EXHIBIT 2.1
AGREEMENT
FOR
PURCHASE AND SALE OF ASSETS
THIS AGREEMENT is made and entered into this 3rd day of March, 1995, by
and between Ceco Concrete Construction Corp., a Nevada corporation ("Buyer")
on the one hand and Robertson-Ceco Corporation, a Delaware corporation
("Seller") on the other hand.
WHEREAS, Seller is engaged in the business of acting as a concrete
formwork subcontractor for site-cast construction projects, providing field
labor for erection and removal of forms and support centering materials,
including (i) providing subcontracting services for forming poured-in-place,
reinforced concrete building components (e.g. concrete floors, roofs, walls
and other miscellaneous building parts) and (ii) additional services which
include material and labor for concrete and reinforcing steel as well as
project management for construction of entire concrete structural frames and
skeletons of buildings, through its Ceco Concrete Construction Division (as
used herein the "Concrete Construction Division," the "Division" or the
"Business").
WHEREAS, Seller owns and leases certain facilities (the "Facilities") at
which it conducts the Business of its Ceco Concrete Construction Division;
WHEREAS, Buyer desires to purchase from Seller and Seller desires to
sell to Buyer the assets and Business of Seller's Ceco Concrete Construction
Division; and
WHEREAS, if the Closing occurs the Buyer will be deemed to have received
all of the Purchased Assets (as defined below) and Assumed Liabilities (as
defined below) as of October 1, 1994, subject to adjustment as set forth
herein, as well as the benefit of all cash and cash equivalents and the burden
of expenses and current reimbursement through the Closing for those ongoing
corporate services specified on Schedule 2.4 incurred thereafter in the
ordinary course of business consistent with past practice;
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements herein contained, the parties agree as follows:
ARTICLE I
THE TRANSACTION
1.1 Purchase and Sale of Assets. Upon the terms and subject to the
conditions of this Agreement, at the Closing, Seller shall sell, transfer,
assign and deliver to Buyer, and Buyer shall purchase, accept and receive, all
right, title and interest in and to the Purchased Assets (as defined below).
1.2 Purchased Assets. The "Purchased Assets" are all of the Business
and all of the assets used primarily in the operation of the Business and all
of the assets located at, used in connection with and/or directly related to
the Facilities and their operations, as in existence as of the Effective Time
(as defined below), subject to changes in the ordinary course of business,
including the following:
(a) All real property of or relating primarily to the Concrete
Construction Division, whether owned or leased, including all land,
buildings, structures, easements, appurtenances and privileges relating
thereto, and all leaseholds, improvements, fixtures and other
appurtenances and options, including options to purchase and renew, and
other rights thereunder, excluding landfills and waste disposal sites as
more particularly described on Schedule 4.11 (the "Real Estate");
(b) all tools, machinery and equipment, forms, office furniture
and office equipment of or relating primarily to the Concrete
Construction Division;
(c) all inventories of raw materials, components, lumber, spare
parts and supplies, work in process and finished goods of or relating
primarily to the Concrete Construction Division ("Inventory");
(d) all accounts and notes receivable and retentions of or
relating primarily to the Concrete Construction Division;
(e) all computer software programs, source codes, object codes,
information systems, program specifications and related material and
documentation of or relating primarily to the Concrete Construction
Division and any and all licenses and copies thereof and rights thereto
to the extent assignable, (the "Software");
(f) all information in the nature of know-how, trade secrets,
inventions, processes, designs, devices and related information and
documentation of or relating primarily to the Concrete Construction
Division (the "Technical Information");
(g) all patents, trademarks, trade names, trade styles, logos,
product designations and service marks of or relating primarily to the
Concrete Construction Division and all applications (pending or in
process) and registrations therefor and licenses thereof, excluding the
name "Ceco" which is to be licensed to Buyer (the "Intellectual
Property");
(h) all documents and records relating to the Business, each
Facility (or its operations) and the Purchased Assets (other than books
and records relating primarily to Seller's business as a whole but also
related to the Business, copies of which shall be conveyed to Buyer);
(i) all records relating to those employees subsequently hired
by Buyer;
(j) all permits, licenses, approvals, registrations,
authorizations and indicia of authority (and pending applications for
any thereof) used exclusively or primarily by the Business, to the
extent transferable or licensable ("Licenses and Permits");
(k) all Seller's rights of or relating primarily to the Concrete
Construction Division from the pending arbitration and litigation
proceedings listed on Schedule 1.3(d) to the extent transferable;
(l) all rights of or relating primarily to the Concrete
Construction Division to (i) casualty and property insurance claims and
proceeds, (ii) rights under Owner/Contractor insurance policies, and
(iii) other insurance claims and proceeds to the extent related to any
Assumed Liabilities;
(m) all contractual rights and leasehold interests of or
relating primarily to the Concrete Construction Division, including
rights and interests of Seller under leases and contracts referred to in
Schedule 1.3(a) and all other rights of Seller under all other
agreements referred to in Schedule 1.3(a); and
(n) prepaid expenses, deposits, advances and similar amounts of
or relating to the Concrete Construction Division.
The definition of Purchased Assets shall not include assets specifically
excluded above or set forth on Schedule 1.2 or cash and cash equivalents (the
"Excluded Assets").
1.3 Liabilities and Obligations. Buyer shall not assume and shall not
be liable or responsible for any debt, obligation or liability of or relating
to any Facility, the Business, the Purchased Assets, Seller or otherwise of
any kind, whether known or unknown, contingent, absolute, or otherwise, except
for the following (the "Assumed Liabilities"):
(a) obligations under (i) those agreements described on Schedule
1.3(a) and (ii) such other contracts and agreements of the Business as
were entered into in the ordinary course of business and are not
material to the Business, in each case, to the extent obligations
thereunder are required to be performed after the Effective Time, were
incurred in the ordinary course of business and do not relate to any
failure to perform, improper performance or other breach by Seller prior
to the Closing Date;
(b) the liabilities of the Business identified or reflected on
the Balance Sheet dated September 30, 1994 attached as Schedule 1.3(b)
(the "Balance Sheet"), but only to the extent reflected on the Balance
Sheet including any fluctuations in the ordinary course of business
since September 30, 1994;
(c) Buyer's substitution of an indemnity, bonds or collateral to
satisfy Seller's bonding requirements or release Seller's collateral
related to the bonds specified on Schedule 1.3(c), which are those under
the agreements referenced in Schedule 1.3(a) which relate to performance
of services in the ordinary course of business, the consideration for
which services will be collectible by Buyer;
(d) the defense and obligations and liabilities of Seller to the
extent related to the litigation and arbitration proceedings described
in Schedule 1.3(d) but excluding any costs or expenses of defense
attributable to the period prior to the Effective Time (the "Assumed
Litigation"); and
(e) the workmen's compensation liabilities assumed by Buyer
pursuant to Article VII;
provided; however, that Buyer does not assume any liability or obligation to
the extent such liability or obligation is paid or provided for pursuant to
the intercompany allocations described on Schedule 2.4. Seller agrees to
timely discharge and perform all of its liabilities and obligations related to
the Business, the Purchased Assets or the Facilities other than the Assumed
Liabilities payable after Closing as they become due.
1.4 Nonassignable Contracts.
(a) To the extent that the assignment by Seller of any sales
order, purchase order, lease or other contract included in the Assumed
Liabilities or Purchased Assets is not permitted without (i) the consent
of the other party to the contract, (ii) the approval of Buyer as a
source of the products or services called for by such contract or (iii)
the approval of Buyer as a lessee, then this Agreement shall not be
deemed to constitute an assignment or an attempted assignment of the
same, if such assignment or attempted assignment would constitute a
breach thereof. However, unless otherwise agreed as to any particular
contract or order (or class thereof), Seller shall use its reasonable
commercial efforts (which shall not include payment of any additional
consideration to any party) to obtain any and all such consents,
approvals and novations.
(b) If any necessary consent, approval or novation is not
obtained, Seller shall cooperate with Buyer in any reasonable
arrangement designed to provide Buyer with all of the benefits under
such contract, lease or order as if such consent, approval or novation
had been obtained, including subleases from Seller and, undertakings by
Buyer of the work necessary to complete contracts as the agent of Seller
with the understanding that Seller shall then invoice the customer for
services rendered and promptly remit the amount of the receivable to
Buyer. Nothing herein shall excuse Seller from responsibility for any
of its representations and warranties or covenants hereunder.
ARTICLE II
CONSIDERATION FOR TRANSFER
2.1 Consideration. The aggregate consideration for the Purchased
Assets shall be as follows:
(a) Fourteen Million Five Hundred Thousand Dollars ($14,500,000)
plus or minus the Adjustment Amount; and
(b) Buyer's assumption of the Assumed Liabilities.
2.2 Adjustment to Consideration. In the event that, within one
hundred eighty (180) days after the Closing, directly or indirectly, either
(i) Buyer sells substantially all of the Purchased Assets or (ii)
substantially all of the equity interests in Buyer are sold (a "Sale
Transaction"), then Seller will be entitled to additional consideration in an
amount equal to one-half of the excess of (A) the aggregate consideration
received by Buyer or the stockholders or other controlling persons (direct or
indirect) of Buyer from the Sale Transaction (net of any liabilities of the
Business retained by Buyer) over (B) the aggregate consideration delivered for
the Purchased Assets in the transaction contemplated by this Agreement plus
the net amount of all funds advanced (including through the provision of
letters of credit) and funds or other assets contributed to Buyer (less funds
or other assets distributed by Buyer) prior to the Sale Transaction. For
purposes of this paragraph, aggregate consideration shall include only (i)
securities or other property, (ii) cash and cash equivalents and (iii) assumed
liabilities to the extent reflected in applicable financial statements (the
balance sheet liabilities of the Buyer shall be considered assumed liabilities
if the equity of Buyer is sold in a Sale Transaction). Any securities or
other property shall be valued as reflected on the financial statements of
Buyer or its parent.
2.3 Real Estate Sales and Transfer Taxes. At Closing, Seller or
Buyer, as applicable (determined according to state practice on a state by
state basis) shall pay or provide for the real estate transfer taxes and sales
taxes payable as a result of the transfer of the Real Estate and Purchased
Assets provided for herein.
2.4 Cash and Cash Equivalents. Seller shall credit Buyer, or Buyer
shall credit Seller, with an amount (the "Adjustment Amount") equal to the
change in the cash attributable to the Business calculated as provided in this
Section 2.4 on the basis of the information contained in Schedule 2.4. To
calculate the Adjustment Amount, the net income (net loss) generated from
October 1, 1994 to the Closing Date will be adjusted by the cash flow impact
of the September 30, 1994 to Closing Date change in all balance sheet accounts
other than cash and equity (including the corporate intercompany account),
i.e., by adding decreases in asset and increases in liability accounts (cash
provision) and subtracting increases in asset and decreases in liability
accounts (cash usage). To reconcile, the cash of September 30, 1994
($1,501,000) would be subtracted from the caption "Cash and Cash Equivalents"
from the balance sheet of the Closing Date and the resulting figure would be
increased by a decrease in the corporate intercompany account from September
30 to Closing (or decreased by an increase in the intercompany account).
Corporate charges to the division, which impact net income and/or the
intercompany account, shall only be allowed for those charges customary and
consistent with current practice. For purposes of Closing, the Seller shall
estimate the Adjustment Amount in good faith (the "Estimated Adjustment
Amount").
2.5 Determination. Within fifteen (15) days after the Closing Date,
Buyer shall cause the employees of Buyer to deliver to Buyer and Seller a
statement (the "Settlement Statement") setting forth in detail a determination
of the Adjustment Amount as of the Closing Date. In connection therewith,
from and after Closing, each party shall provide the other party and its
representatives with full access to all assets, records and work papers
necessary to compute and verify the Adjustment Amount. This Settlement
Statement as delivered to Buyer and Seller shall be final for purposes of
determining the Adjustment Amount unless, within sixty (60) days after
delivery to Buyer and Seller, Buyer or Seller shall deliver a Dispute Notice.
After delivery of a Dispute Notice, Seller and Buyer shall have fifteen (15)
days to review the Dispute Notice, and Buyer and Seller shall promptly
thereafter negotiate in good faith with respect to the subject of the Dispute
Notice, and if they are unable to reach an agreement within fifteen (15)
business days after receipt of a Dispute Notice, the dispute shall be
submitted to the Independent Auditor. The Independent Auditor shall be
directed to issue a final and binding decision within thirty (30) days of
submission of the Dispute Notice, as to the issues of disagreement referred to
in the Dispute Notice and not resolved by the parties. Within five (5) days
after final determination of the Settlement Statement, (i) Seller shall pay
Buyer the amount by which the Adjustment Amount is greater than the Estimated
Adjustment Amount or (ii) Buyer shall pay Seller the amount by which the
Adjustment Amount is less than the Estimated Adjustment Amount. The
Settlement Statement shall be prepared in accordance with generally accepted
accounting principles as historically applied by Seller on a basis consistent
with past practice. In connection with the Settlement Statement, a "Dispute
Notice" shall mean a written notice from Buyer or Seller, as the case may be,
indicating disagreement with the initial statement. The "Independent Auditor"
shall mean one of the "Big Six" public accounting firms with no material
relationship to either of the parties chosen by agreement of the parties, or
if they are unable to agree, shall mean one of the "Big Six" firms with no
such material relationship chosen by lot. The fees and expenses of the
Independent Auditor retained as a result of any dispute related to any
statement shall be equitably allocated by the Independent Auditor. The
decision of the Independent Auditor with respect to the Settlement Statement
shall be final and binding on the parties.
2.6 Allocation of Purchase Price. As soon as practicable after the
Closing Date Buyer and Seller shall agree on the allocation of the Purchase
Price to the Assets and shall, promptly after the Closing, jointly execute an
Allocation of Purchase Price Certificate in form reasonably acceptable to both
parties. Buyer and Seller agree (i) to jointly complete and timely file Form
8594, and any other required reports in accordance with Section 1060 of the
Internal Revenue Code of 1986, as amended, and the regulations promulgated
thereunder, with their respective federal income tax returns for the tax year
in which the Closing Date occurs (and any amended Form 8594, if necessary) and
(ii) that no party will take a position on any report, return, or other
documents filed with any governmental authority in any judicial or
administrative proceeding, that is in any manner inconsistent with the
allocation of the Purchase Price set forth on the Allocation of Purchase Price
Certificate.
ARTICLE III
THE CLOSING AND TRANSFER OF ASSETS
3.1 Closing. The transfer of assets contemplated by this Agreement
(the "Closing") shall occur at the offices of McDermott, Will & Emery, 227
West Monroe Street, Chicago, Illinois at 10:00 A.M. on March 3, 1995 or at
such other time or place as may be mutually agreed upon by the parties (the
"Closing Date"). The "Effective Time" shall mean 12:01 a.m. on October 1,
1994.
3.2 Deliveries by Buyer. At the Closing, Buyer shall deliver the
following:
(a) $11,500,000 plus or minus the Estimated Adjustment Amount
set forth in Section 2.4 payable by wire transfer of immediately
available funds;
(b) a $3,000,000 promissory note (the "Note") in substantially
the form of Exhibit A with payment guaranteed by Pettibone Corporation;
(c) an Officer's Certificate as to the accuracy at Closing of
all of Buyer's representations and warranties as if made at and as of
Closing, the fulfillment of all of Buyer's agreements and covenants and
the satisfaction of all Closing conditions to be performed by Buyer; and
(d) such other instruments or documents as may be necessary or
appropriate to carry out the transactions contemplated hereby.
3.3 Deliveries by Seller. At the Closing, Seller shall deliver the
following:
(a) a bill of sale in the form attached hereto as Exhibit B;
(b) general warranty deeds to each parcel of Real Estate owned
by Seller as required by applicable law to transfer fee simple title to
Buyer or its nominee;
(c) the Consents referred to in Section 8.3;
(d) an Officer's Certificate as to the accuracy at Closing of
all of Seller's representations and warranties as if made at and as of
Closing, the fulfillment of all of Seller's agreements and covenants and
the satisfaction of all Closing conditions to be performed by Seller;
(e) the real estate title policies and surveys referred to in
Section 8.5;
(f) the Code Section 1445 certificate referred to in Section
4.25;
(g) possession of the Purchased Assets; and
(h) such other instruments or documents as may be necessary or
appropriate to carry out the transactions contemplated by this
Agreement.
3.4 Closing Agreements. At the Closing, the parties shall execute,
acknowledge and deliver:
(a) a License Agreement in form of Exhibit C;
(b) a Transition Agreement in form of Exhibit D; and
(c) such other instruments or documents as may be necessary or
appropriate to carry out the transactions contemplated by this
Agreement.
ARTICLE IV
REPRESENTATION AND WARRANTIES
OF SELLER
Seller hereby represents and warrants to Buyer, as of the date hereof,
and as of the Closing Date, as set forth below. For purposes of this
Agreement, "Material Adverse Effect" shall mean any effect which is materially
adverse to the operations (as presently conducted), assets, liabilities,
condition (financial or otherwise) or to Seller's knowledge the prospects of
the Purchased Assets, the Business or the Facilities. To the extent any
representation is given to the knowledge of Seller, such knowledge shall be
limited to the knowledge of the persons listed on Schedule 4.0.
4.1 Authority. Except for the approval of Foothill Capital
Corporation and Wells Fargo which will be obtained prior to Closing, and the
consent of Reliance which Seller will obtain after the Closing, Seller has the
full corporate right, power and authority, without the consent of any other
person, to execute and deliver this Agreement and the agreements it is hereby
contemplated to execute and to carry out the transactions contemplated hereby
and thereby, including the transfer of each of the Purchased Assets. All
corporate and other acts or proceedings required to be taken by Seller to
authorize the execution, delivery and performance of this Agreement and all
agreements and transactions contemplated hereby have been duly and properly
taken.
4.2 Validity. This Agreement has been, and the agreements and other
documents to be delivered by Seller at Closing will be, duly executed and
delivered and constitute the valid and legally binding obligations of Seller
enforceable in accordance with their respective terms.
4.3 Violations and Approvals. Except for the approval of Foothill
Capital Corporation and Wells Fargo which will be obtained prior to Closing
and the consent of Reliance which Seller will obtain after the Closing, and as
set forth on Schedule 4.3, the execution and delivery of this Agreement and
the agreements contemplated hereby and the consummation of the transactions
contemplated hereby and thereby will not (immediately, upon notice, with the
passage of time or both) result in the creation of any lien, charge or
encumbrance of any kind or the termination or acceleration of any obligation
of or relating to the Business, the Facilities or the Purchased Assets and are
not prohibited by, do not and will not violate or conflict with any provision
of, and do not and will not (immediately, upon notice, with the passage of
time or both) constitute a default under or a breach of (i) the charter or
by-laws of Seller, (ii) any note, bond, indenture, contract, agreement,
permit, license or other instrument to which Seller is a party or, by which
Seller, the Business, any Facility or the Purchased Assets are bound, (iii)
any order, writ, injunction, decree or judgment of any court or governmental
agency applicable to Seller or the Business, or (iv) any law, rule or
regulation applicable to Seller, any Facility, the Business or the Purchased
Assets, except in the case of the foregoing clause (ii), such as will have no
Material Adverse Effect. Except as set forth on Schedule 4.3, and consents to
assignment and other consents that are obtained in connection with the
Closing, no approval, authorization, registration, consent, order or other
action of or filing with any person, including any court, administrative
agency or other governmental authority of any country, is required for the
execution and delivery by Seller of this Agreement or the agreements
contemplated hereby or the consummation of the transactions contemplated
hereby and thereby.
4.4 Due Organization. Seller is a corporation duly organized and
validly existing under the laws of Delaware. Seller has full power and
authority and all requisite rights, licenses, permits and franchises to own
and operate each Facility and to own, lease and operate the Purchased Assets
and to carry on the Business, except such rights, licenses, permits and
franchises which the failure to have would cause no Material Adverse Effect.
4.5 Transactions with Affiliates. Except as set forth in Schedule
4.5, no Affiliate:
(a) owns, directly or indirectly, any material interest in any
entity which is a competitor, lessor, lessee, or material supplier of
any Facility or the Business;
(b) has any cause of action or other claim against or owes any
material amount to, or is owed any material amount by, Seller with
respect to any Facility, the Business or the Purchased Assets; or
(c) has any interest in or owns any assets, property or rights
used in the conduct of the Business or the operation of any Facility.
The term "Affiliate" shall mean any corporation, partnership, trust or other
entity (i) in which Seller has, directly or indirectly, a five percent (5%) or
greater interest or (ii) which controls, is controlled by, or is under common
control with Seller or any of the entities described in the preceding clause
(i); provided, however, that Pettibone Corporation, Buyer and other entities
(with the exception of Seller) in which Pettibone Corporation owns an interest
shall not be deemed Affiliates.
4.6 Financial Statements and Taxes. The financial statements of the
Business for the year ended December 31, 1993 and the nine months ended
September 30, 1994 attached hereto as Schedule 4.6(a) (the "Financial
Statements") are (a) in accordance with the books of account and records of
Seller, (b) fair presentations of the financial condition and the results of
operations as of the dates and for the periods indicated and (c) prepared in
accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods covered thereby (except as specified
therein and except for the lack of footnotes, and in the case of interim
Financial Statements subject to year-end audit adjustments consisting only of
normally recurring accruals which in the aggregate are not material). The
Business is not subject to any liability or obligation (whether absolute,
accrued, contingent or otherwise) which is not shown or provided for on the
Financial Statements or on Schedule 4.6(a) except which has been incurred in
the ordinary course of business since the date of such financial statements or
which are not Assumed Liabilities. Except as set forth on Schedule 4.6(b) all
federal, foreign, state, county and other tax returns, reports and
declarations of every nature (including income, employment, excise, property,
sales and use taxes) required to be filed by or on behalf of Seller (as it
relates to the Business) and the Business have been filed and such returns are
complete and accurate in all material respects and disclose all taxes required
to be paid for the periods covered thereby. All taxes shown on such returns
as being owed by the Seller (as related to the Business) and the Business and
any deficiency assessments, penalties and interest have been paid or set aside
for payment. The accruals for taxes on the Balance Sheet are sufficient for
the payment of all unpaid federal, state and other taxes of the Business. All
tax payments related to employees, including income tax withholding, FICA,
FUTA, unemployment and worker's compensation, required to be made by Seller
(relating to the Business) and the Business have been fully and properly paid,
withheld, accrued or recorded.
4.7 Interim Change. Except as set forth in Schedule 4.7, since
September 30, 1994, Seller has operated the Business in the ordinary course,
consistent with past operations, and there has not been any of the following
in connection with the Business:
(a) any event resulting in, or that is reasonably likely to
result in, a Material Adverse Effect;
(b) any material change in significant personnel or
relationships with third parties, including suppliers, customers and
others;
(c) any increase in the compensation, or benefits payable or to
become payable to or on account of employees (other than regularly
scheduled increases in accordance with agreements or the past practices
of the Business);
(d) any work stoppage or labor dispute;
(e) any damage to or destruction of a material asset, or any
disposition of assets or transfers of assets from any Facility, other
than sales of finished goods and use and disposal of assets in the
ordinary course of business on terms consistent with past practice;
(f) any change in collection, credit or accounting practices,
including any write-up or write-down in the value of the Inventory; or
(g) any agreement to take any of the foregoing actions.
4.8 Work in Process. Subject to adjustments reflected in the Jobs in
Progress Report attached as Schedule 4.17 hereto (including any fluctuations
in the ordinary course of business since the date thereof), all work performed
on projects in process as of the date thereof and as of the Closing has been
performed in accordance with customer specifications and all applicable
industry standards, laws, rules and regulations in all material respects.
4.9 Purchased Assets. Except for the consents of Foothill Capital
Corporation and Wells Fargo which will be obtained prior to Closing and the
consent of Reliance which Seller will obtain after the Closing and statutory
liens not yet delinquent which relate to the Assumed Liabilities, Seller is
the sole and exclusive legal and equitable owner of all right, title and
interest in and has good and marketable title to all of the Purchased Assets
(purported to be owned by Seller) free and clear of the interests and rights
of any other party. Except for consents of the persons listed on Schedule 4.9
which will be obtained prior to Closing, all of the Purchased Assets may be
transferred to Buyer without the consent or approval of any person. Except as
set forth on Schedule 4.9, none of the Purchased Assets are subject to any
lease (except for Purchased Assets not purported to be owned by Seller),
license, security interest, mortgage, pledge, lien, charge, encumbrance,
claim, covenant or restriction of any kind or character. Schedule 4.9 sets
forth an accurate, correct and complete list and summary description of all
the depreciable Purchased Assets. Except for the interests of lessors in
property leased pursuant to leases described in Schedule 1.3(a), no person
other than Seller has any interest in any Facility or any assets at any
Facility. The Purchased Assets are in good repair, order and condition
(reasonable wear and tear excepted), are suitable for the purposes for which
they are presently being used, and are adequate to meet all present and
reasonably anticipated requirements of the Business and each Facility. The
Purchased Assets will furnish Buyer with all of the capacity and rights to
operate the Business and each Facility in the same manner as presently
operated by Seller, except for Licenses and Permits that are not transferable.
4.10 Environmental Matters.
(a) Except as set forth on Schedule 4.10, Seller has previously
and is currently complying in all material respects with its obligations
under all Environmental Laws in connection with the operation of the
Business, its occupancy of the Facilities and otherwise. Seller has not
received any notice alleging any non-compliance with or potential
liability pursuant to any Environmental Laws or with respect to any
Materials of Environmental Concern.
(b) Except as set forth on Schedule 4.10, no Materials of
Environmental Concern have ever been generated, treated, stored, or
disposed of at any Facility. Except as identified in Schedule 4.10, no
underground storage tanks, as defined in RCRA or under applicable state
law, are present at any Facility or are operated by Seller at any
Facility, and, to Seller's knowledge after due inquiry, no such tanks
were previously abandoned or removed. There are no Materials of
Environmental Concern or other condition or use of any Facility, whether
natural or man-made, which poses a significant threat of damage to the
health of persons, to property, to natural resources, or to the
environment.
(c) Except as set forth on Schedule 4.10, with respect to the
Business, any Facility or the Purchased Assets, Seller has no liability
or unfulfilled obligation, whether fixed, unliquidated, absolute,
contingent or otherwise, under any Environmental Laws, including any
liability, responsibility or obligation for fines or penalties, or for
investigation, expense, removal, or remedial action to effect compliance
with or discharge any duty, obligation or claim under any such laws or
regulations, and Seller has no knowledge that any such claims, actions,
suits, proceedings or investigations under such laws or regulations
exist or may be brought or threatened. There has not been, and is not
occurring at any Facility, or any location to which Seller ever sent any
materials in respect of the Business, the Division or its current or
former operations, any release or threatened release, as those terms are
defined in CERCLA, of any Materials of Environmental Concern, nor has
Seller any knowledge that such a release is occurring or has occurred at
any time in the past. Except as identified in Schedule 4.10, Seller has
never applied or disposed, transported or arranged for the
transportation or disposal of any Materials of Environmental Concern, in
any manner which may form the basis for any present or future claim,
demand or action seeking investigation, expense, removal, remedial
action or expense at any facility, site, location or body of water,
surface or subsurface. Except as identified in Schedule 4.10, Seller
has never sent, arranged for disposal or treatment, arranged with a
transporter for transport for disposal or treatment, transported, or
accepted for transport any Materials of Environmental Concern, to a
facility, site or location, which, pursuant to CERCLA or any similar
state or local law, (i) has been placed or has been publicly proposed by
authorities having jurisdiction to be placed, on the National Priorities
List or its state equivalent, or (ii) which is subject to a claim,
administrative order or other request to take removal or remedial action
by any person having jurisdiction and authority in the matter.
(d) Schedule 4.10 identifies all environmental audits or
assessments or occupational health studies undertaken by or on behalf of
Seller or governmental agencies with respect to any Facility or the
Business, in the past three years.
(e) For purposes of this Agreement, the following terms shall
have the meanings set forth below:
(i) "Environmental Laws" (A) means all federal, state and
local laws, statutes, decisions, rules, ordinances, regulations,
moratoria, orders and requirements ("Laws") relating to (i)
pollution or the protection of the environment (including air,
surface water, ground water, soil, land surface or subsurface
strata), or (ii) disposal, emissions, discharges, spills, releases
or threatened releases of Materials of Environmental Concern, or
otherwise relating to the manufacture, processing, distribution,
use, import, export, treatment, storage, disposal, transport or
handling of Materials of Environmental Concern, and (B) shall
include the Resource Conservation and Recovery Act, as amended
("RCRA"); the Comprehensive Environmental Response Compensation
and Liability Act, as amended ("CERCLA"); the Federal Water
Pollution Control Act, as amended; the Occupational Safety and
Health Act, as amended; the Clean Air Act, as amended; the Safe
Drinking Water Act, as amended; the Toxic Substances Control Act,
as amended; the Emergency Planning and Community Right-to-Know
Act; the Hazardous Materials Transportation Act, as amended; all
Laws related thereto, all implementing Laws and all similar state
and local Laws with respect to each of the foregoing acts.
(ii) "Materials of Environmental Concern" means any and all
hazardous chemicals and materials, and any and all hazardous
substances as defined in CERCLA, hazardous wastes as defined in
RCRA, petroleum and petroleum products, radioactive materials, and
any and all other hazardous chemicals, materials, constituents,
pollutants or contaminants regulated under any Environmental Laws.
4.11 Real Estate.
(a) Schedule 4.11 sets forth the complete description of each
parcel of Real Estate, including a street address, legal description
(for owned Real Estate), an indication of whether the parcel is owned or
leased, descriptive summary and a list of all contracts, agreements and
understandings, oral or written, by which the Real Estate is bound or
affected. Seller has delivered to Buyer complete copies of all such
written contracts and agreements. Except as set forth on Schedule 4.11,
all contracts and agreements affecting the Real Estate are legally valid
and binding and in full force and effect. There are no defaults,
offsets, counterclaims or defenses thereunder by or against Seller and
no material defaults, offsets, counterclaims or defenses by or against
any other party. Seller has good, marketable and insurable title in fee
simple absolute to, and is in possession of, all Real Estate (except
those parcels identified as leased property in Schedule 4.11) free and
clear of all security interests, including any conditional sale or other
title retention agreements, liens (except for liens for current ad
valorem taxes not yet delinquent), encumbrances, mortgages or deeds of
trust, pledges, assessments, easements, covenants, restrictions,
reservations, defects in title, encroachments and other burdens, whether
or not the same render the title to the Real Estate uninsurable or
unmarketable, other than any of the foregoing which (i) could not
reasonably be expected to and do not interfere with the use or affect
the value of such Real Estate, or (ii) are listed on Schedule 4.11 and
will be released at or prior to Closing.
(b) Seller has all easements and rights, including easements for
all utilities, services, roadways and other means of ingress and egress,
to the extent necessary to conduct the Business and operate each
Facility as presently operated and conducted. No Real Estate is located
within a flood hazard area. No portion of any Real Estate has been
condemned, requisitioned or otherwise taken by any public authority, no
notice of any such condemnation, requisition or taking has been
received, and, to the knowledge of Seller, no such action is threatened.
Seller has no knowledge of any public improvements planned or commenced
which may result in special assessments against or otherwise affect the
Real Estate. To the knowledge of Seller, except for the easement
described on Schedule 4.11 to be granted prior to Closing, no fact or
condition exists which would result in the termination or impairment of
access to the Real Estate or discontinuation of necessary sewer, water,
electric, gas, telephone or other utilities and services.
(c) The zoning of each parcel of Real Estate permits the
existing improvements and the continuation of business as presently
conducted thereon. Seller has not received any notice of, and has no
knowledge of, any violation of any zoning, building, health, safety,
fire, water use, or similar statute, ordinance, law, regulation or code
in connection with the Real Estate. To the knowledge of Seller, there
are no threatened or pending changes in any of the foregoing that would
have a Material Adverse Effect or otherwise materially affect the
continued occupancy of the Real Estate or the conduct of the Business.
No notice from any governmental authority exercising jurisdiction over
the Real Estate requiring or calling attention to the necessity of any
work, repairs, new construction, installation or alteration in
connection with any parcel of Real Estate has been served upon Seller
and is pending or unresolved. The Real Estate as conveyed pursuant to
this Agreement (and as described on Schedule 4.11) shall include all
rights to any offsite facilities necessary to ensure compliance in all
material respects with all zoning, building, health, fire, water, use or
similar statutes, codes, ordinances, laws, rules or regulations.
(d) No Real Estate is leased or subleased by Seller to any third
party.
(e) Seller has delivered to Buyer accurate and complete copies
of all existing title insurance policies, title reports, surveys,
property reports and similar reports, if any, with respect to each
parcel of Real Estate owned by Seller.
(f) There is no construction work being done at, or construction
materials being supplied to, any parcel of Real Estate, except in
connection with routine maintenance projects and materials used in the
Business in the ordinary course.
4.12 Software and Information Systems. Schedule 4.12 sets forth an
accurate and complete list and summary description of all the Software.
Schedule 4.12 identifies or describes (i) Software which is owned by Seller
and any licenses thereof; and (ii) Software which is licensed to Seller by
third parties. With respect to the Software:
(a) all Software documentation is current (to the extent any
third party owner supplies updated documentation to licensees), accurate
and sufficient in detail and content to identify and explain the nature
thereof, and to allow its full and proper use by Buyer without reliance
on the special knowledge or memory of others other than employees who
will be offered employment pursuant to Section 7.1; and
(b) Seller owns all right, title and interest in the Software
that is not designated as licensed free and clear of any liens,
encumbrances, restrictions, or legal or equitable claims of others,
(other than nonexclusive licenses granted to third parties) and has the
full legal right to transfer the Software without the consent of any
person.
4.13 Customers and Suppliers. Schedule 4.13 sets forth an accurate and
complete list of those suppliers that have provided raw materials, products or
services for the Business or any Facility at a cost to the Seller of greater
than $25,000 during the period since January 1, 1994. Seller has no knowledge
of any fact, condition or event (i) which would cause Buyer's relationship
with any supplier to be materially and adversely different than the current
relationship of such supplier with respect to the Business or any Facility, or
(ii) which would materially and adversely affect any supplier's ability to
supply raw materials, products or services to Buyer. Schedule 4.13 sets forth
an accurate and complete list of those customers that have purchased products
or services from the Business or any Facility at a cost to the purchaser of
greater than $25,000 during the period since January 1, 1994. Seller has no
knowledge of any fact, condition or event (i) which would cause Buyer's
relationship with any customer to be materially and adversely different than
the current relationship of such customer with respect to the Business or any
Facility, or (ii) which would materially and adversely effect any customer's
ability to purchase products or services from Buyer.
4.14 Employees. Schedule 4.14 is an accurate and complete schedule
containing, with respect to the Business and each Facility:
(a) a list of all employees (including name, title and
position);
(b) the employee's length of service;
(c) a list of all agreements, arrangements or understandings,
written or oral, regarding services to be rendered, terms and conditions
of employment, confidentiality and assignment of inventions (with
respect to such items listed on Schedule 4.14, accurate and complete
copies have been delivered to Buyer);
(d) the compensation (including terms of payment, bonuses,
commissions and deferred compensation, as well as any benefits) of each
employee; and
(e) copies of all OSHA reports and responses given or received
by Seller since January 1, 1993.
Except in the case of each of (i) through (xii) below, as set forth in
Schedule 4.14, with respect to the Business and each Facility, (i) there have
not been any labor disputes, any work stoppages, pickets or work slow-downs
due to labor disagreements in the past five years, (ii) there are and have
been no unresolved violations of any local, state, or federal laws respecting
the employment of any employees, including the National Labor Relations Act,
the Fair Labor Standards Act, the Americans with Disabilities Act, wage-
payment laws, laws prohibiting employment discrimination, and laws addressing
workplace safety and health; (iii) there is no unfair labor practice, charge
or complaint pending, unresolved or, to the knowledge of Seller, threatened
before the National Labor Relations Board; (iv) there is no labor strike,
dispute, grievance, request for representation, slowdown or stoppage actually
pending or, to the knowledge of Seller, threatened; (v) there has been no
question concerning representation raised or, to the knowledge of Seller,
threatened respecting employees in the past five years; (vi) Seller is in
substantial compliance with all contracts of or respecting employment,
including all collective bargaining agreements identified in Schedule 4.14;
(vii) there is no employment handbook, personnel policy manual, or similar
document that creates prospective employment rights or obligations; (viii) the
transactions contemplated by this Agreement will not violate any of the terms
of any applicable collective bargaining agreement; (ix) Seller has discharged
all collective bargaining obligations respecting the transactions contemplated
by this Agreement imposed by law or by any valid existing collective
bargaining agreement, including any obligations to provide notice to any union
or to bargain over the effects of the transactions contemplated by this
Agreement; (x) Seller has provided or will timely provide prior to Closing all
notices required by law to be given prior to Closing of the transactions
contemplated by this Agreement to all local, state, or federal labor, wage-
payment, equal employment opportunity, unemployment-insurance and related
agencies; (xi) Seller has paid or properly accrued in the ordinary course of
business all wages and compensation due to employees, including all vacations
or vacation pay, holidays or holiday pay, sick days or sick pay, and bonuses;
and (xii) the transactions contemplated by this Agreement will not create
liability under any local, state, or federal law respecting reductions in
force or the impact on employees on plant closing or sales of businesses, in
each such case assuming compliance by Buyer with its obligations under Section
7.1. The reserves on the Financial Statements (in the aggregate) for the OSHA
cases and citations and employment discrimination claims reflected on the
Schedules hereto are adequate to meet the aggregate liabilities for such
items.
4.15 Employee Benefit Plans. Except as set forth on Schedule 4.15, all
contributions to, and payments from, the Benefit Plans (as defined below) that
may have been required to be made in accordance with the Benefit Plans and,
when applicable, Section 302 of Employee Retirement Income Security Act, as
amended ("ERISA") or Section 412 of the Code, have been timely made. With
respect to each Benefit Plan which is subject to Title I, Subtitle B, Part 3
of ERISA (concerning "Funding"), the funding method used in connection with
such Benefit Plan is acceptable under ERISA, the actuarial assumptions used in
connection with funding such Benefit Plan, in the aggregate, are reasonable.
All Benefit Plans have been operated in accordance with applicable law and the
terms thereof. Seller is not (and will not be at Closing) delinquent in
making any payment to any multi-employer pension plan.
4.16 Licenses and Permits. Schedule 4.16 contains an accurate and
complete list and summary description of each License and Permit. The
Licenses and Permits are valid and in full force and effect, no violations of
Seller in respect of the Business exist in respect thereof and there are not
pending, or to the knowledge of Seller, threatened any proceedings or
circumstances which could result in the termination, revocation, limitation or
impairment of any License or Permit in respect of the Business. The Licenses
and Permits held by Seller are all of such items that are necessary to own and
operate each Facility, own the Purchased Assets and conduct the Business as
presently owned, operated or conducted. Except as set forth as described in
Schedule 4.16, all Licenses and Permits are freely assignable to Buyer without
the consent or approval of any third party, unless provided otherwise on
Schedule 4.16. No violations of Seller or its agents have been recorded in
respect of any Licenses and Permits in the past three years, and Seller knows
of no basis therefor.
4.17 Material Contracts. Schedule 4.17 sets forth an accurate and
complete list of all contracts, instruments, commitments, agreements,
arrangements and understandings, including all amendments and supplements
thereto related to the Business, any Facility (or its operations) or the
Purchased Assets (i) which are material to the operations (as presently
conducted), assets, liabilities, condition (financial or otherwise), or
operations of the Business, the Facilities (in the aggregate) or the Purchased
Assets, or (ii) which otherwise involve any of the following types of
contracts (the items in (i) and (ii) being collectively referred to herein as
the "Material Contracts"):
(a) all raw material supply contracts and any other purchase
orders or contracts for the purchase of any materials or services
(including utilities) with an amount in excess of $25,000 or which were
not entered into in the ordinary course of business;
(b) all sales contracts, open purchase orders or similar
commitments providing for sales of products in an amount in excess of
$25,000 or which contain bonding or insurance requirements;
(c) all Real Property leases;
(d) all machinery leases, equipment leases and other personal
property leases involving payment obligations over the term of the lease
in excess of $25,000;
(e) all waste disposal, maintenance and related contracts
involving an amount in excess of $25,000;
(f) all contracts for insurance;
(g) all contracts with a duration of one year or more and not
cancelable without penalty on 30 days or less notice;
(h) all requirements contracts and contracts containing "take or
pay" provisions; and
(i) any other contract, commitment, agreement, arrangement or
understanding which provides for payment or performance by any party
thereto having an aggregate ascertainable value of $25,000 or more.
Accurate and complete copies of each Material Contract have been delivered to
Buyer, except for construction contracts and related OCP insurance policies
and construction bonds which have been made available to Buyer in Seller's
Kansas City office. Each Material Contract is in full force and effect and
assuming due authorization, execution and delivery thereof by the other
parties thereto, is valid and binding and enforceable in accordance with its
terms subject to limitations imposed by law relating to bankruptcy and
creditors rights. Seller and to the knowledge of Seller, each other party has
complied with all material commitments and obligations on its part to be
performed or observed under each Material Contract. No event has occurred
which is or, after the giving of notice or passage of time, or both, would
constitute a default under or a breach of any Material Contract by Seller, or,
to the knowledge of Seller, by any other party. The consummation of the
transactions contemplated hereby, without notice to or consent or approval of
any party except for such consents as are obtained at or prior to the Closing,
will not constitute a default under or a breach of any provision of any
Material Contract. With respect to each Material Contract which is to be
assigned to Buyer pursuant to the terms hereof, Buyer will succeed to all the
rights and benefits of Seller.
4.18 Complaints and Claims. Schedule 4.18 sets forth an accurate and
complete list and summary description of all claims, expenses, liabilities and
obligations relating to or alleged to relate to any injury to person or
property as a result of the operation of each Facility or the services
rendered by the Business or each Facility performed prior to the Closing Date,
which (i) are currently being asserted, or (ii) were asserted at any time
within the prior three years. Buyer will not be subject to any claim,
expense, liability or obligation arising from any injury to person or property
as a result of the operation of any Facility or the services rendered by the
Business or any Facility prior to the Closing Date except to the extent such
claims, expenses, liabilities and obligations are included in the Assumed
Liabilities in the amounts provided for assumption.
4.19 Intellectual Property. Schedule 4.19 sets forth an accurate and
complete list and summary description of all Intellectual Property and
contains an indication of any renewals, taxes or fees due in respect thereof
within ninety (90) days of the Closing Date. Except as set forth in Schedule
4.19, with respect to the Intellectual Property, (i) Seller is the sole and
exclusive owner and has the sole and exclusive right to use the Intellectual
Property and no other person has any interest in any Intellectual Property;
(ii) no action, suit, proceeding or investigation has been instituted and is
pending, unresolved or, to Seller's knowledge, threatened; (iii) none of the
Intellectual Property or products or methods of the Business interferes with,
infringes upon, conflicts with or otherwise violates the rights of others or,
to the knowledge of Seller, is being interfered with or infringed upon by
others, and none is subject to any outstanding order, decree or judgment; (iv)
there are no royalty, commission or similar arrangements, and no licenses,
sublicenses or agreements, pertaining to any of the Intellectual Property or
products or methods of the Business; (v) Seller has not agreed to indemnify
any person for or against any infringement of or by the Intellectual Property
or the Purchased Assets; (vi) all registrable items of Intellectual Property
currently being used are properly registered under applicable law; and (vii)
the Intellectual Property constitutes all such assets, properties and rights
which are used in or necessary for the conduct of the operations of the
Business and each Facility as currently conducted. Except as set forth on
Schedule 4.19, all rights of Seller in and to the Intellectual Property are
transferable to Buyer as contemplated herein without any consent or other
approval. Buyer has been provided with accurate and complete copies or
written descriptions of all studies, opinions and searches of which Seller has
knowledge relating to any Intellectual Property or any infringement of or by
any Intellectual Property, all of which are listed on Schedule 4.19.
4.20 Technical Information. Schedule 4.20 sets forth an accurate and
complete list and summary description of all proprietary Technical
Information. All Technical Information:
(a) is owned solely and exclusively by Seller or available for
use by Buyer without payment to any person; and
(b) is documented in a manner comparable to that of similarly
situated businesses and in condition for conveyance to and readily
useable by Buyer.
All Technical Information and any copies thereof shall be delivered to Buyer
at Closing. There is no violation of any trade secret rights, copyrights or
other proprietary rights by, or with respect to, the Technical Information.
Buyer has been provided with accurate and complete copies or written
descriptions of all studies, opinions and searches of which Seller has
knowledge relating to any Technical Information or any infringement of or by
any Technical Information, all of which are listed on Schedule 4.20.
4.21 Legal Proceedings. Except as set forth on Schedule 4.21 and for
the Assumed Litigation, Seller is not engaged in or a party to or, to the
knowledge of Seller, threatened with any dispute, action, suit or other
proceeding relating to any Facility, the Business or any of the Purchased
Assets. To the knowledge of Seller, no basis exists for any such proceeding
which could have a Material Adverse Effect. Seller has no knowledge of any
investigation threatened or contemplated by any governmental or regulatory
authority. Neither Seller, the Facility, the Business nor any of the
Purchased Assets is the named subject of or directly subject to any judicial
or administrative adjudicatory judgment, order, writ, injunction, stipulation
or decree of any court or any governmental agency or any arbitrator.
4.22 Compliance with Law. The Business, each Facility and the
Purchased Assets conform to all applicable statutes, codes, laws, ordinances,
rules and regulations and Seller has complied with all statutes, codes, laws,
ordinances, rules and regulations applicable thereto in all material respects.
Seller has no knowledge of any proposed or pending change in any such
statutes, codes, laws, ordinances, rules and regulations which would have a
Material Adverse Effect. Neither Seller, nor, to the knowledge of Seller, any
employee or representative thereof has made any unlawful gratuities or other
payments (or taken similar actions) for the purpose of benefiting Seller with
respect to the Business.
4.23 Insurance. Schedule 4.23 sets forth an accurate and complete list
and summary description (including the name of the insurer, coverage, premium
and expiration date) of all binders, policies of insurance, insurance programs
or fidelity bonds ("Insurance") maintained with respect to each Facility, the
Business or the Purchased Assets. Schedule 4.23 sets forth the claims
experience since January 1, 1990 with respect to the Insurance. Except as
disclosed on Schedule 4.23, no pending notice of cancellation or nonrenewal
with respect to, or material increase of premium for, any Insurance has been
received by Seller. Except as set forth on Schedule 4.23, Seller has no
knowledge of any facts or the occurrence of any event which might materially
increase the premiums payable under any Insurance.
4.24 Brokers. Seller has not retained any broker, finder or agent or
incurred any liability or obligation for any brokerage fees, commissions or
finders fees with respect to this Agreement or the transactions contemplated
hereby except for Furman & Selz Inc., the fees of which will be paid by
Seller.
4.25 Internal Revenue Code Section 1445. Seller is not a "foreign
person" within the meaning of Code Section 1445 (26 U.S.C. Section 1445).
Seller shall furnish Buyer on or before the Closing Date with a certificate of
nonforeign status signed by the appropriate party and sufficient in form and
substance to relieve Buyer of all withholding obligations under Code Section
1445. If Seller cannot furnish such a certificate or Buyer is not entitled to
rely upon such certificate under the provisions of Code Section 1445 and the
regulations thereunder, Seller shall take and/or permit Buyer to take any and
all steps necessary to allow Buyer to satisfy the requirements of Code Section
1445, all at Seller's expense.
4.26 Disclosure. The representations and warranties of Seller
contained in this Agreement and each agreement, attachment, schedule,
certificate or other written statement delivered pursuant to this Agreement or
in connection with the transactions contemplated herein and therein are
accurate and complete in all material respects, and do not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements and information contained herein or therein not
misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF BUYER
Buyer hereby represents and warrants to Seller as of the date hereof,
and as of the Closing Date, as set forth below.
5.1 Authority. Buyer has full corporate right, power and authority,
without the consent of any other person, to execute and deliver this Agreement
and the agreements contemplated hereby and to consummate the transactions
contemplated hereby and thereby. All corporate and other acts or proceedings
required to be taken by Buyer to authorize the execution and delivery of this
Agreement and the agreements contemplated hereby and all transactions
contemplated hereby and thereby have been duly and properly taken.
5.2 Validity. This Agreement has been, and the agreements and other
documents to be delivered at Closing will be, duly executed and delivered by
Buyer and will constitute lawful, valid and legally binding obligations of
Buyer, enforceable in accordance with their respective terms.
5.3 Violations and Approvals. The execution and delivery of this
Agreement and the agreements contemplated hereby and the consummation of the
transactions contemplated hereby and thereby will not (immediately, with
notice, the passage of time or both) result in the creation of any lien,
charge or encumbrance or the acceleration of any indebtedness or other
obligation of Buyer and are not prohibited by, do not violate or conflict with
any provision of, and do not and will not (immediately, with notice, the
passage of time or both) result in a default under or a breach of (i) the
charter or by-laws of Buyer, (ii) any contract, agreement, permit, license or
other instrument to which Buyer is a party or by which it is bound, (iii) any
order, writ, injunction, decree or judgment of any court or governmental
agency, or (iv) any law, rule or regulation applicable to Buyer, except for
such creations, terminations, violations, conflicts, breaches, defaults,
charges or encumbrances which, in the aggregate will not have an adverse
effect on Buyer's ability to consummate the transactions contemplated hereby.
5.4 Brokers. Buyer has not retained any broker or finder or incurred
any liability or obligation for any brokerage fees, commissions or finders
fees with respect to this Agreement or the transactions contemplated hereby.
5.5 Financial Condition. Immediately prior to Closing, Buyer will
have no liabilities other than expenses of incorporation and expenses related
to this transaction.
ARTICLE VI
ADDITIONAL COVENANTS AND AGREEMENTS OF
SELLER AND BUYER
Seller hereby agrees to keep, perform and fully discharge the following
covenants and agreements.
6.1 Interim Conduct of Business. From the date hereof until the
Closing, Seller shall preserve and maintain the Business, each Facility and
the Purchased Assets, and shall operate the Business and each Facility
consistent with past practice and in the ordinary course of business, except
as specifically provided herein. Without limiting the generality of the
foregoing, except as otherwise required hereby or agreed to in writing by
Buyer from the date hereof until the Closing, Seller shall, with respect to
the Business, each Facility and the Purchased Assets:
(a) maintain each Facility and the Purchased Assets in good
repair, order and condition, reasonable wear and tear excepted;
(b) comply with its obligations under all the Material
Contracts;
(c) except as otherwise provided herein, use reasonable efforts
to keep available the services of the present employees and agents of
the Business (and pay benefits related thereto in the ordinary course of
business and consistent with applicable law and past practice) and
preserve the goodwill of customers, suppliers and others having business
relationships with the Business;
(d) maintain its books, accounts and records in the usual,
regular and ordinary manner on a basis consistent with past practice and
not revalue any assets;
(e) not enter into, amend or terminate or agree to enter into,
amend or terminate any Benefit Plan or any employment, bonus, severance
or retirement contract or arrangement, nor increase or agree to increase
any salary or other form of compensation or benefits payable or to
become payable to any employee, except in the ordinary course of
business consistent with past practice;
(f) not enter into, amend or terminate, or agree to enter into,
amend or terminate, any Material Contract other than entering into
purchase orders and service contracts all in the ordinary course of
business and at prices, in quantities and on terms consistent with past
practice;
(g) not sell, lease or otherwise dispose of or agree to sell,
lease or otherwise dispose of, any assets, properties, rights or claims
other than use and disposal of assets in the ordinary course consistent
with past practices;
(h) not incur or become subject to, nor agree to incur or become
subject to, any debt, obligation or liability, contingent or otherwise,
that in any way would adversely affect Buyer's ownership of the
Business, any Facility or the Purchased Assets, except current
liabilities in the ordinary course of business and consistent with past
practice;
(i) not take or omit to take any action which could have a
Material Adverse Effect or cause any representation or warranty herein
to become false in any material respect; and
(j) not (and shall instruct its officers, representatives,
agents and advisors not to) solicit, encourage or negotiate any proposal
from or with, or supply information to, persons other than Buyer or its
representatives with respect to, or in connection with, the acquisition
of the Business or the Purchased Assets or any material portion thereof,
and Seller shall promptly advise Buyer of any acquisition proposal or
inquiry with respect to such a proposal that Seller receives.
From the date hereof through the Closing, Seller shall confer on a regular and
frequent basis with one or more designated representatives of Buyer to report
on the general status of on-going operations of each Facility and the
Business. Seller shall promptly notify Buyer of any event that could have a
Material Adverse Effect and shall keep Buyer fully informed of such events.
6.2 Access to Information. From the date hereof through Closing,
Seller will provide to Buyer and its business, legal and accounting
representatives and advisors reasonable access during normal business hours to
the corporate, business, financial and other records and information of Seller
to the extent reasonably relating to the Business, Facilities and the
Purchased Assets, and will make available all such information and personnel
as may reasonably be requested in connection therewith.
6.3 Further Assurances; Cooperation. From time to time, after Closing
at Buyer's request and without further consideration, Seller shall execute,
acknowledge and deliver such documents, instruments or assurances and take
such other actions as Buyer may reasonably request with respect to assigning,
conveying and transferring to Buyer any of the Purchased Assets.
6.4 Records and Documents. Following the Closing Date, Seller shall
retain and grant to Buyer and its representatives, at Buyer's request (and
subject to Buyer's reimbursement of Seller's out-of-pocket expenses), access
to and the right to make or obtain copies of those records and documents
related to the Business, any Facility or the Purchased Assets, possession of
which is retained by Seller, as may be necessary or useful in connection with
Buyer's operation of the Business and each Facility after the Closing. If
Seller elects to dispose of such records, Seller shall first give Buyer sixty
(60) days' written notice, during which period Buyer shall have the right to
obtain the records without further consideration. If reasonably necessary,
Seller shall also make reasonably available its employees to provide
information related to the Business, any Facility or the Purchased Assets on
the same basis.
6.5 Consummation. Subject to the terms and conditions provided
herein, Seller agrees to use all reasonable efforts to take, or cause to be
taken all actions and to do, or cause to be done all things necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by the Agreement in accordance with
its terms. Seller shall not take any action inconsistent with its obligations
hereunder or which would hinder or delay the consummation of the transactions
contemplated hereby.
6.6 Noncompetition and Nondisclosure.
6.6.1 Noncompetition. In order to protect the value of the
Business and the Purchased Assets, Seller and its Affiliates (collectively,
the "Seller Group") agree for three (3) years from the Closing Date, not to
engage, directly or indirectly, in any manner in the Business anywhere in the
continental United States wherein the Business is conducted at the date of
this Agreement, or (ii) attempt in any way, directly or indirectly, to obtain
for itself, or others, or to divert from Buyer and its subsidiaries and
affiliates, any rights benefits, sales or profits arising out of or in
connection with the Purchased Assets or the Business.
6.6.2 Nondisclosure. After the Closing, except as required by
law or court order, the Seller Group will not disclose, or use directly or
indirectly, to, or for the benefit of any person or entity other than Buyer,
any Technical Information or other confidential information, data or materials
related to the Business. After the Closing, except as required by law or
court order, Buyer will not disclose, or use directly or indirectly, to or for
the benefit of any person or entity other than the Buyer, any confidential
information regarding the business of Seller Group (other than the Business)
contained in the Purchased Assets.
6.6.3 Breach. The Seller Group agrees that any breach of
Sections 6.6.1 or 6.6.2 above will result in irreparable damage to Buyer for
which Buyer will have no adequate remedy at law, and, therefore if such a
breach should occur, the Seller Group consents to any temporary or permanent
injunction or decree of specific performance by any court of competent
jurisdiction in favor of Buyer enjoining any such breach, without prejudice to
any other right or remedy to which Buyer shall be entitled. In the event that
any portion of this Section 6.6 shall be determined by any court of competent
jurisdiction to be unenforceable by reason of its being extended over too
great a period of time or too large a geographic area or over too great a
range of activities, it shall be interpreted to extend only over the maximum
lesser period of time, geographic area, or range of activities as to which it
may be enforceable. Each of the covenants herein shall be deemed a separate
and severable covenant. In the event any member of the Seller Group breaches
any provision of this Section 6.6, Buyer shall be entitled to recover all
costs of enforcement, including reasonable attorneys' fees.
6.7 Bulk Transfer Compliance. As between Buyer and Seller, Buyer
shall have no obligation to give bulk transfer notices to creditors, claimants
or other persons or entities. Seller shall indemnify and hold harmless Buyer
against any and all expense, loss, damage or liability, including court costs
and reasonable attorneys' fees, arising from or related to claims asserted by
third parties due to noncompliance by Buyer or Seller with applicable bulk
transfer laws, but only to the extent such expense, loss, damage or liability
arise from or are related to liabilities which are not Assumed Liabilities.
Nothing herein contained shall relieve Buyer of any of its obligations with
respect to Assumed Liabilities.
6.8 Storage of Assets. Seller shall permit Buyer to store any of the
Purchased Assets at the facility of Seller at which they are currently located
or such other facility as the parties may agree upon, free of charge, in the
manner in which such assets are currently held, for a period of one year from
the date hereof.
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Buyer hereby agrees to keep, perform and fully discharge the following
covenants and agreements:
6.9 Records and Documents. Following the Closing Date, Buyer shall
grant to Seller and its representatives, at Seller's request (and subject to
Seller's reimbursement of Buyer's out-of-pocket expenses), access to and the
right to make or obtain copies of those records and documents related to the
Business, any Facility or the Purchased Assets, possession of which is
transferred to Buyer, as may be reasonably necessary for Seller's tax,
employee benefit or financial reporting obligations or other investigation
required by law or, for Seller's dealing with, handling or discharging of any
debt, obligation or liability of or relating to the Business, the Facility or
the Purchased Assets which is not an Assumed Liability. If Buyer elects to
dispose of such records, Buyer shall first give Seller sixty (60) days'
written notice, during which period Seller shall have the right to obtain the
records without further consideration. If reasonably necessary, Buyer shall
also make reasonably available its employees to provide information for the
same purposes on the same basis.
6.10 Assumed Liabilities. Buyer agrees to pay and be responsible for
the payment of the Assumed Liabilities.
ARTICLE VII
EMPLOYEES
7.1 Continued Association with the Business. Buyer shall offer
employment to all current employees of the Business from among those listed on
Schedule 4.14 who are actively performing services for the Business on the
Closing Date on substantially equivalent salary, bonuses and positions. All
of the employees listed on Schedule 4.14 are employed by Seller. Seller will
use all reasonable efforts to retain all present employees through the
Closing. Seller has not offered and will not offer employment to any
employees in respect of any period after Closing, without the prior written
consent of Buyer. Buyer shall not incur any liability or obligation with
respect to any employee that does not accept employment with Buyer. Buyer
will not incur as a result of the transfer of the Purchased Assets, any
present, future or contingent liability or obligation to pay any pension
benefits, medical benefits, compensation for loss of employment or other
compensation or benefits to any employee terminated at or prior to Closing.
The employees of the Business hired by Buyer are referred to herein as the
"Buyer Employees". Buyer shall accept responsibility to bargain in good faith
with the unions described on Schedule 4.14, but shall only assume the
collective bargaining agreements listed on Schedule 1.3(a) as provided in
Section 1.3.
7.2 Benefit Plans. Buyer shall have no liability under any "employee
welfare benefit plans" (as defined in Section 3(1) of ERISA), "employee
pension benefit plans" (as defined in Section 3(2) of ERISA), bonus, profit
sharing, deferred compensation, incentive or other compensation plans or
arrangements, and other employee fringe benefit plans whether funded or
unfunded, qualified or unqualified (all the foregoing being herein called
"Benefit Plans") maintained or contributed to for the benefit of any of the
employees or other persons performing services at or for any Facility or for
the Business. Seller has made all existing payment options available to the
employees of the Business participating in the Robertson-Ceco 401(K) Plan.
7.3 COBRA Obligations. Seller shall retain all liabilities, perform
all obligations and maintain all insurance under the Consolidated Omnibus
Budget Reconciliation Act of 1985 ("COBRA") with respect to its employees and
former employees of the Business and their covered dependents, whether or not
such employees accept employment with Buyer.
7.4 Severance. Seller shall be liable for any severance, separation
or similar liabilities, that are payable (i) to any person whose right to
severance or separation benefits arises as a result of the transactions
contemplated by this Agreement (other than as a result of a breach by Buyer of
its obligations hereunder), (ii) to any person whose employment with Seller
was terminated prior to the Closing, and (iii) to any employee of Seller not
hired by Buyer (a "Seller Employee"). Buyer shall be liable for any
severance, separation or similar liabilities for all Buyer Employees under
Buyer's employment policies and procedures.
7.5 Workers Compensation. Seller shall be liable for the
administration and payment of all workers' compensation liabilities and
benefits with respect to (i) Buyer Employees resulting from claims, events,
circumstances, exposures, conditions or occurrences occurring prior to the
Closing Date, and (ii) employees and former employees of Seller that do not
become Buyer Employees. Buyer shall be responsible for the administration and
payment of all workers' compensation liabilities and benefits with respect to
Buyer employees resulting from claims reported following the Closing Date, and
resulting from events, circumstances, exposures, conditions, or occurrences
after the Closing Date, provided Seller shall administer and pay all workers'
compensation liabilities and claims in the ordinary course of business from
the Effective Time through Closing and shall promptly assign to Buyer any
insurance proceeds attributable to the workers' compensation claims accepted
by Buyer.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
Each and all of the obligations of Buyer to consummate the transactions
contemplated by this Agreement are subject to fulfillment prior to or at the
Closing of the following conditions (unless waived in writing in the sole
discretion of Buyer):
8.1 Accuracy of Warranties and Performance of Covenants. The
representations and warranties of Seller contained herein shall be accurate in
all material respects when made and as of the Closing Date. Seller shall have
performed all obligations and complied with each and all of the covenants,
agreements and conditions required to be performed or complied with on or
prior to the Closing in all material respects.
8.2 No Pending Action. No action, suit, proceeding or investigation
before any court, administrative agency or other governmental authority shall
be pending or threatened wherein an unfavorable judgment, decree or order
would prevent the carrying out of this Agreement or any of the transactions
contemplated hereby, declare unlawful the transactions contemplated hereby,
cause such transactions to be rescinded, or would affect the right of Buyer to
own, operate or control any Facility, the Business or the Purchased Assets.
8.3 Consents. Except as described on Schedule 8.3, all material
notices to, consents, approvals, authorizations and waivers from third parties
and governmental agencies that are required for the transfer of any Facility,
the Business or any of the Purchased Assets or that are otherwise required for
the consummation of the transactions contemplated hereby upon the terms hereof
shall have been obtained or provided for and shall remain in effect.
8.4 Condition of Business and Assets. There shall have been no fact,
event, condition or circumstance which does or could reasonably be expected to
result in a Material Adverse Effect.
8.5 Real Estate Matters. Buyer shall have obtained, as evidenced by
issuance at Closing by a title insurance company selected by Buyer, owner's
title insurance policies (ALTA Form B-1970) for each parcel of Real Estate to
be purchased, showing Buyer or its nominee as the insured owner of fee simple
title, subject only to the lien of taxes not delinquent at Closing and to such
exceptions as are acceptable to Buyer. Such title insurance policies shall
have extended coverage over the standard printed exceptions, zoning and access
endorsements, and such other endorsements as Buyer may reasonably require.
Seller agrees to execute and deliver such affidavits and indemnities as may be
required in order to obtain such title policies and coverages. The cost of
the title insurance policies shall be paid by Seller. Buyer shall have
obtained prior to or at Closing, surveys of each parcel of Real Estate to be
purchased prepared in accordance with current ALTA Land Survey Standards by a
licensed engineer or surveyor reasonably acceptable to Buyer, which surveys
shall show no encroachments by improvements located on adjoining properties
onto the Real Estate, no encroachments by improvements on the Real Estate onto
property or setback lines or onto easements or rights-of-way and no gores,
gaps, overlaps or other survey defects unacceptable to Buyer. The cost of the
surveys shall be paid by Seller.
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS
OF SELLER
Each and all of the obligations of Seller to consummate the transactions
contemplated by this Agreement are subject to fulfillment prior to or at the
Closing of the following conditions (unless waived in writing in the sole
discretion of Seller):
9.1 Accuracy of Warranties and Performance of Covenants. The
representations and warranties of Buyer contained herein shall be accurate in
all material respects as if made on and as of the Closing Date. Buyer shall
have performed all of its obligations and complied with each and all of the
covenants, agreements and conditions required to be performed or complied with
on or prior to the Closing in all material respects.
9.2 No Pending Action. No action, suit, proceeding or investigation
before any court, administrative agency or other governmental authority shall
be pending wherein an unfavorable judgment, decree or order would prevent the
carrying out of this Agreement or any of the transactions contemplated hereby
in a way materially adverse to Seller, declare unlawful the transactions
contemplated hereby or cause such transactions to be rescinded.
ARTICLE X
SURVIVAL AND INDEMNIFICATION
10.1 Survival. All covenants and agreements contained in this
Agreement or in any agreement or other document delivered pursuant hereto
shall be deemed to be material and to have been relied upon by the parties
hereto and shall survive the Closing and be enforceable until the covenant or
agreement has been fully performed. Unless otherwise specified, the
representations and/or warranties contained in this Agreement or in any
agreement or other document delivered pursuant hereto shall be deemed to be
material and to have been relied upon by the parties hereto and shall survive
the Closing for a period ending two years and six months from the Closing
Date, provided that (i) the representations and warranties in the following
Sections shall survive and be enforceable indefinitely: Section 4.1, Section
4.2, the first sentence of Section 4.4, the first sentence of Section 4.9,
Section 4.10 and Section 4.11 (as to title matters only) and (ii) the
representations and warranties in Section 4.6 (as to tax matters), Section
4.15 and Section 4.22 shall survive until expiration of the applicable
statutes of limitation. Any claim for indemnification under the
representations and warranties that survive for a period of time that is
asserted in writing within the survival period shall survive until resolved or
judicially determined. The representations and warranties set forth in this
Agreement or in any agreement or other document delivered pursuant hereto
shall not be affected by any investigation, verification or examination by any
party hereto or by anyone on behalf of any such party.
10.2 Indemnification. Buyer shall indemnify and hold harmless Seller,
from and against any and all loss, diminution in value, damage, cost, expense
(including court costs and attorneys' fees and expenses and costs of
investigation), suit, action, claim, deficiency, liability or obligation
related to, caused by or arising from (i) any misrepresentation, breach of
warranty or failure to fulfill any covenant or agreement of Buyer contained
herein or in any agreement or other document delivered pursuant hereto, (ii)
any and all claims of third parties made based upon facts alleged that, if
true, would have constituted such a misrepresentation, breach or failure and
(iii) the Assumed Liabilities. Seller shall indemnify and hold harmless
Buyer, from and against any and all loss, diminution in value, damage, cost,
expense (including court costs and attorneys' fees and expenses and costs of
investigation), suit, action, claim, deficiency, liability or obligation
related to, caused by or arising from (i) any misrepresentation, breach of
warranty or failure to fulfill any covenant or agreement of Seller contained
herein or in any agreement or other document delivered pursuant hereto, (ii)
any and all claims of third parties made based upon facts alleged that, if
true, would constitute such a misrepresentation, breach or failure, (iii) any
and all claims of employees of the Business to the extent related to the
period prior to Closing or otherwise related to the acts of Seller but not to
any breach by Buyer of the provisions hereof; (iv) any liability or obligation
of Seller not assumed pursuant to the express terms hereof and regardless of
whether any liability or obligation is imposed upon Buyer by any applicable
law, including liabilities with respect to Seller's employees and Benefit
Plans and (v) any liabilities and obligations to the extent arising from
activities prior to Closing with respect to the environmental matters listed
on Schedule 4.10. The party seeking indemnification shall give written
notice to the indemnifying party of the facts and circumstances giving rise to
any claim for indemnification. All rights contained in this Article are
cumulative and are in addition to all other rights and remedies which are
otherwise available, pursuant to the terms of this Agreement or applicable
law. All indemnification rights shall be deemed to apply in favor of the
indemnified party's officers, directors, representatives, subsidiaries,
affiliates, successors and assigns.
ARTICLE XI
TERMINATION, WAIVER, AMENDMENT AND CLOSING
11.1 Termination or Abandonment. Notwithstanding anything contained in
this Agreement to the contrary, this Agreement may be terminated and abandoned
at any time prior to the Closing Date:
(a) by the mutual written consent of Seller and Buyer;
(b) by Seller or Buyer if any court of competent jurisdiction or
governmental body, authority or agency having jurisdiction shall have
issued an order, decree or ruling or taken any other action restraining,
enjoining or otherwise prohibiting the transactions contemplated by this
Agreement and such order, decree, ruling or other action shall have
become final and nonappealable;
(c) by Buyer, if one or more of the conditions to the obligation
of Buyer to Close as provided in Article VIII has not been fulfilled by
the Closing Date; or
(d) by Seller, if one or more of the conditions to the
obligation of Seller to Close as provided in Article IX has not been
fulfilled by the Closing Date.
In the event of termination of this Agreement pursuant to this Section 11.1,
this Agreement shall terminate and there shall be no other liability on the
part of Seller or Buyer to the other party hereto except liability arising out
of a breach of this Agreement or the failure by a party to fulfill its
conditions hereunder, in which event, the non-breaching party reserves the
right to seek all available remedies. The termination of this Agreement
pursuant to this Section 11.1 shall become effective on the date (x) in the
case of a termination pursuant to Section 11.1(a), the consent is executed and
(y) in the case of a termination pursuant to Section 11.1(b), (c) or (d),
written notice is given by the terminating party to the other party hereto.
11.2 Extension of Time, Waiver, Etc. At any time prior to the Closing
Date, Seller and Buyer may by written instrument:
(a) extend the time for the performance of any of the
obligations or acts of the other party; and
(b) waive compliance with any of the agreements of the other
party contained herein; provided, however, that except as provided in
Section 10.1 no failure or delay by Seller or Buyer in exercising any
right hereunder shall operate as a waiver thereof nor shall any single
or partial exercise thereof preclude any other or further exercise
thereof of the exercise of any other right hereunder.
ARTICLE XII
GENERAL PROVISIONS
12.1 Amendments and Waiver. No amendment, waiver or consent with
respect to any provision of this Agreement shall in any event be effective,
unless the same shall be in writing and signed by the parties hereto, and then
such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
12.2 Notices. All notices, requests, consents, demands and other
communications hereunder must be in writing and shall be delivered in person,
by courier service or by telecopy, telegram or telex as follows:
(a) If to Seller:
Robertson-Ceco Corporation
222 Berkeley Street
Boston, Massachusetts 02116
Telecopy No.: 617-424-5558
Attn: Chief Financial Officer
With copies to:
George S. Pultz
Vice President, General Counsel
and Secretary
Robertson-Ceco Corporation
222 Berkeley Street
Boston, Massachusetts 02116
Telecopy No.: 617-424-5558
(b) If to Buyer:
Ceco Concrete Construction Corp.
c/o Pettibone Corporation
4225 Naperville Road
Suite 200
Lisle, IL 60532-3657
Tel: (708) 955-2205
Attn.: Larry Gies
With copies to:
McDermott, Will & Emery
227 West Monroe Street
Chicago, IL 60606
Telecopy No.: 312-984-3669
Attn: Stanley H. Meadows, P.C.
Notice shall be deemed given when sent or delivered as provided herein. Any
party may change its address or add or change parties for receiving notice by
written notice given to the others named above.
12.3 Expenses. Except as otherwise expressly provided herein, each
party to this Agreement shall pay its own costs and expenses in connection
with the transactions contemplated hereby.
12.4 Rules of Construction. The word "including" shall mean including,
without limitation. The Article, Section and other headings contained herein
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
12.5 Counterparts. This Agreement may be executed (which may be by
facsimile with hard copy by express delivery) in counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
and the same instrument.
12.6 Successors and Assigns. This Agreement shall bind and inure to
the benefit of the parties named herein and their respective successors and
assigns. Seller may not assign any rights, benefits, duties or obligations
under this Agreement. Buyer shall only assign its rights, benefits, duties
and obligations to an Affiliate of Pettibone Corporation.
12.7 Entire Agreement. This Agreement and the documents referred to
herein contain the entire agreement and understanding among the parties with
respect to the transactions contemplated hereby and supersede all other
agreements, understandings and undertakings among the parties on the subject
matter hereof.
12.8 Announcements. No announcement of the specific terms of this
Agreement shall be made by any party without the written approval of the other
party (which approval shall not be unreasonably withheld), except filings
required to be made with the Securities and Exchange Commission and as
otherwise required by applicable law or rules of a national securities
exchange.
12.9 Partial Invalidity. In the event that any provision of this
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.
12.10 Applicable Law. This Agreement shall be interpreted in
accordance with the substantive laws of the State of Delaware applicable to
contracts made and to be performed wholly within said State.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by a duly authorized officer all as of the date first
written above.
CECO CONCRETE CONSTRUCTION ROBERTSON-CECO CORPORATION
CORP.
By: _______________________ By: __________________________
Larry W. Gies George S. Pultz
Its: Vice President Its: Vice President