Exhibit (c)(2)
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STOCK PURCHASE AGREEMENT
BY AND BETWEEN
WESTINGHOUSE ELECTRIC CORPORATION
AND
GTS DURATEK, INC.
REGARDING
THE SALE OF THE SHARES OF
THE SCIENTIFIC ECOLOGY GROUP, INC.
DATED AS OF APRIL 8, 1997
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TABLE OF CONTENTS
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Page
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ARTICLE 1. TERMS OF THE TRANSACTION............................................................... 1
1.1. Sale of the Shares.................................................................. 1
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1.2. Purchase Price...................................................................... 1
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1.3. Payment of Purchase Price........................................................... 1
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ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF SELLER............................................... 1
2.1. Organization; Power and Authority................................................... 2
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2.2. Authorization, Execution and Validity............................................... 2
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2.3. Capitalization...................................................................... 2
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2.3.1 The Company.................................................................... 2
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2.3.2 Company Subsidiaries........................................................... 3
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2.4. Officers and Directors.............................................................. 3
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2.5. Financial Information............................................................... 3
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2.5.1 Balance Sheet.................................................................. 3
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2.5.2 No Undisclosed Liabilities..................................................... 3
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2.6. Absence of Certain Changes.......................................................... 4
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2.7. No Conflict; Seller Consents........................................................ 4
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2.8. Real Property....................................................................... 4
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2.9. Condition of Assets................................................................. 4
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2.10. Insurance.......................................................................... 5
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2.11. Contracts.......................................................................... 5
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2.12. Litigation......................................................................... 7
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2.13. Environmental Laws................................................................. 7
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2.13.1. Compliance..................................................................... 7
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2.13.2. Conditions..................................................................... 8
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2.13.3. Exclusivity.................................................................... 9
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2.14. Other Laws.......................................................................... 9
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2.15. Patents, Trademarks and Similar Rights.............................................. 9
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2.15.1. Intellectual Property.......................................................... 9
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2.15.2. Licenses; Infringement......................................................... 11
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2.15.3. Company Entity Commercial Activities........................................... 12
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2.16. Employees........................................................................... 12
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2.16.1. Employees...................................................................... 12
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2.16.2. Unions......................................................................... 12
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2.16.3. NLRB........................................................................... 12
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2.17. Employee Benefits................................................................... 12
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2.17.1. Company Benefit Plans.......................................................... 12
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2.17.2. Records........................................................................ 14
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2.17.3. Actions........................................................................ 14
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2.17.4. Funding........................................................................ 14
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2.17.5. Acceleration of Benefits....................................................... 14
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2.17.6. Benefit Plans Maintained By Seller............................................. 14
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2.18. Taxes............................................................................... 14
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2.18.1. Returns........................................................................ 14
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2.18.2. Tax Audits..................................................................... 15
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2.18.3. Section 338(h)(10) Election.................................................... 15
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2.19. Brokers............................................................................. 15
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2.20. Approvals........................................................................... 15
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2.21. No Other Pending Transactions....................................................... 15
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2.22. Corporate Books and Records......................................................... 15
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2.23. Business Practices.................................................................. 16
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2.24. Purchase for Investment; Restricted Securities...................................... 16
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ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF BUYER................................................ 17
3.1. Organization; Power and Authority................................................... 17
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3.2. Authorization, Execution and Validity............................................... 17
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3.3. No Conflict; Buyer Consents......................................................... 17
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3.4. Litigation.......................................................................... 17
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3.5. Purchase for Investment; Restricted Securities; Due Diligence....................... 18
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3.6. Available Funds..................................................................... 18
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3.7. Brokers............................................................................. 18
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3.8. GTS Shares.......................................................................... 18
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ARTICLE 4. COVENANTS OF SELLER.................................................................... 19
4.1 Cooperation by Seller........................................................................ 19
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4.2. Pre-Closing Access to Information................................................... 19
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4.3. Conduct of Business................................................................. 19
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4.3.1. Conduct of Business in Ordinary Course......................................... 19
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4.3.2. Buyer's Consent................................................................ 21
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4.3.3. Advanced Systems Division Assets and Liabilities............................... 21
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4.4. Further Assurances.................................................................. 21
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4.5. HSR Act Compliance.................................................................. 22
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4.6. Supplements to Schedules............................................................ 22
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4.7. Intercompany Accounts............................................................... 22
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4.8. Transfer of GTS Shares.............................................................. 22
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4.9. Ventilation System for the SEG(R) Metal Melt Facility; Stormwater
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Separation Project; Trojan Contract................................................. 22
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4.10. Non-Competition.................................................................... 23
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4.10.1. Seller's Covenant.............................................................. 23
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4.10.2. Definitions.................................................................... 23
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4.10.3. Services for Governmental Authorities.......................................... 24
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4.10.4. Injunctive Relief.............................................................. 24
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4.10.5. Severability................................................................... 25
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4.11. Non-Interference Agreement......................................................... 25
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4.12. Confidentiality.................................................................... 25
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4.13. Environmental Matters Covenant..................................................... 25
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4.14. Release for MMT Matters............................................................ 26
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ARTICLE 5. COVENANTS OF BUYER..................................................................... 26
5.1. Cooperation by Buyer................................................................ 26
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5.2. Due Diligence Activities............................................................ 26
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5.3. Further Assurances.................................................................. 26
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5.4. HSR Act Compliance.................................................................. 27
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5.5. Trademarks, Etc. ................................................................... 27
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5.6. Certain Contracts................................................................... 27
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5.7. Insurance Matters................................................................... 27
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5.8. Registration of GTS Shares.......................................................... 28
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ARTICLE 6 MUTUAL COVENANTS........................................................................ 29
6.1. Taxes............................................................................... 29
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6.1.1. Apportionment of Income Taxes Between Pre-Closing and
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Post-Closing Tax Periods....................................................... 29
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6.1.2. Payment of Income Taxes........................................................ 29
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6.1.3. Preparation and Filing of Income Tax Returns................................... 30
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6.1.4. Cooperation.................................................................... 30
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6.1.5. Refund Claims.................................................................. 30
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6.1.6. Tax Sharing Agreements......................................................... 31
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6.1.7. Notice of Audit................................................................ 31
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6.1.8. Audits Controlled by Seller.................................................... 31
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6.1.9. Audits Controlled by Buyer..................................................... 31
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6.1.10. Section 338 Elections.......................................................... 32
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6.1.11. Tax Indemnification............................................................ 32
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6.2. Books and Records................................................................... 33
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6.2.1. Access......................................................................... 33
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6.2.2. Destruction.................................................................... 33
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6.2.3. Confidentiality................................................................ 33
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6.2.4. Assistance..................................................................... 33
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6.3. Notice of Certain Events............................................................ 33
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6.4. IP Matters.......................................................................... 34
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6.5. Certain Consents.................................................................... 34
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6.6. Guarantees.......................................................................... 35
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6.7. Legacy Waste and Equipment.......................................................... 35
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6.8. Working Capital..................................................................... 36
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6.9. Seller Commitment to Services....................................................... 37
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6.9.1. Existing Contracts............................................................. 37
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6.9.2. Additional Commitment.......................................................... 37
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6.10. Xxxxx Flats......................................................................... 38
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ARTICLE 7. CONDITIONS PRECEDENT TO CLOSING........................................................ 38
7.1. Conditions Precedent to Buyer's Obligation.......................................... 38
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7.1.1. Accuracy of Representations and Warranties..................................... 38
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7.1.2. HSR Act........................................................................ 38
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7.1.3. Litigation..................................................................... 38
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7.1.4. Covenants...................................................................... 38
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7.1.5. Deliveries..................................................................... 38
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7.1.6. Required Consents and Approvals................................................ 39
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7.1.7. Material Adverse Change........................................................ 39
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7.1.8. Resignation of Directors....................................................... 39
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7.2. Conditions Precedent to Seller's Obligations........................................ 39
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7.2.1. Truth of Representations and Warranties........................................ 39
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7.2.2. HSR Act........................................................................ 39
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7.2.3. Litigation..................................................................... 39
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7.2.4. Covenants...................................................................... 39
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7.2.5. Deliveries..................................................................... 39
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ARTICLE 8. CLOSING................................................................................ 39
8.1. Time and Place...................................................................... 39
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8.2. Deliveries by Seller................................................................ 40
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8.3. Deliveries by Buyer................................................................. 41
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ARTICLE 9. TERMINATION PRIOR TO CLOSING DATE...................................................... 42
9.1. Termination......................................................................... 42
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9.2. Effect of Termination............................................................... 42
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9.3. Break-Up Fee........................................................................ 42
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ARTICLE 10. INDEMNIFICATION AND PROCEDURES........................................................ 43
10.1. Indemnification by Seller........................................................... 43
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10.2. Indemnification by Buyer............................................................ 45
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10.3. Notice and Resolution of Claims..................................................... 45
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10.3.1. Notice......................................................................... 45
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10.3.2. Right to Assume Defense........................................................ 45
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10.3.3. Failure to Assume Defense...................................................... 46
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10.3.4. Right to Control Cleanup and Access............................................ 46
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10.4. Limits on Indemnification........................................................... 47
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10.4.1. Indemnification Threshold...................................................... 47
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10.4.2. Deductible..................................................................... 47
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10.4.3. Limit of Liability............................................................. 47
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10.4.4. Survival....................................................................... 48
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10.4.5. Actual Knowledge............................................................... 48
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10.4.6. Damages; Mitigation............................................................ 48
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10.4.7. Exclusive Remedy............................................................... 48
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10.5. Indemnity Payments.................................................................. 49
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10.6. Payment and Assignment of Claims.................................................... 49
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10.6.1. Payment........................................................................ 49
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10.6.2. Assignment..................................................................... 49
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10.7. Other Indemnitees................................................................... 49
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10.8. Customer Discounts.................................................................. 49
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10.9. Waiver of Contribution.............................................................. 49
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10.10. Successor Indemnification Obligation................................................ 49
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ARTICLE 11. EMPLOYEE MATTERS...................................................................... 50
11.1. Continuing Benefits and Benefit Plans............................................... 50
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11.2. Rights of Employees................................................................. 50
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ARTICLE 12. MISCELLANEOUS......................................................................... 50
12.1. Severability........................................................................ 50
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12.2. Successors and Assigns.............................................................. 50
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12.3. Counterparts........................................................................ 50
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12.4. Headings............................................................................ 50
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12.5. Waiver.............................................................................. 50
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12.6. No Third-Party Beneficiaries........................................................ 51
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12.7. Sales and Transfer Taxes............................................................ 51
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12.8. Other Expenses...................................................................... 51
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12.9. Notices............................................................................. 51
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12.10. Governing Law; Interpretation....................................................... 52
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12.11. Public Announcements................................................................ 52
12.12. Exclusive Jurisdiction and Consent to Service of Process; Jury Waiver............... 52
12.13. Entire Agreement; Amendment......................................................... 53
12.14. Specific Performance................................................................ 53
ARTICLE 13. DEFINITIONS; INTERPRETATION............................................................... 53
13.1. Definitions......................................................................... 53
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13.2. Certain Interpretive Matters and Limitations........................................ 62
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EXHIBITS
Exhibit A Form of Transition Services Agreement
Exhibit B Form of IP Assignment
Exhibit C Form of IP License Agreement
Exhibit D Form of Opinion of Seller's Counsel
Exhibit E Form of Opinion of Buyer's Counsel
SCHEDULES
Schedule 2.1 Jurisdictions
Schedule 2.3.2 Company Subsidiaries
Schedule 2.4 Officers and Directors
Schedule 2.5.1(a) Balance Sheet
Schedule 2.5.1(b) Description of Matters Reflected in Seller Financial
Statements
Schedule 2.5.2 Certain Liabilities
Schedule 2.6 Certain Changes
Schedule 2.7 Certain Conflicts and Consents of Seller
Schedule 2.8 Owned Real Property
Schedule 2.9(a) Owned Personal Property
Schedule 2.9(b) Certain Assets
Schedule 2.9(c) Seller Provided Services
Schedule 2.10 Insurance Policies
Schedule 2.11(a) Material Contracts
Schedule 2.11(b) Purchase Orders
Schedule 2.11(c) Teaming and Confidentiality Agreements
Schedule 2.11(d) Proposals
Schedule 2.12 Actions and Orders
Schedule 2.13.1(a) Compliance with Environmental Laws
Schedule 2.13.1(b) Environmental Actions
Schedule 2.13.1(c) Environmental Permits
Schedule 2.13.1(d) Environmental Consent Orders or Agreements
Schedule 2.13.2(a) Environmental Documents
Schedule 2.13.2(b) Underground Storage Tanks
Schedule 2.13.2(c) Information Requests
Schedule 2.13.2(d) Recorded Liens
Schedule 2.13.2(f) Transportation of Regulated Substances
Schedule 2.13.2(g) Releases
Schedule 2.14 Compliance with Other Laws; Material Permits
Schedule 2.15.1(a)(i) SEG Intellectual Property
Schedule 2.15.1(a)(ii) Assigned Intellectual Property
Schedule 2.15.1(a)(iii) Retained Intellectual Property
Schedule 2.15.1(b)(i) Exceptions to Intellectual Property
Schedule 2.15.1(b)(ii) Ownership of Assigned IP
Schedule 2.15.1(c) Intellectual Property Claims
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Schedule 2.15.2(a)(i) Intellectual Property Licenses
Schedule 2.15.2(a)(ii) Assigned IP Licenses
Schedule 2.15.2(a)(iii) Intellectual Property Licenses from Third Parties to
any Company Entity
Schedule 2.15.3 Third-Party IP Claims
Schedule 2.16.1 Certain Employees
Schedule 2.16.2 Collective Bargaining Agreements; Labor Disputes
Schedule 2.17.1 Employee Benefit Plans
Schedule 2.17.5 Acceleration of Benefits
Schedule 2.17.6 Benefit Plans Maintained by Seller
Schedule 2.18.1 Tax Returns
Schedule 2.18.2 Tax Audits
Schedule 2.20 Approvals
Schedule 3.3 Certain Conflicts and Consents of Buyer
Schedule 4.3.1 Conduct of Business
Schedule 5.6 Certain Contracts
Schedule 6.6 Certain Guarantees
Schedule 6.7(a) Legacy Waste and Equipment
Schedule 6.7(b) Rates for Legacy Waste Processing
Schedule 7.1.6 Closing Consents
Schedule 10.8 Customer Discounts
Schedule 13.1 Seller's Knowledge
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made as of April 8, 1997, by and between
WESTINGHOUSE ELECTRIC CORPORATION, a Pennsylvania corporation ("Seller"), and
GTS DURATEK, INC., a Delaware corporation ("Buyer").
R E C I T A L S:
A. Seller owns 1,000,000 shares of Common Stock, par value $0.01 per
share (the "Shares"), of The Scientific Ecology Group, Inc., a Tennessee
corporation ("SEG" or the "Company"), which constitutes all of the outstanding
capital stock of the Company.
B. Seller desires to sell, and Buyer desires to purchase, the Shares,
on the terms and subject to the conditions of this Agreement.
NOW, THEREFORE, Buyer and Seller, intending to be legally bound, hereby
agree as follows:
ARTICLE 1. TERMS OF THE TRANSACTION
1.1. Sale of the Shares. On the terms and subject to the conditions of
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this Agreement, at the Closing (as hereinafter defined), Seller shall sell,
assign and transfer to Buyer, and Buyer shall purchase and acquire, all of the
Shares. At the Closing, Seller shall deliver to Buyer stock certificates, with
duly completed stock powers attached, representing the Shares, free and clear of
all Liens (as hereinafter defined).
1.2. Purchase Price. The total consideration for the Shares (the
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"Purchase Price") purchased by Buyer shall be the sum of the following: (a)
Twenty-Eight Million Dollars and no/100 ($28,000,000) ("Cash Payment"), subject
to adjustment pursuant to Section 6.8, and (b) One Hundred Fifty-Six Thousand
Nine Hundred Eight-Six (156,986) shares of Common Stock, par value $0.01, of
Buyer ("GTS Shares"), which shares will be subject to the rights to registration
with the Commission and to listing for trading on the Nasdaq Stock Market after
the Closing (as hereinafter defined) as set forth in Section 5.8 hereof.
1.3. Payment of Purchase Price. At the Closing against delivery of the
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Shares, duly endorsed for transfer with duly completed stock powers attached,
Buyer shall pay, by wire transfer of immediately available funds to bank
accounts designated by Seller, an amount equal to the Cash Payment and Buyer
shall deliver to Seller stock certificates representing the GTS Shares.
ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller makes the representations and warranties to Buyer set forth in this
Article 2 which, unless expressly made as of a specified date prior to the date
of this Agreement, shall be made as of the date hereof. For purposes of the
representations and warranties in Sections 2.5.2, 2.6, 2.8, 2.9, 2.10, 2.11,
2.15 and 2.16, the term "Company" shall mean SEG, excluding the assets and
liabilities of its Advanced Systems Division located in Carlsbad, New Mexico and
any contracts assigned, partially assigned or subcontracted pursuant to the MMT
Agreement.
2.1. Organization; Power and Authority. Each of the Company Entities (as
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hereinafter defined) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of incorporation designated
therefor on Schedule 2.1. Each of the Company Entities is duly qualified as a
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foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required by Law (as hereinafter
defined), whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to be so qualified would not,
individually or in the aggregate, have a Material Adverse Effect (as hereinafter
defined). Each of the Company Entities has all corporate power and authority
needed to own or lease its assets and to carry on its business as it is now
being conducted. True, complete and correct copies of the Charter Documents (as
hereinafter defined) of each of the Company Entities have been delivered or made
available to Buyer and the Charter Documents are in full force and effect. None
of the Company Entities is in violation, breach or default of any of the
provisions of its Charter Documents. Seller is a corporation duly organized,
validly existing and subsisting under the laws of the Commonwealth of
Pennsylvania. Seller has all corporate power and authority needed to execute,
deliver and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby to be consummated by it, including each
instrument, document and agreement contemplated herein to be executed and
delivered by it pursuant to this Agreement.
2.2. Authorization, Execution and Validity. The execution, delivery and
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performance by Seller of this Agreement and the consummation by Seller of the
transactions contemplated hereby to be consummated by it have been duly
authorized by all necessary corporate action. This Agreement has been duly
executed and delivered by Seller, constitutes its valid and binding obligation
and is enforceable against Seller in accordance with its terms, except to the
extent that such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization and similar laws of general application relating to
or affecting creditors' rights generally and general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
2.3. Capitalization.
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2.3.1. The Company. The authorized capital stock of the Company
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consists of 1,000,000 shares of Common Stock, par value $0.01 per share, all of
which are issued and outstanding and owned directly by Seller. All of the
Shares have been duly authorized and
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validly issued and are fully paid and non-assessable. The Shares are not subject
to any Liens, rights of first refusal or restrictions on transfer of any kind,
other than restrictions imposed by applicable securities Laws. As of the date
hereof, Seller is not a party to or bound by any options, calls, contracts or
commitments of any character relating to any of the Shares or any of the capital
stock or debt securities of the Company, including any agreement, instrument or
understanding, order or decree that would restrict the transfer by Seller of the
Shares pursuant to this Agreement. There is no authorized or outstanding option,
subscription, warrant, call, right, commitment or other agreement ("Subscription
Right") obligating the Company to issue or transfer any shares of its capital
stock or any securities convertible into or exercisable for any shares of its
capital stock. The designations, powers, preferences, rights, qualifications,
limitations and restrictions in respect of each class and series of authorized
capital stock of the Company are as set forth in the Charter Documents of the
Company. There are no outstanding contractual obligations (contingent or
otherwise) of the Company that would prohibit or restrict the Company's ability
to declare or pay dividends or to repurchase or redeem the Company's capital
stock.
2.3.2. Company Subsidiaries. The Company owns directly all of the
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outstanding shares of capital stock of each of the Company Subsidiaries (as
hereinafter defined) free and clear of any and all Liens. Schedule 2.3.2
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identifies each Company Subsidiary and, with respect thereto, sets forth (a) the
authorized capital stock, (b) the number of issued and outstanding shares of
capital stock, and (c) the record ownership on the date of this Agreement of the
capital stock. All of the outstanding shares of capital stock of each Company
Subsidiary have been duly authorized and validly issued, are fully paid and non-
assessable, and are not subject to any Liens or any restrictions on transfer of
any kind, other than restrictions imposed by applicable securities Laws. There
is no authorized or outstanding Subscription Right obligating any Company Entity
to sell or transfer any of the capital stock of any Company Subsidiary or any
securities convertible into or exercisable for any shares of capital stock.
2.4. Officers and Directors. Schedule 2.4 sets forth a list, as of the
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date hereof, of all corporate officers and directors of the Company Entities.
2.5. Financial Information.
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2.5.1. Balance Sheet. Attached hereto as Schedule 2.5.1(a) is the
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consolidated audited balance sheet of the Company as of December 31, 1996 (the
"Balance Sheet"), which is accurate in all material respects as of the date
thereof and was prepared in accordance with GAAP (as hereinafter defined)
consistently applied, except for those items which consistent with past practice
have been recorded by or reflected in the financial statements of Seller on
behalf of the Company Entities and are generally described on Schedule 2.5.1(b).
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2.5.2. No Undisclosed Liabilities. Except as disclosed on Schedule
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2.5.2, no Company Entity has any liabilities or obligations, whether accrued,
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contingent, absolute, determined, determinable or otherwise of any nature
whatsoever, except (a) liabilities which are
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reflected or reserved against on the Balance Sheet or which are not required to
be reflected or reserved against on the Balance Sheet in accordance with GAAP,
(b) those liabilities which consistent with past practice have been recorded by
or reflected in the financial statements of Seller on behalf of the Company
Entities, and (c) current liabilities incurred in the ordinary course of
business consistent with past practice since December 31, 1996.
2.6. Absence of Certain Changes. Except as disclosed on Schedule 2.6 or
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on the Balance Sheet, except for the processing and disposal of Legacy Waste and
Equipment (as hereinafter defined), and except for modification of the
ventilation system for the SEG(R) Metal Melt facility, since December 31, 1996,
(i) there has been no action, event or occurrence that, individually or in the
aggregate, has had or is reasonably likely to have a Material Adverse Effect or
(ii) no Company Entity has incurred any material liability or obligation,
indirect, direct or contingent, not in the ordinary course of business nor
entered into any material transaction or agreement not in the ordinary course of
business.
2.7. No Conflict; Seller Consents. Except as set forth in Schedule 2.7
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or as would not have, individually or in the aggregate, a Material Adverse
Effect or a material adverse effect on the ability of Seller to consummate the
transactions contemplated by this Agreement, the execution, delivery and
performance by Seller of this Agreement and the consummation of the transactions
contemplated hereby by Seller, will not (a) violate or be in conflict with any
Law, (b) violate or be in conflict with any Charter Document of Seller or of any
Company Entity, (c) require any Consent (as hereinafter defined) from any
Governmental Authority (as hereinafter defined) or any third party, except (i)
to comply with the HSR Act (as hereinafter defined) and (ii) for actions
required to be taken by Buyer or any of its Affiliates (as hereinafter defined),
(d) constitute a default under, or result in a breach of, any Material Contract
(as hereinafter defined), material License (as hereinafter defined), material
Permit (as hereinafter defined) or Order (as hereinafter defined) of any Company
Entity, give rise to any right of termination, cancellation or acceleration
thereof or result in any material adverse change to the terms thereof, or (e)
result in the creation of any Lien (other than Permitted Liens (as hereinafter
defined)) on any assets of any Company Entity or in the acceleration of any
indebtedness or other obligation of any Company Entity.
2.8. Real Property. Schedule 2.8 lists all of the real properties owned
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by the Company Entities (collectively, the "Owned Real Property"). Except (a) as
set forth on Schedule 2.8 and (b) for Permitted Liens, the Company Entity
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identified on Schedule 2.8 opposite each such Owned Real Property has insurable
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title to the Owned Real Property identified on Schedule 2.8, free and clear of
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all Liens, and good and marketable title to the Owned Real Property located at
0000 Xxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx identified on Schedule 2.8. The Liens
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listed on Schedule 2.8 and the Permitted Liens that exist on the Owned Real
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Property do not in any material way adversely affect the use of the Owned Real
Property by the Company Entities as being used as of the date hereof.
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2.9. Condition of Assets. (a) Except (i) as set forth on Schedule
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2.9(a) and (ii) for Permitted Liens, a Company Entity has good and marketable
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title to all personal property reflected on the Balance Sheet and all personal
property acquired by the Company Entities since the date thereof, other than
property that has been disposed of in the ordinary course of business or in the
processing and disposal of Legacy Waste and Equipment (as hereinafter defined).
(b) Except as set forth on Schedule 2.9(b), the personal
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property owned or leased by the Company Entities and the improvements and
structures located on the Owned Real Property and the fixtures and appurtenances
thereto have been reasonably maintained in the ordinary course of business, are
in good working order and repair, reasonable wear and tear excepted and are
sufficient for the operations of the business of the Company Entities in the
ordinary course of business.
(c) The property or assets owned or leased by the Company
Entities, or which they otherwise have the right to use, including but not
limited to Intellectual Property (as hereinafter defined), together with (i) the
assets related to the Seller Provided Services provided by Seller or a
Continuing Affiliate (as hereinafter defined) to the Company Entities, including
the assets and services described on Schedule 2.9(c) (the "Seller Provided
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Services"), (ii) the Real Property (as hereinafter defined), Assigned
Intellectual Property (as hereinafter defined) and other assets identified on
Schedule 4.3.1 to be transferred by Seller to a Company Entity, and (iii) the
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Retained Intellectual Property (as hereinafter defined) to be licensed by Seller
to a Company Entity constitute all of the material property and assets held for
use or used in connection with the business of the Company Entities and
constitute all assets, properties, licenses and other agreements necessary for
the continued conduct of the Company's business after the Closing in
substantially the same manner as conducted prior to the Closing.
(d) EXCEPT AS OTHERWISE SPECIFICALLY SET FORTH IN THIS
AGREEMENT, SELLER MAKES NO EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR ANY OTHER REPRESENTATION
OR WARRANTY AS TO THE CONDITION OR OPERATION OF ANY ASSETS.
2.10. Insurance. All material insurance policies providing coverage for
---------
the 1997 policy year owned or held by Seller or any Company Entity that cover
any Company Entity are reflected in Schedule 2.10, are in full force and effect,
-------------
the Seller or the Company Entity, as applicable, are in compliance with all
requirements and provisions thereof, all premiums with respect thereto have been
paid to the extent due, no notice of cancellation or termination has been
received with respect to any such policy (other than policies that have been
replaced or are intended to be replaced prior to the expiration thereof by
policies providing substantially the same coverage) and no such policies are
subject to any retroactive rate or audit adjustments or coinsurance
arrangements. Each Company Entity is either self-insured or insured by
recognized, financially sound and reputable institutions with policies in such
amounts and with such deductibles and covering such risks as are generally
deemed adequate and customary for their
-5-
respective businesses. Except as set forth on Schedule 2.10, during the past
-----------
five (5) years, no Company Entity has been denied any insurance coverage which
it has sought or for which it has applied. True and correct copies of all
insurance policies that cover any Company Entity have been provided or made
available to Buyer. Seller has provided or made available to Buyer a list of all
insurance claims in excess of $10,000 per single claim made during the past
three (3) years by any Company Entity or by Seller relating to the business of
any Company Entity.
2.11. Contracts. (a) Except for (V) Benefit Plans (as hereinafter
---------
defined), (W) Licenses, (X) purchase orders (whether or not such purchase orders
have been acknowledged by the counterparty and whether or not such purchase
orders have been executed by the issuing entity), invoices, confirmations and
similar documents with, to or from customers or suppliers, (Y) teaming,
confidentiality, secrecy or similar agreements, and (Z) Contracts (as
hereinafter defined) relating solely to obligations between Company Entities,
Schedule 2.11(a) sets forth as of the date hereof (unless with respect to any
----------------
Contract another date is specified therefor in Schedule 2.11(a)) all of the
----------------
following Contracts to which any Company Entity is a party or by which any of
their assets are bound: (i) Contracts pertaining to the borrowing of money;
(ii) Contracts creating Liens (other than Permitted Liens); (iii) Contracts
creating Guarantees (as hereinafter defined), other than any Guarantee by a
Company Entity of the obligations of another Company Entity not in excess of
$100,000 in the aggregate in respect of any one-year period; (iv) Contracts
relating to material employment or consulting services that are not terminable
by any Company Entity upon thirty (30) days or less notice without payment of a
premium or penalty; (v) other written Contracts between any Company Entity and
any director, officer or employee thereof; (vi) Contracts relating to capital
expenditures in excess of $100,000; (vii) Real Property Leases (as hereinafter
defined); (viii) executory Contracts for the purchase or sale of real property
or any business or line of business or for any merger or consolidation; (ix)
Leases (as hereinafter defined) of personal property involving annual rental
obligations exceeding $100,000; (x) joint venture or partnership agreements that
are in writing or, other than the matters described in Section 2.11(c),
agreements that are in writing and limit the freedom of any Company Entity to
compete in any business or with any Entity or in any geographic area; (xi)
Contracts to or from customers or suppliers, including any Governmental
Authority, involving orders with a cumulative value as of the date hereof in
excess of $500,000; (xii) Government Contracts; (xiii) executory Contracts that
involve the settlement of any Action (as hereinafter defined) in an amount in
excess of $100,000, and (xiv) any contractual obligation or liability involving
annual payments in excess of $250,000 that are not terminable by the applicable
Company Entity upon thirty (30) days or less notice without the payment of a
premium or penalty. Except as set forth on Schedule 2.11(a), as of the date
----------------
hereof, each Material Contract is valid and binding on the Company Entity that
is a party thereto, and, to Seller's Knowledge, the other party or parties
thereto, and is in full force and effect in all material respects. As of the
date hereof and except as set forth on Schedule 2.11(a), there has been no
----------------
material breach or default of any Material Contract by any Company Entity or, to
Seller's Knowledge, any other Entity which has not been cured or waived. As of
the date hereof, there have been no violations by any Company Entity of any Law
relating to any Material Contract which has not been cured or waived. Except as
set forth on Schedule 2.11(a), neither Seller nor Company has received any
----------------
-6-
written default notice or written threat thereof with respect to any Material
Contract which has not been cured or waived, and to the Seller's Knowledge,
neither Seller nor the Company has any reasonable basis for suspecting that any
such action will be forthcoming, other than any defaults that individually or in
the aggregate would not have a Material Adverse Effect. Except as set forth in
Schedule 2.11(a), during the past two (2) years, no Company Entity has received
----------------
written notice of any stop work order, suspension of work order or written
threat of debarment or suspension with respect to any Material Contract. Except
as set forth in Schedule 2.11(a), no claim, credit, request for equitable
----------------
adjustment or request for contract funding, price or schedule adjustment or
change order between any Company Entity and any of its suppliers or between any
Company Entity and any of its customers is pending or, to Seller's Knowledge,
threatened, except for any of the foregoing matters arising in the ordinary
course of business. None of the Material Contracts require the consent or
approval of any party thereto or the consent or approval of any third party in
connection with the consummation of the transactions contemplated hereby. The
Seller steam generator litigation settlement agreements referenced in Section
10.8. are the only agreements of Seller pursuant to which the Company must offer
a customer discount.
(b) Attached hereto as Schedule 2.11(b) is an accurate and
----------------
complete list of all purchase orders received from customers and accepted by any
Company Entity on or prior to the date hereof that on their face reflect orders
for services to be performed by any Company Entity after the date hereof with a
value in excess of $250,000. Except as to the accuracy and completeness of the
listing set forth as Schedule 2.11(b), SELLER MAKES NO EXPRESS OR IMPLIED
----------------
REPRESENTATION OR WARRANTY CONCERNING PURCHASE ORDERS.
(c) Attached hereto as Schedule 2.11(c) is an accurate and
----------------
complete list of all written teaming, confidentiality and secrecy agreements to
which any Company Entity is a signatory that exist as of the date hereof. Except
as to the accuracy and completeness of the listing set forth as Schedule
--------
2.11(c), SELLER MAKES NO EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY
-------
CONCERNING TEAMING, CONFIDENTIALITY AND SECRECY AGREEMENTS.
(d) Attached hereto as Schedule 2.11(d) is an accurate and
----------------
complete list of all Proposals made by any Company Entity on or prior to the
date hereof that on their face reflect services to be performed (if awarded) by
any Company Entity after the date hereof with a value in excess of $500,000.
Except as to the accuracy and completeness of the listing set forth as Schedule
--------
2.11(d), SELLER MAKES NO EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY
-------
CONCERNING PROPOSALS.
2.12. Litigation. Except as set forth on Schedule 2.12, Schedule
---------- ------------- --------
2.13.1(c), Schedule 2.13.3, Schedule 2.15.1(c) or Schedule 2.18.2, as of the
--------- --------------- ------------------ ---------------
date hereof, there is no Action by any Entity that is pending or, to Seller's
Knowledge, threatened by or against any Company Entity or any of their
properties or assets or that challenges or seeks to prevent, alter or delay any
of the transactions contemplated by this Agreement. Except as set forth on
Schedule 2.12, or Schedule 2.13.1(b), no Company Entity is subject to any Order
------------- ------------------
(as hereinafter defined) in effect as of the
-7-
date hereof. As of the date hereof, there is no Action by any Entity that is
pending or, to the Seller's Knowledge, threatened by or against Seller or any of
its properties or assets that challenges or seeks to prevent, alter or delay any
of the transactions contemplated by this Agreement and there is no Order against
Seller having any such effect.
2.13. Environmental Laws.
------------------
2.13.1. Compliance. (a) Except as set forth on Schedule 2.13.1(a)
---------- ------------------
or as would not have, individually or in the aggregate, a Material Adverse
Effect, on or before the date hereof, no Company Entity has failed to comply
with (i) any Environmental Law, (ii) any Permit required by any Environmental
Law or (iii) any consent agreement or Order to which it is a party or by which
it is bound pursuant to any Environmental Law, to the extent any of the
foregoing results in an Agency Action or an action by a private party against
Buyer or a Company Entity, however, in no way shall the foregoing include
Cleanup which shall be governed by Section 2.13.2(g).
(b) Except as set forth on Schedule 2.13.1(b), as of the date
------------------
hereof, no Company Entity is subject to any outstanding or, to Seller's
Knowledge, threatened Actions related to any Environmental Law.
(c) The Company Entities have secured and maintain all material
Permits required by Environmental Laws for the use of the Owned Real Property
and of the property subject to the Real Property Leases, and for the operations
as presently conducted by the Company Entities on such properties. Schedule
--------
2.13.1(c) sets forth, as of the date hereof, all such material Permits required
---------
for the Company Entities by Environmental Laws. Seller has informed Buyer of
all Permits required by any Environmental Law that to Seller's Knowledge are not
readily transferable to Buyer.
(d) Schedule 2.13.1(d) sets forth all consent agreements and
------------------
Orders in effect as of the date hereof to which any Company Entity is a party or
by which it is bound pursuant to any Environmental Law.
2.13.2. Conditions. (a) Seller and Company Entities have provided
----------
to, or otherwise made available for inspection by Buyer, all audit reports,
regulatory inspection reports, environmental assessment reports and remedial
action plans prepared by or on behalf of the Seller or any Company Entity within
three years prior to the date hereof, and that are in their possession, and that
relate to material Environmental Conditions. Schedule 2.13.2(a) sets forth all
------------------
such documents.
(b) Except as set forth on Schedule 2.13.2(b), no underground
------------------
storage tanks were installed, upgraded, maintained or removed during the period
any Company Entity or the Seller owned, leased, or otherwise occupied the
Company Properties. To the best of Seller's Knowledge, no other underground
storage tanks are or were located on the Company Properties.
-8-
(c) Except as set forth on Schedule 2.13.2(c), neither Seller
------------------
nor any Company Entity has received any information request under any
Environmental Law, or any notice, letter, citation, order, warning, complaint,
inquiry, information request or demand that (i) any Company Entity has violated
or is in violation of any Environmental Law; (ii) there has been a Release at or
from the Company Properties, or any property where wastes or products have been
sent by any Company Entity; or (iii) it may be or is liable, in whole or in part
for the costs of Cleanup or responding to a Release at or from the Company
Properties, or any property where the Company Entities' wastes or products have
been sent.
(d) Except as set forth on Schedule 2.13.2(d), the Company
------------------
Properties are not subject to any recorded Lien or to Seller's Knowledge any
other Lien in favor of any Governmental Authority or other party for any
liability, costs, or damages incurred by such Governmental Authority or other
party in response to a Release.
(e) None of the Company Properties is listed on the National
Priorities List or the CERCLIS, promulgated or published pursuant to CERCLA.
(f) Except as set forth on Schedule 2.13.2(f) to Seller's
------------------
Knowledge no location to which the Company Entities transported or caused to be
transported any Regulated Substances for storage, recycling, treatment or
disposal is or has been the subject of any Cleanup or remediation pursuant to
any Environmental Law.
(g) Except as set forth on Schedule 2.13.2(g), as of the date
------------------
hereof, there has been no Release into the soil, groundwater, surface water or
sediments, of Regulated Substances by any Company Entity onto any of the Company
Properties which would require Cleanup under Environmental Laws.
2.13.3. Exclusivity. Except as set forth in this Section 2.13.,
-----------
Seller makes no express or implied representation or warranty in this Agreement
concerning environmental matters.
2.14. Other Laws. Except as set forth on Schedule 2.14, to Seller's
---------- -------------
Knowledge, the business and operations of each Company Entity are being and have
been conducted in compliance with all Other Laws and neither the Seller nor any
Company Entity has received written notice from any Governmental Authority that
the business or operations of a Company Entity are not in compliance with any
Other Laws. Except as set forth on Schedule 2.14, to Seller's Knowledge, no
-------------
Company Entity has failed to (a) comply in all material respects with an Order
or (b) maintain in effect and comply in all material respects with any material
Permit required by any Other Law. No Action is pending or, to Seller's
Knowledge, threatened to revoke or limit any such material Permit.
-9-
2.15. Patents, Trademarks and Similar Rights.
--------------------------------------
2.15.1. Intellectual Property. (a) Schedule 2.15.1(a) sets forth a
--------------------- ------------------
true and complete list of all patents, patent applications, trade names, assumed
names, brand names, registered trademarks, registered copyrights and registered
service marks, and applications therefor, that are owned or used (other than
pursuant to Licenses, or licenses of Computer Software, or licenses pertaining
to Seller Provided Services (as hereinafter defined), or licenses pertaining to
services provided by other Entities) by the Company Entities, which Schedule is
divided into (i) Schedule 2.15.1(a)(i), which identifies any such Intellectual
----------------------
Property owned by a Company Entity, (ii) Schedule 2.15.1(a)(ii), which
----------------------
identifies any such Intellectual Property which is Assigned Intellectual
Property (as hereinafter defined), and (iii) Schedule 2.15.1(a)(iii), which
-----------------------
identifies any such Intellectual Property which is Retained Intellectual
Property (as hereinafter defined).
(b)(i) Representations and Warranties regarding Intellectual
-----------------------------------------------------
Property owned by a Company Entity. With respect to the Intellectual Property
----------------------------------
set forth in Schedule 2.15.1(a)(i), except as set forth in Schedules
--------------------- ---------
2.15.1(b)(i) and 2.15.2(a)(i), Seller represents and warrants that (1) to
------------ ------------
Seller's Knowledge, a Company Entity owns all right, title and interest in and
to the Intellectual Property, free and clear of all Liens (except Permitted
Liens) and the transactions contemplated hereby will not alter or impair such
rights; and (2) to Seller's Knowledge, the Intellectual Property is valid,
subsisting and enforceable; and (3) to Seller's Knowledge there is no pending or
threatened Action, including without limitation before the United States Patent
and Trademark Office or, to Seller's Knowledge, any foreign patent office (other
than in regard to patents that are in or awaiting prosecution, or going through
a post grant opposition period), that in any way calls into question the
ownership, validity, enforceability or use of any of the Intellectual Property,
which consists of Company Entity owned and issued, U.S. or foreign patents or
registered trade names or registered trademarks or registered copyrights, and
(4) to Seller's Knowledge there is no third party infringement or
misappropriation of any of the Intellectual Property, which consists of Company
Entity owned and issued U.S. or foreign patents or registered trade names or
registered trademarks or registered copyrights of which Seller has obtained
proof thereof and to Seller's Knowledge no Company Entity has a reasonable basis
to claim such infringement.
(ii) Representations and Warranties regarding Assigned
-------------------------------------------------
Intellectual Property. With respect to the Assigned Intellectual Property set
---------------------
forth in Schedule 2.15.1(a)(ii), except as set forth in Schedules 2.15.1(b)(ii)
---------------------- -----------------------
and 2.15.2(a)(ii), Seller represents and warrants that (1) Seller owns all
-------------
right, title and interest in and to the Assigned Intellectual Property, free and
clear of all Liens (except Permitted Liens) and the transactions contemplated
hereby will not alter or impair Seller's ability to convey such title; and (2)
to Seller's Knowledge, the Assigned Intellectual Property is valid, subsisting
and enforceable; (3) to Seller's Knowledge there is no pending or threatened
Action, including without limitation before the United States Patent and
Trademark Office or, to Seller's Knowledge, any foreign patent office (other
than in regard to patents that are in or awaiting prosecution, or going through
a post grant opposition period), that
-10-
in any way calls into question the ownership, validity, enforceability or use of
any of the Assigned Intellectual Property which consists of assigned, issued
U.S. or foreign patents or registered tradenames or registered trademarks or
registered copyrights, and (4) to Seller's Knowledge, there is no third party
infringement or misappropriation of any of the Assigned Intellectual Property
which consists of assigned, issued U.S. or foreign patents or registered
tradenames or registered trademarks or registered copyrights of which Seller has
obtained proof, and to Seller's Knowledge, no Company Entity has a reasonable
basis to claim such infringement.
(iii) Representations and Warranties regarding Retained
-------------------------------------------------
Intellectual Property. With respect to the Retained Intellectual Property set
---------------------
forth in Schedule 2.15.1(a)(iii), Seller represents and warrants that (1) Seller
-----------------------
has the necessary right, title, interest and authority to grant the licenses of
the Retained Intellectual Property as contemplated by Exhibit C hereto; and (2)
Seller has no claim against any Company Entity for past royalties, damages or
any other past fees or expenses arising from the use of any of the Retained
Intellectual Property.
(c) Except for Seller Provided Services, claims of third parties
not within Seller's Knowledge, and except as set forth in Schedules 2.15.1(b)(i)
--------------------------
and 2.15.1(b)(ii), each Company Entity has sufficient rights to the Intellectual
-------------
Property to conduct its business as currently conducted, which rights are, to
Seller's Knowledge, free of claims of third parties, except where the absence of
such Intellectual Property or the existence of such third party claims would not
have a Material Adverse Effect.
2.15.2. Licenses; Infringement. (a) (i) Seller represents and
----------------------
warrants that, except for implied licenses in connection with the sale of
equipment by a Company Entity, Schedule 2.15.2(a)(i) sets forth a true and
---------------------
complete list of all licenses to any third party of any of the Intellectual
Property owned by a Company Entity. Except as set forth in Schedule
--------
2.15.2(a)(i), to Seller's Knowledge, all such licenses are valid, subsisting,
------------
enforceable and in full force and effect, and to Seller's Knowledge, there is no
pending or threatened Action or any breach, deficiency or refusal of performance
to or against Seller or any Company Entity regarding the validity of any such
license, or any provision thereof. (ii) Seller represents and warrants that,
except for implied licenses in connection with the sale of equipment, Schedule
--------
2.15.2(a)(ii) sets forth a true and complete list, as of the date hereof, of all
-------------
licenses of any of the Assigned Intellectual Property to any third party.
Except as set forth in Schedule 2.15.2(a)(ii), to Seller's Knowledge, all such
----------------------
licenses are valid, subsisting, enforceable and in full force and effect and
there is no pending or threatened Action or any breach, deficiency or refusal of
performance to or against Seller or any Company Entity regarding the validity of
any such license, or any provision thereof. (iii) Seller represents and
warrants that, except for implied licenses in connection with the sale of
equipment to a Company Entity and licenses to Computer Software, Schedule
--------
2.15.2(a)(iii) sets forth a true and complete list of all licenses from any
--------------
third party of any of the Intellectual Property used by a Company Entity.
Except as set forth in Schedule 2.15.2(a)(iii), to Seller's Knowledge, all such
-----------------------
licenses are valid, subsisting, enforceable and in full force and effect, and to
Seller's Knowledge, there is no pending or threatened Action or any
-11-
breach, deficiency or refusal of performance to or against the third party to
that license regarding the validity of any such license, or any provision
thereof.
(b) All licenses for Intellectual Property that are included in
the Schedules referred to in this Section 2.15.2. are collectively referred to
in this Agreement as "Licenses." Except for implied licenses in connection with
the sale of equipment, licenses with regard to Retained Intellectual Property
and licenses to Computer Software, Seller represents and warrants that the
Licenses represent all of the licenses between a Company Entity and any other
Entity with respect to the Intellectual Property currently owned or used by any
Company Entity. Except as otherwise expressly provided in this Section 2.15,
nothing in this Agreement or the referenced Schedules shall imply a patent
indemnity with regard to any issue of infringement not to Seller's Knowledge as
of the date hereof. Furthermore, Buyer understands that the license agreement
listed in Schedule 2.15.2(a)(ii) to NNC is primarily related to the operations
----------------------
of Seller's Continuing Affiliates, though it may affect the identified patents
listed in Schedule 2.15.1(a)(ii), and Buyer takes title subject to that license
----------------------
without any claim for royalty or other interest in that agreement.
2.15.3. Company Entity Commercial Activities. Seller represents and
------------------------------------
warrants that, to Seller's Knowledge, no ongoing activity of any Company Entity
or planned activity for which substantial preparations have been made or any
past activity of any Company Entity infringes, violates or misappropriates the
Intellectual Property rights of any third party. With the exception of the
matters set forth in Schedule 2.15.3 to Seller's Knowledge, no third party has
---------------
made any claim, threat, assertion or filed any action alleging any such
infringement, violation or misappropriation before any Governmental Authority
including without limitation the United States Patent and Trademark Office or
any foreign patent office.
2.16. Employees.
---------
2.16.1. Employees. Schedule 2.16.1 lists each person that was an
--------- ---------------
Employee (as hereinafter defined) earning more than $100,000 annually in cash
compensation as of December 31, 1996, including each such person's (a) name, (b)
total periods of employment, (c) current position or job classification, and (d)
employer. As soon as practicable after the date hereof but prior to Closing,
Seller shall deliver or make available to Buyer a separate, confidential list of
wage or salary and bonus information for each Employee. Each Company Entity has
complied in all material respects with all applicable Laws relating to the
employment of labor including the provisions thereof relating to wages, hours,
collective bargaining and the payment of social security and Taxes and is not
liable for any arrears of wages or any Tax or any penalty for failure to comply
with any of the foregoing. Except as set forth on Schedule 2.12, there are no
-------------
charges pending or, to Seller's Knowledge, threatened against the Company
alleging unlawful discrimination in employment practices before any Governmental
Authority.
2.16.2. Unions. As of the date hereof, there are no collective
------
bargaining or other labor union agreements applicable to any Employees. Except
as set forth on Schedule 2.16.2 and
---------------
-12-
Schedule 2.12, as of the date hereof, (a) no material strikes, slowdowns,
-------------
lockouts or work stoppages or material labor arbitrations, grievances or
disputes involving the Employees or against any Company Entity are pending or,
to Seller's Knowledge, threatened, and (b) to Seller's Knowledge, (i) there is
no organizational activity underway at any Company Entity, and (ii) no labor
representative holds bargaining rights.
2.16.3. NLRB. As of the date hereof, no Company Entity is engaged
----
in, or has received any written notice of, any unfair labor practice, and no
such complaints are pending before the National Labor Relations Board or any
other Governmental Authority.
2.17. Employee Benefits.
-----------------
2.17.1. Company Benefit Plans. Schedule 2.17.1 lists, as of the
--------------------- ---------------
date hereof, each written pension, retirement, profit-sharing, deferred
compensation, bonus, incentive, performance, stock option, stock appreciation,
phantom stock, stock purchase, restricted stock, medical, retiree medical,
hospitalization, vision, dental or other health, life, disability, severance,
termination or other employee benefit plan, program, arrangement, agreement or
policy (including each ERISA Plan (as hereinafter defined)) (each, a "Benefit
Plan"), which currently covers any current or, in the case of any Company
Benefit Plan (as hereinafter defined), former Employee (or provides benefits for
the dependents of any such Employee or former Employee) and which is sponsored
or maintained or contributed to by any Company Entity (each, a "Company Benefit
Plan"). Except as set forth in Schedule 2.17.1, each Company Benefit Plan
---------------
complies in all material respects, and has been established, operated and
administered in all material respects, in accordance with its terms and all
applicable requirements of all Laws, including ERISA (as hereinafter defined)
and the Code (as hereinafter defined), and no "reportable event", non-exempt
"prohibited transaction" (as such terms are defined in ERISA and the Code, as
applicable) or termination or partial termination has occurred with respect to
any Company Benefit Plan and the consummation of the transactions contemplated
by this Agreement will not result in the occurrence of any such event. Except
as set forth on Schedule 2.17.1, each Company Benefit Plan that is an ERISA Plan
---------------
intended to qualify under Section 401(a) of the Code has received a ruling or
determination letter concluding that such ERISA Plan so qualifies, and, to
Seller's Knowledge, no event has occurred, amendment adopted or action taken
that would cause any such ERISA Plan to lose its qualified status. Except as
set forth on Schedule 2.17.1, there are no written Contracts or, to Seller's
---------------
Knowledge, plans or commitments by any Company Entity, whether legally binding
or not, to create any additional Benefit Plans for the Employees or to modify
any existing Company Benefit Plans, except with respect to changes (i) required
by ERISA, the Code or applicable Other Laws or (ii) contemplated by this
Agreement. Except as set forth on Schedule 2.17.1, none of the Company Benefit
---------------
Plans which are "welfare benefit plans" within the meaning of Section 3(1) of
ERISA provide post-retirement medical or life insurance benefits or coverage to
any current or former Employee or any dependent of any current or former
Employee, except as may be required under Section 4980B of the Code, Section 601
of ERISA or any applicable Other Law. Except as set forth on Schedule 2.17.1,
---------------
no Company Entity has any liability (whether actual, contingent, or otherwise)
with
-13-
respect to any of the Company Benefit Plans other than as adequately reflected
in or reserved for on the Balance Sheet. Neither any Company Entity nor Buyer or
its Affiliates will have any liability with respect to any Company Benefit Plan
of the Company's control group as defined in Section 414(b), (c), (m) or (o) of
the Code. Controlled Group Liabilities (as defined below) relating to any
Benefit Plan which is an "employee pension benefit plan" or a "welfare benefit
plan," within the meanings of Sections 3(2) and 3(1), respectively, of ERISA,
maintained or contributed to by Seller or any Continuing Affiliate at any time
prior to the Closing Date, or to which Seller or any Continuing Affiliate had or
has any obligation to contribute at any time prior to the Closing Date, other
than Damages relating to any "employee pension benefit plan" or "welfare benefit
plan," as defined above, maintained solely by the Company, shall be retained by
the Seller. For purposes of the preceding sentence, "Controlled Group
Liabilities" shall mean any liability under (a) Title IV of ERISA, (b) section
302 of ERISA, (c) sections 412 and 4971 of the Code, and (d) the continuation of
coverage requirements of sections 601-608 of ERISA and section 4980B of the
Code. Except as set forth on Schedule 2.17.1, none of the Company Benefit Plans
---------------
contains any provisions which would prohibit the transactions contemplated by
this Agreement or which would give rise to any severance, termination or other
payments or liabilities as a result of the transactions contemplated by this
Agreement.
2.17.2. Records. Seller has delivered or made available to Buyer
-------
copies of each Company Benefit Plan and any amendments thereto and any related
trust agreement, funding agreement and insurance contract relating thereto in
existence as of the date hereof, and, if applicable and in existence as of the
date hereof (a) the most recent valuation report, (b) the Forms 5500 or 5500-C
and the schedules thereto filed for the last 3 plan years, (c) the summary plan
description currently in effect for each Company Benefit Plan and all summaries
of material modifications, (d) the last financial statements for each Company
Benefit Plan and its related trust, if any, (e) if applicable, the most recent
determination letter issued with respect to each Company Benefit Plan, and (f)
all administrative forms used with respect to the Company Benefit Plans.
2.17.3. Actions. Except as set forth on Schedule 2.12 hereto, as of
------- -------------
the date hereof, there are no Actions pending (other than routine claims for, or
inquiries regarding, benefits) or, to Seller's Knowledge, threatened, with
respect to any Company Benefit Plan, including any fiduciaries thereof.
2.17.4. Funding. All contributions required under applicable Law or
-------
the terms of any collective bargaining agreement or Company Benefit Plan to be
made on or prior to the date hereof by any Company Entity to an Company Benefit
Plan have been made within the time prescribed by applicable Law, collective
bargaining agreement or Company Benefit Plan.
2.17.5. Acceleration of Benefits. Except as set forth on Schedule
------------------------ --------
2.17.5, the consummation of the transactions contemplated by this Agreement will
------
not result in a "change of control" under any Company Benefit Plan and will not
result in any increase in the amount of compensation or benefits or accelerate
the vesting or timing of payment of any benefits payable
-14-
to or in respect of any Employee or former Employee or the beneficiary or
dependent of any Employee or former Employee.
2.17.6. Benefit Plans Maintained By Seller. Except as set forth on
----------------------------------
Schedule 2.17.6, Seller does not sponsor or maintain any Benefit Plan which
---------------
currently covers any current or former Employee.
2.18. Taxes.
-----
2.18.1. Returns. Except as set forth on Schedule 2.18.1, all
------- ---------------
federal, state and local tax returns, notices, reports, declarations and forms
(including any schedules or attachments thereto) ("Returns") relating to the
Company Entities or any combined, consolidated, affiliated or unitary tax group
of which they are or have been members (an "Affiliated Group") that were
required to be filed prior to the date hereof have been accurately prepared in
all material respects and timely filed. Except as set forth on Schedule 2.18.1
---------------
and except for Taxes (as hereinafter defined) that are being contested in good
faith and by appropriate proceedings, the following Taxes have been duly and
timely paid or withheld and paid over to the appropriate taxing authority: (a)
all Taxes shown to be due on the Returns, and (b) all deficiencies and
assessments for any amount of Taxes that are or would become payable by the
Company Entities or chargeable as a Lien upon any of their assets. Each Company
Entity has withheld or otherwise collected all Taxes it was required to withhold
or collect under any applicable Law.
2.18.2. Tax Audits. Except as set forth on Schedule 2.18.2, as of
---------- ---------------
the date hereof (a) no unresolved issue has been raised either in writing or, to
Seller's Knowledge, other than in writing, by any Governmental Authority in the
course of any audit with respect to Taxes for which any Company Entity would be
held liable and (b) no taxing authority is now asserting or threatening to
assert against any Company Entity any deficiency or claim for additional Taxes
or any adjustment of Taxes.
2.18.3. Section 338(h)(10) Election. Seller has filed a consolidated
---------------------------
federal Income Tax Return (as hereinafter defined) with respect to the Company
Entities for the taxable year immediately preceding the current taxable year and
Seller is eligible to make an election under Section 338(h)(10) of the Code (and
any comparable election under state or local tax Law) with respect to the
Company Entities.
2.19. Brokers. No person or Entity is or will become entitled to receive
-------
from Buyer any brokerage or finder's fee, advisory fee or other similar payment
for the transactions contemplated by this Agreement by virtue of having been
engaged by or acted on behalf of Seller.
2.20. Approvals. Schedule 2.20 sets forth a complete and accurate list of
--------- -------------
all of the Approvals (as hereinafter defined) held by the Company Entities,
copies of which have been made available to Buyer. To Seller's Knowledge, the
Company Entities own or possess and hold the Approvals set forth on Schedule
--------
2.20 free from restrictions and such Approvals constitute all
----
-15-
franchises, licenses, permits, consents, approvals and other authority
(governmental or otherwise), and all rights and privileges with respect to the
foregoing, as are necessary for the conduct of its business as now being
conducted except where the failure to own or possess and hold an Approval would
not have a Material Adverse Effect. All of the Approvals set forth on Schedule
--------
2.20 are in full force and effect and the applicable Company Entity is not in
----
material violation with respect to any of them. No proceedings are pending or,
to Seller's Knowledge, threatened by any Governmental Authority to revoke or
limit the scope of any of the Approvals. Except as noted on Schedule 2.20, none
-------------
of the Approvals would be rendered ineffective or be required to be reissued as
a result of the consummation of the transactions contemplated hereby.
2.21. No Other Pending Transactions. Except for the transactions
-----------------------------
contemplated by this Agreement: (i) the Seller is not a party to or bound by or
the subject of any agreement, commitment or undertaking with respect to the sale
of all or any part of any of the capital stock of the Company; and (ii) the
Company is not a party to or bound by or the subject of any agreement,
undertaking or commitment to merge or to consolidate with, or to acquire all of
substantially all of the property and assets of, any other Entity or to sell, to
lease or to exchange all or substantially all of the Company's assets to any
other Entity.
2.22. Corporate Books and Records. The minute books, stock record books
---------------------------
and other related corporate records of the Company Entities, all of which have
been made available to Buyer, are correct in all material respects and have been
maintained in accordance with sound business practices and there have been no
transactions involving the business of the Company Entities which are required
to have been set forth therein and which have not been accurately so set forth.
At the Closing, all of such books and records will be in the possession of the
Company.
2.23. Business Practices. To Seller's Knowledge neither any of the
------------------
Company Entities nor Seller on behalf of any of the Company Entities nor any
director, officer, agent, employee or other person acting on behalf of Seller or
any of the Company Entities has during the past four (4) years (a)(i) used any
corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity, (ii) made any unlawful payment
to foreign or domestic government officials or employees or to foreign or
domestic political parties or campaigns from corporate funds, (iii) established
or maintained any unlawful or secret fund of corporate monies or other assets of
the Company Entities, (iv) made any false or fictitious entry on the books or
records of the Company Entities except insofar as the Company may have failed to
accurately account for the cost of processing and disposal of Legacy Waste and
Equipment for the calendar years 1993, 1994 and 1995, (v) made any bribe,
rebate, payoff, influence payment, kickback or other unlawful payment, (vi)
given any favor or gift which is not deductible for federal income tax purposes
or (vii) made any bribe, kickback or other payment of a similar or comparable
nature, whether unlawful or not, to any Entity or Governmental Authority,
whether in money, property or services, to obtain favorable treatment in
securing business or to obtain special concessions, or to pay for favorable
treatment for business secured or for special concessions already obtained,
which, with respect to all of the matters set forth in clause (a)
-16-
hereof, (b)(i) would subject the Company Entities to any Damages, (ii) if not
made, given, established or maintained in the past would have had a Material
Adverse Effect, (iii) if not continued, would have a Material Adverse Effect or
(iv) were not reported by the Company Entities to the appropriate Governmental
Authority and disclosed to Buyer.
2.24. Purchase for Investment; Restricted Securities. Seller is acquiring
----------------------------------------------
the GTS Shares for its own account for investment and not for resale or
distribution. Seller (a) has received no general solicitation or general
advertisement concerning the Buyer or the GTS Shares, (b) is a sophisticated
investor that has prior experience with investments of a similar nature, and has
sufficient knowledge and experience in financial and business matters so as to
be capable of evaluating the merits and risks of investment in the GTS Shares,
(c) has no reason to anticipate any change in its circumstances, financial or
otherwise, which may cause or require resale or distribution by Seller of all or
any part of the GTS Shares and (d) confirms that, to its knowledge, all
requested information pertaining to the GTS Shares and the Buyer has been made
available to the Seller, and Seller confirms that it has been given an
opportunity to make any further inquiries of Buyer that Seller desires to make.
Seller understands that the GTS Shares are characterized as "restricted
securities" under the federal securities laws inasmuch as they are being
acquired from Buyer in a transaction not involving a public offering and that
under such laws and applicable regulations such securities may not be resold
without registration under the Securities Act of 1933, as amended and applicable
state securities laws only in certain limited circumstances.
It is understood that the certificates evidencing the GTS Shares may bear
the following legend:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
OR STATE SECURITIES LAWS. THEY MAY NOT BE SOLD IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH
ACTS OR AN EXEMPTION THEREFROM UNDER THE SECURITIES ACT OF 1933 AND
APPLICABLE STATE SECURITIES LAWS."
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer makes the following representations and warranties to Seller:
3.1. Organization; Power and Authority. Buyer is a corporation duly
---------------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware. Buyer has all corporate power needed to execute, deliver and perform
its obligations under this Agreement and to consummate the transactions
contemplated hereby to be consummated by it, including each instrument, document
and agreement contemplated herein to be executed and delivered by it pursuant to
this Agreement.
-17-
3.2. Authorization, Execution and Validity. The execution, delivery and
-------------------------------------
performance by Buyer of this Agreement and the consummation by Buyer of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action. This Agreement has been duly and validly executed and
delivered by Buyer, constitutes its valid and binding obligation and is
enforceable against Buyer in accordance with its terms, except to the extent
that such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization and similar laws of general application relating to or affecting
creditors' rights generally and general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
3.3. No Conflict; Buyer Consents. Except as set forth on Schedule 3.3,
--------------------------- ------------
the execution, delivery and performance by Buyer of this Agreement will not (a)
violate or be in conflict with any Law, (b) violate or be in conflict with any
Charter Document of Buyer, (c) require any Consent from any Governmental
Authority, except to comply with the HSR Act, or (d) breach any material
Contract to which Buyer is a party or by which it or its assets are bound.
3.4. Litigation. There is no Action by any Entity that is pending or, to
----------
the knowledge of Buyer, threatened by or against or affecting Buyer or any of
its properties, assets, operations or business which would, if adversely
determined, have an adverse effect on Buyer's ability to consummate the
transactions contemplated by this Agreement, and Buyer is not subject to any
Order which would have any such effect.
3.5. Purchase for Investment; Restricted Securities; Due Diligence.
-------------------------------------------------------------
Buyer is acquiring the Shares for its own account for investment and not for
resale or distribution. Buyer (a) has received no general solicitation or
general advertisement concerning the Company Entities or the Shares, (b) is a
sophisticated investor that has prior experience with investments of a similar
nature, and has sufficient knowledge and experience in financial and business
matters so as to be capable of evaluating the merits and risks of investment in
the Shares, (c) has no reason to anticipate any change in its circumstances,
financial or otherwise, which may cause or require resale or distribution by
Buyer of all or any part of the Shares and (d) confirms that, to its knowledge,
all requested information pertaining to the Shares and the Company Entities,
their assets and business operations has been made available to Buyer, and Buyer
also confirms that it has been given an opportunity to make any further
inquiries of Seller and the Company Entities that Buyer desires to make. Buyer
has no actual knowledge of any breach of any of the representations or
warranties made by Seller under this Agreement. Without limiting the effect of
Section 10.4.5., Seller acknowledges that Buyer has no duty to Seller of due
care or diligence to discover any such breaches. Buyer understands that the
Shares are characterized as "restricted securities" under the federal securities
laws inasmuch as they are being acquired from Seller in a transaction not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the Securities Act of
1933, as amended and applicable state securities laws only in certain limited
circumstances.
-18-
It is understood that the certificates evidencing the Shares may bear the
following legend:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH
ACTS OR AN EXEMPTION THEREFROM UNDER THE SECURITIES ACT OF 1993 AND
APPLICABLE STATE SECURITIES LAWS."
3.6. Available Funds. Buyer has and will have on the Closing Date (as
---------------
hereinafter defined) and immediately prior to the Closing, funds available that
will be sufficient for Buyer to consummate the transactions contemplated hereby.
3.7. Brokers. No person or Entity is or will become entitled to receive
-------
from Seller any brokerage or finder's fee, advisory fee or other similar payment
for the transactions contemplated by this Agreement by virtue of having been
engaged by or acted on behalf of Buyer.
3.8. GTS Shares. As of the Closing, the GTS Shares will be: (a) duly
----------
authorized and validly issued, (b) fully paid and non-assessable and (c) not
subject to any Liens or restrictions on transfer or Subscription Rights. Seller
will receive good and marketable title to the GTS Shares as of the Closing Date.
Except for the effects that consummation of the transactions contemplated by
this Agreement and the other information which has been publicly disclosed by
Buyer in its Form 10-K for the year ended December 31, 1996 and its press
release dated March 31, 1997 may have, which effects are not presently known to
Buyer, Buyer has no knowledge of any fact or circumstance which would prevent
the registration of the GTS Shares on or before the ninetieth day after the
Closing Date.
ARTICLE 4. COVENANTS OF SELLER
Seller hereby covenants and agrees with Buyer as follows:
4.1. Cooperation by Seller. Subject to its rights under Article 9, prior
---------------------
to the Closing, Seller shall use all reasonable efforts to take all actions and
to do all things necessary or advisable to consummate the transactions
contemplated by this Agreement and to cooperate with Buyer in connection with
the foregoing, including using reasonable efforts to obtain all Consents in
connection therewith, to transfer to Buyer all Permits required by any
Environmental Law and to lift or rescind any injunction or restraining order or
other Order adversely affecting the ability of the Parties to consummate the
transactions contemplated hereby (provided that such reasonable efforts shall
not require Seller to make, or cause to be made, any payment).
4.2. Pre-Closing Access to Information. From the date hereof through the
---------------------------------
Closing Date, Seller shall, subject to applicable contractual obligations and
the limitations referred to in Section 5.2., afford to Buyer, its accountants,
its counsel and other agents and representatives
-19-
reasonable access, upon reasonable notice, to all of the properties, books and
records of the Company Entities (including but not limited to Contracts,
Licenses and Permits) that Buyer needs to complete its due diligence, but not to
information that Seller or any Company Entity is contractually restricted from
providing to Buyer or that Seller or any Company Entity, using all reasonable
efforts, is unable to obtain.
Buyer shall direct all requests for information to:
Xx. Xxxxxx Xxxxxxxx
Westinghouse Electric Corporation
Gateway Center
00 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
4.3. Conduct of Business.
-------------------
4.3.1. Conduct of Business in Ordinary Course. Without the prior
--------------------------------------
written consent of Buyer, from the date hereof through the Closing Date, Seller
shall use all reasonable efforts to cause the Company Entities to: (a) preserve
their relationships with suppliers, customers, distributors, Employees,
creditors and Governmental Authorities, (b) maintain the same amounts and kinds,
in the aggregate, of existing insurance coverage, (c) perform their obligations
in all material respects, (d) comply with all applicable Laws, and (e) conduct
their business in the ordinary course and consistent with past practice (except
as otherwise provided in Schedule 4.3.1). Unless otherwise required or
--------------
permitted by this Agreement or identified on Schedule 4.3.1, without the prior
--------------
written consent of Buyer, Seller shall not permit any Company Entity to:
(i) amend its Charter Documents;
(ii) issue, sell or otherwise transfer any capital stock of any
Company Entity;
(iii) incur or guarantee any debt, except accounts payable
incurred by the Company Entities in the ordinary course of business in
accordance with past practice;
(iv) sell, assign or permit the creation of any Lien (except
Permitted Liens) on, any of its assets, except in the ordinary course of
business;
(v) except for normal merit, cost-of-living and promotional
increases to Employees in accordance with past practices of the Company
Entities, increase the rate of compensation for any Employee;
-20-
(vi) make any change in accounting methods or principles or cost
allocation procedures that materially affects the consolidated financial
statements of the Company and their respective consolidated subsidiaries,
except as (X) may be prescribed by changes promulgated by the American
Institute of Certified Public Accountants, or (Y) permitted or contemplated
under any other provision of this Agreement;
(vii) amend or terminate any Company Benefit Plans or implement
any additional employee benefit plans, except with respect to changes
required by ERISA, the Code or applicable Other Laws or except as otherwise
required or permitted pursuant to Article 11 hereof;
(viii) compromise or settle any material claim;
(ix) make a capital expenditure in excess of $100,000 for any
single item except in connection with the modification of the ventilation
system for the SEG(R) Metal Melt facility or except pursuant to any capital
appropriation that was approved prior to the date hereof and that is listed
on Schedule 4.3.1;
--------------
(x) sell or lease any material portion of the assets of any of
the Company Entities;
(xi) enter into any Government Contract or any customer Contract
involving in excess of $2,500,000;
(xii) enter into any Government Contract or Customer Contract,
involving $2,500,000 or less, except in the ordinary course of business
consistent with its past practice, and the Company shall provide Buyer with
a copy of each such Contract involving in excess of $100,000;
(xiii) enter into any teaming agreement or joint venture agreement;
(xiv) submit a Proposal involving in excess of $2,500,000;
(xv) submit a Proposal involving $2,500,000 or less, except in
the ordinary course of business consistent with its past practice, and the
Company shall provide Buyer with a copy of each such Proposal involving in
excess of $100,000;
(xvi) merge a Company Entity with or into any other Entity or
acquire the capital stock of another Entity or acquire all or substantially
all of the assets of another Entity;
-21-
(xvii) agree to take any of the actions described in Sections
4.3.1.(i) through 4.3.1.(xvi).
4.3.2. Buyer's Consent. If Seller gives written notice to Buyer
---------------
that any Company Entity proposes to take any action for which Buyer's consent is
required under Section 4.3.1. and if Buyer has not delivered within five (5)
Business Days (as hereinafter defined) of Seller's notice Buyer's written
objection to such proposed action, Buyer shall be deemed to have consented to
such proposed action. Buyer shall not unreasonably withhold its consent under
Section 4.3.1. to any action taken or to be taken by any Company Entity. In the
event Buyer does not consent to a proposed action by Seller, Buyer shall not be
entitled to claim a violation of Section 7.1.1. for any matter related to
directly or indirectly or as a consequence of the failure to take such proposed
action.
4.3.3. Advanced Systems Division Assets and Liabilities. Prior to
------------------------------------------------
the Closing, (i) Seller shall, or shall cause the Company to, assign to Seller
or a Continuing Affiliate all of SEG's rights, title and interest in and to all
owned or leased real and personal property relating to the Company's Advanced
Systems Division located in Carlsbad, New Mexico (the "Advanced Systems Division
Assets") and (ii) Seller shall or shall cause a Continuing Affiliate to assume
the liabilities of the Company Entities relating exclusively to the Company's
Advanced Systems Division located in Carlsbad, New Mexico, including without
limitation, any and all liabilities arising from or relating to the contracts
listed on the Assignment and Assumption Agreement dated as of September 1, 1996
between Seller and Company or the assignment of such contracts by the Company to
the Seller (the "Advanced Systems Division Liabilities").
4.4. Further Assurances. Subject to the other terms and conditions of
------------------
this Agreement, at any time and from time to time, whether before or after the
Closing, Seller shall execute and deliver all instruments and documents and take
all other action that Buyer may reasonably request to consummate or to evidence
the consummation of the transactions contemplated by this Agreement. Without
limiting the generality of the foregoing, Seller shall use all reasonable
efforts to cause to be assigned to a Company Entity subject to the receipt of
any Consents listed on Schedule 2.7 as required for such assignment, all
------------
Contracts identified on Schedule 5.6 to be transferred by Seller to a Company
------------
Entity pursuant to transfer instruments in form reasonably satisfactory to
Buyer, providing for the assignment of all rights in and the assumption of all
obligations of Seller and any Continuing Affiliates under such agreements.
4.5. HSR Act Compliance. Promptly after the date hereof, Seller shall
------------------
file any notification required to be filed under the HSR Act to consummate the
transactions contemplated hereby. Seller shall use all reasonable efforts to
comply as promptly as practicable with any request made pursuant to the HSR Act
for additional information. Seller shall cooperate with Buyer in such
compliance, and Seller shall pay one-half of the statutory filing fees required
by the HSR Act. Prior to Closing, Seller shall advise Buyer promptly in respect
of any understandings, undertakings or agreements (oral or written) which Seller
proposes to make or
-22-
enter into with the Federal Trade Commission, the Department of Justice or any
other Governmental Authority with respect to the transactions contemplated by
this Agreement.
4.6. Supplements to Schedules. After the date hereof and prior to the
------------------------
Closing, if, to Seller's Knowledge, any event occurs or condition changes that
causes any of its representations or warranties in this Agreement to be
inaccurate as of any date that is relevant for such representations or
warranties, Seller shall notify Buyer thereof in writing. Seller may supplement
the Schedules to account for such event or change.
4.7. Intercompany Accounts. As of the Closing Date, the net intercompany
---------------------
receivables, payables and loans relating to Seller Provided Services and any
other corporate charges (but not to contracts for services purchased by Seller
or any Continuing Affiliate from any Company Entity) then existing between
Seller or any Continuing Affiliate, on the one hand, and any Company Entity, on
the other hand, shall be settled.
4.8. Transfer of GTS Shares. Seller will not, directly or indirectly,
----------------------
sell, assign, transfer, offer, contract or grant any option to sell (including
without limitation any short sale), pledge (other than pursuant to a pledge to a
financial institution as collateral for a bona fide loan) or otherwise dispose
of the GTS Shares during the ninety (90) day period following the Closing.
4.9. Ventilation System for the SEG(R) Metal Melt Facility; Stormwater
-----------------------------------------------------------------
Separation Project; Trojan Contract. (a) The reserve of $332,014 for the
-----------------------------------
costs to complete the proposed modification to the ventilation system for the
SEG(R) Metal Melt facility shall remain on the books of the Company for purposes
of determining the March 31 Working Capital Deficit.
(b) The reserve of $343,734 for costs to complete the proposed
Stormwater Separation Project shall remain on the books of the Company for
purposes of determining the March 31 Working Capital Deficit.
(c) The reserve of $653,496 related to the contract between the
Company and Trojan shall remain on the books of the Company for purposes of
determining the March 31 Working Capital Deficit.
(d) The reserves set forth in this Section 4.9 shall not be adjusted
pursuant to the adjustments contemplated by Section 6.8(a).
4.10. Non-Competition.
---------------
4.10.1. Seller's Covenant. Until the second anniversary of the
-----------------
Closing Date, neither Seller nor any Continuing Affiliate shall engage in or
provide, directly or indirectly, anywhere in the United States of America either
for its own account or as a partner, shareholder, director, officer or
principal, a Competing Service; provided, however, that:
------------------
-23-
(a) Seller or any Continuing Affiliate may participate by providing
services (and documents or other information depicting, describing or
relating to such services) which do not constitute a Competing Service as a
member of a team in which other non-Seller team members do provide a
Competing Service; provided, however, Seller or any Continuing Affiliate
shall not provide to any team member providing a Competing Service any
information, assistance or any other support relating to a Competing
Service;
(b) Seller's Benefit Plans may acquire securities and other interests
in any Entity for investment purposes;
(c) Seller or any Continuing Affiliate may acquire up to ten percent
(10%) of the outstanding securities and other interests of any Entity
regardless of the percentage of such Entity's revenues that are
attributable to businesses that offer or provide a Competing Service;
(d) Seller or any Continuing Affiliate acquire any percentage of the
securities and other interests, including a controlling interest, of any
Entity if the revenues of such Entity that are attributable to businesses
that offer or provide a Competing Service do not exceed ten percent (10%)
of such Entity's total consolidated annual revenues during each of the past
two years; or
(e) as permitted under Sections 6.9.2(b) or (c).
4.10.2. Definitions. For purposes of this Section 4.10., the
-----------
following terms shall have the meanings ascribed to them herein.
(a) "Competing Service" means (i) the ownership, development or
operation of a centrally located, off-customer site facility for volume
and/or mass reducing commercially-produced radioactive or radioactively-
contaminated or intermingled hazardous and radioactive (mixed) materials,
or (ii) transporting (but not the manufacture, use or sale of containers
used to transport) commercially-produced radioactive or radioactively-
contaminated or intermingled hazardous and radioactive (mixed) materials,
or (iii) the ownership of any of the following incineration facilities
through privatization or otherwise for the purpose of treating, processing
or disposing of radioactive or mixed (intermingled radioactive and
hazardous) wastes or materials of or for the benefit of the United States
Department of Energy or other Governmental Authority: (x) the TSCA
Incinerator Facility at Oak Ridge Tennessee, (y) the CIF Incinerator
Facility at Savannah River, South Carolina and (z) the WERF Incinerator
Facility at Idaho National Engineering Laboratory. "Radioactive or
radioactively-contaminated materials" means materials defined as such by
customer policies or applicable Law, and include materials that may also be
considered hazardous due to other constituents or characteristics (e.g.,
"mixed" or "transuranic" waste and materials) under applicable customer
policies or Law.
-24-
4.10.3. Services for Governmental Authorities. Notwithstanding the
-------------------------------------
foregoing covenant, and without intending to broaden the scope of Competing
Services, Buyer acknowledges and agrees that Seller and the Continuing
Affiliates may, now or at any time in the future, operate a central facility for
volume and/or mass reducing radioactive or radioactively-contaminated materials
or intermingled hazardous and radioactive (mixed) materials or transport
radioactive or radioactively-contaminated materials or intermingled hazardous
and radioactive (mixed) materials on behalf or for the benefit of the Department
of Energy or any other Governmental Authority, including, without limitation:
(a) as part of or ancillary to a management and operating contract,
an integrator or other management contract, or any other corresponding
contracting arrangement that may evolve with the Department of Energy, or a
counterpart arrangement with or for the benefit of any Governmental
Authority;
(b) as prime contractor or a subcontractor of any tier; or
(c) except as specifically set forth in Section 4.10.2.(a)(iii), at a
Governmental Authority-owned location, or off-site of a Governmental
Authority-owned facility on which Seller or a Continuing Affiliate may be
required by the Governmental Authority or the Governmental Authority's
contractor, to build and/or operate, and which facility Seller may by
contract be required to lease or to own in the entirety or with a majority
or minority interest.
4.10.4. Injunctive Relief. Seller acknowledges that in view of the
-----------------
nature of the Company's business, the foregoing territorial and time limitations
are reasonable and properly required for the adequate protection of Buyer and
that in the event that any such territorial or time limitation is deemed
unreasonable and is then reduced by a court of competent jurisdiction, then, as
reduced, the territorial and/or time limitation shall be enforced. Seller
further acknowledges that the remedy at law for any breach by it of the
agreements contained in this Section 4.10. will be inadequate and that Buyer
will be entitled to seek injunctive relief, and Seller agrees to waive any claim
or defense that there is an adequate remedy at Law for breach by it of the
agreements contained in this Section 4.10.
4.10.5. Severability. This Section 4.10. constitutes an independent
------------
and severable covenant and if any or all of the provisions of this Section 4.10.
are held to be unenforceable for any reason whatsoever, it will not in any way
invalidate or affect the remainder of this Agreement which will remain in full
force and effect. However, if the sale of Shares contemplated by this Agreement
shall be rendered unenforceable or ineffective for any reason, this Section
4.10. shall no longer survive.
-25-
4.11. Non-Interference Agreement. Seller covenants and agrees that Seller
--------------------------
will not, for a period of two years after the Closing, directly solicit the
employment of any Employee who was an Employee as of the Closing Date.
4.12. Confidentiality. Seller acknowledges that it may possess certain
---------------
data and knowledge of the operations of the Company Entities which are
proprietary and confidential. Seller covenants and agrees that it will not
reveal, divulge or make known to any Entity or use for its own account in
contravention of the covenants set forth in Section 4.10. or for the account of
any other Entity any confidential or proprietary information, method, record,
data, trade secret, pricing policy, bid amount, bid strategy, rate structure,
personnel policy, method or practice of soliciting or obtaining or doing
business by the Company Entities, or any other confidential or proprietary
information whatsoever relating to the Company Entities. Seller further
covenants and agrees that it shall not divulge any such confidential or
proprietary information which it may acquire during any transition period in
which it assists or consults with Buyer or its Affiliates to facilitate the
transfer and the continued success of the Company Entities, respecting such
confidential and proprietary information in trust for the sole benefit of Buyer
and its Affiliates. The foregoing provisions shall not be applicable to any
disclosure or use of confidential information or knowledge that can be
demonstrated to have (i) been publicly known prior to the Closing Date, (ii)
become publicly known by publication or otherwise not due to the unauthorized
act or omission on the part of Seller of its Affiliates, (iii) been
independently developed by Seller, or (iv) been supplied to Seller by a third
party without, to Seller's Knowledge, violation of the rights of the Company
Entities or Buyer or any other party. Further, the foregoing provisions shall
not apply to information used by Seller or Seller's Continuing Affiliates in the
conduct of any of their businesses that do not contravene the covenants in
Section 4.10. or used by Seller or Seller's Continuing Affiliates in connection
with their use of the Company's services after the Closing Date.
4.13. Environmental Matters Covenant. From the date hereof through the
------------------------------
Closing Date, the Seller covenants and agrees with Buyer (a) to provide Buyer
with prompt written notice of any event, the discovery of any fact, or the
existence of any condition which would result in any of the representations and
warranties of the Company in Section 2.13. above not being accurate and complete
in all material respects as of the Closing Date and, concurrently therewith, the
Seller shall supply Buyer with all reports, materials and other information that
is pertinent thereto and (b) to not take any action, permit the Company Entities
to take any action, fail to take any action or permit the Company Entities to
fail to take any action that would or could result in any of the representations
and warranties of the Company in Section 2.13. (Environmental Laws) above not
being accurate and complete in all material respects as of the Closing Date.
4.14. Release for MMT Matters. Subject to the limitations applicable to
-----------------------
Seller's indemnification obligation as set forth in Sections 10.1.(d) and 10.4.,
Seller shall release, indemnify and hold Buyer and the Company Entities harmless
from all indemnity obligations that Seller and the Company may have under the
MMT Agreement or the Acquisition Agreements related to breaches of the MMT
Agreement or the Acquisition Agreements by Seller
-26-
or the Company, including, without limitation, breaches of the Seller's or the
Company's representations, warranties or covenants, contained therein, which
occurred prior to the Closing Date.
ARTICLE 5. COVENANTS OF BUYER
Buyer hereby covenants and agrees with Seller as follows:
5.1. Cooperation by Buyer. Subject to its rights under Article 9, prior to
--------------------
the Closing, Buyer shall use all reasonable efforts to take all actions and to
do all things necessary or advisable to consummate the transactions contemplated
by this Agreement and to cooperate with Seller in connection with the foregoing,
including using reasonable efforts to obtain all of the Consents in connection
therewith and to lift or rescind any injunction or restraining order or other
Order adversely affecting the ability of the Parties to consummate the
transactions contemplated hereby (provided that such reasonable efforts shall
not require Buyer to make, or cause to be made, any payment).
5.2. Due Diligence Activities. Buyer shall comply with the limitations on
------------------------
the disclosure and use of information set forth in the Confidentiality Agreement
(as hereinafter defined) with respect to the information that Seller provides to
Buyer in and pursuant to this Agreement. Buyer shall not contact any Employee
without the prior written consent of Seller, which shall not be unreasonably
withheld or delayed, or conduct any soil, groundwater or other environmental
sampling in connection with the transactions contemplated hereby without the
prior written consent of Seller, which consent will not be unreasonably withheld
or delayed. Buyer shall use its reasonable efforts to avoid imposing any undue
burden upon any Company Entity and from interfering with the operations of any
Company Entity while conducting due diligence activities and preparing for the
Closing.
5.3. Further Assurances. Subject to the other terms and conditions of this
------------------
Agreement, at any time and from time to time, whether before or after the
Closing, Buyer shall execute and deliver all instruments and documents and take
all other action that Seller may reasonably request to consummate or to evidence
the consummation of the transactions contemplated by this Agreement. In
addition, Buyer shall, upon request from Seller and in compliance with all
applicable Laws, including, without limitation, the Securities Act of 1933, as
amended, remove any legends from the certificates representing the GTS Shares.
5.4. HSR Act Compliance. Promptly after the date hereof, Buyer shall file
------------------
any notification required to be filed under the HSR Act to consummate the
transactions contemplated hereby. Buyer shall use all reasonable efforts to
comply as promptly as practicable with any request made pursuant to the HSR Act
for additional information. Buyer shall cooperate with Seller in such
compliance, and Buyer shall pay one-half of the statutory filing fees required
by the HSR Act. Prior to Closing, Buyer shall advise Seller promptly in respect
of any understandings, undertakings or agreements (oral or written) which Buyer
proposes to make or
-27-
enter into with the Federal Trade Commission, the Department of Justice or any
other Governmental Authority with respect to the transactions contemplated by
this Agreement.
5.5. Trademarks, Etc. Buyer recognizes and specifically acknowledges that
----------------
none of the Company Entities has, and as a result of the purchase of the Shares,
neither Buyer nor any of its Affiliates shall have, any right, title or interest
in or to the "Westinghouse" trademark or the Westinghouse "CIRCLE W" trademark
or to the trade name Westinghouse.
5.6. Certain Contracts. From and after the Closing, Buyer shall assume all
-----------------
obligations of Seller under the Contracts listed on Schedule 5.6, as described
------------
on such schedule.
5.7. Insurance Matters. (a) On or prior to the Closing, at Buyer's
-----------------
expense, Buyer will have assumed, whether by endorsement, assignment or any
other means that may be prescribed by the American Nuclear Insurers (ANI) and
Material Atomic Energy Liability Underwriters, Nuclear Energy Liability Policy
(Facility Form) under Policy No. NF-305 and Buyer shall maintain such policy in
continuous and uninterrupted force and effect through the tenth anniversary of
the Closing Date. The policy shall be endorsed to provide that the same may not
be cancelled or materially modified without thirty (30) days prior written
notice to Seller from American Nuclear Insurers (ANI) and Material Atomic Energy
Liability Underwriters. In the event Buyer fails to make a premium payment
under such policy, Seller shall have the right, but not the obligation, to make
such payment and to seek reimbursement therefor from Buyer and the policy shall
be endorsed to acknowledge the rights of Seller in this regard.
(b) Subject to the limitations provided in Section 5.7.(c) below,
during the period of time that Seller shall be obligated to indemnify Buyer
Indemnitees pursuant to this Agreement and conditioned upon Seller's compliance
with its indemnification obligation under Section 10.1. hereof, but not
thereafter, Buyer and the Company Entities shall forbear from asserting or
pursuing any rights or interests that the Company Entities may have in or in
connection with or under any policy of insurance issued at any time to Seller or
its Continuing Affiliates, regardless of whether any Company Entity is
designated on such policy as a named insured or an additional insured or is
otherwise entitled to coverage under such policy.
(c) After the Closing, and conditioned upon Seller's compliance with
its indemnification obligation under Section 10.1. hereof, neither Buyer nor any
Company Entity shall have any right or interest in or in connection with or
under any policy of insurance listed on Schedule 2.10, regardless of whether any
-------------
of the Company Entities are designated on any such policy as a named insured or
additional insured or are otherwise entitled to coverage under any such policy,
and all such rights and interests shall be relinquished effective as of the
Closing Date. After the Closing and at the request of Seller, and conditioned
upon, Seller's compliance with its indemnification obligation under Section
10.1. hereof, Buyer shall and shall cause the Company Entities to take such
actions and deliver such assignments, waivers, releases or other documents as
may be necessary or desirable to effect the purposes of this section.
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5.8 Registration of GTS Shares. (a) Buyer, at its sole cost and expense,
--------------------------
shall use its best efforts to file with the Commission a registration statement
covering the GTS Shares (and no other shares of GTS Duratek stock, common or
preferred except to the extent contractually obligated as of the date hereof)
and shall use its best efforts to have such registration statement declared
effective as soon as possible, including, without limitation, responding
promptly to requests for information by the Commission. Buyer, at its sole cost
and expense, shall use its best efforts to list the GTS shares for trading on
the Nasdaq Stock Market as soon as possible. Buyer shall keep Seller informed
as to the status of the efforts to register and list for trading the GTS Shares,
including, but not limited to any review of the registration statement by the
Commission.
(b) In the event the GTS Shares are not registered with the
Commission and listed for trading on the Nasdaq Stock Market on or before the
ninetieth (90th) day after the Closing Date, Seller shall have the one time
right, at Seller's sole option and at Buyer's expense, to require that Buyer
purchase any or all of the GTS Shares (the "Put Shares") under the terms and
conditions set forth in this Section 5.8. ("Put"). Upon the proper and timely
exercise of the Put by Seller, Buyer shall purchase from Seller and Seller shall
sell to Buyer the Put Shares under the terms and conditions set forth in this
Section 5.8. In the event that Seller desires to exercise the Put, Seller must
so notify Buyer no earlier than the ninetieth (90th) day after the Closing Date
and no later than the one hundred and fifth (105th) day after the Closing Date
("Put Exercise Period") and shall state therein the number of Put Shares. A
failure by Seller to exercise the Put during the Put Exercise Period shall
constitute a waiver of such right. The purchase price for Put Shares upon
exercise of the Put shall equal the closing price for Buyer's common stock as
reported by the Nasdaq Stock Market on the ninetieth (90th) day (or in the event
such date is not a day upon which trading on the Nasdaq Stock Market occurs,
then on the next trading day after such ninetieth (90th) day) after the Closing
Date ("Per Share Price"). At the closing of the purchase and sale pursuant to
the Put, which closing date shall be fixed by Seller in the notice delivered to
Buyer hereunder and which date shall not be earlier than ten (10) days nor later
than thirty (30) days after delivery of such notice ("Put Closing"), Seller
shall execute and deliver to Buyer certificates representing the Put Shares to
be sold pursuant to the Put duly endorsed in negotiable form or with stock
powers duly executed in blank, subject to no Liens. At the Put Closing, Buyer
shall pay to Seller the purchase price by wire transfer in immediately available
funds to an account designated by Seller, equal to the product of the following:
(x) Per Share Price, multiplied by (y) the number of Put Shares tendered by
Seller. In no event, however, shall Buyer be obligated to purchase more than Two
Million U.S. Dollars (U.S. $2,000,000) of GTS Shares, based on the Per Share
Price, pursuant to the Put. The provisions of this Section 5.8.(b) shall not
relieve Buyer of its obligations under Section 5.8.(a) to exercise best efforts
to register and list for trading the GTS Shares, except for any such shares
purchased by Buyer at the Put Closing.
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ARTICLE 6. MUTUAL COVENANTS
6.1. Taxes.
-----
6.1.1. Apportionment of Income Taxes Between Pre-Closing and Post-
----------------------------------------------------------
Closing Tax Periods. In order to apportion any Income Tax (as hereinafter
-------------------
defined) relating to any taxable year or any other period that is treated as a
taxable year (a "Tax Period") that includes, but that would not, but for this
Section, close on the Closing Date, the Parties shall, unless specifically
prohibited by applicable law, elect or cause their Affiliates to elect with the
relevant taxing authority to treat for all purposes the Closing Date as the last
day of a taxable period of the Company Entities, and such Tax Period shall be
treated as a Short Tax Period (as hereinafter defined) and a Pre-Closing Tax
Period (as hereinafter defined) for purposes of this Agreement. In any case
where applicable law specifically prohibits the Company Entities from treating
the Closing Date as the last day of a Short Tax Period, then for purposes of
this Agreement, the portion of such Income Tax that is attributable to the
operations of the Company Entities for such Interim Tax Period (as hereinafter
defined) shall be the Income Tax that would be due with respect to the Interim
Tax Period if such Interim Tax Period were a Short Tax Period, based on a
closing of the books as of the Closing Date, provided that exemptions,
allowances or deductions that are calculated on an annual basis (including, but
not limited to, depreciation and amortization deductions) shall be allocated
between the period ending on the Closing Date and the period after the Closing
Date in proportion to the number of days in each such period.
6.1.2. Payment of Income Taxes. In furtherance of the foregoing, any
-----------------------
Income Tax in respect of any Pre-Closing Tax Period shall be borne by Seller,
and any refunds or credits in respect of such Income Tax for any such Pre-
Closing Tax Period shall be the property of Seller. Any Income Tax in respect
of any Interim Tax Period (including amounts payable as a result of an audit or
other adjustment), to the extent not paid on or before the Closing Date, shall
be paid by Seller to Buyer or accrued or reserved for as a current liability as
of the Closing Date for purposes of determining the Closing Working Capital
Deficit, which shall pay such Income Tax to the relevant Governmental Authority,
no later than 15 calendar days prior to the date such payment is due, and any
refunds or credits received by Buyer or any Company Entities in respect of such
Income Tax for such Interim Tax Period shall be the property of Seller. Any
Income Tax attributable to the operations of Buyer or any Company Entities for
any Post-Closing Tax Period (as hereinafter defined) shall be borne by Buyer or
the appropriate Company Entities, as the case may be. Any refunds or credits in
respect of such Income Tax for any such Post-Closing Tax Period shall be the
property of Buyer or the appropriate Company Entities, as the case may be.
Seller shall bear any and all Taxes resulting from any of the Company Entities
having been (or ceasing to be) included in any Affiliated Group for any taxable
period (or portion thereof) ending on or before the Closing Date, including,
without limitation, (a) any liability for Taxes resulting from a "deferred
intercompany transaction" within the meaning of Treasury Regulation Section
1.1502-13(a)(2) (or any analogous or similar provision under state or local law)
that occurred on or before the Closing Date, (b) any liability of any of the
Company Entities pursuant to Treasury Regulation Section 1.1502-6(a) (or any
analogous or similar provision under state or
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local law), and (c) all Taxes attributable to or arising out of the election
under Section 338(h)(10) of the Code.
6.1.3. Preparation and Filing of Income Tax Returns. Seller shall be
--------------------------------------------
responsible, at its expense, for the preparation and filing of all Income Tax
Returns for any Short Tax Period. Seller shall prepare such Income Tax Returns
in a manner consistent with prior years and shall, in respect of such Income Tax
Returns, determine the income, gain, expenses, losses, deductions and credits of
the Company Entities in a manner consistent with prior practice. The results of
operations of the Company Entities from the first day of the taxable year
through the Closing Date shall be included in Seller's consolidated federal
Income Tax Return and in any consolidated, combined or unitary Income Tax
Returns required to be filed by Seller after the Closing Date. The results of
operations of the Company Entities from the first day of the taxable year
through the Closing Date shall be included in any separate Income Tax Returns
filed by the Company Entities after the Closing Date; provided, however, that
-------- -------
Seller shall prepare (without cost to Buyer or any Company Entity) all such
separate Income Tax Returns for any Short Tax Period (but not for any Tax Period
which includes or ends after the Closing Date) and submit them to Buyer, and
Buyer shall have all such separate Income Tax Returns appropriately executed and
filed on a timely basis. With respect to any Income Tax Return to be prepared
by Seller, Buyer shall, and shall cause each Company Entity to, provide to
Seller information in a manner consistent with past practice for use in
preparation of such Income Tax Returns, in each case, no later than 60 calendar
days after the relevant Tax Period ends. Upon written notice from Seller
stating that applicable Law for the jurisdiction in such notice specifically
prohibits the Company Entities from treating the Closing Date as the last date
of a Short Tax Period, Buyer shall be responsible for preparing and filing in
such designated jurisdictions all Income Tax Returns of the Company Entities for
Tax Periods commencing prior to the Closing Date and not ending on or before the
Closing Date.
6.1.4. Cooperation. Seller and Buyer shall, and shall cause the
-----------
Company Entities to, provide each other with such assistance as may reasonably
be requested by them in connection with the preparation of any Tax Return, any
Tax audit or other examination by any Governmental Authority, or any judicial or
administrative proceedings related to liability for Taxes. Seller and Buyer
shall, and shall cause the Company Entities to, retain and provide each other
with any records or information which may be relevant to such preparation,
audit, examination, proceeding or determination. Such assistance shall include
making employees available on a mutually convenient basis to provide and explain
such records and information and shall include providing copies of any relevant
Tax Returns and supporting work schedules. The Party requesting assistance
hereunder shall reimburse the other for reasonable out-of-pocket expenses
incurred in providing such assistance.
6.1.5. Refund Claims. Seller shall provide Buyer and the Company
-------------
Entities with such assistance as they may reasonably request to prepare any
refund claim attributable to the carry back of any tax losses or tax credits
incurred by Buyer or any Company Entity in any Post-Closing Tax Period to any
consolidated, combined or unitary Income Tax Return of Seller
-31-
or to any separate Income Tax Return of any Company Entity for any Pre-Closing
Tax Period, and Seller shall receive and retain the amount of any resulting
refunds together with any interest thereon upon receipt by any party. Buyer
reserves the right to carry back or carry forward Tax losses as it determines in
its sole discretion.
6.1.6. Tax Sharing Agreements. Any and all Tax (or similar)
----------------------
agreements, arrangements or undertaking among Seller or its Affiliates and the
Company Entities that relate to any liability of the Company Entities for the
Taxes of Seller shall terminate as of the Closing Date and any rights or
obligations resulting from such agreements shall be eliminated as of the Closing
Date.
6.1.7. Notice of Audit. If, in connection with any examination,
---------------
investigation, audit or other proceeding concerning any Income Tax Return
covering the operations of the Company Entities for any Pre-Closing Tax Period,
any Governmental Authority issues to any of the Parties or the Company Entities
a notice of deficiency, a proposed adjustment, an assertion of claim or a demand
concerning the Tax Period covered by such Income Tax Return, the recipient shall
notify the other Party that it has received the same within 20 calendar days of
its receipt.
6.1.8. Audits Controlled by Seller. Seller shall have the sole and
---------------------------
exclusive right, power and authority to negotiate, resolve, settle or contest
any such notice of deficiency, proposed adjustment or assertion of claim or
demand and to represent and act for and on behalf of the Company Entities in
connection with any such examination, investigation, audit or other proceeding,
including refund claims of any Income Tax Return of the Company Entities for Tax
Periods ending on or before the Closing Date. Buyer shall notify Seller in
writing promptly upon learning of any such examination, investigation, audit or
other proceeding, and Seller shall keep Buyer informed of the progress thereof
and consult with Buyer in good faith in connection therewith. Notwithstanding
the first sentence of this Section 6.1.8., Seller shall not resolve, settle,
compromise or abandon any issue or claim without the prior written consent of
Buyer if such action would materially and adversely affect the Income Taxes of
Buyer or any Company Entity in any Post-Closing Tax Period (including the
imposition of income tax deficiencies, the reduction of asset basis on cost
adjustments, the lengthening of any amortization or depreciation periods, the
denial of amortization or depreciation deductions or the reduction of loss or
credit carryforwards). Such consent shall not be unreasonably withheld, and
shall not be necessary to the extent that Seller has indemnified Buyer and the
Company Entities against the effects of any such settlement.
6.1.9. Audits Controlled by Buyer. Buyer shall have the sole and
--------------------------
exclusive right, power and authority to negotiate, resolve, settle or contest
any such notice of deficiency, proposed adjustment or assertion of claim or
demand in connection with any such examination, investigation, audit or other
proceeding of any Income Tax Return of Buyer or any Company Entity for Tax
Periods ending after the Closing Date. To the extent that Seller has
indemnified Buyer and the Company Entities with respect to any such notice of
deficiency, proposed adjustment or assertion or claim or demand herein, Buyer
shall not, and shall not permit the
-32-
Company Entities to, resolve, settle, compromise, or abandon any issue or claim
without the prior written consent of Seller if such action would materially and
adversely affect the Income Tax of Seller for any Tax Period (including the
imposition of income tax deficiencies, the reduction of asset basis on cost
adjustments, the lengthening of any amortization or depreciation periods, the
denial of amortization or depreciation deductions or the reduction of loss or
credit carryforwards). Such consent shall not be unreasonably withheld, and
shall not be necessary to the extent that Buyer notifies Seller that Buyer will
forego any obligation of Seller to indemnify Buyer and the Company Entities
against the effects of any such settlement. Buyer shall keep, and shall cause
the Company Entities to keep, Seller informed of the progress of any such
proceedings and to consult with Seller in good faith in connection therewith.
6.1.10. Section 338 Elections. (a) Buyer shall make an election
---------------------
under Section 338(g) of the Code (and any comparable election under state or
local tax Law) with respect to the Company Entities. Buyer and Seller shall
make, and Seller shall cause the Company Entities to make, an election under
Section 338(h)(10) of the Code (and any comparable elections under state or
local tax Law) with respect to the acquisition of the Company Entities by Buyer.
Buyer and Seller shall cooperate fully with each other, and Seller shall cause
the Company Entities to cooperate fully with Buyer, in the making of such
election. In particular, and not by way of limitation, in order to effect such
election, on or prior to the Closing Date, Buyer and Seller shall jointly
execute, and Seller shall cause the Company Entities to jointly execute with
Buyer, necessary copies of Internal Revenue Service Form 8023 and all
attachments required to be filed therewith pursuant to applicable Law.
(b) Buyer and Seller agree that they shall use their reasonable
efforts to enter into an agreement (the "Asset Allocation Agreement") as soon as
practicable, but in any event no later than 60 calendar days after the Closing
Date, concerning the allocation of the Purchase Price for Income Tax purposes
among the assets held by the Company Entities. Buyer and Seller agree that the
Purchase Price shall include all liabilities which are assumed by Buyer and for
which Buyer does not have rights to indemnification pursuant to this Agreement.
If, 60 calendar days before the last date on which the Section 338(h)(10)
election may be filed, Buyer and Seller have not adopted the Asset Allocation
Agreement as described above, each party shall make its own allocation of the
Purchase Price for Income Tax purposes and for any other purpose.
6.1.11. Tax Indemnification. (a) Subject to the limitations
-------------------
applicable to Seller's indemnification obligation as set forth in Sections
10.1.(d) and 10.4., Seller shall indemnify and hold the Buyer Indemnitees (as
hereinafter defined) harmless from and against any and all Damages (as
hereinafter defined) with respect to (i) any Income Tax which Seller is
obligated to bear under this Section 6.1. and (ii) any Tax (other than Income
Taxes) which are owed, owing, accrued or payable by any Company Entity prior to
the Closing Date.
(b) Subject to the limitations applicable to Buyer's indemnification
obligation as set forth in Section 10.2(e) and 10.4, Buyer shall indemnify and
hold the Seller Indemnitees (as
-33-
hereinafter defined) harmless from and against any and all Damages with respect
to any Income Tax which Buyer is obligated to bear under this Section 6.1.
6.2. Books and Records.
-----------------
6.2.1. Access. For a period of ten years after the Closing, each
------
Party shall provide the other Party with reasonable access during normal
business hours to its books and records and the books and records of the Company
Entities including the personnel employment and medical records (other than
books and records protected by the attorney-client privilege) to the extent that
they relate to the condition or operation of the Company Entities prior to the
Closing and are requested by such Party to prepare its Returns, to respond to
Third Party Claims or Actions, to prepare reports or filings required to be
filed under the Securities Exchange Act of 1934, as amended, or for any other
legitimate purpose specified in writing. Each Party shall have the right, at
its own expense, to make copies of any such books and records. In order to
register the GTS Shares as described in Section 3.8., Buyer will need to file
with the Commission three (3) years of audited consolidated financial statements
of the Company in accordance with Rule 3-05 of Regulation S-X of The Securities
Act of 1933, as amended. Seller agrees to provide whatever assistance is
reasonably required to assist Buyer in completing such audits including securing
representation letters typically provided by management to the auditors in the
course of an audit.
6.2.2. Destruction. For a period of ten years after the Closing,
-----------
neither Party nor any Company Entity shall dispose of or destroy any books and
records of the Company Entities to the extent that they relate to the condition
or operation of the Company Entities prior to the Closing without first offering
to turn over possession thereof to the other Party by written notice at least 90
calendar days prior to the proposed date of disposition or destruction.
6.2.3. Confidentiality. Each Party may take such action as it deems
---------------
reasonably appropriate to separate or redact information unrelated to the
Company Entities from documents and other materials requested and made available
pursuant to this Section and to condition access to materials that it deems
confidential to the execution and delivery of a written agreement by the other
Party not to disclose or misuse such information.
6.2.4. Assistance. Each Party shall, upon written request and at the
----------
requesting Party's expense, make personnel available to assist in locating and
obtaining any books and records of the Company Entities to the extent that they
relate to the condition or operation of the Company Entities prior to the
Closing and make personnel available whose assistance, participation or
testimony is reasonably required in anticipation of, preparation for or the
prosecution or defense of any Third Party Claim (as hereinafter defined) in
which the other Party does not have any adverse interest.
6.3. Notice of Certain Events. Seller shall notify Buyer, and Buyer shall
------------------------
notify Seller, as promptly as practicable, of (a) any notice received by such
Party from any Entity alleging that
-34-
the Consent of such Entity is or may be required in connection with the
transactions contemplated by this Agreement, (b) any notice or other
communication received by such Party from any Governmental Authority in
connection with the transactions contemplated by this Agreement, (c) any Actions
commenced or threatened against such Party or any of its Affiliates that is
reasonably likely to adversely affect such Party's ability to consummate the
transactions contemplated by this Agreement, or (d) any event or occurrence
that, to the knowledge of Buyer or Seller, as the case may be, causes any of the
representations or warranties made by it in this Agreement to be inaccurate in
any material respect as of any date that is relevant for such representations or
warranties.
6.4. IP Matters. (a) On or prior to the Closing Date, Seller shall, or
----------
shall cause one or more of the Continuing Affiliates to, enter into the IP
Assignment (as hereinafter defined) providing for the assignment of all Assigned
Intellectual Property to Buyer or one of its designated Affiliates. For a
period of up to five years following the Closing Date, Seller shall cooperate to
assist Buyer in the preparation and filing of assignment documents with all
Governmental Authorities required to cause title in and to all of the Assigned
Intellectual Property to be transferred to Buyer or one of its designated
Affiliates. Each of the Parties shall pay one-half of the actual out-of-pocket
costs related to such filings and notices; provided that Seller's obligation to
pay such costs shall not exceed $30,000.
(b) On or prior to the Closing Date, Seller shall, or shall cause one
or more of the Continuing Affiliates to enter into an IP License Agreement (as
hereinafter defined), pursuant to which Seller or such Continuing Affiliate
shall grant the Company Entities a perpetual, fully paid-up non-exclusive
license to use the Retained Intellectual Property as set forth in the form of
Exhibit C hereto.
---------
(c) On or prior to the Closing Date, Seller shall, or shall cause one
or more of the Continuing Affiliates to enter into an IP License Agreement,
pursuant to which the Company shall grant Seller or one or more Continuing
Affiliates a perpetual, fully paid-up non-exclusive license to use the Assigned
Intellectual Property.
6.5. Certain Consents. Notwithstanding anything to the contrary in this
----------------
Agreement, this Agreement shall not constitute an agreement to assign or
transfer any interest in any customer purchase order, Contract, License, Permit
or other instrument or arrangement or any claim, right or benefit, or an
agreement to assume any liability, obligation or commitment arising thereunder
or resulting therefrom, if an assignment or transfer or an attempt to make such
an assignment or transfer without the Consent of a third party would constitute
a breach or violation thereof or a breach of Law, or affect adversely the rights
of Buyer or Seller thereunder and such Consent cannot by Law or despite all
necessary and appropriate efforts (other than the payment of money to any third
party or the amendment of the terms of such Contract, License, Permit or other
-35-
instrument or arrangement in any material respect) be obtained; and any transfer
or assignment to, or any assumption by, Buyer of any interest in, or liability,
obligation or commitment under, any such customer purchase order, Contract,
License, Permit or other instrument or arrangement that requires the Consent of
a third party shall be made subject to such Consent being obtained. Prior to
the Closing, each Party (as hereinafter defined) shall use all reasonable
efforts and cooperate in obtaining all Consents necessary to effect the transfer
of all such customer purchase orders, Contracts, Licenses, Permits and other
instruments and arrangements as contemplated hereby; provided, however, that
-------- -------
neither Party shall be required to pay or commit to pay any amount to (or incur
any obligation in favor of) any person from whom any such Consent may be
required (other than nominal governmental filing fees payable to any
Governmental Authority). In the event any such Consent is not obtained on or
prior to the Closing, the Parties shall cooperate, for a period of one year
following the Closing Date, in any lawful and reasonable arrangement to provide
that Buyer shall receive the benefits under any customer purchase orders,
Contracts, Licenses, Permits or other instrument or arrangement not assigned and
transferred at the Closing by reason of the failure to obtain such Consent (a
"Non-Transferred Instrument"), including, if necessary, at the request and
expense of Buyer, enforcing performance by any third party of its obligations in
respect of such Non-Transferred Instrument; provided, however, that Seller shall
-------- -------
bear the expense of such enforcement to the extent it relates to Seller's
failure to obtain such Consent prior to the Closing or to the extent such
expense would have been the responsibility of Seller had the Consent been
obtained; and provided further, that, to the extent the parties are successful
-------- -------
in providing the benefits of such Non-Transferred Instruments to Buyer, Buyer
shall pay, honor and discharge when due all liabilities, obligations and
commitments of Seller related thereto to the extent due to operations conducted
after the Closing Date.
6.6. Guarantees. Prior to the Closing, Seller and Buyer shall cooperate
----------
and use reasonable efforts to secure effective as of the Closing Date, (a) full
releases for Seller and the Continuing Affiliates under the Contracts listed on
Schedule 5.6 and (b) full releases for Seller and the Continuing Affiliates
------------
under or replacements of or substitutions for the Guarantees listed on Schedule
--------
6.6; provided, that any replacements or substitutions shall be obtained at
---
Buyer's expense. From and after the Closing, Buyer shall indemnify and hold
Seller and the Continuing Affiliates harmless from and against all Damages
attributable to all of such Contracts and Guarantees, except to the extent that
such Damages arise from events or conditions that entitle any Buyer Indemnitee
to indemnification pursuant to Article 10 and shall use reasonable efforts to
secure, effective as of the Closing Date, full releases for Seller and the
Continuing Affiliates thereunder, and Seller shall, and shall cause the
Continuing Affiliates to, cooperate with Buyer to secure such releases.
6.7. Legacy Waste and Equipment. On or prior to the Closing, Seller shall
--------------------------
use commercially reasonable efforts to cause the Company to complete the
processing and disposal of (a) the secondary waste generated and customer waste
received by the Company prior to June 30, 1996 as identified in the records of
the Company and (b) the sealands and other waste containers identified on
Schedule 6.7(a) (collectively, "Legacy Waste and Equipment"). In the event the
---------------
processing and disposal of the Legacy Waste and Equipment is not completed prior
to Closing, then the Company shall process and dispose of such remaining Legacy
Waste and Equipment in a timely manner consistent with the Company's practice
since June 30, 1996. The
-36-
rates the Company shall charge for processing Legacy Waste and Equipment are set
forth in Schedule 6.7(b). The reserves on the books of any Company Entity
---------------
relating to the costs of processing and disposal of the Legacy Waste and
Equipment as of the Closing Date ("Legacy Waste Reserve") shall remain on the
books of such Company Entity. To the extent the cumulative actual costs as
evidenced by any invoices received by any Company Entity, to process and dispose
of the Legacy Waste and Equipment ("Actual Legacy Waste Costs") exceeds the
Legacy Waste Reserve, Seller shall, upon demand of Buyer and receipt of
reasonable supporting documentation, pay such excess to the Company. In the
event the Actual Legacy Waste Cost is less than the Legacy Waste Reserve, then
Buyer shall notify Seller of such deficiency and shall pay to Seller the amount
of such deficiency.
6.8. Working Capital. (a) As of March 31, 1997, the Company's Working
---------------
Capital Deficit shall be $4,000,000. Within five (5) days prior to the Closing,
Seller shall estimate the March 31 Working Capital Deficit ("Estimated March 31
Working Capital Deficit"), shall provide notice to Buyer of the Estimated March
31 Working Capital Deficit and shall take such actions, such that on the Closing
Date, the Working Capital Deficit of the Company on March 31, 1997, based on the
Estimated March 31 Working Capital Deficit shall be $4,000,000. Seller and
Buyer shall, within sixty (60) days after the Closing, jointly determine the
Company's March 31 Working Capital Deficit ("March 31 Working Capital Deficit").
In the event the March 31 Working Capital Deficit is greater than $4,000,000,
Seller shall pay to Company the amount by which the March 31 Working Capital
Deficit exceeds $4,000,000. In the event the March 31 Working Capital Deficit
is less than $4,000,000, Buyer or Company shall pay to Seller the amount by
which the March 31 Working Capital Deficit is less than $4,000,000. Any
payments due hereunder shall be made within fifteen (15) days after the March 31
Working Capital Deficit is finally determined without interest. In the event
Seller and Buyer are unable to agree upon the Closing Working Capital Deficit,
such dispute shall be resolved by the Unaffiliated Firm no later than ninety
days after the Closing. The costs, expenses and fees of the Unaffiliated Firm
shall be borne equally by Buyer and Seller. Any payments to be made hereunder
shall be deemed an adjustment to the Cash Payment.
(b) An adjustment to the Purchase Price will be made for cash
collections and cash disbursements made by the Company Entities or by Seller on
behalf of the Company Entities after March 31, 1997 through the Closing Date.
As of the Closing Date, an adjustment will be made to the Cash Payment for the
difference between estimated cash collected and estimated cash disbursements
("Estimated Net Cash Flow") made by the Company Entities or by Seller on behalf
of the Company Entities after March 31, 1997 through the Closing Date. In the
event the estimated cash collected is greater than the estimated cash
disbursements, the difference will be subtracted from the Cash Payment. In the
event the estimated cash collected is less than the estimated cash
disbursements, the difference will be added to the Cash Payment. The Seller
shall within sixty (60) days after the closing determine actual cash collected
and actual cash disbursements made by the Company Entities or by Seller on
behalf of the Company Entities after March 31, 1997 through the Closing Date
("Actual Net Cash Flow"). In the event the Actual Net Cash Flow is greater than
the Estimated Net Cash Flow, Seller shall pay to Buyer
-37-
such difference. In the event the Actual Net Cash Flow is less than the
Estimated Net Cash Flow, Buyer shall pay to Seller the difference. Any payments
due hereunder shall be made within fifteen (15) days after the Actual Net Cash
Flow is finally determined without interest. In the event Seller and Buyer are
unable to agree upon the Actual Net Cash Flow, such dispute shall be resolved by
the Unaffiliated Firm no later than ninety days after the Closing. The costs,
expenses and fees of the Unaffiliated Firm shall be borne equally by Buyer and
Seller. Any payments to be made hereunder shall be deemed an adjustment to the
Cash Payment. Any funds transferred through Seller's clearinghouse shall be
deemed to be cash for purposes hereof.
6.9. Seller Commitment to Services.
-----------------------------
6.9.1. Existing Contracts. Absent a material breach or default by
------------------
the Company which has not been cured within the time period provided in such
agreement, Seller shall not cancel or terminate any existing contracts with any
Company Entity described on Schedule 2.11(a) or on Schedule 2.11(b) prior to the
---------------- ----------------
respective expiration, maturity or termination dates stated therein. Except as
specifically set forth in Section 6.9.2., Seller shall have no obligation to
extend or renew any contract set forth on Schedule 2.11(a) or on Schedule
---------------- --------
2.11(b) or to enter into any agreement for services with Company.
-------
6.9.2. Additional Commitment. Subject to the limitation set forth in
---------------------
this Section 6.9.2., until the second anniversary of the Closing Date, Seller
shall utilize the services of the Company to transport, process and dispose of
any radioactive or mixed commercial waste produced or generated by or resulting
from the operation of the businesses of Seller and its Continuing Affiliates so
long as the fees of the Company for these services are less expensive than the
cost for final disposal, including burial, without any volume and/or mass
reduction, and the fees and other terms of the Company are commercially
reasonable and no more favorable to the Company than may be obtained by the
Company at that time in comparable, arm's length transactions with Entities
(other than Seller or its Continuing Affiliates) who are not subject to
covenants of this nature and kind provided, however, that:
------------------
(a) This Section 6.9.2. shall not obligate or require Seller to
utilize the services of the Company to achieve or realize for the Company
any specified amounts of revenues or to deliver to the Company any
specified volumes of waste;
(b) Seller shall be permitted to utilize the services of any Entity
other than Company, including any Entity engaged in a Competing Service, to
the extent that the revenues realized from services provided to Seller by
the Company exceed those reflected in the Company's 1997 operating budget
in terms of revenues generated therefrom;
(c) Seller shall not be obligated or required to utilize the services
of the Company and shall be permitted to use the services of any Entity
other than the Company, including any Entity engaged in a Competing
Service, to the extent that the Seller is prevented from doing so by the
terms of any arrangement with Seller's customer
-38-
or is required by the terms of any arrangement with Seller's customer to
obtain competitive pricing or other terms for such services for the
customer and Seller, in its reasonable discretion consistent with its
obligations to its customers under such arrangement, determines that the
pricing or terms of the Company for such services are not competitive.
6.10. Xxxxx Flats. As an express condition to the indemnification set
-----------
forth in Section 10.1.(i) Buyer consents to the prosecution of the Aetna
-----
Casualty and Surety v. Nuclear Engineering Co., Civil Action No. 87-CL-03359
----------------------------------------------
(Jefferson County, Kentucky) action in its name and shall permit Seller to
control in its sole discretion and sole expense, the defense and prosecution of
this action. Without limiting the foregoing and conditioned upon Seller's
compliance with its indemnification obligation under Section 10.1.(i) hereof,
Seller shall be permitted to terminate, commute or otherwise modify Facility
Form Policy NF-48, naming Hittman Nuclear & Development Corporation as a named
insured and issued on January 18, 1960, and Supplier & Transporters form NS-332,
naming Hittman Nuclear & Development Corporation as a named insured and issued
February 23, 1977, or to enter into any settlement or compromise of the above-
referenced action. Moreover and conditioned upon Seller's compliance with its
indemnification obligation under Section 10.1.(i) hereof, Buyer agrees to assign
(or to cause any Company Entity to assign) to Seller all rights, claims and
causes of action to the extent relating to the Xxxxx Flats facility including,
to the extent necessary, all rights and causes of action under insurance
policies. Nothing in this paragraph is intended to affect Seller's independent
right to coverage under Facility Form Policy NF-48.
ARTICLE 7. CONDITIONS PRECEDENT TO CLOSING
7.1. Conditions Precedent to Buyer's Obligations. The obligation of Buyer
-------------------------------------------
to consummate the transactions contemplated by this Agreement shall be subject
to the satisfaction of the following conditions prior to or at the Closing, any
of which may be waived in writing by Buyer:
7.1.1. Accuracy of Representations and Warranties. The
------------------------------------------
representations and warranties made by Seller in this Agreement shall be true
and correct as of the Closing Date, except for (a) representations and
warranties made as of a specified date, which shall be true and correct as of
the specified date, or (b) breaches and inaccuracies that do not, either
individually or in the aggregate, have a Material Adverse Effect.
7.1.2. HSR Act. If the HSR Act is applicable to the transactions
-------
contemplated by this Agreement, all applicable waiting periods thereunder shall
have expired or been terminated.
7.1.3. Litigation. No Order shall be in effect forbidding or
----------
enjoining the consummation of the transactions contemplated hereby and no Action
shall be pending or threatened which, if adversely determined, would result in
any such Order.
-39-
7.1.4. Covenants. Seller shall have performed and complied in all
---------
material respects with all covenants and agreements required by this Agreement
to be performed by Seller prior to or at the Closing.
7.1.5. Deliveries. Seller shall have delivered to Buyer the
----------
documents, instruments and certificates required by Section 8.2.
7.1.6. Required Consents and Approvals. The Consents and Approvals
-------------------------------
from any Governmental Authority or any other Entity set forth on Schedule 7.1.6
--------------
shall have been obtained and shall be effective and in form and substance
satisfactory to Buyer.
7.1.7. Material Adverse Change. After the date hereof, there shall
-----------------------
have been no event occur or condition change that has either individually, or in
the aggregate, a Material Adverse Effect.
7.1.8. Resignation of Directors. If and to the extent requested by
------------------------
Buyer, the existing members of the board of directors of the Company Entities
shall have submitted resignations to be effective upon the Closing.
7.2. Conditions Precedent to Seller's Obligations. The obligation of
--------------------------------------------
Seller to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction of the following conditions prior to or at the
Closing, any of which may be waived in writing by Seller:
7.2.1. Truth of Representations and Warranties. The representations
---------------------------------------
and warranties made by Buyer in this Agreement shall be true and correct in all
material respects as of the Closing Date.
7.2.2. HSR Act. If the HSR Act is applicable to the transactions
-------
contemplated by this Agreement, all applicable waiting periods thereunder shall
have expired or been terminated.
7.2.3. Litigation. No Order shall be in effect forbidding or
----------
enjoining the consummation of the transactions contemplated hereby and no Action
shall be pending or threatened which, if adversely determined, would result in
any such Order.
7.2.4. Covenants. Buyer shall have performed and complied in all
---------
material respects with all covenants and agreements required by this Agreement
to be performed by Buyer prior to or at the Closing.
7.2.5. Deliveries. Buyer shall have delivered to Seller the payments
----------
and documents required by Section 8.3.
-40-
ARTICLE 8. CLOSING
8.1. Time and Place. Subject to the terms and conditions of this
--------------
Agreement, the Closing shall take place at the offices of Xxxxx, Day, Xxxxxx &
Xxxxx, 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx at 10:00 a.m., on
the first business day following the satisfaction or waiver of all of the
conditions set forth in Article 7 (excluding those set forth in Sections 7.1.5.
and 7.2.5.), or at such other time and place as the Parties shall agree upon in
writing (the "Closing Date"). The Closing shall be deemed effective at 11:59
p.m., Pittsburgh time, on the Closing Date.
8.2. Deliveries by Seller. At the Closing, Seller shall deliver or cause
--------------------
to be delivered to Buyer the following:
(a) Certificates representing all of the Shares, together with duly
executed stock powers in favor of Buyer.
(b) Certificates representing the capital stock owned, to the extent
existing, by the Company in the other Company Entities.
(c) The stock books, stock ledgers, minute books and corporate seal
(if any) of each of the Company Entities.
(d) The recorded certificate of incorporation, as amended or
supplemented to date, (or comparable instrument) of Seller and the Company
Entities, recently certified by the Secretary of State of the jurisdiction in
which such Entity is domiciled.
(e) A certificate of the Secretary or Assistant Secretary of Seller
concerning (i) its Charter Documents, (ii) the adoption of resolutions by its
board of directors authorizing the transactions contemplated by this Agreement
and (iii) the incumbency of its officers, all in form and substance satisfactory
to Buyer.
(f) Certificates of the Secretaries or Assistant Secretaries of the
Company Entities, or a certificate of an executive officer of Seller, concerning
the Charter Documents (or comparable instruments) of the Company Entities.
(g) Recent long form (if available) good standing certificates for
Seller and the Company Entities issued by the Secretaries of State of the
jurisdictions in which Seller and the Company Entities are domiciled and for the
Company Entities certificates of qualification to do business as a foreign
corporation in each of the jurisdictions in which such Company Entity is
qualified.
-41-
(h) A certificate signed by an executive officer of Seller and dated
the Closing Date certifying that the conditions set forth in Sections 7.1.1. and
7.1.4. have been satisfied.
(i) A receipt for the payment of the Purchase Price made as
contemplated by Section 1.3.
(j) A duly executed IP Assignment.
(k) One or more duly executed IP License Agreements.
(l) The Transition Services Agreement, duly executed by Seller and/or
one or more Continuing Affiliates, in substantially the form of Exhibit A.
(m) A written opinion addressed to Buyer from counsel for Seller, who
may be an attorney in the office of the General Counsel of Seller, in
substantially the form of Exhibit D.
---------
(n) A resignation from each employee, officer and director of Seller
or any Continuing Affiliate serving at the request of Seller as an officer or
director of a Company Entity, from each such position and a duly executed
resignation of each of the directors of the Company Entities, effective as of
the Closing Date.
8.3. Deliveries by Buyer. At the Closing, Buyer shall deliver or cause to
-------------------
be delivered to Seller the following:
(a) The payment of the Purchase Price pursuant to Section 1.3.,
including Certificates representing the GTS Shares.
(b) The recorded Certificate of Incorporation, as amended or
supplemented (or comparable instrument) of Buyer, recently certified by the
Secretary of State of the state in which Buyer is domiciled.
(c) A certificate of the Secretary or Assistant Secretary of Buyer
concerning (i) Buyer's Charter Documents, (ii) the adoption of resolutions by
its board of directors authorizing the transactions contemplated by this
Agreement, and (iii) the incumbency of its officers, all in form and substance
satisfactory to Seller.
(d) A recent long form (if available) good standing certificate for
Buyer issued by the Secretary of State of the state in which Buyer is domiciled.
-42-
(e) A certificate signed by an executive officer of Buyer and dated
the Closing Date certifying that the conditions set forth in Sections 7.2.1. and
7.2.4. have been satisfied.
(f) The Transition Services Agreement, duly executed by Buyer and/or
one or more post-Closing subsidiaries of Buyer.
(g) A written opinion addressed to Seller from counsel for Buyer, who
may be an attorney in the office of the General Counsel of Buyer, in
substantially the form of Exhibit E.
---------
(h) An agreement entered into with Molten Metal Technology, Inc. and
MMT of Tennessee, Inc. pursuant to which Buyer agrees to abide by the
noncompetition covenants as contemplated by Section 9.1.(f) of the MMT
Agreement.
ARTICLE 9. TERMINATION PRIOR TO CLOSING DATE
9.1. Termination. This Agreement may be terminated prior to the Closing
-----------
Date only as follows:
(a) By the mutual written consent of the Parties;
(b) By either Party immediately upon written notice to the other
Party, if the Closing has not occurred on or before May 31, 1997 (the "Outside
Date") and the failure of the Closing to have occurred has not resulted from the
failure of the terminating party to comply with the terms of this Agreement or a
breach of the terminating party's representations and warranties made herein;
(c) By either Party immediately upon written notice to the other
Party if an Order is issued that enjoins or prohibits the Closing and becomes
final and non-appealable; or
(d) By either party immediately upon written notice to the other
party if all of the conditions to such party's obligation to proceed with the
Closing as set forth in this Agreement can not be met prior to the Outside Date
and provided that the inability of the terminating party to satisfy such
condition has not resulted from the failure of the terminating party to comply
with the terms of this Agreement or a breach of the terminating party's
representations and warranties made herein; or
(e) By Buyer if, after the date hereof, there shall have been an
event occur or condition change that has either individually, or in the
aggregate, a Material Adverse Effect, provided that such event or condition does
not result from the failure of Buyer to comply in all material respects with the
terms of this Agreement or a material breach of Buyer's representations and
warranties made herein.
-43-
9.2. Effect of Termination. If this Agreement terminates pursuant to
---------------------
Section 9.1., no Party shall have any liability or obligation to the other Party
hereunder, other than the confidentiality obligations set forth in Section 5.2
and in the Confidentiality Agreement and the provisions of Sections 9.3. and
12.8. However, such termination shall not relieve any Party of liability for
any willful, material breach of this Agreement.
9.3. Break-Up Fee. In the event the Closing does not occur (other than
------------
as a result of a failure of a condition to Seller's obligation to proceed with
the Closing as set forth in Sections 7.2.1., 7.2.4. or 7.2.5.), then Seller
shall reimburse Buyer for reasonable out-of-pocket fees and expenses incurred by
Buyer in connection with the transactions contemplated herein, including,
without limitation, the fees and disbursements of Buyer's outside counsel,
independent accountants, and nonaffiliated consultants and advisors, in an
aggregate amount not to exceed $350,000. For purposes hereof, International
Technology Corporation shall be deemed a nonaffiliated consultant or advisor of
Buyer.
ARTICLE 10. INDEMNIFICATION AND PROCEDURES
10.1. Indemnification by Seller. Subject to the other provisions of this
-------------------------
Article 10, Seller shall indemnify and hold Buyer, its Affiliates and their
respective employees, representatives, controlling persons, officers, directors,
agents, successors and assigns (the "Buyer Indemnities") harmless from and
against any and all Damages suffered by any Buyer Indemnitee arising out of:
(a) The breach of any representation or warranty made by Seller in
this Agreement or in any certificate delivered by Seller at the Closing;
provided, however, that notwithstanding the foregoing, Seller's obligations
hereunder shall be limited as follows: (i) Buyer Indemnities shall have no claim
for a breach of Section 2.11.(b) in the event a purchase order, which was
required to be scheduled, was not listed on Schedule 2.11.(b) and the pricing
terms applicable to such purchase order are either (X) set forth in the Material
Contract pursuant to which the purchase order was issued, (Y) are the same as
those in effect at the Company immediately before its receipt of the purchase
order, or (Z) are then current prevailing pricing terms at the Company; (ii) any
Damages related to the breach of Section 2.11.(b) in the event a purchase order
which was required to be scheduled was not listed on Schedule 2.11.(b), shall be
limited to the Company's Direct Costs to complete such purchase order which are
not recovered from the customer; (iii) the only Damages which Buyer Indemnitees
may recover for a breach of Section 2.11.(c) in the event a teaming and/or
secrecy agreement, which was required to be scheduled, was not listed on
Schedule 2.11.(c) (an "Unscheduled Teaming Agreement"), are those Damages
incurred as a result of: (x) a claim by a counterparty to an Unscheduled Teaming
Agreement that is determined to be legal, valid and binding, which claim arises
out of Buyer's breach of such agreement, so long as Buyer did not have knowledge
of the existence of such agreement prior to the time when such breach could
reasonably have been avoided without penalty to Buyer; or (y) a claim by a
counterparty to another legal, valid and binding agreement
-44-
with Buyer, which claim arises out of Buyer's breach of such agreement as a
consequence of Buyer's performance under an Unscheduled Teaming Agreement the
existence of which Buyer did not have knowledge at the time when it entered into
such agreement; (iv) Buyer Indemnitees shall have no claim for a breach of
Section 2.11.(d) with respect to a Proposal which was required to be scheduled
and was not scheduled if, on or before seven (7) calendar days after the
Closing, such Proposal could have been withdrawn without penalty; and (v) any
Damages related to the absence from Schedule 2.11.(d) of a Proposal which was
required to be scheduled shall be limited to the Company's Direct Costs to
complete the contract arising out of such Proposal which are not recovered from
the customer.
(b) The breach of any covenant or agreement by Seller in this
Agreement or by Seller in any other agreement executed and delivered at the
Closing, provided, that, notwithstanding the foregoing, Buyer Indemnitees shall
have no claim for Damages related to the costs incurred by the Company Entities
to complete (i) the modification of the ventilation system for the SEG(R) Metal
Melt facility, (ii) the construction and implementation of the stormwater
collection system as contemplated by Section 7.7. of the MMT Agreement, or (iii)
the performance of the Trojan Contract;
(c) The Advanced Systems Division Assets and Advanced Systems
Division Liabilities and any Tax which any of the Buyer Indemnitees may incur as
a result of the distribution or spin-off of the Advanced System Division Assets
and Advanced System Division Liabilities;
(d) The indemnification obligations of Seller set forth in
Sections 4.14. and 6.1.11.(a);
(e) To the extent not indemnifiable under any other subsections
of this Section 10.1, (i) any liabilities for current deferred federal and state
Income Taxes, or (ii) claims pending as of the Closing Date for liabilities
which consistent with past practice have been recorded by or reflected in the
financial statements of Seller on behalf of the Company Entities and as are
generally described in clause (ii) on Schedule 2.5.1(b);
-----------------
(f) Subject to any applicable deductibles and policy limits and
to the extent not covered by insurance policies or self insurance programs
maintained by the Buyer or Company Entities on or after the Closing Date, any
claims which arise out of liabilities for Occurrences which would have been
covered by the insurance policies listed on Schedule 2.10, including, but not
-------------
limited to, any worker's compensation claims;
(g) Any liabilities of the Company Entities which relate to or
arise out of the Benefit Plans listed on Schedule 2.17.6;
---------------
(h) Any liabilities of the Company Entities which relate to an
unasserted claim by Xxxx Constructors, Inc. arising out of the construction of
the resin processing facility
-45-
jointly owned, at that time by Molten Metal Technology, Inc. and the Company and
which is referenced on Schedule 2.5.2;
(i) Any liability of the Company Entities arising out of or
related to the disposal on or prior to the Closing Date of Hazardous Substances
or Regulated Substances at the following facilities: (i) the Xxxxx Flats nuclear
waste disposal facility in Xxxxxxx County, Kentucky or (ii) the Ramp Industries
site;
(j) Any liabilities related to or arising out of items one
through eleven, inclusive, set forth on Schedule 2.12; and
-------------
(k) Any and all liabilities of Westinghouse Transport Leasing
Corporation relating to events or conditions occurring prior to the Closing Date
except as such liability relates to a breach of Seller's representation or
warranty in this Agreement related to any Permit held by such corporation.
10.2. Indemnification by Buyer. Subject to the other provisions of this
------------------------
Article 10, Buyer shall indemnify and hold Seller, the Continuing Affiliates and
their respective employees, representatives, controlling persons, officers,
directors, agents, successors and assigns (the "Seller Indemnitees") harmless
from and against any Damages suffered by any Seller Indemnitee arising out of:
(a) the breach of any representation or warranty made by Buyer
in this Agreement or in any certificate delivered by Buyer at the Closing;
(b) the breach of any covenant or agreement by Buyer in this
Agreement or by Buyer in any other agreement executed and delivered at the
Closing;
(c) the operations of any Company Entity, except to the extent
that such Damages arise from events or conditions that entitle any Buyer
Indemnitee to indemnification pursuant to this Article 10, or that would have
entitled any Buyer Indemnitee to indemnification pursuant to this Article 10 but
for the provisions of Section 10.4.4.;
(d) the obligations of Seller and the Company Entities under the
MMT Agreement or any other Acquisition Agreements, except to the extent that
such Damages arise from events or conditions that entitle Buyer and the Company
Entities to indemnification pursuant to Sections 4.14. and 10.1.(e) hereof; and
(e) The indemnification obligations of Buyer set forth in
Section 6.1.11.(b).
-46-
10.3. Notice and Resolution of Claims.
-------------------------------
10.3.1. Notice. Each person entitled to indemnification pursuant
------
Section 10.1. or Section 10.2. (an "Indemnitee") shall promptly give written
notice to the indemnifying Party after obtaining knowledge of any claim that it
may have pursuant to this Article 10. Such notice shall set forth in reasonable
detail the claim and the basis for indemnification. Failure to give such
written notice in a timely manner shall not release the indemnifying Party
except to the extent such Party is prejudiced by such failure.
10.3.2. Right to Assume Defense. If such claim for indemnity shall
-----------------------
arise from an Action involving a third party (a "Third Party Claim"), the
Indemnitee shall permit the indemnifying Party to assume its defense provided
that the indemnifying Party employs counsel that shall be reasonably
satisfactory to the Indemnitee. If the indemnifying Party assumes the defense
of such Third Party Claim, it shall take all steps necessary to investigate,
defend or settle such Action and shall, subject to Section 10.4., hold the
Indemnitee harmless from and against any and all Damages caused by or arising
out of any settlement approved by the indemnifying Party or any judgment in
connection with such Third Party Claim. Without the written consent of the
Indemnitee, the indemnifying Party shall not consent to entry of any judgment or
enter into any settlement that (a) does not include an unconditional and
complete release of the Indemnitee by the claimant or plaintiff making the Third
Party Claim or (b) imposes restrictions adversely affecting the future conduct
of the business of such Indemnitee or its Affiliates. The Indemnitee may
participate in such defense or settlement through its own counsel, but at its
own expense unless (i) the indemnifying Party shall have failed to assume the
defense of a Third Party Claim pursuant to Section 10.3.3., (ii) the employment
of such counsel has been specifically authorized in writing by the indemnifying
Party or (iii) the named parties to any such Third Party Claim (including
impleaded parties) include both the Indemnitee and the indemnifying Party and
such Indemnitee shall have been advised in writing by its counsel that there may
be conflicting interests between the Indemnitee and the indemnifying Party in
the legal defense of such Third Party Claim.
10.3.3. Failure to Assume Defense. Failure by the indemnifying
-------------------------
Party to notify the Indemnitee of its election to assume the defense of any
Third Party Claim within 30 calendar days after its receipt of notice thereof
shall be deemed a waiver by the indemnifying Party of its right to assume the
defense of such Third Party Claim. In such event, the Indemnitee may defend
against such Third Party Claim in any manner it deems appropriate. The
Indemnitee may settle such Third Party Claim or consent to the entry of any
judgment with respect thereto, provided that it acts reasonably and in good
faith.
10.3.4. Right to Control Cleanup and Access. With respect to any
-----------------------------------
indemnification claim under Section 10.1(a) for Damages involving a Cleanup,
indemnity by Seller is conditioned upon the following: (i) Buyer shall afford
Seller advance notice of any Buyer initiated Cleanup, and the opportunity to
participate, at Seller's expense, in the evaluation and determination of the
approach to and execution of the Cleanup, if it appears that the cost of
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the Cleanup will exceed the deductible provided for in Section 10.4.2.; (ii)
once the deductible for Cleanup set forth in Section 10.4.2. has been exceeded,
Seller shall have the right to control and to implement the Cleanup and to
negotiate with the cognizant Governmental Authorities as required to complete
the Cleanup; provided however, Buyer shall have the right to participate at
----------------
Buyer's own expense in any such deliberations with the Governmental Authorities
and Seller shall not, without the prior written consent of Buyer (which shall
not be unreasonably withheld) commit to or take any measure or course of action
that imposes any unreasonable burden upon the operation or conduct of the
business by Buyer; (iii) Buyer grants to Seller a continuing right of reasonable
access to the affected Owned Real Property or affected real property subject to
Leases by any Company Entity for the purpose of Seller undertaking the Cleanup.
Buyer agrees to obtain a similar right of access from Buyer's tenants, if any,
and if required; and Buyer shall cooperate with Seller toward effecting such
Cleanup and provide Seller with reasonable access to Buyer's employees and
documents in Buyer's possession with respect to environmental conditions on the
affected properties.
10.4. Limits on Indemnification.
-------------------------
10.4.1. Indemnification Threshold. For purposes of determining
-------------------------
those Damages arising from breaches of representations, warranties or covenants
that will be considered immaterial in nature or not to have had a Material
Adverse Effect and accordingly not subject to indemnification hereunder, Buyer
and Seller have agreed to use predictable dollar thresholds as provided in this
Section 10.4.1. Accordingly, the Parties agree that with respect to any
representation, warranty or covenant referred to in Section 10.1.(a), 10.1.(b),
10.2.(a) or 10.2.(b), if such representation, warranty or covenant contains a
materiality qualification (e.g., "material", "materiality," "in all material
respects," "a Material Adverse Effect," or similar qualifications), such
materiality qualification shall be deemed to have been met, and such
representation, warranty or covenant shall be deemed to have been breached, if
Buyer Indemnitees or the Seller Indemnitees, as applicable, incur or are alleged
to have incurred Damages for any breach, with respect to each individual claim,
that exceed Forty Thousand Dollars ($40,000) (such excess over $40,000 being the
------
"Threshold Damages" for such claim). The dollar threshold set forth in this
Section 10.4.1 shall not apply to and, subject to Sections 10.4.2. and 10.4.3.
hereof, every dollar of Damages shall be indemnifiable for claims for
indemnification under Sections 10.1.(c), 10.1.(e), 10.1.(f), 10.1.(g), 10.1.(h),
10.1.(i), 10.1.(j) or 10.1.(k) or for claims for indemnification for breach of
the covenant set forth in Section 6.8.
10.4.2. Deductible. Seller shall be liable to the Buyer
----------
Indemnitees for Damages that are indemnifiable pursuant to Section 10.1. and
Buyer shall be liable to the Seller Indemnities for Damages that are
indemnifiable pursuant to Section 10.2. only to the extent that the aggregate
amount of the Threshold Damages to Buyer Indemnities or Seller Indemnitees,
respectively, exceed the deductible of Seven Hundred Thousand Dollars
($700,000). The dollar deductible set forth in the first sentence of this
Section 10.4.2 shall not apply to and, subject to the last sentence of this
Section 10.4.1. and Section 10.4.3., every dollar of Damages shall be
indemnifiable for claims for indemnification under Sections 10.1.(c), 10.1.(e),
10.1(f), 10.1.(g),
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10.1.(h) 10.1.(i), 10.1.(j) or 10.1.(k) or for claims for indemnification for
breach of the covenant set forth in Section 6.8. Seller shall be liable to the
Buyer Indemnitees for Damages that are indemnifiable pursuant to Section 10.1.
for breaches of the representations or warranties of Seller in Section
2.13.2.(g) only to the extent that the aggregate amount of the Damages to Buyer
Indemnitees exceed the deductible of One Million Dollars ($1,000,000), and
Damages which are applied to the foregoing deductible shall not be applied to
the deductible set forth in the first sentence of this Section 10.4.2. Seller
shall be liable to the Buyer Indemnitees for Damages that are indemnifiable
pursuant to Section 10.1.(j) only to the extent that the aggregate amount of the
Damages to Buyer Indemnities exceed the deductible of One Million Dollars
($1,000,000), and Damages which are applied to the foregoing deductible shall
not be applied to the deductible set forth in the first sentence of this Section
10.4.2.
10.4.3. Limit of Liability. The total aggregate liability of
------------------
Seller for any claims for Damages arising under Section 10.1. of this Agreement
shall not exceed Thirty Million Dollars ($30,000,000).
10.4.4. Survival. The representations and warranties contained in
--------
Articles 2 and 3 of this Agreement shall survive until the second anniversary of
the Closing Date in the case of all representations and warranties except (a)
those representations and warranties set forth in Section 2.18. (Taxes), which
shall survive until ninety (90) days after the expiration (including extensions)
of the applicable statute of limitations and (b) those representations and
warranties set forth in Sections 2.2 or 3.2 (Authorization, Execution and
Validity) or Section 2.3.1. (Capitalization of the Company), which shall survive
indefinitely and (c) those representations and warranties set forth in Sections
2.1. and 3.1. (Organization; Power and Authority) which shall survive
indefinitely and (d) those representations and warranties set forth in Section
2.13.2.(g) which shall survive until the first anniversary of the Closing Date.
Neither Party shall have an obligation to indemnify the other pursuant to
Section 10.1.(a) or 10.2.(a) unless notice of a claim for indemnification shall
have been given hereunder prior to the end of the applicable survival period.
However, the obligation to indemnify for a claim for which timely notice in
accordance with the terms and provisions of this Agreement was provided by the
Party seeking indemnification hereunder shall extend until such time as the
remedy, including, without limitation, the payment of monetary damages, is
completed.
10.4.5. Actual Knowledge. Neither Party shall have any liability
----------------
hereunder for Damages arising from or relating to a breach of any representation
or warranty if the indemnifying Party can establish that the other Party had
actual knowledge on or before the Closing Date of the condition or event
constituting such breach.
10.4.6. Damages; Mitigation. Neither Party shall have any
-------------------
obligation to indemnify any Seller Indemnitee or Buyer Indemnitee for any
Consequential Damages (as hereinafter defined) or for Damages that are (a)
caused, contributed to or exacerbated by the actions of any Buyer Indemnitee (in
the case of Seller's indemnification obligations) or any Seller Indemnitee (in
the case of Buyer's indemnification obligations), (b) recovered by the
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Indemnitee from any third party (including insurers) or (c) offset by tax
savings realized on account of such Damages by the Indemnitee or any of its
Affiliates. If the amount of any Damages, at any time subsequent to the payment
thereof by an indemnifying Party to the Indemnitee pursuant to this Article 10,
is reduced by recovery, settlement or otherwise under or pursuant to any
insurance coverage or pursuant to any claim, recovery settlement against or with
any third party (including any insurer), the amount of such reduction (net of
any out-of-pocket expenses incurred in obtaining such reduction) shall promptly
be repaid by the Indemnitee to the indemnifying Party.
10.4.7. Exclusive Remedy. In the absence of actual fraud and
----------------
except as set forth in Section 4.10.4. and for breaches of Sections 4.11. and
4.12., this Article 10 sets forth the exclusive remedy for Damages owing from
Seller to the Buyer Indemnitees and from Buyer to the Seller Indemnitees that
arise from the matters described in Sections 10.1. and 10.2. Each of the Parties
hereby waives any claim or cause of action for Damages that it might assert
against the other, other than pursuant to this Article 10 or in connection with
actual fraud, whether under common law or under any Environmental Law,
securities, trade regulation or other Law.
10.5. Indemnity Payments. All payments made pursuant to this Article 10
------------------
(other than interest payments) and to the indemnification provisions of Section
6.1. shall be treated by the Parties on all Income Tax Returns as an adjustment
to the Purchase Price, except to the extent that a different treatment is
required by Law.
10.6. Payment and Assignment of Claims.
--------------------------------
10.6.1. Payment. The indemnifying Party shall promptly pay or
-------
reimburse, as appropriate, the Indemnitee for any Damages to which it is
entitled to be indemnified hereunder. Neither Party shall permit any exercise
of any right of set-off against the other Party.
10.6.2. Assignment. If any of the Damages for which an indemnifying
---------
Party is responsible or allegedly responsible under this Article 10 or the
indemnification provisions of Section 6.1. are recoverable or potentially
recoverable against any third party at the time when payment is due hereunder,
the Indemnitee shall assign any and all rights that it may have to recover such
Damages to the indemnifying Party or, if such rights are not assignable for any
reason, the Indemnitee hereunder shall attempt in good faith to collect any and
all damages and losses on account thereof (net of any out-of-pocket expenses
incurred in connection with such collection) from such third party for the
benefit of the indemnifying Party in the event and to the extent that the
indemnifying Party has already paid or reimbursed the Indemnitee for such
Damages.
10.7. Other Indemnitees. Buyer shall cause the Buyer Indemnitees, and
-----------------
Seller shall cause the Seller Indemnitees, to comply with the provisions and to
abide by the limitations set forth in this Article 10.
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10.8. Customer Discounts. Schedule 10.8 sets forth a list of all
------------------ -------------
customers of the Company Entities or Seller with whom the Company or Seller has
agreed that the Company Entities will provide services at discounted rates
pursuant to any of the Seller steam generator litigation settlement agreements
with a customer. After the Closing and during the term that any such discount
or discounted rate remains in effect, Seller shall, upon demand from the Company
reimburse the Company for the amount of the discount below applicable prevailing
market rates given to the customers listed on Schedule 10.8. Any such demand
-------------
shall be accompanied by documentation reasonably satisfactory to Seller
indicating the services provided to such customers and the rates charged
therefor.
10.9. Waiver of Contribution. Seller shall not have any right to seek
----------------------
contribution from any of the Company Entities in the event that Seller is
required to make any payments under this Article 10.
10.10. Successor Indemnification Obligation. The indemnification
------------------------------------
obligations of Buyer and Seller pursuant to this Article 10 shall be binding
upon any successor to Buyer or Seller that is not a Permissible Assignee under
Section 12.2. Without limiting the generality of the foregoing, except for a
Permissible Assignee, the indemnification obligations of Buyer and Seller shall
be binding upon any successor to a significant portion of Buyer's or Seller's
business, by way of merger, consolidation, statutory share exchange, sale of
all, substantially all, or any significant amount of a Party's assets, or the
distribution of any significant amount of a Party's business or assets by way of
spin-off, split-off or similar transaction; provided that the operation of this
Section 10.10. shall not limit the indemnification obligations of Buyer or
Seller to the extent that Buyer or Seller remains in legal existence following
any of the foregoing transactions. Further, this Section 10.10. shall not limit
the ability of a Party and its successor to agree solely between themselves to
contribute to the indemnification obligations hereunder.
ARTICLE 11. EMPLOYEE MATTERS
11.1. Continuing Benefits and Benefit Plans. Except as otherwise
-------------------------------------
specifically provided in this Article 11, upon the Closing, the Company Entities
shall assume the Company Benefit Plans and be solely responsible for all assets
and liabilities (except for liabilities for which Buyer is entitled to
indemnification under Article 10) with respect to current and former Employees
under the Company Benefit Plans.
11.2. Rights of Employees. Nothing herein expressed or implied by this
-------------------
Agreement shall confer upon any current or former Employee, or legal
representative thereof, any rights or remedies, including, without limitation,
any right to employment for any specified period, of any nature or kind
whatsoever, under or by reason of this Agreement.
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ARTICLE 12. MISCELLANEOUS
12.1. Severability. If any provision of this Agreement shall be held
------------
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions of this Agreement shall not be affected or impaired
thereby. Such provision shall be deemed modified to the extent necessary to
render it legal, valid and enforceable, and if no such modification shall render
it legal, valid and enforceable, then this Agreement shall be construed as if
not containing the provision held to be invalid, and the rights and obligations
of the parties shall be construed and enforced accordingly.
12.2. Successors and Assigns. The terms and conditions of this Agreement
----------------------
shall inure to the benefit of and be binding upon the successors and assigns of
the Parties; provided, however, that this Agreement may not be assigned or
-------- -------
delegated by any Party except to a Permissible Assignee.
12.3. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall for all purposes be deemed to be an original
and all of which when taken together shall constitute the same instrument.
12.4. Headings. The headings of the Articles and Sections are inserted
--------
for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction hereof.
12.5. Waiver. Any of the terms or conditions of this Agreement may be
------
waived in writing at any time by the Party which is entitled to the benefits
thereof. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of such provision at any time in the future or a
waiver of any other provision hereof.
12.6. No Third-Party Beneficiaries. Nothing in this Agreement shall
----------------------------
create any third-party beneficiary rights in any person or Entity other than the
Indemnitees.
12.7. Sales and Transfer Taxes. Seller and Buyer shall each be
------------------------
responsible for and pay one-half of all sales, transfer, deed, duties, stamp,
notary public and other similar taxes, duties and transfer fees applicable to
the transactions contemplated by this Agreement, including fees to record
assignments.
12.8. Other Expenses. Except as otherwise expressly provided for herein
--------------
or in any agreement entered into on the date hereof, Seller and Buyer shall each
pay all costs and expenses incurred by it or on its behalf in connection with
this Agreement and the transactions contemplated hereby, including fees and
expenses of its own financial consultants, accountants and legal counsel. Buyer
shall pay the cost of all updates of any surveys or title insurance policies
that it deems necessary or advisable.
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12.9. Notices. Any notice, request, instruction, consent or other
-------
to be given hereunder by either party hereto to the other party shall be in
writing and delivered personally, by telecopy or sent by registered or certified
mail, postage prepaid, as follows:
If to Seller:
Westinghouse Electric Corporation
Gateway Center
00 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Chief Financial Officer
Fax Number: (000) 000-0000
with a copy to:
Westinghouse Electric Corporation
Gateway Center
00 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Office of the General Counsel
Fax Number: (000) 000-0000
If to Buyer:
GTS Duratek, Inc.
00000 Xxx Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: President and Chief Executive Officer
Fax Number: (000) 000-0000
with a copy to:
Xxxxxxxx X. Xxxxxxx, Esquire
Piper & Marbury L.L.P.
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Fax Number: (000) 000-0000
or at such other address for a Party as shall be specified in writing by that
Party. Any notice which is delivered personally or by telecopy to the addresses
provided herein shall be deemed to have been duly given to the Party to whom it
is directed upon actual receipt by such Party. Any notice which is addressed
and mailed in the manner herein provided shall be deemed given to the Entity to
which it is addressed when received.
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12.10. Governing Law; Interpretation. This Agreement shall be construed
-----------------------------
in accordance with and governed by the Laws of the State of Delaware applicable
to agreements made and to be performed wholly within such jurisdiction. Unless
specifically stated otherwise, references to Articles, Sections, Exhibits and
Schedules refer to Articles, Sections, Exhibits and Schedules in this Agreement.
References to "includes" and "including" mean "includes without limitation" and
"including without limitation."
12.11. Public Announcements. Seller and Buyer shall agree on the terms of
--------------------
the press releases to be issued upon the execution of this Agreement and shall
consult with each other before issuing any other press releases or disclosures
with respect to this Agreement and the transactions contemplated hereby,
including any termination of this Agreement for any reason, except in the case
where the person making such disclosure has determined in good faith that such
disclosure is required by law, rule, regulation, judicial or administrative
process (in which case the disclosing party shall use reasonable efforts to give
notice to allow the other party prior to making such disclosure and, reasonably
practicable in the circumstances, give such other party the opportunity to
review and comment upon the proposed disclosure).
12.12. Exclusive Jurisdiction and Consent to Service of Process; Jury
--------------------------------------------------------------
Waiver. The Parties agree that any legal action, suit or proceeding arising out
------
of or relating to this Agreement or the transactions contemplated hereby may be
instituted in a federal court sitting within the Commonwealth of Pennsylvania or
the State of Maryland, which shall be the exclusive venues of said legal
proceedings. Each Party waives any objection which such party may now or
hereafter have to the laying of venue of any such Action in any such court, and
irrevocably submits to the jurisdiction of any such court in any such action,
suit or proceeding. Any and all service of process and any other notice in any
such Action shall be effective against such Party when transmitted in accordance
with Section 12.9. Nothing contained herein shall be deemed to affect the right
of any Party to serve process in any manner permitted by Law. EACH OF SELLER AND
BUYER WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING
(WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
12.13. Entire Agreement; Amendment. This Agreement, including all
---------------------------
Schedules and Exhibits hereto, the Confidentiality Agreement and the other
written agreements, if any, entered into on the date hereof or delivered
herewith constitute the sole understanding of the Parties with respect to the
matters contemplated hereby and thereby and supersede and render null and void
all prior agreements and understandings between the Parties with respect to such
matters, including that certain letter dated January 27, 1997 from Seller to
Buyer. No amendment, modification or alteration of the terms or provisions of
this Agreement, including all Schedules and Exhibits, shall be binding unless
the same shall be in writing and duly executed by the Party against whom such
would apply.
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12.14. Specific Performance. The Parties acknowledge and agree that the
--------------------
breach of certain provisions of this Agreement could not be adequately
compensated with monetary damages, and the Parties hereto agree, accordingly,
that injunctive relief and specific performance shall be appropriate remedies to
enforce certain provisions of this Agreement and waive any claim or defense that
there is an adequate remedy at law for such breach; provided, however, that
nothing herein shall limit the remedies herein, legal or equitable, otherwise
available and all remedies herein are in addition to any remedies available at
law or otherwise.
ARTICLE 13. DEFINITIONS; INTERPRETATION
13.1. Definitions. For purposes of this Agreement, the terms set forth
-----------
below shall have the following meanings:
13.1.1. "ACM" (Asbestos-Containing Materials) shall mean any
material containing more than 1% asbestos.
13.1.2. "Action" means any action, suit, claim, arbitration,
mediation, inquiry, information, request, demand, proceeding or investigation by
or before any Governmental Authority or any action, suit, claim, arbitration or
proceeding involving any private Entity.
13.1.3. "Actual Net Cash Flow" shall have the meaning set forth in
Section 6.8.
13.1.4. "ARARs" (Applicable or Relevant and Appropriate
Requirements) shall have the meaning ascribed to that term under Section 121 of
the Comprehensive Environmental Response Compensation and Liability Act and the
National Contingency Plan, 40 C.F.R. Part 300 as in effect as of the Closing
Date.
13.1.5. "Advanced Systems Division Assets" shall have the meaning
set forth in Section 4.3.3.
13.1.6. "Advanced Systems Division Liabilities" shall have the
meaning set forth in Section 4.3.3.
13.1.7. "Affiliate" means, with respect to any Entity, any other
Entity directly, or indirectly through one or more intermediaries, controlling,
controlled by, or under common control with such Entity. For purposes of this
Agreement, the term "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with" as used with respect to any
Entity) means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Entity whether
through ownership of voting securities, by contract or otherwise.
13.1.8. "Affiliated Group" shall have the meaning set forth in
Section 2.18.1.
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13.1.9. "Agency Action" means any notice of violation, complaint,
order, consent order, consent agreement or other final action brought by a
federal, or local regulatory agency having the requisite authority and
jurisdiction to bring such action .
13.1.10. "Agreement" means this Agreement, together with the
Schedules and Exhibits hereto.
13.1.11. "Approvals" means all certificates, licenses, permits or
other approvals required or obtained by a Company Entity in connection with the
use or ownership of its assets or properties or the operation of its business.
13.1.12. "Asset Allocation Agreement" shall have the meaning set
forth in Section 6.1.10.(b).
13.1.13. "Assigned Intellectual Property" means any Intellectual
Property used by the Company Entities which is identified on Schedule
--------
2.15.1(a)(ii).
-------------
13.1.14. "Balance Sheet" shall have the meaning set forth in Section
2.5.1.
13.1.15. "Business Day" shall mean any day other than a Saturday,
Sunday or legal holiday.
13.1.16. "Buyer" shall have the meaning set forth in the first
paragraph of this Agreement.
13.1.17. "Buyer Indemnitees" shall have the meaning set forth in
Section 10.1.
13.1.18. "Cash Payment" shall have the meaning set forth in Section
1.2.
13.1.19. "Charter Documents" means (a) in the case of any
corporation, its articles or certificate of incorporation and its by-laws, (b)
in the case of any partnership, its partnership agreement and partnership
certificate, if any, and (c) in the case of any joint venture, its joint venture
agreement, as each has been amended or supplemented from time to time.
13.1.20. "Cleanup" means the containment, control, removal,
treatment, remediation, mitigation, investigation or evaluation of any Regulated
Substances.
13.1.21. "Closing" means the consummation of the purchase and sale
of the Shares contemplated hereby.
13.1.22. "Closing Date" shall have the meaning set forth in Section
8.1.
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13.1.23. "Code" means the Internal Revenue Code of 1986, as amended
from time to time and the regulations thereunder.
13.1.24. "Commission" means the United States Securities and Exchange
Commission.
13.1.25. "Company" shall have the meaning set forth in the recitals
to this Agreement.
13.1.26. "Company Benefit Plan" shall have the meaning set forth in
Section 2.17.1.
13.1.27. "Company Entities" means the Company and the Company
Subsidiaries.
13.1.28. "Company Properties" means the real property previously or
currently owned, leased or used by any Company Entity, including without
limitation the Owned Real Property and the property subject to Real Property
Leases.
13.1.29. "Computer Software" means computer programs and software
(including source code, object code, development documentation, programming
tools, drawings, specifications and data).
13.1.30. "Company Subsidiary" means any Entity of which the Company
directly or indirectly owns or controls at least a majority of the securities or
other interests having by their terms ordinary voting power to elect a majority
of the board of directors or others performing similar functions.
13.1.31. "Confidentiality Agreement" means the Confidentiality
Agreement dated as of April 22, 1996 between Buyer and Seller, as supplemented
December 18, 1996.
13.1.32. "Consent" means a consent, approval, authorization, waiver
or notification from any Entity, including any Governmental Authority.
13.1.33. "Consequential Damages" means Damages arising out of any
interruption of business, loss of profits, loss of use of facilities, claims of
customer, loss of goodwill or other indirect Damages.
13.1.34. "Continuing Affiliates" means Affiliates of Seller other
than the Company Entities.
13.1.35. "Contracts" means all contracts, agreements, instruments,
Leases, licenses, commitments and arrangements which by their terms have not
expired prior to the date
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of this Agreement or which have stated expiration dates after the date of this
Agreement, except Permits and Licenses.
13.1.36. "Damages" means all losses, claims, awards, damages, costs,
fines, Taxes, interest, obligations, judgments, payments, liabilities,
deficiencies, penalties, impositions, assessments or fines (including those
arising out of any Action) incurred by a Party, together with all reasonable
costs and expenses (including, in the case of Third Party Claims only,
reasonable outside attorneys', experts' and consultants' fees) and other
reasonable out-of-pocket expenses incurred in any action or proceeding between
the indemnifying Party and the Indemnitee or in connection with a Third Party
Claim incurred in connection with any of the foregoing.
13.1.37. "Direct Cost" means either direct waste processing cost or
direct project cost. Direct waste processing cost includes: (a) factory
processing costs, (b) secondary and transportation costs and (c) primary waste
disposal costs. Direct Project Cost includes: (x) shop order labor costs and (y)
shop order materials costs.
13.1.38. "Employee" means an employee of any Company Entity.
13.1.39. "Entity" means any individual, corporation, limited
liability company, partnership, trust, unincorporated organization, joint
venture or other entity.
13.1.40. "Environmental Condition" means (i) the Release of any
Regulated Substances into the environment in an amount and under circumstances
that would require notice, removal or remediation, or constitute a basis for a
claim or cause of action; (ii) the migration of any Regulated Substances onto or
under the properties owned, leased or used by a Company Entity or from such
properties onto or under another property; (iii) the violation, or alleged
violation, of any Environmental Law, order, Permit or license of or from any
Governmental Authority relating to environmental, health or safety matters.
13.1.41. "Environmental Laws" means all local, state and federal
statutes, regulations, ordinances, common law, judgments, orders, and decrees
promulgated in final form and in effect as of the date hereof and if applicable
as interpreted in accordance with public announcements made prior to the date
hereof, intended to protect human health or the environment, including, without
limitation, all such Environmental Laws which regulate the handling,
transportation, discharge, emission, treatment, storage and disposal of
Regulated Substances, including, by way of example and not by way of limitation,
the Clean Air Act (CAA), Clean Water Act (CWA), Resource Conservation and
Recovery Act (RCRA), Comprehensive Environmental Response Compensation and
Liability Act (CERCLA), Emergency Planning and Community Right-to-Know Act
(EPCRA), Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), Safe
Drinking Water Act (SDWA), Toxic Substances Control Act (TSCA), Hazardous
Materials Transportation Act (HMTA), Atomic Energy Act (AEA), Low Level
Radioactive Waste Policy Act of 1980 (LLRWPA), Low Level Radioactive
-58-
Waste Policy Amendments Act of 1985 (LLRWPAA), Energy Reorganization Act of
1974, Occupational Safety and Health Act (OSHA) and Endangered Species Act of
1973, each as currently amended, and all regulations promulgated thereunder,
guidances and directives issued with respect thereto, or policies adopted by
authority thereunder as of the date hereof.
13.1.42. "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
13.1.43. "ERISA Plan" shall have the meaning set forth in Section
3.(3) of ERISA with respect to any employee benefit plan maintained and
currently contributed to by any Company Entity that currently accrues a benefit
and covers Employees and is subject to ERISA.
13.1.44. "Estimated March 31 Working Capital Deficit shall have the
meaning given to such term in Section 6.8.
13.1.45. "Estimated Net Cash Flow" shall have the meaning set forth
in Section 6.8.
13.1.46. "GAAP" means generally accepted accounting principles in the
United States of America.
13.1.47. "Government Contract" means any Contract between any Company
Entity and any Governmental Authority or prime contractor of such Governmental
Authority, required to be priced in accordance with government accounting
standards.
13.1.48. "Governmental Authority" means any national, international,
federal, state or local governmental body, any of its subdivisions, agencies,
authorities, commissions, boards or bureaus, any special improvement district,
any international, federal, state or local court or tribunal or any arbitrator
(whether or not a governmental or regulatory official).
13.1.49. "GTS Shares" shall have the meaning set forth in Section
1.2.
13.1.50. "Guarantee" means any letter of credit, bid bond,
performance bond, warranty bond, guarantee, any indemnification obligation and
any other contingent obligation to purchase, to provide funds for payment or to
supply funds to invest in any Entity or otherwise to assure a creditor against
loss.
13.1.51. "Hazardous Substance" means any substance so designated
pursuant to the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 USC (S) 9601 et seq. as of the Closing Date.
13.1.52. "HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended, and the regulations promulgated thereunder.
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13.1.53. "Income Tax" means any federal, state or local income,
alternative minimum and franchise or other similar Tax, duty, governmental
charge or assessment imposed by or on behalf of any Governmental Authority that
is based on or measured by income, gross receipts or gross revenues (including,
interest and penalties on any of the foregoing).
13.1.54. "Income Tax Returns" means any Returns with respect to
Income Tax.
13.1.55. "Indemnitee" shall have the meaning set forth in Section
10.3.1.
13.1.56. "Intellectual Property" means all (a) trademarks and service
marks (registered or unregistered), trade dress, trade names and other names and
slogans embodying business or product goodwill or indications of origin, any
goodwill associated therewith, and all applications or registrations in any
jurisdiction pertaining thereto; (b) patents, patent applications, patentable
inventions, discoveries, improvements, ideas, know-how, formula methodology,
processes and technology, (c) Computer Software; (d) trade secrets, including
confidential and other non-public information and the right in any jurisdiction
to limit the use or disclosure thereof; (e) copyrights in writings, designs,
mask works or other works, and registrations or applications therefor in any
jurisdiction; (f) licenses, immunities, governmental authorization, covenants
not to xxx and the like relating to any of the foregoing; and (g) claims or
causes of action arising out of or related to infringement or misappropriation
of any of the foregoing.
13.1.57. "Interim Tax Period" means, with respect to any Tax imposed
on the Company Entities on a periodic basis for which the Closing Date is not
the last day of a Short Tax Period, the period of time beginning on the first
day of the actual taxable period that includes (but does not end on) the Closing
Date and ending on the Closing Date.
13.1.58. "IP Assignment" means one or more assignments regarding the
Assigned Intellectual Property, substantially in the form set forth on Exhibit
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B.
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13.1.59. "IP License Agreement" means one or more license agreements
regarding the Assigned Intellectual Property and the Retained Intellectual
Property, substantially in the form set forth in Exhibit C.
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13.1.60. "Law" means any statute, rule, Order, regulation, or
ordinance.
13.1.61. "Lease" means any lease, sublease or use or occupancy
agreement of real or personal property by any Company Entity (whether entered
into as lessor, lessee, sublessor or sublessee), together with any
modifications, amendments, supplements, substitutions, extensions and renewals
of the same.
13.1.62. "Legacy Waste and Equipment" shall have the meaning set
forth in Section 6.7.
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13.1.63. "License" shall have the meaning set forth in Section
2.15.2.
13.1.64. "Lien" means any lien, mortgage, deed of trust, security
interest, charge, pledge, retention of title agreement, easement, encroachment,
condition, reservation, restriction, covenant or other encumbrance affecting
title.
13.1.65. "Material Adverse Effect" means a material adverse effect on
the business, assets, liabilities, or financial condition (other than the March
31 Working Capital Deficit) of the Company Entities, taken as a whole.
13.1.66. "March 31 Working Capital Deficit" shall have the meaning
set forth in Section 6.8.
13.1.67. "Material Contracts" means the Contracts identified on
Schedule 2.11(a).
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13.1.68. "MMT Agreement" shall mean the Asset Purchase Agreement
dated as of December 10, 1996 between Seller, the Company, Molten Metal
Technology, Inc. and MMT of Tennessee, Inc.
13.1.69. "Non-Transferred Instrument" shall have the meaning set
forth in Section 6.5.
13.1.70. "Occurrences" shall mean acts or omissions of Seller or any
of the Company Entities occurring on or prior to the Closing Date, or events or
conditions existing on or prior to the Closing Date, which acts, omissions,
events or conditions result in injury or damage to person or property which
injury or damage has been physically manifested on or prior to the Closing Date.
13.1.71. "Order" means any order, judgment, injunction, decree or
award of any Governmental Authority or any administrative or judicial consent
decree or analogous instrument.
13.1.72. "Other Law" means any Law applicable to any Company Entity,
including, without limitation, any zoning, subdivision or land use Law, other
than an Environmental Law or a Law relating to (a) Taxes or (b) ERISA.
13.1.73. "Outside Date" shall have the meaning set forth in Section
9.1(b).
13.1.74. "Owned Real Property" shall have the meaning set forth in
Section 2.8.
13.1.75. "Party" means Buyer or Seller.
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13.1.76. "Permissible Assignee" means (a) any person to whom an
assignment is made with the consent of the other party hereto, (b) the Entity in
which the Seller's broadcasting business is to be conducted, (c) the Entity in
which the Seller's industrial and technology business is to be conducted, or (d)
any Entity with a long term credit rating of Baa or higher from Xxxxx'x Investor
Services or of BBB or higher, from Standard & Poor's.
13.1.77. "Permit" means any permit, license, certificate (including a
certificate of occupancy) registration, authorization or approval issued by a
Governmental Authority to a Company Entity.
13.1.78. "Permitted Liens" means (a) Liens for Taxes that are not yet
due and payable or that are being contested in good faith by appropriate
proceedings and as to which adequate reserves have been established on the
Balance Sheet in accordance with GAAP, consistently applied; (b) worker's,
repairmen's and similar Liens imposed by Law that have been incurred in the
ordinary course of business and are not yet delinquent or, if delinquent, are
being contested in good faith by appropriate proceedings and as to which
adequate reserves have been established on the Balance Sheet in accordance with
GAAP, consistently applied; (c) Liens on Real Property (other than (i) Leases or
(ii) Liens that secure indebtedness for borrowed money) and other title defects,
easements, encroachments and encumbrances that do not, individually or in the
aggregate, materially adversely affect the value of the Real Property or
materially adversely impair the continued use as currently conducted of the Real
Property to which they relate; (d) encumbrances that represent the rights of
customers, suppliers and subcontractors in the ordinary course of business under
Contracts or under general principles of commercial law and that will not
individually or in the aggregate have a Material Adverse Effect, (e) Liens
securing any liabilities disclosed on the Balance Sheet; (f) Liens disclosed on
the Balance Sheet; and (f) Liens listed on Schedule 2.8.
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13.1.79. "Post-Closing Tax Period" means any Tax Period that begins
after the Closing Date and, with respect to any Tax Period beginning before and
ending after the Closing Date, the portion of such Tax Period commencing on the
day following the Closing Date.
13.1.80. "Pre-Closing Tax Period" means any Tax Period, Short Tax
Period or Interim Tax Period ending on or before the Closing Date.
13.1.81. "Proposal" means a written proposal provided in response to
a written request for proposal which cannot be withdrawn without penalty or
premium by a Company Entity once delivered.
13.1.82. "Purchase Price" shall have the meaning set forth in Section
1.2.
13.1.83. "Real Property" means the Owned Real Property and all
property subject to the Real Property Leases.
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13.1.84. "Real Property Lease" means any Lease of real property to
which a Company Entity is a party.
13.1.85. "Regulated Substances" means any substance regulated under
any Environmental Law as of the Closing Date including, but not limited to,
asbestos, ACM, polychlorinated biphenyls (PCBs), urea-formaldehyde in any of its
forms, petroleum and its fractions, waste oil, radioactive material and any
substances defined as "hazardous waste," "hazardous substances," "pollutants or
contaminants," "low-level radioactive waste," "byproduct material," "special
nuclear material," "source material," "toxic substances," "hazardous chemicals,"
"hazardous air pollutants," "toxic chemicals" or "hazardous materials" under the
applicable Environmental Law.
13.1.86. "Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping or
disposing into the environment of any Regulated Substances in excess of ARARs.
13.1.87. "Retained Intellectual Property" means any Intellectual
Property used primarily by Seller or any Continuing Affiliates, which is
identified as such on Schedule 2.15.1(a)(iii).
-----------------------
13.1.88. "Returns" shall have the meaning set forth in Section
2.18.1.
13.1.89. "Seller" shall have the meaning set forth in the first
paragraph of this Agreement.
13.1.90. "Seller Indemnitees" shall have the meaning set forth in
Section 10.2.
13.1.91. "Seller Provided Services" means all services provided by
Seller or any Continuing Affiliate to the Company Entities, including those
described on Schedule 2.9(c), together with all Intellectual Property used by
---------------
Seller or a Continuing Affiliate in connection with or relating to the
performance thereof.
13.1.92. "Seller's Knowledge" means the actual knowledge of the
persons listed on Schedule 13.1 as to the matters specified on Schedule 13.1 to
------------- -------------
which such person's knowledge pertains.
13.1.93. "Shares" shall have the meaning set forth in the recitals to
this Agreement.
13.1.94. "Short Tax Period" means any Tax Period ending on the
Closing Date.
13.1.95. "Subscription Right" shall have the meaning set forth in
Section 2.3.1.
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13.1.96. "Tax" or "Taxes" means all income, profits, franchise,
gross receipts, capital, sales, use, withholding, value added, ad valorem,
transfer, employment, unemployment, workers' compensation, social security,
disability, occupation, property, severance, production, real estate, excise and
other taxes, duties and similar governmental charges and assessments imposed by
or on behalf of any Governmental Authority (including interest and penalties
thereon).
13.1.97. "Tax Laws" means the Code and all other Laws relating to
Taxes.
13.1.98. "Tax Period" shall have the meaning set forth in Section
6.1.1.
13.1.99. "Third Party Claim" shall have the meaning set forth in
Section 10.3.2.
13.1.100. "Trojan Contract" means that certain purchase order with
Portland General Electric - Trojan (NQ181326) dated July 2, 1996.
13.1.101. "Unaffiliated Firm" shall mean an unaffiliated "big six"
accounting firm to be selected and agreed upon by the Parties.
13.1.102. "Working Capital Deficit" shall mean the excess of the
Company's current liabilities, over its current assets, each as determined in
accordance with GAAP, consistently applied, without regard to any deferred tax
asset or liability, which may be a positive or negative number, and, at the
Closing Date, after giving effect to the adjustment to reserves contemplated
under Sections 6.7 (Legacy Waste and Equipment) and 4.9 (Ventilation System for
the SEG(R) Metal Melt Facility).
13.2. Certain Interpretive Matters and Limitations. (a) Each of the
--------------------------------------------
Parties is a sophisticated legal entity that was advised by experienced counsel
and, to the extent it deemed necessary, other advisors in connection with this
Agreement. Accordingly, each of the Parties hereby acknowledges that (i) no
party has relied or will rely in respect of this Agreement or the transactions
contemplated hereby upon any document or written or oral information previously
furnished to or discovered by it or its representatives, other than this
Agreement (including the Schedules and Exhibits hereto) or such of the foregoing
as are delivered at the Closing, (ii) there are no representations or warranties
by or on behalf of either Party hereto or any of its respective Affiliates or
representatives other than those expressly set forth in this Agreement, and
(iii) the Parties' respective rights and obligations with respect to this
Agreement and the events giving rise thereto shall be solely as set forth in
this Agreement.
(b) Any item disclosed in one Section or Schedule shall be deemed
to be disclosed in any other Section or Schedule where such disclosure is
relevant, even if there is no express cross-reference, provided that the
relevance of the disclosure is on its face reasonably apparent. Disclosure of
items that may or may not be required to be disclosed by this Agreement
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does not mean that such items are material or create a standard of materiality
and shall not be deemed an admission that any such disclosed matter is or may
give rise to a violation of any Law or is material.
(c) No provision of this Agreement shall be interpreted in favor of,
or against, either of the Parties by reason of the extent to which either such
Party or its counsel participated in the drafting thereof or by reason of the
extent to which any such provision is inconsistent with any prior draft hereof
or thereof.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first written above.
WESTINGHOUSE ELECTRIC CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Managing Director, Global Capital Markets
GTS DURATEK, INC.
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
and Chief Financial Officer
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