SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 3, 1995
DRAVO CORPORATION
(Exact name of registrant as specified in its charter)
Pennsylvania 1-5642 25-0447860
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
3600 One Oliver Plaza
Pittsburgh, PA 15222-2682
(Address of principal executive offices) (Zip Code)
(412) 566-3000
(Registrant's telephone number, including area code)
<PAGE> -1-
Item 2. Acquisition or Disposition of Assets.
On January 3, 1995, Dravo Corporation, a Pennsylvania corporation and the
registrant herein ("Dravo") caused to be sold to Martin Marietta Materials,
Inc., a North Carolina corporation ("Materials"), substantially all of the
assets of its construction aggregates business (the "Sale Transaction"). The
Sale Transaction was effected pursuant to an Asset Purchase Agreement (the
"Acquisition Agreement") dated as of January 3, 1995 among Dravo; Dravo Basic
Materials Company, Inc., an Alabama corporation and wholly owned subsidiary of
Dravo ("Dravo Basic"), and Atchafalaya Mining Company, Inc., a Louisiana
corporation and a wholly owned subsidiary of Dravo Basic ("Atchafalaya"), on
the one hand, and Materials, on the other hand. In the Sale Transaction,
Materials acquired substantially all of the assets, properties and leases
(collectively, the "Acquired Assets") used by Dravo Basic and Atchafalaya in
the production, marketing, distribution and sale of aggregates products,
including sand and gravel, crushed stone, shell, slag, ready mix concrete,
concrete block, industrial filler material, and poultry feed calcium
supplement and the capital stock of Dravo Bahama Rock Limited, a corporation
incorporated under the laws of the Commonwealth of the Bahamas and a wholly
owned subsidiary of Dravo Basic.
Dravo Basic's Ohio Valley operations, located in Cincinnati, Ohio; Pittsburgh,
Pennsylvania; Parkersburg, West Virginia; Cave In Rock, Illinois; and
Smithland, Kentucky, and Dravo Basic's Gulf Coast operations located in
Alabama, Florida, Louisiana and Georgia, were all included in the Acquired
Assets purchased by Materials. The Acquired Assets also included (i) Dravo
Basic's limestone mining operation in the Bahamas which was operated by Dravo
Bahama Rock Limited, and (ii)Atchafalaya's 50% joint venture interest in a
shell dredging operation operating in Louisiana's coastal waters.
Under the Acquisition Agreement, certain assets and properties of Dravo Basic
and Atchafalaya were excluded from the Sale Transaction, including all cash
and cash equivalent assets; the capital stock of Dravo Natural Resources
Company, a Delaware corporation which is 50% owned by each of Dravo Basic and
Dravo Lime Company, a Delaware corporation and a wholly owned subsidiary of
Dravo, through which Dravo conducts certain administrative functions; the
capital stock and assets of Tideland Industries, Inc., a Louisiana corporation
and wholly-owned subsidiary of Dravo Basic; and certain real property located
in Hamilton County, Ohio, and Beaver County, Pennsylvania. The Acquisition
Agreement also provides that Dravo, Dravo Basic and Atchafalaya will retain
substantially all of the obligations and liabilities which arose from or in
connection with Dravo Basic's and Atchafalaya's operations prior to the
closing of the Sale Transaction.
<PAGE> -2-
At the closing, Materials paid Dravo Corporation total consideration of $122
million in cash. Pursuant to the Acquisition Agreement, Materials paid Dravo
$114 million in cash (the "Initial Payment"), which represented the book value
of the Acquired Assets as shown on Dravo Basic's November 30, 1994 unaudited
consolidated balance sheet, plus a premium of Two Million Dollars ($2,000,000)
less the aggregate amount accrued on such balance sheet (i) for those certain
liabilities of Dravo Basic and Atchafalaya assumed by Materials pursuant to
the terms of the Agreement, and (ii) the liabilities and obligations of Dravo
Bahama Rock Limited. The Initial Payment is subject to final adjustment
based on the book value of the Acquired Assets as of December 31, 1994 plus a
premium of Two Million Dollars ($2,000,000), reduced by (i) certain
liabilities of Dravo Basic and Atchafalaya assumed by Materials pursuant to
the terms of the Agreement; (ii) the liabilities and obligations of Dravo
Bahama Rock Limited; and (iii) Dravo Basic and Atchafalaya's pro-rata share of
certain liabilities and charges accruing prior to the closing date and certain
expenses relating to the Sale Transaction (the "Closing Value"). The Closing
Value will be determined on the basis of a Closing Balance Sheet which will be
the consolidated balance sheet of Dravo Basic as of December 31, 1994. The
Closing Date Balance Sheet is to be prepared by Dravo Basic, audited by KPMG
Peat Marwick, and delivered to Materials within 45 days after January 3, 1995.
The Initial Payment was reduced by $3,000,000 in contemplation of possible
changes between the November 30, 1994 balance sheet and the Closing Balance
Sheet. If Materials disputes any of the items set forth on the Closing Date
Balance Sheet, the Agreement provides that, if the dispute cannot be resolved
by negotiations, then it will be resolved by a neutral accountant (Arthur
Andersen & Co.) or, in the case of disputes regarding the quantity or quality
of inventory, a jointly selected independent engineer.
At the Closing, Materials also paid Eight Million Dollars ($8,000,000) to
Dravo in consideration of (i) a Noncompetition and Nondisclosure Agreement
dated January 3, 1995 (the "Noncompetition Agreement") among Dravo, Dravo
Basic and Dravo Lime, on the one hand, and Materials, on the other hand, and
(ii) a Crushed Limestone Aggregates Distributorship Agreement (Longview Plant)
and a Crushed Limestone Aggregates Distributorship Agreement (Black River and
Maysville Plants), each dated January 3, 1995, by and between Dravo Lime and
Materials (collectively, the "Distributorship Agreements").
Prior to the consummation of the Sale Transaction, Materials offered
employment to substantially all of Dravo Basic's employees. Following the
closing, a limited number of remaining employees of Dravo Basic and certain
employees of Dravo Natural Resources Company, on an interim basis, will
collect for the benefit of Materials, the pre-closing accounts receivable of
Dravo Basic and Dravo Bahama Rock Limited and will provide certain accounting
<PAGE> -3-
and administrative services for certain entities sold by Dravo Basic to
Materials.
Under the Noncompetition Agreement, Dravo, Dravo Basic and Dravo Lime agree
that, with certain limited exceptions, through the eighth (8th) anniversary of
the Noncompetition Agreement, neither Dravo, Dravo Basic nor Dravo Lime will
directly or indirectly have an interest in or in any way assist any third
party in undertaking to engage within a specified territory (the "Restricted
Territory") in the quarrying, dredging, production, marketing, sale or
distribution of aggregate products for use in (i) construction of civil,
commercial or residential structures, pipelines or roads; (ii) production of
asphalt and ready mix concrete, concrete pipe or block or other similar
construction material; (iii) the construction of riverbanks, shores, jetties
and other similar uses; and the production of agricultural limestone for use
in soil neutralization applications for agricultural products (collectively,
the "Construction Aggregates Markets").
For purposes of the Noncompetition Agreement, the Restricted Territory can be
generally described as those counties in the states of Alabama, Arkansas,
Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maryland,
Mississippi, New York, Ohio, Pennsylvania, Tennessee, Texas and West Virginia
in which Dravo Basic previously operated its business.
Pursuant to the terms of the Distributorship Agreements, Dravo Lime appointed
Materials to be its exclusive distributor for aggregates products produced at
Dravo Lime's Longview, Alabama; Maysville, Kentucky; and Black River, Kentucky
quarries and mines for resale to the Construction Aggregates Markets. During
the term of each Distributorship Agreement, which run through December 31,
2002, Dravo Lime and Materials must annually mutually agree on annual tonnage
targets for the limestone aggregate which will be produced by Dravo Lime and
marketed by Materials in each year.
The foregoing summaries of the Acquisition Agreement and Noncompetition
Agreement are qualified in their entirety by reference to those agreements,
copies of which are filed as exhibits hereto.
Dravo applied the proceeds from the Sale Transaction primarily to reduce debt.
The total debt of Dravo, after retirement of construction financing for an
expansion project currently underway at Dravo Lime's Black River facility,
will be approximately $43 million.
Item 7. Financial Statements and Exhibits.
a. Financial Statements.
<PAGE> -4-
None.
b. Pro forma Financial Information.
Pro forma consolidated balance sheet at September 30, 1994
Pro forma consolidated statements of operations for twelve
months ended December 31, 1993 and nine month period ended
September 30, 1994
c. Exhibits.
2 Asset Purchase Agreement dated as of January 3, 1995
among Dravo Corporation, Dravo Basic Materials
Company, Inc., Atchafalaya Mining Company, Inc. and
Martin Marietta Materials, Inc.
10.1 Noncompetition and Nondisclosure Agreement dated
January 3, 1995 by and among Dravo Corporation,
Dravo Basic Materials Company, Inc., Dravo Lime
Company and Martin Marietta Materials, Inc.
99. Press Release of Dravo Corporation dated January 4,
1995
<PAGE> -5-
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DRAVO CORPORATION
Date: January 17, 1995 By:ERNEST F. LADD III
Name: Ernest F. Ladd III
Title: Executive Vice President
and Chief Financial Officer
<PAGE> -6-
DRAVO CORPORATION AND SUBSIDIARIES
Form 8-K, Item 7(b)
Pro Forma Financial Statements (Unaudited)
Effective December 31, 1994, Dravo Corporation caused to be sold to Martin
Marietta Materials, Inc. substantially all of the assets of its construction
aggregates business. Assets sold included the assets, properties and leases
used by Dravo Basic Materials Company, Inc. and its 100 percent owned
subsidiary, Atchafalaya Mining Company, Inc., in the production, marketing,
distribution and sale of various aggregate products. Also sold was the
capital stock of Dravo Bahama Rock Limited, a 100 percent owned subsidiary of
Dravo Basic Materials. Certain assets and properties were excluded from the
sale. Dravo, Dravo Basic Materials and Atchafalaya Mining retained
substantially all obligations and liabilities which arose from or in
connection with operations prior to the sale transaction.
Dravo received $122 million from the transaction, which is subject to
adjustment pending an audit of Dravo Basic Materials' December 31, 1994
consolidated balance sheet. Proceeds from the sale were used to reduce
current and long-term debt and an obligation recorded as a discontinued
operations liability. Approximately $28 million was invested in short-term
securities.
The pro forma balance sheet as of September 30, 1994 presents the financial
position of Dravo Corporation assuming the disposition had been completed as
of that date. The pro forma statements of operations for the year ended
December 31, 1993 and for the nine months ended September 30, 1994 present the
results of operations assuming that the disposition had been completed as of
the beginning of the respective periods. These statements include all
material adjustments necessary to restate the historical results to
accommodate these assumptions. This pro forma data is provided for
comparative purposes only and does not purport to be indicative of the results
which actually would have been obtained if the disposition had been effected
on the pro forma dates, or of the results which may be obtained in the future.
<PAGE> -7-
<TABLE>
DRAVO CORPORATION AND SUBSIDIARIES
Pro Forma Consolidated Balance Sheet
(Unaudited, $ in 000's)
SEPTEMBER 30, 1994
<CAPTION>
Dravo Pro Forma
Historical Adjustments Note Pro Forma
ASSETS
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 838 $ 32,842 1,2 $ 33,680
Accounts receivable, net 47,851 (28,659) 1 19,192
Notes receivable, net 2,690 -- 2,690
Inventories 50,955 (39,295) 1 11,660
Other current assets 6,509 (3,555) 1 2,954
Total current assets 108,843 (38,667) 70,176
Advances to and equity in joint ventures 4,070 (1,653) 1 2,417
Notes receivable 5,541 -- 5,541
Other assets 24,623 (3,926) 1 20,697
Deferred tax asset 24,853 -- 24,853
Property, plant and equipment 341,368 (156,484)1,3 184,884
Less: accumulated depreciation
and amortization 206,411 (106,560) 1 99,851
Net property, plant and equipment 134,957 (49,924) 85,033
Total assets $ 302,887 $ (94,170) $ 208,717
</TABLE>
See notes to pro forma financial statements.
<PAGE> -8-
<TABLE>
DRAVO CORPORATION AND SUBSIDIARIES
Pro Forma Consolidated Balance Sheet
(Unaudited, $ in 000's)
SEPTEMBER 30, 1994
<CAPTION>
Dravo Pro Forma
Historical Adjustments Note Pro Forma
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C> <C> <C>
Current liabilities:
Current portion of long-term notes $ 4,502 $ (4,265) 2 $ 237
Accounts payable - trade 35,640 (15,354) 2 20,286
Income taxes 508 286 2 794
Accrued insurance 3,209 -- 3,209
Accrued retirement contribution 6,838 -- 6,838
Net liabilities - discontinued operations1,913 -- 1,913
Accrued loss on leases - discontinued
operations 2,344 -- 2,344
Other current liabilities 7,940 (3,127) 1,2 4,813
Total current liabilities 62,894 (22,460) 40,434
Long-term notes 104,909 (62,347) 2 42,562
Net liabilities - discontinued operations 11,400 (4,135) 2 7,265
Other liabilities 5,439 -- 5,439
Accrued loss on leases - discontinued
operations 6,189 -- 6,189
Redeemable preference stock:
Par value $1, issued 200,000 shares:
Series D, $12.35 cumulative, convertible,
exchangeable (entitled in liquidation
to $20.0 million) 20,000 -- 20,000
Shareholders' equity:
Preference stock, par value $1,
authorized 1,878,870: Series B, $2.475
cumulative, convertible, issued 29,386
shares 29 -- 29
Series D reported above
Common stock, par value $1, authorized
35,000,000 shares; issued 14,982,623 14,983 -- 14,983
Other capital 63,290 -- 63,290
Retained earnings 15,594 (5,228) 3-6 10,366
Treasury stock at cost:
Common shares - 119,221 (1,840) -- (1,840)
Total shareholders' equity 92,056 (5,228) 86,828
Total liabilities and
shareholders' equity $ 302,887 $ (94,170) $ 208,717
</TABLE>
See notes to pro forma financial statements.
<PAGE> -9-
<TABLE>
DRAVO CORPORATION AND SUBSIDIARIES
Pro Forma Consolidated Statement of Operations
(Unaudited, $ in 000's, except per share data)
NINE MONTHS ENDED SEPTEMBER 30, 1994
<CAPTION>
Dravo Pro Forma
Historical Adjustments Note Pro Forma
<S> <C> <C> <C> <C>
Revenue $ 205,614 $ (111,883) 4 $ 93,731
Cost of revenue 172,725 (102,202) 4 70,523
Gross profit 32,889 (9,681) 23,208
Selling, general and
administrative expenses 22,195 (8,626) 4 13,569
Earnings from operations 10,694 (1,055) 9,639
Other income (expenses):
Equity in earnings of joint ventures 1,467 (482) 4 985
Other income 566 (367) 4 199
Interest income 568 758 4,6 1,326
Interest expense (7,118) 3,605 4,5 (3,513)
Net other expense (4,517) 3,514 (1,003)
Earnings before taxes 6,177 2,459 8,636
Income tax expense 432 177 4 609
Earnings from continuing
operations 5,745 2,282 8,027
Preference dividends 1,909 -- 1,909
Earnings from continuing operations
applicable to common shares $ 3,836 $ 2,282 $ 6,118
Earnings per share:
Continuing operations $ 0.26 $ 0.15 $ 0.41
Weighted average shares outstanding 14,932 14,932 14,932
</TABLE>
See notes to pro forma financial statements.
<PAGE> -10-
<TABLE>
DRAVO CORPORATION AND SUBSIDIARIES
Pro Forma Consolidated Statement of Operations
(unaudited, $ in 000's, except per share data)
TWELVE MONTHS ENDED DECEMBER 31, 1993
<CAPTION>
Dravo Pro Forma
Historical Adjustments Note Pro Forma
<S> <C> <C> <C> <C>
Revenue $ 277,590 $ (149,155) 4 $ 128,435
Cost of revenue 228,266 (135,279) 4 92,987
Gross profit 49,324 (13,876) 35,448
Selling, general and
administrative expenses 31,660 (13,101) 4 18,559
Earnings from operations 17,664 (775) 16,889
Other income (expense):
Equity in earnings (loss) of
joint ventures (18) 591 4 573
Other income 692 (692) 4 --
Interest income 1,327 972 4,6 2,299
Interest expense (9,194) 4,488 4,5 (4,706)
Net other expense (7,193) 5,359 (1,834)
Earnings before taxes 10,471 4,584 15,055
Income tax benefit (24,655) 541 4 (24,114)
Earnings from continuing operations 35,126 4,043 39,169
Preference dividends 2,554 -- 2,554
Earnings from continuing operations
applicable to common shares $ 32,572 $ 4,043 $ 36,615
Earnings per share:
Continuing operations $ 2.20 $ 0.27 $ 2.47
Weighted average shares outstanding 14,835 14,835 14,835
</TABLE>
See notes to pro forma financial statements.
<PAGE> -11-
DRAVO CORPORATION AND SUBSIDIARIES
Notes to Pro Forma Financial Statements
The pro forma balance sheet and statements of operations have been prepared to
reflect the disposition of the assets of Dravo Basic Materials, Inc. Proceeds
from the sale essentially equalled the disposed assets net book value plus
other costs associated with the transaction.
The pro forma balance sheet includes the following adjustments:
1) Proceeds received from the sale transaction and removal of assets
purchased.
2) Proceeds from the sale were used to reduce the following
obligations:
($ in 000's)
Current liabilities $ 22,460
Long-term notes:
Revolving credit line 43,400
Notes payable 18,947
Net liabilities - discontinued operations 4,135
3) Fees of $7.5 million associated with the long-term notes listed in
footnote (2) have been written off to retained earnings.
The pro forma statements of operations include the following adjustments:
4) Elimination of Dravo Basic Materials, Inc. results of operations.
5) Reduction of interest expense as a result of a $66.5 million
decrease in debt.
6) Additional interest income due to assumed investment of excess
cash.
<PAGE> -12-
EXHIBIT INDEX
Exhibit No. Description Page
2 Asset Purchase Agreement
dated as of January 3, 1995
among Dravo Corporation,
Dravo Basic Materials, Inc.,
Atchafalaya Mining Company,
Inc. and Martin Marietta
Materials, Inc. 1-87
10.1 Noncompetition and
Nondisclosure Agreement
dated January 3, 1995 by
and among Dravo Corporation,
Dravo Basic Materials Company,
Inc., Dravo Lime Company and
Martin Marietta Materials, Inc. 1-8
99 Press Release dated 1
January 4, 1995
<PAGE>
ASSET PURCHASE AGREEMENT
BY AND AMONG
MARTIN MARIETTA MATERIALS, INC.,
DRAVO CORPORATION,
DRAVO BASIC MATERIALS COMPANY, INC.
AND
ATCHAFALAYA MINING COMPANY, INC.
* * *
Dated as of January 3, 1995
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1 BACKGROUND AND PURPOSE; DEFINITIONS . . . . . . . . . . . . . . 1
1.1 Background and Purpose . . . . . . . . . . . . . . . . . . . . 1
1.2 General Definitions. . . . . . . . . . . . . . . . . . . . . . 1
1.3 Certain Rules of Construction. . . . . . . . . . . . . . . . . 3
(a) Including . . . . . . . . . . . . . . . . . . . . . . . . 3
(b) Ordinary Course of Business . . . . . . . . . . . . . . . 3
(c) Certain Obligations . . . . . . . . . . . . . . . . . . . 3
(d) Negotiated Agreement. . . . . . . . . . . . . . . . . . . 4
(e) Covenants, Representations and Warranties of Dravo. . . . 4
ARTICLE 2 PURCHASE AND SALE OF THE BUSINESS . . . . . . . . . . . . . . . 4
2.1 General. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 Purchased Assets . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Purchase Price and Initial Payment . . . . . . . . . . . . . . 7
(a) Amount of Purchase Price. . . . . . . . . . . . . . . . . 7
(b) Adjustment for Certain Liabilities. . . . . . . . . . . . 7
(c) Certain Prorations. . . . . . . . . . . . . . . . . . . . 7
(d) Initial Payment at Closing. . . . . . . . . . . . . . . . 8
2.4 Closing Value and Final Payment. . . . . . . . . . . . . . . . 8
(a) Closing Balance Sheet . . . . . . . . . . . . . . . . . . 8
(b) Determination of Closing Value. . . . . . . . . . . . . . 8
(c) Notice of Objection . . . . . . . . . . . . . . . . . . . 9
(d) Dispute Resolution. . . . . . . . . . . . . . . . . . . . 9
(e) Final Payment . . . . . . . . . . . . . . . . . . . . . . 10
(f) Payment Method. . . . . . . . . . . . . . . . . . . . . . 10
(g) Reimbursement . . . . . . . . . . . . . . . . . . . . . . 10
2.5 Allocation of Purchase Price . . . . . . . . . . . . . . . . . 11
2.6 Excluded Assets. . . . . . . . . . . . . . . . . . . . . . . . 11
2.7 Assumed Liabilities. . . . . . . . . . . . . . . . . . . . . . 11
(a) Land Reclamation. . . . . . . . . . . . . . . . . . . . . 11
(b) Contracts . . . . . . . . . . . . . . . . . . . . . . . . 12
(c) Accrued Vacation Pay. . . . . . . . . . . . . . . . . . . 13
(d) Guarantees. . . . . . . . . . . . . . . . . . . . . . . . 13
(e) Accrued Salary. . . . . . . . . . . . . . . . . . . . . . 13
2.8 Excluded Liabilities . . . . . . . . . . . . . . . . . . . . . 13
(a) Litigation. . . . . . . . . . . . . . . . . . . . . . . . 14
(b) Employee and Union Claims . . . . . . . . . . . . . . . . 14
(c) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(d) Product Claims. . . . . . . . . . . . . . . . . . . . . . 14
<PAGE> i
(e) Environmental Claims. . . . . . . . . . . . . . . . . . . 15
(f) Land Reclamation. . . . . . . . . . . . . . . . . . . . . 15
(g) General . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.9 Disclosed Liabilities and Excess Liabilities . . . . . . . . . 16
(a) Accrued Liabilities . . . . . . . . . . . . . . . . . . . 16
(b) Contract Liabilities. . . . . . . . . . . . . . . . . . . 16
(c) Land Reclamation. . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 3 THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.1 Generally. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(a) Place, Time and Date of Closing . . . . . . . . . . . . . 17
(b) When Closing Occurs . . . . . . . . . . . . . . . . . . . 17
3.2 Deliveries by Dravo and Sellers. . . . . . . . . . . . . . . . 17
(a) General Transfer Instruments. . . . . . . . . . . . . . . 17
(b) Assignments of Leases . . . . . . . . . . . . . . . . . . 18
(c) Motor Vehicle Title Certificates. . . . . . . . . . . . . 18
(d) Intellectual Property Assignments . . . . . . . . . . . . 18
(e) IRC Section 1445 Affidavit. . . . . . . . . . . . . . . . 18
(f) Stock Certificates. . . . . . . . . . . . . . . . . . . . 18
(g) Compliance Certificates . . . . . . . . . . . . . . . . . 18
(h) Certificates of Good Standing . . . . . . . . . . . . . . 18
(i) Legal Opinions. . . . . . . . . . . . . . . . . . . . . . 19
(j) Title Insurance . . . . . . . . . . . . . . . . . . . . . 19
(k) Surveys . . . . . . . . . . . . . . . . . . . . . . . . . 19
(l) Consents and Estoppel Certificates. . . . . . . . . . . . 19
(m) Noncompetition Agreement. . . . . . . . . . . . . . . . . 19
(n) Distributorship Agreements. . . . . . . . . . . . . . . . 19
(o) Transition Services Agreement . . . . . . . . . . . . . . 19
(p) Software License. . . . . . . . . . . . . . . . . . . . . 19
(q) Other . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.3 Deliveries by Buyer. . . . . . . . . . . . . . . . . . . . . . 20
(a) Initial Payment . . . . . . . . . . . . . . . . . . . . . 20
(b) Noncompetition Payment. . . . . . . . . . . . . . . . . . 20
(c) Assumption Instruments. . . . . . . . . . . . . . . . . . 20
(d) Assignments of Leases . . . . . . . . . . . . . . . . . . 20
(e) Compliance Certificates . . . . . . . . . . . . . . . . . 20
(f) Certificate of Good Standing. . . . . . . . . . . . . . . 20
(g) Legal Opinions. . . . . . . . . . . . . . . . . . . . . . 21
(h) Noncompetition Agreement. . . . . . . . . . . . . . . . . 21
(i) Distributorship Agreements. . . . . . . . . . . . . . . . 21
(j) Transition Services Agreement . . . . . . . . . . . . . . 21
(k) Software License. . . . . . . . . . . . . . . . . . . . . 21
(l) Other . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.4 Post-Closing Actions . . . . . . . . . . . . . . . . . . . . . 21
(a) Delivery of Possession. . . . . . . . . . . . . . . . . . 21
<PAGE> ii
(b) Employment Security Clearances. . . . . . . . . . . . . . 21
(c) Tax Clearances. . . . . . . . . . . . . . . . . . . . . . 21
(d) Closing Balance Sheet and Statement of Closing Value. . . 22
(e) Closing Date Aged Accounts Receivable Listing . . . . . . 22
3.5 Further Assurances . . . . . . . . . . . . . . . . . . . . . . 22
(a) General . . . . . . . . . . . . . . . . . . . . . . . . . 22
(b) Certain Other Matters . . . . . . . . . . . . . . . . . . 22
(c) Mail; Endorsements. . . . . . . . . . . . . . . . . . . . 22
3.6 Post-Closing Assistance. . . . . . . . . . . . . . . . . . . . 23
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF DRAVO AND
SELLERS AS TO THE BUSINESS . . . . . . . . . . . . . . . . . . 23
4.1 Organization and Standing of Dravo and Sellers . . . . . . . . 23
(a) Corporate Existence and Status. . . . . . . . . . . . . . 23
(b) Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . 24
(c) Qualification . . . . . . . . . . . . . . . . . . . . . . 24
(d) Ownership Interests . . . . . . . . . . . . . . . . . . . 24
(e) Authority . . . . . . . . . . . . . . . . . . . . . . . . 24
4.2 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.3 Enforceability . . . . . . . . . . . . . . . . . . . . . . . . 25
4.4 Liabilities and Liens. . . . . . . . . . . . . . . . . . . . . 25
4.5 Absence of Certain Changes . . . . . . . . . . . . . . . . . . 25
4.6 Financial Matters. . . . . . . . . . . . . . . . . . . . . . . 25
(a) Financial Statements. . . . . . . . . . . . . . . . . . . 25
(b) Sales of Products . . . . . . . . . . . . . . . . . . . . 26
(c) Capitalized Leases. . . . . . . . . . . . . . . . . . . . 26
(d) Accounts Receivable . . . . . . . . . . . . . . . . . . . 26
(e) Inventories . . . . . . . . . . . . . . . . . . . . . . . 26
(f) Projections . . . . . . . . . . . . . . . . . . . . . . . 27
4.7 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(a) Owned Properties. . . . . . . . . . . . . . . . . . . . . 27
(b) Leased Properties . . . . . . . . . . . . . . . . . . . . 27
(c) Contract and Option Properties. . . . . . . . . . . . . . 27
(d) Necessary Properties. . . . . . . . . . . . . . . . . . . 27
(e) Title . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(f) Operating Condition . . . . . . . . . . . . . . . . . . . 29
(g) Reserves. . . . . . . . . . . . . . . . . . . . . . . . . 29
4.8 Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(a) Customer Orders . . . . . . . . . . . . . . . . . . . . . 29
(b) Other Contracts . . . . . . . . . . . . . . . . . . . . . 29
4.9 No Litigation. . . . . . . . . . . . . . . . . . . . . . . . . 30
4.10 Operations Conducted Lawfully. . . . . . . . . . . . . . . . . 30
4.11 Environmental Protection . . . . . . . . . . . . . . . . . . . 31
(a) Definitions . . . . . . . . . . . . . . . . . . . . . . . 31
<PAGE> iii
(b) Disclosures of Environmental Permits, Etc . . . . . . . . 32
(c) Special Environmental Representations and Warranties. . . 32
4.12 Intellectual Properties. . . . . . . . . . . . . . . . . . . . 33
4.13 Zoning . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.14 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.15 Citations. . . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.16 No Consents. . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.17 Labor Relations. . . . . . . . . . . . . . . . . . . . . . . . 35
4.18 Employee and Fringe Benefit Plans. . . . . . . . . . . . . . . 36
(a) Schedule of Plans . . . . . . . . . . . . . . . . . . . . 36
(b) Qualification . . . . . . . . . . . . . . . . . . . . . . 37
(c) Contributions . . . . . . . . . . . . . . . . . . . . . . 37
(d) Reporting and Disclosure. . . . . . . . . . . . . . . . . 37
(e) Prohibited Transactions; Terminations; Other Reportable
Events. . . . . . . . . . . . . . . . . . . . . . . . . . 37
(f) Claims for Benefits . . . . . . . . . . . . . . . . . . . 37
(g) Other . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(h) Creation of Obligations . . . . . . . . . . . . . . . . . 38
4.19 Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.20 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF DRAVO AND
SELLERS AS TO LDC, DBR AND THE SUBSIDIARY ASSETS . . . . . . . 39
5.1 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . 39
5.2 Organization and Standing of LDC and DBR . . . . . . . . . . . 39
(a) Existence and Status. . . . . . . . . . . . . . . . . . . 39
(b) Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . 39
(c) Qualification . . . . . . . . . . . . . . . . . . . . . . 39
(d) Ownership Interests . . . . . . . . . . . . . . . . . . . 40
5.3 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.4 Liabilities and Liens. . . . . . . . . . . . . . . . . . . . . 40
5.5 Absence of Certain Changes . . . . . . . . . . . . . . . . . . 40
5.6 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . 41
5.7 Financial Matters. . . . . . . . . . . . . . . . . . . . . . . 41
(a) Financial Statements. . . . . . . . . . . . . . . . . . . 41
(b) Sales of Products . . . . . . . . . . . . . . . . . . . . 42
(c) Capitalized Leases. . . . . . . . . . . . . . . . . . . . 42
(d) Accounts Receivable . . . . . . . . . . . . . . . . . . . 42
(e) Inventories . . . . . . . . . . . . . . . . . . . . . . . 42
5.8 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . 43
(a) Owned Properties. . . . . . . . . . . . . . . . . . . . . 43
(b) Leased Properties . . . . . . . . . . . . . . . . . . . . 43
(c) Contract and Option Properties. . . . . . . . . . . . . . 43
(d) Necessary Properties. . . . . . . . . . . . . . . . . . . 43
<PAGE> iv
(e) Title . . . . . . . . . . . . . . . . . . . . . . . . . . 43
(f) Operating Condition . . . . . . . . . . . . . . . . . . . 44
(g) Reserves. . . . . . . . . . . . . . . . . . . . . . . . . 44
5.9 Contracts . . . . . . . . . . . . . . . . . . . . . . . . 44
(a) Customer Orders . . . . . . . . . . . . . . . . . . . . . 44
(b) Other Contracts . . . . . . . . . . . . . . . . . . . . . 45
5.10 No Litigation. . . . . . . . . . . . . . . . . . . . . . . . . 45
5.11 Operations Conducted Lawfully. . . . . . . . . . . . . . . . . 45
5.12 Environmental Protection . . . . . . . . . . . . . . . . . . . 46
(a) Disclosures of Subsidiary Environmental Permits, Etc. . . 46
(b) Special Environmental Representations and Warranties. . . 46
5.13 Intellectual Properties. . . . . . . . . . . . . . . . . . . . 48
5.14 Zoning . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
5.15 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
5.16 Citations. . . . . . . . . . . . . . . . . . . . . . . . . . . 49
5.17 No Consents. . . . . . . . . . . . . . . . . . . . . . . . . . 49
5.18 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . 50
5.19 Labor Relations. . . . . . . . . . . . . . . . . . . . . . . . 50
5.20 Securities Act and Blue Sky Compliance . . . . . . . . . . . . 50
5.21 Employee and Fringe Benefit Plans. . . . . . . . . . . . . . . 50
(a) Schedule of Plans . . . . . . . . . . . . . . . . . . . . 50
(b) Contributions . . . . . . . . . . . . . . . . . . . . . . 51
(c) Reporting and Disclosure. . . . . . . . . . . . . . . . . 51
(d) Prohibited Transactions; Terminations; Other Reportable
Events. . . . . . . . . . . . . . . . . . . . . . . . . . 51
(e) Claims for Benefits . . . . . . . . . . . . . . . . . . . 52
(f) Other . . . . . . . . . . . . . . . . . . . . . . . . . . 52
(g) Creation of Obligations . . . . . . . . . . . . . . . . . 52
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . 52
6.1 Organization and Standing of Buyer . . . . . . . . . . . . . . 52
6.2 Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . 52
6.3 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . 53
6.4 Enforceability . . . . . . . . . . . . . . . . . . . . . . . . 53
6.5 No Litigation. . . . . . . . . . . . . . . . . . . . . . . . . 53
6.6 No Consents. . . . . . . . . . . . . . . . . . . . . . . . . . 53
6.7 Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
6.8 Investment . . . . . . . . . . . . . . . . . . . . . . . . . . 53
6.9 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE 7 OTHER AGREEMENTS. . . . . . . . . . . . . . . . . . . . . . . . 54
7.1 [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.2 [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.3 [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . 54
<PAGE> v
7.4 Announcements. . . . . . . . . . . . . . . . . . . . . . . . . 54
7.5 Inspection; Confidentiality of Certain Information . . . . . . 55
(a) [Reserved]. . . . . . . . . . . . . . . . . . . . . . . . 55
(b) Confidentiality . . . . . . . . . . . . . . . . . . . . . 55
(c) [Reserved]. . . . . . . . . . . . . . . . . . . . . . . . 55
(d) LDC Balance Sheet . . . . . . . . . . . . . . . . . . . . 55
(e) Preservation of and Access to Records . . . . . . . . . . 56
7.6 Certain Employee Matters . . . . . . . . . . . . . . . . . . . 56
(a) No Obligation to Hire . . . . . . . . . . . . . . . . . . 56
(b) Transferred Employees . . . . . . . . . . . . . . . . . . 56
(c) No Assumption of Employee Obligations . . . . . . . . . . 57
(d) Employee Benefit Plans; COBRA Coverage. . . . . . . . . . 57
(e) WARN Agreements . . . . . . . . . . . . . . . . . . . . . 61
7.7 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
(a) Tax Returns . . . . . . . . . . . . . . . . . . . . . . . 62
(b) Control of Contest. . . . . . . . . . . . . . . . . . . . 62
7.8 [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . 63
7.9 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
(a) General . . . . . . . . . . . . . . . . . . . . . . . . . 63
(b) Specific. . . . . . . . . . . . . . . . . . . . . . . . . 63
7.10 Accounts Receivable Collection Procedures. . . . . . . . . . . 64
7.11 Audited Financial Statements . . . . . . . . . . . . . . . . . 65
7.12 Noncompetition Agreement . . . . . . . . . . . . . . . . . . . 65
7.13 Distributorship Agreements . . . . . . . . . . . . . . . . . . 65
7.14 Transition Services Agreement. . . . . . . . . . . . . . . . . 65
7.15 Software License . . . . . . . . . . . . . . . . . . . . . . . 65
7.16 Certain Environmental Matters. . . . . . . . . . . . . . . . . 66
(a) [Reserved]. . . . . . . . . . . . . . . . . . . . . . . . 66
(b) Post-Closing Environmental Testing. . . . . . . . . . . . 66
(c) Post-Closing Environmental Visits . . . . . . . . . . . . 66
(d) Nonexclusive; Limitation. . . . . . . . . . . . . . . . . 66
7.17 [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . 67
7.18 [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . 67
7.19 [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . 67
7.20 Trade Name License . . . . . . . . . . . . . . . . . . . . . . 67
(a) License . . . . . . . . . . . . . . . . . . . . . . . . . 67
(b) License Term. . . . . . . . . . . . . . . . . . . . . . . 67
(c) Licensors' Rights . . . . . . . . . . . . . . . . . . . . 67
(d) Name Change . . . . . . . . . . . . . . . . . . . . . . . 67
7.21 Liquidating Events . . . . . . . . . . . . . . . . . . . . . . 68
7.22 Intercompany Accounts. . . . . . . . . . . . . . . . . . . . . 68
7.23 Release. . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
<PAGE> vi
ARTICLE 8 [RESERVED]. . . . . . . . . . . . . . . . . . . . . . . . . . . 68
ARTICLE 9 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . 68
9.1 General Indemnification Obligations. . . . . . . . . . . . . . 69
(a) General . . . . . . . . . . . . . . . . . . . . . . . . . 69
(b) Loss. . . . . . . . . . . . . . . . . . . . . . . . . . . 69
(c) No Effect of Investigation or Waiver. . . . . . . . . . . 69
(d) Subsequent Sales. . . . . . . . . . . . . . . . . . . . . 70
9.2 Indemnification by Sellers . . . . . . . . . . . . . . . . . . 70
(a) Excluded and Excess Liabilities . . . . . . . . . . . . . 70
(b) Representations and Warranties. . . . . . . . . . . . . . 71
(c) Covenants and Agreements. . . . . . . . . . . . . . . . . 71
(d) Bulk Transfer . . . . . . . . . . . . . . . . . . . . . . 71
(e) Lynchburg Quarry Air Permit . . . . . . . . . . . . . . . 71
9.3 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . 72
(a) Representations and Warranties. . . . . . . . . . . . . . 72
(b) Covenants and Agreements. . . . . . . . . . . . . . . . . 72
(c) Assumed and Disclosed Liabilities . . . . . . . . . . . . 72
(d) Post-Closing Operations . . . . . . . . . . . . . . . . . 72
(e) Multi-Employer Plan Contributions . . . . . . . . . . . . 73
9.4 Certain Limitations. . . . . . . . . . . . . . . . . . . . . . 73
(a) Deductible. . . . . . . . . . . . . . . . . . . . . . . . 73
(b) Cap . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
(c) Consequential Damages . . . . . . . . . . . . . . . . . . 74
(d) Title Insurance . . . . . . . . . . . . . . . . . . . . . 74
(e) Insurance Recoveries. . . . . . . . . . . . . . . . . . . 74
9.5 Procedure. . . . . . . . . . . . . . . . . . . . . . . . . . . 75
(a) Notice. . . . . . . . . . . . . . . . . . . . . . . . . . 75
(b) Action on Claims. . . . . . . . . . . . . . . . . . . . . 75
(c) Special Provisions for Environmental Claims . . . . . . . 76
(d) Satisfaction of Claims. . . . . . . . . . . . . . . . . . 79
(e) Setoff. . . . . . . . . . . . . . . . . . . . . . . . . . 79
9.6 Nature and Survival of Representations and Warranties. . . . . 79
9.7 No Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . 80
9.8 Return of Lynchburg Quarry Assets. . . . . . . . . . . . . . . 80
ARTICLE 10 TERMINATION AND ABANDONMENT. . . . . . . . . . . . . . . . . . 81
10.1 [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . 81
10.2 Specific Performance and Other Remedies. . . . . . . . . . . . 81
ARTICLE 11 GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . 82
11.1 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
11.2 Remedies Cumulative; Costs . . . . . . . . . . . . . . . . . . 83
<PAGE> vii
11.3 Consent to Jurisdiction; Waiver of Jury Trial. . . . . . . . . 83
11.4 Assignment; Successors in Interest . . . . . . . . . . . . . . 83
(a) By Buyer. . . . . . . . . . . . . . . . . . . . . . . . . 83
(b) By Dravo and Sellers. . . . . . . . . . . . . . . . . . . 84
(c) Binding Nature. . . . . . . . . . . . . . . . . . . . . . 84
(d) No Third Party Rights . . . . . . . . . . . . . . . . . . 84
11.5 Construction . . . . . . . . . . . . . . . . . . . . . . . . . 84
11.6 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 84
11.7 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 84
11.8 Exhibits and Schedules . . . . . . . . . . . . . . . . . . . . 84
11.9 Joint and Several. . . . . . . . . . . . . . . . . . . . . . . 85
11.10 Entire Agreement. . . . . . . . . . . . . . . . . . . . . 85
11.11 Amendment; Waiver . . . . . . . . . . . . . . . . . . . . 85
<PAGE> vii<PAGE>
CERTAIN DEFINED TERMS
1933 Act Section 5.20
1934 Act Section 7.11
1993 Financial Statements Section 4.6(a)
1993 Subsidiary Financial Statements Section 5.7(a)
Affiliated Group Section 4.14
AMC Preamble
Antitrust Division Section 4.16
Applicable Land Reclamation Law Section 2.7(a)
Assignments of Leases Section 3.2(b)
Assumed Contracts Section 2.2(g)
Assumed Liabilities Section 2.7
Business Section 1.1
Buyer Preamble
Certain Rules of Construction Section 1.3
Closing Section 3.1(a)
Closing Date Section 3.1(a)
Closing Balance Sheet Section 2.4(a)
Closing Value Section 2.4(b)
Contracts Section 2.7(b)
DBM Preamble
DBR Section 1.1
DBR Receivables Section 3.4(e)
Disclosed Liabilities Section 2.9
Disputed Items Section 2.4(c)
Distributorship Agreements Section 7.13
DNRC Section 1.3(b)
Dravo Preamble
Dravo Logos Section 7.20
EEOC Section 4.17
Employee Plan Section 4.18(a)
Environmental Condition or Liability Section 2.8(e)
Environmental Laws Section 4.11
Environmental Permits Section 4.11(b)(i)
ERISA Section 4.18(a)
ERISA Affiliate Section 4.18(a)
Excess Liability Section 2.9
Excluded Assets Section 2.6
Excluded Liabilities Section 2.8
Financial Statements Section 4.6(a)
FTC Section 4.16
GAAP Section 2.4(a)
<PAGE> ix
HSR Act Section 4.16
Initial Payment Section 2.3(d)
Insurance Policies Section 5.18
Intellectual Properties Section 4.12
Intellectual Property Assignments Section 3.2(d)
Intellectual Property Licenses Section 4.12
Interim Financial Statements Section 4.6(a)
LDC Section 1.1
LDC Balance Sheet Section 7.5(d)
LDC Receivables Section 3.4(e)
Leased Real Property Section 2.2(b)
Leases Section 2.2(b)
MSHA Section 4.15
NLRB Section 4.17
Noncompetition Agreements Section 7.12
OSHA Section 4.15
Owned Real Property Section 2.2(a)
PBGC Section 4.18(b)
PCBs Section 4.11(c)(ii)
Permits Section 4.10
Permitted Liens Section 4.7(e)(i)
Pre-Closing Period Section 7.7(a)(i)
Purchase Price Section 2.3(a)
Purchased Assets Section 2.2
RCRA Section 4.11(a)(i)
Real Estate Contracts Section 2.2(c)
Receivables Section 2.2(h)
Seller Preamble
Software License Section 7.15
Special Agreements and Rights Section 3.5(b)
Subsidiary Environmental Permits Section 5.12(a)(i)
Subsidiary Financial Statements Section 5.7(a)
Subsidiary Intellectual Properties Section 5.13
Subsidiary Intellectual Property Licenses Section 5.13
Subsidiary Interim Financial Statements Section 5.7(a)
Subsidiary Lease Section 5.8(b)
Subsidiary Leased Real Property Section 5.8(b)
Subsidiary Permits Section 5.11
Superfund Section 4.11(a)(ii)
Survey Section 3.2(k)
Taxes Section 2.8(c)
<PAGE> x
this Agreement Preamble
Title Company Section 3.2(j)
Transferred Employees Section 7.6(b)
Transition Services Agreement Section 7.14
<PAGE> xi
<PAGE>
SCHEDULE LIST
Schedule 2.2(a) . . . . . . Owned Real Property
Schedule 2.2(b) . . . . . . Leased Real Property
Schedule 2.2(c) . . . . . . Real Estate Contracts
Schedule 2.2(d) . . . . . . Tangible Personal Property
Schedule 2.2(g) . . . . . . Assumed Contracts
Schedule 2.2(i) . . . . . . Intangible Personal Property
Schedule 2.2(n) . . . . . . Certain Notes Receivable
Schedule 2.2(o) . . . . . . Certain Trademarks
Schedule 2.3(d) . . . . . . Initial Payment
Schedule 2.4(b) . . . . . . Closing Value
Schedule 2.6. . . . . . . . Excluded Assets
Schedule 2.7(d) . . . . . . Guarantees
Schedule 2.9. . . . . . . . Disclosed Liabilities
Schedule 3.2(j) . . . . . . Title Insurance
Schedule 3.2(k) . . . . . . Surveys
Schedule 3.2(l) . . . . . . Consents and Estoppel Certificates
Schedule 4.1. . . . . . . . Organization
Schedule 4.4. . . . . . . . Liabilities and Liens
Schedule 4.5. . . . . . . . Absence of Certain Changes
Schedule 4.6(c) . . . . . . Capital Leases
Schedule 4.6(e) . . . . . . Inventories
Schedule 4.7(e) . . . . . . Permitted Liens
Schedule 4.8(a) . . . . . . Customer Orders
Schedule 4.8(b) . . . . . . Certain Relationships
Schedule 4.9. . . . . . . . Litigation
Schedule 4.10 . . . . . . . Permits
Schedule 4.11(b). . . . . . Environmental Permits
Schedule 4.11(c). . . . . . Certain Environmental Matters
Schedule 4.12 . . . . . . . Intellectual Properties
Schedule 4.13 . . . . . . . Zoning
Schedule 4.14 . . . . . . . Taxes
Schedule 4.15 . . . . . . . Citations
Schedule 4.16 . . . . . . . Consents
Schedule 4.17 . . . . . . . Labor Relations
Schedule 4.18 . . . . . . . Employee Benefits Matters
Schedule 5.1. . . . . . . . Subsidiary Capitalization
Schedule 5.2. . . . . . . . Subsidiary Organization
Schedule 5.4. . . . . . . . Subsidiary Liabilities and Liens
Schedule 5.5. . . . . . . . Subsidiary Absence of Certain Changes
Schedule 5.6. . . . . . . . Subsidiary Absence of Undisclosed
Liabilities
Schedule 5.7(a) . . . . . . Subsidiary Financial Statements
Schedule 5.7(c) . . . . . . Subsidiary Capital Leases
<PAGE> xii
Schedule 5.7(e) . . . . . . Subsidiary Inventories
Schedule 5.8(a) . . . . . . Subsidiary Tangible Personal Property
Schedule 5.8(b) . . . . . . Subsidiary Leased Properties
Schedule 5.8(c) . . . . . . Subsidiary Real Estate Contracts
Schedule 5.8(e) . . . . . . Subsidiary Title
Schedule 5.9(a) . . . . . . Subsidiary Customers Orders
Schedule 5.9(b) . . . . . . Subsidiary Other Contracts
Schedule 5.9(c) . . . . . . Certain Subsidiary Relationships
Schedule 5.10 . . . . . . . Subsidiary Litigation
Schedule 5.11 . . . . . . . Subsidiary Permits
Schedule 5.12 . . . . . . . Subsidiary Environmental Matters
Schedule 5.13 . . . . . . . Subsidiary Intellectual Property
Schedule 5.14 . . . . . . . Subsidiary Zoning
Schedule 5.15 . . . . . . . Subsidiary Taxes
Schedule 5.16 . . . . . . . Subsidiary Citations
Schedule 5.17 . . . . . . . Subsidiary Consents
Schedule 5.18 . . . . . . . Subsidiary Insurance
Schedule 5.19 . . . . . . . Subsidiary Labor Relations
Schedule 5.21 . . . . . . . Subsidiary Employee Benefit Plans
Schedule 6.6. . . . . . . . Buyer Consents
Schedule 7.6(d)(vi) . . . . Certain Multi-Employer Plans
<PAGE> xiii<PAGE>
EXHIBIT LIST
Exhibit A-1 . . . Form of Opinion of Buchanan Ingersoll Professional
Corporation
Exhibit A-2 . . . Form of Opinion of Cafferata & Co.
Exhibit B-1 . . . Form of Opinion of Sutherland, Asbill & Brennan
Exhibit B-2 . . . Form of Opinion of Dupuch & Turnquest & Co.
Exhibit C . . . . Form of Noncompetition Agreement
Exhibit D-1 . . . Distributorship Agreement (Longview)
Exhibit D-2 . . . Distributorship Agreement (Maysville and Black River)
Exhibit E . . . . Transition Services Agreement
Exhibit F . . . . Software License Agreement
<PAGE> xiv<PAGE>
ASSET PURCHASE AGREEMENT
BY AND AMONG
MARTIN MARIETTA MATERIALS, INC.,
DRAVO CORPORATION,
DRAVO BASIC MATERIALS COMPANY, INC.
AND
ATCHAFALAYA MINING COMPANY, INC.
THIS IS AN ASSET PURCHASE AGREEMENT ("this Agreement") by and among
MARTIN MARIETTA MATERIALS, INC., a North Carolina corporation ("Buyer"),
DRAVO CORPORATION, a Pennsylvania corporation ("Dravo"), DRAVO BASIC
MATERIALS COMPANY, INC., an Alabama corporation and a wholly owned
subsidiary of Dravo ("DBM"), and ATCHAFALAYA MINING COMPANY, INC., a
Louisiana corporation and a wholly owned subsidiary of DBM ("AMC"), dated as
of January 3, 1995. Buyer, Dravo, DBM and AMC, in consideration of the
mutual agreements set forth below (the mutuality, adequacy and sufficiency
of which are hereby acknowledged), hereby agree with the intent to be
legally bound as follows:
ARTICLE 1
BACKGROUND AND PURPOSE; DEFINITIONS
1.1 Background and Purpose. DBM, together with its wholly owned
subsidiaries AMC, through its interest in Louisiana Dredging Company, a
joint venture formed under the Louisiana Partnership Law ("LDC"), and Dravo
Bahama Rock Limited, a corporation incorporated under the laws of the
Commonwealth of the Bahamas ("DBR"), produce, market, distribute and sell
aggregates products, including crushed stone, pulverized limestone, shell,
sand and gravel, principally for construction, industrial, utility and
environmental uses (as presently conducted, the "Business"). DBM is a
wholly owned subsidiary of Dravo. Dravo, DBM and AMC desire to sell, and
Buyer desires to purchase, certain of the assets, property and leases used
in the Business, including the outstanding capital stock of DBR and the
joint venture interest in LDC. The purpose of this Agreement is to set
forth the terms and conditions on which Buyer will acquire the Business and
certain related matters.
1.2 General Definitions. For purposes of this Agreement:
(a) "Applicable Law" means all applicable provisions of any
constitution, statute, law, ordinance, code, rule, regulation, decision,
order, decree, judgment, release, license,
<PAGE> -1-
permit, stipulation or other official pronouncement enacted or issued
by any Governmental Authority or arbitrator or arbitration panel.
(b) "book value" of the Purchased Assets or the Subsidiary
Assets, as the case may be, means the value of the Purchased Assets
or the Subsidiary Assets as set forth on the applicable balance
sheet, net of any allowance or reserve established with respect to
such Purchased Assets or Subsidiary Assets and net of any
depreciation or amortization with respect to such Purchased Assets
or Subsidiary Assets.
(c) "contract" means any contract, agreement, commitment,
arrangement, undertaking or understanding of any kind whatsoever,
written or oral, together with all related amendments, modifications,
supplements, waivers and consents.
(d) "Governmental Authority" means any federal, state, local or
foreign legislative, executive, judicial, quasi-judicial or other public
authority, agency, department, bureau, division, unit, court or other
public body, person or entity.
(e) "IRC" means the Internal Revenue Code of 1986, as amended,
and any successor statute.
(f) "Lien" means any mortgage, deed to secure debt, deed of
trust, security interest, lien, pledge, charge, right of refusal,
encumbrance or adverse claim of any kind and any other security
arrangement of any nature whatsoever, including any conditional sale
or title retention arrangement, and any assignment, deposit
arrangement or lease intended as, or having the effect of, security
and the interest of a lessor or lessee under a lease treated as a
capitalized lease.
(g) "person" means any individual, sole proprietorship,
partnership, joint venture, estate, trust, unincorporated
organization, association, corporation, limited liability company,
institution or other entity, including any that is a Governmental
Authority.
(h) "plan" means any plan, program, policy or arrangement and
all related amendments, modifications, supplements, waivers and
consents.
(i) "Sellers" means DBM and AMC, collectively, and "Seller" means
either DBM or AMC, as applicable.
(j) "Subsidiary" means, with respect to any person, a
corporation or other organization, whether incorporated or
unincorporated, of which at least a majority of the securities or
interests having by the terms thereof voting power to elect a
majority of the board of directors or others performing similar
functions with respect to such corporation or other organization is
at that time, directly or indirectly, owned or controlled by such
person, or by one or more of its Subsidiaries, or by such person and
one or more of its Subsidiaries.
<PAGE> -2-
(k) "Subsidiary Assets" means the properties (real, personal
and mixed, whether tangible or intangible) as of the Closing Date (as
defined in Section 3.1) of LDC and DBR, collectively, including those
reflected on the balance sheet included in the 1993 Financial
Statements (as defined in Section 4.6(a)) and all such property that
would be included in such balance sheet but for the fact that it is
expensed or fully depreciated or acquired since the date of such
balance sheet, except for such property sold or otherwise disposed of
in the ordinary course of business since the date of such balance
sheet.
(l) "this Agreement" includes this Agreement and any
amendments or other modifications and supplements to this Agreement,
and all exhibits, schedules and other attachments to it, but does not
include the Noncompetition Agreement (as defined in Section 7.12), the
Distributorship Agreements (as defined in Section 7.13), the
Transition Services Agreement (as defined in Section 7.14) or the
Software License (as defined in Section 7.15) as executed and
delivered by the parties thereto.
Certain other terms are defined in other sections of this Agreement.
References to the definitions of such terms are on pages (ix) through (xi)
of the Table of Contents to this Agreement.
1.3 Certain Rules of Construction. The following rules of
construction shall apply to this Agreement:
(a) Including. "Including" and other words or phrases of
inclusion, if any, shall not be construed as terms of limitation, so
that references to "included" matters shall be regarded as non-
exclusive, non-characterizing illustrations and equivalent to the
terms "including, but not limited to," and "including, without
limitation."
(b) Ordinary Course of Business. The phrases "ordinary course
of business" and "ordinary and regular course of business"
specifically exclude any transactions with (i) any officer or director
of Dravo, Seller, AMC or DBR, the spouse or children of any such
person, any trust or other entity for the benefit (in part or in whole)
of any of the foregoing, or any person controlled by any combination
of the foregoing or (ii) any "affiliate" or "associate" (as such terms
are defined in the rules and regulations of the Securities and
Exchange Commission under the Securities Act of 1933, as amended) of
Dravo; provided, however, notwithstanding any provision in this
Agreement to the contrary, Sellers' purchase of inventory for resale
or services from their affiliates, including the Sellers' purchase of
services from Dravo Natural Resources Company, a Delaware
corporation ("DNRC"), in substantially the same quantities and on
substantially the same terms as is consistent with historical
practice shall be deemed to be transactions in the ordinary course of
business.
(c) Certain Obligations. Whenever this Agreement requires DBM
to take any action, such requirement shall be deemed to include an
undertaking on the part of Dravo to cause DBM to take such action.
Whenever this Agreement requires AMC or DBR to take any action prior
to Closing, such requirement shall be deemed to include an
<PAGE> -3-
undertaking on the part of Dravo and DBM to cause AMC or DBR, as the
case may be, to take such action.
(d) Negotiated Agreement. Each of Buyer, Dravo, DBM and AMC
acknowledges that it has been advised and represented by counsel in
the negotiation, execution and delivery of this Agreement and
accordingly agrees that if any ambiguity exists with respect to any
provision of this Agreement, such provision shall not be construed
against any party solely because such party or its representatives
were the drafters of any such provision.
(e) Covenants, Representations and Warranties of Dravo. The
covenants, representations and warranties made by Dravo in this
Agreement (or in any schedule, exhibit, certificate or other
agreement, instrument or document furnished or to be furnished to
Buyer pursuant to this Agreement) shall be limited to the Business.
ARTICLE 2
PURCHASE AND SALE OF THE BUSINESS
2.1 General. At the Closing provided for in Article 3 of this
Agreement and in accordance with, upon and subject to the terms and
conditions of this Agreement: (i) each of the Sellers shall sell, assign, and
transfer all of its right, title and interest to and in the Purchased Assets
(as defined below), and assign the Assumed Liabilities (as defined below), to
Buyer; and (ii) Buyer shall purchase, accept and receive the Purchased
Assets and assume the Assumed Liabilities.
2.2 Purchased Assets. For purposes of this Agreement, "Purchased
Assets" means each of the Sellers' properties (real, personal and mixed,
whether tangible or intangible) as of the Closing Date used or useful in the
Business, including those reflected on the balance sheet included in the
1993 Financial Statements and all such property that would be included in
such balance sheet but for the fact that it is expensed or fully
depreciated or acquired since the date of such balance sheet, except for (i)
such property sold or otherwise disposed of in the ordinary course of
business since the date of such balance sheet and (ii) the "Excluded
Assets" (as defined in Section 2.6). The Purchased Assets include, but are
not limited to, the following:
(a) All real property owned by Sellers and the structures,
improvements, buildings and facilities located thereon, used or
useful in the Business (the "Owned Real Property"), including all real
<PAGE> -4-
property and the structures, improvements, buildings and facilities
located thereon listed in Schedule 2.2(a) to this Agreement.
(b) All leases and other interests in real property (the
"Leases") in and to the extent any Seller has an interest, and the
structures, improvements, buildings and facilities located thereon,
used or useful in the Business (the "Leased Real Property"), including
all real property and the structures, improvements, buildings and
facilities located thereon described in the lease agreements listed
in Schedule 2.2(b) to this Agreement.
(c) All instruments, contracts or options to purchase and all
options to lease any real property and/or the structures,
improvements, buildings and facilities located thereon to which any
Seller or any affiliate is a party (the "Real Estate Contracts")
relating to the present or future operation of the Business,
including the instruments, contracts and options listed in Schedule
2.2(c) to this Agreement.
(d) All machinery, equipment, tools, vehicles, furniture,
fixtures, leasehold improvements, office equipment, and other
tangible personal property owned by any Seller and used or useful in
the Business, including the items listed or described in Schedule
2.2(d) to this Agreement.
(e) All finished goods inventories and all work in process owned
by any Seller.
(f) All inventories of raw materials, supplies (including fuel)
and repair parts owned by any Seller and relating to the Business.
(g) The orders and contracts (the "Assumed Contracts") relating
to the Business described below:
(i) All leases of machinery, equipment, tools, vehicles,
furniture, fixtures, leasehold improvements, office equipment or
other tangible personal property, which in the case of any such
lease providing for the payment by any Seller of more than
$2,000 per year, is listed in Schedule 2.2(g) to this Agreement;
(ii) The collective bargaining agreements listed on
Schedule 2.2(g);
(iii) All orders of any Seller's customers for products
from the locations of the Business existing on the Closing Date
and are either disclosed on Schedule 4.8(a) or if not required to
be so disclosed, were made in the ordinary course of business,
and which have not been performed as of the Closing Date;
(iv) All written purchase orders, orders and contracts of
any Seller entered into in the ordinary course of such Seller's
operation of the Business for the purchase of products, capital
equipment, services or supplies, which in the case of any such
purchase order, order or contract providing for the payment by
any Seller of more than $5,000, is listed in Schedule 2.2(g);
(v) Any other written orders, purchase orders or
contracts made by any Seller (A) listed in Schedule 2.2(g) or (B)
which were entered into in the ordinary and regular course of
business of such Seller and are reflected in the books and
<PAGE> -5-
records of such Seller but not including any promissory note or
other contract for the repayment of money borrowed;
(vi) The insurance policies listed on Schedule 2.2(g); and
(vii) All rights of any Seller under those verbal contracts
listed on Schedule 2.2(g) and identified as such on Schedule
2.2(g).
Notwithstanding anything in this subsection (g) to the contrary, Buyer
shall only assume those liabilities and obligations of Sellers set
forth in Section 2.7 of this Agreement and only to the extent
described therein.
(h) The accounts receivable of any Seller, whether billed or
unbilled, outstanding as of the Closing Date arising out of the sale
of such Seller's products (the "Receivables").
(i) All proprietary information, customer lists, credit records,
trade secrets, patents, copyrights, confidential information,
technical information and data, machinery and equipment warranties
and service records, real estate records (including lease and royalty
payment records), personnel records (as permitted by Applicable Law),
information regarding product procedures and all other information
and intangible property rights (including rights to use intellectual
property owned by others) of any Seller relating to the operation of
the Business, including the items listed on Schedule 2.2(i) to this
Agreement.
(j) All books, records, ledgers, files, documents,
correspondence, studies, reports and other documents of any Seller
relating to the Business, the Purchased Assets or the Subsidiary
Assets whether in written or machine readable form.
(k) All licenses and permits of any Seller used in or relating to
the Business to the extent transferable or assignable by their terms
or pursuant to Applicable Law.
(l) The capital stock of DBR, the deeds of trust in favor of DBM
with respect thereto, and all minute books, share records and similar
corporate documents of DBR.
(m) The joint venture interest in LDC.
(n) The note receivable listed on Schedule 2.2(n).
(o) The trademarks listed on Schedule 2.2(o).
(p) All other property of any Seller used or useful in the
Business, including petty cash at each location of the Business (at
levels consistent with Sellers' historical practices), deposits
relating to the Purchased Assets (but not including checking, money
market or other bank accounts or deposits relating to Excluded Assets
or Excluded Liabilities (as defined in Section 2.8)), advance rent and
<PAGE> -6-
prepaid items (including prepaid royalties and reclamation deposits)
and refunds, whether or not reflected in the Closing Balance Sheet
(as defined in Section 2.4(a)).
2.3 Purchase Price and Initial Payment.
(a) Amount of Purchase Price. The aggregate consideration for
all the Purchased Assets and the agreements set forth or described
in Sections 7.14 and 7.15 shall be the sum of the Closing Value (as
determined in accordance with Section 2.4) of the Purchased Assets
and the Subsidiary Assets owned by DBR plus Two Million Dollars
($2,000,000), minus the adjustment required pursuant to Section 2.3(b)
(as so adjusted, the "Purchase Price"), and the assumption of the
Assumed Liabilities. The Purchase Price so determined shall be
adjusted by the prorations provided for in Section 2.3(c).
(b) Adjustment for Certain Liabilities. The sum of the Closing
Value plus Two Million Dollars ($2,000,000) described in Section 2.3(a)
shall be reduced by the aggregate amount accrued on the Closing
Balance Sheet for (i) the liabilities of Sellers assumed by Buyer
pursuant to Section 2.7 and (ii) the liabilities and obligations of DBR.
(c) Certain Prorations. Buyer and Sellers shall apportion the
following items with respect to the Purchased Assets, the Subsidiary
Assets owned by DBR and the Business as of 12:01 a.m. on the Closing
Date for periods which include the Closing Date:
(i) rents, royalties and other charges to be received or
paid under any agreements included in the Assumed Liabilities or
the Disclosed Liabilities (as defined in Section 2.9) prorated on
the basis of the payment period and payable and apportioned on
the basis of the actual number of days in such period;
(ii) real and personal property taxes, prorated upon the
basis of the calendar year for which assessed (unless
undeterminable as of the Closing Date and then based upon the
previous year's real and personal property taxes) and payable
and apportioned upon the basis of the actual number of days in
such year; and
(iii) utility charges, prorated upon the basis of the
payment period and payable and apportioned on the basis of the
actual number of days in such period;
provided, however, to the extent that any of the foregoing items
relate to Subsidiary Assets owned by DBR, prorations with respect to
such Subsidiary Assets shall not be made to the extent any of the
foregoing items are reflected in the Closing Balance Sheet. The
apportionment between the parties under this Section 2.3(c) shall be
determined in connection with the determination of the Closing Value
and any payment to effect such apportionment shall be made within
the time period provided for the payment of the final payment of the
Purchase Price as set forth in Section 2.4(e).
<PAGE> -7-
(d) Initial Payment at Closing. At the Closing, Buyer shall pay
to Sellers in accordance with Section 3.3(a) an amount (the "Initial
Payment") equal to the book value of the Purchased Assets and the
Subsidiary Assets owned by DBR shown on DBM's unaudited
consolidated balance sheet as of the last day of the month
immediately preceding the Closing Date (or if the Closing Date occurs
prior to the fifteenth day of the month, the last day of the next
preceding month), less the aggregate amount accrued on such balance
sheet (i) for the liabilities assumed by Buyer pursuant to Section 2.7
and (ii) the liabilities and obligations of DBR, plus Two Million Dollars
($2,000,000), subject to adjustment for the matters set forth in
Schedule 2.3(d). In addition to the Initial Payment, at the Closing,
Buyer shall make the payment to DBM required pursuant to the
Noncompetition Agreement (as defined in Section 7.12).
2.4 Closing Value and Final Payment.
(a) Closing Balance Sheet. Dravo and Sellers shall provide
Buyer as soon as possible after Closing (but in no event later than
forty-five (45) days after the Closing Date) with a consolidated
balance sheet of DBM as of the close of business on December 31,
1994, audited by KPMG Peat Marwick, certified public accountants (the
"Closing Balance Sheet"). The Closing Balance Sheet shall be prepared
in accordance with generally accepted accounting principles ("GAAP")
consistently applied with the accounting policies and procedures
followed in preparing the balance sheet included in the 1993 Financial
Statements, shall include all year-end adjustments and notes, and
shall value all product inventory in stockpiles, bins or in transit at
the lower of average production cost (determined on a location-by-
location basis) or market (determined on a product-by-product,
location-by-location basis). The examination of the Closing Balance
Sheet by KPMG Peat Marwick shall be conducted in accordance with
generally accepted auditing standards and its report thereon shall
not be qualified in any respect. The judgment of KPMG Peat Marwick as
to the audit scope and materiality thresholds for proposed adjusting
entries shall not be restricted by any limitation imposed by Buyer,
Dravo or Sellers. Dravo and Sellers shall pay the fees and expenses
of KPMG Peat Marwick in connection with the preparation of the
Closing Balance Sheet.
(b) Determination of Closing Value. Dravo and Sellers shall
prepare a statement in accordance with the provisions of this Section
2.4(b) which shall set forth the value of the Purchased Assets and
the Subsidiary Assets owned by DBR as of the Closing Date (the
"Closing Value"). The Closing Value shall be the book value of the
Purchased Assets and the Subsidiary Assets owned by DBR as set
forth on the Closing Balance Sheet, subject, however, to the
guidelines set forth in Schedule 2.4(b) to this Agreement. Dravo and
Sellers shall deliver to Buyer, no later than sixty (60) days following
the Closing Date, a report setting forth (i) its determination of the
Closing Value, (ii) the adjustments pursuant to Section 2.3(b), (iii) the
items to be prorated between Buyer and Sellers and the resulting
adjustment pursuant to Section 2.3(c) and (iv) its calculation of the
Purchase Price and the final payment to be made pursuant to Section
2.4(e). Contemporaneously with the delivery of such report, Dravo and
Sellers shall deliver a certificate of the Chief Financial Officer
<PAGE> -8-
of Dravo and a report of KPMG Peat Marwick, certifying (in the case of
the certificate of the Chief Financial Officer of Dravo) and
attesting (in the case of the report of KPMG Peat Marwick) that the
calculation of the Purchase Price as set forth in the report
delivered to Buyer, including the determination of the Closing Value,
the adjustments pursuant to Section 2.3(b) and the prorations and the
resulting adjustment pursuant to Section 2.3(c), were made in
accordance with the terms and provisions of Article 2 of this
Agreement. Dravo and Sellers shall each make available to Buyer and
its agents, the employees of Dravo or any Seller and representatives
of KPMG Peat Marwick who assisted in the preparation of such report
or who are otherwise familiar with the determinations made therein,
as well as their respective work papers and other information
reasonably relating to the determination of the Closing Value of the
Purchased Assets and the Subsidiary Assets owned by DBR, and the
adjustments and prorations as set out in such report.
(c) Notice of Objection. Within sixty (60) days after Dravo's and
Sellers' delivery of the report described in Section 2.4(b), Buyer
shall deliver to Dravo a written notice of any objection to any item or
amount, specifying in reasonable detail the reason for each objection
and the amount of each proposed adjustment (the "Disputed Items").
The determination of any item not objected to by Buyer shall be
binding on the parties. After receipt of Buyer's notice,
representatives of Buyer and Dravo shall meet to discuss the
Disputed Items in an effort to reach agreement with respect thereto.
If Buyer and Dravo are able to reach agreement as to any Disputed
Items, then such determination as agreed upon as to such Disputed
Items shall become binding upon all the parties at such time. If Buyer
and Dravo are unable to reach agreement as to all Disputed Items
within thirty (30) days after delivery of Buyer's notice of Disputed
Items, then the unresolved Disputed Items shall be submitted for
resolution as provided in Section 2.4(d) for a determination that shall
be binding upon the parties to this Agreement; provided, however, if
the Disputed Item relates to Sellers' inventories included on the
Closing Balance Sheet, Buyer may direct that the Disputed Item be
submitted for resolution pursuant to Section 2.4(d) at any time within
the sixty (60) day period following delivery by Dravo and Sellers of
the report described in Section 2.4(b). Disputed Items may be
submitted to resolution pursuant to Section 2.4(d) at any time during
the period beginning on the thirty-first (31st) day after delivery by
Dravo and Sellers of the report described in Section 2.4(b) and ending
on the sixtieth (60th) day following delivery of such report, except
that inventory-related Disputed Items may be submitted at any time
during the sixty (60) day period following delivery by Dravo and
Sellers of the report described in Section 2.4(b). The submission of
any Disputed Items for resolution pursuant to Section 2.4(d) shall not
act as a waiver of any party's right to submit any additional Disputed
Item for resolution pursuant to Section 2.4(d) during the applicable
time periods.
(d) Dispute Resolution. If during such 30-day period Buyer and
Dravo cannot resolve all of such Disputed Items, (i) those amounts
agreed upon by the parties shall no longer constitute Disputed Items
and shall be conclusively determined for purposes of the calculation
of the Purchase Price and (ii) the parties shall promptly thereafter,
but in no event more than fifteen (15) days thereafter, cause a
partner of Arthur Andersen & Co.,
<PAGE> -9-
located in its Washington, D.C. office, promptly to review this
Agreement and the unresolved Disputed Items for purposes of
resolving the remaining Disputed Items and calculating the Closing
Value, adjustments or prorations, as the case may be. In making such
calculation, such accounting firm shall make a determination in
accordance with the terms and provisions of this Agreement (including
Schedule 2.4(b)) only of Disputed Items not resolved by Buyer and
Dravo and in the case of all other items shall use the amounts which
were agreed upon by Buyer and Dravo. Such accounting firm shall
deliver to Dravo and Buyer, as promptly as practicable, a report
setting forth its resolution of the remaining Disputed Items. Such
report shall be final and binding upon the parties hereto. The cost
of such review and report shall be borne equally by Dravo and Buyer.
Each party agrees that neither it nor its affiliates currently
contemplate retaining such accounting firm for any substantial
engagement having a purpose other than the performance of services
pursuant to this Section 2.4.
(e) Final Payment. If the Purchase Price as determined by
agreement of the parties or such accounting firm, as the case may be,
is greater than the Initial Payment, Buyer shall promptly pay to
Sellers the amount of the difference. If the Purchase Price so
determined is less than the Initial Payment, Dravo and Sellers shall
promptly pay to Buyer the amount of the difference. Any such
payment pursuant to this Section 2.4(e) shall be made within ten (10)
days after (i) Buyer and Dravo agree upon the Purchase Price or (ii) if
Disputed Items are referred to such accounting firm, the delivery of
the report of such firm.
(f) Payment Method. Any payment pursuant to this Section 2.4
shall be made by wire transfer of immediately available funds to an
account designated by Buyer or Dravo (on behalf of Sellers), as the
case may be. The amount of any payment to be made pursuant to this
Section 2.4 shall bear interest from and including the Closing Date to
but excluding the date of payment at the Federal Funds rate on the
Closing Date. Such interest shall be payable at the same time as the
payment to which it relates and shall be calculated daily on the basis
of a year of 365 days and the actual number of days for which due.
(g) Reimbursement. If Buyer discovers, after the final
determination of the Purchase Price, that any machinery, equipment,
vehicle or other item of tangible personal property included in the
Purchased Assets or the Subsidiary Assets owned by DBR and included
in the Closing Balance Sheet at a book value of $10,000 or more has
not in fact been delivered to Buyer, Dravo and Sellers shall either (i)
reimburse Buyer for the missing item in an amount equal to the
portion of the Closing Value attributed to such item or (ii) deliver a
comparable replacement for such missing item; provided, however, that
if a replacement item for such missing item is included in the
Purchased Assets or the Subsidiary Assets and delivered to Buyer
was not included in the Closing Balance Sheet, any reimbursement
made by Dravo and Sellers pursuant to this subsection (g) shall be net
of the book value as of the Closing Date of such replacement item.
<PAGE> -10-
2.5 Allocation of Purchase Price. The Purchase Price shall be
allocated to the Purchased Assets and any agreements of value made in
Sections 7.14 and 7.15 of this Agreement or pursuant hereto in accordance
with IRC Section 1060, based on an appraisal of the Purchased Assets and
such agreements to be made by a nationally recognized appraisal firm to be
selected by Buyer. The appraised values set forth in the appraisal report
shall be utilized by the parties for all purposes, including tax reporting
purposes and the appraisal report shall so indicate. Buyer shall pay the
fees and expenses of the appraisal firm selected by it to conduct such
appraisal. Buyer, Dravo and Sellers shall not take any position on their
respective tax returns that is inconsistent with such allocation of the
Purchase Price, and Buyer, Dravo and Sellers shall duly prepare and timely
file such reports and information returns as may be required to report the
allocation of the Purchase Price, including Internal Revenue Service Form
8594.
2.6 Excluded Assets. Notwithstanding anything in this Agreement to
the contrary, the following assets and properties of Sellers are not
included in the Purchased Assets and are not being sold or transferred by
Sellers or purchased or acquired by Buyer pursuant to this Agreement (the
"Excluded Assets"): (i) cash (other than petty cash) and cash equivalent
investments; (ii) all minute books, share records and similar corporate
documents of any Seller; (iii) except as provided in Section 2.2(g)(vi),
prepaid income taxes or income tax refunds and prepaid insurance premiums
(including retrospective premium adjustments); (iv) except as provided in
Section 2.2(n), notes receivable; (v) intercompany accounts among Sellers
and Dravo and/or its consolidated Subsidiaries; (vi) except as provided in
Section 2.2(o) and Section 7.20, ownership rights to trade names, trademarks
or trade styles of Dravo, Sellers and DBR; (vii) the capital stock of DNRC;
(viii) except as provided in Section 7.15, the assets of DNRC; (ix) the capital
stock of AMC; (x) the capital stock and assets of Tideland Industries, Inc., a
Louisiana corporation; (xi) except as provided in Section 2.2(g)(vi), all
casualty or liability insurance policies; (xii) all claims of any Seller
against third parties and any judgments in favor of any Seller, relating
solely to the operation of the Business but only if the Closing Balance
Sheet reflects the diminution in value to the Purchased Assets arising
from such claim or judgment; and (xiii) any of the other assets and
properties set forth on Schedule 2.6 attached hereto. Except as set forth
in clause (vi) above, none of the assets and properties that are owned by
DBR shall be Excluded Assets.
2.7 Assumed Liabilities. Subject to the terms and conditions herein,
and in reliance upon the representations, warranties and covenants
hereinafter set forth, Buyer shall assume, perform and discharge only the
following obligations and liabilities of Sellers (hereinafter collectively
referred to as the "Assumed Liabilities"):
(a) Land Reclamation. The liability of any Seller for current or
future land reclamation on the Owned Real Property and the Leased
Real Property required by (i) Applicable Land Reclamation Law (as
defined below) or (ii) the written terms of any Lease listed on
Schedule 2.2(b) or otherwise expressly disclosed and described on
Schedule 2.2(b) (which will include the terms of any "good neighbor"
agreements); provided, however, that Buyer does not assume, and
nothing in this Section 2.7(a) shall be deemed or construed to require
Buyer to perform, any Seller's obligations and liabilities for land
reclamation, which are specifically excluded under Section 2.8.
Buyer's obligation under this Section
<PAGE> -11-
2.7(a) specifically excludes (i) any liability for defective, improper or
insufficient land reclamation, restoration, leveling or seeding which
has already been performed by any Seller, or (ii) land reclamation
which is or may be required to be performed by any Seller on lands
other than the Owned Real Property or the Leased Real Property. For
purposes of this Agreement, Applicable Land Reclamation Law shall
include only those laws providing for reclamation activities
generally applicable to quarries in the jurisdiction in which the
quarry is located, including the grading and reseeding of overburden
after removal of deposits in the ordinary course of business and the
restoration of affected areas to pre-mining condition or to any
approved post-mining land use, but not any Environmental Law (as
defined in Section 4.11, except that, for the purposes of the
definition of Applicable Land Reclamation Law, Environmental Law
shall not include any mining laws) relating to specific waste material
(other than overburden). Notwithstanding any provision in this
Agreement to the contrary, land reclamation shall not be construed so
to include any liability, obligation or requirement of any nature
whatsoever arising out of or related to actual or potential soil or
groundwater contamination arising out of events which occurred prior
to Closing or circumstances existing as of or prior to Closing, it
being the intent of the parties that the responsibility for any such
liability, obligation or requirement be governed by the provisions of
this Agreement relating to environmental protection. As between
Buyer, as one party, and Dravo and Sellers, as one party, the terms
and provisions of this Agreement shall supersede any conflicting
provision regarding assumption of any Seller's reclamation
obligations as may be set forth in any agreement to which Buyer,
Dravo and Sellers, or any of them, and any Governmental Authority,
including state environmental protection agencies or authorities, may
enter into in connection with the transfer of any Permits (as defined
in Section 4.10) or Environmental Permits (as defined in Section 4.11).
(b) Contracts. The following obligations (collectively, the
"Contracts"): (i) any Seller's obligations under those contracts and
quotations for the sale of product from the locations of the Business
existing on the Closing Date and are either disclosed on Schedule
4.8(a) or if not required to be so disclosed were made in the ordinary
course of business, to the extent not performed as of the Closing
Date; (ii) the Leases (as listed on Schedule 2.2(b)); (iii) the Real
Estate Contracts (as listed on Schedule 2.2(c)); and (iv) the Assumed
Contracts; provided, however, Buyer shall only assume Sellers'
obligations relating to the foregoing to the extent they arise on or
after the Closing Date; provided, further, that with respect to any
verbal contracts identified on Schedule 2.2(g), Buyer shall only
assume the obligations binding upon any Seller to the extent such
obligations are expressly identified on Schedule 2.2(g).
Notwithstanding the foregoing, Buyer shall not assume any of the
foregoing Contracts in which a Seller is in default on the Closing
Date if such default cannot be cured; provided, however, that if any
such default can reasonably be cured, Buyer shall assume such
Contract and Dravo, Sellers or Buyer, as appropriate, shall effect
such cure, but Dravo and Sellers acknowledge and agree that any loss,
cost, damage, expense, obligation or liability resulting from, arising
out of or related to such default or cure shall constitute an Excluded
Liability (as defined in Section 2.8). Buyer does not assume any
obligation to sell or deliver products to the extent that payments
were made or
<PAGE> -12-
amounts billed prior to the Closing Date unless Dravo or a Seller has
remitted the amount of such payments to Buyer.
(c) Accrued Vacation Pay. The liability of Sellers for vacation
pay owed to Transferred Employees (as defined in Section 7.6(b)) to
the extent accrued on the Closing Balance Sheet and included in the
adjustment to determine the Purchase Price set forth in Section
2.3(b).
(d) Guarantees. The obligations of any Seller under any
guaranty listed on Schedule 2.7(d) to this Agreement; provided,
however, Buyer shall only assume such Seller's obligations relating
to any such guaranty to the extent they arise on or after the Closing
Date and Buyer shall not assume any such guaranty in which a Seller
is in default on the Closing Date if such default cannot be cured.
Notwithstanding the foregoing, if any such default can reasonably be
cured, Buyer shall assume such guaranty and Dravo, Sellers or Buyer,
as appropriate, shall effect such cure, but Dravo and Sellers
acknowledge and agree that any loss, cost, damage, expense, obligation
or liability resulting from, arising out of or related to such default
or cure shall constitute an Excluded Liability.
(e) Accrued Salary. The liability of Sellers for salaries owed
to salaried Transferred Employees for the period beginning on
January 1, 1995 and ending on the day prior to the Closing Date to the
extent included in the adjustment to determine the Purchase Price set
forth in Section 2.3(b).
Notwithstanding the foregoing provisions of this Section 2.7, Buyer shall
not assume any liability or obligation of LDC or DBR of any kind whatsoever,
which liabilities and obligations shall remain the liabilities and obligations
of LDC or DBR, as the case may be, following the Closing. Buyer shall pay or
perform all of the Assumed Liabilities no later than when they become due
and payable or are to be performed.
2.8 Excluded Liabilities. Dravo, Sellers and Buyer expressly
understand and agree that Buyer shall not and does not hereby assume or
become liable for any obligations, liabilities, commitments or debts, or
guarantees of debt, of Dravo, any Seller, or any of their respective
Subsidiaries (including DBR) or affiliates, whether due or to become due,
asserted or unasserted, accrued or unaccrued, liquidated or unliquidated,
contingent, executory or otherwise, howsoever or whenever arising,
excepting only the specifically identified Assumed Liabilities to the extent
that they are expressly assumed by Buyer under Section 2.7 hereinabove
and the foregoing being hereinafter individually referred to as an
"Excluded Liability" and collectively referred to as "Excluded Liabilities."
The following is a non-exclusive listing of some of the liabilities and
obligations of Sellers which Buyer shall not assume or agree to pay,
perform or discharge, it being understood that such listing is not intended
to limit in any manner whatsoever the first sentence of this Section 2.8.
<PAGE> -13-
(a) Litigation. Any and all items of governmental, judicial or
adversarial proceedings (public or private), litigation, hearings,
arbitration, dispute or investigation against or involving Dravo or
any Seller.
(b) Employee and Union Claims. Any and all amounts claimed
against Dravo, any Seller or Buyer or any of their respective
directors, officers or employees by, or on behalf of, any former or
current employee of Dravo or any Seller, any union or other employee
representative of any former or current employee of Dravo or any
Seller, or any Governmental Authority, relating to, based upon or
arising from or in connection with: (i) service performed for Dravo or
any Seller prior to the Closing Date, including any claim or claims
relative to, based upon or arising from or in connection with the
terms and conditions of employment or the termination of employment
with Dravo or any Seller; (ii) any contract of employment between
Dravo or any Seller, and any former or current employee of Dravo or
any Seller; (iii) any and all union or collective bargaining contracts,
agreements or understandings to which Dravo or any Seller is a
signatory or to which any of them is claimed to be bound (A) that is not
listed in Schedule 2.2(g) or (B) if listed in Schedule 2.2(g), to the
extent not assumed pursuant to Section 2.7(b); or (iv) except to the
extent assumed pursuant to Section 2.7(b) or otherwise provided in
Section 7.6, any and all liabilities which arise out of or relate to
pension, profit sharing, health, welfare, disability, workers'
compensation or other employment benefit plans maintained by Dravo
or any Seller or any union or other labor organization or any of its
subsidiaries or affiliates, including any incurred but not reported
expenses of employees arising from such plans, any liability arising
from Dravo's or such Seller's underfunding or termination of any
such plans or reduction of any other employment benefits of any kind
or nature whatsoever in connection with the consummation of the
transactions contemplated by this Agreement or otherwise.
(c) Taxes. Any and all federal, state, local or foreign taxes,
charges, fees, levies, imposts, duties or other assessments, including
income, gross receipts, excise, employment, sales, use, transfer,
license, payroll, franchise, severance, stamp, occupation, windfall
profits, environmental (including taxes under IRC Section 59A),
premium, federal highway use, commercial rent, customs duties, capital
stock, paid up capital, profits, withholding Social Security, single
business and unemployment, disability, real property, personal
property, registration, ad valorem, value added, alternative or add-on
minimum, estimated, or other tax or governmental fee of any kind
whatsoever, including any interest, penalties or additions thereto
(collectively, "Taxes"), whether disputed or not, imposed upon or with
respect to Dravo, any Seller, the Purchased Assets or any part
thereof, except to the extent that Buyer is responsible pursuant to
Sections 2.3(c) and 7.9(b) and, except with respect to the Purchased
Assets, ad valorem taxes imposed for any period after the Closing.
(d) Product Claims. Any and all claims in existence as of the
Closing and, without limiting the representations and warranties set
forth in Section 4.6(e), any and all claims arising or accruing on or
after the Closing with respect to sales of products which have been
shipped or produced prior to Closing.
<PAGE> -14-
(e) Environmental Claims. Any and all claims, liabilities and
obligations, including any and all items of litigation, investigation,
clean-up, removal and remediation, which relate to, are based upon or
arise from or in connection with common law claims or any federal,
state, local or foreign environmental laws, rules or regulations
(including reporting requirements), whether such claims, liabilities
and obligations are made or asserted by any Governmental Authority
or by private parties, without regard as to whether Buyer has
conducted an environmental audit, and whether such claims, liabilities
and obligations arise or accrue before, on or after the Closing in
connection with (i) the ownership, occupation or use of the Purchased
Assets and the Subsidiary Assets by Dravo, any Seller or any other
person prior and up to the Closing, (ii) the Sellers' operation of the
Business or (iii) acts, events or omissions that occurred, or
conditions or circumstances that existed, on or before the Closing
("Environmental Condition or Liability") whether or not any such act,
event, omission, condition or circumstance was lawful when it
occurred or existed. For purposes of this Agreement, "Environmental
Condition or Liability" shall be construed in its most comprehensive
sense specifically including conditions covered by or arising under:
(i) all Environmental Laws (as defined in Section 4.11(a)),
including any failure to comply with regulations promulgated
under the federal Clean Air Act, as amended, including the New
Source Performance Standards promulgated thereunder; and
(ii) to the extent concerned with either the permitting,
generation, storage, disposal, release, removal or remediation of
hazardous wastes, hazardous substances, PCBs, hazardous or
toxic materials, and petroleum products, as well as underground
tanks, other Applicable Law;
in either case whether or not such matters are included within the
matters set forth in the warranties and representations under
environmental protection contained in this Agreement.
(f) Land Reclamation. Any and all claims for land reclamation (i)
not relating to the Owned Real Property or the Leased Real Property
or (ii) with respect to the Owned Real Property and the Leased Real
Property not required by Applicable Land Reclamation Law, any Lease
listed in Schedule 2.2(b) or otherwise expressly described in Schedule
2.2(b). As between Buyer (as one party) and Dravo and Sellers (as one
party), the terms and provisions of this Agreement shall supersede
any conflicting provision regarding assumption of any Seller's
reclamation obligations that may be set forth in any agreement to
which Buyer, Dravo and Sellers, or any of them, and any Governmental
Authority, including environmental protection agencies or
authorities, may enter into in connection with the transfer of any
Permits or Environmental Permits.
(g) General. Excepting those specifically identified Assumed
Liabilities to the extent that they are expressly assumed by Buyer
under Section 2.7, any and all debts, liabilities, letters of credit,
guarantees, accounts payable (including the account payable of
<PAGE> -15-
DBM owed to LDC for product purchased by DBM), obligations and
commitments of Dravo or any Seller arising before, on or after the
Closing.
Each Seller shall pay or perform all of its Excluded Liabilities no later
than when they become due and payable or are to be performed.
2.9 Disclosed Liabilities and Excess Liabilities. Dravo, Sellers and
Buyer expressly understand and agree that the obligations, liabilities,
commitments or debts, or guarantees of debt, of LDC or DBR, whether due or
to become due, asserted or unasserted, accrued or unaccrued, liquidated or
unliquidated, contingent, executory or otherwise existing immediately prior
to the Closing shall remain the obligations, liabilities, commitments or
debts, or guarantees of debt, of LDC or DBR, as the case may be, following
the Closing. For purposes of this Agreement, the term "Disclosed
Liabilities" shall mean the following obligations, liabilities, commitments or
debts, or guarantees of debt, of LDC or DBR, as the case may be:
(a) Accrued Liabilities. The obligations, liabilities and debts
of: (i) DBR to the extent (and only to the extent) accrued on the
Closing Balance Sheet and included in the adjustment to the Purchase
Price set forth in Section 2.3(b); and (ii) LDC to the extent (and only to
the extent) reflected in determining the Closing Value of DBM's
investment in LDC (as shown on the Closing Balance Sheet).
(b) Contract Liabilities. The obligations and liabilities of DBR
with respect to (i) any Subsidiary Lease listed on Schedule 5.8(b); (ii)
any Subsidiary Real Estate Contract listed on Schedule 5.8(c); (iii)
contracts or quotations for the sale of product existing on the
Closing Date and are either disclosed on Schedule 5.9(a) or, if not
required to be so disclosed, were made in the ordinary course of
business, to the extent not performed as of the Closing Date; (iv)
those contracts listed on Schedule 5.9(b); and (v) any other obligation,
liability, commitment or debt, or guarantee of debt disclosed on
Schedule 2.9; provided, however, that Disclosed Liabilities do not
include DBR's obligations relating to the foregoing to the extent they
arise before the Closing Date (unless accrued on the Closing Balance
Sheet and included in the adjustment to the Purchase Price set forth
in Section 2.3(b)) or any obligation to sell or deliver products to the
extent that payments were made or amounts billed prior to the Closing
Date unless Dravo or a Seller has remitted the amount of such
payments to Buyer.
(c) Land Reclamation. The liability of DBR for current or
future land reclamation on the Subsidiary Leased Real Property
leased by it required by (i) Applicable Land Reclamation Law or (ii) the
written terms of any Subsidiary Lease listed on Schedule 5.8(b) or
otherwise expressly disclosed and described on Schedule 5.8(b);
provided, however, that Disclosed Liabilities do not include DBR's
obligations and liabilities for (i) defective, improper or insufficient
land reclamation, restoration, leveling or seeding which has already
been performed by DBR, and (ii) land reclamation (A) not relating to the
Subsidiary Leased Real Property, or (B) with respect to the Subsidiary
Leased Real Property, not required by
<PAGE> -16-
Applicable Land Reclamation Laws, any Subsidiary Lease listed in
Schedule 5.8(b) or otherwise expressly described in Schedule 5.8(b).
To the extent any obligation, liability, commitment or debt, or guarantee of
debt, of LDC or DBR is not included within the definition of "Disclosed
Liabilities" set forth above, it shall be deemed an "Excess Liability"
(collectively, "Excess Liabilities") for purposes of this Agreement. Excess
Liabilities include any and all items of governmental, judicial or
adversarial proceedings (public or private), litigation, hearings,
arbitration, dispute or investigation against or including DBR or LDC,
whether or not disclosed on Schedule 5.10 and the obligation of DBR to pay
the sum of $4,000,000 to The Grand Bahama Port Authority Limited pursuant
to that certain Agreement dated August 15, 1990 among The Grand Bahama
Port Authority Limited, DBR and Bahama Cement Company. Notwithstanding
the first sentence of this Section 2.9, Dravo, Sellers and Buyer agree that
as among themselves, Buyer shall be entitled to be indemnified by Dravo and
Sellers pursuant to the provisions of Article 9 of this Agreement if LDC or
DBR is required to satisfy, discharge, settle or compromise any Excess
Liability after the Closing.
ARTICLE 3
THE CLOSING
3.1 Generally.
(a) Place, Time and Date of Closing. The deliveries and
payments contemplated by this Agreement (other than deliveries and
payments contemplated by this Agreement to be made after the Closing
Date) (the "Closing") shall be made at the offices of Sutherland, Asbill
& Brennan, 999 Peachtree Street, Atlanta, Georgia 30309 (i)
contemporaneously with the execution and delivery of this Agreement
or (ii) at such other place, time and date as Buyer and Dravo agree.
The date on which the last of such deliveries occurs is the "Closing
Date."
(b) When Closing Occurs. The Closing shall not occur unless and
until all of the actions set forth in Sections 3.2 and 3.3 of this
Agreement shall have been taken (or waived); and none of such actions
shall be deemed to have been taken unless and until all of them have
been taken (or waived); but if all such actions are taken or
appropriately waived, then the Closing shall be effective at 12:01 a.m.
(Eastern Time) on the Closing Date.
3.2 Deliveries by Dravo and Sellers. Dravo and Sellers hereby jointly
and severally agree to, and shall, deliver or cause to be delivered the
following to Buyer at the Closing, each of which shall be in form and
substance reasonably satisfactory to Buyer:
(a) General Transfer Instruments. A general bill of sale,
together with such other bills of sale, deeds, endorsements,
assignments and other good and sufficient instruments
<PAGE> -17-
of conveyance as are reasonably requested by Buyer to convey to and
vest in Buyer all title to and rights and interest in the Purchased
Assets in accordance with the terms of this Agreement, duly executed
by Sellers, together with releases or termination statements of all
Liens on such property not permitted by this Agreement.
(b) Assignments of Leases. An assignment and assumption
instrument for each Lease, duly executed in recordable form by the
appropriate Seller (collectively, the "Assignments of Leases").
(c) Motor Vehicle Title Certificates. Title certificates,
registrations and other documentation necessary to transfer motor
vehicles, vessels and other certificated assets included in the
Purchased Assets, duly completed in favor of Buyer and duly executed
by the appropriate Seller.
(d) Intellectual Property Assignments. Assignments of
intellectual property included in the Purchased Assets (the
"Intellectual Property Assignments"), duly executed by the
appropriate Seller.
(e) IRC Section 1445 Affidavit. An affidavit from any party or
parties (other than DBR) required pursuant to IRC Section 1445 and
any regulations relating thereto, stating under penalty of perjury (i)
that such party so swearing is not a "Foreign Person," (ii) the U.S.
Taxpayer Identification Number of such party, and (iii) such other
information as may be required by any regulations promulgated in
connection with IRC Section 1445.
(f) Stock Certificates. Stock certificates, together with stock
transfer powers executed in blank, representing any Seller's
ownership interest in DBR and the other investments disclosed, or
required to be disclosed, in Schedule 4.1 to this Agreement.
(g) Compliance Certificates. Each of Dravo and the Sellers
shall have delivered to Buyer (i) a certificate executed by the
Secretary or an Assistant Secretary, dated the Closing Date,
certifying as to its Articles or Certificate of Incorporation, the
Bylaws and the resolutions adopted by its Board of Directors and, if
required, its shareholders, with respect to the transactions
contemplated by this Agreement; and (ii) a certificate executed by an
executive officer on behalf of Dravo or a Seller, as the case may be,
dated the Closing Date, certifying to the best of his or her knowledge
that (A) the representations and warranties of Dravo or a Seller, as
the case may be, contained in this Agreement are true and correct in
all material respects at and as of the Closing, except for
representations and warranties made as of a specified date and (B)
Dravo or a Seller, as the case may be, has performed and complied in
all material respects with all agreements required by this Agreement
to be performed or complied with by it prior to or at the Closing,
including the delivery of all items described in this Section 3.2.
(h) Certificates of Good Standing. A certificate of corporate
good standing with respect to Dravo, DBM, AMC and DBR from the
Secretary of State or other
<PAGE> -18-
appropriate official of the jurisdiction of its incorporation, dated no
earlier than thirty (30) days prior to the Closing Date.
(i) Legal Opinions. The opinion of Buchanan Ingersoll
Professional Corporation, counsel for Dravo and Sellers to the
effect set forth in Exhibit A-1 to this Agreement and the opinion of
Cafferata & Co., special Bahamian counsel for Dravo and Sellers and
counsel for DBR, to the effect set forth in Exhibit A-2 to this
Agreement.
(j) Title Insurance. Title insurance policies (or commitments to
issue title insurance) issued by Commonwealth Land Title Insurance
Company ("Title Company"), insuring Buyer's interest to each parcel of
the Owned Real Property, Leased Real Property and Subsidiary Leased
Real Property designated on Schedule 3.2(j), on the current ALTA Form
(but with the creditor's rights exception removed) in form reasonably
satisfactory to Buyer, together with such additional endorsements
and reinsurance as Buyer may have reasonably requested and legible
copies (to the extent available) of all title exceptions referenced in
such policies or commitments.
(k) Surveys. A current survey of each parcel of Owned Real
Property, Leased Real Property and Subsidiary Leased Real Property
designated on Schedule 3.2(k) to this Agreement prepared in
accordance with applicable ALTA standards (each, a "Survey"),
certified to Buyer and Title Company. Each Survey shall be in a
perimeter only survey unless Buyer shall have specified to the
surveyor directly that an "as built" survey or survey of other scope
will be prepared.
(l) Consents and Estoppel Certificates. Written consents (to
the extent required by the terms thereof) and estoppel certificates
by the parties to all contracts included in the Assumed Liabilities
other than those listed on Schedule 3.2(l), in form and substance
reasonably satisfactory to Buyer.
(m) Noncompetition Agreement. The Noncompetition Agreement,
duly executed by the parties to it other than Buyer.
(n) Distributorship Agreements. The Distributorship
Agreements (as defined in Section 7.13) duly executed by the parties
to them other than Buyer.
(o) Transition Services Agreement The Transition Services
Agreement (as defined in Section 7.14) duly executed by the parties to
it other than Buyer.
(p) Software License. The Software License (as defined in
Section 7.15) duly executed by the parties to it other than Buyer.
(q) Other. Such other documents, instruments, certificates and
opinions as Buyer may reasonably and timely request in order to
document or to consummate more effectively
<PAGE> -19-
the transactions contemplated by this Agreement or in order to
evidence the compliance by Dravo and Sellers with any condition or
obligation in this Agreement.
3.3 Deliveries by Buyer. Buyer shall deliver or cause to be paid or
delivered the following to Dravo and Sellers at the Closing, each of which
shall be in form and substance reasonably satisfactory to Dravo:
(a) Initial Payment. Payment to Sellers of the Initial Payment
to be paid at Closing under Section 2.3, in immediately available funds
pursuant to instructions provided by Dravo to Buyer at least two (2)
business days prior to the Closing. At Dravo's request, Buyer shall
pay directly to Dravo's and Sellers' creditors any amount thereof
specified by Dravo.
(b) Noncompetition Payment. Payment to Dravo, DBM and Dravo
Lime Company, a Delaware corporation and a wholly owned subsidiary
of Dravo, of the amount to be paid at Closing set forth in the
Noncompetition Agreement, in immediately available funds pursuant to
instructions provided by Dravo to Buyer at least two (2) business
days prior to the Closing.
(c) Assumption Instruments. One or more instruments of
assumption duly executed by Buyer evidencing the assumption by it of
the Assumed Liabilities.
(d) Assignments of Leases. The Assignments of Leases duly
executed by Buyer.
(e) Compliance Certificates. Buyer shall have delivered to
Dravo and Sellers: (i) a certificate executed by the Secretary or
Assistant Secretary, dated the Closing Date, certifying as to the
Articles of Incorporation of Buyer, the Bylaws of Buyer and the
resolutions adopted by the Board of Directors of Buyer with respect
to the transactions contemplated by this Agreement; and (ii) a
certificate executed by an executive officer on behalf of Buyer,
dated the Closing Date, certifying to the best of his or her knowledge
that (A) the representations and warranties of Buyer contained in
this Agreement are true and correct in all material respects at and
as of the Closing, except (1) to the extent that any such
representation and warranty were made as of a specified date and (2)
where the failure to be true, considered in the aggregate, would not
have a material adverse effect on Buyer's ability to perform its
obligations under this Agreement and to consummate the transactions
contemplated hereby, and (B) Buyer has performed and complied in all
material respects with all agreements required by this Agreement to
be performed or complied with by it prior to or at the Closing,
including the delivery of all items described in Section 3.3.
(f) Certificate of Good Standing. A certificate of corporate
good standing with respect to Buyer from the Secretary of State of
North Carolina, dated no earlier than thirty (30) days prior to the
Closing Date.
<PAGE> -20-
(g) Legal Opinions. The opinion of Sutherland, Asbill & Brennan,
counsel for Buyer, to the effect set forth in Exhibit B-1 to this
Agreement and the opinion of DuPuch & Turnquest & Co., special
Bahamian counsel for Buyer, to the effect set forth in Exhibit B-2 to
this Agreement.
(h) Noncompetition Agreement. The Noncompetition Agreement
duly executed by Buyer.
(i) Distributorship Agreements. The Distributorship
Agreements duly executed by Buyer.
(j) Transition Services Agreement. The Transition Services
Agreement duly executed by Buyer.
(k) Software License. The Software License duly executed
Buyer.
(l) Other. Such other documents, instruments, certificates and
opinions as Dravo may reasonably and timely request in order to
document or to consummate more effectively the transactions
contemplated by this Agreement or in order to evidence the compliance
by Buyer with any condition or obligation in this Agreement.
3.4 Post-Closing Actions.
(a) Delivery of Possession. Dravo and Sellers shall take all
actions necessary or appropriate to provide Buyer with possession of
the Purchased Assets, the Subsidiary Assets and the Business
immediately following the Closing.
(b) Employment Security Clearances. Dravo and Sellers shall
provide Buyer, as soon as possible after Closing, with a certificate
or other appropriate clearance letter, dated no earlier than the
Closing Date, from the employment security agency or other state
authority responsible for employment security taxes of each state in
which the Business is required to file wage reports or pay
unemployment tax, if the employment security laws of such state
require the Buyer to withhold a portion of the Purchase Price until
evidence that all such taxes (including interest and penalties) due
from Dravo or any Seller have been paid and if the employment
security agency or other state authority provides such a certificate
or letter.
(c) Tax Clearances. Dravo and Sellers shall provide Buyer, as
soon as possible after Closing, with a certificate or other
appropriate clearance letter, dated no earlier than the Closing Date,
from the income tax authority and/or the sales and use tax authority
of each state in which the Business is required to file income and/or
sales and use taxes returns, if the income and/or sales and use tax
laws of such state require the Buyer to withhold a portion of the
Purchase Price until evidence that all such taxes (including
<PAGE> -21-
interest and penalties) due from Dravo or any Seller have been paid
and if such state tax authority provides such a certificate or letter.
(d) Closing Balance Sheet and Statement of Closing Value.
Dravo and Sellers shall provide Buyer with the Closing Balance Sheet
described in Section 2.4(a) and the report required pursuant to
Section 2.4(b) within the time periods specified in Section 2.4(a) and
Section 2.4(b), respectively.
(e) Closing Date Aged Accounts Receivable Listing. Dravo and
Sellers shall provide Buyer as soon as possible after the Closing (but
in no event later than five (5) business days after the Closing Date)
with an aged accounts receivable listing as of the Closing Date with
respect to the Receivables, the accounts receivable of DBR, whether
billed or unbilled, outstanding as of the Closing Date arising out of
the sale of DBR's products (the "DBR Receivables") and the accounts
receivable of LDC, whether billed or unbilled, outstanding as of the
Closing Date arising out of the sale of LDC's products (the "LDC
Receivables").
3.5 Further Assurances.
(a) General. Sellers will from time to time after the Closing,
deliver to Buyer, such further deeds, bills of sale and assignments,
documents of title and other instruments necessary or desirable, in
the reasonable opinion of Buyer, to perfect or clarify the transfers
of the Purchased Assets to Buyer and the other transactions
contemplated by this Agreement. Buyer shall from time to time after
the Closing, deliver to Sellers such further instruments of
assumption or other documents as may be necessary or desirable, in
the reasonable opinion of Dravo, to perfect or clarify Buyer's
assumption of the Assumed Liabilities.
(b) Certain Other Matters. To the extent that any of the
contracts, leases, permits, approvals, licenses or other rights (for
purposes of this subsection (b), "Special Agreements and Rights") that
this Agreement contemplates are to be assigned to Buyer are not
assignable without the consent of another party, then neither this
Agreement nor any agreement, document or instrument delivered
pursuant to this Agreement shall constitute an assignment or an
attempted assignment of such Special Agreements and Rights if such
consent is not obtained. If such consent shall not be obtained, Dravo
and Sellers agree to cooperate with Buyer in any reasonable
arrangement designed to provide for Buyer the benefits under any
such Special Agreements and Rights, including purchasing under
outstanding purchase orders and reselling to Buyer at invoice price
(without any charge for such services) or exercising rights with
respect to Purchased Assets or Assumed Liabilities (whether under
agreements which provide for indemnification with parties from whom
Sellers acquired such rights or otherwise).
(c) Mail; Endorsements. Each of Dravo and the Sellers hereby
authorizes Buyer from and after the Closing Date to receive and open
all mail and other communications
<PAGE> -22-
addressed to Dravo or a Seller received by Buyer, and to act with
respect to such mail and communications in such manner as Buyer may
elect if such mail or communications relate to the Purchased Assets,
the Assumed Liabilities or the Business or, if such mail or
communications do not so relate, to deliver the same promptly to the
addressee. Each of Dravo and the Sellers hereby authorizes Buyer
from and after the Closing Date to endorse without recourse the name
of Dravo or any Seller on any check or other evidence of
indebtedness received by Buyer on account of any Receivable or
other asset or right included in the Purchased Assets. Each of Dravo
and the Sellers shall promptly deliver to Buyer the original of any
mail or other communication received by it after the Closing Date
pertaining to the Purchased Assets, the Assumed Liabilities or the
Business, and any moneys, checks or other instruments of payment to
which Buyer is entitled.
3.6 Post-Closing Assistance. From time to time after the Closing, each
party shall cause its appropriate employees and representatives
(including, in the case of Dravo and Sellers, representatives of KPMG Peat
Marwick) (i) to provide a requesting party with information and data
(including work papers) reasonably requested by such party which is
necessary or useful to the requesting party in connection with its current
or former operation of the Business, including personnel and employee
benefit records, or to prepare all accounting and related reports and all
tax returns with respect to DBR, the Purchased Assets, the Subsidiary
Assets, the Assumed Liabilities or the Business, and (ii) to provide a
requesting party with assistance as may be reasonably requested by such
party in connection with its current or former operation of the Business or
any third party claims or litigation (including any audit or other
examination by any taxing authority or any judicial or administrative
proceedings relating to any party's liability for taxes) with respect to DBR,
the Purchased Assets, the Subsidiary Assets, the Assumed Liabilities or
the Business. The party requesting assistance pursuant to clause (ii)
above shall reimburse the party providing assistance for its reasonable
out-of-pocket expenses actually incurred by employees of the party
providing assistance and all fees and expenses for services performed by
third parties engaged by the party providing assistance at the request of
the requesting party.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF DRAVO AND SELLERS
AS TO THE BUSINESS
Dravo and Sellers hereby jointly and severally represent and warrant
to Buyer on the date of this Agreement as follows:
4.1 Organization and Standing of Dravo and Sellers.
(a) Corporate Existence and Status. Each of Dravo and the
Sellers is a corporation duly incorporated, organized, validly
existing, and in good standing under the laws of the state of its
incorporation. Each of Dravo and the Sellers has all corporate power
and authority necessary to own and operate its properties and
otherwise to conduct its business
<PAGE> -23-
as it is presently conducted and to enter into this Agreement and the
other agreements to be executed and delivered by it pursuant to this
Agreement and to perform its obligations hereunder and thereunder.
(b) Subsidiaries. Schedule 4.1 to this Agreement lists all
Subsidiaries of Dravo (other than Sellers) the ownership interests of
which are included in the Purchased Assets or whose activities are
included in the Business.
(c) Qualification. Schedule 4.1 to this Agreement lists the
jurisdictions in which any Seller is qualified to do business as a
foreign corporation, and nothing (including the nature of the
business conducted by such Seller, the manner in which such Seller
conducts the Business, the character or location of the properties
which such Seller owns, leases or uses, or the actions or location of
its employees or agents) either requires it to be qualified in any
other jurisdiction or subjects it to any cost, restriction or penalty
for failing to qualify (including assessment of taxes, fees or
penalties for prior periods) or has so required or subjected it.
(d) Ownership Interests. Schedule 4.1 to this Agreement lists:
(i) all capital stock, other ownership interests in, and other
securities of, any person (including securities and other rights
convertible into such) as to which any Seller has any right, title or
interest (other than Subsidiaries) that are included in the Purchased
Assets or whose activities are included in the Business; and (ii) all
loans, advances or similar arrangements by any Seller to any other
person (other than terms extended to customers in the ordinary
course of business).
(e) Authority. The execution and delivery of this Agreement
and the other agreements to be executed and delivered by each of
Dravo and the Sellers pursuant to this Agreement and the
consummation by each of Dravo and the Sellers of the transactions
contemplated by, and other compliance with or performance under,
them have been duly authorized by all necessary action on the part of
each of Dravo and the Sellers, its board of directors and, with
respect to each of the Sellers, its shareholder in compliance with
Applicable Law.
4.2 No Violation. The execution and delivery by each of Dravo and
the Sellers of this Agreement and the other agreements to be executed and
delivered by each of Dravo and the Sellers pursuant to this Agreement and
the consummation by each of Dravo and the Sellers of the transactions
contemplated hereby and thereby do not and will not (i) violate or conflict
with any provision of the Articles or Certificate of Incorporation or
Bylaws of Dravo or such Seller, (ii) violate or conflict with, or result (with
the giving of notice or lapse of time or both) in a violation of or constitute
a default (or give rise to any right of termination, cancellation or
acceleration) under any of the terms, conditions or provisions of any note,
license, agreement (including the Leases and other Contracts) or other
instrument or obligation (including Assumed Liabilities) to which Dravo or a
Seller is a party or by which any of its assets (including the Purchased
Assets) may be bound, except for such violations or defaults (or rights of
termination, cancellation or
<PAGE> -24-
acceleration) as to which requisite waivers or consents have been obtained,
or (iii) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Dravo or any Seller, or any of its assets (including
the Purchased Assets).
4.3 Enforceability. This Agreement and the agreements and
instruments contemplated by this Agreement to which Dravo or a Seller is a
party or a signatory constitute the legal, valid and binding obligation of
each of Dravo and any Seller a party thereto, and are enforceable in
accordance with their terms. The transfer documents executed and
delivered by a Seller pursuant to this Agreement effectively convey to,
and vest in, Buyer the full right, title and interest of such Seller in and to
the Purchased Assets and the Business.
4.4 Liabilities and Liens. Except as set forth on Schedule 4.4
attached hereto, none of the Purchased Assets (excluding the Owned Real
Property and the Leased Real Property) is subject to any liabilities or
Liens of any nature, whether accrued, absolute, contingent, or otherwise,
or arising out of transactions entered into, or any state of facts existing
prior to the date of this Agreement, including tax liabilities or special
assessments. It is the intent of the parties that the representations and
warranties set out in Section 4.7(e) shall govern as to the Owned Real
Property and the Leased Real Property.
4.5 Absence of Certain Changes. Except as set forth on Schedule 4.5
attached hereto, since December 31, 1993, there has not been (i) any change
in the Business, the Purchased Assets or the Assumed Liabilities other
than changes in the ordinary course of business or changes directly
attributable to general economic conditions or conditions affecting the
aggregates industry generally, none of which has been materially adverse;
(ii) any sale or granting to any party or parties of any license, franchise,
option or other right of any nature whatsoever to sell, distribute or
otherwise deal in or with products or services of the Business; (iii) any
waiver, compromise or other settlement by Dravo or a Seller of any of its
rights under any Assumed Liability other than in the ordinary course of
business so long as such waiver, compromise or settlement does not
materially increase the burden of any Seller under such Assumed Liability;
or (iv) any other event or condition of any character which, individually or
in the aggregate, materially and adversely affects the Purchased Assets,
the Assumed Liabilities or the financial condition, results of operations or
prospects of the Business.
4.6 Financial Matters.
(a) Financial Statements. Dravo and Sellers have delivered to
Buyer true and complete copies of (i) the audited consolidated balance
sheets of DBM as of December 31, 1992 and 1993, the related audited
consolidated statements of operations, shareholder's equity and
changes in cash flows for the years then ended, and the notes to
such financial statements, prepared by Dravo and audited by KPMG
Peat Marwick, certified public accountants, whose report (and all
supplemental information and other materials included with the audit
report) is included; and (ii) the unaudited consolidated balance sheet
of DBM as of September 30, 1994 and the related unaudited
consolidated statements of operations, shareholder's equity and
changes in cash flows for the nine-month period then ended
<PAGE> -25
prepared by Dravo. The financial statements described in the
preceding sentence, including the notes to them, are collectively
referred to in this Agreement as the "Financial Statements." The
Financial Statements relating to December 31, 1993 and the twelve-
month period then ended are referred to as the "1993 Financial
Statements", and those relating to September 30, 1994 and the nine-
month period then ended are referred to as the "Interim Financial
Statements." The Financial Statements are in accordance with the
books and records of DBM and have been prepared in accordance with
GAAP consistently applied throughout the periods covered by such
statements and fairly present the consolidated financial condition
and results of operations of the Business as of the dates or periods
thereof. The reserves on the Financial Statements are calculated
consistent with past practice, and the auditors for the 1993 Financial
Statements did not propose to DBM any reserve or other adjustment
that was not reflected in the 1993 Financial Statements.
(b) Sales of Products. Dravo and Sellers have previously
delivered to Buyer reports showing by product type (to the extent
available) and facility, the number of tons of each such product sold
from such facility during each period covered by the Financial
Statements and the current fiscal year through October 31, 1994 and
the amount of gross sales resulting from such sales in each of such
periods.
(c) Capitalized Leases. Schedule 4.6(c) lists all lease
agreements included in the Purchased Assets which are capital
leases in accordance with GAAP, and such leases are recorded as
capital leases on the Financial Statements.
(d) Accounts Receivable. The accounts receivable of Sellers as
reflected in the Financial Statements and the accounts receivable
reflected on Sellers' books that are included in the Purchased
Assets: (i) are valid and, to the extent uncollected, fully collectible
(except for reserves set forth on the Financial Statements and the
reserve that will be established in determining the Closing Value)
without resort to legal proceedings or the use of collection agencies;
(ii) represent monies due for goods sold and delivered or services
rendered; and (iii) are subject to no refunds or other adjustments or
to any defenses, rights of set-off, assignments, restrictions,
security interests, encumbrances or conditions enforceable by third
parties on or affecting any of them.
(e) Inventories. The inventories reflected in the Financial
Statements and in Sellers' books that are included in the Purchased
Assets are determined and valued in accordance with GAAP applied on
a consistent basis as reflected in the Financial Statements at the
lower of average production cost or market. Except as set forth in
Schedule 4.6(e): (i) each type of Sellers' inventories (whether raw
materials, work in process, finished goods or other inventory) is of a
quality usable or salable in the ordinary course of business and is
of a quantity sufficient for the conduct of the Business in the
ordinary course; (ii) the finished goods inventories of each Seller
consist of items which are good and merchantable (as defined in UCC
Section 2-314); (iii) no previously sold inventory is subject to refunds
materially in excess of that historically experienced by Sellers; (iv)
except for inventory in barges, trucks, rail cars or otherwise in
transit, all inventories of
<PAGE> -26-
Sellers are located on the Owned Real Property or the Leased Real
Property; and (v) there is no pending investigation or regulatory
action by any Governmental Authority involving any of the Sellers'
inventories. All specification material conforms to all applicable
specifications or standards.
(f) Projections. The projections relating to the Business for
the five-year period ending December 31, 1999, included in the
Descriptive Memorandum dated April 1994 prepared by Lehman Brothers
Inc. with respect to the sale of Dravo, as such projections were
updated by Dravo on June 9, 1994 and delivered to Buyer (as so
updated and delivered, the "Projections"), are Dravo management's
latest projections for the Business for such period and, to the
knowledge of any Vice President or more senior officer of Dravo or
any Seller, no event or condition has occurred or failed to occur
which would cause Dravo to modify the Projections in a material way.
4.7 Properties.
(a) Owned Properties. Schedule 2.2(a) sets forth all real
property in which any Seller holds legal or equitable title and which
is used by it in the conduct of the Business. Schedule 2.2(d) (i) lists
substantially all items of depreciable plant and equipment having an
original cost in excess of $10,000 which are owned and used by any
Seller in the conduct of the Business (other than the Excluded
Assets), (ii) lists all titled motor vehicles and trailers which are
owned and used by any Seller in the conduct of the Business (other
than the Excluded Assets), and (iii) contains a summarized description
of all other tangible property that constitutes part of the Purchased
Assets which are owned and used by any Seller in the conduct of the
Business (other than the Excluded Assets).
(b) Leased Properties. Schedule 2.2(b) sets forth all real
property that any Seller leases or subleases, or in which any Seller
has any other interest (other than the Excluded Assets or those set
forth in Schedule 2.2(a)), and which is used by any Seller in the
conduct of the Business. Schedule 2.2(g) sets forth a complete and
accurate description of all personal property leased or subleased by
any Seller (other than set forth in Schedule 2.2(d)) that is used by
such Seller in the conduct of the Business (other than the Excluded
Assets).
(c) Contract and Option Properties. Except as set forth on
Schedule 2.2(c), neither Dravo nor any Seller has a future right to
acquire or lease pursuant to any outstanding contract or option to
purchase or lease (other than renewal or extension rights in Leases)
any real property that may be used or useful in the Business and is
located within the current operating area of the Business.
(d) Necessary Properties. Except for the Excluded Assets and
the properties described on Schedule 4.5, all properties, assets and
mineral reserves occupied by, used in or necessary to the conduct of
the Business are included in the Purchased Assets (or are included in
the Subsidiary Assets) and are being sold, transferred, assigned and
conveyed by Sellers to Buyer pursuant to this Agreement. Buyer's
ability to use the Purchased
<PAGE> -27-
Assets in the conduct of the Business will not be prohibited or
otherwise impaired by the consummation of the transactions
contemplated in this Agreement.
(e) Title.
(i) Each of the Sellers has, and will convey to Buyer at
Closing, good and marketable fee simple title to the Owned Real
Property owned by it and mineral reserves located thereon,
including all existing rights of access to public highways
adjacent thereto. Except for the items set forth or described on
Schedule 4.7(e) (the "Permitted Liens"), there are no (i) Liens on
the Owned Real Property except for easements, covenants,
reservations and restrictions of record that do not adversely
affect the current or planned future use for mining and
processing or marketability of the Owned Real Property or (ii)
leases, instruments or other contracts granting any interest in
the Owned Real Property.
(ii) Except as disclosed on Schedule 4.7(e), each of the
Sellers has, and will convey and transfer to Buyer at Closing,
the sole, unencumbered and undisturbed right to possess and use
the Leased Real Property leased by it, including all existing
rights of access to public highways adjacent thereto, subject to
the terms and provisions of the Leases described in Schedule
2.2(b) with respect to the Leased Real Property.
(iii) Each of the Sellers has, and will convey and transfer
to Buyer at Closing, good title to all personal property included
in the Purchased Assets owned by it, subject to no Liens.
(iv) Each of the Sellers has, and will convey and transfer
to Buyer at Closing, the sole, unencumbered and undisturbed
right to possess and use the personal property subject to any
leases or other agreements described in Schedule 2.2(g) to which
it is a party, subject to the terms and provisions of such leases
or other agreements.
(v) Except as disclosed on Schedule 4.7(e), no person is
encroaching upon any of the Owned Real Property or the Leased
Real Property, and none of the activities of any Seller on the
Owned Real Property or the Leased Real Property is encroaching
upon the property of others or easements or rights of way in
favor of others.
(vi) Except as disclosed on Schedule 4.7(e), none of the
Owned Real Property or the Leased Real Property is located
within the boundaries of any designated historical or
archaeological district or similar district or area, none of the
improvements located on any of such properties is designated as
a landmark or as having historical or archaeological significance
(or is qualified or eligible for any
<PAGE> -28-
such designation). To the knowledge of Dravo or any Seller, none
of the Owned Real Property or the Leased Real Property contains
any historic or archaeologic site.
(vii) Neither Dravo nor any Seller has received or has
knowledge of, or reason to know of any, pending or contemplated
condemnation or eminent domain proceeding affecting of any the
Owned Real Property or the Leased Real Property.
(f) Operating Condition. Buyer has examined the Purchased
Assets and, notwithstanding anything in this Agreement to the
contrary, Buyer is accepting the structures, improvements, buildings,
facilities, fixtures, machinery, equipment and vehicles included in
the Purchased Assets in an "as is" operating condition at the Closing
Date; provided, however, that substantially all the machinery,
equipment and vehicles included in the Purchased Assets have been
maintained in accordance with the Sellers' generally applicable
maintenance policies and procedures, which are intended to enable
Sellers to operate such machinery, equipment and vehicles for the
duration of their useful lives. EXCEPT AS EXPRESSLY PROVIDED IN THIS
AGREEMENT, NEITHER DRAVO NOR ANY SELLER MAKES ANY WARRANTY AS TO
THE VALUE, CONDITION OR FITNESS FOR USE OF SUCH PURCHASED ASSETS,
WHETHER EXPRESSED OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
(g) Reserves. Dravo and Sellers have made available to Buyer
all written information in their possession regarding aggregates
reserves on the Owned Real Property and the Leased Real Property.
Notwithstanding any other provision of this Agreement to the
contrary, neither Dravo nor any Seller makes any representation
whatsoever as to the quality, quantity, adequacy, merchantability or
mineability of such reserves.
4.8 Contracts.
(a) Customer Orders. Schedule 4.8(a) sets forth as of the date
hereof those contracts and quotations for the sale of products made
by any Seller which have not been performed by such Seller and which:
(i) provide for the purchase of 10,000 tons or more of product; (ii)
provide for a per ton purchase price less than the inventory value of
the product subject to such contract or quotation; (iii) have a fixed
term extending more than twelve (12) months from the date of this
Agreement; or (iv) were not made in the ordinary course of business.
(b) Other Contracts. None of the Sellers has any contract
pertaining to any of the Purchased Assets or the Business other than
(i) the Leases listed in Schedule 2.2(b), (ii) those listed in Schedule
2.2(c), (iii) the Assumed Contracts, including those permitted by
Section 2.2(g) or listed in the Schedule 2.2(g), (iv) the Intellectual
Property Licenses (as defined in Section 4.12) listed in Schedule 4.12,
(v) those included in the Excluded Assets and (vi) contracts and
quotations for the sale of products listed in Schedule 4.8(a) or, if not
required to be so listed, made by a Seller in the ordinary course of
<PAGE> -29-
business, copies of which have been made available to Buyer. Dravo
and Sellers have delivered to Buyer true and accurate copies of all
written Leases and other Contracts (or a written summary of the
terms of any oral Lease or other Contract), together with all
amendments, modifications and supplements thereof and waivers and
consents thereunder. Neither Dravo or any Seller nor, to the
knowledge of Dravo or any Seller, any other party, is in default in
connection with any Lease or other Contract; no act or event has
occurred which, with notice or lapse of time or both, constitutes a
default under any Lease or other Contract with respect to Dravo or
any Seller, or to the knowledge of Dravo or any Seller, any other
party; to Dravo's or any Seller's knowledge there is no basis for any
claim or default under any Lease or other Contract with respect to
Dravo or any Seller or, to the knowledge of Dravo or any Seller, any
other party; there is no outstanding notice of cancellation or
termination in connection with any Lease or other Contract; and each
Lease and other Contract is the valid and binding agreement of any
Seller party thereto and, to the knowledge of Dravo and any Seller, of
each other party thereto, which is in full force and effect in
accordance with its terms and will not be affected by, or, except as
described in Schedule 4.16, require the consent of any other party to,
the transactions contemplated by this Agreement. Solely for Buyer's
information, Schedule 4.8(b) describes certain ongoing, non-binding
relationships between a Seller and third persons that are significant
to such Seller's operation of the Business. Nothing in this Section
4.8 shall be construed so as to require Buyer to assume any contract
not listed on the attached Schedule 2.2(b), Schedule 2.2(c), Schedule
2.2(g) or otherwise assumed pursuant to Section 2.7.
4.9 No Litigation. Except as described on Schedule 4.9, there is no
litigation, action, claim, proceeding or governmental investigation pending
or, to the knowledge of Dravo or any Seller, threatened against Dravo or
any Seller (i) relating to the Business or the Purchased Assets or (ii) which
may affect Dravo's or any Seller's ability to perform its obligations under
this Agreement or under any agreement or instrument contemplated by this
Agreement, and to the knowledge of any Vice President or more senior
officer of Dravo or any Seller, there is no basis for any such action that
could have a material adverse effect on the Purchased Assets, the Assumed
Liabilities or the financial condition or results of operation of the
Business, or, in the reasonable judgment of such officers, the ability of
the Business to achieve the Projections. Schedule 4.9 also describes any
such litigation, action, claim, proceeding or governmental investigation
relating to the Business, the Purchased Assets or the Assumed Liabilities
commenced by (except collection actions commenced and pursued in the
ordinary course of business) or against Dravo or any Seller or settled or
otherwise finally resolved (except collection actions settled or otherwise
resolved in the ordinary course of business) by the parties thereto in the
last three (3) years.
4.10 Operations Conducted Lawfully. Each of Dravo and the Sellers has
conducted its operation of the Business in accordance with all Applicable
Law except for minor, isolated infractions, and neither Dravo nor any
Seller has received any notice for which a writing exists to the contrary;
provided, however, that with respect to notice from persons other than a
Governmental Authority, such notice must have been seen by the General
Counsel of Dravo or a vice president or more senior officer of a Seller.
Neither Dravo nor any Seller is either charged with, in receipt of any
notice or warning of, or to Dravo's or any Sellers' knowledge, under
<PAGE> -30-
investigation with respect to any failure or alleged failure to comply with
any provision of any Applicable Law. Without limiting the foregoing: (i)
except as set forth in Schedule 4.10, each of the Sellers has all licenses,
permits, authorizations and certifications ("Permits") required with respect
to the Business (and all such Permits other than Environmental Permits (as
defined in Section 4.11), which are listed on Schedule 4.11, are listed in
Schedule 4.10 to this Agreement); (ii) all of the Permits are in full force and
effect; and (iii) each of the Sellers is (and has been) in compliance with its
Permits or predecessor Permits; provided, however, that the foregoing shall
not require disclosure of state and local business or similar licenses
required of businesses generally. Notwithstanding the foregoing, neither
Dravo nor any Seller makes any representation or warranty as to
Environmental Laws or Environmental Permits (as those terms are defined in
Section 4.11) in this Section 4.10, it being the intent of the parties that any
representation and warranty as to Environmental Laws and Environmental
Permits be governed by Section 4.11 and Section 5.12.
4.11 Environmental Protection.
(a) Definitions. For purposes of this Agreement the term
"Environmental Laws" shall mean all federal, state, local and foreign
laws (as may be applicable) relating to pollution or protection of the
environment and any regulation, code, plan, order, decree, judgment or
injunction related thereto in effect on or prior to the Closing Date,
including without limitation:
(i) The Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901 ("RCRA").
(ii) The Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 26 U.S.C. Section 4611; 42
U.S.C. Section 9601 ("Superfund").
(iii) The Superfund Amendments and Reauthorization Act of
1986.
(iv) The Clean Air Act, 42 U.S.C. Section 7401.
(v) The Clean Water Act, 33 U.S.C. Section 1251.
(vi) The Safe Drinking Water Act, 42 U.S.C. Section 300f.
(vii) The Toxic Substances Control Act, 15 U.S.C. Section
2601.
(viii) The Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801 et seq.
(ix) Applicable state mining laws.
(x) Any other similar federal, state, local or foreign (as
applicable) Environmental Laws.
<PAGE> -31-
(b) Disclosures of Environmental Permits, Etc. Schedule 4.11(b)
attached hereto contains a true and complete description of:
(i) all current environmental (including mining) licenses,
permits, authorizations, certifications, regulatory plans and
compliance schedules of Dravo and Sellers pertaining to the
Business or the Purchased Assets (the "Environmental Permits"),
together with the expiration and renewal dates thereof;
(ii) all waste dumps and disposal, treatment and storage
sites located on any Owned Real Property or Leased Real
Property known by Dravo or any Seller; and
(iii) all hazardous or toxic (as defined in the
Environmental Laws) waste dumps and disposal, treatment and
storage sites used by any Seller in connection with the
Purchased Assets since December 31, 1988 and the names of the
persons that have been engaged since December 31, 1988 in the
handling, transportation and disposal of hazardous wastes,
hazardous substances or other hazardous or toxic materials for
such Seller.
Dravo and Sellers have delivered to Buyer a true and correct copy of
the Environmental Permits.
(c) Special Environmental Representations and Warranties.
(i) Except as described on Schedule 4.11(c), each of the
Sellers has, with respect to the Purchased Assets, obtained all
permits, kept all records and made all filings required by
applicable Environmental Laws with respect to emissions, past or
present, into the environment (including solids, liquids and
gases) and the proper disposal of such materials (including solid
waste materials) required for the operation of the Business by
such Seller at past or present operating levels.
(ii) Except as described on Schedule 4.11(c), none of the
Purchased Assets has been contaminated with any hazardous
wastes, hazardous substances, or other hazardous or toxic
materials as defined in the Environmental Laws so as to
constitute a violation of any of the Environmental Laws or so to
trigger any corrective or remedial action under the
Environmental Laws. Except as described on Schedule 4.11(c),
there are no transformers, capacitors or other equipment
included in or located on the Purchased Assets (including leased
property) which contain polychlorinated biphenyls ("PCBs").
Except as described in Schedule 4.11(c), no portion of the Owned
Real Property or the Leased Real Property is reasonably
believed by Dravo or any Seller to be a wetland as defined in 33
C.F.R. Section 328.3. Except as disclosed on Schedule 4.11(c),
there are no underground storage tanks located on or under any
Owned Real Property or any Leased Real Property.
<PAGE> -32-
(iii) Except as described on Schedule 4.11(c), each of the
Sellers is in compliance with all Environmental Laws and all
Environmental Permits obtained pursuant thereto except for
minor isolated (in both frequency and location) infractions.
Schedule 4.11(c) describes all citations received by Dravo or any
Seller since December 31, 1991 relating to violations of any
Environmental Laws or Environmental Permits. Except as
described on Schedule 4.11(c), to the knowledge of Dravo or any
Seller, there are no past or present events, conditions,
circumstances or activities, which may interfere with or prevent
continued compliance with the Environmental Laws, or which may
give rise to any common law or legal liability, or otherwise form
the basis of any claim or action, proceeding, hearing, study, or
investigation, based on or related to the manufacture,
processing, use, storage, disposal, or handling, or the release or
threatened release into the environment, of any pollutant,
contaminant, chemical, or industrial, toxic or hazardous
substances or waste (as defined in the Environmental Laws) with
regard to the Purchased Assets. Except as described on
Schedule 4.11(c), there is no pending or, to the knowledge of Dravo
or any Seller, threatened civil or criminal litigation, notice of
violation or administrative proceeding relating in any way to the
Environmental Laws involving the Business or any Seller, and to
the knowledge of any Vice President or more senior officer of
Dravo or any Seller, there is no basis for any such litigation,
notice or proceeding that could have a material adverse effect
on the Purchased Assets, the Assumed Liabilities or the
financial condition or results of operation of the Business, or,
in the reasonable judgment of such officers, the ability of the
Business to achieve the Projections.
4.12 Intellectual Properties. Schedule 4.12 lists all patents, patent
applications, trademarks, service marks, trade names, copyrights, computer
programs and software (excluding commercial word processing, accounting
and financial analysis software for personal computers generally
available in the retail market) owned, licensed, used or useable by any
Seller in the conduct of the Business (collectively, the "Intellectual
Properties"). Except as disclosed in Schedule 4.12, (i) each of the Sellers
owns all right, title and interest in and to, or has the sole or exclusive
right to use all Intellectual Properties and other trade secrets and
confidential information, whether under licenses or other contracts
relating to use or license of technology, know-how or processes (the
"Intellectual Property Licenses"), used or necessary for the ordinary
conduct of its business free and clear of all Liens and all other adverse
rights whatsoever; (ii) neither Dravo nor any Seller is required to make
payments, or provide other benefits, to any person with respect to its
ownership or use of the Intellectual Property except pursuant to the
Intellectual Property Licenses disclosed on Schedule 4.12; (iii) after the
consummation of the transactions contemplated by this Agreement, Buyer
will have the right that each Seller currently has to such Intellectual
Property (other than any Intellectual Property that is an Excluded Asset),
unaltered and unimpaired by such transactions. Schedule 4.12 lists all
Intellectual Property Licenses used or useful in the Business. No claims
have been asserted during the past five (5) years by any person against
the use by any Seller, or challenging or questioning the validity or
effectiveness, of any of the Intellectual Properties, or any, agreement
relating thereto, to which any Seller is a party.
<PAGE> -33-
4.13 Zoning. Except as set forth on Schedule 4.13 to this Agreement:
(i) each of the Sellers is in compliance with all applicable building, zoning,
land use or other similar statutes, laws, ordinances, regulations, permits
or other requirements in respect of the Owned Real Property and the
Leased Real Property and none of the Sellers has received any notice
alleging such a violation; (ii) there are no non-conforming uses, zoning or
building code variances or any other use restrictions (whether written or
oral) or special permits not set forth in the local zoning laws and building
codes with respect to the Owned Real Property or the Leased Real Property;
(iii) any operations on or uses of the Owned Real Property and the Leased
Real Property that constitute nonconforming uses have been conducted with
sufficient continuity so as to preserve the right to continue the existing
operations and uses; and (iv) all reserves located on the Owned Real
Property and the Leased Real Property are within zoning classifications
that will permit the quarrying and processing thereof subject to applicable
setback and other conditions applicable to such zoning classification; and
(v) neither Dravo nor any Seller has received any notice of (A) any pending
or contemplated rezoning proceeding affecting any Owned Real Property or
any Leased Real Property or (B) any pending or contemplated proceedings or
public improvements which could or might result in the levy of any special
tax or assessment against any of the Owned Real Property or Leased Real
Property. Schedule 4.13 sets forth with respect to any of the Owned Real
Property and the Leased Real Property which include a quarry or other
production facilities: (i) the zoning classifications applicable to such
Owned Real Property and Leased Real Property; and (ii) describes all
variances, use restrictions or special permits (whether written or oral)
applicable to such Owned Real Property and Leased Real Property. Dravo
and Sellers have delivered to Buyer all agreements, documents, permits or
other writings, and have described any oral arrangement, pertaining to any
such variance, use restriction or other special permit.
4.14 Taxes. Dravo and Sellers are members of an "affiliated group"
within the meaning of IRC Section 1504(a) (the "Affiliated Group"), and Dravo
is the "common parent" of the Affiliated Group, and during the past ten (10)
years neither Dravo nor any Seller has been a member of any other
affiliated group. Each of the Sellers (or Dravo on behalf of the Affiliated
Group) has (i) properly completed and filed all tax returns required to be
filed by it, and no filing extensions for any such returns are in effect,
and (ii) paid and satisfied on or before its respective due date all Taxes
(whether or not requiring the filing of returns). All Taxes, assessments
and levies which any Seller (or Dravo on behalf of the Affiliated Group) is
or was required by law to withhold or collect with respect to the Business,
including sales, unemployment and payroll taxes, have been duly withheld
and collected and paid over to the proper Governmental Authority or held by
Dravo or a Seller in separate bank accounts for such payment. Except as
set forth in Schedule 4.14, none of the Purchased Assets is (i) "tax-exempt
use property" within the meaning of IRC Section 168(h)(1), (ii) used
predominately outside of the United States within the meaning of Prop. IRS
Reg. Section 1.168-2(g)(5), (iii) "tax-exempt bond financed property" within
the meaning of IRC Section 168(g)(5), or (iv) "limited used property" as that
term is used in Rev. Proc. 76-30. Following the Closing, none of the
Purchased Assets will be property that Buyer will be required to treat as
being owned by any other person pursuant to the provisions of IRC Section
168(f)(8). With respect to assets and properties placed in service on or
before the date of this Agreement that are subject to leases included in
the Purchased Assets, and except as a result of acts, errors or omissions,
including breaches of representations, by the lessor thereunder, each of
such leases
<page -34-
(excluding property sold on installment sales contracts) will be treated as a
"true lease" for federal income tax purposes. Except as set forth on
Schedule 4.14, (i) no audit of any tax return of any Seller or the Affiliated
Group is currently being conducted, and neither Dravo nor any Seller has
received any notice that any Governmental Authority intends to conduct
such an audit and (ii) neither the Affiliated Group nor any Seller has
received any notice of proposed adjustment, notice of deficiency or
assessment from any Governmental Authority with respect to taxes of any
Seller or the Affiliated Group that has not been previously resolved.
4.15 Citations. To the knowledge of either DBM's Vice President of
Engineering or Manager of Safety, there is no (and since December 31, 1991
has not been any) "recognized hazard" (as such term is used under the
Occupational Safety and Health Act of 1970 ("OSHA")) or "significant and
substantial mining safety or health hazard" (as such term is used under the
Mining Safety and Health Act of 1977 ("MSHA")) with respect to any Purchased
Asset, any Assumed Liability or the Business that has not previously been
disclosed in writing to Buyer. Attached hereto as Schedule 4.15 is a true
and complete list of MSHA, OSHA and other health and safety citations
received by Seller since December 31, 1991 relating to the Business or the
Purchased Assets.
4.16 No Consents. Except (i) for the consent of the lessors to the
Leases described in Schedule 2.2(b), (ii) as set forth in Schedule 4.16, or
(iii) for the filings with the Federal Trade Commission (the "FTC") and the
Antitrust Division of the United States Department of Justice (the
"Antitrust Division") under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976 (the "HSR Act"), no consent, approval, order or authorization of,
or registration, declaration or filing with any Governmental Authority or
other person on the part of Dravo or any Seller is required in connection
with the execution or delivery of, or the performance of its obligations
under this Agreement, the agreements to be executed and delivered
pursuant to this Agreement or the consummation of any transaction
contemplated hereby or thereby.
4.17 Labor Relations. Each of the Sellers is (and since December 31,
1990 has been) in compliance with all Applicable Laws respecting employment
and employment practices, terms and conditions of employment and wages and
hours, and has not engaged in any unfair labor or unfair employment
practice. Except as set forth on Schedule 4.17, there is no (and since
December 31, 1990 there has not been any): (i) unlawful employment practice
discrimination charge relating to the Business before the Equal Employment
Opportunity Commission ("EEOC") or any EEOC recognized state "referral
agency" or any foreign Governmental Authority; (ii) unfair labor practice
charge or complaint against Dravo or any Seller before the National Labor
Relations Board ("NLRB") or any foreign Governmental Authority relating to
the Business or (iii) labor strike, dispute, picketing, lockout, union
organizing activity, union jurisdictional dispute, slowdown or stoppage or,
to the knowledge of Dravo or any Seller, threatened against or involving or
affecting the Business. No NLRB representation question exists
respecting any employees of the Business. No grievance or arbitration
proceeding relating to the Business is pending and no written claim
therefore exists. Except as set forth on Schedule 4.17, there is no
collective bargaining agreement relating to the Business which is binding
on Dravo or any Seller.
<PAGE> -35-
4.18 Employee and Fringe Benefit Plans.
(a) Schedule of Plans. Schedule 4.18 to this Agreement lists
each of the following plans that Dravo or any Seller either maintains,
is required to contribute to, or in which it participates and in which
employees of the Business participate or have participated within
the time periods indicated:
(i) within the two-year period preceding the Closing
Date, any employee pension benefit plan ("Pension/Profit-
Sharing Plan") (as such term is defined in the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")),
including any pension, profit-sharing, retirement, thrift or
stock bonus plan;
(ii) within the five-year period preceding the Closing
Date any "multi-employer plan" ("Multi-Employer Plan") (as such
term is defined in ERISA);
(iii) within the two-year period preceding the Closing
Date, any employee welfare benefit plan ("Welfare Plan") (as such
term is defined in ERISA); or
(iv) within the two-year period preceding the Closing
Date, any other compensation, stock option, restricted stock,
fringe benefit or retirement plan, program, policy, understanding
or arrangement of any kind whatsoever, whether formal or
informal, not included in the foregoing and providing for
benefits for, or the welfare of, any or all of the current or
former employees or agents of Dravo or any Seller, their
beneficiaries or dependents, including any group health, life
insurance, retiree medical, bonus, incentive or severance
arrangement;
(all of the foregoing in items (i), (ii), (iii) and (iv) being referred
to as "Employee Plans"). As to each Employee Plan, any part of the assets
or liabilities of which are to be assumed by, transferred or rolled over to
Buyer (a "Transfer Plan"), Dravo has delivered to Buyer (and Schedule 4.18
lists each item delivered) copies of the following: (A) each written Employee
Plan, as amended (including either the original plan or the most recent
restatement and all subsequent amendments); (B) the most recent Internal
Revenue Service ("IRS") determination letter issued with respect to each
Pension/Profit-Sharing Plan; (C) the three most recent annual reports on
the Form 5500 series; (D) each trust agreement, insurance contract or
document setting forth any other funding arrangement, if any, with respect
to each Employee Plan; (E) the most recent ERISA summary plan description
or other summary of plan provisions distributed to participants or
beneficiaries for each Employee Plan; (F) each opinion or ruling from the
IRS, the Department of Labor or the Pension Benefit Guaranty Corporation
("PBGC") concerning any Employee Plan; and (G) each registration statement,
amendment thereto and prospectus relating thereto filed with the
Securities and Exchange Commission or furnished to participants in
connection with any Employee Plan.
<PAGE> -36-
(b) Qualification. Except as set forth in Schedule 4.18, each
Pension/Profit-Sharing Plan: (i) has received a favorable
determination letter from the IRS to the effect that it is qualified
under IRC Sections 401(a) and 501, both as to the original plan and all
restatements or material amendments; (ii) has never been subject to
any assertion by any Governmental Authority that it is not so
qualified; and (iii) has been operated so that it has always been so
qualified.
(c) Contributions. Except as disclosed in Schedule 4.18, Dravo
and each of the Sellers have made full and timely payment of all
amounts required to be contributed under the terms of each Employee
Plan that is a Transfer Plan and Applicable Law, or required to be
paid as expenses under such Employee Plan.
(d) Reporting and Disclosure. Summary plan descriptions and all
other returns, reports, registration statements, prospectuses,
documents, statements and communications which are required to have
been filed, published or disseminated under ERISA or other federal
law and the rules and regulations promulgated by the Department of
Labor under ERISA and the Treasury Department or by the Securities
and Exchange Commission with respect to the Employee Plans have
been so filed, published or disseminated as to any Transfer Plan.
(e) Prohibited Transactions; Terminations; Other Reportable
Events. Except as set forth in Schedule 4.18:
(i) as to any Transfer Plan, neither Dravo, any Seller,
any Employee Plan, any trust or arrangement created under any
of them, nor any trustee, fiduciary, custodian, administrator or
any person or entity holding or controlling assets of any of the
Employee Plans has engaged in any "prohibited transaction" (as
such term is defined in ERISA or the IRC) which could subject any
of the foregoing persons or entities, or any person or entity
dealing with them, to any tax, penalty or other cost or liability
of any kind;
(ii) no termination, whether partial or complete, has
occurred with respect to any Employee Plan that is a Transfer
Plan; and
(iii) no "reportable event" (as such term is defined in
ERISA) (other than a reportable event for which the statutory
notice requirements have been waived by regulation) has
occurred with respect to any Employee Plan that is a Transfer
Plan.
(f) Claims for Benefits. As to any Transfer Plan other than
claims for benefits arising in the ordinary course of the
administration and operation of such Employee Plan, no claims,
investigations or arbitrations are pending or threatened against any
such Employee Plan or against Dravo, any Seller, any trust or
arrangement created under or as part of any such Employee Plan, any
trustee, fiduciary, custodian, administrator or other
<PAGE> -37-
person or entity holding or controlling assets of any such Employee
Plan, and no basis to anticipate any such claim or claims exists.
(g) Other. Dravo and Sellers have fully complied with all of
their obligations under each of the Employee Plans that is a Transfer
Plan and with all provisions of ERISA and any and all other law
applicable to such Employee Plans. No written notice has been
received by Dravo or any Seller of any claim by any participant in
such Employee Plans of any violation of such laws, and to the best
knowledge of Dravo and Sellers, no such claims are pending or
threatened.
(h) Creation of Obligations. Except as set forth in Schedule
4.18, the execution or performance of the transactions contemplated
by this Agreement will not create, accelerate or increase any
obligations under any Employee Plan that is a Transfer Plan,
including any obligation to make a payment that would be nondeductible
under IRC Section 280G or any other IRC provision.
4.19 Brokers. Except for Lehman Bros. Inc., no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of Dravo or any
Seller. Dravo and Sellers are solely responsible for the fees and expenses
of Lehman Bros. Inc.
4.20 Disclosure. No representation or warranty made by Dravo or any
Seller in this Agreement, nor any statement, certificate, schedule, exhibit,
representation, or other instrument furnished or to be furnished to Buyer
by Dravo or any Seller or their representatives pursuant hereto, or in
connection with the transactions contemplated hereby, contains or will
contain any untrue statement of material fact, or to the knowledge of any
Vice President or more senior officer of Dravo or any Seller, after due
inquiry, omits or will omit to state a material fact necessary to make the
statements contained herein or therein not misleading with respect to the
Purchased Assets, the Assumed Liabilities, the Disclosed Liabilities, or the
financial condition or results of operations of the Business, or, in the
reasonable judgment of such officers, the ability of the Business to
achieve the Projections. Without limiting the preceding sentence, to the
knowledge of any Vice President or more senior officer of Dravo or any
Seller, after due inquiry, there is no information concerning any Seller,
the Purchased Assets, the Assumed Liabilities or the Business which has
not heretofore been disclosed to Buyer which information could have a
material adverse effect on the Purchased Assets, the Assumed Liabilities
or the financial condition, results of operations of the Business, or, in the
reasonable judgment of such officers, the ability of the Business to
achieve the Projections.
<PAGE> -38-
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF DRAVO AND SELLERS
AS TO LDC, DBR AND THE SUBSIDIARY ASSETS
Dravo and Sellers hereby jointly and severally represent and warrant
to Buyer on the date of this Agreement as follows:
5.1 Capitalization. The authorized capital of DBR consists solely of
5,000 shares, $1.00 par value, of which five (5) shares are duly authorized,
validly issued and outstanding, fully paid and nonassessable, and free of
preemptive rights, and no shares are held in the treasury of DBR. Neither
Dravo, any Seller nor DBR has any contract to issue or sell any shares of
DBR capital or any securities or obligations convertible into or
exchangeable for, or giving any person any right to subscribe for or
acquire from Dravo, any Seller, or DBR, any shares of DBR's capital, and no
such securities or obligations evidencing any such rights are outstanding.
DBM is the beneficial owner of all of the outstanding shares of DBR, free
and clear of all Liens, which shares are held of record by the individuals
set forth on Schedule 5.1 and are held in trust by such individuals for the
benefit of DBM.
5.2 Organization and Standing of LDC and DBR.
(a) Existence and Status. DBR is a corporation duly
incorporated, organized, validly existing, and in good standing under
the laws of the Commonwealth of the Bahamas. DBR has all corporate
power and authority necessary to own and operate its properties and
otherwise to conduct its business as it is presently conducted. DBM
has delivered or caused to be delivered to Buyer true and accurate
minute books of DBR containing minutes of all meetings or consents in
lieu thereof of the shareholders of DBR, minutes of all the meetings
or consents in lieu thereof of the Board of Directors of DBR, and
minutes of all the meetings or consents in lieu thereof of any
committee of the Board of Directors of DBR. DBM has delivered or
caused to be delivered to Buyer true and accurate copies of the
Articles and Memorandum of Association of DBR, certified by the
Registrar General for the Bahamas and such Articles and Memorandum
of Association have not been changed, amended or modified since
September 22, 1988. LDC is a duly organized and validly existing
general partnership under the laws of the State of Louisiana, is not
subject to any proceeding for the liquidation or dissolution thereof
and has the power and authority necessary to own and operate its
properties and otherwise to conduct its business as it is presently
conducted. Dravo and Sellers have delivered or caused to be
delivered to Buyer true and accurate copies of the current joint
venture agreement of LDC.
(b) Subsidiaries. Schedule 5.2 to this Agreement lists all
Subsidiaries of each of LDC and DBR.
(c) Qualification. Schedule 5.2 to this Agreement lists the
jurisdictions in which either LDC or DBR is qualified to do business
as a foreign partnership or foreign
<PAGE> -39-
corporation, as the case may be, and nothing (including the nature of
the business conducted by LDC or DBR, the manner in which LDC or DBR
conducts its business, the character or location of the properties
which LDC or DBR leases or uses, or the actions or location of its
employees or agents) either requires it to be qualified in any other
jurisdiction or subjects it to any cost, restriction or penalty for
failing to qualify (including assessment of taxes, fees or penalties
for prior periods) or has so required or subjected either of them.
(d) Ownership Interests. Schedule 5.2 to this Agreement lists:
(i) all capital stock, other ownership interests in, and other
securities of, any person (including securities and other rights
convertible into such) as to which either LDC or DBR has any right,
title or interest (other than Subsidiaries); and (ii) all loans,
advances, guarantees or similar arrangements by either LDC or DBR to
any other person or entity (other than terms extended to customers in
the ordinary course of business).
5.3 No Violation. The execution and delivery by each of Dravo and
Sellers of this Agreement and the other agreements to be executed and
delivered by each of Dravo and Sellers pursuant to this Agreement and the
consummation by each of Dravo and Sellers of the transactions
contemplated hereby and thereby do not and will not (i) violate or conflict
with any provision of the Articles and Memorandum of Association, joint
venture agreement or other organizational documents of either LDC or DBR,
(ii) violate or conflict with, or result (with the giving of notice or lapse of
time or both) in a violation of or constitute a default (or give rise to any
right of termination, cancellation or acceleration) under any of the terms,
conditions or provisions of any note, license, contract or other instrument
or obligation to which either LDC or DBR is a party or by which any of the
Subsidiary Assets may be bound, except for such violations or defaults (or
rights of termination, cancellation or acceleration) as to which requisite
waivers or consents have been obtained, or (iii) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to LDC or DBR, or
any of the Subsidiary Assets.
5.4 Liabilities and Liens. Except as set forth on Schedule 5.4
attached hereto, none of the Subsidiary Assets (excluding the Subsidiary
Leased Real Property (as defined in Section 5.8(b)) is subject to any
liabilities or Liens of any nature, whether accrued, absolute, contingent,
or otherwise, or arising out of transactions entered into, or any state of
facts existing prior to the date of this Agreement, including tax liabilities
or special assessments. It is the intent of the parties that the
representations and warranties set out in Section 5.8 shall govern as to
the Subsidiary Leased Real Property.
5.5 Absence of Certain Changes. Except as set forth on Schedule 5.5
attached hereto, since December 31, 1993, there has not been (i) any change
in the business of LDC or DBR or the Subsidiary Assets other than changes
in the ordinary course of business or changes directly attributable to
general economic conditions or conditions affecting the aggregates
industry generally, none of which has been materially adverse; (ii) any sale
or granting to any party or parties of any license, franchise, option or
other right of any nature whatsoever to sell, distribute or otherwise deal
in or with products or services of the business of LDC or DBR; (iii) any
waiver,
<PAGE> -40-
compromise or other settlement by either of LDC or DBR of any of its rights
under any Subsidiary Asset or contract other than in the ordinary course
of business so long as such waiver, compromise or settlement does not
materially increase the burden of LDC or DBR under any such Subsidiary
Asset or contract; or (iv) any other event or condition of any character
which, individually or in the aggregate, materially and adversely affects
the Subsidiary Assets or the financial condition, results of operations or
prospects of LDC or DBR.
5.6 Absence of Undisclosed Liabilities. Except as set forth in the
balance sheet as of September 30, 1994 of LDC or DBR, as the case may be,
and except for items disclosed in Schedule 5.6 to this Agreement, neither
LDC nor DBR: (i) had any debts, liabilities or obligations of any kind,
whether accrued, absolute, contingent or otherwise and whether due or to
become due which would have been required to be disclosed on a balance
sheet prepared in accordance with GAAP consistently applied; or (ii) has
incurred since September 30, 1994 any such debts, liabilities or obligations
other than debts, liabilities or obligations incurred in the ordinary and
usual course of business consistent with past practice and, in the case of
DBR, which will be accrued on the Closing Balance Sheet and included in the
adjustment set forth in Section 2.3(b) or, in the case of LDC will be included
in determining DBM's equity in LDC as set forth in the Closing Balance
Sheet. DBR has fully performed its obligation to pay the sum of $4,000,000
to The Grand Bahama Port Authority Limited pursuant to that certain
Agreement dated August 15, 1990 among The Grand Bahama Port Authority
Limited, DBR and Bahama Cement Company.
5.7 Financial Matters.
(a) Financial Statements. Dravo and Sellers have delivered to
Buyer true and complete copies of (i) the audited balance sheets of
LDC as of December 31, 1992 and 1993, the related statements of
operations, changes in partners' capital accounts and changes in
cash flow for the years then ended, and the notes to such financial
statements, prepared by Dravo and audited by KPMG Peat Marwick,
certified public accountants, whose report (and all supplemental
information and other materials included with the audit report) is
included; (ii) the unaudited balance sheets of DBR as of December 31,
1992 and 1993, the related statements of operations, shareholder's
equity and changes in cash flow for the years then ended, and the
notes to such financial statements, prepared by Dravo and included in
the audited consolidated financial statements of DBM for such years;
and (iii) the unaudited balance sheet of each of LDC and DBR as of
September 30, 1994 and the related unaudited statements of
operations, shareholder's equity, changes in partners' capital
accounts and changes in cash flows for the nine-month period then
ended prepared by Dravo. The financial statements described in the
preceding sentence, including the notes to them, are collectively
referred to in this Agreement as the "Subsidiary Financial
Statements." The Subsidiary Financial Statements relating to
December 31, 1993 and the twelve-month period then ended are
referred to as the "1993 Subsidiary Financial Statements," and those
relating to September 30, 1994 and the nine-month period then ended
are referred to as the "Subsidiary Interim Financial Statements."
Except as disclosed in Schedule 5.7(a), the Subsidiary Financial
Statements are in accordance with the books and records of LDC and
DBR, as the case may be, and have been prepared in accordance
<PAGE> -41-
with GAAP consistently applied throughout the periods covered by
such statements and, fairly present their respective consolidated
financial condition and results of operations as of the date or
periods thereof. The reserves on the Subsidiary Financial
Statements are calculated consistent with past practice, and the
auditors for the 1993 Subsidiary Financial Statements did not propose
any reserve or other adjustment that was not reflected in the 1993
Subsidiary Financial Statements.
(b) Sales of Products. Dravo and Sellers have previously
delivered to Buyer reports showing by product type (to the extent
available) and facility, the number of tons of each such product sold
from such facility during each period covered by the Subsidiary
Financial Statements and the current fiscal year through October 31,
1994 and the amount of gross sales resulting from such sales in each
such period.
(c) Capitalized Leases. Schedule 5.7(c) lists all lease
agreements included in the Subsidiary Assets which are capital
leases in accordance with GAAP, and such leases are recorded as
capital leases in the Subsidiary Financial Statements.
(d) Accounts Receivable. The accounts receivable of LDC and
DBR as reflected in the Subsidiary Financial Statements and the
accounts receivable reflected on LDC's and DBR's books that are
included in the Subsidiary Assets: (i) are valid and, to the extent
uncollected, fully collectible (except for reserves set forth on the
Subsidiary Financial Statements and, in the case of DBR, the reserve
that will be established in determining the Closing Value, or in the
case of LDC, the reserve established on its balance sheet as of the
Closing Date) without resort to legal proceedings or the use of
collection agencies; (ii) represent monies due for goods sold and
delivered or services rendered; and (iii) are subject to no refunds or
other adjustments or to any defenses, rights of set-off,
assignments, restrictions, security interests, encumbrances or
conditions enforceable by third parties on or affecting any of them.
(e) Inventories. The inventories reflected in the Subsidiary
Financial Statements and in LDC's or DBR's book that are included in
the Subsidiary Assets are determined and valued in accordance with
GAAP applied on a consistent basis as reflected in the Subsidiary
Financial Statements at the lower of average production cost or
market. Except as set forth in Schedule 5.7(e): (i) each type of LDC's
or DBR's inventories (whether raw materials, work in process, finished
goods or other inventory) are of a quality usable or salable in LDC's
or DBR's ordinary course of business and is of a quantity sufficient
for the conduct of LDC's or DBR's ordinary course of business; (ii) the
finished goods inventories of LDC or DBR consist of items which are
good and merchantable (as defined in UCC Section 2-314); (iii) no
previously sold inventory is subject to refunds materially in excess
of that historically experienced by LDC or DBR; (iv) except for
inventory in ships, barges, trucks, rail cars or otherwise in transit,
all inventories of LDC or DBR are located on the Subsidiary Leased
Real Property; and (v) there is no pending investigation or regulatory
action by any Governmental Authority involving any of LDC's or DBR's
inventories. All specification material conforms to all applicable
specifications or standards.
<PAGE> -42-
5.8 Properties.
(a) Owned Properties. Neither LDC nor DBR holds legal or
equitable title in any real property. Schedule 5.8(a) (i) lists
substantially all items of depreciable plant and equipment having an
original cost in excess of $10,000 which are owned and used by LDC or
DBR, (ii) lists all titled motor vehicles and trailers which are owned by
LDC or DBR, and (iii) contains a summarized description of all other
tangible property that constitutes part of the Subsidiary Assets
which are owned by LDC or DBR.
(b) Leased Properties. Schedule 5.8(b) sets forth all real
property that either LDC or DBR leases or subleases (the "Subsidiary
Leased Real Property"), or in which either of LDC or DBR has any other
interest. Schedule 5.8(b) also lists each lease or other agreement (a
"Subsidiary Lease") pursuant to which either LDC or DBR leases any
Subsidiary Leased Real Property. Schedule 5.8(b) sets forth a
complete and accurate description of all personal property leased or
subleased by LDC or DBR.
(c) Contract and Option Properties. Except as set forth on
Schedule 5.8(c), neither LDC nor DBR has a future right to acquire or
lease any real property pursuant to any outstanding contract or
option to purchase or lease (other than renewal or extension rights
in any existing Subsidiary Leases).
(d) Necessary Properties. All properties, assets and mineral
reserves occupied by, used in or necessary to the conduct of LDC's or
DBR's business are included in the Subsidiary Assets. Neither LDC's
nor DBR's ability to use the Subsidiary Assets will be prohibited or
otherwise impaired by the consummation of the transactions
contemplated in this Agreement.
(e) Title.
(i) Except as disclosed on Schedule 5.8(e), each of LDC
and DBR has, the sole, unencumbered and undisturbed right to
possess and use the Subsidiary Leased Real Property leased by
it, including all existing rights of access to public highways
adjacent thereto, subject to the terms and provisions of the
Subsidiary Leases listed in Schedule 5.8(b).
(ii) Each of LDC and DBR has good title to all personal
property owned by it included in the Subsidiary Assets, subject
to no Liens.
(iii) Each of LDC and DBR has the sole, unencumbered and
undisturbed right to possess and use the personal property
subject to any lease or other agreement included in the
Subsidiary Assets to which it is a party, subject to the terms and
provisions of such leases or other agreements.
<PAGE> -43-
(iv) No person is encroaching upon any of the Subsidiary
Leased Real Property, and none of the activities of LDC or DBR
on the Subsidiary Leased Real Property is encroaching upon the
property of others or easements or rights of way in favor of
others.
(v) None of the Subsidiary Leased Real Property is
located within the boundaries of any designated historical or
archaeological district or similar district or area, none of the
improvements located on any of such Subsidiary Leased Real
Property is designated as a landmark or as having historical or
archaeological significance (or is qualified or eligible for any
such designation). To the knowledge of Dravo, any Seller, LDC or
DBR, none of the Subsidiary Leased Real Property contains any
historic or archaeologic site.
(vi) Neither Dravo, any Seller, LDC nor DBR has received
or has knowledge of, or reason to know of any, pending or
contemplated condemnation or eminent domain proceeding
affecting any of the Subsidiary Leased Real Property.
(f) Operating Condition. Buyer has examined the Subsidiary
Assets and, notwithstanding anything in this Agreement to the
contrary, Buyer is accepting the structures, improvements, buildings,
facilities, fixtures, machinery, equipment and vehicles included in
the Subsidiary Assets in an "as is" operating condition at the Closing
Date; provided, however, that substantially all the machinery,
equipment and vehicles included in the Subsidiary Assets have been
maintained in accordance with the Seller's generally applicable
maintenance policies and procedures, which are intended to enable
LDC or DBR, as the case may be, to operate such machinery, equipment
and vehicles for the duration of their useful lives. EXCEPT AS
EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER DRAVO NOR ANY
SELLER MAKES ANY WARRANTY AS TO THE VALUE, CONDITION OR FITNESS
FOR USE OF SUCH SUBSIDIARY ASSETS, WHETHER EXPRESSED OR IMPLIED,
INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
(g) Reserves. Dravo and Sellers have made available to Buyer
all written information in their possession regarding aggregate
reserves on the Subsidiary Leased Real Property. Notwithstanding
any other provision of this Agreement to the contrary, Dravo and
Sellers make no representation whatsoever as to the quality,
quantity, adequacy, merchantability or mineability of such reserves.
5.9 Contracts.
(a) Customer Orders. Schedule 5.9(a) sets forth as of the date
hereof those contracts and quotations for the sale of products made
by each of LDC or DBR which have not been performed by LDC or DBR
and which: (i) provide for the purchase of 10,000 tons or more of
product; (ii) provide for a per ton purchase price less than the
inventory
<PAGE> -44-
value of the product subject to such contract or quotation; (iii) have
a fixed term extending more than twelve (12) months from the date of
this Agreement; or (iv) were not made in the ordinary course of
business.
(b) Other Contracts. Neither Dravo, any Seller, LDC nor DBR has
any contract pertaining to any of the Subsidiary Assets other than (i)
the Subsidiary Leases listed in Schedule 5.8(b), (ii) those listed in
Schedule 5.8(c), (iii) those listed in Schedule 5.9(b), (iv) the
Subsidiary Intellectual Property Licenses (as defined in Section 5.13)
listed in Schedule 5.13, and (v) contracts and quotations for the sale of
products existing on the date of this Agreement and either listed in
Schedule 5.9(a) or, if not required to be so listed, made by each of LDC
and DBR in the ordinary course of business (copies of which have
been made available to Buyer). Dravo and Sellers have delivered to
Buyer true and accurate copies of all written contracts (or a written
summary of the terms of any oral contract) of each of LDC and DBR,
together with all amendments, modifications and supplements thereof
and waivers and consents thereunder. Neither LDC nor DBR nor, to
the knowledge of Dravo, any Seller, LDC or DBR, any other party, is in
default in connection with any contract to which it is a party; no act
or event has occurred which, with notice or lapse of time or both,
constitutes a default under any contract with respect to LDC or DBR,
or, to the knowledge of Dravo, any Seller, LDC or DBR, any other party;
to the knowledge of Dravo, any Seller, LDC or DBR, there is no basis
for any claim or default under any contract with respect to LDC or
DBR or, to the knowledge of Dravo, any Seller, LDC or DBR, any other
party; there is no outstanding notice of cancellation or termination
in connection with any contract to which LDC or DBR is a party; and
each contract to which LDC or DBR is a party is the valid and binding
agreement of LDC or DBR, as the case may be, and, to the knowledge of
Dravo, any Seller, LDC or DBR, of each other party thereto, which is in
full force and effect in accordance with its terms and will not be
affected by, or, except as described in Schedule 5.17, require the
consent of any other party to, the transactions contemplated by this
Agreement. Solely for Buyer's information, Schedule 5.9(c) describes
certain ongoing, non-binding relationships between DBR or LDC and
third persons that are significant to DBR's or LDC's operation of the
Business.
5.10 No Litigation. Except as described on Schedule 5.10, there is no
litigation, action, claim, proceeding or governmental investigation pending
or, to the knowledge of Dravo or any Seller, threatened against LDC or DBR.
Schedule 5.10 also describes any such litigation, action, claim, proceeding
or governmental investigation commenced by or against LDC or DBR or
settled or otherwise finally resolved by the parties thereto in the last
three (3) years.
5.11 Operations Conducted Lawfully. Each of LDC and DBR has conducted
its operations in accordance with all Applicable Law except for minor,
isolated infractions, and neither Dravo, any Seller, LDC nor DBR has
received any notice for which a writing exists to the contrary; provided,
however, that with respect to notice from persons other than a
Governmental Authority, such notice must have been seen by the General
Counsel of Dravo, a vice president or more senior officer of a Seller, or an
officer of LDC or DBR. Neither Dravo, any Seller, LDC
<PAGE> -45-
nor DBR is either charged with, in receipt of any notice or warning of, or to
the knowledge of Dravo, any Seller, LDC or DBR, under investigation with
respect to any failure or alleged failure to comply with any provision of
any Applicable Law. Without limiting the foregoing: (i) except as set forth
on Schedule 5.11, each of LDC and DBR has all licenses, permits,
authorizations and certifications ("Subsidiary Permits") required (and all
such Subsidiary Permits other than Subsidiary Environmental Permits (as
defined in Section 5.12), which are listed on Schedule 5.12 to this Agreement,
are listed in Schedule 5.11 to this Agreement); (ii) all of the Subsidiary
Permits are in full force and effect; and (iii) each of DBR and LDC is (and
has been) in compliance with its Subsidiary Permits or predecessor
Subsidiary Permits; provided, however, that the foregoing shall not require
disclosure of state and local business or similar licenses required of
businesses generally. Notwithstanding the foregoing, neither Dravo nor
Seller makes any representation or warranty as to Environmental Laws or
Subsidiary Environmental Permits in this Section 5.11, it being the intent of
the parties that any representation and warranty as to Environmental Laws
and Subsidiary Environmental Permits be governed by Section 4.11 and
Section 5.12.
5.12 Environmental Protection.
(a) Disclosures of Subsidiary Environmental Permits, Etc.
Schedule 5.12 attached hereto contains a true and complete
description of:
(i) all current environmental (including mining) licenses,
permits, authorizations, certifications, regulatory plans and
compliance schedules of each of DBR and LDC (the "Subsidiary
Environmental Permits"), together with the expiration and
renewal dates thereof;
(ii) all waste dumps and disposal, treatment and storage
sites located on any Subsidiary Leased Real Property known by
Dravo, any Seller, LDC or DBR; and
(iii) all hazardous or toxic (as defined in the
Environmental Laws) waste dumps and disposal, treatment and
storage sites used by each of LDC and DBR since December 31,
1988 and the names of the persons that have been engaged since
December 31, 1988 in the handling, transportation and disposal of
hazardous wastes, hazardous substances or other hazardous or
toxic materials for each of LDC and DBR.
Dravo and Sellers have delivered to Buyer a true and correct copy of
each of the Subsidiary Environmental Permits.
(b) Special Environmental Representations and Warranties.
(i) Except as described on Schedule 5.12, each of LDC and
DBR has obtained all required permits, kept all required records
and made all filings required by applicable Environmental Laws
with respect to emissions, past or present, into the
<PAGE> -46-
environment (including solids, liquids and gases) and the proper
disposal of such materials (including solid waste materials).
(ii) Except as described on Schedule 5.12, none of the
Subsidiary Assets, including the Subsidiary Leased Real
Property, has been contaminated with any hazardous wastes,
hazardous substances, or other hazardous or toxic materials as
defined in the Environmental Laws so as to constitute a violation
of any of the Environmental Laws or so to trigger any corrective
or remedial action under the Environmental Laws. Except as
described on Schedule 5.12, there are no transformers,
capacitors or other equipment included in or located on the
Subsidiary Assets (including the Subsidiary Leased Real
Property) which contain PCBs. Except as described in Schedule
5.12, no portion of the Subsidiary Leased Real Property is
reasonably believed by Dravo, any Seller, LDC or DBR to be a
wetland as defined in 33 C.F.R. Section 328.3 (in the case of LDC)
or under any other applicable Environmental Law. There are no
underground storage tanks located on or under any Subsidiary
Leased Real Property.
(iii) Except as described on Schedule 5.12, each of LDC and
DBR is in compliance with all Environmental Laws and all
Subsidiary Environmental Permits obtained pursuant thereto
except for minor isolated (in both frequency and location)
infractions. Schedule 5.12 describes all citations received by
LDC or DBR since December 31, 1991 relating to violations of any
Environmental Laws or Subsidiary Environmental Permits. To the
knowledge of Dravo, any Seller, LDC and DBR, there are no past or
present events, conditions, circumstances or activities, which
may interfere with or prevent continued compliance with the
Environmental Laws, or which may give rise to any common law or
legal liability, or otherwise form the basis of any claim or
action, proceeding, hearing, study, or investigation, based on or
related to the manufacture, processing, use, storage, disposal,
or handling, or the release or threatened release into the
environment, of any pollutant, contaminant, chemical, or
industrial, toxic or hazardous substances or waste (as defined in
the Environmental Laws) with regard to the Subsidiary Assets,
including the Subsidiary Leased Real Property. Except as
described on Schedule 5.12, there is no pending or, to the
knowledge of Dravo, any Seller, LDC or DBR, threatened civil or
criminal litigation, notice of violation or administrative
proceeding relating in any way to the Environmental Laws
involving LDC or DBR, and to the knowledge of any Vice President
or more senior officer of Dravo, any Seller, LDC or DBR, there is
no basis for any such litigation, notice or proceeding that could
have a material adverse effect on the Subsidiary Assets or the
financial condition, results of operation or prospects of LDC or
DBR. Dravo and Sellers represent and warrant that DBR is not
(and never has been) subject to the Environmental Laws of the
federal government or any state or local government of the
United States of America and therefore Buyer is not requiring
Dravo and Sellers to make any representation or warranty herein
as to DBR's compliance with the Environmental Laws of the
federal government or any state or local government of the
United States of America.
<PAGE> -47-
5.13 Intellectual Properties. Schedule 5.13 lists all patents, patent
applications, trademarks, service marks, trade names, copyrights, computer
programs and software (excluding commercial word processing, accounting
and financial analysis software for personal computers generally
available in the retail market) owned, licensed, used or useable by LDC or
DBR (collectively, the "Subsidiary Intellectual Properties"). Except as
disclosed in Schedule 5.13, (i) LDC or DBR, as the case may be, owns all right,
title and interest in and to, or has the sole or exclusive right to use all
Subsidiary Intellectual Properties and other trade secrets and
confidential information, whether under licenses or other contracts
relating to use or license of technology, know-how or processes (the
"Subsidiary Intellectual Property Licenses"), used or necessary for the
ordinary conduct of its business free and clear of all Liens and all other
adverse rights whatsoever; (ii) neither LDC nor DBR is required to make
payments, or provide other benefits, to any person with respect to its
ownership or use of the Subsidiary Intellectual Property except pursuant
to the Subsidiary Intellectual Property Licenses disclosed on Schedule
5.13; and (iii) after the consummation of the transactions contemplated by
this Agreement, LDC or DBR, as the case may be, will have the right that it
currently has to such Subsidiary Intellectual Property, unaltered and
unimpaired by such transactions. Schedule 5.13 lists all Subsidiary
Intellectual Property Licenses. No claims have been asserted during the
past five (5) years by any person against the use by LDC or DBR, or
challenging or questioning the validity or effectiveness, of any of the
Subsidiary Intellectual Properties, or any agreement relating thereto, to
which LDC or DBR is a party.
5.14 Zoning. Except as set forth on Schedule 5.14 to this Agreement:
(i) each of LDC and DBR is in compliance with all applicable building, zoning,
land use or other similar statutes, laws, ordinances, regulations, permits
or other requirements in respect of any Subsidiary Leased Real Property
and neither Dravo, any Seller, LDC nor DBR has received any notice alleging
such a violation; (ii) there are no non-conforming uses, zoning or building
code variances or any other use restrictions (whether written or oral) or
special permits not set forth in the local zoning laws and building codes
with respect to any Subsidiary Leased Real Property; (iii) any operations on
or uses of any Subsidiary Leased Real Property that constitute
nonconforming uses have been conducted with sufficient continuity so as
to preserve the right to continue the existing operations and uses; and (iv)
all reserves located on the Subsidiary Leased Real Property are within
zoning classifications that will permit the quarrying and processing
thereof subject to applicable setback and other conditions applicable to
such zoning classification; and (v) neither Dravo, any Seller, LDC nor DBR
has received any notice of (A) any pending or contemplated rezoning
proceeding affecting any Subsidiary Leased Real Property or (B) any
pending or contemplated proceedings or public improvements which could or
might result in the levy of any special tax or assessment against any
Subsidiary Leased Real Property. Schedule 5.14 sets forth with respect to
any of the Subsidiary Leased Real Property which include a quarry or other
production facilities: (i) the zoning classifications applicable to any
Subsidiary Leased Real Property; and (ii) describes all variances, use
restrictions or special permits (whether written or oral) applicable to the
Subsidiary Leased Real Property. Dravo and Sellers have delivered to
Buyer all agreements, documents, permits or other writings, and have
described any oral arrangement, pertaining to any such variance, use
restriction or other special permit.
<PAGE> -48-
5.15 Taxes. DBR is not (and has never been) subject to taxation by the
Federal Government or any state or local government of the United States
of America. Each of LDC and DBR has (i) properly completed and filed all tax
returns required to be filed by it, and no filing extensions for any such
returns are in effect, and (ii) paid and satisfied on or before its
respective due date all Taxes (whether or not requiring the filing of
returns). All Taxes, assessments and levies which either LDC or DBR is or
was required by law to withhold or collect, including sales, unemployment
and payroll taxes, have been duly withheld and collected and paid over to
the proper Governmental Authority or held by LDC or DBR in separate bank
accounts for such payment. Except as set forth in Schedule 5.15, none of
the Subsidiary Assets owned by LDC is (i) "tax-exempt use property" within
the meaning of IRC Section 168(h)(1), (ii) used predominately outside of the
United States within the meaning of Prop. IRS Reg. Section 1.168-2(g)(5), (iii)
"tax-exempt bond financed property" within the meaning of IRC Section
168(g)(5), or (iv) "limited used property" as that term is used in Rev. Proc.
76-30. Following the Closing, none of the Subsidiary Assets will be
property that Buyer or LDC will be required to treat as being owned by any
other person pursuant to the provisions of IRC Section 168(f)(8). With
respect to assets and properties placed in service on or before the date
of this Agreement that are subject to leases included in the Subsidiary
Assets, and except as a result of acts, errors or omissions, including
breaches of representations, by the lessor thereunder, each of such
leases (excluding property sold on installment sales contracts) will be
treated as a "true lease" for federal income tax purposes. Except as set
forth on Schedule 5.15, (i) no audit of any tax return of LDC or DBR is
currently being conducted, and neither Dravo, any Seller, LDC nor DBR has
received any notice that any Governmental Authority intends to conduct
such an audit and (ii) neither Dravo, any Seller, LDC nor DBR has received
any notice of proposed adjustment, notice of deficiency or assessment from
any Governmental Authority with respect to taxes of LDC or DBR that has
not been previously resolved. No payment that will not be deductible under
IRC Section 280G has been made by, or that is allocable to LDC. Except as
disclosed on Schedule 5.15, neither LDC nor DBR is a party to any tax
sharing or tax allocation agreement.
5.16 Citations. To the knowledge of DBM's Vice President of
Engineering or Manager of Safety, there is no (and since December 31, 1991
has not been any) (i) "recognized hazard" (as such term is used under OSHA)
or "significant and substantial mining safety or health hazard" (as such
term is used under MSHA) with respect to LDC or any Subsidiary Asset owned
by LDC or (ii) any finding or notice by a Governmental Authority of a safety
or health hazard with respect to DBR or any Subsidiary Asset owned by DBR
that has not been previously disclosed in writing to Buyer. Attached
hereto as Schedule 5.16 is a true and complete list of MSHA, OSHA and other
health and safety citations received by Dravo, any Seller, LDC or DBR with
respect to LDC, DBR or any Subsidiary Asset since December 31, 1991.
5.17 No Consents. Except (i) for the consent of the lessors pursuant
to any Subsidiary Lease described in Schedule 5.8(b), (ii) as set forth in
Schedule 5.17, or (iii) for the filings with the FTC and the Antitrust Division
under the HSR Act, no consent, approval, order or authorization of, or
registration, declaration or filing with any Governmental Authority or
other person, on the part of LDC or DBR is required in connection with the
consummation of any transaction contemplated hereby.
<PAGE> -49-
5.18 Insurance. Schedule 5.18 contains a complete and accurate list of
all insurance policies in force on the date of this Agreement (including the
type of policy, the policy number, the limits of coverage, the carrier and
the expiration date) that are owned by LDC, other than employee-welfare
insurance plans disclosed on Schedule 5.21 (the "Insurance Policies"). The
Insurance Policies are in full force and effect and the premiums due
thereon have been timely paid. LDC has not forfeited or waived any
material claim under any of its Insurance Policies. No notice of
cancellation or termination of any Insurance Policy has been given to
Dravo, any Seller or LDC by the carrier of such policy. DBR does not own
any insurance policies.
5.19 Labor Relations. Each of LDC and DBR is (and since December 31,
1990 has been) in compliance with all Applicable Law respecting employment
and employment practices, terms and conditions of employment and wages and
hours, and has not engaged in any unfair labor or unfair employment
practice. Except as set forth on Schedule 5.19, there is no (and since
December 31, 1990 there has not been any): (i) unlawful employment practice
discrimination charge relating to LDC or DBR before the EEOC or any EEOC
recognized state "referral agency" (in the case of LDC) or any other
Governmental Authority, (ii) unfair labor practice charge or complaint
against LDC or DBR before the NLRB (in the case of LDC) or any other
Governmental Authority or (iii) labor strike, dispute, picketing, lockout,
union organizing activity, union jurisdictional dispute, slowdown or
stoppage or, to the knowledge of Dravo, any Seller, LDC or DBR threatened
against or involving or affecting LDC or DBR. No NLRB representation
question or other representation question exists respecting any employees
of LDC or DBR. No grievance or arbitration proceeding relating to LDC or
DBR is pending and no written claim therefore exists. Except as set forth
on Schedule 5.19, there is no collective bargaining agreement which is
binding on LDC or DBR. Dravo and Sellers represent and warrant that DBR is
not (and never has been) subject to (i) the jurisdiction of the EEOC or the
NLRB or (ii) any employment laws of the federal government or any state or
local government of the United States of America, and therefore Buyer is
not requiring Dravo and Sellers do not make any representation or warranty
herein as to DBR's compliance with any such laws.
5.20 Securities Act and Blue Sky Compliance. The sale by Sellers of all
of the capital stock of DBR and the partnership interest in LDC, as
contemplated by this Agreement, does not violate Section 5 of the
Securities Act of 1933, as amended (the "1933 Act"), and the rules and
regulations promulgated thereunder or any state securities or blue sky
laws or foreign securities law.
5.21 Employee and Fringe Benefit Plans.
(a) Schedule of Plans. Schedule 5.21 to this Agreement lists
each of the following that LDC or DBR either maintains, is required to
contribute to or otherwise participates in (or at any time during the
preceding seven years maintained, contributed to or otherwise
participated in) or as to which LDC or DBR has any unsatisfied
liability or obligation, whether accrued, contingent or otherwise: (i)
any employee pension benefit plan, including any pension, profit
sharing, retirement, thrift or stock bonus plan; (ii) any "multi-
employer plan"; (iii) any employee welfare benefit plan; or (iv) any
other compensation, stock
<PAGE> -50-
option, restricted stock, fringe benefit or retirement plan, program,
policy, understanding or arrangement of any kind whatsoever, whether
formal or informal, not included in the foregoing and providing for
benefits for, or the welfare of, any or all of the current or former
employees or agents of LDC or DBR or their beneficiaries or
dependents, including any group health, life insurance, retiree
medical, bonus, incentive or severance arrangements (all of the
foregoing in items (i), (ii), (iii) and (iv) being referred to as
"Subsidiary Employee Plans"). None of the Subsidiary Employee Plans
is an employee pension benefit plan as described in clause (i) in the
preceding sentence. Dravo has delivered to Buyer (and Schedule 5.21
lists each item delivered) copies of the following: (i) each written
Subsidiary Employee Plan, as amended (including either the original
plan or the most recent restatement and all subsequent amendments);
(ii) the three most recent annual reports, including, if applicable, the
reports on the Form 5500 series; (iii) each trust agreement, insurance
contract or document setting forth any other funding arrangement, if
any, with respect to each Subsidiary Employee Plan; (iv) the most
recent ERISA summary plan description or other summary of plan
provisions distributed to participants or beneficiaries for each
Subsidiary Employee Plan; and (v) each opinion or ruling from the IRS,
the Department of Labor, the PBGC or any other Governmental
Authority concerning any Subsidiary Employee Plan.
(b) Contributions. Each of LDC and DBR has made full and timely
payment of all amounts required to be contributed under the terms of
each Subsidiary Employee Plan and Applicable Law, or required to be
paid as expenses under such Subsidiary Employee Plan, including, in
the case of LDC, PBGC premiums and amounts required to be
contributed under IRC Section 412; all contributions have been made in
accordance with the actuarial recommendations; and no excise taxes
are assessable as the result of any nondeductible or other
contributions made or not made to a Subsidiary Employee Plan.
(c) Reporting and Disclosure. Summary plan descriptions and all
other returns, reports, registration statements, prospectuses,
documents, statements and communications which are required to have
been filed, published or disseminated under Applicable Law with
respect to the Subsidiary Employee Plans have been so filed,
published or disseminated.
(d) Prohibited Transactions; Terminations; Other Reportable
Events. Neither LDC, DBR, any Subsidiary Employee Plan, any trust or
arrangement created under any of them, nor any trustee, fiduciary,
custodian, administrator or any person or entity holding or
controlling assets of any of the Subsidiary Employee Plan has
engaged in any transaction which could subject any of the foregoing
persons or entities, or any person or entity dealing with them, to any
tax, penalty or other cost or liability of any kind. No termination,
whether partial or complete, has occurred with respect to any
Subsidiary Employee Plan. No event requiring the notification of any
Governmental Authority (other than an event for which the statutory
notice requirements have been waived by regulation) has occurred
with respect to any Subsidiary Employee Plan.
<PAGE> -51-
(e) Claims for Benefits. Other than claims for benefits arising
in the ordinary course of the administration and operation of the
Subsidiary Employee Plans, no claims, investigations or arbitrations
are pending or threatened against any Subsidiary Employee Plan or
against LDC, DBR, any trust or arrangement created under or as part
of any Subsidiary Employee Plan, any trustee, fiduciary, custodian,
administrator or other person or entity holding or controlling assets
of any Subsidiary Employee Plan, and no basis to anticipate any such
claim or claims exists.
(f) Other. LDC and DBR have fully complied with all of their
obligations under each of the Subsidiary Employee Plans and with all
provisions of Applicable Law applicable to the Subsidiary Employee
Plans. No written notice has been received by Dravo, any Seller, LDC
or DBR of any claim by any participant in the Subsidiary Employee
Plans of any violation of such laws, and to the knowledge of Dravo,
any Seller, LDC or DBR, no such claims are pending or threatened.
(g) Creation of Obligations. The execution or performance of
the transactions contemplated by this Agreement will not create,
accelerate or increase any obligations under any Subsidiary Employee
Plan, including, in the case of LDC, any obligation to make a payment
that would be nondeductible under IRC Section 280G or any other IRC
provision.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Dravo and Sellers on the date of
this Agreement as follows:
6.1 Organization and Standing of Buyer. Buyer is a corporation duly
incorporated, organized, validly existing and in good standing under the
laws of the State of North Carolina and has all corporate power and
authority to enter into this Agreement and the other agreements to be
executed and delivered by it pursuant to this Agreement and to perform its
obligations hereunder and thereunder. On the Closing Date, Buyer shall be
qualified to do business as a foreign corporation in each jurisdiction in
which the Owned Real Property and the Leased Real Property is located.
6.2 Authority. The execution and delivery of this Agreement and the
other agreements to be executed and delivered by Buyer pursuant to this
Agreement and the consummation by Buyer of the transactions contemplated
by, and other compliance with and performance under them, have been duly
authorized by all necessary action on the part of the Buyer in compliance
with Applicable Law. The transactions contemplated by this Agreement were
unanimously approved by the Board of Directors of Buyer.
<PAGE> -52-
6.3 No Violation. The execution and delivery of this Agreement and
the other agreements to be executed and delivered by Buyer pursuant to
this Agreement and the consummation by Buyer of the transactions
contemplated hereby and thereby do not and will not (i) violate or conflict
with any provision of the Articles of Incorporation or the Bylaws of Buyer,
(ii) violate or conflict with, or result (with the giving of notice or lapse of
time or both) in a violation of or constitute a default (or give rise to any
right of termination, cancellation or acceleration), under any of the terms,
conditions or provisions of any note, license, agreement of other
instrument or obligation to which Buyer is a party or by which any of its
assets may be bound, except for such violations or defaults (or rights of
termination, cancellation or acceleration) as to which requisite waivers or
consents have been obtained, or (iii) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to Buyer or any of its
assets.
6.4 Enforceability. This Agreement and all agreements and
instruments contemplated by this Agreement to which Buyer is a party or a
signatory constitute the legal, valid and binding obligations of Buyer
enforceable in accordance with their terms.
6.5 No Litigation. There is no litigation, action, claim, proceeding, or
governmental investigation pending or, to Buyer's knowledge, threatened
against Buyer which may affect Buyer's ability to perform its obligations
hereunder or under any agreement or instruments contemplated by this
Agreement, and to the knowledge of Buyer, there is no basis for any such
action.
6.6 No Consents. Except for the filings with the FTC and the
Antitrust Division under the HSR Act or as set forth on Schedule 6.6, no
consent, approval, order authorization of, or registration, declaration or
filing with any Governmental Authority or other person on the part of
Buyer is required in connection with the execution or delivery of, or the
performance of its obligations under this Agreement or the other
agreements contemplated by this Agreement or the consummation of any
transaction contemplated hereby.
6.7 Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made
by or on behalf of Buyer. Notwithstanding the foregoing, Buyer has
engaged Goldman, Sachs & Co. to advise it in connection with the
transactions contemplated by this Agreement and Buyer is solely
responsible for the fees and expenses of Goldman, Sachs & Co.
6.8 Investment. Buyer is purchasing the outstanding capital stock of
DBR for investment for its own account, and not with a view to, or for the
offer or sale in connection with, any distribution thereof. Buyer
acknowledges that the capital stock of DBR is not registered under the 1933
Act or any foreign or state securities law, and that such capital stock may
not be subsequently sold by Buyer except pursuant to the registration
provisions of the 1933 Act or pursuant to an applicable exemption therefrom
and subject to applicable foreign and state securities laws and
regulations.
<PAGE> -53-
6.9 Disclosure. No representation or warranty made by Buyer in this
Agreement or by Buyer in any certificate, schedule, representation letter
or other instrument furnished or to be furnished by Buyer to Dravo or any
Seller or its representatives pursuant hereto, or in connection with the
transactions contemplated hereby, contains or will contain any untrue
statement of material fact or to the knowledge of any Vice President or
more senior officer of Buyer, after due inquiry, omits or will omit to state
a material fact necessary in order to make the statements contained
therein not misleading with respect to Buyer's performance of its
obligations under this Agreement or the other agreements contemplated by
this Agreement or the consummation of any transaction contemplated
hereby. Without limiting the preceding sentence, to the knowledge of any
Vice President or more senior officer of Buyer, after due inquiry, there is
no information concerning the Buyer which has not heretofore been
disclosed to Dravo or a Seller which information could have a material
adverse effect on the Buyer's performance of its obligations under this
Agreement or the other agreements contemplated by this Agreement or the
consummation of any transaction contemplated hereby.
ARTICLE 7
OTHER AGREEMENTS
7.1 [Reserved].
7.2 [Reserved].
7.3 [Reserved].
7.4 Announcements. Dravo, Sellers and Buyer agree that neither
Buyer, Dravo nor any Seller shall make any public statements, including any
press releases or announcements to Dravo's, any Seller's or DBR's
employees, with respect to this Agreement and the transactions
contemplated hereby, without the prior written consent of the other party
(which consent shall not be unreasonably withheld), except as may be
required by Applicable Law, including the rules, regulations or practices of
the Securities and Exchange Commission or the New York Stock Exchange. If
a public statement is required to be made under Applicable Law, the parties
shall consult with each other in advance to the extent reasonably
practicable as to the contents and timing thereof. Without limiting the
foregoing, any announcement or notice to the employees of Dravo, any
Seller or DBR or to any other person concerning the transactions
contemplated by this Agreement shall be jointly planned and coordinated by
Buyer and Dravo. Notwithstanding the foregoing, each of the parties
acknowledges that Buyer, Dravo, Sellers and DBR will be required to make
certain disclosures with respect to this Agreement and the transactions
contemplated hereby to employees and professional advisors who have a
need to know such disclosed information in order to assist or represent
Buyer, Dravo, Sellers or DBR in connection with this Agreement and the
consummation of the transactions contemplated hereby.
<PAGE> -54-
7.5 Inspection; Confidentiality of Certain Information.
(a) [Reserved].
(b) Confidentiality. Any information obtained by Buyer from
Dravo, DNRC and Sellers about Dravo or DNRC other than information
relating to the Business shall be used by Buyer solely for the
purpose of evaluating the Business and will not be used in Buyer's
business or operations in any way, directly or indirectly, detrimental
to Dravo and Sellers, and will be kept confidential by Buyer and its
authorized representatives and designees; provided, however, that (i)
Buyer may disclose such information to its representatives who need
to know such information for the purpose of evaluating the Business
or financing its purchase and who have been informed of the
confidential nature of such information and agreed to keep it
confidential and (ii) any disclosure of such information may be made
to which Dravo or any Seller consents in writing. Buyer shall be
responsible for any breach of such confidentiality undertaking by
its representatives or designees. In the event that Buyer or its
authorized representatives or designees become legally compelled (by
deposition, interrogatory, subpoena, civil investigative demand or
similar process) to disclose any of such confidential information,
Buyer shall provide Dravo with prompt written notice of such
requirement so that Dravo or any Seller may seek a protective order
or other appropriate remedy. If such protective order or other
remedy is not obtained, or that Dravo or a Seller waives compliance
with the provisions hereof, Buyer agrees to furnish only that portion
of such confidential information which it reasonably believes is
legally required. The foregoing obligations of confidentiality and
non-use do not apply to any information which: (A) at the time of
disclosure by Dravo or any Seller or thereafter is generally
available to and known by the public (other than as a result of a
disclosure, directly or indirectly, by Buyer or its authorized
representatives or designees); (B) was available to Buyer on a non-
confidential basis from a source other than Dravo, any Seller or
their advisors or representatives, provided that such source is not
and was not, to Buyer's knowledge, bound by a confidentiality
agreement with or other obligation of secrecy to Dravo or any Seller;
or (C) has been independently acquired or developed by Buyer without
violating any of its obligations under this Section 7.5(b).
Notwithstanding anything in this Agreement to the contrary, the
terms of this Section 7.5(b) shall not survive the Closing with respect
to information relating to the Business but shall survive for a period
of three (3) years after the Closing Date with respect to information
relating to Dravo.
(c) [Reserved].
(d) LDC Balance Sheet. Dravo and Sellers shall deliver to Buyer
as soon as possible after Closing (but in no event later than forty-
five (45) days after the Closing Date) a balance sheet of LDC as of
the close of business on the day immediately prior to the Closing
Date, audited by KPMG Peat Marwick (the "LDC Balance Sheet"). The LDC
Balance Sheet shall be prepared in accordance with GAAP consistently
applied and shall include all year-end adjustments and notes. The
examination of the LDC Balance Sheet
<PAGE> -55-
by KPMG Peat Marwick shall be conducted in accordance with generally
accepted auditing standards and its report thereon shall not be
qualified in any respect.
(e) Preservation of and Access to Records. For a period of five
(5) years following the Closing Date, Buyer, as one party, and Dravo
and Sellers, as one party, shall give the other party, and its counsel,
accountants and other representatives, reasonable access, during
normal business hours, to all books, contracts and records
transferred to Buyer pursuant to this Agreement or retained by
Dravo or any Seller, as the case may be, and shall furnish to the
other party and its counsel, accountants and other representatives
all such information concerning the affairs of such party as the
other party and its representatives reasonably may request with
respect to the Business as operated prior to the Closing. Nothing in
this Section 7.5(e) shall prohibit (i) Buyer from destroying records
and other documents in compliance with Buyer's records retention
program and (ii) Dravo or any Seller from destroying records and
other documents after the Closing Date in compliance with Dravo's or
such Seller's records retention program, except that neither Dravo
nor any Seller shall have the right to destroy records and documents
that should have been transferred and delivered to Buyer pursuant
to this Agreement.
7.6 Certain Employee Matters.
(a) No Obligation to Hire. Buyer shall have the right, but not
the obligation, to hire (effective as of the Closing Date) some or all
of Dravo's or DBM's employees engaged in the Business. It is Buyer's
present intention to offer employment as of the Closing Date to (i)
the employees of DBM located at DBM's operational facilities and (ii)
certain employees of DBM and DNRC located at the McDuffie Island
administrative center as identified by Buyer. Notwithstanding the
foregoing, nothing in this Agreement (i) requires Buyer to hire, or to
offer to hire, the current employees of the Business, (ii) constitutes
an offer to employ such employees, or (iii) requires Buyer to pay any
such persons severance pay in the event of termination of
employment. The parties do not intend to confer any benefit under
this Agreement on anyone other than the parties, and nothing
contained in this Agreement shall be deemed to confer any such
benefit on any such other person, including any current or former
employee or agent of Dravo or any Seller or any dependent or
beneficiary of any of them.
(b) Transferred Employees. Those employees of the Business to
whom Buyer offers employment as of the Closing Date, and who accept
such offer of employment as of the Closing Date, are referred to in
this Agreement as the "Transferred Employees." Dravo and DBM shall
assist and cooperate with Buyer in communicating the proposed terms
of employment to employees of the Business designated by Buyer.
Neither Dravo, any Seller nor any representative of any such party
shall communicate to such employees concerning proposed terms of
employment, including benefits arrangements, except after prior
discussion with, and consent of Buyer as to the content of such
communication. If any individual identified as a Transferred
Employee goes on leave of absence prior to the Closing Date and is
not actively at work on the Closing Date, Buyer's offer of employment
<PAGE> -56-
shall remain open for 30 calendar days after the Closing Date and
can be accepted only by reporting ready to work in the Business
during such thirty (30) day period. Dravo and DBM shall remain
responsible for any such individual during such individual's period of
leave and Buyer shall have no obligation with respect to any such
individual until he or she is employed by Buyer following the period of
leave.
(c) No Assumption of Employee Obligations. Except to the extent
expressly included in Assumed Liabilities or in another paragraph of
this Section 7.6, Buyer does not, and shall not, assume or be
responsible for any obligation or liability arising out of any
employment relationship of Dravo or any Seller, and without limiting
the foregoing, Buyer shall have no liability or obligation in
connection with current or former employees or agents of Dravo or
any Seller or any dependent or beneficiary of any of them by reason
of their relationship to Dravo or any Seller. Dravo and Sellers shall
remain liable for, and shall pay, the following in connection with
current or former employees or agents of Dravo or any Seller (or any
dependent or beneficiary of them): (i) unpaid wages, salaries or other
compensation; (ii) contributions to or payments under employee
benefit plans, programs, policies, arrangements or understandings;
(iii) accrued, but unused, holiday, sick leave and severance pay, if
any; (iv) liabilities or obligations under any collective bargaining
agreement or bargaining relationship; or (v) claims, demands,
administrative proceedings or suits arising out of, or in connection
with, alleged unlawful employment practices of Dravo or Seller.
(d) Employee Benefit Plans; COBRA Coverage. It is understood
and agreed that Dravo and Sellers will administer their respective
benefit plans, at their expense, for the benefit of current and
former employees for claims relating to matters arising before the
Closing Date. The parties agree as follows with respect to such plans
from and after the Closing Date:
(i) Defined Benefit Plan Benefiting Salaried Employees.
Effective as of the Closing Date, Dravo shall vest as soon as
practicable all of the salaried Transferred Employees in Dravo's
defined benefit pension plan applicable to them and shall
continue to be responsible on and after the Closing Date for all
such salaried employees' vested benefits. After the Closing
Date and as of the Closing Date, Buyer shall arrange to extend
coverage of the defined benefit pension plan benefitting
Buyer's salaried employees (the "Buyer's Salaried DB Plan") to all
Transferred Employees who are salaried employees and
participate in a defined benefit pension plan sponsored by Dravo
and shall arrange for the Buyer's Salaried DB Plan to credit
such Transferred Employees for eligibility and vesting purposes
(but not for benefit accrual purposes) with their respective
periods of service with DBM or Dravo.
(ii) Defined Benefit Plans Benefiting Hourly Employees.
Effective as of the Closing Date, Dravo shall vest as soon as
practicable all of the hourly Transferred Employees in Dravo's
defined benefit pension plan applicable to them and shall
<PAGE> -57-
continue to be responsible on and after the Closing Date for all
such vested benefits for all such hourly employees. As soon as
practicable after the Closing Date and as of the Closing Date,
Buyer shall provide defined benefit coverage under a plan
covering Buyer's other hourly employees (the "Buyer's Hourly DB
Plan") to such hourly Transferred Employees participating in a
defined benefit pension plan sponsored by Dravo and shall
arrange for Buyer's Hourly DB Plan to credit such Transferred
Employees for eligibility and vesting purposes (but not for
benefit accrual purposes) with their respective periods of
service with DBM or Dravo.
(iii) Salaried 401(k) Plans. As soon as practicable after
the Closing Date, Buyer shall arrange to extend coverage of the
existing individual account plan benefitting Buyer's salaried
employees (the "Buyer's Salaried Savings Plan") to salaried
Transferred Employees. Buyer shall arrange for Buyer's
Salaried Savings Plan to credit such Transferred Employees for
eligibility and vesting purposes with their respective periods of
service with DBM or Dravo. As of the Closing Date, DBM and Dravo
shall cease making contributions to the Dravo Savings Plan (the
"Dravo Salaried Savings Plan") on behalf of salaried Transferred
Employees and shall cause all account balances to be vested, and
thereafter shall take such actions as may be necessary at the
request of each individual Transferred Employee, subject to the
terms and conditions of Buyer's Salaried Savings Plan, (A) to
transfer or make a direct rollover in cash in an amount equal to
the account balances of such individual in the Dravo Salaried
Savings Plan, other than any amounts attributable to after-tax
employee contributions, to Buyer's Salaried Savings Plan; (B) to
retain such account balances in the Dravo Salaried Savings Plan;
or (C) to receive a lump sum distribution of his or her account
balances.
(iv) Hourly 401(k) Plans. As soon as practicable after the
Closing Date, Buyer shall adopt an individual account plan
("Buyer's Hourly Savings Plan") having contribution provisions
similar to those provided by the Dravo Money Accumulation Plan
(the "Dravo Hourly Savings Plan") and following such adoption
extend eligibility therein to previously eligible hourly
Transferred Employees. Buyer shall cause Buyer's Hourly
Savings Plan to credit such Transferred Employees for
eligibility and vesting purposes with their respective periods of
service with DBM or Dravo. As of the Closing Date, DBM and Dravo
shall cease making contributions to the Dravo Hourly Savings
Plan on behalf of hourly Transferred Employees and shall cause
all account balances to be vested. Upon the establishment of
Buyer's Hourly Savings Plan, at the direction of Buyer, Dravo and
DBM shall take such actions as may be necessary to transfer
cash constituting the account balances of Transferred
Employees in the Dravo Hourly Savings Plan to Buyer's Hourly
Savings Plan.
(v) Loans. The parties agree to cooperate in
transferring one outstanding loan of a Transferred Employee
owed to the Dravo Salaried Savings Plan to the Buyer's Salaried
Savings Plan, provided the Transferred Employee elects to make
a
<PAGE> -58-
direct rollover and the terms of the loan meet the criteria of
Buyer's Salaried Savings Plan, including interest rates, security
arrangements and provisions on default. Buyer shall have the
sole discretion to determine if such criteria are met. No such
loans exist under the Dravo Hourly Savings Plan.
(vi) Multiemployer Plans.
(A) Buyer shall agree to contribute to all of the
Multiemployer Plans for substantially the same number
of contribution base units as those for which Dravo
has been contributing with respect to Transferred
Employees. Nothing in this Section 7.6 shall require or
obligate Buyer to assume any collective bargaining
agreement maintained by Dravo with respect to
Transferred Employees.
(B) With respect to all Multiemployer Plans except
the United Industrial Workers of North America Pension
Plan (the "UIW Plan"), Buyer presently intends to obtain
a waiver of the bond or escrow requirements of Section
4204 of ERISA pursuant to Section 2643.11 of the PBGC
Regulations. Dravo shall be secondarily liable for
liabilities under any Multiemployer Plan only to the
extent required by Section 4204(a)(1)(C) of ERISA. Dravo
and Sellers shall use their best efforts to provide
Buyer a written statement from the administrator of
each Multiemployer Plan listed on Schedule 7.6(d)(vi)
specifying the withdrawal liability that would be
imposed upon Dravo or any Seller upon withdrawal from
such plan.
(C) Buyer does not intend to meet the requirements
of Section 4204 of ERISA with respect to the UIW Plan in
order to effect the complete withdrawal of Dravo from
the UIW Plan, based upon the representations made by
representatives of the UIW Plan to Buyer that no
withdrawal liability is now being asserted against an
employer who withdraws from the UIW Plan.
(vii) Welfare Plan Benefits and Administration. As of the
Closing Date, Dravo and Sellers, as a temporary transition
matter, shall make available to the Transferred Employees the
medical, dental, short-term and long-term disability and life
insurance plans of Dravo ("Assumed Welfare Plans") so as to
continue to provide on an uninterrupted basis such welfare plan
benefits to such Transferred Employees until Buyer is in
position to extend its comparable plans to such individuals. DBM
and Dravo shall remain responsible for all claims of such
Transferred Employees and their dependents relating to
services incurred prior to the Closing Date. Buyer shall be
responsible for any such claims relating to services incurred on
or after the Closing Date; provided, however, DBM and Dravo shall
remain responsible for all covered charges incurred by a
Transferred Employee or dependent who is
<PAGE> -59-
hospitalized on the Closing Date for the duration of such period
of hospitalization. Dravo agrees to administer for Buyer the
Assumed Welfare Plans for the benefit of the Transferred
Employees for a period of up to nine (9) months after the Closing
Date, and Buyer agrees to reimburse Dravo an amount equal to
the benefits paid for such Transferred Employees plus any
direct expense attributable thereto for the medical plan and the
short-term disability plan, including benefits provided pursuant
to COBRA continuation coverage. Reimbursement for life, dental,
long-term disability and stop loss insurance plans shall be equal
to the amount of the net premiums for all Transferred Employees.
Dravo shall inform the third party administrator of its welfare
plans of its agreement in this regard and instruct such
administrator to account for the benefits of Transferred
Employees separately, but otherwise to treat such individuals as
though they continued to be Dravo employees in terms of priority
and mechanics of handling claims. Dravo shall submit
periodically its claim for reimbursement of benefits provided
Transferred Employees which shall be promptly paid, but Buyer
shall have the right to audit the accounts on which any such
claim is based. In establishing its own welfare plans, Buyer
shall cause such plans to waive any preexisting condition not
applicable in the Assumed Welfare Plans and to provide that any
expenses incurred under the Assumed Welfare Plans shall be
taken into account under such plans for purposes of satisfying
the applicable deductible, co-insurance and maximum out-of-
pocket provisions with respect to the calendar year in which
such plans are established. Upon the establishment of Buyer's
welfare plans, Dravo shall cease to have responsibility for
administering the Assumed Welfare Plans for Transferred
Employees, except that Dravo shall continue to administer claims
submitted prior to the establishment of Buyer's welfare plans.
(viii) Retiree Benefits. DBM and Dravo shall retain
responsibility to provide retiree medical or life benefits that
individuals, including Transferred Employees, are entitled to
under Dravo's or DBM's plans prior to Closing Date in accordance
with the terms of such plans as in effect in the future;
provided, however, that with respect to any future change in
Dravo's or DBM's retiree benefit plans neither Dravo nor DBM
shall treat Transferred Employees, either salaried or hourly,
who are entitled to retiree benefits under Dravo's or DBM's plans
prior to the Closing Date any differently from other individuals,
either salaried or hourly, as applicable, who are entitled to
retiree benefits under Dravo's or DBM's plans prior to the
Closing Date but who do not become Transferred Employees if
such other individual would have retired from Dravo or DBM at
the same time as the Transferred Employee retires from Buyer.
Buyer shall be responsible to provide the retiree benefits of
Buyer's retiree benefit plans to those Transferred Employees
whose service as an employee of Buyer meets the eligibility
requirements of Buyer's plans. Service with Dravo or DBM shall
not count in determining whether a Transferred Employee meets
the eligibility requirements of Buyer's retiree benefits plans.
If an individual is eligible for retiree medical or life benefits
under both the Dravo or DBM plans and Buyer's plans, such
individual at the time of retirement from Buyer shall make a
<PAGE> -60-
one-time irrevocable election to receive benefits under either,
but not both the Dravo retiree benefit plan (as then in effect)
or Buyer's retiree benefit plan (as then in effect), and shall
thereafter be entitled to receive benefits only from the plan so
elected in accordance with the provisions of the plan. Whichever
plan is chosen by an individual Transferred Employee shall bear
the cost of providing benefits to such individual.
(ix) COBRA Coverage. DBM and Dravo shall remain
responsible for all liabilities and obligations in connection with
claims for post-employment medical, vision and dental benefits
that may be required under IRC Section 4980B made by or in
respect of any employee of DBM or Dravo whose employment
terminated on or prior to the Closing Date and any "qualified
beneficiary" (within the meaning of IRC Section 4980B) of any
such employee who is receiving post-employment medical and
dental benefits or whose "qualifying event" (within the meaning
of IRC Section 4980B) entitling such individual to such benefits
occurred on or before the Closing Date.
(x) Vacation. Buyer shall allow Transferred Employees to
use after the Closing Date any earned vacation time accumulated
prior to the Closing Date but unused by such date. Such vacation
time shall include both time earned in 1993 to be taken in 1994
and time earned in 1994 prior to the Closing Date to be taken in
1995, treating the Closing Date, as between the parties, as the
day on which vacation time is accrued for calendar 1994 to be
used during 1995 and Dravo and Sellers shall accrue all such
vacation time on the Closing Balance Sheet. Dravo shall provide
Buyer with a listing of vacation eligibility for all Transferred
Employees.
(xi) Access and Assistance. Dravo, DBM and Buyer shall
provide each other with such assistance and access to employee
and plan records as may reasonably be requested by any of them
in connection with the establishment of Buyer's plans, the
transfer of assets and liabilities or account balances from a
Dravo or DBM plan to a Buyer plan, the audit of any actions taken
pursuant to this Agreement by a Governmental Authority or any
other aspect of the administration of the benefit plans of the
parties resulting from this Agreement.
(e) WARN Agreements. Dravo shall be responsible for giving any
notice that may be required by the Worker Adjustment and Retraining
Notification Act ("WARN") as a result of the purchase of the Business
both as to (i) layoffs or facility closings ordered prior to the Closing
Date, including layoff of employees who are not designated as
Transferred Employees, or (ii) decisions to layoff Transferred
Employees or to close any facility made within 30 days after the
Closing Date. Buyer agrees to give Dravo notice of any decision to
layoff Transferred Employees or close any facility made within 30
days after the Closing Date and, if such layoff or facility closing
would result in liability for Dravo under WARN, to refrain from
carrying out such decision for 60 days after giving Dravo notice of
such decision.
<PAGE> -61-
7.7 Taxes.
(a) Tax Returns.
(i) Dravo and Sellers shall each prepare and file all
returns and reports for its Taxes that are due on or after the
Closing Date for the Business through the Closing Date,
including all final employment security and sales tax returns.
Dravo and Sellers shall prepare for timely filing by DBR, any
Seller or Dravo, as the case may be, and shall deliver to Buyer
for its review no later than fifteen (15) days prior to filing (in
the case of a tax return to be filed by DBR on a separate
company basis only), all tax returns of or that include DBR
(including any amendments thereto) with respect to any taxable
period of DBR ending on or prior to the Closing Date (a "Pre-
Closing Period") and shall pay all Taxes with respect to DBR or as
to which DBR is otherwise liable for the Pre-Closing Period.
Buyer shall cause DBR to file any tax return as promptly as
practicable, except when the tax return is a consolidated or
combined return for a group that includes Dravo, in which case
Dravo shall file all such tax returns as promptly as practicable.
Buyer shall cause DBR to file all tax returns relating to DBR, and
shall pay all taxes with respect thereto (except as otherwise
provided in the second sentence of Section 7.7(a)(ii) below), for
all taxable periods ending after the Closing Date. Buyer shall
prepare and file all returns and reports for its Taxes that are
for periods commencing on or after the Closing Date.
(ii) For purposes of this Agreement, if, for any federal,
state, local or foreign tax purpose, a taxable period of DBR does
not terminate on the Closing Date, the parties shall, to the
extent permitted by Applicable Law, elect with the relevant
Governmental Authority to treat such taxable period for all
purposes as a short taxable period ending as of the close of
business on the day immediately preceding the Closing Date and
such short taxable period shall be treated as a Pre-Closing
Period for purposes of this Agreement. In any case where
Applicable Law does not permit such an election to be made, then,
for purposes of this Agreement, the taxable income of DBR for
the entire taxable period shall be allocated between the Pre-
Closing Period and the remainder of the taxable period using an
interim-closing-of-the-books method, assuming that such taxable
period ended at the close of business on the day immediately
preceding the Closing Date and treating such period as a Pre-
Closing Period for purposes of this Agreement, except that
exemptions, allowances and deductions calculated on an annual
basis (such as the deduction for depreciation) shall be
apportioned on a per diem basis.
(b) Control of Contest. Each party shall have the right, at its
own expense, to control any audit or determination by any
Governmental Authority, initiate any claim for refund or amended
return and contest, resolve and defend against any assessment,
notice of deficiency or other adjustment or proposed adjustment of
Taxes for any taxable period for which that party (or any of its
affiliates) is charged with responsibility for filing a tax return
under this Agreement (except that Dravo and Sellers shall have such
right with
<PAGE> -62-
respect to any Pre-Closing Period and any taxable period that
includes a period treated as a Pre-Closing Period as described in the
second sentence of Section 7.7(a)(ii)). Neither Dravo nor any Seller
shall make any election, take any action or position on any tax return
or report, or agree to any assessment, deficiency, settlement or
other adjustment or proposed adjustment of taxes with respect to any
method of accounting or characterization of an item of income or
expense which is inconsistent with any position or reporting for the
prior year and which would have an adverse impact on Buyer (or DBR),
without the consent of Buyer, unless required by Applicable Law (in
which case notice of such shall be given to Buyer). In the event a
party not obligated under this Agreement with payment responsibility
for a taxable period or portion thereof is paid a refund with respect
to that period or portion thereof, that party shall pay the refund to
the party so obligated within thirty (30) days after receipt of the
refund (together with interest received with respect thereto). Buyer
shall promptly forward to Dravo and Sellers all written notifications
and other written communications from any Governmental Authority
received by Buyer or DBR relating to any liability for taxes for any
taxable period for which Dravo and Sellers are obligated with payment
responsibility under this Agreement and Buyer shall execute or cause
to be executed any power of attorney or other document requested by
Dravo and Sellers to enable Dravo and Sellers to take any action
Dravo and Sellers wish to take with respect to any proceedings for
any such period. The failure by Buyer to provide any such notice to
Dravo and Sellers promptly shall not relieve Dravo and Sellers of any
of their obligations with respect to the subject matter of any
notification not forwarded to Dravo and Sellers promptly, except to
the extent, and only to the extent, that Dravo and Sellers are
prejudiced as a result of such failure by Buyer to give notice
promptly.
7.8 [Reserved]
7.9 Expenses.
(a) General. Subject to subsection (b) below, each party to this
Agreement shall pay its own expenses and costs incurred in
connection with the negotiation and consummation of this Agreement
and the transactions contemplated by it.
(b) Specific. Notwithstanding the foregoing: (i) to the extent
the transactions contemplated by this Agreement are not exempt from
sales taxes, Buyer, as one party, and Dravo and Sellers, as one party,
shall each pay one-half of such taxes plus any interest or penalties;
(ii) Buyer, as one party, and Dravo and Sellers, as one party, shall
each pay one-half of the tax levied by the Commonwealth of the
Bahamas pursuant to the Stamp Act, as amended by the Fiscal
Measures [Miscellaneous Amendments] Act 1994; (iii) Buyer, as one
party, and Dravo and Sellers, as one party, shall pay one-half the
cost of obtaining title insurance binders or policies to be delivered
by them pursuant to this Agreement (including all title insurance
premiums and reinsurance costs); (iv) Buyer, as one party, and Dravo
and Sellers, as one party, shall each pay one-half of the fees and
costs relating to obtaining perimeter surveys to be delivered
pursuant to this Agreement; (v) transfer taxes, fees and costs
relating to the transfer of real property or Leases included in the
Purchased Assets
<PAGE> -63-
and all recording, indexing and filing taxes, fees and costs relating
to recording the deeds and other instruments affecting or evidencing
transfer of title to Owned Real Property or Leases included in the
Purchased Assets shall be paid by the parties in accordance with
local conveyancing customs; and (vi) fees and costs relating to the
transfer of motor vehicles included in the Purchased Assets and all
recording, indexing and filing relating to recording all documents
effecting or evidencing transfer of title to motor vehicles included
in the Purchased Assets shall be paid by the parties in accordance
with local custom. Buyer shall bear the incremental cost and expense
incurred by any surveyor in connection with preparing any Survey of
greater scope than a perimeter only survey. Dravo and Sellers shall
pay all fees and expenses of Lehman Bros. Inc. incurred in connection
with this Agreement and the consummation of the transactions
contemplated hereby. Buyer shall pay all fees and expenses of
Goldman, Sachs & Co. in connection with this Agreement and the
consummation of the transactions contemplated by this Agreement.
7.10 Accounts Receivable Collection Procedures. Unless Buyer requests
Dravo and Sellers to collect the Receivables and the DBR Receivables
pursuant to the Transition Services Agreement, Buyer will use regular
collection efforts and practices consistent with the collection of Buyer's
accounts receivable of similar size and age to collect the Receivables and
the DBR Receivables and will not discount or otherwise reduce the amount
owing on any of the Receivables or DBR Receivables in any way without the
prior written consent of Dravo. Unless otherwise directed by the customer
or identified as applicable to a specific account receivable of such
customer, payments received by Buyer from customers will be applied first
to any Receivable or DBR Receivable for such customer (with such
application to be to the oldest such Receivable or DBR Receivable), as the
case may be, before application to any accounts receivable of Buyer from
such customer arising on or after the Closing Date. Dravo and Sellers
shall repurchase from Buyer, at the aggregate unpaid amount thereof, all
Receivables and DBR Receivables which are not collected by Buyer within
one hundred twenty (120) days after the Closing Date to the extent such
uncollected Receivables and DBR Receivables exceed the amount of the
allowance for uncollectibles established in the determining Closing Value;
provided, however, that if the aggregate amount of Receivables and DBR
Receivables collected by Buyer exceeds the amount of the Receivables and
the DBR Receivables (less the allowance for uncollectibles) set forth on
the Closing Balance Sheet, then Buyer shall pay to Sellers such excess.
Any of the Receivables and the DBR Receivables which are not collected by
Buyer will be assigned to Sellers, and thereafter any amounts collected
thereon will be the property of Sellers. Dravo and Sellers shall pay Buyer
fifty percent (50%) of the aggregate unpaid amount of all LDC Receivables
which are not collected by LDC within one hundred twenty (120) days after
the Closing Date to the extent such uncollected LDC Receivables exceed the
amount of the allowance for uncollectibles established in the Closing Date
balance sheet of LDC. Buyer shall reimburse Dravo and Sellers in an
amount equal to fifty percent (50%) of any LDC Receivables collected after
the expiration of the one hundred twenty (120) day period following the
Closing Date up to the amount paid by Dravo and Sellers pursuant to the
immediately preceding sentence. The settlement of any amount owed
pursuant to this Section 7.10 shall be made no later than one hundred
thirty-five (135) days after the Closing Date. Dravo and Sellers shall
remit to Buyer on a weekly basis any amounts paid by
<PAGE> -64-
customers with respect to the Receivables or the DBR Receivables received
by Dravo and Sellers after the Closing.
7.11 Audited Financial Statements. Dravo and Sellers acknowledge that
Buyer will be required to include audited and unaudited consolidated
financial statements for the Business for periods prior to Closing in
Buyer's filings under the 1933 Act and the Securities Exchange Act of 1934,
as amended (the "1934 Act"), including in a Current Report on Form 8-K
required to be made in connection with the consummation of the
transactions contemplated by this Agreement. In connection with the
requirement that Buyer file a Current Report on Form 8-K under the 1934
Act disclosing the transactions consummated pursuant to this Agreement,
Dravo and Seller, with the cooperation of Buyer, shall promptly, and in any
event within forty-five (45) days after the Closing, cause to be delivered
to Buyer, such audited (by KPMG Peat Marwick) and unaudited consolidated
financial statements of the Business as are required by Buyer to
discharge its obligations under the 1933 Act and the 1934 Act. Such
financial statements (i) will be prepared in accordance with GAAP and
Regulation S-X, (ii) will comply in all material respects with the
requirements of the 1933 Act and the 1934 Act, and (iii) will not include any
untrue statement of material fact or misstate a material fact required to
be stated therein or necessary to make the information contained therein
not misleading. Dravo and Sellers agree, from time to time upon the request
of Buyer, to take such actions and provide to KPMG Peat Marwick and Buyer
such certificates, documents and other information as may be necessary or
appropriate to obtain the consent of KPMG Peat Marwick to include such
audited financial statements and the opinion of KPMG Peat Marwick in
respect thereof in Buyer's filings under the 1933 Act and the 1934 Act,
including any filings on Form 8-K.
7.12 Noncompetition Agreement. Buyer, Dravo, DRM and Dravo Lime
Company shall enter into and deliver a noncompetition and nondisclosure
agreement in the form of Exhibit C to this Agreement (the "Noncompetition
Agreement").
7.13 Distributorship Agreements. Buyer, Dravo and Dravo Lime Company
shall enter into distributorship agreements in the form of Exhibit D-1 and
Exhibit D-2 to this Agreement (the "Distributorship Agreements") with
respect to the purchase and sale by Buyer of certain aggregates products
from Dravo Lime Company's Longview, Alabama facility and the Maysville and
Black River, Kentucky facilities, respectively.
7.14 Transition Services Agreement. Buyer, Dravo, Sellers and DNRC
shall enter into and deliver a transition services agreement in the form of
Exhibit E to this Agreement (the "Transition Services Agreement") with
respect to the provision of certain administrative services by Dravo,
Sellers and DNRC to Buyer during a transition period.
7.15 Software License. Buyer, Dravo, Sellers and DNRC shall enter into
and deliver a software license agreement in the form of Exhibit F to this
Agreement (the "Software License") providing for the grant of a perpetual,
royalty-free license to Buyer for certain software developed by Dravo,
Sellers and/or DNRC.
<PAGE> -65-
7.16 Certain Environmental Matters.
(a) [Reserved].
(b) Post-Closing Environmental Testing. During the period
commencing on the Closing Date and ending on the fifth anniversary
of the Closing Date, Dravo may, upon reasonable prior notice to Buyer
and at Dravo's expense, conduct on one occasion an environmental
test of each production or distribution facility located on the Owned
Real Property, Leased Real Property or Subsidiary Leased Real
Property, which test may include drilling and the taking of samples.
Any such environmental test shall be scheduled in advance at a
mutually agreeable date and time and shall be conducted either by
Dravo or by an independent environmental consultant retained by
Dravo. Buyer shall provide Dravo and any such consultant with
reasonable access to such facilities, including the right to drill and
take samples; provided, however, that Buyer may require as a
condition precedent to any such access that Dravo and any
environmental consultant retained by Dravo execute and deliver a
confidentiality agreement in reasonably customary form with respect
to Buyer's operations at the facility to be tested. Buyer shall have
the right to send one or more representatives to observe any such
test. Dravo shall provide Buyer with the results received and any
other report prepared in connection with any such test.
(c) Post-Closing Environmental Visits. During the period
commencing on the Closing Date and ending on the tenth anniversary
of the Closing Date, Dravo may, upon reasonable prior notice to Buyer
and at Dravo's expense, visit no more often than once every three
years each production or distribution facility located on the Owned
Real Property, Leased Real Property or Subsidiary Leased Real
Property to conduct a visual inspection of any such facility as to
environmental matters for which Dravo may have the obligation to
indemnify Buyer pursuant to Article 9. Any such visit shall be
scheduled in advance at a mutually agreeable date and time. Dravo
may invite representatives of one or more third parties to accompany
representatives of Dravo on any such visit so long as the number of
visitors does not unreasonably interfere with the operations of the
visited facility. Buyer shall provide Dravo and any invited third
parties with reasonable access to such facilities; provided, however,
that Buyer may require as a condition precedent to any such access
that Dravo and any third party accompanying Dravo execute and
deliver a confidentiality agreement in reasonably customary form
with respect to Buyer's operations at the facility to be visited. The
right of access pursuant to this Section 7.16(c) does not include the
right to test, drill or take samples. Buyer shall have the right to
send one or more representatives to observe any such visit. Dravo
shall provide Buyer with a copy of any report prepared in connection
with any such visit.
(d) Nonexclusive; Limitation. Nothing in this Section 7.16 shall
be deemed to limit Dravo's and Sellers' rights to obtain access to any
Owned Real Property, Leased Real Property or Subsidiary Leased Real
Property if Buyer makes an On-Site Environmental Claim pursuant to
the provisions of Article 9 with respect thereto. Notwithstanding the
foregoing provisions of this Section 7.16, Dravo and Sellers
acknowledge and agree that
<PAGE> -66-
Buyer may not be able to provide access after the Closing Date to any
Owned Real Property, Leased Real Property or Subsidiary Leased Real
Property in which Buyer then does not have any interest.
7.17 [Reserved].
7.18 [Reserved].
7.19 [Reserved].
7.20 Trade Name License.
(a) License. Dravo and each of the Sellers hereby grant to
Buyer during the applicable License Term (as defined in Section
7.20(b) a non-exclusive, royalty-free license to use the trade name,
trademark or trade style of Dravo or such Seller, including the word
"Dravo" in "Dravo Basic Materials" and in "Dravo Bahama Rock" (the
"Dravo Trademarks") and "Atchafalaya Mining Company" (the "AMC
Trademark") and any trade dress associated with the Dravo
Trademarks or the AMC Trademark in connection with the operation of
the Business. Buyer shall not assign or grant a sublicense with
respect to any license granted under this Section 7.20 independent
of any permitted assignment of all of its rights under this
Agreement.
(b) License Term. The term (the "License Term") of the license
granted in Section 7.20(a) shall be as follows: (i) for use on buildings,
structures, machinery and equipment (other than motor vehicles and
water vessels), tools and fixtures included in the Purchased Assets
or the Subsidiary Assets, one hundred eighty (180) days following the
Closing Date; (ii) for use on motor vehicles and water vessels included
in the Purchased Assets or the Subsidiary Assets, one year following
the Closing Date; and (iii) for use with sales material included in the
Purchased Assets or the Subsidiary Assets, until such materials are
exhausted.
(c) Licensors' Rights. Buyer acknowledges that it will not
acquire any ownership rights in the Dravo Trademarks or the AMC
Trademark and that its use of the Dravo Trademarks and the AMC
Trademark (but not any revenues or profits accruing to Buyer as a
result of such use) shall inure solely to the benefit of Dravo and
Sellers. Buyer shall not contact or assist any other person in
contesting the validity of the Dravo Trademarks and the AMC
Trademark and shall not knowingly do or fail to do anything which
would impair the validity of Dravo's or any Seller's ownership or right
in the Dravo Trademarks and the AMC Trademark.
(d) Name Change. Buyer shall, promptly after the Closing, cause
DBR to change its corporate name to eliminate "Dravo" from it.
<PAGE> -67-
7.21 Liquidating Events. For a period of five (5) years after the
Closing Date, Dravo shall give to Buyer not less than forty-five (45) days
prior written notice of: (i) the initiation of voluntary dissolution
proceedings with respect to Dravo; (ii) the payment to the shareholders of
Dravo of a distribution in liquidation of Dravo (whether effected in a
single distribution or a series of distributions); (iii) the payment to the
shareholders of Dravo of a distribution or a series of distributions within
a twelve-month period of cash or other property in an amount exceeding
twenty-five percent (25%) of Dravo's then-current net worth; or (iv) the
payment to the shareholders of Dravo of any distribution of any capital
stock of Dravo Lime Company. Dravo shall give Buyer prompt notice of the
initiation of any involuntary dissolution proceedings. For purposes of this
Section 7.21, the term "distribution" includes a dividend, a distribution of
indebtedness of Dravo or any of its Subsidiaries, and the purchase,
redemption or other acquisition of the capital stock of Dravo.
Notwithstanding the foregoing provisions of this Section 7.21, Dravo need
not give Buyer notice pursuant to this Section 7.21 of any dividend of
Dravo capital stock or the redemption of the Series D Preferred Stock of
Dravo.
7.22 Intercompany Accounts. Prior to or at the Closing, Dravo and
Sellers shall, and shall cause their respective Subsidiaries (including DBR)
and affiliates to, take all actions necessary to pay and cancel as of the
Closing all cash overdrafts, intercompany payables or receivables,
indebtedness and other accounts between DBR, on one hand, and Dravo,
Sellers and their respective Subsidiaries (other than DBR) or affiliates, on
the other hand. Nothing in this Section 7.22 shall be interpreted or
construed to permit DBM to cancel without payment its account payable to
LDC for product purchased by DBM from LDC.
7.23 Release. If, but only if, the Closing occurs as contemplated by
this Agreement, then each of Dravo and Sellers hereby releases each of
LDC and DBR from any and all claims, rights and causes of action that Dravo
or any Seller may have or may have had against LDC or DBR prior to, or
arising with respect to any acts or omissions occurring prior to the
Closing; provided, however, that nothing in this Section 7.23 waives,
releases or restricts in any manner whatsoever any of the rights of Dravo
or any Seller arising out of this Agreement or other agreements,
instruments and documents delivered pursuant to this Agreement.
<PAGE> -68-
ARTICLE 8
[RESERVED]
ARTICLE 9
INDEMNIFICATION
9.1 General Indemnification Obligations.
(a) General. Subject to the other provisions of this Article 9,
Dravo and Sellers, as one party, and Buyer, as one party, shall
indemnify, defend and hold each other harmless from, against and in
respect of any "Loss" (as defined below) incurred or suffered by such
party with respect to, as a result of or involving matters described
in Sections 9.2 or 9.3 as being one as to which it is indemnified. The
indemnification obligations in this Article 9, although stated in terms
of the parties to this Agreement, shall be for the benefit of the
parties, their permitted successors and assigns and the officers,
directors, employees, agents and affiliates of any of them.
(b) Loss. The term "Loss" means any liability, loss, cost,
damage, expense or payment (including (i) related reasonable
attorneys', accountants' and other professional advisors' fees and
expenses and incidental damages, (ii) reasonable attorneys' fees
incurred in enforcing the indemnification provisions of this
Agreement, (iii) amounts paid in settlement (made in accordance with
the procedures of Section 9.5) of a dispute with a person not a party
to this Agreement that if resolved in favor of such third person
would constitute a matter to which a party is indemnified pursuant to
this Agreement, even though such settlement does not acknowledge
that the underlying facts or circumstances constitute a violation of
law or a breach of a representation and warranty or other matter as
to which the party is indemnified, and (iv) reasonable costs and
expenses necessary to avoid having a claim for indemnification
against another party pursuant to this Agreement, to mitigate any
such claim, or to correct facts and circumstances that would have
resulted in its having a claim for indemnification against another
party pursuant to this Agreement) plus interest on the foregoing from
the date the Loss was suffered at the rate announced by CitiBank,
N.A. in New York City as its base rate on the first business day in
January of the year in which the Loss was suffered, adjusted
annually thereafter as of January 1 of each succeeding year to such
published rate on the last business day of the preceding year. With
respect to Buyer, the term "Loss" shall also include any such
liability, loss, cost, damage, expense or payment suffered or incurred
by LDC or DBR on and after the Closing Date.
(c) No Effect of Investigation or Waiver. Neither the survival
of the representations, warranties, covenants and agreements as
described in Section 9.6, their enforceability nor any remedies for
breaches of them shall be affected either by any investigation or
finding made by any party to this Agreement or any knowledge of a
party of any breach of another party, whether such a breach (or a
party's knowledge of it) relates to periods prior to the date of this
Agreement. No waiver by a party of a misrepresentation or breach of
warranty, covenant or agreement by another party shall limit the
effectiveness of such other party's representations, warranties,
covenants or agreements contained in this Agreement or the right of
the waiving party to obtain indemnification as provided in this
<PAGE> -69-
Article 9 unless otherwise expressly provided in the waiver
instrument executed by the party waiving the misrepresentation or
breach of warranty, covenant or agreement.
(d) Subsequent Sales. Dravo and Sellers acknowledge that
Buyer, LDC and DBR may after the Closing Date sell a portion of the
Purchased Assets or the Subsidiary Assets to one or more third
persons. Notwithstanding any such subsequent sale, Buyer shall
retain all rights to indemnification provided to it pursuant to this
Article 9, including indemnification rights with respect to any
Purchased Assets or Subsidiary Assets and the business conducted
therewith that are sold to a subsequent purchaser, including the
right to be indemnified for any amounts paid by Buyer, LDC or DBR
pursuant to any indemnification obligation of Buyer, LDC or DBR to
any such subsequent purchaser with respect to such Purchased
Assets or Subsidiary Assets to the extent any such amounts
constitute an indemnifiable Loss by Dravo and Sellers under this
Article 9. Buyer may assign its rights to indemnification under this
Article 9 to any such subsequent purchaser with the prior written
consent of Dravo, which consent shall not be unreasonably withheld;
provided, however, in the event of any such assignment Dravo and
Sellers shall not be required to satisfy multiple recoveries of any
Loss, but the foregoing shall not preclude recovery by more than one
person with respect to a Loss so long as Dravo's and Sellers'
indemnification obligation with respect thereto does not exceed, in
the aggregate, the amount of such Loss.
9.2 Indemnification by Sellers. Provided that Dravo and Sellers are
notified as provided in Section 9.5 below of the occurrence of any Loss or
the discovery of any fact which could give rise to the occurrence of any
Loss within the period of the survival of representations, warranties,
covenants, agreements and related indemnities as described in Section 9.6
hereof, each of Dravo and Sellers and its successors in interest shall
jointly and severally reimburse, indemnify and hold harmless Buyer as
provided in this Article 9, at all times after the date of this Agreement,
from and against and in respect of any and all Losses arising out of,
related to, resulting from or based upon any of the following:
(a) Excluded and Excess Liabilities. Any Excluded Liability or
Excess Liability; provided, however, that Dravo and Sellers shall not
be obligated to indemnify Buyer under this Section 9.2(a) under the
circumstances described in the last sentence of Section 9.2(a)(i).
(i) For purposes of determining whether Buyer may be
indemnified for an Excluded Liability or an Excess Liability that
constitutes an Environmental Condition or Liability under this
Section 9.2(a), but not for purposes of determining the amount of
any such indemnification, the parties shall apply the Applicable
Law in effect on the Closing Date (plus statutes, laws,
regulations and other rules enacted on or prior to the Closing
Date with an effective date after such date) to the facts and
circumstances underlying the Environmental Condition or
Liability known at the time of the Claim (as defined in Section
9.5(a)). If the Applicable Law in effect at the Closing Date (plus
statutes, laws, regulations and other rules enacted on or prior
to
<PAGE> -70-
the Closing Date with an effective date after such date) would
have required the reporting or remediation of, or otherwise
imposed any obligation or liability with respect to, such
Environmental Condition or Liability, Buyer shall be entitled to
indemnification pursuant to this Section 9.2(a). If the Applicable
Law at the Closing Date (plus statutes, laws, regulations and
other rules enacted on or prior to the Closing Date with an
effective date after such date) would not have required the
reporting or remediation of, or otherwise impose any obligation
or liability with respect to, such Environmental Condition or
Liability, Dravo and Sellers shall not be required to indemnify
Buyer pursuant to this Section 9.2(a).
(ii)Dravo's and Sellers' indemnification obligations under
this Section 9.2(a) (other than with respect to On-Site
Environmental Claims (as defined in Section 9.5(c)), including with
respect to Off-Site Environmental Claims (as defined in Section
9.5(c)), shall not be subject to the limitation that Buyer provide
notice within the period for the survival of representations and
warranties described in Section 9.6. Any Environmental
Condition or Liability shall be an Excluded Liability whether or
not any such Environmental Condition or Liability was disclosed
by Dravo or a Seller or considered as part of Buyer's due
diligence examination.
(b) Representations and Warranties. Any inaccuracy in or
breach of any of the representations or warranties made by Dravo or
any Seller in this Agreement or any schedule attached hereto, any
document of transfer or conveyance or instrument of transfer or
conveyance delivered pursuant hereto, or any certificate expressly
referenced in this Agreement and delivered by or on behalf of Dravo
or any Seller, in connection with the execution of this Agreement or
the consummation of the transactions contemplated in this Agreement.
(c) Covenants and Agreements. Any breach of any of the
covenants or agreements made by Dravo or any Seller in this
Agreement or any schedule attached hereto, any document of transfer
or conveyance or instrument of transfer or conveyance delivered
pursuant hereto, or any certificate expressly referenced in this
Agreement and delivered by or on behalf of Dravo or any Seller, in
connection with the execution of this Agreement or the consummation
of the transactions contemplated in this Agreement.
(d) Bulk Transfer. Noncompliance with the bulk transfer or bulk
sales laws of any jurisdiction applicable to any transfer made
pursuant to this Agreement.
(e) Lynchburg Quarry Air Permit. The failure of DBM to have
obtained a permanent air permit for the operation of the quarry
operated by DBM located at 3818 Sharpesville Road, Lynchburg,
Highland County, Ohio 45142 commonly referred to as the Lynchburg
Quarry (the "Lynchburg Quarry").
Subsections 9.2(a) through 9.2(e) above shall be deemed to be independent
bases for indemnification and Buyer shall be entitled to indemnification
under each subsection regardless of
<PAGE> -71-
whether the basis for indemnity is included in, or excluded under, another
subsection. The indemnification provided by this Section 9.2 shall
encompass claims by Buyer against Dravo or any Seller for any Loss
sustained by Buyer and its successors and assigns whether or not
involving any claim, action or proceeding by a third party.
9.3 Indemnification by Buyer. Provided that Buyer is notified as
provided in Section 9.5 below of the occurrence of any Loss or the
discovery of any fact which could give rise to the occurrence of any Loss,
within the period of the survival of representations, warranties,
covenants, agreements and related indemnities as described in Section 9.6
hereof, Buyer and its successors in interest shall indemnify and hold
harmless Dravo and Sellers as provided in this Article 9, at all times after
the date of this Agreement, from and against and in respect of any and all
Losses arising out of, related to, resulting from or based upon any of the
following:
(a) Representations and Warranties. Any inaccuracy in or
breach of any of the representations or warranties made by Buyer in
this Agreement or any schedule attached hereto, any document of
assumption or instrument of assumption delivered pursuant hereto, or
any certificate expressly referenced in this Agreement and
delivered by or on behalf of Buyer, in connection with the execution
of this Agreement or the consummation of the transactions
contemplated by this Agreement.
(b) Covenants and Agreements. Any breach of any of the
covenants or agreements made by Buyer in this Agreement or any
schedule attached hereto, any document of assumption or instrument
of assumption delivered pursuant hereto, or any certificate
expressly referenced in this Agreement and delivered by or on behalf
of Buyer in connection with the execution of this Agreement or the
consummation of the transactions contemplated in this Agreement.
(c) Assumed and Disclosed Liabilities. Buyer's failure to
perform or discharge any Assumed Liability or Disclosed Liability.
Buyer's indemnification obligation with respect to Assumed Liabilities
under this Section 9.3(c) shall not be subject to the limitation that
Dravo and Sellers provide notice within the period for survival of
representations and warranties described in Section 9.6.
(d) Post-Closing Operations. Claims, liabilities and obligations
arising or occurring after the Closing Date in connection with (i)
Buyer's ownership, occupation or use of the Purchased Assets and the
Subsidiary Assets (including claims, liabilities and obligations
resulting solely from Buyer's use of the Dravo Trademarks or the AMC
Trademark pursuant to Section 7.20) or (ii) Buyer's operation of the
Business. Notwithstanding the foregoing, Buyer shall not indemnify
Dravo or any Seller pursuant to this Section 9.3(d) with respect to
any claim, liability or obligation described herein if Dravo or any
Seller would be obligated to indemnify Buyer pursuant to this
Agreement (disregarding the application of any limitation on the
obligation to indemnify set forth in Section 9.4) based upon the facts,
circumstances, events, acts or omissions underlying any
<PAGE> -72-
such claim, liability or obligation if such facts, circumstances,
events, acts or omissions existed or occurred prior to the Closing
Date.
(e) Multi-Employer Plan Contributions. Any withdrawal liability
(as such term is used in Section 4201 of ERISA) assessed on Dravo or
any Seller after the Closing Date by (i) any Multiemployer Plan listed
on Schedule 7.6(d)(vi) (other than the UIW Plan) in which the
Transferred Employees participated on the Closing Date as a result
of a final, non-appealable determination that the conditions of
Section 4204(a)(1) of ERISA were not met as to such Multiemployer Plan
or (ii) the UIW Plan as a result of Dravo's complete withdrawal from
the UIW Plan resulting from the consummation of the transactions
contemplated in this Agreement. Notwithstanding the foregoing
provisions of this Section 9.3(e), Buyer shall not indemnify Dravo or
any Seller with respect to any withdrawal liability assessed for a
complete or partial withdrawal asserted by a Multiemployer Plan by
reason of changes in employment with Dravo or any Seller occurring
prior to the Closing Date. With respect to the indemnity provided in
clause (ii) of the first sentence of this Section 9.3(e), Buyer shall
only be obligated to indemnify Dravo and Sellers for the amount of
any withdrawal liability assessed for a complete withdrawal from the
UIW Plan resulting from the consummation of the transactions
contemplated in this Agreement in excess of any withdrawal liability
that could be assessed for a partial withdrawal from the UIW Plan by
reason of changes in employment with Dravo or any Seller occurring
prior to the Closing Date.
Subsections 9.3(a) through 9.3(e) above shall be deemed to be independent
bases for indemnification and Dravo and Sellers shall be entitled to
indemnification under each subsection regardless of whether the basis for
indemnity is included in, or excluded under, another subsection. The
indemnification provided in this Section 9.3 shall encompass claims by
Dravo and Sellers against Buyer for any Loss sustained by Dravo and
Sellers and their respective successors and assigns whether or not
involving any claim, action or proceeding by a third party.
9.4 Certain Limitations. The foregoing indemnification obligations
are subject to the following:
(a) Deductible. Dravo and Sellers (as one party) and Buyer (as
one party) shall not be obligated to make payment to the other party
with respect to claims under Section 9.2(b) or Section 9.3(a),
respectively, unless and until, and only to the extent that, the total
Losses for which Dravo or Sellers (as one party) or Buyer (as one
party) would otherwise be liable exceed $1,250,000, in the aggregate;
provided, however, that in applying the foregoing, Dravo and Sellers
shall be considered as a single party.
(b) Cap. The aggregate liability of Dravo and Sellers to Buyer
and of Buyer to Dravo and Sellers (as one party) under this Article 9
shall not in each case exceed an amount equal to the sum of Closing
Value plus Ten Million Dollars ($10,000,000); provided, however, that
the limitation set forth in this subsection (b) shall not apply with
<PAGE> -73-
respect to any liability of Dravo and Sellers pursuant to Section
9.2(a), Section 9.2(c) and Section 9.2(e) or to any liability of Buyer
pursuant to Section 9.3(b) and Section 9.3(c).
(c) Consequential Damages. If any Loss for which Dravo and
Sellers (as one party) or Buyer (as one party) is required to indemnify
the other party pursuant to this Article 9 includes consequential
damages, the indemnifying party shall not be required to indemnify
the indemnified party for the first $250,000 of any consequential
damages included in such Loss but shall indemnify the indemnified
party for any consequential damages in excess of $250,000.
Notwithstanding the foregoing provisions of this subsection (c), any
amount not paid by an indemnifying party pursuant to this subsection
(c) shall not be applied against the cap amount set forth in Section
9.4(b) applicable to such indemnifying party.
(d) Title Insurance. If any title insurance policy delivered to
Buyer pursuant to Section 3.2(j) of this Agreement provides a
recovery to Buyer with respect to any Loss incurred by Buyer for
which Dravo and Sellers are otherwise required to indemnify Buyer
pursuant to Section 9.2, Dravo and Sellers shall only be required to
indemnify Buyer for the amount of such Loss in excess of the
recovery received by Buyer under such title insurance policy. Buyer
shall diligently seek recovery for any such Loss under such title
insurance policy. If Dravo and Sellers satisfy any Loss for which a
recovery is available under any title insurance policy delivered
pursuant to Section 3.2(j), Buyer shall assign, to the extent permitted
by Applicable Law, any rights it may have under such title insurance
policy with respect to such Loss to the extent of any indemnity
payment made by Dravo and Seller. Any amount not paid by Dravo and
Sellers pursuant to this subsection (d) shall not be applied against
the deductible amount or the cap amount set forth in Section 9.4(a)
and Section 9.4(b), respectively, applicable to Dravo and Sellers.
(e) Insurance Recoveries. The amount of any Loss suffered by
a party under this Agreement shall be reduced by the amount, if any,
of any insurance recovery (net of reasonable expenses incurred in
obtaining such recovery and the present value of any insurance
premium increase attributable to the claim underlying such recovery,
including retrospective premium adjustments) the indemnified party
shall have received from any insurance policy from an unaffiliated
insurer maintained by the indemnified party. If any such insurance
recovery is received by an indemnified party after it receives
payment or other credit under this Article 9 with respect to a Loss,
the indemnified party shall promptly refund to the party making such
indemnity payment the amount of such insurance recovery (net of
reasonable expenses incurred in obtaining such recovery and the
present value of any insurance premium increase attributable to the
claim underlying such recovery, including retrospective premium
adjustments) up to the amount of the indemnity payment. Without
limiting the foregoing, if an insurance recovery under an insurance
policy from an unaffiliated insurer maintained by the indemnified
party is created in connection with the occurrence of a Loss which
has not been collected by the indemnified party at the time the
indemnifying party or parties make payment with respect to the Loss,
then the indemnified party shall assign its rights to such insurance
recovery to the indemnifying
<PAGE> -74-
party, or if such rights are not assignable under Applicable Law, the
indemnified party shall attempt in good faith to collect such recovery
for the benefit of, but at the expense of, the indemnifying party.
9.5 Procedure.
(a) Notice. A party seeking indemnification under this Article 9
("Indemnitee") shall give notice to the other party ("Indemnitor") of
facts that are the basis of the indemnification claim (a "Claim") (i)
within a reasonable time after discovery of such facts and (ii) in any
event, within the time periods set forth in Section 9.6.
Notwithstanding the foregoing, a failure to provide any required
notice shall not prejudice any right to indemnification under this
Agreement except to the extent the Indemnitor is actually prejudiced
by such failure. The amount of the Claim as set forth in the notice
shall be based upon the Indemnitee's good faith honest opinion of the
maximum exposure to Indemnitee (including attorneys' and other
professionals' fees) presented under the circumstances of the Claim;
provided, however, the amount set forth in the notice of Claim shall
not limit Indemnitee's rights to indemnification under this Article 9
if the ultimate Loss to Indemnitee shall exceed the amount set forth
in the notice of Claim. For purposes of this Article 9, Buyer shall be
deemed to have discovered facts that are the basis of a Claim when
any Vice President or more senior officer of Buyer, but not including
any such officer who was previously employed by Dravo or Seller,
actually becomes aware of such facts.
(b) Action on Claims. The Indemnitor shall give written notice
to Indemnitee within sixty (60) days after receipt of the notice
required by Section 9.5(a) advising whether it (i) acknowledges its
obligation to indemnify Indemnitee with respect to the Claim without
any reservation of rights, (ii) acknowledges its obligation to
indemnify Indemnitee with respect to the Claim subject to a
reservation of rights, or (iii) disputes its obligation to indemnify
Indemnitee with respect to the Claim or the amount of such Claim. If
the Indemnitor acknowledges its indemnification obligation with
respect to the Claim without any reservation of rights, and (i) such
Claim is based upon an asserted liability or obligation to a person or
entity that is not a party to this Agreement (a "Third Party Claim"),
Indemnitor shall have the right to defend or settle such Third Party
Claim or (ii) such Claim is not a Third Party Claim, and if Dravo and
Seller are the Indemnitor, Indemnitee shall be entitled to satisfy
such Claim as provided in subsection (d). Notwithstanding the
foregoing, Indemnitor may not settle any Third Party Claim without the
consent of the Indemnitee, which consent shall not be unreasonably
withheld. If the Indemnitor acknowledges its indemnification
obligation with respect to the Claim subject to a reservation of
rights or disputes its obligation to indemnify Indemnitee with respect
to the Claim or the amount of the Claim and (i) such Claim is a Third
Party Claim, Indemnitee shall have the right to defend or settle such
Third Party Claim or (ii) such Claim is not a Third Party Claim,
Indemnitee may resolve or remedy such Claim and shall continue in
either case to be entitled to indemnification pursuant to this Article
9. Indemnitee may only settle a Claim in which Indemnitee is entitled
to defend or settle such
<PAGE> -75-
proposed Claim upon delivery to Indemnitor of a statement by counsel
for the Indemnitee that any such proposed settlement would be in good
faith under the circumstances of such Claim. If Indemnitor does not
believe that such proposed settlement is being made in good faith
under the circumstances, its sole remedies shall be either to assume
the defense of such Claim or pay the Indemnitee's attorneys' fees
and other out-of-pocket costs incurred thereafter in continuing the
defense of such Third Party Claim. If Indemnitor rejects any such
proposed settlement, it shall be liable to Indemnitee for any amount
paid by Indemnitee in excess of the settlement amount included in the
rejected settlement offer, whether or not Indemnitor would otherwise
be liable to indemnify Indemnitee with respect to such Third Party
Claim. Counsel selected by the party entitled to defend or settle a
Third Party Claim (including an Environmental Claim) shall be approved
by the other party, which approval shall not be unreasonably
withheld. The party not entitled to defend or settle a Third Party
Claim (including an Environmental Claim) may participate in the
defense and settlement of such Third Party Claim, at its own cost and
expense, with counsel approved by the party entitled to defend or
settle such Third Party Claim, which approval shall not be
unreasonably withheld. This Section 9.5 shall not be construed to
reduce or lessen the obligation of Indemnitor under this Article 9 if
prior to the expiration of the sixty (60) day notice period described
above in this subsection (b), the ninety (90) day period described in
subsection (c)(iii) below, or the sixty (60) day notice period described
in subsection (d) below the Indemnitee shall take action with respect
to a Claim if Indemnitee believes in good faith that such action is
reasonably required to minimize damages or avoid a forfeiture or
penalty imposed by Applicable Law.
(c) Special Provisions for Environmental Claims. In addition to
the provisions of subsections (a) and (b) of this Section 9.5, the
following provisions shall apply in connection with Claims made by
Buyer pursuant to Section 9.2(a) with respect to any Environmental
Condition or Liability or pursuant to Section 9.2(b) with respect to
any breach of a representation or warranty set forth in Section 4.11
or Section 5.12 ("Environmental Claims"):
(i) Buyer (as one party) and Dravo and Sellers (as one
party) shall (A) deliver to the other party copies of such
information in such party's possession pertaining to the
Environmental Claim as the party in possession believes is
reasonably necessary for the other party to evaluate the
Environmental Condition or Liability giving rise to the
Environmental Claim; provided, however, that any privileged
information shall not be made available to the other party if it
is reasonably necessary to maintain the privilege in order to
protect such party's material interests, and (B) make available to
the other party (upon reasonable notice during regular business
hours) its employees familiar with the circumstances underlying
such Environmental Claim and representatives of any
independent consultant retained by such party with respect to
the Environmental Condition or Liability giving rise to the
Environmental Claim. If Dravo and Sellers do not acknowledge
their obligation to indemnify Buyer with respect to the
Environmental Claim without any reservation of rights pursuant
to Section 9.5(b), Dravo and Sellers
<PAGE> -76-
shall deliver to Buyer the information pertaining to and make
available to Buyer their employees and independent consultants
having familiarity with (as described in the first sentence of
this paragraph (i)) the Environmental Condition or Liability giving
rise to the Environmental Claim in order to provide information
reasonably necessary for Buyer to evaluate Dravo's and Sellers'
decision to not acknowledge their indemnification obligation
without any reservation of rights; provided, however, that any
privileged information shall not be made available to Buyer if it
is reasonably necessary to maintain the privilege in order to
protect Dravo's and Sellers' material interests. Buyer shall
provide Dravo, Sellers and their representatives reasonable
access to any Owned Real Property, Leased Real Property or
Subsidiary Leased Real Property that is the subject of such
Environmental Claim. Reasonable access shall include the right
to test, drill and take samples with respect to the Owned Real
Property, Leased Real Property or Subsidiary Leased Real
Property that is subject to an Environmental Claim.
(ii) If any such Environmental Claim relates to property
other than the Owned Real Property, the Leased Real Property,
the Subsidiary Leased Real Property or any other Purchased
Asset or Subsidiary Asset (an "Off-Site Environmental Claim"),
and Dravo and Sellers have acknowledged their obligation to
indemnify Buyer with respect to such Off-Site Environmental
Claim without any reservation of rights pursuant to Section
9.5(b), Dravo and Sellers, subject to paragraph (iv) of this
Section 9.5(c), shall control the defense or settlement thereof,
including determining the nature and scope of any work to be
performed in remediation of any such Off-Site Environmental
Claim, selecting the contractors, consultants or engineers to be
engaged in connection therewith and deciding whether work
should be performed by Dravo, any Seller or Buyer (or their
respective contractors, consultants or engineers) or by an
authorized Governmental Authority.
(iii) If any such Environmental Claim relates to any Owned
Real Property, Leased Real Property, Subsidiary Leased Real
Property or any other Purchased Asset or Subsidiary Asset (an
"On-Site Environmental Claim"), Buyer shall promptly notify Dravo
and Sellers of the remediation action that Buyer proposes to
take to satisfy such On-Site Environmental Claim. If Dravo and
Sellers object to Buyer's proposed remedial action within ninety
(90) days of receipt of Buyer's notice, then Dravo and Sellers, if
they have acknowledged their indemnification obligation to Buyer
with respect to such On-Site Environmental Claim without any
reservation of rights, shall satisfy the remediation obligation
with respect to such On-Site Environmental Claim in accordance
with the procedures for the defense and settlement of Off-Site
Environmental Claims set forth in paragraph (ii) above and
subject to the provisions of paragraph (iv) below. If Dravo and
Sellers have not acknowledged their indemnification obligation to
Buyer with respect to such On-Site Environmental Claim without
any reservation of rights, Buyer may satisfy the remediation
obligation with respect to such On-Site Environmental Claim and
shall continue to be entitled to pursue its indemnification claim
pursuant to this Article 9.
<PAGE> -77-
(iv) Buyer shall have the right to approve the defense or
settlement of any Environmental Claim (including the
determination of the nature and scope of any work to be
performed in the remediation of any Environmental Claim, the
selection of the contractors, consultants or engineers to be
engaged in connection therewith and the determination of
whether work should be performed by Dravo, any Seller or Buyer
(or their respective contractors, consultants or engineers) or by
an authorized Governmental Authority), which approval shall not
be unreasonably withheld. Dravo and Sellers acknowledge that in
determining whether to approve any such defense or settlement,
it is reasonable for Buyer to consider the disruption of Buyer's
operations at the affected site resulting from such defense or
settlement and whether the defense or settlement provides for
the satisfaction of such Environmental Claim in a manner
consistent with all then applicable guidelines and standards
established by any Governmental Authority and generally
applicable industry standards. Any settlement of a third party
Environmental Claim made by Dravo and Sellers with a person
other than a Governmental Authority shall provide for the
complete release of Buyer with respect to such Environmental
Claim. Any settlement of a third party Environmental Claim made
by Dravo and Sellers with a Governmental Authority shall provide
for a complete release of Buyer if such Governmental Authority
provides releases in the course of performing its duties in
administering any Environmental Laws. In considering whether a
proposed defense or settlement is disruptive of its activities at
the affected site, Buyer acknowledges that it will take all
reasonable actions requested by Dravo and Sellers to minimize
remediation costs. Any work performed under the control of
Dravo and Sellers pursuant to this Section 9.5(c) shall be
performed in a professional manner in accordance with all
applicable guidelines of any Governmental Authority. Dravo and
Sellers shall have the right to approve the defense, settlement
or remediation of any Environmental Claim which Buyer is
defending or remediating in accordance with the procedures set
out in Section 9.5(b).
(v) During the course of Dravo's and Sellers' defense,
settlement or remediation of any Environmental Claim, Dravo and
Sellers shall, and shall cause any independent consultants or
contractors retained in connection therewith to, consult with
and advise Buyer with respect to the defense, settlement or
remediation of such Environmental Claim, coordinate with Buyer
their activities and the activities of its consultants and
contractors at the affected facility and provide Buyer with
copies of reports, samples and all other non-privileged
information prepared by it or its consultants and contractors
with respect to such Environmental Claim as Buyer may
reasonably request. If Buyer is controlling the defense,
settlement or remediation of any On-Site Environmental Claim,
Buyer shall, and shall cause any independent consultants or
contractors retained in connection therewith to, consult with
and advise Dravo and Sellers with respect to the defense,
settlement or remediation of such On-Site Environmental Claim
and provide Dravo and Sellers with copies of reports, samples
and other non-privileged information prepared by it or its
consultants and contractors with respect to such On-Site
Environmental Claim
<PAGE> -78-
as Dravo may reasonably request. The parties agree to
cooperate in the defense, settlement and remediation of any
Environmental Claim.
(d) Satisfaction of Claims. If Indemnitor has acknowledged its
obligation to indemnify Indemnitee with respect to a Claim without any
reservation of rights (other than an Environmental Claim, which is
governed by the procedures set forth in Section 9.5(c)) and does not
dispute the amount of such Claim, Indemnitee shall be entitled to
immediate satisfaction of any related Loss. If the Loss relates to a
Claim that is not a Third Party Claim, Indemnitee shall give notice to
Indemnitor describing the remedial action that Indemnitee proposes to
take to satisfy such Claim. Indemnitor may object in writing to
Indemnitee's proposed remedial action within sixty (60) days of
receipt of Indemnitor's notice, which objection shall include
Indemnitor's proposed course of remedial action to satisfy the Claim.
Indemnitee shall allow Indemnitor to undertake its proposed course of
remedial action if and only if such proposed course of remedial
action (i) provides for the satisfaction of the Claim in a manner
consistent with all then applicable guidelines and standards
established by any Governmental Authority and generally applicable
industry standards and (ii) will not be unreasonably disruptive of
Indemnitee's operations at the affected site.
(e) Setoff. If in the event Buyer is the Indemnitee, it shall
have the right: (i) to satisfy any Loss from any payment(s) due Dravo
or any Seller under other provisions of this Agreement until such
Loss has been satisfied in full; and (ii) withhold the amount of any
Claim from any payment(s) due Dravo or any Seller under other
provisions of this Agreement, and shall deposit the amount of such
Claim so withheld in an interest bearing money market account of
Buyer. Any interest on the account so deposited shall be retained in
such money market account and be available to satisfy the
indemnification rights of Buyer pursuant to this Article 9. Buyer may
setoff against any payment owed to Dravo or any Seller under this
Agreement any amount that Buyer is required to pay because of
Dravo's or any Seller's failure to remit or pay any Taxes, including
interest or penalties, imposed upon Dravo or any Seller.
9.6 Nature and Survival of Representations and Warranties. All
statements contained in this Agreement and the schedules hereto made by a
party, any document of transfer or conveyance or any instrument of
transfer or conveyance delivered pursuant hereto and the certificates
specifically referred to herein delivered by a party, or in connection with
the transactions contemplated hereby, shall be deemed representations and
warranties by such party. The representations, warranties or related
indemnities of the parties contained herein or in any instrument or
document delivered or to be delivered pursuant to this Agreement shall
survive the Closing; provided, however, that (i) representations and
warranties contained in Sections 4.2, 4.6(b), -(c), -(d) and -(e), 4.12, 4.17,
5.7(b), -(c), -(d) and -(e), 5.13 and 5.19 and related claims for
indemnification shall survive for a period of one year from the Closing
Date; (ii) representations and warranties contained in Section 4.7(e),
Section 4.11 (with respect to any Environmental Condition or Liability on
lands
<PAGE> -79-
other than the Owned Real Property and the Leased Real Property), 5.8(e)
and 5.12 (with respect to any Environmental Condition or Liability on lands
other than the Subsidiary Leased Real Property) and related claims for
indemnification shall survive without limitation; (iii) representations and
warranties contained in Section 4.11 (with respect to the Owned Real
Property and the Leased Real Property) and 5.12 (with respect to the
Subsidiary Leased Real Property) and related claims for indemnification
shall survive for a period of ten (10) years from the Closing Date; (iv) any
representations or warranties and related claims for indemnification
relating to any claim for Taxes shall survive until ninety (90) days after
the expiration of the applicable statute of limitations for the taxing
authority to file claims or assessments against the taxpayer; and (v) all
other representations and warranties and related claims for
indemnification shall survive for a period of three (3) years from the
Closing Date. Notwithstanding the preceding sentence, if Indemnitee shall
have given notice pursuant to Section 9.5(a) prior to the date on which such
representation or warranty which shall be the basis of a Claim would
otherwise terminate pursuant to this Section 9.6, then such representation
or warranty shall survive the time at which it would otherwise terminate
pursuant hereto with respect to the subject matter referred to in such
notice. The survival periods for representation and warranties set forth
in this Section 9.6 are the exclusive periods of time in which any party may
assert Claims for misrepresentation or breach of warranty contained in
this Agreement and shall not be extended or shortened by the provisions of
Applicable Law. Covenants and agreements made by a party in this
Agreement or in any document of transfer or conveyance or any instrument
of transfer or conveyance delivered pursuant hereto shall survive the
Closing, and any claims for indemnification with respect to the breach of
any such covenant or agreement shall survive until the expiration of the
applicable statute of limitations related to such breach. The
indemnification rights of Buyer under Section 9.2(a) with respect to Losses
relating to On-Site Environmental Claims shall survive the Closing for a
period of ten (10) years from the Closing Date. Notwithstanding anything
else in this Agreement to the contrary, the indemnification rights of Buyer
under Sections 9.2(a) (except insofar as Section 9.2(a) relates to Losses in
respect of On-Site Environmental Claims), and the indemnification rights of
Dravo and Seller under Section 9.3(c), shall survive the Closing without
limitation.
9.7 No Waiver. The failure of Buyer to withhold payment of any
amount owed to Dravo or any Seller as a reserve when it had the right to do
so in a particular instance shall not constitute a waiver of its right to
withhold any subsequent payment as a reserve or any other right under
this Article 9.
9.8 Return of Lynchburg Quarry Assets. If Buyer is enjoined from or
ordered to cease operating the Lynchburg Quarry prior to Buyer's obtaining
a permanent air permit for the Lynchburg Quarry because of the failure to
have such a permit, and any such injunction or order is not dissolved,
rescinded or otherwise terminated within thirty (30) days following
issuance, Buyer, in addition to any remedy it may have under any other
provision of this Agreement (including Section 9.2(e)), for a period of five
(5) years from the date such injunction or order was issued, shall have the
right and option, if such injunction or order is then continuing, exercisable
in its sole discretion, to put the properties and assets then comprising the
Lynchburg Quarry to DBM; provided, however, Buyer shall not assert any
claim against Dravo or Sellers for lost profits resulting from any such
injunction or order. Following the Closing, Buyer shall use reasonable
efforts consistent with the effort made by DBM to procure a permanent air
permit for the
<PAGE> -80-
Lynchburg Quarry. If Buyer elects to put the properties and assets
comprising the Lynchburg Quarry to DBM, Dravo and Sellers shall reimburse
Buyer in an amount equal to one hundred thirty percent (130%) of the sum of
(i) the book value of the Purchased Assets comprising the Lynchburg Quarry
(including the improvements to Johnson Road but excluding product
inventory) as reflected on the Closing Balance Sheet, (ii) the book value of
any property, plant or equipment added by Buyer to the Lynchburg Quarry
after the Closing Date as reflected on Buyer's balance sheet and (iii) the
book value of any product inventory at the Lynchburg Quarry as reflected
on Buyer's balance sheet and adjusted to include (A) blasting costs at $.15
per ton and (B) the quantity of inventories included in the Closing Value
deemed by Buyer to not be saleable finished inventory (and completely
written down on Buyer's books) at the value included in the Closing Value.
Dravo and Sellers shall also pay any applicable sales or transfer taxes. In
determining such book value, the book value of any property, plant or
equipment added to the Lynchburg Quarry by Buyer after the date of such
injunction or order shall be excluded, unless Buyer was committed to make
any such addition prior to the date of such injunction or order. If Buyer is
enjoined from or ordered to cease operating the Lynchburg Quarry prior to
Buyer's obtaining a permanent air permit for the Lynchburg Quarry because
of the failure to have such a permit and Buyer does not exercise its put
right set out in this Section 9.8, Dravo and Sellers shall reimburse Buyer
in an amount equal to fifty percent (50%) of the fixed costs incurred by
Buyer with respect to the Lynchburg Quarry during the period in which
Buyer is enjoined from or ordered to cease operating the Lynchburg Quarry.
Any payment by Dravo and Sellers pursuant to this Section 9.8 shall be made
contemporaneously with Buyer's execution and delivery of instruments
necessary to convey and transfer to DBM the properties and assets
comprising the Lynchburg Quarry in the case of Buyer's exercise of its put
right or within ten (10) business days after Buyer provides Dravo and
Sellers with an invoice setting forth in reasonable detail the fixed costs
incurred if Buyer did not exercise its put right, as the case may be. The
put right contained in this Section 9.8 shall terminate upon Buyer obtaining
a permanent air permit at the Lynchburg Quarry.
ARTICLE 10
TERMINATION AND ABANDONMENT.
10.1 [Reserved].
10.2 Specific Performance and Other Remedies. Dravo and Sellers each
acknowledge that the rights of Buyer to consummate the transactions
contemplated by this Agreement are special, unique and of extraordinary
character, and that, in the event that Dravo or any Seller violates or fails
and refuses to perform any covenant or agreement made by it in this
Agreement, then Buyer may be without adequate remedy at law. Each of
Dravo and Sellers agrees, therefore, that in the event that it violates or
fails and refuses to perform any covenant or agreement made by it in this
Agreement, Buyer may, in addition to any remedies at law for damages or
other relief, institute and prosecute an action in any court of competent
jurisdiction to enforce specific performance of such covenant or
agreement or seek any other equitable relief.
<PAGE> -81-
ARTICLE 11
GENERAL PROVISIONS
11.1 Notices. All notices, requests, demands, and other communications
hereunder shall be in writing, and shall be deemed to have been duly given
if (i) delivered in person, (ii) made by facsimile transmission, (iii) sent by
overnight courier service (with all fees prepaid) or (iv) mailed by
registered or certified mail, return receipt requested (with postage
prepaid), as follows:
Notices to Buyer: President
Martin Marietta Materials, Inc.
2710 Wycliff Road
Raleigh, North Carolina 27607
Facsimile No.: 919/783-4695
with a copy to: Vice President and General Counsel
Martin Marietta Materials, Inc.
2710 Wycliff Road
Raleigh, North Carolina 27607
Facsimile No.: 919/783-4535
Notices to Dravo: Dravo Corporation
and Sellers 3600 One Oliver Plaza
Liberty Avenue
Pittsburgh, Pennsylvania 15222
Attention: President and Chief
Executive Officer
Facsimile No.: 412/566-5551
with a copy to: Buchanan Ingersoll Professional Corporation
600 Grant Street, 58th Floor
Pittsburgh, Pennsylvania 15219
Attention: Michael J. Flinn
Facsimile No.: 412/562-9316
and
Dravo Corporation
3600 One Oliver Plaza
Liberty Avenue
Pittsburgh, Pennsylvania 15222
Attention: General Counsel
Facsimile No.: 412/566-3116
<PAGE> -82-
Any such notice, request, demand or other communication shall be deemed to
be given if delivered in person, on the date delivered, if made by facsimile
transmission, on the date transmitted, or, if sent by overnight courier
service or mailed by registered or certified mail, on the date sent or mailed
as evidenced by the date of the bill of lading or postmark, as the case may
be; and shall be deemed received if delivered in person, on the date of
personal delivery, if made by facsimile transmission, upon confirmation of
receipt (including electronic confirmation), if sent by overnight courier
service, on the first business day after the date sent, or if by registered
or certified mail, on the date of delivery or attempted delivery as
indicated by the return receipt. Any party sending a notice, request,
demand or other communication by facsimile transmission shall also send a
hard copy of such notice, request, demand or other communication by one of
the other means of providing notice set forth in this Section 11.1. Any
notice, request, demand or other communication shall be given to such other
representative or at such other address as a party to this Agreement may
furnish to the other parties in writing pursuant to this Section 11.1.
11.2 Remedies Cumulative; Costs. The rights and remedies specified in
any provision of this Agreement are in addition to all the rights and
remedies a party may have under any other provision of this Agreement or
Applicable Law, including any right to equitable relief and any right to sue
for damages under this Agreement, and all such rights and remedies are
cumulative; provided, however, that a party shall not be entitled to multiple
recoveries of the same loss. Without limiting the foregoing, no exercise of
a remedy shall be deemed an election excluding any other remedy (any such
claim by any other party being hereby waived). A party (with Dravo and
Sellers being treated as one party) who prevails in enforcing rights and
remedies under this Agreement shall (in addition to any other relief
hereunder) be paid by the other party all costs, fees and expenses,
including reasonable attorneys' fees, incurred by the prevailing party in
enforcing such rights and remedies.
11.3 Consent to Jurisdiction; Waiver of Jury Trial. Dravo and Sellers
agree that they will bring any action or proceeding for the enforcement of
any right, remedy, obligation or liability arising under or in connection with
this Agreement solely in the state or federal courts located in Raleigh,
North Carolina. Buyer agrees that it will bring any action or proceeding
for the enforcement of any right, remedy, obligation or liability arising
under or in connection with this Agreement solely in the state or federal
courts located in Pittsburgh, Pennsylvania. Each party hereby irrevocably
waives its right to bring any action or proceeding against the other except
in accordance with the preceding sentences. Each of the parties
irrevocably waives any right to a jury trial with respect to any matter
arising out of or in connection with this Agreement. If any party seeks to
enforce its right to indemnification under this Agreement for any Loss
resulting from a Third Party Claim by joining another party to a judicial
proceeding before a jury in which such third party is a party, the parties
shall request the court to try the claims between the parties to this
Agreement without submitting the matter to the jury.
11.4 Assignment; Successors in Interest.
(a) By Buyer. Except with the prior written consent of Dravo
(which shall not be unreasonably withheld), no assignment by Buyer of
any of its rights and obligations under
<PAGE> -83-
this Agreement may be made prior to Closing other than to an entity
controlled by, or under common control with, Buyer. Buyer intends to
assign prior to the Closing its rights to purchase the joint venture
interest in LDC owned by AMC to a wholly owned subsidiary, and Dravo
and Sellers acknowledge and agree that Buyer may make such an
assignment. Following the Closing, Buyer may assign any of its rights
and obligations under this Agreement. In any such event, Buyer shall
remain liable for the performance of all such assigned, transferred
and assumed obligations.
(b) By Dravo and Sellers. Except with the prior written consent
of Buyer (which shall not be unreasonably withheld), no transfer or
assignment by Dravo or any Seller of any of its rights under this
Agreement shall be made to any person or entity.
(c) Binding Nature. This Agreement shall be binding upon the
parties to this Agreement and their respective successors and
assigns (whether or not permitted), shall inure to the benefit of the
parties to this Agreement and their respective permitted successors
and assigns (and to or for the benefit of no other person or entity,
whether an employee or otherwise, whatsoever), and any reference to
a party to this Agreement shall also be in reference to a successor
or assign.
(d) No Third Party Rights. Nothing in this Agreement shall be
construed to give any person other than the parties to this
Agreement any legal or equitable right, remedy or claim under or with
respect to this Agreement or any provisions of this Agreement.
11.5 Construction. This Agreement shall be construed and enforced in
accordance with the laws of the State of North Carolina, except that
matters relating to the conveyance of the Owned Real Property and the
transfer or assignment of the Leases shall be governed by the laws of the
jurisdiction where the Owned Real Property is located or as specified in
the Lease.
11.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.7 Severability. If any term or other provision of this Agreement is
determined by a court of competent jurisdiction to be invalid, illegal or
incapable of being enforced by any rule of law or public policy, all of the
terms and provisions of this Agreement will nevertheless remain in full
force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner or adverse
to any party hereto.
11.8 Exhibits and Schedules. Each exhibit and schedule referred to in
this Agreement, each attachment to any exhibit or schedule, and each other
attachment to this Agreement (but not including the Noncompetition
Agreement, the Distributorship Agreements, the Transition Services
Agreement, the Software License and the Aliquippa Terminal Agreement as
executed and delivered by the parties thereto) is hereby incorporated by
reference into this Agreement and is made a part of this Agreement as if
set out in full in the first place that reference is made to it.
<PAGE> -84-
11.9 Joint and Several. The obligations and liabilities of Dravo and
Sellers under this Agreement shall be joint and several.
11.10Entire Agreement. This Agreement, which is deemed to include all
exhibits, schedules and certificates delivered pursuant to the terms
hereof, embodies the entire agreement of the parties hereto with respect
to the subject matter hereof and supersedes all prior agreements,
promises, covenants, arrangements, communications, representations or
warranties, whether oral or written, whether expressed or implied, by any
officer, employee or representative of any party hereto with respect
thereto, including (i) the letter confidentiality agreement dated April 20,
1994 between Buyer and Lehman Bros. Inc., as agent for Dravo and Sellers,
(ii) the correspondence by Buyer and its representatives to Lehman Bros.
Inc. as agent for Dravo and Sellers dated July 11, July 18 and July 27, 1994,
and (iii) the letter of intent dated September 26, 1994 among Buyer, Dravo
and DBM.
11.11Amendment; Waiver. This Agreement may be amended, and any
provision hereof waived, but only in a writing signed by the party against
whom such amendment or waiver is sought to be enforced. The granting of
any waiver with respect to any failure to comply with any provision of this
Agreement shall not operate as a waiver of, or estoppel with respect to,
any subsequent or other failure to comply with any provision of this
Agreement.
<PAGE> -85-<PAGE>
IN WITNESS WHEREOF the parties have duly executed this Agreement as
of the day and year first above written.
BUYER:
MARTIN MARIETTA MATERIALS, INC.
(Corporate Seal)
Attest: By: STEPHEN P. ZELNAK, JR.
Stephen P. Zelnak, Jr.
President
BRUCE A. DEERSON
Bruce A. Deerson, Secretary
DRAVO:
(Corporate Seal)
Attest:
JAMES J. PUHALA
James J. Puhala, Secretary<PAGE>
DRAVO CORPORATION
By: ERNEST F. LADD III
Ernest F. Ladd, III
Executive Vice President
DBM:
(Corporate Seal)
Attest:
JAMES J. PUHALA
James J. Puhala, Secretary<PAGE>
DRAVO BASIC MATERIALS COMPANY, INC.
By: ERNEST F. LADD III
Ernest F. Ladd, III
Executive Vice President
AMC:
(Corporate Seal)
Attest:
JAMES J. PUHALA
James J. Puhala, Secretary
<PAGE> -86-<PAGE>
ATCHAFALAYA MINING COMPANY, INC.
By: ERNEST F. LADD III
Ernest F. Ladd, III
Executive Vice President
Pursuant to Item 601(b)(2) of Regulation S-K of the Securities and
Exchange Commission, the Exhibits and Schedules to the Asset Purchase
Agreement are omitted. The Registrant will furnish supplementally to the
Commission a copy of any omitted Exhibit or Schedule to the Asset Purchase
Agreement upon request.
<PAGE> -87-
NONCOMPETITION AND
NONDISCLOSURE AGREEMENT
THIS IS A NONCOMPETITION AND NONDISCLOSURE AGREEMENT ("this Agreement")
dated January 3, 1995 by and among MARTIN MARIETTA MATERIALS, INC., a North
Carolina corporation (the "Purchaser"); DRAVO BASIC MATERIALS COMPANY, INC.,
an Alabama corporation (the "Company"); DRAVO LIME COMPANY, a Delaware
corporation ("DLC"); and DRAVO CORPORATION, a Pennsylvania corporation
("Dravo"), and in which the parties to this Agreement, in consideration of the
mutual agreements set forth below and conditions contained in this Agreement
(the mutuality, adequacy, receipt and sufficiency of which are hereby acknowl-
edged), hereby agree as follows:
1. Background. This Agreement is being executed and delivered
contemporaneously with and as a condition to the acquisition by the Purchaser
of substantially all the assets of the Company, pursuant to that certain Asset
Purchase Agreement of even date herewith among the Purchaser, Dravo, the
Company and Atchafalaya Mining Company, Inc. (the "Acquisition Agreement").
The Company is engaged in the business of quarrying, dredging, producing,
marketing, selling and distributing aggregates products, including crushed
stone, pulverized limestone, shell, and sand and gravel from numerous
locations, principally for construction, industrial, utility and environmental
uses (the "Business"). Dravo owns one hundred percent (100%) of the
outstanding capital stock of each of the Company and DLC. DLC is engaged in
the business of producing, marketing, distributing and selling lime, and
markets, distributes and sells crushed limestone aggregates products which are
produced in connection with its lime business. Contemporaneously with the
execution and delivery of this Agreement, DLC and the Purchaser have entered
into those certain Crushed Limestone Aggregates Distributorship Agreements
with respect to DLC's Longview, Alabama facility and its Maysville and Black
River, Kentucky facilities, which provide for the purchase by the Purchaser of
crushed limestone aggregates products produced by DLC (the "Distributorship
Agreements"). Dravo, DLC and the Company understand that the Purchaser will
not consummate such acquisition or enter into the Distributorship Agreements
without the assurance that Dravo, DLC and the Company will not engage in the
activities prohibited by this Agreement, and in order to induce the Purchaser
to consummate the acquisition and other transactions contemplated by the
Acquisition Agreement (including the Distributorship Agreements), Dravo, DLC
and the Company agree to restrict their actions as provided in this Agreement.
Dravo, DLC and the Company acknowledge and agree that such restrictions are
reasonable in light of the business of the Company and the direct and
substantial benefits of the acquisition to Dravo, DLC and the Company.
2. Consideration. As consideration for the covenants and agreements of
Dravo, DLC and the Company in this Agreement and the Distributorship
Agreements, the Purchaser shall pay to the Company, Dravo and DLC Eight
Million Dollars ($8,000,000.00) contemporaneously with the execution and
delivery of this Agreement. As the parent corporation of DLC and the Company,
Dravo acknowledges and agrees that the substantial benefits to DLC of the
Distributorship Agreements and to the Company of the transaction consummated
pursuant to the Acquisition Agreement are a direct benefit to Dravo and also
constitute good and valuable
<PAGE> -1-
consideration, the receipt and adequacy of which are hereby acknowledged by
Dravo, for the covenants and agreements of Dravo in this Agreement.
3. Territory. Dravo, DLC and the Company acknowledge and agree that
the Company sells and distributes aggregates products, including crushed
stone, pulverized limestone, shell, and sand and gravel, throughout the
geographic areas listed on Schedule A attached to this Agreement (the
"Territory") and that the Purchaser intends to increase its sales and
operations throughout the Territory.
4. Noncompetition. Each of Dravo, DLC and the Company agrees that
during the period extending from the date of this Agreement through the eighth
(8th) anniversary thereof (or if earlier, the complete termination by
Purchaser of the Business as conducted on the date of this Agreement), it will
not, directly or indirectly, either: (i) have any interest in (whether as
proprietor, manager, security holder, or otherwise), (ii) act as agent,
broker, or distributor for or adviser or consultant to, or (iii) in any way
assist (whether by solicitation of customers or employees or otherwise) any
person, firm, corporation or business entity which is engaged, or which Dravo,
DLC or the Company reasonably knows is undertaking to become engaged, in the
Territory in the Business, with respect to the Company, and in the Territory
in the Restricted Business (as defined herein) with respect to Dravo and DLC;
provided, however, that this Section 4 shall not prohibit Dravo, DLC or the
Company from owning five percent (5%) or less of the outstanding equity
securities registered under Section 12 of the Securities Exchange Act of 1934
of any corporation or business entity engaged in the Territory in the
Business. Notwithstanding the foregoing, the provisions of this Agreement
shall not be construed to prohibit Dravo or DLC from engaging, whether within
or outside the Territory, in (i) the production, marketing, distribution and
sale of lime and related products other than products included within the
Restricted Business (defined below), (ii) the activities of DLC permitted by
or pursuant to the Distributorship Agreements, (iii) mining, quarrying,
producing, marketing and selling limestone for uses other than those included
in the Restricted Business, or (iv) the activities permitted pursuant to
Section 8 of this Agreement. "Restricted Business" means the quarrying,
dredging, production, marketing, sale and distribution of aggregates products
for use in (i) the construction of civil, commercial and residential
structures, underground pipelines, roads, beddings for pipelines, roads and
railroads, and other similar structures; (ii) the production of asphalt and
ready mix concrete, concrete pipe and block and other similar construction
materials; (iii) the construction of riverbanks, shores, jetties, islands, and
in similar uses; and (iv) the production of agricultural limestone ("aglime")
for use in soil neutralization applications for agricultural products.
5. No Interference with Customers. Each of Dravo, DLC and the Company
agrees that during the period extending from the date of this Agreement
through the eighth (8th) anniversary thereof (or if earlier the complete
termination of the Business as conducted on the date of this Agreement), it
will not, directly or indirectly:
(a) solicit, divert or take away, or attempt to solicit,
divert or take away, the business of any Customer with respect to the
products or services of the Restricted
<PAGE> -2-
Business sold (or offered for sale) to such Customer during the twelve
month period prior to the date of this Agreement; or
(b) attempt or seek to cause any of the Customers to
refrain, in any respect, from maintaining or acquiring from or through
the Purchaser any product or service of the Restricted Business sold (or
offered for sale) to such Customer during the twelve-month period prior
to the date of this Agreement.
As used in this section, "Customer" means any actual customer of the Company
or any potential customer of the Company located in the Territory served or
solicited within the twelve-month period prior to the date of this Agreement.
6. No Interference With Employees. Each of Dravo, DLC and the Company
agrees that for the period extending from the date of this Agreement through
the eighth (8th) anniversary thereof (or if earlier the complete termination
of the Business as conducted on the date of this Agreement), it will not,
directly or indirectly, request or induce any employee of the Purchaser to
terminate his employment with the Purchaser and accept employment with another
business entity engaged in the Business in the Territory.
7. Nondisclosure.
(a) General. Each of Dravo, DLC and the Company
recognizes and acknowledges that it has had access to certain highly
sensitive, special, unique information of the Company that is
confidential or proprietary and which has been sold by the Company to
the Purchaser. Each of Dravo, DLC and the Company hereby covenants and
agrees that it will not (i) as to Trade Secrets, so long as they remain
Trade Secrets, and (ii) as to Confidential Information, during the
period from the date of this Agreement through the eighth (8th) annual
anniversary thereof, use or disclose any Confidential Information or
Trade Secrets except to authorized representatives of the Purchaser;
provided, however, that the foregoing restrictions shall not apply to
items that, through no fault of Dravo, DLC or the Company have entered
the public domain; provided, further, that the foregoing restrictions
shall terminate upon the complete termination of the Business as
conducted on the date of this Agreement. Notwithstanding the foregoing
provisions of this Section 7(a), each of Dravo, DLC and the Company may
(i) disclose Trade Secrets and Confidential Information to the extent
necessary to establish rights under this Agreement, the Acquisition
Agreement or the Distributorship Agreements and (ii) disclose Trade
Secrets and Confidential Information to the extent it is required to do
so in order to comply with a governmental or judicial order or decree,
but upon receiving notice that any such order or decree is being sought,
it will promptly notify the Purchaser so that it may seek an appropriate
protective order.
(b) Certain Definitions. For purposes of this Agreement,
the following definitions shall apply:
<PAGE> -3-
(i) "Trade Secret" means the whole or any portion or phase of
any scientific or technical information, design, process, procedure,
formula, or improvement with respect to the Business on the date of
this Agreement, which has been sold to Purchaser, and that is
valuable and secret (in the sense that it is not generally known to
competitors of the Company or the Purchaser).
(ii) "Confidential Information" means any data or information
with respect to the Business on the date of this Agreement, other
than Trade Secrets, which data or information has been sold to
Purchaser, and that is material to the Company and not generally
known by the public. To the extent consistent with the foregoing
definition, Confidential Information includes without limitation:
(A) reports, pricing, sales manuals and training manuals, selling
and pricing procedures, and financing methods of the Company,
together with any techniques utilized by the Company in designing,
developing, manufacturing, testing or marketing its products or in
performing services for customers and accounts of the Company; (B)
customer lists, the special requirements of particular customers,
and the current and anticipated requirements of customers generally
for the products of the Company; (C) any contracts, working
drawings, designs, product specifications, software programs, source
codes or similar information of the Company; (D) the specifications
of any new products under development by the Company; and (E) the
business plans and financial statements, reports and projections of
the Company.
Trade Secrets and Confidential Information shall include such
information whether it is in written or other form.
(c) Ownership; Return. Each of Dravo, DLC and the Company
acknowledges that all Trade Secrets and Confidential Information are and
shall be the sole, exclusive and valuable property of the Purchaser, and
that Dravo, DLC and the Company has and shall acquire no right, title or
interest therein. Any and all printed, typed, written or other material
which Dravo, DLC and the Company may have or obtain with respect to
Trade Secrets or Confidential Information (including without limitation
all copyrights therein) shall be and remain the exclusive property of
the Purchaser, and any and all material (including any copies) shall,
upon request of the Purchaser, be promptly delivered by Dravo, DLC and
the Company to the Purchaser.
8. Certain Exceptions.
(a) Acquisition or Development of Facilities. If during
the period commencing on the date of this Agreement and ending on the
eighth (8th) anniversary thereof, the Company, Dravo or DLC, or any
affiliate of the Company, Dravo or DLC, (i) acquires, either by stock or
asset transaction, a facility and a minority of the sales of that
facility are Restricted Business sales in the Territory or (ii) opens a
new facility and thirty percent (30%) or less of the expected sales of
that facility are Restricted Business sales in the Territory, then the
Company, Dravo or DLC shall be entitled to engage in the Restricted
Business in the Territory, but only if the Company, Dravo or DLC (or any
<PAGE> -4-
affiliate) negotiates in good faith or causes its affiliate to negotiate
in good faith with the Purchaser to reach an agreement for the purchase
by the Purchaser of crushed limestone aggregates products produced at
such acquired or new facility on terms similar to the terms set forth in
the Distributorship Agreement between DLC and the Purchaser for DLC's
Black River and Maysville, Kentucky lime facilities (the "Black River
and Maysville Agreement") or in the Distributorship Agreement between
DLC and the Purchaser for DLC's Longview, Alabama lime facility (the
"Longview Agreement"), whichever is more analogous to the circumstances
related to the acquired or developed facility; provided, however, that
the Company, Dravo, DLC (or any affiliate) will only be required to
enter into such an agreement for a period of time equal to the then
remaining term of this Agreement.
(b) Lynchburg Quarry. If during the term of this
Agreement the Purchaser exercises its rights to put the assets
comprising the Lynchburg Quarry (as defined in the Acquisition
Agreement) to the Company pursuant to Section 9.8 of the Acquisition
Agreement, Dravo, the Company and DLC shall have the right to operate
the assets comprising the Lynchburg Quarry and to engage in the
Restricted Business in the Territory from the location of the Lynchburg
Quarry.
(c) Exception Inapplicable. Nothing in this Section 8 is
intended to permit the Company, Dravo, DLC (or any affiliate) to engage
in the Restricted Business in the Territory from (i) any acquired
facility which at the time of acquisition has fifty percent (50%) or
more of its sales due to the Restricted Business in the Territory; (ii)
any newly opened facility which will have more than thirty percent (30%)
of its sales attributable to the Restricted Business in the Territory;
or (iii) any situation other than that explicitly set forth in Section
8(a) or Section 8(b).
9. Notice to Others. Each of Dravo, DLC and the Company hereby agrees
that the Purchaser may disclose the provisions of this Agreement to any person
or entity.
10. Remedies. Each of Dravo, DLC and the Company acknowledges that
any violation of this Agreement may cause irreparable harm to the Purchaser
and that damages are not an adequate remedy. Each of Dravo, DLC and the
Company therefore agrees that the Purchaser shall be entitled to injunctive
relief, including temporary, preliminary and permanent injunctions, by an
appropriate court in the appropriate jurisdiction, enjoining, prohibiting and
restraining each of Dravo, DLC and the Company from the continuance of any
such violation, in addition to any monetary damages which might occur by
reason of the violation of this Agreement. The remedies provided in this
Agreement are cumulative and shall not exclude any other remedies to which any
party to this Agreement may be entitled under this Agreement or applicable
law, and the exercise of a remedy shall not be deemed an election excluding
any other remedy (any such claim by the other party to this Agreement being
hereby waived).
11. Modification. It is understood and agreed by the parties hereto
that should any portion, provision or clause of the foregoing be deemed too
broad to permit enforcement to its full extent, then it shall be enforced to
the maximum extent permitted by law, and each of
<PAGE> -5-
Dravo, DLC and the Company hereby consents and agrees that such scope may be
judicially modified accordingly in any proceeding brought to enforce such
restriction.
12. Independent. The covenants and agreements set forth in this
Agreement shall be deemed, and shall be construed as, separate and independent
covenants and agreements, and should any part or provision of such covenants
or agreements be held invalid, void or unenforceable by any court of competent
jurisdiction, such invalidity, voidness or unenforceability shall in no way
render invalid, void or unenforceable any other part or provision thereof or
any separate covenant not declared invalid, void or unenforceable; and this
Agreement shall in that case be construed as if the void, invalid or
unenforceable provisions were omitted.
13. Miscellaneous.
(a) Notice. All notices under this Agreement shall be in
writing and given either in person, by express overnight service (with
all fees prepaid) or sent by registered or certified mail, return
receipt requested, postage prepaid, to the address of the party to this
Agreement set forth below its signature or to such other address as a
party to this Agreement may furnish to the other as provided in this
sentence, and shall be deemed received on the date of personal delivery,
on the first business day after sent by express overnight service or on
the date of delivery or attempted delivery as indicated by the return
receipt if sent by registered or certified mail; and if notice is given
pursuant to the foregoing of a permitted successor or assign, then
notice shall thereafter be given pursuant to the foregoing to such
permitted successor or assign.
(b) Assignment; Binding Effect. No assignment, transfer
or delegation of any rights or obligations under this Agreement by a
party shall be made without the prior written consent of the other
parties to this Agreement (which shall not be unreasonably withheld).
This Agreement shall be binding upon the parties to this Agreement and
their respective legal representatives, heirs, devisees, legatees or
other successors and assigns, and shall inure to the benefit of the
parties to this Agreement and their respective permitted legal
representatives, heirs, devisees, legatees or other permitted successors
and assigns.
(c) Gender; Captions. Whenever the context so requires,
the singular number shall include the plural and the plural shall
include the singular, and the gender of any pronoun shall include the
other genders. Titles and captions of or in this Agreement are inserted
only as a matter of convenience and for reference and in no way affect
the scope of this Agreement or the intent of its provisions.
(d) Waiver of Jury Trial. Each of the parties irrevocably
waives any right to a jury trial with respect to any matter arising out
of or in connection with this Agreement.
(e) Certain Definitions. The parties agree that
"applicable law" means all provisions of any constitution, statute, law,
rule, regulation, decision, order, decree,
<PAGE> -6-
judgment, release, license, permit, stipulation or other official
pronouncement enacted, promulgated or issued by any governmental authority or
arbitrator or arbitration panel; that "governmental authority" means any
legislative, executive, judicial, quasi-judicial or other public authority,
agency, department, bureau, division, unit, court or other public body, person
or entity; and that "including" and other words or phrases of inclusion, if
any, shall not be construed as terms of limitation, so that references to
"included" matters shall be regarded as non-exclusive, non-characterizing
illustrations.
(f) Entire Agreement. This Agreement constitutes the
entire agreement of the parties to this Agreement with respect to its
subject matter, supersedes all prior agreements, if any, of the parties
to this Agreement with respect to its subject matter, and may not be
amended except in writing signed by the party to this Agreement against
whom the change is being asserted.
(g) No Waiver. The failure of any party to this Agreement
at any time or times to require the performance of any provisions of
this Agreement shall in no manner affect the right to enforce the same;
and no waiver by any party to this Agreement of any provision (or of a
breach of any provision) of this Agreement, whether by conduct or
otherwise, in any one or more instances, shall be deemed or construed
either as a further or continuing waiver of any such provision or breach
or as a waiver of any other provision (or of a breach of any other
provision) of this Agreement.
(h) Governing Law. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of North
Carolina.
(i) Counterparts. This Agreement may be executed in two
or more copies, each of which shall be deemed an original, and it shall
not be necessary in making proof of this Agreement or its terms to
produce or account for more than one of such copies.
DULY EXECUTED and delivered by the parties to this Agreement, under
seal, on the day and year first above written.
THE PURCHASER: MARTIN MARIETTA MATERIALS, INC.
By:KENNETH G. MILLER
Kenneth G. Miller
Vice President
Address:
2710 Wycliff Road
Raleigh, North Carolina 27607
Attention: Vice President and
General Counsel
<PAGE> -7-<PAGE>
DRAVO: DRAVO CORPORATION
By:ERNEST F. LADD III
Ernest F. Ladd, III
Executive Vice President
Address:
3600 One Oliver Plaza
Pittsburgh, PA 15222-2682
Attention:President
THE COMPANY: DRAVO BASIC MATERIALS COMPANY, INC.
By:ERNEST F. LADD III
Ernest F. Ladd, III
Executive Vice President
Address:
3600 One Oliver Plaza
Pittsburgh, PA 15222-2682
Attention:President
DLC: DRAVO LIME COMPANY
By:CARL A. GILBERT
Carl A. Gilbert
President
Address:
3600 One Oliver Plaza
Pittsburgh, PA 15222-2682
Attention:President
* * * *
<PAGE> -8-
PRESS RELEASE
Pittsburgh, January 4, 1995 -- Dravo Corporation (NYSE:DRV) today
announced that it has completed the previously announced sale of its
construction aggregates operations to Martin Marietta Materials, Inc.
In the transaction, Martin Marietta Materials purchased the assets of
Dravo Basic Materials Company, Inc., Dravo's construction aggregates
subsidiary, for $122 million cash. The final purchase price is subject to
adjustment based upon the balance sheet of Dravo Basic Materials on December
31, 1994.
Carl A. Gilbert, Dravo's president and chief executive officer, indicated
that, "We intend to apply the proceeds from the transaction primarily to
reduce debt. Our total debt - after retirement of construction financing for
our Black River plant expansion project - will be approximately $43 million,
compared to approximately $110 million on September 30, 1994."
"Although we received a premium over book value for the assets involved
in the sale, the expenses associated with the transaction including
transaction-related expenses, costs associated with the downsizing of our
corporate overhead, and expenses and accruals for post-employment benefit
obligations for Dravo Basic Materials employees - substantially offset the
premium."
"Additionally, we expect prepayment costs and the write-off of
unamortized financing fees and other loan expenses related to the debt being
repaid to result in a pre-tax extraordinary charge of approximately $9.0
million in the fourth quarter of 1994. We also are likely to take a charge to
supplement the reserve for discontinued operations we established during the
late 1980s in connection with our exit from the engineering and construction
business."
"As a result of these charges, we expect to report a sizable loss for the
year. Although this anticipated loss is regrettable, we are now a much
stronger company both financially and operationally," said Mr. Gilbert. "We
can now focus our attention on developing our lime business, where we enjoy a
leadership position in our industry both as a producer of lime products and
provider of lime-related technologies."
"Our 700,000-ton-per-year expansion project at Black River is nearing
completion, with start-up expected during the first quarter. Most of this
increased capacity is already sold under long-term contracts. The income
contribution for this additional tonnage, combined with lower overhead and
interest expenses, is expected to substantially improve earnings from
continuing operations during 1995 and beyond," Mr. Gilbert said.
