AGREEMENT AND PLAN OF MERGER EXHIBIT 2.1
This Agreement and Plan of Merger (this "Agreement") is entered into as
of January 29, 1998, by and among U.S. Aggregates, Inc., a Delaware
corporation ("Purchaser"), Western Acquisition, Inc., a Delaware corporation
and a wholly-owned indirect subsidiary of Purchaser ("Sub"), and Monroc, Inc.,
a Delaware corporation (the "Company").
RECITALS
A. The Boards of Directors of Purchaser, Sub and the Company each
have determined that the merger of Sub with and into the Company, upon the
terms and subject to the conditions set forth herein, is fair to, and in the
best interests of, their respective corporations and stockholders.
B. Concurrently with the execution of this Agreement, certain
stockholders of the Company have entered into the Voting Agreement attached
hereto as Exhibit A (the "Voting Agreement") which provides that such
stockholders will vote their shares of common stock of the Company in favor of
this Agreement.
C. Purchaser, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with, and
to establish various conditions precedent to, the merger provided for herein.
ARTICLE 1
THE MERGER
1.1. Merger. At the Effective Time, upon the terms and subject to the
conditions hereof, and in accordance with the provisions of the Delaware
General Corporation Law (the "DGCL") and the Certificate of Incorporation and
Bylaws of the Company, Sub shall be merged with and into the Company (the
"Merger"). Following the Merger, the Company shall continue as the surviving
corporation (the "Surviving Corporation") under the name Monroc, Inc. and
shall continue its existence under the laws of the State of Delaware, and the
separate corporate existence of Sub shall cease.
1.2. Consummation of the Merger. As soon as practicable after the
satisfaction or waiver of the conditions set forth in Article 6, the parties
hereto will cause a duly executed and acknowledged certificate of merger, or
certificate of ownership and merger if permitted by the DGCL of the State of
(the "Merger Certificate"), to be filed with the Secretary of State of
Delaware, and the parties hereto shall take all such other and further actions
as may be required by law to make the Merger effective. The Merger shall
become effective on the date on which the Merger Certificate has been duly
filed with the Secretary of State of the State of Delaware (such time is
hereinafter referred to as the "Effective Time"). The closing of the Merger
will take place at 10:00 a.m. on a date to be specified by the Purchaser or
Sub, but shall be no later than the third business day after satisfaction or
waiver of the conditions to closing set forth in Article 6 (the "Closing
Date"), at the offices of LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P., 1000 Xxxxxx
Building, 000 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000, unless another
date or place is agreed to in writing by the parties hereto.
1.3 Effects of the Merger. The Merger shall have the effects set
forth in the DGCL. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time, all the properties, rights,
privileges, powers and franchises of the Company and Sub shall vest in the
Surviving Corporation, and all debts, liabilities and duties of the Company
and Sub shall become the debts, liabilities and duties of the Surviving
Corporation. As of the Effective Time, the Company shall be a wholly owned
subsidiary of Purchaser.
1.4 Certificate of Incorporation and Bylaws. Subject to Section 5.11
(indemnification), the Certificate of Incorporation and the Bylaws of Sub in
effect at the Effective Time shall be the Certificate of Incorporation and
Bylaws of the Surviving Corporation until amended in accordance with
applicable law; provided that Article I of the Certificate of Incorporation of
Sub shall be Amended as of the Effective Time to read "The name of the
corporation is Monroc, Inc."
1.5 Directors and Officers. The directors of Sub at the Effective
Time shall be the directors of the Surviving Corporation and the officers of
the Company at the Effective Time shall be the officers of the Surviving
Corporation, in each case until their respective successors are duly elected
(or appointed in the case of officers) and qualified.
ARTICLE 2
CONVERSION OF SECURITIES
2.1 Conversion of Securities. At the Effective Time, by virtue of the
Merger and without any action on the part of Purchaser, Sub, the Company or
the holders of any of the following securities:
2.1.1 Each share of common stock, par value $.01 per share, of the
Company issued and outstanding immediately prior to the Effective Time (the
"Shares"), other than Shares to be canceled pursuant to Section 2.1.2 and
Dissenting Shares (as hereinafter defined), shall by virtue of the Merger and
without any action on the part of the holder thereof be canceled and
extinguished and be converted into the right to receive $10.771 without
interest thereon (the "Merger Consideration").
2.1.2 Each Share which is issued and outstanding immediately prior
to the Effective Time and held by Purchaser or Sub or any direct or indirect
subsidiary of Purchaser or Sub, or which is held in the treasury of the
Company or any of its subsidiaries, shall be canceled and retired and no
payment shall be made with respect thereto.
2.1.3 Each share of common stock, par value $.01 per share, of Sub
issued and outstanding immediately prior to the Effective Time shall be
converted into and become one validly issued, fully paid and nonassessable
share of common stock, par value $.01 per share (or such other value as may be
determined by Sub), of the Surviving Corporation.
2.2 Employee Stock Options; Outstanding Warrants. Immediately prior
to the Effective Time, each stock option (an "Option") granted under the
Monroc, Inc. 1996 Stock Option Plan and the Monroc, Inc. 1994 Stock Option
Plan (collectively, the "Stock Option Plans") and each outstanding warrant of
the Company (a "Warrant"), whether or not such Option or Warrant is then
exercisable, shall be canceled and each holder of a canceled Option or Warrant
shall be entitled to receive from the Company, in consideration for
cancellation and settlement of such Option or Warrant, a cash payment equal to
the product of (i) the aggregate number of Shares subject to the Option or
Warrant and (ii) the excess, if any, of the Merger Consideration over the
exercise price per Share of such Option or Warrant as set forth in Schedule
3.2 (the "Option Consideration"). Prior to the Closing, the Company will make
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any amendments to the Stock Option Plans, the Warrants and any agreements
related thereto, and will obtain any consents or releases, necessary to effect
the transactions contemplated by this Section 2.2. Any amounts payable
pursuant to this Section 2.2 shall be subject to any required withholding of
taxes and shall be paid without interest.
2.3 Dissenting Shares; Payment For Shares. Notwithstanding anything
in this Agreement to the contrary, Shares outstanding immediately prior to the
Effective Time and held by holders who did not vote in favor of the Merger and
who comply with all of the relevant provisions of Section 262 of the DGCL (the
"Dissenting Shares") shall not be converted into the right to receive the
Merger Consideration, and the holders of such Dissenting Shares shall be
entitled to receive payment of the appraised value of such Shares in
accordance with the provisions of Section 262 unless and until such holders
shall have failed to perfect or shall have effectively withdrawn or lost their
rights to appraisal. If, after the Effective Time, any such holder fails to
perfect or shall have effectively withdrawn or otherwise lost such right, each
of such holder's Shares shall thereupon be deemed to have been converted into
the right to receive, as of the Effective Time, the Merger Consideration
without any interest thereon. The Company shall give Sub prompt notice of any
demands received by the Company for appraisal of Shares, and, prior to the
Effective Time, Sub shall have the right to participate in all negotiations
and proceedings with respect to such demands. Prior to the Effective Time, the
Company shall not, except with the prior written consent of Sub, make any
payment with respect to, or settle or offer to settle, any such demands.
2.4 Payment For Shares. Prior to the Effective Time, Purchaser shall
designate a United States bank or trust company reasonably satisfactory to the
Company to act as Payment Agent in the Merger (the "Payment Agent"). At or
prior to the Effective Time, Purchaser or Sub shall deposit, or cause to be
deposited, in trust with the Payment Agent immediately available funds in an
amount sufficient to make the payments contemplated by Section 2.1.1 on a
timely basis (the "Exchange Fund"). The Payment Agent shall, pursuant to
irrevocable instructions and subject to Section 2.4.3, make payments out of
the Exchange Fund to holders of record who hold Shares immediately prior to
the Effective Time and the Exchange Fund shall not be used for any other
purpose. The Exchange Fund may, as directed by the Surviving Corporation (so
long as such directions do not impair the rights of holders of Shares to
receive the Merger Consideration promptly upon the surrender of their shares
in accordance with this agreement), be invested by the Payment Agent in direct
obligations of the United States of America, obligations for which the full
faith and credit of the United States of America is pledged to provide for the
payment of principal and interest, commercial paper rated of the highest
quality by Xxxxx'x Investors Services, Inc. or Standard & Poor's Corporation,
or certificates of deposit issued by a commercial bank having at least
$1,000,000,000 in assets. Deposit of funds pursuant hereto shall not relieve
Purchaser or the Surviving Corporation of their obligations to make payments
in respect of Shares and Purchaser hereby guarantees the Surviving
Corporation's obligations in respect thereof.
2.4.1 Promptly after the Effective Time, Purchaser and the
Surviving Corporation shall cause the Payment Agent to mail and/or make
available to each record holder, as of the Effective Time, of a certificate or
certificates (the "Certificates") which immediately prior to the Effective
Time represented Shares (other than those cancelled pursuant to Section
2.1.2), a notice and letter of transmittal (which shall specify that delivery
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shall be effected, and risk of loss and title to the Certificates shall pass,
only upon proper delivery of the Certificates to the Payment Agent) and
instructions for use in effecting the surrender of the Certificates in
exchange for the Merger Consideration. As promptly as practicable after
surrender to the Payment Agent of a Certificate, together with such letter of
transmittal duly executed and completed in accordance with the instructions
thereon, the holder of such Certificate shall be paid in exchange therefor
cash in an amount equal to the product of the number of Shares represented by
such Certificate multiplied by the Merger Consideration, and such Certificate
shall be canceled. No interest shall be paid or accrued in respect of the
Merger Consideration. If payment is to be made to a person other than the
person in whose name the certificate surrendered is registered, it shall be a
condition of payment that the Certificate so surrendered shall be properly
endorsed or otherwise in proper form for transfer and that the person
requesting such payment shall pay any transfer or other taxes required by
reason of the payment to a person other than the registered holder of the
surrendered Certificate or establish to the satisfaction of the Surviving
Corporation that such tax has been paid or is not applicable. Until
surrendered in accordance with the provisions of this Section 2.4, each
Certificate (other than Certificates cancelled pursuant to Section 2.1.2 and
Dissenting Shares) shall represent for all purposes solely the right to
receive the Merger Consideration, without any interest thereon..
2.4.2 After the Effective Time, there shall be no transfers of
Shares on the stock transfer books of the Surviving Corporation. If, after
the Effective Time, Certificates are presented to the Payment Agent or the
Surviving Corporation, they shall be canceled and exchanged for cash as
provided in this Section 2.4, subject to applicable law in the case of
Dissenting Shares.
2.4.3 Any portion of the Exchange Fund which remains unclaimed by
the stockholders of the Company on the date six months after the Effective
Time shall be repaid to the Surviving Corporation, upon demand, and any
stockholder of the Company who has not theretofore complied with Section 2.4
shall thereafter look only to the Surviving Corporation for payment of such
stockholder's claim for the Merger Consideration, without any interest
thereon.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Purchaser and Sub as
follows:
3.1 Organization and Qualification. The Company and each subsidiary
of the Company is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, has all
requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted and is duly
qualified to do business as a foreign corporation and in good standing in each
jurisdiction in which the character of its properties or the nature of its
business makes such qualification necessary, except where the failure to be so
organized, existing, qualified or in good standing or have such power and
authority would not have a Material Adverse Effect (as defined in Section
8.12). The Company has delivered or made available to Purchaser complete and
correct copies of its and its subsidiaries' respective certificates of
incorporation and bylaws. All subsidiaries of the Company and their
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respective jurisdictions of incorporation or organization are identified on
Schedule 3.1.
3.2 Capitalization. The authorized capital stock of the Company
consists of 20,000,000 Shares and 1,000,000 shares of Preferred Stock, par
value $.01 per share ("Preferred Shares"). No Preferred Shares are
outstanding. All of the outstanding Shares have been duly authorized and
validly issued and are fully paid and nonassessable and free of preemptive
rights. As of the date hereof, (i) 4,514,200 Shares were issued and
outstanding, (ii) 52 Shares were held in the Company's treasury, (iii) 415,600
Shares were reserved for issuance pursuant to outstanding Options and (iv)
1,501,250 Shares were reserved for issuance upon the exercise of outstanding
Warrants. Except for the rights as set forth in this Section 3.2, there are
not as of the date hereof any outstanding or authorized subscriptions,
options, warrants, calls, rights, commitments or any other agreements of any
character obligating the Company or any of its subsidiaries to issue any
additional Shares or any other shares of capital stock of the Company or any
other securities convertible into or evidencing the right to subscribe for any
Shares. The exercise prices of the outstanding Options and Warrants are set
forth on Schedule 3.2. Except as provided in Section 2.2 or as set forth on
Schedule 3.2, there are no outstanding obligations of the Company or any of
its subsidiaries to repurchase, redeem or otherwise acquire any of their
respective equity securities. Each of the outstanding shares of capital stock
of each of the Company's subsidiaries is duly authorized, validly issued,
fully paid and nonassessable, and is owned, directly or indirectly, by the
Company. The Shares which are the subject of the Voting Agreement represent
approximately 36.6% of the total Shares outstanding as of the date hereof.
3.3 Authority Relative to this Agreement. The Company has all
requisite corporate power and authority to execute and deliver this Agreement
and subject to the terms and conditions hereof, to consummate the transactions
contemplated hereby (other than, with respect to the Merger, the approval and
adoption of this Agreement and the transactions contemplated hereby by the
stockholders of the Company in accordance with the applicable provisions of
the DGCL). The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and validly authorized
by the Board of Directors of the Company and no other corporate proceedings on
the part of the Company are necessary to authorize this Agreement or to
consummate the transactions so contemplated (other than, with respect to the
Merger, the approval and adoption of this Agreement and the transactions
contemplated hereby by the stockholders of the Company in accordance with the
applicable provisions of the DGCL). This Agreement has been duly and validly
executed and delivered by the Company and, assuming this Agreement constitutes
a valid and binding obligation of each of Purchaser and Sub, this Agreement
constitutes a valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms, except that such enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights and the remedy
of specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
3.4 Absence of Certain Changes. Except as disclosed in the Company
Filings (as defined in Section 3.5) or as set forth on Schedule 3.4, since
November 30, 1997 (a) the Company and its subsidiaries have not suffered any
Material Adverse Effect, (b) the Company has not issued any shares of its
capital stock or granted any rights to purchase its capital stock or
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securities convertible into or exchangeable for its capital stock or (c) the
Company has not declared, set aside or made any payments of a dividend or
other distribution in respect of any of its capital stock and has not,
directly or indirectly, redeemed, purchased or otherwise acquired any of its
capital stock.
3.5 Reports; Financial Statements. Since December 31, 1994, the
Company has filed all required forms, reports and documents with the
Securities and Exchange Commission (the "SEC") required to be filed by it
pursuant to the federal securities laws and the SEC rules and regulations
thereunder (the "Company Filings"), all of which have been delivered or made
available to Purchaser and all of which have complied in all material respects
with all applicable requirements of the Securities Act of 1933, as amended
(the "Securities Act"), and the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the rules and regulations promulgated thereunder.
None of the Company Filings, including without limitation any financial
statements or schedules included therein, at the time filed, contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The audited and unaudited consolidated financial statements of the
Company included in such reports have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis (except
as stated in such financial statements) and fairly present the financial
position of the Company and its consolidated subsidiaries as of the dates
thereof and the results of their operations and changes in financial position
for the periods then ended, subject, in the case of the unaudited financial
statements, to normal year-end audit adjustments. Except as reflected,
reserved against or otherwise disclosed in the financial statements of the
Company included in the Company Filings, as otherwise disclosed in the Company
Filings or as disclosed on Schedule 3.5, neither the Company nor any of its
subsidiaries has any material liabilities or obligations (whether accrued,
absolute, contingent or otherwise) that would be required to be reflected on,
or reserved against in, the financial statements of the Company or in the
notes thereto, prepared in accordance with generally accepted accounting
principles consistently applied, except liabilities arising in the ordinary
course of business since November 30, 1997.
3.6 Consents and Approvals; No Violation. Neither the execution and
delivery of this Agreement by the Company nor the consummation by the Company
of the transactions contemplated hereby will (except as disclosed by the
Company on Schedule 3.6):
3.6.1 subject to the obtaining of any requisite approval of the
Company's stockholders, conflict with any provision of the Certificate of
Incorporation or Bylaws of the Company or the charter documents of the
Company's subsidiaries;
3.6.2 require any consent, approval, authorization or permit of,
or filing with or notification to, any court, administrative agency or
commission or other governmental authority domestic or foreign (a
"Governmental Entity"), except (i) in connection with the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of l976, as amended (the "HSR Act"), (ii) pursuant
to the Exchange Act and the rules and regulations thereunder, (iii) pursuant
to state laws relating to takeovers and state securities laws, (iv) the filing
of the Merger Certificate pursuant to the DGCL, or (v) where the failures to
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obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not in the aggregate have a Material Adverse
Effect;
3.6.3 violate any order, writ, injunction, decree, statute, rule
or regulation applicable to the Company or its subsidiaries, except for
violations which, in the aggregate, would not have a Material Adverse Effect;
or
3.6.4 result in a default (or give rise to any right of
termination, cancellation or acceleration) under any of the terms, conditions
or provisions of any note, lease, mortgage, license, agreement, permit or
other instrument or obligations to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries or
any of their respective assets may be bound, except for such defaults (or
rights of termination, cancellation or acceleration) as to which requisite
waivers or consents have been obtained or which, in the aggregate, would not
have a Material Adverse Effect.
3.7 Litigation. Except as set forth on Schedule 3.7 or as disclosed
in the Company Filings filed prior to the date of this Agreement, there are no
actions, suits or proceedings pending or, to the knowledge of the Executive
Officers of the Company, threatened against the Company or any of its
subsidiaries which would have a Material Adverse Effect.
3.8 Compliance with Laws. To the best knowledge of the Executive
Officers of the Company, except as disclosed in the Company Filings or as set
forth on Schedule 3.8, the Company and its subsidiaries have conducted their
businesses in accordance with applicable federal, state and local laws, rules
and regulations, except where the failure to so conduct their businesses would
not in the aggregate have a Material Adverse Effect. The Company and its
subsidiaries hold all permits, licenses, variances, exemptions, orders,
franchises and approvals of all Governmental Entities necessary for the
conduct of their respective businesses as presently conducted, except where
the failure to so hold would not have a Material Adverse Effect (the "Company
Permits"). The Company and its subsidiaries are in compliance with the terms
of the Company Permits, except where the failure to so comply would not have a
Material Adverse Effect.
3.9 Employee Matters. Except as set forth on Schedule 3.9, none of
the Company or any of its subsidiaries is a party to, or bound by, any
collective bargaining agreement, contract or other agreement or understanding
with a labor union or labor organization. There is no unfair labor practice
or labor arbitration proceeding pending or, to the knowledge of the Executive
Officers of the Company, threatened against the Company or any of its
subsidiaries, except for any such proceedings which would not in the aggregate
have a Material Adverse Effect.
3.10 Material Contracts. The Company has delivered or made available
to Purchaser true and complete copies of all written, and written descriptions
of all oral, contracts, agreements, commitments, leases (including with
respect to personal property) and other arrangements to which it or any of its
subsidiaries is a party or by which it or any of its subsidiaries are bound
which require payments to be made in excess of $250,000 per year, other than
agreements listed in any of the other schedules attached hereto (the "Material
Contracts"). Each of the Material Contracts is listed on Schedule 3.10. Each
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of the Material Contracts is valid and in full force and effect except to the
extent it has previously expired in accordance with its terms. Neither the
Company nor any of its subsidiaries is in violation of or in default under
(nor does any circumstance exist which, with notice of the lapse of time or
both, would result in such a violation of or default under) any Material
Contract, other than such violations or defaults which would not have a
Material Adverse Effect. To the knowledge of the Executive Officers of the
Company, none of the other parties to the Material Contracts are in violation
of or in default under (nor does any circumstance exist which, with notice of
the lapse of time or both, would result in such a violation of or default
under) any Material Contract, other than such violations or defaults which
would not have a Material Adverse Effect.
3.11 Taxes.
3.11.1 Each of the Company and its Subsidiaries (as defined
below for purposes of this Section 3.11) has timely filed all material
federal, state, local and foreign Tax Returns (as defined below) required to
be filed by it for tax years prior to the date of this Agreement or has timely
requested extensions and any such request has been granted and has not
expired. Except as set forth on Schedule 3.11, no agreement or arrangement
extending the period for assessment or collection of Taxes of the Company or
any of its Subsidiaries is in effect as of the date hereof. Each of such Tax
Returns is complete and accurate in all material respects. All Taxes (as
defined below) owed by the Company or any of its Subsidiaries on any such Tax
Return have been paid or accrued, except for Taxes being contested in good
faith and for which adequate reserves have been taken. The Company and each
of its Subsidiaries have properly accrued for all Taxes for such periods
subsequent to the periods covered by such Tax Returns. For purposes of this
Section 3.11, the term "Subsidiary" of an entity shall mean any corporation,
80% of the voting power and 80% of the total value of all of the outstanding
capital stock of which are owned directly by such entity.
3.11.2 Except as set forth on Schedule 3.11, there are no
pending or, to the knowledge of the Executive Officers of the Company,
threatened audits or other proceedings by any court, governmental or
regulatory authority or similar person in respect of Taxes or Tax Returns
relating to the Company or any of its Subsidiaries which, if determined
adversely to the Company or any of its Subsidiaries, could reasonably be
expected to have a Material Adverse Effect.
3.11.3 No election under Section 338 of the Internal Revenue
Code of 1986, as amended (the "Code"), has been made or filed by or with
respect to the Company or any of its Subsidiaries. None of the Company or any
of its Subsidiaries has agreed to make any adjustment pursuant to Section
481(a) of the Code by reason of any change in any accounting method, and there
is no application pending with any Taxing Authority (as defined below)
requesting permission for any changes in any accounting method of the Company
or any of its Subsidiaries. None of the assets of the Company or any of its
Subsidiaries is or will be required to be treated as being owned by any person
(other than the Company or its Subsidiaries) pursuant to the provisions of
Section 168(f)(8) of the Internal Revenue Code of 1954, as amended and in
effect immediately before the enactment of the Tax Reform Act of 1986.
3.11.4 Except as set forth on Schedule 3.11, none of the
Company or any of its Subsidiaries is party to, is bound by, or has any
obligation under, any Tax sharing or allocation agreement or similar contract.
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3.11.5 Except as set forth on Schedule 3.11, none of the
Company or any of its Subsidiaries is a party to any contract, agreement, plan
or arrangement that could reasonably be expected to result in the payment of
any amount that would not be deductible by the Company or any of its
Subsidiaries by reason of Section 280G of the Code.
3.11.6 Schedule 3.11 accurately set forth (i) the amount of
all deferred intercompany gains for purposes of Treasury Regulation section
1.1502-13 (including any predecessor regulation) with respect to the Company
and its Subsidiaries and (ii) the amount of any excess loss account with
respect to the stock of each of the Subsidiaries for purposes of Treasury
Regulation section 1.1502-19 (including any predecessor regulation).
3.11.7 For purposes of this Agreement, the term "Taxes" shall
mean all taxes, charges, fees, levies or other similar assessments or
liabilities, including (i) income, gross receipts , ad valorem, premium,
excise, real property, personal property, sales, use, transfer, withholding,
employment, payroll and franchise taxes imposed by the United States or by any
state, local or foreign government or any subdivision, agency or similar
organization thereof, and (ii) any interest, fines, penalties, assessments and
additions in connection therewith. For purposes of this Agreement, the term
"Tax Returns" shall mean any report, return or statement required to be
supplied to a Taxing Authority in connection with Taxes. For purposes of this
Agreement, the term "Taxing Authority" means the Internal Revenue Service (the
"IRS") or any domestic or foreign Governmental Entity responsible for the
administration of Taxes.
3.12 Brokerage Fees and Commissions. Except for those fees and
expenses payable to SBC Warburg Dillon Read Inc. (the "Company Financial
Advisor") (a true and complete copy of whose engagement agreement has been
provided to Purchaser), no person or entity is entitled to receive from the
Company any investment banking, brokerage or finder's fee in connection with
this Agreement or the transactions contemplated hereby based upon arrangements
made by or on behalf of the Company.
3.13 Proxy Statement. None of the information supplied or to be
supplied by the Company for inclusion or incorporation by reference in the
Proxy Statement (as defined herein) will, on the date it is first mailed to
the Company's stockholders or at the time of the Stockholders Meeting (as
defined herein), contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary, in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading, except that no representation is made by the
Company with respect to statements made or incorporated by reference therein
based on information supplied in writing by Purchaser or Sub specifically for
inclusion therein. The Proxy Statement, insofar as it relates to the Company
or its subsidiaries, will comply as to form in all material respects with the
provisions of the Exchange Act and the rules and regulations promulgated
thereunder.
3.14 Employee Benefit Plans; ERISA.
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3.14.1 Schedule 3.14.1 sets forth a complete and accurate list of
(i) all "employee benefit plans," as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") (collectively,
"Benefit Plans"), and (ii) all employment and consulting agreements and all
bonus, incentive compensation, deferred compensation, disability, severance,
stock bonus, stock option, stock purchase or vacation pay agreements, policies
or arrangements which the Company or any of its subsidiaries maintains or has
any liability in respect of and each of which has a cost to the Company or any
of its subsidiaries in excess of $25,000 for any year (collectively, the
"Employee Arrangements").
3.14.2 With respect to each Benefit Plan and Employee
Arrangement, a complete and correct copy of each of the following documents
(if applicable) has been delivered or made available to Purchaser or its
representatives (i) the most recent plan and related trust documents, (ii) the
most recent summary plan description, (iii) the most recent form 5500, (iv)
the most recent determination letter issued by the IRS and (v) the most recent
actuarial report.
3.14.3 Except as set forth on Schedule 3.14, the Company and its
subsidiaries have not during the preceding six years had any obligation or
liability with respect to a multi-employer plan within the meaning of Section
3(37) of ERISA.
3.14.4 Each of the Benefit Plans intended to be qualified under
Section 401(a) of the Code is so qualified.
3.14.5 All contributions or other payments required to have been
made or accrued by the Company or any of its subsidiaries under the terms of
any of Benefit Plan or Employee Arrangement have been made or accrued, except
for those contributions or payments the failure of which to make or accrue
would not have a Material Adverse Effect.
3.14.6 The Benefit Plans and Employee Arrangements have been
maintained and administered in all material respects in accordance with their
terms and applicable laws.
3.14.7 Except as disclosed in the Company Filings or in Schedule
3.14, there are no pending or, to the knowledge of the Executive Officers of
the Company, threatened actions, claims or proceedings (other than routine
claims for benefits) against or involving any Benefit Plan or Employee
Arrangement, except for any of the foregoing which would not have a Material
Adverse Effect.
3.14.8 Except as disclosed in the Company Filings or in Schedule
3.14, the Company or any subsidiary does not maintain or have an obligation to
contribute to retiree life or retiree health plans which provide for
continuing benefits or coverage for current or former officers, directors and
employees of the Company or any of its subsidiaries, except (i) as may be
required under Part 6 of Title I of ERISA or (ii) a medical expenses
reimbursement account plan pursuant to Section 125 of the Code.
3.14.9 Except as disclosed in Schedule 3.14 or in connection with
equity compensation or except as discussed in this Agreement, neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any payment becoming due
to any employee of the Company or any of its subsidiaries, (ii) increase in
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any benefits under any Benefit Plan or Employee Arrangement or (iii) result in
the acceleration of the time of payment of, vesting or other rights with
respect to any benefits under any Benefit Plan or Employee Arrangement.
3.14.10 The Company and its subsidiaries have no liability
under Section 4069 of ERISA by reason of a transfer of an under funded pension
plan.
3.14.11 The Company's liability under any multi-employer plan,
if the Company withdrew in part or in whole on the date hereof, would not
exceed $150,000.
3.15 Opinion of Financial Advisor. The Company has received the
opinion of the Company Financial Advisor to the effect that, as of the date
hereof, the Merger Consideration is fair to the holders of Shares from a
financial point of view, a copy of which has been provided to Purchaser.
3.16 Vote Required. The affirmative vote of the holders of a majority
of the outstanding Shares is the only vote of the holders of any class or
series of the Company's capital stock necessary to approve this Agreement and
the transactions contemplated hereby.
3.17 Intellectual Property. Except as set forth on Schedule 3.17, the
Company and its subsidiaries possess or have adequate rights to use all
material trademark, trade name, patent, service xxxx, brand xxxx, brand names,
industrial designs and copyrights necessary for the operation of their
businesses as currently being conducted, except where the failure to so
possess or have adequate rights would not result in a Material Adverse Effect
(collectively, the "Company Intellectual Property"). To the knowledge of the
Executive Officers of the Company, the use of Company Intellectual Property by
the Company or its subsidiaries does not conflict with, infringe upon, violate
or interfere with or constitute an appropriation of any right, title, interest
or goodwill, including any trademark, trade name, patent, service xxxx, brand
xxxx, brand name, computer program, database, industrial design or copyright
of any other person, except for any such conflict, infringement, violation,
interference, claim, invalidity, abandonment, cancellation or unenforceability
that would not have a Material Adverse Effect.
3.18 Environmental Matters.
3.18.1 For purposes of this Agreement:
(i) "Environmental Law" means any applicable law
regulating or prohibiting releases of Hazardous Materials into any part
of the natural environment, or pertaining to the protection of natural
resources, the environment and public and employee health and safety
from Hazardous Materials including the Comprehensive Environmental
Response, Compensation, and Liability Act ("CERCLA") (42 U.S.C. sec.9601 et
seq.), the Hazardous Materials Transportation Act (49 U.S.C. sec. 1801 et
seq.), the Resource Conservation and Recovery Act (42 U.S.C. sec. 6901 et
seq.), the Clean Water Act (33 U.S.C. sec. 1251 et seq.), the Clean Air Act
(33 U.S.C. sec. 7401 et seq.), the Toxic Substances Control Act (15 U.S.C.
sec. 7401 et seq.), the Federal Insecticide Fungicide, and Rodenticide Act
(7 U.S.C. sec. 136 et seq.), and the Occupational Safety and Health Act (29
U.S.C. sec. 651 et seq.) ("OSHA") and the regulations promulgated pursuant
thereto, and any such applicable state or local statutes and the
regulations promulgated pursuant thereto, as such laws have been and may
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be amended or supplemented through the Closing Date;
(ii) "Hazardous Material" means any substance,
material or waste which is regulated by any public or governmental
authority in the jurisdictions in which the applicable party or its
subsidiaries conducts business, or the United States, including any
material or substance which is defined as a "hazardous waste,"
"hazardous material," "hazardous substance," "extremely hazardous waste"
or "restricted hazardous waste," "contaminant," "toxic waste" or "toxic
substance" under any provision of Environmental Law and shall also
include petroleum, petroleum products, asbestos, polychlorinated
biphenyls and radioactive materials;
(iii) "Release" means any release spill, effluent,
emission, leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching, or migration into the environment, or into or out
of any property; and
(iv) "Remedial Action" means all actions, including
any expenditures, required by a governmental entity or defined under any
Environmental Law, or voluntarily undertaken to (a) clean up, remove,
treat, or in any other way ameliorate or address any Hazardous Materials
or other substance in the environment; (b) prevent the Release or threat
of Release, or minimize the further Release of any Hazardous Material so
it does not endanger or threaten to endanger the public health or
welfare or the environment; (c) perform pre-remedial studies and
investigations or post-remedial monitoring and care pertaining or
relating to a Release; or (d) bring the applicable party into compliance
with any Environmental Law.
3.18.2 Except as set forth on Schedule 3.18, the operations of
the Company and its subsidiaries are in compliance with all Environmental
Laws, except where the failure to so comply would not reasonably be expected
to have a Material Adverse Effect.
3.18.3 Except as set forth on Schedule 3.18, the Company and its
subsidiaries have obtained and maintained all permits required under
applicable Environmental Laws for the continued operations of their respective
business, except such permits the lack of which would not reasonably be
expected to have a Material Adverse Effect.
3.18.4 Except as set forth on Schedule 3.18, the Company and its
subsidiaries (i) are not subject to any material written consent decree,
compliance order or administrative order from any Governmental Entity or other
person respecting any Environmental Law, Remedial Action or any Release of a
Hazardous Material, (ii) have not received written notice under the citizen
suit provision of any Environmental Law or (iii) have not received any written
request for information, notice, demand letter, administrative inquiry or
complaint with respect to any Environmental Law, remedial Action or Release of
a Hazardous Material, except for with respect to (ii) and (iii) those written
notices, requests or other documents the subject matter of which would
reasonably be expected to have a Material Adverse Effect.
3.18.5 Except as set forth on Schedule 3.18, the Company and its
subsidiaries have not received any written communication alleging, with
respect to any such party, the violation of or liability under any
Environmental Law, which violation or liability is outstanding and would
reasonably be expected to have a Material Adverse Effect.
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3.18.6 Except as set forth on Schedule 3.18, neither the Company
nor any of its subsidiaries has any contingent liability in connection with
the Release of any Hazardous Material which would reasonably be expected to
have a Material Adverse Effect.
3.18.7 Except as set forth on Schedule 3.18, the operations of
the Company or its subsidiaries involving the transportation, treatment,
storage or disposal of hazardous waste, as defined and regulated under 40
C.F.R. Parts 260-270 (in effect as of the date of this Agreement) or any state
equivalent are in compliance with all Environmental Laws, except where the
failure to so comply would not reasonably be expected to have a Material
Adverse Effect.
3.18.8 Except as set forth on Schedule 3.18, to the knowledge of
the Company, there is not now nor has there been in the past, on or in any
owned property of the Company or its subsidiaries any of the following: (i)
any underground storage tanks or surface impoundments, (i) any asbestos-
containing materials in friable form or (iii) any polychlorinated biphenyls,
any of which ((i), (ii) or (iii) preceding) could reasonably be expected to
have a Material Adverse Effect.
3.18.9 Except as set forth on Schedule 3.18, no judicial or
administrative proceedings or governmental investigations are pending or, to
the knowledge of the Company, threatened against the Company or any of its
subsidiaries alleging the violation of or seeking to impose liability pursuant
to any Environmental Law.
3.19 Title to Real Property; Leases. Schedule 3.19 sets forth a list
of (a) all real property currently owned by the Company and its subsidiaries
and (b) all leases with respect to real property to which the Company or any
of its subsidiaries is a party (collectively, the "Real Property Leases").
Except as set forth on Schedule 3.19, each of the Company and its subsidiaries
has good and marketable title, or valid leasehold rights in the case of leased
property, to the real property owned or leased by it, including, without
limitation, all sand, gravel, rock and similar mineral rights (and rights of
access thereto) with respect to mineral producing properties, free and clear
of any mortgages, pledges, liens, encumbrances and security interests
(collectively, "Encumbrances"), except for (i) those Encumbrances reflected or
reserved against in the Company's Quarterly Report on Form 10-Q for the
Quarter Ended September 30, 1997, (ii) Encumbrances for taxes, levies,
imposts, assessments or governmental charges of any kind which are not yet
delinquent or which are being contested in good faith by appropriate
proceedings, (iii) liens for mechanics, materialmen, laborers, employees,
suppliers or other liens arising by operation of law for which amounts which
are not yet delinquent or which are being contested in good faith by
appropriate proceedings, (iv) as to leased property, interests of lessors and
Encumbrances affecting the interests of lessors, (v) deposits made in the
ordinary course of business to secure contractual or other obligations of the
Company or any of its subsidiaries, if the underlying obligation is not yet
delinquent, and (vi) liens or defects in title or leasehold rights that,
individually or in the aggregate, would not have a Material Adverse Effect.
Each of the Real Property Leases is valid and in full force and effect, except
to the extent it has previously expired in accordance with its terms. Neither
the Company nor any of its subsidiaries is in violation of or in default
under any Real Property Lease, other than such violations or defaults which
would not have a Material Adverse Effect. Notwithstanding anything in
Schedule 3.19 to the contrary, the Company represents and warrants that there
are no exceptions to the Company's title to its aggregate properties (as such
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properties are identified as aggregate properties on Schedule 3.19) either
noted on Schedule B to any of the title policies attached to Schedule 3.19
with respect to such aggregate properties or otherwise, that would, in any
material way, interfere with the Company's title to its aggregate properties,
its right to access such aggregate properties, or the Company's right to
extract and remove aggregates from such properties in the ordinary course of
the Company's business.
3.20 Board Recommendation. The Board of Directors of the Company, at a
meeting duly called and held, has by the vote of those directors participating
(a) determined that this Agreement and the transaction contemplated hereby are
fair to and in the best interests of the stockholders of the Company and
approved the same by at least a majority vote and (b) resolved to recommend
that the holders of the Shares approve this Agreement and the transactions
contemplated hereby.
3.21 Indebtedness. Except as set forth on Schedule 3.21 or as
otherwise disclosed in the financial statements and notes thereto set forth in
the Company Filings, the Company has no outstanding indebtedness for borrowed
money and is not a party to any agreement providing for the creation,
incurrence or assumption thereof.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER AND SUB
Purchaser and Sub represent and warrant to the Company as follows:
4.1 Organization. Each of Purchaser and Sub is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the requisite corporate power to
carry on its business as it is now being conducted except where the failure to
be so organized, existing and in good standing or to have such power and
authority would not in the aggregate have a material adverse effect on the
results of operations, properties or financial condition of Purchaser and its
subsidiaries taken as a whole or on the ability of Purchaser or Sub to fully
perform their obligations hereunder. Each of Purchaser and Sub has heretofore
made available to the Company an accurate and complete copy of its respective
certificate of incorporation and Bylaws, as currently in effect.
4.2 Authority Relative to This Agreement. Each of Purchaser and Sub
has all requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
respective Boards of Directors of Purchaser and Sub, and the stockholder of
Sub, and no other corporate proceedings on the part of Purchaser or Sub are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by each of Purchaser and Sub and, assuming this Agreement
constitutes a valid and binding obligation of the Company, this Agreement
constitutes a valid and binding agreement of each of Purchaser and Sub,
enforceable against each of Purchaser and Sub in accordance with its terms,
except that such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights and the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought.
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4.3 Consent and Approvals; No Violation. Neither the execution and
delivery of this Agreement by Purchaser and Sub nor the consummation by
Purchaser and Sub of the transactions contemplated hereby will:
4.3.1 conflict with any provision of the respective Certificates
of Incorporation or Bylaws (or other similar governing documents) of Purchaser
or Sub;
4.3.2 require any consent, approval, authorization or permit of,
or filing with or notification to, any Governmental Entity, except (i) in
connection with the HSR Act, (ii) pursuant to the Exchange Act and the rules
and regulations thereunder, (iii) pursuant to state laws relating to takeovers
and state securities laws, if any are applicable, (iv) the filing of the
Merger Certificate pursuant to the applicable law or (v) where the failures to
obtain such consents' approvals, authorizations or permits, or to make such
filings or notifications, would not in the aggregate have any material adverse
effect on the results of operations, properties or financial condition of
Purchaser and its subsidiaries taken as a whole or on the ability of Purchaser
or Sub to fully perform their obligations hereunder;
4.3.3 result in a default (or give rise to any right of
termination, cancellation or acceleration) under any of the terms, conditions
or provisions of any note, lease, mortgage, license, agreement or other
instrument or obligations to which Purchaser or any of its subsidiaries is a
party or by which Purchaser or any of its subsidiaries or any of their
respective assets may be bound, except for such defaults (or rights of
termination, cancellation or acceleration) as to which requisite waivers or
consents have been obtained or which, in the aggregate, would not have any
material adverse effect on the financial condition, business or results of
operations of Purchaser and its subsidiaries taken as a whole or on the
ability of Purchaser or Sub to fully perform their obligations thereunder; or
4.3.4 violate any order, writ, injunction, decree, statute, rule
or regulation applicable to Purchaser or any of its subsidiaries, except for
violations which would not have in the aggregate any material adverse effect
on the financial condition, business or results of operations of Purchaser and
its subsidiaries taken as a whole or on the ability of Purchaser or Sub to
fully perform their obligations hereunder.
4.4 Financing. Purchaser has received binding written commitments
from financially responsible financial institutions to obtain, funds necessary
to consummate this Agreement and the transactions contemplated thereby, and to
pay related fees and expenses, and will make such funds available to Sub.
Purchaser has provided the Company with true and complete copies of all
commitments and agreements from third parties to provide such financing to
Purchaser or to Sub.
4.5 Brokerage Fees and Commissions. No person or entity is entitled
to receive from Purchaser or Sub any investment banking, brokerage or finder's
fee in connection with this Agreement or the transactions contemplated hereby
based upon arrangements made by or on behalf of Purchaser or Sub.
ARTICLE 5
COVENANTS
5.1 Conduct of Business of the Company. Except as contemplated by
this Agreement or as set forth on Schedule 5.1, during the period from the
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date of this Agreement to the Effective Time, the Company and its subsidiaries
shall in all material respects conduct its operations according to its
ordinary and usual course of business and consistent with past practice and
the Company shall use commercially reasonable efforts to preserve intact in
all material respects the business organization of the Company, keep available
the services of its current officers and key employees, and preserve in all
material respects the good will of those having advantageous business
relationships with it and its subsidiaries. Without limiting the generality of
the foregoing, and except as contemplated by this Agreement, as set forth on
Schedule 5.1 or as disclosed in writing to Purchaser on or prior to the date
hereof, prior to the Effective Time, neither the Company nor any of its
subsidiaries, as the case may be, will, without the prior written consent of
Purchaser:
5.1.1 issue, sell or pledge, or authorize or propose the
issuance, sale or pledge of, additional shares of its capital stock or
securities convertible into any such shares, or any rights, warrants or
options to acquire any such shares or other convertible securities, other than
Shares, preferred stock, treasury shares, rights, warrants or options, each as
issuable pursuant to the Options and Warrants;
5.1.2 split, combine, subdivide, reclassify or redeem, or
purchase or otherwise acquire, or propose to do any of the foregoing with
respect to, any of its outstanding securities;
5.1.3 declare or pay any dividend or distribution on the Shares;
5.1.4 subject to the fiduciary duties of the Board of Directors
of the Company (after consultation with and advice from outside legal counsel)
and except pursuant to agreements or arrangements in effect on the date
hereof, purchase or otherwise acquire, sell or otherwise dispose of or
encumber (or enter into any agreement to so purchase or otherwise acquire,
sell or otherwise dispose of or encumber) material properties or material
assets except in the ordinary course of business;
5.1.5 subject to the rights of the stockholders of the Company
under applicable law, adopt any amendments to the Certificate of Incorporation
or Bylaws of the Company;
5.1.6 except as provided in Section 5.12, (i) increase the
compensation of any of its directors, officers or key employees, except
pursuant to the terms of agreements or plans currently in effect in amounts
material to the Company and its subsidiaries taken as a whole; (ii) pay or
agree to pay any pension, retirement allowance or other employee benefit not
required or permitted by any existing plan, agreement or arrangement to any
director, officers or key employee in amounts material to the Company and its
subsidiaries taken as a whole; (iii) commit itself (other than pursuant to any
collective bargaining agreement) to any additional pension, profit-sharing,
bonus, extra compensation, incentive, deferred compensation, stock purchaser,
stock option, stock appreciation right, group insurance, severance pay,
retirement or other employee benefit plan, agreement or arrangement, or to any
employment or consulting agreement with or for the benefit of any director,
officer or key employee, whether past or present in amounts material to the
Company and its subsidiaries taken as a whole; or (iv) except as required by
applicable law, amend in any material respect any such plan, agreement or
arrangement; or
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5.1.7 except in the ordinary course of business and consistent
with past practice, (i) incur any material amount of long-term indebtedness
for borrowed money or issue any material amount of debt securities or assume,
guarantee or endorse the obligations of any other person except for
obligations of wholly owned subsidiaries of the Company; (ii) make any
material loans, advances or capital contributions to, or investments in, any
other person (other than to wholly owned subsidiaries of the Company or
customary loans or advances to employees in amounts not material to the maker
of such loan or advance); (iii) pledge or otherwise encumber shares of capital
stock of the Company or a material portion of the capital stock of any if its
subsidiaries, or (iv) mortgage or pledge any of its material assets, tangible
or intangible, or create or suffer to exist any material lien thereupon;
5.2 Acquisition Proposals. The Company shall not, directly or
indirectly, solicit, carry on discussions with or enter into any agreement
with any corporation, partnership, person or other entity or group (other than
Purchaser or an affiliate or an associate of Purchaser) concerning any merger,
acquisition or similar transaction involving, or the sale of all or
substantially all of the assets or equity securities of, the Company or any of
its subsidiaries or divisions (other than with respect to the Company's
Wyoming operations) (an "Acquisition Proposal"). Notwithstanding the
foregoing, the Company may (i) directly or indirectly, furnish information to
or enter into discussions and negotiations with any person, entity or group
that makes an unsolicited Acquisition Proposal if the Board of Directors of
the Company determines in good faith (after consultation with and advice from
outside legal counsel) that such action is required for the Board of Directors
to comply with its fiduciary duties under applicable law, and (ii) to the
extent applicable, comply with Rule 14e-2 and 14d-9 promulgated under the
Exchange Act with regard to an Acquisition Proposal. The Company will
promptly communicate to Purchaser the terms of any proposal or inquiry which
it may receive in respect of any Acquisition Proposal by any person (other
than Purchaser or any affiliate of Purchaser or their respective directors,
officers, employees, representatives and agents).
5.3. Access to Information.
5.3.1 Subject to applicable law and the agreements set forth in
Section 5.3.2, between the date of this Agreement and the Effective time, the
Company will (i) give Purchaser and its authorized representatives reasonable
access, during regular business hours upon reasonable notice, to all of its
facilities, books and records and key employees, (ii) permit Purchaser to make
such reasonable inspections as it may be required, and (iii) cause its
officers and those of its subsidiaries to furnish Purchaser with such
financial and operating data and other information with respect to the
business and assets of the Company and its subsidiaries as Purchaser may from
time to time reasonably request.
5.3.2 Information obtained by Purchaser pursuant to this Section
5.3 shall be subject to the provisions of the confidentiality agreement
between Purchaser and the Company dated September 26, 1997 (the
"Confidentiality Agreement"), which agreement remains in full force and
effect; except insofar as such provisions would expressly prohibit Purchaser
or Sub from taking any of the actions contemplated by this Agreement.
5.4 Best Efforts. Subject to the fiduciary duties of the Board of
Directors of the Company under applicable law as advised by legal counsel,
each of the parties hereto agrees to use its best efforts to take, or cause to
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be taken, all necessary or appropriate action, and to do, or cause to be done,
all things necessary, proper or advisable under applicable laws and
regulations or otherwise to consummate and make effective the transactions
contemplated by this Agreement including, without limitation, the execution of
any additional instruments necessary to consummate the transactions
contemplated hereby and seeking to lift or reverse any legal restraint imposed
on the consummation of the transactions contemplated by this Agreement. In
case at any time after the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper officers and
directors of each party hereto shall take all such necessary action.
5.5 Stockholders' Meeting. The Company, acting through its Board of
Directors, shall in accordance with applicable law, its Certificate of
Incorporation and Bylaws duly call, give notice of, convene and hold an annual
or special meeting (the "Stockholders Meeting") of its stockholders as soon as
practicable to consider and vote upon approval of this Agreement and the
transactions contemplated hereby. Subject to its fiduciary duties under
applicable laws as advised by legal counsel, the Company will include in the
proxy statement (such proxy statement as amended or supplemented from time to
time being referred to herein as the "Proxy Statement") to be sent to the
Company's stockholders with respect to the Stockholders Meeting the
recommendation of its Board of Directors that its stockholders vote in favor
of the approval and adoption of this Agreement and the transactions
contemplated hereby. At the Stockholders Meeting, all of the Shares
beneficially owned by Purchaser or its affiliates, if any, shall be voted in
favor of approval and adoption of this Agreement and the transactions
contemplated hereby.
5.6 Proxy Statement. The Company will use its commercially reasonable
efforts (i) to obtain and furnish the information required to be included by
it in the Proxy Statement, (ii) to file the Proxy Statement with the SEC,
(iii) after consultation with the other parties hereto, respond as promptly as
is reasonably practicable to any comments made by the SEC with respect to the
Proxy Statement and any preliminary version thereof, and (iv) cause the Proxy
Statement to be mailed to its stockholders at the earliest practicable time
following the date of this Agreement. The information provided and to be
provided by the Company, Purchaser and Sub for use in the Proxy Statement
shall, as of the date of mailing of the Proxy Statement and as of the date of
the Stockholders Meeting, not include any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
5.7 Voting Agreement. Concurrently with the execution of this
Agreement, Building and Construction Capital Partners I, L.P. and Purchaser
shall enter into the Voting Agreement set forth as Exhibit A hereto.
5.8 Fees and Expenses. Each party shall bear its own expenses in
connection with this Agreement and the transactions contemplated hereby;
provided, however, that if the Merger is consummated, the Surviving
Corporation shall assume responsibility for the payment of all Company
expenses in connection with this Agreement and the transactions contemplated
hereby.
5.9 Standstill. In the event of the termination of this Agreement,
neither Purchaser nor its subsidiaries, employees, officers or affiliates
shall, for a period of three years from the date of this Agreement, directly
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or indirectly (unless and until Purchaser shall have received the prior
written invitation or approval of a majority of the Board of Directors of the
Company):
5.9.1 solicit, seek or offer to effect, or effect;
5.9.2 negotiate with or provide any information to the Board of
Directors of the Company, any director or officer of the Company, any
stockholder of the Company, any employee or union or other labor organization
representing employees of the Company or any other person with respect to;
5.9.3 make any statement or proposal, whether written or oral,
either alone or in concert with others, to the Board of Directors of the
Company, any director or officer of the Company or any stockholder of the
Company, any union or other labor organization representing employees of the
Company or any other person with respect to; or
5.9.4 make any public announcement (except as required by law)
or proposal or offer whatsoever (including, but not limited to, any
"solicitation" of "proxies" as such terms are defined or used in Regulation
14A of the Exchange Act) with respect to:
(a) any form of business combination or transaction
involving the Company or any affiliate thereof, including, without limitation,
a merger, tender or exchange offer or liquidation of the Company's assets;
(b) any form of restructuring, recapitalization or similar
transaction with respect to the Company or any affiliate thereof;
(c) any purchase of any securities or assets, or rights or
options to acquire any securities or assets (through purchase, exchange,
conversion or otherwise), of the Company or any affiliate thereof;
(d) any proposal to seek representation on the Board of
Directors of the Company or otherwise to seek to control or influence the
management, Board of Directors or policies of the Company or any affiliate
thereof;
(e) any request or proposal to waive, terminate or amend
the provisions of this Section 5.9; or
(f) any proposal or other statement inconsistent with the
terms of this Section 5.9. or instigate, encourage, joint, act in concert with
or assist (including, but not limited to, providing or assisting in any way in
the obtaining of financing for or acting as a joint bidder or co-bidder for
the Company with) any third party to do any of the foregoing.
5.10 Public Announcements. Purchaser and the Company shall consult
with each other before issuing any press release or otherwise making any
public statements with respect to the transactions contemplated by this
Agreement and shall not issue any such press release or make any such public
statement prior to such consultation, except as may be required by law.
5.11 Indemnification And Insurance.
5.11.1 The Company shall indemnify and hold harmless, and after
the Effective Time the Surviving Corporation shall indemnify and hold
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harmless, each present and former employee, agent, director or officer of the
Company and its subsidiaries (the "Indemnified Parties") from and against any
and all claims arising out of or in connection with activities, including
without limitation, the transactions contemplated by this Agreement, in such
capacity, or on behalf of, or at the request of the Company, its subsidiaries
or affiliates, to the fullest extent permitted under Delaware law (subject to
applicable limitations thereunder) and in addition, to the fullest extent
provided in their respective charters or Bylaws (subject to applicable
limitations thereunder) or any contract or other arrangement in effect at the
date hereof which obligations shall survive the Merger and shall continue in
full force and effect for a period of not less than six years from the
Effective Time; provided, however, that if any claim or claims (a "Claim or
Claims") are asserted or made within such six year period, all rights to
indemnification in respect of any such Claim or Claims shall continue until
disposition of any and all such Claims. Without limiting the foregoing, the
Company, and after the Effective Time the Surviving Corporation, shall advance
expenses incurred with respect to the foregoing, as they are incurred, to the
fullest extent permitted under applicable law, provided that the person on
whose behalf the expenses are advanced provides and undertakes (which need not
be secured) to repay such advances if it is ultimately determined that such
person is not entitled to indemnification.
5.11.2 The Surviving Corporation shall use its best efforts to
cause to be maintained in effect for not less than six years from the
Effective Time the current policies of directors, and officers, liability
insurance maintained by the Company and its subsidiaries (provided that the
Surviving Corporation may substitute therefor policies of at least the same
coverage containing terms and conditions which are no less advantageous so
long as no lapse in coverage occurs as a result of such substitution) with
respect to all matters, including the transactions contemplated hereby,
occurring prior to and including the Effective Time; provided that, in the
event that any Claim or Claims are asserted or made within such six-year
period, such insurance shall be continued in respect of any such Claim or
Claims until final disposition of any and all such Claims; provided further
that the Surviving Corporation shall not be required to pay annual premiums in
excess of 200% of the Company's total current annual premiums for such
insurance and if the Surviving Corporation
is unable to obtain the insurance required by this Section 5.11 it shall
obtain as much comparable insurance as can be obtained for an annual premium
equal to such maximum amount.
5.12 Employee Benefit Plans.
5.12.1 The Purchaser and the Surviving Corporation agree that all
employees of the Company and its subsidiaries which are offered employment
after the Effective Date shall be entitled to the same employee benefits,
plans, programs, arrangements and policies as are available to the employees
of Purchaser and its subsidiaries.
5.12.2 From and after the Effective Time, the Purchaser and the
Surviving Corporation shall assume and honor in accordance with their terms
all existing employment and severance agreements and arrangements set forth
on Schedule 5.12.
5.12.3 If any employee of the Company or any of its subsidiaries
becomes a participant in any employee benefit plan, program or policy of the
Purchaser or the Surviving Corporation, such employee shall be given credit
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for purposes of eligibility and vesting under such plan for all service prior
to the Effective Time with the Company and its subsidiaries, or any
predecessor employer (to the extent such credit was given by the Company).
5.12.4 The Surviving Corporation shall provide professional out
placement services for all officers and salaried employees of the Company or
any subsidiaries employed at the Effective Time and who are terminated within
one year after the Effective Time.
5.12.5 The Purchaser shall reimburse (or cause the Surviving
Corporation to reimburse) any director, officer or employee (or former
director, officer or director) of the Company or any of its subsidiaries for
all costs and expenses, including attorneys' fees, incurred by such person in
successfully enforcing the provisions of this Section 5.
5.13 Real Estate Gains Tax and New Real Property Transfer Tax. The
Purchaser shall pay any State Tax on Gains Derived from Certain Real Property
Transfers and Real Property Transfer Tax and any similar tax in any other
jurisdiction (and any penalties or interest with respect to such taxes)
payable in connection with the Merger or the acquisition of a controlling
interest in the Company by Purchaser or Sub, and the Purchaser shall indemnify
and hold harmless the stockholders of the Company from and against any
liability with respect to such taxes (including any penalties, interest and
professional fees). The Purchaser shall file any returns with respect to such
taxes.
5.14 Employee Stock Ownership Plan. The Company agrees that, in
accordance with its rights under the Monroc, Inc. Employee Stock Ownership
Plan (the "ESOP"), the Company will direct the voting in favor of approval and
adoption of the Merger Agreement of any Shares held in the ESOP with respect
to which any ESOP participant has failed to give the ESOP trustee timely
instructions as to how to vote such Shares.
ARTICLE 6
CONDITIONS TO CLOSING
6.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of each party to effect the Merger are subject to the
satisfaction or waiver, at or prior to the Effective Time, of the following
conditions:
6.1.1 This Agreement shall have been approved and adopted by the
affirmative vote of the stockholders of the Company to the extent required by
applicable law and the Certificate of Incorporation of the Company.
6.1.2 No statute, rule, regulation, decree, order or injunction
shall have been promulgated, enacted, entered or enforced by any United States
federal or state government, governmental agency or authority or court which
remains in effect and prohibits, restrains, enjoins or restricts the
consummation of the Merger.
6.1.3 Any waiting period applicable to the consummation of the
Merger under the HSR Act shall have expired or been terminated.
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6.2 Conditions to Obligations of Purchaser and Sub to Effect the
Merger. Unless waived by Purchaser in writing, the obligations of Purchaser
and Sub to effect the Merger provided for hereby shall be subject to the
satisfaction, at or prior to the Effective Time, of each of the following
conditions:
6.2.1 The representations and warranties of the Company
contained in this Agreement shall be true and correct in all material respects
(except as to the extent such representations and warranties are qualified as
to materiality, in which case such representations and warranties shall be
true and correct in all respects) at and as of the Closing Date as if such
representations and warranties were made at and as of the Closing Date (other
than representations and warranties which address matters only as of a certain
date which shall be true and correct as of such certain date), except as and
to the extent that the facts and conditions upon which such representations
and warranties are based are expressly required or permitted to be changed by
the terms thereof.
6.2.2 The Company shall have performed in all material respects
all agreements and covenants required hereby to be performed by it prior to or
at the Effective Time; provided, however, that neither Purchaser nor Sub shall
be entitled to refuse to consummate the transaction in reliance upon its own
breach or failure to perform.
6.2.3 From the date of this Agreement through the Effective
Time, there shall not have occurred any change in or effect on the business of
the Company or any of its subsidiaries, individually or in the aggregate, that
is materially adverse to the results of operations, properties, financial
condition or prospects of the Company and its subsidiaries taken as a whole,
except for such changes or effects resulting from, or in connection with
general economic, industry-wide or financial market conditions.
6.2.4 Purchaser shall have received a certificate executed on
behalf of the Company by an executive officer of the Company to the effect set
forth in clauses 6.2.1 through 6.2.3.
6.3 Conditions to Obligation of the Company to Effect the Merger.
Unless waived by the Company in writing, the obligations of the Company to
effect the Merger provided for hereby shall be subject to the satisfaction, at
or prior to the Effective Time, of each of the following conditions:
6.3.1 The representations and warranties of Purchaser and Sub
contained in this Agreement shall be true and correct in all material respects
(except as to the extent such representations and warranties are qualified as
to materiality, in which case such representations and warranties shall be
true and correct in all respects) at and as of the Closing Date as if such
representations and warranties were made at and as of the Closing Date (other
than representations and warranties which address matters only as of a certain
date which shall be true and correct as of such certain date), except as and
to the extent that the facts and conditions upon which such representations
and warranties are based are expressly required or permitted to be changed by
the terms thereof.
6.3.2 Purchaser and Sub shall have performed in all material
respects all agreements and covenants required hereby to be performed by them
prior to or at the Effective Time; provided, however, that the Company shall
not be entitled to refuse to consummate the transaction in reliance upon its
own breach or failure to perform.
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6.3.3 The Company shall have received a certificate executed on
behalf of Purchaser and Sub by an executive officer of Purchaser to the effect
set forth in clauses 6.3.1 and 6.3.2.
ARTICLE 7
TERMINATION
7.1 Termination. This Agreement may be terminated and the Merger may
be abandoned at any time notwithstanding approval thereof by the stockholders
of the Company (except as otherwise set forth in this Section 7.1), but prior
to the Effective Time:
7.1.1 by mutual written consent duly authorized by the Boards of
Directors of the Company, Purchaser and Sub;
7.1.2 by Purchaser or the Company if (i) the Effective Time
shall not have occurred on or before August 31, 1998 (provided that the right
to terminate this Agreement under this Section 7.1.2 shall not be available to
any party whose failure to fulfill any obligations under this Agreement has
been the cause of or resulted in the failure of the Effective Time to occur on
or before such date), (ii) the approval of the Company's stockholders required
by Section 6.1.1 shall not have been obtained by August 31, 1998 at a meeting
duly convened therefor or at any adjournment thereof or (iii) any United
States federal or state government, governmental agency or authority or court
shall have issued an order, decree or ruling, or taken any other action,
permanently restraining, enjoining or otherwise prohibiting the Merger (which
the party seeking to terminate this Agreement shall have used its best efforts
to have lifted or reversed) and such order, decree, ruling or other action
shall have become final and non-appealable;
7.1.3 by the Company if an Acquisition Proposal has been made
and the Board of Directors of the Company determines, in the exercise of its
good faith judgment (after consultation with and advice from outside legal
counsel) that such termination is required for the Board of Directors to
comply with its fiduciary duties under applicable law; or
7.1.4 by Purchaser if the Board of Directors of the Company
withdraws or modifies in a manner adverse to Purchaser or Sub its
determination to recommend that the stockholders of the Company approve this
Agreement and the transactions contemplated hereby.
7.2 Effect of Termination.
7.2.1 In the event of the termination of this Agreement pursuant
to Section 7 hereof, this Agreement, except for the provisions of Section
5.3.2 (confidentiality), Section 5.11 (indemnity), Section 5.8 (fees and
expenses), Section 5.9 (standstill) and this Section 7.2, shall forthwith
become void and have no effect, without any liability on the part of any party
or its affiliates, directors, officers or stockholders. Nothing in this
Section 7.2 or in Section 8.3 shall relieve any party to this Agreement of
liability for breach of this Agreement on or prior to the date of termination.
7.2.2 If (i) the Company terminates this Agreement pursuant to
Section 7.1.3, Purchaser terminates this Agreement pursuant to Section 7.1.4
following receipt by the Company of an Acquisition Proposal or either the
Company or Purchaser terminates this Agreement pursuant to clause (ii) of
Section 7.1.2 and immediately prior to any such meeting of the Company's
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stockholders an Acquisition Proposal was pending, and (ii) the Acquisition
Proposal which gave rise to such termination (or any revised transaction based
upon such Acquisition Proposal) is consummated within nine months of such
termination, then the Company (or any successor thereto) shall pay to
Purchaser a fee of $2.0 million (the "Termination Fee") in immediately
available funds within five business days following such termination. Only
one Termination Fee shall be payable pursuant to this Section 7.2.2. If the
Company has paid any amounts to Purchaser pursuant to Section 7.2.3, such
amounts shall be deducted from any Termination Fee owed to Purchaser so that
in no event shall the aggregate payments made by the Company to Purchaser
pursuant to Sections 7.2.2 and 7.2.3 exceed $2.0 million.
7.2.3 If (i) the Company terminates this Agreement pursuant to
Section 7.1.3, Purchaser terminates this Agreement pursuant to Section 7.1.4
following receipt by the Company of an Acquisition Proposal or either the
Company or Purchaser terminates this Agreement pursuant to clause (ii) of
Section 7.1.2 and immediately prior to any such meeting of the Company's
stockholders an Acquisition Proposal was pending, then the Company (or any
successor thereto) shall pay to Purchaser the out-of-pocket fees and expenses
incurred or paid by or on behalf of Purchaser or Sub in connection with the
transactions contemplated by this Agreement, including all fees and expenses
of counsel, commercial banks, accountants, experts and consultants to Parent
and Sub. Payment of Purchaser's expenses pursuant to this Section 7.2.3 shall
be made no later than five business days after delivery to the Company of
notice of demand for payment and a written itemization setting forth in
reasonable detail all of Purchaser's expenses. Notwithstanding the foregoing,
if the Company pays to Purchaser the Termination Fee pursuant to Section
7.2.2, no amounts shall be owed to Purchaser by the Company pursuant to this
Section 7.2.3.
ARTICLE 8
MISCELLANEOUS
8.1 Amendment. To the extent permitted by applicable law, this
Agreement may be amended by action taken by or on behalf of the respective
Boards of Directors of the Company, Purchaser and Sub at any time before or
after adoption of this Agreement by the stockholders of the Company (if
required by applicable law) but, after any such stockholder approval, no
amendment shall be made which decreases the Merger Consideration or changes
the form thereof or which adversely affects the rights of the Company's
stockholders hereunder without the approval of such stockholders. This
Agreement may not be amended except by an instrument in writing signed on
behalf of all the parties.
8.2 Extension; Waiver. At any time prior to the Effective Time, the
parties hereto, by action taken by or on behalf of the respective Boards of
Directors of the Company, Purchaser or Sub, may,
8.2.1 extend the time for the performance of any of the
obligations or other acts of the other parties hereto;
8.2.2 waive any inaccuracies in the representations and
warranties of any other party contained herein or in any document, certificate
or writing delivered pursuant hereto by any other party; or
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8.2.3 waive compliance with any of the agreements or conditions
contained herein. Any agreement on the part of any party to any such extension
or waiver shall be valid only if set forth in an instrument in writing signed
on behalf of such party. The failure of any party to assert any of its rights
hereunder shall not constituent a waiver of such rights.
8.3 Nonsurvival of Representations and Warranties. The
representations and warranties made in Articles 3 and 4 shall not survive
beyond the Effective Time or the termination of this Agreement. This Section
8.3 shall not limit any covenant or agreement of the parties hereto which by
its terms contemplates performance after the Effective Time.
8.4 Entire Agreement; Assignment. This Agreement, together with the
Schedules hereto, (i) constitutes the entire agreement among the parties with
respect to the subject matter hereof and supersedes all other prior agreements
and understandings, both written and oral, other than the Confidentiality
Agreement, among the parties or any of them with respect to the subject matter
hereof and (ii) shall not be assigned by operation of law or otherwise,
provided that Purchaser or Sub may assign any of their rights and obligations
to any wholly owned, direct or indirect subsidiary of Purchaser, but no such
assignment shall relieve Purchaser or Sub of its obligations hereunder.
8.5 Enforcement of the Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties and other
persons entitled to enforce this Agreement pursuant to this Section 8.5 shall
be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
federal or state court located in Delaware (as to which the parties agree to
submit to jurisdiction for the purposes of such action), this being in
addition to any other remedy to which they are entitled at law or in equity.
8.6 Validity. If any provision of this Agreement, or the application
thereof to any person or circumstance, is held invalid or unenforceable, the
remainder of this Agreement, and the application of such provision to other
persons or circumstances, shall not be affected thereby, and to such end, the
provisions of this Agreement are agreed to be severable.
8.7 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have teen duly given upon receipt) by delivery in person, by cable,
telegram, telex or telecopies, or by registered or certified mail (postage
prepaid, return receipt requested) to the respective parties as follows:
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If to Purchaser or Sub: U.S. Aggregates, Inc.
000 Xxxxx Xx Xxxxxx Xxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
with a copy to: Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxxxx, Esq.
If to the Company: Monroc, Inc.
0000 Xxxx Xxxxxx
X.X. Xxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: Xxxxxx X. Xxxxx
with copies to: LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.
000 Xxxxx Xxxx Xxxxxx
0000 Xxxxxx Xxxxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: Xxxxx X. Xxxxxx, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
8.8 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of Delaware regardless of the laws that might
otherwise govern under principles of conflicts of laws applicable thereto.
8.9 Descriptive Headings. The descriptive headings herein are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
8.10 Parties In Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reasons of this
Agreement except for the holders of Employee Options with respect to Section
2.2, the holders of Shares with respect to Articles 1 and 2 and Sections 5.9
and 8.4 (which are intended to be for the benefit of the persons provided for
therein, and may be enforced by such persons).
8.11 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which shall
constitute one and the same agreement.
8.12 Certain Definitions. As used in this Agreement:
"Affiliate" or "Associate" of a person shall have the meaning
ascribed thereto in Rule 1 2b-2 under the Exchange Act.
"Beneficial Ownership" shall have the meaning as used in Rule 13d
under the Exchange Act.
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"Executive Officers" means Xxxxxx X. Xxxxx and L. Xxxxxxx Xxxxx.
"Group" shall have the meaning as used in Rule 13d-5(b) under the
Exchange Act.
"Person" means any individual, corporation, company, group,
partnership. association, governmental body or other entity.
"Subsidiary" of an entity shall means any corporation, a majority
of the outstanding voting securities of which are owned directly or indirectly
by such entity.
"Material Adverse Effect" shall mean any change in or effect on
the business of the Company or any of its subsidiaries that is materially
adverse to the results of operations, properties or financial condition of the
Company and its subsidiaries taken as a whole, except for such changes or
effects resulting from, or in connection with general economic, industry-wide
or financial market conditions.
8.13 Performance By Sub. Purchaser hereby agrees to cause Sub to
comply with its obligations hereunder and to cause Sub to consummate the
Merger as contemplated herein.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized on the day
and year first above written.
PURCHASER
U.S. AGGREGATES, INC.
/s/ Xxxxxxx X. Xxxxx
----------------------------------
Xxxxxxx X. Xxxxx
Its: Chief Financial Officer
SUB
WESTERN ACQUISITION, INC.
/s/ Xxxxxxx X. Xxxxx
----------------------------------
Xxxxxxx X. Xxxxx
Its:
-----------------------------
COMPANY
MONROC, INC.
/s/ Xxxxxx X. Xxxxx
----------------------------------
Xxxxxx X. Xxxxx
Its: President and Chief Executive Officer
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EXHIBIT A
VOTING AGREEMENT
