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EXHIBIT 2.2
AGREEMENT AND PLAN OF MERGER
AMONG
ENERGY VENTURES, INC.,
GULFMARK ACQUISITION CO.,
GULFMARK INTERNATIONAL, INC.
AND
NEW GULFMARK INTERNATIONAL, INC.
DECEMBER 5, 1996
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TABLE OF CONTENTS
ARTICLE I THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 THE MERGER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.7 CONVERSION OF SECURITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.8 EXCHANGE OF CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.9 TAKING OF NECESSARY ACTION; FURTHER ACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE II REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.1 REPRESENTATIONS AND WARRANTIES OF EVI AND SUB. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(a) Organization and Compliance with Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(b) Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(c) Authorization and Validity of Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . 7
(d) No Approvals or Notices Required; No Conflict . . . . . . . . . . . . . . . . . . . . . . . . 7
(e) Commission Filings; Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(f) Absence of Certain Charges and Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(g) Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(h) Voting Requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(i) Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(j) Information Supplied . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.2 REPRESENTATIONS AND WARRANTIES OF GULFMARK AND SPINCO. . . . . . . . . . . . . . . . . . . . . . . . 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 GulfMark
is a Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(e) Commission Filings; Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . 13
(f) Conduct of Business in the Ordinary Course; Absence of Certain Changes and Events. . . . . 14
(g) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(h) Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(i) Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(j) Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(k) Investment Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(l) Severance Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(m) Voting Requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(n) Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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(o) Assets and Liabilities at Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(p) Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(q) Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(r) Title to Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(s) Insurance Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(t) Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(u) No Fraudulent Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(v) Information Supplied . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE III COVENANTS OF GULFMARK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.1 CONDUCT OF BUSINESS BY GULFMARK PENDING THE MERGER. . . . . . . . . . . . . . . . . . . . . . . . . 24
3.2 NET WORKING CAPITAL REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.3 AFFILIATES' AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE IV COVENANTS OF EVI PRIOR TO THE EFFECTIVE TIME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.1 CONDUCT OF BUSINESS BY EVI PENDING THE MERGER. . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.2 RESERVATION OF EVI STOCK. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.3 STOCK EXCHANGE LISTING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE V ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.1 JOINT PROXY STATEMENT/PROSPECTUS; REGISTRATION STATEMENT. . . . . . . . . . . . . . . . . . . . . . 28
5.2 ACCOUNTANTS LETTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.3 MEETINGS OF STOCKHOLDERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.4 FILINGS; CONSENTS; REASONABLE EFFORTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.5 NOTIFICATION OF CERTAIN MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.6 EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.7 GULFMARK'S EMPLOYEE BENEFITS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE VI CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.1 CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE MERGER. . . . . . . . . . . . . . . . . . . . . 31
6.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF EVI. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
6.3 ADDITIONAL CONDITIONS TO OBLIGATIONS OF GULFMARK. . . . . . . . . . . . . . . . . . . . . . . . . . 33
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ARTICLE VII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
7.1 TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
7.2 EFFECT OF TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.3 WAIVER AND AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.4 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.5 PUBLIC STATEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.6 ASSIGNMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.7 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.8 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
7.9 ARBITRATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
7.10 SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.11 COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.12 HEADINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.13 CONFIDENTIALITY AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.14 ENTIRE AGREEMENT: THIRD PARTY BENEFICIARIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.15 DISCLOSURE LETTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
GLOSSARY OF DEFINED TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
LIST OF EXHIBITS
Exhibit A - Form of Agreement and Plan of Distribution
Exhibit B - Amended and Restated Certificate of Incorporation of GulfMark
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger, dated as of the 5th day of
December, 1996 (this "Agreement"), is among ENERGY VENTURES, INC., a Delaware
corporation ("EVI"), GULFMARK ACQUISITION CO., a Delaware corporation and
wholly-owned subsidiary of EVI ("Sub"), GULFMARK INTERNATIONAL, INC., a
Delaware corporation ("GulfMark"), and NEW GULFMARK INTERNATIONAL, INC., a
Delaware corporation and wholly-owned subsidiary of GulfMark ("Spinco").
WHEREAS, subject to and in accordance with the terms and conditions of
this Agreement, the respective Boards of Directors of EVI, Sub and GulfMark,
and EVI as sole stockholder of Sub, have approved the merger of Sub with and
into GulfMark (the "Merger"), whereby each issued and outstanding share of
common stock, par value $1.00 per share, of GulfMark ("GulfMark Common Stock")
not owned directly or indirectly by GulfMark will be converted into the right
to receive .6695 of one share of common stock, par value $1.00 per share, of
EVI ("EVI Common Stock"); and
WHEREAS, as a condition to the Merger, GulfMark will contribute to
Spinco (a) all of the stock of GulfMark's subsidiaries other than Ercon (the
"Marine Subsidiaries") and (b) the general corporate assets of GulfMark
(excluding (i) all EVI Common Stock held by GulfMark, (ii) any and all
property, assets, claims and rights, tangible and intangible of Ercon, as
defined herein, (iii) the original tax, accounting and other corporate records
of GulfMark and (iv) all of the shares of common stock and other ownership
interests held by GulfMark in American Independent Oil Company ("AIOC"), such
excluded assets being referred to herein as the "Excluded Assets") (the
"Assets") and Spinco will assume certain liabilities associated with the
Assets, the Marine Subsidiaries and GulfMark (the "Contribution") pursuant to
an Agreement and Plan of Distribution between GulfMark, Spinco and EVI in
substantially the form attached hereto as Exhibit A (the "Distribution
Agreement");
WHEREAS, as a condition to the Merger, GulfMark will distribute to its
stockholders prior to the Merger all of the outstanding stock of Spinco (the
"Distribution");
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)(B) of the Internal Revenue Code of 1986, as amended (the "Code"), and
the Contribution and Distribution qualify as transactions within the meaning of
Sections 368(a)(1)(D) and 355 of 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:
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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 Delaware ("DGCL"), at the Effective Time (as defined in Section
1.3), Sub shall be merged with and into GulfMark. As a result of the Merger,
the separate corporate existence of Sub shall cease and GulfMark 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 GulfMark shall vest in the Surviving Corporation, without
any transfer or assignment having occurred, and certain liabilities, debts and
duties of Sub and GulfMark shall attach to the Surviving Corporation, all in
accordance with the DGCL and subject to the provisions of the Distribution
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 or at such other time and
place and on such other date as EVI and GulfMark shall agree; provided that the
closing conditions set forth in Article VI 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 Delaware a certificate of merger in such
form as required by, and executed in accordance with, the relevant provisions
of the DGCL. 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 Delaware Secretary of State or at such later time (not to exceed 90 days
from the date the Certificate is filed) as is specified in the certificate of
merger pursuant to the mutual agreement of EVI and GulfMark.
1.4 EFFECTS OF THE MERGER. The Merger shall have the effects set
forth in the applicable provisions of the DGCL. 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 GulfMark and
Sub, the Surviving Corporation and its proper officers and directors, in the
name and on behalf of GulfMark 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 GulfMark or otherwise to take any and all such
action.
1.5 CERTIFICATE OF INCORPORATION; BYLAWS. The Certificate of
Incorporation of GulfMark, as amended by the amendment set forth in Exhibit B
attached hereto, shall be the
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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 DGCL. 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 DGCL.
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 action on the part of EVI, GulfMark, Sub or their stockholders:
(a) Subject to adjustment pursuant to Section 1.7(e)
hereof, each share of GulfMark Common Stock issued and outstanding
immediately prior to the Effective Time (the "Shares"), shall be
converted into the right to receive .6695 of a share of EVI Common
Stock (the "Exchange Ratio"); provided, however, that no fractional
shares of EVI Common Stock shall be issued and in lieu thereof, a cash
payment shall be made in accordance with Section 1.7(d) hereof.
Except as set forth in the preceding sentence with respect to cash in
lieu of fractional shares, no other consideration will be paid to
GulfMark or its stockholders.
(b) Each Share owned directly or indirectly by GulfMark
as treasury stock and each Share owned by Sub, EVI or any direct or
indirect wholly-owned subsidiary of EVI or of GulfMark immediately
prior to the Effective Time shall be canceled and extinguished without
any conversion thereof and no payment shall be made with respect
thereto.
(c) Each share of common stock, par value $1.00 per
share, 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 per share, of the
Surviving Corporation.
(d) No fractional shares of EVI Common Stock shall be
issued in the Merger. All fractional shares of EVI Common Stock that
a holder of Shares would otherwise be entitled to receive as a result
of the Merger shall be aggregated and if a fractional share of EVI
Common Stock results from such aggregation (i) such fractional share
of EVI Common Stock shall be disregarded and the shares of EVI Common
Stock issuable to such holder shall be rounded off to the nearest
whole share of EVI Common Stock if such fractional share of EVI Common
Stock represents less than one-half of one percent of the total shares
of EVI Common Stock such holder is entitled to receive in the Merger
and (ii) in all other cases, such holder shall be entitled to receive,
in lieu of a fractional
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share of EVI Common Stock, an amount in cash determined by multiplying
the average of the daily closing sale price per share of EVI Common
Stock on the New York Stock Exchange ("NYSE") for the ten trading days
immediately preceding the Effective Time of the Merger by the fraction
of a share of EVI Common Stock to which such holder would otherwise
have been entitled. No such cash in lieu of fractional shares of EVI
Common Stock shall be paid to any holder of fractional shares of EVI
Common Stock until Certificates (as defined in Section 1.8(c))
representing such shares of EVI Common Stock are surrendered and
exchanged in accordance with Section 1.8(c). The total amount of cash
to be received by the stockholders of GulfMark in lieu of fractional
shares of EVI Common Stock will not exceed one percent of the total
fair market value of the EVI Common Stock (as of the date on which the
Effective Time occurs) to be issued in the Merger.
The Exchange Ratio is based on (i) 3,338,852 shares of GulfMark Common Stock
being issued and outstanding immediately prior to the Effective Time. In the
event the number of shares of GulfMark Common Stock outstanding immediately
prior to the Effective Time is greater or less than 3,338,852, or the number of
shares of EVI Common Stock held by GulfMark is greater or less than 2,235,572,
the Exchange Ratio shall be adjusted to equal the number of shares of EVI
Common Stock held by GulfMark immediately prior to the Effective Time divided
by the number of shares of GulfMark 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 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 Shares pursuant
to Section 1.7. EVI or the Surviving Corporation shall timely make
available to the Exchange Agent any cash necessary to make payments in
lieu of fractional shares.
(c) 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 that
immediately prior to the Effective Time of the Merger represented
outstanding Shares (the "Certificates"), other than EVI, Sub and
GulfMark and any directly or indirectly wholly-owned subsidiary of
EVI, Sub or GulfMark, (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 and any cash
in lieu of a fractional share. Upon surrender of a Certificate for
cancellation to the Exchange Agent or to such other agent or agents as
may be appointed
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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 Shares theretofore represented by such
Certificate shall have been converted pursuant to Section 1.7 and any
cash payable in lieu of a fractional Share, 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 and cash, if any, in lieu of fractional
shares of EVI Common Stock into which the Shares theretofore
represented by such Certificate shall have been converted 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.
(d) Distributions with Respect to Unexchanged 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 no cash payment in lieu of
fractional shares shall be paid to any such holder pursuant to Section
1.7(d) 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) at the time of such
surrender, the amount of any cash payable in lieu of a fractional
share of EVI Common Stock to which such holder is entitled pursuant to
Section 1.7(d) and 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, and (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.
(e) No Further Ownership Rights in 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, shall be deemed to have been exchanged and paid in full
satisfaction of all
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rights pertaining to the 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 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.
(f) None of EVI, Sub, GulfMark, the Surviving Corporation
or their transfer agents shall be liable to a holder of the 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 Distribution 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
Distribution Agreement, and to vest the Surviving Corporation with full right,
title and possession to all assets, property, rights, privileges, powers and
franchises of GulfMark 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 GulfMark that:
(a) Organization and Compliance with Law. Each of EVI
and Sub is a corporation duly organized, validly existing and in good
standing under the laws of the state of Delaware and 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 GulfMark true and complete copies of EVI's
Certificate of Incorporation (the "EVI Certificate") and Sub's
Certificate of Incorporation and their respective bylaws as in
existence on the date hereof.
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(b) Capitalization.
(i) The authorized capital stock of EVI consists
of 40,000,000 shares of EVI Common Stock, par value $1.00 per
share, and 3,000,000 shares of preferred stock, par value
$1.00 per shares ("EVI Preferred Stock"). As of September 30,
1996, there were issued and outstanding 22,939,625 shares of
EVI Common Stock. As of October 8, 1996, 1,550,268 shares of
EVI Common Stock were reserved for issuance pursuant to EVI's
1981 Employee Stock Option Plan, 1992 Employee Stock Option
Plan, Non- Employee Director Stock Option Plan and restricted
stock plan for foreign key employees, of which 834,268 shares
of EVI Common Stock were reserved for issuance upon exercise
of outstanding options. At October 8, 1996, 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, par
value $1.00 per share, 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 DGCL, 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)
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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, 1993.
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,
1993, 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,
GulfMark 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, 1995, 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(f) of the
disclosure letter delivered by EVI to GulfMark 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(f) of the EVI Disclosure
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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 GulfMark 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, (E) reacquire any of the
stock issued to the GulfMark stockholders pursuant to the
Merger, (F) cause or permit the Surviving Corporation to
discontinue the historic business of GulfMark, or (G) acquire
Spinco or Spinco Assets.
(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 Prudential Securities Corporation, 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 GulfMark and Spinco and not by EVI or Sub.
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2.2 REPRESENTATIONS AND WARRANTIES OF GULFMARK AND SPINCO. Each
of GulfMark and Spinco, jointly and severally hereby represents and warrants to
EVI that:
(a) Organization. Each of GulfMark and Spinco is a
corporation duly organized, validly existing and in good standing
under the laws of the state of Delaware and Ercon Development Company,
a wholly owned subsidiary of GulfMark to be merged into GulfMark prior
to the Effective Time ("Ercon") is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Texas. Each of GulfMark, Spinco and Ercon has all requisite corporate
power and corporate authority and all necessary governmental
authorizations to own, lease and operate all of its properties and
assets and to carry on its business as now being conducted, except
where the failure to 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 GulfMark or Ercon after
giving effect to the Distribution or (ii) prevent or adversely affect
the ability of GulfMark and Spinco to perform and comply with their
respective obligations under this Agreement, the Distribution
Agreement or any other agreement to be executed and delivered in
connection with the transactions contemplated hereby or thereby (a
"GulfMark MAE"). Except as set forth in Section 2.2(a) of the
disclosure letter delivered by GulfMark to EVI on the date hereof (the
"GulfMark Disclosure Letter"), each of GulfMark, Ercon and Spinco is
duly qualified as a foreign corporation to do business, and is in good
standing, in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes
such qualification necessary, except in such jurisdictions where the
failure to be duly qualified does not and would not have a GulfMark
MAE. Each of GulfMark, Ercon and Spinco 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 GulfMark MAE. GulfMark has heretofore delivered to EVI true
and complete copies of GulfMark's Certificate of Incorporation (the
"GulfMark Certificate") and bylaws, Spinco's Certificate of
Incorporation and bylaws and Ercon's Articles of Incorporation and
bylaws as in existence on the date hereof.
(b) Capitalization.
(i) The authorized capital stock of GulfMark
consists of 10,000,000 shares of GulfMark Common Stock, par
value $1.00 per share and 500,000 shares of Preferred Stock,
par value $50.00 per share. As of September 30, 1996, there
were issued and outstanding 3,338,852 shares of GulfMark
Common Stock and no shares of GulfMark Common Stock were held
as treasury shares. There are no outstanding shares of
GulfMark Preferred Stock. A total of 390,833 shares of
GulfMark Common Stock have been reserved for issuance pursuant
to the stock option plans described in Section 2.2(b)(iii).
All issued and outstanding shares of GulfMark Common Stock are
validly issued, fully paid and nonassessable and no holder
thereof is entitled to preemptive rights. GulfMark 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
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stock, or any agreement or arrangement providing for
registration rights with respect to any capital stock or other
securities of GulfMark.
(ii) The authorized capital stock of Ercon
consists of 10,000 shares of Ercon Common Stock, par value
$1.00 per share. As of September 30, 1996, there were issued
and outstanding 10,000 shares of Ercon Common Stock and no
shares of Ercon Common Stock were held as treasury shares.
All issued and outstanding shares of Ercon Common Stock are
validly issued, fully paid and nonassessable and no holder
thereof is entitled to preemptive rights. Ercon is not a
party to, 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 Ercon. GulfMark owns all of the issued
and outstanding Common Stock of Ercon.
(iii) As of the date hereof, there are outstanding
options (the "GulfMark Options") to purchase an aggregate of
109,500 shares of GulfMark Common Stock under the 1987 Stock
Option Plan and the Amended and Restated 1993 Non-Employee
Director Stock Option Plan (collectively the "GulfMark
Plans"). All GulfMark Options will be transferred to Spinco's
Adjustment Plans prior to the Effective Time. As of the
Effective Time, there will be no options outstanding under the
GulfMark Plans. 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 GulfMark outstanding other than GulfMark Common Stock
issued pursuant to the exercise of GulfMark 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 GulfMark, or
contracts, understandings or arrangements to which GulfMark 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) GulfMark owns all of the issued and
outstanding Common Stock of Spinco.
(v) Section 2.2(b)(v) of the GulfMark Disclosure
Letter sets forth a list of all corporations, partnerships,
limited liability companies and other entities of which
GulfMark owns directly or indirectly, an equity interest (such
entities, excluding EVI and its subsidiaries referred to
herein as the "GulfMark Subsidiaries").
(c) Authorization and Validity of Agreement. Each of
GulfMark and Spinco has all requisite corporate power and authority to
enter into this Agreement, the Distribution Agreement and the other
agreements and instruments contemplated to be executed and delivered
in connection with the Merger and the Distribution (the Distribution
Agreement and such other agreements and instruments contemplated to be
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executed and delivered in connection with the Merger and the
Distribution being referred to as the "Other Agreements") and to
perform its obligations hereunder and thereunder. The execution and
delivery by GulfMark and Spinco 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 Distribution, to approval of this Agreement and the
Contribution and Distribution by the GulfMark stockholders as provided
for in Section 5.3). On or prior to the date hereof the Board of
Directors of GulfMark has determined to recommend approval of the
Merger and the Contribution and Distribution to the stockholders of
GulfMark, and such determination is in effect as of the date hereof.
This Agreement has been duly executed and delivered by GulfMark and
Spinco and is the valid and binding obligation of GulfMark and Spinco,
enforceable against them in accordance with its terms. The Other
Agreements, when executed and delivered by GulfMark and Spinco, as
applicable, will constitute valid and binding obligations of GulfMark
and Spinco, enforceable against them in accordance with their
respective terms.
(d) No Approvals or Notices Required; No Conflict with
Instruments to which GulfMark 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 GulfMark, Ercon Spinco or any of their subsidiaries under,
any provision of (i) the GulfMark Certificate or bylaws of GulfMark,
the Ercon Articles of Incorporation or bylaws of Ercon, the Spinco
Certificate of Incorporation or bylaws of Spinco or any provision of
the comparable organizational documents of their subsidiaries, (ii)
except as set forth in Section 2.2(d) of the GulfMark 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 GulfMark or Ercon, or their respective properties or
assets, (iii) except as set forth in Section 2.2(d) of the GulfMark
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 Spinco or any other GulfMark Subsidiary (other than
Ercon), 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 GulfMark, Ercon,
Spinco 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 GulfMark MAE. No consent, approval,
order or authorization of, or registration, declaration or filing
with, any court, administrative agency or commission or other
governmental authority or agency, domestic or foreign, including local
authorities (a "Governmental Entity"), is required by or with respect
to GulfMark, Ercon, Spinco or any of their subsidiaries in connection
with the execution and delivery of this
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Agreement by GulfMark, and Spinco or the consummation by GulfMark,
Ercon and Spinco of the transactions contemplated hereby, except for
(i) the filing of a pre-merger notification and report form by
GulfMark 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 a Certificate of Merger with the Delaware Secretary of
State and the Texas Secretary of State with respect to the merger of
Ercon into GulfMark and the filing of appropriate document(s) with the
relevant authority of other states in which each of Ercon and GulfMark
is qualified to do business, (iv) the filing of the Certificate of
Merger with the Delaware Secretary of State with respect to the Merger
as provided in the DGCL and appropriate documents with the relevant
authorities of other states in which each of GulfMark and Spinco is
qualified to do business and (v) such other consents, approvals,
orders, authorizations, registrations, declarations, filings and
notices as are set forth in Section 2.2(d) of the GulfMark Disclosure
Letter.
(e) Commission Filings; Financial Statements. GulfMark
has filed all reports, registration statements and other filings,
together with any amendments required to be made with respect thereto,
that they have 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 GulfMark with the Commission since
December 31, 1993 through the date of this Agreement, together with
any amendments thereto, are sometimes collectively referred to as the
"GulfMark Commission Filings." GulfMark has heretofore delivered to
EVI copies of the GulfMark Commission Filings. As of the respective
dates of their filing with the Commission, the GulfMark 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 GulfMark, all material contracts of GulfMark and its
subsidiaries have been included in the GulfMark'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 GulfMark 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
GulfMark 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, GulfMark has no liabilities,
absolute or contingent, that may reasonably be expected to have a
GulfMark MAE, that are not reflected in the GulfMark Commission
Filings,
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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 GulfMark
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 Distribution Agreement or as
disclosed in the GulfMark Commission Filings or set forth in Section
2.2(f) of the GulfMark Disclosure Letter, GulfMark 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 GulfMark MAE or any other material adverse change
in the financial condition, results of operations, assets or business
of GulfMark, taken as a whole, or (ii) to the knowledge of GulfMark,
any other condition, event or development that reasonably may be
expected to result in any such material adverse change or a GulfMark
MAE; (iii) any change by GulfMark or Ercon in its accounting methods,
principles or practices; (iv) any revaluation by GulfMark or Ercon 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 GulfMark or Ercon into any commitment or
transaction that would be material to GulfMark or Ercon; (vi) any
declaration, setting aside or payment of any dividends or
distributions in respect of the GulfMark 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 GulfMark
or Ercon; (viii) any increase in indebtedness of borrowed money other
than borrowing under existing credit facilities as disclosed in
Section 2.2(f) of the GulfMark Disclosure Letter; (ix) any granting of
a security interest or Lien on any property or assets of GulfMark or
Ercon, 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 GulfMark or Ercon or which
GulfMark or Ercon would be responsible.
(g) Litigation. Except as disclosed in the GulfMark
Commission Filings or as set forth in Section 2.2(g) of the GulfMark
Disclosure Letter, there are no claims, actions, suits,
investigations, inquiries or proceedings, ("Demands"), pending or, to
the knowledge of GulfMark, threatened against or affecting (i)
GulfMark or Ercon 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) Spinco or any GulfMark or Spinco 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 GulfMark MAE.
None of GulfMark, Ercon
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or Spinco 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 GulfMark Disclosure
Letter provides a description of each of the following which
is sponsored, maintained or contributed to by GulfMark or any
corporation, trade, business or entity under common control
with GulfMark within the meaning of Section 414(b), (c), (m)
or (o) of the Code or Section 4001 of ERISA (a "GulfMark 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 GulfMark
or Ercon 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 GulfMark Disclosure Letter,
(C) None of GulfMark or any GulfMark
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);
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(D) 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);
(E) 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 GulfMark or Spinco, threatened
against, or with respect to, any of the Plans or
Benefit Programs or Agreements or their assets;
(F) No act, omission or transaction has
occurred which would result in imposition on GulfMark
or any GulfMark 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
(G) 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 GulfMark or any GulfMark 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
GulfMark Disclosure Letter, termination of employment of any
employee of GulfMark or Ercon 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
GulfMark Disclosure Letter, none of the employees of GulfMark
or Ercon are subject to union or collective bargaining
agreements.
(vi) None of GulfMark or any of the GulfMark 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.
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(i) Taxes.
(i) Except as set forth in Section 2.2(i) of the
GulfMark 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 GulfMark or any GulfMark
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 GulfMark 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 GulfMark or
any such GulfMark 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 GulfMark or otherwise result in a GulfMark MAE.
All income Tax returns of or with respect to GulfMark or any
GulfMark 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 December 31, 1991. There is no material
claim against GulfMark or any GulfMark 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 GulfMark or any GulfMark
Subsidiary that has not been adequately provided for in
reserves established by GulfMark or such GulfMark Subsidiary.
The total amounts set up as liabilities for current and
deferred Taxes in the consolidated financial statements
included in the GulfMark 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
GulfMark or any GulfMark Subsidiary through the periods
covered thereby. GulfMark 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 GulfMark 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 GulfMark or any GulfMark Subsidiary. Except
for statutory Liens for current Taxes not yet due, no Liens
for Taxes exist upon the assets of GulfMark. Except as set
forth in paragraph 2.2(i) of the GulfMark Disclosure Letter,
none of GulfMark or any GulfMark Subsidiary has filed
consolidated income Tax Returns with any corporation, other
than consolidated federal, state or foreign income Tax returns
by GulfMark for any taxable period which is not now closed by
the applicable statute of limitations. None of GulfMark or
any GulfMark Subsidiary has any deferred intercompany gain as
defined in Treasury Regulations Section 1.1502-13.
(ii) As of the Closing Date, to GulfMark's
knowledge, there is no plan or intention by the stockholders
of GulfMark to sell, exchange or otherwise dispose of a number
of shares of EVI received in the Merger that would reduce
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the GulfMark 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
Shares as of the same date. For purposes of this
representation, Shares exchanged for cash or other property or
exchanged in lieu of fractional shares of EVI will be treated
as outstanding Shares on the date of the Merger. Moreover,
the shares of EVI held by the GulfMark stockholders and
otherwise sold, redeemed or disposed of prior or subsequent to
the Merger will be considered in making this representation.
(iii) GulfMark is not an investment company as
defined in Section 368(a)(2)(F)(iii) and (iv) of the Code.
(iv) GulfMark 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.
(v) There is no intercorporate indebtedness
existing between GulfMark and EVI that was issued, acquired or
will be settled at a discount.
(j) Environmental Matters. Except as set forth in
Section 2.2(j) of the GulfMark Disclosure Letter, (i) the properties,
operations and activities of GulfMark and each of its subsidiaries
complies in all material respects with all applicable Environmental
Laws; (ii) none of GulfMark or any of its GulfMark Subsidiaries is
subject to any existing, pending or, to the knowledge of GulfMark,
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 GulfMark MAE, all notices,
permits, licenses, or similar authorizations, if any, required to be
obtained or filed by GulfMark or Ercon under any Environmental Law in
connection with any aspect of the business of GulfMark, Ercon or any
GulfMark 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 Distribution, and GulfMark and
Ercon is in compliance with the terms and conditions of all such
notices, permits, licenses and similar authorizations; (iv) GulfMark
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 GulfMark's
knowledge, there are no physical or environmental conditions existing
on any property currently owned or previously owned by GulfMark 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 GulfMark's
knowledge, since the effective date of the relevant requirements of
applicable Environmental Laws, all hazardous substances or solid
wastes generated by GulfMark 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
GulfMark, such carriers and facilities have been and are operating
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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. GulfMark 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 GulfMark Disclosure Letter, GulfMark 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 Contribution, the Distribution or the transactions
contemplated by this Agreement or the Other Agreements in the event of
the subsequent termination of their employment.
(m) Voting Requirements. The affirmative vote of the
holders of a majority of the outstanding shares of GulfMark Common
Stock is the only vote of the holders of any class or series of the
capital stock of GulfMark necessary to approve this Agreement, the
Merger, the Contribution, the Distribution and the transactions
contemplated hereby
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and by the Other Agreements in order to comply with the DGCL,
GulfMark's Certificate of Incorporation and Bylaws and the rules and
regulations of The NASDAQ Stock Market.
(n) Brokers. Except for Xxxxxxxxx & Company, Inc., whose
fees shall be paid by GulfMark, no broker, investment banker, or other
Person acting on behalf of GulfMark 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 GulfMark shall consist of (1)
2,235,572 shares of EVI Common Stock, which shall be held free
and clear of all Liens, (2) 200 shares of Common Stock of
AIOC, which represents all of the ownership interest of
GulfMark and the GulfMark Subsidiaries in AIOC, (3) all assets
used in connection with the business and operations previously
conducted by Ercon, (4) all tax, financial, accounting and
other general corporate records, including records relating to
all past operations and subsidiaries (including partnerships
and joint ventures) other than those constituting a part of
the Assets, (5) GulfMark's accounts receivable (billed and
unbilled) relating to the business conducted by Ercon, (6)
cash in the amount of $300,000 and (7) cash in the amount of
the transactional expenses of GulfMark to be paid by GulfMark
relating to the Contribution, the Distribution and the Merger;
(ii) the liabilities of GulfMark shall consist
only of certain expenses related to the Merger and the
Distribution which shall have been fully reserved for in the
Net Working Capital, and GulfMark's accounts payable relating
to the business conducted by Ercon, which shall have been
fully reserved for in the Net Working Capital;
(iii) all obligations and liabilities (fixed or
contingent, known or unknown) of GulfMark shall have been
assumed by Spinco other than liabilities described in clause
(ii) and the obligation to perform in the future under
contracts relating to Ercon that will be identified on
schedules to the Distribution Agreement; and
(iv) the Net Working Capital of GulfMark shall
equal $300,000. "Net Working Capital" shall mean the current
assets of GulfMark excluding inventory, less the liabilities
of GulfMark as reflected on the balance sheet of GulfMark as
of the Effective Time on an unconsolidated basis. Current
assets and liabilities shall have the meaning attributable to
them by generally accepted account principles as applied
historically by GulfMark, provided, however, for purposes of
the definition of Net Working Capital, (i) accounts receivable
shall be net of reserves for bad debt and doubtful accounts,
(ii) the stock of AIOC shall not be considered a current asset
and (iii) liabilities shall mean the full undiscounted amount
of any liabilities of GulfMark and Ercon, including any
liabilities that will accrue as a result of the Merger, the
Contribution or the Distribution, whether or
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not such liabilities would be required to be reflected as a
liability by generally accepted accounting principles.
(p) Compliance with Laws. GulfMark, Spinco, Ercon 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
GulfMark MAE (the "GulfMark 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 GulfMark nor Spinco know of any reason why any of
such permits, licenses, variances, exemptions, orders, franchises and
approvals would be subject to cancellation. GulfMark, Spinco, Ercon,
and each of their respective subsidiaries are in compliance with the
terms of the GulfMark Permits except where the failure to so comply
could not reasonably be expected to have a GulfMark MAE. None of
GulfMark, Spinco, Ercon, nor 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 GulfMark, Spinco, Ercon 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 GulfMark MAE.
(q) Contracts.
(i) Section 2.2(q) to the GulfMark Disclosure
Letter contains a complete list of the following contracts,
agreements, arrangements and commitments: (i) all employment
or consulting contracts or agreements to which GulfMark or
Ercon is contractually obligated; (ii) current leases, sales
contracts and other agreements with respect to any property,
real or personal, of GulfMark or Ercon or to which GulfMark or
Ercon is contractually obligated; (iii) contracts or
commitments for capital expenditures or acquisitions in excess
of $30,000 to which GulfMark or Ercon 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 GulfMark,
Ercon, Spinco 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
GulfMark as of the date hereof that has not been filed as an
exhibit to the GulfMark's Annual Report on Form 10-K for the
year ended December 31, 1995, filed by it with the Commission
or any report filed with the Commission under the Exchange Act
since such date; (vi) all outstanding proposals to which Ercon
is subject to as of November 21, 1996; (vii) all corporations,
partnerships, limited liability companies and other entities
which GulfMark has owed, directly or indirectly, an equity
interest since 1969, in which the officers of GulfMark are
aware after reasonable investigation, (viii) all material
indemnification and guaranty or other similar obligations to
which GulfMark or Ercon is bound and which the officers of
GulfMark or Ercon, after reasonable investigation, are aware,
(ix) any
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outstanding bonds, letters of credit posted or guaranteed by
GulfMark or Ercon with respect to any Person, (x) any
covenants not to compete or other obligations affecting
GulfMark or Ercon that would restrict the Surviving
Corporation or EVI and its affiliates from engaging in any
business or activity which the officers of GulfMark or Ercon
are aware, after reasonable investigation and (xi) contracts,
agreements, arrangements or commitments, other than the
foregoing that could reasonably be considered to be material
to GulfMark or Ercon.
(ii) True and correct copies of all the
instruments described in Section 2.2(q) of the GulfMark
Disclosure Letter have been furnished or made a available to
EVI. Except as noted in the GulfMark Disclosure Letter, all
such agreements, arrangements or commitments are valid and
subsisting and each of GulfMark, Ercon, Spinco 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 GulfMark, Ercon, Spinco or
their respective subsidiaries or, to the knowledge of
GulfMark, any other party thereto has occurred that could
impair the ability of each of GulfMark, Ercon, Spinco 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 GulfMark, Ercon,
Spinco or any of their 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
GulfMark, Ercon, Spinco or any of their subsidiaries. Neither
GulfMark nor Ercon has any information that might reasonably
indicate that any of the material customers or suppliers to
Ercon intend to cease purchasing from, selling to or dealing
with it, nor has any information been brought to the attention
of GulfMark or Ercon that might reasonably lead either to
believe any such customer or supplier intends to alter in any
material respect the amount of such purchases, sales or the
extent of dealings with GulfMark or Ercon or would alter in
any significant respect such purchases, sales or dealings in
the event of the consummation of the transactions contemplated
hereby.
(r) Title to Property.
(i) At the Effective Time, GulfMark will have
good and marketable title to, or valid leasehold interests in,
all its properties and assets. GulfMark has good and valid
title to 2,235,572 shares of EVI Common Stock, free and clear
of all Liens. GulfMark has good and valid title to 200 shares
of AIOC Common Stock, free and clear of all Liens.
(ii) Each of GulfMark and Ercon 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 GulfMark and
Ercon enjoys peaceful and undisturbed possession under all
such leases.
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(s) Insurance Policies. Section 2.2(s) of the GulfMark
Disclosure Letter contains a correct and complete description of all
insurance policies of GulfMark covering GulfMark, Ercon and their
subsidiaries, any employees or other agents of GulfMark and its
subsidiaries or any assets of GulfMark, Ercon and their 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 GulfMark and in
the business in which GulfMark 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 GulfMark or any of its subsidiaries have been recorded in
GulfMark'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 GulfMark Disclosure
Letter sets forth all existing loans, advances or other extensions of
credit (excluding accounts receivable arising in the ordinary course
of business) by GulfMark or Ercon subsidiaries to any party other than
intercompany loans, advances, guaranties or extensions of credit. All
items listed in Section 2.2(t) of the GulfMark Disclosure Letter will
be repaid in full, or assumed by Spinco, prior to the Effective Time
of the Merger. All intercompany obligations and loans between
GulfMark and its subsidiaries, including Spinco, will be extinguished
prior to the Distribution without any ongoing liability to GulfMark or
Spinco with respect thereto, except as set forth herein or in the
Distribution Agreement.
(u) No Fraudulent Transfer. GulfMark 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 Distribution and the Merger, (i) the fair value of GulfMark's
assets and Spinco's assets after the Distribution at a fair valuation
exceeds its debts and liabilities, subordinated, contingent or
otherwise, (ii) the present fair saleable value of GulfMark's and
Spinco's property is greater than the amount that will be required to
pay its probable liability on its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and liabilities
become absolute and mature, (iii) GulfMark prior to the Distribution
and Spinco after the Distribution 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)
GulfMark before the Distribution and Spinco after the Distribution
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 GulfMark for inclusion or incorporation
by reference in (i) the Registration Statement
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(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 GulfMark's stockholders and at the time of the GulfMark
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
GulfMark and Spinco and not by EVI or Sub.
ARTICLE III
COVENANTS OF GULFMARK
3.1 CONDUCT OF BUSINESS BY GULFMARK PENDING THE MERGER. GulfMark
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 Distribution Agreement or set forth in
Section 3.1 of the GulfMark Disclosure Letter:
(a) the business of GulfMark, including that of Ercon,
and the GulfMark Subsidiaries shall be conducted only in, and GulfMark
and the GulfMark Subsidiaries shall not take any action except in, the
ordinary course of business and consistent with past practice;
provided, however, that GulfMark shall cause Ercon to be merged into
it prior to the Effective Time;
(b) GulfMark shall not directly or indirectly do any of
the following: (i) issue, sell, pledge, dispose of or encumber any
capital stock of GulfMark except upon the exercise of GulfMark
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) GulfMark 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;
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(d) GulfMark shall not enter into any contract regarding
the business of Ercon having a term greater than 120 days or involving
an amount in excess of $50,000 or commit to do the same provided, it
is understood that EVI shall send a representative to Ercon's weekly
sales meetings to approve or reject pending proposals and contracts.
If no EVI representative attends the weekly meeting to make such
decisions, Ercon shall forward the weekly proposals listing to the EVI
representative; unless EVI objects in writing, proposals and contracts
shall be deemed approved by EVI two (2) business days after receipt of
the weekly proposals listing;
(e) GulfMark 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 unless by the terms of such agreement
or obligation such agreement or obligation will be assumed by Spinco
as of the Distribution and GulfMark will have no further obligations
with respect thereto;
(f) GulfMark shall not pledge or encumber any of the
assets to be held by GulfMark following the Distribution;
(g) GulfMark shall not enter into any employment or
consulting contracts;
(h) GulfMark shall not 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)(i), (ii) or (x)
of the GulfMark Disclosure Letter.
(i) GulfMark shall not sell, lease, mortgage, pledge,
xxxxx x Xxxx on or otherwise encumber or otherwise dispose of any of
GulfMark's or Ercon's properties or assets, except sales of inventory
in the ordinary course of business consistent with past practice;
(j) Neither GulfMark nor Ercon 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 GulfMark
or Ercon, 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 GulfMark and Ercon shall
be released in connection with the Distribution, or make or permit to
remain outstanding any loans, advances or capital contributions to, or
investments in, any other Person, other than to GulfMark or any direct
or indirect wholly owned subsidiary of GulfMark;
(k) GulfMark shall not make any election relating to
Taxes;.
(l) Neither GulfMark nor Ercon shall not change any
accounting principle used by it or applicable to Ercon;
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(m) GulfMark shall use its reasonable efforts (i) to
preserve intact the business organization of GulfMark and Ercon, (ii)
to maintain in effect any material authorizations or similar rights of
GulfMark or Ercon, (iii) to preserve the goodwill of those having
material business relationships with it; (iv) to maintain and keep
each of GulfMark's and Ercon'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 and Ercon;
(n) GulfMark shall, and shall cause the GulfMark
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 GulfMark MAE, and except for such obligations as GulfMark
in good faith may dispute;
(o) GulfMark shall cause there to exist immediately prior
to the Effective Time Net Working Capital of not less than $300,000;
(p) Neither GulfMark nor Ercon 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 GulfMark MAE, or (ii) in consultation and
cooperation with EVI, and, with respect to any such settlement, with
the prior written consent of EVI;
(q) GulfMark shall cause the Distribution Agreement to be
executed and delivered by GulfMark and Spinco and the Contribution and
Distribution to be effected prior to the Merger immediately prior to
the Effective Time; and
(r) GulfMark shall not authorize any of, or commit or
agree to take any of, or permit any GulfMark 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 GulfMark 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. GulfMark 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 GulfMark and the GulfMark Subsidiaries, taken as a
whole; or cause a GulfMark MAE.
3.2 NET WORKING CAPITAL REQUIREMENTS. GulfMark covenants that as
of the Effective Time it shall have Net Working Capital equal to $300,000. Net
Working Capital shall have the meaning set forth in Section 2.2(o) of this
Agreement. Spinco and GulfMark covenant and agree that they will adjust the
Net Working Capital 90 days after the Effective Date as follows ("Adjustment
Date");
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(a) to the extent there exists on the Adjustment Date any
uncollected accounts receivable (including uncollected unbilled
accounts receivable) or notes receivable which were counted in the
calculation of Net Working Capital as of the Effective Date
("Uncollected Receivables"), Spinco shall purchase from GulfMark such
Uncollected Receivables for the face amounts thereof and GulfMark
shall assign such Uncollected Receivables to Spinco without recourse;
(b) on the Adjustment Date after any purchase of
Uncollected Receivables, if it is determined that as of the Effective
Time Net Working Capital exceeded $300,000, GulfMark shall remit any
amounts in excess of $300,000 to Spinco in cash;
(c) on the Adjustment Date, after any purchase of
Uncollected Receivables, it is determined that Net Working Capital was
less than $300,000 at the Effective Time, Spinco shall remit to
GulfMark an amount equal to the difference between $300,000 and the
amount of Net Working Capital as the Effective Time (after
consideration of purchases of Uncollected Receivables);
(d) the provisions of this Section 3.2 shall not affect
Spinco's obligations under the Distribution Agreement to assume and
indemnify EVI as set forth therein.
3.3 AFFILIATES' AGREEMENTS. Prior to the Closing Date, GulfMark
shall deliver to EVI a letter identifying all Persons that are, at the time
this Agreement is submitted for approval to the stockholders of GulfMark,
"affiliates" of GulfMark for purposes of Rule 145 under the Securities Act.
GulfMark shall use its reasonable efforts to cause each such Person to deliver
to EVI on or prior to the Closing Date a written agreement confirming such
Person's obligations under Rule 145.
ARTICLE IV
COVENANTS OF EVI PRIOR TO THE EFFECTIVE TIME
4.1 CONDUCT OF BUSINESS BY EVI PENDING THE MERGER. EVI covenants
and agrees that, from the date of this Agreement until the Effective Time,
unless GulfMark shall otherwise agree in writing or as otherwise expressly
contemplated by this Agreement, it will not take any action that would, or that
reasonably could be expect 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.
4.2 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.
4.3 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 New York Stock Exchange, subject to official notice of
issuance, prior to the Closing Date.
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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 GulfMark shall prepare and file with the Commission preliminary proxy
materials that shall constitute the Proxy Statement of EVI and GulfMark 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 GulfMark 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 GulfMark 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 GulfMark with respect to
such matters, the Proxy Statement shall contain a statement that the Board of
Directors of GulfMark recommended that the stockholders of GulfMark approve and
adopt the Merger and this Agreement.
5.2 ACCOUNTANTS LETTERS.
(a) GulfMark shall use its reasonable efforts to cause
Xxxxxx Xxxxxxxx LLP to deliver a letter 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.
(b) EVI shall use its reasonable efforts to cause Xxxxxx
Xxxxxxxx LLP to deliver a letter 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 GulfMark, in form and substance
reasonably satisfactory to GulfMark and customary in 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) GulfMark shall promptly take all action reasonably
necessary in accordance with 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
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Merger and this Agreement and the Distribution. Subject to the terms
and conditions set forth in Section 6.3 and the fiduciary obligations
of the Board of Directors of GulfMark with respect to such matters,
the Board of Directors of GulfMark (i) shall recommend at such meeting
that the stockholders of GulfMark vote to adopt and approve the Merger
and this Agreement and the Distribution, (ii) shall use its reasonable
efforts to solicit from stockholders of GulfMark 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 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 GulfMark 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, GulfMark 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. GulfMark shall give prompt
notice to EVI, and EVI shall give prompt notice to GulfMark, 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 GulfMark 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 and
accountants) incurred in connection with (i) the registration fees
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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 and (v) the printing and mailing of the
Registration Statement and the Proxy Statement shall be paid equally by EVI and
GulfMark; 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 GULFMARK'S EMPLOYEE BENEFITS.
(a) GulfMark shall take action prior to the Merger and
the Distribution to transfer the GulfMark Options to the Spinco
adjustment plans and then terminate the GulfMark Plans such that all
obligations with respect thereto shall be that of Spinco.
(b) Subject to the receipt of a favorable Internal
Revenue Service determination letter under Section 401(a) and 501(a)
of the Code with respect to GulfMark 401(k) Plan and resolution of any
outstanding issues regarding the GulfMark 401(k) Plan in a manner
satisfactory to EVI's counsel, EVI will cause the GulfMark 401(k) Plan
to be merged into an EVI plan qualified under Section 401(a) and
501(a) of the Code ("EVI Plan"). Spinco shall be responsible for and
perform any and all obligations relating to the (i) filing of the
GulfMark 401(k) Plan for a determination letter under Section 401(a)
and 501(a) of the Code and (ii) resolution of any issues regarding the
GulfMark 401(k) Plan, both to the satisfaction of EVI's counsel, so
that EVI will cause the GulfMark 401(k) Plan to be merged into the EVI
Plan. GulfMark and EVI, upon being satisfied with the filings and
documentation prepared by Spinco in satisfaction of obligations (i)
and (ii) above, shall execute and deliver such filings and documents
as required to effect the merger of the GulfMark 401(k) Plan and the
EVI Plan. All reasonable costs, including attorneys fees, filing
fees, transfer fees, settlement payments and other expenses, not
otherwise satisfied by Spinco as stated herein, relating to the
continuation, qualification and merger of the GulfMark 401(k) Plan
shall be paid by Spinco. Once the GulfMark 401(k) Plan is merged into
an EVI Plan, Spinco shall not be responsible for liabilities relating
to the GulfMark 401(k) Plan occurring after the merging of such plans.
(c) GulfMark shall transfer to Spinco all employees of
GulfMark who are not directly associated with the business conducted
by Ercon without any liability to the Surviving Corporation. Spinco
shall be responsible for all severance and other obligations with
respect to such terminated employees, if any.
(d) Prior to the Effective Time, Spinco shall file a
registration statement on Form S-8 (or other appropriate form) with
respect to the shares of Spinco Common Stock subject to the adjusted
GulfMark options, and shall use its best efforts to maintain the
effectiveness of such registration statement (and maintain the current
status of any prospectus contained therein) for so long as any of the
adjusted GulfMark options remain outstanding.
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ARTICLE VI
CONDITIONS
6.1 CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE MERGER.
The respective obligations of each party to effect the Merger shall be subject
to the fulfillment at or prior to the Closing Date of the following conditions:
(a) Ercon shall have been merged into GulfMark.
(b) This Agreement and the Merger (and the Contribution
and the Distribution in the case of GulfMark) shall have been approved
and adopted by the requisite vote of the stockholders of GulfMark and
EVI, as may be required by law, by the rules of The Nasdaq Stock
Market and the New York Stock Exchange and by any applicable
provisions of their respective charters or bylaws;
(c) The waiting period (and any extension thereof)
applicable to the consummation of the Merger under the HSR Act shall
have expired or been terminated;
(d) 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 Contribution, Distribution and Merger;
(e) The Registration Statement shall be effective on the
Closing Date, and all post-effective amendments 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;
(f) 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 GulfMark MAE or EVI MAE;
(g) The shares of EVI Common Stock issuable upon
consummation of the Merger shall have been approved for listing on the
New York Stock Exchange, subject to official notice of issuance; and
(h) All approvals and consents of third Persons (i) the
granting of which is necessary for the consummation of the Merger, the
Distribution or the transactions contemplated in connection therewith
and (ii) the non-receipt of which would have a GulfMark MAE or an EVI
MAE.
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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 GulfMark
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 GulfMark 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 executive vice
president of GulfMark shall have been delivered to EVI;
(b) There shall not have occurred or exist any fact or
condition that would reasonably result in a GulfMark MAE or would
constitute a material fixed or contingent liability to GulfMark, and
EVI shall have received a certificate signed by the executive vice
president of GulfMark dated the Closing Date to such effect;
(c) The Board of Directors of EVI shall have received
from Prudential Securities Corporation, 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 received 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) GulfMark shall have received, and furnished written
copies of EVI of, the GulfMark affiliates' agreements pursuant to
Section 3.3;
(e) EVI shall have received from Xxxxxx & Xxxxxxxx P.C.,
counsel to GulfMark, an opinion dated the Closing Date covering
customary matters relating to the Agreement, the Distribution
Agreement, the Merger, the Contribution and the Distribution;
(f) 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 GulfMark 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)(B) of the Code,
(ii) the Distribution will not result in any gain or loss to GulfMark
under the Code, (iii) EVI, Sub and GulfMark will each be a party to
that reorganization within the meaning of Section 368(b) of the Code,
(iv) EVI, Sub and GulfMark shall not recognize any gain or loss for
U.S. federal or state income tax purposes as a result of the Merger or
the Distribution and (v) GulfMark and Spinco shall not recognize any
gain or loss for U.S. federal or state income tax purposes as a result
of the Contribution or Distribution, and such opinion shall be
confirmed at the Closing;
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(g) Spinco shall have executed and delivered to GulfMark
and EVI the Distribution Agreement in form and substance, including
schedules, acceptable to EVI;
(h) The conveyances and assumptions under the
Distribution Agreement shall have occurred;
(i) The Distribution under the Distribution Agreement
shall have occurred; and
(j) GulfMark shall have delivered to EVI a pro forma
balance sheet after giving effect to the Distribution reflecting Net
Working Capital in an amount of not less than $300,000.
6.3 ADDITIONAL CONDITIONS TO OBLIGATIONS OF GULFMARK. The
obligation of GulfMark to effect the Merger is, at the option of GulfMark, 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 GulfMark;
(b) The Board of Directors of GulfMark shall have
received from Xxxxxxxxx & Company, Inc., financial advisor to
GulfMark, a written opinion, satisfactory in form and substance to the
Board of Directors of GulfMark, to the effect that the exchange ratio
for the Merger is fair to the stockholders of GulfMark 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 GulfMark
and EVI and not subsequently withdrawn;
(c) GulfMark 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;
(d) GulfMark shall have received from Xxxxxx Xxxxxxxx
LLP, a written opinion, in form and substance satisfactory to
GulfMark, dated as of the date that the Proxy Statement is first
mailed to stockholders of GulfMark 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)(B) of the Code;
(ii) the Distribution will not result in any gain or loss to GulfMark
under the Code, (iii) EVI, Sub and GulfMark will each be a party to
that reorganization within the meaning of Section 368(b) of the Code,
(iv) EVI, Sub and GulfMark shall not recognize any gain or loss for
U.S. federal or state
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income tax purposes as a result of the Merger or the Distribution, and
(v) GulfMark and Spinco shall not recognize any gain or loss for U.S.
federal or state income tax purposes as a result of the Contribution
or Distribution, and such opinion shall be confirmed at the Closing;
(e) The Contribution under the Distribution Agreement
shall have occurred; and
(f) The Distribution under the Distribution 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 GulfMark:
(a) by mutual written consent of EVI and GulfMark;
(b) by either EVI or GulfMark if (i) the Merger has not
been consummated on or before March 31, 1997 (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 GulfMark shall not approve the Contribution, the
Distribution or the Merger at the GulfMark 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 GulfMark or EVI determines
that such termination is appropriate in complying with its fiduciary
obligations.
(c) by GulfMark 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
GulfMark 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 GulfMark 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
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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 GulfMark or shall have resolved to
do any of the foregoing.
(d) by EVI if (i) GulfMark 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 GulfMark 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 GulfMark 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 GulfMark 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 GulfMark MAE assuming
the effectiveness of the Merger or (iii) the Board of Directors of
GulfMark 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 GulfMark 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 GulfMark, except (i) with respect to this Section 7.2,
Section 5.7 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 GulfMark, this Agreement may be amended only as may be
permitted by applicable provisions of the DGCL. 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 Spinco 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. GulfMark 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, and shall not
issue any such press release or make any such
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public statement prior to such consultation, except as may be required by law
or applicable stock exchange policy.
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. Except as set forth in this
Agreement, this Agreement shall not be assignable by the parties hereto.
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 GulfMark or Spinco:
GulfMark International, Inc.
0 Xxxx Xxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
with a copy to: Xxxxxx & Xxxxxxxx, P.C.
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attn: W. Xxxxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
if to EVI or Sub: Energy Ventures, 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.
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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 Spinco and one to be appointed by
EVI within fourteen days following the submission of the claim to the parties
hereto and the third to be appointed by the two so appointed within five days.
Should either party refuse or neglect to join in the timely appointment of the
arbitrators, the other party shall be entitled to select both arbitrators.
Should the two arbitrators fail timely to appoint a third arbitrator, either
party may apply to the Chief Judge of the United States District Court for the
Southern District of Texas to make such appointment. The arbitrators shall
have ninety days after the selection of the third arbitrator within which to
allow discovery, hear evidence and issue their decision or award and shall in
good faith attempt to comply with such time limits; provided, however, if two
of the three arbitrators believe additional time is necessary to reach a
decision, they may notify the parties and extend the time to reach a decision
in thirty day increments, but in no event to exceed an additional ninety days.
Discovery of evidence shall be conducted expeditiously by the Parties, bearing
in mind the Parties desire to limit discovery and to expedite the decision or
award of the 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 may be brought with respect to any claim for
indemnification by an EVI Indemnified Party;
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(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 for indemnification hereunder by an EVI
Indemnified Party may be brought with respect to any claim for
indemnification by an EVI Indemnified Party, and further irrevocably
waive any claim that any such suit, action or proceeding brought in
any such court has been brought in an inconvenient forum;
(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 Agreement
entered into between EVI and GulfMark on October 21, 1996 (the "Confidentiality
Agreement") is 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 except as provided in Sections 5.6 and 5.7.
7.15 DISCLOSURE LETTERS.
(a) The GulfMark Disclosure Letter, executed by GulfMark
as of the date hereof, and delivered to EVI on the date hereof,
contains all disclosure required to be made by GulfMark under the
various terms and provisions of this Agreement. Each item
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of disclosure set forth in the GulfMark 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 GulfMark 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.
[signatures on the following page]
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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.
ENERGY VENTURES, INC.
By: /S/ XXXXX X. XXXXX
------------------------------------
Name: XXXXX X. XXXXX
Title: VICE PRESIDENT
GULFMARK ACQUISITION CO.
By: /S/ XXXXX X. XXXXX
------------------------------------
Name: XXXXX X. XXXXX
Title: VICE PRESIDENT
GULFMARK INTERNATIONAL, INC.
By: /S/ XXXXX X. XXXXXX
------------------------------------
Xxxxx X. Xxxxxx
Executive Vice President
NEW GULFMARK INTERNATIONAL, INC.
By: /S/ XXXXX X. XXXXXX
------------------------------------
Xxxxx X. Xxxxxx
Executive Vice President
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As permitted by Item 601(b)(2) of Regulation S-K, the Company has not
filed any schedules and exhibits with this Exhibit No. 2.2. Listed below is a
brief description of the omitted exhibits and schedules. The Company agrees to
furnish supplementally a copy of any of such omitted exhibits and schedules to
the Commission upon request.
Disclosure Schedules
--------------------
2.2(a) Organization, Good Standings and Compliance with Laws
2.2(b) List of GulfMark's Subsidiaries, Partnerships and Equity Investments
2.2(d) List of Consents and Approvals Needed
2.2(e) List of Material Liabilities
2.2(f) Subsequent Events of GulfMark
2.2(g) Litigation Involving GulfMark or its Subsidiaries
2.2(h) Employee Benefit Matters
2.2(i) Tax Matters
2.2(j) Environmental Matters
2.2(l) Employee Severance Payments
2.2(q) List of Contracts, Leases, Loan Agreements, Entities Owned Previously,
and Indemnification Obligations of GulfMark and Subsidiaries
2.2(s) Insurance of GulfMark
2.2(t) GulfMark or Subsidiaries Extensions of Credit
Exhibits
--------
A Form of Agreement and Plan of Distribution
B Amended and Restated Certificate of Incorporation of GulfMark
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