EXHIBIT 2.15
ACQUISITION AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
U.S. CONCRETE, INC.,
CONCRETE XVIII ACQUISITION, INC.,
▇▇▇▇▇▇▇▇▇ LEASING, INC.,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
AND
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, TRUSTEE URTA OF
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, DATED OCTOBER 4, 1995
Dated as of February 8, 2000
TABLE OF CONTENTS
ARTICLE I DEFINITIONS.................................................... 1
1.01 Definitions.................................................... 1
1.02 Interpretation................................................. 5
ARTICLE II THE MERGER AND THE SURVIVING CORPORATION....................... 6
2.01 The Merger..................................................... 6
2.02 Effective Time of the Merger................................... 6
2.03 Certificate of Incorporation, Bylaws and Board of Directors
of Surviving Corporation..................................... 6
ARTICLE III CONVERSION OF SHARES........................................... 6
3.01 Conversion of Shares........................................... 6
3.02 Newco Shares................................................... 7
3.03 Delivery of Merger Consideration............................... 7
ARTICLE IV CLOSING........................................................ 7
4.01 Closing........................................................ 7
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS............. 7
5.01 Due Organization and Qualification............................. 7
5.02 Authorization; Non-Contravention; Approvals.................... 8
5.03 Capitalization and Ownership................................... 9
5.04 Subsidiaries................................................... 9
5.05 Financial Statements........................................... 9
5.06 Liabilities and Obligations.................................... 10
5.07 Accounts and Notes Receivable.................................. 10
5.08 Properties and Assets.......................................... 10
5.09 Material Customers and Contracts............................... 12
5.10 Permits........................................................ 14
5.11 Environmental Matters.......................................... 14
5.12 Labor and Employee Relations; Employment Matters............... 15
5.13 Insurance...................................................... 15
5.14 Compensation; Employment Agreements............................ 15
5.15 Noncompetition, Confidentiality and Nonsolicitation
Agreements; Employee Policies................................ 16
5.16 Employee Benefit Plans......................................... 16
5.17 Litigation and Compliance with Law............................. 18
5.18 Taxes.......................................................... 18
5.19 Absence of Changes............................................. 19
5.20 Accounts with Banks and Brokerages; Powers of Attorney......... 20
5.21 Absence of Certain Business Practices.......................... 20
5.22 Competing Lines of Business; Related-Party Transactions........ 20
5.23 Intangible Property............................................ 21
5.24 Capital Expenditures........................................... 21
5.25 Inventories.................................................... 21
5.26 Tax Reorganization Representation.............................. 21
5.27 Absence of Interest-Bearing Debt............................... 21
5.28 No Implied Representations..................................... 21
5.29 Disclosure..................................................... 21
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ARTICLE VI REPRESENTATIONS AND WARRANTIES OF U.S. CONCRETE AND NEWCO...... 22
6.01 Organization................................................... 22
6.02 Authorization; Non-Contravention; Approvals.................... 22
6.03 U.S. Concrete Common Stock..................................... 23
6.04 Tax Reorganization Representations............................. 23
6.05 SEC Filings; Disclosure........................................ 24
6.06 No Implied Representations..................................... 24
6.07 Disclosure..................................................... 24
ARTICLE VII CERTAIN COVENANTS.............................................. 24
7.01 Release From Guarantees........................................ 24
7.02 Future Cooperation; Tax Matters................................ 24
7.03 Expenses....................................................... 25
7.04 Legal Opinion.................................................. 25
7.05 Employment Agreements.......................................... 25
7.06 Repayment of Related Party Indebtedness........................ 25
7.07 Stock Options.................................................. 25
7.08 Pre-Closing Distributions...................................... 26
7.09 Working Capital Adjustment..................................... 26
7.10 Other Documents................................................ 27
7.11 Benefit Plans.................................................. 28
ARTICLE VIII INDEMNIFICATION................................................ 28
8.01 General Indemnification by the Stockholders.................... 28
8.02 Indemnification by U.S. Concrete............................... 29
8.03 Third Person Claims............................................ 29
8.04 Non-Third Person Claims........................................ 30
8.05 Indemnification Deductible..................................... 30
8.06 Liability Limitation........................................... 30
8.07 Form of Indemnity Payment...................................... 30
ARTICLE IX NONCOMPETITION COVENANTS....................................... 31
9.01 Prohibited Activities.......................................... 31
9.02 Equitable Relief............................................... 31
9.03 Reasonable Restraint........................................... 32
9.04 Severability; Reformation...................................... 32
9.05 Material and Independent Covenant.............................. 32
ARTICLE X NONDISCLOSURE OF CONFIDENTIAL INFORMATION...................... 32
10.01 General........................................................ 32
10.02 Equitable Relief............................................... 33
ARTICLE XI INTENDED TAX TREATMENT......................................... 33
11.01 Tax-Free Reorganization........................................ 33
ARTICLE XII FEDERAL SECURITIES ACT AND CONTRACTUAL RESTRICTIONS ON
U.S. CONCRETE COMMON STOCK................................... 33
12.01 Compliance with Law............................................ 33
12.02 Economic Risk; Sophistication; Accredited Investors............ 34
12.03 Rule 144 Reporting............................................. 34
12.04 Restriction on Sale or Other Transfer of Restricted Shares..... 34
12.05 Prospectus Delivery............................................ 35
12.06 Removal of Legends............................................. 35
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ARTICLE XIII MISCELLANEOUS.................................................. 35
13.01 Successors and Assigns; Rights of Parties...................... 35
13.02 Entire Agreement............................................... 35
13.03 Counterparts................................................... 35
13.04 Brokers and Agents............................................. 36
13.05 Notices........................................................ 36
13.06 Survival of Representations and Warranties..................... 37
13.07 Exercise of Rights and Remedies; Remedies Cumulative........... 37
13.08 Reformation and Severability................................... 37
13.09 Section Headings; Gender....................................... 37
13.10 Governing Law.................................................. 37
13.11 Dispute Resolution............................................. 37
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ACQUISITION AGREEMENT AND PLAN OF REORGANIZATION
THIS ACQUISITION AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is
made as of February 8, 2000, by and among U.S. Concrete, Inc., a Delaware
corporation ("U.S. Concrete"), Concrete XVIII Acquisition, Inc., a Delaware
corporation that is a subsidiary of U.S. Concrete ("Newco"), ▇▇▇▇▇▇▇▇▇ Leasing,
Inc., a Michigan corporation (the "Company"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
("Deneweth") and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, individually and as Trustee URTA of ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇, Dated October 4, 1995 ("▇▇▇▇▇▇▇▇▇") (Deneweth and ▇▇▇▇▇▇▇▇▇ are
each referred to hereinafter as a "Stockholder" and collectively, the
"Stockholders"), with the Stockholders being all of the Company's Stockholders.
WHEREAS, the respective Boards of Directors of Newco and the Company
(collectively referred to as "Constituent Corporations") deem it advisable and
in the best interests of the Constituent Corporations and the stockholders of
the Constituent Corporations that Newco merge with and into the Company (the
"Merger");
WHEREAS, the Boards of Directors of the Constituent Corporations have
approved and adopted this Agreement as a plan of reorganization within the
provisions of Section 368 of the Internal Revenue Code of 1986, as amended (the
"Code");
WHEREAS, all of the stockholders of the Constituent Corporations have
approved the Merger in accordance with the GCL and the MBCA; and
WHEREAS, U.S. Concrete is also, pursuant to separate written agreements,
acquiring the equity interests of ▇▇▇▇▇▇▇▇▇ Fuel & Supply, Inc. (the "Fuel
Merger Agreement") and Dencor, Inc. (the "Dencor Stock Purchase Agreement");
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties, provisions and covenants contained
herein, the parties hereto, intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS
1.01 DEFINITIONS. Capitalized terms used in this Agreement shall have the
following meanings:
"Affiliate" of, or "Affiliated" with, a specified person or entity means a
person or entity that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the specified person or entity.
"Agreement" has the meaning set forth in the first paragraph of this
Agreement.
"Balance Sheet Date" has the meaning set forth in Section 5.05.
"Broker" has the meaning set forth in Section 13.04.
"Closing" has the meaning set forth in ARTICLE IV.
"Closing Date" has the meaning set forth in ARTICLE IV.
"Code" has the meaning set forth in the third paragraph of this Agreement.
"Company" has the meaning set forth in the first paragraph of this Agreement.
"Company Common Stock" means the Company's common stock, $10.00 par value per
share.
"Competitive Business" means any business that competes with any business of
U.S. Concrete existing on the date hereof, including, without limitation, any
business that involves the production and sale of ready-mixed concrete
(including truck-mixed concrete) and other cement mixtures; pre-cast concrete
products and slag products.
"Constituent Corporations" has the meaning set forth in the second paragraph
of this Agreement.
"Effective Time" has the meaning set forth in Section 2.02.
"Employee benefit plan" has the meaning set forth in Section 5.16.
"Employee pension benefit plan" has the meaning set forth in Section 5.16.
"Employment Agreements" has the meaning set forth in Section 7.05.
"Encumbrances" means all liens, encumbrances, mortgages, pledges, security
interests, conditional sales agreements, charges, options, preemptive rights,
rights of first refusal, reservations, restrictions or other encumbrances or
defects in title.
"Environmental Laws" means any and all Laws or agreements between Company and
any Governmental Authority relating to (a) the protection, preservation or
restoration of the environment (including, without limitation, ambient air,
surface water (including water management and runoff), groundwater, drinking
water supply, surface land, subsurface strata, plant and animal life or any
other natural resource) or human health or safety, (b) emissions, discharges,
releases or threatened releases of pollutants, contaminants, chemicals or
industrial, toxic or hazardous substances or wastes (including, without
limitation, Hazardous Substances) or noxious noise or odor into the environment
or (c) the exposure to, or the use, storage, recycling, treatment, manufacture,
generation, transport, processing, handling, labeling, production, removal or
disposal of any pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances or wastes (including, without limitation, Hazardous
Substances), in each case as amended from time to time and as now or hereafter
in effect. The term "Environmental Laws" includes, without limitation, the
Federal Comprehensive Environmental Response, Compensation and Liability Act of
1980 (CERCLA), the Superfund Amendments and Reauthorization Act, the Federal
Water Pollution Control Act of 1972, the Federal Clean Air Act, the Federal
Clean Water Act, the Federal Resource Conservation and Recovery Act of 1976
(including the Hazardous and Solid Waste Amendments thereto), the Federal Solid
Waste
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Disposal and the Federal Toxic Substances Control Act, the Federal Insecticide
Fungicide and Rodenticide Act, the Federal Occupational Safety and Health Act of
1970, the Safe Drinking Water Act, the Atomic Energy Act and the Hazardous
Materials Transportation Act, and any comparable or similar Michigan Law, in
each case as amended from time to time, and any other Laws now or hereafter
relating to any of the foregoing.
"ERISA" has the meaning set forth in Section 5.16.
"ERISA Affiliate" has the meaning set forth in Section 5.16.
"Expiration Date" has the meaning set forth in Section 13.06.
"Financial Statements" has the meaning set forth in Section 5.05.
"GAAP" means generally accepted accounting principles as currently applied by
the respective party on a basis consistent with preceding years and throughout
the periods involved.
"GCL" means the General Corporation Law of the State of Delaware, as amended.
"Governmental Authority" means any federal, state, local or foreign
government, political subdivision or governmental or regulatory authority,
agency, board, bureau, commission, instrumentality or court or quasi-
governmental authority.
"Hazardous Substances" means any and all substances presently listed,
defined, designated or classified as hazardous, toxic, radioactive or dangerous,
or otherwise regulated, under any Environmental Law. The term "Hazardous
Substances" includes, without limitation, any substance to which exposure is
regulated by any Environmental Law including, without limitation, any toxic
waste, pollutant, contaminant, hazardous substance, toxic substance, hazardous
waste, special waste, industrial substance or petroleum or any derivative or by-
product thereof, radon, radioactive material, asbestos or asbestos containing
material, urea formaldehyde foam insulation, lead or polychlorinated biphenyls.
"Incentive Plan" has the meaning set forth in Section 7.07.
"Indemnified Party" has the meaning set forth in Section 8.03.
"Indemnifying Party" has the meaning set forth in Section 8.03.
"Interest-Bearing Debt" means the total amount of outstanding indebtedness of
the Company for borrowed money (including, without limitation, bank debt,
equipment debt, capital lease obligations with non-affiliates of Company, bank
overdrafts and any other indebtedness for borrowed money).
"Interim Balance Sheet" has the meaning set forth in Section 5.05.
"Interim Financial Statements" has the meaning set forth in Section 5.05.
"IRCA" has the meaning set forth in Section 5.12.
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"JAMS" has the meaning set forth in Section 13.10.
"Judge List" has the meaning set forth in Section 13.10.
"Laws" means any and all federal, state, local or foreign statutes, laws,
ordinances, codes, rules, regulations, orders, decrees, judgments and
injunctions of any Governmental Authority, including, without limitation, those
covering Tax, energy, safety, health, transportation, bribery, record keeping,
zoning, discrimination, antitrust and wage and hour matters, in each case as
amended and in effect from time to time.
"Letter of Intent" means that certain letter of intent dated December 15,
1999 by and among U.S. Concrete, the Company and the Stockholders, and the other
parties named therein, as amended or supplemented.
"Listed Agreements" has the meaning set forth in Section 5.09.
"Lockup Period" has the meaning set forth in Section 12.04.
"Losses" means any and all liabilities, losses, claims, damages, actions,
suits, proceedings, demands, assessments, adjustments, fees, costs and expenses
(including specifically, but without limitation, reasonable attorneys' fees and
costs and expenses of investigation), net of (i) income Tax effects with respect
thereto (including, without limitation, income Tax benefits recognized in
connection therewith and income Taxes upon any indemnification recovery
thereof), and (ii) insurance proceeds related to such Losses actually received
by the Indemnified Party; provided, however, that no Indemnified Party shall be
under any obligation either to insure any particular risk or to make a claim
under an existing policy.
"MBCA" means the Michigan Business Corporation Act, as amended.
"Material Customers" has the meaning set forth in Section 5.09.
"Merger" has the meaning set forth in the second paragraph of this Agreement.
"Merger Consideration" has the meaning set forth in Section 3.01.
"Merger Filings" has the meaning set forth in Section 2.02.
"Newco" has the meaning set forth in the first paragraph of this Agreement.
"Noncompete Term" has the meaning set forth in Section 9.01(a).
"1933 Act" means the Securities Act of 1933, as amended.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
"Permits" has the meaning set forth in Section 5.10.
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"Permitted Encumbrances" means any and all (a) Encumbrances reserved against
in the Interim Balance Sheet, (b) Encumbrances for property or ad valorem Taxes
not yet due and payable or which are being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto are maintained
on the Company's books in accordance with GAAP, and (c) obligations described in
Schedule 5.08.
"Plan" has the meaning set forth in Section 5.16.
"Qualified Plan" has the meaning set forth in Section 5.16.
"Restricted Shares" has the meaning set forth in Section 12.01.
"Rule 144" means Rule 144 as promulgated under the 1933 Act.
"SEC" means the Securities and Exchange Commission.
"Stockholders" has the meaning set forth in the first paragraph of this
Agreement.
"Structures" has the meaning set forth in Section 5.08.
"Surviving Corporation" has the meaning set forth in Section 2.01.
"Taxes" has the meaning set forth in Section 5.18.
"Territory" has the meaning set forth in Section 9.01.
"Third Person" has the meaning set forth in Section 8.03.
"U.S. Concrete" has the meaning set forth in the first paragraph of this
Agreement.
"U.S. Concrete Common Stock" means U.S. Concrete's Common Stock, par value
$.001 per share.
"Year-End Financial Statements has the meaning set forth in Section 5.05.
1.02 INTERPRETATION . For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in Section 1.01 and elsewhere in this Agreement
include the plural as well as the singular and vice versa;
(b) all accounting terms not otherwise defined herein have the meanings
ascribed to them in accordance with GAAP; and
(c) the words "herein," "hereof," and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision.
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ARTICLE II
THE MERGER AND THE SURVIVING CORPORATION
2.01 THE MERGER. Upon the terms and subject to the conditions of this
Agreement, at the Effective Time in accordance with the MBCA and the GCL, Newco
shall be merged with and into the Company and the separate existence of Newco
shall thereupon cease. The Company shall be the surviving corporation in the
Merger (hereinafter sometimes referred to as the "Surviving Corporation").
2.02 EFFECTIVE TIME OF THE MERGER. The Merger shall become effective at
such time (the "Effective Time") as (a) holders of all of the Company Common
Stock approve the Merger, and (b) a certificate of merger, in form mutually
acceptable to U.S. Concrete and the Company, is filed with the Secretary of
State of the State of Delaware and the Michigan Department of Consumer &
Industry Services, respectively (the "Merger Filings"). The Merger Filings
shall be made simultaneously with or as soon as practicable after the Closing.
2.03 CERTIFICATE OF INCORPORATION, BYLAWS AND BOARD OF DIRECTORS OF
SURVIVING CORPORATION. As a result of the Merger and at the Effective Time:
(a) The Certificate of Incorporation of the Company in effect
immediately prior to the Effective Time shall become the Certificate of
Incorporation of the Surviving Corporation. After the Effective Time, the
Certificate of Incorporation of the Surviving Corporation may be amended in
accordance with its terms and as provided in the MBCA.
(b) The Bylaws of the Company in effect immediately prior to the
Effective Time shall become the Bylaws of the Surviving Corporation, and
thereafter may be amended in accordance with their terms and as provided by
the Certificate of Incorporation of the Surviving Corporation and the MBCA.
(c) The Board of Directors of Newco as constituted immediately prior to
the Effective Time shall be the Board of Directors of the Surviving
Corporation.
ARTICLE III
CONVERSION OF SHARES
3.01 CONVERSION OF SHARES. At the Effective Time, by virtue of the
Merger, and without any action on the part of any holder of any capital stock of
the Company, the issued and outstanding shares of Company Common Stock as of the
Effective Time shall be cancelled and retired and converted into the right to
receive, and become exchangeable for an aggregate of $158,400 in cash and 87,394
shares of U.S. Concrete Common Stock (having an aggregate value of $633,600 at
$7.25 per share) at Closing (the cash and U.S. Concrete Common Stock paid in
exchange for the Company Common Stock being herein collectively referred to as
the "Merger Consideration"). The Merger Consideration shall be allocated
between Stockholders as set forth on Exhibit A, attached hereto and made a part
hereof.
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3.02 NEWCO SHARES. The outstanding shares of common stock, par value $.01
per share, of Newco shall be converted into the right to receive, and become
exchangeable for, 1,000 shares of Common Stock of the Surviving Corporation.
3.03 DELIVERY OF MERGER CONSIDERATION. At the Closing, (a) Stockholders
shall cause each shareholder of Company to furnish to U.S. Concrete the
certificates representing his or her Company Common Stock, duly endorsed in
blank by such shareholder or accompanied by duly executed blank stock powers,
and (b) U.S. Concrete shall deliver to each Stockholder cash (by wire transfer
in accordance with the wiring instructions for such Stockholder set forth on
Schedule 3.01) and a copy of an irrevocable instruction letter to U.S.
Concrete's transfer agent directing that certificates representing the shares of
U.S. Concrete Common Stock be delivered to such Stockholder pursuant to Section
3.01. Each Stockholder agrees promptly to cure any deficiencies with respect to
the endorsement of the certificates or other documents of conveyance with
respect to the Company Common Stock or with respect to the stock powers
accompanying such stock. U.S. Concrete will take all steps necessary to ensure
that the stock certificates are promptly issued by the transfer agent in
accordance with the terms of this Agreement and the irrevocable instruction
letter.
ARTICLE IV
CLOSING
4.01 CLOSING. The consummation of the Merger and delivery of the Merger
Consideration and the other transactions contemplated by this Agreement (the
"Closing") shall take place at the offices of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, 3200
National City Center, ▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, concurrently
with the execution of this Agreement or at such other time and date as U.S.
Concrete, the Company and the Stockholders may mutually agree, which date is
herein referred to as the "Closing Date."
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
The Stockholders, jointly and severally, represent and warrant to U.S.
Concrete as follows:
5.01 DUE ORGANIZATION AND QUALIFICATION. The Company is a corporation
duly organized, validly existing and in good standing under the Laws of the
State of Michigan and is duly authorized and qualified to do business under all
applicable Laws and to carry on its business in the places and in the manner as
now conducted. The Company has the requisite power and authority to own, lease
and operate its assets and properties and to carry on its business as such
business is currently being conducted. Schedule 5.01 includes (a)
certificate(s) of existence and good standing for the Company issued by the
appropriate Governmental Authorities of the State of Michigan, (b) a list of all
jurisdictions in which the Company is authorized or qualified to do business and
(c) certificate(s) of qualification or authority to do business (or similar
certificates) for the Company issued by the appropriate Governmental Authorities
of each of the jurisdictions in which the Company is authorized or qualified to
do business. The Company does not own, lease or operate any assets or
properties or carry on any business in any jurisdiction that
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Schedule 5.01 does not list. True, complete and correct copies of the Articles
of Incorporation and Bylaws, each as amended, of the Company are attached hereto
as Schedule 5.01, and no breach of such Articles of Incorporation or Bylaws has
occurred and is continuing. True, complete and correct copies of all stock
records and minute books of the Company have been provided to U.S. Concrete.
5.02 AUTHORIZATION; NON-CONTRAVENTION; APPROVALS.
(a) The Company has the requisite corporate power and authority to
enter into this Agreement and the ancillary documents and agreements
described herein and to effect the Merger. Each Stockholder has the full
legal right, power and authority to enter into this Agreement. The
execution, delivery and performance of this Agreement and the transactions
contemplated hereby have been approved by the board of directors of the
Company and each of the shareholders of Company. No additional corporate
proceedings on the part of the Company are necessary to authorize the
execution and delivery of this Agreement and the consummation by the
Company of the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by the Company and the
Stockholders, and, assuming the due authorization, execution and delivery
hereof by U.S. Concrete and Newco, constitutes a valid and binding
agreement of the Company and the Stockholders, enforceable against each of
them in accordance with its terms, subject to general principles of equity
and bankruptcy, insolvency and other similar laws relating to the
enforcement of creditor's rights.
(b) The execution and delivery of this Agreement by the Company and the
Stockholders do not, and the consummation by the Company and the
Stockholders of the transactions contemplated hereby will not, violate or
result in a breach of any provision of, or constitute a default (or an
event which, with notice or lapse of time or both, would constitute a
default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or
acceleration under, or result in the creation of any Encumbrance upon any
of the properties or assets of the Company under any of the terms,
conditions or provisions of, (i) the Articles of Incorporation or Bylaws of
the Company, (ii) any Law applicable to the Stockholders or the Company or
any of the properties or assets of the Stockholders or the Company, or
(iii) except as set forth in Schedule 5.02, any agreement, note, bond,
mortgage, indenture, deed of trust, license, franchise, Permit, concession,
lease or other instrument, obligation or agreement of any kind to which any
Stockholder or the Company is now a party or by which the Company or any of
its properties or assets may be bound or affected, except for any of the
foregoing which would not have a material adverse effect on the financial
condition or results of operations of Company or the Surviving Corporation.
(c) Except for the Merger Filings and as set forth in Schedule 5.02, no
declaration, filing or registration with, or notice to, or authorization,
consent or approval of, any Governmental Authority or other person or
entity is necessary for the execution and delivery of this Agreement by the
Company and the Stockholders or the consummation by the Company and the
Stockholders of the transactions contemplated hereby. Except as set forth
in Schedule 5.02, none of the contracts or agreements with Material
Customers or contracts providing for purchases or services individually in
excess of $10,000, or in the aggregate in excess of $25,000, or leases or
Permits to which
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the Company is a party requires notice to, or the consent or approval of,
any Governmental Authority or other person or entity to the execution and
delivery of this Agreement by the Company and the Stockholders or to any of
the transactions contemplated hereby to remain in full force and effect
following such transaction.
5.03 CAPITALIZATION AND OWNERSHIP. The authorized capital stock of the
Company consists solely of 60,000 shares of Company Common Stock, of which 9,200
shares are issued and outstanding. All of the issued and outstanding shares of
the Company Common Stock are owned beneficially and of record as set forth in
Schedule 5.03. All of the issued and outstanding shares of the Company Common
Stock have been duly authorized and validly issued, are fully paid and
nonassessable, and were offered, issued, sold and delivered by the Company in
compliance with all applicable Laws, including, without limitation, those Laws
concerning the issuance of securities. None of such shares were issued in
violation of the preemptive rights of any past or present stockholder of the
Company. At the Effective Time, by virtue of the Merger Filing in Michigan the
Merger will become effective in Michigan. Except as set forth in Schedule 5.03,
(a) no shares of Company Common Stock are held by the Company as treasury
shares, and (b) no subscription, option, warrant, call, convertible or
exchangeable security, other conversion right or commitment of any kind exists
which obligates the Company to issue any of its capital stock or the
Stockholders to transfer any of the capital stock of the Company.
5.04 SUBSIDIARIES. Except as set forth in Schedule 5.04, the Company
owns, of record or beneficially, or controls, directly or indirectly, no capital
stock, securities convertible into or exchangeable for capital stock or any
other equity interest in any corporation, association or other business entity.
Except as set forth in Schedule 5.04, the Company is not, directly or
indirectly, a participant in any joint venture, limited liability company,
partnership or other noncorporate entity.
5.05 FINANCIAL STATEMENTS.
(a) The Company has delivered to U.S. Concrete true, complete and
correct copies of the following financial statements:
(i) the reviewed balance sheets of the Company as of December
31, 1996, 1997 and 1998, and the related reviewed statements of
operations, stockholders' equity and cash flows for the three-year
period ended December 31, 1998, together with the related notes,
schedules and report of the Company's independent accountants (such
balance sheets, the related statements of operations, stockholders'
equity and cash flows and the related notes and schedules are referred
to herein as the "Year-End Financial Statements"); and
(ii) the unaudited balance sheet (the "Interim Balance Sheet") of
the Company as of December 31, 1999 (the "Balance Sheet Date") and the
related unaudited statements of operations, for the year ended on the
Balance Sheet Date (such balance sheets, the related statements of
operations, and any related notes and schedules are referred to herein
as the "Interim Financial Statements"). The Year-End Financial
Statements and the Interim Financial Statements (collectively, the
"Financial Statements") are attached as Schedule 5.05 to this
Agreement;
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(b) Except as set forth in Schedule 5.05, the Financial Statements have
been prepared from the books and records of the Company in conformity with
GAAP and present fairly the financial position and results of operations of
the Company in all material respects as of the dates of such statements and
for the periods covered thereby; provided, however, that the Interim
Financial Statements are subject to normal year-end adjustments and lack
footnotes and other presentation items. The books of account of the Company
have been kept accurately in all material respects in the ordinary course
of business, the transactions entered therein represent bona fide
transactions, and the revenues, expenses, assets and liabilities of the
Company have been properly recorded therein in all material respects.
Within the past five fiscal years of the Company, the Company has not
received any correspondence with its accountants, including without
limitation, management letters, which have indicated or disclosed that
there is a "material weakness" in or "reportable condition" with respect to
(as those terms are defined under GAAP) the Company's financial condition.
5.06 LIABILITIES AND OBLIGATIONS. Except as set forth in Schedule 5.06,
as of the Balance Sheet Date the Company did not have, nor has it incurred since
that date, any liabilities or obligations (whether absolute, accrued, contingent
or otherwise) of any nature, except liabilities, obligations or contingencies
(a) that are reflected or accrued or reserved against in the Financial
Statements or reflected in the notes thereto, (b) that are of a nature not
required to be reflected in the Financial Statements in accordance with GAAP, or
(c) that were incurred after the Balance Sheet Date and were incurred in the
ordinary course of business, consistent with past practices. For each such
liability for which the amount is not fixed or is contested, the Company has
provided a summary description of the liability together with copies of all
relevant documentation relating thereto. Except as set forth in Schedule 5.06,
there are no prepayment penalties, termination fees or other payments triggered
by the prepayment or termination of any loan or indebtedness of the Company.
5.07 ACCOUNTS AND NOTES RECEIVABLE. Schedule 5.07 sets forth an accurate
list of the accounts and notes receivable of the Company as of the Balance Sheet
Date and of those generated between the Balance Sheet Date and the second
business day preceding the Closing Date, including any such amounts which are
not reflected in the Interim Balance Sheet. Receivables from and advances to
employees, the Stockholders and any entities or persons related to or Affiliates
of the Stockholders are separately identified in Schedule 5.07. Schedule 5.07
also sets forth an accurate aging of all accounts and notes receivable as of the
Balance Sheet Date, showing amounts due in 30-day aging categories. The trade
and other accounts receivable of the Company, including without limitation those
classified as current assets on the Interim Balance Sheet, are bona fide
receivables, were acquired in the ordinary course of business, are stated in
accordance with GAAP and are collectible in the amounts shown on Schedule 5.07,
net of reserves reflected in the Interim Financial Statements with respect to
the accounts receivable as of the Balance Sheet Date, and net of reserves
reflected in the books and records of the Company (consistent with the methods
used in the Interim Financial Statements) with respect to receivables of the
Company after the Balance Sheet Date.
5.08 PROPERTIES AND ASSETS.
(a) Schedule 5.08 sets forth an accurate list of all real and personal
property included in "property and equipment" on the Interim Balance Sheet
and all other tangible
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assets of the Company with a book value in excess of $5,000 (i) owned by
the Company as of the Balance Sheet Date and (ii) acquired since the
Balance Sheet Date. Schedule 5.08 also sets forth an accurate list of all
real and personal property currently leased by the Company, and includes
complete and correct copies of leases for significant equipment and for all
real property leased by the Company and descriptions of all real property
(as currently owned or leased by the Company) on which plants, buildings,
warehouses, workshops, garages and other structures (collectively, the
"Structures") and vehicles used in the operation of the business of the
Company are situated and, for each of those properties, the address
thereof, the type and approximate square footage of each Structure located
thereon and the use thereof in the business of the Company. Schedule 5.08
indicates which properties and assets used in the operation of the
businesses of the Company are currently owned by the Stockholders or
Affiliates of either of the Company or the Stockholders. Except as
specifically identified in Schedule 5.08, all of the tangible assets,
plants, Structures, vehicles and other significant machinery and equipment
owned or leased by the Company listed in Schedule 5.08 have been maintained
by the Company in the ordinary course of business consistent with past
practice and are in such condition and repair as is suitable for the
purpose for which they presently are being used or held for use, ordinary
wear and tear excepted. Except as specifically described in Schedule 5.08,
all properties and fixed assets used by the Company in its business are
either owned by the Company or leased under agreements identified in
Schedule 5.08 and are affixed only to one or more of the real properties
Schedule 5.08 lists. All leases set forth in Schedule 5.08 are in full
force and effect and constitute valid and binding agreements of the Company
and the other parties thereto in accordance with their respective terms,
and all amounts currently due and payable thereunder have been paid.
Neither the Company nor any other party to the leases set forth in Schedule
5.08 is or has been asserted to be in default, violation or breach of any
such lease in any material respects, and no event has occurred and is
continuing that constitutes or, with notice or the passage of time or both,
would constitute such a default, violation or breach under any such lease.
The Company has good, valid and marketable title to the tangible and
intangible assets, personal property and real property owned and used in
its business, including, without limitation, the properties identified in
Schedule 5.08 as owned real property (each of which the Company owns in
fee), free and clear of all Encumbrances other than Permitted Encumbrances
and those set forth in Schedule 5.08. Schedule 5.08 contains true, complete
and correct copies of all title reports and title insurance policies in the
possession or control of the Company with respect to the real property
owned or leased by the Company. Schedule 5.08 includes a summary
description of all commitments of the Company involving the opening of new
operations, expansion of existing operations or the acquisition of any real
property or existing business, to which management of the Company has
devoted any significant effort or expenditure in the two-year period prior
to the date of the Agreement and which the Surviving Corporation would be
obligated to continue after the Merger.
(b) Except as specifically described in Schedule 5.08, all uses of the
real property owned and leased by the Company conform in all material
respects to all applicable Laws and do not violate any instrument of record
or agreement affecting any such property. Neither the Company nor the
Stockholders have received from any insurance carrier insuring or proposing
to insure any of the real property owned or leased by the Company or any
other person or entity any written notice or communication
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noting any dangerous or illegal condition at any such property or any other
condition at any of such properties otherwise requiring corrective action
as of the Closing Date. Except as otherwise described on Schedule 5.08, all
of the real property owned and leased by the Company can be used by the
Surviving Corporation for their intended purposes without violating any
conditional use permit, variance or private restriction. Neither the
Company nor the Stockholders have received any written notice nor have any
knowledge that any of the real property owned or leased by the Company is
or will be affected by any special assessments, condemnation, eminent
domain, off-site improvements to be constructed, change in grade of public
streets or similar proceedings. There is no writ, injunction, decree, order
or judgment outstanding, nor any action, claim, suit or proceeding, pending
or, to the Stockholders' knowledge, threatened, relating to the ownership,
lease, use, occupancy or operation of any real property owned or leased by
the Company.
(c) There is ingress and egress to and from each of the real properties
owned and leased by the Company of record adequate for the use of such
properties as currently operated by the Company. Except as disclosed in
Schedule 5.08, the Company has made no off-record agreements affecting the
ownership, use or occupation of any such properties. All public utilities,
including if applicable, without limitation, sewers, water, electric, gas
and telephone, required for the operation of each of the real properties
owned and leased by the Company as presently operated are installed and
operating, and all installation and connection charges therefor have been
paid in full. Neither the Company nor the Stockholders have received any
written notice stating that the Company will not be able to obtain adequate
supplies of water to operate its business on any such properties as
presently conducted, or that the provision of utilities violates any public
or private easement as of the Closing Date. Neither the Company nor the
Stockholders have received written notice that any part of any improvements
on the real property owned or leased by the Company (including any of the
structures thereon) encroaches upon any property adjacent thereto or upon
any easement, nor is there any encroachment or overlap upon the real
property owned or leased by the Company as of the Closing Date. Each of the
real property leases listed in Schedule 5.08 grants the Company the
exclusive right to use and occupy the demised premises thereunder, and the
Company enjoys peaceful and undisturbed possession under its respective
real property leases listed on Schedule 5.08 for the real property leased
by the Company. None of the real property leases requires the consent of
the applicable landlord to the Merger or the transactions contemplated by
this Agreement. Except as set forth on Schedule 5.08, no person or entity
other than the Company is in possession of any of the real property owned
or leased by the Company. Except as set forth on Schedule 5.08, to the
knowledge of the Company there are no contracts outstanding for the sale,
exchange, lease or transfer of any of the real property owned or leased by
the Company, or any other right of a third party to acquire any interest
therein. The heating, cooling, ventilation, electrical and plumbing systems
at all of the real property owned and leased by the Company is in good
working condition, in all material respects, ordinary wear and tear
excepted.
5.09 MATERIAL CUSTOMERS AND CONTRACTS.
(a) Schedule 5.09 (i) sets forth an accurate list of all customers
representing 5% or more of the Company's revenues for each of the fiscal
year ended in 1999 and the
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interim period ended on the Balance Sheet Date (the "Material Customers"),
and (ii) sets forth an accurate list and briefly describes all material
contracts, warranties, commitments, understandings, instruments and similar
agreements and arrangements to which the Company is currently a party or by
which it or any of its properties is bound (the "Listed Agreements"),
including, but not limited to, (A) all customer contracts in excess of
$10,000, individually, or $25,000 in the aggregate, (B) contracts with any
labor organizations, (C) leases providing for annual rental payments in
excess of $5,000, individually, or $10,000 in the aggregate, (D) loan
agreements, (E) pledge and security agreements, (F) financing agreements,
(G) indemnity or guaranty agreements or obligations, (H) bonds, debentures
and indentures, (I) notes, (J) mortgages, (K) joint venture, partnership or
cost-sharing agreements, (L) options to purchase real or personal property,
(M) agreements relating to the purchase or sale by the Company of assets or
securities for more than $5,000, individually, or $10,000 in the aggregate,
(N) agreements, which, by their terms, require the consent of any party
thereto to the consummation of the transactions contemplated hereby, (O)
voting trust agreements or similar stockholders' agreements, (P) agreements
providing for the purchase from a supplier of all or substantially all the
requirements of the Company of a particular product, material or service
and (Q) any other contracts, warranties, commitments, understandings,
instruments and similar agreements and arrangements which involve aggregate
payments in excess of $10,000 that cannot be canceled in 30 days' or less
notice without penalty or premium or any continuing obligation or
liability. Prior to the date hereof, the Company has made available to U.S.
Concrete true, complete and correct copies of all the Listed Agreements.
(b) Except as set forth in Schedule 5.09, since December 31, 1999 (i)
no Material Customer has canceled or substantially reduced or, to the
knowledge of the Company and the Stockholders, is threatening to cancel or
substantially reduce its purchases of the Company's products or services,
and (ii) neither the Company nor any other party to the Listed Agreements
is or has been asserted to be in default, violation or breach in any
material respect of any such Listed Agreement, and no event has occurred
and is continuing that constitutes or with notice or the passage of time or
both, would constitute such a default, violation or breach under any such
Listed Agreement. The Listed Agreements are in full force and effect and
constitute valid and binding agreements of the Company and the other
parties thereto in accordance with their respective terms.
(c) Except as set forth in Schedule 5.09, the Company is not a party to
any contracts subject to price redetermination or renegotiation. Except to
the extent set forth in Schedule 5.09, the Company is not required to
provide any bonding or other financial security arrangements in any
material amount in connection with any transactions with any of its
customers or suppliers.
(d) Except as set forth in Schedule 5.09, neither the Company, the
Stockholders nor, to the Stockholders' knowledge, any officer, employee,
stockholder, director, representative or agent thereof is a party to any
contract, arrangement, commitment or understanding among themselves or with
any of the Company's customers for the repurchase of products, sharing of
fees, rebating of charges, bribes, kickbacks or other similar arrangements.
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(e) Schedule 5.09 sets forth a summary of each outstanding bid or
proposal by the Company that, if awarded to the Company, contemplates
payments to the Company in excess of $50,000.
(f) Except as set forth in Schedule 5.09, neither the Company nor the
Stockholders have any knowledge of any plan or intention of any other party
to any Listed Agreement to exercise any right to cancel or terminate that
Listed Agreement, and neither the Company nor the Stockholders have any
knowledge of any condition or state of facts which would justify the
exercise of such a right.
5.10 PERMITS. Schedule 5.10 contains an accurate list, and copies of all
licenses, franchises, permits, approvals, certificates, transportation
authorities and other governmental authorizations and intangible assets held by
the Company that are material to the conduct of its business, including, without
limitation, permits, licenses and operating authorizations, fuel permits,
franchises and certificates owned or held by the Company (collectively, the
"Permits"). The Permits are valid, and the Company has not received any written
notice that any Governmental Authority intends to cancel, terminate or not renew
any such Permit. The Permits are all the permits, licenses, operating
authorizations, franchises, approvals, certificates, transportation authorities
and other governmental authorizations and intangible assets that are required by
Law for the operation of the businesses of the Company as conducted at the
Balance Sheet Date and the ownership of the assets and properties of the
Company. The Company has conducted and is conducting its business in
substantial compliance with the requirements, standards, criteria and conditions
set forth in the Permits, as well as the applicable orders, approvals and
variances related thereto, and is not in substantial violation of any of the
foregoing. Except as specifically provided in Schedule 5.10, the transactions
contemplated by this Agreement will not result in a default under, a breach or
violation of, a termination of, or adversely affect the rights and benefits
afforded to the Company by, any Permits.
5.11 ENVIRONMENTAL MATTERS. Except as set forth in Schedule 5.11, (a)
the Company has complied with and is in compliance with all Environmental Laws,
(b) the Company has obtained and complied with all necessary permits, licenses,
authorizations and other approvals necessary to treat, transport, store, dispose
of and otherwise handle Hazardous Substances and has reported, to the extent
required by all Environmental Laws, all past and present sites owned or operated
by the Company where Hazardous Substances have been treated, stored, disposed of
or otherwise handled, (c) there have been no "releases" or threats of "releases"
(as defined in any Environmental Laws) by the Company, its agents, employees or
representatives at, from, in, to, under or on any property currently or
previously owned or operated by the Company, (d) there is no on-site or off-site
location to which the Company has transported or disposed of Hazardous
Substances or arranged for the transportation or disposal of Hazardous
Substances which, to the Stockholders' knowledge, is the subject of any federal,
state, local or foreign enforcement action or any other investigation which
could lead to any claim against the Surviving Corporation, U.S. Concrete or
Newco for any clean-up cost, remedial work, damage to natural resources or
personal injury, including, but not limited to, any claim under any
Environmental Law and (e) the Company has no contingent liability in connection
with any release or disposal of any Hazardous Substance by the Company, its
agents, employees or representatives into the environment. None of the past or
present sites owned or operated by the Company is currently or has during
Stockholders' ownership of Company been designated as a treatment, storage
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and/or disposal facility, nor, to the Stockholders' knowledge, has any such
facility ever applied for a permit, license, authorization or other approval
designating it as a treatment, storage and/or disposal facility, under any
Environmental Law. The Company has provided U.S. Concrete with copies (or, if
not available, accurate written summaries) of all environmental investigations,
studies, audits, reviews and other analyses conducted by or on behalf, or which
otherwise are in the possession, of the Company respecting any facility site or
other property previously or presently owned or operated by the Company.
5.12 LABOR AND EMPLOYEE RELATIONS; EMPLOYMENT MATTERS.
(a) Company has no employees.
(b) Except as set forth in Schedule 5.12, (i) no action, suit,
complaint, charge, arbitration, inquiry, proceeding or investigation by or
before any Governmental Authority brought by or on behalf of any
prospective employee, former employee, retiree, labor organization or other
representative is pending or, to the Stockholders' knowledge, threatened
against the Company, (ii) no grievance is pending or threatened against the
Company, (iii) the Company is not a party to, or otherwise bound by, any
consent decree with, or citation by, any Governmental Authority relating to
employees or employment practices.
5.13 INSURANCE. Schedule 5.13 sets forth an accurate list as of the
Balance Sheet Date of (a) all insurance policies carried by the Company, copies
of which are attached as Schedule 5.13, (b) all insurance loss runs or workmen's
compensation claims received for the past five policy years, and (c) the
following information with respect to all insurance policies currently carried
by the Company and previously carried by the Company within the last five years:
(i) insurer, (ii) type of policy, (iii) coverage period, and (iv) policy limits
and amount of deductible or loss retention. Except as set forth in Schedule
5.13, none of such policies are "claims made" policies. The policies described
in Schedule 5.13 for the current policy year provide adequate coverage against
the risks customarily involved in the Company's business based on historical
experiences and are currently in full force and effect. Any open claims as of
the Closing Date are recoverable under such policies, except to the extent of
any applicable deductible or loss retention as set forth on Schedule 5.13.
5.14 COMPENSATION; EMPLOYMENT AGREEMENTS. Schedule 5.14 sets forth an
accurate schedule of all officers and directors of the Company listing the rate
of compensation (and the portions thereof attributable to salary, bonus,
benefits and other compensation, respectively) of each of such persons as of (a)
the Balance Sheet Date and (b) the date hereof. Neither the Company nor the
Stockholders have any knowledge that any of such individuals has any present
intention of terminating his or her association with the Company. Company has
no employment or consulting agreements with any person or entity. Except as set
forth in Schedule 5.14, the Company is not a party to any agreement, nor has it
established any plan, policy, practice or program, requiring it to make a
payment or provide any other form of compensation or benefit or vesting rights
to any officer, director or stockholder of the Company or other person
performing services for the Company which would not be payable or provided in
the absence of this Agreement or the consummation of the transactions
contemplated hereby, including any parachute payment under Section 280G of the
Code.
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5.15 NONCOMPETITION, CONFIDENTIALITY AND NONSOLICITATION AGREEMENTS;
EMPLOYEE POLICIES. Schedule 5.15 sets forth all agreements containing
covenants not to compete or solicit employees or to maintain the confidentiality
of information to which the Company or any of the Stockholders is bound or under
which the Company or any of the Stockholders has any rights or obligations.
Schedule 5.15 lists all employee manuals and all material policies, procedures
and work-related rules that apply to any employee, director or officer of, or
any other individual performing consulting or other independent contractor
services for, the Company. The Company has provided U.S. Concrete with a copy
of all such written policies and procedures and a written description of all
such unwritten policies and procedures.
5.16 EMPLOYEE BENEFIT PLANS.
(a) Schedule 5.16 sets forth an accurate schedule of each "employee
benefit plan," as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") (other than a "multiemployer
plan", as defined in Section 3(37) of ERISA), and all deferred compensation
or retirement funding arrangements, whether formal or informal and whether
legally binding or not, under which the Company or an ERISA Affiliate has
any current or future obligation or liability or under which any present or
former employee of the Company or an ERISA Affiliate, or such present or
former employee's dependents or beneficiaries, has any current or future
right to benefits (each such plan and arrangement referred to hereinafter
as a "Plan"). Company has provided to U.S. Concrete true and complete
copies of such Plans, arrangements and any trusts related thereto, and
classifications of employees covered thereby as of the Balance Sheet Date.
Except as set forth in Schedule 5.16, neither the Company nor any ERISA
Affiliate sponsors, maintains or contributes currently, or sponsored,
maintained or contributed at any time during the preceding five years, to
any plan, program, fund or arrangement that constitutes an employee pension
benefit plan. Except as set forth in Schedule 5.16, each Plan may be
terminated by the Company, or if applicable, by an ERISA Affiliate at any
time without any liability, cost or expense, other than costs and expenses
that are customary in connection with the termination of a Plan. For
purposes of this Agreement, the term "employee pension benefit plan" shall
have the meaning given that term in Section 3(2) of ERISA (other than a
multiemployer plan), and the term "ERISA Affiliate" means any corporation
or trade or business under common control with the Company as determined
under Section 414(b), (c), (m) or (o) of the Code.
(b) Each Plan listed in Schedule 5.16 is in compliance in all material
respects with the applicable provisions of ERISA, the Code and any other
applicable Law. Except as set forth in Schedule 5.16, with respect to each
Plan of the Company and each ERISA Affiliate, all reports and other
documents required under ERISA or other applicable Law to be filed with any
Governmental Authority, including without limitation all Forms 5500, or
required to be distributed to participants or beneficiaries, have been duly
and timely filed or distributed. True and complete copies of all such
reports and other documents with respect to the past three years for each
Plan have been provided to U.S. Concrete. No "accumulated funding
deficiency" (as defined in Section 412(a) of the Code) with respect to any
Plan has been incurred (without regard to any waiver granted under Section
412 of the Code), nor has any funding waiver from the Internal Revenue
Service been received or requested. Except as set forth in Schedule 5.16,
each Plan that
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is intended to be "qualified" within the meaning of Section 401(a) of the
Code (a "Qualified Plan") is, and has been during the period from its
adoption to the date hereof, so qualified, both as to form and operation
and all necessary approvals of Governmental Authorities, including a
favorable determination as to the qualification under the Code of each of
such Qualified Plans and each amendment thereto, have been timely obtained.
Except as set forth in Schedule 5.16, all accrued contribution obligations
of the Company with respect to any Plan have either been fulfilled in their
entirety or are fully reflected in the Financial Statements.
(c) No Plan has incurred or will incur, and neither the Company nor any
ERISA Affiliate has incurred or will incur, with respect to any Plan, any
liability for excise tax or penalty due to the Internal Revenue Service.
There have been no terminations, partial terminations or discontinuances of
contributions to any Qualified Plan during the preceding five years without
notice to and approval by the Internal Revenue Service and payment of all
obligations and liabilities attributable to such Qualified Plan.
(d) Except as set forth in Schedule 5.16, neither the Company nor any
ERISA Affiliate has made any promises of retirement or other benefits to
employees, except as set forth in the Plans, and neither the Company nor
any ERISA Affiliate maintains or has established any Plan that is a
"welfare benefit plan" within the meaning of Section 3(1) of ERISA that
provides for continuing benefits or coverage for any participant or any
beneficiary of a participant after such participant's termination of
employment, except as may be required by Part 6 of Subtitle B of Title I of
ERISA and Section 4980B of the Code and similar state Law provisions, and
at the expense of the participant or the beneficiary of the participant, or
retiree medical liabilities. Neither the Company nor any ERISA Affiliate
maintains, has established or has ever participated in a multiple employer
welfare benefit arrangement as described in Section 3(40)(A) of ERISA.
Except as set forth in Schedule 5.16, neither the Company nor any ERISA
Affiliate has any current or future obligation or liability with respect to
a Plan pursuant to the provisions of a collective bargaining agreement.
(e) Neither the Company nor any ERISA Affiliate has incurred, nor will
it incur as a result of past activities, any material liability to the
Pension Benefit Guaranty Corporation in connection with any Plan. Except as
set forth on Schedule 5.16, the assets of each Plan that are subject to
Title IV of ERISA are sufficient to provide the benefits under such Plan,
the payment of which the Pension Benefit Guaranty Corporation would
guarantee if such Plan were terminated, and such assets are also sufficient
to provide all other "benefits liabilities" (as defined in ERISA Section
4001(a)(16)) due under such Plan upon termination.
(f) No "reportable event" (as defined in Section 4043 of ERISA) has
occurred and is continuing with respect to any Plan. There are no pending,
or to the Company's and the Stockholders' knowledge, threatened claims,
lawsuits or actions (other than routine claims for benefits in the ordinary
course) asserted or instituted against, and neither the Company nor any
ERISA Affiliate has knowledge of any threatened litigation or claims
against, the assets of any Plan or its related trust or against any
fiduciary of a Plan with respect to the operation of such Plan. To the
Company's and the Stockholders'
-17-
knowledge, there are no investigations or audits of any Plan by any
Governmental Authority currently pending and there have been no such
investigations or audits that have been concluded that resulted in any
liability to the Company or any ERISA Affiliate that has not been fully
discharged. Neither the Company nor any ERISA Affiliate has participated in
any voluntary compliance or closing agreement programs established with
respect to the form or operation of a Plan.
(g) Neither the Company nor any ERISA Affiliate has engaged in any
prohibited transaction, within the meaning of Section 406 of ERISA or
Section 4975 of the Code, in connection with any Plan for which exemption
was not available. No person or entity that was engaged by the Company or
an ERISA Affiliate as an independent contractor within the last five years
reasonably can or will be characterized or deemed to be an employee of the
Company or an ERISA Affiliate under applicable Laws for any purpose
whatsoever, including, without limitation, for purposes of federal, state
and local income taxation, workers' compensation and unemployment insurance
and Plan eligibility.
(h) Schedule 5.16 also sets forth an accurate schedule of each
multiemployer plan to which the Company or any ERISA Affiliate is, or ever
has been, a participant in or obligated to make any payment. With respect
to each such multiemployer plan: (i) none of the foregoing representations
and warranties of this Section 5.16 shall apply; and (ii) except as set
forth on Schedule 5.16, all contributions required to be made by the
Company or any ERISA Affiliate to such multiemployer plan have been made or
are accrued and fully reflected in the Financial Statements.
5.17 LITIGATION AND COMPLIANCE WITH LAW. Except as set forth in Schedule
5.17, there are no claims, actions, suits or proceedings, pending or, to the
knowledge of the Company and the Stockholders, threatened against or affecting
the Company, at law or in equity, or before or by any Governmental Authority
having jurisdiction over the Company. No written notice of any claim, action,
suit or proceeding, whether pending or threatened, has been received by the
Company and, to the Stockholders' and the Company's knowledge, there are no
facts or circumstances existing which, with delivery of notice or passage of
time or both would constitute such a claim, action, suit or proceeding. Except
to the extent set forth in Schedule 5.17, the Company has conducted and is
conducting its business in substantial compliance with all Laws applicable to
the Company, its assets or the operation of its business. Also listed on
Schedule 5.17 are all other instances where the Company is a plaintiff or
complaining or moving party, under any of the above types of proceedings.
5.18 TAXES. For purposes of this Agreement, the term "Taxes" shall mean
all taxes, charges, fees, levies or other assessments including, without
limitation, income, gross receipts, excise, property, sales, withholding, social
security, unemployment, occupation, use, service, service use, license, payroll,
franchise, transfer and recording taxes, fees and charges, imposed by the United
States or any state, local or foreign government or subdivision or agency
thereof, whether computed on a separate, consolidated, unitary, combined or any
other basis; and such term shall include any interest, fines, penalties or
additional amounts attributable to or imposed with respect to any such taxes,
charges, fees, levies or other assessments. The Company has timely filed all
requisite federal, state, local and other tax returns for all fiscal periods
ended on or before the Closing, and has duly paid in full or made adequate
provision in the year-end
-18-
Financial Statements for the payment of all Taxes for all periods ending at or
prior to the Closing Date. The Company has duly withheld and paid or remitted
all Taxes required to have been withheld and paid in connection with amounts
paid or owing to any employee, independent contractor, creditor, stockholder or
other person or entity that required withholding under any applicable Law,
including, without limitation, any amounts required to be withheld or collected
with respect to social security, unemployment compensation, sales or use taxes
or workers' compensation. There have not been during the past three years nor
are there currently in progress any examinations, audits, proceedings, notices,
waivers, asserted deficiencies or disputed valuations or other claims against
the Company relating to Taxes for any period or periods prior to and including
the Balance Sheet Date and no notice of any claim for Taxes has been received.
The Company has not granted or been requested to grant any extension of the
limitation period applicable to any claim for Taxes or assessments with respect
to Taxes. The Company is not a party to any Tax allocation or sharing agreement
and is not otherwise liable or obligated to indemnify any person or entity with
respect to any Taxes. True and complete copies of (a) any tax examinations or
audits, (b) extensions of statutory limitations and (c) the federal, state and
local Tax returns of the Company for the last three fiscal years have been
previously provided to U.S. Concrete. There are no requests for ruling in
respect of any Tax pending between the Company and any Taxing authority. The
Company is taxed under the provisions of Subchapter C of the Code. The Company
currently utilizes the accrual method of accounting for income tax purposes.
Such method of accounting has not changed in the past five years.
5.19 ABSENCE OF CHANGES. Since the Balance Sheet Date, except as set
forth in Schedule 5.19, the Company has conducted its operations in the ordinary
course and there has not been:
(a) any material adverse change in the business, operations,
properties, condition (financial or other), assets, liabilities (contingent
or otherwise), or results of operations of the Company;
(b) any damage, destruction or loss (whether or not covered by
insurance) materially adversely affecting the assets, properties or
business of the Company;
(c) any change in the authorized capital stock of the Company or in its
outstanding securities or any change in the Stockholders' ownership
interests in the Company or any grant of any options, warrants, calls,
conversion rights or commitments;
(d) any declaration or payment of any dividend or distribution in
respect of the capital stock or any direct or indirect redemption, purchase
or other acquisition of any of the capital stock of the Company;
(e) any increase in the compensation payable or to become payable by
the Company to the Stockholders or any of its officers, directors,
employees, consultants or agents, except for ordinary and customary bonuses
and salary increases for employees in accordance with past practice, which
bonuses and salary increases are set forth in Schedule 5.19;
(f) any work interruptions, labor grievances or claims filed;
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(g) except for the Merger, any sale or transfer, or any agreement to
sell or transfer, any material assets, properties or rights of the Company
to any person or entity, including, without limitation, the Stockholders
and their Affiliates;
(h) any cancellation, or agreement to cancel, any indebtedness or other
obligation owing to the Company;
(i) any increase in the indebtedness of the Company, other than
accounts payable incurred in the ordinary course of business, consistent
with past practices, or incurred in connection with the transactions
contemplated by this Agreement;
(j) any plan, agreement or arrangement granting any preferential rights
to purchase or acquire any interest in any of the assets, properties or
rights of the Company or requiring consent of any party to the transfer and
assignment of any such assets, properties or rights;
(k) any purchase or acquisition of, or agreement, plan or arrangement
to purchase or acquire, any assets, properties or rights outside of the
ordinary course of the Company's business;
(l) any waiver of any material rights or claims of the Company; or
(m) any other material transaction by the Company outside the ordinary
course of business.
5.20 ACCOUNTS WITH BANKS AND BROKERAGES; POWERS OF ATTORNEY. Schedule
5.20 sets forth an accurate schedule, as of the date of this Agreement, of (a)
the name of each financial institution or brokerage firm in which the Company
has accounts or safe deposit boxes; (b) the names in which the accounts or boxes
are held; (c) the type of account and the cash, cash equivalents and securities
held in such account as of the second business day prior to the Closing, none of
which assets have been withdrawn from such accounts since such date except for
bona fide business purposes in the ordinary course of the business of the
Company; and (d) the name of each person authorized to draw thereon or have
access thereto. Schedule 5.20 also sets forth the name of each person,
corporation, firm or other entity holding a general or special power of attorney
from the Company and a description of the terms thereof.
5.21 ABSENCE OF CERTAIN BUSINESS PRACTICES. Neither the Company nor the
Stockholders nor any of their respective Affiliates has given or offered to give
anything of value to any governmental official, political party or candidate for
government office that was illegal to give or offer to give nor has it otherwise
taken any action which would constitute a violation of the Foreign Corrupt
Practices Act of 1977, as amended, or any similar Law.
5.22 COMPETING LINES OF BUSINESS; RELATED-PARTY TRANSACTIONS. Except as
set forth in Schedule 5.22, neither the Stockholders nor any other Affiliate of
the Company owns, directly or indirectly, any interest in, or is an officer,
director, employee or consultant of or otherwise receives remuneration from, any
Competitive Business, lessor, lessee, customer or supplier of the Company.
Except as set forth in Schedule 5.22, no officer or director of the Company nor
the
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Stockholders have, nor had any interest in any tangible or intangible assets or
real or personal property used in or pertaining to the business of the Company.
5.23 INTANGIBLE PROPERTY. Schedule 5.23 sets forth an accurate list of
all patents, patent applications, trademarks, service marks, technology,
licenses, trade names, copyrights and other intellectual property or
proprietary property rights owned or used by the Company. The Company owns or
possesses, and the assets of the Company include, sufficient legal rights to use
all of such items without conflict with or infringement of the rights of others.
5.24 CAPITAL EXPENDITURES. Schedule 5.24 sets forth the total amount of
capital expenditures currently budgeted to be incurred by the company in excess
of $25,000 in the aggregate during the balance of the Company's current fiscal
year.
5.25 INVENTORIES. Except as Schedule 5.25 sets forth: (i) all
inventories, net of reserves determined in accordance with GAAP, of the Company
which are classified as such on the Interim Balance Sheet are merchantable and
salable or usable in the ordinary course of business of the Company; and (ii)
the Company does not depend on any single vendor for its inventories the loss of
which could have a material adverse effect on the business or financial
condition of the Company or during the past five years has sustained a
difficulty material to the Company in obtaining its inventories.
5.26 TAX REORGANIZATION REPRESENTATION. The Surviving Corporation will
acquire substantially all of the properties of the Company within the meaning of
Section 368(a)(2)(D) of the Code.
5.27 ABSENCE OF INTEREST-BEARING DEBT. As of the Closing Date, Company
shall have no Interest-Bearing Debt and no Interest-Bearing Debt shall be
assumed by the Surviving Corporation.
5.28 NO IMPLIED REPRESENTATIONS. Notwithstanding anything to the contrary
contained in this Agreement, it is the express understanding of the Stockholders
and the Company that U.S. Concrete and Newco are not making any representation
or warranty whatsoever, express or implied, other than those representations and
warranties of U.S. Concrete and Newco expressly set forth in this Agreement.
5.29 DISCLOSURE. The Stockholders and the Company have fully provided
U.S. Concrete or its representatives with all the information that U.S. Concrete
has requested in analyzing whether to consummate the Merger and the other
transactions contemplated by this Agreement. None of the information so
provided nor any representation or warranty of the Stockholders to U.S. Concrete
or Newco in this Agreement contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements herein,
in light of the circumstances under which they were made, not misleading.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF U.S. CONCRETE AND NEWCO
U.S. Concrete and Newco jointly and severally represent and warrant to the
Stockholders as follows:
6.01 ORGANIZATION. Each of U.S. Concrete and Newco is a corporation duly
organized, validly existing and in good standing under the Laws of the State of
Delaware, and is duly authorized and qualified under all applicable Laws to
carry on its business in the places and in the manner now conducted. Each of
U.S. Concrete and Newco has the requisite power and authority to own, lease and
operate its assets and properties and to carry on its business as such business
is currently being conducted.
6.02 AUTHORIZATION; NON-CONTRAVENTION; APPROVALS.
(a) Each of U.S. Concrete and Newco has the full legal right, power and
authority to enter into this Agreement and the ancillary documents and
agreements described herein and to consummate the transactions contemplated
hereby. The execution, delivery and performance of this Agreement has been
approved by the boards of directors of U.S. Concrete and Newco and by U.S.
Concrete, as the sole stockholder of Newco. No additional corporate or
shareholder proceedings on the part of U.S. Concrete or Newco are necessary
to authorize the execution and delivery of this Agreement and the
consummation by U.S. Concrete and Newco of the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by
U.S. Concrete and Newco, and, assuming the due authorization, execution and
delivery by the Company and the Stockholders, constitutes valid and binding
agreements of U.S. Concrete and Newco, enforceable against U.S. Concrete
and Newco in accordance with its terms.
(b) The execution and delivery of this Agreement by U.S. Concrete and
Newco do not, and the consummation by U.S. Concrete and Newco of the
transactions contemplated hereby will not, violate or result in a breach of
any provision of, or constitute a default (or an event which, with notice
or lapse of time or both, would constitute a default) under, or result in
the termination of, or accelerate the performance required by, or result in
a right of termination or acceleration under any of the terms, conditions
or provisions of (i) the Certificate of Incorporation or By-Laws of U.S.
Concrete or Newco, (ii) any Law applicable to either U.S. Concrete or Newco
or any of its properties or assets or (iii) any material agreement, note,
bond, mortgage, indenture, deed of trust, license, franchise, permit,
concession, contract, lease or other instrument, obligation or agreement of
any kind to which U.S. Concrete or Newco is now a party or by which either
U.S. Concrete or Newco or any of its properties or assets may be bound or
affected.
(c) Except for the Merger Filings and such filings as may be required
under federal or state securities Laws, no declaration, filing or
registration with, or notice to, or authorization, consent or approval of,
any Governmental Authority or other person or entity is necessary for the
execution and delivery of this Agreement by U.S. Concrete and Newco or the
consummation by U.S. Concrete and Newco of the transactions contemplated
hereby.
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6.03 U.S. CONCRETE COMMON STOCK. The shares of U.S. Concrete Common
Stock to be issued and delivered to the Stockholders pursuant to the Merger are
duly authorized and, when issued in accordance with the terms of the irrevocable
instruction letter contemplated by Section 3.03, will be validly issued, fully
paid and nonassessable. The issuance of U.S. Concrete Common Stock pursuant to
the Merger will transfer to the Stockholders valid title to such shares of U.S.
Concrete Common Stock, free and clear of all Encumbrances, except for any
Encumbrances created by the Stockholders.
6.04 TAX REORGANIZATION REPRESENTATIONS.
(a) Prior to the Merger, U.S. Concrete will be in control of Newco
within the meaning of Section 368(c) of the Code.
(b) U.S. Concrete has no plan or intention to cause the Surviving
Corporation to issue additional shares of its stock that would result in
U.S. Concrete losing control of the Surviving Corporation within the
meaning of Section 368(c) of the Code.
(c) U.S. Concrete has no plan or intention to reacquire any of its
stock issued in the Merger.
(d) U.S. Concrete has no plan or intention to liquidate the Surviving
Corporation; to merge the Surviving Corporation with or into another
corporation; to sell or otherwise dispose of the stock of the Surviving
Corporation except for transfers of stock to another corporation controlled
by U.S. Concrete; or to cause the Surviving Corporation to sell or
otherwise dispose of any of its assets, except for dispositions made in the
ordinary course of business or transfers of assets to a corporation
controlled by U.S. Concrete.
(e) Following the Closing, U.S. Concrete's intention is that the
Surviving Corporation will continue the historic business of the Company or
use a significant portion of the historic business assets of the Company in
a business, all as required to satisfy the "continuity of business
enterprise" requirement under Section 368 of the Code.
(f) U.S. Concrete does not own, nor has it owned during the past five
years, any shares of the stock of the Company.
(g) Each of U.S. Concrete and Newco is undertaking the Merger for a
bona fide business purpose and not merely for the avoidance of federal
income tax.
(h) Neither U.S. Concrete nor Newco is an investment company as defined
in Section 368(a)(2)(F)(iii) and (iv) of the Code.
(i) As of the Closing Date, the fair market value of the assets of
Newco will exceed the sum of Newco's liabilities plus the amount of other
liabilities, if any, to which Newco's assets are subject.
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6.05 SEC FILINGS; DISCLOSURE. U.S. Concrete has filed with the SEC all
material forms, statements, reports and documents required to be filed by it
prior to the date hereof under each of the 1933 Act and the 1934 Act and the
respective rules and regulations thereunder, (a) all of which, as amended, if
applicable, complied when filed in all material respects with all applicable
requirements of the appropriate Act and the rules and regulations thereunder,
and (b) none of which, as amended, if applicable, contains any untrue statement
of material fact or omits to state a material fact required to be stated therein
or necessary in order to make the statements made therein, in the light of the
circumstances under which they were made and at the time they were made, not
misleading. Since the date of the information provided in the most recent
filing, there has been no material adverse change in the financial condition or
results of operations of U.S. Concrete, taken as a whole.
6.06 NO IMPLIED REPRESENTATIONS. Notwithstanding anything to the contrary
contained in this Agreement, it is the express understanding of U.S. Concrete
and Newco that the Stockholders are not making any representation or warranty
whatsoever, express or implied, other than those representations and warranties
of the Stockholders expressly set forth in this Agreement.
6.07 DISCLOSURE. U.S. Concrete has fully provided the Stockholders or
their representatives with all the information that the Stockholders have
requested in analyzing whether to consummate the Merger. None of the
information so provided nor any representation or warranty of U.S. Concrete
contained in this Agreement contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements herein
or therein, in light of the circumstances under which they were made, not
misleading.
ARTICLE VII
CERTAIN COVENANTS
7.01 RELEASE FROM GUARANTEES. U.S. Concrete shall use its commercially
reasonable efforts to have the Stockholders released from the personal
guarantees of the Company's indebtedness identified in Schedule 7.01 on the
Closing Date and will continue such efforts after the Closing if not released
prior thereto. U.S. Concrete hereby agrees to indemnify and defend the
Stockholders and hold each Stockholder harmless for any amounts that such
Stockholder is required to pay in connection with the enforcement of any
obligations under such personal guarantees after the Closing, including without
limitation any reasonable attorneys' fees and expenses incurred in connection
therewith.
7.02 FUTURE COOPERATION; TAX MATTERS. The Stockholders and U.S. Concrete
shall each deliver or cause to be delivered to the other following the Closing
such additional instruments as the other may reasonably request for the purpose
of fully carrying out this Agreement. The Stockholders shall be responsible for
the payment of all Taxes attributable to all periods prior to and including the
Closing Date, including without limitation the period from the beginning of the
Company's current Tax year through the Closing Date. The Stockholders shall be
responsible for the preparation of all Tax returns covering the period from the
beginning of the Company's current Tax year through the Closing Date, and shall
be responsible for all costs and expenses incurred in connection with the
preparation of such Tax returns. The Surviving Corporation will cooperate with
the Stockholders in their preparation of all Tax returns covering
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the period from the beginning of the Company's current Tax year through
the Closing. In addition, U.S. Concrete will provide the Stockholders with
access to such of its books and records as may be reasonably requested by the
Stockholders in connection with federal, state and local tax matters relating to
periods prior to the Closing. The Stockholders will cooperate and use their
commercially reasonable efforts to encourage the present officers, directors and
employees of the Company to cooperate with U.S. Concrete and the Surviving
Corporation at and after the Closing in furnishing information, evidence,
testimony and other assistance in connection with any actions, proceedings,
arrangements or disputes of any nature with respect to matters pertaining to all
periods prior to the Closing. The party requesting cooperation, information or
actions under this Section 7.02 shall reimburse the other party for all
reasonable out-of-pocket costs and expenses paid or incurred in connection
therewith, which costs and expenses shall not, however, include per diem charges
for employees or allocations of overhead charges.
7.03 EXPENSES. U.S. Concrete will pay the fees, expenses and
disbursements of U.S. Concrete and its agents, representatives, accountants and
counsel incurred in connection with the execution, delivery and performance of
this Agreement and any amendments hereto. The Company (as owned by U.S.
Concrete after Closing) will be responsible for the fees and expenses of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP's audit or audit related procedures in connection with the
transactions contemplated hereby. The Stockholders will pay their fees,
expenses and disbursements and those of their and the Company's agents,
representatives, financial advisors, accountants and counsel incurred in
connection with the execution, delivery and performance of this Agreement and
any amendments hereto and the consummation of the transactions contemplated
hereby, including, without limitation, accounting fees and related expenses
attributable to the final Tax returns of the Company and the Stockholders for
periods through the Closing. The Stockholders will also pay any costs
associated with business brokers or other advisors engaged by the Stockholders
or the Company.
7.04 LEGAL OPINION. At the Closing, the Company and the Stockholders
shall cause their legal counsel, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PLLC, to deliver to U.S.
Concrete a legal opinion in form and substance acceptable to U.S. Concrete.
7.05 EMPLOYMENT AGREEMENTS. Concurrently with the execution of this
Agreement, the Surviving Corporation pursuant to the Fuel Merger Agreement shall
enter into a mutually acceptable Employment Agreements with each of ▇▇▇▇▇▇▇▇▇
and Deneweth (collectively, the "Employment Agreements").
7.06 REPAYMENT OF RELATED PARTY INDEBTEDNESS. Concurrently with the
execution of this Agreement, (a) the Stockholders shall repay to the Company all
amounts outstanding as advances to or receivables from the Stockholders, each of
which advances or receivables is specifically reflected in Schedule 5.07, and
(b) the Company shall repay all amounts outstanding under loans to the Company
from the Stockholders, each of which loans to the Company is specifically
reflected in Schedule 5.06.
7.07 STOCK OPTIONS. U.S. Concrete shall grant nonqualified options to
purchase an aggregate of zero shares of U.S. Concrete Common Stock as of the
Closing Date under U.S. Concrete's 1999 Incentive Plan (the "Incentive Plan") to
certain key employees of the Company (other than the Stockholders), as set forth
on Schedule 7.07 in the amounts listed
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thereon. Schedule 7.07 shall also include the social security number and home
address of each individual listed thereon. Such options shall vest in equal
annual increments for four years, commencing on the first anniversary of the
Closing Date.
7.08 PRE-CLOSING DISTRIBUTIONS. Prior to the Closing, the Company may
have distributed to the Stockholders the cash and other assets set forth on
Schedule 7.08. Any such distributions shall have been authorized by the Board
of Directors of the Company prior to the Closing, and the Company and the
Stockholders shall have used the respective best efforts to complete such
distributions prior to the Closing. Notwithstanding the foregoing, if any such
authorized distributions have not been completed prior to the Closing the
Surviving Corporation shall use reasonable efforts to complete such authorized
distributions after the Closing. The Stockholders' sole recourse against the
Surviving Corporation and U.S. Concrete with respect to this Section 7.08 shall
be to the assets to be distributed.
7.09 WORKING CAPITAL ADJUSTMENT.
(a) As soon as practicable after the Closing Date, U.S. Concrete shall
cause to be prepared and delivered to the Stockholders a consolidated
balance sheet of ▇▇▇▇▇▇▇▇▇ Fuel & Supply Inc., Dencor, Inc. and the Company
(collectively, the "Consolidated Companies") as of the Closing Date (the
"Closing Date Balance Sheet Date"), which has been prepared from the books
and records of the Consolidated Companies in conformity with GAAP (the
"Final Balance Sheet"), and a working capital adjustment schedule (the
"Adjustment Schedule"). The Adjustment Schedule will set forth the
computation of the Adjusted Working Capital Amount. As used in this Section
7.09, capitalized terms not otherwise defined in this Agreement shall have
the following meanings:
"Adjusted Current Assets" means the amount of current assets of the
Consolidated Companies as set forth on the Closing Date Balance Sheet;
"Adjusted Current Liabilities" means the amount of current liabilities
of the Consolidated Companies as set forth on the Closing Date Balance
Sheet less the current portion of Interest-Bearing Debt (if any) as set
forth on the Closing Date Balance Sheet; and
"Adjusted Working Capital Amount" means the amount computed by
subtracting Adjusted Current Liabilities from Adjusted Current Assets as
finally determined in accordance with Section 7.09(c). Adjusted Working
Capital will exclude amounts relating to the 1999 ▇▇▇▇ Portable Plant and
the upgrade of the aggregate section of the Detroit batch plant (bins).
(b) If the Adjusted Working Capital Amount is less than $250,000, then
the Stockholders shall, no later than 15 days after delivery of the
Adjustment Schedule as finally determined in accordance with Section
7.09(c) by U.S. Concrete, pay to the Surviving Corporation the amount by
which $250,000 exceeds the Adjusted Working Capital Amount (the "Adjusted
Working Capital Shortfall"). If the Adjusted Working Capital Amount is
greater than $250,000, then the Surviving Corporation shall, no later than
15 days after delivery of the Adjustment Schedule as finally determined in
accordance with Section 7.09(c), pay to the Stockholders, on a pro rata
basis in
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proportion to their percentage ownership of the Company Common Stock
outstanding immediately prior to the Closing, the amount by which the
Adjusted Working Capital Amount exceeds $250,000 (the "Adjusted Working
Capital Excess").
(c) The Closing Date Balance Sheet and Adjustment Schedule will be
final and binding on the parties hereto unless, within 30 days following
the delivery of the Adjustment Schedule by U.S. Concrete, the Stockholders
notify U.S. Concrete in writing that the Stockholders disagree with all or
any portion of the Closing Date Balance Sheet and/or the Adjustment
Schedule. If the Stockholders and U.S. Concrete cannot mutually resolve any
such disagreement within 30 days after the receipt by U.S. Concrete of the
Stockholders' notice of disagreement, then the Stockholders and U.S.
Concrete shall submit the dispute to a mutually agreeable certified public
accounting firm (the "Accountant") within 20 days after the end of such 30-
day period. If the Stockholders and U.S. Concrete are unable to agree upon
such an accounting firm within such 20-day period, then the Stockholders
and U.S. Concrete shall select a "Big Five" accounting firm by lot (after
excluding any of their respective regular Big Five accounting firms), which
accounting firm shall act as the Accountant. The Stockholders and U.S.
Concrete shall request that the Accountant audit the Closing Date Balance
Sheet and provide a computation of the Adjusted Working Capital Amount
within 30 days thereafter, and this computation will be final and binding
upon the parties hereto and used to compute the Adjusted Working Capital
Shortfall or Adjusted Working Capital Excess, as the case may be, the
payment of any of which shall be made within five days of delivery by U.S.
Concrete of the audited Closing Date Balance Sheet. In the event the
Stockholders and U.S. Concrete submit any unresolved objections to an
Accountant for resolution as provided in this Section 7.09, the
Stockholders and U.S. Concrete will each pay one-half of the fees and
expenses of the Accountant.
7.10 OTHER DOCUMENTS. At the Closing, U.S. Concrete shall receive the
following additional certificates, instruments and documents:
(a) Stock certificates representing all Company Common Stock duly
endorsed in blank by the Stockholders, or accompanied by stock powers duly
executed in blank by the Stockholders, and otherwise in a form acceptable
to U.S. Concrete.
(b) Written resignations of all directors and all officers of
the Company, such resignations to be effective concurrently with the
Closing on the Closing Date.
(c) Releases in form and substance satisfactory to U.S. Concrete
executed by the Stockholders releasing the Company from any liability or
obligation to the Stockholders.
(d) All of the Company's books and records, including, without
limitation, minute books, corporate charters, by-laws, stock records, bank
account records, computer records and all contracts with third parties;
provided, however, that all of the foregoing, other than the minute books,
corporate charters, by-laws and stock records, shall remain at the business
location of Company where they are currently maintained.
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7.11 BENEFIT PLANS.
(a) U.S. Concrete shall not , and shall cause the Surviving
Corporation not to at any time prior to 60 days after the Closing Date,
effectuate a "plant closing" or "mass layoff" as those terms are defined in
the Worker Adjustment and Restraining Notification Act of 1988 ("WARN")
affecting in whole or in part any facility, site of employment, operating
unit or employee of Company or any Company Subsidiary without complying
fully with the requirements of WARN.
(b) All health and welfare benefit plans of U.S. Concrete or the
Surviving Corporation in which the employees of Company or any Company
Subsidiary participate after the Effective Time shall (i) recognize
expenses and claims that were incurred by such employees in the year in
which the Effective Time occurs for purposes of computing deductible
amounts and co-payments under such health and welfare plans as of the
Effective Time, (ii) provide coverage for pre-existing health conditions to
the extent covered under the applicable plans or programs as of the
Effective Time, and (iii) credit any deductibles paid or co-payments made
by employees of Company or any Company Subsidiary prior to the Effective
Time for purposes of paying deductibles or making co-payments pursuant to
the health and welfare benefit plans of U.S. Concrete or the Surviving
Corporation. In addition, employees of the Surviving Corporation and its
subsidiaries shall receive credit for their prior service with Company for
eligibility and vesting purposes and for vacation accrual purposes under
all health and welfare, pension, 401(k) and other benefit programs.
ARTICLE VIII
INDEMNIFICATION
The Stockholders, U.S. Concrete and Newco each make the following covenants:
8.01 General Indemnification by the Stockholders. Subject to Section 8.05 and
Section 8.06, the Stockholders covenant and agree that they will jointly and
severally (without any right of indemnification or contribution from the
Company) indemnify, defend, protect and hold harmless U.S. Concrete, Newco and
the Surviving Corporation, and their respective officers, directors, employees,
stockholders, agents, representatives and Affiliates, at all times from and
after the date of this Agreement from and against all Losses incurred by any of
such indemnified persons and entities as a result of or arising from (a) until
the Expiration Date any breach of the representations and warranties of the
Stockholders set forth herein or in the Schedules attached hereto, (b) any
breach or nonfulfillment of any covenant or agreement on the part of the
Stockholders under this Agreement, (c) all income Taxes payable by the Company
for all periods prior to and including the Closing Date, (d) all transfer Taxes
arising from the transactions contemplated by Section 7.08 of this Agreement,
(e) any litigation listed on Schedule 5.17, or (f) any claim by ▇▇▇▇▇ ▇▇▇▇▇▇ for
fraud, misrepresentation, failure to disclose information or any other basis
whatsoever relating to his redemption of shares of Company by Company on
February 7, 2000.
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8.02 INDEMNIFICATION BY U.S. CONCRETE. Subject to Section 8.06, U.S. Concrete
covenants and agrees that it will indemnify, defend, protect and hold harmless
the Stockholders and their respective agents, representatives, Affiliates,
beneficiaries and heirs and employees at all times from and after the date of
this Agreement from and against all Losses incurred by any of such indemnified
persons as a result of or arising from (a) until the Expiration Date, any breach
of the representations and warranties of U.S. Concrete or Newco set forth herein
or in the Schedules attached hereto or certificates delivered in connection
herewith or (b) any breach or nonfulfillment of any covenant or agreement on the
part of U.S. Concrete or Newco under this Agreement.
8.03 THIRD PERSON CLAIMS. Promptly after any party entitled to
indemnification under Sections 8.01 and 8.02 hereof (hereinafter the
"Indemnified Party") has received notice of or has knowledge of any claim by a
person or entity not a party to this Agreement ("Third Person"), or the
commencement of any action or proceeding by a Third Person, which the
Indemnified Party believes in good faith is an indemnifiable claim under this
Agreement, the Indemnified Party shall give to the party obligated to provide
indemnification pursuant to Sections 8.01 or 8.02 hereof (hereinafter the
"Indemnifying Party") written notice of such claim or the commencement of such
action or proceeding. Such notice shall state the nature and the basis of such
claim and a reasonable estimate of the amount thereof. The Indemnifying Party
shall have the right to defend and settle, at its own expense and by its own
counsel reasonably acceptable to the Indemnified Party, any such matter so long
as the Indemnifying Party pursues the same diligently and in good faith. If the
Indemnifying Party undertakes to defend or settle, it shall promptly notify the
Indemnified Party of its intention to do so, and the Indemnified Party shall
cooperate with the Indemnifying Party and its counsel in all commercially
reasonable respects in the defense thereof and in any settlement thereof. Such
cooperation shall include, but shall not be limited to, furnishing the
Indemnifying Party with any books, records and other information reasonably
requested by the Indemnifying Party and in the Indemnified Party's possession or
control. After the Indemnifying Party has notified the Indemnified Party of its
intention to undertake to defend or settle any such asserted liability, and for
so long as the Indemnifying Party diligently pursues such defense, the
Indemnifying Party shall not be liable for any additional legal expenses
incurred by the Indemnified Party in connection with any defense or settlement
of such asserted liability; provided, however, that the Indemnified Party shall
be entitled, at its expense, to participate in the defense of such asserted
liability and the negotiations of the settlement thereof. The Indemnifying
Party shall not settle any such Third Person claim without the consent of the
Indemnified Party (which consent shall not be unreasonably withheld), unless the
settlement thereof imposes no liability or obligation on, and includes a
complete release from liability of, the Indemnified Party. If the Indemnifying
Party desires to accept a final and complete settlement of any such Third Person
claim and the Indemnified Party refuses to consent to such settlement, then the
Indemnifying Party's liability under this Section with respect to such Third
Person claim shall be limited to the amount so offered in settlement by said
Third Person; provided, however, that notwithstanding the foregoing, the
Indemnified Party shall be entitled to refuse to consent to any such proposed
settlement and the Indemnifying Party's liability hereunder shall not be limited
by the amount of the proposed settlement if such settlement imposes any
liability or obligation on, or does not provide for the complete release of, the
Indemnified Party. If, upon receiving notice, the Indemnifying Party does not
timely undertake to defend such matter to which the Indemnified Party is
entitled to indemnification hereunder, or fails diligently to pursue such
defense, the Indemnified Party may undertake such defense through counsel of its
choice, at the cost and expense of the Indemnifying Party, and the
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Indemnified Party may settle such matter, in its discretion, and the
Indemnifying Party shall reimburse the Indemnified Party for the amount paid in
such settlement and any other liabilities or expenses incurred by the
Indemnified Party in connection therewith.
8.04 NON-THIRD PERSON CLAIMS. In the event that any Indemnified
Party asserts the existence of a claim giving rise to Losses (but excluding
claims resulting from the assertion of liability by Third Persons), such party
shall give written notice to the Indemnifying Party. Such written notice shall
state that it is being given pursuant to this Section 8.04, specify the nature
and amount of the claim asserted, and indicate the date on which such assertion
shall be deemed accepted and the amount of the claim deemed a valid claim (such
date to be established in accordance with the next sentence). If such
Indemnifying Party, within 60 days after the mailing of notice by such
Indemnified Party, shall not give written notice to such Indemnified Party
announcing such Indemnifying Party's intent to contest such assertion of such
Indemnified Party, such assertion shall be deemed accepted and the amount of
such claim shall be deemed a valid claim. In the event, however, that such
Indemnifying Party contests such assertion of a claim by giving such written
notice to the Indemnified Party within said period, then the parties shall act
in good faith to reach agreement regarding such claim. If the parties cannot
resolve such dispute after good faith negotiations with respect thereto within
60 days after the notice provided by the Indemnifying Party, such dispute shall
be submitted to arbitration in accordance with the provisions of Section 13.11.
In the event that arbitration shall arise with respect to any such claim, the
prevailing party shall be entitled to reimbursement of costs and expenses
incurred in connection with such arbitration including reasonable attorneys'
fees.
8.05 INDEMNIFICATION DEDUCTIBLE. Neither U.S. Concrete, Newco nor
the Surviving Corporation shall be entitled to indemnification or other relief
from the Stockholders under the provisions of Section 8.01(a) until such time
as, and only to the extent that, the claims subject to indemnification by such
other party exceed, in the aggregate, $100,760 when combined with the Fuel
Merger Agreement and Dencor Stock Purchase Agreement. Notwithstanding the
foregoing, the limitations set forth in this Section 8.05 shall not apply to
fraudulent misrepresentations or the representation contained in Section 5.27,
the representation contained in Section 5.27, or the obligation to indemnify set
forth in Section 8.01(f).
8.06 LIABILITY LIMITATION. Subject to Section 8.05, the aggregate
obligation of the Stockholders, on the one hand, and of U.S. Concrete and the
Surviving Corporation, on the other hand, for any and all claims arising under
this Agreement, the Fuel Merger Agreement, Dencor Stock Purchase Agreement, or
under Sections 3 or 7 of the Employment Agreements, shall be limited to
$10,076,029. Notwithstanding the foregoing, the limitations set forth in this
Section 8.06 shall not apply to fraudulent misrepresentations or the
representation contained in Section 5.27, or the obligation to indemnify set
forth in Section 8.01(f).
8.07 FORM OF INDEMNITY PAYMENT. Any payment required to be made by
the Stockholders pursuant to this Agreement shall first be made from the cash
portion of the Merger Consideration. In the event of a payment obligation which
exceeds such cash portion, then Stockholders may make payment by delivering to
U.S. Concrete such required number of shares of U.S. Concrete Common Stock
valued at the Average Closing Price.
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ARTICLE IX
NONCOMPETITION COVENANTS
9.01 PROHIBITED ACTIVITIES.
(a) For no additional consideration, each Stockholder will not
for five years following the Closing Date (the "Noncompete Term"),
directly or indirectly, for himself or on behalf of or in conjunction with
any other person, company, partnership, corporation or business or other
entity of whatever nature:
(i) engage, as an officer, director, shareholder, owner,
investor, lender, guarantor, partner, joint venturer, or in a
managerial or advisory capacity, whether as an employee, independent
contractor, consultant or advisor, or as a sales representative, dealer
or distributor, in any Competitive Business within a radius of 100 air
miles of any plant or other operating facility in which the Company was
engaged in business on the date immediately prior to the Closing Date;
(ii) call upon or otherwise solicit any person, who is, at that
time, within the Territory, an employee or consultant of the ▇▇▇▇▇▇▇▇▇
Companies, U.S. Concrete, the Surviving Corporation or any of their
respective subsidiaries, for the purpose or with the intent of enticing
such employee or consultant out of the employ or contract with the
▇▇▇▇▇▇▇▇▇ Companies, the Surviving Corporation or any of their
respective subsidiaries;
(iii) call upon or otherwise solicit any person or entity which is,
at that time, or which has been, within one year prior to that time, a
customer of the ▇▇▇▇▇▇▇▇▇ Companies, U.S. Concrete or the Surviving
Corporation or any of the subsidiaries of such parties within the
Territory for the purpose of soliciting or selling services or products
in a Competitive Business within the Territory; or
(iv) call upon or otherwise solicit any entity which the Company or
U.S. Concrete has called on in connection with the possible acquisition
by either of them of such entity or of which either of them has made an
acquisition analysis, with the knowledge of that entity's status as an
acquisition candidate of U.S. Concrete, for the purpose of (A)
acquiring that entity or arranging the acquisition of that entity by
any person or entity other than U.S. Concrete; and (B) engaging in a
Competitive Business within the Territory.
(b) Notwithstanding the above, Section 9.01(a) shall not be deemed to
prohibit any Stockholder from acquiring, as a passive investor with no
involvement in the operations of the business, not more than three percent
of the capital stock of a Competitive Business whose stock is publicly
traded on a national securities exchange, the NASDAQ National Market or
over-the-counter.
9.02 EQUITABLE RELIEF. Because of the difficulty of measuring
economic losses to U.S. Concrete and the Surviving Corporation as a result of a
breach of the foregoing covenant, because a breach of such covenant would
diminish the value of the assets, properties and
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business of the Company being sold pursuant to this Agreement, and because of
the immediate and irreparable damage that could be caused to U.S. Concrete and
the Surviving Corporation for which it would have no other adequate remedy,
since monetary damages alone may not be an adequate remedy, each Stockholder
agrees that the foregoing covenant may be enforced against such individual by,
without limitation, injunctions, restraining orders and other equitable actions.
9.03 REASONABLE RESTRAINT. It is agreed by the parties hereto that
the foregoing covenants in this ARTICLE IX are necessary in terms of time,
activity and territory to protect U.S. Concrete's and the Surviving
Corporation's interest in the assets, properties and business being acquired
pursuant to the terms of this Agreement and impose a reasonable restraint on the
Stockholders in light of the activities and businesses of U.S. Concrete on the
date of the execution of this Agreement and the current plans of U.S. Concrete.
9.04 SEVERABILITY; REFORMATION. The covenants in this ARTICLE IX
are severable and separate, and the unenforceability of any specific covenant
shall not affect the continuing validity and enforceability of any other
covenant. In the event any court of competent jurisdiction shall determine that
the scope, time or territorial restrictions set forth in this ARTICLE IX are
unreasonable and therefore unenforceable, then it is the intention of the
parties that such restrictions be enforced to the fullest extent which the court
deems reasonable and this Agreement shall thereby be reformed.
9.05 MATERIAL AND INDEPENDENT COVENANT. The Stockholders acknowledge that
their agreements and the covenants set forth in this ARTICLE IX are material
conditions to U.S. Concrete's and Newco's agreements to execute and deliver this
Agreement and to consummate the transactions contemplated hereby and that U.S.
Concrete and Newco would not have entered into this Agreement without such
covenants. All of the covenants in this ARTICLE IX shall be construed as an
agreement independent of any other provision in this Agreement. The existence of
any claim or cause of action by any Stockholder against U.S. Concrete, whether
predicated on this Agreement or otherwise, will not constitute a defense to the
enforcement by U.S. Concrete of any of the covenants of this ARTICLE IX. The
covenants this ARTICLE IX contains will not be affected by any breach of any
other provision hereof by any party hereto.
ARTICLE X
NONDISCLOSURE OF CONFIDENTIAL INFORMATION
10.01 GENERAL. The Stockholders recognize and acknowledge that
they had in the past, currently have, and in the future will have, access to
certain confidential information relating to the businesses of the Company, the
Surviving Corporation and/or U.S. Concrete, including, without limitation, lists
of customers, operational policies, and pricing and cost policies that are, and
following the Closing will be, valuable, special and unique assets of the
Surviving Corporation and U.S. Concrete. Each Stockholder agrees that he or she
will not use or disclose such confidential information to any person, firm,
corporation, association or other entity for any purpose whatsoever, except as
is required in the course of performing his or her duties, if any, to the
Surviving Corporation and/or U.S. Concrete, unless (a) such information becomes
known to the public generally through no fault of the Stockholder or (b)
disclosure is required by Law, provided that prior to disclosing any information
pursuant to this clause (b) the disclosing Stockholder(s) shall give prior
written notice thereof to U.S. Concrete and the Surviving
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Corporation and provide U.S. Concrete with the opportunity to contest such
disclosure. In the event of a breach or threatened breach by any Stockholder of
the provisions of this Section, U.S. Concrete shall be entitled to an injunction
restraining such Stockholder from disclosing, in whole or in part, such
confidential information. Nothing herein shall be construed as prohibiting U.S.
Concrete from pursuing any other available remedy for such breach or threatened
breach, including, without limitation, the recovery of damages.
10.02 EQUITABLE RELIEF. Because of the difficulty of measuring
economic losses to U.S. Concrete and the Surviving Corporation as a result of
the breach of the foregoing covenant, because a breach of such covenant would
diminish the value of the assets, properties and business of the Company being
sold pursuant to this Agreement, and because of the immediate and irreparable
damage that would be caused for which the Surviving Corporation and/or U.S.
Concrete would have no other adequate remedy, since monetary damages alone may
not be an adequate remedy, each Stockholder agrees that the foregoing covenants
may be enforced against such individual by, without limitation, injunctions,
restraining orders and other equitable actions.
ARTICLE XI
INTENDED TAX TREATMENT
11.01 TAX-FREE REORGANIZATION. U.S. Concrete and the Stockholders
are entering into this Agreement with the intention that the Merger qualify as a
tax-free reorganization for federal income tax purposes, except to the extent of
any "boot" received, and neither U.S. Concrete nor the Stockholders will take
any actions that disqualify the Merger for such treatment.
ARTICLE XII
FEDERAL SECURITIES ACT AND CONTRACTUAL RESTRICTIONS ON
U.S. CONCRETE COMMON STOCK
12.01 COMPLIANCE WITH LAW. The Stockholders acknowledge the shares
of U.S. Concrete Common Stock issued in accordance with the terms of this
Agreement (the "Restricted Shares") will not be registered under the 1933 Act
and therefore may not be resold without compliance with the 1933 Act. The
Restricted Shares are being or will be acquired by the Stockholders solely for
their own account, for investment purposes only, and with no present intention
of distributing, selling or otherwise disposing of them in connection with a
distribution. Each Stockholder covenants, warrants and represents that none of
the Restricted Shares held by such Stockholder will be, directly or indirectly,
offered, sold, assigned, pledged, hypothecated, transferred or otherwise
disposed of except after full compliance with all of the applicable provisions
of the 1933 Act and the rules and regulations of the SEC. Certificates
representing the Restricted Shares shall bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE WERE NOT ISSUED IN A TRANSACTION
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("SECURITIES ACT"),
OR ANY APPLICABLE STATE SECURITIES LAWS. THE SHARES REPRESENTED HEREBY
HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED UNLESS
SUCH SALE OR TRANSFER IS COVERED BY AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE
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SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR, IN THE OPINION OF
COUNSEL TO THE ISSUER, IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND SUCH LAWS.
12.02 ECONOMIC RISK; SOPHISTICATION; ACCREDITED INVESTORS. Each
Stockholder is able to bear the economic risk of an investment in the Restricted
Shares and can afford to sustain a total loss of such investment. Each
Stockholder has such knowledge and experience in financial and business matters
that he or she is capable of evaluating the merits and risks of the proposed
investment and therefore has the capacity to protect his or her own interests in
connection with the acquisition of the Restricted Shares pursuant hereto. Each
Stockholder represents to U.S. Concrete and Newco that he or she is an
"accredited investor," as that term is defined in Regulation D under the 1933
Act. Each Stockholder or his or her representatives have had an adequate
opportunity to ask questions of, and receive answers from the appropriate
officers and representatives of U.S. Concrete and Newco concerning, among other
matters, U.S. Concrete, its management, business, operations and financial
condition, its plans for the operation of its business and potential additional
acquisitions, and to obtain any additional information requested by such
Stockholder or his or her representatives concerning such matters.
12.03 RULE 144 REPORTING. With a view to making available the benefits of
certain rules and regulations of the SEC that may permit the resale of U.S.
Concrete Common Stock to the public without registration, for a period of two
years after the Closing, U.S. Concrete agrees to use its commercially reasonable
efforts to:
(a) make and keep public information (as such terms are defined
in Rule 144) regarding U.S. Concrete available;
(b) file with the SEC in a timely manner all reports and other
documents required of U.S. Concrete under the 1933 Act and the 1934 Act;
and
(c) furnish to a Stockholder upon written request a written
statement by U.S. Concrete as to its compliance with the reporting
requirements of Rule 144, the 1933 Act and the 1934 Act, a copy of the most
recent annual or quarterly report of U.S. Concrete, and such other reports
and documents so filed as such Stockholder may reasonably request in
availing himself or herself of any rule or regulation of the SEC allowing
such Stockholder to sell any such shares without registration.
12.04 RESTRICTION ON SALE OR OTHER TRANSFER OF RESTRICTED SHARES.
The Stockholders covenant, warrant and represent that (i) none of the Restricted
Shares will be offered, sold, assigned, pledged, hypothecated, transferred or
otherwise disposed of, directly or indirectly, during the two-year period
commencing on the Closing Date (the "Lockup Period"); (ii) after the Lockup
Period, the Restricted Shares may be offered, sold, assigned, pledged,
hypothecated, transferred or otherwise disposed of directly or indirectly, only
after full compliance with all of the applicable provisions of the 1933 Act and
the rules and regulations of the SEC; (iii) during the one-year period
commencing on the Closing Date, the Stockholders shall not engage in put, call,
short-sale, hedge, straddle, collar or similar
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transactions with respect to any of the Restricted Shares intended to reduce the
Stockholders' risk of owning such Restricted Shares; and (iv) following the one-
year period described in clause (iii) and for the remainder of the Lockup
Period, the Stockholders shall not engage in put, call, short-sale, hedge,
straddle, collar or similar transactions with respect to 50% or more of the
Restricted Shares intended to reduce the Stockholders' risk of owning such
Restricted Shares. Certificates representing the Restricted Shares shall bear
the following legend, which shall reflect the Lockup Period, in addition to the
legend under Section 12.01:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A CONTRACTUAL
RESTRICTION ON TRANSFER THAT EXPIRES ON FEBRUARY 7, 2002 AND MAY NOT BE
OFFERED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, TRANSFERRED OR OTHERWISE
DISPOSED OF DURING THE PERIOD OF SUCH CONTRACTUAL RESTRICTION WITHOUT THE
PRIOR WRITTEN CONSENT OF U.S. CONCRETE, INC.
12.05 PROSPECTUS DELIVERY. Each Stockholder represents and acknowledges that
he or she has been provided with the most current prospectus of U.S. Concrete,
dated May 25, 1999, at least 20 days prior to the date hereof.
12.06 REMOVAL OF LEGENDS. Upon expiration of the Lockup Period, U.S. Concrete
will cause its transfer agent to issue one or more certificates without such
legend as to any Restricted Shares that are no longer subject to the legends set
forth in Section 12.01 and 12.04, respectively; provided, however, that U.S.
Concrete shall not be deemed to be in breach of this Section unless it fails to
cause its transfer agent to issue such certificates after receipt of written
request from a Stockholder.
ARTICLE XIII
MISCELLANEOUS
13.01 SUCCESSORS AND ASSIGNS; RIGHTS OF PARTIES. This Agreement and the
rights of the parties hereunder may not be assigned (except by operation of Law)
and shall be binding upon and shall inure to the benefit of the parties hereto,
the successors of U.S. Concrete, Newco, the Surviving Corporation and the
Company, and the heirs and legal representatives of the Stockholders. Except as
provided in ARTICLE VIII or in this Section 13.01, nothing in this Agreement is
intended or will be construed to confer upon or give any person or entity other
than the parties hereto any rights or remedies under or by reason of this
Agreement or any transaction contemplated hereby.
13.02 ENTIRE AGREEMENT. This Agreement (including the Schedules, exhibits and
annexes attached hereto) and the documents delivered pursuant hereto constitute
the entire agreement and understanding among the Stockholders, the Company,
Newco and U.S. Concrete and supersede any prior agreement and understanding
relating to the subject matter of this Agreement, including, without limitation,
the Letter of Intent. This Agreement may be modified or amended only by a
written instrument executed by the Stockholders, the Company, Newco and U.S.
Concrete. Any right hereunder may be waived only by a written instrument
executed by the party waiving such right.
13.03 COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument. Facsimile
transmission of any signed original document and/or retransmission of any signed
facsimile transmission will be deemed the same as delivery of an
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original. At the request of any party, the parties will confirm facsimile
transmission by signing a duplicate original document.
13.04 BROKERS AND AGENTS. Except for a fee payable to Stockholders' agent,
W.Y. ▇▇▇▇▇▇▇▇, which Stockholders will pay, each party hereto represents and
warrants that it employed no broker or agent in connection with the transactions
contemplated by this Agreement. Each party agrees to indemnify each other party
against all loss, cost, damages or expense arising out of claims for fees or
commissions of brokers employed or alleged to have been employed by such
indemnifying party.
13.05 NOTICES. All notices and communications required or permitted hereunder
shall be in writing and may be given by depositing the same in the United States
mail, addressed to the party to be notified, postage prepaid and registered or
certified with return receipt requested (which will be deemed given three
business days after deposit), or by delivering the same in person to an officer
or agent of such party (which will be deemed given when actually received), as
follows:
If to U.S. Concrete, Newco or the Surviving Corporation, addressed to them
at:
U.S. Concrete, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Secretary
If to the Stockholders, addressed as follows:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Trustee URTA of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Dated October 4, 1995
3279 Wendover
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy (which shall not constitute notice) to:
D. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PLLC
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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or such other address as any party hereto shall specify pursuant to this Section
13.05 from time to time.
13.06 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties set forth in ARTICLE V and ARTICLE VI shall survive the Closing for a
period of two years from the Closing Date (the "Expiration Date"), except that
the representations and warranties set forth in Sections 5.03, 5.11, 5.16 and
5.18 hereof shall survive until such time as the applicable statute of
limitations period has run, which shall be deemed to be the Expiration Date for
Sections 5.03, 5.11, 5.16 and 5.18, as the case may be. The respective parties
shall remain liable after the Expiration Date for breaches of the
representations and warranties set forth in ARTICLE V and ARTICLE VI, provided
such breaches are asserted in good faith by notice in writing to the alleged
breaching party prior to the Expiration Date.
13.07 EXERCISE OF RIGHTS AND REMEDIES; REMEDIES CUMULATIVE. Except as
otherwise provided herein, no delay of or omission in the exercise of any right,
power or remedy accruing to any party as a result of any breach or default by
any other party under this Agreement shall impair any such right, power or
remedy, nor shall it be construed as a waiver of or acquiescence in any such
breach or default, or of any similar breach or default occurring later; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default occurring before or after that waiver. No right, remedy or
election any term of this Agreement gives will be deemed exclusive, but each
will be cumulative with all other rights, remedies and elections available at
law or in equity, subject to the limitations set forth in Sections 8.05 and
8.06.
13.08 REFORMATION AND SEVERABILITY. In case any provision of this Agreement
shall be invalid, illegal or unenforceable, it shall, to the extent possible, be
modified in such manner as to be valid, legal and enforceable, but so as to most
nearly retain the intent of the parties, and if such modification is not
possible, such provision shall be severed from this Agreement, and in either
case, the validity, legality and enforceability of the remaining provisions of
this Agreement shall not in any way be affected or impaired thereby.
13.09 Section Headings; Gender. The Section headings contained in this
Agreement are inserted for convenience of reference only and shall not affect
the meaning or interpretation of this Agreement. Words of the masculine gender
in this Agreement shall be deemed and construed to include correlative words of
the feminine and neuter genders and words of the neuter gender shall be deemed
and construed to include correlative words of the masculine and feminine
genders.
13.10 GOVERNING LAW. This Agreement shall be construed in accordance with the
laws of the State of Delaware (except for its principles governing conflicts of
laws).
13.11 DISPUTE RESOLUTION.
(a) Except with respect to injunctive relief as provided in Section
9.02 and Section 10.02 (which relief may be sought from any court or
administrative agency with jurisdiction with respect thereto), any unresolved
dispute or controversy arising under or in connection with this Agreement
shall be settled exclusively by arbitration in accordance with the rules of
the American Arbitration Association then in effect. The
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arbitration shall be conducted by a retired judge employed by the Chicago,
Illinois office of J.A.M.S./Endispute, Inc. ("JAMS"). The arbitration shall
be held in JAMS' Chicago, Illinois office.
(b) The parties shall obtain from JAMS a list of the retired judges
available to conduct the arbitration. The parties shall use their reasonable
efforts to agree upon a judge to conduct the arbitration. If the parties
cannot agree upon a judge to conduct the arbitration within 10 days after
receipt of the list of available judges, the parties shall ask JAMS to
provide the parties a list of three available judges (the "Judge List").
Within five days after receipt of the Judge List, each party shall strike one
of the names of the available judges from the Judge List and return a copy of
such list to JAMS and the other party. If two different judges are stricken
from the Judge List, the remaining judge shall conduct the arbitration. If
only one judge is stricken from the Judge List, JAMS shall select a judge
from the remaining two judges on the Judge List to conduct the arbitration.
(c) The arbitrator shall not have the authority to add to, detract
from, or modify any provision hereof nor to award punitive damages to any
injured party. The arbitrator shall have the authority to order payment of
damages, reimbursement of costs, including those incurred to enforce this
Agreement, and interest thereon in the event the arbitrator determines that a
material breach of this Agreement has occurred. A decision by the arbitrator
shall be final and binding. Judgment may be entered on the arbitrator's award
in any court having jurisdiction.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
U.S. CONCRETE, INC.
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇, Vice President
CONCRETE XVIII ACQUISITION, INC.
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇, President
▇▇▇▇▇▇▇▇▇ LEASING, INC.
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
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STOCKHOLDERS:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Individually
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Individually and
As Trustee URTA of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Dated October 4, 1995
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EXHIBIT A
ALLOCATION OF CONSIDERATION
Stock Cash
----- ----
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ $316,800* $79,200
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $316,800* $79,200
* 43,697 shares
-40-
