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EXHIBIT 99.3
AGREEMENT AND PLAN OF MERGER
AMONG
ENERGY VENTURES, INC.,
GULFMARK ACQUISITION CO.,
GULFMARK INTERNATIONAL, INC.
AND
NEW GULFMARK INTERNATIONAL, INC.
DECEMBER 5, 1996
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TABLE OF CONTENTS
ARTICLE I
THE MERGER..................................................................2
1.1 THE MERGER................................................2
1.2 CLOSING DATE..............................................2
1.3 CONSUMMATION OF THE MERGER................................2
1.4 EFFECTS OF THE MERGER.....................................2
1.5 CERTIFICATE OF INCORPORATION; BYLAWS......................2
1.6 DIRECTORS AND OFFICERS....................................3
1.7 CONVERSION OF SECURITIES..................................3
1.8 EXCHANGE OF CERTIFICATES..................................4
1.9 TAKING OF NECESSARY ACTION; FURTHER ACTION................6
ARTICLE II
REPRESENTATIONS AND WARRANTIES..............................................6
2.1 REPRESENTATIONS AND WARRANTIES OF EVI AND SUB.............6
(a) Organization and Compliance with Law.............6
(b) Capitalization. .................................7
(c) Authorization and Validity of Agreement..........7
(d) No Approvals or Notices Required; No Conflict ...7
(e) Commission Filings; Financial Statements.........8
(f) Absence of Certain Charges and Events............8
(g) Tax Matters......................................8
(h) Voting Requirements..............................9
(i) Brokers..........................................9
(j) Information Supplied.............................9
2.2 REPRESENTATIONS AND WARRANTIES OF GULFMARK AND SPINCO....10
(a) Organization....................................10
(b) Capitalization..................................10
(c) Authorization and Validity of Agreement.........11
(d) No Approvals or Notices Required; No Conflict
with Instruments to which GulfMark is a Party...12
(e) Commission Filings; Financial Statements........13
(f) Conduct of Business in the Ordinary Course;
Absence of Certain Changes and Events...........14
(g) Litigation......................................14
(h) Employee Benefit Plans..........................15
(i) Taxes...........................................17
(j) Environmental Matters...........................18
(k) Investment Company..............................19
(l) Severance Payments..............................19
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(m) Voting Requirements.............................20
(n) Brokers.........................................20
(o) Assets and Liabilities at Closing...............20
(p) Compliance with Laws............................21
(q) Contracts.......................................21
(r) Title to Property...............................22
(s) Insurance Policies..............................23
(t) Loans...........................................23
(u) No Fraudulent Transfer..........................23
(v) Information Supplied............................24
ARTICLE III
COVENANTS OF GULFMARK......................................................24
3.1 CONDUCT OF BUSINESS BY GULFMARK PENDING THE MERGER.......24
3.2 NET WORKING CAPITAL REQUIREMENTS.........................27
3.3 AFFILIATES' AGREEMENTS...................................27
ARTICLE IV
COVENANTS OF EVI PRIOR TO THE EFFECTIVE TIME...............................27
4.1 CONDUCT OF BUSINESS BY EVI PENDING THE MERGER............27
4.2 RESERVATION OF EVI STOCK.................................28
4.3 STOCK EXCHANGE LISTING...................................28
ARTICLE V
ADDITIONAL AGREEMENTS......................................................28
5.1 JOINT PROXY STATEMENT/PROSPECTUS; REGISTRATION STATEMENT.28
5.2 ACCOUNTANTS LETTERS......................................28
5.3 MEETINGS OF STOCKHOLDERS.................................29
5.4 FILINGS; CONSENTS; REASONABLE EFFORTS....................29
5.5 NOTIFICATION OF CERTAIN MATTERS..........................29
5.6 EXPENSES.................................................30
5.7 GULFMARK'S EMPLOYEE BENEFITS.............................30
ARTICLE VI
CONDITIONS.................................................................31
6.1 CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT
THE MERGER...............................................31
6.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF EVI..............32
6.3 ADDITIONAL CONDITIONS TO OBLIGATIONS OF GULFMARK.........33
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ARTICLE VII
MISCELLANEOUS..............................................................34
7.1 TERMINATION..............................................34
7.2 EFFECT OF TERMINATION....................................35
7.3 WAIVER AND AMENDMENT.....................................35
7.4 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES............36
7.5 PUBLIC STATEMENTS........................................36
7.6 ASSIGNMENT...............................................36
7.7 NOTICES..................................................36
7.8 GOVERNING LAW............................................37
7.9 ARBITRATION..............................................37
7.10 SEVERABILITY.............................................38
7.11 COUNTERPARTS.............................................38
7.12 HEADINGS.................................................38
7.13 CONFIDENTIALITY AGREEMENT................................38
7.14 ENTIRE AGREEMENT: THIRD PARTY BENEFICIARIES..............39
7.15 DISCLOSURE LETTERS.......................................39
GLOSSARY OF DEFINED TERMS..................................................41
LIST OF EXHIBITS
Exhibit A - Form of Agreement and Plan of Distribution
Exhibit B - Amended and Restated Certificate of Incorporation of GulfMark
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger, dated as of the 5th day of December,
1996 (this "Agreement"), is among ENERGY VENTURES, INC., a Delaware corporation
("EVI"), GULFMARK ACQUISITION CO., a Delaware corporation and wholly-owned
subsidiary of EVI ("Sub"), GULFMARK INTERNATIONAL, INC., a Delaware corporation
("GulfMark"), and NEW GULFMARK INTERNATIONAL, INC., a Delaware corporation and
wholly-owned subsidiary of GulfMark ("Spinco").
WHEREAS, subject to and in accordance with the terms and conditions of
this Agreement, the respective Boards of Directors of EVI, Sub and GulfMark, and
EVI as sole stockholder of Sub, have approved the merger of Sub with and into
GulfMark (the "Merger"), whereby each issued and outstanding share of common
stock, par value $1.00 per share, of GulfMark ("GulfMark Common Stock") not
owned directly or indirectly by GulfMark will be converted into the right to
receive .6695 of one share of common stock, par value $1.00 per share, of EVI
("EVI Common Stock"); and
WHEREAS, as a condition to the Merger, GulfMark will contribute to
Spinco (a) all of the stock of GulfMark's subsidiaries other than Ercon (the
"Marine Subsidiaries") and (b) the general corporate assets of GulfMark
(excluding (i) all EVI Common Stock held by GulfMark, (ii) any and all property,
assets, claims and rights, tangible and intangible of Ercon, as defined herein,
(iii) the original tax, accounting and other corporate records of GulfMark and
(iv) all of the shares of common stock and other ownership interests held by
GulfMark in American Independent Oil Company ("AIOC"), such excluded assets
being referred to herein as the "Excluded Assets") (the "Assets") and Spinco
will assume certain liabilities associated with the Assets, the Marine
Subsidiaries and GulfMark (the "Contribution") pursuant to an Agreement and Plan
of Distribution between GulfMark, Spinco and EVI in substantially the form
attached hereto as Exhibit A (the "Distribution Agreement");
WHEREAS, as a condition to the Merger, GulfMark will distribute to its
stockholders prior to the Merger all of the outstanding stock of Spinco (the
"Distribution");
WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Section
368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the "Code"), and
the Contribution and Distribution qualify as transactions within the meaning of
Sections 368(a)(1)(D) and 355 of the Code; and
WHEREAS, the parties hereto desire to set forth certain
representations, warranties and covenants made by each to the other as an
inducement to the consummation of the Merger;
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties and covenants herein contained, the parties hereto
hereby agree as follows:
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ARTICLE I
THE MERGER
1.1 THE MERGER. Subject to and in accordance with the terms and
conditions of this Agreement and in accordance with the General Corporation Law
of the State of Delaware ("DGCL"), at the Effective Time (as defined in Section
1.3), Sub shall be merged with and into GulfMark. As a result of the Merger, the
separate corporate existence of Sub shall cease and GulfMark shall continue as
the surviving corporation (sometimes referred to herein as the "Surviving
Corporation"), and all the properties, rights, privileges, powers and franchises
of Sub and GulfMark shall vest in the Surviving Corporation, without any
transfer or assignment having occurred, and certain liabilities, debts and
duties of Sub and GulfMark shall attach to the Surviving Corporation, all in
accordance with the DGCL and subject to the provisions of the Distribution
Agreement.
1.2 CLOSING DATE. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Fulbright &
▇▇▇▇▇▇▇▇ L.L.P, Houston, Texas, as soon as practicable after the satisfaction or
waiver of the conditions set forth in Article VI or at such other time and place
and on such other date as EVI and GulfMark shall agree; provided that the
closing conditions set forth in Article VI shall have been satisfied or waived
at or prior to such time. The date on which the Closing occurs is herein
referred to as the "Closing Date".
1.3 CONSUMMATION OF THE MERGER. As soon as practicable on the Closing
Date, the parties hereto will cause the Merger to be consummated by filing with
the Secretary of State of Delaware a certificate of merger in such form as
required by, and executed in accordance with, the relevant provisions of the
DGCL. The "Effective Time" of the Merger, as that term is used in this
Agreement, shall mean such time as a certificate of merger is duly filed with
the Delaware Secretary of State or at such later time (not to exceed 90 days
from the date the Certificate is filed) as is specified in the certificate of
merger pursuant to the mutual agreement of EVI and GulfMark.
1.4 EFFECTS OF THE MERGER. The Merger shall have the effects set forth
in the applicable provisions of the DGCL. If at any time after the Effective
Time of the Merger, the Surviving Corporation shall consider or be advised that
any further assignments or assurances in law or otherwise are necessary or
desirable to vest, perfect or confirm, of record or otherwise, in the Surviving
Corporation, all rights, title and interests in all real estate and other
property and all privileges, powers and franchises of GulfMark and Sub, the
Surviving Corporation and its proper officers and directors, in the name and on
behalf of GulfMark and Sub, shall execute and deliver all such proper deeds,
assignments and assurances in law and do all things necessary and proper to
vest, perfect or confirm title to such property or rights in the Surviving
Corporation and otherwise to carry out the purpose of this Agreement, and the
proper officers and directors of the Surviving Corporation are fully authorized
in the name of GulfMark or otherwise to take any and all such action.
1.5 CERTIFICATE OF INCORPORATION; BYLAWS. The Certificate of
Incorporation of GulfMark, as amended by the amendment set forth in Exhibit B
attached hereto, shall be the
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Certificate of Incorporation of the Surviving Corporation and thereafter shall
continue to be its Certificate of Incorporation until amended as provided
therein or under the DGCL. The bylaws of Sub, as in effect immediately prior to
the Effective Time, shall be the bylaws of the Surviving Corporation and
thereafter shall continue to be its bylaws until amended as provided therein or
under the DGCL.
1.6 DIRECTORS AND OFFICERS. The directors of Sub immediately prior to
the Effective Time shall be the directors of the Surviving Corporation at and
after the Effective Time, each to hold office in accordance with the Certificate
of Incorporation and bylaws of the Surviving Corporation, and the officers of
Sub immediately prior to the Effective Time shall be the officers of the
Surviving Corporation at and after the Effective Time, in each case until the
earlier of their resignation or removal or their respective successors are duly
elected or appointed and qualified.
1.7 CONVERSION OF SECURITIES. Subject to the terms and conditions of
this Agreement, at the Effective Time, by virtue of the Merger and without any
action on the part of EVI, GulfMark, Sub or their stockholders:
(a) Subject to adjustment pursuant to Section 1.7(e) hereof,
each share of GulfMark Common Stock issued and outstanding immediately
prior to the Effective Time (the "Shares"), shall be converted into the
right to receive .6695 of a share of EVI Common Stock (the "Exchange
Ratio"); provided, however, that no fractional shares of EVI Common
Stock shall be issued and in lieu thereof, a cash payment shall be made
in accordance with Section 1.7(d) hereof. Except as set forth in the
preceding sentence with respect to cash in lieu of fractional shares,
no other consideration will be paid to GulfMark or its stockholders.
(b) Each Share owned directly or indirectly by GulfMark as
treasury stock and each Share owned by Sub, EVI or any direct or
indirect wholly-owned subsidiary of EVI or of GulfMark immediately
prior to the Effective Time shall be canceled and extinguished without
any conversion thereof and no payment shall be made with respect
thereto.
(c) Each share of common stock, par value $1.00 per share, of
Sub issued and outstanding immediately prior to the Effective Time
shall be converted into one fully paid and nonassessable share of
common stock, $1.00 par value per share, of the Surviving Corporation.
(d) No fractional shares of EVI Common Stock shall be issued
in the Merger. All fractional shares of EVI Common Stock that a holder
of Shares would otherwise be entitled to receive as a result of the
Merger shall be aggregated and if a fractional share of EVI Common
Stock results from such aggregation (i) such fractional share of EVI
Common Stock shall be disregarded and the shares of EVI Common Stock
issuable to such holder shall be rounded off to the nearest whole share
of EVI Common Stock if such fractional share of EVI Common Stock
represents less than one-half of one percent of the total shares of EVI
Common Stock such holder is entitled to receive in the Merger and (ii)
in all other cases, such holder shall be entitled to receive, in lieu
of a fractional
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share of EVI Common Stock, an amount in cash determined by multiplying
the average of the daily closing sale price per share of EVI Common
Stock on the New York Stock Exchange ("NYSE") for the ten trading days
immediately preceding the Effective Time of the Merger by the fraction
of a share of EVI Common Stock to which such holder would otherwise
have been entitled. No such cash in lieu of fractional shares of EVI
Common Stock shall be paid to any holder of fractional shares of EVI
Common Stock until Certificates (as defined in Section 1.8(c))
representing such shares of EVI Common Stock are surrendered and
exchanged in accordance with Section 1.8(c). The total amount of cash
to be received by the stockholders of GulfMark in lieu of fractional
shares of EVI Common Stock will not exceed one percent of the total
fair market value of the EVI Common Stock (as of the date on which the
Effective Time occurs) to be issued in the Merger.
The Exchange Ratio is based on (i) 3,338,852 shares of GulfMark Common Stock
being issued and outstanding immediately prior to the Effective Time. In the
event the number of shares of GulfMark Common Stock outstanding immediately
prior to the Effective Time is greater or less than 3,338,852, or the number of
shares of EVI Common Stock held by GulfMark is greater or less than 2,235,572,
the Exchange Ratio shall be adjusted to equal the number of shares of EVI Common
Stock held by GulfMark immediately prior to the Effective Time divided by the
number of shares of GulfMark Common Stock issued and outstanding immediately
prior to the Effective Time.
1.8 EXCHANGE OF CERTIFICATES.
(a) Exchange Agent. Prior to the Effective Time of the Merger,
EVI shall select a bank or trust company to act as exchange agent (the
"Exchange Agent") for the issue of shares of EVI Common Stock upon
surrender of certificates representing Shares.
(b) Payment of Merger Consideration. EVI shall take all steps
necessary to enable and cause there to be provided to the Exchange
Agent on a timely basis, as and when needed after the Effective Time of
the Merger, certificates for the shares of EVI Common Stock to be
issued upon the conversion of the Shares pursuant to Section 1.7. EVI
or the Surviving Corporation shall timely make available to the
Exchange Agent any cash necessary to make payments in lieu of
fractional shares.
(c) Exchange Procedure. As soon as reasonably practical after
the Effective Time of the Merger, the Exchange Agent shall mail to each
holder of record of a certificate or certificates that immediately
prior to the Effective Time of the Merger represented outstanding
Shares (the "Certificates"), other than EVI, Sub and GulfMark and any
directly or indirectly wholly-owned subsidiary of EVI, Sub or GulfMark,
(i) a letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Exchange Agent and shall
be in a form and have such other provisions as EVI and Sub may
reasonably specify) and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for the certificates
representing the shares of EVI Common Stock and any cash in lieu of a
fractional share. Upon surrender of a Certificate for cancellation to
the Exchange Agent or to such other agent or agents as may be appointed
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by the Surviving Corporation, together with such letter of transmittal,
duly executed, and such other documents as may reasonably be required
by the Exchange Agent, the holder of such Certificate shall be entitled
to receive in exchange therefor a certificate or certificates
representing the number of whole shares of EVI Common Stock into which
the Shares theretofore represented by such Certificate shall have been
converted pursuant to Section 1.7 and any cash payable in lieu of a
fractional Share, and the Certificate so surrendered shall forthwith be
canceled. If the shares of EVI Common Stock are to be issued to an
individual, corporation, limited liability company, partnership,
governmental authority or any other entity (a "Person"), other than the
person in whose name the Certificate so surrendered is registered, it
shall be a condition of exchange that such Certificate shall be
properly endorsed or otherwise in proper form for transfer and that the
Person requesting such exchange shall pay any transfer or other taxes
required by reason of the exchange to a Person other than the
registered holder of such Certificate or establish to the satisfaction
of the Surviving Corporation that such tax has been paid or is not
applicable. Until surrendered as contemplated by this Section 1.8, each
Certificate shall be deemed at any time after the Effective Time of the
Merger to represent only the right to receive upon such surrender the
number of shares of EVI Common Stock and cash, if any, in lieu of
fractional shares of EVI Common Stock into which the Shares theretofore
represented by such Certificate shall have been converted pursuant to
Section 1.7. The Exchange Agent shall not be entitled to vote or
exercise any rights of ownership with respect to the shares of EVI
Common Stock held by it from time to time hereunder, except that it
shall receive and hold all dividends or other distributions paid or
distributed with respect thereto for the account of Persons entitled
thereto.
(d) Distributions with Respect to Unexchanged Shares. No
dividends or other distributions declared or made after the Effective
Time of the Merger with respect to the shares of EVI Common Stock with
a record date after the Effective Time of the Merger shall be paid to
the holder of any unsurrendered Certificate with respect to the shares
of EVI Common Stock represented thereby and no cash payment in lieu of
fractional shares shall be paid to any such holder pursuant to Section
1.7(d) until the holder of record of such Certificate shall surrender
such Certificate. Subject to the effect of applicable laws, following
surrender of any such Certificate, there shall be paid to the record
holder of the Certificates representing the shares of EVI Common Stock
issued in exchange therefor, without interest, (i) at the time of such
surrender, the amount of any cash payable in lieu of a fractional share
of EVI Common Stock to which such holder is entitled pursuant to
Section 1.7(d) and the amount of dividends or other distributions with
a record date after the Effective Time of the Merger theretofore paid
with respect to such whole shares of EVI Common Stock, as the case may
be, and (ii) at the appropriate payment date, the amount of dividends
or other distributions with a record date after the Effective Time of
the Merger but prior to surrender and a payment date subsequent to
surrender payable with respect to such whole shares of EVI Common
Stock.
(e) No Further Ownership Rights in Shares. All shares of EVI
Common Stock issued upon the surrender of Certificates in accordance
with the terms of this Article I, together with any dividends payable
thereon to the extent contemplated by this Section 1.8, shall be deemed
to have been exchanged and paid in full satisfaction of all
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rights pertaining to the Shares theretofore represented by such
Certificates and there shall be no further registration of transfers on
the stock transfer books of the Surviving Corporation of the Shares
that were outstanding immediately prior to the Effective Time of the
Merger. If, after the Effective Time of the Merger, Certificates are
presented to the Surviving Corporation for any reason, they shall be
canceled and exchanged as provided in this Article I.
(f) None of EVI, Sub, GulfMark, the Surviving Corporation or
their transfer agents shall be liable to a holder of the Shares for any
amount properly paid to a public official pursuant to applicable
property, escheat or similar laws.
1.9 TAKING OF NECESSARY ACTION; FURTHER ACTION. The parties hereto
shall take all such reasonable and lawful action as may be necessary or
appropriate in order to effectuate the Merger and the Distribution as promptly
as possible. If, at any time after the Effective Time, any such further action
is necessary or desirable to carry out the purposes of this Agreement or the
Distribution Agreement, and to vest the Surviving Corporation with full right,
title and possession to all assets, property, rights, privileges, powers and
franchises of GulfMark or Sub as of the Effective Time, such corporations shall
direct their respective officers and directors to take all such lawful and
necessary action.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF EVI AND SUB. EVI and Sub
hereby jointly and severally represent and warrant to GulfMark that:
(a) Organization and Compliance with Law. Each of EVI and Sub
is a corporation duly organized, validly existing and in good standing
under the laws of the state of Delaware and has all requisite corporate
power and corporate authority to own, lease and operate all of its
properties and assets and to carry on its business as now being
conducted, except where the failure to be so organized, existing or in
good standing would not have a material adverse effect on the financial
condition of EVI and its subsidiaries (the "EVI Subsidiaries"), taken
as a whole (an "EVI MAE"). Each of EVI and Sub is duly qualified to do
business, and is in good standing, in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification necessary, except in such
jurisdictions where the failure to be duly qualified would not have an
EVI MAE. Each of EVI and Sub is in compliance with all applicable laws,
judgments, orders, rules and regulations, except where such failure
would not have an EVI MAE. EVI has heretofore delivered to GulfMark
true and complete copies of EVI's Certificate of Incorporation (the
"EVI Certificate") and Sub's Certificate of Incorporation and their
respective bylaws as in existence on the date hereof.
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(b) Capitalization.
(i) The authorized capital stock of EVI consists of
40,000,000 shares of EVI Common Stock, par value $1.00 per
share, and 3,000,000 shares of preferred stock, par value
$1.00 per shares ("EVI Preferred Stock"). As of September 30,
1996, there were issued and outstanding 22,939,625 shares of
EVI Common Stock. As of October 8, 1996, 1,550,268 shares of
EVI Common Stock were reserved for issuance pursuant to EVI's
1981 Employee Stock Option Plan, 1992 Employee Stock Option
Plan, Non-Employee Director Stock Option Plan and restricted
stock plan for foreign key employees, of which 834,268 shares
of EVI Common Stock were reserved for issuance upon exercise
of outstanding options. At October 8, 1996, there were no
shares of EVI Preferred Stock issued or outstanding. No holder
of EVI Common Stock is entitled to preemptive rights under
Delaware law or EVI's Certificate of Incorporation.
(ii) As of the date hereof, the authorized capital
stock of Sub consists of 1,000 shares of common stock, par
value $1.00 per share, all of which are validly issued, fully
paid and nonassessable and are owned by EVI.
(iii) Each share of EVI Common Stock to be issued
hereunder as a result of the Merger will be fully paid and
non-assessable upon issuance.
(c) Authorization and Validity of Agreement. The execution and
delivery by EVI and Sub of this Agreement and the consummation by each
of them of the transactions contemplated hereby have been duly
authorized by all necessary corporate action (subject only, with
respect to the Merger, to approval of this Agreement by each of their
stockholders as provided for in Section 5.3). On or prior to the date
hereof, the Board of Directors of EVI or duly authorized committee
thereof has determined to recommend approval of the Merger to the
stockholders of EVI, and such determination is in effect on the date
hereof. This Agreement has been duly executed and delivered by EVI and
Sub and is the valid and binding obligation of EVI and Sub, enforceable
against EVI and Sub in accordance with its terms.
(d) No Approvals or Notices Required; No Conflict . Neither
the execution and delivery of this Agreement nor the performance by EVI
or Sub of its obligations hereunder, nor the consummation of the
transactions contemplated hereby by EVI and Sub, will (i) conflict with
the EVI Certificate or the bylaws of EVI or Sub; (ii) assuming
satisfaction of the requirements set forth in clause (iii) below,
violate any provision of law applicable to EVI or any of the EVI
Subsidiaries; (iii) except for (A) requirements of Federal or state
securities laws, (B) requirements arising out of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of ▇▇▇▇ (▇▇▇ "▇▇▇ ▇▇▇"), (▇) requirements of
notice filings in such foreign jurisdictions as may be applicable, and
(D) the filing of a Certificate of Merger by Sub in accordance with the
DGCL, require any consent or approval of, or filing with or notice to,
any public body or authority, domestic or foreign, under any provision
of law applicable to EVI or any of the EVI Subsidiaries; or (iv)
require any consent, approval or notice under, or violate, breach, be
in conflict with or constitute a default (or an event that, with notice
or lapse of time or both, would constitute a default)
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under, or permit the termination of any provision of, or result in the
creation or imposition of any lien, mortgage, pledge, security
interest, restriction on transfer, option, charge, right of any third
Person or any other encumbrance of any nature (a "Lien") upon any
properties, assets or business of EVI or any of the EVI Subsidiaries
under, any note, bond, indenture, mortgage, deed of trust, lease,
franchise, permit, authorization, license, contract, instrument or
other agreement or commitment or any order, judgment or decree to which
EVI or any of the EVI Subsidiaries is a party or by which EVI or any of
the EVI Subsidiaries or any of its or their assets or properties is
bound or encumbered, except (A) those that have already been given,
obtained or filed and (B) those that, in the aggregate, would not have
an EVI MAE.
(e) Commission Filings; Financial Statements. EVI has filed
all reports and documents required to filed with the Securities and
Exchange Commission (the "Commission") since December 31, 1993. All
reports, registration statements and other filings (including all
notes, exhibits and schedules thereto and documents incorporated by
reference therein) filed by EVI with the Commission since December 31,
1993, through the date of this Agreement, together with any amendments
thereto, are sometimes collectively referred to as the "EVI Commission
Filings". EVI has heretofore delivered to, or made accessible to,
GulfMark copies of the EVI Commission Filings. As of the respective
dates of their filing with the Commission, the EVI Commission Filings
complied in all material respects with the applicable requirements of
the Securities Act of 1934 (the "Securities Act"), the Securities
Exchange Act of 1934 (the "Exchange Act") and the rules and regulations
of the Commission thereunder, and did not contain any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein, in
light of the circumstances under which they were made, not misleading.
(f) Absence of Certain Charges and Events. Since December 31,
1995, except as contemplated by this Agreement or as disclosed in the
EVI Commission Filings filed with the Commission prior to the date
hereof, there has been no EVI MAE.
(g) Tax Matters.
(i) Except as set forth in Section 2.1(f) of the
disclosure letter delivered by EVI to GulfMark on the date
hereof (the "EVI Disclosure Letter"), all returns and reports,
including, without limitation, information and withholding
returns and reports ("Tax Returns"), of or relating to any
foreign, federal, state or local tax, assessment or other
governmental charge ("Taxes" or a "Tax") that are required to
be filed on or before the Closing Date by or with respect to
EVI or any of the EVI Subsidiaries, or any other corporation
that is or was a member of an affiliated group (within the
meaning of Section 1504(a) of the Code) of corporations of
which EVI was a member for any period ending on or prior to
the Closing Date, have been or will be duly and timely filed,
and all Taxes, including interest and penalties, due and
payable pursuant to such Tax Returns have been paid or, except
as set forth in Section 2.1(f) of the EVI Disclosure
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Letter, adequately provided for in reserves established by
EVI, except where the failure to file, pay or provide for
would not have a EVI MAE.
(ii) EVI has no present plan or intention after the
Merger to (A) liquidate the Surviving Corporation, (B) merge
the Surviving Corporation with or into another corporation,
(C) sell or otherwise dispose of the stock of the Surviving
Corporation, (D) cause or permit the Surviving Corporation to
sell or otherwise dispose of any of the assets of GulfMark or
the assets of Sub vested in the Surviving Corporation except
for dispositions made in the ordinary course of business or
transfers of assets to a corporation controlled by the
Surviving Corporation within the meaning of Section
368(a)(2)(C) of the Code, (E) reacquire any of the stock
issued to the GulfMark stockholders pursuant to the Merger,
(F) cause or permit the Surviving Corporation to discontinue
the historic business of GulfMark, or (G) acquire Spinco or
Spinco Assets.
(iii) EVI is not an investment company as defined in
ss.368(a)(2)(F)(iii) and (iv) of the Code or as defined in the
Investment Company Act of 1940 and the rules and regulations
promulgated thereunder.
(h) Voting Requirements. The affirmative vote of the holders
of a majority of the shares of EVI Common Stock present at the special
stockholders' meeting and entitled to vote is the only vote of the
holders and any class or series of the capital stock of EVI necessary
to approve this Agreement and the Merger.
(i) Brokers. Except for fees and expenses payable by EVI to
Prudential Securities Corporation, no broker, investment banker, or
other Person acting on behalf of EVI is or will be entitled to any
broker's, finder's or other similar fee or commission in connection
with the transactions contemplated by this Agreement.
(j) Information Supplied. None of the information supplied or
to be supplied by EVI for inclusion or incorporation by reference in
(i) the Registration Statement (as defined in Section 5.1) will, at the
time the Registration Statement is filed with the Commission, and at
any time it is amended or supplemented or at the time it becomes
effective under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and
(ii) the Proxy Statement will, at the date the Proxy Statement is first
mailed to EVI's stockholders and at the time of the EVI Stockholders
Meeting, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they are made, not misleading. The Proxy Statement will
comply as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder. For purposes of
this Agreement, the parties agree that the statements made and
information in the Registration Statement and the Proxy Statement
relating to the Federal income tax consequences of the transactions
contemplated hereby shall be deemed to be supplied by GulfMark and
Spinco and not by EVI or Sub.
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2.2 REPRESENTATIONS AND WARRANTIES OF GULFMARK AND SPINCO. Each
of GulfMark and Spinco, jointly and severally hereby represents and warrants
to EVI that:
(a) Organization. Each of GulfMark and Spinco is a corporation
duly organized, validly existing and in good standing under the laws of
the state of Delaware and Ercon Development Company, a wholly owned
subsidiary of GulfMark to be merged into GulfMark prior to the
Effective Time ("Ercon") is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas.
Each of GulfMark, Spinco and Ercon has all requisite corporate power
and corporate authority and all necessary governmental authorizations
to own, lease and operate all of its properties and assets and to carry
on its business as now being conducted, except where the failure to be
so organized, existing or in good standing or to have such governmental
authority would not (i) have a material adverse effect on the financial
condition of GulfMark or Ercon after giving effect to the Distribution
or (ii) prevent or adversely affect the ability of GulfMark and Spinco
to perform and comply with their respective obligations under this
Agreement, the Distribution Agreement or any other agreement to be
executed and delivered in connection with the transactions contemplated
hereby or thereby (a "GulfMark MAE"). Except as set forth in Section
2.2(a) of the disclosure letter delivered by GulfMark to EVI on the
date hereof (the "GulfMark Disclosure Letter"), each of GulfMark, Ercon
and Spinco is duly qualified as a foreign corporation to do business,
and is in good standing, in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted
by it makes such qualification necessary, except in such jurisdictions
where the failure to be duly qualified does not and would not have a
GulfMark MAE. Each of GulfMark, Ercon and Spinco is in compliance with
all applicable laws, judgments, orders, rules and regulations, domestic
and foreign, except where failure to be in such compliance would not
have a GulfMark MAE. GulfMark has heretofore delivered to EVI true and
complete copies of GulfMark's Certificate of Incorporation (the
"GulfMark Certificate") and bylaws, Spinco's Certificate of
Incorporation and bylaws and Ercon's Articles of Incorporation and
bylaws as in existence on the date hereof.
(b) Capitalization.
(i) The authorized capital stock of GulfMark consists
of 10,000,000 shares of GulfMark Common Stock, par value $1.00
per share and 500,000 shares of Preferred Stock, par value
$50.00 per share. As of September 30, 1996, there were issued
and outstanding 3,338,852 shares of GulfMark Common Stock and
no shares of GulfMark Common Stock were held as treasury
shares. There are no outstanding shares of GulfMark Preferred
Stock. A total of 390,833 shares of GulfMark Common Stock have
been reserved for issuance pursuant to the stock option plans
described in Section 2.2(b)(iii). All issued and outstanding
shares of GulfMark Common Stock are validly issued, fully paid
and nonassessable and no holder thereof is entitled to
preemptive rights. GulfMark is not a party to, and is not
aware of, any voting agreement, voting trust or similar
agreement or arrangement relating to any class or series of
its capital
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stock, or any agreement or arrangement providing for
registration rights with respect to any capital stock or other
securities of GulfMark.
(ii) The authorized capital stock of Ercon consists
of 10,000 shares of Ercon Common Stock, par value $1.00 per
share. As of September 30, 1996, there were issued and
outstanding 10,000 shares of Ercon Common Stock and no shares
of Ercon Common Stock were held as treasury shares. All issued
and outstanding shares of Ercon Common Stock are validly
issued, fully paid and nonassessable and no holder thereof is
entitled to preemptive rights. Ercon is not a party to, any
voting agreement, voting trust or similar agreement or
arrangement relating to any class or series of its capital
stock, or any agreement or arrangement providing for
registration rights with respect to any capital stock or other
securities of Ercon. GulfMark owns all of the issued and
outstanding Common Stock of Ercon.
(iii) As of the date hereof, there are outstanding
options (the "GulfMark Options") to purchase an aggregate of
109,500 shares of GulfMark Common Stock under the 1987 Stock
Option Plan and the Amended and Restated 1993 Non-Employee
Director Stock Option Plan (collectively the "GulfMark
Plans"). All GulfMark Options will be transferred to Spinco's
Adjustment Plans prior to the Effective Time. As of the
Effective Time, there will be no options outstanding under the
GulfMark Plans. There are not now (other than as set forth in
this Section 2.2(b)), and at the Effective Time there will not
be, any (A) shares of capital stock or other equity securities
of GulfMark outstanding other than GulfMark Common Stock
issued pursuant to the exercise of GulfMark Options or (B)
outstanding options, warrants, scrip, rights to subscribe for,
calls or commitments of any character whatsoever relating to,
or securities or rights convertible into or exchangeable for,
shares of any class of capital stock of GulfMark, or
contracts, understandings or arrangements to which GulfMark is
a party, or by which it is or may be bound, to issue
additional shares of its capital stock or options, warrants,
scrip or rights to subscribe for, or securities or rights
convertible into or exchangeable for, any additional shares of
its capital stock.
(iv) GulfMark owns all of the issued and outstanding
Common Stock of Spinco.
(v) Section 2.2(b)(v) of the GulfMark Disclosure
Letter sets forth a list of all corporations, partnerships,
limited liability companies and other entities of which
GulfMark owns directly or indirectly, an equity interest (such
entities, excluding EVI and its subsidiaries referred to
herein as the "GulfMark Subsidiaries").
(c) Authorization and Validity of Agreement. Each of GulfMark
and Spinco has all requisite corporate power and authority to enter
into this Agreement, the Distribution Agreement and the other
agreements and instruments contemplated to be executed and delivered in
connection with the Merger and the Distribution (the Distribution
Agreement and such other agreements and instruments contemplated to be
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executed and delivered in connection with the Merger and the
Distribution being referred to as the "Other Agreements") and to
perform its obligations hereunder and thereunder. The execution and
delivery by GulfMark and Spinco of this Agreement and the Other
Agreements to which it is a party and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized
by all necessary corporate action (subject only, with respect to the
Merger and the Distribution, to approval of this Agreement and the
Contribution and Distribution by the GulfMark stockholders as provided
for in Section 5.3). On or prior to the date hereof the Board of
Directors of GulfMark has determined to recommend approval of the
Merger and the Contribution and Distribution to the stockholders of
GulfMark, and such determination is in effect as of the date hereof.
This Agreement has been duly executed and delivered by GulfMark and
Spinco and is the valid and binding obligation of GulfMark and Spinco,
enforceable against them in accordance with its terms. The Other
Agreements, when executed and delivered by GulfMark and Spinco, as
applicable, will constitute valid and binding obligations of GulfMark
and Spinco, enforceable against them in accordance with their
respective terms.
(d) No Approvals or Notices Required; No Conflict with
Instruments to which GulfMark is a Party. The execution and delivery of
this Agreement and the Other Agreements do not, and the consummation of
the transactions contemplated hereby and thereby and compliance with
the provisions hereof and thereof will not, conflict with, or result in
any violation of, or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, cancellation or
acceleration of or "put" right with respect to any obligation or to
loss of a material benefit under, or result in the creation of any Lien
upon any of the properties or assets of GulfMark, Ercon Spinco or any
of their subsidiaries under, any provision of (i) the GulfMark
Certificate or bylaws of GulfMark, the Ercon Articles of Incorporation
or bylaws of Ercon, the Spinco Certificate of Incorporation or bylaws
of Spinco or any provision of the comparable organizational documents
of their subsidiaries, (ii) except as set forth in Section 2.2(d) of
the GulfMark Disclosure Letter, any loan or credit agreement, note,
bond, mortgage, indenture, lease, guaranty or other financial assurance
agreement or other agreement, instrument, permit, concession, franchise
or license applicable to GulfMark or Ercon, or their respective
properties or assets, (iii) except as set forth in Section 2.2(d) of
the GulfMark Disclosure Letter, any loan or credit agreement, note,
bond, mortgage, indenture, lease, guaranty or other financial assurance
agreement or other agreement, instrument, permit, concession, franchise
or license applicable to Spinco or any other GulfMark Subsidiary (other
than Ercon), or their respective properties or assets and (iv) subject
to governmental filing and other matters referred to in the following
sentence, any judgment, order, decree, statute, law, ordinance, rule or
regulation or arbitration award applicable to GulfMark, Ercon, Spinco
or any of their subsidiaries or their respective properties or assets,
other than, in the case of clauses (ii) and (iii), any such conflicts,
violations, defaults, rights or Liens that individually or in the
aggregate would not have a GulfMark MAE. No consent, approval, order or
authorization of, or registration, declaration or filing with, any
court, administrative agency or commission or other governmental
authority or agency, domestic or foreign, including local authorities
(a "Governmental Entity"), is required by or with respect to GulfMark,
Ercon, Spinco or any of their subsidiaries in connection with the
execution and delivery of this
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Agreement by GulfMark, and Spinco or the consummation by GulfMark,
Ercon and Spinco of the transactions contemplated hereby, except for
(i) the filing of a pre-merger notification and report form by GulfMark
under the HSR Act, (ii) the filing with the Commission of (A) a proxy
or information statement relating to Stockholder Approval (such proxy
or information statement as amended or supplemented from time to time,
the "Proxy Statement"), and (B) such reports under Section 13(a) of the
Exchange Act as may be required in connection with this Agreement and
the transactions contemplated hereby, (iii) the filing of a Certificate
of Merger with the Delaware Secretary of State and the Texas Secretary
of State with respect to the merger of Ercon into GulfMark and the
filing of appropriate document(s) with the relevant authority of other
states in which each of Ercon and GulfMark is qualified to do business,
(iv) the filing of the Certificate of Merger with the Delaware
Secretary of State with respect to the Merger as provided in the DGCL
and appropriate documents with the relevant authorities of other states
in which each of GulfMark and Spinco is qualified to do business and
(v) such other consents, approvals, orders, authorizations,
registrations, declarations, filings and notices as are set forth in
Section 2.2(d) of the GulfMark Disclosure Letter.
(e) Commission Filings; Financial Statements. GulfMark has
filed all reports, registration statements and other filings, together
with any amendments required to be made with respect thereto, that they
have been required to file with the Commission. All reports,
registration statements and other filings (including all notes,
exhibits and schedules thereto and documents incorporated by reference
therein) filed by GulfMark with the Commission since December 31, 1993
through the date of this Agreement, together with any amendments
thereto, are sometimes collectively referred to as the "GulfMark
Commission Filings." GulfMark has heretofore delivered to EVI copies of
the GulfMark Commission Filings. As of the respective dates of their
filing with the Commission, the GulfMark Commission Filings complied in
all material respects with the Securities Act, the Exchange Act and the
rules and regulations of the Commission thereunder, and did not contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were made,
not misleading. To the best knowledge of GulfMark, all material
contracts of GulfMark and its subsidiaries have been included in the
GulfMark's filings with the Commission since the initial registration
of its stock under the Exchange Act, except for those contracts not
required to be filed pursuant to the rules and regulations of the
Commission.
Each of the consolidated financial statements (including any
related notes or schedules) included in the GulfMark Commission Filings
was prepared in accordance with generally accepted accounting
principles applied on a consistent basis (except as may be noted
therein or in the notes or schedules thereto) and complied with the
rules and regulations of the Commission. Such consolidated financial
statements fairly present the consolidated financial position of
GulfMark as of the dates thereof and the results of operations, cash
flows and changes in stockholders' equity for the periods then ended
(subject, in the case of the unaudited interim financial statements, to
normal year-end audit adjustments on a basis comparable with past
periods). As of the date hereof, GulfMark has no liabilities, absolute
or contingent, that may reasonably be expected to have a GulfMark MAE,
that are not reflected in the GulfMark Commission Filings,
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except (i) those incurred in the ordinary course of business consistent
with past operations and not relating to the borrowing of money, and
(ii) those set forth in Section 2.2(e) of the GulfMark Disclosure
Letter.
(f) Conduct of Business in the Ordinary Course; Absence of
Certain Changes and Events. Since December 31, 1995, except as
contemplated by this Agreement, the Distribution Agreement or as
disclosed in the GulfMark Commission Filings or set forth in Section
2.2(f) of the GulfMark Disclosure Letter, GulfMark and its subsidiaries
have conducted their respective businesses only in the ordinary and
usual course in accordance with past practice, and there has not been:
(i) a GulfMark MAE or any other material adverse change in the
financial condition, results of operations, assets or business of
GulfMark, taken as a whole, or (ii) to the knowledge of GulfMark, any
other condition, event or development that reasonably may be expected
to result in any such material adverse change or a GulfMark MAE; (iii)
any change by GulfMark or Ercon in its accounting methods, principles
or practices; (iv) any revaluation by GulfMark or Ercon of any of its
assets, including, without limitation, writing down the value of
inventory or writing off notes or accounts receivable other than in the
ordinary course of business and consistent with past practice; (v) any
entry by GulfMark or Ercon into any commitment or transaction that
would be material to GulfMark or Ercon; (vi) any declaration, setting
aside or payment of any dividends or distributions in respect of the
GulfMark Common Stock or any redemption, purchase or other acquisition
of any of its securities; (vii) any damage, destruction or loss
(whether or not covered by insurance) adversely affecting the
properties or business of GulfMark or Ercon; (viii) any increase in
indebtedness of borrowed money other than borrowing under existing
credit facilities as disclosed in Section 2.2(f) of the GulfMark
Disclosure Letter; (ix) any granting of a security interest or Lien on
any property or assets of GulfMark or Ercon, other than (A) Liens for
taxes not due and payable and (B) inchoate mechanics', warehousemen's
and other statutory Liens incurred in the ordinary course of business
(collectively, "Permitted Liens"); or (x) any increase in or
establishment of any bonus, insurance, severance, deferred
compensation, pension, retirement, profit sharing, stock option
(including, without limitation, the granting of stock options, stock
appreciation rights, performance awards or restricted stock awards),
stock purchase or other employee benefit plan or any other increase in
the compensation payable or to become payable to any directors,
officers or key employees of GulfMark or Ercon or which GulfMark or
Ercon would be responsible.
(g) Litigation. Except as disclosed in the GulfMark Commission
Filings or as set forth in Section 2.2(g) of the GulfMark Disclosure
Letter, there are no claims, actions, suits, investigations, inquiries
or proceedings, ("Demands"), pending or, to the knowledge of GulfMark,
threatened against or affecting (i) GulfMark or Ercon or any of their
respective properties at law or in equity, or any of their employee
benefit plans or fiduciaries of such plans, or (ii) Spinco or any
GulfMark or Spinco subsidiaries or any of their respective properties
at law or in equity, or any of their respective employee benefit plans
or fiduciaries of such plans, before or by any federal, state,
municipal or other governmental agency or authority, or before any
arbitration board or panel (each a "Governmental Entity"), wherever
located (i) that exist today or (ii) that would otherwise, if adversely
determined, have a GulfMark MAE. None of GulfMark, Ercon
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or Spinco is subject to any judicial, governmental or administrative
order, writ, judgment, injunction or decree.
(h) Employee Benefit Plans.
(i) Section 2.2(h) of the GulfMark Disclosure Letter
provides a description of each of the following which is
sponsored, maintained or contributed to by GulfMark or any
corporation, trade, business or entity under common control
with GulfMark within the meaning of Section 414(b), (c), (m)
or (o) of the Code or Section 4001 of ERISA (a "GulfMark ERISA
Affiliate") for the benefit of its employees, or has been so
sponsored, maintained or contributed to within three years
prior to the Closing Date.
(A) each "employee benefit plan," as
such term is defined in Section 3(3)
of the Employee Retirement Income
Security Act of 1974, as amended
("ERISA"), ("Plan"); and
(B) each stock option plan, collective bargaining
agreement, bonus plan or arrangement,
incentive award plan or arrangement, vacation
policy, severance pay plan, policy or
agreement, deferred compensation agreement or
arrangement, executive compensation or
supplemental income arrangement, consulting
agreement, employment agreement and each other
employee benefit plan, agreement, arrangement,
program, practice or understanding that is
not described in Section 2.2(h)(i)(A) to
which GulfMark or Ercon is a party or has any
obligation ("Benefit Program or Agreement").
True and complete copies of each of the Plans, Benefit
Programs or Agreements, related trusts, if applicable, and all
amendments thereto, together with (i) the Forms 5500, 990 and
1041, as applicable, for the three most recent fiscal years,
(ii) all current summary plan descriptions for each such Plan,
(iii) the most recent Internal Revenue Service determination
letters for each such Plan, as applicable, and all
correspondence with the Internal Revenue Service and the
Department of Labor relating to such Plans, Benefit Programs
and Agreements have been furnished to EVI.
(ii) Except as otherwise set forth in Section
2.2(h) of the GulfMark Disclosure Letter,
(A) None of GulfMark or any GulfMark
ERISA Affiliate contributes to or
has an obligation to contribute to,
or has at any time contributed to or
had an obligation to contribute to,
a plan subject to Title IV of ERISA,
including, without limitation, a
multi employer plan within the
meaning of Section 3(37) of ERISA,
nor have such companies engaged
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in any transaction described in
Sections 406 and 407 of ERISA
(unless exempt under Section 408) or
Section 4975 of the Code (unless
exempt);
(B) Each Plan and each Benefit Program
or Agreement has been administered,
maintained and operated in all
material respects in accordance with
the terms thereof and in compliance
with its governing documents and
applicable law (including, where
applicable, ERISA and the Code and
timely filing of Form 5500's for
each year);
(C) There is no matter pending with
respect to any of the Plans before
any governmental agency, and there
are no actions, suits or claims
pending (other than routine claims
for benefits) or, to the knowledge
of GulfMark or Spinco, threatened
against, or with respect to, any of
the Plans or Benefit Programs or
Agreements or their assets;
(D) No act, omission or transaction has
occurred which would result in
imposition on GulfMark or any
GulfMark ERISA Affiliate of breach
of fiduciary duty liability damages
under Section 409 of ERISA, a civil
penalty assessed pursuant to
subsections (c), (i) or (l) of
Section 502 of ERISA or a tax
imposed pursuant to Chapter 43 of
Subtitle D of the Code; and
(E) Except as provided in Section 5.7, the
execution and delivery of this Agreement
and the consummation of the transactions
contemplated hereby will not require GulfMark
or any GulfMark ERISA Affiliate to make a
larger contribution to, or pay greater
benefits under, any Plan, Benefit Program
or Agreement than it otherwise would or
create or give rise to any additional vested
rights or service credits under any Plan or
Benefit Program or Agreement or cause the
companies to make accelerated payments.
(iii) Except as set forth in Section 2.2(h) of the
GulfMark Disclosure Letter, termination of employment of any
employee of GulfMark or Ercon immediately after consummation
of the transactions contemplated by this Agreement would not
result in payments under the Plans, Benefit Programs or
Agreements which, in the aggregate, would result in imposition
of the sanctions imposed under Sections 280G and 4999 of the
Code.
(iv) Each Plan may be unilaterally amended or
terminated in its entirety without liability except as to
benefits accrued thereunder prior to such amendment or
termination.
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(v) Except as set forth in Section 2.2(h) of the
GulfMark Disclosure Letter, none of the employees of GulfMark
or Ercon are subject to union or collective bargaining
agreements.
(vi) None of GulfMark or any of the GulfMark ERISA
Affiliates has agreed or is obligated to provide retiree
medical coverage and each of such companies has fully complied
with all obligations under COBRA applicable to it.
(i) Taxes.
(i) Except as set forth in Section 2.2(i) of the
GulfMark Disclosure Letter, all Tax Returns of or relating to
any Tax that are required to be filed on or before the Closing
Date by or with respect to GulfMark or any GulfMark
Subsidiary, or any other corporation that is or was a member
of an affiliated group (within the meaning of Section 1504(a)
of the Code) of corporations of which GulfMark was a member
for any period ending on or prior to the Closing Date, have
been or will be duly and timely filed, and all Taxes,
including interest and penalties, due and payable pursuant to
such Tax Returns have been or will be duly and timely paid or
adequately provided for in reserves established by GulfMark or
any such GulfMark Subsidiary, except where the failure to
file, pay or provide for would not have a material adverse
effect on the financial condition, results of operations, or
business of GulfMark or otherwise result in a GulfMark MAE.
All income Tax returns of or with respect to GulfMark or any
GulfMark Subsidiary have been audited by the applicable
Governmental Authority, or the applicable statute of
limitations has expired, for all periods up to and including
the tax year ended December 31, 1991. There is no material
claim against GulfMark or any GulfMark Subsidiary with respect
to any Taxes, and no material assessment, deficiency or
adjustment has been asserted or proposed with respect to any
Tax Return of or with respect to GulfMark or any GulfMark
Subsidiary that has not been adequately provided for in
reserves established by GulfMark or such GulfMark Subsidiary.
The total amounts set up as liabilities for current and
deferred Taxes in the consolidated financial statements
included in the GulfMark Commission Filings have been prepared
in accordance with generally accepted accounting principles
and are sufficient to cover the payment of all material Taxes,
including any penalties or interest thereon and whether or not
assessed or disputed, that are, or are hereafter found to be,
or to have been, due with respect to the operations of
GulfMark or any GulfMark Subsidiary through the periods
covered thereby. GulfMark has (and as of the Closing Date will
have) made estimated tax payments for taxable years for which
the United States consolidated federal income Tax return is
not yet due required with respect to Taxes. Except as set
forth in Section 2.2(i) of the GulfMark Disclosure Letter, no
waiver or extension of any statute of limitations as to any
federal, state, local or foreign Tax matter has been given by
or requested from GulfMark or any GulfMark Subsidiary. Except
for statutory Liens for current Taxes not yet due, no Liens
for Taxes exist upon the assets of GulfMark. Except as set
forth in paragraph 2.2(i) of the GulfMark Disclosure Letter,
none of GulfMark or any GulfMark Subsidiary has filed
consolidated income Tax Returns with any corporation, other
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than consolidated federal, state or foreign income Tax returns
by GulfMark for any taxable period which is not now closed by
the applicable statute of limitations. None of GulfMark or any
GulfMark Subsidiary has any deferred intercompany gain as
defined in Treasury Regulations Section 1.1502-13.
(ii) As of the Closing Date, to GulfMark's knowledge,
there is no plan or intention by the stockholders of GulfMark
to sell, exchange or otherwise dispose of a number of shares
of EVI received in the Merger that would reduce the GulfMark
stockholders' ownership of EVI shares to a number of shares
having a value, as of the date of the Merger, of less than 50%
of the value of all of the formerly outstanding Shares as of
the same date. For purposes of this representation, Shares
exchanged for cash or other property or exchanged in lieu of
fractional shares of EVI will be treated as outstanding Shares
on the date of the Merger. Moreover, the shares of EVI held by
the GulfMark stockholders and otherwise sold, redeemed or
disposed of prior or subsequent to the Merger will be
considered in making this representation.
(iii) GulfMark is not an investment company as
defined in ss.368(a)(2)(F)(iii) and (iv) of the Code.
(iv) GulfMark is not under the jurisdiction of a
court in a Title 11 or similar case with the meaning of
ss.368(a)(3)(A) of the Code.
(v) There is no intercorporate indebtedness existing
between GulfMark and EVI that was issued, acquired or will be
settled at a discount.
(j) Environmental Matters. Except as set forth in Section
2.2(j) of the GulfMark Disclosure Letter, (i) the properties,
operations and activities of GulfMark and each of its subsidiaries
complies in all material respects with all applicable Environmental
Laws; (ii) none of GulfMark or any of its GulfMark Subsidiaries is
subject to any existing, pending or, to the knowledge of GulfMark,
threatened action, suit, investigation, inquiry or proceeding by or
before any governmental authority under any Environmental Law; (iii)
except where the failure would have a GulfMark MAE, all notices,
permits, licenses, or similar authorizations, if any, required to be
obtained or filed by GulfMark or Ercon under any Environmental Law in
connection with any aspect of the business of GulfMark, Ercon or any
GulfMark Subsidiary, including without limitation those relating to the
treatment, storage, disposal or release of a hazardous substance or
solid waste, have been duly obtained or filed and will remain valid and
in effect after the Merger and the Distribution, and GulfMark and Ercon
is in compliance with the terms and conditions of all such notices,
permits, licenses and similar authorizations; (iv) GulfMark and each of
its subsidiaries has satisfied and are currently in compliance with all
financial responsibility requirements applicable to their operations
and imposed by any governmental authority under any other Environmental
Law, and none of such parties has received any notice of noncompliance
with any such requirements; (v) to GulfMark's knowledge, there are no
physical or environmental conditions existing on any property currently
owned or previously owned by GulfMark or any entity in which it has or
had ownership interest that could reasonably be expected
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to give rise to any on-site or off-site remedial obligations under any
Environmental Laws; and (vi) to GulfMark's knowledge, since the
effective date of the relevant requirements of applicable Environmental
Laws, all hazardous substances or solid wastes generated by GulfMark or
used in connection with their properties or operations have been
transported only by carriers authorized under Environmental Laws to
transport such substances and wastes, and disposed of only at
treatment, storage, and disposal facilities authorized under
environmental laws to treat, store or dispose of such substances and
wastes, and, to the knowledge of GulfMark, such carriers and facilities
have been and are operating in compliance with such authorizations and
are not the subject of any existing, pending, or overtly threatened
action, investigation, or inquiry by any governmental authority in
connection with any Environmental Laws.
For purposes of this Agreement, the term "Environmental Laws"
shall mean any and all laws, statutes, ordinances, rules, regulations,
orders or determinations of any Governmental Authority pertaining to
health or the environment currently in effect in any and all
jurisdictions in which the party in question and its subsidiaries own
property or conduct business, including without limitation, the Clean
Air Act, as amended, the Comprehensive Environmental, Response,
Compensation, and Liability Act of 1980 ("CERCLA"), as amended, the
Federal Water Pollution Control Act, as amended, the Occupational
Safety and Health Act of 1970, as amended, the Resource Conservation
and Recovery Act of 1976 ("RCRA"), as amended, the Safe Drinking Water
Act, as amended, the Toxic Substances Control Act, as amended, the
Hazardous & Solid Waste Amendments Act of 1984, as amended, the
Superfund Amendments and Reauthorization Act of 1986, as amended, the
Hazardous Materials Transportation Act, as amended, the Oil Pollution
Act of 1990 ("OPA"), any state laws pertaining to the handling of oil
and gas exploration and production wastes or the use, maintenance, and
closure of pits and impoundments, and all other environmental
conservation or protection laws. For purposes of this Agreement, the
terms "hazardous substance" and "release" have the meanings specified
in RCRA; provided, however, that to the extent the laws of the state in
which the property is located establish a meaning for "hazardous
substance," "release," "solid waste" or "disposal" that is broader than
that specified in either CERCLA or RCRA, such broader meaning shall
apply. For purposes of this Agreement, the term "Governmental
Authority" includes the United States, any foreign jurisdiction, the
state, county, city, and political subdivisions in which the party in
question owns property or conducts business, and any agency,
department, commission, board, bureau or instrumentality of any of
them.
(k) Investment Company. GulfMark is not an investment
company as defined in the Investment Company Act of 1940 and the
rules and regulations promulgated thereunder.
(l) Severance Payments. Except as set forth in Section 2.2(l)
of the GulfMark Disclosure Letter, GulfMark will not have any liability
or obligation to pay a severance payment or similar obligation to any
of their respective employees, officers, or directors as a result of
the Merger or the transactions contemplated by this Agreement, nor will
any of such Persons be entitled to an increase in severance payments or
other benefits
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as a result of the Merger, the Contribution, the Distribution or the
transactions contemplated by this Agreement or the Other Agreements in
the event of the subsequent termination of their employment.
(m) Voting Requirements. The affirmative vote of the holders
of a majority of the outstanding shares of GulfMark Common Stock is the
only vote of the holders of any class or series of the capital stock of
GulfMark necessary to approve this Agreement, the Merger, the
Contribution, the Distribution and the transactions contemplated hereby
and by the Other Agreements in order to comply with the DGCL,
GulfMark's Certificate of Incorporation and Bylaws and the rules and
regulations of The NASDAQ Stock Market.
(n) Brokers. Except for ▇▇▇▇▇▇▇▇▇ & Company, Inc., whose fees
shall be paid by GulfMark, no broker, investment banker, or other
Person acting on behalf of GulfMark is or will be entitled to any
broker's, finder's or other similar fee or commission in connection
with the transactions contemplated by this Agreement.
(o) Assets and Liabilities at Closing. At the Effective Time:
(i) the assets of GulfMark shall consist of (1)
2,235,572 shares of EVI Common Stock, which shall be held free
and clear of all Liens, (2) 200 shares of Common Stock of
AIOC, which represents all of the ownership interest of
GulfMark and the GulfMark Subsidiaries in AIOC, (3) all assets
used in connection with the business and operations previously
conducted by Ercon, (4) all tax, financial, accounting and
other general corporate records, including records relating to
all past operations and subsidiaries (including partnerships
and joint ventures) other than those constituting a part of
the Assets, (5) GulfMark's accounts receivable (billed and
unbilled) relating to the business conducted by Ercon, (6)
cash in the amount of $300,000 and (7) cash in the amount of
the transactional expenses of GulfMark to be paid by GulfMark
relating to the Contribution, the Distribution and the Merger;
(ii) the liabilities of GulfMark shall consist only
of certain expenses related to the Merger and the Distribution
which shall have been fully reserved for in the Net Working
Capital, and GulfMark's accounts payable relating to the
business conducted by Ercon, which shall have been fully
reserved for in the Net Working Capital;
(iii) all obligations and liabilities (fixed or
contingent, known or unknown) of GulfMark shall have been
assumed by Spinco other than liabilities described in clause
(ii) and the obligation to perform in the future under
contracts relating to Ercon that will be identified on
schedules to the Distribution Agreement; and
(iv) the Net Working Capital of GulfMark shall equal
$300,000. "Net Working Capital" shall mean the current
assets of GulfMark excluding inventory, less the liabilities
of GulfMark as reflected on the balance sheet of GulfMark as
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of the Effective Time on an unconsolidated basis. Current
assets and liabilities shall have the meaning attributable to
them by generally accepted account principles as applied
historically by GulfMark, provided, however, for purposes of
the definition of Net Working Capital, (i) accounts receivable
shall be net of reserves for bad debt and doubtful accounts,
(ii) the stock of AIOC shall not be considered a current asset
and (iii) liabilities shall mean the full undiscounted amount
of any liabilities of GulfMark and Ercon, including any
liabilities that will accrue as a result of the Merger, the
Contribution or the Distribution, whether or not such
liabilities would be required to be reflected as a liability
by generally accepted accounting principles.
(p) Compliance with Laws. GulfMark, Spinco, Ercon and each of
their respective subsidiaries hold all required, necessary or
applicable permits, licenses, variances, exemptions, orders, franchises
and approvals of all Governmental Entities, except where the failure to
so hold could not reasonably be expected to have a GulfMark MAE (the
"GulfMark Permits"). All applications with respect to such permits,
licenses, variances, exemptions, orders, franchises and approvals were
complete and correct in all material respects when made and neither
GulfMark nor Spinco know of any reason why any of such permits,
licenses, variances, exemptions, orders, franchises and approvals would
be subject to cancellation. GulfMark, Spinco, Ercon, and each of their
respective subsidiaries are in compliance with the terms of the
GulfMark Permits except where the failure to so comply could not
reasonably be expected to have a GulfMark MAE. None of GulfMark,
Spinco, Ercon, nor any of their respective subsidiaries has violated or
failed to comply with any statute, law, ordinance, regulation, rule,
permit or order of any Federal, state or local government, domestic or
foreign, or any Governmental Entity, any arbitration award or any
judgment, decree or order of any court or other Governmental Entity,
applicable to GulfMark, Spinco, Ercon or any of their respective
subsidiaries or their respective business, assets or operations, except
for violations and failures to comply that would not have a GulfMark
MAE.
(q) Contracts.
(i) Section 2.2(q) to the GulfMark Disclosure Letter
contains a complete list of the following contracts,
agreements, arrangements and commitments: (i) all employment
or consulting contracts or agreements to which GulfMark or
Ercon is contractually obligated; (ii) current leases, sales
contracts and other agreements with respect to any property,
real or personal, of GulfMark or Ercon or to which GulfMark or
Ercon is contractually obligated; (iii) contracts or
commitments for capital expenditures or acquisitions in excess
of $30,000 to which GulfMark or Ercon is obligated; (iv)
agreements, contracts, indentures or other instruments
relating to the borrowing of money, or the guarantee of any
obligation for the borrowing of money, to which GulfMark,
Ercon, Spinco or any of their subsidiaries is a party or any
of their respective properties is bound; (v) contracts or
agreements or amendments thereto that would be required to be
filed as an exhibit to an Annual Report on Form 10-K filed by
GulfMark as of the date hereof that has not been filed as an
exhibit to the GulfMark's Annual Report on Form 10-K for the
year ended December 31, 1995, filed by it with the
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Commission or any report filed with the Commission under the
Exchange Act since such date; (vi) all outstanding proposals
to which Ercon is subject to as of November 21, 1996; (vii)
all corporations, partnerships, limited liability companies
and other entities which GulfMark has owed, directly or
indirectly, an equity interest since 1969, in which the
officers of GulfMark are aware after reasonable investigation,
(viii) all material indemnification and guaranty or other
similar obligations to which GulfMark or Ercon is bound and
which the officers of GulfMark or Ercon, after reasonable
investigation, are aware, (ix) any outstanding bonds, letters
of credit posted or guaranteed by GulfMark or Ercon with
respect to any Person, (x) any covenants not to compete or
other obligations affecting GulfMark or Ercon that would
restrict the Surviving Corporation or EVI and its affiliates
from engaging in any business or activity which the officers
of GulfMark or Ercon are aware, after reasonable investigation
and (xi) contracts, agreements, arrangements or commitments,
other than the foregoing that could reasonably be considered
to be material to GulfMark or Ercon.
(ii) True and correct copies of all the instruments
described in Section 2.2(q) of the GulfMark Disclosure Letter
have been furnished or made a available to EVI. Except as
noted in the GulfMark Disclosure Letter, all such agreements,
arrangements or commitments are valid and subsisting and each
of GulfMark, Ercon, Spinco and their respective subsidiaries
to the extent each is a party, has duly performed its
obligations thereunder in all material respects to the extent
such obligations have accrued, and no breach or default
thereunder by GulfMark, Ercon, Spinco or their respective
subsidiaries or, to the knowledge of GulfMark, any other party
thereto has occurred that could impair the ability of each of
GulfMark, Ercon, Spinco or their respective subsidiaries to
enforce any material rights thereunder. There are no material
liabilities of any of the parties to any of the contracts
between GulfMark, Ercon, Spinco or any of their subsidiaries
and third parties arising from any breach of or default in any
provision thereof or which would permit the acceleration of
any obligation of any party thereto or the creation of a Lien
upon any asset of GulfMark, Ercon, Spinco or any of their
subsidiaries. Neither GulfMark nor Ercon has any information
that might reasonably indicate that any of the material
customers or suppliers to Ercon intend to cease purchasing
from, selling to or dealing with it, nor has any information
been brought to the attention of GulfMark or Ercon that might
reasonably lead either to believe any such customer or
supplier intends to alter in any material respect the amount
of such purchases, sales or the extent of dealings with
GulfMark or Ercon or would alter in any significant respect
such purchases, sales or dealings in the event of the
consummation of the transactions contemplated hereby.
(r) Title to Property.
(i) At the Effective Time, GulfMark will have good
and marketable title to, or valid leasehold interests in, all
its properties and assets. GulfMark has good and valid title
to 2,235,572 shares of EVI Common Stock, free and clear
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of all Liens. GulfMark has good and valid title to 200
shares of AIOC Common Stock, free and clear of all Liens.
(ii) Each of GulfMark and Ercon has complied in all
material respects with the terms of all leases to which it is
a party and under which it is in occupancy, and all such
leases are in full force and effect. Each of GulfMark and
Ercon enjoys peaceful and undisturbed possession under all
such leases.
(s) Insurance Policies. Section 2.2(s) of the GulfMark
Disclosure Letter contains a correct and complete description of all
insurance policies of GulfMark covering GulfMark, Ercon and their
subsidiaries, any employees or other agents of GulfMark and its
subsidiaries or any assets of GulfMark, Ercon and their subsidiaries.
Each such policy is in full force and effect, is with responsible
insurance carriers and is substantially equivalent in coverage and
amount to policies covering companies of the size of GulfMark and in
the business in which GulfMark and its subsidiaries is engaged, in
light of the risk to which such companies and their employees,
businesses, properties and other assets may be exposed. All retroactive
premium adjustments under any worker's compensation policy of GulfMark
or any of its subsidiaries have been recorded in GulfMark's financial
statements in accordance with generally accepted accounting principles
and are reflected in the financial statements contained in the
Commission Filings.
(t) Loans. Section 2.2(t) of the GulfMark Disclosure Letter
sets forth all existing loans, advances or other extensions of credit
(excluding accounts receivable arising in the ordinary course of
business) by GulfMark or Ercon subsidiaries to any party other than
intercompany loans, advances, guaranties or extensions of credit. All
items listed in Section 2.2(t) of the GulfMark Disclosure Letter will
be repaid in full, or assumed by Spinco, prior to the Effective Time of
the Merger. All intercompany obligations and loans between GulfMark and
its subsidiaries, including Spinco, will be extinguished prior to the
Distribution without any ongoing liability to GulfMark or Spinco with
respect thereto, except as set forth herein or in the Distribution
Agreement.
(u) No Fraudulent Transfer. GulfMark has not within the last
twelve months made any transfer or incurred any obligation with actual
intent to hinder, delay or defraud any entity to which it was or may
become indebted and it has not transferred any material property
without receiving reasonably equivalent value for any such transfer
obligation. Both immediately prior to and immediately after the
Distribution and the Merger, (i) the fair value of GulfMark's assets
and Spinco's assets after the Distribution at a fair valuation exceeds
its debts and liabilities, subordinated, contingent or otherwise, (ii)
the present fair saleable value of GulfMark's and Spinco's property is
greater than the amount that will be required to pay its probable
liability on its debts and other liabilities, subordinated, contingent
or otherwise, as such debts and liabilities become absolute and mature,
(iii) GulfMark prior to the Distribution and Spinco after the
Distribution each reasonably expect to be able to pay its debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured, and (iv) GulfMark before the
Distribution and Spinco after the Distribution will not have
unreasonably small capital with which to conduct the business in which
it is
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engaged as such business is now conducted and is proposed to be
conducted. For all purposes of clauses of (i) through (iv), the amount
of contingent liabilities at any time shall be computed as the amount
that, in light of all the facts and circumstances existing at such
time, represents the amount that can reasonably be expected to become
an actual or matured liability.
(v) Information Supplied. None of the information supplied or
to be supplied by GulfMark for inclusion or incorporation by reference
in (i) the Registration Statement (as defined in Section 5.1) will, at
the time the Registration Statement is filed with the Commission, and
at any time it is amended or supplemented or at the time it becomes
effective under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and
(ii) the Proxy Statement will, at the date the Proxy Statement is first
mailed to GulfMark's stockholders and at the time of the GulfMark
Stockholders Meeting, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Proxy
Statement will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations
thereunder. For purposes of this Agreement, the parties agree that the
statements made and information in the Registration Statement and the
Proxy Statement relating to the Federal income tax consequences of the
transactions contemplated hereby shall be deemed to be supplied by
GulfMark and Spinco and not by EVI or Sub.
ARTICLE III
COVENANTS OF GULFMARK
3.1 CONDUCT OF BUSINESS BY GULFMARK PENDING THE MERGER. GulfMark
covenants and agrees that, from the date of this Agreement until the Effective
Time, unless EVI shall otherwise agree in writing or as otherwise expressly
contemplated by this Agreement or the Distribution Agreement or set forth in
Section 3.1 of the GulfMark Disclosure Letter:
(a) the business of GulfMark, including that of Ercon, and the
GulfMark Subsidiaries shall be conducted only in, and GulfMark and the
GulfMark Subsidiaries shall not take any action except in, the ordinary
course of business and consistent with past practice; provided,
however, that GulfMark shall cause Ercon to be merged into it prior to
the Effective Time;
(b) GulfMark shall not directly or indirectly do any of the
following: (i) issue, sell, pledge, dispose of or encumber any capital
stock of GulfMark except upon the exercise of GulfMark Options; (ii)
split, combine, or reclassify any outstanding capital stock, or
declare, set aside, or pay any dividend payable in cash, stock,
property, or otherwise with respect to its capital stock whether now or
hereafter outstanding; (iii) redeem, purchase or acquire or offer to
acquire any of its capital stock; (iv) acquire, agree to acquire or
make any offer to acquire for cash or other consideration, any equity
interest in or assets of any corporation, partnership, joint venture,
or other entity in an
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amount greater than $500,000; or (v) enter into any contract,
agreement, commitment, or arrangement with respect to any of the
matters set forth in this Section 3.1(b);
(c) GulfMark shall not transfer, dispose or otherwise convey
any of the shares of EVI Common Stock held by it or grant or permit
there to exist any Lien on such shares;
(d) GulfMark shall not enter into any contract regarding the
business of Ercon having a term greater than 120 days or involving an
amount in excess of $50,000 or commit to do the same provided, it is
understood that EVI shall send a representative to Ercon's weekly sales
meetings to approve or reject pending proposals and contracts. If no
EVI representative attends the weekly meeting to make such decisions,
Ercon shall forward the weekly proposals listing to the EVI
representative; unless EVI objects in writing, proposals and contracts
shall be deemed approved by EVI two (2) business days after receipt of
the weekly proposals listing;
(e) GulfMark shall not become bound by any agreement or
obligation in an amount in excess of $500,000 in the aggregate for all
such agreements and obligations unless by the terms of such agreement
or obligation such agreement or obligation will be assumed by Spinco as
of the Distribution and GulfMark will have no further obligations with
respect thereto;
(f) GulfMark shall not pledge or encumber any of the assets
to be held by GulfMark following the Distribution;
(g) GulfMark shall not enter into any employment or
consulting contracts;
(h) GulfMark shall not enter into any contract or agreement
that if effective on the date hereof would be required to be identified
as a disclosure pursuant to Section 2.2(q)(i), (ii) or (x) of the
GulfMark Disclosure Letter.
(i) GulfMark shall not sell, lease, mortgage, pledge, ▇▇▇▇▇ ▇
▇▇▇▇ on or otherwise encumber or otherwise dispose of any of GulfMark's
or Ercon's properties or assets, except sales of inventory in the
ordinary course of business consistent with past practice;
(j) Neither GulfMark nor Ercon shall directly or indirectly
incur any indebtedness for borrowed money or guarantee any such
indebtedness of another Person, issue or sell any debt securities or
warrants or other rights to acquire any debt securities of GulfMark or
Ercon, guarantee any debt securities of another Person, enter into any
"keep well" or other agreement to maintain any financial statement
condition of another Person or enter into any arrangement having the
economic effect of any of the foregoing, except for short-term
borrowings incurred in the ordinary course of business consistent with
past practice which obligations in respect of GulfMark and Ercon shall
be released in connection with the Distribution, or make or permit to
remain outstanding any loans, advances or capital contributions to, or
investments in, any other Person, other than to GulfMark or any direct
or indirect wholly owned subsidiary of GulfMark;
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(k) GulfMark shall not make any election relating to Taxes;.
(l) Neither GulfMark nor Ercon shall not change any
accounting principle used by it or applicable to Ercon;
(m) GulfMark shall use its reasonable efforts (i) to preserve
intact the business organization of GulfMark and Ercon, (ii) to
maintain in effect any material authorizations or similar rights of
GulfMark or Ercon, (iii) to preserve the goodwill of those having
material business relationships with it; (iv) to maintain and keep each
of GulfMark's and Ercon's properties in the same repair and condition
as presently exists, except for deterioration due to ordinary wear and
tear and damage due to casualty; and (v) to maintain in full force and
effect insurance comparable in amount and scope of coverage to that
currently maintained by it and Ercon;
(n) GulfMark shall, and shall cause the GulfMark Subsidiaries
to, perform their respective obligations under any contracts and
agreements to which it is a party or to which any of its assets is
subject, except to the extent such failure to perform would not have a
GulfMark MAE, and except for such obligations as GulfMark in good faith
may dispute;
(o) GulfMark shall cause there to exist immediately prior to
the Effective Time Net Working Capital of not less than $300,000;
(p) Neither GulfMark nor Ercon shall settle or compromise any
litigation (whether or not commenced prior to the date of this
Agreement) other than settlements or compromises: (i) of litigation
where the amount paid in settlement or compromise does not exceed
$500,000, or if greater, the amount of the reserve therefor reflected
in the most recent SEC Documents and the terms of the settlement would
not otherwise have a GulfMark MAE, or (ii) in consultation and
cooperation with EVI, and, with respect to any such settlement, with
the prior written consent of EVI;
(q) GulfMark shall cause the Distribution Agreement to be
executed and delivered by GulfMark and Spinco and the Contribution and
Distribution to be effected prior to the Merger immediately prior to
the Effective Time; and
(r) GulfMark shall not authorize any of, or commit or agree to
take any of, or permit any GulfMark Subsidiary to take any of, the
foregoing actions to the extent prohibited by the foregoing and shall
not, and shall not permit any of the GulfMark Subsidiaries to, take any
action that would, or that reasonably could be expected to, result in
any of the representations and warranties set forth in this Agreement
becoming untrue or any of the conditions to the Merger set forth in
Article VI not being satisfied. GulfMark promptly shall advise EVI
orally and in writing of any change or event having, or which, insofar
as reasonably can be foreseen, would have, a material adverse effect on
GulfMark and the GulfMark Subsidiaries, taken as a whole; or cause a
GulfMark MAE.
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3.2 NET WORKING CAPITAL REQUIREMENTS. GulfMark covenants that as of the
Effective Time it shall have Net Working Capital equal to $300,000. Net Working
Capital shall have the meaning set forth in Section 2.2(o) of this Agreement.
Spinco and GulfMark covenant and agree that they will adjust the Net Working
Capital 90 days after the Effective Date as follows ("Adjustment Date");
(a) to the extent there exists on the Adjustment Date any
uncollected accounts receivable (including uncollected unbilled
accounts receivable) or notes receivable which were counted in the
calculation of Net Working Capital as of the Effective Date
("Uncollected Receivables"), Spinco shall purchase from GulfMark such
Uncollected Receivables for the face amounts thereof and GulfMark shall
assign such Uncollected Receivables to Spinco without recourse;
(b) on the Adjustment Date after any purchase of Uncollected
Receivables, if it is determined that as of the Effective Time Net
Working Capital exceeded $300,000, GulfMark shall remit any amounts in
excess of $300,000 to Spinco in cash;
(c) on the Adjustment Date, after any purchase of Uncollected
Receivables, it is determined that Net Working Capital was less than
$300,000 at the Effective Time, Spinco shall remit to GulfMark an
amount equal to the difference between $300,000 and the amount of Net
Working Capital as the Effective Time (after consideration of purchases
of Uncollected Receivables);
(d) the provisions of this Section 3.2 shall not affect
Spinco's obligations under the Distribution Agreement to assume and
indemnify EVI as set forth therein.
3.3 AFFILIATES' AGREEMENTS. Prior to the Closing Date, GulfMark shall
deliver to EVI a letter identifying all Persons that are, at the time this
Agreement is submitted for approval to the stockholders of GulfMark,
"affiliates" of GulfMark for purposes of Rule 145 under the Securities Act.
GulfMark shall use its reasonable efforts to cause each such Person to deliver
to EVI on or prior to the Closing Date a written agreement confirming such
Person's obligations under Rule 145.
ARTICLE IV
COVENANTS OF EVI PRIOR TO THE EFFECTIVE TIME
4.1 CONDUCT OF BUSINESS BY EVI PENDING THE MERGER. EVI covenants and
agrees that, from the date of this Agreement until the Effective Time, unless
GulfMark shall otherwise agree in writing or as otherwise expressly contemplated
by this Agreement, it will not take any action that would, or that reasonably
could be expect to, result in any of the representations and warranties set
forth in this Agreement becoming untrue or any of the conditions to the Merger
set forth in Article VI not being satisfied.
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4.2 RESERVATION OF EVI STOCK. EVI shall reserve for issuance, out of
its authorized but unissued capital stock, such number of shares of EVI Common
Stock as may be issuable upon consummation of the Merger.
4.3 STOCK EXCHANGE LISTING. EVI shall use reasonable efforts to cause
the shares of EVI Common Stock to be issued in the Merger to be approved for
listing on the New York Stock Exchange, subject to official notice of issuance,
prior to the Closing Date.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 JOINT PROXY STATEMENT/PROSPECTUS; REGISTRATION STATEMENT. As
promptly as reasonably practicable after the execution of this Agreement, EVI
and GulfMark shall prepare and file with the Commission preliminary proxy
materials that shall constitute the Proxy Statement of EVI and GulfMark and the
registration statement with respect to the EVI Common Stock to be issued in
connection with the Merger (the "Registration Statement"). As promptly as
reasonably practicable after final comments are received from and cleared by the
Commission on the preliminary proxy materials, EVI and GulfMark shall file with
the Commission a combined joint proxy statement and registration statement on
Form S-4 (or on such other form as shall be appropriate) relating to the
approval and adoption of the Merger and this Agreement by the stockholders of
EVI and the stockholders of GulfMark and the issuance by EVI of EVI Common Stock
in connection with the Merger and shall use their reasonable efforts to cause
the Registration Statement to become effective as soon as practicable. Subject
to the terms and conditions set forth in Section 6.2 and the fiduciary
obligations of the Board of Directors of EVI with respect to such matters, the
Proxy Statement shall contain a statement that the Board of Directors of EVI
recommended that the stockholders of EVI approve and adopt the Merger and this
Agreement. Subject to the terms and conditions set forth in Section 6.3 and the
fiduciary obligations of the Board of Directors of GulfMark with respect to such
matters, the Proxy Statement shall contain a statement that the Board of
Directors of GulfMark recommended that the stockholders of GulfMark approve and
adopt the Merger and this Agreement.
5.2 ACCOUNTANTS LETTERS.
(a) GulfMark shall use its reasonable efforts to cause ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP to deliver a letter dated as of the date of the Proxy
Statement and confirmed and updated at the Closing as of the Closing
Date, and addressed to itself and EVI, in the form and substance
reasonably satisfactory to EVI and customary in the scope and substance
for agreed upon procedures letters delivered by independent public
accountants in connection with registration statements and proxy
statements similar to the Registration Statement and Proxy Statement.
(b) EVI shall use its reasonable efforts to cause ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP to deliver a letter dated as of the date of the Proxy
Statement and confirmed and updated at the Closing as of the Closing
Date, and addressed to itself and GulfMark, in form and substance
reasonably satisfactory to GulfMark and customary in scope and
substance for
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agreed upon procedures letters delivered by independent public
accountants in connection with registration statements and proxy
statements similar to the Registration Statement and Proxy Statement.
5.3 MEETINGS OF STOCKHOLDERS.
(a) GulfMark shall promptly take all action reasonably
necessary in accordance with the DGCL and its Certificate of
Incorporation and bylaws to convene a meeting of its stockholders to
consider and vote upon the adoption and approval of the Merger and this
Agreement and the Distribution. Subject to the terms and conditions set
forth in Section 6.3 and the fiduciary obligations of the Board of
Directors of GulfMark with respect to such matters, the Board of
Directors of GulfMark (i) shall recommend at such meeting that the
stockholders of GulfMark vote to adopt and approve the Merger and this
Agreement and the Distribution, (ii) shall use its reasonable efforts
to solicit from stockholders of GulfMark proxies in favor of such
adoption and approval and (iii) shall take all other action reasonably
necessary to secure a vote of its stockholders in favor of the adoption
and approval of the Merger and this Agreement.
(b) EVI shall promptly take all action reasonably necessary in
accordance with the DGCL and its Certificate of Incorporation and
bylaws to convene a meeting of its stockholders to consider and vote
upon the adoption and approval of the Merger and this Agreement.
Subject to the terms and conditions set forth in Section 6.2 and the
fiduciary obligations of the Board of Directors of EVI with respect to
such matters, the Board of Directors of EVI (i) shall recommend at such
meeting that the stockholders of EVI vote to adopt and approve the
Merger and this Agreement, (ii) shall use its reasonable efforts to
solicit from stockholders of EVI proxies in favor of such adoption and
approval and (iii) shall take all other action reasonably necessary to
secure a vote of its stockholders in favor of the adoption and approval
of the Merger and this Agreement.
(c) EVI and GulfMark shall coordinate and cooperate with
respect to the timing of such meetings and shall endeavor to hold such
meetings on the same day and as soon as practicable after the date
hereof.
5.4 FILINGS; CONSENTS; REASONABLE EFFORTS. Subject to the terms and
conditions of this Agreement, GulfMark and EVI shall (i) make all necessary
filings with respect to the Merger and this Agreement under the HSR Act, the
Securities Act, the Exchange Act, and applicable blue sky or similar securities
laws and shall use all reasonable efforts to obtain required approvals and
clearances with respect thereto; (ii) use reasonable efforts to obtain all
consents, waivers, approvals, authorizations, and orders required in connection
with the authorization, execution, and delivery of this Agreement and the
consummation of the Merger; and (iii) use reasonable efforts to take, or cause
to be taken, all appropriate action, and do, or cause to be done, all things
necessary, proper, or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement.
5.5 NOTIFICATION OF CERTAIN MATTERS. GulfMark shall give prompt
notice to EVI, and EVI shall give prompt notice to GulfMark, orally and in
writing, of (i) the occurrence, or failure to occur, of any event which
occurrence or failure would be likely to cause any representation
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or warranty contained in this Agreement to be untrue or inaccurate at any time
from the date hereof to the Effective Time; and (ii) any material failure of
GulfMark or EVI, as the case may be, or any officer, director, employee or agent
thereof, to comply with or satisfy any covenant, condition or agreement to be
compiled with or satisfied by it hereunder.
5.6 EXPENSES. Whether or not the Merger is consummated, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses, except
those out-of-pocket expenses (which do not include fees for attorneys and
accountants) incurred in connection with (i) the registration fees for the EVI
Common Stock under the Securities Act to be issued in the Merger, (ii) the
registration and qualification of the EVI Common Stock under any state
securities and blue sky laws, (iii) the listing of the EVI Common Stock on the
NYSE, (iv) the HSR filing fee and (v) the printing and mailing of the
Registration Statement and the Proxy Statement shall be paid equally by EVI and
GulfMark; provided, however, that if this Agreement shall have been terminated
pursuant to Section 7.1 as a result of the willful breach by a party of any of
its representations, warranties, covenants, or agreements set forth in this
Agreement, such breaching party shall pay the direct out-of-pocket costs and
expenses of the other parties in connection with the transactions contemplated
by this Agreement.
5.7 GULFMARK'S EMPLOYEE BENEFITS.
(a) GulfMark shall take action prior to the Merger and the
Distribution to transfer the GulfMark Options to the Spinco adjustment
plans and then terminate the GulfMark Plans such that all obligations
with respect thereto shall be that of Spinco.
(b) Subject to the receipt of a favorable Internal Revenue
Service determination letter under Section 401(a) and 501(a) of the
Code with respect to GulfMark 401(k) Plan and resolution of any
outstanding issues regarding the GulfMark 401(k) Plan in a manner
satisfactory to EVI's counsel, EVI will cause the GulfMark 401(k) Plan
to be merged into an EVI plan qualified under Section 401(a) and 501(a)
of the Code ("EVI Plan"). Spinco shall be responsible for and perform
any and all obligations relating to the (i) filing of the GulfMark
401(k) Plan for a determination letter under Section 401(a) and 501(a)
of the Code and (ii) resolution of any issues regarding the GulfMark
401(k) Plan, both to the satisfaction of EVI's counsel, so that EVI
will cause the GulfMark 401(k) Plan to be merged into the EVI Plan.
GulfMark and EVI, upon being satisfied with the filings and
documentation prepared by Spinco in satisfaction of obligations (i) and
(ii) above, shall execute and deliver such filings and documents as
required to effect the merger of the GulfMark 401(k) Plan and the EVI
Plan. All reasonable costs, including attorneys fees, filing fees,
transfer fees, settlement payments and other expenses, not otherwise
satisfied by Spinco as stated herein, relating to the continuation,
qualification and merger of the GulfMark 401(k) Plan shall be paid by
Spinco. Once the GulfMark 401(k) Plan is merged into an EVI Plan,
Spinco shall not be responsible for liabilities relating to the
GulfMark 401(k) Plan occurring after the merging of such plans.
(c) GulfMark shall transfer to Spinco all employees of
GulfMark who are not directly associated with the business conducted
by Ercon without any liability to the
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Surviving Corporation. Spinco shall be responsible for all severance
and other obligations with respect to such terminated employees,
if any.
(d) Prior to the Effective Time, Spinco shall file a
registration statement on Form S-8 (or other appropriate form) with
respect to the shares of Spinco Common Stock subject to the adjusted
GulfMark options, and shall use its best efforts to maintain the
effectiveness of such registration statement (and maintain the current
status of any prospectus contained therein) for so long as any of the
adjusted GulfMark options remain outstanding.
ARTICLE VI
CONDITIONS
6.1 CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE MERGER. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment at or prior to the Closing Date of the following conditions:
(a) Ercon shall have been merged into GulfMark.
(b) This Agreement and the Merger (and the Contribution and
the Distribution in the case of GulfMark) shall have been approved and
adopted by the requisite vote of the stockholders of GulfMark and EVI,
as may be required by law, by the rules of The Nasdaq Stock Market and
the New York Stock Exchange and by any applicable provisions of their
respective charters or bylaws;
(c) The waiting period (and any extension thereof) applicable
to the consummation of the Merger under the HSR Act shall have expired
or been terminated;
(d) No order shall have been entered and remain in effect in
any action or proceeding before any foreign, federal or state court or
governmental agency or other foreign, federal or state regulatory or
administrative agency or commission that would prevent or make illegal
the consummation of the Contribution, Distribution and Merger;
(e) The Registration Statement shall be effective on the
Closing Date, and all post-effective amendments filed shall have been
declared effective or shall have been withdrawn; and no stop-order
suspending the effectiveness thereof shall have been issued and no
proceedings for that purpose shall have been initiated or, to the
knowledge of the parties, threatened by the Commission;
(f) There shall have been obtained any and all material
permits, approvals and consents of securities or blue sky commissions
of any jurisdiction, and of any other governmental body or agency, that
reasonably may be deemed necessary so that the consummation of the
Merger and the transactions contemplated thereby will be in
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compliance with applicable laws, the failure to comply with which would
have a GulfMark MAE or EVI MAE;
(g) The shares of EVI Common Stock issuable upon consummation
of the Merger shall have been approved for listing on the New York
Stock Exchange, subject to official notice of issuance; and
(h) All approvals and consents of third Persons (i) the
granting of which is necessary for the consummation of the Merger, the
Distribution or the transactions contemplated in connection therewith
and (ii) the non-receipt of which would have a GulfMark MAE or an EVI
MAE.
6.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF EVI. The obligation of EVI
to effect the Merger is, at the option of EVI, also subject to the fulfillment
at or prior to the Closing Date of the following conditions:
(a) The representations and warranties of GulfMark contained
in Section 2.2 shall be accurate as of the date of this Agreement and
(except to the extent such representations and warranties speak
specifically as of an earlier date) as of the Closing Date as though
such representations and warranties had been made at and as of that
time; all of the terms, covenants and conditions of this Agreement to
be complied with and performed by GulfMark on or before the Closing
Date shall have been duly complied with and performed in all material
respects; and a certificate to the foregoing effect dated the Closing
Date and signed by the executive vice president of GulfMark shall have
been delivered to EVI;
(b) There shall not have occurred or exist any fact or
condition that would reasonably result in a GulfMark MAE or would
constitute a material fixed or contingent liability to GulfMark, and
EVI shall have received a certificate signed by the executive vice
president of GulfMark dated the Closing Date to such effect;
(c) The Board of Directors of EVI shall have received from
Prudential Securities Corporation, financial advisor to EVI, a written
opinion, satisfactory in form and substance to the Board of Directors
of EVI, to the effect that consideration to be received by EVI in the
Merger is fair to EVI from a financial point of view, which opinion
shall have been confirmed in writing to such Board as of a date
reasonably proximate to the date the Proxy Statement is first mailed to
the stockholders of EVI and not subsequently withdrawn;
(d) GulfMark shall have received, and furnished written
copies of EVI of, the GulfMark affiliates' agreements pursuant to
Section 3.3;
(e) EVI shall have received from ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ P.C.,
counsel to GulfMark, an opinion dated the Closing Date covering
customary matters relating to the Agreement, the Distribution
Agreement, the Merger, the Contribution and the Distribution;
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(f) EVI shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP a
written opinion, in form and substance satisfactory to EVI, dated as of
the date that the Proxy Statement is first mailed to the Stockholders
of GulfMark and EVI to the effect that (i) the Merger will be treated
for U.S. federal income tax purposes as a reorganization within the
meaning of Section 368(a)(1)(B) of the Code, (ii) the Distribution will
not result in any gain or loss to GulfMark under the Code, (iii) EVI,
Sub and GulfMark will each be a party to that reorganization within the
meaning of Section 368(b) of the Code, (iv) EVI, Sub and GulfMark shall
not recognize any gain or loss for U.S. federal or state income tax
purposes as a result of the Merger or the Distribution and (v) GulfMark
and Spinco shall not recognize any gain or loss for U.S. federal or
state income tax purposes as a result of the Contribution or
Distribution, and such opinion shall be confirmed at the Closing;
(g) Spinco shall have executed and delivered to GulfMark
and EVI the Distribution Agreement in form and substance, including
schedules, acceptable to EVI;
(h) The conveyances and assumptions under the Distribution
Agreement shall have occurred;
(i) The Distribution under the Distribution Agreement shall
have occurred; and
(j) GulfMark shall have delivered to EVI a pro forma balance
sheet after giving effect to the Distribution reflecting Net Working
Capital in an amount of not less than $300,000.
6.3 ADDITIONAL CONDITIONS TO OBLIGATIONS OF GULFMARK. The obligation of
GulfMark to effect the Merger is, at the option of GulfMark, also subject to the
fulfillment at or prior to the Closing Date of the following conditions:
(a) The representations and warranties of EVI and Sub
contained in Section 2.1 shall be accurate as of the date of this
Agreement and (except to the extent such representations and warranties
speak specifically as of an earlier date) as of the Closing Date as
though such representations and warranties had been made at and as of
that time; all the terms, covenants and conditions of this Agreement to
be complied with and performed by EVI on or before the Closing Date
shall have been duly complied with and performed in all material
respects; and a certificate to the foregoing effect dated the Closing
Date and signed by the chief executive officer of EVI shall have been
delivered to GulfMark;
(b) The Board of Directors of GulfMark shall have received
from ▇▇▇▇▇▇▇▇▇ & Company, Inc., financial advisor to GulfMark, a
written opinion, satisfactory in form and substance to the Board of
Directors of GulfMark, to the effect that the exchange ratio for the
Merger is fair to the stockholders of GulfMark from a financial point
of view, which opinion shall have been confirmed in writing to such
Board as of a date reasonably proximate to the date the Proxy Statement
is first mailed to the stockholders of GulfMark and EVI and not
subsequently withdrawn;
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(c) GulfMark shall have received from Fulbright & ▇▇▇▇▇▇▇▇,
L.L.P. counsel to EVI, an opinion dated the Closing Date covering
customary matters relating to this Agreement and the Merger;
(d) GulfMark shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, a
written opinion, in form and substance satisfactory to GulfMark, dated
as of the date that the Proxy Statement is first mailed to stockholders
of GulfMark and EVI to the effect that (i) the Merger will be treated
for U.S. federal income tax purposes as a reorganization within the
meaning of Section 368(a)(1)(B) of the Code; (ii) the Distribution will
not result in any gain or loss to GulfMark under the Code, (iii) EVI,
Sub and GulfMark will each be a party to that reorganization within the
meaning of Section 368(b) of the Code, (iv) EVI, Sub and GulfMark shall
not recognize any gain or loss for U.S. federal or state income tax
purposes as a result of the Merger or the Distribution, and (v)
GulfMark and Spinco shall not recognize any gain or loss for U.S.
federal or state income tax purposes as a result of the Contribution or
Distribution, and such opinion shall be confirmed at the Closing;
(e) The Contribution under the Distribution Agreement shall
have occurred; and
(f) The Distribution under the Distribution Agreement shall
have occurred.
ARTICLE VII
MISCELLANEOUS
7.1 TERMINATION. This Agreement may be terminated and the Merger and
the other transactions contemplated herein may be abandoned at any time prior to
the Effective Time, whether prior to or after approval by the stockholders of
EVI or the stockholders of GulfMark:
(a) by mutual written consent of EVI and GulfMark;
(b) by either EVI or GulfMark if (i) the Merger has not been
consummated on or before March 31, 1997 (provided that the right to
terminate this Agreement under this clause (i) shall not be available
to any party whose breach of any representation or warranty or failure
to fulfill any covenant or agreement under this Agreement has been the
cause of or resulted in the failure of the Merger to occur on or before
such date); (ii) any court of competent jurisdiction, or some other
governmental body or regulatory authority shall have issued an order,
decree or ruling or taken any other action restraining, enjoining or
otherwise prohibiting the Merger; (iii) the stockholders of GulfMark
shall not approve the Contribution, the Distribution or the Merger at
the GulfMark stockholder meeting or at any adjournment thereof; (iv)
the stockholders of EVI shall not approve the Merger at the EVI
stockholder meeting or any adjournment thereof; or (v) in the exercise
of its good faith judgment as to its fiduciary duties to its
stockholders imposed by law, as advised by outside counsel, the Board
of Directors of
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GulfMark or EVI determines that such termination is appropriate in
complying with its fiduciary obligations.
(c) by GulfMark if (i) EVI shall have failed to comply in any
material respect with any of the covenants or agreements contained in
this Agreement to be complied with or performed by EVI or Sub at or
prior to such date of termination (provided such breach has not been
cured within 30 days following receipt by EVI of written notice from
GulfMark of such breach and is existing at the time of termination of
this Agreement); (ii) any representation or warranty of EVI contained
in this Agreement shall not be true in all respects when made (provided
such breach has not been cured within 30 days following receipt by EVI
of written notice from GulfMark of such breach and is existing at the
time of termination of this Agreement) or on and as of the Effective
Time as if made on and as of the Effective Time (except to the extent
it relates to a particular date), except for such failures to be so
true and correct which would not individually or in the aggregate,
reasonably be expected to have an EVI MAE, assuming the effectiveness
of the Merger; or (iii) the Board of Directors of EVI withdraws,
modifies or changes its recommendation of this Agreement or the Merger
in a manner adverse to GulfMark or shall have resolved to do any of the
foregoing.
(d) by EVI if (i) GulfMark shall have failed to comply in any
material respect with any of the covenants or agreements contained in
this Agreement to be complied with or performed by it at or prior to
such date of termination (provided such breach has not been cured
within 30 days following receipt by GulfMark of written notice from EVI
of such breach and is existing at the time of termination of this
Agreement; (ii) any representation or warranty of GulfMark contained in
this Agreement shall not be true in all respects when made (provided
such breach has not been cured within 30 days following receipt by
GulfMark of written notice from EVI of such breach and is existing at
the time of termination of this Agreement) or on and as of the
Effective Time as if made on and as of the Effective Time (except to
the extent it relates to a particular date), except for such failures
to be so true and correct which would not individually or in the
aggregate, reasonably be expected to have a GulfMark MAE assuming the
effectiveness of the Merger or (iii) the Board of Directors of GulfMark
withdraws, modifies or changes its recommendation of this Agreement or
the Merger in a manner adverse to EVI or shall have resolved to do any
of the foregoing.
7.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement by either EVI or GulfMark as provided in Section 7.1, this Agreement
shall forthwith become void and there shall be no liability or obligation on the
part of EVI, Sub or GulfMark, except (i) with respect to this Section 7.2,
Section 5.7 and Section 7.13, and (ii) such termination shall not relieve any
party hereto for any intentional breach prior to such termination by a party
hereto of any of its representations or warranties or of any of its covenants or
agreements set forth in this Agreement.
7.3 WAIVER AND AMENDMENT. Any provision of this Agreement may be waived
at any time by the party that is, or whose stockholders are, entitled to the
benefits thereof. This Agreement may not be amended or supplemented at any time,
except by an instrument in writing signed on behalf of each party hereto,
provided that after this Agreement has been approved and
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adopted by the stockholders of EVI and GulfMark, this Agreement may be amended
only as may be permitted by applicable provisions of the DGCL. The waiver by any
party hereto of any condition or of a breach of another provision of this
Agreement shall not operate or be construed as a waiver of any other condition
or subsequent breach. The waiver by any party hereto of any of the conditions
precedent to its obligations under this Agreement shall not preclude it from
seeking redress for breach of this Agreement other than with respect to the
condition so waived.
7.4 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. Except for the
representations and warranties of Spinco contained herein, which shall survive
without limitation, none of the representations and warranties in this Agreement
shall survive the Effective Time.
7.5 PUBLIC STATEMENTS. GulfMark and EVI agree to consult with each
other prior to issuing any press release or otherwise making any public
statement with respect to the transactions contemplated hereby, and shall not
issue any such press release or make any such public statement prior to such
consultation, except as may be required by law or applicable stock exchange
policy.
7.6 ASSIGNMENT. This Agreement shall inure to the benefit of and will
be binding upon the parties hereto and their respective legal representatives,
successors and permitted assigns. Except as set forth in this Agreement, this
Agreement shall not be assignable by the parties hereto.
7.7 NOTICES. All notices, requests, demands, claims and other
communications which are required to be or may be given under this Agreement
shall be in writing and shall be deemed to have been duly given if (i) delivered
in Person or by courier, (ii) sent by telecopy or facsimile transmission, answer
back requested, or (iii) mailed, certified first class mail, postage prepaid,
return receipt requested, to the parties hereto at the following addresses:
if to GulfMark or Spinco:
GulfMark International, Inc.
▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: W. ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
if to EVI or Sub: Energy Ventures, Inc.
▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. Duroc-▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to: Fulbright & ▇▇▇▇▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as any party shall have furnished to the other by
notice given in accordance with this Section 7.7. Such notices shall be
effective, (i) if delivered in Person or by courier, upon actual receipt by the
intended recipient, (ii) if sent by telecopy or facsimile transmission, when the
answer back is received, or (iii) if mailed, upon the earlier of five days after
deposit in the mail and the date of delivery as shown by the return receipt
therefor.
7.8 GOVERNING LAW. All questions arising out of this Agreement and the
rights and obligations created herein, or its validity, existence,
interpretation, performance or breach shall be governed by the laws of the State
of Delaware, without regard to conflict of laws principles.
7.9 ARBITRATION. Any disputes, claims or controversies connected with,
arising out of, or related to, this Agreement and the rights and obligations
created herein, or the breach, validity, existence or termination hereof, shall
be settled by Arbitration to be conducted in accordance with the Commercial
Rules of Arbitration of the American Arbitration Association, except as such
Commercial Rules may be changed by this Section 7.9. The disputes, claims or
controversies shall be decided by three independent arbitrators (that is,
arbitrators having no substantial economic or other material relationship with
the parties), one to be appointed by Spinco and one to be appointed by EVI
within fourteen days following the submission of the claim to the parties hereto
and the third to be appointed by the two so appointed within five days. Should
either party refuse or neglect to join in the timely appointment of the
arbitrators, the other party shall be entitled to select both arbitrators.
Should the two arbitrators fail timely to appoint a third arbitrator, either
party may apply to the Chief Judge of the United States District Court for the
Southern District of Texas to make such appointment. The arbitrators shall have
ninety days after the selection of the third arbitrator within which to allow
discovery, hear evidence and issue their decision or award and shall in good
faith attempt to comply with such time limits; provided, however, if two of the
three arbitrators believe additional time is necessary to reach a decision, they
may notify the parties and extend the time to reach a decision in thirty day
increments, but in no event to exceed an additional ninety days. Discovery of
evidence shall be conducted expeditiously by the Parties, bearing in mind the
Parties desire to limit discovery and to expedite the decision or award of the
arbitrators at the most reasonable cost and expense of the parties. Judgment
upon an award rendered pursuant to such Arbitration may be entered in any court
having jurisdiction, or application may be made to such court for a judicial
acceptance of the award, and an order of enforcement, as the case may be. The
place of Arbitration shall be Houston, Texas. The decision of the arbitrators,
or a majority thereof, made in writing, shall be final and binding upon the
parties hereto as to the questions submitted, and each party shall abide by such
decision. Notwithstanding the provisions of this Section 7.9, neither party
shall be prohibited from seeking injunctive relief pending the completion of any
arbitration. The costs and expenses of the arbitration proceeding, including the
fees of the arbitrators and all costs and expenses, including legal fees and
witness fees, incurred by the prevailing party, shall be borne by the losing
party.
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Solely for purposes of injunctive relief, orders in aid of arbitration
and entry of the arbitrators' award:
(a) each of the parties hereto irrevocably consents to the
non-exclusive jurisdiction of, and venue in, any state court located in
▇▇▇▇▇▇ County, Texas or any federal court sitting in the Southern
District of Texas in any suit, action or proceeding seeking injunctive
relief, orders in aid of arbitration, or entry of an arbitral award
arising out of or relating to this Agreement or any of the other
agreements contemplated hereby and any other court in which a matter
that may result in a claim for indemnification hereunder by an EVI
Indemnified Party may be brought with respect to any claim for
indemnification by an EVI Indemnified Party;
(b) each of the parties hereto waives, to the fullest extent
permitted by law, any objection that it may now or hereafter have to
the laying of venue of any suit, action or proceeding seeking
injunctive relief, orders in aid of arbitration or entry of an arbitral
award arising out of or relating to this Agreement or any of the other
agreements contemplated hereby brought in any state court located in
▇▇▇▇▇▇ County, Texas or any federal court sitting in the Southern
District of Texas or any other court in which a matter that may result
in a claim for indemnification hereunder by an EVI Indemnified Party
may be brought with respect to any claim for indemnification by an EVI
Indemnified Party, and further irrevocably waive any claim that any
such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum;
(c) each of the parties hereto irrevocably designates,
appoints and empowers CT Corporation System, Inc. and any successor
thereto as its designee, appointee and agent to receive, accept and
acknowledge for and on its behalf, and in respect of its property,
service of any and all legal process, summons, notices and documents
which may be served in any suit, action or proceeding arising out of or
relating to this Agreement or any of the other agreements contemplated
hereby for the purposes of injunctive relief, orders in aid of
arbitration and entry of an arbitral award..
7.10 SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provision, covenants and
restrictions of this Agreement shall continue in full force and effect and shall
in no way be affected, impaired or invalidated.
7.11 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be an original, but all of which together shall constitute
one and the same agreement.
7.12 HEADINGS. The Section headings herein are for convenience only
and shall not affect the construction hereof.
7.13 CONFIDENTIALITY AGREEMENT. The Confidentiality Agreement
entered into between EVI and GulfMark on October 21, 1996 (the
"Confidentiality Agreement") is hereby incorporated by reference herein and
made a part hereof.
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7.14 ENTIRE AGREEMENT: THIRD PARTY BENEFICIARIES. This Agreement,
the Other Agreements and the Confidentiality Agreements constitute the entire
agreement and supersede all other prior agreements and understandings, both
oral and written, among the parties or any of them, with respect to the
subject matter hereof and neither this nor any document delivered in
connection with this Agreement confers upon any Person not a party hereto any
rights or remedies hereunder except as provided in Sections 5.6 and 5.7.
7.15 DISCLOSURE LETTERS.
(a) The GulfMark Disclosure Letter, executed by GulfMark as of
the date hereof, and delivered to EVI on the date hereof, contains all
disclosure required to be made by GulfMark under the various terms and
provisions of this Agreement. Each item of disclosure set forth in the
GulfMark Disclosure Letter specifically refers to the Article and
Section of the Agreement to which such disclosure responds, and shall
not be deemed to be disclosed with respect to any other Article or
Section of the Agreement.
(b) The EVI Disclosure Letter, executed by EVI as of the date
hereof, and delivered to GulfMark on the date hereof, contains all
disclosure required to be made by EVI under the various terms and
provisions of this Agreement. Each item of disclosure set forth in the
EVI Disclosure Letter specifically refers to the Article and Section of
the Agreement to which such disclosure responds, and shall not be
deemed to be disclosed with respect to any other Article or Section of
the Agreement.
[signatures on the following page]
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IN WITNESS WHEREOF, each of the parties caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as of the
date first above written.
ENERGY VENTURES, INC.
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
GULFMARK ACQUISITION CO.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
GULFMARK INTERNATIONAL, INC.
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive Vice President
NEW GULFMARK INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive Vice President
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45
GLOSSARY OF DEFINED TERMS
Page No.
Adjustment Date.........................................................27
Agreement................................................................1
Assets...................................................................1
Benefit Program or Agreement............................................15
CERCLA..................................................................19
Certificates.............................................................4
Closing..................................................................2
Closing Date.............................................................2
Code.....................................................................1
Commission...............................................................8
Confidentiality Agreement...............................................38
Contribution.............................................................1
DGCL.....................................................................2
Demands.................................................................14
Disposal................................................................19
Distribution.............................................................1
Distribution Agreement...................................................1
Effective Time...........................................................2
Environmental Laws......................................................19
Ercon...................................................................10
ERISA...................................................................15
EVI......................................................................1
EVI Certificate..........................................................6
EVI Commission Filings...................................................8
EVI Common Stock.........................................................1
EVI Disclosure Letter....................................................8
EVI MAE..................................................................6
EVI Preferred Stock......................................................7
EVI Subsidiaries.........................................................6
Exchange Act.............................................................7
Exchange Agent...........................................................4
Exchange Ratio...........................................................3
Excluded Assets..........................................................1
Governmental Authority..................................................19
Governmental Entity.....................................................12
GulfMark.................................................................1
GulfMark Certificate....................................................10
GulfMark Commission Filings.............................................13
GulfMark Common Stock....................................................1
GulfMark Disclosure Letter..............................................10
GulfMark ERISA Affiliate................................................15
GulfMark MAE............................................................10
GulfMark Options........................................................11
GulfMark Plans..........................................................11
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46
GulfMark Permits........................................................21
GulfMark Subsidiaries...................................................12
Hazardous Substance.....................................................19
HSR Act..................................................................7
Lien.....................................................................8
Marine Subsidiaries......................................................1
Merger...................................................................1
NYSE.....................................................................4
Net Working Capital.....................................................20
OPA.....................................................................19
Other Agreements........................................................12
Permitted Liens.........................................................14
Person...................................................................5
Plan....................................................................15
Proxy Statement.........................................................13
RCRA....................................................................19
Registration Statement..................................................28
Release.................................................................19
Securities Act...........................................................8
Shares...................................................................3
Solid Waste.............................................................19
Spinco...................................................................1
Sub......................................................................1
Surviving Corporation....................................................2
Tax......................................................................8
Taxes....................................................................8
Tax Returns..............................................................8
Uncollected Receivables.................................................27
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EXHIBIT A
Agreement and Plan of Distribution
48
EXHIBIT B
GulfMark Amended and Restated Certificate of Incorporation