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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report: July 29, 1994
_______________
JACOBS ENGINEERING GROUP INC.
_________________________________________________________________
(Exact name of Registrant as specified in its charter)
Delaware 1-7463 95-4081636
_________________________________________________________________
(State of (Commission File (I.R.S. Employer
Incorporation File Number) Identification
Number)
251 South Lake Avenue, Pasadena, California 91101
_________________________________________________________________
(Address of principal executive offices) (Zip code)
(818) 449-2171
_________________________________________________________________
(Registrant's telephone number, including area code)
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Item 2. Acquisition or Disposition of Assets.
On July 29, 1994 Jacobs Engineering Group Inc. (the "Registrant") purchased
from CRSS Inc. the engineering and construction management service businesses of
CRSS Inc. for a purchase price equal to $14 million plus the net book value on
the closing date of the businesses acquired. On the closing date the Registrant
paid CRSS Inc. $33.5 million, which was an amount equal to $14 million plus the
estimated net book value on that date of the businesses acquired. The net book
value of the businesses acquired is subject to an audit to be completed in the
Registrant's fourth fiscal quarter. The exact purchase price will be determined
when the audit is complete, and any difference between that amount and the
amount paid on the closing date will be settled between the parties.
In the transaction the Registrant purchased substantially all of the assets
of CRS Sirinne Engineers, Inc., subject to certain liabilities, all of the stock
of CRSS Constructors, Inc. and CRSS International, Inc. and the assets, subject
to certain liabilities, or all of the stock, of certain insignificant
subsidiaries of CRSS Inc. The purchase was made under the terms of a Purchase
Agreement dated July 29,1994 between the Registrant and CRSS Inc., which was
executed concurrently with the close of purchase. For a more complete
understanding of the structure of the transaction, reference should be made to
the Purchase Agreement, which is attached to this Report as Exhibit 1.
The businesses acquired by the Registrant provide engineering and design
services to the pulp and paper, micro-electronics, process and pharmaceutical
industries, among others, as well as construction and construction management
services to the public and institutional markets, including criminal justice,
health care, education and transportation infrastructure. Jacobs did not
purchase, and CRSS Inc. retained, certain assets and liabilities, including
those relating to certain engineering, procurement and construction contracts
for independent electric power projects that are essentially complete or in the
later stages of completion.
The purchase was made at arm's-length and will be accounted for as a
purchase of assets. The Registrant financed the acquisition from working capital
and from funds borrowed from Bank of America National Trust and Savings
Association.
Item 7. Financial Statements and Exhibits.
(a) and (b) The Registrant will file the financial statements required by
Rule 3-05 of Regulation S-X and the pro
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forma financial statements required by Article 11 of Regulation S-X on Form 8-
K/A no later than September 27, 1994.
(c) Exhibit 1. Purchase Agreement dated July 29, 1994 between Jacobs
Engineering Group Inc. and CRSS Inc. including a schedule of
annexes and exhibits; the Registrant will furnish copies of
such annexes and exhibits to the Commission upon its
request.
SIGNATURES
Pursuant to the Securities Exchange Act of 1934, the Registrant has duly
caused this Report to be signed by the undersigned, thereunto duly authorized.
Date: August 5, 1994 JACOBS ENGINEERING GROUP INC.
/S/ JOHN W. PROSSER, JR.
____________________________
(John W. Prosser, Jr.)
Senior Vice President, Finance
and Administration and
Treasurer
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EXHIBIT 1
PURCHASE AGREEMENT
by and between
Jacobs Engineering Group Inc.
and
CRSS Inc.
_____________________
dated
July 29, 1994
_____________________
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TABLE OF CONTENTS
Page
PURCHASE AGREEMENT . . . . . . . . . . . . . . . . . . . . . 1
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . 1
AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE: DEFINITIONS . . . . . . . . . . . . . . . . . 1
ARTICLE TWO: CONVEYANCE, CONSIDERATION AND RELATED MATTERS 8
2.1 Agreement of Purchase and Sale . . . . . . . . . . 8
2.2 Determination of Purchase Price . . . . . . . . . 8
2.3 Closing . . . . . . . . . . . . . . . . . . . . . 10
2.4 Sales, Transfer and Documentary Taxes, etc. . . . 11
ARTICLE THREE: REPRESENTATIONS AND WARRANTIES OF CRSS . . . 11
3.1 Organization and Standing . . . . . . . . . . . . 11
3.2 Authorized and Outstanding Capitalization . . . . 11
3.3 Subsidiaries . . . . . . . . . . . . . . . . . . . 12
3.4 Financial Statements . . . . . . . . . . . . . . . 12
3.5 Absence of Changes . . . . . . . . . . . . . . . . 13
3.6 Tax and Other Returns and Reports . . . . . . . . 15
3.7 Real Property; Environmental Laws . . . . . . . . 15
3.8 Contracts . . . . . . . . . . . . . . . . . . . . 17
3.9 Equipment and Other Assets . . . . . . . . . . . . 18
3.10 Accounts Receivable . . . . . . . . . . . . . . . 18
3.11 Backlog . . . . . . . . . . . . . . . . . . . . . 18
3.12 Intellectual Property Rights . . . . . . . . . . . 19
3.13 Title to Assets . . . . . . . . . . . . . . . . . 19
3.14 Insurance Policies; Bonds . . . . . . . . . . . . 20
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3.15 Material Contracts . . . . . . . . . . . . . . . . 21
3.16 Labor Matters. . . . . . . . . . . . . . . . . . 22
3.17 Compliance with Laws . . . . . . . . . . . . . . . 23
3.18 Litigation . . . . . . . . . . . . . . . . . . . . 24
3.19 [Intentionally Omitted] . . . . . . . . . . . . . 25
3.20 Corporate Power; Authorization; Enforceable
Obligations . . . . . . . . . . . . . . . . . . . 25
3.21 Validity of Contemplated Transactions, etc. . . . 25
3.22 No Conflicts of Interest . . . . . . . . . . . . . 25
3.23 Inspection of Documents . . . . . . . . . . . . . 26
3.24 Officers, Directors and Agents . . . . . . . . . . 26
3.25 Bank Accounts . . . . . . . . . . . . . . . . . . 26
3.26 Employee Benefit Plans; ERISA . . . . . . . . . . 26
3.27 Contracts With Government Agencies . . . . . . . . 28
3.28 Disclosure . . . . . . . . . . . . . . . . . . . . 29
ARTICLE FOUR: REPRESENTATIONS AND WARRANTIES OF JACOBS . . 29
4.1 Organization and Standing . . . . . . . . . . . . 29
4.2 Authority . . . . . . . . . . . . . . . . . . . . 29
4.3 Corporate Power; Authorization Enforceable
Obligations . . . . . . . . . . . . . . . . . . . 29
4.4 Validity of Contemplated Transactions, etc. . . . 30
ARTICLE FIVE: [INTENTIONALLY OMITTED] . . . . . . . . . . . 30
ARTICLE SIX: OBLIGATIONS OF THE PARTIES . . . . . . . . . 30
6.1 Commercially Reasonable Efforts . . . . . . . . . 30
6.2 Hart-Scott-Rodino Filings . . . . . . . . . . . . 30
6.3 Public Announcements . . . . . . . . . . . . . . . 31
6.4 Tax Matters . . . . . . . . . . . . . . . . . . . 31
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6.5 WARN Act . . . . . . . . . . . . . . . . . . . . . 35
6.6 Allocation of Employee Plan Responsibilities . . . 36
6.7 Post-Closing Access to Information and Personnel . 37
ARTICLE SEVEN: CONDITIONS TO EACH PARTY'S OBLIGATIONS TO
EFFECT THE TRANSACTIONS CONTEMPLATED HEREBY . 37
7.1 H-S-R Act . . . . . . . . . . . . . . . . . . . . 37
7.2 No Injunctions . . . . . . . . . . . . . . . . . . 37
7.3 Absence of Other Matters . . . . . . . . . . . . . 37
7.4 Employment Agreements . . . . . . . . . . . . . . 38
7.5 Intercompany Indebtedness . . . . . . . . . . . . 38
7.6 Service Mark. . . . . . . . . . . . . . . . . . 38
ARTICLE EIGHT: CONDITIONS PRECEDENT TO PERFORMANCE BY JACOBS 38
8.1 Warranties and Representations . . . . . . . . . . 38
8.2 Covenants . . . . . . . . . . . . . . . . . . . . 38
8.3 No Adverse Changes . . . . . . . . . . . . . . . . 39
8.4 Officers' Certificates . . . . . . . . . . . . . . 39
8.5 Opinion of Counsel . . . . . . . . . . . . . . . . 39
8.6 Corporate Approvals . . . . . . . . . . . . . . . 41
8.7 Consents . . . . . . . . . . . . . . . . . . . . . 41
8.8 Deadline . . . . . . . . . . . . . . . . . . . . . 41
8.9 Form and Substance of Documents . . . . . . . . . 41
8.10 [Intentionally Omitted.] . . . . . . . . . . . . . 41
8.11 Financial Condition . . . . . . . . . . . . . . . 41
8.12 Covenant not to Compete . . . . . . . . . . . . . 41
8.13 Confidentiality Agreements . . . . . . . . . . . . 42
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ARTICLE NINE: CONDITIONS PRECEDENT TO PERFORMANCE BY CRSS 42
9.1 Warranties and Representations . . . . . . . . . . 42
9.2 Covenants . . . . . . . . . . . . . . . . . . . . 42
9.3 Officers' Certificates . . . . . . . . . . . . . . 42
9.4 Opinion of Counsel . . . . . . . . . . . . . . . . 42
9.5 Deadline . . . . . . . . . . . . . . . . . . . . . 43
9.6 Corporate Approvals . . . . . . . . . . . . . . . 43
9.7 Satisfaction of CRSS . . . . . . . . . . . . . . . 43
ARTICLE TEN: THE CLOSING . . . . . . . . . . . . . . . . . 43
10.1 Deliveries by the Corporations . . . . . . . . . . 44
10.2 Deliveries by Jacobs . . . . . . . . . . . . . . . 45
10.3 Other Deliveries at Closing . . . . . . . . . . . 99
10.4 Concurrent Deliveries . . . . . . . . . . . . . . 99
ARTICLE ELEVEN: OBLIGATIONS OF THE PARTIES AFTER CLOSING 99
11.1 Adjustments for At Risk Contracts . . . . . . . . 99
11.2 Trade Names . . . . . . . . . . . . . . . . . . . 101
11.3 Confidential Information . . . . . . . . . . . . . 102
11.4 Performance of Certain Contracts After Closing . . 102
11.5 Hiring of Employees of the Corporations . . . . . 103
11.6 Certified Financial Statements of the Corporations 104
11.7 Maintenance of Books and Records . . . . . . . . . 104
11.8 Payments Received . . . . . . . . . . . . . . . . 105
11.9 Further Assurances of CRSS . . . . . . . . . . . . 105
11.10 Further Assurances of Jacobs . . . . . . . . . . 106
11.11 Insurance Coverage . . . . . . . . . . . . . . . 106
11.12 Liabilities Not to be Assumed by Jacobs . . . . . 106
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ARTICLE TWELVE: INDEMNIFICATION . . . . . . . . . . . . 108
12.1 General Indemnification Obligation . . . . . . . . 108
12.2 General Indemnification Obligation of Jacobs . . . 109
12.3 Method of Asserting Claims, Etc. . . . . . . . . . 110
12.4 Compensation for Claims . . . . . . . . . . . . . 112
12.5 No Waiver of Subrogation . . . . . . . . . . . . . 112
12.6 Cooperation of the Parties . . . . . . . . . . . . 112
12.7 Claims Against Former Corporation Employees . . . 113
12.8 Limitation on Indemnification . . . . . . . . . . 113
12.9 Survival of Representations; Time Limitations . . 113
12.10 Attorneys' Fees . . . . . . . . . . . . . . . . . 113
12.11 Remedies Exclusive . . . . . . . . . . . . . . . 114
ARTICLE THIRTEEN: COSTS . . . . . . . . . . . . . . . . . 114
13.1 Brokers' Commissions . . . . . . . . . . . . . . . 114
13.2 Costs and Expenses . . . . . . . . . . . . . . . . 114
ARTICLE FOURTEEN: FORM OF AGREEMENT . . . . . . . . . . . 114
14.1 Usage Conventions . . . . . . . . . . . . . . . . 114
14.2 Integration . . . . . . . . . . . . . . . . . . . 114
14.3 Counterparts . . . . . . . . . . . . . . . . . . . 115
14.4 Warranties and Representations . . . . . . . . . . 115
ARTICLE FIFTEEN: PARTIES . . . . . . . . . . . . . . . . 115
15.1 No Third Party Beneficiaries . . . . . . . . . . . 115
15.2 Successors and Assigns . . . . . . . . . . . . . . 115
ARTICLE SIXTEEN: GOVERNING LAW . . . . . . . . . . . . . 115
ARTICLE SEVENTEEN: NOTICES . . . . . . . . . . . . . . . . 115
ARTICLE EIGHTEEN: CONSENT TO JURISDICTION . . . . . . . . 116
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ANNEXES AND EXHIBITS TO AGREEMENT . . . . . . . . . . . . . 118
vii
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PURCHASE AGREEMENT
This Purchase Agreement ("Agreement") is made and entered into on July
29, 1994, by and between Jacobs Engineering Group Inc., a Delaware corporation
("Jacobs"), and CRSS Inc., a Delaware corporation ("CRSS").
RECITALS
This Agreement is made and entered into with respect to the following
facts, each of which all parties deem to be material:
CRSS desires to sell to Jacobs, and Jacobs desires to purchase, all as
hereinafter provided, the Business to be Acquired. The Business to be Acquired
is owned and operated by Constructors, International, New York, Civil, Illinois,
Engineers and Enterprises, exclusive of their respective subsidiaries (other
than Illinois). Accordingly, it is the intention of the parties that CRSS sell,
or cause to be sold, to Jacobs, and that Jacobs purchase, all of the issued and
outstanding equity securities of Constructors, International and New York and
substantially all of the assets of Engineers, Civil and Illinois, subject to
agreed upon liabilities of Engineers, Enterprises, Civil and Illinois, as
hereinafter provided.
AGREEMENT
In consideration of the foregoing, the covenants, warranties and
conditions herein contained, and the mutual benefits to be derived therefrom the
parties hereby mutually warrant, represent, covenant and agree with each other
as follows:
ARTICLE ONE: DEFINITIONS
Unless otherwise stated in this Agreement or the context otherwise
requires, the following terms, whether or not capitalized, shall have the
meanings in this Agreement as set forth or referred to in this Article One.
"Affiliate." Any Person controlling, controlled by, or under
common control with another "Person". For this sole purpose "control" shall mean
the ownership, directly or indirectly through the control of another person, of
50% or more of the outstanding equity securities of a Person.
"Agreement." This Agreement.
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"Ancillary Contracts" shall mean all contracts entered into by
any of the Corporations in order to conduct the Business to be Acquired (other
than Customer Contracts, Leases and Personal Property Leases) to which CRSS or a
CRSS Subsidiary is a party for the benefit of any of the Corporations.
"Asset Corporation" shall mean Engineers, Enterprises, Civil and
Illinois.
"Assumed Contract" shall mean a Customer Contract that is not
Complete on the Closing Date.
"At Risk Contracts." As defined in Section 11.1 of this
Agreement.
"Audited Financial Statements." As defined in Section 3.4 of this
Agreement.
"Business to be Acquired" shall mean the engineering and
construction management businesses presently conducted by CRSS through or on
behalf of the Corporations, but including their respective corporate names,
employees and all cash, Intellectual Property Rights and any and all other
assets and liabilities (including off balance sheet assets and obligations)
related to such businesses. The Business to be Acquired includes all assets and
liabilities included in the Closing Date Consolidating Balance Sheet as well as
off balance sheet items such as proposals, future contracts, contracts, leases,
letters of credit, bonds, and guarantees, but the Business to be Acquired does
not include the Retained Assets or the Retained Liabilities.
"Civil" shall mean CRSS Civil Engineers, Inc., a Delaware
corporation.
"Closing." The closing of the purchase and sale provided for in
Article Two of this Agreement.
"Closing Date." As defined in Section 2.3 of this Agreement.
"Closing Date Consolidating Balance Sheet." As defined in Section
2.2 of this Agreement.
"Complete" shall mean in reference to a Customer Contract, a
Customer Contract in which all contractually required engineering, contract
administration or construction management has been completed. A Customer
Contract may be complete even though there are outstanding accounts receivables
associated with the Customer Contract, or there is an unexpired warranty period
under the Customer Contract, or a client has made a claim for redesign or
warranty work pursuant to the Customer Contract.
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"Completed Contracts" shall mean all Customer Contracts other
than the Assumed Contracts and the Continuing Contracts, and it shall also mean
all Power Plant Contracts.
"Constructors" shall mean CRSS Constructors, Inc., a Delaware
corporation.
"Continuing Contract" shall mean a Customer Contract of a Stock
Corporation that is not Complete on the Closing Date.
"Contract" shall mean and include contracts, agreements,
indentures, leases, and license agreements.
"Corporation(s)" shall mean Constructors, International, New
York, Civil, Illinois, Engineers and Enterprises or any one or more of them as
the context may require.
"Corporation Stock" shall mean the outstanding equity securities
of any class of Constructors, International and New York.
"CRSS Companies" shall mean CRSS, Services, Seller, Constructors,
International, New York, Civil, Illinois and Engineers.
"CRSS Intellectual Property Rights" shall mean all Intellectual
Property Rights that are used, directly or indirectly, in connection with the
Business to be Acquired.
"CRSS Subsidiary" shall mean an Affiliate of CRSS that is
controlled by (but not controlling or under common control with) CRSS.
"Customer Contracts" shall mean all contracts with a client or
customer relating to the Business to be Acquired.
"Draft Closing Date Consolidating Balance Sheet." As defined in
Section 2.2 of this Agreement.
"Engineers" shall mean CRS Sirrine Engineers, Inc., a South
Carolina corporation.
"Enterprises" shall mean CRSS Enterprises, a Delaware
corporation.
"Environmental Claims" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, investigations,
proceedings, consent orders or consent agreements relating in any way to any
Environmental Law
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or any Environmental Permit (hereafter "Claims"), including without limitation
(i) any and all Claims by governmental authorities for enforcement, cleanup,
removal, response, remedial or similar actions or damages for violation of any
applicable Environmental Law, and (ii) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment.
"Environmental Laws" means any federal, state or local law,
Governmental Order, regulation, ordinance, or code in effect and in each case as
amended as of the Closing Date, and any judicial or administrative
interpretation thereof as of the Closing Date, including any judicial or
administrative order, consent decree or judgment, relating to the environment,
health, safety or any Hazardous Materials, including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
42 U.S.C. (SS) 9601 et seq. ("CERCLA"); the Resource Conservation and Recovery
Act, 42 U.S.C. (SS) 6901 et seq.; the Hazardous Materials Transportation Act, 49
U.S.C. (SS) 6901 et seq.; the Clean Water Act, 33 U.S.C. (SS) 1251 et seq.; the
Clean Air Act, 42 U.S.C. (SS) 7401 et seq.; the Safe Drinking Water Act, 42
U.S.C. (SS) 300f et seq.; the Atomic Energy Act, 42 U.S.C. (SS) 2011 et seq.;
the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. (SS) 136 et
seq.; the Occupational Safety and Health Act, 29 U.S.C. (SS) 651 et seq.; and
any similar federal, state, and local laws and ordinances and the regulations
adopted, and/or promulgated pursuant thereto as of the Closing Date.
"Environmental Permits" means all permits, approvals,
identification numbers, licenses and other authorizations required under any
applicable Environmental Law as of the Closing Date.
"Hazardous Materials" means (i) any petroleum or petroleum
products, radioactive materials, friable asbestos, urea formaldehyde foam
insulation, radon gas and transformers or other equipment that contains
dielectric fluid containing polychlorinated biphenyls; and (ii) any chemicals,
materials or substances defined as or included in the definition of "hazardous
materials," "acute hazardous wastes," "restricted hazardous wastes," "toxic
substances," "toxic pollutants," or words of similar import under any applicable
Environmental Law.
"H-S-R Act" shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended and the regulations of the Federal Trade
Commission thereunder.
"Illinois" shall mean CRSS of Illinois, Inc., an Illinois
corporation.
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"Intellectual Property." Patents, copyrights, trademarks, service
marks, trade names, whether or not registered, technology, processes, methods,
formulations, data bases, trade secrets, know-how, inventions and other
information commonly recognized as intellectual property whether or not recorded
in a written or electronic medium.
"Intellectual Property Rights." All legal rights to the ownership
or use of Intellectual Property, including but not limited to, patent, copyright
and trademark registrations, secrecy rights, licenses and leases.
"Interim Date" shall mean March 31, 1994.
"Interim Date Pro Forma Consolidating Balance Sheet." As defined
in Section 3.4.
"International" shall mean CRSS International, Inc., a South
Carolina corporation.
"Knowledge." As used in this Agrement the terms "to the knowledge
of CRSS" and "to the best knowledge of CRSS" (and all phrases of similar import)
shall mean only the actual knowledge of William Gardiner, Mary Gilbert, Frank
Perrone, Bruce Wilkinson, Socrates S. Christopher and Warren M. Dean, and the
knowledge of any other person shall not be imputed to CRSS for purposes of this
Agreement.
"Lease". As defined in Section 3.7 of this Agreement.
"Liabilities" includes, without limitation, any direct or
indirect indebtedness, guaranty, endorsement, claim, loss, damage, deficiency,
cost, expense, obligation or responsibility, fixed or unfixed, known or unknown,
asserted or unasserted, choate or inchoate, liquidated or unliquidated, secured
or unsecured.
"Lien(s)" shall mean and include liens, pledges, security
interests, judgments, conditional sale agreements, mortgages, deeds of trust,
charges and encumbrances of any kind.
"Litigation." As defined in Section 3.18 of this Agreement.
"New York" shall mean CRSS of New York, Inc., a New York
corporation.
"Party." A party to this Agreement.
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"Person." An individual, partnership, joint venture, corporation,
limited liability company, or unincorporated association.
"Personal Property Lease(s)." As defined in Section 3.8 of this
Agreement.
"Power Plant Contracts" shall mean the Contracts for the projects
known as Olean/Indeck Energy Services, Lakewood Cogeneration, L'Energia and
Northwest Energy (NW Energy).
"Profit Plan." As defined in Section 11.1 of this Agreement.
"Real Property." As defined in Section 3.7 of this Agreement.
"Retained Assets" shall mean the following:
(a) The lease of real property at 1177 West Loop South,
Houston, Texas,
(b) That certain promissory note in the sum of approximately
$2.3 million and that certain promissory note known as the
Siemans note, both of which relate to the L'Energia project,
(c) Receivables from the King Saud University and otherwise
relating to the HOK+4 Consortium,
(d) All Affiliates of CRSS other than the Corporations, and
all subsidiaries of Engineers, Constructors and International,
except as provided herein,
(e) The Armco Steel and other plaintiff litigation listed on
Exhibit 3.18,
(f) Rights to indemnification or subrogation with respect to
any Retained Liability;
(g) All contracts of insurance and rights thereunder;
(h) All claims existing on the Closing Date of any
Corporation against CRSS or any of its Affiliates or any officer,
director or employee of CRSS or any of its Affiliates;
(i) All claims, including counterclaims, cross-claims and
claims for contribution or
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indemnity, relating to any matters, including Third Party Claims
(as defined herein), with respect to which CRSS is required to,
and does, indemnify the Jacobs Indemnified Party (as defined
herein), regardless of whether those matters are asserted
against CRSS or any of its Affiliates by Jacobs or any of its
Affiliates or by a third party;
(j) All Power Plant Contracts, including all assets
associated therewith, including accounts receivable;
(k) The stock of CRS Sirrine Environmental, Inc., CRSS of
Illinois, Inc., CRSS Resources, Inc., CRSS Constructors of New
Mexico, Inc., CRSS Far East Ltd., and Western Empire
Constructors, Inc.; and
(l) The four residential lots owned by Engineers and located
in Greenville, South Carolina.
"Retained Liabilities." As defined in Section 11.11 of this
Agreement.
"Section." A Section of this Agreement.
"Seller" shall mean CRSS Constructors International, Inc., a
Delaware corporation.
"Services" shall mean CRSS Services, Inc., a Delaware
corporation.
"Services Subsidiary" shall mean an Affiliate of Services
controlled, directly or indirectly through one or more of its Affiliates, by
Services.
"Stock Corporations" shall mean Constructors, International and
New York.
"Subsidiary" shall mean an Affiliate of a Person that is
controlled by (but not controlling or under common control with) such Person.
"Termination Date" shall mean July 31, 1994.
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ARTICLE TWO: CONVEYANCE, CONSIDERATION AND RELATED
MATTERS
2.1 Agreement of Purchase and Sale. Upon the terms and conditions
hereinafter set forth, CRSS agrees to sell to Jacobs, and Jacobs agrees to
purchase from CRSS, the Business to be Acquired for a purchase price (the
"Purchase Price") equal to the Closing Date Net Asset Value of the Business to
be Acquired plus $14,000,000.00, payable in cash.
2.2 Determination of Purchase Price. The Purchase Price shall be
determined in accordance with this Section 2.2.
(i) Not later than two business days prior to the Closing Date,
Jacobs and CRSS shall agree on a preliminary Net Asset Value of the Business
to be Acquired. This value (the "Preliminary Net Asset Value") shall reflect
the consolidated net assets of the Business to be Acquired as of a recent
date, and shall be based on the Business to be Acquired as reflected in the
Interim Date Pro Forma Consolidating Balance Sheet, but shall be adjusted as
reasonably agreed between the parties to take account of differences between
the Business to be Acquired and the businesses reflected in the Interim Date
Pro Forma Consolidating Balance Sheet.
(ii) (a) Following the Closing Date CRSS shall cause to be
delivered to Jacobs an audited consolidating balance sheet of the
Business to be Acquired as of the Closing Date (the "Closing Date
Consolidating Balance Sheet"), together with the unqualified report
thereon issued by Ernst & Young certifying the Closing Date
Consolidating Balance Sheet in accordance with generally accepted
accounting principles applied on a basis consistent with the
presentation of Services' consolidated balance sheets as of June 30,
1993. Jacobs and CRSS shall, and shall cause their respective
Subsidiaries to, cooperate in the preparation of the Closing Date
Consolidating Balance Sheet.
(b) Not later than 25 days after the Closing Date, CRSS
shall deliver to Jacobs a draft of the Closing Date Consolidating
Balance Sheet (the "Draft Closing Date Consolidating Balance Sheet").
Thereupon, Jacobs shall have the right during the succeeding 20 days
(the "examination period") to examine (at Jacobs' sole cost and
expense) said Draft Closing Date Consolidating Balance Sheet. Jacobs
shall notify CRSS and Ernst & Young in writing, on or before the last
day of the examination period, of any good faith objections to the
Draft Closing Date Consolidating Balance Sheet,
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setting forth a reasonably specific description of such objections
and, if practicable, the dollar amount of each objection (such
objections are hereinafter referred to as "Disputed Matters"). If
Jacobs does not deliver such notice within the examination period, the
Draft Closing Date Consolidating Balance Sheet shall be deemed to have
been accepted by Jacobs, and Ernst & Young shall thereafter promptly
deliver to Jacobs the Closing Date Consolidating Balance Sheet,
together with its unqualified report thereon. During the examination
period, CRSS shall notify Jacobs immediately of any change to the
Draft Closing Date Consolidating Balance Sheet. If CRSS presents any
change, additions or deletions to the Draft Closing Date Consolidating
Balance Sheet, then the Examination Period shall end 20 days from the
date of such later presentation. During the examination period, CRSS
shall cooperate in assisting Jacobs with its examination of the Draft
Closing Date Consolidating Balance Sheet including, without
limitation, providing Jacobs with full and complete access to all
relevant books and records during regular business hours, as well as
access to CRSS' independent auditors and, to the extent permitted by
such auditors, its working papers, as Jacobs may reasonably require to
complete its examination of the Draft Closing Date Consolidating
Balance Sheet.
(c) If Jacobs in good faith objects to the Draft Closing
Date Consolidating Balance Sheet in accordance with Section 2.2(ii)(b)
above, then CRSS, Jacobs and Ernst & Young shall attempt to resolve
the Disputed Matters within 20 days of the receipt of notice of such
matters by CRSS. If the parties are unable to resolve the Disputed
Matters within such 20 day period, Ernst & Young shall, after
considering the objections raised by Jacobs and the responses of CRSS,
promptly request CRSS to make changes, if any, to the Draft Closing
Date Consolidating Balance Sheet that Ernst & Young deems necessary in
order the Closing Date Consolidating Balance Sheet to present fairly
the financial condition of the Business to be Acquired in accordance
with generally accepted accounting principles, consistently applied,
and CRSS shall complete the Closing Date Consolidating Balance Sheet
in accordance with such requests and deliver it to Jacobs together
with the unqualified report issued thereon by Ernst & Young. Such
balance sheet shall be the "Closing Date Consolidating Balance Sheet"
as such term is used in this Agreement.
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(iii) "Net Asset Value of the Business to be Acquired" as of any
particular date means the excess, if a positive number, or the deficit, if a
negative number, of total assets minus total liabilities of the Business to
be Acquired as of such date.
(iv) Neither the Preliminary Net Asset Value nor the Closing Date
Net Asset Value of the Business to be Acquired shall reflect any tax-related
asset or liability for federal income taxes, or state or local income taxes
reported on a consolidated basis for CRSS and its Affiliates.
(v) "Change in Net Asset Value," which may be a positive or
negative number, means the Closing Date Net Asset Value of the Business to
be Acquired as determined from the Closing Date Consolidating Balance Sheet
minus the Preliminary Net Asset Value of the Business to be Acquired.
(vi) Within two days following the agreement of CRSS and Jacobs
as to the Closing Date Consolidating Balance Sheet, or the final
determination with respect thereto pursuant to Section 2.2(ii)(c), Jacobs
and CRSS shall determine the Change in Net Asset Value in accordance with
Section 2.2(v). If the Change in Net Asset Value is positive, then Jacobs
shall pay CRSS such amount within five days of its determination; if the
Change in Net Asset Value is negative, then CRSS shall pay Jacobs such
amount within five days of its determination.
(vii) Notwithstanding any other provision hereof, including
without limitation Article Twelve and any representations and warranties
herein, this Section 2.2 constitutes the sole and exclusive remedy of Jacobs
with respect to the Closing Date Consolidating Balance Sheet, the Interim
Date Pro Forma Consolidating Balance Sheet and the Audited Financial
Statements (as defined in Section 3.4), and any other financial or
accounting records or statements relating to the foregoing financial
statements, except as to matters knowingly misrepresented or willfully not
disclosed to Ernst & Young by CRSS.
2.3 Closing. The Closing of the exchange contemplated hereby shall
take place on July 29, 1994 at 10:00 a.m., P.D.S.T. at the offices of Jacobs in
Pasadena, California or at such other time, date and place as shall be mutually
agreed upon by CRSS and Jacobs. For the purposes of accounting for the
transactions contemplated by this Agreement, such transactions shall be deemed
to have closed at 11:59 p.m. on July 31, 1994 (the "Closing Date"). If the
Closing shall not have occurred by July 31, 1994, then either CRSS or Jacobs
shall have the right, pursuant to
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Section 16.2, to terminate and cancel this Agreement in its entirety.
2.4 Sales, Transfer and Documentary Taxes, etc. CRSS shall pay all
federal, state and local sales, documentary and other transfer taxes, if any,
due as a result of the transfer of the assets to be conveyed to Jacobs in
accordance herewith and shall indemnify, reimburse and hold harmless Jacobs in
respect of the liability for payment of or failure to pay any such taxes or the
filing of or failure to file any reports required in connection therewith.
ARTICLE THREE: REPRESENTATIONS AND WARRANTIES OF CRSS
CRSS shall furnish to Jacobs the exhibits specified below. All such
exhibits either shall be attached hereto or delivered concurrently with the
signing hereof; in either event all such exhibits shall be suitably marked for
identification as exhibits to this Agreement and shall be deemed incorporated
herein. CRSS hereby warrants and represents to Jacobs as follows:
3.1 Organization and Standing. Each of the CRSS Companies is a
corporation duly organized, validly existing and in good standing under the laws
of its state of incorporation, has all necessary corporate powers to own its
properties and to carry on its business as now owned and operated by it. Each of
the Corporations is duly qualified to do intrastate business and is in good
standing in each of the jurisdictions in which the failure so to qualify would
have a material and adverse effect on the business or assets of any of the
Corporations. Exhibit 3.1 lists all of the jurisdictions in which each of the
Corporations is qualified to do intrastate business.
3.2 Authorized and Outstanding Capitalization.
(i) The authorized and outstanding capital stock of each of
Services, Seller and the Corporations ("Corporation Stock"), the par value
thereof, the number of shares of Corporation Stock of each Corporation
outstanding and the name of each record and beneficial owner thereof are
completely and accurately set forth on Exhibit 3.2. All outstanding shares
of the Corporation Stock are validly issued, fully paid, and nonassessable.
None of Services, Seller or the Corporations has any other outstanding
securities or any outstanding subscriptions, options, rights, warrants,
convertible securities or other agreements or commitments obligating such
corporation to issue or to transfer from treasury any additional shares of
its capital stock of any class.
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(ii) The CRSS Companies are the record and beneficial owners of
the Corporation Stock as shown on Exhibit 3.2, free and clear of any Liens.
No CRSS Company has received written notice of any Lien upon or adverse
claim to the ownership of any of the Corporation Stock.
3.3 Subsidiaries and Joint Ventures. On the Closing Date, none of the
Corporations will own any equity interest in any other Person except as listed
in Exhibit 3.3 and except for a 50% interest in ASC, Inc. and contractual joint
ventures.
3.4 Financial Statements.
(i) The books, records and accounts of Services, Seller and each
Corporation maintained with respect to the Business to be Acquired
completely and accurately and fairly reflect, in reasonable detail, the
transactions and the assets and liabilities of those respective
corporations. None of Services, Seller or the Corporations has engaged in
any transaction with respect to the Business to be Acquired, maintained any
bank account for its business or used any of its funds in the conduct of its
business except for transactions, bank accounts and funds that have been and
are accurately reflected in its normally maintained books and records.
(ii) Exhibit 3.4 to this Agreement sets forth the
following:
(a) The consolidated balance sheets of Services at June 30,
1991, 1992 and 1993 and the related statements of income, changes in
stockholder's equity and cash flows for each of the three years ended
June 30, 1993, together with the reports thereon by Services'
independent auditors (the "Audited Financial Statements"); and
(b) The Interim Date Pro Forma Consolidating Balance Sheet
as of March 31, 1994.
(iii) The Interim Date Pro Forma Consolidating Balance Sheet has
been, and the Closing Date Consolidating Balance Sheet will be, prepared in
accordance with generally accepted accounting principles applied on a basis
consistent with those used for the Audited Financial Statements, except that
the Interim Date Pro Forma Consolidating Balance Sheet reflects, and the
Closing Date Consolidating Balance Sheet will reflect, the elimination
therefrom of all assets and liabilities not included in the Business to be
Acquired, and the inclusion therein of all assets and liabilities included
in the Business to be Acquired. The Interim Date Pro Forma Consolidating
Balance Sheet reflects all adjustments
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necessary for a fair presentation of the consolidated financial position of
the Business to be Acquired as of the Interim Date, and the Closing Date
Consolidating Balance Sheet will reflect all adjustments necessary for a
fair presentation of the consolidated financial position of the Business to
be Acquired as of the Closing Date.
(iv) There are no material transactions that have not been
properly recorded in the books and records of the Corporations underlying
the Audited Financial Statements or the Interim Date Pro Forma Consolidating
Balance Sheet and the Closing Date Consolidating Balance Sheet. There have
been no material changes to the Corporation's system(s) of internal
accounting controls from March 31, 1994 through the Closing.
3.5 Absence of Changes. Since the Interim Date, except with the
consent of Jacobs given in writing prior to or at the Closing, except as
specifically contemplated or permitted by this Agreement, or except as set forth
in Exhibit 3.5, with respect to any of the Corporations there has not been any:
(i) Transaction except in the ordinary course of its business as
conducted on that date;
(ii) Capital expenditure by any Corporation exceeding $25,000.00
individually or $250,000.00 in the aggregate;
(iii) Change in its financial condition, properties, liabilities,
assets, or business operations, that, either individually or in the
aggregate, is materially adverse to such corporation;
(iv) Destruction, damage to, or loss of any asset (whether or not
covered by insurance) that materially and adversely affects its financial
condition or business;
(v) Labor trouble or other event or condition of any character
materially and adversely affecting its financial condition, properties,
business, assets or operations;
(vi) Change in accounting methods or practices utilized by it for
financial reporting purposes;
(vii) Revaluation by it of any of its assets;
(viii) Declaration, setting aside, or payment of a dividend or
other distribution with respect to its capital stock, or any direct or
indirect redemption, purchase, or
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other acquisition by it of any of its shares of capital stock;
(ix) Except in the ordinary course of business, increase in the
salary or other compensation payable or to become payable to any of its
officers or directors or the declaration, payment or commitment or
obligation of any kind for the payment by the Corporations of a bonus or
other additional salary or compensation to any such person;
(x) Sale or transfer of any material asset except in the ordinary
course of business;
(xi) Amendment or termination of any contract, agreement or
license to which it is a party, except in the ordinary course of business;
(xii) Loan to any Person other than CRSS or an Affiliate of CRSS,
or guaranty by it of any loan or obligation to any Person;
(xiii) Mortgage, pledge or other encumbrance of any asset;
(xiv) Waiver or release of any right or claim, other than in the
ordinary course of business;
(xv) Other event or condition of any character that has or might
reasonably be expected to have a material and adverse effect on its
financial condition, business or assets;
(xvi) Issuance or sale of any shares of its capital stock of any
class or of any other class or kind of its securities;
(xvii) Transactions not in the ordinary course of business with
any bank or other financial institution, including, without limiting the
generality of the foregoing, any loans or withdrawals not in the ordinary
course of business;
(xviii) Acquisition or contract to acquire in any manner,
directly or indirectly, any of its outstanding capital stock or of any other
corporation;
(xix) Payment of or any obligation to pay any amounts either in
cash or other property to any Person for cancellation of any outstanding
options or agreements to acquire shares of its capital stock;
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(xx) Change in its capital structure or articles of incorporation
or bylaws; or
(xxi) Agreement by it to do any of the things described in the
preceding clauses (i) through (xx).
3.6 Tax and Other Returns and Reports. All Tax Returns (as defined in
Section 6.4(v)(e)) required to be filed by or on behalf of each of the
Corporations with respect to any Taxes (as defined in Section 6.4(v)(e)) have
been filed by CRSS or one of its Affiliates with the appropriate governmental
agencies in all jurisdictions in which such Tax Returns are required to be
filed, and all such Tax Returns properly reflect the liabilities of each of the
respective Corporations for Taxes for the periods, property or events covered
thereby. All Taxes, including those without limitation that are called for by
the Tax Returns, or heretofore or hereafter claimed to be due by any taxing
authority from each Corporation, have been properly accrued or paid.
3.7 Real Property; Environmental Laws.
(i) Except as set forth on Exhibit 3.7 the Corporations own no
real property. Exhibit 3.7 to this Agreement contains a complete list
accurately identifying the address, term and rental terms of all real
property leased or occupied by the Corporations (the "Lease(s)"). The real
property described in said Leases or otherwise occupied by one or more
Corporations is hereinafter referred to as the "Real Property". Exhibits 3.7
and 3.9 contain a description of all buildings, fixtures, and other
improvements located on the Real Property. Each of the Corporations enjoys
peaceful and undisturbed possession under all Leases to which it is a party,
and all Leases are valid and subsisting and are in full force and effect.
Except as set forth on Exhibit 3.7 there is no condition on or under any
such Real Property that constitutes a violation of any law, regulation or
ordinance of any jurisdiction that would have a material adverse effect on
the business, operations or financial condition of any of the Corporations.
(ii) With respect to the Real Property and with respect to the
operations of the Corporations at other sites, except as set forth on
Exhibit 3.7, and except for matters that would not have a material and
adverse effect on the business, operations or financial condition of any of
the Corporations:
(a) Neither the Real Property nor any portion thereof is in
violation of, or subject to any
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existing, pending or threatened investigation by any governmental
authority under, any Environmental Law.
(b) None of the Corporations has been, or is, required to
obtain any Environmental Permits with respect to the Real Property or
its business operations that have not been obtained.
(c) None of the Corporations has used, or does now use or
permit the use of, the Real Property in any manner that violates any
Environmental Law.
(d) All transportation and offsite disposal arrangements
used by each Corporation to dispose of Hazardous Materials are in
compliance with all Environmental Laws.
(e) The processes used by each Corporation in its
operations have not resulted, and do not currently result, in the
disposal, spill, discharge, leak, release or emission of any Hazardous
Materials on, under, in or about the Real Property in violation of any
Environmental Laws.
(f) Hazardous Materials have not been released or disposed
of on the Real Property or, to the actual knowledge of CRSS, any
property adjoining the Real Property;
(g) Each Corporation has disposed of all wastes, including
those containing any Hazardous Materials, in compliance with all
applicable Environmental Laws, and none of them has received any
notice or claim of liability for any off-site contamination;
(h) All required Environmental Permits have been obtained
and are in effect for the operations conducted on the Real Property,
and there are no pending applications for issuance or renewal of any
Environmental Permit for the operations conducted at the Real
Property;
(i) None of the Real Property is listed or, to the best
knowledge of CRSS, proposed for listing on the National Priorities
List under CERCLA or on the CERCLA list or any similar state list of
sites requiring investigation or cleanup or that is the subject of any
Environmental Claim;
(j) None of the Corporations has transported or arranged
for the transportation of any Hazardous
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Materials to any location that is listed or, to the best knowledge of
CRSS, proposed for listing on the National Priorities List under
CERCLA or on the CERCLA list or any similar state list;
(k) There are not now, and never have been, any underground
storage tanks located on the Real Property, or to the best knowledge
of CRSS, on any property adjoining the Real Property;
(l) None of the Corporations has received any notice or
claim of liability under any Environmental Law, including pending or
threatened liens; and
(m) There are no circumstances with respect to any Real
Property that subject it to any restrictions on ownership, occupancy,
use or transferability under any applicable Environmental Law.
3.8 Contracts.
(i) Exhibit 3.8(i) lists the Assumed Contracts.
(ii) Exhibit 3.8(ii) lists the Continuing Contracts.
(iii) Exhibit 3.8(iii) lists all Contracts pursuant to which any
of the Corporations leases, or CRSS or any CRSS Subsidiary leases for the
benefit of any Corporation, any tangible personal property ("Personal
Property Leases"), except for Personal Property Leases providing for total
payments of less than $5,000.00 or terminating or terminable without penalty
within 120 days after the Closing Date.
(iv) Exhibit 3.8(iv) lists all Ancillary Contracts to which any
of the Corporations is a party or to which CRSS or any CRSS Subsidiary is a
party for the benefit of any Corporation, except for Ancillary Contracts
providing for total payments of less than $5,000.00 or terminating or
terminable without penalty within 120 days after the Closing Date and except
for subcontracts and other contracts entered into in the ordinary course of
business associated with the performance of Customer Contracts.
(v) There are no material breaches by any of the Corporations or,
to the best knowledge of CRSS, any other party under any Contract to which
any of the Corporations is a party. None of the Corporations has received
any notice that there exists an event or condition with respect to any
Contract to which it is a party that has not since been
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cured or waived and that, with or without the passage of time or the giving
of notice, or both, would constitute a default by such Corporation under any
such Contract.
(vi) There have been no changes to the completion bonuses offered
by any of the Corporations with respect to any of the At Risk Contracts
since May 26, 1994.
3.9 Equipment and Other Assets. Exhibit 3.9 to this Agreement is a
complete and accurate schedule describing in reasonable detail, and specifying
the location of, all trucks, automobiles, machinery, equipment, computers,
apparatus, furniture, supplies, tools, drawings and all other tangible personal
property owned by, in the possession of, or used by any of the Corporations in
connection with the Business to be Acquired. The property covered by the
Personal Property Leases listed in Exhibits 3.8(iii), to the extent required to
be listed therein, or 3.9 constitutes all such tangible personal property used
by any of the Corporations in connection with the Business to be Acquired.
Except as stated in Section 3.13, no personal property owned by any of the
Corporations in connection with the Business to be Acquired is held under or
subject to any contract, security interest, conditional sales contract or other
title retention or security arrangement or is other than in the possession or
control of one of the Corporations. The tangible personal property listed on
Exhibit 3.9 shall be sold to Jacobs "as is, where is".
3.10 Accounts Receivable. Exhibit 3.10 contains complete and accurate
schedules of the accounts receivable of the respective Corporations reflected on
the Interim Date Pro Forma Consolidating Balance Sheet, together with an
accurate aging of these accounts as of March 31, 1994. These accounts
receivable, and all accounts receivable of each Corporation created after that
date to the Closing Date, have been booked, billed and recognized consistently
with past practice. The allowances for uncollectible accounts and collection
losses on the Interim Date Pro Forma Consolidating Balance Sheet have been, and
such allowances on the Closing Date Consolidating Balance Sheet shall be,
determined in accordance with generally accepted accounting principles on a
basis consistent with the presentations in the Audited Financial Statements.
3.11 Backlog. Exhibit 3.11 sets forth a substantially true and correct
statement of the backlog of each Corporation at March 31, 1994, as determined in
accordance with past practice consistently applied.
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3.12 Intellectual Property Rights.
(i) To the best knowledge of CRSS, none of the Corporations has
infringed or is now infringing any Intellectual Property Rights owned by any
other Person or has received any notice or been served in any lawsuit
alleging that it is infringing any patent or other Intellectual Property
Rights owned by any other Person.
(ii) Except as set forth in Exhibit 3.12, to the best knowledge
of CRSS, each of the Corporations is the sole owner of, or is licensed by
one of the other CRSS Companies under, all of the CRSS Intellectual Property
Rights, free and clear of any liens, encumbrances, restrictions, or legal or
equitable claims of others. To the best knowledge of CRSS, each of the
Corporations has the right to use all of the Intellectual Property
reasonably necessary to conduct its business as presently conducted.
(iii) To the best knowledge of CRSS none of the Corporations uses
any trademark, trade name or service mark other than the trademarks listed
on Exhibit 3.12. To the best knowledge of CRSS, no other Person other than
CRSS or one or more of CRSS Subsidiaries owns any trademark, trade name or
service mark listed on Exhibit 3.12.
(iv) To the best knowledge of CRSS, except as set forth in
Exhibit 3.12 neither CRSS nor any CRSS Subsidiary have granted or will grant
to any Person other than CRSS or a CRSS Subsidiary the right to use, any of
the names, listed in Exhibit 3.12 as a trade name, trademark, service mark,
corporate or firm name except as specifically set forth in Annex VI hereto.
Except as set forth on Exhibit 3.12 CRSS has, to the best knowledge of CRSS,
the right to grant the right to use the names listed on Exhibit 3.12.
3.13 Title to Assets.
(i) Except as set forth in Exhibit 3.13 each of the Corporations
has good, valid and indefeasible title to all of the tangible assets
purported to be owned by it, whether real, personal, or mixed. All tangible
property owned by the Corporations is free and clear of restrictions on or
conditions to transfer or assignment, and free and clear of mortgages,
liens, pledges, charges, encumbrances, equities, claims, easements, rights
of way, covenants, conditions or restrictions, except for (a) those
disclosed in the Audited Financial Statements and (b) the lien of current
taxes not yet due and payable. To the best knowledge of CRSS none of the
Real Property requires any
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repairs or reconstruction that would have a material and adverse effect on
the business, operations or financial condition of any of the Corporations.
(ii) To the best knowledge of CRSS, neither CRSS nor the CRSS
Subsidiaries, any officer, director or employee of any of them or any trust
or corporation in which any of them have a beneficial interest, owns, or has
any interest, directly or indirectly, in any of the Real Property or
personal property owned by or leased to any of the Corporations or any
copyrights, patents, trademarks, trade names, trade secrets or other
Intellectual Property Rights owned by or licensed to any of the Corporations
except as disclosed in Exhibit 3.13.
3.14 Insurance Policies; Bonds.
(i) Exhibit 3.14 to this Agreement is a complete list accurately
describing all insurance policies held by or for the benefit of the
Corporations or concerning the respective businesses and properties of one
or more of the Corporations, including but not limited to all casualty,
errors and omissions insurance and officers' and directors' liability
insurance policies carried by CRSS or any of its Affiliates that cover the
Corporations or their officers and directors. All these policies are in the
respective principal amounts set forth in Exhibit 3.14. All such policies
are in full force and effect in accordance with their terms, no notice of
cancellation has been received, and there is no existing default or event
that, with the giving of notice or lapse of time or both, would constitute a
default thereunder, and all premiums to date have been paid in full. With
respect to the Business to be Acquired none of CRSS or its Affiliates has
been refused any insurance, or has its coverage been limited, by any
insurance carrier to which it has applied for insurance or with which it has
carried insurance during the past five years. Except as provided in Section
11.11, all insurance policies of the Business to be Acquired will cease to
provide coverage to Jacobs or its Affiliates (including the Stock
Corporations) for any occurrences following the Closing (with respect to
occurrence-based policies) and for any claims asserted following Closing
(with respect to claims-made policies); provided, however, that this in no
way shall limit the rights of CRSS or any of its Affiliates with respect to
any insurance coverage, including coverage provided by CRSS Insurance Ltd.
(ii) Exhibit 3.14 also contains a true and complete description
of all outstanding bonds, letters of credit and other surety arrangements
(exclusive of parent company guarantees) issued or entered into in
connection
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with the business, assets and liabilities of the Corporations.
3.15 Material Contracts.
(i) None of the Corporations is a party to, nor is it bound by,
any representative or agency agreement, including any such agreement for
registration, qualification or representation in a foreign country, any
requirements agreement, or any Contract not entered into in the ordinary
course of business, except the Contracts listed in Exhibits 3.7, 3.8(i)-
(iv), 3.9 or 3.15. There is no default by any of the Corporations, or to the
best knowledge of CRSS, by any other party or event that with notice or
lapse of time, or both, would constitute a default by any of the
Corporations or, to the best knowledge of CRSS, any other party to any of
these Contracts that would have a material and adverse effect on the
financial condition, business, properties or operations of any of the
Corporations. To the best knowledge of CRSS, none of the Contracts listed on
Exhibit 3.15 is materially adverse to the business, properties or financial
condition of the Corporations or any of them.
(ii) None of the Corporations has received written notice that
any party to any Customer Contracts intends to cancel or terminate any
Customer Contracts or to exercise or not exercise any options under any
Customer Contracts.
(iii) To the best knowledge of CRSS, each of the Customer
Contracts under which Jacobs is to acquire rights or obligations hereunder,
including those to which Constructors, International or New York are party,
is valid and enforceable in accordance with its terms; the Corporation that
is a party thereto is, and, to the best knowledge of CRSS, all other parties
thereto are, in compliance with the provisions thereof; such Corporation is
not, and, to the best knowledge of CRSS, no other party thereto is, in
default in the performance, observance or fulfillment of any material
obligation, covenant or condition contained therein; and to the best
knowledge of CRSS, no event has occurred which with or without the giving of
notice or lapse of time, or both, would constitute a default thereunder.
Furthermore, to the best knowledge of CRSS, no Customer Contract contains
any contractual requirement with which there is a reasonable likelihood that
such Corporation or any other party thereto will be unable to comply.
(iv) None of the Corporations is subject to any charter or other
corporate restriction or any judgment, order, writ, injunction, decree or
award that materially and
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adversely affects or materially restricts or, is expected to, materially and
adversely affect or materially restrict, the business, operations, assets,
properties, or financial condition of the Business to be Acquired after
consummation of the transactions contemplated hereby.
3.16 Labor Matters. With respect to the Business to be Acquired:
(i) Each of CRSS and its Affiliates (a) is in compliance in all
material respects with all applicable laws respecting employment and
employment practices, terms and conditions of employment and wages and hours
and occupational safety and health laws; (b) is not engaged in any unfair
labor practice as defined by the National Labor Relations Act or any similar
state or foreign agency, except any noncompliance or practices which are not
materially adverse to the financial condition of such corporation; and (c)
there is no unfair labor practice complaint against any such corporation
pending before the National Labor Relations Board. There is no labor strike
or lockout actually pending or threatened against or affecting any such
corporations. Except as set forth in Exhibit 3.16: None of the employees of
any of the Corporations is represented by any labor organization and there
is no current union organizing activities among such employees; no material
grievance nor any material arbitration proceeding arising out of or under
collective bargaining agreements is pending; no collective bargaining
agreement which is binding on the Corporations restricts any of them from
relocating or closing any of their operations; and none of the Corporations
is a party to or bound by any collective bargaining agreement or similar
agreement with any labor organization or employee organization applicable to
such employees.
(ii) Since January 1, 1985 none of the CRSS Companies has
experienced any strike of their employees. There are no written personnel
policies, rules or procedures applicable to the employees of any of the CRSS
Companies in connection with Business to be Acquired, except as set forth in
the documents listed in Exhibit 3.16.
(iii) Except as set forth in Exhibit 3.16, there are no charges
involving any of the Corporations pending before the Equal Employment
Opportunity Commission or any other agency responsible for the prevention of
unlawful employment practices. None of the CRSS Companies has received
notice of the intent of any federal, state, local or foreign agency
responsible for the enforcement of labor and employment laws to conduct an
investigation with
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respect to or relating to the Corporations, and no such investigation is in
progress.
(iv) Since the enactment of the Worker Adjustment and Retraining
Notification Act (the "WARN Act"), neither CRSS nor any of its Affiliates
has effectuated,
(a) a "plant closing" (as defined in the WARN Act)
affecting any site of employment or one or more facilities or
operating units within any site of employment; or
(b) a "mass layoff" (as defined in the WARN Act) affecting
any site of employment or facility of CRSS or any of its Affiliates
except in compliance with the WARN Act; and none of the Corporations
has been affected by any transaction or engaged in layoffs or
employment terminations sufficient in number to trigger application of
any similar state or local law except in compliance with any such law.
3.17 Compliance with Laws.
(i) Each of the Corporations has complied with, and is not in
material violation of, any applicable treaties, statutes, laws and
regulations affecting its financial condition, business, properties or
operation of its business ("Regulations") except for violations and failures
to comply that do not and will not have a material and adverse effect on the
financial condition, business, properties or operations of the Business to
be Acquired. Without limiting the generality of the foregoing, except as
otherwise disclosed herein, each of the Corporations owns, holds, possesses
or lawfully uses in the operation of its business all franchises, licenses,
permits, rights, applications, filings, registrations and other
authorizations ("Authorizations") that are in any manner necessary for it to
conduct the Business to be Acquired, free and clear of all liens, charges,
restrictions and encumbrances and in compliance with all Regulations, except
where the failure to hold or keep current such Authorizations or failure to
comply with such Regulations would not have a material and adverse effect on
its financial condition, business, properties or the operation of its
business. None of the Corporations is in default or has received any notice
of any claim of default, with respect to any such Authorization, except
where the default or claimed default would not have a material and adverse
effect on its financial condition, business, properties or the operation of
its business. All such Authorizations are renewable by their terms or in the
ordinary course of business. No shareholder, director, officer, employee or
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former employee of CRSS or its Affiliates, or any other person, firm or
corporation owns or has any material, proprietary or financial interest in
any Authorization that any of the Corporations owns, possesses or uses in
the operation of the Business to be Acquired.
(ii) Neither CRSS nor any of its Affiliates has received any
notice of any asserted failure to comply with, or violation of, any
Regulation that would have a material and adverse effect on the Business to
be Acquired. Without limiting the generality of the foregoing, neither any
of the Corporations nor any employee or agent of any of them nor anyone on
their behalf has made any payments to any person, firm, corporation or
governmental or other entity that would have been required to be disclosed
by CRSS under applicable disclosure policies of the Securities and Exchange
Commission under Section 12 of the Securities Exchange Act of 1934, as
amended, or that would be unlawful under the Foreign Corrupt Practices Act,
15 U.S.C. Section 78dd, United States laws pertaining to the export of
technical data, United States laws pertaining to restrictive trade practices
or boycotts or the regulations under any of such statutes or laws and, since
December 31, 1986, none of the Corporations nor any employee or agent acting
on behalf of any of them has had outstanding any offer, promise to pay or
authorization of the payment of money or anything of value that would be in
violation of said Foreign Corrupt Practices Act.
3.18 Litigation. Except as listed and briefly described in Exhibit
3.18 there is no demand, claim, suit, action, arbitration, or legal,
administrative or other proceedings or to the best knowledge of CRSS,
governmental investigation or audit ("Litigation") pending or to the best
knowledge of CRSS, threatened against any of the Corporations or their
respective businesses, assets, or financial condition nor does CRSS have
knowledge of any acts, errors or omissions that in the normal course of events
could lead to any of the same. CRSS has furnished or made available to Jacobs
copies of all relevant court papers and other documents relating to the matters
set forth in Exhibit 3.18 in their possession. Except as set forth in Exhibit
3.18, neither CRSS nor any of its Subsidiaries is a party to or subject to the
provisions of any judgment, order, writ, injunction, decree or award of any
court, arbitrator or governmental or regulatory official, body or authority that
will materially and adversely affect the Business to be Acquired or the
transactions contemplated hereby. None of the Corporations is in default with
respect to any order, writ, injunction or decree of any federal, state, local or
foreign court, department, agency or instrumentality. Except as set forth in
Exhibit 3.18, none of the Corporations is presently engaged in any legal
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proceeding to recover moneys due to it or damages sustained by it.
3.19 [Intentionally Omitted]
3.20 Corporate Power; Authorization; Enforceable Obligations. CRSS has
the corporate power, authority and legal right to execute, deliver and perform
this Agreement. The execution, delivery and performance of this Agreement by
CRSS have been duly authorized by all necessary corporate action. This Agreement
has been, and the other agreements, documents and instruments required to be
delivered by CRSS in accordance with the provisions hereof (the "Corporation
Documents") will be, duly executed and delivered on behalf of CRSS by duly
authorized officers thereof, and this Agreement constitutes, and the Corporation
Documents when executed and delivered will constitute, the legal, valid and
binding obligations of CRSS enforceable against CRSS in accordance with their
respective terms.
3.21 Validity of Contemplated Transactions, etc. Except as otherwise
set forth on Exhibit 3.21, the execution, delivery and performance of this
Agreement by CRSS does not and will not violate, conflict with or result in the
breach of any term, condition or provision of, or require the consent of any
other person under, (a) any existing law, ordinance, or governmental rule or
regulation to which any of the CRSS Companies is subject, (b) any judgment,
order, writ, injunction decree or award of any court, arbitrator or governmental
or regulatory official, body or authority that is applicable to any of the CRSS
Companies, (c) the charter documents of any of the CRSS Companies or any
securities issued by any of the CRSS Companies, or (d) Contracts not entered
into in the ordinary course of business to which any of the CRSS Companies is a
party or by which any of the stock or assets to be conveyed hereunder may be
bound or affected. Except for required consents from governmental authorities
pursuant to Contracts with any of the CRSS Companies, and except as aforesaid or
as set forth in Exhibit 3.21, no authorization, approval or consent of, and no
registration or filing with, any governmental or regulatory official, body or
authority is required in connection with the execution, delivery or performance
of this Agreement by any of the CRSS Companies.
3.22 No Conflicts of Interest. To the best knowledge of CRSS, and
except as set forth in Exhibit 3.22, neither CRSS nor any of its Affiliates nor
any officer or director of any of them or any trust or corporation in which any
of them have a beneficial interest has any material direct or indirect interest
in any competitor, supplier or customer of any of the Corporations or in any
Person from whom or to whom any of them
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leases any Real Property or personal property, or in any other Person with whom
any of the Corporations is doing of business.
3.23 Inspection of Documents. Each of the Corporations has furnished
or made available to Jacobs for its examination (i) copies of their respective
certificates of incorporation and bylaws as amended to the date of this
Agreement; (ii) their respective minute books containing all records required to
be set forth of all proceedings, consents, actions and meetings of their
respective shareholders and board of directors; and (iii) their respective stock
transfer records setting forth all transfers of capital stock.
3.24 Officers, Directors and Agents. Exhibit 3.24 is a complete and
accurate list of the names and addresses of all officers and directors of each
of the Corporations and all persons who are the agents and representatives of
the Corporations pursuant to written agreements.
3.25 Bank Accounts. CRSS has furnished to Jacobs a complete and
accurate list of the names and addresses of all banks or other financial
institutions in which each of the Corporations has an account, deposit or safe-
deposit box, with the names of all persons authorized to draw on these accounts
or deposits or to have access to these boxes.
3.26 Employee Benefit Plans; ERISA.
(i) CRSS has furnished to Jacobs a true and complete list of each
bonus, deferred compensation, incentive compensation, stock purchase, stock
option, severance or termination pay, hospitalization or other medical, life
or other insurance, supplemental unemployment benefits, profit sharing,
pension, or retirement plan, program, agreement or arrangement, and each
other material employee benefit plan, program, agreement or arrangement,
maintained or contributed to or required to be contributed to by any CRSS
Company for the benefit of any employee or terminated employee of any of the
Corporations, whether formal or informal (the "Plans").
(ii) With respect to each of the Plans, CRSS has heretofore made
available to Jacobs true and complete copies of each of the following
documents:
(a) copies of all Plans (including all amendments thereto);
(b) a copy of the actuarial report, if required under
ERISA, with respect to each such Plan for the last two years;
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(c) a copy of the most recent Summary Plan Description;
(d) if the Plan is funded through a trust or any third
party funding vehicle, a copy of the trust or other funding agreement
(including all amendments thereto) and the latest financial statements
thereof; and
(e) the most recent determination letter received from the
Internal Revenue Service with respect to each Plan that is intended to
be qualified under Section 401 of the Code.
(iii) None of the Plans is a "multiemployer pension plan," as
that term is defined in Section 3(37) of ERISA.
(iv) CRSS terminated its defined benefit pension plan on July 1,
1987, annuity contracts were purchased to cover all benefits accrued
under the plan and the remaining assets were returned to CRSS. Neither
CRSS, any of its Affiliates nor any trade or business (whether or not
incorporated) that together with any CRSS Company would have been
deemed a "single employer" within the meaning of Section 4001(b) of
ERISA has subsequently contributed, or was required to contribute, to
any defined benefit plan or multiemployer plan subject to Title IV of
ERISA.
(v) No Plan is subject to Title IV of ERISA, Section 302 of ERISA
or Section 412 of the Code.
(vi) Neither CRSS, its Affiliates nor any of the Plans has
engaged in a transaction in connection with which CRSS or any of its
Affiliates, or any of the Plans could be subject to any civil
liability under Section 409 of ERISA or any civil penalty assessed
pursuant to Section 502(i) of ERISA or any tax imposed pursuant to
Section 4975 or 4976 of the Code.
(vii) Full payment has been made, or will be made in accordance
with Section 404(a)(6) of the Code, of all amounts CRSS or any of its
Affiliates is required to contribute under the terms of each of the
Plans as of the last day of the most recent plan year thereof ended
prior to the date of this Agreement.
(viii) Each of the Plans has been operated and administered in
all material respects in accordance with ERISA and the Code.
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(ix) Each of the ERISA Plans which is intended to be "qualified"
within the meaning of Section 401(a) of the Code is so qualified.
(x) Except as disclosed on Exhibit 3.26 hereto, no Plan provides
benefits, including without limitation death or medical benefits (whether or
not insured), with respect to current or former employees of any of the
Corporations beyond their retirement or other termination of service (other
than (i) coverage mandated by applicable law, (ii) death benefits, medical
benefits or retirement benefits under any Plan, (iii) deferred compensation
benefits accrued as liabilities on the books of the Corporations, or (iv)
benefits the costs of which are borne by the current or former employee (or
his beneficiary)).
(xi) Except as disclosed on Exhibit 3.26 hereto the consummation
of the transactions contemplated by this Agreement will not (i) accelerate
the vesting, or increase the amount of compensation due, any current or
former employee or officer of any of the Corporations, (ii) result in any
prohibited transaction described in Section 406 of ERISA or Section 4975 of
the Code for which an exemption is not available, or (iii) entitle any
current or former officer or employee of any of the Corporations to amounts
payable under the Plans which will fail to be deductible for federal income
tax purposes by virtue of Section 280G of the Code.
(xii) There are no pending, threatened or anticipated lawsuits by
or on behalf of any of the Plans, by any employee or beneficiary covered
under any such Plan with respect to such Plan, or otherwise involving any
such Plan (other than routine claims for benefits).
3.27 Contracts With Government Agencies. With regard to each Contract,
bid, offer, quotation, or report of any kind with or to any governmental agency
with respect to the Corporations, except as set forth in Exhibit 3.27, each of
CRSS and its Affiliates:
(i) has complied with all governmental procurement and other
regulations;
(ii) has not violated any statutes or regulations relative to
prohibited practices, including but not limited to the False Claims Act,
prohibitions against "Buying In", the Anti-Kickback Act, the Federal
Election Campaign Act, prohibitions against conflict of interest and Anti-
Trust laws or any governmental accounting regulations;
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(iii) has made no representations or certifications that are
untrue or filed any accountings that are inaccurate;
(iv) is unaware of any current or prospective governmental audit
concerning any of the above, concerning pricing, or relative to debarment,
other than regular audits in the ordinary course of governmental contracts;
or
(v) is unaware of any prospective disallowance of costs, fees or
money claims with respect to any governmental contract.
3.28 Disclosure. The examination by Jacobs of any document provided to
Jacobs by any person, or the receipt of any information by Jacobs from any of
the CRSS Companies or from any investigation by them or from any other source
shall not constitute a waiver by Jacobs of any covenant, warranty or
representation of CRSS contained in this Agreement.
ARTICLE FOUR: REPRESENTATIONS AND WARRANTIES OF JACOBS
Jacobs warrants and represents to and covenants with CRSS, as follows:
4.1 Organization and Standing. Jacobs is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware, has all necessary corporate powers to own its properties and to
carry on its business as now conducted and operated by it and is duly qualified
to do intrastate business and is in good standing in all of the jurisdictions in
which the failure so to qualify would have a material and adverse effect on the
business or financial condition of Jacobs.
4.2 Authority. The execution, delivery and performance of this
Agreement by Jacobs have been duly authorized by all requisite corporate action,
and such execution, delivery, and performance do not and will not violate
Jacobs' certificate of incorporation, bylaws or any contract or commitment to
which it is a party or by which it is bound. No action on the part of the
shareholders of Jacobs is required for the approval of this Agreement.
4.3 Corporate Power; Authorization Enforceable Obligations. Jacobs has
the corporate power, authority and legal right to execute, deliver and perform
this Agreement. The execution, delivery and performance of this Agreement by
Jacobs have been duly authorized by all necessary corporate action. This
Agreement has been, and the other agreements, documents and instruments required
to be delivered by Jacobs in accordance with the provisions hereof (the "Jacobs
Documents") will be, duly
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executed and delivered on behalf of Jacobs by duly authorized officers of
Jacobs, and this Agreement constitutes, and the Jacobs Documents, when executed
and delivered, will constitute, the legal, valid and binding obligations of
Jacobs enforceable against Jacobs in accordance with their respective terms.
4.4 Validity of Contemplated Transactions, etc. The execution,
delivery and performance of this Agreement by Jacobs does not and will not
violate, conflict with or result in the breach of any term, condition or
provision of, or require the consent of any other person under, (a) any existing
law, ordinance, or governmental rule or regulation to which Jacobs or any of its
Subsidiaries is subject, (b) any judgment, order, writ, injunction decree or
award of any court, arbitrator or governmental or regulatory official, body or
authority that is applicable to Jacobs or any of its Subsidiaries, (c) the
charter documents of Jacobs or any of its Subsidiaries or any securities issued
by Jacobs or any of its Subsidiaries, or (d) except to the extent entered into
in the ordinary course of business, any mortgage, indenture, agreement,
contract, commitment or lease to which Jacobs or any of its Subsidiaries is a
party. Except as set forth in this Agreement no authorization, approval or
consent of, and no registration or filing with, any governmental or regulatory
official, body or authority is required in connection with the execution,
delivery or performance of this Agreement by Jacobs.
ARTICLE FIVE:
[Intentionally Omitted]
ARTICLE SIX: OBLIGATIONS OF THE PARTIES
6.1 Commercially Reasonable Efforts. Subject to the terms and
conditions of this Agreement, each of the parties hereto shall use its
commercially reasonable efforts to take, or cause to be taken, all action, and
to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement.
6.2 Hart-Scott-Rodino Filings. As promptly as practicable, Jacobs and
CRSS will make all filings and submissions under the H-S-R Act and any
applicable state regulations as may be reasonably required to be made in
connection with this Agreement and the transactions contemplated hereby. CRSS
shall furnish to Jacobs, and Jacobs shall furnish to CRSS such information and
assistance as the other may reasonably request in connection with the
preparation of any such filings or submissions. CRSS shall provide Jacobs, and
Jacobs shall provide CRSS, with copies of all correspondence, filings or
communications (or memoranda setting forth the substance thereof)
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between such party or any of its representatives, on the one hand, and any
governmental agency or authority or members of their respective staffs, on the
other hand, with respect to this Agreement and the transactions contemplated
hereby.
6.3 Public Announcements. Jacobs and CRSS agree that they and their
Affiliates will not issue any press release or otherwise make any public
statement or respond to any press inquiry with respect to this Agreement or the
transactions contemplated hereby without the prior approval of the other party,
which will not be unreasonably withheld, except as may be required by law or by
the New York Stock Exchange.
6.4 Tax Matters.
(i) Section 338(h)(10) Election. CRSS and Jacobs will make a
timely joint election under Section 338(h)(10) (and, if required, in order
to effectuate a Section 338(h)(10) election, an election under Section
338(g)) of the Internal Revenue Code of 1986, as amended (the "Code") in
compliance with the applicable Treasury Regulations in order that the
transactions contemplated by this Agreement be treated for federal income
tax purposes as a sale of assets and a subsequent subsidiary liquidation by
CRSS of any and all target corporations and target affiliates as defined in
Section 338 and the regulations thereunder, including but not limited to
Constructors, International and New York, and Jacobs and CRSS shall file any
corresponding elections available under state, local or foreign tax laws.
Any liability for Taxes resulting from the election under Section 338(h)(10)
and, if required, Section 338(g) of the Code will be paid by CRSS. In
particular, and not by way of limitation, in order to effect any such
election, not later than the delivery to Jacobs of the Closing Date
Consolidating Balance Sheet, Jacobs and CRSS agree to jointly and promptly
agree to, and if required, execute necessary copies of completed Internal
Revenue Service Form 8023, Form 8594, and any other forms or statements
required by the Code, applicable Treasury Regulations or the Internal
Revenue Service, together with any and all attachments required to be filed
therewith pursuant to applicable Treasury Regulations. Taxes or recoverable
amounts as a result of the joint election under Section 338(h)(10) will be
borne by or inure to CRSS in a manner which will not affect the Closing Date
Consolidated Net Worth of the Business to be Acquired.
(ii) Taxes Prior to, Including, and After the Closing. Jacobs
acknowledges that CRSS intends to include the Corporations in its
consolidated federal income Tax Return for the period prior to and including
the Closing Date. The liability (or asset) for any federal income Taxes
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and state or local income Taxes reported on a consolidated basis for CRSS
and its subsidiaries, including Services and the Services Affiliates, for
the periods prior to and including the Closing Date shall be borne by, or
inure to the benefit of, CRSS and CRSS shall indemnify and hold harmless
Jacobs, subject to and in the manner set forth in Article Twelve, against
any and all liability for or with respect to such income Taxes claimed or
assessed for the periods prior to and including the Closing Date. CRSS shall
also indemnify and hold harmless Jacobs, subject to and in the manner set
forth in Article Twelve, against any and all liability for or with respect
to income Taxes arising from the making of the joint election by CRSS and
Jacobs under Section 338(h)(10). The liability for any income Taxes of
Constructors, International and New York for the periods beginning after the
Closing Date shall be borne by Jacobs, and Jacobs will indemnify and hold
harmless CRSS, subject to and in the manner set forth in Article Twelve,
against any and all liability for or with respect to income Taxes of
Constructors, International and New York claimed or assessed for all taxable
periods beginning after the Closing Date.
(iii) Cooperation. After the Closing, Jacobs and CRSS shall, and
Jacobs and CRSS shall cause their respective Affiliates to, cooperate fully
with one another and shall make available to one another, as reasonably
requested, all information, records or documents relating to income tax
liabilities of the Corporations for all periods prior to or ending on the
Closing Date and shall preserve all such information, records and documents
until the expiration of any applicable statutes of limitation or extensions
thereof. Jacobs, CRSS, and their respective Affiliates also shall make
available to one another, as reasonably requested, personnel responsible for
preparing or maintaining information, records and documents in connection
with income tax matters.
(iv) Audits.
(a) So long as taxable periods of the Corporations ending
on or prior to the Closing Date remain open for an assessment of
income Taxes, Jacobs and CRSS shall promptly notify the other in
writing within ten (10) days of receipt by Jacobs, CRSS, or their
respective subsidiaries of notice of (i) any pending or threatened
audits or assessments with respect to income Taxes of the
Corporations, and (ii) any pending or threatened audits or assessments
with respect to income Taxes of Jacobs which may affect the income Tax
liabilities of the Corporations for taxable periods ending on or prior
to the Closing Date. CRSS shall have the right to represent the
interests of the
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Corporations in any Tax audit or administrative or court proceeding
relating to fiscal periods ending on or prior to the Closing Date and
to employ counsel of its choice at its expense. Jacobs agrees that it
will, subject to the provisions of the Services Agreement, cooperate
fully with CRSS and its counsel in the defense against or compromise
of any claim in any said proceeding.
(b) If, as a result of the examination of the consolidated
or separate federal, state or local income Tax Returns of CRSS or any
of CRSS's Tax Subsidiaries for a taxable year ending on or before or
including the Closing Date, there shall be made after the Closing Date
any adjustment which decreases deductions, losses or credits against
income Taxes ("Tax Benefits") or which increases income, gains or
recaptures of credits against income Taxes ("Tax Detriments") for any
such taxable year and which will permit Jacobs or any of the
Corporations (or any of Jacobs' Tax Affiliates) to increase the Tax
Benefits or decrease the Tax Detriments to which they would otherwise
have been entitled for any taxable year beginning on or after the
Closing Date, CRSS will notify Jacobs of such adjustment and provide
Jacobs with such information as may be necessary for Jacobs to take
account of such increases through the filing of a claim for refund or
otherwise. Jacobs shall take any reasonable action necessary to secure
the benefit of such increases or decreases and shall pay CRSS the
amount of such benefit (together with interest, if any, received),
such amount to be paid when, as and only to the extent such benefit is
actually recognized, less the amount, if any, of Jacobs' reasonable
expenses incurred in securing such benefit for CRSS.
(c) If, as a result of the examination of the consolidated
or separate federal, state or local income Tax Returns of Jacobs or
any of Jacobs' Tax Affiliates for a taxable year beginning on or after
the Closing Date, there shall be made after the Closing Date any
adjustment which decreases Tax Benefits or increases Tax Detriments
for any such taxable year and which will permit CRSS or CRSS's Tax
Subsidiaries to increase Tax Benefits or decrease Tax Detriments to
which CRSS would otherwise have been entitled for any taxable year
ending on or before and including the Closing Date, Jacobs will notify
CRSS of such adjustment and provide CRSS with such information as may
be necessary for CRSS to take account of such increase or decrease
through the filing of a claim for refund or otherwise, CRSS shall take
any reasonable
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action necessary to secure the benefit of such increases or decreases
and shall pay to the Purchaser the amount of such benefit (together
with interest, if any, received), such amount to be paid when, as and
only to the extent such benefit is actually recognized, less the
amount, if any, of the reasonable expenses of CRSS incurred in
securing such benefit for Jacobs.
(v) Miscellaneous.
(a) Prior Tax Sharing Agreements.
Effective on the Closing Date this Agreement terminates and
supersedes any and all other tax sharing or other allocation
agreements in effect on the date hereof as between (x) CRSS and (y)
Constructors, International or New York for all Taxes, regardless of
the taxable year for which such Taxes are imposed.
(b) Retention of Records.
For a period of ten (10) years from the Closing Date, none
of CRSS, Jacobs or any Tax Affiliates of either thereof shall dispose
of or destroy any of the business records and files of Services or any
Tax Subsidiary thereof relating to Taxes in existence on the Closing
Date without first offering to turn over possession thereof to CRSS
(in the case of records and files held by Jacobs or any Tax Affiliate
thereof) or Jacobs (in the case of records and files held by CRSS) by
written notice at least thirty (30) days prior to the proposed date of
such disposition or destruction.
(c) Resolution of Disagreements Among Parties.
If (x) CRSS and (y) Jacobs disagree as to the matters
governed by this Section 6.4, CRSS and Jacobs shall promptly consult
with each other in an effort to resolve such dispute. If any such
disagreement cannot be resolved within fifteen days after either party
asserts in writing that such dispute cannot be resolved, CRSS and
Jacobs shall jointly select a firm of nationally recognized
independent certified accountants mutually acceptable to CRSS and
Jacobs (the "Independent Accounting Firm") to act as an arbitrator to
resolve such disagreement. Such Independent Accounting Firm's
determination shall be binding and conclusive, and any expenses
relating to the engagement of such accounting firm shall be shared
equally by CRSS and Jacobs.
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(d) Limitation to Income Taxes.
Notwithstanding anything to the contrary in this Section
6.4, for all taxable years ending after the Closing Date, Jacobs shall
be responsible for all Taxes of Constructors, International and New
York, other than federal income Taxes and state or local income Taxes
reported on a consolidated basis for CRSS and its subsidiaries, which
income Taxes shall be subject to the mutual indemnity and other
provisions of this Section 6.4.
(e) Definitions.
For purposes of this Agreement, (1) except as specifically
provided herein, the term "Tax" or "Taxes" shall mean all taxes,
levies or other like assessments, charges or fees, including without
limitation, income, gross receipts, transfer, gains, excise, property,
sales, license, payroll, withholding, social security and franchise or
other governmental taxes, imposed by the United States, or any state,
county, local or foreign government and subdivision or agency thereof;
and such term shall include any interest, interest penalty, penalty or
additions to tax attributable to such taxes; (2) the term "Tax Return"
shall mean any report, return, statement or other written information
(including elections, declarations, disclosures, schedules, estimates,
and information returns) required to be supplied to a taxing authority
in connection with Taxes; (3) the term "Tax Affiliates", with respect
to any corporation, shall mean another corporation if both such
corporations are members of the same affiliated group of corporations
within the meaning of Section 1504(a) of the Code or any similar group
defined under a similar provision of state, local, or foreign law,
including any consolidated, unitary or combined group of corporations;
and (4) the term "Tax Subsidiary", with respect to any corporation,
shall mean another corporation in which such first corporation owns a
direct or indirect interest and which is a member of the same
affiliated group of corporations within the meaning of Section 1504 of
the Code or any similar group defined under a similar provision of
state, local, or foreign law, including any consolidated, unitary or
combined group of corporations as such first corporation.
6.5 WARN Act. None of the CRSS Companies shall, aany time before the
Closing Date, without complying fully with the notice and other requirements of
the WARN Act, effectuate (a)
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a "plant closing" as defined in the WARN Act affecting any site of employment or
one or more facilities or operating units within any site of employment of the
Business to be Acquired, or (b) a "mass layoff" as defined in the WARN Act
affecting any site of employment of the Business to be Acquired; or any similar
action under applicable state or foreign law requiring notice to employees in
the event of a plant closing or layoff. Subject to and in the manner set forth
in Article Twelve CRSS hereby agrees to indemnify Jacobs and to defend and hold
Jacobs harmless from and against any and all claims, losses, damages, expenses,
obligations and liabilities (including costs of collection, attorney's fees and
other costs of defense) which Jacobs may incur in connection with any suit or
claim of violation brought against Jacobs under the WARN Act or any similar
state or foreign law, which relates to actions taken by any of the CRSS
Companies prior to the Closing Date in connection with the Business to be
Acquired with regard to any site of employment or one or more facilities or
operating units within any site of employment of the Business to be Acquired.
Similarly, subject to and in the manner set forth in Article Twelve, Jacobs
hereby agrees to indemnify CRSS and to defend and hold CRSS harmless from and
against any and all claims, losses, damages, expenses, obligations and
liabilities (including costs of collection, attorney's fees and other costs of
defense) which CRSS may incur in connection with any suit or claim of violation
brought against CRSS under the WARN Act or any similar state or foreign law,
which relates to actions taken by Jacobs on or after the Closing Date in
connection with the Business to be Acquired with regard to any site of
employment or one or more facilities or operating units within any site of
employment of the Business to be Acquired affected by this Agreement.
6.6 Allocation of Employee Plan Responsibilities.
(i) In General. Effective as of the Closing, all participation
and continued accrual or provision of any benefits to any employee of the
Corporations, or any covered dependent or beneficiaries thereof in any Plan
sponsored by CRSS shall cease.
(ii) Employee Benefits. Except as specifically provided herein,
Jacobs shall not be obligated to provide any particular level or quality of
employee compensation, welfare, pension or other benefits to individuals
who, as of the Closing, (i) are employed by any of the CRSS Companies, (ii)
are the covered dependents or other beneficiaries under any benefit plans of
such an employee or (iii) are former employees of the Business to be
Acquired (or dependents or beneficiaries thereof) entitled to coverage as
required by Title I, Part 6 of ERISA and Section 4980B of the Code under any
of CRSS's employee welfare or pension plans ((i), (ii) and (iii)
collectively, the "Eligible Individuals").
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6.7 Post-Closing Access to Information and Personnel. In addition to
the requirements of Section 6.4(iii) hereof, each of Jacobs and CRSS will
provide the other, and Jacobs shall cause Constructors, International and New
York to provide CRSS, with the right, at reasonable times and upon reasonable
notice, to have access to, and to copy and use, any records or information and
to have access to and consult any person which or who may be relevant in
connection with the conduct of their respective businesses, including without
limitation with respect to preparation of the Closing Date Consolidating Balance
Sheet, financial and accounting requirements, litigation, employee benefit plan
and ERISA matters, Tax requirements (including with respect to Form 1099's and
preparation of Tax Returns), and requirements of applicable securities laws. The
party requesting assistance hereunder shall reimburse the other party for
reasonable out-of-pocket expenses incurred in providing such assistance;
provided, however that if CRSS or Jacobs needs to make any extensive use of the
employees of Jacobs or CRSS for any of the uses set forth in this paragraph, it
will be charged for such services pursuant to the Services Agreement in the form
of Annex IX to be entered into between the parties. Any information obtained
pursuant to this Section shall be held in strict confidence and shall be used
solely in connection with the reason it was requested.
ARTICLE SEVEN: CONDITIONS TO EACH PARTY'S OBLIGATIONS TO EFFECT THE
TRANSACTIONS CONTEMPLATED HEREBY
The respective obligations of each party to effect the transactions
contemplated hereby shall be subject to the fulfillment at or prior to the
Closing of the following conditions:
7.1 H-S-R Act. Any waiting period applicable to the consummation of
the transactions contemplated hereby under the H-S-R Act shall have expired or
been terminated, and no action shall have been instituted by the Department of
Justice challenging or seeking to enjoin the consummation of this transaction,
which action shall have not been withdrawn or terminated.
7.2 No Injunctions. The absence of any effective injunction, writ, or
preliminary restraining order of a court of competent jurisdiction directing
that the transactions provided for herein not be consummated.
7.3 Absence of Other Matters. No action, suit, proceeding or
investigation by or before any court, administrative agency or other
governmental authority shall have been instituted (i) to restrain, prohibit or
invalidate the trans-
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actions contemplated by this Agreement, (ii) which seeks material or substantial
damages by reason of completion of such transaction or (iii) which may
materially affect the right of Jacobs to own, operate or control, after the
Closing Date, all or any material portion of the Business to be Acquired.
7.4 Employment Agreements. All employment contracts to which CRSS or
any of the CRSS Subsidiaries is a party with respect to the Business to be
Acquired other than contracts terminable at will without financial penalty shall
have been terminated without liability to CRSS or any CRSS Subsidiary. It is the
intention of Jacobs to enter into employment agreements with A. S. McCord,
Michael W. McMahon, Warren M. Dean, Socrates S. Christopher and Craig L. Martin
on substantially the same financial terms as their current employment contracts
with CRSS or the applicable CRSS Subsidiary.
7.5 Intercompany Indebtedness. On or prior to the Closing Date, CRSS
and each of the CRSS Subsidiaries shall have forgiven any and all intercompany
indebtedness between it and each of the Corporations existing as of the Closing
Date. For federal income tax purposes such forgiveness shall have been treated
as a contribution to the capital of such corporations or a distribution by the
Corporations, as the case may be. The results of forgiving such intercompany
obligations shall have been reflected in the Preliminary Net Asset Value and
shall be reflected in the Closing Date Net Asset Value.
7.6 Service Mark. Jacobs and CRSS shall have entered into a Service
Mark License Agreement in the form of Annex IV, attached hereto and hereby made
a part hereof.
ARTICLE EIGHT: CONDITIONS PRECEDENT TO PERFORMANCE BY JACOBS
The obligations of Jacobs to consummate the transactions contemplated
by this Agreement are subject to the satisfaction on the Closing Date of all the
conditions set out below in this Article Eight.
8.1 Warranties and Representations. Except as otherwise permitted by
this Agreement, all representations and warranties by CRSS in this Agreement, in
any Exhibit, or in any written statement delivered to Jacobs by CRSS under this
Agreement shall be true on and as of the Closing Date as though made at that
time.
8.2 Covenants. CRSS shall have performed and complied with all
covenants and agreements required by this Agreement to be performed or complied
with by it on or before the Closing Date.
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8.3 No Adverse Changes. Except as disclosed in or pursuant to, or
contemplated by, this Agreement, during the period from the Interim Date to the
Closing Date, there shall not have been any materially adverse change in the
financial condition or the results of operations of any of the Corporations, and
none of the Corporations shall have sustained any material loss or damage to its
assets, whether or not insured, that materially and adversely affects its
ability to conduct a material part of its business.
8.4 Officers' Certificates. Jacobs shall have received a certificate,
dated the Closing Date, signed and verified by the chief executive officer and
chief financial officer of CRSS certifying, in such detail as Jacobs and its
counsel may reasonably request, that the conditions specified in paragraphs 8.1
through 8.3, 8.6, and 8.13 have been fulfilled.
8.5 Opinion of Counsel.
Jacobs shall have received from Messrs. Liddell, Sapp, Zivley, Hill
and LaBoon, L.L.P., counsel for each of the CRSS Companies, an opinion letter
dated the Closing Date, in form and substance satisfactory to Jacobs and its
counsel, stating that:
(i) Each of the CRSS Companies is a corporation duly
incorporated, existing and in good standing under the laws of the state of
its incorporation, which counsel shall specify, and has all necessary
corporate power to own its properties as now owned and to operate its
business as it is, to counsel's knowledge, now operated. Each of the
Corporations is duly qualified to do business and is in good standing in all
of the jurisdictions listed on Exhibit 3.1;
(ii) Exhibit 3.2 to this Agreement correctly sets forth the
authorized, issued and outstanding capitalization of each of the Stock
Corporations. All outstanding shares of each Stock Corporation are validly
issued, fully paid and nonassessable. To such counsel's knowledge, none of
the Stock Corporations has any other outstanding securities and no
outstanding subscriptions, options, rights, warrants, convertible securities
or other agreements or commitments obligating such corporation to issue or
transfer from treasury any additional shares of its capital stock of any
class;
(iii) CRSS has full power and authority to make, execute, deliver
and perform this Agreement; this Agreement and the consummation of the
transaction contemplated hereby have been duly authorized and approved by
all requisite corporate action; and except insofar as enforcement thereof
may be limited by bankruptcy, insolvency and other laws of general
application affecting the enforcement of creditors'
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rights and except as equitable remedies may not be available in certain
circumstances, this Agreement constitutes the valid and legally binding
obligation of CRSS, enforceable in accordance with its terms;
(iv) Neither the execution nor the delivery of this Agreement nor
the consummation of the transactions contemplated in this Agreement will
constitute a default, or an event that would with notice or lapse of time or
both constitute a default under, or violation or breach of the articles of
incorporation or bylaws of the Corporations;
(v) No authorization, consent or approval of any regulatory
authority of the United States federal government or the government of the
State of Texas (other than matters pertaining to contractor's, engineers'
and similar professional licenses and other than in connection with the
transfer of any Customer Contract to which either such government is a
party), is necessary in connection with the consummation of the transactions
contemplated by this Agreement except for compliance with the H-S-R Act;
(vi) The agreements and instruments of conveyance, transfer and
assignment executed and delivered by CRSS or any CRSS Subsidiary to Jacobs
under this Agreement at the Closing are duly and properly authorized,
executed and delivered and are binding and effective in accordance with
their terms except insofar as enforcement thereof may be limited by
bankruptcy, insolvency and other laws of general application affecting the
enforcement of creditors' rights and except as equitable remedies may not be
available in certain circumstances; and
(vii) Except as may be set forth in Exhibit 3.18 to this
Agreement, such counsel does not know of any suit, action, arbitration, or
legal, administrative, or other proceeding or governmental investigation
pending against any of the Corporations.
In rendering their opinions, such counsel may rely on certificates of
governmental authorities and as to factual matters on the representations and
warranties of CRSS contained herein, certificates of officers of CRSS and on
opinions of associate counsel satisfactory to Jacobs, which may include Frank
Perrone, general counsel of CRSS. The phrases "to such counsel's knowledge",
"counsel's attention", "such counsel does not know", or phrases of similar
import are intended to signify that during the course of such counsel's
representation of the CRSS Companies and without independent investigation,
counsel has no knowledge of facts contrary to the opinion given. Such opinion
may contain assumptions, limitations and exclusions customarily included in
opinions of this kind.
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8.6 Corporate Approvals. The execution and delivery of this Agreement
by CRSS and the performance of this Agreement shall have been duly authorized by
all necessary corporate action of CRSS and the CRSS Subsidiaries, and Jacobs
shall have received copies of all resolutions pertaining to that authorization,
certified by the secretary of each of such corporations.
8.7 Consents. Jacobs shall have been reasonably satisfied with the
extent to which the necessary agreements and consents to the consummation of the
transactions contemplated by this Agreement, or otherwise pertaining to the
matters covered by it, shall have been obtained by the appropriate CRSS Company
and delivered to Jacobs.
8.8 Deadline. The Closing of the transaction contemplated by this
Agreement shall have taken place on or before July 31, 1994.
8.9 Form and Substance of Documents. The form and substance of all
certificates, instruments, opinions and other documents delivered to Jacobs
under this Agreement shall be reasonably satisfactory to Jacobs and its counsel.
8.10 [Intentionally Omitted.]
8.11 Financial Condition. Jacobs shall have received from Ernst &
Young, a letter, prepared at Jacobs' expense, dated the Closing Date and
addressed to the Board of Directors of Jacobs, stating that on the basis of the
results of certain agreed-upon procedures (not constituting an audit) performed
on the latest available accounting records of the Corporations, which will
include consultations with officers of the CRSS Companies responsible for
financial and accounting matters and other pertinent inquiries that such
accountants may deem necessary, such accountants have no reason to believe that
during the period from March 31, 1994 to a specified date not more than five
business days before the Closing Date there was any change in the financial
condition or results of operations of the respective Corporations except for
changes that have occurred in the ordinary and usual course of their respective
businesses during that period.
8.12 Covenant not to Compete. Jacobs and CRSS shall have executed and
delivered an Agreement in the form of Annex III, which is attached hereto and
hereby made a part hereof, pursuant to which CRSS shall agree for itself and the
CRSS Subsidiaries that they will not, for a period of five years from the
Closing Date, engage in the lines of business in the respective geographical
areas in which the Business to be Acquired engaged at any time within five years
prior to the
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Closing Date, except that CRSS and any CRSS Subsidiary shall not be prohibited
from providing design, engineering, construction management or other services as
owner's engineer to CRSS, any Affiliate of CRSS or any other entity in which
CRSS has a direct or indirect ownership interest of at least 15%.
8.13 Confidentiality Agreements. All confidentiality agreements
entered into by CRSS with potential buyers of the Business to be Acquired shall
have been assigned to Jacobs, and CRSS shall have requested that all
confidential material furnished by CRSS to such potential buyers be returned to
CRSS or destroyed.
ARTICLE NINE: CONDITIONS PRECEDENT TO PERFORMANCE BY CRSS
The obligations of CRSS to consummate the transactions contemplated by
this Agreement are subject to the satisfaction on the Closing Date of all the
following conditions:
9.1 Warranties and Representations. All representations and warranties
by Jacobs contained in this Agreement or in any written statement delivered by
Jacobs under this Agreement shall be true on and as of the Closing Date as
though such representations and warranties were made on and as of that date.
9.2 Covenants. Jacobs shall have performed and complied with all
covenants and agreements required by this Agreement to be performed or complied
with by it on or before the Closing Date.
9.3 Officers' Certificates. Each of the Corporations shall have
received a certificate, dated the Closing Date, signed by the president or any
vice president and the chief financial officer of Jacobs, respectively,
certifying that the conditions specified in paragraphs 9.1, 9.2 and 9.6 have
been fulfilled.
9.4 Opinion of Counsel. Jacobs shall have furnished each Corporation
with an opinion, dated the Closing Date, of Barton, Klugman & Oetting, counsel
for Jacobs, in form and substance satisfactory to CRSS and its counsel, to the
effect that:
(i) Jacobs is a corporation duly incorporated, existing, and in
good standing under the laws of the State of Delaware and has all requisite
corporate power to perform its obligations under this Agreement;
(ii) Jacobs has full power and authority to make, execute,
perform and deliver this Agreement, and all corporate proceedings required
by law or by the provisions
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of this Agreement to be taken by Jacobs on or before the Closing Date in
connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement have been
duly and validly taken;
(iii) Every consent, approval, authorization, or order of any
court or governmental agency or body that is required for the execution and
delivery of this Agreement, or the consummation by Jacobs of the
transactions contemplated by this Agreement has been obtained and will be in
effect on the Closing Date;
(iv) The execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement will not
violate or contravene any of the provisions of any charter, bylaws or
resolution of Jacobs or of any indenture, agreement, judgment or order to
which Jacobs is a party or by which Jacobs is bound; and
(v) This Agreement and the agreements and instruments of
assumption, conveyance, transfer and assignment executed and delivered by
Jacobs to the CRSS Companies under this Agreement at the Closing are duly
and properly authorized, executed and delivered and are binding and
effective in accordance with their terms except insofar as enforcement
thereof may be limited by bankruptcy, insolvency and other laws of general
application affecting the enforcement of creditors' rights and except as
equitable remedies may not be available in certain circumstances.
In rendering their opinions, counsel for Jacobs may rely on certificates of
governmental authorities and on opinions of associate counsel reasonably
acceptable to CRSS.
9.5 Deadline. The Closing of the transaction contemplated by this
Agreement shall have taken place on or before July 31, 1994.
9.6 Corporate Approvals. The execution and delivery of this Agreement
by Jacobs, and the performance of its covenants and obligations under it, shall
have been duly authorized by all necessary corporate action, and CRSS shall have
received copies of all resolutions pertaining to that authorization, certified
by the secretary of Jacobs.
9.7 Satisfaction of CRSS. The form and substance of all certificates,
instruments, opinions and other documents delivered to CRSS under this Agreement
shall be satisfactory in all reasonable respects to CRSS and its counsel.
ARTICLE TEN: THE CLOSING
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10.1 Deliveries by the Corporations. At the Closing CRSS shall deliver
or cause to be delivered to Jacobs:
(i) The documents referred to in Article Eight hereof or evidence
reasonably satisfactory to Jacobs and its counsel that each condition
referred to therein has been satisfied;
(ii) The Bill of Sale of CRSS on behalf of itself and its
Affiliates in the form set forth in Annex I to this Agreement;
(iii) Certificates evidencing all of the issued and outstanding
stock of Constructors, International, and New York duly endorsed for
transfer to Jacobs, which shall transfer good title to such stock to Jacobs;
(iv) The resignations of all of the officers and directors of
Constructors, International and New York and resignations of all persons who
will become employees of Jacobs or a Subsidiary of Jacobs at Closing from
all such positions as they may hold as officers or directors of CRSS or any
of its Affiliates;
(v) The stock books, stock ledgers, minute books and corporate
seals of Constructors, International, and New York;
(vi) Subject to Section 11.4, Assignments to Jacobs of all
Leases, Personal Property Leases and Ancillary Contracts (other than Leases,
Personal Property Leases and Ancillary Contracts to which Constructors,
International or New York are party) properly executed and acknowledged by
the CRSS Affiliate that is a party thereto and accompanied by all consents
of all other parties thereto whose consents to assign have been obtained as
of the Closing Date;
(vii) Subject to Section 11.4, Assignments to Jacobs of all
Assumed Contracts properly executed and acknowledged by the CRSS Affiliate
that is a party thereto, accompanied by all consents to such assignment of
the other party or parties that have been obtained as of the Closing Date to
each Assumed Contract requiring such consent;
(viii) A Service Mark License Agreement in the form attached
hereto as Annex IV;
(ix) All consents to changes in ownership required by any
Contracts to which Constructors, International or New York are party that
have been obtained as of the Closing Date; and
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[Pages 46 through 97 have been left blank and are omitted; the text of
the Purchase Agreement continues on page 98.]
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(x) All such other documents, instruments and writings required
to be delivered by any of the CRSS Companies pursuant to this Agreement,
reasonably required to convey to Jacobs good and indefeasible title to the
Business to be Acquired or otherwise required in connection herewith.
Each of the CRSS Companies shall, at or after the
Closing Date, execute, acknowledge and deliver any further deeds, assignments,
conveyances and other assurances, documents and instruments of transfer
reasonably requested by Jacobs and shall take any other action consistent with
the terms of this Agreement that may be reasonably requested by Jacobs for the
purpose of assigning, transferring, granting, conveying and confirming to
Jacobs, or reducing to Jacobs' possession, any or all of the Business to be
Acquired.
10.2 Deliveries by Jacobs. At the Closing Jacobs shall deliver or
cause to be delivered to CRSS, the following:
(i) The amount equal to the Preliminary Net Asset Value (as
determined in accordance with Section 2.2(i)), plus $14,000,000.00, payable
in immediately available funds;
(ii) The documents referred to in Article Nine hereof or evidence
reasonably satisfactory to counsel for CRSS that each condition referred to
therein has been satisfied;
(iii) The assumption by Jacobs or a Jacobs Subsidiary by its
execution and delivery to CRSS and its Subsidiaries of an Assumption
Agreement in the form of Annex II attached hereto of all of the rights and
obligations of CRSS and its Subsidiaries under the Assumed Contracts, the
Leases, Personal Property Leases and Ancillary Contracts to which CRSS or
any of its Subsidiaries is a party or that are to be assigned to Jacobs
pursuant to Section 10.1, and all the liabilities and obligations of the
Business to be Acquired other than the Retained Liabilities.
(iv) The Service Mark License Agreement attached hereto as Annex
IV;
(v) Appropriate instruments of transfer to convey the Retained
Assets to CRSS; and
(vi) All other documents, instruments and writings required to be
delivered by Jacobs to CRSS pursuant to this Agreement or otherwise required
in connection herewith.
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Jacobs shall, at or after the Closing Date, execute, acknowledge and
deliver any further assignments, conveyances and other assurances, documents and
instruments reasonably requested by CRSS and shall take any other action
consistent with the terms of this Agreement that may be reasonably requested by
CRSS for the purpose of carrying out the intent and purpose of this Agreement.
10.3 Other Deliveries at Closing. The parties shall deliver the
contracts, documents and instruments required to be delivered at Closing by
Article Seven hereof.
10.4 Concurrent Deliveries. All documents and instruments to be
delivered at the Closing shall be regarded as having been delivered
concurrently, and no document or instrument shall be regarded as having been
delivered until all have been delivered.
ARTICLE ELEVEN: OBLIGATIONS OF THE PARTIES AFTER CLOSING
The provisions of this Article Eleven shall apply from and after the
Closing Date:
11.1 Adjustments for At Risk Contracts.
(i) Jacobs has designated certain contracts to which the
Corporations are party as "At Risk Contracts". The At Risk Contracts are
listed on Annex VI, which is attached hereto and hereby made a part hereof.
Notwithstanding anything to the contrary in this Agreement, this Section
11.1 shall provide the sole and exclusive remedy of the parties for any
matter that affects Margin Improvement or Margin Deterioration; to the
extent that a claim of a third party results in Liabilities that do not
affect Margin Improvement or Margin Deterioration, such Liabilities shall be
subject to indemnification under Article Twelve to the extent provided
therein.
(ii) Jacobs and CRSS shall share the risk of any "Margin
Improvement" or "Margin Deterioration" in the At Risk Contracts as
hereinafter set forth.
(iii) For the purpose of this Section 11.1:
(a) "Margin Improvement" shall mean any increase in the
gross margin of a project at final completion over the sum of the
gross margin recognized for such project in the Closing Date
Consolidating Balance Sheet plus the Closing Date Future Gross Margin
for such project; and
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(b) "Margin Deterioration" shall mean any reduction in the
gross margin (including negative gross margin) of a project at final
completion over the sum of the gross margin recognized for such
project in the Closing Date Consolidating Balance Sheet plus the
Closing Date Future Gross Margin for such project.
(c) For purposes of this Section, gross margin shall be
determined in a manner consistent with CRSS' past practice.
(iv) The Margin Improvement and Margin Deterioration on each At
Risk Contract shall be added, or subtracted, as appropriate, to obtain the
Aggregate Margin Improvement or Deterioration, as the case may be.
(v) (a) Jacobs shall bear the risk of the first $1,000,000 of
Aggregate Margin Deterioration; Jacobs and CRSS shall each bear 50% of the
Aggregate Margin Deterioration in excess of $1,000,000 up to $4,000,000, and
CRSS shall bear all of the risk of any Aggregate Margin Deterioration in
excess of $4,000,000.
(b) Jacobs shall receive the full benefit of the first
$1,000,000 of Aggregate Margin Improvement; Jacobs and CRSS shall each
receive 50% of the benefit of the Aggregate Margin Improvement in
excess of $1,000,000 up to $4,000,000, and CRSS shall receive all of
the benefit of Aggregate Margin Improvement in excess of $4,000,000.
(vi) Jacobs and CRSS shall account to each other on each
anniversary of the Closing Date with respect to the Aggregate Margin
Improvement or Deterioration on all At Risk Contracts, and the Party
determined to owe the other party with respect thereto shall pay the amount
owed within 30 days thereafter.
(vii) In managing the At Risk Contracts after Closing, Jacobs
shall manage the At Risk Contracts in a good, workmanlike and timely manner
in accordance with the terms and conditions of such At Risk Contracts, and
in accordance with prudent practice and industry standards. After the
Closing, Jacobs shall use commercially reasonable efforts to keep the
project management and completion bonuses on each At Risk Contract in place
until completion, but Jacobs may, in its reasonable discretion, change or
alter any or all of such project management if such changes or alterations
are made in good faith and would not reasonably be expected to materially
and adversely affect the gross margin on the At Risk Contract.
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(viii) Annex VI, which is attached hereto and hereby made a part
hereof, contains a schedule of the forecasts of future gross margins on each
of the At Risk Contracts as reflected on the Profit Plan per the Project
Planning System or the Project Briefing Cost Summary Report (such report or
plan being referred to as a "Profit Plan") for each At Risk Contract as of
June 30, 1994. Contemporaneous with the delivery to Jacobs of the Closing
Date Consolidating Balance Sheet, CRSS shall deliver to Jacobs a schedule of
the forecast of future gross margin on each of the At Risk Contracts as of
the Closing Date (the "Closing Date Future Gross Margin"), which Closing
Date Future Gross Margins shall be prepared consistent with the Closing Date
Consolidating Balance Sheet.
(ix) Jacobs will provide CRSS on a quarterly basis a report on
the status of each At Risk Contract indicating the Margin Improvement and
Margin Deterioration, as well as the gross margin then recognized for each
At Risk Contract and the forecast of future gross margin with respect to
each At Risk Contract. CRSS and its representatives may examine at their
sole cost and expense Jacobs' records with respect to the At Risk Contracts
pursuant to Section 11.7 and may confer with the Project Manager assigned to
such project at any time, including without limitation if CRSS disputes
Jacobs' accounting for any At Risk Contract.
(x) The parties agree that if the AMD Contract referred on Annex
V is ultimately determined not to be guaranteed maximum price contract as of
the Closing Date, it will not be treated as an At Risk Contract under this
Agreement. Jacobs agrees that it will not enter into any oral or written
amendment, modification, restatement or other evidence of the AMD Contract
without the prior written consent of CRSS.
11.2 Trade Names. After the Closing Date Jacobs shall have the
exclusive right, as between Jacobs and CRSS, to use the trade names and
logotypes listed on Annex VII hereto, which is attached hereto and hereby made a
part hereof, and neither CRSS nor any CRSS Subsidiary shall employ the same,
directly or indirectly, as a trade name, service mark, trademark or business or
corporate name and shall cause the CRSS Subsidiaries using the same, including
without limiting the generality of the foregoing, Engineers, to change their
corporate and trade names to names not using such trade names and to cease using
such logotypes. After the Closing, and solely in connection with the Business to
be Acquired, as Jacobs may hereafter expand the same, Jacobs shall have the non-
exclusive right and license to use the CRSS logotype and service mark consisting
of the letters "CRSS" in a block in close proximity to the Jacobs name or
service mark, and shall
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have the right to use all existing stationery, brochures or other papers bearing
the CRSS service mark, subject to the reasonable requirements of CRSS, until the
earlier of July 31, 1995 or the date on which supplies thereof are exhausted.
CRSS expressly disclaims any warranty that it has the right to grant exclusive
rights to any of the foregoing trade names, logotypes or service mark.
11.3 Confidential Information.
(i) CRSS shall not, and shall cause the CRSS Subsidiaries not to,
divulge, communicate, or use to the detriment of Jacobs or for the benefit
of any other Person or Persons, or misuse in any way, any confidential
information or trade secrets of any of the Corporations including personnel
information, secret processes, know-how, customer lists, receipts, formulas
or other Intellectual Property.
(ii) Jacobs shall not, and shall cause its Subsidiaries not to,
divulge, communicate, or use to the detriment of CRSS or its Subsidiaries or
for the benefit of any other Person or Persons, or misuse in any way, any
confidential information or trade secrets of CRSS or its Subsidiaries not
relating to the Business to be Acquired that it shall have learned in the
course of its investigation of the Business to be Acquired, including
personnel information, secret processes, know-how, customer lists, receipts,
formulas or other Intellectual Property.
11.4 Performance of Certain Contracts After Closing.
(i) With respect to Contracts that cannot by their terms be
assigned or for which consent to assignment has not been obtained or the
performance of which requires Jacobs to obtain professional licenses that
will not be obtained for some time after the Closing, Jacobs and the CRSS
Companies agree that until such consents or licenses are obtained or such
contracts are completed:
(a) Such Contracts shall be performed in the name of the
Affiliate of CRSS that is a party thereto (the "Corporate Party") at
the expense of and under the direction, and by the employees, of
Jacobs.
(b) Jacobs shall on behalf of the Corporate Party continue
to conduct all dealings with the other contracting parties in the name
of the Corporate Party, shall issue all billings in the name of the
Corporate Party and shall collect all payments.
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(c) Jacobs shall furnish all such personnel, equipment and
facilities as may be required to complete such Contracts and shall
reimburse the Corporate Party for its reasonable expenses in carrying
out its obligations thereunder and shall indemnify the Corporate Party
with respect thereto in the manner and to the extent provided in
Section 12.2.
(d) Each party shall account to the other party with
respect to such contracts promptly on an ongoing basis during the
performance of the contract.
(e) This Agreement shall not constitute an agreement to
assign any such Contracts, and such Contracts shall not be assigned to
Jacobs until all such consents and/or licenses are obtained.
(f) Amendments of, or expansion of services relating to,
any of such Contracts on or after the date hereof will be entered into
by, and be the total responsibility of, Jacobs.
(g) CRSS and Jacobs shall execute any and all additional
documents and take additional measures reasonably required by each
other further to effectuate the foregoing.
(ii) For any work that needs to be performed on any Completed
Contract after the Closing Date, Jacobs shall provide to CRSS the necessary
resources for CRSS to perform such work in accordance with Annex VI
(Services Agreement) attached hereto.
11.5 Hiring of Employees of the Corporations.
(i) Effective immediately after Closing all persons who are
employees of the Asset Corporations at the time of Closing (other than Steve
Williams) shall be deemed to have been terminated by CRSS and its
Subsidiaries. Effective immediately after Closing all persons who are
employed by an Asset Corporation (other than Steve Williams) shall be hired
by Jacobs or a subsidiary of Jacobs, and Jacobs shall be deemed to have
hired the employees of the Stock Corporations. To the extent permitted under
all benefit plans and policies of Jacobs, any eligibility waiting periods
imposed by such plans and policies shall be deemed to have been waived, and
such employees shall receive credit for their service with CRSS and the CRSS
Subsidiaries by which they were employed for the purpose of determining any
participation and/or vesting rights under such plans and policies including
any severance and vacation plans.
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(ii) For a period of two years following Closing neither CRSS nor
any of its Affiliates shall directly or indirectly solicit any former
employee of a Corporation who is an employee of Jacobs to terminate his or
her employment with Jacobs.
11.6 Certified Financial Statements of the Corporations. CRSS shall,
at the sole cost and expense of Jacobs, deliver to Jacobs within 45 days after
Closing balance sheets of the Business to be Acquired at June 30, 1994 and 1993,
together with the related statements of income, cash flows and shareholders'
equity of the Business to be Acquired for each of the two fiscal years then
ended, together with the related notes thereto, certified without qualification
by Ernst & Young, independent public accountants.
11.7 Maintenance of Books and Records. CRSS and the CRSS Subsidiaries
(and their respective successors and assigns) and Jacobs and its Affiliates
shall preserve until the tenth anniversary of the Closing Date all records
possessed or to be possessed by such party relating to the Business to be
Acquired, the Corporations, and, without limiting the generality of the
foregoing, the Assumed Contracts and the Continuing Contracts. After the Closing
Date, where there is a legitimate purpose, such party shall provide the other
parties with access, upon prior reasonable written request specifying the need
therefor, during regular business hours, to (i) the officers and employees of
such party and (ii) the books of account and records of such party, but, in each
case, only to the extent relating to the Business to be Acquired, including the
Assumed Contracts and the Continuing Contracts, and the other parties and their
representatives shall have the right to make copies of such books and records;
provided, however, that the foregoing right of access shall not be exercisable
in such a manner as to interfere unreasonably with the normal operations and
business of such party; and further, provided, that, as to so much of such
information as constitutes trade secrets or confidential business information of
such party, the requesting party and its officers, directors and representatives
will use due care to not disclose such information except (i) as required by
law, (ii) with the prior written consent of such party, which consent shall not
be unreasonably withheld, or (iii) where such information becomes available to
the public generally, or becomes generally known to competitors of such party,
through sources other than the requesting party, its affiliates or its officers,
directors or representatives. Such records may nevertheless be destroyed by a
party if such party sends to the other parties written notice of its intent to
destroy records, specifying with particularity the contents of the records to be
destroyed. Such records may then be destroyed after the 30th day after such
notice is given unless another party objects to the destruction in which case
the party
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seeking to destroy the records shall deliver such records to the objecting
party.
11.8 Payments Received.
(i) CRSS and Jacobs each agree that after the Closing each of
them shall hold and will promptly transfer and deliver to the other, from
time to time as and when received, any cash, checks with appropriate
endorsements (using their best efforts not to convert such checks into
cash), or other property that they or their Subsidiaries may receive on or
after the Closing that properly belongs to the other party, and will account
to the other for all such receipts. From and after the Closing, Jacobs shall
have the right and authority to endorse without recourse the name of the
named payee on any check or any other evidences of indebtedness received by
Jacobs on account of the business and the assets transferred to Jacobs
hereunder.
(ii) Any payments made by Jacobs that are not payments or
obligations of the Business to be Acquired shall be reimbursed by CRSS to
Jacobs upon presentation of documentation.
(iii) Any payments made by CRSS that are payments or obligations
of the Business to be Acquired shall be reimbursed by Jacobs to CRSS upon
presentation of documentation.
11.9 Further Assurances of CRSS. In order to carry out the
conveyances, transfers and assignments contemplated by this Agreement, CRSS
shall execute and deliver to Jacobs on the Closing Date all such deeds, bills of
sale, assignments and other documents and instruments of conveyance, transfer or
assignment as shall be necessary or appropriate to vest in or confirm to Jacobs
good, valid and indefeasible title, free of any liens or encumbrances other than
those listed in Exhibit 3.13, to all of the properties, assets, good will and
business comprising the Business to be Acquired, transferred and assigned to
Jacobs under this Agreement, all of which documents shall be in form and
substance reasonably satisfactory to Jacobs and its legal counsel. Subsequent to
the Closing Date CRSS shall and shall cause the CRSS Subsidiaries to use
commercially reasonable efforts (not involving the payment of consideration) to
obtain such consents, subject to the obligations of the Parties pursuant to
Section 11.4 hereof, as may be reasonably necessary or appropriate in order to
vest in and confirm to Jacobs good, valid and indefeasible title to, and the
right to use, free of any liens or encumbrances, except for liens and
encumbrances described in Section 3.13, the properties, assets, goodwill and
business of the Corporations herein comprising the Business to be
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Acquired and the Contracts to be assigned to Jacobs pursuant to this Agreement.
11.10 Further Assurances of Jacobs.
(i) Jacobs shall use commercially reasonable efforts to assist
CRSS in obtaining all consents required to the assignment of any Contracts
to be assigned to Jacobs hereunder and consents to changes of ownership with
respect to contracts held by the Stock Corporations.
(ii) Promptly following the Closing and in any event within 30
days thereafter, Jacobs shall commence commercially reasonable efforts to
obtain the release of CRSS and the CRSS Subsidiaries from any bonds, letters
of credit and guarantees pertaining to any Assumed Contracts or Continuing
Contracts and from any guaranties of any Assumed Contracts, Continuing
Contracts, Leases, Personal Property Leases, and Ancillary Contracts (the
"Existing Bonds, Letters of Credit and Guarantees"), including obtaining or
providing replacement bonds, letters of credit and guarantees in Jacobs' own
name.
11.11 Insurance Coverage. CRSS shall arrange to have the casualty,
professional errors and omissions and directors' and officers' liability
insurance policies listed on Exhibit 3.14 provide coverage to CRSS for all
occurrences prior to Closing for which claims are made on or before June 30,
1995. CRSS shall also seek to have Jacobs, its subsidiaries and their successors
named as additional insureds, provided that the issuers of such policies agree
to such an endorsement and such endorsement can be obtained by CRSS at no more
than nominal additional cost. If the cost of such coverage of Jacobs is more
than a nominal amount, then Jacobs may elect to pay for such coverage, in which
event CRSS shall procure such coverage at Jacobs' cost. CRSS shall promptly
furnish Jacobs evidence of such coverage when it is obtained.
11.12 Liabilities Not to be Assumed by Jacobs.
Except as otherwise provided in this Agreement, Jacobs shall not
assume the Liabilities and obligations of CRSS or its Affiliates or their
predecessors in interest listed below (the "Retained Liabilities"), all of which
Retained Liabilities shall be and continue to be the liabilities and obligations
of CRSS and its Affiliates after the Closing Date:
(i) Liabilities of CRSS and its Subsidiaries, if any, arising out
of the transactions contemplated by this Agreement or incurred in respect of
any transaction occurring after the Closing Date or attributable to the
transfer of stock and assets hereunder, the liquidation and
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dissolution of Engineers or any other Subsidiary of CRSS or the
distribution of its assets to its or their shareholders;
(ii) Liabilities, if any, including attorneys' fees and other
expenses incurred by CRSS or any of its Affiliates in connection therewith,
on account of any lawsuit, action, arbitration or legal, administrative or
other proceeding or governmental investigation to which any one or more of
them is a party on or before the Closing Date;
(iii) Liabilities or obligations of CRSS or any of its Affiliates
with respect to any employment contracts (to the extent not reflected on the
Closing Date Consolidating Balance Sheet), employee benefit plans (including
vacation plans, to the extent not accrued on the Closing Date Consolidating
Balance Sheet), employee stock purchase plans, employee stock options, or
other contracts or undertakings with or for the benefit of the employees of
CRSS or any of its Affiliates; and
(iv) Without limiting any mitigation obligation of Jacobs under
Section 12.1 hereof, any Liability or obligation that may arise, result
from, or relate to the following:
(a) Any Completed Contract or Power Plant Contract;
(b) Any Liabilities associated with the Retained Assets;
(c) Claims for injury to or death of any Person or damage to
property relating to the business, operations or assets of CRSS or any
Affiliate of CRSS or any subcontractor or supplier, regardless of
tier, of any of them (including employee claims) to the extent the
proximate cause was an act or omission that shall have occurred prior
to Closing;
(d) Warranty claims, and claims for failure to perform
warranty claims, for negligence in the performance of or misfeasance
in the performance of any contract or undertaking of CRSS, any
Affiliate of CRSS or any subcontractor or supplier, regardless of
tier, or any of them, the proximate cause of which was acts or
omissions that shall have occurred prior to Closing;
(e) The termination of employment by CRSS or any of its
Affiliates of any employee prior to or at Closing, whether or not such
employee is hired by Jacobs, including but not limited to claims
arising on
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or prior to the Closing Date for breach of any employment contract,
accrued vacation, pension or other retirement benefits, wages, and
medical, life insurance or disability benefit, except to the extent
accrued on the Closing Date Consolidating Balance Sheet and including
obligations to Dave Bassett under his employment agreement;
(f) Claims under the Equal Employment Opportunity Act, the
Fair Labor Standards Act, the Americans with Disabilities Act, the Age
Discrimination in Employment Act, as amended, the Worker Adjustment
and Retraining Notification Act, ERISA, the Davis Bacon Act, the
Miller Act, the Service Contract Act, or other like federal and state
legislation against CRSS or any of its Affiliates to the extent
proximately caused by acts or omissions that occurred prior to
Closing;
(g) Any claim for any federal, state or local taxes of any
sort or kind, not accrued in the Closing Date Consolidating Balance
Sheet arising from the business, property, assets or operations of
CRSS or any of its Affiliates or from their performance of this
Agreement;
(h) Any claims related to the withdrawal of CRSS or any of
its Affiliates from any employee stock purchase, pension, profit-
sharing or other employee benefit plan maintained by them or any of
them or by any union, provided that such claims arise from acts,
omissions or transactions occurring prior to or at Closing or as a
result of this Agreement; and
(i) Any Liability or penalty imposed by the federal or any
state or local governmental body related to a Customer Contract with
such body and proximately caused by acts or omissions that shall have
occurred prior to Closing.
ARTICLE TWELVE: INDEMNIFICATION
12.1 General Indemnification Obligation of CRSS. From and after the
Closing, CRSS shall defend, indemnify and hold harmless Jacobs and its
Affiliates, successors and assigns (each of whom is referred to as an
"Indemnified Jacobs Party") against and in respect of:
(i) Any and all Liabilities, asserted by any Person other than
CRSS and its Affiliates or Jacobs and its Affiliates arising from any acts,
errors or omissions of CRSS or any of its Affiliates on or before the
Closing Date
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in connection with (a) the Completed Contracts regardless of when
performed, and (b) any portion of any of the Assumed Contracts and the
Continuing Contracts performed by CRSS or any of its Affiliates prior to
Closing (a "Third Party Claim"), whether such Third Party Claim is made
against a CRSS Company, Jacobs, a Corporation, the Business to be Acquired
or any Affiliate or subsidiary of any of the foregoing; provided, however,
that with respect to any Assumed Contract or Continuing Contract the
obligation of CRSS shall apply only to the extent that the actions of CRSS
or one of its Affiliates on or before the Closing Date are shown to be the
proximate cause of such Third Party Claim. With respect to the Assumed
Contracts and the Continuing Contracts, if Jacobs becomes aware of any Third
Party Claim or any facts that would in the ordinary course of events
constitute the basis for a Third Party Claim, then Jacobs shall take such
reasonable action to mitigate such Third Party Claim as is in accordance
with good professional and business practice, and, to the extent that
actions beyond normal mitigation are necessary Jacobs shall give CRSS notice
of such Third Party Claim and provide CRSS reasonable cooperation in
reducing the exposure of CRSS to such Third Party Claim. Notwithstanding any
other provision hereof, this Section 12.1(i) describes all of the
indemnification obligations of CRSS under this Agreement with respect to
Third Party Claims relating to Assumed Contracts and Continuing Contracts
and specifically such indemnification obligations shall not be limited or
expanded by any representations, warranties or covenants herein.
(ii) Any and all Litigation listed in Exhibit 3.18;
(iii) any and all Retained Liabilities;
(iv) any misrepresentation or breach of warranty or
nonfulfillment of any agreement or covenant on the part of CRSS under this
Agreement; and
(v) any claims of CRSS or any of its Affiliates against any
Corporation.
In determining the total dollar amount of all claims for which the Indemnified
Jacobs Parties are entitled to receive reimbursement pursuant to this Section
12.1 there shall be excluded any claims of $100,000.00, or less, for which
Jacobs would otherwise be entitled to reimbursement, but this limit shall not
exceed a total of $500,000.00 for all such claims.
12.2 General Indemnification Obligation of Jacobs. From and after the
Closing, Jacobs shall defend, indemnify and hold harmless CRSS and the CRSS
Subsidiaries and their successors
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and assigns (an "Indemnified CRSS Party") against and in respect of any and
all Liabilities incurred or suffered by any Indemnified CRSS Party that
result from, relate to or arise out of:
(i) any and all Liabilities and obligations of the Business to be
Acquired other than the Retained Liabilities;
(ii) any misrepresentation, breach of warranty or non-fulfillment
of any agreement or covenant on the part of Jacobs under this Agreement;
(iii) any acts, errors or omissions of Jacobs or any Affiliate or
subsidiary of Jacobs after the Closing Date, whether made against CRSS,
Jacobs, the Business to be Acquired or any Affiliate or subsidiary of any of
the foregoing ; provided, however, that, with regard to any Assumed Contract
or Continuing Contract, the obligations of Jacobs will apply only to the
extent that the actions of Jacobs after the Closing Date are shown to be the
proximate cause of such claims; and
(iv) any Liability under the Existing Bonds, Letters of Credit
and Guarantees to the extent Jacobs has the obligation to indemnify the
Indemnified CRSS Party pursuant to Section 12.2 hereof with respect to the
underlying obligation; and
(v) any claim of any Corporation against CRSS or any of its
Affiliates.
12.3 Method of Asserting Claims, Etc.
(i) In the event that any claim or demand for which CRSS would be
liable to an Indemnified Jacobs Party hereunder is asserted against or
sought to be collected from an Indemnified Jacobs Party by a third party,
the Indemnified Jacobs Party shall promptly notify CRSS of such claim or
demand, specifying the nature of such claim or demand and the amount or the
estimated amount thereof to the extent then feasible (which estimate shall
not be conclusive of the final amount of such claim and demand) (the "Claim
Notice"). CRSS shall have ten days from the personal delivery or mailing of
the Claim Notice (the "Notice Period") to notify the Indemnified Jacobs
Party, (A) whether or not it disputes its liability to the Indemnified
Jacobs Party hereunder with respect to such claim or demand and (B)
notwithstanding any such dispute, whether or not CRSS desires, at its sole
cost and expense, to defend the Indemnified Jacobs Party against such claim
or demand. If CRSS does not respond to such notice within the Notice
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Period, then CRSS shall be deemed to have disputed its liability.
(ii) If CRSS disputes its liability with respect to such claim or
demand or the amount thereof (whether or not CRSS desires to defend the
Indemnified Jacobs Party against such claim or demand), such claim or demand
shall not be settled without the prior written consent of the Indemnified
Jacobs Party which consent shall not be unreasonably withheld.
(iii) In the event that CRSS notifies the Indemnified Jacobs
Parties within the Notice Period that it desires to defend the Indemnified
Jacobs Party against such claim or demand, then, except as hereinafter
provided, CRSS shall have the right to defend the Indemnified Party by
appropriate proceedings; provided, however, that CRSS shall not, without the
prior written consent of the Indemnified Jacobs Party, which consent shall
not be unreasonably withheld, consent to the entry of any judgment against
the Indemnified Jacobs Party or enter into any settlement or compromise that
does not include, as an unconditional term thereof, the giving by the
claimant or plaintiff to the Indemnified Jacobs Party of a release, in form
and substance satisfactory to the Indemnified Jacobs Party, as the case may
be, from all liability in respect of such claim or litigation. If any
Indemnified Jacobs Party desires to participate in, but not control, any
such defense or settlement, it may do so at its sole cost and expense.
(iv) If any material claim for which CRSS has accepted the duty
of indemnifying an Indemnified Jacobs Party involves a Person that is or was
during the three years immediately preceding the Closing Date a customer of
the Business to be Acquired (a "Customer"), then CRSS shall not, without
first consulting with the Indemnified Jacobs Party, institute any lawsuit or
other legal proceeding against any such Customer.
In addition, and without prejudice to the foregoing, CRSS shall,
in the case of claims by a Customer against CRSS or any of its Affiliates,
permit Jacobs to have the sole right to control the defense or settlement of
such claim (including the sole right to settle or otherwise terminate the
proceedings) in exchange for Jacobs' agreement to indemnify CRSS and its
Affiliates as to such claim in such manner as CRSS may reasonably require.
In case of a claim by CRSS or any of its Affiliates against a
Customer, CRSS shall assign such claim to Jacobs, if Jacobs so requests, in
return for the payment
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by Jacobs to CRSS of the amount of the claim as reasonably determined by
CRSS.
(v) In the event an Indemnified Jacobs Party shall have a claim
against CRSS hereunder that does not involve a claim or demand being
asserted against or sought to be collected from it by a third party, the
Indemnified Jacobs Party shall promptly send a Claim Notice with respect to
such claim to CRSS. The foregoing shall not serve to create any Liability or
obligation of CRSS to provide indemnity to an Indemnified Jacob Party except
as expressly provided in Section 12.1.
(vi) All claims for indemnification by an Indemnified CRSS Party
under this Agreement shall be asserted and resolved under the procedures set
forth in this Section 12.3 by substituting in the appropriate place
"Indemnified CRSS Party" for "Indemnified Jacobs Party" and variations
thereof and "Jacobs" for "CRSS".
(vii) In addition to the notice requirements of Section 12.3(i),
Jacobs shall use its best efforts to notify CRSS of any circumstances from
which a Third Party Claim may reasonably be expected to arise with respect
to which Jacobs puts its insurance carrier on notice of such circumstances.
12.4 Compensation for Claims.
(i) Upon a final determination of liability under Section 12.3
hereof whether by agreement of the Parties or by a final judgment of a
court, with all possibilities of appeal having been exhausted, the Party
found liable shall pay to the party to whom indemnification is awarded
within ten days after such determination, the amount so awarded.
(ii) Upon the payment in full of any claim, the entity making
payment shall be subrogated to the rights of the Indemnified Party against
any Person with respect to the subject matter of such claim.
12.5 No Waiver of Subrogation. Nothing herein shall be construed as a
waiver of any right of subrogation to which any insurance company may be
entitled under any insurance policy maintained by Jacobs or CRSS. Neither Jacobs
nor CRSS shall be obligated to make any claim against any insurance company
should it elect not to do so. The indemnification set forth in Section 12.1 and
12.2 above shall extend to cases of the indemnitee's concurrent negligence.
12.6 Cooperation of the Parties. Each Party shall give the other Party
its full cooperation in defending all claims by third parties subject to
indemnification hereunder, including
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furnishing witnesses and documentary evidence to the extent available.
12.7 Claims Against Former Corporation Employees. If Jacobs makes any
claim against CRSS or any of its Affiliates with respect to any matter or
occurrence arising prior to the Closing, then CRSS shall not, and shall cause
its Affiliates not to, make any claim against any former officer, director or
employee of any of the CRSS Companies who are employed by Jacobs or any
subsidiary of Jacobs following the Closing with respect to such claim of Jacobs,
notwithstanding that CRSS or any of its Affiliates may have placed reliance upon
any such person before entering into this Agreement, but this Section shall not
apply to claims arising from intentional acts or omissions of such former
officers, directors or employees or counterclaims against such former officers,
directors or employees in litigation brought by them.
12.8 Limitation on Indemnification. CRSS shall not be required to
indemnify the Jacobs Indemnified Party hereunder to the extent of the aggregate
contingency reserves as shown on the Closing Date Consolidating Balance Sheet
or, with respect to Assumed Contracts and Continuing Contracts, the contingency
reserves shown on their respective Profits Plans as of the Closing Date, which
Profit Plans shall be consistent with the Closing Date Consolidating Balance
Sheet, and to the extent of such reserves the Jacobs Indemnified Party shall be
deemed not to have suffered any indemnifiable loss.
12.9 Survival of Representations; Time Limitations. Except for the
representations and warranties contained in Sections 3.8, 3.15 and 3.16(i),
which shall survive until two years after the Closing Date, and except for the
representations and warranties contained in Sections 3.18 or 3.27, which shall
survive until four years after the Closing Date, all representations and
warranties made by any party to this Agreement or pursuant hereto shall survive
the Closing hereunder and any investigation at any time made by or on behalf of
any party hereto for a period of twelve months after the Closing Date. CRSS and
Jacobs shall have no liability under this Article Twelve for misrepresentation
or breach of any representation or warranty unless notice of a claim for
indemnity shall have been given to it within the applicable survival period;
provided, however, that nothing in this Section shall limit the time during
which either party may bring action for indemnification under Sections 12.1 or
12.2, except under Sections 12.1(iv) or 12.2(ii).
12.10 Attorneys' Fees. If any legal action or any arbitration or other
proceeding is brought by either party with respect to this Agreement, or because
of an alleged dispute, breach, default, or misrepresentation in connection with
any of
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the provisions of this Agreement, the court shall award the successful or
prevailing party in addition to any other relief to which it or they may be
entitled, reasonable attorneys' fees and other costs incurred in that action or
proceeding including fees and costs incurred on appeal and in collecting any
judgment, as equitably determined by the court and the court shall so provide in
its judgment.
12.11 Remedies Exclusive. The remedies provided in this Agreement
shall be exclusive and shall preclude the assertion by any party hereto of any
other rights or the seeking of any other remedies against the other party
hereto; provided, that this Section shall not preclude either party from
asserting that it was fraudulently induced by the other party to enter into this
Agreement or from seeking injunctive relief.
ARTICLE THIRTEEN: COSTS
13.1 Brokers' Commissions. Neither Jacobs nor CRSS knows of any Person
who is entitled to claim a commission or finder's fee with respect to the
transactions contemplated by this Agreement except that CRSS will be obligated
to Merrill Lynch Investment Banking Group for such fees. CRSS on the one hand
and Jacobs on the other hand each agree to indemnify and hold harmless the other
against any loss, liability, damage, cost, claim or expense incurred by reason
of any brokerage commission or finder's fee alleged to be payable because of any
act, omission or statement of the indemnifying party.
13.2 Costs and Expenses. Except as otherwise provided herein each of
the parties shall pay all legal and other fees, costs and expenses incurred or
to be incurred by it in negotiating and preparing this Agreement and in closing
and carrying out the transactions contemplated by this Agreement.
ARTICLE FOURTEEN: FORM OF AGREEMENT
14.1 Usage Conventions. The subject headings of the Articles and
Sections of this Agreement are included for purposes of convenience only and
shall not affect the construction or interpretation of any of its provisions;
unless the context otherwise requires, references to the singular include the
plural and vice versa, and references to any gender include all genders.
14.2 Integration.
(i) This Agreement constitutes the entire agreement between the
parties pertaining to the subject matter contained in it and supersedes all
prior and contemporaneous agreements, representations, and understandings of
the parties. No supplement, modification, or amendment of this Agreement
shall be binding unless
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executed in writing by all the parties. No waiver of any of the provisions
of this Agreement shall be deemed, or shall constitute, a waiver of any
other provision, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver shall be binding unless executed in writing by
the party making the waiver.
(ii) The Annexes and Exhibits to this Agreement form part of this
Agreement, take effect as if set out in this Agreement; references to this
Agreement shall include the Annexes and Exhibits.
14.3 Counterparts. This Agreement may be executed simultaneously 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.
14.4 Warranties and Representations. There are no warranties or
representations, expressed or implied, with respect to the Business to be
Acquired or the transactions contemplated hereby except as set forth in this
Agreement.
ARTICLE FIFTEEN: PARTIES
15.1 No Third Party Beneficiaries. Nothing in this Agreement, whether
express or implied, is intended to confer any rights or remedies under or by
reason of this Agreement on any persons other than the parties to it and their
respective successors and assigns, nor is anything in this Agreement intended to
relieve or discharge the obligation or liability of any third persons to any
party to this Agreement, nor shall any provision give any third persons any
right of subrogation or action over or against any party to this Agreement.
15.2 Successors and Assigns. This Agreement shall be binding on and
shall inure to the benefit of the parties to it and their respective heirs,
legal representatives, successors and assigns.
ARTICLE SIXTEEN: GOVERNING LAW
This Agreement shall be governed by, and construed and enforced in
accordance with the laws of the State of Texas, without regard to its choice of
law rules.
ARTICLE SEVENTEEN: NOTICES
Except as otherwise provided herein, all notices and other
communications hereunder shall be in writing and shall be (i) delivered
personally against written receipt or by facsimile transmission, electronically
confirmed, or tested telex, (ii) mailed by registered or certified mail (return
receipt
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requested), postage prepaid, or (iii) sent by nationally recognized overnight
courier service, to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice; provided that notices
of a change of address shall be effective only upon receipt thereof):
(i) if to Jacobs, to
Jacobs Engineering Group Inc.
251 South Lake Avenue
Pasadena, California 91101
Attention: Noel G. Watson
with a copy to
Barton, Klugman & Oetting
333 South Grand Avenue, 37th Floor
Los Angeles, California 90071
Attention: David F. Morgan
(ii) if to CRSS, to
CRSS Inc.
1177 West Loop South, Suite 800
Houston, Texas 77021
Attention: Bruce W. Wilkinson
with a copy to
Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P.
3400 Texas Commerce Tower
Houston, Texas 77002
Attention: Gene G. Lewis
Notices and other communications hereunder shall be deemed given when
received except for any notices or other communications sent by registered or
certified mail which shall be deemed given four (4) days after such notice or
communication was deposited in the U.S. mail.
Any party may change its address for purposes of this paragraph by
giving the other parties written notice of the new address in the manner set
forth above.
ARTICLE EIGHTEEN: CONSENT TO JURISDICTION
(i) CRSS AND JACOBS (WHICH TERMS SHALL INCLUDE FOR THE PURPOSES
OF THIS ARTICLE EIGHTEEN ALL OF THEIR RESPECTIVE AFFILIATES) HEREBY
IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE STATE COURTS OF THE
STATE OF TEXAS LOCATED IN HARRIS COUNTY AND TO THE JURISDICTION OF THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS FOR THE
PURPOSE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, AND CRSS AND
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JACOBS HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION
OR PROCEEDING MAY BE HEARD AND DETERMINED ONLY IN SUCH COURTS. TO THE
EXTENT PERMITTED BY LAW, EACH OF CRSS AND JACOBS HEREBY WAIVES AND AGREES
NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH
ACTION OR PROCEEDING THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION
OF SUCH COURTS, THAT THE ACTION OR PROCEEDING IS BROUGHT IN ANY
INCONVENIENT FORUM OR THAT THE VENUE OF THE ACTION OR PROCEEDING IS
IMPROPER; PROVIDED, HOWEVER, THAT NOTHING HEREIN SHALL PREVENT EITHER PARTY
FROM REMOVING ANY CASE HEREUNDER BROUGHT IN A STATE COURT TO THE FEDERAL
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS. CRSS AND JACOBS AGREE
THAT A FINAL JUDGMENT IN ANY ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY
OTHER MANNER PROVIDED BY LAW.
(ii) EACH OF CRSS AND JACOBS IRREVOCABLY CONSENTS TO THE SERVICE
OF THE SUMMONS AND COMPLAINT AND ANY OTHER PROCESS IN ANY OTHER ACTION OR
PROCEEDING RELATING TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, ON
BEHALF OF ITSELF OR ITS PROPERTY, AT THE ADDRESSES SET FORTH IN ARTICLE
SEVENTEEN HEREOF. IN ADDITION, EACH OF CRSS AND JACOBS HEREBY APPOINTS CT
CORPORATION SYSTEM, 811 DALLAS AVENUE, HOUSTON, TEXAS 77002, AS ITS AGENT
FOR SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING. NOTHING IN THIS
ARTICLE EIGHTEEN SHALL AFFECT THE RIGHT OF CRSS OR JACOBS TO SERVE LEGAL
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
IN WITNESS WHEREOF, the parties to this Agreement have duly executed
it on the day and year first above written.
JACOBS ENGINEERING GROUP INC.
By NOEL G. WATSON
----------------------
Name: Noel G. Watson
Title: President/CEO
CRSS INC.
By BRUCE W. WILKINSON
------------------------
Name: Bruce W. Wilkinson
Title: CHM/CEO
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ANNEXES TO AGREEMENT
--------------------
Annex Subject Principal Reference
- - ----- ------- -------------------
I Form of Bill of Sale 10.1
II Form of Assumption Agreement 10.2
III Form of Covenant Not to
Compete 8.12
IV Form of Service Mark
License Agreement 7.6
V At Risk Contracts 11.1
VI Form of Services Agreement 11.4
VII Trade Names 11.2
EXHIBITS TO BE FURNISHED
------------------------
BY CRSS
-------
Exhibit Number and
-------------------
Description Paragraph Reference
----------- -------------------
States of Incorporation 3.1
Authorized and Outstanding Capitalization 3.2
Subsidiaries 3.3
Financial Statements 3.4
Material Changes 3.5
Real Property 3.7
Assumed Contracts; Continuing Contracts;
Personal Property Leases;
Ancillary Contracts 3.8
Equipment and Other Assets 3.9
Accounts receivable 3.10
Backlog 3.11
Trade Names; Intellectual Property 3.12
Exceptions to Good Title; Related
Party Transactions 3.13
Insurance policies; bonds;
Letters of Credit 3.14
Material contracts 3.15
Litigation 3.18
Violation of other agreements 3.19
Interests in customers and suppliers 3.22
Officers, employees, et al. 3.24
Government Contracts 3.27
118
