereof,
unless a different name is indicated below.
Dated:
----------
Fill in for registration of new
Note if to be issued otherwise
than to the registered Holder.
--------------------------------
Signature
Signature Guaranteed:
- - - - - - - - - - - - - - - --------------------------------
Name
--------------------------------
- - - - - - - - - - - - - - - --------------------------------
Address Principal amount to be redeemed
(in an integral multiple of
$1,000, if less than all):
$
- - - - - - - - - - - - - - - -------------------------------- ----------------
(Please print name and address,
including zip code number)
NOTICE: The signature to the foregoing Election must correspond to the name as
written upon the face of this Note in every particular, without alteration or
any change whatsoever.
A-8
<PAGE> 18
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Notes referred to in the within mentioned
Indenture.
Dated: THE CHASE MANHATTAN BANK,
--------------------- as Trustee
By:
-------------------------------
Authorized Officer
A-9
<PAGE> 19
CERTIFICATE TO BE DELIVERED UPON [ ] EXCHANGE OF A BENEFICIAL INTEREST IN THE
GLOBAL SECURITY FOR DEFINITIVE SECURITIES OR [ ] EXCHANGE OR REGISTRATION OF
TRANSFER OF DEFINITIVE SECURITIES
Re: 10 1/4% Senior Notes Due 2004 ("Notes") of EVI, Inc.
This Certificate relates to $_____________ principal amount of Notes
(such designated series hereinafter referred to as the "Securities") currently
registered in ________ book-entry or ____________ definitive form in the name
of __________________________ (the "Transferor").
All capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in the Indenture relating to the Securities.
The Transferor or Transferee:
[ ] has requested the Trustee by written order to deliver in
exchange for its beneficial interest in the Global Security held by the
Depository or the Securities Custodian a Definitive Security or Securities of
authorized denominations and an aggregate principal amount equal to its
beneficial interest in such Global Security (or the portion thereof indicated
above); or
[ ] has requested the Trustee by written order to exchange or
register the transfer of a Definitive Security or Securities.
In connection with such request and in respect of each such Security,
the Transferor does hereby certify as follows:
(1) [ ] Such Security is being transferred to EVI, Inc.
(2) [ ] Such Security is being acquired for its own account,
without transfer.
(3) [ ] Such Security is being transferred pursuant to an
effective registration statement under the Securities Act.
(4) [ ] Such Security is being transferred to a qualified
institutional buyer (as defined in Rule 144A under the Securities Act)
in accordance with Rule 144A under the Securities Act.
(5) [ ] Such Security is being transferred pursuant to the
exemption from the registration requirements of the Securities Act
provided by Regulation S thereunder.*
(6) [ ] Such Security is being transferred to an Institutional
Accredited Investor that has furnished to the Trustee a signed letter
containing certain
A-10
<PAGE> 20
representations and agreements (the form of which can be obtained from
the Trustee).*
(7) [ ] Such Security is being transferred pursuant to another
available exemption from the registration requirements of the
Securities Act.*
* If box (5), (6) or (7) is checked, such transfer is subject to the
Transferor's having previously furnished to the Company and the Trustee such
certifications, legal opinions or other information requested to confirm that
such transfer is being made pursuant to an exemption from, or not in a
transaction subject to, the registration requirements of the Securities Act,
such as the exemption provided by Rule 144 thereunder.
By:
----------------------------
Date:
-----------------------------
To be dated the date of
presentation or surrender
A-11
<PAGE> 21
EXHIBIT B
[FORM OF FACE OF EXCHANGE NOTE]
EVI, INC.
10 1/4% Senior Note due 2004
No. ______________ $______________
EVI, INC. (formerly known as Energy Ventures, Inc.), a Delaware
corporation (herein called the "Company," which term includes any successor
corporation under the Indenture hereinafter referred to), for value received,
hereby promises to pay to __________________________________ or registered
assigns the principal sum of _______________________________ Dollars
($______________) on March 15, 2004, at the office or agency of the Company
referred to below, and to pay interest thereon on September 15, 1994, and
semiannually thereafter, on March 15 and September 15, in each year, accruing
from March 24, 1994, or from the most recent Interest Payment Date to which
interest on this Note, or any other Security for which this Note may have been
issued or exchanged, has been paid or duly provided for, at the rate of 10 1/4%
per annum, until the principal hereof is paid or duly provided for. Such
interest rate may be increased under certain circumstances as provided in the
Registration Rights Agreement (as defined in the Indenture). The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in such Indenture, be paid to the Person in whose name this
Note (or one or more Predecessor Securities, as defined in such Indenture) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the March 1 or September 1 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest on this Note which is payable, but is not punctually paid or duly
provided for on any Interest Payment Date and interest on such defaulted
interest at the then applicable interest rate borne by the Notes, to the extent
lawful, shall forthwith cease to be payable to the Holder on such Regular
Record Date, and may be paid, at the election of the Company, to the Person in
whose name this Note (or one or more Predecessor Securities) is registered at
the close of business on a Special Record Date to be fixed by the Trustee for
the payment of such Defaulted Interest, notice whereof shall be given to
Holders of Notes not less than 10 days prior to such Special Record Date, or
may be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Notes may be listed, and
upon such notice as may be required by such exchange, all as more fully
provided in said Indenture. Payment of the principal of (and premium, if any)
and interest on this Note will be made at the office or agency of the Company
maintained for that purpose in New York, New York or at such other office or
agency of the Company as may be maintained for such purpose, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that payment
of interest may be made at the option of the Company by check mailed to the
address of the Person entitled thereto as such address shall appear on the
Security Register. Interest shall be computed on the basis of a 360-day year
of twelve 30-day months.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
B-1
<PAGE> 22
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: EVI, INC.
------------------------
By:
----------------------------------
President
Attest: [SEAL]
- - - - - - - - - - - - - - - ------------------------------
Secretary
[FORM OF REVERSE OF EXCHANGE NOTE]
This Note is one of a duly authorized issue of Notes of the Company
designated as its 10 1/4% Senior Notes due 2004, Series B (herein called the
"Notes"), limited (except as otherwise provided in the Indenture referred to
below) in aggregate principal amount to $120,000,000, issued and to be issued
under an indenture (herein called the "Indenture") dated as of March 15, 1994,
as amended by the Fifth Supplemental Indenture dated December 12, 1997, between
the Company and The Chase Manhattan Bank (formerly known as Chemical Bank), as
trustee (herein called the "Trustee," which term includes any successor Trustee
under the Indenture), to which the Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties, obligations and immunities thereunder of the
Company, the Trustee and the Holders of the Notes, and of the terms upon which
the Notes are, and are to be, authenticated and delivered. All terms used in
this Note not otherwise defined shall have the meanings assigned to them in the
Indenture.
The Notes are senior unsecured obligations of the Company ranking pari
passu with all other existing and future senior Indebtedness of the Company and
senior in right of payment to all existing and future subordinated Indebtedness
of the Company.
The Indenture contains provisions for discharge at any time of (a) the
entire indebtedness on this Note and (b) certain restrictive covenants and
certain Events of Default, in each case upon compliance with certain conditions
set forth therein.
The Notes are subject to redemption upon not less than 30 days', but
not more than 60 days', prior notice by first class mail, at any time on or
after March 15, 1999, as a whole or in part, at the election of the Company, at
a Redemption Price equal to the percentage of the principal amount set forth
below if redeemed during the 12-month period beginning March 15 of the years
indicated below, in each case together with
B-2
<PAGE> 23
accrued interest to the Redemption Date (subject to the right of Holders of
record on relevant Regular Record Dates to receive interest due on an Interest
Payment Date):
<TABLE>
<CAPTION>
Redemption
Year Price
---- ----------
<S> <C>
1999 103.844%
2000 102.563%
2001 101.281%
2002 and thereafter 100.000%
</TABLE>
Notes (or portions thereof) for whose redemption and payment provision is made
in accordance with the Indenture shall cease to bear interest from and after
the date fixed for redemption. If fewer than all of the Notes are to be
redeemed, the Trustee shall select the Notes or portions thereof (in integral
multiples of $1,000) to be redeemed by lot or pro rata or by such other method
as it shall deem fair and reasonable. In the event of redemption of this Note
in part only, a new Note or Notes for the unredeemed portion hereof shall be
issued in the name of the Holder hereof upon the cancellation hereof.
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and its Restricted Subsidiaries to make Asset
Dispositions or merge or consolidate with, or transfer all or substantially all
of their assets to, any other Person. If a Change of Control occurs at any
time, each Holder shall have the right to require that the Company repurchase
such Holder's Notes, in whole or in part, in integral multiples of $1,000, at a
purchase price in cash in an amount equal to 101% of the principal amount
thereof plus accrued and unpaid interest, if any, to the date of purchase. In
the event of certain Asset Dispositions, the Company may be required to make a
Repurchase Offer to purchase Notes having an aggregate principal amount equal
to the Excess Proceeds at a purchase price equal to 100% of their principal
amount plus accrued and unpaid interest, if any, to the Repurchase Date.
Subject to certain limitations in the Indenture, if an Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then Outstanding Notes may, by written notice to the
Company, declare all the Notes to be due and payable immediately, except that
in the case of an Event of Default arising from certain events of bankruptcy,
insolvency or reorganization relating to the Company or any of its Restricted
Subsidiaries, the Notes shall become due and payable immediately without
further action or notice.
The holders of a majority of the outstanding principal amount of the
Notes, by written notice to the Trustee, may rescind and annul an acceleration
and its consequences if (a) the Company has paid or deposited with the Trustee
a sum sufficient to pay (i) all overdue installments of interest on all the
Notes, (ii) the principal of, and premium, if any, on any Notes that have
become due otherwise than by such declaration of acceleration and interest
thereon at the rate or rates prescribed therefor in the Notes, (iii) to the
extent that payment of such interest is lawful, interest on the defaulted
interest at the rate or rates prescribed therefor in the Notes, and (iv) all
money paid or advanced by the Trustee under the Indenture and the reasonable
B-3
<PAGE> 24
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel; (b) all existing Events of Default, other than the nonpayment of
principal of or interest on the Notes that have become due solely because of
the acceleration, have been cured or waived; (c) the rescission would not
conflict with any judgment or decree of a court of competent jurisdiction; and
(d) the Company has delivered an Officers' Certificate to the Trustee to the
effect of clauses (b) and (c) of this sentence.
Subject to certain exceptions, the Indenture may be amended or
modified at any time by the Company and the Trustee with the consent of the
Holders of a majority in aggregate principal amount of the Notes at the time
Outstanding, and any past default or compliance with any provision may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the Notes at the time Outstanding. Any such consent or waiver by or
on behalf of the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
regardless of whether notation of such consent or waiver is made upon this
Note. Without notice to or the consent of any Holder, the Company and the
Trustee may amend or supplement the Indenture to cure any ambiguity, defect or
inconsistency, to comply with the successor corporation provisions of the
Indenture, to provide for uncertificated Notes in addition to or in place of
certificated Notes, to comply with any requirement to maintain qualification of
the Indenture under the Trust Indenture Act of 1939, or to make any change that
does not adversely affect the rights of any Holders of the Notes.
The Holder of any Note shall have the right on the terms stated in the
Indenture, which is absolute and unconditional, to receive payment of the
principal of (and premium, if any) and interest on such Note on the stated
maturity therefor and to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without consent of such Holder.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable on the Security
Register of the Company, upon surrender of this Note for registration of
transfer at the office or agency of the Company maintained for such purpose in
New York, New York, or at such other office or agency of the Company as may be
maintained for such purpose, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed by, the Holder hereof or his attorney duly authorized
in writing, and thereupon one or more new Notes, of authorized denominations
and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the Notes are
exchangeable for a like aggregate principal amount of Notes of different
authorized denominations, as requested by the Holder surrendering the same.
No service charge shall be made to the Holders for any registration of
transfer or exchange or redemption of Notes, but, with respect to an exchange
or transfer, the
B-4
<PAGE> 25
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
Prior to and at the time of due presentment of this Note for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Note is registered as
the owner hereof for all purposes, whether or not this Note be overdue, and
neither the Company, the Trustee nor any agent shall be affected by notice to
the contrary.
The laws of the State of New York shall govern this Note without
regard to principles of conflicts of law.
B-5
<PAGE> 26
ASSIGNMENT
(To be executed by the registered holder
if such holder desires to transfer this Note)
FOR VALUE RECEIVED _______________________________________ hereby sells,
assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
TAX IDENTIFYING NUMBER OF TRANSFEREE
- - - - - - - - - - - - - - - --------------------------------------------------------------------------------
- - - - - - - - - - - - - - - --------------------------------------------------------------------------------
(Please print name and address of transferee)
- - - - - - - - - - - - - - - --------------------------------------------------------------------------------
this Note, together with all right, title and interest herein, and does hereby
irrevocably constitute and appoint _______ Attorney to transfer this Note on
the Security Register, with full power of substitution.
Dated:
--------------------------------------
Signature
Signature Guaranteed:
--------------------------------------
NOTICE: The signature to the foregoing Assignment must correspond to the name
as written upon the face of this Note in every particular, without alteration
or any change whatsoever.
B-6
<PAGE> 27
ELECTION OF HOLDER TO REQUIRE REPURCHASE
1. Pursuant to Section [ ] 9.8 [ ] 9.9 (check appropriate box)
of the Indenture, the undersigned hereby elects to have this Note, or portion
hereof in the principal amount designated below, repurchased by the Company, in
accordance with the terms of this Note and such Section.
2. The undersigned hereby directs that any new Note representing
any principal amount hereof that is not to be repurchased in accordance with
these instructions be issued and delivered to the registered Holder hereof,
unless a different name is indicated below.
Dated:
----------
Fill in for registration of new
Note if to be issued otherwise
than to the registered Holder.
------------------------------------
Signature
Signature Guaranteed:
- - - - - - - - - - - - - - - -------------------------------
Name
------------------------------------
- - - - - - - - - - - - - - - -------------------------------
Address Principal amount to be redeemed
(in an integral multiple of $1,000,
if less than all):
$
- - - - - - - - - - - - - - - ------------------------------- ----------------
(Please print name and address,
including zip code number)
NOTICE: The signature to the foregoing Election must correspond to the name as
written upon the face of this Note in every particular, without alteration or
any change whatsoever.
B-7
<PAGE> 28
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Notes referred to in the within mentioned
Indenture.
Dated: THE CHASE MANHATTAN BANK,
------------------ as Trustee
By:
---------------------------------
Authorized Officer
B-8
<PAGE> 1
EXHIBIT 4.2
<PAGE> 2
SECOND AMENDMENT
TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment") dated as of October 23, 1997, is among EVI, INC., a Delaware
corporation formerly known as Energy Ventures, Inc. (the "Company"), the
Subsidiary Guarantors (as defined below), the banks and other financial
institutions listed on the signature pages under the heading "Lenders"
(collectively, the "Lenders"), and THE CHASE MANHATTAN BANK, as agent (in such
capacity, the "Agent") for the Lenders.
PRELIMINARY STATEMENT
(a) The Company, EVI Oil Tools, Inc., a Delaware corporation; Grant
Prideco, Inc., a Delaware corporation ("Grant Prideco"); Prideco Holdings,
Inc., a Delaware corporation; Channelview Real Property, Inc., a Delaware
corporation; EVI Management Inc., a Delaware corporation; EVI Arrow, Inc., a
Delaware corporation; and EVI Watson Packers, Inc., a Delaware corporation
(collectively, the "Subsidiary Guarantors"), the Lenders and the Agent entered
into an Amended and Restated Credit Agreement dated as of December 6, 1996, as
amended pursuant to a First Amendment to Amended and Restated Credit Agreement
dated as of August 8, 1997 among the Company, the Subsidiary Guarantors, the
Lenders and the Agent (the Amended and Restated Credit Agreement as so amended
being the "Original Credit Agreement").
(b) Pursuant to a memorandum of agreement dated October 23, 1997
among the Company, the Lenders and the Agent (the "October Agreement" and the
Original Credit Agreement
<PAGE> 3
as affected by the October Agreement being the "Credit Agreement"), (1) the
Lenders, inter alia, (A) consented and agreed to the sale by the Company of up
to $460,000,000 in convertible subordinated debentures (the "Subordinated
Debentures") and agreed that Indebtedness resulting from that sale will
constitute Permitted Indebtedness, (B) released the Collateral and (C)
consented and agreed to certain acquisitions and waived compliance with
Sections 8.02 and 8.06 of the Credit Agreement with respect to such
acquisitions and (2) the Company agreed (A) to repay all outstanding Loans upon
receipt of the proceeds of the sale of the Subordinated Debentures and (B) that
until all of the Lenders provide their written consent thereto, not to deliver
any Borrowing Requests to the Agent.
(c) The Company, the Subsidiary Guarantors, the Lenders and the Agent
wish to execute this Amendment to, inter alia, further evidence the October
Agreement and to amend certain provisions of the Credit Agreement to conform
those provisions to the October Agreement.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, the Company, the Subsidiary Guarantors, the
Lenders and the Agent hereby agree as follows:
SECTION 1. Amendments to Section 1.01 of the Credit Agreement. (a)
The following defined terms contained in Section 1.01 of the Credit Agreement
together with their respective definitions are hereby deleted: "Collateral,"
"Company Pledge Agreement," "Domestically Owned Foreign Restricted Subsidiary,"
Foreign Owned Restricted Subsidiary," " Permitted Collateral Liens,""Secured
Parties," "Security Documents," "Subsidiary Guarantors Pledge Agreements" and
"Subsidiary Guarantors Security Agreements."
-2-
<PAGE> 4
(b) The definition of the term "Permitted Indebtedness" in Section
1.01 of the Credit Agreement is hereby amended by deleting the word "and" at
the end of clause (p) thereof, substituting a ";" for the "." at the end of
clause (q) and adding the following clauses (r) and (s):
"(r) the Subordinated Debentures; and
(s) after the BMW Acquisition, the Trico Indebtedness.".
(c) The definition of the term "Eligible Inventory" is hereby amended
in its entirety to read as follows:
"'Eligible Inventory' means, at any time, all inventory (as such
term is defined in Section 9-109(4) of the UCC) of a Loan Party for
which each of the following statements is accurate and complete (and the
Company by including such inventory in any computation of the Borrowing
Base shall be deemed to represent and warrant to the Agent, the Issuing
Bank and each Lender the accuracy and completeness of such statements as
to said inventory):
(a) Said inventory shall be valued in accordance with
GAAP and (i) shall include raw materials and finished goods but
(ii) shall not include goods that are classified as "work-in-
progress";
(b) Said inventory is in good condition, meets all
standards imposed by any Governmental Authority having regulatory
authority over it, its use and/or sale and is either currently
usable or currently salable in the normal course of business of a
Loan Party;
(c) Said inventory is not (i) located outside the
United States of America or (ii) in the possession or control of
any warehouseman, bailee, or any agent or processor for or
customer of a Loan Party or, if it is in any such Person's
possession, such warehouseman, bailee, agent, processor or
customer and such warehouseman, bailee, agent, processor or
customer has waived or subordinated any rights to payment secured
by any Lien (other than Permitted Borrowing Base Liens);
(d) Said inventory is, and at all times will be, free
and clear of all Liens, Permitted Borrowing Base Liens of a type
described in clause (a) or (b) of the definition of that term;
(e) Said inventory does not include goods that have
been damaged or returned;
-3-
<PAGE> 5
(f) Said inventory is not Permitted Consigned
Inventory; and
(g) Said inventory does not include goods that are not
owned by a Loan Party or that are held by a Loan Party pursuant
to a consignment agreement.".
(d) The definition of "Eligible Receivables" is hereby amended in its
entirety to read as follows:
"'Eligible Receivables' means, at any time, the net invoice or
ledger amount owing on each account (which shall mean any "account" as
such term is defined in Section 9-106 of the UCC and any "chattel paper"
as such term is defined in Section 9-105(l)(b) of the UCC) of a Loan
Party arising from the sale, lease or exchange of goods or the rendering
of any service by a Loan Party (net of any credit balance, returns,
trade discounts or unbilled amounts or retention) for which each of the
following statements is accurate and complete (and the Company by
including such account in any computation of the Borrowing Base shall be
deemed to represent and warrant to the Agent, the Issuing Bank and the
Lenders the accuracy and completeness of such statements):
(a) Said account or chattel paper is a binding and
valid obligation of the obligor thereon in full force and effect;
(b) Said account or chattel paper is genuine as
appearing on its face or as represented in the books and records
of a Loan Party;
(c) Said account or chattel paper is free from claims
regarding rescission, cancellation or avoidance, whether by
operation of law or otherwise;
(d) Payment of said account or chattel paper is less
than 90 days past due as determined by the due date stated on the
invoice therefor (or if said account or chattel paper is not paid
by reference to an invoice in the ordinary course of business but
instead by reference to the terms of the agreements creating said
account or chattel paper, said account or chattel paper has not
remained unpaid beyond 90 days after the due date therefor);
(e) Said account or chattel paper is net of
concessions, offset (excluding any accounts payable offset
supported by a letter of credit) or understandings with the
obligor thereon of any kind;
(f) Said account or chattel paper is, and at all times
will be, free and clear of all Liens;
-4-
<PAGE> 6
(g) Said account or chattel paper is derived from goods
sold or leased or services rendered to the obligor in the
ordinary course of business of a Loan Party;
(h) Said account or chattel paper is not (i) carried on
the books of a Loan Party, as an "exchange account receivable" or
(ii) subject to an exchange agreement with another Person;
(i) Said account or chattel paper is not payable by an
obligor who is more than 90 days past due with regard to 20% or
more of the total accounts and chattel paper owed by such obligor
or any of its Affiliates;
(j) The obligor on said account or chattel paper has
been sent an invoice within 10 days after said account or chattel
paper has been entered on the financial records of a Loan Party;
(k) All consents, licenses, approvals or authorizations
of, or registrations or declarations with, any Governmental
Authority required to be obtained, effected or given in
connection with the execution, delivery and performance of said
account or chattel paper by each party obligated thereunder have
been duly obtained, effected or given and are in full force and
effect;
(l) The obligor on said account or chattel paper (i) is
not the subject of any bankruptcy or insolvency proceeding, has
not had a trustee or receiver appointed for all or a substantial
part of its property, has not made an assignment for the benefit
of creditors, admitted its inability to pay its debts as they
mature or suspended its business; and (ii) is not affiliated,
directly or indirectly, with the Company as a Subsidiary or other
Affiliate, employee or otherwise;
(m) The goods sold or leased or services rendered
resulting in the right to payment in connection with said account
were sold, leased or rendered in a state or territory of the
United States of America (excluding, however, such goods which
are sold or leased for export outside of the United States of
America), said account or chattel paper is payable in the United
States of America, and the obligor thereon is subject to the
jurisdiction of federal, state or provincial courts in the United
States of America, unless said account or chattel paper is backed
by a letter of credit in form and substance acceptable to the
Agent and issued by an issuer, having capital and surplus in
excess of $500,000,000 and having ratings of A1 and P1 by
Standard & Poor's Rating Group and Moody's Investors Service,
Inc., respectively;
(n) In the case of the sale of goods, the subject goods
have been sold to an obligor on an absolute sale basis on open
account and not on consignment, on approval or a "sale or return"
basis or subject to any other repurchase or return
-5-
<PAGE> 7
agreement and no material part of the subject goods has been
returned, rejected, lost or damaged, the said account is not,
evidenced by chattel paper or an instrument of any kind; and
(o) Said account or chattel paper has not been
otherwise determined by the Agent, in its good faith discretion,
to be unacceptable in accordance with its customary practices for
facilities of this nature;
provided, that, if any account, when added to all other accounts that
are obligations of the same obligor and its Affiliates, results in a
total sum that exceeds 15% of the total balance then due on all Eligible
Receivables, the amount of said account in excess of 15% of such total
balance then due shall be excluded from Eligible Receivables.".
(e) Section 1.01 of the Credit Agreement is hereby amended by adding
the following defined terms:
"'BMW Acquisition' means the acquisition by the Company of all
the capital stock of BMW Monarch (Lloydminister), Ltd.; BMW Pump Inc.;
Makelki Holdings Ltd.; 589979 Alberta Ltd.; 600969 Alberta Ltd.; and
391862 Alberta Ltd.; each a corporation organized under the laws of the
Province of Alberta, Canada, for a total purchase price of 130,000,000
Canadian dollars.
'Permitted Borrowing Base Liens' means (a) Liens for taxes not
yet delinquent or which are being contested in good faith by appropriate
proceedings; provided that adequate reserves with respect thereto are
being maintained on the books of the Company in conformity with GAAP,
(b) carriers', warehouseman's, landlords', storage, mechanics',
materialmen's, repairmen's or other like Liens securing liabilities
arising in the ordinary course of business and not overdue for a period
of more than 60 days or which are being contested in good faith by
appropriate proceedings, (c) Liens of creditors of consignees of
Permitted Consigned Inventory and (d) other Liens on Inventory of the
Company or any of its Subsidiaries provided the aggregate amount of
liabilities secured by all such Liens does not exceed $1,000,000.
'Trico' means Trico Industries, Inc., a California corporation.
'Trico Acquisition' means the acquisition by the Company of all
the capital stock of Trico for a total purchase price of $105,000,000
(subject to adjustment for changes in the net assets of Trico since
August 31, 1997 to the date of such acquisition) and a guarantee by the
Company of the Trico Indebtedness.
-6-
<PAGE> 8
'Trico Indebtedness' means, without duplication, $8,730,000
original principal amount of variable rate demand industrial development
revenue refunding bonds and the guarantee thereof by the Company.
'Subordinated Debentures' means up to $460,000,000 original
principal amount of the Company's convertible subordinated debentures
due 2027.".
SECTION 2. Amendments to Section 8.02(f) of the Credit Agreement. (a)
Section 8.02(f) of the Credit Agreement is hereby amended in its entirety to
read as follows:
"SECTION 8.02. Consolidation, Merger, Sale or Purchase of
Assets, Etc. The Company will not, and will not permit any Restricted
Subsidiary to, wind up, liquidate or dissolve its affairs, or effect any
merger or consolidation, sell, lease or otherwise dispose of all or any
part of its property or assets (other than sales of inventory in the
ordinary course of business), or purchase, lease or otherwise acquire
(in one or a series of related transactions) all or any part of the
property or assets or all or any part of the Capital Stock of any
Person, or (unless such agreement shall expressly condition consummation
by the Company or such Restricted Subsidiary of the transactions
contemplated thereby upon receipt of the prior written consent of the
Majority Lenders) agree to do any of the foregoing at any future time,
except that this Section 8.02 shall not prohibit any of the following
transactions, or any agreement to effect the same:
(a) (i) the purchase, lease or sale of inventory, (ii)
the lease pursuant to Capital Leases of tangible personal
property or (iii) the acquisition of facilities, equipment and
other assets, in each case, by the Company or any Restricted
Subsidiary in the ordinary course of business;
(b) if, at the time thereof and immediately after
giving effect thereto, no Event of Default or Default shall have
occurred and be continuing (i) the merger of any domestic Wholly
Owned Restricted Subsidiary into the Company in a transaction in
which the Company is the surviving Person, or the merger or
consolidation of any domestic Wholly Owned Restricted Subsidiary
with and into any other domestic Wholly Owned Restricted
Subsidiary, in each case in a transaction in which no Person
other than the Company or a Restricted Subsidiary receives any
consideration; (ii) the merger or consolidation of any foreign
Wholly Owned Restricted Subsidiary with and into a domestic
Wholly Owned Restricted Subsidiary or any other foreign Wholly
Owned Restricted Subsidiary, in each case in a transaction in
which no Person other than the Company or a Restricted Subsidiary
receives any consideration; and (iii) the merger of any other
Person with and into the Company or a Restricted Subsidiary if
the Company or a Restricted Subsidiary is the surviving entity
and after giving effect to such transaction the Company and the
Restricted Subsidiaries shall be in
-7-
<PAGE> 9
compliance, on a pro forma basis after giving effect to such
transaction, with the covenants contained in Article VIII
recomputed as of the last day of the most recently ended fiscal
quarter of the Company and the Restricted Subsidiaries as if such
transaction had occurred on the first day of each relevant period
for testing such compliance, and the Company shall have delivered
to the Agent an officer's certificate to such effect, together
with all relevant financial information and calculations
demonstrating such compliance;
(c) Investments permitted by Section 8.06;
(d) sales, leases or other dispositions of assets by
the Company or the Restricted Subsidiaries determined by the
Board of Directors of the Company to be no longer useful,
necessary or desirable in the operation of the business of the
Company or the Restricted Subsidiaries; provided, unless the
consideration received for such sale, lease or other disposition
has a value in excess of $5,000,000, the determination by the
Board of Directors of the Company shall not be required;
(e) so long as at the time thereof and immediately
after giving effect thereto no Default or Event of Default shall
have occurred and be continuing:
(i) a domestic Restricted Subsidiary may
transfer property and assets to the Company or another
domestic Restricted Subsidiary;
(ii) a foreign Restricted Subsidiary may transfer
property and assets to the Company or another Restricted
Subsidiary (other than Highland Corod except as permitted
in clause (iv) below);
(iii) the Company may transfer property or assets
to any domestic Restricted Subsidiary; and
(iv) any domestic Restricted Subsidiary, or the
Company, may transfer assets or property to any foreign
Restricted Subsidiary, provided that (A) such transfers
shall be made for consideration of not less than the cost
of the property or assets so transferred, (B) licenses of
technology by and among the Company and the Restricted
Subsidiaries shall not be subject to any other limitations
contained in this Agreement, and (C) in addition to and
without limitation of the foregoing, the Company and the
domestic Restricted Subsidiaries shall be permitted to
transfer assets or property to any one or more foreign
Restricted Subsidiaries and any foreign Restricted
Subsidiary may transfer assets or property to Highland
Corod, provided that the aggregate book value of all such
assets or property transferred pursuant to
-8-
<PAGE> 10
this clause (D) during any fiscal year of the Company does
not exceed $5,000,000;
(f) the Company or any Restricted Subsidiary may
acquire all or substantially all of the assets of, or all the
Capital Stock in, a Person or division or line of business of a
Person if, at the time thereof and immediately after giving
effect thereto (each such acquisition being a 'Permitted Business
Acquisition'):
(i) no Event of Default or Default shall have
occurred and be continuing or would result therefrom;
(ii) all the Capital Stock of any acquired or
newly-formed corporation, partnership, association or
other business entity (a 'New Subsidiary') is owned
directly by the Company or one or more Wholly Owned
Restricted Subsidiaries or the Company and one or more
Wholly Owned Restricted Subsidiaries, and such New
Subsidiary shall become a Restricted Subsidiary and
engaged primarily in one or more Lines of Business and
(unless it is a foreign Restricted Subsidiary) shall have
executed a Subsidiary Guarantor Counterpart in the form of
Exhibit 8.02 (a 'Subsidiary Guarantor Counterpart')
guaranteeing the Obligations;
(iii) the Company and the Restricted Subsidiaries
shall be in compliance, on a pro forma basis, after giving
effect to such acquisition or formation, with the
covenants contained in Article VIII, recomputed as at the
last day of the most recently ended fiscal quarter of the
Company and the Restricted Subsidiaries as if such
acquisition had occurred on the first day of each relevant
period for testing such compliance, and, the Company shall
have delivered to the Agent and the Lenders a certificate
of a Responsible Officer to such effect, together with all
relevant financial information of such New Subsidiary or
assets and calculations demonstrating such compliance;
(iv) any New Subsidiary shall not be liable for
any Indebtedness (except for Indebtedness permitted by
Section 8.04);
(v) the Majority Lenders shall have given their
prior written consent (which consent shall not be
unreasonably withheld, taking into consideration the
merits of the acquisition) in the case of any acquisition
involving consideration (whether cash or property (other
than Qualified Capital Stock of the Company), as valued at
the time each investment is made) in excess of
$30,000,000; and
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<PAGE> 11
(vi) the Agent shall have received (A) such
opinions of counsel to such New Subsidiary as the Agent
and the Lenders may reasonably request as to the
organization, good standing and enforceability of this
Agreement and the Subsidiary Counterpart and such other
matters as the Agent and the Lenders may reasonably
require and (B) such other agreements, certificates,
financing statements, approvals, reports, consents,
waivers, estoppels, subordination agreements, filings and
other documentation as the Agent and the Majority Lenders
may reasonably request.
(g) The sale by the Company or any Subsidiary of any
shares of capital stock of Alberta.
The Loan Parties shall pay all reasonable costs and expenses
(including the reasonable legal expenses and out-of-pocket expenses)
incurred by the Agent and the Lenders in connection with the
satisfaction of the requirements set forth in this Section 8.02(f).".
SECTION 3. General Amendments to the Credit Agreement. The Credit
Agreement and the Notes are hereby amended by deleting therefrom (a) all
references therefrom to "Collateral," "Company Pledge Agreement," "Domestically
Owned Foreign Restricted Subsidiary," "Foreign Owned Restricted Subsidiary,"
"Permitted Collateral Liens," "Secured Parties," "Security Documents,"
"Subsidiary Guarantors Pledge Agreements" and "Subsidiary Guarantors Security
Agreements," (b) all representations, covenants, Defaults and Events of Default
referencing the Collateral, the enforceability of any Security Document or the
existence, perfection or priority of any Lien on any Collateral.
SECTION 4. Compliance by the Company. (a) Upon the consummation of
the Trico Acquisition, the Company will cause Trico to comply with the
provisions of Section 8.02(f)(ii) and (vi) of the Credit Agreement, as amended
and affected by this Amendment.
(b) The Company covenants that upon receipt of the proceeds of the
Subordinated Debentures, all outstanding Loans under the Credit Agreement will
be repaid in full and,
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<PAGE> 12
notwithstanding the provisions of Section 12.01 of the Credit Agreement to the
contrary, no Notice of Borrowing shall be delivered by the Company unless all
of the Lenders consent to funding the Borrowing requested in such Notice of
Borrowing. Notwithstanding the foregoing, the Company may obtain the issuance
of Letters of Credit up to the full amount of the Letter of Credit Limit upon
compliance with the applicable provisions of Article V.
SECTION 5. Conditions to Effectiveness. This Amendment shall become
effective when, and only when, the following conditions have been fulfilled:
(a) the Company, the Subsidiary Guarantors and all Lenders shall have
executed a counterpart of this Amendment; and
(b) the Agent shall have executed a counterpart of this Amendment and
shall have received counterparts of this Amendment executed by the Company, the
Subsidiary Guarantors and all Lenders.
SECTION 6. Representations and Warranties True; No Default or Event of
Default. The Company and the Subsidiary Guarantors hereby represent and
warrant to the Agent and the Lenders that after giving effect to the execution
and delivery of this Amendment (a) the representations and warranties set forth
in the Credit Agreement are true and correct on the date hereof as though made
on and as of such date except for any such representations and warranties as
are by their terms limited to a specific earlier date (in which case such
representations and warranties shall have been true and correct on and as of
such earlier date), and (b) no Default or Event of Default has occurred and is
continuing.
-11-
<PAGE> 13
SECTION 7. Reference to the Credit Agreement and Effect on the Notes.
(a) Upon the effectiveness of this Amendment, each reference in the
Credit Agreement to "this Agreement," "hereunder," "herein" or words of like
import shall mean and be a reference to the Credit Agreement, as amended and
affected hereby.
(b) Upon the effectiveness of this Amendment, each reference in the
Notes and the other Loan Documents to "the Credit Agreement" shall mean and be
a reference to the Credit Agreement, as amended and affected hereby.
(c) Upon the effectiveness of this Amendment, each reference in the
Credit Agreement, the Notes and the other Loan Documents to "Permitted
Indebtedness," "Eligible Inventory" and "Eligible Receivables" shall mean and
be a reference to such terms as modified pursuant to Section 1.
(d) The Credit Agreement, the Notes, and the other Loan Documents, as
amended and affected hereby, shall remain in full force and effect and are
hereby ratified and confirmed.
SECTION 8. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
AND APPLICABLE FEDERAL LAW AND SHALL BE BINDING UPON THE COMPANY, THE
SUBSIDIARY GUARANTORS, THE LENDERS AND THE AGENT AND THEIR RESPECTIVE
SUCCESSORS AND ASSIGNS.
SECTION 9. Descriptive Headings. The section headings appearing in
this Amendment have been inserted for convenience only and shall be given no
substantive meaning or significance whatever in construing the terms and
provisions of this Amendment.
-12-
<PAGE> 14
SECTION 10. FINAL AGREEMENT OF THE PARTIES. THIS AMENDMENT, THE
CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT OF
THE LOAN PARTIES, THE LENDERS AND THE AGENT WITH RESPECT TO THE SUBJECT MATTER
HEREOF AND THEREOF, AND THERE ARE NO PROMISES, UNDERTAKINGS, REPRESENTATIONS OR
WARRANTIES BY THE AGENT OR ANY LENDER RELATIVE TO THE SUBJECT MATTER HEREOF OR
THEREOF NOT EXPRESSLY SET FORTH OR REFERRED TO HEREIN OR IN THE CREDIT
AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 11. Execution in Counterparts. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
-13-
<PAGE> 15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first above written.
Company:
EVI, INC., a Delaware corporation
By: /s/ James G. Kiley
----------------------------------
Name: James G. Kiley
--------------------------------
Title: Vice President
-------------------------------
Subsidiary Guarantors:
EVI OIL TOOLS, INC., a Delaware
corporation
By: /s/ James G. Kiley
----------------------------------
Name: James G. Kiley
--------------------------------
Title: Vice President
-------------------------------
GRANT PRIDECO, INC., a Delaware
corporation and the successor of a
merger of Prideco, Inc., a Texas
corporation, with and into Grant
Prideco, Inc.
By: /s/ James G. Kiley
----------------------------------
Name: James G. Kiley
--------------------------------
Title: Vice President
-------------------------------
PRIDECO HOLDINGS, INC., a Delaware
corporation
By: /s/ James G. Kiley
----------------------------------
Name: James G. Kiley
--------------------------------
Title: Vice President
-------------------------------
<PAGE> 16
CHANNELVIEW REAL PROPERTY, INC., a
Delaware corporation
By: /s/ James G. Kiley
----------------------------------
Name: James G. Kiley
--------------------------------
Title: Vice President
-------------------------------
EVI MANAGEMENT INC., a Delaware
corporation
By: /s/ James G. Kiley
----------------------------------
Name: James G. Kiley
--------------------------------
Title: Vice President
-------------------------------
EVI ARROW, INC., a Delaware
corporation
By: /s/ James G. Kiley
----------------------------------
Name: James G. Kiley
--------------------------------
Title: Vice President
-------------------------------
EVI WATSON PACKERS, INC., a Delaware
corporation
By: /s/ James G. Kiley
----------------------------------
Name: James G. Kiley
--------------------------------
Title: Vice President
-------------------------------
<PAGE> 17
Agent:
THE CHASE MANHATTAN BANK, AS AGENT
By: /s/ Sandra J. Miklave
----------------------------------
Name: Sandra J. Miklave
--------------------------------
Title: Vice President
-------------------------------
<PAGE> 18
Lenders:
THE CHASE MANHATTAN BANK
By: /s/ Peter M. Ling
----------------------------------
Name: Peter M. Ling
--------------------------------
Title: Vice President
-------------------------------
<PAGE> 19
ABN AMRO BANK N.V. -- HOUSTON
AGENCY
By: /s/ H. Gene Shiels
----------------------------------
Name: H. Gene Shiels
--------------------------------
Title: Vice President
-------------------------------
By: /s/ Charles W. Randall
----------------------------------
Name: Charles W. Randall
--------------------------------
Title: Senior Vice President
-------------------------------
<PAGE> 20
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Philippe Sonstra
----------------------------------
Name: Philippe Sonstra
--------------------------------
Title: Senior Vice President
-------------------------------
<PAGE> 21
HIBERNIA NATIONAL BANK
By: /s/ Tammy M. Angelety
----------------------------------
Name: Tammy M. Angelety
--------------------------------
Title: Asst. Vice President
-------------------------------
<PAGE> 22
WELLS FARGO BANK (TEXAS), N.A.
By: /s/ Frank Schageman
---------------------------------
Name: Frank Schageman
------------------------------
Title: Vice President
------------------------------
<PAGE> 23
THE BANK OF NOVA SCOTIA
By: /s/ F.C.H. Ashby
---------------------------------
Name: F.C.H. Ashby
------------------------------
Title: Senior Manager Loan Operations
------------------------------
<PAGE> 24
BANQUE PARIBAS
By: /s/ Brian Malone
---------------------------------
Name: Brian Malone
------------------------------
Title: Vice President
------------------------------
By: /s/ Barton D. Schouest
---------------------------------
Name: Barton D. Schouest
------------------------------
Title: Managing Director
------------------------------
<PAGE> 25
THE FUJI BANK, LIMITED
By: /s/ Nate Ellis
---------------------------------
Name: Nate Ellis
------------------------------
Title: Vice President & Manager
------------------------------
