UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ______)*
U.S. CONCRETE, INC.
(Name of Issuer)
Common Stock, par value $.001 per share
(Title of Class of Securities)
90333L 10 2
(CUSIP Number)
Thomas J. Albanese
15435 Pepper Lane
Saratoga, California 95070
(408) 293-6272
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
May 28, 1999
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box [ ].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss.240.13d-7 for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this coverpage shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of 4
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<TABLE>
SCHEDULE 13D
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CUSIP No. 90333L 10 2 Page 2 of 4 Pages
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<CAPTION>
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<S> <C>
1 NAME OF REPORTING PERSON
SS OR IRS IDENTIFICATION NO OF ABOVE PERSON
Thomas J. Albanese
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)
[ ]
(b)
[ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR
2(E) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
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NUMBER OF SHARES 7 SOLE VOTING POWER 1,313,574
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BENEFICIALLY OWNED 8 SHARED VOTING POWER -0-
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BY EACH REPORTING 9 SOLE DISPOSITIVE POWER 1,313,574
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PERSON WITH 10 SHARED DISPOSITIVE POWER -0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,313,574
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.1%
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14 TYPE OF REPORTING PERSON* IN
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</TABLE>
<PAGE>
<TABLE>
SCHEDULE 13D
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CUSIP No. 90333L 10 2 Page 3 of 4 Pages
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<CAPTION>
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<S> <C>
1 NAME OF REPORTING PERSON
SS OR IRS IDENTIFICATION NO OF ABOVE PERSON
Maureen H. Albanese
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)
[ ]
(b)
[ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR
2(E) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
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NUMBER OF SHARES 7 SOLE VOTING POWER 1,313,574
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BENEFICIALLY OWNED 8 SHARED VOTING POWER -0-
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BY EACH REPORTING 9 SOLE DISPOSITIVE POWER 1,313,574
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PERSON WITH 10 SHARED DISPOSITIVE POWER -0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,313,574
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.1%
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14 TYPE OF REPORTING PERSON* IN
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<FN>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
</FN>
</TABLE>
<PAGE>
<TABLE>
SCHEDULE 13D
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CUSIP No. 90333L 10 2 Page 4 of 4 Pages
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<CAPTION>
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<S> <C>
1 NAME OF REPORTING PERSON
SS OR IRS IDENTIFICATION NO OF ABOVE PERSON
Thomas and Maureen Albanese Revocable Trust Agreement Dated January 27, 1981, as amended
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)
[ ]
(b)
[ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR
2(E) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
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NUMBER OF SHARES 7 SOLE VOTING POWER 1,313,574
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BENEFICIALLY OWNED 8 SHARED VOTING POWER -0-
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BY EACH REPORTING 9 SOLE DISPOSITIVE POWER 1,313,574
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PERSON WITH 10 SHARED DISPOSITIVE POWER -0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,313,574
- ------------------------------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.1%
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14 TYPE OF REPORTING PERSON* 00 - Trust
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<FN>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
</FN>
</TABLE>
<PAGE>
ADDENDUM TO SCHEDULE 13D
On March 22, 1999, Central Concrete Supply Co., Inc., a California
corporation ("Central") and its shareholders, including William T. Albanese and
Mari C. Albanese, each as a co-trustee of the William and Mari Albanese
Revocable Trust Agreement dated March 17, 1981, as amended (the "William
Albanese Trust") and Thomas J. Albanese and Maureen H. Albanese, each as a
co-trustee of the Thomas and Maureen Albanese Revocable Trust Agreement dated
January 27, 1981, as amended (the "Thomas Albanese Trust"), entered into an
Agreement and Plan of Reorganization, in the form attached hereto as Exhibit A
(the "Reorganization Agreement") with U.S. Concrete, Inc., a Delaware
corporation (the "Issuer"), providing for the acquisition of all of the
outstanding shares of Central by the Issuer.
Pursuant to the Reorganization Agreement and upon the closing of the
transactions contemplated thereby on May 28, 1999, the Issuer acquired all of
the outstanding shares of Central in exchange for the payment of an aggregate
purchase price of $3,888,392.02 in cash (excluding any increases or decreases
which may have resulted from post-closing working-capital adjustments) and
3,120,130 shares of the Issuer's common stock, par value $.001 per share (the
"Common Stock").
As shareholders of Central, William T. Albanese and Mari C. Albanese
as co-trustees of the William Albanese Trust received from the Issuer cash in
the approximate amount of $1,637,008.77 (excludes post-closing adjustments) and
1,313,574 shares of the Issuer's Common Stock and Thomas J. Albanese and Maureen
H. Albanese as co-trustees of the Thomas Albanese Trust received from the Issuer
cash in the approximate amount of $1,637,008.77 (excludes post-closing
adjustments) and 1,313,574 shares of the Issuer's Common Stock.
Thus, William T. Albanese and Mari C. Albanese each can be deemed to
"beneficially own" 1,313,574 shares of the Issuer's Common Stock as co-trustees
of the William Albanese Trust, and if considered a separate legal entity, the
William Albanese Trust itself can also be deemed to own such 1,313,574 shares of
Common Stock held by it through the above-named co-trustees.
Further, Thomas J. Albanese and Maureen H. Albanese can be deemed to
"beneficially own" an additional 1,313,574 shares of the Issuer's Common Stock
as co-trustees of the Thomas Albanese Trust, and if considered a separate legal
entity, the Thomas Albanese Trust itself can also be deemed to own such
1,313,574 shares of Common Stock held by it through the above-named co-trustees.
In addition to the Agreement and Plan of Reorganization described
above, the Issuer simultaneously entered into Agreements and Plans of
Reorganization with five (5) other corporations and subsequently filed its Form
S-1 Registration Statement to register its shares for an initial public
offering.
Item 1. Security and Issuer
The class of securities to which this Schedule 13D relates is the
Common Stock, par value $.001 per share (defined above as the "Common Stock") of
U.S. Concrete, Inc., a Delaware corporation (defined above as the "Issuer"),
whose principal executive offices are located at 1360 Post Oak Boulevard, Suite
800, Houston, Texas 77056.
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Item 2. Identity and Background
The Thomas and Maureen Albanese Revocable Trust Agreement dated
January 27, 1981, as amended (defined above as the "Thomas Albanese Trust") is a
trust formed under the laws of the State of California. Its principal address is
15435 Pepper Lane, Saratoga, California 95070. Thomas J. Albanese and Maureen H.
Albanese are the co-trustees of the Thomas Albanese Trust.
Thomas J. Albanese is a citizen of the United States whose principal
business address is 610 McKendrie Street, San Jose, California 95110. Mr.
Albanese's principal occupation is Executive Vice President, Sales of Central
Concrete Supply Co., Inc. which has the same business address as described
above.
Maureen H. Albanese is a homemaker and is a citizen of the United
States whose residence address is 15435 Pepper Lane, Saratoga, California 95070.
None of the persons or entities reporting hereunder, nor, to their
knowledge, any executive officer, director or controlling person of any of them,
has, during the last five years, been convicted in any criminal proceeding,
excluding traffic violations or similar misdemeanors.
None of the persons or entities reporting hereunder, nor, to their
knowledge, any executive officer, director or controlling person of any of them,
has, during the last five years, been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction which would have
resulted in or caused him, her, or it to be subject to a judgment, decree, or
final order enjoining violations of, or prohibiting or mandating activities
subject to, federal or state securities laws, or a finding of any violation with
respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
The shares of the Issuer's Common Stock owned by Mr. Albanese and Ms.
Albanese, in the name of the Thomas Albanese Trust were acquired as of May 28,
1999 as described in the introductory paragraphs of this Addendum. The source of
funds used by them in making the purchases was the shares of Central previously
held by them as trustees of the Thomas Albanese Trust which were transferred to
the Issuer as part of the transactions described in the introductory paragraphs
of this Addendum.
Item 4. Purpose of Transaction
The shares acquired by Mr. Albanese, Ms. Albanese, and the Thomas
Albanese Trust have been acquired for investment purposes.
Except as set forth in the description of the transactions in the
introductory paragraphs of this Addendum, Mr. Albanese, Ms. Albanese, and the
Thomas Albanese Trust have no plans or proposals that relate to or that would
result in any of the actions specified in clauses (a) through (j) of Item 4.
Item 5. Interest in Securities of the Issuer
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(a)-(b) Reference is made to Items 7 through 13 on the Schedule 13D
and to Item 2 of the Addendum to this Schedule 13D, which items are incorporated
by reference herein, for the description of the beneficial ownership of each
reporting person herein.
(c) None of the persons named in Item 5(a) has effected any
transactions in the Issuer's Common Stock during the past 60 days, except as set
forth herein.
(d)-(e) Paragraphs (d) through (e) of Item 5 are inapplicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer
Not applicable.
Item 7. Material to be Filed as Exhibits
Exhibit A - Agreement and Plan of Reorganization dated March 22, 1999
by and among the Issuer, Central Concrete Supply Co., Inc., Central Concrete
Acquisition Inc., and the shareholders of Central, including William T. Albanese
and Mari C. Albanese as co-trustees of the William Albanese Family Trust and
Thomas J. Albanese and Maureen H. Albanese as co-trustees of the Thomas Albanese
Trust.
Exhibit B - Agreement with Respect to Group Filing pursuant to
Regulation 240.13d- 1(k)(1).
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SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
Dated: September 3, 1999
THOMAS AND MAUREEN ALBANESE
REVOCABLE TRUST AGREEMENT DATED
JANUARY 27, 1981, AS AMENDED
/s/ Thomas J. Albanese /s/ Thomas J. Albanese
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Thomas J. Albanese By: Thomas J. Albanese
Its: Co-Trustee
/s/ Maureen H. Albanese /s/ Maureen H. Albanese
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Maureen H. Albanese By: Maureen H. Albanese
Its: Co-Trustee
4
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EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
5
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
dated as of March 22, 1999
by and among
U.S. CONCRETE, INC.,
CENTRAL CONCRETE ACQUISITION INC.,
CENTRAL CONCRETE SUPPLY CO., INC.
and
the STOCKHOLDERS named herein
Reverse Triangular Merger; Non-Delaware Company; Multiple Stockholders; Company
Financial Statements
6
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made
as of March 22, 1999 by and among U.S. Concrete, Inc., a Delaware corporation
("USC"), Central Concrete Acquisition Inc., a Delaware corporation and a wholly
owned subsidiary of USC ("USC Sub"), Central Concrete Supply Co., Inc., a
California corporation (the "Company"), and the persons and trustees listed on
the signature page hereof under the caption "Stockholders" (collectively, the
"Stockholders," and each of those persons, individually, a "Stockholder").
PRELIMINARY STATEMENT
The parties to this Agreement have determined it is in their best
long-term interests to effect a business combination pursuant to which:
(a) USC Sub will merge into the Company on the terms and subject to
the conditions set forth herein (that merger being the "Merger");
(b) USC will acquire the stock of all or some of the entities listed
in the accompanying Addendum 1 (each, other than the Company, an "Other Founding
Company" and, collectively with the Company, the "Founding Companies") pursuant
to agreements that are (i) similar to this Agreement and (ii) entered into among
those entities and their equity owners, USC and subsidiaries of USC
(collectively, the "Other Agreements"); and
(c) USC will effect a public offering of shares of its common stock
and issue and sell those shares.
The respective boards of directors of USC, USC Sub and the Company
have approved and adopted this Agreement to effect a transaction subject to
Section 351 of the Code.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements, representations and undertakings this Agreement contains, the
parties hereto hereby agree as follows:
Paragraph 1 Certain Defined Terms. The following terms this Agreement
uses have the meanings this Paragraph 1 specifies. Capitalized terms this
Agreement uses, but this Paragraph 1 does not define, have the meanings the
preamble to this Agreement, the Preliminary Statement above or Article IX of the
Uniform Provisions, as the case may be, specifies.
"Acquired Business" means the Company.
"Acquisition" means the Merger.
"Acquisition Consideration" has the meaning Paragraph 2 specifies.
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"Additional Cash Consideration" means the product of (i) the quotient
obtained from dividing (A) the sum of (i) the amount of cash Paragraph B of
Schedule 2(D) sets forth in dollars and (ii) the 1998 Restricted Payment Amount
by (B) $8.50 multiplied by (ii) the amount, if any, by which (A) the IPO Price
exceeds (B) $8.50.
"Ceiling Amount" means the sum of (i) $35,361,472, (ii) the Additional
Cash Consideration, if any, (iii) the Positive Net Adjustment, if any, and (iv)
the Negative Net Adjustment, if any; provided, however, that, for purposes of
Sections 6.06(b) and 7.06(b), the Ceiling Amount is $26,521,104
"CGCL" means the General Corporation Law of the State of California.
"Closing" has the meaning Paragraph 3 specifies.
"Closing Date" means the IPO Pricing Date.
"Company Capital Stock" means the Common Stock, no par value, of the
Company.
"Company Financial Statements" means the audited balance sheets of the
Company as of December 31, 1997 and December 31, 1998 and the related audited
statements of operations, cash flows and shareholders' equity for each of the
years in the three-year period ended December 31, 1998, together with the
related audit report of the Independent Accountants.
"Counsel for the Company and the Stockholders" means Ferrari, Olsen,
Ottoboni & Bebb, LLP.
"Counsel for USC and USC Sub" means Baker & Botts, L.L.P.
"Current Balance Sheet" means the audited balance sheet of the Company
as of December 31, 1998.
"Current Balance Sheet Date" means December 31, 1998.
"Current Balance Sheet Date Working Capital" means $4,861,000.
"Effective Date" means the IPO Closing Date.
"Executive Employment Agreements" means the Employment Agreement
entered into effective as of the IPO Closing Date between the Company and each
of William T. Albanese and Thomas J. Albanese.
"Facilities" means the real property and improvements located at 610
McKendrie Street, San Jose California and 755 Stockton Avenue, San Jose,
California, as more fully described in the Facilities Lease.
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"Facilities Leases" means the leases in the form thereof attached
hereto as Exhibit 1-A and Exhibit 1-B pursuant to which the Stockholders will
lease the Facilities to the Company for the period and on the other terms
specified therein.
"Initial Financial Statements" means the Company Financial Statements.
"Minimum Cash Balance" means $500,000.
"Pro Rata Share" of a Stockholder means: (i) 42.10% in the case of
William T. Albanese and Mari C. Albanese (jointly), trustees of the William T.
Albanese 1981 Trust, as amended; (ii) 42.10% in the case of Thomas J. Albanese
and Maureen H. Albanese (jointly), trustees of the Thomas T. Albanese Trust, as
amended; (iii) 4.17% in the case of Daniel C. Albanese; (iv) 4.17% in the case
of Lauren M. Albanese; (v) 2.49% in the case of Nicole M. Albanese; (vi) 2.49%
in the case of Jennifer A. Albanese; and (vii) 2.48% in the case of Michelle L.
Albanese.
"Responsible Officer" means William T. Albanese.
"Surviving Corporation" means the Company, which the Certificate of
Merger will designate as the surviving corporation of the Merger.
"Termination Date" means May 31, 1999; provided, however, that if (i)
USC has filed the Registration Statement with the SEC prior to that date and
(ii) the Stockholders would not be entitled to terminate this Agreement on that
date otherwise than pursuant to Section 11.01(a)(ii), "Termination Date" means
September 30, 1999.
"Uniform Provisions" has the meaning Paragraph 4 specifies.
"USC Award Agreements" means the award agreements, each in the form of
Exhibit 1-C, pursuant to which USC, on the Closing Date, will grant to certain
key employees of the Company William T. Albanese has designated by written
notice to USC and USC has approved by written notice to the Responsible Officer
(which approval USC will not unreasonably withhold) prior to the Closing Date,
pursuant to the U.S. Concrete, Inc. 1999 Employee Incentive Plan, or other
similar stock option plan, options to purchase an aggregate not to exceed
166,529 shares of USC Common Stock at a per share exercise price equal to the
IPO Price.
"USC Sub Common Stock" means the Common Stock, par value $1.00 per
share, of USC Sub.
"1998 Restricted Payment Amount" means $4,952,000.
Paragraph 2 (A) Certificate of Merger. Subject to the terms and
conditions hereof, the Company will cause the Certificate of Merger to be duly
executed and delivered on or promptly after the Closing Date and filed with the
Secretary of State of the State of California and the Secretary of State of the
State of Delaware.
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(B) The Effective Time. The effective time of the Merger (the
"Effective Time") will be the time on the Effective Date which the Certificate
of Merger specifies or, if the Certificate of Merger does not specify another
time, 8:00 a.m., Houston, Texas time, on the Effective Date.
(C) Certain Effects of the Merger. At and as of the Effective Time,
(1) USC Sub will be merged with and into the Company in accordance with the
provisions of the CGCL and the DGCL, (2) USC Sub will cease to exist as a
separate legal entity, (3) the articles of incorporation of the Company will be
amended to change the Company's authorized shares of capital stock to 1,000
shares, par value $1.00 per share, of Common Stock, (4) the Company will be the
Surviving Corporation and, as such, will, all with the effect provided by the
CGCL and the DGCL, (a) possess all the properties and rights, and be subject to
all the restrictions and duties, of the Company and USC Sub and (b) be governed
by the laws of the State of California, (5) the Charter Documents of the Company
then in effect (after giving effect to the amendment to the Company's articles
of incorporation specified in clause (3) of this sentence) will become and
thereafter remain (until changed in accordance with (a) applicable law (in the
case of the articles of incorporation) or (b) their terms (in the case of the
bylaws)) the Charter Documents of the Surviving Corporation, (6) the initial
board of directors of the Surviving Corporation will be the persons Schedule
2(C) names as such, and those persons will hold the office of director of the
Surviving Corporation, subject to the provisions of the applicable laws of the
State of California and the Charter Documents of the Surviving Corporation, and
(7) the initial officers of the Surviving Corporation will be as Schedule 2(C)
sets forth, and each of those persons will serve in each office Schedule 2(C)
specifies for that person, subject to the provisions of the Charter Documents of
the Surviving Corporation, until that person's successor is duly elected to,
and, if necessary, qualified for, that office.
(D) Effect of the Merger on Capital Stock. As of the Effective Time,
as a result of the Merger and without any action on the part of any holder
thereof:
(1) the shares of Company Capital Stock issued and outstanding
immediately prior to the Effective Time will (a) convert into the right
to receive, subject to the provisions of Paragraph 2(E), without
interest, on surrender of the certificates evidencing those shares, the
amount of cash and the number of whole and fractional shares of USC
Common Stock Schedule 2(D) sets forth and, if any, the Additional Cash
Consideration (the "Acquisition Consideration"), (b) cease to be
outstanding and to exist and (c) be canceled and retired;
(2) each share of Company Capital Stock held in the treasury of the
Company or any Company Subsidiary will (a) cease to be outstanding and to
exist and (b) be canceled and retired; and
(3) each share of USC Sub Common Stock issued and outstanding
immediately prior to the Effective Time will convert into one share of
Common Stock, par value $1.00 per share, of the Surviving Corporation and
the shares of Common Stock of the Surviving Corporation issued on that
conversion will constitute all the issued and outstanding shares of
Capital Stock of the Surviving Corporation.
Each holder of a certificate representing shares of Company Capital Stock
immediately prior to the Effective Time will, as of the Effective Time and
thereafter, cease to have any rights respecting those
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shares other than the right to receive, subject to the provisions of Paragraph
2(E), without interest, the Acquisition Consideration and the additional cash,
if any, owing with respect to those shares as provided in Paragraph 2(F).
(E) Delivery, Exchange and Payment. (1) At or after the Effective
Time: (a) the Stockholders, as holders of certificates representing shares of
Company Capital Stock, will, on surrender of those certificates to USC (or any
agent that USC may appoint for purposes of this Paragraph 2(E)), receive,
subject to the provisions of this Paragraph 2(E) and Paragraph 2(F), the
Acquisition Consideration; and (b) until any certificate representing Company
Capital Stock has been surrendered and replaced pursuant to this Paragraph 2(E),
that certificate will, for all purposes, be deemed to evidence ownership of the
number of whole shares of USC Common Stock included in the Acquisition
Consideration payable in respect of that certificate pursuant to Paragraph 2(D).
All shares of USC Common Stock issuable in the Merger will be deemed for all
purposes to have been issued by USC at the Effective Time.
(2) Each Stockholder will deliver to USC (or any agent that USC may
appoint for purposes of this Paragraph 2(E)) on or before the IPO Closing Date
the certificates representing all the Company Capital Stock owned by that
Stockholder, duly endorsed in blank, or accompanied by stock powers in blank
duly executed, by that Person, and with all necessary transfer tax and other
revenue stamps, acquired at that Person's expense, affixed and canceled. Each
Stockholder will cure any deficiencies in the endorsement of the certificates or
other documents of conveyance respecting, or in the stock powers accompanying,
the certificates representing Company Capital Stock that Person delivers.
(3) No dividends (or interest) or other distributions declared or
earned after the Effective Time with respect to USC Common Stock and payable to
the holders of record thereof after the Effective Time will be paid to the
holder of any unsurrendered certificates representing shares of Company Capital
Stock for which whole shares of USC Common Stock have been issued in the Merger
until those certificates are surrendered as provided herein, but (a) on that
surrender USC will cause to be paid, to the Person in whose name the
certificates representing those whole shares of USC Common Stock will then be
issued, the amount of dividends or other distributions previously paid with
respect to those whole shares of USC Common Stock with a record date, or which
have accrued, subsequent to the Effective Time, but prior to that surrender, and
the amount of any cash payable to that Person for and in lieu of fractional
shares pursuant to Paragraph 2(F) and (b) at the appropriate payment date or as
soon as practicable thereafter, USC will cause to be paid to that Person the
amount of dividends or other distributions with a record date, or which have
been accrued, subsequent to the Effective Time, but which are not payable until
a date subsequent to surrender, which are payable with respect to those whole
shares of USC Common Stock, subject in all cases to any applicable escheat laws.
No interest will be payable with respect to the payment of those dividends or
other distributions or cash for and in lieu of fractional shares on surrender of
outstanding certificates.
(F) Notwithstanding any other provision herein, USC will not issue any
fractional shares of USC Common Stock, and if any Stockholder would be entitled
hereunder to receive a fractional share of USC Common Stock but for this
Paragraph 2(F), that Stockholder will be entitled hereunder to receive a cash
payment for and in lieu thereof in the amount (rounded upward to the
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<PAGE>
nearest whole cent) equal to that Stockholder's fractional interest in a share
of USC Common Stock multiplied by the IPO Price.
Paragraph 3 The Closing. On or before the Closing Date, the parties
hereto will take all actions necessary to (A) effect the Acquisition (including,
as permitted by the CGCL and the DGCL, (i) the execution of a Certificate of
Merger (a) meeting the requirements of the CGCL and the DGCL and (b) providing
that the Merger will become effective on the Effective Date and (ii) the
transmitting for filing of that Certificate of Merger with the Secretary of
State of the State of California and the Secretary of State of the State of
Delaware), (B) verify the existence and ownership of the certificates evidencing
the Company Capital Stock to be exchanged for the Acquisition Consideration
pursuant to Paragraph 2(E) and (C) satisfy the document delivery requirements on
which the obligations of the parties to effect the Acquisition and the other
transactions contemplated hereby are conditioned by the provisions of Article V
(all those actions collectively being the "Closing"). The Closing will take
place at the offices of Baker & Botts, L.L.P., 30th Floor, 910 Louisiana,
Houston, Texas at 10:00 a.m., Houston time, on the Closing Date, or at such
later time on the Closing Date as USC specifies by written notice to the
Responsible Officer. The actions taken at the Closing will not include the
delivery of the Company Capital Stock to USC or the payment of the Acquisition
Consideration to the Stockholders. Instead, on the IPO Closing Date, the Company
Capital Stock will be surrendered in exchange for the Acquisition Consideration
(with the cash portion of the Acquisition Consideration being paid by wire
transfer pursuant to instructions the Stockholders deliver to USC prior to
Closing or, in the absence of those instructions, a USC check), and all
transactions contemplated by this Agreement to be closed or completed on or
before the IPO Closing Date will be closed and completed, as the case may be.
Paragraph 4 Incorporation of Uniform Provisions. (A) The U.S.
Concrete, Inc. Uniform Provisions for the Acquisition of Founding Companies
attached hereto as Annex 1 (the "Uniform Provisions") hereby are incorporated in
this Agreement by this reference and constitute a part of this Agreement with
the same force and effect as if set forth at length herein.
(B) The Uniform Provisions are hereby amended by adding a Section 1.08
which reads in its entirety as follows:
12
<PAGE>
Section 1.08 Trusts.
(a) Schedule 1.08 sets forth the legal name of each Stockholder that
is a trustee (the "Trustees"), the name of the trust over which that
Trustee serves (each a "Trust"), the state or other jurisdiction which
governs that Trustee's duties with respect to that Trust, and the name of
each beneficiary of that Trust (the "Beneficiaries").
(b) There has not been any challenge to (i) the authority, appointment
or capacity of any Trustee to serve as such over the applicable Trust or
(ii) the validity of any Trust.
(c) Full and complete copies of all documents under which each Trust
was created and all documents otherwise pertaining to each Trust or the
duties and obligations of each Trustee serving over each Trust and all
amendments, supplements or modifications thereto have been provided to
USC.
(d) The Trustees set forth opposite the name of each Trust on Schedule
1.08 are the sole Trustees of that Trust and each Trustee listed is a
duly acting and qualified trustee of that Trust. Each of the Trustees has
all requisite power and authority to execute and deliver each Transaction
Document, to consummate the transactions contemplated thereby and to
perform all the terms and conditions thereof to be performed by that
Trustee.
(e) No notice is required to be given to and no consent or joinder is
required to be acquired from any Beneficiary in connection with the
Transaction Documents or any of the transactions contemplated thereby and
no objection has been received from any Beneficiary relating to the
Transaction Documents or any of the transactions contemplated thereby.
(C) Section 2.23(vi) is hereby amended by replacing "$25,000" with
"$50,000."
(D) Section 4.03 is hereby amended by adding at the end thereof the
following:
; provided, however, that the Company may make Restricted Payments to its
Stockholders as dividends consisting of: (i) cash or Permitted Promissory Notes
(valued at the principal amount thereof) in an aggregate amount not to exceed
the amount by which (A) the 1998 Restricted Payment Amount exceeds (B) the sum
of all Restricted Payments the Company has made from and after January 1, 1999
to the date of this Agreement; and (ii) Permitted Promissory Notes in an
aggregate principal amount not to exceed the 1999 Restricted Payment Amount. As
used herein, "Permitted Promissory Note" means an unsecured promissory note of
the Company which bears interest from the date of its issue until paid at the
rate of 6% per annum and will become due and payable no earlier than the
Adjustment Determination Date.
13
<PAGE>
(E) Section 6.02 is hereby amended by adding a second paragraph which
reads in its entirety as follows:
The Stockholders will have the right to prepare the initial draft of
the Company's income tax Returns for the period from January 1, 1999
through the Closing Date, provided that (i) they deliver such draft
Returns to USC at least 45 days prior to their due dates and (ii) they
prepare such draft Returns in accordance with the Company's past
practices and consistent with applicable Governmental Requirements. USC
will have the right to review and revise such draft Returns before
filing, provided that USC (i) will consult in good faith with the
Responsible Officer regarding any such revision before it makes such
filing and (ii) will not make any such revision without the consent of
the Responsible Officer (which will not be unreasonably withheld or
delayed) if such revision would be inconsistent with the Company's past
practices, to the extent those practices were consistent with applicable
Governmental Requirements. USC will not file any amendments to any income
tax Return covering any period ending on or prior to the Effective Date
without the consent of the Responsible Officer (which will not be
unreasonably withheld or delayed), unless USC determines that such
amendment is required by applicable Governmental Requirements.
(F) Notwithstanding the provisions of Section 10.07, Article VIII and
the rights and obligations thereunder of the parties thereto will be governed by
and construed in accordance with the substantive laws of the State of California
without regard to the conflicts of law provisions thereof.
Paragraph 5 Certain Conditions to Closing and Consummation. (A) The
obligations of the Stockholders with respect to the actions to be taken on the
IPO Closing Date are subject to the satisfaction of the following condition in
addition to those set forth or referred to in Section 5.02(b): (i) each of the
Executive Employment Agreements and the Facilities Leases then will be in full
force and effect and (ii) USC shall have tendered the USC Award Agreements to
the respective recipients thereof, duly signed on its behalf by an authorized
officer of USC.
(B) The obligations of USC and USC Sub with respect to the actions to
be taken on the IPO Closing Date are subject to the satisfaction of the
following condition in addition to those set forth or referred to in Section
5.03(b): each of the Executive Employment Agreements and the Facilities Leases
then will be in full force and effect.
Paragraph 6 Counterparts. This Agreement may be executed in multiple
counterparts, each of which will be an original, but all of which together will
constitute one and the same agreement.
Paragraph 7 Notices. For purposes of Section 10.06, notices will be
initially addressed to the Stockholders and the Company, as follows:
(A) if to a Stockholder, addressed to him or her at:
Mr. William T. Albanese and Mrs. Mari C. Albanese
17070 Lon Road
14
<PAGE>
Los Gatos, California 95033
or
Mr. Daniel C. Albanese
272 Bieber Avenue
San Jose, California 95123
or
Ms. Lauren M. Albanese
111 Edelen Avenue
Los Gatos, California 90530
or
Mr. Thomas J. Albanese and Mrs. Maureen H. Albanese
15435 Pepper Lane
Saratoga, California 95070
or
Ms. Nicole M. Albanese
15435 Pepper Lane
Saratoga, California 95070
or
Ms. Jennifer A. Albanese
15435 Pepper Lane
Saratoga, California 95070
or
Ms. Michelle L. Albanese
15435 Pepper Lane
Saratoga, California 95070
; and
(B) if to the Company, addressed to it at:
Central Concrete Supply Co., Inc.
610 McKendrie Street
San Jose, California 95110
Fax No.: (408) 294-3162
15
<PAGE>
Attn: William T. Albanese
with copies (which will not constitute notice for purposes of this
Agreement) to:
Ferrari, Olsen, Ottoboni & Bebb, LLP
333 West Santa Clara Street, Suite 700
San Jose, California 95113
Fax No.: (408) 280-0151
Attn: Richard S. Bebb
Paragraph 8 Abandonment of Merger. If this Agreement is terminated
pursuant to Section 11.01, the Merger will be deemed for all purposes to have
been abandoned and of no force or effect and, if the Certificate of Merger has
been filed with the Secretary of State of the Company's Organization State prior
to that termination, each of the Company and USC Sub is authorized to execute
and file with the Secretary of State of the Company's Organization State a
certificate of that termination pursuant to Section 110 of the CGCL.
[Signatures on following page]
16
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
U.S. CONCRETE, INC.
By: /s/ Eugene P. Martineau
Eugene P. Martineau
President and Chief Executive Officer
CENTRAL CONCRETE ACQUISITION INC.
By: /s/ Eugene P. Martineau
Eugene P. Martineau
President
CENTRAL CONCRETE SUPPLY CO., INC.
By: /s/ William T. Albanese
William T. Albanese
President
Stockholders:
/s/ William T. Albanese
William T. Albanese, trustee under the Revocable Trust
Agreement dated March 17, 1981, as amended, for the
benefit of William T. Albanese
/s/ Mari C. Albanese
Mari C. Albanese, trustee under the Revocable
Trust Agreement dated March 17, 1981, as amended,
the benefit of William T. Albanese
17
<PAGE>
/s/ Daniel C. Albanese
Daniel C. Albanese
/s/ Lauren M. Albanese Cerrito
Lauren M. Albanese Cerrito
/s/ Thomas J. Albanese
Thomas J. Albanese, trustee under the Revocable
Trust Agreement dated March 17, 1981, as amended,
for the benefit of Thomas J. Albanese
/s/ Maureen H. Albanese
Maureen H. Albanese, trustee under the Revocable
Trust Agreement dated March 17, 1981, as amended,
for the benefit of Thomas J. Albanese
/s/ Nicole M. Albanese
Nicole M. Albanese
/s/ Jennifer A. Albanese
Jennifer A. Albanese
/s/ Michelle L. Albanese
Michelle L. Albanese
18
<PAGE>
Each of the undersigned hereby joins in the execution of this
Agreement individually to be bound as if the undersigned was a Stockholder
individually for the purposes of Article VIII.
/s/ William T. Albanese
William T. Albanese
/s/ Maureen H. Albanese
Maureen H. Albanese
/s/ Thomas J. Albanese
Thomas J. Albanese
/s/ Mari C. Albanese
Mari C. Albanese
THE UNDERSIGNED, being the spouse of Lauren M. Albanese Cerrito,
hereby joins in the execution of this Agreement to reflect the undersigned's
understanding and agreement to the terms herein contained, and to consent to the
Merger and the conversion of the entire interest of that Stockholder in the
shares of Company Capital Stock (including any community interest the
undersigned may have in those shares) into that Stockholder's Pro Rata Share of
the Acquisition Consideration on the terms and for the consideration herein
expressed.
/s/ Joseph Cerrito
Joseph Cerrito
19
<PAGE>
ADDENDUM 1
to the
Agreement and Plan of Reorganization
to which
U.S. Concrete, Inc.
and
Central Concrete Supply Co., Inc.
are parties
A. Capitalized terms this Addendum uses, but does not define,
have the meanings the captioned Agreement specifies.
B. The Founding Companies are:
Baer Concrete, Incorporated
Bay Cities Building Materials Co., Inc.
Central Concrete Supply Co., Inc.
Opportunity Concrete Corporation
R.G. Evans/Associates d/b/a Santa Rosa Cast Products Co.
Walker's Concrete, Inc.
20
<PAGE>
SCHEDULE 2(C)
to the
Agreement and Plan of Reorganization
to which
U.S. Concrete, Inc.
and
Central Concrete Supply Co., Inc.
are parties
A. Capitalized terms this Schedule uses, but does not define,
have the meanings the captioned Agreement specifies.
B. The directors of the Surviving Corporation immediately
after the Effective Time are as follows: Eugene P. Martineau and Michael W.
Harlan.
C. The officers of the Surviving Corporation immediately after
the Effective Time are as follows:
President.................................................. William T. Albanese
Senior Vice President...................................... Eugene P. Martineau
Vice President, Treasurer and Secretary.................... Michael W. Harlan
End of Schedule
21
<PAGE>
SCHEDULE 2(D)
to the
Agreement and Plan of Reorganization
to which
U.S. Concrete, Inc.
and
Central Concrete Supply Co., Inc.
are parties
A. Capitalized terms this Schedule uses, but does not define,
have the meanings the captioned Agreement specifies.
B. Subject to increase by the amount of the Positive Net
Adjustment, if any, and to decrease by the amount of the Negative Net
Adjustment, if any, the aggregate Acquisition Consideration will be comprised of
(1) $3,888,368 in cash, (2) 3,120,130 shares of USC Common Stock and (3) the
Additional Cash Consideration.
C. Each Stockholder will be entitled to receive his Pro Rata
Share of the Acquisition Consideration pursuant to Paragraph 2(D), subject to
the provisions of Paragraphs 2(E) and 2(F).
End of Schedule
22
<PAGE>
Annex 1
- --------------------------------------------------------------------------------
U.S. CONCRETE, INC.
UNIFORM PROVISIONS
FOR
THE ACQUISITION OF FOUNDING COMPANIES
- --------------------------------------------------------------------------------
23
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C> <C>
ARTICLE I REPRESENTATIONS AND WARRANTIES OF EACH
STOCKHOLDER..................................................................................................1
Section 1.01 Ownership and Status of Company Capital Stock................................................................1
Section 1.02 Power of the Stockholder; Approval of the Acquisition........................................................1
Section 1.03 No Conflicts or Litigation...................................................................................2
Section 1.04 No Brokers...................................................................................................2
Section 1.05 Preemptive and Other Rights; Waiver; No Commitments..........................................................2
Section 1.06 Control of Related Businesses................................................................................2
Section 1.07 Accredited Investor Status; Sophistication; Review of Private
Placement Memorandum.........................................................................................3
ARTICLE II REPRESENTATIONS AND WARRANTIES OF
THE COMPANY AND THE STOCKHOLDERS.............................................................................3
Section 2.01 Organization.................................................................................................3
Section 2.02 Qualification................................................................................................4
Section 2.03 Authorization; Enforceability; Absence of Conflicts;
Required Consents............................................................................................4
Section 2.04 Charter Documents and Records; No Violation..................................................................5
Section 2.05 No Defaults..................................................................................................5
Section 2.06 Company Subsidiaries.........................................................................................5
Section 2.07 Controlling Affiliates.......................................................................................6
Section 2.08 Capital Stock of the Company and the Company Subsidiaries....................................................6
Section 2.09 Transactions in Capital Stock................................................................................6
Section 2.10 No Bonus Shares..............................................................................................6
Section 2.11 Predecessor Status; etc......................................................................................6
Section 2.12 Related Party Agreements.....................................................................................6
Section 2.13 Litigation...................................................................................................7
Section 2.14 Financial Statements; Disclosure.............................................................................7
Section 2.15 Compliance With Laws.........................................................................................8
Section 2.16 Certain Environmental Matters................................................................................9
Section 2.17 Liabilities and Obligations..................................................................................9
Section 2.18 Receivables.................................................................................................10
Section 2.19 Real Properties.............................................................................................10
Section 2.20 Other Tangible Assets.......................................................................................11
Section 2.21 Proprietary Rights..........................................................................................11
Section 2.22 Relations With Governments, etc.............................................................................11
Section 2.23 Commitments.................................................................................................12
Section 2.24 Capital Expenditures........................................................................................13
Section 2.25 Inventories.................................................................................................13
Section 2.26 Insurance...................................................................................................13
Section 2.27 Employee Matters............................................................................................14
Section 2.28 Compliance With ERISA.......................................................................................17
24
<PAGE>
Section 2.29 Taxes.......................................................................................................19
Section 2.30 Government Contracts........................................................................................20
Section 2.31 Absence of Changes..........................................................................................20
Section 2.32 Bank Relations; Powers of Attorney..........................................................................22
ARTICLE III REPRESENTATIONS AND WARRANTIES OF USC.......................................................................23
Section 3.01 Organization; Power.........................................................................................23
Section 3.02 Authorization; Enforceability; Absence of Conflicts;
Required Consents...........................................................................................23
Section 3.03 Charter Documents...........................................................................................24
Section 3.04 Capital Stock of USC and USC Sub............................................................................24
Section 3.05 Subsidiaries................................................................................................25
Section 3.06 Compliance With Laws; No Litigation.........................................................................25
Section 3.07 Conduct of Operations to Date; Absence of Undisclosed Liabilities...........................................25
Section 3.08 Capitalization of USC.......................................................................................25
Section 3.09 No Brokers..................................................................................................25
Section 3.10 Private Placement Memorandum................................................................................26
ARTICLE IV COVENANTS EXTENDING TO THE EFFECTIVE TIME...................................................................26
Section 4.01 Access and Cooperation; Due Diligence.......................................................................26
Section 4.02 Conduct of Business Pending the Effective Time..............................................................27
Section 4.03 Prohibited Activities.......................................................................................28
Section 4.04 No Shop.....................................................................................................29
Section 4.05 Notice to Bargaining Agents.................................................................................30
Section 4.06 Notification of Certain Matters.............................................................................30
Section 4.07 Supplemental Information....................................................................................30
Section 4.08 Cooperation in Connection With the IPO......................................................................31
Section 4.09 Additional Financial Statements.............................................................................31
Section 4.10 Termination of Plans........................................................................................32
Section 4.11 Disposition of Unwanted Assets..............................................................................32
Section 4.12 HSR Act Matters.............................................................................................32
ARTICLE V THE CLOSING AND CONDITIONS TO CLOSING AND
CONSUMMATION................................................................................................32
Section 5.01 Conditions to the Obligations of Each Party.................................................................32
Section 5.02 Conditions to the Obligations of the Company and the Stockholders...........................................34
Section 5.03 Conditions to the Obligations of USC and USC Sub............................................................35
ARTICLE VI COVENANTS FOLLOWING THE EFFECTIVE TIME......................................................................36
Section 6.01 Disclosure..................................................................................................36
Section 6.02 Preparation and Filing of Tax Returns.......................................................................37
Section 6.03 Directors...................................................................................................37
Section 6.04 Removal of Guaranties.......................................................................................37
Section 6.05 Survival of Representations and Warranties..................................................................37
Section 6.06 Limitations on Damage Claims................................................................................38
25
<PAGE>
Section 6.07 Working Capital Adjustment..................................................................................39
ARTICLE VII INDEMNIFICATION.............................................................................................41
Section 7.01 In Respect of Representations and Warranties................................................................41
Section 7.02 Indemnification of USC Indemnified Parties..................................................................41
Section 7.03 Indemnification of Stockholder Indemnified Parties..........................................................42
Section 7.04 Conditions of Indemnification...............................................................................42
Section 7.05 Remedies Not Exclusive......................................................................................45
Section 7.06 Limitations on Indemnification..............................................................................45
ARTICLE VIII LIMITATIONS ON COMPETITION..................................................................................46
Section 8.01 Prohibited Activities.......................................................................................46
Section 8.02 Damages.....................................................................................................47
Section 8.03 Reasonable Restraint........................................................................................47
Section 8.04 Severability; Reformation...................................................................................47
Section 8.05 Independent Covenant........................................................................................48
Section 8.06 Materiality.................................................................................................48
ARTICLE IX ADDITIONAL DEFINITIONS AND DEFINITIONAL
PROVISIONS..................................................................................................48
Section 9.01 Defined Terms...............................................................................................48
Section 9.02 Other Defined Terms.........................................................................................63
Section 9.03 Other Definitional Provisions...............................................................................63
Section 9.04 Captions....................................................................................................63
ARTICLE X GENERAL PROVISIONS.........................................................................................64
Section 10.01 Treatment of Confidential Information......................................................................64
Section 10.02 Brokers and Agents.........................................................................................65
Section 10.03 Assignment; No Third Party Beneficiaries...................................................................65
Section 10.04 Entire Agreement; Amendment; Waivers.......................................................................65
Section 10.05 Expenses...................................................................................................66
Section 10.06 Notices....................................................................................................66
Section 10.07 Governing Law..............................................................................................67
Section 10.08 Exercise of Rights and Remedies............................................................................67
Section 10.09 Time.......................................................................................................67
Section 10.10 Reformation and Severability...............................................................................67
Section 10.11 Remedies Cumulative........................................................................................67
Section 10.12 Release....................................................................................................67
Section 10.13 Respecting the IPO.........................................................................................68
Section 10.14 Restrictions on Transfer of USC Common Stock...............................................................69
ARTICLE XI TERMINATION................................................................................................70
Section 11.01 Termination of This Agreement..............................................................................70
Section 11.02 Liabilities in the Event of Termination....................................................................71
</TABLE>
26
<PAGE>
ARTICLE 1.
REPRESENTATIONS AND WARRANTIES OF EACH STOCKHOLDER
Each of the Stockholders represents and warrants to USC that, as
applied solely to himself, all the following representations and warranties in
this Article I are as of the date of this Agreement, and will be, as amended or
supplemented pursuant to Section 4.07, on the Closing Date and immediately prior
to the Effective Time, true and correct:
Section a. Ownership and Status of Company Capital
Stock. The Stockholder is the record and beneficial
owner (or, if the Stockholder is a trust or the
estate of a deceased natural person, the legal owner)
of the number of shares of Company Capital Stock
Schedule 1.01 sets forth opposite the Stockholder's
name, by each class, and by each series in each
class, thereof, free and clear of all Liens, except
for the Liens that Schedule sets forth, all of which
will be released on or before the Closing Date.
Section b. Power of the Stockholder; Approval of the
Acquisition. (a) The Stockholder has the full power,
legal capacity and authority to execute and deliver
this Agreement and each other Transaction Document to
which the Stockholder is a party and to perform the
Stockholder's obligations in this Agreement and in
all other Transaction Documents to which the
Stockholder is a party. This Agreement constitutes,
and each such other Transaction Document, when
executed in the Stockholder's individual capacity and
delivered by the Stockholder, will constitute, the
legal, valid and binding obligation of the
Stockholder, enforceable against the Stockholder in
accordance with its terms, except as that
enforceability may be (i) limited by any applicable
bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally or any
applicable law that limits rights to indemnification
and (ii) subject to general principles of equity
(regardless of whether that enforceability is
considered in a proceeding in equity or at law). If
the Stockholder is an Entity, the Stockholder has
obtained, in accordance with all applicable
Governmental Requirements and its Charter Documents,
all approvals and the taking of all actions necessary
for the authorization, execution, delivery and
performance by the Stockholder of this Agreement and
the other Transaction Documents to
27
<PAGE>
which the Stockholder is a party. If the Stockholder
is acting otherwise than in his individual capacity
(whether as an executor or a guardian or in any other
fiduciary or representative capacity), all actions on
the part of the Stockholder and all other Persons
(including any court) necessary for the
authorization, execution, delivery and performance by
the Stockholder of this Agreement and the other
Transaction Documents to which the Stockholder is a
party have been duly taken.
(b) The Stockholder, acting in each capacity in which he is
entitled, by reason of the Company's Charter Documents or the Governmental
Requirements of the Company's Organization State or for any other reason, to
vote to approve or disapprove the consummation of the Acquisition, has voted all
the shares of Company Capital Stock owned by him and entitled to a vote or votes
on that matter, in any one or more of the manners prescribed or permitted by the
Company's Charter Documents or the Governmental Requirements of the Company's
Organization State, whichever are controlling, to approve this Agreement and the
consummation of the Acquisition and the other transactions contemplated hereby.
Section c. No Conflicts or Litigation. The
Stockholder's execution, delivery and performance in
accordance with their respective terms of this
Agreement and the other Transaction Documents to
which the Stockholder is a party do not and will not
(i) violate or conflict with any Governmental
Requirement, (ii) breach or constitute a default
under any agreement or instrument to which the
Stockholder is a party or by which the Stockholder or
any shares of Company Capital Stock the Stockholder
owns is bound, (iii) result in the creation or
imposition of, or afford any Person the right to
obtain, any Lien upon any shares of Company Capital
Stock the Stockholder owns (or upon any revenues,
income or profits of the Stockholder therefrom) or
(iv) if the Stockholder is an Entity, violate the
Stockholder's Charter Documents. No Litigation is
pending or, to the knowledge of the Stockholder,
threatened to which the Stockholder is or may become
a party which (i) questions or involves the validity
or enforceability of any of the Stockholder's
obligations under any Transaction Document or (ii)
seeks (or reasonably may be expected to seek) (A) to
prevent or delay the consummation by the Stockholder
of the transactions this Agreement contemplates the
Stockholder will consummate or (B) damages in
connection with any such consummation.
28
<PAGE>
Section d. No Brokers. Except as Schedule 1.04 sets
forth, the Stockholder has not, directly or
indirectly, in connection with this Agreement or the
transactions contemplated hereby (i) employed any
broker, finder or agent or (ii) agreed to pay or
incurred any obligation to pay any broker's or
finder's fee, any sales commission or any similar
form of compensation.
Section e. Preemptive and Other Rights; Waiver; No
Commitments. Except for the right of the Stockholder
to receive shares of USC Common Stock as a result of
the Acquisition, the Stockholder either (i) does not
own or otherwise have any statutory or contractual
preemptive or other right of any kind (including any
right of first offer or refusal) to acquire any
shares of Company Capital Stock or USC Common Stock
or (ii) hereby irrevocably waives each right of that
type the Stockholder does own or otherwise has. The
Stockholder does not have any binding commitment to
sell, exchange or otherwise dispose of the USC Common
Stock the Stockholder will receive as part of the
Acquisition Consideration, and the representation and
warranty in this sentence is for the benefit of each
other Stockholder and each owner of each Other
Founding Company.
Section f. Control of Related Businesses. Except as
Schedule 1.06 sets forth, the Stockholder is not,
alone or with one or more other Persons, the
controlling Affiliate of any Entity, business or
trade (other than the Acquired Business or any Entity
the Acquired Business includes, if the Stockholder is
an Affiliate of any thereof) that (i) is engaged in
any line of business which is the same as or similar
to any line of business in which the Acquired
Business or any Entity the Acquired Business includes
is engaged or (ii) is, or has within the three-year
period ending on the date of this Agreement, engaged
in any transaction with any Entity the Acquired
Business includes, except for transactions in the
ordinary course of business of that Entity.
Section 1.07 Accredited Investor Status; Sophistication; Review of
Private Placement Memorandum. The Stockholder (i) will be acquiring the shares
of USC Common Stock to be issued to him pursuant to Paragraph 2 solely for his
account, for investment purposes only and with no current intention or plan to
distribute, sell or otherwise dispose of any of those shares in connection with
any distribution and (ii) is not a party to any agreement or other arrangement
for the disposition of any shares of USC Common Stock other than this Agreement
and the Registration Rights Agreement. Schedule 1.07 correctly states (i)
whether he is, or is not, an "accredited
29
<PAGE>
investor" as defined in Securities Act Rule 501(a) and, if he is not such an
investor, (ii) the name and address of his "purchaser representative" (as
defined in Securities Act Rule 501(h)). The Stockholder (i) is able to bear the
economic risk of an investment in the USC Common Stock acquired pursuant to this
Agreement, (ii) can afford to sustain a total loss of that investment, (iii) has
such knowledge and experience in financial and business matters that he is
capable of evaluating the merits and risks of the proposed investment in the USC
Common Stock, (iv) his purchaser representative, if any, has received and
reviewed a copy of the Private Placement Memorandum and had an adequate
opportunity to ask questions and receive answers from the officers of USC
concerning any and all matters relating to the transactions contemplated hereby
and thereby, including the background and experience of the current and proposed
officers and directors of USC, the plans for the business and operations of USC,
the business, operations and financial condition of the Other Founding Companies
and any plans of USC for additional acquisitions, and (v) or his purchaser
representative, if any, has asked all questions of the nature described in
preceding clause (iv) and all those questions have been answered to his
satisfaction and the satisfaction of his purchaser representative, if any.
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES
OF
THE COMPANY AND THE STOCKHOLDERS
The Company and each Stockholder jointly and severally represent and
warrant to, and agree with, USC that all the following representations and
warranties in this Article II are as of the date of this Agreement, and will be,
as amended or supplemented pursuant to Section 4.07, on the Closing Date and
immediately prior to the Effective Time, true and correct:
Section a. Organization. Schedule 2.01 sets forth the
Organization State of each of the Company and the
Company Subsidiaries. Each of the Company and the
Company Subsidiaries (i) is a corporation duly
organized, validly existing and in good standing
under the laws of its Organization State, (ii) has
all requisite corporate power and authority under
those laws and its Charter Documents to own or lease
and to operate its properties and to carry on its
business as now conducted and (iii) is duly qualified
and in good standing as a foreign corporation in all
jurisdictions in which it owns or leases property or
in which the carrying on of its business as now
conducted so requires, except where the failure to be
so qualified, singly or in the aggregate, would not
have a Material Adverse Effect.
Section b. Qualification. Schedule 2.02 lists all the
jurisdictions in which each of the Company and the
Company Subsidiaries
30
<PAGE>
is authorized or qualified to own or lease and to
operate its properties or to carry on its business as
now conducted, and neither the Company nor any
Company Subsidiary owns, leases or operates any
properties, or carries on any business, that is
Material to the Acquired Business in any jurisdiction
that Schedule does not list.
Section c. Authorization; Enforceability; Absence of
Conflicts; Required Consents. (a) The execution,
delivery and performance by the Company of this
Agreement and each other Transaction Document to
which it is a party, and the effectuation of the
Acquisition and the other transactions contemplated
hereby and thereby, are within its corporate or other
power under its Charter Documents and the applicable
Governmental Requirements of its Organization State
and have been duly authorized by all proceedings,
including actions permitted to be taken in lieu of
proceedings, required under its Charter Documents and
those Governmental Requirements.
(b) This Agreement has been, and each of the other Transaction
Documents to which the Company is a party, when executed and delivered by the
parties thereto will have been, duly executed and delivered by the Company and
is, or when so executed and delivered will be, the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except as that enforceability may be (i) limited by any applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally or any
applicable law that limits rights to indemnification and (ii) subject to general
principles of equity (regardless of whether that enforceability is considered in
a proceeding in equity or at law).
(c) The execution, delivery and performance in accordance with
their respective terms by the Company of the Transaction Documents to which it
is a party have not and will not (i) violate, breach or constitute a default
under (A) the Charter Documents of any of the Company and the Company
Subsidiaries, (B) any Governmental Requirement applicable to any of the Company
and the Company Subsidiaries or (C) any Material Agreement of the Company
(except as Schedule 2.03 sets forth), (ii) result in the acceleration or
mandatory prepayment of any Indebtedness, or any Guaranty not constituting
Indebtedness, of any of the Company and the Company Subsidiaries or afford any
holder of any of that Indebtedness, or any beneficiary of any of those
Guaranties, the right to require any of the Company and the Company Subsidiaries
to redeem, purchase or otherwise acquire, reacquire or repay any of that
Indebtedness, or to perform any of those Guaranties (except as Schedule 2.03
sets forth), (iii) cause or result in the imposition of, or afford any Person
the right to obtain, any Lien upon any property or assets of any of the Company
and the Company Subsidiaries (or upon any revenues, income or profits of any of
the Company and the Company Subsidiaries therefrom) or (iv) except as Schedule
2.03 sets forth, result in the revocation,
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cancellation, suspension or material modification, in any single case or in the
aggregate, of any Governmental Approval possessed by any of the Company and the
Company Subsidiaries at the date hereof and necessary for the ownership or lease
or the operation of its properties or the carrying on of its business as now
conducted, including any necessary Governmental Approval under each applicable
Environmental Law and Industry Law.
(d) Except for (i) the filing of the Certificates of Merger,
if any, with the applicable Governmental Authorities , (ii) filings of the
Registration Statement under the Securities Act and the SEC order declaring the
Registration Statement effective under the Securities Act and (iii) as may be
required by the HSR Act or the applicable state securities or blue sky laws, no
Governmental Approvals are required to be obtained, and no reports or notices to
or filings with any Governmental Authority are required to be made, by any of
the Company and the Company Subsidiaries for the execution, delivery or
performance by the Company of the Transaction Documents to which it is a party,
the enforcement against the Company of its obligations thereunder or the
effectuation of the Acquisition and the other transactions contemplated thereby.
Section d. Charter Documents and Records; No Violation.
Except as Schedule 2.04 sets forth, the Company has
caused true, complete and correct copies of the
Charter Documents, each as in effect on the date
hereof, and the minute books and similar corporate or
other Entity records of each of the Company and the
Company Subsidiaries to be delivered to USC. No
breach or violation of any Charter Document of any of
the Company and the Company Subsidiaries has occurred
and is continuing.
Section e. No Defaults. Except as Schedule 2.05 sets
forth, no condition or state of facts exists, or,
with the giving of notice or the lapse of time or
both, would exist, which (i) entitles any holder of
any outstanding Indebtedness, or any Guaranty not
constituting Indebtedness, of any of the Company and
the Company Subsidiaries, or a representative of that
holder, to accelerate the maturity, or require a
mandatory prepayment, of that Indebtedness or
Guaranty, or affords that holder or its
representative, or any beneficiary of that Guaranty,
the right to require any of the Company and the
Company Subsidiaries to redeem, purchase or otherwise
acquire, reacquire or repay any of that Indebtedness,
or to perform that Guaranty in whole or in part, (ii)
entitles any Person to obtain any Lien (other than a
Permitted Lien) on any properties or assets
constituting any part of the Acquired Business (or
upon any revenues, income or profits of any of the
Company and the Company Subsidiaries therefrom) or
(iii) constitutes a violation or breach of, or a
default under, any Material Agreement of the
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Company (including this Agreement) by any of the
Company and the Company Subsidiaries.
Section f. Company Subsidiaries. Schedule 2.01 either
(i) sets forth the form of organization, legal name,
each assumed name and Organization State of each
Company Subsidiary or (ii) correctly states no Entity
is a Company Subsidiary. Except as Schedule 2.06 sets
forth, each Company Subsidiary is a Wholly Owned
Subsidiary. In the case of any Company Subsidiary
that is not a Wholly Owned Subsidiary, Schedule 2.06
sets forth, by each class and each series within each
class, (i) the number of outstanding shares (or other
percentage ownership interests) of Capital Stock of
the Company Subsidiary, (ii) the Company's aggregate
direct and indirect ownership of those shares (or
interests) and (iii) the name and address of record
and percentage ownership of those shares (or
interests) of each holder of record thereof other
than the Company or a Company Subsidiary. No Lien
exists upon any outstanding share (or other
percentage ownership interests) of Capital Stock of
any Company Subsidiary which the Company directly or
indirectly owns other than (i) the Liens, if any,
Schedule 2.06 describes, all of which will be
released at or before the Effective Time, and (ii)
Permitted Liens. Except as Schedule 2.06 sets forth,
the Company does not own, of record or beneficially,
directly or indirectly through any Person, and does
not control, directly or indirectly through any
Person or otherwise, any Capital Stock or Derivative
Securities of any Entity other than a Company
Subsidiary.
Section g. Controlling Affiliates. Schedule 2.07 sets
forth the name of each Person who at the time the
Acquisition was submitted for vote or consent to the
Stockholders, is, was or will be an Affiliate of the
Company by reason of that Person's control of the
Company.
Section h. Capital Stock of the Company and the Company
Subsidiaries. Schedule 2.08 sets forth, by each class
and by each series within each class, the total
number of shares of authorized Company Capital Stock
and the total number of such shares that have been
issued and are now outstanding. Except as Schedule
2.08 sets forth: (i) no shares of Company Capital
Stock are held by the Company or any Company
Subsidiary as treasury shares; and (ii) no
outstanding options,
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warrants or rights to acquire Capital Stock of the
Company or any Company Subsidiary exist. All the
issued and outstanding shares of Capital Stock of
each of the Company and the Company Subsidiaries (i)
have been duly authorized and validly issued in
accordance with the applicable Governmental
Requirements of their issuer's Organization State and
Charter Documents and (ii) are fully paid and
nonassessable. Neither the Company nor any Company
Subsidiary has issued or sold any shares of its
outstanding Capital Stock in breach or violation of
(i) any applicable statutory or contractual
preemptive rights, or any other rights of any kind
(including any rights of first offer or refusal), of
any Person or (ii) the terms of any of its Derivative
Securities which then were outstanding. No Person
has, otherwise than solely by reason of that Person's
right, if any, to vote shares of the Capital Stock of
the Company or any Company Subsidiary it holds (to
the extent those shares afford the holder thereof any
voting rights) any right to vote on any matter with
the holders of Capital Stock of the Company or any
Company Subsidiary.
Section i. Transactions in Capital Stock. Except as
Schedule 2.09 sets forth: (i) the Company has no
obligation (contingent or otherwise) to purchase,
redeem or otherwise acquire or reacquire any of its
equity securities or any interests therein or to pay
any dividend or make any distribution in respect
thereof; and (ii) no transaction has been effected,
and no action in contemplation of the transactions
described in this Agreement has been taken,
respecting the equity ownership of either the Company
or any Company Subsidiary.
Section j. No Bonus Shares. Except as Schedule 2.10
sets forth, no outstanding share of Capital Stock of
the Company was issued for less than the fair market
value thereof at the time of issuance or was issued
in exchange for any consideration other than cash.
Section k. Predecessor Status; etc. Except as Schedule
2.11 sets forth, the Company has not been a
Subsidiary or division of another Entity during the
past five years.
Section l. Related Party Agreements. Schedule 2.12 sets
forth all Related Party Agreements in effect on the
date hereof. Except for those Related Party
Agreements that Schedule specifically
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refers to as "Retained Related Party Agreements" (the
"Retained Related Party Agreements"), each Related
Party Agreement in effect on the date hereof will
have been terminated, and all Indebtedness of each
Related Person and its Affiliates owed to any of the
Company and the Company Subsidiaries will have been
paid in full, prior to the Effective Time, and no
Related Party Agreement then will exist. The terms
and conditions of each of the Retained Related Party
Agreements are no less favorable to the Company than
the Company reasonably could have expected to obtain
in an arm's-length transaction with a Person other
than an Affiliate of the Company, the rentals
provided for in the Retained Related Party Agreements
constituting leases of property to the Acquired
Business (other than the leases, if any, that this
Agreement defines as a Facilities Lease Agreement, as
to which no representation is made pursuant to this
Section 2.12) do not and will not exceed fair market
rentals of the properties being rented or leased
under those Retained Related Party Agreements and the
payments provided to be made by the Company or any
Company Subsidiary in the Retained Related Party
Agreements do not exceed the fair market value of the
goods or other property provided to or the services
performed for the Acquired Business.
Section m. Litigation. Except as Schedule 2.13 sets
forth, no Litigation is pending or, to the knowledge
of the Company or any Stockholder, threatened to
which the Company or any Company Subsidiary is or may
become a party.
Section n. Financial Statements; Disclosure. (a)
Financial Statements. (i) The Financial Statements
(including in each case the related schedules and
notes) delivered to USC present fairly, in all
material respects, the financial position of the
Acquired Business at the respective dates of the
balance sheets included therein and the results of
operations, cash flows and stockholders' or other
owners' equity of the Acquired Business for the
respective periods set forth therein and have been
prepared in accordance with GAAP, except, with
respect to any financial statements of the Acquired
Business delivered to USC pursuant to the provisions
of Section 4.09, for the provision of applicable
footnotes and adjustments customarily made at year
end. As of the date of any balance sheet included in
those Financial Statements, neither the Company nor
any Company Subsidiary then had
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any outstanding Indebtedness to any Person or any
liabilities of any kind (including contingent
obligations, tax assessments or unusual forward or
long-term commitments), or any unrealized or
anticipated loss, which in the aggregate then were
Material to the Acquired Business and required to be
reflected in those Financial Statements or in the
notes related thereto in accordance with GAAP which
were not so reflected.
(ii) Since the Current Balance Sheet Date, no change has
occurred in the business, operations, properties or assets,
liabilities, condition (financial or other) or results of operations of
the Acquired Business that could reasonably be expected, either alone
or together with all other such changes, to have a Material Adverse
Effect.
(b) Disclosure. (i) As of the date hereof, all Information
that has been made available to USC by or on behalf of the Company prior to the
date of this Agreement in connection with the transactions contemplated hereby
(other than financial budgets and projections) is, taken together, true and
correct in all material respects and does not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained therein not materially misleading in light of the
circumstances under which those statements were made.
(ii) All Information that is furnished to USC after the date
hereof from time to time prior to the Effective Time by or on behalf of
the Company in connection with or pursuant to this Agreement, any other
Transaction Document or the transactions contemplated hereby or thereby
(other than financial budgets and projections) will be, when made
available and taken together, true and correct in all material respects
and will not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
contained therein not materially misleading in light of the
circumstances under which those statements are made.
(iii) Schedule 2.14 sets forth a complete list of all
financial budgets and projections respecting the Acquired Business
that, as of the date of this Agreement, the Company, or any of its
Representatives have made available to USC in connection with this
Agreement or the transactions contemplated hereby. All those financial
budgets and projections and any other financial budgets or projections
respecting the Acquired Business that the Company or any of its
Representatives hereafter provide to USC in writing prior to the
Effective Time pursuant to or in connection with this Agreement, any
other Transaction Document or the transactions contemplated hereby or
thereby have been and will be prepared and furnished to USC in good
faith and were and will be based on facts and assumptions that are
believed by the management of the Company to be reasonable in light of
the then current and foreseeable business conditions of the Company and
the Company Subsidiaries and represented and will represent that
management's good faith estimate of the consolidated projected
financial performance of the Company and the Company Subsidiaries based
on the information available to the Responsible Officer at the time so
furnished.
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Section o. Compliance With Laws. (a) Except as Schedule
2.15 sets forth: (i) each of the Company and the
Company Subsidiaries possesses, or, if required by
the applicable Environmental Laws and Industry Laws
(including those relating to hazardous air pollutants
or Solid Wastes, Hazardous Wastes or Hazardous
Substances), one or more of its employees as required
by those Environmental Laws and Industry Laws
possesses, all necessary certifications and licenses
and similar Governmental Approvals required for the
conduct of its business; and (ii) each of the Company
and the Company Subsidiaries and such one or more of
its employees are in compliance in all material
respects with the terms and conditions of all
Governmental Approvals necessary for the ownership or
lease and the operation of its properties (including
all the facilities and sites it owns or holds under
any lease) and the carrying on of its business as now
conducted. The Company has provided USC with a
complete written list of all the Governmental
Approvals so possessed. All the Governmental
Approvals so listed are valid and in full force and
effect, and, except as Schedule 2.15 sets forth,
neither the Company nor any Company Subsidiary has
received, nor to the knowledge of any Stockholder has
any employee of either received, any notice from any
Governmental Authority of its intention to cancel,
terminate or not renew any of those Governmental
Approvals.
(b) Except as Schedule 2.15 sets forth, each of the Company
and the Company Subsidiaries: (i) has been and continues to be in compliance in
all material respects with all Governmental Requirements applicable to it or any
of its presently or previously owned or operated properties (including all the
facilities and sites now or previously owned or held by it under any lease),
businesses or operations, including all applicable Governmental Requirements
under ERISA, Environmental Laws and Industry Laws; and (ii)(A) neither the
Company nor any Company Subsidiary has received, nor to the knowledge of the
Company has any employee of either received, any notice from any Governmental
Authority which asserts, or raises the possibility of assertion of, any
noncompliance with any of those Governmental Requirements and, to the knowledge
of each of the Company, the Company Subsidiaries and the Stockholders, (B) no
condition or state of facts exists which would provide a valid basis for any
such assertion.
Section p. Certain Environmental Matters. Except as
Schedule 2.16 sets forth: (i) the Company and each
Company Subsidiary have complied, and remain in
compliance, with the provisions of all Environmental
Laws applicable to any of them or any of their
respective presently owned or operated facilities,
sites or other properties, businesses and operations
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and which relate to the reporting by the Company and
each Company Subsidiary of all sites presently owned
or operated by any of them where Solid Wastes,
Hazardous Wastes or Hazardous Substances have been
treated, stored, disposed of or otherwise handled;
(ii) no release (as defined in those Environmental
Laws) at, from, in or on any site owned or operated
by the Company or any Company Subsidiary has occurred
which, if all relevant facts were known to the
relevant Governmental Authorities, reasonably could
be expected to require remediation to avoid deed
record notices, restrictions, liabilities or other
consequences that would not be applicable if that
release had not occurred; (iii) neither the Company
nor any Company Subsidiary (or any agent or
contractor of either) has transported or arranged for
the transportation of any Solid Wastes, Hazardous
Wastes or Hazardous Substances to, or disposed or
arranged for the disposition of any Solid Wastes,
Hazardous Wastes or Hazardous Substances at, any
off-site location that could lead to any claim
against the Company, any Company Subsidiary, the
Acquired Business, any Other Founding Company or any
of its Subsidiaries, USC or any Subsidiary of USC, as
a potentially responsible party or otherwise, for any
clean-up costs, remedial work, damage to natural
resources, personal injury or property damage,
including any claim under CERCLA; and (iv) no storage
tanks exist on or under any of the properties owned
or operated by the Company or any Company Subsidiary
from which any Solid Wastes, Hazardous Wastes or
Hazardous Substances have been released into the
surrounding environment. The Company has provided USC
with copies (or, if not available, accurate written
summaries) of all environmental investigations,
studies, audits, reviews and other analyses conducted
by or on behalf, or which otherwise are in the
possession, of the Company or any Company Subsidiary
respecting any facility, site or other property the
Company or any Company Subsidiary presently owns or
operates.
Section q. Liabilities and Obligations. Schedule 2.17
lists or describes all present liabilities, of every
kind, character and description and whether accrued,
absolute, fixed, contingent or otherwise, of each of
the Company and the Company Subsidiaries which (i)
exceed or reasonably could be expected to exceed
$10,000 and (ii) (A) had been incurred prior to the
Current Balance Sheet Date, but are not reflected on
the
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Current Balance Sheet, or (B) were incurred after the
Current Balance Sheet Date otherwise than in the
ordinary course of business, and consistent with the
past practice, of that Entity. That Schedule also
lists and describes, for each of the Company and the
Company Subsidiaries: (i) each of its outstanding
secured and unsecured Guaranties not constituting its
Indebtedness and, for each of those Guaranties,
whether any Stockholder or Related Person or
Affiliate of any Stockholder is a Person whose
obligation is covered by that Guaranty, and (ii ) for
each of the items listed under clause (i) of this
sentence, (A) if that item is secured by any property
or asset of the Company or any Company Subsidiary,
the nature of that security, and (B) if that item is
covered in whole or in part by a Guaranty of any
Stockholder or any Related Person or Affiliate of any
Stockholder, the name of the guarantor.
Section r. Receivables. Except as Schedule 2.18 sets
forth, all the accounts and notes or other advances
receivable of the Company and the Company
Subsidiaries reflected on the Current Balance Sheet
were collected, or are valid and enforceable claims
arising in the ordinary course of business and, in
the good faith belief of the Company's management,
collectible, in the aggregate respective amounts so
reflected, net of the reserves, if any, reflected in
the Current Balance Sheet.
Section s. Real Properties. (a) Schedule 2.19 lists and
correctly describes in all material respects: (i) all
real properties owned by any of the Company and the
Company Subsidiaries and, for each of those
properties, the address thereof, the type and
approximate square footage of each structure located
thereon and the use thereof in the business of the
Company and the Company Subsidiaries; (ii) all real
properties of which any of the Company and the
Company Subsidiaries is the lessee and, for each of
those properties, the address thereof, the type and
approximate square footage of each structure located
thereon the Company or a Company Subsidiary is
leasing and the expiration date of its lease and the
use thereof in the business of the Company and the
Company Subsidiaries; and (iii) in the case of each
real property listed as being owned, whether it was
previously owned, and in the case of each real
property listed as being leased, whether it is
presently owned, by any Stockholder or any of his
Related Persons or Affiliates (other
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than the Company and the Company Subsidiaries, any
other Entity included in the Acquired Business, if
the Stockholder is an Affiliate of the Company or any
other Entity included in the Acquired Business).
(b) The Company has provided USC with true, complete and
correct copies of all title reports and insurance policies the Company or its
Stockholders possess relating to any of the real properties Schedule 2.19 lists
as being owned or leased. Except as that Schedule sets forth, and except for
Permitted Liens, the Company or a Company Subsidiary owns in fee, and has good,
valid and marketable title to, free and clear of all Liens, each property that
Schedule lists as being owned.
(c) The Company has provided USC with true, correct and
complete copies of all leases under which the Company or a Company Subsidiary is
leasing each of the properties Schedule 2.19 lists as being leased and, except
as that Schedule sets forth, (i) each of those leases is, to the knowledge of
the Company, valid and binding on the lessor party thereto and (ii) the lessee
party thereto has not sublet any of the leased space to any Person other than
the Company, a Company Subsidiary or any other Entity included in the Acquired
Business.
(d) The fixed assets of each of the Company and the Company
Subsidiaries are affixed only to one or more of the real properties Schedule
2.19 lists and, except as that Schedule sets forth, are maintained in accordance
with ordinary industry practices and adequate for the purposes for which they
presently are being used or held for use, ordinary wear and tear excepted.
Section t. Other Tangible Assets. (a) Schedule 2.20
discloses all leases, including capital leases, that
are Material to the Company under which the Company
or a Company Subsidiary is leasing its property,
plant and equipment and other tangible assets other
than real properties. Except as that Schedule sets
forth, (i) each of those leases is, to the knowledge
of the Company, valid and binding on the lessor party
thereto and (ii) the lessee party thereto has not
sublet any of the leased property to any Person other
than the Company, a Company Subsidiary or any other
Entity included in the Acquired Business.
(b) Except as Schedule 2.20 sets forth, all the property,
plant and equipment of the Company and the Company Subsidiaries are in
satisfactory condition and in a commercially satisfactory state of repair given
the use to which they are put, ordinary wear and tear excepted, and adequate for
the purposes for which they presently are being used or held for use.
(c) In each case, free and clear of all Liens except for
Permitted Liens and as Schedule 2.20 sets forth, the Acquired Business has good
and valid title to, or holds under a lease valid and binding on the lessor party
thereto, all its tangible personal properties and assets that individually or in
the aggregate are Material to the Acquired Business.
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Section u. Proprietary Rights. Except as Schedule 2.21
sets forth, each of the Company and the Company
Subsidiaries owns, free and clear of all Liens other
than Permitted Liens, or has the legal right to use,
all Proprietary Rights that are necessary to the
conduct of its business as now conducted, in each
case free of any claims or infringements known to the
Company or any Stockholder. Schedule 2.21 (i) lists
those Proprietary Rights and (ii) indicates those
owned by the Company or any Company Subsidiary and,
for those not listed as so owned, the agreement or
other arrangement pursuant to which they are
possessed. Except as that Schedule sets forth, (i) no
consent of any Person will be required for the use of
any of these Proprietary Rights by USC or any
Subsidiary of USC following the Effective Time and
(ii) no governmental registration of any of these
Proprietary Rights has lapsed or expired or been
canceled, abandoned, opposed or the subject of any
reexamination request.
Section v. Relations With Governments, etc. Neither the
Company nor any Company Subsidiary has made, offered
or agreed to offer anything of value to any
governmental official, political party or candidate
for government office which would cause the Company
or any Company Subsidiary to be in violation of the
Foreign Corrupt Practices Act of 1977 or any
Governmental Requirement to a similar effect.
Section w. Commitments. (a) Schedule 2.23 sets forth a
complete list of each of the following (each a
"Company Commitment") to which any of the Company and
the Company Subsidiaries is a party or by which any
of its properties is bound and which presently
remains executory in whole or in any part:
(i) each partnership, joint venture or cost sharing agreement;
(ii) each guaranty or suretyship, indemnification or
contribution agreement or performance bond;
(iii) each instrument, agreement or other obligation
evidencing or relating to Indebtedness of any of the Company and the
Company Subsidiaries involving more than $10,000;
(iv) each contract to purchase or sell real property;
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(v) each agreement with sales or commission agents, public
relations or advertising agencies, accountants or attorneys (other than
in connection with this Agreement and the transactions contemplated
hereby) involving total payments within any 12-month period in excess
of $10,000 and which is not terminable without penalty and on no more
than 30 days' prior notice;
(vi) each agreement for the acquisition or provision of
services, supplies, equipment, inventory, fixtures or other property
involving more than $25,000 in the aggregate;
(vii) each Related Party Agreement involving total payments
within any 12-month period in excess of $10,000 and which is not
terminable without penalty on no more than 30 days' prior notice;
(viii) each contract containing any noncompetition agreement,
covenant or undertaking;
(ix) each agreement providing for the purchase from a supplier
of all or substantially all the requirements of the Company or any
Company Subsidiary of a particular product or service; or
(x) each other agreement or commitment not made in the
ordinary course of business which is Material to the Acquired Business.
True, correct and complete copies of all written Company Commitments, and true,
correct and complete written descriptions of all oral Company Commitments, have
heretofore been delivered to USC Except as Schedule 2.23 sets forth: (i) there
are no existing or asserted defaults, events of default or events, occurrences,
acts or omissions that, with the giving of notice or lapse of time or both,
would constitute defaults or events of default under any Company Commitment
Material to the Acquired Business by any of the Company and the Company
Subsidiaries or, to the knowledge of the Company, any other party thereto; and
(ii) no penalties have been incurred, nor are amendments pending, with respect
to the Company Commitments Material to the Acquired Business. The Company
Commitments are in full force and effect and are valid and enforceable
obligations of the Company or the Company Subsidiaries parties thereto and, to
the knowledge of the Company, the other parties thereto in accordance with their
respective terms, except as that enforceability may be (i) limited by any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and (ii) subject to
general principles of equity (regardless of whether that enforceability is
considered in a proceeding in equity or at law), and no defenses, off-sets or
counterclaims have been asserted or, to the knowledge of the Company, may be
made by any party thereto (other than by the Company or a Company Subsidiary),
nor has the Company or a Company Subsidiary, as the case may be, waived any
rights thereunder, except as Schedule 2.23 sets forth.
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(b) Except as Schedule 2.23 sets forth or as contemplated hereby or
by any other Transaction Document to which the Company or any Company Subsidiary
or Stockholder is a party, neither the Company nor any Company Subsidiary or
Stockholder has knowledge of any plan or intention of any other party to any
Company Commitment that is Material to the Acquired Business to exercise any
right to cancel or terminate that Company Commitment, and neither the Company
nor that Company Subsidiary or any Stockholder has knowledge of any condition or
state of facts which would justify the exercise of such a right.
Section x. Capital Expenditures. Schedule 2.24 sets
forth the total amount of capital expenditures
currently budgeted to be incurred by the Acquired
Business in excess of $25,000 in the aggregate during
the balance of the Company's current fiscal year.
Section y. Inventories. Except as Schedule 2.25 sets
forth: (i) all inventories, net of reserves
determined in accordance with GAAP, of the Acquired
Business which are classified as such on the Current
Balance Sheet are, to the knowledge of the Company,
merchantable and salable or usable in the ordinary
course of business of the Acquired Business; and (ii)
the Acquired Business does not depend on any single
vendor for its inventories the loss of which could
have a Material Adverse Effect or during the past
five years has sustained a difficulty Material to the
Acquired Business in obtaining its inventories.
Section z. Insurance. Except as Schedule 2.26 sets
forth: (i) the Company has provided USC with: (A) a
list as of the Current Balance Sheet Date of all
insurance policies then carried by each of the
Company and the Company Subsidiaries; (B) a list of
all insurance loss runs and worker's compensation
claims received for the most recently ended three
policy years; and (C) true, complete and correct
copies of all insurance policies carried by each of
the Company and the Company Subsidiaries which are in
effect, all of which (1) have been issued by insurers
of recognized responsibility and (2) currently are,
and will remain without interruption through the
Closing Date, in full force and effect; (ii) no
insurance carried by the Company or any Company
Subsidiary has been canceled by the insurer during
the past five years, and neither the Company nor any
Company Subsidiary has ever been denied coverage; and
(iii) neither the Company nor any Company Subsidiary
or Stockholder has received any notice or other
communication from any issuer of any such insurance
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policy of any material increase in any deductibles,
retained amounts or the premiums payable thereunder,
and, to the knowledge of the Company or any
Stockholder, no such increase in deductibles,
retainages or premiums is threatened.
Section aa. Employee Matters. (a) Cash Compensation. The
Company has provided USC with a complete written list
of the names, titles and rates of annual Cash
Compensation, at the Current Balance Sheet Date (and
the portions thereof attributable to salary or the
equivalent, fixed bonuses, discretionary bonuses and
other Cash Compensation, respectively) of the key
employees (including all employees who are officers
or directors), nonemployee officers, nonemployee
directors and key consultants and independent
contractors of each of the Company and the Company
Subsidiaries.
(b) Employment Agreements. Schedule 2.27 lists all Employment
Agreements remaining executory in whole or in part on the date hereof, and the
Company has provided USC with true, complete and correct copies of all those
Employment Agreements. Neither the Company nor any Company Subsidiary is a party
to any oral Employment Agreement, other than with respect to employment at-will
arrangements that are terminable by either party thereto without liability on
the part of either party thereto (except for earned but unpaid salaries or
wages).
(c) Other Compensation Plans. Schedule 2.27 lists all Other
Compensation Plans either remaining executory at the date hereof or to become
effective after the date hereof. The Company has provided USC with a true,
correct and complete copy of each of those Other Compensation Plans that is in
writing and an accurate written description of each of those Other Compensation
Plans that is not written. Except as Schedule 2.27 sets forth, each of the Other
Compensation Plans, including each that is a Welfare Plan, may be unilaterally
amended or terminated by the Company or any Company Subsidiary without liability
to any of them, except as to benefits accrued thereunder prior to that amendment
or termination.
(d) ERISA Benefit Plans. Schedule 2.27 (i) lists (A) each
ERISA Pension Benefit Plan (1) the funding requirements of which (under Section
301 of ERISA or Section 412 of the Code) are, or at any time during the six-year
period ending on the date hereof were, in whole or in part, the responsibility
of the Company or any Company Subsidiary or (2) respecting which the Company or
any Company Subsidiary is, or at any time during that period was, a
"contributing sponsor" or an "employer" as defined in Sections 4001(a)(13) and
3(5), respectively, of ERISA (each plan described in this clause (A) being a
"Company ERISA Pension Plan"), (B) each other ERISA Pension Benefit Plan
respecting which an ERISA Affiliate is, or at any time during that period was,
such a "contributing sponsor" or "employer" (each plan described in this clause
(B) being an "ERISA Affiliate Pension Plan") and (C) each other ERISA Employee
Benefit Plan that is being, or at any time during that period was, sponsored,
maintained or contributed to by the Company or
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any Company Subsidiary (each plan described in this clause (C) and each Company
ERISA Pension Plan being a "Company ERISA Benefit Plan"), (ii) states the
termination date of each Company ERISA Benefit Plan and ERISA Affiliate Pension
Plan that has been terminated and (iii) identifies for each ERISA Affiliate
Pension Plan the relevant ERISA Affiliates. The Company has provided USC with
true, complete and correct copies of (i) each Company ERISA Benefit Plan and
ERISA Affiliate Pension Plan, (ii) each trust agreement related thereto (if any)
and (iii) all amendments to those plans and trust agreements. Except as Schedule
2.27 sets forth, (i) neither the Company nor any Company Subsidiary is, or at
any time during the six-year period ended on the date hereof was, a member of
any ERISA Group that currently includes, or included when the Company or a
Company Subsidiary was a member, among its members any Person other than the
Company and the Company Subsidiaries and (ii) no Person is an ERISA Affiliate of
the Company or any Company Subsidiary (other than the Company or any Company
Subsidiary in the case of any other Company Subsidiary or any Company Subsidiary
in the case of the Company, if the Company and the Company Subsidiaries comprise
an ERISA Group).
(e) Employee Policies and Procedures. Schedule 2.27 lists all
Employee Policies and Procedures. The Company has provided USC with a copy of
all written Employee Policies and Procedures and a written description of all
unwritten Employee Policies and Procedures that in the aggregate are Material to
the Company.
(f) Unwritten Amendments. Except as Schedule 2.27 sets forth,
no unwritten amendments have been made, whether by oral communication, pattern
of conduct or otherwise, with respect to any of the Employment Agreements, Other
Compensation Plans or Employee Policies and Procedures which in the aggregate
are Material to the Company.
(g) Labor Compliance. Except as Schedule 2.27 sets forth, each
of the Company and the Company Subsidiaries has been and is in compliance in all
material respects with all applicable Governmental Requirements respecting
employment and employment practices, terms and conditions of employment, wages
and hours and workplace health and safety in concrete mixing facilities and
other work areas, and neither the Company nor any Company Subsidiary is liable
for any arrears of wages or penalties for failure to comply with any of the
foregoing. Neither the Company nor any Company Subsidiary has engaged in any
unfair labor practice or discriminated on the basis of race, color, religion,
sex, national origin, age, disability or handicap in its employment conditions
or practices. Except as Schedule 2.27 sets forth, there are no (i) unfair labor
practice charges or complaints or racial, color, religious, sex, national
origin, age, disability or handicap discrimination charges or complaints pending
or, to the knowledge of the Company, threatened against the Company or any of
the Company Subsidiaries before any Governmental Authority (nor, to the
knowledge of the Company, does any valid basis therefor exist) or (ii) existing
or, to the knowledge of the Company, threatened labor strikes, disputes,
grievances or controversies affecting the Company or any of the Company
Subsidiaries (nor, to the knowledge of the Company, does any valid basis
therefor exist). Each of the Company and the Company Subsidiaries has complied,
and remains in compliance in all material respects with, all federal and state
Governmental Requirements mandating the provision of programs offering hazard
recognition training to its employees and employees of its customers.
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(h) Unions. Except as Schedule 2.27 sets forth, (i) neither
the Company nor any Company Subsidiary or ERISA Affiliate has ever been a party
to any agreement with any union, labor organization or collective bargaining
unit, (ii) no employees of the Company and the Company Subsidiaries are
represented by any union, labor organization or collective bargaining unit and
(iii) to the knowledge of the Company, none of the employees of the Company and
the Company Subsidiaries has threatened to organize or join a union, labor
organization or collective bargaining unit with respect to their employment by
the Company or any Company Subsidiary.
(i) Aliens. Except as Schedule 2.27 sets forth, all employees
of each of the Company and the Company Subsidiaries are, to the knowledge of the
Company (including any constructive knowledge the IRCA may deem the Company to
have), (i) citizens of the United States or (ii) not citizens of the United
States, but, in accordance with the IRCA and other applicable federal
Governmental Requirements, are either (A) immigrants authorized to work in the
United States or (B) nonimmigrants authorized to work in the United States for
the Company or a Company Subsidiary in their specific jobs. Except as Schedule
2.27 sets forth: neither the Company nor any Company Subsidiary has since
November 6, 1986 (i) hired (or by reason of any contract, subcontract or
exchange is considered for purposes of the IRCA to have hired) an alien in the
United States to perform labor or services with knowledge (as determined in
accordance with the IRCA) that the alien is an unauthorized alien with respect
to performing that labor or those services, (ii) continued the employment of any
employee hired after November 6, 1986 with knowledge (as determined in
accordance with the IRCA) that the employee is or has become an unauthorized
alien with respect to that employment or (iii) directly or indirectly in
violation of the IRCA required any individual it has hired to post a bond or
security or provide any other financial assurance to it against any potential
liability under the IRCA as a result of that hire. The Company has provided USC
with a true, complete list of all current alien employees of the Company who (i)
are authorized to work in the United States as immigrants or (ii) hold H-1B,
H-2B or other nonimmigrant visas. The Company has provided USC with respect to
each current employee of the Company or any Company Subsidiary who has an H-1B
or H-2B visa, true, complete copies of the Department of Labor File and Public
Access File the Company or a Company Subsidiary has maintained with respect to
that employee. The Company also has provided USC with true, complete copies of
all Forms I-9 the Company and the Company Subsidiaries possess with respect to
their (i) current employees, (ii) former employees whose employment was
terminated within 12 months of the date hereof and who were employed for more
than 36 months and (iii) former employees whose employment was terminated within
36 months of the date hereof and who were employed for less than 36 months. The
Company also has provided USC with a list of all people employed by the Company
or Company Subsidiaries within the last 36 months and their hire dates and
termination dates (if any). Except as Schedule 2.27 sets forth, each of the
Company and the Company Subsidiaries has obtained, completed and maintained Form
I-9s in accordance with, and has otherwise complied with the record-keeping
requirements of, the IRCA.
(j) Change of Control Benefits. Except as Schedule 2.27 sets
forth, neither the Company nor any of the Company Subsidiaries is a party to any
agreement, or has established any plan, policy, practice or program, requiring
it to make a payment or provide any other form of compensation or benefit or
vesting rights to any person performing services for the Company or any
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of the Company Subsidiaries which would not be payable or provided in the
absence of this Agreement or the consummation of the transactions this Agreement
contemplates, including any parachute payment under Section 280G of the Code.
(k) Retirees. Except as Schedule 2.27 sets forth, neither the
Company nor any of the Company Subsidiaries has any obligation or commitment to
provide medical, dental or life insurance benefits to or on behalf of any of its
employees who may retire or any of its former employees who have retired except
as the continuation of coverage provisions of Section 4980B of the Code and the
applicable parallel provisions of ERISA may require.
Section bb. Compliance With ERISA. (a) Compliance. Each
of the Company ERISA Benefit Plans and Other
Compensation Plans (each, a "Plan") (i) is in
substantial compliance with all applicable provisions
of ERISA, as well as with all other applicable
Governmental Requirements, and (ii) has been
administered, operated and managed in accordance with
its governing documents.
(b) Qualification. All Plans that are intended to qualify
under Section 401(a) of the Code (the "Qualified Plans") are so qualified and
have been determined by the IRS to be so qualified (or application for
determination letters have been timely submitted to the IRS). The Company has
provided USC with true, complete and correct copies of the current plan
determination letters, most recent actuarial valuation reports, if any, most
recent Form 5500, or, as applicable, Form 5500-C/R, filed with respect to each
such Qualified Plan and most recent trustee or custodian report. To the extent
that any Qualified Plans have not been amended to comply with applicable
Governmental Requirements, the remedial amendment period permitting retroactive
amendment of these Qualified Plans has not expired and will not expire within
120 days after the Effective Time. All reports and other documents required to
be filed with any governmental agency or distributed to plan participants or
beneficiaries (including annual reports, summary annual reports, actuarial
reports, PBGC-1 Forms, audits or Returns) have been timely filed or distributed,
except for any failures to timely file or distribute such reports and other
documents as would not, singly or in the aggregate, result in a material
liability for any Tax.
(c) No Prohibited Transactions. None of the Stockholders, any
Plan or the Company or any Company Subsidiary has engaged in any Prohibited
Transaction. No Plan has incurred an accumulated funding deficiency, as defined
in Section 412(a) of the Code and Section 302(a) of ERISA, and no circumstances
exist as a result of which the Company or any Company Subsidiary could have any
direct or indirect material liability whatsoever (including being subject to any
statutory Lien to secure payment of any such liability), to the PBGC under Title
IV of ERISA or to the IRS for any excise tax or penalty with respect to any Plan
now or hereafter maintained or contributed to by the Company or any of its ERISA
Affiliates. Further:
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(i) there have been no terminations, partial terminations or
discontinuances of contributions to any Qualified Plan without a
determination by the IRS that such action does not adversely affect the
tax-qualified status of that plan;
(ii) no Termination Event has occurred;
(iii) no Reportable Event has occurred with respect to any
Plan which was not properly reported;
(iv) the valuation of assets of any Qualified Plan, as of the
Effective Time, will equal or exceed the actuarial present value of all
"benefit liabilities" (within the meaning of Section 4001(a)(16) of
ERISA) under that plan in accordance with the assumptions the
regulations of the PBGC governing the funding of terminated defined
benefit plans contain;
(v) with respect to Plans qualifying as "group health plans"
under Section 4980B of the Code or Section 607(l) or 609 of ERISA
(relating to the benefit continuation rights imposed by "COBRA" or
qualified medical child support orders), the Company, each Company
Subsidiary and each Stockholder have complied (and at the Effective
Time will have complied) in all material respects with all reporting,
disclosure, notice, election and other benefit continuation and
coverage requirements imposed thereunder as and when applicable to
those plans, and neither the Company nor any Company Subsidiary has
incurred (or will incur) any direct or indirect liability or is (or
will be) subject to any loss, assessment, excise tax penalty, loss of
federal income tax deduction or other sanction, arising on account of
or in respect of any direct or indirect failure by the Company, any
Company Subsidiary or any Stockholder, at any time prior to the
Effective Time, to comply with any such federal or state benefit
continuation or coverage requirement, which is capable of being
assessed or asserted before or after the Effective Time directly or
indirectly against the Company, any Company Subsidiary, any
Stockholder, USC or any Subsidiary of USC with respect to any of those
group health plans;
(vi) the Financial Statements as of the Current Balance Sheet
Date reflect the approximate total pension, medical and other benefit
liability for all Plans, and no material funding changes or
irregularities are reflected therein which would cause those Financial
Statements to be not representative of prior periods; and
(vii) neither the Company nor any Company Subsidiary has
incurred liability under Section 4062 of ERISA.
(d) Multiemployer Plans. Except as Schedule 2.28 sets forth,
neither the Company nor any Company Subsidiary, and no ERISA Affiliate of any of
them, is, or at any time during the six-year period ended on the date hereof
was, obligated to contribute to a Multiemployer Plan. Neither the Company nor
any Company Subsidiary, and no ERISA Affiliate of any of them, has made a
complete or partial withdrawal from a Multiemployer Plan so as to incur
withdrawal liability as defined in Section 4201 of ERISA. Schedule 2.28 states
for each Multiemployer Plan it
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lists or should list the Company's best estimate of the amount of withdrawal
liability that would be incurred if the Company and each of the its ERISA
Affiliates were to make a complete withdrawal from that Multiemployer Plan as of
the Closing Date. Except as that Schedule sets forth, the aggregate amount of
that withdrawal liability if the Company and each of its ERISA Affiliates were
to make a complete withdrawal from each such Multiemployer Plan would not exceed
$25,000.
(e) Claims and Litigation. Except as Schedule 2.28 sets forth,
no Litigation or claims (other than routine claims for benefits) are pending or,
to the knowledge of the Company, threatened against, or with respect to, any of
the Plans or with respect to any fiduciary, administrator, party-in-interest or
sponsor thereof (in their capacities as such).
(f) Excise Taxes, Damages and Penalties. No act, omission or
transaction has occurred which would result in the imposition on the Company or
any Company Subsidiary with respect to any Plan of (i) a material breach of
fiduciary duty liability damages under Section 409 of ERISA, (ii) a material
civil penalty assessed pursuant to subsection (c), (i) or (l) of Section 502 of
ERISA or (iii) any material excise tax under applicable provisions of the Code.
(g) Welfare Trusts. Any trust funding a Plan, which is
intended to be exempt from federal income taxation pursuant to Section 501(c)(9)
of the Code, satisfies the requirements of that Section and has received a
favorable determination letter from the IRS regarding that exempt status and has
not, since receipt of the most recent favorable determination letter, been
amended or operated in a way that would adversely affect that exempt status.
Section cc. Taxes. (a) Each of the following
representations and warranties in this Section 2.29
is qualified to the extent Schedule 2.29 sets forth.
(b) All Returns required to be filed with respect to any Tax
for which any of the Company and the Company Subsidiaries is liable have been
duly and timely filed with the appropriate Taxing Authority, each such Return is
true, correct and complete in all respects Material to the Acquired Business
(and, in the case of a Return filed by a Company Subsidiary, the Company
Subsidiary), each Tax shown to be payable on each such Return has been paid,
each Tax payable by the Company or a Company Subsidiary by assessment has been
timely paid in the amount assessed and adequate reserves have been established
on the consolidated books of the Acquired Business for all Taxes for which any
of the Company and the Company Subsidiaries is liable, but the payment of which
is not yet due. Neither the Company nor any Company Subsidiary is, or ever has
been, liable for any Tax payable by reason of the income or property of a Person
other than the Company or a Company Subsidiary. Each of the Company and the
Company Subsidiaries has timely filed true, correct and complete declarations of
estimated Tax in each jurisdiction in which any such declaration is required to
be filed by it. No Liens for Taxes exist upon the assets of the Company or any
Company Subsidiary except Liens for Taxes which are not yet due. Neither the
Company nor any Company Subsidiary is, or ever has been, subject to Tax in any
jurisdiction outside of the United States. No Litigation with respect to any Tax
for which the Company or any Company Subsidiary is asserted to be liable is
pending or, to the knowledge of the Company or any Stockholder,
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threatened and no basis which the Company or any Stockholder believes to be
valid exists on which any claim for any such Tax can be asserted against the
Company or any Company Subsidiary. No requests for rulings or determinations in
respect of any Taxes are pending between the Company or any Company Subsidiary
and any Taxing Authority. No extension of any period during which any Tax may be
assessed or collected and for which the Company or any Company Subsidiary is or
may be liable has been granted to any Taxing Authority. Neither the Company nor
any Company Subsidiary is or has been a party to any tax allocation or sharing
agreement. All amounts required to be withheld by any of the Company and the
Company Subsidiaries and paid to governmental agencies for income, social
security, unemployment insurance, sales, excise, use and other Taxes have been
collected or withheld and paid to the proper Taxing Authority. The Company and
each Company Subsidiary have made all deposits required by law to be made with
respect to employees' withholding and other employment taxes.
(c) None of the Company, any Company Subsidiary or any
Stockholder is a "foreign person," as Section 1445(f)(3) of the Code refers to
that term.
(d) The Company has not filed a consent pursuant to Section
341(f) of the Code or any comparable provision of any other tax statute and has
not agreed to the application of Section 341(f)(2) of the Code or any comparable
provision of any other tax statute to any disposition of an asset. The Company
has not made, is not obligated to make and is not a party to any agreement that
could require it to make any payment that is not deductible under Section 280G
of the Code. No asset of the Acquired Business is subject to any provision of
applicable law which eliminates or reduces the allowance for depreciation or
amortization in respect of that asset below the allowance generally available to
an asset of its type. No accounting method changes of the Acquired Business
exist or are proposed or threatened which could give rise to an adjustment under
Section 481 of the Code. If the Company or any predecessor corporation at any
time has filed an election to be an S corporation, within the meaning of Section
1361(a)(1) of the Code or any predecessor provision or comparable provisions of
state laws, the Company and any such predecessor corporation have at all times
met all requirements for that election, and that election has at all times been
and is presently valid and in full force and effect.
Section dd. Government Contracts. Except as Schedule
2.30 sets forth, neither the Company nor any Company
Subsidiary is a party to any governmental contract
subject to price redetermination or renegotiation.
Section ee. Absence of Changes. Since the Current
Balance Sheet Date, except as Schedule 2.31 sets
forth, none of the following has occurred with
respect to the Company or any Company Subsidiary:
(i) any circumstance, condition, event or state of facts
(either singly or in the aggregate), other than conditions generally
affecting the Industry, which has caused, is causing or will cause a
Material Adverse Effect;
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(ii) any change in its authorized Capital Stock or in any of
its outstanding Capital Stock or Derivative Securities;
(iii) any Restricted Payment, except any declaration or
payment of dividends by any Company Subsidiary solely to the Company
and any Restricted Payment that Section 4.03 permits;
(iv) any increase in, or any commitment or promise to
increase, the rates of Cash Compensation as of the date hereof, or the
amounts or other benefits paid or payable under any Company ERISA
Pension Plan or Other Compensation Plan, except for ordinary and
customary bonuses and salary increases for employees (other than the
Stockholders or their Immediate Family Members) at the times and in the
amounts consistent with its past practice;
(v) any work interruptions, labor grievances or claims filed,
or any similar event or condition of any character, that will have a
Material Adverse Effect following the Effective Time;
(vi) any distribution, sale or transfer of, or any Company
Commitment to distribute, sell or transfer, any of its assets or
properties of any kind which singly is or in the aggregate are Material
to the Acquired Business, other than distributions, sales or transfers
in the ordinary course of its business and consistent with its past
practices to Persons other than the Stockholders and their Immediate
Family Members and Affiliates;
(vii) any cancellation, or agreement to cancel, any
Indebtedness, obligation or other liability owing to it, including any
Indebtedness, obligation or other liability of any Stockholder or any
Related Person or Affiliate thereof, provided that it may negotiate and
adjust bills in the course of good faith disputes with customers in a
manner consistent with past practice, if all those adjustments are
included in the Supplemental Information provided USC pursuant to
Section 4.07;
(viii) any plan, agreement or arrangement granting any
preferential rights to purchase or acquire any interest in any of its
assets, property or rights or requiring consent of any Person to the
transfer and assignment of any such assets, property or rights;
(ix) any purchase or acquisition of, or agreement, plan or
arrangement to purchase or acquire, any property, rights or assets
outside of the ordinary course of its business consistent with its past
practices;
(x) any waiver of any of its rights or claims that singly is
or in the aggregate are Material to the Acquired Business;
(xi) any transaction by it outside the ordinary course of its
business or not consistent with its past practices;
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(xii) any incurrence by it of any Indebtedness (other than
Indebtedness, if any, that Section 4.03 permits to be paid as
Restricted Payments) or any Guaranty not constituting its Indebtedness,
or any Company Commitment to incur any Indebtedness or any such
Guaranty;
(xiii) any investment in the Capital Stock, Derivative
Securities or Indebtedness of any Person other than a Permitted
Investment;
(xiv) except in accordance with the consolidated capital
expenditure budget of the Acquired Business for the Company's current
fiscal year, any capital expenditure or series of related capital
expenditures by the Acquired Business in excess of $25,000, or
commitments by the Acquired Business to make capital expenditures
totaling in excess of $25,000;
(xv) any prepayment of any Indebtedness, obligation or other
liability owing by it to any Person which this Agreement contemplates
the Stockholders, or any one or more of them, will assume prior to the
Effective Time;
(xvi) any change in the terms of payment by its customers for
any services it performs or products it sells the effect of which is to
enable the Acquired Business to recognize revenues in its statement of
operations for any period ending on or before the date of the Final
Balance Sheet which, but for that change, the Acquired Business would
not so recognize before a period beginning after the date of the Final
Balance Sheet; or
(xvii) any cancellation or termination of a Material Agreement
of the Acquired Business.
Section ff. Bank Relations; Powers of Attorney. Schedule
2.32 sets forth:
(i) the name of each financial institution in which any Entity
the Acquired Business includes has borrowing or investment
arrangements, deposit or checking accounts or safe deposit boxes;
(ii) the types of those arrangements and accounts, including,
as applicable, names in which accounts or boxes are held, the account
or box numbers and the name of each Person authorized to draw thereon
or have access thereto; and
(iii) the name of each Person holding a general or special
power of attorney from any Entity the Acquired Business includes and a
description of the terms of each such power.
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ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF USC
USC represents and warrants to, and agrees with, the Company and each
Stockholder that all the following representations and warranties in this
Article III are as of the date of this Agreement, and will be on the Closing
Date and immediately prior to the Effective Time, true and correct:
Section a. Organization; Power. Each of USC and USC Sub
is a corporation duly organized, validly existing and
in good standing under the laws of the State of
Delaware, and each of USC and USC Sub has all
requisite corporate power and authority under the
laws of the State of Delaware and its Charter
Documents to own or lease and to operate its
properties presently and following the Effective Time
and to carry on its business as now conducted and as
proposed to be conducted following the Effective
Time.
Section b. Authorization; Enforceability; Absence of
Conflicts; Required Consents. (a) The execution,
delivery and performance by each of USC and USC Sub
of this Agreement and each other Transaction Document
to which it is a party, and the effectuation of the
Acquisition and the other transactions contemplated
hereby and thereby, are within its corporate power
under its Charter Documents and the applicable
Governmental Requirements of the State of Delaware
and have been duly authorized by all proceedings,
including actions permitted to be taken in lieu of
proceedings, required under its Charter Documents and
the applicable Governmental Requirements of the State
of Delaware.
(b) This Agreement has been, and each of the other Transaction
Documents to which either of USC or USC Sub is a party, when executed and
delivered by the parties thereto, will have been, duly executed and delivered by
it and is, or when so executed and delivered will be, its legal, valid and
binding obligation, enforceable against it in accordance with its terms, except
as that enforceability may be (i) limited by any applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally or any applicable law
that limits rights to indemnification and (ii) subject to general principles of
equity (regardless of whether that enforceability is considered in a proceeding
in equity or at law).
(c) The execution, delivery and performance in accordance with
their respective terms by each of USC and USC Sub of the Transaction Documents
to which it is a party have not and will not (i) violate, breach or constitute a
default under (A) the Charter Documents of USC or
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USC Sub, (B) any Governmental Requirement applicable to USC or USC Sub or (C)
any Material Agreement of USC or USC Sub, (ii) result in the acceleration or
mandatory prepayment of any Indebtedness, or any Guaranty not constituting
Indebtedness, of USC or USC Sub or afford any holder of any of that
Indebtedness, or any beneficiary of any of those Guaranties, the right to
require USC or USC Sub to redeem, purchase or otherwise acquire, reacquire or
repay any of that Indebtedness, or to perform any of those Guaranties, (iii)
cause or result in the imposition of, or afford any Person the right to obtain,
any Lien upon any property or assets of USC or USC Sub (or upon any revenues,
income or profits of either USC or USC Sub therefrom), other than (A) Liens that
may secure Indebtedness of USC to its commercial lenders and (B) negative pledge
covenants of USC respecting its assets, or (iv) result in the revocation,
cancellation, suspension or material modification, in any single case or in the
aggregate, of any Governmental Approval possessed by USC or USC Sub at the date
hereof and necessary for the ownership or lease and the operation of its
properties or the carrying on of its business as now conducted, including any
necessary Governmental Approval under each applicable Environmental Law and
Industry Law.
(d) Except for (i) the filing of the Certificates of Merger,
if any, with the applicable Governmental Authorities, (ii) filings of the
Registration Statement under the Securities Act and the SEC order declaring the
Registration Statement effective under the Securities Act and (iii) as may be
required by the HSR Act or the applicable state securities or blue sky laws, no
Governmental Approvals are required to be obtained, and no reports or notices to
or filings with any Governmental Authority are required to be made, by USC or
USC Sub for the execution, delivery or performance by USC or USC Sub of the
Transaction Documents to which it is a party, the enforcement against USC or USC
Sub, as the case may be, of its obligations thereunder or the effectuation of
the Acquisition and the other transactions contemplated thereby.
Section c. Charter Documents. USC has delivered to the
Company true, complete and correct copies of the
Charter Documents of USC No breach or violation of
any Charter Document of USC has occurred and is
continuing.
Section d. Capital Stock of USC and USC Sub. (a)
Immediately prior to the Effective Time, (i) the
authorized Capital Stock of USC will be comprised of
(A) 40,000,000 shares of USC Common Stock, (B) one
share of class A stock, par value $.001 per share,
and (C) 5,000,000 shares of preferred stock, par
value $.001 per share, (ii) before giving effect to
the Merger and the merger or other acquisition
transactions the Other Agreements contemplate, (A)
the number of shares of USC Common Stock then issued
and outstanding will be as set forth in the
Registration Statement when it becomes effective
under the Securities Act, (B) no shares of the USC
preferred stock then will be issued or outstanding
and (C) USC will have reserved for issuance pursuant
to compensation plans or the exercise of Derivative
Securities
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the number of shares of USC Common Stock set forth in
the Registration Statement when it becomes effective
under the Securities Act.
(b) The authorized Capital Stock of USC Sub is comprised of
1,000 shares of USC Sub Common Stock, all of which shares are issued,
outstanding and owned, of record and beneficially, by USC free and clear of all
Liens, except for any liens USC may grant in favor of its lenders in connection
with its financing arrangements. No Derivative Securities of USC Sub exist.
(c) All shares of USC Common Stock and USC Sub Common Stock
outstanding immediately prior to the Effective Time, and all shares of USC
Common Stock to be issued pursuant to Paragraph 2, when issued, (i) will have
been duly authorized and validly issued in accordance with the general
corporation laws of the State of Delaware and the issuer's Charter Documents and
(ii) will be fully paid and nonassessable. None of the shares of USC Common
Stock to be issued pursuant to Paragraph 2 will, when issued, have been issued
in breach or violation of (i) any applicable statutory or contractual preemptive
rights, or any other rights of any kind (including any rights of first offer or
refusal), of any Person or (ii) the terms of any of its Derivative Securities
then outstanding.
Section e. Subsidiaries. Immediately prior to the
Closing Date, (i) USC will have no Subsidiaries other
than those Exhibit 21 to the Registration Statement
lists, (ii) USC Sub will have no Subsidiaries and
(iii) neither USC nor USC Sub will own, of record or
beneficially, directly or indirectly through any
Person or otherwise (except pursuant hereto or to the
Other Agreements), any Capital Stock or Derivative
Securities of any Entity not described in this
Section 3.05 as a Subsidiary of USC (in the case of
USC) or any Entity (in the case of USC Sub).
Section f. Compliance With Laws; No Litigation. Each of
USC and USC Sub is in compliance with all
Governmental Requirements applicable to it, and no
Litigation is pending or, to the knowledge of USC,
threatened to which USC or USC Sub is or may become a
party which (i) questions or involves the validity or
enforceability of any obligation of USC or USC Sub
under any Transaction Document, (ii) seeks (or
reasonably may be expected to seek) (A) to prevent or
delay consummation by USC or USC Sub of the
transactions contemplated by this Agreement to be
consummated by USC or USC Sub, as the case may be, or
(B) damages from USC or USC Sub in connection with
any such consummation.
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Section g. Conduct of Operations to Date; Absence of
Undisclosed Liabilities. Except for its activities in
connection with the proposed acquisitions of the
Founding Companies and other acquisition candidates
and the IPO, USC has conducted no significant
operations during the period from its inception to
the date of this Agreement, and, except for expenses
it has incurred in connection with those activities,
as of the date of this Agreement USC has no material
liabilities that the Private Placement Memorandum
does not disclose.
Section h. Capitalization of USC. The authorized and
outstanding Capital Stock of USC as of the date of
this Agreement is as set forth in the Private
Placement Memorandum. Except as the Private Placement
Memorandum discloses, there will be no outstanding
Capital Stock of USC, and no options, warrants or
other rights to acquire Capital Stock of USC,
outstanding as of the IPO Closing Date.
Section i. No Brokers. Except as the Private Placement
Memorandum sets forth, USC has not, directly or
indirectly, in connection with this Agreement or the
transactions contemplated hereby (i) employed any
broker, finder or agent or (ii) agreed to pay or
incurred any obligation to pay any broker's or
finder's fee, any sales commission or any similar
form of compensation.
Section 3.10 Private Placement Memorandum. At the date hereof the
Private Placement Memorandum (other than the historical financial statements and
the notes thereto of the Company and the historical information it contains
respecting the Acquired Business and the Stockholders, to which this Section
3.10 does not apply) does not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements it does
contain not materially misleading in the light of the circumstances under which
those statements were made.
ARTICLE 4.
COVENANTS EXTENDING TO THE EFFECTIVE TIME
Section a. Access and Cooperation; Due Diligence. (a)
From the date hereof and until the Effective Time,
the Company will (i) afford to the Representatives of
USC and each Other Founding Company reasonable
access, during normal business hours and with
reasonable prior notice, to all the key
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employees, sites, properties, books and records of
each of the Company and the Company Subsidiaries,
provided that such access does not unreasonably
interfere with the Company's business and operations,
(ii) provide USC with such additional financial and
operating data and other information relating to the
business and properties of each of the Company and
the Company Subsidiaries as USC or any Other Founding
Company may from time to time reasonably request and
(iii) cooperate with USC and each Other Founding
Company and their respective Representatives in the
preparation of any documents or other material that
may be required in connection with any Transaction
Documents or any Other Transaction Documents. Each
Stockholder and the Company will treat, and will
cause the Company's Representatives to treat, all
Confidential Information obtained by them in
connection with the negotiation and performance of
this Agreement or the due diligence investigations
conducted with respect to each Other Founding Company
as confidential in accordance with the provisions of
Section 10.01. USC will cause each Other Founding
Company to enter into a provision substantially
identical to this Section 4.01 in order to require
each Other Founding Company and its owners and
Representatives to keep confidential any Confidential
Information respecting any of the Company and the
Company Subsidiaries that Other Founding Company or
any of its Representatives obtains. Prior to the
Effective Time, USC and the Other Founding Companies
may provide Confidential Information respecting the
Company and the Company Subsidiaries to (i) the Other
Founding Companies and prospective Other Founding
Companies and their respective Representatives, (ii)
USC's actual and prospective financing sources and
their respective Representatives, (iii) the
Underwriter and its Representatives, (iv) prospective
investors in the IPO, (v) USC's prospective insurance
brokers and software or other information technology
vendors and (vi) USC's Representatives, but otherwise
will keep that Confidential Information confidential
in accordance with the provisions of Section 10.01.
(b) Each of the Company and the Stockholders will use its
commercially reasonable best efforts to secure, as soon as practicable after the
date hereof, all approvals or consents of third Persons as may be necessary to
enable them to consummate the transactions contemplated hereby. USC will use its
best efforts to secure, as soon as practicable after the date
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hereof, all approvals or consents of third Persons as may be necessary to enable
USC and USC Sub to consummate the transactions contemplated hereby.
(c) From the date hereof and until the Effective Time, USC
will (i) afford to the Representatives of the Company and the Stockholders
access to all sites, properties, books and records of USC and USC Sub, (ii)
provide the Company with such additional financial and operating data and other
information relating to the business and properties of USC and USC Sub as the
Company or any Stockholder may from time to time reasonably request and (iii)
cooperate with the Company and the Stockholders and their respective
Representatives in the preparation of any documents or other material which may
be required in connection with any Transaction Documents.
(d) If this Agreement is terminated pursuant to Section 11.01,
USC promptly will (i) return all written Confidential Information of the Company
it and USC Sub then possess to the Company and (ii) use commercially reasonable
efforts to facilitate the return to the Company of all Confidential Information
of the Company that USC or any of its Representatives has provided to any Other
Founding Company.
Section b. Conduct of Business Pending the Effective
Time. From the date hereof and until the Effective
Time, the Company will, and will cause each Company
Subsidiary to, except as and only to the extent set
forth in Schedule 4.02:
(i) carry on its businesses in substantially the same manner
as it has heretofore and not introduce any new methods of management,
operation or accounting that in the aggregate are Material to the
Acquired Business;
(ii) maintain its properties and facilities, including those
held under leases, in as good working order and condition as at
present, ordinary wear and tear excepted;
(iii) perform all its obligations under agreements relating to
or affecting its assets, properties and other rights;
(iv) keep in full force and effect without interruption all
its present insurance policies or other comparable insurance coverage;
(v) use reasonable commercial efforts to (A) maintain and
preserve its business organization intact, (B) retain its present
employees and (C) maintain its relationships with suppliers, customers
and others having business relations with it;
(vi) comply with all applicable Governmental Requirements that
in the aggregate are Material to the Acquired Business; and
(vii) except as this Agreement requires or expressly permits,
maintain the instruments and agreements governing its outstanding
Indebtedness and leases on their
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present terms and not enter into new or amended Indebtedness or lease
instruments or agreements involving amounts over $10,000 in any single
case or $100,000 in the aggregate, without the prior written consent of
USC (which consent will not be unreasonably withheld).
Section c. Prohibited Activities. From the date hereof
and until the Effective Time, without the prior
written consent of USC or unless as this Agreement
requires or expressly permits, the Company will not,
and will not permit any Company Subsidiary to, except
as and only to the extent Schedule 4.03 sets forth:
(i) make any change in its Charter Documents;
(ii) issue any of its Capital Stock or issue or otherwise
create any of its Derivative Securities;
(iii) make any Restricted Payment;
(iv) make any investments (other than Permitted Investments)
in the Capital Stock, Derivative Securities or Indebtedness of any
Person;
(v) enter into any contract or commitment or incur or agree to
incur any liability or make any capital expenditures in a single
transaction or a series of related transactions involving an aggregate
amount of more than $10,000 otherwise than in the ordinary course of
its business and consistent with its past practice;
(vi) increase or commit or promise to increase the Cash
Compensation payable or to become payable to any officer, director,
stockholder, employee or agent, consultant or independent contractor of
any of the Company and the Company Subsidiaries or make any
discretionary bonus or management fee payment to any such Person,
except bonuses or salary increases to employees (other than the
Stockholders or their Immediate Family Members) at the times and in the
amounts consistent with its past practice;
(vii) create, assume or permit to be created or imposed any
Liens (other than Permitted Liens) upon any of its assets or
properties, whether now owned or hereafter acquired, except for
purchase money Liens incurred in connection with the acquisition of
equipment with an aggregate cost not in excess of $10,000 and necessary
or desirable for the conduct of the business of any of the Company and
the Company Subsidiaries;
(viii) (A) adopt, establish, amend or terminate any ERISA
Employee Benefit Plan, or any Other Compensation Plan or Employee
Policies and Procedures or (B) take any discretionary action, or omit
to take any contractually required action, if that action or omission
could either (1) deplete the assets of any ERISA Employee Benefit Plan
or any Other Compensation Plan or (2) increase the liabilities or
obligations under any such plan;
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(ix) sell, assign, lease or otherwise transfer or dispose of
any of its owned or leased property or equipment otherwise than in the
ordinary course of its business and consistent with its past practice;
(x) negotiate for the acquisition of any business or the
start-up of any new business;
(xi) merge, consolidate or effect a share exchange with, or
agree to merge, consolidate or effect a share exchange with, any other
Entity;
(xii) waive any of its rights or claims that in the aggregate
are Material to the Acquired Business, provided that it may negotiate
and adjust bills in the course of good faith disputes with customers in
a manner consistent with past practice, but such adjustments will not
be deemed to be included in Schedule 4.03 unless the Supplemental
Information lists them;
(xiii) commit breaches that in the aggregate are Material to
the Acquired Business or amend or terminate any Material Agreement of
the Acquired Business or any of its Governmental Approvals; or
(xiv) enter into any other transaction (i) outside the
ordinary course of its business and consistent with its past practice
or (ii) prohibited hereby.
Section d. No Shop. Each of the Company and the
Stockholders agrees that, from the date hereof and
until the first to occur of the Effective Time or the
termination of this Agreement in accordance with
Article XI, neither the Company nor any Stockholder,
nor any of their respective officers and directors
will, and the Company and each Stockholder will
direct and use their reasonable best efforts to cause
each of their respective Representatives not to,
initiate, solicit, encourage or respond to, directly
or indirectly, any inquiries or the making or
implementation of any proposal or offer (including
any proposal or offer to the Stockholders) with
respect to a merger, acquisition, consolidation or
similar transaction involving, or any purchase of all
or any significant portion of the assets or any
equity securities of, the Company (any such proposal
or offer being an "Acquisition Proposal") or engage
in any activities, discussions or negotiations
concerning, or provide any Confidential Information
respecting, the Acquired Business, any Other Founding
Company or USC to, or have any discussions with, any
Person relating to an Acquisition Proposal or
otherwise facilitate any effort or attempt to make or
implement an Acquisition Proposal. The
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Company and each Stockholder will: (i) immediately
cease and cause to be terminated any existing
activities, discussions or negotiations with any
Persons conducted heretofore with respect to any of
the foregoing, and each will take the steps necessary
to inform the Persons referred to in the first
sentence of this Section 4.04 of the obligations
undertaken in this Section 4.04; and (ii) notify USC
immediately if any such inquiries or proposals are
received by, any such information is requested from
or any such discussions or negotiations are sought to
be initiated or continued with the Company or any
Stockholder.
Section e. Notice to Bargaining Agents. Prior to the
Closing Date, the Company will (i) satisfy any
requirement for notice of the transactions
contemplated by this Agreement under applicable
collective bargaining agreements and (ii) provide USC
with proof that any required notice has been sent.
Section f. Notification of Certain Matters. The
Stockholders and the Company will give prompt notice
to USC of (i) the existence or occurrence of each
condition or state of facts of which any of them
become aware that will or reasonably could be
expected to cause any representation or warranty of
the Company or any Stockholder contained herein to be
untrue or incorrect in any material respect at or
prior to the Closing or on the IPO Closing Date and
(ii) any material failure of any Stockholder or the
Company to comply with or satisfy any covenant,
condition or agreement to be complied with or
satisfied by that Person hereunder. USC will give
prompt notice to the Company of (i) the existence or
occurrence of each condition or state of facts of
which USC becomes aware that will or reasonably could
be expected to cause any representation or warranty
of USC or USC Sub contained herein to be untrue or
inaccurate at or prior to the Closing or on the IPO
Closing Date and (ii) any material failure of USC or
USC Sub to comply with or satisfy any covenant,
condition or agreement to be complied with or
satisfied by it hereunder. The delivery of any notice
pursuant to this Section 4.06 will not be deemed to
(i) modify the representations or warranties herein
of the party delivering that notice, or any other
party, which modification may be made only pursuant
to Section 4.07, (ii) modify the conditions set forth
or referred to in Article V or (iii) limit or
otherwise
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affect the remedies available hereunder to the party
receiving that notice.
Section g. Supplemental Information. Each of the
Company and the Stockholders agrees that, with
respect to the representations and warranties of that
party contained in this Agreement, that party will
have the continuing obligation (except to the extent
Section 4.03 or 4.06 otherwise provides) until the
Closing to provide USC promptly with such additional
supplemental Information (collectively, the
"Supplemental Information"), in the form of (i)
amendments to then existing Schedules or (ii)
additional Schedules, as would be necessary, in the
light of the circumstances, conditions, events and
states of facts then known to the Company or any
Stockholder, to make each of those representations
and warranties true and correct as of the Closing and
on the IPO Closing Date. For purposes only of
determining whether the conditions to the obligations
of USC and USC Sub which are specified in Section
5.03 have been satisfied, the Schedules as of the
Closing Date will be deemed to be the Schedules as of
the date hereof as amended or supplemented by the
Supplemental Information provided to USC prior to the
Closing pursuant to this Section 4.07; provided,
however, that if the Supplemental Information so
provided discloses the existence of circumstances,
conditions, events or states of facts which, in any
combination thereof, (i) have had a Material Adverse
Effect that was not reflected in the determination of
the Ceiling Amount or, in the sole judgment of USC
(which will be conclusive for purposes of this
Section 4.07 and Article XI, but not for any purpose
of Section 6.05 or Article VII), (ii) are having or
will have a Material Adverse Effect, USC will be
entitled to terminate this Agreement pursuant to
Section 11.01(iv); and provided, further, that if USC
is entitled to terminate this Agreement pursuant to
Section 11.01(iv), but elects not to do so, it will
be entitled to treat as USC Indemnified Losses or USC
Unindemnified Losses (which treatment will not
prejudice the right of any Stockholder under Section
6.05 or Article VII, as applicable, to contest Damage
Claims made by USC in respect of those USC
Indemnified Losses or USC Unindemnified Losses), as
applicable, all Damages to the Acquired Business
which are attributable to the circumstances,
conditions, events and states of facts first
disclosed herein after the date hereof in the
Supplemental
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Information. USC will provide the Company with copies
of the Registration Statement, including all
pre-effective amendments thereto, promptly after the
filing thereof with the SEC under the Securities Act.
Section h. Cooperation in Connection With the IPO. The
Company and the Stockholders will (i) provide USC,
the Underwriter and their respective Representatives
with all the Information concerning the Company or
any of the Stockholders which is reasonably requested
by USC, the Underwriter or their respective
Representatives from time to time in connection with
effecting the IPO and (ii) cooperate with USC and the
Underwriter and their respective Representatives in
the preparation and amendment of the Registration
Statement (including the Financial Statements) and in
responding to the comments of the SEC staff, if any,
with respect thereto. The Company and each
Stockholder agree promptly to (i) advise USC and
their legal counsel if, at any time during the period
in which a prospectus relating to the IPO is required
to be delivered under the Securities Act, any
information contained in the then current
Registration Statement prospectus concerning the
Company or the Stockholders becomes incorrect or
incomplete in any material respect and (ii) provide
USC and their legal counsel with the information
needed to correct or complete that information. Prior
to the time the Registration Statement or any post-
effective amendment thereto becomes effective under
the Securities Act, USC will provide an opportunity
to review and comment with respect to that document
to one counsel selected by a majority in number of
the Founding Companies and reasonably satisfactory to
USC.
Section i. Additional Financial Statements. The Company
will furnish to USC:
(i) as soon as available and in any event within 30 days after
the end of each of the Company's fiscal quarters which ends prior to
the IPO Pricing Date, an unaudited balance sheet of the Acquired
Business as of the end of that fiscal quarter and the related
statements of income or operations, cash flows and stockholders' or
other owners' equity for that fiscal quarter and for the period of the
Acquired Business' fiscal year ended with that quarter, in each case
(A) setting forth in comparative form the figures for the corresponding
portion of the Acquired Business' previous fiscal year and (B) prepared
on the same combined, consolidated or other basis on which the Initial
Financial Statements were prepared in accordance with GAAP applied on
basis consistent (1) throughout the periods indicated
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(excepting footnotes) and (2) with the basis on which the Initial
Financial Statements including the Current Balance Sheet were prepared;
and
(ii) if requested by USC in connection with any amendment of
the Registration Statement and promptly following any such request,
such summary combined, consolidated or other operating or other
financial information of the Acquired Business as of the end of either
the first or second fiscal month in any of the Acquired Business'
fiscal quarters as USC may request.
Section j. Termination of Plans. If requested by USC,
the Company will, or will cause the applicable
Company Subsidiary to, if permitted by all applicable
Governmental Requirements to do so, terminate each
Plan Schedule 2.27 identifies as a "Plan To Be
Terminated" prior to the Effective Time.
Section k. Disposition of Unwanted Assets. At or prior
to the Closing, the Company will make all
arrangements and take all such actions as are
necessary and satisfactory to USC to dispose, prior
to the Effective Time, of those assets of it or of
one or more of the Company Subsidiaries which
Schedule 4.11 lists as unwanted assets.
Section l. HSR Act Matters. If USC determines that
filings pursuant to and under the HSR Act are
necessary or appropriate in connection with the
effectuation of the Acquisition or the consummation
of the acquisitions contemplated by the Other
Agreements, and advises the Company in writing of
that determination, the Company promptly will compile
and file (or will cause its "ultimate parent entity"
(as determined for purposes of the HSR Act) to file)
under the HSR Act such information respecting it as
the HSR Act requires of an Entity to be acquired, and
the expiration or termination of the applicable
waiting period and any extension thereof under the
HSR Act will be deemed a condition precedent Section
5.01(b) sets forth. USC will assist the Company in
its preparation of that information, if any.
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ARTICLE 5.
THE CLOSING AND CONDITIONS TO CLOSING AND CONSUMMATION
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Section a. Conditions to the Obligations of Each Party.
(a) The obligation of each party hereto to take the
actions contemplated to be taken by that party at the
Closing is subject to the satisfaction on or before
the Closing Date, or written waiver pursuant to
Section 10.04, of each of the following conditions:
(i) No Litigation. No Litigation shall be pending on the
Closing Date to restrain, prohibit or otherwise interfere with, or to
obtain material damages or other relief from USC, any Subsidiary of
USC, the Company or any Company Subsidiary in connection with, the
consummation of the Acquisition or the IPO;
(ii) Governmental Approvals. All Governmental Approvals (other
than the acceptance for filing of the Certificates of Merger) required
to be obtained by any of the Company, USC and USC Sub in connection
with the consummation of the Acquisition and the IPO shall have been
obtained; and
(iii) The Registration Statement. (A) The Registration
Statement, as amended to cover the offering, issuance and sale by USC
of such number of shares of USC Common Stock at the IPO Price (which
need not be set forth in the Registration Statement when it becomes
effective under the Securities Act) as shall yield aggregate cash
proceeds to USC from that sale (net of the Underwriter's discount or
commissions) in at least the amount (the "Minimum Cash Amount") that is
sufficient, when added to the funds, if any, available from other
sources (if any, and as set forth in the Registration Statement when it
becomes effective under the Securities Act) (the "Other Financing
Sources") to enable USC to pay or otherwise deliver on the IPO Closing
Date (1) the total cash portion of the Acquisition Consideration then
to be delivered pursuant to Paragraph 2, (2) the total cash portion of
the acquisition consideration then to be delivered pursuant to the
Other Agreements as a result of the consummation of the acquisition
transactions contemplated thereby and (3) the total amount of
Indebtedness of the Founding Companies and USC which the Registration
Statement discloses at the time it becomes effective under the
Securities Act will be repaid with proceeds received by USC from the
IPO and the Other Financing Sources, shall have been declared effective
under the Securities Act by the SEC; (B) no stop order suspending the
effectiveness of the Registration Statement shall have been issued by
the SEC, and the SEC shall not have initiated or threatened to initiate
Litigation for that purpose; and (C) the Underwriter shall have agreed
in writing (the "Underwriting Agreement," which term includes the
related pricing agreement, if any) to purchase from USC on a firm
commitment basis for resale to the public initially at the IPO Price,
subject to the conditions set forth in the Underwriting Agreement, such
number of shares of USC Common Stock covered by the Registration
Statement as, when multiplied by the price per share of USC Common
Stock to be paid by the Underwriter to USC pursuant to the Underwriting
Agreement, equals at least the Minimum Cash Amount.
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(b) The obligation of each party hereto with respect to the
actions to be taken on the IPO Closing Date is subject to the satisfaction on
that date of each of the following conditions:
(i) No Litigation. No Litigation shall be pending on the IPO
Closing Date to restrain, prohibit or otherwise interfere with, or to
obtain material damages or other relief from USC or any Subsidiary of
USC in connection with, the consummation of the Acquisition or the IPO;
(ii) Governmental Approvals. All Governmental Approvals
required to be obtained by the Company, USC and USC Sub in connection
with the consummation of the Acquisition and the IPO shall have been
obtained; and
(iii) Closing of the IPO. USC shall have issued and sold
shares of USC Common Stock to the Underwriter in accordance with the
Underwriting Agreement for initial resale at the IPO Price and received
payment therefor in an amount at least equal to the amount by which (A)
the Minimum Cash Amount exceeds (B) the aggregate amount of funds
actually received on the IPO Closing Date, if any, from any one or more
of the Other Financing Sources.
Section b. Conditions to the Obligations of the Company
and the Stockholders. (a) The obligations of the
Company and each Stockholder with respect to actions
to be taken by them at or before the Closing are
subject to the satisfaction on or before the Closing
Date, or the written waiver by the Company on behalf
of itself and each Stockholder pursuant to Section
10.04, of (i) all the conditions Paragraph 5 and
Section 5.01(a) set forth and (ii) all the following
conditions:
(A) Representations and Warranties. All the representations
and warranties of USC in this Agreement shall be true and correct as of
the Closing as though made at that time;
(B) Performance of Covenants. USC and USC Sub shall have
complied with all their respective covenants in Article IV;
(C) Delivery of Documents. USC shall have delivered to the
Company, with copies for each Stockholder:
(1) a USC officer's certificate respecting the
representations and warranties of USC in this Agreement and
compliance with the covenants of USC and USC Sub in Article IV
and in the form thereof attached as an exhibit to the Closing
Memorandum;
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(2) an opinion dated the Closing Date and addressed
to the Company and the Stockholders from Counsel for USC and
USC Sub substantially in the form thereof attached as an
exhibit to the Closing Memorandum;
(3) a certificate of the secretary or any assistant
secretary of USC in the form thereof (without attachments
thereto) attached as an exhibit to the Closing Memorandum and
respecting, and to which is attached: (a) the Charter
Documents of each of USC and USC Sub (certified by the
Secretary of State of the State of Delaware in the case of its
certificate of incorporation included therein); (b) the
resolutions of the boards of directors of USC and USC Sub
respecting the Transaction Documents and the transactions
contemplated thereby; (c) a certificate respecting the
incumbency and true signatures of the USC and USC Sub officers
who execute the Transaction Documents on behalf of USC and USC
Sub, respectively; and (d) a specimen certificate evidencing
shares of USC Common Stock;
(4) the Registration Rights Agreement duly executed
and delivered by USC; and
(5) for USC, a certificate, dated as of a Current
Date, duly issued by the appropriate Governmental Authorities
in the State of Delaware showing it to be in existence or good
standing and authorized to do business in that State; and
(D) Incentive Plan. The Incentive Plan the Private Placement
Memorandum describes shall be in full force and effect.
(b) The obligations of the Company and each Stockholder with
respect to the actions to be taken on the IPO Closing Date are subject to the
satisfaction on that date of (i) all the conditions Section 5.01(b) sets forth,
(ii) the condition that all the representations and warranties of USC in this
Agreement shall be true and correct as of the IPO Closing Date as though made on
that date, (iii) the condition that USC and USC Sub shall have complied with all
their respective covenants in Article IV, (iv) the condition Section
5.02(a)(ii)(D) sets forth, (v) the condition that USC shall have delivered to
the Company and each Stockholder a copy of (A) an opinion from Counsel for USC
and USC Sub dated the IPO Closing Date and addressed to USC and providing the
Stockholders may rely thereon, respecting Section 351 of the Code and
substantially in the form thereof attached as an exhibit to the Closing
Memorandum, and (B) a certificate of USC in substantially the form thereof
attached to the form of opinion to which subclause (A) of this clause (v) refers
and (vi) all the conditions Paragraph 5 sets forth, if any.
Section c. Conditions to the Obligations of USC and USC
Sub. (a) The obligations of USC and USC Sub with
respect to actions to be taken by them at or before
the Closing are subject to the satisfaction on or
before the Closing Date, or the written waiver by USC
pursuant to Section 10.04, of (i)
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all the conditions Paragraph 5 and Section 5.01(a)
set forth and (ii) all the following conditions:
(A) Representations and Warranties. All the representations
and warranties of the Stockholders and the Company in this Agreement
shall be true and correct as of the Closing as though made at that
time;
(B) Performance of Covenants. The Company and the Stockholders
shall have complied with all their respective covenants in Article IV;
(C) Delivery of Documents. The Stockholders and the Company
shall have delivered to USC:
(1) a Company officer's certificate, signed by a
Responsible Officer, respecting the representations and
warranties of the Stockholders and the Company in this
Agreement and compliance with the covenants of the
Stockholders and the Company in Article IV and in the form
thereof attached as an exhibit to the Closing Memorandum;
(2) an opinion dated the Closing Date and addressed
to USC from Counsel for the Company and the Stockholders
substantially in the form thereof attached as an exhibit to
the Closing Memorandum;
(3) a certificate of the secretary or any assistant
secretary of the Company in the form thereof (without
attachments thereto) attached as an exhibit to the Closing
Memorandum and respecting, and to which is attached, (a) the
Charter Documents of the Company; (b) the resolutions of the
board of directors of the Company respecting the Transaction
Documents and the transactions contemplated thereby; and (c) a
certificate respecting the incumbency and true signatures of
the Responsible Officers who execute the Transaction Documents
on behalf of the Company;
(4) from each Stockholder, a certificate to the
effect that no withholding is required under Section 1445 of
the Code and in the form thereof attached as an exhibit to the
Closing Memorandum, with the blanks appropriately filled, duly
executed and delivered by that Stockholder;
(5) From each officer and director of the Company and
each Company Subsidiary, if any, a notice of resignation in
the form thereof attached as an exhibit to the Closing
Memorandum; and
(6) for each of the Company and the Company
Subsidiaries, a certificate, dated as of a Current Date, duly
issued by the appropriate Governmental Authorities in its
Organization State and, in each other jurisdiction Schedule
2.02 lists for it,
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showing it to be in good standing and authorized to do
business in its Organization State and those other
jurisdictions and that all state franchise and/or income tax
returns and taxes due by it in its Organization State and
those other jurisdictions for all periods prior to the Closing
have been filed and paid.
(b) The obligations of USC and USC Sub with respect to the
actions to be taken on the IPO Closing Date are subject to the satisfaction on
that date of (i) all the conditions Section 5.01(b) sets forth, (ii) the
condition that all the representations and warranties of the Stockholders and
the Company in this Agreement shall be true and correct as of the IPO Closing
Date as though made on that date, (iii) the condition that the Company and the
Stockholders shall have complied with all their respective covenants in Article
IV and (iv) the conditions Paragraph 5 sets forth, if any.
ARTICLE 6.
COVENANTS FOLLOWING THE EFFECTIVE TIME
Section a. Disclosure. If, subsequent to the IPO
Pricing Date and prior to the 25th day after the date
of the Final Prospectus, any Stockholder becomes
aware of any fact or circumstance which would change
(or, if after the Effective Time, would have changed)
in any material respect a representation or warranty
of the Company or any Stockholder in this Agreement
or would affect any document delivered pursuant
hereto in any material respect, that Stockholder will
promptly give notice of that fact or circumstance to
USC.
Section b. Preparation and Filing of Tax Returns. After
the Effective Time, each party hereto will, and will
cause its Affiliates to, provide to each of the other
parties hereto such cooperation and information as
any of them reasonably may request in filing any
Return, amended Return or claim for refund,
determining a liability for Taxes or a right to
refund of Taxes or in conducting any audit or other
proceeding in respect of Taxes. Subject to the second
to last sentence of this Section 6.02, this
cooperation will be at the expense of the requesting
party. This cooperation and information shall include
providing copies of all relevant portions of the
relevant Returns, together with such accompanying
schedules and work papers, documents relating to
rulings or other determinations by Taxing Authorities
and records concerning the ownership and Tax bases of
property as are relevant which a party possesses.
Each party will make its employees, if any,
reasonably available on a mutually convenient basis
at its cost
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to provide an explanation of any documents or
information so provided. Subject to the preceding
sentence, each party required to file Returns
pursuant to this Agreement will bear all costs
attributable to the preparation and filing of those
Returns. USC will not, directly or indirectly, take
any action after the Effective Time that would
disqualify the Merger as an exchange under Section
351 of the Code.
Section c. Directors. Effective on the IPO Closing
Date, USC will cause such corporate proceedings as on
its part will be necessary to cause each of the
persons who are named in the Private Placement
Memorandum as persons who will become members of the
board of directors of USC following the Effective
Time (other than any such person who, after the date
of the Private Placement Memorandum, declines to
become a member of that board) to be initially
appointed to that board when the Private Placement
Memorandum so provides.
Section d. Removal of Guaranties. USC will use its
reasonable efforts to ensure that, within 90 days
after the Effective Time, either (i) the Stockholder
Guaranties, if any, Schedule 6.04 lists are
terminated or (ii) the Indebtedness to which those
Guaranties relate is retired; provided, however, that
if USC is unable to effect the termination of any of
those Guaranties or the retirement of any of that
Indebtedness, USC will indemnify and hold harmless
each Stockholder from and against any liabilities,
claims, demands, judgments, losses, costs, damages or
expenses whatsoever (including reasonable attorneys'
fees) that Stockholder may sustain, suffer or incur
and result from or arise out of or relate to that
Guaranty or that Indebtedness, as the case may be.
Section e. Survival of Representations and Warranties.
(a) Notwithstanding any investigation at any time
made by or on behalf of any party hereto, the
representations and warranties set forth in Articles
I, II and III and in any certificate delivered in
connection herewith with respect to any of those
representations and warranties will survive the
closing and the Effective Time until the day that is
two years from the Effective Time, whereupon they
will terminate and expire, except as follows: (i) the
representations and warranties of the Stockholders
which relate expressly or by necessary implication to
Taxes, ERISA or the Governmental
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Requirements referred to in clause (iii) of Section
7.02(a) will survive until the expiration of the
applicable statutes of limitations (including all
periods of extension and tolling); (ii) the
representations and warranties of the Stockholders
which relate expressly or by necessary implication to
the environment or Environmental Laws will survive
for a period of four years from the Effective Time;
and (iii) the representations and warranties of the
Company will terminate and expire at the Effective
Time.
(b) After a representation and warranty has expired, as
Section 6.05(a) provides, no Damage Claim constituting a USC Indemnified Loss
will or may be made or prosecuted through Litigation or otherwise by any Person
who would have been entitled to Damages on the basis of that representation and
warranty prior to its termination and expiration, provided that: (i) the amount
of that claim, if against any Stockholder, will be taken into account in
determining whether the aggregate amount of all claims against that Stockholder
has exceeded that Stockholder's Pro Rata Share of the Threshold Amount for
purposes of Section 6.06; and (ii) in the case of each representation and
warranty that will terminate and expire as this Section 6.05 provides, no Damage
Claim presented in writing for Damages to the Person or Persons from which or
whom those damages are sought on the basis of that representation and warranty
prior to its termination and expiration will be affected in any way by that
termination and expiration.
Section f. Limitations on Damage Claims. (a) If USC
should have any Damage Claim hereunder following the
Effective Time against any Stockholder which does not
involve a USC Indemnified Loss (each such Damage
Claim not involving a USC Indemnified Loss being an
"USC Unindemnified Loss"), that Stockholder will not
be liable to USC on account of that USC Unindemnified
Loss unless the liability of that Stockholder in
respect of that USC Unindemnified Loss, when
aggregated with the liability of all Stockholders in
respect of the sum of (i) all USC Unindemnified
Losses and (ii) all USC Indemnified Losses under
Section 7.02(a), exceeds, and only to the extent the
aggregate amount of all those USC Unindemnified
Losses and USC Indemnified Losses does exceed, the
Threshold Amount. In no event will (i) the aggregate
joint and several liability of the Stockholders under
this Agreement, including Section 7.02(a), exceed the
Ceiling Amount or (ii) the aggregate liability of
each Stockholder under this Agreement, including
Sections 7.02(a) and 7.02(b), exceed that
Stockholder's Pro Rata Share of the Ceiling Amount.
For purposes of determining the amount of USC
Unindemnified Losses and USC Indemnified Losses, no
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effect will be given to any resulting Tax benefit to
USC or any other USC Indemnified Party.
(b) If any Stockholder should have any Damage Claim hereunder
following the Effective Time against USC which does not involve a Stockholder
Indemnified Loss (each such Damage Claim not involving a Stockholder Indemnified
Loss being a "Stockholder Unindemnified Loss"), USC will not be liable to that
Stockholder on account of that Stockholder Unindemnified Loss unless the
liability of USC on account of that Stockholder Unindemnified Loss, when
aggregated with the liability of USC in respect of the sum of (i) all
Stockholder Unindemnified Losses for which it has become liable and (ii) all
Stockholder Indemnified Losses for which it has become liable, exceeds, and only
to the extent the aggregate amount of all those Stockholder Unindemnified Losses
and Stockholder Indemnified Losses does exceed, the Threshold Amount. In no
event will USC be liable under this Agreement, including Section 7.03, for any
amount in excess of the Ceiling Amount. For purposes of determining the amount
of Stockholder Unindemnified Losses and Stockholder Indemnified Losses, no
effect will be given to any resulting Tax benefit to any Stockholder Indemnified
Party.
(c) Neither any USC Unindemnified Loss nor any Stockholder
Unindemnified Loss will include any consequential, exemplary, punitive or treble
damage (including any loss of earnings or profits), and USC hereby releases each
Stockholder, and each Stockholder hereby releases USC, in each case to the
fullest extent applicable law permits, from liability for any such excluded
Damage.
Section g. Working Capital Adjustment. (a) This Section
6.07 uses the following terms with the meanings it
assigns to them below:
"Adjustment Determination Date" means the date that is 30 days
following delivery by USC of the Post-closing Statement to the
Stockholders, unless the Independent Accountants determine any Computed
Amount pursuant to Section 6.07(b), in which event the Adjustment
Determination Date is the date the Independent Accountants deliver each
determination in writing to USC.
"Current Balance Sheet Date Adjusted Working Capital" means
the amount by which (i) the Current Balance Sheet Date Working Capital
exceeds (ii) the sum of (A) the Current Balance Sheet Excess Cash and
(B) the 1998 Restricted Payment Amount.
"Current Balance Sheet Excess Cash" means, as determined from
the Current Balance Sheet, the amount by which (i) the total amount
that is included and classified as current assets comprised of
unrestricted cash and cash equivalents on that balance sheet exceeds
(ii) the Minimum Cash Balance.
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"Computed Amount" means any of the following: (i) the Cash
Balance; (ii) the Final Cash Balance; (iii) the Final Working Capital;
(iv) the 1999 Permitted Restricted Payment Amount; (v) the Negative Net
Adjustment; and (vi) the Positive Net Adjustment.
"Final Balance Sheet" means a balance sheet of the Acquired
Business as of the effective date USC uses to record the Acquisition in
accordance with GAAP and which is prepared in accordance with GAAP on
the same basis on which the Current Balance Sheet was prepared.
"Final Cash Balance" means, as determined from the Final
Balance Sheet, the total amount that is included and classified as
current assets comprised of unrestricted cash and cash equivalents on
that balance sheet.
"Final Excess Cash" means the lesser of (i) the Current
Balance Sheet Excess Cash or (ii) the amount, if any, by which the
Final Cash Balance exceeds the Minimum Cash Balance.
"Final Working Capital" means, as determined from the Final
Balance Sheet, the amount by which (i) the sum, without duplication of
amounts, of all amounts that are included and classified as current
assets on that balance sheet exceeds, or is exceeded by, (ii) the sum,
without duplication of amounts, of all amounts that are included and
classified as liabilities or as mandatorily redeemable Capital Stock on
that balance sheet; provided, that if the Independent Accountants make
the determination of any Computed Amount pursuant to Section 6.07(b),
the amount equal to 50% of their fees and expenses which are
attributable to their audit of the Final Balance Sheet and their making
of that determination will be deemed a liability of the Acquired
Business for the purpose of determining its Final Working Capital; and
provided, further, that if at any time those current assets are
exceeded by those liabilities and that Capital Stock, Final Working
Capital will be expressed as a negative amount
"Negative Net Adjustment" means: (i) if the Current Balance
Sheet Date Adjusted Working Capital is a positive amount, the amount,
if any, by which the Current Balance Sheet Date Adjusted Working
Capital exceeds the Final Working Capital; and (ii) if the Current
Balance Sheet Date Adjusted Working Capital is a negative amount, the
amount, if any, by which the Final Working Capital is more negative
than the Current Balance Sheet Date Adjusted Working Capital.
"1999 Restricted Payment Amount" means, if the Company is
subject to Subchapter S of the Code, the amount equal to the amount the
Company records as income for the period beginning on January 1, 1999
and ending on the day preceding the IPO Closing Date in its accumulated
adjustments account in accordance with the applicable provisions of the
Code.
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"Positive Net Adjustment" means, if the Current Balance Sheet
Date Adjusted Working Capital is (i) a positive amount and the Final
Working Capital is the same as or greater than that positive amount or
(ii) a negative amount and the Final Working Capital is the same as or
less negative than that negative amount, the lesser of the Current
Balance Sheet Excess Cash or the Final Excess Cash.
(b) As soon as practicable and in any event within 75 days
after the Effective Date, USC will cause to be prepared in writing and delivered
to the Stockholders (i) the Final Balance Sheet and (ii) a statement (the
"Post-closing Statement") setting forth each Computed Amount. The Final Balance
Sheet and the Post-closing Statement will be final and binding on USC and the
Stockholders unless, within 30 days following the delivery of the Post-closing
Statement, any Stockholder notifies USC in writing that that Stockholder does
not accept as correct one or more of the Computed Amounts the Post-closing
Statement sets forth. If any Stockholder timely delivers that notice respecting
the Post-closing Statement, the Independent Accountants will audit the Final
Balance Sheet and determine each Computed Amount from that audited balance sheet
within 30 days after the delivery to USC of that notice, and these
determinations will be final and binding on USC and each Stockholder. If a
Negative Net Adjustment is determined with finality pursuant to this Section
6.07(b), each Stockholder will, no later than 10 Houston, Texas business days
after USC makes a written request therefor, pay in cash that Stockholder's Pro
Rata Share of that Negative Net Adjustment, and if a Positive Net Adjustment is
determined with finality pursuant to this Section 6.07(b), USC will, no later
than 10 Houston, Texas business days after that determination, pay in cash to
each Stockholder that Stockholder's Pro Rata Share of that Positive Net
Adjustment, together, in the case of any amount payable by the Stockholders or
USC pursuant to this Section 6.07(b), with interest on that sum at 8% per annum
from (and including) the Effective Date to (but excluding) the Adjustment
Determination Date.
ARTICLE 7.
INDEMNIFICATION
Section a. In Respect of Representations and
Warranties. After a representation and warranty has
terminated and expired as Section 6.05 provides, no
indemnification will or may be sought pursuant to
this Article VII on the basis of that representation
and warranty by any Person who would have been
entitled pursuant to this Article VII to
indemnification on the basis of that representation
and warranty prior to its termination and expiration,
provided that, in the case of each representation and
warranty that will terminate and expire as Section
6.05 provides, no claim presented in writing for
indemnification pursuant to this Article VII on the
basis of that representation and warranty prior to
its termination and expiration will be affected in
any way by that termination and expiration.
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Section b. Indemnification of USC Indemnified Parties.
(a) Subject to the applicable provisions of Sections
7.01 and 7.06, the Stockholders covenant and agree
that they, jointly and severally, will indemnify each
USC Indemnified Party against, and hold each USC
Indemnified Party harmless from and in respect of,
all Third Party Claims that arise from, are based on
or relate or otherwise are attributable to (i) any
breach of the representations and warranties of the
Stockholders or the Company set forth herein (other
than in Article I) or in certificates delivered in
connection herewith (other than in respect of
certificates relating only to the representations and
warranties in Article I), (ii) any nonfulfillment of
any covenant or agreement on the part of the
Stockholders or the Company under this Agreement or
(iii) any liability under the Securities Act, the
Exchange Act or other applicable Governmental
Requirement which arises out of or is based on (A)
any untrue statement or alleged untrue statement of a
material fact relating to the Company and the Company
Subsidiaries, or any of them, which is both (1)
provided to USC or its counsel by the Company or the
Stockholders in writing and (2) contained in any
preliminary prospectus relating to the IPO, the
Registration Statement or any prospectus forming a
part thereof, or any amendment thereof or supplement
thereto, or (B) any omission or alleged omission to
state therein a material fact relating to the Company
and the Company Subsidiaries, or any of them,
required to be stated therein or necessary to make
the statements therein not misleading, and not
provided to USC or its counsel by the Company or the
Stockholders in writing (each such Third Party Claim
and each Third Party Claim Section 7.02(b) describes
being an "USC Indemnified Loss").
(b) Each Stockholder, severally and not jointly with any other
Person, covenants and agrees that he will indemnify each USC Indemnified Party
against, and hold each USC Indemnified Party harmless from and in respect of,
all Third Party Claims that arise from, are based on or relate or otherwise are
attributable to (i) any breach of the representations and warranties of that
Stockholder solely as to that Stockholder set forth in Article I or in
certificates delivered by that Stockholder and relating to those representations
and warranties, (ii) any nonfulfillment of any several, and not joint and
several, agreement on the part of that Stockholder under this Agreement or (iii)
any liability under the Securities Act, the Exchange Act or other applicable
Governmental Requirement which arises out of or is based on (A) any untrue
statement or alleged untrue statement of a material fact relating solely to that
Stockholder which is both (1) provided to USC or its counsel by that Stockholder
in writing and (2) contained in any preliminary prospectus relating to the IPO,
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the Registration Statement or any prospectus forming a part thereof, or any
amendment thereof or supplement thereto, or (B) any omission or alleged omission
to state therein a material fact relating solely to that Stockholder required to
be stated therein or necessary to make the statements therein not misleading,
and not provided to USC or its counsel by that Stockholder in writing.
Section c. Indemnification of Stockholder Indemnified
Parties. USC covenants and agrees that it will
indemnify each Stockholder Indemnified Party against,
and hold each Stockholder Indemnified Party harmless
from and in respect of, all Third Party Claims that
arise from, are based on or relate or otherwise are
attributable to (i) any breach by USC of its
representations and warranties set forth herein or in
its certificates delivered to the Company or the
Stockholders in connection herewith, (ii) any
nonfulfillment of any covenant or agreement on the
part of USC or USC Sub under this Agreement or (iii)
any liability under the Securities Act, the Exchange
Act or other applicable Governmental Requirement
which arises out of or is based on (A) any untrue
statement or alleged untrue statement of a material
fact relating to USC or any Subsidiary of USC
contained in any preliminary prospectus relating to
the IPO, the Registration Statement or any prospectus
forming a part thereof, or any amendment thereof or
supplement thereto, or (B) any omission or alleged
omission to state therein a material fact relating to
USC or any Subsidiary of USC required to be stated
therein or necessary to make the statements therein
not misleading in the light of the circumstances
under which they were made (each such Third Party
Claim being a "Stockholder Indemnified Loss").
Section d. Conditions of Indemnification. (a) All
claims for indemnification under this Agreement shall
be asserted and resolved as this Section 7.04
provides.
(b) A party claiming indemnification under this Agreement (an
"Indemnified Party") shall promptly (i) notify the party from whom
indemnification is sought (the "Indemnifying Party") of any Third Party Claim
asserted against the Indemnified Party which could give rise to a right of
indemnification under this Agreement and (ii) transmit to the Indemnifying Party
a written notice (a "Claim Notice") describing in reasonable detail the nature
of the Third Party Claim, a copy of all papers served with respect to that claim
(if any), an estimate of the amount of damages attributable to that claim to the
extent feasible (which estimate will not be conclusive of the final amount of
that claim) and the basis for the Indemnified Party's request for
indemnification under this Agreement. Except as Section 7.01 sets forth, the
failure to promptly deliver a Claim Notice will not relieve the Indemnifying
Party of its obligations to the Indemnified Party with respect to the
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related Third Party Claim except to the extent that the resulting delay is
materially prejudicial to the defense of that claim. Within 30 days after
receipt of any Claim Notice (the "Election Period"), the Indemnifying Party must
notify the Indemnified Party (i) whether the Indemnifying Party disputes its
potential liability to the Indemnified Party under this Article VII with respect
to that Third Party Claim and (ii) if the Indemnifying Party does not dispute
its potential liability to the Indemnified Party with respect to that Third
Party Claim, whether the Indemnifying Party desires, at the sole cost and
expense of the Indemnifying Party, to defend the Indemnified Party against that
Third Party Claim.
(c) If the Indemnifying Party does not dispute its potential
liability to the Indemnified Party and notifies the Indemnified Party within the
Election Period that the Indemnifying Party elects to assume the defense of the
Third Party Claim, then the Indemnifying Party will have the right to defend, at
its sole cost and expense, that Third Party Claim by all appropriate
proceedings, which proceedings the Indemnifying Party must prosecute diligently
to a final conclusion or settle at its discretion in accordance with this
Section 7.04(c), and the Indemnified Party will furnish the Indemnifying Party
with all information in its possession with respect to that Third Party Claim
and otherwise cooperate with the Indemnifying Party in the defense of that Third
Party Claim; provided, however, that the Indemnifying Party will not enter into
any settlement with respect to any Third Party Claim that purports to limit the
activities of, or otherwise restrict in any way, any Indemnified Party or any
Affiliate of any Indemnified Party without the prior consent of that Indemnified
Party (which consent may be withheld in the reasonable discretion of that
Indemnified Party). The Indemnified Party is hereby authorized, at the sole cost
and expense of the Indemnifying Party, to file, during the Election Period, any
motion, answer or other pleadings that the Indemnified Party deems necessary or
appropriate to protect its interests or those of the Indemnifying Party. The
Indemnified Party may participate in, but not control, any defense or settlement
of any Third Party Claim the Indemnifying Party controls pursuant to this
Section 7.04(c) and will bear its own costs and expenses with respect to that
participation; provided, however, that if the named parties to any such action
(including any impleaded parties) include both the Indemnifying Party and the
Indemnified Party, and the Indemnified Party has been advised by counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the Indemnifying Party, then the Indemnified
Party may employ separate counsel at the expense of the Indemnifying Party, and,
on its written notification of that employment, the Indemnifying Party will not
have the right to assume or continue the defense of that action on behalf of the
Indemnified Party.
(d) If the Indemnifying Party (i) within the Election Period
(A) disputes its potential liability to the Indemnified Party under this Article
VII, (B) elects not to defend the Indemnified Party pursuant to Section 7.04(c)
or (C) fails to notify the Indemnified Party that the Indemnifying Party elects
to defend the Indemnified Party pursuant to Section 7.04(c) or (ii) elects to
defend the Indemnified Party pursuant to Section 7.04(c), but fails diligently
and promptly to prosecute or settle the Third Party Claim, then the Indemnified
Party will have the right to defend, at the sole cost and expense of the
Indemnifying Party (if the Indemnified Party is entitled to indemnification
hereunder), the Third Party Claim by all appropriate proceedings, which
proceedings the Indemnified Party must promptly and vigorously prosecute to a
final conclusion or settlement,
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provided that the Indemnified Party will not enter into any such settlement
without the prior consent of the Indemnifying Party (which consent may not be
unreasonably withheld) (provided that the Indemnifying Party shall be deemed to
have consented to that settlement if the Indemnifying Party has not objected
within five Houston, Texas business days after the Indemnified Party has
provided the Indemnifying Party with a written notice setting forth the proposed
terms of the settlement in reasonable detail). The Indemnified Party will have
full control of such defense and proceedings. Notwithstanding the foregoing, if
the Indemnifying Party has delivered a written notice to the Indemnified Party
to the effect that the Indemnifying Party disputes its potential liability to
the Indemnified Party under this Article VII and if that dispute is resolved in
favor of the Indemnifying Party, the Indemnifying Party will not be required to
bear the costs and expenses of the Indemnified Party's defense pursuant to this
Section 7.04 or of the Indemnifying Party's participation therein at the
Indemnified Party's request, and the Indemnified Party will reimburse the
Indemnifying Party in full for all reasonable costs and expenses of that
litigation. The Indemnifying Party may participate in, but not control, any
defense or settlement the Indemnified Party controls pursuant to this Section
7.04(d), and the Indemnifying Party will bear its own costs and expenses with
respect to that participation.
(e) Payments of all amounts owing by an Indemnifying Party
pursuant to this Article VII relating to a Third Party Claim will be made within
30 days after the latest of (i) the settlement of that Third Party Claim, (ii)
the expiration of the period for appeal of a final adjudication of that Third
Party Claim or (iii) the expiration of the period for appeal of a final
adjudication of the Indemnifying Party's liability to the Indemnified Party
under this Agreement in respect of that Third Party Claim.
(f) If any Stockholder has any indemnification obligation to
USC that becomes payable under Section 7.04(e) during the Restricted Period,
that Stockholder may, with the written consent of USC (which shall not be
unreasonably withheld) and within the payment period Section 7.04(e) prescribes,
satisfy that obligation by transferring to USC such number of shares of USC
Common Stock owned by that Stockholder as have an aggregate fair market value
that most nearly approximates, but does not exceed, the amount of that
obligation, provided that each of the following conditions is satisfied:
(i) USC shall receive good, valid and marketable title to all
the shares so transferred free of all Liens;
(ii) that Stockholder shall have made such representations and
warranties as to the title to the shares so transferred and the absence
of Liens thereon as USC shall have reasonably requested;
(iii) the certificate or certificates representing USC Common
Stock delivered by that Stockholder in satisfaction of his obligation
shall be duly endorsed in blank, or shall be accompanied by stock
powers in blank duly executed, by that Stockholder and shall have all
necessary transfer tax and other revenue stamps, acquired at that
Stockholder's expense, affixed and cancelled; and
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(iv) the other terms and conditions of that transfer,
including any accounting, legal or tax consequences, shall be
reasonably satisfactory to USC.
For purposes of this Section 7.04(f), the fair market value of a share of USC
Common Stock will be the IPO Price (as adjusted, as appropriate, to give effect
to each of the following effected after the IPO Closing Date: any subdivision or
combination of outstanding shares of USC Common Stock, declaration by USC of a
dividend payable in shares of USC Common Stock or capital reorganization or
reclassification or other transaction involving an increase or reduction in the
number of outstanding shares of USC Common Stock).
Section e. Remedies Not Exclusive. The remedies this
Agreement provides will not be exclusive of any other
rights or remedies available to one party against any
other party, either at law or in equity.
Section f. Limitations on Indemnification. (a)
Notwithstanding the provisions of Section 7.02(a), no
Stockholder will be required to indemnify or hold
harmless any of the USC Indemnified Parties on
account of any USC Indemnified Loss under Section
7.02(a) unless the liability of the Company and the
Stockholders in respect of that USC Indemnified Loss,
when aggregated with the liability of all
Stockholders in respect of the sum of (i) all USC
Unindemnified Losses and (ii) all USC Indemnified
Losses under Section 7.02(a), exceeds, and only to
the extent the aggregate amount of all those USC
Unindemnified Losses and USC Indemnified Losses does
exceed, the Threshold Amount. In no event will (i)
the aggregate joint and several liability of the
Stockholders under this Agreement, including Section
7.02(a), exceed the Ceiling Amount or (ii) the
aggregate liability of each Stockholder under this
Agreement, including Sections 7.02(a) and 7.02(b), at
any time exceed the amount by which (A) that
Stockholder's Pro Rata Share of the Ceiling Amount
exceeds (B) that Stockholder's Accrued Tax Liability
at that time. "Accrued Tax Liability" means, with
respect to any Stockholder at any time, the total
federal income tax liability of that Stockholder
which is attributable to the capital gain income that
Stockholder previously has recognized, or will
recognize in the taxable period including that time,
in respect of the Acquisition Consideration that
Stockholder has received pursuant to Paragraph 2 and
Section 6.07; provided, that the capital gain
attributable to any taxable disposition of any share
of USC Common Stock which that Acquisition
Consideration includes will be determined for
purposes of this
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definition as if that Stockholder had sold that share
at the IPO Price (as adjusted, as appropriate, to
give effect to each of the following effected after
the IPO Closing Date: any subdivision or combination
of outstanding shares of USC Common Stock,
declaration by USC of a dividend payable in shares of
USC Common Stock or capital reorganization or
reclassification of outstanding shares of USC Common
Stock). For purposes of determining the amount any
USC Indemnified Loss, the gross amount thereof will
be reduced by (i) any correlative Tax benefit the
applicable USC Indemnified Party actually realizes in
the Tax year in which that determination is made, as
reflected in any Return that USC Indemnified Party
files with respect to that year, and (ii) any
correlative insurance proceeds the applicable USC
Indemnified Party actually receives, net of any
insurance premium (or increase in premium) that
becomes due as a result of the claim that results in
the payment of those proceeds.
(b) Notwithstanding the provisions of Section 7.03, USC will
not be required to indemnify or hold harmless any of the Stockholder Indemnified
Parties on account of any Stockholder Indemnified Loss unless the liability of
USC in respect of that Stockholder Indemnified Loss, when aggregated with the
liability of USC in respect of the sum of (i) all Stockholder Unindemnified
Losses and (ii) all Stockholder Indemnified Losses, exceeds, and only to the
extent the aggregate amount of all those Stockholder Unindemnified Losses and
Stockholder Indemnified Losses does exceed, the Threshold Amount. In no event
will USC be liable under this Agreement, including Section 7.03, for any amount
in excess of the Ceiling Amount. For purposes of determining the amount any
Stockholder Indemnified Loss, the gross amount thereof will be reduced by (i)
any correlative Tax benefit the applicable Stockholder Indemnified Party
actually realizes in the Tax year in which that determination is made, as
reflected in any Return that Stockholder Indemnified Party files with respect to
that year, and (ii) any correlative insurance proceeds the applicable
Stockholder Indemnified Party actually receives, net of any insurance premium
(or increase in premium) that becomes due as a result of the claim that results
in the payment of those proceeds.
ARTICLE 8.
LIMITATIONS ON COMPETITION
Section a. Prohibited Activities. Each Stockholder
agrees, severally and not jointly with any other
Person, that he will not, during the period beginning
on the date hereof and ending on the fifth
anniversary of the IPO Closing Date,
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directly or indirectly, for any reason, for his own
account or on behalf of or together with any other
Person:
(i) engage as an officer, director or in any other managerial
capacity or as an owner, co-owner or other investor of or in, whether
as an employee, independent contractor, consultant or advisor, or as a
sales representative, dealer or distributor of any kind, in any
business selling any products or providing any services in competition
with the Acquired Business, USC or any Subsidiary of USC (all these
entities collectively being "USC" for purposes of this Article VIII)
within any Territory surrounding any plant or other operating facility
in which the Acquired Business was engaged in business on the date
hereof or immediately prior to the Effective Date (for purposes of this
Article VIII, the "Territory" surrounding any plant or other operating
facility will be: (A) the city, town or village in which that plant or
facility is located, (B) the county or parish in which that plant or
facility is located, (C) the counties or parishes contiguous to the
county or parish in which that plant or facility is located, (D) the
area located within 50 miles of that plant or facility, (E) the area
located within 100 miles of that plant or facility and (F) the area in
which that plant or facility regularly provides products or services at
the locations of its customers);
(ii) call on or otherwise solicit any natural person who is at
that time employed by USC in any managerial capacity with the purpose
or intent of attracting that person from the employ of USC;
(iii) call on, solicit or perform services for, either
directly or indirectly, any Person that at that time is, or at any time
within two years prior to that time was, a customer of USC within any
Territory, (A) for the purpose of soliciting or selling any product or
service in competition with USC within that Territory and (B) with the
knowledge of that customer relationship; or
(iv) call on or otherwise solicit any USC Acquisition
Candidate, with the knowledge of that Entity's status as a USC
Acquisition Candidate, for the purpose of acquiring that Entity or
arranging the acquisition of that Entity by any Person other than USC.
Notwithstanding the foregoing, any Stockholder may own and hold as a passive
investment up to 5% of the outstanding capital stock of a competing Entity if
that class of capital stock is listed on a national stock exchange or included
in the Nasdaq National Market.
Section b. Damages. Because of (i) the difficulty of
measuring economic losses to USC as a result of any
breach by a Stockholder of his covenants in Section
8.01 and (ii) the immediate and irreparable damage
that could be caused to USC for which it would have
no other adequate remedy, each Stockholder agrees
that USC may enforce the provisions of
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Section 8.01 by injunctions and restraining orders
against that Stockholder if he breaches any of those
provisions.
Section c. Reasonable Restraint. The parties hereto
each agree that Sections 8.01 and 8.02 impose a
reasonable restraint on the Stockholders in light of
the activities and business of USC on the date
hereof, the current business plans of USC and the
investment by each Stockholder in USC as a result of
the Acquisition.
Section d. Severability; Reformation. The covenants in
this Article VIII are severable and separate, and the
unenforceability of any specific covenant in this
Article VIII is not intended by any party hereto to,
and will not, affect the provisions of any other
covenant in this Article VIII. If any court of
competent jurisdiction determines that the scope,
time or territorial restrictions Section 8.01 sets
forth are unreasonable as applied to any Stockholder,
the parties hereto, including that Stockholder,
acknowledge their mutual intention and agreement that
those restrictions be enforced to the fullest extent
the court deems reasonable, and thereby will be
reformed to that extent as applied to that
Stockholder and any other Stockholder similarly
situated.
Section e. Independent Covenant. All the covenants in
this Article VIII are intended by each party hereto
to, and will, be construed as an agreement
independent of any other provision in this Agreement,
and the existence of any claim or cause of action of
any Stockholder against USC, whether predicated on
this Agreement or otherwise, will not constitute a
defense to the enforcement by USC of any covenant in
this Article VIII. It is specifically agreed that the
time period Section 8.01 specifies will be computed
in the case of each Stockholder by excluding from
that computation any time during which that
Stockholder is in violation of any provision of
Section 8.01. The covenants this Article VIII
contains will not be affected by any breach of any
other provision hereof by any party hereto.
Section f. Materiality. The Company and each
Stockholder, severally and not jointly with any other
Person, hereby agree that this Article VIII is a
material and substantial part of the transactions
this Agreement contemplates.
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ARTICLE 9.
ADDITIONAL DEFINITIONS AND DEFINITIONAL PROVISIONS
Section a. Defined Terms. The following terms this
Agreement uses have the meanings this Section 9.01
assigns to them.
"AA Account Balance" means as of any date, if the Company is
subject to the pass-through tax provisions of subchapter S of the Code
for any period ending on or immediately prior to that date, the amount
then recorded in the accumulated adjustments account of the Company in
accordance with the applicable provisions of the Code.
"Acquired Business" has the meaning Paragraph 1 specifies.
"Acquisition" has the meaning Paragraph 1 specifies.
"Acquisition Consideration" has the meaning Paragraph 2
specifies.
"Acquisition Proposal" has the meaning Section 4.04 specifies.
"Adjustment Determination Date" has the meaning Section 6.07
specifies.
"Affiliate" means, as to any specified Person, any other
Person that, directly or indirectly through one or more intermediaries
or otherwise, controls, is controlled by or is under common control
with the specified Person. As used in this definition, "control" means
the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person (whether
through ownership of Capital Stock of that Person, by contract or
otherwise).
"Agreement" means this Agreement, including all attached
Schedules, Annexes, Addenda and Exhibits, as each of the same may be
amended, modified or supplemented from time to time pursuant to the
provisions hereof or thereof.
"Capital Stock" means, with respect to: (i) any corporation,
any share, or any depositary receipt or other certificate representing
any share, of an equity ownership interest in that corporation; and
(ii) any other Entity, any share, membership or other percentage
interest, unit of participation or other equivalent (however
designated) of an equity interest in that Entity.
"Cash Compensation" means, as applied to any employee,
nonemployee director or officer of, or any natural person who performs
consulting or other independent contractor services for, the Company or
any Company Subsidiary, the wages, salaries, bonuses (discretionary and
formula), fees and other cash compensation paid or payable by the
Company and each Company Subsidiary to that employee or other natural
person.
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"Ceiling Amount" has the meaning Paragraph 1 specifies.
"Certificate of Merger" means, if USC effects the Acquisition
by means of a Merger, (i) the articles or certificate of merger
respecting that Merger which contains the information required by the
laws of Surviving Corporation's Organization State to effect that
Merger and, if the Organization State of any Entity merged into the
Surviving Corporation in that Merger is not the Organization State of
the Surviving Corporation, (ii) the articles or certificate of merger
respecting that Merger which contains the information required by the
laws of that merged Entity's Organization State to effect that Merger.
"CERCLA" means the Comprehensive Environmental Response,
Conservation, and Liability Act of 1980.
"Charter Documents" means, with respect to any Entity at any
time, in each case as amended, modified and supplemented at that time,
(i) the articles or certificate of formation, incorporation or
organization (or the equivalent organizational documents) of that
Entity, (ii) the bylaws or limited liability company agreement or
regulations (or the equivalent governing documents) of that Entity and
(iii) each document setting forth the designation, amount and relative
rights, limitations and preferences of any class or series of that
Entity's Capital Stock or of any rights in respect of that Entity's
Capital Stock.
"Claim Notice" has the meaning Section 7.04 specifies.
"Closing" has the meaning Paragraph 3 specifies.
"Closing Date" has the meaning Paragraph 1 specifies.
"Closing Memorandum" means the closing memorandum attached as
an Exhibit to this Agreement.
"Code" means the Internal Revenue Code of 1986.
"Company" has the meaning Paragraph 1 specifies.
"Company Capital Stock" has the meaning Paragraph 1 specifies.
"Combined Companies" has the meaning Paragraph 1 specifies.
"Company Commitment" has the meaning Section 2.23 specifies.
"Company ERISA Benefit Plan" has the meaning Section 2.27
specifies.
"Company ERISA Pension Plan" has the meaning Section 2.27
specifies.
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"Company Subsidiary" means at any time any Entity that is a
Subsidiary of the Company at that time.
"Confidential Information" means, with respect to any Person,
all trade secrets and other confidential, nonpublic and/or proprietary
information of that Person, including information derived from reports,
investigations, research, work in progress, codes, marketing and sales
programs, capital expenditure projects, cost summaries, pricing
formulae, contract analyses, financial information, projections,
confidential filings with any Governmental Authority and all other
confidential, nonpublic concepts, methods of doing business, ideas,
materials or information prepared or performed for, by or on behalf of
that Person.
"Current Balance Sheet" has the meaning Paragraph 1 specifies.
"Current Balance Sheet Date" has the meaning Paragraph 1
specifies.
"Current Balance Sheet Date Working Capital" has the meaning
Paragraph 1 specifies.
"Current Date" means any day during the 20-day period ending
on the Closing Date.
"Damage" to any specified Person means, except as Section
6.06(c) otherwise provides, any cost, damage (including any
consequential, exemplary, punitive or treble damage) or expense
(including reasonable fees and actual disbursements by attorneys,
consultants, experts or other Representatives and Litigation costs) to,
any fine of or penalty on or any liability (including loss of earnings
or profits) of any other nature of that Person.
"Damage Claim" means, as asserted (i) against any specified
Person, any claim, demand or Litigation made or pending against the
specified Person for Damages to any other Person, or (ii) by the
specified Person, any claim or demand of the specified Person against
any other Person for Damages to the specified Person.
"DGCL" means the General Corporation Law of the State of
Delaware.
"Derivative Securities" of a specified Entity means any
Capital Stock, debt security or other Indebtedness of the specified
Entity or any other Person which is convertible into or exchangeable
for, or any option, warrant or other right to acquire, (i) any unissued
Capital Stock of the specified Entity or (ii) any Capital Stock of the
specified Entity which has been issued and is being held by the Entity
directly or indirectly as treasury Capital Stock.
"Effective Time" has the meaning Paragraph 2 specifies.
"Election Period" has the meaning Section 7.04 specifies.
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"Employee Policies and Procedures" means at any time all
employee manuals and all material policies, procedures and work-related
rules that apply at that time to any employee, nonemployee director or
officer of, or any other natural person performing consulting or other
independent contractor services for, the Company or any Company
Subsidiary.
"Employment Agreement" means at any time any (i) agreement to
which the Company or any Company Subsidiary is a party which then
relates to the direct or indirect employment or engagement, or arises
from the past employment or engagement, of any natural person by the
Company or any Company Subsidiary, whether as an employee, a
nonemployee officer or director, a consultant or other independent
contractor, a sales representative or a distributor of any kind,
including any employee leasing or service agreement and any
noncompetition agreement, and (ii) agreement between the Company or any
Company Subsidiary and any Person which arises from the sale of a
business by that Person to the Company or any Company Subsidiary and
limits that Person's competition with the Company or any Company
Subsidiary.
"Entity" means any sole proprietorship, corporation,
partnership of any kind having a separate legal status, limited
liability company, business trust, unincorporated organization or
association, mutual company, joint stock company or joint venture.
"Environmental Laws" means any and all Governmental
Requirements relating to the environment or public or worker health or
safety, including ambient air, surface water (including water
management and runoff), land surface or subsurface strata, or to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals or industrial, toxic or hazardous substances or
wastes (including Solid Wastes, Hazardous Wastes or Hazardous
Substances) or noxious noise or odor into the environment, or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, recycling, removal, transport or handling of
pollutants, contaminants, chemicals or industrial, toxic or hazardous
substances or wastes (including petroleum, petroleum distillates,
asbestos or asbestos-containing material, volatile organic compounds,
pesticides and polychlorinated biphenyls).
"ERISA" means the Employee Retirement Income Security Act of
1974.
"ERISA Affiliate" means, with respect to any specified Person
at any time, any other Person, including an Affiliate of the specified
Person, that is, or at any time within six years of that time was, a
member of any ERISA Group of which the specified Person is or was a
member at the same time.
"ERISA Affiliate Pension Plan" has the meaning Section 2.27
specifies.
"ERISA Employee Benefit Plan" means any "employee benefit
plan" as defined in Section 3(3) of ERISA and includes any ERISA
Pension Benefit Plan.
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"ERISA Group" means any "group of organizations" within the
meaning of Section 414(b), (c), (m) or (o) of the Code or any
"controlled group" as defined in Section 4001(a)(14) of ERISA.
"ERISA Pension Benefit Plan" means any "employee pension
benefit plan," as defined in Section 3(2) of ERISA, including any plan
that is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code (excluding any Multiemployer
Plan).
"Exchange Act" means the Securities Exchange Act of 1934.
"Final Balance Sheet" has the meaning Section 6.07 specifies.
"Final Prospectus" means the prospectus USC first furnishes to
the Underwriter after the Registration Statement becomes effective
under the Securities Act (whether or not Securities Act Rule 424(b)
requires USC to file that prospectus with the SEC).
"Final Working Capital" has the meaning Section 6.07
specifies.
"Financial Statements" means the Initial Financial Statements
and the other financial statements of the Acquired Business, if any,
delivered to USC pursuant to Section 4.09 prior to the Effective Time.
"Founding Company" has the meaning the Preliminary Statement
specifies.
"GAAP" means, as applied to any of the Financial Statements,
generally accepted accounting principles and practices in the United
States as in effect from time to time which (i) have been concurred in
by the Independent Accountants and (ii) have been or are applied on a
basis consistent (except for changes concurred in by the Independent
Accountants) with the most recent audited Financial Statements
delivered to USC prior to the Effective Time.
"Governmental Approval" means at any time any authorization,
consent, approval, permit, franchise, certificate, license,
implementing order or exemption of, or registration or filing with, any
Governmental Authority, including any certification or licensing of a
natural person to engage in a profession or trade or a specific
regulated activity, at that time.
"Governmental Authority" means (i) any national, state,
county, municipal or other government, domestic or foreign, or any
agency, board, bureau, commission, court, department or other
instrumentality of any such government, or (ii) any Person having the
authority under any applicable Governmental Requirement to assess and
collect Taxes for its own account.
"Governmental Requirement" means at any time (i) any law,
statute, code, ordinance, order, rule, regulation, judgment, decree,
injunction, writ, edict, award, authorization or other
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requirement of any Governmental Authority in effect at that time or
(ii) any obligation included in any certificate, certification,
franchise, permit or license issued by any Governmental Authority or
resulting from binding arbitration, including any requirement under
common law, at that time.
"Guaranty" means, for any specified Person, without
duplication, any liability, contingent or otherwise, of that Person
guaranteeing or otherwise becoming liable for any obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any liability of the specified Person, direct
or indirect, (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) that obligation or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of
that obligation, (ii) to purchase property, securities or services for
the purpose of assuring the owner of that obligation of its payment or
(iii) to maintain working capital, equity capital or other financial
statement condition or liquidity of the primary obligor so as to enable
the primary obligor to pay that obligation; provided, that the term
"Guaranty" does not include endorsements for collection or deposit in
the ordinary course of the endorser's business.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976.
"Immediate Family Member" of a Stockholder means at any time:
(i) if that Stockholder is a natural person, any child or grandchild
(by blood or legal adoption) or spouse of that Stockholder at that
time, or any child of that spouse; and (ii) if that Stockholder is an
Entity whose ultimate beneficial owner is a natural person, or a
natural person and his spouse, any child or grandchild (by blood or
legal adoption) or spouse at that time (if not then an ultimate
beneficial owner of that Entity), or any child of that spouse, of the
ultimate beneficial owner or owners.
"Indebtedness" of any Person means, without duplication, (i)
any liability of that Person (A) for borrowed money or arising out of
any extension of credit to or for the account of that Person (including
reimbursement or payment obligations with respect to surety bonds,
letters of credit, bankers' acceptances and similar instruments), for
the deferred purchase price of property or services or arising under
conditional sale or other title retention agreements, other than trade
payables arising in the ordinary course of business, (B) evidenced by
notes, bonds, debentures or similar instruments, (C) in respect of
leases (or other agreements conveying the right to use) property which
GAAP as in effect on the date of this Agreement requires to be
classified and accounted for as capital leases or (D) in respect of
interest rate swap, cap or collar agreements or similar arrangements
providing for the mitigation of that Person's interest rate risks
either generally or under specific contingencies between that Person
and any other Person, (ii) any liability secured by any Lien upon any
property or assets of that Person (or upon any revenues, income or
profits of that Person therefrom), whether or not that Person has
assumed that liability or otherwise become liable for the payment
thereof, (iii) any liability of others of the type described in the
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preceding clause (i) or (ii) in respect of which that Person has
incurred, assumed or acquired a liability by means of a Guaranty.
"Indemnified Party" has the meaning Section 7.04 specifies.
"Indemnifying Party" has the meaning Section 7.04 specifies.
"Indemnity Notice" has the meaning Section 7.04 specifies.
"Independent Accountants" means Arthur Andersen LLP.
"Industry" means the industry involving the production and
sale of ready-mixed concrete (including truck-mixed concrete) and other
cement mixtures and pre-cast concrete products and any logical
extension of or business activity reasonably related to any of the
foregoing.
"Industry Laws" means any and all Governmental Requirements
relating to the licensing or other regulation of the Industry,
including: the Clean Air Act, 42 USC ss.ss. 401-7671q; the Clean Water
Act, 33 USC ss.ss. 1251-1387; regulations of the Environmental
Protection Agency, 40 C.F.R. ss.ss. 82.150-82.166; and state statutes
governing licensure of facilities that operate in the Industry.
"Information" means written information, including (i) data,
certificates, reports and statements (excluding Financial Statements)
and (ii) summaries of unwritten agreements, arrangements, contracts,
plans, policies, programs or practices or of unwritten amendments or
modifications of, supplements to or waivers under any of the foregoing
documents.
"IPO" means the first time a registration statement USC has
filed under the Securities Act and respecting a primary underwritten
offering by USC to the public of shares of USC Common Stock becomes
effective under the Securities Act and USC issues and sells any of the
shares registered by that registration statement to the Underwriter.
"IPO Closing Date" means the date on which USC first receives
payment for the shares of USC Common Stock it sells to the Underwriter
in the IPO.
"IPO Price" means the price per share of USC Common Stock
which the cover page of the Final Prospectus sets forth as the "price
to public."
"IPO Pricing Date" means the date, if any, on which USC and
the Underwriter agree in the Underwriting Agreement to the price per
share of USC Common Stock at which the Underwriter, subject to the
terms and conditions of the Underwriting Agreement, will purchase newly
issued shares of USC Common Stock from USC on the IPO Closing Date.
"IRCA" means the Immigration Reform and Control Act of 1986.
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"IRS" means the Internal Revenue Service.
"Lien" means, with respect to any property or asset of any
Person (or any revenues, income or profits of that Person therefrom)
(in each case whether the same is consensual or nonconsensual or arises
by contract, operation of law, legal process or otherwise), (i) any
mortgage, lien, security interest, pledge, attachment, levy or other
charge or encumbrance of any kind thereupon or in respect thereof or
(ii) any other arrangement under which the same is transferred,
sequestered or otherwise identified with the intention of subjecting
the same to, or making the same available for, the payment or
performance of any liability in priority to the payment of the
ordinary, unsecured creditors of that Person, including any "adverse
claim" (as Section 8-302(b) of each applicable Uniform Commercial Code
defines that term) in the case of any Capital Stock. For purposes of
this Agreement, a Person will be deemed to own subject to a Lien any
asset that it has acquired or holds subject to the interest of a vendor
or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to that asset.
"Litigation" means any action, case, proceeding, claim,
grievance, suit or investigation or other proceeding conducted by or
pending before any Governmental Authority or any arbitration
proceeding.
"Material" means, as applied to any Entity or the Acquired
Business, material to the business, operations, property or assets,
liabilities, financial condition or results of operations of that
Entity and its Subsidiaries considered as a whole or the Acquired
Business, as the case may be.
"Material Adverse Effect" means, with respect to the
consequences of any fact or circumstance (including the occurrence or
non-occurrence of any event) to the Acquired Business, that such fact
or circumstance has caused, is causing or will cause, directly,
indirectly or consequentially, singly or in the aggregate with other
facts and circumstances, any Damages in excess of the Threshold Amount;
provided that the foregoing shall not include the consequences of any
fact or circumstance attributable to (i) factors affecting the Industry
generally, (ii) general national, regional or local economic or
financial conditions or (iii) changes in governmental or legislative
laws, rules or regulation.
"Material Agreement" of any Entity means any contract or
agreement (i) to which that Entity or any of its Subsidiaries is a
party, or by which that Entity or any of its Subsidiaries is bound or
to which any property or assets of that Entity or any of its
Subsidiaries is subject and (ii) which is Material to that Entity.
"Merger" has the meaning the Preliminary Statement specifies.
"Minimum Cash Amount" has the meaning Section 5.01 specifies.
"Minimum Cash Balance" has the meaning Paragraph 1 specifies.
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"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA, Section 414 of the Code or Section
3(37) of ERISA.
"Negative Net Adjustment" has the meaning Section 6.07
specifies.
"Organization State" means, as applied to (i) any corporation,
its state or other jurisdiction of incorporation, (ii) any limited
liability company or limited partnership, the state or other
jurisdiction under whose laws it is formed, organized and existing in
that legal form, and (iii) any other Entity, the state or other
jurisdiction whose laws govern that Entity's internal affairs.
"Other Agreements" has the meaning the Preliminary Statement
specifies.
"Other Compensation Plan" means any compensation arrangement,
plan, policy, practice or program established, maintained or sponsored
by the Company or any Company Subsidiary, or to which the Company or
any Company Subsidiary contributes, on behalf of any of its employees,
nonemployee directors or officers or other natural persons performing
consulting or other independent contractor services for the Company or
any Company Subsidiary, (i) including all such arrangements, plans,
policies, practices or programs providing for severance pay, deferred
compensation, incentive, bonus or performance awards or the actual or
phantom ownership of any Capital Stock or Derivative Securities of the
Company or any Company Subsidiary, but (ii) excluding all Company ERISA
Pension Plans and Employment Agreements.
"Other Financing Sources" has the meaning Section 5.01
specifies.
"Other Founding Company" has the meaning the Preliminary
Statement specifies.
"Other Transaction Documents" means the Other Agreements and
the other written agreements, documents, instruments and certificates
at any time executed pursuant to or in connection with the Other
Agreements (other than the Transaction Documents and the Underwriting
Agreement), all as amended, modified or supplemented from time to time.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Investments" means: (i) at the time of purchase or
other acquisition by the Company or any Company Subsidiary, (A)
obligations issued or guaranteed by the United States of America with a
remaining maturity not exceeding one year, (B) commercial paper with
maturities of not more than 270 days and a published rating of not less
than A-1 by S&P or P-1 by Moody's and (C) certificates of deposit and
bankers' acceptances having maturities of not more than one year of any
commercial bank or trust company if (1) that bank or trust company has
a combined capital and surplus of at least $500,000,000 and (2) its
unsecured
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long-term debt obligations, or those of a holding company of which it
is a subsidiary, are rated not less than A- by S&P or A3 by Moody's;
and (ii) other extensions of credit made by the Company or any Company
Subsidiary to its retail customers in the ordinary course of its
business and consistent with its past practices.
"Permitted Liens" means, as applied to the property or assets
of any Person (or any revenues, income or profits of that Person
therefrom): (i) Liens for Taxes if the same are not at the time due and
delinquent; (ii) Liens of carriers, warehousemen, mechanics, laborers
and materialmen for sums not yet due; (iii) Liens incurred in the
ordinary course of that Person's business in connection with worker's
compensation, unemployment insurance and other social security
legislation (other than pursuant to ERISA or Section 412(n) of the
Code); (iv) Liens incurred in the ordinary course of that Person's
business in connection with deposit accounts or to secure the
performance of bids, tenders, trade contracts, statutory obligations,
surety and appeal bonds, performance and return-of-money bonds and
other obligations of like nature; (v) easements, rights-of-way,
reservations, restrictions and other similar encumbrances incurred in
the ordinary course of that Person's business or existing on property
and not materially interfering with the ordinary conduct of that
Person's business or the use of that property; (vi) defects or
irregularities in that Person's title to its real properties which do
not materially (A) diminish the value of the surface estate or (B)
interfere with the ordinary conduct of that Person's business or the
use of any of such properties; (vii) any interest or title of a lessor
of assets that Person is leasing pursuant to any capital lease Schedule
2.18 lists or any lease that, pursuant to GAAP, would be accounted for
as an operating lease; and (viii) Liens securing purchase money
Indebtedness Schedule 2.17 or 2.18 lists, so long as those Liens do not
attach to any property or assets other than the properties or assets
purchased with the proceeds of that Indebtedness.
"Person" means any natural person, Entity, estate, trust,
union or employee organization or Governmental Authority or, for the
purpose of the definition of "ERISA Affiliate," any trade or business.
"Plan" has the meaning Section 2.28 specifies.
"Pre-Acquisition Claims" has the meaning Section 10.12
specifies.
"Positive Net Adjustment" has the meaning Section 6.07
specifies.
"Pre-Acquisition Matters" has the meaning Section 10.12
specifies.
"Private Placement Memorandum" means the Private Placement
Memorandum of USC dated March 20, 1999 and relating to the offer of USC
Common Stock in connection with the Acquisition.
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"Prohibited Transaction" means any transaction either Section
4975 of the Code or Section 406 of ERISA prohibits and neither Section
4975 of the Code nor Section 408 of ERISA exempts.
"Proprietary Rights" means (i) patents, applications for
patents and patent rights, (ii) in each case, whether registered,
unregistered or under pending registration, trademark rights, trade
names, trade name rights, corporate names, business names, trade styles
or dress, service marks and logos and other trade designations and
copyrights and, in the case of the Company or any Company Subsidiary,
(iii) all agreements relating to the technology, know-how or processes
used in any business of the Company or any Company Subsidiary.
"Pro Rata Share" has the meaning Paragraph 1 specifies.
"Qualified Plans" has the meaning Section 2.28 specifies.
"RCRA" means the Resource Conservation and Recovery Act of
1976.
"Registration Rights Agreement" means the registration rights
agreement to be executed and delivered at the Closing by USC and the
Stockholders electing to be parties thereto in the form thereof
attached as Exhibit 9.01, with the blanks appropriately filled.
"Registration Statement" means the registration statement,
including (i) each preliminary prospectus it contains prior to the date
on which it becomes effective under the Securities Act (including any
prospectus USC files with the SEC pursuant to Securities Act Rule
424(b)), (ii) the Final Prospectus and (iii) any amendments thereof and
all supplements and exhibits thereto, USC files with the SEC to
register shares of USC Common Stock under the Securities Act for public
offering and sale in the IPO.
"Related Party Agreement" means any contract or other
agreement, written or oral, (i) to which the Company or any Company
Subsidiary is a party or is bound or by which any property of the
Company or any Company Subsidiary is bound or may be subject and (ii)
(A) to which any Stockholder or any of that Stockholder's Related
Persons or Affiliates (other than any other Entity included in the
Acquired Business) also is a party, (B) of which any Stockholder or any
of that Stockholder's Related Persons or Affiliates (other than any
other Entity included in the Acquired Business) is a beneficiary or (C)
as to which any transaction contemplated thereby properly would be
characterized (without regard to the amount involved) as a related
party transaction for purposes of applying the disclosure requirements
of GAAP or the SEC applicable to the financial statements of the
Acquired Business which the Registration Statement includes.
"Related Person" of a Stockholder means: (i) if that
Stockholder is a natural person, (A) any Immediate Family Member of
that Stockholder, (B) any Estate of that Stockholder or any Immediate
Family Member of that Stockholder, (C) the trustee of any inter vivos
or testamentary trust of which all the beneficiaries are Related
Persons of that Stockholder and
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(D) any Entity the entire equity interest in which is owned by any one
or more of that Stockholder and Related Persons of that Stockholder;
and (ii) if that Stockholder is an Entity, Estate or trust, (A) any
Person who owns an equity interest in that Stockholder on the date
hereof, (B) any Person who would be a Related Person under clause (i)
of this definition of a natural person who is an ultimate beneficial
owner of that Stockholder or (C) any other Entity the entire equity
interest in which is owned by any one or more of that Stockholder and
Related Persons of that Stockholder. In this definition, "Estate"
means, as to any natural person who has died or been adjudicated
mentally incompetent by a court of competent jurisdiction, (i) that
person's estate or (ii) the administrator, conservator, executor,
guardian or representative of that estate.
"Reportable Event" means, with respect to any Company ERISA
Pension Plan, (i) the occurrence of any of the events set forth in
Section 4043(b) or (c) (other than a Reportable Event as to which the
provision of 30 days' notice to the PBGC is waived under applicable
regulations), 4062(e) or 4063(a) of ERISA with respect to that plan,
(ii) any event requiring the Company or any ERISA Affiliate to provide
security to that plan under Section 401(a)(29) of the Code or (iii) any
failure to make a payment Section 412(m) of the Code requires with
respect to that plan.
"Representatives" means, with respect to any Person, the
directors, officers, employees, Affiliates, accountants (including
independent certified public accountants), advisors, attorneys,
consultants or other agents of that Person, or any other
representatives of that Person or of any of those directors, officers,
employees, Affiliates, accountants (including independent certified
public accountants), advisors, attorneys, consultants or other agents.
"Restricted Payment" means, with respect to any Entity at any
time, any of the following that Entity effects: (i) any declaration or
payment of any dividend or other distribution, direct or indirect, on
account of any Capital Stock of that Entity or any Affiliate of that
Entity; (ii) any direct or indirect redemption, retirement, purchase or
other acquisition for value of, or any direct or indirect purchase,
payment or sinking fund or similar deposit for the redemption,
retirement, purchase or other acquisition for value of, or to obtain
the surrender of, any then outstanding Capital Stock of that Entity or
any Affiliate of that Entity or any then outstanding warrants, options
or other rights to acquire or subscribe for or purchase unissued or
treasury Capital Stock of that Entity or any Affiliate of that Entity;
or (iii) any payment or distribution of, or any commitment to pay or
distribute, any cash or other property if, for purposes of the Code,
that payment or distribution would (or reasonably could be expected to)
constitute a constructive dividend to any Stockholder.
"Restricted Period" has the meaning Section 10.14 specifies.
"Returns" of a Person means the returns, reports or statements
(including any information returns) any Governmental Requirement
requires that Person to file for purposes of any Tax.
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"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933.
"Solid Wastes, Hazardous Wastes or Hazardous Substances" have
the meanings ascribed to those terms in CERCLA, RCRA or any other
Environmental Law applicable to the business or operations of the
Company or any Company Subsidiary which imparts a broader meaning to
any of those terms than does CERCLA or RCRA.
"S&P" means Standard and Poor's Rating Services.
"Stockholder Indemnified Party" means (i) each Stockholder and
each of that Stockholder's Affiliates (other than the Company, any of
the other Combined Companies, if any, or any Subsidiary of any of the
Combined Companies, if any, or, following the Effective Time, the
Surviving Corporation or USC or any of its Subsidiaries, if the
Stockholder is an Affiliate of USC), agents and counsel and (ii) prior
to the Effective Time, the Company and each of its officers, directors,
employees, agents and counsel who are not Stockholder Indemnified
Parties within the meaning of clause (i) of this definition.
"Stockholder Indemnified Loss" has the meaning Section 7.03
specifies.
"Stockholder Unindemnified Loss" has the meaning Section 6.06
specifies.
"Subsidiary" of any specified Person at any time, means any
Entity a majority of the Capital Stock of which is at that time owned
or controlled, directly or indirectly, by the specified Person.
"Supplemental Information" has the meaning Section 4.07
specifies.
"Tax" or "Taxes" means all net or gross income, gross
receipts, net proceeds, sales, use, ad valorem, value added, franchise,
bank shares, withholding, payroll, employment, excise, property, deed,
stamp, alternative or add-on minimum, environmental or other taxes,
assessments, duties, fees, levies or other governmental charges or
assessments of any nature whatever imposed by any Governmental
Requirement, whether disputed or not, together with any interest,
penalties, additions to tax or additional amounts with respect thereto.
"Taxing Authority" means any Governmental Authority having or
purporting to exercise jurisdiction with respect to any Tax.
"Termination Date" has the meaning Paragraph 1 specifies.
"Termination Event" means, with respect to any Company ERISA
Pension Plan, (i) any Reportable Event with respect to that plan which
is likely to result in the termination of that plan, (ii) the
termination of, or the filing of a notice of intent to terminate, that
plan or
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the treatment of any amendment to that plan as a termination under
Section 4041(c) of ERISA or (iii) the institution of proceedings to
terminate, or the appointment of a trustee to administer, that plan
under Section 4042 of ERISA.
"Third Party Claim" means any claim asserted by any Person
that or who is not a party to this Agreement against any Indemnified
Party.
"Threshold Amount" means 1% of the Ceiling Amount.
"Transaction Document" means this Agreement, the Certificates
of Merger, the Registration Rights Agreement and the other written
agreements, documents, instruments and certificates executed pursuant
to or in connection with this Agreement (other than the Other
Transaction Documents and the Underwriting Agreement), including those
Article V specifies are to be delivered at or before the Closing, all
as amended, modified or supplemented from time to time.
"Transfer Taxes" has the meaning Section 10.05 specifies.
"Underwriter" means collectively (i) the investment banking
firms that prospectively may enter into the Underwriting Agreement and
(ii) from and after the IPO Pricing Date, the investment banking firms
parties to the Underwriting Agreement.
"Underwriting Agreement" has the meaning Section 5.01(a)(iii)
specifies.
"USC Acquisition Candidate" means any Entity (i) which the
Acquired Business or any Entity the Acquired Business includes or USC
has called on in connection with the possible acquisition by any of
them of that Entity or (ii) of which any of them has made an
acquisition analysis, in any case where such Entity is engaged in any
aspect of the Industry.
"USC Common Stock" means the common stock, par value $.001 per
share, of USC.
"USC Indemnified Loss" has the meaning Section 7.02 specifies.
"USC Indemnified Party" means USC and its Affiliates and each
of their respective officers, directors, employees, agents and counsel;
provided, however, that no Person who indemnifies USC Indemnified
Parties in this Agreement in his capacity as a Stockholder will be a
USC Indemnified Party for purposes of this Agreement, notwithstanding
that the Person is a USC Indemnified Party for purposes of one or more
of the Other Agreements.
"USC Sub Common Stock" has the meaning Paragraph 1 specifies.
"USC Unindemnified Loss" has the meaning Section 6.06
specifies.
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"Welfare Plan" means an "employee welfare benefit plan" as
defined in Section 3(1) of ERISA.
"Wholly Owned Subsidiary" means any corporation or other
Entity all of whose outstanding Capital Stock on a fully diluted basis
the Company owns and controls, directly or indirectly through another
Wholly Owned Subsidiary.
"Working Capital Adjustment" has the meaning Section 6.07
specifies.
Section b. Other Defined Terms. Words and terms these
Uniform Provisions use which are defined elsewhere in
this Agreement are used herein as therein defined.
Section c. Other Definitional Provisions. (a) Except as
this Agreement otherwise specifies, all references
herein to any Governmental Requirement defined or
referred to herein, including the Code, CERCLA,
ERISA, the Exchange Act, RCRA and the Securities Act,
are references to that Governmental Requirement or
any successor Governmental Requirement, as the same
may have been amended or supplemented from time to
time, and any rules or regulations promulgated
thereunder.
(b) This Agreement uses the words "herein," "hereof" and
"hereunder" and words of similar import to refer to this Agreement as a whole
and not to any provision of this Agreement, and the words "Article,"
"Paragraph," "Section," "Preliminary Statement," "Annex," "Addendum," "Schedule"
and "Exhibit" refer to Articles, Paragraphs and Sections of, the Preliminary
Statement in, and Annexes, Addenda, Schedules and Exhibits to, this Agreement
unless it otherwise specifies.
(c) Whenever the context so requires, the singular number
includes the plural and vice versa, and a reference to one gender includes the
other gender and the neuter.
(d) The word "including" (and, with correlative meaning, the
word "include") means including, without limiting the generality of any
description preceding such word, and the words "shall" and "will" are used
interchangeably and have the same meaning.
(e) The phrase "to the knowledge of the Company" or phrases
with similar wording, when used in this Agreement to qualify any representation
or warranty Article II contains, means the collective knowledge, after
reasonable investigation, of each Stockholder and each other Person who holds a
management position with the Company as of the date hereof; provided, however,
that if any Governmental Requirement referred to in any such representation or
warranty specifies a different meaning for that phrase, the meaning that
Governmental Requirement specifies will apply for purposes of that
representation and warranty.
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Section d. Captions. This Agreement includes captions
to Articles, Paragraphs, Sections and subsections of,
and Annexes, Addenda, Schedules and Exhibits to, this
Agreement or any other Transaction Document for
convenience of reference only, and these captions do
not constitute a part of this Agreement or any other
Transaction Document for any other purpose or in any
way affect the meaning or construction of any
provision of this Agreement or any other Transaction
Document.
ARTICLE 10.
GENERAL PROVISIONS
Section a. Treatment of Confidential Information. (a)
Each of the Company and the Stockholders, severally
and not jointly with any other Person, acknowledges
that it has or may have had in the past, currently
has and in the future may have access to Confidential
Information of the Company and the Company
Subsidiaries, the Other Founding Companies and their
Subsidiaries and USC and its Subsidiaries. Each of
the Company and the Stockholders, severally and not
jointly with any other Person, agrees that it will
keep confidential all that Confidential Information
furnished to it and, except with the specific prior
written consent of USC, will not disclose that
Confidential Information to any Person except (i)
Representatives of USC and (ii) its own
Representatives, provided that these Representatives
(other than counsel) agree to the confidentiality
provisions of this Section 10.01; provided, however,
that, for purpose of this Section 10.01(a),
Confidential Information does not include such
information as (i) becomes known to the public
generally through no fault of any Stockholder, (ii)
is required to be disclosed by law or the order of
any Governmental Authority under color of law,
provided, that prior to disclosing any information
pursuant to this clause (ii), each Stockholder will
give prior written notice thereof to USC and provide
USC with the opportunity to contest that disclosure,
or (iii) the disclosing party reasonably believes is
required to be disclosed in connection with the
defense of a lawsuit against the disclosing party. In
the event of a breach or threatened breach by any
Stockholder of the provisions of this Section 10.01
with respect to any Confidential Information, USC
will be entitled to an injunction restraining that
Stockholder from disclosing, in
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whole or in part, that Confidential Information.
Nothing herein shall be construed as prohibiting USC
from pursuing any other available remedy for such
breach or threatened breach, including the recovery
of damages.
(b) Because of (i) the difficulty of measuring economic losses
as a result of the breach of the foregoing covenants in Section 10.01(a) and
(ii) the immediate and irreparable damage that would be caused to USC for which
it would have no other adequate remedy, each of the Company and the Stockholders
agrees that USC may enforce the provisions of Section 10.01(a) by injunctions
and restraining orders against each of them who breaches any of those
provisions.
(c) USC acknowledges that it has or may have had in the past,
currently has and in the future may have access to Confidential Information of
the Company and the Company Subsidiaries. USC agrees that, until the Effective
Time, it will keep confidential all that Confidential Information furnished to
it and, except with the specific prior written consent of the Company, will not
disclose that Confidential Information to any Person prior to the Effective Time
except as Section 4.01(a) contemplates; provided, however, that, for purposes of
this Section 10.01(c), Confidential Information does not include such
information as (i) becomes known to the public generally through no fault of
USC, (ii) is required to be disclosed by law or the order of any Governmental
Authority under color of law, provided, that prior to disclosing any information
pursuant to this clause (ii), USC will, if possible, give prior written notice
thereof to the Company and provide the Company with the opportunity to contest
that disclosure, or (iii) USC reasonably believes is required to be disclosed in
connection with the defense of a lawsuit against it. In the event of a breach or
threatened breach by USC of the provisions of this Section 10.01 with respect to
any Confidential Information, the Company will be entitled to an injunction
restraining USC from disclosing, in whole or in part, that Confidential
Information. Nothing herein shall be construed as prohibiting the Company from
pursuing any other available remedy for such breach or threatened breach,
including the recovery of damages.
(d) Because of (i) the difficulty of measuring economic losses
as a result of the breach of the foregoing covenants in Section 10.01(c) and
(ii) the immediate and irreparable damage that would be caused to the Company
for which it would have no other adequate remedy, USC agrees that the Company
may enforce the provisions of Section 10.01(c) by injunctions and restraining
orders against it.
(e) The obligations of the parties under this Section 10.01
will survive the termination of this Agreement.
Section b. Brokers and Agents. Except as Schedule 1.04
sets forth, the Stockholders jointly and severally
represent and warrant to USC that the Company has not
directly or indirectly employed or become obligated
to pay any broker or similar agent in connection with
the transactions contemplated hereby and agree,
without regard to the
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Threshold Amount limitations Article VII sets forth,
to indemnify USC against all Damage Claims arising
out of claims for any and all fees and commissions of
brokers or similar agents employed or promised
payment by the Company.
Section c. Assignment; No Third Party Beneficiaries.
This Agreement and the rights of the parties
hereunder may not be assigned (except by operation of
law) and will be binding on and inure to the benefit
of the parties hereto, the successors of USC and the
heirs and legal representatives of the Stockholders
(and, in the case of any trust, the successor
trustees of that trust). Neither this Agreement nor
any other Transaction Document is intended, or shall
be construed, deemed or interpreted, to confer on any
Person not a party hereto or thereto any rights or
remedies hereunder or thereunder, except as the final
sentence of Section 1.05, Article VII and Section
10.12 provide or as otherwise provided expressly
herein or therein.
Section d. Entire Agreement; Amendment; Waivers. This
Agreement and the documents delivered pursuant hereto
constitute the entire agreement and understanding
among the Stockholders, the Company, USC Sub and USC
and supersede all prior agreements and
understandings, both written and oral, relating to
the subject matter of this Agreement. This Agreement
may be amended, modified or supplemented, and any
right hereunder may be waived, if, but only if, that
amendment, modification, supplement or waiver is in
writing and signed by the Stockholders entitled to
receive at least 80% of the total Acquisition
Consideration, the Company and USC; provided,
however, that no such amendment, modification,
supplement or waiver will be effective unless it is
signed by each Stockholder affected thereby to the
extent that it (i) changes the several nature of that
Stockholder's representations and warranties (to the
extent they are not already joint and several as
Article II and Section 10.02 provide), (ii) reduces
the amount, or changes the components, of the
Acquisition Consideration that Stockholder is
entitled to receive pursuant to Paragraph 2 or (iii)
amends or waives this sentence. The waiver of any of
the terms and conditions hereof shall not be
construed or interpreted as, or deemed to be, a
waiver of any other term or condition hereof.
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Section e. Expenses. Whether or not the transactions
contemplated hereby are consummated, (i) USC will pay
the fees, expenses and disbursements of USC and its
Subsidiaries and their Representatives in connection
with the subject matter of this Agreement and any
amendments thereto, including all costs and expenses
incurred in the performance of and compliance with
all conditions to be performed by USC and USC Sub
under this Agreement, and (ii) the Stockholders will
pay, from personal funds, and not from funds of the
Company or any Company Subsidiary, all sales, use,
transfer and other similar taxes (collectively,
"Transfer Taxes") and fees incurred in connection
with the transactions contemplated hereby, including
the fees, expenses and disbursements counsel for the
Company and the Stockholders incur in connection with
the subject matter of this Agreement; provided,
however, that the Stockholders may cause the Company
to pay the reasonable and customary fees, expenses
and disbursements of counsel for the Company and the
Stockholders incurred in connection with the subject
matter of this Agreement on or before the IPO Closing
Date to the extent those fees, expenses and
disbursements have been paid on or prior to the IPO
Closing Date or are recorded as liabilities on the
Final Balance Sheet. The Stockholders will file all
necessary documentation and Returns with respect to
all Transfer Taxes. In addition, each Stockholder
acknowledges that he, and not the Company or USC or
the Surviving Corporation, will pay all Taxes due on
receipt of the consideration payable to that
Stockholder pursuant to the transactions this
Agreement contemplates.
Section f. Notices. All notices required or permitted
hereunder must be in writing and will be deemed to be
delivered and received (i) if personally delivered or
if delivered by telex, telegram, facsimile or courier
service, when actually received by the party to whom
notice is sent or (ii) if delivered by mail (whether
actually received or not), at the close of business
on the third Houston, Texas business day next
following the day when placed in the mail, postage
prepaid, certified or registered, addressed to the
appropriate party or parties, at the address of such
party or parties set forth below (or at such other
address as such party may designate by written notice
to all other parties in accordance herewith):
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(i) if to USC or USC Sub, addressed to it at:
U.S. Concrete, Inc.
1360 Post Oak Boulevard, Suite 800
Houston, Texas 77056
Attn.: Chief Executive Officer
Facsimile: 713-350-6001
with copies (which will not constitute notice for purposes of this
Agreement) to:
Baker & Botts, L.L.P.
One Shell Plaza
Houston, Texas 77002-4995
Attn: Ted W. Paris, Esq.
Facsimile: 713-229-1522
(ii) if to the Company or any of the Stockholders, addressed
to that Person as Paragraph 7 sets forth.
Section g. Governing Law. This Agreement and the rights
and obligations of the parties hereto shall be
governed by and construed and enforced in accordance
with the substantive laws of the State of New York
without regard to the conflicts of law provisions
thereof.
Section h. Exercise of Rights and Remedies. Except as
otherwise provided herein, no delay or omission in
the exercise of any right, power or remedy accruing
to any party hereto as a result of any breach or
default hereunder by any other party hereto will
impair any such right, power or remedy, nor will it
be construed, deemed or interpreted as a waiver of or
acquiescence in any such breach or default, or of any
similar breach or default occurring later; nor will
any waiver of any single breach or default be
construed, deemed or interpreted as a waiver of any
other breach or default hereunder occurring before or
after that waiver.
Section i. Time. Time is of the essence in the
performance of this Agreement in all respects.
Section j. Reformation and Severability. If any
provision of this Agreement is invalid, illegal or
unenforceable, that provision will, to the extent
possible, be modified in such manner as to be valid,
legal and enforceable but so as to most nearly retain
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the intent of the parties hereto as expressed herein,
and if such a modification is not possible, that
provision will be severed from this Agreement, and in
either case the validity, legality and enforceability
of the remaining provisions of this Agreement will
not in any way be affected or impaired thereby.
Section k. Remedies Cumulative. No right, remedy or
election any term of this Agreement gives will be
deemed exclusive, but each will be cumulative with
all other rights, remedies and elections available at
law or in equity.
Section l. Release. Notwithstanding any other provision
of this Agreement and subject to the limitations the
last sentence of this Section 10.12 sets forth, each
Stockholder hereby unconditionally and irrevocably
releases and forever discharges, effective as of and
forever after the Effective Time, to the fullest
extent permitted by applicable law, all past, present
and future USC Indemnified Parties (including, after
the Effective Time, each of the Company and the
Company Subsidiaries which is a Subsidiary of USC
immediately after the Effective Time) (collectively,
the "Released Parties") from any and all debts,
liabilities, obligations, claims, demands, actions or
causes of action, suits, judgments or controversies
of any kind whatsoever (collectively,
"Pre-Acquisition Claims") against the Company and the
Company Subsidiaries, if any, or any of them that
arises out of or is based on any agreement or
understanding or act or failure to act (including any
act or failure to act that constitutes ordinary or
gross negligence or reckless or willful, wanton
misconduct), misrepresentation, omission,
transaction, fact, event or other matter occurring
prior to the Effective Time (whether based on any
Governmental Requirement or right of action, at law
or in equity or otherwise, foreseen or unforeseen,
matured or unmatured, known or unknown, accrued or
not accrued) (collectively, "Pre-Acquisition
Matters"), including without limitation: (i) claims
by the Stockholder with respect to repayment of loans
or indebtedness (except for promissory notes taken by
the Stockholder with respect to the payment of the
1998 Restricted Payment Amount or the 1999 Restricted
Payment Amount); (ii) any rights, titles and
interests in, to or under any agreements,
arrangements or understandings to which the
Stockholder is a party; and (iii) claims by the
Stockholder
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with respect to dividends, violation of preemptive
rights, or payment of salaries or other compensation
or in any way arising out of or in connection with
the Stockholder's employment with the Company or any
Company Subsidiary, the cessation of that employment,
the Stockholder's status as an officer, director or
stockholder of the Company or otherwise (but
excluding any and all claims in respect of (A)
accrued and unpaid amounts owing to the Stockholder
pursuant to each Employment Agreement Schedule 2.27
lists to which the Stockholder is a party, (B)
accrued and unpaid Cash Compensation owing to the
Stockholder at the rates or in the amounts, as the
case may be, set forth in the list Section 2.27
describes, (C) benefits accrued under each Company
ERISA Benefit Plan or Other Compensation Plan, the
existence of which Schedule 2.27 discloses and (D)
amounts or other obligations owing to the
Stockholder, directly or indirectly, pursuant to each
Related Party Agreement, if any, which Schedule 2.12
discloses and to which the Stockholder, directly or
indirectly, is a party). The Stockholder further
agrees not to file or bring any Litigation before any
Governmental Authority on the basis of or respecting
any Pre-Acquisition Claim concerning any
Pre-Acquisition Matter against any Released Party.
Each Stockholder (i) acknowledges that he or she
fully comprehends and understands all the terms of
this Section 10.12 and their legal effects and (ii)
expressly represents and warrants that (A) he or she
is competent to effect the release made in this
Section 10.12 knowingly and voluntarily and without
reliance on any statement or representation of any
Released Party or its Representatives and (B) he or
she had the opportunity to consult with an attorney
of his or her choice regarding this Section 10.12.
This Section 10.12 will not affect the rights of the
Stockholders under this Agreement or any other
Transaction Document.
Section m. Respecting the IPO. Each of the Company and
the Stockholders acknowledges and agrees that: (i) no
firm commitment, binding agreement or promise or
other assurance of any kind, whether express or
implied, oral or written, exists at the date hereof
that the Registration Statement will become effective
or that the IPO will occur at a particular price or
within a particular range of prices or occur at all;
(ii) neither USC or any of its Representatives nor
any prospective underwriters in the IPO will have any
liability
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to the Company, the Stockholders or any of their
respective Affiliates or associates for any failure
of (A) the Registration Statement to become effective
(provided, however, that USC will use its reasonable
best efforts to cause the Registration Statement to
become effective prior to the Termination Date) or
(B) the IPO to occur at a particular price or within
a particular range of prices or to occur at all; and
(iii) the decision of Stockholders to enter into this
Agreement, or to vote in favor of or consent to the
Merger, has been or will be made independent of, and
without reliance on, any statements, opinions or
other communications of, or due diligence
investigations that have been or will be made or
performed by, any prospective underwriter relative to
USC or the IPO. The Underwriter will have no
obligation to any of the Company and the Stockholders
with respect to any disclosure contained in the
Registration Statement. Each Stockholder further
agrees to execute and deliver to the investment
banking firm acting as the lead managing underwriter
for the IPO (if requested by that firm) a customary
lockup agreement pursuant to which that Stockholder
will agree not to sell, transfer or otherwise dispose
of any shares of USC Common Stock during a period of
time, not to exceed 180 days, following the date of
the Final Prospectus.
Section n. Restrictions on Transfer of USC Common
Stock. (a) During the one-year period ending on the
first anniversary of the Closing Date (the
"Restricted Period"), no Stockholder voluntarily
will: (i) sell, assign, exchange, transfer, encumber,
pledge, distribute, appoint or otherwise dispose of
(A) any shares of USC Common Stock received by any
Stockholder in the Merger or (B) any interest in
(including any option to buy or sell) any of those
shares of USC Common Stock, in whole or in part, and
USC will have no obligation to, and will not, treat
any such attempted transfer as effective for any
purpose; or (ii) engage in any transaction, whether
or not with respect to any shares of USC Common Stock
or any interest therein, the intent or effect of
which is to reduce the risk of owning the shares of
USC Common Stock acquired pursuant to Paragraph 2
(including, for example engaging in put, call,
short-sale, straddle or similar market transactions);
provided, however, that this Section 10.14 will not
restrict any transfer of USC Common Stock acquired by
a Stockholder pursuant to Paragraph 2 to any of that
Stockholder's Related Persons who agree in
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writing to be bound by the provisions of Section
10.01 and this Section 10.14. The certificates
evidencing the USC Common Stock delivered to each
Stockholder pursuant to Paragraph 2 will bear a
legend substantially in the form set forth below and
containing such other information as USC may deem
necessary or appropriate:
Except pursuant to the terms of the Agreement and Plan of
Reorganization among the issuer, the holder of this certificate and the
other parties thereto, the shares represented by this certificate may
not be voluntarily sold, assigned, exchanged, transferred, encumbered,
pledged, distributed, appointed or otherwise disposed of, and the
issuer will not be required to give effect to any attempted voluntary
sale, assignment, exchange, transfer, encumbrance, pledge,
distribution, appointment or other disposition of any of those shares,
during the one-year period ending on ____________, 2000 [date that is
the first anniversary of the IPO Closing Date]. On the written request
of the holder of this certificate, the issuer agrees to remove this
restrictive legend (and any stop order placed with the transfer agent)
after the expiration of the periods specified above.
(b) Each Stockholder, severally and not jointly with any other
Person, (i) acknowledges that the shares of USC Common Stock to be delivered to
that Stockholder pursuant to Paragraph 2 (A) have not been and, except pursuant
to the Registration Rights Agreement, if applicable, will not be registered
under the Securities Act and therefore may not be resold by that Stockholder
without compliance with the Securities Act and (B) will, as a result of the
restrictions on their transferability which this Agreement imposes during the
Restricted Period, have a value materially less on the IPO Closing Date than
would be the value of freely tradable shares of USC Common Stock and (ii)
covenants that none of the shares of USC Common Stock issued to that Stockholder
pursuant to Paragraph 2 will be offered, sold, assigned, pledged, hypothecated,
transferred or otherwise disposed of except after full compliance with all the
applicable provisions of the Securities Act and the rules and regulations of the
SEC and applicable state securities laws and regulations. All certificates
evidencing shares of USC Common Stock issued pursuant to Paragraph 2 will bear
the following legend in addition to the legend Section 10.14(a) prescribes:
The shares represented hereby have not been registered under the
Securities Act of 1933 and may only be sold or otherwise transferred if
the holder hereof complies with that law and other applicable
securities laws.
In addition, certificates evidencing shares of USC Common Stock issued pursuant
to Paragraph 2 to each Stockholder will bear any legend required by the
securities or blue sky laws of the state in which that Stockholder resides.
Section o. Subdivisions and Recombinations of USC
Common Stock. Upon the occurrence of an event prior
to the IPO
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Closing Date by which (i) the USC Common Stock is
subdivided into a greater number of shares or (ii)
combined into a smaller number of shares prior to the
IPO Closing Date, the number of shares set forth in
Schedule 2(D) shall be adjusted by either (a)
increasing the number of shares set forth on Schedule
2(D) in proportion to the subdivision of the shares
or (b) decreasing the number of shares set forth on
Schedule 2(D) in proportion to any combination of
such shares.
ARTICLE 11.
TERMINATION
Section a. Termination of This Agreement. (a) This
Agreement may be terminated at any time prior to the
Closing solely:
(i) by the mutual written consent of USC and the Company;
(ii) by the Stockholders or the Company, on the one hand, or
by USC, on the other hand, if the transactions contemplated by this
Agreement to take place at the Closing shall not have been consummated
by the Termination Date, unless the failure of such transactions to be
consummated results from the willful failure of the party (or in the
case of the Stockholders and the Company, any of them) seeking to
terminate this Agreement to perform or adhere to any agreement required
hereby to be performed or adhered to by it prior to or at the Closing
or thereafter on the IPO Closing Date;
(iii) by the Stockholders or the Company, on the one hand, or
by USC, on the other hand, if a material breach or default is made by
the other party (or in the case of the Stockholders and the Company,
any of them) in the observance or in the due and timely performance of
any of the covenants, agreements or conditions contained herein;
(iv) by USC if Section 4.07 entitles it to do so; or
(v) by the Stockholders or the Company if any Other Agreement
with an Other Founding Company whose revenues for the year ended
December 31, 1998 exceeded 20% of the pro forma combined revenues of
all the Founding Companies for the year ended December 31, 1998, in
each case as the Private Placement Memorandum reflects, has been
terminated pursuant to its terms.
(b) This Agreement may be terminated after the Closing solely:
(i) by USC or the Company if the Underwriting Agreement is
terminated pursuant to its terms after the Closing and prior to the
consummation of the IPO (in the event
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of any such termination, USC will provide the Company and the
Stockholders with prompt notice thereof); or
(ii) automatically and without action on the part of any party
hereto if the IPO is not consummated within 15 New York City business
days after the Closing Date.
Section b. Liabilities in the Event of Termination. If
this Agreement is terminated pursuant to Section
11.01, there shall be no liability or obligation on
the part of any party hereto except (i) as Section
10.05 provides and (ii) to the extent that such
liability is based on the breach by that party of any
of its representations, warranties or covenants set
forth in this Agreement.
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EXHIBIT B
AGREEMENT WITH RESPECT TO GROUP FILING
PURSUANT TO REGULATION 240.13d-1(k)(1)
THIS AGREEMENT is made as of this 3RD day of September, 1999, by and
among the undersigned parties.
WHEREAS, pursuant to Rules 13d-1 and 13d-2 of the Securities and
Exchange Commission (the "SEC"), under the Securities Exchange Act of 1934, as
amended (the "Act"), each of the undersigned parties is obligated to file with
the SEC, and from time to time to file with the SEC amendments to, a Schedule
13D relating to shares of the Common Stock, par value of $.001 per share of U.S.
Concrete, Inc., a Delaware corporation.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the parties hereto agree as follows:
The parties, from time to time, will file one statement containing the
information required by Schedule 13D on behalf of each of them in satisfaction
of the obligation of each of them under Rules 13d-1 and 13d-2 of the SEC. Each
party is responsible for the completeness and accuracy of only that information
relating to him or her or its respective executive officers and directors and
controlling persons, and is not responsible for the completeness or accuracy or
any information concerning any other party. The execution of any statement by
each party shall constitute a representation by such party that it neither knows
nor has reason to believe that any information concerning any other party
contained in such statement is inaccurate at the time of such execution.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the undersigned have signed this Agreement or
caused this Agreement to be executed by its duly authorized officers as of the
date first above written.
THOMAS AND MAUREEN ALBANESE
REVOCABLE TRUST AGREEMENT DATED
JANUARY 27, 1981, AS AMENDED
/s/ Thomas J. Albanese /s/ Thomas J. Albanese
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Thomas J. Albanese By: Thomas J. Albanese
Its: Co-Trustee
/s/ Maureen H. Albanese /s/ Maureen H. Albanese
- ---------------------------- --------------------------------
Maureen H. Albanese By: Maureen H. Albanese
Its: Co-Trustee
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