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AGREEMENT OF PURCHASE
AND SALE OF ASSETS
by and among
OLDCASTLE MMG, INC.
as the Buyer
and
MONROC, INC.
as the Seller
and
U.S. AGGREGATES, INC.
and
OLDCASTLE MATERIALS, INC.
February 5, 2002
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TABLE OF CONTENTS
PAGE
PREAMBLE......................................................................1
RECITALS......................................................................1
1. Purchase and Sale of Assets............................................1
1.1 Acquired Assets............................................1
1.2. Excluded Assets............................................2
1.3. Purchase Price.............................................3
1.4. Adjustments to Purchase Price..............................3
1.5. Closing Date...............................................5
2. Liabilities............................................................5
2.1. Liabilities Assumed by Buyer...............................5
2.2. Liabilities Not Assumed by Buyer...........................6
3. Allocation of Purchase Price...........................................7
4. Representations and Warranties of the Sellers..........................7
4.1. Organization and Qualification.............................7
4.2. Authority..................................................7
4.3. Financial Condition........................................7
4.3.1. Financial Statements............................7
4.3.2. Absence of Certain Changes......................8
4.3.3. No Transfers....................................9
4.4. Tax Matters................................................9
4.4.1. Tax Returns; Disputes...........................9
4.4.2. Section 168.....................................9
4.4.3. FIRPTA 10
4.4.4. Tax Definitions................................10
4.5. Litigation and Claims.....................................10
4.5.1. Litigation Pending or Threatened...............10
4.5.2. Operations Enjoined............................10
4.5.3. Violation of Law; Permits......................10
4.6. Properties and Assets of the Sellers......................11
4.6.1. Title to Real Property.........................11
4.6.1.1. Maintenance............................13
4.6.1.2. Assessments............................14
4.6.1.3. Binding Commitments....................14
4.6.1.4. Title Documents........................14
4.6.1.5. No Breach or Event of Default;
Property Leases........................14
4.6.1.6 Violation of Law.......................14
4.6.2. Personal Property..............................15
4.7. Insurance.................................................15
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4.8. Labor and Employment Matters..............................15
4.8.1. Labor and Employment Definitions...............15
4.8.2. Employee Benefit Plans.........................16
4.8.3. Benefit Obligations............................17
4.8.4. Performance....................................17
4.8.5. Compensation...................................17
4.8.6. Resignations...................................17
4.8.7. Collective Bargaining Agreements...............17
4.8.8. Termination of Employment......................18
4.9. Compensation of and Indebtedness to and from Employees....18
4.9.1. Employee Compensation..........................18
4.9.2. Indebtedness...................................18
4.10. Contracts.................................................18
4.11. Environmental Matters.....................................19
4.11.1. Hazardous Materials............................19
4.11.2. Environmental Requirements.....................19
4.11.3. Notice of Violations...........................19
4.11.4. Potentially Responsible Party..................20
4.11.5. Environmental Reports..........................20
4.11.6. Definitions....................................20
4.12. Agreement Not in Breach of Other Instruments..............21
4.13. Regulatory Approvals......................................22
4.14. Inventories...............................................22
4.15. Ownership of Capital Stock................................20
4.16. Brokerage.................................................22
4.17. Customers.................................................22
4.18. Product Liability.........................................22
4.19. Sufficiency of Assets.....................................23
4.20. Preservation of Documents.................................23
4.21. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇.........................................23
5. Representations and Warranties of the Buyer...........................23
5.1. Organization and Qualification............................23
5.2. Authority.................................................23
5.3. Brokerage.................................................23
5.4. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇.........................................23
6. Employees.............................................................23
6.1 Obligation to Employ......................................23
6.2 Offers to Employ..........................................24
7. Company Closing Deliveries............................................24
7.1. Closing Documents.........................................26
7.2. Permits, Approvals and Authorizations.....................26
7.3. No Challenge or Violation of Orders.......................25
7.4. Evidence of Title.........................................26
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8. Buyer Closing Deliveries..............................................26
8.1. Closing Documents.........................................27
8.2. Permits, Approvals and Authorizations.....................27
8.3. No Challenge or Violation of Orders.......................26
9. Actions After the Closing Date........................................27
9.1. Cooperation...............................................27
9.2. Further Assurances........................................28
9.3 Non-Compete and Non-Solicitation..........................27
10. Indemnification.......................................................29
10.1.1 Indemnification of the Buyer...................29
10.1.2. Indemnification of the Company.................31
10.2. Survival..................................................31
10.2.1. General Claims.................................32
10.2.2. Environmental Claims...........................32
10.2.3. Claims Barred Only by the Applicable
Statute of Limitations.........................32
10.2.4. Limitations....................................32
10.3. Defense by the Indemnifying Party.........................32
10.4. Notice....................................................33
10.5. Waiver....................................................33
10.6. Accounts Receivable.......................................32
10.7 Payment...................................................32
11. Miscellaneous Provisions..............................................34
11.1. Jurisdiction; Agent for Service...........................34
11.2. Construction..............................................34
11.3. Notices...................................................34
11.4. Payment of Expenses.......................................35
11.5. Assignment................................................36
11.6. Amendments and Waiver.....................................36
11.7. Survival..................................................36
11.8. Counterparts..............................................36
11.9. Headings..................................................36
11.10. Attorneys' Fees...........................................36
11.11. Binding Nature of Agreement...............................36
11.12. Severability..............................................37
11.13. Specific Performance......................................37
11.14. Complete Agreement........................................37
11.15. Drafting Presumption......................................35
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LIST OF EXHIBITS*
Exhibit A Chicago Title Instruction Letter
Exhibit B Contract Assignment
Exhibit C Lease Assignment
Exhibit D ▇▇▇▇ of Sale
LIST OF SCHEDULES*
Schedule A Operations: Location; Type of Facility
Schedule 1.1 Permitted Encumbrances
Schedule 1.1(a) Personal Property
Schedule 1.1(d) Inventories
Schedule 1.1(e) Contracts
Schedule 1.1(k) Other Acquired Assets
Schedule 1.2(g) Other Excluded Assets
Schedule 1.3(a)(ii) Capital Leases and Debt to be Paid as of the Closing Date
Schedule 1.4(a) Formula for Closing Date Allowance for Doubtful Accounts
Schedule 2.2(h) Back Log Orders
Schedule 3 Purchase Price Allocation
Schedule 4.3.2 Certain Changes
Schedule 4.3.3 Transfers of Personal Property
Schedule 4.4.1 Tax Returns; Disputes
Schedule 4.5.1 Litigation Pending or Threatened
Schedule 4.5.3 Violation of Law; Permits
Schedule 4.6.1(a) Title to Real Property
Schedule 4.6.1(c) Zoning; Land Use
Schedule 4.6.1(d) Eminent Domain
Schedule 4.6.1(g) Taxes; Assessments
Schedule 4.6.1(h) Strips; Gores
Schedule 4.6.1(j) Water Rights
Schedule 4.6.1(k) Mineral Rights
Schedule 4.6.1.1 Maintenance
Schedule 4.6.1.4 Title Documents
Schedule 4.6.1.5 Breach or Event of Default; Property Leases
Schedule 4.6.1.6 Violation of Law
Schedule 4.6.2 Personal Property
Schedule 4.8.2 Employee Benefits Plans
Schedule 4.8.2(b) Multiemployer Plans
Schedule 4.8.2(c) Pension Plans
Schedule 4.8.6 Employees
Schedule 4.8.7 Collective Bargaining Agreements
Schedule 4.8.7(b) Claims; Controversies
Schedule 4.8.8 Employees not to be Terminated
Schedule 4.9.1 Key Employee Compensation
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Schedule 4.10.1 Material Contracts
Schedule 4.11.1 Hazardous Materials
Schedule 4.11.2 Environmental Requirements
Schedule 4.11.3 Notice of Violations
Schedule 4.11.4 Potentially Responsible Party
Schedule 4.13 Regulatory Approvals
Schedule 4.17 Customers
Schedule 4.18 Product Liability
*Exhibits and Schedules (with the exception of Schedule A attached hereto) have
been omitted and will be provided in accordance with Item 601(b)(2) of
Regulation S-K upon request.
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DEFINED TERMS
Acquired Assets ............................................................ 1.1
Actual Working Capital................................................... 1.4(a)
Actual Accounts Receivable............................................... 1.4(a)
Affiliate............................................................9.3(a)(iii)
Agreement...............................................................Preamble
Assumed Liabilities ........................................................ 2.1
Balance Sheet.......................................................... 4.3.1(a)
Balance Sheet Date .................................................... 4.3.1(a)
▇▇▇▇ of Sale ............................................................ 7.1(c)
Buyer...................................................................Preamble
Closing .................................................................... 1.5
Closing Balance Sheet.................................................... 1.4(a)
Closing Date ............................................................... 1.5
Closing Date Payment..................................................... 1.3(a)
COBRA....................................................................... 6.1
Code ..................................................................... 4.4.2
Company.................................................................Preamble
Contract Assignment ..................................................... 7.1(a)
Contracts ............................................................... 1.1(e)
Deferred Payment......................................................... 1.3(d)
Employee Benefit Plan .................................................... 4.8.1
Encumbrances ............................................................... 4.6
Environmental Claims .................................................... 10.2.2
Environmental Damages ................................................ 4.11.6(i)
Environmental Requirements .......................................... 4.11.6(ii)
ERISA .................................................................... 4.8.1
ERISA Affiliate .......................................................... 4.8.1
ERISA Plan ............................................................... 4.8.1
Excluded Assets ............................................................ 1.2
Excluded Liabilities ...................................................... 2.2A
Excluded Operations.....................................................Recitals
Excluded Operations Assets..............................................Recitals
Financial Statements .................................................. 4.3.1(a)
Former Real Property ................................................4.11.6(iii)
Fraud Claim ............................................................. 10.2.3
GAAP................................................................... 4.3.1(b)
Governmental Authority .............................................. 4.11.6(iv)
Hazardous Materials .................................................. 4.11.6(v)
Independent Accountants ................................................. 1.4(c)
Instruction Letter....................................................... 1.3(a)
Interest................................................................. 1.4(d)
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Inventories ............................................................. 1.1(d)
Key Employee.............................................................. 4.9.1
Lease Assignment ........................................................ 7.1(b)
Leased Property ....................................................... 4.6.1(a)
Limited Indemnity Claim ................................................. 10.2.4
Multiemployer Plan ....................................................... 4.8.1
Notice of Disagreement .................................................. 1.4(c)
Operations..............................................................Recitals
Owned Property ........................................................ 4.6.1(a)
Owned Water Rights..................................................... 4.6.1(j)
Pension Plan ............................................................. 4.8.1
Permits ................................................................. 1.1(f)
Permitted Encumbrances...................................................... 1.1
Personal Property ....................................................... 1.1(a)
Proper Authority Claim .................................................. 10.2.3
Property Leases ........................................................ 4.6.1.4
Purchase Price.............................................................. 1.3
Real Property ......................................................... 4.6.1(a)
Sellers.................................................................Preamble
Stockholder............................................................ Preamble
Tax Claim ............................................................... 10.2.3
tax return ............................................................... 4.4.4
taxes .................................................................... 4.4.4
Threshold Amount ........................................................ 10.2.4
Title Documents ........................................................ 4.6.1.4
WARN Act ....................................................................6.1
Water Rights........................................................... 4.6.1(j)
Welfare Plan ............................................................. 4.8.1
Working Capital Statement................................................ 1.4(b)
vii
AGREEMENT OF PURCHASE AND SALE OF ASSETS
This AGREEMENT (this "Agreement") is made this 5th day of February,
2002 by and among OLDCASTLE MMG, INC., a Utah corporation (the "Buyer"), on the
one hand, and MONROC, INC., a Delaware corporation, (the "Company"), on the
other hand, and, solely with respect to SECTIONS 9, 10, and 11, U.S. AGGREGATES,
INC., a Delaware corporation, (the "Stockholder," and collectively with the
Company, the "Sellers") and OLDCASTLE MATERIALS, INC., a Delaware Corporation,
("Oldcastle," and collectively with the Buyer, the "Buyers").
RECITALS
A. The Company operates certain businesses as described on
SCHEDULE A at the locations within the state of Idaho described on SCHEDULE A
(collectively, the "Operations"), and the Company owns, leases or has the right
to use the assets used in, necessary for or related to the Operations as
currently conducted by the Company. The Sellers also operate other businesses
(collectively, the "Excluded Operations").
B. The Company desires to sell the Operations and the assets used
in and related to the Operations and to assign certain leases and other rights
and obligations in connection with the Operations, and the Buyer desires to
purchase such assets and assume such leases, rights and obligations. The Sellers
desire to continue to own the Excluded Operations, and the assets used primarily
in the conduct of the Excluded Operations, except those specifically being sold
or leased in connection with this Agreement, will not be purchased by the Buyer
(collectively, the "Excluded Operations Assets").
AGREEMENT
In consideration of the foregoing and the mutual covenants contained in
this Agreement and for other valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Buyers and the Sellers agree as follows:
1. PURCHASE AND SALE OF ASSETS.
1.1 ACQUIRED ASSETS. On the Closing Date (as defined in SECTION 1.5
below), the Company agrees to sell and deliver to the Buyer, free and clear of
all Encumbrances except for those set forth on SCHEDULE 1.1 (the "Permitted
Encumbrances"), against payment therefor as provided in SECTION 1.3, all of the
assets and properties of every kind which are primarily used by the Company in
the Operations (except for the Excluded Operations Assets and those Excluded
Assets listed in SECTION 1.2), including, without limitation, the following
assets (all such assets and properties of the Company are collectively referred
to hereinafter as the "Acquired Assets"):
(a) all fixtures, vehicles, machinery, equipment, rolling
stock, tools, furniture, pallets, phones, office supplies and other
items of personal property included on SCHEDULE 1.1(A) or used
primarily by the Company in the Operations as of the Closing Date
except those which are Excluded Assets (collectively, the "Personal
Property");
1
(b) all Owned Property (as defined in SECTION 4.6.1);
(c) all right, title and interest in and to all Property
Leases (as defined in SECTION 4.6.1);
(d) all inventories, including materials, spare parts,
equipment, supplies and other similar items listed on SCHEDULE 1.1(D)
or used by the Company primarily in the Operations as of the Closing
Date (collectively, the "Inventories");
(e) all contracts of the Operations (including purchase orders
and supply agreements) that are listed on SCHEDULE 1.1(E) and, in the
Buyer's discretion, any contracts of the Operations not listed on
SCHEDULE 1.1(E) that the Buyer determines to assume within a reasonable
time after the Buyer becomes aware of such contract (the "Contracts");
(f) the federal, state, local and foreign licenses, permits,
certificates of occupancy or use and other governmental approvals or
authorizations used in or related to the Operations and listed on
SCHEDULE 4.5.3 (collectively, "Permits") to the extent such Permits may
be transferred;
(g) all rights and claims against third parties in respect of
the Acquired Assets under express or implied warranties relating to the
Acquired Assets from suppliers to the Company and all claims and rights
of offset under the Property Leases, except to the extent they are
primarily related to the Excluded Assets;
(h) all computer hardware, all licenses to the Command Alkon
software and, to the extent transferable, licenses to all other
software related to batch computers used by the Company primarily in
the Operations;
(i) all accounts and notes receivable of the Company related
to the Operations;
(j) the name "Monroc of Idaho," PROVIDED, HOWEVER, unless the
Company otherwise agrees in writing, the Buyer shall not have the right
to conduct operations under such name outside of the State of Idaho
(notwithstanding the foregoing limitation, the Buyer shall not be
deemed to have exceeded its rights hereunder if its use of the name
"Monroc of Idaho" is restricted to the presence of such name on
vehicles owned by the Buyer which are used outside of Idaho in the
ordinary course of business); and
(k) all those assets specifically listed in SCHEDULE 1.1(K)
hereto.
1.2. EXCLUDED ASSETS. Notwithstanding anything contained in SECTION 1.1
hereof to the contrary, the Company is not selling, and the Buyer is not
purchasing, any of the following assets owned by the Company, all of which shall
be retained by the Company (collectively, the "Excluded Assets"):
2
(a) the Company's originals of books and records relating to
the Acquired Assets and the Company's purchase and sales activities
relating to the Operations and the Acquired Assets prior to the Closing
Date, returns of taxes, including all supporting schedules,
attachments, work papers and similar documents, for taxes accruing on
or before the Closing Date; provided that the Company shall provide
copies of all the aforementioned documents to the Buyer at the request
of the Buyer, PROVIDED FURTHER, HOWEVER, that the Company shall not be
required to deliver any pricing information or any information related
to the Excluded Assets;
(b) any cash, cash equivalents, short term investments, ▇▇▇▇▇
cash, deposit accounts, checks received by the Company upon which
collection has not been made, and long and short term securities owned
by the Company as of the Closing Date;
(c) the rights which accrue or will accrue to the Company
under this Agreement;
(d) the rights which accrue or will accrue to the Company
under any employment or severance agreements between the Company and
its employees or former employees, including any collective bargaining
agreements to which the Company is a party;
(e) the rights which accrue or will accrue to the Company
under any sales price or volume proposals or commitments, offers to
sell or sales negotiations entered into or made by employees of or
agents acting on behalf of the Company other than the proposals,
executory sales contracts and firm offers in existence as of the
Closing Date as set forth on SCHEDULE 2.2(H);
(f) all of the assets and properties of every kind which are
not primarily used by the Company in the Operations;
(g) all those assets specifically listed in SCHEDULE 1.2(G)
hereto.
1.3. PURCHASE PRICE. As consideration for the Acquired Assets, the
Buyer shall pay to the Company the aggregate sum of $21,750,000, as adjusted
pursuant to SECTIONS 1.4(D), 10.6 and 10.7, (the "Purchase Price"), payable as
follows. The Buyer shall also assume certain leases and other contracts and
liabilities of the Company as set forth in SECTION 2.1.
(a) On the Closing Date, the Buyer shall pay $21,250,000 (the
"Closing Date Payment") by wire transfer of immediately available funds
to Chicago Title, to be held in escrow until such time as the
requirements set forth in the instruction letter attached hereto as
EXHIBIT A (the "Instruction Letter") have been satisfied, at which time
the Closing Date Payment shall be distributed by wire transfer of
immediately available funds as follows:
(i) $[ ]to the Company; and
3
(ii) an aggregate of $[ ] to the persons or
entities set forth on SCHEDULE 1.3(A)(II) in full satisfaction
of all amounts outstanding as of the Closing Date pursuant to
the Company's secured debt and the Company's capital leases
other than those leases listed on SCHEDULE 1.2(G), which
leases and assets thereunder shall be retained by the Company.
(b) On the date that is one hundred eighty calendar days after
the Closing Date, the Buyer shall pay to the Company $500,000 (the
"Deferred Payment"), as adjusted pursuant to SECTIONS 1.4(D), 10.6 and
10.7, by wire transfer of immediately available funds. Until released
to the Company, the Deferred Payment shall continue to be the property
of the Buyer and shall provide security to the Buyer for the Sellers'
performance of its obligations pursuant to SECTIONS 1.4 and 10.
(c) The parties hereby acknowledge and agree that the payment
of the Purchase Price by the Buyer represents fair market value, based
on an actual, arms-length transaction, in consideration for the
acquisition of the Acquired Assets.
1.4. ADJUSTMENTS TO THE PURCHASE PRICE.
(a) The Purchase Price shall be adjusted according to the
difference between the Actual Working Capital of the Operations (as
defined below) and $4,000,000. The "Actual Working Capital" shall be
the sum of the book values of (i) saleable inventory related to the
Operations, and (ii) accounts and notes receivable related to the
Operations MINUS allowance for doubtful accounts, related to the
Operations as reflected on the Company's balance sheet as of the
Closing Date (the "Closing Balance Sheet"), which shall be prepared by
the Sellers in accordance with generally accepted accounting principles
and consistent with past practice except as otherwise agreed by the
Company and the Buyer. The accounts and notes receivable related to the
Operations MINUS allowance for doubtful accounts, related to the
Operations as reflected on the Closing Balance Sheet are referred to
herein as the "Actual Accounts Receivable." SCHEDULE 1.4(A) sets forth
the formula to be used to determine the allowance for doubtful accounts
as of the Closing Date.
(b) The Actual Working Capital shall be determined by the
Sellers and a copy of the calculation thereof (the "Working Capital
Statement") shall be delivered by the Sellers to the Buyer as soon as
practicable following the Closing Date, but not later than 15 calendar
days thereafter. Representatives of the Buyer shall have the right to
participate with the representatives of the Sellers in the process of
preparing the Working Capital Statement and shall have access to all
data, schedules and work papers used by the Sellers in preparing the
Closing Balance Sheet and the Working Capital Statement.
(c) The determination of Actual Working Capital shall become
final and binding upon the parties on the 30th calendar day following
receipt thereof by the Buyer unless the Buyer delivers written notice
of its disagreement ("Notice of Disagreement") to the Company prior to
such date. Any Notice of Disagreement shall specify the amounts set
forth on the Working Capital Statement with which the Buyer disagrees.
If a Notice of Disagreement is sent by the Buyer, then the Actual
Working
4
Capital (as recalculated in accordance with clause (x) or (y) below)
shall become final and binding upon the parties on the earlier of (x)
the date the parties hereto resolve in writing any differences they
have with respect to any matter specified in the Notice of Disagreement
or (y) the date any disputed amounts are finally determined in
accordance with the balance of this paragraph. During the 30-day period
following the delivery of a Notice of Disagreement, the Company and the
Buyer shall seek in good faith to resolve in writing any differences
which they may have with respect to any amount specified in the Notice
of Disagreement or identified by either parties during said 30-day
period. If, at the end of such 30-day period, the Company and the Buyer
have not reached agreement on such amounts, the amounts which remain in
dispute shall be recalculated by an accounting firm mutually agreed
upon by the Company and the Buyer which firm shall not have had a
business relationship with either party within the prior 24 months (the
"Independent Accountants"). The Independent Accountants shall make a
ratable allocation of their charges for such work as a part of their
determination, based on the proportion by which the amount in dispute
was determined in favor of one party or the other. Any amounts so
recalculated shall be final and binding on the parties.
(d) If the Actual Working Capital is less than $4,000,000,
then the Buyer shall reduce the Deferred Payment by the amount of such
shortfall with interest thereon at a fluctuating rate that is at all
times equal to the prime rate in effect from time to time at Citibank,
N.A. (or similar financial institution) in New York on 90-day unsecured
loans to substantial and responsible customers, calculated on the basis
of the actual number of days elapsed from the Closing Date to the date
of such reduction (interest calculated in the foregoing manner is
referred to herein as "Interest"). If the Deferred Payment has been
depleted pursuant to this SECTION 1.4(D) or SECTIONS 10.6 or 10.7, the
Sellers shall promptly deliver to the Buyer the amount of such
shortfall with Interest. If the Actual Working Capital is greater than
$4,000,000, then the Buyer shall deliver to the Company the amount of
such excess with Interest within five business days of the final
determination of the Actual Working Capital.
1.5. CLOSING DATE. The closing (the "Closing") of the purchase and sale
of the Acquired Assets shall be held at 10:00 a.m. Eastern time on February 5,
2002 or on any other date or time as is mutually agreed by the parties hereto
(such date and time being referred to herein as the "Closing Date"). The Closing
shall be effective as of 12:01 a.m., Idaho time, on February 6, 2002.
2. LIABILITIES.
2.1. LIABILITIES ASSUMED BY BUYER. As further consideration for
consummation of the transactions contemplated hereby, the Buyer hereby assumes
the obligations under those leases, contracts and agreements included in the
Acquired Assets (including the Property Leases and the Contracts) to the extent
that such obligations arise in and are related to periods after the Closing Date
(the "Assumed Liabilities") and:
(a) the liability, if any, of the Company to pay employees
terminated as of the Closing Date for accumulated vacation time,
PROVIDED, THAT, the Buyer shall pay no more than $150,000 pursuant to
such obligation.
5
2.2. LIABILITIES NOT ASSUMED BY BUYER. Except for the Assumed
Liabilities, the Buyer is not assuming any debts, obligations or liabilities of
the Sellers whatsoever, whether known or unknown, actual or contingent, matured
or unmatured, currently existing or arising in the future, including but not
limited to the liabilities set forth below, whether such liabilities have been
disclosed on the Financial Statements or not (collectively, the "Excluded
Liabilities"), which shall remain the sole responsibility of the Sellers
(whether or not the Buyer is alleged to have liability as a successor to the
Company):
(a) the fees and expenses of legal counsel, auditors,
accountants, environmental consultants and environmental engineers
retained or employed by the Sellers for services rendered in connection
with the preparation, negotiation, execution, delivery and performance
of this Agreement and the transactions contemplated hereby;
(b) any liability of the Sellers for taxes (as hereinafter
defined) which arise, are assessed or become payable or due as of or
prior to the Closing Date or arise out of the consummation of the
transactions contemplated hereby or become payable by the Sellers as a
result of purchases, sales or transfers as of or prior to the Closing
Date, or other taxes of any kind or description except that (i) Buyer
shall have sole responsibility for current real estate and personal
property taxes with respect to the Acquired Assets to the extent such
taxes relate to periods after the Closing Date, and (ii) Idaho state
sales tax (under Title 63, Chapter 36 of the Idaho Code) incurred as
result of the acquisition of the Operations, transfer of the Acquired
Assets and the assumption of the Assumed Liabilities shall be shared
equally by the Company and the Buyer;
(c) any liability or obligation to third parties (contingent
or otherwise) of the Sellers related to periods prior to the Closing
Date arising out of any claim or litigation;
(d) any liability or obligation for Environmental Damages
related to periods prior to the Closing Date;
(e) any trade or other accounts payable related to periods
prior to the Closing Date;
(f) any liability or obligation of the Sellers under those
leases, contracts and agreements which are Acquired Assets (including
the Property Leases and the Contracts) related to periods prior to the
Closing;
(g) any liability or obligation of the Sellers under any
employment or severance agreements between the Company and its
employees or former employees, including any collective bargaining
agreements to which the Company is a party;
(h) any liability or obligation of the Sellers under any sales
price or volume proposals or commitments, offers to sell or sales
negotiations entered into or made by employees of or agents acting on
behalf of the Company other than the proposals, executory sales
contracts and firm offers in existence as of the Closing Date as set
forth on SCHEDULE 2.2(h); and
6
(i) any liability or obligation of the Sellers under those
leases, contracts and agreements which are Excluded Assets (including
the leases listed on SCHEDULE 1.2(g));
3. ALLOCATION OF PURCHASE PRICE. The parties agree that the amount of the
Purchase Price and the Assumed Liabilities that are liabilities for federal
income tax purposes shall be allocated for federal income tax purposes among the
Acquired Assets in accordance with Schedule 3. Subject to the requirements of
applicable law, such allocation (and any amendments thereto by reason of
adjustments to the Purchase Price hereunder) shall be binding upon the parties
for the purposes of filing any return, report or schedule regarding taxes.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to the Buyer, as of the date hereof and as of the Closing Date, as
follows:
4.1. ORGANIZATION AND QUALIFICATION. The Company is duly formed and
validly existing as a corporation in good standing under the laws of the State
of Delaware and has all corporate power and authority to own or lease and
operate its properties and assets and to carry on its business in the manner in
which such business is now being conducted. The Company is duly qualified to do
business as a foreign corporation and is in good standing in every jurisdiction
in which the nature of the business conducted by it or the character or location
of the properties or assets owned or leased by it makes qualification necessary
and material to the Company. The Company has no subsidiaries.
4.2. AUTHORITY. The Sellers have full power and authority to enter into
this Agreement and to consummate the transactions contemplated hereby. This
Agreement and all other agreements to be executed in connection herewith by the
Sellers have been duly executed and delivered by the Sellers, have been duly
authorized by all necessary corporate action by the Sellers (including, without
limitation, any required authorization by the board of directors and
shareholders of the Sellers) and constitute legal, valid and binding obligations
of the Sellers enforceable in accordance with their respective terms.
4.3. FINANCIAL CONDITION.
4.3.1. FINANCIAL STATEMENTS.
(a) The Company has furnished the Buyer with copies of the
following (collectively, the "Financial Statements")": (i) the
unaudited financial statements for the year ended December 31, 2001
(the "Balance Sheet Date"), including a balance sheet as at such dates
(the balance sheet as at the Balance Sheet Date is referred to herein
as the "Balance Sheet"); and (ii) the related statements of income and
of changes in financial position for the fiscal year then ended, in
each case derived from the unaudited financial statements of the
Stockholder.
(b) The Financial Statements: (i) are correct and complete in
all material respects; (ii) present fairly the results of operations
included in such Financial Statements for the periods included therein;
and (iii) do not omit any information necessary to make such Financial
Statements not misleading.
7
(c) Since January 1, 2001, the Company has kept books, records
and accounts relating to the Operations that, in reasonable detail,
accurately and fairly reflect (A) the transactions and dispositions of
assets of the Company and (B) the value of inventory. Neither the
Company nor any employee, agent or shareholder of the Sellers, directly
or indirectly, has made any payment of funds of any such entity or
received or retained any funds relating to the Acquired Assets or the
Operations in violation of any applicable law, rule or regulation.
4.3.2. ABSENCE OF CERTAIN CHANGES. Since the Balance Sheet Date,
each of the Sellers has used its reasonable best efforts to preserve the
business organization of the Operations intact, to keep available to the Buyer
the services of all current employees of the Operations and to preserve the
goodwill of the suppliers, customers, employees and others having business
relations with the Operations. Since the Balance Sheet Date, the Company has
conducted the Operations in the ordinary course, has maintained the Acquired
Assets in at least as good order and condition as existed on the Balance Sheet
Date (other than wear and tear as may be accounted for by reasonable use) and as
is necessary to continue to conduct the Operations.
Except as set forth on SCHEDULE 4.3.2, since the Balance Sheet
Date there has not been:
(a) any material transaction by the Sellers relating to the
Operations not in the ordinary and usual course of business;
(b) any material adverse change in the financial condition,
assets, liabilities, business or prospects of the Operations, taken as
a whole;
(c) any damage, destruction or loss, whether or not covered by
insurance, affecting the Acquired Assets or the Operations;
(d) any material alteration in the manner in which the Company
keeps its books, accounts or records relating to the Operations, or in
the accounting principles and practices therein reflected;
(e) a termination, substantial modification or, to the
knowledge of the Company, threatened termination or substantial
modification of the Company's relationship with a material customer of
the Operations (other than jobs completed in the ordinary course of
business) or supplier or adverse event affecting any product or process
used in connection with the Operations;
(f) a lease of, or commitment to acquire or lease, any realty
or any substantial item of machinery or equipment which would
constitute an Acquired Asset;
(g) any mortgage, pledge or lien, charge or other encumbrance
placed upon any of the Acquired Assets;
8
(h) any sale, assignment or transfer of any asset, property or
business relating to the Operations or cancellation of any debt or
claim or waiver of any right relating to the Acquired Assets or the
Operations, except in the ordinary course of business;
(i) any increase in the salary or other compensation payable
or to become payable to any employee, officer or director of the
Company, or the declaration, payment or commitment of any kind for the
payment of a bonus or other compensation or benefit to any such
employee, officer or director;
(j) any commitment for capital expenditures relating to the
Operations, except as may have been necessary for ordinary repair,
maintenance and replacement; or
(k) in general, any material change in the financial
condition, operations, business, properties, assets, business prospects
or manner of conducting the Operations, other than changes in the
ordinary and usual course of business consistent with prior practice.
4.3.3. NO TRANSFERS. Except as listed on SCHEDULE 4.3.3 hereof,
the Acquired Assets include all the Personal Property of any kind, including but
not limited to vehicles and any other rolling stock, used by the Company
primarily in the conduct of the Operations as of December 31, 2001. Except as
disclosed on SCHEDULE 4.3.3, there has been no transfer of any kind of any such
Personal Property on or after December 31, 2001 to any unit, division or other
portion of either Seller that is not included in the Operations or to any
affiliate of any Seller or to any other third party, nor have there been any
substitutions made with respect to any such Personal Property.
4.4. TAX MATTERS.
4.4.1. TAX RETURNS; DISPUTES. Except as set forth on SCHEDULE
4.4.1, the Company has filed or has had filed on its behalf, within the time and
in the manner prescribed by law, all federal, and all material state and local
tax returns and reports required to be filed by it with respect to the Acquired
Assets, and has paid all taxes shown to be due thereon. All such returns were
true, accurate and complete in all material respects. There are no outstanding
assessments or taxes otherwise due that if not paid on a timely basis would
result, on or after the Closing Date, in any liens for taxes on any of the
Acquired Assets. There are no pending or, to the knowledge of the Sellers,
threatened United States federal or applicable state tax audits involving either
Seller or any of their Affiliates, the adverse determination of which could
result in a lien upon the Acquired Assets.
4.4.2. SECTION 168. None of the Acquired Assets is tax-exempt use
property within the meaning of Section 168(h) of the Internal Revenue Code of
1986, as amended (the "Code"). None of the Acquired Assets is property that is
or will be required to be treated as being owned by another person pursuant to
the provisions of Section 168(f)(8) of the Internal Revenue Code of 1954, as
amended and in effect immediately prior to the enactment of the Tax Reform Act
of 1986.
9
4.4.3. FIRPTA. The Company is not a foreign person within the
meaning of Section 1445(f)(3) of the Code.
4.4.4. TAX DEFINITIONS. As used in this Agreement, the term "tax
return" includes any material report, statement, form, return or other document
or information required to be supplied to a taxing authority in connection with
taxes. As used in this Agreement, the term "taxes" means any federal, state,
local and foreign income or gross receipts tax, alternative or add-on minimum
tax, sales and use tax, customs duty and any other tax, charge, fee, levy or
other assessment, including, without limitation, property, transfer, occupation,
service, license, payroll, franchise, excise, withholding, ad valorem,
severance, documentary stamp, gains, premium, windfall profit, employment, rent
or other tax, governmental fee or like assessment or charge of any kind
whatsoever, together with any interest, fine or penalty thereon, addition to
tax, additional amount, deficiency, assessment or governmental charge imposed by
any federal, state, local or foreign taxing authority which is payable by the
Company.
4.5. LITIGATION AND CLAIMS.
4.5.1. LITIGATION PENDING OR THREATENED. Except as set forth on
SCHEDULE 4.5.1, there is no action, suit, claim, arbitration, proceeding or
investigation relating to the Acquired Assets or the Operations pending or
threatened before any court, tribunal, panel, master or governmental agency,
authority or body in which either of the Sellers is a party or which might
affect the Acquired Assets or the Operations. SCHEDULE 4.5.1 sets forth all
litigation relating to the Acquired Assets or the Operations to which either
Seller is party.
4.5.2. OPERATIONS ENJOINED. Neither the Sellers, nor any employee,
manager or gent of any of the Sellers has been permanently or temporarily
enjoined by any order, judgment or decree of any court or tribunal or any other
agency from engaging in or continuing any conduct or practice in connection with
the Operations.
4.5.3. VIOLATION OF LAW; PERMITS. Except as disclosed on SCHEDULE
4.5.3, the Company is not in material violation of any provision of any law,
decree, order or regulation applicable to the Operations or the Acquired Assets,
including, without limitation, those relating to antitrust or other
anticompetitive practices, to employment practices (such as discrimination,
health and safety), and to minority business enterprises. Except as disclosed on
SCHEDULE 4.5.3, the Company has all Permits required with respect to the
Acquired Assets or in the conduct of the Operations and the operation of the
Real Property, all of which Permits are set forth on SCHEDULE 4.5.3, and has
satisfied all material bonding requirements pertaining to the Operations or the
Acquired Assets under federal, state, local and foreign laws, rules and
regulations. Except as disclosed on SCHEDULE 4.5.3, all such Permits may be
transferred in accordance with applicable law and assigned to the Buyer without
the approval or consent of any third party. Except as disclosed on SCHEDULE
4.5.3, the present conduct of the Operations is not dependent upon any so-called
"non-conforming use" exception nor based upon any zoning variance. To the extent
the operation of any Real Property is subject to any non-conforming use or
zoning variance, the Buyer will have the right to continue such operation after
the Closing Date in the manner such were conducted by the Company immediately
prior to the Closing.
10
4.6. PROPERTIES AND ASSETS OF THE COMPANY. Upon consummation of the
transactions contemplated by this Agreement the Buyer will acquire good and
marketable title to the Acquired Assets, free and clear of all mortgages,
security interests, claims, equities, liens, charges, imperfections of title,
encroachments, encumbrances, leases, shares, easements, rights-of-way,
squatters' rights, covenants, purchase or sales options, conditions and
restrictions (collectively, "Encumbrances"), except for Permitted Encumbrances;
provided, that, notwithstanding any other provision of this Agreement or any
deed delivered in connection with this Agreement, the Company does not warrant
title to mineral rights, oil, gas or other hydrocarbon substance rights or water
rights except as set forth in SECTIONS 4.6.1(j) and 4.6.1(k).
4.6.1. TITLE TO REAL PROPERTY.
(a) Set forth on SCHEDULE 4.6.1(a) is (i) a complete list and
description of all real property that is owned by the Company and used
in the Operations or in which the Company has legal or equitable title
and which is an Acquired Asset (such real property, together with all
rights, title, privileges and appurtenances pertaining thereto,
including, without limitation, all of the Company's right, title and
interest, if any, in and to any unpaid award for any taking by
condemnation or any damage to the premises by reason of a change of
grade of any street or highway, shall be collectively referred to as
the "Owned Property") and (ii) a description of each lease of real
property under which the Company is a lessee, lessor, sublessee or
sublessor, licensee or sublicensee (the "Leased Property") and which is
used by the Company in the Operations. The Owned Property and the
Leased Property are sometimes collectively referred to as the "Real
Property."
(b) Except for Permitted Encumbrances, the Company has (i)
good and marketable title in fee simple to the Owned Property and to
all plants, buildings and improvements thereon and (ii) good and
marketable leasehold title to the Leased Property and to all plants,
buildings and improvements thereon and the Company's interests therein
are free and clear in each case of all Encumbrances.
(c) Except as disclosed on SCHEDULE 4.6.1(c), the buildings
and improvements owned or leased by the Company and used in the
Operations, the operation or maintenance thereof as operated and
maintained by the Company prior to the Closing Date do not (i)
contravene any zoning or building law or ordinance or other
administrative regulation (including but not limited to those relating
to zoning, land division, building, fire, health and safety) or (ii)
violate any restrictive covenant or any provision of federal, state,
local or foreign law, provided that, in the event the Company's use and
operation of any Real Property is a non-conforming use as of the
Closing Date, except as disclosed on SCHEDULE 4.6.1(c), (A) the right
to continue such non-conforming use will not be restricted or
terminated upon the consummation of the transactions contemplated by
this Agreement, and (B) such non-conforming use does not impose
conditions or limitations on the continued use and operation of such
property, or on the restoration, alteration or expansion thereof, and
does not impose costs, expenses
11
or improvements as a condition to or required in connection with such
use and operation. The foregoing representations and warranties
expressly supersede and survive the delivery of the special warranty
deed to any Real Property, notwithstanding the terms of any such
special warranty deed.
(d) Except as listed on SCHEDULE 4.6.1(d) attached hereto,
there is no pending or, to the best knowledge of the Company,
threatened condemnation or eminent domain proceeding with respect to,
or that could affect, any Real Property.
(e) There is not and has not been, during any period through
and including the Closing Date, any substance placed on the Real
Property by the Company, or to the knowledge of the Company, placed by
any other person (including any lessor or predecessor thereto with
respect to Leased Property) the presence of which on any Real Property
causes or caused a nuisance upon any Real Property or to adjacent
properties, except such substances as would not have a material adverse
effect on the business, business prospects, financial condition or
results of operations of the Operations.
(f) To the knowledge of the Company, there is not and has not
been during any period through and including the Closing Date, any
substance, the presence of which on properties adjacent to any Real
Property constitutes or constituted a trespass by the Company, except
such substances as would not have a material adverse effect on the
business, business prospects, financial condition or results of
operations of the Operations.
(g) Except as set forth on SCHEDULE 4.6.1(g) attached hereto,
to the knowledge of the Company, there are no special taxes or
assessments, or any planned public improvements that may result in a
special tax or assessment, with respect to any Real Property, and there
is no special proceeding pending or threatened in which any taxing
authority having jurisdiction over any of the Real Property is seeking
to increase the assessed value thereof. Except as set forth on SCHEDULE
4.6.1(g) attached hereto, the Company represents and warrants that it
has not received any written or oral notice or communication and, to
the Company's knowledge, there has been no public disclosure nor any
notice or disclosure in any official record (including any land
records), with respect to any such special tax or assessment, planned
public improvement, or special proceeding pending or threatened. The
foregoing representations and warranties expressly supersede and
survive the delivery of the special warranty deed to any Real Property,
notwithstanding the terms of any such special warranty deed.
(h) Except as set forth on SCHEDULE 4.6.1(h), there are no
strips or gores with respect to or affecting any parcel of Real
Property (or portion thereof) which cause any related parcels of land
to be non-contiguous. Except as set forth on SCHEDULE 4.6.1(h), each
parcel of Real Property has a right of access to and from such parcel.
The Real Property is not situated in a flood hazard area as defined by
the Federal Insurance Administration. Except as set forth on
12
SCHEDULE 4.6.1(h), to the best knowledge of the Company, no portion of
the Real Property is located on or adjacent to navigable waters and no
portion of the Real Property consists of filled-in land.
(i) All utilities required for the operation of each parcel of
Real Property either enter such Real Property through adjoining streets
or, if they pass through adjoining land, do so in accordance with valid
public easements or irrevocable private easements, and all of such
utilities are installed and operating.
(j) SCHEDULE 4.6.1(j) is a true and correct list of all water
rights owned by the Company (the "Owned Water Rights") which are used
by the Company in connection with the Acquired Assets or the
Operations. The Company is the record or beneficial owners of the Owned
Water Rights. The Owned Water Rights and the other water rights the
Company has pursuant to contract rights (together, the "Water Rights")
have been of sufficient quantity and quality to supply the business
needs of the Operations at each of the locations of the Operations as
conducted prior to the Closing Date. To the extent the Water Rights
include shares of stock or other ownership interests in water or
irrigation companies, such Water Rights are being and have been put to
use by the Company in accordance with all bylaws or other water or
irrigation company requirements and all assessments on such shares of
stock or ownership interests have been paid in full and are presently
paid current. The Water Rights have received all necessary governmental
and regulatory approvals for the uses to which they are presently
employed in the Operations. The Company has no reason to believe that
the Water Rights will not be sufficient, in both quantity and quality,
for the future business needs of the Operations. The Water Rights have
been put to beneficial use by the Company and have not been forfeited
or abandoned by the Company, in whole or in part, under applicable law.
(k) Except as listed on SCHEDULE 4.6.1(k), each parcel of
Owned Real Property which has been used by the Company for, or which
the Company has anticipated using for, mining and extraction of
minerals or other materials, includes all right, title and interest in
and to such minerals and materials being extracted or located upon or
under such parcel of Owned Real Property and the right to extract and
sell or use the same without the obligation to pay royalties or other
compensation to any person. Except as listed on SCHEDULE 4.6.1(k), each
parcel of Leased Property which has been used by the Company for, or
which the Company has anticipated using for, mining and extraction of
minerals or other materials, includes the right of the Company or their
successors in interest to remove from such parcel of Leased Property
such minerals and materials being extracted or located upon or under
such parcel of Leased Property and the right to extract and sell or use
the same without the obligation to pay royalties or other compensation
to any person, except as may be provided in the respective lease
assumed by the Buyer with respect to such parcel of Leased Property.
4.6.1.1. MAINTENANCE. Except as set forth on SCHEDULE 4.6.1.1, all
of the plants, buildings, material fixtures and other improvements situated on
the Real
13
Property and all other material items of property are in adequate and useable
condition and in a reasonable state of repair, and maintenance of such items has
not been deferred beyond a reasonable time period.
4.6.1.2. ASSESSMENTS. There is no special proceeding pending or,
to the knowledge of the Company, threatened, in which any taxing authority
having jurisdiction over any of the Real Property is seeking to increase the
assessed value thereof.
4.6.1.3. BINDING COMMITMENTS. No binding commitment has been made
by either of the Sellers to any governmental authority, utility company or any
other organization, group or individual relating to the Real Property or any
part thereof which imposes upon or could impose upon either of the Sellers an
obligation to make any contribution or dedication of money or land or to
construct, install or maintain any improvements of a public or private nature on
or off such Real Property.
4.6.1.4. TITLE DOCUMENTS. True and complete copies of (a) all
leases to which the Company is a party respecting any Real Property and all
other instruments granting such leasehold interests, rights, options or other
interests (the "Property Leases") (including all amendments, modifications,
extensions and supplements thereto), (b) all deeds, title insurance commitments
and policies, maps, plats, surveys, mortgages, agreements and other documents
granting the Company title to or otherwise affecting or evidencing the state of
title with respect to any Real Property, and (c) any supplements thereto
(collectively, the "Title Documents") have been delivered to the Buyer. With
respect to the Title Documents, except as disclosed on SCHEDULE 4.6.1.4, no
breach or event of default on the part of the Company, or with respect to the
Operations, no breach or event of default on the part of any other party thereto
and no event that, with the giving of notice or lapse of time or both, would
constitute such breach or event of default under any term, covenant or condition
of such Title Documents, have occurred and are continuing unremedied that could
materially adversely affect the business, business prospects, financial
condition or results of any of the Operations or any Real Property.
4.6.1.5. NO BREACH OR EVENT OF DEFAULT; PROPERTY LEASES. With
respect to the Property Leases, except as disclosed on SCHEDULE 4.6.1.5, no
breach or event of default on the part of the Company (or to the knowledge of
the Company, any other party) under the Property Leases and no event that, with
the giving of notice or lapse of time or both would constitute such a breach or
event of default, has occurred and is continuing. All the Property Leases are in
full force and effect and are valid and enforceable against the parties thereto
in accordance with their terms. All rental and other payments due under each of
the Property Leases have been duly paid in accordance with the terms of such
Property Leases. Except as set forth in SCHEDULE 4.6.1.5 hereto, the assignment
of all of the Company's right, title and interest in and to the Property Leases
pursuant to this Agreement does not require the consent of any party to and will
not constitute an event of default under or permit any party to terminate or
change the existing terms of any Property Lease.
4.6.1.6 VIOLATION OF LAW. Except as set forth on SCHEDULE 4.6.1.6,
none of the Real Property or any condition or activity thereon, any plants,
buildings, fixtures, or improvements located thereon, or the current use,
operation or maintenance thereof is in violation of any law, rule, regulation,
code or ordinance or is in
14
violation of the terms of any restrictive covenant or other encumbrance. To the
knowledge of the Company, there are no such violations which would prevent the
obtaining of, or provide grounds for any jurisdiction to deny the grant of, any
subdivision of any Real Property contemplated herein.
4.6.2. PERSONAL PROPERTY. The Company has good and marketable
title to each item of Personal Property free and clear of all Encumbrances
except Permitted Encumbrances. Except as set forth on SCHEDULE 4.6.2, all
material items of Personal Property are in adequate and useable condition and in
a reasonable state of repair, reasonable wear and tear excepted, and material
maintenance on such items has not been deferred beyond a reasonable time period.
4.7. INSURANCE. There are no outstanding requirements or
recommendations by any insurance company that issued any such policy or by any
Board of Fire Underwriters or other similar body exercising similar functions or
by any governmental authority exercising similar functions which requires or
recommends any repairs or other work of a material amount or nature to be done
on or with respect to any of the Acquired Assets insured in any of said
policies. Except as set forth on SCHEDULE 4.7, the Company has not received any
notice or other communication from any such insurance company within three years
preceding the date hereof canceling or materially amending any of said insurance
policies relating to the Operations or the Acquired Assets, and to the knowledge
of the Company, no such cancellation or amendment is threatened. There was no
material inaccuracy in any application for any such insurance coverage.
4.8.LABOR AND EMPLOYMENT MATTERS.
4.8.1. LABOR AND EMPLOYMENT DEFINITIONS. Capitalized terms used in
this SECTION 4.8 which are not otherwise defined in this Agreement shall have
the respective meanings as set forth below:
"Employee Benefit Plan" shall mean each ERISA Plan and each
other pension, profit sharing, retirement, bonus, deferred
compensation, stock option, stock purchase, severance pay or insurance
plan for officers or employees, which currently is, or within the
immediately preceding six years was, established, maintained,
contributed to or legally obligated to be contributed to (i) by any the
Company or (ii) solely with respect to potential liability of and
through any current or former ERISA Affiliate arising or continuing in
respect of such plan under Section 302 or Title IV of ERISA or Section
412 of the Code while such entity was an ERISA Affiliate, by such
current or former ERISA Affiliate.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"ERISA Affiliate" shall mean any corporation which is a member
of a controlled group of corporations with the Company within the
meaning of Section 414(b) of the Code, a trade or business (including a
sole proprietorship,
15
partnership, trust, estate or corporation) which is under common
control with the Company within the meaning of Section 414(c) of the
Code or a member of an affiliated service group with the Company within
the meaning of Section 414(m) or (o) of the Code.
"ERISA Plan" shall mean any Pension Plan and any Welfare Plan.
"Multiemployer Plan" shall mean a plan as defined in Section
3(37) of ERISA.
"Pension Plan" shall mean each employee pension benefit plan
within the meaning of Section 3(2) of ERISA which is established,
maintained or as to which there is an obligation to contribute by or on
behalf of the Company or any ERISA Affiliate, or under which the
employees of the Company or any ERISA Affiliate receive any benefits.
"Welfare Plan" shall mean each employee welfare benefit plan
within the meaning of Section 3(1) of ERISA which is established,
maintained or to which there is an obligation to contribute by or on
behalf of the Company or any ERISA Affiliate, or under which the
employees of the Company or any ERISA Affiliate receive any benefits.
4.8.2. EMPLOYEE BENEFIT PLANS.
(a) SCHEDULE 4.8.2 lists each Employee Benefit Plan and
clearly identifies each as a Pension Plan, Welfare Plan or other type
of Employee Benefit Plan in which employees of the Operation
participate.
(b) Except as disclosed on SCHEDULE 4.8.2(b), neither the
Company nor any ERISA Affiliate has an obligation to contribute to any
Multiemployer Plan in which employees of the Operation participate and
has had no such obligation during the six years preceding the Closing
Date.
(c) Except as disclosed on SCHEDULE 4.8.2(c), neither the
Company nor any ERISA Affiliate maintains or contributes to or has an
obligation to contribute to any Pension Plan (other than a
Multiemployer Plan) covered by Title IV of ERISA or described as a
defined benefit plan (in accordance with ERISA Section 3(35)), and has
not maintained or contributed to any such plan during the six years
preceding the Closing Date.
(d) The Company has delivered to the Buyer true and correct
copies of the following:
(i) each ERISA Plan listed on SCHEDULE 4.8.2 and all
amendments thereto; and
(ii) each trust agreement pertaining to any of the
ERISA Plans, including all amendments to such documents.
16
(e) No event has occurred in connection with any Employee
Benefit Plan which has resulted, or will or may result in any fine,
penalty, assessment or other liability for which the Company or a
transferee of assets from the Company may be responsible, whether by
reason of operation of law or contract.
(f) Neither the execution and delivery of this Agreement,
including, without limitation, all other agreements to be executed in
connection herewith, by the Company nor the consummation of the
transactions contemplated herein will result in the acceleration or
creation of any rights of any person entitled to any benefits under any
Employee Benefit Plan.
4.8.3. BENEFIT OBLIGATIONS. All accrued material obligations for
payments to any entity, plan or person with respect to any forms of compensation
or benefits for employees of the Company relating to the Operations or any ERISA
Affiliate have been paid or are otherwise not the liability of the Buyer unless
specifically noted otherwise in this Agreement.
4.8.4. PERFORMANCE. The Company has withheld and paid to the
appropriate governmental authorities or is withholding for payment not yet due
to such authorities all amounts required to be withheld from the employees of
the Company relating to the Operations, and the Company is not liable for any
arrears of such amounts or penalties thereon for failure to comply with any of
the foregoing.
4.8.5. COMPENSATION. All reasonably anticipated material
obligations of the Company for salaries, bonuses and other forms of compensation
(excluding vacation, holiday and sick pay) payable to the employees of the
Operations in respect of the services rendered by any of them have been paid or
will be paid in accordance with the Company's policies.
4.8.6. RESIGNATIONS. SCHEDULE 4.8.6 lists all employees of the
Operations, their positions, hourly or weekly wages and any bonuses paid to them
during the year ended December 31, 2001.
4.8.7. COLLECTIVE BARGAINING AGREEMENTS.
(a) Except as disclosed on SCHEDULE 4.8.7, the Company is not,
and since December 31, 1999 has not been, a party to a collective
bargaining agreement with any labor organization with respect to the
Operations. No organization or representation question is pending
regarding the employees of the Company with respect to the Operations,
and no such question has been raised since December 31, 1999.
(b) Except as disclosed on SCHEDULE 4.8.7(b), there is no
pending or, to the knowledge of the Company, threatened claim,
grievance, arbitration, negotiation, suit, action or charge of or by
any employee of the Company with respect to the Operations. Except as
disclosed on SCHEDULE 4.8.7(b), no complaint is pending against the
Company before the National Labor Relations Board or any state or local
agency with respect to the Operations. The Company has complied, in
respect of its employees relating to the Operations, in all material
respects with all applicable statutes, regulations,
17
orders and restrictions of the United States of America, all states and
other subdivisions thereof, and all agencies and instrumentalities of
the foregoing, including those relating to wages, hours, collective
bargaining and the payment and withholding of taxes and other sums as
required by appropriate governmental authorities.
(c) The Company has furnished the Buyer with copies of all
claims, complaints, reports or other documents relating to the
Operations in the Company's files concerning the Company relating to
the Operations or the employees of the Operations made by or against
the Company during the past three years pursuant to workers'
compensation laws, Title VII of the Civil Rights Act of 1964, the
Occupational Safety and Health Act of 1970, the National Labor
Relations Act of 1935 or any other federal or state laws relating to
employment of labor. To the extent that any of the of the documents the
Company has furnished pursuant to this SECTION 4.8.7(c) include
information protected by the attorney-client privilege or work product
doctrine, the Company does not waive such privilege or application of
such doctrine to such documents.
4.8.8 TERMINATION OF EMPLOYMENT. Effective on the Closing Date,
the Company shall terminate the employment and the employment agreements, if
any, of all employees of the Operations except for the employees listed on
SCHEDULE 4.8.8.
4.9. COMPENSATION OF AND INDEBTEDNESS TO AND FROM EMPLOYEES.
4.9.1. EMPLOYEE COMPENSATION. SCHEDULE 4.9.1 is a true and
complete list of the names of the ten most highly compensated full time
employees of the Operations for 2001 (each a "Key Employee"). Except as set
forth on SCHEDULE 4.8.8, no Key Employee of the Operations, to the best
knowledge of the Company, plans to be unavailable if offered employment by the
Buyer as an employee of the Buyer at compensation substantially similar to such
employee's present rate of compensation plus bonuses similar to amounts paid in
prior years. Since the Balance Sheet Date, except as disclosed on SCHEDULE
4.9.1, there has been no material change in the rate of total compensation for
services rendered, including, without limitation, bonuses and deferred
compensation, for any Key Employee, and the bonuses and deferred compensation
established for the year ending December 31, 2001 for such employees were
consistent with the past practices of the Company for similar employees in
similar situations.
4.9.2. INDEBTEDNESS. Except as set forth on SCHEDULE 4.9.2, the
Company is not indebted to any employee or agent of the Operations, nor any
spouse, child or other relative thereof, in any amount whatsoever other than for
compensation for services rendered since the start of the Company's current pay
period generally utilized for its employees and for business expenses, vacation
or sick pay, or any amount owed pursuant to an Employment Benefits Plan, nor is
any employee or agent of the Operations indebted to the Company except for
advances made in the ordinary course of business.
4.10. CONTRACTS. Except as set forth on SCHEDULE 4.10.1, the Company is
not a party to any written or oral contracts which are material to the
Operations or the Acquired Assets. The Company has furnished the Buyer with a
true and complete copy of all written
18
contracts, obligations or commitments set forth on SCHEDULE 4.10.1, and with
accurate descriptions of all oral contracts, obligations or commitments set
forth on SCHEDULE 4.10.1, in each case which are material to the Operations. The
Company is not in breach of or in default under any of the contracts,
obligations or commitments set forth on SCHEDULE 4.10.1 and, to the knowledge of
the Company, no event has occurred that, with the giving of notice or lapse of
time or both, would constitute such a breach or default which would have a
material adverse effect on the Operations or the Acquired Assets. Except as set
forth on SCHEDULE 4.10.1, the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not require the
consent of any party (other than the Company) to any contract.
4.11. ENVIRONMENTAL MATTERS.
4.11.1. HAZARDOUS MATERIALS. Except as set forth in SCHEDULE
4.11.1: (i) neither the Company, nor, to the knowledge of the Company, any prior
owner, tenant, occupant or user of the Real Property, nor any other person or
concern, has engaged in or permitted any operations or activities upon, or any
use or occupancy of, such property or any portion thereof for the purpose of or
the handling, manufacture, treatment, storage, use, generation, release,
discharge, refining, dumping or disposal of any Hazardous Materials (whether
legal or illegal, accidental or intentional, excluding de minimis quantities of
Hazardous Materials that are commonly used in connection with the Operations and
which were used and disposed of in accordance with Environmental Requirements)
on, under, in or about any such property or transported any Hazardous Materials
to, from or across any such property; and (ii) to the knowledge of the Company,
no Hazardous Materials have migrated or are threatening to migrate from any Real
Property upon or beneath other properties, and no Hazardous Materials have
migrated or are threatening to migrate from other properties upon, about or
beneath any Real Property or Former Real Property.
4.11.2. ENVIRONMENTAL REQUIREMENTS. Except as set forth in
SCHEDULE 4.11.2: (i) the Company, the Real Property and the existing and, to the
knowledge of the Company, prior uses and activities thereon, including but not
limited to the use, maintenance and operation of any such property, and all
activities and conduct of business related thereto, comply and have at all times
complied in all material respects with all Environmental Requirements, and no
activity on or condition of the Real Property or Former Real Property has
constituted or constitutes a nuisance or has constituted or constitutes a
tortious condition with respect to any third party; and (ii) neither the
Company, nor, to the knowledge of the Company, any prior owner or occupant of
the Real Property, pursuant to any existing or proposed law or regulation, is
required now or in the foreseeable future to take any remedial action related to
any such property or make any capital improvements in order to place such
property or the improvements located thereon in compliance with such law or
regulation.
4.11.3. NOTICE OF VIOLATIONS. Except as set forth in SCHEDULE
4.11.3, to Company's knowledge: (i) neither the Company nor any prior owner or
occupant of the Real Property has received notice or other communication
concerning or has any knowledge of (A) any violation or alleged violation of
Environmental Requirements relating to the Real Property, whether or not
corrected or (B) any alleged liability for Environmental Damages (as defined
below) relating to the Real Property, and there exists no basis for any lawsuit,
claim, proceeding, citation, directive, summons or investigation related to
either (A) or (B) being
19
instituted or filed; (ii) no writ, injunction, decree, order or judgment related
to the foregoing is outstanding; and (iii) neither the Company nor any prior
owner or occupant of any such property has been ordered or requested by any
regulatory authority to take any step to remedy any condition on any such
property whether or not constituting a violation of Environmental Requirements,
and no such person or entity has been named a "potentially responsible party"
with respect thereto.
4.11.4. POTENTIALLY RESPONSIBLE PARTY. Except as set forth in
SCHEDULE 4.11.4, neither the Environmental Protection Agency nor any other
federal, state or local authority, nor any other person, corporation,
partnership, joint venture, association, trust, estate or other entity or
organization has identified the Company, or, to the knowledge of the Company,
any prior owner or occupant of any of the Real Property or Former Real Property
as a "potentially responsible party" or as a party liable in any way for
remediation or clean-up activities relating to the Real Property or Former Real
Property, or notified the Company or any prior owner or occupant of any such
property that it may in the future identify the Company or any prior owner or
occupant as a "potentially responsible party" or as a party liable in any way
for remediation or clean-up activities relating to the Real Property or Former
Real Property.
4.11.5. ENVIRONMENTAL REPORTS. The Company has furnished the Buyer
with true and complete copies of all claims, complaints, reports assessments,
audits, investigations and other documents in the possession of the Sellers made
by, on behalf of or against the Sellers relating to the release of Hazardous
Material at the Real Property or any potential or actual Environmental Damages
incurred by Sellers relating to the Real Property.
4.11.6. DEFINITIONS. For the purposes of this Agreement:
(i) "Environmental Damages" means all claims, judgments,
damages, losses, penalties, fines, liabilities (including strict
liability), encumbrances, liens, costs and expenses of defense of a
claim (whether or not such claim is ultimately defeated), good faith
settlements of judgment and costs and expenses of reporting,
investigating, removing and/or remediating Hazardous Materials, of
whatever kind or nature, contingent or otherwise, matured or unmatured,
foreseeable or unforeseeable, including without limitation reasonable
attorney's fees and disbursements and consultants' fees, any of which
are incurred at any time arising out of, based on or resulting from (i)
the release of Hazardous Materials into the environment, on or prior to
the Closing, upon, beneath, or from any Real Property, Former Real
Property or other location (whether or not owned by the Company) where
the Company conducted operations or generated, stored, sent,
transported, or disposed of Hazardous Materials, and (ii) any violation
of Environmental Requirements by the Company on or prior to the
Closing.
(ii) "Environmental Requirements" means all applicable
statutes, regulations, rules, ordinances, codes, policies, advisories,
guidance, actions, licenses, permits, orders, approvals, plans,
authorizations, concessions, franchises and similar items of all
Governmental Authorities and all applicable judicial and administrative
and regulatory decrees, judgments and orders and all covenants running
with the land that relate to: (A) occupational health or safety; (B)
the protection of human health or the
20
environment; (C) the treatment, storage, disposal, handling, release or
remediation of Hazardous Materials; or (D) exposure of persons to
Hazardous Materials.
(iii) "Former Real Property" means any real property on which
the Company conducted the Operations and heretofore held but no longer
hold a fee, leasehold or other legal, beneficial or equitable interest.
(iv) "Governmental Authority" means any governmental agencies,
departments, commissions, boards, bureaus, instrumentalities, courts or
tribunals of the United States, the states and political subdivisions
thereof.
(v) "Hazardous Materials" means any substance: (A) the
presence of which requires reporting, investigation, removal or
remediation under any Environmental Requirement; (B) that is defined as
a "hazardous waste," "hazardous substance" or "pollutant" or
"contaminant" under any Environmental Requirement; (C) that is toxic,
explosive, corrosive, flammable, ignitable, infectious, radioactive,
reactive, carcinogenic, mutagenic or otherwise hazardous and is
regulated under any Environmental Requirement; (D) the presence of
which causes or threatens to cause a nuisance, trespass or other
tortious condition or poses a hazard to the health or safety of
persons; (E) that contains gasoline, diesel fuel or other petroleum
hydrocarbons, PCBs, asbestos or urea formaldehyde foam insulation.
4.12. AGREEMENT NOT IN BREACH OF OTHER INSTRUMENTS.
(a) Provided that the consents referenced in SCHEDULE 4.5.3
and SCHEDULE 4.6.1.5 are obtained, the execution and delivery by the
Company of this Agreement does not, and the consummation of the
transactions contemplated hereby will not, result in the creation of
any lien, security interest, charge or encumbrance upon the Acquired
Assets or the Operations under, conflict with or result in a breach of,
create an event of default (or event that, with the giving of notice or
lapse of time or both, would constitute an event of default) under, or
give any third party the right to accelerate any obligation under, any
agreement, mortgage, license, lease, indenture, instrument, order,
arbitration award, judgment or decree to which the Company is a party
or by which the Company, the Acquired Assets or the Operations is bound
or affected.
(b) Provided that the consents referenced in SCHEDULE 4.5.3
and SCHEDULE 4.6.1.5 are obtained, the execution and delivery by the
Company of this Agreement does not, and the consummation of the
transactions contemplated hereby will not, result in a violation of, or
require any authorization, approval, consent or other action by, or
registration, declaration or filing with or notice to, any court or
administrative or governmental body pursuant to, any statute, law,
rule, regulation or ordinance applicable to the Company. There is no
pending or threatened action, suit, proceeding or investigation before
or by any court or governmental body or agency, to restrain or prevent
the consummation of the transactions contemplated by this Agreement or
that might affect the right of the Buyer to own the Acquired Assets or
to operate the Operations.
21
4.13. REGULATORY APPROVALS. Except as set forth on SCHEDULE 4.5.3, the
Sellers have obtained all consents, approvals, authorizations and other
requirements prescribed by any law, rule or regulation which must be obtained or
satisfied by the Sellers and, prior to the Closing Date, shall have obtained all
such consents, approvals, authorizations and other requirements which are
necessary for the Sellers to consummate the transactions contemplated by this
Agreement. Set forth on SCHEDULE 4.13 is a true and complete list of all
consents, approvals, authorizations and other requirements referenced in this
SECTION 4.13.
4.14. INVENTORIES. The Inventories of the Company relating to the
Operations as of the Closing Date are good and merchantable, and the quantities
of all inventories are reasonable and consistent with past practice of the
Company.
4.15 OWNERSHIP OF CAPITAL STOCK. The Stockholder owns all of the issued
and outstanding capital stock of Western Aggregate Holdings, Inc. which owns all
of the issued and outstanding capital stock of the Company.
4.16. BROKERAGE. The Sellers, nor any employee or agent of any of the
Sellers, has dealt with any finder or broker in connection with any of the
transactions contemplated by this Agreement or the negotiations looking toward
the consummation of such transactions who may be entitled to a fee in connection
therewith. Any fees payable to any finder or broker engaged by the Sellers or
with whom the Sellers have dealt, shall be the sole responsibility of each of
the Sellers and in no circumstance shall the Buyers have any liability therefor.
4.17. CUSTOMERS. Set forth on SCHEDULE 4.17 is a list of the ten (10)
largest customers of the Operations for the fiscal year ended December 31, 2001.
None of the customers of the Operations has terminated or, to the knowledge of
the Company, indicated an intention or plan to terminate all or a material part
of the services performed for or orders historically placed by such customers,
and the Company has no reason to believe that any of such customers may
terminate all or a material part of such services or orders, whether by reason
of the acquisition of the Acquired Assets by the Buyer or for any other reason.
The Company has not received notice of, and there is no reasonable basis for,
any material complaint by any of such customers with respect to services
provided or products delivered by the Company since January 1, 2000. None of the
employees primarily responsible for servicing customers listed on SCHEDULE 4.17
has indicated an intention or plan to terminate his or her employment with the
Company or to otherwise be unavailable to the Buyer.
4.18. PRODUCT LIABILITY. Except as set forth in SCHEDULE 4.18, there
are no pending or, to the knowledge of the Company, threatened product
liability, warranty, material backcharge, material additional work, field repair
or other claims by any third party (whether based on contract or tort and
whether relating to personal injury, including death, property damage or
economic loss) arising from (A) services rendered by the Company during periods
through and including the Closing Date, (B) the sale, distribution, erection or
installation of products by the Company on or prior to the Closing Date, or the
manufacture of products by the Company whether delivered to a customer before or
after the Closing Date (except with respect to any liability or obligation
arising out of any action of the Buyer after the Closing Date) or (C) the
Operations or the ownership of the Acquired Assets during the period through and
including the Closing Date.
22
4.19. SUFFICIENCY OF ASSETS. Except for the Excluded Assets, the
Acquired Assets constitute (a) all of the assets and rights that are primarily
used in the Operations as they are being conducted as of the date hereof and (b)
all the property, real and personal, tangible and intangible, necessary for the
conduct by the Buyer of the Operations as they are being conducted as of the
date hereof. Neither the Stockholder nor any affiliate thereof (other than the
Company) owns or has rights to any assets, properties, or rights of or primarily
used by the Operations.
4.20. PRESERVATION OF DOCUMENTS. Consummation of the transactions
contemplated by this agreement does not impose upon the Buyer any obligation to
preserve any of the business records of the Company.
4.21. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. The Sellers have performed (and are
responsible for) an independent analysis of the filing requirements under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Anti-Trust Improvements Act of 1976, as amended, and concluded
that no filing thereunder is required.
5. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer represents and
warrants to the Company, as of the date hereof and as of the Closing Date, as
follows:
5.1. ORGANIZATION AND QUALIFICATION. Each Buyer is duly formed and
validly existing as a corporation in good standing under the laws of the State
of its incorporation.
5.2. AUTHORITY. Each Buyer has full power and authority to enter into
this Agreement and to consummate the transactions contemplated hereby. This
Agreement and all other agreements to be executed in connection herewith by the
Buyers have been duly executed and delivered by the Buyers, have been duly
authorized by all necessary corporate action by the Buyers (including, without
limitation, any required authorization by the board of directors and
shareholders of the Buyers) and constitute legal, valid and binding obligations
of the Buyers enforceable in accordance with their respective terms.
5.3. BROKERAGE. Neither Buyer, nor any of their employees or agents has
dealt with any finder or broker in connection with any of the transactions
contemplated by this Agreement or the negotiations looking toward the
consummation of such transactions who may be entitled to a fee in connection
therewith. Any fees payable to any finder or broker engaged by the Buyers or
with whom the Buyers have dealt, shall be the sole responsibility of the Buyers
and in no circumstance shall the Sellers have any liability therefor.
5.4. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. The Buyers have performed (and are responsible
for) an independent analysis of the filing requirements under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act and concluded that no filing thereunder is required.
6. EMPLOYEES.
6.1 OBLIGATION TO EMPLOY. Nothing in this Agreement shall be construed
as an obligation or commitment of the Buyer to offer to hire or hire any
employee, officer, former employee or director of the Company (except as set
forth in SECTION 6.2) or otherwise assume any liability relating in any way to
the employees, former employees, officers or directors of the Company including
but not limited to liabilities for salary payments or Employee Benefit Plans or
arising under the Worker Adjustment Retraining and Notification Act ("WARN
Act"), the
23
Consolidated Omnibus Budget Reconciliation Act ("COBRA") or any collective
bargaining agreement. The Sellers, however, do not assume any liability relating
in any way to the Company's employees, former employees, officers or directors
hired after the Closing, including liability under any employee benefit plans
sponsored by the Buyer or arising under the WARN Act, COBRA or any collective
bargaining agreement to which the Buyer is a party to the extent any such
liability arises from the Buyer's acts or omissions after the Closing Date. The
Sellers shall indemnify the Buyers with respect to WARN Act liabilities arising
as a result of the transactions contemplated by this Agreement as provided in
SECTION 10.
6.2 OFFERS TO EMPLOY. Immediately after the Closing Date, the
Buyer shall offer employment to a minimum of 73 of the Company's employees which
meet the Buyer's standard hiring guidelines, including drug testing requirements
(at least 70 of whom must derive from the Operations on parcels 3, 6, 9, 10 on
SCHEDULE A). Each such former employee of the Company hired by the Buyer shall
immediately be eligible for the benefit plans the Buyer makes available to other
similarly situated employees and the Buyer shall provide COBRA benefits if such
employee is later terminated by the Buyer. With respect to each former employee
of the Company hired by the Buyer, after the Closing Date, the Buyer shall
recognize such employee's employment service with the Company solely for
participation, vesting and benefit eligibility purposes (but not pension benefit
accrual purposes) under any employee benefit plans it may provide to such
employee. Upon the Buyer's request and the written consent of the applicable
employees and former employees of the Company, the Company shall, to the extent
permitted by applicable law, reasonably provide to the Buyer information from
the employment records of employees and former employees of the Company to
assist the Buyer in deciding whether to hire any such individuals.
7. COMPANY CLOSING DELIVERIES. The obligations of the Buyers hereunder
shall be subject to the satisfaction, as of the Closing Date, of the following
conditions (any of which may be waived, in whole or in part, by the Buyers):
7.1. CLOSING DOCUMENTS. The Company shall deliver to the Buyer:
(a) A duly executed assignment and assumption agreement
substantially in the form attached hereto as EXHIBIT B (the "Contract
Assignment") providing for the transfer to the Buyer of all of the
Company's right, title and interest in and to and obligations under the
Contracts, which assignment may be subject to consent by a third party.
(b) A duly executed assignment and assumption agreement
substantially in the form attached hereto as EXHIBIT C (the "Lease
Assignment") providing for the transfer to the Buyer of all of the
Company's right, title and interest in and to and obligations under the
Property Leases, which assignment may be subject to consent by a third
party.
(c) A duly executed ▇▇▇▇ of sale substantially in the form
attached hereto as EXHIBIT D (the "▇▇▇▇ of Sale") covering the Personal
Property included in the Acquired Assets.
24
(d) Duly executed special warranty deeds, in a form reasonably
acceptable to counsel for the Buyer, providing for the transfer to the
Buyer of all of the Company's right, title and interest in and to the
Owned Property included in the Acquired Assets, together with such
other usual and customary real property transfer documents as the Buyer
may request with respect to the transfer of such property.
(e) Duly executed termination statements and instruments of
release, in form and substance satisfactory to counsel for the Buyer,
releasing and discharging all Encumbrances on the Acquired Assets
(other than Permitted Encumbrances) or otherwise providing for the
release and discharge of such Encumbrances upon such terms and
conditions as are acceptable to Buyer.
(f) A duly executed assignment of title with respect to each
motor vehicle transferred to the Buyer hereunder.
(g) A copy of the Certificate of Incorporation of each of the
Sellers, certified by the State of Delaware.
(h) A certificate, dated as of the day prior to the Closing
Date, as to the good standing of each of the Sellers and payment of all
applicable state taxes thereby, certified by the State of Delaware and,
with reference to the Company, each other state in which it is
qualified as a foreign corporation.
(i) The originals, or copies certified to the satisfaction of
the Buyer, of all Property Leases and Title Documents with respect to
the Real Property.
(j) Duly executed originals of all consents, waivers,
approvals and authorizations required by law, statute, rule,
regulation, contract or agreement to be obtained by any of the Sellers
in connection with the consummation of the transactions contemplated
hereby, including those consents referenced being required in SCHEDULE
4.5.3 and SCHEDULE 4.6.1.5.
(k) A copy of the resolutions of the board of directors of
each of the Sellers authorizing the execution and delivery of this
Agreement and the performance of the transactions contemplated hereby,
certified by the secretary of each.
(l) A certificate as to the incumbency and signature of the
officers of each of the Sellers executed by an officer or director of
each Seller and by the secretary of each Seller.
(m) Evidence, satisfactory to the Buyer, of the transfer to
the Buyer of all Permits, other than those Permits referenced as being
non-transferable in SCHEDULE 4.5.3.
(n) Such duly executed landlord estoppels and consents as the
Buyer may reasonably request.
25
(o) A certificate of non-foreign status satisfying the
requirements of Treas. Reg. ss. 1.1445-2(b)(2) duly executed by the
Company.
(p) A legal opinion covering such customary matters as the
Buyers shall reasonably request.
(q) All other documents required to be produced by the Company
under this Agreement.
7.2. PERMITS, APPROVALS AND AUTHORIZATIONS. Any and all consents,
waivers, permits and approvals from any governmental or regulatory body, and of
any corporation or other person or entity required in connection with the
execution, delivery or performance of this Agreement or necessary for the Buyer
to conduct the Operations using the Acquired Assets in the manner in which they
were conducted by the Company prior to the Closing Date shall have been duly
obtained and shall be in full force and effect on the Closing Date.
7.3. NO CHALLENGE OR VIOLATION OF ORDERS. No investigation, action,
suit or proceeding by any governmental or regulatory commission, agency or
authority, and no action, suit or proceeding by any other person, firm,
corporation or entity, shall be pending or threatened on the Closing Date which
challenges this Agreement or the closing of the transactions contemplated
hereby, or which claims damages in a material amount as a result of the
transactions contemplated hereby. No preliminary or permanent injunction or
other order by any court or governmental or regulatory authority, and no
statute, rule, regulation, decree or executive order promulgated or enacted by
any government or governmental or regulatory authority, that declares this
Agreement invalid in any respect or prevents the consummation of the
transactions contemplated hereby, shall be in effect.
7.4. EVIDENCE OF TITLE. The Buyer shall have received a 1970 ALTA
Extended Coverage Form Policy of Title Insurance (together with all endorsements
and affirmative coverages required by the Buyer) issued by one or more title
insurance companies selected by the Buyer. The cost of such title policies shall
be borne solely by the Buyer.
8. BUYER CLOSING DELIVERIES. The obligations of the Sellers hereunder shall
be subject to the satisfaction, as of the Closing Date, of the following
conditions (any of which may be waived, in whole or in part, by the Sellers):
8.1. CLOSING DOCUMENTS. The Buyer shall deliver to the Company:
(a) A duly executed Contract Assignment providing for the
transfer to the Buyer of all of the Company's right, title and interest
in and to and obligations under the Contracts.
(b) A duly executed Lease Assignment providing for the
transfer to the Buyer of all of the Company's right, title and interest
in and to and obligations under the Property Leases.
(c) A copy of the Articles of Incorporation of each Buyer,
certified by such Buyer's State of incorporation.
26
(d) A certificate, dated as of the day prior to the Closing
Date, as to the good standing for each Buyer and payment of all
applicable state taxes thereby, certified.
(e) A copy of the resolutions of the board of directors of the
Buyer authorizing the execution and delivery of this Agreement and the
performance of the transactions contemplated hereby, certified by the
secretary of the Buyer.
(f) A certificate as to the incumbency and signature of the
officers of each Buyer executed by an officer or director of each Buyer
and by the secretary of each Buyer.
(g) A legal opinion covering such customary matters as the
Sellers shall reasonably request.
(h) All other documents required to be produced by the Buyer
under this Agreement.
8.2. PERMITS, APPROVALS AND AUTHORIZATIONS. Any and all consents,
waivers, permits and approvals from any governmental or regulatory body,
corporation or other person required in connection with the execution, delivery
and performance of this Agreement shall be in full force and effect on the
Closing Date.
8.3. NO CHALLENGE OR VIOLATION OF ORDERS. No investigation, action,
suit or proceeding by any governmental or regulatory commission, agency or
authority, and no action, suit or proceeding by any other person, firm,
corporation or entity, shall be pending or threatened on the Closing Date which
challenges this Agreement or the closing of the transactions contemplated
hereby, or which claims damages in a material amount as a result of the
transactions contemplated hereby. No preliminary or permanent injunction or
other order by any court or governmental or regulatory authority and no statute,
rule, regulation, decree or executive order promulgated or enacted by any
government or governmental or regulatory authority, that declares this Agreement
invalid in any respect or prevents the consummation of the transactions
contemplated hereby, shall be in effect.
9. ACTIONS AFTER THE CLOSING DATE.
9.1. COOPERATION. Subject to any limitations that are required to
preserve any applicable attorney-client privilege, for a period of three (3)
years from and after the Closing Date, each party agrees to furnish or cause to
be furnished to the other parties, its counsel and accountants, upon reasonable
request during normal business hours, after not less than three (3) business
days prior written notice, such information and assistance relating to such
party or its business (including, without limitation, the cooperation of
officers and employees and reasonable access to books, records and other data
and the right to make copies and extracts therefrom) as is reasonably necessary
to: (a) facilitate the preparation for or the prosecution, defense or
disposition of any suit, action, litigation or administrative, arbitration or
other proceeding or investigation (other than one by or on behalf of one party
to this Agreement against another party hereto); or (b) prepare and file any
other documents required by governmental or regulatory bodies. The party
requesting such information and assistance shall reimburse the other party for
27
all reasonable out-of-pocket costs and expenses incurred by such party in
providing such information and assistance.
9.2. FURTHER ASSURANCES.
(a) Each of the parties agrees to work diligently,
expeditiously and in good faith to consummate the transactions
contemplated by this Agreement. From time to time after the Closing
Date, (i) each of the parties shall execute and deliver to the other
relevant parties such instruments of sale, transfer, conveyance,
assignment, consent, assurance, power of attorney, and other such
instruments as may be reasonably requested by the Buyer in order to
vest in the Buyer all right, title, and interest in and to the Acquired
Assets and the Operations; (ii) the parties hereto will execute and
deliver such other instruments of sale, transfer, conveyance,
assignment, assurance, power of attorney and other such instruments as
may be reasonably required by the other parties hereto in order to
carry out the purpose and intent of this Agreement and all other
agreements to be executed in connection herewith, and (iii) the Sellers
shall provide such transition services as are reasonably requested by
the Buyer promptly after the Closing Date in order for the Buyer to
achieve full operational ability with respect to the Acquired Assets
and the Operations. The Buyers and the Sellers shall each provide the
other with such assistance as reasonably may be requested by the other
in connection with the preparation of any tax return, an audit or
examination of any such return by any taxing authority or any judicial
or administrative proceeding relating to liability for taxes and shall
each retain and provide the other with any records or other information
which may be relevant to such a return, audit, examination or
proceeding.
(b) Anything contained herein or the Lease Assignment or the
Contract Assignment to the contrary notwithstanding, neither this
Agreement nor any such assignment will constitute an assignment, an
attempted assignment or an agreement to assign any Lease, Contract or
Permit if an assignment or attempted assignment of the same without the
consent of any other party or parties thereto or, in the case of any
Permit, the governmental entity that issued or granted such Permit,
would constitute a breach thereof or not be permitted by applicable
law, or in any way impair the rights of the assignee party thereunder.
If any such consent is not obtained prior to the Closing or if an
attempted assignment would be ineffective or would impair the Buyer's
rights under any such Lease, Contract or Permit so that the Buyer would
not receive all such rights, then the Sellers will (x) use their
reasonable best efforts to provide or cause to be provided to the
Buyer, to the extent permitted by applicable law, the full benefits of
any such Lease, Contract or Permit, (y) pay promptly or cause to be
paid promptly to the Buyer when received all monies and other
properties received by the Sellers with respect to any thereof and (z)
enforce, at the request of the Buyer and at the sole expense and for
the account of the Buyer, to the extent permitted by applicable law,
any and all rights of the Sellers arising from such Lease, Contract or
Permit against the other party or parties thereto or the issuer or
grantor thereof (including the right to elect to terminate such Lease,
Contract or Permit in accordance with the terms thereof). In addition,
each party will take such other actions (at its expense) as may
reasonably be requested by the other party in order to place each
party, insofar as reasonably possible, in the same position as if such
Lease, Contract or Permit had been transferred as contemplated hereby
and so that all the benefits relating thereto, including possession,
use, risk of loss, potential for gain and dominion, control and
command, shall inure to the Buyer.
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9.3. NON-COMPETE AND NON-SOLICITATION.
(a) In consideration of, among other things, the Purchase
Price set forth in this Agreement, during the period from the date
hereof through the fourth anniversary of the Closing Date, the Company
and the Stockholder will not:
(i) directly or indirectly, engage or invest in, own,
manage, operate, finance, control or participate in the
ownership, management, operation, financing, or control of, be
associated with, or in any manner connected with, lend the
credit to, or render services or advice to, any business,
firm, corporation, partnership, association, joint venture or
other entity that engages or conducts any business engaged in
or conducted by the Operations as of the Closing Date anywhere
within 100 miles of the Operations; PROVIDED, HOWEVER, that
the Company and the Stockholder may own less than 1% of the
outstanding shares of any class of securities of any
enterprise (but without otherwise participating in the
activities of such enterprise) if such securities are listed
on any national or regional securities exchange or have been
registered under Section 12(g) of the Securities Exchange Act
of 1934, as amended;
(ii) directly or indirectly, either for itself or any
other person or entity, hire any of the officers or directors
or other persons employed by the Buyer, its Affiliates or
their respective successors or assigns, or solicit or induce
such persons to leave the employ of the Buyer or its
Affiliates;
(iii) directly or indirectly, approach or seek
business from any Customer (as defined below), refer business
from any Customer to any enterprise or business or be paid
commissions based on sales received from any Customer by any
enterprise or business. For purposes of this Section
9.3(a)(iii), the term "Customer" means any person, firm,
corporation, partnership, association or other entity located
within 100 miles of the Operations to which the Operations
provided goods or services during the 36-month period prior to
the time at which any determination shall be made that any
such person, firm, corporation, partnership, association or
other entity is a Customer; PROVIDED, HOWEVER, that the term
Customer shall not include any referral of business by the
Company or the Stockholder to the Buyer or its Affiliates. For
the purposes of this Agreement, the term "Affiliate" shall
mean any entity controlling, controlled by or under common
control with the named party.
(b) Each of the Sellers acknowledges that the restrictions
imposed by this SECTION 9.3 are fully understood by him, are fair and
reasonable, and will not preclude him from becoming gainfully employed
following the execution of this Agreement.
10. INDEMNIFICATION.
10.1.1. INDEMNIFICATION OF THE BUYER. Each of the Sellers
jointly and severally indemnify and hold harmless the Buyer and its Affiliates
in respect of any and all claims, losses, 29
diminutions in value, damages, liabilities, and expenses (including, without
limitation, settlement costs and any legal or other expenses for investigating
or defending any actions or threatened actions) incurred by the Buyer or its
Affiliates in connection with each and all of the following together with
interest thereon at a fluctuating rate that is at all times equal to the prime
rate in effect from time to time at Citibank, N.A. (or similar financial
institution) in New York on 90-day unsecured loans to substantial and
responsible customers:
(a) any misrepresentation made by either of the Sellers in
this Agreement (including any Schedules or Exhibits hereto) or any
document described in SECTION 7.1 or any breach by the Company of any
representation or warranty contained in this Agreement (including any
Schedules or Exhibits hereto) or any document described in SECTION 7.1;
(b) the breach of any covenant, agreement or obligation of
either of the Sellers contained in this Agreement or any document
described in SECTION 7.1 (provided that with respect to claims arising
out of SECTION 6.1, the Sellers agree to indemnify the Buyer against
all liabilities arising under the WARN Act except to the extent such
liabilities arise out of the Buyer's failure to fulfill its obligations
to hire employees of the Company pursuant to SECTION 6.2 or the Buyer's
subsequent termination or reduction of hours of former employees of the
Company whom the Buyer initially hired after the Closing;
(c) any liabilities or obligations (continuing or otherwise)
arising from the failure of the Buyer to obtain the protections
afforded by compliance with the notification and other requirements of
the bulk sales laws in force in the jurisdictions in which such laws
may be applicable to the Company, the Operations, the Acquired Assets
or the transactions contemplated by this Agreement;
(d) any claims against or debts, liabilities or obligations of
either of the Sellers relating to the Acquired Assets or the Operations
not specifically assumed by the Buyer pursuant to SECTION 2.1, whether
known or unknown, including, without limitation, the Excluded
Liabilities;
(e) any and all Environmental Damages, whether or not
disclosed on Schedules hereto or otherwise known by the Buyers or the
Sellers; and
(f) any and all taxes and assessments by any taxing authority
relating to periods prior to the Closing Date whether on not such taxes
or assessments are imposed or assessed prior to or after the Closing
Date.
Notwithstanding any other provision of this SECTION 10.1.1, the Buyer
agrees that any claims, losses, diminutions in value, damages, liabilities and
expenses for which the Buyer or its Affiliates seek indemnification pursuant to
this SECTION 10.1.1 shall be calculated after subtracting any insurance proceeds
net of premiums paid with respect to such insurance proceeds and any tax
benefits received by the Buyer or its Affiliates on account of or relating to
such claim, losses, diminution in value, damages, liabilities and expenses. In
connection with any claim for indemnification made by the Buyer or its
Affiliates, for which the Sellers are obligated
30
to indemnify the Buyer or its Affiliates pursuant to the terms of this
Agreement, the Sellers shall be liable for all punitive damages assessed against
the Buyer or its Affiliates in connection with any such claim; PROVIDED, THAT,
the Sellers shall not be liable for any claims for punitive damages originated
by the Buyer or its Affiliates.
10.1.2. INDEMNIFICATION OF THE COMPANY. Each of the Buyers jointly and
severally indemnify and hold harmless the Company and its Affiliates in respect
of any and all claims, losses, diminutions in value, damages, liabilities, and
expenses (including without limitation settlement costs, any legal or other
expenses for investigating or defending any actions or threatened actions)
incurred by the Company or its Affiliates in connection with each and all of the
following together with interest thereon at a fluctuating rate that is at all
times equal to the prime rate in effect from time to time at Citibank, N.A. (or
similar financial institution) in New York on 90-day unsecured loans to
substantial and responsible customers:
(a) any misrepresentation made by the Buyers in this Agreement
(including any Schedules or Exhibits hereto) or any document described
in SECTION 8.1 or any breach by the Buyer of any representation or
warranty contained in this Agreement (including any Schedules or
Exhibits hereto) or any document described in SECTION 8.1;
(b) any breach of any covenant, agreement or obligation of the
Buyers contained in this Agreement or any document described in SECTION
8.1; and
(c) any claims against or debts, liabilities or obligations
arising in and relating to the operation by Buyer of the Acquired
Assets or the Operations during periods after the Closing Date.
Notwithstanding any other provision of this SECTION 10.1.2, the Company
agrees that any claims, losses, diminutions in value, damages, liabilities and
expenses incurred by the Company or its Affiliates for which the they seek
indemnification pursuant to this SECTION 10.1.2 shall be calculated after
subtracting any insurance proceeds net of premiums paid in respect of such
insurance proceeds and any tax benefits received by the Company or its
Affiliates on account of or relating to such claim, losses, diminution in value,
damages, liabilities and expenses. In connection with any claim for
indemnification made by the Company or its Affiliates, for which the Buyers are
obligated to indemnify the Company or its Affiliates pursuant to the terms of
this Agreement, the Buyers shall be liable for all punitive damages assessed
against the Company or its Affiliates in connection with any such claim;
PROVIDED, THAT, the Buyers shall not be liable for any claims for punitive
damages originated by the Company or its Affiliates.
10.2. SURVIVAL. Any claim for indemnification shall survive the
Closing, but only for the periods of time set forth in this SECTION 10.2. Any
claim for indemnification shall survive the applicable termination date if a
party, prior to such termination date, shall have notified the other party in
writing, specifying in reasonable detail, the facts that constitute or may give
rise to such claim, the basis under this Agreement for such claim and an
estimate of the amount of such claim (which estimate shall not be binding). No
party will have liability (for indemnification or otherwise) with respect to any
claim for indemnification unless the notice specified in the immediately prior
sentence is delivered to such party on or prior to the applicable termination
date specified in this SECTION 10.2.
31
10.2.1. GENERAL CLAIMS. Any claim for indemnification hereunder other
than a claim referred to in SECTIONS 10.2.2 and 10.2.3 must be made on or prior
to the third anniversary of the Closing Date.
10.2.2. ENVIRONMENTAL CLAIMS. Any claim based upon the breach by the
Company of any of its representations, warranties or covenants relating to
environmental matters ("Environmental Claims") may be made at any time prior to
the fifth anniversary of the Closing Date.
10.2.3. CLAIMS BARRED ONLY BY THE APPLICABLE STATUTE OF LIMITATIONS.
Any claim based upon (a) any misrepresentation with respect to SECTIONS 4.1,
4.2, 4.6.1(a), 4.6.1(b), 4.6.2, 5.1, 5.2, ("Proper Authority Claims"); (b) any
fraudulent or intentional misrepresentation of any of the Sellers or the Buyers
contained in this Agreement or any other document executed by the Buyers or the
Sellers in connection herewith, including any assessment by a taxing authority
alleged to arise from a willful, false or fraudulent intent on the part of the
Company to evade taxes, or from the Company's failure to file a return ("Fraud
Claims"); (c) the failure of the Company to pay taxes for periods through and
including the Closing Date or from a misrepresentation of the Company with
respect to SECTION 4.4 ("Tax Claims"); and (d) any claim by the Buyer or its
Affiliates with respect to SECTION 6.1, may be made until barred by the
applicable statute of limitations.
10.2.4. LIMITATIONS.
(a) THRESHOLD. Neither the Company nor the Buyer shall be
permitted to enforce any claims for indemnification pursuant to
SECTIONS 10.1.1(a), 10.1.1(e), or 10.1.2(a) (but not to include Fraud
Claims or Proper Authority Claims, none of which shall be subject to
this limitation) (each a "Limited Indemnity Claim"), until the
aggregate of all Limited Indemnity Claims due to the Company
collectively or the Buyer collectively, as the case may be, exceeds
$200,000 (the "Threshold Amount"). Once the aggregate of Limited
Indemnity Claims in excess of the Threshold Amount have been asserted
by the Buyer collectively or by the Company collectively, all Limited
Indemnity Claims, including those below the Threshold Amount, may be
pursued unless otherwise limited by this Agreement.
(b) MAXIMUM AMOUNT Neither the Company nor the Buyer shall be
permitted to enforce any claims for indemnification with respect to
Limited Claims hereunder in excess of an aggregate ceiling of
$10,000,000. Notwithstanding the foregoing, the Company shall be
permitted to enforce any claims for indemnification without limit
arising under SECTION 10.1.2(c).
(c) OTHER REMEDIES. Nothing in this SECTION 10.2.4 is to be
construed to limit in any way the right of any party hereto to remedies
of specific performance and equitable and injunctive relief as set
forth in SECTION 11.13 of this Agreement.
10.3. DEFENSE BY THE INDEMNIFYING PARTY. In connection with any claim
giving rise to indemnity hereunder resulting from or arising out of any claim or
legal proceeding by a
32
person other than the indemnified party, the indemnifying party at its sole cost
and expense may, upon written notice to the indemnified party received by the
indemnified party within 10 calendar days after the indemnifying party's receipt
of notice of such claim, assume the defense of any such claim or legal
proceeding provided that the indemnifying party acknowledges its obligation to
indemnify the indemnified party in respect of the entire amount of the claims
asserted therein. If the indemnifying party assumes the defense of any such
claim or legal proceeding, the indemnifying party shall select counsel
reasonably acceptable to the indemnified party to conduct the defense of such
claims or legal proceedings and at its sole cost and expense shall take all
steps necessary in the defense or settlement thereof. The indemnifying party
shall not consent to a settlement of, or the entry of any judgment arising from,
any such claim or legal proceeding, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld) unless the
indemnifying party admits in writing its liability and agrees to hold the
indemnified party harmless from and against any losses, damages, expenses and
liabilities arising out of such settlement and concurrently with such settlement
the indemnifying party pays into court the full amount of all losses, damages,
expenses and liabilities to be paid by the indemnifying party in connection with
such settlement. The indemnified party shall be entitled to participate in (but
not control) the defense of any such action, with its own counsel and at its own
expense and shall be entitled to any and all information and documentation
relating thereto. If the indemnifying party does not assume (or continue to
diligently and competently prosecute) the defense of any such claim or
litigation resulting therefrom in accordance with the terms hereof, the
indemnified party may defend against such claim or litigation in such manner as
it may deem appropriate (and the indemnifying party may participate at its own
expense), including, but not limited to, settling such claim or litigation,
after giving notice of the same to the indemnifying party but such settlement
shall not be made without the prior written consent of the indemnifying party
(which consent will not be unreasonably withheld) unless the indemnified party
agrees that the indemnifying party is not liable for such claim under this
Agreement.
10.4. NOTICE. The parties hereto agree that in the event of any
occurrence which may give rise to a claim by an indemnified party hereunder the
indemnified party will give prompt notice thereof to the indemnifying party;
PROVIDED, HOWEVER, that failure to timely give the notice provided in this
Section shall not be a defense to the liability of the indemnifying party for
such claim, but the indemnifying party may recover any actual damages arising
from the indemnified party's failure to give such timely notice.
10.5. WAIVER. The indemnified party agrees that it will not waive any
statute of limitations or defense that would increase the liability of the
indemnifying party hereunder without (except in connection with pending
litigation in which the indemnifying party has not assumed the defense) the
consent of the indemnifying party.
10.6 ACCOUNTS RECEIVABLE. Buyer shall reduce the Deferred Payment by
the amount by which Actual Accounts Receivable exceeds the sum of the amounts
collected by the Buyer in satisfaction of the Actual Accounts Receivable by the
later of the due date of such receivables or 120 calendar days after the Closing
Date. The Buyer will make commercially reasonable efforts to collect the Actual
Accounts Receivable during such 120 days. If the Deferred Payment has been
depleted pursuant to this SECTION 10.6 or SECTIONS 1.4(s) or 10.7, the Sellers
shall promptly pay such amount to the Buyer. In exchange for such reduction of
the
33
Deferred Payment or payment, the Buyer shall assign to the Company any such
uncollected Actual Accounts Receivable and all related documents. Amounts paid
"on account" and not designated by the payor to be paid in satisfaction of
specific invoices or clearly identifiable to specific invoices shall be presumed
to have been paid in satisfaction of the payor's oldest obligation to the
Company and shall be so applied on the books of the Buyer.
10.7 PAYMENT. Until the Deferred Payment is delivered to the Company
pursuant to SECTION 1.3(b), indemnification claims by the Buyer or its
Affiliates shall be satisfied by the reduction of the Deferred Payment by the
amount of such claim, PROVIDED, HOWEVER, the Buyer shall comply with the
procedures set forth in SECTIONS 10.3 and 10.4 and the right of the Buyer and
its Affiliates to assert and recover with respect to indemnity claims hereunder
shall not be limited by the depletion or delivery to the Company of the Deferred
Payment. If the Deferred Payment has been delivered to the Company pursuant to
SECTION 1.3(b) or depleted pursuant to this SECTION 10.7 or SECTIONS 1.4(d) or
10.6, the Sellers shall promptly pay the amount of such indemnity claims to the
Buyer or its Affiliates. Notwithstanding anything to the contrary contained in
SECTION 1.3(b), the amount of any indemnification claims by the Buyer or its
Affiliates of which the Company has received the notice specified in SECTION
10.4 as of or prior to the date on which the Deferred Payment is to be delivered
to the Company pursuant to SECTION 1.3(b) shall be retained by the Buyer until
such claims are satisfied out of such amount or otherwise resolved.
11. MISCELLANEOUS PROVISIONS.
11.1. JURISDICTION; AGENT FOR SERVICE. Legal proceedings commenced by
any of the parties arising out of any of the transactions or obligations
contemplated by this Agreement shall be brought in the federal courts, or in the
absence of federal jurisdiction in state courts. The parties each agree that
they will not challenge the jurisdiction of such courts located in the State of
Utah. The parties irrevocably waive any objection that they now have or
hereafter may have to the laying of venue of any suit, action or proceeding
brought in any such court and further irrevocably waive any claim that any such
suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. Final judgment against any of the parties in any such suit
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment, a certified or true copy of which shall be conclusive evidence of the
fact and the amount of any indebtedness or liability of any of the parties
therein described, or by appropriate proceedings under any applicable treaty or
otherwise.
11.2. CONSTRUCTION. This Agreement shall be construed and enforced in
accordance with and governed by the internal laws of the State of Utah.
11.3. NOTICES. All notices, requests, demands and other communications
called for or contemplated hereunder shall be in writing and shall be deemed to
have been duly given when delivered to the party to whom addressed or when sent
by telegram, telex or wire (if promptly confirmed by registered or certified
mail, return receipt requested, prepaid and addressed) to the parties, their
successors in interest, or their assignees at the following addresses, or at
such other addresses as the parties may designate by written notice in the
manner aforesaid:
34
If to the Buyers: Oldcastle MMG, Inc.
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to: Oldcastle Materials, Inc.
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Sellers: U.S. Aggregates, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, CEO
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Baker, Donelson, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
11.4. PAYMENT OF EXPENSES. Except as set forth in Section 2.2(b), the
Company shall pay any and all taxes arising out of the acquisition of the
Operations, transfer of the Acquired Assets and the assumption of the Assumed
Liabilities. Except as expressly provided to the contrary, the Buyers shall bear
their own costs and expenses and the Sellers shall bear their own costs and
expenses (including, without limitation, legal fees and expenses) incurred in
negotiating, closing and carrying out the transactions contemplated by this
Agreement. Real estate, business property and personal property taxes, rentals,
payments, receipts and other fees
35
and costs relating to the use of the Acquired Assets shall be prorated between
the Company and the Buyer as of the Closing Date.
11.5. ASSIGNMENT. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof nor any of the
documents executed in connection herewith may be assigned by any party without
the consent of the other parties hereto except that the Buyer shall have the
right to assign all of its rights and obligations under this Agreement to any
affiliate if such transferee corporation agrees to assume all of the Buyer's
obligations under this Agreement, provided that such transfer shall not
discharge the Buyer from its obligation hereunder unless the Sellers consent to
such discharge, which consent shall not be unreasonably withheld. Nothing
contained herein, expressed or implied, is intended to confer upon any person or
entity other than the parties hereto and their successors in interest and
permitted assignees any rights or remedies under or by reason of this Agreement
unless so stated herein to the contrary.
11.6. AMENDMENTS AND WAIVER. This Agreement and all Exhibits and
Schedules hereto set forth the entire understanding of the parties and may be
modified only by a written instrument duly executed by each party. Except as
herein expressly provided to the contrary, no breach of any covenant, agreement,
warranty or representation shall be deemed waived unless expressly waived in
writing by the party who might assert such breach.
11.7. SURVIVAL. The covenants, agreements, warranties and
representations entered into or made pursuant to this Agreement shall be
continuing and shall survive the Closing Date for a period through and including
the applicable last day upon which the Buyer may seek indemnification for a
breach of such covenant, agreement, warranty or representation under SECTION 10.
11.8. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
11.9. HEADINGS. Headings in this Agreement are for reference purposes
only and shall not be deemed to have any substantive effect.
11.10. ATTORNEYS' FEES. In the event that any action or proceeding,
including arbitration, is commenced by any party hereto for the purpose of
enforcing any provision of this Agreement, the parties to such action,
proceeding or arbitration may receive as part of any award, judgment, decision
or other resolution of such action, proceeding or arbitration their costs and
reasonable attorneys' fees as determined by the person or body making such
award, judgment, decision or resolution. Should any claim hereunder be settled
short of the commencement of any such action or proceeding, including
arbitration, the parties in such settlement shall be entitled to include as part
of the damages alleged to have been incurred reasonable costs of attorneys or
other professionals in investigating or counseling on such claim.
11.11. BINDING NATURE OF AGREEMENT. All of the terms and provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective executors, heirs, legal representations, successors
and permitted assigns.
36
11.12. SEVERABILITY. Any provision of this Agreement which is invalid,
illegal or unenforceable in any jurisdiction will, as to that jurisdiction, be
ineffective to the extent of such invalidity, illegality, or unenforceability,
without affecting in any way the remaining provisions hereof in such
jurisdiction or rendering that or any other provision of this Agreement invalid,
illegal or unenforceable in any other jurisdiction.
11.13. SPECIFIC PERFORMANCE. Each of the parties acknowledges that the
Acquired Assets and the Operations covered hereby are unique and that the
parties will have no adequate remedy at law and may suffer irreparable damage if
any party breaches any covenant contained herein or fail to perform any of their
obligations under this Agreement. Accordingly, each of the parties agrees that
the other party shall have the right, in addition to any other rights which it
may have, to such specific performance and equitable injunctive relief if any
other party shall fail or threaten to fail to perform any of their obligations
under this Agreement.
11.14. COMPLETE AGREEMENT. This Agreement, the Exhibits and Schedules
hereto and the documents delivered or to be delivered pursuant to this Agreement
contain or will contain the entire agreement between the parties hereto with
respect to the transactions contemplated herein and shall supersede all previous
oral and written and all contemporaneous oral negotiations, commitments, and
understandings.
11.15. DRAFTING PRESUMPTION. Each party agrees that it participated in
the drafting of this Agreement and, in the event that any dispute arises in the
interpretation or construction of this Agreement, no presumption shall arise
that either one party or the other drafted this Agreement.
(Signature page follows)
37
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first written above.
OLDCASTLE MMG, INC.
a Utah corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Executive Vice President
OLDCASTLE MATERIALS, INC.
a Delaware corporation
By: /s/ ▇▇▇ ▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇
Title: Chief Executive Officer
MONROC, INC.
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
U.S. AGGREGATES, INC.
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
38
SCHEDULE A
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PARCEL COUNTY TYPE OF FACILITY
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1. Burley Plant (Magic Valley) Minidoka Ready Mix Concrete Batch Plant
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
2. Bellevue Plant ▇▇▇▇▇▇ Ready Mix Concrete Batch Plant
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
3. Boise Plant, Eagle, Idaho Ada Ready Mix Concrete Batch Plant
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ and Sand and Gravel Pit
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
4. Cottonwood Pit Lincoln Sand and Gravel Pit
Shoshone Pit
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇
5. Ketchum, Idaho ▇▇▇▇▇▇ Ready Mix Concrete Batch Plant
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
6. Middleton, Idaho Canyon Sand and Gravel Pit
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
7. Twin Falls, Idaho Twin Falls Ready Mix Concrete Batch Plant
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
8. Wendell, Idaho ▇▇▇▇▇▇▇ Ready Mix Concrete Batch Plant
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
9. Amity Land - Boise, Idaho Ada Ready Mix Concrete Batch Plant
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ and Wash Plant
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
10. Amity Pit - Boise, Idaho Ada Sand and Gravel Pit
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
11. Nampa Plant - Nampa, Idaho Canyon Ready Mix Concrete Batch Plant
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
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