Exhibit 4.19
ASSET AND CAPITAL CONTRIBUTION AGREEMENT
THIS ASSET AND CAPITAL CONTRIBUTION AGREEMENT (this "Agreement") made
and entered into this 1st day of July, 2005, by and among READY MIX USA, INC.,
an Alabama corporation ("RMUSA"), CEMEX SOUTHEAST HOLDINGS LLC, a Delaware
limited liability company ("Cemex"), and CEMEX SOUTHEAST LLC, a Delaware
limited liability company ("Company").
W-I-T-N-E-S-S-E-T-H :
WHEREAS, RMUSA and Cemex are the sole members of Company; and
WHEREAS, RMUSA and Cemex have agreed to each make an asset and capital
contribution (the "Contribution") to Company pursuant to terms contained
herein; and
WHEREAS, subsequent to the Contribution, Company will own and operate
the RMUSA Assets and the Cemex Assets, both of which terms are defined below,
in connection with the cement production and terminal business at the RMUSA
Business Location and the Cemex Business Locations, both of which terms are
defined below.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, the receipt, adequacy and sufficiency of which are
hereby acknowledged, RMUSA and Cemex agree as follows:
ARTICLE 1
TRANSFER OF ASSETS
1.1 Assets To Be Contributed By RMUSA. Subject to the terms
hereinafter set forth, RMUSA hereby transfers, conveys, assigns and delivers,
and agrees to cause each of its Affiliates (as defined herein) to transfer,
convey, assign and deliver, to Company those assets described on Schedule
1.1(a) which are currently owned by RMUSA or any of its Affiliates and used or
intended for use primarily in, or which are being utilized or operated by RMUSA
or any of its Affiliates primarily in its cement terminal location located in
Birmingham, Alabama (the "RMUSA Assets") and the business associated with said
assets (the "RMUSA Business"). The location listed on Schedule 1.1(a)-1 is
referred to sometimes herein as the "RMUSA Business Location." Notwithstanding
the foregoing, the assets, properties and rights described on Schedule 1.1(b)
shall not be transferred, conveyed, assigned or delivered to Company under this
Agreement (the "Retained RMUSA Assets").
1.2 Assets To Be Contributed By Cemex. Subject to the terms
hereinafter set forth, Cemex hereby transfers, conveys, assigns and delivers,
and agrees to cause each of its Affiliates to transfer, convey, assign and
deliver, to Company those assets described on Schedule 1.2(a) which are
currently owned by Cemex or any of its Affiliates and used or intended for use
primarily in, or which are being utilized or operated by Cemex or any of its
Affiliates primarily in its cement production and terminal business locations
in the Cemex Boundaries (the "Cemex Assets") and the business associated with
said assets (the "Cemex Business", and together with the RMUSA Business, the
"Business"). The locations listed on Schedule 1.2(a)-1 are referred to
sometimes herein as the "Cemex Business Locations". Notwithstanding the
foregoing, the assets, properties and rights described on Schedule 1.2(b) shall
not be transferred, conveyed, assigned or delivered to Company under this
Agreement (the "Retained Cemex Assets").
ARTICLE 2
ASSIGNED VALUES
2.1 Values Assigned to RMUSA Assets And Cemex Assets. RMUSA and Cemex
agree, for purposes of this Agreement, that:
(a) the value assigned to the RMUSA Assets is equal to the sum of
$1,000,000.00, plus the adjustments made pursuant to Section 2.2 and 2.3 below
(the "RMUSA Value"); and
(b) the value assigned to the Cemex Assets is equal to the sum of
$371,859.275.15 ($375,000,000.00 - $3,140,724.85), plus the adjustments made
pursuant to Section 2.2 and 2.3 below (the "Cemex Value").
2.2 Prorations. Except for any accounts payable of Cemex or its
Affiliates, arising out of the ordinary course of the Cemex Business, which
shall be valued at face value (net of discounts) at close of business on the
Contribution Date and subject to adjustment pursuant to Section 2.3 below
("Cemex Accounts Payable"), Cemex and RMUSA each acknowledge and agree that
RMUSA shall be responsible for the expenses relating to the RMUSA Assets, and
Cemex shall be responsible for the expenses relating to the Cemex Assets, up to
and through the Contribution Date (for example, ad valorem taxes and utilities)
and that such expenses shall be paid by them at or before the Contribution
Date. To the extent that a period of time for the assessment of any of the
expenses (for example, property taxes) shall be due both before and after the
Contribution Date, the same shall be prorated as of the Contribution Date.
RMUSA and Cemex acknowledge and agree that one or more of such prorations may
occur or be reconciled subsequent to the Contribution Date.
2.3 Estimated Values; Adjustments.
(a) The RMUSA Value shall be (i) increased by (w) any cash contributed
to the Company by RMUSA on the Contribution Date; (x) the value of the
inventory of sand, gravel, cement, admixtures, fuel, other raw material and
finished goods on hand constituting RMUSA Inventory, which shall all be valued
at book value at close of business on the Contribution Date; (y) the value of
the inventory of tools, parts and related items constituting RMUSA Inventory,
which shall all be valued at book value at close of business on the
Contribution Date; and (z) the value of all deposits and prepaid items at close
of business on the Contribution Date (the "RMUSA Prepaids").
(b) The Cemex Value shall be (i) increased by (v) any cash contributed
to the Company by Cemex on the Contribution Date; (w) the value of the
inventory of sand, gravel, cement, admixtures, fuel, other raw material and
finished goods on hand constituting Cemex Inventory, which shall all be valued
at book value at close of business on the Contribution Date; (x) the value of
the inventory of tools, parts and related items constituting Cemex Inventory,
which shall all be valued at book value at close of business on the
Contribution Date; (y) the value of all deposits and prepaid items at close of
business on the Contribution Date (the "Cemex Prepaids"); and (z) the amount,
if any, by which the Cemex Accounts Receivable, valued at face value at close
of business on the Contribution Date, exceed the Cemex Accounts Payable, and
(ii) decreased by the amount, if any, by which the Cemex Accounts Payable
exceed the Cemex Accounts Receivable. For the purpose of calculating the Cemex
Accounts Receivable: (i) accounts receivable that are less than sixty (60) days
past due will be valued at face value as of the close of business on the
Contribution Date; (ii) accounts receivable that are more than sixty (60) days
and less than ninety (90) days past due will be valued at 90% of face value as
of the close of business on the Contribution Date; and (iii) accounts
receivable that are more than ninety (90) days past due will be valued at 75%
of the face value as of the close of business on the Contribution Date.
(c) (i) Within thirty (30) days after the Contribution Date, (x) Cemex
shall deliver to the Company and RMUSA a working capital statement reflecting
the current assets, the Cemex Prepaids and the Cemex Accounts Payable assigned
by Cemex pursuant to this Agreement as of the close of business on the
Contribution Date, with each item valued as contemplated in Section 2.2 or
2.3(b), as the case may be (the "Cemex Working Capital Statement") and (y)
RMUSA shall deliver to the Company and Cemex a working capital statement
reflecting the current assets and the RMUSA Prepaids assigned by RMUSA pursuant
to this Agreement as of the close of business on the Contribution Date, with
each item valued as contemplated in Section 2.2 or 2.3(a), as the case may be
(the "RMUSA Working Capital Statement").
(ii) Upon receipt of the Cemex Working Capital Statement,
RMUSA and its independent certified public accountants shall have the
right during the succeeding 30-day period to review and audit the
accounts represented by the line items set forth on the Cemex Working
Capital Statement and to examine and review all records and work
papers and other supporting documents used to prepare such statement.
Cemex shall give RMUSA full access at all reasonable times to the
working papers relating to the Cemex Working Capital Statement,
including but not limited to any descriptions of the methodology,
procedures, internal audits and analysis undertaken in connection with
the preparation of the Cemex Working Capital Statement. RMUSA shall
notify Cemex in writing, on or before the last day of the 30-day
period, of any good faith objections to the Cemex Working Capital
Statement, setting forth a detailed explanation of the objections and
the dollar amount of each such objection. If RMUSA does not deliver
such notice within such 30-day period, the Cemex Working Capital
Statement shall be deemed to have been irrevocably accepted by RMUSA
and the Company.
(iii) Upon receipt of the RMUSA Working Capital Statement,
Cemex and its independent certified public accountants shall have the
right during the succeeding 30-day period to review and audit the
accounts represented by the line items set forth on the RMUSA Working
Capital Statement and to examine and review all records and work
papers and other supporting documents used to prepare such statement.
RMUSA shall give Cemex full access at all reasonable times to the
working papers relating to the RMUSA Working Capital Statement,
including but not limited to any descriptions of the methodology,
procedures, internal audits and analysis undertaken in connection with
the preparation of the RMUSA Working Capital Statement. Cemex shall
notify RMUSA in writing, on or before the last day of the 30-day
period, of any good faith objections to the RMUSA Working Capital
Statement, setting forth a detailed explanation of the objections and
the dollar amount of each such objection. If Cemex does not deliver
such notice within such 30-day period, the RMUSA Working Capital
Statement shall be deemed to have been irrevocably accepted by Cemex
and the Company.
(iv) If any party in good faith objects to line items set
forth on the Cemex Working Capital Statement, or the RMUSA Working
Capital Statement, as the case may be, the parties shall attempt to
resolve any such objections within 30 days of receipt by the
corresponding party of any such objections. If the parties are unable
to resolve the matter within such 30-day period, they shall jointly
appoint an impartial nationally recognized independent certified
public accounting firm (the "Impartial Accounting Firm") mutually
acceptable to the parties (or, if they cannot agree on a mutually
acceptable firm, they shall cause their respective accounting firms to
select such firm) within five (5) days after the end of such 30-day
period to resolve any such remaining matters. Any such resolution
shall be conclusive and binding on the parties and the fees of the
Impartial Accounting Firm shall be borne as the Impartial Accounting
Firm shall determine after considering the positions asserted by the
parties in light of its final decision. The parties shall fully
cooperate with the Impartial Accounting Firm. The Impartial Accounting
Firm shall be instructed to reach its conclusion regarding the dispute
within 30 days of its appointment to settle the dispute.
(v) Adjustments to the values contemplated in paragraphs (a)
and (b) of this Section 2.3 shall be made pursuant to the Cemex
Working Capital Statement and the RMUSA Working Capital Statement,
after their acceptance by the parties or the resolution of all
disputes in connection therewith, pursuant to the provisions of this
paragraph 2.3(c) Upon any adjustment to the RMUSA Value or the Cemex
Value, as contemplated above, in the event that the sum of RMUSA Value
under this Agreement and the RMUSA Value under the Ready Mix LLC
Contribution Agreement, as finally determined (the "Aggregate RMUSA
Contribution"), is less than the sum of the Cemex Value under this
Agreement and the Cemex Value under the Ready Mix LLC Contribution
Agreement, as finally determined (the "Aggregate Cemex Contribution"),
then within ten (10) days following such final determination RMUSA
shall make a cash contribution (as part of its Contribution) to Ready
Mix LLC in an amount equal to such shortfall. In the event the
Aggregate RMUSA Contribution is greater than the Aggregate Cemex
Contribution, then within ten (10) days following such final
determination Cemex shall make a cash contribution (as part of its
Contribution) to Company in an amount equal to such shortfall.
(d) In connection with the preparation of the Cemex Working Capital
Statement and the RMUSA Working Capital Statement, each of RMUSA and Cemex
shall be entitled, for a period of thirty (30) days following the Contribution
Date, to conduct a review of Company's physical inventory.
ARTICLE 3
CONTRIBUTION DATE
3.1 Contribution Date. The Contribution shall be made by RMUSA and
Cemex simultaneously with the entering into of this Agreement (the
"Contribution Date").
ARTICLE 4
DELIVERIES
4.1 Deliveries By RMUSA. Contemporaneously with the execution and
delivery of this Agreement, RMUSA shall deliver or cause to be delivered the
following:
(a) To Company:
(i) A xxxx of sale and assignment evidencing the contribution
to Company of those items described in paragraph 2 of Schedule 1.1(a),
duly executed by RMUSA;
(ii) A limited warranty deed for each parcel of RMUSA Land
duly executed by RMUSA, evidencing the contribution of the RMUSA Land
to Company (the "RMUSA Warranty Deed");
(iii) A Title Policy for each parcel of RMUSA Land;
(iv) Any sales tax and real estate transfer tax returns,
notice of sale of assets, inventory resale certificate or like
governmental report required or permitted by any Governmental
Authority having jurisdiction over the RMUSA Real Property;
(v) An affidavit pursuant to the Foreign Investment and Real
Property Transfer Act in respect of the transfer of RMUSA Land;
(vi) Duly executed and assigned certificates of title for all
vehicles/rolling stock being contributed to Company as part of the
RMUSA Assets;
(vii) Resolutions adopted by the directors of RMUSA
unanimously authorizing the execution and delivery of this Agreement
and the transactions contemplated hereunder and appointing the
person(s) authorized to consummate this transaction on behalf of RMUSA
(the "RMUSA Authorized Person(s)");
(viii) A current Certificate of Good Standing of RMUSA from
the state in which the RMUSA Business Location is located;
(ix) A certificate executed by an authorized officer of RMUSA
as to the incumbency of the RMUSA Authorized Person(s);
(x) Possession of the RMUSA Assets;
(xi) To the extent assignable, an assignment of the RMUSA
Permits;
(xii) An instrument of assignment and assumption with respect
to each RMUSA Assumed Contract (the "RMUSA Agreement Assignment and
Assumption"), duly executed by RMUSA;
(xiii) An Assignment and Assumption Agreement and Lessor and
Lessee Estoppel Agreement with respect to each RMUSA Lease
substantially in the form attached hereto as Exhibit A ("RMUSA Lease
Assignment");
(xiv) The Cement Supply Agreement duly executed by RMUSA, in
its capacity as manager of Ready Mix LLC; and
(xv) $7,000,000 by wire transfer in immediately available
funds to the account designated by the Company.
(b) To Company and Cemex:
(i) The Limited Liability Company Agreement of Cemex
Southeast LLC; dated July 1, 2005 (the "Cemex LLC Agreement"), duly
executed by RMUSA.
4.2 Deliveries By Cemex. Contemporaneously with the execution and
delivery of this Agreement, Cemex shall deliver or cause to be delivered the
following:
(a) To Company:
(i) A xxxx of sale and assignment evidencing the contribution
to Company of those items described in paragraph 2 of Schedule 1.2(a),
duly executed by Cemex;
(ii) A limited warranty deed for each parcel of Cemex Land
duly executed by Cemex, evidencing the contribution of the Cemex Land
to Company (the "Cemex Warranty Deed");
(iii) A Title Policy for each parcel of Cemex Land;
(iv) Any sales tax and real estate transfer tax returns,
notice of sale of assets, inventory resale certificate or like
governmental report required or permitted by any Governmental
Authority having jurisdiction over the Cemex Real Property;
(v) An affidavit pursuant to the Foreign Investment and Real
Property Transfer Act in respect of the transfer of Cemex Land;
(vi) Duly executed and assigned Certificates of Title for all
vehicles/rolling stock being contributed to Company as part of the
Cemex Assets;
(vii) Resolutions adopted by the directors of Cemex
unanimously authorizing the execution and delivery of this Agreement
and the transactions contemplated hereunder and appointing the
person(s) authorized to consummate this transaction on behalf of Cemex
(the "Cemex Authorized Person(s)");
(viii) A current Certificate of Good Standing of Cemex from
each state in which a Cemex Business Location is located;
(ix) A certificate executed by an authorized officer of Cemex
as to the incumbency of the Cemex Authorized Person(s);
(x) Possession of the Cemex Assets;
(xi) To the extent assignable, an assignment of the Cemex
Permits;
(xii) An instrument of assignment and assumption with respect
to each Cemex Assumed Contract (the "Cemex Agreement Assignment and
Assumption"), duly executed by Cemex; and
(xiii) An Assignment and Assumption Agreement and Lessor and
Lessee Estoppel Agreement with respect to each Cemex Lease
substantially in the form attached hereto as Exhibit B ("Cemex Lease
Assignment").
(b) To Company and RMUSA:
(i) The Cemex LLC Agreement, duly executed by Cemex.
4.3 Deliveries By Company. Contemporaneously with the execution and
delivery of this Agreement, Company shall deliver or cause to be delivered:
(a) To each of RMUSA and Cemex, the Cemex LLC Agreement, duly executed
by Company;
(b) To Ready Mix LLC, the Cement Supply Agreement, duly executed by
Company;
(c) To RMUSA, the RMUSA Agreement Assignment and Assumption, duly
executed by Company;
(d) To Cemex, the Cemex Agreement Assignment and Assumption, duly
executed by Company;
(e) To Cemex, a Cemex Lease Assignment with respect to each Cemex
Lease, duly executed by Company; and
(f) To RMUSA, a RMUSA Lease Assignment with respect to each RMUSA
Lease, duly executed by Company.
4.4 Consents. Notwithstanding anything to the contrary contained in
this Agreement, this Agreement shall not constitute an agreement to transfer,
sell or otherwise assign any instrument, Contract, license or Permit of the
Cemex Business or the RMUSA Business which would otherwise be a Transferred
Asset but which is not permitted to be assigned in connection with a
transaction of the type contemplated by this Agreement (collectively, the
"Unassigned Contracts"). To the extent permitted under the terms of each
Unassigned Contract, the beneficial interest in and to each Unassigned Contract
shall in any event pass to Company at the Closing, and each of Cemex and RMUSA,
as the case may be, covenants and agrees to cooperate with Company in any
lawful and economically reasonable arrangement to provide Company with Cemex's
or RMUSA's, as the case may be, entire interest in the benefits under each of
the Unassigned Contracts. Cemex or RMUSA, as the case may be, shall exercise or
exploit its rights and options under all such Unassigned Contracts referred to
in this Section 4.4 only as reasonably directed by Company; provided, that
Company shall be responsible for any liability incurred by Cemex or RMUSA, as
the case may be, pursuant to such direction and, provided, further, that
Company shall not direct Cemex or RMUSA, as the case may be, not to attempt to
obtain a Required Contractual Consent for an Unassigned Contract. If Company
receives an economic benefit under an Unassigned Contract, Company shall accept
the burdens and perform the obligations under such Unassigned Contract as
subcontractor of Cemex or RMUSA, as the case may be, to the extent of the
benefit received, and to the extent such burdens and obligations would have
constituted an Assumed Liability if such Unassigned Contract had been
transferred to Company at the Contribution. Furthermore, if the other
party(ies) to an Unassigned Contract subsequently Consent to the assignment of
such Contract to Company, Company shall thereupon agree to assume and perform
all liabilities and the obligations arising thereunder after the date of such
Consent, at which time such Unassigned Contract shall be deemed a Transferred
Asset, without the payment of further consideration, and the obligations so
assumed thereunder shall be deemed Assumed Liabilities.
ARTICLE 5
LIABILITIES
5.1 Limitation on Liabilities of RMUSA to be Assumed by Company.
Notwithstanding any provision of this Agreement to the contrary, Company shall
not assume or become liable to RMUSA, or any other Person, for any liabilities
or obligations of RMUSA or any of its Affiliates whether accrued, absolute,
contingent or otherwise, except for those liabilities of RMUSA and its
Affiliates described on Schedule 5.1 (the "RMUSA Assumed Liabilities"), which
Company hereby assumes and agrees to perform, satisfy and discharge when due.
5.2 Limitation on Liabilities of Cemex to be Assumed by Company.
Notwithstanding any provision of this Agreement to the contrary, Company shall
not assume or become liable to Cemex, or any other Person, for any liabilities
or obligations of Cemex or any of its Affiliates whether accrued, absolute,
contingent or otherwise, except for those liabilities of Cemex and its
Affiliates described on Schedule 5.2 (the "Cemex Assumed Liabilities") which
the Company hereby assumes and agrees to perform, satisfy and discharge when
due.
ARTICLE 6
CERTAIN POST-CONTRIBUTION MATTERS
6.1 Further Acts.
(a) RMUSA and Cemex shall, respectively, assist Company in planning
for and accomplishing the orderly transfer of the RMUSA Assets and Cemex Assets
to Company as of the Contribution Date and shall take all steps reasonably
requested by Company in furtherance thereof. From time to time, at the request
of Company, whether at or after the Contribution Date and without further
consideration, RMUSA, Cemex and their respective officers and employees will
do, execute, acknowledge and deliver to Company all further acts, instruments,
and assurances, in recordable form, that are reasonably required by Company to
effectuate the terms and conditions of this Agreement and the Contribution
contemplated hereunder. In addition to the foregoing, on or before the day
which is sixty (60) days following the Contribution Date, Cemex shall cause (i)
all of the Cemex Required Contractual Consents to be obtained, (ii) the Cemex
Permits to be assigned to the Company, and (iii) all certificates of title for
all vehicles/rolling stock being contributed to the Company as part of the
Cemex Assets to be duly executed and assigned to the Company. In addition to
the foregoing, on or before the day which is sixty (60) days following the
Contribution Date, RMUSA shall cause (i) all of the RMUSA Required Contractual
Consents to be obtained, (ii) the RMUSA Permits to be assigned to the Company,
and (iii) all certificates of title for all vehicles/rolling stock being
contributed to the Company as part of the RMUSA Assets to be duly executed and
assigned to the Company. The parties covenant and agree that following the
Contribution Date they shall take all commercially reasonable actions necessary
at their own respective cost to clarify, correct, remove or satisfy any matters
of title or survey as to which either party may have an objection that affect
any parcel of real property that is contributed or conveyed by either party to
Company. From time to time, at the request of RMUSA or Cemex, whether at or
after the Contribution Date and without further consideration, Company and its
officers and employees will do, execute, acknowledge and deliver to RMUSA or
Cemex, as the case may be, all further acts, instruments, and assurances, in
recordable form, that are reasonably required by RMUSA or Cemex, as the case
may be, to effectuate the terms and conditions of this Agreement and the
assumption of the RMUSA Assumed Liabilities or the Cemex Assumed Liabilities,
as the case may be, contemplated hereunder.
(b) The agreements of RMUSA and Cemex in (a) above shall include,
without limitation, the execution and delivery of deeds, assignments, bills of
sale, affidavits, agreements, consents, certificates and other documents or
instruments which RMUSA or Cemex, as applicable, shall be unable to deliver as
of the Contribution Date and RMUSA and Cemex, as applicable, shall diligently
take whatever steps or actions subsequent to the Contribution Date as may be
necessary in order to effectuate delivery of each of the same.
6.2 Continued Access to Records. RMUSA and Cemex shall, respectively,
preserve for a period of five (5) years after the Contribution Date their
respective records and documents which, in Company's reasonable opinion, relate
to the RMUSA Assets and the Cemex Assets, respectively, any of the
representations or warranties of RMUSA and Cemex, as applicable, contained
herein, or the conduct or operation of the RMUSA Assets and Cemex Assets in the
Business by Company subsequent to Contribution and will grant Company such
reasonable access to and ability to copy all such records and documents as may
be needed by Company.
6.3 Accounts Receivable. In the event that Cemex receives any payments
subsequent to the Contribution Date relating to any Cemex Accounts Receivable
outstanding on or after such date, such payment shall be the property of, and
shall be forwarded and remitted to Company as hereinafter provided. After the
Contribution Date Cemex shall and shall cause its Affiliates to pay to Company
on a bi-monthly basis all amounts received after the Contribution Date by Cemex
with respect to Cemex Accounts Receivable.
6.4 Publicity. Unless and only to the extent required to be made
pursuant to any applicable Law, regulation or other requirement of any
Governmental Authority, or by any listing agreement with a national securities
exchange or trading market, none of RMUSA, Cemex or Company shall make any
public announcement or issue any press release regarding this Agreement or the
consummation of the transactions contemplated hereby without the prior written
consent of the other party hereto, which consent shall not be unreasonably
withheld.
6.5 Insurance. Each of Cemex and Company acknowledges that the RMUSA
Retained Policies will not continue to insure the RMUSA Assets or the RMUSA
Business after the Contribution Date and that it is incumbent upon Company to
obtain substitute policies of insurance that provide insurance coverage for the
RMUSA Assets and the RMUSA Business. Each of Cemex and Company hereby further
acknowledges that in the event any casualty or loss, including a product
liability or workers' compensation claim, relating to the RMUSA Assets or RMUSA
Business occurs prior to or on the Contribution Date, such loss shall be
payable solely from the RMUSA Retained Policies. Each of Cemex and Company
hereby further acknowledges that in the event any casualty or loss, including a
product liability or workers' compensation claim, relating to the RMUSA Assets
or RMUSA Business occurs after the Contribution Date, such loss shall be
payable solely from such substitute policies. Any such substitute policies
shall include a waiver of any rights of subrogation that the insurance carriers
underwriting such policies may have against RMUSA or RMUSA's Affiliates, or
under the RMUSA Retained Policies.
6.6 Employment Matters. Cemex shall cause the transfer to Company of
the employees of Cemex and its Affiliates associated with the Cemex Assets and
the Cemex Business ("Cemex Transferred Employees"). Cemex shall maintain, or
cause to be maintained, employee benefit and compensation plans, programs and
arrangements for the benefit of the Cemex Transferred Employees.
6.7 Cemex Environmental Indemnity. Cemex, in addition to its other
indemnity obligations otherwise provided in this Agreement, agrees to indemnify
and hold harmless Company and its officers, shareholders, members, managers,
directors, employees, agents, successors, and assigns (the "Cemex Environmental
Indemnitees"), against and in respect of, any and all damages, claims, losses,
liabilities, and expenses (including without limitation, reasonable legal,
accounting, consulting, engineering and other expenses) that may be incurred by
any of the Cemex Environmental Indemnitees, or assessed against any of the
Cemex Environmental Indemnitees by any other party or parties (including,
without limitation, a governmental entity) arising out of, in connection with,
or relating to the subject matter of: (1) the breach or inaccuracy of any of
the representations and warranties set forth in Section 7.7; (2) any Cemex
Environmental Condition which exists as of the Contribution Date, even if not
discovered until after the Contribution Date, including, without limitation,
remediation of such condition and loss of life, injury to persons or property,
or damage to natural resources arising from such condition; (3) any violation
of an Environmental Law prior to the Contribution Date which relates to the
Cemex Real Property or the Cemex Business; or (4) the off-site transportation,
storage, disposal, treatment or recycling of Hazardous Materials generated by
or on behalf of the Cemex Business on or prior to the Contribution Date,
including, without limitation, any claims related to remediation of such
Hazardous Materials and loss of life, injury to persons or property, or damage
to natural resources arising from such Hazardous Materials. Such damages,
claims, losses, liabilities, and expenses may sometimes be referred to herein
as "Cemex Environmental Liabilities." This indemnity shall survive the
Contribution Date only for a period of five (5) years after the Contribution
Date. Any testing or investigation which RMUSA or Company deems reasonably
necessary in order to determine whether any environmental indemnity obligations
of Cemex exist hereunder may be conducted at any time prior to the termination
of this indemnity obligation at the expense of RMUSA.
6.8 RMUSA Environmental Indemnity. RMUSA, in addition to its other
indemnity obligations otherwise provided in this Agreement, agrees to indemnify
and hold harmless Company and its officers, shareholders, members, managers,
directors, employees, agents, successors, and assigns (the "RMUSA Environmental
Indemnitees"), against and in respect of, any and all damages, claims, losses,
liabilities, and expenses (including without limitation, reasonable legal,
accounting, consulting, engineering and other expenses) that may be incurred by
any of the RMUSA Environmental Indemnitees, or assessed against any of the
RMUSA Environmental Indemnitees by any other party or parties (including,
without limitation, a governmental entity) arising out of, in connection with,
or relating to the subject matter of: (1) the breach or inaccuracy of any of
the representations and warranties set forth in Section 8.7; (2) any RMUSA
Environmental Condition which exists as of the Contribution Date, even if not
discovered until after the Contribution Date, including, without limitation,
remediation of such condition and loss of life, injury to persons or property,
or damage to natural resources arising from such condition; (3) any violation
of an Environmental Law prior to the Contribution Date which relates to the
RMUSA Real Property or the RMUSA Business; or (4) the off-site transportation,
storage, disposal, treatment or recycling of Hazardous Materials generated by
or on behalf of the RMUSA Business on or prior to the Contribution Date,
including, without limitation, any claims related to remediation of such
Hazardous Materials and loss of life, injury to persons or property, or damage
to natural resources arising from such Hazardous Materials. Such damages,
claims, losses, liabilities, and expenses may sometimes be referred to herein
as "RMUSA Environmental Liabilities." This indemnity shall survive the
Contribution Date only for a period of five (5) years after the Contribution
Date. Any testing or investigation which Cemex or Company deems reasonably
necessary in order to determine whether any environmental indemnity obligations
of RMUSA exist hereunder may be conducted at any time prior to the termination
of this indemnity obligation at the expense of Cemex.
6.9 Bulk Transfer Laws. Without admitting applicability of the bulk
transfer laws of any jurisdiction, RMUSA, Cemex and Company have agreed to
waive compliance by each of RMUSA and Cemex with the laws of any jurisdiction
relating to bulk transfers which may be applicable in connection with the
transfer of the RMUSA Assets or the Cemex Assets to Company. Each of RMUSA and
Cemex shall defend, indemnify and hold harmless Company from and against any
liabilities incurred as a result of its noncompliance with any applicable bulk
transfer laws.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES BY CEMEX
Cemex hereby represents and warrants to Company that, except as set
forth in the disclosure schedule being delivered by Cemex contemporaneously
herewith (the "Cemex Disclosure Schedule"):
7.1 Existence and Authorization for Agreement; Enforceability. Cemex
is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Delaware, and has the requisite power
and authority to own, lease, and operate its properties and carry on and
operate its business as and where such business is now being conducted. Each of
the Affiliates of Cemex which are contributing Cemex Assets or Cemex Business
at the direction of or for the benefit of Cemex is an entity duly organized,
validly existing and in good standing under the laws of the State of its
organization, and has the requisite power and authority to own, lease, and
operate the Cemex Assets and the Cemex Business that it is contributing to
Company. Each of the Affiliates of Cemex which are contributing Cemex Assets or
Cemex Business to Company has been duly authorized to do so, and has taken all
necessary actions to transfer such Cemex Assets or Cemex Business to Company.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated herein, have been duly authorized by the Board of
Directors of Cemex. Cemex has taken all actions necessary to authorize it to
enter into and perform fully its obligations under this Agreement and all of
the documents or instruments otherwise contemplated herein and to consummate
the transactions contemplated herein and therein. Each of this Agreement and
the other closing documents delivered pursuant hereto has been duly executed
and delivered by Cemex and is the legal, valid and binding obligation of Cemex
enforceable in accordance with its respective terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights generally
and to the general principles of equity.
7.2 Title to and Sufficiency of Cemex Assets.
(a) Cemex or the Cemex Affiliate that contributes the Cemex Assets, as
the case may be, has good and marketable title to the Cemex Assets. Except for
(i) the Cemex Assumed Liabilities, and (ii) Permitted Encumbrances, none of the
Cemex Assets shall, at the Contribution Date, be subject to any Lien.
(b) The Cemex Assets, in conjunction with the rights, goods and
services granted, transferred or to be performed by Cemex and its Affiliates
and subsidiaries pursuant to this Agreement, constitute all the property, real
and personal, tangible and intangible, necessary for the conduct of the Cemex
Business as it is presently being conducted by Cemex or its Affiliates in all
material respects.
7.3 Taxes. Cemex will pay and satisfy, or cause to be paid and
satisfied, all property and excise and other tax obligations, penalties and
interest, imposed by any governmental entity either (i) in connection with the
Cemex Business or the Cemex Assets arising prior to the Contribution Date, and
in connection with the transactions contemplated by this Agreement, including,
but not limited to, all United States, foreign, state, provincial, county and
local income, ad valorem, excise, sales, use, withholding, unemployment, social
security or other taxes and assessments of or payable by Cemex and arising
prior to the Contribution Date, or (ii) otherwise chargeable against the Cemex
Business or the Cemex Assets, and arising prior to Contribution Date. Anything
in this Agreement to the contrary notwithstanding, the Company shall pay all
recording and filing fees and taxes, sales taxes, gross receipt taxes, tag fees
and similar expenses applicable to the transfer of the Cemex Assets from Cemex
to the Company, including but not limited to any recording or filing fees or
taxes associated with the transfer of the Cemex Real Property and any sales,
gross receipt, and tag fees or taxes associated with transferring the titles to
any vehicles. All taxes attributable to the activities of the Cemex Business
and the ownership and operation of the Cemex Assets prior to the Contribution
Date shall be the responsibility of Cemex.
7.4 Litigation. There is no claim, legal action, suit, arbitration,
governmental investigation or other legal or administrative proceeding, nor any
order, decree or judgment in progress, pending or in effect, or, to the
Knowledge of Cemex, threatened, against or relating to Cemex or any of its
Affiliates, or any of their respective directors, officers, shareholders,
employees, or properties, in each case, with respect to the Cemex Assets or the
Cemex Business, which would reasonably be expected to have a material adverse
effect on, the Cemex Assets, the Cemex Business or the transactions
contemplated by this Agreement.
7.5 Contracts; and Other Agreements.
(a) Section 7.5 of the Cemex Disclosure Schedule sets forth a list of
the Material Cemex Contracts primarily relating to the Cemex Business or the
Cemex Assets as of the date of this Agreement. Cemex has made available to each
of the Company and RMUSA a true and complete copy of each Material Cemex
Contract listed on Section 7.5 of the Cemex Disclosure Schedule. For purposes
hereof, "Material Cemex Contract" shall mean:
(i) agreements, contracts, licenses, leases of real or
personal property, indentures, mortgages, instruments, security
interests, purchase and sale orders and other similar arrangements,
commitments or understandings in each case, whether written or oral
("Contracts"), for the future acquisition or sale of any assets
involving $250,000 individually (or in the aggregate, in the case of
any related series of Contracts), other than the acquisition or sale
of inventory in the ordinary course of business;
(ii) Contracts calling for future payments to or from Cemex
or any of its Affiliates in any one year of more than $250,000 in any
one case (or in the aggregate, in the case of any related series of
Contracts), or involving the payment or receipt of $1,000,000 or more
over the lifetime of such agreements;
(iii) Contracts that contain covenants prohibiting or
limiting the right to compete of the Cemex Business or prohibiting or
restricting the ability of the owner of the Cemex Business (or any of
its Affiliates) to deal with any Person or in any geographical area;
(iv) Contracts that require the payment by or to Cemex or any
Affiliate of Cemex of a royalty, override or similar commission or fee
of more than $1,000,000 in the aggregate;
(v) Contracts that are collective bargaining agreements;
(vi) guaranties and any outstanding Contracts and instruments
relating to the borrowing of money, or any extension of credit, which
impose any Lien on any of the Cemex Assets;
(vii) Contracts involving sales agency, manufacturing,
consignment, sales representative, distributorship or marketing;
(viii) Contracts for the license to or from Cemex or any
Affiliate of Cemex to or from, as the case may be, any third party
(including to another Affiliate) of any (x) Cemex Intangible Property
or (y) intellectual property rights that are owned by any such third
party and, in each case that primarily relate to or are material to
the Cemex Business, except for contracts for the license of software
that is commercially available "off the shelf";
(ix) Contracts for the construction or acquisition of fixed
assets or other capital expenditures requiring the payment by Cemex of
more than $1,000,000 in the aggregate;
(x) Contracts that are broker's or finder's agreements;
(xi) Contracts relating to partnerships, joint ventures or
other arrangements involving a sharing of profits or expenses;
(xii) Contracts to sell, lease or otherwise dispose of any
Cemex Asset, in each case other than in the ordinary course of
business;
(xiii) except for collective bargaining agreements (which are
listed in subparagraph (v) above), Contracts relating to employment or
termination or severance benefits or arrangements;
(xiv) Contracts relating to the leasing of or other
arrangement for use of real property or material personal property;
(xv) Contracts that include any obligation to make payments,
contingent or otherwise, arising out of the prior acquisition or
disposition of a business;
(xvi) Contracts which, upon the consummation of the
transactions contemplated by this Agreement, will (either alone or
upon the occurrence of any additional acts or events) result in any
payment or benefits (whether of severance pay or otherwise) becoming
due, or the acceleration or vesting of any rights to any payment or
benefits, from Company, Cemex or any of their respective Affiliates to
any officer, director, consultant or employee thereof; and
(xvii) Contracts entered into outside of the ordinary course
of business or which are material to the Cemex Business.
(b) With respect to each Material Cemex Contract, (i) each such
Contract is a valid and binding agreement of Cemex or its Affiliates and is in
full force and effect in all material respects, (ii) Cemex has no Knowledge of
any material default by any third party under any such Contract which default
has not been cured or waived and which default by any third party would
reasonably be expected to result in a material adverse effect on (i) the Cemex
Assets or the business, financial condition or results of operations of the
Cemex Business, taken as a whole, or (ii) on the ability of Cemex and its
Affiliates to consummate the transactions contemplated hereby or perform any of
their obligations hereunder (a "Cemex Material Adverse Effect") and (iii) there
is no material default by Cemex or its Affiliates under any such Contract which
default has not been cured or waived and which default would reasonably be
expected to result in a Cemex Material Adverse Effect.
7.6 Compliance with Laws. The Cemex Business is presently complying in
all material respects with all applicable Laws and Judgments, except for such
failures to comply which, individually or in the aggregate, would not
reasonably be expected to result in a Cemex Material Adverse Effect. The Cemex
Business and Cemex and its Affiliates have all Permits necessary for the
conduct of the Cemex Business as currently conducted, other than those the
absence of which, individually or in the aggregate, would not reasonably be
expected to result in a Cemex Material Adverse Effect, and there are no
Proceedings pending, or to the Knowledge of Cemex, threatened which may result
in the revocation, termination, cancellation or suspension of any such Permit
except those that, individually or in the aggregate, would not reasonably be
expected to result in a Cemex Material Adverse Effect; it being understood that
nothing in this Section 7.6 is intended to address any failure to comply with
any Law, Judgment or Permit (including Environmental Laws or
environmentally-related Judgments or Permits) that is the subject of any other
representation or warranty set forth herein. All of the Cemex Permits are
listed in Section 7.6 of the Cemex Disclosure Schedule, together with any
information relative to any requirements applicable to the assignability of the
same.
7.7 Environmental:
(a) Definitions. For the purpose of this Agreement, the following
words and phrases shall have the following meanings:
"Cemex Environmental Condition" shall mean any condition of the
Environment with respect to the Cemex Real Property or property located in the
vicinity of the Cemex Real Property that results from the ownership,
possession, use, occupation, construction and/or improvement to or operation of
the Cemex Business on the Cemex Real Property, that (i) exists as of the
Contribution Date, and (ii) is in violation of applicable Environmental Law as
of the Contribution Date or involves concentrations of Hazardous Materials in
soils, surface waters, groundwater, land, stream sediments, or surface or
subsurface strata that are in excess of applicable remediation standards or
guidelines, in effect as of the Contribution Date, that are applicable in the
jurisdiction in which the relevant real property is located.
For purposes of this Section 7.7 only, the term "Cemex Real Property"
shall mean the Cemex Real Property as referred to in Schedule 1.2(a)(i) and any
leased real property upon which a Cemex Business Location is operated.
(b) Environmental Representations, Warranties, and Obligations. With
reference to the Cemex Real Property and the Cemex Business, Cemex represents
and warrants that, to the Knowledge of Cemex, Cemex and its Affiliates are
presently in substantial compliance with all Environmental Laws applicable to
the Cemex Real Property and the Cemex Business, and no Cemex Environmental
Conditions exist that are material, whether individually or in the aggregate.
7.8 No Violations. The execution, delivery and performance by Cemex of
this Agreement and each of the other documents or agreements to which it is or
will be a party pursuant hereto, and the consummation by Cemex and its
Affiliates of the transactions contemplated by this Agreement and such other
documents and agreements, do not and will not (i) violate any provision of the
certificate of formation or limited liability company agreement of Cemex or the
articles of incorporation, by-laws or similar governing documents of any of its
Affiliates or subsidiaries, or (ii) (x) violate any Law, Permit or Judgment
applicable to Cemex or any of its Affiliates or subsidiaries, or any of their
respective properties or assets, or (y) subject to obtaining the Consents set
forth in Section 7.8 of the Cemex Disclosure Schedule (the "Cemex Required
Contractual Consents"), violate, conflict with, result in a breach of any
provision of or the loss of any benefit under, constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a default)
under, result in the termination of or a right of termination or cancellation
under, accelerate the performance required by, or result in the creation of any
Lien upon any of the respective properties or assets of Cemex or any of its
Affiliates under, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which Cemex or any of its Affiliates is a party, or
by which they or any of their respective properties or assets may be bound or
affected, except (in the case of clause (y) above) for such violations,
conflicts, breaches or defaults which, either individually or in the aggregate,
will not have and would not be reasonably likely to have a Cemex Material
Adverse Effect.
7.9 Consents. No consent is required to be obtained by Cemex (or by
any Affiliate) from, and no notice or filing is required to be given by Cemex
(or by any Affiliate) to or made by Cemex (or by any Affiliate) with, any
Governmental Authority in connection with the execution, delivery and
performance by Cemex of this Agreement, other than in all cases where the
failure to obtain such Consent or to give or make such notice or filing would
not, individually or in the aggregate, reasonably be expected to result in a
Cemex Material Adverse Effect.
7.10 Financial Information. True and complete copies of the Cemex
Financial Statements are included in the Cemex Disclosure Schedule. The Cemex
Financial Statements have been prepared from, are in accordance with and
accurately reflect the books and records of the Cemex Business, comply in all
material respects with applicable accounting requirements, fairly present, in
all material respects, the results of operations of the Cemex Business for the
respective periods indicated, and were prepared in accordance with GAAP applied
consistently during such periods, except as set forth in the footnotes thereto,
and except that the Interim Cemex Financial Statements are subject to normal
year-end adjustments and do not contain all of the footnote disclosure required
by GAAP.
7.11 Absence of Changes.
(a) Since August 31, 2004, (i) the Cemex Business has been operated in
the ordinary course in a manner consistent with past practice and (ii) there
has not been a change, event, development or circumstance that has had or would
reasonably be expected to have a Cemex Material Adverse Effect, but for
purposes of this Section 7.11(a), with respect to clause (i) of the definition
of Cemex Material Adverse Effect shall exclude any change or development
involving (w) a prospective change arising out of any proposed or adopted
legislation, or any other proposal or enactment by any governmental, regulatory
or administrative authority, (x) general conditions applicable to the economy
of the United States, including changes in interest rates, (y) conditions or
effects resulting from the announcement of the existence and terms of this
Agreement, or (z) conditions or factors affecting the industry in the United
States in which the Cemex Business operates, taken as a whole; provided, with
respect to clauses (w) or (x) above, that such change, event, development or
circumstance does not affect the Cemex Business to a materially greater extent
than other participants in the industry in the United States in which the Cemex
Business operates generally.
(b) Without limiting the foregoing, since August 31, 2004, neither
Cemex nor any of its Affiliates has with respect to the Cemex Business:
(i) granted or committed to grant any bonus, commission, or
other form of incentive compensation or increased or committed to
increase the compensation, fees or pension, welfare, fringe or other
benefits provided or payable to or in respect of any employees of the
Cemex Business, except for customary bonuses and regular salary
increases made in the ordinary course of business, consistent with
past practices, or granted any severance or termination pay;
(ii) except in the ordinary course, written off any accounts
receivable without adequate consideration;
(iii) made any material change in any method of accounting
(for book or Tax purposes) or accounting practice;
(iv) purchased or otherwise acquired, or sold, leased,
transferred or otherwise disposed of any material properties or
material assets of the Cemex Business, except in the ordinary course
of business, consistent with past practices;
(v) entered into any leases with respect to the Cemex Real
Property;
(vi) terminated or amended any Material Cemex Contract;
(vii) entered into, terminated or amended any Contracts or
other agreements with respect to intellectual property rights, except
in the ordinary course of business;
(viii) suffered any material damage or material loss to the
assets of the Cemex Business;
(ix) permitted or suffered any material Lien on any Cemex
Asset, other than Permitted Encumbrances;
(x) commenced or initiated any lawsuit, action or proceeding
with respect to the Cemex Business or Cemex Assets, except in the
ordinary course of business;
(xi) incurred any indebtedness, material liability or
obligation (whether absolute, accrued, contingent or otherwise) with
respect to the Cemex Business, except in the ordinary course of
business, consistent with past practices;
(xii) waived, abandoned or otherwise disposed of any material
rights in or to any intangible property related to the Cemex Business;
or
(xiii) agreed (whether or not in writing) to do any of the
foregoing.
7.12 Transactions with Affiliates. No Affiliate of Cemex is an
employee, consultant, competitor, customer, distributor, supplier or vendor of,
or is party to any contractual obligations with Cemex relating to the Cemex
Business and no officer or director of Cemex is an Affiliate of any competitor,
customer, distributor, supplier or vendor of the Cemex Business. None of the
Cemex Assets are owned by an Affiliate of Cemex or subject to any license or
similar arrangement allowing use thereof by an Affiliate.
7.13 Condition of Cemex Assets. To Cemex's Knowledge, there are no
defects in or concerning the buildings, equipment or the tangible personal
property occupied, operated or owned by Cemex or its Affiliates as a part of
the Cemex Business which, individually or in the aggregate, would reasonably be
expected to result in a Cemex Material Adverse Effect. All of the Cemex Assets
are in good operating condition and repair, ordinary wear and tear excepted,
and are suitable for the uses for which such Cemex Assets were intended. Except
as expressly set forth in this Agreement, (i) Cemex expressly disclaims any
other representation and warranty of any kind or nature, express or implied, as
to the condition, value or quality of the Cemex Assets and (ii) Cemex
specifically disclaims any representation or warranty of merchantability, usage
or fitness for any particular purpose with respect to any of the Cemex Assets.
7.14 Real Property Matters. (A) Cemex and its Affiliates are not
currently in default under any agreement, order, judgment or decree relating to
the Cemex Real Property, and no conditions or circumstances exist which, with
the giving of notice or passage of time or both, would constitute a default or
breach with respect to any such agreement, order, judgment or decree, (B) Cemex
and its Affiliates have paid all Taxes due and owing which if not paid could
result in a Lien on the Cemex Real Property or impose liability on Company, (C)
Neither Cemex nor its Affiliates have received any written notice of any
proposed special assessment which would affect the Cemex Real Property, (D)
Neither Cemex nor its Affiliates have received any written notice of any
claims, causes of action, lawsuits or legal proceedings pending or threatened
regarding the ownership, use or possession of the Cemex Real Property,
including condemnation or similar proceedings, (E) Neither Cemex nor its
Affiliates have received any written notice of any violation of any zoning,
subdivision, platting, building, fire or insurance laws, ordinances or
regulations (whether related to the Cemex Real Property or the occupancy
thereof) to the extent not previously cured, including the failure of Cemex to
comply with all covenants, easements and restrictions recorded against the
Cemex Real Property, (F) Cemex and its Affiliates have not received any written
notice of any intention on the part of the issuing authority to cancel, suspend
or modify any licenses or permits relating to the Cemex Real Property, (G)
Cemex and its Affiliates are in material compliance with all recorded
covenants, easements and restrictions affecting the Cemex Real Property, and
(H) each of the Cemex Leases is in full force and effect and has not been
modified, amended, added to, or changed in any manner whatsoever except for
those amendments attached to a Cemex Lease Assignment.
7.15 Brokers and Finders. There is no investment banker, broker,
finder or other intermediary which has been retained by or is authorized to act
on behalf of Cemex or any Affiliate of Cemex who might be entitled to any fee
or commission from Cemex or any Affiliate of Cemex in connection with the
transactions contemplated by this Agreement.
7.16 Labor Matters. With respect to the Cemex Business, since January
1, 2000, there has not occurred or been threatened any material employee
strike, work stoppage, slowdown, lockout, picketing or concerted refusal to
work overtime at Cemex Business Location and there are no labor disputes
currently subject to any arbitration or administrative proceeding involving
employees of Cemex or its Affiliates who are involved in the Cemex Business
(excluding routine workers' compensation claims).
7.17 Accounts Receivable. All Cemex Accounts Receivable represent bona
fide sales actually made in the ordinary course of business and the accounts
receivable reflected in the adjustments pursuant to Section 2.3 are owed to
Cemex or its Affiliates, are not more than 120 days past due and are not
subject to offset, counterclaim or other defense.
7.18 Inventory. The Cemex Inventory, whether finished goods, work in
process or raw materials, consist of a quality and quantity usable and saleable
in the ordinary and usual course of the Cemex Business consistent with past
practice.
7.19 Employee Benefit Plans; ERISA. None of Cemex or its ERISA
Affiliates has incurred any liability under, arising out of or by operation of
Title IV of ERISA (other than for payment of premiums to the Pension Benefit
Guaranty Corporation in the ordinary course of business), and no fact or event
exists which would reasonably be expected to give rise to any such liability
that would reasonably be expected to result in a Lien on the Cemex Assets or a
liability of the Company. The employee benefit plans, programs and arrangements
applicable to the Cemex Transferred Employees have been administered in
accordance with their terms and applicable law, including ERISA and the Code,
in all material respects.
7.20 Cement Reserves. The Cemex Assets include at least twenty (20)
years of permitted limestone reserves at current production rates.
7.21 No Liabilities. There are no liabilities or obligations, secured
or unsecured, known or unknown (whether accrued, absolute, contingent or
otherwise) of Cemex or its Affiliates which in any way relate to or encumber
the Cemex Assets or the Cemex Business, except for (a) those reflected or
reserved on the Cemex Financial Statements, (b) those trade payables and
contractual obligations incurred or accrued in the ordinary and normal course
of the Cemex Business and consistent with past practice since August 31, 2004,
none of which, individually or in the aggregate, is material, and none of which
is for breach of warranty or contract or for tort infringement, (c) those under
the Cemex Assumed Contracts, (d) those under the Cemex Permits, (e)
Environmental Liabilities, and (f) any taxes accruing in the ordinary course of
the Cemex Business, none of such taxes being the responsibility or obligation
of Company (other than those ad valorem taxes which will be prorated as of the
Contribution Date).
ARTICLE 8
REPRESENTATIONS AND WARRANTIES BY RMUSA
RMUSA hereby represents and warrants to Company that, except as set
forth in the disclosure schedule being delivered by RMUSA contemporaneously
herewith (the "RMUSA Disclosure Schedule"):
8.1 Existence and Authorization for Agreement; Enforceability. RMUSA
is a corporation duly organized, validly existing and in good standing under
the laws of the State of Alabama, and has the requisite power and authority to
own, lease, and operate its properties and carry on and operate the RMUSA
Business as and where the RMUSA Business is now being conducted. The execution
and delivery of this Agreement, and the consummation of the transactions
contemplated herein, have been duly authorized by the Board of Directors of
RMUSA. RMUSA has taken all actions necessary to authorize it to enter into and
perform fully its obligations under this Agreement and all of the documents or
instruments otherwise contemplated herein and to consummate the transactions
contemplated herein and therein. Each of this Agreement and the other closing
documents delivered pursuant hereto has been duly executed and delivered by
RMUSA and is the legal, valid and binding obligation of RMUSA enforceable in
accordance with its respective terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally and to the
general principles of equity.
8.2 Title to and Sufficiency of RMUSA Assets.
(a) RMUSA has good and marketable title to the RMUSA Assets. Except
for (i) the RMUSA Assumed Liabilities, and (ii) Permitted Encumbrances, none of
the RMUSA Assets shall, at the Contribution Date, be subject to any Lien.
(b) The RMUSA Assets, in conjunction with the rights, goods and
services granted, transferred or to be performed by RMUSA and its subsidiaries
pursuant to this Agreement, constitute all the property, real and personal,
tangible and intangible, necessary for the conduct of the RMUSA Business as it
is presently being conducted by RMUSA in all material respects.
8.3 Taxes. RMUSA will pay and satisfy, or cause to be paid and
satisfied, all property and excise and other tax obligations, penalties and
interest, imposed by any governmental entity either (i) in connection with the
RMUSA Business or the RMUSA Assets arising prior to the Contribution Date, and
in connection with the transactions contemplated by this Agreement, including,
but not limited to, all United States, foreign, state, provincial, county and
local income, ad valorem, excise, sales, use, withholding, unemployment, social
security or other taxes and assessments of or payable by RMUSA and arising
prior to the Contribution Date, or (ii) otherwise chargeable against the RMUSA
Business or the RMUSA Assets, and arising prior to Contribution Date. Anything
in this Agreement to the contrary notwithstanding, the Company shall pay all
recording and filing fees and taxes, sales taxes, gross receipt taxes, tag fees
and similar expenses applicable to the transfer of the RMUSA Assets from RMUSA
to the Company, including but not limited to any recording or filing fees or
taxes associated with the transfer of the RMUSA Real Property and any sales,
gross receipt, and tag fees or taxes associated with transferring the titles to
any vehicles. All taxes attributable to the activities of the RMUSA Business
and the ownership and operation of the RMUSA Assets prior to the Contribution
Date shall be the responsibility of RMUSA.
8.4 Litigation. There is no claim, legal action, suit, arbitration,
governmental investigation or other legal or administrative proceeding, nor any
order, decree or judgment in progress, pending or in effect, or, to the
Knowledge of RMUSA, threatened, against or relating to RMUSA or any of its
Affiliates, or any of their respective directors, officers, shareholders,
employees, or properties, in each case, with respect to the RMUSA Assets or the
RMUSA Business, which would reasonably be expected to have a material adverse
effect on, the RMUSA Assets, the RMUSA Business or the transactions
contemplated by this Agreement.
8.5 Contracts; and Other Agreements.
(a) Section 8.5 of the RMUSA Disclosure Schedule sets forth a list of
the Material RMUSA Contracts primarily relating to the RMUSA Business or the
RMUSA Assets as of the date of this Agreement. RMUSA has made available to each
of the Company and RMUSA a true and complete copy of each Material RMUSA
Contract listed on Section 8.5 of the RMUSA Disclosure Schedule. For purposes
hereof, "Material RMUSA Contract" shall mean:
(i) Contracts for the future acquisition or sale of any
assets involving $250,000 individually (or in the aggregate, in the
case of any related series of Contracts), other than the acquisition
or sale of inventory in the ordinary course of business;
(ii) Contracts calling for future payments to or from RMUSA
or any of its Affiliates in any one year of more than $250,000 in any
one case (or in the aggregate, in the case of any related series of
Contracts), or involving the payment or receipt of $1,000,000 or more
over the lifetime of such agreements;
(iii) Contracts that contain covenants prohibiting or
limiting the right to compete of the RMUSA Business or prohibiting or
restricting the ability of the owner of the RMUSA Business (or any of
its Affiliates) to deal with any Person or in any geographical area;
(iv) Contracts that require the payment by or to RMUSA or any
Affiliate of RMUSA of a royalty, override or similar commission or fee
of more than $1,000,000 in the aggregate;
(v) Contracts that are collective bargaining agreements;
(vi) guaranties and any outstanding Contracts and instruments
relating to the borrowing of money, or any extension of credit, which
impose any Lien on any of the RMUSA Assets;
(vii) Contracts involving sales agency, manufacturing,
consignment, sales representative, distributorship or marketing;
(viii) Contracts for the license to or from RMUSA or any
Affiliate of RMUSA to or from, as the case may be, any third party
(including to another Affiliate) of any (x) RMUSA Intangible Property
or (y) intellectual property rights that are owned by any such third
party and, in each case that primarily relate to or are material to
the RMUSA Business, except for contracts for the license of software
that is commercially available "off the shelf";
(ix) Contracts for the construction or acquisition of fixed
assets or other capital expenditures requiring the payment by RMUSA of
more than $1,000,000 in the aggregate;
(x) Contracts that are broker's or finder's agreements;
(xi) Contracts relating to partnerships, joint ventures or
other arrangements involving a sharing of profits or expenses;
(xii) Contracts to sell, lease or otherwise dispose of any
RMUSA Asset, in each case other than in the ordinary course of
business;
(xiii) except for collective bargaining agreements (which are
listed in subparagraph (v) above), Contracts relating to employment or
termination or severance benefits or arrangements;
(xiv) Contracts relating to the leasing of or other
arrangement for use of real property or material personal property;
(xv) Contracts that include any obligation to make payments,
contingent or otherwise, arising out of the prior acquisition or
disposition of a business;
(xvi) Contracts which, upon the consummation of the
transactions contemplated by this Agreement, will (either alone or
upon the occurrence of any additional acts or events) result in any
payment or benefits (whether of severance pay or otherwise) becoming
due, or the acceleration or vesting of any rights to any payment or
benefits, from Company, RMUSA or any of their respective Affiliates to
any officer, director, consultant or employee thereof; and
(xvii) Contracts entered into outside of the ordinary course
of business or which are material to the RMUSA Business.
(b) With respect to each Material RMUSA Contract, (i) each such
Contract is a valid and binding agreement of RMUSA and is in full force and
effect in all material respects, (ii) RMUSA has no Knowledge of any material
default by any third party under any such Contract which default has not been
cured or waived and which default by any third party would reasonably be
expected to result in a material adverse effect on (i) the RMUSA Assets or the
business, financial condition or results of operations of the RMUSA Business,
taken as a whole, or (ii) on the ability of RMUSA and its Affiliates to
consummate the transactions contemplated hereby or perform any of their
obligations hereunder (a "RMUSA Material Adverse Effect") and (iii) there is no
material default by RMUSA under any such Contract which default has not been
cured or waived and which default would reasonably be expected to result in a
RMUSA Material Adverse Effect.
8.6 Compliance with Laws. The RMUSA Business is presently complying in
all material respects with all applicable Laws and Judgments, except for such
failures to comply which, individually or in the aggregate, would not
reasonably be expected to result in a RMUSA Material Adverse Effect. The RMUSA
Business or RMUSA has all Permits necessary for the conduct of the RMUSA
Business as currently conducted, other than those the absence of which,
individually or in the aggregate, would not reasonably be expected to result in
a RMUSA Material Adverse Effect, and there are no Proceedings pending, or to
the knowledge of RMUSA, threatened which may result in the revocation,
termination, cancellation or suspension of any such Permit except those that,
individually or in the aggregate, would not reasonably be expected to result in
a RMUSA Material Adverse Effect; it being understood that nothing in this
Section 8.6 is intended to address any failure to comply with any Law, Judgment
or Permit (including Environmental Laws or environmentally-related Judgments or
Permits) that is the subject of any other representation or warranty set forth
herein. All of the RMUSA Permits are listed in Section 8.6 of the RMUSA
Disclosure Schedule, together with any information relative to any requirements
applicable to the assignability of the same.
8.7 Environmental:
(a) Definitions. For the purpose of this Agreement, the following
words and phrases shall have the following meanings:
"RMUSA Environmental Condition" shall mean any condition of the
Environment with respect to the RMUSA Real Property or property located in the
vicinity of the RMUSA Real Property that results from the ownership,
possession, use, occupation, construction and/or improvement to or operation of
the RMUSA Business on the RMUSA Real Property, that (i) exists as of the
Contribution Date, and (ii) is in violation of applicable Environmental Law as
of the Contribution Date or involves concentrations of Hazardous Materials in
soils, surface waters, groundwater, land, stream sediments, or surface or
subsurface strata that are in excess of applicable remediation standards or
guidelines, in effect as of the Contribution Date, that are applicable in the
jurisdiction in which the relevant real property is located.
For purposes of this Section 8.7 only, the term "RMUSA Real Property"
shall mean the RMUSA Real Property as referred to in Schedule 1.1(a)-1 and any
leased real property upon which a RMUSA Business Location is operated.
(b) Environmental Representations, Warranties, and Obligations. With
reference to the RMUSA Real Property and the RMUSA Business, RMUSA represents
and warrants that, to the Knowledge of RMUSA, RMUSA is presently in substantial
compliance with all Environmental Laws applicable to the RMUSA Real Property
and the RMUSA Business, and no RMUSA Environmental Conditions exist that are
material, whether individually or in the aggregate.
8.8 No Violations. The execution, delivery and performance by RMUSA of
this Agreement and each of the other documents or agreements to which it is or
will be a party pursuant hereto, and the consummation by RMUSA of the
transactions contemplated by this Agreement and such other documents and
agreements, do not and will not (i) violate any provision of the articles of
incorporation or bylaws of RMUSA or the articles of incorporation, by-laws or
similar governing documents of any of its subsidiaries, or (ii) (x) violate any
Law, Permit or Judgment applicable to RMUSA or any of its subsidiaries, or any
of their respective properties or assets, or (y) subject to obtaining the
Consents set forth in Section 8.8 of the RMUSA Disclosure Schedule (the "RMUSA
Required Contractual Consents"), violate, conflict with, result in a breach of
any provision of or the loss of any benefit under, constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a default)
under, result in the termination of or a right of termination or cancellation
under, accelerate the performance required by, or result in the creation of any
Lien upon any of the respective properties or assets of RMUSA or any of its
Affiliates under, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which RMUSA or any of its Affiliates is a party, or
by which they or any of their respective properties or assets may be bound or
affected, except (in the case of clause (y) above) for such violations,
conflicts, breaches or defaults which, either individually or in the aggregate,
will not have and would not be reasonably likely to have a RMUSA Material
Adverse Effect.
8.9 Consents. No consent is required to be obtained by RMUSA (or by
any Affiliate) from, and no notice or filing is required to be given by RMUSA
(or by any Affiliate) to or made by RMUSA (or by any Affiliate) with, any
Governmental Authority in connection with the execution, delivery and
performance by RMUSA of this Agreement, other than in all cases where the
failure to obtain such Consent or to give or make such notice or filing would
not, individually or in the aggregate, reasonably be expected to result in a
RMUSA Material Adverse Effect.
8.10 Financial Information. True and complete copies of the RMUSA
Financial Statements are included in the RMUSA Disclosure Schedule. The RMUSA
Financial Statements have been prepared from, are in accordance with and
accurately reflect the books and records of the RMUSA Business, comply in all
material respects with applicable accounting requirements, fairly present, in
all material respects, the results of operations of the RMUSA Business for the
respective periods indicated, and were prepared in accordance with GAAP applied
consistently during such periods, except as set forth in the footnotes thereto,
and except that the Interim RMUSA Financial Statements are subject to normal
year-end adjustments and do not contain all of the footnote disclosure required
by GAAP.
8.11 Absence of Changes.
(a) Since August 31, 2004, (i) the RMUSA Business has been operated in
the ordinary course in a manner consistent with past practice and (ii) there
has not been a change, event, development or circumstance that has had or would
reasonably be expected to have a RMUSA Material Adverse Effect, but for
purposes of this Section 8.11(a), with respect to clause (i) of the definition
of RMUSA Material Adverse Effect shall exclude any change or development
involving (w) a prospective change arising out of any proposed or adopted
legislation, or any other proposal or enactment by any governmental, regulatory
or administrative authority, (x) general conditions applicable to the economy
of the United States, including changes in interest rates, (y) conditions or
effects resulting from the announcement of the existence and terms of this
Agreement, or (z) conditions or factors affecting the industry in the United
States in which the RMUSA Business operates, taken as a whole; provided, with
respect to clauses (w) or (x) above, that such change, event, development or
circumstance does not affect the RMUSA Business to a materially greater extent
than other participants in the industry in the United States in which the RMUSA
Business operates generally.
(b) Without limiting the foregoing, since August 31, 2004, neither
RMUSA nor any of its Affiliates has with respect to the RMUSA Business:
(i) granted or committed to grant any bonus, commission, or
other form of incentive compensation or increased or committed to
increase the compensation, fees or pension, welfare, fringe or other
benefits provided or payable to or in respect of any employees of the
RMUSA Business, except for customary bonuses and regular salary
increases made in the ordinary course of business, consistent with
past practices, or granted any severance or termination pay;
(ii) except in the ordinary course, written off any accounts
receivable without adequate consideration;
(iii) made any material change in any method of accounting
(for book or Tax purposes) or accounting practice;
(iv) purchased or otherwise acquired, or sold, leased,
transferred or otherwise disposed of any material properties or
material assets of the RMUSA Business, except in the ordinary course
of business, consistent with past practices;
(v) entered into any leases with respect to the RMUSA Real
Property;
(vi) terminated or amended any Material RMUSA Contract;
(vii) entered into, terminated or amended any Contracts or
other agreements with respect to intellectual property rights, except
in the ordinary course of business;
(viii) suffered any material damage or material loss to the
assets of the RMUSA Business;
(ix) permitted or suffered any material Lien on any RMUSA
Asset, other than Permitted Encumbrances;
(x) commenced or initiated any lawsuit, action or proceeding
with respect to the RMUSA Business or RMUSA Assets, except in the
ordinary course of business;
(xi) incurred any indebtedness, material liability or
obligation (whether absolute, accrued, contingent or otherwise) with
respect to the RMUSA Business, except in the ordinary course of
business, consistent with past practices;
(xii) waived, abandoned or otherwise disposed of any material
rights in or to any intangible property related to the RMUSA Business;
or
(xiii) agreed (whether or not in writing) to do any of the
foregoing.
8.12 Transactions with Affiliates. No Affiliate of RMUSA is an
employee, consultant, competitor, customer, distributor, supplier or vendor of,
or is party to any contractual obligations with RMUSA relating to the RMUSA
Business and no officer or director of RMUSA is an Affiliate of any competitor,
customer, distributor, supplier or vendor of the RMUSA Business. None of the
RMUSA Assets are owned by an Affiliate of RMUSA or subject to any license or
similar arrangement allowing use thereof by an Affiliate.
8.13 Condition of RMUSA Assets. To RMUSA's Knowledge, there are no
defects in or concerning the buildings, equipment or the tangible personal
property occupied, operated or owned by RMUSA as a part of the RMUSA Business
which, individually or in the aggregate, would reasonably be expected to result
in a RMUSA Material Adverse Effect. All of the RMUSA Assets are in good
operating condition and repair, ordinary wear and tear excepted, and are
suitable for the uses for which such RMUSA Assets were intended. Except as
expressly set forth in this Agreement, (i) RMUSA expressly disclaims any other
representation and warranty of any kind or nature, express or implied, as to
the condition, value or quality of the RMUSA Assets and (ii) RMUSA specifically
disclaims any representation or warranty of merchantability, usage or fitness
for any particular purpose with respect to any of the RMUSA Assets.
8.14 Real Property Matters. (A) RMUSA is not currently in default
under any agreement, order, judgment or decree relating to the RMUSA Real
Property, and no conditions or circumstances exist which, with the giving of
notice or passage of time or both, would constitute a default or breach with
respect to any such agreement, order, judgment or decree, (B) RMUSA has paid
all Taxes due and owing which if not paid could result in a Lien on the RMUSA
Real Property or impose liability on Company, (C) RMUSA has not received any
written notice of any proposed special assessment which would affect the RMUSA
Real Property, (D) RMUSA has not received any written notice of any claims,
causes of action, lawsuits or legal proceedings pending or threatened regarding
the ownership, use or possession of the RMUSA Real Property, including
condemnation or similar proceedings, (E) RMUSA has not received any written
notice of any violation of any zoning, subdivision, platting, building, fire or
insurance laws, ordinances or regulations (whether related to the RMUSA Real
Property or the occupancy thereof) to the extent not previously cured,
including the failure of RMUSA to comply with all covenants, easements and
restrictions recorded against the RMUSA Real Property, (F) RMUSA has not
received any written notice of any intention on the part of the issuing
authority to cancel, suspend or modify any licenses or permits relating to the
RMUSA Real Property, (G) RMUSA is in material compliance with all recorded
covenants, easements and restrictions affecting the RMUSA Real Property, and
(H) each of the RMUSA Leases is in full force and effect and has not been
modified, amended, added to, or changed in any manner whatsoever except for
those amendments attached to a RMUSA Lease Assignment.
8.15 Brokers and Finders. There is no investment banker, broker,
finder or other intermediary which has been retained by or is authorized to act
on behalf of RMUSA or any Affiliate of RMUSA who might be entitled to any fee
or commission from RMUSA or any Affiliate of RMUSA in connection with the
transactions contemplated by this Agreement.
8.16 Labor Matters. Except as set forth on Section 8.16 of the RMUSA
Disclosure Schedule, with respect to the RMUSA Business, since January 1, 2000,
there has not occurred or been threatened any material employee strike, work
stoppage, slowdown, lockout, picketing or concerted refusal to work overtime at
RMUSA Business Location and there are no labor disputes currently subject to
any arbitration or administrative proceeding involving employees of RMUSA who
are involved in the RMUSA Business (excluding routine workers' compensation
claims).
8.17 Accounts Receivable. Reserved.
8.18 Inventory. The RMUSA Inventory, whether finished goods, work in
process or raw materials, consist of a quality and quantity usable and saleable
in the ordinary and usual course of the RMUSA Business consistent with past
practice.
8.19 Employee Benefit Plans; ERISA. None of RMUSA or its ERISA
Affiliates has incurred any liability under, arising out of or by operation of
Title IV of ERISA (other than for payment of premiums to the Pension Benefit
Guaranty Corporation in the ordinary course of business), and no fact or event
exists which would reasonably be expected to give rise to any such liability
that would reasonably be expected to result in a Lien on the RMUSA Assets or a
liability of the Company.
8.20 No Liabilities. There are no liabilities or obligations, secured
or unsecured, known or unknown (whether accrued, absolute, contingent or
otherwise) of RMUSA which in any way relate to or encumber the RMUSA Assets or
the RMUSA Business, except for (a) those reflected or reserved on the RMUSA
Financial Statements, (b) those trade payables and contractual obligations
incurred or accrued in the ordinary and normal course of the RMUSA Business and
consistent with past practice since August 31, 2004, none of which,
individually or in the aggregate, is material, and none of which is for breach
of warranty or contract or for tort infringement, (c) those under the RMUSA
Assumed Contracts, (d) those under the RMUSA Permits, (e) Environmental
Liabilities, and (f) any taxes accruing in the ordinary course of the RMUSA
Business, none of such taxes being the responsibility or obligation of Company
(other than those ad valorem taxes which will be prorated as of the
Contribution Date).
ARTICLE 9
INDEMNIFICATION
9.1 Indemnity By Cemex. Subject to the provisions of this Article 9,
Cemex agrees to pay and to indemnify fully, hold harmless and defend each
Company Indemnified Party from and against any and all claims and/or Damages
arising out of or relating to:
(a) any inaccuracy or breach of any representation or warranty of
Cemex contained in this Agreement;
(b) any breach of any covenant or agreement of Cemex contained in this
Agreement;
(c) the liabilities and obligations of Cemex or any of its Affiliates
arising out of the operation or ownership of the Cemex Assets or the Cemex
Business on or prior to the Contribution Date, except obligations or
liabilities assumed by the Company pursuant to this Agreement; or
(d) all obligations or liabilities that arise, whether before, on or
after, the Contribution Date, out of, or in connection with, the Retained Cemex
Assets;
provided that Cemex shall have an obligation to indemnify any Company
Indemnified Party for Damages pursuant to this Section 9.1 only to the extent
that such Damages are in excess of (i) any amounts recovered by any Company
Indemnified Party pursuant to any contract to which any Company Indemnified
Party is a party and (ii) any insurance proceeds received with respect thereto
(exclusive of amounts recovered which are subject to retrospective payments or
premiums); provided, further, that upon making any payment to any Company
Indemnified Party, Cemex shall be subrogated to all rights of the Company
Indemnified Party against any third party in respect of the losses to which
such payment relates, and such Company Indemnified Party will execute upon
request all instruments reasonably necessary to evidence and perfect such
subrogation rights. Nothing in this Section 9.1 shall require a Company
Indemnified Party to seek to recover Damages from any third party before making
a claim for indemnification pursuant to Article 9.
9.2 Indemnity By RMUSA. Subject to the provisions of this Article 9,
RMUSA agrees to pay and to indemnify fully, hold harmless and defend each
Company Indemnified Party from and against any and all claims and/or Damages
arising out of or relating to:
(a) any inaccuracy or breach of any representation or warranty of
RMUSA contained in this Agreement;
(b) any breach of any covenant or agreement of RMUSA contained in this
Agreement;
(c) the liabilities and obligations of RMUSA or any of its Affiliates
arising out of the operation or ownership of the RMUSA Assets or the RMUSA
Business on or prior to the Contribution Date, except obligations or
liabilities assumed by the Company pursuant to this Agreement; or
(d) all obligations or liabilities that arise, whether before, on or
after, the Contribution Date, out of, or in connection with, the Retained RMUSA
Assets;
provided that RMUSA shall have an obligation to indemnify any Company
Indemnified Party for Damages pursuant to this Section 9.2 only to the extent
that such Damages are in excess of (i) any amounts recovered by any Company
Indemnified Party pursuant to any contract to which any Company Indemnified
Party is a party and (ii) any insurance proceeds received with respect thereto
(exclusive of amounts recovered which are subject to retrospective payments or
premiums); provided, further, that upon making any payment to any Company
Indemnified Party, RMUSA shall be subrogated to all rights of the Company
Indemnified Party against any third party in respect of the losses to which
such payment relates, and such Company Indemnified Party will execute upon
request all instruments reasonably necessary to evidence and perfect such
subrogation rights. Nothing in this Section 9.2 shall require a Company
Indemnified Party to seek to recover Damages from any third party before making
a claim for indemnification pursuant to Article 9.
9.3 Indemnity By Company. Subject to the provisions of this Article 9,
Company agrees to pay and to indemnify fully, hold harmless and defend
(a) each Cemex Indemnified Party from and against any and all claims
and/or Damages arising out of or relating to:
(i) any breach of any covenant or agreement of Company
contained in this Agreement; or
(ii) the Cemex Assumed Liabilities; and
(b) each RMUSA Indemnified Party from and against any and all claims
and/or Damages arising out of or relating to:
(i) any breach of any covenant or agreement of Company
contained in this Agreement; or
(ii) the RMUSA Assumed Liabilities;
provided that Company shall have an obligation to indemnify any Contributor
Indemnified Party for Damages pursuant to this Section 9.3 only to the extent
that such Damages are in excess of (i) any amounts recovered by any Contributor
Indemnified Party pursuant to any contract to which any Contributor Indemnified
Party is a party and (ii) any insurance proceeds received with respect thereto
(exclusive of amounts recovered which are subject to retrospective payments or
premiums); provided, further, that upon making any payment to any Contributor
Indemnified Party, Company shall be subrogated to all rights of the Contributor
Indemnified Party against any third party in respect of the losses to which
such payment relates, and such Contributor Indemnified Party will execute upon
request all instruments reasonably necessary to evidence and perfect such
subrogation rights. Nothing in this Section 9.3 shall require a Contributor
Indemnified Party to seek to recover Damages from any third party before making
a claim for indemnification pursuant to Article 9.
9.4 Exclusive Remedy. Except as provided in Section 10.12, the right
to indemnification provided for in this Article 9 shall be the exclusive remedy
of all Company Indemnified Parties with respect to the transactions
contemplated under this Agreement.
9.5 Indemnification Procedures. The party or parties making a claim
for indemnification under Section 9.1, 9.2 or 9.3 shall be, for the purposes of
this Agreement, referred to as the "Indemnified Party" and the party or parties
against whom such claims are asserted under this Article 9 shall be, for the
purposes of this Agreement, referred to as the "Indemnifying Party." All claims
by any Indemnified Party under this Article 9 shall be asserted and resolved as
follows:
(a) In the event that (i) any claim, demand or Proceeding is asserted
or instituted by any Person other than the parties to this Agreement or their
Affiliates which could give rise to Damages for which an Indemnifying Party
could be liable to an Indemnified Party under this Agreement (such claim,
demand or Proceeding, a "Third Party Claim") or (ii) any Indemnified Party
under this Agreement shall have a claim to be indemnified by any Indemnifying
Party under this Agreement which does not involve a Third Party Claim (such
claim, a "Direct Claim"), the Indemnified Party shall with reasonable
promptness send to the Indemnifying Party a written notice specifying the
nature of such claim, demand or Proceeding and the amount or estimated amount
thereof if known (which amount or estimated amount shall not be conclusive of
the final amount, if any, of such claim, demand or Proceeding) (a "Claim
Notice").
(b) In the event of a Third Party Claim, the Indemnifying Party shall
be entitled to appoint counsel of the Indemnifying Party's choice at the
expense of the Indemnifying Party to represent the Indemnified Party and any
others the Indemnifying Party may reasonably designate in connection with such
claim, demand or Proceeding (in which case the Indemnifying Party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by any Indemnified Party except as set forth below); provided that
such counsel is reasonably acceptable to the Indemnified Party. Notwithstanding
an Indemnifying Party's election to appoint counsel to represent an Indemnified
Party in connection with a Third Party Claim, an Indemnified Party shall have
the right to employ separate counsel, and the Indemnifying Party shall bear the
reasonable fees, costs and expenses of such separate counsel if (i) the use of
counsel chosen by the Indemnifying Party to represent the Indemnified Party
would present such counsel with a conflict of interest or (ii) the Indemnifying
Party shall not have employed counsel to represent the Indemnified Party within
a reasonable time after notice of the institution of such Third Party Claim. If
requested by the Indemnifying Party, the Indemnified Party agrees to cooperate
with the Indemnifying Party and its counsel in contesting any claim, demand or
Proceeding which the Indemnifying Party defends, or, if appropriate and related
to the claim, demand or Proceeding in question, in making any counterclaim
against the person asserting the Third Party Claim, or any cross-complaint
against any person. No Third Party Claim may be settled or compromised (i) by
the Indemnified Party without the prior written consent of the Indemnifying
Party, which consent shall not be unreasonably withheld or delayed or (ii) by
the Indemnifying Party without the prior written consent of the Indemnified
Party, which consent shall not be unreasonably withheld or delayed. In the
event any Indemnified Party settles or compromises or consents to the entry of
any Judgment with respect to any Third Party Claim without the prior written
consent of the Indemnifying Party, each Indemnified Party shall be deemed to
have waived all rights against the Indemnifying Party for indemnification under
this Article 9 with respect to such Third Party Claim.
(c) In the event of a Direct Claim the Indemnifying Party shall notify
the Indemnified Party within 30 days Business Days of receipt of a Claim Notice
whether or not the Indemnifying Party disputes such claim.
(d) From and after the delivery of a Claim Notice under this
Agreement, at the reasonable request of the Indemnifying Party, each
Indemnified Party shall grant the Indemnifying Party and its representatives
all reasonable access to the books, records and properties of such Indemnified
Party to the extent reasonably related to the matters to which the Claim Notice
relates. All such access shall be granted during normal business hours and
shall be granted under conditions, which will not unreasonably interfere with
the business and operations of such Indemnified Party. The Indemnifying Party
will not, and shall require that its representatives do not, use (except in
connection with such Claim Notice) or disclose to any third person other than
the Indemnifying Party's representatives (except as may be required by
applicable Law) any information obtained pursuant to this Section 9.5(d).
9.6 Monetary and Payment Limitations.
(a) Neither Cemex nor RMUSA shall have any obligation to indemnify a
Company Indemnified Party pursuant to Sections 9.1(a) or 9.2(a), respectively,
unless the aggregate amount of Damages suffered by all Company Indemnified
Parties in respect of such claims exceeds $1,000,000, in which case the Company
Indemnified Parties shall be entitled to recover all Damages including the
$1,000,000.
(b) Notwithstanding any provision of this Agreement to the contrary,
the aggregate liability of Cemex or RMUSA for Damages in respect of all claims
for indemnification pursuant to Sections 9.1(a) or 9.2(a), respectively, shall
in no event exceed the Cemex Value or the RMUSA Value, respectively. NO PARTY
SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, SPECIAL, PUNITIVE, OR SIMILAR
DAMAGES, EXCEPT TO THE EXTENT ASSERTED BY, AWARDED, PAID OR PAYABLE TO ANY
THIRD PARTY.
(c) The parties mutually agree that payment to an Indemnified Party by
an Indemnifying Party for Damages shall be paid solely from the required EBITDA
distributions to be paid to the Indemnifying Party pursuant to Section 6.1 of
the Cemex LLC Agreement and Section 6.1 of the Ready Mix LLC Agreement. In the
event of Damages, compensation for which is owed to the Indemnified Party by
the Indemnifying Party, the parties mutually agree that the Indemnifying Party
shall waive all rights and title it has to, and shall instruct the Manager of
the Company and the Manager of Ready Mix LLC to make to the Indemnified Party,
distributions due the Indemnifying Party from the Company under Section 6.1 of
the Cemex LLC Agreement or Ready Mix LLC under Section 6.1 of the Ready Mix LLC
Agreement until such time as the Indemnified Party has recouped the amount of
Damages incurred by the Indemnified Party. The provisions and limitations set
forth in this Section 9.6(c) will not apply to any indemnification liability of
the Company pursuant to Section 9.3.
(d) Notwithstanding the foregoing, the Indemnified Party shall not be
limited to recovery of Damages pursuant to clause (c) above with respect to
Damages arising out of or relating to any fraud by RMUSA or Cemex in connection
with this Agreement, the discussions and negotiations leading up to this
Agreement or the transaction contemplated herein, and each of RMUSA and Cemex
shall be and remain liable to the other for any Damages arising out of any such
claim or fraud.
9.7 Survival. Except for the representations and warranties in
Sections 7.2(a) and 8.2(a), which shall survive without limit, the
representations and warranties of Cemex and RMUSA contained in this Agreement
shall survive the Contribution for the applicable period set forth in this
Section 9.7, and any and all claims and causes of action for indemnification
under this Article 9 arising out of the inaccuracy or breach of any
representation or warranty of Cemex or RMUSA must be made prior to the
termination of the applicable survival period set forth in this Section 9.7.
All of the representations and warranties of Cemex and RMUSA contained in this
Agreement and any and all claims and causes of action for indemnification under
this Article 9 with respect thereto shall terminate on the second anniversary
of the date of this Agreement; provided that the representations and warranties
in Sections 7.3, 7.6, 7.19, 8.3, 8.6 and 8.19 shall survive until the
expiration of the applicable statute of limitations; provided further that the
representations and warranties in Sections 7.7 and 8.7 shall survive until the
fifth anniversary of the date of this Agreement and the representations and
warranties in Section 7.20 shall survive until the twentieth anniversary of the
date of this Agreement; it being understood that in the event notice of any
claim for indemnification under Section 9.1(a) or Section 9.2(a) shall have
been given within the applicable survival period, the representations and
warranties that are the subject of such indemnification claim shall survive
until such time as such claim is finally resolved.
9.8 Binding Nature. The indemnity obligations imposed under this
Article 9 shall be binding upon the parties hereto and their respective
successors and assigns. Wherever possible, such indemnity obligations shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of these indemnity obligations shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity without invalidating the remainder of the said
indemnity obligations.
ARTICLE 10
MISCELLANEOUS
10.1 Reliance Upon Representations and Warranties. The parties
mutually agree that notwithstanding any right of any party to investigate the
affairs of any other party and notwithstanding any Knowledge of any facts
determined or determinable by such party pursuant to such investigation or
right of investigation, each party has the right to fully rely upon the
respective representations and warranties of each other party contained in this
Agreement.
10.2 Amendments. No change, modification or amendment to this
Agreement shall be effective unless the same shall be in writing and signed by
the parties hereto.
10.3 Notices. Any and all notices or other communications required or
permitted to be given under any of the provisions of this Agreement shall be in
writing and shall be deemed to have been duly given when personally delivered
or mailed by first class registered mail, return receipt requested, addressed
to the parties at the addressees set forth below (or at such other address as
any party may specify by notice to all other parties given as aforesaid).
If to RMUSA:
Ready Mix USA, Inc.
X.X. Xxx 000000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxx
With a copy, which shall not constitute notice, to:
Phelps, Jenkins, Xxxxxx & Xxxxxx, L.L.P.
X.X. Xxx 000000
Xxxxxxxxxx, Xxxxxxx 00000-0000
Attn: Xxx X. Xxxxxx
If to Cemex:
Cemex, Inc.
000 Xxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx
With copies, which shall not constitute notice, to:
Cemex, Inc.
000 Xxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxxx
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
0000 Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxx Xx Xxxxxxx XX
If to Company:
Cemex Southeast LLC
000 Xxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxxx
10.4 Payment of Fees and Expenses. Except as otherwise provided in
this Agreement, Cemex and RMUSA shall pay all fees and expenses of such
respective party's respective counsel, accountants and all other expenses
incurred by such party incident to the negotiation, preparation and execution
of this Agreement and the consummation of the transactions contemplated hereby.
10.5 Binding Effect. This Agreement shall be binding and conclusive
upon and inure to the benefit of the respective parties hereto and their
successors and assigns.
10.6 Waiver. Failure of any party hereto to insist upon the strict
performance of any of the covenants or conditions of this Agreement or to
exercise any right or option conferred herein in one or more instances shall
not be construed as a waiver or relinquishment of any such covenant, or
condition, right or option, but the same shall remain in full force and effect.
The committing by either party of any act or thing which it is not obligated to
do hereunder shall not be deemed to impose an obligation upon it to do any such
act or thing in the future or in any way change or alter any provision of this
Agreement.
10.7 Counterparts. This Agreement may be executed by original or
facsimile signatures in several counterparts that together shall constitute but
one and the same agreement, binding on both the parties notwithstanding that
both parties have not signed the same counterpart.
10.8 Construction.
(a) This Agreement shall be construed in its entirety according to its
plain meaning and shall not be construed against the party who provided or
drafted it.
(b) Any reference to an Article, Section, Schedule or Annex is a
reference to an Article or Section of, or a Schedule or an Annex to, this
Agreement.
(c) Terms defined in the singular shall have a comparable meaning when
used in the plural, and vice versa.
(d) The words "include", "includes" and "including" are not limiting,
and shall be deemed to be followed by the phrase "without limitation".
(e) The terms "dollars" and "$" mean United States dollars.
(f) The phrases "the date of this Agreement", "the date hereof" and
terms of similar import, unless the context otherwise requires, shall be deemed
to refer to July 1, 2005.
(g) The conjunction "or" shall be understood in its inclusive sense
(and/or).
10.9 Captions. The titles of the Articles, Sections, Schedules and
Annexes of this Agreement have been assigned thereto for convenience only and
shall not be construed as limiting, defining or affecting the substantive terms
of this Agreement.
10.10 Applicable Law. This Agreement shall be construed in accordance
with the laws of the State of Georgia, without giving effect to its principles
or rules of conflict of laws.
10.11 Consent to Jurisdiction. All disputes, litigation, proceedings
or other legal actions by any party to this Agreement in connection with or
relating to this Agreement or any matters described or contemplated in this
Agreement shall be instituted in the courts of the State of Georgia, or of the
United States in the State of Georgia, in either case, sitting in Atlanta,
Georgia. Each party to this Agreement irrevocably submits to the exclusive
jurisdiction of the courts of the State of Georgia, and of the United States
sitting in the State of Georgia, in connection with any such dispute,
litigation, action or proceeding arising out of or relating to this Agreement.
Each party to this Agreement may receive the service of any process or summons
in connection with any such dispute, litigation, action or proceeding brought
in any such court by a mailed copy of such process or summons sent to it at its
address set forth, and in the manner provided, in Section 10.3 hereof. Each
party to this Agreement irrevocably waives, to the fullest extent permitted by
applicable law, any defense or objection it may now or hereafter have to the
laying of venue of any proceeding under this Agreement brought in the courts of
the State of Georgia, or of the United States in the State of Georgia, in
either case, sitting in Atlanta, Georgia, and any claim that any proceeding
under this Agreement brought in any such court has been brought in an
inconvenient forum.
10.12 Specific Performance. The parties to this Agreement agree that
irreparable damage would occur in the event that any provision of this
Agreement was not performed in accordance with the terms of this Agreement and
that the parties shall be entitled to specific performance of the terms of this
Agreement in addition to any other remedy at Law or equity.
10.13 Translation. Should this Agreement be translated into any
language other than English, the English version shall control and prevail on
any question of interpretation or otherwise.
10.14 Assignment. This Agreement shall be binding upon the respective
successors and permitted assigns of the parties hereto. This Agreement shall
not be assignable or otherwise transferable by any of Cemex, RMUSA or Company
without the prior written consent of the other parties and any attempt to so
assign or transfer this Agreement without such consent shall be void and of no
effect.
10.15 Entire Agreement. This Agreement (including the Schedules and
Exhibits hereto) and the other documents delivered pursuant hereto constitute
the full and entire understanding and agreement of the parties and supersedes
any and all prior agreements, arrangements and understandings relating to the
subject matters hereof and thereto.
10.16 Rights of Creditors and Third Parties under this Agreement. This
Agreement is entered into among the Company, RMUSA and Cemex for the exclusive
benefit of the Company, RMUSA and Cemex, and their successors and permitted
assigns. This Agreement is expressly not intended for the benefit of any
creditor of the Company or any other Person. Except and only to the extent
provided by applicable statute, no such creditor or third party shall have any
rights under this Agreement or any agreement between the Company and RMUSA or
Cemex with respect to any Contribution, or otherwise.
10.17 Certain Definitions. As used in this Agreement, the following
terms have the following meanings:
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by or under common
control with, such Person. For the purposes of this definition, "control"
(including, with correlative meaning, the terms "controlled," "controlled by"
and "under common control with") shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of management and
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise. Notwithstanding the foregoing, for purposes of this
Agreement, Company shall not be deemed to be an Affiliate of Cemex or RMUSA or
any of their respective Affiliates.
"Aggregate Cemex Contribution" has the meaning set forth in
Section 2.3(c)(v).
"Aggregate RMUSA Contribution" has the meaning set forth in
Section 2.3(c)(v).
"Agreement" has the meaning set forth in the Introduction.
"Assumed Liability" means a Cemex Assumed Liability or an
RMUSA Assumed Liability, as the context requires.
"Business" has the meaning set forth in Section 1.2.
"Business Day" means any day other than a Saturday, a Sunday
or a day on which banks in New York City are authorized or obligated by law or
executive order to close.
"Cement Supply Agreement" means the cement supply agreement
to be entered into concurrently with the execution of this Agreement, by and
between the Company and Ready Mix LLC.
"Cemex" has the meaning set forth in the Introduction.
"Cemex Accounts Payable" has the meaning set forth in Section
2.2.
"Cemex Accounts Receivable" has the meaning set forth in
Schedule 1.2(a)5.
"Cemex Agreement Assignment and Assumption" has the meaning
set forth in Section 4.2(a)(xii).
"Cemex Assets" has the meaning set forth in Section 1.2.
"Cemex Assumed Contracts" has the meaning set forth in
Schedule 1.2(a)8.
"Cemex Assumed Liabilities" has the meaning set forth in
Section 5.2.
"Cemex Authorized Person(s)" has the meaning set forth in
Section 4.2(a)(vii).
"Cemex Boundaries" means the states of Alabama, Georgia and
Mississippi, the Cemex Florida Panhandle (as defined herein) and the Cemex
Limited Tennessee Area (as defined herein).
"Cemex Business" has the meaning set forth in Section 1.2.
"Cemex Business Locations" has the meaning set forth in
Section 1.2.
"Cemex Disclosure Schedule" has the meaning set forth in
Article 7.
"Cemex Environmental Condition" has the meaning set forth in
Section 7.7(a).
"Cemex Environmental Indemnitees" has the meaning set forth
in Section 6.7.
"Cemex Environmental Liabilities" has the meaning set forth
in Section 6.7.
"Cemex Financial Statements" means the statement of income
for the Cemex Assets for the twelve months ended December 31, 2004.
"Cemex Florida Panhandle" means the following counties in the
State of Florida: Escambia, Santa Xxxx, Okaloosa, Walton, Holmes, Washington,
Jackson, Bay, Xxxxxxx, Gulf and Franklin. The Cemex Florida Panhandle shall
exclude the City of Tallahassee, Florida.
"Cemex Indemnified Party" means Cemex, Cemex's Affiliates,
directors, officers, shareholders, attorneys, accountants, agents and
employees, and their respective heirs, successors and assigns.
"Cemex Intangible Property" means intellectual property owned
by Cemex or any Affiliate of Cemex.
"Cemex Intracompany Receivables" has the meaning set forth in
Schedule 1.2(b)5.
"Cemex Inventory" has the meaning set forth in Schedule
1.2(a)3.
"Cemex Land" has the meaning set forth in Schedule 1.2(a)1.
"Cemex Leases" has the meaning set forth in Schedule 1.2(a)8.
"Cemex Lease Assignment" has the meaning set forth in Section
4.2(a)(xiii).
"Cemex LLC Agreement" has the meaning set forth in Section
4.1(b)(i).
"Cemex Limited Tennessee Area" means the Metropolitan
Statistical Areas of Chattanooga and Memphis, Tennessee.
"Cemex Material Adverse Effect" has the meaning set forth in
Section 7.5(b).
"Cemex Permits" has the meaning set forth in Schedule
1.2(a)9.
"Cemex Prepaids" has the meaning set forth in Section 2.3(b).
"Cemex Real Property" has the meaning set forth in Schedule
1.2(a)1.
"Cemex Required Contractual Consents" has the meaning set
forth in Section 7.8.
"Cemex Retained Names" has the meaning set forth in Schedule
1.2(b)(4).
"Cemex Retained Policies" has the meaning set forth in
Schedule 1.2(b)3.
"Cemex Transferred Employees" has the meaning set forth in
Section 6.6.
"Cemex Value" has the meaning set forth in Section 2.1(b).
"Cemex Warranty Deed" has the meaning set forth in Section
4.2(a)(ii).
"Cemex Working Capital Statement" has the meaning set forth
in Section 2.3(c)(i).
"Claim Notice" has the meaning set forth in Section 9.5(a).
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Company" has the meaning set forth in the Introduction.
"Company Indemnified Party" means Company, Company's
Affiliates, directors, managers, officers, members, shareholders, attorneys,
accountants, agents and employees, and their respective heirs, successors and
assigns.
"Consent" means any consent, waiver, approval, authorization,
exemption, registration or declaration.
"Contracts" has the meaning set forth in Section 7.5(a)(i).
"Contribution" has the meaning set forth in the Recitals.
"Contribution Date" has the meaning set forth in Section 3.1.
"Contributor Indemnified Party" means any Cemex Indemnified
Party or any RMUSA Indemnified Party.
"Damages" means liabilities, damages, penalties, Judgments,
assessments, losses, costs and expenses in any case, whether arising under
strict liability or otherwise (including reasonable attorneys' fees) including
lost profits, lost benefits, loss of or diminution in enterprise value and loss
of goodwill, but excluding consequential, incidental, special, punitive or
similar damages, except to the extent such consequential, incidental, special,
punitive or similar damages are asserted by, awarded, paid or payable to any
third party.
"Direct Claim" has the meaning set forth in Section 9.5(a).
"Environment" shall mean soil, surface waters, groundwater,
land, stream sediments, surface or subsurface strata, ambient air, indoor air
or indoor air quality, interior and/or exterior, including, without limitation,
any material or substance used in the physical structure, of any building or
improvement and any environmental medium.
"Environmental Law" shall mean the Resource Conservation and
Recovery Act of 1976, 42 U.S.C. Sections 6901, et seq., as amended ("RCRA");
the Comprehensive Environmental Response Compensation and Liability Act of
1980, 42 U.S.C. Sections 9601, et seq. (original act know as "CERCLA" or
"Superfund," the Amendments are known as "XXXX"); the HSWA amendments to RCRA
regulating Underground Storage Tanks ("USTS"), 42 U.S.C. " 6991-6991(i); the
Clean Air Act of 1963 as amended in 1970 and 1977, 42 U.S.C. ' 7401, et seq.
("Clean Air Act"); the Federal Water Pollution Control Act of 1976, as
subsequently amended by the Clean Water Act of 1977 and 1987, 33 U.S.C. " 1251,
et seq. ("Clean Water Act"), and the Toxic Substances Control Act of 1976, 15
U.S.C. " 2501 ("TSCA"), and all other federal, state and local laws,
regulations, rules or ordinances implementing or otherwise dealing with the
subject matter of the preceding federal statutes or otherwise relating to the
protection of human health or the Environment.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" means any entity that is a member of a
controlled group for purposes of Section 4001(a)(14) of ERISA.
"GAAP" means generally accepted accounting principles as in
effect in the United States from time to time.
"Governmental Authority" means (i) any domestic or foreign
national, state or local government, any political subdivision thereof or any
other governmental, quasi-governmental, judicial, public or statutory
instrumentality, authority, body, agency, court, department, bureau or entity,
or (ii) any arbitrator with authority to legally bind a party or any of its
Affiliates.
"Hazardous Material" shall mean any pollutant, toxic
substance including asbestos and asbestos-containing materials, hazardous
waste, hazardous material or hazardous substance as defined in or controlled by
the Environmental Law.
"Impartial Accounting Firm" has the meaning set forth in
Section 2.3(c)(iv).
"Indemnified Party" has the meaning set forth in Section 9.5.
"Indemnifying Party" has the meaning set forth in Section
9.5.
"Injunction" means any order, statute, rule, regulation,
executive order, injunction, stay, decree or restraining order.
"Interim Cemex Financial Statements" means the statement of
income for the RMUSA Assets for the nine months ended September 30, 2004.
"Interim RMUSA Financial Statements" means the statement of
income for the RMUSA Assets for the eight months ended August 31, 2004.
"IP License Agreement" means the Intellectual Property
License Agreement dated as of the date hereof by and between Cemex Trademarks
Worldwide Ltd. and the Company.
"Judgments" means any judgments, injunctions, orders, writs,
rulings or awards of any court or other judicial authority or any governmental,
administrative or regulatory authority of competent jurisdiction.
"Knowledge" shall mean, with respect to the Cemex, the actual
knowledge of the Xxxxx Xxxxxxxx Xxxxxxx, Xxxxxx Xxxxx, Xxxx Xxxxxx, Xxxxx Xxxx,
Xxxx Xxxxxxx, and Xxxxx Xxxxxxxx, and with respect to RMUSA, the actual
knowledge of Xxxx Xxxxxx Xxxxx, Xxxxx Xxxxxx, Xxxxx Xxxx, Xxxx Xxx, Xxxx
Xxxxxx, Xxxxx Xxxxxxx and Xxxxx Xxxxx.
"Laws" means any federal, state, local or foreign law,
statute, ordinance, rule, regulation, order or decree.
"Liens" means all liens (statutory or otherwise), mortgages,
pledges, charges, security interests, sureties, options, easements, covenants,
restrictions or other encumbrances whatsoever.
"Material Cemex Contract" has the meaning set forth in
Section 7.5(a).
"Material RMUSA Contract" has the meaning set forth in
Section 8.5(a).
"Permits" means all permits, authorizations, approvals,
registrations, licenses, certificates, variances and similar rights granted by
or obtained from any federal, state, local or foreign governmental,
administrative or regulatory authority.
"Permitted Encumbrances" means (a) mechanics', carriers',
warehousemens' workmens' and other similar Liens arising (I) with respect to
the Cemex Assets, in the ordinary course of the Cemex Business and (II) with
respect to the RMUSA Assets, in the ordinary course of the RMUSA Business, and
which would not, individually or in the aggregate, reasonably be expected to
have a Cemex Material Adverse Effect or a RMUSA Material Adverse Effect,
respectively, (b) Liens for taxes, assessments and other governmental charges
not yet due and payable or that may subsequently be paid without penalty or
that are being contested in good faith by appropriate proceedings, and (c) with
respect to the Real Property, encumbrances to fee simple, leasehold or easement
title for: (I) Real Property taxes or other property taxes, assessments,
governmental charges or levies not yet due; (II) easements, rights-of-way,
licenses, restrictions, reservations of mineral rights (with surface rights
being waived) or similar encumbrances that do not materially impair the
marketability, use or operation of such Real Property by the Company; and (III)
rights of tenants in possession of any such Real Property pursuant to tenant
leases to be assigned to the Company.
"Person" means an individual, a corporation, a limited
liability company, a partnership, an association, a trust or other entity or
organization.
"Proceeding" means any action, suit, demand, claim, legal or
administrative proceeding or any arbitration or other alternative dispute
resolution proceeding, hearing or investigation.
"Ready Mix LLC" means Ready Mix USA, LLC, a Delaware limited
liability company.
"Ready Mix LLC Agreement" means the Limited Liability Company
Agreement of Ready Mix USA, LLC, dated July 1, 2005.
"Ready Mix LLC Contribution Agreement" means the Asset and
Capital Contribution Agreement of Ready Mix USA, LLC dated July 1, 2005.
"Required Contractual Consent" means a Cemex Required
Contractual Consent or a RMUSA Required Contractual Consent.
"Retained Cemex Assets" has the meaning set forth in Section
1.2.
"Retained RMUSA Assets" has the meaning set forth in Section
1.1.
"RMUSA" has the meaning set forth in the Introduction.
"RMUSA Accounts Receivable" has the meaning set forth in
Schedule 1.1(b)2.
"RMUSA Agreement Assignment and Assumption" has the meaning
set forth in Section 4.1(a)(xii).
"RMUSA Assets" has the meaning set forth in Section 1.1.
"RMUSA Assumed Contracts" has the meaning set forth in
Schedule 1.1(a)8.
"RMUSA Assumed Liabilities" has the meaning set forth in
Section 5.1.
"RMUSA Authorized Person(s)" has the meaning set forth in
Section 4.1(a)(vii).
"RMUSA Boundaries" means the states of Alabama, Arkansas,
Georgia, excluding the Metropolitan Statistical Area of Brunswick, Georgia,
Mississippi and Tennessee and the RMUSA Florida Panhandle (as defined herein).
"RMUSA Business" has the meaning set forth in Section 1.1.
"RMUSA Business Location" has the meaning set forth in
Section 1.1.
"RMUSA Disclosure Schedule" has the meaning set forth in
Article 8.
"RMUSA Environmental Condition" has the meaning set forth in
Section 8.7(a).
"RMUSA Environmental Indemnitees" has the meaning set forth
in Section 6.8.
"RMUSA Environmental Liabilities" has the meaning set forth
in Section 6.8.
"RMUSA Financial Statements" means the statement of income
for the RMUSA Asset for the twelve months ended December 31, 2004.
"RMUSA Florida Panhandle" means the following counties in the
State of Florida: Escambia, Santa Xxxx, Okaloosa, Walton, Holmes, Washington,
Jackson, Bay, Xxxxxxx, Gulf, Franklin, Liberty, Xxxxxxx, Xxxx, Wakulla,
Jefferson, Madison and Xxxxxx.
"RMUSA Indemnified Party" means RMUSA, RMUSA's Affiliates,
directors, officers, shareholders, attorneys, accountants, agents and
employees, and their respective heirs, successors and assigns.
"RMUSA Intangible Property" means intellectual property owned
by RMUSA or any Affiliate of RMUSA.
"RMUSA Intracompany Receivables" has the meaning set forth in
Schedule 1.1(b)6.
"RMUSA Inventory" has the meaning set forth in Schedule
1.1(a)3.
"RMUSA Land" has the meaning set forth in Schedule 1.1(a)1.
"RMUSA Leases" has the meaning set forth in Schedule 1.1(a)8.
"RMUSA Lease Assignment" has the meaning set forth in Section
4.1(a)(xiii).
"RMUSA Material Adverse Effect" has the meaning set forth in
Section 8.5(b).
"RMUSA Permits" has the meaning set forth in Schedule
1.1(a)9.
"RMUSA Prepaids" has the meaning set forth in Section 2.3(a).
"RMUSA Real Property" has the meaning set forth in Schedule
1.1(a)1.
"RMUSA Required Contractual Consents" has the meaning set
forth in Section 8.8.
"RMUSA Retained Names" has the meaning set forth in Schedule
1.1(b)5.
"RMUSA Retained Policies" has the meaning set forth in
Schedule 1.1(b)4.
"RMUSA Transferred Employees" has the meaning set forth in
Section 6.6.
"RMUSA Value" has the meaning set forth in Section 2.1(a).
"RMUSA Warranty Deed" has the meaning set forth in Section
4.1(a)(ii).
"RMUSA Working Capital Statement" has the meaning set forth
in Section 2.3(c)(i).
"Third Party Claim" has the meaning set forth in Section
9.5(a).
"Title Company" shall mean either of First American Title
Insurance Company or Fidelity National Title Insurance Company.
"Title Policy" shall mean an ALTA owner's policy of title
insurance in a form acceptable to (i) Cemex, with respect to any such policy
issued for RMUSA Real Property and (ii) RMUSA, with respect to a policy issued
for Cemex Real Property (or, with respect to any parcel of RMUSA Real Property
or Cemex Real Property that is in a State which does not permit the issuance of
such ALTA policy, such form as shall be permitted in such State and acceptable
to Cemex or RMUSA, respectively) issued by the Title Company with respect to
such Real Property and insuring the Company's indefeasible fee simple ownership
of such Real Property as of the date hereof, subject only to the standard
exceptions and exclusions from coverage and the (i) RMUSA's Permitted
Encumbrances, with respect to any such policy issued for RMUSA Real Property
and (ii) Cemex's Permitted Encumbrances, with respect to any policy issued for
Cemex Real Property.
"Trademark License Agreement" means the Trademark License
Agreement dated as of the date hereof by and between Cemex S.A. de C.V. and the
Company.
"Transferred Asset" means a Cemex Asset or an RMUSA Asset, as
the context requires.
"Unassigned Contracts" has the meaning set forth in Section
4.4.
"WARN" has the meaning set forth in paragraph 6 of Schedule
5.1.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, this Agreement executed on the day and year first
above written.
READY MIX USA, INC.
/s/ Xxxx Xxxxxx Xxxxx
-------------------------
Xxxx Xxxxxx Xxxxx
President
CEMEX SOUTHEAST HOLDINGS LLC
/s/ Xxxxxxxx Xxxxx
---------------------------
Xxxxxxxx Xxxxx
President
CEMEX SOUTHEAST LLC
By: Cemex, Inc.
Its Manager
/s/ Xxxxxxxx Xxxxx
---------------------------
Xxxxxxxx Xxxxx
Its President
LIST OF SCHEDULES
-----------------
1.1(a) RMUSA Assets
1.1(a)-1 RMUSA Land
1.1(b) RMUSA Retained Assets
1.2(a) Cemex Assets
1.2(a)-1 Cemex Land
1.2(b) Cemex Retained Assets
1.2(b)-8 Cemex Retained Contracts
5.1 RMUSA Assumed Liabilities
5.2 Cemex Assumed Liabilities
LIST OF EXHIBITS
----------------
A Form of Cemex Lease Assignment
B Form of RMUSA Lease Assignment
Schedule 1.1(a)
RMUSA Assets
1. Real Property. Subject to the RMUSA Permitted Encumbrances, the real
property owned, or in the case of (vi) below, leased, by RMUSA or any of
its Affiliates and consisting of: (i) the real property described on
Schedule 1.1(a)-1 (the "RMUSA Land"), (ii) all buildings, structures and
improvements located on the RMUSA Land, to the extent owned by RMUSA or
any of its Affiliates, (iii) all fixtures, machinery, apparatus or
equipment affixed to the Cemex Land, including all of the electrical,
heating, plumbing, air conditioning, air compression and all other similar
systems located on the RMUSA Land, to the extent owned by RMUSA or any of
its Affiliates and to the extent that such items constitute fixtures, (iv)
all right, title and interest of RMUSA or any of its Affiliates,
reversionary or otherwise, in and to all easements, if any, in or upon the
RMUSA Land and all other rights and appurtenances belonging or in any way
pertaining to the RMUSA Land (including RMUSA's and its Affiliates' right,
title and interest in and to any mineral rights or water rights relating
to the RMUSA Land), (v) all right, title and interest of RMUSA or any of
its Affiliates in, to or under all strips and gores and any land lying in
the bed of any public road, highway or other access way, open or proposed,
adjoining the RMUSA Land and (vi) the RMUSA Leases (collectively, the
"RMUSA Real Property");
2. Personal Property. Except as described on Schedule 1.1(b), the tangible
personal property that is either located on the RMUSA Real Property or
used or intended for use primarily in, or which is being utilized or
operated by RMUSA primarily in the RMUSA Business as presently conducted,
including all off road, non-titled rolling stock, material handling
equipment, wheel loaders, track dozers, scrapers, water trucks, haul
trucks, conveyor system, aggregate processing equipment/crushers and
machinery, cement manufacturing equipment including rotary kilns, storage
silos, installed control systems, installed electric motors, conveyors,
rail engine, cement and raw material storage and handling equipment, weigh
scales, office furniture, business machines, cement/aggregate testing and
laboratory equipment, tools and fixtures;
3. Inventory. Except as described on Schedule 1.1(b), all inventory,
including all inventories of products, work in process, finished goods,
raw materials, supplies, parts, finished cement, clinker, construction
aggregate, coal and fuel, lubricants, machinery and equipment repair parts
and components, including those tools, fuel, repair parts, components and
other items, and including the supplies of coal, clay, construction
aggregate, fly and bottom ash and other raw materials and repair parts
(collectively, "RMUSA Inventory");
4. Prepaid Items. All of RMUSA's and its Affiliates' rights and interests
relating to prepaid expenses, advance payments, deposits and prepaid
items, including prepaid interest and deposits with lessors, suppliers or
utilities, which relate primarily to the RMUSA Business;
5. Reserved.
6. Books, Records and Written Materials. Except as described on Schedule
1.1(b), all of RMUSA's and its Affiliates' books and records, whether in
hard copy or in electronic format (e.g. computer files), including all
production data, equipment maintenance data, accounting records, (but
specifically excluding those files related to the Retained RMUSA
Litigation), and any inventory records, sales and sales promotional data
and materials, advertising materials, sales training materials,
educational support program materials, cost and pricing information,
business plans, quality control records and manuals, blueprints, research
and development files, records and laboratory books, patent disclosures,
correspondence, and any other records and data, in each case (i) used
primarily in or necessary for the conduct of the RMUSA Business or (ii)
that are located on the RMUSA Real Property or are within the possession
or control of those persons employed by RMUSA to work primarily for the
Business, and all books and records relating to Taxes (other than income
Taxes) with respect to the RMUSA Business; provided that nothing in this
paragraph 6 shall require RMUSA to deliver to Company or otherwise provide
Company access to any electronic records that cannot be separated from
information relating to the RMUSA Retained Assets or RMUSA's other
businesses;
7. Catalogs and Advertising Materials. RMUSA's and its Affiliates'
promotional and advertising materials relating primarily to or necessary
for the conduct of the RMUSA Business as presently conducted, including
all catalogs, brochures, plans, customer lists, supplier lists, manuals,
handbooks, equipment and parts lists, and dealer and distributor lists;
8. Assumed Contracts. Except as described on Schedule 1.1(b) and subject to
Section 4.4, all rights and benefits of RMUSA and its Affiliates in, to or
under all Contracts relating primarily to the RMUSA Business, to which
RMUSA or any of its Affiliates is a party or by which any of the RMUSA
Assets are bound, including (i) all rights of RMUSA and its Affiliates in
all purchase and sales orders relating principally to the Business, (ii)
all rights of RMUSA and its Affiliates as lessee under all leases of
personal property relating primarily to the RMUSA Business, (iii) all
Contracts with suppliers for any products, raw materials, supplies,
equipment or parts heretofore sold, or to be sold, by RMUSA and its
Affiliates used primarily in the RMUSA Business as presently conducted,
and (iv) all rights of RMUSA and its Affiliates either as lessee or lessor
under all leases affecting the RMUSA Real Property (the "RMUSA Leases"),
(all of the foregoing being collectively, the "RMUSA Assumed Contracts");
9. Permits and Approvals. All licenses, permits, approvals, variances,
emission allowances, authorizations, waivers or consents used primarily in
or necessary for the conduct of the RMUSA Business as presently conducted
or ownership or operation of the RMUSA Real Property as currently operated
and issued to RMUSA or any of its Affiliates by any Governmental
Authority, to the extent transferable (collectively, "RMUSA Permits");
10. Claims. Except as described on Schedule 1.1(b), all rights, privileges,
claims, demands, causes of action, claims in bankruptcy, indemnification
agreements with, and indemnification rights against, third parties,
warranty claims (to the extent transferable), offsets and other claims
relating to the RMUSA Assets or the RMUSA Business, but not to the extent
that they relate to the Retained RMUSA Assets or the Retained RMUSA
Liabilities; and
11. Goodwill. Any and all goodwill associated principally with the RMUSA
Business.
Schedule 1.1(a)-1
-----------------
RMUSA Land
1. 00xx Xxxxxx Xxxxx, Xxxxxx Site (Birmingham Cement Terminal)
Schedule 1.1(b)
---------------
RMUSA Retained Assets
1. Cash. All cash, bank balances, money market accounts, moneys in possession
of banks and other depositories, term or term deposits and similar cash
equivalents and cash items of, owned or held by or for the account of
RMUSA;
2. Accounts Receivable. RMUSA's and its Affiliates' accounts receivable
arising out of the conduct of the RMUSA Business and outstanding as of the
Contribution Date, including any payments received by RMUSA or any of its
Affiliates with respect thereto on or after the Contribution Date, and
unpaid interest accrued on any accounts receivable and any security or
collateral relating thereto (collectively, "RMUSA Accounts Receivable");
3. Corporate and Other Records. The corporate books and records, including
stock certificates, treasury stock, stock transfer records, corporate
seals and minute books of RMUSA (i) which are not used in or necessary for
the conduct of the RMUSA Business and (ii) which are not located on the
RMUSA Real Property or are not within the possession or control of those
persons employed to work principally for the RMUSA Business, (iii)
employee files for employees other than the RMUSA Transferred Employees,
(iv) RMUSA's Tax Returns and any tax supporting information related
thereto, and (v) any and all records related to pending or completed
litigation and claims;
4. Insurance. Any and all policies of insurance, whether or not covering the
RMUSA Assets or the RMUSA Business, that are or have been maintained or
managed through RMUSA or any of its Affiliates, including general
liability, property, casualty, product liability and workers' compensation
insurance (the "RMUSA Retained Policies"), including any and all amounts
recovered by RMUSA under such RMUSA Retained Policies;
5. Intellectual Property. All intellectual property of RMUSA and its
Affiliates, whether or not used primarily in or necessary for the conduct
of the RMUSA Business, including RMUSA's and its Affiliates' patents,
trade secrets, copyrights, trademarks, trade names, logos, slogans,
internet domain names, licenses and software, including any and all rights
(including any common law trademark rights) to the names Ready Mix USA,
Inc. and Ready Mix USA (such names, collectively, the "RMUSA Retained
Names");
6. Intracompany Receivables. All outstanding amounts, including accounts
receivable, owing to the RMUSA Business from other businesses of RMUSA or
RMUSA 's Affiliates (the "RMUSA Intracompany Receivables").
Schedule 1.2(a)
---------------
Cemex Assets
1. Real Property. Subject to the Cemex's Permitted Encumbrances, the real
property owned, or in the case of (vi) below, leased, by Cemex, Inc. or
any of its Affiliates and consisting of: (i) the real property described
on Schedule 1.2(a)-1 (the "Cemex Land"), (ii) all buildings, structures
and improvements located on the Cemex Land, to the extent owned by Cemex,
Inc. or any of its Affiliates, (iii) all fixtures, machinery, apparatus or
equipment affixed to the Cemex Land, including all of the electrical,
heating, plumbing, air conditioning, air compression and all other similar
systems located on the Cemex Land, to the extent owned by Cemex, Inc. or
any of its Affiliates and to the extent that such items constitute
fixtures, (iv) all right, title and interest of Cemex, Inc. or any of its
Affiliates, reversionary or otherwise, in and to all easements, if any, in
or upon the Cemex Land and all other rights and appurtenances belonging or
in any way pertaining to the Cemex Land (including Cemex, Inc.'s and its
Affiliates' right, title and interest in and to any mineral rights or
water rights relating to the Cemex Land), (v) all right, title and
interest of Cemex, Inc. or any of its Affiliates in, to or under all
strips and gores and any land lying in the bed of any public road, highway
or other access way, open or proposed, adjoining the Cemex Land and (vi)
the Cemex Leases (collectively, the "Cemex Real Property");
2. Personal Property. Except as described on Schedule 1.2(b), the tangible
personal property that is either located on the Cemex Real Property or
used or intended for use primarily in, or which is being utilized or
operated by Cemex primarily in the Cemex Business as presently conducted,
including all off road, non-titled rolling stock, material handling
equipment, wheel loaders, track dozers, scrapers, water trucks, haul
trucks, conveyor system, aggregate processing equipment/crushers and
machinery, cement manufacturing equipment including rotary kilns, storage
silos, installed control systems, installed electric motors, conveyors,
rail engine, cement and raw material storage and handling equipment, weigh
scales, office furniture, business machines, cement/aggregate testing and
laboratory equipment, tools and fixtures;
3. Inventory. Except as described on Schedule 1.2(b), all inventory,
including all inventories of products, work in process, finished goods,
raw materials, supplies, parts, finished cement, clinker, construction
aggregate, coal and fuel, lubricants, machinery and equipment repair parts
and components, including those tools, fuel, repair parts, components and
other items, and including the supplies of coal, clay, construction
aggregate, fly and bottom ash and other raw materials and repair parts
(collectively, "Cemex Inventory");
4. Prepaid Items. All of Cemex Inc.'s and its Affiliates' rights and
interests relating to prepaid expenses, advance payments, deposits and
prepaid items, including prepaid interest and deposits with lessors,
suppliers or utilities, which relate primarily to the Cemex Business;
5. Accounts Receivable. Except as described on Schedule 1.2(b), Cemex, Inc.'s
and its Affiliates' accounts receivable arising out of the conduct of the
Cemex Business and outstanding as of the Contribution Date, including any
payments received by Cemex, Inc. or any of its Affiliates with respect
thereto on or after the Contribution Date, and unpaid interest accrued on
any accounts receivable and any security or collateral relating thereto
(collectively, "Cemex Accounts Receivable");
6. Books, Records and Written Materials. Except as described on Schedule
1.2(b), all of Cemex Inc.'s and its Affiliates' books and records, whether
in hard copy or in electronic format (e.g. computer files), including all
production data, equipment maintenance data, accounting records, (but
specifically excluding those files related to the Retained Cemex
Litigation), any inventory records, sales and sales promotional data and
materials, advertising materials, sales training materials, educational
support program materials, cost and pricing information, business plans,
quality control records and manuals, blueprints, research and development
files, records and laboratory books, patent disclosures, correspondence,
and any other records and data, in each case (i) used primarily in or
necessary for the conduct of the Cemex Business or (ii) that are located
on the Cemex Real Property or are within the possession or control of
those persons employed by Cemex, Inc. to work primarily for the Business,
and all books and records relating to Taxes (other than income Taxes) with
respect to the Cemex Business; provided that nothing in this paragraph 6
shall require Cemex, Inc. to deliver to Company or otherwise provide
Company access to any electronic records that cannot be separated from
information relating to the Cemex Retained Assets or Cemex's other
businesses;
7. Catalogs and Advertising Materials. Cemex, Inc.'s and its Affiliates'
promotional and advertising materials relating primarily to or necessary
for the conduct of the Cemex Business as presently conducted, including
all catalogs, brochures, plans, customer lists, supplier lists, manuals,
handbooks, equipment and parts lists, and dealer and distributor lists;
8. Assumed Contracts. Except as described on Schedule 1.2(b) and subject to
Section 4.4, all rights and benefits of Cemex, Inc. and its Affiliates in,
to or under all Contracts relating primarily to the Cemex Business, to
which Cemex, Inc. or any of its Affiliates is a party or by which any of
the Cemex Assets are bound, including (i) all rights of Cemex, Inc. and
its Affiliates in all purchase and sales orders relating principally to
the Business, (ii) all rights of Cemex, Inc. and its Affiliates as lessee
under all leases of personal property relating primarily to the Cemex
Business, (iii) all Contracts with suppliers for any products, raw
materials, supplies, equipment or parts heretofore sold, or to be sold, by
Cemex, Inc. and its Affiliates used primarily in the Cemex Business as
presently conducted, and (iv) all rights of Cemex, Inc. and its Affiliates
either as lessee or lessor under all leases affecting the Cemex Real
Property (the "Cemex Leases"), (all of the foregoing being collectively,
the "Cemex Assumed Contracts");
9. Permits and Approvals. All licenses, permits, approvals, variances,
emission allowances, authorizations, waivers or consents used primarily in
or necessary for the conduct of the Cemex Business as presently conducted
or ownership or operation of the Cemex Real Property as currently operated
and issued to Cemex, Inc. or any of its Affiliates by any Governmental
Authority, to the extent transferable (collectively, "Cemex Permits");
10. Claims. Except as described on Schedule 1.2(b), all rights, privileges,
claims, demands, causes of action, claims in bankruptcy, indemnification
agreements with, and indemnification rights against, third parties,
warranty claims (to the extent transferable), offsets and other claims
relating to the Cemex Assets or the Cemex Business, but not to the extent
that they relate to the Retained Cemex Assets or the Retained Cemex
Liabilities; and
11. Goodwill. Any and all goodwill associated principally with the Cemex
Business.
Schedule 1.2(a)-1
-----------------
Cemex Land
-------------------------------------------------------------------------------
City State County Street Address
-------------------------------------------------------------------------------
Rockmart GA Xxxxxxx 0000 Xxxx Xxx
-------------------------------------------------------------------------------
Xxxxxxxxx XX Escambia 000 X. Xxxxx Xxxx
-------------------------------------------------------------------------------
Freeport FL Xxxxxx 000 X. Xxx Xxxx
-------------------------------------------------------------------------------
Xxxxxxxxxxx XX Houston 0000 Xxxxxxx 000 Xxxxx
-------------------------------------------------------------------------------
Buford GA Hall 0000 XxXxxxx Xxxx
-------------------------------------------------------------------------------
Xxxxxx Xxxx XX Polk 0000 Xxx Xxxxx Xxxx
-------------------------------------------------------------------------------
Chattanooga TN Xxxxxxxx 000 Xxxxxx Xxxx
-------------------------------------------------------------------------------
Memphis TN Shelby Intersection of Riverport Road and
Rivergate Road South
-------------------------------------------------------------------------------
Montgomery AL Montgomery 00 Xxxxxxxx Xxxxxx
-------------------------------------------------------------------------------
Decatur XX Xxxxxx 0000 Xxxxx Xxxx Xxxx
-------------------------------------------------------------------------------
Birmingham XX Xxxxxxxxx 0000 Xxxxxxxxxxxxx Xxxxx
-------------------------------------------------------------------------------
Demopolis XX Xxxxxxx 0000 Xxxxxx Xx.
-------------------------------------------------------------------------------
Schedule 1.2(b)
---------------
Cemex Retained Assets
1. Cash. All cash, bank balances, money market accounts, moneys in possession
of banks and other depositories, term or term deposits and similar cash
equivalents and cash items of, owned or held by or for the account of
Cemex, Inc.;
2. Corporate and Other Records. The corporate books and records, including
stock certificates, treasury stock, stock transfer records, corporate
seals and minute books of Cemex, Inc. (i) which are not used in or
necessary for the conduct of the Cemex Business and (ii) which are not
located on the Cemex Real Property or are not within the possession or
control of those persons employed to work principally for the Cemex
Business, (iii) employee files for employees other than the Cemex
Transferred Employees, (iv) Cemex, Inc.'s Tax Returns and any tax
supporting information related thereto, and (v) any and all records
related to pending or completed litigation and claims;
3. Insurance. Any and all policies of insurance, whether or not covering the
Cemex Assets or the Cemex Business, that are or have been maintained or
managed through Cemex, Inc. or any of its Affiliates, including general
liability, property, casualty, product liability and workers' compensation
insurance (the "Cemex Retained Policies"), including any and all amounts
recovered by Cemex, Inc. under such Cemex Retained Policies;
4. Intellectual Property. All intellectual property of Cemex, Inc. and its
Affiliates, whether or not used primarily in or necessary for the conduct
of the Cemex Business, including Cemex Inc.'s and its Affiliates' patents,
trade secrets, copyrights, trademarks, trade names, logos, slogans,
internet domain names, licenses and software, and any goodwill related to
the foregoing including any and all rights (including any common law
trademark rights) to the names Cemex and Cemex, Inc. (such names,
collectively, the "Cemex Retained Names");
5. Intracompany Receivables. All outstanding amounts, including accounts
receivable, owing to the Cemex Business from other businesses of Cemex or
Cemex 's Affiliates (the "Cemex Intracompany Receivables");
6. Personal Property. The following cement tanker haul trucks and their
respective trailers: 2000 Xxxx Truck 3R0030, VIN# 0X0XX00X0XX000000; 2000
Xxxx Truck 3R0031, VIN# 0X0XX00X0XX000000; 2000 Xxxx Truck 3R0032, VIN#
0X0XX00X0XX000000; 2006 Peterbilt Truck 3R0049, VIN# 0XXXX00000X000000.
7. Claims. All rights, privileges, claims, demands, causes of action, claims
in bankruptcy, indemnification agreements with, and indemnification rights
against, third parties, warranty claims, offsets and other claims relating
to the following:
a. A dispute with the welding contractor and Loeshce over poor
quality work done on the raw mill at the Clinchfield Cement plant during
the last outage.
b. A dispute with Airstream over an outage and damages caused by a
poor quality kiln ID fan that was installed and subsequently removed at
the Demopolis Cement plant.
8. Contracts. All rights and benefits of Cemex, Inc. and its Affiliates in,
to or under the contracts listed on Schedule 1.2(b)-8.
Schedule 1.2(b)-8
-----------------
Cemex Retained Contracts
1. MRO Procurement Agreement, dated as of September 27, 2004, between CEMEX,
Inc. and Applied Industrial Technologies.
2. Master Materials Agreement, dated as of June 1, 2003, between CEMEX, Inc.
and Quality Grinding Aids, Inc.
3. Global Sourcing Contract, undated, between CEMEX Inc. and Xxxxxxxx-Xxxxxx
Refractories Company.
4. Global Sourcing Contract, undated, between CEMEX Inc. and Magotteaux, Inc.
5. Sales Purchase Agreement, dated July 29, 2004, between CEMEX, Inc. and
Petroleum Traders Corporation.
6. Service Agreement, dated as of July 21, 2004, between Manpower Inc. and
CEMEX Inc.
7. Coke Sales Agreement, undated, between Transenergy Grinding, Inc. and
ExxonMobil Corporation.
8. Master Lease Agreement 07709-00400, dated as of April 16, 2004, among Bank
of America Leasing & Capital, LLC, as Lessor, and Cemex, Inc., Cemex Cement,
Inc., Cemex Cement Texas, L.P., Cemex Construction Materials, L.P., Pacific
Coast Cement Corporation, Cemex California Cement LLP, Cemex Central Plains
Cement, LLC, and Kosmos Cement Company, as Lessees.
9. BTM Master Lease Agreement, dated as of August 7, 2000, between BTM Capital
Corporation (Bank of Tokyo-Mitsubishi), as Lessor, and Southdown, Inc., as
Lessee.
10. Master Lease Agreement 287309-000-001, dated as of January 28, 2004,
between Caterpillar Financial Services Corporation, as Lessor, and Cemex, Inc.
11. Equipment Lease, dated as of May 17, 2002, between First Union Commercial
Corporation, as Lessor, and Cemex, Inc., as Lessee.
12. Master Lease Finance Agreement, dated as of June 13, 1995, between
BancBoston Leasing Inc., as Lessor, and Southdown, Inc., as Lessee.
13. Master Equipment Lease Agreement No. 34574, dated as of March 26, 2001,
between Fleet Capital Corporation, as Lessor, and Cemex, Inc.
14. Master Lease Agreement, dated as of August 1, 1997, between General
Electric Capital Corporation, as Lessor, and Sunbelt Asphalt & Materials, Inc.,
as Lessee.
15. Master Lease Finance Agreement, dated as of April 19, 1999, between STI
Credit Corporation, as Lessor, and Southdown, Inc.
Schedule 5.1
------------
RMUSA Assumed Liabilities
1. Assumed Contracts. Subject to Section 4.4, all liabilities and obligations
of RMUSA arising after the Contribution under the RMUSA Assumed Contracts.
For the avoidance of doubt, Company shall not assume any liabilities or
obligations arising out of any breach of or default under such RMUSA
Assumed Contracts by RMUSA that occurred prior to the Contribution;
2. Real Property. Except as set forth in Section 2.2 and 6.8, all liabilities
and obligations relating to, or occurring or existing in connection with,
or arising out of, the ownership and use of the RMUSA Real Property,
arising after the Contribution;
3. Product Liability. Claims for product warranty, product liability,
refunds, returns, personal injury and property damage, and all other
liabilities and obligations, relating to products sold or services
provided by Company after the Contribution;
4. Post Closing Liabilities. Any liability, claim or obligation which is
based on events or conditions occurring or arising out of the RMUSA
Business as operated by Company after the Contribution or the ownership,
possession, use or sale of the RMUSA Assets by Company after the
Contribution (but, in each case, only to the extent such liability, claim
or obligation is based on events or conditions that occur or arise for the
first time after the Contribution);
5. Taxes (excluding transfer and income Taxes). All liabilities and
obligations related to Taxes (excluding transfer and income Taxes) to the
extent due and payable after the Contribution;
6. WARN. Any liabilities or obligations of RMUSA arising under the Worker
Adjustment and Retraining Notification Act, 29 U.S.C. xx.xx. 2101 2109
("WARN") to the RMUSA Business Employees arising out of a "plant closing"
or "mass layoff" (as those terms are defined under WARN) occurring as of
or after the Contribution.
7. Environmental Liabilities. (a) The RMUSA Environmental Liabilities (except
to the extent that such liabilities are subject to indemnification
pursuant to Section 6.8); and (b) any damages, claims, losses, liabilities
and expenses that may be incurred as a result of the presence of Hazardous
Materials at the RMUSA Real Property or property located in the vicinity
of the RMUSA Real Property that results from the ownership, possession,
use, occupation, construction and/or improvement to or operation of the
RMUSA Business or RMUSA Real Property, that exists as of the Contribution
Date but is not otherwise a RMUSA Environmental Condition as defined in
Section 8.7(a).
Schedule 5.2
------------
Cemex Assumed Liabilities
1. Assumed Contracts. Subject to Section 4.4, all liabilities and obligations
of Cemex, Inc. arising after the Contribution under the Cemex Assumed
Contracts and any and all obligations by Cemex, Inc. or any of its
Affiliates to guarantee or support obligations of the Company or any of
its Subsidiaries under any of the Assumed Contracts. For the avoidance of
doubt, Company shall not assume any liabilities or obligations arising out
of any breach of or default under such Cemex Assumed Contracts by Cemex,
Inc. that occurred prior to the Contribution;
2. Real Property. Except as set forth in Section 2.2 and 6.7, all liabilities
and obligations relating to, or occurring or existing in connection with,
or arising out of, the ownership and use of the Cemex Real Property,
arising after the Contribution;
3. Product Liability. Claims for product warranty, product liability,
refunds, returns, personal injury and property damage, and all other
liabilities and obligations, relating to products sold or services
provided by Company after the Contribution;
4. Post Closing Liabilities. Any liability, claim or obligation which is
based on events or conditions occurring or arising out of the Cemex
Business as operated by Company after the Contribution or the ownership,
possession, use or sale of the Cemex Assets by Company after the
Contribution (but, in each case, only to the extent such liability, claim
or obligation is based on events or conditions that occur or arise for the
first time after the Contribution);
5. Taxes (excluding transfer and income Taxes). All liabilities and
obligations related to Taxes (excluding transfer and income Taxes) to the
extent due and payable after the Contribution;
6. Accounts Payable. The Cemex Accounts Payable.
7. WARN. Any liabilities or obligations of Cemex arising under the WARN to
the Cemex Business Employees arising out of a "plant closing" or "mass
layoff" (as those terms are defined under WARN) occurring as of or after
the Contribution.
8. Environmental Liabilities. (a) The Cemex Environmental Liabilities (except
to the extent that such liabilities are subject to indemnification
pursuant to Section 6.7); and (b) any damages, claims, losses, liabilities
and expenses that may be incurred as a result of the presence of Hazardous
Materials at the Cemex Real Property or property located in the vicinity
of the Cemex Real Property that results from the ownership, possession,
use, occupation, construction and/or improvement to or operation of the
Cemex Business or Cemex Real Property, that exists as of the Contribution
Date but is not otherwise a Cemex Environmental Condition as defined in
Section 7.7(a).
Exhibit A
---------
Form of Cemex Lease Assignment
See attached.
Exhibit B
---------
Form of RMUSA Lease Assignment
See attached.
