EXHIBIT 10.22
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STOCK 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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June 9, 1999
TABLE OF CONTENTS
Section Page
1. Purchase and Sale of Stock....................................................................................2
2. Purchase Price................................................................................................2
2.1 Purchase Price......................................................................................2
2.2 Adjustments to Purchase Price.......................................................................3
2.3 Payment of Fees and Expenses of Arbitration and Audit Firm.........................................11
2.4 Effect of Adjustments; Interest....................................................................11
2.5 Assumption of Retained Obligations; 338 Election; Distribution of Certain Assets...................12
3. Closing......................................................................................................17
3.1 Closing............................................................................................17
3.2 Closing Date.......................................................................................17
4. Representations and Warranties of ▇▇▇▇▇, GSAC and Matrix.....................................................18
4.1 Authority; Consents; Enforcement; Noncontravention.................................................18
4.2 Qualification of ▇▇▇▇▇ in Other States.............................................................19
4.3 Capitalization, Stock Ownership and Rights.........................................................20
4.4 Subsidiaries and Investments.......................................................................20
4.5 Financial Statements...............................................................................21
4.6 Absence of Undisclosed Liabilities.................................................................22
4.7 Absence of Certain Events..........................................................................22
4.8 Books of Account, Records and Minute Books.........................................................26
4.9 Certain Payments...................................................................................26
4.10 Compliance With Legal Requirements; Governmental Authorizations...................................27
4.11 Computer Systems; Software........................................................................29
4.12 Condition and Sufficiency of Assets...............................................................31
4.13 Contracts.........................................................................................32
4.14 Employee Benefits.................................................................................34
4.15 Employees and Independent Contractors.............................................................40
4.16 Environmental Matters.............................................................................42
4.17 Insurance.........................................................................................44
4.18 Intellectual Property.............................................................................45
4.19 Inventory.........................................................................................48
4.20 Labor Relations; Compliance.......................................................................49
4.21 Litigation; Compliance With Legal Requirements, Etc...............................................50
4.22 No Agent, Finder or Broker........................................................................51
4.23 Products..........................................................................................51
4.24 Real Property.....................................................................................52
4.25 Similar Business Ownership........................................................................54
4.26 Status of Contracts and Leases....................................................................55
4.27 Studies...........................................................................................56
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TABLE OF CONTENTS
Section Page
4.28 Taxes; Tax Returns; Tax Elections.................................................................56
4.29 Title to Properties...............................................................................63
4.30 Contract Price; ▇▇▇▇▇▇▇▇; Customer Offsets........................................................64
4.31 Bank Accounts.....................................................................................64
4.32 ▇▇▇▇▇ Family Claims; Dissolution of Georgia Steel Fabricators.....................................64
4.33 Completeness of Statement; Effect of Representations and Warranties...............................65
5. Representations and Warranties of ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks................................................66
5.1 Corporate Status...................................................................................66
5.2 Authority; Consents; Enforcement; Noncontravention.................................................66
5.3 No Agent, Finder or Broker.........................................................................67
5.4 Investment Intent..................................................................................67
5.5 Completeness of Statement; Effect of Representations and Warranties................................67
5.6 Litigation.........................................................................................68
6. Covenants of the Parties.....................................................................................68
6.1 No Negotiation.....................................................................................68
6.2 Operations of ▇▇▇▇▇ Pending Closing................................................................69
6.3 Investigation of ▇▇▇▇▇ by ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks..............................................71
6.4 Title Insurance; Surveys...........................................................................72
6.5 Lien and Litigation Searches.......................................................................74
6.6 Transition of ▇▇▇▇▇................................................................................74
6.7 Further Assurances.................................................................................74
6.8 Actions of the Parties.............................................................................75
6.9 Compliance With Conditions.........................................................................76
6.10 Consents; Actions.................................................................................76
6.11 Accounts Receivable...............................................................................76
6.12 Matrix's Guaranty.................................................................................77
6.13 Certain Employee Matters..........................................................................78
6.14 Books and Records.................................................................................83
6.15 Orion Contract....................................................................................83
6.16 Permits...........................................................................................84
6.17 [Intentionally Omitted]...........................................................................84
6.18 ▇▇▇▇▇▇▇▇ Tanks' Guaranty..........................................................................84
7. Conditions To Closing........................................................................................85
7.1 Conditions to Obligations of ▇▇▇▇▇▇▇▇.............................................................85
7.2 Conditions to Obligations of ▇▇▇▇▇ and Matrix......................................................90
8. Termination..................................................................................................92
8.1 Termination of Agreement...........................................................................92
8.2 Effect of Termination..............................................................................94
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Section Page
9. Deliveries and Actions To Be Taken At The Closing............................................................94
9.1 Deliveries by ▇▇▇▇▇, GSAC and Matrix...............................................................94
9.2 Deliveries by ▇▇▇▇▇▇▇▇.............................................................................96
9.3 Actions and Deliveries Simultaneous................................................................97
10. Indemnification; Remedies...................................................................................97
10.1 Survival; Right to Indemnification Not Affected by Knowledge......................................97
10.2 Indemnification and Payment of Damages By Matrix, GSAC and ▇▇▇▇▇..................................97
10.3 Limitation on Matrix's Indemnification............................................................99
10.4 Indemnification By ▇▇▇▇▇▇▇▇.......................................................................99
10.5 Procedure for Indemnification....................................................................100
10.6 No Liability of ▇▇▇▇▇ Parties....................................................................102
11. Arbitration................................................................................................103
11.1 Referral.........................................................................................103
11.2 Demand...........................................................................................103
11.3 Discovery........................................................................................103
11.4 Binding Decision.................................................................................103
12. Miscellaneous Provisions...................................................................................104
12.1 Confidentiality of Agreement.....................................................................104
12.2 Consent to Jurisdiction..........................................................................104
12.3 Construction.....................................................................................105
12.4 Entire Agreement.................................................................................106
12.5 Exhibits and Schedules...........................................................................106
12.6 Expenses.........................................................................................106
12.7 Governing Law....................................................................................106
12.8 Headings.........................................................................................107
12.9 Invalidity of Provisions; Severability...........................................................107
12.10 No Public Announcement..........................................................................107
12.11 No Third Party Beneficiaries....................................................................108
12.12 Notices.........................................................................................108
12.13 Specific Performance............................................................................110
12.14 Successors and Assigns..........................................................................111
12.15 Time of Essence.................................................................................112
12.16 Waiver..........................................................................................112
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EXHIBITS
Exhibit Description Section
A Certain Definitions.........................................................................Recital C
B WIP Contracts............................................................................2.2(a)(3)(B)
B-1 Other Work-in-Process Contracts..........................................................2.2(a)(3)(B)
C Excluded Assets...................................................................................2.5
D Allocation of Purchase Price......................................................................2.5
E Other Agreements.................................................................................4.26
F Orion Contract & June 2, 1999 Memorandum.........................................................6.15
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
Taxes..........................................................................................................4.28
Audited Returns.............................................................................................4.28(b)
Tax Basis, Etc..............................................................................................4.28(c)
Waivers.....................................................................................................4.28(f)
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Tax Agreements..............................................................................................4.28(g)
Title to Properties............................................................................................4.29
Bank Accounts..................................................................................................4.31
▇▇▇▇▇ Family Claims............................................................................................4.32
v
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement is made and entered into as of this 9th day of
June, 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. Matrix owns all of the issued and outstanding capital stock of GSAC, and
GSAC owns all of the issued and outstanding capital stock of ▇▇▇▇▇.
▇. ▇▇▇▇▇▇▇▇ desires to purchase from GSAC, and GSAC desires to sell to
▇▇▇▇▇▇▇▇, for the consideration and upon and subject to the terms, conditions
and covenants set forth in this Agreement, all of the issued and outstanding
capital stock of ▇▇▇▇▇.
C. Matrix 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
▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇.
E. 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 hereby
agree as follows:
1. Purchase and Sale of Stock. Upon the terms and subject to the
conditions set forth herein, GSAC agrees to sell, transfer, convey, assign and
deliver to ▇▇▇▇▇▇▇▇ at the Closing, and ▇▇▇▇▇▇▇▇ agrees to purchase and accept
from GSAC at the Closing, all of GSAC's rights, title and interests under, in
and to all of the issued and outstanding common capital stock, no par value, of
▇▇▇▇▇ owned of record or beneficially by GSAC (the "Shares"), consisting in the
aggregate of 12,000 Class A common Shares, and 8,000 Class B common Shares, free
and clear of all Encumbrances.
2. Purchase Price.
2.1 Purchase Price. ▇▇▇▇▇▇▇▇ shall pay to GSAC at the Closing, for and
in consideration of the sale by GSAC to ▇▇▇▇▇▇▇▇ of the Shares, a purchase price
equal to: (a) $6,000,000, subject to adjustment as contemplated in Section 22
(the "Base Price"); plus (b) an amount equal to the lesser of (i) the sum of
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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
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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 22. 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 prior to or following the Closing as contemplated in
Section 2.2.
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2.2 Adjustments to Purchase Price.
(a) Adjustments to Base Price. The Base Price shall be subject to
adjustment prior to and 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 ▇▇▇▇▇▇▇▇ by the ▇▇▇▇▇
Parties pursuant to the WIP Contracts exceeds (B) the sum of (y) the amount
determined by dividing (i) the aggregate of all Completion Costs (exclusive of
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liquidated damages, penalties or other similar payments) to be incurred by the
▇▇▇▇▇ Parties 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 the ▇▇▇▇▇ Parties 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 ▇▇▇▇▇▇▇▇ by the ▇▇▇▇▇
Parties 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
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(exclusive of liquidated damages, penalties or other similar payments) to be
incurred by the ▇▇▇▇▇ Parties in connection with the WIP Contracts following
the Closing by (ii) ninety-five percent (95%), plus (z) the aggregate of all
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liquidated damages, penalties or other similar payments included within the
definition of Completion Costs to be incurred by the ▇▇▇▇▇ Parties 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) 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
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owing by the relevant ▇▇▇▇▇ Party(s) 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
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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 and ▇▇▇▇▇▇▇▇ 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 is identified
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under the "Percentage Completed" (Pct. Cmpt.) column on Exhibit B as not being
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100% completed as of the date hereof, and then only to the extent 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 the Closing), together with such other customer contracts,
agreements and work orders as shall be added to Exhibit B by mutual written
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agreement of the 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
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any bids identified on Exhibit B-1 where any of the ▇▇▇▇▇ Parties have been
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notified they are the low bidder.
(C) "Completion Costs" shall mean the amounts determined by the
mutual agreement of the Parties prior to the Closing (subject to adjustment
following the Closing as contemplated below), for each WIP Contract, as being
the sum of all direct and indirect costs and expenses that will be incurred by
the ▇▇▇▇▇ Parties (or any of them) following the Closing in connection with
their 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 assumed and discharged by
GSAC as contemplated in Section 25), including without limitation, all costs
and expenses for (1) labor (whether employee or
-4-
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 any
▇▇▇▇▇ Party in accordance with the relevant subcontracts, and (7) any
liquidated damages, penalties or other similar payments that may become due
and owing by any ▇▇▇▇▇ Party 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
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prior to the Closing, which shall be separately dated and executed by the
Parties to signify their agreement to the same ("Revised Exhibit B"). The
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amounts set forth under that heading on Exhibit B attached hereto as of the
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date hereof shall have no relevance for purposes of this Agreement. The
Parties acknowledge that the Completion Costs for each WIP Contract set forth
on Revised Exhibit B as of the Closing will reflect their agreement as to
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those costs as of a date prior to the Closing Date, which shall be specified
on the face of Revised Exhibit B (the "Preliminary Determination Date").
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Revised Exhibit B shall also set forth, on a separate spreadsheet labeled
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"Estimated Closing Date Numbers," the Parties' best estimates of those
Completion Costs as of the Closing, based upon the anticipated work to be
performed by the relevant ▇▇▇▇▇ Party(s) during the period from the
Preliminary Determination Date through the Closing. The adjustment to the Base
Price paid at the Closing shall be determined based upon this best estimate of
the Completion Costs as of the Closing. However, the Parties acknowledge that
the estimates of the Completion Costs as of the Closing may not, by reason of
the timing for the Closing and the lack of available information prior
thereto, reflect the actual work performed by the relevant ▇▇▇▇▇ Party(s), and
the actual costs of the goods, materials and services utilized and delivered
by the relevant ▇▇▇▇▇ Party(s), between the Preliminary Determination Date and
the Closing. In light of the foregoing, ▇▇▇▇▇▇▇▇ and GSAC agree to meet with
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 (y) correspondingly adjust the
Completion Costs for the relevant WIP Contracts as of the Closing based upon
those determinations. In the event ▇▇▇▇▇▇▇▇ and GSAC agree in writing on an
appropriate adjustment to the Completion Costs based upon the determination
contemplated above, the Completion
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Costs as so adjusted shall be deemed to be final and binding on the Parties.
In the event ▇▇▇▇▇▇▇▇ and GSAC are not able to agree in writing on that
adjustment within fourteen (14) days after 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 that proceeding shall be 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. To the extent the
adjustment in the Completion Costs determined by agreement of the Parties (or
by the arbitration procedures described above) would have resulted in an
increase or decrease in the Base Price paid by ▇▇▇▇▇▇▇▇ at the Closing had the
amount of that adjustment been known to the Parties prior to the Closing,
▇▇▇▇▇▇▇▇ agrees to pay to GSAC (in the case of an increase in the Base Price),
or GSAC 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 GSAC and ▇▇▇▇▇▇▇▇
agree in writing on the adjustment or, as applicable, after the date on which
that adjustment is finally determined pursuant to Section 11. Any such payment
by ▇▇▇▇▇▇▇▇ or GSAC shall be deemed to be an adjustment in the Base Price.
Following any adjustment as contemplated above, the Completion Costs shall not
be subject to further adjustment following the Closing based upon the actual
completion costs incurred by the ▇▇▇▇▇ Parties in connection with those WIP
Contracts. In the event the Parties are unable to agree prior to the Closing
(pursuant to Revised Exhibit B) on the Completion Costs for a particular WIP
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Contract as of a Preliminary Determination Date, or on their best estimate of
those Completion Costs as of the Closing (each a "Disputed Contract"), then
▇▇▇▇▇▇▇▇ (for itself and as agent for ▇▇▇▇▇▇▇▇ Tanks) shall be entitled, in
its discretion, to elect (such election to be made as soon as practicable
after ▇▇▇▇▇▇▇▇ has determined the Parties are unable to so agree) to terminate
this Agreement upon ten (10) days prior written notice delivered to Matrix
(for itself and as agent for GSAC and ▇▇▇▇▇) at any time prior to the Closing,
and without further obligation on the part of any Party other than for any
breach or default by it occurring under this Agreement prior to such
termination. Notwithstanding the preceding sentence, any notice of termination
delivered by ▇▇▇▇▇▇▇▇ to Matrix as contemplated therein shall be rendered of
no further force and effect, and shall be deemed to be withdrawn by ▇▇▇▇▇▇▇▇,
in the event Matrix
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shall deliver to ▇▇▇▇▇▇▇▇, during the above-described 10-day notice period, a
written election by Matrix to continue this Agreement in force and effect, and
to consummate the transactions contemplated herein irrespective of those
Disputed Contracts (but subject to the conditions precedent set forth in
Section 7). In the event ▇▇▇▇▇▇▇▇ shall elect not to terminate this Agreement
as contemplated above, or Matrix shall elect to continue this Agreement as
contemplated in the immediately preceding sentence, and in the event the
Closing shall thereafter occur, then the Net ▇▇▇▇▇▇▇▇ and Completion Costs
relating to the Disputed Contract(s) shall not be used in calculating any
adjustment to the Base Price pursuant to Section 2.21 or 2.22, and those
amounts shall be omitted from Revised Exhibit B. Thereafter the ▇▇▇▇▇ Party
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which is a party thereto shall perform and discharge each Disputed Contract in
accordance with its terms (other than the obligations thereunder that are
Retained Obligations), and shall incur only customary and reasonable costs and
expenses in doing so, considering the nature of the project and the
location(s) in which the Disputed Contracts are being performed. Within 120
days following the completion of performance by the relevant ▇▇▇▇▇ Party under
each Disputed Contract (exclusive of warranty obligations thereunder),
▇▇▇▇▇▇▇▇ shall be entitled, upon written election delivered to GSAC during
that 120-day period, to refer that Disputed Contract to arbitration pursuant
to Section 11, for the sole limited purposes of determining the Net ▇▇▇▇▇▇▇▇
by the relevant ▇▇▇▇▇ Party(s) as of the Closing for that Disputed Contract
(absent the written agreement of the Parties regarding those Net ▇▇▇▇▇▇▇▇),
the aggregate direct and indirect costs and expenses incurred by the relevant
▇▇▇▇▇ Party(s) following the Closing in order to complete its performance
under that Disputed Contract in accordance with its terms, and whether and to
the extent those costs and expenses were customary and reasonable under the
circumstances. Upon a determination of the amounts described above pursuant to
Section 11, or upon any written agreement of the Parties as to those amounts
in lieu of arbitration, then the Base Price shall be further adjusted by the
difference between the Net ▇▇▇▇▇▇▇▇ relating to that Disputed Contract and the
amount determined by dividing the customary and reasonable costs and expenses
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of completion of that Disputed Contract incurred by the relevant ▇▇▇▇▇
Party(s) by ninety-five percent (95%),with a corresponding payment by ▇▇▇▇▇▇▇▇
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(in the case of a Base Price increase) or by GSAC (in the case of a Base Price
decrease) becoming immediately due and payable to the other of those Parties
within thirty (30) days after their written agreement or the final arbitration
decision, as applicable.
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(4) Notwithstanding anything contained in this Agreement to the
contrary, in the event the adjustment to the Base Price determined in
accordance with this Section 22 (exclusive of any adjustments relating to
Disputed Contracts) would result in an increase or decrease in the Base Price
of greater than $200,000, then ▇▇▇▇▇▇▇▇ (in the case of an increase in the
Base Price) or GSAC (in the case of a decrease in the Base Price) shall be
entitled, at any time prior to the Closing (but not thereafter), to terminate
this Agreement upon written notice delivered to the other of those parties and
to Matrix and ▇▇▇▇▇, upon which termination the Parties hereto shall be
relieved of any further obligation or liability to the other Parties other
than for their breach or default under this Agreement occurring prior to such
termination.
(5) Notwithstanding anything contained in this Agreement to the
contrary, in the event there are one or more Disputed Contracts as
contemplated above, and in the event: (A) the cumulative difference between
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(y) the Completion Costs for all such Disputed Contracts, collectively,
believed by ▇▇▇▇▇▇▇▇ to be correct as of the Preliminary Determination Date
specified in Revised Exhibit B, and (z) such Completion Costs believed by GSAC
--------- ---
to be correct as of that date, exceeds $100,000; or (B) the cumulative
difference between (y) ▇▇▇▇▇▇▇▇'▇ best estimate of all Completion Costs for
-------
all Disputed Contracts, collectively, as of the Closing, and (z) GSAC's best
---
estimate of such Completion Costs as of the Closing, exceeds $100,000; then
either ▇▇▇▇▇▇▇▇ or GSAC shall be entitled, at any time prior to the Closing
(but not thereafter), to terminate this Agreement upon written notice
delivered to the other of those Parties and to ▇▇▇▇▇▇▇▇ Tanks, or Matrix and
▇▇▇▇▇ (as applicable), upon which termination the Parties hereto shall be
relieved of any further obligation or liability to the other Parties other
than for their breach or default under this Agreement occurring prior to such
termination.
(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 GSAC. Based
on that physical inventory, an estimate of the Inventory Price shall be assigned
by mutual agreement of GSAC 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 GSAC or
-8-
▇▇▇▇▇▇▇▇ 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 GSAC 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 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 GSAC 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 GSAC 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 GSAC (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
GSAC) 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.
-9-
(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 22, 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
circumstances: 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 GSAC, 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 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, and shall continue to be the asset and property of
that ▇▇▇▇▇ Party following the Closing, notwithstanding the provisions of
Section 2.5(d) below. In the event GSAC or Matrix shall, at any time following
the 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 ▇▇▇▇▇▇▇▇ Tanks of the same, and shall promptly remit and pay all
such amounts to ▇▇▇▇▇▇▇▇ Tanks for the account of the relevant ▇▇▇▇▇ Party.
Within fifteen (15) days after the Closing Date, GSAC shall provide to ▇▇▇▇▇▇▇▇
a Certificate duly executed by an officer of GSAC 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 GSAC 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 22 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 GSAC shall submit the Inventory Price to an Audit Firm
for determination as provided
-10-
in Section 2.2(b), ▇▇▇▇▇▇▇▇ and GSAC 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 GSAC shall submit the
resolution of Completion Costs, of the matters relating to the Disputed
Contracts, 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 GSAC 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 GSAC 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 Retained Obligations; 338 Election; Distribution of
Certain Assets. The Parties acknowledge and agree that ▇▇▇▇▇▇▇▇ is willing to
acquire the Shares of ▇▇▇▇▇ from GSAC, in lieu of acquiring all of the assets
and properties of ▇▇▇▇▇ directly from it, on the condition (a) that ▇▇▇▇▇▇▇▇
will be entitled to make an election with respect to ▇▇▇▇▇ and each of its
Subsidiaries, pursuant to Section 338 of the Internal Revenue Code of 1986, as
amended (the "Code") (other than pursuant to Section 338(h)(10)), to treat that
acquisition of Shares as a sale and purchase by ▇▇▇▇▇ and each of the
Subsidiaries of all of their respective assets and properties for tax purposes
(collectively, the "338 Election"), (b) that GSAC agree to assume and undertake
to pay and discharge any and all Taxes that may be assessed against ▇▇▇▇▇ or the
Subsidiaries, or ▇▇▇▇▇▇▇▇, by reason of that 338 Election or the deemed sales of
assets resulting therefrom (collectively, "338 Taxes"), (c) that GSAC agree to
assume and undertake to pay, perform and discharge all "Retained Obligations"
(as defined below), (d) that GSAC agree to contribute (and to cause its relevant
Affiliates to assign to GSAC so that it may contribute) to ▇▇▇▇▇ or its
Subsidiaries, as applicable, prior to the Closing and as a contribution to
capital, any and all "Contributed Obligations" (as defined below), and (e) that
GSAC agree to cause each ▇▇▇▇▇ Party, prior to the Closing, to distribute as a
dividend to GSAC all Accounts Receivable, prepaid assets and tax related assets
of
-11-
the ▇▇▇▇▇ Parties set forth or identified on Exhibit C attached hereto or
---------
generated in the Ordinary Course of Business of the ▇▇▇▇▇ Parties from the date
hereof through the Closing, and all cash on hand or in bank accounts of the
▇▇▇▇▇ Parties as of the Closing (such Accounts Receivable, prepaid assets, tax
related assets, and cash being hereinafter collectively referred to as the
"Excluded Assets"). In light of the foregoing, the Parties agree as follows:
(a) 338 Election. At the Closing, ▇▇▇▇▇▇▇▇ shall elect, pursuant to
Section 338 of the Code (but not Section 338(h)(10)) with respect to ▇▇▇▇▇ and
each of its Subsidiaries, to cause the purchase and sale of the Shares hereunder
to be treated for Tax purposes as a sale and purchase by ▇▇▇▇▇ and such
Subsidiaries of all of their respective assets and properties, tangible and
intangible (other than the Excluded Assets which shall have been conveyed and
dividended to GSAC prior to the Closing and the time of the 338 Election),
thereby resulting in a "step up" of ▇▇▇▇▇'▇ and such Subsidiaries' basis for Tax
purposes in those assets and properties following the Closing. The Parties each
agree to execute, deliver and file all such elections and other documents, and
to take all such other actions, whether at or after the Closing, to effect the
338 Election. The Parties further agree that, for purposes of that election,
the Purchase Price shall be deemed to be allocated among ▇▇▇▇▇'▇ and the
Subsidiaries' assets and properties in the manner to be set forth on Exhibit D
---------
to this Agreement, which shall be mutually agreed upon by the Parties and
attached to this Agreement prior to the Closing.
(b) Retained Obligations. At or prior to the Closing, GSAC, ▇▇▇▇▇
and each of the Subsidiaries shall each execute and deliver to the others and to
▇▇▇▇▇▇▇▇ an Assignment & Assumption Agreement in a form reasonably satisfactory
to the Parties (the "Assignment & Assumption Agreement"), pursuant to which
▇▇▇▇▇ and the Subsidiaries shall convey, assign and transfer to GSAC, and GSAC
shall assume and undertake to pay, perform and discharge, any and all Retained
Obligations (as defined below) effective as of the Closing. 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) on and as of the Closing on the Closing Date, 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
-12-
Section 4, and whether owing to GSAC,Matrix or any of its other Affiliates
(other than Contributed Obligations, which are being released and discharged as
of the Closing), to any Governmental Body, to any employee of any ▇▇▇▇▇ Party,
or to any other Person; but excluding from such Retained Obligations (i) any and
--------------------------------------------
all executory payment and performance obligations which first arise or accrue
following the Closing under the WIP Contracts, under the agreements identified
on Exhibit E, under the bid proposalsBrown identified on Exhibit E that have
--------- ---------
been accepted by customers but which are not yet the subject of definitive
contracts, under any contracts or agreements that may be entered into prior to
the Closing by ▇▇▇▇▇ arising out of any of the bid proposals referred to in the
immediately preceding clause, or 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 (collectively, the "Other Agreements") (other than warranty
or other similar obligations, or breach or default obligations, in either case
arising out of work performed or not performed, or materials, goods or services
delivered or not delivered, by any ▇▇▇▇▇ Party prior to the Closing, all of
which shall be Retained Obligations); (ii) any and all obligations of ▇▇▇▇▇ to
Matrix or GSAC arising under this Agreement which relate to periods after the
Closing and are to be performed after the Closing Date; and (iii) any and all
obligations that are expressly referred to in Clauses (A) through (L) below as
Excluded Obligations (the obligations described in (i), (ii) and (iii) above
being hereinafter collectively referred to as the "Excluded Obligations"). The
Retained Obligations being assumed and undertaken by GSAC 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, ▇▇▇▇▇▇▇▇, any Governmental Body or any other Person,
resulting from, arising out of or relating to: (A) 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 Excluded Obligations; (B) 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 a ▇▇▇▇▇ Party in the WIP Contracts and relating to the
services to be performed and goods and materials to be delivered by that ▇▇▇▇▇
Party thereunder following the Closing, all of which shall constitute Excluded
Obligations), regardless of whether the relevant warranty or guaranty claims are
asserted following the Closing; (C) any indebtedness of the ▇▇▇▇▇ Parties for
borrowed money to any Person as of the Closing; (D) any Encumbrances on or
affecting
-13-
any of the assets or properties of any ▇▇▇▇▇ Party prior to the Closing (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
---------
Excluded Obligations; provided, that such an inclusion of a Permitted
Encumbrance as an Excluded Obligation shall not relieve GSAC 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 the ▇▇▇▇▇ Parties, ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇
Tanks; (E) except for the debts, obligations and liabilities specifically
retained by or allocated to ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks pursuant to
Section 6.13 (all of which shall be deemed to be Excluded 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; (F) 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 date hereof and
prior to the Closing, in either case except to the extent such matters
constitute Excluded Obligations; (G) 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 Excluded Obligations); (H) any of the Excluded Assets; (I)
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 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;
(J) any obligation or liability to any surety, guarantor or other lender
(including without limitation, any reimbursement obligation)
-14-
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; (K) any 338 Taxes;
and (L) 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 613, or any failure or
refusal by any ▇▇▇▇▇ Party or ▇▇▇▇▇▇▇▇ to 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 4.29, and ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇ Tanks shall look solely to the provisions of Section 10.2(a) of this
Agreement for indemnification by Matrix with respect thereto. Except as
otherwise provided in Section 6.13, prior to any dividend of the Excluded Assets
as contemplated in (d), below, GSAC agrees to cause ▇▇▇▇▇ 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) Contribution of Indebtedness; Release. Prior to the Closing,
GSAC agrees to (A) cause all of its Affiliates (other than the ▇▇▇▇▇ Parties) to
assign and transfer to GSAC, free and clear of all Encumbrances, any and all
accounts receivable, notes receivable and other forms or kinds of indebtedness
of any of ▇▇▇▇▇ Parties to such Affiliates (whether or not in writing) and all
of their respective rights therein, and (B) assign and transfer to ▇▇▇▇▇, as an
additional contribution to capital (and not as a relinquishment or cancellation
of indebtedness of a kind that could give rise to cancellation of indebtedness
or other similar income (or related Tax liability) attributable to the ▇▇▇▇▇
Parties), all such accounts receivable, notes receivable and other forms or
kinds of indebtedness, together with any and all other accounts receivable,
notes receivable and other forms or kind of indebtedness of the ▇▇▇▇▇ Parties
(or any of them) to GSAC as of the Closing
-15-
(collectively, the "Contributed Obligations"). Except for encumbrances under the
Bank Agreement (which shall be released by Matrix and GSAC, at their expense,
prior to the Closing), GSAC and Matrix jointly and severally represent and
warrant to ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks that neither of GSAC or Matrix has, nor
have they caused or permitted any of their Affiliates to, assign or transfer to
any other Person at any time prior to the date hereof, any of their respective
rights or interests in or to any such accounts receivable, notes receivable or
other forms or kinds of indebtedness of the ▇▇▇▇▇ Parties to them (or any of
them), and Matrix and GSAC each agrees that it shall not, and shall not cause or
permit any of its Affiliates to, so assign or transfer any of those rights or
interests prior to the Closing, other than to GSAC and ▇▇▇▇▇ as contemplated
above. At the Closing, GSAC agrees to deliver to ▇▇▇▇▇▇▇▇ written evidence
reasonably satisfactory to ▇▇▇▇▇▇▇▇ that the foregoing assignments, transfers
and contributions to capital have been made prior to the Closing, and further
agrees, together with Matrix, to execute and deliver to each ▇▇▇▇▇ Party and
▇▇▇▇▇▇▇▇ a General Release of Claims in a form reasonably satisfactory to the
Parties, releasing the ▇▇▇▇▇ Parties and their successors and assigns from any
and all claims, obligations and the like owing to Matrix, GSAC and their
successors and assigns (the "Release of Claims").
(d) Assignment of Excluded Assets. Prior to the Closing, ▇▇▇▇▇ and,
as applicable, each Subsidiary shall execute and deliver to GSAC a ▇▇▇▇ of Sale
and Assignment in a form reasonably satisfactory to the Parties (the "▇▇▇▇ of
Sale"), pursuant to which the ▇▇▇▇▇ Parties will assign and transfer to GSAC
(directly or indirectly through ▇▇▇▇▇) as a dividend, for no additional
consideration, all of their Excluded Assets effective as of a time immediately
prior to the Closing and the making of the 338 Election.
3. Closing.
3.1 Closing. The closing of the transactions contemplated in this
Agreement ("Closing") shall take place at the offices of ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇ PLLC, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at 10:00
A.M., local time.
3.2 Closing Date. The Closing shall occur on May 28, 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
-16-
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, provided that the Closing
shall in no event occur prior to the earlier of (i) the expiration of the
statutory waiting period under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act
of 1976, as amended (the "HSR Act") (or such later date on which any extended
waiting period expires) or (ii) receipt of early termination of such statutory
waiting period from the Federal Trade Commission or the Antitrust Division of
the Department of Justice thereunder (the "Closing Date").
4. Representations and Warranties of ▇▇▇▇▇, GSAC and Matrix. ▇▇▇▇▇,
GSAC and Matrix, jointly and severally, hereby represent and warrant 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 Lost
Records Affidavit contemplated in Section 7.1 and the Environmental Work Plan
contemplated in Section 7.1 (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
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the transactions contemplated herein and in the Ancillary Documents, other than
the HSR Act filing described in Section 7.1, and the filing of any releases
under the UCC to the extent required to effect the transactions contemplated in
this Agreement. ▇▇▇▇▇ 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 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 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, which shall become 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 HSR Act filing described in Section 7.1, the releases of UCC Financing
Statements referred to above and the consent required under the Bank Agreement.
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4.2 Qualification of ▇▇▇▇▇ 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 Capitalization, Stock Ownership and Rights.
(a) Ownership of Shares. GSAC holds of record and owns beneficially,
and will transfer and deliver to ▇▇▇▇▇▇▇▇ at the Closing, 20,000 issued and
outstanding shares of the common capital stock, no par value, of ▇▇▇▇▇,
representing 100% of the issued and outstanding capital stock of ▇▇▇▇▇, free and
clear of all Encumbrances. GSAC has good and marketable title to the Shares,
and the sole right and authority to sell the Shares and to receive the Purchase
Price therefor.
(b) Capitalization. The authorized capital stock of ▇▇▇▇▇ consists
of 12,000 Class A shares of no par value voting common stock, and 8,000 Class B
shares of no par value voting common stock (collectively, the "Common Stock").
There are 12,000 Class A shares of Common Stock and 8,000 Class B shares of
Common Stock issued and outstanding. All of the Shares are duly authorized,
validly issued, fully-paid and non-assessable, and no personal liability
attaches to the ownership thereof.
(c) No Outstanding Rights. There are no, nor is there any agreement,
commitment or arrangement not yet fully performed which would result in any,
outstanding agreements, arrangements, subscriptions, options, warrants, calls,
rights or other commitments of any character relating to the issuance, sale,
purchase or redemption of Common Stock. There are no outstanding securities of
▇▇▇▇▇ other than the Shares.
(d) Stock Issued in Compliance With Laws. None of the Common Stock
has been issued in violation of any Legal Requirement pertaining to the issuance
of securities, or in violation of any rights, pre-emptive or otherwise, of any
present or past stockholder of ▇▇▇▇▇.
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4.4 Subsidiaries and Investments. ▇▇▇▇▇ 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
of the management and policies of such Person, whether by ownership of
securities, contract, law or otherwise. Schedule 4.4 sets forth the authorized
capital stock of the Subsidiaries, and indicates the number of issued and
outstanding shares of capital stock, the number of issued shares of capital
stock held as treasury shares and the number of shares of capital stock unissued
and not reserved for any purpose for each Subsidiary. There are no agreements,
arrangements, subscriptions, options, warrants, calls, rights or commitments of
any character relating to the issuance, sale, purchase or redemption of any
shares of capital stock of any of the Subsidiaries. All of the outstanding
shares of capital stock of each of the Subsidiaries are validly issued, fully
paid and nonassessable. All of the outstanding shares of capital stock of each
of the Subsidiaries are owned by ▇▇▇▇▇ of record and beneficially, and are free
from all Encumbrances. Each Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, with full corporate power and authority to own and lease its
properties as such properties are now owned and leased and to conduct its
business as and where such business has been and is now being conducted.
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
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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 (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) 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
-21-
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) 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), terminated, placed on
probation, disciplined, warned, or 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;
(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), 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;
-22-
(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 414 so as to increase the
benefits due the employees of any ▇▇▇▇▇ Party under any such plan or agreement;
(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), 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);
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(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;
(t) delayed or postponed the payment of any accounts payable or
other Liabilities outside the Ordinary Course of Business of such ▇▇▇▇▇ Party;
(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, and to preserve the goodwill of its
customers and others having business relationships with it; and
-24-
(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 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.
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, commission, gift, bribe,
rebate, payoff, influence payment or kickback, regardless of form, whether in
-25-
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.
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 and Section 4.14, 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), 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 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 ▇▇▇▇▇
-26-
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 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'
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;
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(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
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 ▇▇▇▇▇ Parties by ▇▇▇▇▇▇▇▇ following the Closing other than the operation
of their respective businesses in the
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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 any material 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; 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
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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 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 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
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property necessary for the conduct of the business of the ▇▇▇▇▇ Parties as
presently conducted and as presently proposed to be conducted.
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 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 (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;
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(g) any agreements, commitments or pledges for civic or charitable
donations;
(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.
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▇▇▇▇▇ has delivered to ▇▇▇▇▇▇▇▇ a correct and complete copy of each WIP Contract
and of each other written agreement listed in Schedule 4.13, 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 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, direc tors, 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
-33-
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
-34-
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
-35-
(including 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 beneficiaries), 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.
-36-
(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 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 thereunder) 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 414(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;
-37-
(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
-38-
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.
4.1 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 ▇▇▇▇▇
-39-
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 ▇▇▇▇▇.
4.1 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 to,
-40-
or cause any ▇▇▇▇▇ Party 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, and (iv) not
otherwise have a material adverse effect on the business or operations of any
▇▇▇▇▇ Party. 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, 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, summons,
warning, or other communication that relates to Hazardous Activity, Hazardous
Materials,
-41-
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
416, 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,
-42-
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
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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 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").
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(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 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 laws and regulations (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
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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; 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
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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 ▇▇▇▇▇ 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
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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) 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
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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 nature which might have
a material adverse effect on the business, financial condition, results of
operations or assets or properties of any ▇▇▇▇▇ Party 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. 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.
(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 4.2(b)1: (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.
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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.
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 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 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);
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(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;
(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) 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;
(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 424 who are in possession of space to which they
are entitled;
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(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, 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 6.4. ▇▇▇▇▇ 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 Agreements 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
party. Each ▇▇▇▇▇ Party has fulfilled and performed in all material respects its
obligations under each of ▇▇▇▇▇ Agreements, and the ▇▇▇▇▇
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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 with
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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 laws and regulations 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 ▇▇▇ ▇▇▇▇▇
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 428, 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 Shares 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.
(h) Preparation of Tax Returns; Payment of Taxes. Matrix (i) shall
cause ▇▇▇▇▇ and each Subsidiary, for all taxable periods of ▇▇▇▇▇ and each
Subsidiary ending (or the portion of any taxable period ending) on or prior to
the Closing Date, to be included in, and shall prepare and file or cause to be
filed, the United States consolidated federal income Tax Returns of Matrix or
its Affiliates and, where applicable, all other consolidated, combined or
unitary Tax Returns of Matrix
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or its Affiliates, and (ii) shall prepare and file or cause to be filed all
other Tax Returns of or which include ▇▇▇▇▇ and each Subsidiary, that are
required to be filed (taking into account any extensions) on or prior to the
Closing Date and shall pay any and all Taxes due with respect to the Tax Returns
referred to in clauses (i) and (ii) of this subparagraph, including, but not
limited to, any liability due with respect to any 338 Election. All Tax Returns
described in this subsection (h) shall be prepared in a manner consistent with
prior practice unless otherwise required by applicable Legal Requirements
relating to Taxes.
(i) Filings By ▇▇▇▇▇▇▇▇ Tanks. Following the Closing, ▇▇▇▇▇▇▇▇ Tanks
shall prepare or cause to be prepared and file or cause to be filed all Tax
Returns required of ▇▇▇▇▇ and each Subsidiary for periods ending after the
Closing Date and shall report on such returns (including any consolidated United
States federal income Tax Return filed by ▇▇▇▇▇▇▇▇ Tanks) any transactions by or
relating to ▇▇▇▇▇ and each Subsidiary occurring after the Closing Date. To the
extent any Taxes shown as due on such Tax Returns are the responsibility of
Matrix or GSAC as contemplated in this Agreement or in any Ancillary Document,
(i) such Tax Returns shall be prepared in a manner consistent with prior
practice unless otherwise required by applicable Legal Requirements relating to
Taxes, (ii) ▇▇▇▇▇▇▇▇ Tanks shall provide Matrix with copies of each such Tax
Return at least 20 days prior to the due date for filing such return, and (iii)
Matrix shall have the right to review and approve (which approval shall not be
unreasonably withheld) such Tax Returns for 10 days following receipt thereof.
Matrix and ▇▇▇▇▇▇▇▇ Tanks shall attempt in good faith to mutually resolve any
disagreements regarding such Tax Returns prior to the due date for filing
thereof. Any disagreements regarding such Tax Returns which are not resolved
prior to the filing thereof shall be promptly resolved by arbitration as
provided in Section 11; provided, that such arbitration proceeding shall not
prevent ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks from filing all such disputed Tax Returns on
a timely basis with the appropriate taxing authorities. The fees and expenses
of the arbitrator(s) shall be borne equally by Matrix and ▇▇▇▇▇▇▇▇ Tanks.
▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks shall file or cause to be filed all such Tax Returns
and shall, subject to receiving the payments from Matrix referred to in
subsection (j) below, pay or cause to be paid the Taxes shown as due thereon;
provided, however, that nothing contained in the foregoing shall in any manner
--------
terminate, limit or adversely affect any right of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Tanks or
▇▇▇▇▇ to receive indemnification pursuant to any provision in this Agreement.
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(j) Payment By Matrix. Not later than five days before the
due date for payment of Taxes with respect to any Tax Returns which ▇▇▇▇▇▇▇▇ or
▇▇▇▇▇▇▇▇ Tanks has the responsibility to file, Matrix shall pay to ▇▇▇▇▇▇▇▇ an
amount equal to that portion of the Taxes shown on such return for which GSAC
has an obligation to pay and discharge as contemplated in Section 2.5(b) and
Matrix and GSAC have an obligation to indemnify the ▇▇▇▇▇▇▇▇ Indemnitees (or any
of them) pursuant to the provisions of Section 10.2 hereof.
(k) Closure of Taxable Year. For federal income Tax
purposes, the taxable year of the ▇▇▇▇▇ Parties shall end as of the close of the
Closing Date and, with respect to all other Taxes, Matrix and ▇▇▇▇▇▇▇▇ Tanks
will, unless prohibited by applicable Legal Requirements, close the taxable
period of ▇▇▇▇▇ and each Subsidiary as of the Closing on the Closing Date.
Neither Matrix nor ▇▇▇▇▇▇▇▇ Tanks shall take any position inconsistent with the
preceding sentence on any Tax Return, except as otherwise required by Legal
Requirements. In any case where Legal Requirements do not permit ▇▇▇▇▇ and each
Subsidiary to close its taxable year on the Closing Date or in any case in which
a Tax is assessed with respect to a taxable period which includes the Closing
Date (but does not begin or end on that day), then Taxes, if any, attributable
to the taxable period of ▇▇▇▇▇ or the relevant Subsidiary, as the case may be,
beginning before and ending after the Closing Date shall be allocated (i) to
Matrix for the period up to and including the Closing Date, and (ii) to ▇▇▇▇▇▇▇▇
Tanks, ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇ (as applicable) for the period subsequent to the
Closing Date. Any allocation of income or deductions required to determine any
Taxes attributable to any period beginning before and ending after the Closing
Date shall be made by means of a closing of the books and records of the ▇▇▇▇▇
Parties as of the close of the Closing Date, provided that exemptions,
allowances or deductions that are calculated on an annual basis (including, but
not limited to, depreciation and amortization deductions) shall be allocated
between the period ending on the Closing Date and the period after the Closing
Date in proportion to the number of days in each such period. The foregoing
allocation of responsibility for Taxes as between Matrix, on the one hand, and
▇▇▇▇▇▇▇▇ Tanks, ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇ (as applicable), on the other hand, shall
include without limitation, any property Taxes assessed on or with respect to
the assets or properties of the ▇▇▇▇▇ Parties at any time prior to or following
the Closing, and attributable to any taxing period in which the Closing Date
falls, whether or not such Taxes are due and payable as of the Closing or in
that taxing period.
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(l) Cooperation. ▇▇▇▇▇▇▇▇ Tanks and Matrix agree to furnish
or cause to be furnished to each other, and each at their own expense, as
promptly as practicable, such information (including access to books and
records) and assistance, including making employees available on a mutually
convenient basis to provide additional information and explanations of any
material provided, relating to ▇▇▇▇▇ and each Subsidiary as is reasonably
necessary for the filing of any Tax Return, for the preparation for any audit,
and for the prosecution or defense of any claim, suit or proceeding relating to
any adjustment or proposed adjustment with respect to Taxes. Matrix shall retain
in its possession all Tax Returns and Tax records relating to the ▇▇▇▇▇ Parties
that are or might reasonably be expected to become relevant to any computations
or payments required after the Closing Date with respect to Tax matters relating
to any taxable period (or portions thereof) ending on or prior to the Closing
Date until the relevant statute of limitations has expired, and shall afford
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Tanks and ▇▇▇▇▇ reasonable access to all such Tax Returns and
Tax records, from time-to-time, upon their request. After such time, Matrix may
dispose of such materials, provided that prior to such disposition Matrix shall
give ▇▇▇▇▇▇▇▇ Tanks a reasonable opportunity to take possession of such
materials. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Tanks, ▇▇▇▇▇ and each Subsidiary shall retain in
their possession, and shall provide Matrix reasonable access to (including the
right to make copies of), such supporting Tax books and records relating to
▇▇▇▇▇ and each Subsidiary that are or might reasonably be expected to become
relevant to computations or payments with respect to material Tax matters
relating to any taxable period (or portions thereof) ending after the Closing
Date, until the relevant statute of limitations has expired (or prior thereto
with Matrix's consent).
(m) Notices. Each of ▇▇▇▇▇▇▇▇ Tanks and Matrix shall
promptly notify the other in writing of its receipt of notice of any pending or
threatened federal, state, local or foreign Tax audits, assessments or other
dispute affecting the Tax reporting positions of ▇▇▇▇▇ or any Subsidiary for
taxable periods (or portions thereof) ending on or prior to the Closing Date.
The failure of ▇▇▇▇▇▇▇▇ Tanks or Matrix to timely forward such notification in
accordance with the immediately preceding sentence shall not relieve the other
Party or its Affiliate of its obligation to pay such liability for Taxes except
and to the extent that the failure to timely forward such notification actually
prejudices the ability of the other Party or such Affiliate to contest such
liability for Taxes or increases the amount of such Taxes.
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(n) Matrix Representation. Matrix shall have the right to
represent the interests of ▇▇▇▇▇ and each Subsidiary in any Tax audit or
administrative or court proceeding relating to taxable periods ending on or
prior to the Closing Date and to employ counsel of its choice at its expense,
and ▇▇▇▇▇▇▇▇ Tanks shall have the right to consult with Matrix during such
proceedings at its own expense. ▇▇▇▇▇▇▇▇ Tanks agrees that it shall cooperate
fully, and cause ▇▇▇▇▇ and each Subsidiary to cooperate fully, with Matrix and
its counsel in the defense against or compromise of any claim in said
proceeding, and Matrix agrees that it shall pay any reasonable third party out
of pocket expenses incurred by ▇▇▇▇▇▇▇▇ Tanks, ▇▇▇▇▇ or any Subsidiary in
connection therewith. Notwithstanding the foregoing, if the results of such Tax
audit or proceeding reasonably could be expected to have a material adverse
effect on the assets, business, operations, Tax position or financial condition
of ▇▇▇▇▇▇▇▇ Tanks, ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇ or any of their Affiliates for taxable
periods ending after the Closing Date, then there shall be no settlement or
closing or other agreement with respect thereto without the written consent of
▇▇▇▇▇▇▇▇ Tanks (which consent shall not be unreasonably withheld or delayed).
(o) Joint Representation. Matrix and ▇▇▇▇▇▇▇▇ Tanks jointly
shall represent the interests of ▇▇▇▇▇ and each Subsidiary in any Tax audit or
administrative or court proceeding relating to any taxable period of ▇▇▇▇▇ or
such Subsidiary which includes (but does not begin or end on) the Closing Date.
Any disputes regarding the conduct or resolution of an such audit or proceeding
shall be resolved by arbitration as provided in Section 11. The fees and
expenses of the arbitrator(s) shall be borne equally by Matrix and ▇▇▇▇▇▇▇▇
Tanks. All other costs, fees and expenses paid to third parties in the course of
such audit or proceeding shall be borne by Matrix and ▇▇▇▇▇▇▇▇ Tanks in the same
ratio as the ratio in which, pursuant to the terms of this Agreement, Matrix and
▇▇▇▇▇▇▇▇ Tanks would share the responsibility for payment of the Taxes asserted
by the taxing authority in such claim or assessment if such claim or assessment
were sustained in its entirety.
(p) ▇▇▇▇▇▇▇▇ Tanks' Representation. ▇▇▇▇▇▇▇▇ Tanks shall
have the sole right to represent the interests of ▇▇▇▇▇ and each Subsidiary in
all other Tax audits or administrative or court proceedings except in the event
and to the extent they involve Taxes for which Matrix or GSAC has agreed to be
responsible pursuant to this Agreement or any Ancillary Document, in which event
the provisions of subsection (n) shall apply.
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(q) Refunds, Etc. Matrix shall be entitled to retain any Tax
refund (including, without limitation, refunds arising by reason of amended
returns filed after the Closing Date) or credit of federal, state, local or
foreign Taxes (plus any interest thereon received with respect thereto from the
applicable taxing authority) relating to ▇▇▇▇▇ and each Subsidiary that is paid
after the Closing Date with respect to (i) any period ending on or prior to the
Closing Date, (ii) the 338 Election or (iii) any period which includes the
Closing Date but does not begin or end on that day, provided that in the case of
any Tax refund described in clause (iii) of this subsection (q), the portion of
such Tax refund that shall belong to Matrix shall be that portion that is
attributable to the portion of that period which ends on the Closing Date
(determined on the basis of an interim closing of the books as of the Closing
Date), and ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Tanks or ▇▇▇▇▇▇▇▇ shall pay any such refund, and the
interest actually received thereon, to Matrix promptly upon receipt thereof.
▇▇▇▇▇▇▇▇ Tanks shall be entitled to the benefit of any and all other refunds or
credits of federal, state, local or foreign Taxes relating to the ▇▇▇▇▇ Parties.
Matrix and ▇▇▇▇▇▇▇▇ Tanks agree to cooperate, and ▇▇▇▇▇▇▇▇ Tanks agrees to cause
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ and each Subsidiary and their Affiliates to cooperate with
Matrix, after the Closing Date, with respect to claiming any refund referred to
in this subsection (q), including notifying Matrix or ▇▇▇▇▇▇▇▇ Tanks, as the
case may be, of the existence of any facts known to them that would constitute a
reasonable basis for claiming such a refund, providing all relevant information
available to and known to Matrix or ▇▇▇▇▇▇▇▇ Tanks (through ▇▇▇▇▇ or otherwise),
as the case may be, with respect to any such claim, filing and diligently
pursuing such claim, and in the case of the Party filing such a claim,
consulting with the other Party prior to agreeing to any disposition of such
claim.
(r) Payment of Certain Tax Assessments. Matrix and GSAC
jointly and severally agree to pay and discharge, as and when due, any and all
Taxes assessed against any of the ▇▇▇▇▇ Parties, or their respective assets or
properties, by virtue of their being members of the consolidated reporting group
of Matrix for the tax year in which the Closing occurs, whether attributable to
the income, assets or operations of members of that reporting group prior to the
Closing or during the remainder of that tax year following the Closing.
(s) Effectiveness; Not Representations or Warranties. The
Parties agree that their respective covenants and agreements set forth in
Subsections (h) through (r), inclusive, above shall
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be effective and binding on the relevant Parties only to the extent the Closing
shall occur, and shall not constitute representations or warranties by any
Party, notwithstanding that they are contained in this Section 4.
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. 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 the date hereof 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 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
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. Except as set forth on Schedule 4.32, none of the ▇▇▇▇▇ Parties is
currently indebted or otherwise obligated to Sample ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 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 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 war ranty, 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 are correct and complete as of the date
hereof 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
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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 ▇▇▇▇▇▇▇▇ places
complete reliance there on. Neither the representations and warranties of ▇▇▇▇▇,
GSAC and Matrix, nor the indemnification obligations of ▇▇▇▇▇, GSAC and Matrix,
shall be affected, qualified, modified or deemed waived by reason of the fact
that ▇▇▇▇▇▇▇▇ 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 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.
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▇▇▇▇▇▇▇▇ 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, other
than the HSR Act filing contemplated in Sections 7.1(g) and 7.2(d).
(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,
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 Shares 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 Investment Intent. ▇▇▇▇▇▇▇▇ is acquiring the Shares solely for
its own account for investment purposes, and not with a view to the distribution
thereof.
5.5 Completeness of Statement; Effect of Representations and
Warranties. No representation or warranty of ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks in this
Agreement contains any untrue
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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 are correct and complete as of
the date hereof 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 representa tions 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 ▇▇▇▇▇▇▇▇
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
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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.
6.2 Operations of ▇▇▇▇▇ Pending Closing. ▇▇▇▇▇, GSAC and Matrix
covenant and agree that from the date hereof 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 submit to any customer, any primary
contractor or any other Person any binding bid or offer committing to, and not
otherwise undertake any transactions or enter into any contracts, commitments or
arrangements for, the design, engineering, fabrication, construction,
installation or sale of any elevated tanks to or for the benefit of any Person
other than pursuant to the WIP Contracts identified on Exhibit B, and other than
---------
fabrication services for the account of Matrix and for which the ▇▇▇▇▇ Parties
are reimbursed for all of its costs and expenses, 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 WIP Contracts identified on Exhibit B or any of the Other
---------
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;
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(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;
(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 4.2;
(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;
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(l) not declare or pay any dividend, nor, directly or
indirectly, redeem, purchase or otherwise acquire any of its securities (except
for the dividend of the Excluded Assets as contemplated in this Agreement);
(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 (other than Excluded Assets) for ▇▇▇▇▇▇▇▇'▇ use and
benefit;
(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.
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6.3 Investigation of ▇▇▇▇▇ by ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks. From
the date hereof 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 infor mation 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.
6.4 Title Insurance; Surveys. GSAC will obtain, at its cost and
expense, and deliver to ▇▇▇▇▇▇▇▇ within five business days after the date of
this Agreement, 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 the respective ▇▇▇▇▇ Party 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).
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(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 GSAC 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, GSAC 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 date of this
Agreement, obtain and deliver to ▇▇▇▇▇▇▇▇ a survey by a licensed surveyor
reasonably acceptable to ▇▇▇▇▇▇▇▇, certified to ▇▇▇▇▇▇▇▇ and to the title
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 1, 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 ▇▇▇▇▇ Party(ies) having an
interest in that Parcel 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,
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(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 ▇▇▇▇▇ Parties
from Matrix 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.
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, execute, acknowledge and deliver, or will
cause to be done, executed, acknowledged and delivered, all such further acts,
assignments, transfers, conveyances, and assurances as may be reasonably
required to complete the transactions contemplated in this Agreement. 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 rea sonably require
for the purpose of giving to ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Tanks and the ▇▇▇▇▇ Parties the
full benefit of all the provisions of this Agreement and as may be reasonably
required to complete the transactions contemplated in this Agreement.
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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
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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. Matrix, GSAC, ▇▇▇▇▇▇▇▇
Tanks and ▇▇▇▇▇▇▇▇ shall prepare and file with the United States Department of
Justice and the Federal Trade Commission the notification and report form with
respect to the transactions contemplated in this Agreement as required pursuant
to the HSR Act. Matrix, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Tanks and ▇▇▇▇▇▇▇▇ shall each cooperate
with the other in the preparation of such filings and shall promptly comply with
any reasonable requests by the Department of Justice and of the Federal Trade
Commission for supplemental information, and shall use their commercially
reasonably efforts to obtain early termination of the waiting period under the
HSR Act.
6.11 Accounts Receivable. Following the Closing, ▇▇▇▇▇ agrees to
reasonably cooperate with GSAC, at GSAC's 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 assigned to GSAC. 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 GSAC. 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 GSAC, such amounts shall first
be deemed to be a payment by the relevant customer on such accounts receivable
owing to GSAC, with any excess amounts being deemed to be a payment on amounts
then owing to the relevant ▇▇▇▇▇ Party, in each case unless and to the extent
the relevant customer notifies any ▇▇▇▇▇ Party in writing that it is disputing
the indebtedness to GSAC, or that the amounts remitted by that customer are
specifically intended
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as a payment of amounts owing to any ▇▇▇▇▇ Party for services performed or
products delivered following the Closing. ▇▇▇▇▇ shall have no further obligation
to assist GSAC 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, GSAC 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 ▇▇▇▇▇ of all obligations of ▇▇▇▇▇ provided for in this
Agreement that are to be paid or performed by ▇▇▇▇▇ on or prior to the Closing
Date; and (b) the due and punctual payment and performance by GSAC of all
obligations of GSAC provided for in this Agreement or in any other Ancillary
Document, whether such payment or performance is required before or after the
Closing, including without limitation, GSAC's obligations pursuant to the
Assignment & Assumption Agreement to assume and undertake to pay, perform and
discharge all of the Retained Obligations. 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 (provided, that any non-performance by ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇
Tanks that would be a defense to ▇▇▇▇▇'▇ or GSAC's performance under this
Agreement 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 provision hereof. Matrix unconditionally waives all demands,
protests and notices of 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:
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(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) the ▇▇▇▇▇ Parties shall remain 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 Closing, the Parties shall
mutually agree upon the amount of accrued vacation of the Non- Field
Employees for which Matrix and GSAC are responsible as contemplated above,
and such amount shall be deducted from the Purchase Price otherwise payable
by ▇▇▇▇▇▇▇▇ to GSAC at the Closing. Following that deduction the
responsibility of the ▇▇▇▇▇ Parties thereafter for such accrued vacation
shall be an Excluded 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.
(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 ▇▇▇▇▇ Parties, ▇▇▇▇▇▇▇▇ 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
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(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. Promptly
following the Closing, Matrix shall (x) inform each of the Field Employees
that they will not, following the Closing, be entitled to any vacation (or
payments in lieu thereof) from the ▇▇▇▇▇ Parties that may have accrued
prior to the Closing under the vacation policies of the ▇▇▇▇▇ Parties in
effect prior to the Closing, (y) offer to each of those Field Employees in
lieu of such accrued vacation one (1) week's wages or salaries (based upon
that employee's wage rate or salary in effect immediately prior to the
Closing), and (z) inform those Field Employees that, should they desire to
take time off from work at any time following the Closing in order to use
vacation time that they believe accrued prior to the Closing, they shall
not be entitled to their wages or salary during that vacation time.
(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 the ▇▇▇▇▇ Parties, ▇▇▇▇▇▇▇▇ 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 the ▇▇▇▇▇ Parties shall remain responsible
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 Excluded 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 ▇▇▇▇▇
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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 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 the ▇▇▇▇▇ Parties following the Closing.
▇▇▇▇▇▇▇▇ Tanks agrees that it shall not, and shall not permit ▇▇▇▇▇▇▇▇ or any
▇▇▇▇▇ Party 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
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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.
(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 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 each ▇▇▇▇▇ Party of and from any debts, obligations and liabilities of any
nature to those employees. The Parties further
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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 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' businesses from Governmental Bodies, indemnifying, defending
and holding harmless Caldwell, Brown, 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
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reasonable notice during regular business hours for the sole purpose of
obtaining information for use as aforesaid, and will permit such other Party(s)
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 or may become parties to one or more related agreements pertaining to the
completion of construction by Matrix and the ▇▇▇▇▇, 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"). The latest draft 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 ▇▇▇▇▇'▇ ▇▇▇▇▇ negligence or
willful misconduct occurring following the Closing), 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. 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
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breach or default by ▇▇▇▇▇ under the terms of the Orion Contract or would give
rise to damages for which Matrix will be unable or will refuse to defend,
indemnify and hold harmless ▇▇▇▇▇ 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 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 ▇▇▇▇▇ required under applicable Legal Requirements for the
continued use, maintenance and effectiveness of such Governmental
Authorizations.
6.17 [Intentionally Omitted].
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 other 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 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
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unenforceability of this Agreement or any provision hereof. ▇▇▇▇▇▇▇▇ 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.
7. CONDITIONS TO CLOSING.
7.1 Conditions to Obligations of ▇▇▇▇▇▇▇▇. The obligations of
▇▇▇▇▇▇▇▇ to purchase the Shares 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:
(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 date hereof, 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 date hereof) 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, 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 date hereof, 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
▇▇▇▇▇▇▇▇ Indemnities, pursuant to Section 10.2 hereof, from and against all
Damages resulting from or arising out of such
-83-
misrepresentation, 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
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,
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(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 Shares. 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 Shares or any other capital stock of ▇▇▇▇▇ or any of the
Subsidiaries, voting, equity or otherwise, or (2) is entitled to all or any
portion of the Purchase Price payable for the Shares.
(g) ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Compliance. All applicable waiting
periods (and any extensions thereof) under the HSR Act shall have expired or
otherwise been terminated.
(h) Closing Documents. Matrix, GSAC and ▇▇▇▇▇ shall have
executed and delivered to ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks the Release of Claims, 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 Certificates and Stock Powers, and the other
certificates, instruments, legal opinion and documents contemplated in Section
9, and ▇▇▇▇▇ and each of the Subsidiaries shall have executed and delivered the
▇▇▇▇ of Sale to Matrix.
(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 tax exempt financing to them
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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 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.
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(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, and of all debts, obligations and liabilities of the ▇▇▇▇▇
Parties, each as contemplated in Section 7.2(f), below.
(p) [Intentionally Omitted]
(q) Purchase Price Allocation. The Parties shall have agreed
in writing upon the Purchase Price allocation (Exhibit D) as contemplated in
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Section 2.5(a).
(r) Accrued Vacation. The Parties shall have agreed upon the
accrued vacation for Non-Field Employees as contemplated in Section 6.13(a).
(s) Termination of Employees. The ▇▇▇▇▇ Parties shall have
terminated their employees as contemplated in Section 6.13(e).
(t) Lost Records Affidavit; New Share Certificates. Matrix,
GSAC, ▇▇▇▇▇ and each of the Subsidiaries shall have executed and delivered to
▇▇▇▇▇▇▇▇ a Lost Records Affidavit in a form reasonably satisfactory to ▇▇▇▇▇▇▇▇,
pursuant to which Matrix, GSAC, ▇▇▇▇▇ and the Subsidiaries shall represent,
warrant and certify to ▇▇▇▇▇▇▇▇ that the share certificates representing the
Shares, the share certificates representing the issued and outstanding capital
stock of the Subsidiaries, and all other stock transfer records and cancelled
share certificates of ▇▇▇▇▇ and the Subsidiaries, have been lost or misplaced,
and covenanting with ▇▇▇▇▇▇▇▇ that in the event such share certificates and
other records and cancelled certificates (or any of them) are found in the
future by Matrix or GSAC, the same shall be promptly forwarded to ▇▇▇▇▇▇▇▇.
Matrix shall also have caused ▇▇▇▇▇ to issue to GSAC, and caused the
Subsidiaries to issue to ▇▇▇▇▇, new share certificates representing all of the
Shares and the shares of the outstanding capital stock of the Subsidiaries, in
substitution for those that have been lost or misplaced.
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(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, 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 ▇▇▇▇▇ and Matrix. The obligations
of Matrix, GSAC and ▇▇▇▇▇ to sell the Shares 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
date hereof, 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 date hereof) 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.
(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.
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(d) ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Compliance. All applicable waiting
periods (and any extensions thereof) under the HSR Act shall have expired or
otherwise been terminated.
(e) Closing Documents. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks shall
have executed and delivered to Matrix the Non-Competition 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 in accordance with the Bank
Agreement and in form and substance satisfactory to Matrix and Matrix shall have
obtained, at its expenses, a complete and absolute release and discharge of (i)
all Encumbrances on, against or affecting any of the assets or properties of the
▇▇▇▇▇ Parties (other than the Excluded Assets) and in favor of Bank One,
Oklahoma, N.A. or any other Person, and (ii) any and all debts, obligations or
liabilities of the ▇▇▇▇▇ Parties to Bank One, Oklahoma, N.A. or any other
Person, in each case 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.
(i) Purchase Price Allocation. The Parties shall have agreed
in writing upon the Purchase Price allocation (Exhibit D) as contemplated in
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Section 2.5(a).
(j) 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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(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.
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
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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 July 30, 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 2.2(a)(4) or 2.2(a)(5).
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) Shares. Certificates representing the Shares, duly
endorsed (or accompanied by duly executed stock powers) for transfer to ▇▇▇▇▇▇▇▇
(collectively, the "Certificates & Stock Powers").
(b) Resolutions. Copies of resolutions duly adopted by the
Board 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 execute and deliver to ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Tanks, ▇▇▇▇▇ and each of the
Subsidiaries the Release of Claims, and shall deliver to ▇▇▇▇▇▇▇▇ written
evidence of the assignment, transfer and contribution to capital as contemplated
in 2.5(c), and 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) Resignations. Each of the ▇▇▇▇▇ Parties shall deliver to
▇▇▇▇▇▇▇▇ executed written resignations of each of the directors and officers of
the ▇▇▇▇▇ Parties effective as of the Closing Date.
(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.
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(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 ▇▇▇▇▇▇▇▇.
(i) Fabrication Services Agreement. GSAC and ▇▇▇▇▇ shall
execute and deliver the Fabrication Services Agreement.
(j) Assignment & Assumption Agreement, ▇▇▇▇ of Sale and
Environmental Work Plan. GSAC, Matrix, ▇▇▇▇▇ and each of the Subsidiaries shall
execute and deliver the Assignment & Assumption Agreement and the Environmental
Work Plan contemplated in Section 7.1(u), and the ▇▇▇▇▇ Parties shall execute
and deliver the ▇▇▇▇ of Sale.
(k) Delivery of Corporate Records; Lost Records Affidavit.
The complete minute books and corporate seal of the ▇▇▇▇▇ Parties, and the Lost
Records Affidavit contemplated in Section 7.1(t).
(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 appro priate) 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
GSAC shall direct in writing at least two (2) business days prior to the Closing
Date.
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(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.
(d) Non-Competition Agreement and Environmental Work Plan.
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks shall execute and deliver the Non-Competition
Agreement and the Environmental Work Plan contemplated in Section 7.1(u).
(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 contemplated.
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
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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 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
▇▇▇▇▇. Prior to the Closing Matrix, GSAC and ▇▇▇▇▇ each agrees, and following
the Closing Matrix and GSAC each agrees, jointly and severally, to defend,
indemnify and hold ▇▇▇▇▇, the Subsidiaries, ▇▇▇▇▇▇▇▇ 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 date of this
Agreement; it being understood that the foregoing limitation on recovery shall
have no relevance in the event the Closing shall occur;
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(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 (other than ▇▇▇▇▇'▇ obligations to GSAC or Matrix pursuant to
the Non-Competition Agreement, the ▇▇▇▇ of Sale, the Assignment and Assumption
Agreement and the Fabrication Services Agreement); and
(c) the Retained Obligations (and each of them); it being
understood and agreed by Matrix, GSAC and ▇▇▇▇▇ that the foregoing right of the
▇▇▇▇▇▇▇▇ Indemnitees to be defended, indemnified and held harmless from and
against the Retained Obligations may be exercised by the ▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇ in connection with those representations and warranties,
and regardless of whether the ▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇▇ Indemnitees. All Damage
payments to ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks hereunder shall be deemed adjustments to
the Purchase Price.
10.3 Limitation on Matrix's Indemnification. Notwithstanding the
provisions of Section 10.2, Matrix and GSAC shall have no obligation to
indemnify or hold harmless any ▇▇▇▇▇▇▇▇ Indemnitee pursuant to Section 10.2(a)
until such time as the sum of all Damages that are suffered or incurred by all
▇▇▇▇▇▇▇▇ Indemnitees, collectively, resulting from or arising out of all
misrepresentations and breaches of warranties shall exceed $50,000 in the
aggregate, at which time Matrix and GSAC shall indemnify and hold harmless all
▇▇▇▇▇▇▇▇ Indemnitees pursuant to Section 10.2(a) 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 ▇▇▇▇▇▇▇▇
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).
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10.4 Indemnification By ▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks,
jointly and severally, shall defend, indemnify and hold 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 connection with: (a) any misrepresentation or breach of warranty
made by ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks in this Agreement or in any Ancillary
Document to which it is a party; and (b) any breach by ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇
Tanks of any covenant, agreement or obligation of ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks pursuant to
Subclause 10.4(a), above, only to the extent that ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇▇ Indemnitee (in the case
of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Tanks and ▇▇▇▇▇) or any Matrix Indemnitee (in the case of
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 ▇▇▇▇▇▇▇▇ Indemnitee or Matrix
Indemnitee (as applicable) hereunder, except to the extent that such
Indemnifying Party demonstrates that the defense of such action was
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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.
(b) Assumption of Defense. If any Claim is brought against a
▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇▇ Indemnitee
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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 any determination made in such Claim or any
compromise or settlement effected by the Claiming Party or any other ▇▇▇▇▇▇▇▇
Indemnitee or Matrix Indemnitee (as applicable).
(c) Exception. Notwithstanding the foregoing, if a Claiming
Party or any other ▇▇▇▇▇▇▇▇ 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.
10.6 No Liability of ▇▇▇▇▇ Parties. In the event a Claim is made
against Matrix or GSAC for any Damages incurred by ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Tanks or
any other ▇▇▇▇▇▇▇▇ Indemnitee, Matrix and GSAC shall not, nor shall they be
entitled to, maintain, assert or make a claim against
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any ▇▇▇▇▇ Party, or the directors, officers, Affiliates (other than claims or
defenses against ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ Tanks with respect to their rights or
obligations under this Agreement or the Non- Competition Agreement), successor
or assigns of any ▇▇▇▇▇ Party, for contribution, indemnity or any other
recovery, it being the intention of the Parties hereto that after the Closing
the ▇▇▇▇▇ Parties shall have no liability, obligation or responsibility to
Matrix or GSAC for any breach or nonfulfillment of the representations,
warranties, covenants or obligations of ▇▇▇▇▇, GSAC or Matrix made in this
Agreement, or for any indemnitees of ▇▇▇▇▇, GSAC or Matrix set forth herein.
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.
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.
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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 counsel, accountants, financial advisors and lenders). No
other Party shall use any Confiden tial Information in any manner whatsoever
except solely for the purpose of evaluating the proposed purchase and sale of
the Shares; provided, that after the Closing, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Tanks may
use or disclose any Confidential Information included in the assets, properties
or rights of the ▇▇▇▇▇ Parties, or otherwise reasonably related to the ▇▇▇▇▇
Parties 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 law 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
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in any Proceeding arising out of or relating to this Agreement 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.
▇▇▇▇▇, GSAC and Matrix agree that any action instituted by any of them against
▇▇▇▇▇▇▇▇ with respect to this Agreement 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. ▇▇▇▇▇, 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 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.
12.3 Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement 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. 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 shall
have independent significance. If any Party has breached any representation,
warranty, covenant or obligation contained herein 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
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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 shall
include the other and the use of any gender shall include all others. All
references to "Section" or "Sections" 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. 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 condi tions hereof may be waived only by a written instrument
signed by the waiving Party.
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, each Party to this Agreement will
bear its respective expenses incurred in connection with the preparation,
execution and performance of this Agreement and the transactions contemplated
herein, including all fees and expenses of agents, representatives, counsel and
accountants; provided Matrix will cause the ▇▇▇▇▇ Parties not to incur any
out-of-pocket expenses in connection with this Agreement and the transactions
contemplated herein. 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.
▇▇▇▇▇▇▇▇ Tanks and Matrix shall each pay one-half of the HSR Act filing fee, at
the time of such filing.
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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 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 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 law, but only if and to the
extent such enforcement would not materially and adversely frustrate the
parties' essential objectives as expressed herein. Notwithstanding the
foregoing, each Party hereto agrees that it has reviewed the provisions of this
Agreement, 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 ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Tanks,
▇▇▇▇▇, GSAC nor Matrix shall, without the approval of the others, make any press
release or other public announcement 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 or to comply with Securities and
Exchange Commission disclosure obligations. Matrix and ▇▇▇▇▇▇▇▇ Tanks will
consult with each other concerning the means by which ▇▇▇▇▇'▇ employees,
customers,
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and suppliers and others having dealings with the ▇▇▇▇▇ Parties will be informed
of the transactions contemplated in this Agreement, and ▇▇▇▇▇▇▇▇ 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 (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
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 ▇▇▇▇▇ prior to Closing: ▇▇▇▇▇ Steel Contractors, Inc.
c/o Matrix Service Company
▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Fax: 918/▇▇▇-▇▇▇▇
With a copy (which shall
not constitute notice) to: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Hall, Estill, Hardwick, Gable, Golden & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: 918/▇▇▇-▇▇▇▇
-105-
If to ▇▇▇▇▇ following Closing: ▇▇▇▇▇ Steel Contractors,
Inc.
c/o Caldwell Tanks, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Fax: 502/▇▇▇-▇▇▇▇
With a copy (which shall not
constitute notice) to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
PLLC
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: 502/▇▇▇-▇▇▇▇
If to Matrix: Matrix Service Company
▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial
Officer
Fax: 918/▇▇▇-▇▇▇▇
With a copy (which shall not
constitute notice) to: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Hall, Estill, Hardwick,
Gable, Golden & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: 918/▇▇▇-▇▇▇▇
If to GSAC: Georgia Steel Acquisition
Corp.
c/o Matrix Service Company
▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial
Officer
Fax: 918/▇▇▇-▇▇▇▇
With a copy (which shall not
constitute notice) to: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Hall, Estill, Hardwick,
Gable, Golden & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: 918/▇▇▇-▇▇▇▇
-106-
If to ▇▇▇▇▇▇▇▇ Tanks: ▇▇▇▇▇▇▇▇ Tanks, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Fax: 502/▇▇▇-▇▇▇▇
With a copy (which shall not
constitute notice) to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
PLLC
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: 502/▇▇▇-▇▇▇▇
If to ▇▇▇▇▇▇▇▇: ▇▇▇▇▇▇▇▇ Tanks Alliance,
LLC
c/o Caldwell Tanks, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Fax: 502/▇▇▇-▇▇▇▇
With a copy (which shall not
constitute notice) to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & 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 other would be damaged irreparably
in the event any of the provisions of this Agreement are not performed in
accordance with their specific terms or otherwise
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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 and to enforce specifically this Agreement and the terms and
provisions hereof 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 HSR
Act in connection with the transactions contemplated herein, (2) the assignee
shall assume in writing all of Caldwell's obligations to Matrix and GSAC
hereunder, (3) Caldwell shall not be released from any of its obligations
hereunder by reason of such assignment, and (4) 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, but no
such assignment shall relieve it of its obligations hereunder.
(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
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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.
[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")
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EXHIBIT A
CERTAIN DEFINED TERMS
As used in the Stock Purchase Agreement dated as of June 9, 1999, among
Caldwell Tanks, Inc., Caldwell Steel Fabricators, 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 the Stock Purchase 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 (but excluding
any such accounts receivable under the WIP Contracts).
"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 Stock 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.
"Assignment & Assumption Agreement" -- shall have the same meaning set
forth in Section 2.5(b).
"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.
"Bill of Sale" -- shall have the meaning set forth in Section 2.5(d).
"Billings" -- shall have the meaning set forth in Section 2.2(a)(3)(A).
"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.
"Certificates and Stock Powers" -- shall have the meaning set forth in
Section 9.1(a).
"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.
"Closing Date" -- shall have the meaning set forth in Section 3.2.
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"Code" -- shall have the meaning set forth in Section 2.5.
"Common Stock" -- shall have the meaning set forth in Section 4.3(b).
"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).
"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.
"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.
"Employment Agreements" -- shall have the meaning set forth in Section
4.32.
"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.
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"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. ss. 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;
(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;
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(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.
"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 2.5.
"Excluded Obligations" -- shall have the meaning set forth in Section
2.5(b).
"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.
"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.
"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.
"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.
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"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.
"HSR Act" -- shall have the meaning set forth in Section 3.2.
"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 Price" -- shall have the meaning set forth in Section 2.1.
"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, multinational, 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).
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"Liability" -- shall have the meaning set forth in Section 4.6.
"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;
(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.
"Orion Contract" -- shall have the meaning set forth in Section 6.15.
"Other Agreements" -- shall have the meaning set forth in Section 2.5(b).
"Other Work-in-Process Contracts" -- shall have the meaning set forth in
Section 2.2(c).
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"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.
"Person" -- any individual, entity, organization, labor union, or other
entity or Governmental Body.
"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.
"Release" -- any spilling, leaking, emitting, discharging, depositing,
escaping, leaching, dumping or other releasing into the Environment, whether
intentional or unintentional.
"Release of Claims" -- shall have the meaning set forth in Section
2.5(c).
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"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.
"Shares" -- shall have the meaning set forth in Section 1.
"Software" -- shall have the meaning set forth in Section 4.11(b).
"Subsidiaries" -- shall mean Brown Tanks, Aqua Tanks and Brown Steel.
"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.
"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.
"338 Election" -- shall have the meaning set forth in Section 2.5.
"338 Taxes" -- shall have the meaning set forth in Section 2.5.
"Trade Secrets" -- shall have the meaning set forth in Section 4.18.
"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).
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LOU-225734-9
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