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EXHIBIT 10.16
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "AGREEMENT") is made as of June 19,
1998, by and among XXX Xxxxxxxxxxx, Inc., a Delaware corporation ("EVI"),
Pridecomex Holding, S.A. de C.V., a Mexican corporation and subsidiary of EVI
("BUYER"), Tubos xx Xxxxx de Mexico S.A., a Mexican corporation ("TAMSA") and
Tamsider S.A. de C.V., a Mexican corporation ("SELLER").
RECITALS
WHEREAS, Seller owns twenty-three million thirteen thousand six hundred
and fifty-three (23,013,653) shares (the "SHARES") of common stock of TF de
Mexico, S.A. de C.V. (the "COMPANY"), which Shares constitute 92.05% of all of
the issued and outstanding shares of the capital stock of the Company;
WHEREAS, an affiliate of Buyer has leased and operated since October 1,
1993, the manufacturing assets of the Company; and
WHEREAS, Seller desires to sell, and Buyer desires to purchase the
Shares for the consideration and on the terms set forth in this Agreement.
The parties, intending to be legally bound, agree as follows:
ARTICLE 1. DEFINITIONS
Capitalized terms used in this Agreement and not otherwise defined
herein shall have the meanings set forth in Schedule 1 hereto.
ARTICLE 2. SALE AND TRANSFER OF SHARES; CLOSING
SECTION 2.1 SHARES
Subject to the terms and conditions of this Agreement, at the Closing,
Seller shall sell and transfer the Shares, free and clear of all Encumbrances,
to Buyer and shall sell and transfer the Minority Interest, free and clear of
all Encumbrances, to a designee of Buyer, and Buyer shall purchase the Shares
from Seller and shall cause a designee of Buyer to purchase the Minority
Interest from Seller.
SECTION 2.2 PURCHASE PRICE; CANCELLATION OF INTERCOMPANY DEBT
(a) The aggregate purchase price (the "PURCHASE PRICE") for the Shares
and the Minority Interest shall be $48,450,000 United States Dollars, which
shall be payable by Buyer in cash at the Closing by wire transfer to Seller's
bank account to be indicated in writing to Buyer not later than the third
Business Day prior to the Closing Date. The Purchase Price for the Shares and
the Minority Interest shall be allocated between the Shares and Minority
Interest by Buyer, which shall be reasonably acceptable to Seller.
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(b) On the Closing Date, Buyer shall pay or cause the payment to Tamsa
of the Intercompany Debt by wire transfer to Tamsa's bank account to be
indicated in writing by Seller to Buyer not later than the third Business Day
prior to the Closing Date.
SECTION 2.3 CLOSING
The closing of the Contemplated Transactions provided for in this
Agreement (the "CLOSING") will take place at the offices of Seller at Xxxxxx
Xxxxxxx 000 00xx Xxxxx, Xxxxxx Xxxx, at 10:00 a.m. (Mexico City time) on the
date that is ten Business Days following the day on which the parties have been
notified of the Clearances. Subject to the provisions of Article 9, failure to
consummate the Contemplated Transactions provided for in this Agreement on the
date and time and at the place determined pursuant to this Section will not
result in the termination of this Agreement and will not relieve any party of
any obligation under this Agreement.
SECTION 2.4 CLOSING OBLIGATIONS
At the Closing:
(a) Seller will deliver to Buyer:
(i) certificates representing the Shares duly endorsed to
Buyer for transfer or accompanied by duly executed powers assigning the Shares
to Buyer;
(ii) a letter signed by an attorney-in-fact of Seller
addressed to Company informing that the Shares have been transferred to Buyer
and requesting that any required registration be made to acknowledge such
transfer;
(iii) the Officer's Certificates required by Section 7.8;
(iv) certificates representing the Minority Interest duly
endorsed to Buyer for transfer or accompanied by duly executed powers assigning
the Shares to Buyer;
(v) evidence of the termination of the Management Services
Agreement and waiver of any rights by both parties under such agreement;
(vi) an opinion of Seller's counsel in the form attached
hereto as Schedule 7.7;
(vii) any resignations requested by Buyer, effective as of the
Closing Date, of the directors and officers of the Companies and revocations of
powers of attorneys from the Companies;
(viii) evidence satisfactory to the Buyer of the cancellation
of the Intercompany Debt; and
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(ix) possession of all corporate, business and accounting
records of the Companies.
(b) Buyer will deliver to Seller:
(i) evidence of the wire transfers effected pursuant to
Sections 2.2(a) and 2.2(b);
(ii) the Officer's Certificates required by Section 8.5;
and
(iii) an opinion of Buyer's counsel in the form attached
hereto as Schedule 8.4.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES
OF SELLER
Seller represents and warrants to Buyer as follows:
SECTION 3.1 ORGANIZATION AND GOOD STANDING
(a) Each of the Companies is a corporation duly organized, validly
existing and in good standing under the laws of their jurisdiction of
incorporation, and has all requisite corporate power and authority to conduct
its business as currently conducted and to own, operate and lease the assets and
properties it now owns, operates or holds under lease. During the past seven
years the Companies have not done business in any foreign jurisdiction which
would have required them to be licensed in such jurisdiction.
(b) Seller has previously delivered to EVI and Buyer true and correct
copies of the Organizational Documents of each of the Companies as in effect on
the date hereof. The minute books of each of the Companies previously made
available to EVI and Buyer are complete since September 1993 and accurately
reflect all action taken since that date prior to the date of this Agreement by
its board of directors and shareholders, in their capacities as such. Seller has
also made available to EVI and Buyer all other books and corporate records
relating to the Companies to which Seller is aware.
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SECTION 3.2 AUTHORITY
Each of Seller and Tamsa has full power and authority to execute and
deliver this Agreement and, subject to the Clearances being obtained, to perform
its obligations hereunder. Seller's and Tamsa's attorneys-in-fact are duly
empowered to execute this Agreement and endorse the Shares. The execution and
delivery of this Agreement by each of Seller and Tamsa and the performance of
its obligations hereunder have been duly authorized by all necessary corporate
action on its part and no further authorization on the part of Seller and Tamsa
is necessary to authorize the execution and delivery by Seller and Tamsa of, and
the performance of its obligations under, this Agreement. This Agreement has
been duly executed and delivered by each of Seller and Tamsa and, subject to the
Clearances being obtained, constitutes a legal, valid and binding obligation of
each of Seller and Tamsa, enforceable against it in accordance with its terms,
except as such enforceability may be limited by or subject to (a) any
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to creditor's rights generally and (b) general principles of equity
(regardless or whether such enforceability is considered in a proceeding in
equity not law).
SECTION 3.3 NO VIOLATION OR CONFLICT; CONSENTS
(a) Neither the execution and delivery of this Agreement nor the
consummation or performance of any of the Contemplated Transactions will,
directly or indirectly (with or without notice or lapse of time):
(i) contravene, conflict with or result in a violation of (A) any
provision of the Organizational Documents of Seller or the Companies or (B) any
resolution adopted by the board of directors or the shareholders of Seller or
the Companies;
(ii) subject to the Clearances, contravene, conflict with or result
in a violation of, or give any Mexican Governmental Body or other Person the
right to challenge any of the Contemplated Transactions or to exercise any
remedy or obtain any relief under any Mexican Legal Requirement or any Mexican
Order to which the Companies or Seller, or any of the assets owned or used by
any of the Companies, may be subject;
(iii) subject to the Clearances, contravene, conflict with or
result in a violation of any of the terms or requirements of, or give any
Mexican Governmental Body the right to revoke, withdraw, suspend, cancel,
terminate or modify, any Mexican governmental authorization that is held by the
Companies or that otherwise relates to the business of, or any of the assets
owned or used by, any of the Companies;
(iv) result in the imposition or creation of any Encumbrance upon
or with respect to the Shares, the Minority Interest or any of the assets owned
or used by the Companies;
(v) other than the Clearances, require the consent, approval,
clearance, waiver, order or authorization of any Person or Governmental Body;
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(vi) conflict with or violate any permit, concession, grant,
franchise, statute, law, rule or Legal Requirement of any Governmental Body or
any Mexican Order of any Governmental Body; or
(vii) conflict with, or result in any breach of, or default or loss
of any right under (or an event or circumstances that, with notice or the lapse
of time, or both, may result in a default), or cause or permit the acceleration
prior to maturity of any amounts owing under, any Contract or indenture,
mortgage, deed or trust, lease, or other agreement to which either of the
Companies is a party or to which the Shares, the Minority Interest or any of
their respective assets are subject;
except for violations or conflicts with respect to the matters specified in
clause (iii) that would not, individually or in the aggregate, have a material
adverse effect on the business, operations, properties, assets, or condition of
the Companies (the "COMPANY CONDITION").
(b) The execution, delivery and performance of this Agreement by Seller
will not result in the loss of any license, franchise or permit possessed by
either of the Companies or give a right of acceleration or termination to any
party to any Contract or other agreement or instrument to which either of the
Companies is a party or by which any of their respective assets are bound, or
the loss of any right or benefit under such agreement or instrument, except
where the loss of such license, franchise or permit, or the acceleration or
termination of, or the loss of any right or benefit under, such agreement or
instrument would not, individually or in the aggregate, have a material adverse
effect on the Company Condition.
SECTION 3.4 CAPITALIZATION
(a) The authorized equity securities of the Company consist of twenty
five million (25,000,000) shares of common stock, of which twenty five million
(25,000,000) shares are issued and outstanding of which 23,013,653 are owned
beneficially and of record by Seller. All of the outstanding shares of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable and were not issued in violation of any preemptive rights of any
Person. Seller is and will be on the Closing Date the record and beneficial
owner and holder of the Shares, free and clear of all Encumbrances. Upon the
purchase of the Shares as contemplated by this Agreement, buyer shall obtain
good, valid and marketable title to the Shares free and clear of all
Encumbrances. There are no outstanding options, warrants, convertible
securities, calls, rights, commitments, preemptive rights, agreements,
arrangements or understandings of any character obligating Seller or the Company
(a) to issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of the equity securities of the Company or any securities or
obligations convertible into or exchangeable for such shares or (b) to grant,
extend or enter into any such option, warrant, convertible security, call,
right, commitment, preemptive right, agreement, arrangement or understanding.
(b) The authorized equity securities of the Subsidiary consist of
ninety five thousand (95,000) shares of common stock, of which ninety five
thousand (95,000) shares are issued and outstanding. All of the outstanding
shares of the Subsidiary have been duly authorized and validly
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issued and are fully paid and nonassessable and were not issued in violation of
any preemptive rights of any Person. The Company is and will be on the Closing
Date the record and beneficial owner and holder of ninety four thousand nine
hundred and sixty (94,960) shares of the Subsidiary, free and clear of all
Encumbrances. The Seller is and will be on the Closing Date the record and
beneficial owner and holder of the Minority Interest, free and clear of all
Encumbrances. Upon the purchase of the Minority Interest as contemplated by this
Agreement, Buyer shall obtain good, valid and marketable title to the Minority
Interest free and clear of all Encumbrances. There are no outstanding options,
warrants, convertible securities, calls, rights, commitments, preemptive rights,
agreements, arrangements or understandings of any character obligating the
Company, the Subsidiary or any Affiliate of the Company (a) to issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares of the equity
securities of the Subsidiary or any securities or obligations convertible into
or exchangeable for such shares or (b) to grant, extend or enter into any such
option, warrant, convertible security, call, right, commitment, preemptive
right, agreement, arrangement or understanding. Prior to the Closing, the sole
administrator and the shareholders of Subsidiary shall have ratified all
transfers of shares of common stock of Subsidiary that may have occurred over
the past five years.
SECTION 3.5 FINANCIAL STATEMENTS
Seller has previously delivered to Buyer true and correct copies of the
audited balance sheet of the Company at December 31, 1997 and the related
statements of income and retained earnings of the Company for the year ended
December 31, 1997 (collectively the "FINANCIAL STATEMENT"), together with the
report thereon of Price Waterhouse, independent certified public accountants.
The Financial Statements and notes thereto fairly present the financial position
of the Company at the respective dates thereof and the results of operations,
and have been prepared in accordance with GAAP consistently applied. As of
December 31, 1997, neither of the Companies had any liability of any kind or
manner either direct, accrued, absolute or otherwise, which was required to be
disclosed by GAAP and which was not reflected or disclosed in the Financial
Statement. Since December 31, 1997, there has been no changes in the Companies'
method of accounting for Tax purposes or other purposes.
SECTION 3.6 BOOKS AND RECORDS
The books of account, minute books, stock record books, capital
variation books and other records of the Companies, all of which have been made
available to Buyer, are complete and correct since 1993 and have been maintained
since such date in accordance with business practices current in the United
Mexican States. The minute books of the Companies contain accurate and complete
records of all meetings held of, and corporate action taken by, the shareholders
and the boards of directors of each of the Companies since 1993. At the Closing,
all of such books and records will be in the possession of the Companies and
delivered to Buyer.
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SECTION 3.7 TITLE TO PROPERTIES
(a) The Companies have good and marketable title to, or valid and
subsisting leasehold interest in, all of the personal property which is material
to the Company Condition, free and clear of all Encumbrances.
(b) Each parcel of real estate, including all improvements thereon,
owned by the Companies, including the real property described on Schedule 3.7,
of which the Company has good and marketable title, is free and clear of any
Encumbrances and is neither subject to any Order or to be sold nor is being
condemned, expropriated or otherwise taken by any Governmental Body with or
without payment of compensation therefor, nor has any such condemnation,
expropriation or taking been proposed.
SECTION 3.8 NO UNDISCLOSED LIABILITIES
Neither of the Companies has any liabilities or obligations of any
nature whatsoever (whether known or unknown and whether absolute, accrued,
contingent, or otherwise) and no existing condition, situation or set of
circumstances that could reasonably be expected to result in such a liability
except for (i) liabilities reflected in the Financial Statements, (ii) current
liabilities incurred in the Ordinary Course of Business since the respective
dates thereof, (iii) liabilities arising from Mexican Legal Requirements
regarding the matters excluded from Seller's representations and warranties by
Section 3.16, and (iv) liabilities arising in connection with or as a result of
the use or operation of the assets of the Company by Grant Prideco, S.A. de C.V.
SECTION 3.9 MEXICAN TAXES
(a) All Tax Returns that are required to be filed on or before the date
of Closing for, by, on behalf of or with respect to the Companies have been
timely filed with the appropriate foreign, federal, state and local authorities
and all Taxes shown to be due and payable on such Tax Returns or related to such
Tax Returns have been timely paid in full.
(b) All such Tax Returns and the information and data contained therein
have been properly and accurately complied and completed, fairly present in all
material respects the information purported to be shown therein, and reflect all
material liabilities for Taxes for the periods covered by such Tax Returns.
(c) None of such Tax Returns are now under audit or examination by any
foreign, federal, state or local authority and there are no agreements, waivers
or other arrangements providing for an extension of time with respect to the
assessment or collection of any Tax or deficiency of any nature against Seller
(to the extent either of the Companies would be liable) or either of the
Companies or their respective properties, or with respect to any such Tax
Return, or any suits or other actions, proceedings, investigations or claims now
pending or threatened against Seller or either of the Companies or their
respective properties with respect to any Tax, or any matters under discussion
with a foreign, federal, state or local authority relating to any Tax, or any
claims for any additional Tax asserted by any such authority.
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(d) All Taxes due and required to be paid by the Companies or assessed
and due and required to be paid by the Companies have been timely paid in full.
(e) All withholding Tax and Tax deposit requirements imposed on the
Companies or any of their respective properties for any and all periods prior to
and including the date hereof have, and to and including the Closing will have
been timely satisfied.
(f) The Companies have each made adequate provision for the payment in
full of any and all unpaid Taxes for any and all periods or portions thereof
ending on or before the date of the Closing.
SECTION 3.10 NO MATERIAL ADVERSE CHANGE
Since December 31, 1997, there has not been (a) any material adverse
change in the Company Condition and no event or condition has occurred or exists
that would result in such a material adverse change including (b) any Damage,
destruction or loss that has or would have a material adverse affect on the
Company Condition, (c) any change in accounting methods, principles or practices
by the Companies materially affecting the Company's assets, liabilities or
business, except insofar as may have been required by a change in GAAP, or (d)
any agreement entered into outside of the Ordinary Course of Business, in
writing or otherwise, in each case except as set forth in Schedule 3.10 hereto.
SECTION 3.11 COMPLIANCE WITH MEXICAN LEGAL REQUIREMENTS
(a) The Companies possess all required, necessary or applicable
permits, licenses, variances, exemptions, orders, franchises and approvals of
all Governmental Bodies which are in general necessary for any corporation in
Mexico, irrespective of the kind of business in which it engages, to carry on
their businesses. 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 Seller knows of no reason why any
of such permits, licenses, variances, exemptions, orders, franchises and
approvals would be subject to cancellation. None of the Companies has violated
or failed to comply with any Mexican Legal Requirement or Order of any
Governmental Body applicable to the Companies or their respective business,
assets or operations, which violation or failure to comply would have a material
adverse effect.
(b) Except as disclosed in Schedule 3.11, the Companies have not
received, at any time since January 1, 1995, any notice or other communication
from any Governmental Body or any other Person regarding (i) any actual,
alleged, possible or potential violation of, or failure to comply with, any
Legal Requirement, or (ii) any actual, alleged, possible, or potential
obligation on the part of the Companies to undertake, or to bear all or any
portion of the cost of, any remedial action of any nature, which, violation,
failure or obligation would have a material adverse effect.
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SECTION 3.12 LEGAL PROCEEDINGS
(a) There is no pending (of which the Companies or Seller, as the case
may be, have received formal communication or notice) or, to the Best Knowledge
of Seller, threatened Proceedings:
(i) that has been commenced by or against either Seller or the
Companies, or any officer, director, shareholder or Affiliate thereof, or that
otherwise relates to or may materially affect the business of, or any of the
assets owned or used by, the Companies; or
(ii) that challenges, or that may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
Contemplated Transactions.
To the Best Knowledge of Seller, and subject to Section 3.16
no event has occurred or circumstance exists that may give rise to or serve as a
basis for the commencement of any such Proceeding.
(b) Except for the anti-dumping order relating to oil country tubular
goods for Mexico, case number A-201-817, issued by the United States Department
of Commerce on August 11, 1995:
(i) there is no Mexican or US Order to which the Companies, or
any of the assets owned or used by any of the Companies, is subject; and
(ii) Seller is not subject to any Mexican or US Order that
relates to the business of, or any of the assets owned or used by, any of the
Companies;
which Order would have a material adverse effect on the Company Condition.
SECTION 3.13 ABSENCE OF CERTAIN CHANGES AND EVENTS
Except as set forth in Schedule 3.13 and for any changes of a general
nature that may have affected the business of the Companies (including the
condition of the financial markets and of the oil and gas industry), since the
date of the Financial Statement there has not been any:
(a) change in any of the Companies' authorized or issued capital stock;
grant of any stock option or right to purchase shares of capital stock of the
Companies; issuance of any security convertible into such capital stock; grant
of any registration rights; purchase, redemption, retirement, or other
acquisition by the Companies of any shares of any such capital stock; or
declaration, setting aside or payment of any dividend or other distribution or
payment in respect of shares of capital stock;
(b) amendment to the Organizational Documents of the Companies; or
(c) granting by Seller or either of the Companies to any executive
officer of either of the Companies of any increase in compensation, granting by
Seller or either of the Companies to any such executive officer of either of the
Companies of any increase in severance or termination pay,
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or entry by Seller or either of the Companies of any increase in severance or
termination pay, or entry by Seller or either of the Companies into any
employment, severance or termination agreement with any such executive officer.
SECTION 3.14 CONTRACTS; EMPLOYEES
(a) The Companies are not parties to , and neither of them or their
respective properties are subject to, any Contracts other than (i) the Lease
Agreement, (ii) the Contrato de Maquila between the Company and Xxxxx XX de
Mexico, S.A. de C.V. entered into on September 30, 1993, as amended, and (iii)
the Management Services Agreement which shall be terminated on the Closing Date.
(b) Except for the Manufacture Agreement which is being entered into
concurrent with this Agreement, Seller (and any Affiliate of Seller) does not
have nor may acquire any rights under, and Seller does not have nor may become
subject to any obligation or liability under, any contract that relates to the
business of, or any of the assets owned or used by, the Companies.
(c) Neither of the Companies has any outstanding indebtedness other
than the Intercompany Debt.
(d) Since September 30, 1993, the Company has not had any employees and
Subsidiary has never had any employees.
SECTION 3.15 BROKERS OR FINDERS
No banker, broker or finder whose fees and expenses are being paid by
Seller or the Companies has acted directly or indirectly for Seller or any
Affiliate or Seller in connection with this Agreement or the Contemplated
Transactions. No other banker, broker, finder or other Person is entitled to any
broker or finder's fee or other commission in respect thereof based in any way
on agreements, arrangements or understandings made by or on behalf of Seller or
any Affiliate of Seller.
SECTION 3.16 SOLE REPRESENTATIONS
Seller does not make any representation nor give any warranty other
than those expressly made and given in this Article 3. Without limiting the
generality of the foregoing, Seller does not make any representation nor give
any warranty in relation to (i) the condition of the assets owned or leased by
the Companies, (ii) the extent to which the Companies have complied with any
applicable environmental, zoning, labor and health and safety regulations since
September 1, 1993, (iii) the compliance with Legal Requirements regarding labor
matters since September 1, 1993, and (iv) any insurance matters. Buyer has not
relied on any representations or warranties other than those expressly made and
given in this Agreement.
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ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows:
SECTION 4.1 ORGANIZATION AND GOOD STANDING
Buyer is a corporation duly incorporated, validly existing, and in good
standing under the laws of its jurisdiction of incorporation, with full
corporate power and authority to conduct its business as it is now being
conducted, to own or use the properties and assets that it purports to own or
use.
SECTION 4.2 AUTHORITY; NO CONFLICT
(a) The execution, delivery and performance by Buyer of this Agreement
and the consummation by Buyer of the Contemplated Transactions have been duly
authorized by all necessary corporate action on the part of Buyer. This
Agreement has been duly and validly executed and delivered by Buyer and
constitutes the legal, valid and binding obligation of Buyer, enforceable
against it in accordance with its terms, except to the extent that such
enforceability (a) may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditor's rights generally and (b)
is subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(b) Neither the execution and delivery of this Agreement nor the
consummation or performance of any of the Contemplated Transactions will give
any Person the right to prevent, delay, or otherwise interfere with any of the
Contemplated Transactions pursuant to:
(i) any provision of Buyer's Organizational Documents;
(ii) any resolution adopted by the board of directors or the
stockholders of Buyer;
(iii) any US Legal Requirement or US Order to which Buyer may be
subject; or
(iv) any Contract to which Buyer is a party or by which Buyer
may be bound;
Except for the Clearances, Buyer is not and will not be required to
obtain any consent from any Person in connection with the execution and delivery
of this Agreement or the consummation or performance of any of the Contemplated
Transactions.
SECTION 4.3 CERTAIN PROCEEDINGS
There is no pending Proceeding that has been commenced, or to the Best
Knowledge of Buyer, threatened against Buyer that challenges, or may have the
effect of preventing, delaying, making illegal, or otherwise interfering with,
any of the Contemplated Transactions.
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SECTION 4.4 BROKERS OR FINDERS
No banker, broker, finder or other Person is entitled to any brokerage
or finder's fee or other commission in respect of this Agreement or the
Contemplated Transactions based in any way on agreements, arrangements or
understandings made by or on behalf of Buyer or any Affiliate of Buyer.
ARTICLE 5. COVENANTS OF SELLER PRIOR TO CLOSING DATE
SECTION 5.1 ACCESS AND INVESTIGATION
Between the date of this Agreement and the Closing Date, Seller will,
and will cause the Companies and its Representatives to, (a) afford Buyer and
its Representatives full and free access to the Companies' personnel,
properties, contracts, books and corporate records, and other documents and
data, (b) furnish Buyer and its Representatives with copies of all such
contracts, books and corporate records, and other existing documents and data as
Buyer may reasonably request, and (c) furnish Buyer and its Representatives with
such additional financial, operating, and other data and information as Buyer
may reasonably request.
SECTION 5.2 OPERATION OF THE BUSINESSES OF THE COMPANY
(a) Between the date of this Agreement and the Closing Date, Seller
will, and will cause the Company to, perform its obligations under the Lease
Agreement.
(b) Seller covenants and agrees that, from the date of this Agreement
until the Closing, unless Buyer shall otherwise agree in writing or as otherwise
expressly contemplated by this Agreement:
(i) the Companies shall not directly or indirectly do any of the
following: (A) issue, sell, pledge, dispose of or encumber any capital stock of
the Companies; (B) 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; (C) redeem, purchase or acquire or offer to acquire any of its
capital stock except as may be required to cancel the registration of the
Company with the Mexican Stock Exchange; (D) 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 $10,000; or (E) enter into any contract, agreement,
commitment, or arrangement with respect to any of the matters set forth in this
Section 5.2(b)(i);
(ii) Seller shall not transfer, dispose or otherwise convey any of
the Shares held by it or grant or permit there to exist any Encumbrance on the
Shares;
(iii) Tamsa, an Affiliate of the Company, shall not transfer,
dispose or otherwise convey
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any of the Minority Interest held by it or grant or permit there to exist any
Encumbrance on the Minority Interest;
(iv) the Companies shall not enter into any Contract;
(v) except pursuant to the Lease Agreement, the Companies
shall not sell, lease, mortgage, pledge, xxxxx x Xxxx on or otherwise encumber
or otherwise dispose of any of their properties or assets;
(vi) the Companies shall not, 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 the Companies, guarantee any debt securities of
another Person, or make or permit to remain outstanding any loan (other than the
Intercompany Debt), advances or capital contributions to, or investments in, any
other Person, other than to the Subsidiary; or
(vii) the Company shall not change any accounting principle
used by it.
SECTION 5.3 NEGATIVE COVENANT
Except as otherwise expressly permitted by this Agreement, between the
date of this Agreement and the Closing Date, Seller will not, and will cause the
Companies not to, without the prior consent of Buyer, take any affirmative
action, or fail to take any reasonable action within their or its control, as a
result of which any of the changes or events listed in Section 3.13 is likely to
occur, Seller will additionally cause the Companies to refrain from undertaking
any commitment without the prior written approval of Buyer.
SECTION 5.4 COOPERATION
Seller will cooperate with Buyer in the preparation of any documents
and filings necessary to obtain the Clearances.
SECTION 5.5 NOTIFICATION
Between the date of this Agreement and the Closing Date, Seller will
promptly notify Buyer in writing if Seller or the Companies become aware of any
fact or condition that causes or constitutes a Breach of Seller's
representations and warranties as of the date of this Agreement, or if Seller or
the Companies become aware of the occurrence after the date of this Agreement of
any fact or condition that would (except as expressly contemplated by this
Agreement) cause or constitute a Breach of any such representations or
warranties had such representations or warranties been made as of the time of
occurrence or discovery of such fact or condition. Should any such fact or
condition require any change in the schedules of this Agreement if any such
schedule were dated the date of the occurrence or discovery of any such fact or
condition, Seller will promptly deliver to Buyer a supplement to the relevant
schedule specifying such change.
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SECTION 5.6 BEST EFFORTS
Between the date of this Agreement and the Closing Date, Seller will
use its Best Efforts to cause the conditions in ARTICLE 7 that are within its
control to be satisfied.
ARTICLE 6. COVENANTS OF BUYER PRIOR TO CLOSING DATE
SECTION 6.1 APPROVALS OF GOVERNMENTAL BODIES
As promptly as practicable after the date of this Agreement, Buyer will
make all filings required by Legal Requirements to be made by it to consummate
the Contemplated Transactions (including all filings necessary to obtain the
Clearances). Seller shall fully cooperate with Buyer in the preparation of all
necessary documents related to such filings.
SECTION 6.2 NOTIFICATION
Between the date of this Agreement and the Closing Date, Buyer will
promptly notify Seller in writing if Buyer becomes aware of any fact or
condition that causes or constitutes a Breach of Buyer's representations and
warranties as of the date of this Agreement, or if Buyer becomes aware of the
occurrence after the date of this Agreement of any fact or condition that would
(except as expressly contemplated by this Agreement) cause or constitute a
Breach of any such representations or warranties had such representations or
warranties been made as of the time of occurrence or discovery of such fact or
condition. Should any such fact or condition require any change in the schedules
of this Agreement if any such schedule were dated the date of the occurrence or
discovery of any such fact or condition, Buyer will promptly deliver to Seller a
supplement to the relevant schedule specifying such change.
SECTION 6.3 BEST EFFORTS
Between the date of this Agreement and the Closing Date, Buyer will use
its Best Efforts to cause the conditions in ARTICLE 8 that are within its
control to be satisfied.
ARTICLE 7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
Buyer's obligations to consummate the Contemplated Transactions and to
take the other actions required to be taken by it under this Agreement at the
Closing is subject to the satisfaction, at or prior to the Closing, of each of
the following conditions (any of which may be waived by Buyer in writing, in
whole or in part):
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SECTION 7.1 ACCURACY OF REPRESENTATIONS
Seller's representations and warranties in this Agreement must have
been accurate in all respects as of the date of this Agreement, and must be
accurate in all respects as of the Closing Date as if made on the Closing Date,
without giving effect to any supplement to the schedules.
SECTION 7.2 SELLER'S PERFORMANCE
The covenants and obligations that Seller is required to perform or to
comply with pursuant to this Agreement at or prior to the Closing, must have
been duly performed and complied with in all material respects.
SECTION 7.3 CLEARANCES
The Clearances must have been obtained and must be in full force and
effect and no Order shall exist that prevents the performance of the Manufacture
Agreement, the Seamless Pipe Supply Agreement and the Master Technology
Agreement in a manner adverse to Buyer, EVI or its Affiliates.
SECTION 7.4 NO PROCEEDINGS
Since the date of this Agreement, there must not have been commenced or
threatened against Seller or the Companies, or against any Affiliate of Seller,
any Order or Proceeding (a) involving any challenge to, or seeking damages or
other relief in connection with, any of the Contemplated Transactions, or (b)
that may have the effect of preventing, delaying, making illegal, or otherwise
interfering with any of the Contemplated Transactions.
SECTION 7.5 NO CLAIM REGARDING STOCK OWNERSHIP SALE PROCEEDS
There must not have been made or threatened by any Person any claim
asserting that such Person (a) is the holder or the beneficial owner of, or has
the right to acquire or to obtain beneficial ownership of, or any Encumbrance
on, any stock of, or any other voting, equity, or ownership interest in, the
Companies, or (b) is entitled to all or any portion of the Purchase Price
payable for the Shares and the Minority Interest.
SECTION 7.6 TERMINATION OF MANAGEMENT SERVICES AGREEMENT
The Management Services Agreement shall have been terminated and any
rights by both parties under such agreement must have been waived. Written
evidence of such termination and waiver shall be delivered by Seller to Buyer
and EVI.
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SECTION 7.7 OPINION OF COUNSEL
EVI and Buyer shall have received an opinion of counsel to Seller and
the Companies in substantially the form attached hereto as Schedule 7.7.
SECTION 7.8 OFFICER'S CERTIFICATE
(a) EVI and Buyer shall have received from Seller and Tamsa a
certificate of Seller and Tamsa, executed on behalf of each of Seller and Tamsa
by the president or chief executive officer of Seller and Tamsa, as the case may
be, as to compliance with each of the matters set forth in Section 7.1 through
7.6; and
(b) EVI and Buyer shall have received from Seller a copy of the
resolutions of the board of directors and, if necessary, shareholders of Seller
and Subsidiary, certified by the Secretary of Seller and Subsidiary, approving
this Agreement and the Contemplated Transactions.
ARTICLE 8. CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
Seller's obligations to consummate the Contemplated Transactions and to
take the other actions required to be taken by Seller under this Agreement at
the Closing is subject to the satisfaction, at or prior to the Closing, of each
of the following conditions (any of which may be waived by Seller in writing, in
whole or in part):
SECTION 8.1 ACCURACY OF REPRESENTATIONS
Buyer's representations and warranties in this Agreement must have been
accurate in all respects as of the date of this Agreement, and must be accurate
in all respects as of the Closing Date as if made on the Closing Date, without
giving effect to any supplement to the schedules.
SECTION 8.2 BUYER'S PERFORMANCE
The covenants and obligations that Buyer is required to perform or to
comply with pursuant to this Agreement at or prior to the Closing, must have
been duly performed and complied with in all material respects.
SECTION 8.3 CLEARANCES
The Clearances must have been obtained and must be in full force and
effect and no Order shall exist that prevents the performance of the Manufacture
Agreement, the Seamless Pipe Supply Agreement dated as of the date hereof by and
between Techint Engineering Company and Grant Prideco, Inc. and the Master
Technology License Agreement dated as of the date hereof between Grant Prideco,
Inc. and DST Distributors of Steel Tubes Limited.
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SECTION 8.4 OPINION OF COUNSEL
Seller shall have received an opinion of counsel to Buyer in
substantially the form attached hereto as Schedule 8.4.
SECTION 8.5 OFFICER'S CERTIFICATES
(a) Seller shall have received from EVI a certificate of EVI,
executed on behalf of EVI by the president or chief financial officer of EVI, as
to compliance with each of the matters set forth in Section 8.1 through 8.3.
(b) Seller shall have received from Buyer a certificate of Buyer,
executed on behalf of Buyer by the president or chief financial officer of
Buyer, as to compliance with each of the matters set forth in Sections 8.1
through 8.3.
(c) Seller shall have received from Buyer a copy of the resolutions of
the board of directors of Buyer, certified by the Secretary of Buyer, approving
this Agreement and the Contemplated Transactions.
ARTICLE 9. TERMINATION
SECTION 9.1 TERMINATION EVENTS
This Agreement may, by written notice given prior to or at the Closing,
be terminated:
(a) by either Buyer or Seller, if a material Breach of any provision of
this Agreement has been committed by the other party or has occurred and such
Breach has not been waived;
(b) (i) by Buyer if any of the conditions in Article 7 have not been
satisfied as of the Closing Date or if satisfaction of any such condition is or
becomes impossible (other than through the failure of Buyer to comply with its
obligations under this Agreement) and Buyer has not waived such condition on or
before the Closing Date; or (ii) by Seller, if any of the conditions in Article
8 has not been satisfied as of the Closing Date or if satisfaction of any such
condition is or becomes impossible (other than through the failure of Seller to
comply with their obligations under this Agreement) and Seller has not waived
such condition on or before the Closing Date;
(c) by mutual consent of Buyer and Seller; or
(d) by either Buyer or Seller if the Closing has not occurred (other
than through the failure of any party seeking to terminate this Agreement to
comply fully with its obligations under this Agreement) on or before October 31,
1998, or such later date as the parties may agree upon.
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SECTION 9.2 EFFECT OF TERMINATION
Each party's right of termination under this Article 9 is in addition
to any other rights it may have under this Agreement or otherwise, and the
exercise of a right of termination will not be an election of remedies. If this
Agreement is terminated pursuant to this Article, all obligations of the parties
under this Agreement will terminate; provided, however, that if this Agreement
is terminated by a party because of the Breach of the Agreement by the other
party or because one or more of the conditions to the terminating party's
obligations under this Agreement is not satisfied as a result of the other
party's failure to comply with its obligations under this Agreement, the
terminating party's right to pursue all legal remedies will survive such
termination unimpaired.
ARTICLE 10. SURVIVAL; INDEMNIFICATION
SECTION 10.1 SURVIVAL
All representations and warranties in this Agreement shall survive the
Closing Date and shall remain in full force and effect until the last day of the
eighteenth month following the Closing Date (except that (a) the representations
and warranties set forth in Section 3.2, Section 3.4, Section 3.7, Section 3.11,
Section 3.12, Section 3.15 and Section 4.4 shall survive the Closing Date
without limitation and (b) the representation and warranty set forth in Section
3.9 shall survive until the applicable statute of limitations term expires) (the
period during which the representations and warranties shall survive being
referred to herein with respect to such representations and warranties as the
"SURVIVAL PERIOD"), and shall be effective with respect to any inaccuracy
therein or breach thereof (and a claim for indemnification under this Article 10
hereof may be made thereon) if a written notice asserting the claim shall have
been duly given in accordance with this Article 10 within the Survival Period
with respect to such matter. All covenants and agreements contained herein shall
survive without limitation; provided, however, that such survival shall not
operate to expand the indemnification obligations set forth in this Article 10.
Any claim for indemnification made during the Survival Period shall be valid and
the representations and warranties relating thereto shall remain in effect for
purposes of such indemnification notwithstanding such claim may not be resolved
within the Survival Period. All representations, warranties and covenants and
agreements made by the parties shall not be affected by any investigation
heretofore or hereafter made by and on behalf of any of them and shall not be
deemed merged into any instruments or agreements delivered in connection with
this Agreement or otherwise in connection with the transactions contemplated
hereby.
SECTION 10.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLER
(a) Except as otherwise limited by this Article 10, Seller agrees to
indemnify, defend and hold Buyer and its successors and assigns harmless from
and against and in respect of Damages actually suffered, incurred of realized by
such party (collectively, "BUYER LOSSES"), arising out of or resulting from or
relating to:
(i) any misrepresentation, breach of warranty or breach of
any covenant or agreement made or undertaken by Seller in this Agreement,
including the Schedules hereto; and
(ii) any claim by any Person with respect to (x) a matter
involving the Companies
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that existed prior to 1993 that was not reflected in the books and records
provided to Buyer or (y) the ownership of, or rights to purchase an interest in,
either the Company or the Subsidiary to the extent such ownership is not
disclosed in Section 3.4 or (z) any defect in the due organization of either the
Company or the Subsidiary or any amendment to their Organizational Documents.
(b) Notwithstanding the foregoing, Seller's maximum aggregate liability
for Buyer Losses resulting from Seller's Breach of the representations and
warranties made in this Agreement and for the indemnification obligation set
forth in Section 10.3 shall not exceed 50% of the Purchase Price; provided,
however, that there shall be no limit to Seller's liability for Buyer Losses
resulting from Seller's Breach of the representations, warranties and covenants
made in Section 3.2, Section 3.4, Section 3.7 and Section 3.9 of this Agreement.
SECTION 10.3 ENVIRONMENTAL MATTERS
Seller shall indemnify and hold harmless Buyer against any Damage
resulting from any Environmental Claim to the extent such Environmental Claim
(a) arises out of or is based upon the acts or omissions prior to September 1,
1993 and (b) relates to a condition in the assets or properties that were
subject to the Lease Agreement that would have been regarded as a hidden defect
at such date. In addition, Seller agrees to remediate and take such other action
as may be necessary to cause the items of environmental concern in the
southwestern portion of the site described and referred to in the memorandum
dated June 18, 1998, from Xxxxxxx Xxxxxxxx' to Xxxxxx Xxxx under the heading
"History of Waste Disposal" to be fully addressed and cured so that the area
identified, including both the surface and underground, and the Company and the
Subsidiary will be in compliance with all applicable Legal Requirements with
respect to the area and matters described therein and Seller shall be
responsible for and indemnify and hold Buyer harmless against any liabilities or
claims from third parties relating to such matters. For purposes of this
Section, the term "Environmental Claim" shall mean a regulatory requirement from
a Governmental Body or any allegation, notice of violation, claim, demand or
Order by Governmental Body or any Person for bodily injury (including sickness,
disease or death, whether chronic or acute), tangible or intangible property
damage, damage to the environment, nuisance, pollution, contamination or other
adverse effects on health or the environment, or for fines, penalties or
restrictions, resulting from or based upon (i) the existence or release, or
continuation of a release (including, without limitation, sudden or nonsudden,
accidental or nonaccidental leaks or spills), of, or exposure to, any noxious or
toxic substance, chemical, material, pollutant, noise or contaminant in, into or
onto the environment (including, without limitation, the air, ground, water or
any surface) at, in, or from any Company facility prior to September 1, 1993,
(ii) the health or environmental aspects of the transportation, storage,
treatment or disposal of materials either on-site or off-site in connection with
the operation of any Company facility prior to September 1, 1993; or (iii) the
violation, or alleged violation, by any Company facility prior to September 1,
1993, of any statutes, ordinances, orders, rules, regulations, permits or
licenses, whether Federal, State or Municipal laws of Ecological Equilibrium and
Environmental Protection, its Regulations, as well as all suppletory and
complementary legislation and related provisions, including other Legal
Requirements, of or from any Governmental Body, agency or court in force prior
to the date of the Lease Agreement. Buyer shall give notice to Seller prior to
the Company or the Subsidiary taking any material action with respect to an
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environmental cleanup that would reasonably be expected to raise an
Environmental Claim with respect to the property of the Company or Subsidiary
for which the Seller would be liable hereunder and shall take reasonable efforts
to agree with Seller on the terms of such action; provided, however, subject to
the foregoing, neither the Company nor Subsidiary shall be prohibited from
taking any action that may be required under any applicable Legal Requirement or
from participating in a voluntary environmental audit procedure before the
Mexican Environmental Protection Agency with the objective of obtaining a "Clean
Industry Award" if the Company or the Subsidiary deem such action, after
consultation with Seller, to be advisable.
SECTION 10.4 INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER
(a) Except as otherwise limited by this Article 10, Buyer agrees to
indemnify, defend and hold Seller and its respective successors and assigns
harmless from and against and in respect of Damages actually suffered, incurred
or realized by such party (collectively, "SELLER LOSSES"), arising out of or
resulting from or relating to any misrepresentation, breach of warranty or
breach of any covenant or agreement made or undertaken by Buyer in this
Agreement, including the Schedules hereto.
(b) Notwithstanding the foregoing, Buyer's maximum aggregate liability
for Buyer Losses resulting from a Breach of the representations and warranties
by Buyer in this Agreement shall not exceed 50% of the Purchase Price; provided,
however, that there shall be no limit to Buyer's liability for Seller Losses
resulting a Breach of the representations warranties and covenants made by Buyer
in Section 4.4 of this Agreement.
SECTION 10.5 LIMITATIONS ON AMOUNT--SELLER
Seller will have no liability (for indemnification or otherwise) with
respect to the matters described in Section 10.2(a) and 10.3 until the total of
all Buyer's Losses exceeds $500,000, and then only for the amount by which such
Buyer's Losses exceeds $500,000. However, this Section will not apply to any
Breach of Seller representations and warranties under Section 3.2, Section 3.4,
Section 3.7 and Section 3.9 or the agreements or covenants contained in Section
11.1 and Seller will be liable for all Buyer's Losses with respect to such
Breaches.
SECTION 10.6 LIMITATIONS ON AMOUNT--BUYER
Buyer will have no liability (for indemnification or otherwise) with
respect to the matters described in Section 10.4 until the total of all Seller's
Losses exceeds $500,000, and then only for the amount by which such Damages
exceeds $500,000. However, this Section will not apply to any Breach of Buyer's
representations and warranties under Section 4.2, and Buyer will be liable for
all Seller's Losses with respect to such Breaches.
SECTION 10.7 AMOUNT OF DAMAGES
The amount of any Damage for which indemnification is provided under
this Article shall
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be net of any amounts recovered or recoverable by the indemnified party under
insurance policies (except captive reinsurance or other such retention
arrangements of such party) with respect to such Damage.
SECTION 10.8 PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS
(a) Promptly after receipt by an indemnified party under Sections 10.2,
10.3 or 10.4 of notice of the commencement of any Proceeding against it, such
indemnified party will, if a claim is to be made against an indemnifying party
under such sections, give notice to the indemnifying party of the commencement
of such claim, but the failure to notify the indemnifying party will not relieve
the indemnifying party of any liability that it may have to any indemnified
party, except to the extent that the indemnifying party demonstrates that the
defense of such action is prejudiced by the indemnifying party's failure to give
such notice.
(b) If any Proceeding referred to in the preceding clause (a) is
brought against an indemnified party and it gives notice to the indemnifying
party of the commencement of such Proceeding, the indemnifying party will be
entitled to participate in such Proceeding and, to the extent that it wishes
(unless (i) the indemnifying party is also a party to such Proceeding and the
indemnified party determines in good faith that joint representation would be
inappropriate, or (ii) the indemnifying party fails to provide reasonable
assurance to the indemnified party of its financial capacity to defend such
Proceeding and provide indemnification with respect to such Proceeding), to
assume the defense of such Proceeding with counsel satisfactory to the
indemnified party and, after notice from the indemnifying party to the
indemnified party of its election to assume the defense of such Proceeding, the
indemnifying party will not, as long as it diligently conducts such defense, be
liable to the indemnified party under this Article for any fees of other counsel
or any other expenses with respect to the defense of such Proceeding, in each
case subsequently incurred by the indemnified party in connection with the
defense of such Proceeding, other than reasonable costs of investigation. If the
indemnifying party assumes the defense of a Proceeding, (i) it will be
conclusively established for purposes of this Agreement that the claims made in
that Proceeding are within the scope of and subject to indemnification; (ii) no
compromise or settlement of such claims may be effected by the indemnifying
party without the indemnified party's consent unless (A) there is no finding or
admission of any violation of Mexican Legal Requirements or US Legal
Requirements, as the case may be, or any violation of the rights of any Person
and no effect on any other claims that may be made against the indemnified
party, and (B) the sole relief provided is monetary damages that are paid in
full by the indemnifying party; and (iii) the indemnified party will have no
liability with respect to any compromise or settlement of such claims effected
without its consent. If notice is given to an indemnifying party of the
commencement of any Proceeding and the indemnifying party does not, within ten
Business days after the indemnified party's notice is given, give notice to the
indemnified party of its election to assume the defense of such Proceeding, the
indemnifying party will be bound by any determination made in such Proceeding or
any compromise or settlement effected by the indemnified party. In the event of
a third party claim that requires a legal response prior to such ten-day period,
the indemnifying party shall be required to advise the indemnified party no
later than two Business Days of its election to assume the defense, provided,
however, such assumption shall not be deemed an acknowledgment of liability for
the claim.
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(c) Notwithstanding the foregoing, if an indemnified party determines
in good faith that there is a reasonable probability that a Proceeding may
adversely affect it or its Affiliates other than as a result of monetary damages
for which it would be entitled to indemnification under this Agreement, the
indemnified party may, by notice to the indemnifying party, assume the exclusive
right to defend, compromise, or settle such Proceeding, but the indemnifying
party will not be bound by any determination of a Proceeding so defended or any
compromise or settlement effected without its consent (which may not be
unreasonably withheld).
(d) The parties hereby consent to the non-exclusive jurisdiction of any
court in which a Proceeding is brought against an aggrieved party for purposes
of any claim that such party may have under this Agreement with respect to such
Proceeding or the matters alleged therein, and agree that process may be served
on the indemnifying party with respect to such a claim anywhere in the world.
SECTION 10.9 PROCEDURE FOR INDEMNIFICATION--OTHER CLAIMS
A claim for indemnification for any matter not involving a third-party
claim may be asserted by notice to the party from whom indemnification is
sought.
SECTION 10.10 RELEASES
As of the Closing, Seller does hereby for itself and its Affiliates
remise, release, acquit and forever discharge the Company and the Subsidiary and
their successors and assigns (collectively, the "COMPANY RELEASED PARTIES") of
and from 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, fixed or contingent, which
Seller and its Affiliates now have, own or hold or have at any time previously
had, owned or held against the Company Released Parties in respect of (i) any
contract, agreement or obligation with Seller or its Affiliates that is not
listed on Schedule 10.10 hereto (it being understood that those contracts,
agreements and obligations listed on Schedule 10.10 hereto shall not be
released) or (ii) any other obligation or liability, including without
limitation all liabilities created as a result of the sole or contributory
negligence, gross negligence and willful acts of any Company Released Party,
existing as of the Closing or relating to any matter that occurred on or prior
to the Closing; provided, however, that any claims, liabilities, debts or causes
of action that may arise in the connection with the failure of any of the
parties hereto to perform any of their obligations hereunder or under any other
agreement relating to the transactions contemplated hereby or from any breaches
by any of them of any representations or warranties herein or in connection with
any of such other agreements shall not be released or discharged pursuant to
this Agreement. Seller represents and warrants that it has not previously
assigned or transferred, or purported to assign or transfer, to any Person or
entity whatsoever all or any part of the claims, demands, liabilities,
responsibilities, disputes, causes of action or obligations released in this
Section 10.7. Seller covenants and agrees that it will not assign or transfer to
any Person or entity whatsoever all or any part of the claims, demands,
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liabilities, responsibilities, disputes, causes of action or obligations
released in this Section 10.7. The parties represent and warrant to each other
that they have read and understand all of the provisions of this Agreement and
that they have been represented or advised by legal counsel and other
professional advisors in connection with the negotiation, execution and delivery
of this Agreement.
ARTICLE 11. GENERAL PROVISIONS
SECTION 11.1 COVENANT NOT TO COMPETE
As a material inducement to Buyer to purchase the Shares, effective as
of the Closing Date and for a period of five years thereafter, and except as
otherwise permitted by the Manufacture Agreement dated as of June 19, 1998 (the
"Manufacture Agreement"), by and between Tubos xx Xxxxx de Mexico S.A., Grant
Prideco, S.A. de C.V. and Grant Prideco, Inc., each of Seller and Tamsa shall
not (and each of Seller and Tamsa shall cause each of its Affiliates, including
Siderca S.A., to not) directly or indirectly, develop, produce, manufacture or
fabricate Finished Drill Pipe or Connections (as each are defined in the
Manufacture Agreement) or tool joints to be welded to Green Pipe (as defined in
the Manufacture Agreement) in any geographic market in the world. Each of Seller
and Tamsa acknowledges that a remedy at law for any breach or attempted breach
of this Section 11.1 will be inadequate and further agrees that any breach of
this Section 11.1 will result in irreparable harm to Buyer and Buyer shall, in
addition to any other remedy that may be available to it, be entitled to
specific performance and injunctive and other equitable relief in case of any
such breach or attempted breach. Each of Seller and Tamsa acknowledges that this
covenant not to compete is being provided as an inducement to Buyer to purchase
the Shares and that this Section 11.1 contains reasonable limitations as to
time, geographical area and scope of activity to be restrained that do not
impose a greater restraint than is necessary to protect the goodwill or other
business interests of Buyer. Whenever possible, each provision of this Section
11.1 shall be interpreted in such a manner as to be effective and valid under
applicable law but if any provision of this Section 11.1 shall be prohibited by
or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remaining
provisions of this Section 11.1. If any provision of this Section 11.1 shall,
for any reason, be judged by any court of competent jurisdiction to be invalid
or unenforceable, such judgment shall not affect, impair or invalidate the
remainder of this Section 11.1 but shall be confined in its operation to the
provision of this Section 11.1 directly involved in the controversy in which
such judgment shall have been rendered. In the event that the provisions of this
Section 11.1 should ever be deemed to exceed the time or geographic limitations
permitted by applicable laws, then such provision shall be reformed to the
maximum time or geographic limitations permitted by applicable law. To the
extent the provisions of this Section 11.1 are judged to be invalid or
unenforceable in whole or in part, such invalidation or unenforceability shall
not affect in any manner the remaining provisions of this Agreement nor give
Buyer any right to seek reimbursement of any part of the Purchase Price nor
indemnification from Seller of any Damages suffered as a result of such
invalidation unless, in each case, such invalidation or determination of
unenforceability is a result of a challenge to the provisions of this Section
11.1 by Seller, Tamsa or any of their Affiliates or arises in connection with an
action taken by Buyer to enforce the provisions of this Section 11.1 against
Seller, Tamsa or one or more of their Affiliates.
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SECTION 11.2 RIGHT OF FIRST REFUSAL
(a) (i) Buyer agrees that for so long as the Manufacture Agreement is
in effect or for a period of 30 years from the date hereof in the event the
Manufacture Agreement is terminated by Seller by reason of a breach of Buyer of
the Manufacture Agreement, if Buyer or EVI shall elect to sell all of the stock
or all the operating assets of the Company (the "Company Business") to any
Person who is not an Affiliate of Buyer or if Buyer or EVI shall cause the
Company to be merged or consolidated with any Person other than Buyer or an
Affiliate of Buyer (each a "TF Proposed Disposition"), Buyer or EVI shall (or
shall cause any Affiliate of Buyer to which the stock or the assets of the
Company may have subsequently been transferred or conveyed, whether by asset
transfer, stock transfer, merger or otherwise) offer to Seller the right to
acquire the Company Business that is proposed to be sold on the same terms and
conditions under which Buyer, EVI or their Affiliate proposes to make such TF
Proposed Disposition.
(ii) EVI agrees that for so long as the Manufacture Agreement is in
effect or for a period of 30 years from the date hereof in the event the
Manufacture Agreement is terminated by Seller by reason of a breach of Buyer of
the Manufacture Agreement, if EVI shall elect to sell all of the stock or all
the operating assets of Grant Prideco, Inc. ("Grant") (the "Grant Business") to
any Person who is not an Affiliate of EVI or Grant or if EVI shall cause Grant
Prideco, Inc. to be merged or consolidated with any Person other than EVI or
Grant or an Affiliate of EVI or Grant (each a "Grant Proposed Disposition"), EVI
shall (or shall cause any Affiliate of EVI to which the stock or the assets of
Grant Prideco, Inc. may have subsequently been transferred or conveyed, whether
by asset transfer, stock transfer, merger or otherwise, to) offer to Seller the
right to acquire the Grant Business that is proposed to be sold on the same
terms and conditions under which EVI or its Affiliate proposes to make such
Grant Proposed Disposition.
(b) In the event of any TF Proposed Disposition or Grant Proposed
Disposition (each a "Proposed Disposition"), Buyer or EVI, as the case may be,
shall provide to Seller, at least 45 days prior to the Proposed Disposition, (i)
the general terms and conditions of the Proposed Disposition including the name
of the proposed purchaser and (ii) the documentation required to be executed by
Seller to purchase the Company Business or the Grant Business, as the case may
be, that is subject to the Proposed Disposition, which documentation shall be
the same as the documentation for the Proposed Disposition other than
information relating to the parties and conditions relating to Seller's rights
under this Agreement (the "Sale Documentation").
(c) If Seller elects to acquire the Company Business or the Grant
Business that is subject to the Proposed Disposition, Seller shall (i) notify
Buyer or EVI, as the case may be, in writing of such election by executing and
delivering to Buyer or EVI, as the case may be, the Sale Documentation (together
with any funds to be provided therewith) no later than 30 days after receipt of
such notice and (ii) subject to receipt of any necessary regulatory approvals on
the part of Buyer or EVI, as the case may be, or any of its Affiliates, close
the transaction within five days thereafter. Buyer or EVI, as the case may be,
shall, subject to the execution of a confidentiality agreement that is
substantially the same as that executed by the proposed purchaser, afford Seller
during the aforementioned period of 30 days access to the books, records,
facilities and personnel of the Company Business or the
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Grant Business, as the case may be, in order to allow Seller to conduct the same
due diligence afforded to the proposed purchaser.
(d) The foregoing right of first refusal granted to Seller shall not
apply to (i) any merger, consolidation, share exchange, combination, sale of
stock or change in control of EVI, or any successors thereto, (ii) any transfer,
sale, conveyance, merger, consolidation, share exchange or other business
combination involving all or substantially all of EVI's assets or its
successor's, (iii) any transfer, sale, merger or conveyance of the stock of EVI
(or any successor thereto), (iv) any merger, consolidation or transfer of the
stock or assets of Buyer or Grant to any Affiliate of Buyer or to any of
Buyer's, EVI's or their Affiliates' current or future subsidiaries, (v) any
manufacturing or operating changes effected by Buyer, Grant, EVI or their
Affiliates after the Closing with respect to the Company, Company Business,
Grant or Grant Business, respectively, as long as the Company, Company Business,
Grant or Grant Business continues to be owned or operated by the Company, EVI or
any of their Affiliates, (vi) any dividend or distribution of shares of Grant
shares to the stockholders of EVI or any successor thereto, (vii) any public
sale of shares of Grant (or any successor thereto), and (viii) a disposition of
any business other than the drill pipe and tubular manufacturing and threading
operations of the Grant or the Grant Business.
(e) If a Proposed Disposition is to be effected in a manner that would
involve the receipt by EVI, Buyer or any of its Affiliates of a security of
another Person (a "Third Party Security"), Seller shall be required to deliver
to EVI or Buyer, as the case may be, in lieu of the delivery of the Third Party
Security, cash in an amount equal to the sum of (i) the fair market value of the
Thirty Party Security to be received based on the opinion of an internationally
recognized investment banking firm to be selected by EVI or Buyer and (ii) an
amount sufficient to compensate EVI, Buyer or its Affiliate for any additional
taxes that may be required to be paid by them by virtue of receiving cash in
lieu of the Third Party Security with such amount to be determined and certified
by EVI's outside independent auditors (which shall be an internationally
recognized accounting firm).
(f) The rights provided under this Section 11.2 shall be considered
personal rights of Seller and may not, directly or indirectly, be transferred,
assigned or otherwise conveyed by Seller by contract, operation of law or
otherwise to any third party (other than an Affiliate of Seller and Tamsa for so
long and only for so long as such party is an Affiliate of Seller or Tamsa) and
any breach or attempted breach by Seller shall terminate any further obligations
of Buyer and its Affiliates under this Section 11.2. To assure compliance with
this provision, EVI shall have a right to reacquire the Grant Business or the
Company Business, as the case may be, if at any time within two years following
the purchase of the Grant Business or the Company Business by Buyer, Buyer
proposes to sell or otherwise dispose of the Grant Business or the Company
Business to a Person that is not an Affiliate of Buyer. The purchase price at
which EVI shall be entitled to purchase the Grant Business or the Company
Business shall be the same price at which the Grant Business or the Company
Business was sold to Buyer, subject to any reductions in such price as a result
of any dividends, distributions or other payments made or assets disposed of by
Buyer subsequent to such purchase.
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SECTION 11.3 GUARANTEE
Tamsa hereby unconditionally and irrevocably guarantees to discharge,
jointly and severally with Seller, without deduction, set-off, or counterclaim,
other than those rights available to Seller under this Agreement, (i) all of
Seller's obligations to Buyer arising from this Agreement and (ii) all costs and
expenses incurred by Buyer in connection with the enforcement of this guarantee
in whole or in part, including (without prejudice to the generality of the
foregoing) the reasonable legal costs and disbursements relating thereto.
SECTION 11.4 EXPENSES
Whether or not the Contemplated Transactions are consummated, other
than as expressly provided for herein, each of the parties hereto shall pay the
fees and expenses of its respective counsel, accountants and other experts, and
all other expenses incurred by such party incident to the negotiation,
preparation and execution of this Agreement and the consummation of the
Contemplated Transactions.
SECTION 11.5 PUBLIC ANNOUNCEMENTS
Subject to such disclosures as may be required by law or applicable
regulation, any public announcement or similar publicity with respect to this
Agreement or the Contemplated Transactions will be issued, if at all, at such
time and in such manner as the parties mutually agree considering their
respective statutory obligations.
SECTION 11.6 CONFIDENTIALITY
(a) Between the date of this Agreement and the Closing Date, Buyer and
Seller will maintain in confidence, and will cause the directors, officers,
employees, agents, and advisors of Buyer and the Companies to maintain in
confidence, any written, oral, or other information obtained in confidence from
another party or the Companies in connection with this Agreement or the
Contemplated Transactions, unless (a) such information is already known to such
party or to others not bound by a duty of confidentiality or such information
becomes publicly available through no fault of such party, (b) the use of such
information is necessary or appropriate in making any filing or obtaining any
consent or approval required for the consummation of the Contemplated
Transactions, or (c) the furnishing or use of such information is required by
legal proceedings.
(b) If the Contemplated Transactions are not consummated, each party
will return or destroy as much of such written information as the other party
may reasonably request.
SECTION 11.7 NOTICES
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by telecopier
(with written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the
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appropriate addresses and telecopier numbers set forth below (or to such other
addresses and telecopier numbers as a party may designate by notice to the other
parties):
if to Seller to:
Xxxxx Xxxx Xxxxxx
Edificio Parque Reforma
Xxxxxx Xxxxxxx 000, xxxx 00
Xxxxxxx Xxxxxxxxxxx Xxxxxxx
(11560) Mexico D.F., Mexico
Facsimile: (000) 000-0000
Confirm: (000) 000-0000
with copies to:
Cristian X. X. Xxxxxxx
Xxxxxxx X. Xxxx 0000, xxxx 00
0000 Xxxxxx Xxxxx, Xxxxxxxxx
Facsimile: (000) 000-0000
Confirm: (000) 000-0000
if to Buyer, to:
Grant Prideco, Inc. and XXX Xxxxxxxxxxx, Inc.
0 Xxxx Xxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxx
Facsimile: (000) 000-0000
Confirm: (000) 000-0000
SECTION 11.8 DISPUTE RESOLUTION
All disputes, controversies or claims arising out or in connection with
this Agreement including any questions as to the existence, validity,
termination, discharge, breach or enforceability of this Agreement and of this
arbitration clause shall be finally settled by three arbitrators appointed in
accordance with the arbitration rules of the International Chamber of Commerce
in force at the date of the request for arbitration. For such purpose, Buyer and
EVI shall be considered a single party and Seller and Tamsa shall be considered
a single party. The arbitration shall be held in Houston, Texas. The arbitration
proceedings shall be carried out in the English language. The award rendered in
any arbitration commenced hereunder shall be final and conclusive and judgement
thereon may be entered in any court having jurisdiction for its enforcement.
Neither party shall appeal to any court from the decision of the arbitration
panel. In addition, neither party shall have any right to commence or maintain
any suit or legal proceeding concerning a dispute hereunder until the dispute
has been determined in accordance with the arbitration procedure provided for
herein and then only for enforcement of the award rendered in such arbitration.
Pending settlement of any dispute, the parties shall abide by their obligations
under this Agreement without prejudice to a final adjustment in accordance with
an award rendered in an arbitration settling such dispute.
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SECTION 11.9 FURTHER ASSURANCES
The parties agree (a) to furnish upon request to each other such
further information, (b) to execute and deliver to each other such other
documents, and (c) to do such other acts and things, all as the other party may
reasonably request for the purpose of carrying out the intent of this Agreement
and the documents referred to in this Agreement.
SECTION 11.10 WAIVER
The rights and remedies of the parties to this Agreement are cumulative
and not alternative. Neither the failure nor any delay by any party in
exercising any right, power, or privilege under this Agreement or the documents
referred to in this Agreement will operate as a waiver of such right, power, or
privilege, and no single or partial exercise of any such right, power, or
privilege will preclude any other or further exercise of such right, power, or
privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
SECTION 11.11 SCHEDULES
(a) The disclosures in the schedules, and those in any supplement
thereto, relate only to the representations and warranties in the section of the
Agreement to which they expressly relate and not to any other representation or
warranty in this Agreement.
(b) In the event of any inconsistency between the statements in the
body of this Agreement and those in the schedules (other than an exception
expressly set forth as such in the schedules with respect to a specifically
identified representation or warranty), the statements in the body of this
Agreement will control.
SECTION 11.12 ASSIGNMENTS, SUCCESSORS AND NO THIRD-PARTY RIGHTS
Neither party may assign any of its rights under this Agreement without
the prior consent of the other parties; provided, however, that the parties may
freely assign their rights and/or obligations under this Agreement to an
Affiliate, subject to remaining liable for their obligations hereunder.
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SECTION 11.13 SEVERABILITY
Any provision of this Agreement that is determined by a court of
competent jurisdiction to be invalid, illegal or unenforceable shall be
ineffective to the extent of such invalidity, illegality or unenforceability,
without affecting in any way the remaining provisions hereof in such
jurisdiction or rendering that or any other provision of this Agreement invalid,
illegal or unenforceable, so long as the material purposes of this Agreement can
be determined and effectuated. Should any provision of this Agreement be so
declared invalid, illegal or unenforceable, the Parties shall agree on a valid
provision to substitute it.
SECTION 11.14 SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Agreement are provided for convenience
only and will not affect its construction or interpretation. All references to
"Article" or "Section" or "Articles" or "Sections" refer to the corresponding
Article or Sections of this Agreement. All words used in this Agreement will be
construed to be of such gender or number as the circumstances require. Unless
otherwise expressly provided, the word "including" does not limit the preceding
words or terms.
SECTION 11.15 TIME OF ESSENCE
With regard to all dates and time periods set forth or referred to in
this Agreement, time is of the essence.
SECTION 11.16 GOVERNING LAW
This Agreement will be governed by the laws of New York State without
regard to conflicts of laws principles; except that the legal transfer of the
Shares and Minority Interest shall be governed by the laws of Mexico.
SECTION 11.17 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and all of which,
when taken together, will be deemed to constitute one and the same agreement.
SECTION 11.18 ENTIRE AGREEMENT
This Agreement, including the Schedules, constitutes the entire
Agreement between the parties with respect to the subject matter hereof and
supersedes any existing agreements between them whether oral or written. The
terms of this Agreement shall only be amended, modified or supplemented as set
forth herein or in a writing signed by or on behalf of all the parties.
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
XXX XXXXXXXXXXX, INC.
By: Xxxx Xxxxx
Senior Vice President
PRIDECOMEX HOLDING, S.A. DE C.V.
By: Xxxx Xxxxx
Authorized Signatory
TUBOS XX XXXXX DE MEXICO, S.A.
By: Xxxxx Xxxx - Xxxxxxxx Xxxxxxx
Attorneys-in-fact
TAMSIDER S.A. DE C.V.
By: Xxxxx Xxxx - Xxxxxxxx Xxxxxxx
Attorneys-in-fact
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SCHEDULE 1
DEFINITIONS
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person directly or indirectly,
through the ownership of voting securities or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"BEST EFFORTS" means the efforts that a prudent Person desirous of achieving a
result would use in similar circumstances to ensure that such result is achieved
as reasonably expeditiously as possible; provided, however, that an obligation
to use Best Efforts under this Agreement does not require the Person subject to
that obligation to take actions that would result in an adverse change in the
benefits to such Person under this Agreement and the Contemplated Transactions.
"BEST KNOWLEDGE", when referred to a Person, means the knowledge of such Person
obtained during the course of such Person's duties and activities and after due
inquiry of and consultation with the directors and executive officers of the
Companies or Buyer, as the case may be.
"BREACH", a "Breach" of a representation, warranty, covenant, obligation or
other provision of this Agreement or any instrument delivered pursuant to this
Agreement will be deemed to have occurred if there is or has been (a) any
inaccuracy in or breach of, or any failure to perform or comply with, such
representation, warranty, covenant, obligation, or other provision, or (b) any
claim (by any Person) or other occurrence or circumstance that is or was
inconsistent with such representation, warranty, covenant, obligation, or other
provision, and the term "Breach" means any such inaccuracy, breach, failure,
claim, occurrence, or circumstance.
"BUSINESS DAY", means any day of the week on which banks are open for business
in New York, New York and Mexico City.
"BUYER", as defined in the first paragraph of this Agreement.
"BUYER LOSSES", as defined in Section 10.2.
"CLEARANCES", means decisions by the Comision Federal de Competencia and the
Comision de Nacional Inversiones Extranjeras authorizing the parties to
consummate the transaction herein agreed.
"CLOSING", as defined in Section 2.3.
"CLOSING DATE", means the date and time as of which the Closing actually takes
place.
"COMPANIES", means the Company and the Subsidiary.
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"COMPANY", means T.F. de Mexico, S.A. de C.V.
"COMPANY CONDITION", as defined in Section 3.3.
"COMPANY RELEASED PARTIES", as defined in Section 10.10.
"CONTEMPLATED TRANSACTIONS", means all of the transactions contemplated by this
Agreement, including: (a) the sale of the Shares by Seller to Buyer; (b) the
sale of the Minority Interest by an Affiliate of Seller to a designee of Buyer;
(c) the payment of the Purchase Price and the Intercompany Debt by Buyer; (d)
the performance by Buyer and Seller of their respective covenants and
obligations under this Agreement; and (e) Buyer's acquisition and ownership of
the Shares and exercise of control over the Companies.
"CONTRACT", means any agreement, contract, arrangement, commitment,
understanding, indenture, note, instrument, lease, mortgage, franchise, license,
obligation, promise, or undertaking , whether express or implied, oral or
written, to which a Person is a party or bound or to which its properties or
assets are subject.
"DAMAGES", means any and all liabilities, losses, damages, demands, assessments,
claims, costs and expenses (including interest, awards, judgments, penalties,
settlements, fines, costs or remediation, diminutions in value, costs and
expenses incurred in connection with investigating and defending any claims or
causes of action (including, without limitation, attorneys' fee and expenses and
all fees and expenses of consultants and other professionals)):
"ENCUMBRANCE", means any charge, claim, mortgage, community property interest,
condition, equitable interest, lien, option, pledge, security interest, right of
first refusal, restriction of any kind, including any restriction on use,
voting, transfer, receipt of income, or exercise of any other attribute of
ownership or other rights of any third Person of any nature whatsoever.
"FINANCIAL STATEMENTS", as defined in Section 3.5.
"GAAP", means generally accepted accounting principles in the United Mexican
States, applied on a consistent basis throughout periods covered by the
Financial Statements.
"GOVERNMENTAL BODY", means any arbitrator, court, administrative or regulatory
agency, commission, department, board or bureau or body or other government or
authority or instrumentality or any entity or Person exercising, or entitled to
exercise, any administrative, executive, judicial, legislative, police,
regulatory or taxing authority or power of any nature of or pertaining to the
governments of the United Mexican States.
"INTERCOMPANY DEBT", means the sum of 1,550,000 United States Dollars owed by
the Company to Compania Mersin de Panama, which sum shall be paid by Tamsa on
its due date, thus becoming creditor of the Company for such amount.
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"LEASE AGREEMENT", means the Contrato de Arrendamiento, entered into by the
Company, as lessor, and TF de Mexico, S.A. de C.V., as lessee, on September 30,
1993, as amended.
"LEGAL REQUIREMENT", means any Mexican federal, state, local or municipal or
other administrative order, constitution, law, ordinance, principle of common
law, rule, regulation, statute or treaty in force in the United Mexican States.
"MANAGEMENT SERVICES AGREEMENT", means the agreement between the Company and
Tubos xx Xxxxx de Mexico S.A., an Affiliate of Seller, for the provision by the
latter to the former of certain administrative and corporate services.
"MANUFACTURE AGREEMENT", as defined in Section 11.1.
"MINORITY INTEREST", means forty (40) shares issued by the Subsidiary.
"ORDER", means any award, decision, injunction, judgment, order, ruling,
subpoena or verdict entered, issued, made or rendered by any Governmental Body.
"ORDINARY COURSE OF BUSINESS" an action taken by a Person will be deemed to have
been taken in the "Ordinary Course of Business" only if: (a) such action is
consistent with the past practices of such Person and is taken in the ordinary
course of the normal day-to-day operations of such Person; (b) such action is
not required to be authorized by the board of directors of such Person (or by
any Person or group of Persons exercising similar authority) and is not required
to be specifically authorized by the parent company (if any) of such Person; and
(c) such action is similar in nature and magnitude to actions customarily taken,
without any authorization by the board of directors (or by any Person or group
of Persons exercising similar authority), in the ordinary course of the normal
day-to-day operations of other Persons that are in the same line of business as
such Person.
"ORGANIZATIONAL DOCUMENTS", means (a) the articles or certificate of
incorporation and the bylaws of a corporation; (b) the partnership agreement and
any statement of partnership of a general partnership; (c) the limited
partnership agreement and the certificate of limited partnership of a limited
partnership; (d) any charter or similar document adopted or filed in connection
with the creation, formation, or organization of a Person; and (e) any amendment
to any of the foregoing.
"PERSON", means any individual, business, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, or other entity
or Governmental Body.
"PROCEEDING", means any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative,
procedural or informal) commenced, brought, conducted or heard by or before, or
otherwise involving, any Governmental Body.
"PURCHASE PRICE", means the price set forth in Section 2.2(a).
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"REPRESENTATIVE", means with respect to a particular Person, any director,
officer, employee, agent, consultant, advisor, or other representative of such
Person, including legal counsel, accountants and financial advisors.
"SELLER", as defined in the first paragraph of this Agreement.
"SELLER LOSSES", as defined in Section 10.4
"SHARES", as defined in the Recitals of this Agreement.
"SUBSIDIARY", means Inmobiliaria Industrial de Veracruz, S.A. de C.V.
"SURVIVAL PERIOD", as defined in Section 10.1
"TAMSA", means Tubos xx Xxxxx de Mexico S.A.
"TAX" and "TAXES", means all Mexican, U.S. and other state, local, municipal,
international, 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, profits 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, together with any interests, penalties, additions to tax, fines or
other additional amounts imposed thereon or related thereto but excluding any
taxes, charges, fees, duties, levies, imposts, customs or other assessments that
are payable by Grant Prideco, S.A. de C.V. pursuant to the Lease.
"TAX RETURN", means any return (including any information return), declaration,
report, statement, schedule, notice, form, or other document or information
filed with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection,
or payment of any Tax or in connection with the administration, implementation
or enforcement of or compliance with any Legal Requirement relating to any Tax.
"$", means United States Dollars.
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