Exhibit 4.20
ASSET AND CAPITAL CONTRIBUTION AGREEMENT
THIS ASSET AND CAPITAL CONTRIBUTION AGREEMENT (this "Agreement") is
made and entered into this 1st day of July, 2005, by and among READY MIX USA,
INC., an Alabama corporation ("RMUSA"), CEMEX SOUTHEAST HOLDINGS LLC, a Delaware
limited liability company ("Cemex"), and READY MIX USA, LLC, a Delaware limited
liability company ("Company").
W-I-T-N-E-S-S-E-T-H :
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WHEREAS, RMUSA and Cemex are the sole members of Company; and
WHEREAS, RMUSA and Cemex have agreed to each make an asset and capital
contribution (the "Contribution") to Company pursuant to terms contained herein;
and
WHEREAS, subsequent to the Contribution, Company will own and operate
the RMUSA Assets and the Cemex Assets, both of which terms are defined below, in
connection with the business of producing and selling ready-mix concrete and
concrete block, pavers and septic tanks, and materials to produce the same, such
as aggregates and sand, at the RMUSA Business Locations and the Cemex Business
Locations, both of which terms are defined below.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, the receipt, adequacy and sufficiency of which are
hereby acknowledged, RMUSA and Cemex hereby agree as follows:
ARTICLE 1
TRANSFER OF ASSETS
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1.1 Assets To Be Contributed By RMUSA. Subject to the terms hereinafter
set forth, RMUSA hereby transfers, conveys, assigns and delivers, and agrees to
cause each of its Affiliates (as defined herein) to transfer, convey, assign and
deliver, to Company those assets described on Schedule 1.1(a) which are
currently owned by RMUSA or any of its Affiliates and used or intended for use
primarily in, or which are being utilized or operated by RMUSA or any of its
Affiliates in its ready-mix concrete, concrete block and septic tank manufacture
facilities, paver manufacture facilities and aggregate and sand business (the
"RMUSA Assets") and the business associated with said assets, including the
business associated with the Partnerships (as defined below) (the "RMUSA
Business"). The locations listed on Schedule 1.1(a)-1 are referred to sometimes
herein as the "RMUSA Business Locations." Notwithstanding the foregoing, the
assets, properties and rights described on Schedule 1.1(b) shall not be
transferred, conveyed, assigned or delivered to Company under this Agreement
(the "Retained RMUSA Assets"). Notwithstanding the definition of RMUSA Assets
included above, the parties acknowledge that a portion of the RMUSA Value (as
defined below) includes, primarily for convenience and scheduling purposes,
those membership interests (the "Membership Interests") in each of the companies
to which each of the Membership Interests apply (the "Partnerships") as
disclosed on Schedule 1.1(a).
1.2 Assets To Be Contributed By Cemex. Subject to the terms hereinafter
set forth, Cemex hereby transfers, conveys, assigns and delivers, and agrees to
cause each of its Affiliates to transfer, convey, assign and deliver, to Company
those assets described on Schedule 1.2(a) which are currently owned by Cemex or
any of its Affiliates and used or intended for use primarily in, or which are
being utilized or operated by Cemex or any of its Affiliates primarily in its
ready-mix concrete, concrete block and aggregate business locations in the RMUSA
Boundaries (the "Cemex Assets") and the business associated with said assets
(the "Cemex Business", and together with the RMUSA Business, the "Business").
The locations listed on Schedule 1.2(a)-1 are referred to sometimes herein as
the "Cemex Business Locations." Notwithstanding the foregoing, the assets,
properties and rights described on Schedule 1.2(b) shall not be transferred,
conveyed, assigned or delivered to Company under this Agreement (the "Retained
Cemex Assets").
ARTICLE 2
ASSIGNED VALUES
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2.1 Values Assigned to RMUSA Assets And Cemex Assets. RMUSA and Cemex
agree, for purposes of this Agreement, that:
(a) the value assigned to the RMUSA Assets is equal to the sum
of $357,318,591.59 ($344,000,000 and 13,318,591.59), plus the adjustments made
pursuant to Section 2.2 and 2.3 (the "RMUSA Value"); and
(b) the value assigned to the Cemex Assets is equal to the sum
of $41,061,758 ($16,061,758 and $25,000,000), plus the adjustments made pursuant
to Section 2.2 and 2.3 (the "Cemex Value").
2.2 Prorations. Except for any accounts payable of RMUSA, arising out
of the ordinary course of the RMUSA Business, which shall be valued at face
value (net of discounts) at close of business on the Contribution Date, and
subject to adjustment pursuant to Section 2.3 below (the "RMUSA Accounts
Payable"), Cemex and RMUSA each acknowledge and agree that RMUSA shall be
responsible for the expenses relating to the RMUSA Assets, and Cemex shall be
responsible for the expenses relating to the Cemex Assets, up to and through the
Contribution Date (for example, ad valorem taxes and utilities) and that such
expenses shall be paid by them at or before the Contribution Date. To the extent
that a period of time for the assessment of any of the expenses (for example,
property taxes) shall be due both before and after the Contribution Date, the
same shall be prorated as of the Contribution Date. RMUSA and Cemex acknowledge
and agree that one or more of such prorations may occur or be reconciled
subsequent to the Contribution Date.
2.3 Estimated Values; Adjustments.
(a) The RMUSA Value shall be (i) increased by (v) any cash
contributed to the Company by RMUSA on the Contribution Date; (w) the value of
the inventory of sand, gravel, cement, admixtures, fuel, other raw material and
finished goods on hand constituting RMUSA Inventory, which shall all be valued
at book value at close of business on the Contribution Date; (x) the value of
the inventory of tools, parts and related items constituting RMUSA Inventory,
which shall all be valued at book value at close of business on the Contribution
Date; (y) the value of all deposits and prepaid items at close of business on
the Contribution Date (the "RMUSA Prepaids"); and (z) the amount, if any, by
which the RMUSA Accounts Receivable, valued at face value at close of business
on the Contribution Date, exceed the RMUSA Accounts Payable, and (ii) decreased
by the amount, if any, by which the RMUSA Accounts Payable exceed the RMUSA
Accounts Receivable. For the purpose of calculating the RMUSA Accounts
Receivable: (i) accounts receivable that are less than sixty (60) days past due
will be valued at face value as of the close of business on the Contribution
Date; (ii) accounts receivable that are more than sixty (60) days and less than
ninety (90) days past due will be valued at 90% of face value as of the close of
business on the Contribution Date; and (iii) accounts receivable that are more
than ninety (90) days past due will be valued at 75% of the face value as of the
close of business on the Contribution Date.
(b) The Cemex Value shall be (i) increased by (w) any cash
contributed to the Company by Cemex on the Contribution Date; (x) the value of
the inventory of sand, gravel, cement, admixtures, fuel, other raw material and
finished goods on hand constituting Cemex Inventory, which shall all be valued
at book value at close of business on the Contribution Date; (y) the value of
the inventory of tools, parts and related items constituting Cemex Inventory,
which shall all be valued at book value at close of business on the Contribution
Date; and (z) the value of all deposits and prepaid items at close of business
on the Contribution Date (the "Cemex Prepaids").
(c) (i) Within thirty (30) days after the Contribution Date,
(x) Cemex shall deliver to the Company and RMUSA a working capital statement
reflecting the current assets and the Cemex Prepaids assigned by Cemex pursuant
to this Agreement as of the close of business on the Contribution Date, with
each item valued as contemplated in Section 2.2 or 2.3(b), as the case may be
(the "Cemex Working Capital Statement") and (y) RMUSA shall deliver to the
Company and Cemex a working capital statement reflecting the current assets, the
RMUSA Prepaids and the RMUSA Accounts Payable assigned by RMUSA pursuant to this
Agreement as of the close of business on the Contribution Date, with each item
valued as contemplated in Section 2.2 or 2.3(a), as the case may be (the "RMUSA
Working Capital Statement").
(ii) Upon receipt of the Cemex Working Capital
Statement, RMUSA and its independent certified public accountants shall
have the right during the succeeding 30-day period to review and audit
the accounts represented by the line items set forth on the Cemex
Working Capital Statement and to examine and review all records and
work papers and other supporting documents used to prepare such
statement. Cemex shall give RMUSA full access at all reasonable times
to the working papers relating to the Cemex Working Capital Statement,
including but not limited to any descriptions of the methodology,
procedures, internal audits and analysis undertaken in connection with
the preparation of the Cemex Working Capital Statement. RMUSA shall
notify Cemex in writing, on or before the last day of the 30-day
period, of any good faith objections to the Cemex Working Capital
Statement, setting forth a detailed explanation of the objections and
the dollar amount of each such objection. If RMUSA does not deliver
such notice within such 30-day period, the Cemex Working Capital
Statement shall be deemed to have been irrevocably accepted by RMUSA
and the Company.
(iii) Upon receipt of the RMUSA Working Capital
Statement, Cemex and its independent certified public accountants shall
have the right during the succeeding 30-day period to review and audit
the accounts represented by the line items set forth on the RMUSA
Working Capital Statement and to examine and review all records and
work papers and other supporting documents used to prepare such
statement. RMUSA shall give Cemex full access at all reasonable times
to the working papers relating to the RMUSA Working Capital Statement,
including but not limited to any descriptions of the methodology,
procedures, internal audits and analysis undertaken in connection with
the preparation of the RMUSA Working Capital Statement. Cemex shall
notify RMUSA in writing, on or before the last day of the 30-day
period, of any good faith objections to the RMUSA Working Capital
Statement, setting forth a detailed explanation of the objections and
the dollar amount of each such objection. If Cemex does not deliver
such notice within such 30-day period, the RMUSA Working Capital
Statement shall be deemed to have been irrevocably accepted by Cemex
and the Company.
(iv) If any party in good faith objects to line items
set forth on the Cemex Working Capital Statement, or the RMUSA Working
Capital Statement, as the case may be, the parties shall attempt to
resolve any such objections within 30 days of receipt by the
corresponding party of any such objections. If the parties are unable
to resolve the matter within such 30-day period, they shall jointly
appoint an impartial nationally recognized independent certified public
accounting firm (the "Impartial Accounting Firm") mutually acceptable
to the parties (or, if they cannot agree on a mutually acceptable firm,
they shall cause their respective accounting firms to select such firm)
within five (5) days after the end of such 30-day period to resolve any
such remaining matters. Any such resolution shall be conclusive and
binding on the parties and the fees of the Impartial Accounting Firm
shall be borne as the Impartial Accounting Firm shall determine after
considering the positions asserted by the parties in light of its final
decision. The parties shall fully cooperate with the Impartial
Accounting Firm. The Impartial Accounting Firm shall be instructed to
reach its conclusion regarding the dispute within thirty (30) days of
its appointment to settle the dispute.
(v) Adjustments to the values contemplated in
paragraphs (a) and (b) of this Section 2.3 shall be made pursuant to
the Cemex Working Capital Statement and the RMUSA Working Capital
Statement, after their acceptance by the parties or the resolution of
all disputes in connection therewith, pursuant to the provisions of
this paragraph 2.3(c). Upon any adjustment to the RMUSA Value or the
Cemex Value, as contemplated above, in the event that the sum of RMUSA
Value under this Agreement and the RMUSA Value under the Cemex
Contribution Agreement, as finally determined (the "Aggregate RMUSA
Contribution"), is less than the sum of the Cemex Value under this
Agreement and the Cemex Value under the Cemex Contribution Agreement,
as finally determined (the "Aggregate Cemex Contribution"), then within
ten (10) days following such final determination RMUSA shall make a
cash contribution (as part of its Contribution) to Company in an amount
equal to such shortfall. In the event the Aggregate RMUSA Contribution
is greater than the Aggregate Cemex Contribution, then within ten (10)
days following such final determination Cemex shall make a cash
contribution (as part of its Contribution) to Cemex LLC in an amount
equal to such shortfall.
(d) In connection with the preparation of the Cemex Working
Capital Statement and the RMUSA Working Capital Statement, each of RMUSA and
Cemex shall be entitled, for a period of thirty (30) days following the
Contribution Date, to conduct a review of Company's physical inventory.
ARTICLE 3
CONTRIBUTION DATE
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3.1 Contribution Date. The Contribution shall be made by RMUSA and
Cemex simultaneously with the entering into of this Agreement (the "Contribution
Date").
ARTICLE 4
DELIVERIES
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4.1 Deliveries By RMUSA. Contemporaneously with the execution and
delivery of this Agreement, RMUSA shall deliver or cause to be delivered the
following:
(a) To Company:
(i) A bill of sale and assignment evidencing the
contribution to Company of those items described in paragraph 2 of
Schedule 1.1(a), duly executed by RMUSA;
(ii) A limited warranty deed for each parcel of RMUSA
Land duly executed by RMUSA, evidencing the contribution of the RMUSA
Land to Company (the "RMUSA Warranty Deed");
(iii) A Title Policy for each parcel of RMUSA Land;
(iv) Any sales tax and real estate transfer tax
returns, notice of sale of assets, inventory resale certificate or like
governmental report required or permitted by any Governmental Authority
having jurisdiction over the RMUSA Real Property;
(v) An affidavit pursuant to the Foreign Investment
and Real Property Transfer Act in respect of the transfer of RMUSA
Land;
(vi) Duly executed and assigned certificates of title
for all vehicles/rolling stock being contributed to Company as part of
the RMUSA Assets;
(vii) Resolutions adopted by the directors of RMUSA
unanimously authorizing the execution and delivery of this Agreement
and the transactions contemplated hereunder and appointing the
person(s) authorized to consummate this transaction on behalf of RMUSA
(the "RMUSA Authorized Person(s)");
(viii) A current Certificate of Good Standing of
RMUSA from each of the states in which the RMUSA Business Locations are
located;
(ix) A certificate executed by an authorized officer
of RMUSA as to the incumbency of the RMUSA Authorized Person(s);
(x) Possession of the RMUSA Assets;
(xi) To the extent assignable, an assignment of the
RMUSA Permits;
(xii) An instrument of assignment and assumption with
respect to each RMUSA Assumed Contract (the "RMUSA Agreement Assignment
and Assumption"), duly executed by RMUSA;
(xiii) An Assignment and Assumption Agreement and
Lessor and Lessee Estoppel Agreement with respect to each RMUSA Lease
substantially in the form attached hereto as Exhibit A (the "RMUSA
Lease Assignment");
(xiv) A Trademark License Agreement (the "RMUSA
Trademark License Agreement"); and
(xv) $28,144,915.10, (x) by wire transfer of
$4,594,222.32 in immediately available funds to the account designated
by Company and (y) $23,550,692.78 by transfer of bank accounts to the
Company, as set forth in Schedule 4.1(a)(xv).
(b) To Company and Cemex:
(i) The Limited Liability Company Agreement of Ready
Mix USA, LLC, dated July 1, 2005 (the "Ready Mix LLC Agreement"), duly
executed by RMUSA.
4.2 Deliveries By Cemex. Contemporaneously with the execution and
delivery of this Agreement, Cemex shall deliver or cause to be delivered the
following:
(a) To Company:
(i) A bill of sale and assignment evidencing the
contribution to Company of those items described in paragraph 2 of
Schedule 1.2(a), duly executed by Cemex or its Affiliates;
(ii) A limited warranty deed for each parcel of Cemex
Land duly executed by Cemex or its Affiliates, evidencing the
contribution of the Cemex Land to Company (the "Cemex Warranty Deed");
(iii) A Title Policy for each parcel of Cemex Land;
(iv) Any sales tax and real estate transfer tax
returns, notice of sale of assets, inventory resale certificate or like
governmental report required or permitted by any Governmental Authority
having jurisdiction over the Cemex Real Property;
(v) An affidavit pursuant to the Foreign Investment
and Real Property Transfer Act in respect of the transfer of Cemex
Land;
(vi) Duly executed and assigned Certificates of Title
for all vehicles/rolling stock being contributed to Company as part of
the Cemex Assets;
(vii) Resolutions adopted by the directors of Cemex
or its Affiliates unanimously authorizing the execution and delivery of
this Agreement and the transactions contemplated hereunder and
appointing the person(s) authorized to consummate this transaction on
behalf of Cemex or its Affiliates (the "Cemex Authorized Person(s)");
(viii) A current Certificate of Good Standing of
Cemex or its Affiliates from each state in which a Cemex Business
Location is located;
(ix) A certificate executed by an authorized officer
of Cemex or its Affiliates as to the incumbency of the Cemex Authorized
Person(s);
(x) Possession of the Cemex Assets;
(xi) To the extent assignable, an assignment of the
Cemex Permits;
(xii) An instrument of assignment and assumption with
respect to each Cemex Assumed Contract (the "Cemex Agreement Assignment
and Assumption"), duly executed by Cemex or its Affiliates;
(xiii) An Assignment and Assumption Agreement and
Lessor and Lessee Estoppel Agreement with respect to each Cemex Lease
substantially in the form attached hereto as Exhibit B (the "Cemex
Lease Assignment"); and
(xiv) The Cement Supply Agreement duly executed by
Cemex, in its capacity as the Manager of Cemex LLC.
(b) To Company and RMUSA:
(i) The Ready Mix LLC Agreement, duly executed by
Cemex.
4.3 Deliveries By Company. Contemporaneously with the execution and
delivery of this Agreement, Company shall deliver or cause to be delivered:
(a) To each of RMUSA and Cemex, the Ready Mix LLC Agreement,
duly executed by Company;
(b) To Cemex LLC, the Cement Supply Agreement, duly executed
by Company;
(c) To RMUSA, the RMUSA Agreement Assignment and Assumption,
duly executed by Company;
(d) To Cemex, the Cemex Agreement Assignment and Assumption,
duly executed by Company;
(e) To Cemex, a Cemex Lease Assignment with respect to each
Cemex Lease, duly executed by Company;
(f) To RMUSA, a RMUSA Lease Assignment with respect to each
RMUSA Lease, duly executed by Company; and
(g) To RMUSA, the RMUSA Trademark License Agreement, duly
executed by the Company.
4.4 Consents. Notwithstanding anything to the contrary contained in
this Agreement, this Agreement shall not constitute an agreement to transfer,
sell or otherwise assign any instrument, Contract, license or Permit of the
Cemex Business or the RMUSA Business which would otherwise be a Transferred
Asset but which is not permitted to be assigned in connection with a transaction
of the type contemplated by this Agreement (collectively, the "Unassigned
Contracts"). To the extent permitted under the terms of each Unassigned
Contract, the beneficial interest in and to each Unassigned Contract shall in
any event pass to Company at the Closing, and each of Cemex and RMUSA, as the
case may be, covenants and agrees to cooperate with Company in any lawful and
economically reasonable arrangement to provide Company with Cemex's or RMUSA's,
as the case may be, entire interest in the benefits under each of the Unassigned
Contracts. Cemex or RMUSA, as the case may be, shall exercise or exploit its
rights and options under all such Unassigned Contracts referred to in this
Section 4.4 only as reasonably directed by Company; provided, that Company shall
be responsible for any liability incurred by Cemex or RMUSA, as the case may be,
pursuant to such direction and, provided, further, that Company shall not direct
Cemex or RMUSA, as the case may be, not to attempt to obtain a Required
Contractual Consent for an Unassigned Contract. If Company receives an economic
benefit under an Unassigned Contract, Company shall accept the burdens and
perform the obligations under such Unassigned Contract as subcontractor of Cemex
or RMUSA, as the case may be, to the extent of the benefit received, and to the
extent such burdens and obligations would have constituted an Assumed Liability
if such Unassigned Contract had been transferred to Company at the Contribution.
Furthermore, if the other party(ies) to an Unassigned Contract subsequently
Consent to the assignment of such Contract to Company, Company shall thereupon
agree to assume and perform all liabilities and the obligations arising
thereunder after the date of such Consent, at which time such Unassigned
Contract shall be deemed a Transferred Asset, without the payment of further
consideration, and the obligations so assumed thereunder shall be deemed Assumed
Liabilities.
ARTICLE 5
LIABILITIES
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5.1 Limitation on Liabilities of RMUSA to be Assumed by Company.
Notwithstanding any provision of this Agreement to the contrary, Company shall
not assume or become liable to RMUSA, or any other Person, for any liabilities
or obligations of RMUSA or any of its Affiliates whether accrued, absolute,
contingent or otherwise, except for those liabilities of RMUSA and its
Affiliates described on Schedule 5.1 (the "RMUSA Assumed Liabilities"), which
Company hereby assumes and agrees to perform, satisfy and discharge when due.
5.2 Limitation on Liabilities of Cemex to be Assumed by Company.
Notwithstanding any provision of this Agreement to the contrary, Company shall
not assume or become liable to Cemex, or any other Person, for any liabilities
or obligations of Cemex or any of its Affiliates whether accrued, absolute,
contingent or otherwise, except for those liabilities of Cemex and its
Affiliates described on Schedule 5.2 (the "Cemex Assumed Liabilities") which
Company hereby assumes and agrees to perform, satisfy and discharge when due.
ARTICLE 6
CERTAIN POST-CONTRIBUTION MATTERS
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6.1 Further Acts.
(a) RMUSA and Cemex shall, respectively, assist Company, and
cause their Affiliates to assist, in planning for and accomplishing the orderly
transfer of the RMUSA Assets and Cemex Assets to Company as of the Contribution
Date and shall take all steps reasonably requested by Company in furtherance
thereof. From time to time, at the request of Company, whether at or after the
Contribution Date and without further consideration, RMUSA, Cemex and their
respective officers and employees will do, execute, acknowledge and deliver to
Company, or cause their Affiliates to do, execute, acknowledge and deliver to
Company, all further acts, instruments, and assurances, in recordable form, that
are reasonably required by Company to effectuate the terms and conditions of
this Agreement and the Contribution contemplated hereunder. In addition to the
foregoing, on or before the day which is sixty (60) days following the
Contribution Date, Cemex shall cause (i) all of the Cemex Required Contractual
Consents to be obtained, (ii) the Cemex Permits to be assigned to the Company,
and (iii) all certificates of title for all vehicles/rolling stock being
contributed to the Company as part of the Cemex Assets to be duly executed and
assigned to the Company. In addition to the foregoing, on or before the day
which is sixty (60) days following the Contribution Date, RMUSA shall cause (i)
all of the RMUSA Required Contractual Consents to be obtained, (ii) the RMUSA
Permits to be assigned to the Company, and (iii) all certificates of title for
all vehicles/rolling stock being contributed to the Company as part of the RMUSA
Assets to be duly executed and assigned to the Company. The parties covenant and
agree that following the Contribution Date they shall take all commercially
reasonable actions necessary at their own respective cost to clarify, correct,
remove or satisfy any matters of title or survey as to which either party may
have an objection that affect any parcel of real property that is contributed or
conveyed by either party to Company. From time to time, at the request of RMUSA
or Cemex, whether at or after the Contribution Date and without further
consideration, Company and its officers and employees will do, execute,
acknowledge and deliver to RMUSA or Cemex, as the case may be, all further acts,
instruments, and assurances, in recordable form, that are reasonably required by
RMUSA or Cemex, as the case may be, to effectuate the terms and conditions of
this Agreement and the assumption of the RMUSA Assumed Liabilities or the Cemex
Assumed Liabilities, as the case may be, contemplated hereunder.
(b) The agreements of RMUSA and Cemex in (a) above shall
include, without limitation, the execution and delivery of deeds, assignments,
bills of sale, affidavits, agreements, consents, certificates and other
documents or instruments which RMUSA or Cemex, or their Affiliates, as
applicable, shall be unable to deliver as of the Contribution Date and RMUSA and
Cemex, and their Affiliates, as applicable, shall diligently take whatever steps
or actions subsequent to the Contribution Date as may be necessary in order to
effectuate delivery of each of the same.
6.2 Continued Access to Records. RMUSA and Cemex shall, respectively,
preserve for a period of five (5) years after the Contribution Date their
respective records and documents which, in Company's reasonable opinion, relate
to the RMUSA Assets and the Cemex Assets, respectively, any of the
representations or warranties of RMUSA and Cemex, as applicable, contained
herein, or the conduct or operation of the RMUSA Assets and Cemex Assets in the
Business by Company subsequent to Contribution and will grant Company such
reasonable access to and ability to copy all such records and documents as may
be needed by Company.
6.3 Accounts Receivable. In the event that RMUSA receives any payments
subsequent to the Contribution Date relating to any RMUSA Accounts Receivable
outstanding on or after such date, such payment shall be the property of, and
shall be forwarded and remitted to Company as hereinafter provided. After the
Contribution Date RMUSA shall and shall cause its Affiliates to pay to Company
on a bi-monthly basis all amounts received after the Contribution Date by RMUSA
with respect to RMUSA Accounts Receivable.
6.4 Publicity. Unless and only to the extent required to be made
pursuant to any applicable Law, regulation or other requirement of any
Governmental Authority, or by any listing agreement with a national securities
exchange or trading market, none of RMUSA, Cemex or Company shall make any
public announcement or issue any press release regarding this Agreement or the
consummation of the transactions contemplated hereby without the prior written
consent of the other party hereto, which consent shall not be unreasonably
withheld.
6.5 Insurance.
(a) Each of Cemex and Company acknowledges that the RMUSA
Retained Policies will not continue to insure the RMUSA Assets or the RMUSA
Business after the Contribution Date and that it is incumbent upon Company to
obtain substitute policies of insurance that provide insurance coverage for the
RMUSA Assets and the RMUSA Business. Each of Cemex and Company hereby further
acknowledges that in the event any casualty or loss, including a product
liability or workers' compensation claim, relating to the RMUSA Assets or RMUSA
Business occurs prior to or on the Contribution Date, such loss shall be payable
solely from the RMUSA Retained Policies. Each of Cemex and Company hereby
further acknowledges that in the event any casualty or loss, including a product
liability or workers' compensation claim, relating to the RMUSA Assets or RMUSA
Business occurs after the Contribution Date, such loss shall be payable solely
from such substitute policies. Any such substitute policies shall include a
waiver of any rights of subrogation that the insurance carriers underwriting
such policies may have against RMUSA or RMUSA's Affiliates, or under the RMUSA
Retained Policies.
(b) Each of RMUSA and Company acknowledges that the Cemex
Retained Policies will not continue to insure the Cemex Assets or the Cemex
Business after the Contribution Date and that it is incumbent upon Company to
obtain substitute policies of insurance that provide insurance coverage for the
Cemex Assets and the Cemex Business. Each of RMUSA and Company hereby further
acknowledges that in the event any casualty or loss, including a product
liability or workers' compensation claim, relating to the Cemex Assets or Cemex
Business occurs prior to or on the Contribution Date, such loss shall be payable
solely from the Cemex Retained Policies. Each of RMUSA and Company hereby
further acknowledges that in the event any casualty or loss, including a product
liability or workers' compensation claim, relating to the Cemex Assets or Cemex
Business occurs after the Contribution Date, such loss shall be payable solely
from such substitute policies. Any such substitute policies shall include a
waiver of any rights of subrogation that the insurance carriers underwriting
such policies may have against Cemex or Cemex 's Affiliates, or under the Cemex
Retained Policies.
6.6 Employment Matters. RMUSA shall transfer to Company the RMUSA
employees associated with the RMUSA Assets ("RMUSA Transferred Employees").
Cemex shall transfer, or cause the transfer, to Company of the employees of
Cemex and its Affiliates associated with the Cemex Assets and the Cemex Business
("Cemex Transferred Employees"). RMUSA shall maintain, or cause to be
maintained, employee benefit and compensation plans, programs and arrangements
(the "Plans") for the benefit of the Cemex Transferred Employees and the RMUSA
Transferred Employees. With respect to each Plan in which a Cemex Transferred
Employee participates, for purposes of determining eligibility, vesting and
amount of benefits, including severance benefits and paid time off entitlement
(but not for pension benefit accrual purposes), RMUSA shall cause service with
Cemex and its Affiliates (or predecessor employers to the extent Cemex or its
Affiliates provided past service credit) to be treated as service with RMUSA and
its Affiliates; provided, that such service shall not be recognized to the
extent that such recognition would result in a duplication of benefits or to the
extent that such service was not recognized under an analogous plan of Cemex or
its Affiliates. With respect to any Plan maintained in which Cemex Transferred
Employees are eligible to participate, RMUSA shall, and shall cause its
Affiliates to, (i) waive all limitations as to preexisting conditions and
exclusions with respect to participation and coverage requirements applicable to
such employees to the extent such conditions and exclusions were satisfied or
did not apply to such employees under the analogous plan of Cemex or its
Affiliates and (ii) provide each Cemex Transferred Employee with credit for any
co-payments and deductibles paid prior to the Contribution Date in satisfying
any analogous deductible or out-of-pocket requirements to the extent applicable
under any such plan. Effective as of the Contribution Date, the Cemex
Transferred Employees shall cease to participate (and thus shall no longer be
eligible for vesting or benefit accrual under) any employee benefit or
compensation plans, programs or arrangements maintained by Cemex or its
Affiliates.
6.7 Cemex Environmental Indemnity. Cemex, in addition to its other
indemnity obligations otherwise provided in this Agreement, agrees to indemnify
and hold harmless Company and its officers, shareholders, members, managers,
directors, employees, agents, successors, and assigns (the "Cemex Environmental
Indemnitees"), against and in respect of, any and all damages, claims, losses,
liabilities, and expenses (including without limitation, reasonable legal,
accounting, consulting, engineering and other expenses) that may be incurred by
any of the Cemex Environmental Indemnitees, or assessed against any of the Cemex
Environmental Indemnitees by any other party or parties (including, without
limitation, a governmental entity) arising out of, in connection with, or
relating to the subject matter of: (1) the breach or inaccuracy of any of the
representations and warranties set forth in Section 7.7; (2) any Cemex
Environmental Condition which exists as of the Contribution Date, even if not
discovered until after the Contribution Date, including, without limitation,
remediation of such condition and loss of life, injury to persons or property,
or damage to natural resources arising from such condition; (3) any violation of
an Environmental Law prior to the Contribution Date which relates to the Cemex
Real Property or the Cemex Business; or (4) the off-site transportation,
storage, disposal, treatment or recycling of Hazardous Materials generated by or
on behalf of the Cemex Business on or prior to the Contribution Date, including,
without limitation, any claims related to remediation of such Hazardous
Materials and loss of life, injury to persons or property, or damage to natural
resources arising from such Hazardous Materials. Such damages, claims, losses,
liabilities, and expenses may sometimes be referred to herein as "Cemex
Environmental Liabilities." This indemnity shall survive the Contribution Date
only for a period of five (5) years after the Contribution Date. Any testing or
investigation which RMUSA or Company deems reasonably necessary in order to
determine whether any environmental indemnity obligations of Cemex exist
hereunder may be conducted at any time prior to the termination of this
indemnity obligation at the expense of RMUSA.
6.8 RMUSA Environmental Indemnity. RMUSA, in addition to its other
indemnity obligations otherwise provided in this Agreement, agrees to indemnify
and hold harmless Company and its officers, shareholders, members, managers,
directors, employees, agents, successors, and assigns (the "RMUSA Environmental
Indemnitees"), against and in respect of, any and all damages, claims, losses,
liabilities, and expenses (including without limitation, reasonable legal,
accounting, consulting, engineering and other expenses) that may be incurred by
any of the RMUSA Environmental Indemnitees, or assessed against any of the RMUSA
Environmental Indemnitees by any other party or parties (including, without
limitation, a governmental entity) arising out of, in connection with, or
relating to the subject matter of: (1) the breach or inaccuracy of any of the
representations and warranties set forth in Section 8.7; (2) any RMUSA
Environmental Condition which exists as of the Contribution Date, even if not
discovered until after the Contribution Date, including, without limitation,
remediation of such condition and loss of life, injury to persons or property,
or damage to natural resources arising from such condition; (3) any violation of
an Environmental Law prior to the Contribution Date which relates to the RMUSA
Real Property or the RMUSA Business; or (4) the off-site transportation,
storage, disposal, treatment or recycling of Hazardous Materials generated by or
on behalf of the RMUSA Business on or prior to the Contribution Date, including,
without limitation, any claims related to remediation of such Hazardous
Materials and loss of life, injury to persons or property, or damage to natural
resources arising from such Hazardous Materials. Such damages, claims, losses,
liabilities, and expenses may sometimes be referred to herein as "RMUSA
Environmental Liabilities." This indemnity shall survive the Contribution Date
only for a period of five (5) years after the Contribution Date. Any testing or
investigation which Cemex or Company deems reasonably necessary in order to
determine whether any environmental indemnity obligations of RMUSA exist
hereunder may be conducted at any time prior to the termination of this
indemnity obligation at the expense of Cemex.
6.9 Bulk Transfer Laws. Without admitting applicability of the bulk
transfer laws of any jurisdiction, RMUSA, Cemex and Company have agreed to waive
compliance by each of RMUSA and Cemex with the laws of any jurisdiction relating
to bulk transfers which may be applicable in connection with the transfer of the
RMUSA Assets or the Cemex Assets to Company. Each of RMUSA and Cemex shall
defend, indemnify and hold harmless Company from and against any liabilities
incurred as a result of its noncompliance with any applicable bulk transfer
laws.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES BY CEMEX
---------------------------------------
Cemex hereby represents and warrants to Company that, except as set
forth in the disclosure schedule being delivered by Cemex contemporaneously
herewith (the "Cemex Disclosure Schedule"):
7.1 Existence and Authorization for Agreement; Enforceability. Cemex is
a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Delaware, and has the requisite power
and authority to own, lease, and operate its properties and carry on and operate
its business as and where such business is now being conducted. Each of the
Affiliates of Cemex which are contributing Cemex Assets or Cemex Business at the
direction of or for the benefit of Cemex is an entity duly organized, validly
existing and in good standing under the laws of the State of its organization,
and has the requisite power and authority to own, lease, and operate the Cemex
Assets and the Cemex Business that it is contributing to Company. Each of the
Affiliates of Cemex which are contributing Cemex Assets or Cemex Business to
Company has been duly authorized to do so, and has taken all necessary actions
to transfer such Cemex Assets or Cemex Business to Company. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
herein, have been duly authorized by the Board of Directors of Cemex. Cemex has
taken all actions necessary to authorize it to enter into and perform fully its
obligations under this Agreement and all of the documents or instruments
otherwise contemplated herein and to consummate the transactions contemplated
herein and therein. Each of this Agreement and the other closing documents
delivered pursuant hereto has been duly executed and delivered by Cemex and is
the legal, valid and binding obligation of Cemex enforceable in accordance with
its respective terms, subject to applicable bankruptcy, insolvency and similar
laws affecting creditors' rights generally and to the general principles of
equity.
7.2 Title to and Sufficiency of Cemex Assets.
(a) Cemex or the Cemex Affiliate that contributes the Cemex
Assets, as the case may be, has good and marketable title to the Cemex Assets.
Except for (i) the Cemex Assumed Liabilities, and (ii) Permitted Encumbrances,
none of the Cemex Assets shall, at the Contribution Date, be subject to any
Lien.
(b) The Cemex Assets, in conjunction with the rights, goods
and services granted, transferred or to be performed by Cemex and its Affiliates
and subsidiaries pursuant to this Agreement, constitute all of the property,
real and personal, tangible and intangible, necessary for the conduct of the
Cemex Business as it is presently being conducted by Cemex or its Affiliates in
all material respects.
7.3 Taxes. Cemex will pay and satisfy, or cause to be paid and
satisfied, all property and excise and other tax obligations, penalties and
interest, imposed by any governmental entity either (i) in connection with the
Cemex Business or the Cemex Assets arising prior to the Contribution Date, and
in connection with the transactions contemplated by this Agreement, including,
but not limited to, all United States, foreign, state, provincial, county and
local income, ad valorem, excise, sales, use, withholding, unemployment, social
security or other taxes and assessments of or payable by Cemex and arising prior
to the Contribution Date, or (ii) otherwise chargeable against the Cemex
Business or the Cemex Assets, and arising prior to Contribution Date. Anything
in this Agreement to the contrary notwithstanding, the Company shall pay all
recording and filing fees and taxes, sales taxes, gross receipt taxes, tag fees
and similar expenses applicable to the transfer of the Cemex Assets from Cemex
to the Company, including but not limited to any recording or filing fees or
taxes associated with the transfer of the Cemex Real Property and any sales,
gross receipt, and tag fees or taxes associated with transferring the titles to
any vehicles. All taxes attributable to the activities of the Cemex Business and
the ownership and operation of the Cemex Assets prior to the Contribution Date
shall be the responsibility of Cemex.
7.4 Litigation. There is no claim, legal action, suit, arbitration,
governmental investigation or other legal or administrative proceeding, nor any
order, decree or judgment in progress, pending or in effect, or, to the
Knowledge of Cemex, threatened, against or relating to Cemex or any of its
Affiliates, or any of their respective directors, officers, shareholders,
employees, or properties in each case, with respect to the Cemex Assets or the
Cemex Business which would reasonably be expected to have a material adverse
effect on, the Cemex Assets, the Cemex Business or the transactions contemplated
by this Agreement.
7.5 Contracts; and Other Agreements.
(a) Section 7.5 of the Cemex Disclosure Schedule sets forth a
list of the Material Cemex Contracts primarily relating to the Cemex Business or
the Cemex Assets as of the date of this Agreement. Cemex has made available to
each of the Company and RMUSA a true and complete copy of each Material Cemex
Contract listed on Section 7.5 of the Cemex Disclosure Schedule. For purposes
hereof, "Material Cemex Contract" shall mean:
(i) agreements, contracts, licenses, leases of real
or personal property, indentures, mortgages, instruments, security
interests, purchase and sale orders and other similar arrangements,
commitments or understandings in each case, whether written or oral
("Contracts"), for the future acquisition or sale of any assets
involving $250,000 individually (or in the aggregate, in the case of
any related series of Contracts), other than the acquisition or sale of
inventory in the ordinary course of business;
(ii) Contracts calling for future payments to or from
Cemex or any of its Affiliates in any one year of more than $250,000 in
any one case (or in the aggregate, in the case of any related series of
Contracts), or involving the payment or receipt of $1,000,000 or more
over the lifetime of such agreements;
(iii) Contracts that contain covenants prohibiting or
limiting the right to compete of the Cemex Business or prohibiting or
restricting the ability of the owner of the Cemex Business (or any of
its Affiliates) to deal with any Person or in any geographical area;
(iv) Contracts that require the payment by or to
Cemex or any Affiliate of Cemex of a royalty, override or similar
commission or fee of more than $1,000,000 in the aggregate;
(v) Contracts that are collective bargaining
agreements;
(vi) guaranties and any outstanding Contracts and
instruments relating to the borrowing of money, or any extension of
credit, which impose any Lien on any of the Cemex Assets;
(vii) Contracts involving sales agency,
manufacturing, consignment, sales representative, distributorship or
marketing;
(viii) Contracts for the license to or from Cemex or
any Affiliate of Cemex to or from, as the case may be, any third party
(including to another Affiliate) of any (x) Cemex Intangible Property
or (y) intellectual property rights that are owned by any such third
party and, in each case that primarily relate to or are material to the
Cemex Business, except for contracts for the license of software that
is commercially available "off the shelf";
(ix) Contracts for the construction or acquisition of
fixed assets or other capital expenditures requiring the payment by
Cemex of more than $1,000,000 in the aggregate;
(x) Contracts that are broker's or finder's
agreements;
(xi) Contracts relating to partnerships, joint
ventures or other arrangements involving a sharing of profits or
expenses;
(xii) Contracts to sell, lease or otherwise dispose
of any Cemex Asset, in each case other than in the ordinary course of
business;
(xiii) except for collective bargaining agreements
(which are listed in subparagraph (v) above), Contracts relating to
employment or termination or severance benefits or arrangements;
(xiv) Contracts relating to the leasing of or other
arrangement for use of real property or material personal property;
(xv) Contracts that include any obligation to make
payments, contingent or otherwise, arising out of the prior acquisition
or disposition of a business;
(xvi) Contracts which, upon the consummation of the
transactions contemplated by this Agreement, will (either alone or upon
the occurrence of any additional acts or events) result in any payment
or benefits (whether of severance pay or otherwise) becoming due, or
the acceleration or vesting of any rights to any payment or benefits,
from Company, Cemex or any of their respective Affiliates to any
officer, director, consultant or employee thereof; and
(xvii) Contracts entered into outside of the ordinary
course of business or which are material to the Cemex Business.
(b) With respect to each Material Cemex Contract, (i) each
such Contract is a valid and binding agreement of Cemex or its Affiliates and is
in full force and effect in all material respects, (ii) Cemex has no Knowledge
of any material default by any third party under any such Contract which default
has not been cured or waived and which default by any third party would
reasonably be expected to result in a material adverse effect on (i) the Cemex
Assets or the business, financial condition or results of operations of the
Cemex Business, taken as a whole, or (ii) on the ability of Cemex and its
Affiliates to consummate the transactions contemplated hereby or perform any of
their obligations hereunder (a "Cemex Material Adverse Effect") and (iii) there
is no material default by Cemex or its Affiliates under any such Contract which
default has not been cured or waived and which default would reasonably be
expected to result in a Cemex Material Adverse Effect.
7.6 Compliance with Laws. The Cemex Business is presently complying in
all material respects with all applicable Laws and Judgments, except for such
failures to comply which, individually or in the aggregate, would not reasonably
be expected to result in a Cemex Material Adverse Effect. The Cemex Business and
Cemex and its Affiliates have all Permits necessary for the conduct of the Cemex
Business as currently conducted, other than those the absence of which,
individually or in the aggregate, would not reasonably be expected to result in
a Cemex Material Adverse Effect, and there are no Proceedings pending, or to the
Knowledge of Cemex, threatened which may result in the revocation, termination,
cancellation or suspension of any such Permit except those that, individually or
in the aggregate, would not reasonably be expected to result in a Cemex Material
Adverse Effect; it being understood that nothing in this Section 7.6 is intended
to address any failure to comply with any Law, Judgment or Permit (including
Environmental Laws or environmentally-related Judgments or Permits) that is the
subject of any other representation or warranty set forth herein. All of the
Cemex Permits are listed in Section 7.6 of the Cemex Disclosure Schedule,
together with any information relative to any requirements applicable to the
assignability of the same.
7.7 Environmental:
(a) Definitions. For the purpose of this Agreement, the
following words and phrases shall have the following meanings:
"Cemex Environmental Condition" shall mean any condition of the
Environment with respect to the Cemex Real Property or property located in the
vicinity of the Cemex Real Property that results from the ownership, possession,
use, occupation, construction and/or improvement to or operation of the Cemex
Business on the Cemex Real Property, that (i) exists as of the Contribution
Date, and (ii) is in violation of applicable Environmental Law as of the
Contribution Date or involves concentrations of Hazardous Materials in soils,
surface waters, groundwater, land, stream sediments, or surface or subsurface
strata that are in excess of applicable remediation standards or guidelines, in
effect as of the Contribution Date, that are applicable in the jurisdiction in
which the relevant real property is located.
For purposes of this Section 7.7 only, the term "Cemex Real Property"
shall mean the Cemex Real Property as referred to in Schedule 1.2(a)-1 and any
leased real property upon which a Cemex Business Location is operated.
(b) Environmental Representations, Warranties, and
Obligations. With reference to the Cemex Real Property and the Cemex Business,
Cemex represents and warrants that, to the Knowledge of Cemex, Cemex and its
Affiliates are presently in substantial compliance with all Environmental Laws
applicable to the Cemex Real Property and the Cemex Business, and no Cemex
Environmental Conditions exist that are material, whether individually or in the
aggregate.
7.8 No Violations. The execution, delivery and performance by Cemex of
this Agreement and each of the other documents or agreements to which it is or
will be a party pursuant hereto, and the consummation by Cemex and its
Affiliates of the transactions contemplated by this Agreement and such other
documents and agreements, do not and will not (i) violate any provision of the
certificate of formation or limited liability company agreement of Cemex or the
articles of incorporation, by-laws or similar governing documents of any of its
Affiliates or subsidiaries, or (ii) (x) violate any Law, Permit or Judgment
applicable to Cemex or any of its Affiliates or subsidiaries, or any of their
respective properties or assets, or (y) subject to obtaining the Consents set
forth in Section 7.8 of the Cemex Disclosure Schedule (the "Cemex Required
Contractual Consents"), violate, conflict with, result in a breach of any
provision of or the loss of any benefit under, constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a default) under,
result in the termination of or a right of termination or cancellation under,
accelerate the performance required by, or result in the creation of any Lien
upon any of the respective properties or assets of Cemex or any of its
Affiliates under, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which Cemex or any of its Affiliates is a party, or
by which they or any of their respective properties or assets may be bound or
affected, except (in the case of clause (y) above) for such violations,
conflicts, breaches or defaults which, either individually or in the aggregate,
will not have and would not be reasonably likely to have a Cemex Material
Adverse Effect.
7.9 Consents. No consent is required to be obtained by Cemex (or by any
Affiliate) from, and no notice or filing is required to be given by Cemex (or by
any Affiliate) to or made by Cemex (or by any Affiliate) with, any Governmental
Authority in connection with the execution, delivery and performance by Cemex of
this Agreement, other than in all cases where the failure to obtain such Consent
or to give or make such notice or filing would not, individually or in the
aggregate, reasonably be expected to result in a Cemex Material Adverse Effect.
7.10 Financial Information. True and complete copies of the Cemex
Financial Statements are included in the Cemex Disclosure Schedule. The Cemex
Financial Statements have been prepared from, are in accordance with and
accurately reflect the books and records of the Cemex Business, comply in all
material respects with applicable accounting requirements, fairly present, in
all material respects, the results of operations of the Cemex Business for the
respective periods indicated, and were prepared in accordance with GAAP applied
consistently during such periods, except as set forth in the footnotes thereto,
and except that the Interim Cemex Financial Statements are subject to normal
year-end adjustments and do not contain all of the footnote disclosure required
by GAAP.
7.11 Absence of Changes.
(a) Since August 31, 2004, (i) the Cemex Business has been
operated in the ordinary course in a manner consistent with past practice and
(ii) there has not been a change, event, development or circumstance that has
had or would reasonably be expected to have a Cemex Material Adverse Effect, but
for purposes of this Section 7.11(a), with respect to clause (i) of the
definition of Cemex Material Adverse Effect shall exclude any change or
development involving (w) a prospective change arising out of any proposed or
adopted legislation, or any other proposal or enactment by any governmental,
regulatory or administrative authority, (x) general conditions applicable to the
economy of the United States, including changes in interest rates, (y)
conditions or effects resulting from the announcement of the existence and terms
of this Agreement, or (z) conditions or factors affecting the industry in the
United States in which the Cemex Business operates, taken as a whole; provided,
with respect to clauses (w) or (x) above, that such change, event, development
or circumstance does not affect the Cemex Business to a materially greater
extent than other participants in the industry in the United States in which the
Cemex Business operates generally.
(b) Without limiting the foregoing, since August 31, 2004,
neither Cemex nor any of its Affiliates has with respect to the Cemex Business:
(i) granted or committed to grant any bonus,
commission, or other form of incentive compensation or increased or
committed to increase the compensation, fees or pension, welfare,
fringe or other benefits provided or payable to or in respect of any
employees of the Cemex Business, except for customary bonuses and
regular salary increases made in the ordinary course of business,
consistent with past practices, or granted any severance or termination
pay;
(ii) except in the ordinary course, written off any
accounts receivable without adequate consideration;
(iii) made any material change in any method of
accounting (for book or Tax purposes) or accounting practice;
(iv) purchased or otherwise acquired, or sold,
leased, transferred or otherwise disposed of any material properties or
material assets of the Cemex Business, except in the ordinary course of
business, consistent with past practices;
(v) entered into any leases with respect to the Cemex
Real Property;
(vi) terminated or amended any Material Cemex
Contract;
(vii) entered into, terminated or amended any
Contracts or other agreements with respect to intellectual property
rights, except in the ordinary course of business ;
(viii) suffered any material damage or material loss
to the assets of the Cemex Business;
(ix) permitted or suffered any material Lien on any
Cemex Asset, other than Permitted Encumbrances;
(x) commenced or initiated any lawsuit, action or
proceeding with respect to the Cemex Business or Cemex Assets, except
in the ordinary course of business;
(xi) incurred any indebtedness, material liability or
obligation (whether absolute, accrued, contingent or otherwise) with
respect to the Cemex Business, except in the ordinary course of
business, consistent with past practices;
(xii) waived, abandoned or otherwise disposed of any
material rights in or to any intangible property related to the Cemex
Business; or
(xiii) agreed (whether or not in writing) to do any
of the foregoing.
7.12 Transactions with Affiliates. No Affiliate of Cemex is an
employee, consultant, competitor, customer, distributor, supplier or vendor of,
or is party to any contractual obligations with Cemex relating to the Cemex
Business and no officer or director of Cemex is an Affiliate of any competitor,
customer, distributor, supplier or vendor of the Cemex Business. None of the
Cemex Assets are owned by an Affiliate of Cemex or subject to any license or
similar arrangement allowing use thereof by an Affiliate.
7.13 Condition of Cemex Assets. To Cemex's Knowledge, there are no
defects in or concerning the buildings, equipment or the tangible personal
property occupied, operated or owned by Cemex or its Affiliates as a part of the
Cemex Business which, individually or in the aggregate, would reasonably be
expected to result in a Cemex Material Adverse Effect. All of the Cemex Assets
are in good operating condition and repair, ordinary wear and tear excepted, and
are suitable for the uses for which such Cemex Assets were intended. Except as
expressly set forth in this Agreement, (i) Cemex expressly disclaims any other
representation and warranty of any kind or nature, express or implied, as to the
condition, value or quality of the Cemex Assets and (ii) Cemex specifically
disclaims any representation or warranty of merchantability, usage or fitness
for any particular purpose with respect to any of the Cemex Assets.
7.14 Real Property Matters. (A) Cemex and its Affiliates are not
currently in default under any agreement, order, judgment or decree relating to
the Cemex Real Property, and no conditions or circumstances exist which, with
the giving of notice or passage of time or both, would constitute a default or
breach with respect to any such agreement, order, judgment or decree, (B) Cemex
and its Affiliates have paid all Taxes due and owing which if not paid could
result in a Lien on the Cemex Real Property or impose liability on Company, (C)
Neither Cemex nor its Affiliates have received any written notice of any
proposed special assessment which would affect the Cemex Real Property, (D)
Neither Cemex nor its Affiliates have received any written notice of any claims,
causes of action, lawsuits or legal proceedings pending or threatened regarding
the ownership, use or possession of the Cemex Real Property, including
condemnation or similar proceedings, (E) Neither Cemex nor its Affiliates have
received any written notice of any violation of any zoning, subdivision,
platting, building, fire or insurance laws, ordinances or regulations (whether
related to the Cemex Real Property or the occupancy thereof) to the extent not
previously cured, including the failure of Cemex to comply with all covenants,
easements and restrictions recorded against the Cemex Real Property, (F) Cemex
and its Affiliates have not received any written notice of any intention on the
part of the issuing authority to cancel, suspend or modify any licenses or
permits relating to the Cemex Real Property, (G) Cemex and its Affiliates are in
material compliance with all recorded covenants, easements and restrictions
affecting the Cemex Real Property, and (H) each of the Cemex Leases is in full
force and effect and has not been modified, amended, added to, or changed in any
manner whatsoever except for those amendments attached to a Cemex Lease
Assignment.
7.15 Brokers and Finders. There is no investment banker, broker, finder
or other intermediary which has been retained by or is authorized to act on
behalf of Cemex or any Affiliate of Cemex who might be entitled to any fee or
commission from Cemex or any Affiliate of Cemex in connection with the
transactions contemplated by this Agreement.
7.16 Labor Matters. With respect to the Cemex Business, since January
1, 2000, there has not occurred or been threatened any material employee strike,
work stoppage, slowdown, lockout, picketing or concerted refusal to work
overtime at a Cemex Business Location and there are no labor disputes currently
subject to any arbitration or administrative proceeding involving employees of
Cemex or its Affiliates who are involved in the Cemex Business (excluding
routine workers' compensation claims).
7.17 Inventory. The Cemex Inventory, whether finished goods, work in
process or raw materials, consist of a quality and quantity usable and saleable
in the ordinary and usual course of the Cemex Business consistent with past
practice.
7.18 Employee Benefit Plans; ERISA. None of Cemex or its ERISA
Affiliates has incurred any liability under, arising out of or by operation of
Title IV of ERISA (other than for payment of premiums to the Pension Benefit
Guaranty Corporation in the ordinary course of business), and no fact or event
exists which would reasonably be expected to give rise to any such liability
that would reasonably be expected to result in a Lien on the Cemex Assets or a
liability of the Company. The employee benefit plans, programs and arrangements
applicable to the Cemex Transferred Employees have been administered in
accordance with their terms and applicable law, including ERISA and the Code, in
all material respects.
7.19 No Liabilities. There are no liabilities or obligations, secured
or unsecured, known or unknown (whether accrued, absolute, contingent or
otherwise) of Cemex or its Affiliates which in any way relate to or encumber the
Cemex Assets or the Cemex Business, except for (a) those reflected or reserved
on the Cemex Financial Statements, (b) those trade payables and contractual
obligations incurred or accrued in the ordinary and normal course of the Cemex
Business and consistent with past practice since August 31, 2004, none of which,
individually or in the aggregate, is material, and none of which is for breach
of warranty or contract or for tort infringement, (c) those under the Cemex
Assumed Contracts, (d) those under the Cemex Permits, (e) Environmental
Liabilities, and (f) any taxes accruing in the ordinary course of the Cemex
Business, none of such taxes being the responsibility or obligation of Company
(other than those ad valorem taxes which will be prorated as of the Contribution
Date).
ARTICLE 8
REPRESENTATIONS AND WARRANTIES BY RMUSA
---------------------------------------
RMUSA hereby represents and warrants to Company that, except as set
forth in the disclosure schedule being delivered by RMUSA contemporaneously
herewith (the "RMUSA Disclosure Schedule"):
8.1 Existence and Authorization for Agreement; Enforceability. RMUSA is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Alabama, and has the requisite power and authority to own,
lease, and operate its properties and carry on and operate the RMUSA Business as
and where the RMUSA Business is now being conducted. The execution and delivery
of this Agreement, and the consummation of the transactions contemplated herein,
have been duly authorized by the Board of Directors of RMUSA. RMUSA has taken
all actions necessary to authorize it to enter into and perform fully its
obligations under this Agreement and all of the documents or instruments
otherwise contemplated herein and to consummate the transactions contemplated
herein and therein. Each of this Agreement and the other closing documents
delivered pursuant hereto has been duly executed and delivered by RMUSA and is
the legal, valid and binding obligation of RMUSA enforceable in accordance with
its respective terms, subject to applicable bankruptcy, insolvency and similar
laws affecting creditors' rights generally and to the general principles of
equity.
8.2 Title to and Sufficiency of RMUSA Assets.
(a) RMUSA has good and marketable title to the RMUSA Assets.
Except for (i) the RMUSA Assumed Liabilities, and (ii) Permitted Encumbrances,
none of the RMUSA Assets shall, at the Contribution Date, be subject to any
Lien.
(b) The RMUSA Assets, in conjunction with the rights, goods
and services granted, transferred or to be performed by RMUSA and its
subsidiaries pursuant to this Agreement and the RMUSA Ancillary Agreements,
constitute all the property, real and personal, tangible and intangible,
necessary for the conduct of the RMUSA Business as it is presently being
conducted by RMUSA in all material respects.
8.3 Taxes. RMUSA will pay and satisfy, or cause to be paid and
satisfied, all property and excise and other tax obligations, penalties and
interest, imposed by any governmental entity either (i) in connection with the
RMUSA Business or the RMUSA Assets arising prior to the Contribution Date, and
in connection with the transactions contemplated by this Agreement, including,
but not limited to, all United States, foreign, state, provincial, county and
local income, ad valorem, excise, sales, use, withholding, unemployment, social
security or other taxes and assessments of or payable by RMUSA and arising prior
to the Contribution Date, or (ii) otherwise chargeable against the RMUSA
Business or the RMUSA Assets, and arising prior to Contribution Date. Anything
in this Agreement to the contrary notwithstanding, the Company shall pay all
recording and filing fees and taxes, sales taxes, gross receipt taxes, tag fees
and similar expenses applicable to the transfer of the RMUSA Assets from RMUSA
to the Company, including but not limited to any recording or filing fees or
taxes associated with the transfer of the RMUSA Real Property and any sales,
gross receipt, and tag fees or taxes associated with transferring the titles to
any vehicles. All taxes attributable to the activities of the RMUSA Business and
the ownership and operation of the RMUSA Assets prior to the Contribution Date
shall be the responsibility of RMUSA.
8.4 Litigation. There is no claim, legal action, suit, arbitration,
governmental investigation or other legal or administrative proceeding, nor any
order, decree or judgment in progress, pending or in effect, or, to the
Knowledge of RMUSA, threatened, against or relating to RMUSA or any of its
Affiliates, or any of their respective directors, officers, shareholders,
employees, or properties in each case, with respect to the RMUSA Assets or the
RMUSA Business, which would reasonably be expected to have a material adverse
effect on, the RMUSA Assets, the RMUSA Business or the transactions contemplated
by this Agreement.
8.5 Contracts; and Other Agreements.
(a) Section 8.5 of the RMUSA Disclosure Schedule sets forth a
list of the Material RMUSA Contracts primarily relating to the RMUSA Business or
the RMUSA Assets as of the date of this Agreement. RMUSA has made available to
each of the Company and Cemex a true and complete copy of each Material RMUSA
Contract listed on Section 8.5 of the RMUSA Disclosure Schedule. For purposes
hereof, "Material RMUSA Contract" shall mean:
(i) Contracts for the future acquisition or sale of
any assets involving $250,000 individually (or in the aggregate, in the
case of any related series of Contracts), other than the acquisition or
sale of inventory in the ordinary course of business;
(ii) Contracts calling for future payments to or from
RMUSA or any of its Affiliates in any one year of more than $250,000 in
any one case (or in the aggregate, in the case of any related series of
Contracts), or involving the payment or receipt of $1,000,000 or more
over the lifetime of such agreements;
(iii) Contracts that contain covenants prohibiting or
limiting the right to compete of the RMUSA Business or prohibiting or
restricting the ability of the owner of the RMUSA Business (or any of
its Affiliates) to deal with any Person or in any geographical area;
(iv) Contracts that require the payment by or to
RMUSA or any Affiliate of RMUSA of a royalty, override or similar
commission or fee of more than $1,000,000 in the aggregate;
(v) Contracts that are collective bargaining
agreements;
(vi) guaranties and any outstanding Contracts and
instruments relating to the borrowing of money, or any extension of
credit, which impose any Lien on any of the RMUSA Assets;
(vii) Contracts involving sales agency,
manufacturing, consignment, sales representative, distributorship or
marketing;
(viii) Contracts for the license to or from RMUSA or
any Affiliate of RMUSA to or from, as the case may be, any third party
(including to another Affiliate) of any (x) RMUSA Intangible Property
or (y) intellectual property rights that are owned by any such third
party and, in each case that primarily relate to or are material to the
RMUSA Business, except for contracts for the license of software that
is commercially available "off the shelf";
(ix) Contracts for the construction or acquisition of
fixed assets or other capital expenditures requiring the payment by
RMUSA of more than $1,000,000 in the aggregate;
(x) Contracts that are broker's or finder's
agreements;
(xi) Contracts relating to partnerships, joint
ventures or other arrangements involving a sharing of profits or
expenses;
(xii) Contracts to sell, lease or otherwise dispose
of any RMUSA Asset, in each case other than in the ordinary course of
business;
(xiii) except for collective bargaining agreements
(which are listed in subparagraph (v) above), Contracts relating to
employment or termination or severance benefits or arrangements;
(xiv) Contracts relating to the leasing of or other
arrangement for use of real property or material personal property;
(xv) Contracts that include any obligation to make
payments, contingent or otherwise, arising out of the prior acquisition
or disposition of a business;
(xvi) Contracts which, upon the consummation of the
transactions contemplated by this Agreement, will (either alone or upon
the occurrence of any additional acts or events) result in any payment
or benefits (whether of severance pay or otherwise) becoming due, or
the acceleration or vesting of any rights to any payment or benefits,
from Company, RMUSA or any of their respective Affiliates to any
officer, director, consultant or employee thereof; and
(xvii) Contracts entered into outside of the ordinary
course of business or which are material to the RMUSA Business.
(b) With respect to each Material RMUSA Contract, (i) each
such Contract is a valid and binding agreement of RMUSA and is in full force and
effect in all material respects, (ii) RMUSA has no Knowledge of any material
default by any third party under any such Contract which default has not been
cured or waived and which default by any third party would reasonably be
expected to result in a material adverse effect on (i) the RMUSA Assets or the
business, financial condition or results of operations of the RMUSA Business,
taken as a whole, or (ii) on the ability of RMUSA and its Affiliates to
consummate the transactions contemplated hereby or perform any of their
obligations hereunder (a "RMUSA Material Adverse Effect") and (iii) there is no
material default by RMUSA under any such Contract which default has not been
cured or waived and which default would reasonably be expected to result in a
RMUSA Material Adverse Effect.
8.6 Compliance with Laws. The RMUSA Business is presently complying in
all material respects with all applicable Laws and Judgments, except for such
failures to comply which, individually or in the aggregate, would not reasonably
be expected to result in a RMUSA Material Adverse Effect. The RMUSA Business or
RMUSA has all Permits necessary for the conduct of the RMUSA Business as
currently conducted, other than those the absence of which, individually or in
the aggregate, would not reasonably be expected to result in a RMUSA Material
Adverse Effect, and there are no Proceedings pending, or to the knowledge of
RMUSA, threatened which may result in the revocation, termination, cancellation
or suspension of any such Permit except those that, individually or in the
aggregate, would not reasonably be expected to result in a RMUSA Material
Adverse Effect; it being understood that nothing in this Section 8.6 is intended
to address any failure to comply with any Law, Judgment or Permit (including
Environmental Laws or environmentally-related Judgments or Permits) that is the
subject of any other representation or warranty set forth herein. All of the
RMUSA Permits are listed in Section 8.6 of the RMUSA Disclosure Schedule,
together with any information relative to any requirements applicable to the
assignability of the same.
8.7 Environmental:
(a) Definitions. For the purpose of this Agreement, the
following words and phrases shall have the following meanings:
"RMUSA Environmental Condition" shall mean any condition of the
Environment with respect to the RMUSA Real Property or property located in the
vicinity of the RMUSA Real Property that results from the ownership, possession,
use, occupation, construction and/or improvement to or operation of the RMUSA
Business on the RMUSA Real Property, that (i) exists as of the Contribution
Date, and (ii) is in violation of applicable Environmental Law as of the
Contribution Date or involves concentrations of Hazardous Materials in soils,
surface waters, groundwater, land, stream sediments, or surface or subsurface
strata that are in excess of applicable remediation standards or guidelines, in
effect as of the Contribution Date, that are applicable in the jurisdiction in
which the relevant real property is located.
For purposes of this Section 8.7 only, the term "RMUSA Real Property"
shall mean the RMUSA Real Property as referred to in Schedule 1.1(a)-1 and any
leased real property upon which the RMUSA Business Locations are operated.
(b) Environmental Representations, Warranties, and
Obligations. With reference to the RMUSA Real Property and the RMUSA Business,
RMUSA represents and warrants that, to the Knowledge of RMUSA, RMUSA is
presently in substantial compliance with all Environmental Laws applicable to
the RMUSA Real Property and the RMUSA Business, and no RMUSA Environmental
Conditions exist that are material, whether individually or in the aggregate.
8.8 No Violations. The execution, delivery and performance by RMUSA of
this Agreement and each of the other documents or agreements to which it is or
will be a party pursuant hereto, and the consummation by RMUSA of the
transactions contemplated by this Agreement and such other documents and
agreements, do not and will not (i) violate any provision of the articles of
incorporation or bylaws of RMUSA or the articles of incorporation, by-laws or
similar governing documents of any of its subsidiaries, or (ii) (x) violate any
Law, Permit or Judgment applicable to RMUSA or any of its subsidiaries, or any
of their respective properties or assets, or (y) subject to obtaining the
Consents set forth in Section 8.8 of the RMUSA Disclosure Schedule (the "RMUSA
Required Contractual Consents"), violate, conflict with, result in a breach of
any provision of or the loss of any benefit under, constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a default)
under, result in the termination of or a right of termination or cancellation
under, accelerate the performance required by, or result in the creation of any
Lien upon any of the respective properties or assets of RMUSA or any of its
Affiliates under, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which RMUSA or any of its Affiliates is a party, or
by which they or any of their respective properties or assets may be bound or
affected, except (in the case of clause (y) above) for such violations,
conflicts, breaches or defaults which, either individually or in the aggregate,
will not have and would not be reasonably likely to have a RMUSA Material
Adverse Effect.
8.9 Consents. No consent is required to be obtained by RMUSA (or by any
Affiliate) from, and no notice or filing is required to be given by RMUSA (or by
any Affiliate) to or made by RMUSA (or by any Affiliate) with, any Governmental
Authority in connection with the execution, delivery and performance by RMUSA of
this Agreement and each of the RMUSA Ancillary Agreements to which it is a
party, other than in all cases where the failure to obtain such Consent or to
give or make such notice or filing would not, individually or in the aggregate,
reasonably be expected to result in a RMUSA Material Adverse Effect.
8.10 Financial Information. True and complete copies of the RMUSA
Financial Statements are included in the RMUSA Disclosure Schedule. The RMUSA
Financial Statements have been prepared from, are in accordance with and
accurately reflect the books and records of the RMUSA Business, comply in all
material respects with applicable accounting requirements, fairly present, in
all material respects, the results of operations of the RMUSA Business for the
respective periods indicated, and were prepared in accordance with GAAP applied
consistently during such periods, except as set forth in the footnotes thereto,
and except that the Interim RMUSA Financial Statements are subject to normal
year-end adjustments and do not contain all of the footnote disclosure required
by GAAP.
8.11 Absence of Changes.
(a) Since August 31, 2004, (i) the RMUSA Business has been
operated in the ordinary course in a manner consistent with past practice and
(ii) there has not been a change, event, development or circumstance that has
had or would reasonably be expected to have a RMUSA Material Adverse Effect, but
for purposes of this Section 8.11(a), with respect to clause (i) of the
definition of RMUSA Material Adverse Effect shall exclude any change or
development involving (w) a prospective change arising out of any proposed or
adopted legislation, or any other proposal or enactment by any governmental,
regulatory or administrative authority, (x) general conditions applicable to the
economy of the United States, including changes in interest rates, (y)
conditions or effects resulting from the announcement of the existence and terms
of this Agreement, or (z) conditions or factors affecting the industry in the
United States in which the RMUSA Business operates, taken as a whole; provided,
with respect to clauses (w) or (x) above, that such change, event, development
or circumstance does not affect the RMUSA Business to a materially greater
extent than other participants in the industry in the United States in which the
RMUSA Business operates generally.
(b) Without limiting the foregoing, since August 31, 2004,
neither RMUSA nor any of its Affiliates has with respect to the RMUSA Business:
(i) granted or committed to grant any bonus,
commission, or other form of incentive compensation or increased or
committed to increase the compensation, fees or pension, welfare,
fringe or other benefits provided or payable to or in respect of any
employees of the RMUSA Business, except for customary bonuses and
regular salary increases made in the ordinary course of business,
consistent with past practices, or granted any severance or termination
pay;
(ii) except in the ordinary course, written off any
accounts receivable without adequate consideration;
(iii) made any material change in any method of
accounting (for book or Tax purposes) or accounting practice;
(iv) purchased or otherwise acquired, or sold,
leased, transferred or otherwise disposed of any material properties or
material assets of the RMUSA Business, except in the ordinary course of
business, consistent with past practices;
(v) entered into any leases with respect to the RMUSA
Real Property;
(vi) terminated or amended any Material RMUSA
Contract;
(vii) entered into, terminated or amended any
Contracts or other agreements with respect to intellectual property
rights, except in the ordinary course of business;
(viii) suffered any material damage or material loss
to the assets of the RMUSA Business;
(ix) permitted or suffered any material Lien on any
RMUSA Asset, other than Permitted Encumbrances;
(x) commenced or initiated any lawsuit, action or
proceeding with respect to the RMUSA Business or RMUSA Assets, except
in the ordinary course of business;
(xi) incurred any indebtedness, material liability or
obligation (whether absolute, accrued, contingent or otherwise) with
respect to the RMUSA Business, except in the ordinary course of
business, consistent with past practices;
(xii) waived, abandoned or otherwise disposed of any
material rights in or to any intangible property related to the RMUSA
Business; or
(xiii) agreed (whether or not in writing) to do any
of the foregoing.
8.12 Transactions with Affiliates. No Affiliate of RMUSA is an
employee, consultant, competitor, customer, distributor, supplier or vendor of,
or is party to any contractual obligations with RMUSA relating to the RMUSA
Business and no officer or director of RMUSA is an Affiliate of any competitor,
customer, distributor, supplier or vendor of the RMUSA Business. None of the
RMUSA Assets are owned by an Affiliate of RMUSA or subject to any license or
similar arrangement allowing use thereof by an Affiliate.
8.13 Condition of RMUSA Assets. To RMUSA's Knowledge, there are no
defects in or concerning the buildings, equipment or the tangible personal
property occupied, operated or owned by RMUSA as a part of the RMUSA Business
which, individually or in the aggregate, would reasonably be expected to result
in a RMUSA Material Adverse Effect. All of the RMUSA Assets are in good
operating condition and repair, ordinary wear and tear excepted, and are
suitable for the uses for which such RMUSA Assets were intended. Except as
expressly set forth in this Agreement, (i) RMUSA expressly disclaims any other
representation and warranty of any kind or nature, express or implied, as to the
condition, value or quality of the RMUSA Assets and (ii) RMUSA specifically
disclaims any representation or warranty of merchantability, usage or fitness
for any particular purpose with respect to any of the RMUSA Assets.
8.14 Real Property Matters. (A) RMUSA is not currently in default under
any agreement, order, judgment or decree relating to the RMUSA Real Property,
and no conditions or circumstances exist which, with the giving of notice or
passage of time or both, would constitute a default or breach with respect to
any such agreement, order, judgment or decree, (B) RMUSA has paid all Taxes due
and owing which if not paid could result in a Lien on the RMUSA Real Property or
impose liability on Company, (C) RMUSA has not received any written notice of
any proposed special assessment which would affect the RMUSA Real Property, (D)
RMUSA has not received any written notice of any claims, causes of action,
lawsuits or legal proceedings pending or threatened regarding the ownership, use
or possession of the RMUSA Real Property, including condemnation or similar
proceedings, (E) RMUSA has not received any written notice of any violation of
any zoning, subdivision, platting, building, fire or insurance laws, ordinances
or regulations (whether related to the RMUSA Real Property or the occupancy
thereof) to the extent not previously cured, including the failure of RMUSA to
comply with all covenants, easements and restrictions recorded against the RMUSA
Real Property, (F) RMUSA has not received any written notice of any intention on
the part of the issuing authority to cancel, suspend or modify any licenses or
permits relating to the RMUSA Real Property, (G) RMUSA is in material compliance
with all recorded covenants, easements and restrictions affecting the RMUSA Real
Property, and (H) each of the RMUSA Leases is in full force and effect and has
not been modified, amended, added to, or changed in any manner whatsoever except
for those amendments attached to a RMUSA Lease Assignment.
8.15 Brokers and Finders. There is no investment banker, broker, finder
or other intermediary which has been retained by or is authorized to act on
behalf of RMUSA or any Affiliate of RMUSA who might be entitled to any fee or
commission from RMUSA or any Affiliate of RMUSA in connection with the
transactions contemplated by this Agreement.
8.16 Labor Matters. Except as set forth on Section 8.16 of the RMUSA
Disclosure Schedule, with respect to the RMUSA Business, since January 1, 2000,
there has not occurred or been threatened any material employee strike, work
stoppage, slowdown, lockout, picketing or concerted refusal to work overtime at
RMUSA Business Locations and there are no labor disputes currently subject to
any arbitration or administrative proceeding involving employees of RMUSA who
are involved in the RMUSA Business (excluding routine workers' compensation
claims).
8.17 Accounts Receivable. All RMUSA Accounts Receivable represent bona
fide sales actually made in the ordinary course of business and the accounts
receivable reflected in the adjustments pursuant to Section 2.3 are owed to
RMUSA, are not more than one hundred twenty (120) days past due and are not
subject to offset, counterclaim or other defense.
8.18 Inventory. The RMUSA Inventory, whether finished goods, work in
process or raw materials, consist of a quality and quantity usable and saleable
in the ordinary and usual course of the RMUSA Business consistent with past
practice.
8.19 Employee Benefit Plans; ERISA. None of RMUSA or its ERISA
Affiliates has incurred any liability under, arising out of or by operation of
Title IV of ERISA (other than for payment of premiums to the Pension Benefit
Guaranty Corporation in the ordinary course of business), and no fact or event
exists which would reasonably be expected to give rise to any such liability
that would reasonably be expected to result in a Lien on the RMUSA Assets or a
liability of the Company. The employee benefit plans, programs and arrangements
applicable to the RMUSA Transferred Employees have been administered in
accordance with their terms and applicable law, including ERISA and the Code, in
all material respects.
8.20 Aggregates Reserves. The RMUSA Assets include contractual rights
and commitments to at least 40,000,000 tons of permitted aggregates reserves.
8.21 No Liabilities. There are no liabilities or obligations, secured
or unsecured, known or unknown (whether accrued, absolute, contingent or
otherwise) of RMUSA which in any way relate to or encumber the RMUSA Assets or
the RMUSA Business, except for (a) those reflected or reserved on the RMUSA
Financial Statements, (b) those trade payables and contractual obligations
incurred or accrued in the ordinary and normal course of the RMUSA Business and
consistent with past practice since August 31, 2004, none of which, individually
or in the aggregate, is material, and none of which is for breach of warranty or
contract or for tort infringement, (c) those under the RMUSA Assumed Contracts,
(d) those under the RMUSA Permits, (e) Environmental Liabilities, and (f) any
taxes accruing in the ordinary course of the RMUSA Business, none of such taxes
being the responsibility or obligation of Company (other than those ad valorem
taxes which will be prorated as of the Contribution Date).
8.22 Representations and Warranties with Respect to the Membership
Interests and the Partnerships.
(a) RMUSA is the lawful owner of the Membership Interests.
RMUSA has the full legal right, power and authority to sell, transfer, convey
and assign the Membership Interests to the Company pursuant to this Agreement.
There are no outstanding options, warrants, rights (preemptive or otherwise),
calls, convertible instruments, agreements, arrangements or commitments
requiring restrictions or otherwise providing for the issuance, sale, transfer,
disposition or acquisition of the Membership Interests, subject to the terms and
conditions of each of the Operating Agreements of the respective Partnerships.
As of the date of this Agreement, the capitalization of each of the Partnerships
is, and the membership interests in each Partnership are owned, as set forth on
Section 8.21(a) of the RMUSA Disclosure Schedule. All the outstanding membership
interests of each of the Partnerships are duly authorized and validly issued
and, to the knowledge of RMUSA, all such membership interests in the
Partnerships are free and clear of all Liens.
(b) RMUSA has, and by execution and delivery of this
Agreement, shall transfer to the Company, good, absolute and marketable title
to, and unrestricted possession of, the Membership Interest, free and clear of
any Liens and any accrued, absolute, contingent or other liabilities of any
nature, including, without limitation, liabilities for any taxes, subject to the
terms and conditions of each of the Operating Agreements of the respective
Partnerships.
(c) Except for leases set forth on Section 8.22(c) of the
RMUSA Disclosure Schedule, each of the Partnerships hold free and clear title to
their respective assets.
(d) There is no action, litigation, suit, claim, proceeding or
governmental inquiry or investigation pending, or to RMUSA's Knowledge,
threatened against RMUSA that relates to the Membership Interests, and to
RMUSA's Knowledge, there are no circumstances that could reasonably be expected
to result in such an action, litigation, suit, claim, proceeding, inquiry or
investigation
(e) The transfer of the Membership Interests will not require
any consent or approval, or any filing with, any governmental entity, landlord,
owner or other person, other than those consents, approvals and filings which
have been or will be obtained or made prior to the Contribution Date.
ARTICLE 9
INDEMNIFICATION
---------------
9.1 Indemnity By Cemex. Subject to the provisions of this Article 9,
Cemex agrees to pay and to indemnify fully, hold harmless and defend each
Company Indemnified Party from and against any and all claims or Damages arising
out of or relating to:
(a) any inaccuracy or breach of any representation or warranty
of Cemex contained in this Agreement;
(b) any breach of any covenant or agreement of Cemex contained
in this Agreement;
(c) the liabilities and obligations of Cemex or any of its
Affiliates arising out of the operation or ownership of the Cemex Assets or the
Cemex Business on or prior to the Contribution Date, except obligations or
liabilities assumed by the Company pursuant to this Agreement; or
(d) all obligations or liabilities that arise, whether before,
on or after, the Contribution Date, out of, or in connection with, the Retained
Cemex Assets;
provided that Cemex shall have an obligation to indemnify any Company
Indemnified Party for Damages pursuant to this Section 9.1 only to the extent
that such Damages are in excess of (i) any amounts recovered by any Company
Indemnified Party pursuant to any contract to which any Company Indemnified
Party is a party and (ii) any insurance proceeds received with respect thereto
(exclusive of amounts recovered which are subject to retrospective payments or
premiums); provided, further, that upon making any payment to any Company
Indemnified Party, Cemex shall be subrogated to all rights of the Company
Indemnified Party against any third party in respect of the losses to which such
payment relates, and such Company Indemnified Party will execute upon request
all instruments reasonably necessary to evidence and perfect such subrogation
rights. Nothing in this Section 9.1 shall require a Company Indemnified Party to
seek to recover Damages from any third party before making a claim for
indemnification pursuant to Article 9.
9.2 Indemnity By RMUSA. Subject to the provisions of this Article 9,
RMUSA agrees to pay and to indemnify fully, hold harmless and defend each
Company Indemnified Party from and against any and all claims or Damages arising
out of or relating to:
(a) any inaccuracy or breach of any representation or warranty
of RMUSA contained in this Agreement;
(b) any breach of any covenant or agreement of RMUSA contained
in this Agreement;
(c) the liabilities and obligations of RMUSA or any of its
Affiliates arising out of the operation or ownership of the RMUSA Assets or the
RMUSA Business on or prior to the Contribution Date, except obligations or
liabilities assumed by the Company pursuant to this Agreement; or
(d) all obligations or liabilities that arise, whether before,
on or after, the Contribution Date, out of, or in connection with, the Retained
RMUSA Assets;
provided that RMUSA shall have an obligation to indemnify any Company
Indemnified Party for Damages pursuant to this Section 9.2 only to the extent
that such Damages are in excess of (i) any amounts recovered by any Company
Indemnified Party pursuant to any contract to which any Company Indemnified
Party is a party and (ii) any insurance proceeds received with respect thereto
(exclusive of amounts recovered which are subject to retrospective payments or
premiums); provided, further, that upon making any payment to any Company
Indemnified Party, RMUSA shall be subrogated to all rights of the Company
Indemnified Party against any third party in respect of the losses to which such
payment relates, and such Company Indemnified Party will execute upon request
all instruments reasonably necessary to evidence and perfect such subrogation
rights. Nothing in this Section 9.2 shall require a Company Indemnified Party to
seek to recover Damages from any third party before making a claim for
indemnification pursuant to Article 9.
9.3 Indemnity By Company. Subject to the provisions of this Article 9,
Company agrees to pay and to indemnify fully, hold harmless and defend
(a) each Cemex Indemnified Party from and against any and all
claims or Damages arising out of or relating to:
(i) any breach of any covenant or agreement of
Company contained in this Agreement; or
(ii) the Cemex Assumed Liabilities; and
(b) each RMUSA Indemnified Party from and against any and all
claims or Damages arising out of or relating to:
(i) any breach of any covenant or agreement of
Company contained in this Agreement; or
(ii) the RMUSA Assumed Liabilities;
provided that Company shall have an obligation to indemnify any Contributor
Indemnified Party for Damages pursuant to this Section 9.3 only to the extent
that such Damages are in excess of (i) any amounts recovered by any Contributor
Indemnified Party pursuant to any contract to which any Contributor Indemnified
Party is a party and (ii) any insurance proceeds received with respect thereto
(exclusive of amounts recovered which are subject to retrospective payments or
premiums); provided, further, that upon making any payment to any Contributor
Indemnified Party, Company shall be subrogated to all rights of the Contributor
Indemnified Party against any third party in respect of the losses to which such
payment relates, and such Contributor Indemnified Party will execute upon
request all instruments reasonably necessary to evidence and perfect such
subrogation rights. Nothing in this Section 9.3 shall require a Contributor
Indemnified Party to seek to recover Damages from any third party before making
a claim for indemnification pursuant to Article 9.
9.4 Exclusive Remedy. Except as provided in Section 10.12, the right to
indemnification provided for in this Article 9 shall be the exclusive remedy of
all Company Indemnified Parties with respect to the transactions contemplated
under this Agreement.
9.5 Indemnification Procedures. The party or parties making a claim for
indemnification under Section 9.1, 9.2 or 9.3 shall be, for the purposes of this
Agreement, referred to as the "Indemnified Party" and the party or parties
against whom such claims are asserted under this Article 9 shall be, for the
purposes of this Agreement, referred to as the "Indemnifying Party." All claims
by any Indemnified Party under this Article 9 shall be asserted and resolved as
follows:
(a) In the event that (i) any claim, demand or Proceeding is
asserted or instituted by any Person other than the parties to this Agreement or
their Affiliates which could give rise to Damages for which an Indemnifying
Party could be liable to an Indemnified Party under this Agreement (such claim,
demand or Proceeding, a "Third Party Claim") or (ii) any Indemnified Party under
this Agreement shall have a claim to be indemnified by any Indemnifying Party
under this Agreement which does not involve a Third Party Claim (such claim, a
"Direct Claim"), the Indemnified Party shall with reasonable promptness send to
the Indemnifying Party a written notice specifying the nature of such claim,
demand or Proceeding and the amount or estimated amount thereof if known (which
amount or estimated amount shall not be conclusive of the final amount, if any,
of such claim, demand or Proceeding) (a "Claim Notice").
(b) In the event of a Third Party Claim, the Indemnifying
Party shall be entitled to appoint counsel of the Indemnifying Party's choice at
the expense of the Indemnifying Party to represent the Indemnified Party and any
others the Indemnifying Party may reasonably designate in connection with such
claim, demand or Proceeding (in which case the Indemnifying Party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by any Indemnified Party except as set forth below); provided that such
counsel is reasonably acceptable to the Indemnified Party. Notwithstanding an
Indemnifying Party's election to appoint counsel to represent an Indemnified
Party in connection with a Third Party Claim, an Indemnified Party shall have
the right to employ separate counsel, and the Indemnifying Party shall bear the
reasonable fees, costs and expenses of such separate counsel if (i) the use of
counsel chosen by the Indemnifying Party to represent the Indemnified Party
would present such counsel with a conflict of interest or (ii) the Indemnifying
Party shall not have employed counsel to represent the Indemnified Party within
a reasonable time after notice of the institution of such Third Party Claim. If
requested by the Indemnifying Party, the Indemnified Party agrees to cooperate
with the Indemnifying Party and its counsel in contesting any claim, demand or
Proceeding which the Indemnifying Party defends, or, if appropriate and related
to the claim, demand or Proceeding in question, in making any counterclaim
against the person asserting the Third Party Claim, or any cross-complaint
against any person. No Third Party Claim may be settled or compromised (i) by
the Indemnified Party without the prior written consent of the Indemnifying
Party, which consent shall not be unreasonably withheld or delayed or (ii) by
the Indemnifying Party without the prior written consent of the Indemnified
Party, which consent shall not be unreasonably withheld or delayed. In the event
any Indemnified Party settles or compromises or consents to the entry of any
Judgment with respect to any Third Party Claim without the prior written consent
of the Indemnifying Party, each Indemnified Party shall be deemed to have waived
all rights against the Indemnifying Party for indemnification under this Article
9 with respect to such Third Party Claim.
(c) In the event of a Direct Claim the Indemnifying Party
shall notify the Indemnified Party within thirty (30) days Business Days of
receipt of a Claim Notice whether or not the Indemnifying Party disputes such
claim.
(d) From and after the delivery of a Claim Notice under this
Agreement, at the reasonable request of the Indemnifying Party, each Indemnified
Party shall grant the Indemnifying Party and its representatives all reasonable
access to the books, records and properties of such Indemnified Party to the
extent reasonably related to the matters to which the Claim Notice relates. All
such access shall be granted during normal business hours and shall be granted
under conditions, which will not unreasonably interfere with the business and
operations of such Indemnified Party. The Indemnifying Party will not, and shall
require that its representatives do not, use (except in connection with such
Claim Notice) or disclose to any third person other than the Indemnifying
Party's representatives (except as may be required by applicable Law) any
information obtained pursuant to this Section 9.5(d).
9.6 Monetary and Payment Limitations.
(a) Neither Cemex nor RMUSA shall have any obligation to
indemnify a Company Indemnified Party pursuant to Sections 9.1(a) or 9.2(a),
respectively, unless the aggregate amount of Damages suffered by all Company
Indemnified Parties in respect of such claims exceeds $1,000,000, in which case
the Company Indemnified Parties shall be entitled to recover all Damages
including the $1,000,000.
(b) Notwithstanding any provision of this Agreement to the
contrary, the aggregate liability of Cemex or RMUSA for Damages in respect of
all claims for indemnification pursuant to Sections 9.1(a) or 9.2(a),
respectively, shall in no event exceed the Cemex Value or RMUSA Value,
respectively. NO PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, SPECIAL,
PUNITIVE, OR SIMILAR DAMAGES, EXCEPT TO THE EXTENT ASSERTED BY, AWARDED, PAID OR
PAYABLE TO ANY THIRD PARTY.
(c) The parties mutually agree that payment to an Indemnified
Party by an Indemnifying Party for Damages shall be paid solely from the
required EBITDA distributions to be paid to the Indemnifying Party pursuant to
Section 6.1 of the Cemex LLC Agreement and Section 6.1 of the Ready Mix LLC
Agreement. In the event of Damages, compensation for which is owed to the
Indemnified Party by the Indemnifying Party, the parties mutually agree that the
Indemnifying Party shall waive all rights and title it has to, and shall
instruct the Manager of Company and the Manager of Cemex LLC to make to the
Indemnified Party, distributions due the Indemnifying Party from Cemex LLC under
Section 6.1 of the Cemex LLC Agreement or Company under Section 6.1 of the Ready
Mix LLC Agreement until such time as the Indemnified Party has recouped the
amount of Damages incurred by the Indemnified Party. The provisions and
limitations set forth in this Section 9.6(c) will not apply to any
indemnification liability of the Company pursuant to Section 9.3.
(d) Notwithstanding the foregoing, the Indemnified Party shall
not be limited to recovery of Damages pursuant to clause (c) above with respect
to Damages arising out of or relating to any fraud by RMUSA or Cemex in
connection with this Agreement, the discussions and negotiations leading up to
this Agreement or the transaction contemplated herein, and each of RMUSA and
Cemex shall be and remain liable to the other for any Damages arising out of any
such claim or fraud.
9.7 Survival. Except for the representations and warranties in Sections
7.2(a) and 8.2(a), which shall survive without limit, the representations and
warranties of Cemex and RMUSA contained in this Agreement shall survive the
Contribution for the applicable period set forth in this Section 9.7, and any
and all claims and causes of action for indemnification under this Article 9
arising out of the inaccuracy or breach of any representation or warranty of
Cemex or RMUSA must be made prior to the termination of the applicable survival
period set forth in this Section 9.7. All of the representations and warranties
of Cemex and RMUSA contained in this Agreement and any and all claims and causes
of action for indemnification under this Article 9 with respect thereto shall
terminate on the second anniversary of the date of this Agreement; provided that
the representations and warranties in Sections 7.3, 7.6, 7.19, 8.3, 8.6 and 8.19
shall survive until the expiration of the applicable statute of limitations;
provided further that the representations and warranties in Sections 7.7 and 8.7
shall survive until the fifth anniversary of the date of this Agreement and the
representations and warranties in Section 8.20 shall survive until the twentieth
anniversary of the date of this Agreement; it being understood that in the event
notice of any claim for indemnification under Section 9.1(a) or Section 9.2(a)
shall have been given within the applicable survival period, the representations
and warranties that are the subject of such indemnification claim shall survive
until such time as such claim is finally resolved.
9.8 Binding Nature. The indemnity obligations imposed under this
Article 9 shall be binding upon the parties hereto and their respective
successors and assigns. Wherever possible, such indemnity obligations shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of these indemnity obligations shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity without invalidating the remainder of the said
indemnity obligations.
ARTICLE 10
MISCELLANEOUS
-------------
10.1 Reliance Upon Representations and Warranties. The parties mutually
agree that notwithstanding any right of any party to investigate the affairs of
any other party and notwithstanding any Knowledge of any facts determined or
determinable by such party pursuant to such investigation or right of
investigation, each party has the right to fully rely upon the respective
representations and warranties of each other party contained in this Agreement.
10.2 Amendments. No change, modification or amendment to this Agreement
shall be effective unless the same shall be in writing and signed by the parties
hereto.
10.3 Notices. Any and all notices or other communications required or
permitted to be given under any of the provisions of this Agreement shall be in
writing and shall be deemed to have been duly given when personally delivered or
mailed by first class registered mail, return receipt requested, addressed to
the parties at the addressees set forth below (or at such other address as any
party may specify by notice to all other parties given as aforesaid).
If to RMUSA:
Ready Mix USA, Inc.
P.O. Box 020152
Tuscaloosa, Alabama 35402
Attn: Scott M. Phelps
With a copy, which shall not constitute notice, to:
Phelps, Jenkins, Gibson & Fowler, L.L.P.
P.O. Box 020848
Tuscaloosa, Alabama 35402-0848
Attn: Sam M. Phelps
If to Cemex:
CEMEX Southeast Holdings LLC
840 Gessner, Suite 1400
Houston, TX 77024
Attn: Jesus Gonzalez Herrera
With copies, which shall not constitute notice, to:
Cemex, Inc.
840 Gessner, Suite 1400
Houston, TX 77024
Attn: Leslie White
Skadden, Arps, Slate, Meagher & Flom LLP
1600 Smith, Suite 4400
Houston, TX 77024
Attn: Frank Ed Bayouth II
If to Company:
Ready Mix USA, LLC
2570 Ruffner Road
Birmingham, Alabama 35210
Attn: Marc Bryant Tyson
10.4 Payment of Fees and Expenses. Except as otherwise provided in this
Agreement, Cemex and RMUSA shall pay all fees and expenses of such respective
party's respective counsel, accountants and all other expenses incurred by such
party incident to the negotiation, preparation and execution of this Agreement
and the consummation of the transactions contemplated hereby.
10.5 Binding Effect. This Agreement shall be binding and conclusive
upon and inure to the benefit of the respective parties hereto and their
successors and assigns.
10.6 Waiver. Failure of any party hereto to insist upon the strict
performance of any of the covenants or conditions of this Agreement or to
exercise any right or option conferred herein in one or more instances shall not
be construed as a waiver or relinquishment of any such covenant, or condition,
right or option, but the same shall remain in full force and effect. The
committing by either party of any act or thing which it is not obligated to do
hereunder shall not be deemed to impose an obligation upon it to do any such act
or thing in the future or in any way change or alter any provision of this
Agreement.
10.7 Counterparts. This Agreement may be executed by original or
facsimile signatures in several counterparts that together shall constitute but
one and the same agreement, binding on both the parties notwithstanding that
both parties have not signed the same counterpart.
10.8 Construction.
(a) This Agreement shall be construed in its entirety
according to its plain meaning and shall not be construed against the party who
provided or drafted it.
(b) Any reference to an Article, Section, Schedule or Annex is
a reference to an Article or Section of, or a Schedule or an Annex to, this
Agreement.
(c) Terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
(d) The words "include", "includes" and "including" are not
limiting, and shall be deemed to be followed by the phrase "without limitation".
(e) The terms "dollars" and "$" mean United States dollars.
(f) The phrases "the date of this Agreement", "the date
hereof" and terms of similar import, unless the context otherwise requires,
shall be deemed to refer to July 1, 2005.
(g) The conjunction "or" shall be understood in its inclusive
sense (and/or).
10.9 Captions. The titles of the Articles, Sections, Schedules and
Annexes of this Agreement have been assigned thereto for convenience only and
shall not be construed as limiting, defining or affecting the substantive terms
of this Agreement.
10.10 Applicable Law. This Agreement shall be construed in accordance
with the laws of the State of Georgia, without giving effect to its principles
or rules of conflict of laws.
10.11 Consent to Jurisdiction. All disputes, litigation, proceedings or
other legal actions by any party to this Agreement in connection with or
relating to this Agreement or any matters described or contemplated in this
Agreement shall be instituted in the courts of the State of Georgia, or of the
United States in the State of Georgia, in either case, sitting in Atlanta,
Georgia. Each party to this Agreement irrevocably submits to the exclusive
jurisdiction of the courts of the State of Georgia, and of the United States
sitting in the State of Georgia, in connection with any such dispute,
litigation, action or proceeding arising out of or relating to this Agreement.
Each party to this Agreement may receive the service of any process or summons
in connection with any such dispute, litigation, action or proceeding brought in
any such court by a mailed copy of such process or summons sent to it at its
address set forth, and in the manner provided, in Section 10.3. Each party to
this Agreement irrevocably waives, to the fullest extent permitted by applicable
law, any defense or objection it may now or hereafter have to the laying of
venue of any proceeding under this Agreement brought in the courts of the State
of Georgia, or of the United States in the State of Georgia, in either case,
sitting in Atlanta, Georgia, and any claim that any proceeding under this
Agreement brought in any such court has been brought in an inconvenient forum.
10.12 Specific Performance. The parties to this Agreement agree that
irreparable damage would occur in the event that any provision of this Agreement
was not performed in accordance with the terms of this Agreement and that the
parties shall be entitled to specific performance of the terms of this Agreement
in addition to any other remedy at Law or equity.
10.13 Translation. Should this Agreement be translated into any
language other than English, the English version shall control and prevail on
any question of interpretation or otherwise.
10.14 Assignment. This Agreement shall be binding upon the respective
successors and permitted assigns of the parties hereto. This Agreement shall not
be assignable or otherwise transferable by any of Cemex, RMUSA or Company
without the prior written consent of the other parties and any attempt to so
assign or transfer this Agreement without such consent shall be void and of no
effect.
10.15 Entire Agreement. This Agreement (including the Schedules and
Exhibits hereto) and the other documents delivered pursuant hereto constitute
the full and entire understanding and agreement of the parties and supersedes
any and all prior agreements, arrangements and understandings relating to the
subject matters hereof and thereto.
10.16 Rights of Creditors and Third Parties under this Agreement. This
Agreement is entered into among the Company, RMUSA and Cemex for the exclusive
benefit of the Company, RMUSA and Cemex, and their successors and permitted
assigns. This Agreement is expressly not intended for the benefit of any
creditor of the Company or any other Person. Except and only to the extent
provided by applicable statute, no such creditor or third party shall have any
rights under this Agreement or any agreement between the Company and RMUSA or
Cemex with respect to any Contribution, or otherwise.
10.17 Certain Definitions. As used in this Agreement, the following
terms have the following meanings:
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with,
such Person. For the purposes of this definition, "control" (including, with
correlative meaning, the terms "controlled," "controlled by" and "under common
control with") shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise.
Notwithstanding the foregoing, for purposes of this Agreement, Company shall not
be deemed to be an Affiliate of Cemex or RMUSA or any of their respective
Affiliates.
"Aggregate Cemex Contribution" has the meaning set forth in Section
2.3(c)(v).
"Aggregate RMUSA Contribution" has the meaning set forth in Section
2.3(c)(v).
"Agreement" has the meaning set forth in the Introduction.
"Assumed Liability" means a Cemex Assumed Liability or an RMUSA Assumed
Liability, as the context requires.
"Business" has the meaning set forth in Section 1.2.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which banks in New York City are authorized or obligated by law or executive
order to close.
"Cement Supply Agreement" means the cement supply agreement to be
entered into concurrently with the execution of this Agreement, by and between
the Company and Cemex LLC.
"Cemex" has the meaning set forth in the Introduction.
"Cemex Accounts Receivable" has the meaning set forth in Schedule
1.2(b)7.
"Cemex Agreement Assignment and Assumption" has the meaning set forth
in Section 4.2(a)(xii).
"Cemex Assets" has the meaning set forth in Section 1.2.
"Cemex Assumed Contracts" has the meaning set forth in Schedule
1.2(a)8.
"Cemex Assumed Liabilities" has the meaning set forth in Section 5.2.
"Cemex Authorized Person(s)" has the meaning set forth in Section
4.2(a)(vii).
"Cemex Boundaries" means the states of Alabama, Georgia and
Mississippi, the Cemex Florida Panhandle (as defined herein) and the Cemex
Limited Tennessee Area (as defined herein).
"Cemex Business" has the meaning set forth in Section 1.2.
"Cemex Business Locations" has the meaning set forth in Section 1.2.
"Cemex Contribution Agreement" means the Asset and Capital Contribution
Agreement of Cemex Southeast LLC, dated July 1, 2005.
"Cemex Disclosure Schedule" has the meaning set forth in Article 7.
"Cemex Environmental Condition" has the meaning set forth in Section
7.7(a).
"Cemex Environmental Indemnitees" has the meaning set forth in Section
6.7.
"Cemex Environmental Liabilities" has the meaning set forth in Section
6.7.
"Cemex Financial Statements" means the statement of income for the
Cemex Assets for the twelve months ended December 31, 2004.
"Cemex Florida Panhandle" means the following counties in the State of
Florida: Escambia, Santa Rosa, Okaloosa, Walton, Holmes, Washington, Jackson,
Bay, Calhoun, Gulf and Franklin. The Cemex Florida Panhandle shall exclude the
City of Tallahassee, Florida.
"Cemex Indemnified Party" means Cemex, Cemex's Affiliates, directors,
officers, shareholders, attorneys, accountants, agents and employees, and their
respective heirs, successors and assigns.
"Cemex Intangible Property" means intellectual property owned by Cemex
or an Affiliate of Cemex.
"Cemex Intellectual Property License Agreement" means the Intellectual
Property License Agreement dated as of the date hereof by and between Cemex
Trademarks Worldwide Ltd. and the Company.
"Cemex Intracompany Receivables" has the meaning set forth in Schedule
1.2(b)5.
"Cemex Inventory" has the meaning set forth in Schedule 1.2(a)3.
"Cemex Land" has the meaning set forth in Schedule 1.2(a)1.
"Cemex Leases" has the meaning set forth in Schedule 1.2(a)8.
"Cemex Lease Assignment" has the meaning set forth in Section
4.2(a)(xiii).
"Cemex Limited Tennessee Area" means the Metropolitan Statistical Areas
of Chattanooga and Memphis, Tennessee.
"Cemex LLC" means Cemex Southeast LLC, a Delaware limited liability
company.
"Cemex LLC Agreement" means the Limited Liability Company Agreement of
Cemex Southeast LLC, dated July 1, 2005.
"Cemex Material Adverse Effect" has the meaning set forth in Section
7.5(b).
"Cemex Permits" has the meaning set forth in Schedule 1.2(a)9.
"Cemex Prepaids" has the meaning set forth in Section 2.3(b).
"Cemex Real Property" has the meaning set forth in Schedule 1.2(a)1.
"Cemex Required Contractual Consents" has the meaning set forth in
Section 7.8.
"Cemex Retained Names" has the meaning set forth in Schedule 1.2(b)4.
"Cemex Retained Policies" has the meaning set forth in Schedule
1.2(b)3.
"Cemex Transferred Employees" has the meaning set forth in Section 6.6.
"Cemex Value" has the meaning set forth in Section 2.1(b).
"Cemex Warranty Deed" has the meaning set forth in Section 4.2(a)(ii).
"Cemex Working Capital Statement" has the meaning set forth in Section
2.3(c)(i).
"Claim Notice" has the meaning set forth in Section 9.5(a).
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Company" has the meaning set forth in the Introduction.
"Company Indemnified Party" means Company, Company's Affiliates,
directors, managers, officers, members, shareholders, attorneys, accountants,
agents and employees, and their respective heirs, successors and assigns.
"Consent" means any consent, waiver, approval, authorization,
exemption, registration or declaration.
"Contracts" has the meaning set forth in Section 7.5(a)(i).
"Contribution" has the meaning set forth in the Recitals.
"Contribution Date" has the meaning set forth in Section 3.1.
"Contributor Indemnified Party" means any Cemex Indemnified Party or
any RMUSA Indemnified Party.
"Damages" means liabilities, damages, penalties, Judgments,
assessments, losses, costs and expenses in any case, whether arising under
strict liability or otherwise (including reasonable attorneys' fees) including
lost profits, lost benefits, loss of or diminution in enterprise value and loss
of goodwill, but excluding consequential, incidental, special, punitive or
similar damages, except to the extent such consequential, incidental, special,
punitive or similar damages are asserted by, awarded, paid or payable to any
third party.
"Direct Claim" has the meaning set forth in Section 9.5(a).
"Environment" shall mean soil, surface waters, groundwater, land,
stream sediments, surface or subsurface strata, ambient air, indoor air or
indoor air quality, interior and/or exterior, including, without limitation, any
material or substance used in the physical structure, of any building or
improvement and any environmental medium.
"Environmental Law" shall mean the Resource Conservation and Recovery
Act of 1976, 42 U.S.C. Sections 6901, et seq., as amended ("RCRA"); the
Comprehensive Environmental Response Compensation and Liability Act of 1980, 42
U.S.C. Sections 9601, et seq. (original act know as "CERCLA" or "Superfund," the
Amendments are known as "SARA"); the HSWA amendments to RCRA regulating
Underground Storage Tanks ("USTS"), 42 U.S.C. " 6991-6991(i); the Clean Air Act
of 1963 as amended in 1970 and 1977, 42 U.S.C. ' 7401, et seq. ("Clean Air
Act"); the Federal Water Pollution Control Act of 1976, as subsequently amended
by the Clean Water Act of 1977 and 1987, 33 U.S.C. " 1251, et seq. ("Clean Water
Act"), and the Toxic Substances Control Act of 1976, 15 U.S.C. " 2501 ("TSCA"),
and all other federal, state and local laws, regulations, rules or ordinances
implementing or otherwise dealing with the subject matter of the preceding
federal statutes or otherwise relating to the protection of human health or the
Environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" means any entity that is a member of a controlled
group for purposes of Section 4001(a)(14) of ERISA.
"GAAP" means generally accepted accounting principles as in effect in
the United States from time to time.
"Governmental Authority" means (i) any domestic or foreign national,
state or local government, any political subdivision thereof or any other
governmental, quasi-governmental, judicial, public or statutory instrumentality,
authority, body, agency, court, department, bureau or entity, or (ii) any
arbitrator with authority to legally bind a party or any of its Affiliates.
"Hazardous Material" shall mean any pollutant, toxic substance
including asbestos and asbestos-containing materials, hazardous waste, hazardous
material or hazardous substance as defined in or controlled by the Environmental
Law.
"Impartial Accounting Firm" has the meaning set forth in Section
2.3(c)(iv).
"Indemnified Party" has the meaning set forth in Section 9.5.
"Indemnifying Party" has the meaning set forth in Section 9.5.
"Injunction" means any order, statute, rule, regulation, executive
order, injunction, stay, decree or restraining order.
"Interim Cemex Financial Statements" means the statement of income for
the RMUSA Assets for the nine months ended September 30, 2004.
"Interim RMUSA Financial Statements" means the statement of income for
the RMUSA Assets for the eight months ended August 31, 2004.
"Judgments" means any judgments, injunctions, orders, writs, rulings or
awards of any court or other judicial authority or any governmental,
administrative or regulatory authority of competent jurisdiction.
"Knowledge" shall mean, with respect to the Cemex, the actual knowledge
of the Jesus Gonzalez Herrera, Leslie White, Andy Miller, Steve Wise, Luis
Oropeza, and Frank Craddock, and with respect to RMUSA, the actual knowledge of
Marc Bryant Tyson, Scott Phelps, Steve Shaw, Bill Roy, Bill Holden, Bobby
Lindsay and James Lewis.
"Laws" means any federal, state, local or foreign law, statute,
ordinance, rule, regulation, order or decree.
"Liens" means all liens (statutory or otherwise), mortgages, pledges,
charges, security interests, sureties, options, easements, covenants,
restrictions or other encumbrances whatsoever.
"Material Cemex Contract" has the meaning set forth in Section 7.5(a).
"Material RMUSA Contract" has the meaning set forth in Section 8.5(a).
"Membership Interests" has the meaning set forth in Section 1.1.
"Partnerships" has the meaning set forth in Section 1.1.
"Permits" means all permits, authorizations, approvals, registrations,
licenses, certificates, variances and similar rights granted by or obtained from
any federal, state, local or foreign governmental, administrative or regulatory
authority.
"Permitted Encumbrances" means (a) mechanics', carriers',
warehousemens' workmens' and other similar Liens arising (I) with respect to the
Cemex Assets, in the ordinary course of the Cemex Business and (II) with respect
to the RMUSA Assets, in the ordinary course of the RMUSA Business, and which
would not, individually or in the aggregate, reasonably be expected to have a
Cemex Material Adverse Effect or a RMUSA Material Adverse Effect, respectively,
(b) Liens for taxes, assessments and other governmental charges not yet due and
payable or that may subsequently be paid without penalty or that are being
contested in good faith by appropriate proceedings, and (c) with respect to the
Real Property, encumbrances to fee simple, leasehold or easement title for: (I)
Real Property taxes or other property taxes, assessments, governmental charges
or levies not yet due; (II) easements, rights-of-way, licenses, restrictions,
reservations of mineral rights (with surface rights being waived) or similar
encumbrances that do not materially impair the marketability, use or operation
of such Real Property by the Company; and (III) rights of tenants in possession
of any such Real Property pursuant to tenant leases to be assigned to the
Company.
"Person" means an individual, a corporation, a limited liability
company, a partnership, an association, a trust or other entity or organization.
"Proceeding" means any action, suit, demand, claim, legal or
administrative proceeding or any arbitration or other alternative dispute
resolution proceeding, hearing or investigation.
"Ready Mix LLC Agreement" has the meaning set forth in Section
4.1(b)(i).
"Required Contractual Consent" means a Cemex Required Contractual
Consent or a RMUSA Required Contractual Consent.
"Retained Cemex Assets" has the meaning set forth in Section 1.2.
"Retained RMUSA Assets" has the meaning set forth in Section 1.1.
"RMUSA" has the meaning set forth in the Introduction.
"RMUSA Accounts Payable" has the meaning set forth in Section 2.2.
"RMUSA Accounts Receivable" has the meaning set forth in Schedule
1.1(a)5.
"RMUSA Agreement Assignment and Assumption" has the meaning set forth
in Section 4.1(a)(xii).
"RMUSA Ancillary Agreements" means the RMUSA Trademark License
Agreement.
"RMUSA Assets" has the meaning set forth in Section 1.1.
"RMUSA Assumed Contracts" has the meaning set forth in Schedule
1.1(a)8.
"RMUSA Assumed Liabilities" has the meaning set forth in Section 5.1.
"RMUSA Authorized Person(s)" has the meaning set forth in Section
4.1(a)(vii).
"RMUSA Boundaries" means the states of Alabama, Arkansas, Georgia,
excluding the Metropolitan Statistical Area of Brunswick, Georgia, Mississippi
and Tennessee and the RMUSA Florida Panhandle (as defined herein).
"RMUSA Business" has the meaning set forth in Section 1.1.
"RMUSA Business Locations" has the meaning set forth in Section 1.1.
"RMUSA Disclosure Schedule" has the meaning set forth in Article 8.
"RMUSA Environmental Condition" has the meaning set forth in Section
8.7(a).
"RMUSA Environmental Indemnitees" has the meaning set forth in Section
6.8.
"RMUSA Environmental Liabilities" has the meaning set forth in Section
6.8.
"RMUSA Financial Statements" means the statement of income for the
RMUSA Asset for the twelve months ended December 31, 2004.
"RMUSA Florida Panhandle" means the following counties in the State of
Florida: Escambia, Santa Rosa, Okaloosa, Walton, Holmes, Washington, Jackson,
Bay, Calhoun, Gulf, Franklin, Liberty, Gadsden, Leon, Wakulla, Jefferson,
Madison and Taylor.
"RMUSA Indemnified Party" means RMUSA, RMUSA's Affiliates, directors,
officers, shareholders, attorneys, accountants, agents and employees, and their
respective heirs, successors and assigns.
"RMUSA Intangible Property" means intellectual property owned by RMUSA
or any Affiliate of RMUSA.
"RMUSA Intracompany Receivables" has the meaning set forth in Schedule
1.1(b)5.
"RMUSA Inventory" has the meaning set forth in Schedule 1.1(a)3.
"RMUSA Land" has the meaning set forth in Schedule 1.1(a)1.
"RMUSA Leases" has the meaning set forth in Schedule 1.1(a)8.
"RMUSA Lease Assignment" has the meaning set forth in Section
4.1(a)(xiii).
"RMUSA Material Adverse Effect" has the meaning set forth in Section
8.5(b).
"RMUSA Permits" has the meaning set forth in Schedule 1.1(a)9.
"RMUSA Prepaids" has the meaning set forth in Section 2.3(a).
"RMUSA Real Property" has the meaning set forth in Schedule 1.1(a)1.
"RMUSA Required Contractual Consents" has the meaning set forth in
Section 8.8.
"RMUSA Retained Names" has the meaning set forth in Schedule 1.1(b)4.
"RMUSA Retained Policies" has the meaning set forth in Schedule
1.1(b)3.
"RMUSA Trademark License Agreement" has the meaning set forth in
Section 4.1(a)(xiv).
"RMUSA Transferred Employees" has the meaning set forth in Section 6.6.
"RMUSA Value" has the meaning set forth in Section 2.1(a).
"RMUSA Warranty Deed" has the meaning set forth in Section 4.1(a)(ii).
"RMUSA Working Capital Statement" has the meaning set forth in Section
2.3(c)(i).
"Third Party Claim" has the meaning set forth in Section 9.5(a).
"Title Company" shall mean either of First American Title Insurance
Company or Fidelity National Title Insurance Company.
"Title Policy" shall mean an ALTA owner's policy of title insurance in
a form acceptable to (i) Cemex, with respect to any such policy issued for RMUSA
Real Property and (ii) RMUSA, with respect to a policy issued for Cemex Real
Property (or, with respect to any parcel of RMUSA Real Property or Cemex Real
Property that is in a State which does not permit the issuance of such ALTA
policy, such form as shall be permitted in such State and acceptable to Cemex or
RMUSA, respectively) issued by the Title Company with respect to such Real
Property and insuring the Company's indefeasible fee simple ownership of such
Real Property as of the date hereof, subject only to the standard exceptions and
exclusions from coverage and the (i) RMUSA's Permitted Encumbrances, with
respect to any such policy issued for RMUSA Real Property and (ii) Cemex's
Permitted Encumbrances, with respect to any policy issued for Cemex Real
Property.
"Transferred Asset" means a Cemex Asset or an RMUSA Asset, as the
context requires.
"Unassigned Contracts" has the meaning set forth in Section 4.4.
"WARN" has the meaning set forth in paragraph 6 of Schedule 5.1.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, this Agreement executed on the day and year first
above written.
READY MIX USA, INC.
/s/ Marc Bryant Tyson
----------------------------------
Marc Bryant Tyson
President
CEMEX SOUTHEAST HOLDINGS LLC
/s/ Gilberto Perez
----------------------------------
Gilberto Perez
President
READY MIX USA, LLC
By: Ready Mix USA, Inc.
Its Manager
/s/ Marc Bryant Tyson
----------------------------------
Marc Bryant Tyson
Its President
LIST OF SCHEDULES
-----------------
1.1(a) RMUSA Assets
1.1(a)-1 RMUSA Land
1.1(b) RMUSA Retained Assets
1.1(b)-4 RMUSA Retained Names
1.2(a) Cemex Assets
1.2(a)-1 Cemex Land
1.2(b) Cemex Retained Assets
1.2(b)-6 Cemex Retained Contracts
1.2(b)-8 Cemex Other Retained Assets
5.1 RMUSA Assumed Liabilitie
5.2 Cemex Assumed Liabilities
LIST OF EXHIBITS
----------------
A Form of Cemex Lease Assignment
B Form of RMUSA Lease Assignment
Schedule 1.1(a)
---------------
RMUSA Assets
1. Real Property. Subject to the RMUSA Permitted Encumbrances, the real
property owned, or in the case of (vi) below, leased, by RMUSA or any
of its Affiliates and consisting of: (i) the real property described on
Schedule 1.1(a)-1 (the "RMUSA Land"), (ii) all buildings, structures
and improvements located on the RMUSA Land, to the extent owned by
RMUSA or any of its Affiliates, (iii) all fixtures, machinery,
apparatus or equipment affixed to the Cemex Land, including all of the
electrical, heating, plumbing, air conditioning, air compression and
all other similar systems located on the RMUSA Land, to the extent
owned by RMUSA or any of its Affiliates and to the extent that such
items constitute fixtures, (iv) all right, title and interest of RMUSA
or any of its Affiliates, reversionary or otherwise, in and to all
easements, if any, in or upon the RMUSA Land and all other rights and
appurtenances belonging or in any way pertaining to the RMUSA Land
(including RMUSA's and its Affiliates' right, title and interest in and
to any mineral rights or water rights relating to the RMUSA Land), (v)
all right, title and interest of RMUSA or any of its Affiliates in, to
or under all strips and gores and any land lying in the bed of any
public road, highway or other access way, open or proposed, adjoining
the RMUSA Land and (vi) the RMUSA Leases (collectively, the "RMUSA Real
Property");
2. Personal Property. Except as described on Schedule 1.1(b), the tangible
personal property that is either located on the RMUSA Real Property or
used or intended for use primarily in, or which is being utilized or
operated by RMUSA primarily in the RMUSA Business as presently
conducted, including all off road, non-titled rolling stock, material
handling equipment, wheel loaders, track dozers, scrapers, water
trucks, haul trucks, conveyor system, aggregate processing
equipment/crushers and machinery, cement manufacturing equipment
including rotary kilns, storage silos, installed control systems,
installed electric motors, conveyors, rail engine, cement and raw
material storage and handling equipment, weigh scales, office
furniture, business machines, cement/aggregate testing and laboratory
equipment, tools and fixtures;
3. Inventory. Except as described on Schedule 1.1(b), all inventory,
including all inventories of products, work in process, finished goods,
raw materials, supplies, parts, finished cement, clinker, construction
aggregate, coal and fuel, lubricants, machinery and equipment repair
parts and components, including those tools, fuel, repair parts,
components and other items, and including the supplies of coal, clay,
construction aggregate, fly and bottom ash and other raw materials and
repair parts (collectively, "RMUSA Inventory");
4. Prepaid Items. All of RMUSA's and its Affiliates' rights and interests
relating to prepaid expenses, advance payments, deposits and prepaid
items, including prepaid interest and deposits with lessors, suppliers
or utilities, which relate primarily to the RMUSA Business;
5. Accounts Receivable. Except as described on Schedule 1.1(b), RMUSA's
and its Affiliates' accounts receivable arising out of the conduct of
the RMUSA Business and outstanding as of the Contribution Date,
including any payments received by RMUSA or any of its Affiliates with
respect thereto on or after the Contribution Date, and unpaid interest
accrued on any accounts receivable and any security or collateral
relating thereto (collectively, "RMUSA Accounts Receivable");
6. Books, Records and Written Materials. Except as described on Schedule
1.1(b), all of RMUSA's and its Affiliates' books and records, whether
in hard copy or in electronic format (e.g. computer files), including
all production data, equipment maintenance data, accounting records,
(but specifically excluding those files related to the Retained RMUSA
Litigation), and any inventory records, sales and sales promotional
data and materials, advertising materials, sales training materials,
educational support program materials, cost and pricing information,
business plans, quality control records and manuals, blueprints,
research and development files, records and laboratory books, patent
disclosures, correspondence, and any other records and data, in each
case (i) used primarily in or necessary for the conduct of the RMUSA
Business or (ii) that are located on the RMUSA Real Property or are
within the possession or control of those persons employed by RMUSA to
work primarily for the Business, and all books and records relating to
Taxes (other than income Taxes) with respect to the RMUSA Business;
provided that nothing in this paragraph 6 shall require RMUSA to
deliver to Company or otherwise provide Company access to any
electronic records that cannot be separated from information relating
to the RMUSA Retained Assets or RMUSA's other businesses;
7. Catalogs and Advertising Materials. RMUSA's and its Affiliates'
promotional and advertising materials relating primarily to or
necessary for the conduct of the RMUSA Business as presently conducted,
including all catalogs, brochures, plans, customer lists, supplier
lists, manuals, handbooks, equipment and parts lists, and dealer and
distributor lists;
8. Assumed Contracts. Except as described on Schedule 1.1(b) and subject
to Section 4.4, all rights and benefits of RMUSA and its Affiliates in,
to or under all Contracts relating primarily to the RMUSA Business, to
which RMUSA or any of its Affiliates is a party or by which any of the
RMUSA Assets are bound, including (i) all rights of RMUSA and its
Affiliates in all purchase and sales orders relating principally to the
Business, (ii) all rights of RMUSA and its Affiliates as lessee under
all leases of personal property relating primarily to the RMUSA
Business, (iii) all Contracts with suppliers for any products, raw
materials, supplies, equipment or parts heretofore sold, or to be sold,
by RMUSA and its Affiliates used primarily in the RMUSA Business as
presently conducted, and (iv) all rights of RMUSA and its Affiliates
either as lessee or lessor under all leases affecting the RMUSA Real
Property (the "RMUSA Leases"), (all of the foregoing being
collectively, the "RMUSA Assumed Contracts");
9. Permits and Approvals. All licenses, permits, approvals, variances,
emission allowances, authorizations, waivers or consents used primarily
in or necessary for the conduct of the RMUSA Business as presently
conducted or ownership or operation of the RMUSA Real Property as
currently operated and issued to RMUSA or any of its Affiliates by any
Governmental Authority, to the extent transferable (collectively,
"RMUSA Permits");
10. Claims. Except as described on Schedule 1.1(b), all rights, privileges,
claims, demands, causes of action, claims in bankruptcy,
indemnification agreements with, and indemnification rights against,
third parties, warranty claims (to the extent transferable), offsets
and other claims relating to the RMUSA Assets or the RMUSA Business,
but not to the extent that they relate to the Retained RMUSA Assets or
the Retained RMUSA Liabilities; and
11. Goodwill. Any and all goodwill associated principally with the RMUSA
Business.
12. Membership Interests. The Membership Interests owned by RMUSA in each
of Reynolds Ready Mix, L.L.C., River City Industries, L.L.C., and RCI
Marine, L.L.C.
Schedule 1.1(a)-1
-----------------
RMUSA Land
See attached schedule.
Schedule 1.1(b)
---------------
RMUSA Retained Assets
1. Cash. All cash, bank balances, money market accounts, moneys in
possession of banks and other depositories, term or term deposits and
similar cash equivalents and cash items of, owned or held by or for the
account of RMUSA;
2. Corporate and Other Records. The corporate books and records, including
stock certificates, treasury stock, stock transfer records, corporate
seals and minute books of RMUSA (i) which are not used in or necessary
for the conduct of the RMUSA Business and (ii) which are not located on
the RMUSA Real Property or are not within the possession or control of
those persons employed to work principally for the RMUSA Business,
(iii) employee files for employees other than the RMUSA Transferred
Employees, (iv) RMUSA's Tax Returns and any tax supporting information
related thereto, and (v) any and all records related to pending or
completed litigation and claims;
3. Insurance. Any and all policies of insurance, whether or not covering
the RMUSA Assets or the RMUSA Business, that are or have been
maintained or managed through RMUSA or any of its Affiliates, including
general liability, property, casualty, product liability and workers'
compensation insurance (the "RMUSA Retained Policies"), including any
and all amounts recovered by RMUSA under such RMUSA Retained Policies;
4. Intellectual Property. All intellectual property of RMUSA and its
Affiliates, whether or not used primarily in or necessary for the
conduct of the RMUSA Business, including RMUSA's and its Affiliates'
patents, trade secrets, copyrights, trademarks, trade names, logos,
slogans, internet domain names, licenses and software, including any
and all rights (including any common law trademark rights) to the names
Ready Mix USA, Inc. and Ready Mix USA (such names, collectively, the
"RMUSA Retained Names") and including those items listed on Schedule
1.1(b)-4; and
5. Intracompany Receivables. All outstanding amounts, including accounts
receivable, owing to the RMUSA Business from other businesses of RMUSA
or RMUSA 's Affiliates (the "RMUSA Intracompany Receivables").
Schedule 1.1(b)-4
-----------------
RMUSA Retained Names
1. Ready Mix USA, Inc.
2. Ready Mix USA
3. Those names and marks registered on:
a. Certificate of Trademark Registration No. 2,694,510;
b. Certificate of Trademark Registration No. 2,616,672; and
c. Certificate of Trademark Registration No. 2,634,087.
Schedule 1.2(a)
---------------
Cemex Assets
1. Real Property. Subject to the Cemex's Permitted Encumbrances, the real
property owned, or in the case of (vi) below, leased, by Cemex, Inc. or
any of its Affiliates and consisting of: (i) the real property
described on Schedule 1.2(a)-1 (the "Cemex Land"), (ii) all buildings,
structures and improvements located on the Cemex Land, to the extent
owned by Cemex, Inc. or any of its Affiliates, (iii) all fixtures,
machinery, apparatus or equipment affixed to the Cemex Land, including
all of the electrical, heating, plumbing, air conditioning, air
compression and all other similar systems located on the Cemex Land, to
the extent owned by Cemex, Inc. or any of its Affiliates and to the
extent that such items constitute fixtures, (iv) all right, title and
interest of Cemex, Inc. or any of its Affiliates, reversionary or
otherwise, in and to all easements, if any, in or upon the Cemex Land
and all other rights and appurtenances belonging or in any way
pertaining to the Cemex Land (including Cemex, Inc.'s and its
Affiliates' right, title and interest in and to any mineral rights or
water rights relating to the Cemex Land), (v) all right, title and
interest of Cemex, Inc. or any of its Affiliates in, to or under all
strips and gores and any land lying in the bed of any public road,
highway or other access way, open or proposed, adjoining the Cemex Land
and (vi) the Cemex Leases (collectively, the "Cemex Real Property");
2. Personal Property. Except as described on Schedule 1.2(b), the tangible
personal property that is either located on the Cemex Real Property or
used or intended for use primarily in, or which is being utilized or
operated by Cemex, Inc. primarily in the Cemex Business as presently
conducted, including all off road, non-titled rolling stock, material
handling equipment, wheel loaders, track dozers, scrapers, water
trucks, haul trucks, conveyor system, aggregate processing
equipment/crushers and machinery, cement manufacturing equipment
including rotary kilns, storage silos, installed control systems,
installed electric motors, conveyors, rail engine, cement and raw
material storage and handling equipment, weigh scales, office
furniture, business machines, cement/aggregate testing and laboratory
equipment, tools and fixtures;
3. Inventory. Except as described on Schedule 1.2(b), all inventory,
including all inventories of products, work in process, finished goods,
raw materials, supplies, parts, finished cement, clinker, construction
aggregate, coal and fuel, lubricants, machinery and equipment repair
parts and components, including those tools, fuel, repair parts,
components and other items, and including the supplies of coal, clay,
construction aggregate, fly and bottom ash and other raw materials and
repair parts (collectively, "Cemex Inventory");
4. Prepaid Items. All of Cemex, Inc.'s and its Affiliates' rights and
interests relating to prepaid expenses, advance payments, deposits and
prepaid items, including prepaid interest and deposits with lessors,
suppliers or utilities, which relate primarily to the Cemex Business;
5. Reserved.
6. Books, Records and Written Materials. Except as described on Schedule
1.2(b), all of Cemex, Inc.'s and its Affiliates' books and records,
whether in hard copy or in electronic format (e.g. computer files),
including all production data, equipment maintenance data, accounting
records, (but specifically excluding those files related to the
Retained Cemex Litigation) any inventory records, sales and sales
promotional data and materials, advertising materials, sales training
materials, educational support program materials, cost and pricing
information, business plans, quality control records and manuals,
blueprints, research and development files, records and laboratory
books, patent disclosures, correspondence, and any other records and
data, in each case (i) used primarily in or necessary for the conduct
of the Cemex Business or (ii) that are located on the Cemex Real
Property or are within the possession or control of those persons
employed by Cemex, Inc. to work primarily for the Business, and all
books and records relating to Taxes (other than income Taxes) with
respect to the Cemex Business; provided that nothing in this paragraph
6 shall require Cemex, Inc. to deliver to Company or otherwise provide
Company access to any electronic records that cannot be separated from
information relating to the Cemex Retained Assets or Cemex, Inc.'s
other businesses;
7. Catalogs and Advertising Materials. Cemex, Inc.'s and its Affiliates'
promotional and advertising materials relating primarily to or
necessary for the conduct of the Cemex Business as presently conducted,
including all catalogs, brochures, plans, customer lists, supplier
lists, manuals, handbooks, equipment and parts lists, and dealer and
distributor lists;
8. Assumed Contracts. Except as described on Schedule 1.2(b), and subject
to Section 4.4, all rights and benefits of Cemex, Inc. and its
Affiliates in, to or under all Contracts relating primarily to the
Cemex Business, to which Cemex, Inc. or any of its Affiliates is a
party or by which any of the Cemex Assets are bound, including (i) all
rights of Cemex, Inc. and its Affiliates in all purchase and sales
orders relating principally to the Business, (ii) all rights of Cemex,
Inc. and its Affiliates as lessee under all leases of personal property
relating primarily to the Cemex Business, (iii) all Contracts with
suppliers for any products, raw materials, supplies, equipment or parts
heretofore sold, or to be sold, by Cemex, Inc. and its Affiliates used
primarily in the Cemex Business as presently conducted, and (iv) all
rights of Cemex, Inc. and its Affiliates either as lessee or lessor
under all leases affecting the Cemex Real Property (the "Cemex
Leases"), (all of the foregoing being collectively, the "Cemex Assumed
Contracts");
9. Permits and Approvals. All licenses, permits, approvals, variances,
emission allowances, authorizations, waivers or consents used primarily
in or necessary for the conduct of the Cemex Business as presently
conducted or ownership or operation of the Cemex Real Property as
currently operated and issued to Cemex, Inc. or any of its Affiliates
by any Governmental Authority, to the extent transferable
(collectively, "Cemex Permits");
10. Claims. All rights, privileges, claims, demands, causes of action,
claims in bankruptcy, indemnification agreements with, and
indemnification rights against, third parties, warranty claims (to the
extent transferable), offsets and other claims relating to the Cemex
Assets or the Cemex Business, but not to the extent that they relate to
the Retained Cemex Assets or the Retained Cemex Liabilities; and
11. Goodwill. Any and all goodwill associated principally with the Cemex
Business.
Schedule 1.2(a)-1
-----------------
Cemex Land
- --------------------------------------------------------------------------------
City State County Street Address
- --------------------------------------------------------------------------------
Port St. Joe Fl Gulf Hwy 71 South
- --------------------------------------------------------------------------------
Mossey Head Fl Walton 647 East Bay Loop
- --------------------------------------------------------------------------------
Panama City FL Bay 1810 MLK
- --------------------------------------------------------------------------------
Panama City FL Bay 12324 Panama City Beach
- --------------------------------------------------------------------------------
Tallahassee FL Leon 901 Mosley Street
- --------------------------------------------------------------------------------
Navarre FL Santa Rosa 279 Ola Broxson Road
- --------------------------------------------------------------------------------
Pensacola FL Escambia 100 E. Olive Road
- --------------------------------------------------------------------------------
Destin FL Okaloosa 820 Beach Drive
- --------------------------------------------------------------------------------
Crestview FL Okaloosa 4566 Old Antioch Road
- --------------------------------------------------------------------------------
Ft. Walton Beach FL Okaloosa 216 Race Track Road
- --------------------------------------------------------------------------------
Tifton GA Tift 130 East 9th Street
- --------------------------------------------------------------------------------
Americus GA Sumter 881 Spring Street
- --------------------------------------------------------------------------------
LaGrange GA Troup Cemex to provide
- --------------------------------------------------------------------------------
Fort Valley GA Peach 5102 Anthoine Street
- --------------------------------------------------------------------------------
Warner Robbins GA Houston 105 Plantation Road
- --------------------------------------------------------------------------------
Montezuma GA Macon 161 Airport Road
- --------------------------------------------------------------------------------
Fitzgerald GA Ben Hill 131 Appomattox Road
- --------------------------------------------------------------------------------
Perry GA Houston 106 Industrial Drive
- --------------------------------------------------------------------------------
Cordele GA Crisp 155 Market Avenue
- --------------------------------------------------------------------------------
Waycross GA Pierce 6219 Bowen Road
- --------------------------------------------------------------------------------
Ashburn GA Turner Highway 159
- --------------------------------------------------------------------------------
Schedule 1.2(b)
---------------
Cemex Retained Assets
1. Cash. All cash, bank balances, money market accounts, moneys in
possession of banks and other depositories, term or term deposits and
similar cash equivalents and cash items of, owned or held by or for the
account of Cemex, Inc.;
2. Corporate and Other Records. The corporate books and records, including
stock certificates, treasury stock, stock transfer records, corporate
seals and minute books of Cemex, Inc. (i) which are not used in or
necessary for the conduct of the Cemex Business and (ii) which are not
located on the Cemex Real Property or are not within the possession or
control of those persons employed to work principally for the Cemex
Business, (iii) employee files for employees other than the Cemex
Transferred Employees, (iv) Cemex, Inc.'s Tax Returns and any tax
supporting information related thereto, and (v) any and all records
related to pending or completed litigation and claims;
3. Insurance. Any and all policies of insurance, whether or not covering
the Cemex Assets or the Cemex Business, that are or have been
maintained or managed through Cemex, Inc. or any of its Affiliates,
including general liability, property, casualty, product liability and
workers' compensation insurance (the "Cemex Retained Policies"),
including any and all amounts recovered by Cemex, Inc. under such Cemex
Retained Policies;
4. Intellectual Property. All intellectual property of Cemex, Inc. and its
Affiliates, whether or not used primarily in or necessary for the
conduct of the Cemex Business, including Cemex, Inc.'s and its
Affiliates' patents, trade secrets, copyrights, trademarks, trade
names, logos, slogans, internet domain names, licenses and software,
and any goodwill related to the foregoing including any and all rights
(including any common law trademark rights) to the names Cemex and
Cemex, Inc. (such names, collectively, the "Cemex Retained Names");
5. Intracompany Receivables. All outstanding amounts, including accounts
receivable, owing to the Cemex Business from other businesses of Cemex,
Inc. or Cemex, Inc. 's Affiliates (the "Cemex Intracompany
Receivables");
6. Contracts. All rights and benefits of Cemex, Inc. and its Affiliates
in, to or under the contracts listed on Schedule 1.2(b)-6;
7. Accounts Receivable. Cemex, Inc.'s and its Affiliates' accounts
receivable arising out of the conduct of the Cemex Business and
outstanding as of the Contribution Date, including any payments
received by Cemex, Inc. or any of its Affiliates with respect thereto
on or after the Contribution Date, and unpaid interest accrued on any
accounts receivable and any security or collateral relating thereto
(collectively, "Cemex Accounts Receivable");
8. Others. Items set forth on Schedule 1.2(b)-8.
Schedule 1.2(b)-6
-----------------
Retained Contracts
1. Master Lease Agreement, dated as of March 9, 2000, between Banc One
Leasing Corporation, as Lessor, and Southdown, Inc., as Lessee.
2. Master Lease Agreement 07709-00400, dated as of April 16, 2004, among
Bank of America Leasing & Capital, LLC, as Lessor, and Cemex, Inc.,
Cemex Cement, Inc., Cemex Cement Texas, L.P., Cemex Construction
Materials, L.P., Pacific Coast Cement Corporation, Cemex California
Cement LLP, Cemex Central Plains Cement, LLC, and Kosmos Cement
Company, as Lessees.
3. Equipment Lease, dated as of May 17, 2002, between First Union
Commercial Corporation, as Lessor, and Cemex, Inc., as Lessee.
4. Master Lease Agreement, dated as of August 1, 1997, between General
Electric Capital Corporation, as Lessor, and Sunbelt Asphalt &
Materials, Inc., as Lessee.
5. Master Lease Agreement, dated as of July 25, 2003, between Lasalle
National Leasing Corporation, as Lessor, and Cemex, Inc., as Lessee.
6. Lease Agreement, dated as of June, 2004, among RBS Lombard, Inc., as
Lessor, and Cemex, Inc., Cemex Cement, Inc., Cemex Cement of Texas,
L.P., Cemex Construction Materials, L.P., Cemex Pacific Coast Cement
Corporation, Cemex California Cement LLC, Cemex Central Plains Cement
LLC, and Kosmos Cement Company, as Lessees.
Schedule 1.2(b)-8
-----------------
Other Retained Assets
1. All Allied Assets as defined in the Ready Mix LLC Agreement.
Schedule 4.1(a)(xv)
-------------------
CASH CONTRIBUTED TO READY MIX LLC
BANK ACCOUNTS BEING CONTRIBUTED
REGIONS BANK $ 18,077,515.80
UNION PLANTERS BANK $ 104,743.53
SECURITY BANK $ 676,869.73
GULF STATE CUMMUNITY BANK $ 79,263.22
PEOPLES BANK & TRUST $ 11,581.30
CHARTER BANK $ 2,393.12
THE CITIZENS BANK $ 6,199.72
TROY BANK & TRUST $ 54,067.91
FIRST PEOPLES BANK $ 12,824.77
REGIONS BANK (REYNOLDS READY MIX, L.L.C. 50.1%) (1) $ 4,170,706.26
REGIONS BANK (RIVER CITY INDUSTRIES 50%) (2) $ 354,527.42
--------------------------
TOTAL ACCOUNTS BEING CONTRIBUTED $ 23,550,692.78
CASH CONTRIBUTION (BY WIRE TRANSFER)
READY MIX USA, LLC $ 4,594,222.32
ACCOUNT#: 0509060999, REGIONS BANK, ROUTING #: 062005690
--------------------------
TOTAL CASH CONTRIBUTION BY RMUSA TO READY MIX LLC $ 28,144,915.10
(1) REYNOLDS READY MIX, L.L.C. TOTAL CASH BALANCE IS $8,324,763.00.
ACCOUNT NUMBERS: 2501028471, 2501028701, 0603039634, 0603039645,
0603039568, 0603039557 & (2904378741)
(2) RIVER CITY INDUSTRIES TOTAL CASH BALANCE IS $709,054.84
ACCOUNT NUMBERS: 1906500581 & (1906500383)
Schedule 5.1
------------
RMUSA Assumed Liabilities
1. Assumed Contracts. Subject to Section 4.4, all liabilities and
obligations of RMUSA arising after the Contribution under the RMUSA
Assumed Contracts. RMUSA and Cemex hereby agree that RMUSA shall assign
to Company, and Company shall assume from RMUSA, all of RMUSA's rights
and obligations under that certain Memorandum of Agreement with Greene
Group, Inc. for a Gift to Crimson Tide Foundation, whereby RMUSA has
pledged to make an annual gift of $1,000,000 to the University of
Alabama beginning in 2005 and ending in 2015. For the avoidance of
doubt, Company shall not assume any liabilities or obligations arising
out of any breach of or default under such RMUSA Assumed Contracts by
RMUSA that occurred prior to the Contribution;
2. Real Property. Except as set forth in Section 2.2 and 6.8, all
liabilities and obligations relating to, or occurring or existing in
connection with, or arising out of, the ownership and use of the RMUSA
Real Property, arising after the Contribution;
3. Product Liability. Claims for product warranty, product liability,
refunds, returns, personal injury and property damage, and all other
liabilities and obligations, relating to products sold or services
provided by Company after the Contribution;
4. Post Closing Liabilities. Any liability, claim or obligation which is
based on events or conditions occurring or arising out of the RMUSA
Business as operated by Company after the Contribution or the
ownership, possession, use or sale of the RMUSA Assets by Company after
the Contribution (but, in each case, only to the extent such liability,
claim or obligation is based on events or conditions that occur or
arise for the first time after the Contribution);
5. Taxes (excluding transfer and income Taxes). All liabilities and
obligations related to Taxes (excluding transfer and income Taxes) to
the extent due and payable after the Contribution;
6. Accounts Payable. The RMUSA Accounts Payable;
7. WARN. Any liabilities or obligations of RMUSA arising under the Worker
Adjustment and Retraining Notification Act, 29 U.S.C. ss.ss. 2101 2109
("WARN") to the RMUSA Business Employees arising out of a "plant
closing" or "mass layoff" (as those terms are defined under WARN)
occurring as of or after the Contribution; and
8. Environmental Liabilities. (a) The RMUSA Environmental Liabilities
(except to the extent that such liabilities are subject to
indemnification pursuant to Section 6.8); and (b) any damages, claims,
losses, liabilities and expenses that may be incurred as a result of
the presence of Hazardous Materials at the RMUSA Real Property or
property located in the vicinity of the RMUSA Real Property that
results from the ownership, possession, use, occupation, construction
and/or improvement to or operation of the RMUSA Business or RMUSA Real
Property, that exists as of the Contribution Date but is not otherwise
a RMUSA Environmental Condition as defined in Section 8.7(a).
Schedule 5.2
------------
Cemex Assumed Liabilities
1. Assumed Contracts. Subject to Section 4.4, all liabilities and
obligations of Cemex, Inc. arising after the Contribution under the
Cemex Assumed Contracts and any and all obligations by Cemex, Inc. or
any of its Affiliates to guarantee or support obligations of the
Company or any of its Subsidiaries under any of the Assumed Contracts.
For the avoidance of doubt, Company shall not assume any liabilities or
obligations arising out of any breach of or default under such Cemex
Assumed Contracts by Cemex, Inc. that occurred prior to the
Contribution;
2. Real Property. Except as set forth in Section 2.2 and 6.7, all
liabilities and obligations relating to, or occurring or existing in
connection with, or arising out of, the ownership and use of the Cemex
Real Property, arising after the Contribution;
3. Product Liability. Claims for product warranty, product liability,
refunds, returns, personal injury and property damage, and all other
liabilities and obligations, relating to products sold or services
provided by Company after the Contribution;
4. Post Closing Liabilities. Any liability, claim or obligation which is
based on events or conditions occurring or arising out of the Cemex
Business as operated by Company after the Contribution or the
ownership, possession, use or sale of the Cemex Assets by Company after
the Contribution (but, in each case, only to the extent such liability,
claim or obligation is based on events or conditions that occur or
arise for the first time after the Contribution);
5. Taxes (excluding transfer and income Taxes). All liabilities and
obligations related to Taxes (excluding transfer and income Taxes) to
the extent due and payable after the Contribution;
6. WARN. Any liabilities or obligations of Cemex arising under WARN to the
Cemex Business Employees arising out of a "plant closing" or "mass
layoff" (as those terms are defined under WARN) occurring as of or
after the Contribution.
7. Environmental Liabilities. (a) The Cemex Environmental Liabilities
(except to the extent that such liabilities are subject to
indemnification pursuant to Section 6.7); and (b) any damages, claims,
losses, liabilities and expenses that may be incurred as a result of
the presence of Hazardous Materials at the Cemex Real Property or
property located in the vicinity of the Cemex Real Property that
results from the ownership, possession, use, occupation, construction
and/or improvement to or operation of the Cemex Business or Cemex Real
Property, that exists as of the Contribution Date but is not otherwise
a Cemex Environmental Condition as defined in Section 7.7(a).
Exhibit A
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Form of Cemex Lease Assignment
See attached.
Exhibit B
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Form of RMUSA Lease Assignment
See attached.