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EXHIBIT 2
EXECUTION COPY
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STOCK PURCHASE AGREEMENT
DATED AS OF
OCTOBER 2, 1998
BETWEEN
REDLAND INTERNATIONAL LIMITED
AND
XXXXXX XXXXXXXX MATERIALS, INC.
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TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS.........................................................2
1.1. Definitions...............................................2
1.2. Definitional Cross-References.............................8
ARTICLE II. PURCHASE AND SALE OF THE STOCK.....................................9
2.1. Sale and Transfer of the Stock............................9
2.2. Payment...................................................9
2.3. Closing...................................................9
2.4. Working Capital Statement................................10
2.5. Working Capital Adjustment...............................12
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF SELLER.........................13
3.1. Corporate Organization and Qualification.................13
3.2. Corporate Authority......................................14
3.3. Conflicts and Defaults...................................14
3.4. Capital Stock............................................15
3.5. Consents and Approvals...................................17
3.6. Compliance with Applicable Laws..........................17
3.7. Litigation...............................................18
3.8. Taxes ...................................................18
3.9. Employee Plans and Benefit Arrangements..................19
3.10. Labor Relations.........................................24
3.11. Contracts...............................................24
3.12. Environmental Compliance................................25
3.13. Financial Statements....................................26
3.14. Absence of Certain Changes or Events....................27
3.15. Real Property...........................................27
3.16. Assets; Reserves........................................28
3.17. Brokers and Finders.....................................29
3.18. Transactions with Affiliates............................29
3.19. Repayment or Release of Indebtedness or Obligations.....30
3.20. Maintenance of Equipment................................31
3.21. Credit Union............................................31
3.22. Insurance...............................................31
3.23. Trademarks, Trade Names and Know-How....................32
3.24. Title Insurance.........................................33
3.25. Customers and Suppliers.................................34
3.26. Non-Conforming Rights...................................34
3.27. Dispositions and Acquisitions...........................34
(i)
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ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF ACQUIROR........................35
4.1. Corporate Organization and Qualification.................35
4.2. Corporate Authority......................................35
4.3. Conflicts and Defaults...................................35
4.4. Consents and Approvals...................................36
4.5. Investment Only..........................................36
4.6. Representations and Warranties...........................36
4.7. Brokers and Finders......................................37
4.8. Funds for the Acquisition................................37
ARTICLE V. CERTAIN ADDITIONAL COVENANTS OF SELLER AND ACQUIROR................37
5.1. Conduct of the Company and Seller........................37
5.2. Disclosure Supplements...................................42
5.3. Satisfaction of Conditions...............................43
5.4. Public Announcements.....................................45
5.5. Further Assurances.......................................45
5.6. Environmental Inspection and Assessment;
Special Indemnity........................................45
5.7. Employee Communications..................................46
5.8. Access to Books, Records and Personnel...................46
5.9. Repayment or Release of Indebtedness or Obligations......47
5.10. Resignations............................................48
5.11. Title Commitments.......................................48
5.12. Obligations and Liabilities............................49
5.13. Undertaking to Deliver Real Property Descriptions.......49
ARTICLE VI. EMPLOYEE BENEFITS.................................................50
6.1. Maintenance of Benefits..................................50
6.2. Vacation and Sick Leave..................................54
6.3. WARN ....................................................54
ARTICLE VII. CONDITIONS TO THE TRANSFER.......................................54
7.1. Conditions to the Obligations of Each Party..............54
7.2. Conditions to the Obligations of Seller..................54
7.3. Conditions to the Obligations of Acquiror................55
ARTICLE VIII. TERMINATION.....................................................57
8.1. Termination..............................................57
8.2. Effect of Termination....................................58
ARTICLE IX. TAX MATTERS.......................................................59
9.1. Preparation of Tax Returns; Responsibility for Taxes.....59
9.2. Access to Information....................................63
9.3. Transfer Taxes...........................................64
9.4. FIRPTA Matters...........................................64
(ii)
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ARTICLE X. SURVIVAL; INDEMNIFICATION..........................................65
10.1. Limitation of Representations and Warranties............65
10.2. Survival of Representations and Warranties..............65
10.3. Indemnification by Seller...............................66
10.4. Indemnification by Acquiror.............................70
10.5. Procedures for Indemnification..........................71
10.6. Exclusive Remedy........................................74
ARTICLE XI. MISCELLANEOUS.....................................................75
11.1. Entire Agreement........................................75
11.2. Notices ................................................75
11.3. Amendments; No Waivers..................................76
11.4. Expenses................................................77
11.5. Successors and Assigns..................................77
11.6. Certain Interpretive Matters............................77
11.7. Governing Law...........................................78
11.8. Counterparts; Effectiveness.............................78
11.9. Knowledge...............................................78
11.10. Consent to Jurisdiction................................78
11.11. Confidentiality........................................79
11.12. Severability...........................................80
(iii)
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TABLE OF SCHEDULES
Schedule 1.1X. Xxxxxxxx Tract
Schedule 1.1X. Xxxxxx Tract
Schedule 1.1C. Partnership Tract
Schedule 3.3. Conflicts and Defaults
Schedule 3.4(b). Redemption and Repurchase Obligations
Schedule 3.4(c). Subsidiaries
Schedule 3.4(d). Ownership of Subsidiaries
Schedule 3.4(f). Voting Trusts
Schedule 3.5. Consents and Approvals
Schedule 3.6. Compliance With Applicable Laws
Schedule 3.7. Litigation
Schedule 3.8. Taxes
Schedule 3.9. Employee Plans and Benefit Arrangements
Schedule 3.10. Labor Relations
Schedule 3.11. Contracts
Schedule 3.12 Compliance with Environmental Laws
Schedule 3.13(a). December 31, 1997 Audited Consolidated Financial Statements
Schedule 3.13(b). June 30, 1998 Unaudited Consolidated Financial Statements
Schedule 3.14. Absence of Certain Changes or Events
Schedule 3.15. Real Property
Schedule 3.16(a). Assets; Reserves
Schedule 3.16(b). Geological Reports
Schedule 3.18. Transactions with Affiliates
Schedule 3.21 Credit Union
Schedule 3.22. Insurance
Schedule 3.23. Trademarks, Trade Names and Trade Secrets
Schedule 3.24. Title Insurance
Schedule 3.25. Customers and Suppliers
Schedule 3.26(a). Map of Trusts
Schedule 3.26(b). Mining Activities
Schedule 3.27. Acquisitions and Dispositions
Schedule 5.1. Conduct of the Company and Seller
Schedule 5.2 Company Management
Schedule 10.3(f). Certain Assumptions
Schedule 10.3(h) Certain Losses
Schedule 11.9. Knowledge of Seller
TABLE OF EXHIBITS
Exhibit A. Conduct of the Business Since January 1, 1998
Exhibit B. Opinion Matters to be Addressed By Counsel to Seller
Exhibit C. Form of Guarantee
(iv)
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "AGREEMENT") dated as of October 2,
1998, between REDLAND INTERNATIONAL LIMITED, a corporation organized and
existing under the laws of England and Wales ("SELLER"), and XXXXXX XXXXXXXX
MATERIALS, INC., a North Carolina corporation ("ACQUIROR").
RECITALS:
A. Seller owns 100 shares of the voting common stock (the "STOCK") of
Redland Stone Products Company, a Texas corporation (the "COMPANY"), which
constitutes all of the issued and outstanding capital stock of the Company.
B. The Company is engaged in the business (the "BUSINESS") of the
production and sale of limestone base and aggregate, silica sand, ready mix
concrete, asphaltic concrete, caliche base, and other aggregate based
construction materials. The Business does not include the business of processing
stone to produce and sell lime and lime products.
C. Seller and Acquiror have determined to enter into this Agreement
which, among other things, provides for Seller to sell, transfer and convey
("TRANSFER") to Acquiror, and Acquiror to purchase and receive from Seller, all
of the Stock.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements set forth in this Agreement, and for other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, Acquiror and Seller hereby agree as follows:
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ARTICLE I.
DEFINITIONS
1.1. Definitions. The following terms used in this Agreement shall have
the following meanings:
"ACQUIROR" means Xxxxxx Xxxxxxxx Materials, Inc., a North Carolina
corporation.
"ACT" means the Securities Act of 1933, as amended.
"AFFILIATE" means, with respect to any Person, any other Person who is
directly or indirectly controlling, controlled by or under the common control
with such Person. For the purposes of this definition, the term "control," when
used with respect to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise.
"AGREEMENT" means this Stock Purchase Agreement, together with any
Schedules (including Supplemental Schedules) and Exhibits hereto.
"ANTITRUST DIVISION" means the Antitrust Division of the Department of
Justice.
"BALANCE SHEET DATE" means December 31, 1997.
"XXXXXXXX TRACT" means the real property described on Schedule 1.1A
hereto and outlined in red and identified as the "Reserve Tract" on the map
included in said Schedule.
"BENEFIT ARRANGEMENT" means any employment, severance or similar
contract or arrangement (whether or not written) or any plan, policy, fund,
program or contract or arrangement (whether or not written) that provides for
compensation, bonus, profit-sharing, stock option or other stock related rights
or other forms of incentive or deferred compensation, vacation benefits,
insurance coverage (including any self-insured arrangements), health or medical
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benefits, disability benefits, workers' compensation, supplemental unemployment
benefits, severance benefits and post-employment or retirement benefits
(including compensation, pension, health, medical or life insurance or other
benefits) that is not an Employee Plan.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPANY BYLAWS" means the bylaws of the Company as in effect on the
date hereof.
"COMPANY CHARTER" means the articles of incorporation of the Company as
in effect on the date hereof.
"CONFIDENTIALITY AGREEMENT" means the Confidentiality Agreement dated
July 6, 1998 between (i) Dresdner Kleinwort Xxxxxx North America LLC, as
financial advisor to, and on behalf of Lafarge S.A. and Seller and their
respective subsidiaries and affiliates and (ii) Acquiror.
"EMPLOYEE PLAN" means any "employee benefit plan," as defined in
Section 3(3) of ERISA.
"EMPLOYEES" means the employees of the Company and its Subsidiaries
immediately prior to the Closing.
"ENVIRONMENTAL LAWS" means all federal, state, local and foreign laws
(as may be applicable) relating to environmental pollution or protection of the
environment and any regulation, code, plan, order, decree, judgment or
injunction related thereto in effect on or prior to the Closing Date, including
without limitation: (i) the Solid Waste Disposal Act, 42 U.S.C. ss. 6901; (ii)
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, 26 U.S.C. ss. 4611; 42 U.S.C. ss. 9601; (iii) the Superfund Amendments and
Reauthorization Act of 1986; (iv) the Clean Air Act, 42 U.S.C. ss. 7401; (v) the
Clean Water Act, 33 U.S.C. ss. 1251; (vi) the Safe Drinking Water Act, 72 U.S.C.
ss. 300f; (vii) the Toxic Substances Control
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Act, 15 U.S.C. ss. 2601; (viii) the Hazardous Materials Transportation Act, 49
U.S.C. ss. 1801 et seq.; (ix) the Endangered Species Act, 16 U.S.C. ss. 1531;
(x) the Endangered Species Conservation Act of 1969, 16 U.S.C. ss. 460 et seq.;
(xi) applicable state mining laws; (xii) applicable state or local laws
governing water including but not limited to laws regulating the use of water,
the withdrawal of water or acquifers or reservoir management; and (xiii) any
other similar federal, state, local or foreign (as applicable) Laws.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"FINANCIAL STATEMENTS" means the audited consolidated balance sheet of
the Company as of the Balance Sheet Date, and the related consolidated
statements of operations, stockholders' equity and cash flows for the fiscal
year ended on the Balance Sheet Date, copies of which are attached to this
Agreement as Schedule 3.13.
"FTC" means the Federal Trade Commission.
"GAAP" means United States generally accepted accounting principles
consistently applied.
"GOVERNMENTAL ENTITY" means any United States federal, state, county,
local, municipal or foreign government, court, administrative agency or
commission or other governmental or other regulatory authority or agency or any
arbitration tribunal or other non-governmental authority with, in the case of
such arbitration tribunal or non-governmental authority, the ability to issue
decisions that are legally binding on the Company or its Subsidiaries.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
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"HSR FILINGS" means any filings required under the HSR Act.
"LAFARGE S.A." means Lafarge S.A., a company organized and existing
under the laws of France, which indirectly owns all of the issued and
outstanding capital stock of Seller.
"LAWS" means all applicable statutes, laws, regulations, rules,
judgments, ordinances, orders and decrees of Governmental Entities.
"LIEN" means, with respect to any property or asset, any mortgage, deed
of trust, lien, pledge, charge, security interest, restriction on voting or
transfer, or other encumbrance.
"MATERIAL ADVERSE EFFECT" means, with respect to the Company, such
state of facts, event, change or effect as has had, or reasonably could
reasonably be expected to have, a material adverse effect (i) on the business,
assets, results of operations, prospects or condition (financial or otherwise)
of the Company and its Subsidiaries taken as a whole, other than events, changes
or developments relating to the economy in general or resulting from
industry-wide developments affecting Persons in businesses similar to the
Business, (ii) on the business, assets (including the limestone reserves),
results of operations, prospects or condition (financial or otherwise) of the
Xxxxxxxx Tract, taken as a whole, or the Xxxxxx Tract, taken as a whole, or
(iii) on the ability of Seller to enter into this Agreement or consummate the
transactions contemplated by this Agreement.
"PARTNERSHIP TRACT" means the real property owned by Redland Park
Development Limited Partnership and described on Schedule 1.1C hereto and
outlined in blue on the map included in Schedule 1.1A hereto.
"PERMIT" means any license, franchise, permit, concession, approval,
authorization, certification or registration from, of or with or issued by a
Governmental Entity, including,
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without limitation, all current environmental (including mining) licenses,
permits, authorizations, certifications, regulatory plans and compliance
schedules.
"PERMITTED LIENS" means (i) Liens listed or described on Schedule 3.15
or 3.16, (ii) easements, covenants, rights-of-way and other encumbrances or
restrictions or Liens or restrictions arising as a matter of Law which do not,
individually or in the aggregate (A) with respect to all Real Property that is
to be used for the purpose of mining, adversely affect the ability of the
Company to access, process, exploit or otherwise utilize at a particular quarry
the reserves as reported on the Reports (after giving effect to ordinary course
mining since the date of the relevant Report) in a commercially reasonable
manner, and (B) with respect to all Real Property that is to be used for a
purpose other than mining, materially detract from the value or impair the
present, continued and intended use or operation (including, without limitation,
maintenance) of, or access to, the property subject thereto, or impair the
operations of the Company or any of its Subsidiaries, (iii) Liens related to
Taxes not yet due or payable or which are being contested in good faith and for
which appropriate reserves have been taken and reflected in the Final Working
Capital, and (iv) Liens that are created by Acquiror; provided, however, that
for the avoidance of doubt the parties hereto agree that zoning laws do not
constitute "Permitted Liens".
"PERSON" means an individual, corporation, joint-venture, partnership,
limited liability company, association, trust or other entity or organization,
including without limitation, a Governmental Entity.
"PRE-CLOSING TAX PERIOD" means any taxable period ending on or before
the Closing Date and the portion ending on and including the Closing Date of any
Straddle Period.
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"XXXXXX TRACT" means, collectively, the real property constituting the
approximately 440 acre so-called "NW Military Highway Tract" and the
approximately 95.5 acre "Triangle Tract" as described on Schedule 1.1B hereto.
"SELLER" means Redland International Limited, a corporation organized
and existing under the laws of England and Wales.
"STRADDLE PERIOD" means any taxable period that includes (but does
not end on) the Closing Date.
"STRADDLE TAX RETURN" means any Tax Return required to be filed by the
Company or any of its Subsidiaries covering a taxable period commencing prior to
the Closing Date and ending after the Closing Date.
"SUBSIDIARY" means any of the Company's subsidiaries set forth on
Schedule 3.4.
"TAX" means any and all federal, state, local, municipal or foreign
fiscal levies, fees, imposts, duties and other fiscal charges of whatever kind,
whether imposed on the Company, its Subsidiaries or their respective assets,
including, without limitation, taxes imposed on, or measured by, net income,
gross income or gross receipts, sales, goods and services, use, ad valorem,
value added, transfer, franchise, profits, withholding, payroll, employment,
excise, stamp, occupation, real or personal property, severance, customs,
capital stock, license, social security, workers' compensation, unemployment
compensation, utility, production, premium, windfall profits, transfer and gains
taxes, duties and all other types of fiscal levies, together with any interest,
penalties or additions to tax imposed or assessed with respect thereto.
"TAX RETURN" means any return, report, statement, information statement
or similar document (including any additional or supporting material) filed, or
required to be filed, in connection with the calculation, determination,
assessment or collection of any Tax and shall
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include any amended returns required as a result of examination adjustments made
by any Governmental Entity with respect to Taxes.
"WORKING CAPITAL" means the excess of current assets over current
liabilities (excluding any liability for Taxes payable by Seller pursuant to
Section 9.1(a)) based on the Closing Date Balance Sheet.
1.2. Definitional Cross-References. The definitions of the following
terms are set forth in the following provisions of this Agreement:
Defined Term Reference
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"ACCOUNTANTS" Section 2.4(c)
"ACQUIROR INDEMNITEES" Section 10.3
"ACQUIROR'S PLAN" Section 6.1(c)
"BUSINESS" Recital B
"CLOSING DATE BALANCE SHEET" Section 2.4(a)
"CLOSING DATE" Section 2.3
"CLOSING" Section 2.3
"COMPANY MANAGEMENT" Section 5.2(a)
"COMPANY" Recital A
"COMPANY'S BENEFITS" Section 3.9
"CREDIT UNION" Section 3.21
"DIRECTING PARTY" Section 9.1(f)
"FINAL WORKING CAPITAL" Section 2.5
"FIRPTA STATEMENT" Section 9.4
"LEASES" Section 3.15(b)
"LIABILITY SCHEDULES" Section 10.3(a)
"LIABILITY" Section 10.3(b)
"LISTED TITLE POLICIES" Section 3.24
"LOSSES" Section 10.3
"MULTIEMPLOYER PLAN" Section 3.9(a)
"NON-CURRENT LIABILITIES SCHEDULE" Section 10.3(a)
"OBJECTION NOTICE" Section 2.4(b)
"OBJECTION PERIOD" Section 2.4(b)
"PLAN SPONSOR" Section 6.1(c)
"POLICIES" Section 3.24
"PRE-CLOSING MATTERS" Section 10.3(b)
"PRE-CLOSING TAXES" Section 9.1(e)
"PROPERTY TAXES" Section 9.1(c)
"PURCHASE PRICE" Section 2.2
"REAL PROPERTY" Section 3.15
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Defined Term Reference
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"RECITAL" Section 3.24
"REDLAND PENSION PARTICIPANTS" Section 6.1(c)
"REDLAND PENSION PLAN" Section 6.1(c)
"REPORTS" Section 3.16(b)
"SELLER INDEMNITEES" Section 10.4
"SETTLEMENT PROPOSAL" Section 10.5(a)
"STOCK" Recital A
"SUPPLEMENTAL SCHEDULES" Section 5.2(c)
"THIRD PARTY CLAIM" Section 10.5(a)
"TITLE COMPANY" Section 5.11
"TITLE POLICIES" Section 3.24
"TRANSFER" Recital C
"TRIANGLE TRACT" Section 5.13
"VALUATION DATE" Section 6.1(c)
"WARN" Section 6.3
"WORKING CAPITAL STATEMENT" Section 2.4(a)
ARTICLE II.
PURCHASE AND SALE OF THE STOCK
2.1. Sale and Transfer of the Stock. Subject to the conditions to
Closing set forth in Article VII of this Agreement, at the Closing Seller will
Transfer to Acquiror, and Acquiror will purchase and accept from Seller, all of
the Stock.
2.2. Payment. In consideration of the Transfer of the Stock and the
other undertakings of Seller under this Agreement, at the Closing Acquiror will
pay to Seller $272.0 million (the "PURCHASE PRICE") via wire transfer of
immediately available funds to an account designated by Seller.
2.3. Closing. Unless this Agreement has been terminated and the
transactions contemplated under this Agreement have been abandoned pursuant to
Section 8.1 and subject to the fulfillment or, if permitted, waiver of the
conditions set forth in Article VII, the closing of the Transfer of the Stock
(the "CLOSING") will take place at the offices of Xxxxx, Day, Xxxxxx & Xxxxx,
Dallas, Texas at 9:00 a.m. on the fifth business day following the fulfillment
or, if
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permissible, waiver of the conditions set forth in Section 7.1, unless
another date or time is agreed to in writing by the parties to this Agreement
(the "CLOSING DATE"). The Closing will be effective as of 12:01 a.m. on the
Closing Date.
2.4. Working Capital Statement.
(a) As promptly as practicable and in any event within 90 days after
the Closing Date, Seller will prepare and deliver to Acquiror a consolidated
balance sheet of the Company as of the Closing Date prepared in accordance with
GAAP (except that any liability for Taxes which are the responsibility of Seller
pursuant to Section 9.1(a) shall be eliminated therefrom) (the "CLOSING DATE
BALANCE SHEET"), and a certificate of Seller (the "WORKING CAPITAL STATEMENT")
based on the Closing Date Balance Sheet setting forth Seller's calculation of
the Working Capital. Seller will afford one or more representatives of Acquiror
(including its auditors) the opportunity to review Seller's preparation of the
Closing Date Balance Sheet and the Working Capital Statement, including, without
limitation, the opportunity to observe any physical inventory count and other
accounting procedures. If Acquiror and Seller agree upon the accuracy of the
Closing Date Balance Sheet and the calculation of the Working Capital within 90
days after the delivery to Acquiror of the Closing Date Balance Sheet and
Working Capital Statement, Sections 2.4(b) and 2.4(c) will not apply; however,
if Acquiror and Seller do not so agree, then Sections 2.4(b) and 2.4(c) will
apply.
(b) If Acquiror disputes the accuracy of the Closing Date Balance Sheet
or otherwise disagrees with Seller's calculation of the Working Capital,
Acquiror may, within 90 days (the "OBJECTION PERIOD") after the delivery to
Acquiror of the Closing Date Balance Sheet and Working Capital Statement,
deliver a notice (the "OBJECTION NOTICE") to Seller disputing the accuracy of
the Closing Date Balance Sheet and the calculation of the
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Working Capital and setting forth Acquiror's proposed corrections to the Closing
Date Balance Sheet and the calculation of the Working Capital. Any Objection
Notice shall specify in reasonable detail those items or amounts as to which
Acquiror disagrees and the basis for the disagreement. Acquiror shall be deemed
to have agreed with all other items and amounts contained in the Closing Date
Balance Sheet and the Working Capital Statement to which no specific objection
has been made. If Acquiror does not deliver the Objection Notice within the
Objection Period, Acquiror shall be deemed to agree in all respects with
Seller's preparation of the Closing Date Balance Sheet and calculation of the
Working Capital.
(c) If an Objection Notice shall be properly and timely delivered,
Acquiror and Seller shall cause KPMG Peat Marwick, LLP (or, if they are unable
or unwilling to serve, a firm of independent accountants of nationally
recognized standing reasonably satisfactory to Acquiror and Seller (which shall
not have any material relationship with Acquiror, Seller or the Company or any
of their respective controlled affiliates)) (the "ACCOUNTANTS") to promptly
review this Agreement and the disputed items or amounts in the Closing Date
Balance Sheet and the Working Capital Statement for the purpose of calculating
the Working Capital. In making such calculation, the Accountants shall consider
only those items or amounts in the Closing Date Balance Sheet or in Seller's
calculation of the Working Capital as to which Acquiror has, in the Objection
Notice, disagreed and such other issues as may reasonably be affected by the
items as to which Acquiror has disagreed. The Accountants shall deliver to
Acquiror and Seller, as promptly as practicable, but no later than sixty (60)
days after the Accountants are engaged, a written report setting forth their
calculation of the disputed items. Absent manifest error, such report shall be
final and binding upon Acquiror and Seller. The cost of such review and report
shall be divided equally between Seller and Acquiror.
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(d) Each of Acquiror and Seller will cooperate and assist in the
preparation of the Closing Date Balance Sheet and the Working Capital Statement
and in the conduct of the reviews referred to in this Section 2.4, including,
without limitation, Acquiror making available to the extent necessary or helpful
books, records, work papers and personnel of the Company and access to the
assets of the Company and Seller making available to the extent necessary or
helpful books, records, work papers and personnel of Seller.
2.5. Working Capital Adjustment. If the Final Working Capital is
calculated to be in excess of $19.6 million, Acquiror shall pay to Seller within
five days of such final calculation the amount of such excess. If the Final
Working Capital is calculated to be less than $19.6 million, Seller shall pay to
Acquiror within five days of such final calculation the amount of such
deficiency. "FINAL WORKING CAPITAL" means the amount of the Working Capital as
finally determined pursuant to Section 2.4; provided, however, that in no event
shall the Final Working Capital be more than Seller's calculation of the Working
Capital delivered pursuant to Section 2.4(a) or less than Acquiror's calculation
of the Working Capital delivered pursuant to Section 2.4(b). The amount of any
payment to be made pursuant to this Section 2.5 will bear interest from the
Closing Date to the date of payment at a rate per annum equal to the lesser of
(i) the "Prime Rate" published by The Wall Street Journal, in the "Money Rates"
section thereof on the first business day following the Closing Date, or (ii)
the maximum rate permitted by applicable Law. Such interest shall be compounded
daily and shall be calculated on the basis of a 365-day year and the actual
number of days elapsed.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Acquiror as follows:
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3.1. Corporate Organization and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation. Each of the Subsidiaries has been duly
organized and is validly existing as a corporation or as a partnership, as the
case may be, and each of the Subsidiaries that is a corporation is in good
standing under the laws of its jurisdiction of incorporation. The Company and
each of its Subsidiaries that is a corporation is duly qualified as a foreign
corporation in each jurisdiction in which the properties owned, leased or
operated, or the business conducted, by it require such qualification. The
Company and each of its Subsidiaries has the requisite corporate or partnership
power, as the case may be, and authority to own and operate its properties and
carry on its businesses as it is now being conducted. Seller has heretofore made
available to Acquiror true, correct and complete copies of (i) the Company
Charter and the Company Bylaws, (ii) the charter and the bylaws of each
Subsidiary that is a corporation, (iii) the stock ledgers of the Company and its
Subsidiaries that are corporations, (iv) the partnership agreements of the
Subsidiaries that are partnerships, (iv) the minutes of the meetings of the
boards of directors of the Company and its Subsidiaries that are corporations
and any committees thereof and (vi) the minutes of the meetings of the partners
of the Subsidiaries that are partnerships.
3.2. Corporate Authority. Seller has the requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Seller and the consummation of the transactions contemplated to be performed
hereunder have been duly authorized by all necessary corporate actions. This
Agreement is a valid and binding obligation of Seller, enforceable against it in
accordance with the terms hereof except as such enforceability may be limited by
bankruptcy,
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insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally.
3.3. Conflicts and Defaults. Except as set forth on Schedule 3.3,
neither the execution and delivery of this Agreement by Seller nor the
performance by Seller of the transactions contemplated hereby will violate or
constitute an occurrence of default under any provision of, or conflict with, or
result in acceleration of any obligation under, or give rise to a right by any
party to terminate its obligations under, any contract, sales commitment,
purchase order, security agreement, mortgage, conveyance to secure debt, note,
deed, loan, Lien, lease, agreement, instrument, order, judgment, decree, or
other arrangement to which the Company, any of its Subsidiaries or Seller is a
party or is bound. Except as set forth on Schedule 3.3, the Company is not in
violation of the Company Charter or the Company Bylaws, the Subsidiaries that
are corporations are not in violation of their charter or bylaws and the
partnership agreements for the Subsidiaries that are partnerships are in full
force and effect and there are no defaults thereunder. The Company and its
Subsidiaries are not in breach of, or default under, any contract, sales
commitment, purchase order, security agreement, mortgage, conveyance to secure
debt, note, deed, loan, Lien, lease, agreement, instrument, order, judgment,
decree or other arrangement and there does not exist under any provision thereof
any event that, with the giving of notice or the lapse of time or both, would
constitute such a breach or default, except for such breaches, defaults and
events as to which requisite waivers or consents have been obtained.
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3.4. Capital Stock.
(a) The authorized capital stock of the Company consists of one hundred
thousand (100,000) shares of voting common stock, of which one hundred (100)
shares are issued and outstanding. The Stock constitutes all of the issued and
outstanding capital stock of the Company. Seller is the registered and
beneficial owner of the Stock free and clear of any Lien. Upon consummation of
the transactions contemplated by this Agreement and registration of the Stock in
the name of Acquiror in the stock records of the Company, Acquiror will own all
of the issued and outstanding capital stock of the Company free and clear of any
Lien.
(b) The Stock has been duly authorized and validly issued and is fully
paid and non-assessable. There are no (i) securities of Seller or the Company
convertible into or exchangeable for shares of capital stock of the Company,
(ii) warrants, options or other rights to acquire from Seller or the Company, or
other obligations of Seller or the Company to issue, any capital stock or
securities convertible into or exchangeable for capital stock of the Company, or
(iii) bonds, debentures, notes or other obligations or securities of Seller or
the Company the holders of which have the right to vote with the stockholders of
the Company on any matter submitted to the vote of the Company's stockholders.
Except pursuant to the partnership agreements set forth on Schedule 3.4(b),
there are no outstanding obligations of the Company or any of its Subsidiaries
to repurchase, redeem or otherwise acquire any outstanding capital stock of the
Company or any outstanding equity interest of any of its Subsidiaries.
(c) Except as disclosed in Schedule 3.4(c), neither the Company nor any
of its Subsidiaries, either directly or indirectly, own of record or
beneficially any shares or other equity interests in any corporation,
partnership, limited partnership, limited liability company, limited liability
partnership, joint venture, trust or other business entity.
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(d) Except as set forth on Schedule 3.4(d), the Company is the
registered and beneficial owner of all of the issued and outstanding equity
interest of the Subsidiaries free and clear of any Lien. Except as set forth on
Schedule 3.4(d), no consent is required from any holder of a minority equity
interest in any Subsidiary in connection with the execution, delivery or
performance by Seller of its obligations under this Agreement.
(e) The outstanding capital stock of the Subsidiaries that are
corporations has been duly authorized and validly issued and is fully paid and
non-assessable. Neither the Company nor any of its Subsidiaries has any
obligation to make a payment to any Subsidiary that is a partnership in respect
of any partnership interest therein held by the Company or any of its
Subsidiaries. There are no (i) securities of Seller, the Company or any
Subsidiary convertible into or exchangeable for shares of capital stock or
evidence of any equity interest of any Subsidiary, (ii) warrants, options, or
other rights to acquire from Seller, the Company or any Subsidiary, or other
obligation of Seller, the Company or any Subsidiary to issue, any capital stock
or evidence of any equity interest or securities convertible into or
exchangeable for capital stock or evidence of any equity interest of any
Subsidiary, or (iii) bonds, debentures, notes or other obligations or securities
of Seller, the Company or any Subsidiary the holders of which have the right to
vote with the stockholders or partners, as the case may be, of any Subsidiary on
any matter submitted to the vote of such Subsidiary's stockholders or partners.
(f) Except pursuant to the partnership agreements set forth on Schedule
3.4(b) or as set forth on Schedule 3.4(f), there are no voting trusts or other
agreements or understandings with respect to the voting of the capital stock or
other equity interests of the Company or any of its Subsidiaries to which the
Company or any of its Subsidiaries is a party.
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3.5. Consents and Approvals. Except as set forth on Schedule 3.5, other
than the filing of applicable HSR Filings and the expiration and termination of
the applicable waiting period thereunder, no consent, approval, order or
authorization of, or registration, declaration or filing with, any Governmental
Entity or Person is required with respect to Seller in connection with the
execution, delivery or performance by Seller of its obligations under this
Agreement.
3.6. Compliance with Applicable Laws. The Company and its Subsidiaries
have conducted their operations in accordance with, and all of the Company's and
its Subsidiaries' real property and personal property (regardless of whether the
same is owned or leased) are in compliance with, all Laws applicable thereto,
and neither the Company, any of its Subsidiaries nor Seller has received any
notice of any violation of Laws that remains a violation. Neither the Company,
any of its Subsidiaries nor Seller has been charged with, is in receipt of any
notice or warning of, or to Seller's knowledge, under investigation with respect
to, any failure or alleged failure to comply with any provision of any
applicable Laws which notice or warning remains unresolved. Except as set forth
on Schedule 3.6, without limiting the foregoing: (i) each of the Company and its
Subsidiaries has all Permits required to operate the Business as presently
conducted or as presently planned to be conducted at the Xxxxxxxx Tract and/or
the Xxxxxx Tract through the first anniversary of the date hereof; (ii) all such
Permits are in full force and effect; and (iii) each of the Company and its
Subsidiaries is in compliance with its Permits.
3.7. Litigation. Except as disclosed in Schedule 3.7 there are no
civil, criminal or administrative claims, actions, proceedings or suits or, to
Seller's knowledge, investigations pending or threatened against the Company or
any of its Subsidiaries. Except as disclosed in Schedule 3.7, there are no
judgments, decrees or orders issued by any court, board or
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other Governmental Entity presently outstanding and unsatisfied against the
Company or any of its Subsidiaries or any of their respective assets.
3.8. Taxes.
(a) The Company is the common parent of an affiliated group of
corporations (within the meaning of Section 1504(a) of the Code) eligible to
file consolidated federal income Tax Returns. From May 28, 1998 through the
Closing Date, the Company has included (or, with respect to the taxable year
ending on the Closing Date, will include) each "includible corporation" (within
the meaning of Section 1504(b) of the Code) in its consolidated federal income
Tax Return as a member of the affiliated group of which the Company is the
common parent.
(b) Except as otherwise disclosed in Schedule 3.8, (i) the Company and
each of its Subsidiaries have filed (or joined in the filing of) when due all
Tax Returns required by applicable law to be filed with respect to the Company
and each of its Subsidiaries and all Taxes shown to be due on such Tax Returns
have been paid; (ii) all such Tax Returns were true, correct and complete in all
material respects as of the time of such filing; (iii) all Taxes relating to
periods ending on or before the Closing Date owed by the Company or any of its
Subsidiaries (whether or not shown on any Tax Return) at any time on or prior to
the Closing Date, if required to have been paid, have been paid (except for
Taxes which are being contested in good faith); (iv) there is no action, suit,
proceeding, investigation within the knowledge of Seller, audit or claim now
pending against, or with respect to, the Company or any of its Subsidiaries in
respect of any Tax or assessment, nor is any claim for additional Tax or
assessment asserted by any Tax authority; (v) since May 28, 1998, no claim has
been made by any Tax authority in a jurisdiction where the Company or any of its
Subsidiaries does not currently file a Tax Return that it is or may be subject
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to Tax by such jurisdiction, nor to Seller's knowledge is any such assertion
threatened; (vi) there is no outstanding request for any extension of time
within which to pay any Taxes or file any Tax Returns; (vii) there are no
presently effective waivers or extensions of any applicable statute of
limitations for the assessment or collection of any Taxes of the Company or any
of its Subsidiaries; (viii) no property of the Company or any of its
Subsidiaries is "tax-exempt use property" within the meaning of Section 168(h)
of the Code; (ix) neither the Company nor any of its Subsidiaries is a party to
any lease made pursuant to former Section 168(f)(8) of the Internal Revenue Code
of 1954; (x) neither the Company nor any of its Subsidiaries has any deferred
gain or loss in excess of $500,000 arising from any particular intercompany
transaction, within the meaning of Treasury Regulations ss. 1.1502-13; (xi)
neither the Company nor any of its Subsidiaries is a party to any agreement,
whether written or unwritten, providing for the payment of Taxes, payment for
Tax losses, entitlements to refunds or similar Tax matters; and (xii) the
Company and each of its Subsidiaries have withheld and paid all material Taxes
required to be withheld in connection with any amounts paid or owing to any
employee, creditor, independent contractor or other third party.
3.9. Employee Plans and Benefit Arrangements. Schedule 3.9 identifies
each Employee Plan and Benefit Arrangement that is entered into, maintained,
administered or contributed to, as the case may be, by the Company or any of its
Subsidiaries or under which any of them has any material liability or obligation
(collectively, the "COMPANY'S BENEFITS"). Except as set forth on Schedule 3.9:
(a) None of the Employee Plans is a multiemployer plan, as defined in
Section 3(37) of ERISA ("MULTIEMPLOYER PLANS"), and neither the Company nor any
Subsidiary has withdrawn in a complete or partial withdrawal from any
Multiemployer Plan, nor has any of
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them incurred any liability due to the termination or reorganization of a
Multiemployer Plan, nor has any of them taken any action which has resulted or
could result in any liability with respect to any Multiemployer Plan.
(b) Each Employee Plan that is intended to qualify under Section 401 of
the Code and the trust maintained pursuant thereto is exempt from federal income
taxation under Section 501 of the Code, and nothing has occurred with respect to
the operation of any such Employee Plan that could cause the loss of such
qualification or exemption or the imposition of any liability, penalty or tax
under ERISA or the Code.
(c) All contributions (including all employer contributions and
employee salary reduction contributions) required to have been made under any of
the Employee Plans or by Law (without regard to any waivers granted under
Section 412 of the Code) to any funds or trust established thereunder or in
connection therewith have been made by the due date thereof (including any valid
extension). No accumulated funding deficiencies exist in any of the Employee
Plans subject to Section 412 of the Code.
(d) Each actuarial report provided to Acquiror pursuant to Section
3.9(h) accurately reflected, as of its date, the funding status of each Employee
Plan based on the actuarial assumptions set forth in such report.
(e) Neither the Company nor any Subsidiary has terminated any Employee
Plan subject to Title IV, or incurred any outstanding liability under Section
4062 of ERISA to the PBGC or to a trustee appointed under Section 4042 of ERISA.
All premiums due the PBGC with respect to the Employee Plans have been paid.
Neither the Company nor any Subsidiary has engaged in any transaction described
in Section 4069 of ERISA.
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(f) There has been no "reportable event" within the meaning of Section
4043 of ERISA with respect to any Employee Plans subject to Title IV of ERISA
which would require the giving of notice or any other event requiring disclosure
under Section 4041 (c)(3)(C) or 4063(a) of ERISA.
(g) There has been no material violation of ERISA or the Code with
respect to the filing of applicable reports, documents and notices regarding the
Employee Plans with the Secretary of Labor or the Secretary of the Treasury or
the furnishing of required reports, documents or notices to the participants or
beneficiaries of the Employee Plans.
(h) True, correct and complete copies of the following documents with
respect to each of the Employee Plans have been delivered to Acquiror by the
Company: (i) all plans and related trust documents, and amendments thereto; (ii)
the most recent Forms 5500, 990 and 1041 filed by the Company or any Subsidiary;
(iii) the last IRS determination letter; (iv) summary plan descriptions; (v) the
most recent actuarial report relating to the Employee Plans; (vi) written
descriptions of all non-written agreements relating to the Employee Plans; and
(vii) all third party employee benefits administrative contracts relating to any
Employee Plans. (As used in clause (iii), the "last IRS determination letter"
means the last IRS determination letter received in response to a determination
letter application on Form 5300, a complete copy of such application, and any
subsequent determination letters, including complete copies of the applications
for such determination letters ("application" includes any and all
correspondence relating to the applications between the Internal Revenue Service
and applicant or its representatives). The requirement to furnish the last IRS
determination letter applies with respect to each Employee Plan and any
predecessor thereto. In the case of the Redland Pension Plan, as defined in
Section 6.1(c), this requirement shall only apply to the predecessor or
predecessors of the Redland
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Pension Plan that covered Employees with respect to which benefit liabilities
are to be transferred to the Acquiror's Plan as contemplated by Section 6.1(c),
and in the case of the Redland Stone 401(k) Plan, this requirement shall only
apply to the predecessor or predecessors of the Redland North America 401(k)
Plan that covered Employees prior to the adoption of the Redland North America
401(k) Plan.)
(i) There are no pending actions, claims or lawsuits which have been
asserted or instituted against the Employee Plans, the assets of any of the
trusts under such plans or the plan sponsor or the plan administrator, or, to
the knowledge of Seller, against any fiduciary of the Employee Plans with
respect to the operation of such plans (other than routine benefit claims), nor
does Seller or the Company have knowledge of facts which could form the basis
for any such claim or lawsuit.
(j) All amendments and actions required to bring the Employee Plans
into conformity in all material respects with all of the applicable provisions
of ERISA, the Code and other applicable Law have been made or taken except to
the extent that such amendments or actions are not required by Laws to be made
or taken until a date after the Closing Date.
(k) Any bond required with respect to the Employee Plans in accordance
with applicable provisions of ERISA has been obtained and is in full force and
effect.
(l) The Employee Plans have been maintained in accordance with their
terms and with all provisions of ERISA and the Code (including rules and
regulations thereunder) and other applicable federal and state Laws, and neither
the Company, its Subsidiaries, nor, to the knowledge of Seller, any other "party
in interest" or "disqualified person" with respect to the Employee Plans has
engaged in a "prohibited transaction" within the meaning of Section 406 of ERISA
or 4975 of the Code. Neither the Company nor any of its Subsidiaries nor, to the
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knowledge of Seller, any other fiduciary has any liability for breach of
fiduciary duty or any other failure to act or comply in connection with the
administration or investment of the assets of any Employee Plan.
(m) None of the Employee Plans or Benefit Arrangements provides retiree
life, retiree health benefits or any other post-termination benefits except as
may be required under Section 4980B of the Code or Section 601 of ERISA and at
the expense of the participant or the participant's beneficiary. The Company and
the Subsidiaries have at all times complied with the notice and health care
continuation requirements of Section 4980B of the Code and Sections 601 through
608 of ERISA.
(n) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment becoming due to any employee (current, former or retired) of the Company
or the Subsidiaries, (ii) increase any benefits otherwise payable under any
Employee Plan or Benefit Arrangement, (iii) result in the acceleration of the
time of payment or vesting of any benefits under any Employee Plan or Benefit
Arrangement, (iv) qualify as a "change of control" or similar event under any
Employee Plan or Benefit Arrangement or (v) result in any payment becoming due
to any employee that may be nondeductible under Section 28OG of the Code.
(o) There has been no "mass layoff" or "plant closing" as defined by
WARN or any similar state or local "plant closing" law with respect, to the
current or former employees of the Company and its Subsidiaries.
3.10. Labor Relations. Neither the Company nor any of its Subsidiaries
is a party to any collective bargaining or union contract. Except as set forth
on Schedule 3.10, (a) no union organizing campaign is in progress with respect
to the employees of the Company or any of
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its Subsidiaries; (b) there is no unfair labor practice charge or complaint
against the Company or any of its Subsidiaries pending or, to the knowledge of
Seller, threatened before the National Labor Relations Board; and (c) no charges
with respect to or relating to the Company or any Subsidiary are pending or, to
the knowledge of Seller, threatened before the Equal Employment Opportunity
Commission or any other federal or state agency responsible for the prevention
of unlawful employment practices.
3.11. Contracts. Schedule 3.11 constitutes a complete and accurate list
as of the date of this Agreement of each contract or agreement, whether oral or
written, to which the Company or any of its Subsidiaries is a party that (i)
requires a remaining payment to or by the Company or any of its Subsidiaries of
more than $250,000 in any consecutive twelve-month period, and (ii) is not
cancelable without material penalty or other charge by the Company or any of its
Subsidiaries on 60 days notice or less.
3.12. Environmental Compliance.
(a) Seller has delivered to Acquiror a true and correct copy of any
environmental assessment or audit of the Real Property prepared since January 1,
1993 and in the possession of the Company, any of its Subsidiaries or Seller,
other than any environmental assessment or audit commissioned by Acquiror.
(b) Each of the Company and its Subsidiaries has obtained all required
permits, kept all required records and made all filings required by applicable
Environmental Laws with respect to emissions, past or present, into the
environment (including solids, liquids and gases) and the proper disposal of
such materials (including solid waste materials), in each case excluding any
failure to obtain permits, keep records, or make filings if such failure has
been fully remedied (i.e., all required permits, records and filings have now
been obtained, maintained or
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made, as the case may be, and any fines, penalties and/or other sanctions have
been paid or otherwise satisfied in full) by the Company and its Subsidiaries.
(c) Except as described on Schedule 3.12(c), none of the assets owned
or used by the Company or any of its Subsidiaries, including the Real Property,
have been contaminated since January 1, 1993 (provided that at the time of such
contamination the property was owned or operated by the Company or its
Subsidiaries) or are contaminated with any pollutant, contaminant, chemical,
hazardous wastes, hazardous substances, or other hazardous or toxic materials
(as defined in the Environmental Laws) so as to constitute a violation of any of
the Environmental Laws or so as to require any corrective or remedial action
under any of the Environmental Laws. Except as described on Schedule 3.12(c),
there are no transformers, capacitors or other equipment included in or located
on the assets owned or used by the Company or any of its Subsidiaries (including
the Real Property) which, with respect to such items owned by the Company or its
Subsidiaries contain or, with respect to such items owned by others to Seller's
knowledge, contain polychlorinated biphenyls in violation of any Law. Except as
described in Schedule 3.12(c), no portion of the Real Property is a wetland as
defined in 33 C.F.R. ss. 328.3. Except as set forth on Schedule 3.12(c), there
are no underground storage tanks located on or under any Real Property.
(d) Except as set forth in Schedule 3.12(d), each of the Company and
its Subsidiaries is in compliance with all Environmental Laws and all Permits
obtained pursuant thereto. Schedule 3.12(d) describes all citations received by
the Company or any of its Subsidiaries on or after January 1, 1993 relating to
violations of any Environmental Laws or Permits. There is no pending or, to the
knowledge of Seller, threatened civil or criminal litigation, notice of
violation or administrative proceeding in which the Company or any of its
Subsidiaries is
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a party relating in any way to the Environmental Laws, and to the knowledge of
Seller, there is no basis for any such litigation, notice or proceeding.
3.13. Financial Statements. The Financial Statements, copies of which
are attached to this Agreement as Schedule 3.13(a), present fairly, in
conformity with GAAP, the consolidated financial position of the Company as of
the dates thereof and its results of operations and cash flows for the fiscal
periods then ended. The unaudited consolidated balance sheet of the Company as
of June 30, 1998, and the related unaudited consolidated statements of
operations, stockholders' equity and cash flows for the six months ended June
30, 1998, copies of which are attached to this Agreement as Schedule 3.13(b),
present fairly, in conformity with GAAP (except as set forth therein), the
consolidated financial position of the Company as of the dates thereof and the
results of operations and cash flows for the periods then ended.
3.14. Absence of Certain Changes or Events. Except as disclosed in
Schedule 3.14 or as otherwise contemplated by this Agreement, since the Balance
Sheet Date the Company and each of its Subsidiaries has conducted the Business
in the ordinary course, consistent with past practices, and except as disclosed
in Schedule 3.14, there have not been (a) any events, changes or developments
that constitute, individually or in the aggregate, a Material Adverse Effect or
(b) any action or inaction that would constitute a breach of the terms of
Exhibit A to this Agreement.
3.15. Real Property.
(a) Schedule 3.15 describes all real properties owned or leased by the
Company or any of its Subsidiaries (the "REAL PROPERTY"), the nature of the
interest of the Company or such Subsidiary in those properties and the
approximate acreage of each of these properties. The perimeter descriptions for
the Xxxxxxxx Tract, the Xxxxxx Tract and the
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Partnership Tract attached hereto as Schedules 1.1A, 1.1B and 1.1C accurately
describe the property boundaries of the Xxxxxxxx Tract, the Xxxxxx Tract and the
Partnership Tract, respectively, and there are no strips, gaps or gores within
the Real Property outlined in black on the map in Schedule 1.1A. The property
boundaries for the Xxxxxxxx Tract, the Xxxxxx Tract and the Partnership Tract
are accurately depicted on the maps attached hereto as Schedules 1.1A, 1.1B and
1.1C, respectively. There is no real property (other than the Real Property) the
use or possession of which by the Company or any of its Subsidiaries is
necessary to carry on the Business. Except as described on Schedule 3.15, the
Company and each of its Subsidiaries has (i) such title to the Real Property as
is legally sufficient for the current use thereof in the Business as presently
conducted or as presently planned to be conducted through the second anniversary
of the date hereof, (ii) good and indefeasible title in fee simple (except for
Permitted Liens) to all Real Property shown in Schedule 3.15 as owned by it and
(iii) valid leaseholds (except for Permitted Liens) in all Real Property shown
in Schedule 3.15 as leased by it, in each case under valid and enforceable
leases. The Real Property is owned or leased by the Company and its Subsidiaries
free and clear of all Liens except for Permitted Liens.
(b) None of the leases identified in Schedule 3.15 (collectively, the
"LEASES") has been modified or amended in writing, and no notice of termination
has been delivered with respect thereto, except as set forth in Schedule 3.15.
Except as set forth on Schedule 3.15, (i) neither the Company nor any of its
Subsidiaries is in breach of or default under any Lease (and no event has
occurred which, with due notice or lapse of time or both, may constitute such a
breach or default), and (ii) no party to any Lease has given the Company or any
of its Subsidiaries written notice of or made a claim with respect to any breach
or default.
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(c) The buildings, driveways and all other structures and improvements
upon the Real Property are all within the boundary lines of the applicable
property or have the benefit of valid easements or other legal rights and there
are no encroachments thereon that would affect the use thereof.
3.16. Assets; Reserves.
(a) Except as described on Schedule 3.16(a) the Company and each of its
Subsidiaries has title to the assets necessary to carry on the Business free and
clear of all Liens, except for Permitted Liens. Schedule 3.16(a) sets forth a
copy of the fixed asset ledger maintained by the Company in the ordinary course
of business.
(b) Schedule 3.16(b) sets forth a list of all geological reports (the
"REPORTS") with respect to the Real Property prepared by or for the Company or
any of its Subsidiaries. Seller has furnished a true, correct and complete copy
of all such Reports to Acquiror or its representatives. Except where a later
dated Report may contradict an earlier dated Report or as set forth on Schedule
3.16(b), neither Seller nor the Company or any of its Subsidiaries have any
knowledge that such Reports contain any inaccuracy (including, without
limitation, with respect to the extent of the reserves or the ability to exploit
such reserves) and Seller, the Company and its Subsidiaries have no reason to
believe that such Reports are inaccurate. Except as set forth on Schedule
3.16(b), no Person (i) has commenced or, to the best of Seller's knowledge,
threatened to commence, any proceeding seeking to establish, or (ii) has
asserted or has any basis to assert any claim, in each case that such Person has
any right to the reserves set forth in the Reports (including, without
limitation, the right to exploit or utilize the reserves).
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3.17. Brokers and Finders. None of Seller or any of its directors,
officers or employees has employed any broker or finder or incurred any
liability for any brokerage fees, commission or finders fees in connection with
the transactions contemplated hereby, except for fees and expenses of Dresdner
Kleinwort Xxxxxx North America LLC, which shall be paid by Seller.
3.18. Transactions with Affiliates. Except as set forth in Schedule
3.18, no officer, no director, no shareholder and no persons controlled by any
officer, director or shareholder of the Company or any of its Subsidiaries or
any entity in which any such officer, director or other affiliate or associate,
(a) owns any beneficial interest (other than a publicly held corporation whose
stock is traded on a national securities exchange or in the over-the-counter
market and less than 1% of the stock of which is beneficially owned by any such
person), or has any interest in: (i) any contract, arrangement or understanding
with, or relating to, the business or operations of the Company or any of its
Subsidiaries (other than a contract, arrangement or understanding relating to
any such person's ordinary course of employment with the Company or any of its
Subsidiaries); (ii) as of the Closing, any loan, arrangement, understanding,
agreement or contract for or relating to indebtedness of the Company or any of
its Subsidiaries; or (iii) any property (real, personal or mixed), tangible, or
intangible, used or currently intended to be used in, the business or operations
of the Company or any of its Subsidiaries, except for minor items of personal
property owned and/or used by employees in connection with their employment, or
(b) has sold or transferred any property or assets to or purchased or acquired
any property or assets from, or otherwise engaged in any other transactions with
the Company or any of its Subsidiaries, except that the Company and any of its
Subsidiaries may have engaged in any of the foregoing transactions in this
clause (b) in the ordinary course of business at prices and on terms and
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conditions no less favorable to the Company or such Subsidiary than could have
been obtained in an arm's-length basis from unrelated third parties.
3.19. Repayment or Release of Indebtedness or Obligations. As of the
Closing Date, all (i) outstanding indebtedness of the Company (on a consolidated
basis) owed to Seller or any of Seller's Affiliates and (ii) obligations of the
Company (on a consolidated basis) for borrowed money (and all obligations,
contingent or otherwise, of the Company or any of its Subsidiaries guaranteeing
or having the economic effect of guaranteeing any obligation for borrowed money
of any other Person) to any other Person, in each case will have been repaid or
released such that the Company (on a consolidated basis) will not have any of
such outstanding indebtedness and obligations, as the case may be, as of the
Closing.
3.20. Maintenance of Equipment. Since the Balance Sheet Date, the
Company and its Subsidiaries have maintained all of their equipment and other
personal property in the ordinary course of business consistent with past
practice.
3.21. Credit Union. Redland Employees Credit Union (the "CREDIT UNION")
is a Texas chartered credit union, validly existing and in good standing under
the laws of the State of Texas, and duly organized and in good standing under
all laws, rules, and regulations of the State of Texas and the laws of the
United States of America applicable to Texas credit unions and is an insured
credit union under the National Credit Union Share Insurance Fund. Schedule
3.21, sets forth all agreements, contracts, employee sharing agreement, or other
arrangements of any kind or nature, either oral or written, currently existing
between the Company and the Credit Union. The Company has no membership or
equity interest (direct or indirect) in the Credit Union. Except as set forth on
Schedule 3.21, there are no actions or proceedings pending or, to the knowledge
of Seller, threatened against the Credit Union by or before any federal or state
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regulatory authority, including, without limitation, the Texas Credit Union
Department, the National Credit Union Association and the IRS or any other
nation, state or subdivision thereof, or any other entity exercising executive,
legislative, judicial, regulatory or administrative function of or pertaining to
government.
3.22. Insurance. Schedule 3.22 lists the fidelity bonds (other than any
of such bonds that have been released or have expired or properly terminated)
and the aggregate coverage amount and type and generally applicable deductibles
of all policies of title, liability, fire, casualty, business interruption,
workers' compensation and other forms of insurance insuring the properties,
assets and operations of the business of the Company and its Subsidiaries in
effect on the date hereof as well as over the last 5 years. Seller has furnished
a true, complete and accurate copy of all such policies and bonds to Acquiror.
No action or omission by Seller, the Company or any of its Subsidiaries has
caused any of such policies or bonds not to be in full force and effect and not
to be sufficient for all applicable requirements of law. Such policies and bonds
will not in any way be affected by or terminated or lapsed by reason of the
consummation of the transactions contemplated by this Agreement. The Company and
its Subsidiaries are not in default under any provisions of any such policy of
insurance and have not received notice of cancellation of any such insurance.
Except as set forth on Schedule 3.22, there is no claim by the Company or any of
its Subsidiaries pending under any of such policies or bonds as to which
coverage has been questioned, denied or disputed (other than reservations of
rights) by the underwriters of such policies or bonds; provided, however, that
there is no reservation of rights with respect to the insurance covering the
first two items set forth on Schedule 3.7 as of the date hereof. Between the
Balance Sheet Date and the date hereof, except as set forth in Schedule 3.22,
neither the Company nor any of its Subsidiaries has received any written notice
from or on behalf of any
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insurance carrier issuing such policies, that insurance rates will hereafter be
substantially increased (except to the extent that insurance rates may be
increased for all similarly situated risks), that there will hereafter be a
cancellation, or an increase in a deductible (or an increase in premiums in
order to maintain an existing deductible) or non-renewal of existing policies,
or that alteration of any equipment or any improvements to real estate occupied
by or leased to or by the Company or its Subsidiaries, purchase of additional
equipment, or modification of any of the methods of doing business of the
Company or its Subsidiaries, will be required or suggested.
3.23. Trademarks, Trade Names and Know-How. Schedule 3.23 sets forth a
true and complete list of all United States and foreign patents, patent rights,
trademarks, service marks, trade names and trade secrets and proprietary
know-how previously identified by the Company as being such (either registered,
applied for, or common law) owned by, registered in the name of, licensed to, or
used in the business of each of the Company and its Subsidiaries (the
"INTANGIBLE ASSETS"). Such list includes a summary description of each such item
and specifies, where applicable, the date granted or applied for, the expiration
date and the current status thereof. Except as set forth on Schedule 3.23, there
is no restriction affecting the Company's or its Subsidiaries' use of any of the
Intangible Assets, and no license has been granted with respect thereto. None of
the Intangible Assets are currently being challenged, or are involved in any
pending or, to the knowledge of the Seller, threatened administrative or
judicial proceeding. The Company's and its Subsidiaries' respective rights in
and to the Intangible Assets are sufficient and adequate in all respects to
permit them to carry on the Business, and none of the products or operations of
any of the Company or its Subsidiaries involves any infringement of any
proprietary right of any other Person.
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3.24. Title Insurance. Schedule 3.24 sets forth a true, correct and
complete list and a summary description of the policies of title insurance
insuring the Company's and its Subsidiaries' interest in the Real Property
obtained since January 1, 1993 (collectively, the "LISTED TITLE POLICIES").
Seller has furnished a true, correct and complete copy of all such Listed Title
Policies to Acquiror. All policies of title insurance naming the Company's and
its Subsidiaries' interest in the Real Property are hereby defined as "TITLE
POLICIES". Except as set forth in Schedule 3.24, none of the Title Policies have
been terminated by virtue of an act or omission to act of the Seller and any of
its Affiliates (including the Company). There is no claim by the Company, any of
its Subsidiaries or any other Person pending under any of the Title Policies as
to which coverage has been questioned, denied or disputed by the underwriters or
issuers of such Title Policies.
3.25. Customers and Suppliers. Schedule 3.25 sets forth a complete and
correct list of: (a) all customers whose purchases from the Company or its
Subsidiaries exceeded 3% of the consolidated net sales of the Company during the
Company's last fiscal year; (b) the 10 largest suppliers by dollar volume of the
Company and its Subsidiaries and the aggregate dollar volume of purchases
(broken down by principal categories) by the Company or its Subsidiaries from
such suppliers during such fiscal year; and (c) all distributors of any products
of the Company or its Subsidiaries. Except as set forth in Schedule 3.25 or with
respect to termination or changes not attributable to an act or omission of the
Company or its Subsidiaries, none of such customers, suppliers or distributors
has or, to the best knowledge of Seller, intends to terminate or change
significantly its relationship with the Company or its Subsidiaries.
3.26. Non-Conforming Rights. Non-conforming rights have been
established under Chapter 35 of the United Development Code of the City of San
Antonio with respect to
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each of the portions of the Xxxxxxxx Tract and the Xxxxxx Tract described on
Schedule 3.26(a) such that on and after the Closing Date the Company will be
permitted to carry-out mining activities as described on Schedule 3.26(b) on
each such tract regardless of the zoning designations, and the Company has the
right to construct and operate a tunnel connecting the Xxxxxx Tract to the
Xxxxxxxx Tract regardless of the zoning designations.
3.27. Dispositions and Acquisitions. Except as set forth in Schedule
3.27, neither the Company nor any of its Subsidiaries has (i) any liability with
respect to indemnification payments in excess of $1 million individually or $5
million in the aggregate relating to any disposition of a business by the
Company or any of its Subsidiaries or (ii) any liabilities in excess of $1
million individually or $5 million in the aggregate assumed in connection with
any acquisition of a business by the Company or any of its Subsidiaries.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
Acquiror hereby represents and warrants to Seller as follows:
4.1. Corporate Organization and Qualification. Acquiror is a
corporation duly organized, validly existing and in good standing under the laws
of the State of North Carolina and is duly qualified as a foreign corporation in
each jurisdiction in which the properties owned, leased or operated, or the
businesses conducted, by it require such qualification.
4.2. Corporate Authority. Acquiror has the requisite corporate power
and authority to own and operate its properties and carry on its businesses as
they are now being conducted, and to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by Acquiror and the consummation by it of the transactions
contemplated to be performed hereunder have been duly
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authorized by all necessary corporate actions. This Agreement is a valid and
binding obligation of Acquiror, enforceable against it in accordance with the
terms hereof except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally.
4.3. Conflicts and Defaults. Neither the execution and delivery of this
Agreement by Acquiror nor the performance by Acquiror of the transactions
contemplated hereby will violate or constitute an occurrence of default under
any provision of, or conflict with, or result in acceleration of any obligation
under, or give rise to a right by any party to terminate its obligations under,
any material contract, sales commitment, purchase order, security agreement,
mortgage, conveyance to secure debt, note, deed, loan, Lien, lease, agreement,
instrument, order, judgment, decree, or other arrangement to which Acquiror is a
party or is bound. The Acquiror is not in violation of any of its organizational
documents.
4.4. Consents and Approvals. Other than the filing of applicable HSR
Filings and the expiration or termination of the applicable waiting period
thereunder, no consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity or Person is required with
respect to Acquiror in connection with the execution, delivery or performance by
Acquiror of its obligations under this Agreement.
4.5. Investment Only. Acquiror is acquiring the Stock solely for the
purpose of investment and not with a view to, or for sale or other disposition
in connection with, any distribution thereof. Acquiror acknowledges that the
Stock is not registered under the Act, or any applicable state securities laws
and that the Stock may not be transferred, pledged or sold except pursuant to
the registration provisions of the Act and such laws or pursuant to applicable
exemptions therefrom. Acquiror has such knowledge, experience and skill in
evaluating and
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investing in common stocks and other securities, based on actual participation
in financial investment and business matters, so that it is capable of
evaluating the merits and risks of an investment in the Stock and has such
knowledge, experience and skill in financial and business matters that it is
capable of evaluating the merits and risks of the investment in the Company and
the suitability of the Stock as an investment and can bear the economic risk of
an investment in the Stock. No guarantees have been made or can be made with
respect to the future value, if any, of the Stock, or the profitability or
success of the businesses of the Company.
4.6. Representations and Warranties. Acquiror acknowledges that Seller
has made no representation or warranty as to the Company, or its businesses,
prospects, assets, results of operations or condition (financial or otherwise),
except as expressly set forth in this Agreement.
4.7. Brokers and Finders. None of Acquiror or any of its directors,
officers or employees has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders fees in connection with
the transactions contemplated hereby.
4.8. Funds for the Acquisition. On or before the Closing Date, Acquiror
shall have sufficient unencumbered funds to pay in cash the Purchase Price and
all of its fees and expenses relating to this Agreement and the transactions
contemplated hereby.
ARTICLE V.
CERTAIN ADDITIONAL COVENANTS OF SELLER AND ACQUIROR
5.1. Conduct of the Company and Seller.
(a) Except as set forth on Schedule 5.1, without the prior written
consent of Acquiror, between the date hereof and the Closing Date, Seller shall
not permit the Company or any of its Subsidiaries to, except as required or
expressly permitted pursuant to the terms hereof:
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(i) make any material change in the conduct of the Business of
the Company or its Subsidiaries or enter into any transaction other
than in the ordinary course of business consistent with past practice;
(ii) make any change in the Company Charter or the Company
Bylaws or in the charter or bylaws of any Subsidiary which is a
corporation or in the partnership agreement of any Subsidiary that is a
partnership; issue any additional shares of capital stock or equity
securities or grant any option, warrant or right to acquire any capital
stock or equity securities or issue any security convertible into or
exchangeable for capital stock or alter in any way any of its
outstanding securities or make any change in outstanding shares of
capital stock or other ownership interests or the capitalization of the
Company or its Subsidiaries, whether by reason of a reclassification,
recapitalization, stock split or combination, exchange or readjustment
of shares, stock dividend or otherwise;
(iii) make any sale, assignment, transfer, abandonment or
other conveyance of the assets, properties or rights (other than cash)
of the Company or its Subsidiaries or any part thereof, except
transactions pursuant to the existing contracts set forth in the
Schedules hereto and dispositions of inventory or of worn-out or
obsolete equipment in the ordinary course of business consistent with
past practice;
(iv) subject any of the assets, properties or rights of the
Company or its Subsidiaries, or any part thereof, to any Lien or suffer
such to exist other than such Liens as may arise in the ordinary course
of business consistent with past practice by operation of law and that
will not, individually or in the aggregate, have a Material Adverse
Effect;
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(v) redeem, retire, purchase or otherwise acquire, directly or
indirectly, any shares of the capital stock or any evidence of any
ownership interest of the Company or its Subsidiaries or declare, set
aside or pay any non-cash dividends or other non-cash distribution in
respect of such shares or ownership interest;
(vi) acquire or sell any raw materials, other than in the
ordinary course of business consistent with past practice;
(vii) acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial equity interest in, or by any
other manner, any business or any corporation, partnership, association
or other business organization or division thereof, in each case in
this clause (vii) which are material, individually or in the aggregate,
to the Company and its Subsidiaries taken as a whole;
(viii) enter into any new (or amend any existing) employee
benefit plan, program or arrangement or any new (or amend any existing)
employment, severance or consulting agreement, grant any general
increase in the compensation of officers or employees (including any
such increase pursuant to any bonus, pension, profit-sharing or other
plan or commitment) or grant any increase in the compensation payable
or to become payable to any employee, except in accordance with
pre-existing contractual provisions;
(ix) make or commit to make any capital expenditure in excess
of $500,000 individually;
(x) pay, lend or advance any amount to, or sell, transfer or
lease any properties or assets to, or enter into any agreement or
arrangement with, any of its Affiliates except for the distribution or
transfer of cash or the payment of debt;
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(xi) fail to keep in full force and effect insurance
comparable in amount and scope to coverage maintained on the date
hereof or such other insurance as may be required by law;
(xii) take any other action that would cause any of the
representations and warranties made by Seller in this Agreement not to
remain true and correct;
(xiii) make any change in any method of accounting or
accounting principle, method, estimate or practice except for any such
change required by reason of a concurrent change in GAAP, or write down
the value of any inventory or write off as uncollectible any accounts
receivable except in the ordinary course of business consistent with
past practice;
(xiv) make, change or revoke any election or method of
accounting with respect to Taxes inconsistent with any prior election
or method of accounting affecting or relating to the Company or its
Subsidiaries, provided that Acquiror's consent to this matter shall not
be unreasonably withheld or delayed;
(xv) enter into any closing or other agreement or settlement
with respect to Taxes affecting or relating to the Company or its
Subsidiaries, provided that Acquiror's consent to this matter shall not
be unreasonably withheld or delayed;
(xvi) release or forgive any claim or litigation or, except in
the ordinary course of business consistent with past practice, waive
any right thereto;
(xvii) make, enter into, modify, amend in any material respect
or terminate any contract, bid or expenditure, where such contract, bid
or expenditure is for (A) a contract entailing payments in excess of
$400,000 or (B) a contract having a term in
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excess of 9 months; provided, however, that with respect to this clause
(xvii), Acquiror's consent shall not be unreasonably withheld or
delayed;
(xviii) pay, discharge, settle or satisfy any claims,
litigation, liabilities or obligations (whether absolute, accrued,
asserted or unasserted, contingent or otherwise) involving amounts in
excess of $50,000 in the aggregate, other than the payment, discharge,
settlement or satisfaction of liabilities in the ordinary course of
business consistent with past practice and except for any settlement or
release that involves only the payment of money by the Company or any
of its Subsidiaries;
(xix) make any loans to any third party in excess of $10,000
in the aggregate except in the ordinary course of business; or
(xx) commit to do any of the foregoing.
(b) From and after the date hereof and until the Closing Date, the
Seller shall cause the Company and each of its Subsidiaries to:
(i) continue to maintain, in all material respects (1) the
assets, properties, rights, and operations of the Company and its
Subsidiaries in accordance with normal practice and (2) the Permits of
the Company and its Subsidiaries in accordance with normal practice;
(ii) continue to make capital expenditures substantially in
accordance with the financial plan for the Company and its
Subsidiaries;
(iii) file, when due or required, all Tax Returns and other
reports required to be filed and pay when due all Taxes lawfully levied
or assessed against them, unless the validity thereof is contested in
good faith and by appropriate proceedings diligently conducted;
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(iv) continue to conduct the businesses of the Company and its
Subsidiaries in the ordinary course consistent with past practice;
(v) keep its books of account, files and records in the
ordinary course and in accordance with existing practice; and
(vi) use their commercially reasonable efforts to (1) preserve
intact the operations, organization and reputation of the Company and
its Subsidiaries, (2) keep available the services of the Company's and
its Subsidiaries' present officers and key employees and (3) preserve
the goodwill and business relationships of the suppliers and customers
of the Company and its Subsidiaries.
5.2. Disclosure Supplements.
(a) Within 5 days after the execution of this Agreement, Seller shall
circulate this Agreement and the Schedules to this Agreement to the management
of the Company set forth on Schedule 11.9 or their successors ("COMPANY
MANAGEMENT") for their review and comment with respect to the accuracy of the
representations and warranties and the related Schedules. Seller shall cause the
Company Management to promptly report in writing to Xxxxx Vaio any inaccuracies
identified in such review. Seller shall promptly deliver each such written
notice and all reports sent by Xxxxx Vaio to Acquiror as such notices and
reports are received by Seller.
(b) No earlier than 10 days and no later than 5 days prior to the
Closing, Seller shall circulate this Agreement and the Schedules to this
Agreement to the Company Management for their review and comment with respect to
the accuracy of the representations and warranties and the related Schedules.
Seller shall cause the Company Management to promptly report in writing to Xxxxx
Vaio any inaccuracies identified in such
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review. Seller shall promptly deliver each such written notice and all reports
sent by Xxxxx Vaio to Acquiror as such notices and reports are received by
Seller but in any event no later than on the third day prior to the Closing.
(c) At least two days prior to the Closing, Seller shall deliver
updated Schedules to this Agreement (the "SUPPLEMENTAL Schedules"). The
Supplemental Schedules shall reflect only those changes to the Schedules to this
Agreement delivered on the date of the execution of this Agreement relating to
facts, events or circumstances that occurred during the period after the
execution of this Agreement but before the Closing Date.
(d) No written notice delivered pursuant to Section 5.2(a) or 5.2(b)
will be deemed to have (i) amended the Schedules delivered on the date hereof,
(ii) qualified the representations and warranties contained in Article III made
as of the date hereof, or (iii) cured any misrepresentation or breach of
warranty as of the date hereof. Acquiror's rights with respect to any breach of
warranty or misrepresentation contained in this Agreement as of the date hereof
will not be affected by any such notice.
(e) The Supplemental Schedules will be deemed only to qualify the
representations and warranties as of the Closing Date.
(f) In addition to the right to seek relief for misrepresentations or
breaches of warranty based on the contents of any Supplemental Schedule,
Acquiror will be entitled to seek relief, subject to the terms of this
Agreement, based on misrepresentations or breaches of warranty as of the date
hereof regardless of the content of any Supplemental Schedules or notices or
reports.
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5.3. Satisfaction of Conditions.
(a) Each party to this Agreement shall use reasonable efforts to
satisfy promptly all conditions precedent to the obligations of the other party
to consummate the transactions contemplated by this Agreement.
(b) In addition to the obligations set forth in Section 5.3(a),
Acquiror and Seller, at each of their respective expenses, will timely and
promptly make all filings which are required under the HSR Act. Acquiror and
Seller will furnish to each other such necessary information and reasonable
assistance as they may reasonably request in connection with the preparation of
necessary filings or submissions to any Governmental Entity, including, without
limitation, any HSR Filings. Acquiror and Seller will supply each other with
copies of all correspondence, filings or communications (or memoranda setting
forth the substance thereof) between Acquiror or Seller or any of their
respective representatives, on the one hand, and the FTC or Antitrust Division
or any member of their respective staffs, on the other hand, with respect to
this Agreement or the transactions contemplated hereby. Each of Acquiror and
Seller, as the case may be, agrees to use its reasonable effort to obtain, as
promptly as practicable, the approval of the FTC or the Antitrust Division, as
the case may be, of the purchase and the sale of the Stock by Acquiror,
including by Acquiror agreeing to divest, hold separate or place in trust
pending divestiture or further governmental investigation, such operations of
Acquiror's business as may be required, requested or necessary to obtain the
approval of the appropriate governmental enforcement agency.
(c) Each of Acquiror and Seller shall use its reasonable efforts and
pay all expenses necessary to obtain any licenses, permits, consents, approvals,
authorizations, qualifications and orders of Governmental Entities and parties
to contracts as are required for
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Acquiror and Seller, as the case may be, to consummate the transactions
contemplated hereby, and to effect all necessary registrations and filings,
including without limitation, filings under the HSR Act. Subject to the terms
and conditions hereof, each of Acquiror and Seller agrees to use its reasonable
efforts to take, or cause to be taken, all action and to do, or cause to be
done, all other things necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Agreement as soon as
practicable. Each of Acquiror and Seller shall use its reasonable efforts to
defend any lawsuits or other legal proceedings, whether judicial or
administrative, whether brought derivatively or on behalf of third parties
(including governmental agencies, officials or other Governmental Entities),
challenging this Agreement or the consummation of the transactions contemplated
hereby.
5.4. Public Announcements. Except as may be required by applicable Law,
the rules of any applicable stock exchange or a Governmental Entity, Acquiror
and Seller will consult prior to the issuance of any press release or the making
of any such public statement relating to the transactions contemplated by this
Agreement.
5.5. Further Assurances. From and after the Closing, each of Seller and
Acquiror shall execute and deliver, in the name and on behalf of Seller or
Acquiror, as appropriate, any assignments or assurances and take and do, in the
name and on behalf of Seller or Acquiror, as appropriate, any other actions and
things reasonably necessary to carry out the intention of this Agreement.
5.6. Environmental Inspection and Assessment; Special Indemnity.
(a) At Acquiror's expense, Acquiror may cause an environmental
consulting firm reasonably acceptable to Seller to conduct an inspection and
environmental assessment of the Real Property. The scope of such inspection and
assessment would consist of a
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so-called "Phase I" preliminary environmental audit of the Real Property. If,
with respect to any Real Property, the "Phase I" for such Real Property
indicates the existence of any potential environmental problem, Acquiror will
have the right to conduct additional reasonable procedures, including without
limitation, taking of groundwater samples, soil test borings, effluent or other
discharge analyses. Acquiror will coordinate with Seller on the timing of the
physical inspection.
(b) Acquiror will indemnify, defend and hold Seller and the Company
harmless from and against any and all physical damages that may be suffered or
incurred by Seller or the Company as a result of any wrongful act or wrongful
omission of Acquiror, the environmental consultant engaged by Acquiror, or their
agents, subcontractors or representatives in the implementation of the
environmental inspection and assessment. Seller will indemnify, defend and hold
Acquiror harmless from and against any and all physical damages that may be
suffered or incurred by Acquiror, the environmental consultant engaged by
Acquiror, or their agents, subcontractors or representatives in the
implementation of the environmental inspection and assessment as a result of any
wrongful act or wrongful omission of Seller or the Company.
5.7. Employee Communications. Prior to the Closing, Acquiror shall not
communicate with Employees with respect to matters arising in connection with
the transactions contemplated by this Agreement without the prior consent of
Seller, which consent shall not be unreasonably withheld.
5.8. Access to Books, Records and Personnel.
(a) Prior to the Closing Date, Seller shall, and shall cause the
Company and its Subsidiaries and the employees of Seller and the Company and its
Subsidiaries to, upon reasonable request, fully cooperate with Acquiror and
afford to Acquiror and its counsel, accountants and other authorized
representatives, reasonable access during normal business hours
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to all books, records, data, facilities, properties and personnel (including the
review of any auditors' work papers made available by such auditor it being
understood that each of Seller and Acquiror will use their reasonable efforts to
cause such auditor to afford access to its work papers) to the extent that such
access may be reasonably requested by Acquiror (including, without limitation,
with respect to the disposition and operation of the business of processing
stone to produce lime and lime products); provided that no review of such
materials or contact with personnel by Acquiror shall disrupt the operations of
the Company or its Subsidiaries.
(b) Following the Closing, each of Seller and Acquiror shall, and each
of Seller and Acquiror shall cause its Affiliates and its employees and the
employees of its Affiliates to, upon reasonable request, fully cooperate with
Seller or Acquiror, as the case may be, and afford to Seller or Acquiror and
their counsel, accountants and other authorized representatives reasonable
access during normal business hours to all books, records, data, facilities,
properties and personnel (including the review of any auditors' work papers of
Seller, or with respect to period prior to the Closing the Company, made
available by such auditor it being understood that each of Seller and Acquiror
will use their reasonable efforts to cause such auditor to afford access to its
work papers) and permit Seller or Acquiror and their respective counsel,
accountants and other authorized representatives to reasonably make copies of
such books, records and other data, to the extent that such access may be
reasonably requested by Seller or Acquiror; provided, however, that no review of
such materials or contact with personnel by Seller or Acquiror shall disrupt the
operations of the Company; and provided, further, that this Section (i) shall
not apply in the context of any dispute or proceeding between Acquiror (and
after the Closing Date, the Company), on the one hand, and Seller, on the other
hand, and (ii) is independent from the provision set forth in Section 2.4.
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5.9. Repayment or Release of Indebtedness or Obligations. On or before
the Closing Date, Seller shall cause all (i) outstanding indebtedness of the
Company (on a consolidated basis), owed to Seller or any of Seller's Affiliates
and (ii) obligations of the Company (on a consolidated basis) for borrowed money
(and all obligations, contingent or otherwise, of the Company or any of its
Subsidiaries guaranteeing or having the economic effect of guaranteeing any
obligation for borrowed money of any other Person) to any other Person, in each
case to be repaid or released such that the Company (on a consolidated basis)
will have no such outstanding indebtedness and obligations, as the case may be,
as of the Closing Date.
5.10. Resignations. Prior to the Closing, Seller shall cause to be
delivered to Acquiror the written resignations of the directors and officers of
the Company and its Subsidiaries (such resignations being resignations of their
positions as such) specified in writing by Acquiror at least 5 days prior to the
Closing; provided, however, that if any such resignation triggers the payment of
any amount by the Company to any such Person under a contract or under any
Employee Plan disclosed on Schedule 3.11 or 3.9, as the case may be, Acquiror
shall bear the cost of such payment.
5.11. Title Commitments. Seller shall, promptly (and in no event more
than five (5) days) after the date hereof, order from a title company reasonably
acceptable to Acquiror (the "TITLE COMPANY") a title insurance commitment or
commitments with respect to (i) all Real Property that is used or intended to be
used for the purpose of mining and (ii) the "Xxxxxx" site in Humble, Texas.
Seller shall use its reasonable efforts to cause the Title Company to issue such
title commitments as promptly as feasible and, immediately upon receipt thereof,
shall deliver the same to Acquiror and, at Acquiror's request, to the surveyor
or engineer that has been engaged by Acquiror to prepare surveys of the Real
Property. To the extent Acquiror reasonably objects to
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any matter(s) reflected therein or requests additional information with respect
thereto, Seller shall use its reasonable efforts to cause the Title Company to
modify and/or supplement the commitments accordingly.
5.12. Obligations and Liabilities. The parties hereby agree that on and
after the Closing Date, the Company will continue to discharge its obligations
and liabilities in the ordinary course of business, and Seller shall not be
derivatively liable for such obligations and liabilities except to the extent
expressly provided in this Agreement.
5.13. Undertaking to Deliver Real Property Descriptions. Within 21 days
of the date hereof, Seller shall deliver to Acquiror (i) a boundary description
which accurately describes the collective perimeter boundary(ies) of the
parcel(s) which comprise the Xxxxxxxx Tract, the Partnership Tract and the 95+/-
acrE "TRIANGLE TRACt" and (ii) a map which accurately depicts the property
boundary(ies) described in clause (i), identifies all of the courses and
distances for such boundary(ies) and each strip, gap or xxxx within the Real
Property outlined in black on the map included in Schedule 1.1A. The items
delivered to Acquiror by Seller pursuant to this Section 5.13 shall be
substituted for the corresponding items attached to this Agreement concurrently
with the execution hereof as Schedules 1.1A, 1.1B and 1.1C.
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ARTICLE VI.
EMPLOYEE BENEFITS
6.1. Maintenance of Benefits.
(a) For a period of 12 months following the Closing Date, Acquiror
shall cause the Company to provide Employees with the same base pay levels and
comparable long-term and short-term incentive compensation bonus opportunities
as were in place immediately prior to the Closing Date; provided, however, that
the Company shall not be required to maintain base pay levels or long-term and
short-term incentive compensation bonus opportunities at levels greater than
those provided for similarly situated employees of Acquiror and its
subsidiaries. Except as provided in the preceding sentence, Acquiror shall for a
period of 12 months following the Closing Date, cause the Company to provide
Employees with compensation and benefits comparable to the Company's Benefits.
Notwithstanding any other provision of this Agreement (i) nothing in this
Agreement will confer third-party beneficiary rights on any individual Employee
or group of Employees, and (ii) nothing in this Agreement will prohibit Acquiror
from permitting the Company during the 12-month period following the Closing
Date to substitute any compensation or benefit plan, program, arrangement or
structure for Employees so long as such Employees are treated on substantially
the same basis as similarly situated employees of Acquiror and its Affiliates.
Nothing in this Section 6.1(a) will limit Acquiror's right to permit the Company
to terminate the employment of any Employee as of or following the Closing Date.
(b) From and after the Closing Date, Acquiror will cause the Company to
perform when due all obligations (i) under the Redland Aggregates North America
Long-Term Incentive Program to Employees and (ii) under each severance or
employment agreement to
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which the Company is a party in accordance with the terms and conditions of such
Program and each such agreement as in effect on the Closing Date; provided, that
nothing in this sentence shall be construed as prohibiting the Acquiror or the
Company from amending or terminating such Program or any such agreement to the
extent permitted by the terms of such Program or any such agreement. From and
after the Closing Date, Acquiror will cause the Company to give Employees
preacquisition service credit for purposes of eligibility, vesting and benefit
accrual under Employee Plans or Benefit Arrangements adopted by the Company or
otherwise made available by Acquiror to Employees at or after the Closing Date.
"Preacquisition service credit" means service with the Company (or a predecessor
or Affiliate of the Company) prior to the Closing Date to the extent such
service was recognized for such purposes by the Company under similar plans and
arrangements prior to the Closing Date, provided that the preacquisition service
credit for benefit accrual purposes under a defined benefit pension plan shall
be granted only if the benefit liability under an Employee Benefit Plan that is
related to such service is transferred to such defined benefit pension plan, and
provided further that preacquisition service credit shall not be granted for the
purpose of retiree medical coverage. From and after the Closing Date, Employee
Plans and Benefit Arrangements relating to Employees adopted by the Company or
otherwise made available by Acquiror to Employees at or after the Closing Date
shall (A) waive all pre-existing condition exclusions for each Employee to the
extent that the Employee Plan or Benefit Arrangement replaces a similar Employee
Plan or Benefit Arrangement maintained by the Company prior to the Closing Date
and such condition was not excluded at the time of such replacement with respect
to such Employee by such similar Employee Plan or Benefit Arrangement of the
Company, and (B) credit each such Employee for purposes of deductible
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limits and copayment requirements during the remainder of the calendar year in
which an Employee Plan or Benefit Arrangement replaces a similar Employee Plan
or Benefit Arrangement of the Company with amounts so credited under such
similar Employee Plan or Benefit Arrangement of the Company for such calendar
year.
(c) As soon as reasonably practicable after the Closing Date, Seller
will cause the plan sponsor ("PLAN SPONSOR") of the Redland North America
Retirement Plan or its successor (the "REDLAND PENSION PLAN") to transfer the
vested and nonvested accrued benefits of participants in the Redland Pension
Plan employed by the Company as of December 31, 1998 or the Closing Date, if
earlier ("REDLAND PENSION PARTICIPANTS") and assets (cash or cash equivalents)
equal to the present value of such benefits or, if less, such amount as may be
permitted pursuant to Section 414(l) of the Code, to be transferred in a manner
that satisfies Section 414(l) of the Code to a defined benefit pension plan or
plans maintained or established by Acquiror which is qualified within the
meaning of Section 401(a) of the Code ("ACQUIROR'S PLAN"). No transfer will
occur until the Plan Sponsor and Seller agree as to the amounts to be
transferred and have received such assurances as may be reasonable that the
applicable provisions of the Code have been satisfied; provided, however, that
Seller will not agree to any such amounts or assurances without the prior
consent of Acquiror. The present value of vested and nonvested accrued benefits
of Redland Pension Participants under the Redland Pension Plan will be
determined by the Plan Sponsor's actuary as of December 31, 1998 (the "VALUATION
DATE") on the basis of the mortality table prescribed by and an interest rate or
rates permitted by Part 4044 of the Pension Benefit Guaranty Corporation
regulations effective as of the Valuation Date, and such other actuarial
assumptions and methods agreed to by both the Plan Sponsor's actuary and an
actuary designated by Acquiror. On the date of the actual transfer from the
Redland Pension
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Plan to Acquiror's Plan, the amount so determined will be increased at the
initial interest rate effective as of the Valuation Date as set forth for
Annuity Valuations in Table I of Appendix B to Part 4044 of the Pension Benefit
Guaranty Corporation regulations, unless the actual transfer occurs more than
180 days after the Valuation Date, in which case the initial interest rate shall
be adjusted for each month following the Valuation Date to reflect the rate in
effect for that month under Table I of Appendix B, and reduced by the amount of
any benefit payments made to Redland Pension Participants for the period between
the Valuation Date and the date of transfer. Acquiror will take such action as
may be necessary to cause Acquiror's Plan to provide each Redland Pension
Participant participating in Acquiror's Plan after the transfer with an accrued
benefit that is not less than the accrued benefit transferred from the Redland
Pension Plan and to provide all benefits protected by law, including optional
forms of benefit. Acquiror's Plan will provide for benefit accrual for Redland
Pension Participants effective as of the earlier of January 1, 1999 and the date
that Redland Pension Participants cease benefit accruals under the Redland
Pension Plan. Seller shall take such action as may be necessary to cause the
Company to withdraw as a participating employer from the Redland Pension Plan
effective as of the Closing Date. Seller agrees to cooperate with Acquiror and
the Company after the Closing Date and to provide any information which Seller
has or can reasonably obtain and any other assistance to the extent reasonably
necessary in order for Acquiror and the Company to fulfill their reporting and
disclosure obligations, to file determination letter applications or other
applications for recognition of tax exemption, and to fulfill their obligations
to protect accrued benefits with respect to Acquiror's Plan and the Company's
Benefits.
6.2. Vacation and Sick Leave. For a period of 12 months following the
Closing Date, Acquiror will cause the Company to maintain vacation and sick
leave policies for
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Employees no less favorable than those maintained by the Company immediately
prior to the Closing Date, and to credit all service earned by Employees prior
to the Closing Date and to accept all vacation and sick leave days accrued by
Employees as of the Closing Date.
6.3. WARN. Acquiror shall not, at any time prior to 180 days after the
Closing Date, effectuate a "plant closing" or "mass layoff" as those terms are
defined in the Worker Adjustment and Retraining Notification Act of 1988, as
amended ("WARN") affecting in whole or in part any facility, site of employment,
operating unit or employee of the Company without complying fully with the
requirements of WARN.
ARTICLE VII.
CONDITIONS TO THE TRANSFER
7.1. Conditions to the Obligations of Each Party. The obligations of
each of Seller and Acquiror to consummate the Transfer of the Stock are subject
to the satisfaction of the following conditions:
(a) the waiting period, if any, under the HSR Act relating to the
transactions contemplated under this Agreement shall have expired or been
terminated; and
(b) no provision of any applicable Law and no judgment, injunction,
order or decree shall prohibit the consummation of the Transfer of the Stock or
the transactions contemplated under this Agreement.
7.2. Conditions to the Obligations of Seller. The obligation of Seller
to consummate the Transfer of the Stock is subject to the satisfaction (or
written waiver by Seller) of each of the following further conditions:
(a) Acquiror shall have performed and complied with in all material
respects all obligations and covenants required to be performed or complied with
by it under this
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Agreement at or prior to the Closing Date and Seller shall have received a
certificate signed by an executive officer of Acquiror on behalf of Acquiror to
the foregoing effect;
(b) the representations and warranties of Acquiror contained in this
Agreement and in any certificate or other writing delivered by Acquiror pursuant
to this Agreement shall be true in all material respects at and as of the
Closing Date as if made at and as of such time and Seller shall have received a
certificate signed by an executive officer of Acquiror to the foregoing effect;
and
(c) the Purchase Price shall have been paid by Acquiror via wire
transfer of immediately available funds to an account designated by Seller.
7.3. Conditions to the Obligations of Acquiror. The obligation of
Acquiror to consummate the Transfer of the Stock is subject to the satisfaction
(or written waiver by Acquiror) of each of the following further conditions:
(a) Seller shall have performed and complied with in all material
respects all obligations and covenants, required to be performed or complied
with by it under this Agreement at or prior to the Closing Date and Acquiror
shall have received a certificate signed by an executive officer of Seller to
the foregoing effect;
(b) the representations and warranties of Seller contained in this
Agreement and in any certificate or other writing delivered by Seller, the
Company or any of its Subsidiaries, pursuant to this Agreement shall be true at
and as of the Closing Date as if made at and as of such time (other than
inaccuracies that in the aggregate do not constitute a Material Adverse Effect)
and Acquiror shall have received a certificate signed by an executive officer of
Seller to the foregoing effect; provided, however, that for the avoidance of
doubt the parties expressly agree that the filing of any civil, criminal or
administrative claim, action, proceeding or
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suit against Acquiror, Seller, the Company or any of their respective
Subsidiaries after the date hereof could give rise to the non-satisfaction of
this condition if, in the aggregate, such claims, actions, proceedings or suits
constitute a Material Adverse Effect;
(c) Seller shall have delivered to Acquiror at Closing the Stock free
and clear of all Liens and encumbrances with the certificate or certificates
evidencing the Stock duly endorsed;
(d) (i) Seller shall have delivered to Acquiror title insurance
commitments in accordance with the provisions of Section 5.11 hereof; and (ii)
Acquiror shall have received current surveys of the Xxxxxxxx Tract, the Xxxxxx
Tract, the Partnership Tract, the "Hunter Tract" in New Braunfels, Texas, and
the "Xxxxxx Tract" in Humble, Texas prepared by a surveyor or engineer licensed
in the State of Texas (each such survey shall be prepared in accordance with the
Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys adopted by
the American Land Title Association and the American Congress on Surveying &
Mapping in 1997, certified to Acquiror's title insurance company (if any),
Acquiror, any mortgagee of Acquiror and such other parties as Acquiror may
designate), which surveys do not disclose any matters relating to the Company's
(or the applicable Subsidiary's) title to the subject real property which make
any of the representations or warranties contained herein inaccurate in a manner
that constitutes a Material Adverse Effect; provided, however, that the
conditions set forth in this Section 7.3(d) shall be of no further force or
effect if, on or before November 30, 1998, (y) Acquiror fails to obtain a survey
of the Xxxxxxxx Tract, the Xxxxxx Tract, the Partnership Tract, the Hunter Tract
or the Xxxxxx Tract or (z) Acquiror fails to notify Seller of any such
inaccuracy;
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(e) Seller shall have delivered to Acquiror all consents,
authorizations, orders and approvals set forth on Schedule 3.5;
(f) Seller shall have delivered to Acquiror an opinion of counsel to
Seller covering the matters set forth in Exhibit B hereto;.
(g) Lafarge S.A. shall have duly executed and delivered to Seller a
guaranty in the form attached to this Agreement as Exhibit C;
(h) the Company shall have the ability in a commercially reasonable
manner and in a manner consistent with its present plan to access, process,
exploit or otherwise utilize the reserves as reported on the Reports (after
giving effect to ordinary course mining since the date of the relevant Report)
with respect to the Xxxxxxxx Tract and the Xxxxxx Tract and no fact, event or
circumstance shall exist with respect to the Xxxxxxxx Tract or the Xxxxxx Tract
that would affect the Company's ability to access, process, exploit or otherwise
utilize the reserves located at each such tract (other than inabilities or
facts, events or circumstances that in the aggregate do not constitute a
Material Adverse Effect).
ARTICLE VIII.
TERMINATION
8.1. Termination. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing:
(i) by mutual written consent of Seller and Acquiror;
(ii) by Seller, so long as Seller is not then in material
breach of this Agreement, (A) after February 28, 1999 if the Closing
shall not have occurred on or before such date or (B) at any time in
the event Acquiror is in material breach of any of its
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obligations under this Agreement and such breach has continued uncured
for a period of more than 10 days after receipt of a written notice
from Seller;
(iii) by Acquiror, so long as Acquiror is not then in material
breach of this Agreement, (A) after February 28, 1999 if the Closing
shall not have occurred on or before such date or (B) at any time in
the event Seller is in material breach of any of its obligations under
this Agreement and such breach has continued uncured for a period of
more than 10 days after receipt of a written notice from Acquiror; and
(iv) by Acquiror, provided it is not in breach of any of its
obligations under this Agreement, if any disclosure provided by Seller
pursuant to Section 5.2 would result in a Material Adverse Effect and
Acquiror exercises this right within ten days of its receipt of the
relevant disclosure or of the Supplemental Disclosures.
8.2. Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 8.1 hereof, this Agreement, except for the
provisions of Sections 5.4, 5.6(b), 5.7, 11.4, 11.10 and 11.11, shall forthwith
become null and void and have no effect, without any liability on the part of
either party or their respective directors, officers or stockholders. Nothing in
this Article VIII shall, however, relieve either party to this Agreement of
liability for breach of this Agreement occurring prior to such termination, or
for breach of any provision of this Agreement which specifically survives
termination hereunder.
ARTICLE IX.
TAX MATTERS
9.1. Preparation of Tax Returns; Responsibility for Taxes.
(a) Seller shall prepare and timely file (or cause to be prepared and
timely filed) a consolidated United States federal income Tax Return for the
Company and its
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affiliated Subsidiaries, and all other separate, consolidated, combined or
unitary income Tax Returns in which the Company or any of its Subsidiaries is
required to be included, for each taxable year or period of the Company and any
such Subsidiary which ends on or before the Closing Date; provided, however,
that Seller shall allow Acquiror to review and reasonably approve without undue
delay any such Tax Return with respect to any taxable period which ends on or
before the Closing Date at any time during the forty-five (45) day period
immediately preceding the filing of such Tax Return; and provided, further, that
Acquiror shall have no right to object to any tax elections reflected on such
Tax Returns to the extent such elections are otherwise permitted under the terms
of this Agreement, unless Acquiror agrees to bear any increase in Taxes
attributable to the failure to make such elections. Seller shall be responsible
for the timely payment (and entitled to any refund) of all Taxes due with
respect to the taxable years or periods covered by such Tax Returns. Seller and
Acquiror agree that, to the extent that the relevant Tax Authority permits, but
does not require, the Company or any of its Subsidiaries to file a Tax Return
for the taxable period that includes the Closing Date as ending on the Closing
Date, Seller shall file (or cause to be filed) such Tax Return as if the taxable
period ended as of the close of business on the Closing Date. Any Tax Return
described in the preceding sentence shall not constitute a Straddle Tax Return.
(b) Except as provided in Section 9.1(a), Acquiror shall prepare and
timely file (or cause to be prepared and timely filed) all Tax Returns relating
to the Company and its Subsidiaries and their respective operations or assets
that are required to be filed (taking into account applicable extensions) after
the Closing Date.
(c) The Company shall pay (or cause to be paid) the Taxes shown to be
due on all Straddle Tax Returns, provided that Seller shall promptly reimburse
the Company for
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the portion of such Tax that relates to a Pre-Closing Tax Period, except to the
extent accrued on the Working Capital Statement. Seller will furnish to Acquiror
all information and records in the possession of Seller reasonably requested by
Acquiror for use in preparation of any Straddle Tax Returns. Acquiror shall
allow Seller to review, comment upon and reasonably approve without undue delay
any Straddle Tax Return at any time during the forty-five (45) day period
immediately preceding the filing of such Tax Return. Acquiror and Seller agree
that Acquiror will cause the Company to file all Tax Returns for any Straddle
Period on the basis that the relevant taxable period ended as of the close of
business on the Closing Date, unless the relevant Tax authority will not accept
a Tax Return filed on that basis. In the case of any Straddle Period, (i) real,
personal and intangible property Taxes ("PROPERTY TAXES") of the Company and its
Subsidiaries for the Pre-Closing Tax Period shall be equal to the amount of such
property Taxes for the entire Straddle Period multiplied by a fraction, the
numerator of which is the number of days during the Straddle Period that are in
the Pre-Closing Tax Period and the denominator of which is the number of days in
the Straddle Period; and (ii) the Taxes of the Company and its Subsidiaries
(other than property Taxes) for the portion of the Straddle Period that
constitutes a Pre-Closing Tax Period shall be computed as if such taxable period
ended as of the close of business on the Closing Date.
(d) Any Tax Returns to be prepared pursuant to the provisions of
Section 9.1(a) and any Straddle Tax Return shall be prepared in a manner
consistent with practices followed in prior years with respect to similar Tax
Returns, except for changes required by changes in Law or fact.
(e) Seller shall indemnify Acquiror, the Company, its Affiliates and
each of their respective officers, directors and employees and hold them
harmless from all Losses
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attributable to Pre-Closing Taxes. For purposes of this Agreement, "PRE-CLOSING
TAXES" shall mean, except to the extent accrued on the Working Capital
Statement: (a) all liability for Taxes of the Company and its Subsidiaries for
Pre-Closing Tax Periods; (b) all liability resulting by reason of the several
liability of the Company or any of its Subsidiaries pursuant to Treasury
Regulations ss. 1.1502-6 or any analogous state, local or foreign law or
regulation or by reason of having been a member of any consolidated, combined or
unitary group on or prior to the Closing Date; (c) all liability for Taxes
resulting by reason of events or transactions (other than any intercompany
transaction under Treasury Regulations ss. 1.1502-13) occurring or performed in
a Pre-Closing Tax Period; (d) any liability for Taxes attributable to the
failure of Acquiror to withhold any portion of the Purchase Price under Section
9.4 of this Agreement; and (e) all liability for Taxes of any other Person
pursuant to any contractual agreement entered into by the Seller, the Company or
any of its Subsidiaries on or before the Closing Date.
(f) Seller and Acquiror will, and Acquiror will cause the Company and
its Subsidiaries to, in all reasonable respects cooperate with each other in the
conduct of any Tax audit or similar proceedings involving or otherwise relating
to the Company or any of its Subsidiaries (or the income therefrom or assets
thereof) with respect to any Tax and each will execute and deliver such powers
of attorney and other documents as are necessary to carry out the intent of this
Section 9.1(f). In the event of any Tax audit or similar proceedings involving
(in whole or in part) Taxes subject to Section 9.1(c), if Seller and its
Affiliates are not the primary parties to such proceedings, (i) Acquiror will,
and will cause the Company to, promptly notify Seller of the pendency of such
audit or proceeding; (ii) if Seller so elects, Seller or its designated
accountants or counsel will be permitted at its own cost and expense to
participate in such audit or proceedings and all appeals therefrom; (iii)
Acquiror and its Affiliates will direct and control
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such audit or proceedings except for audits and proceedings where the majority
of the potential liability relating to such Tax Returns is the responsibility of
Seller, which audits and proceedings Seller shall have the right to direct and
control, subject in each case to the right of the non-controlling party to
approve any settlements or decisions to appeal, which approval shall not be
unreasonably withheld. In any event, the party conducting or directing such
audit or other proceedings (the "DIRECTING PARTY") will consult in good faith
with the other party on all decisions relating to such audit and proceedings,
and will provide such party with copies of all documents received or submitted
during such audit and proceedings (redacted as appropriate to preserve the
confidentiality of the Affiliates of the Directing Party).
(g) Seller will cause any Tax sharing agreement or similar arrangement
between the Company and Seller or its Affiliates to be terminated, effective as
of the Closing, to the extent that any such agreement relates to the Company or
any of its Subsidiaries, and after the Closing neither the Company nor any of
its Subsidiaries shall have any obligation under any such agreement or
arrangement for any past, present or future period.
9.2. Access to Information.
(a) From and after the Closing, Seller shall grant to Acquiror (or its
designee) access at all reasonable times after reasonable advance notice to all
of the information, books and records, relating to the Company or any of its
Subsidiaries within the possession of Seller (including work papers and
correspondence with Tax authorities) and shall afford Acquiror (or its designee)
the right (at Acquiror's expense) to take extracts therefrom and make copies
thereof, to the extent reasonably necessary to permit Acquiror (or its designee)
to prepare Tax Returns and to respond to any audit, inquiry, proceeding or other
action with respect to such Tax Returns.
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(b) From and after the Closing, Acquiror shall grant to Seller (or its
designee) access at all reasonable times after reasonable advance notice to all
of the information, books and records, relating to the Company or any of its
Subsidiaries within the possession of Acquiror, the Company or any such
Subsidiary (including work papers and correspondence with Tax authorities) and
shall afford Seller (or its designee) the right (at Seller's expense) to take
extracts therefrom and make copies thereof, to the extent reasonably necessary
to permit Seller (or its designee) to prepare Tax Returns and to respond to any
audit, inquiry, proceeding or other action with respect to such Tax Returns. In
addition, and without limiting the generality of the foregoing, to permit Seller
to comply with its obligations under Section 9.1(a), Acquiror will prepare (or
cause the Company to prepare in accordance with prior practices) and deliver to
Seller, as soon as reasonably practical after receipt of a request therefor from
Seller, the standard income tax data reporting package and audit working paper
files traditionally provided by the Company and any of its Subsidiaries to
Seller and all other data regarding the Company reasonably requested by Seller
for the preparation of any Tax Return under Section 9.1(a).
9.3. Transfer Taxes. Acquiror shall be responsible for the payment of
all foreign, state, local, provincial and municipal transfer, sales, use or
other similar Taxes (and all recording or filing fees) resulting from the
transactions contemplated by this Agreement, excluding any U.S. or foreign
income, franchise or similar Taxes.
9.4. FIRPTA Matters. Seller shall, on the Closing Date, cause the
Company to (i) deliver to Acquiror a written statement which, in form and
substance, satisfies the requirements of section 1.897-2(h)(1) of the Income Tax
Regulations certifying that, as of the Closing Date, the Company has determined
that it is not and, at all times during the five year period preceding the date
of such written statement, has not been a United States real property
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holding corporation within the meaning of Section 897(c)(2) of the Code, and
that the stock does not constitute a United States real property interest within
the meaning of Section 897(c)(1)(A) of the Code (the "FIRPTA STATEMENT"), and
(ii) deliver to the Internal Revenue Service a written notification which, in
form and substance, satisfies the requirements of section 1.897-2(h)(2) of the
Income Tax Regulations with respect to the determinations referred to in clause
(i) above, together with any of the supplemental statements specified in section
1.897-2(h)(5) of the Income Tax Regulations which the Company is required to
submit to the Internal Revenue Service in connection therewith. Acquiror shall
rely on the FIRPTA Statement for purposes of availing itself of the exception to
withholding set forth in Section 1445(b)(3) of the Code, and the Purchase Price
shall be paid by the Acquiror to Seller without any reduction therefrom for the
withholding tax imposed by Section 1445(a) of the Code.
ARTICLE X.
SURVIVAL; INDEMNIFICATION
10.1. Limitation of Representations and Warranties. EXCEPT AS EXPRESSLY
SET FORTH IN THIS AGREEMENT, (A) THERE ARE NO REPRESENTATIONS OR WARRANTIES OF
ANY KIND, EXPRESSED OR IMPLIED, WITH RESPECT TO SELLER OR THE COMPANY OR ITS
BUSINESSES, ASSETS, RESULTS OF OPERATIONS, OR FINANCIAL CONDITION AND (B) SELLER
AND THE COMPANY MAKE NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO (i) ANY
PROJECTIONS, ESTIMATES OR BUDGETS DELIVERED TO OR MADE AVAILABLE TO ACQUIROR OF
FUTURE REVENUES, FUTURE RESULTS OF OPERATIONS (OR ANY COMPONENT THEREOF), FUTURE
CASH FLOWS OR FUTURE FINANCIAL CONDITION (OR ANY COMPONENT THEREOF) OF THE
COMPANY, OR
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(ii) ANY OTHER INFORMATION OR DOCUMENTS MADE AVAILABLE TO ACQUIROR OR ITS
COUNSEL, ACCOUNTANTS OR ADVISORS WITH RESPECT TO THE COMPANY, OR (iii) THE
CONDITION OF ANY ASSETS OWNED, USED OR HELD FOR USE BY THE COMPANY OR ANY
SUBSIDIARY OF THE COMPANY.
10.2. Survival of Representations and Warranties. The representations
and warranties of Acquiror and Seller contained in this Agreement shall survive
the Closing; provided, however, that (a) no claim, lawsuit, or other proceeding
based upon the breach of any representation or warranty contained in this
Agreement (other than Sections 3.4, 3.8 and 3.12) may be made by any Indemnitee
unless notice of such claim, lawsuit or other proceeding, is given to the
Indemnitor in accordance with Section 10.5 prior to the second anniversary of
the Closing Date, (b) no claim, lawsuit, or other proceeding based upon the
breach of the representations and warranties contained in Section 3.8 may be
made by any Acquiror Indemnitee unless notice of such claim, lawsuit or other
proceeding, is given to the Indemnitor in accordance with Section 10.5 prior to
180 days after the later of the expiration of (i) the statute of limitations for
the applicable Tax and (ii) any extension of the statute of limitations for the
applicable Tax, (c) no claim, lawsuit, or other proceeding based upon the breach
of the representations and warranties contained in Section 3.12 may be made by
any Acquiror Indemnitee unless notice of such claim, lawsuit or other
proceeding, is given to the Indemnitor in accordance with Section 10.5 prior to
the tenth anniversary of the Closing Date and (d) claims, lawsuits, or other
proceedings based upon the representations and warranties contained in Section
3.4 with respect to the capital stock of the Company may be made at any time
upon notice of such claim, lawsuit or other proceeding, being given to the
Indemnitor in accordance with Section 10.5.
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10.3. Indemnification by Seller. Notwithstanding the Closing and
regardless of any investigation at any time made by or on behalf of Acquiror or
of any knowledge or information that Acquiror may have, from and after the
Closing and in addition to the indemnification obligation of Seller set forth in
Section 9.1(e) Seller shall indemnify and fully defend, save and hold Acquiror,
any Affiliate of Acquiror, and their respective stockholders, directors,
officers, agents, employees and representatives, including after Closing the
Company and its Subsidiaries (the "ACQUIROR INDEMNITEES"), harmless if any
Acquiror Indemnitee shall at any time or from time to time suffer any damage,
liability, loss, cost, expense (including all reasonable attorneys' fees and
expenses), deficiency, interest, penalty, impositions, assessments or fines but
less any insurance proceeds (collectively, "LOSSES") to the extent not included
in the Final Working Capital arising out of or resulting from, or shall pay or
become obligated to pay any sum on account of, one or more of the following:
(a) any untruth or inaccuracy in any representation or certification of
Seller, the Company or any of its Subsidiaries or the breach of any warranty of
Seller contained in this Agreement or in any certificate delivered by Seller,
the Company or any of its Subsidiaries to the Acquiror in connection with the
Closing to the extent the amount of the Losses resulting from such untruth,
inaccuracy or breach have not been specifically set forth on Schedule 10.3 (the
"NON-CURRENT LIABILITIES SCHEDULE") as a liability included in the June 30, 1998
Balance Sheet, without regard to (i) any limitation or qualification as to
materiality, Material Adverse Effect or material adverse change or (ii) the
information set forth in Schedules 3.3, 3.6, 3.7, 3.8, 3.9 (except with respect
to clause (h) of the related representation), 3.10 (with respect to clause (b)
of the related representation), 3.10 (with respect to clause (c) of the related
representation), 3.12 (with respect to clause (c) of the related
representation), 3.12 (with respect to clause (d) of the
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related representation), 3.14, 3.15 (with respect to the second sentence of
clause (b) of the related representation) , 3.16(b) (with respect to the last
sentence of clause (b) of the related representation), 3.21 (with respect to the
fourth sentence of the related representation); 3.24 (with respect to the fourth
sentence of the related representation) and 3.27, except to the extent marked on
any of such Schedules with an asterisk (the "LIABILITY SCHEDULES") (it being the
intent of the parties that for purposes of this Section 10.3(a) such Liability
Schedules shall be deemed to be blank); or
(b) any liability (including, without limitation, the portion of the
Loss set forth in clause (h) below not paid by Seller), penalty, assessment or
fine ("LIABILITY") and any Loss (but only if such Loss arises out of or relates
to a Liability) to the extent arising out of or relating to facts,
circumstances, events or occurrence existing at or prior to the Closing
(collectively, "PRE-CLOSING MATTERS") if, had all of the facts relating to such
Pre-Closing Matters been known and the amount of such Liability or Loss been
established as of the Closing (provided that the amount of such Liability or
Loss which would have been established as of the Closing Date shall not be
determinative of the amount of such Liability or Loss), an accrual or reserve
for such Pre-Closing Matters would have been included in a consolidated balance
sheet for the Company prepared as of the Closing in accordance with GAAP
(ignoring for these purposes, principles of probability, materiality and ability
to quantify); provided, however, that the foregoing shall apply only so long as
notice of such fact, circumstance, event or occurrence is given to the
Indemnitor in accordance with Section 10.5 prior to the tenth anniversary of the
Closing Date; and, provided, further, that the foregoing shall not apply to the
extent of the amount of such Liability or Loss included in the Non-current
Liabilities Schedule; or
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(c) any failure of the Seller duly to perform or observe any term,
provision, covenant, agreement or condition contained in this Agreement on the
part of Seller to be performed or observed (except each of the covenant set
forth in Section 5.1(xii) and Section 5.2(c) which for purposes of this Article
X shall be deemed covered by Sections 10.3(a) and/or 10.3(b)); or
(d) any Loss arising out of or relating to (i) the business of
processing stone to produce lime and lime products (including, without
limitation, the disposition or operation of such business on or prior to the
Closing Date) conducted by the Company or any of its Subsidiaries before May 28,
1998 or such former business as conducted by any other Person after May 28,
1998; or
(e) any Loss on account of any act or failure to act on the part of any
member of the Company's affiliated group (excepting the Company or any
Subsidiary of the Company) or of any other person (excepting the Company or any
Subsidiary of the Company) arising out of or relating to: (i) a violation of
ERISA or any other law or regulation relating to an employee benefit plan as
defined in Section 3(3) of ERISA or any other employee benefit or compensation
arrangement sponsored, maintained, participated in or contributed to by a member
of the Company's affiliated group (all referred to hereinafter as "plan"), or
(ii) a failure to comply with the terms of a plan or to make a required
contribution to a plan; provided, however, that the purpose of this Section
10.3(e), the "Company's affiliated group" means (A) the Company and any trade or
business (whether or not incorporated) which is or has ever been under common
control with or treated as a single employer with the Company under Section
414(b), (c), (m) or (o) of the Code, (B) any trade or business (whether or not
incorporated) which has maintained, sponsored, participated in, contributed to
or been required to contribute to any plan which the
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Company or any of its Subsidiaries has maintained, sponsored, participated in,
contributed to or been required to contribute to, and (C) any trade or business
(whether or not incorporated) which is or has ever been under common control
with or treated as a single employer with any trade or business described in
clause (B) (immediately preceding) under Section 414(b), (c), (m) or (o) of the
Code; or
(f) any Loss relating to the assets transferred from the Redland
Pension Plan to the Acquiror's Plan under Section 6.1(c) being less than the
guaranteed transfer amount (provided that the amount of such Loss shall be
determined as follows. If the amount of assets transferred is less than the
present value of the Redland Pension Participants' vested and nonvested benefits
as determined under Section 6.1(c), the Loss is the guaranteed transfer amount
minus the amount of such transferred assets. The guaranteed transfer amount is
the same percentage of the total assets of the Redland Pension Plan at the
transfer date as the present value of the Redland Pension Participants' vested
and nonvested benefits as determined under Section 6.1(c) is as a percentage of
the present value of all participants' vested and nonvested benefits determined
under Section 6.1(c) at the date of the transfer. For example, if the total
value of the Redland Pension Plan assets at the transfer date is $75,000,000,
the present value of the Redland Pension Participants' vested and nonvested
benefits as determined under Section 6.1(c) is $6,000,000 and the present value
of all other vested and nonvested benefits of the Redland Pension Plan is
$71,000,000, then the guaranteed transfer amount would be $5,844,150. If the
amount of assets transferred is $5,700,000, the Loss would be $144,150); or
(g) any Loss with respect to contributions required to be made to the
Redland Pension Plan with respect to benefit liabilities of the Redland Pension
Plan other than benefit liabilities transferred to Acquiror's Plan under Section
6.1(c); or
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(h) any Loss set forth on Schedule 10.3(h);
provided, however, that Seller shall have no obligation to make any payment
under Section 10.3(a) or 10.3(b) unless the aggregate amount to which all
Acquiror Indemnitees are entitled by reason of all such claims under Sections
10.3(a) and 10.3(b) exceeds $25 million, and then only for the amount by which
such total claims for Losses exceed such amount but such amount to be paid by
Seller shall not, in any event, exceed $200 million, it being understood that
such amount shall be payable by Seller upon a valid indemnity claim made by
Acquiror.
10.4. Indemnification by Acquiror. Notwithstanding the Closing and
regardless of any investigation at any time made by or on behalf of Seller or of
any knowledge or information that Seller may have, from and after the Closing
Acquiror shall indemnify and agree to fully defend, save and hold Seller, any
Affiliate of Seller, and their respective stockholders, directors, officers,
agents, employees and representatives (the "SELLER INDEMNITEES") harmless if
Seller shall at any time or from time to time suffer any Losses arising out of
or resulting from, or shall pay or become obligated to pay any sum on account of
any one or more of the following:
(a) any untruth or inaccuracy in any representation or certification of
the Acquiror or the breach of any warranty of Acquiror contained in this
Agreement or in any certificate delivered to Seller in connection with the
Closing; or
(b) any failure of Acquiror duly to perform or observe any term,
provision, covenant, agreement or condition contained in this Agreement on the
part of Acquiror to be performed or observed;
provided, however, that Acquiror shall have no obligation to make any payment
under Section 10.4(a) with respect to any representation or warranty unless the
aggregate amount to which
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Seller is entitled by reason of all such claims exceeds $25 million, and then
only for the amount by which such total claims for Losses exceed such amount but
such amount to be paid by Acquiror shall not, in any event, exceed $200 million,
it being understood that such amount shall be payable by Acquiror upon a valid
indemnity claim made by Seller.
10.5. Procedures for Indemnification.
(a)(i) If any Acquiror Indemnitee or Seller Indemnitee (an "INDEMNIFIED
PARTY") receives notice of the assertion of any claim, the commencement of any
suit, action or proceeding, or the imposition of any penalty or assessment by a
third party in respect of which indemnity may be sought hereunder (a "THIRD
PARTY CLAIM"), and the indemnified party intends to seek indemnity hereunder,
the indemnified party will promptly provide the other party (an "INDEMNIFYING
PARTY") with written notice of the Third Party Claim, but in any event such
notice shall be provided not later than 30 calendar days after receipt of such
notice of Third Party Claim. The failure by an indemnified party to so notify an
indemnifying party of a Third Party Claim will not relieve the indemnifying
party of any indemnification responsibility under this Article X, except to the
extent, if any, that such failure materially prejudices the ability of the
indemnifying party to defend such Third Party Claim. For clarification, it is
agreed that Seller will not be an indemnifying party for claims pursuant to
Section 10.3(a) or 10.3(b) for amounts below the $25 million amount referred to
in the last proviso of Section 10.3.
(ii) The indemnifying party will have the right to control the defense,
compromise or settlement of the Third Party Claim with its own counsel
(reasonably satisfactory to the indemnified party); provided, however, that the
indemnifying party shall not settle any such Third Party Claim without the
consent of the indemnified party (which
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consent shall not be unreasonably withheld); and provided, further, that if the
indemnifying party presents to the indemnified party a bona fide settlement
proposal that the indemnifying party desires to accept that is not patently
unreasonable on its face (the "SETTLEMENT PROPOSAL") and such Settlement
Proposal is not consented to by the indemnified party, the indemnifying party's
responsibility under this Agreement shall not extend beyond the amount set forth
in the Settlement Proposal. The indemnified party will cooperate in the defense
of any Third Party Claim. The indemnified party will be entitled (at the
indemnified party's expense) to participate in the defense by the indemnifying
party of any Third Party Claim with its own counsel. In the event that a
Settlement Proposal is not consented to by the indemnified party, the
indemnified party may, at its option, assume the defense of such Third Party
Claim and the indemnifying party shall cooperate with the defense of such claim.
(iii) In the event that the indemnifying party does not undertake the
defense, compromise or settlement of a Third Party Claim in accordance with
subsection (ii) of this Section 10.5, the indemnified party will have the right
to control the defense, compromise or settlement of such Third Party Claim with
counsel of its choosing; provided, however, that the indemnified party will not
settle or compromise any Third Party Claim without the indemnifying party's
prior written consent, (A) the indemnifying party has failed to acknowledge its
obligation to indemnify the indemnified party with respect to said Third Party
Claim in accordance with this Article X, in which case the indemnified party may
settle or compromise without such consent or (B) the indemnifying party has
acknowledged its obligation but refuses to consent to said settlement or
compromise, in which case the indemnified party may settle or compromise without
such
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consent, so long as said settlement or compromise is at a cost which is
reasonable. The indemnifying party will be entitled (at the indemnifying party's
expense) to participate in the defense of any Third Party Claim with its own
counsel.
(iv) Any indemnifiable claim hereunder that is not a Third Party Claim
will be asserted by the indemnified party by promptly delivering notice thereof
to the indemnifying party. Such notice must set forth with specificity the facts
and circumstances on which the claim for indemnity is based, identify the
specific provision or provisions of this Agreement upon which the claim is
based, set forth the amount of the claim or a reasonable estimate thereof if the
amount is not liquidated and, in the case of a claim by an Acquiror Indemnitee
pursuant to Section 10.3(b), such notice shall state the basis for the
claimant's conclusion that the matter giving rise to the claim would have been
required to have been included in the consolidated closing balance sheet as
contemplated in Section 10.3(b). In the case of an Acquiror Indemnitee claim
pursuant to Section 10.3(a) or Section 10.3(b), such notice must also include
substantiation that the amount of all prior claims to which Acquiror Indemnitees
would have been entitled to indemnification (but for time limits and amounts
considerations) has exceeded $25 million.
(b) Notwithstanding anything contained in this Agreement to the
contrary, in the event that a claim or demand for indemnification by Acquiror or
Seller may be made under more than one provision of this Agreement, Acquiror or
Seller, as applicable, shall have the right to recover Losses under any
provision of this Agreement and may make such claim or demand without regard to
whether such claim or demand would be precluded by any other provision of this
Agreement; provided, however, that neither Acquiror nor Seller shall be entitled
to recover more than once for the same Loss.
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10.6. Exclusive Remedy. Except as otherwise provided under Sections
5.6(b) and 9.1(e), the parties hereto hereby acknowledge and agree that the
indemnification rights under this Article X constitute the exclusive remedy
after the Closing for any party for any claim of a breach of or inaccuracy in
any representation or warranty herein and any breach or non-fulfillment of any
covenant or agreement herein, except for equitable relief; provided, that
nothing contained herein shall limit the right of any party to exercise or
enforce (i) any right of contribution available under any law, rule or
regulation from any other party or (ii) any rights under the Lafarge Guaranty or
any other agreement entered into on or prior to the Closing Date.
ARTICLE XI.
MISCELLANEOUS
11.1. Entire Agreement. This Agreement, including the Schedules to this
Agreement and the Confidentiality Agreement constitute the entire agreement of
the parties to this Agreement with respect to the subject matter hereof and
thereof and supersede all prior agreements and undertakings, both written and
oral, with respect to the subject matter hereof and thereof.
11.2. Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile) and shall be given
if to Seller, to:
Redland International Limited
c/o Lafarge S.A.
00, xxx xxx Xxxxxx Xxxxxxxx
X.X.00
00000 Xxxxx, cedex 16
France
Attention: Directeur des Affaires Juridiques
Telecopy: (00-0) 00-00-00-00
with a copy to:
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Xxxxx Day Xxxxxx & Xxxxx
0000 XxxXxxxx Xxxxx
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
if to Acquiror to:
Xxxxxx Xxxxxxxx Materials, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Chairman
with a copy to:
Xxxxxx Xxxxxxxx Materials, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Vice President and General Counsel
and
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. X'Xxxxxxxx
or such other address or facsimile number as such party may hereafter specify
for such purpose by notice to the other party to this Agreement. Each such
notice, request or other communication shall be effective (i) if given by
facsimile transmission, when such facsimile is transmitted to the facsimile
number specified in this Section 11.2 and the appropriate confirmation is
received, or (ii) if given by any other means, when delivered at the address
specified in this Section 11.2.
11.3. Amendments; No Waivers.
(a) Any provision of this Agreement may be amended or waived prior to
the Closing Date if, and only if, such amendment or waiver is in writing and
signed, in the case
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of an amendment, by Seller and Acquiror or in the case of a waiver, by the party
against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
11.4. Expenses. Except as otherwise provided in this Agreement, all
costs and expenses incurred in connection with this Agreement shall be paid by
the party incurring such cost or expense.
11.5. Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties to this Agreement and their
respective successors and assigns, provided that, no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of the other party to this Agreement and provided further
that Acquiror may assign its rights, but not its obligations, under this
Agreement to any of its Subsidiaries. Notwithstanding anything contained in this
Agreement to the contrary, nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties to this Agreement or
their respective successors and permitted assigns, any rights, remedies
obligations or liabilities under or by reason of this Agreement.
11.6. Certain Interpretive Matters.
(a) Unless the context otherwise requires, (i) all references in this
Agreement to Sections, Articles or Schedules are to Sections, Articles or
Schedules of or to this Agreement, (ii) each term defined in this Agreement has
the meaning ascribed to it, (iii) each accounting term not otherwise defined in
this Agreement has the meaning assigned to it in
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accordance with GAAP and (iv) words in the singular include the plural and vice
versa. All references to "$" or dollar amounts will be to lawful currency of the
United States of America.
(b) Titles and headings to Sections in this Agreement are inserted for
convenience of reference only, and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement. No provision of this Agreement
will be interpreted in favor of, or against, any of the parties to this
Agreement by reason of the extent to which any such party or its counsel
participated in the drafting thereof or by reason of the extent to which any
such provision is inconsistent with any prior draft hereof or thereof.
(c) Unless otherwise indicated in a particular schedule, disclosure of
any matter, fact or circumstance in a Schedule to this Agreement shall not be
deemed to be disclosure thereof for purposes of any other Schedule hereto.
11.7. Governing Law. This Agreement shall be construed in accordance
with and governed by the internal substantive law of the State of Texas
regardless of the laws that might otherwise govern under principles of conflict
of laws applicable thereto.
11.8. Counterparts; Effectiveness. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and to this Agreement were upon the same
instrument. This Agreement shall become effective when each party to this
Agreement shall have received counterparts hereof signed by the other party to
this Agreement.
11.9. Knowledge. For purposes of this Agreement, "to the knowledge of
Seller" shall mean actual knowledge, based on reasonable inquiry, of the persons
identified on Schedule 11.9.
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11.10. Consent to Jurisdiction. Any suit, action or proceeding seeking
to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby shall be
brought in the State or Federal Courts in the State of New York. The parties to
this Agreement consent to the exclusive jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waive, to the fullest extent permitted by Law, any objection
which they may now or hereafter have to the laying of the venue of any such
suit, action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, the parties to this Agreement
agree that service of process on such party may be made upon the designated
person at the address provided in Section 11.2 hereof and shall be deemed to be
effective service of process on such party.
11.11. Confidentiality. Each of Seller and Acquiror agrees to maintain
in strict confidence any and all information each party learns or discovers
about the other or its respective Affiliates during the course of the
negotiation, execution and delivery of this Agreement and agrees to abide by the
terms and conditions set forth in the Confidentiality Agreement. This Section
11.11 shall not apply to any information that is, or could reasonably be,
learned or discovered through any independent source that is not obligated to
maintain such information as confidential.
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11.12. Severability. If any term, provision, covenant or restriction of
this Agreement is determined by a Governmental Entity to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement will remain in full force and effect and will in
no way be affected, impaired or invalidated.
IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be duly executed by their respective authorized officers a
day and year first above written.
REDLAND INTERNATIONAL LIMITED
By: /s/ D.G. Hooreman
---------------------------------
Name: D.G. Hooreman
Title: Director
XXXXXX XXXXXXXX MATERIALS, INC.
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President,
Chief Financial Officer and
Treasurer
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