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EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
by and among
XLS HOLDING, INC.
EVI, INC.
and
GPXL, INC.
Dated: July 16, 1997
AS AMENDED ON AUGUST 25, 1997
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TABLE OF CONTENTS
Page
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ARTICLE 1
THE MERGER AND RELATED MATTERS . . . . . . . . . 1
1.1 Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Closing and Effective Time . . . . . . . . . . . . . . . . . . . . 2
1.3 Conversion of Stock . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.5 Cancellation of Treasury Stock . . . . . . . . . . . . . . . . . . 4
1.6 Closing of the Company Transfer Books . . . . . . . . . . . . . . 4
1.7 Net Equity Adjustment. . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . 6
2.1 Corporate Organization . . . . . . . . . . . . . . . . . . . . . . 6
2.2 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.3 Affiliates and Subsidiaries . . . . . . . . . . . . . . . . . . . 7
2.4 Effect of Agreement; Consents . . . . . . . . . . . . . . . . . . 8
2.5 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 9
2.6 Absence of Material Adverse Changes . . . . . . . . . . . . . . . 9
2.7 Compensation and Benefit Plans . . . . . . . . . . . . . . . . . . 10
2.8 Properties, Title and Related Matters . . . . . . . . . . . . . . 11
2.9 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . 12
2.10 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.11 Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.12 Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . 13
2.13 Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.14 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . 15
2.15 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . 15
2.16 Governmental Licenses and Permits . . . . . . . . . . . . . . . . 16
2.17 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.18 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.19 Warranties and Product Liability . . . . . . . . . . . . . . . . . 18
2.20 No Misleading Statements . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF THE SHAREHOLDERS . . . . . . . . . . . . 18
3.1 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.2 Power and Authority . . . . . . . . . . . . . . . . . . . . . . . 19
3.3 Execution and Delivery . . . . . . . . . . . . . . . . . . . . . . 19
3.4 Effect of Agreement . . . . . . . . . . . . . . . . . . . . . . . 19
3.5 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.6 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.7 Stock Ownership . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.8 Securities Law Matters . . . . . . . . . . . . . . . . . . . . . . 20
3.9 Indebtedness and Agreements . . . . . . . . . . . . . . . . . . . 21
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF EVI AND SUB . . . . . . 22
4.1 Corporate Organization . . . . . . . . . . . . . . . . . . . . . . 22
4.2 Due Authorization, Execution and Delivery; Effect of Agreement . . 22
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4.3 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.4 Authorization for EVI Common Stock . . . . . . . . . . . . . . . . 22
4.5 Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.6 SEC Documents . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.7 Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE 5
COVENANTS AND AGREEMENTS . . . . . . . . . . . 23
5.1 Conduct of Business Operations . . . . . . . . . . . . . . . . . . 23
5.2 Maintain Assets and Operations . . . . . . . . . . . . . . . . . . 25
5.3 Litigation and Claims . . . . . . . . . . . . . . . . . . . . . . 25
5.4 Access to Information . . . . . . . . . . . . . . . . . . . . . . 26
5.5 HSR Filing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.6 Reasonable Efforts; Notification . . . . . . . . . . . . . . . . . 27
5.7 No Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.8 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.9 Accounting Matters . . . . . . . . . . . . . . . . . . . . . . . . 28
5.10 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . 28
5.11 Discharge of Indebtedness . . . . . . . . . . . . . . . . . . . . 28
5.12 Shareholder Approval; Voting; Restriction on Disposition . . . . . 28
5.13 Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.14 Stockholder Agreements . . . . . . . . . . . . . . . . . . . . . . 29
5.15 [Intenionally Omitted] . . . . . . . . . . . . . . . . . . . . . . 30
5.16 New License Agreement . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE 6
REGISTRATION RIGHTS . . . . . . . . . . . . 30
6.1 Shelf Registration . . . . . . . . . . . . . . . . . . . . . . . . 30
6.2 Piggyback Rights . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.3 Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
6.4 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . 33
6.5 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.6 NYSE Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE 7
CONDITIONS TO EVI'S AND SUB'S OBLIGATIONS . . . . . . . 35
7.1 Accuracy of Representations and Warranties . . . . . . . . . . . . 35
7.2 Performance of Covenants and Agreements . . . . . . . . . . . . . 35
7.3 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.4 Governmental Approvals . . . . . . . . . . . . . . . . . . . . . . 35
7.5 Resignation of Directors . . . . . . . . . . . . . . . . . . . . . 35
7.6 Resolutions . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.7 Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.8 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . 35
7.9 Affiliate Letters . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE 8
CONDITIONS TO THE COMPANY'S OBLIGATIONS . . . . . . . 36
8.1 Accuracy of Representations and Warranties . . . . . . . . . . . . 36
8.2 Performance of Covenants and Agreements . . . . . . . . . . . . . 36
8.3 Governmental Approvals . . . . . . . . . . . . . . . . . . . . . . 36
8.4 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . 36
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ARTICLE 9
TERMINATION PRIOR TO CLOSING . . . . . . . . . . 36
9.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
9.2 Effect on Obligations . . . . . . . . . . . . . . . . . . . . . . 37
9.3 Payment of Hydril Expenses . . . . . . . . . . . . . . . . . . . . 37
ARTICLE 10
NATURE OF STATEMENTS AND SURVIVAL OF COVENANTS,
REPRESENTATIONS, WARRANTIES AND AGREEMENTS . . . . . . 37
ARTICLE 11
DEFINITIONS . . . . . . . . . . . . . . 38
ARTICLE 12
MISCELLANEOUS . . . . . . . . . . . . . . 43
12.1 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 43
12.2 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . 43
12.3 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . 43
12.4 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
12.5 Invalidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
12.6 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
12.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
12.8 Construction and References . . . . . . . . . . . . . . . . . . . 44
12.9 Modification and Waiver . . . . . . . . . . . . . . . . . . . . . 44
12.10 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
12.11 Governing Law; Interpretation . . . . . . . . . . . . . . . . . . 46
12.12 Rights Sound Only in Contract . . . . . . . . . . . . . . . . . . 46
LIST OF EXHIBITS
1.1 Restated Articles of Incorporation of the Company
1.2 Articles of Merger
5.16 License Agreement
7.8 Opinion of Counsel to the Company
8.4 Opinion of Counsel to EVI and Sub
LIST OF SCHEDULES
2.2(b) Shareholders of XLS Holding, Inc.
2.2(c) Outstanding Options, Warrants, Convertible Securities, Calls,
Rights, Commitments, Preemptive Rights, Agreements, Arrangements or
Understandings
2.3(a) Name and Description of each Subsidiary
2.4(b) Required Consents, Violations, Conflicts, etc.
2.4(c) Governmental Licenses, Franchises, Permits, etc. Subject to Loss
2.5(b)-1 Material Liabilities as of March 30, 1997 Not Reflected or Disclosed
in Financial Statements or Interim Financial Statements
2.5(b)-2 Accounts Receivable Not, as of March 30, 1997, Collected in Full or
Believed to be Collectible in Full
2.6 Adverse Material Changes Since March 30, 1997
2.7 List and Description of Compensation and Benefit Plans
2.8(a) Personal Property Owned by the Company with Book Value Greater than
$50,000
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2.8(b) Personal Property Leased with Book Value Greater than $50,000
2.8(c) Legal Description of Real Property Owned
2.8(d) Real Property Leased
2.9 Legal Proceedings
2.10 Insurance Policies
2.12(a) Material Contracts
2.12(b) Agreements by and between the Company and Hydril
2.12(c) Aggregate Outstanding Principal, as of March 30, 1997, of Loans,
Credit or Other Agreements
2.14 Intellectual Property
2.15 Environmental Matters
2.16 Governmental Licenses and Permits
2.17 Taxes
2.19 Warranties and Product Liability
3.1 Company Shareholder's Plan or Intention to Sell, Transfer, Reduce
Risk of Ownership or Dispose of shares of EVI Common Stock
3.5 Consents, Approvals, Authorizations, Exemptions and Filings Required
11 Formation Agreements of XLS Holding, Inc.
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement") dated as of July
16, 1997, as amended on August 25, 1997, by and among XLS Holding, Inc., a
Texas corporation (the "Company"), EVI, Inc., a Delaware corporation ("EVI"),
GPXL, Inc., a Texas corporation ("Sub"), Hydril Company, a Delaware corporation
("Hydril"), and the holders of the Class A Common Stock of the Company listed
on the signature pages hereto (the "Class A Shareholders").
W I T N E S S E T H:
WHEREAS, EVI is interested in acquiring the Company through a merger
of Sub with and into the Company pursuant to which the issued and outstanding
shares of Class A Common Stock and Class B Common Stock of the Company
(collectively, the "Common Stock") would be converted into EVI Common Stock, on
the terms and conditions set forth herein;
WHEREAS, the parties hereto wish to set forth the representations,
warranties, agreements and conditions under which a merger (the "Merger") of
Sub with and into the Company will occur; and
WHEREAS, capitalized terms used in this Agreement shall have the
meanings given to them in Article 11 hereof, unless defined elsewhere in this
Agreement;
NOW, THEREFORE, in consideration of the premises, the representations,
warranties and agreements herein contained and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto hereby agree as follows:
ARTICLE 1
THE MERGER AND RELATED MATTERS
1.1 Merger.
(a) Upon the terms and subject to the conditions of this
Agreement, Sub shall be merged with and into the Company in accordance with the
TBCA. The Company shall be the surviving corporation in the Merger (the
"Surviving Corporation"). The Surviving Corporation shall change its corporate
name to "GPXL, Inc.", continue its corporate existence under and be organized
under and be governed by the TBCA and possess all the rights and assets of the
Company and Sub and be subject to all of the liabilities and obligations of the
Company and Sub in accordance with the provisions of the TBCA.
(b) The Articles of Incorporation and the Bylaws of the
Company, as in effect immediately prior to the Effective Time, shall be the
Articles of Incorporation and Bylaws, respectively, of the Surviving
Corporation until thereafter amended, except that the Articles of Incorporation
of the Company shall be amended and restated as provided in the Restated
Articles of Incorporation attached hereto as Exhibit 1.1.
(c) The authorized and issued capital stock of the
Surviving Corporation shall consist of 1,000 shares of common stock, $1.00 par
value.
(d) The directors and officers of Sub immediately prior
to the Effective Time shall be the directors and officers of the Surviving
Corporation and will hold office from the Effective Time until their respective
successors are duly elected or appointed and qualified in
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the manner provided in the By-laws of the Surviving Corporation, or as
otherwise provided by law.
(e) The Merger shall have the effects set forth in the
TBCA. If at any time after the Effective Time, 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 the
Company and Sub, the Surviving Corporation and its proper officers and
directors, in the name and on behalf of the Company 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 the Company or otherwise to
take any and all such action.
1.2 Closing and Effective Time. Subject to the provisions of
Article 7 and Article 8 hereof, the closing (the "Closing") of the Merger shall
take place at 9:00 a.m., Houston time, on August 25, 1997, at the offices of
Fulbright & Xxxxxxxx L.L.P., 0000 XxXxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx, or if
any of the conditions set forth in Article 7 or Article 8 hereof have not been
satisfied, then as soon as practicable thereafter, or at such other time and
place or such other date as EVI and the Company shall agree (the "Effective
Date"). The Merger shall be effective when a properly executed Articles of
Merger in substantially the form attached as Exhibit 1.2 hereto (together with
any other documents required by law to effectuate the Merger) shall have been
filed with the Secretary of State of the State of Texas in accordance with the
provisions of the TBCA, which filing shall be made as soon as practical on or
after the Effective Date after the conditions set forth in Articles 7 and 8
have been satisfied or waived.
1.3 Conversion of Stock.
(a) Except as provided in this Section 1.3 or in Section
1.5 hereof, at the Effective Time, and subject to the post-Closing adjustments
provided in Section 1.7, by virtue of the Merger and without any action on the
part of any holder of any shares of Common Stock or any holder of any shares of
Sub Common Stock, each share of Common Stock outstanding immediately prior to
the Effective Time shall be converted into the right to receive, upon the
surrender of the certificates formerly representing such shares pursuant to
Section 1.4 hereof, a number of shares of EVI Common Stock for each share of
Common Stock determined as follows (the number of shares of EVI Common Stock
issuable in exchange for a share of Common Stock in the Merger is referred to
herein as the "Common Stock Conversion Rate" with respect to any such shares):
(i) if the average closing sales price of a share
of EVI Common Stock as reported by the NYSE for the twenty trading
days immediately preceding the Effective Date (the "Market Price") is
equal to or greater than $32.50 but is less than or equal to $37.50,
the Common Stock Conversion Rate shall be 120 (the "Base Common Stock
Conversion Rate");
(ii) if the Market Price is greater than $37.50,
the Common Stock Conversion Rate shall be the quotient of (x)
$45,000,000 divided by (y) the product of the Market Price multiplied
by 10,000 (such quotient to be carried out to the fifth decimal
place); and
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(iii) if the Market Price is less than $32.50, the
Common Stock Conversion Rate shall be the quotient of (x) $39,000,000
divided by (y) the product of the Market Price multiplied by 10,000
(such quotient to be carried out to the fifth decimal place).
The number of shares of EVI Common Stock issued pursuant to this Section 1.3 is
herein called the "Consideration".
(b) No fractional shares of EVI Common Stock shall be
issued to any holder of Common Stock in the Merger. To the extent the
application of the Common Stock Conversion Rate to all shares of Class A Common
Stock and Class B Common Stock held by a shareholder of the Company (a "Company
Shareholder", and the holders of all of the Common Stock of the Company
collectively referred to as the "Company Shareholders") would result in a
fractional number of shares of EVI Common Stock being issued to such holder in
the Merger, the number of shares of EVI Common Stock issuable to such holder in
respect of all such shares in the Merger shall be rounded up to the next whole
number of shares of EVI Common Stock.
(c) Each share of Sub Common Stock outstanding
immediately prior to the Effective Time shall be converted into one share of
stock in the Surviving Corporation.
(d) As of and after the Effective Time, no holder of any
certificate that immediately prior to the Effective Time represented shares of
Common Stock shall have any rights as a holder of Common Stock other than to
receive the Consideration.
(e) The Common Stock Conversion Rate is based on the
assumption that 10,000 shares of Common Stock will be issued and outstanding
immediately prior to the Effective Time and that there will be no options,
warrants or other rights to acquire shares of Common Stock outstanding as of
the Effective Time. To the extent there are more than 10,000 shares of Common
Stock issued and outstanding immediately prior to the Effective Time, or any
options, warrants or other rights to acquire shares of Common Stock outstanding
immediately prior to the Effective Time, the Common Stock Conversion Rate shall
be reduced by multiplying the Common Stock Conversion Rate by a fraction the
numerator of which shall be 10,000 and the denominator of which shall be the
sum of the issued and outstanding shares of Common Stock and the number of
shares of Common Stock subject to outstanding options, warrants or other rights
to acquire shares of Common Stock immediately prior to the Effective Time.
(f) In the event of any stock dividend or other
distribution to the holders of EVI Common Stock, stock split, recapitalization,
combination, merger, consolidation or other similar change in capitalization,
adjustments to the Common Stock Conversion Rate will be made. Such adjustments
to the Common Stock Conversion Rate shall be made so that the holder of a
share of Common Stock would receive in the Merger for each share of EVI Common
Stock issuable in the Merger such number of shares of EVI Common Stock and
other securities or property as a holder of a share of EVI Common Stock as of
the date hereof would have in respect of such share of EVI Common Stock as of
the Effective Time. The Market Price and any thresholds provided in this
Section 1.3 or in Section 9.1(g) or (h) shall also be appropriately adjusted in
the event of a stock split, reclassification or recapitalization to reflect the
change in the number of shares of EVI Common Stock.
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1.4 Exchange.
(a) At the Closing, the certificates for Common Stock
owned by each Company Shareholder shall be surrendered to the Surviving
Corporation. Until so surrendered, certificates for shares of Common Stock
shall represent, after the Effective Time, solely the right to receive the
Consideration. Share certificates representing the Common Stock that are
surrendered to the Surviving Corporation shall be canceled.
(b) At the Closing, certificates representing 90% of the
shares of EVI Common Stock, rounded to the nearest whole share, that are
issuable to the Company Shareholders in accordance with Section 1.3 shall be
delivered to the Company Shareholders and certificates representing the
remainder of the shares of EVI Common Stock, rounded to the nearest whole
share, that are issuable to the Company Shareholders in accordance with Section
1.3 shall be retained by the Surviving Corporation to be held by it in escrow
until distributed promptly following the Net Equity adjustment under Section
1.7 (together with any dividends and distributions issued in respect of such
shares, collectively, the "Escrow Shares") to be held pursuant to this Section
1.4.
(c) Until such time as the Escrow Shares shall have been
released to the Company Shareholders, each Company Shareholder covenants and
agrees with EVI and Sub that such Company Shareholder will not sell, transfer,
pledge, assign, hypothecate or otherwise dispose of, or enter into any
contract, option or other agreement or understanding (either written or oral)
with respect to the sale, transfer, pledge, assignment, hypothecation or other
disposition of any Escrow Shares or any dividends or distributions that may be
declared or paid in respect thereof. Until such time as the Escrow Shares
shall have been released to the Company Shareholders or retained and cancelled
by EVI pursuant to Section 1.7, each Company Shareholder shall be entitled to
vote the Escrow Shares and any other voting securities of such Company
Shareholder held in escrow. No interest shall be payable with respect to the
Escrow Shares and any dividends or distributions received in respect thereof
held by the Surviving Corporation as part of the Escrow Shares.
1.5 Cancellation of Treasury Stock. At the Effective Time, all
shares of Common Stock that are owned directly or indirectly by the Company as
treasury stock shall be canceled without any consideration being payable
therefor.
1.6 Closing of the Company Transfer Books. At the Effective Time,
the share transfer books of the Company shall be closed and no transfers of
shares of Common Stock shall thereafter be made.
1.7 Net Equity Adjustment.
(a) If the Net Equity of the Company immediately prior to
the Effective Time is less than or greater than $4,763,185, which is the net
equity amount reflected on the Company's consolidated balance sheet for the
year ended December 31, 1996, the number of shares of EVI Common Stock issuable
in the Merger shall be adjusted as follows to give effect to such decrease or
increase. To the extent the Net Equity of the Company is less than $4,763,185,
the aggregate number of shares of EVI Common Stock to be received by the
Company Shareholders shall be decreased by an amount equal to such deficiency
(the "Deficiency") divided by the Market Price, with the number of shares of
EVI Common Stock to be received by each Company Shareholder to be decreased pro
rata based on the number of shares of EVI Common Stock to be received by each
Company Shareholder in the Merger. To the extent Net Equity of the Company is
greater than $4,763,185, the aggregate number of shares of EVI Common Stock to
be received by the Company Shareholders shall be increased
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by an amount equal to such excess (the "Excess") divided by the Market Price,
with the number of shares of EVI Common Stock received by each Company
Shareholder to be increased pro rata based on the number of shares of EVI
Common Stock to be received by each Company Shareholder in the Merger. No
fractional shares will be issued and all issuances shall be rounded to the
nearest whole share. The Net Equity of the Company shall be based upon the
consolidated balance sheet of Company as of the Effective Time (the "Effective
Date Balance Sheet"), prepared in accordance with this Section 1.7.
(b) As promptly as practicable, but not more than 45
days, after the Effective Date, EVI shall cause to be prepared and delivered to
the Company Shareholders the Effective Date Balance Sheet. The Effective Date
Balance Sheet shall be prepared in accordance with generally accepted
accounting principles as consistently applied by the Company. EVI shall
provide the Company Shareholders with access to copies of all work papers and
other relevant documents to verify the entries contained in the Effective Date
Balance Sheet. The Company Shareholders shall have a period of 21 days after
delivery of the Effective Date Balance Sheet to review it and, by action of the
Shareholder Representatives to make any objections in writing to EVI. If
written objections to the Effective Date Balance Sheet are delivered by the
Shareholder Representatives to EVI within such 21-day period, then EVI and the
Company Shareholders shall attempt to resolve the matter or matters in dispute.
If no written objections are made by the Shareholder Representatives within the
time period provided above, the Effective Date Balance Sheet shall be deemed
accepted by the Company Shareholders and shall be final and binding.
(c) If disputes with respect to the Effective Date
Balance Sheet cannot be resolved by EVI and the Company Shareholders by action
of the Shareholder Representatives within 15 calendar days after the delivery
of the objections to the Effective Date Balance Sheet, then the specific
matters in dispute shall be submitted to Ernst & Young L.L.P. or such other
independent accounting firm as may be approved by EVI and the Shareholder
Representatives, which firm shall render its opinion as to such matters. Based
on such opinion, that accounting firm will send to EVI and the Company
Shareholders its determination on the specific matters in dispute, and its
calculation of the Net Equity of the Company, which determination shall be
final and binding on the parties.
(d) Within ten Business Days following the final
determination of the Effective Date Balance Sheet, the adjustment to the number
of shares of EVI Common Stock issuable in the Merger to each Company
Shareholder as a result of the provisions of Section 1.7(a), shall be made
either through the issuance of additional shares to the extent the adjustment
is an upward adjustment or through the transfer by the Surviving Corporation to
EVI of some or all of the Escrow Shares to the extent the adjustment is a
downward adjustment. Any Escrow Shares that are not required to be retained to
effect a downward adjustment shall be distributed within five (5) Business Days
following the final determination of the Effective Date Balance Sheet. If the
Escrow Shares are not sufficient to effect such a downward adjustment, each
Company Shareholder shall be required to promptly return the excess shares
received by such Company Shareholder to the Surviving Corporation. EVI may
stop transfer with respect to such shares and effect a cancellation of such
Shares. To the extent that an adjustment under this Section 1.7 would result
in the issuance of a fractional share, the adjustment shall be rounded to the
nearest whole share of EVI Common Stock.
(e) The Shareholder Representatives shall act as
representatives of the Company Shareholders in conjunction with this Section
1.7 and EVI and the Surviving Corporation shall be permitted to deal only with
the Shareholder Representatives with regard to any such matters. Any notice
required or permitted to be delivered to the Company
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Shareholders pursuant to this Section 1.7 shall be considered duly delivered if
delivered to the Shareholder Representatives.
(f) The fees and expenses of the independent accounting
firm appointed pursuant to Section 1.7(c) shall be borne 50% by EVI and 50% by
the Company Shareholders.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to and covenants
and agrees with EVI and Sub as follows:
2.1 Corporate Organization.
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas and has all
requisite corporate power and authority to conduct its business as currently
conducted and to own, operate and lease the Assets it now owns, operates or
holds under lease. The Company is duly qualified or licensed to do business
and is in good standing as a foreign corporation in every jurisdiction in which
the conduct of its business or the ownership or leasing of its Assets requires
it to be so qualified or licensed, except where the failure to be so qualified
or licensed would not have a Material adverse effect on the Company Condition.
(b) The Company has previously delivered to EVI and Sub
true and correct copies of the Articles of Incorporation and By-laws of the
Company as in effect on the date hereof. The minute books of the Company
previously made available to EVI and Sub are complete and accurately reflect
all action taken prior to the date of this Agreement by its board of directors
and shareholders, in their capacities as such.
2.2 Capitalization.
(a) The authorized capital stock of the Company consists
of 100,000 authorized shares, consisting of 25,000 shares of Class A Common
Stock, of which 5,000 shares are issued and outstanding, 25,000 shares of Class
B Common Stock, of which 5,000 shares are issued and outstanding, and 50,000
shares of preferred stock, $100 par value, of which no shares are issued and
outstanding. All of the outstanding shares of Common Stock have been duly
authorized and validly issued and are fully paid and non-assessable and were
not issued in violation of any preemptive rights or other preferential rights
of subscription or purchase of any Person.
(b) The Company Shareholders own the Common Stock
beneficially and of record, in the respective amounts set forth in Schedule
2.2(b) hereto and, to the best knowledge of the Company, free and clear of all
Encumbrances and restrictive agreements, including, without limitation, voting
trust or shareholders agreements, except for the XLH Formation Agreements and
the Class A Shareholders Agreement dated effective as of July 1, 1994 that is
described in Section 5.14(c).
(c) Except as set forth in Schedule 2.2(c), there are no
outstanding options, warrants, convertible securities, calls, rights,
commitments, preemptive rights, agreements, arrangements or understandings of
any character obligating the Company (i) to issue, deliver or sell, or cause to
be issued, delivered or sold, additional shares of capital stock of the Company
or any securities or obligations convertible into or exchangeable for such
shares or
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(ii) to grant, extend or enter into any such option, warrant, convertible
security, call, right, commitment, preemptive right, agreement, arrangement or
understanding described in clause (i) above, except for the XLH Formation
Agreements and the Class A Shareholders Agreement dated effective as of July 1,
1994, that is described in Section 5.14(c).
2.3 Affiliates and Subsidiaries.
(a) Set forth in Schedule 2.3(a) is the name and
description of each Person in which the Company owns any direct or indirect
equity or other similar ownership interests (each, a "Subsidiary", and
collectively, the "Subsidiaries") and a description, including amount and
percentage, of such interests. The interests set forth on Schedule 2.3(a) are
owned by the Company or a wholly owned Subsidiary free and clear of all
Encumbrances and restrictive agreements, including, voting trusts or
shareholders agreements except for the XLH Formation Agreements.
(b) With respect to each Subsidiary set forth on Schedule
2.3(a) in which the Company owns, directly or indirectly, a majority of the
outstanding voting securities or any controlling equity interest:
(i) each such Subsidiary that is a corporation is
a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation
and has the requisite corporate power and authority to carry
on its business as it is now being conducted, and to own,
operate and lease the assets it now owns, operates or holds
under lease. Each such Subsidiary that is not a corporation
is duly organized under the laws of its jurisdiction of
organization and has all requisite power and authority to
carry on its business as it is now being conducted, and to
own, operate and lease the Assets that it now owns, operates
or holds under lease;
(ii) such Subsidiary is duly qualified to do
business and is in good standing in each jurisdiction in which
the conduct of its business or the ownership or leasing of its
assets requires it to be so qualified, except where the
failure to be so qualified or in good standing would not have
a Material adverse effect;
(iii) the Company has previously delivered to EVI
true and correct copies of the Articles or Certificate of
Incorporation and By-laws, or other similar organizational or
constituent documents, of each such Subsidiary as in effect on
the date hereof. The minute books of such Subsidiary
previously made available to EVI are complete and accurately
reflect all action taken prior to the date of this Agreement
by their board of directors or other governing bodies and
shareholders or equity owners, in their capacities as such;
(iv) all the outstanding shares of capital stock
of each such Subsidiary that is a corporation have been duly
authorized and validly issued and are fully paid and
non-assessable and were not issued in violation of any
preemptive rights or other preferential rights of subscription
or purchase of any Person. All of the Company's direct or
indirect ownership interests in each such Subsidiary that is
not a corporation have been duly authorized and validly issued
or vested, were not issued in violation of any preemptive
rights or other preferential rights of subscription or
purchase of any Person, are fully paid and are non-assessable.
All such stock and ownership interests are owned of record and
beneficially by the Company, either directly or indirectly
through a wholly
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owned Subsidiary, free and clear of all Encumbrances and
restrictive agreements, including, voting trusts or
shareholder agreements except for the XLH Formation
Agreements; and
(v) there are no outstanding options, warrants,
convertible securities, calls, rights, commitments, preemptive
rights, agreements, arrangements or understandings of any
character obligating such Subsidiary (A) to issue, deliver or
sell, or cause to be issued, delivered or sold, additional
shares of capital stock or other equity interests of such
Subsidiary or any securities or obligations convertible into
or exchangeable for such shares or equity interests or (B) to
grant, extend or enter into any such option, warrant,
convertible security, call, right, commitment, preemptive
right, agreement, arrangement or understanding described in
clause (A) of this Section 2.3(b)(v) except for the XLH
Formation Agreements.
2.4 Effect of Agreement; Consents.
(a) The Company has all requisite corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder. This Agreement has been duly executed and delivered by the Company
and constitutes a legal, valid and binding obligation of the Company,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by or subject to (a) any bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to creditors' rights
generally and (b) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(b) Except for the filing of a pre-merger notification
and report form under the HSR Act, the filing and recordation of Articles of
Merger as required by the TBCA and such consents, and as set forth in Schedule
2.4(b) hereto, the execution, delivery and performance of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby (i) do not require the consent, approval, clearance, waiver, order or
authorization of any Person, (ii) do not violate any provision of the Articles
of Incorporation or By-laws of the Company or organizational or governing
documents of any Subsidiary, (iii) do not conflict with or violate any permit,
concession, grant, franchise, statute, law, rule or regulation of any
Governmental Entity or any order, judgment, award or decree of any court or
other Governmental Entity to which the Company or any Subsidiary is subject or
any of its Assets is bound and (iv) do not conflict with, or result in any
breach of, or default or loss of any right under (or an event or circumstance
that, with notice or the lapse of time, or both, would result in a default), or
the creation of an Encumbrance pursuant to, or cause or permit the acceleration
prior to maturity or "put" right with respect to, any obligation under, any
indenture, mortgage, deed of trust, lease, loan agreement or other agreement or
instrument to which the Company or any Subsidiary is a party or to which any of
the Assets are subject.
(c) Except as set forth on Schedule 2.4(c), the
execution, delivery and performance of this Agreement by the Company will not
result in the loss of any governmental license, franchise or permit possessed
by the Company or any Subsidiary or give a right of acceleration or termination
to any Person in respect of any Material agreement or other instrument to which
the Company or any of its Subsidiaries is a party or by which any of the Assets
are bound, or result in the loss of any right or benefit under such agreement
or instrument.
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2.5 Financial Statements.
(a) True and correct copies of the audited consolidated
balance sheet of the Company as of December 31, 1996 and 1995, statement of
cash flows for each of the two years ended December 31, 1996 and 1995, and the
statement of income for each of the years ended December 31, 1996, and 1995
(collectively, the "Financial Statements"), have been previously delivered to
EVI and Sub. The Financial Statements fairly present the financial position of
the Company and its Subsidiaries as at the dates thereof and the cash flows and
results of operations for the periods covered thereby, and have been prepared
in accordance with generally accepted accounting principles consistently
applied.
(b) True and correct copies of the unaudited consolidated
balance sheet of the Company as of March 30, 1997 and the statement of income
for the three months ended March 30, 1997 have been previously delivered to EVI
and Sub (the "Interim Financial Statements"). The Interim Financial Statements
fairly present the financial position of the Company and its Subsidiaries at
March 30, 1997 and results of operations for the three months ended March 30,
1997, and are prepared in a manner consistent with the Financial Statements and
in accordance with generally accepted accounting principles consistently
applied. Except as set forth on Schedule 2.5(b)-1, as of March 30, 1997, the
Company and its Subsidiaries did not have any Material liability of any kind or
manner, either direct, accrued, absolute or otherwise, that is not reflected or
disclosed in the Financial Statements or the Interim Financial Statements that
would be required to be reflected as of such date. The accounts receivable of
the Company and its Subsidiaries at March 30, 1997, shown on the Interim
Financial Statements, arose from valid transactions in the ordinary course of
business of the Company and its Subsidiaries and, except as listed on Schedule
2.5(b)-2 have been collected in full or are believed to be collectible at their
full aggregate amounts (net of allowance for doubtful accounts). Accounts
receivable created by the Company and its Subsidiaries after March 30, 1997,
and through the Effective Date have arisen or will arise only from valid
transactions in the ordinary course of business of the Company and its
Subsidiaries. The inventory of the Company and its Subsidiaries at March 30,
1997, is good and saleable and has been recorded in the Interim Financial
Statements net of writeoffs, ordinary and normal damage and rejection, and an
adequate reserve for obsolete and slow-moving inventory.
2.6 Absence of Material Adverse Changes. Except as set forth in
Schedule 2.6, the other schedules to the Agreement, or the Financial Statements
provided to EVI, since March 30, 1997, there has not been (a) any Material
adverse change in the Company Condition, (b) any declaration, setting aside or
payment of any dividend (whether in cash, stock or property) with respect to
any of the Company's capital stock, (c) (i) any granting by the Company or any
Subsidiary to any executive officer of the Company or any Subsidiary of any
increase in compensation (other than customary commissions), (ii) any granting
by the Company or any Subsidiary to any such executive officer of the Company
or any Subsidiary of any increase in severance or termination pay, or (iii) any
entry by the Company or any Subsidiary into any employment, severance or
termination agreement with any such executive officer, (d) any amendment or
modification to any Hydril Agreement, (e) any damage, destruction or loss,
whether or not covered by insurance, that has or could have a Material adverse
change on the Company Condition, (f) any change in accounting methods,
principles or practices by the Company or any Subsidiary Materially affecting
the Company's assets, liabilities or business, except insofar as may have been
required by a change in generally accepted accounting principles, (g) any event
which, if it had taken place following the execution of this Agreement, would
not have been permitted by Section 5.1 hereof, (h) any incurrence by the
Company or any Subsidiary of or entry into any Material liability, mortgage,
lien or transaction, including capital expenditures or capital financing (or
assumption or guarantee thereof), (i) any condition, event or occurrence which,
individually or in the
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aggregate, could reasonably be expected to prevent, hinder or Materially delay
the ability of the Company to consummate the transactions contemplated by this
Agreement or (j) any agreement, in writing or otherwise, or any corporate
action with respect to the foregoing. The Company is not aware of any event or
condition that has occurred or exists that would be likely to result in a
Material adverse change in the Company Condition since December 31, 1996.
2.7 Compensation and Benefit Plans.
(a) Schedule 2.7 hereto contains a list and brief
description of all "employee pension benefit plans" (as defined in Section 3(2)
of ERISA) (sometimes referred to herein as "Pension Plans"), "employee welfare
benefit plans" (as defined in Section 3(1) of ERISA) and all other Benefit
Plans maintained, or contributed to, by the Company for the benefit of any
present or former officers or employees of the Company or any of its
Subsidiaries. The Company has delivered or made available to EVI true,
complete and correct copies of (i) each Benefit Plan (or, in the case of any
unwritten Benefit Plans, descriptions thereof), (ii) the most recent three
annual reports on Form 5500 filed with the IRS with respect to each Benefit
Plan, (if any such report was required), (iii) the most recent IRS
determination letter and all rulings or determinations requested subsequent to
the date of that letter, (iv) the most recent actuarial report for each Benefit
Plan for which an actuarial report is required, (v) the most recent summary
plan description for each Benefit Plan for which such summary plan description
is required and each summary of Material modifications prepared after the last
summary plan description, (vi) each trust agreement and group annuity contract
relating to any Benefit Plan and (vii) all Material correspondence for the last
three years with the IRS or Department of Labor relating to plan qualification,
filing of required forms, or pending, contemplated or announced plan audits.
(b) Except as set forth in Schedule 2.7 hereto, all
Pension Plans have been the subject of determination letters from the IRS to
the effect that such Pension Plans are qualified and exempt from Federal income
taxes under Section 401(a) and 501(a), respectively, of the Code and no such
determination letter has been revoked nor, to the best knowledge of the
Company, has revocation been threatened, nor has any such Pension Plan been
amended since the date of its most recent determination letter or application
therefor in any respect that would adversely affect its qualification or
Materially increase its costs. The Company and its Subsidiaries have paid all
premiums (including any applicable interest, charges and penalties for late
payment) due the PBGC with respect to each Pension Plan for which premiums are
required. No Pension Plan maintained by the Company or any of its Subsidiaries
has been terminated under circumstances which would result in liability to the
PBGC.
(c) Each Benefit Plan that has been or is sponsored,
participated in or contributed to by the Company or any Subsidiary: (i) is in
compliance in all Material respects with all reporting and disclosure
requirements of ERISA, including, but not limited to, Part 1 of Subtitle B of
Title I of ERISA, (ii) has had the appropriate Form 5500 filed timely for each
year of its existence, (iii) has at all times complied with the bonding
requirements of Section 412 of ERISA and (iv) has no issue pending (other than
the payment of benefits in the normal course) nor any issue resolved adversely
to the Company or any Subsidiary which may subject the Company or any
Subsidiary to the payment of any penalty, interest, tax or other obligation.
(d) All voluntary employee benefit associations have been
submitted to and approved as exempt from Federal income tax under Section
501(c)(9) of the Code by the IRS.
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(e) Except as set forth in Schedule 2.7, the execution of
this Agreement or the consummation of the transactions contemplated by this
Agreement will not give rise to any, or trigger any, change of control,
severance or other similar provision in any Benefit Plan.
(f) Except as disclosed in Schedule 2.7(f) and as
required by applicable law, neither the Company nor any Subsidiary provides
employee post-retirement medical or health coverage or contribute to or
maintain any employee welfare benefit plan which provides for health benefit
coverage following termination of employment except as is required by Section
4980B(f) of the Code or other applicable statute, nor has it made any
representations, agreements, covenants or commitments to provide that coverage.
(g) No Pension Plan that the Company or any Subsidiary
maintains, or to which the Company or any Subsidiary is obligated to
contribute, other than any Pension Plan that is a "multiemployer plan" (as such
term is defined in Section 4001(a)(3) of ERISA, collectively, the
"Multiemployer Pension Plans"), had, as of the respective annual valuation date
for each such Pension Plan, an "unfunded benefit liability" (as such term is
defined in Section 4001(a)(18) of ERISA), based on actuarial assumptions which
have been furnished to EVI. None of the Pension Plans has an "accumulated
funding deficiency" (as such term is defined in Section 302 of ERISA or Section
412 of the Code), whether or not waived. None of the Company or any Subsidiary
nor, to the best knowledge of the Company, any officer of the Company or any
Subsidiary or any of the Benefit Plans which are subject to ERISA, including
the Pension Plans, or any trusts created thereunder, or any trustee or
administrator thereof, has engaged in a "prohibited transaction" (as such term
is defined in Section 406, 407 or 408 of ERISA or Section 4975 of the Code) or
any other breach of fiduciary responsibility that could subject the Company or
any Subsidiary or any officer of the Company or any Subsidiary to the tax or
penalty on prohibited transactions imposed by such Section 4975 or to any
liability under Section 502(i)(1) of ERISA. Neither any of such Benefit Plans
nor any of such trusts have been terminated, nor has there been any "reportable
event" (as that term is defined in Section 4043 of ERISA) with respect to which
the 30-day notice requirement has not been waived and the Company is not aware
of any other reportable events with respect thereto during the last five years.
None of the Company or any Subsidiary has suffered or otherwise caused a
"complete withdrawal" or a "partial withdrawal" (as such terms are defined in
Section 4203 and Section 4205, respectively, of ERISA) since the effective date
of such Sections 4203 and 4205 with respect to any of the Multiemployer Pension
Plans.
(h) With respect to any Benefit Plan that is an employee
welfare benefit plan, (i) no such Benefit Plan includes a welfare benefits
fund, as such term is defined in Section 419(e) of the Code, (ii) each such
Benefit Plan that is a group health plan, as such term is defined in Section
5000(b)(1) of the Code, complies with the applicable requirements of Section
4980B(f) of the Code and (iii) each such Benefit Plan (including any such Plan
covering retirees or other former employees) may be amended or terminated
without Material liability to the Company or any Subsidiary on or at any time
after the consummation of the Merger.
2.8 Properties, Title and Related Matters.
(a) There is set forth on Schedule 2.8(a) hereto a list
of each item of personal property owned by the Company or any Subsidiary that
has a book value (net of depreciation as of December 31, 1996) for each item
greater than $50,000. The Company and its Subsidiaries have good and
marketable title to all of their respective personal property (including,
without limitation, those items of personal property set forth on Schedule
2.8(a) hereto), free and clear of all Encumbrances, except for Permitted
Encumbrances and those Encumbrances set forth on Schedule 2.8(a) hereto, and
consigned inventory.
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(b) There is set forth on Schedule 2.8(b) hereto a list
of each item of personal property having a value in excess of $50,000 leased by
the Company or any Subsidiary that is Material to the Company Condition. The
Company and its Subsidiaries have good title to all the leasehold estates
pursuant to which all of the personal property leased by them is leased, free
and clear and all Encumbrances, except for Permitted Encumbrances and those
Encumbrances set forth on Schedule 2.8(b). Neither the Company nor any
Subsidiary has breached any provision of or is in default (and no event or
circumstance exists that with notice, or the lapse of time or both, would
constitute a default by the Company or any Subsidiary) under the terms of any
agreement pursuant to which the personal property set forth on Schedule 2.8(b)
is leased, except for a default or breach that would not have a Material
adverse effect on the Company Condition. To the best knowledge of the Company,
all of such leases or other agreements are in full force and effect. There are
no pending or, to the best knowledge of the Company, threatened disputes with
respect to any lease or other agreement pursuant to which the personal property
set forth on Schedule 2.8(b) is leased and, to the best knowledge of the
Company, the lessor thereunder has not breached any provision of and is not in
default (and no event or circumstance exists that with notice, or the lapse or
time or both, would constitute a default by the lessor) under the terms of any
such lease or other agreement.
(c) There is set forth on Schedule 2.8(c) hereto the
legal description of all real property owned by the Company or any Subsidiary.
The Company or its Subsidiaries has good and marketable title to all of the
real property set forth on Schedule 2.8(c) hereto, in fee simple absolute, free
and clear of all Encumbrances, except for Permitted Encumbrances. No parcel of
the real property set forth on Schedule 2.8(c) is subject to any governmental
decree or is being condemned, expropriated or otherwise taken by any public
authority, with or without payment of compensation therefor, and, to the best
knowledge of the Company, no such condemnation, expropriation or taking has
been proposed.
(d) There is set forth on Schedule 2.8(d) hereto the
legal description of all real property leased by the Company or any Subsidiary.
The Company and its Subsidiaries have good title to all the leasehold estates
pursuant to which the real property set forth on Schedule 2.8(d) hereto is
leased, free and clear of all Encumbrances, except for Permitted Encumbrances.
Neither the Company nor any Subsidiary has breached any provision of or is in
default (and no event or circumstance exists that with notice, or the lapse of
time or both, would constitute a default by the Company or any Subsidiary)
under the terms of any lease or other agreement pursuant to which the real
property set forth on Schedule 2.8(d) hereto is leased. To the best knowledge
of the Company, all of such leases or other agreements are in full force and
effect. There are no pending or, to the best knowledge of the Company,
threatened disputes with respect to any lease or other agreement pursuant to
which the real property set forth on Schedule 2.8(d) hereto is leased and, to
the best knowledge of the Company, the lessor thereunder has not breached any
provision of and is not in default (and no event or circumstance exists that
with notice, or the lapse of time or both, would constitute a default by the
lessor) under the terms of any such lease or other agreement.
2.9 Legal Proceedings. Except as set forth in Schedule 2.9
hereto, there is no legal, judicial, administrative, governmental, arbitration
or other action or proceeding or governmental investigation pending or, to the
best knowledge of the Company, threatened in which the damages, fines or
penalty sought exceed $50,000 against the Company, any Subsidiary or any
director, officer or employee of the Company or any Subsidiary, or Materially
affecting any of its Assets or that would prevent, hinder or Materially delay
the ability of the Company to consummate the transactions contemplated by this
Agreement (and the Company is not aware of any basis for any such action,
proceeding or investigation), nor is there any judgment, decree, injunction,
rule or order of any Governmental Entity or arbitrator outstanding against the
Company or any Subsidiary having, or which, insofar as reasonably
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can be foreseen, in the future could have, any such Material effect. The
Company has fully accrued for any payments that it believes are reasonably
likely to be made in connection with such matters except for item 1 on Schedule
2.9, which have not yet been evaluated. Neither the Company nor any Subsidiary
is in violation of or default under any laws, ordinances, regulations,
judgments, injunctions, orders or decrees (including, without limitation, any
immigration laws or regulations) of any court or other Governmental Entity
applicable to its business. Except as set forth in Schedule 2.9 hereto, there
are no judgments, orders, injunctions or decrees of any Governmental Entity in
which the Company or any Subsidiary is a named party or any of its Assets are
identified and subject.
2.10 Insurance. Schedule 2.10 hereto sets forth all existing
insurance policies held by the Company or any of its Subsidiaries relating to
the business, Assets, employees or agents of the Company and its Subsidiaries.
Each such policy is in full force and effect, is with responsible insurance
carriers and is in an amount and scope customary for Persons engaged in
businesses and having assets similar to those of the Company. There is no
dispute with respect to such policies and all claims arising from events or
circumstances occurring prior to the date hereof have been paid in full or
adequate reserves therefor are recorded in the Financial Statements. All
retroactive premium adjustments for any period ended on or before December 31,
1996, under any worker's compensation policy or any other insurance policies of
the Company or any of its Subsidiaries have been recorded in accordance with
generally accepted accounting principles and are reflected in the Financial
Statements. None of such policies will terminate as a result of the
transactions contemplated by this Agreement.
2.11 Records. The Company and its Subsidiaries have records that
accurately reflect their respective transactions in all Material respects and
has accounting controls sufficient to insure that such transactions are in all
Material respects (a) executed in accordance with its management's general and
specific authorization and (b) recorded in conformity with good business
practices.
2.12 Material Contracts.
(a) Except as set forth in Schedule 2.12(a), any other
Schedule hereto or as otherwise disclosed to EVI or as reflected in the
financial statements provided to EVI and except for this Agreement, the Hydril
Agreements and the XLH Formation Agreements, neither the Company nor any
Subsidiary is a party to or is bound by:
(i) any agreement, indenture or other instrument
which contains restrictions with respect to the payment of dividends
or any other distribution in respect of its capital stock or the
purchase, redemption or other acquisition of capital stock;
(ii) any agreement, contract or commitment outside
the ordinary course of business relating to any expenditure or a
series of related expenditures in excess of $25,000;
(iii) any outstanding loan or advance by the
Company or any Subsidiary to, or investment by the Company or any
Subsidiary in, any Person, or any agreement, contract, commitment or
understanding relating to the making of any such loan, advance or
investment (excluding trade receivables arising in the ordinary course
of business and employee advances not in excess of $2,000 per
employee);
(iv) any contract, agreement, indenture, note or
other instrument relating to (A) the borrowing of money by the Company
or any Subsidiary or the
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granting of any Encumbrance or (B) any guarantee or other contingent
liability (identifying the primary contract or agreement to which such
guarantee or contingent liability relates or the agreement pursuant to
which such guarantee was delivered) in respect of any indebtedness,
commitment, liability or obligation of any Person (other than the
endorsement of negotiable instruments for deposit or collection in the
ordinary course of business);
(v) any management service, consulting or any
other similar type of contract or agreement;
(vi) any agreement, contract or commitment
limiting the freedom of the Company, any Subsidiary or any Affiliate
of the Company to engage in any line of business, to own, operate,
sell, transfer, pledge or otherwise dispose of or encumber any Asset
or to compete with any Person or to engage in any business or activity
in any geographic area;
(vii) any agreement, lease, contract or commitment
or series of related agreements, leases, contracts or commitments
involving amounts individually in excess of $10,000 and $100,000 in
the aggregate not entered into in the ordinary course of business that
is not cancelable without penalty to the Company or any Subsidiary
within 30 days;
(viii) any "take or pay" agreement, contract or
commitment or any agreement, contract, or commitment to purchase goods
or services at a price less than the Company's or any of its
Subsidiaries' cost of producing such goods or providing such services;
(ix) any agreement or contract obligating the
Company or any Subsidiary or that would obligate or require any
subsequent owner of the business currently conducted by the Company or
any Subsidiary or any of the Assets to provide for indemnification or
contribution with respect to any matter, other than customary
indemnification obligations entered into in the ordinary course of
business;
(x) any sales, distributorship or similar
agreement relating to the products sold or services provided by the
Company or any Subsidiary;
(xi) any license, royalty or similar agreement; or
(xii) any agreement, contract or commitment that
the Company expects, or with the exercise of reasonable business
judgment would expect, to have a Material adverse effect on the
Company Condition.
(b) Schedule 2.12(b) hereto sets forth a list of all
agreements by and between the Company or any of its Subsidiaries and Hydril or
any of Hydril's subsidiaries or affiliates.
(c) Schedule 2.12(c) hereto sets forth (i) the aggregate
outstanding principal as of March 30, 1997 and July 1, 1997, with respect to
each loan, credit or other agreement, instrument or document listed in Schedule
2.12(a) hereto relating to the borrowing of money by the Company or any
Subsidiary and (ii) the amount of available borrowings as of March 30, 1997,
with respect to each such loan, credit or other agreement, instrument or
document.
(d) None of the Company, any Subsidiary or, to the best
knowledge of the Company, the other contracting parties thereto have breached
any provision of or are in
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default (and no event or circumstance exists, to the best knowledge of the
Company with respect to other parties, that with notice, or the lapse of time
or both, would constitute a default) under the terms of any agreement listed in
Schedule 2.12(a) or (b) hereto. All contracts, agreements, indentures, leases
and other instruments listed in Schedule 2.12(a) or (b) hereto are in full
force and effect except as limited by their terms. There are no pending or, to
the best knowledge of the Company, threatened disputes with respect to the
contracts, agreements, indentures, leases or instruments described in Schedule
2.12(a) or (b). Neither the Company nor any Subsidiary is obligated to pay any
liquidated damages under any of the contracts, agreements, indentures, leases
or other instruments described in Schedule 2.12(a) hereto and the Company is
not aware of any facts or circumstances that could reasonably be expected to
result in an obligation of the Company or any Subsidiary to pay any such
liquidated damages.
2.13 Brokerage. No investment banker, broker or finder has acted
directly or indirectly for the Company or any Subsidiary in connection with
this Agreement or the transactions contemplated hereby. No investment banker,
broker, finder or other Person is entitled to any brokerage or finder's fee or
similar commission from the Company or any Subsidiary in respect thereof based
in any way on agreements, arrangements or understandings made by or on behalf
of the Company or any Subsidiary.
2.14 Intellectual Property. The Company or a Subsidiary owns, or
is licensed or otherwise has the right to use all Intellectual Property that is
Material to the condition (financial or otherwise) or conduct of the business
and operations of the Company and its Subsidiaries and all Intellectual
Property is listed on Schedule 2.14. To the best knowledge of the Company, (a)
the use of the Intellectual Property by the Company and its Subsidiaries does
not infringe on the rights of any person, subject to such claims and
infringements as do not, in the aggregate, give rise to any liability on the
part of the Company or any Subsidiary which could have a Material adverse
effect on the Company Condition and (b) no Person is infringing on any right of
the Company or any Subsidiary with respect to any Intellectual Property.
Except as set forth in Schedule 2.14, no claims are pending or, to the best
knowledge of the Company, threatened that the Company or any Subsidiary
infringing or otherwise adversely affecting the rights of any person with
regard to any Intellectual Property. Except as set forth in Schedule 2.14, all
of the Intellectual Property listed on Schedule 2.14 is owned by the Company or
a wholly owned Subsidiary free and clear of all Encumbrances and was not
misappropriated from any Person. The consummation of the transactions
contemplated by this Agreement will not result in the loss of any Intellectual
Property, including any loss under the Wedge Thread License Agreement, provided
that no representation is provided with respect to any changes in the business
or organizational structure of the Company after the Merger. The Company and
its Subsidiaries have taken all reasonable and appropriate actions in the best
judgment of the Company and its Subsidiaries to protect its trade secrets. Set
forth on Schedule 2.14 is a list of the licensees and sublicensees of the
Intellectual Property. The Intellectual Property licensed by the Company or
any of its Subsidiaries pursuant to the licenses set forth on Schedule 2.14 is
not subject to any Encumbrances other than those under the applicable license
agreements. Except as set forth in the Hydril Agreements, neither the Company
nor any Subsidiary has given indemnification for patent, trademark, service
xxxx or copyright infringements except to licensees or customers in the
ordinary course of business.
2.15 Environmental Matters. Except as set forth in Schedule 2.15:
(a) the Company and each of its Subsidiaries has at all
times operated in compliance with all applicable limitations, restrictions,
conditions, standards, prohibitions, requirements and obligations of
Environmental Laws and related orders of any court or other
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Governmental Entity, except where the failure to so operate in compliance would
not have a Material adverse effect on the Company Condition;
(b) there are no existing, pending or, to the best
knowledge of the Company, threatened actions, suits, claims, investigations,
inquiries or proceedings by or before any court or any other Governmental
Entity directed against the Company, any Subsidiary or any of their respective
Assets which pertain or relate to (i) any remedial obligations under any
applicable Environmental Law, (ii) violations of any Environmental Law, (iii)
personal injury or property damage claims relating to the release of Waste
Materials or (iv) response, removal or remedial costs under CERCLA or any
similar state law;
(c) all notices, permits, licenses or similar
authorizations required to be obtained or filed by the Company or any
Subsidiary under all applicable Environmental Laws in connection with its
current and previous operation or use of the Assets, any other assets or
properties currently or previously leased or owned by the Company or any
Subsidiary or the current and previous conduct of its business have been duly
obtained or filed and are in full force and effect, except where the failure to
do so would not have a Material adverse effect on the Company Condition;
(d) neither the Company nor any Subsidiary has received
notice that any permit, license or similar authorization under any
Environmental Law is to be revoked or suspended by any Governmental Entity;
(e) neither the Company nor any Subsidiary owns or
operates any underground storage tanks;
(f) no portion of the Assets or any other assets or
properties currently or previously leased or owned by the Company or any of its
Subsidiaries is part of a Superfund site under CERCLA or any similar ranking or
listing under any similar state law;
(g) all Waste Materials generated by the Company or any
Subsidiary that are stored or that require treatment or disposal have been
transported, stored, treated and disposed of by carriers, and by storage,
treatment and disposal facilities authorized and maintaining valid permits
under all applicable Environmental Laws except where the failure would not have
a Material adverse effect on the Company Condition; and
(h) no facts or circumstances exist that could reasonably
be expected to result in any Material adverse effect on the Company Condition
with respect to the current or past business and operations of the Company, any
Subsidiary, the Assets or any other assets or properties currently or
previously leased or owned by the Company or any Subsidiary in connection with
(i) any release, transportation or disposal of any Waste Materials, hazardous
substance or solid waste or (ii) action taken or omitted that was not in full
compliance with or was in violation of any applicable Environmental Law.
2.16 Governmental Licenses and Permits. The Company and each of
its Subsidiaries has all Material federal, state, local and foreign
governmental licenses and permits necessary to the conduct of its operations of
business as currently conducted, such licenses and permits are in full force
and effect, no Material violations are or have been recorded in respect of any
thereof and no proceeding is pending or, to the best knowledge of the Company,
threatened to revoke or limit any thereof. Schedule 2.16 contains a true,
complete and accurate list of (a) all such Material governmental licenses and
permits and (b) all Material consents, orders, decrees and other compliance
agreements under which the Company or any Subsidiary is operating or bound,
copies of all of which have been furnished to EVI and Sub. Neither the Company
nor
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any Subsidiary has received or is aware of any reports of inspections under the
United States Occupational Safety and Health Act, or under any other applicable
federal, state or local health and safety laws and regulations relating to the
Company, any Subsidiary, the Assets or the operation of the Company's or any of
its Subsidiaries' business. As of the date hereof, there are no safety,
health, anti-competitive or discrimination claims that have been made or are
pending or, to the best knowledge of the Company, that are threatened relating
to the business or employment practices of the Company or any of its
Subsidiaries.
2.17 Taxes. Except as set forth in Schedule 2.17:
(a) all returns (including, without limitation, income,
franchise, sales and use, unemployment compensation, excise, severance,
property, gross receipts, profits, payroll and withholding tax returns and
information returns) and reports (collectively, the "Tax Returns") of or
relating to any foreign, federal, state or local tax, assessment, levy, impost,
duty, withholding, estimated payment or other similar governmental charge
(collectively, together with any penalties, additions to Tax, fines, interest
and similar charges thereon or related thereto, the "Taxes") that are required
to be filed on or before the Effective Date, subject to any allowable extension
periods, for, by, on behalf of or with respect to the Company or any of its
Subsidiaries, including, but not limited to, those relating to the income,
business, operations or property of the Company or any of its Subsidiaries
(whether on a separate, consolidated, affiliated, combined, unitary or any
other basis), have been or will be timely filed with the appropriate foreign,
federal, state and local authorities, and all Taxes shown to be due and payable
on such Tax Returns or related to such Tax Returns have been or will be paid in
full on or before the Effective Date, except where the failure to file Tax
Returns and to pay Taxes would not have a Material adverse effect on the
Company Condition;
(b) all such Tax Returns and the information and data
contained therein have been or will be properly and accurately compiled and
completed, fairly present or will fairly present the information purported to
be shown therein, and reflect or will reflect all liabilities for Taxes for the
periods covered by such Tax Returns;
(c) none of such Tax Returns are under audit or
examination by any foreign, federal, state or local authority and there are no
agreements, waivers or other arrangements providing for an extension of time
with respect to the assessment or collection of any Tax or deficiency of any
nature against the Company or any Subsidiary or with respect to any such Tax
Return, or any suits or other actions, proceedings, investigations or claims
now pending or, to the best knowledge of the Company, threatened against the
Company or any Subsidiary with respect to any Tax, or any matters under
discussion with any foreign, federal, state or local authority relating to any
Tax, or any claims for any additional Tax asserted by any such authority;
(d) all Taxes assessed and due and owing from or against
the Company or any Subsidiary on or before the Effective Date (including, but
not limited to, ad valorem Taxes relating to any property of the Company or any
Subsidiary) have been or will be timely paid in full on or before the Effective
Date;
(e) all withholding Tax, Tax deposit and estimated Tax
payment requirements imposed on the Company or any Subsidiary for any and all
periods ending on or before the Effective Date, or through and including the
Effective Date for periods that have not ended on or before the Effective Date,
have been or will be timely satisfied in full on or before the Effective Date
or reserves adequate for the payment of such withholding, deposit and estimated
Taxes have been or will be established in the financial statements of the
Company on or before the Effective Date; and
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(f) the Financial Statements reflect and include adequate
charges, accruals, reserves and provisions for the payment in full of any and
all Taxes payable with respect to any and all periods ending on or before the
respective dates thereof.
2.18 Labor Matters. There are no collective bargaining or other
labor union agreements to which the Company or any Subsidiary is a party or by
which it is bound. There are no labor disputes to which the Company or any
Subsidiary is a party. There are no strikes, slowdowns or picketing against
the Company or any Subsidiary (or any supplier of goods or services to the
Company or any Subsidiary) pending or, to the best knowledge of the Company,
threatened. Neither the Company nor any Subsidiary has received notice from
any union or employees setting forth demands for representation, elections or
for present or future changes in wages, terms of employment or working
conditions other than requests by individual employees who are not officers for
wage increases and changes in employment terms in the normal course of
business.
2.19 Warranties and Product Liability.
(a) Except for (i) warranties implied by law and (ii)
warranties disclosed on Schedule 2.19 hereto, neither the Company nor any
Subsidiary has given or made any warranties in connection with the sale or
rental of goods or services, including, without limitation, warranties covering
the customer's consequential damages. The Company is not aware of any state of
facts or the occurrence of any event forming the basis of any present claim in
an amount in excess of $100,000 for all such claims against the Company or any
Subsidiary with respect to warranties relating to products manufactured, sold
or distributed by the Company or any Subsidiary or services performed by or on
behalf of the Company or any Subsidiary.
(b) There is no state of facts or any event forming the
basis of any present claim against the Company or any Subsidiary not fully
covered by insurance, except for deductibles and self-insurance retentions, for
personal injury or property damage alleged to be caused by products shipped or
services rendered by or on behalf of the Company or any Subsidiary, except
where any such claim would not have a Material adverse effect on the Company
Condition.
2.20 No Misleading Statements. This Agreement, the schedules
hereto and the information referred to herein, when taken as a whole, do not
include any untrue statement of a Material fact and do not omit to state any
Material fact necessary to make the statements contained herein or therein not
misleading.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF THE SHAREHOLDERS
Each Company Shareholder severally and not jointly represents and
warrants to EVI and Sub with respect to the Company and with respect to such
Company Shareholder but not with respect to any other Company Shareholder as
follows:
3.1 Tax Matters.
(a) Except as set forth on Schedule 3.1 hereto, such
Company Shareholder has no present plan or intention to engage in a sale,
exchange, transfer, reduction of risk of ownership or other direct or indirect
disposition of (i) shares of EVI Common Stock to be
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issued to such Company Shareholder in the Merger, which shares have an
aggregate fair market value, as of the Effective Time, in excess of 50% of the
aggregate fair market value, immediately prior to the Merger, of the
outstanding Common Stock of the Company or (ii) more than 50% of the shares of
EVI Common Stock to be received by such Company Shareholder in the Merger.
(b) Other than in the ordinary course of its business,
the Company has made (and will make) no transfer of any of its assets in
contemplation of the Merger or during the period ending at the Effective Time
and beginning with the commencement of negotiations (whether formal or
informal) with EVI regarding the Merger (or any other form of disposition of
the assets or stock of the Company other than in the ordinary course of
business). For the purposes of this Section 3.1(b), a transfer of assets
includes any distribution of assets with respect to stock or in redemption of
stock.
(c) As of the Effective Time, at least 90% of the fair
market value of the net assets and at least 70% of the fair market value of the
gross assets held by the Company immediately prior to the Merger will continue
to be held by the Surviving Corporation immediately subsequent to the Merger.
3.2 Power and Authority. Such Company Shareholder has the
requisite legal capacity and full power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby.
3.3 Execution and Delivery. Such Company Shareholder has duly
executed and delivered this Agreement. This Agreement constitutes a legal,
valid and binding obligation of such Company Shareholder, enforceable against
such Company Shareholder in accordance with its terms, except as such
enforceability may be limited by or subject to (a) any bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to creditors' rights
generally and (b) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
3.4 Effect of Agreement. The execution, delivery and performance
by such Company Shareholder of this Agreement, the consummation by such Company
Shareholder of the transactions contemplated hereby and the compliance by such
Company Shareholder with the provisions hereof will not conflict with, or
result in any violation of or default by such Company Shareholder (with or
without notice or lapse of time, or both) under any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which such Company
Shareholder is a party or by which such Company Shareholder or any of such
Company Shareholder's assets or properties may be bound, or any statute or any
judgment, decree, order, rule or regulation of any Governmental Entity to which
such Company Shareholder is a party or by which any Company Shareholder or any
of the assets or properties of such Company Shareholder may be bound.
3.5 Consents. Except for filings under the HSR Act, those filings
and consents described in Schedule 3.5 and those consents, approvals,
authorizations, exemptions and filings, the failure to obtain or make would not
prohibit or restrict the ability of such Company Shareholder to consummate the
transactions contemplated by this Agreement, there is no consent, approval or
authorization of any Person (other than those which have been obtained)
required on the part of such Company Shareholder in connection with the
execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby that has not heretofore been made or obtained.
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3.6 Litigation. There is no legal, judicial, administrative,
governmental, arbitration or other action or proceeding pending or, to the best
knowledge of such Company Shareholder, threatened against such Company
Shareholder that could reasonably be expected to affect the ability of such
Company Shareholder to perform such Company Shareholder's obligations under
this Agreement.
3.7 Stock Ownership. Such Company Shareholder is the record and
beneficial owner of the shares of Common Stock as described in Schedule 2.2(b)
hereto, and has full authority to vote all of such shares as contemplated by
this Agreement and, except as set forth on Schedule 2.2(b) hereto and in the
Hydril Agreements, XLH Formation Agreements and the Class A Shareholders
Agreement dated effective as of July 1, 1994, that is described in Section
5.14(c), the shares of Common Stock owned by such Company Shareholder as set
forth in Schedule 2.2(b) hereto are owned free and clear of all Encumbrances
and restrictive agreements, including, without limitation, voting trusts or
stockholders agreements. Such Company Shareholder has full authority to
transfer pursuant to the Merger all of the shares of Common Stock owned by such
Company Shareholder free and clear of all Encumbrances and restrictive
agreements, including, without limitation, voting trusts or stockholders
agreements.
3.8 Securities Law Matters.
(a) Such Company Shareholder recognizes and understands
that the EVI Common Stock to be issued to such Company Shareholder pursuant to
the Merger (the "securities") will not, except as expressly provided in Article
6, be registered under the Securities Act, or under the securities laws of any
state (the "securities laws"). The securities are not being so registered in
reliance upon exemptions from the Securities Act and the securities laws which
are predicated, in part, on the representations, warranties and agreements of
the Company Shareholders contained herein.
(b) Such Company Shareholder represents and warrants as
to such Company Shareholder that (i) such Shareholder has business knowledge
and experience, such experience being based on actual participation therein,
(ii) such Company Shareholder is capable of evaluating the merits and risks of
an investment in the EVI Common Stock and the suitability thereof as an
investment therefor, (iii) the EVI Common Stock to be acquired by such Company
Shareholder in connection with the Merger will be acquired solely for
investment and not with a view toward resale or redistribution in violation of
the securities laws, (iv) such Company Shareholder's residence and domicile, in
the case of each Company Shareholder that is a natural person is in the State
of Texas and the principal corporate offices of Hydril are in the State of
Texas, (v) in connection with the transactions contemplated hereby, no
assurances have been made concerning the future results of the Company or EVI
or as to the value of the EVI Common Stock and (vi) such Company Shareholder is
an "accredited investor" within the meaning of Regulation D promulgated by the
Commission pursuant to the Securities Act. Such Company Shareholder
understands that none of EVI, Sub or the Company is under any obligation to
file a registration statement or to take any other action under the securities
laws with respect to any such securities except as expressly set forth in
Article 6 hereof.
(c) Such Company Shareholder has consulted with such
Company's Shareholder's own counsel in regard to the securities laws and is
fully aware (i) of the circumstances under which such Company Shareholder is
required to hold the securities, (ii) of the limitations on the transfer or
disposition of the securities, (iii) that the securities must be held
indefinitely unless the transfer thereof is registered under the securities
laws or an exemption from registration is available and (iv) that no exemption
from registration is likely to become available for at least one year from the
date of acquisition of the securities. Such Company Shareholder has been
advised by such Company Shareholder's counsel as to the
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provisions of Rules 144 and 145 as promulgated by the Commission under the
Securities Act and has been advised of the applicable limitations thereof.
Such Company Shareholder acknowledges that EVI, Sub and the Company are relying
upon the truth and accuracy of the representations and warranties in this
Section 3.8 by such Company Shareholder in consummating the transactions
contemplated by this Agreement without registering the securities under the
securities laws.
(d) Such Company Shareholder has been furnished with the
SEC Documents. Such Company Shareholder has been furnished with a summary
description of the terms of the Merger, the EVI Common Stock and EVI, the
Company and Sub have made available to such Shareholder the opportunity to ask
questions and receive answers concerning the terms and conditions of the
transactions contemplated by this Agreement and to obtain any additional
information which they possess or could reasonably acquire for the purpose of
verifying the accuracy of information furnished to the Company Shareholders as
set forth herein or for the purpose of considering the transactions
contemplated hereby. EVI has offered to make available to such Company
Shareholder upon request at any time all exhibits filed by EVI with the
Commission as part of any of the reports filed therewith.
(e) Each Company Shareholder agrees that the certificates
representing such Company Shareholder's EVI Common Stock to be acquired
pursuant to the Merger will be imprinted with the following legend, the terms
of which are specifically agreed to:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, OR THE SECURITIES LAWS OF ANY STATE, IN RELIANCE UPON EXEMPTIONS
FROM REGISTRATION REQUIREMENTS. WITHOUT SUCH REGISTRATION, SUCH
SHARES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED, EXCEPT UPON DELIVERY TO THE COMPANY OF AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT REGISTRATION IS
NOT REQUIRED FOR SUCH SALE, PLEDGE, HYPOTHECATION OR TRANSFER OR THE
SUBMISSION TO THE COMPANY OF SUCH OTHER EVIDENCE AS MAY BE
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH SALE, PLEDGE,
HYPOTHECATION OR TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES
ACT OF 1933 OR APPLICABLE STATE SECURITIES LAWS OR ANY RULE OR
REGULATION PROMULGATED THEREUNDER.
Each Company Shareholder understands and agrees that appropriate stop transfer
notations will be placed in the records of EVI and with its transfer agents in
respect of the securities which are to be issued to the Company Shareholders in
the Merger. EVI agrees that any shares of EVI Common Stock sold pursuant to an
effective registration statement, including a registration statement filed
pursuant to Article 6 hereof, shall have the above legend removed to permit the
closing of the sale within three business days of written notice of the sale
and certification by the Company Shareholder that the sale was made pursuant to
the plan of distribution described in the registration statement and the
prospectus delivery requirements under the Securities Act were fully complied
with in connection with the sale.
3.9 Indebtedness and Agreements. Immediately subsequent to the
Effective Time, the Surviving Corporation will have no indebtedness outstanding
that is payable to any Company Shareholder or any of their respective
Affiliates, except for benefits pursuant to Benefit Plans listed on the
schedules hereto. Immediately subsequent to the Effective Time, except for
this Agreement and the Hydril Agreements which shall continue in effect, there
will be no agreements, contracts, leases, arrangements or other understandings
(either written or
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oral) between such Company Shareholder and the Surviving Corporation, except
for benefits pursuant to Benefit Plans listed on the schedules hereto.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF EVI AND SUB
EVI and Sub hereby jointly and severally represent and warrant to and
covenant and agree with the Company and the Company Shareholders as follows:
4.1 Corporate Organization. EVI is a corporation duly organized,
validly existing and in good standing under the laws of Delaware and Sub is a
corporation duly organized, validly existing and in good standing under the
laws of Texas. Each of EVI and Sub has all requisite corporate power and
authority to carry on its business as it is now being conducted and to execute,
deliver and perform this Agreement and to consummate the transactions
contemplated hereby.
4.2 Due Authorization, Execution and Delivery; Effect of
Agreement.
(a) The execution, delivery and performance by EVI and
Sub of this Agreement and the consummation by EVI and Sub of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of EVI and Sub. This Agreement has been duly and validly executed
and delivered by EVI and Sub and constitutes the legal, valid and binding
obligation of EVI and Sub, enforceable against each of them in accordance with
its terms, except to the extent that such enforceability (a) may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to creditors' rights generally and (b) is subject to general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
(b) The consummation by EVI and Sub of the transactions
contemplated hereby will not violate any provision of, or constitute a default
under, any contract or other agreement to which EVI or Sub is a party or by
which either of them is bound, or conflict with its charter or by-laws, other
than violations, defaults or conflicts that would not Materially and adversely
affect the ability of EVI or Sub to consummate the transactions contemplated by
this Agreement.
4.3 Consents. Except for the filing of a pre-merger notification
and report form under the HSR Act, the filing and recordation of Articles of
Merger as required by the TBCA and those consents, approvals, authorizations,
exemptions and filings, the failure to obtain or make would not materially and
adversely affect the ability of EVI and Sub to consummate the transactions
contemplated by this Agreement, there is no consent, approval or authorization
of, or exemption by, or filing with, any Governmental Entity required in
connection with the execution, delivery or performance by EVI and Sub of this
Agreement or the taking of any other action contemplated hereby that has not
heretofore been made and obtained.
4.4 Authorization for EVI Common Stock. EVI has taken all
necessary action to permit it to issue the number of shares of EVI Common Stock
required to be issued pursuant to the terms of this Agreement. The shares of
EVI Common Stock issued pursuant to the terms of this Agreement will, when
issued, be validly issued, fully paid and nonassessable and not subject to
preemptive rights.
4.5 Brokerage. No investment banker, broker, finder or other
Person is entitled to any brokerage or finder's fee or similar commission in
respect of this Agreement or the
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transactions contemplated hereby based in any way on agreements, arrangements
or understandings made by or on behalf of Sub or any Affiliate of Sub.
4.6 SEC Documents. EVI has provided to the Company its Annual
Report on Form 10-K for the year ended December 31, 1996, its Quarterly Report
on Form 10-Q for the quarter ended March 31, 1997, its Current Reports on Form
8-K dated January 23, March 17, April 25, and May 14, 1997, and its proxy
statement with respect to the Annual Meeting of Stockholders held on May 6,
1997 (such documents collectively referred to herein as the "SEC Documents").
As of their respective dates, the SEC Documents complied in all material
respects with the requirements of the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder
applicable to such SEC Documents, and none of the SEC Documents contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The consolidated financial statements of EVI included in the SEC
Documents comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the Commission with
respect thereto, have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto) and fairly present the
consolidated financial position of EVI and its consolidated subsidiaries as of
the dates thereof and the consolidated results of their operations and cash
flows for the periods then ended.
4.7 Other Agreements. Neither EVI nor Sub nor any of their
Affiliates is a party to any written or oral agreement or understanding with
any Company Shareholder or any other Person who is an officer or director of
the Company or any Affiliate of the Company regarding employment or
compensation by EVI or any of its Affiliates following the Effective Date other
than (i) the continuation of the employment by the Surviving Corporation
following the Merger of the current employees of the Company at compensation
levels that are not materially greater, in any individual case or collectively,
than those now in effect at the Company and (ii) the right of such employees to
participate in EVI's employee benefit plans following the Merger.
ARTICLE 5
COVENANTS AND AGREEMENTS
The parties covenant and agree as follows:
5.1 Conduct of Business Operations.
(a) Except as expressly contemplated by this Agreement,
neither the Company nor any Subsidiary shall without the prior written consent
of EVI and Sub:
(i) (A) grant to any employee of the Company or
any Subsidiary any increase in the rate or form of compensation,
employee benefits, severance pay or termination pay, (B) adopt or
amend (other than amendments that reduce the amounts payable by the
Company or the Subsidiary or are required by law to preserve the
qualified status of a plan or contract) in any respect any Benefit
Plan, (C) pay or declare any bonus or similar payment in respect of
any employee of the Company or any Subsidiary, or (D) enter into any
employment, severance, termination or similar contract with any Person
(including, without limitation, contracts with management of the
Company or any Subsidiary that might require that payments be made
upon the
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consummation of the transactions contemplated hereby) or amend any
such existing contracts to increase any amounts payable thereunder or
benefits provided thereunder;
(ii) sell, lease or otherwise dispose of any
Assets with a net book value as of March 31, 1997, in excess of
$25,000 or any interests therein, or enter into, or consent to the
entering into of, any agreement granting to any third Person a right
to purchase, lease or otherwise acquire any Assets or interests
therein, except for dispositions of inventory in the ordinary course
of business;
(iii) amend or modify any Hydril Agreement;
(iv) amend its Articles of Incorporation or By-
laws;
(v) enter into any agreement or incur any
obligation, the terms of which would be violated by the consummation
of the transactions contemplated by this Agreement;
(vi) organize, invest in or acquire an equity
interest in any corporation, partnership, joint venture, association
or other entity or organization;
(vii) create, incur, assume, guarantee or otherwise
become liable or obligated with respect to any indebtedness for monies
borrowed (other than purchases of properties, goods and services under
existing contracts), or make any loan or advance to any Person (other
than trade receivables in the ordinary course of business);
(viii) (A) enter into any new line of business, (B)
change its investment, liability management and other material
policies in any respect, (C) incur or commit to any capital
expenditures or financing which individually, or in the aggregate with
respect to a series of related capital expenditures or financing,
exceed $50,000, (D) acquire or agree to acquire by merging or
consolidating with, or acquire or agree to acquire by purchasing all
or substantially all of the assets of, or in any manner, any Person,
(E) otherwise acquire or agree to acquire any assets for a total
consideration in the aggregate in excess of $100,000, or (F) waive any
right under or cancel any contract, debt or claim listed in Schedule
2.12(a) hereto, which waiver or cancellation would have a Material
adverse effect on the Company Condition;
(ix) issue, deliver, sell or authorize the
issuance, delivery or sale of any stock appreciation rights or of any
shares of its capital stock or other ownership interests of any class,
or any securities convertible into or exchangeable for, or rights,
warrants or options to acquire, any such shares, interests or
convertible or exchangeable securities or enter into any agreement or
understanding or offer or propose to do any of the foregoing or take
any preliminary action with respect to such matters;
(x) enter into any contract, commitment or
arrangement (or amend, modify, supplement or otherwise alter the terms
of any existing contract, agreement or instrument set forth in
Schedule 2.12(a) hereto) with any Person or enter into a contract,
commitment or arrangement with respect to any sales, agency or other
contract (A) for non-employee personal services with any Person
providing for annual payments in excess of $25,000 or (B) requiring
payment by the Company or any of its Subsidiaries for any goods or
services whether or not such goods or services are provided;
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(xi) terminate, amend or modify any Material lease
of any real property;
(xii) maintain its books of account other than in
the usual, regular and ordinary manner in accordance with good
business practices or make any change in any of its accounting
methods, principles or practices; or
(xiii) take any action that would reasonably be
expected to result in any of the conditions to Closing set forth in
Article 7 and Article 8 hereof not being satisfied.
(b) Notwithstanding the limitations contained in Section
5.1(a) hereof, without the consent of EVI and Sub, the Company may on such
terms as the Company may elect, so long as consistent with Company's normal and
customary course of doing business: (i) hire and terminate non-officer
employees, (ii) establish and modify the terms of employment on an individual
basis of non-officer employees, (iii) pay normal commissions to non-officer
employees and "good job" service bonuses to non-officer employees consistent
with past practice, (iv) incur and pay or not pay trade payables, (v) obtain
pipe inventory through consignment and increase the amount of the same, (vi)
increase the Company's current revolving line of credit up to $5,000,000, (vii)
purchase or lease threading equipment, (viii) manufacture and purchase pipe
protectors ("HDL's"), (ix) extend, collect, or not collect account receivables,
(x) incur, commit to, or make capital expenditures under the Company's 1997
capital budget provided to EVI, and (xi) complete all existing sales and
servicing obligations of the Company.
(c) The Company shall not without the prior written
consent of EVI and Sub (i) declare, set aside or pay any dividend (whether in
cash, stock or property) with respect to any of the Company's capital stock,
(ii) split, combine or reclassify any of the Company's capital stock or other
ownership interests or issue or authorize the issuance of any other securities
in respect of, in lieu of or in substitution for shares of, the Company's
capital stock or other ownership interests, (iii) issue any capital stock or
other ownership interests in any Subsidiary, (iv) purchase, redeem or acquire
any shares of the Company's or any Subsidiary's capital stock or other
ownership interests or (v) except as contemplated by this Agreement, enter into
or allow any Subsidiary to enter into any agreement or other transaction with a
Company Shareholder or an Affiliate of a Company Shareholder.
5.2 Maintain Assets and Operations. The Company shall (a) carry
on its business in the usual, regular and ordinary course in substantial
compliance with all applicable laws, rules and regulations, (b) use its best
efforts to preserve its business organization, maintain its rights and
franchises, keep available the services of its officers and employees and
preserve the goodwill and its relationships with customers, suppliers and
others having business dealings with it, (c) use its best efforts to preserve
in full force and effect all leases, operating agreements, easements,
rights-of-way, permits, licenses, contracts and other agreements which relate
to the Assets (other than those expiring by their terms), (d) use its best
efforts to perform or cause to be performed all of its obligations in or under
any of such leases, agreements and contracts and (e) use its best efforts to
safeguard and maintain secure all engineering data, reports and other
confidential data in the possession of the Company relating to the Assets,
including the Intellectual Property.
5.3 Litigation and Claims. The Company shall promptly inform EVI
and Sub in writing of any litigation, or any claim or controversy or contingent
liability of which the Company or any of its Subsidiaries becomes aware and
that might reasonably be expected to become the subject of litigation, against
the Company or its Subsidiaries or affecting any of its
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Assets, in each case in an amount in controversy in excess of $50,000, or that
is seeking to prohibit or restrict the transactions contemplated hereby.
5.4 Access to Information.
(a) Subject to the terms of the Confidentiality
Agreement, except to the extent otherwise required by United States regulatory
considerations, the Company shall, and shall cause each of its officers,
employees, counsel, financial advisors and other representatives to, afford to
EVI, and to EVI's accountants, counsel, financial advisors and other
representatives, reasonable access during the period from the date hereof to
the Effective Time to the Company's and its Subsidiaries' respective
properties, books, contracts, commitments and records and all information
concerning its business, properties, financial condition, operations and
personnel, including all accounting work papers of it and its outside auditors,
litigation files, patent files and Tax records, and, during such period, the
Company shall, and shall cause each of its officers, employees, counsel,
financial advisors and other representatives to, furnish promptly to EVI all
information concerning its business, properties, financial condition,
operations and personnel as EVI may from time to time reasonably request.
(b) Subject to the terms of the Confidentiality
Agreement, the Company agrees to advise EVI of all Material developments with
respect to the Company and its assets and liabilities from the date hereof to
the Effective Time.
(c) Subject to the terms of the Confidentiality
Agreement, except as required by law, each of the Company and EVI shall hold,
and cause its respective directors, officers, employees, accountants, counsel,
financial advisors and representatives and affiliates to hold, any nonpublic
information in confidence to the extent required by, and in accordance with,
the provisions of the Confidentiality Agreement. Any investigation by any
party of the assets and business of the other party and its subsidiaries shall
not affect any representations and warranties hereunder or either party's right
to terminate this Agreement as provided in Article 9 hereof.
(d) Subject to the terms of the Confidentiality
Agreement, except to the extent otherwise required by United States regulatory
considerations, the Company agrees to permit EVI and its representatives to
have, after the date of execution hereof, full access to all the books and
records of the Company and to request Deloitte & Touche LLP to permit Xxxxxx
Xxxxxxxx LLP, to review and examine the work papers of Deloitte & Touche LLP
with respect to the Company, and the officers of the Company will furnish to
EVI such financial and operating data and other information with respect to the
business and properties of the Company as EVI shall from time to time
reasonably request.
(e) The Company shall also promptly notify EVI of any
notices from or investigations by Governmental Entities that could Materially
affect the Company's business or assets. EVI will promptly notify the Company
of any notices from or investigations by Governmental Entities that could
Materially affect the consummation of the Merger.
5.5 HSR Filing.
(a) EVI, the Company, Sub and Hydril (collectively, the
"HSR Parties") shall make all premerger notification and report form filings
required under the HSR Act with respect to the Merger as promptly as reasonably
possible following execution and delivery of this Agreement. Each of the HSR
Parties agrees to use reasonable efforts to promptly respond to, and fully
address, any formal or informal inquiry or request for information by a
Governmental Entity regarding the transactions contemplated hereby.
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(b) Each of the HSR Parties will furnish one another
copies of all correspondence, filings or communications (or memoranda setting
forth the substance thereof (collectively, "HSR Documents")) between such HSR
Party, or any of its respective representatives, on the one hand, and any
Governmental Entity, or members of the staff of such agency or authority, on
the other hand, with respect to this Agreement or the Merger; provided,
however, that (A) with respect to documents and other materials filed by or on
behalf an HSR Party with the Antitrust Division of the Department of Justice,
the Federal Trade Commission or any state attorneys general that are otherwise
available for review by the other HSR Parties, copies will not be required to
be so provided, (B) the other HSR Parties may redact all revenue figures
relating to any service not provided or any product not manufactured or sold by
the other HSR Parties or any of their respective Subsidiaries (according to
such other HSR Parties' HSR Documents) and (C) with respect to any HSR Party's
Documents (1) that contain any information which, in the reasonable judgment of
such HSR Party's counsel, should not be furnished to such other HSR Parties'
counsel because of antitrust considerations or (2) relating to a request for
additional information pursuant to Section (e)(1) of the HSR Act, the
obligation of an HSR Party to furnish any such HSR Documents to the other HSR
Party's counsel shall be satisfied by the delivery of such HSR Documents on a
confidential basis to such other HSR Parties' counsel pursuant to an
appropriate confidentiality agreement to be entered into by Xxxxxx, Xxxx &
Xxxxxx, L.L.P., on behalf of the Company, Fulbright & Xxxxxxxx L.L.P., on
behalf of EVI and Sub, and Xxxxx & Xxxxx L.L.P., on behalf of Hydril.
(c) Notwithstanding the foregoing provisions in this
Section 5.5, nothing contained in this Agreement shall be construed so as to
require any of the HSR Parties, or any of their respective Subsidiaries or
Affiliates, to sell, license, dispose of or hold separate, or to operate in any
specified manner, any of their respective assets or businesses (or to require
any of the HSR Parties or any of their respective Subsidiaries or Affiliates to
agree to any of the foregoing). The obligations of each HSR Party under
Section 5.5(a) hereto to use reasonable efforts with respect to antitrust
matters shall be limited to compliance with the reporting provisions of the HSR
Act and with its obligations under Section 5.5(b).
5.6 Reasonable Efforts; Notification.
(a) Upon the terms and subject to the conditions set
forth in this Agreement, except to the extent otherwise required by United
States regulatory considerations and otherwise provided in Section 5.5 or this
Section 5.6, each of the parties agrees to use reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, and to assist
and cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Merger, and the other transactions contemplated by this
Agreement.
(b) The Company shall give prompt notice to EVI, and EVI
or Sub shall give prompt notice to the Company, of (i) any representation or
warranty made by it contained in this Agreement that is qualified as to
Materiality becoming untrue or inaccurate in any respect or any such
representation or warranty that is not so qualified becoming untrue or
inaccurate or (ii) the failure by it to comply with or satisfy in any Material
respect any covenant, condition or agreement to be complied with or satisfied
by it under this Agreement; provided, however, that no such notification shall
affect the representations or warranties or covenants or agreements of the
parties or the conditions to the obligations of the parties hereunder.
5.7 No Solicitation. Neither the Company nor any Company
Shareholder shall authorize or permit any officer, director or employee or any
investment bank, attorney or other advisor or representative of the Company or
any Affiliate of the Company to, solicit or initiate
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any proposal (other than any proposal by EVI or any of its Affiliates) for the
acquisition of the stock or a substantial portion of the Assets of the Company
or any proposal or offer (other than a proposal or offer by EVI or any of its
Affiliates) to acquire in any manner, directly or indirectly, an equity
interest in the Company, any voting securities of the Company or a substantial
portion of the Assets of the Company.
5.8 Employees. The Company shall use its reasonable best efforts
to (a) assist Sub in evaluating Sub's requirements as to which employees of the
Company Sub desires to continue as employees of the Surviving Corporation and
(b) cooperate with Sub to secure the continued employment of such persons.
5.9 Accounting Matters. Neither the Company nor any Company
Shareholder shall take or agree to take, nor shall they permit any of their
respective Affiliates to take or agree to take, any action that would prevent
EVI from accounting for the business combination to be effected by the Merger
as a pooling of interests.
5.10 Further Assurances.
(a) If at any time after the Effective Time, 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 the Company and Sub, the Surviving Corporation and its
proper officers and directors, in the name and on behalf of the Company 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
the Company or otherwise to take any and all such action.
(b) With respect to the conditions of EVI and Sub in
Article 7 that can be satisfied by an act by the Company, its officers or
directors, or by one or more of the Company Shareholders (without breach of
duty to another or to the Company and without exposing them to personal
liability for any obligation of the Company), the Company and each of the
Company Shareholders shall be obligated to do such acts as may be reasonably
required of them to satisfy such conditions. Without limitation, and only as a
non-exhaustive example, if any Company Shareholder is believed by EVI to be an
Affiliate, then such Company Shareholder will be obligated to timely deliver
the undertaking required by Section 7.9.
5.11 Discharge of Indebtedness. Simultaneously with the Closing,
EVI or the Surviving Company shall take such action as is necessary to have all
of the Company's shareholders released as guarantors of the Company's
indebtedness with Texas Commerce Bank, N.A.
5.12 Shareholder Approval; Voting; Restriction on Disposition.
(a) Each Company Shareholder hereby irrevocably (i)
waives notice of a meeting of shareholders for purpose of approving and
adopting this Agreement as contemplated by Article 5.03 of the TBCA, (ii)
acknowledges that the Board of Directors of the Company has taken all action to
approve the plan of merger described in this Agreement and has taken all other
action required to consummate the transactions provided for herein as
contemplated by Article 5.01 of the TBCA, (iii) approves and adopts, and
consents to the approval and adoption of this Agreement, the plan of merger
provided for herein and all transactions contemplated
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hereby, and (iv) waives any right to dissent or seek any appraisal rights on
account of the Merger. The Company and the Company Shareholders shall take
such additional action as may be necessary under the TBCA to approve the
Merger.
(b) Except as contemplated by this Agreement, prior to
the earlier of the Effective Time or the termination of this Agreement as
provided for herein, each of the Company Shareholders agrees that such Company
Shareholder will not contract to sell, sell, encumber or otherwise transfer or
dispose of any shares of Common Stock or any interest therein, or grant any
option or other right in respect thereof, or grant any voting rights with
respect thereto, without the prior written consent of EVI and Sub.
5.13 Release.
(a) AS OF THE EFFECTIVE TIME, EACH OF THE COMPANY
SHAREHOLDERS DOES HEREBY FOR ITSELF AND FOR HIMSELF OR HIS HEIRS, EXECUTORS,
ADMINISTRATORS AND LEGAL REPRESENTATIVES REMISE, RELEASE, ACQUIT AND FOREVER
DISCHARGE THE COMPANY AND ITS RESPECTIVE CONTROLLED AFFILIATES, PARTNERS,
SHAREHOLDERS, OFFICERS, DIRECTORS AND EMPLOYEES, IN THEIR CAPACITIES AS SUCH,
AND EACH AND ALL OF THE OTHER COMPANY SHAREHOLDERS AND THEIR SUCCESSORS AND
ASSIGNS OF AND FROM ANY AND ALL CLAIMS, DEMANDS, LIABILITIES, RESPONSIBILITIES,
DISPUTES, CAUSES OF ACTION AND OBLIGATIONS OF EVERY NATURE WHATSOEVER,
LIQUIDATED OR UNLIQUIDATED, KNOWN OR UNKNOWN, MATURED OR UNMATURED, FIXED OR
CONTINGENT, WHICH EACH OF SUCH COMPANY SHAREHOLDERS NOW HAS, OWNS OR HOLDS OR
HAS AT ANY TIME PREVIOUSLY HAD, OWNED OR HELD AGAINST THE COMPANY, OR SUCH
PERSON IN SUCH CAPACITY, INCLUDING WITHOUT LIMITATION ALL LIABILITIES CREATED
AS A RESULT OF THE NEGLIGENCE, GROSS NEGLIGENCE AND WILLFUL ACTS OF THE COMPANY
AND ITS EMPLOYEES AND AGENTS OR THE OTHER COMPANY SHAREHOLDERS, EXISTING AS OF
THE EFFECTIVE TIME OR RELATING TO ANY MATTER THAT OCCURRED ON OR PRIOR TO THE
EFFECTIVE TIME, INCLUDING ANY MATTER RELATING TO THE MERGER, THE EXECUTION AND
NEGOTIATION OF THE MERGER AGREEMENT AND ANY MATTER RELATING TO THE STOCK
RESTRICTION AGREEMENT OR THE OTHER XLH FORMATION AGREEMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES THEREUNDER IN RESPECT OF EACH OTHER; PROVIDED,
HOWEVER, THAT ANY CLAIMS, LIABILITIES, DEBTS OR CAUSES OF ACTION THAT MAY ARISE
IN THE CONNECTION WITH THE FAILURE OF ANY OF THE PARTIES HERETO TO PERFORM ANY
OF THEIR OBLIGATIONS (I) HEREUNDER OR UNDER ANY OTHER AGREEMENT RELATING TO THE
TRANSACTIONS CONTEMPLATED HEREBY, (II) UNDER ANY OF THE HYDRIL AGREEMENTS OR
(III) FROM ANY BREACHES BY ANY OF THEM OF THIS AGREEMENT OR ANY OTHER AGREEMENT
SHALL NOT BE RELEASED OR DISCHARGED PURSUANT TO THIS AGREEMENT; AND PROVIDED
FURTHER ANY LIABILITIES UNDER BENEFIT PLANS LISTED ON THE SCHEDULES HERETO OR
UNDER THE HYDRIL LICENSE AGREEMENT SHALL NOT BE RELEASED.
(b) EACH OF THE COMPANY SHAREHOLDERS REPRESENTS AND
WARRANTS THAT SUCH COMPANY SHAREHOLDER HAS NOT PREVIOUSLY ASSIGNED OR
TRANSFERRED, OR PURPORTED TO ASSIGN OR TRANSFER, TO ANY PERSON OR ENTITY
WHATSOEVER ALL OR ANY PART OF THE CLAIMS, DEMANDS, LIABILITIES,
RESPONSIBILITIES, DISPUTES, CAUSES OF ACTION OR OBLIGATIONS RELEASED HEREIN.
EACH OF THE COMPANY SHAREHOLDERS COVENANTS AND AGREES THAT HE WILL NOT ASSIGN
OR TRANSFER TO ANY PERSON OR ENTITY WHATSOEVER ALL OR ANY PART OF THE CLAIMS,
DEMANDS, LIABILITIES, RESPONSIBILITIES, DISPUTES, CAUSES OF ACTION OR
OBLIGATIONS TO BE RELEASED HEREIN. EACH OF THE COMPANY SHAREHOLDERS REPRESENTS
AND WARRANTS THAT HE HAS READ AND UNDERSTANDS ALL OF THE PROVISIONS OF THIS
SECTION 5.16 AND THAT HE HAS BEEN REPRESENTED BY LEGAL COUNSEL OF HIS OWN
CHOOSING IN CONNECTION WITH THE NEGOTIATION, EXECUTION AND DELIVERY OF THIS
AGREEMENT.
5.14 Stockholder Agreements.
(a) The Class A Shareholders Agreement effective as of
July 1, 1994, by, between and among Xxxx Xxxxx, Xxxx Xxx Xxxxx, The Xxxx Xxxx
Xxxxxxx "S" Corp. Trust,
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Xxxxxx X. Xxxx, Xx., Xxxxxxxx Xxxx, The Xxxxx Xxxxxxxx Xxxx "S" Corp. Trust and
W. A. Xxxxxx and Xxxxx Xxx Xxxxxx shall be terminated effective as of the
Effective Time.
(b) The Stock Restriction Agreement and the Registration
Rights and Buy-Sell Agreement effective as of July 1, 1994, by and among Hydril
and the holders of the Class A Common Stock named therein, XL Systems, Inc. and
the Company shall terminate and be of no further effect as of the Effective
Time.
5.15 [Intentionally Omitted].
5.16 New License Agreement. At the Closing, Hydril and EVI shall
execute and deliver a License Agreement in the form of Exhibit 5.16 hereto,
whereupon all parties hereto agree that the Wedge Thread License Agreement
between Hydril and the Company, and all sublicenses thereunder, shall have no
further force or effect. EVI agrees to cause each Subsidiary of the Company
that is a sublicensee of the Company to deliver to Hydril an acknowledgement of
the foregoing. Hydril agrees to cause each Person in which Hydril owns any
direct or indirect equity or other similar ownership interest that is a
sublicensee of Hydril to deliver to EVI an acknowledgement of the foregoing.
ARTICLE 6
REGISTRATION RIGHTS
6.1 Shelf Registration.
(a) On or prior to the date on which final results of
operations of EVI covering at least 30 days of combined operations of EVI and
the Surviving Corporation have been published by EVI, EVI shall (i) prepare and
file with the Commission a registration statement on Form S-3 (the "Shelf
Registration Statement") covering the shares of EVI Common Stock issued to the
Company Shareholders pursuant to the Merger (and references in this Article 6
to "EVI Common Stock" shall be deemed to include any Escrow Shares and any
shares of common stock or other securities received by the Company Shareholders
on account of any stock split, stock dividend or merger of EVI) for the
nonunderwritten offering and sale by the Company Shareholders of such EVI
Common Stock on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act, and (ii) use its best efforts to cause the Shelf Registration
Statement to become effective as soon as possible after the filing thereof so
as to permit the secondary resale of such EVI Common Stock by the Company
Shareholders or any of them.
(b) Notwithstanding the provisions of Section 6.1(a), if
the Board of Directors of EVI determines in good faith, expressed by a
resolution specifying the reason therefor, that the secondary offer and resale
of EVI Common Stock by the Company Shareholders as contemplated by Section
6.1(a) would materially and adversely affect a pending or proposed public
offering of securities of EVI, an acquisition, merger, recapitalization,
consolidation, reorganization or similar transaction relating to EVI or
negotiations, discussions or pending proposals with respect thereto or require
premature disclosure of information not otherwise required to be disclosed to
the potential detriment of EVI, then upon not less than two Business Days'
prior written notice of such determination to each of the Company Shareholders,
EVI shall be entitled to require the suspension by the Company Shareholders of
any distribution of EVI Common Stock under the Shelf Registration Statement for
a reasonable period of time which, for purposes of this Section 6.1(b), shall
not exceed 60 days nor 45 days after the abandonment or consummation of the
proposal or transaction. Such written notice shall contain a general statement
of the reasons for such suspension, a copy of
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the resolution adopted by EVI's Board of Directors certified by EVI's corporate
secretary and an estimate of the anticipated period of suspension. EVI shall
promptly notify each of the Company Shareholders of the expiration or earlier
termination of such suspension.
(c) Notwithstanding the provisions of Section 6.1(a), if
EVI shall file a registration statement with respect to an offering by it
through an underwriter or group of underwriters (an "Underwriter Registration
Statement") of EVI Common Stock or securities convertible into or exchangeable
or exercisable for EVI Common Stock, and the managing underwriter or
underwriters advise EVI that a sale or distribution of the EVI Common Stock
covered by the Shelf Registration Statement would adversely affect such
offering, then upon written notice to each of the Company Shareholders by or on
behalf of such underwriters, the Company Shareholders shall, to the extent not
inconsistent with applicable law, suspend the distribution of any shares of EVI
Common Stock pursuant to the Shelf Registration Statement during a period
specified by or on behalf of such underwriters, which period shall not be
greater than 10 days prior to or 90 days following the effective date of such
Underwriter Registration Statement. The period following the effective date of
such Underwriter Registration Statement shall be subject to early termination
by the managing underwriter or underwriters. Following the expiration or
termination of any such suspension pursuant to this Section 6.1(c), no other
suspension may be imposed pursuant to Section 6.1(c) for at least 90 days.
(d) The filing of a Shelf Registration Statement pursuant
to Section 6.1(a) shall not limit or deny a Company Shareholder such Company
Shareholder's rights under Section 6.2 or vice versa.
6.2 Piggyback Rights.
(a) If, at any time prior to the first anniversary of the
date of this Agreement, EVI proposes to register under the Securities Act any
shares of EVI Common Stock for sale by it pursuant to an underwritten public
offering of the EVI Common Stock (except with respect to registration
statements filed on Form S-4 or such other forms as shall be prescribed under
the Securities Act for the same purposes as such form), it will at each such
time, prior to the filing of any such registration statement, give written
notice to the Company Shareholders who then hold shares of EVI Common Stock of
its intention so to do and, upon the written request (which must specify the
number of shares of EVI Common Stock to participate in such underwritten
offering) of any of the Company Shareholders delivered to EVI within five days
of receipt of EVI's notice, EVI will use its best efforts to cause any EVI
Common Stock issued to such requesting Company Shareholder pursuant to the
Merger as to which registration shall have been so requested to be included in
the shares to be covered by the registration statement proposed to be filed by
EVI for sale by it in such offering, all to the extent requisite to permit the
sale or other disposition (in accordance with the written request of the
Company Shareholders as aforesaid) by such of the Company Shareholders of such
EVI Common Stock in such offering as have so requested such registration.
Nothing contained in this Section 6.2 shall, however, limit EVI's right to
cancel, postpone or withdraw any such proposed registration for any reason.
(b) Any request by the Company Shareholders pursuant to
this Section 6.2 to register EVI Common Stock for sale in the underwriting
shall be on the same terms and conditions as the shares of EVI Common Stock to
be registered, if any, and sold through underwriters under such registration;
provided, however, that as a condition to such inclusion the requesting Company
Shareholders shall execute an underwriting agreement acceptable to the
underwriters and, if requested, a custody agreement having such customary terms
as the underwriters shall request, including indemnification, and if the
managing underwriter
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determines and advises in writing that the inclusion in the underwriting of all
EVI Common Stock proposed to be included by the requesting Company Shareholders
and any other shares of EVI Common Stock sought to be registered by any other
shareholder of EVI exercising rights comparable to those of the Company
Shareholders under this Agreement (the "Other Common Stock") would, in its
reasonable and good faith judgment, interfere with the successful marketing of
the securities proposed to be registered for underwriting by EVI or by any
holder of EVI Common Stock having the right to require EVI to file a
registration statement to register such EVI Common Stock, then the number of
shares of EVI Common Stock and Other Common Stock requested to be included in
the underwriting shall be reduced pro rata among the Company Shareholders and
the holders of Other Common Stock requesting such registration and inclusion in
the underwriting and may, in the determination of such managing underwriter and
consistent with pro rata reduction, be reduced to zero.
6.3 Procedure. If and whenever EVI is required by the provisions
of this Agreement to use its best efforts to effect the registration of any EVI
Common Stock under the Securities Act, EVI will, subject to the provisions of
Sections 6.1, 6.2 and 6.5 hereof:
(a) as expeditiously as reasonably practicable, prepare
and file with the Commission a registration statement on the appropriate form
with respect to such EVI Common Stock and use reasonable efforts to cause such
registration statement to become and remain effective;
(b) as expeditiously as reasonably practicable, prepare
and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may
be necessary to keep such registration statement effective and to comply with
the provisions of the Securities Act with respect to the disposition of such
EVI Common Stock covered by such registration statement in accordance with the
intended method of distribution set forth in such registration statement;
(c) as expeditiously as reasonably practicable, furnish
to each of the Company Shareholders selling EVI Common Stock registered, or to
be registered under the Securities Act, such number of copies of prospectuses
and preliminary prospectuses in conformity with the requirements of the
Securities Act, and such other documents as such seller may reasonably request,
in order to facilitate the public sale or other disposition of such EVI Common
Stock owned by such seller; provided, however, that the obligation of EVI to
deliver copies of prospectuses or preliminary prospectuses to such Company
Shareholders shall be subject to the receipt by EVI of reasonable assurances
from such Company Shareholders that they will comply with the applicable
provisions of the Securities Act and of such other securities laws as may be
applicable in connection with any use by it of any prospectuses or preliminary
prospectuses;
(d) as expeditiously as practicable, use its best efforts
to register or qualify EVI Common Stock covered by such registration statement
under such other securities laws of such United States jurisdictions as the
Company Shareholders making such request shall reasonably request (considering
the nature and size of the offering) and do any and all other acts and things
which may be necessary or desirable to enable the Company Shareholders making
such request to consummate the public sale or other disposition in such
jurisdictions of EVI Common Stock owned by such Company Shareholders; provided,
however, that the Company shall not be required to qualify to transact business
as a foreign corporation in any jurisdiction in which it would otherwise not be
required to be so qualified or to take any action which would subject it to
general service of process in any jurisdiction in which it is not then so
subject;
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(e) bear all Registration Expenses (as defined below) in
connection with all registrations hereunder; provided, however, that all
Selling Expenses (as defined below) of EVI Common Stock held by the Company
Shareholders and all fees and disbursements of counsel for the Company
Shareholders in connection with each registration pursuant to this Agreement
shall be borne by such Company Shareholders pro rata in proportion to the
number of shares of EVI Common Stock covered thereby being sold or in such
proportion as they may agree. For purposes of this Section 6.3, expenses
incurred by EVI in complying with this Agreement, including, without
limitation: (i) all registration and filing fees; (ii) all printing expenses;
(iii) all fees and disbursements of counsel for EVI; (iv) all blue sky fees and
expenses; and (v) all fees and expenses of accountants for EVI are herein
referred to as "Registration Expenses". All underwriting fees and discounts
and brokerage and selling commissions and fees and expenses of the counsel for
the Company Shareholders and any underwriter's counsel applicable to the sales
in connection with any such registration are herein referred to as "Selling
Expenses"; and
(f) keep the registration statement filed pursuant to
Section 6.1 hereof effective until the first anniversary of the Effective Date
or such shorter period of time until the transfer or sale of all EVI Common
Stock so registered has been completed.
6.4 Indemnification.
(a) In the event of a registration of any EVI Common
Stock under the Securities Act pursuant to this Agreement, EVI will indemnify
and hold harmless each selling Company Shareholder and any other Person, if
any, who controls such selling Company Shareholder within the meaning of
Section 15 of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which such selling Company Shareholder or
such controlling Person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities or actions in
respect thereof arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained, on the effective date thereof,
in any registration statement under which such EVI Common Stock was registered
under the Securities Act, any preliminary prospectus distributed with the
consent of EVI or final prospectus contained therein, or any amendment thereof
or supplement thereto, including all documents incorporated by reference
therein, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will, unless EVI assumes the
defense as provided in Section 6.4(c), promptly following request and receipt
of reasonable supporting documents, such as invoices, reimburse each such
Company Shareholder and each such controlling Person for any legal or any other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
such Company Shareholder delivers to EVI a written agreement acceptable to EVI
agreeing to promptly reimburse EVI in the event it is determined that such
Company Shareholder was not entitled to indemnification hereunder; provided
further, however, that EVI will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, such preliminary prospectus, such final
prospectus or such amendment or supplement, including all documents
incorporated by reference therein, in reliance upon and in conformity with
written information furnished to EVI by or on behalf of any of the Company
Shareholders or a controlling Person of any of the Company Shareholders
specifically for use in the preparation thereof.
(b) In the event of any registration of any EVI Common
Stock under the Securities Act pursuant to this Agreement, each selling Company
Shareholder of such EVI Common Stock will severally indemnify and hold harmless
EVI and each Person, if any, who
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controls EVI within the meaning of Section 15 of the Securities Act, each
officer of EVI who signs the registration statement, each director of EVI and
each underwriter (if any) and each Person who controls any underwriter (if any)
within the meaning of Section 15 of the Securities Act, against any and all
such losses, claims, damages, liabilities or actions which EVI or such officer,
director, underwriter (if any) or controlling Person may become subject under
the Securities Act or otherwise, and will reimburse EVI, each such officer,
director, underwriter (if any) and controlling Person for any legal or any
other expenses reasonably incurred by such party in connection with
investigating or defending any such loss, claim, damage, liability or action,
if (a) such loss, claim, damage, liability or action in respect thereof arises
out of or is based upon any untrue statement or alleged untrue statement of any
material fact contained in any such registration statement or any such
prospectus, or any amendment thereof or supplement thereto, or arises out of or
is based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading and such statement or omission of a material fact was made in
reliance upon and in conformity with written information furnished to EVI on
behalf of such Company Shareholder specifically for use in connection with the
preparation of such registration statement or prospectus or (b) such loss,
claim, damage, liability or action in respect thereof arises out of or is based
upon such Company Shareholder's failure to deliver any required prospectus or
otherwise comply with applicable laws regarding the same. In connection with
any transaction contemplated by Section 6.2 hereof, the Company Shareholders
also agree to indemnify each such underwriter and each Person who controls any
such underwriter within the meaning of Section 15 of the Securities Act as may
reasonably and customarily be requested by the underwriters in connection with
any underwritten offering of such EVI Common Stock.
(c) Promptly after receipt by any indemnified Person of
notice of any claim or commencement of any action in respect of which indemnity
is to be sought against an indemnifying Person pursuant to this Agreement, such
indemnified Person shall notify the indemnifying Person in writing of such
claim or of the commencement of such action, and, subject to provisions
hereinafter stated, in case any such action shall be brought against an
indemnified Person and such indemnifying Person shall have been notified of the
same, such indemnifying Person shall be entitled to participate therein, and,
to the extent it shall wish, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified Person, and after notice from the
indemnifying Person to such indemnified Person of its election to assume the
defense thereof, such indemnifying Person shall not be liable to such
indemnified Person in connection with the defense thereof; provided, however,
if there exists or will exist a conflict of interest which would make it
inappropriate in the reasonable judgment of the indemnified Person for the same
counsel to represent both the indemnified Person and such indemnifying Person
then such indemnifying Person shall be entitled to retain its own counsel at
the expense of such indemnifying Person; provided further, however, the
indemnifying Person shall not be required to pay for more than one separate
counsel for all of the indemnified Persons in addition to any local counsel.
6.5 Termination. If Rule 144 or Rule 145 as promulgated under the
Securities Act or any successor or similar rule or statute shall permit the
sale by a Company Shareholder at any time over a period of 90 consecutive days
of all the shares of EVI Common Stock received by the Company Shareholders in
compliance with the conditions thereof and the provisions thereof, then the
rights of the Company Shareholders as to registration provided for in this
Agreement with respect to all of that Company Shareholder's EVI Common Stock
shall terminate immediately.
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6.6 NYSE Listing. EVI shall take all action necessary to cause
all shares of the EVI Common Stock to be issued pursuant to this Agreement to
be listed on the NYSE upon official notice of issuance to NYSE.
ARTICLE 7
CONDITIONS TO EVI'S AND SUB'S OBLIGATIONS
The obligations of EVI and Sub to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction (or waiver
by EVI and Sub) on or prior to the Closing of all of the following conditions:
7.1 Accuracy of Representations and Warranties. The
representations and warranties of the Company set forth in this Agreement shall
be true and correct in all respects as of the date when made and at and as of
the Closing.
7.2 Performance of Covenants and Agreements. The Company and its
Subsidiaries shall have duly performed and complied in all material respects
with the covenants, agreements and conditions required by this Agreement to be
performed by or complied with by them prior to or at the Effective Time. None
of the events or conditions entitling EVI or Sub to terminate this Agreement
under Article 9 hereof shall have occurred and be continuing.
7.3 Consents. Any consent required for the consummation of the
Merger under any agreement, contract, license or other instrument described in
any exhibit hereto or referred to herein, or for the continued enjoyment by the
Surviving Corporation of the benefits of any such agreement, contract, license
or other instrument after the Merger, shall have been obtained and be
effective.
7.4 Governmental Approvals. All necessary actions or nonactions,
waivers, consents and approvals from Governmental Entities and the making of
all necessary registrations and filings (including filings with Governmental
Entities, if any) and the taking of all reasonable steps as may be necessary to
obtain an approval or waiver from, or to avoid an action or proceeding by, any
Governmental Entity shall have been obtained, made or lapsed and shall be in
full force and effect.
7.5 Resignation of Directors. EVI and Sub shall have received
from the Company letters of resignation effective as of the Effective Date from
the directors and officers of the Company and its Subsidiaries.
7.6 Resolutions. EVI and Sub shall have received certified copies
of resolutions of the Board of Directors and Company Shareholders approving
this Agreement, the Merger and the transactions contemplated hereby.
7.7 Certificates. EVI and Sub shall have received a certificate
of the Company, satisfactory in form and substance to EVI and Sub, executed on
behalf of the Company by the President of the Company, as to compliance with
the matters set forth in Sections 7.1, 7.2, 7.3 and 7.4 of this Agreement.
7.8 Opinion of Counsel. EVI and Sub shall have received an
opinion of counsel to the Company in substantially the form attached hereto as
Exhibit 7.8.
7.9 Affiliate Letters. EVI shall have received from the Company a
list of such Persons, if any, that EVI, after discussions with counsel for the
Company, believes may be
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"affiliates" of the Company, within the meaning of Rule 145 under the
Securities Act ("Affiliates"). The Company shall deliver or cause to be
delivered to EVI an undertaking by each Affiliate in form satisfactory to EVI
that (i) no disposition will be made by such Affiliate of any EVI Common Stock
received or to be received pursuant to the Merger until such time as final
results of operations of EVI covering at least 30 days of combined operations
of EVI and the Company have been published and (ii) no EVI Common Stock
received or to be received by such Affiliate pursuant to the Merger will be
sold or disposed of except pursuant to an effective registration statement
under the Securities Act or in accordance with the provisions of Rule 144 or
paragraph (d) of Rule 145 under the Securities Act or another exemption from
registration under the Securities Act.
ARTICLE 8
CONDITIONS TO THE COMPANY'S OBLIGATIONS
The obligations of the Company and Company Shareholders to consummate
the transactions contemplated by this Agreement shall be subject to the
satisfaction (or waiver by the Company) on or prior to the Closing of all of
the following conditions:
8.1 Accuracy of Representations and Warranties. The
representations and warranties of EVI and Sub set forth in this Agreement shall
be true and correct in all respects as of the date when made and at and as of
the Closing.
8.2 Performance of Covenants and Agreements. EVI and Sub shall
have duly performed and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed by or
complied with by it prior to or at the Effective Time. None of the events or
conditions entitling the Company to terminate this Agreement under Article 9
hereof shall have occurred and be continuing.
8.3 Governmental Approvals. All necessary actions or nonactions,
waivers, consents and approvals from Governmental Entities and the making of
all necessary registrations and filings (including filings with Governmental
Entities, if any) and the taking of all reasonable steps as may be necessary to
obtain an approval or waiver from, or to avoid an action or proceeding by, any
Governmental Entity shall have been obtained, made or lapsed and shall be in
full force and effect.
8.4 Opinion of Counsel. The Company and the Company Shareholders
shall have received an opinion of counsel to EVI and Sub in substantially the
form attached hereto as Exhibit 8.4.
ARTICLE 9
TERMINATION PRIOR TO CLOSING
9.1 Termination. This Agreement may be terminated at any time
prior to the Closing:
(a) By the mutual written consent of EVI, Sub, Company,
and all of the Company Shareholders; or
(b) By any of EVI, Sub, the Company or Company
Shareholders owning at least 50% of the Common Stock in writing if the Merger
shall not have been consummated on or before August 31, 1997, unless the
failure to consummate the Merger is the result of a Default by the party
seeking to terminate this Agreement; or
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(c) By EVI or Sub in writing if the Company or any
Company Shareholder shall be in Default; or
(d) By the Company in writing if EVI or Sub shall be in
Default; or
(e) By any of EVI, Sub or the Company in writing if any
Court of competent jurisdiction or any Governmental Entity shall have issued an
order, decree or ruling or taken any other action seeking to enjoin, restrain
or otherwise prohibit the consummation of the Merger;
(f) By EVI or Sub if, after the date of this Agreement,
there shall have occurred a Material adverse change (or any development or
condition involving a prospective Material adverse change) in the Company
Condition;
(g) By EVI, Sub or the Company if the average closing
sale price per share of the EVI Common Stock as reported by the NYSE for the
twenty consecutive trading days immediately prior to notice of termination
being provided to EVI by the Company is less than $27.50; or
(h) By the Company or by the holders of a majority of the
Class A Common Stock if the average closing sale price per share of the EVI
Common Stock as reported by the NYSE for the twenty consecutive trading days
immediately prior to notice of termination being provided to EVI by the Company
is greater than $50.00.
9.2 Effect on Obligations. Termination of this Agreement pursuant
to this Article 9 shall terminate all obligations of the parties hereunder;
provided, however, that termination pursuant to clauses (c) or (d) of Section
9.1 hereof shall not relieve any Defaulting party from any liability to the
other parties hereto if, and only if, such Default is the result of a knowing
and willful breach of this Agreement by the Defaulting party and that, in the
case of a Default as a result of an incorrect representation, the
representation was known by an officer of the Defaulting party to have been
incorrect as of the date initially made.
9.3 Payment of Hydril Expenses. If the Merger does not close as a
result of a breach by EVI, EVI will pay to Hydril its out of pocket expenses
relating to this Agreement and the Merger, including expenses paid to any
investment bank retained by it, subject to a maximum reimbursement of $250,000.
ARTICLE 10
NATURE OF STATEMENTS AND SURVIVAL OF COVENANTS,
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
The representations and warranties set forth in Articles 3 and 4 shall
survive the Effective Date without limitation. The representations and
warranties of the Company shall not survive the Closing and the Company
Shareholders and the Company's officers and directors shall have no obligation
or liability therefor. The covenants and agreements entered into pursuant to
this Agreement (other than covenants and agreements constituting those
representations and warranties that do not survive the Closing as set forth in
the preceding sentence) shall survive the Closing without limitation.
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ARTICLE 11
DEFINITIONS
Capitalized terms used in this Agreement shall have the meanings given
to them in this Article 11 unless defined elsewhere in this Agreement.
11.1 "Affiliate" shall have the meaning such term is given in
Section 7.9 hereof.
11.2 "Agreement" shall have the meaning such term is given in the
introductory paragraph to this Agreement.
11.3 "Amended License Agreement" shall have the meaning such term
is given in Section 5.16 hereof.
11.4 "Assets" shall mean all the assets and properties owned by the
Company, tangible and intangible, real, personal and mixed.
11.5 "Base Common Stock Conversion Rate" shall have the meaning
such is given in Section 1.3(a) hereof.
11.6 "Benefit Plan" shall mean any collective bargaining agreement
or any bonus, pension, profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option, phantom stock,
retirement, vacation, severance, disability, death benefit, hospitalization,
medical dependent care, cafeteria, employee assistance, scholarship program or
other plan, arrangement or understanding (whether or not legally binding)
providing benefits to any current or former employee or director of the Company
or a Subsidiary of the Company.
11.7 "Business Day" shall mean any day other than Saturday, Sunday
or other day on which federally chartered commercial banks in Houston, Texas
are authorized or required by law to close.
11.8 "CERCLA" shall mean the Comprehensive Environmental, Response,
Compensation, and Liability Act of 1980, as amended.
11.9 "Class A Common Stock" shall mean the Class A common stock,
$1.00 par value, of the Company.
11.10 "Class B Common Stock" shall mean the Class B common stock,
$1.00 par value, of the Company.
11.11 "Class A Shareholders" shall have the meaning such term is
given in the recitals to this Agreement.
11.12 "Closing" shall have the meaning such term is given in Section
1.2 hereof.
11.13 "Code" shall mean the Internal Revenue Code of 1986, as
amended.
11.14 "Commission" shall mean the United States Securities and
Exchange Commission.
11.15 "Common Stock" shall mean the Class A Common Stock and the
Class B Common Stock.
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11.16 "Common Stock Conversion Rate" shall have the meaning such
term is given in Section 1.3(a) hereof.
11.17 "Company" shall have the meaning such term is given in the
introductory paragraph to this Agreement.
11.18 An event, matter or circumstance will be deemed to affect the
"Company Condition" if it would affect the business, results of operations,
financial condition, Assets or prospects of the Company and its Subsidiaries,
taken as a whole.
11.19 "Company Shareholder" shall have the meaning such term is
given in Section 1.3(b) hereof.
11.20 "Confidentiality Agreement" shall mean the Confidentiality
Agreement between the Company and EVI dated as of May 8, 1997.
11.21 "Consent Judgments" shall mean the consent judgments entered
into in respect of the pleadings in Civil Actions Nos. H-89-2780 and H-94-0502
in the United States District Court for the Southern District of Texas, Houston
Division.
11.22 "Consideration" shall have the meaning such term is given in
Section 1.3(a) hereof.
11.23 "Default" shall mean, as to any party to this Agreement, (a) a
default by such party in the performance of any of its Material obligations
hereunder and the continuation of such default for a period of ten Business
Days after written notice is delivered by Sub or EVI (in the case of a default
by the Company) or by the Company or the holders of a majority of the Class A
Common Stock (in the case of a default by Sub or EVI) to the defaulting party
that a default has occurred or (b) the Material breach of any representation or
warranty of such party hereunder and the continuation of such breach for a
period of ten Business Days after written notice is delivered by Sub or EVI (in
the case of a breach by the Company) or by the Company or the holders of a
majority of the Class A Common Stock (in the case of a breach by Sub or EVI) to
the breaching party that a breach has occurred.
11.24 "Deficiency" shall have the meaning given such term in Section
1.7(a) hereof.
11.25 "Effective Date" shall have the meaning such term is given in
Section 1.2 hereof.
11.26 "Effective Date Balance Sheet" shall have the meaning such
term is given in Section 1.7(a) hereof.
11.27 "Effective Time" shall mean the date and time when the Merger
shall become effective.
11.28 "Encumbrance" shall mean any security interest, mortgage,
pledge, trust, claim, lien, charge, option, defect, restriction, encumbrance or
other right or interest of any third Person of any nature whatsoever.
11.29 "Environmental Laws" shall mean any and all laws, statutes,
ordinances, rules, regulations, orders, or determinations of any Governmental
Entity pertaining to the environment heretofore or currently in effect in any
and all jurisdictions in which the Company is conducting or at any time has
conducted business, or where any of the Assets are located, or where any
hazardous substances generated by or disposed of by the Company are
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located. "Environmental Laws" shall include, but not be limited to, the Clean
Air Act, as amended, CERCLA, the Federal Water Pollution Control Act, as
amended, RCRA, the Safe Drinking Water Act, as amended, the Toxic Substances
Control Act, as amended, and all other laws, statutes, ordinances, rules,
regulations, orders and determinations of any Governmental Entity relating to
(a) the control of any potential pollutant or protection of the air, water or
land, (b) solid, gaseous or liquid waste generation, handling, treatment,
storage, disposal or transportation and (c) exposure to hazardous, toxic or
other harmful substances. The terms "hazardous substance", "release" and
"threatened release" have the meanings specified in CERCLA, and the terms
"solid waste" and "disposal" (or "disposed") have the meanings specified in
RCRA; provided, however, that, to the extent the laws of the state in which any
Assets are or were located currently provide for a meaning for "hazardous
substance", "release", "solid waste" or "disposal" which is broader than that
specified in either CERCLA or RCRA, such broader meaning shall apply.
11.30 "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
11.31 "Escrow Shares" shall have the meaning such term is given in
Section 1.4(b).
11.32 "EVI" shall have the meaning such term is given in the
introductory paragraph to this Agreement.
11.33 "EVI Common Stock" shall mean the common stock, $1.00 par
value, of EVI.
11.34 "EVI HSR Documents" shall have the meaning such term is given
in Section 5.5(b) hereof.
11.35 "Excess" shall have the meaning such term is given in Section
1.7(a) hereof.
11.36 "Financial Statements" shall have the meaning such term is
given in Section 2.5(a) hereof.
11.37 "Governmental Entity" shall mean the United States of America,
any state, province, territory, county, city, municipality and any subdivision
thereof, any court, administrative or regulatory agency, commission, department
or body or other governmental authority or instrumentality or any entity or
Person exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
11.38 [Intentionally Omitted].
11.39 "HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended.
11.40 "HSR Documents" shall have the meaning such term is given in
Section 5.5(b) hereof.
11.41 "HSR Parties" shall have the meaning such term is given in
Section 5.5(a) hereof.
11.42 "Hydril" shall mean Hydril Company, a Delaware corporation.
11.43 "Hydril Agreements" shall mean the Wedge Thread License
Agreement, the Settlement Agreement and the Consent Judgments.
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11.44 "Interim Financial Statements" shall have the meaning such
term is given in Section 2.5(b) hereof.
11.45 "Intellectual Property" shall mean patents, patent rights,
trademarks, trademark rights, trade names, trade name rights, service marks,
service xxxx rights, copyrights, technology, know how, trade secrets, designs,
plans, manuals, processes and other proprietary intellectual property rights
and computer programs, and all registrations for, and applications for
registration of, any of the foregoing.
11.46 "IRS" shall mean the United States Internal Revenue Service.
11.47 "Market Price" shall have the meaning such term is given in
Section 1.3(a) hereof.
11.48 A single event, occurrence, fact or matter will be deemed to
be "Material", to have a "Material" adverse effect, to cause a "Material"
change or to be "Materially" affected if such event, occurrence, fact or
matter, together with all other events, occurrences, facts or matters that
could reasonably be expected to result in a material loss to the Company and
its Subsidiaries, taken as a whole, would have, or might reasonably be expected
to have, a material adverse effect on the Company Condition, or that would
constitute a criminal violation of law involving a felony.
11.49 "Merger" shall have the meaning such term is given in the
recitals to this Agreement.
11.50 "Multiemployer Pension Plans" shall have the meaning such term
is given in Section 2.7(g) hereof.
11.51 "Net Equity" shall mean, in accordance with generally accepted
accounting principles and with reference to the Company's consolidated balance
sheet, (i) the difference between total assets and total liabilities (including
deferred income tax liabilities and capital lease obligations) less (ii) all
liabilities of the Company determined in accordance with generally accepted
accounting principles to the extent such liabilities are not otherwise included
in the Company's consolidated balance sheet; provided, however, there shall be
excluded from the calculation of Net Equity (i) any increases in the carrying
value of any assets by virtue of adjustments made after December 31, 1996, (ii)
increases due to the recognition of any non-cash income after December 31,
1996, other than in connection with any sales of products and services in the
ordinary course of business and (iii) any increase in equity as a result of
unrealized gains, translation adjustments, reversals of accruals for contingent
liabilities or changes in accounting.
11.52 "NYSE" shall mean the New York Stock Exchange, Inc.
11.53 "Other Common Stock" shall have the meaning such term is given
in Section 6.2(b) hereof.
11.54 "PBGC" shall mean the Pension Benefit Guaranty Corporation.
11.55 "Pension Plans" shall have the meaning such term is given in
Section 2.7(a) hereof.
11.56 "Permitted Encumbrances" shall mean (a) Encumbrances for
current taxes and assessments not yet past due or which are being contested in
good faith by appropriate
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proceedings and with respect to which adequate reserves are reflected in the
Financial Statements, (b) mechanics and materialmen Encumbrances for
construction in progress to the extent not perfected by filing, recording,
giving of notice or other appropriate action in the relevant jurisdiction, (c)
workmen, repairmen, warehousemen, carriers, lessors and operators Encumbrances
arising in the ordinary course of business to the extent not perfected by
filing, recording, giving of notice or other appropriate action in the relevant
jurisdiction, (d) easements, including agreements and deeds of easement, and
(e) other imperfections of title which would not have a Material adverse effect
on the Company Condition.
11.57 "Person" shall mean any individual, corporation, association,
partnership, joint venture, trust, estate or unincorporated organization or
Governmental Entity.
11.58 "RCRA" shall mean the Resource Conservation and Recovery Act
of 1976, as amended.
11.59 "Registration Expenses" shall have the meaning such term is
given in Section 6.3(e) hereof.
11.60 "SEC Documents" shall have the meaning such term is given in
Section 4.6 hereof.
11.61 "Securities Act" shall mean the Securities Exchange Act of
1933, as amended.
11.62 "Selling Expenses" shall have the meaning such term is given
in Section 6.3(e) hereof.
11.63 "Settlement Agreement" means the agreement dated August 19,
1994, and effective July 1, 1994, under which Hydril, XL Systems, Inc., Presco
Systems, Inc., Tellin Enterprises, Inc., The Xxxxx Family Partnership, Xxxx X.
Xxxxx, Xxxxxx Xxxx, Jr. and Xxxxxx Xxxxx settled the controversies reflected in
the pleadings on file in Civil Actions Nos. H-89-2780 and H-94-0502 in the
United States District Court for the Southern District of Texas, Houston
Division.
11.64 "Shareholder Representatives" shall be Xxxx Xxxxx and Xxxxx
Xxxxxx. The Company Shareholders may have any or no agreement among themselves
regarding when and how to replace either or both Shareholder Representatives or
to resolve any deadlock between themselves.
11.65 "Shelf Registration Statement" shall have the meaning such
term is given in Section 6.1(a) hereof.
11.66 "Stock Restriction Agreement" shall mean the Stock Restriction
Agreement dated July 1, 1994, among the shareholders of the Company named
therein.
11.67 "Sub" shall have the meaning such term is given in the
introductory paragraph to this Agreement.
11.68 "Sub Common Stock" shall mean the common stock, $1.00 par
value, of Sub.
11.69 "Subsidiary" shall have the meaning such term is given in
Section 2.3(a) hereof.
11.70 "Survival Period" shall have the meaning such term is given in
Article 10 hereof.
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11.71 "Surviving Corporation" shall have the meaning such term is
given in Section 1.1(a) hereof.
11.72 "TBCA" shall mean the Business Corporation Act of the State of
Texas.
11.73 "Taxes" shall have the meaning such term is given in Section
2.17 hereof.
11.74 "Tax Returns" shall have the meaning such term is given in
Section 2.17 hereof.
11.75 "Underwriter Registration Statement" shall have the meaning
such term is given in Section 6.1(c) hereof.
11.76 "Waste Materials" means any toxic or hazardous materials or
substances, or solid wastes, including asbestos, buried contaminants,
chemicals, flammable or explosive materials, radioactive materials, petroleum
and petroleum products, and any other chemical, pollutant, contaminant,
substance or waste that is regulated by any Governmental Entity under any
Environmental Law. "Waste Materials" does not include useful products that are
stored or maintained in authorized containers.
11.77 "Wedge Thread License Agreement" shall mean the Agreement made
by and among Hydril, the Company and XL Systems, Inc. dated August 19, 1994,
and effective July 1, 1994.
11.78 [Intentionally Omitted].
11.79 "XLH Formation Agreements" shall mean those agreements
identified as XLH Formation Agreements in Schedule 11.
ARTICLE 12
MISCELLANEOUS
12.1 Entire Agreement. This Agreement, the Confidentiality
Agreement and the other agreements contemplated hereby or thereby constitute
the sole understanding of the parties with respect to the matters provided for
herein or therein and supersede any previous agreements and understandings
between the parties with respect to the subject matter hereof and thereof. No
amendment, modification or alteration of the terms or provisions of this
Agreement shall be binding unless the same shall be in writing and duly
executed by the parties hereto.
12.2 Successors and Assigns. This Agreement will inure to the
benefit of and be binding upon EVI, Sub, the Company Shareholders and the
Company and their respective successors and permitted assigns. Neither this
Agreement nor any of the rights, interest or obligations hereunder shall be
assigned by any of the parties hereto without the prior written consent of the
other parties hereto. Notwithstanding the foregoing, Sub may assign its rights
in this Agreement to an Affiliate; provided, however, that any such assignment
by Sub shall not release EVI and Sub from any of their obligations or
agreements under this Agreement.
12.3 Further Assurances. If at any time after the Effective Time,
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 the Company and Sub, the Surviving
Corporation and
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its proper officers and directors, in the name and on behalf of the Company 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
the Company or otherwise to take any and all such action.
12.4 Expenses. Except as provided herein, whether or not the
transactions contemplated by this Agreement are consummated, other than as
expressly provided for herein, each of the parties hereto shall pay the fees
and expenses of its respective counsel, accountants and other experts, and all
other expenses incurred by such party incident to the negotiation, preparation
and execution of this Agreement and the consummation of the transactions
contemplated hereby.
12.5 Invalidity. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law, or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic and legal
substance of the transactions contemplated hereby is not affected in any manner
Materially adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that transactions contemplated hereby are fulfilled to the
extent possible.
12.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
and all of which shall constitute the same instrument.
12.7 Headings. The headings of the Sections and paragraphs of this
Agreement and of the Schedules hereto are included for convenience only and
shall not be deemed to constitute part of this Agreement or to affect the
construction or interpretation hereof or thereof.
12.8 Construction and References. Words used in this Agreement,
regardless of the number or gender specifically used, shall be deemed and
construed to include any other number, singular or plural, and any other
gender, masculine, feminine or neuter, as the context shall require. Unless
otherwise specified, all references in this Agreement to Sections, paragraphs
or clauses are deemed references to the corresponding Sections, paragraphs or
clauses in this Agreement, and all references in this Agreement to Schedules
are references to the corresponding Schedules attached to this Agreement.
12.9 Modification and Waiver. Any of the terms or conditions of
this Agreement may be waived in writing at any time by the party which is
entitled to the benefits thereof. No waiver of any of the provisions of this
Agreement shall be deemed to or shall constitute a waiver of any other
provisions hereof (whether or not similar).
12.10 Notices. Any notice, request, instruction or other document
to be given hereunder by any party hereto to any other party shall be in
writing and delivered personally, by facsimile (with receipt confirmed) or by
registered or certified mail, postage prepaid:
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if to the Company or the Company Shareholders, to:
Xxxx Xxxxx
0000 Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Confirm: (000) 000-0000
with copies to:
Xxxxxx, Xxxx & Xxxxxx, L.L.P.
000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxx Xxxxx or Xxxx Xxxxxxxxx
Facsimile: (000) 000-0000
Confirm: (000) 000-0000
and to:
Xxxxx Xxxxxx
Hydril Company
0000 Xxxxx Xxx Xxxxxxx Xxxxxxx Xxxx
Xxxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
Confirm: (000) 000-0000
with copies to:
Xxxxx & Xxxxx L.L.P.
Xxx Xxxxx Xxxxx
Xxxxxxx, XX 00000-0000
Attention: L. Xxxxxxx Xxxxxx
Facsimile: (000) 000-0000
Confirm: (000) 000-0000
if to EVI or Sub, to:
EVI, Inc.
0 Xxxx Xxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxx
Facsimile: (000) 000-0000
Confirm: (000) 000-0000
with copies to:
Fulbright & Xxxxxxxx L.L.P.
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxxx X. Xxxx
Facsimile: (000) 000-0000
Confirm: (000) 000-0000
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or at such other address for a party as shall be specified by like notice. Any
notice required or permitted by this Agreement to be given to any shareholder
of group of Company Shareholders shall be deemed to be given to all
shareholders if mailed or delivered as set forth herein to the Shareholder
Representatives as set forth above. Any notice which is delivered personally
in the manner provided herein shall be deemed to have been duly given to the
party to whom it is directed upon actual receipt by such party (or its agent
for notices hereunder). Any notice which is addressed and mailed in the manner
herein provided shall be conclusively presumed to have been duly given to the
party to which it is addressed at the close of business, local time of the
recipient, on the third day after the day it is so placed in the mail. Any
notice which is sent by facsimile shall be deemed to have been duly given to
the party to which it is addressed upon telephonic confirmation of the same as
provided herein. A copy of any notices delivered by facsimile shall promptly
be mailed in the manner herein provided to the party to which such notice was
given.
12.11 Governing Law; Interpretation. This Agreement shall be
construed in accordance with and governed by the laws of the State of Texas,
without regard to the conflicts or choice of law rules of the State of Texas.
12.12 Rights Sound Only in Contract.
(a) Except for the rights and remedies expressly provided
under this Agreement, each party waives any and all rights and remedies
relating to this Agreement and the transactions contemplated hereby sounding in
tort, fraud, misrepresentation, statute, warranty, constructive or resulting
trust, equitable rescission, quantum meruit, implied contract, or injury
outside this Agreement. The sole basis for any right or remedy by any party
against any other party and their respective representatives relating to this
Agreement and the transactions contemplated hereby or thereby is a breach of
contract (or specific performance) action for breach of this Agreement or the
other documents referenced herein.
(b) EACH PARTY AGREES THAT, EXCEPT AS EXPRESSLY PROVIDED
HEREIN OR THE OTHER AGREEMENTS REFERRED TO HEREIN, ANY DAMAGES FOR A BREACH OF
THIS AGREEMENT SHALL BE LIMITED TO ACTUAL DAMAGES AND ALL CONSEQUENTIAL,
INCIDENTAL, SPECIAL, MULTIPLIED, PUNITIVE AND EXEMPLARY DAMAGES AND RIGHTS OF
RESCISSION ARE EXCLUDED AND WAIVED. EACH PARTY MAY, HOWEVER, SEEK AND OBTAIN
SPECIFIC PERFORMANCE OR OTHER EQUITABLE REMEDY WITH RESPECT TO THE OTHER
PARTY'S OBLIGATIONS HEREUNDER.
(c) WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
EACH PARTY WAIVES ANY AND ALL REMEDIES AND RIGHTS UNDER ANY PROVISION OF THE
TEXAS BUSINESS & COMMERCE CODE, SECTION 17.41, ET. SEQ and SECTION 27.01 ET.
SEQ.
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IN WITNESS WHEREOF, each of the parties hereto have caused this
Agreement to be executed and delivered on its behalf as of the date first above
written.
XLS HOLDING, INC.
By: /s/ XXXX XXXXX
------------------------------------
Xxxx Xxxxx
Chairman of the Board
EVI, INC.
By: /s/ XXXX X. XXXXX
------------------------------------
Xxxx X. Xxxxx
Executive Vice President
GPXL, INC.
By: /s/ XXXX X. XXXXX
------------------------------------
Xxxx X. Xxxxx
President
SHAREHOLDERS:
HYDRIL COMPANY
By: /s/ XXXXX X. XXXXXX
------------------------------------
Xxxxx X. Xxxxxx
President
/s/ XXXX XXXXX
------------------------------------------
XXXX XXXXX
/s/ XXX XXXX XXXXX
------------------------------------------
Spouse Name: Xxx Xxxx Xxxxx
53
/s/ XXXXXX X. XXXX, XX.
------------------------------------------
XXXXXX X. XXXX, XX.
/s/ XXXXXXXX XXXX XXXX
------------------------------------------
Spouse Name: Xxxxxxxx Xxxx Xxxx
/s/ W.A. XXXXXX
------------------------------------------
W.A. XXXXXX
/s/ XXXXXXX XXX XXXXXX
------------------------------------------
Spouse Name: Xxxxxxx Xxx Xxxxxx
XXXXX XXXXXXXX XXXX "S" CORP. TRUSTS
By: /s/ XXXXX X. XXXX
-------------------------------------
Xxxxx X. Xxxx
Trustee
XXXX XXXX XXXXXXX "S" CORP. TRUSTS
By: /s/ XXXX X. XXXXXXX
-------------------------------------
Xxxx X. Xxxxxxx
Trustee
54
As permitted by Item 601(b)(2) of Regulation S-K, the Company has not
filed any schedules or exhibits with this Exhibit No. 2.1. Listed below is a
brief description of the omitted schedules and exhibits. The Company agrees to
furnish supplementally a copy of any of such omitted schedules and exhibits to
the Commission upon request.
Exhibits
1.1 Restated Articles of Incorporation of the Company
1.2 Articles of Merger
5.16 License Agreement
7.8 Opinion of Counsel to the Company
8.4 Opinion of Counsel to EVI and Sub
Schedules
2.2(b) Shareholders of XLS Holding, Inc.
2.2(c) Outstanding Options, Warrants, Convertible Securities, Calls,
Rights, Commitments, Preemptive Rights, Agreements, Arrangements
or Understandings
2.3(a) Name and Description of each Subsidiary
2.4(b) Required Consents, Violations, Conflicts, etc.
2.4(c) Governmental Licenses, Franchises, Permits, etc. Subject to Loss
2.5(b)-1 Material Liabilities as of March 30, 1997 Not Reflected or
Disclosed in Financial Statements or Interim Financial
Statements
2.5(b)-2 Accounts Receivable Not, as of March 30, 1997, Collected in Full
or Believed to be Collectible in Full
2.6 Adverse Material Changes Since March 30, 1997
2.7 List and Description of Compensation and Benefit Plans
2.8(a) Personal Property Owned by the Company with Book Value Greater
than $50,000
2.8(b) Personal Property Leased with Book Value Greater than $50,000
2.8(c) Legal Description of Real Property Owned
2.8(d) Real Property Leased
2.9 Legal Proceedings
2.10 Insurance Policies
2.12(a) Material Contracts
2.12(b) Agreements by and between the Company and Hydril
2.12(c) Aggregate Outstanding Principal, as of March 30, 1997, of Loans,
Credit or Other Agreements
2.14 Intellectual Property
2.15 Environmental Matters
2.16 Governmental Licenses and Permits
2.17 Taxes
2.19 Warranties and Product Liability
3.1 Company Shareholder's Plan or Intention to Sell, Transfer,
Reduce Risk of Ownership or Dispose of shares of EVI Common
Stock
3.5 Consents, Approvals, Authorizations, Exemptions and Filings
Required
11 Formation Agreements of XLS Holding, Inc.
