EXHIBIT 99.1
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AMENDED AND RESTATED
STOCK PURCHASE AGREEMENT
AND CONVERSION TO
ASSET PURCHASE AGREEMENT
BY AND AMONG
▇▇▇▇▇▇▇▇ TANKS ALLIANCE, LLC,
▇▇▇▇▇▇▇▇ TANKS, INC.,
▇▇▇▇▇ STEEL CONTRACTORS, INC.,
GEORGIA STEEL ACQUISITION CORP.
AND
MATRIX SERVICE COMPANY
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August 31, 1999
TABLE OF CONTENTS
Section Page
1. Purchase and Sale of Assets; Excluded Assets............................................................... 2
1.1 Purchased Assets..................................................................................... 2
1.2 Excluded Assets...................................................................................... 4
1.3 Documents of Assignment.............................................................................. 4
2. Purchase Price; Assumed Obligations; Retained Obligations.................................................. 5
2.1 Purchase Price....................................................................................... 5
2.2 Adjustments to Purchase Price........................................................................ 5
2.3 Payment of Fees and Expenses of Arbitration and Audit Firm........................................... 11
2.4 Effect of Adjustments; Interest...................................................................... 12
2.5 Assumption of Certain Obligations; No Assumption of Other Obligations................................ 12
2.6 Allocation of Purchase Price......................................................................... 16
3. Closing.................................................................................................... 16
3.1 Closing.............................................................................................. 16
3.2 Closing Date......................................................................................... 16
4. Representations and Warranties of ▇▇▇▇▇, GSAC and Matrix................................................... 17
4.1 Authority; Consents; Enforcement; Noncontravention................................................... 17
4.2 Qualification of ▇▇▇▇▇ Parties in Other States....................................................... 19
4.3 Ownership of ▇▇▇▇▇ and GSAC.......................................................................... 19
4.4 [Intentionally Omitted].............................................................................. 19
4.5 Financial Statements................................................................................. 19
4.6 Absence of Undisclosed Liabilities................................................................... 20
4.7 Absence of Certain Events............................................................................ 20
4.8 Books of Account, Records and Minute Books........................................................... 24
4.9 Certain Payments..................................................................................... 25
4.10 Compliance With Legal Requirements; Governmental Authorizations..................................... 25
4.11 Computer Systems; Software.......................................................................... 28
4.12 Condition and Sufficiency of Assets................................................................. 30
4.13 Contracts........................................................................................... 30
4.14 Employee Benefits................................................................................... 33
4.15 Employees and Independent Contractors............................................................... 39
4.16 Environmental Matters............................................................................... 40
4.17 Insurance........................................................................................... 43
4.18 Intellectual Property............................................................................... 44
4.19 Inventory........................................................................................... 47
4.20 Labor Relations; Compliance......................................................................... 48
4.21 Litigation; Compliance With Legal Requirements, Etc................................................. 48
4.22 No Agent, Finder or Broker.......................................................................... 50
4.23 Products............................................................................................ 50
4.24 Real Property....................................................................................... 51
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TABLE OF CONTENTS
Section Page
4.25 Similar Business Ownership.......................................................................... 53
4.26 Status of Contracts and Leases...................................................................... 54
4.27 Studies............................................................................................. 54
4.28 Taxes; Tax Returns; Tax Elections................................................................... 55
4.29 Title to Properties................................................................................. 57
4.30 Contract Price; ▇▇▇▇▇▇▇▇; Customer Offsets.......................................................... 57
4.31 Bank Accounts....................................................................................... 57
4.32 ▇▇▇▇▇ Family Claims; Dissolution of Georgia Steel Fabricators....................................... 58
4.33 Completeness of Statement; Effect of Representations and Warranties................................. 58
5. Representations and Warranties of ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks.............................................. 59
5.1 Corporate Status.................................................................................... 59
5.2 Authority; Consents; Enforcement; Noncontravention.................................................. 60
5.3 No Agent, Finder or Broker.......................................................................... 61
5.4 .................................................................................................... 61
5.5 Completeness of Statement; Effect of Representations and Warranties................................. 61
5.6 Litigation.......................................................................................... 61
6. Covenants of the Parties................................................................................... 62
6.1 No Negotiation...................................................................................... 62
6.2 Operations of ▇▇▇▇▇ Parties Pending Closing......................................................... 62
6.3 Investigation of ▇▇▇▇▇ by ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks............................................... 65
6.4 Title Insurance; Surveys............................................................................ 65
6.5 Lien and Litigation Searches........................................................................ 67
6.6 Transition of ▇▇▇▇▇................................................................................. 67
6.7 Further Assurances.................................................................................. 67
6.8 Actions of the Parties.............................................................................. 68
6.9 Compliance With Conditions.......................................................................... 69
6.10 Consents; Actions................................................................................... 69
6.11 Accounts Receivable................................................................................. 69
6.12 Matrix's Guaranty................................................................................... 70
6.13 Certain Employee Matters............................................................................ 71
6.14 Books and Records................................................................................... 75
6.15 Orion Contract...................................................................................... 76
6.16 Permits............................................................................................. 77
6.17 Real Property Commitments........................................................................... 77
6.18 ▇▇▇▇▇▇▇▇ Tanks' Guaranty............................................................................ 82
6.19 Contract Consent Matters............................................................................ 83
6.20 Letter of Credit and Insurance Requirements......................................................... 85
7. Conditions To Closing...................................................................................... 88
7.1 Conditions to Obligations of ▇▇▇▇▇▇▇▇............................................................... 88
7.2 Conditions to Obligations of ▇▇▇▇▇, GSAC and Matrix................................................. 93
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TABLE OF CONTENTS
Section Page
8. Termination............................................................................................... 95
8.1 Termination of Agreement........................................................................... 95
8.2 Effect of Termination.............................................................................. 96
9. Deliveries and Actions To Be Taken At The Closing......................................................... 96
9.1 Deliveries by ▇▇▇▇▇, GSAC and Matrix............................................................... 96
9.2 Deliveries by ▇▇▇▇▇▇▇▇............................................................................. 98
9.3 Actions and Deliveries Simultaneous................................................................ 99
10. Indemnification; Remedies................................................................................. 99
10.1 Survival; Right to Indemnification Not Affected by Knowledge....................................... 99
10.2 Indemnification and Payment of Damages By Matrix, GSAC and ▇▇▇▇▇................................... 100
10.3 Limitation on Matrix's Indemnification............................................................. 101
10.4 Indemnification By ▇▇▇▇▇▇▇▇........................................................................ 101
10.5 Procedure for Indemnification...................................................................... 102
11. Arbitration............................................................................................... 104
11.1 Referral........................................................................................... 104
11.2 Demand............................................................................................. 105
11.3 Discovery.......................................................................................... 105
11.4 Binding Decision................................................................................... 105
12. Miscellaneous Provisions.................................................................................. 106
12.1 Confidentiality of Agreement....................................................................... 106
12.2 Consent to Jurisdiction............................................................................ 106
12.3 Construction....................................................................................... 107
12.4 Entire Agreement................................................................................... 108
12.5 Exhibits and Schedules............................................................................. 108
12.6 Expenses........................................................................................... 108
12.7 Governing Law...................................................................................... 108
12.8 Headings........................................................................................... 109
12.9 Invalidity of Provisions; Severability............................................................. 109
12.10 No Public Announcement............................................................................. 109
12.11 No Third Party Beneficiaries....................................................................... 110
12.12 Notices............................................................................................ 110
12.13 Specific Performance............................................................................... 112
12.14 Successors and Assigns............................................................................. 112
12.15 Time of Essence.................................................................................... 113
12.16 Waiver............................................................................................. 113
12.17 Preservation of Claims............................................................................. 114
12.18 Bulk Sales Compliance.............................................................................. 115
12.19 Transfer Taxes..................................................................................... 115
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TABLE OF CONTENTS
Section Page
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EXHIBITS
Exhibit Description Section
A Certain Definitions..................................................................... Recital C
A-1 Real Property Interests.................................................................
A-2 Certain Excluded Assets.................................................................
B WIP Contracts........................................................................... 2.2(a)(3)(B)
B-1 Other Work-in-Process Contracts......................................................... 2.2(a)(3)(B)
C [Reserved]
D Allocation of Purchase Price............................................................ 2.5
E Other Agreements........................................................................ 4.26
F Orion Contract & June 2, 1999 Memorandum................................................ 6.15
G Environmental Insurance Quotation....................................................... 6.17
SCHEDULES
Description Schedule
Articles of Incorporation and Bylaws of the Company................................................... 4.1(a)
Qualification as Foreign Corporation.................................................................. 4.2
Subsidiaries and Investments.......................................................................... 4.4
Financial Statements.................................................................................. 4.5
Absence of Undisclosed Liabilities.................................................................... 4.6
Absence of Certain Events............................................................................. 4.7
Governmental Authorizations........................................................................... 4.10(b)
Contracts............................................................................................. 4.13
Employee Benefit Plans................................................................................ 4.14(a)
Multi-Employer Plans.................................................................................. 4.14(d)
Post-Retirement Benefits.............................................................................. 4.14(e)
Officers and Employees of the Company................................................................. 4.15(a)
Agreements With Employees and Independent Contractors................................................. 4.15
Environmental Laws.................................................................................... 4.16(a)
Insurance............................................................................................. 4.17
Patents............................................................................................... 4.18(c)
Marks................................................................................................. 4.18(d)
Copyrights............................................................................................ 4.18(e)
Royalties............................................................................................. 4.18(g)
Employee Agreements................................................................................... 4.18(h)
Proceedings........................................................................................... 4.21(a)
Orders................................................................................................ 4.21(b)
Product Terms and Conditions.......................................................................... 4.23(a)
Real Property - Owned................................................................................. 4.24(a)
Real Property - Encumbrances.......................................................................... 4.24(a)(1)
Real Property - Leased................................................................................ 4.24(b)
Similar Business Ownership............................................................................ 4.25
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Taxes...................................................................................................... 4.28
Audited Returns............................................................................................ 4.28(b)
Tax Basis, Etc............................................................................................. 4.28(c)
Waivers.................................................................................................... 4.28(f)
Tax Agreements............................................................................................. 4.28(g)
Title to Properties........................................................................................ 4.29
Bank Accounts.............................................................................................. 4.31
▇▇▇▇▇ Family Claims........................................................................................ 4.32
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AMENDED AND RESTATED
STOCK PURCHASE AGREEMENT AND
CONVERSION TO ASSET PURCHASE AGREEMENT
This Amended and Restated Stock Purchase Agreement and Conversion to Asset
Purchase Agreement is made and entered into as of this 31st day of August, 1999
(but with retroactive effectiveness to June 9, 1999), by and among ▇▇▇▇▇▇▇▇
Tanks Alliance, LLC, a Georgia limited liability company ("▇▇▇▇▇▇▇▇"), ▇▇▇▇▇▇▇▇
Tanks, Inc., a Kentucky corporation ("▇▇▇▇▇▇▇▇ Tanks"), ▇▇▇▇▇ Steel Contractors,
Inc., a Georgia corporation ("▇▇▇▇▇"), Georgia Steel Acquisition Corp., an
Oklahoma corporation ("GSAC"), and Matrix Service Company, a Delaware
corporation ("Matrix") (collectively, the "Parties").
Recitals:
A. The Parties are parties to that certain Stock Purchase Agreement dated as
of June 9, 1999 (the "Original Agreement"), pursuant to which, among other
transactions, GSAC agreed to sell and convey to ▇▇▇▇▇▇▇▇ at the "Closing" (as
defined in the Original Agreement) all of the issued and outstanding capital
stock of ▇▇▇▇▇, upon and subject to the terms and conditions set forth therein.
B. For various business reasons satisfactory to them, the Parties now desire
to amend and restate the Original Agreement in its entirety to, among other
things, convert the transactions contemplated therein from a purchase by
▇▇▇▇▇▇▇▇ from GSAC of the capital stock of ▇▇▇▇▇, to a purchase by ▇▇▇▇▇▇▇▇ of
certain assets and properties, tangible and intangible, of ▇▇▇▇▇, upon and
subject to the terms and conditions set forth in this Agreement.
C. Matrix owns all of the issued and outstanding capital stock of GSAC, and
GSAC owns all of the issued and outstanding capital stock of ▇▇▇▇▇.
D. Matrix and GSAC have agreed to become parties to this Agreement, and to
make their representations, warranties, covenants and agreements set forth
herein, as an inducement for and condition to the execution and delivery of this
Agreement by ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks.
▇. ▇▇▇▇▇▇▇▇ Tanks, the sole member of ▇▇▇▇▇▇▇▇, has agreed to become a party
to this Agreement, and to make its representations, warranties, covenants and
agreements set forth herein, as an inducement for and condition to the execution
and delivery of this Agreement by Matrix, GSAC and ▇▇▇▇▇.
F. Capitalized terms used in this Agreement shall have the respective
meanings set forth in Exhibit A attached hereto.
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Agreement:
Now, Therefore, in consideration of the premises and for other valuable
consideration, the receipt of which is hereby acknowledged, the Parties agree
that the Original Agreement is hereby amended and restated to be and read in its
entirety as follows, with retroactive effect to June 9, 1999 (the "Effective
Date"):
1. Purchase and Sale of Assets; Excluded Assets.
1.1 Purchased Assets. Upon the terms and subject to the conditions
set forth herein, ▇▇▇▇▇ agrees to sell, transfer, convey, assign and deliver to
▇▇▇▇▇▇▇▇ at the Closing, and ▇▇▇▇▇▇▇▇ agrees to purchase and accept from ▇▇▇▇▇
at the Closing, all of ▇▇▇▇▇'▇ rights, title and interests under, in and to all
businesses, assets and properties of ▇▇▇▇▇, tangible and intangible, personal
and mixed, wherever situated (collectively, the "Assets"), free and clear of all
Encumbrances other than Permitted Encumbrances, including without limitation,
any of the following kinds or types of assets and properties of ▇▇▇▇▇ (but
specifically excluding from the Assets all "Excluded Assets" (as defined in
Section 12)):
(a) all assets and properties set forth or reflected on the
Acquisition Balance Sheet described in Section 45, and all other assets and
properties acquired since the date of the Acquisition Balance Sheet, except such
as shall have been disposed of in the Ordinary Course of Business of ▇▇▇▇▇ since
that date;
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(b) all machinery, equipment, vehicles, computer software,
furnishings and fixtures;
(c) all supplies, spare parts, tools, accessories and maintenance
equipment;
(d) all work-in-process and inventories (including raw materials);
(e) subject to the provisions of Section 6.19, all rights, title
and interest of ▇▇▇▇▇ under, in and to all WIP Contracts, Other Work-in-Process
Contracts, Other Agreements, Governmental Authorizations, easements, rights of
way and concessions by which ▇▇▇▇▇ or any of its assets or properties benefit;
(f) all trade names, trademarks, service marks, patents, letters
patent, inventions, trade secrets, copyrights, all registrations or applications
for registration thereof, and all other Intellectual Property and proprietary
and intangible assets and properties;
(g) all books and records of account, financial records, employee
records, and other books and records of any kind and type;
(h) the name "▇▇▇▇▇ Steel Contractors, Inc.";
(i) all goodwill;
(j) the Purchase Order, dated as of March 10, 1999, between ▇▇▇▇▇
(as successor in interest of Matrix) and LVD Corporation, for the purchase by
▇▇▇▇▇ of a ▇▇▇▇ Roll System MCB 3045 (Matrix Purchase Order No. 23407-99) (the
"Plate Roll Contract"), and the Invoice, dated as of August 3, 1999, between
▇▇▇▇▇ and Corrosion Specialities, Inc., for the purchase by ▇▇▇▇▇ of certain
paint distillation equipment (▇▇▇▇▇ Purchase Order No. 24309-99) (the "Corrosion
Specialties Contract");
(k) all assets and properties assigned and transferred by the
Subsidiaries to ▇▇▇▇▇ prior to the Closing as contemplated in Section 2.5(d);
and
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(l) all other assets and properties of any nature whatsoever held
by ▇▇▇▇▇ other than the Excluded Assets.
1.2 Excluded Assets. Notwithstanding anything contained in
Section 1.1 to the contrary, the Assets to be purchased by ▇▇▇▇▇▇▇▇ from ▇▇▇▇▇
at the Closing shall not include: (a) any of the Accounts Receivable, prepaid
assets, tax related assets and other assets of the ▇▇▇▇▇ Parties (as defined
below) set forth or identified on Exhibit A-2 attached hereto, or generated in
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the Ordinary Course of Business of the ▇▇▇▇▇ Parties from the Effective Date
through the Closing, or any cash on hand or in bank accounts of the ▇▇▇▇▇
Parties as of the Closing; or (b) any rights, title or interests of ▇▇▇▇▇ under,
in or to the real property of ▇▇▇▇▇ located at ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, and described on Exhibit A-1 attached hereto, any buildings,
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structures, facilities, fixtures or improvements thereon, any mineral rights in
respect thereof, or any water rights or other rights appurtenant to that real
property (collectively, the "Broad Street Property"); or (c) any rights, title
or interests of ▇▇▇▇▇ under, in and to the real property of ▇▇▇▇▇ located at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, and described on Exhibit A-1 attached
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hereto, any buildings, structures, facilities, fixtures or improvements thereon,
any mineral rights in respect thereof, or any water rights appurtenant to that
real property (collectively, the "Fayetteville Road Property"); or (d) any
issued and outstanding capital stock of any of the Subsidiaries (such Accounts
Receivable, prepaid assets, tax related assets, cash, the Broad Street Property,
the Fayetteville Road Property and the capital stock of the Subsidiaries being
hereinafter collectively referred to as the "Excluded Assets").
1.3 Documents of Assignment. At the Closing, ▇▇▇▇▇ shall execute
and deliver to ▇▇▇▇▇▇▇▇ such bills of sale, assignments and other instruments,
all in recordable form and otherwise in a form reasonably satisfactory to the
Parties, as shall be required or requested by ▇▇▇▇▇▇▇▇ in order to evidence and
effect the sale, conveyance, assignment and transfer of the Assets to ▇▇▇▇▇▇▇▇.
2. Purchase Price; Assumed Obligations; Retained Obligations.
2.1 Purchase Price. ▇▇▇▇▇▇▇▇ shall pay to ▇▇▇▇▇ at the Closing,
for and in consideration of the sale by ▇▇▇▇▇ to ▇▇▇▇▇▇▇▇ of the Assets, a
purchase price equal to: (a) $3,421,400, subject to adjustment as expressly
contemplated in Section 2.2(a) or elsewhere in this Agreement or the Ancillary
Documents (the "Base Price"); plus (b) an amount equal to the lesser of (i) the
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sum
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of the costs (as reflected in ▇▇▇▇▇'▇ and the Subsidiaries financial books and
records) incurred by ▇▇▇▇▇ and the Subsidiaries (collectively, the "▇▇▇▇▇
Parties") to purchase all items of steel plate, pipe, channel and angle
inventory of the ▇▇▇▇▇ Parties on hand as of the Closing at the ▇▇▇▇▇ Parties'
facilities in Newnan, Georgia, and which are unused and not allocated to a
particular WIP Contract (collectively, the "Inventory"), or (ii) the fair market
value of all such Inventory as of the Closing, but in either case exclusive of
obsolete Inventory (the "Inventory Price") (the Base Price and the Inventory
Price are hereinafter collectively referred to as the "Purchase Price"). The
Inventory and Inventory Price shall be determined pursuant to the procedures set
forth in Section 2.2(b). The Purchase Price shall be paid in immediately
available funds at the Closing, subject to any adjustment in the Base Price
and/or the Inventory Price following the Closing as contemplated in Section 2.2.
2.2 Adjustments to Purchase Price.
(a) Adjustments to Base Price. The Base Price shall be subject to
adjustment following the Closing as follows:
(1) The Base Price shall be increased by an amount equal to the
amount (if any) by which (A) the aggregate of all Net ▇▇▇▇▇▇▇▇ pursuant to the
WIP Contracts exceeds (B) the sum of (y) the amount determined by dividing (i)
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the aggregate of all Completion Costs (exclusive of liquidated damages,
penalties or other similar payments) to be incurred by ▇▇▇▇▇▇▇▇ (as the
assignee of ▇▇▇▇▇) and the Subsidiaries in connection with the WIP Contracts
following the Closing by (ii) ninety-five percent (95%), plus (z) the
--
aggregate of all liquidated damages, penalties or other similar payments
included within the definition of Completion Costs to be incurred by ▇▇▇▇▇▇▇▇
(as the assignee of ▇▇▇▇▇) and the Subsidiaries in connection with the WIP
Contracts following the Closing.
(2) The Base Price shall be decreased by an amount equal to the
amount (if any) by which (A) the aggregate of all Net ▇▇▇▇▇▇▇▇ pursuant to the
WIP Contracts is less than (B) the sum of (y) the amount determined by
dividing (i) the aggregate of all Completion Costs (exclusive of liquidated
--------
damages, penalties or other similar payments) to be incurred by ▇▇▇▇▇▇▇▇
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(as the assignee of ▇▇▇▇▇) and the Subsidiaries in connection with the WIP
Contracts following the Closing by (ii) ninety-five percent (95%), plus (z)
--
the aggregate of all liquidated damages, penalties or other similar payments
included within the definition of Completion Costs to be incurred by ▇▇▇▇▇▇▇▇
(as the assignee of ▇▇▇▇▇) and the Subsidiaries in connection with the WIP
Contracts following the Closing.
(3) As used in this Agreement, the following terms shall have
the meanings set forth below:
(A) "Net ▇▇▇▇▇▇▇▇" shall mean the amount by which: (i) the
aggregate consideration payable by the relevant customer(s) to the ▇▇▇▇▇
Parties (or any of them) and, following the Closing, to ▇▇▇▇▇▇▇▇ in accordance
with a particular WIP Contract (whether paid before the Closing or payable
thereafter, and whether payable in cash or in any other form of consideration
(which other form of consideration shall be valued at its fair market value on
the date paid)), assuming performance owing by the relevant ▇▇▇▇▇ Party(s)
and/or ▇▇▇▇▇▇▇▇ (as applicable) under that WIP Contract prior to and following
the Closing has been and will be completed in accordance with its terms (the
"Contract Price"); exceeds (ii) the aggregate sum of all amounts that have
actually been billed for collection by the ▇▇▇▇▇ Parties (or any of them) to
the relevant customer(s) as of and prior to the Closing under that WIP
Contract, whether or not collected prior to the Closing, including without
limitation, all retainage that has been included in any invoice delivered by
the ▇▇▇▇▇ Parties to any customer that remains unpaid as of the Closing Date
(collectively, the "▇▇▇▇▇▇▇▇"). The Parties' agreement as to the Contract
Price for each WIP Contract shall be reflected on the "Revised Exhibit B"
contemplated in Subpart (C) below, and shall not be subject to adjustment or
challenge by any Party following the Closing.
(B) "WIP Contracts" shall mean the contracts, agreements
and work orders entered into by the ▇▇▇▇▇ Parties (or any of them) and
identified on Exhibit B attached hereto (but only to the extent such contract
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is identified under the "Percentage Completed" (Pct. Cmpt.) column on Exhibit
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B as not being 100% completed as of April 30 1999, and then only to the extent
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performance by the relevant ▇▇▇▇▇ Party(s) under the same (exclusive of
warranty or other similar undertakings) shall not have been fully completed by
such ▇▇▇▇▇ Party(s) prior to
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the Closing), together with such other customer contracts, agreements and work
orders as shall be added to Exhibit B by mutual written agreement of the
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Parties prior to the Closing. "Other Work-in-Process Contracts" shall mean the
contracts and agreements entered into by the ▇▇▇▇▇ Parties (or any of them)
and identified on Exhibit B-1 attached hereto, and any bids identified on
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Exhibit B-1 where any of the ▇▇▇▇▇ Parties have been notified they are the low
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bidder.
(C) "Completion Costs" shall mean the amounts determined by
the mutual agreement of the Parties (as contemplated below) for each WIP
Contract, as being the sum of all direct and indirect costs and expenses that
will be incurred by ▇▇▇▇▇▇▇▇ (as the assignee of ▇▇▇▇▇) following the Closing
in connection with its performance and completion of all remaining obligations
under that WIP Contract in accordance with its terms (but exclusive of all
Retained Obligations in respect of that WIP Contract that are retained and
discharged by ▇▇▇▇▇ as contemplated in Section 25), including without
limitation, all costs and expenses for (1) labor (whether employee or
contractor) and related benefits, (2) inventories, materials, supplies, tools
and spare parts, (3) site procurement and site preparation, (4) permitting,
(5) performance and surety bonds (and replacements therefor), (6)
subcontractor compensation and expenses which are properly chargeable to
▇▇▇▇▇▇▇▇ (as the assignee of ▇▇▇▇▇) or any Subsidiary in accordance with the
relevant subcontracts, and (7) any liquidated damages, penalties or other
similar payments that may become due and owing by ▇▇▇▇▇▇▇▇ or any Subsidiary
following the Closing, but excluding all engineering, marketing,
administrative and interest costs and expenses. The Parties' determination as
to the Completion Costs shall be set forth under the heading "Estimated Cost
to be Incurred" on a revised version of Exhibit B prior to the Closing, which
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shall be separately dated and executed by the Parties to signify their
agreement to the same ("Revised Exhibit B"). The amounts set forth under that
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heading on Exhibit B attached hereto as of April 30, 1999 shall have no
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relevance for purposes of this Agreement. The Parties acknowledge that the
Completion Costs and ▇▇▇▇▇▇▇▇ for each WIP Contract set forth on Revised
Exhibit B as of the Closing will reflect their agreement as to those costs and
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▇▇▇▇▇▇▇▇ as of a date prior to the Closing Date, which shall be specified on
the face of Revised Exhibit B (the "Preliminary Determination Date"), and
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shall not be subject to adjustment or challenge by any Party following the
Closing (other than for the adjustment for ▇▇▇▇▇▇▇▇ and Completion Costs from
the Preliminary Determination Date through the Closing Date as hereinafter
contemplated in this
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Subpart (C)). No adjustment to the Base Price shall be made at the Closing
based upon Revised Exhibit B. Rather, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ agree to meet with
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each other promptly following the Closing to (x) determine the percentage of
additional work completed by the relevant ▇▇▇▇▇ Party(s), and the actual costs
incurred by that ▇▇▇▇▇ Party, during the period between the Preliminary
Determination Date and the Closing, and to correspondingly adjust the
Completion Costs for the relevant WIP Contracts as of the Closing based upon
those determinations, and (y) determine the actual ▇▇▇▇▇▇▇▇ for each WIP
Contract made from the Preliminary Determination Date through the Closing, and
to correspondingly adjust the ▇▇▇▇▇▇▇▇ for the relevant WIP Contracts as of
the Closing based upon that determination. In the event ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇
agree in writing on those ▇▇▇▇▇▇▇▇, or an appropriate adjustment to the
Completion Costs based upon the determination contemplated above, the ▇▇▇▇▇▇▇▇
and Completion Costs as so determined or adjusted shall be deemed to be final
and binding on the Parties. In the event ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ are not able to
agree in writing on the ▇▇▇▇▇▇▇▇, and on adjustment to the Completion Costs on
or before the 21st day following the Closing, either of those Parties shall be
entitled to refer the matter for resolution pursuant to the arbitration
procedures set forth in Section 11 of this Agreement; provided that the sole
determination made in any such proceeding shall be the amount of the ▇▇▇▇▇▇▇▇
actually made from the Preliminary Determination Date through the Closing, or
the amount of the adjustment in the Parties' estimate of the Completion Costs
as of the Closing that is required based upon the actual work performed and
costs incurred by the relevant ▇▇▇▇▇ Party(s) in respect of the WIP Contracts
from the Preliminary Determination Date through the Closing (as applicable).
Within five (5) days after the Parties have agreed upon the ▇▇▇▇▇▇▇▇ and the
appropriate adjustment to the Completion Costs as contemplated above (or
within five (5) days after such later date on which the ▇▇▇▇▇▇▇▇ or Completion
Costs adjustment determination has been made pursuant to the dispute
resolution procedures set forth in Section 11), the Parties shall meet to
determine the appropriate adjustment to the Base Price paid by ▇▇▇▇▇▇▇▇ at the
Closing, based on the relevant formula set forth in Section 2.2(a)(1) or
2.2(a)(2). Thereafter, ▇▇▇▇▇▇▇▇ agrees to pay to ▇▇▇▇▇ (in the case of an
increase in the Base Price), or ▇▇▇▇▇ agrees to reimburse ▇▇▇▇▇▇▇▇ (in the
case of a decrease in the Base Price), an amount equal to the amount of that
increase or decrease (as applicable) within ten (10) days after the date on
which ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ agree in writing on the adjustment or, to the extent
a dispute over the appropriate determination persists, after the date on which
that adjustment is
-8-
finally determined pursuant to Section 11. Any such payment by ▇▇▇▇▇▇▇▇ or
▇▇▇▇▇ shall be deemed to be an adjustment in the Base Price. Following any
adjustment as contemplated above, the ▇▇▇▇▇▇▇▇ and the Completion Costs shall
not be subject to further determination or adjustment following the Closing,
whether based upon the actual completion costs incurred by ▇▇▇▇▇▇▇▇ in
connection with the WIP Contracts or otherwise.
(b) Determination of Inventory Price; Adjustment. A physical
inventory of all Inventory of the ▇▇▇▇▇ Parties as of a mutually agreeable date
prior to the Closing Date shall be jointly conducted and completed by the
Parties prior to the Closing, at the joint expense of ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇. Based
on that physical inventory, an estimate of the Inventory Price shall be assigned
by mutual agreement of ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ prior to the Closing, which assigned
price (the "Assigned Inventory Price") shall be used for purposes of the
Purchase Price to be paid at the Closing. Notwithstanding the foregoing, in the
event, following the Closing, either ▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ shall believe that the
quantity of any one or more items of Inventory on hand as of the Closing
differed in any material respect from the quantity that was on hand as of the
date of their physical inventory prior to the Closing (and that formed the basis
for the Inventory Price paid at the Closing), or shall believe that the Assigned
Inventory Price was otherwise inaccurate in any material respect, and in the
event ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ are not thereafter able to agree in writing on an
appropriate adjustment to the Inventory Price, then either of those Parties may,
by written notice delivered to the other of those Parties not later than forty-
five (45) days after the Closing, elect to cause an independent, nationally
recognized, certified public accounting firm reasonably satisfactory to the
other of those Parties (an "Audit Firm") to conduct an audit of the quantity of
Inventory of the ▇▇▇▇▇ Parties as of the Closing and/or of the costs incurred by
the ▇▇▇▇▇ Parties (as reflected in their financial books and records) to
purchase all items of Inventory (exclusive of obsolete items) on hand as of the
Closing, and to conduct an appraisal of the fair market value of that Inventory
as of the Closing (as applicable). The Audit Firm shall be free to retain such
appraisers and other consultants as it shall deem appropriate for that audit
and/or appraisal. Upon any such election, each Party shall reasonably cooperate
with the others and the Audit Firm (and its consultants) to facilitate that
audit and appraisal at the earliest practicable time, including without
limitation, by providing the Audit Firm (and its consultants) with reasonable
access to all books and records of the ▇▇▇▇▇ Parties as shall be necessary for
the audit and appraisal. In the event the audit and appraisal shall
-9-
determine that the Assigned Inventory Price did not accurately reflect the
actual Inventory Price that should have been assigned (whether due to a
discrepancy in the quantity of Inventory assumed to exist as of the Closing or
in the cost or fair market value thereof), the Audit Firm shall notify ▇▇▇▇▇ and
▇▇▇▇▇▇▇▇ of that conclusion and of the amount by which it believes the Assigned
Inventory Price differed from the actual Inventory Price that should have been
paid. In the event the audit and appraisal shall determine that the Assigned
Inventory Price was correct, the Audit Firm shall likewise notify ▇▇▇▇▇ and
▇▇▇▇▇▇▇▇ of that conclusion. The determination of the Audit Firm shall be final
and binding on the Parties. In the event such a conclusion of inaccuracy is
reached by the Audit Firm, then ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇ (as the case may be) agrees to
pay the other Party, within 30 days after the Audit Firm's final determination,
an amount equal to the amount by which the Assigned Inventory Price was less
than (in the case of a payment by ▇▇▇▇▇▇▇▇) or was greater than (in the case of
a payment by ▇▇▇▇▇) the actual Inventory Price that should have been paid. Any
such payment shall be deemed to be an increase or decrease (as the case may be)
in the Inventory Price.
(c) Other Work-in-Process Contracts. Notwithstanding that the Other
Work-in-Process Contracts shall not constitute WIP Contracts and shall not be
the basis for an adjustment to the Base Price pursuant to Section 2.2(a), the
Parties agree that the Other Work-in-Process Contracts may be the basis for an
adjustment to the Base Price following the Closing under the following circum
stances: In the event any of the ▇▇▇▇▇ Parties have actually incurred, prior to
the Closing, costs or expenses in connection with their performance of any
obligations under a particular Other Work-in-Process Contract and in accordance
with the provisions thereof (exclusive of allocations of general, administrative
and other overhead expenses), and in the event the amount of such costs and
expenses exceeds the aggregate sum of all amounts that have actually been
collected by that ▇▇▇▇▇ Party as of and prior to the Closing under that
contract, then ▇▇▇▇▇▇▇▇ shall pay to ▇▇▇▇▇, within thirty (30) days after the
Closing Date and as an adjustment to the Base Price, an amount in immediately
available funds equal to the actual costs and expenses so incurred but not
collected by that ▇▇▇▇▇ Party. To the extent the relevant ▇▇▇▇▇ Party has
actually billed for collection to the relevant customer(s) such costs and
expenses prior to or as of the Closing, the account receivable represented by
that billing shall not constitute an Excluded Asset, but shall be an Asset
conveyed to ▇▇▇▇▇▇▇▇ at the Closing. In the event ▇▇▇▇▇, GSAC or Matrix shall,
at any time following the
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Closing, receive from the relevant customer(s) any amounts on account of the
account receivable described above, ▇▇▇▇▇, GSAC or Matrix (as applicable) shall
promptly notify ▇▇▇▇▇▇▇▇ of the same, and shall promptly remit and pay all such
amounts to ▇▇▇▇▇▇▇▇ for its account. Within fifteen (15) days after the Closing
Date, ▇▇▇▇▇ shall provide to ▇▇▇▇▇▇▇▇ a Certificate duly executed by an officer
of ▇▇▇▇▇ and certifying as to the costs and expenses actually incurred, and the
▇▇▇▇▇▇▇▇ actually made, by each ▇▇▇▇▇ Party through the Closing under each Other
Work-in-Process Contract (separated by contract). In the event ▇▇▇▇▇▇▇▇ shall
dispute any amount(s) set forth in that Certificate, the dispute may be referred
by either ▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ for resolution pursuant to Section 11, if it cannot
otherwise be resolved by the mutual agreement of those Parties. In the event of
such a dispute, the relevant Party shall pay to the other all amounts owing
under this Section 2.2(c) that are not in dispute as contemplated above.
2.3 Payment of Fees and Expenses of Arbitration and Audit Firm. In the
event either ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇ shall submit the Inventory Price to an Audit Firm
for determination as provided in Section 2.2(b), ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ shall each
be responsible for their own costs and expenses and for one-half of all fees and
expenses of the Audit Firm and its consultants. In the event either ▇▇▇▇▇▇▇▇ or
▇▇▇▇▇ shall submit the resolution of Completion Costs, ▇▇▇▇▇▇▇▇, or of the
matters referred to in Section 2.2(c), to arbitration as provided in Section
2.2(a)(3)(C) or 2.2(c), ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ shall each be responsible for their
own costs and expenses and for one-half of the expenses of the arbitrator(s).
2.4 Effect of Adjustments; Interest. Any adjustments to the Base Price
or the Inventory Price pursuant to Section 2.2(a), 2.2(b) or 2.2(c) above shall
be deemed to be an adjustment to the Purchase Price for all purposes. Any
amounts payable by ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇ to the other of those Parties as an
adjustment to the Purchase Price shall bear interest at a rate per annum of ten
percent (10%) from the Closing Date until paid to the relevant Party, all of
which interest amounts shall become immediately due and payable together with
the adjustment amount(s) on which they have accrued.
2.5 Assumption of Certain Obligations; No Assumption of Other
Obligations.
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(a) Assumed Obligations. At the Closing, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ shall
execute and deliver an Assignment & Assumption Agreement in form reasonably
satisfactory to the Parties (the "Assignment & Assumption Agreement"), pursuant
to which, among other transactions, ▇▇▇▇▇▇▇▇ shall agree, effective as of the
Closing, to assume and undertake to pay, perform and discharge the following
obligations of ▇▇▇▇▇ as of the Closing (collectively, the "Assumed
Obligations"), but no others:
(1) All executory payment and performance obligations of ▇▇▇▇▇
which first arise or accrue following the Closing (A) under the WIP Contracts
and the Other Work-in-Process Contracts, (B) under the agreements identified
on Exhibit E attached hereto, (C) under the bid proposals of ▇▇▇▇▇ identified
---------
on Exhibit E that have been accepted by customers but which are not yet the
---------
subject of definitive contracts, (D) under any contracts or agreements that
may be entered into prior to the Closing by ▇▇▇▇▇ arising out of the bid
proposals referred to in the immediately preceding clause, (E) under such
other agreements or bid proposals of ▇▇▇▇▇ as shall be added to Exhibit B or E
--------------
by mutual agreement of the Parties prior to the Closing (the contracts,
agreements and bid proposals referred to in clauses (B) through (E), above,
being herein collectively referred to as the "Other Agreements"), (F) the
Plate Roll Contract, and (G) the Corrosion Specialties Contract (but
excluding, in the case of the contracts, agreements and bid proposals referred
to in clauses (A) through (G), above, any warranty or other similar
obligations, or breach or default obligations, in either case arising out of
work performed or failed to be performed, or materials, goods or services
delivered or failed to be delivered, by ▇▇▇▇▇ or any Subsidiary prior to the
Closing, all of which shall be "Retained Obligations" (as defined below)); and
(2) any and all obligations that are expressly referred to in
Clauses (i) through (xi) of Subsection (b), below, as Assumed Obligations.
The Assignment & Assumption Agreement shall also serve to convey, assign and
transfer the intangible Assets to ▇▇▇▇▇▇▇▇ as contemplated in Section 1.3.
-12-
(b) Retained Obligations. Except for the Assumed Obligations,
▇▇▇▇▇▇▇▇ shall not assume or in any manner become responsible or liable for, and
▇▇▇▇▇ agrees to retain, pay, perform and discharge in full, at its expense, any
and all debts, obligations and liabilities of ▇▇▇▇▇, including without
limitation, all Retained Obligations (as defined below) of ▇▇▇▇▇. As used in
this Agreement, the "Retained Obligations" shall mean any and all debts,
obligations and liabilities of any nature of ▇▇▇▇▇ or any Subsidiary (or of any
predecessor in interest of them), or of or relating to any of the Assets, the
Broad Street Property or the Fayetteville Road Property, on and as of the
Closing on the Closing Date, and, in the case of the Broad Street Property and
the Fayetteville Road Property, arising at any time following the Closing
through the date of any purchase of that property by ▇▇▇▇▇▇▇▇ or its Affiliate
as contemplated in Section 6.17 (except to the extent caused by the action or
inaction (where it had a duty or obligation to act) of ▇▇▇▇▇▇▇▇ or its
Affiliate), in each case whether fixed, absolute, accrued, contingent or
otherwise, whether known or unknown, whether arising out of the business,
assets, properties, employees or operations of the ▇▇▇▇▇ Parties or otherwise,
whether or not the subject of a representation or warranty set forth in Section
4, and whether owing to GSAC, Matrix or any of its other Affiliates, to any
Governmental Body, to any employee of any ▇▇▇▇▇ Party, or to any other Person,
in each case other than the Assumed Obligations. The Retained Obligations being
retained by ▇▇▇▇▇ shall include, without limitation, any claims, demands,
actions, causes of action, Proceedings, liabilities, damages, fines, penalties,
costs and expenses previously incurred or accrued or now or hereafter incurred
or accrued by or against ▇▇▇▇▇, any Subsidiary, Matrix, GSAC, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
Tanks, any Governmental Body or any other Person, resulting from, arising out of
or relating to: (i) any contract, agreement, arrangement or commitment to which
any ▇▇▇▇▇ Party is a party or by which any of its assets or properties are bound
or subject to, in each case, as of the Closing, other than the Assumed
Obligations; (ii) any warranties (whether express or implied), guarantees or
other similar commitments made by any ▇▇▇▇▇ Party to any other Person prior to
the Closing (other than the warranties expressly made by ▇▇▇▇▇ in the WIP
Contracts or the Other Work-in-Process Contracts and relating to the services to
be performed and goods and materials to be delivered by ▇▇▇▇▇▇▇▇ thereunder
following the Closing, all of which shall constitute Assumed Obligations),
regardless of whether the relevant warranty or guaranty claims are asserted
following the Closing; (iii) any indebtedness of the ▇▇▇▇▇ Parties for borrowed
money to any Person as of the Closing; (iv) any Encumbrances on or affecting any
of the assets or properties of any ▇▇▇▇▇ Party prior to the Closing
-13-
(other than the Permitted Encumbrances referred to in clauses (i), (v), (vi) and
(vii) of the definition of Permitted Encumbrances in Exhibit A, which shall
constitute Assumed Obligations; provided, that such an inclusion of a Permitted
Encumbrance as an Assumed Obligation shall not relieve ▇▇▇▇▇ of its obligation
to pay, perform, satisfy and discharge in full all debts, obligations and
liabilities which are secured by such Permitted Encumbrances, to the extent that
such debts, obligations or liabilities themselves constitute Retained
Obligations), all of which ▇▇▇▇▇, GSAC and Matrix agree, shall be fully released
prior to the Closing at no cost or expense to ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks; (v)
except for the debts, obligations and liabilities specifically allocated to
▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks pursuant to Section 6.13 (all of which shall be
deemed to be Assumed Obligations), the employment of any of the ▇▇▇▇▇ Parties'
employees, officers or other agents at any time prior to the Closing, any
injuries to such employees, officers or other agents incurred at any time prior
to the Closing, any compensation or other benefits accruing to the account of
such employees, officers or other agents under any Benefit Plans prior to the
Closing (whether or not vested prior to the Closing), or accruing to their
account following the Closing but based on their service to any ▇▇▇▇▇ Party or
their Affiliate prior to the Closing, any other acts, omissions, state of facts
or circumstances occurring or existing prior to the Closing and relating to any
"Benefit Plans" (as defined in Section 4.14) of the ▇▇▇▇▇ Parties or in which
they are or were a participant, and any other obligations or liabilities to or
relating to such Benefit Plans as of the Closing or arising following the
Closing and relating to the period prior to the Closing; (vi) any of the matters
identified on any disclosure Schedules delivered by ▇▇▇▇▇, Matrix or GSAC to
▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks and attached to or made a part of this Agreement, or
on any supplemental or amended disclosure Schedules delivered by them to
▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks following the Effective Date and prior to the
Closing, in either case except to the extent such matters constitute Assumed
Obligations; (vii) any debts, obligations or liabilities of the ▇▇▇▇▇ Parties
set forth or reflected on the "Acquisition Balance Sheet" or the "Interim
Balance Sheet" (each as defined in Section 4.5) (except to the extent the same
are Assumed Obligations); (viii) any of the Excluded Assets; (ix) any failure by
any ▇▇▇▇▇ Party or any of its assets or properties to comply with any
Environmental Laws as of or at any time prior to the Closing (and, in the case
of the Broad Street Property and the Fayetteville Road Property, arising at any
time following the Closing and prior to the purchase by ▇▇▇▇▇▇▇▇ or its
Affiliate or designee of that property as contemplated in Section 6.17, but only
to the extent not caused or created by the action or inaction (where it had a
duty or obligation to act) of ▇▇▇▇▇▇▇▇ or any of its Affiliates
-14-
following the Closing), and any Environmental, Health and Safety Liabilities of
or relating to any ▇▇▇▇▇ Party or any of its assets or properties as of or at
any time prior to the Closing (and, in the case of the Broad Street Property and
the Fayetteville Road Property, arising at any time following the Closing and
prior to the purchase by ▇▇▇▇▇▇▇▇ or its Affiliate or designee of that property
as contemplated in Section 6.17, but only to the extent not caused or created by
the action or inaction (where it had a duty or obligation to act) of ▇▇▇▇▇▇▇▇ or
any of its Affiliates following the Closing); (x) any obligation or liability to
any surety, guarantor or other lender (including without limitation, any
reimbursement obligation) on account of or by reason of any payment or
distribution of funds to any customer of any ▇▇▇▇▇ Party or other Person under
any payment or performance bond or other similar surety commitment, resulting
from or arising out of any breach of performance or failure or delay in
performance by any ▇▇▇▇▇ Party occurring prior to the Closing under any
contract, agreement, arrangement or commitment to which such ▇▇▇▇▇ Party is or
was a Party, whether or not such payment or distribution of funds occurs prior
to the Closing; and (xi) the termination by any ▇▇▇▇▇ Party of any of their
employees that are identified by ▇▇▇▇▇▇▇▇ Tanks as employees to whom offers of
employment will not be made following the Closing, as contemplated in Section
6.13(e), or any failure or refusal by ▇▇▇▇▇▇▇▇ or any Subsidiary to hire, re-
hire or re-employ any of those terminated employees following the Closing.
Notwithstanding the foregoing, the Retained Obligations shall not include the
representations and warranties contained in Sections 4.11, 4.12, 4.18, 4.19,
4.24(a) and 429, and ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks shall look solely to the
provisions of Section 10.2(a) of this Agreement for indemnification by ▇▇▇▇▇,
GSAC and Matrix with respect thereto. Except as otherwise provided in Section
6.13, ▇▇▇▇▇ agrees to fully fund and contribute to each relevant Benefit Plan
all matching contributions and other funding requirements normally funded by
Matrix, GSAC, ▇▇▇▇▇ or any Subsidiary, and required to fund all benefits to
which the employees of the ▇▇▇▇▇ Parties have or shall become vested or
otherwise entitled by reason of their service for the relevant ▇▇▇▇▇ Party prior
to the Closing, or otherwise by reason of their own contributions to such
Benefit Plans prior to the Closing.
(c) [Intentionally Omitted]
(d) Assignment of Certain Subsidiary Assets. Prior to the Closing,
▇▇▇▇▇ shall cause each Subsidiary to execute and deliver to ▇▇▇▇▇ a ▇▇▇▇ of Sale
and Assignment in a form reasonably
-15-
satisfactory to the Parties (the "Subsidiary ▇▇▇▇ of Sale"), pursuant to which
the Subsidiaries will assign and transfer to ▇▇▇▇▇ as a dividend, for no
additional consideration, all of their respective assets and properties,
tangible and intangible, wherever situated, other than their Excluded Assets,
effective as of a time immediately prior to the Closing.
2.6 Allocation of Purchase Price. The Parties agree that the Purchase
Price shall be allocated among the Assets in the manner set forth on Exhibit D
---------
attached hereto.
3. Closing.
3.1 Closing. The closing of the transactions contemplated in this
Agreement ("Closing") shall take place at the offices of ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇ PLLC, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at 1:00
P.M., local time.
3.2 Closing Date. The Closing shall occur on August 31, 1999 if all of
the conditions set forth in Section 7 have been fulfilled by such date. If all
of such conditions have not been fulfilled by such date, and subject to the
termination rights provided for in Section 8.1, then the Closing shall take
place (a) on such other date which is two business days after the Party
obligated to fulfill such conditions shall have notified the other Parties that
the last of such conditions has been satisfied or waived, or (b) on such other
date as the Parties may agree (the "Closing Date").
4. Representations and Warranties of ▇▇▇▇▇, GSAC and Matrix. ▇▇▇▇▇,
GSAC and Matrix, jointly and severally, hereby represent and warrant as of the
Effective Date and the date of this Agreement to ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks as
follows:
4.1 Authority; Consents; Enforcement; Noncontravention.
(a) Authority of ▇▇▇▇▇, GSAC and Matrix; Binding Effect. This
Agreement has been duly executed and delivered by ▇▇▇▇▇, GSAC and Matrix and
constitutes, and each and every agreement and instrument executed by ▇▇▇▇▇, GSAC
and Matrix in connection herewith, including without limitation, the Broad
Street Property Agreement and the Fayetteville Road Property Agreement
contemplated in Section 6.17, and the Environmental Work Plan contemplated in
-16-
Section 7.1(u) (collectively, the "Ancillary Documents"), will constitute, the
legal, valid and binding obligation of ▇▇▇▇▇, GSAC and Matrix, enforceable
against them in accordance with their respective terms. ▇▇▇▇▇, GSAC and Matrix
have the absolute and unrestricted right, power, authority and capacity,
corporate or otherwise, to execute and deliver this Agreement and the Ancillary
Documents, and to perform their respective obligations under this Agreement and
the Ancillary Documents. ▇▇▇▇▇ is a corporation duly organized, validly
existing and in good standing under the laws of the State of Georgia. Matrix is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. GSAC is a corporation duly organized, validly
existing and in good standing under the laws of the State of Oklahoma. Neither
▇▇▇▇▇, GSAC nor Matrix needs to give any notice to, make any filing with, or
obtain any authorization, declaration, consent or approval of any Governmental
Body in order to consummate the transactions contemplated herein and in the
Ancillary Documents, other than the filing of any releases under the UCC to the
extent required to effect the transactions contemplated in this Agreement, and
other than the consents or approvals from Governmental Bodies that are parties
to any of the WIP Contracts or the Other Work-in-Process Contracts required for
the assignment and transfer of those contracts to ▇▇▇▇▇▇▇▇ as contemplated in
Section 1.1. ▇▇▇▇▇ has, and at all times has had, full corporate power and
authority to own and lease its assets and properties as and where such assets
and properties are now owned and leased, and to conduct its businesses as and
where such businesses have been and are now being conducted. Set forth on
Schedule 4.1(a) are true and complete copies of the Articles or Certificate of
Incorporation and Bylaws of each ▇▇▇▇▇ Party, as amended through the date
hereof.
(b) Noncontravention. Neither the execution and delivery of this
Agreement or the Ancillary Documents by ▇▇▇▇▇, GSAC or Matrix, nor their
compliance with or fulfillment of the terms, conditions and provisions hereof or
thereof, will (i) violate any Legal Requirement or Order applicable to ▇▇▇▇▇,
GSAC, any Subsidiary or Matrix (or their respective businesses), or any
provision of their Articles or Certificate of Incorporation or Bylaws; or (ii)
with notice, the passage of time or both, conflict with, result in a breach of,
constitute a default under, result in the acceleration of, or create in any
Person the right to accelerate, terminate, modify or cancel, any contract,
agreement, lease, license, Governmental Authorization, instrument, arrangement
or commitment to which ▇▇▇▇▇, GSAC, any Subsidiary or Matrix is a party or by
which it or any of
17
their respective assets or properties are bound, or (iii) result in the
imposition or creation of any Encumbrance upon or with respect to any of the
assets or properties owned or used by any ▇▇▇▇▇ Party (except for the Excluded
Assets other than the Broad Street Property and the Fayetteville Road Property,
which shall remain subject to the lien of the Bank Agreement after the Closing),
or (iv) require any notice under any contract, agreement, lease, Order, license,
instrument, arrangement or commitment to which ▇▇▇▇▇, GSAC, any Subsidiary or
Matrix is a party or by which it or they are bound or to which any of its or
their respective assets or properties are subject (other than the consent
required under the Bank Agreement, which shall be obtained by Matrix at its
expense prior to the Closing); or (v) require the approval, consent,
authorization or act of, or the making by any ▇▇▇▇▇ Party, GSAC or Matrix of any
declaration, filing or registration with, any Person, other than the releases of
UCC Financing Statements referred to above and the consent required under the
Bank Agreement, other than, in the case of (iv) and (v) above, any notices to or
consents or approvals from the other parties to any of the WIP Contracts or the
Other Work-in-Process Contracts required for the assignment and transfer of the
Contracts to ▇▇▇▇▇▇▇▇ as contemplated in Section 1.1.
4.2 Qualification of ▇▇▇▇▇ Parties in Other States. Each ▇▇▇▇▇ Party
is duly qualified to transact business as a foreign corporation, and is in good
standing, in the jurisdictions set forth on Schedule 4.2. Neither the nature of
the business of, nor the character and location of the assets and properties
owned or leased by, any ▇▇▇▇▇ Party makes qualification of it as a foreign
corporation necessary under the laws of any jurisdiction other than as set forth
on Schedule 4.2.
4.3 Ownership of ▇▇▇▇▇ and GSAC. GSAC holds of record and owns
beneficially all of the issued and outstanding capital stock of ▇▇▇▇▇, free and
clear of all Encumbrances. Matrix holds of record and owns beneficially all of
the issued and outstanding capital stock of GSAC, free and clear of all
Encumbrances. ▇▇▇▇▇ holds of record and owns beneficially all of the issued and
outstanding capital stock of each of the Subsidiaries, free and clear of all
Encumbrances. ▇▇▇▇▇ does not, directly or indirectly, (a) own, of record or
beneficially, any outstanding voting securities or other equity interests in any
Person other than the Subsidiaries, or (b) "Control" any Person which is
involved in or relates to ▇▇▇▇▇ or its businesses other than the Subsidiaries.
As used in this Agreement, "Control" of a Person means the power, direct or
indirect, to direct or cause the direction
-18-
of the management and policies of such Person, whether by ownership of
securities, contract, law or otherwise.
4.4 [Intentionally Omitted].
4.5 Financial Statements. Attached as Schedule 4.5 are the consolidated
balance sheet, statement of income and statement of EBITDA as at February 28,
1998 and for each of the fiscal quarters then ended commencing with the fiscal
quarter ended May 31, 1994, of ▇▇▇▇▇ and its Subsidiaries prepared in accordance
with GAAP as included in the consolidated and consolidating financial statements
of Matrix which were audited by Ernst & Young LLP (the "Financial Statements").
The balance sheet included in the Financial Statements as of February 28, 1999,
is hereinafter referred to as the "Interim Balance Sheet." The Financial
Statements (including the notes thereto, if any) represent actual, bona fide
transactions, were prepared in accordance with GAAP, present fairly the
consolidated financial condition of ▇▇▇▇▇ and the Subsidiaries as of the
respective dates of the Financial Statements, and the consolidated results of
operations and changes in EBITDA of ▇▇▇▇▇ and the Subsidiaries for such periods,
and are consistent with the books and records of ▇▇▇▇▇ and the Subsidiaries: (i)
subject in the case of any period ended prior to May 31, 1998, to normal year-
end adjustments (all of which are reflected in the Financial Statements for the
year ended May 31, 1994, 1995, 1996, 1997 and 1998), and (ii) in the case of the
Financial Statements as of February 28, 1999, subject to normal year-end
adjustments, in each case which shall not be material, individually or in the
aggregate, and lack footnotes and other presentation items that, if presented,
would not differ materially from those included in the balance sheet included in
the Financial Statements for the fiscal year ended May 31, 1998 (the
"Acquisition Balance Sheet"). No financial statement of any Person other than
▇▇▇▇▇ and the Subsidiaries is required by GAAP to be included in the Financial
Statements.
4.6 Absence of Undisclosed Liabilities. None of the ▇▇▇▇▇ Parties has any
debts, obligations, duties or liabilities of any nature, whether known or
unknown, whether fixed, absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, whether matured or unmatured, whether
asserted or unasserted and whether due or to become due (collectively,
"Liability"), except as shown (and in the amounts shown) on the face of the
Interim Balance Sheet
-19-
(rather than the notes thereto) or on Schedule 4.6. From the date of the Interim
Balance Sheet through the date hereof, except as shown on Schedule 4.6, the
▇▇▇▇▇ Parties have not incurred or become subject to any Liability, other than
Liabilities incurred in the Ordinary Course of Business of such ▇▇▇▇▇ Parties,
all of which have been paid in full in the Ordinary Course of Business or are
reflected on the regular books of account of the ▇▇▇▇▇ Parties, and none of
which is inconsistent with the representations, warranties and covenants of
▇▇▇▇▇, GSAC and Matrix contained in this Agreement or with any other provisions
of this Agreement.
4.7 Absence of Certain Events. Since May 31, 1998, no ▇▇▇▇▇ Party has,
except as set forth on the Schedules referred to in this Section 4.7:
(a) issued, sold, purchased or redeemed any stock, bonds, debentures,
notes or other corporate securities, or issued, sold or granted any option,
warrant or right to acquire any thereof;
(b) except as set forth on Schedule 4.7(b), waived or released any
debts, claims, rights of value or suffered any extraordinary loss or written
down the value of any inventories or other assets or written down or off any
receivable in excess of $25,000 for any single transaction or series of related
transactions, or in excess of $50,000 in the aggregate;
(c) except as set forth on Schedule 4.7(c), made any capital
expenditures or capital commitments in excess of $25,000 for any single
transaction or series of related transactions, or in excess of $50,000 in the
aggregate;
(d) except as set forth on Schedule 4.7(d), made any change in the
business or operations or the manner of conducting the business or operations of
that ▇▇▇▇▇ Party, other than changes in the Ordinary Course of Business of that
▇▇▇▇▇ Party;
(e) except as set forth on Schedule 4.7(e), and except for the
termination of the employees not to be offered employment by ▇▇▇▇▇▇▇▇ or
▇▇▇▇▇▇▇▇ Tanks following the Closing as contemplated in Section 6.13(e),
terminated, placed on probation, disciplined, warned, or
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experienced any material dissatisfaction with, any officer or supervisory
employee of that ▇▇▇▇▇ Party;
(f) except as set forth on Schedule 4.7(f), experienced any
resignations of, or had any disputes involving the employment or agency
relationship with any of, the employees or agents of that ▇▇▇▇▇ Party, other
than normal turn-over of the employees of the ▇▇▇▇▇ Parties incurred in the
Ordinary Course of Business which has not had a material adverse effect on the
business, operations or prospects of any of the ▇▇▇▇▇ Parties;
(g) suffered any casualty, damage, destruction or loss to any of its
properties in excess of $25,000 for any one event or in excess of $50,000 in the
aggregate;
(h) declared, set aside or paid any dividends or distributions in
respect of shares of its capital stock;
(i) except as set forth on Schedule 4.7(i), and except for severance
payments made to the employees terminated prior to the Closing but not to be
offered employment by ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks following the Closing as
contemplated in (e) above, paid or obligated itself to pay any bonuses or
extraordinary compensation to, or made any increase (except increases in the
Ordinary Course of Business of that ▇▇▇▇▇ Party) in the compensation payable (or
to become payable by it) to, any of the directors, officers, employees, agents
or other representatives of that ▇▇▇▇▇ Party;
(j) terminated or amended or suffered the termination or amendment of
any material contract, lease, agreement, license or other instrument to which it
is or was a party;
(k) except as set forth on Schedule 4.7(k), adopted, modified or
amended any plan or agreement listed on Schedule 4.14 so as to increase the
benefits due the employees of any ▇▇▇▇▇ Party under any such plan or agreement;
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(l) made any loan or advance to any Person (except a normal travel or
other reasonable expense advance to its officers and employees);
(m) except as set forth on Schedule 4.7(m) and except for effects of
the environmental matters disclosed on Schedule 4.16(a), suffered any material
adverse change in such ▇▇▇▇▇ Party's business, financial condition, results of
operations, assets or properties from that reflected in the Acquisition Balance
Sheet;
(n) except as set forth on Schedule 4.7(n), subjected or agreed to
subject any of its assets or properties to any Encumbrances (other than
Permitted Encumbrances) or to any other similar charge of any nature whatsoever;
(o) except as set forth on Schedule 4.7(o), paid any funds to any of
its officers or directors, or to any family member of any of them, or any Person
in which any of the foregoing have any direct or indirect interest, except for
the payment of installments of annual salaries and the bonuses accrued in the
Ordinary Course of Business of that ▇▇▇▇▇ Party through the date hereof;
(p) disposed of or agreed to dispose of any of its properties or
assets other than in the Ordinary Course of Business of that ▇▇▇▇▇ Party, and
except as contemplated in this Agreement;
(q) except as set forth on Schedule 4.7(q), entered into any
transactions other than in the Ordinary Course of Business of that ▇▇▇▇▇ Party
(except for the transactions contemplated in this Agreement);
(r) made any change in such ▇▇▇▇▇ Party's accounting principles,
methods or practices;
(s) except as set forth on Schedule 4.7(s), entered into any
agreement, contract, lease or license (or series of related agreements,
contracts, leases or licenses) involving consideration or goods and/or services
having a value in excess of $25,000, or having a term greater than one (1) year
in length;
-22-
(t) delayed or postponed the payment of any accounts payable or other
Liabilities outside the Ordinary Course of Business of such ▇▇▇▇▇ Party;
(u) except as set forth on Schedule 4.7(u), been a party to any other
occurrence, event, incident, action, failure to act, or transaction outside the
Ordinary Course of Business of that ▇▇▇▇▇ Party, except where the same would not
subject any of the ▇▇▇▇▇ Parties to a penalty, fine or judgment in excess of
$5,000 in any one case of $20,000 in the aggregate or render any of the ▇▇▇▇▇
Agreements void or unenforceable, result in any forfeiture of title to any of
its properties or assets or otherwise have a material adverse effect on the
business of any of the ▇▇▇▇▇ Parties; or
(v) not granted credit to any material customer or other Person on
terms more favorable than the terms on which credit has been extended to such
customer or other Person in the past, nor materially changed the terms of any
credit previously extended;
(w) except as set forth on Schedule 4.7(w), entered into any agreement
or commitment (whether or not in writing) to do any of the foregoing;
and each ▇▇▇▇▇ Party has:
(x) used its best efforts to preserve its business and organization,
and to keep available, without entering into any binding agreement, the services
of its employees (other than those employees terminated by the ▇▇▇▇▇ Parties and
not to be offered employment by ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks following the Closing
as contemplated in (e) above), and to preserve the goodwill of its customers and
others having business relationships with it; and
(y) continued its business and maintained its assets, properties,
operations, books of account, and other books, records and files in the Ordinary
Course of Business.
4.8 Books of Account, Records and Minute Books. Prior to the execution
of this Agreement, ▇▇▇▇▇ made available to ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks for their
examination the books of account, records (including without limitation,
computer data and records) and minute books of
-23-
each ▇▇▇▇▇ Party. Such books of account and records are true and complete in all
respects, have been maintained in accordance with sound business practices and
the requisite requirements of section 13(b)(2) of the Exchange Act (regardless
of whether or not that ▇▇▇▇▇ Party is subject to such section) including the
maintenance of an adequate system of internal controls. The minute books of the
▇▇▇▇▇ Parties contain accurate and complete records of all meetings held of, and
corporate action taken by, the stockholders, the board of directors and the
committees of the board of directors of the ▇▇▇▇▇ Parties, and no meeting of any
such stockholders, board of directors or committee has been held for which
minutes have not been prepared and are not contained in such minute books. There
has been duly and completely entered in the books and records of each ▇▇▇▇▇
Party all monies due or to become due from or to or owing by that ▇▇▇▇▇ Party,
and all Liabilities of that ▇▇▇▇▇ Party by reason of any transaction, matter, or
cause whatsoever. No changes or additions to the books and records of any ▇▇▇▇▇
Party have been made as of or for the period prior to the date such books and
records were first made available to ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks, and nothing
which should be set forth in said books and records, if prepared in the usual
and customary manner of that ▇▇▇▇▇ Party, has occurred from the date such books
and records were first made available to ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks, except for
such changes, additions or events which have been made or have occurred, as the
case may be, in the Ordinary Course of Business of that ▇▇▇▇▇ Party, or as
permitted or disclosed in Section 4.7 and Section 6.2 hereof. At the Closing all
books and records shall be in the possession of that ▇▇▇▇▇ Party and shall be
delivered to ▇▇▇▇▇▇▇▇ as contemplated in this Agreement.
4.9 Certain Payments. Neither ▇▇▇▇▇, GSAC, any Subsidiary nor Matrix,
nor to the knowledge of ▇▇▇▇▇, GSAC, any Subsidiary and Matrix any other Person
associated with or acting on behalf of ▇▇▇▇▇, GSAC, any Subsidiary or Matrix,
has directly or indirectly made any contribution or paid or delivered, or
committed itself or himself to pay or deliver, any fee, commis sion, gift,
bribe, rebate, payoff, influence payment or kickback, regardless of form,
whether in money, property or services, or any other payment of money or items
of property or services, however characterized, to any Person that in any manner
is related to the business or operations of any ▇▇▇▇▇ Party, and which ▇▇▇▇▇,
GSAC, any Subsidiary, Matrix or such other Person, or any of them, knows, or has
reason to believe, were or are illegal under any Legal Requirement.
-24-
4.10 Compliance With Legal Requirements; Governmental Authorizations.
(a) Compliance With Legal Requirements. Except as set forth in a
Schedule referred to in this Section 4.10, and except (in the case of (1) and
(2) below) with respect to (v) the Benefit Plans and related trust agreements
and annuity contracts of the ▇▇▇▇▇ Parties, and all "group health plans" (as
defined in section 4980B(g)(2) of the Code) of the ▇▇▇▇▇ Parties (which are the
subject of Section 4.14(c) and Section 4.14(h), respectively), (w) environmental
matters (which are the subject of Section 4.16), (x) labor matters (which are
the subject of Section 4.20), (y) Orders (which are the subject of Section
4.21(b)), and (z) Tax matters (which are the subject of Section 4.28):
(1) Each ▇▇▇▇▇ Party is, and at all times has been, in full
compliance with each Legal Requirement that is or was applicable to it or to
the conduct or operation of its business or the ownership or use of any of its
assets, except where the failure to be in such compliance would not subject
that ▇▇▇▇▇ Party to a penalty, fine or judgment in excess of $5,000 in any one
case of $20,000 in the aggregate or render any of the ▇▇▇▇▇ Agreements void or
unenforceable, result in any forfeiture of title to any of its properties or
assets or otherwise have a material adverse effect on the business, operations
or prospects of that ▇▇▇▇▇ Party;
(2) No event has occurred, nor does any circumstance exist,
that (with or without notice or lapse of time) (A) may constitute or result in
a violation by any ▇▇▇▇▇ Party of, or a failure on the part of any ▇▇▇▇▇ Party
to comply with, any Legal Requirement, or (B) may give rise to any obligation
on the part of any ▇▇▇▇▇ Party to undertake, or to bear all or any portion of
the cost of, any remedial action of any nature, except for such violations or
obligations, if any, that would not subject that ▇▇▇▇▇ Party to a penalty,
fine or judgment in excess of $5,000 in any one case of $20,000 in the
aggregate or render any of the ▇▇▇▇▇ Agreements void or unenforceable, result
in any such forfeiture of title to any of its properties or assets or
otherwise have a material adverse effect on the business of that ▇▇▇▇▇ Party;
and
(3) No ▇▇▇▇▇ Party has received any notice or other
communication (whether oral or written) from any Person regarding (A) any
actual, alleged, possible or potential violation of, or failure to comply
with, any Legal Requirement, or (B) any actual, alleged, possible or
-25-
potential obligation on the part of that or any other ▇▇▇▇▇ Party to
undertake, or to bear all or any portion of the cost of, any remedial action
of any nature.
(b) Governmental Authorizations. Schedule 4.10(b) contains a complete
and accurate list of each Governmental Authorization that is held by any ▇▇▇▇▇
Party or that otherwise relates to the business of, or to any of the assets
owned or used by, any ▇▇▇▇▇ Party. The Governmental Authorizations listed in
Schedule 4.10(b) collectively constitute all of the Governmental Authorizations
necessary to permit the ▇▇▇▇▇ Parties to lawfully conduct and operate their
businesses in the manner currently conducted and operated, and to permit the
▇▇▇▇▇ Parties to own and use their assets in the manner in which they currently
own and use such assets. There will not be a material adverse effect on or with
respect to such Governmental Authorizations or the ▇▇▇▇▇ Parties' (or, following
the Closing with respect to the Governmental Authorizations that are included in
the Assets, ▇▇▇▇▇▇▇▇'▇) maintenance of the same as a result of the consummation
of the transactions contemplated in this Agreement or in the Ancillary
Documents. Each Governmental Authorization listed or required to be listed in
Schedule 4.10(b) is valid and in full force and effect. Except as set forth in
Schedule 4.10(b):
(1) Each ▇▇▇▇▇ Party is, and at all times has been, in full
compliance with all of the terms and requirements of each Governmental
Authorization identified or required to be identified in Schedule 4.10(b),
except where the failure to be in such compliance would not subject that ▇▇▇▇▇
Party to a penalty, fine or judgment in excess of $5,000 in any one case or
$20,000 in the aggregate or render any of the ▇▇▇▇▇ Agreements void or
unenforceable, result in any forfeiture of title to any of its properties or
assets or otherwise have a material adverse effect on the business of that
▇▇▇▇▇ Party;
(2) No event has occurred, nor does any circumstance exist,
that may (with or without notice or lapse of time) (A) constitutes or could
result directly or indirectly in a violation of or a failure to comply with
any term or requirement of any Governmental Authorization listed or required
to be listed in Schedule 4.10(b), or (B) could result directly or indirectly
in the revocation, withdrawal, suspension, cancellation, or termination of, or
any
-26-
modification to, any Governmental Authorization listed or required to be
listed in Schedule 4.10(b);
(3) No ▇▇▇▇▇ Party has received any notice or other
communication (whether oral or written) from any Governmental Body or any
other Person regarding (A) any actual, alleged, possible or potential
violation of or failure to comply with any term or requirement of any
Governmental Authorization, or (B) any actual, proposed, possible, or
potential revocation, withdrawal, suspension, cancellation, termination of, or
modification to any Governmental Authorization; and
(4) All applications required to have been filed for the
renewal of the Governmental Authorizations listed or required to be listed in
Schedule 4.10(b) have been duly filed on a timely basis with the appropriate
Governmental Bodies, and all other filings required to have been made with
respect to such Governmental Authorizations have been duly made on a timely
basis with the appropriate Governmental Bodies.
4.11 Computer Systems; Software.
(a) Condition of Computers. All computers and computer systems owned,
leased or used by the ▇▇▇▇▇ Parties (including, software, communication links
and storage media) (collectively, "Computers") comply with and are used in
accordance with all Legal Requirements, and to the Knowledge of ▇▇▇▇▇, GSAC and
Matrix: (1) are in operating order and fulfill the purposes for which they were
acquired, established and are currently used; (2) have adequate capacity for the
present needs of the ▇▇▇▇▇ Parties and (taking into account the extent to which
the computer systems are expandable, but without considering the future plans
for the businesses and Assets of ▇▇▇▇▇ or the Subsidiaries by ▇▇▇▇▇▇▇▇ following
the Closing other than the operation of their respective businesses in the
Ordinary Course of Business, consistent with past practices) foreseeable future
needs; (3) have adequate security, back-ups, duplication, hardware and software
support and maintenance (including emergency cover) and trained personnel to
ensure: (A) that breaches of security, errors and breakdowns are kept to a
minimum; and (B) that no material disruption will be caused to the ▇▇▇▇▇ Parties
(or, following the Closing, ▇▇▇▇▇▇▇▇) or any material
-27-
part thereof in the event of a breach of security, error or breakdown; (4) are
properly established and documented by written technical descriptions and
manuals so as to enable them to be used and operated by any reasonably qualified
personnel; and (5) are under the sole control of the ▇▇▇▇▇ Parties, are located
at branch locations of the ▇▇▇▇▇ Parties, are not shared with, used by or on
behalf of or accessible by any other Person and, except for software properly
licensed to the ▇▇▇▇▇ Parties, are owned by the ▇▇▇▇▇ Parties.
(b) Condition of Software. All software used on or stored or resident
in the Computers ("Software"): (1) performs in accordance with its
specifications and does not contain any defect or feature which may materially
adversely affect its performance or the performance of any other software in the
future (providing such future software is otherwise compatible); (2)(A) in the
case of Software that is necessary for the businesses or operations of the ▇▇▇▇▇
Parties or is otherwise material to those businesses or operations
(collectively, "Core Software"), is lawfully held and used and does not infringe
the intellectual property rights of any Person and all copies held have been
lawfully made, and (B) in the case of Software that is not Core Software, is
lawfully held and used and does not infringe the intellectual property rights of
any Person and all copies held have been lawfully made, except where such
unlawful holding or use, such infringement or such unlawful copying would not,
individually or in the aggregate, have a material adverse affect on any of the
▇▇▇▇▇ Parties or, following the Closing, ▇▇▇▇▇▇▇▇; and (3) as to copyrights in
connection with the Core Software: (A) such Core Software written or
commissioned by any ▇▇▇▇▇ Party is owned exclusively by that ▇▇▇▇▇ Party, no
other person has the rights therein or rights to the use or copies of the Core
Software or source codes, and complete written listings and written copies of
the source codes for the Core Software are in the possession of the ▇▇▇▇▇
Parties; (B) standard packaged software, is licensed to the ▇▇▇▇▇ Parties on an
express or implied license which does not require the ▇▇▇▇▇ Parties to make any
further payments, is not terminable without the consent of the relevant ▇▇▇▇▇
Party and which imposes no material restrictions except as to copying or the use
or transfer of the Core Software; and (C) all other Core Software is licensed to
the ▇▇▇▇▇ Parties on the terms of written licenses which require payment by the
▇▇▇▇▇ Parties of a fixed annual license fee at a rate not exceeding that paid in
calendar 1998, except for reasonable fees for software support, require the
▇▇▇▇▇ Parties to make no further or other payments, are not terminable, except
for failure
-28-
to pay the license fee, without the consent of the ▇▇▇▇▇ Parties, and impose no
material restrictions except as to copying or the use or transfer of the Core
Software.
(c) Ownership of Software. No Software owned by or licensed to any
▇▇▇▇▇ Party is used by or licensed or sublicensed by that ▇▇▇▇▇ Party to any
other Person.
(d) Operation of Computers. No Person is in a position, by virtue of
its or his rights in, knowledge of or access to the Computers, to prevent or
impair the proper and efficient functioning of the Computers or to demand any
payment in excess of any current license fee or in excess of reasonable
remuneration for services rendered, or to impose any onerous condition, in order
to preserve the proper and efficient functioning of the Computers in the future.
The employees of the ▇▇▇▇▇ Parties are adequately trained to enable them to use
and operate the Computers to perform the functions for which they were hired.
All data and records stored by electronic means are capable of ready access
through the Computers. The transactions contemplated in this Agreement will not
cause any license agreements as referred to in this Section 4.11 to be
terminated or the terms varied or any rates or royalties payable to be
increased.
4.12 Condition and Sufficiency of Assets. With due consideration for
their age, the buildings, plants, facilities, structures and equipment of the
▇▇▇▇▇ Parties are structurally sound, are free from defects (patent and latent),
have been maintained in accordance with normal industry practice, are in good
operating condition and repair (subject to normal wear and tear), and are
suitable for the purposes for which they presently are used and presently
proposed to be used, and none of such buildings, plants, facilities, structures
or equipment is in need of maintenance or repairs except for ordinary, routine
maintenance and repairs that are not material in nature or cost. The buildings,
plants, structures, and equipment of the ▇▇▇▇▇ Parties are sufficient for the
continued conduct of their businesses, and the proposed business of ▇▇▇▇▇▇▇▇
after the Closing in substantially the same manner as conducted prior to the
Closing. The ▇▇▇▇▇ Parties own or lease all buildings, machinery, equipment,
and other tangible property necessary for the conduct of the business of the
▇▇▇▇▇ Parties as presently conducted and as presently proposed to be conducted
by ▇▇▇▇▇▇▇▇.
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4.13 Contracts. Schedule 4.13 (or other Schedules that refer to
particular subsections of this Section 4.13) contains a complete and accurate
list of the following types and forms of contracts and other agreements to which
any of ▇▇▇▇▇ Parties is a party or by which any of its assets or properties are
bound:
(a) any agreement (or group of related agreements), written or oral,
for the lease of personal property to or from any Person providing for lease
payments in excess of $25,000 per annum or which may not be terminated by the
relevant ▇▇▇▇▇ Party (or, following the Closing, ▇▇▇▇▇▇▇▇) without penalty or
payment on 30 days, or less, notice;
(b) any agreement (or group of related agreements) for the purchase or
sale of real property, improvements, raw materials, commodities, equipment,
supplies, products, or other real or personal property, or for the furnishing or
receipt of services, the performance of which shall (i) extend over a period of
more than one year, (ii) result in a material loss to any ▇▇▇▇▇ Party (or,
following the Closing, ▇▇▇▇▇▇▇▇), or (iii) involve consideration in excess of
$250,000;
(c) any agreement concerning a partnership or limited partnership,
joint venture, limited liability company or limited liability partnership,
including any agreement with or involving such an organization which provides
for a sharing of profits, losses, costs or liabilities of the ▇▇▇▇▇ Parties (or
any of them) or such organization with any other Person;
(d) any agreement granting a power of attorney to any Person;
(e) any contract, arrangement or commitment with a labor union or
association or other employee group;
(f) any easements, right-of-way agreements or other similar agreements
or rights;
(g) any agreements, commitments or pledges for civic or charitable
donations;
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(h) any agreement involving a warranty, guaranty or other similar
understanding with respect to contractual performance extended by any ▇▇▇▇▇
Party;
(i) any agreement (or group of related agreements) under which any
▇▇▇▇▇ Party has created, incurred, assumed or guaranteed any indebtedness for
borrowed money, or any capitalized lease obligation, in excess of $25,000 or
under which it has imposed an Encumbrance on any of its assets or properties,
tangible or intangible;
(j) any agreement containing covenants by any ▇▇▇▇▇ Party not-to-
compete in any line of business with any Person, or restricting the customers
from whom, or the area in which, any ▇▇▇▇▇ Party may solicit or conduct
business, or any contract, arrangement or commitment involving a covenant of
confidentiality;
(k) any agreement under which it has advanced, lent or borrowed any
amount of money or property to or from any of its directors, officers,
shareholders or employees (other than advances to employees for expenses in the
Ordinary Course of Business);
(l) any agreement under which the consequences of a default or
termination could have a material adverse effect on the business, financial
condition, results of operations, assets or properties of any ▇▇▇▇▇ Party;
(m) any agreement not made in the Ordinary Course of Business of any
▇▇▇▇▇ Party; or
(n) any other agreement (or group of related agreements) the
performance of which involves consideration in excess of $50,000 or has a term
in excess of one year.
▇▇▇▇▇ has delivered to ▇▇▇▇▇▇▇▇ a correct and complete copy of each WIP
Contract, of each Other Work-in-Process Contract, of each Other Agreement, of
the Orion Contract, the Plate Roll Contract and the Corrosion Specialties
Contract, and of each other written agreement listed in Schedule 4.13,
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and a written summary setting forth the terms and conditions of each oral
agreement referred to in Schedule 4.13.
4.14 Employee Benefits.
(a) Benefit Plans. Except as set forth on Schedule 4.14(a), no ▇▇▇▇▇
Party is a "Plan Sponsor" (as defined in section 3(16)(B) of ERISA) or an "ERISA
Affiliate" (which shall mean, with respect to any ▇▇▇▇▇ Party, any other Person
that, together with such ▇▇▇▇▇ Party, would be treated as a single employer
under section 414 of the Internal Revenue Code of 1986, as amended (the
"Code")), and no ▇▇▇▇▇ Party nor an ERISA Affiliate contributes or is obligated
to contribute to any "employee pension benefit plans" ("Pension Plans") or
"employee welfare benefit plans" ("Welfare Plans") (as described in section 3(2)
and (1), respectively, of ERISA), or to any "multiemployer plan" ("Multiemployer
Plans") (as defined in either section 3(37) of ERISA or section 414(f) of the
Code). Except as set forth on Schedule 4.14(a), no ▇▇▇▇▇ Party nor an ERISA
Affiliate has any obligation, arrangement, practice, plan or agreement to
provide present or future benefits, other than salary, as compensation for
services rendered, to any of its present or former employees, officers,
directors, agents or representatives, nor any voluntary employees' beneficiary
association under section 501(c)(9) of the Code ("VEBA") whose members include
employees or former employees of any ▇▇▇▇▇ Party or an ERISA Affiliate, nor any
obligation, arrangement, practice, plan or agreement providing stock options,
stock purchase, deferred compensation, bonus, severance, "fringe benefits" (as
described in section 132 of the Code), or any other employee benefits of any
nature whatsoever ("Compensation Plans"). Welfare Plans, Pension Plans and
Compensation Plans are collectively referred to as "Benefit Plans." The
consummation of the transactions contemplated in this Agreement shall not result
in the payment, vesting or acceleration of any benefit or right under any
Benefit Plan.
(b) Funding Method for Pension Plans. The funding method used in each
of the Pension Plans subject to Title I, Subtitle B, Part 3 of ERISA ("DB Plan")
is acceptable under ERISA, there is no accumulated funding deficiency, whether
or not waived, with respect to any DB Plan, and no event has occurred or
circumstance exists that may result in any accumulated funding deficiency as of
the last day of the current plan year of any DB Plan. The ▇▇▇▇▇ Parties and
each ERISA
Affiliate has met the minimum funding standard, and has made all contributions
required, under section 302 of ERISA and section 412 of the Code. ▇▇▇▇▇ has
delivered to ▇▇▇▇▇▇▇▇ a true and complete copy of the most recent actuarial
report with respect to each DB Plan identified on Schedule 4.14(a) and such
report fairly presents the financial condition and the results of operations of
each such DB Plan in accordance with GAAP. Since the last valuation date of each
DB Plan no event has occurred or circumstance exists that would increase the
amount of benefits under any DB Plan or that would cause the excess of plan
assets over benefit liabilities (as defined in section 4001 of ERISA) to
decrease, or the amount by which benefit liabilities exceed assets to increase.
If each DB Plan identified on Schedule 4.14(a) were terminated as of the Closing
Date, it would have sufficient assets so as to be terminated in a "standard
termination" (as described in section 4041(b) of ERISA). No ▇▇▇▇▇ Party is
liable for any contributions or excise taxes due and unpaid under any Pension
Plans as of the date hereof. There is no Liability, and there are no
circumstances which may arise which would give rise to any such Liability, of
any ▇▇▇▇▇ Party or ▇▇▇▇▇▇▇▇ to the Pension Benefit Guaranty Corporation ("PBGC")
under Title IV of ERISA.
(c) Compliance of Benefit Plans With ERISA and Code. Each ▇▇▇▇▇ Party
has performed all of its obligations under all Benefit Plans and has made
appropriate entries in its financial records and statements for all Liabilities
under all Benefit Plans that have accrued but are not due. All of the Benefit
Plans and any related trust agreements or annuity contracts (or any funding
instrument) comply currently, and have complied in the past, with the provisions
of ERISA and the Code, where required in order to be a qualified plan under
section 401(a) of the Code and tax exempt under section 501 of the Code, and all
other Legal Requirements, and any applicable collective bargaining agreements.
No event has occurred or circumstance exists that will or could give rise to
disqualification or loss of tax exempt status of any such Plan or trust, or
result in any Tax, excise Tax, fines or penalties, or amounts required to be
paid under any settlement with the U.S. Department of Labor, the IRS or the
PBGC. Neither the ▇▇▇▇▇ Parties, nor any Person who is a fiduciary or otherwise
has a trust relationship with a Benefit Plan, has any liability to the Benefit
Plan, the IRS, the Department of Labor, or the PBGC with respect to a Benefit
Plan, or any Liability under sections 502 or 4071 of ERISA. All contributions
and payments made or accrued with respect to all Benefit Plans are deductible
under the Code. No amount, or any asset of any Benefit Plan, is subject to Tax
as unrelated business taxable income. All filings required by ERISA and the
Code
-33-
as to each Benefit Plan have been timely filed, and all notices and disclosures
to participants required by either ERISA or the Code have been timely provided.
Other than routine Claims for benefits submitted by participants or
beneficiaries in the ordinary course, no Claim against, or Proceeding involving
any Benefit Plan is pending or Threatened. No payment that is owed or may become
due to any director, officer, employee or agent of any ▇▇▇▇▇ Party will be non-
deductible to such ▇▇▇▇▇ Party or subject to Tax under sections 280G or 4999 of
the Code, nor shall such ▇▇▇▇▇ Party be required to "gross-up" or otherwise
compensate any such person because of the imposition of any Tax or excise Tax on
a payment to such person.
(d) Multiemployer Plans. Schedule 4.14(d) contains, for each
Multiemployer Plan, as of its last valuation date, the amount of potential
withdrawal liability of each ▇▇▇▇▇ Party, calculated according to information
made available pursuant to section 4221(e) of ERISA. Neither the ▇▇▇▇▇ Parties
nor an ERISA Affiliate has received any notice from any Multiemployer Plan that
it is in reorganization or is insolvent, that increased contributions may be
required to avoid a reduction in plan benefits or the imposition of any Tax,
excise Tax, or that such plan intends to terminate or has terminated. None of
the ▇▇▇▇▇ Parties nor an ERISA Affiliate has withdrawn from any Multi-Employer
Plan with respect to which there is any outstanding Liability as of the date
hereof. No event has occurred or circumstance exists that presents a risk of the
occurrence of any withdrawal from, or the participation, termination,
reorganization or insolvency of, any Multi-Employer Plan that could result in
any Liability of any ▇▇▇▇▇ Party or ▇▇▇▇▇▇▇▇ to a Multi-Employer Plan. No
Multiemployer Plan to which any ▇▇▇▇▇ Party or an ERISA Affiliate contributes or
has contributed is a party to any pending merger or asset or liability transfer
or is subject to any Proceeding brought by the PBGC.
(e) Post-Retirement Benefits. Schedule 4.14(e) contains a calculation
of the Liability of each ▇▇▇▇▇ Party for post-retirement benefits for its past
and present officers, employees and directors (or their dependents or
beneficiaries) other than pensions, made in accordance with Financial Accounting
Statement 106 of the Financial Accounting Standards Board, regardless of whether
such ▇▇▇▇▇ Party is required by this Statement to disclose such information.
Except as set forth on Schedule 4.14(e) or as required by section 601 et seq. of
ERISA and section 4980B of the Code, no ▇▇▇▇▇ Party provides, or is obligated to
provide, health or welfare benefits (including
-34-
without limitation, retiree medical insurance coverage or retiree life insurance
coverage), or pension benefits, for any retired or former officer, employee or
director, or any dependents or beneficiaries of the same, nor is it obligated to
provide any health or welfare benefits to any active employee following such
employee's retirement or other termination of service. Each ▇▇▇▇▇ Party has the
right to modify and terminate benefits to retirees or their dependents or
beneficiaries (other than Pension Plan benefits) with respect to both retired
and active officers, employees and directors. To the extent of such health,
welfare or pension benefits to retirees (or their dependents or beneficia ▇▇▇▇),
Schedule 4.14(e) sets forth the name, pension benefit, pension option election,
medical insurance coverage, and life insurance coverage for such retirees,
dependents or beneficiaries.
(f) Administration and Cost of Plans. Each of the Welfare Plans and
Pension Plans has been administered in compliance with the requirements of the
Code and ERISA and all reports required by any governmental agency with respect
to each such Plan have been timely filed. No statement, either written or oral,
has been made by any ▇▇▇▇▇ Party or an ERISA Affiliate to any Person with regard
to any Benefit Plan that was not in accordance with the Benefit Plan and that
could have an adverse economic consequence to the ▇▇▇▇▇ Parties or ▇▇▇▇▇▇▇▇.
Each Benefit Plan, and the participation by the ▇▇▇▇▇ Parties in each Benefit
Plan, other than a DB Plan, can be terminated within 30 days without payment of
any additional contribution or amount and without the vesting or acceleration of
any benefits promised by such Plan. No event has occurred or circumstance
exists that could result in a material increase in premium costs of Benefit
Plans that are insured, or a material increase in benefit costs of such Plans
that are self-insured. None of the ▇▇▇▇▇ Parties nor an ERISA Affiliate has
filed a notice of intent to terminate any current Plan or has adopted any
amendment to treat a Plan as terminated. The PBGC has not instituted
Proceedings to treat any DB Plan or Multiemployer Plan as terminated. No event
has occurred or circumstance exists that may constitute grounds under section
4041 of ERISA for the termination of, or the appointment of a trustee to
administer, any DB Plan or Multiemployer Plan. No amendment has been made, or
is reasonably expected to be made, to any DB Plan that has required or could
require the provision of security under section 307 of ERISA or section
401(a)(29) of the Code.
(g) No Prohibited Transactions. None of the ▇▇▇▇▇ Parties, nor any of
their respective directors, officers or employees who are fiduciaries, nor any
other fiduciary of any of the Pension
-35-
Plans or Welfare Plans, has engaged in any transaction in violation of section
406 of ERISA (for which no exemption exists under section 408 of ERISA) or any
"prohibited transaction" (as defined in section 4975(c)(1) of the Code) for
which no exemption exists under sections 4975(c)(2) or 4975(d) of the Code.
(h) Compliance of Health Plans. Each "group health plan" (as defined
in section 4980B(g)(2) of the Code) maintained by any of the ▇▇▇▇▇ Parties, or
in which any of them participated, has been administered in compliance with the
continuation coverage and notice requirements of section 601 et seq. of ERISA,
section 4980B of the Code (and the regulations there under) and all other Legal
Requirements.
(i) PBGC Premiums. Each ▇▇▇▇▇ Party, and each ERISA Affiliate, has
paid all premiums (and interest charges and penalties for late payment if
applicable) due to the PBGC with respect to each of the DB Plans described in
Schedule 4.14(a) in each plan year thereof for which such premiums are required.
There has been no "reportable event" (as defined in section 4043 of ERISA and
the regulations of the PBGC thereunder) with respect to any of the DB Plans
described in Schedule 4.14(a).
(j) Copies of Documents. ▇▇▇▇▇ has furnished to ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇
Tanks a true and complete copy of all documents that set forth the terms of each
Benefit Plan described on Schedule 4.14(a) and the summary plan description
which any ▇▇▇▇▇ Party or an ERISA Affiliate is obligated to prepare for such
plans, and all summaries and descriptions furnished to participants and
beneficiaries regarding Benefit Plans for which a summary plan description is
not required. In addition, ▇▇▇▇▇ has furnished to ▇▇▇▇▇▇▇▇:
(1) a written description of any Benefit Plan, program or
practice that is not otherwise in writing;
(2) all personnel, payroll, and employment manuals and
policies;
-36-
(3) all collective bargaining agreements pursuant to which
contributions have been made or obligations incurred (including both pension
and welfare benefits) by any ▇▇▇▇▇ Party and all collective bargaining
agreements pursuant to which contributions are being made or obligations are
owed by any ▇▇▇▇▇ Party;
(4) all registration statements filed with respect to any
Benefit Plan;
(5) all insurance policies purchased by or to provide benefits
under any Benefit Plan;
(6) all contracts with third party administrators, actuaries,
investment managers, consultants, and other independent contractors that
relate to any Benefit Plan;
(7) [Intentionally Omitted];
(8) a favorable determination letter as to the qualification
under the Code of each of the Pension Plans and each amendment thereto that
has been issued by the IRS and a true and correct copy of each such
determination letter has been delivered to ▇▇▇▇▇▇▇▇;
(9) all notifications to employees of their rights under
section 601 et seq. of ERISA and section 4980B of the Code; provided, in the
case of notices to multiple employees that are substantially identical, ▇▇▇▇▇
has only furnished to ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks a sample of such
notifications;
(10) the annual return (Form 5500 or Form 990 series) filed in
each of the most recent three plan years with respect to each Benefit Plan,
including all schedules thereto and the opinions of independent accountants;
(11) all notices that were given by any ▇▇▇▇▇ Party, an ERISA
Affiliate or any Benefit Plan to the IRS, the PBGC, the Department of Labor or
any participant or
-37-
beneficiary, pursuant to Legal Requirements, within the four years preceding
the date of this Agreement, including notices that are expressly mentioned
elsewhere in this Section 4.14;
(12) all notices that were given by the IRS, the PBGC or the
Department of Labor to any ▇▇▇▇▇ Party, an ERISA Affiliate or any Benefit Plan
within the four years preceding the date of this Agreement;
(13) with respect to each Pension Plan and VEBA, the most recent
determination letter for each Plan; and
(14) with respect to each DB Plan, the Form PBGC-1 filed for
each of the three most recent plan years.
(k) Termination. Each ▇▇▇▇▇ Party can unilaterally terminate, or
terminate its participation in, each of the Benefit Plans identified on Schedule
4.14(a) without incurring any material Liabilities.
4.15 Employees and Independent Contractors.
(a) List of Employees. Included as Schedule 4.15(a) is a true and
complete list of all officers and employees of the ▇▇▇▇▇ Parties on the date
hereof along with the amount of the current annual salaries or hourly rate, job
title and vacation accrued, along with a full and complete description of any
commitments to such officers and employees with respect to compensation payable
hereafter. No ▇▇▇▇▇ Party has, because of past practices or previous
commitments with respect to its officers or employees, established any rights or
expectations on the part of such officers or employees to receive additional
compensation inconsistent with past practices with respect to any period after
the date hereof. None of the officers or employees of the ▇▇▇▇▇ Parties has
given notice to the ▇▇▇▇▇ Parties that he or she intends to leave their
employment. Except as set forth in Schedule 4.15, no ▇▇▇▇▇ Party has reason to
believe that any of its officers or employees shall leave such employment. Set
forth on Schedule 4.15 is a description of all claims made against the ▇▇▇▇▇
-38-
Parties by their officers or employees within the last 24 months. No officer or
employee of the ▇▇▇▇▇ Parties is employed outside the United States of America.
(b) Agreements With Employees and Independent Contractors. Except as
set forth on Schedule 4.15, no ▇▇▇▇▇ Party is a party to or bound by any oral or
written:
(1) employee collective bargaining agreement, employment or
independent contractor agreement (other than agreements terminable by that
▇▇▇▇▇ Party without premium or penalty on notice of 30 days or less under
which the only monetary obligation of that ▇▇▇▇▇ Party is to make current wage
or salary payments and provide current employee benefits), consulting,
advisory or service agreement, deferred compensation agreement,
confidentiality agreement or covenant not to compete; or
(2) contract or agreement with any officer or employee (other
than employment agreements disclosed in response to clause (1) or excluded
from the scope of clause (1)), agent, or attorney-in-fact of that ▇▇▇▇▇ Party.
(c) Confidentiality and Noncompetition Agreements. No officer,
employee or director of any ▇▇▇▇▇ Party is a party to, or is otherwise bound by,
any agreement or arrangement, including any confidentiality, noncompetition, or
proprietary rights agreement, between such officer, employee or director and any
other Person that in any way materially adversely affects or will materially
adversely affect (1) the performance of his or her duties as an officer,
employee or director of that ▇▇▇▇▇ Party, or (ii) the ability of that ▇▇▇▇▇
Party to conduct its business, including any such agreement or arrangement with
Matrix, GSAC or ▇▇▇▇▇.
4.16 Environmental Matters.
(a) Compliance with Environmental Laws. Except as set forth on
Schedule 4.16(a), each ▇▇▇▇▇ Party is, and at all times has been, in full
compliance with, and has not been and is not in violation of or liable under,
any Environmental Law, except for such violations or non-compliance (each an
"Immaterial Violation"), if any, that would (i) not subject any ▇▇▇▇▇ Party or
▇▇▇▇▇▇▇▇ to,
-39-
or cause any ▇▇▇▇▇ Party or ▇▇▇▇▇▇▇▇ to suffer or incur, any penalty, fine,
judgment, remediation, cost or other Damage in excess of $5,000 for any one
violation or event of non-compliance or $20,000 in the aggregate, (ii) not
render any of the ▇▇▇▇▇ Agreements void or unenforceable, (iii) not result in
any forfeiture of title to any of the properties or assets of any ▇▇▇▇▇ Party or
▇▇▇▇▇▇▇▇, and (iv) not otherwise have a material adverse effect on the business
or operations of any ▇▇▇▇▇ Party or ▇▇▇▇▇▇▇▇. To the knowledge of GSAC, Matrix
and ▇▇▇▇▇, there has not occurred nor does there now exist any Immaterial
Violations of any Environmental Laws by any ▇▇▇▇▇ Party or ▇▇▇▇▇▇▇▇, except to
the extent set forth on Schedule 4.16(a). Neither ▇▇▇▇▇, GSAC, any Subsidiary
nor Matrix has any basis to expect, nor has any of them or any other Person for
whose conduct they are or may be held to be responsible received, any actual or
Threatened Order, notice, or other communication from any Governmental Body or
private citizen acting in the public interest, or from the current or prior
owner or operator of any Facilities, of any actual or potential violation or
failure to comply with any Environmental Law, or of any actual or Threatened
obligation to undertake or bear the cost of any Environmental, Health, and
Safety Liabilities with respect to any of the Facilities or any other properties
or assets (whether real, personal, or mixed) in which any ▇▇▇▇▇ Party now has or
has had an interest, or with respect to any property or Facility at or to which
Hazardous Materials were generated, manufactured, refined, transferred,
imported, used, or processed by ▇▇▇▇▇, GSAC, any Subsidiary or Matrix, or any
other Person for whose conduct they are or may be held responsible, or from
which Hazardous Materials have been transported, treated, stored, handled,
transferred, disposed, recycled or received.
(b) No Claims. Except as set forth on Schedule 4.16(a), there are no
pending or, to the knowledge of ▇▇▇▇▇, GSAC, any Subsidiary and Matrix,
Threatened Claims, Encumbrances, Proceedings or other restrictions of any
nature, resulting from any Environmental, Health, and Safety Liabilities or
arising under or pursuant to any Environmental Law, with respect to or affecting
any of the Facilities or any other properties or assets (whether real, personal,
or mixed) in which any ▇▇▇▇▇ Party has or has had an interest.
(c) No Orders. Except as set forth on Schedule 4.16(a), neither ▇▇▇▇▇,
GSAC, any Subsidiary nor Matrix has any basis to expect, nor has either of them
or any other Person for whose conduct they are or may be held responsible,
received, any citation, directive, inquiry, notice, order,
-40-
summons, warning, or other communication that relates to Hazardous Activity,
Hazardous Materials, or any alleged, actual, or potential violation or failure
to comply with any Environmental Law, or of any alleged, actual, or potential
obligation to undertake or bear the cost of any Environmental, Health, and
Safety Liabilities with respect to any of the Facilities or any other properties
or assets (whether real, personal, or mixed) in which any ▇▇▇▇▇ Party now has or
has had an interest, or with respect to any property or Facility to which
Hazardous Materials generated, manufactured, refined, transferred, imported,
used or processed by ▇▇▇▇▇, GSAC, any Subsidiary or Matrix, or any other Person
for whose conduct they are or may be held responsible, have been transported,
treated, stored, handled, transferred, disposed, recycled or received.
(d) No Environmental Liabilities. Except as set forth on Schedule
4.16(a), neither ▇▇▇▇▇, GSAC, any Subsidiary nor Matrix, or any other Person for
whose conduct they are or may be held responsible, has any Environmental,
Health, and Safety Liabilities with respect to the Facilities or with respect to
any other properties and assets (whether real, personal, or mixed) in which any
▇▇▇▇▇ Party (or any of its predecessors) now has or has had an interest, or at
any property geologically or hydrologically adjoining the Facilities or any such
other property or assets, except for such liabilities (each an "Immaterial
Liability"), if any, that would not result in any of the events or circumstances
described in Subclauses (i) through (iv) inclusive of Section 4.16(a), above. To
the knowledge of GSAC, Matrix and ▇▇▇▇▇, there has not occurred nor does there
now exist any Immaterially Liabilities of any ▇▇▇▇▇ Party, except to the extent
set forth on Schedule 4.16(a).
(e) No Hazardous Materials. Except as set forth on Schedule 4.16(a),
there are no Hazardous Materials present on or in the Environment at the
Facilities or at any geologically or hydrologically adjoining property,
including any Hazardous Materials contained in barrels, above or underground
storage tanks, landfills, land deposits, dumps, equipment (whether moveable or
fixed) or other containers, either temporary or permanent, and deposited or
located in land, water, sumps, or any other part of the Facilities or such
adjoining property, or incorporated into any structure therein or thereon.
Neither ▇▇▇▇▇, GSAC, any Subsidiary nor Matrix, or any other Person for whose
conduct they are or may be held responsible, or to the knowledge of ▇▇▇▇▇, GSAC,
any Subsidiary and Matrix, any other Person, has permitted or conducted, or is
aware of, any Hazardous Activity conducted with respect to the Facilities or any
other properties or assets (whether real,
-41-
personal, or mixed) in which any ▇▇▇▇▇ Party now has or has had an interest,
except such activities as are and were in full compliance with all applicable
Environmental Laws.
(f) No Release. Except as set forth on Schedule 4.16(a), there has
been no Release or, to the knowledge of ▇▇▇▇▇, GSAC, any Subsidiary or Matrix,
Threat of Release, of any Hazardous Materials at or from the Facilities or at
any other locations where any Hazardous Materials were generated, manufactured,
refined, transferred, produced, imported, used or processed from or by the
Facilities, or from or by any other properties and assets (whether real,
personal, or mixed) in which any ▇▇▇▇▇ Party now has or has had an interest, or
any geologically or hydrologically adjoining property, whether by ▇▇▇▇▇, GSAC,
any Subsidiary, Matrix or any other Person.
(g) Delivery of Reports, etc. GSAC has delivered to ▇▇▇▇▇▇▇▇ true and
complete copies and results of all reports, studies, analyses, tests or
monitoring possessed or initiated by ▇▇▇▇▇, GSAC, any Subsidiary or Matrix
pertaining to Hazardous Materials or Hazardous Activities in, or under, the
Facilities, or concerning compliance by ▇▇▇▇▇, GSAC, any Subsidiary and Matrix
or any other Person for whose conduct they are or may be held responsible with
Environmental Laws.
4.17 Insurance. Schedule 4.17 sets forth the following information
with respect to each insurance policy (including policies providing property,
casualty, liability, and workers' compensation coverage and bond and surety
arrangements) to which any ▇▇▇▇▇ Party has been a party, a named insured, or
otherwise the beneficiary of coverage at any time within the past five (5)
years: (a) the name, address, and telephone number of the agent; (b) the name of
the insurer, the name of the policyholder, and the name of each covered insured;
(c) the policy number and the period of coverage; (d) the scope (including an
indication of whether the coverage was on a claims made, occurrence, or other
basis) and amount (including a description of how deductibles and ceilings are
calculated and operate) of coverage; and (e) a description of any retroactive
premium adjustments or other loss-sharing arrangements. To the extent any such
insurance policy includes "occurrence" based coverages: (1) the policy is legal,
valid, binding, enforceable and in full force and effect; (2) the consummation
of the transactions contemplated in this Agreement shall not cause a loss of any
coverage or other rights (if any) of the ▇▇▇▇▇ Parties thereunder and relating
to losses, events or other circumstances occurring or existing prior to the
Closing or which are otherwise
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Retained Obligations; (3) the policy has been issued by an insurer that is
financially sound and reputable; (4) no ▇▇▇▇▇ Party is in breach or default
(including with respect to the payment of premiums or the giving of notices),
and no event has occurred which, with notice or the lapse of time, would
constitute such a breach or default, or permit termination, modification, or
acceleration, under the policy; (5) the policy does not provide for any
retrospective premium adjustment or other experience-based liability on the part
of any ▇▇▇▇▇ Party; (6) taken together, the policies provide adequate insurance
coverage for the assets and the operations of the ▇▇▇▇▇ Parties for all risks
normally insured against by a Person carrying on the same business or businesses
as the ▇▇▇▇▇ Parties; and (7) no party to the policy has repudiated any
provision thereof. Each ▇▇▇▇▇ Party has been covered during the past five (5)
years by insurance in scope and amount customary and reasonable for the
businesses in which it has engaged during the aforementioned period. Schedule
4.17 describes any self-insurance arrangements affecting the ▇▇▇▇▇ Parties.
Schedule 4.17 further lists and describes all claims for payment made by any
▇▇▇▇▇ Party within the previous five (5) years under any such insurance policy
listed on that Schedule. ▇▇▇▇▇ has furnished to ▇▇▇▇▇▇▇▇ copies of each
insurance policy listed on Schedule 4.17.
4.18 Intellectual Property.
(a) Definition of Intellectual Property. The term "Intellectual
Property" as used in this Agreement shall mean and include all of the following:
(1) the names ▇▇▇▇▇ Steel Contractors, Inc., ▇▇▇▇▇ Tanks, Inc., Aqua Tanks,
Inc., ▇▇▇▇▇ Steel Services, Inc., all fictional business names, trading names,
registered and unregistered trademarks, service marks and applications
(collectively, "Marks"); (2) all patents, patent applications and inventions and
discoveries that may be patentable (collectively, "Patents"); (3) all original
works of authorship fixed in any tangible medium protected by the Copyright Act,
17 U.S.C. (S)101 et seq. (collectively, "Copyrights"); (4) all rights in mask
works (collectively, "Rights in Mask Works"); and (5) all know-how, trade
secrets, confidential information, customer lists, technical information, data,
process technology, plans, forecasts, drawings and blue prints (collectively,
"Trade Secrets").
(b) Ownership of Intellectual Property. The ▇▇▇▇▇ Parties own or have
the right to use all of the Intellectual Property necessary or desirable for the
operation of their businesses as they are currently conducted. Except for the
Intellectual Property licensed by the ▇▇▇▇▇ Parties as a
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licensee, the ▇▇▇▇▇ Parties own all right, title, and interest in and to all of
the Intellectual Property, free and clear of all liens, security interests,
charges, encumbrances, equities, and other adverse claims, and have the right to
use all of such Intellectual Property without payment to a third party.
(c) Patents. Set forth on Schedule 4.18(c) is a complete and accurate
list and summary description of all Patents owned or used by the ▇▇▇▇▇ Parties.
Except as disclosed on Schedule 4.18(c): (1) all of the issued Patents are
currently in compliance with all applicable Legal Requirements (including
payment of filing, examination, and maintenance fees and proofs of working or
use), are valid and enforceable, and are not subject to any maintenance fees or
taxes or actions falling due within 90 days after the Closing Date; (2) no
Patent has been or is now involved in any interference, reissue, reexamination,
or opposition proceeding and, to the knowledge of the ▇▇▇▇▇ Parties, GSAC and
Matrix, there is no potentially interfering patent or patent application of any
third party; (3) no Patent is infringed or, to the knowledge of ▇▇▇▇▇, GSAC, the
Subsidiaries and Matrix, has been challenged or threatened in any way; (4) none
of the products manufactured and sold, nor any process or know-how used, by the
▇▇▇▇▇ Parties infringes or is alleged to infringe any patent or other
proprietary right of any other Person; and (5) all products made, used, or sold
under the Patents have been marked with the proper patent notice.
(d) Marks. Set forth on Schedule 4.18(d) is a complete and accurate
list and summary description of all Marks. Except as disclosed on Schedule
4.18(d): (1) The ▇▇▇▇▇ Parties are the owners of all right, title, and interest
in and to each of the Marks, free and clear of all liens, security interests,
charges, encumbrances, equities, and other adverse claims; (2) all Marks that
have been registered with the United States Patent and Trademark Office are
currently in compliance with all formal laws and regulations (including the
timely post-registration filing of affidavits of use and incontestability and
renewal applications), are valid and enforceable, and are not subject to actions
falling due within 90 days after the Closing Date; (3) no ▇▇▇▇ has been or is
now involved in any opposition, invalidation, cancellation or infringement
action and, to the knowledge of ▇▇▇▇▇, GSAC, the Subsidiaries and Matrix, no
such action is threatened against any of the Marks; (4) none of the Marks used
by the ▇▇▇▇▇ Parties infringes or is alleged to infringe any trade name,
trademark or service ▇▇▇▇ of any third party, nor, to the knowledge of ▇▇▇▇▇,
GSAC, the Subsidiaries and Matrix, is there any potentially interfering
trademark or trademark application of any other Person;
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and (5) all products and materials containing a ▇▇▇▇ ▇▇▇▇ the proper federal
registration notice where permitted by law.
(e) Copyrights. Set forth on Schedule 4.18(e) is a complete and
accurate list and summary description of all Copyrights. Except as disclosed on
Schedule 4.18(e): (1) Each ▇▇▇▇▇ Party is the owner of all right, title, and
interest in and to each of the Copyrights, free and clear of all Encumbrances
and other adverse claims; (2) all the Copyrights have been registered and are
currently in compliance with formal legal requirements, are valid and
enforceable, and are not subject to any taxes or actions falling due within 90
days after the date of Closing; (3) no Copyright is infringed or to the
knowledge of ▇▇▇▇▇, GSAC, the Subsidiaries and Matrix, has been challenged or
threatened in any way; (4) none of the subject matter of any of the Copyrights
infringes or is alleged to infringe any copyright of any third party or is a
derivative work based on the work of a third party.
(f) Trade Secrets. To the knowledge of GSAC, Matrix and ▇▇▇▇▇, (i)
each Trade Secret, and the documentation relating to such Trade Secret is
current, accurate, and sufficient in detail and content to identify and explain
it and to allow its full and proper use without reliance on the knowledge or
memory of any individual, (ii) Matrix, GSAC, ▇▇▇▇▇ and the Subsidiaries have
taken all reasonable precautions to protect the secrecy, confidentiality, and
value of the Trade Secrets, (iii) the ▇▇▇▇▇ Parties have good title and an
absolute and exclusive right to use the Trade Secrets, (iv) the Trade Secrets
are not part of the public knowledge or literature, and have not been used,
divulged or appropriated either for the benefit of any other person or to the
detriment of the ▇▇▇▇▇ Parties, and (v) no Trade Secret is subject to any
adverse claim has been challenged or threatened in any way.
(g) Royalties. Schedule 4.18(g) contains a complete and accurate list
and summary description, including any royalties paid or received by the ▇▇▇▇▇
Parties, of all agreements or contracts relating to any of the Intellectual
Property to which any of ▇▇▇▇▇ Parties is a party or by which it is bound,
except for any license implied by the sale of a product and perpetual, paid-up
licenses for commonly available programs with a value of less than $10,000 under
which such
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▇▇▇▇▇ Party is the licensee. There are no outstanding and to the knowledge of
▇▇▇▇▇, GSAC, the Subsidiaries and Matrix, no threatened disputes or
disagreements relating to any such agreement.
(h) Employee Agreements. Except as set forth in Schedule 4.18(h), all
former and current employees of the ▇▇▇▇▇ Parties have executed written
agreements with such ▇▇▇▇▇ Parties that assign to such ▇▇▇▇▇ Parties all rights
to any inventions, improvements, discoveries, or information relating to the
business of such ▇▇▇▇▇ Parties. No employee of any ▇▇▇▇▇ Party has entered into
any agreement that restricts or limits in any way the scope or type of work in
which the employee may be engaged or requires the employee to transfer, assign,
or disclose information concerning his work to anyone other than ▇▇▇▇▇.
4.19 Inventory. All Inventory of the ▇▇▇▇▇ Parties, consists of a
quality and quantity usable and salable in the Ordinary Course of Business of
the ▇▇▇▇▇ Parties, except for obsolete items and items of below-standard
quality, all of which have been written off or written down to net realizable
value on the accounting records of the ▇▇▇▇▇ Parties as of the date hereof, as
the case may be. All Inventories not written off have been priced at the lower
of cost or market on a first in, first out basis. The quantities of each item
of Inventory (whether raw materials, work-in-process, or finished goods) are not
excessive, but are reasonable in the present circumstances of the ▇▇▇▇▇ Parties.
The Inventory obsolescence policies of the ▇▇▇▇▇ Parties are appropriate for the
nature of the products sold and the marketing methods used by the ▇▇▇▇▇ Parties,
the reserve for Inventory obsolescence contained in the financial books and
records of the ▇▇▇▇▇ Parties as of the date hereof fairly reflects the amount of
obsolete Inventory as of the date hereof, and the reserve for Inventory
obsolescence to be contained in the books and records of the ▇▇▇▇▇ Parties as of
the Closing Date will fairly reflect the amount of obsolete Inventory as of the
Closing Date. No items included in the Inventories are pledged as collateral or
held by the ▇▇▇▇▇ Parties on consignment from another Person.
4.20 Labor Relations; Compliance. No ▇▇▇▇▇ Party has been nor is it
now a party to any collective bargaining or other labor contract. There has not
been, there is not presently pending or existing, and to the knowledge of ▇▇▇▇▇,
GSAC, the Subsidiaries and Matrix there is not Threatened, (a) any strike,
slowdown, picketing, work stoppage or employee grievance process, (b)
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any Proceeding against or affecting any ▇▇▇▇▇ Party relating to the alleged
violation of any Legal Requirement pertaining to labor relations or employment
matters, including any charge or complaint filed by an employee or union with
the National Labor Relations Board, the Equal Employment Opportunity Commission,
or any comparable Governmental Body, organizational activity, or other labor or
employment dispute against or affecting any ▇▇▇▇▇ Party or its premises, or (c)
any application for certification of a collective bargaining agent. No event has
occurred or circumstance exists that could provide the basis for any work
stoppage or other labor dispute. There is no lockout of any employees by any
▇▇▇▇▇ Party, and no such action is contemplated by any ▇▇▇▇▇ Party. Each ▇▇▇▇▇
Party has complied in all material respects with all Legal Requirements relating
to employment, equal employment opportunity, nondiscrimination, immigration,
wages, hours, benefits, collective bargaining, the payment of social security
and similar taxes, occupational safety and health, and plant closing. No ▇▇▇▇▇
Party is liable for the payment of any compensation, damages, taxes, fines,
penalties, or other amounts, however designated, for failure to comply with any
of the foregoing Legal Requirements.
4.21 Litigation; Compliance With Legal Requirements, Etc.
(a) Proceedings. Except as set forth on Schedule 4.21(a), and except
for (i) Claims or Proceedings against or involving any of the Benefit Plans of
the ▇▇▇▇▇ Parties (which are the subject of Section 4.14(c)), (ii) Claims or
Proceedings resulting from any Environmental, Health and Safety Liabilities or
arising under or pursuant to any Environmental Law (which are the subject of
Section 4.16(b)), (iii) Proceedings against or affecting any ▇▇▇▇▇ Party
relating to the alleged violation of any Legal Requirement pertaining to labor
relations or employment matters (which are the subject of Section 4.20(b)), and
(iv) Claims or Proceedings pending or proposed against any ▇▇▇▇▇ Party relating
to any Taxes or assessments or any Claims or deficiencies with respect thereto
(which are the subject of Section 4.28(b)), there is no Claim or Proceeding
pending or, to the knowledge of ▇▇▇▇▇, GSAC, the Subsidiaries or Matrix,
Threatened, against or relating to any ▇▇▇▇▇ Parties or its properties or
assets. ▇▇▇▇▇, GSAC, the Subsidiaries and Matrix do not know or have any
reasonable grounds to know of any basis or alleged basis for any such Claim or
Proceedings or of any governmental investigation relative to the ▇▇▇▇▇ Parties,
its properties or assets, and no event has occurred, nor does any circumstance
exist, that may give rise to or serve as a basis for the commencement of any
such Claim or Proceedings. No event or condition of any
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nature which might have a material adverse effect on the business, financial
condition, results of operations or assets or properties of any ▇▇▇▇▇ Party or,
following the Closing, ▇▇▇▇▇▇▇▇ has occurred, exists or, to the knowledge of
▇▇▇▇▇, GSAC, any Subsidiary or Matrix, is anticipated. To the knowledge of
▇▇▇▇▇, GSAC, any Subsidiary and Matrix, no legislative or regulatory proposal
has been adopted or is pending which could have a material adverse effect on the
business, financial condition, results of operations or assets or properties of
any ▇▇▇▇▇ Party or, following the Closing, ▇▇▇▇▇▇▇▇. The Proceedings listed on
Schedule 4.21(a) shall not have a material adverse effect on the business,
financial condition, results of operations or assets or properties of any ▇▇▇▇▇
Party or, following the Closing, ▇▇▇▇▇▇▇▇.
(b) Orders. Except as set forth in Schedule 4.21(b), (1) there is no
Order to which any ▇▇▇▇▇ Party, or any of the assets owned or used by any ▇▇▇▇▇
Party, is subject; (2) Matrix and GSAC are not subject to any Order that relates
to the business of, or any of the assets owned or used by any ▇▇▇▇▇ Party; and
(3) to the knowledge of ▇▇▇▇▇, GSAC, any Subsidiary and Matrix no officer,
director, agent, or employee of any ▇▇▇▇▇ Party is subject to any Order that
prohibits such officer, director, agent, or employee from engaging in or
continuing any conduct, activity or practice relating to the business of any
▇▇▇▇▇ Party. Except as set forth in Schedule 4.21(b): (A) each ▇▇▇▇▇ Party is,
and at all times has been, in full compliance with all of the terms and
requirements of each Order to which it, or any of the assets owned or used by
it, is or has been subject; (B) no event has occurred, nor does any circumstance
exist that may constitute or result in (with or without notice or lapse of time)
a violation of or failure to comply with any term or requirement of any Order to
which any ▇▇▇▇▇ Party, or any of the assets owned or used by any ▇▇▇▇▇ Party, is
subject; and (C) no ▇▇▇▇▇ Party has received any notice or other communication
(whether oral or written) from any Governmental Body or any other Person
regarding any actual, alleged, possible, or potential violation of, or failure
to comply with, any term or requirement of any Order to which such ▇▇▇▇▇ Party,
or any of the assets owned or used by such ▇▇▇▇▇ Party, is or has been subject.
4.22 No Agent, Finder or Broker. No ▇▇▇▇▇ Party has any Liability or
obligation, contingent or otherwise, to pay any fees or commissions to any
agent, broker or finder with respect to the transactions contemplated in this
Agreement or the Ancillary Documents.
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4.23 Products.
(a) Product Warranties. Each product manufactured, sold, leased or
delivered by the ▇▇▇▇▇ Parties (or any of them) has been in conformity with all
applicable contractual commitments and all express and implied warranties, and
no ▇▇▇▇▇ Party has Liability (nor is there any basis for any present or future
Proceedings against it or ▇▇▇▇▇▇▇▇ giving rise to any Liability) for replacement
or repair thereof or other damages in connection therewith, subject only to the
reserve for product warranty claims set forth on the face of the Interim Balance
Sheet (rather than in any notes thereto) as adjusted for the passage of time
through the Closing Date in the Ordinary Course of Business of the ▇▇▇▇▇
Parties. No product manufactured, sold, leased or delivered by the ▇▇▇▇▇
Parties is subject to any guaranty, warranty, or other indemnity beyond the
applicable standard terms and conditions of sale or lease. Schedule 4.23(a)
includes copies of the standard terms and conditions of sale or lease for the
▇▇▇▇▇ Parties (containing applicable guaranty, warranty, and indemnity
provisions).
(b) Product Liability. No ▇▇▇▇▇ Party has Liability (nor is there any
basis for any present or future Proceedings against it or ▇▇▇▇▇▇▇▇ giving rise
to any Liability) arising out of any injury to individuals or property as a
result of the ownership, possession or use of any product manufactured, sold,
leased or delivered by any of the ▇▇▇▇▇ Parties.
4.24 Real Property.
(a) Owned Real Property. Schedule 4.24(a) lists and describes briefly
all real property that any ▇▇▇▇▇ Party owns. With respect to each such parcel of
owned real property:
(1) the relevant ▇▇▇▇▇ Party has good and marketable title to
the parcel of real property, free and clear of any Encumbrances (other than
Permitted Encumbrances), except as set forth on Schedule 4.24(a)(1);
(2) there are no pending, or to the knowledge of ▇▇▇▇▇, GSAC,
the Subsidiaries and Matrix, Threatened condemnation Proceedings relating to
the property or other matters affecting materially and adversely the current
use, occupancy or value thereof;
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(3) the legal description for the parcel contained in the
deed thereof describes such parcel fully and adequately, the buildings and
improvements are located within the boundary lines of the described parcels of
land, are not in violation of applicable setback requirements, zoning laws and
ordinances (and none of the properties or buildings or improvements thereon
are subject to "permitted non-conforming use" or "permitted non-conforming
structure" classifications), and do not encroach on any easement which may
burden the land, and the land does not serve any adjoining property for any
purpose inconsistent with the use of the land, and the property is not located
within any flood plain or subject to any similar type restriction for which
any permits or licenses necessary to the use thereof have not been obtained;
(4) except for those environmental permits expressly
referred to in the Environmental Work Plan as having been received or applied
for by ▇▇▇▇▇ after the Effective Date, all facilities have received all
Governmental Authorizations required in connection with the ownership or
operation thereof and have been operated and maintained in accordance with all
applicable Legal Requirements;
(5) there are no leases, subleases, licenses, concessions
or other agreements, written or oral, granting to any other Person the right
of use or occupancy of any portion of the parcel of real property;
(6) there are no outstanding options or rights of first
refusal to purchase the parcel of real property, or any portion thereof or
interest therein, other than the Broad Street Property Agreement and the
Fayetteville Road Property Agreement described in Section 6.17;
(7) there are no Persons (other than ▇▇▇▇▇) or Governmental
Bodies in possession of the parcel of real property, other than tenants under
any leases disclosed in Schedule 4.24(a) who are in possession of space to
which they are entitled;
(8) all facilities located on the parcel of real property
are supplied with utilities and other services necessary for the operation of
such facilities, including gas, electricity,
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water, telephone, sanitary sewer, and storm sewer, all of which services are
adequate in accordance with all applicable Legal Requirements and are provided
via public roads or via permanent, irrevocable, appurtenant easements
benefitting the parcel of real property; and
(9) each parcel of real property abuts on and has direct
vehicular access to a public road, or has access to a public road via a
permanent, irrevocable, appurtenant easement benefitting the parcel of real
property, and access to the property is provided by paved public right-of-way
with adequate curb cuts available.
(b) Leased Real Property. Schedule 4.24(b) lists and describes
briefly all real property leased or subleased to any ▇▇▇▇▇ Party (and all
related lease and sublease agreements), and also identifies the leased or
subleased properties for which title insurance policies are to be procured in
accordance with Section 64. ▇▇▇▇▇ has delivered to ▇▇▇▇▇▇▇▇ correct and complete
copies of the leases and subleases listed in Schedule 4.24(b), as amended. With
respect to each lease and sublease agreement listed in Schedule 4.24(b):
(1) there are no disputes, oral agreements, or forbearance
programs in effect as to the lease or sublease;
(2) the relevant ▇▇▇▇▇ Party has not assigned, transferred,
conveyed, mortgaged, deeded in trust or encumbered any interest in the
leasehold or subleasehold;
(3) all facilities leased or subleased thereunder have
received all approvals of Governmental Authorities (including licenses and
permits) required in connection with the operation thereof and have been
operated and maintained in accordance with all Legal Requirements;
(4) all facilities leased or subleased thereunder are
supplied with utilities and other services necessary for the operation of said
facilities; and
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(5) to the knowledge of ▇▇▇▇▇, GSAC, the Subsidiaries and
Matrix, the owner of the facility leased or subleased has good and
marketable title to the parcel of real property, free and clear of any
Encumbrance, except for installments of special assessments not yet
delinquent and recorded easements, covenants, and other restrictions which
do not materially impair the current use, occupancy, or value, or the
marketability of title, of the property subject thereto.
4.25 Similar Business Ownership. Except as set on Schedule 4.25,
neither GSAC, Matrix, any of its Affiliates other than ▇▇▇▇▇, nor any officer,
director or employee of ▇▇▇▇▇, GSAC, Matrix or such Affiliates, nor any family
member of any of them, (a) owns, directly or indirectly, any interest in, or is
an officer, director or principal of, any corporation, partnership,
proprietorship, association or other entity which is engaged in a business
similar to that of any ▇▇▇▇▇ Party, which has conducted any business of any type
whatsoever with any ▇▇▇▇▇ Party, or which is a party to any contract or
agreement to which any ▇▇▇▇▇ Party is a party or to which it may be bound, (b)
has directly or indirectly engaged in any transaction with any ▇▇▇▇▇ Party,
except transactions inherent in the capacity of such person as an officer,
director or employee, or (c) owns, directly or indirectly, in whole or in part,
any property, assets or rights, real, personal or mixed, tangible or intangible,
which are associated with or necessary for the use, operation or conduct of any
of the businesses, assets or operations of any ▇▇▇▇▇ Party.
4.26 Status of Contracts and Leases. Each of the WIP Contracts, the
Other Work-in-Process Contracts, the Other Agreements, the Plate Roll Contract,
the Corrosion Specialties Contract, and the other contracts and agreements
listed on Schedule 4.13 (collectively, the "▇▇▇▇▇ Agreements"), constitutes a
legal, valid, binding and enforceable obligation of the parties thereto and is
in full force and effect, and except for those ▇▇▇▇▇ Agreements which by their
terms shall expire prior to the Closing Date or are, with the prior written
consent of ▇▇▇▇▇▇▇▇, otherwise terminated prior to the Closing Date in
accordance with the provisions thereof, the transactions contemplated in this
Agreement shall not have a material adverse effect on the ▇▇▇▇▇ Agreements, and
they shall continue in full force and effect thereafter, in each case without
breaching the terms thereof or resulting in the forfeiture or impairment of any
rights thereunder, and without the consent, approval or act of, or the making of
any filing with, any other Person. Each ▇▇▇▇▇ Party has fulfilled and per-
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formed in all material respects its obligations under each of ▇▇▇▇▇ Agreements,
and the ▇▇▇▇▇ Parties are not in, or alleged to be in, breach or default under,
nor is there or is there alleged to be any basis for termination of, any of the
▇▇▇▇▇ Agreements and, to the knowledge of ▇▇▇▇▇, GSAC, the Subsidiaries and
Matrix, no other party to any of the ▇▇▇▇▇ Agreements has breached or defaulted
thereunder, and no event has occurred and no condition or state of facts exists
which, with the passage of time or the giving of notice or both, would
constitute such a default or breach by ▇▇▇▇▇ or, to the knowledge of ▇▇▇▇▇,
GSAC, the Subsidiaries and Matrix, by any such other party. No ▇▇▇▇▇ Party is
currently renegotiating any of the ▇▇▇▇▇ Agreements or paying liquidated damages
in lieu of performance thereunder. None of the ▇▇▇▇▇ Agreements contains terms
unduly burdensome or harmful to any ▇▇▇▇▇ Party. True and complete copies of
each of the ▇▇▇▇▇ Agreements have heretofore been delivered to ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇ Tanks by ▇▇▇▇▇. No party has repudiated any provision of any ▇▇▇▇▇
Agreement, and there are no existing disputes between ▇▇▇▇▇ and the other
parties thereto.
4.27 Studies. ▇▇▇▇▇ has delivered to ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks
copies of all engineering studies, environmental impact reports or assessments
and other reports and studies that are material to the businesses of the ▇▇▇▇▇
Parties.
4.28 Taxes; Tax Returns; Tax Elections.
(a) Definition of Tax and Tax Return. The term "Tax" as used herein
shall mean any taxes, however denominated, including income tax, capital gains
tax, value-added tax, sales tax, property tax, gift tax, estate tax, capital
stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, sales, use, transfer, registration, alternative or
add-on minimum, estimated, or other tax of any kind whatsoever and any related
charge or amount (including any fine, penalty, interest or addition to tax),
imposed, assessed or collected by or under the authority of any Governmental
Body or payable pursuant to any tax-sharing agreement or any other arrangement
relating to the sharing or payment of any such tax, levy, assessment, tariff,
duty, deficiency or fee, including any interest, penalty, or addition thereto,
whether disputed or not. The term "Tax Returns" as used herein shall mean any
return (including any information return), report, declaration of estimated
Taxes, statement, schedule, notice, form, or other document or information filed
with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection
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with the determination, assessment, collection, or payment of any Tax or in
connection with the administration, implementation, or enforcement of or
compliance with any Legal Requirement relating to any Tax.
(b) Tax Returns. Each ▇▇▇▇▇ Party has prepared, signed and filed all
Tax Returns required to be filed prior to the date hereof. Included in Schedule
4.28 are copies of all Tax Returns relating to income and franchise Taxes filed
by the ▇▇▇▇▇ Parties since 1994. All Tax Returns were correct and complete in
all respects, and the ▇▇▇▇▇ Parties have timely paid or accrued all Taxes or
installments thereof of every kind and nature whatsoever which were due and
owing on Tax Returns or which were or are otherwise due and owing under all
applicable Legal Requirements for any periods for which Tax Returns were due,
whether or not reflected on the Tax Returns. The provision for Taxes in the
Acquisition Balance Sheet is sufficient for the payment of all Taxes
attributable to all periods ended on or before May 31, 1998, and adequate
accruals have been made by the ▇▇▇▇▇ Parties for all liabilities for Taxes
accruing since the date of the Acquisition Balance Sheet. There are no
Proceedings, investigations or Claims now pending, nor, to the knowledge of
▇▇▇▇▇, GSAC, the Subsidiaries and Matrix, proposed against any ▇▇▇▇▇ Party, nor
are there any matters under discussion with the IRS, or any other Governmental
Body, relating to any Taxes or assessments, or any Claims or deficiencies with
respect thereto. The federal income Tax Returns of the ▇▇▇▇▇ Parties have not
been audited by the IRS or relevant state authorities, except as set forth on
Schedule 4.28(b).
(c) Tax Basis and Tax Attributes. Schedule 4.28(c) contains accurate
and complete description of the ▇▇▇▇▇ Parties' respective basis in their assets.
The current and accumulated earnings and profits of the ▇▇▇▇▇ Parties, its tax
carryovers and tax elections are described in Schedule 4.28(c). Except as set
forth on Schedule 4.28, the ▇▇▇▇▇ Parties have no net operating losses, or other
tax attributes presently subject to limitation under sections 382, 383 or 384 of
the Code.
(d) Tax Elections. The ▇▇▇▇▇ Parties are not United States real
property holding corporations within the meaning of section 897(c)(2) of the
Code during the applicable period specified in section 897(c)(1)(A)(ii) of the
Code, and ▇▇▇▇▇▇▇▇ is not required to withhold tax on the
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purchase of the Assets by reason of section 1445 of the Code. Neither GSAC nor
Matrix is a "foreign person" within the meaning of section 1445 of the Code. The
▇▇▇▇▇ Parties are not "consenting corporations" under section 341(f) of the
Code. The ▇▇▇▇▇ Parties have not agreed, nor are they required to make, any
adjustment under section 481(a) of the Code by reason of a change in accounting
method or otherwise.
(e) Withholdings. Each ▇▇▇▇▇ Party has withheld proper and accurate
amounts from its employees in full and complete compliance with the Tax
withholding provisions of the Code and other applicable Legal Requirements, and
has filed proper and accurate federal, foreign, state and local Tax Returns and
reports for all years and periods (and portions thereof) for which any Tax
Returns were due with respect to employee income, income Tax withholding,
withholding Taxes, social security taxes and unemployment Taxes. All payments
due from any ▇▇▇▇▇ Party on account of employee Tax withholdings, including
income Tax withholdings, social security Taxes or unemployment Taxes in respect
to years and periods (and portions thereof) ended on or prior to the date hereof
were paid prior to such date on or before their due date.
(f) Waivers of Statute of Limitations. Except as set forth on
Schedule 4.28(f), the ▇▇▇▇▇ Parties have not waived any statute of limitations
in respect of Taxes or agreed to any extension of time with respect to any Tax
assessment or deficiency.
(g) Tax Agreements. Except as set forth on Schedule 4.28(g), the
▇▇▇▇▇ Parties are not, nor have they ever been, a party to any tax allocation or
sharing agreement. No ▇▇▇▇▇ Party has any liability for the Taxes of any
corporation or other entity under Treas. Reg. (S)1.1502-6 (or any similar
provision of state, local, or foreign law), as a transferee or successor, by
contract, or otherwise.
4.29 Title to Properties. Except for real property (which is the
subject of Section 4.24), the ▇▇▇▇▇ Parties have good and marketable title to
all of their properties, interests in properties and assets, tangible and
intangible, owned or used by them in the business of the ▇▇▇▇▇ Parties
(excluding leased properties) including all of their vehicles, equipment,
furniture and fixtures.
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Except as set forth in Schedule 4.29, all such properties, interest in
properties and assets of the ▇▇▇▇▇ Parties are free and clear of all
Encumbrances (other than Permitted Encumbrances).
4.30 Contract Price; ▇▇▇▇▇▇▇▇; Customer Offsets. Exhibit B attached
---------
hereto sets forth a correct and complete listing, by WIP Contract, of the
respective Contract Price and ▇▇▇▇▇▇▇▇ through April 30, 1999, with respect to
all of the WIP Contracts. No customer under any WIP Contract has notified any
▇▇▇▇▇ Party that it intends to withhold or otherwise deduct any amounts that are
or may be owing by that customer to that ▇▇▇▇▇ Party or to ▇▇▇▇▇▇▇▇ following
the Closing, on account of or as a set off against any damages incurred by, or
indebtedness of that ▇▇▇▇▇ Party owing to, that customer prior to the Closing.
Except as set forth on Exhibit B, no such customer has prepaid any ▇▇▇▇▇ Party
---------
prior to the Closing for goods or services to be delivered or performed by any
▇▇▇▇▇ Party or ▇▇▇▇▇▇▇▇ following the Closing.
4.31 Bank Accounts. Included as Schedule 4.31 is a true and complete
list of the name of each bank, brokerage firm and other financial institution
with which the ▇▇▇▇▇ Parties have a depositary, trading, margin, purchase,
lending, borrowing or similar account, a line of credit, or from which the ▇▇▇▇▇
Parties are authorized to effect loans, or any safe deposit boxes, and the names
of all persons authorized to draw on such accounts, effect such loans or who
have access to such safe deposit boxes.
4.32 ▇▇▇▇▇ Family Claims; Dissolution of Georgia Steel Fabricators.
None of the ▇▇▇▇▇ Parties is currently indebted or otherwise obligated to Sample
▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as trustee of the Sample ▇. ▇▇▇▇▇ 12-30-
76 Trusts B, C and D (collectively, the "Browns"), or to any of their respective
personal representatives, heirs, successors or assigns, or any of them, for any
debts, obligations or liabilities of any nature, including without limitation,
any debts, obligations or liabilities arising under or pursuant to (a) the Stock
Purchase Agreement dated as of February 22, 1994, among Matrix, GSAC, Georgia
Steel Fabricators, Inc. and the Browns, or (b) the two Employment and Non-
Competition Agreements of even date therewith between ▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇
and Sample ▇. ▇▇▇▇▇, respectively (collectively, the "Employment Agreements").
The terms of the Employment Agreements have expired, and the only provisions
thereof which remain
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in effect and enforceable are Sections 4 through 16 inclusive. Georgia Steel
Fabricators Inc. was dissolved by GSAC prior to the date hereof in accordance
with applicable Georgia Legal Requirements, and no ▇▇▇▇▇ Party is currently
indebted or otherwise obligated to any Person for any debts, obligations or
liabilities previously owing by Georgia Steel Contractors, Inc.
4.33 Completeness of Statement; Effect of Representations and
Warranties. No representation or warranty of ▇▇▇▇▇, GSAC or Matrix in this
Agreement contains any untrue statement of a material fact, omits any material
fact necessary to make such representation or warranty, under the circumstances
which it was made, not misleading, or contains any misstatement of a material
fact. ▇▇▇▇▇, GSAC and Matrix have disclosed all adverse facts known to them
relating to the representations and warranties. All representations and
warranties contained in this Section 4 were correct and complete as of the
Effective Date, are correct and complete as of the date of this Agreement and
shall be correct and complete in all material respects (or, with respect to
representations and warranties that are expressly subject to materiality or that
include a specific dollar threshold, in all respects) as of the Closing Date as
though made then with the Closing Date being substituted for the date hereof
throughout this Section 4. Reference to a document, agreement, matter or other
information in one Exhibit or Schedule shall be deemed a reference to such
document, agreement, matter or information in all other Exhibits or Schedules,
but only to the extent the information or facts required to be disclosed with
respect to such other Exhibits or Schedules are manifest from a reading of the
Exhibit or Schedule itself and not from a reading of the agreements or other
documents annexed thereto, referenced therein or that constitute a part thereof.
Nothing in any auditor's report to ▇▇▇▇▇, GSAC or Matrix shall be deemed
adequate to disclose an exception to a representation or warranty made herein.
Without limiting the generality of the foregoing, the mere listing (or inclusion
of a copy) of a document or other item shall not be deemed adequate to disclose
an exception to a representation or warranty made in this Agreement (unless the
representation or warranty has to do with the existence of the document or other
item itself). All of the representations and warranties made by ▇▇▇▇▇, GSAC and
Matrix are made with the knowledge, expectation, understanding and desire that
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks place complete reliance thereon. Neither the
representations and warranties of ▇▇▇▇▇, GSAC and Matrix, nor the indem
nification obligations of ▇▇▇▇▇, GSAC and Matrix, shall be affected, qualified,
modified or deemed
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waived by reason of the fact that ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks knew or should have
known that any representation or warranty is or might be inaccurate in any
respect.
5. Representations and Warranties of ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks.
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks, jointly and severally, hereby represent and warrant
as of the Effective Date and the date of this Agreement to ▇▇▇▇▇, Matrix and
GSAC as follows:
5.1 Corporate Status. ▇▇▇▇▇▇▇▇ Tanks is a corporation duly
incorporated and existing under the laws of the Commonwealth of Kentucky, is in
good standing with the Department of State of the Commonwealth of Kentucky, and
is authorized to transact business in such Commonwealth. ▇▇▇▇▇▇▇▇ is a limited
liability company duly organized and existing under the laws of the State of
Georgia, is in good standing with the Department of State (or its equivalent) to
the State of Georgia, and is authorized to transact business in that State.
They each have, and at all times have had, full corporate power and authority to
own and lease their properties as such properties are now owned and leased and
to conduct their businesses as and where such businesses have and are now being
conducted.
5.2 Authority; Consents; Enforcement; Noncontravention.
(a) Authority of ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks; Binding Effect. This
Agreement has been duly executed and delivered by ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks,
and constitutes the legal, valid and binding obligation of them, enforceable
against them in accordance with its terms. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks have the
absolute and unrestricted right, power, authority and capacity to execute and
deliver this Agreement and to perform their obligations under this Agreement.
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks do not need to give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any Governmental Body
in order to consummate the transactions contemplated in this Agreement.
(b) Noncontravention. Neither the execution and the delivery of
this Agreement or the Ancillary Documents by ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks, nor
their compliance with or the fulfillment of the terms, conditions and provisions
hereof or thereof, will (i) violate any Legal Requirement applicable to them,
any provision of their Articles of Incorporation or Bylaws; or (ii) with notice,
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the passage of time or both, conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, any contract, agreement, lease,
license, instrument, arrangement or commitment to which ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇
Tanks is a party or by which any of its assets or properties are bound, or (iii)
result in the imposition of or creation of any Encumbrance upon or with respect
to any of the assets or properties owned or used by ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks
(other than such Encumbrances (if any) on the Assets as may be created pursuant
to ▇▇▇▇▇▇▇▇'▇ or ▇▇▇▇▇▇▇▇ Tanks' financing of the Purchase Price), or (iv)
require any notice under any agreement, contract, lease, license, instrument, or
other arrangement to which ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks is a party or by which it
is bound or to which any of its assets or properties are subject; or (v) require
the approval, consent, authorization or act of, or the making by ▇▇▇▇▇▇▇▇ or
▇▇▇▇▇▇▇▇ Tanks of any declaration, filing or registration with, any Person.
5.3 No Agent, Finder or Broker. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks have no
Liability or obligation, contingent or otherwise, to pay any fees or commissions
to any agent, broker or finder with respect to the transactions contemplated in
this Agreement.
5.4 [Intentionally Omitted]
5.5 Completeness of Statement; Effect of Representations and
Warranties. No representation or warranty of ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks in this
Agreement contains any untrue statement of a material fact, omits any material
fact necessary to make such representation or warranty, under the circumstances
which it was made, not misleading, or contains any misstatement of a material
fact. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks have disclosed all adverse facts known to them
relating to the representations and warranties. The representations and
warranties of ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks contained in this Section 5 were
correct and complete on the Effective Date, are correct and complete as of the
date of this Agreement and shall be correct and complete in all material
respects as of the Closing Date as though made then with the Closing Date being
substituted for the date hereof throughout this Section 5. All of the
representations and warranties made by ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks are made with
the knowledge, expectation, understanding and desire that ▇▇▇▇▇, Matrix and GSAC
place complete reliance thereon. Neither the representations and warranties of
▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks, nor the indemnification obligations of ▇▇▇▇▇▇▇▇ or
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▇▇▇▇▇▇▇▇ Tanks, shall be affected, qualified, modified or deemed waived by
reason of the fact that ▇▇▇▇▇, Matrix or GSAC knew or should have known that any
representation and warranty is or might be inaccurate in any respect.
5.6 Litigation. There is no action, suit, inquiry, proceeding or
investigation by or before any Governmental Body or by or on behalf of any other
Person pending or, to ▇▇▇▇▇▇▇▇'▇ or ▇▇▇▇▇▇▇▇ Tanks' knowledge, Threatened,
against or involving ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks or any of their Affiliates (i)
which alone or in the aggregate would, if adversely, determined have a material
adverse effect on the ability of ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks to perform its
obligations to ▇▇▇▇▇, Matrix and GSAC under this Agreement and the transactions
contemplated hereby, or (ii) which questions or challenges the validity of this
Agreement or any action taken or to be taken by ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks
pursuant to this Agreement or in connection with the transactions contemplated
hereby.
6. Covenants of the Parties.
6.1 No Negotiation. Until such time, if any, as this Agreement is
terminated pursuant to Section 8, neither ▇▇▇▇▇, GSAC nor Matrix, nor any
representative of ▇▇▇▇▇, GSAC or Matrix, shall, nor shall they permit any of
their Affiliates to, (a) directly or indirectly, entertain, solicit, initiate,
accept or encourage any inquiries, offers or proposals from, discuss or
negotiate with, provide any non-public information to, or consider the merits of
any unsolicited inquiries or proposals from, any Person (other than ▇▇▇▇▇▇▇▇ or
▇▇▇▇▇▇▇▇ Tanks) relating to any transaction involving the sale or lease of the
business or assets (other than in the Ordinary Course of Business of the ▇▇▇▇▇
Parties) of the ▇▇▇▇▇ Parties, or any of the capital stock of the ▇▇▇▇▇ Parties,
or any merger, consolidation, business combination, or similar transaction
involving the ▇▇▇▇▇ Parties, or (b) participate in any discussions or
negotiations regarding, furnish any information with respect to, assist or
participate in, or facilitate in any other manner any effort or attempt by any
Person to do or seek, any of the foregoing. ▇▇▇▇▇, GSAC and Matrix will notify
▇▇▇▇▇▇▇▇ Tanks immediately if any Person makes any proposal, offer, inquiry, or
contact with respect to any of the foregoing.
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6.2 Operations of ▇▇▇▇▇ Parties Pending Closing. ▇▇▇▇▇, GSAC and
Matrix covenant and agree that from the Effective Date through the Closing Date,
without the prior written consent of ▇▇▇▇▇▇▇▇ (which consent will not be
unreasonably withheld), the ▇▇▇▇▇ Parties shall:
(a) continue the business and operations of the ▇▇▇▇▇ Parties
substantially in the same manner as heretofore, not change any of the accounting
principles followed, not undertake any other transactions or enter into any
other contracts, commitments or arrangements other than in the Ordinary Course
of Business of the ▇▇▇▇▇ Parties, use their reasonable best efforts to preserve
the present business and organization of the ▇▇▇▇▇ Parties and to keep available
for the benefit of ▇▇▇▇▇▇▇▇ (without entering into any binding agreement) the
services of their employees, and to preserve for the benefit of ▇▇▇▇▇▇▇▇ the
goodwill of their customers, suppliers and others having business relationships
with them;
(b) not renew, extend, modify, terminate or waive any right under any
of the ▇▇▇▇▇ Agreements, and not enter into, renew, extend, modify, terminate or
waive any right under any other material lease, contract or other instrument,
except in the Ordinary Course of Business of the ▇▇▇▇▇ Parties;
(c) not increase the rate or change the nature of the compensation
payable to any of their employees, except in the Ordinary Course of Business of
the ▇▇▇▇▇ Parties;
(d) not allow any of their assets and properties to be subject to any
Encumbrance (other than Permitted Encumbrances), or to be disposed of outside
the Ordinary Course of Business of the ▇▇▇▇▇ Parties;
(e) except as otherwise provided in Section 4.17, maintain their
existing insurance coverages, subject to variations in amounts required by the
Ordinary Course of Businesses of the ▇▇▇▇▇ Parties;
(f) confer with ▇▇▇▇▇▇▇▇ concerning operational matters of a material
nature;
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(g) otherwise report periodically to ▇▇▇▇▇▇▇▇ concerning the status
of the business, operations and finances of the ▇▇▇▇▇ Parties;
(h) not amend or modify their articles or certificate of
incorporation or bylaws;
(i) maintain their corporate existence and good standing in their
respective state of incorporation and their qualifications as foreign
corporations in the jurisdictions set forth on Schedule 42;
(j) maintain their licenses, permits and franchises, and not take any
action, or refrain from taking any action, which could cause any license, permit
or franchise to be revoked, restricted or suspended;
(k) not authorize for issue or issue additional shares of capital
stock, nor grant any option, warrant or right to purchase or acquire capital
stock of itself;
(l) not declare or pay any dividend, nor, directly or indirectly,
redeem, purchase or otherwise acquire any of its securities;
(m) not make any investment in any other corporation, association,
partnership, joint venture or other business organization;
(n) not make any capital expenditures in excess of $150,000 for any
single item of equipment or other property;
(o) not incur or agree to incur any indebtedness for borrowed money;
(p) maintain all of its properties in good working order and repair
(ordinary wear and tear excepted) and take all steps reasonably necessary to
maintain its assets (exclusive of the Excluded Assets other than the Broad
Street Property and the Fayetteville Road Property) for ▇▇▇▇▇▇▇▇'▇ use and
benefit;
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(q) not enter into any contract, commitment or arrangement to merge,
combine or consolidate with or into any other corporation or entity, or enter
into any other contract, commitment or arrangement to sell, transfer, or dispose
of any of its assets to any person or entity other than in the Ordinary Course
of Business;
(r) not increase the quantities of inventories, raw materials or
spare parts maintained by the ▇▇▇▇▇ Parties to levels that are materially
greater than the levels historically maintained by the ▇▇▇▇▇ Parties in the
Ordinary Course of Business;
(s) operate their businesses in compliance in all material respects
with all Legal Requirements, Governmental Authorizations and Orders applicable
to them; and
(t) not enter into any agreement or commitment to do any of the
foregoing.
6.3 Investigation of ▇▇▇▇▇ by ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks. From the
Effective Date through the Closing, Matrix, GSAC and ▇▇▇▇▇ shall afford to the
officers, employees and authorized representatives of ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇
Tanks (including independent public accountants and attorneys) complete access
to the offices, properties, employees and business and financial records
(including computer files, retrieval programs and similar documentation and such
access and information that may be necessary in connection with an environmental
audit) of the ▇▇▇▇▇ Parties to the extent ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks shall deem
necessary or desirable, and shall furnish to ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks or
their authorized representatives such additional information concerning the
assets, properties and operations of the ▇▇▇▇▇ Parties as shall be reasonably
requested, including all such information as shall be reasonably necessary or
appropriate to enable ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Tanks or their representatives to
verify the accuracy of the representations and warranties contained in this
Agreement, to verify that the covenants of ▇▇▇▇▇, GSAC and Matrix contained in
this Agreement have been complied with, and to determine whether the conditions
set forth in Section 7.1 have been satisfied. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks agree
that such investigation shall be conducted in such a manner as will not
interfere unreasonably with the operations of ▇▇▇▇▇, GSAC or Matrix. No
investigation made by ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Tanks or their representatives
hereunder shall affect the representations and warranties of ▇▇▇▇▇, GSAC and
Matrix made in this Agreement.
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6.4 Title Insurance; Surveys. ▇▇▇▇▇ will obtain, at its cost and
expense, and deliver to ▇▇▇▇▇▇▇▇ within five business days after the Effective
Date, commitments to issue the following title insurance, meeting the following
requirements, at the Closing:
(a) Parcels of Real Estate. With respect to each parcel of real
estate that the ▇▇▇▇▇ Parties own (each, a "Parcel"), a commitment to issue an
ALTA Owner's Policy of Title Insurance (Form 10/17/92 or its nearest equivalent
if a Parcel is located in a jurisdiction in which Form 10/17/92 is not
available) (each a "Commitment"), which Commitments shall be issued by a title
insurer reasonably satisfactory to ▇▇▇▇▇▇▇▇, committing to insure the interest
of ▇▇▇▇▇ in each Parcel for such amount as ▇▇▇▇▇▇▇▇ shall reasonably determine
to be the fair market value of the interest in such Parcel (including in all
improvements).
(b) State of Title. Within ten business days after the receipt by
▇▇▇▇▇▇▇▇ of a Commitment and of the Survey (as defined below) for a Parcel,
▇▇▇▇▇▇▇▇ shall notify ▇▇▇▇▇ of any exceptions to title contained in that
Commitment or shown on that Survey which ▇▇▇▇▇▇▇▇ finds, in its reasonable
discretion, to be unacceptable to ▇▇▇▇▇▇▇▇. Thereafter, ▇▇▇▇▇ shall within five
business days notify ▇▇▇▇▇▇▇▇ of its intention to take such action as may be
necessary to remove the exceptions objected to from the Commitment or the
Survey, as applicable, and an endorsement to that Commitment shall be issued or
the Survey amended, at least five business days prior to the Closing deleting
the exceptions so objected to from that Commitment or correcting the Survey
items objected to. All exceptions to title or survey issues as to each Parcel
as to which ▇▇▇▇▇▇▇▇ shall not object (or shall subsequently withdraw its
objection) shall be deemed to be "Permitted Exceptions."
(c) Further Commitment Requirements. In addition to the matters set
forth in (a) and (b) above, each Commitment shall further commit (i) to insure
title to all recorded easements benefitting that Parcel, (ii) to issue an ALTA
Endorsement 3.1 (or equivalent) as to that Parcel, and (iii) to issue a standard
"non-imputation" endorsement.
(d) Surveys. With respect to each Parcel, ▇▇▇▇▇, Matrix and GSAC
will at their expense, within five business days after the Effective Date,
obtain and deliver to ▇▇▇▇▇▇▇▇ a survey by a licensed surveyor reasonably
acceptable to ▇▇▇▇▇▇▇▇, certified to ▇▇▇▇▇▇▇▇ and to the title
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company insuring that Parcel and conforming to the Minimum Detail Requirements
for ALTA/ACSM Land Surveys (Class A Survey) including all items contained in
items 11, 2, 3, 4, 6, 8 and 10 (each a "Survey"). All Surveys shall be updated
to conform to the deletion or correction of survey issues as described in
Section 6.4(b).
(e) Title at Closing. At the Closing, the state of title to each
Parcel shall be such that the title company issuing the Commitment for that
Parcel shall be prepared to and shall issue a title policy on the form mandated
by Section 6.4(a), insuring the interest of the ▇▇▇▇▇ as a valid fee simple
interest, (i) subject only to the Permitted Exceptions, (ii) having deleted
therefrom the standard exceptions for parties in possession, survey, rights of
way and easements not of record and mechanics and materialmans liens, (iii)
insuring that the Parcel as described in the policy is the same property as is
described in the Survey for that Parcel, (iv) insuring the contiguity of the
Parcel if the Parcel consists of more than one tract or lot, and (v) insuring
direct and unencumbered pedestrian and vehicular access to the Parcel from each
street or roadway adjacent to the Parcel.
6.5 Lien and Litigation Searches. ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks may (in
their discretion) obtain, at their cost and expense, a Uniform Commercial Code
security interest search report, a tax lien search report and a litigation
search report, all dated within five days of the date of delivery thereof, with
an update within three days of the Closing Date, showing that there are no
Encumbrances against the assets, properties or rights of the ▇▇▇▇▇ Parties,
other than those disclosed on Schedules 4.24(a)(1) and 4.29, and no litigation,
except as disclosed on Schedule 4.21.
6.6 Transition of ▇▇▇▇▇. ▇▇▇▇▇, GSAC and Matrix covenant with
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks to cooperate with ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks to
effect the smooth transition of the control and operation of the Assets from
▇▇▇▇▇ to ▇▇▇▇▇▇▇▇, as contemplated herein, including the retention of the
customers of the ▇▇▇▇▇ Parties, by such means that ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks
may reasonably request. ▇▇▇▇▇, GSAC and Matrix covenant to cooperate with
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks in providing all information required hereunder and
access thereto and whatever is required to carry out the purposes and intent of
the transactions contemplated in this Agreement.
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6.7 Further Assurances. Each of the Parties hereto shall, at any
time, and from time to time, either before or after the Closing Date, upon the
request of the appropriate Party, do, obtain, execute, acknowledge and deliver,
or will cause to be done, obtained, executed, acknowledged and delivered, all
such further acts, consents, assignments, transfers, conveyances, and assurances
as may be reasonably required to complete the transactions contemplated in this
Agreement in compliance with applicable Legal Requirements and all ▇▇▇▇▇
Agreements. After the Closing Date, ▇▇▇▇▇, Matrix and GSAC shall, and shall use
their reasonable best efforts to assure that any necessary third party shall,
execute such documents and do such other acts and things as ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇
Tanks may reasonably require for the purpose of giving to ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
Tanks and the Subsidiaries the full benefit of all the provisions of this
Agreement and as may be reasonably required to complete the transactions
contemplated in this Agreement.
6.8 Actions of the Parties.
(a) No Actions Constituting a Breach. From the date hereof through
the Closing Date, neither ▇▇▇▇▇, GSAC, Matrix, ▇▇▇▇▇▇▇▇ Tanks nor ▇▇▇▇▇▇▇▇ will
take or knowingly permit to be done anything in the conduct of the business of
the ▇▇▇▇▇ Parties or ▇▇▇▇▇▇▇▇, as the case may be, or otherwise, which would be
in or represent a misrepresentation, breach of warranty or non-fulfillment of
any covenant or agreement on the part of that Party under this Agreement, and
each of the Parties hereto shall cause the deliveries for which such Party is
responsible at the Closing to be duly and timely made.
(b) Notification of Breaches. From the date hereof through the
Closing Date, each Party agrees to promptly notify the other Parties in writing
if such Party becomes aware of any fact or condition that causes or constitutes
a breach by that Party of any of its representations or warranties as of the
date of this Agreement, or if such Party becomes aware of the occurrence after
the date of this Agreement of any fact or condition that would (except as
expressly contemplated by this Agreement) cause or constitute such a breach by
that Party had its representations and warranties been made as of the time of
the occurrence or discovery of such fact or condition. Should any such fact or
condition require any change in the Schedules if the Schedules were dated the
date of the occurrence or discovery of any such fact or condition, Matrix, GSAC
and ▇▇▇▇▇ will promptly deliver to ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks a supplement to
the Schedules specifying such change.
During the same period, each Party agrees to promptly notify the other parties
of the occurrence of any breach of any covenant of that Party in this Agreement
or of the occurrence of any event that may make the satisfaction of the
conditions in Section 7 impossible or unlikely. No disclosure by any Party
pursuant to this Section 6.8(b), nor any supplement of the Schedules by Matrix,
GSAC or ▇▇▇▇▇ as contemplated above, however, shall be deemed to amend or
supplement the Schedules for purposes of the conditions to Closing provided in
Section 7, to prevent or cure any misrepresentation or breach of a warranty or
covenant, or to otherwise amend or supplement any of the conditions to Closing
provided in Section 7.
6.9 Compliance With Conditions. Each Party hereto agrees to
cooperate fully with the other Parties, and shall use its reasonable best
efforts to cause the conditions precedent for which such Party is responsible to
be fulfilled. Each Party hereto further agrees to use its reasonable best
efforts, and act in good faith, to consummate this Agreement and the
transactions contemplated herein as promptly as possible.
6.10 Consents; Actions. Subject to the terms and conditions of this
Agreement, the Parties hereto undertake and agree to (a) in good faith, take all
steps that are within their power to cause to be fulfilled those of the
conditions precedent to each Party's obligations to consummate the transactions
contemplated herein as are dependent upon their actions; and (b) use their
reasonable best efforts to take, or cause to be taken, all action and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws to consummate and make effective the transactions contemplated and not to
take any actions that would be inimical to such result.
6.11 Accounts Receivable. Following the Closing, ▇▇▇▇▇▇▇▇ agrees to
reasonably cooperate with ▇▇▇▇▇, at ▇▇▇▇▇'▇ expense, in its efforts to collect
all amounts owing by third-Persons under the Accounts Receivable that are
included in the Excluded Assets to be retained by ▇▇▇▇▇. To the extent ▇▇▇▇▇▇▇▇
receives any amounts from third-Persons on account of any of those Accounts
Receivable at any time after the Closing, ▇▇▇▇▇▇▇▇ agrees to promptly remit the
same to ▇▇▇▇▇. For the avoidance of doubt, the Parties agree that in the event
any amounts are received by ▇▇▇▇▇▇▇▇ following the Closing on account of any one
or more WIP Contracts under which those Accounts Receivable remain owing to
▇▇▇▇▇, such amounts shall first be deemed to be a payment
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by the relevant customer on such Accounts Receivable owing to ▇▇▇▇▇, with any
excess amounts being deemed to be a payment on amounts then owing to ▇▇▇▇▇▇▇▇,
in each case unless and to the extent the relevant customer notifies ▇▇▇▇▇▇▇▇ in
writing that it is disputing the indebtedness to ▇▇▇▇▇, or that the amounts
remitted by that customer are specifically intended as a payment of amounts
owing to ▇▇▇▇▇▇▇▇ for services performed or products delivered following the
Closing. ▇▇▇▇▇▇▇▇ shall have no further obligation to assist ▇▇▇▇▇ in the
collection of any Account Receivable which is disputed by the relevant customer
or that has otherwise become more than 90 days past due. Notwithstanding the
foregoing, ▇▇▇▇▇ shall be solely responsible for the collection or non-
collection of any Accounts Receivable that are included in the Excluded Assets.
6.12 Matrix's Guaranty. Matrix hereby guarantees unconditionally and
absolutely to ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks: (a) the due and punctual payment and
performance by ▇▇▇▇▇ and GSAC of all obligations of ▇▇▇▇▇ and/or GSAC provided
for in this Agreement that are to be paid or performed by ▇▇▇▇▇ and/or GSAC on
or prior to the Closing Date; and (b) the due and punctual payment and
performance by ▇▇▇▇▇ and GSAC of all obligations of ▇▇▇▇▇ and/or GSAC provided
for in this Agreement or in any Ancillary Document, whether such payment or
performance is required before or after the Closing. This is a guarantee of
payment and performance and not of collection, and this guarantee shall survive
any termination of this Agreement to the extent of any continuing obligations of
▇▇▇▇▇ or GSAC hereunder or under any Ancillary Document. The obligations of
Matrix hereunder shall remain in full force and effect without regard to, and
shall not be affected or impaired by, any of the following, any of which may be
taken without the consent of, or notice to, Matrix: (a) any exercise, non-
exercise or waiver by ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks of any right or privilege under
this Agreement or any Ancillary Document (provided, that any non-performance by
▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks that would be a defense to ▇▇▇▇▇'▇ or GSAC's
performance under this Agreement or any Ancillary Document shall constitute a
defense to Matrix under this Section 6.12); (b) any bankruptcy, insolvency,
reorganization, dissolution, liquidation or other like proceeding relating to
▇▇▇▇▇, GSAC or Matrix, whether or not Matrix shall have had knowledge of any of
the foregoing; (c) any permitted assignment or other transfer of this Agreement;
and (d) the invalidity or unenforceability of this Agreement or any Ancillary
Document, or any provision hereof or thereof. Matrix unconditionally waives all
demands, protests and notices of
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protests, any right to require ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks to first proceed
against ▇▇▇▇▇ or GSAC, and any and all guarantor's defenses, whether general or
otherwise.
6.13 Certain Employee Matters. Notwithstanding any other provision
of this Agreement to the contrary, the Parties agree as follows:
(a) Accrued Vacation.
(1) With respect to all persons who are or were employed by
any of the ▇▇▇▇▇ Parties as of or at any time prior to the Closing other than
(y) "field" employees and (z) the employees that are identified by ▇▇▇▇▇▇▇▇
Tanks as not to be offered employment following the Closing as contemplated in
Subsection (e) below (collectively, the "Non-Field Employees"): (a) ▇▇▇▇▇,
Matrix and GSAC shall be solely responsible for the costs of all vacation of
such Non-Field Employees accrued under the vacation policies of the ▇▇▇▇▇
Parties in effect as of or at any time prior to the Closing, based upon their
service with the relevant ▇▇▇▇▇ Party at any time prior to January 1, 1999,
including without limitation, all vacation time to be taken in 1999 for
service to the ▇▇▇▇▇ Parties during 1998; and (b) ▇▇▇▇▇▇▇▇ shall be solely
responsible for the costs of all vacation of such Non-Field Employees accrued
based upon their service for the relevant ▇▇▇▇▇ Party during the period from
January 1, 1999 through the Closing, including without limitation, all
vacation time to be taken in 2000 for service during 1999. Prior to the date
hereof, the Parties mutually agreed upon the amount of accrued vacation of the
Non-Field Employees for which ▇▇▇▇▇, Matrix and GSAC are responsible as
contemplated above, and such amount was deducted from the Purchase Price (the
deduction being already reflected in the amount set forth in Section 2.1). In
light of that deduction, all such accrued vacation shall be and remain an
Assumed Obligation and not a Retained Obligation. The Parties agree that any
accrued vacation of any of the employees that are identified by ▇▇▇▇▇▇▇▇ Tanks
as not to be offered employment following the Closing as contemplated in
Subsection (e) below, whether of the type described in Subclause (a) or (b),
above, shall remain a Retained Obligation for all purposes under this
Agreement, and shall not be the subject of a deduction from the Purchase Price
as contemplated above.
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(2) With respect to all persons who are or were employed by
any of the ▇▇▇▇▇ Parties as of or at any time prior to the Closing as "field"
employees (collectively, the "Field Employees"), ▇▇▇▇▇, Matrix and GSAC shall
be solely responsible for, and hereby agree to pay and discharge, and to
defend, indemnify and hold harmless the Subsidiaries, ▇▇▇▇▇▇▇▇ Tanks and
▇▇▇▇▇▇▇▇ from and against, the costs of any vacation of such Field Employees
accrued under the vacation policies of the ▇▇▇▇▇ Parties in effect as of or at
any time prior to the Closing (including without limitation, any amounts owed
to such Field Employees and any amounts required under applicable Legal
Requirements to be withheld from such employees and remitted to any
Governmental Body): (a) based upon their service for the relevant ▇▇▇▇▇ Party
at any time during the period from January 1, 1999 through the Closing (it
being the belief of ▇▇▇▇▇, Matrix and GSAC that no such vacation has or will
accrue for the Field Employees for that period under the policies of the ▇▇▇▇▇
Parties or applicable Legal Requirements); and (b) based upon the service of
the Field Employees for the relevant ▇▇▇▇▇ Party at any time prior to January
1, 1999.
(b) Severance, Sick Pay and Bonuses. ▇▇▇▇▇, Matrix and GSAC shall be
solely responsible for, and shall pay when due and defend, indemnify and hold
harmless ▇▇▇▇▇▇▇▇ Tanks and ▇▇▇▇▇▇▇▇ from and against: (i) any severance
benefits, termination benefits or other similar payments or benefits now or
hereafter owing under the policies of the ▇▇▇▇▇ Parties in effect immediately
prior to the Closing to any of the employees of the ▇▇▇▇▇ Parties who are
identified by ▇▇▇▇▇▇▇▇ Tanks as not to be offered employment following the
Closing as contemplated in Subsection (e) below, and to any employees who are
offered such employment but who decline to accept the same (it being understood
by the Parties that ▇▇▇▇▇▇▇▇ shall assume responsibility for any such severance
benefits, termination benefits and other similar payments or benefits that may
now or hereafter be owing to any employees of the ▇▇▇▇▇ Parties that are
actually employed by ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks following the Closing, and the
same shall constitute Assumed Obligations); (ii) any bonuses or other incentive
compensation (over and above their base salary or wages), to which any past or
present employee of the ▇▇▇▇▇ Parties is entitled as of the Closing, or to which
they may become entitled following the Closing by reason of their service to the
▇▇▇▇▇ Parties prior to the Closing, by reason of the performance (financial or
otherwise) of the ▇▇▇▇▇ Parties prior to the Closing (it being the belief of
▇▇▇▇▇, Matrix and GSAC that any such bonuses and incentive
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compensation payments may be made or made available, or withheld, by the ▇▇▇▇▇
Parties in their sole and absolute discretion and without obligation to those
employees); and (iii) any sick pay or sick leave benefits (including without
limitation, any short term disability benefits) to which any past or present
employee of the ▇▇▇▇▇ Parties is entitled as of the Closing, or to which they
may become entitled following the Closing by reason of their service to the
▇▇▇▇▇ Parties prior to the Closing, in either case in excess of the sick pay or
sick leave benefits to which they may become entitled under the policies of
▇▇▇▇▇▇▇▇ Tanks and its Affiliates in effect following the Closing. ▇▇▇▇▇, Matrix
and GSAC shall have no obligation hereunder for any such bonuses, other
incentive compensation or sick leave or sick pay benefits that may accrue
following the Closing by reason of the service of any employees of ▇▇▇▇▇▇▇▇
following the Closing. ▇▇▇▇▇▇▇▇ Tanks agrees that it shall not, and shall not
permit ▇▇▇▇▇▇▇▇ to, pay any discretionary bonuses or incentive compensation to
any employees of the ▇▇▇▇▇ Parties by reason of their service to the ▇▇▇▇▇
Parties prior to the Closing, or by reason of the performance (financial or
otherwise) of the ▇▇▇▇▇ Parties prior to the Closing.
(c) 401(k) Plan Participation. Matrix agrees that it shall,
consistent with the last sentence of Section 2.5(b), make all contributions to
its 401(k) plan required of it, GSAC or any ▇▇▇▇▇ Party for the benefit of the
employees of the ▇▇▇▇▇ Parties participating therein, for all periods through
the Closing Date, shall (and shall cause GSAC and each of the ▇▇▇▇▇ Parties to)
vest 100% of all such employer contributions to its 401(k) plan for the benefit
of the employees of the ▇▇▇▇▇ Parties, and shall offer to all such employee
participants the options available under the terms of that 401(k) plan, which
include lump sum distributions and, depending upon amounts, continued investment
in the Matrix 401(k) plan. Matrix agrees to give each employee of the ▇▇▇▇▇
Parties who is a participant in the Matrix 401(k) plan, and who, as of the
Closing, has an outstanding loan owing to their 401(k) plan account, reasonable
prior notice that their loan must be repaid by them to their account prior to
the Closing in order to avoid a deemed distribution to them of such loan amounts
from their accounts. ▇▇▇▇▇, Matrix and GSAC acknowledge that ▇▇▇▇▇▇▇▇ Tanks and
▇▇▇▇▇▇▇▇ do not intend to permit any such plan participant to roll his or her
401(k) plan account balances into the 401(k) plan of ▇▇▇▇▇▇▇▇ Tanks until such
time as all previous loans taken from their Matrix 401(k) plan accounts have
been repaid.
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(d) Employees Currently Under Disability. Matrix agrees to cause the
benefits of its long term disability plan and workers compensation insurance
coverages (as applicable) in effect prior to the Closing for the employees of
the ▇▇▇▇▇ Parties, to be made available following the Closing to all employees
of ▇▇▇▇▇▇▇▇ (who were formerly employees of any of the ▇▇▇▇▇ Parties) who are
off from work as of the Closing due to a disability or other injury, until such
time as those employees are no longer disabled or eligible for workers
compensation benefits under applicable Legal Requirements and Matrix's workers
compensation insurance policies. The covenant of Matrix in the preceding
sentence shall include, without limitation, all employees that are terminated by
the ▇▇▇▇▇ Parties as contemplated in (e), below, and that may be hired by
▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks following the Closing.
(e) Termination of Certain Employees. The ▇▇▇▇▇ Parties shall, and
Matrix and GSAC agree to cause the ▇▇▇▇▇ Parties to, prior to the Closing,
terminate all of the employees of the ▇▇▇▇▇ Parties immediately prior to the
Closing. ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks agrees to offer employment to all such
terminated employees following the Closing, based on job responsibilities
comparable to their previous positions with the ▇▇▇▇▇ Parties (but otherwise on
terms that are satisfactory to ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks (as applicable)),
other than those employees who are identified by ▇▇▇▇▇▇▇▇ Tanks, in a notice
delivered to Matrix at least ten (10) days prior to the anticipated Closing
Date, as not to be offered such employment following the Closing. ▇▇▇▇▇, Matrix
and GSAC shall be solely responsible for communicating to (and hereby agree to
communicate to) all employees of the ▇▇▇▇▇ Parties all such notices regarding
their termination or otherwise that are required by applicable Legal
Requirements (including without limitation, sending to all employees the notice
required under COBRA), and shall provide whatever assistance as Matrix elects,
or the ▇▇▇▇▇ Parties are otherwise required pursuant to Legal Requirements to
make or provide, to assist such designated employees. ▇▇▇▇▇, Matrix and GSAC
agree to use their commercially reasonable efforts from and after the date
hereof to obtain from all employees identified by ▇▇▇▇▇▇▇▇ Tanks as not to be
offered employment following the Closing, a general release of claims in a form
reasonably satisfactory to ▇▇▇▇▇▇▇▇ Tanks, releasing ▇▇▇▇▇▇▇▇ Tanks and ▇▇▇▇▇▇▇▇
of and from any debts, obligations and liabilities of any nature to those
employees. The Parties further agree that Matrix shall initially pay all
premium payments that would otherwise be owing by the Field Employees who accept
the offer of employment by ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks as contemplated above, for
continued COBRA medical coverage under the Benefit Plans of Matrix
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throughout the ninety (90) day period immediately following their termination by
the relevant ▇▇▇▇▇ Party (or throughout such shorter period following that
termination as they shall remain employees of ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks (as
applicable)). Following their payment of such premium payments, Matrix shall
either ▇▇▇▇ the total amount of such premium payments to the relevant Field
Employees (with a copy to ▇▇▇▇▇▇▇▇) or shall ▇▇▇▇ those premium payments to
▇▇▇▇▇▇▇▇. If billed to a Field Employee, ▇▇▇▇▇▇▇▇ shall promptly reimburse that
employee for the premium payments actually paid by him or her to Matrix for that
period. If billed to ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ shall remit and pay to Matrix the amount
of such premium payments within thirty (30) days after ▇▇▇▇▇▇▇▇'▇ receipt of the
Matrix invoice.
(f) Medical Coverage. With respect to terminated employees of the
▇▇▇▇▇ Parties that are offered employment by ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks as
contemplated in (e) above, ▇▇▇▇▇▇▇▇ Tanks shall use its commercially reasonable
efforts to attempt to have such employees made eligible for inclusion in the
health and medical Benefit Plans of ▇▇▇▇▇▇▇▇ Tanks based upon their prior
service with the ▇▇▇▇▇ Parties.
6.14 Books and Records. Matrix, GSAC, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ agree to
retain, for a period of seven (7) years after the Closing Date, any and all
books and records (hard copy, electronic or otherwise) related to the ▇▇▇▇▇
Parties and their respective businesses for all periods through the Closing Date
or related to the transactions contemplated hereby; provided, however, that upon
--------
expiration of such seven (7) year period, the Party with custody of such books
and records shall give written notice to the other Party(s) and an opportunity
to such other Party(s) to ship such books and records at such other Party's
costs, expense and risk to a location chosen by it. In the event any Party
needs access to such books and records for purposes of verifying any
representations and warranties contained in this Agreement, responding to
inquiries regarding the ▇▇▇▇▇ Parties' or ▇▇▇▇▇▇▇▇'▇ businesses from
Governmental Bodies, indemnifying, defending and holding harmless ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ Tanks, ▇▇▇▇▇, GSAC or Matrix, as the case may be, in accordance with
Section 10 or any other legitimate business purpose, each Party will allow
representatives of the other Party(s) access to such books and records upon
reasonable notice during regular business hours for the sole purpose of
obtaining information for use as aforesaid, and will permit such other Party(s)
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to make such extracts and copies thereof as may be necessary or convenient and,
if required for such purpose, to have access to and possession of original
documents.
6.15 Orion Contract. The Parties acknowledge that ▇▇▇▇▇, together
with Matrix (through its San ▇▇▇▇ Tank Division) and Orion Refining Corporation,
are parties to an agreement pertaining to the completion of construction by
Matrix and ▇▇▇▇▇, as the Contractors, for Orion Refining Corporation, as the
Owner, of two (2) 69-foot diameter spheres (A and B) that were originally under
Contract K73524E (collectively, the "Orion Contract"). A complete copy of the
Orion Contact is set forth in Exhibit F attached hereto. The Parties agree that
---------
any and all debts, obligations and liabilities that ▇▇▇▇▇ may now or hereafter
have arising out of or in any manner relating to the Orion Contract or ▇▇▇▇▇'▇
performance thereunder shall constitute Retained Obligations for all purposes
under this Agreement (but only to the extent not resulting from or arising out
of ▇▇▇▇▇▇▇▇'▇ gross negligence or willful misconduct occurring following the
Closing in the conduct of its services described below), including without
limitation, any obligations or liabilities arising out of any breach or default
by ▇▇▇▇▇ or Matrix (or their respective successors or assigns) under the Orion
Contract occurring following the Closing Date. Subject to the foregoing and to
the obligations of ▇▇▇▇▇, Matrix and GSAC to pay, indemnify, defend and hold
harmless ▇▇▇▇▇▇▇▇ and the other ▇▇▇▇▇▇▇▇ Indemnitees for, from and against such
Retained Obligations pursuant to Section 10.2, ▇▇▇▇▇▇▇▇ shall endeavor to
perform the obligations of ▇▇▇▇▇ under the Orion Contract as specified in the
June 2, 1999 memorandum that is included as a part of Exhibit F as being
---------
specifically allocated to ▇▇▇▇▇ alone, based upon the form of the Orion Contract
set forth in Exhibit F (with such changes from that form as shall be approved in
---------
writing by ▇▇▇▇▇▇▇▇, which approval shall not be unreasonably withheld), and in
accordance with the code and standards established by the American Society of
Mechanical Engineers. ▇▇▇▇▇ and Matrix shall pay or cause to be paid to
▇▇▇▇▇▇▇▇, within thirty (30) days after its invoice for the same, all reasonable
costs and expenses that are incurred by ▇▇▇▇▇▇▇▇ in rendering such performance,
at the rates specified in such June 2, 1999 memorandum. ▇▇▇▇▇▇▇▇ agrees that
Matrix will oversee and direct the performance of ▇▇▇▇▇▇▇▇ pursuant to the Orion
Contract, subject to the limitations described above; provided, that ▇▇▇▇▇▇▇▇
shall have no obligation to follow the directives of Matrix in the event
▇▇▇▇▇▇▇▇ shall reasonably believe that the same would result in a breach or
default by ▇▇▇▇▇▇▇▇ under the terms of the Orion Contract or would give rise to
damages for which ▇▇▇▇▇ and Matrix will be unable or will
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refuse to defend, indemnify and hold harmless ▇▇▇▇▇▇▇▇ or any other ▇▇▇▇▇▇▇▇
Indemnitee pursuant to Section 10.2.
6.16 Permits. The Parties agree to reasonably cooperate with and
assist each other, at their respective cost and expense, to effect the transfer
or assignment to ▇▇▇▇▇▇▇▇ of any existing Governmental Authorizations of the
▇▇▇▇▇ Parties that may be required by reason of, or that may result from, the
consummation of the transactions contemplated in this Agreement, and agree to
file any notices, requests, applications and the like with all relevant
Governmental Bodies in connection with those Government Authorizations (or their
assignment or transfer), including without limitation, any notices of the change
in control and ownership of the Assets required under applicable Legal
Requirements for the continued use, maintenance and effectiveness of such
Governmental Authorizations. To the extent any Governmental Authorization
included in the Assets is not assignable by ▇▇▇▇▇, or is not assignable by ▇▇▇▇▇
without the prior approval of one or more Governmental Bodies, Matrix, GSAC and
▇▇▇▇▇ agree to make those Governmental Authorizations otherwise available to
▇▇▇▇▇▇▇▇ at no additional cost to the greatest extent possible, and further
agree, with respect to Governmental Authorizations relating to the Broad Street
Property and/or the Fayetteville Road Property, or relating to the use or
operation thereof following the Closing (but exclusive of contractor's licenses,
foreign qualifications and other similar Governmental Authorizations), to use
their best efforts from and after the Closing to obtain the approval of those
Governmental Bodies, or to otherwise secure a replacement Governmental
Authorization for the account of ▇▇▇▇▇▇▇▇ in place of the Governmental
Authorizations not assignable to ▇▇▇▇▇▇▇▇, in each case to the extent required
for ▇▇▇▇▇▇▇▇'▇ full use and enjoyment of the Assets following the Closing as
contemplated herein.
6.17 Real Property Commitments. The parties acknowledge that the
exclusive use and enjoyment following the Closing of the buildings, facilities
and other improvements of ▇▇▇▇▇ located on the Broad Street Property and the
Fayetteville Road Property represent a material and substantial portion of the
overall value to ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks of the transactions contemplated in
this Agreement. However, the discovery by the Parties of various forms of
groundwater and soil contamination at, on, under, across or with respect to the
Broad Street Property and the Fayetteville Road Property (with respect to each
of those properties, collectively, the
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"Contamination"), and the potential Environmental, Health and Safety Liabilities
associated with that Contamination, have resulted in ▇▇▇▇▇▇▇▇'▇ unwillingness to
purchase those properties at the Closing. Despite this, the Parties desire to
proceed with the overall transaction by implementing a contractual arrangement
that will permit ▇▇▇▇▇▇▇▇ (or an Affiliate designated by it) to utilize the
buildings, facilities and other improvements on the Broad Street Property and
the Fayetteville Road Property until the Contamination on those properties can
be properly remediated by ▇▇▇▇▇, Matrix and GSAC (at which time ▇▇▇▇▇▇▇▇ or its
designee would purchase the Broad Street Property or the Fayetteville Road
Property (as applicable) from ▇▇▇▇▇). In light of the foregoing, the Parties
agree as follows:
(a) Real Property Agreements. At the Closing, ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇
shall execute and deliver a Facilities Use and Purchase Option Agreement
relating to the Broad Street Property, dated as of the Closing Date, and in a
form satisfactory to the Parties (the "Broad Street Property Agreement"), and
▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ shall execute and deliver a Facilities Use and Purchase
Option Agreement relating to the Fayetteville Road Property of even date
therewith and in a form satisfactory to the Parties (the "Fayetteville Road
Property Agreement") (the Broad Street Property Agreement and the Fayetteville
Road Property Agreement are hereinafter collectively referred to as the "Real
Property Agreements"). Pursuant to each of the Real Property Agreements, among
other transactions:
(i) ▇▇▇▇▇ shall grant to ▇▇▇▇▇▇▇▇ an exclusive right and license
to utilize all of the buildings, facilities and other improvements located on
the Broad Street Property or the Fayetteville Road Property (as applicable)
for any and all lawful purposes, consistent with the Non-Competition
Agreement, for a period of three (3) years following the Closing, in
consideration of the payment by ▇▇▇▇▇▇▇▇ (or such Affiliate) to ▇▇▇▇▇ of the
user fee contemplated in the Broad Street Property Agreement or the
Fayetteville Road Property Agreement (as applicable), and otherwise upon and
subject to the terms and conditions set forth in that agreement; and
(ii) ▇▇▇▇▇ shall grant to ▇▇▇▇▇▇▇▇ (or to the Person(s)
designated by ▇▇▇▇▇▇▇▇) an exclusive right and option to purchase all of
▇▇▇▇▇'▇ (and its successors and permitted
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assigns) rights, title and interests under, in and to the Broad Street
Property or the Fayetteville Road Property (as applicable), free and clear of
all Encumbrances other than Permitted Encumbrances, at any time during the
three (3) year period immediately following the Closing, for the consideration
provided for therein, and otherwise upon and subject to the other terms and
conditions set forth therein.
(b) Remediation of Contamination. ▇▇▇▇▇, GSAC and Matrix, at their
sole expense, agree: (i) (A) to use their commercially reasonable efforts from
and after the Closing to cause the Broad Street Property and the Fayetteville
Road Property not be placed for any reason by the Georgia Environmental
Protection Division ("Georgia EPD") on its Hazardous Site Inventory List, and
not to be placed by any other Governmental Body on any similar list designating
that property as being the subject of any monitoring by that Governmental Body
or any required remediation with respect to any Contamination (each a "List"),
and (B) if despite such efforts either or both of the Broad Street Property or
---
the Fayetteville Road Property is placed for any reason by the Georgia EPD or
any other Governmental Body on any List, to use their commercially reasonable
efforts from and after the Closing to cause the Broad Street Property and/or the
Fayetteville Road (as applicable) to be formally removed from that List by the
relevant Governmental Body (each a "Delisting" of the relevant property); and
---
(ii) to fully "Cleanup" (as defined in the definition of Environmental Health
and Safety Liabilities set forth on Exhibit A) in compliance with all applicable
---------
Legal Requirements, at no cost or expense to ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks, and
within a reasonable period of time following the Closing, all soil Contamination
on, under, across and at the Broad Street Property (exclusive of the soils
located directly beneath the floor of the fabrication shop located on that
property) and the Fayetteville Road Property, in each case to a level that is
below all Georgia Department of Natural Resources maximum permissible levels for
soil contamination (DNR Levels) that are relevant to that property, and (iii) to
---
cause, at their expense, all soils and back fill which were the subject of or
used in connection with any of the above-described Cleanup efforts (or efforts
to cause a Delisting) to be returned, to the reasonable satisfaction of
▇▇▇▇▇▇▇▇, to a state or condition sufficient to accommodate storm water run-off
in compliance with all applicable Governmental Authorizations and Legal
Requirements, and sufficient for ▇▇▇▇▇▇▇▇'▇ use of the property for its intended
purposes as contemplated in this Agreement, consistent with the past practices
of ▇▇▇▇▇. At such time, if ever, as ▇▇▇▇▇, GSAC and Matrix shall have obtained
such a Delisting of the
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relevant property, they shall promptly notify ▇▇▇▇▇▇▇▇ of the same in writing,
and shall include with that notice a copy of the relevant Governmental Body's
notice of the Delisting and all accompanying information (if any). At such time
(but not before) as (A) the Broad Street Property or the Fayetteville Road
Property (as applicable) has been caused not to be placed on a List or has been
caused to be Delisted, each as contemplated above, and (B) there has been a full
---
Cleanup of all soil and water Contamination on, under, across and at that
property (other than, in the case of the Broad Street Property, soil
Contamination directly under the fabrication shop floor) in compliance with all
applicable Legal Requirements, at no cost or expense to ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇
Tanks, and to a level that is below all Georgia Department of Natural Resources
maximum permissible levels for soil contamination (DNR Levels), all Georgia
Maximum Contaminant Levels for groundwater contamination (MCL's) and all Georgia
---
HSRA Risk Reduction Standards (RRS) applicable to that property (collectively,
the "Remediation Levels"), and (C) all soils and back fill which were the
---
subject of or used in connection with any of the above-described Cleanup efforts
have, to the reasonable satisfaction of ▇▇▇▇▇▇▇▇, been returned to a state or
condition sufficient to accommodate storm water run-off in compliance with all
applicable Governmental Authorizations and Legal Requirements, and sufficient
for ▇▇▇▇▇▇▇▇'▇ use of the property for its intended purposes as contemplated in
this Agreement, consistent with the past practices of ▇▇▇▇▇, then ▇▇▇▇▇, GSAC or
----
Matrix shall promptly so notify ▇▇▇▇▇▇▇▇, and shall include with that notice a
copy of the Georgia EPD's (or other relevant Governmental Body's) notice of the
Delisting (and all accompanying information, if any), together with a written
Phase II environmental audit report from an independent environmental auditing
and consulting firm reasonably satisfactory to ▇▇▇▇▇▇▇▇, opining to ▇▇▇▇▇▇▇▇
that the Remediation Levels have been fully achieved with respect to the Broad
Street Property or the Fayetteville Road Property (as applicable) as
contemplated above, and containing such exceptions, exclusions and other
limitations from or on that opinion as are reasonably satisfactory to ▇▇▇▇▇▇▇▇
(collectively, the "Remediation Notice"). If the Remediation Notice from ▇▇▇▇▇,
GSAC or Matrix is received by ▇▇▇▇▇▇▇▇ prior to the third (3rd) anniversary of
the Closing Date, then ▇▇▇▇▇▇▇▇ shall, or shall cause its relevant designee to,
thereafter exercise its right and option provided for in the Broad Street
Property Agreement or the Fayetteville Road Property Agreement (as applicable)
to purchase the Broad Street Property or the Fayetteville Road Property, upon
notice of exercise delivered within ten (10) days after its receipt of the
Remediation Notice from ▇▇▇▇▇, GSAC or Matrix (as applicable), and otherwise in
accordance with the Broad Street Property
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Agreement or the Fayetteville Road Property Agreement. ▇▇▇▇▇, GSAC and Matrix
agree to keep ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks, and their designated Representatives,
reasonably informed of their progress in remediating the Contamination,
obtaining the Georgia EPD (or other relevant Governmental Body's) notice of
Delisting and, as applicable, achieving the Remediation Levels, and agree to
promptly provide ▇▇▇▇▇▇▇▇ with copies of all applications and related
correspondence to or from the Georgia EPD (or other relevant Governmental Body)
regarding the Contamination and/or the attempted Delisting, and to afford
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Tanks, and their designated Representa tives, a reasonable
opportunity to participate in all meetings and discussions with the Georgia EPD
(or other relevant Governmental Body) in connection therewith.
(c) Maintenance of Ownership; No Encumbrances. ▇▇▇▇▇ shall not, and
Matrix and GSAC agree not to cause or permit ▇▇▇▇▇ to, attempt to sell, assign,
convey, transfer or deliver to any other Person (other than to ▇▇▇▇▇▇▇▇ or its
designee pursuant to the Broad Street Property Agreement or the Fayetteville
Road Property Agreement, as applicable) any rights, title or interests of ▇▇▇▇▇
under, in or to the Broad Street Property or the Fayetteville Road Property
Agreement at any time during the three (3) year period immediately following the
Closing, or thereafter to the extent ▇▇▇▇▇▇▇▇ (or its relevant designee) has
exercised its Option but not yet purchased the Broad Street Property or the
Fayetteville Road Property as contemplated in the Broad Street Property
Agreement or the Fayetteville Road Property Agreement, in either case without
the prior written consent of ▇▇▇▇▇▇▇▇, which consent shall not be unreasonably
withheld, conditioned or delayed. No such sale, assignment, conveyance,
transfer or delivery shall be deemed to release or otherwise discharge ▇▇▇▇▇,
GSAC or Matrix of or from their covenants and agreements set forth in this
Agreement, the Broad Street Property Agreement or the Fayetteville Road Property
Agreement, and the Parties acknowledge that ▇▇▇▇▇▇▇▇ shall in all cases be
entitled to withhold its consent (in its discretion) to that sale, assignment,
conveyance or transfer in the event the proposed purchaser, assignee or
transferee of the Broad Street Property or the Fayetteville Road Property fails
or refuses to agree in writing with ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks to become bound
by and subject to all of the terms and conditions of this Agreement and the
Broad Street Property Agreement or the Fayetteville Road Property Agreement (as
applicable), that relate to that property. ▇▇▇▇▇, Matrix and GSAC further
acknowledge that all Encumbrances on or affecting the Broad Street Property and
the Fayetteville Road Property arising under the Bank Agreement shall be fully
released and discharged
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by them, at their expense, prior to the Closing, and agree that they shall not
cause or permit any other Encumbrances (other than Permitted Encumbrances) to be
granted in, imposed or maintained against the Broad Street Property or the
Fayetteville Road Property at any time during the three (3) year period
immediately following the Closing (and during any period thereafter until
▇▇▇▇▇▇▇▇ or its relevant designee has purchased the Broad Street Property or the
Fayetteville Road Property pursuant to an exercise of its purchase Option in
accordance with the Broad Street Property Agreement or the Fayetteville Road
Property Agreement, as applicable).
(d) Monitoring Equipment. The Parties acknowledge and agree that the
Broad Street Property and/or the Fayetteville Road Property that may be
purchased by ▇▇▇▇▇▇▇▇ or its designee pursuant to the Real Property Agreements
(or either of them) shall include, in addition to ▇▇▇▇▇'▇ fee simple and other
title to the related real property and improvements, without limitation, all
groundwater monitoring ▇▇▇▇▇, all other equipment or facilities of ▇▇▇▇▇ used
for the monitoring and/or testing of Hazardous Activities, Hazardous Materials,
potential violations of Environmental Laws and/or potential Environmental Health
and Safety Liabilities on, under, across or at that property, and all previous
test results, monitoring results and other related data of ▇▇▇▇▇, Matrix and
GSAC.
(e) No Release of Claims. Nothing contained in this Section 6.17,
nor any actions taken or results achieved by ▇▇▇▇▇, GSAC or Matrix as
contemplated herein, shall release ▇▇▇▇▇, GSAC or Matrix of or from
responsibility for all Retained Obligations as contemplated elsewhere in this
Agreement or any Ancillary Document.
6.18 ▇▇▇▇▇▇▇▇ Tanks' Guaranty. ▇▇▇▇▇▇▇▇ Tanks hereby guarantees
unconditionally and absolutely to ▇▇▇▇▇, Matrix and GSAC the due and punctual
payment and performance by ▇▇▇▇▇▇▇▇ of all obligations of ▇▇▇▇▇▇▇▇ provided for
in this Agreement or in any Ancillary Document, whether such payment or
performance is required before or after the Closing. This is a guarantee of
payment and performance and not of collection, and this guarantee shall survive
any termination of this Agreement to the extent of any continuing obligations of
▇▇▇▇▇▇▇▇ hereunder or under any Ancillary Document. The obligations of ▇▇▇▇▇▇▇▇
Tanks hereunder shall remain in full force and effect without regard to, and
shall not be affected or impaired by, any of the following, any of which may
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be taken without the consent of, or notice to, ▇▇▇▇▇▇▇▇ Tanks: (a) any exercise,
non-exercise or waiver by ▇▇▇▇▇, Matrix or GSAC of any right or privilege under
this Agreement (provided, that any non-performance by ▇▇▇▇▇, Matrix or GSAC that
would be a defense to ▇▇▇▇▇▇▇▇'▇ performance under this Agreement shall
constitute a defense to ▇▇▇▇▇▇▇▇ Tanks under this Section 6.18); (b) any
bankruptcy, insolvency, reorganization, dissolution, liquidation or other like
proceeding relating to ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks, whether or not ▇▇▇▇▇▇▇▇ Tanks
shall have had knowledge of any of the foregoing; (c) any permitted assignment
or other transfer of this Agreement; and (d) the invalidity or unenforceability
of this Agreement or any Ancillary Document, or any provision hereof or thereof.
▇▇▇▇▇▇▇▇ Tanks unconditionally waives all demands, protests and notices of
protests, any right to require ▇▇▇▇▇, Matrix or GSAC to first proceed against
▇▇▇▇▇▇▇▇, and any and all guarantor's defenses, whether general or otherwise.
6.19 Contract Consent Matters. The Parties acknowledge that certain
of the WIP Contracts, the Other Work-in-Process Contracts and the performance
bonds related thereto may not, by their terms, be assigned or transferred by
▇▇▇▇▇ to ▇▇▇▇▇▇▇▇ as contemplated herein without the prior consent or approval
of the other parties to those contracts. In light of the foregoing, and
notwithstanding anything contained in Section 1 or elsewhere in this Agreement
or any Ancillary Document to the contrary, the Parties agree as follows: To the
extent the assignment or transfer of any WIP Contract, Other Work-in-Process
Contract or performance bond relating thereto by ▇▇▇▇▇ to ▇▇▇▇▇▇▇▇ requires the
consent or approval of the other party thereto, or would result in a breach or
default by ▇▇▇▇▇ thereunder absent a waiver thereof by that other party, or
would afford that other party the right to terminate the contract absent a
waiver of that right, then this Agreement and the other Ancillary Documents
shall not be deemed (nor shall they be deemed to require) an assignment of that
WIP Contract, Other Work-in-Process Contract or performance bond relating
thereto to ▇▇▇▇▇▇▇▇, nor an assumption by ▇▇▇▇▇▇▇▇ of that contract, at the
Closing. If such a consent, approval or waiver is not obtained by ▇▇▇▇▇ at or
prior to the Closing, ▇▇▇▇▇, GSAC and Matrix agree to use their commercially
reasonable efforts, at their expense, to obtain that consent, approval or waiver
in writing from the other party to that contract at the earliest practicable
time following the Closing. Upon the receipt of that consent, approval or waiver
(as applicable), the relevant WIP Contract, Other Work-in-Process Contract or
performance bond relating thereto shall be deemed to be automatically assigned
and transferred to ▇▇▇▇▇▇▇▇, pursuant to this Agreement and the Assignment
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and Assumption Agreement, without further consideration or action on the part of
any Party. Until such time following the Closing as that consent, approval or
waiver (as applicable) is obtained and the relevant contract is so assigned to
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ shall, and GSAC and Matrix agree to cause ▇▇▇▇▇ to: (a) fully
enforce that contract or bond against the other party thereto (including without
limitation, all rights of collection against that other party), not waive or
relinquish any rights or remedies that ▇▇▇▇▇ may have thereunder against that
other party, not amend, modify, renew, terminate or supplement that contract,
and fully perform and comply with each and every obligation of ▇▇▇▇▇ thereunder
(subject to the performance obligations of ▇▇▇▇▇▇▇▇ described below), in each
case without the prior written consent of ▇▇▇▇▇▇▇▇; and (b) in the case of the
WIP Contracts and the Other Work-in-Process Contracts, remit and pay over to
▇▇▇▇▇▇▇▇, promptly following the receipt thereof, all fees, costs, expenses,
revenues and other consideration received on account of that WIP Contract or
Other Work-in-Process Contract following the Closing and attributable to work
performed or goods or services delivered thereunder following the Closing (and,
in the case of the Other Work-in-Process Contracts, prior to the Closing). As
and when requested by ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ shall permit ▇▇▇▇▇▇▇▇ to enforce that WIP
Contract, Other Work-in-Process Contract or performance bond relating thereto
against the other party thereto in the name of ▇▇▇▇▇. ▇▇▇▇▇ shall not attempt to
assign, transfer or subcontract any of its rights, interests or obligations
under any such WIP Contract, Other Work-in-Process Contract or performance bond
relating thereto (other than to ▇▇▇▇▇▇▇▇ or its Affiliate) without the prior
written consent of ▇▇▇▇▇▇▇▇. To the extent ▇▇▇▇▇ shall allocate and remit to
▇▇▇▇▇▇▇▇ all of the economic and other benefits of that WIP Contract, Other
Work-in-Process Contract or performance bond relating thereto as contemplated
above, ▇▇▇▇▇▇▇▇ shall perform for the benefit of the other party to that
contract or bond, to the fullest extent permissible under applicable Legal
Requirements, all of the obligations of ▇▇▇▇▇ thereunder which first arise or
accrue following the Closing (other than Retained Obligations).
7. Conditions To Closing.
7.1 Conditions to Obligations of ▇▇▇▇▇▇▇▇. The obligations of
▇▇▇▇▇▇▇▇ to purchase the Assets and for ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks to take the
other actions required to be taken by them at and subsequent to the Closing are
subject to the satisfaction at or prior to the Closing of each of the following
conditions, any one or more of which ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks may waive in
whole or in part at or prior to the Closing:
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(a) Representations True. The representations and warranties of
▇▇▇▇▇, GSAC and Matrix contained in this Agreement (considered collectively) and
each of those representations and warranties (considered individually) must have
been true and correct in all material respects (or with respect to
representations and warranties that are expressly subject to materiality or that
include a specific dollar threshold, in all respects) as of the Effective Date
and the date of this Agreement, and (except as otherwise provided below) must be
true and correct in all material respects (or with respect to representations
and warranties that are expressly subject to materiality or that include a
specific dollar threshold, in all respects) on and as of the Closing Date
(including those representations and warranties which specifically speak as of
the Effective Date or the date of this Agreement) with the same effect as though
such representations and warranties had been made and this Agree ment had been
delivered on and as of the Closing Date, without giving effect to any supplement
to the Schedules. Notwithstanding the foregoing, in the event any of the
representations or warranties of ▇▇▇▇▇, GSAC and Matrix set forth in Section 4.6
of this Agreement are not true and correct as of the Effective Date and the date
of this Agreement, or are not true and correct on and as of the Closing Date,
each as contemplated above, then ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks shall be entitled
to assert such misrepresentation, breach of warranty or other failure as being
an unsatisfied condition precedent to its obligation to consummate the
transactions contemplated in this Agreement only to the extent ▇▇▇▇▇▇▇▇ and
----
▇▇▇▇▇▇▇▇ Tanks shall reasonably believe that ▇▇▇▇▇, GSAC and Matrix will be
unable or will refuse to indemnify and hold harmless the ▇▇▇▇▇▇▇▇ Indemnitees,
pursuant to Section 10.2 hereof, from and against all Damages resulting from or
arising out of such misrepresen tation, breach of warranty or other failure, or
will otherwise be unable or will refuse to assume and pay, perform and discharge
all Retained Obligations that were or are the subject of such misrepresentation,
breach of warranty or other failure. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks shall not be
deemed to have waived their right, following the Closing, to seek the
indemnification and other remedies provided for in this Agreement regarding such
misrepresentation, breach of warranty or Retained Obligations, notwithstanding
▇▇▇▇▇▇▇▇'▇ or ▇▇▇▇▇▇▇▇ Tanks' knowledge of such misrepresentation or breach of
warranty as of the Closing.
(b) Covenants Performed. All of the covenants, agreements and
conditions of ▇▇▇▇▇, GSAC and Matrix required to be performed or complied with
at or prior to the Closing pursuant to the terms of this Agreement (considered
collectively), and each of those covenants, agreements and
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conditions (considered individually), must have been duly performed and complied
with in all material respects.
(c) No Changes or Destruction of Property. Between the date hereof
and the Closing Date, there shall have been (i) no material adverse change in
the business, financial condition or results of operations of any of the ▇▇▇▇▇
Parties; (ii) no material adverse federal or state legislative or regulatory
change affecting any of the ▇▇▇▇▇ Parties or their products or services; and
(iii) no material damage to any assets or properties of any of the ▇▇▇▇▇ Parties
by fire, flood, casualty, act of God or public enemy or other cause, regardless
of insurance coverage for such damage.
(d) Necessary Consents Received. The ▇▇▇▇▇ Parties shall have
received all consents and approvals, in form and substance reasonably
satisfactory to ▇▇▇▇▇▇▇▇, to the transactions contemplated in this Agreement
from the other parties to all contracts, leases, agreements and permits to which
the ▇▇▇▇▇ Parties (or any of them) are parties or by which they or any of their
assets or properties are affected, and from all Governmental Bodies, in each
case to the extent necessary under those contracts, leases, agreements or
permits or under Legal Requirements.
(e) No Litigation. No Proceeding shall have been instituted or, to
the knowledge of ▇▇▇▇▇, GSAC and Matrix, be Threatened, before any Governmental
Body by any Person, (1) making any challenge to, or seeking damages or other
relief in connection with, the transactions contemplated in this Agreement, or
(2) that may have the effect of restraining, enjoining or prohibiting, making
illegal or otherwise interfering with such transactions.
(f) No Claim Regarding Assets. No claim shall have been made or
Threatened by any Person asserting that such Person (1) is the holder or the
beneficial owner of, or has the right to acquire or to obtain beneficial
ownership of, any Assets, or (2) is entitled to all or any portion of the
Purchase Price payable for the Assets.
(g) [Intentionally Omitted]
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(h) Closing Documents. Matrix, GSAC and ▇▇▇▇▇ shall have executed
and delivered to ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks a Non-Competition Agreement in a
form reasonably satisfactory to the Parties (the "Non-Competition Agreement"),
and which is consistent with Section 5 of the non-binding letter of intent
between Matrix and ▇▇▇▇▇▇▇▇ Tanks dated March 24, 1999 (the "Letter of Intent"),
a Fabrication Services Agreement in a form reasonably satisfactory to the
Parties (the "Fabrication Services Agreement"), and which is consistent with
Section 6 of the Letter of Intent, the Assignment & Assumption Agreement, the
bills of sale, assignments and other instruments contemplated in Section 1.3,
the Broad Street Property Agreement and the Fayetteville Road Property Agreement
contemplated in Section 6.17, and the other certificates, instruments, legal
opinion and documents contemplated in Section 9, and each of the Subsidiaries
shall have executed and delivered the Subsidiary ▇▇▇▇ of Sale to ▇▇▇▇▇.
(i) Section 2.5 Matters. Each of the actions contemplated in Section
2.5 as being taken, completed or effected at or prior to the Closing shall have
been so taken, completed or effected.
(j) Financing. ▇▇▇▇▇▇▇▇ Tanks and ▇▇▇▇▇▇▇▇ shall have received a
binding written commitment from a lender reasonably satisfactory to them to
provide financing to them at the Closing for the full amount of the Purchase
Price, on such terms and conditions and shall be satisfactory to ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇ Tanks.
(k) Environmental Review Report. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks shall
have received, at their expense (except as otherwise provided below) an
environmental review report from a person satisfactory to ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇
Tanks as to the absence of any violation of any Environmental Laws, and the
absence of any Environmental, Health and Safety Liabilities, in each case that
could materially adversely effect any ▇▇▇▇▇ Party, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Tanks or
any of their respective businesses, assets or property, or otherwise relating to
any of the ▇▇▇▇▇ Parties or any of their businesses, assets or property. Matrix
agrees to reimburse ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks for one-half of all consulting
fees, costs and other expenses incurred by them in conducting a "Phase II"
environmental audit of the ▇▇▇▇▇ Parties and their respective assets and
properties, regardless of whether the Closing shall occur, which amounts shall
be payable within ten (10) days after the
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written request therefor delivered by ▇▇▇▇▇▇▇▇ to Matrix, together with
reasonable documentation of such fees, costs and expenses.
(l) ▇▇▇▇▇▇▇▇'▇ Investigation. The due diligence investigation by
▇▇▇▇▇▇▇▇'▇ and ▇▇▇▇▇▇▇▇ Tanks' Representatives in connection with the
transactions contemplated in this Agreement shall not have caused ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ Tanks or their Representatives to become aware of any facts or
circumstances relating to the businesses, operations, properties, Liabilities,
financial condition, results of operation or affairs of any of the ▇▇▇▇▇ Parties
that, in the sole judgment of ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks, make it inadvisable
for them to proceed with the Closing and the transactions contemplated in this
Agreement.
(m) Revised Exhibit B. The parties shall have dated, executed and
delivered to each other Revised Exhibit B as contemplated in Section
---------
2.2(a)(3)(C).
(n) Inventory. The physical inventory of all Inventory of the ▇▇▇▇▇
Parties contemplated in Section 2.2(b) shall have been completed, and the
Parties shall have mutually agreed in writing on the Assigned Inventory Price as
contemplated in that Section.
(o) Release of Encumbrances. ▇▇▇▇▇, Matrix and GSAC shall have
delivered to ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks evidence reasonably satisfactory to
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks of the complete and absolute release and discharge
of all Encumbrances on the Assets, as contemplated in Section 7.2(f), below.
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(p) [Intentionally Omitted]
(q) [Intentionally Omitted]
(r) Accrued Vacation. The Parties shall have agreed upon the accrued
vacation for Non-Field Employees as contemplated in Section 6.13(a).
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(s) Termination of Employees. The ▇▇▇▇▇ Parties shall have terminated
their employees as contemplated in Section 6.13(e).
(t) [Intentionally Omitted]
(u) Environmental Work Plan. The Parties shall have each executed and
delivered to the others an Environmental Work Plan in a form satisfactory to the
Parties (the "Environmental Work Plan"), pursuant to which they shall agree upon
a plan of action for addressing certain environmental issues associated with the
assets and properties of ▇▇▇▇▇, and an allocation of responsibility for those
environmental issues.
7.2 Conditions to Obligations of ▇▇▇▇▇, GSAC and Matrix. The
obligations of ▇▇▇▇▇ to sell the Assets and of Matrix, GSAC and ▇▇▇▇▇ to take
the other actions required to be taken by them at and subsequent to the Closing
are subject to the satisfaction at or prior to the Closing of each of the
following conditions, any one or more of which Matrix (for itself and for GSAC
and ▇▇▇▇▇) may waive in whole or in part at or prior to the Closing:
(a) Representations True. The representations and warranties of
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks contained in this Agreement (considered
collectively) and each of the representations and warranties (considered
individually) must have been true and correct in all material respects as of the
Effective Date and the date of this Agreement, and must be true and correct in
all material respects on and as of the Closing Date (including those
representations and warranties which speak specifically as of the Effective Date
and the date of this Agreement) with the same effect as though such
representations and warranties had been made and this Agreement had been
delivered on and as of the Closing Date.
(b) Covenants Performed. All of the covenants, agreements and
conditions of ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks required to be performed or complied
with at or prior to the Closing pursuant to the terms of this Agreement
(considered collectively), and each of those covenants, agreements and
conditions (considered individually), must have been duly performed and complied
with in all material respects.
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(c) No Litigation. No Proceeding shall have been instituted or, to
the knowledge of ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks, be Threatened, before any
Governmental Body by any Person, (1) making any challenge to, or seeking damages
or other relief in connection with, the transactions contemplated in this
Agreement, or (2) that may have the effect of restraining, enjoining or
prohibiting, making illegal or otherwise interfering with such transactions.
(d) [Intentionally Omitted]
(e) Closing Documents. ▇▇▇▇▇▇▇▇ and/or ▇▇▇▇▇▇▇▇ Tanks shall have
executed and delivered to Matrix the Non-Competition Agreement, the Assignment &
Assumption Agreement, the Broad Street Property Agreement, the Fayetteville Road
Property Agreement, and the other certificates, instruments, legal opinion and
documents contemplated in Section 9.
(f) Bank Consent and Release. Matrix shall have obtained, at its
expense, the consent of Bank One, Oklahoma, N.A. to the consummation of the
transactions contemplated in this Agreement and the Ancillary Documents in
accordance with the Bank Agreement and in form and substance satisfactory to
Matrix and ▇▇▇▇▇▇▇▇, and Matrix shall have obtained, at its expenses, a complete
and absolute release and discharge of all Encumbrances on, against or affecting
any of the assets or properties of the ▇▇▇▇▇ Parties (including without
limitation, the Fayetteville Road Property and the Broad Street Property, but
excluding the other Excluded Assets) and in favor of Bank One, Oklahoma, N.A. or
any other Person, arising under or in connection with the Bank Agreement or the
transactions relating thereto.
(g) Revised Exhibit B. The parties shall have dated, executed and
delivered to each other Revised Exhibit B as contemplated in Section
---------
2.2(a)(3)(C).
(h) Inventory. The physical inventory of all Inventory of the ▇▇▇▇▇
Parties contemplated in Section 2.2(b) shall have been completed, and the
Parties shall have mutually agreed in writing on the Assigned Inventory Price as
contemplated in that Section.
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(i) [Intentionally Omitted].
(j) Accrued Vacation. The Parties shall have agreed upon the
accrued vacation for Non-Field Employees as contemplated in Section 6.13(a).
(k) Environmental Work Plan. The Parties shall have executed and
delivered the Environmental Work Plan contemplated in Section 7.1(u).
8. Termination.
8.1 Termination of Agreement. This Agreement may be terminated only
as follows:
(a) Mutual Consent. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Tanks, Matrix, GSAC and
▇▇▇▇▇ may terminate this Agreement prior to the Closing by mutual written
agreement.
(b) Conditions Not Satisfied.
(1) ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks may terminate this Agreement
upon notice to Matrix, GSAC and ▇▇▇▇▇ delivered at any time following June
24, 1999 and prior to the Closing, in the event any of the conditions set
forth in Section 7.1 have not been satisfied for any reason on or prior to
that date (other than any failure of such condition(s) to be so satisfied
by reason of a breach by ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks of any of their
covenants set forth in this Agreement), or have not been waived by ▇▇▇▇▇▇▇▇
or ▇▇▇▇▇▇▇▇ Tanks on or prior to that date.
(2) Matrix (on behalf of itself, GSAC and ▇▇▇▇▇) may
terminate this Agreement upon notice to ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks
delivered at any time following June 24, 1999 and prior to the Closing, in
the event any of the conditions set forth in Section 7.2 have not been
satisfied for any reason on or prior to that date (other than any failure
of such condition(s) to be so satisfied by reason of a breach by Matrix,
GSAC or ▇▇▇▇▇ of any of their respective covenants set forth in this
Agreement), or have not been waived by Matrix on or prior to that date.
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Notwithstanding the provisions of Sections 8.1(b)(1) and 8.1(b)(2), above,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Tanks and Matrix each agree that, in the event the Closing
shall not have occurred on or before June 24, 1999 by reason of a failure of any
condition precedent set forth in Section 7.1 or 7.2 to have been satisfied or
waived, and in the event the failure of such condition precedent to be so
satisfied relates primarily to a failure by any ▇▇▇▇▇ Party or any of their
assets or properties to comply with any Environmental Laws, or to any
Environmental, Health and Safety Liability of or relating to any ▇▇▇▇▇ Party,
then ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Tanks and Matrix shall each refrain from exercising
their respective termination right provided for above until September 10, 1999,
and shall continue until that date to reasonably cooperate with each other in an
attempt to satisfy that condition precedent.
(c) Breach by a Party. Either ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks, on the one
hand, or Matrix (on behalf of itself, GSAC and ▇▇▇▇▇), on the other hand, may
terminate this Agreement if a breach of any of the provisions of this Agreement
has been committed by the other Party(s) or, in the case of a termination by
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks, committed by GSAC or ▇▇▇▇▇, and such breach (if
curable) has not been (i) cured by such other Party (or GSAC or ▇▇▇▇▇, as
applicable) within ten (10) days after notice thereof is delivered by ▇▇▇▇▇▇▇▇
and ▇▇▇▇▇▇▇▇ Tanks or Matrix (as applicable), or (ii) waived by ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇ Tanks or Matrix (as applicable) at or prior to the Closing.
(d) Other Permitted Terminations. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks may
terminate this Agreement as contemplated in Section 2.2(a)(3)(C), and ▇▇▇▇▇▇▇▇
and ▇▇▇▇▇▇▇▇ Tanks, or Matrix, as applicable, may terminate this Agreement as
contemplated in Section ? or ?.
8.2 Effect of Termination. Each Party's right of termination under
Section 8.1 is in addition to, and not in lieu of, any other rights or remedies
that it may have under this Agreement, at law, in equity or otherwise, and the
exercise of a right of termination will not be an election of remedies. No such
termination shall be deemed to relieve any Party from responsibility for any
breach by it under this Agreement occurring prior to such termination.
9. Deliveries and Actions To Be Taken At The Closing.
9.1 Deliveries by ▇▇▇▇▇, GSAC and Matrix. ▇▇▇▇▇, GSAC and Matrix agree
to deliver (duly executed where appropriate) to ▇▇▇▇▇▇▇▇ at the Closing each of
the following:
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(a) Assets. Exclusive right and possession of the Assets.
(b) Resolutions. Copies of resolutions duly adopted by the Boards of
Directors of Matrix, GSAC and ▇▇▇▇▇, approving the transactions contemplated in
this Agreement in a form reasonably satisfactory to ▇▇▇▇▇▇▇▇, certified by an
officer of each of Matrix, GSAC and ▇▇▇▇▇ as being correct, complete and in full
force and effect as of the Closing Date.
(c) Certificate. A Certificate from a duly authorized officer of
▇▇▇▇▇, GSAC and Matrix, dated the Closing Date, certifying as to the fulfillment
of the conditions set forth in Section 7.1.
(d) Matrix's Release and Other Evidence. ▇▇▇▇▇, Matrix and GSAC shall
deliver to ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks written evidence of the releases and
discharges contemplated in Section 7.1(o).
(e) Non-Competition Agreement. Matrix, GSAC and ▇▇▇▇▇ shall execute
and deliver to ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks the Non-Competition Agreement.
(f) Vehicles. ▇▇▇▇▇ shall execute and deliver to ▇▇▇▇▇▇▇▇ all Title
Certificates and other documents of transfer required to transfer all of ▇▇▇▇▇'▇
vehicles to ▇▇▇▇▇▇▇▇ in compliance with applicable Legal Requirements.
(g) Payment of Liens and Encumbrances. Written confirmation that the
Encumbrances (other than Permitted Encumbrances) set forth on Schedules
4.25(a)(1) and 4.29, or as disclosed on the reports referred to in Section 6.5
(other than those accepted or waived in writing by ▇▇▇▇▇▇▇▇), have been paid,
released and discharged.
(h) Opinion of Counsel. An opinion from Hall, Estill, Hardwick,
Gable, Golden & ▇▇▇▇▇▇, P.C., counsel for Matrix, GSAC and ▇▇▇▇▇, in a form
reasonably satisfactory to ▇▇▇▇▇▇▇▇.
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(i) Fabrication Services Agreement. ▇▇▇▇▇▇▇▇ and Matrix shall execute
and deliver the Fabrication Services Agreement.
(j) Other Ancillary Documents. GSAC, Matrix, ▇▇▇▇▇ and each of the
Subsidiaries shall execute and/or deliver the Assignment & Assumption Agreement,
▇▇▇▇(s) of sale and other instruments contemplated in Section 1.3, the Broad
Street Property Agreement, the Fayetteville Road Property Agreement, the
Subsidiary ▇▇▇▇ of Sale, the Environmental Work Plan contemplated in Section
7.1(u), and the title insurance policy contemplated in Section 6.4(e).
(k) [Intentionally Omitted]
(l) Other Documents. Such other documents as may be reasonably
necessary to effect the closing of the transactions contemplated in this
Agreement as such closing is herein contemplated.
9.2 Deliveries by ▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇ covenants to deliver (duly
executed where appropriate) to ▇▇▇▇▇, Matrix and GSAC at the Closing each of
the following:
(a) ▇▇▇▇▇▇▇▇'▇ Resolutions. A copy of resolutions duly adopted by the
Board of Directors of ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks, approving the transactions
contemplated in this Agreement and in a form reasonably satisfactory to ▇▇▇▇▇,
Matrix and GSAC, certified by an officer of ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks as being
correct, complete and in full force and effect as of the Closing Date.
(b) Purchase Price. The Purchase Price, by means of a wire transfer
of immediately available federal funds to such account or accounts as ▇▇▇▇▇
shall direct in writing at least two (2) business days prior to the Closing
Date.
(c) Certificate. A Certificate from a duly authorized officer of
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks, dated the Closing Date, certifying as to the
fulfillment of the conditions set forth in Section 7.2.
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(d) Other Ancillary Documents. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks shall
execute and deliver the Assignment & Assumption Agreement, the Non-Competition
Agreement and the Environmental Work Plan contemplated in Section 7.1(u), and
▇▇▇▇▇▇▇▇ shall execute and deliver the Broad Street Property Agreement and the
Fayetteville Road Property Agreement.
(e) Opinion of Counsel. An opinion from ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
PLLC, counsel for ▇▇▇▇▇▇▇▇, in a form reasonably satisfactory to ▇▇▇▇▇, Matrix
and GSAC.
(f) Other Documents. Such other documents as may be reasonably
necessary to effect the closing of the transactions contemplated in this
Agreement as such closing is herein contem plated.
9.3 Actions and Deliveries Simultaneous. Notwithstanding the order of
the deliveries by the Parties set forth above, all actions and deliveries shall
occur simultaneously and none shall be deemed to have been completed until each
of the actions and deliveries set forth in this Section 9 has been completed or
has been waived by the Party entitled to make such waiver.
10. Indemnification; Remedies.
10.1 Survival; Right to Indemnification Not Affected by Knowledge. All
representations, warranties, covenants and obligations set forth in this
Agreement, the certificates delivered pursuant to Sections 9.1(c) and 9.2(c),
and any other certificate or document delivered pursuant to this Agreement will
survive the Closing; provided, that the representations and warranties (i) in
Sections 4.19 and 4.24(a) shall expire after 12 months from the Closing Date,
and (ii) in Sections 4.11, 4.12, 4.18 and 4.29 shall expire after 18 months from
the Closing Date. The right to indemnification, payment of "Damages" (as defined
in Section 10.2) or other remedies based on such representations, warranties,
covenants and obligations will not be affected by the Closing, by any earlier
termination of this Agreement, or by any investigation conducted by any Person
with respect to, or any knowledge acquired by any Person at any time, whether
before or after the execution and delivery of this Agreement or the Closing
Date, with respect to, the accuracy or inaccuracy of or compliance with any such
representation, warranty, covenant or obligation. The waiver of any condition
based on the accuracy of any representation or warranty, or on the
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performance of or compliance with any covenant or obligation, will not affect
the right to indemnification, payment of Damages or other remedy based on such
representations, warranties, covenants and obligations.
10.2 Indemnification and Payment of Damages By Matrix, GSAC and ▇▇▇▇▇.
Matrix, GSAC and ▇▇▇▇▇ each agrees, jointly and severally, to defend, indemnify
and hold ▇▇▇▇▇▇▇▇ Tanks, ▇▇▇▇▇▇▇▇, and their respective directors, officers,
shareholders, Affiliates, successors and assigns (collectively, "▇▇▇▇▇▇▇▇
Indemnitees"), harmless from and against, and to pay to the ▇▇▇▇▇▇▇▇ Indemnitees
the amount of, any and all debts, obligations, losses, claims, damages
(including without limitation, direct, indirect, special incidental and
consequential damages), Liabilities, deficiencies, Proceedings, demands,
assessments, Orders, judgments, writs, decrees, costs and other expenses
(including without limitation, costs of investigation and defense and reasonable
attorneys' and accountants' fees), and diminution of value, whether or not
involving a third-party claim, of any nature and of any kind whatsoever
(collectively, "Damages"), that may be suffered or incurred by them (or any of
them) resulting from, arising, directly or indirectly, out of or in connection
with (without duplication):
(a) any misrepresentation or breach of warranty made by ▇▇▇▇▇, GSAC or
Matrix in this Agreement or in any Ancillary Document; provided, that in the
event the Closing does not occur, the ▇▇▇▇▇▇▇▇ Indemnitees shall be entitled to
be defended, indemnified and held harmless by ▇▇▇▇▇, Matrix and GSAC pursuant to
this Subsection (a) only to the extent that ▇▇▇▇▇, Matrix or GSAC knew or should
reasonably have known that the relevant representation or warranty was not true
and correct in all material respects (or with respect to a representation or
warranty that is expressly subject to materiality or that includes a specific
dollar threshold, in all respects) as of the Effective Date or the date of this
Agreement; it being understood that the foregoing limitation on recovery shall
have no relevance in the event the Closing shall occur;
(b) any breach by ▇▇▇▇▇, GSAC or Matrix of any covenant, agreement or
obligation of ▇▇▇▇▇, GSAC or Matrix in this Agreement or in any Ancillary
Document; and
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(c) the Retained Obligations (and each of them); it being understood
and agreed by Matrix, GSAC and ▇▇▇▇▇ that the foregoing right of the Caldwell
Indemnitees to be defended, indemnified and held harmless from and against the
Retained Obligations may be exercised by the Caldwell Indemnitees regardless of
whether such Retained Obligations are the subject of any representations or
warranties set forth in Section 4 or any disclosure(s) by Matrix, GSAC or Brown
in connection with those representations and warranties, and regardless of
whether the Caldwell Indemnitees have a claim for indemnification regarding the
same Damages pursuant to Subsection (a) or (b) above (except to the extent
otherwise provided in the second to last sentence of Section 2.5(b)).
The remedies provided in this Section 10.2 shall not be exclusive of or limit
any other remedies that may be available to the Caldwell Indemnitees. All Damage
payments to Caldwell or Caldwell Tanks hereunder shall be deemed adjustments to
the Purchase Price.
10.3 Limitation on Matrix's Indemnification. Notwithstanding the
provisions of Section 10.2, Brown, Matrix and GSAC shall have no obligation to
indemnify or hold harmless any Caldwell Indemnitee pursuant to Section 10.2(a)
until such time as the sum of all Damages that are suffered or incurred by all
Caldwell Indemnitees, collectively, resulting from or arising out of all
misrepresentations and breaches of warranties shall exceed $50,000 in the
aggregate, at which time Brown, Matrix and GSAC shall indemnify and hold
harmless all Caldwell Indemnitees pursuant to Section 102 for all Damages then
and thereafter suffered or incurred by them, including without limitation, that
initial $50,000 in Damages. The foregoing limitation on the Caldwell
Indemnitees' right to indemnification shall not apply to any Damages resulting
from, arising out of or in connection with any of the matters described in
Section 10.2(b) or Section 10.2(c), notwithstanding that such Damages may also
be recoverable pursuant to Section 10.2(a).
10.4 Indemnification By Caldwell. Caldwell and Caldwell Tanks, jointly
and severally, shall defend, indemnify and hold Brown, Matrix and GSAC, and
their respective directors, officers, shareholders, Affiliates, successors and
assigns (collectively, the "Matrix Indemnitees"), harmless from and against, and
will pay to the Matrix Indemnitees the amount of, all Damages suffered or
incurred by them (or any of them) resulting from, arising directly or indirectly
out of or in
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connection with: (a) any misrepresentation or breach of warranty made by
Caldwell or Caldwell Tanks in this Agreement or in any Ancillary Document to
which it is a party; (b) following the Closing, the Assumed Obligations; and (c)
any breach by Caldwell or Caldwell Tanks of any covenant, agreement or
obligation of Caldwell or Caldwell Tanks in this Agreement or in any Ancillary
Document to which it is a party; but excluding any Damages resulting from,
arising out of or in connection with any Retained Obligations. Notwithstanding
the foregoing, in the event the Closing does not occur, the Matrix Indemnitees
shall be entitled to be defended, indemnified and held harmless by Caldwell and
Caldwell Tanks pursuant to Subclause 10.4(a), above, only to the extent that
Caldwell or Caldwell Tanks knew or should have known that the relevant
representation or warranty was not true and correct in all material respects as
of the date of this Agreement (it being understood that the foregoing limitation
on recovery shall have no relevance in the event the Closing shall occur). The
remedies provided in this Section 10.4 shall not be exclusive of or limit any
other remedies that may be available to the Matrix Indemnitees.
10.5 Procedure for Indemnification.
(a) Notice of Claims. Promptly after receipt by a Party (the
"Claiming Party") of notice of the commencement or assertion of any claim,
action, suit, Proceeding, arbitration, audit, hearing, investigation, Order or
litigation (each a "Claim") against it or any Caldwell Indemnitee (in the case
of Caldwell and Caldwell Tanks) or any Matrix Indemnitee (in the case of Brown,
Matrix and GSAC), and if a claim is to be made by the Claiming Party against any
other Party (the "Indemnifying Party") for indemnification with respect to that
Claim pursuant to Section 10.2 or 10.4 (as applicable), the Claiming Party shall
promptly give notice to the Indemnifying Party of the commencement or assertion
of such Claim; provided, that the failure to so notify the Indemnifying Party of
the commencement or assertion of such Claim will not relieve the Indemnifying
Party of any liability that it may have to any Caldwell Indemnitee or Matrix
Indemnitee (as applicable) hereunder, except to the extent that such
Indemnifying Party demonstrates that the defense of such action was prejudiced
by the Claiming Party's failure to give such notice. The notice contemplated
herein shall describe the Claim and the specific facts and circumstances in
reasonable detail, shall include a copy of any related notices or written claims
from third-parties, and shall indicate the amount, if known, or an estimate, if
possible, of the Damages that have been or may be suffered or incurred.
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(b) Assumption of Defense. If any Claim is brought against a Caldwell
Indemnitee or a Matrix Indemnitee and the Claiming Party gives notice to the
Indemnifying Party of such Claim, the Indemnifying Party will, unless the Claim
involves Taxes (which shall be resolved in accordance with the procedures in
Section 4.28), be entitled to participate in such Claim and, to the extent that
it wishes (unless (i) such Indemnifying Party is also a party to such Claim and
the Claiming Party determines in good faith that joint representation would be
inappropriate, or (ii) the Indemnifying Party fails to provide reasonable
assurance to the Claiming Party of its financial capacity to defend such Claim
and provide indemnification with respect to such Claim), to assume the defense
of such Claim with counsel reasonably satisfactory to the Claiming Party and,
after notice from the Indemnifying Party to the Claiming Party of its election
to assume the defense of such Claim, the Indemnifying Party will not, as long as
it diligently conducts such defense, be liable to the Claiming Party or the
other relevant Caldwell Indemnitee(s) or Matrix Indemnitee(s) (as applicable)
under this Section 10 for any fees of other counsel or any other expenses with
respect to the defense of such Claim, in each case subsequently incurred by the
Claiming Party or the other relevant Caldwell Indemnitee(s) or Matrix
Indemnitee(s) (as applicable) in connection with the defense of such Claim,
other than their reasonable costs of investigation. If the Indemnifying Party
assumes the defense of a Claim, (i) it will be conclusively established for
purposes of this Agreement that the Claim (and any resulting Damages) are within
the scope of and subject to indemnification by the Indemnifying Party; (ii) no
compromise or settlement of such claims may be effected by the Indemnifying
Party without the Claiming Party's consent unless (A) there is no finding or
admission of any violation of Legal Requirements or any violation of the rights
of any Person and no effect on any other Claims that may be made against the
Claiming Party or any other Caldwell Indemnitee or Matrix Indemnitee (as
applicable), and (B) the sole relief provided is monetary damages that are paid
in full by the Indemnifying Party; and (iii) the Claiming Party and each
relevant Caldwell Indemnitee or Matrix Indemnitee (as applicable) will have no
liability with respect to any compromise or settlement of such Claims effected
without its consent. The Claiming Party and any relevant Caldwell Indemnitee or
Matrix Indemnitee shall be entitled to participate (at its expense) in the
defense of any Claim assumed by the Indemnifying Party as contemplated herein.
If notice is given to an Indemnifying Party of any Claim and the Indemnifying
Party does not, within ten days after the Claiming Party's notice is given, give
notice to the Claiming Party of its election to assume the defense of such
Claim, the Indemnifying Party will no longer have the right to assume that
defense, and will be bound by
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any determination made in such Claim or any compromise or settlement effected by
the Claiming Party or any other Caldwell Indemnitee or Matrix Indemnitee (as
applicable).
(c) Exception. Notwithstanding the foregoing, if a Claiming Party or
any other Caldwell Indemnitee or Matrix Indemnitee (as applicable), determines
in good faith that there is a reasonable probability a Claim (other than a claim
arising under Section 10.2(c) hereof) may adversely affect it or its Affiliates
other than as a result of monetary damages for which it would be entitled to
indemnification under this Agreement, that party or Person may, by notice to the
Indemnifying Party, assume the exclusive right to defend, compromise or settle
such Claim, but the Indemnifying Party will not be bound by any determination of
a Claim so defended or any compromise or settlement effected without its consent
(which may not be unreasonably withheld).
(d) Other Claims. A claim for indemnification for any matter not
involving a third-party Claim may be asserted by notice to the Party from whom
indemnification is sought.
(e) Cooperation of Parties. The Party assuming the defense of any Claim
shall keep the other Party(s) reasonably informed at all times of the progress
and development of the Party's defense of and compromise efforts with respect to
such Claim, and shall furnish the other Party(s) with copies of all relevant
pleadings, correspondence and other papers. In addition, the Parties to this
Agreement shall cooperate with each other, and make available to each other and
their representatives all available relevant records or other materials
required by them for their use in defending, compromising or contesting any
Claim.
11. Arbitration.
11.1 Referral. If any dispute under this Agreement or any Ancillary
Document arises and the relevant Parties are unable to resolve such dispute, the
unresolved dispute shall be resolved by arbitration if a Party requests
arbitration in accordance with this Section 11. The place of arbitration shall
be in Louisville, Kentucky. Arbitration shall be conducted under the auspices of
the American Arbitration Association ("AAA"). Except as otherwise provided in
this Section 11, the Rules of the AAA shall govern all proceedings; and in the
case of conflict between the AAA Rules and this Agreement, the provisions of
this Agreement shall govern.
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11.2 Demand. Any Party may initiate arbitration by making a demand on
the other relevant Party(s) and simultaneously filing copies of the demand,
together with the required fees, with the AAA office in Louisville, Kentucky.
The demand shall contain those provisions required by the Rules of the AAA and
shall also request the AAA to designate and appoint one person as the
arbitrator, who shall act as the sole arbitrator to resolve the matter.
11.3 Discovery. The Parties shall have the right of discovery in
accordance with the Federal Rules of Civil Procedure except that discovery may
commence immediately upon the service of the demand for arbitration. A Party's
unreasonable refusal to cooperate in discovery shall be deemed to be refusal to
proceed with arbitration and, until AAA has designated the arbitrator, the
Parties may enforce their rights (including the right of discovery) in the
courts. Such enforcement in the courts shall not constitute a waiver of a
Party's right to arbitration. Upon his or her appointment, the arbitrator shall
have the power to enforce the Parties' discovery rights.
11.4 Binding Decision. The Parties shall be bound by the decision of
the arbitrator and accept his or her decision as the final determination of the
matter in dispute. The prevailing Party(s) shall be entitled to enter a judgment
in any court upon any arbitration award made pursuant to this Section 11. The
arbitrator shall award the costs and expenses of the arbitration, including
reasonable attorneys' fees, disbursements, arbitration expenses, arbitrators'
fees and the administrative fee of the AAA, to the prevailing Party as shall be
determined by the arbitrator. The dispute resolution procedure set forth in
this Section 11 shall be the sole procedure by which disputes between the
Parties under this Agreement or any Ancillary Document shall be resolved.
12. Miscellaneous Provisions.
12.1 Confidentiality of Agreement. Each Party agrees that it will treat
in confidence all Confidential Information which such Party shall have obtained
regarding the other Parties during the course of the negotiations leading to the
consummation of the transactions contemplated in this Agreement (whether
obtained before or after the date hereof), the investigation provided for herein
and the preparation of this Agreement and the Ancillary Documents, and in the
event the transactions contemplated in this Agreement shall not be consummated,
each Party will return to the other Parties all copies of Confidential
Information which have been furnished in connection herewith. Such Confidential
Information shall not be communicated to any third Person (other than to each
Party's
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counsel, accountants, financial advisors and lenders). No other Party shall use
any Confidential Information in any manner whatsoever except solely for the
purpose of evaluating the proposed purchase and sale of the Assets; provided,
that after the Closing, Caldwell, Caldwell Tanks and their Affiliates may use or
disclose any Confidential Information included in the Assets or the assets,
properties or rights of the Subsidiaries, or otherwise reasonably related to the
Subsidiaries or their assets, properties or rights. The obligation of each Party
to treat such documents, materials and other information in confidence shall not
apply to any Confidential Information which (a) is required to be disclosed
under applicable Legal Requirements or judicial process, but only to the extent
it must be disclosed, or (b) such Party reasonably deems necessary to disclose
to obtain any of the consents or approvals contemplated herein.
12.2 Consent to Jurisdiction. Each of the Parties hereto consents and
voluntarily submits to personal jurisdiction in the Commonwealth of Kentucky and
in the courts in such state located in Jefferson County and the United States
District Court for the Western District of Kentucky in any Proceeding arising
out of or relating to this Agreement or any Ancillary Document which is not
subject to arbitration as provided in Section 11, and agrees that all claims in
respect of the Proceeding may be heard and determined in any such court. Each
of the Parties hereto further consents and agrees that such Party may be served
with process in the same manner as a Notice may be given under Section 12.12.
Brown, GSAC and Matrix agree that any action instituted by any of them against
Caldwell with respect to this Agreement or any Ancillary Document will be
instituted exclusively in the United States District Court for the Western
District of Kentucky or, if such Court does not have jurisdiction to adjudicate
such action, in the Courts of the Commonwealth of Kentucky located in Jefferson
County. Brown, GSAC and Matrix irrevocably and unconditionally waive and agree
not to plead, to the fullest extent permitted by law, any objection that they
may now or hereafter have to the laying of venue or the convenience of the forum
of any action with respect to this Agreement or any Ancillary Document in the
United States District Court for the Western District of Kentucky and the Courts
of the Commonwealth of Kentucky located in Jefferson County. Each Party agrees
that a final judgment in any Proceeding so brought, and in any arbitration
proceeding pursuant to Section 11, shall be conclusive and may be enforced by
suit on the judgment or in any other manner provided by law or in equity, in any
court or other tribunal having competent jurisdiction.
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12.3 Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement and the Ancillary Documents. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement or the relevant Ancillary Document shall be construed as if drafted
jointly by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement or such Ancillary Document. Any reference to any
Legal Requirement shall be deemed also to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise. In the event of
any inconsistency between the statements in the body of this Agreement and those
in the Schedules (other than an exception expressly set forth as such in the
Schedules rather than in any agreement or document referred to in or attached to
such Schedule), the statements in the body of this Agreement will control. The
Parties intend that each representation, warranty, covenant and obligation
contained herein or in any Ancillary Document shall have independent
significance. If any Party has breached any representation, warranty, covenant
or obligation contained herein or in any Ancillary Document in any respect, the
fact that there exists another representation, warranty, covenant or obligation
relating to the same subject matter (regardless of the relative levels of
specificity) which the Party has not breached shall not detract from or mitigate
the fact that the Party is in breach of the first representation, warranty,
covenant or obligation. Unless the context clearly states otherwise, the use of
the singular or plural in this Agreement or in any Ancillary Document shall
include the other and the use of any gender shall include all others. All
references to "Section" or "Sections" in this Agreement refer to the
corresponding Section or Sections of this Agreement. Unless otherwise expressly
provided, the word "including" does not limit the preceding words or terms.
12.4 Entire Agreement. This Agreement embodies the entire agreement and
understanding of the Parties hereto with respect to the subject matter herein
contained, and supersedes all prior agreements, correspondence, arrangements and
understandings relating to the subject matter hereof, subject to Section 12.17.
This Agreement may be amended, modified, superseded, or canceled only by a
written instrument signed by all of the Parties hereto, and any of the terms,
provisions, and conditions hereof may be waived only by a written instrument
signed by the waiving Party.
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12.5 Exhibits and Schedules. All Exhibits to this Agreement and the
Schedules hereto shall constitute part of this Agreement and shall be deemed to
be incorporated herein by reference, in their entirety and made a part hereof,
as if set out in full at the point where they first are mentioned. References
in this Agreement to a specific Schedule shall refer solely to such Schedule and
shall not be deemed to include material included in any other Schedule, unless
the Schedule specifically states that the material is to be included in another
specified Schedule.
12.6 Expenses. Except as otherwise specifically provided in this
Section 12.6 or elsewhere in this Agreement or any Ancillary Document, each
Party to this Agreement will bear its respective expenses incurred in connection
with the preparation, execution and performance of this Agreement, the Ancillary
Documents and the transactions contemplated herein and therein, including all
fees and expenses of agents, representatives, counsel and accountants. In the
event of the termination of this Agreement, the obligation of each Party to pay
its or his own expenses will be subject to any rights of each party arising from
a breach of this Agreement by another party.
12.7 Governing Law. This Agreement is executed and delivered in, and
shall be governed by and construed in accordance with the laws of, the
Commonwealth of Kentucky, without giving effect to any conflict of law rule or
principle that might require the application of the laws of another
jurisdiction.
12.8 Headings. The headings in this Agreement are included for purposes
of convenience only and shall not be considered a part of this Agreement in
construing or interpreting any provision hereof.
12.9 Invalidity of Provisions; Severability. If any provision of this
Agreement or any Ancillary Document, or the application thereof to any Person or
circumstance, shall to any extent be held in any Proceeding to be invalid,
illegal or unenforceable, the remainder of this Agreement or such Ancillary
Document, or the application of such provision to persons or circumstances other
than those to which it was held to be invalid, illegal or unenforceable, shall
not be affected thereby, and shall be valid, legal and enforceable to the
fullest extent permitted by Legal Requirements, but only if and to the extent
such enforcement would not materially and adversely frustrate the parties'
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essential objectives as expressed herein and therein. Notwithstanding the
foregoing, each Party hereto agrees that it has reviewed the provisions of this
Agreement and each Ancillary Document, and that the same, taken as a whole, are
fair and reasonable. The Parties hereto shall endeavor in good faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions, the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
12.10 No Public Announcement. Neither Caldwell, Caldwell Tanks, Brown,
GSAC nor Matrix shall, without the approval of the others, make any press
release or other public announce ment concerning the transactions contemplated
in this Agreement, except as and to the extent that any such Party shall be so
obligated by law or the rules of any stock exchange, in which case the other
Party shall be advised and the Parties shall use their reasonable best efforts
to cause a mutually agreeable release or announcement to be issued; provided,
the foregoing shall not preclude communications or disclosures necessary to
implement the provisions of this Agreement and the Ancillary Documents or to
comply with Securities and Exchange Commission disclosure obligations. Matrix
and Caldwell Tanks will consult with each other concerning the means by which
Brown's employees, customers, and suppliers and others having dealings with the
Brown Parties will be informed of the transactions contemplated in this
Agreement, and Caldwell Tanks will have the right to be present for any such
communication.
12.11 No Third Party Beneficiaries. This Agreement is not intended to,
and shall not be construed to, confer upon any third Person any right, remedy or
benefit nor is it intended to be enforceable by any third Person, and shall only
be enforceable by the Parties hereto, and their respective successors and
permitted assigns.
12.12 Notices.
(a) Giving of Notices. All notices, requests, consents, approvals,
waivers, demands and other communications required or permitted to be given or
made hereunder or under any Ancillary Document (except to the extent otherwise
expressly contemplated in that Ancillary Document) (collectively, "Notices")
shall be given or made in writing and (1) personally delivered against a written
receipt, or (2) sent by confirmed telephonic facsimile, or (3) delivered to a
reputable express
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messenger service (such as Federal Express, DHL Courier and United Parcel
Service) for overnight delivery, addressed as follows (or to such other address
as a Party shall have given Notice to the other):
If to Brown: Brown Steel Contractors, Inc.
c/o Matrix Service Company
10701 East Ute Street
Tulsa, Oklahoma 74116
Attn: Chief Financial Officer
Fax: 918/838-8810
With a copy (which shall
not constitute notice) to: Larry W. Sandel, Esq.
Hall, Estill, Hardwick, Gable, Golden & Nelson
320 South Boston Avenue, Suite 400
Tulsa, Oklahoma 74103-3708
Fax: 918/594-0505
If to Matrix: Matrix Service Company
10701 East Ute Street
Tulsa, Oklahoma 74116
Attn: Chief Financial Officer
Fax: 918/838-8810
With a copy (which shall not
constitute notice) to: Larry W. Sandel, Esq.
Hall, Estill, Hardwick, Gable, Golden & Nelson
320 South Boston Avenue, Suite 400
Tulsa, Oklahoma 74103-3708
Fax: 918/594-0505
If to GSAC: Georgia Steel Acquisition Corp.
c/o Matrix Service Company
10701 East Ute Street
Tulsa, Oklahoma 74116
Attn: Chief Financial Officer
Fax: 918/838-8810
With a copy (which shall not
constitute notice) to: Larry W. Sandel, Esq.
Hall, Estill, Hardwick, Gable, Golden & Nelson
320 South Boston Avenue, Suite 400
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Tulsa, Oklahoma 74103-3708
Fax: 918/594-0505
If to Caldwell Tanks: Caldwell Tanks, Inc.
4000 Tower Road
Louisville, Kentucky 40219
Attn: President
Fax: 502/966-8732
With a copy (which shall not
constitute notice) to: Patrick R. Northam, Esq.
Greenebaum Doll & McDonald PLLC
3300 National City Tower
Louisville, Kentucky 40202
Fax: 502/587-3695
If to Caldwell: Caldwell Tanks Alliance, LLC
c/o Caldwell Tanks, Inc.
4000 Tower Road
Louisville, Kentucky 40219
Attn: President
Fax: 502/966-8732
With a copy (which shall not
constitute notice) to: Patrick R. Northam, Esq.
Greenebaum Doll & McDonald PLLC
3300 National City Tower
Louisville, Kentucky 40202
Fax: 502/587-3695
(b) Time Notices Deemed Given. All Notices shall be effective upon
being properly personally delivered, or upon confirmation of a telephonic
facsimile, or upon the delivery to a reputable express messenger service. The
period in which a response to any such Notice must be given shall commence to
run from the date on the receipt of a personally delivered notice, or the date
of confirmation of a telephonic facsimile or two days following the proper
delivery of the Notice to a reputable express messenger service, as the case may
be.
12.13 Specific Performance. Brown, GSAC, Matrix, Caldwell Tanks and
Caldwell acknowledge and agree that the others would be damaged irreparably in
the event any of the
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provisions of this Agreement or any Ancillary Document are not performed in
accordance with their specific terms or otherwise are breached. Accordingly,
Brown, GSAC and Matrix, on the one hand, and Caldwell Tanks and Caldwell on the
other, agree that the other(s) shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement or any
Ancillary Document, and to enforce specifically this Agreement and the Ancillary
Documents and the terms and provisions hereof and thereof in any action
instituted in any court of the United States or any state thereof having
jurisdiction over Caldwell, Caldwell Tanks, Brown, GSAC and Matrix and the
matter (subject to the provisions set forth in Section 12.2), in addition to any
other remedy to which it or he may be entitled, at law or in equity.
12.14 Successors and Assigns.
(a) Assignment. The rights of any Party under this Agreement shall
not be assignable by such Party hereto prior to the Closing without the consent
of the other Parties, except that the rights of Caldwell hereunder may be
assigned prior to the Closing, without the consent of Brown, GSAC or Matrix, to
any corporation all of the outstanding capital stock of which is owned or
controlled by Caldwell Tanks, or to any general or limited partnership, or
limited liability company or partnership, in which Caldwell Tanks or any such
corporation is a general partner or controlling member; provided that (1) such
assignment shall not result in Caldwell, Caldwell Tanks, GSAC, Matrix or Brown
having to amend its respective Notification and Report Form filed under the Hart
Scott Rodino Antitrust Improvements Act in connection with the transactions
contemplated herein, (2) the assignee shall assume in writing all of Caldwell's
obligations to Brown, Matrix and GSAC hereunder, (3) Caldwell shall not be
released from any of its obligations hereunder by reason of such assignment, and
(4) Brown's, Matrix's and GSAC's obligations under this Agreement shall be
subject to the delivery by such assignee, on or prior to the Closing Date, of a
certificate signed on its behalf containing representations and warranties
similar to those made by Caldwell in Section 5 and an opinion of counsel for
Caldwell with respect to the assignee which is similar to the opinion with
respect to Caldwell set forth in Section 9.2. Following the Closing, any Party
may assign any of its rights hereunder or under any Ancillary Document, but no
such assignment shall relieve it of its obligations hereunder; provided, that no
such assignment by Brown of any of its rights under the Broad Street Property
Agreement or the Fayetteville Road Property Agreement may be effected without
the prior written consent of Caldwell, except as otherwise expressly permitted
therein.
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(b) Successors. All of the terms, provisions and conditions of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the Parties hereto and their successors and permitted assigns. The
successors and permitted assigns hereunder shall include without limitation,
in the case of Caldwell, any permitted assignee as well as the successors in
interest to such permitted assignee (whether by merger, liquidation (including
successive mergers or liquidations) or otherwise). This Agreement and all of
its provisions and conditions are for the sole and exclusive benefit of the
Parties and their successors and permitted assigns.
12.15 Time of Essence. Time is of the essence to the performance of the
obligations set forth in this Agreement.
12.16 Waiver. The rights and remedies of the Parties to this Agreement
are cumulative and not alternative. Neither the failure nor any delay by any
Party in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable Legal Requirement, (a) no claim or right
arising out of this Agreement or the documents referred to in this Agreement can
be discharged by one Party, in whole or in part, by a waiver or renunciation of
the claim or right unless in writing signed by the other Parties, (b) no waiver
that may be given by a Party will be applicable except in the specific instance
for which it is given, and (c) no notice to or demand on one Party will be
deemed to be a waiver of any obligation of such Party or of the right of the
party giving such notice or demand to take further action without notice or
demand as provided in this Agreement or the documents referred to in this
Agreement.
12.17 Preservation of Claims. Notwithstanding anything contained in
this Agreement or in any Ancillary Document to the contrary, and except as
otherwise provided in the following sentence, the Parties agree that any
misrepresentation, breach of warranty or non-fulfillment of any covenant or
agreement by a Party under or in the Original Agreement occurring prior to the
execution and delivery of this Agreement shall be deemed for all purposes to be
a misrepresentation, breach of warranty or non-fulfillment of such covenant or
agreement by that Party under this
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Agreement, and shall entitled the other Parties to all rights and remedies as
may be contemplated in this Agreement the same as if this Agreement had been
executed and effective as of the Effective Date. Notwithstanding the foregoing,
in the event the Closing occurs, Caldwell and Caldwell Tanks shall not
thereafter: (a) have a right to bring a misrepresentation or breach of warranty
claim against Brown, GSAC or Matrix as of the Effective Date or the Closing Date
for any matter, event or circumstance that was not (but should have been)
included in any of the disclosure Schedules of Brown, GSAC and Matrix attached
to and made a part of the Original Agreement, to the extent such matter, event
or circumstance is expressly disclosed by Brown, GSAC and Matrix in their
disclosure Schedules delivered in connection with this Agreement and dated as of
August 31, 1999; (b) have a right to bring a claim for breach by Brown, GSAC
and/or Matrix of any of their covenants and agreements contained in Section 6.2
of the Original Agreement or Section 6.2 of this Agreement with respect to any
action, omission, event or circumstance arising following the Effective Date and
expressly disclosed by Brown, GSAC and Matrix in their above-described
disclosure Schedules dated as of August 31, 1999; or (c) have a right to bring a
misrepresentation or breach of warranty claim against Brown, GSAC or Matrix as
of the Effective Date or the Closing Date based upon any representation or
warranty contained in the Original Agreement if the relevant matter, event or
circumstance giving rise to such claim would not have given rise to such a
misrepresentation or breach of warranty claim under this Agreement had it,
rather than the Original Agreement, been executed and delivered as of the
Effective Date.
12.18 Bulk Sales Compliance. Caldwell hereby waives compliance by Brown
with the provisions of any bulk sales or bulk transfer laws of the State of
Georgia or any other applicable jurisdictions, and Matrix, GSAC and Brown hereby
agree to defend, indemnify and hold harmless each of the Caldwell Indemnitees of
and from any Damages they may suffer or incur by reason of such non-compliance,
including without limitation, Damages arising out of any claims by creditors of
Brown or the Subsidiaries.
12.19 Transfer Taxes. Notwithstanding anything contained in Section 4.28
or elsewhere in this Agreement or any Ancillary Document to the contrary, Brown
shall be solely responsible for, and agrees to pay and discharge when due, any
and all sales, use, transfer and other similar Taxes that may at any time be
assessed against any of the Parties by reason of the sale of the Assets
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contemplated herein, or otherwise by reason of the consummation of the
transactions contemplated in this Agreement and the Ancillary Documents.
Caldwell shall execute such documents as may be reasonably requested by Matrix
in order to qualify such sale or other transaction for any available exemptions
from such sales, use, transfer or other similar Taxes.
[Signatures Are on the Following Page]
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In Witness Whereof, the Parties hereto have duly executed this Agreement as
of the date first above written.
Caldwell Tanks, Inc.
By:____________________________________
Title:_________________________________
("Caldwell Tanks")
Caldwell Tanks Alliance, LLC
By: ___________________________________
Title:_________________________________
("Caldwell")
Brown Steel Contractors, Inc.
By:____________________________________
Title:_________________________________
(the "Brown")
Matrix Service Company
By:____________________________________
Title:_________________________________
("Matrix")
Georgia Steel Acquisition Corp.
By:____________________________________
Title:_________________________________
("GSAC")
EXHIBIT A
CERTAIN DEFINED TERMS
As used in the Amended and Restated Stock Purchase Agreement and Conversion
to Asset Purchase Agreement dated as of August 31, 1999, among Caldwell Tanks,
Inc., Caldwell Tanks Alliance, LLC, Brown Steel Contractors, Inc., Georgia Steel
Acquisition Corp. and Matrix Service Company, the following capitalized terms
shall have the meanings set forth below. References hereto to particular
Sections shall refer to Sections of that Agreement, unless the context clearly
requires a different construction.
"Acquisition Balance Sheet" -- shall have the meaning set forth in Section
4.5.
"Accounts Receivable" -- shall mean, without duplication, (i) all Billings,
(ii) the unbilled amount of the Contract Price of any contract, agreement or
work order that is identified on Exhibit B but is no longer a WIP Contract as of
the Closing, as contemplated in Section 2.2(a)(3)(B) of the Agreement, and (iii)
all other accounts that would be reflected as an account receivable of the Brown
Parties on a balance sheet of the Brown Parties as of the Closing on the Closing
Date prepared in accordance with GAAP, in each case except as contemplated in
Section 2.2(c).
"Acquisition Balance Sheet" -- shall have the meaning set forth in Section
4.5.
"Affiliate" -- any Person that, directly or indirectly, through one or more
intermediaries, controls or is controlled by, or is under common control with,
the Person specified. For purposes of this definition, "control" means the
power, direct or indirect, to direct or cause the direction of the management
and policies of the relevant Person, whether by ownership of securities,
contract, law or otherwise.
"Agreement" -- this Amended and Restated Stock Purchase Agreement and
Conversion to Asset Purchase Agreement, the Exhibits hereto, including those
executed and delivered by one or more of the parties prior to or at the Closing
pursuant hereto, and the Schedules hereto.
"Ancillary Documents" -- shall have the meaning set forth in Section 4.1(a).
"Aqua Tanks" -- shall mean Aqua Tanks, Inc., a Georgia corporation.
"Assets" -- shall have the meaning set forth in Section 1.
"Assignment & Assumption Agreement" -- shall have the meaning set forth in
Section 2.5(a).
"Assumed Obligations" -- shall have the meaning set forth in Section 2.5(a).
"Audit Firm" -- shall have the meaning set forth in Section 2.2(b).
"Bank Agreement" -- shall mean collectively, (a) the Amended and Restated
Credit Agreement dated as of October 22, 1998, among Matrix, Brown, Brown Tanks,
Aqua Tanks, certain
other Affiliates of Matrix and Bank One, Oklahoma, N.A. (as successor in
interest to Liberty Bank and Trust Company of Tulsa, National Association) (the
"Credit Agreement"), and (b) the "Loan Documents" (as defined in the Credit
Agreement).
"Base Price" -- shall have the meaning set forth in Section 2.1.
"Benefit Plans" -- shall have the meaning set forth in Section 4.14(a).
"best efforts", "reasonable best efforts", "commercially reasonable efforts"
and words of similar effect shall mean -- the efforts that a prudent Person
desirous of achieving a result would use in similar circumstances to ensure that
such result is achieved as expeditiously as possible; provided, however, that an
obligation to use best efforts under any agreement does not require the Person
subject to that obligation to take actions that would result in a materially
adverse change in the benefits to such Person of such agreement and the
transactions described therein.
"Billings" -- shall have the meaning set forth in Section 2.2(a)(3)(A).
"Bond" -- shall have the meaning set forth in Section 6.20.
"Broad Street Property" -- shall have the meaning set forth in Section 1.2.
"Broad Street Property Agreement" -- shall have the meaning set forth in
Section 6.17.
"Brown" -- shall have the meaning set forth in the preamble of this
Agreement.
"Brown Acquisition Agreements" -- shall have the meaning set forth in Section
6.13.
"Brown Agreements" -- shall have the meaning set forth in Section 4.26.
"Brown Parties" -- shall have the meaning set forth in Section 2.1.
"Brown Steel" -- shall mean Brown Steel Services, Inc., a Georgia
corporation.
"Brown Tanks" -- shall mean Brown Tanks, Inc., a Georgia corporation.
"Caldwell" -- shall have the meaning set forth in the preamble of this
Agreement.
"Caldwell Indemnitees" -- shall have the meaning set forth in Section 10.2.
"Caldwell Tanks" -- shall have the meaning set forth in the preamble of this
Agreement.
"Claim" -- shall have the meaning set forth in Section 10.5.
"Claiming Party" -- shall have the meaning set forth in Section 10.5.
"Closing" -- shall have the meaning set forth in Section 3.1.
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"Closing Date" -- shall have the meaning set forth in Section 3.2.
"Code" -- shall have the meaning set forth in Section 4.14(a).
"Compensation Plans" -- shall have the meaning set forth in Section 4.14.
"Completion Costs" -- shall have the meaning set forth in Section
2.2(a)(3)(C).
"Computers" -- shall have the meaning set forth in Section 4.12(a).
"Confidential Information" -- Any information which is proprietary in nature
and non-public or confidential, in whole or in part; provided however
Confidential Information shall not include any information in the possession of
the receiving Party (a) that is independently developed by the such Party, (b)
is learned from a third Person not under any duty of confidence to the
disclosing Party or (c) becomes part of the public domain through no fault of
the receiving Party.
"Consent" -- any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).
"Contamination" -- shall have the meaning set forth in Section 6.17.
"Contract Price" -- shall have the meaning set forth in Section 2.2(a)(3)(A).
"Control" -- shall have the meaning set forth in Section 4.4.
"Copyrights" -- shall have the meaning set forth in Section 4.18.
"Core Software" -- shall have the meaning set forth in Section 4.11(b).
"DB Plan" -- shall have the meaning set forth in Section 4.14(b).
"Damages" -- shall have the meaning set forth in Section 10.2.
"Delisting" -- shall have the meaning set forth in Section 6.17.
"Disputed Contract" -- shall have the meaning set forth in Section
2.2(a)(3)(C).
"EBITDA" -- shall mean the sum of net income from operations before the
effect of changes in accounting principles and extraordinary items, plus the
following expenses or charges to the extent deducted from net income in such
period: depreciation, amortization, depletion, interest expense and income
Taxes, all determined in accordance with GAAP.
"Effective Date" -- shall mean June 9, 1999.
"Employment Agreements" -- shall have the meaning set forth in Section 4.32.
-3-
"Encumbrance" -- any charge, claim, community property interest, deed of
trust, condition, equitable interest, lien, mortgage, easement, encumbrance,
servitude, right of way, option, pledge, purchase agreement, conditional sale
agreement, proxy, security interest, right of first refusal, or restriction of
any kind, including any restriction on use, voting, transfer, receipt of income,
or exercise of any other attribute of ownership.
"Entity" -- any corporation (including any non-profit corporation), general
or limited partnership, limited liability company, joint venture, estate, trust,
association or any other type of business organization.
"Environment" -- soil, land surface or subsurface strata, surface waters
(including navigable waters, ocean waters, streams, ponds, drainage basins, and
wetlands), groundwaters, drinking water supply, stream sediments, ambient air
(including indoor air), plant and animal life, and any other environmental
medium or natural resource.
"Environmental, Health, and Safety Liabilities" -- any cost, damages,
expense, liability, obligation, or other responsibility arising from or under
Environmental Law or Occupational Safety and Health Law and consisting of or
relating to:
(a) any environmental, health, or safety matters or conditions (including
on-site or off-site contamination, occupational safety and health, and
regulation of chemical substances or products);
(b) fines, penalties, judgments, awards, settlements, legal or
administrative Proceedings, damages, losses, claims, demands and response,
investigative, remedial, or inspection costs and expenses arising under
Environmental Law or Occupational Safety and Health Law;
(c) financial responsibility under Environmental Law or Occupational
Safety and Health Law for cleanup costs or corrective action, including any
investigation, cleanup, removal, containment, or other remediation or response
actions ("Cleanup") required by applicable Environmental Law or Occupational
Safety and Health Law (whether or not such Cleanup has been required or
requested by any Governmental Body or any other Person) and for any natural
resource damages; or
(d) any other compliance, corrective, investigative, or remedial measures
required under Environmental Law or Occupational Safety and Health Law.
The terms "removal," "remedial," and "response action," include the types of
activities covered by the United States Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. (S) 9601 et seq., as amended
("CERCLA").
"Environmental Law" -- any Legal Requirement that requires or relates to:
(a) advising appropriate authorities, employees, and the public of
intended or actual releases of pollutants or hazardous substances or materials,
violations of discharge limits, or other prohibitions and of the commencements
of activities, such as resource extraction or construction, that could have
significant impact on the Environment;
-4-
(b) preventing or reducing to acceptable levels the release of pollutants
or hazardous substances or materials into the Environment;
(c) reducing the quantities, preventing the release, or minimizing the
hazardous characteristics of wastes that are generated;
(d) assuring that products are designed, formulated, packaged, and used
so that they do not present unreasonable risks to human health or the
Environment when used or disposed of;
(e) protecting resources, species, or ecological amenities;
(f) reducing to acceptable levels the risks inherent in the
transportation of hazardous substances, pollutants, oil, or other potentially
harmful substances;
(g) cleaning up pollutants that have been released, preventing the threat
of release, or paying the costs of such clean up or prevention; or
(h) making responsible parties pay private parties, or groups of them,
for damages done to their health or the Environment, or permitting self-
appointed representatives of the public interest to recover for injuries done to
public assets.
"Environmental Work Plan" -- shall have the meaning set forth in Section
7.1(u).
"ERISA" -- the Employee Retirement Income Security Act of 1974 or any
successor law, and regulations and rules issued pursuant to that Act or any
successor law.
"Exchange Act" -- the Securities Exchange Act of 1934, as amended, or any
similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.
"Excluded Assets" -- shall have the meaning set forth in Section 1.2.
"Fabrication Services Agreement" -- shall have the meaning set forth in
Section 7.1(h).
"Facilities" -- any real property, leaseholds, or other interests currently
or formerly owned or operated by the Brown Parties (and each of them) and any
buildings, plants, structures, or equipment (including motor vehicles, tank
cars, and rolling stock) currently or formerly owned or operated by any of the
Brown Parties.
"Fayetteville Road Property" -- shall have the meaning set forth in Section
1.2.
"Fayetteville Road Property Agreement" -- shall have the meaning set forth in
Section 6.17.
"Field Employees" -- shall have the meaning set forth in Section 6.13(a).
"Financial Statements" -- shall have the meaning set forth in Section 4.5.
-5-
"GAAP" -- generally accepted United States accounting principles,applied on a
basis consistent with the basis on which the Balance Sheet and the other audited
Financial Statements referred to in Section 4.5 were prepared.
"Georgia EPD" -- shall have the meaning set forth in Section 6.17.
"Governmental Authorization" -- any approval, consent, certificate,
registration, variance, exemption, right of way, franchise, privilege, immunity,
grant, ordinance, license, permit, waiver, or other authorization issued,
granted, given, or otherwise made available by or under the authority of any
Governmental Body or pursuant to any Legal Requirement.
"Governmental Body" -- any (a) nation, state, county, city, town, village,
district, or other jurisdiction of any nature; (b) federal, state, local,
municipal, foreign, or other government; (c) governmental or quasi-governmental
authority of any nature (including any governmental agency, branch, department,
official, or entity and any court or other tribunal); (d) multi-national
organization or body; or (e) body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, police, regulatory or taxing
authority or power of any nature.
"Hazardous Activity" -- the distribution, generation, handling, importing,
management, manufacturing, processing, production, refinement, Release, storage,
transfer, transportation, treatment or use (including any withdrawal or other
use of groundwater) of Hazardous Materials in, on, under, about, or from the
Facilities or any part thereof into the Environment, and any other act,
business, operation, or thing that increases the danger, or risk of danger, or
poses an unreasonable risk of harm to persons or property on or off the
Facilities, or that may affect the value of the Facilities or any of the Brown
Parties.
"Hazardous Materials" -- any waste or other substance that is listed,
defined, designated, or classified as, or otherwise determined to be, hazardous,
radioactive, or toxic or a pollutant or a contaminant under or pursuant to any
Environmental Law, including any admixture or solution thereof, and specifically
including petroleum and all derivatives thereof or synthetic substitutes
therefor and asbestos or asbestos-containing materials.
"Immaterial Liabilities" -- shall have the meaning set forth in Section
4.16(d).
"Immaterial Violations" -- shall have the meaning set forth in Section
4.16(a).
"Indemnifying Party" -- shall have the meaning set forth in Section 10.5.
"Intellectual Property" -- shall have the meaning set forth in Section 4.18.
"Interim Balance Sheet" -- shall have the meaning set forth in Section 4.5.
"Inventory" -- shall have the meaning set forth in Section 2.1.
"Inventory Price" -- shall have the meaning set forth in Section 2.1.
-6-
"IRC" -- the Internal Revenue Code of 1986 or any successor law, and
regulations issued by the IRS pursuant to the Internal Revenue Code or any
successor law.
"IRS" -- the United States Internal Revenue Service or any successor agency,
and, to the extent relevant, the United States Department of the Treasury.
"Legal Requirement" -- any federal, state, local, municipal, foreign,
international, multina tional, or other Order, constitution, law, ordinance,
principle of common law, regulation, statute, or treaty.
"Letter of Intent" -- shall have the meaning set forth in Section 7.l(h).
"Liability" -- shall have the meaning set forth in Section 4.6.
"List" -- shall have the meaning set forth in Section 6.17.
"Marks" -- shall have the meaning set forth in Section 4.18.
"Matrix" -- shall have the meaning in the preamble of this Agreement.
"Matrix Indemnitees" -- shall have the meaning set forth in Section 10.4.
"Multiemployer Plans" -- shall have the meaning set forth in Section 4.14(a).
"Net Billings" -- shall have the meaning set forth in Section 2.2(a)(3)(A).
"Non-Competition Agreement" -- shall have the meaning set forth in Section
7.1(h).
"Non-Field Employees" -- shall have the meaning set forth in Section 6.13(a).
"Notices" -- shall have the meaning set forth in Section 12.12.
"Occupational Safety and Health Law" -- any Legal Requirement designed to
provide safe and healthful working conditions and to reduce occupational safety
and health hazards, and any program, whether governmental or private (including
those promulgated or sponsored by industry associations and insurance
companies), designed to provide safe and healthful working conditions.
"Order" -- any award, decision, injunction, judgment, writ, decree, order,
ruling, subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator or
arbitration panel.
"Ordinary Course of Business" -- an action taken by a Person will be deemed
to have been taken in the "Ordinary Course of Business" only if:
(a) such action is consistent with the past practices of such Person and
is taken in the ordinary course of the normal day-to-day operations of such
Person;
-7-
(b) such action is not required to be authorized by the board of
directors of such Person (or by any Person or group of Persons exercising
similar authority) and is not required to be specifically authorized by the
parent company (if any) of such Person; and
(c) such action is similar in nature and magnitude to actions customarily
taken, without any authorization by the board of directors (or by any Person or
group of Persons exercising similar authority), in the ordinary course of the
normal day-to-day operations of other Persons of similar size and similarly
situated that are in the same line of business as such Person.
"Original Agreement" -- shall have the meaning set forth in Recital A to this
Agreement.
"Orion Contract" -- shall have the meaning set forth in Section 6.15.
"Other Agreements" -- shall have the meaning set forth in Section 2.5(a).
"Other Work-in-Process Contracts" -- shall have the meaning set forth in
Section 2.2(a)(3)(B).
"Parties" -- shall have the meaning set forth in the preamble of this
Agreement.
"Patents" -- shall have the meaning set forth in Section 4.18.
"PBGC" -- shall have the meaning set forth in Section 4.14(b).
"Pension Plans" -- shall have the meaning set forth in Section 4.14.
"Permitted Encumbrances" -- shall mean (i) such Encumbrances and minor
imperfections of title that have arisen only in the Ordinary Course of Business;
(ii) Encumbrances for current Taxes not yet due or for Taxes being contested in
good faith by appropriate proceedings; (iii) any inchoate mechanic's and
materialmen's Encumbrances for construction in process; (iv) any workmen's,
repairmen's, warehousemen's and carriers Encumbrances arising in the Ordinary
Course of Business; (v) easements, quasi-easements, rights of way, restrictive
covenants and land use ordinances and zoning plans which are matters of public
record; (vi) deposits or pledges to secure obligations under workers'
compensation, social security or similar laws or under unemployment insurance;
(vii) any "Permitted Exceptions" (as contemplated in Section 6.4(b)); and (viii)
deposits or pledges to secure bids, tenders, contracts (other than contracts for
the payment of money), leases, statutory obligations, surety and appeal bonds
and other obligations of like nature arising in the Ordinary Course of Business;
in each case to the extent the same do not and will not detract in any material
respect from the value (determined as if such Encumbrance did not exist) of, or
impair the use or enjoyment of, or impair the sale, transfer, conveyance or
assignment for fair value (determined as if such Encumbrance did not exist) of,
any assets subject thereto or the operation of the businesses of the Brown
Parties as currently conducted or of Caldwell as proposed to be conducted.
"Person" -- any individual, entity, organization, labor union, or other
entity or Governmental Body.
"Plate Roll Contract" -- shall have the meaning set forth in Section 1.
-8-
"Preliminary Determination Date" -- shall have the meaning set forth in
Section 2.2(a)(3)(C).
"Proceeding" -- any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative or
informal, and whether in law or in equity) commenced, brought, conducted, or
heard by or before, or otherwise involving, any Governmental Body or arbitrator
or arbitration panel.
"Proprietary Property" -- all Marks, Patents, Copyrights, Rights in Mask
Works and Trade Secrets.
"Purchase Price" -- shall have the meaning set forth in Section 2.1.
"Real Property Agreements" -- shall have the meaning set forth in Section
6.17.
"Release" -- any spilling, leaking, emitting, discharging, depositing,
escaping, leaching, dumping or other releasing into the Environment, whether
intentional or unintentional.
"Remediation Levels" -- shall have the meaning set forth in Section 6.17.
"Remediation Notice" -- shall have the meaning set forth in Section 6.17.
"Representative" -- with respect to a particular Person, any director,
officer, employee, agent, consultant, advisor, or other representative of such
Person, including legal counsel, accountants, and financial advisors.
"Retained Obligations" -- shall have the meaning set forth in Section 2.5.
"Revised Exhibit B" -- shall have the meaning set forth in Section
---------
2.2(a)(3)(C).
"Rights in Mask Work" -- shall have the meaning set forth in Section 4.18(a).
"Securities Act" -- the Securities Act of 1933, as amended, or any similar
Federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect from time to time.
"Software" -- shall have the meaning set forth in Section 4.11(b).
"Subsidiaries" -- shall mean Brown Tanks, Aqua Tanks and Brown Steel.
"Subsidiary Bill of Sale" -- shall have the meaning set forth in Section
2.5(d).
"Survey" -- shall have the meaning set forth in Section 6.4(d).
"Tax" -- shall have the meaning set forth in Section 4.28.
"Tax Return" -- shall have the meaning set forth in Section 4.28.
-9-
"Threat of Release" -- a substantial likelihood of a Release that may require
action in order to prevent or mitigate damage to the Environment that may result
from such Release.
"Threatened" -- a claim, Proceeding, dispute, action, or other matter will be
deemed to have been "Threatened" if any demand or statement has been made
(orally or in writing) or any notice has been given (orally or in writing), or
if any other event has occurred or any other circumstances exist, that would
lead a prudent Person to conclude that such a claim, Proceeding, dispute,
action, or other matter is likely to be asserted, commenced, taken, or otherwise
pursued in the future.
"Undisclosed Liabilities" -- shall have the meaning set forth in Section 4.6.
"Welfare Plans" -- shall have the meaning set forth in Section 4.14.
"WIP Contracts" -- shall have the meaning set forth in Section 2.2(a)(3)(B).
-10-
EXHIBIT A-2
EXCLUDED ASSETS
1. All cash on hand of the Brown Parties as of the Closing Date ($300,000 as of
May 31, 1999).
2. All Accounts Receivable of the Brown Parties as of the Closing Date, other
than Accounts Receivable relating to the Other Work-in-Process Contracts as
provided in Section 2.2(c).
3. The capital stock of the Subsidiaries.
4. The minute book and stock ledger of Brown and the Subsidiaries.
5. All prepaid assets and tax related assets of the Brown Parties as of the
Closing Date (zero at May 31, 1999).
6. The Broad Street Property.
7. The Fayetteville Property.
8. The ASME Code stamp.
9. The contractor's licenses and similar business licenses listed on Schedule
4.10(b).
10. Claims by GSAC, Matrix and Brown against the Browns (as defined in Section
4.32) arising out of or related to the representations and warranties made
in, and the transactions contemplated by, the Stock Purchase Agreement
referred to in Section 4.32.
EXHIBIT D
PURCHASE PRICE ALLOCATION
The Purchase Price shall be allocated among the Assets in the manner set
forth below. In the event the Base Price shall be adjusted upward or downward
following the Closing pursuant to the application of Section 2.2(a) or Section
2.2(c), the Base Price as so adjusted shall continue to be allocated in the
percentages set forth below. Any adjustment upward or downward in the Inventory
Price following the Closing, pursuant to the application of Section 2.2(b),
shall serve to increase or decrease by a like amount the Inventory Price set
forth below. The Inventory Price set forth below shall also constitute the
agreement of Caldwell and Brown as to their estimate of the Inventory Price as
of the Closing (the Assigned Inventory Price) as contemplated in Section 2.2(b).
Base Price:
----------
Allocated Amount
----------------
Machinery & Equipment $ 3,421,400*
Inventory Price (To Be
---------------
Allocated Solely to Inventory) $ 848,183
* * * * * * *
_____________________
* Subject to Adjustment Following the Closing.