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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
SCHEDULE 13D
(Amendment No. 1)*
UNDER THE SECURITIES EXCHANGE ACT OF 1934
INNOVATIVE VALVE TECHNOLOGIES, INC.
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(Name of Issuer)
COMMON STOCK, $0.001 PAR VALUE PER SHARE
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(Title of Class of Securities)
45767J106
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(CUSIP Number)
COLIN SOULE, GENERAL COUNSEL
PHILIP SERVICES CORP.
100 KING STREET WEST
P.O. BOX 2440, LCD1
HAMILTON, ONTARIO CANADA L8N 4J6
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
NOVEMBER 18, 1999
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(Date of Event which Requires Filing of this Statement)
---------------------------
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[ ].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subsequent class
of securities, and for any subsequent amendment containing information
which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of the
Act (however, see the Notes).
Page 1 of 26
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CUSIP NO. 45767J106 13D Page 2 of 4 Pages
________________________________________________________________________________
(1) Name of Reporting Persons. IRS Identification Nos. of Above Persons
(entities only)
Philip Services Corp.
________________________________________________________________________________
(2) Check the Appropriate Box if a Member of a Group
(See Instructions) (a) [ ]
N/A (b) [ ]
________________________________________________________________________________
(3) SEC Use Only
________________________________________________________________________________
(4) Source of Funds (See Instructions)
N/A
________________________________________________________________________________
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e). [ ]
N/A
________________________________________________________________________________
(6) Citizenship or Place of Organization
Province of Ontario
________________________________________________________________________________
(7) Sole Voting Power
Number of 2,340,716
Shares Beneficially _________________________________
Owned (8) Shared Voting Power
by Each
Reporting 0
Person With _________________________________
(9) Sole Dispositive Power
2,340,716
_________________________________
(10) Shared Dispositive Power
0
________________________________________________________________________________
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
2,340,716
________________________________________________________________________________
(12) Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) [ ]
N/A
_______________________________________________________________________________
(13) Percent of Class Represented by Amount in Row (11)
24.2
________________________________________________________________________________
(14) Type of Reporting Person (See Instructions)
CO
________________________________________________________________________________
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<PAGE> 3
ITEM 1. SECURITY AND ISSUER
The Schedule 13D filed with the Securities and Exchange Commission on
November 11, 1997 by Philip Services Corp. ("Philip"), relating to the shares of
common stock, par value $0.001 per share ("Common Stock") of Innovative Valve
Technologies, Inc. (the "Company"), is amended to furnish the additional
information set forth herein. All capitalized terms contained herein but not
defined herein shall have the meaning ascribed to such terms in the previously
filed statement on Schedule 13D.
ITEM 4. PURPOSE OF TRANSACTION
Philip intends to tender all of its beneficially held Common Stock pursuant
to the proposed cash tender offer (the "Offer"), dated November 22, 1999, of
Forrest Acquisition Sub, Inc (the "Purchaser"), a wholly owned subsidiary of
Flowserve Corporation (the "Parent"), in accordance with the terms of the
agreement and plan of merger (the "Merger Agreement"), dated November 18, 1999,
made among the Purchaser, the Parent and the Company, which provides, among
other things, for the acquisition of the Company by the Purchaser by means of
the Offer for all outstanding shares of Common Stock, including the associated
preferred share purchase rights, and for the subsequent merger of the Purchaser
with and into the Company (the "Merger").
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER
On November 18, 1999, Philip Environmental Services, Inc. ("Philip
Environmental") and Philip Industrial Services Group, Inc. ("Philip Industrial
Services"), wholly owned subsidiaries of Philip, each entered into stockholder
agreements (the "Stockholder Agreements") with the Purchaser wherein Philip
Environmental and Philip Industrial Services agreed to tender, pursuant to the
Offer, their 154,958 shares and 2,185,758 shares of Common Stock, respectively,
to the Purchaser in accordance with the Stockholder Agreements. Philip, Philip
Environmental and Philip Industrial Services have filed a voluntary petition
under Chapter 11 of the U.S. Bankruptcy Code with the Bankruptcy Court for the
District of Delaware (the "Bankruptcy Court").
The Stockholder Agreements oblige each of Philip Environmental and Philip
Industrial Services to tender their Common Stock to the Purchaser pursuant to
the terms of the Offer, subject to the approval of the Bankruptcy Court. The
Purchaser will take up and pay for the Common Stock held by Philip Environmental
and Philip Industrial Services for an aggregate price equal to $3,791,959.92.
Philip Environmental and Philip Industrial Services have also agreed to vote all
of their Common Stock in favor of the Merger and against any proposal relating
to an Acquisition Proposal (as such term is defined in the Merger Agreement) and
have granted irrevocable proxies to the Purchaser to so vote their Common Stock.
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ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 1. - Stockholder agreement, dated as of November 18, 1999,
among the Purchaser and Philip Environmental; and
Exhibit 2. - Stockholder agreement, dated as of November 18, 1999,
among the Purchaser and Philip Industrial Services.
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<PAGE> 5
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: November 24, 1999
PHILIP SERVICES CORP.
/s/ Colin Soule
---------------------------
Colin Soule
Secretary
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<PAGE> 1
EXHIBIT 1
STOCKHOLDER AGREEMENT
STOCKHOLDER AGREEMENT, dated as of November 18, 1999 (this "Agreement"),
among Forrest Acquisition Sub, Inc., a Delaware corporation ("Purchaser"), and
Philip Environmental Services, Inc. (the "Stockholder").
R E C I T A L S:
WHEREAS, concurrently, with the execution and delivery of this Agreement,
Purchaser, Flowserve Corporation, a New York Corporation ("Parent"), and
Innovative Valve Technologies, Inc., a Delaware corporation (the "Company"), are
entering into an Agreement and Plan of Merger (the "Merger Agreement"), which
provides, among other things, for the acquisition of the Company by Parent by
means of a cash tender offer (the "Offer") by Purchaser for all outstanding
shares of Common Stock, par value $0.001 per share, of the Company (the "Common
Stock"), including the associated preferred share purchase rights (the "Rights,"
and together with the Common Stock, the "Shares") and for the subsequent merger
of Purchaser with and into the Company (the "Merger"), all on the terms and
subject to the conditions set forth in the Merger Agreement;
WHEREAS, the Stockholder has filed a voluntary petition under Chapter 11 of
the U.S. Bankruptcy Code with the Bankruptcy Court for the District of Delaware
(the "Bankruptcy Court"); and
WHEREAS, as an inducement and a condition to entering into the Merger
Agreement, Parent and Purchaser have required that the Stockholder agree, and
the Stockholder has agreed, to enter into this Agreement; and
WHEREAS, the Board of Directors of the Company has approved this Agreement
and the transactions contemplated hereby prior to the date hereof; and
WHEREAS, the current board of directors of the Stockholder has approved
this Agreement and the transactions contemplated hereby prior to the date
hereof;
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements set forth herein, the parties hereto agree as follows:
1. Definitions. Terms used and not defined herein, but defined in the
Merger Agreement, shall have the respective meanings ascribed to them in the
Merger Agreement.
2. Tender of Shares; Agreement to Sell; Consideration.
a. In order to induce Parent and Purchaser to enter into the Merger
Agreement, the Stockholder hereby agrees that, unless the Company shall have
terminated the Merger Agreement to accept a Superior Proposal and subject to the
approval of the Bankruptcy Court to the extent
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necessary, it shall validly tender (or cause the record owner of such shares to
validly tender), and not to withdraw, pursuant to and in accordance with the
terms of the Offer, not later than the tenth business day after commencement of
the Offer (or if Bankruptcy Court approval of this Agreement pursuant to Section
3(e) is received or the Stockholder's plan of reorganization is confirmed by the
Bankruptcy Court after such tenth business day, not later than the first
business day after the earlier to occur of such approval or confirmation), the
number of shares set forth opposite the Stockholder's name on Schedule I hereto
(the "Existing Shares" and, together with any Shares acquired by the Stockholder
in any capacity after the date hereof and prior to the termination of this
Agreement by means of purchase, dividend, distribution, exercise of options,
warrants or other rights to acquire Shares or in any other way, the "Stockholder
Shares"), all of which are beneficially owned by the Stockholder. Unless the
Company shall have terminated the Merger Agreement to accept a Superior Proposal
and subject to the approval of the Bankruptcy Court to the extent necessary, if
the Stockholder acquires beneficial ownership of Shares after the date hereof
and prior to termination of this Agreement, the Stockholder shall tender such
Shares on such tenth business day or, if later, on the second business day after
such acquisition (or if Bankruptcy Court approval of this Agreement pursuant to
Section 3(e) is received or the Stockholder's plan of reorganization is
confirmed after such tenth business day or such later date, not later than the
first business day after the earlier to occur of such approval or confirmation).
b. Purchaser shall be entitled to deduct and withhold from the
consideration otherwise payable hereunder to the Stockholder such amounts as are
required to be withheld under the Internal Revenue Code of 1986, as amended (the
"Code"), or any applicable provision of state, local or foreign tax law, as
specified in the Offer Documents. To the extent that amounts are so withheld by
Purchaser, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the Stockholder.
c. The Stockholder hereby permits Parent and Purchaser to publish and
disclose in the Offer Documents and, if approval of the Company's stockholders
is required under applicable law, the Proxy Statement (including all documents
and schedules filed with the SEC) the Stockholder's identity and ownership of
the Stockholder Shares and the nature of the Stockholder's commitments,
arrangements and understandings under this Agreement.
d. Subject to paragraph 2(b) hereof, Purchaser shall purchase the
Stockholder Shares for an aggregate price equal to the Offer Price multiplied by
the number of Stockholder Shares and shall pay such amount as directed by
Bankers Trust Company; provided, however, that this Agreement shall not be
binding on the Stockholder unless the Offer Price shall equal or exceed $1.50
per share.
3. Additional Agreements.
a. Except as otherwise contemplated by this Agreement, the Stockholder
shall, at any meeting of the stockholders of the Company, however called, or in
connection with any written consent of the stockholders of the Company, vote (or
cause to be voted) all Shares then held of record or beneficially owned by the
Stockholder, (i) in favor of the Merger, the execution and delivery by the
Company of the Merger Agreement and the approval of the terms thereof and each
of the other actions contemplated by the Merger Agreement and this Agreement and
any actions required in furtherance thereof and hereof and (ii) against any
proposal relating to an Acquisition Proposal and against any action or agreement
that would impede, frustrate, prevent or nullify this
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<PAGE> 3
Agreement, or result in a breach in any respect of any covenant, representation
or warranty or any other obligation or agreement of the Company under the Merger
Agreement or which would result in any of the conditions set forth in Annex A to
the Merger Agreement or set forth in Article VI of the Merger Agreement not
being fulfilled.
b. The Stockholder hereby covenants and agrees that, except as contemplated
by this Agreement and the Merger Agreement, it shall not (i) offer to transfer
(which term shall include, without limitation, any sale, tender, gift, pledge,
assignment or other disposition), transfer or consent to any transfer of, any or
all of the Stockholder Shares or any interest therein without the prior written
consent of Purchaser, (ii) enter into any contract, option or other agreement or
understanding with respect to any transfer or any or all of the Stockholder
Shares or any interest therein, (iii) grant any proxy, power-of-attorney or
other authorization or consent in or with respect to the Stockholder Shares,
(iv) deposit the Stockholder Shares into a voting trust or enter into a voting
agreement or arrangement with respect to the Stockholder Shares or (v) take any
other action that would make any representation or warranty of the Stockholder
contained herein untrue or incorrect in any material respect or in any way
restrict, limit or interfere in any material respect with the performance of its
obligations hereunder or the transactions contemplated hereby or by the Merger
Agreement.
c. Except as otherwise contemplated by this Agreement, the Stockholder
hereby irrevocably grants to, and appoints, Purchaser and any designee of
Purchaser, and each of them individually, the Stockholder's proxy and
attorney-in-fact with full power of substitution, for and in the name, place and
stead of the Stockholder, to vote the Stockholder Shares, or grant a consent or
approval in respect of the Stockholder Shares, in the manner specified in
Section 3(a). The Stockholder represents that any proxies heretofore given in
respect of the Stockholder Shares are not irrevocable and that any such proxies
are hereby revoked. The Stockholder hereby affirms that the irrevocable proxy
set forth in this Section 3(c) is given in connection with the execution of the
Merger Agreement and that such irrevocable proxy is given to secure the
performance of the duties of the Stockholder under this Agreement. The
Stockholder hereby further affirms that the irrevocable proxy is coupled with an
interest and may under no circumstances be revoked, unless this Agreement is
terminated under Section 6. The Stockholder hereby ratifies and confirms all
that such irrevocable proxy may lawfully do or cause to be done by virtue
hereof.
d. Subject to Section 7, the Stockholder hereby agrees that the Stockholder
shall not, directly or indirectly, encourage, solicit, initiate or participate
in any way in any discussions or negotiations with, or provide any information
to, or afford any access to the properties, books or records of the Company or
any of its Subsidiaries to, or otherwise take any other action to assist or
facilitate, any Person or group (other than Parent or Purchaser or any affiliate
or associate of Parent or Purchaser) concerning any Acquisition Proposal. Upon
execution of this Agreement, the Stockholder will immediately cease any existing
activities, discussions or negotiations conducted heretofore with respect to any
Acquisition Proposal. The Stockholder will immediately communicate to Purchaser
the terms of any Acquisition Proposal (or any discussion, negotiation or inquiry
with respect thereto) and the identity of the Person making such Proposal or
inquiry which it may receive.
e. The Stockholder hereby covenants and agrees that on the first business
day following public announcement by Parent of the execution of the Merger
Agreement, it will file, or cause to be filed, a petition with the Bankruptcy
Court requesting the approval of this Agreement and the transactions
contemplated hereby. The Stockholder shall deliver a copy of such petition to
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<PAGE> 4
Purchaser's counsel for review at least two business days prior to such filing
and shall promptly notify Purchaser of any action taken by the Bankruptcy Court
with respect to the approval of this Agreement or the confirmation of a plan of
reorganization regarding the Stockholder.
f. Subject to the terms and conditions of this Agreement, each of the
parties hereto agrees to use all reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws to consummate and make effective the
transactions contemplated by this Agreement. Each party shall promptly consult
with the other and provide any necessary information and material with respect
to all filings made by such party with any Governmental Entity in connection
with this Agreement and the transactions contemplated hereby.
g. The Stockholder hereby waives any rights of appraisal or rights to
dissent from the Merger that it may have.
h. The Stockholder shall use its best efforts to secure the Agent's Consent
(as defined) as soon as practicable and, upon receipt thereof, shall deliver a
copy of same to Purchaser.
4. Representations and Warranties of each Stockholder. The Stockholder
hereby represents and warrants to Purchaser as follows:
a. The Stockholder is the record and beneficial owner of the Existing
Shares set forth opposite its name on Schedule I. The Existing Shares constitute
all of the Shares owned of record or beneficially owned by the Stockholder on
the date hereof. The Stockholder has sole voting power and sole power to issue
instructions with respect to the matters set forth in Sections 2 and 3 hereof,
sole power of disposition, sole power to demand and waive appraisal rights and
sole power to agree to all of the matters set forth in this Agreement, in each
case with respect to all of the Existing Shares with no limitations,
qualifications or restrictions on such rights, subject to (i) applicable
securities laws, (ii) the terms of this Agreement, and (iii) the earlier to
occur of the approval of this Agreement and the transactions contemplated hereby
by the Bankruptcy Court and the confirmation of the Stockholder's plan of
reorganization by the Bankruptcy Court.
b. The Stockholder has the power and authority to enter into and perform
all of the Stockholder's obligations under this Agreement, subject to the
earlier to occur of the approval of this Agreement and the transactions
contemplated hereby by the Bankruptcy Court and the confirmation of the
Stockholder's plan of reorganization by the Bankruptcy Court and further subject
to the receipt by the Stockholder of a consent from the agent bank on behalf of
the lending banks to the Stockholder under the Stockholder's principal bank
credit arrangement (the "Agent's Consent"). This Agreement has been duly and
validly executed and delivered by the Stockholder and, subject to the earlier to
occur of the approval of this Agreement and the transactions contemplated hereby
by the Bankruptcy Court and the confirmation of the Stockholder's plan or
reorganization by the Bankruptcy Court and further subject to the receipt by the
Stockholder of the Agent's Consent, constitutes a legal, valid and binding
agreement of the Stockholder, enforceable against the Stockholder in accordance
with its terms. There is no beneficiary or holder of a voting trust certificate
or other interest of any trust of which the Stockholder is a trustee, or any
party to any other agreement or arrangement, whose consent is required for the
execution and delivery of this Agreement or the consummation by the Stockholder
of the transactions contemplated hereby, other than the earlier to occur of the
approval of this Agreement and the transactions contemplated hereby
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by the Bankruptcy Court and the confirmation of the Stockholder's plan of
reorganization by the Bankruptcy Court.
c. Except for filings under the HSR Act and the Exchange Act, and subject
to the earlier to occur of the approval of this Agreement and the transactions
contemplated hereby by the Bankruptcy Court and the confirmation of the
Stockholder's plan of reorganization by the Bankruptcy Court and further subject
to the receipt by the Stockholder of the Agent's Consent, (i) no filing with,
and no permit, authorization, consent or approval of, any Governmental Entity is
necessary for the execution and delivery of this Agreement by the Stockholder,
the consummation by such Stockholder of the transactions contemplated hereby and
the compliance by the Stockholder with the provisions hereof, and (ii) none of
the execution and delivery of this Agreement by the Stockholder, the
consummation by the Stockholder of the transactions contemplated hereby or
compliance by the Stockholder with any of the provisions hereof, shall (A)
conflict with or result in any breach of any organizational documents applicable
to the Stockholder, (B) result in a violation or breach of, or constitute (with
or without notice or lapse of time or both) a default (or give rise to any third
party right of termination, cancellation, modification or acceleration) under,
any of the terms, conditions or provisions of any note, loan agreement, bond,
mortgage, indenture, license, contract, commitment, arrangement, understanding,
agreement or other instrument or obligation of any kind, including, without
limitation, any voting agreement, proxy arrangement, pledge agreement,
shareholders agreement or voting trust, to which the Stockholder is a party or
by which it or any of its properties or assets may be bound or (C) violate any
order, writ, injunction, decree, judgment, order, statute, rule or regulation
applicable to the Stockholder or any of its properties or assets.
d. Upon the payment by Purchaser of the Offer Price per share for the
Stockholder Shares as directed by Bankers Trust Company, the transfer by the
Stockholder of the Stockholder Shares to Purchaser in the Offer or hereunder
shall pass to and unconditionally vest in Purchaser good and valid title to all
Stockholder Shares, free and clear of all liens, proxies, voting trusts or
agreements, understandings or arrangements or any other rights whatsoever,
subject to the earlier to occur of the approval of this Agreement and the
transactions contemplated hereby by the Bankruptcy Court and the confirmation of
the Stockholder's plan of reorganization by the Bankruptcy Court.
e. No broker, investment banker, financial advisor or other Person is
entitled to any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of the Stockholder.
f. The Stockholder's lending banks have authorized the Agent's Consent.
5. Stop Transfer. The Stockholder shall request that the Company not
register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of the Stockholder Shares, unless such
transfer is made in compliance with this Agreement.
6. Termination. This Agreement shall terminate upon the earlier of (a) the
Effective Time and (b) the termination of the Merger Agreement (unless, in the
case of this clause (b), Parent is or may be entitled to receive a Termination
Fee under the Merger Agreement following such termination or prior to such
termination the Stockholder has breached in any material respect Section 2(a),
3(a), 3(b) or 3(d)).
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<PAGE> 6
7. No Limitation. Notwithstanding any other provision hereof, nothing in
this Agreement shall be construed to prohibit the Stockholder, or any officer or
affiliate of the Stockholder who is or has designated a member of the Board of
Directors of the Company, from taking any action solely in his or her capacity
as a member of the Board of Directors of the Company or from exercising his or
her fiduciary duties as a member of such Board of Directors to the extent
specifically permitted by the Merger Agreement.
8. Stockholder's Fiduciary Obligation. Notwithstanding anything contained
herein to the contrary, Stockholder shall have the right to take or refrain from
taking any such acts as it shall have reasonably determined are necessary to
fulfill its fiduciary obligations as a debtor and debtor in possession,
including, but not limited to, the right to withdraw the Shares tendered
pursuant to the Offer and to entertain and, if appropriate, accept any higher
and better offers to purchase the Shares, and Stockholder shall not be deemed to
be in breach of any provision of this Agreement as a result of taking any such
action or refraining from taking any such action, provided that Stockholder
shall furnish Purchaser with written notice of the terms of any competing offer
to purchase the Shares and shall provide Purchaser a reasonable opportunity to
match any such competing offer.
9. Miscellaneous.
a. This Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all other prior agreements
and understandings, both written and oral, between the parties with respect to
the subject matter hereof.
b. This Agreement shall not be assigned by operation of law or otherwise
without the prior written consent of the Stockholder (in the case of any
assignment by Purchaser) or Purchaser (in the case of an assignment by the
Stockholder), provided that Purchaser may assign its rights and obligations
hereunder to Parent or any direct or indirect Subsidiary of Parent, but no such
assignment shall relieve Purchaser of its obligations hereunder.
c. Without limiting any other rights Purchaser may have hereunder in
respect of any transfer of Shares, the Stockholder agrees that this Agreement
and the obligations hereunder shall attach to the Stockholder Shares and shall
be binding upon any Person to which legal or beneficial ownership of such Shares
shall pass, whether by operation of law or otherwise, including, without
limitation, such Stockholder's heirs, guardians, administrators or successors.
d. This Agreement may not be amended, changed, supplemented or otherwise
modified with respect to the Stockholder except by an instrument in writing
signed on behalf of such Stockholder and Purchaser.
e. All notices, requests, claims, demands and other communications
hereunder shall be given (and shall be deemed to have been duly received if
given) by hand delivery or by facsimile transmission with confirmation of
receipt, as follows:
If to the Stockholder:
At the address and facsimile number set forth on Schedule I hereto.
With a copy to:
Skadden, Arps, Slate, Meagher & Flom
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<PAGE> 7
333 West Wacker Drive
Chicago, Illinois 60606-1285
(312) 407-0411 (facsimile)
Attn: J. Gregory St. Clair
If to Parent or Purchaser:
Flowserve Corporation
222 W. Las Colinas Blvd., Suite 1500
Irving, Texas 75039
(972) 443-6843 (facsimile)
Attention: Ronald Shuff
With a Copy to:
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
1700 Pacific Avenue, Suite 4100
Dallas, Texas 75201
(214) 969-4343 (facsimile)
Attention: Ford Lacy, P.C.
or to such other address or facsimile number as the person to whom notice is
given may have previously furnished to the others in writing in the manner set
forth above.
f. Whenever possible, each provision or portion of any provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law but if any provision or portion of any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction such invalidity, illegality or
unenforceability will not affect any other provision or portion of any provision
in such jurisdiction, and this Agreement will be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision or portion of any provision had never been contained herein.
g. All rights, powers and remedies provided under this Agreement or
otherwise available in respect hereof at law or in equity shall be cumulative
and not alternative, and the exercise of any thereof by any party shall not
preclude the simultaneous or later exercise of any other such right, power or
remedy by such party.
h. The failure of any party hereto to exercise any rights, power or remedy
provided under this Agreement or otherwise available in respect hereof at law or
in equity, or to insist upon compliance by any other party hereto with its
obligations hereunder, and any custom or practice of the parties at variance
with the terms hereof, shall not constitute a waiver by such party of its right
to exercise any such or other right, power or remedy to demand such compliance.
i. This Agreement shall be binding upon and inure solely to the benefit of
each party
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<PAGE> 8
hereto, and nothing in this Agreement, express or implied, is intended to confer
upon any other Person any rights or remedies of any nature whatsoever under or
by reason of this Agreement.
j. This Agreement shall be governed and construed in accordance with the
laws of the State of Delaware.
k. The parties agree that irreparable damage would occur in the event that
any of the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
of this Agreement in any state or Federal court located in the State of
Delaware, this being in addition to any other remedy to which they are entitled
at law or in equity. In addition, each of the parties hereto (A) consents to
submit itself to the personal jurisdiction of any state or Federal court located
in the state of Delaware in the event any dispute arises out of this Agreement
or any transaction contemplated by this Agreement, (B) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other request
for leave from any such court and (C) agrees that it will not bring any action
relating to this Agreement or any transaction contemplated by this Agreement in
any court other than any such court. The parties irrevocably and unconditionally
waive any objection to the laying of venue of any action, suit or proceeding
arising out of this Agreement or the transactions contemplated hereby in any
state or Federal court located in the State of Delaware, and hereby further
irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum.
l. The descriptive headings used herein are inserted for convenience of
reference only and are not intended to be part of or to affect the meaning or
interpretation of this Agreement.
m. This Agreement may be executed in counterparts (by fax or otherwise),
each of which shall be deemed to be an original, but all of which, taken
together, shall constitute one and the same agreement.
n. Except as otherwise provide herein, each party shall pay its, his or her
own expenses incurred in connection with this Agreement.
o. The obligations of the Stockholder hereunder are subject to the
Stockholder's receipt of the Agent's Consent.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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<PAGE> 9
IN WITNESS WHEREOF, Purchaser and the Stockholders have caused this
Agreement to be duly executed in multiple counterparts as of the day and year
first above written.
FORREST ACQUISITION SUB, INC.
By: /s/ Ronald F. Shuff
--------------------------------------
Name: Ronald F. Shuff
------------------------------------
Title: Secretary-Treasurer
-----------------------------------
STOCKHOLDER
PHILIP ENVIRONMENTAL SERVICES, INC.
By: /s/ Colin Soule
--------------------------------------
Name: Colin Soule
------------------------------------
Title: Secretary
-----------------------------------
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<PAGE> 10
SCHEDULE I
<TABLE>
<CAPTION>
NAME, FACSIMILE NUMBER AND NUMBER OF SHARES OF COMMON
ADDRESS OF STOCKHOLDER STOCK BENEFICIALLY OWNED
---------------------- ------------------------
<S> <C>
Philip Environmental Services, Inc. 154,958
5151 San Felipe, Suite 1600
Houston, Texas 77056
</TABLE>
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<PAGE> 1
EXHIBIT 2
STOCKHOLDER AGREEMENT
STOCKHOLDER AGREEMENT, dated as of November 18, 1999 (this "Agreement"), among
Forrest Acquisition Sub, Inc., a Delaware corporation ("Purchaser"), and Philip
Industrial Services Group, Inc. (the "Stockholder").
R E C I T A L S:
WHEREAS, concurrently, with the execution and delivery of this Agreement,
Purchaser, Flowserve Corporation, a New York Corporation ("Parent"), and
Innovative Valve Technologies, Inc., a Delaware corporation (the "Company"), are
entering into an Agreement and Plan of Merger (the "Merger Agreement"), which
provides, among other things, for the acquisition of the Company by Parent by
means of a cash tender offer (the "Offer") by Purchaser for all outstanding
shares of Common Stock, par value $0.001 per share, of the Company (the "Common
Stock"), including the associated preferred share purchase rights (the "Rights,"
and together with the Common Stock, the "Shares") and for the subsequent merger
of Purchaser with and into the Company (the "Merger"), all on the terms and
subject to the conditions set forth in the Merger Agreement;
WHEREAS, the Stockholder has filed a voluntary petition under Chapter 11 of the
U.S. Bankruptcy Code with the Bankruptcy Court for the District of Delaware (the
"Bankruptcy Court"); and
WHEREAS, as an inducement and a condition to entering into the Merger Agreement,
Parent and Purchaser have required that the Stockholder agree, and the
Stockholder has agreed, to enter into this Agreement; and
WHEREAS, the Board of Directors of the Company has approved this Agreement and
the transactions contemplated hereby prior to the date hereof; and
WHEREAS, the current board of directors of the Stockholder has approved this
Agreement and the transactions contemplated hereby prior to the date hereof;
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements set forth herein, the parties hereto agree as follows:
1. Definitions. Terms used and not defined herein, but defined in the
Merger Agreement, shall have the respective meanings ascribed to them in the
Merger Agreement.
2. Tender of Shares; Agreement to Sell; Consideration.
a. In order to induce Parent and Purchaser to enter into the Merger
Agreement, the Stockholder hereby agrees that, unless the Company shall have
terminated the Merger Agreement to accept a Superior Proposal and subject to the
approval of the Bankruptcy Court to the extent necessary, it shall validly
tender (or cause the record owner of such shares to validly tender), and not to
withdraw, pursuant to and in accordance with the terms of the Offer, not later
than the tenth
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<PAGE> 2
business day after commencement of the Offer (or if Bankruptcy Court approval of
this Agreement pursuant to Section 3(e) is received or the Stockholder's plan of
reorganization is confirmed by the Bankruptcy Court after such tenth business
day, not later than the first business day after the earlier to occur of such
approval or confirmation), the number of shares set forth opposite the
Stockholder's name on Schedule I hereto (the "Existing Shares" and, together
with any Shares acquired by the Stockholder in any capacity after the date
hereof and prior to the termination of this Agreement by means of purchase,
dividend, distribution, exercise of options, warrants or other rights to acquire
Shares or in any other way, the "Stockholder Shares"), all of which are
beneficially owned by the Stockholder. Unless the Company shall have terminated
the Merger Agreement to accept a Superior Proposal and subject to the approval
of the Bankruptcy Court to the extent necessary, if the Stockholder acquires
beneficial ownership of Shares after the date hereof and prior to termination of
this Agreement, the Stockholder shall tender such Shares on such tenth business
day or, if later, on the second business day after such acquisition (or if
Bankruptcy Court approval of this Agreement pursuant to Section 3(e) is received
or the Stockholder's plan of reorganization is confirmed after such tenth
business day or such later date, not later than the first business day after the
earlier to occur of such approval or confirmation).
3. Purchaser shall be entitled to deduct and withhold from the
consideration otherwise payable hereunder to the Stockholder such amounts as are
required to be withheld under the Internal Revenue Code of 1986, as amended (the
"Code"), or any applicable provision of state, local or foreign tax law, as
specified in the Offer Documents. To the extent that amounts are so withheld by
Purchaser, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the Stockholder.
4. The Stockholder hereby permits Parent and Purchaser to publish and
disclose in the Offer Documents and, if approval of the Company's stockholders
is required under applicable law, the Proxy Statement (including all documents
and schedules filed with the SEC) the Stockholder's identity and ownership of
the Stockholder Shares and the nature of the Stockholder's commitments,
arrangements and understandings under this Agreement.
5. Subject to paragraph 2(b) hereof, Purchaser shall purchase the
Stockholder Shares for an aggregate price equal to the Offer Price multiplied by
the number of Stockholder Shares and shall pay such amount as directed by
Bankers Trust Company; provided, however, that this Agreement shall not be
binding on the Stockholder unless the Offer Price shall equal or exceed $1.50
per share.
6. Additional Agreements.
7. Except as otherwise contemplated by this Agreement, the Stockholder
shall, at any meeting of the stockholders of the Company, however called, or in
connection with any written consent of the stockholders of the Company, vote (or
cause to be voted) all Shares then held of record or beneficially owned by the
Stockholder, (i) in favor of the Merger, the execution and delivery by the
Company of the Merger Agreement and the approval of the terms thereof and each
of the other actions contemplated by the Merger Agreement and this Agreement and
any actions required in furtherance thereof and hereof and (ii) against any
proposal relating to an Acquisition Proposal and against any action or agreement
that would impede, frustrate, prevent or nullify this Agreement, or result in a
breach in any respect of any covenant, representation or warranty or any other
obligation or agreement of the Company under the Merger Agreement or which would
result
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<PAGE> 3
in any of the conditions set forth in Annex A to the Merger Agreement or set
forth in Article VI of the Merger Agreement not being fulfilled.
8. The Stockholder hereby covenants and agrees that, except as contemplated
by this Agreement and the Merger Agreement, it shall not (i) offer to transfer
(which term shall include, without limitation, any sale, tender, gift, pledge,
assignment or other disposition), transfer or consent to any transfer of, any or
all of the Stockholder Shares or any interest therein without the prior written
consent of Purchaser, (ii) enter into any contract, option or other agreement or
understanding with respect to any transfer or any or all of the Stockholder
Shares or any interest therein, (iii) grant any proxy, power-of-attorney or
other authorization or consent in or with respect to the Stockholder Shares,
(iv) deposit the Stockholder Shares into a voting trust or enter into a voting
agreement or arrangement with respect to the Stockholder Shares or (v) take any
other action that would make any representation or warranty of the Stockholder
contained herein untrue or incorrect in any material respect or in any way
restrict, limit or interfere in any material respect with the performance of its
obligations hereunder or the transactions contemplated hereby or by the Merger
Agreement.
9. Except as otherwise contemplated by this Agreement, the Stockholder
hereby irrevocably grants to, and appoints, Purchaser and any designee of
Purchaser, and each of them individually, the Stockholder's proxy and
attorney-in-fact with full power of substitution, for and in the name, place and
stead of the Stockholder, to vote the Stockholder Shares, or grant a consent or
approval in respect of the Stockholder Shares, in the manner specified in
Section 3(a). The Stockholder represents that any proxies heretofore given in
respect of the Stockholder Shares are not irrevocable and that any such proxies
are hereby revoked. The Stockholder hereby affirms that the irrevocable proxy
set forth in this Section 3(c) is given in connection with the execution of the
Merger Agreement and that such irrevocable proxy is given to secure the
performance of the duties of the Stockholder under this Agreement. The
Stockholder hereby further affirms that the irrevocable proxy is coupled with an
interest and may under no circumstances be revoked, unless this Agreement is
terminated under Section 6. The Stockholder hereby ratifies and confirms all
that such irrevocable proxy may lawfully do or cause to be done by virtue
hereof.
10. Subject to Section 7, the Stockholder hereby agrees that the
Stockholder shall not, directly or indirectly, encourage, solicit, initiate or
participate in any way in any discussions or negotiations with, or provide any
information to, or afford any access to the properties, books or records of the
Company or any of its Subsidiaries to, or otherwise take any other action to
assist or facilitate, any Person or group (other than Parent or Purchaser or any
affiliate or associate of Parent or Purchaser) concerning any Acquisition
Proposal. Upon execution of this Agreement, the Stockholder will immediately
cease any existing activities, discussions or negotiations conducted heretofore
with respect to any Acquisition Proposal. The Stockholder will immediately
communicate to Purchaser the terms of any Acquisition Proposal (or any
discussion, negotiation or inquiry with respect thereto) and the identity of the
Person making such Proposal or inquiry which it may receive.
11. The Stockholder hereby covenants and agrees that on the first business
day following public announcement by Parent of the execution of the Merger
Agreement, it will file, or cause to be filed, a petition with the Bankruptcy
Court requesting the approval of this Agreement and the transactions
contemplated hereby. The Stockholder shall deliver a copy of such petition to
Purchaser's counsel for review at least two business days prior to such filing
and shall promptly notify Purchaser of any action taken by the Bankruptcy Court
with respect to the approval of this
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<PAGE> 4
Agreement or the confirmation of a plan of reorganization regarding the
Stockholder.
12. Subject to the terms and conditions of this Agreement, each of the
parties hereto agrees to use all reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws to consummate and make effective the
transactions contemplated by this Agreement. Each party shall promptly consult
with the other and provide any necessary information and material with respect
to all filings made by such party with any Governmental Entity in connection
with this Agreement and the transactions contemplated hereby.
13. The Stockholder hereby waives any rights of appraisal or rights to
dissent from the Merger that it may have.
14. The Stockholder shall use its best efforts to secure the Agent's
Consent (as defined) as soon as practicable and, upon receipt thereof, shall
deliver a copy of same to Purchaser.
15. Representations and Warranties of each Stockholder. The Stockholder
hereby represents and warrants to Purchaser as follows:
16. The Stockholder is the record and beneficial owner of the Existing
Shares set forth opposite its name on Schedule I. The Existing Shares constitute
all of the Shares owned of record or beneficially owned by the Stockholder on
the date hereof. The Stockholder has sole voting power and sole power to issue
instructions with respect to the matters set forth in Sections 2 and 3 hereof,
sole power of disposition, sole power to demand and waive appraisal rights and
sole power to agree to all of the matters set forth in this Agreement, in each
case with respect to all of the Existing Shares with no limitations,
qualifications or restrictions on such rights, subject to (i) applicable
securities laws, (ii) the terms of this Agreement, and (iii) the earlier to
occur of the approval of this Agreement and the transactions contemplated hereby
by the Bankruptcy Court and the confirmation of the Stockholder's plan of
reorganization by the Bankruptcy Court.
17. The Stockholder has the power and authority to enter into and perform
all of the Stockholder's obligations under this Agreement, subject to the
earlier to occur of the approval of this Agreement and the transactions
contemplated hereby by the Bankruptcy Court and the confirmation of the
Stockholder's plan of reorganization by the Bankruptcy Court and further subject
to the receipt by the Stockholder of a consent from the agent bank on behalf of
the lending banks to the Stockholder under the Stockholder's principal bank
credit arrangement (the "Agent's Consent"). This Agreement has been duly and
validly executed and delivered by the Stockholder and, subject to the earlier to
occur of the approval of this Agreement and the transactions contemplated hereby
by the Bankruptcy Court and the confirmation of the Stockholder's plan or
reorganization by the Bankruptcy Court and further subject to the receipt by the
Stockholder of the Agent's Consent, constitutes a legal, valid and binding
agreement of the Stockholder, enforceable against the Stockholder in accordance
with its terms. There is no beneficiary or holder of a voting trust certificate
or other interest of any trust of which the Stockholder is a trustee, or any
party to any other agreement or arrangement, whose consent is required for the
execution and delivery of this Agreement or the consummation by the Stockholder
of the transactions contemplated hereby, other than the earlier to occur of the
approval of this Agreement and the transactions contemplated hereby by the
Bankruptcy Court and the confirmation of the Stockholder's plan of
reorganization by the Bankruptcy Court.
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<PAGE> 5
18. Except for filings under the HSR Act and the Exchange Act, and subject
to the earlier to occur of the approval of this Agreement and the transactions
contemplated hereby by the Bankruptcy Court and the confirmation of the
Stockholder's plan of reorganization by the Bankruptcy Court and further subject
to the receipt by the Stockholder of the Agent's Consent, (i) no filing with,
and no permit, authorization, consent or approval of, any Governmental Entity is
necessary for the execution and delivery of this Agreement by the Stockholder,
the consummation by such Stockholder of the transactions contemplated hereby and
the compliance by the Stockholder with the provisions hereof, and (ii) none of
the execution and delivery of this Agreement by the Stockholder, the
consummation by the Stockholder of the transactions contemplated hereby or
compliance by the Stockholder with any of the provisions hereof, shall (A)
conflict with or result in any breach of any organizational documents applicable
to the Stockholder, (B) result in a violation or breach of, or constitute (with
or without notice or lapse of time or both) a default (or give rise to any third
party right of termination, cancellation, modification or acceleration) under,
any of the terms, conditions or provisions of any note, loan agreement, bond,
mortgage, indenture, license, contract, commitment, arrangement, understanding,
agreement or other instrument or obligation of any kind, including, without
limitation, any voting agreement, proxy arrangement, pledge agreement,
shareholders agreement or voting trust, to which the Stockholder is a party or
by which it or any of its properties or assets may be bound or (C) violate any
order, writ, injunction, decree, judgment, order, statute, rule or regulation
applicable to the Stockholder or any of its properties or assets.
19. Upon the payment by Purchaser of the Offer Price per share for the
Stockholder Shares as directed by Bankers Trust Company, the transfer by the
Stockholder of the Stockholder Shares to Purchaser in the Offer or hereunder
shall pass to and unconditionally vest in Purchaser good and valid title to all
Stockholder Shares, free and clear of all liens, proxies, voting trusts or
agreements, understandings or arrangements or any other rights whatsoever,
subject to the earlier to occur of the approval of this Agreement and the
transactions contemplated hereby by the Bankruptcy Court and the confirmation of
the Stockholder's plan of reorganization by the Bankruptcy Court.
20. No broker, investment banker, financial advisor or other Person is
entitled to any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of the Stockholder.
21. Stop Transfer. The Stockholder shall request that the Company not
register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of the Stockholder Shares, unless such
transfer is made in compliance with this Agreement.
22. Termination. This Agreement shall terminate upon the earlier of (a) the
Effective Time and (b) the termination of the Merger Agreement (unless, in the
case of this clause (b), Parent is or may be entitled to receive a Termination
Fee under the Merger Agreement following such termination or prior to such
termination the Stockholder has breached in any material respect Section 2(a),
3(a), 3(b) or 3(d)).
23. No Limitation. Notwithstanding any other provision hereof, nothing in
this Agreement shall be construed to prohibit the Stockholder, or any officer or
affiliate of the Stockholder who is or has designated a member of the Board of
Directors of the Company, from taking any action solely in his or her capacity
as a member of the Board of Directors of the Company
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<PAGE> 6
or from exercising his or her fiduciary duties as a member of such Board of
Directors to the extent specifically permitted by the Merger Agreement.
24. Stockholder's Fiduciary Obligation. Notwithstanding anything contained
herein to the contrary, Stockholder shall have the right to take or refrain from
taking any such acts as it shall have reasonably determined are necessary to
fulfill its fiduciary obligations as a debtor and debtor in possession,
including, but not limited to, the right to withdraw the Shares tendered
pursuant to the Offer and to entertain and, if appropriate, accept any higher
and better offers to purchase the Shares, and Stockholder shall not be deemed to
be in breach of any provision of this Agreement as a result of taking any such
action or refraining from taking any such action, provided that Stockholder
shall furnish Purchaser with written notice of the terms of any competing offer
to purchase the Shares and shall provide Purchaser a reasonable opportunity to
match any such competing offer.
25. Miscellaneous.
26. This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof and supersedes all other prior
agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereof.
27. This Agreement shall not be assigned by operation of law or otherwise
without the prior written consent of the Stockholder (in the case of any
assignment by Purchaser) or Purchaser (in the case of an assignment by the
Stockholder), provided that Purchaser may assign its rights and obligations
hereunder to Parent or any direct or indirect Subsidiary of Parent, but no such
assignment shall relieve Purchaser of its obligations hereunder.
28. Without limiting any other rights Purchaser may have hereunder in
respect of any transfer of Shares, the Stockholder agrees that this Agreement
and the obligations hereunder shall attach to the Stockholder Shares and shall
be binding upon any Person to which legal or beneficial ownership of such Shares
shall pass, whether by operation of law or otherwise, including, without
limitation, such Stockholder's heirs, guardians, administrators or successors.
29. This Agreement may not be amended, changed, supplemented or otherwise
modified with respect to the Stockholder except by an instrument in writing
signed on behalf of such Stockholder and Purchaser.
30. All notices, requests, claims, demands and other communications
hereunder shall be given (and shall be deemed to have been duly received if
given) by hand delivery or by facsimile transmission with confirmation of
receipt, as follows:
If to the Stockholder:
At the address and facsimile number set forth on Schedule I hereto.
With a copy to:
Skadden, Arps, Slate, Meagher & Flom
333 West Wacker Drive
Chicago, Illinois 60606-1285
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<PAGE> 7
(312) 407-0411 (facsimile)
Attn: J. Gregory St. Clair
If to Parent or Purchaser:
Flowserve Corporation
222 W. Las Colinas Blvd., Suite 1500
Irving, Texas 75039
(972) 443-6843 (facsimile)
Attention: Ronald Shuff
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<PAGE> 8
With a Copy to:
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
1700 Pacific Avenue, Suite 4100
Dallas, Texas 75201
(214) 969-4343 (facsimile)
Attention: Ford Lacy, P.C.
or to such other address or facsimile number as the person to whom notice is
given may have previously furnished to the others in writing in the manner set
forth above.
31. Whenever possible, each provision or portion of any provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law but if any provision or portion of any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction such invalidity, illegality or
unenforceability will not affect any other provision or portion of any provision
in such jurisdiction, and this Agreement will be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision or portion of any provision had never been contained herein.
32. All rights, powers and remedies provided under this Agreement or
otherwise available in respect hereof at law or in equity shall be cumulative
and not alternative, and the exercise of any thereof by any party shall not
preclude the simultaneous or later exercise of any other such right, power or
remedy by such party.
33. The failure of any party hereto to exercise any rights, power or remedy
provided under this Agreement or otherwise available in respect hereof at law or
in equity, or to insist upon compliance by any other party hereto with its
obligations hereunder, and any custom or practice of the parties at variance
with the terms hereof, shall not constitute a waiver by such party of its right
to exercise any such or other right, power or remedy to demand such compliance.
34. This Agreement shall be binding upon and inure solely to the benefit of
each party hereto, and nothing in this Agreement, express or implied, is
intended to confer upon any other Person any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
35. This Agreement shall be governed and construed in accordance with the
laws of the State of Delaware.
36. The parties agree that irreparable damage would occur in the event that
any of the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
of this Agreement in any state or Federal court located in the State of
Delaware, this being in addition to any other remedy to which they are entitled
at law or in equity. In addition, each of the parties hereto (A) consents to
submit itself to the personal jurisdiction of any state or Federal court located
in the state of Delaware in the event any dispute arises out of this Agreement
or any transaction contemplated by this Agreement, (B) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other request
for leave from any such court and (C) agrees that it will not bring any action
relating to this Agreement or any transaction contemplated by this
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<PAGE> 9
Agreement in any court other than any such court. The parties irrevocably and
unconditionally waive any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated
hereby in any state or Federal court located in the State of Delaware, and
hereby further irrevocably and unconditionally waive and agree not to plead or
claim in any such court that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient forum.
37. The descriptive headings used herein are inserted for convenience of
reference only and are not intended to be part of or to affect the meaning or
interpretation of this Agreement.
38. This Agreement may be executed in counterparts (by fax or otherwise),
each of which shall be deemed to be an original, but all of which, taken
together, shall constitute one and the same agreement.
39. Except as otherwise provide herein, each party shall pay its, his or
her own expenses incurred in connection with this Agreement.
40. The obligations of the Stockholder hereunder are subject to the
Stockholder's receipt of the Agent's Consent.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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<PAGE> 10
IN WITNESS WHEREOF, Purchaser and the Stockholders have caused this
Agreement to be duly executed in multiple counterparts as of the day and year
first above written.
FORREST ACQUISITION SUB, INC.
By: /s/ Ronald F. Shuff
----------------------------------
Name: Ronald F. Shuff
--------------------------------
Title: Secretary-Treasurer
-------------------------------
STOCKHOLDER
PHILIP INDUSTRIAL SERVICES GROUP, INC.
By: /s/ Colin Soule
----------------------------------
Name: Colin Soule
--------------------------------
Title: Secretary
-------------------------------
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<PAGE> 11
SCHEDULE I
<TABLE>
<CAPTION>
NAME, FACSIMILE NUMBER AND NUMBER OF SHARES OF COMMON
ADDRESS OF STOCKHOLDER STOCK BENEFICIALLY OWNED
-------------------------- --------------------------
<S> <C>
Philip Industrial Services Group, Inc. 2,185,758
5151 San Felipe, Suite 1600
Houston, Texas 77056
</TABLE>
Page 26 of 26
