Execution Copy
5500764.07
Asset Purchase Agreement
By and Among
Stone & Xxxxxxx, Incorporated,
certain Subsidiaries
of
Stone & Xxxxxxx, Incorporated
And
The Xxxx Group Inc.
Dated as of July 14, 2000
LIST OF SCHEDULES AND EXHIBITS
Schedule 2.01(a) List of Real Property
Schedule 2.01(e) List of Assumed Contracts
Schedule 2.0l(f) List of Licenses, Permits and Approvals
Schedule 2.0l(g) List of Intellectual Properties
Schedule 2.01(i) List of Investments
Schedule 2.02(b) Completed Contracts
Schedule 2.02(d) Excluded Assets
Schedule 2.03 Assumed Liabilities
Schedule 2.02(e) Special Project Claims
Schedule 2.05(c) Schedule of Cold Storage Selling Prices
Schedule 3.02(b) Requisite Approvals, Consents and Filings
Schedule 3.02(c) Breaches of Assumed Contracts
Schedule 3.04 Agreements, Contracts, Commitments and Rights
Schedule 3.05 Legal and Regulatory Compliance
Schedule 3.06 Financial Statements and Quarterly Report on Form 10-Q
Schedule 3.07 Undisclosed Liabilities
Schedule 3.08 Recent Activities
Schedule 3.09 Subsidiaries and Affiliates; Direct, Indirect and
Beneficial Interests
Schedule 3.11 Title to Personal Property
Schedule 3.12(a) Real Property Encumbrances
Schedule 3.12(b) Permitted Real Property Encumbrances
Schedule 3.13(b) Environmental Claims
Schedule 3.13(c) Contamination and Releases
Schedule 3.13(d) Reports, Audits and Assessments
Schedule 3.13(f Materials of Environmental Concern and Underground
Storage Tanks
Schedule 3.14 Intellectual Properties, Computer Software, Etc.
Schedule 3.15 Insurance
Schedule 3.16 Permits and Licenses
Schedule 3.17 List of Contracts
Schedule 3.18 Contract Disclosures
Schedule 3.19(b) Employees and Employee Relations
Schedule 3.20(a) Employee Benefit Plans
Schedule 3.20(b) Employee Benefit Plan Audits and Adverse Events
Schedule 3.20(e) Prohibited Transactions
Schedule 3.20(f) Terminations and Reportable Events
Schedule 3.20(g) Multi-Employer Plans, Etc.
Schedule 3.21 Litigation and Proceedings
Schedule 3.22 Taxes
Schedule 3.32 Accounts Receivable
Schedule 3.33 Related Party Transactions
Schedule 4.08 Actions and Proceedings
Schedule 5.01 Retention Plan
Schedule 5.03 Certain Actions: D&O Insurance
Schedule 5.04 Employee Agreements
Schedule 5.15 Encumbrances
Schedule 5.16(b) List of Rejected Contracts
Schedule 7.02(c) Consents to Assignment
Exhibit A Form of Buyer's Counsel Opinion
Exhibit B Form of Sellers' Counsel Opinion
TABLE OF CONTENTS
Page
1. DEFINITIONS AND REFERENCES 1
1.01. Definitions 1
1.02. Certain References 14
2. SALE OF ASSETS AND RELATED MATTERS 14
2.01. Sale of Assets 14
2.02. Excluded Assets 16
2.03. Assumed Liabilities 17
2.04. Excluded Liabilities 17
2.05. Equity Purchase Price; Indemnity Deposit,
LC Deposit and Litigation Deposit; Delivery of
Consideration; Equity Purchase Price
Adjustments; Allocation of Equity
Purchase Price 18
2.06. Registration Rights 20
2.07. Addition of Sellers; Schedules 21
3. REPRESENTATIONS AND WARRANTIES OF S&W 21
3.01. Organization 21
3.02. Powers; Consents; Absence of Conflicts,Etc 21
3.03. Binding Agreement 22
3.04. Subsidiaries, Investments and Third Party
Rights 22
3.05. Legal and Regulatory Compliance 22
3.06. Financial Statements 22
3.07. Undisclosed Liabilities 22
3.08. Recent Activities 22
3.09. Subsidiaries and Affiliates; Assets 23
3.10. Equipment 23
3.11. Title to Personal Property 23
3.12. Real Property 24
3.13. Environmental Matters 24
3.14. Intellectual Properties, Computer
Software, etc 25
3.15. Insurance 25
3.16. Permits and Licenses 26
3.17. Agreements and Commitments 26
3.18. The Contracts 27
3.19. Employees and Employee Relations 28
3.20. Employee Benefit Plans 28
3.21. Litigation and Proceedings 30
3.22. Taxes 30
3.23. Brokers and Finders 30
3.24. Payments 31
3.25. Operation of the Business 31
3.26. Customer List 31
3.27. Backlog 31
3.28. Investment Experience and Intent; No
Registration 31
3.29. Accredited Investor Status 31
3.30. Rule 144 31
3.31. Government Contracting 32
3.32. Accounts Receivable 32
3.33. Related Party Transactions 33
4. REPRESENTATIONS AND WARRANTIES OF BUYER 33
4.01. Organization 33
4.02. Corporate Powers; Consents; Absence of
Conflicts, Etc 33
4.03. Binding Agreement 34
4.04. Issuance of Share Consideration 34
4.05. Brokers and Finders 34
4.06. Payments 34
4.07. SEC Documents and other Reports 34
4.08. Actions and Proceedings 35
4.09. Capital Structure 35
4.10. Absence of Certain Changes or Events 35
5. COVENANTS AND AGREEMENTS OF THE PARTIES 35
5.01. Bankruptcy Cases and Sale Motion; Entry of
Sale Order; Additional Sellers 35
5.02. Operations 35
5.03. Certain Actions 36
5.04. Employee Matters 37
5.05. Access to and Provision of Additional
Information 38
5.06. Post-Closing Maintenance of and Access to
Information 39
5.07. Governmental Authority Approvals: Consents
to Assignment 40
5.08. Noncompetition 41
5.09. Use of Names 42
5.10. Allocation of Equity Purchase Price for
Tax Purposes 42
5.11. Further Acts and Assurances 42
5.12. Costs and Expenses 42
5.13. Insurance Ratings 43
5.14. Fulfillment of Conditions 43
5.15. Release of Encumbrances 43
5.16. Assumed and Assigned Contracts; Rejected
Contracts 43
5.17. Bankruptcy Court Approval 44
5.18. Transfer Taxes 45
5.19. Listing Application 45
5.20. Bankruptcy Filings 45
5.21. Non-Solicitation 46
5.22. Tail Insurance 46
5.23. Other Agreements 46
5.24. Temporary Space 46
5.25. Schenectady Lease 46
5.26. Representation, Warranties and Covenants
of Certain Subsidiaries 46
5.27. Xxxxxx Credit Agreement 48
5.28. Canadian Transfer 48
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS 49
6.01. Representations and Warranties; Covenants 49
6.02. Adverse Actions or Proceedings 49
6.03. Pre-Closing Confirmations 49
6.04. Approval, Execution and Delivery of
Additional Agreements 49
6.05. Opinion of Buyer's Counsel 49
6.06. No Buyer Material Adverse Change 49
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER 49
7.01. Representations and Warranties; Covenants 50
7.02. Pre-Closing Confirmations and Contractual
Consents 50
7.03. Adverse Actions or Proceedings 50
7.04. Operations; No Material Adverse Effect 50
7.05. Title Insurance Policies and Surveys 50
7.06. Opinion of Sellers' Counsel 51
7.07. Deliveries at Closing 51
7.08. Lien Searches 51
7.09. Approval, Execution and Delivery of
Additional Agreements 51
8. CLOSING; TERMINATION OF AGREEMENT 51
8.01. Closing 51
8.02. Action of Sellers at Closing 52
8.03. Action of Buyer at Closing 53
8.04. Termination Prior to Closing 53
9. INDEMNIFICATION 54
9.01. Indemnification by Sellers 54
9.02. Sellers' Limitations 55
9.03. Indemnification by Buyer 55
9.04. Buyer's Limitations 55
9.05. Notice and Procedure 56
9.06. Survival of Representations; Indemnity
Periods 58
9.07. Limitations of Liability 59
10. GENERAL 59
10.01. Schedules 59
10.02. Tax Effect 59
10.03. Reproduction of Documents 60
10.04. Time of Essence 60
10.05. Consents, Approvals and Discretion 60
10.06. Choice of Law; Submission to Jurisdiction 60
10.07. Benefit; Assignment 60
10.08. No Third Party Beneficiary 60
10.09. Waiver of Breach, Right or Remedy 61
10.10. Notices 61
10.11. Misdirected Payments; Offset Rights 62
10.12. Severability 62
10.13. Entire Agreement; Counterparts; Amendment 63
10.14. Drafting 63
10.15. Confidentiality 63
10.16. Publicity 63
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is made and
entered into as of the 14th day of July, 2000, by and among The
Xxxx Group Inc., a Louisiana corporation (together with its
assignees, if any, "Buyer"), and Stone & Xxxxxxx, Incorporated, a
Delaware corporation ("S&W"), and the Subsidiaries (as defined)
of S&W that become signatories to this Agreement in accordance
with the terms hereof (together with S&W, "Sellers").
W I T N E S S E T H
WHEREAS, Buyer and Sellers desire to enter into a definitive
agreement for the sale and purchase of the Assets (as defined)
and the assumption of the Assumed Contracts (as defined) and the
Assumed Liabilities (as defined) of Sellers, as more fully
described and defined in this Agreement;
WHEREAS, the Assets are owned by S&W and certain of its
direct and indirect Subsidiaries and this Agreement is being
executed initially by S&W and Buyer with the agreement of S&W as
is set forth herein to cause any of its Subsidiaries that has any
right, title or interest in or to the Assets to become a party
to, and one of the Sellers under, this Agreement by an amendment
hereto;
WHEREAS, in order to facilitate the Transaction (as
defined), S&W has filed, and has caused certain of the other
Sellers to file, cases under chapter 11 of the Bankruptcy Code
(as defined);
WHEREAS, in furtherance of the Transaction, Sellers have
received approval of the Executory Contract Assumption and
Assignment Order (as defined) and the Sale Order (as defined)
from the Bankruptcy Court (as defined);
WHEREAS, the Parties intend to consummate the sale and
purchase of the Assets owned by the Foreign Sellers (as defined)
outside of the Bankruptcy Cases and in compliance with the Legal
Requirements (as defined) of such foreign jurisdictions governing
the sale and purchase of such Assets; and
WHEREAS, Sellers desire to sell the Assets to Buyer, and
Buyer desires to purchase the Assets from Sellers, on the terms
and subject to the conditions set forth in this Agreement;
Now, Therefore, for and in consideration of the foregoing
premises, and the agreements, covenants, representations and
warranties hereinafter set forth, and other good and valuable
consideration, the receipt and adequacy of which are forever
acknowledged and accepted, the parties, intending to be legally
bound, hereby agree as follows:
1. DEFINITIONS AND REFERENCES
1.01. Definitions. As used in this Agreement, the
following terms have the meanings given:
Accounting Arbitrator: as defined in Section
2.05(c)(i)(C);
Accounts Receivable: all accounts receivable of any
Seller, of whatever kind or nature, including all current or
deferred rights to payment for projects completed or
commenced or services rendered on or prior to the Closing
Date, whether or not such services have been billed by
Sellers as of the Closing Date;
Accredited Investor: as defined in Rule 501 of
Regulation D promulgated under the Securities Act;
Adjustment Amount: as defined in Section
2.05(c)(i)(A);
Adjustment Assets: as defined in Section
2.05(c)(i)(A);
Adjustment Liabilities: as defined in Section
2.05(c)(i)(A);
Affiliate: any Person that, directly or indirectly
through one or more intermediaries, controls, is controlled
by, or is under common control with another Person,
including the power to direct or cause the direction of the
management and policies of a Person, whether through the
ownership of securities, election or appointment of
directors, by contract or otherwise;
Affiliated Group: any affiliated group within the
meaning of Code Sec. 1504 or any similar group defined under
a similar provision of state, local or foreign law;
Aggregate Consideration: as defined in Section 2.05(a);
Agreement: this Asset Purchase Agreement and all
Exhibits and Schedules attached hereto, as amended,
consolidated, supplemented, novated or replaced by the
parties from time to time;
Applicable Rate: shall mean a per annum rate of
interest (computed on the basis of the actual number of days
elapsed (including the first but excluding the last day)
over a year of 365 or 366 days, as the case may be) equal to
3% plus the Prime Rate as from time to time in effect, the
Applicable Rate to change automatically from time to time
effective at the beginning of each business day on which a
change in the Prime Rate becomes effective;
Assets: all assets, real, personal and mixed, tangible
and intangible, owned by Sellers or leased by Sellers
pursuant to capital leases, including the assets reflected
on the March 31 Balance Sheet, in such amounts as exist on
the Closing Date, but excluding in any event the Excluded
Assets;
Assumed Contracts: all Contracts of Sellers (including
the Employee Agreements) other than the Rejected Contracts
and the Completed Contracts;
Assumed Liabilities: (i) all liabilities and
obligations of Sellers set forth on Schedule 2.03 as of the
Closing Date and (ii) with respect to such liabilities and
obligations as are properly reflected on a balance sheet
under GAAP, in such amounts as are incurred in the ordinary
course of the Business and reflected on the Closing Balance
Sheet and which are anticipated to be equal to or in excess
of Four Hundred Million Dollars ($400,000,000); provided,
however, that, notwithstanding anything contained in this
Agreement to the contrary, Assumed Liabilities shall not
include any Excluded Liability, including those listed in
Section 2.04;
Audited Financial Statements: the audited consolidated
balance sheet of S&W as of December 31, 1999 and the audited
consolidated statements of operations and comprehensive
income and cash flows for the three fiscal years then ended,
together with the notes thereto and the report thereon of
PricewaterhouseCoopers LLP, independent certified public
accountants, and any audited restatements thereof;
Average Price: as defined in Section 2.05(a);
Bankruptcy Cases: the cases under chapter 11 of the
Bankruptcy Code filed by each of the Sellers (other than the
Foreign Sellers) in the Bankruptcy Court or any Person who
hereafter becomes a Seller and files a case under chapter 11
of the Bankruptcy Code pursuant to Section 5.01, which cases
have been administratively consolidated;
Bankruptcy Code: 11 U.S.C. 101 et. seq., and
applicable federal rules of bankruptcy procedure thereunder;
Bankruptcy Court: (a) the United States District Court
for the District of Delaware, which has jurisdiction over
the Bankruptcy Cases or (b) such other Court to which the
Bankruptcy Cases may be transferred;
Bid: any quotation, bid or proposal by any Seller
which, if accepted or awarded, would lead to a Fixed Price
Contract;
Business: any and all businesses owned, leased,
managed or otherwise operated or conducted by any of
Sellers;
Buyer: as defined in the Preamble;
Buyer Material Adverse Effect: a material adverse
change (or event or condition that could result in a
material adverse change) in the business, condition
(financial or other), operations, assets or liabilities of
Buyer, whether individually or in the aggregate;
Buyer SEC Documents: as defined in Section 4.07;
Buyer's Indemnified Persons: Buyer and Buyer's
stockholders, members, Affiliates, successors and assigns,
and their respective stockholders, partners, Affiliates,
directors, trustees, officers, employees, agents and
representatives;
Canadian Assets: Assets held by direct or indirect
Canadian Subsidiaries of S&W;
Canadian Consideration: cash in the amount of Three
Million Dollars ($3,000,000) and 255,688 shares of Common
Stock having a market value of Twelve Million One Hundred
Twenty-One Thousand Two Hundred Twelve Thousand Dollars
($12,121,212), which was determined by dividing Ten Million
Dollars ($10,000,000) based on the Average Price by the
82.5% rate at which Common Stock was given credit in the
auction relating to the Transaction;
Canadian Liabilities: Assumed Liabilities of direct or
indirect Canadian Subsidiaries of S&W;
Canadian Transfer: as defined in Section 5.28(b);
Canadian Transfer Claim: as defined in
Section 5.28(c);
Cash: cash and cash equivalents;
Cash Consideration: as defined in Section 2.05(a);
Claim Notice: written notification of a Third Party
Claim by an Indemnified Party to an Indemnifying Party under
Article 9, including a Revenue Agent's Report, Statutory
Notice of Deficiency, Notice of Proposed Assessment, or any
other official written notice from a Taxing authority that
Taxes are due or that a Tax audit will be conducted;
Closing: as defined in Section 8.01;
Closing Balance Sheet: the audited consolidated
balance sheet of S&W as of the Closing Date prepared in
accordance with GAAP, except for using estimated costs of
completion, change order recoveries and claim recoveries
with respect to Rejected Contracts and Completed Contracts
and liability estimates with respect to matters set forth in
Section 2.04(f) as of March 31, 2000 without further
revisions, and recorded in a manner consistent with the
preparation of the March 31 Balance Sheet;
Closing Date: the date on or as of which the Closing
occurs;
Code: the Internal Revenue Code of 1986, as amended;
Cold Storage Business: the business of S&W conducted
by and through the Nordic Entities, together with all assets
and property used by such entities to conduct such business;
Common Stock: common stock, no par value per share, of
Buyer;
Competing Proposal: a competitive bid or proposal from
a third party (a) to purchase (i) substantially all of
Sellers' assets, (ii) only the assets of the Cold Storage
Business, or (iii) substantially all of the assets of
Sellers other than the Cold Storage Business, in each case
whether in a separate transaction or series of transactions
or as part of a plan of reorganization of Sellers or any of
them, (b) for any merger, consolidation, liquidation,
dissolution or similar transaction involving Sellers or any
of them or (c) to provide debt or equity financing to the
Sellers or any of them;
Completed Contracts: Contracts of Sellers, including
those specifically set forth on Schedule 2.02(b), under
which substantially all of the contractual work effort of
Sellers has been completed, even if such Contracts have
continuing warranty obligations, administrative matters or
work related to warranty or other claims;
Completed Contracts Receivables: all Accounts
Receivables related to Completed Contracts;
Contracts: all commitments, contracts, leases,
licenses, agreements and understandings, written or oral,
relating to the Assets or the operation of the Business to
which any Seller is a party or by which it or any of its
Assets are bound;
Controlled Group: with respect to Sellers, a group
consisting of each trade or business (whether or not
incorporated) which, together with Sellers, would be deemed
a "single employer" within the meaning of Section 4001(b)(l)
of ERISA or subsections (b), (c), (m) or (o) of Section 414
of the Code;
Cost Plus Contract: any Contract providing for the
reimbursement of costs and expenses incurred by a Person in
connection with the performance of such Contract, in
addition to the payment of any fixed or negotiated fees or
charges related to the Contract;
Effective Date: the date of execution of this
Agreement;
Employee Agreements: all agreements or arrangements
set forth on Schedule 5.04;
Employee Benefit Plan: any (a) nonqualified deferred
compensation or retirement plan or arrangement which is an
Employee Pension Benefit Plan, (b) qualified defined
contribution retirement plan or arrangement which is an
Employee Pension Benefit Plan (including any Multiemployer
Plan), (c) qualified defined benefit retirement plan or
arrangement which is an Employee Pension Benefit Plan
(including any Multiemployer Plan), or (d) Employee Welfare
Benefit Plan or material fringe benefit plan or program;
Employee Pension Benefit Plan: as defined in ERISA
Sec. 3(2);
Employee Welfare Benefit Plan: as defined in ERISA
Sec. 3(1);
Encumbrances: liabilities, levies, claims, charges,
assessments, mortgages, security interests, liens, pledges,
conditional sales agreements, title retention contracts,
leases, subleases, rights of first refusal, options to
purchase, restrictions and other encumbrances, and
agreements or commitments to create or suffer any of the
foregoing;
Environmental Claim: any oral or written notice by a
Person alleging liability (including liability for
investigatory costs, cleanup costs, Governmental Authority
response costs, natural resource damages, property damages,
personal injuries, or penalties) arising out of, based on or
resulting from (a) the presence, or release into the
environment, of any Materials of Environmental Concern at
any location, whether or not owned by Sellers,
(b) circumstances forming the basis of any violation, or
alleged violation, of any Environmental Laws; or (c)
circumstances in which Sellers have or may have retained or
assumed either contractually or by operation of law any
liability for any Environmental Claims alleged or asserted
against any third party;
Environmental Laws: any and all Legal Requirements
relating to pollution or protection of human health or the
environment (including ground water, land surface or
subsurface strata), including Legal Requirements relating to
emissions, discharges, releases or threatened releases of
Materials of Environmental Concern, or otherwise relating to
the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, recycling, reporting or
handling of Materials of Environmental Concern;
Equity Purchase Price: as defined in Section 2.05(a);
ERISA: the Employee Retirement Income Security Act of
1974, as amended;
ERISA Fiduciary: as defined in ERISA Section 3(21);
Escrow Agent: a financial institution acceptable to
the parties;
ESOP: Employee Stock Ownership Plan of Stone &
Xxxxxxx, Incorporated and Participating Subsidiaries;
ESOP Note: note receivable reflected on the March 31
Balance Sheet relating to the ESOP;
Excluded Assets: as defined in Section 2.02;
Excluded Liabilities: any and all liabilities or
obligations of Sellers of any kind or nature, other than the
Assumed Liabilities, including those liabilities or
obligations described in Section 2.04, whether known or
unknown, fixed or contingent, recorded or unrecorded, and
whether arising before or after the Closing, including
claims relating to professional liability, errors and
omissions, pending and threatened litigation, pending and
future claims relating to asbestos, and claims in connection
with performance, surety or other bonds relating to
Completed Contracts or Rejected Contracts;
Excluded Subsidiary Stock: the capital stock of any
direct or indirect Subsidiary of S&W the Assets of which are
purchased, but no capital stock is purchased by the Buyer,
in the Transaction;
Executory Contract Assumption and Assignment Order: an
Order of the Bankruptcy Court, which may be the Sale Order
and must be in form and substance acceptable to Buyer, which
(a) approves the provisions of Section 5.16(a), (b)
authorizes and directs Sellers, pursuant to Section 365 of
the Bankruptcy Code, to assume and to assign to Buyer the
Assumed Contracts and to make all pre-petition and post-
petition payments related thereto that are not Assumed
Liabilities and (c) determines that Buyer has provided
adequate assurance of future performance relative to the
Assumed Contracts;
Final Order: an order of the Bankruptcy Court, the
operation or effect of which has not been stayed, and which
is not subject to any pending appeal, request for leave to
appeal or request for reconsideration and as to which the
time for any such appeal, request for leave to appeal or
request for reconsideration has expired;
Financial Statements: the Audited Financial
Statements, the Unaudited Financial Statements, the Interim
Financial Statements, the Interim Closing Balance Sheet and
the Closing Balance Sheet;
Fixed Price Contracts: "fixed-price", "guaranteed
maximum price", "flat rate" or similar Contracts with fixed
or capped payment amounts, including all such Contracts
involving a joint venture, partnership or teaming
arrangement of any Seller and any other party;
Foreign Sellers: Sellers incorporated, or otherwise
formed or organized, and conducting business in any
jurisdiction other than the United States; provided,
however, that Foreign Sellers shall not include any Sellers
that are eligible to be debtors under Section 109 of the
Bankruptcy Code;
Foreign Subsidiaries: as defined in Section 5.26;
GAAP: as defined in Section 3.06;
Government Contract: (i) any Contract between any
Seller and (a) any Governmental Authority or (b) any prime
contractor to any Governmental Authority, and (ii) any
Contract described in clause (i)(a) or (i)(b) which is
wholly or partially funded by, directly or indirectly, or
through any Governmental Authority;
Governmental Authorities: all agencies, authorities,
bodies, boards, commissions, courts (including the
Bankruptcy Court), instrumentalities, legislatures and
offices of any nature whatsoever of any federal, state,
county, district, municipal, city, foreign or other
government or quasi-government unit or political
subdivision;
Hired Employees: employees of Sellers as of the
Closing Date hired by Buyer pursuant to Section 5.04;
Holder: a Seller that is a party to the Registration
Rights Agreement;
HSR Act: the Xxxx-Xxxxx Xxxxxx Antitrust Improvements
Act of 1976, as amended;
Immaterial Contracts: Contracts that (i) require
(a) the future payment by or to Sellers of (I) Five Hundred
Thousand Dollars ($500,000) or less in the case of any Fixed
Price Contract or (II) Seven Hundred Fifty Thousand Dollars
($750,000) or less in the case of Cost Plus Contracts or
(b) the future performance by Sellers of services having a
value of (I) Five Hundred Thousand Dollars ($500,000) or
less in the case of any Fixed Price Contract or (II) Seven
Hundred Fifty Thousand Dollars ($750,000) or less in the
case of Cost Plus Contracts, or (ii) are terminable by
Sellers at any time without cause upon 90 days' notice or
less; provided, however, that, notwithstanding the
foregoing, Immaterial Contracts shall not include any
Contracts set forth on Schedule 3.17 or any Contracts that,
pursuant to Section 365 of the Bankruptcy Code, are not
assumable or assignable without the consent of the non-
debtor parties thereto;
Indemnified Party: any Person entitled to
indemnification under Article 9;
Indemnifying Party: any Person obligated to indemnify
another Person under Article 9;
Indemnity Deposit: shares of Common Stock having an
aggregate value of Twenty Five Million Dollars ($25,000,000)
based on the Average Price, to be delivered by Buyer to the
Escrow Agent pursuant to Section 8.03(b) and subject to the
Indemnity Escrow Agreement, and all accumulated dividends or
distributions thereon, which shares will be a part of and
withheld from the Share Consideration;
Indemnity Escrow Agreement: the Indemnity Escrow
Agreement by and among S&W, Buyer and the Escrow Agent,
dated as of the date hereof, pursuant to which the Indemnity
Deposit and the LC Deposit will be delivered to the Escrow
Agent at Closing to secure certain obligations of indemnity
of Sellers under this Agreement;
Indemnity Notice: written notification of a claim for
indemnity under Article 9 other than a Third Party Claim,
made by an Indemnified Party to an Indemnifying Party
pursuant to Section 9.05;
Intellectual Properties: all of Sellers' marks, names,
and all variations of the foregoing, all trademarks, service
marks, assumed names, logos, including all goodwill
associated therewith, patents, patent rights, copyrights,
trade secrets and similar intangibles (including all
variants thereof, applications therefor and renewals or
extensions thereof);
Interim Closing Balance Sheet: the unaudited
consolidated balance sheet of S&W as of the most recent
month end available prior to the Closing Date;
Interim Financial Statements: the unaudited
consolidated balance sheet of S&W as of April 30, 2000 and
consolidated statement of operations of S&W for the four
months ended April 30, 2000, attached to this Agreement as
Schedule 3.06;
Investments: shares of capital stock of any
corporation, interests in partnerships or limited liability
companies, or other equity or debt instruments issued by any
Person, and proceeds from the sale thereof;
Jacobs: Xxxxxx Engineering Group Inc., a Delaware
corporation;
Jacobs Asset Purchase Agreement: the Asset Purchase
Agreement dated as of June 1, 2000, by and among Jacobs, S&W
and certain subsidiaries of S&W, and all Exhibits and
Schedules attached thereto, as amended, consolidated,
supplemented, novated or replaced by the parties thereto
from time to time;
Jacobs Credit Agreement: the Revolving Credit
Agreement dated as of May 9, 2000, between S&W and Jacobs;
Jacobs DIP Agreement: the Debtor-In-Possession Credit
Agreement dated as of June 2, 2000, among Jacobs, S&W and
certain subsidiaries of S&W;
Knowledge of Buyer: with reference to this Agreement
means the knowledge of the executive officers of Buyer;
Knowledge of Sellers: with reference to this Agreement
means the knowledge of the executive officers of S&W, the
senior officers or managers of each of the other Sellers,
or, with respect to any environmental matters, each employee
of each Seller responsible for supervising environmental
compliance, and the following additional natural persons:
Xxxxx Xxxxxxxx, Xxxxxx Xxxxxx, Xxxxx Xxxxxxxxx, Xxxxx Xxxxxx
and Xxxxxxx Xxxxxx;
LC Deposit: shares of Common Stock having an aggregate
value of $13,564,051, to be delivered by Buyer to the Escrow
Agent pursuant to Section 8.03(b) and subject to the
Indemnity Escrow Agreement, and all accumulated dividends or
distributions thereon, which shares will be a part of and
withheld from the Share Consideration;
Legal Requirements: with respect to any Person, all
statutes, ordinances, by-laws, codes, rules, regulations,
restrictions, judgments, orders, writs, injunctions,
decrees, determinations or awards of any Governmental
Authority having jurisdiction over such Person or any of
such Person's assets or businesses;
Litigation Deposit: cash in the amount of Two Million
Five Hundred Thousand Dollars ($2,500,000) to be deducted
from the Cash Consideration and which shall be deposited in
an account under the control of the Massachusetts Court in
connection with case number 99-CV-10939-NG, styled Xxx X.
Xxxxxx x. Xxxxx & Xxxxxxx Engineering Corporation;
Losses: any and all damages, claims, costs, losses,
liabilities, expenses or obligations (including Taxes,
interest, penalties, court costs, costs of preparation and
investigation, and reasonable attorneys', accountants' and
other professional advisors' fees and expenses);
March 31 Balance Sheet: the consolidated balance sheet
of S&W as of March 31, 2000 as published with S&W's
April 30, 2000 earnings release, as corrected;
Massachusetts Court: United States District Court for
the District of Massachusetts;
Material Adverse Effect: a change (or event or
condition that could result in a change) resulting in a loss
or diminution of value equal to or in excess of Fifteen
Million Dollars ($15,000,000) in the business, condition
(financial or other), operations, assets or liabilities of
Sellers, whether individually or collectively, other than
changes resulting from (a) disruptions to the Business as a
result of Sellers' financial condition as of the Effective
Date, (b) the filing of the Bankruptcy Cases or (c) the
effect of the performance of the financial markets generally
on the Retirement Plan's assets and investments;
Materials of Environmental Concern: chemicals,
pollutants, contaminants, medical waste or specimens, toxic
substances, petroleum and petroleum products, including
hazardous wastes under the Resource, Conservation and
Recovery Act, 42 U.S.C. 6903 et seq., hazardous substances
under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 U.S.C. 9601 et seq., asbestos,
polychlorinated biphenyls and urea formaldehyde, and low-
level nuclear materials, special nuclear materials or
nuclear-byproduct materials, all within the meaning of the
Atomic Energy Act of 1954, as amended, and any rules,
regulations or policies promulgated thereunder;
Multiemployer Plan: defined in ERISA Section 3(37) or
Section 400l(a)(3);
Multiple Employer Plan: an Employee Pension Benefit
Plan which is not a Multiemployer Plan and for which a
Person who is not a member of a Controlled Group that
includes any of Sellers is or has been a contributing
sponsor;
Nordic Entities: Nordic Holdings, Inc., a Delaware
corporation, Nordic Investors, Inc., a Nevada corporation,
Nordic Rail Services, Inc., a North Carolina corporation,
Nordic Transportation Services, Inc., a North Carolina
corporation, Nordic Refrigerated Services, Inc., a North
Carolina corporation, Nordic Refrigerated Services, Limited
Partnership, a Georgia limited partnership, Commercial Cold
Storage, Inc., a Georgia corporation, and Polar Transport,
Inc., a North Carolina corporation;
Notice Period: as defined in Section 9.05(a)(i);
Other Plan: any Contract, program or arrangement which
provides cash or non-cash benefits or perquisites to current
or former employees of any of Sellers, but which is not an
Employee Benefit Plan, as set forth on Schedule 3.20(a);
Party: any party to this Agreement, its successors and
assigns;
Party In Interest: a "party in interest" as defined in
ERISA Section 3(14), and a "party in interest" as defined in
the Bankruptcy Code;
Permits: all licenses, permits, consents, approvals
and other authorizations of or from all Governmental
Authorities which are necessary to the ownership of the
Assets or in the conduct of the Business as presently
conducted and the ownership of the Assets;
Permitted Real Property Encumbrances: those
Encumbrances set forth on Schedule 3.12(b), which
Encumbrances generally include utility easements and other
customary covenants and restrictions of record that do not
adversely affect the ownership of the Real Property or the
conduct of the Business and Encumbrances related to Assumed
Liabilities;
Person: any individual, company, body corporate,
association, partnership, firm, joint venture, trust,
trustee or Governmental Authority;
Pre-Closing Environmental Matters: all liabilities
arising from (i) the pre-closing release of Materials of
Environmental Concern either in, on, under or from the Real
Property or any current or former facility where any Seller
has conducted the Business, including, without limitation,
the effects of such release of Materials of Environmental
Concern on natural resources, persons or property within or
outside the boundaries of the Real Property or any such
current or former facility, (ii) the presence as of the
Closing Date of Materials of Environmental Concern in, on or
under the Real Property or any such current or former
facility, (iii) the failure on or prior to the Closing Date
of the facility or any former facility or any operations of
Sellers to be in compliance with any Environmental Laws in
effect at the time of Closing, (iv) the disposal of
Materials of Environmental Concern by the Business or
arrangement thereof at any location other than the Real
Property or the current or former facilities on or prior to
the Closing Date, and (v) any other pre-Closing act,
omission or condition existing with respect to any of the
Assets or related to the Business, the Real Property or any
current or former facility prior to the Closing Date which
gives rise to liability under any Environmental Laws in
effect at the time of Closing;
Preferred Stock: preferred stock, no par value per
share, of Buyer;
Prescient Business: the business of Sellers conducted
by and through Prescient Technologies, Inc., together with
all assets and property used by such entity to conduct its
business;
Prime Rate: at the time any determination thereof is to
be made, the fluctuating per annum rate of interest then
most recently reported in the Wall Street Journal as the
"Prime Rate" (the base rate on corporate loans posted by at
least 75% of the nation's 30 largest banks) and if reported
as a range, the interest rate shall be the mid-point of the
range. In the event that the Wall Street Journal ceases to
report the Prime Rate, then "Prime Rate" shall mean the
fluctuating interest rate per annum announced from time to
time by Bank One, NA as its "prime rate" (or, if otherwise
denominated, such bank's reference rate for interest rate
calculations on general commercial loans), which rate is not
necessarily the lowest or best rate that such bank may at
any time or from time to time charge any of its customers;
Process Business: certain assets (including real
property) and liabilities of Sellers with respect to
ethylene process technology (comprising hot-end ethylene
technology and cold-end ethylene technology) and fluid
catalytic cracking technology;
Prohibited Transaction: as defined in ERISA Sec. 406
and Code Sec. 4975;
Project Rejected Contracts: Rejected Contracts and
Completed Contracts related to projects as to which standby
letters of credit are outstanding under S&W's existing bank
credit facilities, which Contracts are set forth and
designated as such on Schedule 5.16(b) (as amended or
supplemented in accordance with Section 5.16(b)) and to
which the LC Deposit relates;
Purchase Price Adjustment Schedule: as defined in
Section 2.05(c)(i)(A);
Real Property: all real property owned or leased by
any Seller, including the real property described on
Schedule 2.01(a), together with all buildings, improvements
and fixtures thereon and all appurtenances and rights
thereto;
Real Property Encumbrances: those Encumbrances set
forth on Schedule 3.12(a) related to the Real Property;
Registration Rights Agreement: the Registration Rights
Agreement by and among Buyer and the Holders dated the date
hereof;
Rejected Contracts: all Contracts of Sellers
(including the Project Rejected Contracts) designated as
such on Schedule 5.16(b) and any obligations (other than
Assumed Liabilities) of Sellers in any manner whatsoever
connected with such Contracts, including, without
limitation, any obligations relating to surety bonds;
Rejected Contracts Receivables: all Accounts
Receivable related to Rejected Contracts;
Reportable Event: as defined in ERISA Sec. 4043;
Retirement Plans: The Stone & Xxxxxxx Pension Plan,
Fourth Replacement Definitive Deed, dated 22 December 1999
(to which Stone & Xxxxxxx Engineering Limited is the
Principal Employer) and the Employee Retirement Plan of
Stone & Xxxxxxx Canada Limited;
Sale Motion: the motion or motions, in form and
substance reasonably acceptable to Buyer, filed by Sellers,
pursuant to the provisions of Sections 363 and 365 of the
Bankruptcy Code, in the Bankruptcy Cases, among other
things, to obtain the Sale Order, approve the Transaction
and authorize the assumption and assignment of the Assumed
Contracts to Buyer;
Sale Order: the Order of the Bankruptcy Court, dated
July 13, 2000, which, among other things, granted the Sale
Motion, approved, authorized and directed Sellers to assume
this Agreement and consummate the Transaction and otherwise
contained the provisions described in Section 5.17(a);
SEC: the Securities and Exchange Commission;
Sections: sections of the Agreement, unless the
context indicates otherwise;
Securities Act: the Securities Act of 1933, as
amended;
Sellers: as defined in the Preamble;
Sellers' Indemnified Persons: Sellers and any of
Sellers' members, Affiliates, successors and assigns, and
their respective shareholders, members, directors, trustees,
officers, employees, agents and representatives;
Share Consideration: as defined in Section 2.05(a);
Special Project Claims: any and all claims under the
project agreements set forth on Schedule 2.02(e) to the
extent not reflected on the March 31 Balance Sheet;
SWEC: as defined in Section 2.01(b);
Subsidiaries: as to any Person, a corporation,
partnership, limited liability company or other entity of
which 50% or more of the voting power of the outstanding
voting equity securities or 50% or more of the outstanding
economic equity interest is held or controlled, directly or
indirectly, by such Person;
Tax: any income, unrelated business income, gross
receipts, license, payroll, employment, excise, severance,
stamp, occupation, privilege, premium, windfall profits,
environmental (including taxes under Code Section 59A),
customs duties, capital stock, franchise, profits,
withholding, social security, unemployment, disability, real
property, personal property, stamp, sales, use, transfer,
registration, unclaimed property, value added, alternative
or add-on minimum, estimated or other tax, assessment,
charge, levy or fee of any kind whatsoever, including
payments or services in lieu of Taxes, interest or penalties
on and additions to all of the foregoing, which are due or
alleged to be due to any Governmental Authority, whether
disputed or not;
Tax Return: any return, declaration, report, claim for
refund, information return or statement, including schedules
and attachments thereto and amendments, relating to Taxes;
Third Party Claim: as defined in Section 9.05(a)(i);
Time & Material Agreement: the Time & Material
Agreement by and among Buyer and Sellers dated as of the
date hereof;
TPPI Contract: as defined in Section 2.01(b);
TPPI Equipment: as defined in Section 2.01(b);
Transaction: the sale and purchase of the Assets
contemplated in this Agreement, together with any and all
related transactions designed to implement, facilitate or
expedite such sale and purchase of the Assets;
Unaudited Financial Statements: the unaudited
consolidated balance sheet of S&W as of March 31, 2000, and
the unaudited consolidated statement of operations and
unaudited consolidated statement of cash flows for the three
month period then ended, together with the notes thereto, as
reflected in S&W's quarterly report on Form 10-Q for the
quarter ended March 31, 2000 filed with the SEC, a copy of
which is attached to this Agreement as Schedule 3.06; and
WARN Act: the Worker's Adjustment and Retraining
Notification Act, 29 U.S.C. 2101-2109.
1.02. Certain References. As used in this Agreement,
and unless the context requires otherwise:
(a) references to "include" or "including" mean including
without limitation;
(b) references to "partners" include general and limited
partners of partnerships and members of limited liability
companies;
(c) references to "partnerships" include general and
limited partnerships, joint ventures and limited liability
companies;
(d) references to "hereof", "herein" and derivative or
similar words refer to this Agreement;
(e) references to any document are references to that
document as amended, consolidated, supplemented, novated or
replaced by the parties thereto from time to time;
(f) references to any law are references to that law as
amended, consolidated, supplemented or replaced from time to time
and all rules and regulations promulgated thereunder;
(g) references to time are references to Wilmington,
Delaware time;
(h) the gender of all words includes the masculine,
feminine and neuter, and the number of all words includes the
singular and plural; and
(i) the Table of Contents, the divisions of this Agreement
into articles, sections and subsections and the use of captions
and headings in connection therewith are solely for convenience
and shall have no legal effect in construing the provisions of
this Agreement.
2. SALE OF ASSETS AND RELATED MATTERS
2.01. Sale of Assets. Subject to the terms and
conditions of this Agreement, at Closing Sellers shall sell,
assign, convey, transfer and deliver to Buyer, or cause to be
sold, assigned, conveyed, transferred and delivered to Buyer, and
Buyer shall purchase from Sellers, the Assets, free and clear of
all Encumbrances other than the Permitted Real Property
Encumbrances, including the following:
(a) the Real Property;
(b) all equipment, vehicles, furniture and furnishings and
other tangible personal property of Sellers, including all of the
equipment purchased by Stone & Xxxxxxx Engineering Corporation
("SWEC"), a wholly-owned indirect Subsidiary of S&W, and certain
other Subsidiaries and Affiliates of S&W, pursuant to and under
the Engineering, Procurement and Construction Contract (the "TPPI
Contract") dated January 24, 1997 between P.T. Trans-Pacific
Petrochemical Indotama and a consortium consisting of AEC
International Projects, Inc., Projects Engineers Incorporated,
SWEC and JGC Corporation (collectively, the "TPPI Equipment"), a
list of which equipment has been provided to or made available to
Buyer;
(c) all usable supplies and inventory of Sellers;
(d) all financial, project-related, personnel and other
records of the Business (including equipment records, project
plans, documents, catalogs, books, records, files and operating
manuals);
(e) all interests of Sellers in the Assumed Contracts;
(f) all Permits and other approvals (including pending
approvals) of Governmental Authorities relating to the ownership,
development and operations of the Business and the Assets,
including the Permits described on Schedule 2.01(f), to the
extent transferable or assignable under applicable Legal
Requirements;
(g) all interests of Sellers in and to all Intellectual
Properties used in connection with, or derived from or arising
out of, the ownership and operation of the Business and all
computer software, programs and similar systems owned or licensed
by any Seller for use at or in connection with the Business,
including those set forth on Schedule 2.01(g);
(h) all interests of Sellers in all property, real,
personal or mixed, tangible or intangible, arising or acquired
between the Effective Date and the Closing Date;
(i) the Investments described on Schedule 2.01(i);
(j) general intangibles of the Business, including
goodwill;
(k) any and all claims and causes of action, including
privileges related thereto, of any Seller against third parties
relating to (i) the value, condition or title to the Assets,
manufacturer's or vendor's warranties with respect to the Assets
or product liability claims related to the Assets, whether xxxxxx
or inchoate, known or unknown, contingent or otherwise, (ii) the
Assumed Liabilities or the Assumed Contracts or (iii) the Project
Rejected Contracts, to the extent of any payments made by Buyer
pursuant to letters of credit outstanding with respect to Project
Rejected Contracts which payments are not reimbursed from the
Indemnity Deposit or otherwise repaid to Buyer by Sellers;
(l) all corporate office furniture and equipment, data
center hardware and equipment, residential real property and
other assets of Sellers wherever located;
(m) all Accounts Receivable (other than Completed Contracts
Receivables and Rejected Contracts Receivables);
(n) all Cash (other than the Cash Consideration);
(o) subject to the Sale Order, all of Sellers' right, title
and interest in the Cold Storage Business;
(p) all security or other deposits relating to, without
limitation, the Real Property and any equipment owned or leased
by any Seller;
(q) any prepaid expenses other than those related to
Excluded Assets;
(r) the Retirement Plans;
(s) subject to the Sale Order, all of Sellers' right, title
and interest in the Process Business; and
(t) all proceeds of the foregoing and all other property of
Sellers of every kind, character or description, tangible and
intangible, known or unknown, wherever located and whether or not
reflected on the Financial Statements or similar to the
properties described above.
2.02. Excluded Assets. Notwithstanding the generality
of Section 2.01, the following assets are not a part of the sale
and purchase contemplated by this Agreement and are excluded from
the Assets (the "Excluded Assets"):
(a) the Rejected Contracts, all Rejected Contracts
Receivables, cash in the project bank accounts relating to
Rejected Contracts or Completed Contracts (not to exceed $50,000
per Rejected Contract or Completed Contract) and drawings related
to, and equipment specifically purchased pursuant to the
requirements of, the Rejected Contracts;
(b) the Completed Contracts and all Completed Contracts
Receivables and drawings related to the Completed Contracts;
(c) inventory and supplies disposed of or exhausted prior
to the Closing Date in the ordinary course of Sellers' Business
and Assets transferred or disposed of in accordance with Section
5.03(e);
(d) those other assets of Sellers set forth on Schedule
2.02(d);
(e) the Special Project Claims and any avoidance claims
available to Sellers under Chapter 5 of the Bankruptcy Code and
all claims relating to Excluded Liabilities;
(f) the Share Consideration;
(g) the Cash Consideration;
(h) the Excluded Subsidiary Stock;
(i) items characterized as "deferred income taxes" on the
March 31 Balance Sheet and the Closing Balance Sheet;
(j) the ESOP and the ESOP Note; and
(k) any other assets excluded by mutual written agreement
of the parties.
2.03. Assumed Liabilities. As of the Closing Date,
Buyer shall assume the Assumed Liabilities.
2.04. Excluded Liabilities. Under no circumstance shall
Buyer assume or be obligated to pay, and none of the Assets shall
be or become liable for or subject to, any of the Excluded
Liabilities, including the following liabilities, which shall be
and remain liabilities of Sellers:
(a) liabilities accrued on the Closing Balance Sheet other
than the Assumed Liabilities;
(b) liabilities or obligations for items characterized as
deferred income taxes on the March 31 Balance Sheet and the
Closing Balance Sheet or Taxes resulting from the consummation of
the Transaction;
(c) liabilities or obligations associated with any Excluded
Assets;
(d) liabilities or obligations associated with any and all
indebtedness of Seller for borrowed money not included in the
Assumed Liabilities;
(e) liabilities or obligations under the Assumed Contracts
that are not Assumed Liabilities and liabilities or obligations
arising under the Rejected Contracts or the Completed Contracts;
(f) liabilities or obligations arising out of or in
connection with claims, litigation and proceedings (whether
instituted prior to or after Closing) for acts or omissions which
occurred, or arise from events that occurred, prior to the
Closing Date, including such liabilities or obligations as are
reflected on the March 31 Balance Sheet and will be reflected on
the Closing Balance Sheet;
(g) liabilities or obligations (i) to Sellers' employees
(other than under the Employee Agreements), (ii) with respect to
the Employee Benefit Plans and Other Plans, (iii) of Sellers to
the Internal Revenue Service, PBGC or any other Governmental
Authority relating to Sellers' employees, in each case arising
from or relating to periods prior to Closing (whether or not
triggered by the Transaction or the announcement thereof) except
to the extent reflected on the Closing Balance Sheet;
(h) liabilities or obligations related to the ESOP,
including, without limitation, those liabilities and obligations
reflected on the Closing Balance Sheet;
(i) penalties, fines, settlements, interest, costs and
expenses arising out of or incurred as a result of any actual or
alleged violation by any of Sellers of any Legal Requirement;
(j) liabilities or obligations under the WARN Act, if any,
arising out of or resulting from layoffs of employees by Sellers
prior to Closing and/or the consummation of the Transaction
sufficient in the aggregate to require notice under the WARN Act,
but not those that may arise from any layoffs of Hired Employees
by Buyer after the Closing;
(k) liabilities related to any debtor in possession
financing under Section 364(b), (c) or (d) of the Bankruptcy
Code;
(l) all liabilities of Sellers for expenses (i) of the
negotiation and preparation of this Agreement, (ii) relating to
the Transaction, (iii) of the filing and administration of the
Bankruptcy Cases, in each case to the extent incurred by Sellers
or any of them and including those related to legal counsel,
accounting, brokerage and investment advisors fees and
disbursements and (iv) any pending shareholder claim, litigation
or proceeding; and
(m) any amounts paid by or on behalf of Sellers to Jacobs,
including, without limitation, any amounts paid by or on behalf
of Sellers pursuant to the Jacobs Asset Purchase Agreement
(including the Break-Up Fee (as defined therein) and the Expense
Reimbursement (as defined therein)), the Jacobs Credit Agreement
or the Jacobs DIP Agreement.
2.05. Equity Purchase Price; Indemnity Deposit, LC
Deposit and Litigation Deposit; Delivery of Consideration; Equity
Purchase Price Adjustments; Allocation of Equity Purchase Price.
(a) Equity Purchase Price; Aggregate Consideration.
Subject to the terms and conditions hereof, in reliance upon the
representations and warranties of S&W and the covenants of
Sellers herein set forth, and as consideration for the sale and
purchase of the Assets, at Closing, Buyer shall assume the
Assumed Liabilities and shall tender to Sellers as the purchase
price for the Assets, subject to the provisions of Section
2.05(b) and adjustment as provided in Section 2.05(c), cash and
Common Stock having an aggregate value of One Hundred Forty-Three
Million Four Hundred Thousand Dollars ($143,400,000) (the
aggregate Cash Consideration and Share Consideration being
referred to collectively as the "Equity Purchase Price") as
follows: (i) cash (the "Cash Consideration") in the amount of
Thirty-Seven Million Six Hundred Thousand Dollars ($37,600,000)
and (ii) shares of Common Stock (the "Share Consideration")
having a market value of One Hundred Five Million Eight Hundred
Thousand Dollars ($105,800,000), based on the average closing
price on the New York Stock Exchange of a share of Common Stock
for the ten trading days ending on the trading day immediately
preceding the Closing Date (the "Average Price"); provided,
however, that if the Average Price would be greater than Fifty-
Five Dollars ($55.00) per share, then the Average Price shall be
deemed to be Fifty-Five Dollars ($55.00) per share for purposes
of calculating the number of shares of Common Stock to be
delivered as the Share Consideration portion of the Equity
Purchase Price. The Parties agree that the aggregate
consideration to be paid by Buyer to Sellers in connection with
the Transaction (the "Aggregate Consideration") comprises (A) the
Assumed Liabilities, (B) the Cash Consideration and (C) the Share
Consideration.
(b) Indemnity Deposit, LC Deposit and Litigation Deposit;
Delivery of Consideration. The Indemnity Deposit (which shall
constitute a part of and be withheld from the Share Consideration
otherwise payable to Sellers) and the LC Deposit (which shall
constitute a part of and be withheld from the Share Consideration
otherwise payable to Sellers) shall be delivered by Buyer to the
Escrow Agent as provided in Section 8.03(b) and shall be held and
disbursed by the Escrow Agent in accordance with the terms and
conditions of the Indemnity Escrow Agreement. The Litigation
Deposit (which shall be deducted from and reduce the amount of
Cash Consideration otherwise payable to Sellers) shall be
delivered by Buyer to an account under the control of the
Massachusetts Court as provided in Section 8.03(c) and shall be
held and disbursed by the Massachusetts Court. The Cash
Consideration (less the Litigation Deposit) shall be paid at the
Closing by wire transfer of immediately available funds to an
account or accounts designated by Sellers in writing (and, to the
extent applicable, the Litigation Deposit shall be transferred by
wire transfer to the account designated by the Massachusetts
Court), and the Parties shall execute such receipts or other
acknowledgments as are reasonably necessary to evidence payment
and receipt of the Cash Consideration. The Share Consideration,
less the Indemnity Deposit and the LC Deposit, shall be paid at
the Closing by the issuance of shares of Common Stock to Sellers
and the delivery to Sellers at the Closing of one or more stock
certificates in the name of Sellers or their designees
representing the Common Stock comprising the Share Consideration
issued pursuant to this Agreement.
(c) Equity Purchase Price Adjustments.
(i) Within 60 days after the Closing Date, S&W shall
prepare and deliver to Buyer the Closing Balance Sheet together
with the report of PricewaterhouseCoopers LLP thereon. The
Closing Balance Sheet will be prepared in accordance with GAAP
applied on a basis consistent with the presentation of the March
31 Balance Sheet except with respect to the classification of the
TPPI Equipment and except for using estimated costs of
completion, change order recoveries and claim recoveries with
respect to Rejected Contracts and Completed Contracts and
liability estimates with respect to matters set forth in
Section 2.04(f) as of March 31, 2000 without further revisions.
Buyer shall cause the Hired Employees to assist Seller in
connection with the preparation of the Closing Balance Sheet.
The Closing Balance Sheet shall be accompanied by an additional
schedule of information (the "Purchase Price Adjustment
Schedule") which shall contain (x) a detailed list of the assets
of Sellers related to the Rejected Contracts and Completed
Contracts and the liabilities of Sellers related to the Rejected
Contracts, the Completed Contracts and the Excluded Liabilities
(other than the liabilities for items characterized as deferred
income taxes on the March 31 Balance Sheet and the Closing
Balance Sheet, liabilities and obligations related to the ESOP,
Taxes resulting from the consummation of the Transaction and
those items referenced in Section 2.04(k) and Section 2.04(l) and
any liabilities relating to the TPPI Contract), in each case that
are included in the Closing Balance Sheet and (y) a calculation
showing the sum of such assets (the "Adjustment Assets") and the
sum of such liabilities (the "Adjustment Liabilities") and the
difference resulting from the Adjustment Assets less the
Adjustment Liabilities (the "Adjustment Amount"); provided,
however, any adjustments included in the Adjustment Amount as the
result of the write off or write down of accounts receivable
related to Rejected Contracts or Completed Contracts shall not
exceed $2,000,000 in the aggregate.
(ii) If Buyer disagrees with the preparation of the Closing
Balance Sheet or the Purchase Price Adjustment Schedule, Buyer
shall notify S&W in writing of such disagreement within 30 days
after delivery of the Closing Balance Sheet and the Purchase
Price Adjustment Schedule, which notice shall describe the nature
of any such disagreement and provide reasonable supporting
documentation for each such disagreement. During the 30 day
period of its review, Buyer shall have reasonable access to any
documents, schedules or work papers used in the preparation of
the Closing Balance Sheet and the Purchase Price Adjustment
Schedule.
(iii) Buyer and S&W agree to negotiate in good faith to
resolve any such disagreement regarding the preparation of the
Closing Balance Sheet or the Purchase Price Adjustment Schedule,
and any resolution of such disagreement agreed to in writing by
Buyer and S&W shall be final and binding upon the parties. If
Buyer and S&W are unable to resolve all disagreements identified
by Buyer pursuant to Section 2.05(c)(ii) within 30 days after
delivery to Seller of written notice of such disagreement by
Buyer, then the disputed matters shall be referred for final
determination to Deloitte & Touche LLP. If Deloitte & Touche LLP
is unable to serve, Buyer and S&W shall jointly select an arbiter
from one of the "Big 5" accounting firms that is not the
independent auditor for either Buyer or S&W; provided, however,
that if Buyer and S&W are unable to select such an arbiter within
such time period, the American Arbitration Association shall make
such selection (Deloitte & Touche LLP or any other person so
selected shall be referred to herein as the "Accounting
Arbitrator".) The Accounting Arbitrator will only consider those
items and amounts as to which Buyer and S&W have disagreed within
the time periods and on the terms specified above and must
resolve the matter in accordance with the terms and provisions of
this Agreement. The Accounting Arbitrator shall select as a
resolution the position of either Buyer or S&W for each item of
disagreement (based solely on presentations and supporting
material provided by the parties and not pursuant to any
independent review) and may not impose an alternative resolution.
The Accounting Arbitrator shall deliver to Buyer and S&W, as
promptly as practicable and in any event within 45 days after its
appointment, a written report setting forth the resolution of any
such disagreement determined in accordance with the terms of this
Agreement. Such report shall be final and binding upon the
parties to the fullest extent permitted by applicable law. The
fees, expenses and costs of the Accounting Arbitrator shall be
borne one-half by Buyer and one-half by S&W.
(iv) If the Adjustment Amount, as finally determined after
the procedures set forth in this Section 2.05(c), is a positive
number the Equity Purchase Price shall be decreased dollar for
dollar by the Adjustment Amount, and if the Adjustment Amount is
a negative number, the Equity Purchase Price shall be increased
dollar for dollar by the Adjustment Amount (expressed as a
positive number). If the Equity Purchase Price is decreased as a
result of the purchase price adjustment, S&W shall pay to Buyer
the amount of such decrease, and if the Equity Purchase Price is
increased as a result of such adjustment, the Buyer shall pay to
S&W the amount of such increase, in each case, by delivery within
5 days of such determination shares of Common Stock calculated on
the basis of the Average Price; provided, however, that Buyer
may, at its election and in its sole discretion, pay Sellers all
or any portion of any increased Equity Purchase Price pursuant to
this Section 2.05(c)(iv) in cash in lieu of delivering some or
all of any shares of Common Stock to be delivered pursuant to
this Section 2.05(c)(iv).
(d) Allocation of Equity Purchase Price. Buyer and Sellers
agree that a portion of the Equity Purchase Price shall be
allocated and delivered to any Foreign Seller as required by
applicable Legal Requirements for the reasonable protection of
the Buyer or the Sellers, as the case may be.
2.06. Registration Rights. Sellers shall be given
registration rights with respect to the Common Stock comprising
the Share Consideration, subject to the terms and conditions of
the Registration Rights Agreement by and among Buyer and those
Sellers who will hold Common Stock comprising the Share
Consideration.
2.07. Addition of Sellers; Schedules. S&W agrees that
it will cause this Agreement to be amended to add as Sellers
hereunder any of its Subsidiaries that have any right, title or
interest in or to any of the Assets. S&W and Buyer agree that
any references herein to Sellers shall mean and include S&W and
all such Subsidiaries, and the representations and warranties of
S&W in this Agreement shall be made with respect to all Sellers
as if all Sellers had been Parties to this Agreement on the date
hereof. The Schedules referred to in this Agreement shall be
delivered concurrently with the execution of this Agreement.
Such Schedules may be amended to reflect any changes required as
a result of the addition of applicable Subsidiaries as
additional Sellers hereunder. Buyer shall have two business days
from the delivery of amended Schedules to accept or reject the
same.
3. REPRESENTATIONS AND WARRANTIES OF S&W
S&W hereby represents and warrants to Buyer as follows:
3.01. Organization. Each Seller is duly organized,
validly existing and, to the extent applicable in the case of
Foreign Sellers, in good standing under the laws of its
jurisdiction of organization or incorporation, as the case may
be. Each Seller is licensed, registered, qualified or admitted
to do business in each jurisdiction in which the ownership, use
or leasing of any of such Seller's assets or properties
(including the Assets), or the conduct or nature of the Business,
makes such licensing, registration, qualification or admission
necessary, except where such failure would not have a Material
Adverse Effect.
3.02. Powers; Consents; Absence of Conflicts, Etc.
Subject to approval of this Agreement by the Bankruptcy Court,
each Seller has the requisite power and authority to conduct its
businesses as now being conducted, to enter into this Agreement
and to perform its respective obligations hereunder, and the
execution, delivery and performance by each Seller of this
Agreement and the consummation of the Transaction:
(a) are within such Seller's corporate powers, are not in
contravention of the terms of its articles or certificate of
incorporation or other organizational documents, as amended to
date, or its bylaws and other governing documents, as amended to
date, and have been duly authorized by all appropriate corporate,
partnership, shareholder and partner action, as the case may be;
(b) except as otherwise expressly provided in this
Agreement or as set forth on Schedule 3.02(b), do not require any
approval or consent of, or filing with, any Governmental
Authority;
(c) except as set forth on Schedule 3.02(c) or as excused
by the Bankruptcy Court, do not conflict with, or result in any
breach or contravention of, any Assumed Contract to which any
Seller is a party or by which it is bound; and
(d) do not violate any Legal Requirement to which any
Seller or the Assets may be subject;
except, in the case of the foregoing clauses (b), (c) and (d),
for such conflicts or violations as to which requisite waivers or
consents have been obtained or which would not have a Material
Adverse Effect.
3.03. Binding Agreement. This Agreement and all
instruments and agreements hereunder to which each Seller is or
becomes a party are (or upon execution will be) valid and legally
binding obligations of each such Seller, enforceable against each
Seller in accordance with the respective terms hereof or thereof,
except as enforceability may be subject to general principles of
equity and enforceability may be restricted, limited or delayed
by applicable bankruptcy or other laws effecting creditors'
rights generally.
3.04. Subsidiaries, Investments and Third Party Rights.
After the Closing, no Seller will conduct any business that
competes with the Business and no Seller will own or hold any
interests in any Persons that conduct any business that competes
with the Business, except and solely to the extent necessary to
fulfill the obligations of any Seller under any Contracts other
than the Assumed Contracts. Except as set forth on
Schedule 2.01(i), no Seller holds any Investments that are not
reflected as assets on the March 31 Balance Sheet. Except as set
forth on Schedule 3.04, there are no agreements with, or options,
commitments or rights in favor of, any Person to directly or
indirectly acquire any of the Assets, or any interest therein.
3.05. Legal and Regulatory Compliance. Except as set
forth on Schedule 3.05, each Seller is in compliance with all
Legal Requirements, and has timely filed all reports, data and
other information required to be filed with Governmental
Authorities, except where a failure to be in compliance or file
timely would not have a Material Adverse Effect.
3.06. Financial Statements. Attached as Schedule 3.06
are copies of the Audited Financial Statements, the Unaudited
Financial Statements, the Interim Financial Statements and the
interim financial statements as of June 30, 2000 of the Foreign
Subsidiaries. Except as disclosed on Schedule 3.08, the
Financial Statements are true, complete and accurate in all
material respects and fairly present the financial condition and
results of operations of S&W as of the respective dates thereof
and for the periods therein referred to, all in accordance with
generally accepted accounting principles ("GAAP"), subject in the
case of the Unaudited Financial Statements and Interim Financial
Statements to normal recurring quarterly and year-end adjustments
(the effect of which will not, individually or in the aggregate,
be materially adverse) and the absence of notes (which, if
presented, would not differ materially from those included in the
Audited Financial Statements); and the Financial Statements
reflect the consistent application of such accounting principles
throughout the periods involved.
3.07. Undisclosed Liabilities. Schedule 3.07 contains
an accurate description, to the Knowledge of Sellers, of all
material liabilities of Sellers not included in the Audited
Financial Statements or the Unaudited Financial Statements of any
nature relating to the Assets or the Business, whether accrued,
absolute, contingent or otherwise, together with, in the case of
those liabilities which are not fixed in amount, a reasonable
estimate of the maximum amount which may be payable in respect
thereof.
3.08. Recent Activities. Except as set forth on
Schedule 3.08:
(a) Since April 30, 2000, and except for the announcement
of the Transaction, the filing of the Bankruptcy Cases and
disruptions arising therefrom, no event has occurred which has
had a Material Adverse Effect.
(b) Since December 31, 1999:
(i) to the Knowledge of Sellers, no material damage,
destruction or loss (whether or not covered by insurance)
has occurred affecting the Assets;
(ii) no Seller has increased or agreed to increase the
compensation payable to any of its employees or agents or
made or agreed to make any bonus or severance payment to any
of its employees or agents except in the ordinary course of
the Business and consistent with past practice, and no
Seller has employed any additional management personnel
except in the ordinary course of the Business and consistent
with past practice;
(iii) no labor dispute, enactment of state or local
law, promulgation of state or local regulation, or other
event or condition has occurred which has had a Material
Adverse Effect;
(iv) no Seller has sold, assigned, transferred,
distributed or otherwise disposed of any of the Assets,
except in the ordinary course of the Business;
(v) no Seller has canceled or waived any rights in
respect of the Assets, except in the ordinary course of the
Business;
(vi) there has been no change in any accounting
method, policy or practice of any Seller, except as required
by announcements of the Financial Accounting Standards Board
or as disclosed in S&W's Form 10-Q for the quarter ended
March 31, 2000;
(vii) there has been no change in the manner in which
any Employee Benefit Plan and any assets or liabilities
related thereto has been administered; and
(viii) to the Knowledge of Sellers, no Seller has
received from any Governmental Authority notice that it is
in material violation of any Legal Requirement.
3.09. Subsidiaries and Affiliates; Assets. Each direct
and indirect Subsidiary and Affiliate of S&W that owns or has any
interest in the Assets is set forth on Schedule 3.09. Except as
set forth on Schedule 3.09, no Person that is not a Seller owns,
holds title to or has any other direct, indirect or beneficial
interest in any of the Assets.
3.10. Equipment. All equipment that is material to the
conduct of the Business, whether reflected in the Financial
Statements or otherwise, is well maintained and in good operating
condition, except for reasonable wear and tear. All leased
equipment that is material to the conduct of the Business is
maintained in all material respects (either by Sellers, the
manufacturer or lessor, as the case may be) in accordance with
manufacturer and lessor requirements.
3.11. Title to Personal Property. Except as described
on Schedule 3.11, Sellers own and hold good and valid title or
leasehold title, as the case may be, to all the Assets, other
than the Real Property, free and clear of any Encumbrances. At
Closing Sellers will convey to Buyer good and valid title to all
the Assets, other than the Real Property, free and clear of any
material Encumbrances.
3.12. Real Property.
(a) Sellers own or hold fee simple or leasehold title, as
the case may be, to the Real Property together with all
buildings, improvements and fixtures thereon and all
appurtenances and rights thereto, free and clear of any
Encumbrances other than the Real Property Encumbrances.
(b) At the Closing, Sellers will convey to Buyer good and
marketable fee simple or leasehold title, as the case may be, to
all Real Property, free and clear of any Encumbrances other than
the Permitted Real Property Encumbrances.
(c) The Real Property comprises all of the real property
owned or leased by Sellers which is associated with or employed
in the operation of the Business.
(d) The buildings and other improvements constructed on the
Real Property and material to the conduct of the Business are in
a state of good condition and repair, in all material respects,
and are in need of no maintenance or repairs except for ordinary,
routine maintenance.
(e) There are no pending or, to the Knowledge of Sellers,
threatened condemnation or similar proceedings or special
assessments relating to the Real Property or any part thereof.
(f) To the Knowledge of Sellers, no part of the Real
Property contains, is located within or abuts any flood plain,
navigable water or other body of water, tideland, wetland,
marshland or any other area which is subject to special State,
federal or municipal regulation, control or protection.
(g) Sellers have received all required material approvals
of Governmental Authorities (including, without limitation,
Permits and material certificates of occupancy or other such
certificates permitting lawful occupancy of the Real Property)
required in connection with the use of the Real Property and all
improvements thereon.
3.13. Environmental Matters.
(a) To the Knowledge of Sellers, the Business is, and since
January 1, 1995 has been, in material compliance with all
applicable Environmental Laws.
(b) Except as set forth on Schedule 3.13(b), no Seller has
received any written Environmental Claim nor, to the Knowledge of
Sellers, is there any basis for any Environmental Claim
(including, without limitation, knowledge of any actions,
activities, circumstances, conditions, events or incidents,
including the release, emission, discharge or disposal of any
Materials of Environmental Concern, whether relating to the
Assets or the Business or otherwise).
(c) Except as set forth on Schedule 3.13(c), to the
Knowledge of Sellers, there is no existing contamination by, and
there has not been any material release of, any Materials of
Environmental Concern on, at, under or around any of the Assets
or on or in connection with the Business.
(d) To the Knowledge of Sellers, true, complete and correct
copies of the written reports, and all parts thereof, of all
environmental audits or assessments which have been conducted
with respect to any Seller or the Business, either by any Seller
or any environmental consultant or engineer engaged for such
purpose, have been made available to Buyer, and a list of all
such reports, audits and assessments and any other similar
report, audit or assessment is included on Schedule 3.13(d). To
the Knowledge of Sellers, Sellers have provided Buyer with true,
complete and correct copies of all environmental audits and
assessments in the possession of Sellers relating to any of the
Assets or any Pre-Closing Environmental Matter.
(e) Each Seller has all material Permits required under
applicable Environmental Laws to own or lease its properties and
to conduct the Business thereon. All Permits currently held by
Sellers pursuant to the Environmental Laws are identified on
Schedule 2.01(f).
(f) Without in any way limiting the generality of the
foregoing, except as set forth on Schedule 3.13(f), (i) all
Materials of Environmental Concern are handled and disposed of in
material compliance with all applicable Environmental Laws,
(ii) to the Knowledge of Sellers, all underground storage tanks
located on the Real Property, and the capacity and contents of
such tanks, are identified on Schedule 3.13(f), (iii) to the
Knowledge of Sellers, there is no exposed friable asbestos
contained in or forming part of any building, building component,
structure or office space owned or leased by Sellers and used in
the conduct of the Business, and (iv) no polychlorinated
biphenyls are used or stored at any Real Property owned or leased
by Sellers.
(g) Notwithstanding the foregoing, the representations and
warranties in this Section 3.13 shall be deemed to be made
without the benefit of any knowledge or materiality qualifiers
with respect to the matters applicable to the Cold Storage
Business and with respect to matters involving any handling,
storage or release of nuclear materials that constitute Materials
of Environmental Concern.
3.14. Intellectual Properties, Computer Software, etc.
Except as described on Schedule 3.14 and except for customary
licensing fees payable under the Contracts, Sellers have the
right to use, free and clear of any royalty or other payment
obligations, claims of infringement against Intellectual
Properties or computer software, programs or similar systems
owned by any Seller or any liens, (a) all Intellectual Properties
used or needed by Sellers in the conduct of the Business, and
(b) all computer software, programs and similar systems owned by
or licensed under Contracts to any Seller and used in the conduct
of the Business, and no Seller is in violation or infringement
of, nor has any Seller received any notice alleging any conflict
with or violation or infringement of, any rights of any other
Person with respect to any such Intellectual Properties or
computer software, programs or similar systems. Except as set
forth on Schedule 3.14 and except for customary licensing fees
payable under the Contracts, subsequent to the Closing and
without further action or the payment of additional fees,
royalties or other compensation to any Person, Buyer will be
entitled to unrestricted use of all Intellectual Properties,
computer software, programs and similar systems as currently used
in the Business.
3.15. Insurance. Schedule 3.15 describes all insurance
arrangements, including self-insurance, in place for the benefit
of the Assets and the conduct of the Business. True and correct
copies of all such policies and any endorsements thereto have
been made available to Buyer.
3.16. Permits and Licenses. Schedule 2.01(f) contains a
complete and accurate list and summary description of all
material Permits and franchises (including applications therefor)
owned or held by Sellers relating to the ownership, development
or operations of the Business or the Assets, all of which are in
good standing and not subject to challenge. Each Seller is, with
respect to the Business, duly licensed by the appropriate
Governmental Authorities, except where the failure to be so
licensed would result in liabilities of less than Five Hundred
Thousand Dollars ($500,000) in the aggregate. Each Seller is,
and the Business is and has at all time been conducted, in
compliance with any and all applicable licensing requirements,
except where the failure to be so licensed would result in
liabilities of less than Five Hundred Thousand Dollars ($500,000)
in the aggregate. There are no provisions in or agreements
relating to any such Permits or franchises (including
applications therefor) which would preclude or limit Buyer from
operating the Business and using all Assets in their current
conditions and locations, except for such provisions relating to
the assignment or transfer of any Permit or franchise.
3.17. Agreements and Commitments.
(a) Schedule 3.17 is a true, complete and correct list of
all Contracts (other than Immaterial Contracts) conforming to the
descriptions set forth in this Section 3.17 to which any Seller
is a party, copies of each of which have been delivered or made
available to Buyer:
(i) Contracts involving payments by or to any Seller
in excess of One Hundred Thousand Dollars ($100,000) not
made in the ordinary course of business;
(ii) any employee collective bargaining agreement or
other Contract with any labor union covering employees of
any of the Sellers;
(iii) any Contract (including sales orders)
involving the obligation of any Seller to deliver products
or services;
(iv) any option or other Contract to purchase or
otherwise acquire or sell or otherwise dispose of any
interest in any real property (including the Real Property);
(v) any Contract under which any Seller has agreed to
indemnify any third party with respect to, or to share, the
Tax liability of any third party;
(vi) any Contract to make a capital expenditure or to
purchase a capital asset in excess of Two Hundred Fifty
Thousand Dollars ($250,000) by or on behalf of any Seller in
connection with the Assets or the operation of the Business
other than capital expenditures relating to assets which are
to become part of a project;
(vii) any Contract relating to the location of
employees or minimum number of employees to be employed by
any Seller with respect to the Business;
(viii) any power of attorney (other than powers of
attorney given in the ordinary course of the Business with
respect to routine export, tax or securities matters);
(ix) any bond, indenture, note, loan or credit
agreement (other than the Xxxxxx Credit Agreement and the
Xxxxxx DIP Agreement) or other Contract relating to the
borrowing of money or to the direct or indirect guarantee or
assumption of the obligations of any other Person for
borrowed money;
(x) any Contract limiting or restricting in any
material manner the operation of the Business;
(xi) any lease or similar Contract under which (i) any
Seller is the lessee of, or holds or uses, any machinery,
equipment, vehicle or other tangible personal property or
real property owned by any third Person for an annual rent
in excess of One Hundred Thousand Dollars ($100,000) or
(ii) any Seller is the lessor of, or makes available for use
by any third Person, any tangible personal property or real
property owned by any Seller for an annual rent in excess of
One Hundred Thousand Dollars ($100,000), in each case, other
than with respect to machinery, equipment, vehicles or other
tangible personal property specifically for use in
connection with a project;
(xii) except as set forth on Schedule 5.04,
employment and severance Contracts, including Contracts (i)
to employ or terminate executive officers or other personnel
and other contracts with present or former officers,
directors or shareholders of any Seller or (ii) that will or
could result in the payment by or the creation of any
commitment or obligation (absolute or contingent) to pay on
behalf of Buyer or any Seller any severance, termination,
"golden parachute," or other similar payments to any present
or former personnel following termination of employment or
otherwise as a result of the consummation of the
Transactions; and
(xiii) any joint venture or partnership Contracts.
(b) Sellers have made available to Buyer true, complete and
correct copies of any Contract (including purchase orders)
involving the obligation of any Seller to purchase products or
services pursuant to which the aggregate of payments to become
due from such Seller is equal to or exceeds One Hundred Thousand
Dollars ($100,000).
3.18. The Contracts. Except (a) as otherwise set forth
on Schedule 3.18, (b) as a result of Sellers' current financial
condition, or (c) for events of default that will arise or result
from the filing of the Bankruptcy Cases:
(i) the Contracts constitute lawful, valid and legally
binding obligations of the Sellers who are parties thereto
and are enforceable against such Sellers in accordance with
their terms;
(ii) each Contract is in full force and effect and
constitutes the entire agreement by and between the parties
thereto;
(iii) in all material respects, all obligations
required to be performed under the Contracts by the Sellers
who are parties thereto on or prior to the date hereof have
been performed, and no event has occurred or failed to occur
which constitutes, or with the giving of notice, the lapse
of time or both would constitute, a default by any Seller
under the Contracts;
(iv) except for Government Contracts, no Contract
prohibits or requires the consent of any Person to the
assignment to and assumption by Buyer of the Contracts;
(v) no Contract will prohibit competition or restrict
the ability of Buyer to engage in any lawful business after
Closing; and
(vi) the assignment of the Contracts to and assumption
of such Contracts by Buyer will not result in any penalty,
premium or variation of the rights, remedies, benefits or
obligations of any party thereunder.
3.19. Employees and Employee Relations.
(a) Sellers have made available to Buyer a complete list
(as of the date set forth therein) of names, positions, current
annual salaries or wage rates, and bonus and other compensation
arrangements of all full-time and part-time employees of each
Seller (indicating in such list whether each employee is part-
time or full-time, whether such employee is employed under
written Contract, and, if such employee is not actively at work,
the reason therefor).
(b) There is no pending or, to the Knowledge of Sellers,
threatened employee strike, work stoppage or slowdown or labor
dispute. Except as described on Schedule 3.19(b), no employees
of any Seller are represented by a labor union or employee
organization, and, to the Knowledge of Sellers, (i) no union or
employee organization has made a demand for recognition and (ii)
no other union organizing or collective bargaining activities by
or with respect to any employees of any Seller are taking place.
3.20. Employee Benefit Plans.
(a) Schedule 3.20(a) lists each Employee Benefit Plan and
Other Plan that any Seller or any member of the Controlled Group
that includes any Seller sponsors or maintains or has within the
last five years sponsored or maintained or to which it
contributes (including employee elective deferrals) or has within
the last five years contributed or been required to contribute.
(b) Each Employee Benefit Plan (and related trust,
insurance contract or fund if the Employee Benefit Plan is funded
through a trust or third party funding vehicle) complies in form
and in operation in all material respects with applicable Legal
Requirements, and has been administered and operated in all
material respects in accordance with all applicable Legal
Requirements. Except as set forth on Schedule 3.20(b), all
required reports and descriptions required to be filed with any
Governmental Authority (including Form 5500 Annual Reports,
Summary Annual Reports, PBGC-1's and Summary Plan Descriptions)
have been filed or distributed appropriately with respect to each
Employee Benefit Plan. Sellers have delivered or made available
to Buyer correct and complete copies of the plan documents and
summary plan descriptions, most recent determination letters
received from the Internal Revenue Service, most recent Form 5500
Annual Report, and all related trust agreements, insurance
contracts and other funding agreements which implement each
Employee Benefit Plan (and in the case of any Employee Benefit
Plan of any Foreign Seller, any comparable documents under the
applicable Legal Requirements of the appropriate Governmental
Authorities). Since January 1, 1995, no Employee Benefit Plan
has been audited by any Governmental Authority, no Seller has
received any written notice that such an audit will or may be
conducted and no event has occurred since the date of such
determination letter that would operate to jeopardize any
Employee Benefit Plan's qualification.
(c) Each Employee Pension Benefit Plan is in material
compliance with the requirements of a qualified plan under Code
Sec. 401(a), and each qualified plan has received a favorable
determination letter from the Internal Revenue Service that is
current and valid and no event has occurred since the date of
such determination letter that would operate to jeopardize such
Employee Pension Benefit Plan's qualification. All contributions
(including employer contributions and employee salary reduction
contributions) to each Employee Pension Benefit Plan that are
required to be paid have been paid, and all Sellers'
contributions in respect of periods ending the day prior to the
Closing Date will be accrued on the Closing Balance Sheet. The
market value of all assets under each Employee Pension Benefit
Plan and the present value of all vested and unvested liabilities
thereunder have been determined and, with respect to each such
Employee Pension Benefit Plan, as of such date of determination
the vested and unvested liabilities thereunder were determined in
accordance with PBGC immediate and deferred factors and
assumptions applicable to an Employee Pension Benefit Plan
terminating on the date for determination.
(d) All required premiums or other payments for all periods
due on or before the Closing Date have been or will have been
paid with respect to each Employee Welfare Benefit Plan.
(e) Except as set forth on Schedule 3.20(e), there have
been no Prohibited Transactions with respect to any Employee
Benefit Plan that would subject any Seller or any member of the
Controlled Group that includes any Seller to any material
liability; no Seller has incurred or reasonably expects to incur
material excise tax liability under Chapter 43 and Chapter 47
under Subtitle D of the Code; no ERISA Fiduciary has any material
liability for breach of fiduciary duty or any other failure to
act or comply in connection with the administration or investment
of the assets of any Employee Benefit Plan; no action, suit,
proceeding, hearing or investigation with respect to the
administration or the investment of the assets of any Employee
Benefit Plan (other than routine claims for benefits) is pending
or, to the Knowledge of Sellers, threatened; and to the Knowledge
of Sellers, there exists no basis for any such action, suit,
proceeding, hearing or investigation. No Party in Interest has
any interest in any assets of any Employee Benefit Pension Plan
other than as a beneficiary by virtue of such Person's
participation in such plan.
(f) Except as set forth on Schedule 3.20(f), no Employee
Benefit Plan which is an Employee Pension Benefit Plan has been
completely or partially terminated or the subject of a Reportable
Event and no proceeding by the PBGC to terminate any Employee
Pension Benefit Plan has been instituted or threatened; and no
Seller has incurred any material liability to the PBGC (other
than PBGC premium payments) or otherwise under Title IV of ERISA
(including any withdrawal liability) or under the Code with
respect to any Employee Pension Benefit Plan.
(g) Except as set forth on Schedule 3.20(g), no Seller, and
no member of the Controlled Group that includes any Seller,
contributes to, ever has contributed to, or ever has been
required to contribute to any Multiple Employer Plan or any
Multiemployer Plan or has any liability (including withdrawal
liability) under any Multiple Employer Plan or any Multiemployer
Plan. Except as set forth on Schedule 3.20(g), no Seller, and no
member of the Controlled Group that includes any Seller,
maintains or contributes, ever has maintained or contributed, or
ever has been required to maintain or contribute to any Employee
Welfare Benefit Plan providing medical, health or life insurance
or other welfare-type benefits for current or future retired or
terminated employees, their spouses or their dependents (other
than in accordance with Code Section 4980B).
(h) Each Seller has complied in all material respects with
the requirements of Code Sections 4980B, 9801, 9802, 9811 and
9812.
3.21. Litigation and Proceedings. Except as set forth
on Schedule 3.21, (i) there are no claims, actions, suits,
litigation, arbitration, mediations, investigations or other
proceedings (including qui tam actions) pending, affecting or to
the Knowledge of Sellers threatened against any Seller which
might have a Material Adverse Effect on the Business or the
Assets, and (ii) to the Knowledge of Sellers, there exist no
facts that might form the basis of any such claim, action, suit,
litigation, arbitration, mediation, investigation or other
proceeding.
3.22. Taxes.
(a) Sellers have filed all Tax Returns required to be filed
by or on behalf of any of them, all such Tax Returns are correct
and complete in all material respects, and Sellers have duly paid
or made provision in the Audited Financial Statements for the
payment of all Taxes; and as of Closing there will be no
Encumbrances on any Assets that arose in connection with any
failure (or alleged failure) to pay any Tax.
(b) Except as described on Schedule 3.22, each Seller has
withheld proper and accurate amounts from its employees'
compensation in full and complete compliance with all withholding
and similar provisions of the Code and any and all other
applicable Legal Requirements, and has withheld and paid, or
caused to be withheld and paid, all Taxes on monies paid by
Sellers to independent contractors, creditors and other Persons
for which withholding or payment is required by law.
(c) Except as set forth on Schedule 3.22, no taxing
authority has advised any Seller that it intends to assess any
additional Taxes for any period for which Tax Returns have been
filed. Except as set forth on Schedule 3.22, there is no dispute
or claim concerning any Tax liability of Sellers either claimed
or raised by any Governmental Authority in writing, or as to
which any Seller has notice or knowledge.
(d) Except as described on Schedule 3.22, no Seller has or
may have any liability for the Taxes of any Person other than
Sellers under Reg. 1.1502-6 (or any similar provision of state,
local, or foreign law), as a transferee or successor, by Contract
or otherwise.
3.23. Brokers and Finders. No Seller, nor any officer,
director, employee or agent thereof, has engaged any finder or
broker in connection with the Transaction, except that S&W has
engaged Lazard Freres & Co. LLC and Xxxxxxx Xxxxx & Co. to act as
S&W's independent financial advisors in connection with the
transactions contemplated by this Agreement.
3.24. Payments. No Seller has, directly or indirectly,
paid or delivered or agreed to pay or deliver any fee, commission
or other sum of money or item of property, however characterized,
to any Person which is in any manner related to the Assets or the
Business in violation of any Legal Requirement. No Seller, nor
any officer, director or employee of any Seller, has received or,
as a result of the consummation of the transaction contemplated
by this Agreement, will receive any rebate, kickback or other
improper or illegal payment from any Person with whom Sellers
conduct or have conducted business.
3.25. Operation of the Business. The Assets constitute
all assets, properties, goodwill and businesses necessary to
operate the Business in all material respects in the manner in
which they been operated prior to the Closing Date.
3.26. Customer List. Sellers have made available to
Buyer a true, complete and correct list of all customers of each
Seller since January 1, 1997 which generated revenues in excess
of One Million Dollars ($1,000,000) in any fiscal year during
such period.
3.27. Backlog. Sellers have made available to Buyer a
true, complete and correct list of all unfilled orders for
products or services as of April 30, 2000, setting forth the date
of such order and the current status.
3.28. Investment Experience and Intent; No Registration.
Each Holder is experienced in evaluating companies such as Buyer,
is able to fend for itself in transactions such as the
Transaction, has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and
risks of acquiring and holding the Common Stock comprising the
Share Consideration. Except as may be required in connection
with or pursuant to the Bankruptcy Cases, each Holder is
acquiring the Common Stock comprising the Share Consideration for
investment for its own account and not with the view to, or for
resale in connection with, any distribution thereof. Each Holder
understands that the Common Stock comprising the Share
Consideration has not been registered under the Securities Act by
reason of a specific exemption from the registration provisions
of the Securities Act that depends upon, among other things, the
bona fide nature of the investment intent as expressed herein.
Each Holder further represents that it does not have any
contract, undertaking, agreement or arrangement with any Person
to sell, transfer or grant participation to any third party with
respect to any of the Common Stock comprising the Share
Consideration. Each Holder understands and acknowledges that the
Common Stock comprising the Share Consideration will not be
registered under the Securities Act, unless and solely to the
extent so required pursuant to the terms and subject to the
conditions of the Registration Rights Agreement.
3.29. Accredited Investor Status. As of the Effective
Date, each Holder is an Accredited Investor.
3.30. Rule 144. Each Holder acknowledges that the
Common Stock comprising the Share Consideration must be held
indefinitely unless subsequently registered under the Securities
Act or an exemption from such registration is available. Each
Holder is aware of the provisions of Rule 144 promulgated under
the Securities Act that permit resale of shares purchased in a
private placement subject to the satisfaction of certain
conditions. Each Holder covenants that, in the absence of an
effective registration statement covering the Common Stock
comprising the Share Consideration, it will sell, transfer or
otherwise dispose of such Common Stock only in a manner
consistent with its obligations under the Registration Rights
Agreement or in compliance with applicable securities laws. In
connection therewith, each Holder acknowledges that Buyer will
make a notation on its stock books regarding the restrictions on
transfers set forth in this Section 3.30 and the Registration
Rights Agreement and will transfer securities on the books of
Buyer only to the extent not inconsistent herewith and therewith.
3.31. Government Contracting.
(a) (i) No Seller, nor any director, officer, employee,
agent or consultant of any Seller, is (or during the last five
years has been) under administrative, civil or criminal
investigation (including as a result of a qui tam or similar
action brought under the Civil False Claims Act or any similar
state or local law, rule or regulation), indictment or
information, audit or internal investigation with respect to any
alleged irregularity, misstatement or omission arising under or
relating to any Government Contract or Bid or is (or during the
last five years has been) in violation of any statutes or
regulations relative to prohibited practices, including the Civil
False Claims Act, prohibitions against "Buying In", the Anti-
Kickback Act, the Federal Election Campaign Act, the Truth-In-
Negotiations-Act, the Procurement Integrity Act, the Foreign
Corrupt Practices Act, International Trade in Arms Regulation,
Cost Accounting Standards, prohibitions against conflict of
interest and anti-trust laws or any governmental accounting
regulations; (ii) no Seller has made a voluntary disclosure to
any Governmental Authority with respect to any alleged
irregularity, misstatement or omission arising under or relating
to any Government Contract or Bid that has led or would
reasonably be expected to lead, either before or after the
Closing Date, to any of the consequences set forth in clause (i)
above or any other material damage, penalty assessment,
recoupment of payment or disallowances of cost.
(b) No Seller, nor any director, officer, employee, agent
or consultant of any Seller, is (or during the last five years
has been) suspended or debarred from doing business with any
Governmental Authority or has been declared nonresponsible or
ineligible for U.S. Government contracting. To the Knowledge of
Sellers, there exist no circumstances that would warrant the
institution of suspension or debarment proceedings or the finding
of nonresponsibility or ineligibility in the future on the part
of the Sellers or Buyer as the purchaser of the Assets, except as
may result from Sellers' current financial condition or the
filing of the Bankruptcy Cases.
(c) The Company and the Company Subsidiaries are in full
compliance with all Foreign Ownership and Control Interests
("FOCI") regulations and have received all appropriate approvals
within the last five years.
(d) Each Sellers' cost accounting and procurement systems
with respect to Government Contracts are in compliance in all
material respects with all applicable governmental regulations
and rules.
3.32. Accounts Receivable. Except as described on
Schedule 3.32, there is (a) no account debtor that has refused
(or to the Knowledge of Sellers, threatened to refuse) to pay its
obligations with respect to any Account Receivable for any
reason, (b) to Sellers' knowledge, no account debtor that is
insolvent or bankrupt, (c) no Account Receivable that was not
generated in the ordinary course of the Business, (d) no Account
Receivable that is not appropriately reserved and, as reserved,
is not good and collectible within 90 days from the Closing Date
and (e) with respect to unbilled Accounts Receivable, there
exists no fact that would prohibit or restrict the billing of any
such unbilled Accounts Receivable in the ordinary course of
business or, to the Knowledge of Sellers, would render such
unbilled Accounts Receivable uncollectable within 90 days from
the date of invoice.
3.33. Related Party Transactions. Except (i) for
compensation and benefits payable in the ordinary course of the
Business, (ii) for normal travel advances made in the ordinary
course of the Business consistent with past practice and (iii) as
set forth on Schedule 3.33, to the Knowledge of Sellers, no
director, officer, partner, employee, "affiliate" or "associate"
(as such terms are defined in Rule 12b-2 under the Exchange Act)
of any Seller (a) since January 1, 1997, has lent or borrowed any
monies to or from or has outstanding any indebtedness or other
similar obligations to any Seller, (b) owns any direct or
indirect interest of any kind (except with respect to the
ownership of not more than five percent (5%) of any class of
equity security in a publicly held company) in, or is a director,
officer, employee, partner, "affiliate" or "associate" of, or
consultant or lender to, or borrower from, or has the right to
participate in the management, operations or profits of, any
Person that is a competitor, supplier, customer, distributor,
lessor, tenant, creditor or debtor of any Seller, (c) is
otherwise a party to, or since January 1, 1997 has been a party
to, any Contract with any Seller involving payments equal to or
in excess of One Hundred Thousand Dollars ($100,000) per year or
(d) owns or has any rights in any assets, properties, licenses or
rights which are used or leased (or, since January 1, 1997, were
used or leased) by any Seller in the conduct of the Business.
4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Sellers as follows:
4.01. Organization. Buyer is a corporation duly
organized and validly existing in good standing under the laws of
the State of Louisiana.
4.02. Corporate Powers; Consents; Absence of Conflicts,
Etc. Buyer has the requisite power and authority to conduct its
business as now being conducted, to enter into this Agreement,
and to perform its obligations hereunder. The execution,
delivery and performance by Buyer of this Agreement and the
consummation of the Transaction by Buyer:
(a) are within Buyer's corporate powers and are not in
contravention of the terms of its Restated Articles of
Incorporation or Amended and Restated Bylaws, each as amended to
date, and have been approved by all requisite corporate and
shareholder action;
(b) except as otherwise expressly provided in this
Agreement or as set forth on Schedule 3.02(b), do not require any
approval or consent of, or filing with, any Governmental
Authority;
(c) do not conflict with, or result in any breach or
contravention of, any material agreement to which Buyer is a
party or by which it is bound; and
(d) do not violate any Legal Requirement to which Buyer may
be subject.
4.03. Binding Agreement. This Agreement and all
instruments and agreements hereunder to which Buyer is or becomes
a party are (or upon execution will be) valid and legally binding
obligations of Buyer enforceable against Buyer in accordance with
the respective terms hereof and thereof, except as enforceability
against Buyer may be restricted, limited or delayed by applicable
bankruptcy or other laws affecting creditors' rights generally
and except as enforceability may be subject to general principles
of equity.
4.04. Issuance of Share Consideration. The issuance of
the shares of Common Stock comprising the Share Consideration has
been duly and validly authorized by all requisite corporate and
shareholder action, and, when issued in accordance with the terms
and conditions of this Agreement, will be duly authorized,
validly issued, fully paid, and non-assessable.
4.05. Brokers and Finders. Neither Buyer, nor any
Affiliate of Buyer, nor any officer, director, employee or agent
thereof, has engaged any finder or broker in connection with the
Transaction, except that Buyer has engaged Xxxxxxxxx & Company,
Inc. and Xxxxxx Xxxxxx & Company, Inc. to act as Buyer's
independent financial advisors in connection with the
Transaction.
4.06. Payments. Neither Buyer, nor any Affiliate of
Buyer, nor any officer, director, employee or agent thereof, has,
directly or indirectly, paid or delivered, offered to pay or
deliver, or agreed to pay or deliver any fee, commission or other
sum of money or item of property, however characterized, to any
person which is now or was previously an affiliate or insider (as
those terms are defined in the Bankruptcy Code) of any Seller.
4.07. SEC Documents and Other Reports. Buyer has filed
all required documents with the SEC since January 1, 1997 (the
"Buyer SEC Documents"). As of their respective dates, the Buyer
SEC Documents complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as the
case may be, and, at the respective times they were filed, none
of the Buyer SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading. The consolidated financial statements (including, in
each case, any notes thereto) of Buyer included in the Buyer SEC
Documents complied as to form in all material respects with
applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, were prepared in
accordance with GAAP (except, in the case of the unaudited
statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be
indicated therein or in the notes thereto) and fairly present in
accordance with GAAP the consolidated financial position of Buyer
and its consolidated Subsidiaries as at the respective dates
thereof and the consolidated results of their operations and
their consolidated cash flows for the periods then ended
(subject, in the case of unaudited statements, to any other
adjustments described therein and normal year-end audit
adjustments). Except as disclosed in the Buyer SEC Documents
filed prior to the Effective Date or as required by GAAP, Buyer
has not, since January 31, 2000, made any change in the
accounting practices or policies applied in the preparation of
financial statements. The books and records of Buyer and its
Subsidiaries have been, and are being, maintained in all material
respects in accordance with GAAP and other applicable legal and
accounting requirements.
4.08. Actions and Proceedings. Except as set forth in
the Buyer SEC Documents filed prior to the Effective Date or on
Schedule 4.08, (a) there are no outstanding orders, judgments,
injunctions, awards or decrees of any Governmental Authority
against or involving Buyer or any of its Subsidiaries, or
involving any of its or their properties, assets or business,
that would have a Buyer Material Adverse Effect and (b) as of the
Effective Date, there are no actions, suits or claims or legal,
administrative or arbitrative proceedings or investigations
pending or, to the Knowledge of Buyer, threatened against or
involving Buyer or any of its Subsidiaries, or involving any of
its or their properties, assets or business that, individually or
in the aggregate, would have a Buyer Material Adverse Effect.
4.09. Capital Structure. The authorized stock of Buyer
consists of 50,000,000 shares of Common Stock and 5,000,000
shares of Preferred Stock. At the close of business on
February 29, 2000, (a) 15,298,921 shares of Common Stock were
issued and outstanding, all of which were validly issued, fully
paid and nonassessable and free of preemptive rights; (b)
8,224,236 shares of Common Stock were held in the treasury of
Buyer or by the Subsidiaries of Buyer; (c) 1,152,375 shares of
Common Stock were reserved for future issuance pursuant to stock
option or stock purchase plans; and (d) no shares of Buyer
Preferred Stock were issued or outstanding. Except as disclosed
in Buyer SEC Documents filed prior to the date hereof, there are
no outstanding contractual obligations of Buyer or any of Buyer's
Subsidiaries (i) restricting the transfer of, (ii) affecting the
voting rights of, (iii) requiring the registration for sale of,
or (iv) granting any preemptive or antidilutive rights with
respect to, any shares of Common Stock.
4.10. Absence of Certain Changes or Events. Except as
disclosed in Buyer SEC Documents filed prior to the date hereof,
since February 29, 2000, none of Buyer or any of its Subsidiaries
has incurred any material liability or obligations (direct,
indirect or contingent), or entered into any material oral or
written agreement or other transaction, that is not in the
ordinary course of business or that would result in a Buyer
Material Adverse Effect, except for any changes or effects
resulting from this Agreement, the Transaction or the
announcement thereof.
5. COVENANTS AND AGREEMENTS OF THE PARTIES
5.01. Bankruptcy Cases and Sale Motion; Entry of Sale
Order; Additional Sellers. Sellers shall pursue the Bankruptcy
Cases, the Sale Motion and such other motions as are necessary to
implement the Transaction. Sellers shall request a prompt
hearing relative to, and shall use their respective best efforts
to obtain, entry of the Sale Order. From and after the Effective
Date, to the extent that any direct or indirect Subsidiary or
Affiliate of any Seller acquires, owns or holds any portion of
the Assets or conducts any portion of the Business and initially
is not a Party hereto, Sellers shall cause each such direct or
indirect Subsidiary or Affiliate to become a Party as an
additional Seller. In addition, Sellers shall, and shall cause
each such Subsidiary or Affiliate to, execute and deliver such
further documents and instruments and take such further actions
as may be necessary to file a Bankruptcy Case for each Subsidiary
and Affiliate of S&W as, in the reasonable judgment of Sellers
after consultation with Buyer, are necessary to consummate the
Transaction.
5.02. Operations. From the Effective Date until the
Closing Date, except as otherwise expressly provided in this
Agreement (including Section 5.03) and subject to the obligations
of Sellers to comply with any applicable order of the Bankruptcy
Court and the provisions of the Bankruptcy Code and taking into
account Sellers' current financial condition and the Bankruptcy
Cases, Sellers will:
(a) perform when due all Legal Requirements and obligations
under Contracts (including the Assumed Contracts) relating to or
affecting the Assets or the Business;
(b) carry on the Business in substantially the same manner
as they have heretofore;
(c) maintain the Assets in good working order and
condition, ordinary wear and tear excepted;
(d) take all actions necessary and appropriate to deliver
to Buyer title to the Assets free and clear of all Encumbrances
(except for the Real Property Encumbrances) and to obtain
appropriate releases, consents, estoppels, certificates, opinions
and other instruments as Buyer may reasonably request;
(e) keep in full force and effect present insurance
policies or other comparable insurance benefiting the Assets and
the conduct of the Business;
(f) maintain and preserve their business organizations and
operations substantially intact; use their respective
commercially reasonable efforts to retain the present employees
at the Business (subject to the right of Sellers, after
consultation with Buyer, to discharge any employee in the
ordinary course of the Business); maintain their relationships
with contractors, subcontractors, suppliers, customers and other
Persons doing business with Sellers; and take such actions as are
reasonably necessary and achievable to cause the smooth,
efficient and successful transition to Buyer of the Business at
Closing;
(g) permit and allow reasonable access by Buyer to discuss
and make offers of post-Closing employment with any of Sellers'
personnel, to advertise for post-Closing employment at the
Business, and to establish relationships with contractors,
subcontractors, suppliers and other Persons having business
relations with Sellers; and
(h) use their respective best efforts to accomplish the
sale of the Cold Storage Business and the Prescient Business
pursuant to any Contracts for such sale entered into and to be
performed prior to the Closing Date.
5.03. Certain Actions. From the Effective Date until
the Closing Date, except as otherwise expressly provided in this
Agreement or as set forth on Schedule 5.03, Sellers shall not
take any of the following actions without first obtaining the
consent of Buyer:
(a) amend or terminate any Assumed Contract other than an
Immaterial Contract, or enter into any Contract involving a
commitment on the part of any Seller in excess of One Hundred
Thousand Dollars ($100,000);
(b) make offers to any employees of the Business for
employment with any Person after Closing or make any material
change in personnel, operations, finances, accounting policies,
or real or personal property of the Business;
(c) increase compensation payable or to become payable to,
make a bonus or severance payment to, or otherwise enter into one
or more bonus or severance agreements with, any employee or agent
of any Seller;
(d) create, assume or permit to exist any new Encumbrance
upon any of the Assets, except for Encumbrances providing
adequate protection as is required by the Bankruptcy Court;
(e) sell, assign, transfer, distribute or otherwise dispose
of any property, plant or equipment of any Seller having an
original cost in excess of Fifty Thousand Dollars ($50,000);
(f) take any action outside the ordinary course of the
Business;
(g) amend or agree to amend the articles or certificate of
incorporation or other organizational documents or the bylaws or
other governing documents of any Seller or otherwise take any
action relating to any liquidation or dissolution of any Seller;
(h) create, incur, assume, guarantee or otherwise become
liable for any liability of any Seller, or agree to do any of the
foregoing;
(i) cancel, forgive, release, discharge or waive any
receivable or any similar Asset or right with respect to the
Business, or agree to do any of the foregoing;
(j) change any accounting method, policy or practice in the
Financial Statements; or
(k) terminate, amend or otherwise modify any Employee
Benefit Plan or Other Plan, except for amendments required to
comply with applicable Legal Requirements or as requested by
Buyer.
5.04. Employee Matters.
(a) Subject to the exclusions set forth in this
Section 5.04, Buyer may communicate (after consulting with
management of S&W) with any employees of any Seller and may
offer, or cause its Affiliates to offer, to employ as of the
Closing Date all active employees of Sellers working at the
Business on the Closing Date to whom Buyer, in its sole
discretion, may choose to make offers of employment, all in the
manner and upon terms and conditions of employment which are
generally comparable to similarly situated employees of Buyer.
It is the intent of Buyer to make offers of employment to
substantially all of Sellers' operating employees. Employees
employed under Employee Agreements in place as of March 31, 2000
or authorized as set forth on Schedule 5.04 (the "Employee
Agreements") will not be offered employment pursuant to this
Section 5.04, but such Employee Agreements shall become Assumed
Contracts whether or not the employees employed thereunder become
employed by Buyer or any of its Affiliates and employment of any
employees employed thereunder by Buyer or any of its Affiliates
shall be governed by the terms of the Assumed Contracts relating
to such employees. Buyer shall give all Hired Employees credit
for their vacation and holiday accumulations to the extent the
same constitute Assumed Liabilities. Sellers acknowledge that
all employment offers are subject to the satisfactory completion
by Buyer of its customary employee background checks. Nothing
contained in this Section 5.04 or elsewhere in this Agreement
shall be deemed to limit or otherwise affect in any manner the
right of Buyer or any Affiliate of Buyer to terminate at will the
employment of any Hired Employee (except as otherwise provided in
Assumed Contracts with such employees). Sellers shall be
responsible for and pay any and all liabilities or obligations
arising under the WARN Act, if any, arising out of or resulting
from layoffs of employees prior to Closing and/or the
consummation of the Transaction, and Sellers shall remain liable
for any and all costs and expenses associated with continued
employment, or termination and severance, of all employees of
Sellers other than the Hired Employees and employees with respect
to whom Buyer shall assume any liabilities under the Employee
Agreements, including any obligation imposed on Sellers or Buyer
to provide such employees with continued health, disability, life
or other retirement benefits (whether covered by insurance or
not). Buyer shall not, at any time prior to 90 days after the
Closing Date, without complying fully with the notice and other
requirements of the WARN Act, effectuate (i) a "plant closing" as
defined in the WARN Act affecting any site of employment or one
or more facilities or operating units within any site of
employment of the Business; or (ii) a "mass layoff" as defined in
the WARN Act affecting any site of employment of the Business; or
any similar action under applicable state or foreign law
requiring notice to employees in the event of a plant closing or
layoff. In addition, Buyer hereby agrees to indemnify and hold
Sellers harmless from and against any and all claims, losses,
damages, expenses, obligations and liabilities (including costs
of collection, attorney's fees and other costs of defense) which
Sellers may incur in connection with any suit or claim of
violation brought against Sellers under the WARN Act or any
similar state or foreign law, which relates to actions taken by
Buyer after the Closing Date with regard to any site of
employment or one or more facilities or operating units within
any site of employment of the Business.
(b) Buyer shall as of the Closing Date assume the
sponsorship of the Retirement Plans (but not any other Employee
Benefit Plan listed on Schedule 3.20(a)), and in connection
therewith shall assume all responsibility for the administration
of such plans and their assets and liabilities. Buyer shall be
responsible for all contributions to the Retirement Plans (but
not any other Employee Benefit Plan listed on Schedule 3.20(a)),
due after the Closing Date. Buyer shall arrange effective as of
the Closing Date to enter into appropriate agreements or modify
existing agreements with trustees and other vendors providing
services to the Retirement Plans.
(c) Buyer and Sellers agree to negotiate in good faith with
respect to certain additional terms of employment for Hired
Employees relating to eligibility and participation (including
recognition of S&W service) in the Employee Benefit Plans of
Buyer and the disposition of benefits under the Employee Benefit
Plans of Sellers.
5.05. Access to and Provision of Additional Information.
(a) From the Effective Date until the Closing Date, Sellers
shall cooperate fully with Buyer and Buyer's representatives in
connection with Buyer's due diligence investigation of the
prospects, business, assets, Contracts, rights, liabilities and
obligations of Sellers and the Business, and shall provide to
Buyer and Buyer's representatives full and complete access to and
the right to inspect the Business, any facilities associated with
or used in the Business, the Assets, and books and records of
Sellers relating to Sellers, the Assets and the Business, and
will furnish to Buyer all material information concerning
Sellers, the Assets and the Business not otherwise disclosed
pursuant to this Agreement, all pleadings and other documents or
schedules filed with the Bankruptcy Court, access to Sellers'
files and other records regarding claims, actions, suits,
litigation, arbitration, mediations, investigations and other
proceedings pending against or otherwise affecting any Seller,
the Assets or the Business, and such additional financial,
operating and other data and information regarding the Business
as Buyer may from time to time reasonably request, without regard
to where such information may be located. In addition, each
Seller shall use its respective best efforts to cause its agents,
representatives, employees, officers, directors, vendors,
suppliers, and customers to cooperate with Buyer and Buyer's
representatives in connection with Buyer's due diligence review
as it relates to any Contracts between any such vendors,
suppliers, and customers and any Seller.
(b) From the Effective Date until the Closing Date, Sellers
shall cause their respective officers and employees to confer on
a regular and frequent basis with one or more representatives of
Buyer and to answer Buyer's questions regarding matters relating
to the conduct of the Business and the status of the Transaction.
Sellers shall notify Buyer in writing of any material changes in
the operations, financial condition or prospects of the Business
and of any complaints, investigations, hearings or adjudicatory
proceedings (or communications indicating that the same may be
contemplated) of any Person and shall keep Buyer reasonably
informed of such matters.
(c) The exercise by Buyer of any right of access granted
herein shall not materially interfere with the business
operations of Sellers.
(d) Except as provided in Article 8, each Party shall be
responsible for its own costs and expenses incurred pursuant to
this Section 5.05.
5.06. Post-Closing Maintenance of and Access to
Information.
(a) The parties acknowledge that after Closing each party
may need access to information or documents in the control or
possession of another party for the purposes of concluding the
transactions herein contemplated, Tax Returns or audits, the
Assumed Contracts and other Legal Requirements, and the
prosecution or defense of third party claims. Accordingly, each
party shall keep, preserve and maintain in the ordinary course of
business, and as required by Legal Requirements and relevant
insurance carriers, all books, records, documents and other
information in the possession or control of such party and
relevant to the foregoing purposes at least until the expiration
of any applicable statute of limitations or extensions thereof.
(b) Each party shall cooperate fully in connection with,
and make available for inspection and copying by, the other
party, its employees, agents, counsel and accountants and/or
Governmental Authorities, upon written request and at the expense
of the requesting party, such books, records documents and other
information to the extent reasonably necessary to facilitate the
foregoing purposes. In addition, each party shall cooperate
with, and shall permit and use its best efforts to cause, at the
expense of the requesting party, its respective former and
present directors, officers and employees to cooperate with, the
other party on and after Closing in furnishing information,
evidence, testimony and other assistance in connection with any
action, proceeding, arrangement or dispute of any nature with
respect to the subject matters of this Agreement and pertaining
to periods prior to the Closing Date.
(c) Sellers shall be entitled to remove from the Business,
at Sellers' sole risk and expense, any records that relate to
events or periods prior to Closing for purposes of pending
litigation involving matters to which such records refer, as
certified in writing prior to removal by counsel retained by
Sellers in connection with such litigation. Any records so
removed shall be promptly returned to Buyer following their use
by Sellers.
(d) The exercise by either party of any right of access
granted herein shall not materially interfere with the business
operations of the other party.
5.07. Governmental Authority Approvals: Consents to
Assignment.
(a) From the Effective Date until the Closing Date, each
Seller and Buyer shall (i) promptly apply for and use its
respective commercially reasonable efforts to obtain prior to
Closing all consents, approvals, authorizations and clearances of
Governmental Authorities required of it to consummate the
transactions contemplated hereby, (ii) provide such information
and communications to Governmental Authorities as the other party
or such Persons may reasonably request, and (iii) assist and
cooperate with other parties to obtain all Permits and clearances
of Governmental Authorities that the other parties reasonably
deem necessary or appropriate, and to prepare any document or
other information reasonably required of it by any such Persons
to consummate the transactions contemplated herein; provided,
however, that, notwithstanding the foregoing, no party shall have
any obligation under such provisions (x) to pay any cash amounts
to Governmental Authorities other than filing fees, or (y) to
agree to divest assets or limit the operations of its businesses.
(b) From the Effective Date until the Closing Date, each of
the parties shall file, if and to the extent required by law, all
reports or other documents required or requested by Governmental
Authorities under the HSR Act concerning the purchase and sale of
the Assets and comply promptly with any requests by the
Governmental Authorities for additional information concerning
the purchase and sale of the Assets, so that the waiting period
specified in the HSR Act with respect to those Assets will expire
as soon as reasonably possible after the Effective Date. Each of
the parties shall furnish to the other parties such information
as the other parties reasonably require to perform their
obligations under the HSR Act and shall exchange drafts of the
relevant portions of each other's report forms prior to filing.
(c) Sellers shall (i) obtain Bankruptcy Court approval of
the assumption by and assignment to Buyer of the Assumed
Contracts and (ii) obtain all other consents, approvals and
novations required to assign the Assumed Contracts to Buyer.
(d) In the event that any and all novations, transfer or
other agreements, consents, approvals or waivers necessary for
the assignments, transfer or novation of any Assumed Contracts,
or any claim, right or benefit arising thereunder or resulting
therefrom, shall not have been obtained prior to the Closing
Date, then as of the Closing, this Agreement, to the extent
permitted by law, shall constitute full and equitable assignment
by Sellers to Buyer of all of Sellers' right, title and interest
in and to, and all of Sellers' obligations and liabilities under,
such Assumed Contracts, and Buyer shall be deemed Sellers' agent
for the purpose of completing, fulfilling and discharging all of
Sellers' liabilities under any such Assumed Contracts. The
Parties shall take all necessary steps and actions to provide
Buyer with the benefits of such Assumed Contracts, and to relieve
Sellers of the performance and other obligations thereunder,
including entry into subcontracts for the performance thereof.
Buyer agrees to pay, perform and discharge, and indemnify Sellers
against and hold Sellers harmless from, all obligations and
liabilities of Sellers relating to such performance or failure to
perform under such Assumed Contracts after the Closing Date, in
accordance with the provisions of Article 9 of this Agreement.
(e) In the event Sellers shall be unable to make the
equitable assignment described in Section 5.07(d), or if such
attempted assignment would give rise to any right of termination,
or would otherwise adversely affect the rights of Sellers or
Buyer under such Assumed Contracts, or would not assign all
Sellers' rights thereunder at the Closing, Sellers and Buyer
shall continue to cooperate and use all reasonable efforts to
provide Buyer with all such rights. To the extent that any such
consents and waivers are not obtained, or until the impediments
to such assignment are resolved, Sellers shall use all reasonable
efforts (without the expenditure, in the aggregate, of any
material sum) to (i) provide to Buyer, at the request of Buyer,
the benefits of any such Assumed Contract to the extent related
to the Business or the Assets, (ii) cooperate in any lawful
arrangement designed to provide such benefits to Buyer and
(iii) enforce, at the request of and for the account of Buyer,
any rights of Sellers arising from any such Assumed Contracts
against any third Person (including any Governmental Authority)
including the right to elect to terminate in accordance with the
terms thereof upon the advice of Buyer. To the extent that Buyer
is provided the benefits of any Assumed Contract referred to
herein (whether from Sellers or otherwise), Buyer shall perform
at the reasonable direction of Sellers and for the benefit of any
third Person (including any Governmental Authority) the
obligations of Sellers thereunder or in connection therewith, and
Buyer agrees to pay, perform and discharge, and indemnify Sellers
against and hold Sellers harmless from, all obligations and
liabilities of Sellers relating to such performance or failure to
perform, after the Closing Date, in accordance with the
provisions of Article 9 of this Agreement.
5.08. Noncompetition.
(a) For a period of five years from and after the Closing
Date, except and solely to the extent as is required to perform
any Rejected Contracts assumed pursuant to Section 5.16(b) or
Completed Contracts, no Seller shall, directly or indirectly, in
any capacity:
(i) own, lease, manage, operate, control, participate
in the management or control of, be employed by, or maintain
or continue any interest whatsoever in any enterprise
engaged in any business competitive with the Business; or
(ii) employ or solicit the employment of any Hired
Employee unless (x) such employee resigns voluntarily
(without any solicitation from Sellers), (y) Buyer consents
in writing to such employment or solicitation, or (z) such
employee is terminated by Buyer after the Closing Date; or
(iii) induce, cause or attempt to induce or cause
any Person to replace or terminate any Contract relating to
the Business with products or services of any other Person
at any time after the Closing Date.
(b) Each Seller acknowledges and agrees that any remedy at
law for any breach of this Section 5.08 would be inadequate and
consents to the granting by any court of an injunction or other
equitable relief, without the necessity of actual monetary loss
being proved, in order that a breach or threatened breach of this
Section may be effectively enjoined.
5.09. Use of Names. From and after Closing, Sellers
shall not use any of the names acquired pursuant to this
Agreement or any variation of the foregoing in the conduct of any
of their businesses, except as is required in or in connection
with the Bankruptcy Cases and except and solely to the extent as
is required to perform any Rejected Contracts assumed pursuant to
Section 5.16(b) or Contracts subject to Section 5.07(d) and
Section 5.07(e).
5.10. Allocation of Equity Purchase Price for Tax
Purposes. Sellers and Buyer agree that, for tax purposes, the
Equity Purchase Price shall be allocated among the Assets as
Buyer may determine, in accordance with their fair market values
consistent with Section 1060 of the Code, and such allocation
shall be binding upon the parties for all applicable federal,
state, local and foreign Tax purposes. Sellers and Buyer
covenant to report gain or loss or cost basis, as the case may
be, in a manner consistent with such allocation on all Tax
Returns filed by any of them after Closing and not to voluntarily
take any inconsistent position therewith in any administrative or
judicial proceeding relating to such returns. Sellers and Buyer
shall exchange mutually acceptable and completed IRS Forms 8594
(including supplemental forms, if required), which they shall use
to report the transaction contemplated hereunder to the Internal
Revenue Service in accordance with such allocation.
Notwithstanding anything to the contrary, no allocation hereunder
shall supersede or otherwise usurp the jurisdiction of the
Bankruptcy Court to value the assets for purposes of distribution
to the respective Sellers' estates under the Bankruptcy Code.
5.11. Further Acts and Assurances. At any time and from
time to time at and after the Closing, upon request of Buyer,
each Seller shall do, execute, acknowledge and deliver, or cause
to be done, executed, acknowledged and delivered, such further
acts, deeds, assignments, transfers, conveyances, powers of
attorney, confirmations and assurances as Buyer may reasonably
request to more effectively convey, assign and transfer to and
vest in Buyer, its successors and assigns, full legal right,
title and interest in and actual possession of the Assets and the
Business, to confirm such Seller's capacity and ability to
perform its pre-Closing and post-Closing covenants and agreements
under this Agreement, and to generally carry out the purposes and
intent of this Agreement. Each Seller shall also furnish Buyer
with such information and documents in its possession or under
its control, or which such Seller can execute or cause to be
executed, as will enable Buyer to prosecute any and all
petitions, applications, claims and demands relating to or
constituting a part of the Assets and the Business.
5.12. Costs and Expenses.
(a) Except as otherwise expressly set forth in this
Agreement, all expenses of the negotiation and preparation of
this Agreement and related to the Transaction, including legal
counsel, accounting, brokerage and investment advisor fees and
disbursements, shall be borne by the respective Party incurring
such expense, whether or not the Transaction is consummated.
Sellers shall be responsible for paying any allowed fees and
expenses of Lazard Freres & Co. LLC and Xxxxxxx Xxxxx & Co. in
connection with the transactions contemplated by this Agreement.
(b) Buyer shall pay the cost of Buyer's owner's title
insurance policies described in Section 7.05, and Sellers shall
pay the cost of removing Encumbrances that are not Permitted Real
Property Encumbrances. Buyer shall pay the cost of Buyer's land
title surveys of the Real Property, and environmental,
engineering and other professional studies undertaken by Buyer.
(c) In the event any Party elects to incur legal fees or
expenses to enforce or interpret any provision of this Agreement
and subject to any required approvals of the Bankruptcy Court,
the prevailing Party will be entitled to recover such legal fees
and expenses, including attorneys' fees, costs and necessary
disbursements, in addition to any other relief to which such
Party shall be entitled.
5.13. Insurance Ratings. From the Effective Date until
the Closing Date, Sellers will take all actions reasonably
requested by Buyer to enable Buyer to succeed to the Workers'
Compensation and Unemployment Insurance ratings, insurance
policies, deposits and other interests of Sellers and the
Business for insurance or other purposes. Buyer shall not be
obligated to succeed to any such rating, insurance policy,
deposit or other interest, except as it may elect to do so.
5.14. Fulfillment of Conditions. Each party will
execute and deliver at Closing each agreement, instrument or
other document that such party is required by this Agreement to
execute and deliver as a condition to Closing, and will take all
commercially reasonable steps necessary or desirable and proceed
diligently and in good faith to satisfy each other condition to
the obligations of the parties contained in this Agreement, to
the extent that satisfaction of such condition is within the
control of such party.
5.15. Release of Encumbrances. Except as set forth in
this Agreement or in the Sale Order, Sellers shall cause all
Encumbrances other than the Permitted Real Property Encumbrances
to be released and discharged at or prior to Closing, which
Encumbrances, as to Sellers that have filed Bankruptcy Cases, may
be released and discharged by the Bankruptcy Court in the Sale
Order.
5.16. Assumed and Assigned Contracts; Rejected
Contracts.
(a) Assumed Contracts. Subject to the approval of the
Bankruptcy Court and pursuant to the Executory Contract
Assumption and Assignment Order, the Assumed Contracts, including
the Employee Agreements, will be assumed by Sellers and assigned
to Buyer or Buyer's designee on the Closing Date under Section
365 of the Bankruptcy Code. Sellers shall, consistent with their
current financial condition and the Bankruptcy Cases, use their
respective best efforts to promptly comply with and perform any
obligations under the Assumed Contracts arising from and after
the Effective Date and through the Closing Date. In the Sale
Motion, or in such additional or subsequent motions as may be
appropriate, Sellers will seek authority to assume and assign the
Assumed Contracts to Buyer (or Buyer's designee) in accordance
with Section 365 of the Bankruptcy Code. All Assumed Contracts
shall be assigned to and assumed by Buyer (or Buyer's designee)
at Closing. Subject to the following right of Sellers to reject
any Contract, the final determination of which Contracts Sellers
will assume and assign to Buyer shall be within the sole
discretion of Buyer.
(b) Rejected Contracts. Schedule 5.16(b) contains the
schedule of Rejected Contracts. Subsequent to the Court's
approval of this Agreement and prior to Closing, Sellers shall
consult with Buyer about any Contract Sellers seek to reject and
consider in good faith Buyer's opinions on any such rejection, in
recognition of Buyer's bona fide interest in preserving to the
maximum extent possible the Contracts which Buyer believes are
reasonably necessary to the continued operation and financial
viability of the Business after Closing, but Sellers shall have
the right in their discretion to reject any Contract which in
their judgment Sellers believe must be rejected to maintain the
viability of the Business prior to the Closing Date or to comply
with any order of the Bankruptcy Court. In addition, subject to
the approval of the Bankruptcy Court and after receipt of Buyer's
prior written consent (which shall not be unreasonably withheld),
Sellers may assume any Rejected Contract if the total cost of
completing such Rejected Contract would be materially less costly
than the reasonably anticipated damages that would be payable by
Sellers in connection with a claim for material breach of such
Rejected Contract. In the event that Sellers should assume any
such Rejected Contract, Buyer shall xxxxx Xxxxxxx a non-
exclusive, royalty-free license to use or exploit those items
constituting Intellectual Properties as may be reasonably
necessary to perform such Rejected Contract assumed by Sellers
pursuant to this Section 5.16(b) and the Completed Contracts.
5.17. Bankruptcy Court Approval.
(a) Sellers shall use their respective best efforts to
obtain the Sale Order which, among other things, (i) determines
that this Agreement was proposed by Buyer in good faith and
represents the highest and best offer for the Assets and should
be approved, (ii) determines that Buyer is a good faith purchaser
under Section 363(m) of the Bankruptcy Code and that the
provisions of Section 363(n) of the Bankruptcy Code have not been
violated, (iii) authorizes and directs Sellers to assume this
Agreement and sell the Assets to Buyer pursuant to this Agreement
and Sections 363 and 365 of the Bankruptcy Code, free and clear
of all liens, claims, interests, liabilities and Encumbrances
(including any and all "interests" in the Assets within the
meaning of Section 363(f) of the Bankruptcy Code), other than the
Assumed Liabilities and the Permitted Real Property Encumbrances,
such that Buyer shall not incur any liability as a successor to
the Business, (iv) authorizes and directs Sellers to execute,
deliver, perform under, consummate and implement, this Agreement,
together with all additional instruments and documents, including
the Indemnity Escrow Agreement, that may be reasonably necessary
or desirable to implement the foregoing; (v) authorizes claims
and recourse by Buyer against the Indemnity Deposit for any
reason set forth in Section 9.01, including breach of any
representation and warranty of S&W in this Agreement, regardless
of whether such breach relates to Assets owned or leased by S&W
or any other Seller (regardless of whether such other Seller is a
debtor in the Bankruptcy Cases), (vi) authorizes claims and
recourse by Buyer against the LC Deposit as provided in the
Indemnity Escrow Agreement and (vii) determines that Buyer is not
a successor to Sellers or otherwise liable for any Excluded
Liability and permanently enjoins each and every holder of an
Excluded Liability from commencing, continuing or otherwise
pursuing or enforcing any remedy, claim or cause of action
against Buyer relative to such Excluded Liability.
(b) Sellers shall obtain the Executory Contract Assumption
and Assignment Order.
(c) Sellers shall promptly make any filings, take all
actions, and use their respective best efforts to obtain any and
all other approvals and orders necessary or appropriate for
consummation of the Transaction, subject to their obligations to
comply with any order of the Bankruptcy Court.
(d) In the event an appeal is taken, or a stay pending
appeal is requested, from the Sale Order or the Executory
Contract Assumption and Assignment Order, Sellers shall
immediately notify Buyer of such appeal or stay request and shall
provide to Buyer within one business day a copy of the related
notice of appeal or order of stay. Sellers shall also provide
Buyer with written notice of any motion or application filed in
connection with any appeal from either of such orders.
(e) Buyer shall cooperate in providing such information and
evidence as is necessary to obtain the orders described in this
Section 5.17.
5.18. Transfer Taxes. In accordance with Section
1146(c) of the Bankruptcy Code, the making or delivery of any
instrument of transfer, including the filing of any deed or other
document of transfer to evidence, effectuate or perfect the
rights, transfers and interest contemplated by this Agreement,
shall be in contemplation of a plan or plans of reorganization to
be confirmed in the Bankruptcy Cases, and as such shall be free
and clear of any and all transfer Tax, stamp Tax or similar
Taxes. The instruments transferring the Assets to Buyer shall
contain the following endorsement:
"Because this [instrument] has been authorized pursuant to
Order of the United States Bankruptcy Court for the District
of Delaware, in contemplation of a plan of reorganization of
the Grantor, it is exempt from transfer taxes, stamp taxes
or similar taxes pursuant to 11 U.S.C. 1146(c)."
In the event real estate transfer Taxes are required to be paid
in order to record the deeds to be delivered to Buyer in
accordance herewith, or in the event any such Taxes are assessed
at any time thereafter, such real estate transfer Taxes incurred
as a result of the transactions contemplated hereby shall be paid
by Buyer. In the event sales, use or other transfer Taxes are
assessed at Closing or at any time thereafter on the transfer of
any other Assets, such Taxes incurred as a result of the
transactions contemplated hereby shall be paid by Sellers.
5.19. Listing Application. Within 30 days following the
Closing, Buyer shall make an application to list the shares of
Common Stock comprising the Share Consideration on the New York
Stock Exchange and shall execute and deliver such further
documents or instruments and take such further actions necessary
to consummate such listing expeditiously.
5.20. Bankruptcy Filings. From and after the Effective
Date until the Closing Date, Sellers shall deliver to Buyer (a)
copies of all pleadings, motions, notices, statements, schedules,
applications, reports and other papers that Sellers file in the
Bankruptcy Cases within a reasonable time after filing, but with
respect to any such papers that relate, in whole or in part, to
this Agreement, the Transaction, or Buyer, its constituent
members or its or their agents or representatives, Sellers shall
use all their respective reasonable efforts to provide such prior
notice as may be reasonable under the circumstances before the
filing of such papers and (b) copies of all pleadings, motions,
notices, statements, schedules, applications, reports and other
papers filed in the Bankruptcy Cases.
5.21. Non-Solicitation. From and after the Effective
Date, neither Sellers nor any of their respective directors,
employees, accountants, attorneys, or other agents or
representatives shall directly or indirectly solicit or enter
into discussions regarding, or respond to any inquiries or
proposals for, a Competing Proposal.
5.22. Tail Insurance. On or prior to the Closing
(unless waived by Buyer), Sellers shall purchase and obtain a
three-year extended claims reporting provision for all primary
and excess insurance policies in force as of the Effective Date
which cover any Seller and each employee of any Seller (or for
which Seller otherwise has an obligation to provide such
insurance) and which are written on a claims made insuring
agreement. At the election of Buyer, Sellers shall designate
Buyer and other Persons reasonably designated by Buyer as
additional named insureds with respect to all such policies
except for Sellers' directors and officers, fiduciary duty and
wrongful termination policies, and, to the extent such
designation requires additional premiums, Buyer shall pay such
additional premiums.
5.23. Other Agreements. Buyer agrees, upon request by
Sellers, to (a) complete, on behalf of any Seller, any Rejected
Contracts assumed by Sellers pursuant to Section 5.16(b) and (b)
perform any warranty work relating to any Completed Contract, in
each case pursuant to the Time & Material Agreement.
5.24. Temporary Space. From and after the Closing Date,
Buyer agrees, for so long as Buyer occupies the office space
utilized as of the Effective Date by S&W in Boston,
Massachusetts, to provide S&W with temporary office space at such
location in a reasonable amount to be agreed between Buyer and
S&W, including the use of office furniture, computers and
equipment at no rent; provided, however, that S&W shall be
responsible for and shall reimburse Buyer for S&W's pro rata
share of utilities, operating maintenance, insurance and real
property taxes.
5.25. Schenectady Lease. Buyer and Sellers shall
negotiate in good faith a lease by Buyer of the space comprising
a part of the real property, located in Schenectady, New York and
set forth on Schedule 2.02(d), currently used by Sellers' Power
Technologies Group, which lease shall be at fair market rental
rates for an initial two year period with options to renew for
additional periods.
5.26. Representation, Warranties and Covenants of
Certain Subsidiaries. Each of Stone & Xxxxxxx Engineering
Limited, an English limited company, Stone & Xxxxxxx Group
Limited, an English limited company, Stone & Xxxxxxx Construction
Limited, an English limited company, Stone & Xxxxxxx Services
Limited, an English limited company, Stone & Xxxxxxx Engineering
and Field Services Limited, an English limited company, Stone &
Xxxxxxx Management Consultants Limited, an English limited
company, Stone & Xxxxxxx Services SDN BHD, a Malaysian limited
company, Stone & Xxxxxxx Anadolu Mohendislik Ltd. Sirketi, a
Turkish limited company, and Stone & Xxxxxxx Canada Limited, a
company incorporated under the federal laws of Canada, joins this
Agreement for purposes severally of providing the
representations, warranties and covenants stated in this Section
5.26. Each of the companies listed in this Section 5.26 is a
directly or indirectly wholly owned subsidiary of S&W and each
shall constitute a AForeign Subsidiary@ for purposes of this
Section 5.26 and as a ASubsidiary@ or ASeller@ for all other
purposes of this Agreement as applicable. Nothing set forth
herein shall limit or replace any other provision of this
Agreement, it being the intention of the parties that the
provisions of this Section 5.26 are in addition to and not in
substitution for any other provision of this Agreement. Each
Foreign Subsidiary hereby severally represents, warrants and
covenants as to itself to Buyer as follows:
(a) Adherence. The Board of Directors of such Foreign
Subsidiary has reviewed the terms of this Agreement and
acknowledges that part of the consideration payable hereunder by
Buyer relates to assets of such Foreign Subsidiary. Such Foreign
Subsidiary warrants that the directors have determined that the
terms of this Agreement as they relate to such Foreign Subsidiary
are in the best interests of such Foreign Subsidiary and that
such Foreign Subsidiary has chosen freely to join this Agreement
for all such purposes hereunder as are applicable to such Foreign
Subsidiary and its assets.
(b) Apportionment of Consideration. Such Foreign Subsidiary
covenants that it will agree to the apportionment and application
of the consideration to be paid by Buyer to S&W pursuant to this
Agreement in respect of the assets of such Foreign Subsidiary
that are to be sold to Buyer hereunder; provided, however, that
the consideration to be allocated to such Foreign Subsidiary must
be paid to or effectively credited to such Foreign Subsidiary
under governing financial accounting practices and, provided
further, that such Foreign Subsidiary shall not be obligated to
convey an asset if the consideration to be paid in respect of the
asset is determined by its directors acting in good faith to be
manifestly unfair to such Foreign Subsidiary or otherwise to
constitute less than fair value for such asset and such
determination by the Board of Directors is supported by the
determination of a firm of independent chartered accountants
selected by such Foreign Subsidiary and Buyer for such purpose.
(c) Solvency. Such Foreign Subsidiary is solvent (under
the law applicable to such Foreign Subsidiary) as of the date
hereof and will immediately following Closing be solvent.
(d) Pension Plans. If Buyer should become liable under
any applicable law to succeed to employment obligations of such
Foreign Subsidiary and if such Foreign Subsidiary is a sponsor or
employer under a pension plan on the date hereof, then such
Foreign Subsidiary covenants that it will exercise its best
efforts to complete agreement with Buyer at Buyer=s election so
as to ensure that Buyer, in its capacity of employer or sponsor
of such plan, succeeds to the full benefit of such pension plan
(including any funding surplus) in any agreement between such
Foreign Subsidiary and Buyer pursuant to which Buyer or its
designee elects to succeed to such Foreign Subsidiary's rights
and obligations under or in respect of such pension plan.
(e) Cooperation. Such Foreign Subsidiary, subject to the
provisos of Section 5.26(b), will provide its full and complete
cooperation in the completion of the sale or transfer of those of
its assets to be sold or transferred to Buyer or for its benefit
pursuant to the terms of this Agreement so as to vest irrevocable
and unencumbered title to all such assets in Buyer or its
designee. In furtherance hereof, such Foreign Subsidiary agrees
to take all such actions as a Seller as are specified in
Section 5.11.
5.27 Xxxxxx Credit Agreement. Buyer shall refinance or
purchase from Xxxxxx all advances outstanding (including any
costs and expenses due) under the Xxxxxx Credit Agreement within
one business day after entry by the Bankruptcy Court of the Sale
Order.
5.28 Canadian Transfer.
(a) The Canadian Assets are included in the Assets.
Sellers agree to use best efforts to transfer the Canadian Assets
to Buyer as soon as practicable.
(b) Buyer shall not transfer the Canadian
Consideration to Sellers, and Buyer shall not assume the Canadian
Liabilities, unless and until Sellers shall make a legal, valid
and effective transfer of the Canadian Assets to Buyer (the
"Canadian Transfer"). Notwithstanding anything contained in this
Agreement to the contrary, until the Canadian Transfer: (i) the
Cash Consideration, the Share Consideration and the Aggregate
Consideration shall not include the Canadian Consideration,
(ii) the Canadian Assets shall be Excluded Assets and (iii) the
Canadian Liabilities shall be Excluded Liabilities.
Notwithstanding anything contained in this Agreement to the
contrary, upon the Canadian Transfer: (x) the Cash Consideration,
the Share Consideration and the Aggregate Consideration shall
include the Canadian Consideration, (y) the Assets shall include
the Canadian Assets and (z) the Assumed Liabilities shall include
the Canadian Liabilities. This Section 5.28(b) does not relieve
Sellers of their obligations and liabilities under
Section 5.28(a) and Section 5.28(c).
(c) If Sellers do not transfer the Canadian Assets to
Buyer or if Buyer must pay amounts in excess of the Canadian
Consideration to acquire the Canadian Assets, then Buyer shall
have a claim or claims against Sellers under the Agreement for
the value of the Canadian Assets not transferred and/or such
additional amounts paid (a "Canadian Transfer Claim"), which can
be satisfied out of the Canadian Consideration, and if the
Canadian Consideration is not sufficient to satisfy such claim,
the Canadian Transfer Claim in excess of the Canadian
Consideration shall have an administrative priority in Sellers'
estates under Sections 503(b) and 507(a)(1) of the Bankruptcy
Code.
The parties reserve their right to dispute the
appropriate amount of the Canadian Transfer Claim, if any. The
amount of the Canadian Consideration shall not be evidence for
either party of the appropriate amount of such claim, nor shall
it be evidence of the amount of the overall purchase price
attributable to the Canadian Assets.
If the Canadian Transfer does not occur, then the
parties shall attempt to agree upon the amount of the Canadian
Transfer Claim; if they cannot agree, then they shall submit the
matter to the Bankruptcy Court for resolution. If the Canadian
Transfer does not occur, for purposes of calculating the
Adjustment Amount, the Canadian Assets attributable to Completed
Contracts and Rejected Contracts shall not be deemed to be
Adjustment Assets and the Canadian Liabilities shall not be
deemed to be Adjustment Liabilities.
(d) No Seller nor any Affiliate of any Seller
(including any officer or director of any Seller or any Affiliate
of any Seller) shall acquire, bid for or otherwise seek to
acquire, or assist (except as may be required under Canadian
bankruptcy law) any other party in any way in connection with the
acquisition, bidding for or attempt to acquire, the Canadian
Assets. Sellers shall be liable to Buyer for any out-of-pocket
losses, costs or expenses actually incurred by Buyer as a result
of a breach of this Section 5.28(d).
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS
The obligations of Sellers hereunder are subject to the
satisfaction on or prior to the Closing Date of the following
conditions, unless waived in writing by Sellers:
6.01. Representations and Warranties; Covenants.
(a) Each of the representations and warranties of Buyer
contained in this Agreement shall be true and correct in all
material respects on and as of the Effective Date and, except
where expressly limited to a specific date, on and as of the
Closing Date.
(b) Each and all of the terms, covenants and agreements to
be complied with or performed by Buyer on or before the Closing
Date shall have been complied with or performed in all material
respects, including the obligations of Buyer in Section 8.03.
6.02. Adverse Actions or Proceedings. No Governmental
Authority shall have taken any action or made any request of
Sellers or Buyer as a result of which Sellers reasonably and in
good xxxxx xxxx it inadvisable to proceed with the Transaction,
and there shall not be in effect any order restraining, enjoining
or otherwise preventing consummation of the Transaction.
6.03. Pre-Closing Confirmations. Sellers shall have
obtained or received from Buyer documentation or other evidence
reasonably satisfactory to Sellers that Sellers and Buyer have
received or will receive all consents, approvals, authorizations
and clearances of Governmental Authorities required to consummate
the transactions contemplated hereby and that all applicable
waiting periods under the HSR Act have expired.
6.04. Approval, Execution and Delivery of Additional
Agreements. The Registration Rights Agreement, the Indemnity
Escrow Agreement and the Time & Material Agreement shall be
approved by the Bankruptcy Court and executed and delivered by
Buyer.
6.05. Opinion of Buyer's Counsel. Sellers shall have
received an opinion or opinions from counsel to Buyer dated as of
the Closing Date and addressed to Sellers, substantially in the
form attached as Exhibit A. In rendering such opinion, such
counsel may rely upon certificates of governmental officials and
may place reasonable reliance upon certificates of officers of
Buyer.
6.06. No Buyer Material Adverse Change. No event shall
have occurred that shall have had a Buyer Material Adverse
Effect.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
The obligations of Buyer hereunder are subject to the
satisfaction on or prior to the Closing Date of each of the
following conditions, unless waived in writing by Buyer:
7.01. Representations and Warranties; Covenants.
(a) Each of the representations and warranties of each
Seller contained in this Agreement shall be true, complete and
correct in all material respects on and as of the Effective Date
(except with respect to representations and warranties that
require or reference a Schedule; which shall be deemed to have
been made and delivered as of the Effective Date) and, except
where expressly limited to a specific date, on and as of the
Closing Date.
(b) Each and all of the terms, covenants and agreements to
be complied with or performed by each Seller on or before the
Closing Date shall have been complied with or performed in all
material respects, including the obligations of Sellers in
Section 8.02.
7.02. Pre-Closing Confirmations and Contractual
Consents. Buyer shall have obtained or received from Sellers
documentation or other evidence reasonably satisfactory to Buyer
that:
(a) Sellers and Buyer have received all consents, permits,
approvals, authorizations and clearances of Governmental
Authorities required to consummate the transactions herein
contemplated;
(b) the Sale Order and the Executory Contract Assumption
and Assignment Order have been entered by the Bankruptcy Court
and have become Final Orders, unless Buyer, in its sole
discretion, waives the requirement that one or more of these
Orders be a Final Order; provided, however, that, if Buyer waives
this requirement and closes prior to Final Orders, Sellers shall
use their best efforts, at their expense, to provide Buyer with
Final Orders, including moving to dismiss any appeals for
mootness;
(c) Sellers have obtained consents to assignment of the
Assumed Contracts set forth on Schedule 7.02(c);
(d) Buyer has obtained such other consents and approvals as
may be legally or contractually required for Buyer's consummation
of the transactions described herein; and
(e) all applicable waiting periods under the HSR Act have
expired.
7.03. Adverse Actions or Proceedings. No Governmental
Authority shall have taken any action or made any request of
Sellers or Buyer as a result of which Buyer reasonably and in
good xxxxx xxxxx it inadvisable to proceed with the Transaction,
and there shall not be in effect any order restraining, enjoining
or otherwise preventing consummation of the Transaction.
7.04. Operations; No Material Adverse Effect. No event
shall have occurred which has had a Material Adverse Effect and
there shall have been no material adverse change in the financial
markets generally.
7.05. Title Insurance Policies and Surveys. Buyer shall
have received:
(a) commitments from a title insurance company or companies
designated by Buyer to issue as of the Closing Date one or more
ALTA extended coverage owner's title insurance policies for the
Real Property, in amounts acceptable to Buyer, in form
satisfactory to Buyer and with such endorsements as Buyer may
require; and
(b) ALTA surveys of the Real Property and improvements
thereon, in form satisfactory to Buyer and the title insurance
company, from an engineering firm designated by Buyer and
certified to Buyer, the title insurance company and such other
Persons as Buyer may designate.
7.06. Opinion of Sellers' Counsel. Buyer shall have
received an opinion or opinions from counsel to Sellers dated as
of the Closing Date and addressed to Buyer, substantially in the
form attached as Exhibit B. In rendering such opinion, such
counsel may rely upon certificates of governmental officials and
may place reasonable reliance upon certificates of officers of
Sellers.
7.07. Deliveries at Closing. Sellers shall have
delivered to Buyer, in form reasonably acceptable to Buyer and
approved by Buyer's counsel, deeds, bills of sale, assignments or
other instruments of transfer, and estoppels, consents and
waivers by others, necessary or appropriate to transfer to and
effectively vest in Buyer the Assets and all agreements,
instruments, certificates or other documents contemplated or
required to be executed by any Seller pursuant to this Agreement.
7.08. Lien Searches. Sellers shall have delivered to
Buyer UCC lien searches showing all Encumbrances on the Assets,
accompanied by fully executed UCC or other releases or
conveyances relating to all Encumbrances that are not Permitted
Real Property Encumbrances.
7.09. Approval, Execution and Delivery of Additional
Agreements. The Registration Rights Agreement, the Indemnity
Escrow Agreement and the Time & Material Agreement shall be
approved by the Bankruptcy Court and executed and delivered by
Sellers.
8. CLOSING; TERMINATION OF AGREEMENT
8.01. Closing.
(a) Consummation of the sale and purchase of the Assets and
the Business and the other transactions contemplated by and
described in this Agreement (the "Closing") shall take place at
the offices of Fulbright & Xxxxxxxx L.L.P., 0000 XxXxxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxx at 10:00 a.m. on the first business
day following satisfaction or waiver of the conditions set forth
in Article 6 and Article 7, or at such time or place as the
parties may mutually agree. Unless otherwise agreed in writing
by the parties at Closing, the Closing shall be effective for
accounting purposes as of 12:01 A.M. on the day following the
Closing Date.
(b) At the Closing, Buyer may designate one or more
Affiliates to take title to the Assets, and references to
instruments or agreements to be executed and delivered to or by
Buyer in this Agreement at Closing shall apply to each such
designee with respect to the Assets acquired by it. Buyer shall
notify Sellers prior to Closing of the names of such designees
and, from and after Closing, the rights, privileges and benefits
of this Agreement applicable to Buyer shall benefit each such
designee, subject to the terms, covenants and conditions of this
Agreement, with respect to the Assets acquired by it.
8.02. Action of Sellers at Closing. At the Closing
unless otherwise waived in writing by Buyer, Sellers shall
deliver:
(a) to Buyer deeds containing general warranties of title,
fully executed by Sellers in recordable form, conveying to Buyer
good and marketable fee title to the Real Property, free and
clear of all Encumbrances other than the Permitted Real Property
Encumbrances;
(b) to Buyer bills of sale and assignment, fully executed
by Sellers, in form and substance acceptable to Buyer, conveying
to Buyer good and valid title to all Assets other than the Real
Property, free and clear of all Encumbrances;
(c) to Buyer assignments, fully executed by Sellers, in
form and substance acceptable to Buyer, conveying Sellers'
interests in the Assumed Contracts to Buyer;
(d) to Buyer the Indemnity Escrow Agreement, fully executed
by S&W;
(e) to Buyer the Registration Rights Agreement, fully
executed by each Seller;
(f) to Buyer the Time & Material Agreement, fully executed
by Sellers;
(g) to Buyer copies of resolutions or equivalent
instruments duly adopted by the governing body of each Seller
and, if required, the partners or members of such Seller,
authorizing and approving the execution and delivery of this
Agreement and the consummation of the transactions contemplated
hereby, certified as true and in full force and effect as of the
Closing Date by the appropriate officers or partners of such
Seller;
(h) to Buyer certificates of the duly authorized President
or Vice President or similar officer of each Seller certifying
that, except where expressly limited to a specific date, each of
the representations and warranties of each Seller contained in
this Agreement is true and correct on and as of the Closing Date
in all material respects, and that each and all of the terms,
covenants and agreements to be complied with or performed by
Sellers on or before the Closing Date have been complied with and
performed in all material respects;
(i) to Buyer certificates of incumbency or evidence of
appropriate power of attorney for the respective directors or
officers of each Seller executing the Agreement and other Closing
documents, dated as of the Closing Date;
(j) to Buyer certificates of existence and good standing
from each jurisdiction in which each any Seller is incorporated
or organized (and, with respect to any Foreign Seller, only to
the extent that the same or equivalent certificates or documents
may be obtained in its jurisdiction of organization), each dated
the within ten business days prior to Closing;
(k) to Buyer, appropriate letters or other documentation
necessary to transfer and sell the Accounts Receivable to Buyer
and to advise the account debtors of such transfer and sale; and
(l) to Buyer such other instruments, agreements,
certificates and documents as Buyer reasonably deems necessary to
effect the transactions contemplated hereby.
8.03. Action of Buyer at Closing. At the Closing and
unless otherwise waived in writing by Sellers, Buyer shall
deliver:
(a) to Sellers the Cash Consideration and the Share
Consideration, less the Indemnity Deposit and the LC Deposit;
(b) to the Escrow Agent the Indemnity Deposit and the LC
Deposit in accordance with the Indemnity Escrow Agreement;
(c) to the extent applicable, to an account under the
control of the Massachusetts Court, the Litigation Deposit;
(d) to Sellers an assumption agreement, fully executed by
Buyer, in form and substance reasonably acceptable to Sellers,
pursuant to which Buyer shall assume the future payment and
performance of the Assumed Liabilities;
(e) to Sellers the Indemnity Escrow Agreement, fully
executed by Buyer;
(f) to Sellers the Registration Rights Agreement, fully
executed by Buyer;
(g) to Sellers the Time & Material Agreement, fully
executed by Buyer;
(h) to Sellers copies of resolutions duly adopted by the
board of directors of Buyer authorizing and approving Buyer's
execution and delivery of this Agreement and the Transaction,
certified as true and in full force and effect as of the Closing
Date by an appropriate officer of Buyer;
(i) to Sellers certificates of the duly authorized
President or a Vice President of Buyer certifying that, except as
expressly limited to a specific date, each of the representations
and warranties of Buyer contained in this Agreement is true and
correct on and as of the Closing Date in all material respects,
and that each and all of the terms, covenants and agreements to
be complied with or performed by Buyer on or before the Closing
Date have been complied with and performed in all material
respects;
(j) to Sellers certificates of incumbency for the officers
of Buyer executing this Agreement and other Closing documents,
dated as of the Closing Date;
(k) to Sellers certificates of existence and good standing
of Buyer from the jurisdiction in which it is incorporated, dated
within ten business days date prior to Closing; and
(l) to Sellers such other agreements, instruments and
documents as Sellers reasonably deem necessary to effect the
transactions contemplated hereby.
8.04. Termination Prior to Closing.
(a) Notwithstanding anything herein to the contrary, this
Agreement may be terminated, and the transactions contemplated by
this Agreement abandoned, upon notice by the terminating party to
the other parties:
(i) at any time before the Closing, by mutual consent
of Buyer and Sellers;
(ii) at any time before the Closing, by Buyer on the
one hand, or S&W on the other hand, in the event of material
breach of this Agreement by the non-terminating party or if
the satisfaction of any condition to such party's
obligations under this Agreement becomes impossible or
impracticable with the use of commercially reasonable
efforts and the failure of such condition to be satisfied is
not caused by a breach by the terminating party;
(iii) at any time after September 30, 2000, by S&W
or Buyer if the Transaction has not been consummated on or
before such date;
(iv) at any time before the Closing, by Buyer, if any
of the following shall occur:
(A) any of the Bankruptcy Cases is dismissed or
converted to chapter 7 of the Bankruptcy Code or a
trustee is appointed for any of the Sellers; or
(B) both the Sale Order and the Executory
Contract Assumption and Assignment Agreement shall not
have been entered by July 31, 2000.
(b) If this Agreement is validly terminated pursuant to
this Section 8.04, this Agreement will be null and void, and
there will be no liability on the part of any party (or any of
their respective officers, directors, trustees, employees,
agents, consultants or other representatives).
9. INDEMNIFICATION
9.01. Indemnification by Sellers. Subject to and to the
extent provided in this Section 9, from and after the Closing,
Sellers shall jointly and severally indemnify, defend and hold
harmless Buyer's Indemnified Persons, and each of them, from and
against any Losses incurred or suffered by Buyer's Indemnified
Persons, directly or indirectly, as a result of or arising from:
(a) any inaccuracy of any representation or warranty of any
Seller, whether or not Buyer's Indemnified Persons relied thereon
or had knowledge thereof;
(b) any claims or adjustments arising out of performance of
the Assumed Contracts prior to Closing, except to the extent such
claims or adjustments constitute an Assumed Liability, and any
amount paid under letters of credit called after Closing with
respect to any Project Rejected Contracts or financial guarantees
in favor of insurance carriers;
(c) the nonfulfillment of any covenant, agreement or other
obligation of any Seller set forth in this Agreement or in any
other agreement or instrument delivered by any Seller pursuant to
this Agreement; and
(d) the Excluded Liabilities.
Sellers' obligations under this Section shall have the priority
of a claim for the cost of administration in the Bankruptcy Cases
under Sections 503(b) and 507(a)(1) of the Bankruptcy Code.
9.02. Sellers' Limitations. No Seller shall have any
liability under Section 9.01 and no claim under Section 9.01
shall:
(a) accrue to any of Buyer's Indemnified Persons against
any Seller under Section 9.01(a) unless and until the total
liability of Sellers in respect of claims arising under Section
9.01(a) exceeds Two Million Five Hundred Thousand Dollars
($2,500,000) in the aggregate; provided, however, that there
shall be no minimum Loss requirement, and liability of Sellers
shall arise from and after One Dollar ($1.00) of Losses, in
respect of Losses resulting from any Seller's intentional
misrepresentation or fraud;
(b) be made unless notice thereof shall have been given by
or on behalf of any of Buyer's Indemnified Persons to Sellers in
the manner provided in Section 9.05; or
(c) be recoverable by Buyer except (i) until a plan of
reorganization in the Bankruptcy Cases has become effective or,
if the cases are converted to Chapter 7 cases, until each such
case is closed, as administrative expenses of Sellers' bankruptcy
estates, (ii) against the Indemnity Deposit or the LC Deposit for
claims asserted within eighteen months after the Closing Date
(unless a longer period is specified in Section 9.06 with respect
to a representation and warranty), and (iii) pursuant to Buyer's
rights of offset and set off in Section 10.11;
provided, however, that all claims for indemnification made by
Buyer under this Section 9 will survive any termination or
expiration described above and be recoverable from the sources
described above until such claims shall have been satisfied or
otherwise resolved as provided herein.
9.03. Indemnification by Buyer. Subject to and to the
extent provided in this Section 9, from and after the Closing
Date, Buyer shall indemnify, defend and hold harmless Sellers'
Indemnified Persons, and each of them, from and against any
Losses incurred or suffered by Sellers' Indemnified Persons,
directly or indirectly, as a result of or arising from:
(a) any inaccuracy in any representation or warranty of
Buyer, whether or not Sellers' Indemnified Persons relied thereon
or had knowledge thereof;
(b) the nonfulfillment of any covenant, agreement or other
obligation of Buyer set forth in this Agreement or in any other
agreement or instrument delivered by Buyer pursuant to this
Agreement; and
(c) the Assumed Liabilities.
9.04. Buyer's Limitations. Buyer shall have no
liability under Section 9.03 and no claim under Section 9.03
shall:
(a) accrue to any of Sellers' Indemnified Persons against
Buyer under Section 9.03(a) unless and until the total liability
of Buyer in respect of claims arising under Section 9.03(a)
exceeds Two Million Five Hundred Thousand Dollars ($2,500,000) in
the aggregate; provided, however, that there shall be no minimum
Loss requirement, and liability of Buyer shall arise from and
after One Dollar ($1.00) of Losses, in respect of Losses
resulting from Buyer's intentional misrepresentation or fraud; or
(b) be made unless notice thereof shall have been given by
or on behalf of any of Sellers' Indemnified Persons to Buyer in
the manner provided in Section 9.05;
provided, however, that all claims for indemnification made by
Sellers under this Section 9 will survive any termination or
expiration described above and be recoverable from the sources
described above until such claims shall have been satisfied or
otherwise resolved as provided herein.
9.05. Notice and Procedure. All claims for
indemnification by any Indemnified Party against an Indemnifying
Party under this Section 9 shall be asserted and resolved as
follows:
(a)(i) If any claim or demand for which an
Indemnifying Party would be liable for Losses to an
Indemnified Party is alleged or asserted by a Person other
than any Buyer's Indemnified Person or any Sellers'
Indemnified Person (a "Third Party Claim"), the Indemnified
Party shall deliver a Claim Notice with reasonable
promptness to the Indemnifying Party, together with a copy
of all papers served, if any, and specifying the nature of
and alleged basis for the Third Party Claim and, to the
extent then feasible, the alleged amount or the estimated
amount of the Third Party Claim. If the Indemnified Party
fails to deliver the Claim Notice to the Indemnifying Party
within 30 days after the Indemnified Party receives notice
of such Third Party Claim, the Indemnifying Party will not
be obligated to indemnify the Indemnified Party with respect
to such Third Party Claim if and only to the extent that the
Indemnifying Party's ability to defend the Third Party Claim
has been irreparably prejudiced by such failure. The
Indemnifying Party will notify the Indemnified Party within
30 days after receipt of the Claim Notice (the "Notice
Period") whether the Indemnifying Party intends, at the sole
cost and expense of the Indemnifying Party, to defend the
Indemnified Party against the Third Party Claim.
(ii) If the Indemnifying Party notifies the Indemnified
Party within the Notice Period that the Indemnifying Party
intends to defend the Indemnified Party against the Third
Party Claim, then the Indemnifying Party will have the right
to defend, at its sole cost and expense, the Third Party
Claim by all appropriate proceedings, which proceedings will
be diligently prosecuted by the Indemnifying Party to a
final conclusion or settled at the discretion of the
Indemnifying Party (with the consent of the Indemnified
Party). The Indemnifying Party will have full control of
such defense and proceedings; provided, however, that the
Indemnified Party may file during the Notice Period, at the
sole cost and expense of the Indemnified Party, any motion,
answer or other pleading that the Indemnified Party may deem
necessary or appropriate to protect its interests and not
irrevocably prejudicial to the Indemnifying Party (it being
understood and agreed that, except as provided in Section
9.05(a)(iii), if an Indemnified Party takes any such action
that is irrevocably prejudicial and conclusively causes a
final adjudication that is materially adverse to the
Indemnifying Party, the Indemnifying Party will be relieved
of its obligations hereunder with respect to that portion of
the Third Party Claim prejudiced by the Indemnified Party's
action); provided, further, however, that, if requested by
the Indemnifying Party, the Indemnified Party shall
cooperate, at the sole cost and expense of the Indemnifying
Party, with the Indemnifying Party and its counsel in
contesting any Third Party Claim that the Indemnifying Party
elects to contest or, if appropriate in the judgment of the
Indemnified Party and related to the Third Party Claim, in
making any counterclaim or cross-claim against any Person
(other than the Indemnified Party). The Indemnified Party
may participate in, but not control, any defense or
settlement of any Third Party Claim assumed by the
Indemnifying Party pursuant to this Section 9.05(a)(ii) and,
except as provided in the preceding sentence, the
Indemnified Party will bear its own costs and expenses with
respect to such participation. Notwithstanding the
foregoing, the Indemnifying Party may not assume the defense
of the Third Party Claim if (1) the Persons against whom the
claim is made, or any impleaded Persons, include both the
Indemnifying Party and any Indemnified Party, and (2)
representation of both such Persons by the same counsel
would be inappropriate due to actual or potential differing
interests between them, in which case any Indemnified Party
shall have the right to defend the Third Party Claim and to
employ counsel at the expense of the Indemnifying Party.
(iii) If the Indemnifying Party fails to notify the
Indemnified Party within the Notice Period that the
Indemnifying Party intends to defend the Indemnified Party
against the Third Party Claim, or if the Indemnifying Party
gives such notice but fails to diligently prosecute or
settle the Third Party Claim, or if the Indemnifying Party
fails to give any notice whatsoever within the Notice
Period, then the Indemnified Party will have the right (but
not the obligation) to defend, at the sole cost and expense
of the Indemnifying Party, the Third Party Claim by all
appropriate proceedings, which proceedings will be
diligently prosecuted by the Indemnified Party to a final
conclusion or settled at the discretion of the Indemnified
Party. The Indemnified Party will have full control of such
defense and proceedings, including any compromise or
settlement thereof; provided, however, that, if requested by
the Indemnified Party, the Indemnifying Party shall
cooperate, at the sole cost and expense of the Indemnifying
Party, with the Indemnified Party and its counsel in
contesting the Third Party Claim which the Indemnified Party
is contesting, or, if appropriate and related to the Third
Party Claim in question, in making any counterclaim or cross-
claim against any Person (other than the Indemnifying
Party).
(iv) Notwithstanding Section 9.05(a)(iii), if the
Indemnifying Party notifies the Indemnified Party within the
Notice Period that the Indemnifying Party disputes its
obligation to indemnify the Indemnified Party against the
Third Party Claim, and if such dispute is resolved pursuant
to Section 9.05(c) in favor of the Indemnifying Party, the
Indemnifying Party will not be required to bear the costs
and expenses of the Indemnified Party's defense pursuant to
Section 9.05(a)(iii) or of the Indemnifying Party's
participation therein at the Indemnified Party's request,
and the Indemnified Party will reimburse the Indemnifying
Party in full for all such costs and expenses. The
Indemnifying Party may participate in, but not control, any
defense or settlement controlled by the Indemnified Party
pursuant to Section 9.05(a)(iii), but the Indemnifying Party
will bear its own costs and expenses with respect thereto if
such participation is not at the request of the Indemnified
Party.
(b) In the event any Indemnified Party should have a claim
against any Indemnifying Party that is not a Third Party Claim,
the Indemnified Party shall deliver an Indemnity Notice with
reasonable promptness to the Indemnifying Party specifying the
nature of and specific basis for the claim and, to the extent
then feasible, the amount or the estimated amount of the claim.
The failure by any Indemnified Party to give timely notice
referred to in the preceding sentence shall not impair such
Person's rights hereunder except to the extent that an
Indemnifying Party demonstrates that it has been irreparably
prejudiced thereby. If the Indemnifying Party does not notify
the Indemnified Party within 30 days following its receipt of the
Indemnity Notice that the Indemnifying Party disputes its
obligation to indemnify the Indemnified Party hereunder, the
claim will be conclusively deemed a liability of the Indemnifying
Party hereunder.
(c) If the Indemnifying Party timely disputes its liability
with respect to a claim described in a Claim Notice or an
Indemnity Notice, the Indemnifying Party and the Indemnified
Party shall proceed promptly and in good faith to negotiate a
resolution of such dispute within 60 days following receipt of
the Claim Notice or Indemnity Notice and, if such dispute is not
resolved through negotiations during such 60-day period, it shall
be resolved pursuant to arbitration pursuant to the then
effective Commercial Arbitration Rules of the American
Arbitration Association to the fullest extent permitted by
applicable law.
(d) Except where liability is disputed pursuant to Section
9.05(c), the Indemnifying Party shall pay the amount of any
liability to the Indemnified Party within 30 days following its
receipt of a Claim Notice or an Indemnity Notice, or on such
later date (i) in the case of a Third Party Claim, as the
Indemnified Party suffers Losses in respect of the Third Party
Claim, or (ii) in the case of an Indemnity Notice in which the
amount of the claim is estimated, promptly after any Losses in
respect of such claim are actually incurred by the Indemnified
Party. In the event the Indemnified Party is not paid in full
for its claim in a timely manner after the Indemnifying Party's
obligation to indemnify and the amount thereof has been
determined, the amount due shall bear interest from the date that
the Indemnifying Party received the Claim Notice or the Indemnity
Notice until paid at the Applicable Rate, and in addition to any
other rights it may have against the Indemnifying Party, the
Indemnified Party shall have the right to set-off the unpaid
amount of such claim against any amounts owed by it to the
Indemnifying Party.
(e) Any estimated amount of a claim submitted in a Claim
Notice or an Indemnity Notice shall not be conclusive of the
final amount of such claim, and the giving of a Claim Notice when
an Indemnity Notice is properly due, or the giving of an
Indemnity Notice when a Claim Notice is properly due, shall not
impair such Indemnified Party's rights hereunder except to the
extent that an Indemnifying Party demonstrates that it has been
irreparably prejudiced thereby. Notice of any claim comprised in
part of Third Party Claims and claims that are not Third Party
Claims may be given pursuant to either Section 9.05(a) or Section
9.05(b).
9.06. Survival of Representations; Indemnity Periods.
Notwithstanding any right of Buyer (whether or not exercised) to
investigate the Business or any right of any party (whether or
not exercised) to investigate the accuracy of the representations
and warranties of the other party contained in this Agreement,
Sellers have, on the one hand, and Buyer has, on the other hand,
the right to rely fully upon the representations, warranties,
covenants and agreements of the other contained in this
Agreement. The representations and warranties in this Agreement
made by S&W and Buyer respectively will survive the Closing
(a) indefinitely with respect to matters covered by Section 2.04,
Section 3.01 and Section 4.01, (b) until 60 days after the
expiration of all applicable statutes of limitations (including
all periods of extension, whether automatic or permissive) with
respect to matters covered by Section 3.05, Section 3.07, Section
3.13 and Section 3.22 and (c) until the expiration of eighteen
calendar months from the Closing Date in the case of all other
representations and warranties, except that:
(i) any representation, warranty, covenant or
agreement that would otherwise terminate in accordance with
clause (b) or clause (c) above shall survive if a Claim
Notice or an Indemnity Notice shall have been given on or
prior to such termination date, until the related claim for
indemnification has been satisfied or otherwise resolved as
provided in this Section 9;
(ii) in the event of intentional misrepresentation or
fraud in the making of any representation or warranty, or
intentional, willful or reckless nonfulfillment or breach of
any covenant in this Agreement, all representations,
warranties, covenants and agreements that are the subject of
the intentional misrepresentation, fraud, willful or
reckless nonfulfillment or breach, shall survive until 60
days after the expiration of all applicable statutes of
limitations (including all periods of extension, whether
automatic or permissive) with respect to matters covered
thereby; and
(iii) covenants and agreements to be performed
after the Closing Date will survive the Closing for the term
specified therein, or, if no term is specified,
indefinitely.
9.07. Limitations of Liability. Notwithstanding
anything in this Section 9 to the contrary, (a) Sellers'
liability for indemnification under this Agreement shall be
(i) limited in the case of claims other than those related to
(A) the letters of credit as shown on Schedule 5.16(b) with
respect to the Project Rejected Contracts or financial guarantees
in favor of insurance carriers or (B) the Canadian Transfer, to
the Indemnity Deposit, (ii) limited in the case of claims related
to the letters of credit as shown on Schedule 5.16(b) with
respect to the Project Rejected Contracts or financial guarantees
in favor of insurance carriers, to the LC Deposit, or
(iii) unlimited in the case of claims related to the Canadian
Transfer, provided that any such claim shall be satisfied first
from the Canadian Consideration, and (b) Buyer's liability for
indemnification under this Agreement shall be limited to the sum
of Twenty Five Million Dollars ($25,000,000).
10. GENERAL
10.01. Schedules. The Schedules and all Exhibits and
documents referred to in or attached to this Agreement are
integral parts of this Agreement as if fully set forth herein and
all statements appearing therein shall be deemed to be
representations. Nothing in the Schedules shall be deemed
adequate to disclose an exception to a representation or warranty
made herein unless the Schedule identifies the exception with
reasonable particularity.
10.02. Tax Effect. None of the parties (nor such
parties' counsel or accountants) has made or is making in this
Agreement any representation to any other party (or such party's
counsel or accountants) concerning any of the Tax effects or
consequences on the other party of the transactions provided for
in this Agreement. Each party represents that it has obtained,
or may obtain, independent Tax advice with respect thereto and
upon which it, if so obtained, has solely relied.
10.03. Reproduction of Documents. This Agreement and all
documents relating hereto, including consents, waivers and
modifications which may hereafter be executed, the documents
delivered at the Closing, and financial statements, certificates
and other information previously or hereafter furnished to any
party may be reproduced by any party by any photographic,
photostatic, microfilm, micro-card, miniature photographic or
other similar process and the parties may destroy any original
documents so reproduced. The parties stipulate that any such
reproduction shall be admissible in evidence as the original
itself in any judicial, arbitral or administrative proceeding
(whether or not the original is in existence and whether or not
such reproduction was made in the ordinary course of business)
and that any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence.
10.04. Time of Essence. Time is of the essence in the
performance of this Agreement. This Section may be waived only
in a writing expressly referring hereto.
10.05. Consents, Approvals and Discretion. Except as
herein expressly provided to the contrary, whenever this
Agreement requires any consent or approval to be given by any
party that is not in such party's sole discretion or any party
must or may exercise discretion (other than its sole discretion),
such consent or approval shall not be unreasonably withheld or
delayed and such discretion shall be reasonably exercised.
10.06. Choice of Law; Submission to Jurisdiction. Except
as otherwise provided in this Section 10.06, this Agreement shall
be governed by and construed in accordance with the laws of the
State of Delaware without regard to such state's conflicts of
laws rules. Each of the Parties hereby (a) submits to the non-
exclusive jurisdiction of the courts of the State of Delaware for
purposes of all legal proceedings arising out of or relating to
this Agreement or the Transaction and irrevocably waives, to the
fullest extent permitted by law, any objection to the laying of
venue of any such proceeding brought in such court and any claim
that such court is an inconvenient forum or (b) with respect to
the Bankruptcy Cases and issues relating thereto that are
properly within the jurisdiction of the Bankruptcy Court, submits
to the exclusive jurisdiction of the Bankruptcy Court for such
purposes and irrevocably waives, to the fullest extent permitted
by law, any objection to the laying of venue of any such
proceeding brought in such Bankruptcy Court and any claim that
such Bankruptcy Court is an inconvenient forum; provided,
however, that if the Bankruptcy Court abstains or otherwise
determines not to hear such proceeding, then the provisions of
clause (a) above shall apply.
10.07. Benefit; Assignment. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and
their respective legal representatives, successors and assigns.
No party may assign this Agreement without the prior written
consent of the other parties; provided, however, that Buyer may
assign this Agreement, in whole or in part, to any Affiliate of
Buyer.
10.08. No Third Party Beneficiary. The terms and
provisions of this Agreement (including provisions regarding
employee and employee benefit matters) are intended solely for
the benefit of the parties, Buyer's Indemnified Persons, Sellers'
Indemnified Persons, and their respective successors and
permitted assigns, and are not intended to confer third-party
beneficiary rights upon any other Person. Any reference in this
Agreement to one or more Employee Benefit Plans of Buyer or S&W
includes provisions, if any, in such plans permitting their
termination or amendment and any covenant in this Agreement to
provide benefits under any Employee Benefit Plan shall not be
deemed or construed to limit Buyer's right to terminate or amend
such plan of Buyer in accordance with its terms.
10.09. Waiver of Breach, Right or Remedy. The waiver by
any party of any breach or violation by another party of any
provision of this Agreement or of any right or remedy of the
waiving party in this Agreement (a) shall not waive or be
construed to waive any subsequent breach or violation of the same
provision, (b) shall not waive or be construed to waive a breach
or violation of any other provision, and (c) shall be in writing
and may not be presumed or inferred from any party's conduct.
Except as expressly provided otherwise in this Agreement no
remedy conferred by this Agreement is intended to be exclusive of
any other remedy, and each and every remedy shall be in addition
to every other remedy granted in this Agreement or now or
hereafter existing at law or in equity, by statute or otherwise.
The election of any one or more remedies by a party shall not
constitute a waiver of the right of such waiving party to pursue
other available remedies. In addition to any other rights and
remedies any party may have at law or in equity for breach of
this Agreement, each party shall be entitled to seek an
injunction to enforce the provisions of this Agreement.
10.10. Notices. Any notice, demand or communication
required, permitted or desired to be given hereunder shall be
deemed effectively given if given in writing (a) on the date
tendered by personal delivery, (b) on the date received by
facsimile or other electronic means, (c) one day after the date
tendered for delivery by nationally recognized overnight courier,
or (d) three days after the date tendered for delivery by United
States mail, with postage prepaid thereon, certified or
registered mail, return receipt requested, in any event addressed
as follows:
If to Buyer:
The Xxxx Group Inc.
0000 Xxxxxx Xxxxx Xxxx.
Xxxxx Xxxxx, Xxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
with a copy to:
Fulbright & Xxxxxxxx L.L.P.
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq. and
Xxxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
If to Seller:
Stone & Xxxxxxx, Incorporated
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: General Counsel
Facsimile: (000) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
or to such other address or number, and to the attention of such
other Person, as any party may designate at any time in writing
in conformity with this Section.
10.11. Misdirected Payments; Offset Rights. Sellers
shall remit to Buyer with reasonable promptness any monies
received by Sellers constituting or in respect of the Assets,
Assumed Contracts and Assumed Liabilities. Buyer shall remit to
S&W with reasonable promptness any monies received by Buyer
constituting or in respect of the Excluded Assets, Rejected
Contracts (except Project Rejected Contracts to the extent Buyer
has made unreimbursed payments under letters of credit related
thereto), Completed Contracts and Excluded Liabilities. If any
Person determines that funds previously paid or credited to any
Seller or the Business in respect of services rendered prior to
the Closing Date have resulted in an overpayment or must be
repaid, Sellers shall be responsible for the repayment of said
monies (and the defense of such actions), except to the extent
that the repayment obligation was an Assumed Liability. If Buyer
suffers any deduction to or offset against amounts due Buyer of
funds previously paid or credited to any Seller or the Business
in respect of services rendered prior to the Closing Date,
Sellers shall immediately pay to Buyer the amounts so billed or
offset upon demand, except to the extent that such amounts
represent xxxxxxxx in excess of cost and revenues recognized
under the Assumed Contracts. Any amounts due Buyer by Sellers,
or due Sellers by Buyer, may be offset against monies or other
funds held by the party entitled to payment of such amounts.
10.12. Severability. If any provision of this Agreement
is held or determined to be illegal, invalid or unenforceable
under any present or future law, and if the rights or obligations
of any party under this Agreement will not be materially and
adversely affected thereby: (a) such provision will be fully
severable; (b) this Agreement will be construed and enforced as
if such illegal, invalid or unenforceable provision had never
comprised a part hereof; (c) the remaining provisions of this
Agreement will remain in full force and effect and will not be
affected by the illegal, invalid or unenforceable provision or by
its severance herefrom; and (d) in lieu of such illegal, invalid
or unenforceable provision, there will be added automatically as
a part of this Agreement a legal, valid and enforceable provision
as similar in terms to such illegal, invalid or unenforceable
provision as may be possible.
10.13. Entire Agreement; Counterparts; Amendment. This
Agreement, together with the Sale Order (but excluding Exhibit B
to the Sale Order), supersedes all prior or contemporaneous
contracts, agreements and understandings and constitutes the
entire agreement of whatsoever kind or nature existing between or
among the parties representing the subject matter of this
Agreement and no party shall be entitled to benefits other than
those specified herein. As between or among the parties, any
oral or written representation, agreement or statement not
expressly incorporated herein, whether given prior to or on the
Effective Date, shall be of no force and effect unless and until
made in writing and signed by the parties on or after the
Effective Date. The representations and warranties set forth in
this Agreement shall survive the Closing and remain in full force
and effect as provided in Article 9, and shall survive the
execution and delivery of all other agreements, instruments or
other documents described, referenced or contemplated herein
(including any deed, assignment, transfer or conveyance to Buyer)
and shall not be merged herewith or therewith. Each
representation, warranty and covenant contained in this Agreement
has independent significance and if any party has breached any
representation, warranty or covenant contained herein in any
respect, the fact that there exists another representation,
warranty or covenant relating to the same subject matter
(regardless of the relative level of specificity) that such party
has not breached shall not detract from or mitigate the fact that
the party is in breach of the first representation, warranty or
covenant. This Agreement may be executed in two or more
counterparts, each and all of which shall be deemed an original
and all of which together shall constitute but one and the same
instrument. This Agreement may not be amended except in a
written instrument executed the parties.
10.14. Drafting. No provision of this Agreement shall be
interpreted for or against any Person on the basis that such
Person was the draftsman of such provision, and no presumption or
burden of proof shall arise favoring or disfavoring any Person by
virtue of the authorship of any provision of this Agreement.
10.15. Confidentiality. The provisions of the
confidentiality agreement between Buyer and Sellers dated
June 12, 2000 are hereby incorporated by this reference as if
fully set forth herein, and shall apply and remain in full force
and effect through the Closing Date.
10.16. Publicity. No party to this Agreement shall prior
to the Closing, without prior consultation with the other parties
to the extent practicable under the circumstances taking into
account applicable laws and stock exchange requirements, make any
public disclosure with respect to the Transaction, any
negotiations or discussions concerning the Transaction or the
existence of this Agreement.
[Signature Pages Follow]
In Witness Whereof, the parties have caused this Agreement
to be executed in multiple originals by their duly authorized
officers as of the Effective Date.
Stone & Xxxxxxx, Incorporated The Xxxx Group Inc.
By: By:
Title: Title:
DOMESTIC SUBSIDIARIES
0000 Xxxxxxx Xxxxxxx Corporation
By:
Title:
000 Xxxxxx Xxxxxx Corporation
By:
Title:
AEC International Projects, Inc.
By:
Title:
Associated Engineers & Consultants, Inc.
By:
Title:
Auburn VPS General Corporation
By:
Title:
Auburn VPS Limited Corporation
By:
Title:
Belmont Constructors Company, Inc.
By:
Title:
Belmont Constructors Company, L.P.
By:
Title:
Commercial Cold Storage, Inc.
By:
Title:
DSS Engineers, Inc.
By:
Title:
Enclave Parkway Realty, Inc.
By:
Title:
Fast Supply Corporation
By:
Title:
GSES Holding, LLC
By:
Title:
International Engineers & Constructors, Incorporated
By:
Title:
Nordic Holdings, Inc.
By:
Title:
Nordic Investors, Inc.
By:
Title:
Nordic Rail Services, Inc.
By:
Title:
Nordic Refrigerated Services, Inc.
By:
Title:
Nordic Refrigerated Services, Limited Partnership
By:
Title:
Nordic Transportation Services, Inc.
By:
Title:
Polar Transport, Inc.
By:
Title:
Power Technologies, Inc.
By:
Title:
Prescient Technologies, Inc.
By:
Title:
Projects Engineers, Incorporated
By:
Title:
Rockton Associates, Incorporated
By:
Title:
Rockton Technical Services Corporation
By:
Title:
Sabal Corporation
By:
Title:
Sabal Real Estate Corporation
By:
Title:
SAW Consulting Services, Inc.
By:
Title:
SC Wood, LLC
By:
Title:
Selective Technologies Corporation
By:
Title:
Sleeper Street Realty Corporation
By:
Title:
SNW Binghamton I, LP
By:
Title:
SNW Binghamton II, LP
By:
Title:
Stone & Xxxxxxx Xxx Dhabi (United Arab Emirates), Inc.
By:
Title:
Stone & Xxxxxxx Asia Corporation
By:
Title:
Stone & Xxxxxxx Auburn Corporation
By:
Title:
Stone & Xxxxxxx Xxxxxx, Incorporated
By:
Title:
Stone & Xxxxxxx Binghamton Corporation
By:
Title:
Stone & Xxxxxxx Civil and Transportation Services, Inc.
By:
Title:
Stone & Xxxxxxx Construction Company, Inc.
By:
Title:
Stone & Xxxxxxx Development Corporation
By:
Title:
Stone & Xxxxxxx Dominican Republic, Incorporated
By:
Title:
Stone & Xxxxxxx Engineering Corporation
By:
Title:
Stone & Xxxxxxx Engineers and Constructors, Inc.
By:
Title:
Stone & Xxxxxxx Far East Technical Services Corp.
By:
Title:
Stone & Xxxxxxx Indonesia Corporation
By:
Title:
Stone & Xxxxxxx Industrial Technology Corporation
By:
Title:
Stone & Xxxxxxx Inter-American Corporation
By:
Title:
Stone & Xxxxxxx International Corporation
By:
Title:
Stone & Xxxxxxx International Projects Corporation
By:
Title:
Stone & Xxxxxxx International Sales Corporation
By:
Title:
Stone & Xxxxxxx Italia, Incorporated
By:
Title:
Stone & Xxxxxxx Korea Corporation
By:
Title:
Stone & Xxxxxxx Kuwait, Incorporated
By:
Title:
Stone & Xxxxxxx Management Consultants, Inc.
By:
Title:
Stone & Xxxxxxx Michigan, Inc.
By:
Title:
Stone & Xxxxxxx Middle East Engineering Services Corporation
By:
Title:
Stone & Xxxxxxx of Argentina Corporation
By:
Title:
Stone & Xxxxxxx of Mexico Engineering Corporation
By:
Title:
Stone & Xxxxxxx Oil Company, Inc.
By:
Title:
Stone & Xxxxxxx Operating Corporation
By:
Title:
Stone & Xxxxxxx Overseas Consultants, Inc.
By:
Title:
Stone & Xxxxxxx Overseas Development Corporation
By:
Title:
Stone & Xxxxxxx Overseas Group, Inc.
By:
Title:
Stone & Xxxxxxx Pacific Corporation
By:
Title:
Stone & Xxxxxxx Power Engineering Corporation
By:
Title:
Stone & Xxxxxxx Power Projects Corporation
By:
Title:
Stone & Xxxxxxx Procurement Corporation
By:
Title:
Stone & Xxxxxxx Puerto Rico, Incorporated
By:
Title:
Stone & Xxxxxxx Saudi Arabia, Incorporated
By:
Title:
Stone & Xxxxxxx Taiwan Corporation
By:
Title:
Stone & Xxxxxxx Technology Corporation
By:
Title:
Stone & Webster Wallingford Corporation
By:
Title:
Stone & Xxxxxxx Worldwide Engineering Corporation
By:
Title:
SWL Corporation
By:
Title:
FOREIGN SUBSIDIARIES
Stone & Xxxxxxx Anadolu Mohendislik Ltd. Sirketi
By:
Title:
Stone & Xxxxxxx Construction Limited
By:
Title:
Stone & Xxxxxxx Engineering and Field Services Limited
By:
Title:
Stone & Xxxxxxx Engineering Limited
By:
Title:
Stone & Xxxxxxx Group Limited
By:
Title:
Stone & Xxxxxxx Management Consultants Limited
By:
Title:
Stone & Xxxxxxx Services Limited
By:
Title:
Stone & Xxxxxxx Services SDN BHD
By:
Title:
Stone & Xxxxxxx Technology B.V.
By:
Title:
Stone & Xxxxxxx Thailand Limited
By:
Title:
Stone & Xxxxxxx India Limited
By:
Title:
International Associates (Cayman) Limited
By:
Title:
Advanced Technologies (Cayman) Limited
By:
Title:
Process Engineers (Cayman) Limited
By:
Title:
Stone & Xxxxxxx do Brazil Limitada
By:
Title:
Stone & Xxxxxxx Canada Limited
By:
Title:
Rockton Field Services of Canada Ltd.
By:
Title:
Schedule 2.02(b)
Completed Contracts
Project No. Client Name Title/Project Description
06180011 Mobil Chemical Chemical Ethylene Revamp
08743011 Xxxxxxxx Refinery Refinery Revamp
08196011 Xxxxx Xxxxxx Xxxxxxxxxxxxxxx
00000000 XXXX - Xxxxxxxxx Ethylene Plant
Unknown Monsanto (Texas Belmont Construction
City)
Unknown Monsanto (Chocolate Belmont Construction
Bayou)
06489011 DOE/ICF Xxxxxx Xxxxx Flats (LLC w/XX Xxxxx)
07930011 Pyramid Corp Middletown Railroad Station
015590011 Indian Oil Corp. FCCU Revamp
Ltd. Mathura
05062011 Aramco Ras Tanura Refinery Upgrade
(Bugshan)
06140011 Xxxxxxxx Xxxxxx Olefin Plant
06942011 Xxxxxxxx-Florida Cement Plant
Rock
07731011 CanFibre (Lackawana) Fiberboard Plant
07613011 CanFibre (Riverside) Fiberboard Plant
07385011 CanFibre (Riverside) Fiberboard Plant
08206011 Placid Refining FCC Merox Revamp
Company
07279011 UPS Oakhaven Hub Project
08129011 Chevron Isocracking for Magyar
07161011 Petrokemya Propane Cracker Project
08286042 Borealis, AB x/x XXXX Xxxxxxx
Xxxxxx Xxxxxxx
Xxxxxx
00000000 Huntsman SOR Pilot Skid
10745044/1079204 Egyptian Electricity Power Plant
4 Authority (Sidi
Krir)
05500044 China Petrochemicals FCCU Furnace
Daiquig
06178044 Takoradi I (Ghana) Power Plant
07287044 Takoradi II (Ghana) Power Plant
06833037 JGC Titan #2 Cracker
00106132 Norsk Hydro Ethylene Furnace
06336089 TPI FCCA
07150089 Hanwha Hanwha MTA Ethylene
Expansion
07294089 BG Transco Hornsea Storage Facility
00197089 Shell Moerdijk Ethylene Revamp
00107089 ELF Oil U.K. Refinery Revamp
021798089 Thai Olefins TOC Plant Expansion
0195089 BG Transco Reinforcement Compressor
Stations
0104089 Ruhr Oel GmbH (Veba) Grass Roots Furnace Project
07966089 BP SOR Pilot Skid
10695099 Isoboard Fiberboard Plant
08146099 EPR Metals Recovery Plant
07019099 Bayer Butyl II Capacity Increase
10482099 Perusahaan Umum Steam Power Plant
Listrick Negara,
Indonesia Suralaya
SCHEDULE 2.02(d)
EXCLUDED ASSETS
The following is an enumeration of the Sellers' assets which are
not being acquired by the Buyer:
i) Any personal or other property used by Sellers for or in
connection with any Project Rejected Contracts or Completed
Contracts (or projects) shall be retained by Sellers; provided
that, upon the completion of such use, any such remaining
property shall be transferred to Buyer.
ii) All insurances, insurance coverages and insurance recoveries
of the Sellers including, without limitation, those set forth on
Schedule 3.15 hereof, as well as, any other (A) Directors and
Officers insurance, (B) employment liability insurance,
(C) fiduciary liability insurance, (D) professional liability
insurance, (F) any and all insurance required for Rejected and
Completed Contracts and (G) any other insurance, including
retrospectively rated insurance policies, covering any claim or
occurrence, acquired by the Sellers following the Effective Date.
iii) Office Building owned by Power Technologies, Inc., and
Schenectady Industrial Development Agency located at 0000 Xxxx
Xxxxxxxxx, Xxxxxxxxxx, Xxx Xxxx.
iv) Office Building owned by Power Technologies, Inc., and
Schnectady Industrial Development Agency Office Building located
at 0000 Xxxx Xxxxxxxxx, Xxxxxxxxxxx, Xxx Xxxx.
v) See also Schedule 2.02(e) hereof.
vi) The Employee Retirement Plan of Stone & Xxxxxxx,
Incorporated and participating Subsidiaries described as Plan 002
sponsored by Stone & Xxxxxxx, Inc.
SCHEDULE 2.03
LIST OF ASSUMED LIABILITIES
1. Obligations of Sellers arising out of performance of
the Assumed Contracts on and after the Closing Date. In relation
to that certain Settlement Agreement dated April 25, 2000 among
Enron Engineering Services, Enron Power Corporation and Stone &
Xxxxxxx Engineering Limited and the Guarantee of even date given
by S&W in respect of the obligations of Stone & Xxxxxxx
Engineering Limited under such Settlement Agreement, the Assumed
Liability for the purpose of the Closing Balance Sheet shall be
deemed to be a liability of S&W and S&W shall apply such
liability to its intercompany account with Stone & Xxxxxxx
Engineering Limited.
2. Liabilities under that certain mortgage loan related to
the Houston office building.
3. Liabilities under Sellers' outstanding bank
indebtedness, including amounts outstanding and pursuant to
existing standby letters of credit.
4. Unpaid accounts payable, except for unpaid accounts
payable related to Completed Contracts, Rejected Contracts or
Excluded Assets.
5. Xxxxxxxx in excess of cost and revenues recognized with
respect to the Assumed Contracts.
6. Accrued liabilities related to the Assets (including
liabilities with respect to the TPPI Equipment), the Assumed
Contracts and the Hired Employees.
7. Liabilities for (a) accrued taxes, other than (i) with
respect to items characterized on the March 31 Balance Sheet and
the Closing Balance Sheet as deferred income taxes and (ii) Taxes
resulting from the consummation of the Transaction and
(b) liabilities associated with the Enclave Parkway Realty, Inc.
as identified in the Tax Abatement Agreement for Real Property
located in the Stone & Xxxxxxx Reinvestment Zone dated as of
November 24, 1992, by and among S&W, Xxxxxx County, the Xxxxxx
County Flood Control District, the Port of Houston Authority of
Xxxxxx County, Texas and the Xxxxxx County Department of
Education.
8. Other liabilities related to the Assets and the Assumed
Contracts.
SCHEDULE 3.12(a)
REAL PROPERTY ENCUMBRANCES
Encumbrances Applicable to All Real Property:
(i) Liens for Taxes or special assessments which are not yet due
and payable, or which are not shown as existing liens by the
public records.
(ii) Inchoate liens arising by operation of law, including
materialman's, mechanic's, repairman's, laborer's, warehousemen,
carrier's, employee's, contractor's and operator's liens arising
in the ordinary course of business.
(iii) The terms of any of the leases of the Sellers, and any
and all modifications, extensions, amendments or renewals of such
leases, including, without limitation, those leases set forth on
(A) Schedule 2.01(a) hereof under the heading "Leased Real
Property -- (Stone & Xxxxxxx Entity as Lessee)" and
(B) Schedule 3.17(a)(xi) hereof under the heading "Leased Real
Property -- (Stone & Xxxxxxx Entity as Lessor)", except for any
provision purporting to prohibit assumption by Sellers and
assignment to Buyer or to impose some economic cost or other
restriction on Buyer after such assignment.
(iv) Encumbrances reflected on Title Commitments.
(v) Minor defects, irregularities in title, easements, rights of
way, encroachments, overlaps, servitudes and similar rights that
individually or in the aggregate (1) have not had, and are not
reasonably likely to have an adverse effect on the ability of
Buyer to use the property covered by such scheduled Lease in the
manner previously owned or used by Sellers or (2) materially
impair the value of such property.
(vi) Mortgages, Deeds of Trust and assignments of rents, and
associated documents, in favor of Bank of America, N.A., as
collateral agent, securing S&W's bank credit facility.
(vii) Deed of Trust for S&W's Houston office made in favor of
Principal Mutual Life Insurance Company, along with any and all
extensions, renewals, advances, amendments or modifications
thereof.
SCHEDULE 3.12(b)
PERMITTED REAL PROPERTY ENCUMBRANCES
Permitted Encumbrances Applicable to All Real Property:
(i) Liens for Taxes or special assessments which are not yet due
and payable, or which are not shown as existing liens by the
public records.
(ii) Inchoate liens arising by operation of law, including
materialman's, mechanic's, repairman's, laborer's, warehousemen,
carrier's, employee's, contractor's and operator's liens arising
in the ordinary course of business.
(iii) The terms of any of the leases of the Sellers, and any
and all modifications, extensions, amendments or renewals of such
leases, including, without limitation, those leases set forth on
(A) Schedule 2.01(a) hereof under the heading "Leased Real
Property -- (Stone & Xxxxxxx Entity as Lessee)" and
(B) Schedule 3.17(a)(xi) hereof under the heading "Leased Real
Property -- (Stone & Xxxxxxx Entity as Lessor)", except for any
provision purporting to prohibit assumption by Sellers and
assignment to Buyer or to impose some economic cost or other
restriction on Buyer after such assignment.
(iv) Encumbrances reflected on Title Commitments.
(v) Minor defects, irregularities in title, easements, rights of
way, encroachments, overlaps, servitudes and similar rights that
individually or in the aggregate (1) have not had, and are not
reasonably likely to have an adverse effect on the ability of
Buyer to use the property covered by such scheduled Lease in the
manner previously owned or used by Sellers or (2) materially
impair the value of such property.
(vi) Mortgages, Deeds of Trust and assignments of rents, and
associated documents, in favor of Bank of America, N.A., as
collateral agent, securing S&W's bank credit facility.
(vii) Deed of Trust for S&W's Houston office made in favor of
Principal Mutual Life Insurance Company, along with any and all
extensions, renewals, advances, amendments or modifications
thereof.
Schedule 5.16(b)
Rejected Contracts List
Project No. Client Name Title/Project Description
07930 Tampa Bay/Poseidon Desalination Plant (joint
Resources venture is also rejected)
08159099 CCI Newmarket Waste Recovery Plant
08402099 City of Toronto JV with CCI for Waste to
Energy Plant
Project Rejected Contracts
(Those Completed Contracts and Rejected Contracts with Letters of
Credit)
Project No. Client Name Amount of Letter of Credit
07161011 Petrokemya $1,545,890
015590011 Indian Oil Corp. $34,000
Ltd. Mathura FCCU
values
07731011 CanFibre (Lackawana) $3,500,000
10482099 Perusahaan Umum $308,000
Listrick Negara,
Indonesia Suralaya
00197089 Shell Moerdijk $35,850.00
0195089 BG Transco $2,835,000
0104089 Ruhr Oel GmbH (Veba) $756,000
05500044 China Petrochemicals $1,124,650
Daiquig Furnace
Project
10745044/10792044 Egyptian Electricity $1,251,272.00 and
Authority $1,129,120.00
(Sidi Krir)
08286042 Borealis, AB x/x x000,000
Xxxxxx Xxxxxxx
Xxxxxx
N/A St. Xxxx Fire & $818,923.00
Marine Ins.
N/A Aetna Casualty & $100,000.00
Surety
$13,564,051
TOTAL (the "LC Deposit")
