EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
By and Among
EVI, INC.,
CHRISTIANA ACQUISITION, INC.,
CHRISTIANA COMPANIES, INC.
and
C2, INC.
December 12, 1997
TABLE OF CONTENTS
ARTICLE I
THE MERGER . . . . . . . . . . . . . 1
1.1 The Merger. . . . . . . . . . . . . . . . . . . . . . 1
1.2 Closing Date. . . . . . . . . . . . . . . . . . . . . 2
1.3 Consummation of the Merger. . . . . . . . . . . . . . 2
1.4 Effects of the Merger. . . . . . . . . . . . . . . . . 2
1.5 Certificate of Incorporation; Bylaws. . . . . . . . . 2
1.6 Directors and Officers. . . . . . . . . . . . . . . . 2
1.7 Conversion of Securities. . . . . . . . . . . . . . . 2
1.8 Exchange of Certificates . . . . . . . . . . . . . . . 4
(a) Exchange Agent . . . . . . . . . . . . . . . . . 4
(b) Payment of Merger Consideration . . . . . . . . . 4
(c) Retention of Cash Pending Post Closing Audit . . 4
(d) Payment of Contingent Cash Consideration . . . . 4
(e) Exchange Procedure . . . . . . . . . . . . . . . 5
(f) Distributions with Respect to Unexchanged
Christiana Shares . . . . . . . . . . . . . . . . . . . . . 6
(g) No Further Ownership Rights in Christiana Shares 6
(h) Escheat . . . . . . . . . . . . . . . . . . . . . 6
1.9 Taking of Necessary Action; Further Action . . . . . . 7
ARTICLE II
REPRESENTATIONS AND WARRANTIES . . . . . . . . 7
2.1 Representations and Warranties of EVI and Sub. . . . . 7
(a) Organization and Compliance with Law. . . . . . . 7
(b) Capitalization . . . . . . . . . . . . . . . . . 7
(c) Authorization and Validity of Agreement. . . . 8
(d) No Approvals or Notices Required; No Conflict . . 8
(e) Commission Filings; Financial Statements . . . . 8
(f) Absence of Certain Charges and Events . . . . . . 9
(g) Tax Matters . . . . . . . . . . . . . . . . . . . 9
(h) Voting Requirements. . . . . . . . . . . . . . . 9
(i) Brokers . . . . . . . . . . . . . . . . . . . . . 9
(j) Information Supplied . . . . . . . . . . . . . . 10
2.2 Representations and Warranties of Christiana and C2. . 10
(a) Organization. . . . . . . . . . . . . . . . . . . 10
(b) Capitalization. . . . . . . . . . . . . . . . . . 10
(c) Authorization and Validity of Agreement. . . . . 11
(d) No Approvals or Notices Required; No Conflict
with Instruments to which Christiana is a Party. . . . 12
(e) Commission Filings; Financial Statements. . . . . 13
(f) Conduct of Business in the Ordinary Course;
Absence of Certain Changes and Events. . . . . . . . . 13
(g) Litigation . . . . . . . . . . . . . . . . . . . 14
(h) Employee Benefit Plans. . . . . . . . . . . . . . 14
(i) Taxes. . . . . . . . . . . . . . . . . . . . . . 16
(j) Environmental Matters. . . . . . . . . . . . . . 17
(k) Investment Company . . . . . . . . . . . . . . . 18
(l) Severance Payments. . . . . . . . . . . . . . . . 18
(m) Voting Requirements. . . . . . . . . . . . . . . 19
(n) Brokers . . . . . . . . . . . . . . . . . . . . . 19
(o) Assets and Liabilities at Closing . . . . . . . . 19
(p) Compliance with Laws . . . . . . . . . . . . . . 19
(q) Contracts . . . . . . . . . . . . . . . . . . . . 20
(r) Title to Property . . . . . . . . . . . . . . . . 21
(s) Insurance Policies . . . . . . . . . . . . . . . 21
(t) Loans. . . . . . . . . . . . . . . . . . . . . . 21
(u) No Fraudulent Transfer . . . . . . . . . . . . . 21
(v) Information Supplied . . . . . . . . . . . . . . 22
ARTICLE III
COVENANTS OF CHRISTIANA . . . . . . . . . . 22
3.1 Conduct of Business by Christiana Pending the Merger. 22
3.2 Cash Requirements . . . . . . . . . . . . . . . . . . 25
3.3 Affiliates' Agreements . . . . . . . . . . . . . . . . 25
ARTICLE IV
COVENANTS OF EVI PRIOR TO THE EFFECTIVE TIME . . . . . 26
4.1 Reservation of EVI Stock . . . . . . . . . . . . . . . 26
4.2 Conduct of EVI Pending the Merger . . . . . . . . . . 26
4.3 Stock Exchange Listing. . . . . . . . . . . . . . . . 26
ARTICLE V
ADDITIONAL AGREEMENTS . . . . . . . . . . 26
5.1 Joint Proxy Statement/Prospectus; Registration
Statement. . . . . . . . . . . . . . . . . . . . . . . . . 26
5.2 Accountants Letter. . . . . . . . . . . . . . . . . . 26
5.3 Meetings of Stockholders. . . . . . . . . . . . . . . 27
5.4 Filings; Consents; Reasonable Efforts. . . . . . . . . 27
5.5 Notification of Certain Matters. . . . . . . . . . . . 27
5.6 Expenses. . . . . . . . . . . . . . . . . . . . . . . 28
5.7 Christiana's Employee Benefits. . . . . . . . . . . . 28
5.8 Liquidation or Merger of Christiana. . . . . . . . . . 28
ARTICLE VI
CONDITIONS . . . . . . . . . . . . . 29
6.1 Conditions to Obligation of Each Party to Effect the
Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.2 Additional Conditions to Obligations of EVI. . . . . . 29
6.3 Additional Conditions to Obligations of Christiana. . 31
ARTICLE VII
MISCELLANEOUS . . . . . . . . . . . . 32
7.1 Termination. . . . . . . . . . . . . . . . . . . . . . 32
7.2 Effect of Termination . . . . . . . . . . . . . . . . 33
7.3 Waiver and Amendment . . . . . . . . . . . . . . . . . 33
7.4 Nonsurvival of Representations and Warranties. . . . . 33
7.5 Public Statements. . . . . . . . . . . . . . . . . . . 33
7.6 Assignment. . . . . . . . . . . . . . . . . . . . . . 33
7.7 Notices. . . . . . . . . . . . . . . . . . . . . . . . 34
7.8 Governing Law . . . . . . . . . . . . . . . . . . . . 35
7.9 Arbitration. . . . . . . . . . . . . . . . . . . . . . 35
7.10 Severability. . . . . . . . . . . . . . . . . . . . . 36
7.11 Counterparts. . . . . . . . . . . . . . . . . . . . . 36
7.12 Headings. . . . . . . . . . . . . . . . . . . . . . . 36
7.13 Confidentiality Agreement. . . . . . . . . . . . . . . 36
7.14 Entire Agreement: Third Party Beneficiaries. . . . . . 36
7.15 Disclosure Letters. . . . . . . . . . . . . . . . . . 36
List of Exhibits
Exhibit A - Logistic Purchase Agreement
Exhibit B - Amended and Restated Certificate of Incorporation of
Christiana
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER dated as of December 12, 1997 (this
"Agreement"), is made and entered into by and among EVI, Inc., a Delaware
corporation ("EVI"), Christiana Acquisition, Inc., a Wisconsin corporation
and wholly owned subsidiary of EVI ("Sub"), Christiana Companies, Inc., a
Wisconsin corporation ("Christiana"), and C2, Inc., a Wisconsin
corporation ("C2").
WHEREAS, subject to and in accordance with the terms and conditions
of this Agreement, the respective Boards of Directors of EVI, Sub and
Christiana, and EVI as sole stockholder of Sub, have approved the merger
of Sub with and into Christiana (the "Merger"), whereby each issued and
outstanding share of common stock, $1.00 par value, of Christiana
("Christiana Common Stock") not owned directly or indirectly by Christiana
will be converted into the right to receive (i) common stock, $1.00 par
value, of EVI ("EVI Common Stock") plus (ii) the Cash Consideration Per
Share (as defined in Section 1.7(e)) and (iii) the Contingent Cash
Consideration Per Share (as defined in Section 1.7(f));
WHEREAS, as a condition to the Merger, Christiana will sell to C2
two-thirds of the interest (the "Logistic Interest") in Total Logistic
Control, LLC, a Delaware limited liability company and wholly owned
subsidiary of Christiana ("Logistic"), in consideration for $10,666,667 in
cash (the "Logistic Sale") pursuant to a Purchase Agreement between
Christiana, C2, EVI and Sub in substantially the form attached hereto as
Exhibit A (the "Logistic Purchase Agreement");
WHEREAS, immediately after the Effective Time, Christiana will only
hold the Christiana Assets, as such terms are hereinafter defined in
Sections 1.3 and 2.2(o);
WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of
Section 368(a)(1)(A) by reason of Section 368(a)(2)(E) of the Internal
Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, the parties hereto desire to set forth certain
representations, warranties and covenants made by each to the other as an
inducement to the consummation of the Merger;
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties and covenants herein contained, the parties
hereto hereby agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Subject to and in accordance with the terms and
conditions of this Agreement and in accordance with the General
Corporation Law of the State of Wisconsin ("WGCL"), at the Effective Time
(as defined in Section 1.3), Sub shall be merged with and into Christiana.
As a result of the Merger, the separate corporate existence of Sub shall
cease and Christiana shall continue as the surviving corporation
(sometimes referred to herein as the "Surviving Corporation"), and all the
properties, rights, privileges, powers and franchises of Sub and
Christiana shall vest in the Surviving Corporation, without any transfer
or assignment having occurred, and certain liabilities, debts and duties
of Sub and Christiana shall attach to the Surviving Corporation, all in
accordance with the WGCL and subject to the provisions of the Logistic
Purchase Agreement.
1.2 Closing Date. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of
Fulbright & Xxxxxxxx L.L.P, Houston, Texas, as soon as practicable after
the satisfaction or waiver of the conditions set forth in Article VI
hereof or at such other time and place and on such other date as EVI and
Christiana shall agree; provided that the closing conditions set forth in
Article VI hereof shall have been satisfied or waived at or prior to such
time. The date on which the Closing occurs is herein referred to as the
"Closing Date".
1.3 Consummation of the Merger. As soon as practicable on the
Closing Date, the parties hereto will cause the Merger to be consummated
by filing with the Secretary of State of Wisconsin a certificate of merger
in such form as required by, and executed in accordance with, the relevant
provisions of the WGCL. The "Effective Time" of the Merger, as that term
is used in this Agreement, shall mean such time as a certificate of merger
is duly filed with the Wisconsin Secretary of State or at such later time
(not to exceed seven days from the date the certificate of merger is
filed) as is specified in the certificates of merger pursuant to the
mutual agreement of EVI and Christiana.
1.4 Effects of the Merger. The Merger shall have the effects set
forth in the applicable provisions of the WGCL. If at any time after the
Effective Time of the Merger, the Surviving Corporation shall consider or
be advised that any further assignments or assurances in law or otherwise
are necessary or desirable to vest, perfect or confirm, of record or
otherwise, in the Surviving Corporation, all rights, title and interests
in all real estate and other property and all privileges, powers and
franchises of Christiana and Sub, the Surviving Corporation and its proper
officers and directors, in the name and on behalf of Christiana and Sub,
shall execute and deliver all such proper deeds, assignments and
assurances in law and do all things necessary and proper to vest, perfect
or confirm title to such property or rights in the Surviving Corporation
and otherwise to carry out the purpose of this Agreement, and the proper
officers and directors of the Surviving Corporation are fully authorized
in the name of Christiana or otherwise to take any and all such action.
1.5 Certificate of Incorporation; Bylaws. The Certificate of
Incorporation of Christiana, as amended and restated by the amendment set
forth in Exhibit B attached hereto, shall be the Certificate of
Incorporation of the Surviving Corporation and thereafter shall continue
to be its Certificate of Incorporation until amended as provided therein
or under the WGCL. The bylaws of Sub, as in effect immediately prior to
the Effective Time, shall be the bylaws of the Surviving Corporation and
thereafter shall continue to be its bylaws until amended as provided
therein or under the WGCL.
1.6 Directors and Officers. The directors of Sub immediately prior
to the Effective Time shall be the directors of the Surviving Corporation
at and after the Effective Time, each to hold office in accordance with
the Certificate of Incorporation and bylaws of the Surviving Corporation,
and the officers of Sub immediately prior to the Effective Time shall be
the officers of the Surviving Corporation at and after the Effective Time,
in each case until the earlier of their resignation or removal or their
respective successors are duly elected or appointed and qualified.
1.7 Conversion of Securities. Subject to the terms and conditions
of this Agreement, at the Effective Time, by virtue of the Merger and
without any further action on the part of EVI, Christiana, Sub or their
stockholders:
(a) Subject to adjustments pursuant to Sections 1.7(d) and
1.7(e) hereof, each share of Christiana Common Stock issued and
outstanding immediately prior to the Effective Time (the "Christiana
Shares") shall be converted into the right to receive (i) .75876 of
one share of EVI Common Stock (the "Stock Exchange Ratio") plus
(ii) the Cash Consideration Per Share as defined in Section 1.7(e)
and (iii) the Contingent Cash Consideration Per Share (as defined in
Section 1.7(f)); provided, however, that no fractional shares of EVI
Common Stock shall be issued and, in lieu thereof, all fractional
shares of EVI Common Stock that would otherwise be issuable in the
Merger shall be rounded to the nearest whole share of EVI Common
Stock. Except as set forth in the preceding sentence with respect to
the Cash Consideration Per Share, no other consideration will be paid
to the Christiana stockholders.
(b) Each Christiana Share owned directly or indirectly by
Christiana as treasury stock and each Christiana Share owned by Sub,
EVI or any direct or indirect wholly-owned subsidiary of EVI or of
Christiana immediately prior to the Effective Time shall be canceled
and extinguished without any conversion thereof and no payment or
other consideration shall be made or paid with respect thereto.
(c) Each share of common stock, $1.00 par value, of Sub issued
and outstanding immediately prior to the Effective Time shall be
converted into one fully paid and nonassessable share of common
stock, $1.00 par value, of the Surviving Corporation.
(d) The Stock Exchange Ratio is based on (i) 5,136,630 shares
of Christiana Common Stock being issued and outstanding immediately
prior to the Effective Time and (ii) 3,897,462 shares of EVI Common
Stock being held by Christiana immediately prior to the Effective
Time. In the event the number of shares of Christiana Common Stock
outstanding immediately prior to the Effective Time is greater or
less than 5,136,630 or the number of shares of EVI Common Stock held
by Christiana immediately prior to the Effective Time is greater or
less than 3,897,462, the Stock Exchange Ratio shall be adjusted to
equal the number of shares of EVI Common Stock held by Christiana
immediately prior to the Effective Time divided by the number of
shares of Christiana Common Stock issued and outstanding immediately
prior to the Effective Time.
(e) The "Cash Consideration Per Share", shall equal the
quotient of the Christiana Net Cash divided by 5,136,630. The
"Christiana Net Cash" shall mean and be equal to (i) the sum of
(A) $20,000,000 obtained in connection with the TLC Dividend, (B)
$10,666,667 to be obtained in connection with the Logistic Sale
(provided, however, that if such funds are not received by Christiana
when and as required under the Logistic Purchase Agreement, such
funds will not be considered as part of Christiana Net Cash),
(C) $3,000,000 obtained in connection with the Wiscold Note, (D) the
cash received from the exercise of stock options and (E) all other
cash on hand of Christiana at the Closing minus (ii) the sum of (A)
an amount of cash necessary to pay the Christiana Liabilities in full
without giving effect to the use or application of any tax deductions
relating to the exercise of options or any tax benefits that may be
realized as a result of amended Tax Returns and (B) $10,000,000. The
"Cash Consideration Per Share" is based on 5,136,630 shares of
Christiana Common Stock being issued and outstanding immediately
prior to the Effective Time. In the event the number of shares of
Christiana Common Stock outstanding immediately prior to the
Effective Time is greater or less than 5,136,630, the Cash
Consideration Per Share shall be adjusted to equal the quotient of
the Christiana Net Cash divided by the number of shares of Christiana
Common Stock issued and outstanding immediately prior to the
Effective Time. The terms "TLC Dividend," "Wiscold Note" and
"Christiana Liabilities" shall have the meanings set forth in
Sections 3.1(s), 3.1(t) and 2.2(o), respectively.
(f) The "Contingent Cash Consideration Per Share" shall mean
the Remaining Contingent Cash divided by 5,136,630. The "Remaining
Contingent Cash" shall mean $10,000,000 less the sum of (i) all
Assumed Liabilities (as defined in the C2 Purchase Agreement) paid by
Christiana, EVI or their respective successors and assigns during the
Contingent Liability Period and (ii) all other Liabilities (as
defined in the Logistic Purchase Agreement) incurred by or on behalf
of them during the Contingent Liability Period; provided, however,
that no subtraction shall be made in either (i) or (ii) for
liabilities previously subtracted for Christiana Liabilities in
Section 1.7(e). The Contingent Liability Period shall mean the
period from the Effective Date through the fifth anniversary of
Effective Date; provided, however, that if on the fifth anniversary
of the Effective Date there is any pending or threatened claim,
demand or suit or existing matter for which EVI has reasonably
determined that an EVI Indemnified Party (as defined in the Logistic
Purchase Agreement) will be entitled to indemnification under
Section 6.1(a) of the Logistic Purchase Agreement, the Contingent
Liability Period shall be extended until such time that such claim,
demand, suit or matter is wholly resolved, paid and not subject to
appeal or further claims. The "Contingent Cash Consideration Per
Share" is based on 5,136,630 shares of Christiana Common Stock being
issued and outstanding immediately prior to the Effective Time. In
the event the number of shares of Christiana Common Stock outstanding
immediately prior to the Effective Time is greater or less than
5,136,630, the Contingent Cash Consideration Per Share shall be
adjusted to equal the quotient of the Remaining Contingent Cash
divided by the number of shares of Christiana Common Stock issued and
outstanding immediately prior to the Effective Time.
1.8 Exchange of Certificates.
(a) Exchange Agent. Prior to the Effective Time of the Merger,
EVI shall select a bank or trust company to act as exchange agent
(the "Exchange Agent") for the issue of shares of EVI Common Stock
upon surrender of certificates representing Christiana Shares.
(b) Payment of Merger Consideration. EVI shall take all steps
necessary to enable and cause there to be provided to the Exchange
Agent on a timely basis, as and when needed after the Effective Time
of the Merger, certificates for the shares of EVI Common Stock to be
issued upon the conversion of the Christiana Shares pursuant to
Section 1.7 and the cash necessary to be issued for the Cash
Consideration Per Share. The Contingent Cash Consideration Per Share
shall be paid as provided in Section 1.8(d).
(c) Retention of Cash Pending Post Closing Audit. Within 30
days following the Effective Date, EVI shall (i) complete a post
closing audit by EVI of the Christiana Net Cash and (ii) pay to the
Exchange Agent on behalf of the holders of the Christiana Shares the
Cash Consideration Per Share in respect of such Christiana Shares
subject to the prior presentation of the certificates that
immediately prior to the Effective Time represented the outstanding
Christiana Shares (the "Certificates").
(d) Payment of Contingent Cash Consideration. Within 60 days
following the expiration of the Contingent Liability Period, EVI
shall send a notice to the prior holders of the Christiana Shares as
of the Effective Time of the Merger at their last known address
advising them as to the amount of the Contingent Cash Consideration
Per Share as determined in the reasonable good faith by EVI;
provided, however, that if on the fifth anniversary of the Effective
Date there is any pending or threatened claim, demand or suit or
existing matter for which EVI has reasonably determined an EVI
Indemnified Party will be entitled to indemnification under
Section 6.1(a) of the Logistic Agreement (an "Extension Event"), EVI
shall within 60 days thereafter determine the amount, if any, of the
Contingent Cash Consideration that is in excess of the sum of (i) the
amount necessary to pay the full amount of all such pending or
threatened claims, demands, suits or matters based on the amount
claimed, demanded or sought and (ii) the estimated costs of
investigation and defense of such matters (the "Excess Cash") and
send a notice to the prior holders of the Christiana Shares as of the
Effective Time of the Merger at their last known address advising
them of the amount of the Excess Cash Per Share (as defined below).
The Excess Cash Per Share shall mean the Excess Cash divided by the
number of shares of Christiana Common Stock issued and outstanding
immediately prior to the Effective Time. The Excess Cash Per Share
shall be part of the Contingent Cash Per Share and not a separate
right to payment. Such determinations shall be conclusive and
binding on the prior holders of the Christiana Shares. Subject to
any limitations existing under law, along with the aforementioned
notice, EVI shall send to each holder of record of a Certificate that
was tendered for exchange pursuant to Section 1.8(e) a check in an
amount equal to (i) if an Extension Event exists on the fifth
anniversary of the Effective Date, the Excess Cash Per Share with the
first notice and the Contingent Cash Consideration Per Share, if any,
less the Excess Cash Per Share at the time of the second notice and
(ii) if an Extension Event does not exist on the fifth anniversary of
the Effective Time of the Merger, the Contingent Cash Consideration
Per Share, in each case, payable in respect of the Christiana Shares
represented by such Certificate. Such payments shall be made without
interest and be subject to any applicable withholding for taxes
thereon. The Contingent Cash Consideration Per Share shall represent
an inchoate right to receive cash in the future under certain limited
circumstances provided herein and shall not represent any right to or
in any of the assets of EVI or Christiana. The right to receive the
Contingent Cash Consideration Per Share shall not be transferrable
except for transfers by operation of law or by will or intestate
succession. EVI may, but shall not be required to, establish a trust
or escrow fund with respect to the Contingent Cash Consideration Per
Share that may be payable hereunder.
(e) Exchange Procedure. As soon as reasonably practical after
the Effective Time of the Merger, the Exchange Agent shall mail to
each holder of record of a Certificate or Certificates, other than
EVI, Sub and Christiana and any directly or indirectly wholly owned
subsidiary of EVI, Sub or Christiana, (i) a letter of transmittal
(which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of
the Certificates to the Exchange Agent and shall be in a form and
have such other provisions as EVI and Sub may reasonably specify) and
(ii) instructions for use in effecting the surrender of the
Certificates in exchange for the certificates representing the shares
of EVI Common Stock, the Cash Consideration Per Share and Contingent
Cash Consideration Per Share. Upon surrender of a Certificate for
cancellation to the Exchange Agent or to such other agent or agents
as may be appointed by the Surviving Corporation, together with such
letter of transmittal, duly executed, and such other documents as may
reasonably be required by the Exchange Agent, the holder of such
Certificate shall be entitled to receive in exchange therefor a
certificate or certificates representing the number of whole shares
of EVI Common Stock into which the Christiana Shares theretofore
represented by such Certificate shall have been converted pursuant to
Section 1.7 and the Cash Consideration Per Share and Contingent Cash
Consideration Per Share as provided in Section 1.8(c) and (d), and
the Certificate so surrendered shall forthwith be canceled. If the
shares of EVI Common Stock are to be issued to an individual,
corporation, limited liability company, partnership, governmental
authority or any other entity (a "Person"), other than the person in
whose name the Certificate so surrendered is registered, it shall be
a condition of exchange that such Certificate shall be properly
endorsed or otherwise in proper form for transfer and that the Person
requesting such exchange shall pay any transfer or other taxes
required by reason of the exchange to a Person other than the
registered holder of such Certificate or establish to the
satisfaction of the Surviving Corporation that such tax has been paid
or is not applicable. Until surrendered as contemplated by this
Section 1.8, each Certificate shall be deemed at any time after the
Effective Time of the Merger to represent only the right to receive
upon such surrender the number of shares of EVI Common Stock, the
Cash Consideration Per Share and Contingent Cash Consideration Per
Share payable in respect of the Christiana Shares pursuant to
Section 1.7. The Exchange Agent shall not be entitled to vote or
exercise any rights of ownership with respect to the shares of EVI
Common Stock held by it from time to time hereunder, except that it
shall receive and hold all dividends or other distributions paid or
distributed with respect thereto for the account of Persons entitled
thereto. Any unexchanged shares of EVI Common Stock issuable
pursuant to the Merger in respect of the Christiana Shares shall be
issued in the name of the Exchange Agent pending the receipt by the
Exchange Agent of Certificates.
(f) Distributions with Respect to Unexchanged Christiana
Shares. No dividends or other distributions declared or made after
the Effective Time of the Merger with respect to the shares of EVI
Common Stock with a record date after the Effective Time of the
Merger shall be paid to the holder of any unsurrendered Certificate
with respect to the shares of EVI Common Stock represented thereby
and the Cash Consideration Per Share shall not be paid until the
holder of record of such Certificate shall surrender such
Certificate. Subject to the effect of applicable laws, following
surrender of any such Certificate, there shall be paid to the record
holder of the Certificates representing the shares of EVI Common
Stock issued in exchange therefor, without interest, (i) the amount
of dividends or other distributions with a record date after the
Effective Time of the Merger theretofore paid with respect to such
whole shares of EVI Common Stock, as the case may be, (ii) at the
appropriate payment date, the amount of dividends or other
distributions with a record date after the Effective Time of the
Merger but prior to surrender and a payment date subsequent to
surrender payable with respect to such whole shares of EVI Common
Stock and (iii) the Cash Consideration Per Share and Contingent Cash
Consideration Per Share at the appropriate payment date as provided
in this Section 1.8.
(g) No Further Ownership Rights in Christiana Shares. All
shares of EVI Common Stock issued upon the surrender of Certificates
in accordance with the terms of this Article I, together with any
dividends payable thereon to the extent contemplated by this
Section 1.8 and the rights to receive the Cash Consideration Per
Share and the Contingent Cash Consideration Per Share as provided
herein, shall be deemed to have been exchanged and paid in full
satisfaction of all rights pertaining to the Christiana Shares
theretofore represented by such Certificates and there shall be no
further registration of transfers on the stock transfer books of the
Surviving Corporation of the Christiana Shares that were outstanding
immediately prior to the Effective Time of the Merger. If, after the
Effective Time of the Merger, Certificates are presented to the
Surviving Corporation for any reason, they shall be canceled and
exchanged as provided in this Article I.
(h) Escheat. None of EVI, Sub, Christiana, the Surviving
Corporation or their transfer agents shall be liable to a holder of
the Christiana Shares for any amount properly paid to a public
official pursuant to applicable property, escheat or similar laws.
1.9 Taking of Necessary Action; Further Action. The parties hereto
shall take all such reasonable and lawful action as may be necessary or
appropriate in order to effectuate the Merger and the Logistic Sale as
promptly as possible. If, at any time after the Effective Time, any such
further action is necessary or desirable to carry out the purposes of this
Agreement or the Logistic Sale, and to vest the Surviving Corporation with
full right, title and possession to all assets, property, rights,
privileges, powers and franchises of Christiana or Sub as of the Effective
Time, such corporations shall direct their respective officers and
directors to take all such lawful and necessary action.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of EVI and Sub. EVI and Sub
hereby jointly and severally represent and warrant to Christiana that:
(a) Organization and Compliance with Law. EVI and Sub are
corporations duly incorporated, validly existing and in good standing
under the laws of the states of Delaware and Wisconsin, respectively.
Each of EVI and Sub has all requisite corporate power and corporate
authority to own, lease and operate all of its properties and assets
and to carry on its business as now being conducted, except where the
failure to be so organized, existing or in good standing would not
have a material adverse effect on the financial condition of EVI and
its subsidiaries (the "EVI Subsidiaries"), taken as a whole (an "EVI
MAE"). Each of EVI and Sub is duly qualified to do business, and is
in good standing, in each jurisdiction in which the property owned,
leased or operated by it or the nature of the business conducted by
it makes such qualification necessary, except in such jurisdictions
where the failure to be duly qualified would not have an EVI MAE.
Each of EVI and Sub is in compliance with all applicable laws,
judgments, orders, rules and regulations, except where such failure
would not have an EVI MAE. EVI has heretofore delivered to
Christiana true and complete copies of EVI's Restated Certificate of
Incorporation, as amended (the "EVI Certificate"), and Sub's
Certificate of Incorporation and their respective bylaws as in
existence on the date hereof.
(b) Capitalization.
(i) The authorized capital stock of EVI consists of
80,000,000 shares of EVI Common Stock, $1.00 par value, and
3,000,000 shares of preferred stock, $1.00 par value ("EVI
Preferred Stock"). As of December 10, 1997, there were
47,103,494 shares of EVI Common Stock issued and outstanding.
As of December 10, 1997, (i) 5,031,250 shares of EVI Common
Stock were reserved for issuance pursuant to the conversion
provisions of EVI's 5% Convertible Subordinated Preferred
Equivalent Debentures due 2027, (ii) 800,000 shares of EVI
Common Stock were reserved for issuance pursuant to pending or
proposed acquisitions and (iii) 2,506,400 shares of EVI Common
Stock were reserved for issuance pursuant to EVI's employee and
director benefit plans and arrangements, of which 1,376,400
shares of EVI Common Stock were reserved for issuance upon
exercise of outstanding options. At December 10, 1997, there
were no shares of EVI Preferred Stock issued or outstanding. No
holder of EVI Common Stock is entitled to preemptive rights
under Delaware law or EVI's Certificate of Incorporation.
(ii) As of the date hereof, the authorized capital stock of
Sub consists of 1,000 shares of common stock, $1.00 par value,
all of which are validly issued, fully paid and nonassessable
and are owned by EVI.
(iii) Each share of EVI Common Stock to be issued
hereunder as a result of the Merger will be fully paid and non-
assessable upon issuance.
(c) Authorization and Validity of Agreement. The execution and
delivery by EVI and Sub of this Agreement and the consummation by
each of them of the transactions contemplated hereby have been duly
authorized by all necessary corporate action (subject only, with
respect to the Merger, to approval of this Agreement by each of their
stockholders as provided for in Section 5.3). On or prior to the
date hereof, the Board of Directors of EVI or duly authorized
committee thereof has determined to recommend approval of the Merger
to the stockholders of EVI, and such determination is in effect on
the date hereof. This Agreement has been duly executed and delivered
by EVI and Sub and is the valid and binding obligation of EVI and
Sub, enforceable against EVI and Sub in accordance with its terms.
(d) No Approvals or Notices Required; No Conflict . Neither
the execution and delivery of this Agreement nor the performance by
EVI or Sub of its obligations hereunder, nor the consummation of the
transactions contemplated hereby by EVI and Sub, will (i) conflict
with the EVI Certificate or the bylaws of EVI or Sub; (ii) assuming
satisfaction of the requirements set forth in clause (iii) below,
violate any provision of law applicable to EVI or any of the EVI
Subsidiaries; (iii) except for (A) requirements of Federal or state
securities laws, (B) requirements arising out of the Xxxx-Xxxxx-
Xxxxxx Antitrust Improvements Act of 0000 (xxx "XXX Xxx"), (X)
requirements of notice filings in such foreign jurisdictions as may
be applicable, and (D) the filing of a Certificate of Merger by Sub
in accordance with the WGCL, require any consent or approval of, or
filing with or notice to, any public body or authority, domestic or
foreign, under any provision of law applicable to EVI or any of the
EVI Subsidiaries; or (iv) require any consent, approval or notice
under, or violate, breach, be in conflict with or constitute a
default (or an event that, with notice or lapse of time or both,
would constitute a default) under, or permit the termination of any
provision of, or result in the creation or imposition of any lien,
mortgage, pledge, security interest, restriction on transfer, option,
charge, right of any third Person or any other encumbrance of any
nature (a "Lien") upon any properties, assets or business of EVI or
any of the EVI Subsidiaries under, any note, bond, indenture,
mortgage, deed of trust, lease, franchise, permit, authorization,
license, contract, instrument or other agreement or commitment or any
order, judgment or decree to which EVI or any of the EVI Subsidiaries
is a party or by which EVI or any of the EVI Subsidiaries or any of
its or their assets or properties is bound or encumbered, except (A)
those that have already been given, obtained or filed and (B) those
that, in the aggregate, would not have an EVI MAE.
(e) Commission Filings; Financial Statements. EVI has filed
all reports and documents required to filed with the Securities and
Exchange Commission (the "Commission") since December 31, 1994. All
reports, registration statements and other filings (including all
notes, exhibits and schedules thereto and documents incorporated by
reference therein) filed by EVI with the Commission since
December 31, 1994, through the date of this Agreement, together with
any amendments thereto, are sometimes collectively referred to as the
"EVI Commission Filings". EVI has heretofore delivered to, or made
accessible to, Christiana copies of the EVI Commission Filings. As
of the respective dates of their filing with the Commission, the EVI
Commission Filings complied in all material respects with the
applicable requirements of the Securities Act of 1934 (the
"Securities Act"), the Securities Exchange Act of 1934 (the "Exchange
Act") and the rules and regulations of the Commission thereunder, and
did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances under
which they were made, not misleading.
(f) Absence of Certain Charges and Events. Since December 31,
1996, except as contemplated by this Agreement or as disclosed in the
EVI Commission Filings filed with the Commission prior to the date
hereof, there has been no EVI MAE.
(g) Tax Matters.
(i) Except as set forth in Section 2.1(g) of the
disclosure letter delivered by EVI to Christiana on the date
hereof (the "EVI Disclosure Letter"), all returns and reports,
including, without limitation, information and withholding
returns and reports ("Tax Returns"), of or relating to any
foreign, federal, state or local tax, assessment or other
governmental charge ("Taxes" or a "Tax") that are required to be
filed on or before the Closing Date by or with respect to EVI or
any of the EVI Subsidiaries, or any other corporation that is or
was a member of an affiliated group (within the meaning of
Section 1504(a) of the Code) of corporations of which EVI was a
member for any period ending on or prior to the Closing Date,
have been or will be duly and timely filed, and all Taxes,
including interest and penalties, due and payable pursuant to
such Tax Returns have been paid or, except as set forth in
Section 2.1(g) of the EVI Disclosure Letter, adequately provided
for in reserves established by EVI, except where the failure to
file, pay or provide for would not have a EVI MAE.
(ii) EVI has no present plan or intention after the Merger
to (A) liquidate the Surviving Corporation, (B) merge the
Surviving Corporation with or into another corporation, (C) sell
or otherwise dispose of the stock of the Surviving Corporation,
(D) cause or permit the Surviving Corporation to sell or
otherwise dispose of any of the assets of Christiana or the
assets of Sub vested in the Surviving Corporation except for
dispositions made in the ordinary course of business or
transfers of assets to a corporation controlled by the Surviving
Corporation within the meaning of Section 368(a)(2)(C) of the
Code, or (E) reacquire any of the stock issued to the Christiana
stockholders pursuant to the Merger.
(iii) EVI is not an investment company as defined in
Section 368(a)(2)(F)(iii) and (iv) of the Code or as defined in
the Investment Company Act of 1940 and the rules and regulations
promulgated thereunder.
(h) Voting Requirements. The affirmative vote of the holders
of a majority of the shares of EVI Common Stock present at the
special stockholders' meeting and entitled to vote is the only vote
of the holders and any class or series of the capital stock of EVI
necessary to approve this Agreement and the Merger.
(i) Brokers. Except for fees and expenses payable by EVI to
Xxxxxx Xxxxxxx & Co. Incorporated, no broker, investment banker, or
other Person acting on behalf of EVI is or will be entitled to any
broker's, finder's or other similar fee or commission in connection
with the transactions contemplated by this Agreement.
(j) Information Supplied. None of the information supplied or
to be supplied by EVI for inclusion or incorporation by reference in
(i) the Registration Statement (as defined in Section 5.1) will, at
the time the Registration Statement is filed with the Commission, and
at any time it is amended or supplemented or at the time it becomes
effective under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading, and (ii) the Proxy Statement will, at the date the Proxy
Statement is first mailed to EVI's stockholders and at the time of
the EVI Stockholders Meeting, contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they are made, not
misleading. The Proxy Statement will comply as to form in all
material respects with the requirements of the Exchange Act and the
rules and regulations thereunder. For purposes of this Agreement,
the parties agree that the statements made and information in the
Registration Statement and the Proxy Statement relating to the
Federal income tax consequences of the transactions contemplated
hereby shall be deemed to be supplied by Christiana and not by EVI or
Sub.
2.2 Representations and Warranties of Christiana and C2. Each of
Christiana and C2 hereby, jointly and severally, represents and warrants
to EVI that:
(a) Organization. Each of Christiana and C2 is a corporation
duly organized, validly existing and in good standing under the laws
of the state of Wisconsin. Logistic is a limited liability company
duly organized, validly existing and in good standing under the laws
of the state of Delaware. Each of Christiana, C2 and Logistic has
all requisite corporate (or equivalent) power and corporate (or
equivalent) authority and all necessary governmental authorizations
to own, lease and operate all of its properties and assets and to
carry on its business as now being conducted, except where the
failure to be so organized, existing or in good standing or to have
such governmental authority would not (i) have a material adverse
effect on the financial condition of Christiana or Logistic after
giving effect to the Logistic Sale or (ii) prevent or adversely
affect the ability of Christiana and C2 to perform and comply with
their respective obligations under this Agreement, the Logistic
Purchase Agreement or any other agreement to be executed and
delivered in connection with the transactions contemplated hereby or
thereby (a "Xxxxxxxxxx XXX"). Except as set forth in Section 2.2(a)
of the disclosure letter delivered by Christiana to EVI on the date
hereof (the "Christiana Disclosure Letter"), each of Christiana,
Logistic and C2 is duly qualified as a foreign corporation or limited
liability company to do business, and is in good standing, in each
jurisdiction in which the property owned, leased or operated by it or
the nature of the business conducted by it makes such qualification
necessary, except in such jurisdictions where the failure to be duly
qualified does not and would not have a Xxxxxxxxxx XXX. Each of
Christiana, Logistic and C2 is in compliance with all applicable
laws, judgments, orders, rules and regulations, domestic and foreign,
except where failure to be in such compliance would not have a
Xxxxxxxxxx XXX. Xxxxxxxxxx has heretofore delivered to EVI true and
complete copies of (i) Christiana's Certificate of Incorporation (the
"Christiana Certificate") and bylaws, (ii) Logistic's Certificate of
Organization and operating agreement and (iii) C2's Articles of
Incorporation and operating agreement, in each case as in existence
on the date hereof.
(b) Capitalization.
(i) The authorized capital stock of Christiana consists of
12,000,000 shares of Christiana Common Stock, $1.00 par value,
and 1,000,000 shares of preferred stock, $10.00 par value
("Christiana Preferred Stock"). As of December 12, 1997, there
were 5,136,630 shares of Christiana Common Stock issued and
outstanding and no shares of Christiana Common Stock were held
as treasury shares. There are no outstanding shares of
Christiana Preferred Stock. A total of 500,000 shares of
Christiana Common Stock have been reserved for issuance pursuant
to the stock option plan described in Section 2.2(b)(iii). All
issued and outstanding shares of Christiana Common Stock are
validly issued, fully paid and nonassessable (except as set
forth in Wis Stats Section 180.0622) and no holder thereof is
entitled to preemptive rights. Christiana is not a party to,
and is not aware of, any voting agreement, voting trust or
similar agreement or arrangement relating to any class or series
of its capital stock, or any agreement or arrangement providing
for registration rights with respect to any capital stock or
other securities of Christiana.
(ii) Christiana owns 100% of the membership interests in
Logistic. All issued and outstanding membership interests of
Logistic are validly issued, fully paid and nonassessable and no
holder thereof is entitled to preemptive rights. Logistic is
not a party to, any voting agreement, voting trust or similar
agreement or arrangement relating to its membership interests,
or any agreement or arrangement providing for registration
rights with respect to any membership interests or other
interests of Logistic.
(iii) As of the date hereof, there are outstanding
options (the "Christiana Options") to purchase an aggregate of
267,083 shares of Christiana Common Stock under the 1995 Stock
Option Plan (the "Christiana Option Plan"). All Christiana
Options shall be terminated or exercised prior to the Effective
Time. As of the Effective Time, there will be no options
outstanding under the Christiana Option Plan. There are not now
(other than as set forth in this Section 2.2(b)), and at the
Effective Time there will not be, any (A) shares of capital
stock or other equity securities of Christiana outstanding other
than Christiana Common Stock issued pursuant to the exercise of
Christiana Options or (B) outstanding options, warrants, scrip,
rights to subscribe for, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into
or exchangeable for, shares of any class of capital stock of
Christiana, or contracts, understandings or arrangements to
which Christiana is a party, or by which it is or may be bound,
to issue additional shares of its capital stock or options,
warrants, scrip or rights to subscribe for, or securities or
rights convertible into or exchangeable for, any additional
shares of its capital stock.
(iv) Section 2.2(b)(iv) of the Christiana Disclosure Letter
sets forth a list of all corporations, partnerships, limited
liability companies and other entities of which Christiana owns
directly or indirectly, an equity interest (such entities,
excluding EVI and its subsidiaries, referred to herein as the
"Christiana Subsidiaries").
(c) Authorization and Validity of Agreement. Each of
Christiana and C2 has all requisite corporate power and authority to
enter into this Agreement, the Logistic Purchase Agreement and the
other agreements and instruments contemplated to be executed and
delivered in connection with the Merger and the Logistic Sale (the
Logistic Purchase Agreement and such other agreements and instruments
contemplated to be executed and delivered in connection with the
Merger and the Logistic Sale being referred to as the "Other
Agreements") and to perform its obligations hereunder and thereunder.
The execution and delivery by Christiana and C2 of this Agreement and
the Other Agreements to which it is a party and the consummation by
it of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action (subject only, with
respect to the Merger and the Logistic Sale, to approval of this
Agreement and the Logistic Sale by the Christiana stockholders as
provided for in Section 5.3). On or prior to the date hereof the
Board of Directors of Christiana has determined to recommend approval
of the Merger and the Logistic Sale to the stockholders of
Christiana, and such determination is in effect as of the date
hereof. This Agreement has been duly executed and delivered by
Christiana and C2 and is the valid and binding obligation of
Christiana and C2 enforceable against it in accordance with its
terms. The Other Agreements, when executed and delivered by
Christiana and C2, as applicable, will constitute valid and binding
obligations of Christiana and C2, enforceable against them in
accordance with their respective terms.
(d) No Approvals or Notices Required; No Conflict with
Instruments to which Christiana is a Party. The execution and
delivery of this Agreement and the Other Agreements do not, and the
consummation of the transactions contemplated hereby and thereby and
compliance with the provisions hereof and thereof will not, conflict
with, or result in any violation of, or default (with or without
notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of or "put" right with
respect to any obligation or to loss of a material benefit under, or
result in the creation of any Lien upon any of the properties or
assets of Christiana, Logistic, C2 or any of their subsidiaries
under, any provision of (i) the Christiana Certificate or bylaws of
Christiana, the Certificate of Organization or operating agreement of
Logistic or the Articles of Incorporation or bylaws of C2, or any
provision of the comparable organizational documents of its
subsidiaries, (ii) except as set forth in Section 2.2(d) of the
Christiana Disclosure Letter, any loan or credit agreement, note,
bond, mortgage, indenture, lease, guaranty or other financial
assurance agreement or other agreement, instrument, permit,
concession, franchise or license applicable to Christiana or its
properties or assets, (iii) except as set forth in Section 2.2(d) of
the Christiana Disclosure Letter, any loan or credit agreement, note,
bond, mortgage, indenture, lease, guaranty or other financial
assurance agreement or other agreement, instrument, permit,
concession, franchise or license applicable to Logistic or any other
Christiana Subsidiary, or their respective properties or assets and
(iv) subject to governmental filing and other matters referred to in
the following sentence, any judgment, order, decree, statute, law,
ordinance, rule or regulation or arbitration award applicable to
Christiana, Logistic or C2 or any of their subsidiaries or their
respective properties or assets, other than, in the case of
clauses (ii) and (iii), any such conflicts, violations, defaults,
rights or Liens that individually or in the aggregate would not have
a Xxxxxxxxxx XXX. No consent, approval, order or authorization of,
or registration, declaration or filing with, any court,
administrative agency or commission or other governmental authority
or agency, domestic or foreign, including local authorities (a
"Governmental Entity"), is required by or with respect to Christiana,
Logistic or C2 or any of their subsidiaries in connection with the
execution and delivery of this Agreement by Christiana and C2 or the
consummation by Christiana of the transactions contemplated hereby,
except for (i) the filing of a pre-merger notification and report
form by Christiana under the HSR Act, (ii) the filing with the
Commission of (A) a proxy or information statement relating to
Stockholder Approval (such proxy or information statement as amended
or supplemented from time to time, the "Proxy Statement"), and
(B) such reports under Section 13(a) of the Exchange Act as may be
required in connection with this Agreement and the transactions
contemplated hereby, (iii) the filing of the Certificate of Merger
with the Wisconsin Secretary of State with respect to the Merger as
provided in the WGCL and appropriate documents with the relevant
authorities of other states in which Christiana is qualified to do
business and (iv) such other consents, approvals, orders,
authorizations, registrations, declarations, filings and notices as
are set forth in Section 2.2(d) of the Christiana Disclosure Letter.
(e) Commission Filings; Financial Statements. Christiana has
filed all reports, registration statements and other filings,
together with any amendments required to be made with respect
thereto, that it has been required to file with the Commission. All
reports, registration statements and other filings (including all
notes, exhibits and schedules thereto and documents incorporated by
reference therein) filed by Christiana with the Commission since
December 31, 1994, through the date of this Agreement, together with
any amendments thereto, are sometimes collectively referred to as the
"Christiana Commission Filings." Christiana has heretofore delivered
to EVI copies of the Christiana Commission Filings. As of the
respective dates of their filing with the Commission, the Christiana
Commission Filings complied in all material respects with the
Securities Act, the Exchange Act and the rules and regulations of the
Commission thereunder, and did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements made therein, in light of
the circumstances under which they were made, not misleading. To the
best knowledge of Christiana, all material contracts of Christiana
and its subsidiaries have been included in the Christiana's filings
with the Commission since the initial registration of its stock under
the Exchange Act, except for those contracts not required to be filed
pursuant to the rules and regulations of the Commission.
Each of the consolidated financial statements (including any
related notes or schedules) included in the Christiana Commission
Filings was prepared in accordance with generally accepted accounting
principles applied on a consistent basis (except as may be noted
therein or in the notes or schedules thereto) and complied with the
rules and regulations of the Commission. Such consolidated financial
statements fairly present the consolidated financial position of
Christiana as of the dates thereof and the results of operations,
cash flows and changes in stockholders' equity for the periods then
ended (subject, in the case of the unaudited interim financial
statements, to normal year-end audit adjustments on a basis
comparable with past periods). As of the date hereof, Christiana has
no liabilities, absolute or contingent, that may reasonably be
expected to have a Xxxxxxxxxx XXX, that are not reflected in the
Christiana Commission Filings, except (i) those incurred in the
ordinary course of business consistent with past operations and not
relating to the borrowing of money and (ii) those set forth in
Section 2.2(e) of the Christiana Disclosure Letter.
(f) Conduct of Business in the Ordinary Course; Absence of
Certain Changes and Events. Since December 31, 1995, except as
contemplated by this Agreement, the Logistic Purchase Agreement or as
disclosed in the Christiana Commission Filings or set forth in
Section 2.2(f) of the Christiana Disclosure Letter, Christiana and
its subsidiaries have conducted their respective businesses only in
the ordinary and usual course in accordance with past practice, and
there has not been: (i) a Xxxxxxxxxx XXX or any other material
adverse change in the financial condition, results of operations,
assets or business of Christiana, taken as a whole; (ii) to the
knowledge of Christiana, any other condition, event or development
that reasonably may be expected to result in any such material
adverse change or a Xxxxxxxxxx XXX; (iii) any change by Christiana or
Logistic in its accounting methods, principles or practices; (iv) any
revaluation by Christiana or Logistic of any of its assets,
including, without limitation, writing down the value of inventory or
writing off notes or accounts receivable other than in the ordinary
course of business and consistent with past practice; (v) any entry
by Christiana or Logistic into any commitment or transaction that
would be material to Christiana or Logistic; (vi) any declaration,
setting aside or payment of any dividends or distributions in respect
of the Christiana Common Stock or any redemption, purchase or other
acquisition of any of its securities; (vii) any damage, destruction
or loss (whether or not covered by insurance) adversely affecting the
properties or business of Christiana or Logistic; (viii) any increase
in indebtedness of borrowed money other than borrowing under existing
credit facilities as disclosed in Section 2.2(f) of the Christiana
Disclosure Letter; (ix) any granting of a security interest or Lien
on any property or assets of Christiana or Logistic, other than
(A) Liens for taxes not due and payable and (B) inchoate mechanics',
warehousemen's and other statutory Liens incurred in the ordinary
course of business (collectively, "Permitted Liens"); or (x) any
increase in or establishment of any bonus, insurance, severance,
deferred compensation, pension, retirement, profit sharing, stock
option (including, without limitation, the granting of stock options,
stock appreciation rights, performance awards or restricted stock
awards), stock purchase or other employee benefit plan or any other
increase in the compensation payable or to become payable to any
directors, officers or key employees of Christiana or Logistic or
which Christiana or Logistic would be responsible.
(g) Litigation. Except as disclosed in the Christiana
Commission Filings or as set forth in Section 2.2(g) of the
Christiana Disclosure Letter, there are no claims, actions, suits,
investigations, inquiries or proceedings, ("Demands"), pending or, to
the knowledge of Christiana, threatened against or affecting
(i) Christiana or Logistic or any of their respective properties at
law or in equity, or any of their employee benefit plans or
fiduciaries of such plans, or (ii) C2 or any Christiana or C2
subsidiaries or any of their respective properties at law or in
equity, or any of their respective employee benefit plans or
fiduciaries of such plans, before or by any federal, state, municipal
or other governmental agency or authority, or before any arbitration
board or panel (each a "Governmental Entity"), wherever located
(i) that exist today or (ii) that would otherwise, if adversely
determined, have a Xxxxxxxxxx XXX. None of Christiana, Logistic or
C2 is subject to any judicial, governmental or administrative order,
writ, judgment, injunction or decree.
(h) Employee Benefit Plans.
(i) Section 2.2(h) of the Christiana Disclosure Letter
provides a description of each of the following which is
sponsored, maintained or contributed to by Christiana or any
corporation, trade, business or entity under common control with
Christiana within the meaning of Section 414(b),(c),(m) or (o)
of the Code or Section 4001 of ERISA (a "Christiana ERISA
Affiliate") for the benefit of its employees, or has been so
sponsored, maintained or contributed to within three years prior
to the Closing Date.
(A) each "employee benefit plan," as such term is
defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), ("Plan"); and
(B) each stock option plan, collective bargaining
agreement, bonus plan or arrangement, incentive award plan
or arrangement, vacation policy, severance pay plan, policy
or agreement, deferred compensation agreement or
arrangement, executive compensation or supplemental income
arrangement, consulting agreement, employment agreement and
each other employee benefit plan, agreement, arrangement,
program, practice or understanding that is not described in
Section 2.2(h)(i)(A) to which Christiana or Logistic is a
party or has any obligation ("Benefit Program or
Agreement").
True and complete copies of each of the Plans, Benefit Programs
or Agreements, related trusts, if applicable, and all amendments
thereto, together with (i) the Forms 5500, 990 and 1041, as
applicable, for the three most recent fiscal years, (ii) all
current summary plan descriptions for each such Plan, (iii) the
most recent Internal Revenue Service determination letters for
each such Plan, as applicable, and all correspondence with the
Internal Revenue Service and the Department of Labor relating to
such Plans, Benefit Programs and Agreements have been furnished
to EVI.
(ii) Except as otherwise set forth in Section 2.2(h) of the
Christiana Disclosure Letter,
(A) None of Christiana or any Christiana ERISA
Affiliate contributes to or has an obligation to contribute
to, or has at any time contributed to or had an obligation
to contribute to, a plan subject to Title IV of ERISA,
including, without limitation, a multi employer plan within
the meaning of Section 3(37) of ERISA, nor have such
companies engaged in any transaction described in Sections
406 and 407 of ERISA (unless exempt under Section 408) or
Section 4975 of the Code (unless exempt);
(B) Each Plan and each Benefit Program or Agreement
has been administered, maintained and operated in all
material respects in accordance with the terms thereof and
in compliance with its governing documents and applicable
law (including, where applicable, ERISA and the Code and
timely filing of Form 5500's for each year);
(C) There is no matter pending with respect to any of
the Plans before any governmental agency, and there are no
actions, suits or claims pending (other than routine claims
for benefits) or, to the knowledge of Christiana or C2,
threatened against, or with respect to, any of the Plans or
Benefit Programs or Agreements or its assets;
(D) No act, omission or transaction has occurred
which would result in imposition on Christiana or any
Christiana ERISA Affiliate of breach of fiduciary duty
liability damages under Section 409 of ERISA, a civil
penalty assessed pursuant to subsections (c), (i) or (l) of
Section 502 of ERISA or a tax imposed pursuant to Chapter
43 of Subtitle D of the Code; and
(E) Except as provided in Section 5.7, the execution
and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not require
Christiana or any Christiana ERISA Affiliate to make a
larger contribution to, or pay greater benefits under, any
Plan, Benefit Program or Agreement than it otherwise would
or create or give rise to any additional vested rights or
service credits under any Plan or Benefit Program or
Agreement or cause the companies to make accelerated
payments.
(iii) Except as set forth in Section 2.2(h) of the
Christiana Disclosure Letter, termination of employment of any
employee of Christiana immediately after consummation of the
transactions contemplated by this Agreement would not result in
payments under the Plans, Benefit Programs or Agreements which,
in the aggregate, would result in imposition of the sanctions
imposed under Sections 280G and 4999 of the Code.
(iv) Each Plan may be unilaterally amended or terminated in
its entirety without liability except as to benefits accrued
thereunder prior to such amendment or termination.
(v) Except as set forth in Section 2.2(h) of the
Christiana Disclosure Letter, none of the employees of
Christiana or Logistic are subject to union or collective
bargaining agreements.
(vi) None of Christiana or any of the Christiana ERISA
Affiliates has agreed or is obligated to provide retiree medical
coverage and each of such companies has fully complied with all
obligations under COBRA applicable to it.
(i) Taxes.
(i) Except as set forth in Section 2.2(i) of the
Christiana Disclosure Letter, all Tax Returns of or relating to
any Tax that are required to be filed on or before the Closing
Date by or with respect to Christiana or any Christiana
Subsidiary, or any other corporation that is or was a member of
an affiliated group (within the meaning of Section 1504(a) of
the Code) of corporations of which Christiana was a member for
any period ending on or prior to the Closing Date, have been or
will be duly and timely filed, and all Taxes, including interest
and penalties, due and payable pursuant to such Tax Returns have
been or will be duly and timely paid or adequately provided for
in reserves established by Christiana or any such Christiana
Subsidiary, except where the failure to file, pay or provide for
would not have a material adverse effect on the financial
condition, results of operations, or business of Christiana or
otherwise result in a Xxxxxxxxxx XXX. All income Tax returns of
or with respect to Christiana or any Christiana Subsidiary have
been audited by the applicable Governmental Authority, or the
applicable statute of limitations has expired, for all periods
up to and including the tax year ended June 30, 1993. There is
no material claim against Christiana or any Christiana
Subsidiary with respect to any Taxes, and no material
assessment, deficiency or adjustment has been asserted or
proposed with respect to any Tax Return of or with respect to
Christiana or any Christiana Subsidiary that has not been
adequately provided for in reserves established by Christiana or
such Christiana Subsidiary. The total amounts set up as
liabilities for current and deferred Taxes in the consolidated
financial statements included in the Christiana Commission
Filings have been prepared in accordance with generally accepted
accounting principles and are sufficient to cover the payment of
all material Taxes, including any penalties or interest thereon
and whether or not assessed or disputed, that are, or are
hereafter found to be, or to have been, due with respect to the
operations of Christiana or any Christiana Subsidiary through
the periods covered thereby. Christiana has (and as of the
Closing Date will have) made estimated tax payments for taxable
years for which the United States consolidated federal income
Tax return is not yet due required with respect to Taxes.
Except as set forth in Section 2.2(i) of the Christiana
Disclosure Letter, no waiver or extension of any statute of
limitations as to any federal, state, local or foreign Tax
matter has been given by or requested from Christiana or any
Christiana Subsidiary. Except for statutory Liens for current
Taxes not yet due, no Liens for Taxes exist upon the assets of
Christiana. Except as set forth in paragraph 2.2(i) of the
Christiana Disclosure Letter, none of Christiana or any
Christiana Subsidiary has filed consolidated income Tax Returns
with any corporation, other than consolidated federal, state or
foreign income Tax returns by Christiana for any taxable period
which is not now closed by the applicable statute of
limitations. Except as set forth in Section 2.2(i) of the
Christiana Disclosure Letter, none of Christiana or any
Christiana Subsidiary has any deferred intercompany gain as
defined in Treasury Regulations Section 1.1502-13.
(ii) As of the Closing Date, to Christiana's knowledge,
there is no plan or intention by the stockholders of Christiana
to sell, exchange or otherwise dispose of a number of shares of
EVI received in the Merger that would reduce the Christiana
stockholders' ownership of EVI shares to a number of shares
having a value, as of the date of the Merger, of less than 50%
of the value of all of the formerly outstanding Christiana
Shares as of the same date. The shares of EVI Common Stock held
by the Christiana stockholders and otherwise sold, redeemed or
disposed of prior or subsequent to the Merger will be considered
in making this representation.
(iii) Christiana is not under the jurisdiction of a
court in a Title 11 or similar case with the meaning of Section
368(a)(3)(A) of the Code.
(iv) There is no intercorporate indebtedness existing
between Christiana and EVI that was issued, acquired or will be
settled at a discount.
(v) As of the Closing Date, Christiana shall have fully
accrued for all Taxes that may be required to be paid as a
result of the Logistic Sale and the other transactions
contemplated hereby. The value of the interest in Logistic
Common Stock to be sold pursuant to the Logistic Sale has been
determined pursuant to an outside appraisal and reflects an
amount equal to or greater than the fair value and fair market
value of such shares.
(j) Environmental Matters. Except as set forth in
Section 2.2(j) of the Christiana Disclosure Letter, (i) the
properties, operations and activities of Christiana and each of its
Subsidiaries complies in all material respects with all applicable
Environmental Laws; (ii) none of Christiana or any of its Christiana
Subsidiaries is subject to any existing, pending or, to the knowledge
of Christiana, threatened action, suit, investigation, inquiry or
proceeding by or before any governmental authority under any
Environmental Law; (iii) except where the failure would have a
Xxxxxxxxxx XXX, all notices, permits, licenses, or similar
authorizations, if any, required to be obtained or filed by
Christiana under any Environmental Law in connection with any aspect
of the business of Christiana, Logistic or any Christiana Subsidiary,
including without limitation those relating to the treatment,
storage, disposal or release of a hazardous substance or solid waste,
have been duly obtained or filed and will remain valid and in effect
after the Merger and the Logistic Sale, and each of Christiana,
Logistic and each other Christiana Subsidiary is in compliance with
the terms and conditions of all such notices, permits, licenses and
similar authorizations; (iv) Christiana and each of its Subsidiaries
has satisfied and are currently in compliance with all financial
responsibility requirements applicable to their operations and
imposed by any governmental authority under any other Environmental
Law, and none of such parties has received any notice of
noncompliance with any such requirements; (v) to Christiana's
knowledge, there are no physical or environmental conditions existing
on any property currently owned or previously owned by Christiana or
any entity in which it has or had ownership interest that could
reasonably be expected to give rise to any on-site or off-site
remedial obligations under any Environmental Laws; and (vi) to
Christiana's knowledge, since the effective date of the relevant
requirements of applicable Environmental Laws, all hazardous
substances or solid wastes generated by Christiana or used in
connection with their properties or operations have been transported
only by carriers authorized under Environmental Laws to transport
such substances and wastes, and disposed of only at treatment,
storage, and disposal facilities authorized under environmental laws
to treat, store or dispose of such substances and wastes, and, to the
knowledge of Christiana, such carriers and facilities have been and
are operating in compliance with such authorizations and are not the
subject of any existing, pending, or overtly threatened action,
investigation, or inquiry by any governmental authority in connection
with any Environmental Laws.
For purposes of this Agreement, the term "Environmental Laws"
shall mean any and all laws, statutes, ordinances, rules,
regulations, orders or determinations of any Governmental Authority
pertaining to health or the environment currently in effect in any
and all jurisdictions in which the party in question and its
subsidiaries own property or conduct business, including without
limitation, the Clean Air Act, as amended, the Comprehensive
Environmental, Response, Compensation, and Liability Act of 1980
("CERCLA"), as amended, the Federal Water Pollution Control Act, as
amended, the Occupational Safety and Health Act of 1970, as amended,
the Resource Conservation and Recovery Act of 1976 ("RCRA"), as
amended, the Safe Drinking Water Act, as amended, the Toxic
Substances Control Act, as amended, the Hazardous & Solid Waste
Amendments Act of 1984, as amended, the Superfund Amendments and
Reauthorization Act of 1986, as amended, the Hazardous Materials
Transportation Act, as amended, the Oil Pollution Act of 1990
("OPA"), any state laws pertaining to the handling of oil and gas
exploration and production wastes or the use, maintenance, and
closure of pits and impoundments, and all other environmental
conservation or protection laws. For purposes of this Agreement, the
terms "hazardous substance" and "release" have the meanings specified
in RCRA; provided, however, that to the extent the laws of the state
in which the property is located establish a meaning for "hazardous
substance," "release," "solid waste" or "disposal" that is broader
than that specified in either CERCLA or RCRA, such broader meaning
shall apply. For purposes of this Agreement, the term "Governmental
Authority" includes the United States, any foreign jurisdiction, the
state, county, city, and political subdivisions in which the party in
question owns property or conducts business, and any agency,
department, commission, board, bureau or instrumentality of any of
them.
(k) Investment Company. Christiana is not an investment
company as defined in the Investment Company Act of 1940 and the
rules and regulations promulgated thereunder.
(l) Severance Payments. Except as set forth in Section 2.2(l)
of the Christiana Disclosure Letter, Christiana will not have any
liability or obligation to pay a severance payment or similar
obligation to any of their respective employees, officers, or
directors as a result of the Merger or the transactions contemplated
by this Agreement, nor will any of such Persons be entitled to an
increase in severance payments or other benefits as a result of the
Merger, the Logistic Sale or the transactions contemplated by this
Agreement or the Other Agreements in the event of the subsequent
termination of their employment.
(m) Voting Requirements. Subject to the provisions of
Section 5.3(a), the affirmative vote of the holders of a majority of
the outstanding shares of Christiana Common Stock is the only vote of
the holders of any class or series of the capital stock of Christiana
necessary to approve this Agreement, the Merger, the Logistic Sale
and the transactions contemplated hereby and by the Other Agreements
in order to comply with the WGCL, Christiana's Certificate of
Incorporation and Bylaws and the rules and regulations of the New
York Stock Exchange (the "NYSE").
(n) Brokers. Except for Prudential Securities Incorporated,
whose fees shall be paid by Christiana, no broker, investment banker,
or other Person acting on behalf of Christiana is or will be entitled
to any broker's, finder's or other similar fee or commission in
connection with the transactions contemplated by this Agreement.
(o) Assets and Liabilities at Closing. At the Effective Time:
(i) the assets of Christiana (the "Christiana Assets")
shall consist of (1) 3,897,462 shares of EVI Common Stock, which
shall be held free and clear of all Liens, (2) cash in the
amount of $20,000,000 received in connection with the TLC
Dividend as defined in Section 3.1(s), (3) the right to receive
$10,666,667 in connection with the Logistic Sale (4) $3,000,000
to be received in connection with the Wiscold Note, (5) the cash
received from the exercise of stock options, (6) all other cash
on hand, (7) a one-third interest in Logistic, and (8) all tax,
financial, accounting and other general corporate records,
including records relating to all past operations and
subsidiaries (including partnerships and joint ventures);
(ii) the liabilities of Christiana (the "Christiana
Liabilities") shall consist only of (1) transactional expenses
related to the Merger and the Logistic Sale, (2) all Taxes of
Christiana relating to periods through the Closing Date,
including Taxes (other than the EVI Related Taxes) from the
Logistic Sale and deferred intercompany Taxes and (3) all other
outstanding and accrued liabilities to which Christiana may be
subject, other than Assumed Liabilities (as defined in the
Logistic Purchase Agreement) and EVI Related Taxes;
(iii) all obligations and liabilities (fixed or
contingent, known or unknown) of Christiana shall have been
assumed by C2 and Logistic other than liabilities described in
clause (ii); and
(iv) except as set forth in Section 2.2(o) of the
Disclosure Schedule or agreed to in writing by EVI prior to the
Closing, Christiana shall have been released from all continuing
obligations (i) relating to Logistic or any other historical
business of Christiana or its subsidiaries and affiliates and
(ii) under any and all agreements relating to the borrowing of
funds, including any and all guarantees or similar arrangements
relating thereto.
(p) Compliance with Laws. Christiana, Logistic, C2 and each of
their respective subsidiaries hold all required, necessary or
applicable permits, licenses, variances, exemptions, orders,
franchises and approvals of all Governmental Entities, except where
the failure to so hold could not reasonably be expected to have a
Xxxxxxxxxx XXX (the "Xxxxxxxxxx Permits"). All applications with
respect to such permits, licenses, variances, exemptions, orders,
franchises and approvals were complete and correct in all material
respects when made and neither Christiana nor C2 know of any reason
why any of such permits, licenses, variances, exemptions, orders,
franchises and approvals would be subject to cancellation.
Christiana, Logistic, C2 and each of their respective subsidiaries
are in compliance with the terms of the Christiana Permits except
where the failure to so comply could not reasonably be expected to
have a Xxxxxxxxxx XXX. None of Christiana, Logistic, C2 or any of
their respective subsidiaries has violated or failed to comply with
any statute, law, ordinance, regulation, rule, permit or order of any
Federal, state or local government, domestic or foreign, or any
Governmental Entity, any arbitration award or any judgment, decree or
order of any court or other Governmental Entity, applicable to
Christiana, Logistic, C2 or any of their respective subsidiaries or
their respective business, assets or operations, except for
violations and failures to comply that would not have a Xxxxxxxxxx
XXX.
(q) Contracts.
(i) Section 2.2(q) to the Christiana Disclosure Letter
contains a complete list of the following contracts, agreements,
arrangements and commitments: (i) all employment or consulting
contracts or agreements to which Christiana or Logistic is
contractually obligated; (ii) current leases, sales contracts
and other agreements with respect to any property, real or
personal, of Christiana or Logistic or to which Christiana or
Logistic is contractually obligated; (iii) contracts or
commitments for capital expenditures or acquisitions in excess
of $30,000 to which Christiana or Logistic is obligated;
(iv) agreements, contracts, indentures or other instruments
relating to the borrowing of money, or the guarantee of any
obligation for the borrowing of money, to which Christiana or
Logistic or any of their subsidiaries is a party or any of their
respective properties is bound; (v) contracts or agreements or
amendments thereto that would be required to be filed as an
exhibit to an Annual Report on Form 10-K filed by Christiana as
of the date hereof that has not been filed as an exhibit to the
Christiana's Annual Report on Form 10-K for the year ended June
30, 1997, filed by it with the Commission or any report filed
with the Commission under the Exchange Act since such date; (vi)
all corporations, partnerships, limited liability companies and
other entities which Christiana has owed, directly or
indirectly, an equity interest since 1953, (vii) all material
indemnification and guaranty or other similar obligations to
which Christiana or Logistic is bound and which the officers of
Christiana, after reasonable investigation, are aware,
(viii) any outstanding bonds, letters of credit posted or
guaranteed by Christiana or Logistic with respect to any Person,
(ix) any covenants not to compete or other obligations affecting
Christiana or Logistic that would restrict the Surviving
Corporation or EVI and its affiliates from engaging in any
business or activity which the officers of Christiana or
Logistic are aware, after reasonable investigation and
(x) contracts, agreements, arrangements or commitments, other
than the foregoing that could reasonably be considered to be
material to Christiana or Logistic.
(ii) True and correct copies of all the instruments
described in Section 2.2(q) of the Christiana Disclosure Letter
have been furnished or made a available to EVI. Except as noted
in the Christiana Disclosure Letter, all such agreements,
arrangements or commitments are valid and subsisting and each of
Christiana, Logistic and their respective subsidiaries to the
extent each is a party, has duly performed its obligations
thereunder in all material respects to the extent such
obligations have accrued, and no breach or default thereunder by
Christiana, Logistic or their respective subsidiaries or, to the
knowledge of Christiana, any other party thereto has occurred
that could impair the ability of Christiana, Logistic or their
respective subsidiaries to enforce any material rights
thereunder. There are no material liabilities of any of the
parties to any of the contracts between Christiana, Logistic or
C2 or any of their respective subsidiaries and third parties
arising from any breach of or default in any provision thereof
or which would permit the acceleration of any obligation of any
party thereto or the creation of a Lien upon any asset of
Christiana, Logistic or any of their respective subsidiaries.
(r) Title to Property.
(i) At the Effective Time, Christiana will have good and
marketable title to, or valid leasehold interests in, all its
properties and assets. Christiana has good and valid title to
3,897,462 shares of EVI Common Stock, free and clear of all
Liens. Christiana has good and valid title to 1000 units of
Logistic, free and clear of all Liens, which units represents
all of the interest in Logistics.
(ii) Except as set forth in Section 2.2(r)(ii) of the
Christiana Disclosure Letter, each of Christiana and Logistic
has complied in all material respects with the terms of all
leases to which it is a party and under which it is in
occupancy, and all such leases are in full force and effect.
Each of Christiana and Logistic enjoys peaceful and undisturbed
possession under all such leases.
(s) Insurance Policies. Section 2.2(s) of the Christiana
Disclosure Letter contains a correct and complete description of all
insurance policies of Christiana covering Christiana, Logistic and
their respective subsidiaries, any employees or other agents of
Christiana, Logistic and their respective subsidiaries or any assets
of Christiana and its subsidiaries. Each such policy is in full
force and effect, is with responsible insurance carriers and is
substantially equivalent in coverage and amount to policies covering
companies of the size of Christiana and in the business in which
Christiana and its subsidiaries is engaged, in light of the risk to
which such companies and their employees, businesses, properties and
other assets may be exposed. All retroactive premium adjustments
under any worker's compensation policy of Christiana or any of its
Subsidiaries have been recorded in Christiana's financial statements
in accordance with generally accepted accounting principles and are
reflected in the financial statements contained in the Commission
Filings.
(t) Loans. Section 2.2(t) of the Christiana Disclosure Letter
sets forth all existing loans, advances or other extensions of credit
(excluding accounts receivable arising in the ordinary course of
business) by Christiana or its subsidiaries to any party other than
intercompany loans, advances, guaranties or extensions of credit.
All items listed in Section 2.2(t) of the Christiana Disclosure
Letter will be repaid in full or assumed by C2 prior to the Effective
Time of the Merger. All intercompany obligations and loans between
Christiana and its subsidiaries, including C2, will be extinguished
prior to the Logistic Sale without any ongoing liability to
Christiana or C2 with respect thereto, except as set forth herein or
in the Logistic Purchase Agreement.
(u) No Fraudulent Transfer. Christiana has not within the last
twelve months made any transfer or incurred any obligation with
actual intent to hinder, delay or defraud any entity to which it was
or may become indebted and it has not transferred any material
property without receiving reasonably equivalent value for any such
transfer obligation. Both immediately prior to and immediately after
the Logistic Sale and the Merger, (i) the fair value of
(x) Christiana's assets at the time of the Merger and (y) Logistic's
and C2's assets after the Logistic Sale and (z) the assets of CST
Financial, Inc. ("CST") Martinique Holdings, Inc. ("MHI") and
Christiana Community Builders, Inc. ("CCB") immediately prior to
their liquidation in each case at a fair valuation exceeds their
respective debts and liabilities, subordinated, contingent or
otherwise, (ii) the present fair saleable value of Christiana's,
Logistic's, C2's, CST's, MHI's and CCB's property is greater than the
amount that will be required to pay its probable liability on their
respective debts and other liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and mature,
(iii) Christiana prior to the Logistic Sale and Logistic, C2 after
the Logistic Sale and CST, MHI and CCB prior to their liquidation
each reasonably expect to be able to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities
become absolute and matured, and (iv) Christiana before the Logistic
Sale and Logistic and C2 after the Logistic Sale will not have
unreasonably small capital with which to conduct the business in
which it is engaged as such business is now conducted and is proposed
to be conducted. For all purposes of clauses of (i) through (iv),
the amount of contingent liabilities at any time shall be computed as
the amount that, in light of all the facts and circumstances existing
at such time, represents the amount that can reasonably be expected
to become an actual or matured liability.
(v) Information Supplied. None of the information supplied or
to be supplied by Christiana or C2 for inclusion or incorporation by
reference in (i) the Registration Statement (as defined in
Section 5.1) will, at the time the Registration Statement is filed
with the Commission, and at any time it is amended or supplemented or
at the time it becomes effective under the Securities Act, contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading, and (ii) the Proxy Statement will,
at the date the Proxy Statement is first mailed to Christiana's
stockholders and at the time of the Christiana Stockholders Meeting,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under
which they are made, not misleading. The Proxy Statement will comply
as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder. For purposes
of this Agreement, the parties agree that the statements made and
information in the Registration Statement and the Proxy Statement
relating to the Federal income tax consequences of the transactions
contemplated hereby shall be deemed to be supplied by Christiana and
C2 and not by EVI or Sub.
ARTICLE III
COVENANTS OF CHRISTIANA
3.1 Conduct of Business by Christiana Pending the Merger.
Christiana covenants and agrees that, from the date of this Agreement
until the Effective Time, unless EVI shall otherwise agree in writing or
as otherwise expressly contemplated by this Agreement or the Logistic
Purchase Agreement or set forth in Section 3.1 of the Christiana
Disclosure Letter:
(a) the business of Christiana and the Christiana Subsidiaries
shall be conducted only in, and Christiana and the Christiana
Subsidiaries shall not take any action except in, the ordinary course
of business and consistent with past practice;
(b) Christiana shall not directly or indirectly do any of the
following: (i) issue, sell, pledge, dispose of or encumber any
capital stock of Christiana except upon the exercise of Christiana
Options; (ii) split, combine, or reclassify any outstanding capital
stock, or declare, set aside, or pay any dividend payable in cash,
stock, property, or otherwise with respect to its capital stock
whether now or hereafter outstanding; (iii) redeem, purchase or
acquire or offer to acquire any of its capital stock; (iv) acquire,
agree to acquire or make any offer to acquire for cash or other
consideration, any equity interest in or assets of any corporation,
partnership, joint venture, or other entity in an amount greater than
$500,000; or (v) enter into any contract, agreement, commitment, or
arrangement with respect to any of the matters set forth in this
Section 3.1(b);
(c) Christiana shall not transfer, dispose or otherwise convey
any of the shares of EVI Common Stock held by it or grant or permit
there to exist any Lien on such shares;
(d) Christiana shall not enter into any contract regarding its
business having a term greater than 120 days or involving an amount
in excess of $50,000 or commit to do the same and except for a cold
storage facility in Hudsonville, Michigan, no Christiana Subsidiary
shall enter into any contract outside the ordinary course of
business;
(e) Christiana shall not become bound by any agreement or
obligation in an amount in excess of $500,000 in the aggregate for
all such agreements and obligations;
(f) Christiana shall not pledge or encumber any of the assets
to be held by Christiana following the Logistic Sale;
(g) Neither Christiana nor any of its Subsidiaries shall enter
into any employment or consulting contracts;
(h) Neither Christiana nor any of its Subsidiaries shall enter
into any contract or agreement that if effective on the date hereof
would be required to be identified as a disclosure pursuant to
Section 2.2(q) of the Christiana Disclosure Letter;
(i) Neither Christiana nor any of its Subsidiaries shall sell,
lease, mortgage, pledge, xxxxx x Xxxx on or otherwise encumber or
otherwise dispose of any of Christiana's or its Subsidiaries'
properties or assets, except sales of inventory in the ordinary
course of business consistent with past practice and Christiana may
liquidate (in a manner acceptable to EVI) CST Financial, Inc.,
Martinique Holdings, Inc. and Christiana Community Builders, Inc. and
transfer their assets to Logistic without consideration;
(j) Neither Christiana nor any of its Subsidiaries shall,
directly or indirectly, incur any indebtedness for borrowed money or
guarantee any such indebtedness of another Person, issue or sell any
debt securities or warrants or other rights to acquire any debt
securities of Christiana or its Subsidiaries, guarantee any debt
securities of another Person, enter into any "keep well" or other
agreement to maintain any financial statement condition of another
Person or enter into any arrangement having the economic effect of
any of the foregoing, except for short-term borrowings incurred in
the ordinary course of business consistent with past practice which
obligations in respect of Christiana and its Subsidiaries other than
Logistic shall be released in connection with the Logistic Sale, or
make or permit to remain outstanding any loans, advances or capital
contributions to, or investments in, any other Person, other than to
Christiana or any direct or indirect wholly owned subsidiary of
Christiana;
(k) Neither Christiana nor any of its Subsidiaries shall make
any election relating to Taxes except for those elections to be made
in connection with its 1997 Tax Returns that are consistent with the
1996 Tax Returns;
(l) Neither Christiana nor any of its Subsidiaries shall change
any accounting principle used by it;
(m) Christiana shall use its reasonable efforts (i) to preserve
intact the business organization of Christiana and Logistic except
Christiana may liquidate (in a manner acceptable to EVI) CST
Financial, Inc., Martinique Holdings, Inc. and Christiana Community
Builders, Inc. and transfer their assets to Logistic without
consideration, (ii) to maintain in effect any material authorizations
or similar rights of Christiana and Logistic, (iii) to preserve the
goodwill of those having material business relationships with it;
(iv) to maintain and keep each of Christiana's properties in the same
repair and condition as presently exists, except for deterioration
due to ordinary wear and tear and damage due to casualty; and (v) to
maintain in full force and effect insurance comparable in amount and
scope of coverage to that currently maintained by it;
(n) Christiana shall, and shall cause the Christiana
Subsidiaries to, perform their respective obligations under any
contracts and agreements to which it is a party or to which any of
its assets is subject, except to the extent such failure to perform
would not have a Xxxxxxxxxx XXX and except for such obligations as
Christiana in good faith may dispute;
(o) Christiana shall cause there to exist immediately prior to
the Effective Time Christiana Net Cash (including $10,666,677 to be
paid by C2 under the Logistic Purchase Agreement) of not less than
$20 million;
(p) Neither Christiana nor any of its Subsidiaries shall settle
or compromise any litigation (whether or not commenced prior to the
date of this Agreement) other than settlements or compromises: (i) of
litigation where the amount paid in settlement or compromise does not
exceed $500,000, or if greater, the amount of the reserve therefor
reflected in the most recent SEC Documents and the terms of the
settlement would not otherwise have a Xxxxxxxxxx XXX, or (ii) in
consultation and cooperation with EVI, and, with respect to any such
settlement, with the prior written consent of EVI;
(q) Christiana shall cause the Logistic Purchase Agreement to
be executed and delivered by Christiana and the Logistic Sale to be
effected prior to the Merger immediately prior to the Effective Time;
(r) Christiana shall not authorize any of, or commit or agree
to take any of, or permit any Christiana Subsidiary to take any of,
the foregoing actions to the extent prohibited by the foregoing and
shall not, and shall not permit any of the Christiana Subsidiaries
to, take any action that would, or that reasonably could be expected
to, result in any of the representations and warranties set forth in
this Agreement becoming untrue or any of the conditions to the Merger
set forth in Article VI not being satisfied. Christiana promptly
shall advise EVI orally and in writing of any change or event having,
or which, insofar as reasonably can be foreseen, would have, a
material adverse effect on Christiana and the Christiana
Subsidiaries, taken as a whole, or cause a Xxxxxxxxxx XXX.
(s) Christiana shall cause Logistic to pay to Christiana a
distribution in the amount of $20 million cash prior to the Effective
Time (the "TLC Dividend");
(t) Christiana shall cause Logistic to pay in full the entire
principal amount of the Wiscold Note dated September 1, 1992, in the
principal amount of $3,000,000, together with all accrued interest
thereon (the "Wiscold Note"); and
(u) Except as set forth in Section 2.2(o) of the Disclosure
Schedule or agreed to in writing by EVI prior to the Closing,
Christiana shall cause all of its obligations (i) relating to
Logistics or any other historical business of Christiana or its
Subsidiaries and (ii) under any and all agreements relating to the
borrowing of funds, including all guarantees and other similar
arrangements relating thereto, to be fully released or otherwise
satisfied in a manner acceptable to EVI.
3.2 Cash Requirements. Christiana covenants that as of the
Effective Time it shall have cash equal to the sum of (i) $30 million
(including $10,666,677 to be received under the Logistic Purchase
Agreement) and (ii) all accrued and unpaid liabilities and obligations of
Christiana. For purposes of this Section 3.2, the unpaid liabilities and
obligations of Christiana shall mean the full undiscounted amount of
liabilities for which Christiana shall be responsible, including any
liabilities that will accrue as a result of the Merger, the Logistic Sale
or the transactions contemplated herein, whether or not such liabilities
would be required to be reflected as a liability by generally accepted
accounting principles; provided, however, that such liabilities shall not
include any liabilities for any gain on any EVI Common Stock held by
Christiana realized as a result of a sale of such stock by Christiana or a
liquidation or merger of Christiana (other than the Merger) within two
years after the Effective Time, nor any tax liability for income of EVI
attributable to Christiana under the equity method of accounting either
before or after the Effective Time (the "EVI Related Taxes). Further, for
purposes of calculating such liabilities, any Taxes (other than the EVI
Related Taxes) payable in respect of the Logistic Sale or other
transactions contemplated herein or under the Logistic Purchase Agreement
shall be fully accrued as a liability and any Tax credits, deductions,
other Tax benefits of Christiana shall not be considered or used to offset
any such liability. The provisions of this Section 3.2 shall not affect
Logistic's and C2's obligations under the Logistic Purchase Agreement to
assume and indemnify EVI as set forth therein.
3.3 Affiliates' Agreements. Prior to the Closing Date, Christiana
shall deliver to EVI a letter identifying all Persons that are, at the
time this Agreement is submitted for approval to the stockholders of
Christiana, "affiliates" of Christiana for purposes of Rule 145 under the
Securities Act ("Affiliates"). Christiana shall deliver or cause to be
delivered to EVI an undertaking by each Affiliate in form satisfactory to
EVI that no EVI Common Stock received or to be received by such Affiliate
pursuant to the Merger will be sold or disposed of except pursuant to an
effective registration statement under the Securities Act or in accordance
with the provisions of Rule 144 or paragraph (d) of Rule 145 under the
Securities Act or another exemption from registration under the Securities
Act.
ARTICLE IV
COVENANTS OF EVI PRIOR TO THE EFFECTIVE TIME
4.1 Reservation of EVI Stock. EVI shall reserve for issuance, out
of its authorized but unissued capital stock, such number of shares of EVI
Common Stock as may be issuable upon consummation of the Merger.
4.2 Conduct of EVI Pending the Merger. EVI covenants and agrees
that, from the date of this Agreement until the Effective Time, unless
Christiana shall otherwise agree in writing or as otherwise expressly
contemplated by this Agreement, it will not take any action that would, or
that could be expected to, result in any of the representations and
warranties set forth in this Agreement becoming untrue or any of the
conditions to the merger set forth in Article VI not being satisfied.
4.3 Stock Exchange Listing. EVI shall use reasonable efforts to
cause the shares of EVI Common Stock to be issued in the Merger to be
approved for listing on the NYSE, subject to official notice of issuance,
prior to the Closing Date.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Joint Proxy Statement/Prospectus; Registration Statement. As
promptly as reasonably practicable after the execution of this Agreement,
EVI and Christiana shall prepare and file with the Commission preliminary
proxy materials that shall constitute the Proxy Statement of EVI and
Christiana and the registration statement with respect to the EVI Common
Stock to be issued in connection with the Merger (the "Registration
Statement"). As promptly as reasonably practicable after final comments
are received from and cleared by the Commission on the preliminary proxy
materials, EVI and Christiana shall file with the Commission a combined
joint proxy statement and registration statement on Form S-4 (or on such
other form as shall be appropriate) relating to the approval and adoption
of the Merger and this Agreement by the stockholders of EVI and the
stockholders of Christiana and the issuance by EVI of EVI Common Stock in
connection with the Merger and shall use their reasonable efforts to cause
the Registration Statement to become effective as soon as practicable.
Subject to the terms and conditions set forth in Section 6.2 and the
fiduciary obligations of the Board of Directors of EVI with respect to
such matters, the Proxy Statement shall contain a statement that the Board
of Directors of EVI recommended that the stockholders of EVI approve and
adopt the Merger and this Agreement. Subject to the terms and conditions
set forth in Section 6.3 and the fiduciary obligations of the Board of
Directors of Christiana with respect to such matters, the Proxy Statement
shall contain a statement that the Board of Directors of Christiana
recommended that the stockholders of Christiana approve and adopt the
Merger and this Agreement.
5.2 Accountants Letter. Christiana shall use its reasonable efforts
to cause Xxxxxx Xxxxxxxx LLP to deliver a letter pursuant to SAS 72 dated
as of the date of the Proxy Statement and confirmed and updated at the
Closing as of the Closing Date, and addressed to itself and EVI, in the
form and substance reasonably satisfactory to EVI and customary in the
scope and substance for agreed upon procedures letters delivered by
independent public accountants in connection with registration statements
and proxy statements similar to the Registration Statement and Proxy
Statement.
5.3 Meetings of Stockholders.
(a) Christiana shall promptly take all action reasonably
necessary in accordance with the WGCL and its Certificate of
Incorporation and bylaws to convene a meeting of its stockholders to
consider and vote upon the adoption and approval of the Merger and
this Agreement and the Logistic Sale. Christiana shall provide that,
in addition to any vote that may be required by law, the approval of
the Merger and this Agreement and the Logistic Sale shall require
approval of a majority of the votes cast for or against such matters
excluding any shares of Christiana Common Stock held by Lubar & Co.
Incorporated and its affiliates; provided, however, Christiana may,
in lieu of such requirement, obtain an agreement by Lubar & Co.
Incorporated and its affiliates to vote all of its shares of
Christiana Common Stock for, against or abstain from voting with
respect to such matters in the same proportion as the shares of
Christiana Common Stock are voted on such matters by the other
stockholders of Christiana. Subject to the terms and conditions set
forth in Section 6.3 and the fiduciary obligations of the Board of
Directors of Christiana with respect to such matters, the Board of
Directors of Christiana (i) shall recommend at such meeting that the
stockholders of Christiana vote to adopt and approve the Merger and
this Agreement and the Logistic Sale, (ii) shall use its best efforts
to solicit from stockholders of Christiana proxies in favor of such
adoption and approval and (iii) shall take all other action
reasonably necessary to secure a vote of its stockholders in favor of
the adoption and approval of the Merger and this Agreement.
(b) EVI shall promptly take all action reasonably necessary in
accordance with the General Corporation Law of the State of Delaware
(the "DGCL") and its Certificate of Incorporation and bylaws to
convene a meeting of its stockholders to consider and vote upon the
adoption and approval of the Merger and this Agreement. Subject to
the terms and conditions set forth in Section 6.2 and the fiduciary
obligations of the Board of Directors of EVI with respect to such
matters, the Board of Directors of EVI (i) shall recommend at such
meeting that the stockholders of EVI vote to adopt and approve the
Merger and this Agreement, (ii) shall use its reasonable efforts to
solicit from stockholders of EVI proxies in favor of such adoption
and approval and (iii) shall take all other action reasonably
necessary to secure a vote of its stockholders in favor of the
adoption and approval of the Merger and this Agreement.
(c) EVI and Christiana shall coordinate and cooperate with
respect to the timing of such meetings and shall endeavor to hold
such meetings on the same day and as soon as practicable after the
date hereof.
5.4 Filings; Consents; Reasonable Efforts. Subject to the terms and
conditions of this Agreement, Christiana and EVI shall (i) make all
necessary filings with respect to the Merger and this Agreement under the
HSR Act, the Securities Act, the Exchange Act, and applicable blue sky or
similar securities laws and shall use all reasonable efforts to obtain
required approvals and clearances with respect thereto; (ii) use
reasonable efforts to obtain all consents, waivers, approvals,
authorizations, and orders required in connection with the authorization,
execution, and delivery of this Agreement and the consummation of the
Merger; and (iii) use reasonable efforts to take, or cause to be taken,
all appropriate action, and do, or cause to be done, all things necessary,
proper, or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement.
5.5 Notification of Certain Matters. Christiana shall give prompt
notice to EVI, and EVI shall give prompt notice to Christiana, orally and
in writing, of (i) the occurrence, or failure to occur, of any event which
occurrence or failure would be likely to cause any representation or
warranty contained in this Agreement to be untrue or inaccurate at any
time from the date hereof to the Effective Time; and (ii) any material
failure of Christiana or EVI, as the case may be, or any officer,
director, employee or agent thereof, to comply with or satisfy any
covenant, condition or agreement to be compiled with or satisfied by it
hereunder.
5.6 Expenses. Whether or not the Merger is consummated, all costs
and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses, except those out-of-pocket expenses (which do not include fees
for attorneys, accountants and financial advisors) incurred in connection
with (i) the registration fees for the EVI Common Stock under the
Securities Act to be issued in the Merger, (ii) the registration and
qualification of the EVI Common Stock under any state securities and blue
sky laws, (iii) the listing of the EVI Common Stock on the NYSE, (iv) the
HSR filing fee (v) the investment banking, appraisal, and related expenses
of Christiana, (vi) the cost of any proxy solicitors and (vii) the
printing and mailing of the Registration Statement and the Proxy Statement
shall be paid by Christiana; provided, however, that if this Agreement
shall have been terminated pursuant to Section 7.1 as a result of the
willful breach by a party of any of its representations, warranties,
covenants, or agreements set forth in this Agreement, such breaching party
shall pay the direct out-of-pocket costs and expenses of the other parties
in connection with the transactions contemplated by this Agreement.
5.7 Christiana's Employee Benefits.
(a) Christiana shall take action prior to the Merger and the
Logistic Sale to (i) either cancel all outstanding Christiana Options
or accelerate such Christiana Options and make such Christiana
Options terminate prior to the Effective Time and (ii) and terminate
the Christiana Option Plan.
(b) Christiana shall pay to each holder of Christiana Options
an amount of cash necessary to obtain cancellation of all Christiana
Options held by such holders.
(c) Christiana shall cause all employee benefit plans to which
it is a sponsor or has obligations to be terminated or assumed by
Logistic or C2 without any continuing obligations on the part of
Christiana.
(d) Christiana shall transfer to Logistic or C2 all employees
of Christiana without any liability to the Surviving Corporation. C2
shall be responsible for all severance and other obligations with
respect to such terminated employees, if any. As of the Effective
Time, Christiana shall have no employees or employee benefit plans or
obligations.
5.8 Liquidation or Merger of Christiana. EVI agrees that for a
period of two years following the Effective Date it shall not cause or
permit Christiana to (i) liquidate or dissolve, (ii) sell or transfer any
shares of EVI Common Stock held by Christiana or (iii) merge Christiana
into any other entity unless EVI receives an opinion of a nationally-
recognized tax counsel or accounting firm that such transaction will not
adversely affect the tax treatment of the Merger; provided, however, this
restriction shall not be deemed to prohibit or restrict (i) a sale or
disposition of Christiana's interest in Logistic to the extent permitted
by the Logistic Purchase Agreement or the operating agreement relating to
Logistic, (ii) a change in control of EVI, (iii) a merger, consolidation,
share exchange or similar transaction involving EVI or its subsidiaries
(other than Christiana) or (iv) a sale or disposition of any assets of EVI
or its subsidiaries (other than Christiana).
ARTICLE VI
CONDITIONS
6.1 Conditions to Obligation of Each Party to Effect the Merger.
The respective obligations of each party to effect the Merger shall be
subject to the fulfillment at or prior to the Closing Date of the
following conditions:
(a) This Agreement and the Merger (and the Logistic Sale in the
case of Christiana) shall have been approved and adopted by the
requisite vote of the stockholders of Christiana and EVI, as may be
required by law, by the rules of the NYSE, by Section 5.3(a) and by
any applicable provisions of their respective charters or bylaws;
(b) The waiting period (and any extension thereof) applicable
to the consummation of the Merger under the HSR Act shall have
expired or been terminated;
(c) No order shall have been entered and remain in effect in
any action or proceeding before any foreign, federal or state court
or governmental agency or other foreign, federal or state regulatory
or administrative agency or commission that would prevent or make
illegal the consummation of the Logistic Sale and the Merger;
(d) The Registration Statement and a registration statement
under the Securities Act to be filed by C2 in connection with the
Merger shall each be effective on the Closing Date, and all post-
effective amendments thereto filed shall have been declared effective
or shall have been withdrawn; and no stop-order suspending the
effectiveness thereof shall have been issued and no proceedings for
that purpose shall have been initiated or, to the knowledge of the
parties, threatened by the Commission;
(e) There shall have been obtained any and all material
permits, approvals and consents of securities or blue sky commissions
of any jurisdiction, and of any other governmental body or agency,
that reasonably may be deemed necessary so that the consummation of
the Merger and the transactions contemplated thereby will be in
compliance with applicable laws, the failure to comply with which
would have a Xxxxxxxxxx XXX or EVI MAE;
(f) The shares of EVI Common Stock issuable upon consummation
of the Merger shall have been approved for listing on the NYSE,
subject to official notice of issuance;
(g) EVI, C2 and Christiana shall have received an opinion,
dated as of the Effective Date, from American Appraisal Associates,
Inc. in form and substance satisfactory to them, in respect of the
matters described in Section 2.2(u); and
(h) All approvals and consents of third Persons (i) the
granting of which is necessary for the consummation of the Merger,
the Logistic Sale or the transactions contemplated in connection
therewith and (ii) the non-receipt of which would have a Xxxxxxxxxx
XXX or an EVI MAE.
6.2 Additional Conditions to Obligations of EVI. The obligation of
EVI to effect the Merger is, at the option of EVI, also subject to the
fulfillment at or prior to the Closing Date of the following conditions:
(a) The representations and warranties of Christiana contained
in Section 2.2 shall be accurate as of the date of this Agreement and
(except to the extent such representations and warranties speak
specifically as of an earlier date) as of the Closing Date as though
such representations and warranties had been made at and as of that
time; all of the terms, covenants and conditions of this Agreement to
be complied with and performed by Christiana on or before the Closing
Date shall have been duly complied with and performed in all material
respects; and a certificate to the foregoing effect dated the Closing
Date and signed by the chief executive officer and the president of
Christiana shall have been delivered to EVI;
(b) There shall not have occurred or exist any fact or
condition that would reasonably result in a Xxxxxxxxxx XXX or would
constitute a material fixed or contingent liability to Christiana,
and EVI shall have received a certificate signed by the president of
Christiana dated the Closing Date to such effect;
(c) The Board of Directors of EVI shall have received from
Xxxxxx Xxxxxxx & Co. Incorporated, financial advisor to EVI, a
written opinion, satisfactory in form and substance to the Board of
Directors of EVI, to the effect that consideration to be paid by EVI
in the Merger is fair to EVI from a financial point of view, which
opinion shall have been confirmed in writing to such Board as of a
date reasonably proximate to the date the Proxy Statement is first
mailed to the stockholders of EVI and not subsequently withdrawn;
(d) The Christiana Options shall have been cancelled and the
Christiana Plans shall have been terminated or such options shall
have been exercised;
(e) Christiana shall have received, and furnished written
copies of EVI of, the Christiana affiliates' agreements pursuant to
Section 3.3;
(f) EVI shall have received from Xxxxx & Xxxxxxx, counsel to
Christiana, an opinion dated the Closing Date covering customary
matters relating to the Agreement and the Merger, including an
opinion in form and substance satisfactory to EVI with respect to the
matters described in Section 2.2(a), (b), (c), (d) and (k) (provided
that the form of such opinion shall be agreed upon prior to the
filing of the Registration Statement with the Commission);
(g) EVI shall have received from Xxxxxx Xxxxxxxx LLP a written
opinion, in form and substance satisfactory to EVI, dated as of the
date that the Proxy Statement is first mailed to the Stockholders of
Christiana and EVI to the effect that (i) the Merger will be treated
for U.S. federal income tax purposes as a reorganization within the
meaning of Section 368(a)(1)(A) of the Code by reason of
Section 368(a)(2)(E) of the Code, (ii) EVI, Sub and Christiana will
each be a party to that reorganization within the meaning of
Section 368(b) of the Code and (iii) EVI, Sub and Christiana shall
not recognize any gain or loss for U.S. federal income tax purposes
as a result of the Merger (although Christiana will recognize gain or
loss for U.S. federal income tax purposes as a result of the Logistic
Sale), and such opinion shall be confirmed at the Closing;
(h) EVI shall have received from Xxxxxx Xxxxxxxx LLP a letter,
in form and substance satisfactory to EVI, dated as of the Closing
Date, to the effect that the Merger would not adversely affect the
ability of EVI to account for any prior or future business
combination as a pooling of interest;
(i) C2 shall have executed and delivered to Christiana and EVI
the Logistic Purchase Agreement and agreement among members in form
and substance, including schedules, acceptable to EVI;
(j) The Logistic Sale shall have been consummated;
(k) Christiana shall have delivered to EVI a pro forma balance
sheet after giving effect to the Logistic Sale, including a full
accrual for Taxes thereon without regard to any tax credits or tax
deductions that Christiana may have in connection with the exercise
of any stock options, reflecting Christiana Net Cash in an amount not
less than $20 million;
(l) Except as permitted by Section 3.1, all outstanding
Indebtedness (including guarantees thereof) of Christiana and its
Subsidiaries (other than Logistics) shall have been paid in full or
Christiana shall have been fully released therefrom;
(m) The assets of Christiana shall consist only of cash of at
least $30 million, 3,897,462 shares of EVI Common Stock and 333.333
units of Logistic representing one-third of the outstanding interests
of Logistic; and
(n) There shall not be pending any litigation involving
Christiana or any of its subsidiaries, that EVI, in its sole
discretion, considers to be a material liability for which adequate
security has not been provided.
6.3 Additional Conditions to Obligations of Christiana. The
obligation of Christiana to effect the Merger is, at the option of
Christiana, also subject to the fulfillment at or prior to the Closing
Date of the following conditions:
(a) The representations and warranties of EVI and Sub contained
in Section 2.1 shall be accurate as of the date of this Agreement and
(except to the extent such representations and warranties speak
specifically as of an earlier date) as of the Closing Date as though
such representations and warranties had been made at and as of that
time; all the terms, covenants and conditions of this Agreement to be
complied with and performed by EVI on or before the Closing Date
shall have been duly complied with and performed in all material
respects; and a certificate to the foregoing effect dated the Closing
Date and signed by the chief executive officer of EVI shall have been
delivered to Christiana;
(b) The Board of Directors of Christiana and C2 shall have
received from Prudential Securities Corporation, financial advisor to
Christiana and C2, a written opinion, satisfactory in form and
substance to the Board of Directors of Christiana and C2, to the
effect that from a financial point of view to the Christiana
Shareholders the Merger, which includes (i) the consideration to be
received in the Merger and (ii) the purchase price for Logistic is
fair to the Christiana Shareholders, which opinion shall have been
confirmed in writing to such Board as of a date reasonably proximate
to the date the Proxy Statement is first mailed to the stockholders
of Christiana and EVI and not subsequently withdrawn;
(c) Christiana and C2 shall have received from Fulbright &
Xxxxxxxx L.L.P. counsel to EVI, an opinion dated the Closing Date
covering customary matters relating to this Agreement and the Merger,
including an opinion in form and substance with respect to the
matters described in Section 2.1(a), (b)(iii), (c) and (d)(i), (ii)
and (iii);
(d) C2 and Christiana shall have received from Xxxxxx Xxxxxxxx
LLP, a written opinion, in form and substance satisfactory to
Christiana, dated as of the date that the Proxy Statement is first
mailed to stockholders of Christiana and EVI to the effect that
(i) the Merger will be treated for U.S. federal income tax purposes
as a reorganization within the meaning of Section 368(a)(1)(A) of the
Code by reason of Section 368(a)(2)(E) of the Code; (ii) EVI, Sub and
Christiana will each be a party to that reorganization within the
meaning of Section 368(b) of the Code, and (iii) EVI, Sub and
Christiana shall not recognize any gain or loss for U.S. federal
income tax purposes as a result of the Merger (although Christiana
will recognize gain or loss for U.S. federal income tax purposes as a
result of the Logistic Sale), and such opinion shall be confirmed at
the Closing; and
(e) The Logistic Sale under the Logistic Purchase Agreement
shall have occurred.
ARTICLE VII
MISCELLANEOUS
7.1 Termination. This Agreement may be terminated and the Merger
and the other transactions contemplated herein may be abandoned at any
time prior to the Effective Time, whether prior to or after approval by
the stockholders of EVI or the stockholders of Christiana:
(a) by mutual written consent of EVI and Christiana;
(b) by either EVI or Christiana if (i) the Merger has not been
consummated on or before June 30, 1998 (provided that the right to
terminate this Agreement under this clause (i) shall not be available
to any party whose breach of any representation or warranty or
failure to fulfill any covenant or agreement under this Agreement has
been the cause of or resulted in the failure of the Merger to occur
on or before such date); (ii) any court of competent jurisdiction, or
some other governmental body or regulatory authority shall have
issued an order, decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the Merger; (iii) the
stockholders of Christiana shall not approve the Logistic Sale or the
Merger at the Christiana stockholder meeting or at any adjournment
thereof; (iv) the stockholders of EVI shall not approve the Merger at
the EVI stockholder meeting or any adjournment thereof; or (v) in the
exercise of its good faith judgment as to its fiduciary duties to its
stockholders imposed by law, as advised by outside counsel, the Board
of Directors of Christiana or EVI determines that such termination is
appropriate in complying with its fiduciary obligations.
(c) by Christiana if (i) EVI shall have failed to comply in any
material respect with any of the covenants or agreements contained in
this Agreement to be complied with or performed by EVI or Sub at or
prior to such date of termination (provided such breach has not been
cured within 30 days following receipt by EVI of written notice from
Christiana of such breach and is existing at the time of termination
of this Agreement); (ii) any representation or warranty of EVI
contained in this Agreement shall not be true in all respects when
made (provided such breach has not been cured within 30 days
following receipt by EVI of written notice from Christiana of such
breach and is existing at the time of termination of this Agreement)
or on and as of the Effective Time as if made on and as of the
Effective Time (except to the extent it relates to a particular
date), except for such failures to be so true and correct which would
not individually or in the aggregate, reasonably be expected to have
an EVI MAE, assuming the effectiveness of the Merger; or (iii) the
Board of Directors of EVI withdraws, modifies or changes its
recommendation of this Agreement or the Merger in a manner adverse to
Christiana or shall have resolved to do any of the foregoing.
(d) by EVI if (i) Christiana shall have failed to comply in any
material respect with any of the covenants or agreements contained in
this Agreement to be complied with or performed by it at or prior to
such date of termination (provided such breach has not been cured
within 30 days following receipt by Christiana of written notice from
EVI of such breach and is existing at the time of termination of this
Agreement; (ii) any representation or warranty of Christiana
contained in this Agreement shall not be true in all respects when
made (provided such breach has not been cured within 30 days
following receipt by Christiana of written notice from EVI of such
breach and is existing at the time of termination of this Agreement)
or on and as of the Effective Time as if made on and as of the
Effective Time (except to the extent it relates to a particular
date), except for such failures to be so true and correct which would
not individually or in the aggregate, reasonably be expected to have
a Xxxxxxxxxx XXX assuming the effectiveness of the Merger or
(iii) the Board of Directors of Christiana withdraws, modifies or
changes its recommendation of this Agreement or the Merger in a
manner adverse to EVI or shall have resolved to do any of the
foregoing.
7.2 Effect of Termination. In the event of termination of this
Agreement by either EVI or Christiana as provided in Section 7.1, this
Agreement shall forthwith become void and there shall be no liability or
obligation on the part of EVI, Sub or Christiana, except (i) with respect
to this Section 7.2, Section 5.6 and Section 7.13, and (ii) such
termination shall not relieve any party hereto for any intentional breach
prior to such termination by a party hereto of any of its representations
or warranties or of any of its covenants or agreements set forth in this
Agreement.
7.3 Waiver and Amendment. Any provision of this Agreement may be
waived at any time by the party that is, or whose stockholders are,
entitled to the benefits thereof. This Agreement may not be amended or
supplemented at any time, except by an instrument in writing signed on
behalf of each party hereto, provided that after this Agreement has been
approved and adopted by the stockholders of EVI and Christiana, this
Agreement may be amended only as may be permitted by applicable provisions
of the DGCL and the WGCL. The waiver by any party hereto of any condition
or of a breach of another provision of this Agreement shall not operate or
be construed as a waiver of any other condition or subsequent breach. The
waiver by any party hereto of any of the conditions precedent to its
obligations under this Agreement shall not preclude it from seeking
redress for breach of this Agreement other than with respect to the
condition so waived.
7.4 Nonsurvival of Representations and Warranties. Except for the
representations and warranties of C2 contained herein, which shall survive
without limitation, none of the representations and warranties in this
Agreement shall survive the Effective Time.
7.5 Public Statements. Christiana and EVI agree to consult with
each other prior to issuing any press release or otherwise making any
public statement with respect to the transactions contemplated hereby.
7.6 Assignment. This Agreement shall inure to the benefit of and
will be binding upon the parties hereto and their respective legal
representatives, successors and permitted assigns.
7.7 Notices. All notices, requests, demands, claims and other
communications which are required to be or may be given under this
Agreement shall be in writing and shall be deemed to have been duly given
if (i) delivered in Person or by courier, (ii) sent by telecopy or
facsimile transmission, answer back requested, or (iii) mailed, certified
first class mail, postage prepaid, return receipt requested, to the
parties hereto at the following addresses:
if to Christiana:
Christiana Companies, Inc.
000 X. Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxx & Lardner
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx, Xx.
Facsimile: (000) 000-0000
if to C2:
C2, Inc.
000 X. Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxx & Xxxxxxx
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx, Xx.
Facsimile: (000) 000-0000
if to EVI or Sub:
EVI, Inc.
0 Xxxx Xxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Duroc-Xxxxxx
Facsimile: (000) 000-0000
with a copy to:
Fulbright & Xxxxxxxx, L.L.P.
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attn: Xxxxxx X. Xxxx
Facsimile: (000) 000-0000
or to such other address as any party shall have furnished to the other by
notice given in accordance with this Section 7.7. Such notices shall be
effective, (i) if delivered in Person or by courier, upon actual receipt
by the intended recipient, (ii) if sent by telecopy or facsimile
transmission, when the answer back is received, or (iii) if mailed, upon
the earlier of five days after deposit in the mail and the date of
delivery as shown by the return receipt therefor.
7.8 Governing Law. All questions arising out of this Agreement and
the rights and obligations created herein, or its validity, existence,
interpretation, performance or breach shall be governed by the laws of the
State of Delaware, without regard to conflict of laws principles.
7.9 Arbitration. Any disputes, claims or controversies connected
with, arising out of, or related to, this Agreement and the rights and
obligations created herein, or the breach, validity, existence or
termination hereof, shall be settled by Arbitration to be conducted in
accordance with the Commercial Rules of Arbitration of the American
Arbitration Association, except as such Commercial Rules may be changed by
this Section 7.9. The disputes, claims or controversies shall be decided
by three independent arbitrators (that is, arbitrators having no
substantial economic or other material relationship with the parties), one
to be appointed by Christiana, if prior to the Merger, or C2, if after the
Merger, and one to be appointed by EVI within fourteen days following the
submission of the claim to the parties hereto and the third to be
appointed by the two so appointed within five days thereafter. Should
either party refuse or neglect to join in the timely appointment of the
arbitrators, the other party shall be entitled to select both arbitrators.
Should the two arbitrators fail timely to appoint a third arbitrator,
either party may apply to the Chief Judge of the United States District
Court for the Southern District of Texas to make such appointment. The
arbitrators shall have ninety days after the selection of the third
arbitrator within which to allow discovery, hear evidence and issue their
decision or award and shall in good faith attempt to comply with such time
limits; provided, however, if two of the three arbitrators believe
additional time is necessary to reach a decision, they may notify the
parties and extend the time to reach a decision in thirty day increments,
but in no event to exceed an additional ninety days. Discovery of
evidence shall be conducted expeditiously by the parties, bearing in mind
the parties desire to limit discovery and to expedite the decision or
award of the arbitrators at the most reasonable cost and expense of the
parties. Judgment upon an award rendered pursuant to such Arbitration may
be entered in any court having jurisdiction, or application may be made to
such court for a judicial acceptance of the award, and an order of
enforcement, as the case may be. The place of Arbitration shall be
Houston, Texas. The decision of the arbitrators, or a majority thereof,
made in writing, shall be final and binding upon the parties hereto as to
the questions submitted, and each party shall abide by such decision.
Notwithstanding the provisions of this Section 7.9, neither party shall be
prohibited from seeking injunctive relief pending the completion of any
arbitration. The costs and expenses of the arbitration proceeding,
including the fees of the arbitrators and all costs and expenses,
including legal fees and witness fees, incurred by the prevailing party,
shall be borne by the losing party.
Solely for purposes of injunctive relief, orders in aid of
arbitration and entry of the arbitrators' award:
(a) each of the parties hereto irrevocably consents to the non-
exclusive jurisdiction of, and venue in, any state court located in
Xxxxxx County, Texas or any federal court sitting in the Southern
District of Texas in any suit, action or proceeding seeking
injunctive relief, orders in aid of arbitration, or entry of an
arbitral award arising out of or relating to this Agreement or any of
the other agreements contemplated hereby and any other court in which
a matter that may result in a claim for indemnification hereunder by
an EVI Indemnified Party (as defined in the Logistic Purchase
Agreement) may be brought with respect to any claim for
indemnification by an EVI Indemnified Party;
(b) each of the parties hereto waives, to the fullest extent
permitted by law, any objection that it may now or hereafter have to
the laying of venue of any suit, action or proceeding seeking
injunctive relief, orders in aid of arbitration or entry of an
arbitral award arising out of or relating to this Agreement or any of
the other agreements contemplated hereby brought in any state court
located in Xxxxxx County, Texas or any federal court sitting in the
Southern District of Texas or any other court in which a matter that
may result in a claim hereunder or for indemnification under the
Logistic Purchase Agreement by an EVI Indemnified Party may be
brought with respect to any claim for indemnification by an EVI
Indemnified Party, and further irrevocably waive any claim that any
such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum;
(c) each of the parties hereto irrevocably designates, appoints
and empowers CT Corporation System, Inc. and any successor thereto as
its designee, appointee and agent to receive, accept and acknowledge
for and on its behalf, and in respect of its property, service of any
and all legal process, summons, notices and documents which may be
served in any suit, action or proceeding arising out of or relating
to this Agreement or any of the other agreements contemplated hereby
for the purposes of injunctive relief, orders in aid of arbitration
and entry of an arbitral award.
7.10 Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provision,
covenants and restrictions of this Agreement shall continue in full force
and effect and shall in no way be affected, impaired or invalidated.
7.11 Counterparts. This Agreement may be executed in counterparts,
each of which shall be an original, but all of which together shall
constitute one and the same agreement.
7.12 Headings. The Section headings herein are for convenience only
and shall not affect the construction hereof.
7.13 Confidentiality Agreement. The Confidentiality Agreements
entered into between EVI and Christiana on December 10, 1997 (the
"Confidentiality Agreements") are hereby incorporated by reference herein
and made a part hereof.
7.14 Entire Agreement: Third Party Beneficiaries. This Agreement,
the Other Agreements and the Confidentiality Agreements constitute the
entire agreement and supersede all other prior agreements and
understandings, both oral and written, among the parties or any of them,
with respect to the subject matter hereof and neither this nor any
document delivered in connection with this Agreement confers upon any
Person not a party hereto any rights or remedies hereunder.
7.15 Disclosure Letters.
(a) The Christiana Disclosure Letter, executed by Christiana as
of the date hereof, and delivered to EVI on the date hereof, contains
all disclosure required to be made by Christiana under the various
terms and provisions of this Agreement. Each item of disclosure set
forth in the Christiana Disclosure Letter specifically refers to the
Article and Section of the Agreement to which such disclosure
responds, and shall not be deemed to be disclosed with respect to any
other Article or Section of the Agreement.
(b) The EVI Disclosure Letter, executed by EVI as of the date
hereof, and delivered to Christiana on the date hereof, contains all
disclosure required to be made by EVI under the various terms and
provisions of this Agreement. Each item of disclosure set forth in
the EVI Disclosure Letter specifically refers to the Article and
Section of the Agreement to which such disclosure responds, and shall
not be deemed to be disclosed with respect to any other Article or
Section of the Agreement.
IN WITNESS WHEREOF, each of the parties caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as
of the date first above written.
EVI, INC.
By: ___________________________________
Name: _________________________________
Title: ________________________________
CHRISTIANA ACQUISITION, INC.
By: __________________________________
Name: ________________________________
Title: _______________________________
CHRISTIANA COMPANIES, INC.
By: _________________________________
Name: Xxxxxxx X. Xxxxxxx
Title: President
C2, Inc.
By: _______________________________
Name: Xxxxxxx X. Xxxxxxx
Title: President
EVI DISCLOSURE LETTER
Section 2.1(g) - Tax Matters
