EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
BY AND AMONG
SRM AGGREGATES, INC.,
▇▇▇▇▇▇▇ ▇▇▇▇▇ & SAND, INC.,
BHY READY MIX, INC.,
DEKALB STONE, INC.,
MULBERRY ROCK CORPORATION,
BAMA CRUSHED CORPORATION,
GROVE MATERIALS CORPORATION
and
U.S. AGGREGATES, INC.
AND
FLORIDA ROCK INDUSTRIES, INC.
DATED AS OF JULY 11, 2001
Table of Contents
Page
ARTICLE I
BASIC TRANSACTION
1.1 Purchase and Sale of Assets 1
1.2 Excluded Assets 2
1.3 Assumption of Liabilities 3
1.4 Excluded Liabilities 4
1.5 Nonassignable Contracts 5
1.6 Purchase Price for Acquired Assets 6
1.7 Closing Transactions 8
ARTICLE II
CONDITIONS TO CLOSING
2.1 Conditions to Buyer's Obligations 9
2.2 Conditions to Sellers' Obligations 11
ARTICLE III
COVENANTS PRIOR TO CLOSING
3.1 Affirmative Covenants of Sellers 13
3.2 Negative Covenants of Sellers 14
3.3 Shareholders' Meeting; Proxy Material 14
ARTICLE IV
COVENANTS OF BUYER
4.1 Access to Books and Records 15
4.2 Notification 15
4.3 [Intentionally Omitted.] 15
4.4 Regulatory Filings 15
4.5 Conditions 15
4.6 Contact with Customers and Suppliers 15
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Table of Contents
(continued)
Page
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 Organization and Corporate Power 16
5.2 Authorization of Transactions 16
5.3 [Intentionally Omitted.] 16
5.4 [Intentionally Omitted.] 17
5.5 Subsidiaries 17
5.6 Absence of Conflicts 17
5.7 Financial Statements 17
5.7A Books and Records 18
5.8 Absence of Certain Developments 18
5.9 Real Property 19
5.9A Equipment Leases 20
5.10 Title to Personal Property 21
5.11 Taxes 21
5.12 Contracts and Commitments 22
5.13 Intellectual Property 23
5.14 Litigation; Proceedings 23
5.15 Brokerage 23
5.16 Governmental Licenses and Permits 23
5.17 Employee Matters 24
5.18 Affiliate Transactions 24
5.19 Compliance with Laws 24
5.20 Environmental Matters 25
5.21 Disclosure 25
5.22 Undisclosed Liabilities 26
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER
6.1 Corporate Organization and Power 26
6.2 Authorization 26
6.3 Absence of Conflicts 27
6.4 Litigation 27
6.5 [Intentionally Omitted.] 27
6.6 Brokers' Fees 27
6.7 Financing 27
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Table of Contents
(Continued)
Page
ARTICLE VII
TERMINATION
7.1 Termination 27
7.2 Effect of Termination 28
7.3 Termination Fee 28
ARTICLE VIII
INDEMNIFICATION AND RELATED MATTERS
8.1 Survival 29
8.2 Indemnification 29
8.3 Exclusive Remedy 31
8.4 Disclosure Generally 32
8.5 Acknowledgment by Buyer 32
8.6 Arbitration Procedures 32
ARTICLE IX
ADDITIONAL AGREEMENTS
9.1 Tax Matters 34
9.2 Employee and Employee Benefit Matters 35
9.3 Press Releases and Announcements 35
9.4 Further Transfers 35
9.5 Investigation and Confidentiality 35
9.6 Expenses 36
9.7 Exclusivity 37
9.8 Books and Records 37
ARTICLE X
MISCELLANEOUS
10.1 Amendment and Waiver 37
10.2 Notices 38
10.3 Binding Agreement; Assignment 39
10.4 Severability 39
10.5 No Strict Construction 39
10.6 Captions 39
iii
Table of Contents
(Continued)
Page
10.7 Entire Agreement 39
10.8 Counterparts 39
10.9 Governing Law 39
10.10 Parties in Interest 39
10.11 Knowledge 40
10.12 Time for Acceptance 40
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement") is made as
of July 11, 2001 by and among SRM AGGREGATES, INC., an Alabama
corporation, ▇▇▇▇▇▇▇ ▇▇▇▇▇ & SAND, INC., a Tennessee
corporation, BHY READY MIX, INC., a Tennessee corporation,
DEKALB STONE, INC., a Georgia corporation, MULBERRY ROCK
CORPORATION, a Georgia corporation, BAMA CRUSHED CORPORATION, an
Alabama corporation, GROVE MATERIALS CORPORATION, a Georgia
corporation (each individually a "Seller" and collectively
"Sellers"), and U.S. AGGREGATES, INC., a Delaware corporation
("Parent"), and FLORIDA ROCK INDUSTRIES, INC., a Florida
corporation ("Buyer").
Sellers are engaged in the business of producing ready mix
concrete and aggregates consisting of crushed stone, sand and
gravel at the below-described Facilities (the "Business").
Subject to the terms and conditions set forth in this
Agreement, Sellers desire to sell to Buyer, and Buyer desires to
acquire from Sellers, all of the assets of the Business (other
than the Excluded Assets (as that term is defined in Section 1.2
below)), and Sellers desire to assign to Buyer, and Buyer
desires to assume from Sellers, certain of the liabilities of
the Business.
NOW, THEREFORE, in consideration of the premises and mutual
promises herein made and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged,
the parties hereto, intending to be legally bound, agree as
follows
ARTICLE I
BASIC TRANSACTION
1.1 Purchase and Sale of Assets. On and subject to
the terms and conditions of this Agreement, at the Closing (as
hereinafter defined), Buyer shall purchase from Sellers, and
Sellers shall sell, transfer, convey and deliver to Buyer, all
right, title and interest of Sellers in and to all of their
assets and property (other than the Excluded Assets) to the
extent related to the Business (the "Acquired Assets"),
including, without limitation:
(a) all cash, cash equivalents and marketable
securities;
(b) all accounts, notes and other receivables to
the extent relating to the Business;
(c) all raw materials and supplies, manufactured
and purchased parts, work-in-process, finished goods and other
items of inventory relating to the Business;
(d) all machinery, equipment, furniture, fixtures,
leasehold improvements, vehicles, tooling, molds, dies and other
tangible personal property located at the
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below-described Facilities and owned by any of the Sellers,
including without limitation the tangible personal property
listed
on Schedule 1.1(c) attached hereto;
(e) all fee, leasehold and other interests in
real property set forth on the Owned Real Property Schedule (as
defined in Section 5.9) and the Leased Real Property Schedule
(as defined in Section 5.9) (collectively, the "Facilities")
attached hereto;
(f) all Intellectual Property (as hereinafter
defined), trade secrets, know-how, technology, designs, formulae
and other similar intangible assets, goodwill associated
therewith, licenses and sublicenses granted and obtained with
respect thereto and rights thereunder, remedies against
infringements thereof and rights to protection of interests
therein under the laws of all jurisdictions, in each case,
relating solely to the Business;
(g) all agreements, contracts, leases, licenses,
commitments, purchase orders and other similar arrangements (x)
referenced on the Contracts Schedule (as defined in Section
5.12) and (y) not referenced on the Contracts Schedule due
solely to the specific dollar threshold contained in Section
5.12 below;
(h) all prepayments, deposits and prepaid
expenses relating to the Business to the extent any benefit
therefrom inures to Buyer after the Closing;
(i) all claims, refunds, causes of action,
choses in action, rights of recovery, rights of set off and
rights of recoupment of any kind to the extent relating to the
Business (other than those related to the Excluded Assets or
Excluded Liabilities), including all claims of Sellers with
respect to prospective sites to be acquired for the Business;
(j) all franchises, approvals, permits,
licenses, orders, registrations, certificates, variances and
similar rights obtained from governments and governmental
agencies relating solely to the Business to the extent
transferable; and
(k) all books, records, ledgers, files,
documents, correspondence, lists, drawings, and specifications,
advertising and promotional materials, studies, reports, and
other printed or written materials to the extent relating to the
Business.
1.2 Excluded Assets. Notwithstanding the foregoing
provisions of Section 1.1 above, the Acquired Assets shall not
include any of the following assets and property of Sellers (the
"Excluded Assets"), which shall not be conveyed to Buyer:
(a) [Intentionally omitted.]
(b) Sellers' insurance policies and rights
thereunder;
(c) Sellers' corporate charters and bylaws,
qualifications to conduct business as a foreign corporation,
arrangements with registered agents relating to foreign
qualifications, taxpayer and other identification numbers,
seals, minute books, stock transfer books, blank stock
certificates and other documents relating to the organization,
maintenance, and existence of Sellers as corporations;
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(d) all claims, deposits, prepayments, refunds,
causes of action, choses in action, rights of recovery, rights
of set off, and rights of recoupment with respect to any
Excluded Asset or a Excluded Liability (including, without
limitation, with respect to insurance policies and Income
Taxes);
(e) all rights of Sellers arising under this
Agreement and under any other agreement between Buyer and
Sellers entered into in connection with this Agreement;
(f) any equity interest in Sellers;
(g) any asset of the Business that is consumed,
sold or disposed of in the ordinary course of business prior to
the Closing Date; and
(h) any "employee benefit plan," any "employee
welfare benefit plan" and any "employee pension benefit plan" of
the Sellers (as that term is defined in Sections 3(1), 3(2) and
3(3) of ERISA).
1.3 Assumption of Liabilities. On and subject to the
terms and conditions of this Agreement, at the Closing, Buyer
(or such wholly-owned subsidiaries of Buyer as the Buyer may
identify prior to the Closing Date) shall expressly assume each
of the following liabilities and obligations, whether or not
accrued, whether arising before, on or after the Closing Date,
regardless of when asserted (the "Assumed Liabilities"), but not
including Excluded Liabilities, in each case, to the extent
relating to the Business:
(a) all accounts payable to the extent set forth
on the Closing Balance Sheet (as that term is defined in Section
1.6(c)(ii) below) (the "Accounts Payable");
(b) all current liabilities and expenses to the
extent set forth on the Closing Balance Sheet;
(c) all obligations and liabilities of the
Sellers under the agreements, contracts, leases, licenses,
commitments, purchase orders and other similar arrangements (x)
referenced on the Contracts Schedule, or (y) not referenced on
the Contract Schedule due to the specific dollar thresholds
contained in Section 5.12 below (including, without limitation,
the obligation to perform under such agreements, contracts,
leases, licenses, commitments and other similar arrangements),
to the extent such obligations and liabilities are attributable
to periods from and after the Closing Date or are reflected on
the Closing Balance Sheet;
(d) all obligations and liabilities of the
Sellers under the Leases (as that term is defined in Section
5.9(b)) (including, without limitation, the obligation to
perform under such Leases) to the extent such obligations and
liabilities are attributable to periods from and after the
Closing Date or are reflected on the Closing Balance Sheet;
(e) all obligations and liabilities for refunds,
advertising, coupons, adjustments, allowances, repairs,
exchanges, returns and warranty, merchantability and other
claims to the extent reflected on the Closing Balance Sheet;
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(f) all liabilities arising under the debt
obligations and leases set forth on Schedule 1.3(f) attached
hereto to the extent not paid or prepaid at Closing (all
liabilities described in this Section 1.3(f) that are not paid
or prepaid at the Closing hereinafter collectively called the
"Assumed Indebtedness"); and
(g) all other liabilities and obligations of the
Sellers relating to the Business set forth on the Schedules
attached hereto (as such schedules may be amended, with the
consent of the Buyer, prior to the Closing Date) to the extent
such obligations and liabilities are attributable to periods
from and after the Closing Date or are reflected on the Closing
Balance Sheet.
1.4 Excluded Liabilities. Notwithstanding anything
to the contrary contained in this Agreement or any of the
schedules attached hereto, Buyer shall not assume or be liable
for any obligations or liabilities of Sellers or Parent other
than the Assumed Liabilities (the "Excluded Liabilities"),
including without limitation the following obligations and
liabilities:
(a) any liabilities for Income Taxes (as defined
below) of Parent or Sellers arising from the operation of the
Business on or prior to the Closing Date;
(b) any liability for intercompany advances from
Sellers to the Business;
(c) all liabilities to the extent relating to
any Excluded Asset;
(d) any obligation or liability of Parent or
Sellers arising under this Agreement and under any other
agreement between Buyer and Sellers entered into in connection
with this Agreement;
(e) all liabilities arising from or related to
any claims or actions asserted against Parent and/or its
Subsidiaries (as that term is defined in Section 5.5 below) by
or on behalf of holders of securities of Parent in connection
with the ownership of such securities;
(f) all liabilities of Parent or the Sellers (i)
arising from the offsite disposal of Hazardous Substances
generated or used on or prior to the Closing Date by Sellers or
any of their predecessors or (ii) arising in connection with any
violation of any Environmental Requirement (as that term is
defined in Section 5.20) arising from or relating to any former
facility or former property of the Sellers or any of their
predecessors;
(g) except for the indebtedness and liabilities
set forth in Schedule 1.3(f), all indebtedness or other
obligations of Parent or the Sellers for borrowed money and all
obligations of the Sellers arising under any promissory notes or
capital leases (other than the Leases);
(h) all liabilities of Parent or the Sellers
arising from or related to the following lawsuit: ▇▇▇▇▇▇▇ ▇▇▇▇▇,
et al. v. U.S. Aggregates, Inc., et al., No. CV-2000-291, in the
Circuit Court of Colbert County, Alabama;
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(i) all liabilities of Parent or the Sellers
arising from or related to any "employee benefit plan" as that
term is defined in Section 3(3) of ERISA;
(j) all liabilities of the Sellers for all
claims, costs and assessments under worker's compensation laws
that are made or incurred by any of the Employees (as that term
is defined in Section 5.17(a)) after the Closing Date but made
with respect to injuries incurred by the Employees prior to the
Closing Date; and
(k) all liabilities of the Sellers for all
"welfare benefit claims," costs and assessments under any
welfare benefit plan (as defined in Section 3(1) of ERISA) which
provides medical, health, disability, accident, life insurance,
death, dental or other welfare benefits, including any post-
employment benefits or retiree medical, health, disability,
accident, life insurance or other such benefits and claims under
a "cafeteria plan" as defined in Section 125(d) of the Internal
Revenue Code of 1986, as amended, that are made or incurred by
any of the Employees prior to the Closing Date but that are
payable to any of the Employees on or after the Closing Date.
For purposes of this Section 1.4, "Income Tax" shall mean any
federal, state, county, local or foreign income, franchise,
alternative minimum, add-on minimum or other Tax measured by net
income, together with all interest, penalties or additions to
Tax or other assessments imposed with respect thereto (including
any transferee or secondary liability for any Income Tax and any
liability with respect thereto arising as a result of being (or
ceasing to be) a member of any affiliated, consolidated,
combined or unitary group (or being included, or required to be
included, in any Tax Return relating thereto), as well as any
liability under any tax sharing agreement with respect thereto)
1.5 Nonassignable Contracts; Minority Stock Interests.
(a) Notwithstanding anything set forth herein to
the contrary, no contracts, properties, rights or other assets
of Sellers shall be deemed to be sold, transferred or assigned
to Buyer pursuant to this Agreement if the attempted sale,
transfer or assignment thereof to Buyer without the consent or
approval of another party or governmental entity would be
ineffective or would constitute a breach of contract or a
violation of any law or regulation or would in any other way
materially and adversely affect the rights of Sellers (or Buyer
as transferee or assignee) and such consent or approval is not
obtained on or prior to the Closing Date (the "Unobtained
Consents"). In such case, to the extent reasonably possible:
(A) the beneficial interest in or to such contracts, properties
or other assets (collectively, the "Beneficial Rights") shall in
any event pass as of the Closing Date to Buyer under this
Agreement, and (B) pending such consent or approval, Buyer shall
assume or discharge the liabilities of Sellers under such
Beneficial Rights as agent for Sellers, and Sellers shall act as
Buyer's agent in receipt of any benefits, rights or interests
received from the Beneficial Rights. Buyer and Sellers shall
use reasonable best efforts (and bear their respective costs)
without payment of any material fees, penalties or other amounts
to any third party to obtain or secure any and all consents or
approvals that may be necessary to effect the legal and valid
sale, transfer or assignment of contracts, properties, rights or
other assets underlying the Beneficial Rights. Buyer and
Sellers
shall make or complete such transfers as soon as reasonably
practicable and cooperate with each other in any other
reasonable
arrangement to which the Buyer has consented and which is
designed
to provide for Buyer the Beneficial Rights including
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enforcement at the cost and for the account of Buyer
of any and all rights of Sellers against the other party
thereto, and to provide for the discharge by Buyer of any
liability under such contracts, properties or other assets.
(b) In the event that it appears likely that on
or after the Closing Date there will be any material Unobtained
Consent, at the election of Buyer and upon notification by the
Buyer to the Sellers, the Sellers and Parent will cause the
shareholders of the Sellers (the "Contract Sellers") that are
the owners or holders of the interests in or to the contracts,
properties or other assets to which the Unobtained Consent
relates to transfer the stock of such Contract Sellers to the
Buyer for no additional consideration.
(c) At the request of the Buyer, the portion of
the stock of DeKalb Stone, Inc. owned by any of the Sellers
shall be transferred to the Buyer in lieu of the Acquired Assets
that are owned by DeKalb Stone, Inc.
1.6 Purchase Price for Acquired Assets.
(a) Purchase Price. The aggregate purchase
price to be paid to Sellers for the Acquired Assets will be
equal to $150,000,000.00, less (a) $15,000,000.00 to be
deposited in escrow pursuant to the terms of Section 1.6(b)
below (the "Escrow Deposit"), and (b) the amount of the Assumed
Indebtedness based on the payoff values set forth on Schedule
1.3(f) (the "Purchase Price"). The Purchase Price shall be
adjusted pursuant to subsection (c) below.
(b) Escrow Arrangement. At the Closing, the
Escrow Deposit shall be deposited with an escrow agent that is
mutually agreeable to the Buyer and the Sellers (the "Escrow
Agent"), under an Escrow Agreement in substantially the form
attached hereto as Exhibit A (the "Escrow Agreement"). The
Buyer and the Sellers agree that the Escrow Deposit shall be
disbursed in accordance with the Escrow Agreement and in
accordance with the provisions set forth in Schedule 1.6(b)
attached hereto.
(c) Determination of Certain Purchase Price
Adjustments.
(i) Within five (5) business days prior to the
Closing Date, Sellers and Buyer shall jointly and in good faith
prepare an estimate of the Closing Balance Sheet (as defined in
subsection (ii) below) (the "Estimated Closing Balance Sheet")
based on the Sellers' books and records and other information
then
available, to determine Estimated Closing Working Capital and
Buyer shall be given access to such books and records and other
information and the opportunity to consult with the Sellers for
purposes of preparing the Estimated Closing Balance Sheet. For
purposes hereof, (A) "Estimated Closing Working Capital" means
the
GAAP book value of the Sellers' total cash, accounts receivable,
notes receivable and inventory less the Sellers' total accounts
payable and accrued expenses (other than the current portion of
any intercompany accounts) (any of which amounts may be a
negative
number), in each case to the extent that any of such liabilities
constitute Assumed Liabilities, determined from the Estimated
Closing Balance Sheet as of the Closing Date; provided, however,
that if Buyer and the Sellers are unable to agree on any of the
Estimated Closing Working Capital, such disputed amounts shall
be
determined based on the amounts set forth on the Sellers'
balance
sheet as of the month-ending immediately
6
prior to the Closing Date. At the Closing, the Purchase Price
will be either (A) reduced by the amount $8,275,000.00 exceeds
the
Estimated Closing Working Capital or (B) increased by the amount
Estimated Closing Working Capital exceeds $8,275,000.00.
(ii) As promptly as practicable but in no
event later than sixty (60) days after the Closing Date, Buyer
in good faith shall prepare and will cause its auditors to audit
a balance sheet of the Sellers as of the close of business on
the Closing Date (the "Closing Balance Sheet") for the purpose
of establishing the Actual Closing Working Capital. The Closing
Balance Sheet shall be delivered by Buyer to Sellers no later
than sixty (60) days after the Closing Date. For purposes
hereof, "Actual Closing Working Capital" means the GAAP book
value of the Sellers' total cash, accounts receivable, notes
receivable and inventory less the Sellers' total accounts
payable and accrued expenses (other than the current portion of
any intercompany accounts) (any of which amounts may be a
negative number), in each case to the extent that any of such
liabilities constitute Assumed Liabilities, determined from the
Closing Balance Sheet. The Closing Balance Sheet and the
Estimated Closing Balance Sheet shall be prepared using the same
principles and methodologies used by Sellers immediately prior
to the Closing Date to the extent such principles and
methodologies are in accordance with GAAP.
(iii) If Actual Closing Working Capital
exceeds Estimated Closing Working Capital, Buyer shall, within
thirty (30) days pay to Sellers the amount of such excess. If
Actual Closing Working Capital is less than Estimated Closing
Working Capital, Sellers shall within thirty (30) days pay to
Buyer in immediately available funds the amount of such
shortfall. All amounts owed pursuant to this subsection (iii)
shall include interest, from the Closing Date to the date of
payment, at the Prime Rate (as defined in Section 8.6(g) below)
calculated on the basis of a 365-day year.
(iv) If Sellers disagree with any item on
the Closing Balance Sheet, Sellers shall notify Buyer in writing
of such disagreement within thirty (30) days after Sellers'
receipt thereof (such notice setting forth in reasonable detail
the basis for such disagreement). Buyer shall permit Sellers
access to such work papers relating to the preparation of the
Closing Balance Sheet as may be reasonably necessary to permit
Sellers to review in detail the manner in which the Closing
Balance Sheet was prepared. Buyer and Sellers shall thereafter
negotiate in good faith to resolve any such disagreements;
provided, however, that Sellers or Buyer, as the case may be,
shall within thirty (30) days pay to Buyer or Sellers, as the
case may be, the amount determined pursuant to subsection (iii)
above which is not subject to dispute, if any. If Buyer and
Sellers are unable to resolve any such disagreements within
thirty (30) days, Buyer and Sellers shall jointly retain KPMG
Peat Marwick (the "Auditor").
(v) Buyer and Sellers shall direct the
Auditor to render a determination within thirty (30) days of its
retention and Buyer and Sellers shall use their best efforts to
cause the Auditor to resolve all disagreements over individual
line items as soon as possible. The Auditor shall consider only
those items and amounts in the Closing Balance Sheet which Buyer
and Sellers are unable to resolve. The determination of the
Auditor shall be conclusive and binding upon Buyer and Sellers.
The fees and expenses of the Auditor shall be borne one-half by
Buyer and one-half by Sellers.
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1.7 Closing Transactions.
(a) Closing. Subject to the satisfaction or
waiver of the conditions contained herein, the closing of
Buyer's purchase of the Acquired Assets contemplated by this
Agreement (the "Closing") will take place at the offices of
McGuireWoods, LLP, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ on August 22, 2001 or on such other date as is mutually
agreeable to Buyer and Sellers. The date and time of the
Closing are herein referred to as the "Closing Date."
(b) Transfers. Subject to the terms and
conditions set forth in this Agreement, the parties agree to
consummate the following "Closing Transactions" on the Closing
Date:
(i) Buyer and Sellers shall execute and
deliver the Escrow Agreement in substantially the form set forth
on Exhibit A;
(ii) Sellers shall execute and deliver to
Buyer bills of sale in substantially the form attached hereto
as Exhibit B, conveying the items of personal property included
in the Acquired Assets;
(iii) Sellers shall execute and deliver to
Buyer special warranty deeds in substantially the form attached
hereto as Exhibit C, conveying all of the Owned Real Property
(as that term is defined in Section 5.12(a));
(iv) Sellers and Buyer shall execute and
deliver assignment and assumption agreements in substantially
the form set forth in Exhibit D, pursuant to which the Sellers
shall assign to the Buyer all of the Sellers' right, title and
interest under the Leases of the Leased Real Property (as those
terms are defined in Section 5.12(b)) and the Buyer shall assume
all of the Sellers' obligations and liabilities accruing under
such Leases on or after the Closing Date;
(v) Sellers and Buyer shall execute and
deliver assignment and assumption agreements in substantially
the form set forth in Exhibit E, pursuant to which the Sellers
shall assign to the Buyer all of the Sellers' right, title and
interest under the contracts listed on the Contracts Schedule
(as that term is defined in Section 5.12(b)) and the Buyer shall
assume all of the Sellers' obligations and liabilities accruing
under such contracts on or after the Closing Date;
(vi) Sellers and Buyer shall execute and
deliver assignment and assumption agreements in a form
reasonably satisfactory to Sellers and Buyer, pursuant to which
the Sellers shall assign to Buyer all of the Sellers' right,
title and interest under the Equipment Leases (as that term is
defined in Section 5.9A) and the Buyer shall assume all of
Sellers' obligations accruing under such Equipment Leases on or
after the Closing Date;
(vii) Buyer shall deliver to Sellers by wire
transfer of immediately available funds an amount equal to the
Purchase Price and any portion of the Escrow Deposit
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required to paid at Closing pursuant to Section 1.6(b) to one or
more accounts designated by Sellers;
(viii) Buyer shall deliver to the Escrow Agent
by wire transfer of immediately available funds the Escrow
Deposit pursuant to Section 1.6(b);
(ix) there shall be delivered to Buyer and
Sellers, as applicable, certificates and other documents and
instruments required to be delivered to such party under Article
II hereof; and
(x) Sellers shall deliver to Buyer
possession of the Acquired Assets.
ARTICLE II
CONDITIONS TO CLOSING
2.1 Conditions to Buyer's Obligations. The
obligation of Buyer to consummate the transactions contemplated
by this Agreement is subject to the satisfaction of the
following conditions on or before the Closing Date:
(a) Each of the representations and warranties
set forth in Article V hereof shall be true and correct in all
material respects at and as of the Closing Date as though then
made and as though the Closing Date were substituted for the
date of this Agreement throughout such representations and
warranties, without giving effect to any supplements or updates
to the Schedule attached hereto to which the Buyer shall not
have consented;
(b) Each of the representations and warranties
in Sections 5.2 and 5.8(a) and each of the representations and
warranties set forth in Article V that are qualified by the word
"material" shall be true and correct in all respects, at and as
of the Closing Date as if made on the Closing Date, without
giving effect to any supplements or updates to the Schedules
attached hereto to which the Buyer shall not have consented;
(c) Sellers shall have performed and complied in
all material respects with all of the covenants and agreements
required to be performed by it under this Agreement prior to the
Closing;
(d) All consents by third parties denoted on
Schedule 5.6 with an asterisk shall have been obtained;
(e) All applicable waiting periods (and any
extensions thereof) under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended (the "HSR Act") shall have
expired or otherwise been terminated ("HSR Approval");
(f) There shall not be (i) any injunction, judgment,
order, decree, ruling or charge in effect preventing
consummation
of any of the transactions contemplated by this Agreement, or
(ii)
any proceeding that would be likely to have the effect of
preventing, materially
9
delaying, making illegal or otherwise prohibiting any of the
transactions contemplated by this Agreement;
(g) All persons holding any rights of first
refusal, repurchase rights or similar rights with respect to the
Acquired Assets that are marked on Schedule 5.6 with an asterisk
shall have irrevocably waived all such rights and Blue Circle,
Inc. shall not have asserted any right of first refusal under
Section 14 of the Roberta, Alabama Limestone Sale Agreement
dated June 30, 1998, as amended, by and between Blue Circle,
Inc. and SRM Aggregates, Inc.;
(h) On or prior to the Closing Date, Sellers
shall have delivered to Buyer all of the following:
(i) a certificate from Sellers, dated as of
the Closing Date, stating that each of the conditions specified
in Sections 2.1(a) through (g), inclusive, has been satisfied;
(ii) copies of all governmental and
shareholder consents, approvals, filings, releases and
terminations required in connection with the consummation of the
transactions contemplated hereby (including required
governmental consents described in Schedule 5.6);
(iii) certified copies of the resolutions of
the Sellers' boards of directors and shareholders approving the
transactions contemplated by this Agreement;
(iv) an opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ and/or
Baker, Donelson, Bearman & ▇▇▇▇▇▇▇▇, addressed to the Buyer and
dated the Closing Date, regarding the due authorization,
execution and delivery of this Agreement by the Sellers and the
Parent and all other documents required by this Agreement to be
delivered by any of the Sellers or the Parent, such opinion to
be in a form reasonably acceptable to the Buyer;
(v) commitments to issue title insurance
for all of the tracts of Real Property (as that term is defined
in Section 5.9(c)) except those tracts specified on Schedule
2.1(i)(v) attached hereto issued by First American Title
Insurance Company (together with any lease amendments, or
memoranda of lease executed and in recordable form, required to
evidence the legal descriptions of such tracts (or make the
existence of the leases a matter of public record) as may be
required in order for title policies to be issued), such
insurance to contain exceptions only for Permitted Encumbrances
(as that term is defined in Section 5.9(a)(ii)), any matters
disclosed in Schedules 5.9(a) and 5.9(b) and such other
exceptions as shall be reasonably acceptable to Buyer;
(vi) such other documents or instruments as
Buyer reasonably requests to (A) effect the transactions
contemplated hereby, (B) evidence the accuracy of Sellers'
representations and warranties, (C) evidence the performance by
Sellers of, or the compliance by Sellers with, any covenant or
obligation required to be performed or complied with by Sellers,
(D) evidence the satisfaction of any condition referred to in
this Section 2.1, or (E) otherwise facilitate consummation or
performance of any of the transactions contemplated by this
Agreement; and
10
(i) All proceedings to be taken by Sellers in
connection with the consummation of the Closing Transactions and
the other transactions contemplated hereby and all certificates,
opinions, instruments and other documents required to be
delivered by Sellers to effect the transactions contemplated
hereby reasonably requested by Buyer will be reasonably
satisfactory in form and substance to Buyer.
(j) Buyer shall have confirmed to Buyer's
reasonable satisfaction by analysis of core drilling tests
performed at the direction of Buyer in a manner that is
customary in the aggregates industry (such tests to be performed
at locations at each quarry that are mutually agreeable to the
Sellers and Buyer, and Buyer to give Sellers prompt access to
all cores and test results and analyses) that the amount of the
contractually available, legally permitted and economically
mineable aggregates reserves that meet DOT specifications in the
applicable markets for sized stone and base for each quarry
calculated on the basis of such core drilling tests is at least
eighty-five percent (85%) of the amount of such aggregates
reserves for each quarry set forth in Schedule 2.1(k) attached
hereto.
(k) Seller (i) shall have remediated to Buyer's
reasonable satisfaction the environmental matters disclosed in
Schedule 5.20 with respect to the BHY property and the S.
Pittsburg, Calera, ▇'▇▇▇▇ and ▇▇▇▇▇▇▇ quarries or (ii) shall
have demonstrated to Buyer's reasonable satisfaction that such
matters do not constitute a violation of any Environmental
Requirements (as that term is defined in Section 5.20);
provided, however, that if such conditions have not been met
prior to the Closing, the cost of such remediation, as
determined by an independent expert selected by Buyer and
Sellers, shall be deducted from the Purchase Price and this
closing condition shall be deemed to have been satisfied.
Any condition specified in this Section 2.1 may be waived
by Buyer, provided that no such waiver will be effective unless
it is set forth in a writing executed by Buyer or unless Buyer
agrees to consummate the transactions contemplated by this
Agreement without satisfaction of such condition.
2.2 Conditions to Sellers' Obligations. The
obligation of Sellers to consummate the transactions
contemplated by this Agreement is subject to the satisfaction of
the following conditions on or before the Closing Date:
(a) The representations and warranties set forth
in Article VI hereof shall be true and correct in all material
respects at and as of the Closing Date as though then made and
as though the Closing Date were substituted for the date of this
Agreement throughout such representations and warranties;
(b) Buyer shall have performed and complied in
all material respects with all of the covenants and agreements
required to be performed by it under this Agreement prior to the
Closing;
(c) There shall not be (i) any injunction,
judgment, order, decree, ruling or charge in effect preventing
consummation of any of the transactions contemplated by this
Agreement, or (ii) any proceeding that would be likely to have
the effect of preventing, materially
11
delaying, making illegal or otherwise prohibiting any of the
transactions contemplated by this Agreement;
(d) The transaction contemplated by this
Agreement shall have been approved by the requisite vote of the
Sellers' and Parent's shareholders (the "Shareholder
Approvals");
(e) On or prior to the Closing Date, Buyer shall
have delivered to Sellers all of the following:
(i) a certificate from Buyer, dated as of
the Closing Date, stating that each of the conditions specified
in Sections 2.2(a) through 2.2(d) has been satisfied;
(ii) certified copies of the resolutions of
Buyer's board of directors or the executive committee thereof
approving the transactions contemplated by this Agreement;
(iii) an opinion of McGuireWoods LLP,
addressed to the Sellers and dated the Closing Date, regarding
the due authorization, execution and delivery of this Agreement
by the Buyer and all other documents required by this Agreement
to be delivered by the Buyer, such opinion to be in a form
reasonably acceptable to Sellers; and
(iv) such other documents or instruments as
Sellers reasonably request to (A) effect the transactions
contemplated hereby, (B) evidence the accuracy of Buyer's
representations and warranties, (C) evidence the performance by
Buyer of, or the compliance by Buyer with, any covenant or
obligation required to be performed or complied with by Buyer,
(D) evidence the satisfaction of any condition referred to in
this Section 2.2, or (E) otherwise facilitate consummation or
performance of any of the transactions contemplated by this
Agreement.
(f) All proceedings to be taken by Buyer in
connection with the consummation of the Closing Transactions and
the other transactions contemplated hereby and all certificates,
instruments and other documents required to be delivered by
Buyer to effect the transactions contemplated hereby reasonably
requested by Sellers will be reasonably satisfactory in form and
substance to Sellers.
Any condition specified in this Section 2.2 may be waived
by Sellers, provided that no such waiver will be effective
unless it is set forth in a writing executed by Sellers or
unless Sellers agree to consummate the transactions contemplated
by this Agreement without the satisfaction of such condition.
12
ARTICLE III
COVENANTS PRIOR TO CLOSING
3.1 Affirmative Covenants of Sellers. Prior to the
Closing, unless Buyer agrees otherwise in writing, Sellers will:
(a) use commercially reasonable efforts to
conduct the Sellers' business and operations only in the usual
and ordinary course of business in accordance with past custom
and practice;
(b) use their commercially reasonable efforts to
cause the Sellers' current insurance (or reinsurance) policies
not to be cancelled or terminated or any of the coverage
thereunder to lapse, unless simultaneously with such
termination, cancellation or lapse, replacement policies
providing coverage equal to or greater than the coverage under
the cancelled, terminated or lapsed policies for substantially
similar premiums are in full force and effect;
(c) keep in full force and effect their
respective corporate existences and all rights, franchises and
intellectual property relating or pertaining to their
businesses;
(d) use their commercially reasonable efforts to
carry on the business of the Sellers in the same manner as
presently conducted and to keep the Sellers' business
organizations and properties intact, including their present
business operations, physical facilities, working conditions and
employees and their present relationships with lessors,
licensors, suppliers and customers and others having business
relations with the Sellers;
(e) maintain the assets of the Sellers in good
repair, order and condition consistent with current needs;
(f) maintain the books, accounts and records of
the Sellers in accordance with generally accepted accounting
principles and, to the extent not inconsistent therewith, with
past custom and practice as used in the preparation of the
Financial Statements (as such term is defined in Section 5.7);
(g) promptly (once the Sellers have knowledge
thereof) inform Buyer in writing of any material variances from
the representations and warranties contained in Article V hereof
and, if the Closing occurs, such disclosure shall amend and
supplement the appropriate schedules attached hereto in the form
of Updated Schedules delivered to Buyer;
(h) confer with Buyer concerning operational
matters of a material nature;
(i) otherwise report periodically to Buyer
concerning the status of the business, operations and finances
of the Sellers;
13
(j) promptly make all filings required to be made by
them in order to consummate the transactions contemplated by
this
Agreement (including filings and submissions under the HSR Act);
(k) cooperate with Buyer with respect to all
filings that Buyer elects to make or is required by legal
requirements or this Agreement to make in connection with the
transactions contemplated by this Agreement and in obtaining any
consents identified in Schedule 5.6;
(l) use commercially reasonable efforts to obtain
payoff letters for each of the debt obligations on
Schedule 1.3(h) that Buyer has notified Sellers that Buyer
desires to have paid or prepaid at Closing;
(m) use commercially reasonable efforts to
obtain title commitments for the any tracts of the Real Property
that are not specified on Schedule 2.1(c)(v);
(n) use commercially reasonable efforts to
obtain any consents by and estoppel certificates from any third
parties that are not denoted on Schedule 5.6 with an asterisk;
(o) use their commercially reasonable efforts to
cause the conditions in Article II to be satisfied and to
consummate the transactions contemplated herein as soon as
reasonably possible after satisfaction of the conditions set
forth in Article II (other than those to be satisfied at the
Closing); And
(p) from and after the date which is fifteen
(15) days prior to the scheduled Closing Date, will not
distribute any cash or pay any cash dividends except for
payments to creditors and dividends or distributions to another
Seller.
3.2 Negative Covenants of Sellers. From the date
hereof, prior to the Closing, without Buyer's prior written
consent, Sellers will not:
(a) take any action that would require
disclosure under Section 5.8 of this Agreement;
(b) make any loans or enter into any
transactions with any Insider (as defined in Section 5.18),
other than in the ordinary course of business;
(c) establish or, except in accordance with past
practice, contribute to any pension, retirement, profit sharing
or stock bonus plan or multiemployer plan covering the employees
of the Sellers; and
(d) except as specifically contemplated by this
Agreement, enter into any material contract, agreement or
transaction, other than in the ordinary course of the Sellers'
business in accordance with past custom and practice.
3.3 Shareholders' Meeting; Proxy Material. Promptly
after the date hereof, Parent shall prepare and file with the
SEC a proxy statement to solicit the approval of this
14
transaction by its shareholders and to cause a special meeting
of its shareholders to be duly called and held as soon as
reasonably practicable for the purpose of acting upon proposals
to approve this Agreement and all actions contemplated hereby
that require the approval of Parent's shareholders. Parent
shall use all reasonable efforts to have the proxy statement
reviewed by the SEC as promptly as practicable after such filing
and to obtain and respond to any comments by the SEC or its
staff resulting from such review. Parent will use all
reasonable efforts to cause the proxy statement to be mailed to
Parent's shareholders as promptly as practicable after approval
by the SEC.
ARTICLE IV
COVENANTS OF BUYER
4.1 Access to Books and Records. From and after the
Closing, Buyer shall provide Sellers and their agents with
reasonable access (for the purpose of examining and copying),
during normal business hours, to the books and records
transferred to the Buyer as part of the Acquired Assets with
respect to periods or occurrences prior to the Closing Date in
connection with any matter whether or not relating to or arising
out of this Agreement or the transactions contemplated hereby.
Unless otherwise consented to in writing by Sellers, the Buyer
shall not, for a period of seven years following the Closing
Date, destroy, alter or otherwise dispose of any of such books
and records for the period prior to the Closing Date without
first offering to surrender to Sellers such books and records or
any portion thereof which Buyer may intend to destroy, alter or
dispose of.
4.2 Notification. Prior to the Closing, upon
discovery Buyer shall promptly inform the Sellers in writing of
any material variances from Buyer's representations and
warranties contained in Article VI.
4.3 [Intentionally Omitted.]
4.4 Regulatory Filings. Buyer shall make or cause to
be made all filings and submissions under the HSR Act and any
other laws or regulations applicable to Buyer as may be required
of Buyer for the consummation of the transactions contemplated
herein, and Buyer shall be responsible for all filing fees under
the HSR Act. Buyer shall coordinate and cooperate with the
Sellers in exchanging such information and assistance as the
Sellers may reasonably request in connection with all of the
foregoing.
4.5 Conditions. Buyer shall use all commercially
reasonable efforts to cause the conditions set forth in Section
2.2 to be satisfied and to consummate the transactions
contemplated herein as soon reasonably possible after the
satisfaction of the conditions set forth in Article II (other
than those to be satisfied at the Closing).
4.6 Contact with Customers and Suppliers. Prior to
the Closing, Buyer shall coordinate with the Sellers all contact
and communications with the employees, customers and suppliers
of the Sellers (other than existing customers and suppliers of
the Buyer) in connection with the transactions contemplated
hereby.
15
ARTICLE V
REPRESENTATIONS AND WARRANTIES
CONCERNING THE SELLERS AND THE ACQUIRED ASSETS
As a material inducement to Buyer to enter into this
Agreement, Sellers jointly and severally represent and warrant
that:
5.1 Organization and Corporate Power. Each of the
Sellers is a corporation duly organized, validly existing and in
good standing under the laws of the state of its incorporation
and has all requisite corporate power and authority and all
licenses, permits and authorizations necessary to own and
operate its properties and to carry on its business as now
conducted and to perform all of its obligations under all
contracts to which it is a party, except where the failure the
failure to hold such authorizations, licenses and permits would
not have a material adverse effect upon the business, financial
condition or operating results of the Sellers (a "Material
Adverse Effect"). Each of the Sellers is qualified to do
business in every jurisdiction in which the nature of its
business or its ownership of property requires it to be so
qualified, except where the failure to be so qualified would not
have a Material Adverse Effect. All such jurisdictions in which
the Sellers are so qualified are set forth on Schedule 5.1
attached hereto (the "Qualifications Schedule"). Sellers have
delivered to Buyer true, correct and complete copies of their
charter documents and by-laws, as currently in effect.
5.2 Authorization of Transactions. Each of the
Sellers has full corporate power and authority to execute and
deliver this Agreement and all other agreements contemplated
hereby to which such Sellers are parties and, upon obtaining the
Shareholder Approvals, to consummate the transactions
contemplated hereby and thereby. This Agreement and all other
agreements contemplated hereby to which any of the Sellers is a
party and the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and thereby
have been duly approved and authorized by the board of directors
of such Sellers and, upon obtaining the Shareholder Approvals,
by all other necessary corporate action. This Agreement and all
other agreements contemplated hereby to which any of the Sellers
is a party have been duly executed and delivered by such Sellers
and constitute the valid and binding agreements of such Sellers,
enforceable against Sellers in accordance with their terms,
except as enforceability hereof or thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and limitations on the
availability of equitable remedies. Upon the execution and
delivery by the Sellers at the Closing of all documents to be
executed by Sellers at Closing pursuant to this Agreement (the
"Seller Closing Documents"), the Seller Closing Documents will
constitute the legal, valid and binding obligation of Sellers,
enforceable against Sellers in accordance with their respective
terms except as enforceability hereof or thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other
laws affecting creditors' rights generally and limitations on
the availability of equitable remedies. Sellers have the
absolute and unrestricted right, power, authority and capacity
to execute and deliver this Agreement and the Seller Closing
Documents and, except as set forth on Schedule 5.6, to perform
their obligations under this Agreement and the Seller Closing
Documents.
5.3 [Intentionally Omitted.]
16
5.4 [Intentionally Omitted.]
5.5 Subsidiaries. No Seller has any Subsidiary that
is not also a Seller. For purposes of this Agreement, the term
"Subsidiary" shall mean any corporation of which the securities
having a majority of the voting power in electing the board of
directors are, at the time of such determination, owned by any
of the Sellers or another Subsidiary.
5.6 Absence of Conflicts. Except as set forth on
Schedule 5.6 attached hereto (the "Restrictions Schedule"), the
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby do not and
will not (a) conflict with or result in any breach of any of the
provisions of, (b) constitute a default under, (c) result in a
violation of, (d) give any third party the right to exercise any
right of first refusal (including any right of first refusal in
favor of Blue Circle, Inc.), repurchase right or similar rights
with respect to any of the Acquired Assets, (e) give any third
party the right to terminate or to accelerate any obligation
under, (f) result in the creation of any lien, security
interest, charge or encumbrance upon the Acquired Assets under,
or (g) require any authorization, consent, approval, exemption
or other action by or notice to any court or other governmental
body under, (i) the certificates of incorporation or by-laws of
Sellers, (ii) any resolutions adopted by the board of directors
or shareholders of Sellers, (iii) any license, permit or other
governmental authorization issued to any of the Sellers or that
relates to the business of the Sellers or any of the Acquired
Assets, (iv) any indenture, mortgage, lease, loan agreement or
other agreement or instrument by which any of the Sellers or any
of the Acquired Assets is bound or affected, or (v) any law,
statute, rule or regulation or any judgment, order or decree to
which any of the Sellers or any of the Acquired Assets is
subject.
5.7 Financial Statements. The Sellers have furnished
Buyer with copies of their (i) unaudited consolidated balance
sheet as of May 31, 2001 (the "Latest Balance Sheet") and the
related statements of income and cash flow for the five-month
period then ended and (ii) unaudited consolidated balance sheets
and statements of income and cash flow for the fiscal years
ended December 31, 2000 and 1999, all of which are attached
hereto as Schedule 5.7. Each of the foregoing financial
statements (including in all cases the notes thereto, if any)
(the "Financial Statements") is accurate and complete, is
consistent with the Sellers' books and records (which, in turn,
are accurate and complete ), presents fairly in all material
respects the Sellers' financial condition and results of
operations as of the times and for the periods referred to
therein, and has been prepared in accordance with GAAP applied
on a consistent basis throughout the periods covered thereby,
subject to the absence of footnote disclosure (that if
presented,
would not describe exceptions to GAAP applied on a consistent
basis or any change in accounting principles) and, in the case
of
the Latest Balance Sheet and related statements of income and
cash
flow, subject to changes resulting from normal year-end
djustments
(the effect of which will not, individually or in the aggregate,
be materially adverse) and to the absence of footnote disclosure
(that if present, would not describe exceptions to GAAP applied
on
a consistent basis or any change in accounting principles). The
Financial Statements accurately reflect the gross revenues of
the
Sellers on a consolidated basis for the periods indicated. The
Financial Statements reflect the consistent application of such
accounting principles throughout the periods involved. No
financial statements of any person other than the Subsidiaries
are
required to be included in the consolidated financial
17
statements of the Sellers. All inventory is valued at the lower
of cost or market, with appropriate reduction for any royalty
payments due at the time of sale.
5.7A Books and Records. The books of account, minute
books, stock record books and other records of the Sellers, all
of which have been made available in the offices of the Sellers
for Buyer to inspect, are accurate, complete and correct and
have been maintained in accordance with sound business practices
5.8 Absence of Certain Developments. Except as set
forth on Schedule 5.8 attached hereto (the "Developments
Schedule") and except as expressly contemplated by this
Agreement, since the date of the Latest Balance Sheet, the
Sellers have not:
(a) suffered a Material Adverse Effect;
(b) redeemed or repurchased, directly or
indirectly, or paid or declared any dividends or other
distributions in respect of, any shares of its capital stock;
(c) issued, sold or transferred any notes, bonds
or other debt securities or any equity securities, securities
convertible, exchangeable or exercisable into equity securities,
or warrants, options or other rights to acquire equity
securities, of any of the Sellers;
(d) borrowed any amount or incurred or become
subject to any material liabilities, except current liabilities
incurred in the ordinary course of business;
(e) mortgaged, pledged or subjected to any
material lien, charge or any other encumbrance, any portion of
its properties or assets;
(f) sold, leased, assigned or transferred
(including without limitation transfers to Sellers or its
affiliates) any portion of its tangible assets, except in the
ordinary course of business, or cancelled without fair
consideration any debts or claims owing to or held by it;
(g) sold, assigned, licensed or transferred
(including without limitation transfers to Sellers or its
affiliates) any material Intellectual Property or disclosed any
confidential information other than pursuant to agreements
preserving all rights of the Sellers in such confidential
information or received any confidential information of any
third party in violation of any obligation of confidentiality;
(h) suffered any theft, damage, destruction or
loss in excess of $100,000, to its tangible assets not covered
by insurance or suffered any substantial destruction of its
books and records;
(i) made or entered into any arrangement to make
an acquisition (whether by merger, acquisition of stock or
assets, or otherwise) of any business or product line or made
any capital investment in any entity;
(j) entered into, amended or terminated any
lease, contract, agreement, commitment, or any other transaction
in excess of $150,000 other than in the ordinary course of
18
business and in accordance with past custom and practice, or
entered into any transaction with any Insider;
(k) made or granted any bonus or any wage,
salary or compensation increase in excess of $50,000 per year or
outside the ordinary course of business and in accordance with
past custom and practice to any employee or sales
representative, group of employees or consultants or made or
granted any increase in any employee benefit plan or
arrangement, or amended or terminated any existing employee
benefit plan or arrangement or adopted any new employee benefit
plan or arrangement or made any other change in employment terms
for any of its directors, officers and employees outside the
ordinary course of business and in accordance with past custom
and practice or entered into any employment contract or
collective bargaining agreement, written or oral, or modified
the terms of any such existing agreement; or
(l) made any loans or advances to, or guarantees
for the benefit of, any persons.
5.9 Real Property.
(a) Owned Real Property.
(i) Schedule 5.9(a) attached hereto (the
"Owned Real Property Schedule") sets forth the address and
description of each parcel of real property owned by any of the
Sellers (collectively, the "Owned Real Property"). Except as
set forth on the Owned Real Property Schedule with respect to
each parcel of Owned Real Property: (A) one or more of the
Sellers has or will have as of the Closing Date good and
marketable fee simple title to such parcel, free and clear of
all liens, encumbrances, easements and restrictive covenants,
except Permitted Encumbrances, (B) other than the right of Buyer
pursuant to this Agreement, there are no outstanding options,
rights of first offer or rights of first refusal to purchase
such parcel or any portion thereof or interest therein, (C)
there are no pending or, to Sellers' knowledge, threatened
condemnation proceedings, lawsuits or administrative actions
relating to the Owned Real Property, (D) there are no leases,
subleases, licenses, concessions, or other agreements, written
or oral, , to which any of the Sellers are parties, granting to
any party or parties the right of use or occupancy of or the
right to extract minerals from any portion of the Owned Real
Property; and (E) there are no parties (other than the Sellers)
in possession of any portion of the Owned Real Property. Except
as set forth on the Owned Real Property Schedule or the Leased
Real Property Schedule, none of the Sellers is a party to any
agreement or option to purchase any real property or interest
therein. At Closing one or more of the Sellers will own or will
have a valid leasehold interest in all real property used in the
Business.
(ii) The term "Permitted Encumbrances" shall
mean with respect to each parcel of Owned Real Property: (A)
real estate taxes, assessments and other governmental levies,
fees or charges imposed with respect to such parcel which are
not due and payable as of the Closing Date or which are being
contested by appropriate proceedings; (B) mechanics and similar
statutory liens for labor, materials or supplies provided with
respect to such parcel incurred in the ordinary course of
business for amounts which are not delinquent and which would
not, individually or in the aggregate, have a Material Adverse
Effect or which are being contested by
19
appropriate proceedings; (C) zoning, building and other land use
laws imposed by any governmental authority having jurisdiction
over such parcel which are not violated by the Sellers' current
use (or Sellers' proposed use except with respect to the DeKalb
quarry) or occupancy of such parcel or the operation of the
business of the Sellers thereon or any violation of which would
not have a Material Adverse Effect; and (D) easements,
covenants,
conditions, restrictions and other similar matters of record
affecting title to such parcel which do not or would not
materially impair the value of such property or the use or
occupancy of such parcel in the operation of the business of the
Sellers.
(b) Leased Real Property. Schedule 5.9(b)
attached hereto (the "Leased Real Property Schedule") sets forth
the address and description of each leased and subleased parcel
of real property in which any of the Sellers have a leasehold or
subleasehold interest (the "Leased Real Property") and a list of
all leases and subleases (which shall include all agreements,
licenses or permits which grant any of the Sellers the right to
purchase, mine, extract or remove aggregates, limestone,
limerock, granite, gravel, sand or minerals from real estate)
(collectively, the "Leases") for each Leased Real Property. The
Sellers have made available to Buyer a true and complete copy of
each such Lease document set forth on the Leased Real Property
Schedule and all amendments thereto, and in the case of any oral
Lease, a written summary of the material terms of such Lease.
Except as set forth on the Leased Real Property Schedule, with
respect to each of the Leases: (A) one or more of the Sellers
has good and marketable leasehold title to the properties
specified on the Leased Real Property Schedule, free and clear
of all liens, encumbrances, easements and Restrictive Covenants
as of the Closing Date, other than Permitted Encumbrances; (B)
such Lease is legal, valid, binding, enforceable and in full
force and effect; (C) neither the Sellers nor any other party to
the Lease is in breach or default under such Lease, and no event
has occurred or circumstance exists which, with the delivery of
notice, the passage of time or both, would constitute such a
breach or default or permit the termination, modification or
acceleration of rent under such Lease, (D) no party to the Lease
has repudiated any provision thereof; (E) there are no disputes,
oral agreements or forbearance programs in effect as to the
Lease, (F) none of the Sellers has assigned, transferred,
conveyed, mortgaged, deeded in trust or encumbered any interest
in the leasehold or subleasehold that will not be released on or
before the Closing Date, other than Permitted Encumbrances; (G)
to Sellers' knowledge, there are no pending or threatened
condemnation proceedings, lawsuits, or administrative actions
relating to the Leased Real Property, and (H) there are no
parties (other than the Sellers) in possession of the parcel of
Leased Real Property.
(c) Real Property Used in The Business. The
Owned Real Property identified on the Owned Real Property
Schedule and the Leased Real Property identified on the Leased
Real Property Schedule (collectively, the "Real Property")
comprise all of the real property currently used by the Sellers
in the operation of their business
5.9A Equipment Leases. Schedule 5.9A (the "Equipment
Lease Schedule") describes all agreements pursuant to which any
of the Sellers leases any equipment or vehicles (the "Equipment
Leases"). A true, correct and complete copy of each of the
Equipment Leases has been made available to Buyer. Except as
set forth on Schedule 5.9A, (i) each of the Equipment Leases is
legal, valid, binding and enforceable and in full force and
effect and will continue to be legal, valid,
20
binding and enforceable and in full force and effect on
identical
terms following the consummation of the transactions
contemplated
by this Agreement, (ii) no party has repudiated any provision of
any Equipment Lease, (iii) none of the Sellers or, to the
Sellers' knowledge, any other party thereto, is in breach of or
default under any Equipment Lease, and (iv) no event has
occurred which, with notice or lapse of time would constitute a
breach of or default under or permit termination, modification
or acceleration under any Equipment Lease. Schedule 5.9A
accurately sets forth the pay off amounts (including any
prepayment penalties) due under each of the Equipment Leases as
of the date set forth on such Schedule.
5.10 Title to Personal Property. Except as set forth
on Schedule 5.10, one or more of the Sellers own good and
marketable title to all of the personal property shown on the
Latest Balance Sheet, free and clear of all liens, security
interests and other encumbrances, except for liens relating to
current taxes not yet due and payable and liens and encumbrances
set forth on the attached Schedule 5.10 (the "Liens Schedule").
5.11 Taxes.
(a) Each of the Sellers has filed all Tax
Returns that it is required to file under applicable laws and
regulations and all such Tax Returns are complete and correct in
all respects. Each of the Sellers has paid all Taxes due and
owing by it (whether or not shown on any Tax Return) and has
withheld and paid over to the appropriate taxing authority all
Taxes which it is required to withhold from amounts paid or
owing to any employee, independent contractor, equityholder,
creditor or other third party.
(b) None of the Sellers has waived any statute
of limitations with respect to any Taxes or agreed to any
extension of time with respect to any Tax assessment or
deficiency. None of the Sellers currently is the beneficiary of
any extension of time within which to file any Tax Return. No
foreign, federal, state or local Tax audits or administrative or
judicial proceedings are pending or being conducted with respect
to the Sellers, and no written notice indicating an intent to
open an audit or other review has been received by the Sellers
from any foreign, federal, state or local taxing authority.
There are no unresolved questions or claims concerning the
Sellers' Tax liability which individually or in the aggregate
exceed $100,000.00. No claim has ever been made by an authority
in a jurisdiction where any of the Sellers does not file Tax
Returns that it is or may be subject to taxation by that
jurisdiction.
(c) Except as set forth on Schedule 5.11, there
are no liens for Taxes (other than for current Taxes not yet due
and payable) upon the assets of the Sellers.
(d) There is no dispute or claim concerning any
Tax Liability of any of the Sellers either (A) claimed or raised
by any authority in writing or (B) as to which any of Sellers
and the directors and officers (and employees responsible for
Tax matters) of the Sellers has knowledge based upon personal
contact with any agent of such authority. Schedule 5.11 attached
hereto lists all federal, state, local, and foreign income Tax
Returns filed with respect to any of the Sellers for taxable
periods ended on or after December 31, 1997, indicates those Tax
Returns that have been audited, and indicates those Tax Returns
that currently are the subject of audit. Sellers have delivered
to the Buyer correct and complete copies of all federal income
Tax Returns,
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examination reports, and statements of deficiencies assessed
against or agreed to by any of the Sellers since December 31,
1997.
(e) As used in this Agreement, the following
terms shall have the following respective meanings:
(f) "Code" means the Internal Revenue Code of
1986, as amended.
(g) "Tax" or "Taxes" means any federal, state,
local or foreign income, gross receipts, franchise, estimated,
alternative minimum, add-on minimum, sales, use, transfer,
registration, value added, excise, natural resources, severance,
stamp, occupation, premium, windfall profit, environmental,
customs, duties, real property, personal property, capital
stock, social security, unemployment, disability, payroll,
license, employee or other withholding, or other tax, of any
kind whatsoever, including any interest, penalties or additions
to tax or additional amounts in respect of the foregoing,
whether disputed or not.
(h) "Tax Returns" means returns, declarations,
reports, claims for refund, information returns or other
documents (including any related or supporting schedules,
statement or information and any amendment thereof) filed or
required to be filed in connection with the determination,
assessment or collection of Taxes of any party or the
administration of any laws, regulations or administrative
requirements related to Taxes.
5.12 Contracts and Commitments.
(a) Except as specifically contemplated by this
Agreement and except as set forth on Schedule 5.12 attached
hereto (the "Contracts Schedule"), none of the Sellers is a
party to any: (i) collective bargaining agreement or contract
with any labor union or any bonus, pension, profit sharing,
retirement or any other form of deferred compensation plan other
than as described in Section 5.17(b) or the Schedules relating
thereto; (ii) or any stock purchase, stock option, or similar
plan; (iii) contract for the employment of any officer,
individual employee or other Person on a full-time or consulting
basis or any severance agreements; (iv) agreement or indenture
relating to the borrowing of money, the guarantee of any
indebtedness, any capitalized lease obligation or to mortgaging,
pledging or otherwise placing a lien on any portion of the
Acquired Assets; (v) agreements with respect to the lending or
investing of funds; (vi) license, sublicense or royalty
agreements; (vii) lease or agreement under which it is lessee
of, or holds or operates, any personal property owned by any
other party calling for payments in excess of $25,000 annually,
except for the Equipment Leases; (viii) lease or agreement under
which it is lessor of or permits any third party to hold or
operate any property, real or personal, owned or controlled by
it; or (ix) contract or group of related contracts with the same
party for the purchase or sale of raw materials, supplies,
products or other personal property or for the furnishing or
receipt of services (A) the performance of which will extend
over a period of more than six months, or (B) involves
consideration in excess of $25,000.
(b) Buyer either has been supplied with, or has
been given access to, a true and correct copy of all written
contracts which are referred to on the Contracts Schedule,
together with all amendments, waivers or other changes thereto.
22
(c) With respect to each contract so listed: (i)
the contract is legal, valid, and binding obligation of the
Sellers; and (ii) to the Sellers' knowledge, no party has
repudiated any provision of such contract and the Sellers are
not in breach of or default under such contract, and no event
has occurred which, with notice or lapse of time would
constitute a breach of or default under or permit termination,
modification, or acceleration under such contract, except where
such breach, default, termination, modification or acceleration
would not result in an aggregate loss in excess of $100,000.00.
5.13 Intellectual Property. All of the patents,
registered trademarks, registered service marks, registered
copyrights, application for any of the foregoing and material
unregistered trademarks, service marks, copyrights, trade names
and corporate names used in the conduct of the Sellers'
respective businesses (collectively, "Intellectual Property")
are set forth on the attached Schedule 5.13 (the "Intellectual
Property Schedule"). Except as set forth on the Intellectual
Property Schedule: (i) one or more of the Sellers own and
possess all right, title and interest in and to, or possesses
the valid right to use, the Intellectual Property; (ii) the
Sellers have not received any written notices of material
infringement or misappropriation from any third party with
respect to the Intellectual Property; and (iii) to the Sellers'
knowledge, none of the Sellers is currently infringing on the
intellectual property of any other Person, except for any
nonconformance with clauses (i), (ii) and (iii) above which
would not have a Material Adverse Effect. To the Sellers'
knowledge, each item of Intellectual Property owned or used by
any of the Sellers immediately prior to the Closing hereunder
will be owned or available for use by the Buyer on identical
terms and conditions immediately subsequent to the Closing
hereunder. Except as set forth on the Intellectual Property
Schedule, to the knowledge of the Sellers, no third party has
interfered with, infringed upon, misappropriated, or otherwise
come into conflict with any Intellectual Property rights of any
of any of the Sellers.
5.14 Litigation; Proceedings. Except as set forth on
Schedule 5.14 attached hereto (the "Litigation Schedule"), there
are no actions, suits, or proceedings, pending or, to the
knowledge of the Sellers, threatened against or affecting the
Sellers or any of their assets at law or in equity, or before or
by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or
instrumentality, domestic or foreign. Schedule 5.14 sets forth
each instance in which any of the Sellers is subject to any
outstanding injunction, judgment, order, decree, ruling, or
charge.
5.15 Brokerage. Except for the fees of Deutsche Banc
Alex. ▇▇▇▇▇ (which fees shall be paid by Sellers), there are no
claims for brokerage commissions, finders' fees or similar
compensation in connection with the transactions contemplated by
this Agreement based on any arrangement or agreement made by or
on behalf of any of the Sellers.
5.16 Governmental Licenses and Permits.
(a) Schedule 5.16(a) attached hereto (the
"Licenses Schedule") contains a complete listing and summary
description of all permits, certificates of occupancy, licenses,
franchises, certificates, approvals and other authorizations of
foreign, federal, state and local governments or other similar
rights relating to the Acquired Assets owned or possessed by the
Sellers (collectively, the "Licenses"). Except as indicated on
the Licenses Schedule, one or more of
23
the Sellers owns or possesses all right, title and interest in
and to all of the Licenses which are necessary to conduct their
business as presently conducted and will use its commercially
reasonable efforts to maintain all such Licenses. Each of the
Licenses is in full force and effect. No loss or expiration of
any License is, to the knowledge of the Sellers, threatened,
pending or reasonably foreseeable (including, without
limitation,
as a result of the transactions contemplated hereby) other than
expiration in accordance with the terms thereof. No License is
due to expire in accordance with its terms within 180 days after
the Closing Date, except as set forth on Schedule 5.16(a).
(b) Except for HSR Approval, and except as set
forth on Schedule 5.16(b) attached hereto (the "Governmental
Consent Schedule"), no permit, approval or authorization of, or
declaration to or filing with, any governmental or regulatory
authority is required to be obtained by any of the Sellers in
connection with its execution, delivery and performance of this
Agreement or the consummation of any other transaction
contemplated hereby.
5.17 Employee Matters.
(a) Schedule 5.17(a) attached hereto sets forth
an accurate and complete list of all employees ("Employees") of
the Sellers, together with such Employee's position and present
salary or compensation arrangement and amount of the last
increase thereof and all contracts between any Employee and any
of the Sellers. No general work stoppage or other significant
labor dispute with respect to the Sellers is pending or, to the
Knowledge of Sellers, threatened, and no application for
certification of a collective bargaining agent is pending or, to
the Knowledge of Sellers, threatened with respect to the
business of the Sellers. No employees of any of the Sellers are
covered by a collective bargaining agreement, except for the
collective bargaining agreement identified in Schedule 5.17(a).
The Sellers have complied in all material respects with all
Applicable Laws relating to the employment and safety of labor,
including provisions relating to wages, hours, benefits,
collective bargaining, the payment of social security and
similar Taxes, and all Applicable Laws regarding occupational
safety and health with respect to employees employed by it.
(b) There are no liabilities of Sellers related
to any "employee benefit plan" (as that term is defined in
Section 3(3) of ERISA) of the Sellers (collectively, the
"Plans") or any liabilities of such Plans, including without
limitation any withdrawal liability related to any
"multiemployer plan" (as that term is defined in Section 3(37)
of ERISA), which encumber, attach to, or impair the value of,
any of the Acquired Assets.
5.18 Affiliate Transactions. Except as disclosed on
Schedule 5.18 attached hereto (the "Affiliate Transactions
Schedule"), to the Sellers' knowledge, no officer, director, or
Affiliate of the Sellers or any individual in such officer's or
director's immediate family (collectively, the "Insiders") is a
party to any agreement, contract, commitment or transaction with
any of the Sellers or has any interest in any property used by
any of the Sellers.
5.19 Compliance with Laws. The Sellers are in
compliance in all respects with all applicable laws and
regulations of foreign, federal, state and local governments and
all agencies thereof.
24
5.20 Environmental Matters.
(a) Except as set forth on Schedule 5.20, each
of the Sellers is in compliance with all Environmental
Requirements and has no liability for the violation of any
Environmental Requirements.
(b) Each of the Sellers has obtained and is in
compliance with all permits, licenses, and other authorizations
required by Environmental Requirements for the occupation of its
Facilities and the operation of its business.
(c) None of the Sellers has received any written
notice or report regarding any actual or alleged violation of
any Environmental Requirements, or any liabilities or potential
liabilities (whether accrued, absolute, contingent, unliquidated
or otherwise), including any investigatory, remedial or
corrective obligations, relating to any of them, or any of their
Facilities arising under Environmental Requirements, except for
any such notice the subject matter of which has been
substantially resolved.
(d) The Sellers have made available to Buyer
true and correct copies of all environmental assessment reports
relating to any of the Sellers or any of their Facilities that
are in the possession, custody or control of Sellers.
(e) This Section 5.20 contains the sole and
exclusive representations and warranties of the Sellers with
respect to any environmental matters including, without
limitation, any matters arising under any Environmental
Requirements.
(f) For the purposes of this Section 5.20,
"Environmental Requirements" shall mean all federal, state,
local and foreign statutes, common law, regulations, ordinances
and court orders concerning pollution or protection of the
environment, including all those relating to the presence, use,
production, generation, handling, transportation, treatment,
storage, disposal, distribution, labeling, testing, processing,
discharge, release, threatened release, control or cleanup of
any hazardous materials, substances or wastes, pesticides,
pollutants, contaminants, toxic chemicals, petroleum products or
byproducts, asbestos, polychlorinated biphenyls or radiation, as
such requirements are enacted and in effect on or prior to the
Closing Date.
5.20A Solvency. The Sellers and Parent are, and
immediately following the Closing Date will be, Solvent.
"Solvent" means that, as of any date of determination, (a) the
amount of the present fair saleable value of the assets of the
Sellers and/or Parent, as applicable, will as of such date
exceed the amount of all liabilities of the Sellers and/or
Parent, as applicable, (b) the Sellers and/or Parent, as
applicable, will not have, as of such date, an unreasonably
small amount of capital with which to conduct their business,
and (c) the Sellers and Parent will be able to pay their debts
as they mature.
5.21 Disclosure.
25
(a) No representation or warranty of Sellers in
this Agreement and no statement in the schedules attached hereto
omits to state a material fact necessary to make the statements
herein or therein, in light of the circumstances in which they
were made, not misleading.
(b) No notice given pursuant to Section 3.1(h)
will contain any untrue statement or omit to state a material
fact necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading.
5.22 Undisclosed Liabilities. The Sellers have no
liabilities or obligations of the type required to be reflected
on the face of a balance sheet prepared in accordance with GAAP
that were not fully reserved against in the Latest Balance Sheet
or the Closing Balance Sheet, except (x) matters specifically
identified and described in the Schedules attached hereto, (y)
obligations arising under contracts or commitments described on
the Contracts Schedule and (z) liabilities and obligations
reflected on the Latest Balance Sheet, the Closing Balance Sheet
or incurred in the ordinary course of business since the date of
the Latest Balance Sheet which are usual and normal in amount in
relation to the Sellers' past experience. Notwithstanding the
foregoing, the preceding sentence shall not apply with respect
to any liability or obligation to the extent the subject matter
giving rise to such liability or obligation is addressed in
another representation or warranty set forth in this Article V.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER
As a material inducement to Sellers to enter into this
Agreement, Buyer hereby represents and warrants to Sellers that:
6.1 Corporate Organization and Power. Buyer is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Florida, with full
corporate power and authority to enter into this Agreement and
the other agreements contemplated hereby to which Buyer is a
party and perform its obligations hereunder and thereunder.
6.2 Authorization. The Buyer has full corporate
power and authority to execute and deliver this Agreement and
all other agreements contemplated hereby to which Buyer is a
party and to consummate the transactions contemplated hereby and
thereby. This Agreement and all other agreements contemplated
hereby to which Buyer is a party and the execution and delivery
of this Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly approved and
authorized by the board of directors of Buyer and by all other
necessary corporate action. This Agreement and all other
agreements contemplated hereby to which Buyer is a party have
been duly executed and delivered by Buyer and constitute the
valid and binding agreements of Buyer, enforceable against Buyer
in accordance with their terms, except as enforceability hereof
or thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors'
rights generally and limitations on the availability of
equitable remedies. Upon the execution and delivery by Buyer at
the Closing of all documents to be executed by Buyer at Closing
pursuant to this Agreement (the "Buyer Closing Documents"), the
26
Buyer Closing Documents will constitute the legal, valid and
binding obligation of Buyer, enforceable against Buyer in
accordance with their respective terms except as enforceability
hereof or thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors'
rights generally and limitations on the availability of
equitable remedies. Buyer has the absolute and unrestricted
right, power, authority and capacity to execute and deliver this
Agreement and the Buyer Closing Documents and to perform its
obligations under this Agreement and the Buyer Closing
Documents.
6.3 Absence of Conflicts. Neither the execution,
delivery or performance of this Agreement and the other
documents contemplated hereby to which Buyer is a party, nor the
consummation of the transactions contemplated hereby and
thereby, will (a) conflict with, (b) result in a breach of any
of the provisions of, (c) constitute a default under, (d) result
in the violation of, (e) give any third party the right to
terminate or to accelerate any obligation under, or (f) require
any authorization, consent, approval, execution or other action
by or notice to any court or other governmental body under, the
provisions of the certificate of incorporation or by-laws of
Buyer, any resolutions adopted by the board of directors or
shareholders of Buyer, any indenture, mortgage, lease, loan
agreement or other agreement or instrument to which Buyer is
bound or affected, or any statute, regulation, rule, judgment,
order, decree or other restriction of any government,
governmental agency or court to which Buyer is subject. Except
for HSR Approval, no notice to, filing with or authorization,
consent or approval of any government or governmental agency by
Buyer is necessary for the consummation of the transactions
contemplated by this Agreement and the other documents
contemplated hereby to which Buyer is a party.
6.4 Litigation. There are no actions, suits,
proceedings, orders or investigations pending or, to the best of
Buyer's knowledge, threatened against or affecting Buyer at law
or in equity, or before or by any federal, state, municipal or
other governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign, which would adversely
affect Buyer's performance under this Agreement and the other
agreements contemplated hereby to which Buyer is a party or the
consummation of the transactions contemplated hereby or thereby.
6.5 [Intentionally Omitted.]
6.6 Brokers' Fees. Buyer has no liability or
obligation to pay any fees or commissions to any broker, finder,
or agent with respect to the transactions contemplated by this
Agreement.
6.7 Financing. Buyer has and shall have at the
Closing sufficient cash and available credit facilities (and has
provided evidence thereof satisfactory to Sellers) to pay the
full consideration payable to Sellers hereunder, to make all
other necessary payments by it in connection with the purchase
of the Acquired Assets and to pay all of its related fees and
expenses.
ARTICLE VII
TERMINATION
7.1 Termination. This Agreement may be terminated at
27
any time prior to the Closing:
(a) by mutual written consent of Buyer and
Sellers;
(b) by either Buyer or Sellers if there has been
a material misrepresentation or breach on the part of the other
party of the representations, warranties or covenants set forth
in this Agreement, or if events have occurred which have made it
impossible to satisfy a condition precedent to the terminating
party's obligations to consummate the transactions contemplated
hereby, unless such terminating party's willful breach of this
Agreement has caused the condition to be unsatisfied; or
(c) by either Buyer or Sellers if the Closing
has not occurred on or prior to October 8, 2001; provided that
neither Buyer nor Sellers will be entitled to terminate this
Agreement pursuant to this subsection (c) if such person's
willful breach of this Agreement has prevented the consummation
of the transactions contemplated hereby at or prior to such
time; or
(d) by Sellers if the board of directors of any
of the Sellers determines, based on the advice of its counsel,
that it is required by law to terminate the Agreement in order
to comply with its fiduciary duties; or
(e) by either Buyer or Sellers if this Agreement
is deemed to be unenforceable in any bankruptcy or similar
insolvency proceeding in which any of the Sellers is the debtor.
7.2 Effect of Termination. In the event of
termination of this Agreement by either Buyer or Sellers as
provided in Section 7.1, this Agreement shall forthwith become
void and there will be no liability on the part of any party
hereto to any other party hereto or its stockholders or
directors or officers in respect thereof, except for the
obligations of the parties hereto in Sections 9.3, 9.5(b) and
9.6 and except that nothing herein will relieve any party from
liability for any breach of this Agreement prior to such
termination.
7.3 Termination Fee. Sellers agree to pay Buyer a
fee in immediately available funds equal to 2% of the Purchase
Price plus all reasonable documented, third party expenses
incurred in connection with the transactions contemplated by
this Agreement not to exceed $500,000.00 (the "Termination Fee")
if this Agreement is terminated by Sellers pursuant to (i)
Section 7.1(c) but solely because of the failure of the closing
condition regarding the approval by Sellers' shareholders of the
transactions contemplated by this Agreement, or (ii) Section
7.1(d) and, within 360 days of such termination, Sellers
consummate or enter into an agreement to consummate (including
without limitation any agreement in principle or any oral
agreement) a sale of the Sellers or Parent (as long as the
Sellers remain subsidiaries of Parent) to a third party pursuant
to a tender or exchange offer, a merger, a stock purchase, or a
sale of substantially all or any significant portion of the
assets of the Sellers or the Parent (which includes without
limitation the equity interests in Sellers) (a "Transaction").
The Termination Fee shall be paid immediately prior to the
earlier of the consummation of a Transaction or the entry into
an agreement with respect to a Transaction. Any amounts due
under this Section 7.3 that are not paid when due shall
28
bear interest at the lower of fourteen percent (14%) per annum
or the highest rate permitted by law from the date due through
and including the date paid.
ARTICLE VIII
INDEMNIFICATION AND RELATED MATTERS
8.1 Survival. All representations, warranties,
covenants and agreements set forth in this Agreement or in any
writing delivered in connection with this Agreement shall
survive the Closing Date and the consummation of the
transactions contemplated hereby.
8.2 Indemnification.
(a) Parent and Sellers, jointly and severally,
agree to indemnify Buyer, its officers, directors and
stockholders (the "Buyer Group") and hold them harmless from and
against any penalties, fines, costs, amounts paid in settlement,
obligations, expenses, fees, loss, liability, deficiency, damage
or claim, including court costs and reasonable attorneys' fees
and expenses (a "Loss") which the Buyer Group may suffer,
sustain or become subject to, as a result of (i) the breach by
Parent or Sellers of any representation or warranty made by
Parent or Sellers contained in Article V of this Agreement, (ii)
the breach by Parent or Sellers of any covenant or agreement
made by Parent or Sellers contained in this Agreement, any
exhibit hereto or any certificate delivered by the Parent or
Sellers to Buyer in connection with the Closing, (iii) any
claims of any brokers or finders claiming by, through or under
Parent or Sellers or by, through or under the Parent or Sellers
in respect of the transactions contemplated herein and (iv) any
Excluded Liabilities.
(b) With respect to claims for breaches of
representations and warranties referred to in Section (a)(i)
above and taking into account any disclosures made in the
Updated Schedules pursuant to Section 3.1(g) hereof, (i) Parent
and Sellers will not be liable to the Buyer Group with respect
to any individual Loss unless (x) such Loss exceeds $50,000.00
(the "Threshold Amount") and (y) together with all other Losses
(which are above the Threshold Amount) exceeds $1,600,000.00 in
the aggregate, in which case Parent and Sellers will be liable
only for such excess, and (ii) Parent and Sellers' liability to
the Buyer Group for such Losses shall not exceed 10% of the
Purchase Price; provided, that, the foregoing shall not apply in
respect of any Loss with respect to the breach by Parent or
Sellers of any representation or warranty made by Sellers in
Section 5.2.
(c) Parent and Sellers will be liable to the
Buyer Group with respect to claims referred to in Section 8.2(a)
above only if Buyer gives Parent or Sellers written notice
thereof within 1 year after the Closing Date, except for claims
arising from breaches of the representations and warranties set
forth in Section 5.2 as to which claims may be made at any time.
(d) Buyer agrees to indemnify Parent and Sellers
and hold Parent and Sellers harmless from and against any Loss
which Parent or Sellers may suffer, sustain or become subject
to, (i) as the result of a breach of any (A) representation or
warranty, or (B) covenant or agreement by Buyer contained in
this Agreement, (ii) for Assumed Liabilities (whether or not
accrued, whether arising before, on or after the Closing Date,
regardless of when asserted), or (iii)
29
as a result of Buyer's conduct of the Business or use of the
Acquired Assets and or the sale of any product on or after the
Closing Date; provided that Buyer will be liable to Parent or
Sellers with respect to claims referred to in clause (i)(A) in
the preceding sentence only if (x) Sellers give Buyer written
notice thereof within 1 year after the Closing Date and (y) only
to the extent that the aggregate amount of all such claims
exceeds $1,600,000 and does not exceed 10% of the Purchase
Price.
(e) If a party hereto seeks indemnification
under this Section 8.2, such party (the "Indemnified Party")
shall give written notice to the other party (the "Indemnifying
Party") of the facts and circumstances giving rise to the claim.
In that regard, if any suit, action, claim, liability or
obligation shall be brought or asserted by any third party
which, if adversely determined, would entitle the Indemnified
Party to indemnity pursuant to this Section 8.2, the Indemnified
Party shall promptly notify the Indemnifying Party of the same
in writing, specifying in reasonable detail the basis of such
claim and the facts pertaining thereto and the Indemnifying
Party, if it so elects (except that the Indemnifying Party may
not so elect without the Indemnified Party's consent unless (i)
the Indemnifying Party provides reasonable evidence to the
Indemnified Party of its financial ability to satisfy its
indemnification obligations, (ii) the suit, action, claim,
liability or obligation does not seek to impose any liability or
obligation upon the Indemnified Party other than for money
damages, and (iii) such suit, action, claim, liability or
obligation does not relate to the Indemnified Party's
relationship with its customers or employees), shall assume and
control the defense thereof (and shall consult with the
Indemnified Party with respect thereto), including the
employment of counsel reasonably satisfactory to the Indemnified
Party and the payment of expenses. If the Indemnifying Party
elects to assume and control the defense, the Indemnified Party
shall have the right to employ counsel separate from counsel
employed by the Indemnifying Party in any such action and to
participate in the defense thereof, but the fees and expenses of
such counsel employed by the Indemnified Party shall be at the
expense of the Indemnified Party unless (y) the employment
thereof has been specifically authorized by the Indemnifying
Party in writing or (z) the Indemnifying Party has failed to
assume the defense and employ counsel. The Indemnifying Party
shall not be liable for any settlement of any action or
proceeding, the defense of which it has elected to assume, which
settlement is effected without the written consent of the
Indemnifying Party. If there shall be a settlement to which the
Indemnifying Party consents or a final judgment for the
plaintiff in any action or proceeding, the Indemnifying Party
shall indemnify and hold harmless the Indemnified Party from and
against any loss or liability by reason of such settlement or
judgment.
(f) The amount of any Loss subject to
indemnification hereunder or of any claim therefor shall be
calculated net of (i) any Tax Benefit inuring to Buyer, the
Sellers or any of their Affiliates on account of such Loss and
(ii) any insurance proceeds (net of direct collection expenses)
received or receivable by Buyer, the Sellers and, its
Subsidiaries on account of such Loss. If Buyer, the Sellers or
any of their Affiliates receives a Tax Benefit after an
indemnification payment is made, Buyer shall promptly pay to the
Sellers the amount of such Tax Benefit at such time or times as
and to the extent that such Tax Benefit is realized. For
purposes hereof, "Tax Benefit" shall mean any refund of Taxes
paid or reduction in the amount of Taxes which otherwise would
have been paid, in each case computed at the highest marginal
tax rates. Buyer and the Sellers shall seek full recovery under
all insurance policies covering any Loss to the same extent as
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they would if such Loss were not subject to indemnification
hereunder. In the event that an insurance recovery is made by
Buyer, the Sellers or any of their Affiliates with respect to
any Loss for which any such Person has been indemnified
hereunder, then a refund equal to the aggregate amount of the
recovery (net of all direct collection expenses) shall be made
promptly to the Sellers.
(g) All indemnification payments made hereunder
shall be treated by all parties as an adjustment to the Purchase
Price.
(h) Notwithstanding anything to the contrary
contained in this Section 8.2, there shall be no recovery for
any Loss by Buyer under this Section 8.2, and the Loss shall not
be included in meeting the stated thresholds hereunder, to the
extent such item has been included in the calculation of Actual
Closing Working Capital as determined pursuant to Section 1.2
hereof.
8.3 Exclusive Remedy.
(a) Following the Closing, except with respect
to claims based upon intentional misrepresentation, the
indemnification provided by Section 8.2 shall be the sole and
exclusive remedy to the exclusion of all other remedies and
recourse at law or otherwise under or in connection with this
Agreement and the transactions contemplated herein, including
without limitation, for any Losses of the Buyer Group or the
Sellers Group with respect to any alleged misrepresentation or
inaccuracy in, or breach of, any representations or warranties
or any breach or failure in performance of any covenants or
agreements made by Buyer or Sellers in this Agreement or in any
Exhibit, Schedule or Updated Schedule attached hereto or any
certificate delivered hereunder. Except as provided in Section
8.2, no claim shall be brought or maintained by Buyer or Sellers
or their respective successors or permitted assigns against any
officer, director or employee (present or former) of Sellers,
and no recourse shall be brought or granted against any of them,
by virtue of or based upon any alleged misrepresentation or
inaccuracy in or breach of any of the representations,
warranties or covenants of Sellers set forth or contained in
this Agreement or any certificate delivered hereunder, except to
the extent that the same shall have been the result of fraud by
any such person (and in the event of such fraud, such recourse
shall be brought or granted solely against the person or persons
committing such fraud), and provided that without limiting the
foregoing, in no event shall Buyer, its successors or permitted
assigns be entitled to claim or seek consequential damages or
any rescission of the transactions consummated under this
Agreement or other remedy at law or in equity. In no event
shall any officer, director or employee of any of the Sellers
have any shared or vicarious liability for the actions or
omissions of any other person.
(b) Buyer, the Sellers and their respective successors
and permitted assigns, hereby waive any right to seek
contribution or other recovery from any officer, director or
employee (present or former) of any of the Sellers, that any of
them may now or in the future have under any Environmental
Requirements, including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act, the
Resource Conservation and Recovery Act, the Clean Water Act, the
Clean Air Act, any analogous state law, and any common law
providing for any remedy or right of recovery with respect to
environmental matters. Buyer, the Sellers and their respective
successors and permitted assigns, hereby release all officers,
directors or employees (present or former) of any of the Sellers
from any and all such claims,
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demands, and causes of action, that any of them may now or in
the future have under such Environmental Requirements.
8.4 Disclosure Generally. If and to the extent any
information required to be furnished in any schedule is
contained in this Agreement or in any Schedule (or Updated
Schedule) attached hereto, such information shall be deemed to
be included in all Schedules (or Updated Schedules) in which the
information is required to be included (but only to the extent
such information can reasonably be determined to relate to the
other Schedules). The inclusion of any information in any
Schedule (or Updated Schedule) attached hereto shall not be
deemed to be an admission or acknowledgment by the Sellers that
such information is material to or outside the ordinary course
of the business of the Sellers.
8.5 Acknowledgment by Buyer. THE REPRESENTATIONS AND
WARRANTIES BY SELLERS EXPRESSLY AND SPECIFICALLY SET FORTH IN
THIS AGREEMENT, INCLUDING THE SCHEDULES (AND UPDATED SCHEDULES)
ATTACHED HERETO, CONSTITUTE THE SOLE AND EXCLUSIVE
REPRESENTATIONS AND WARRANTIES OF THE SELLERS TO BUYER IN
CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY, AND BUYER
UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT ALL OTHER
REPRESENTATIONS AND WARRANTIES OF ANY KIND OR NATURE EXPRESSED
OR IMPLIED (INCLUDING, BUT NOT LIMITED TO, ANY RELATING TO THE
FUTURE OR HISTORICAL FINANCIAL CONDITION, RESULTS OF OPERATIONS,
ASSETS OR LIABILITIES OF THE SELLERS, EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES SPECIFICALLY SET FORTH HEREIN)
ARE SPECIFICALLY DISCLAIMED BY SELLERS.
8.6 Arbitration Procedures.
(a) The parties hereto agree that the
arbitration procedure set forth below shall be the sole and
exclusive method for resolving and remedying claims for money
damages arising out of this Agreement (the "Disputes"), except
as otherwise provided by Section 1.2 above. Nothing in this
Section 8.6 shall prohibit a party hereto from instituting
litigation to enforce any Final Determination (as defined in
subsection (e) below) or availing itself of the other remedies
set forth in Sections 9.5(c) and 9.9(d) below. The parties
hereto hereby agree and acknowledge that, except as otherwise
provided in this Section 8.6 or in the Commercial Arbitration
Rules of the American Arbitration Association, as in effect from
time to time, the arbitration procedures and any Final
Determination hereunder shall be governed by, and shall be
enforced pursuant to the Uniform Arbitration Act of the State of
Florida.
(b) In the event that any party hereto asserts
that there exists a Dispute, such party shall deliver a written
notice to each other party involved therein specifying the
nature of the asserted Dispute and requesting a meeting to
attempt to resolve the same. If no such resolution is reached
within ten (10) business days after such delivery of such
notice, the party delivering such notice of Dispute (the
"Disputing Person") may, within forty-five (45) business days
after delivery of such notice, commence arbitration hereunder by
delivering to each other party involved therein a notice of
arbitration (a "Notice of Arbitration"). Such Notice of
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Arbitration shall specify the matters as to which arbitration is
sought, the nature of any Dispute, the claims of each party to
the arbitration and shall specify the amount and nature of any
damages, if any, sought to be recovered as a result of any
alleged claim, and any other matters required by the Commercial
Arbitration Rules of the American Arbitration Association, as in
effect from time to time, to be included therein, if any.
(c) Buyer and Sellers shall each select one
independent arbitrator expert in the subject matter of the
Dispute (the arbitrators so selected shall be referred to herein
as "Buyer's Arbitrator" and "Sellers' Arbitrator,"
respectively). In the event that either party fails to select an
independent arbitrator as set forth herein within twenty (20)
days from delivery of a Notice of Arbitration, then the matter
shall be resolved by the arbitrator selected by the other party.
Sellers' Arbitrator and Buyer's Arbitrator shall select a third
independent arbitrator expert in the subject matter of the
dispute, and the three arbitrators so selected shall resolve the
matter according to the procedures set forth in this Section
8.6. If Sellers' Arbitrator and Buyer's Arbitrator are unable
to agree on a third arbitrator within twenty (20) days after
their selection, Sellers' Arbitrator and Buyer's Arbitrator
shall each prepare a list of three independent arbitrators.
Sellers' Arbitrator and Buyer's Arbitrator shall each have the
opportunity to designate as objectionable and eliminate one
arbitrator from the other arbitrator's list within seven days
after submission thereof, and the third arbitrator shall then be
selected by lot from the arbitrators remaining on the lists
submitted by Sellers' Arbitrator and Buyer's Arbitrator.
(d) The arbitrator(s) selected pursuant to
subsection (c) above will determine the allocation of the costs
and expenses of arbitration based upon the percentage which the
portion of the contested amount not awarded to each party bears
to the amount actually contested by such party. For example, if
Buyer submits a claim for $1,000, and if Sellers contest only
$500 of the amount claimed by Buyer, and if the arbitrator(s)
ultimately resolves the dispute by awarding Buyer $300 of the
$500 contested, then the costs and expenses of arbitration will
be allocated 60% (i.e. 300 ? 500) to Sellers and 40% (i.e. 200 ?
500) to Buyer.
(e) The arbitration shall be conducted under the
Commercial Arbitration Rules of the American Arbitration
Association as in effect from time to time, except as modified
by the agreement of all parties. The arbitrator(s) shall so
conduct the arbitration that a final result, determination,
finding, judgment and/or award (the "Final Determination") is
made or rendered as soon as practicable, but in no event later
than the later of ninety (90) business days after the delivery
of the Notice of Arbitration and ten (10) days following
completion of the arbitration. The Final Determination must be
agreed upon and signed by the sole arbitrator or by at least two
of the three arbitrators (as the case may be). The Final
Determination shall be final and binding on all parties and
there shall be no appeal from or reexamination of the Final
Determination, except for fraud, perjury, evident partiality or
misconduct by an arbitrator prejudicing the rights of any party
and except to correct manifest clerical errors.
(f) Buyer and Sellers may enforce any Final
Determination in any state or federal court having jurisdiction
over the Dispute. For the purpose of any action or proceeding
instituted with respect to any Final Determination, each party
hereto hereby irrevocably submits to the jurisdiction of such
courts, irrevocably consents to the service of process by
registered mail or personal service and hereby irrevocably
waives, to the fullest extent permitted by law, any
33
objection which it may have or hereafter have as to personal
jurisdiction, the laying of the venue of any such action or
proceeding brought in any such court and any claim that any such
action or proceeding brought in such court has been brought in
any inconvenient forum.
(g) If any party shall fail to pay the amount of
any damages, if any, assessed against it within ten (10) days of
the delivery to such party of such Final Determination, the
unpaid amount shall bear interest from the date of such delivery
at the lesser of(i) the prime rate, as declared by Citibank,
N.A. from time to time (which rate shall be adjusted on the
effective date of each change in such rate) (the "Prime Rate")
plus 300 basis points and (ii) the maximum rate permitted by
applicable usury laws. Interest on any such unpaid amount shall
be compounded semiannually, computed on the basis of a 365-day
year and shall be payable on demand. In addition, such party
shall promptly reimburse the other party for all reasonable
costs or expenses of any nature or kind whatsoever (including
but not limited to reasonable attorneys' fees) incurred in
seeking to collect such damages or to enforce any Final
Determination.
ARTICLE IX
ADDITIONAL AGREEMENTS
9.1 Tax Matters. The following provisions shall
govern the allocation of responsibility as between Buyer and
Sellers for certain tax matters following the Closing Date:
(a) Allocation of Purchase Price. The Parties
agree that the Purchase Price and the liabilities of the Sellers
(plus other relevant items) will be allocated to the assets of
the Sellers for all purposes (including Tax and financial
accounting purposes) in a manner consistent with the fair market
values of such assets as determined by mutual agreement of the
parties hereto and set forth in Schedule 9.1(a) attached hereto.
Buyer and Sellers will file all Tax Returns (including amended
returns and claims for refund) and information reports in a
manner consistent with such values.
(b) Cooperation on Tax Matters.
(i) Buyer and Sellers shall cooperate
fully, as and to the extent reasonably requested by the other
party, in connection with the filing of Tax Returns of, or which
include, the Sellers and any audit, litigation or other
proceeding with respect to Taxes. Such cooperation shall
include the retention and (upon the other party's request) the
provision of records and information which are reasonably
relevant to any such audit, litigation or other proceeding and
making employees available on a mutually convenient basis to
provide additional information and explanation of any material
provided hereunder. The Sellers agree (A) to retain all books
and records with respect to Tax matters and pertinent to the
Sellers relating to any taxable period beginning before the
Closing Date until the expiration of the statute of limitations
(and, to the extent notified by Buyer, any extensions thereof)
of the respective taxable periods, and to abide by all record
retention agreements entered into with any taxing authority, and
(B) to give the other party reasonable written notice prior to
transferring , destroying or discarding any such books and
records and, if the other party so requests, the Sellers shall
allow the other party to take possession of such books and
records.
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(ii) Buyer and Sellers further agree, upon
request, to use their best efforts to obtain any certificate or
other document from any governmental authority or any other
Person as may be necessary to mitigate, reduce or eliminate any
Tax that could be imposed (including, but not limited to, with
respect to the transactions contemplated hereby).
(c) Certain Taxes. All transfer, documentary,
sales, use, stamp, registration and other such Taxes and fees
(including any penalties and interest) incurred in connection
with this Agreement, shall be paid by Buyer when due, and Buyer
will, at its own expense, file all necessary Tax Returns and
other documentation with respect to all such transfer,
documentary, sales, use, stamp, registration and other Taxes and
fees, and, if required by applicable law, Sellers will, and will
cause their affiliates to, join in the execution of any such Tax
Returns and other documentation.
9.2 Employee and Employee Benefit Matters. Effective
as of the Closing Date, the employees of the Sellers (the
"Continued Employees") shall cease to be covered under the
employee benefit plans of Sellers and shall participate under
the employee benefit plans, programs and policies established by
the Buyer. To the extent permitted under the Buyer's' employee
benefit plans, the Continued Employees shall be covered under
the employee benefit plans without any exclusion for pre-
existing conditions and shall recognize the employees' service
with Sellers for purposes of vesting and eligibility under such
plans.
9.3 Press Releases and Announcements. Prior to the
Closing Date, no press releases related to this Agreement and
the transactions contemplated hereby, or other announcements to
the employees, customers or suppliers of the Sellers will be
issued without the mutual approval of all parties hereto, except
for any public disclosure which any party in good faith believes
is required by law or regulation (in which case the disclosure
shall be prepared jointly by the Sellers and Buyer). After the
Closing Date, no press releases related to this Agreement and
the transactions contemplated herein, or other announcements to
the employees, customers or suppliers of the Sellers will be
issued without Buyer's consent (which shall not be unreasonably
withheld).
9.4 Further Transfers. Sellers will execute and
deliver such further instruments of conveyance and transfer and
take such additional action as Buyer may reasonably request to
effect, consummate, confirm or evidence the transfer to Buyer of
the Acquired Assets and any other transactions contemplated
hereby.
9.5 Investigation and Confidentiality.
(a) Prior to the Closing Date, Buyer may make or
cause to be made such investigation of the business and
properties of the Sellers as it deems necessary or advisable to
familiarize itself therewith; provided that such investigation
shall be (i) reasonably related to the transactions contemplated
thereby and (ii) conducted in a manner as not to interfere
unreasonably with the normal business operations of the Sellers.
Prior to the Closing Date, Sellers will cause their officers,
directors and employees to permit Buyer, its employees and
authorized representatives and representatives of the financial
institutions which are considering participation in the
financing of this transaction to (i) have full access to the
premises, books and records of the Sellers at reasonable hours,
(ii) visit and inspect any of the properties of the Sellers, and
35
(iii) discuss the affairs, finances and accounts of the Sellers
with the directors, officers, key employees of the Sellers.
(b) If the transactions contemplated by this
Agreement are not consummated, Buyer will not disclose or use at
any time any information and materials reasonably designated by
Sellers as confidential (except that confidential information
shall not include (i) information which is publicly available
through no fault of Buyer, or (ii) information already known to
Buyer or obtained by Buyer from a third party not bound by any
duty of confidentiality to Sellers), and Buyer and its
representatives will return to Sellers originals of and destroy
copies of all memoranda, notes, plans, records, documentation
and other materials obtained from Sellers in connection with the
transactions contemplated by this Agreement which Buyer may then
possess or have under its control. Whether or not the
transactions contemplated hereby are consummated, Sellers will
maintain the confidentiality of all information and materials
regarding Buyer and its affiliates reasonably designated by
Buyer as confidential. If the transactions contemplated by this
Agreement are consummated, Sellers will maintain the
confidentiality of, and will not use for any purpose, all
proprietary and other non-public information regarding the
Sellers (including, without limitation, any of same included in
the Intellectual Property), except as necessary to file tax
returns and other reports to governmental agencies, and to turn
over to Buyer at the Closing copies of all such materials it has
in its possession. In the event that Sellers are requested or
required (by oral question or request for information or
documents in any legal proceeding, interrogatory, subpoena,
civil investigative demand, or similar process) to disclose any
such information, Sellers will notify Buyer promptly of the
request or requirement so that Buyer may seek an appropriate
protective order or waive compliance with the provisions of this
Section 9.5. If, in the absence of a protective order or the
receipt of a waiver hereunder, Sellers are, on the advice of
counsel, compelled to disclose any information to any tribunal
or else stand liable for contempt, Sellers may disclose the
information to the tribunal; provided, however, that Sellers
shall use their commercially reasonable efforts to obtain, at
the request of Buyer, an order or other assurance that
confidential treatment will be accorded to such portion of the
information required to be disclosed as Buyer shall designate.
This Section 9.5 shall survive any expiration or termination of
this Agreement.
(c) The parties hereto acknowledge and agree
that in the event of a breach by any party of any of the
provisions of this Section 9.5, monetary damages will not
constitute a sufficient remedy. Consequently, in the event of
any such breach, any non-breaching party and/or their respective
successors or assigns may, in addition to other rights and
remedies existing in their favor, apply to any court of law or
equity of competent jurisdiction for specific performance and/or
injunctive or other relief in order to enforce or prevent any
violations of the provisions hereof, in each case without the
requirement of posting a bond or proving actual damages.
9.6 Expenses. Sellers will pay the cost of the title
commitments required to be delivered to Buyer pursuant to
Section 2.1(i), and Buyer shall pay the premiums for any title
insurance policies that Buyer elects to obtain. Sellers and
Buyer will each pay one-half of the costs of any surveys
obtained by Sellers in order to obtain the title commitments
required to be delivered to Buyer pursuant to Section 2.1(i).
Except as set forth in the preceding sentences of this
Section 9.6 and as otherwise provided in this Agreement, Buyer
and Sellers will pay all of their
36
own fees, costs and expenses (including, without limitation,
fees, costs and expenses of legal counsel, investment bankers,
brokers or other representatives and consultants and appraisal
fees, costs and expenses) incurred in connection with the
negotiation of this Agreement, the performance of its
obligations hereunder, and the consummation of the transactions
contemplated hereby.
9.7 Exclusivity. Except as provided in this Section
9.7 and subject to the fiduciary duties of the boards of
directors of Sellers, until this Agreement is terminated by its
terms, Sellers will not (and Sellers will not cause or permit
any affiliate, director, officer, employee or agent of the
Sellers or their affiliates to), (a) solicit, initiate or
encourage the submission of any proposal or offer from any
person or entity (including any of them) relating to any (i)
liquidation, dissolution or recapitalization of, (ii) merger or
consolidation, (iii) acquisition or purchase of assets of or any
equity interest in or (iv) similar transaction or business
combination involving, the Sellers 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 other Person to do or
seek any of the foregoing. Until this Agreement is terminated by
its terms, Sellers shall notify Buyer immediately if any Person
makes any proposal, offer, inquiry or contact with respect to
any of the foregoing.
9.8 Books and Records. Unless otherwise consented to
in writing by Sellers or Buyer (as the case may be), Buyer and
Sellers will not, for a period of seven (7) years following the
date hereof, destroy, alter or otherwise dispose of any of the
books and records of the Sellers acquired by Buyer hereunder or
retained by Sellers without first offering to surrender to
Sellers or Buyer such books and records or any portion thereof
of which Sellers or Buyer may intend to destroy, alter or
dispose of. Buyer and Sellers will allow the other party's
representatives, attorneys and accountants access to such books
and records, upon reasonable request and during such party's
normal business hours, for the purpose of examining and copying
the same in connection with any matter whether or not relating
to or arising out of this Agreement or the transactions
contemplated hereby.
9.9 Accounts Receivable. In the event that any of
the accounts receivable on the Closing Balance Sheet remain
uncollected for more than 120 days following the Closing Date,
Buyer at its option may re-assign those accounts receivable to
Sellers, and Sellers shall pay to Buyer the face amount of such
accounts receivable less the amount of any reserves as set forth
on the Closing Balance Sheet.
ARTICLE X
MISCELLANEOUS
10.1 Amendment and Waiver. This Agreement may be
amended and any provision of this Agreement may be waived,
provided that any such amendment or waiver will be binding upon
a party only if such amendment or waiver is set forth in a
writing executed by Buyer and Sellers. No course of dealing
between or among any Persons having any interest in this
Agreement will be deemed effective to modify, amend or discharge
any part of this Agreement or any rights or obligations of any
party under or by reason of this Agreement.
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10.2 Notices. All notices, demands and other
communications given or delivered under this Agreement will be
in writing and will be deemed to have been given when personally
delivered, mailed by first class mail, return receipt requested,
delivered by express courier service or telecopied. Notices,
demands and communications to the Sellers and Buyer will, unless
another address is specified in writing, be sent to the address
or telecopy number indicated below:
Notices to Sellers:
SRM Aggregates, Inc.
U.S. Aggregates, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and
Baker, Donelson, Bearman & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Notices to Buyer:
Florida Rock Industries, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
McGuireWoods LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
38
Attention: ▇▇▇▇▇ ▇. ▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
10.3 Binding Agreement; Assignment. This Agreement
and all of the provisions hereof will be binding upon and inure
to the benefit of the parties hereto and their respective
successors and permitted assigns; provided that neither this
Agreement nor any of the rights, interests or obligations
hereunder may be assigned by Sellers without the prior written
consent of Buyer or by Buyer without the prior written consent
of Sellers, except that Buyer may assign all or a portion of its
rights (but not its obligations) hereunder to one or more
wholly-owned subsidiaries of Buyer.
10.4 Severability. Whenever possible, each provision
of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision
of this Agreement is held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating
the remainder of such provisions or the remaining provisions of
this Agreement.
10.5 No Strict Construction. The language used in
this Agreement shall be deemed to be the language chosen by the
parties hereto to express their mutual intent, and no rule of
strict construction will be applied against any Person.
10.6 Captions. The captions used in this Agreement
are for convenience of reference only and do not constitute a
part of this Agreement and will not be deemed to limit,
characterize or in any way affect any provision of this
Agreement, and all provisions of this Agreement will be enforced
and construed as if no caption had been used in this Agreement.
10.7 Entire Agreement. This Agreement and the
documents referred to herein contain the entire agreement
between the parties and supersede any prior understandings,
agreements or representations by or between the parties, written
or oral, which may have related to the subject matter hereof in
any way.
10.8 Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an
original but all of which taken together will constitute one and
the same instrument.
10.9 Governing Law. All issues and questions
concerning the construction, validity, enforcement and
interpretation of this Agreement and the exhibits and schedules
hereto shall be governed by, and construed in accordance with,
the laws of the State of Florida, without giving effect to any
choice of law or conflict of law rules or provisions (whether of
the State of Florida or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the
State of Florida.
10.10 Parties in Interest. Nothing in this Agreement,
express or implied, is intended to confer on any Person other
than the parties and their respective successors and assigns any
rights or remedies under or by virtue of this Agreement.
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10.11 Knowledge. As applied to the Sellers in this
Agreement, the terms "knowledge" or "aware" shall mean and
include the actual knowledge or awareness of ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇▇▇▇.
10.12 Time for Acceptance. If this Agreement
is not executed by and delivered to all parties by facsimile
transmission on or before 5:00 p.m. Eastern Time on July 11,
2001, this offer will be null and void. The date of this
Agreement will be the date when the last one of Buyer and
Sellers have executed this Agreement.
* * * *
40
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
SELLERS:
SRM AGGREGATES, INC.
By:/S/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
-------------------------------
Its: President
▇▇▇▇▇▇▇ ▇▇▇▇▇ & SAND, INC.
By:/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
-------------------------------
Its: President
BHY READY MIX, INC.
By:/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
-------------------------------
Its: President
DEKALB STONE, INC.
By:/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
-------------------------------
Its: President
MULBERRY ROCK CORPORATION
By:/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
-------------------------------
Its: President
41
BAMA CRUSHED CORPORATION
By:/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
-------------------------------
Its: President
GROVE MATERIALS CORPORATION
By:/S/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
-------------------------------
Its: President
PARENT:
U.S. AGGREGATES, INC.
By:/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
Its: CEO
42
BUYER:
FLORIDA ROCK INDUSTRIES, INC.
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇
-------------------------------
Its: President and CEO
43
LIST OF SCHEDULES
Schedule 1.3(f) Assumed Indebtedness Schedule
Schedule 2.1(i)(v) Title Commitments Schedule
Schedule 2.1(k) Ore Reserves Schedule
Schedule 5.1 Qualifications Schedule
Schedule 5.5 Subsidiary Schedule
Schedule 5.6 Restrictions Schedule
Schedule 5.8 Developments Schedule
Schedule 5.9(a) Real Property Schedule
Schedule 5.9(b) Leases Schedule
Schedule 5.9A Equipment Lease Schedule
Schedule 5.10 Personal Property Liens Schedule
Schedule 5.11 Tax Returns Schedule
Schedule 5.12 Contracts Schedule
Schedule 5.13 Intellectual Property Schedule
Schedule 5.14 Litigation Schedule
Schedule 5.16(a) Licenses Schedule
Schedule 5.16(b) Governmental Consent Schedule
Schedule 5.17(a) Employee Schedule
Schedule 5.18 Affiliate Transactions Schedule
Schedule 5.20 Environmental Matters Schedule
Schedule 9.1(a) Allocation of Purchase Price
1