EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
________________________
This Stock Purchase Agreement is entered into as of
July 2, 2003 by and between LAFARGE NORTH AMERICA INC., a
Maryland corporation ("Seller"), and FLORIDA ROCK INDUSTRIES,
INC., a Florida corporation ("Buyer"; and, together with Seller,
the "Parties").
R E C I T A L S
_______________
WHEREAS, Seller owns all of the issued and outstanding
capital stock of Lafarge Florida Inc., a Florida corporation (the
"Company"); and
WHEREAS, Seller desires to sell, and Buyer desires to
purchase, all of the issued and outstanding stock of the Company
for the consideration described herein.
A G R E E M E N T
_________________
In consideration of the mutual promises contained
herein and intending to be legally bound, the Parties agree as
follows:
ARTICLE I
DEFINITIONS
___________
1.1 Definitions.
________________
For all purposes of this Agreement and the Exhibits and
Schedules delivered pursuant to this Agreement, and except as
otherwise expressly provided, the following definitions shall
apply:
"AAA" has the meaning set forth in Section 12.20(a).
"Accounting Firm" means PricewaterhouseCoopers LLP (or,
if such firm shall decline or is unavailable or is not, at the
time of such submission, independent of each of the Parties,
another independent nationally recognized accounting firm
mutually acceptable to the Parties).
"Action" means any action, arbitration, audit, hearing,
complaint, petition, investigation, suit or other proceeding,
whether civil, criminal, administrative, investigative or
informal, in law or in equity, before any arbitrator or
Governmental Entity.
"Adjusted Working Capital" means, as of any date, the
assets of the Company that are identified on SCHEDULE 1 to
EXHIBIT A minus the liabilities of the Company that are
identified on SCHEDULE 1 to EXHIBIT A, which shall be prepared in
accordance with GAAP (except as noted on EXHIBIT A) and in a
manner consistent with the policies and principles used in
preparing the Reference Balance Sheet, after giving effect to the
exclusions and adjustments set forth on EXHIBIT A.
"Affiliate" means, with respect to a specified Person,
a Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common
control with, the specified Person. For the purposes of this
definition, "control" means the power to direct or cause the
direction of the management or policies of such Person, whether
through the ownership of voting securities, by contract or
otherwise.
"Affiliated Group" means any affiliated group as
defined under 1504(a) of the Code or any similar group as
defined under a similar provision of Law.
"Agreement" means this Agreement as amended or
supplemented together with all Exhibits and Schedules attached
hereto or expressly incorporated herein by reference.
"Allocation" has the meaning set forth in Section
7.9(b).
"Approval" means any approval, authorization, license,
permit, consent, qualification, registration or other
authorization, or any extension, modification, amendment or
waiver of any of the foregoing, required to be obtained from any
Governmental Entity.
"Business" means the business of the Company, taken as
a whole, but excluding the Tampa Terminal Facility.
"Business Day" means a day (excluding Saturday and
Sunday) on which banks generally are open for the transaction of
business in New York City.
"Buyer" has the meaning set forth in the Preamble
hereto.
"Buyer DB Plan" has the meaning set forth in Section
6.1(b).
"Buyer DC Plan" has the meaning set forth in Section
6.1(b).
"Buyer Union DC Plan" has the meaning set forth in
Section 6.1(b).
"Buyer Group" has the meaning set forth in Section 7.5.
"Buyer's Representatives" has the meaning set forth in
Section 4.2.
"Closing" has the meaning set forth in Section 2.4(a).
"Closing Date" has the meaning set forth in Section
2.4(b).
"Closing Date Statement" has the meaning set forth in
Section 2.2(c).
"Code" means the Internal Revenue Code of 1986, as
amended.
"Company" has the meaning set forth in the Recitals
hereto.
"Company Benefit Plans" has the meaning set forth in
Section 6.1(d).
"Company Employee" has the meaning set forth in Section
3.1(j)(1).
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"Competing Business" means any of the following: (i)
operation of a terminal that imports Portland cement or slag,
(ii) the sale of Portland cement or slag; or (iii) the operation
of a facility for manufacturing cement.
"Confidentiality Agreement" has the meaning set forth
in Section 4.1.
"Contract" means any legally binding agreement,
contract, obligation, arrangement, purchase and sale order, bond,
commitment, franchise, indemnity, indenture or lease (whether or
not written).
"Disclosure Schedules" means the Schedules dated the
date of this Agreement and delivered contemporaneously herewith
or on or before the Closing Date relating to this Agreement, as
they may be amended from time to time in accordance with the
terms of this Agreement.
"Employee Plans" has the meaning set forth in Section
3.1(j)(3).
"Environmental Laws" means all federal, state, local,
and foreign statutes, regulations, ordinances, and other
provisions having the force or effect of law, all judicial and
administrative orders and binding determinations and all common
law concerning pollution or protection of the environment or the
protection of human health from pollution, including all those
relating to the presence, use, production, generation, handling,
transportation, treatment, storage, disposal, distribution,
labeling, testing, processing, discharge, release, threatened
release, control, or cleanup of any hazardous materials,
substances, or wastes, chemical substances or mixtures,
pesticides, pollutants, contaminants, toxic chemicals, petroleum
products or byproducts, asbestos, polychlorinated biphenyls or
radiation.
"Equity Securities" means any capital stock or other
equity interest or any securities convertible into or
exchangeable for capital stock, or any other rights, warrants or
options to acquire any of the foregoing securities.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
"ERISA Affiliate" has the meaning set forth in Section
3.1(j)(3).
"Estimated Adjusted Working Capital" has the meaning
set forth in Section 2.2(b).
"Exercise Price" has the meaning set forth in Section
5.10.
"E&Y" means Ernst & Young LLP, independent auditors.
"Final Adjusted Working Capital" has the meaning set
forth in Section 2.2(c).
"Final Determination" means the final resolution of
liability for any Tax for a taxable period: (i) by IRS Form 870
or 870-AD (or any successor forms thereto), on the date of
acceptance by or on behalf of the taxpayer, or by a comparable
form under the laws of other jurisdictions, except that a Form
870 or 870-AD or comparable form that reserves (whether by its
terms or by operation of law) the right of the taxpayer to file a
claim for refund and/or the right of the taxing authority to
assert a further deficiency shall not constitute a Final
Determination; (ii)
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by a decision, judgment, decree, or other order by a court of competent
jurisdiction, which has become final and unappealable; (iii) by a
closing agreement or accepted offer in compromise under Section 7121
or 7122 of the Code, or comparable agreements under the laws of
other jurisdictions; (iv) by any allowance of a refund or credit
in respect of an overpayment of Tax, but only after the expiration
of all periods during which such refund may be recovered (including
by way of offset) by the Tax imposing jurisdiction; or (v) by any other
final disposition, including by reason of the expiration of the
applicable statute of limitations or by mutual agreement of the
Parties.
"GAAP" means generally accepted accounting principles
in effect from time to time in the United States, as consistently
applied by Seller.
"Governmental Entity" means any government or any
governmental or quasi-governmental agency, bureau, board,
commission, court, department, official, political subdivision,
tribunal or other instrumentality of any government, whether
federal, state or local, domestic or foreign, or any other Person
exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory or taxing
authority or power of any nature.
"Xxxx-Xxxxx-Xxxxxx Act" means the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, and the related
regulations and published interpretations.
"Included Claims" has the meaning set forth in Section
11.5(a).
"Indemnifiable Claim" means any claim of an
Indemnifiable Loss for or against which any party is entitled to
indemnification under this Agreement.
"Indemnifiable Loss" means any claim, judgment, cost,
damage, disbursement, expense, liability, loss, deficiency,
obligation, Tax, Lien, penalty, fine or settlement of any kind or
nature, including reasonable legal, accounting and other
professional fees and expenses and amounts paid in settlement,
that are actually imposed on or otherwise actually incurred or
suffered by the specified Person.
"Indemnified Party" means the party entitled to
indemnification hereunder.
"Indemnifying Party" means the party obligated to
provide indemnification hereunder.
"Intellectual Property" has the meaning set forth in
Section 3.1(t).
"IRB Indenture" has the meaning set forth in Section
4.10.
"IRS" means the Internal Revenue Service or any
successor entity.
"Law" means any constitutional provision, statute or
other law, rule, regulation, principle of common law, treaty or
interpretation of any Governmental Entity and any Order.
"Leases" has the meaning set forth in Section
3.1(e)(2).
"Lien" means any lien, pledge, charge, equitable
interest, option, mortgage, hypothecation, deed of trust,
security interest, right of first refusal or first offer or
restriction of any kind, including any restriction on use,
voting, transfer, receipt of income or exercise of any
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other attribute of ownership, or other encumbrance, except for any
restrictions on transfer generally arising under any applicable
federal or state securities law.
"Material Adverse Effect" means a material adverse
change in or effect on the business, operations, assets, results
of operations or financial condition of the Company, the Tampa
Grinding Site and the Port Manatee Site, taken as a whole, but
excluding any such effect caused by, resulting from or arising as
a result of any fact, circumstance or condition that (i) is
generally applicable to the industry in which the Company
operates but that does not have a materially disproportionate
effect on the Company, taken as a whole, (ii) is generally
applicable to the United States economy or securities markets,
(iii) is set forth in a Schedule hereto as of the date of this
Agreement, or (iv) except with respect to Approvals and Permits,
results from the execution of this Agreement, the announcement of
this Agreement, the consummation of the transactions contemplated
hereby or the identity of Buyer.
"Material Contract" has the meaning set forth in
Section 3.1(d).
"Multiemployer Plan" has the meaning set forth in
Section 3.1(j)(4).
"Noncompete Period" has the meaning set forth in
Section 5.7(a).
"Nonsolicitation Period" has the meaning set forth in
Section 5.7(b).
"Option" has the meaning set forth in Section 5.10.
"Order" means any binding and enforceable award,
decision, decree, injunction, judgment, order, ruling, subpoena,
assessment or writ issued by a Governmental Entity.
"Original Schedules" has the meaning set forth in
Section 4.4.
"Other Party" has the meaning set forth in Section 7.7.
"Other Taxes" has the meaning set forth in Section
7.2(a).
"Other Tax Returns" has the meaning set forth in
Section 7.1(a).
"Parties" has the meaning set forth in the Preamble
hereto.
"PBGC" means the Pension Benefit Guaranty Corporation
or any successor thereto.
"Permit" means any license, permit, franchise,
certificate of authority or order, or any extension,
modification, amendment or waiver of the foregoing, required to
be issued by any Governmental Entity.
"Permitted Liens" means: (i) Liens for current Taxes
not yet due and payable; (ii) mechanics', materialmen's,
carriers', workers', repairers', maritime and statutory liens and
rights in rem and other similar Liens arising or incurred in the
ordinary and usual course of business for amounts that are not
yet due and payable as of the Closing Date; (iii) zoning,
entitlement and other land use and environmental regulations by
Governmental Entities; (iv) such easements, covenants,
conditions, restrictions, agreements, states of fact, rights of
way and other matters or encumbrances of record that do not
materially adversely affect the current use of the
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real or personal property of the Company; (v) the leases and related
tenancy matters set forth on SCHEDULE 1.1A hereto; and (vi) Liens
reflected in those Material Contracts listed on SCHEDULE 3.1(d).
"Person" means an association, a corporation, an
individual, a partnership, a joint venture, a limited liability
company, a limited liability partnership, a trust or any other
entity or organization, including a Governmental Entity.
"Personal Property" has the meaning set forth in
Section 3.1(f).
"Port Authority Lease" means the Lease Agreement dated
April 27, 1978 between Manatee County Port Authority and the
Company, as amended by the Port Manatee Lease Modification
Agreement, dated May 3, 1990, between Manatee County Port
Authority and the Company and the Port Manatee Lease Modification
Agreement, dated January 20, 2000, between Manatee County Port
Authority and the Company, pursuant to which the Company leases
the Port Manatee Site.
"Port Manatee Site" means the site leased by the
Company pursuant to the Port Authority Lease, located in Port
Manatee, Florida as more fully described on SCHEDULE 1.1B hereto.
"Post-Closing Taxable Period" has the meaning set forth
in Section 7.1(c).
"Pre-Closing Covenants" has the meaning set forth in
Section 11.4.
"Pre-Closing Taxable Periods" has the meaning set forth
in Section 7.1.
"Property" means, collectively or individually, the
Tampa Grinding Site and the Port Manatee Site.
"Proposed Final Adjusted Working Capital" has the
meaning set forth in Section 2.2(c).
"Purchase Price" has the meaning set forth in Section
2.2(a).
"Reference Balance Sheet" means the balance sheet of
the Company at December 31, 2002, a copy of which is attached to
SCHEDULE 3.1(b)(1) hereto.
"Responsible Party" has the meaning set forth in
Section 7.7.
"Xxxxxx Entity" has the meaning set forth in Section
5.8.
"Section 338(h)(10) Election" has the meaning set forth
in Section 7.9(a).
"Securities Act" means the Securities Act of 1933, as
amended.
"Seller" has the meaning set forth in the Preamble
hereto.
"Seller Affiliated Group" has the meaning set forth in
Section 3.1(c)(5).
"Seller DB Plan" has the meaning set forth in Section
6.1(b).
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"Seller DC Plan" has the meaning set forth in Section
6.1(b).
"Seller Group" has the meaning set forth in Section
7.5.
"Seller Marks" has the meaning set forth in Section
5.3(a).
"Seller Patents" has the meaning set forth in Section
5.4.
"Seller's Representatives" has the meaning set forth in
Section 4.2.
"Stock" means the capital stock of the Company.
"Straddle Periods" has the meaning set forth in Section
7.1.
"Subsidiary" means, with respect to any Person, any
Person in which such Person has a direct or indirect equity or
ownership interest in excess of 50%, including all Subsidiaries
of such Subsidiary.
"Supply Contract" means a Portland Cement and New Cem
Supply Contract dated as of the Closing Date, substantially in
the form attached hereto as EXHIBIT B.
"Tampa Grinding Site" means the site owned by Seller,
located in Tampa, Florida as more fully described on SCHEDULE
1.1C hereto.
"Tampa Terminal Facility" means the import terminal
facility owned by Seller, located in Tampa, Florida as more fully
described on SCHEDULE 1.1D hereto.
"Target Adjusted Working Capital" means
U.S.$12,500,000.
"Tax" or "Taxes" means any federal, state, local, or
foreign income, gross receipts, license, payroll, employment,
excise, severance stamp, occupation, premium, windfall profits,
environmental (including taxes under 459A of the Code), customs
duties, capital stock, franchise, profits, withholding, social
security (or similar tax), unemployment, disability, real
property, personal property sales, use, transfer, registration,
value added, alternative or add-on minimum, estimated, or other
tax of any kind whatsoever, including any interest, penalty, or
addition thereto, whether disputed or not and including any
obligations to indemnify or otherwise assume or succeed to the
Tax liability of any other Person.
"Tax Deficiency" means an assessment of Taxes as a
result of a Final Determination.
"Tax Item" shall mean any item of income, gain, loss,
deduction, credit, provisions for reserves, recapture of credit
or any other item which increases or decreases Taxes paid or
payable, including an adjustment under Code Section 481 resulting
from a change in accounting method.
"Tax Refund" shall mean a refund of Taxes as the result
of a Final Determination.
"Tax Return" means any return, declaration, report or
similar statement required to be filed with respect to any Taxes
(including any attached schedules), including any
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information return, claim for refund, declaration of estimated Tax,
and any amendment to any of the foregoing.
"Territory" means the following counties in Florida:
Xxxxxxx, Xxxxxxxxx, Xxxxxxx, De Xxxx, Glades, Hardee, Hendry,
Hernando, Higlands, Hillsborough, Xxx, Manatee, Monroe, Orange,
Osceola, Pasco, Pinellas, Polk, Sarasota and Seminole.
"Union" has the meaning set forth in Section 6.1(a).
"U.S.$" means the lawful currency of the United States
of America.
"WARN" means the Worker Adjustment and Retraining
Notification Act.
ARTICLE II
PURCHASE AND SALE/CLOSING
_________________________
2.1 Purchase and Sale.
______________________
Upon the terms and subject to the conditions
hereinafter set forth, Seller agrees to sell the issued and
outstanding Stock, and to deliver the certificate evidencing the
Stock, to Buyer, and Buyer agrees to purchase such Stock from
Seller, for the consideration hereinafter set forth. The
certificates will be properly endorsed for transfer to or
accompanied by a duly executed stock power in favor of Buyer or
its nominee as Buyer may have directed at least two Business Days
prior to the Closing Date and otherwise in a form acceptable for
transfer on the books of the Company.
2.2 Purchase Price and Adjustments.
___________________________________
(a) Subject to the terms and conditions of this Agreement
(including adjustments to the Purchase Price described in this
Section 2.2), the aggregate purchase price for the Stock shall be
an amount equal to U.S.$122,240,000 (the "Purchase Price"). At
the Closing, the Purchase Price shall be adjusted as provided
herein to reflect the difference between the Target Adjusted
Working Capital and the Estimated Adjusted Working Capital. Any
payments under this Section 2.2 made on the Closing Date shall be
made by wire transfer of immediately available funds in U.S.
Dollars on the Closing Date to an account designated by Seller to
Buyer at least one Business Day prior to the Closing Date.
(b) Not less than two Business Days prior to the Closing Date,
Seller will give to Buyer a good faith estimate of the Adjusted
Working Capital as of the Closing Date, which shall be prepared
in accordance with GAAP (except as noted on EXHIBIT A) and in a
manner consistent with the policies and principles used in
connection with the preparation of the Reference Balance Sheet
(the "Estimated Adjusted Working Capital"). If the Estimated
Adjusted Working Capital is (i) greater than the Target Adjusted
Working Capital, the Purchase Price payable at the Closing will
be increased by the difference between the Estimated Adjusted
Working Capital and the Target Adjusted Working Capital or (ii)
less than the Target Adjusted Working Capital, the Purchase Price
payable at the Closing will be decreased by the difference
between the Estimated Adjusted Working Capital and the Target
Adjusted Working Capital.
(c) Promptly following the Closing Date, but in no event later
than sixty days after the Closing Date, Seller shall prepare and
submit to Buyer a statement (the "Closing Date Statement")
setting forth, in reasonable detail, Seller's calculation of the
Adjusted Working
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Capital as of the Closing Date which shall be prepared in accordance
with GAAP (except as noted on EXHIBIT A) and in a manner consistent with
the policies and principles used in connection with the preparation
of the Reference Balance Sheet (provided, however, that in determining
the Closing Date Statement, the exclusions and adjustments set forth
on EXHIBIT A shall be given effect) (the "Proposed Final Adjusted Working
Capital"). The Closing Date Statement will be accompanied by a
report of E&Y based upon a review of the Closing Date Statement
stating that such statement presents fairly, in all material
respects, the Adjusted Working Capital presented on such
statement as provided for in this Agreement as of the Closing
Date applied in accordance with GAAP (except as noted on EXHIBIT
A) and on a basis consistent with the policies and principles
used in connection with the preparation of the Reference Balance
Sheet after giving effect to the exclusions and adjustments set
forth on EXHIBIT A. All fees and expenses of E&Y in reviewing
the Closing Date Statement shall be borne by Seller. Buyer shall
and shall cause the Company and their respective employees and
agents to assist Seller and E&Y in the preparation of the Closing
Date Statement and shall provide Seller and E&Y access at all
reasonable times to the personnel, properties, books and records
of the Company for such purpose and for the other purposes set
forth in this Section 2.2, in each case, without cost to Seller.
In the event Buyer disputes the correctness of the Proposed Final
Adjusted Working Capital, Buyer shall notify Seller in writing of
its objections within thirty (30) days after receipt of the
Closing Date Statement and shall set forth, in writing and in
reasonable detail, the reasons for Buyer's objections. Buyer
agrees that any adjustments proposed in accordance with the
foregoing will not involve changes in or challenges to Seller's
accounting methodologies, policies or procedures that have been
consistently applied with respect to the Reference Balance Sheet
and the Closing Date Statement and that are identified on EXHIBIT
A. Any proposed adjustments by Buyer shall be accompanied by a
certificate of an independent public accounting firm that is
nationally recognized in the United States (other than the
Accounting Firm), stating that such adjustments are required for
the Closing Date Statement to comply with the accounting
methodologies used in the preparation of the Reference Balance
Sheet after giving effect to the exclusions and adjustments set
forth on EXHIBIT A. If Buyer fails to deliver its notice of
objections within thirty (30) days after receipt of the Closing
Date Statement, Buyer shall be deemed to have accepted Seller's
calculation. To the extent Buyer does not object, in writing in
accordance with and within the time period contemplated by this
Section 2.2(c), to a matter in the Closing Date Statement, Buyer
shall be deemed to have accepted Seller's calculation and
presentation in respect of the matter and the matter shall not be
considered to be in dispute. Seller and Buyer shall endeavor in
good faith to resolve any disputed matters within fifteen days
after receipt of Buyer's notice of objections. If Seller and
Buyer are unable to resolve the disputed matters, Seller and
Buyer shall refer the disputed matters to the Accounting Firm,
and the determination of the Accounting Firm in respect of the
correctness of each matter remaining in dispute shall be
conclusive and binding on Seller and Buyer. The Accounting Firm
shall prepare and deliver to Seller and Buyer a written report
explaining its determination within thirty days after the dispute
has been referred to the Accounting Firm. The determination of
the Accounting Firm shall be based solely on written submissions
by Seller and Buyer and shall not be by independent review. The
Adjusted Working Capital as of the Closing Date, as finally
determined pursuant to this Section 2.2(c) (whether by failure of
Buyer to deliver notice of objection, by agreement of Seller and
Buyer or by determination of the Accounting Firm), is referred to
herein as the "Final Adjusted Working Capital."
(d) If the Final Adjusted Working Capital exceeds the
Estimated Adjusted Working Capital, Buyer shall pay to Seller the
amount of such difference, with simple interest thereon from the
Closing Date to the date of payment at a fixed rate per annum equal
to 3%. If the Estimated Adjusted Working Capital exceeds the Final
Adjusted Working Capital, Seller shall pay to Buyer the amount of
such difference, with simple interest thereon from the Closing
Date to
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the date of payment at a fixed rate per annum equal to
3%. Such payment shall be made in immediately available funds
not later than ten Business Days after the determination of the
Final Adjusted Working Capital by wire transfer to a bank account
designated in writing to the Party entitled to receive the
payment.
(e) Subject to any applicable privileges (including the
attorney-client privilege), Seller shall make available to Buyer and,
upon request, to the Accounting Firm retained in accordance with
Section 2.2(c), the books, records, documents and work papers
underlying the preparation of the Closing Date Statement.
Subject to any applicable privileges (including the attorney-
client privilege), Buyer shall make available to Seller and, upon
request, to the Accounting Firm retained in accordance with
Section 2.2(c), the books, records, documents and work papers
created or prepared by or for Seller in connection with the
review of the Closing Date Statement.
(f) The fees and expenses, if any, of the Accounting Firm
retained in accordance with Section 2.2(c) to resolve any dispute
shall be paid one-half by Buyer and one-half by Seller.
(g) In the event that the Accounting Firm is requested to
resolve any dispute pursuant to this Section 2.2, any hearings in
connection with such dispute resolution shall be held in Herndon,
Virginia.
2.3 Intentionally Omitted.
__________________________
2.4 The Closing.
________________
(a) Unless this Agreement shall have been terminated
pursuant to Article X hereof, the transactions contemplated by this
Agreement shall take place at a closing (the "Closing") to be held
at the offices of O'Melveny & Xxxxx LLP, 0000 Xxxxxx Xxxxxxxxx, Xxxxx
0000, XxXxxx, Xxxxxxxx, or at such other location as may be
agreed upon in writing by Seller and Buyer.
(b) The Closing shall take place at 10:00 a.m. on the
third Business Day following the satisfaction or waiver of the
conditions to the transactions contemplated by this Agreement
contained in Article VIII (other than conditions which, by their
nature, are to be satisfied on the Closing Date), or on such
other date as may be agreed upon in writing by Buyer and Seller
(the date on which the Closing occurs is herein referred to as
the "Closing Date").
(c) All proceedings to be taken and all documents to be
executed and delivered by all Parties at the Closing shall be deemed
to have been taken and executed simultaneously, and no proceedings
shall be deemed taken nor any documents executed or delivered
until all have been taken, executed and delivered.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
______________________________
3.1 Representations and Warranties of Seller.
_____________________________________________
Except as otherwise indicated on the Disclosure
Schedules hereto, Seller represents and warrants as of the date
hereof and as of the Closing Date as follows:
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(a) Organization and Related Matters; Stock.
_______________________________________
(1) Seller is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Maryland
and the Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Florida.
Seller has all necessary corporate power and authority to
execute, deliver and perform this Agreement and the Supply
Contract. The Company has no Subsidiaries. The Company has all
necessary corporate power and authority to own its properties and
assets and to carry on its business as now conducted (including
performing its obligations under all Material Contracts) and is
duly qualified to do business in all jurisdictions in which the
nature of its business requires it to be so qualified, except
where the failure to be so qualified would not reasonably be
expected to have, individually or in the aggregate, a Material
Adverse Effect. Seller has made available to Buyer copies of the
Certificate of Incorporation and Bylaws of the Company as in
effect as of the date hereof. No business activities related to
the Business are currently conducted by the Company at the Tampa
Terminal Facility.
(2) Seller owns, beneficially and of record, all of
the issued and outstanding Stock. Other than the Stock, there are no
outstanding Equity Securities of the Company. All of such Equity
Securities of the Company are owned by Seller free and clear of
any Lien except as set forth on SCHEDULE 3.1(a). The authorized
capital stock of the Company and the number of shares of capital
stock of the Company outstanding is set forth on SCHEDULE 3.1(a).
Except as contemplated hereby, there are no outstanding Contracts
or other rights to subscribe for or purchase, or Contracts or
other obligations to issue or transfer or grant any rights to
acquire, any Equity Securities of the Company. Except as
contemplated hereby, there are no outstanding Contracts of Seller
or the Company to repurchase, redeem or otherwise acquire, or
affecting the voting rights of, or requiring the registration for
sale of, any Equity Securities of the Company. All outstanding
Equity Securities of the Company are duly authorized, validly
issued and outstanding and are fully paid and nonassessable.
There are no preemptive rights in respect of any Equity
Securities of the Company. Seller is not a party to any voting
trust, proxy or other agreement or understanding with respect to
the voting of the Stock.
(b) Financial Statements; Changes.
_____________________________
(1) FINANCIAL STATEMENTS. The financial statements
that are attached hereto as SCHEDULE 3.1(b)(1), consisting of financial
statements at and for the year ended December 31, 2002 (including
the Reference Balance Sheet) were prepared in accordance with
GAAP (except as noted on EXHIBIT A), and present fairly, in all
material respects, the financial position of the Company as at
December 31, 2002 and the results of operations and cash flows of
the Company for the year ended December 31, 2002, on a basis
consistent with such accounting methodologies, policies and
procedures.
(2) CERTAIN CHANGES. Except as set forth on SCHEDULE
3.1(b)(2), from December 31, 2002 to the date hereof, there has not been,
occurred or arisen any change in or event, fact or circumstance
that has had a Material Adverse Effect or a material adverse
effect on the ability of Seller to perform its obligations
hereunder.
(c) Tax Returns.
___________
(1) Except as set forth on SCHEDULE 3.1(c), all material
Tax Returns required to be filed on or prior to the Closing Date by
or on behalf of the Company have been or will be filed prior to
the Closing Date, are complete and accurate in all material
respects and have
11
been prepared in substantial compliance with all applicable laws and
regulations, and all Taxes due or claimed to be due pursuant thereto
(whether or not reflected on any Tax Return) have been or will be
paid prior to the Closing Date.
(2) There are no Liens with respect to any Taxes upon
any of the assets or properties of the Company, other than with respect
to Taxes not yet due and payable.
(3) Except as set forth on SCHEDULE 3.1(c), no extension
of time to file any Tax Return has been granted to the Company. No claim
has ever been made by an authority in any jurisdiction where the
Company does not file Tax Returns that it is or may be subject to
taxation by such jurisdiction. Neither the Company nor Seller
expects any authority to assess any additional Taxes for any
period for which the Tax Returns have been filed.
(4) The Company has withheld and paid all Taxes required
to have been withheld and paid in connection with any amounts paid or
owing to any employee, independent contractor, creditor,
stockholder or other third party.
(5) Except as set forth on SCHEDULE 3.1(c), no material
issue relating to Taxes of the Company (A) has been raised in writing
by any taxing authority in any audit or examination, or (B) is a
material issue with respect to which Seller has knowledge that
would result in a proposed adjustment or assessment by a
Governmental Entity in a taxable period (or portion thereof)
ending on or before the Closing Date.
(6) Except as set forth on SCHEDULE 3.1(c), no audit or
other proceeding by any Governmental Entity has formally commenced and
no written notification has been given to the Company or the
Seller that such an audit or other proceeding is pending or
threatened with respect to any material Taxes due from the
Company or any Tax Return filed by or with respect to the Company
for any material amount of Taxes. Except as set forth on
SCHEDULE 3.1(c), no assessment of Tax has been proposed in
writing against the Company or any of its assets or properties.
No waiver or extension of any statute of limitations is in effect
with respect to Taxes or Tax Returns of the Company. There is no
dispute or claim with any taxing authority concerning any Tax
liability of the Company either (A) claimed or raised by any
taxing authority in writing or (B) as to which Seller has
knowledge.
(7) Except as set forth on SCHEDULE 3.1(c), the Company
has not been a member of an affiliated group filing a consolidated
federal income Tax Return for which any statute of limitations
has not expired (other than a group of which Seller is or was the
common parent (the "Seller Affiliated Group")) and no claim for
liability has been asserted against the Company for the Taxes of
any Person pursuant to Treasury Regulation Section 1.1502-6(a)
(or any similar provision of state, local, or foreign law), as a
transferee or successor, by contract or otherwise, which claim
has not been finally resolved as of the date hereof.
(8) The Company is not (nor has it ever been) a party
to any tax sharing agreement and has not assumed the liability of any
other Person under contract or otherwise.
(9) No member of the Seller Affiliated Group is a party
to any safe harbor lease within the meaning of Section 168(f)(8) of the
Code, as in effect prior to amendment by the Tax Equity and
Fiscal Responsibility Act of 1982.
(10) Neither the Company nor Seller is a "foreign person"
(as that term is defined in Section 1445 of the Code).
12
(11) Neither Seller nor the Company has entered into any
compensatory agreements with respect to the performance of
services for which payment thereunder would result in a
nondeductible expense pursuant to Section 280G of the Code or an
excise tax to the recipient of such payment pursuant to Section
4999 of the Code.
(12) The Company is not a party to any agreement,
contract, arrangement or plan that has resulted or would result,
whether separate from or in the aggregate with the Seller Affiliated
Group, in the payment of any amount that will not be fully
deductible as a result of Section 162(m) of the Code (or any
corresponding provision of state, local or foreign Tax law).
(13) The Company has not agreed, nor is it required to
make, any adjustment under Code Section 481(a) by reason of a change in
accounting method or otherwise.
(14) SCHEDULE 3.1(c) contains an accurate and complete
description of the Company's basis in its assets, the Company's
current and accumulated earnings and profits, the Company's Tax
carryovers, excess loss accounts in the Company group, and any
Tax elections made by any member of the Seller Affiliated Group
affecting the Company.
(15) Neither Seller nor the Company has been a party
to a distribution of stock intended to qualify as a spin-off
transaction under Section 355 of the Code during the past three
years.
(d) Material Contracts.
__________________
SCHEDULE 3.1(d) contains a list, as of the date of this
Agreement, of each Contract (each of which shall be deemed a
"Material Contract") to which the Company is a party (or, with
respect to Contracts to be assigned to the Company by any of its
Affiliates, will prior to the Closing be a party):
(1) that evidences indebtedness of the Company for
borrowed money (other than indebtedness related to trade credit
advanced to the Company in the ordinary course of business in connection
with the purchase of products or services, such as customer
notes) or the guarantee of any indebtedness by the Company;
(2) that is a lease or agreement under which it is
lessee of, or holds or operates, any real property owned by any
other party;
(3) that is a lease or agreement under which it is
lessee of, or holds or operates, any personal property owned by any
other party calling for payments in excess of U.S.$50,000 annually;
(4) that is a lease or agreement under which it is
lessor of or permits any third party to hold or operate any property,
real or personal, owned or controlled by it;
(5) that is a Contract or group of related Contracts
with the same party for the purchase or sale of raw materials,
commodities, supplies, products or other personal property or for
the furnishing or receipt of services: (A) the performance of
which will extend over a period of more than one year following
the date hereof or (B) involves consideration in excess of
U.S.$100,000 over the life of such Contract or more than
U.S.$50,000 in any year;
13
(6) that creates a partnership or joint venture;
(7) that is a license, sublicense or royalty agreement
with respect to Intellectual Property (other than license agreements
with respect to commercially available software) either (x)
calling for payments in excess of U.S.$25,000 annually or (y)
that relate to any trademarks to be owned by the Company as of
the Closing;
(8) that limits the ability of the Company to engage in
any line of business or to compete with any Person; or
(9) whose termination would reasonably be expected to
have a Material Adverse Effect.
Material Contracts shall be deemed not to include the contracts
set forth on SCHEDULE 3.1(j)(2) or SCHEDULE 3.1(j)(3).
Except as set forth on SCHEDULES 3.1(d) hereto, and
other than any such invalidity, failure, breach, default or
waiver, as applicable, which, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse
Effect, (i) each of the Material Contracts is valid, binding, in
full force and effect, and enforceable by the Company in
accordance with its terms; (ii) the Company has performed any
accrued obligations thereunder in all material respects and is
not in breach or default and has not received written notice
alleging a default (other than letters of default that have been
rescinded or with respect to defaults that have been cured or
waived) or breach under any such Material Contract; (iii) the
Company has not modified any of the terms thereof; and (iv) to
the knowledge of the Company, no other party to any Material
Contract is in breach or default thereunder. True copies of the
Material Contracts, including all substantive amendments, waivers
and modifications thereto but excluding information identifying
customers (which will be provided at Closing), have been made
available to Buyer. Except as set forth on SCHEDULE 3.1(d),
consummation of the transactions contemplated by this Agreement
will not require any consent of any party to any Material
Contract (and will not give any Person a right to) terminate or
modify any rights or obligations of the Company under any
Material Contract.
(e) Real Property; Liens.
____________________
(1) The Company does not own or lease, other than
pursuant to a lease that is a Material Contract, any real property
other than the Property and the Tampa Terminal Facility. The Company
or Seller has good, marketable and insurable fee title or leasehold
interest, as applicable, in and to the Property, free and clear
of all Liens except for Permitted Liens. No condemnation or
expropriation proceeding is pending, or to the knowledge of
Seller, threatened against the Property. There are no parties
other than the Company in possession of the Property, except as
described in SCHEDULE 3.1(e). There are no leases, subleases,
licenses, concessions or other agreements, written or oral, to
any party or parties for use or occupancy of any portion of the
Property, except as described on SCHEDULE 3.1(e). To Seller's
knowledge, the Property and the operation of the Business is not
subject to Development of Regional Impact review under applicable
Florida law.
(2) All leases or subleases with respect to the real
property owned or leased by the Company, including all amendments and
modifications in connection therewith, which currently pertain
exclusively to the Business are disclosed on SCHEDULE 3.1(e) (the
"Leases"). The Company has paid all rents and other charges to
the extent due and payable under
14
the Leases, except as otherwise disclosed on SCHEDULE 3.1(e). The Leases
are in full force and effect. The Company is not in default under the
Leases, and to Seller's knowledge, no other party to any of the Leases
is in default thereunder, and there are no circumstances known to
Seller that with the passage of time or the giving of notice
would constitute a default under any of the Leases. No written
notice has been given or received by Seller of any default under
any of the Leases that has not been cured. To Seller's
knowledge, no other party to any of the Leases has any defense to
its obligations under the Leases or has any charge, claim or
right of offset against rent or other charges due under the
Leases. No party has any option to renew or extend any of the
Leases, or to expand or contract the leased premises, or to
purchase or sell the leased premises, except as set forth in the
Leases. No party has exercised in writing any option or right to
extend or renew the Lease beyond its current term, or to expand
the premises leased thereunder, or to purchase or sell the leased
premises or any part thereof, except as disclosed on Schedule
3.1(e). No security deposits are held by the lessor under any of
the Leases, except as disclosed on Schedule 3.1(e) hereof. All
improvements required to be made by either lessor or lessee under
any of the Leases have been completed and Seller has no further
obligation to pay or reimburse any cost or expense in connection
therewith.
(f) Personal Property.
_________________
The Company has good and valid title to, or an adequate
leasehold interest in, all tangible assets and properties that are
used in the Business (except for real property, which is
addressed in Section 3.1(e) above), including all such tangible
assets and properties that it purports to own or have the right to
use as reflected in the Reference Balance Sheet, except for
assets disposed of in the ordinary course of business since
December 31, 2002 (the "Personal Property"), so as to allow the
Business to be conducted as and where currently conducted. The
Personal Property is free of Liens other than Permitted Liens and
the consummation of the transactions contemplated hereby will not
alter or impair such ability in any respect which, individually
or in the aggregate, would reasonably be expected to have a Material
Adverse Effect. Each item of Personal Property that had
an original cost greater than U.S.$50,000 has been maintained in
accordance with normal industry practice.
(g) Authorization; No Conflicts.
____________________________
The execution, delivery and performance by Seller of
this Agreement and the Supply Contract have been duly and validly
authorized by the Board of Directors of Seller and by all other
necessary corporate action on the part of Seller. This Agreement
and, when executed, the Supply Contract constitute, or will
constitute, legally valid and binding obligation of Seller
enforceable against Seller in accordance with their respective
terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws and equitable
principles relating to or limiting creditors' rights generally.
Except for matters identified in SCHEDULE 3.1(g), and any filings
or approvals required under the Xxxx-Xxxxx-Xxxxxx Act, the
execution, delivery and performance by Seller of this Agreement
and the Supply Contract will not (i) violate, or constitute a
breach or default (whether upon lapse of time and/or the
occurrence of any act or event or otherwise) under, the charter
documents or by-laws of Seller or the Company, (ii) result in the
imposition of any Lien against any assets or properties of the
Company, (iii) violate any Law, or (iv) require any Approvals to
be obtained.
(h) Actions.
_______
There is no Order or Action pending or, to the
knowledge of Seller, threatened against Seller or any of its
Affiliates, that questions the validity of this Agreement or any
action
15
taken or to be taken by Seller in connection herewith, or
which seeks to enjoin the consummation of the transactions
contemplated herein. SCHEDULE 3.1(h) sets forth a list of all
pending or, to the knowledge of Seller, threatened Actions to
which the Company is a party or that relate to the Business.
(i) Compliance with Law.
___________________
The Company is operating the Business in material
compliance with all applicable Laws. It is the intent of the
Parties that this representation and warranty is not applicable
to matters relating to Taxes, employee and benefit matters,
environmental matters and permits, which are the subject of
Sections 3.1(c), 3.1(j), 3.1(m) and 3.1(n), respectively.
(j) Employees and Employee Benefit Matters.
______________________________________
(1) SCHEDULE 3.1(j)(1) sets forth a list of all
employees employed by the Company as of the date set forth on such
Schedule by name, position or job title, rate of pay, date of hire,
seniority date (if different) and status, other than those
employees who will be transferred to employment with Seller or an
Affiliate on or prior to the Closing Date and who shall be
separately identified by name and position or job title on
SCHEDULE 3.1(j)(1). The information set forth on SCHEDULE
3.1(j)(1) shall be updated on or prior to the Closing Date to
include employees hired after the date hereof and delete
employees who are no longer employed by the Company as of the
Closing Date. Each such employee set forth on SCHEDULE 3.1(j)(1)
as of the Closing Date, other than those employees who will be
transferred to employment with Seller or an Affiliate on or prior
to the Closing Date, is referred to herein as a "Company
Employee."
(2) Except as set forth on SCHEDULE 3.1(j)(2), with
respect to the Company Employees, (i) neither the Company nor Seller
is a party to any labor or collective bargaining agreement with
respect to the Company Employees and, to the knowledge of Seller,
with respect to any Company Employees not currently covered by
any labor or collective bargaining agreement, there are no
efforts to organize such Company Employees; (ii) there are no
strikes, work stoppages or slowdowns; (iii) there are no unfair
labor practice charges or grievances under any collective
bargaining agreement pending or, to the knowledge of Seller,
threatened in writing against the Company; (iv) the Company is
not a party to any contract of employment that cannot be
terminated at will without notice by and at no expense to the
Company; (v) there are no Actions against the Company pending or,
to the knowledge of Seller, threatened in writing to be brought
or filed against the Company with any Governmental Entity in
connection with the employment of any current or former employee
of the Company or the terms or conditions of the employment of
any current or former employee of the Company; and (vi) to the
knowledge of Seller, the Company is currently in material
compliance with all applicable Laws relating to employment and
employment practices.
(3) SCHEDULE 3.1(j)(3) sets forth a list identifying
each "employee welfare benefit plan," as defined in Section 3(1) of
ERISA, each "employee pension benefit plan," as defined in
Section 3(2) of ERISA, and each other plan or arrangement
providing for insurance coverage (including any self-insured
arrangements), severance, workers' compensation, disability
benefits, fringe benefits, supplemental unemployment benefits,
vacation benefits, retirement benefits, deferred compensation,
profit sharing, bonuses, stock options, stock appreciation
rights, stock purchase or other forms of incentive compensation
or post-retirement insurance, compensation, or benefits which is
maintained, administered, or contributed to by Seller, the
Company or any of their ERISA Affiliates and which covers any
current or former employee, director, officer or independent
contractor of the Company or under which the Company has or will
have any liability. Such plans are referred to in this Section
as the
16
"Employee Plans." Seller has made available to Buyer
accurate and complete copies of (i) each Employee Plan, including
the plan document, trust agreements (or other funding
arrangements) and amendments, (ii) the most recent annual report
(Form 5500 including all schedules thereto) prepared in
connection with any Employee Plan required to file such report
and the most recent financial statements and listing of plan
assets for any Employee Plan required to maintain such
statements, (iii) the most recent actuarial valuation report
prepared in connection with any Employee Plan required to
maintain such report, and (iv) the latest Internal Revenue
Service determination letter obtained with respect to each
Employee Plan intended to be qualified under Section 401(a) or
501(a) of the Code. For purposes of this subsection and Section
6.1, an "ERISA Affiliate" of any Person means any other Person
which, together with such Person, would be treated as a single
employer under Section 414 of the Code. The Company is a
participating employer in the Employee Plans, but does not
sponsor any of such plans, and the Company will not have any
obligation, liability, or responsibility with respect to any of
the Employee Plans on or after the Closing Date. Neither the
Seller, the Company nor any ERISA Affiliate has made any
contract, plan or commitment to create any additional plan or to
modify any existing Employee Plan with respect to the Company
Employees.
(4) Except as set forth on SCHEDULE 3.1(j)(4), no
Employee Plan (i) constitutes a "multiemployer plan," as defined in
Section 3(37) of ERISA (for purposes of this Section, a
"Multiemployer Plan"), (ii) is maintained in connection with a
trust described in Section 501(c)(9) of the Code or welfare
benefit fund described in Section 419 of the Code, or (iii) is
subject to Title IV of ERISA or to the minimum funding standards
of ERISA or the Code. Neither Seller, the Company nor any of
their ERISA Affiliates has incurred any material liability under
Title IV of ERISA arising in connection with the termination of,
or complete or partial withdrawal from, any plan covered or
previously covered by Title IV of ERISA. Neither Seller, the
Company, nor any ERISA Affiliate has withdrawal liability under
any Multiemployer Plan.
(5) There are no accumulated funding deficiencies
as defined in Section 412 of the Code (whether or not waived) with
respect to any Employee Plan. As of the date of the last completed
ERISA annual actuarial funding valuation report prepared in compliance
with applicable regulations for a defined benefit pension plan,
the fair market value of the assets held with respect to each
such Employee Plan which is an "employee pension benefit plan,"
as defined in Section 3(2) of ERISA, exceeded the actuarially
determined present value of all benefit liabilities accrued under
such Employee Plan (whether or not vested) determined using
reasonable actuarial assumptions. Seller, the Company and their
ERISA Affiliates have paid and discharged promptly when due all
liabilities and obligations arising under ERISA or the Code of a
character which if unpaid or unperformed might result in the
imposition of a lien against any of the assets of the Company.
(6) Each Employee Plan that is intended to be qualified
under Section 401 of the Code is so qualified and has been so qualified
since the date of its adoption and each trust forming a part
thereof is exempt from tax pursuant to Section 501(a) of the
Code, and either (i) has received a favorable determination
letter from the Internal Revenue Service to such effect or (ii)
is still within the "remedial amendment period," as defined in
Section 401(b) of the Code and the regulations thereunder.
(7) Each Employee Plan has been maintained in all
material respects in accordance with its terms and with the requirements
prescribed by all applicable Laws, including but not limited to
ERISA and the Code.
17
(8) Neither the Company nor any of its directors,
officers, employees or agents has, with respect to any Employee Plan,
engaged in or been a party to any "prohibited transaction," as
such term is defined in Section 4975 of the Code or Section 406
of ERISA, which could result in the imposition of a material
penalty assessed pursuant to Section 502(i) of ERISA or a tax
imposed by Section 4975 of the Code.
(9) Except as set forth on SCHEDULE 3.1(j)(9), neither
Seller, the Company nor any of their ERISA Affiliates provides post-
retirement medical, health or life coverage or contributes to any
employee welfare benefit plan that provides for medical, health
or life benefit coverage following termination of employment
except as is required by Section 4980B of the Code.
(10) There are no pending claims, suits or other
proceedings, or, to the knowledge of Seller, any threatened claims,
suits or other proceedings, by any employees, former employees or plan
participants or the beneficiaries, spouses or representatives of
any of them, against any Employee Plan, the assets held
thereunder, the trustee of any such assets, or the Company
relating to the Employee Plans, other than ordinary and usual
claims for benefits by participants or beneficiaries. There has
been no "mass layoff" or "plant closing" as defined by WARN by
the Company within six months prior to the Closing Date.
(11) Neither the execution and delivery of this Agreement
by Seller nor the consummation of the transaction contemplated
hereby will result in the acceleration or creation of any rights
of any person to benefits under any of the Employee Plans (other
than the acceleration of vesting under the Seller DB Plans and
the Seller DC Plans) or in the creation of rights under any
severance, parachute or change of control agreement such that any
such person shall have greater rights under any such Employee
Plan than if this Agreement was not consummated.
(k) No Brokers or Finders.
_____________________
No agent, broker, finder, or investment or commercial
banker, or other Person or firm engaged by or acting on behalf of
Seller or any of its Affiliates in connection with the
negotiation, execution or performance of this Agreement or the
transactions contemplated by this Agreement, is or will be
entitled to any broker's or finder's or similar fee or other
commission arising in connection with this Agreement or such
transactions.
(l) Operation in the Ordinary Course.
________________________________
Except as set forth on SCHEDULE 3.1(l), since December
31, 2002, the Company has operated the Business in the ordinary
course and in all material respects in accordance with past
practice.
(m) Environmental Compliance.
________________________
(1) Except as set forth on SCHEDULE 3.1(m):
(i) The Company has complied in all material respects and
the Company is in compliance in all material respects with all
Environmental Laws in connection with the Business;
18
(ii) To Seller's knowledge, each of Seller's corporate
predecessors and Affiliates has complied in all material respects
with all Environmental Laws in connection with the Business
conducted at the Port Manatee Site;
(iii) Each of Seller's corporate predecessors and Affiliates
has complied in all material respects with all Environmental Laws
in connection with the Business conducted at the Tampa Grinding
Site;
(iv) The Company has not received any written notice, report or
other information relating to the Company or property owned or
leased by the Company regarding any (A) actual or alleged
violation of Environmental Laws in connection with the Business,
or (B) liabilities or potential liabilities, including any
investigatory, remedial or corrective obligations, arising under
Environmental Laws in connection with the Business;
(v) To Seller's knowledge, Seller's corporate predecessors
and Affiliates, have not received any written notice, report or other
information relating to any such entity or property owned or
leased by such entity regarding any (A) actual or alleged
violation of Environmental Laws in connection with the Business
conducted at the Port Manatee Site, or (B) liabilities or
potential liabilities, including any investigatory, remedial or
corrective obligations, arising under Environmental Laws in
connection with the Business conducted at the Port Manatee Site;
(vi) Seller's corporate predecessors and Affiliates have not
received any written notice, report or other information relating
to any such entity or property owned or leased by such entity
regarding any (A) actual or alleged violation of Environmental
Laws in connection with the Business conducted at the Tampa
Grinding Site, or (B) liabilities or potential liabilities,
including any investigatory, remedial or corrective obligations,
arising under Environmental Laws in connection with the Business
conducted at the Tampa Grinding Site;
(vii) None of the following exists at any property or
facility owned or operated by the Company: (1) underground
storage tanks, (2) asbestos-containing material in any form or
condition, (3) materials or equipment containing polychlorinated
biphenyls, or (4) landfills, surface impoundments, or disposal
areas;
(viii) The Company has not in connection with the Business
treated, stored, disposed of, arranged for or permitted the
disposal of, transported, handled, or released any substance,
including any hazardous substance (including asbestos, cement
kiln dust, petroleum and petroleum products), or owned or
operated any property or facility in a manner that has given (as
evidenced by written notice received by Seller) or would give
rise to liabilities (including any liability for response costs,
corrective action costs, personal injury, property damage,
natural resources damages or attorney fees) pursuant to the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, the Solid Waste Disposal Act, as amended
or any other Environmental Laws;
(ix) To Seller's knowledge, Seller's corporate predecessors and
Affiliates have not in connection with the Business conducted at
the Port Manatee Site treated, stored, disposed of, arranged for
or permitted the disposal of, transported, handled, or released
any substance, including any hazardous substance (including
19
asbestos, cement kiln dust, petroleum and petroleum products), or
owned or operated any property or facility in a manner that has
given (as evidenced by written notice received by such Person) or
would give rise to liabilities (including any liability for
response costs, corrective action costs, personal injury,
property damage, natural resources damages or attorney fees)
pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, the Solid
Waste Disposal Act, as amended or any other Environmental Laws;
(x) Seller's corporate predecessors and Affiliates have not in
connection with the Business conducted at the Tampa Grinding Site
treated, stored, disposed of, arranged for or permitted the
disposal of, transported, handled, or released any substance,
including any hazardous substance (including asbestos, cement
kiln dust, petroleum and petroleum products), or owned or
operated any property or facility in a manner that has given (as
evidenced by written notice received by such Person) or would
give rise to liabilities (including any liability for response
costs, corrective action costs, personal injury, property damage,
natural resources damages or attorney fees) pursuant to the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, the Solid Waste Disposal Act, as amended
or any other Environmental Laws; and
(xi) Neither this Agreement nor the consummation of the
transaction that is the subject of this Agreement will result in
any obligations for site investigation or cleanup, or
notification to or consent of Governmental Entities, pursuant to
any of the so-called "transaction-triggered" or "responsible
property transfer" Environmental Laws.
(2) Seller has provided to Buyer or its representatives all
written environmental assessments, written environmental audits,
written environmental investigations, written environmental
remediation plans, written environmental correspondence and other
written environmental documents or reports in its possession
relating to the Property or the Company.
(n) Permits.
_______
The Company holds all Permits that are required by any
Governmental Entity to conduct the Business as now conducted.
All Permits held by the Company are valid and in full force and
effect (and, immediately following consummation of the
transactions contemplated by this Agreement, will be valid and in
full force and effect). As of the date hereof, no suspension,
cancellation or termination of any of such Permits is pending or,
to the knowledge of Seller, threatened or imminent. No material
Permit is due to expire in accordance with its terms within 180
days after the Closing Date. The Company, the Business and the
Property are in material compliance with the applicable local
government comprehensive plan and the applicable local
governmental land development code, including zoning and building
codes, laws and ordinances (without reliance on a nonconforming
use). The Company has not received written notice from any
Governmental Entity of any changes in the local government
comprehensive plan or the local governmental land development
code, including zoning and building codes, laws and ordinances
that would reasonably be expected to have a material adverse
effect on the Permits or the Business.
(o) Undisclosed Liabilities.
_______________________
Since December 31, 2002, the Company has not incurred
any liabilities that would be required in accordance with the
accounting principles, policies, practices and methods
20
of the Company to be disclosed on the Reference Balance Sheet, except
liabilities (i) that are disclosed in this Agreement or in
matters set forth on the Schedules hereto or thereto or (ii) that
were incurred after December 31, 2002 in the ordinary course of
business, none of which would have a Material Adverse Effect.
(p) Customers.
_________
SCHEDULE 3.1(p) lists the ten largest customers of the
Company (on a consolidated basis) for each of the calendar year
ended December 31, 2002 (identifying such customers as customers
A-J, without providing the names of, or any other identifying
information with respect to, such customers) and sets forth
opposite each such customer the percentage of consolidated volume
attributable to such customer.
(q) Notes and Accounts Receivable.
_____________________________
All notes and accounts receivable of the Company
outstanding on the Closing Date shall have been generated in the
ordinary course of business and not subject to setoffs or
counterclaims. Attached hereto as SCHEDULE 3.1(q) is an aging of
the notes and accounts receivable of the Company outstanding as
of the date set forth on such Schedule.
(r) Certain Business Relationships with the Company.
_______________________________________________
Except as set forth on SCHEDULE 3.1(r), none of Seller,
its Affiliates, its directors, officers, employees and
shareholders and the Company's directors, officers, employees,
and shareholders is a party to or has entered into a Contract
with the Company (other than employment relationships) within the
past 12 months (other than with respect to administrative and
corporate services such as financial reporting, treasury, tax
compliance, risk management, payroll, cash management, human
resources and benefits administration, legal, information
technology, corporate sponsored training, group purchasing and
other similar services provided by Seller to its operating
company subsidiaries).
(s) Bank Accounts and Powers of Attorney.
____________________________________
Set forth in SCHEDULE 3.1(s) is a list showing the name
and address of each bank in which the Company has an account or
safe deposit box, the number of any such account or any such box
and the names of all Persons authorized (including by power of
attorney) to draw thereon or to have access thereto. Except as
set forth on SCHEDULE 3.1(s), there are no outstanding powers of
attorney executed on behalf of the Company.
(t) Intellectual Property.
_____________________
(1) Except with respect to the Seller Marks,
commercially available software or as set forth on SCHEDULE 3.1(t),
the Company does not own or have the right to use any patents,
copyrights, registered trademarks, registered trade names, domain
names, registered service marks or any applications for
registration of any of the foregoing that are material to the
Business. The patents, copyrights, registered trademarks,
registered trade names, domain names, registered service marks or
any applications for registration of any of the foregoing listed
on SCHEDULE 3.1(t) are referred to as the "Intellectual
Property." The Intellectual Property owned by the Company is
free and clear of all Liens other than Permitted Liens. To the
knowledge of Seller, each registered trademark or patent owned by
the Company or Seller that is included in the
21
Intellectual Property remains in full force and effect at the United
States Patent and Trademark Office.
(2) Except as set forth on SCHEDULE 3.1(t) and subject
to the licenses granted in Sections 5.3 and 5.4 hereof, as of the
Closing Date, the Company will own or have adequate rights to use
all Intellectual Property and trade secrets and know-how that are
material to and used in the Business.
(3) There are no pending or, to the knowledge of Seller,
threatened claims against the Company or Seller alleging that the
conduct of the Business infringes the patent, copyright or
trademark rights of any other Person.
(u) Insurance.
_________
(1) Set forth on SCHEDULE 3.1(u) is a list of each
insurance policy (including material coverage terms), which covers the
Company or its properties, assets or employees. Such policies
are in full force and effect, all premiums thereon have been
paid, and the Company is otherwise in compliance with the terms
and provisions of such policies, except where the failure to be
in compliance would not be reasonably likely to impair coverage
under the applicable policy. Except as set forth on SCHEDULE
3.1(u) each insurance policy set forth on Schedule 3.1(u) is an
"occurrence based" policy.
(2) Following the Closing, the Company will remain a
beneficiary under all insurance policies set forth on SCHEDULE 3.1(u)
for pre-Closing acts or events.
3.2 Representations and Warranties of Buyer.
____________________________________________
Buyer represents and warrants as of the date hereof and
as of the Closing Date as follows:
(a) Organization and Related Matters.
________________________________
Buyer is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction
of its incorporation. Buyer has the necessary corporate power
and authority to execute, deliver and perform this Agreement and
the Supply Contract. Buyer has all necessary corporate power and
authority to carry on its business as now being conducted.
(b) Authorization; No Conflicts.
___________________________
The execution, delivery and performance of this
Agreement and the Supply Contract by Buyer have been duly and
validly authorized by the executive committee of the Board of
Directors of Buyer and by all other necessary corporate action on
the part of Buyer. Approval of the entire Board of Directors of
Buyer is not required in connection with the transactions
contemplated by this Agreement. This Agreement and, when
executed, the Supply Contract constitute, or will constitute,
legally valid and binding obligations of Buyer, enforceable
against Buyer in accordance with their respective terms except as
may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws and equitable principles
relating to or limiting creditors' rights generally. Except for
any filings or approvals required under the Xxxx-Xxxxx-Xxxxxx
Act, the execution, delivery and performance of this Agreement
and the Supply Contract by Buyer, will not (i) violate, or
constitute a breach or default (whether upon lapse of time and/or
the occurrence of any act or event or otherwise) under the
charter documents
22
or by-laws of Buyer or any Contract to which Buyer is a party,
(ii) result in the imposition of any Lien against any assets or
properties of Buyer, (iii) violate any Law, or (iv) require any
Approvals to be obtained.
(c) Actions.
_______
There is no Order or Action pending or, to the
knowledge of Buyer, threatened against or affecting Buyer that
individually or when aggregated with one or more other Orders or
Actions has or could reasonably be expected to have a material
adverse effect on Buyer's ability to perform this Agreement or
the Supply Contract.
(d) Compliance with Law.
___________________
Buyer is operating its businesses in compliance with
all applicable Laws, except for violations of applicable Laws
which could not reasonably be expected to have a material adverse
effect on Buyer's ability to perform this Agreement or the Supply
Contract.
(e) No Brokers or Finders.
_____________________
No agent, broker, finder or investment or commercial
banker, or other Person or firms engaged by or acting on behalf
of Buyer or its Affiliates in connection with the negotiation,
execution or performance of this Agreement or the transactions
contemplated by this Agreement, is or will be entitled to any
broker's or finder's or similar fees or other commissions arising
in connection with this Agreement or such transactions.
(f) Availability of Funds.
_____________________
Buyer currently has access (under existing credit
facilities) to immediately available funds in cash or cash
equivalents, and will at the Closing have immediately available
funds in cash, which are sufficient to pay the Purchase Price, to
provide the Company with sufficient working capital and to pay
any other amounts payable pursuant to this Agreement and to
consummate the transactions contemplated by this Agreement.
(g) Investment Representation.
_________________________
Buyer is aware that the Stock is not registered under
the Securities Act. Buyer is an "accredited investor" as defined
under the Securities Act and possesses such knowledge and
experience in financial and business matters that it is capable
of evaluating the merits and risks of its investments hereunder.
Buyer is acquiring the Stock from Seller for its own account, for
investment purposes only and not with a view to the distribution
thereof. Buyer agrees that the Stock will not be sold,
transferred, offered for sale, pledged, hypothecated or otherwise
disposed of without registration under the Securities Act, except
pursuant to a valid exemption from registration under the
Securities Act.
(h) Knowledge Regarding Representations; Satisfaction of
Conditions.
___________________________________________________________________
As of the date of this Agreement, to the knowledge of
Buyer, (i) there is no inaccuracy or misstatement in, or breach
of, any representation or warranty of Seller contained herein and
(ii) there is no reason why the conditions set forth in Article
VIII hereof would not be satisfied on the Closing Date.
23
ARTICLE IV
COVENANTS WITH RESPECT TO THE PERIOD PRIOR TO CLOSING
_____________________________________________________
4.1 Access.
___________
Subject to applicable Laws and as reasonably necessary
to preserve attorney-client privilege, Seller shall cause the
Company to authorize and permit Buyer and its representatives
(which term shall be deemed to include its independent
accountants and counsel) to have reasonable access during normal
business hours, upon reasonable notice and in such manner as will
not unreasonably interfere with the conduct of the Business or
the other businesses of Seller or its Affiliates, to (i) the Port
Manatee Site (subject to the terms of the Port Authority Lease)
and the Tampa Grinding Site (subject to the terms of any
applicable Leases), (ii) properties, books and records relating
to the Business as Buyer may from time to time reasonably request
and (iii) the officers of the Business, in each case to the
extent necessary or appropriate for the purposes of obtaining any
necessary Approvals of or Permits for the transactions
contemplated by this Agreement and familiarizing Buyer with the
Business; PROVIDED, HOWEVER, nothing in this Section 4.1 shall
obligate Seller to provide Buyer with access to information
identifying the customers of the Company prior to the Closing.
All requests for access to such properties, books and records and
other information shall be made to such of Seller's
representatives as Seller shall designate, who shall be solely
responsible for coordinating and shall coordinate all such
requests and all access permitted hereunder. Any information
provided to Buyer or its representatives in accordance with this
Section shall be subject to the terms of the confidentiality
agreement between Buyer and Seller (the "Confidentiality
Agreement").
4.2 Conduct of Business.
________________________
During the period from the date of this Agreement to
the Closing Date, except as set forth on SCHEDULE 4.2 or
otherwise provided for in, or contemplated by, this Agreement,
Seller agrees that except with the prior consent of Buyer, which
may not be unreasonably withheld or delayed, the Company shall:
(a) conduct the Business in the ordinary course in all
material respects consistent with past practice;
(b) not sell, lease, transfer, or assign any of its
material assets, tangible or intangible, other than for a fair
consideration in the ordinary course of business;
(c) except as required by its terms, not amend in any
material respect or terminate any Material Contract or enter into any
new Material Contract;
(d) not impose any Liens upon any of its material assets,
tangible or intangible, other than Permitted Liens;
(e) not make any capital expenditure (or series of related
capital expenditures) either involving more than U.S.$100,000 or
outside the ordinary course of business;
(f) not make any capital investment in or any acquisition
of the securities or assets of, any other Person (or series of related
capital investments and acquisitions) either involving more than
U.S.$100,000 or outside the ordinary course of business;
24
(g) not issue any note, bond or other debt security or
create, incur, assume or guarantee any indebtedness for borrowed money
or capitalized lease obligation either involving more than
U.S.$10,000 singly or U.S.$100,000 in the aggregate or
indebtedness incurred in the ordinary course consistent with past
practice to be repaid at or prior to the Closing or to be
included in the calculation of Final Adjusted Working Capital;
(h) not cancel, compromise, waive or release any right or
claim (or series of related rights and claims) either involving more
than U.S.$100,000 or outside the ordinary course of business;
(i) not transfer, assign or grant any license or sublicense
of any rights under or with respect to any Intellectual Property
owned by the Company;
(j) not change or authorize any change in the charter or
bylaws of the Company;
(k) not issue, sell or otherwise dispose of any of its
capital stock, or grant any options, warrants or other rights to
purchase or obtain (including upon conversion, exchange, or exercise)
any of its capital stock or permit any transfer to be made of any of
its capital stock (other than pursuant to this Agreement);
(l) not declare, set aside or pay any dividend or make any
distribution with respect to its capital stock (other than a
distribution or dividend in cash) or redeem, purchase or
otherwise acquire any of its capital stock;
(m) except to the extent required by any collective
bargaining agreement or by the terms of employment or consulting
agreements as in effect on the date of this Agreement, not (i)
increase in any material respect the compensation, pension, welfare
or fringe benefits of any of the Company Employees, except for
increases in the ordinary and usual course of business, (ii) enter
into any material new, or amend in any material respect any existing,
severance or change in control plan, or (iii) enter into any
contracts of employment involving annual base compensation in
excess of U.S.$75,000 (other than contracts terminable by Buyer
without liability immediately following the Closing) or with a
term in excess of one year;
(n) not make or pledge to make any charitable or other
capital contribution outside the ordinary course of business consistent
with past practice;
(o) not discharge a material liability or Lien outside the
ordinary course of business;
(p) not make any loans or advances of money outside the
ordinary course of business consistent with past practice; and
(q) not agree to or make any commitment to take any actions
prohibited by this Section 4.2;
provided that, notwithstanding the foregoing, nothing contained
in this Agreement shall give Buyer, directly or indirectly, the
right to control or direct the Company's operations prior to the
Closing Date.
25
Buyer hereby designates the two officers of Buyer or
its Affiliates listed on SCHEDULE 4.2, or such other officers as
Buyer may designate upon written notice to Seller (the "Buyer's
Representatives"), to be responsible for determining whether
consent to any action prohibited by this Section 4.2 shall be
given by Buyer. Seller hereby designates the two officers of
Seller or its Affiliates listed on SCHEDULE 4.2 or such other
officers as Seller may designate upon written notice to Buyer
(the "Seller's Representatives"), to contact Buyer's
Representatives with any requests for consent to any action
prohibited by this Section 4.2. Buyer's Representatives shall
respond promptly in writing to any request for consent to the
taking of any action under this Section 4.2. If Buyer's
Representatives do not respond to any request within three
Business Days of its receipt, such consent will be deemed to have
been given. Seller may rely on any consent given in writing by
either of Buyer's Representatives. The time periods within which
Buyer's Representatives must respond shall commence on the date
on which either of Buyer's Representatives receives a written
request for consent.
4.3 Efforts; No Inconsistent Action.
____________________________________
(a) Subject to the terms and conditions hereof, Buyer and
Seller shall cooperate and use their commercially reasonable efforts
to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable to consummate and
make effective the transactions contemplated by this Agreement
and to cause the conditions to each other's obligation to close
the transactions contemplated hereby as set forth in Article VIII
to be satisfied. In addition, each of Buyer and Seller will be
given notice of and a reasonable opportunity to participate in
contacts with any Governmental Entity regarding antitrust or
merger control matters. Buyer and Seller shall cooperate with
each other to the extent reasonable in connection with the
foregoing.
(b) In furtherance and not in limitation of the foregoing,
Buyer and Seller shall use their commercially reasonable efforts to
file Notification and Report Forms under the Xxxx-Xxxxx-Xxxxxx
Act and similar applications with any other applicable
Governmental Entity whose Approval is required in connection with
the consummation of the transactions contemplated by this
Agreement as promptly as practicable following the date hereof
and in any event no later than five days following the date
hereof. Buyer and Seller shall cooperate and use their
respective commercially reasonable efforts to obtain any
Approvals required for the Closing (including through compliance
with the Xxxx-Xxxxx-Xxxxxx Act), to respond to any requests for
information from a Governmental Entity, and to contest and resist
any Action and to have vacated, lifted, reversed or overturned
any Order (whether temporary, preliminary or permanent) that
restricts, prevents or prohibits the consummation of the
transactions contemplated by this Agreement. Notwithstanding the
foregoing, nothing contained in this Agreement shall be deemed to
require Buyer to dispose of or make any change in any material
portion of its existing business to obtain any Approval (it being
understood that the operations of the Newberry, Florida facility
are a material portion of Buyer's existing business). Buyer
agrees to use its commercially reasonable efforts to secure
clearance under the Xxxx-Xxxxx-Xxxxxx Act with respect to the
transactions contemplated hereby, including agreeing to such non-
material amendments of this Agreement as requested by either the
Federal Trade Commission or the Department of Justice in order to
facilitate such approval process. To the extent permitted by
applicable Law, Buyer and Seller shall provide the other the
opportunity to make copies of all material correspondence,
filings or communications (or memoranda setting forth the
substance thereof) between such party or its representatives, on
the one hand, and any Governmental Entity, on the other hand,
with respect to this Agreement or the transactions contemplated
by this Agreement, except for documents filed pursuant to Item
4(c) of the Xxxx-Xxxxx-Xxxxxx Notification and Report Form or
communications regarding the same or documents or information
submitted in response to any
26
request for additional information or documents pursuant to the
Xxxx-Xxxxx-Xxxxxx Act which reveal Seller's or Buyer's negotiating
objectives or strategies or purchase price expectations. Buyer and
Seller acknowledge that all such information provided pursuant to
the foregoing sentence shall be subject to the mutual nondisclosure
obligations of the Confidentiality Agreement.
(c) Buyer and Seller shall notify and keep the other advised
as to (i) any material communication from the Federal Trade
Commission, the Department of Justice or any other Governmental
Entity regarding any of the transactions contemplated hereby and
(ii) any Action pending and known to such Party or, to its
knowledge, threatened, which challenges the transactions
contemplated hereby. Buyer and Seller shall not take any action
inconsistent with their obligations under this Agreement that
would materially hinder or delay the consummation of the
transactions contemplated by this Agreement.
(d) Prior to the Closing, the Parties shall use commercially
reasonable efforts to obtain (and cooperate with the other Party
hereto in obtaining) all consents, permits, authorizations,
approvals of, and exemptions by, any third party necessary for
the consummation of the transactions contemplated by this
Agreement; provided, however, that neither Party shall have any
obligation to give any guarantee or other consideration of any
nature (other than transfer or filing fees established by the
terms of any Law or Permit) in connection with the receipt of any
waiver, consent, approval or authorization.
(e) All documents required to be filed by any of the Parties
or any of their respective Subsidiaries with any Governmental Entity
in connection with this Agreement or the transactions
contemplated by this Agreement will comply in all material
respects with the provisions of applicable Law.
4.4 Supplemental Disclosure.
____________________________
Seller shall promptly supplement or amend any Schedule
with respect to any matter that arises in the period after the
date of this Agreement and before the Closing Date and which is
required to be set forth or described in the Disclosure
Schedules. Any such supplemental disclosure will be deemed to
have cured any breach of any representation or warranty made in
this Agreement if the Closing occurs (it being understood that
the consummation of the Closing will be deemed to constitute a
waiver of any such breach), but will not be deemed to have been
disclosed as of the date of this Agreement for purposes of
determining whether or not the conditions set forth in Section
8.2 hereof have been satisfied or if the Closing does not occur.
Supplemental disclosure shall, in the aggregate, taken together
with the Schedules accompanying this Agreement when first
executed (the "Original Schedules"), not disclose any state of
affairs having a Material Adverse Effect not disclosed on the
Original Schedules.
4.5 Elimination of Intercompany and Affiliate Liabilities.
__________________________________________________________
Prior to the Closing Date, Seller shall purchase, cause
to be repaid or assume liability for (a) any and all loans or
other extensions of credit made or guaranteed by the Company to
or for the benefit of any director, officer or employee of Seller
who remains a director, officer or employee of Seller after the
Closing Date and (b) any and all loans, banking guarantees or
other extensions of credit of any amount made to or for the
benefit of Seller or any Affiliate of Seller, except as to
clauses (a) and (b) above as set forth on SCHEDULE 4.5. Prior to
the
27
Closing Date, the principal amount of any intercompany loans
payable by or to the Company shall be cancelled.
4.6 Notice of Developments.
___________________________
Between the date of this Agreement and the Closing,
each Party shall promptly notify the other Party in writing if it
obtains "knowledge" (as contemplated in Section 12.12) of the
occurrence or non-occurrence of any event that has caused any
representation or warranty contained in this Agreement to be
untrue or inaccurate in any material respect.
4.7 Assignment of Certain Trademarks.
_____________________________________
On or prior to the Closing Date, Seller shall assign to
Company (a) the entire right, title, and interest throughout the
world in and to the trademarks identified in SCHEDULE 4.7,
including the goodwill of the business in connection with which
the marks have been used, to be held and enjoyed by Company for
its own use and benefit and for the use and benefit of its
parents, subsidiaries, licensees, successors and assigns; and (b)
the right to xxx for past infringement, dilution, and any other
violation of rights in connection with such trademarks. Any and
all recoveries from any suit or settlements in connection
therewith shall belong exclusively to the Company. At the
Company's reasonable request, Seller agrees to provide reasonable
cooperation and assistance to Company in connection with any such
action. On or prior to the Closing Date, Seller shall deliver to
the Company a fully executed and notarized copy of each
assignment agreement in the form attached as EXHIBIT C.
4.8 Exclusivity.
________________
Seller will not (and Seller will cause the Company not
to) (i) solicit, initiate or encourage the submission of any
proposal or offer from any Person relating to the acquisition of
any capital stock or other voting securities, or any substantial
portion of the assets, of the Company (including any acquisition
structured as a merger, consolidation, or share exchange) or (ii)
participate in any discussions or negotiations regarding, furnish
any information with respect to, assist or participate in, or
facilitate in any other manner any effort or attempt by any
Person to do or seek any of the foregoing.
28
4.9 Alternative Real Estate Transfers.
______________________________________
At Buyer's request, Seller will transfer the Tampa
Grinding Facility directly to Buyer or its designee. For
purposes of the representations and warranties and the rights of
the Parties post-Closing under this Agreement, the Tampa Grinding
Site will be treated as if it had been transferred from Seller to
the Company prior to the Closing rather than from Seller to Buyer
or its designee, it being acknowledged that the transfer of the
Tampa Grinding Facility directly to Buyer or its designee shall
not be deemed to modify the provisions of Article VIII hereof.
Any costs and expenses associated with transferring the Tampa
Grinding Facility directly to Buyer or its designee shall be
borne by Buyer to the extent that such costs and expenses would
not otherwise be incurred if the Tampa Grinding Site were
transferred from Seller to the Company. In the event that either
Party elects to transfer the Tampa Grinding Site pursuant to a
like kind exchange under Section 1031 of the Code, the Party not
engaging in the like kind exchange shall indemnify the other
Party for any costs and expenses incurred by such Party as a
result of structuring the transfer as a like kind exchange under
Section 1031 of the Code.
4.10 Industrial Revenue Bonds.
_____________________________
Prior to the Closing, Seller shall, as directed by
Buyer, deposit money with either (i) the trustee under the
indenture relating to the industrial revenue bonds issued by
Hillsborough County that are secured by cement unloading
facilities at the Tampa Grinding Site (the "IRB Indenture") or
(ii) the title company issuing title insurance to Buyer with
respect to the Tampa Grinding Site, sufficient to pay any amounts
required to pay all principal and accrued interest with respect
to such bonds through the first date on which prepayment of such
bonds can be made. It is the intent of the Parties that Seller
shall satisfy the obligations under the IRB Indenture. As such,
Seller shall indemnify and hold Buyer harmless from any
obligations arising under the IRB Indenture (it being
acknowledged that such bonds will not be repaid, and the Liens
related to such bonds will not be released, until such bonds are
repaid after the Closing).
4.11 Manatee County Port Authority.
__________________________________
Promptly following execution of this Agreement, at the
request of Buyer, Seller shall arrange for a meeting between
Seller, Buyer and representatives of the Manatee County Port
Authority in order to introduce Buyer to such representatives of
the Manatee County Port Authority and to permit Buyer to make
reasonable inquiries of such representatives regarding the
relationship between the Company and the Manatee County Port
Authority.
ARTICLE V
CONTINUING COVENANTS
____________________
5.1 Cooperation; Legal Privileges.
__________________________________
(a) After the Closing Date, upon Seller's request (at
Seller's expense) and without necessity of subpoena, Buyer will
cause the Company and their representatives and counsel to cooperate
with Seller and its representatives and counsel for purposes of
permitting Seller to address and respond to any matters that
arise as a result of or otherwise related to Seller's prior
ownership of the Company, whether or not related to this
Agreement, including any assets, liabilities or other matters
related to the Company that are retained by Seller (including
Seller's indemnification obligations under Section 11.1(c)) and
any claims made by or against Seller or any of its Affiliates,
whether involving any Governmental Entity or third party or for
the purpose of preparing or reviewing the Closing Date Statement.
29
(b) Such cooperation under Section 5.1(a) shall include (i)
reasonable access during normal business hours and upon
reasonable notice to Buyer's and its Affiliates' officers,
directors, employees, auditors, counsel, representatives,
properties, books, records, operating instructions and procedures
and, to the extent reasonably requested by Seller in connection
with its indemnification obligations under Section 11.1(c), the
Property, (ii) assisting Seller in connection with any Actions,
including preparation for any Actions such as discovery,
depositions and similar activities, and (iii) the right to make
and retain copies of all pertinent documents and records relating
to any such matters. Buyer's obligations under this Section 5.1
are in addition to Buyer's other obligations to cooperate with
Seller contained in this Agreement.
(c) Seller and Buyer acknowledge and agree that all
attorney-client, work product and other legal privileges that may
exist with respect to the Company related to third party claims as to
which an indemnification claim has been made under Article XI
shall, from and after the Closing Date, be deemed to be joint
privileges of Seller and Buyer. Both Seller and Buyer shall use
all commercially reasonable efforts after the Closing Date to
preserve all such privileges and neither Seller nor Buyer shall
knowingly waive any such privilege without the prior written
consent of the other party (which consent shall not be
unreasonably withheld or delayed).
(d) Buyer agrees to hold all of the books and records
of the Company existing on the Closing Date and not to destroy or
dispose of any thereof for a period of seven years from the
Closing Date or such longer time as may be required by applicable
Law, and thereafter, if it desires to destroy or dispose of such
books and records, to offer first in writing at least sixty days
prior to such destruction or disposition to surrender them to
Seller.
(e) After the Closing Date, upon Buyer's request (at
Buyer's expense) and without necessity of subpoena, Seller will
provide, or will cause to be provided, reasonable access during
normal business hours and upon reasonable notice to Seller and its
Affiliates' employees (i) to assist Buyer in connection with any
Actions relating to Seller's prior ownership of the Company,
including in connection with preparation for any Actions such as
discovery, depositions and similar activities and (ii) to answer
questions of Buyer regarding the Company and the Business or
provide information within their control to Buyer regarding the
Company and the Business; provided that nothing herein shall
require any such Persons to provide information to Buyer that
does not relate exclusively to the Business or the Company.
5.2 Post-Closing Operations.
____________________________
Buyer acknowledges that it is an experienced and
knowledgeable owner and operator of facilities and assets similar
to the Business and will rely on its own expertise in conducting
the Business from and after the Closing. Buyer covenants for the
benefit of Seller to conduct the Business in material compliance
with all applicable Laws from and after the Closing.
5.3 Use of Certain Seller Trademarks.
_____________________________________
(a) Subject to the terms of this Section 5.3, Seller
hereby grants to Buyer a non-exclusive, non-transferable, non-
sublicenseable right to use the trademarks set forth on SCHEDULE
5.3 (the "Seller Marks"). Buyer acknowledges and agrees that,
other than as provided for in this Section 5.3, it is not
obtaining any rights or licenses with respect to any name, marks,
logo, trade dress or design owned by Seller or its Affiliates.
Buyer shall cease and shall cause the Company to cease any and
all use of the Seller Marks as soon as practicable after the
Closing Date, but not more than thirty days after the Closing
Date; PROVIDED, HOWEVER, that with respect to
30
stationery, contracts, purchase orders, agreements and other business
forms and writings which could result after the Closing Date in a legal
commitment of Seller or any of its Affiliates, Buyer shall cease
and shall cause the Company to cease within ten Business Days
after the Closing Date any use of the Seller Marks.
(b) Buyer may use the Seller Marks for the time period
provided in Section 5.3(a) but only to the extent and in the manner
used by the Company in connection with the Business as operated by the
Company immediately prior to the Closing Date and any such use
shall be in accordance with all applicable Laws, conform to at
least the standards of quality prevailing in the Business as of
the date hereof, and not be offensive, disparaging or misleading
as to the origin or quality of the services provided in the
Business. Any such use shall also be subject to Seller's
trademark quality control and usage guidelines then in effect.
In no event may Buyer use the Seller Marks, directly or
indirectly, in any way that would jeopardize, dilute or otherwise
adversely affect the Seller Marks and Buyer shall not attack,
dispute or challenge (nor aid or encourage others to do so)
Seller's exclusive right, title and interest in and to the Seller
Marks, or the validity of the Seller Marks.
(c) As soon as reasonably practicable, but in any event not
later than ninety days after the Closing Date, Buyer shall cause
the Company to change its corporate, popular, fictitious
business, trade and domain names and any similar designations to
new names that do not include a Seller Xxxx and are not similar
in appearance, sound or commercial impression to a Seller Xxxx
and thereafter shall not use and shall cause the Company not to
use or include any of the Seller Marks or a name similar in
appearance, sound or commercial impression to a Seller Xxxx as or
in its corporate, popular, fictitious business, trade or domain
name or in any similar designation.
(d) Subject to the provisions of Sections 5.3(a) and (b)
above, Buyer agrees, on behalf of itself and its Subsidiaries, not to
use or seek to register any trade name, service xxxx, trademark
or domain name that contains or is similar in appearance, sound
or commercial impression to any of the Seller Marks. Buyer
agrees, on behalf of itself and its Subsidiaries, that it will
never directly or indirectly challenge, contest or call into
question or raise any questions concerning the validity or
ownership by Seller of any Seller Xxxx, any registration or
application for registration of any Seller Xxxx or any domain
name application or registration containing any Seller Xxxx.
Buyer agrees that nothing herein shall give Buyer or the Company
any right to or interest in any Seller Xxxx except the right to
use the same in accordance with the terms of this Agreement, and
that any and all uses of the Seller Marks by Buyer or the Company
and all goodwill arising therefrom shall inure to the benefit of
Seller.
5.4 Use of Certain Seller Patents
__________________________________
(a) Subject to the terms of this Section 5.4, Seller
hereby grants to Buyer a non-exclusive, non-transferable, non-
sublicenseable, royalty-free right under the patents set forth on
SCHEDULE 3.1(t) (the "Seller Patents"), solely in connection with
operating, repairing and replacing the dust collection system and
apparatus for automatically placing bags at the Tampa Grinding
Site or Port Manatee Site, until the expiration of the Seller
Patents. Without limiting the foregoing, Buyer may only use the
methods covered by the Seller Patents at the Tampa Grinding Site
and the Port Manatee Site (or to any site in the same geographic
region to which the Company's facilities may be relocated after
the Closing in connection with the closing of an existing
facility) and only to the extent and in the manner used by the
Company in connection with the Business as operated by the
Company immediately prior to the Closing Date in accordance with
all applicable Laws. In no event may Buyer use the Seller
Patents, directly or
31
indirectly, in any way that would jeopardize, dilute or otherwise
adversely affect the Seller Patents and Buyer shall not attack,
dispute or challenge (nor aid or encourage others to do so) Seller's
exclusive right, title and interest in and to the Seller Patents
or the validity of the Seller Patents. The Company may transfer
the license granted hereunder or issue a non-exclusive,
non-transferable, non-sublicenseable, royalty-free sublicense to
any Person that acquires substantially all the assets of the Tampa
Grinding Site or the Port Manatee Site.
(b) If Buyer commits any material breach of any of its
obligations under this Section 5.4, Seller shall give Buyer
written notice of such breach, specifying the nature of the
breach. If within thirty (30) days from receipt of such notice
Buyer has not cured such breach, Seller may terminate the license
granted under this Section 5.4 upon ten (10) days' written notice
to Buyer.
(c) If any Party believes there has been any third party
infringement related to the Seller Patents, such Party shall
immediately notify the other Party and provide such information
as is available to confirm such infringing activity. Seller
shall have the right (but not the obligation) to take any action
that it deems appropriate to terminate the infringing activity
(including the initiation of legal proceedings, settlement
discussions and/or sublicense negotiations), in which case Buyer
shall provide Seller with all reasonable assistance in connection
therewith (including being joined as a named party in any legal
proceeding). Any damages received by Seller, Buyer or the
Company in connection with any such actions shall be for the
benefit of Seller and, to the extent not paid directly to Seller,
shall be remitted promptly to Seller.
5.5 Acknowledgment of Limitation of Warranties.
_______________________________________________
(a) Buyer is an informed and sophisticated participant in
the transactions contemplated hereby and has undertaken such
investigation as it has deemed necessary in connection with the
execution, delivery and performance of this Agreement. Buyer
hereby acknowledges and agrees that except as expressly set forth
in this Agreement, the Stock, the Business and the assets and
liabilities of the Company are transferred "AS IS," "WHERE IS"
AND, SUBJECT TO THE REPRESENTATIONS AND WARRANTIES CONTAINED IN
SECTION 3.1, WITH ALL FAULTS AND WITHOUT ANY OTHER REPRESENTATION
OR WARRANTY OF ANY KIND OR NATURE WHATSOEVER, EXPRESS OR IMPLIED,
ORAL OR WRITTEN, AND IN PARTICULAR, WITHOUT ANY IMPLIED WARRANTY
OR REPRESENTATION AS TO (A) CONDITION, VALUE, MERCHANTABILITY OR
FITNESS OR SUITABILITY FOR ANY SPECIFIC PURPOSE AS TO ANY OF THE
ASSETS OR PROPERTIES OF THE BUSINESS, (B) THE OPERATION OF THE
BUSINESS BY BUYER AFTER THE CLOSING IN ANY MANNER OTHER THAN AS
USED AND OPERATED BY SELLER OR (C) THE PROBABLE SUCCESS OR
PROFITABILITY OF THE OWNERSHIP, USE OR OPERATION OF THE BUSINESS
OR ASSETS OF THE COMPANY BY BUYER AFTER THE CLOSING.
(b) Buyer acknowledges and agrees that except for the
representations and warranties contained in Section 3.1 of this
Agreement, neither Seller nor any of its Affiliates, officers,
directors, employees, agents, representatives, nor any other
Person, makes or shall be deemed to make any representation or
warranty to Buyer, express or implied, at law or in equity, on
behalf of Seller with respect to the Stock, the Business, the
assets or liabilities of the Company, or otherwise, including
with respect to any other information provided to Buyer, whether
on behalf of Seller or such other Persons. Seller hereby
disclaims any representation or warranty except for the
representations and warranties contained in Section 3.1 of this
Agreement
32
whether by Seller, or any of its Affiliates, officers, directors,
employees, agents, representatives or any other Person,
notwithstanding the delivery or disclosure to Buyer or any of its
officers, directors, employees, agents or representatives or any
other Person of any documentation or other information by Seller
or any of its Affiliates, officers, directors, employees, agents,
representatives or any other Person. In furtherance of the
foregoing, Buyer acknowledges and agrees that no Action may be
brought by or on behalf of Buyer or any other Person against Seller
or any other Person, and neither Seller nor any other Person will
have or be subject to any liability or indemnification obligation
to Buyer or any other Person, based on representations and
warranties other than the representations and warranties contained
in Section 3.1 of this Agreement or resulting from the distribution
to Buyer, or Buyer's use of, any information provided to Buyer,
including any information, projections, documents or material made
available to Buyer at any time in certain "data rooms," management
presentations, "break-out" discussions, responses to questions
submitted on behalf of Buyer, whether orally or in writing, or in
any other form in expectation or furtherance of the transactions
contemplated by this Agreement.
5.6 Insurance Matters.
______________________
Buyer acknowledges and agrees that, from the Closing
Date, neither Buyer, the Company, the assets and operations of
the Company, nor the directors, officers, and employees of the
Company (including the Company Employees) will be covered under
any property/casualty insurance policies (including workers'
compensation policies) maintained by Seller or its Affiliates.
5.7 Noncompetition and Nonsolicitation
_______________________________________
(a) Seller hereby agrees that for the period beginning as
of the Closing Date and continuing up to and including the fifth
anniversary of the Closing Date (the "Noncompete Period"), Seller
shall not, and shall not cause or permit any of its Affiliates
to, (i) engage in a Competing Business in the Territory or (ii)
have any direct or indirect interest, whether as an investor,
lender, partner, stockholder, trustee or consultant, in, or
provide substantial assistance to, any corporation, partnership
or other business entity or enterprise (wherever located) which
engages in a Competing Business in the Territory; provided that
in the event the Option is not exercised nothing herein shall,
for the avoidance of doubt, restrict the ownership of the Tampa
Terminal Facility by Seller or any of its Affiliates or the
operation of the Tampa Terminal Facility by any Person other than
Seller or any of its Affiliates; and provided further that
nothing herein shall restrict the ability of Seller or any of its
Subsidiaries from engaging in the following activities during the
Noncompete Period:
(1) sales of Portland cement and slag into the
Territory from the terminal located in Jacksonville, Florida, in
an amount not to exceed 25,000 short tons in the first year of the
Noncompete Period, 25,000 short tons in the second year of the
Noncompete Period, 50,000 short tons in the third year of the
Noncompete Period, 50,000 short tons in the fourth year of the
Noncompete Period or 75,000 short tons in the fifth year of the
Noncompete Period; or
(2) the ownership of capital stock or other equity
interests of any Person (wherever located) which engages in a
Competing Business if (a) such capital stock or other equity interests
are publicly traded, and (b) Seller, directly or indirectly, is the
beneficial owner of not more than five percent (5%) of such
Person's outstanding capital stock or other equity interests, so
long as Seller does not control such Person; or
33
(3) the acquisition and continued operation of any
Person or assets or business (wherever located) which conducts,
participates or engages in, or owns or has an interest in a
Competing Business.
(b) During the period beginning as of the Closing Date and
continuing up to and including the first anniversary of the
Closing Date (the "Nonsolicitation Period"), Seller shall not,
and shall not cause or permit any of its Subsidiaries or their
executive officers to, solicit for employment with Seller or any
of its Subsidiaries any Person then employed by the Company or
Buyer and who was also employed by the Company or Buyer on the
Closing Date; provided, however, that the foregoing shall not
restrict or preclude Seller or its Subsidiaries or their
executive officers from making generalized searches for employees
by use of advertisements in the media (including trade media and
the internet) or by engaging search firms which are not focused
on employees of the Company or Buyer.
(c) Notwithstanding anything in this Section 5.7 to the
contrary, if at any time a court holds that the restrictions
stated in Section 5.7(a) or Section 5.7(b) are unreasonable or
otherwise unenforceable under circumstances then existing, the
Parties agree that the maximum period, scope or geographical area
determined to be reasonable under such circumstances by such
court will be substituted for the stated period, scope or area.
Seller acknowledges and agrees that money damages may not be an
adequate remedy for any breach or threatened breach of the
provisions of Section 5.7(a) or Section 5.7(b) and that, in such
event, Buyer or its successors or assigns may, in addition to any
other rights and remedies existing in its favor, apply to any
court of competent jurisdiction for specific performance,
injunctive and/or other relief in order to enforce or prevent any
violations of the provisions of this Section 5.7). Any
injunction shall be available without the posting of any bond or
other security. In the event of a violation by Seller of any of
the provisions of this Section 5.7 (as finally determined by a
court of competent jurisdiction), the Noncompete Period or
Nonsolicitation Period, as the case may be, will be tolled until
such violation ceases. Seller agrees that the restrictions
contained in this Section 5.7 are reasonable in all respects.
5.8 Certain Bagging Arrangements
_________________________________
During the period beginning as of the Closing Date and
continuing up to and including the second anniversary of the
Closing Date, Seller shall not, and shall not cause or permit any
of its Subsidiaries to (i) sell Portland cement (Type I or Type
II) in Miami-Dade County in bag form or (ii) enter into any
arrangement with Xxxxxx Group Limited or any of its Subsidiaries
(a "Xxxxxx Entity") to have a Xxxxxx Entity sell, in Miami-Dade
County, Portland cement (Type I or Type II) manufactured by a
Xxxxxx Entity using bags that employ a trademark or tradename
with the name `Lafarge' on it; provided that the foregoing shall
not limit any operations of Seller or its Subsidiaries in the
event that Seller or one of its Subsidiaries acquires all or part
of any Xxxxxx Entity that sells Portland cement in Miami-Dade
County.
5.9 Financial Statements
_________________________
Upon Buyer's request, Seller shall, and shall cause its
independent accountants to, reasonably cooperate with Buyer and
the Company (and Buyer's independent accountants and internal
accountants) in the preparation of any audited financial
statements of the Company for any annual period, and unaudited
financial statements of the Company for any interim period,
ending on or after the Closing Date but including any annual or
interim periods commencing before the Closing Date, it being
acknowledged that the cost of the accounting firm preparing and
certifying such financial statements shall be borne by Buyer.
34
5.10 Option to Purchase Tampa Terminal Facility
_______________________________________________
(a) Seller hereby grants to Buyer an irrevocable option
(the "Option") to purchase the Tampa Terminal Facility. The Option
shall be exercisable at any time between the Closing Date until
and including the sixtieth day after the Closing Date. From the
date hereof until the end of the period during which the Option
is exercisable, Seller shall not directly or indirectly sell,
assign, transfer, pledge, encumber or otherwise dispose of, or
enter into any contract with respect to the sale, assignment,
transfer, pledge or other disposition of, of the Tampa Terminal
Facility. The Option shall be exercisable for an exercise price
of U.S.$10.00 (the "Exercise Price"). The Option may be
exercised on only one occasion. The exercise of the Option shall
be effected by Buyer executing and delivering to Seller a notice
indicating its desire to exercise the Option, which notice shall
indicate the date, time and place of the closing, which shall be
no less than five (5) Business Days nor more than ten (10)
Business Days after the date such notice is received by Seller.
At the closing of the purchase of the Tampa Terminal Facility,
Buyer will pay to Seller in immediately available funds an amount
equal to the Exercise Price. Simultaneously with the delivery of
the Exercise Price, Seller will deliver to Buyer or its designee
a special warranty deed with respect to the Tampa Terminal
Facility conveying the Tampa Terminal Facility to Buyer or its
designee free and clear of Liens securing indebtedness for
borrowed money.
(b) Buyer hereby acknowledges that the representations and
warranties of Seller in this Agreement do not relate, expressly
or by implication, to the Tampa Terminal Facility, which, for
purposes of this Agreement, is not part of the Business or the
assets or liabilities of the Company.
(c) Buyer hereby acknowledges and agrees that if the Option
is exercised, the Tampa Terminal Facility will be transferred "AS
IS," "WHERE IS" AND WITH ALL FAULTS AND WITHOUT ANY
REPRESENTATION OR WARRANTY OF ANY KIND OR NATURE WHATSOEVER,
EXPRESS OR IMPLIED, ORAL OR WRITTEN, AND IN PARTICULAR, WITHOUT
ANY IMPLIED WARRANTY OR REPRESENTATION AS TO CONDITION, VALUE,
MERCHANTABILITY OR FITNESS OR SUITABILITY FOR ANY SPECIFIC
PURPOSE AS TO THE TAMPA TERMINAL FACILITY.
(d) Subject to applicable Laws, Seller shall authorize and
permit Buyer and its representatives to have reasonable access
during normal business hours, upon reasonable notice and in such
manner as will not unreasonably interfere with the conduct of the
businesses of Seller or its Affiliates or the operations or
functioning of any systems located at the Tampa Terminal
Facility, to the Tampa Terminal Facility from and after the date
of this Agreement until the earlier of (i) the purchase of the
Tampa Terminal Facility pursuant to the Option or (ii) the
expiration of the time period to exercise the Option. All
requests for access shall be made to such of Seller's
representatives as Seller shall designate, who shall be solely
responsible for coordinating and shall coordinate all such
requests and all access permitted hereunder. Seller reserves the
right to condition such access on being afforded the right to
accompany Buyer or its representatives during its access to the
Tampa Terminal Facility. Subject to the foregoing, Buyer shall
be entitled to conduct or cause to be conducted (at its expense)
such non-invasive assessments, audits and tests and such
structural and other physical inspections as Buyer shall deem
necessary or useful in connection with its acquisition of the
Tampa Terminal Facility. In conducting its testing and
inspection, Buyer and its representatives shall comply with all
applicable Laws, maintain customary and appropriate insurance
coverage, not unreasonably interfere in the conduct of the
businesses of Seller or its Affiliates and restore the property
to its condition prior to such tests or inspections. Buyer shall
indemnify and hold Seller harmless for
35
any losses incurred by Seller or its Affiliates, arising out of the
testing or inspection by Buyer and its representatives, including the
failure to comply with the immediately preceding sentence.
ARTICLE VI
EMPLOYEES AND EMPLOYEE BENEFIT MATTERS
______________________________________
6.1 Employee and Employee Benefit Matters.
__________________________________________
(a) Effective as of the Closing Date, the Company shall
assume and be solely responsible for any and all obligations of Seller
under the collective bargaining agreement with Allied-Industrial,
Chemical and Energy Workers (PACE) International Union and Local
3-0130 (the "Union"), which covers those Company Employees
represented by the Union; provided, however, that nothing
contained in this Section 6.1(a) shall be deemed to limit the
representations and warranties of Seller in Article III hereof.
(b) Effective as of the Closing Date, the Buyer shall
establish or make available (i) for those Company Employees who are
represented by the Union, a defined benefit pension plan (the
"Buyer DB Plan") that is substantially similar to the Lafarge
North America Inc. Pension Plan for Hourly Compensated Employees
(Tampa) (the "Seller DB Plan") and a defined contribution plan
(the "Buyer Union DC Plan") as required pursuant to the
collective bargaining agreement with the Union (the "Seller DC
Plan"), and (ii) for those Company Employees who are not
represented by the Union, a defined contribution plan that
provides benefits that are substantially similar to those
benefits provided to employees of the Buyer and its Affiliates
under the Florida Rock Industries, Inc. Profit Sharing and
Deferred Earnings Plan or such other defined contribution plan of
Buyer, the Company or its Affiliates that provides benefits to
similarly situated employees of the Buyer and its Affiliates (the
"Buyer DC Plan"). The Buyer DB Plan and the Buyer Union DC Plan
shall provide service credit to each Company Employee represented
by the Union equal to the service that was credited to the
Company Employee under the Seller DB Plan or Seller DC Plan, as
applicable, for purposes of eligibility, vesting, level of
benefits, and benefit accrual; provided, however, that benefits
accrued for each Company Employee under the Buyer DB Plan shall
be reduced by the benefits accrued as of the Closing Date for
such Company Employee under the Seller DB Plan. Seller shall
provide to Buyer within 60 days following the Closing Date a
schedule of benefits accrued by the Company Employees as of the
Closing Date under the Seller DB Plan, which schedule shall
comply with the terms of the collective bargaining agreement as
of the Closing Date. The Buyer DC Plan shall provide service
credit to each Company Employee equal to the service that was
credited to the Company Employee under the Lafarge North America
Inc. Thrift Savings Plan for purposes of eligibility and vesting.
Buyer agrees to provide or cause the Company to provide on an
annual basis to each Company Employee listed on SCHEDULE 6.1(b)
completing a full year of employment a profit sharing
contribution or substantially similar benefit that, when combined
with the discretionary profit sharing contribution that is made
for such employee under a tax-qualified defined contribution plan
of the Buyer or an ERISA Affiliate, is equal to at least 14
percent of such Company Employee's total compensation during each
year of employment with the Company or its Affiliates. Seller
agrees to provide Buyer with such information as may be
reasonably necessary to determine the service to be credited to
the Company Employees in accordance with this Section 6.1(b).
Seller shall take all such action as may be necessary and
appropriate to fully vest the Company Employees in their accrued
benefits under the Seller DB Plan and the Lafarge North America
Inc. Retirement Plan and their account balances under the Seller
DC Plans as of the Closing Date.
36
(c) With respect to those Company Employees not represented
by the Union, for a period of one year following the Closing Date,
Buyer shall provide or cause the Company to provide each such
Company Employee with an annual salary or hourly wage that is at
least equal to such employee's annual salary or hourly wage with
the Company immediately prior to the Closing Date, which annual
salary or hourly wage is set forth on SCHEDULE 3.1(j)(1), and,
except as provided in Section 6.1(b), with employee benefit
plans, programs and policies and fringe benefits that are
substantially comparable to those employee benefit plans,
programs and policies and fringe benefits that the Buyer provides
to similarly situated employees. With respect to those Company
Employees represented by the Union, the wages, benefits and other
terms and conditions of employment shall be governed by the terms
of the collective bargaining agreement covering such employees.
Effective as of the Closing Date, all Company Employees shall
cease to participate in and accrue benefits under Seller's and
its ERISA Affiliates' Employee Plans. Except as provided in
Sections 6.1(b) and 6.1(c) or in any collective bargaining
agreement, nothing contained in this Agreement shall be deemed to
limit Buyer's right to terminate any Company Employee in Buyer's
discretion at any time or alter the terms and conditions of
employment of any Company Employee; provided, however, that the
Company shall not involuntarily terminate the employment of any
of the Company Employees not represented by the Union for at
least six months after the Closing Date, except for cause.
(d) From and after the Closing Date, Buyer shall cause
the service of each Company Employee with the Company and its ERISA
Affiliates prior to the Closing Date to be recognized for
purposes of eligibility, vesting, level of benefits, and benefit
accrual (including level of benefits and benefit accrual under
any vacation and severance pay plans, policies or arrangements),
under each compensation, vacation, fringe or other welfare
benefit plan, program or arrangement of Buyer, the Company or any
of their ERISA Affiliates (collectively, the "Company Benefit
Plans") in which any Company Employee is or becomes eligible to
participate. From and after the Closing Date, with respect to
each Company Benefit Plan that is an "employee welfare benefit
plan" as defined in Section 3(1) of ERISA in which any Company
Employee is or becomes eligible to participate, Buyer shall cause
each such Company Benefit Plan to (i) waive all limitations as to
pre-existing conditions, waiting periods and exclusions with
respect to participation and coverage requirements applicable
under such Company Benefit Plan to the same extent that such pre-
existing conditions, waiting periods and exclusions would not
have applied or would have been waived under the corresponding
Employee Plan in which such Company Employee was a participant
immediately prior to his commencement of participation in such
Company Benefit Plan and (ii) provide each Company Employee with
credit for any co-payments and deductibles paid by such Company
Employee in the plan year in which the Closing occurs in
satisfying any applicable co-payment or deductible requirements
under such Company Benefit Plan for the applicable plan year.
(e) As soon as reasonably practicable after the Closing
Date, with respect to each Company Employee who is a participant in a
Seller DC Plan, Seller shall (i) provide each such employee with
the right to receive a distribution of such employee's vested
interest under the applicable Seller DC Plan and an election to
roll over such employee's vested interest in the applicable
Seller DC Plan to a Buyer DC Plan in accordance with Section 402
of the Code, and (ii) cause the trustee of the applicable Seller
DC Plan to roll over the vested interest which the Company
Employee elects to roll over to a Buyer DC Plan. Buyer shall
take or cause the Company to take all such action as may be
necessary or appropriate (including amending the Buyer DC Plans
if necessary) to permit the Company Employees to roll over their
vested interests in the Seller DC Plans to a Buyer DC Plan.
Buyer will cooperate or cause the Company to cooperate with
Seller in providing information to the Company Employees
regarding rollovers of their interests from the applicable Seller
DC Plan to a Buyer DC Plan.
37
(f) Seller's welfare benefit plans applicable to the Company
Employees shall be responsible for all claims incurred by the
Company Employees prior to the Closing Date. The Company Benefit
Plans applicable to the Company Employees shall be responsible
for all claims incurred by the Company Employees on and after the
Closing Date. A claim shall be deemed to have been incurred when
the medical or other service giving rise to the claim is
performed, except that in the case of death, a claim shall be
deemed to have been incurred on the date of death and in the case
of disability, with the first occurrence of the injury or illness
resulting in the disability. The Company Employees receiving
disability benefits as of the Closing Date shall continue to
receive benefits from plans sponsored by Seller while the
disability continues or until their eligibility otherwise expires
as provided in such plans.
(g) Buyer shall be responsible and liable for providing the
appropriate notices and "continuation coverage" benefits on or
after the Closing Date under Buyer's group health plans to all
Company Employees and "qualified beneficiaries" of those
employees, for whom a "qualifying event" occurs on or after the
Closing Date. Seller shall be responsible and liable for
providing the appropriate notices and "continuation coverage"
benefits under Seller's group health plans (i) for any
"qualifying event" which occurs prior to the Closing Date, and
(ii) to those employees of the Company who will be transferred to
employment with Seller or an Affiliate on or prior to the Closing
Date as separately identified on SCHEDULE 3.1(j)(1) and
"qualified beneficiaries" of such employees, for whom a
"qualifying event" occurs on or after the Closing Date. The
terms "continuation coverage," "qualified beneficiaries" and
"qualifying event" shall have the meaning ascribed to them under
Section 4980B of the Code and Sections 601 through 608 of ERISA
and the regulations thereunder.
ARTICLE VII
TAX MATTERS
___________
7.1 Tax Returns.
________________
All Tax Returns for all taxable periods ending on or
before the Closing Date ("Pre-Closing Taxable Periods") and for
all taxable periods that include but do not end on the Closing
Date, but including for this purpose with respect to federal
income and state and local combined, consolidated and unitary
corporate income Tax Returns the final taxable year of the
Company for federal income tax purposes ("Straddle Periods"),
filed after the Closing Date, shall be filed on a timely basis
(including extensions) by the party responsible for such filing
under this Article VII. The party responsible under this Article
VII for such preparation shall make all decisions relating to the
preparation of Tax Returns (subject to any Party's rights to
review such Tax Returns as are provided in this Article VII).
(a) Pre-Closing Tax Returns.
_______________________
(1) CONSOLIDATED, COMBINED AND UNITARY RETURNS.
Seller's consolidated federal income and state and local combined,
consolidated and unitary corporate income Tax Returns required to
be filed for Pre-Closing Taxable Periods and not filed on or
before the Closing Date shall be prepared and filed by Seller,
and Buyer on behalf of itself and the Company hereby irrevocably
designates Seller as its agent to take any and all actions
necessary or incidental to the preparation and filing of such Tax
Returns. To the extent such Tax Returns relate to the Company,
Seller agrees to provide Buyer with pro forma separate Tax
Returns for the Company for the portion of such Straddle Periods
ending on the Closing Date no less than thirty days before such
Tax Returns are required to be filed.
38
(2) OTHER RETURNS. All other Tax Returns for
Pre-Closing Taxable Periods not described elsewhere in this
Section 7.1(a), including separate state Tax returns, local Tax
returns and payroll Tax returns ("Other Tax Returns") required to be
filed for all Pre-Closing Taxable Periods and not filed on or before
the Closing Date shall be prepared and filed by Seller, and Buyer
on behalf of itself and the Company hereby irrevocably designates
Seller as its agent to take any and all actions necessary or
incidental to the preparation and filing of such Other Tax
Returns. To the extent such Tax Returns relate to the Company,
Seller agrees to provide Buyer with such Tax Returns as soon as
is practicable.
(b) Straddle Period Tax Returns.
___________________________
(1) CONSOLIDATED, COMBINED, AND UNITARY RETURNS.
Seller's consolidated federal income and state and local combined,
consolidated and unitary corporate income Tax Returns, including
all amended Tax Returns, required to be filed for all Straddle
Periods shall be prepared and filed by Seller. Seller agrees to
provide the Company with a copy of draft "stand alone" portions
of each Tax Return described in the first sentence of this
Section 7.1(b)(1) relating solely to the Company and each of its
Subsidiaries no later than ten (10) Business Days before the
relevant Tax Return is due (taking into account extensions), and
Seller shall, subject to its reasonable judgment, incorporate
thereon any reasonable comments timely provided in writing by the
Company. Buyer on behalf of itself and the Company hereby
irrevocably designates Seller as its agent to take any and all
actions necessary or incidental to the preparation and filing of
such Tax Returns. To the extent such Tax Returns relate to the
Company, Seller agrees to provide Buyer with pro forma separate
Tax Returns for the Company for the portion of such Straddle
Periods ending on the Closing Date no less than thirty days
before such Tax Returns are required to be filed. To assist
Seller in the preparation of such Tax Returns, Buyer shall
provide, or shall cause the Company to provide, to Seller by the
last day of such Straddle Period any information reasonably
requested by Seller to prepare such Tax Returns.
(2) OTHER RETURNS. All Other Tax Returns, include
all amended Other Tax Returns, that are required to be filed for
Straddle Periods shall be prepared and filed by Buyer. Buyer agrees
to provide Seller with a copy of a draft of each such Other Tax
Return no later than ten (10) Business Days before the relevant
Other Tax Return is due (taking into account extensions), and
Buyer shall, subject to its reasonable judgment, incorporate
thereon any reasonable comments timely provided in writing by
Seller. To assist Buyer in the preparation of such Tax Returns,
Seller shall provide within a reasonable period of time any
information in Seller's possession reasonably requested by Buyer
to prepare such Tax Returns.
(c) Post-Closing Tax Returns.
________________________
The filing of all Tax Returns for periods beginning
after the Closing Date ("Post-Closing Taxable Periods") shall be
(i) the responsibility of Seller if such Tax Returns relate
solely to a member or members of the Seller Affiliated Group or
their respective assets or businesses, and (ii) the
responsibility of Buyer if such Tax Returns relate solely to the
Company or a member or members of the affiliated or combined
group to which the Company belongs, if any, after the Closing
Date or their respective assets or businesses. Buyer shall cause
the Company to file income Tax Returns or shall include the
Company in its combined or consolidated income Tax Returns for
all periods other than periods ending on or before the Closing
Date.
7.2 Tax Liabilities
____________________
(a) Pre-Closing Taxable Period Tax Liabilities.
__________________________________________
39
(1) PRE-CLOSING TAXABLE PERIOD CONSOLIDATED, COMBINED
AND UNITARY INCOME TAX LIABILITIES. Seller shall be liable for and
shall pay, on a timely basis, all Taxes due with respect to the
consolidated federal income and state and local combined,
consolidated and unitary corporate income Tax liability for all
Pre-Closing Taxable Periods of the Seller Affiliated Group.
(2) PRE-CLOSING TAXABLE PERIOD LIABILITIES FOR
OTHER TAXES. All Taxes (a) due with respect to Other Tax Returns
or (b) with respect to which Tax Returns are either (i) not required
or (ii) not filed ("Other Taxes") for Pre-Closing Taxable Periods
shall be paid, on a timely basis, by Seller, to the extent not
accrued in Final Adjusted Working Capital.
(b) Straddle Period Tax Liabilities.
_______________________________
(1) STRADDLE PERIOD CONSOLIDATED, COMBINED, AND
UNITARY INCOME TAX LIABILITIES. Seller shall pay, on a timely
basis, all Taxes due with respect to the consolidated federal
income and the state and local combined, consolidated and unitary
corporate income Tax liability for all Straddle Periods of the
Seller Affiliated Group (including any deferred items triggered
into income under Treasury Regulations Section 1.1502-1 and any
excess loss account taken into income under Treasury Regulations
Section 1.1502-19). After the Closing Date, Seller shall timely
pay all amounts payable in respect of the Seller Affiliated Group's
quarterly estimated federal income Tax payments for the portion of
all Straddle Periods ending on the Closing Date. Seller shall make
all calculations and determinations required to be made pursuant
to this Section 7.2(b)(1) on a basis reasonably consistent with
prior years. The amount of consolidated federal income and the
state and local combined, consolidated and unitary corporate
income Taxes to be allocated to Seller and the Company pursuant
to this Section shall be determined on a "closing of the books"
basis. All determinations with respect to Tax liabilities and
Tax payments to be made hereunder shall be made in accordance
with all Tax Returns to be filed.
(2) STRADDLE PERIOD OTHER TAXES. In the case
of all Other Taxes that are due with respect to Other Tax Returns
filed by Buyer for Straddle Periods, Buyer shall pay, on a timely
basis, all such Taxes, and Seller hereby assumes and agrees to pay
to Buyer its "allocable share" (as herein defined) of all such
Taxes for all Straddle Periods, to the extent not accrued in Final
Adjusted Working Capital, and Buyer hereby assumes and agrees to pay
to Seller any overpayments by the Company or the Company's share of
any refunds or similar amounts. The "allocable share" of such
Other Taxes for which Buyer or Seller is responsible shall be
calculated by Seller and (x) if such Other Taxes relate to income
or gross receipts Taxes of the Company shall be determined based
on an interim closing of the books as of the close of business on
the Closing Date, and (y) for all Other Taxes subject to this
Section 7.3(b)(2) not described in clause (x) of this sentence
shall be deemed to be the amount of such Tax for the entire
Taxable Period multiplied by a fraction the numerator of which is
the number of days in the Taxable Period ending on the Closing
Date and the denominator of which is the number of days in such
Straddle Period. The amount of such Other Taxes borne by Seller
shall be the amount allocated to the portion of the Straddle
Period ending on the Closing Date. All determinations with
respect to Tax liabilities and Tax payments to be made hereunder
shall be made in accordance with all Tax Returns to be filed.
(c) Support for Allocations of Tax Liabilities.
__________________________________________
Notwithstanding anything to the contrary in this
Section 7.2, whenever any Party is required to make any of the
calculations or determinations referred to therein, such Party
shall
40
provide the other Party with (i) copies of any material
calculations or determinations as soon as is practicable after
such calculations or determinations have been made, and prior to
the applicable Tax Returns being filed, sufficient to enable the
other Party to verify mathematical accuracy and (ii) if requested
by the other Party, access during reasonable business hours to
copies of any Tax Returns, reports or other statements sufficient
to enable the other Party to verify that treatment is reasonably
consistent with prior years.
7.3 Redetermined Tax Liabilities, Refunds and Carrybacks
_________________________________________________________
(a) Pre-Closing Tax Returns.
_______________________
In the case of any Final Determination regarding a Tax
Return for a Pre-Closing Taxable Period, any Tax Deficiency shall
be paid to the appropriate taxing authority by, and any Tax
Refund received from the appropriate taxing authority shall be
paid to, Seller, and if any such Tax Refund is received by the
Company or Buyer, Buyer shall forward any such Tax Refund to
Seller within ten days after receipt thereof.
(b) Post-Closing and Straddle Period Tax Returns.
____________________________________________
Buyer shall pay all Taxes and shall be entitled to
receive and retain all refunds of Taxes resulting from a Final
Determination with respect to periods beginning after the Closing
Date (including the portion of any Straddle Periods which begin
after the Closing Date, for which payment of any such Taxes
resulting from a Final Determination shall be paid directly to
Seller) that are attributable to the Business. Except in the
case of Tax Returns that include the Company and not the Seller
Affiliated Group, all calculations and determinations required to
be made pursuant to this Section shall be made by Seller in good
faith and on a basis reasonably consistent with prior years, but
only in accordance with all Tax Returns to be filed.
(c) Refunds.
_______
Any Tax Refund (including any interest with respect
thereto) relating to the Company for any Pre-Closing Taxable
Period or a Straddle Period, including any Tax Refund resulting
from the carryback by Seller of any Tax Item arising after the
Closing Date to a Pre-Closing Taxable Period or a Straddle
Period, shall be for the account of Seller, and Buyer shall
promptly pay over to Seller any such Tax Refund that it or the
Company receives, provided however that any Tax Refund included
in the Closing Date Statement shall be for the account of Buyer
and if paid to Seller shall be paid over promptly to Buyer.
Except as provided in the prior sentence, any Tax Refund
resulting from any Tax Item arising after the Closing Date
(including items allocated to the portion of the Straddle Period
occurring after the Closing Date) shall be for the account of
Buyer. All determinations with respect to any such Tax Refund
resulting from the carrybacks shall be made in accordance with
all Tax Returns to be filed.
(d) Treatment of Payments.
_____________________
Any payments made under Sections 7.2 or 7.3 by one of
the Parties to the other Party shall be treated by each of the
Parties as satisfaction of liabilities of such paying Party and
shall not be subject to any gross-up or additional payment.
7.4 Consolidated Return Liability.
__________________________________
41
Seller agrees to indemnify Buyer from and against (and
to pay) any Tax that might be asserted against the Company and
that results, arises or relates to Taxes of the Company under
Treasury Regulations Section 1.1502-6 (or any similar provision
of state, local or foreign law).
7.5 Indemnity for Breach.
_________________________
Buyer shall be liable for and shall indemnify, defend
and hold harmless Seller and each of its directors, officers,
employees, Affiliates, agents and assigns (the "Seller Group")
from and against any Indemnifiable Losses as a result of the
breach by Buyer or any Affiliate thereof (including, following
the Closing, the Company) of any covenant or agreement under this
Article VII. Buyer shall hold the Seller Group harmless from and
against, any loss, claim, liability, expense, or other damage
attributable to (i) all Taxes (or the non-payment thereof) of the
Company or any member of any Affiliated Group of which Buyer is a
member for all Post-Closing Taxable Periods and the portion
beginning on or after the Closing Date for the Straddle Tax
Period and (ii) any and all Taxes of any Person (other than the
Company) imposed on the Company or Seller as a transferor or
predecessor, by contract or pursuant to any Law, which Taxes
relate to an event or transaction occurring at or after the
Closing. Seller shall indemnify the Company and Buyer and any of
its directors, officers, employees, agents, Affiliates, and
assigns (the "Buyer Group") and hold them harmless from and
against, any loss, claim, liability, expense, or other damage
attributable to (i) all Taxes (or the non-payment thereof) of the
Company or any member of the Seller Affiliated Group for all Pre-
Closing Taxable Periods and the portion through the beginning of
the Closing Date for the Straddle Tax Period and (ii) any and all
Taxes of any Person (other than the Company) imposed on the
Company or Buyer as a transferee or successor, by contract or
pursuant to any Law, which Taxes relate to an event or
transaction occurring before the Closing (except to the extent
that Taxes are accrued for in Final Adjusted Working Capital).
Seller shall be liable for and shall indemnify, defend and hold
harmless the Buyer Group from and against any Indemnifiable
Losses as a result of the breach by a member of the Seller
Affiliated Group or any Affiliate thereof of any covenant or
agreement under this Article VII.
7.6 Notice of Indemnity Issue.
______________________________
Whenever a Party becomes aware of the existence of an
issue that could increase the liability for any Tax of the other
Party or any Affiliate thereof or require a payment hereunder,
such Party shall in good faith promptly give notice to such other
Party of such issue. The failure of a Party to give the notice
required under the immediately preceding sentence shall not
relieve such Party of its obligations under this Article VII
except to the extent the Party obligated to provide
indemnification or its Affiliate is actually materially
prejudiced by such failure to give notice.
7.7 Audit Matters.
__________________
The Party having the responsibility for filing a Tax
Return (the "Responsible Party") shall have primary
responsibility for conducting the audit of such Tax Return, and
shall have primary responsibility for conducting any subsequent
litigation relating thereto. To the extent that such Tax Return
relates to or reasonably could have an effect on any Pre-Closing
Taxable Period, Straddle Period, or Post-Closing Taxable Period
of the other Party (the "Other Party"), such Other Party shall
have the right, directly or through its designated
representatives, to review in advance and comment upon all
submissions made in the course of such audits, appeals, or
litigation and to be present at, directly or by its
representatives, all conferences, meetings or
42
proceedings with any taxing authority, and all appearances before
any court, the subject matter of which is or includes an item for
which the Other Party could be liable under this Agreement. In
addition, if the disposition, resolution or compromise of such
audit or appeal will or might reasonably be expected to result
in the Other Party having an increased Tax liability, or any other
adverse Tax consequence, for any period beginning after the
Closing Date, the Other Party shall have the right, exercisable
within ten days of its receipt of notice of a proposed
disposition of the audit or appeal, to veto the disposition of
any audit adjustment with respect to such periods, such veto not
to be unreasonably exercised. Each Party shall bear its own
expenses of participation in such audits, appeals, or litigation.
If the Responsible Party declines to defend any matter provided
for in this Section 7.7, the Other Party has the right to pay,
compromise or contest the matter, and the Responsible Party shall
bear the Responsible Party's share of costs as determined in this
Section 7.7 in those actions.
7.8 Cooperation and Exchange of Information.
____________________________________________
Buyer on behalf of itself and the Company agrees to
provide Seller with such cooperation and information as Seller
shall reasonably request in connection with the preparation or
filing of any Tax Return or claim for refund not inconsistent
with this Agreement or in conducting any audit or other
proceeding in respect to Taxes. Seller, on behalf of itself and
each member of the Seller Affiliated Group, agrees to provide
Buyer with such cooperation and information as Buyer shall
reasonably request in connection with the preparation of any Tax
Return or claim for refund not inconsistent with this Agreement
or in conducting any audit or other proceeding in respect of
Taxes. The cooperation and information contemplated in the two
previous sentences shall include designation of an officer of
Seller, Buyer, and the Company for the purpose of signing Tax
Returns, receiving and cashing refund checks and defending audits
as well as promptly forwarding copies of appropriate notices and
forms or other communications received from or sent to any taxing
authority which relate to the Seller Affiliated Group or the Tax
Returns hereunder, and providing copies of all relevant Tax
Returns, together with related schedules and workpapers,
documents relating to rulings or other determinations by taxing
authorities, including foreign taxing authorities, and records
concerning the ownership and Tax basis of property, which either
Party may possess. The Parties shall take all actions necessary
to establish Seller as the sole agent for Tax purposes of each
member of the Seller Affiliated Group with respect to all
combined, consolidated and unitary Tax Returns for Pre-Closing
Taxable Periods and all Straddle Periods as the common parent of
the Seller Affiliated Group, and as the sole agent for Tax
purposes of the Company for all Tax Returns of the Company for
Pre-Closing Taxable Periods and all Straddle Periods. Seller
shall and Buyer shall, and shall cause the Company to, make their
employees and facilities available on a mutually convenient basis
to provide explanation of any documents or information provided
hereunder, without charge to Seller, Buyer or the Company, as the
case may be.
7.9 Section 338(h)(10) Election.
________________________________
(a) At Buyer's option, each of Seller and Buyer shall make an
election under Section 338(h)(10) of the Code (and any
corresponding provisions of state, local or foreign law)
(collectively, a "Section 338(h)(10) Election") with respect to
the purchase and sale of the Company.
(b) If Buyer shall determine that a Section 338(h)(10) Election
be made, as soon as practicable after the Closing Date, but in no
event later than sixty (60) days after the Closing Date, Buyer
shall deliver to Seller a written notice of its intention to file
the Section 338(h)(10) Election, specifying that the Section
338(h)(10) Election shall be made with respect to
43
the Company. Seller and Buyer agree to allocate the Purchase Price
hereunder and the respective liabilities of the Company among the
respective assets of the Company in accordance with Code Section
338 and Treasury Regulations thereunder (and any comparable
provisions of state and local law, as appropriate (the
"Allocation"). Buyer shall be responsible for determining and
preparing the Allocation and shall submit the Allocation to
Seller for its approval no later than 120 days prior to the date
the forms and documents required in connection with the Section
338(h)(10) Election are required to be filed; provided that, if
Seller does not object within 30 days after its receipt of the
Allocation from Buyer, such Allocation shall be treated as the
agreed final Allocation. If Seller objects to the Allocation by
delivering written notice to Buyer within 30 days after Seller's
receipt thereof, Buyer and Seller shall work in good faith and
use their commercially reasonable efforts to agree on an
Allocation; provided that, if Buyer and Seller cannot, within 30
days, agreed on an Allocation, all items of such Allocation on
which the Parties do not mutually agree shall be promptly (within
10 days) submitted to the Accounting Firm for resolution within
10 days of submission thereto, which resolution shall be made
based solely upon the submissions made by Buyer and Seller, and
not upon an independent determination by the Accounting Firm, and
Buyer and Seller shall each pay one-half of the fees and expenses
of the Accounting Firm. Buyer and Seller shall report, act and
file in all respects and for all purposes in a manner consistent
with the Allocation, unless otherwise required by Law.
(c) Buyer shall be responsible for the preparation of
all forms and documents required in connection with the Section
338(h)(10) Election. Promptly after the Allocation been agreed
to by Seller or the Allocation has been finally determined by the
Accounting Firm, Buyer shall provide Seller with copies of (A)
federal Forms 8023 and 8883, (B) all attachments or supplements
required to be filed therewith pursuant to applicable treasury
regulations and instructions and (C) any comparable forms and
attachments with respect to any applicable state, local or foreign
elections included as part of the Section 338(h)(10) Election, in
each case reflecting the agreed upon calculations for its approval,
such approval not to be unreasonably withheld or delayed, provided
that such forms and attachments are consistent with the
Allocation, unless otherwise required by Law. Subject to
Seller's approval pursuant to the immediately preceding sentence,
Seller shall execute and deliver to Buyer within five (5) days of
receipt by Seller of such documents or forms as are required
properly to complete the Section 338(h)(10) Election. Buyer shall
be responsible for the preparation of all necessary amendments,
corrections or supplements to any such documents or forms. Buyer
shall be responsible for filing the original Forms 8023 and 8883,
with all attachments or supplements, and any comparable state,
local or foreign forms. Seller shall attach a copy of Forms 8023
and 8883 to its consolidated federal income tax return for the
taxable year of Seller that includes the Closing Date and shall
otherwise comply with relevant filing requirements applicable to
it.
(d) Seller shall pay any federal, state, local or foreign
Tax attributable to the making of the Section 338(h)(10) Election and
shall indemnify Buyer and the Company against any losses arising
out of any failure to pay such Tax. Seller shall also pay any
state, local or foreign Tax and shall indemnify Buyer and the
Company against any losses arising out of any failure to pay such
Tax) attributable to an election under state, local or foreign
Law similar to the election available under Section 338(g) of the
Code with respect to the purchase and sale of the stock of the
Company hereunder. Without limiting the generality of this
Section 7.9, (i) Buyer and Seller shall cooperate fully with each
other and make available to each other such Tax data and other
information as may reasonably be required by either of them in
connection with (A) the timely filing of all such documents or
forms as are required properly to complete the Section 338(h)(10)
Election, and (B) preparation of the Allocation, and Buyer and
Seller shall file any Tax Returns and other governmental filings
on a basis consistent with such Allocation.
44
7.10 Record Retention.
_____________________
Buyer and Seller agree (A) to retain all books and
records with respect to Tax matters and pertinent to the Company
relating to any taxable period beginning before the Closing Date
until the expiration of the statute of limitations (and, to the
extent notified by Buyer or Seller, any extensions thereof) of
the respective taxable periods, and to abide by all record
retention agreements entered into with any taxing authority, and
(B) to give the other Party reasonable written notice prior to
transferring, destroying or discarding any such books and records
and, if the other Party so requests, Buyer or Seller, as the case
may be, shall allow the other Party to take possession of such
books and records.
7.11 Tax Sharing Agreements.
___________________________
All Tax sharing agreements or similar agreements with
respect to or involving the Company, or any Affiliated Group of
which the Company is or has been a member, shall be amended to
terminate the obligations of the Company under such agreements as
of the Closing Date and, after the Closing Date, the Company
shall not be bound thereby or have any liability thereunder for
any taxable year (whether the current year, a future year or a
past year).
7.12 Certain Taxes and Fees.
___________________________
All transfer, documentary, sales, use, stamp,
registration and other such Taxes, and all conveyance fees,
recording charges and other fees and charges (including any
penalties and interest) incurred in connection with consummation
of the transactions contemplated by this Agreement shall be paid
one-half by Buyer and one-half by Seller when due.
ARTICLE VIII
CONDITIONS OF PURCHASE
______________________
8.1 General Conditions.
_______________________
The obligations of Buyer and Seller to effect the
Closing shall be subject to the following conditions, unless
waived in writing by all Parties:
(a) NO ORDERS; ACTIONS. At the Closing Date, (i) no
material Law or Order shall have been enacted, entered, issued,
promulgated or enforced by any Governmental Entity that prohibits
or restrains any of the transactions contemplated hereby and (ii)
no Action shall have been commenced by any Governmental Entity
that seeks to restrain or materially and adversely alter the
transactions contemplated hereby that in the reasonable good
faith determination of Seller or Buyer would render it unlawful
to consummate the transactions contemplated by this Agreement.
(b) APPROVALS. All Approvals required by applicable Law or the
terms of any Permit to be obtained from any Governmental Entity
to consummate the transactions contemplated hereby and to ensure
that the Company is will be able to continue to operate the
Business and the Property immediately after the Closing in the
same manner as prior to the date of the Agreement, all of which
are identified on SCHEDULE 8.1(b), shall have been received or
obtained on or prior to the Closing Date and any applicable
waiting period under the Xxxx-Xxxxx-Xxxxxx Act shall have expired
or been terminated.
45
8.2 Conditions to Obligation of Buyer.
______________________________________
The obligation of Buyer to effect the Closing shall be
subject to the following conditions, except to the extent waived
in writing by Buyer:
(a) REPRESENTATIONS AND WARRANTIES OF SELLER. The
representations and warranties of Seller contained herein shall
be true and correct (without giving effect to any materiality
qualifiers in such representations and warranties) as of the
Closing Date as though made on and as of the Closing Date, unless
such representations and warranties by their terms speak as of an
earlier date, in which case they shall be true and correct
(without giving effect to any materiality qualifiers in such
representations and warranties) as of such date, except to the
extent that the failure of such representations and warranties to
be true and correct (without giving effect to any materiality
qualifiers in such representations and warranties) would not,
individually or in the aggregate, have or reasonably be expected
to have a Material Adverse Effect.
(b) COVENANTS OF SELLER. Seller shall have performed all
obligations and complied with all covenants set forth in this
Agreement that are required to be performed or complied with by
it at or prior to the Closing in all material respects.
(c) OFFICER'S CERTIFICATE. Buyer shall have received a
certificate of Seller signed by an authorized officer of Seller
to the effect that the conditions in Sections 8.2(a) and 8.2(b)
have been satisfied.
(d) RESIGNATION OF DIRECTORS AND CERTAIN OFFICERS.
The officers of the Company who will remain employed by Seller or
one of its Affiliates after the Closing Date and all directors of the
Company shall have submitted their resignations in writing to the
Company. Such resignations of officers and directors (in such
capacity) shall be effective as of the Closing.
(e) CLOSING DELIVERIES. Buyer shall have received the
payments and documents referred to in Section 9.1.
(f) NO MATERIAL ADVERSE CHANGE. Since the date of this
Agreement there shall have been no change with respect to the Company
or the Business that has had a Material Adverse Effect.
(g) PROPERTY. As of the Closing Date, (i) the three
parcels of land comprising the Tampa Grinding Site shall be contiguous
to each other along common boundary lines, (ii) each of the Tampa
Grinding Site and the Port Manatee Site shall have direct
vehicular and pedestrian access to a public street adjoining such
site, through a legally permitted curb cut, or shall have
vehicular and pedestrian access to a public street via an
insurable easement benefiting such site; and (iii) the building
and improvements used in the operation of the Business shall be
located within the boundaries of the applicable Property or
within insurable off-site easements, except, in the case of any
of the foregoing, for any failures of the foregoing to be true
that would not, individually or in the aggregate, materially
adversely affect the operation of the Business on the applicable
Property as operated on the date hereof.
(h) CONSENTS. The consents of third parties set forth on
SCHEDULE 8.2(h) shall have been obtained on or prior to the
Closing Date.
46
8.3 Conditions to Obligation of Seller.
_______________________________________
The obligation of Seller to effect the Closing shall be
subject to the following conditions, except to the extent waived
in writing by Seller:
(a) REPRESENTATIONS AND WARRANTIES OF BUYER. The
representations and warranties of Buyer contained herein shall be
true and correct (without giving effect to any materiality
qualifiers in such representations and warranties) as of the
Closing Date as though made on and as of the Closing Date, unless
such representations and warranties by their terms speak as of an
earlier date, in which case they shall be true and correct
(without giving effect to any materiality qualifiers in such
representations and warranties) as of such date, except to the
extent that the failure of such representations and warranties to
be true and correct (without giving effect to any materiality
qualifiers in such representations and warranties) would not,
individually or in the aggregate, have or be reasonably likely to
have a material adverse effect on Buyer's ability to perform this
Agreement.
(b) COVENANTS OF BUYER. Buyer shall have performed all
obligations and complied with all covenants set forth in this
Agreement that are required to be performed or complied with by
it at or prior to the Closing in all material respects.
(c) OFFICER'S CERTIFICATE. Seller shall have received a
certificate of Buyer signed by an authorized officer of Buyer to
the effect that the conditions in Sections 8.3(a) and 8.3(b) have
been satisfied.
(d) CLOSING DELIVERIES. Seller shall have received the
payments and documents referred to in Section 9.2.
ARTICLE IX
CLOSING DELIVERIES
__________________
9.1 DELIVERIES BY SELLER TO BUYER AT CLOSING. At the Closing,
Seller shall deliver, or shall cause to be delivered, to Buyer,
the following:
(a) certificates representing the Stock, duly endorsed in blank
or with duly executed stock powers, as contemplated in Section
2.1;
(b) a non-foreign status certificate that would exempt the
transactions contemplated by this Agreement from withholding
pursuant to the provisions of the Foreign Investment in Real
Property Tax Act,
(c) an executed counterpart to the Supply Contract;
(d) the certificate referred to in Section 8.2(c); and
(e) a copy of the certificate of incorporation or other
organizational documents of the Company then in effect and a copy
of the by-laws of the Company, certified by an authorized officer
of the Company as being true and correct in all material respects
and in effect on the Closing Date.
47
9.2 DELIVERIES BY BUYER TO SELLER AT CLOSING. At the
Closing, Buyer shall deliver to Seller the following:
(a) the wire transfer of immediately available U.S. dollar
funds in the amount of the Purchase Price payable on the Closing Date;
(b) an executed counterpart to the Supply Contract; and
(c) the certificate referred to in Section 8.3(c).
ARTICLE X
TERMINATION OF OBLIGATIONS
__________________________
10.1 Termination of Agreement.
_____________________________
Anything herein to the contrary notwithstanding, this
Agreement may be terminated at any time before the Closing as
follows and in no other manner, PROVIDED that the terminating
party is not in material breach of its representations,
warranties or covenants set forth herein:
(a) MUTUAL CONSENT. By mutual consent in writing of
Buyer and Seller.
(b) CLOSING NOT CONSUMMATED BY EARLIER DATE. By Seller
or Buyer at any time after September 15, 2003, if the Closing shall not
have occurred by such date, unless extended by mutual consent in
writing of Buyer and Seller; provided, that the right to
terminate this Agreement under this Section 10.1(b) shall not be
available to any Party whose failure to fulfill any obligation
under this Agreement has been the cause of, or resulted in, the
failure of the Closing to occur by such date; and provided that
the date referred to above shall be extended for ninety (90) days
for the benefit of any Party that is not in material breach of
this Agreement in the event the waiting period under the Xxxx-
Xxxxx-Xxxxxx Act has not expired by such date.
(c) CONDITIONS TO BUYER'S PERFORMANCE NOT MET. By Buyer
upon written notice to Seller if any event occurs or condition exists
which would render impossible the satisfaction of one or more
conditions to the obligations of Buyer to consummate the Closing
contemplated by this Agreement as set forth in Article VIII;
provided, however, that any such condition relating to a breach
or a failure to perform a representation, warranty, covenant or
other agreement prior to the Closing Date shall be a cause for
termination of this Agreement only if such breach or failure
cannot be or has not been cured within ten Business Days after
the giving of written notice of such breach or failure to Seller,
such notice to be given promptly after Buyer becomes aware of
such breach or failure.
(d) CONDITIONS TO SELLER'S PERFORMANCE NOT MET. By Seller
upon written notice to Buyer if any event occurs or condition exists
which would render impossible the satisfaction of one or more
conditions to the obligation of Seller to consummate the Closing
contemplated by this Agreement as set forth in Article VIII;
provided, however, that any such condition relating to a breach
or a failure to perform a representation, warranty, covenant or
other agreement prior to the Closing Date shall be a cause for
termination of this Agreement only if such breach or failure
cannot be or has not been cured within ten Business Days after
the giving of written notice of such breach or failure to Buyer,
such notice to be given promptly after Seller becomes aware of
such breach or failure.
48
10.2 Effect of Termination.
__________________________
In the event that this Agreement shall be terminated
pursuant to Section 10.1, all future obligations of the Parties
under this Agreement shall terminate without further liability of
any Party to another; PROVIDED that the obligations of the
Parties contained in this Section 10.2 and Sections 12.14, 12.16,
12.20 and the Confidentiality Agreement shall survive any such
termination. A termination under Section 10.1 shall not relieve
any Party of any liability for a willful breach of any covenant
or agreement under this Agreement or be deemed to constitute a
waiver of any available remedy (including specific performance if
available) for any such breach. If this Agreement is terminated
for any reason, no representative of Buyer will directly or
indirectly attempt to influence any employee of the Company who
is employed at any of the Properties to seek employment with
Buyer or any of its Affiliates for a period of one year after
this Agreement is terminated; provided, however, that the
foregoing shall not restrict or preclude Buyer or its
Subsidiaries or their executive officers from making generalized
searches for employees by use of advertisements in the media
(including trade media and the internet) or by engaging search
firms which are not focused on employees of the Company or
Seller.
ARTICLE XI
INDEMNIFICATION; SURVIVAL
_________________________
11.1 Obligations of Seller.
__________________________
Effective as of the Closing, Seller shall indemnify and
hold harmless Buyer, the Company, and each of their respective
directors, officers, employees, Affiliates, agents and assigns
from and against any and all Indemnifiable Losses based upon or
arising from:
(a) any inaccuracy in any of the representations and
warranties made by Seller on the Closing Date in or pursuant to
this Agreement;
(b) any breach or nonperformance of any Pre-Closing
Covenant or any material breach or nonperformance of any of the
covenants of Seller contained in this Agreement (other than Pre-Closing
Covenants), including any matter as to which Seller in other
provisions of this Agreement has expressly agreed to indemnify
Buyer or (subsequent to Closing) the Company; or
(c) any of the matters specifically identified on SCHEDULE
11.1(c).
11.2 Obligations of Buyer.
_________________________
Effective as of the Closing, Buyer shall indemnify and
hold harmless Seller and each of its directors, officers,
employees, Affiliates, agents and assigns from and against any
and all Indemnifiable Losses based upon or arising from:
(a) any inaccuracy in any of the representations and
warranties made by Buyer on the Closing Date in or pursuant to this
Agreement;
(b) any breach or nonperformance of any Pre-Closing Covenant
or any material breach or nonperformance of any of the covenants of
Buyer contained in this Agreement (other than Pre-Closing
Covenants), including any matter as to which Buyer in other
provisions of this Agreement has expressly agreed to indemnify
Seller; or
49
(c) the conduct and operation of the Business on or after
the Closing, except to the extent that Seller would be obligated to
indemnify Buyer pursuant to the provisions of Section 11.1,
without regard to the limitations in Sections 11.4 and 11.5.
11.3 Procedure.
______________
The following procedures shall apply with respect to
indemnification claims:
(a) NOTICE OF THIRD PARTY CLAIMS. Any Party seeking
indemnification of any Indemnifiable Loss or potential
Indemnifiable Loss arising from a claim asserted by a third party
shall give written notice to the Party from whom indemnification
is sought. Written notice to the Indemnifying Party of the
existence of a third-party claim shall be given by the
Indemnified Party promptly after its receipt of an assertion of
liability from the third party, and in any event within ten days
of such assertion; provided, however, that the failure of the
Indemnified Party to give such notice shall not relieve the
Indemnifying Party from its obligations under this Article XI
except to the extent the Indemnifying Party is actually
prejudiced by such failure to give notice.
(b) DEFENSE. In the case of a third party claim, the
Indemnifying Party may, at its option, control the defense of an
Indemnifiable Claim. Notwithstanding the foregoing, the
Indemnified Party shall have the right to retain counsel of its
choice at its own expense and participate in the defense of the
Indemnifiable Claim. If the Indemnifying Party does not assume
such defense or the Indemnifying Party notifies the Indemnified
Party within thirty days that it will not assume such defense,
the Indemnified Party may control the defense of such claim and
may settle the claim on behalf of and for the account and risk of
the Indemnifying Party, who shall be bound by the result. In all
cases, the party without the right to control the defense of the
Indemnifiable Claim may participate in the defense at its own
expense.
(c) TAX ADJUSTMENTS. Any amounts payable by the
Indemnifying Party to or on behalf of an Indemnified Party pursuant
to this Agreement shall be reduced by the amount of any Tax benefits
to the Indemnified Party as a result of the claim, loss or damage
involved, including any increased deductions, credits or losses
of the Indemnified Party. In the case of Tax benefits consisting
of depreciation or amortization deductions, the Tax benefit
amount will be based on the net present value of such deductions
using a discount rate equal to the mid-term applicable federal
rate in effect on the day on which the indemnification payments
are due. Any Tax benefit calculations under this Section 11.3(c)
shall be determined using the highest combined marginal Tax rate
for federal and applicable state and local income Taxes.
(d) SETTLEMENT LIMITATIONS. Notwithstanding anything
in this Section 11.3 to the contrary, neither the Indemnifying Party
nor the Indemnified Party shall, without the written consent of the
other party, settle or compromise any Indemnifiable Claim or
permit a default or consent to entry of any judgment, unless such
settlement or compromise includes a complete release of the
Indemnified Party with respect to liability related to such
Indemnifiable Claim. Notwithstanding the preceding sentence, if
a settlement offer solely for money damages is made by the
applicable third party claimant, and the Indemnifying Party
notifies the Indemnified Party in writing of the Indemnifying
Party's willingness to accept the settlement offer and pay the
amount called for by such offer without reservation of any rights
or defenses against the Indemnified Party, the Indemnified Party
may continue to contest such claim, free of any participation by
the Indemnifying Party, and the amount of any ultimate liability
with respect to such Indemnifiable Claim that the Indemnifying
Party has an obligation to pay hereunder shall be limited to the
lesser of (A) the amount of the settlement offer that the
Indemnified Party declined to accept plus the Indemnifiable
Losses of the Indemnified Party relating to such Indemnifiable
50
Claim through the date of its rejection of the settlement offer
or (B) the aggregate Indemnifiable Losses of the Indemnified
Party with respect to such claim. If the Indemnifying Party
makes any payment on any claim, the Indemnifying Party shall be
subrogated, to the extent of such payment, to all rights and
remedies of the Indemnified Party to any insurance benefits or
other claims of the Indemnified Party with respect to such claim.
11.4 Survival.
_____________
The representations and warranties contained in or made
pursuant to this Agreement shall expire on the second anniversary
of the Closing, except that (i) the representations and
warranties contained in Sections 3.1(j) and 3.1(m) shall expire
on the fifth anniversary of the Closing, (ii) the representations
and warranties contained in Section 3.1(c) shall remain in full
force and effect until the expiration of the applicable statute
of limitations, (ii) the representations and warranties in the
second sentence of Section 3.1(e)(1) shall expire on the third
anniversary of the Closing and (iii) the representations and
warranties contained in Section 3.1(a)(2) shall remain in full
force and effect indefinitely. This Article XI shall survive the
Closing and shall remain in effect (a) with respect to Sections
11.1(a) and 11.2(a), so long as the relevant representations and
warranties survive, (b) with respect to Sections 11.1(b) and
11.2(b) to the extent those Sections relate to the covenants in
Sections 4.1, 4.2, 4.4 and 4.6 requiring performance prior to the
Closing ("Pre-Closing Covenants"), for one year after the
Closing, (c) with respect to Sections 11.1(b) and 11.2(b) to the
extent those Sections relate to covenants requiring performance
after the Closing, so long as the applicable covenant survives,
(d) with respect to Section 11.1(c), 185 days after the Closing
and (e) with respect to Section 11.2(c), indefinitely. Any
matter as to which a non-speculative claim has been asserted by
written notice setting forth in reasonable detail the nature of
such claim to the other Party that is pending, unresolved and
being diligently pursued at the end of any applicable limitation
period shall continue to be covered by this Article XI
notwithstanding any applicable limitation period (which the
Parties hereby waive) until such matter is finally terminated,
not being diligently pursued or otherwise resolved by the Parties
under this Agreement or by a court of competent jurisdiction and
any amounts payable hereunder are finally determined and paid.
11.5 Limitations on Indemnification.
___________________________________
(a) Seller shall not be required to indemnify any Person
under Section 11.1(a), 11.1(c) or, solely with respect to Pre-Closing
Covenants, Section 11.1(b), unless (i) the amount for which
indemnity would otherwise be payable by Seller with respect to
any given claim (other than claims for breaches of any
representation and warranty that is specifically qualified by
materiality) exceeds U.S.$25,000 ("Included Claims") and (ii) the
aggregate amount for all Included Claims exceeds U.S.$1,000,000,
and in such event, Seller shall be responsible for only the
amount in excess of U.S.$1,000,000. In no event shall the total
indemnification to be paid by Seller under this Article XI,
exceed (i) 35% of the Purchase Price between the Closing Date and
the first anniversary of the Closing Date or (ii) 25% of the
Purchase Price after the first anniversary of the Closing Date;
provided that the limitation set forth in this sentence shall be
50% of the Purchase Price with respect to the matters set forth
in Section 11.1(c). The limitations set forth in this Section
11.5(a) shall not be applicable to claims based on (i) breaches
of the representations and warranties in Section 3.1(a)(2) or
3.1(u)(2), (ii) breach of the covenants in Article VII, or (iii)
fraud.
(b) Buyer shall not be required to indemnify any Person
under Section 11.2(a) or, solely with respect to Pre-Closing Covenants,
Section 11.2(b), unless (i) the amount for which indemnity would
otherwise be payable by Buyer with respect to any Included Claims
51
and (ii) the aggregate amount for all Included Claims exceeds
U.S.$1,000,000, and in such event, Buyer shall be responsible for
only the amount in excess of U.S.$1,000,000. In no event shall
the total indemnification to be paid by Buyer under this Article
XI, exceed (i) 35% of the Purchase Price between the Closing Date
and the first anniversary of the Closing Date or (ii) 25% of the
Purchase Price after the first anniversary of the Closing Date.
The limitations set forth in this Section 11.5(b) shall not be
applicable to claims based on (i) breaches of any covenants with
respect to payment of the Purchase Price or any portion thereof,
(ii) breaches of any covenants in Article VII or (iii) fraud.
(c) Any Indemnifiable Claim with respect to any breach or
nonperformance by either Party of a representation, warranty,
covenant or agreement shall be limited to the amount of actual
Indemnifiable Losses sustained by the Indemnified Party by reason
of such breach or nonperformance, net of any insurance proceeds
actually received by the Indemnified Party and net Tax benefits.
(d) If an inaccuracy in any of the representations and
warranties made by Seller or a breach of any covenants of Seller
gives rise to an adjustment in the Purchase Price, or otherwise
was the basis for a proposed adjustment to the Closing Date
Statement, then such inaccuracy or breach shall not give rise to
an indemnification obligation under Section 11.1.
11.6 Treatment of Payments.
__________________________
All payments made pursuant to this Article XI shall be
treated as adjustments to the Purchase Price. Notwithstanding
anything in this Agreement to the contrary, Buyer shall not be
indemnified or reimbursed for any tax consequences arising from
the receipt or accrual of an indemnity payment hereunder,
including any such consequences arising from adjustments to the
basis of any asset resulting from an adjustment to the Purchase
Price or any additional Taxes resulting from any such basis
adjustment.
11.7 Remedies Exclusive.
_______________________
Except as otherwise provided in Article VII, the
remedies provided for in this Article XI shall be exclusive and
shall preclude assertion by any Indemnified Party of any other
rights or the seeking of any and all other remedies against the
Indemnifying Party for claims based on this Agreement, except
with respect to claims based on fraud. In no event shall the
mere breach of a representation or warranty be used as evidence
of or deemed to constitute bad faith, misconduct or fraud. Each
Party hereby waives any provision of Law to the extent that it
would limit or restrict the agreement contained in this Section
11.7.
11.8 Mitigation.
_______________
The Parties shall cooperate with each other with
respect to resolving any claim or liability with respect to which
one party is obligated to indemnify the other party hereunder,
including by making commercially reasonable efforts to mitigate
or resolve any such claim or liability. Each Party shall use
commercially reasonable efforts to address any claims or
liabilities that may provide a basis for an Indemnifiable Claim
such that each Party shall respond to any claims or liabilities
in the same manner it would respond to such claims or liabilities
in the absence of the indemnification provisions of this
Agreement. In the event that any party shall willfully fail to
make such commercially reasonable efforts to mitigate or resolve
any claim or liability, then notwithstanding anything else to the
contrary contained herein, the other party shall
52
not be required to indemnify any Person for any Indemnifiable Loss
that could reasonably be expected to have been avoided if such party,
as the case may be, had made such efforts.
ARTICLE XII
GENERAL
___________
12.1 Usage.
__________
All terms defined herein have the meanings assigned to
them herein for all purposes, and such meanings are equally
applicable to both the singular and plural forms of the terms
defined. "Include," "includes" and "including" shall be deemed
to be followed by "without limitation" whether or not they are in
fact followed by such words or words of like import. "Writing,"
"written" and comparable terms refer to printing, typing,
lithography and other means of reproducing words in a visible
form. Any instrument or Law defined or referred to herein means
such instrument or Law as from time to time amended, modified or
supplemented, including (in the case of instruments) by waiver or
consent and (in the case of any Law) by succession of comparable
successor Laws and includes (in the case of instruments)
references to all attachments thereto and instruments
incorporated therein. References to a Person are, unless the
context otherwise requires, also to its successors and assigns.
Any term defined herein by reference to any instrument or Law has
such meaning whether or not such instrument or Law is in effect.
"Shall" and "will" have equal force and effect. "Hereof,"
"herein," "hereunder" and comparable terms refer to the entire
instrument in which such terms are used and not to any particular
article, section or other subdivision thereof or attachment
thereto. References to "the date of this Agreement," "the date
hereof" or words of like import shall mean July 2, 2003.
References in an instrument to "Article," "Section" or another
subdivision or to an attachment are, unless the context otherwise
requires, to an article, section or subdivision of or an
attachment to such instrument. References to any gender include,
unless the context otherwise requires, references to all genders,
and references to the singular include, unless the context
otherwise requires, references to the plural and vice versa.
12.2 Amendments; Waivers.
________________________
This Agreement and any Schedule or Exhibit attached
hereto may be amended only by agreement in writing of all
Parties. No waiver of any provision nor consent to any exception
to the terms of this Agreement or any agreement contemplated
hereby shall be effective unless in writing and signed by the
Party to be bound and then only to the specific purpose, extent
and instance so provided.
12.3 Schedules; Exhibits.
________________________
Each Schedule and Exhibit delivered pursuant to the
terms of this Agreement shall be in writing and shall constitute
a part of this Agreement, although the Disclosure Schedules need
not be attached to each copy of this Agreement. The mere
inclusion of an item in a Schedule as an exception to a
representation or warranty shall not be deemed an admission by
Seller that such item represents an exception or material fact,
event or circumstance or that such item is reasonably likely to
have a Material Adverse Effect. Further, any fact or item which
is clearly disclosed on any Schedule to this Agreement in such a
way as to make its relevance or applicability to information
called for by another Schedule or other Schedules to this
Agreement reasonably apparent shall be deemed to be disclosed on
such other Schedule or Schedules, as the case may be,
notwithstanding the omission of a reference or cross-reference
thereto.
53
12.4 Further Assurances.
_______________________
Each of Buyer and Seller will use commercially
reasonable efforts to cause all conditions to its and the other
Party's obligations hereunder to be timely satisfied and to
perform and fulfill all obligations on its part to be performed
and fulfilled under this Agreement, to the end that the
transactions contemplated by this Agreement shall be effected
substantially in accordance with its terms as soon as reasonably
practicable. Each of Buyer and Seller shall execute and deliver
both before and after the Closing such further certificates,
agreements and other documents and take such other actions as the
other Party may reasonably request to consummate or implement the
transactions contemplated hereby or to evidence such events or
matters. With respect to the securing of any requisite Approvals
after Closing, the Parties shall timely and promptly make all
filings which may be required for the securing of such Approvals.
In furtherance and not in limitation of the foregoing, each of
Buyer and Seller shall use commercially reasonable efforts to
file notification and report forms and similar applications with
any applicable Governmental Entity whose Approval may be required
following the Closing Date. Buyer and Seller shall cooperate and
use their respective commercially reasonable efforts to respond
to any requests for information by any Governmental Entity in
connection with such post-Closing Approvals.
12.5 Governing Law.
__________________
This Agreement and the legal relations between the
Parties shall be governed by and construed in accordance with the
laws of the State of Florida applicable to contracts made and
performed in such State and without regard to conflicts of law
doctrines.
12.6 Headings.
_____________
The descriptive headings of the Articles, Sections and
subsections of this Agreement are for convenience only and do not
constitute a part of this Agreement.
12.7 Counterparts.
_________________
This Agreement and any amendment hereto or any other
agreement (or document) delivered pursuant hereto may be executed
in one or more counterparts and by different Parties in separate
counterparts. All of such counterparts shall constitute one and
the same agreement (or other document) and shall become effective
(unless otherwise provided therein) when one or more counterparts
have been signed by each Party and delivered to the other Party.
12.8 Parties in Interest.
________________________
This Agreement shall be binding upon and inure to the
benefit of each Party, and nothing in this Agreement, express or
implied, is intended to confer upon any other Person any rights
or remedies of any nature whatsoever under or by reason of this
Agreement. Nothing in this Agreement is intended to relieve or
discharge the obligation of any third person to any Party to this
Agreement.
54
12.9 Waiver.
___________
No failure on the part of any Party to exercise or
delay in exercising any right hereunder shall be deemed a waiver
thereof, nor shall any single or partial exercise preclude any
further or other exercise of such or any other right.
12.10 Severability.
______________________
If any provision of this Agreement is determined to be
invalid, illegal or unenforceable by any Governmental Entity, the
remaining provisions of this Agreement to the extent permitted by
Law shall remain in full force and effect PROVIDED that the
essential terms and conditions of this Agreement for both Parties
remain valid, binding and enforceable and PROVIDED that the
economic and legal substance of the transactions contemplated by
this Agreement is not affected in any manner materially adverse
to any Party. In event of any such determination, the Parties
agree to negotiate in good faith to modify this Agreement to
fulfill as closely as possible the original intents and purposes
hereof. To the extent permitted by Law, the Parties hereby to
the same extent waive any provision of Law that renders any
provision hereof prohibited or unenforceable in any respect.
12.11 No Consequential or Punitive Damages.
______________________________________________
Notwithstanding anything to the contrary elsewhere in
this Agreement, no Party (or its Affiliates) shall, in any event,
be liable to the other Party (or its Affiliates) for any
indirect, incidental, consequential, special, exemplary or
punitive damages, including loss of future revenue or income, or
loss of business reputation or opportunity relating to the breach
or alleged breach or nonperformance or alleged nonperformance of
this Agreement; provided that the parties shall be permitted to
recover indirect, incidental or consequential damages to the
extent, but only to the extent, such indirect, incidental or
consequential damages are caused by and are a reasonably
foreseeable result of such breach or violation. The provisions
of this Section 12.11 are not intended to limit the rights of the
Company under any insurance policy set forth on SCHEDULE 3.1(u).
12.12 Knowledge Convention.
______________________________
Whenever any statement herein or in any Schedule,
Exhibit, certificate or other document delivered to any party
pursuant to this Agreement is made "to [its] knowledge" or words
of similar intent or effect of any party or its representative,
the Person making such statement shall be deemed to be making
such statements "to [its] best knowledge" and shall be
accountable only for facts and other information, which as of the
date the representation is given, are actually known to the
Person making such statement, which with respect to Seller, means
the persons identified on SCHEDULE 12.12(a) hereto, with respect
to Buyer, means the persons identified on SCHEDULE 12.12(b)
hereto, and with respect to any other Persons that are
corporations, means the knowledge of its executive officers.
12.13 Notices.
_________________
Any notice or other communication hereunder must be
given in writing and (a) delivered in person, (b) transmitted by
telefax or telecommunications mechanism, PROVIDED that any notice
so given is also mailed as provided in clause (c), (c) mailed by
certified or registered mail (postage prepaid), receipt
requested, or (d) sent by Express Mail, Federal Express or other
express delivery service, receipt requested, to the Parties and
at the addresses specified
55
herein or to such other address or to such other person as either
Party shall have last designated by such notice to the other Party.
Each such notice or other communication shall be effective (i) if
given by telecommunication, when transmitted to the applicable number
so specified herein and an appropriate confirmation of transmission
is received, (ii) if given by mail, three days after such
communication is deposited in the mails with first class postage
prepaid, addressed as aforesaid or (iii) if given by any other
means, when actually received at such address. Any notice or
other communication hereunder shall be delivered as follows:
If to Buyer, addressed to:
Florida Rock Industries, Inc.
000 Xxxx 00xx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxx, XX
Telecopier No.: (000) 000-0000
With a copy to:
McGuireWoods LLP
00 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxx, Xx.
Telecopier No.: (000) 000-0000
If to Seller addressed to:
Lafarge North America Inc.
00000 Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attention: General Counsel
Telecopier No.: (000) 000-0000
With a copy to:
O'Melveny & Xxxxx LLP
0000 Xxxxxx Xxxxxxxxx
Xxxxx 0000
XxXxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxxxx, Esq.
Telecopier No.: (000) 000-0000
12.14 Publicity and Reports.
_______________________________
Prior to the Closing, Seller and Buyer shall coordinate
all publicity relating to the transactions contemplated by this
Agreement and no Party shall issue any press release, publicity
statement or other public notice relating to this Agreement, or
the transactions contemplated by this Agreement, without the
prior written consent of the other Party; PROVIDED that to the
extent that a particular action is required by applicable Law or
applicable stock exchange regulations, the Parties shall be
obligated only to use commercially reasonable efforts to consult
with the other
56
Party prior to issuing any such press release, publicity statement
or other public notice. Nothing herein shall prevent reasonable
pre-Closing communication between the Company and its clients for
the purpose of responding to client concerns regarding the effect
of the transactions contemplated by this Agreement on service delivery.
12.15 Integration.
_____________________
This Agreement and the Confidentiality Agreement,
together with the Schedules and Exhibits thereto, (a) constitute
the entire agreement among the Parties pertaining to the subject
matter hereof and (b) supersede all prior agreements and
understandings of the Parties in connection therewith, except for
the Confidentiality Agreement, which remains in full force and
effect.
12.16 Expenses.
__________________
Except as otherwise provided herein, Seller and Buyer
shall each pay its own expenses incident to the evaluation of the
Company and the Business and the negotiation, preparation and
performance of this Agreement and the transactions contemplated
hereby, including the fees, expenses and disbursements of their
respective investment bankers, accountants and counsel. Seller
shall pay all expenses of the Company (including legal expenses)
incurred in connection with this Agreement and the transactions
contemplated hereby in the event the transactions contemplated
hereby are consummated.
12.17 No Assignment.
_______________________
Neither this Agreement nor any rights or obligations
under it are assignable by Buyer except that Buyer may assign its
rights hereunder to any subsidiary of Buyer or any Person to whom
the Company may be sold by Buyer. Buyer shall remain liable to
Seller for the payment of the consideration set forth herein and
other obligations of Buyer hereunder notwithstanding a permitted
assignment. Seller may assign its rights under this Agreement to
any Affiliate of Seller.
12.18 Representation By Counsel; Interpretation.
___________________________________________________
The Parties each acknowledge that each Party has been
represented by counsel in connection with this Agreement and the
transactions contemplated hereby. Accordingly, any rule of Law
or any legal decision that would require interpretation of any
claimed ambiguities in any portions of this Agreement against the
Party that drafted it has no application and is expressly waived.
If any provision of this Agreement is, in the judgment of the
trier of fact, ambiguous or unclear, that provision shall be
interpreted in a reasonable manner to effect the intent of the
Parties.
12.19 Reference of Disputes to Senior Officers of
Seller and Buyer.
_______________________________________________________________
Any dispute between Seller and Buyer arising out of or
in connection with this Agreement or any alleged breach hereof
may, at the option of either Seller or Buyer, be submitted for
discussion and possible resolution by senior officers of Seller
and Buyer, as designated by their respective chief executive
officers, for a period of thirty days (or such longer period as
the Parties may in particular cases so decide) before initiating
any arbitration pursuant to Section 12.20 hereof.
57
12.20 Resolution of Disputes.
________________________________
(a) Except as otherwise provided in this Agreement and
notwithstanding any termination of this Agreement, all disputes,
claims or controversies arising out of or relating to this
Agreement or the negotiation, validity or performance hereof or
the transactions contemplated hereby that are not resolved by
mutual agreement shall be resolved solely and exclusively by
binding arbitration before the American Arbitration Association
or its successor (the "AAA"). The arbitration shall be held in
Fairfax County, Virginia before a single arbitrator and shall be
conducted in accordance with the rules and regulations
promulgated by the AAA unless specifically modified herein. Each
Party hereby irrevocably submits to the jurisdiction of the AAA
with respect to any such matter and irrevocably waives, to the
fullest extent it may effectively do so, the defense of an
inconvenient forum to the maintenance of such proceeding.
(b) Within fifteen days after demand for arbitration
has been made by either Party, the Parties, and/or their counsel,
shall meet to discuss the issues involved and to discuss a suitable
arbitrator. Upon the failure of the Parties to agree upon an
arbitrator within a reasonable time (not longer than thirty days
from the demand), the Parties shall request that the AAA send
each Party an identical list of names of persons from its panel
of arbitrators from which to select an arbitrator. Each Party
shall have fifteen days from the date on which such list is
transmitted to the Parties to strike names objected to, number
the remaining names in order of preference, and return the list
to the AAA. If a Party does not return the list within the time
specified, all persons named therein shall be deemed acceptable.
From among the persons who have been approved on both lists, and
in accordance with the designated order of mutual preference, the
AAA shall invite the acceptance of an arbitrator to serve. If
the Parties fail to agree on any of the persons named, or if
acceptable arbitrators are unable to act, or if for any other
reason the appointment cannot be made from the submitted lists,
the AAA shall have the power to make the appointment from among
other members of the panel without the submission of additional
lists. The Parties covenant and agree that the arbitration shall
commence within one hundred twenty days of the date on which a
written demand for arbitration is filed by any Party. In
connection with the arbitration proceeding, the arbitrator shall
have the power to order the production of documents by each Party
and any third party witnesses and shall be empowered to decide
any disputes regarding the scope of discovery. In addition, each
Party may take up to three depositions as of right, and the
arbitrator may in his or her discretion allow additional
depositions upon good cause shown by the moving party. However,
the arbitrator shall not have the power to order the answering of
interrogatories or the response to requests for admission. In
connection with any arbitration, each Party shall provide to the
other, no later than ten days before the date of the arbitration,
the identity of all persons who may testify at the arbitration
and a copy of all documents that may be introduced at the
arbitration or considered or used by a Party's witness or expert.
The arbitrator's decision and award shall be made and delivered
in writing to each Party within sixty days of the conclusion of
the arbitration hearing. The arbitrator's decision shall set
forth a reasoned basis for his or her decision, including any
award of damages or finding of liability. The arbitrator shall
not have the power to award damages that are specifically
excluded under this Agreement (even if permitted under any
potentially applicable Law), and each Party hereby irrevocably
waives any claim to such damages. The Parties covenant and agree
that they will participate in the arbitration in good faith. The
prevailing Party in any arbitration, proceeding or legal action
arising out of or in connection with this Agreement shall be
entitled to recover its reasonable attorneys' fees and costs
incurred in connection with such arbitration, proceeding or legal
action. The arbitrator shall determine who the prevailing party
is for this purpose.
58
(c) Each of the Parties irrevocably and unconditionally
consents (on behalf of itself and its Affiliates) to the exclusive
jurisdiction of the AAA to resolve all disputes, claims or
controversies arising out of or relating to this Agreement or the
negotiation, validity or performance hereof or the transactions
contemplated hereby and further consents to the exclusive
jurisdiction of the courts of Virginia for the purposes of
compelling arbitration under this Section. Each Party further
irrevocably waives any objection to proceeding before the AAA
based upon lack of personal jurisdiction or to the laying of the
venue and further irrevocably and unconditionally waives and
agrees not to make a claim in any court that arbitration before
the AAA has been brought in an inconvenient forum or that the
arbitration provisions of this Agreement are unenforceable. Each
of the Parties hereby consents to service of process by
registered mail at the address to which notices are to be given.
Each of the Parties agrees that its submission to jurisdiction
and its consent to service of process by mail is made for the
express benefit of the other Party.
(d) This Section 12.20 shall apply to all forms of actions,
including requests for temporary, preliminary or permanent
injunctive relief, except that to the extent arbitration pursuant
to this Section 12.20 would not be available in a timely fashion
so as to enable any party hereto to avoid immediate and
irreparable harm, such Party may proceed in court without prior
arbitration for the limited purpose of avoiding such immediate
and irreparable harm. Each of the Parties consents to the
exclusive jurisdiction of the courts of Virginia for any
proceeding in court permitted under the immediately preceding
sentence. The Parties agree that the arbitrator shall have full
authority to grant provisional remedies and to direct the Parties
to request that any court modify or vacate any temporary or
preliminary relief issued by such court, and to award damages for
the failure of any Party to respect the arbitrator's orders to
that effect. Any award in any arbitration proceeding may be
enforced by any court of competent jurisdiction, and the Party
seeking enforcement shall be entitled to an award of all costs,
fees and expenses, including reasonable attorneys' fees, to be
paid by the Party against whom enforcement is ordered.
(e) BY SIGNING THIS AGREEMENT, THE PARTIES ARE, EXCEPT
TO THE LIMITED EXTENT PROVIDED IN THIS SECTION 12.20, AGREEING
TO HAVE ALL DISPUTES, CLAIMS OR CONTROVERSIES ARISING OUT OF OR
RELATING TO THIS AGREEMENT DECIDED BY ARBITRATION, AND ARE GIVING
UP ANY RIGHTS THEY MIGHT POSSESS TO HAVE THOSE MATTERS LITIGATED
IN A COURT OR JURY TRIAL. BY SIGNING THIS AGREEMENT, THE PARTIES
ARE GIVING UP THEIR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL EXCEPT
TO THE EXTENT THAT THEY ARE SPECIFICALLY PROVIDED FOR UNDER THIS
AGREEMENT. IF ANY PARTY REFUSES TO SUBMIT TO ARBITRATION AFTER
AGREEING TO THIS PROVISION, IT MAY BE COMPELLED TO ARBITRATE
UNDER FEDERAL OR STATE LAW. EACH PARTY'S AGREEMENT TO THIS
ARBITRATION PROVISION IS VOLUNTARY.
12.21 No Third Party Beneficiaries.
______________________________________
This Agreement is not intended to, and shall not be
construed to, confer upon any Person other than the Parties any
rights or remedies hereunder.
59
12.22 Language.
__________________
Although the Parties may translate this Agreement into
different languages, the governing version shall be the English
language version.
[Remainder of Page Intentionally Left Blank]
60
IN WITNESS WHEREOF, each of the Parties has caused this
Agreement to be executed by its duly authorized officers as of
the day and year first above written.
BUYER:
FLORIDA ROCK INDUSTRIES, INC.
By:/s/ Xxxx X. Xxxxx
_____________________________
Title: President/CEO
SELLER:
LAFARGE NORTH AMERICA INC.
By:/s/ Xxxxxxxx Xxxxxxx
______________________________
Title: President/CEO
S-1
STOCK PURCHASE AGREEMENT
dated as of
July 2, 2003
by and between
LAFARGE NORTH AMERICA INC.
and
FLORIDA ROCK INDUSTRIES, INC.
Schedules
_________
Schedule 1.1A Leases and Other Matters
Schedule 1.1B Port Manatee Site
Schedule 1.1C Tampa Grinding Site
Schedule 1.1D Tampa Terminal Facility
Schedule 3.1(a) Stock
Schedule 3.1(b)(1) Financial Statements
Schedule 3.1(b)(2) Certain Changes
Schedule 3.1(c) Tax Returns
Schedule 3.1(d) Material Contracts
Schedule 3.1(e) Real Property; Liens
Schedule 3.1(g) Authorization; No Conflicts
Schedule 3.1(h) Actions
Schedule 3.1(j)(1) Company Employees
Schedule 3.1(j)(2) Certain Company Employee Information
Schedule 3.1(j)(3) Employee Plans
Schedule 3.1(j)(4) Certain Employee Plan Information
Schedule 3.1(j)(9) Provision of or Contribution to Certain Plans
Schedule 3.1(l) Operation in the Ordinary Course
Schedule 3.1(m) Environmental Compliance
Schedule 3.1(n) Permits
Schedule 3.1(p) Customers
Schedule 3.1(q) Receivables Aging
Schedule 3.1(r) Certain Business Relationships
Schedule 3.1(s) Bank Accounts and Powers of Attorney
Schedule 3.1(t) Intellectual Property
Schedule 3.1(u) Insurance
Schedule 4.2 Conduct of Business; Representatives
Schedule 4.5 Intercompany and Affiliate Liabilities
Schedule 4.7 Assigned Trademarks
Schedule 5.3 Seller Marks
Schedule 6.1(b) Certain Company Employees
Schedule 8.1(b) Approvals
Schedule 8.2(h) Consents
Schedule 11.1(c) Certain Seller Indemnification Obligations
Schedule 12.12(a) Seller Knowledge Convention
Schedule 12.12(b) Buyer Knowledge Convention
Exhibits
________
Exhibit A Exclusions and Adjustments to Determination of
Closing Date Statement
Exhibit B Form of Supply Contract
Exhibit C Form of Trademark Assignment
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS 1
1.1 Definitions 1
ARTICLE II PURCHASE AND SALE/CLOSING 8
2.1 Purchase and Sale 8
2.2 Purchase Price and Adjustments 8
2.3 Intentionally Omitted. 10
2.4 The Closing 10
ARTICLE III REPRESENTATIONS AND WARRANTIES 10
3.1 Representations and Warranties of Seller. 10
3.2 Representations and Warranties of Buyer 22
ARTICLE IV COVENANTS WITH RESPECT TO THE PERIOD PRIOR TO
CLOSING 24
4.1 Access 24
4.2 Conduct of Business 24
4.3 Efforts; No Inconsistent Action 26
4.4 Supplemental Disclosure. 27
4.5 Elimination of Intercompany and Affiliate
Liabilities 27
4.6 Notice of Developments. 28
4.7 Assignment of Certain Trademarks. 28
4.8 Exclusivity. 28
4.9 Alternative Real Estate Transfers. 29
4.10 Industrial Revenue Bonds. 29
4.11 Manatee County Port Authority. 29
ARTICLE V CONTINUING COVENANTS 29
5.1 Cooperation; Legal Privileges 29
5.2 Post-Closing Operations 30
5.3 Use of Certain Seller Trademarks 30
5.4 Use of Certain Seller Patents 31
5.5 Acknowledgment of Limitation of Warranties. 32
5.6 Insurance Matters. 33
5.7 Noncompetition and Nonsolicitation 33
5.8 Certain Bagging Arrangements 34
5.9 Financial Statements 34
5.10 Option to Purchase Tampa Terminal Facility 35
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TABLE OF CONTENTS
(continued)
ARTICLE VI EMPLOYEES AND EMPLOYEE BENEFIT MATTERS 36
6.1 Employee and Employee Benefit Matters. 36
ARTICLE VII TAX MATTERS 38
7.1 Tax Returns. 38
7.2 Tax Liabilities 39
7.3 Redetermined Tax Liabilities, Refunds and
Carrybacks 41
7.4 Consolidated Return Liability. 41
7.5 Indemnity for Breach. 42
7.6 Notice of Indemnity Issue. 42
7.7 Audit Matters. 42
7.8 Cooperation and Exchange of Information. 43
7.9 Section 338(h)(10) Election. 43
7.10 Record Retention. 45
7.11 Tax Sharing Agreements. 45
7.12 Certain Taxes and Fees. 45
ARTICLE VIII CONDITIONS OF PURCHASE 45
8.1 General Conditions. 45
8.2 Conditions to Obligation of Buyer 46
8.3 Conditions to Obligation of Seller 47
ARTICLE IX CLOSING DELIVERIES 47
9.1 Deliveries by Seller to Buyer at Closing. 47
9.2 Deliveries by Buyer to Seller at Closing. 48
ARTICLE X TERMINATION OF OBLIGATIONS 48
10.1 Termination of Agreement 48
10.2 Effect of Termination 49
ARTICLE XI INDEMNIFICATION; SURVIVAL 49
11.1 Obligations of Seller 49
11.2 Obligations of Buyer 49
11.3 Procedure 50
11.4 Survival 51
11.5 Limitations on Indemnification 51
11.6 Treatment of Payments 52
11.7 Remedies Exclusive 52
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TABLE OF CONTENTS
(continued)
11.8 Mitigation 52
ARTICLE XII GENERAL 53
12.1 Usage 53
12.2 Amendments; Waivers 53
12.3 Schedules; Exhibits 53
12.4 Further Assurances 54
12.5 Governing Law 54
12.6 Headings 54
12.7 Counterparts 54
12.8 Parties in Interest 54
12.9 Waiver 55
12.10 Severability 55
12.11 No Consequential or Punitive Damages 55
12.12 Knowledge Convention 55
12.13 Notices 55
12.14 Publicity and Reports 56
12.15 Integration 57
12.16 Expenses 57
12.17 No Assignment 57
12.18 Representation By Counsel; Interpretation 57
12.19 Reference of Disputes to Senior Officers of
Seller and Buyer 57
12.20 Resolution of Disputes. 58
12.21 No Third Party Beneficiaries. 59
12.22 Language. 60
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