<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported): August 31, 1999
MATRIX SERVICE COMPANY
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(Exact name of registrant as specified in its charter)
Delaware 0-18716 73-1352174
----------------- -------------- ------------
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
10701 East Ute Street, Tulsa, Oklahoma 74116
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (918) 838-8822
--------------
Page 1 of 3 pages
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Item 2. Acquisition or Disposition of Assets.
On August 31, 1999, the Registrant sold the assets and the business of its
wholly-owned subsidiaries - Brown Steel Contractors, Inc., Brown Steel Services,
Inc., Brown Tanks, Inc., and Aqua Tanks, Inc. - to a wholly-owned subsidiary of
Caldwell Tanks, Inc. for cash in the amount of $4.3 million and the assumption
by the buyer of ongoing construction contracts ("Work-in-Process Contracts") and
certain environmental liabilities of $0.4 million. Excluded from the assets sold
were cash, accounts receivable, real estate and buildings and other
miscellaneous assets. Included in the assets sold was all inventory of the
subsidiaries, net of $0.7 million used as work-in-process. The cash amount paid
at closing is subject to adjustment after the closing based upon the
relationship of future billings and the cost to complete the Work-in-Process
Contracts as of August 31, 1999. The buyer has a three year right to use and an
option to acquire the real estate and buildings at a specified price, and is
obligated to acquire the real estate and buildings if the Registrant is able to
satisfy specified environmental clean-up measures within the three year period.
The subsidiaries were engaged in the business of constructing above-ground
water storage tanks (the "Business"). The Registrant has agreed with the buyer
not to compete in that business for five years. For the fiscal years ended May
31, 1997, 1998 and 1999, the Business accounted for 19,8%, 14.4% and 15.9%,
respectively, of the Registrant's total revenues, and 19.0%, 20.2% and 17.7%,
respectively, of the Registrant's total assets.
Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits.
(b) Pro Forma Financial Information
The Summarized Pro Forma Balance Sheet of the Company for the period
ended May 31, 1999 is included with this report.
(c) Exhibits
See the Exhibit Index that is included with this Report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MATRIX SERVICE COMPANY
Dated: September 13, 1999 By: /s/ Michael J. Hall
------------------------------
Michael J. Hall
Vice President and
Chief Financial Officer
Page 2 of 3 pages
<PAGE>
EXHIBIT INDEX
EXHIBIT NO.
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99.1 Amended and Restated Stock Purchase Agreement and Conversion
to Asset Purchase Agreement, dated August 31, 1999.
99.2 Non-Compete Agreement
99.3 Facilities Use Agreement (Broad Street Property)
99.4 Facilities Use Agreement (Lower Fayetteville Road Property)
99.5 Environmental Work Plan
Page 3 of 3 pages
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Matrix Service Company
Summarized Pro-Forma Balance Sheet
For Period Ended May 31, 1999
(Amounts in 000's)
<TABLE>
<CAPTION>
Per Brown Pro
10-K Sale Forma
---------------------------------------------
<S> <C> <C> <C>
Cash and cash equivalents 2,972 4,269 7,241
Accounts receivable 34,390 0 34,390
Costs and estimated earnings in excess of
billings on uncompleted contracts 8,541 0 8,541
Inventories 3,042 752 3,794
Assets held for disposal 8,556 (5,380) 3,176
Income tax receivable 104 0 104
Deferred income taxes 0 0 0
Prepaid expenses 1,051 0 1,051
---------------------------------------------
Total current assets 58,656 (359) 58,297
Property, plant and equipment, at cost 36,185 0 36,185
Accumulated depreciation (17,971) 0 (17,971)
---------------------------------------------
18,214 0 18,214
Goodwill, net of accumulated amortization 11,122 0 11,122
Other assets 228 0 228
---------------------------------------------
Total assets 88,220 (359) 87,861
=============================================
Accounts payable 9,805 0 9,805
Billings on uncompleted contracts in excess
of costs and estimated earnings 7,356 0 7,356
Accrued insurance 4,541 0 4,541
Accrued environmental reserves 1,778 (359) 1,419
Earnout payable 727 0 727
Income tax payable 307 0 307
Other accrued expenses 6,378 0 6,378
Current portion of long-term debt 2,092 0 2,092
---------------------------------------------
Total Current Liabilities 32,984 (359) 32,625
Long-term debt 5,521 0 5,521
Common stock 96 0 96
Additional paid-in capital 51,596 0 51,596
Retained earnings 1,567 0 1,567
Cumulative translation adjustment (555) 0 (555)
---------------------------------------------
52,704 0 52,704
Less treasury stock, at cost (2,989) 0 (2,989)
---------------------------------------------
Total stockholders' equity 49,715 0 49,715
---------------------------------------------
Total liabilities and stockholders' equity 88,220 (359) 87,861
=============================================
</TABLE>
Note: As the Brown transaction had no P&L impact, no pro-forma income statement
is presented.
<PAGE>
EXHIBIT 99.1
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AMENDED AND RESTATED
STOCK PURCHASE AGREEMENT
AND CONVERSION TO
ASSET PURCHASE AGREEMENT
BY AND AMONG
CALDWELL TANKS ALLIANCE, LLC,
CALDWELL TANKS, INC.,
BROWN STEEL CONTRACTORS, INC.,
GEORGIA STEEL ACQUISITION CORP.
AND
MATRIX SERVICE COMPANY
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August 31, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
<S> <C>
1. Purchase and Sale of Assets; Excluded Assets............................................................... 2
1.1 Purchased Assets..................................................................................... 2
1.2 Excluded Assets...................................................................................... 4
1.3 Documents of Assignment.............................................................................. 4
2. Purchase Price; Assumed Obligations; Retained Obligations.................................................. 5
2.1 Purchase Price....................................................................................... 5
2.2 Adjustments to Purchase Price........................................................................ 5
2.3 Payment of Fees and Expenses of Arbitration and Audit Firm........................................... 11
2.4 Effect of Adjustments; Interest...................................................................... 12
2.5 Assumption of Certain Obligations; No Assumption of Other Obligations................................ 12
2.6 Allocation of Purchase Price......................................................................... 16
3. Closing.................................................................................................... 16
3.1 Closing.............................................................................................. 16
3.2 Closing Date......................................................................................... 16
4. Representations and Warranties of Brown, GSAC and Matrix................................................... 17
4.1 Authority; Consents; Enforcement; Noncontravention................................................... 17
4.2 Qualification of Brown Parties in Other States....................................................... 19
4.3 Ownership of Brown and GSAC.......................................................................... 19
4.4 [Intentionally Omitted].............................................................................. 19
4.5 Financial Statements................................................................................. 19
4.6 Absence of Undisclosed Liabilities................................................................... 20
4.7 Absence of Certain Events............................................................................ 20
4.8 Books of Account, Records and Minute Books........................................................... 24
4.9 Certain Payments..................................................................................... 25
4.10 Compliance With Legal Requirements; Governmental Authorizations..................................... 25
4.11 Computer Systems; Software.......................................................................... 28
4.12 Condition and Sufficiency of Assets................................................................. 30
4.13 Contracts........................................................................................... 30
4.14 Employee Benefits................................................................................... 33
4.15 Employees and Independent Contractors............................................................... 39
4.16 Environmental Matters............................................................................... 40
4.17 Insurance........................................................................................... 43
4.18 Intellectual Property............................................................................... 44
4.19 Inventory........................................................................................... 47
4.20 Labor Relations; Compliance......................................................................... 48
4.21 Litigation; Compliance With Legal Requirements, Etc................................................. 48
4.22 No Agent, Finder or Broker.......................................................................... 50
4.23 Products............................................................................................ 50
4.24 Real Property....................................................................................... 51
</TABLE>
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<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
<S> <C>
4.25 Similar Business Ownership.......................................................................... 53
4.26 Status of Contracts and Leases...................................................................... 54
4.27 Studies............................................................................................. 54
4.28 Taxes; Tax Returns; Tax Elections................................................................... 55
4.29 Title to Properties................................................................................. 57
4.30 Contract Price; Billings; Customer Offsets.......................................................... 57
4.31 Bank Accounts....................................................................................... 57
4.32 Brown Family Claims; Dissolution of Georgia Steel Fabricators....................................... 58
4.33 Completeness of Statement; Effect of Representations and Warranties................................. 58
5. Representations and Warranties of Caldwell and Caldwell Tanks.............................................. 59
5.1 Corporate Status.................................................................................... 59
5.2 Authority; Consents; Enforcement; Noncontravention.................................................. 60
5.3 No Agent, Finder or Broker.......................................................................... 61
5.4 .................................................................................................... 61
5.5 Completeness of Statement; Effect of Representations and Warranties................................. 61
5.6 Litigation.......................................................................................... 61
6. Covenants of the Parties................................................................................... 62
6.1 No Negotiation...................................................................................... 62
6.2 Operations of Brown Parties Pending Closing......................................................... 62
6.3 Investigation of Brown by Caldwell and Caldwell Tanks............................................... 65
6.4 Title Insurance; Surveys............................................................................ 65
6.5 Lien and Litigation Searches........................................................................ 67
6.6 Transition of Brown................................................................................. 67
6.7 Further Assurances.................................................................................. 67
6.8 Actions of the Parties.............................................................................. 68
6.9 Compliance With Conditions.......................................................................... 69
6.10 Consents; Actions................................................................................... 69
6.11 Accounts Receivable................................................................................. 69
6.12 Matrix's Guaranty................................................................................... 70
6.13 Certain Employee Matters............................................................................ 71
6.14 Books and Records................................................................................... 75
6.15 Orion Contract...................................................................................... 76
6.16 Permits............................................................................................. 77
6.17 Real Property Commitments........................................................................... 77
6.18 Caldwell Tanks' Guaranty............................................................................ 82
6.19 Contract Consent Matters............................................................................ 83
6.20 Letter of Credit and Insurance Requirements......................................................... 85
7. Conditions To Closing...................................................................................... 88
7.1 Conditions to Obligations of Caldwell............................................................... 88
7.2 Conditions to Obligations of Brown, GSAC and Matrix................................................. 93
</TABLE>
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<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
<S> <C>
8. Termination............................................................................................... 95
8.1 Termination of Agreement........................................................................... 95
8.2 Effect of Termination.............................................................................. 96
9. Deliveries and Actions To Be Taken At The Closing......................................................... 96
9.1 Deliveries by Brown, GSAC and Matrix............................................................... 96
9.2 Deliveries by Caldwell............................................................................. 98
9.3 Actions and Deliveries Simultaneous................................................................ 99
10. Indemnification; Remedies................................................................................. 99
10.1 Survival; Right to Indemnification Not Affected by Knowledge....................................... 99
10.2 Indemnification and Payment of Damages By Matrix, GSAC and Brown................................... 100
10.3 Limitation on Matrix's Indemnification............................................................. 101
10.4 Indemnification By Caldwell........................................................................ 101
10.5 Procedure for Indemnification...................................................................... 102
11. Arbitration............................................................................................... 104
11.1 Referral........................................................................................... 104
11.2 Demand............................................................................................. 105
11.3 Discovery.......................................................................................... 105
11.4 Binding Decision................................................................................... 105
12. Miscellaneous Provisions.................................................................................. 106
12.1 Confidentiality of Agreement....................................................................... 106
12.2 Consent to Jurisdiction............................................................................ 106
12.3 Construction....................................................................................... 107
12.4 Entire Agreement................................................................................... 108
12.5 Exhibits and Schedules............................................................................. 108
12.6 Expenses........................................................................................... 108
12.7 Governing Law...................................................................................... 108
12.8 Headings........................................................................................... 109
12.9 Invalidity of Provisions; Severability............................................................. 109
12.10 No Public Announcement............................................................................. 109
12.11 No Third Party Beneficiaries....................................................................... 110
12.12 Notices............................................................................................ 110
12.13 Specific Performance............................................................................... 112
12.14 Successors and Assigns............................................................................. 112
12.15 Time of Essence.................................................................................... 113
12.16 Waiver............................................................................................. 113
12.17 Preservation of Claims............................................................................. 114
12.18 Bulk Sales Compliance.............................................................................. 115
12.19 Transfer Taxes..................................................................................... 115
</TABLE>
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<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
<S> <C>
</TABLE>
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<PAGE>
EXHIBITS
<TABLE>
<CAPTION>
Exhibit Description Section
<S> <C>
A Certain Definitions..................................................................... Recital C
A-1 Real Property Interests.................................................................
A-2 Certain Excluded Assets.................................................................
B WIP Contracts........................................................................... 2.2(a)(3)(B)
B-1 Other Work-in-Process Contracts......................................................... 2.2(a)(3)(B)
C [Reserved]
D Allocation of Purchase Price............................................................ 2.5
E Other Agreements........................................................................ 4.26
F Orion Contract & June 2, 1999 Memorandum................................................ 6.15
G Environmental Insurance Quotation....................................................... 6.17
<CAPTION>
SCHEDULES
Description Schedule
<S> <C>
Articles of Incorporation and Bylaws of the Company................................................... 4.1(a)
Qualification as Foreign Corporation.................................................................. 4.2
Subsidiaries and Investments.......................................................................... 4.4
Financial Statements.................................................................................. 4.5
Absence of Undisclosed Liabilities.................................................................... 4.6
Absence of Certain Events............................................................................. 4.7
Governmental Authorizations........................................................................... 4.10(b)
Contracts............................................................................................. 4.13
Employee Benefit Plans................................................................................ 4.14(a)
Multi-Employer Plans.................................................................................. 4.14(d)
Post-Retirement Benefits.............................................................................. 4.14(e)
Officers and Employees of the Company................................................................. 4.15(a)
Agreements With Employees and Independent Contractors................................................. 4.15
Environmental Laws.................................................................................... 4.16(a)
Insurance............................................................................................. 4.17
Patents............................................................................................... 4.18(c)
Marks................................................................................................. 4.18(d)
Copyrights............................................................................................ 4.18(e)
Royalties............................................................................................. 4.18(g)
Employee Agreements................................................................................... 4.18(h)
Proceedings........................................................................................... 4.21(a)
Orders................................................................................................ 4.21(b)
Product Terms and Conditions.......................................................................... 4.23(a)
Real Property - Owned................................................................................. 4.24(a)
Real Property - Encumbrances.......................................................................... 4.24(a)(1)
Real Property - Leased................................................................................ 4.24(b)
Similar Business Ownership............................................................................ 4.25
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
Taxes...................................................................................................... 4.28
Audited Returns............................................................................................ 4.28(b)
Tax Basis, Etc............................................................................................. 4.28(c)
Waivers.................................................................................................... 4.28(f)
Tax Agreements............................................................................................. 4.28(g)
Title to Properties........................................................................................ 4.29
Bank Accounts.............................................................................................. 4.31
Brown Family Claims........................................................................................ 4.32
</TABLE>
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<PAGE>
AMENDED AND RESTATED
STOCK PURCHASE AGREEMENT AND
CONVERSION TO ASSET PURCHASE AGREEMENT
This Amended and Restated Stock Purchase Agreement and Conversion to Asset
Purchase Agreement is made and entered into as of this 31st day of August, 1999
(but with retroactive effectiveness to June 9, 1999), by and among Caldwell
Tanks Alliance, LLC, a Georgia limited liability company ("Caldwell"), Caldwell
Tanks, Inc., a Kentucky corporation ("Caldwell Tanks"), Brown Steel Contractors,
Inc., a Georgia corporation ("Brown"), Georgia Steel Acquisition Corp., an
Oklahoma corporation ("GSAC"), and Matrix Service Company, a Delaware
corporation ("Matrix") (collectively, the "Parties").
Recitals:
A. The Parties are parties to that certain Stock Purchase Agreement dated as
of June 9, 1999 (the "Original Agreement"), pursuant to which, among other
transactions, GSAC agreed to sell and convey to Caldwell at the "Closing" (as
defined in the Original Agreement) all of the issued and outstanding capital
stock of Brown, upon and subject to the terms and conditions set forth therein.
B. For various business reasons satisfactory to them, the Parties now desire
to amend and restate the Original Agreement in its entirety to, among other
things, convert the transactions contemplated therein from a purchase by
Caldwell from GSAC of the capital stock of Brown, to a purchase by Caldwell of
certain assets and properties, tangible and intangible, of Brown, upon and
subject to the terms and conditions set forth in this Agreement.
C. Matrix owns all of the issued and outstanding capital stock of GSAC, and
GSAC owns all of the issued and outstanding capital stock of Brown.
D. Matrix and GSAC have agreed to become parties to this Agreement, and to
make their representations, warranties, covenants and agreements set forth
herein, as an inducement for and condition to the execution and delivery of this
Agreement by Caldwell and Caldwell Tanks.
<PAGE>
E. Caldwell Tanks, the sole member of Caldwell, has agreed to become a party
to this Agreement, and to make its representations, warranties, covenants and
agreements set forth herein, as an inducement for and condition to the execution
and delivery of this Agreement by Matrix, GSAC and Brown.
F. Capitalized terms used in this Agreement shall have the respective
meanings set forth in Exhibit A attached hereto.
---------
Agreement:
Now, Therefore, in consideration of the premises and for other valuable
consideration, the receipt of which is hereby acknowledged, the Parties agree
that the Original Agreement is hereby amended and restated to be and read in its
entirety as follows, with retroactive effect to June 9, 1999 (the "Effective
Date"):
1. Purchase and Sale of Assets; Excluded Assets.
1.1 Purchased Assets. Upon the terms and subject to the conditions
set forth herein, Brown agrees to sell, transfer, convey, assign and deliver to
Caldwell at the Closing, and Caldwell agrees to purchase and accept from Brown
at the Closing, all of Brown's rights, title and interests under, in and to all
businesses, assets and properties of Brown, tangible and intangible, personal
and mixed, wherever situated (collectively, the "Assets"), free and clear of all
Encumbrances other than Permitted Encumbrances, including without limitation,
any of the following kinds or types of assets and properties of Brown (but
specifically excluding from the Assets all "Excluded Assets" (as defined in
Section 12)):
(a) all assets and properties set forth or reflected on the
Acquisition Balance Sheet described in Section 45, and all other assets and
properties acquired since the date of the Acquisition Balance Sheet, except such
as shall have been disposed of in the Ordinary Course of Business of Brown since
that date;
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<PAGE>
(b) all machinery, equipment, vehicles, computer software,
furnishings and fixtures;
(c) all supplies, spare parts, tools, accessories and maintenance
equipment;
(d) all work-in-process and inventories (including raw materials);
(e) subject to the provisions of Section 6.19, all rights, title
and interest of Brown under, in and to all WIP Contracts, Other Work-in-Process
Contracts, Other Agreements, Governmental Authorizations, easements, rights of
way and concessions by which Brown or any of its assets or properties benefit;
(f) all trade names, trademarks, service marks, patents, letters
patent, inventions, trade secrets, copyrights, all registrations or applications
for registration thereof, and all other Intellectual Property and proprietary
and intangible assets and properties;
(g) all books and records of account, financial records, employee
records, and other books and records of any kind and type;
(h) the name "Brown Steel Contractors, Inc.";
(i) all goodwill;
(j) the Purchase Order, dated as of March 10, 1999, between Brown
(as successor in interest of Matrix) and LVD Corporation, for the purchase by
Brown of a DAVI Roll System MCB 3045 (Matrix Purchase Order No. 23407-99) (the
"Plate Roll Contract"), and the Invoice, dated as of August 3, 1999, between
Brown and Corrosion Specialities, Inc., for the purchase by Brown of certain
paint distillation equipment (Brown Purchase Order No. 24309-99) (the "Corrosion
Specialties Contract");
(k) all assets and properties assigned and transferred by the
Subsidiaries to Brown prior to the Closing as contemplated in Section 2.5(d);
and
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<PAGE>
(l) all other assets and properties of any nature whatsoever held
by Brown other than the Excluded Assets.
1.2 Excluded Assets. Notwithstanding anything contained in
Section 1.1 to the contrary, the Assets to be purchased by Caldwell from Brown
at the Closing shall not include: (a) any of the Accounts Receivable, prepaid
assets, tax related assets and other assets of the Brown Parties (as defined
below) set forth or identified on Exhibit A-2 attached hereto, or generated in
-----------
the Ordinary Course of Business of the Brown Parties from the Effective Date
through the Closing, or any cash on hand or in bank accounts of the Brown
Parties as of the Closing; or (b) any rights, title or interests of Brown under,
in or to the real property of Brown located at 57 East Broad Street Road,
Newnan, Georgia, and described on Exhibit A-1 attached hereto, any buildings,
-----------
structures, facilities, fixtures or improvements thereon, any mineral rights in
respect thereof, or any water rights or other rights appurtenant to that real
property (collectively, the "Broad Street Property"); or (c) any rights, title
or interests of Brown under, in and to the real property of Brown located at 521
Lower Fayetteville Road, Newnan, Georgia, and described on Exhibit A-1 attached
-----------
hereto, any buildings, structures, facilities, fixtures or improvements thereon,
any mineral rights in respect thereof, or any water rights appurtenant to that
real property (collectively, the "Fayetteville Road Property"); or (d) any
issued and outstanding capital stock of any of the Subsidiaries (such Accounts
Receivable, prepaid assets, tax related assets, cash, the Broad Street Property,
the Fayetteville Road Property and the capital stock of the Subsidiaries being
hereinafter collectively referred to as the "Excluded Assets").
1.3 Documents of Assignment. At the Closing, Brown shall execute
and deliver to Caldwell such bills of sale, assignments and other instruments,
all in recordable form and otherwise in a form reasonably satisfactory to the
Parties, as shall be required or requested by Caldwell in order to evidence and
effect the sale, conveyance, assignment and transfer of the Assets to Caldwell.
2. Purchase Price; Assumed Obligations; Retained Obligations.
2.1 Purchase Price. Caldwell shall pay to Brown at the Closing,
for and in consideration of the sale by Brown to Caldwell of the Assets, a
purchase price equal to: (a) $3,421,400, subject to adjustment as expressly
contemplated in Section 2.2(a) or elsewhere in this Agreement or the Ancillary
Documents (the "Base Price"); plus (b) an amount equal to the lesser of (i) the
---- -------------
sum
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<PAGE>
of the costs (as reflected in Brown's and the Subsidiaries financial books and
records) incurred by Brown and the Subsidiaries (collectively, the "Brown
Parties") to purchase all items of steel plate, pipe, channel and angle
inventory of the Brown Parties on hand as of the Closing at the Brown Parties'
facilities in Newnan, Georgia, and which are unused and not allocated to a
particular WIP Contract (collectively, the "Inventory"), or (ii) the fair market
value of all such Inventory as of the Closing, but in either case exclusive of
obsolete Inventory (the "Inventory Price") (the Base Price and the Inventory
Price are hereinafter collectively referred to as the "Purchase Price"). The
Inventory and Inventory Price shall be determined pursuant to the procedures set
forth in Section 2.2(b). The Purchase Price shall be paid in immediately
available funds at the Closing, subject to any adjustment in the Base Price
and/or the Inventory Price following the Closing as contemplated in Section 2.2.
2.2 Adjustments to Purchase Price.
(a) Adjustments to Base Price. The Base Price shall be subject to
adjustment following the Closing as follows:
(1) The Base Price shall be increased by an amount equal to the
amount (if any) by which (A) the aggregate of all Net Billings pursuant to the
WIP Contracts exceeds (B) the sum of (y) the amount determined by dividing (i)
--------
the aggregate of all Completion Costs (exclusive of liquidated damages,
penalties or other similar payments) to be incurred by Caldwell (as the
assignee of Brown) and the Subsidiaries in connection with the WIP Contracts
following the Closing by (ii) ninety-five percent (95%), plus (z) the
--
aggregate of all liquidated damages, penalties or other similar payments
included within the definition of Completion Costs to be incurred by Caldwell
(as the assignee of Brown) and the Subsidiaries in connection with the WIP
Contracts following the Closing.
(2) The Base Price shall be decreased by an amount equal to the
amount (if any) by which (A) the aggregate of all Net Billings pursuant to the
WIP Contracts is less than (B) the sum of (y) the amount determined by
dividing (i) the aggregate of all Completion Costs (exclusive of liquidated
--------
damages, penalties or other similar payments) to be incurred by Caldwell
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<PAGE>
(as the assignee of Brown) and the Subsidiaries in connection with the WIP
Contracts following the Closing by (ii) ninety-five percent (95%), plus (z)
--
the aggregate of all liquidated damages, penalties or other similar payments
included within the definition of Completion Costs to be incurred by Caldwell
(as the assignee of Brown) and the Subsidiaries in connection with the WIP
Contracts following the Closing.
(3) As used in this Agreement, the following terms shall have
the meanings set forth below:
(A) "Net Billings" shall mean the amount by which: (i) the
aggregate consideration payable by the relevant customer(s) to the Brown
Parties (or any of them) and, following the Closing, to Caldwell in accordance
with a particular WIP Contract (whether paid before the Closing or payable
thereafter, and whether payable in cash or in any other form of consideration
(which other form of consideration shall be valued at its fair market value on
the date paid)), assuming performance owing by the relevant Brown Party(s)
and/or Caldwell (as applicable) under that WIP Contract prior to and following
the Closing has been and will be completed in accordance with its terms (the
"Contract Price"); exceeds (ii) the aggregate sum of all amounts that have
actually been billed for collection by the Brown Parties (or any of them) to
the relevant customer(s) as of and prior to the Closing under that WIP
Contract, whether or not collected prior to the Closing, including without
limitation, all retainage that has been included in any invoice delivered by
the Brown Parties to any customer that remains unpaid as of the Closing Date
(collectively, the "Billings"). The Parties' agreement as to the Contract
Price for each WIP Contract shall be reflected on the "Revised Exhibit B"
contemplated in Subpart (C) below, and shall not be subject to adjustment or
challenge by any Party following the Closing.
(B) "WIP Contracts" shall mean the contracts, agreements
and work orders entered into by the Brown Parties (or any of them) and
identified on Exhibit B attached hereto (but only to the extent such contract
---------
is identified under the "Percentage Completed" (Pct. Cmpt.) column on Exhibit
-------
B as not being 100% completed as of April 30 1999, and then only to the extent
-
performance by the relevant Brown Party(s) under the same (exclusive of
warranty or other similar undertakings) shall not have been fully completed by
such Brown Party(s) prior to
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<PAGE>
the Closing), together with such other customer contracts, agreements and work
orders as shall be added to Exhibit B by mutual written agreement of the
---------
Parties prior to the Closing. "Other Work-in-Process Contracts" shall mean the
contracts and agreements entered into by the Brown Parties (or any of them)
and identified on Exhibit B-1 attached hereto, and any bids identified on
-----------
Exhibit B-1 where any of the Brown Parties have been notified they are the low
-----------
bidder.
(C) "Completion Costs" shall mean the amounts determined by
the mutual agreement of the Parties (as contemplated below) for each WIP
Contract, as being the sum of all direct and indirect costs and expenses that
will be incurred by Caldwell (as the assignee of Brown) following the Closing
in connection with its performance and completion of all remaining obligations
under that WIP Contract in accordance with its terms (but exclusive of all
Retained Obligations in respect of that WIP Contract that are retained and
discharged by Brown as contemplated in Section 25), including without
limitation, all costs and expenses for (1) labor (whether employee or
contractor) and related benefits, (2) inventories, materials, supplies, tools
and spare parts, (3) site procurement and site preparation, (4) permitting,
(5) performance and surety bonds (and replacements therefor), (6)
subcontractor compensation and expenses which are properly chargeable to
Caldwell (as the assignee of Brown) or any Subsidiary in accordance with the
relevant subcontracts, and (7) any liquidated damages, penalties or other
similar payments that may become due and owing by Caldwell or any Subsidiary
following the Closing, but excluding all engineering, marketing,
administrative and interest costs and expenses. The Parties' determination as
to the Completion Costs shall be set forth under the heading "Estimated Cost
to be Incurred" on a revised version of Exhibit B prior to the Closing, which
---------
shall be separately dated and executed by the Parties to signify their
agreement to the same ("Revised Exhibit B"). The amounts set forth under that
---------
heading on Exhibit B attached hereto as of April 30, 1999 shall have no
---------
relevance for purposes of this Agreement. The Parties acknowledge that the
Completion Costs and Billings for each WIP Contract set forth on Revised
Exhibit B as of the Closing will reflect their agreement as to those costs and
---------
Billings as of a date prior to the Closing Date, which shall be specified on
the face of Revised Exhibit B (the "Preliminary Determination Date"), and
---------
shall not be subject to adjustment or challenge by any Party following the
Closing (other than for the adjustment for Billings and Completion Costs from
the Preliminary Determination Date through the Closing Date as hereinafter
contemplated in this
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<PAGE>
Subpart (C)). No adjustment to the Base Price shall be made at the Closing
based upon Revised Exhibit B. Rather, Caldwell and Brown agree to meet with
---------
each other promptly following the Closing to (x) determine the percentage of
additional work completed by the relevant Brown Party(s), and the actual costs
incurred by that Brown Party, during the period between the Preliminary
Determination Date and the Closing, and to correspondingly adjust the
Completion Costs for the relevant WIP Contracts as of the Closing based upon
those determinations, and (y) determine the actual Billings for each WIP
Contract made from the Preliminary Determination Date through the Closing, and
to correspondingly adjust the Billings for the relevant WIP Contracts as of
the Closing based upon that determination. In the event Caldwell and Brown
agree in writing on those Billings, or an appropriate adjustment to the
Completion Costs based upon the determination contemplated above, the Billings
and Completion Costs as so determined or adjusted shall be deemed to be final
and binding on the Parties. In the event Caldwell and Brown are not able to
agree in writing on the Billings, and on adjustment to the Completion Costs on
or before the 21st day following the Closing, either of those Parties shall be
entitled to refer the matter for resolution pursuant to the arbitration
procedures set forth in Section 11 of this Agreement; provided that the sole
determination made in any such proceeding shall be the amount of the Billings
actually made from the Preliminary Determination Date through the Closing, or
the amount of the adjustment in the Parties' estimate of the Completion Costs
as of the Closing that is required based upon the actual work performed and
costs incurred by the relevant Brown Party(s) in respect of the WIP Contracts
from the Preliminary Determination Date through the Closing (as applicable).
Within five (5) days after the Parties have agreed upon the Billings and the
appropriate adjustment to the Completion Costs as contemplated above (or
within five (5) days after such later date on which the Billings or Completion
Costs adjustment determination has been made pursuant to the dispute
resolution procedures set forth in Section 11), the Parties shall meet to
determine the appropriate adjustment to the Base Price paid by Caldwell at the
Closing, based on the relevant formula set forth in Section 2.2(a)(1) or
2.2(a)(2). Thereafter, Caldwell agrees to pay to Brown (in the case of an
increase in the Base Price), or Brown agrees to reimburse Caldwell (in the
case of a decrease in the Base Price), an amount equal to the amount of that
increase or decrease (as applicable) within ten (10) days after the date on
which Brown and Caldwell agree in writing on the adjustment or, to the extent
a dispute over the appropriate determination persists, after the date on which
that adjustment is
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<PAGE>
finally determined pursuant to Section 11. Any such payment by Caldwell or
Brown shall be deemed to be an adjustment in the Base Price. Following any
adjustment as contemplated above, the Billings and the Completion Costs shall
not be subject to further determination or adjustment following the Closing,
whether based upon the actual completion costs incurred by Caldwell in
connection with the WIP Contracts or otherwise.
(b) Determination of Inventory Price; Adjustment. A physical
inventory of all Inventory of the Brown Parties as of a mutually agreeable date
prior to the Closing Date shall be jointly conducted and completed by the
Parties prior to the Closing, at the joint expense of Caldwell and Brown. Based
on that physical inventory, an estimate of the Inventory Price shall be assigned
by mutual agreement of Brown and Caldwell prior to the Closing, which assigned
price (the "Assigned Inventory Price") shall be used for purposes of the
Purchase Price to be paid at the Closing. Notwithstanding the foregoing, in the
event, following the Closing, either Brown or Caldwell shall believe that the
quantity of any one or more items of Inventory on hand as of the Closing
differed in any material respect from the quantity that was on hand as of the
date of their physical inventory prior to the Closing (and that formed the basis
for the Inventory Price paid at the Closing), or shall believe that the Assigned
Inventory Price was otherwise inaccurate in any material respect, and in the
event Brown and Caldwell are not thereafter able to agree in writing on an
appropriate adjustment to the Inventory Price, then either of those Parties may,
by written notice delivered to the other of those Parties not later than forty-
five (45) days after the Closing, elect to cause an independent, nationally
recognized, certified public accounting firm reasonably satisfactory to the
other of those Parties (an "Audit Firm") to conduct an audit of the quantity of
Inventory of the Brown Parties as of the Closing and/or of the costs incurred by
the Brown Parties (as reflected in their financial books and records) to
purchase all items of Inventory (exclusive of obsolete items) on hand as of the
Closing, and to conduct an appraisal of the fair market value of that Inventory
as of the Closing (as applicable). The Audit Firm shall be free to retain such
appraisers and other consultants as it shall deem appropriate for that audit
and/or appraisal. Upon any such election, each Party shall reasonably cooperate
with the others and the Audit Firm (and its consultants) to facilitate that
audit and appraisal at the earliest practicable time, including without
limitation, by providing the Audit Firm (and its consultants) with reasonable
access to all books and records of the Brown Parties as shall be necessary for
the audit and appraisal. In the event the audit and appraisal shall
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<PAGE>
determine that the Assigned Inventory Price did not accurately reflect the
actual Inventory Price that should have been assigned (whether due to a
discrepancy in the quantity of Inventory assumed to exist as of the Closing or
in the cost or fair market value thereof), the Audit Firm shall notify Brown and
Caldwell of that conclusion and of the amount by which it believes the Assigned
Inventory Price differed from the actual Inventory Price that should have been
paid. In the event the audit and appraisal shall determine that the Assigned
Inventory Price was correct, the Audit Firm shall likewise notify Brown and
Caldwell of that conclusion. The determination of the Audit Firm shall be final
and binding on the Parties. In the event such a conclusion of inaccuracy is
reached by the Audit Firm, then Caldwell or Brown (as the case may be) agrees to
pay the other Party, within 30 days after the Audit Firm's final determination,
an amount equal to the amount by which the Assigned Inventory Price was less
than (in the case of a payment by Caldwell) or was greater than (in the case of
a payment by Brown) the actual Inventory Price that should have been paid. Any
such payment shall be deemed to be an increase or decrease (as the case may be)
in the Inventory Price.
(c) Other Work-in-Process Contracts. Notwithstanding that the Other
Work-in-Process Contracts shall not constitute WIP Contracts and shall not be
the basis for an adjustment to the Base Price pursuant to Section 2.2(a), the
Parties agree that the Other Work-in-Process Contracts may be the basis for an
adjustment to the Base Price following the Closing under the following circum
stances: In the event any of the Brown Parties have actually incurred, prior to
the Closing, costs or expenses in connection with their performance of any
obligations under a particular Other Work-in-Process Contract and in accordance
with the provisions thereof (exclusive of allocations of general, administrative
and other overhead expenses), and in the event the amount of such costs and
expenses exceeds the aggregate sum of all amounts that have actually been
collected by that Brown Party as of and prior to the Closing under that
contract, then Caldwell shall pay to Brown, within thirty (30) days after the
Closing Date and as an adjustment to the Base Price, an amount in immediately
available funds equal to the actual costs and expenses so incurred but not
collected by that Brown Party. To the extent the relevant Brown Party has
actually billed for collection to the relevant customer(s) such costs and
expenses prior to or as of the Closing, the account receivable represented by
that billing shall not constitute an Excluded Asset, but shall be an Asset
conveyed to Caldwell at the Closing. In the event Brown, GSAC or Matrix shall,
at any time following the
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<PAGE>
Closing, receive from the relevant customer(s) any amounts on account of the
account receivable described above, Brown, GSAC or Matrix (as applicable) shall
promptly notify Caldwell of the same, and shall promptly remit and pay all such
amounts to Caldwell for its account. Within fifteen (15) days after the Closing
Date, Brown shall provide to Caldwell a Certificate duly executed by an officer
of Brown and certifying as to the costs and expenses actually incurred, and the
billings actually made, by each Brown Party through the Closing under each Other
Work-in-Process Contract (separated by contract). In the event Caldwell shall
dispute any amount(s) set forth in that Certificate, the dispute may be referred
by either Brown or Caldwell for resolution pursuant to Section 11, if it cannot
otherwise be resolved by the mutual agreement of those Parties. In the event of
such a dispute, the relevant Party shall pay to the other all amounts owing
under this Section 2.2(c) that are not in dispute as contemplated above.
2.3 Payment of Fees and Expenses of Arbitration and Audit Firm. In the
event either Caldwell or Brown shall submit the Inventory Price to an Audit Firm
for determination as provided in Section 2.2(b), Caldwell and Brown shall each
be responsible for their own costs and expenses and for one-half of all fees and
expenses of the Audit Firm and its consultants. In the event either Caldwell or
Brown shall submit the resolution of Completion Costs, Billings, or of the
matters referred to in Section 2.2(c), to arbitration as provided in Section
2.2(a)(3)(C) or 2.2(c), Caldwell and Brown shall each be responsible for their
own costs and expenses and for one-half of the expenses of the arbitrator(s).
2.4 Effect of Adjustments; Interest. Any adjustments to the Base Price
or the Inventory Price pursuant to Section 2.2(a), 2.2(b) or 2.2(c) above shall
be deemed to be an adjustment to the Purchase Price for all purposes. Any
amounts payable by Caldwell or Brown to the other of those Parties as an
adjustment to the Purchase Price shall bear interest at a rate per annum of ten
percent (10%) from the Closing Date until paid to the relevant Party, all of
which interest amounts shall become immediately due and payable together with
the adjustment amount(s) on which they have accrued.
2.5 Assumption of Certain Obligations; No Assumption of Other
Obligations.
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<PAGE>
(a) Assumed Obligations. At the Closing, Caldwell and Brown shall
execute and deliver an Assignment & Assumption Agreement in form reasonably
satisfactory to the Parties (the "Assignment & Assumption Agreement"), pursuant
to which, among other transactions, Caldwell shall agree, effective as of the
Closing, to assume and undertake to pay, perform and discharge the following
obligations of Brown as of the Closing (collectively, the "Assumed
Obligations"), but no others:
(1) All executory payment and performance obligations of Brown
which first arise or accrue following the Closing (A) under the WIP Contracts
and the Other Work-in-Process Contracts, (B) under the agreements identified
on Exhibit E attached hereto, (C) under the bid proposals of Brown identified
---------
on Exhibit E that have been accepted by customers but which are not yet the
---------
subject of definitive contracts, (D) under any contracts or agreements that
may be entered into prior to the Closing by Brown arising out of the bid
proposals referred to in the immediately preceding clause, (E) under such
other agreements or bid proposals of Brown as shall be added to Exhibit B or E
--------------
by mutual agreement of the Parties prior to the Closing (the contracts,
agreements and bid proposals referred to in clauses (B) through (E), above,
being herein collectively referred to as the "Other Agreements"), (F) the
Plate Roll Contract, and (G) the Corrosion Specialties Contract (but
excluding, in the case of the contracts, agreements and bid proposals referred
to in clauses (A) through (G), above, any warranty or other similar
obligations, or breach or default obligations, in either case arising out of
work performed or failed to be performed, or materials, goods or services
delivered or failed to be delivered, by Brown or any Subsidiary prior to the
Closing, all of which shall be "Retained Obligations" (as defined below)); and
(2) any and all obligations that are expressly referred to in
Clauses (i) through (xi) of Subsection (b), below, as Assumed Obligations.
The Assignment & Assumption Agreement shall also serve to convey, assign and
transfer the intangible Assets to Caldwell as contemplated in Section 1.3.
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<PAGE>
(b) Retained Obligations. Except for the Assumed Obligations,
Caldwell shall not assume or in any manner become responsible or liable for, and
Brown agrees to retain, pay, perform and discharge in full, at its expense, any
and all debts, obligations and liabilities of Brown, including without
limitation, all Retained Obligations (as defined below) of Brown. As used in
this Agreement, the "Retained Obligations" shall mean any and all debts,
obligations and liabilities of any nature of Brown or any Subsidiary (or of any
predecessor in interest of them), or of or relating to any of the Assets, the
Broad Street Property or the Fayetteville Road Property, on and as of the
Closing on the Closing Date, and, in the case of the Broad Street Property and
the Fayetteville Road Property, arising at any time following the Closing
through the date of any purchase of that property by Caldwell or its Affiliate
as contemplated in Section 6.17 (except to the extent caused by the action or
inaction (where it had a duty or obligation to act) of Caldwell or its
Affiliate), in each case whether fixed, absolute, accrued, contingent or
otherwise, whether known or unknown, whether arising out of the business,
assets, properties, employees or operations of the Brown Parties or otherwise,
whether or not the subject of a representation or warranty set forth in Section
4, and whether owing to GSAC, Matrix or any of its other Affiliates, to any
Governmental Body, to any employee of any Brown Party, or to any other Person,
in each case other than the Assumed Obligations. The Retained Obligations being
retained by Brown shall include, without limitation, any claims, demands,
actions, causes of action, Proceedings, liabilities, damages, fines, penalties,
costs and expenses previously incurred or accrued or now or hereafter incurred
or accrued by or against Brown, any Subsidiary, Matrix, GSAC, Caldwell, Caldwell
Tanks, any Governmental Body or any other Person, resulting from, arising out of
or relating to: (i) any contract, agreement, arrangement or commitment to which
any Brown Party is a party or by which any of its assets or properties are bound
or subject to, in each case, as of the Closing, other than the Assumed
Obligations; (ii) any warranties (whether express or implied), guarantees or
other similar commitments made by any Brown Party to any other Person prior to
the Closing (other than the warranties expressly made by Brown in the WIP
Contracts or the Other Work-in-Process Contracts and relating to the services to
be performed and goods and materials to be delivered by Caldwell thereunder
following the Closing, all of which shall constitute Assumed Obligations),
regardless of whether the relevant warranty or guaranty claims are asserted
following the Closing; (iii) any indebtedness of the Brown Parties for borrowed
money to any Person as of the Closing; (iv) any Encumbrances on or affecting any
of the assets or properties of any Brown Party prior to the Closing
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<PAGE>
(other than the Permitted Encumbrances referred to in clauses (i), (v), (vi) and
(vii) of the definition of Permitted Encumbrances in Exhibit A, which shall
constitute Assumed Obligations; provided, that such an inclusion of a Permitted
Encumbrance as an Assumed Obligation shall not relieve Brown of its obligation
to pay, perform, satisfy and discharge in full all debts, obligations and
liabilities which are secured by such Permitted Encumbrances, to the extent that
such debts, obligations or liabilities themselves constitute Retained
Obligations), all of which Brown, GSAC and Matrix agree, shall be fully released
prior to the Closing at no cost or expense to Caldwell or Caldwell Tanks; (v)
except for the debts, obligations and liabilities specifically allocated to
Caldwell or Caldwell Tanks pursuant to Section 6.13 (all of which shall be
deemed to be Assumed Obligations), the employment of any of the Brown Parties'
employees, officers or other agents at any time prior to the Closing, any
injuries to such employees, officers or other agents incurred at any time prior
to the Closing, any compensation or other benefits accruing to the account of
such employees, officers or other agents under any Benefit Plans prior to the
Closing (whether or not vested prior to the Closing), or accruing to their
account following the Closing but based on their service to any Brown Party or
their Affiliate prior to the Closing, any other acts, omissions, state of facts
or circumstances occurring or existing prior to the Closing and relating to any
"Benefit Plans" (as defined in Section 4.14) of the Brown Parties or in which
they are or were a participant, and any other obligations or liabilities to or
relating to such Benefit Plans as of the Closing or arising following the
Closing and relating to the period prior to the Closing; (vi) any of the matters
identified on any disclosure Schedules delivered by Brown, Matrix or GSAC to
Caldwell or Caldwell Tanks and attached to or made a part of this Agreement, or
on any supplemental or amended disclosure Schedules delivered by them to
Caldwell or Caldwell Tanks following the Effective Date and prior to the
Closing, in either case except to the extent such matters constitute Assumed
Obligations; (vii) any debts, obligations or liabilities of the Brown Parties
set forth or reflected on the "Acquisition Balance Sheet" or the "Interim
Balance Sheet" (each as defined in Section 4.5) (except to the extent the same
are Assumed Obligations); (viii) any of the Excluded Assets; (ix) any failure by
any Brown Party or any of its assets or properties to comply with any
Environmental Laws as of or at any time prior to the Closing (and, in the case
of the Broad Street Property and the Fayetteville Road Property, arising at any
time following the Closing and prior to the purchase by Caldwell or its
Affiliate or designee of that property as contemplated in Section 6.17, but only
to the extent not caused or created by the action or inaction (where it had a
duty or obligation to act) of Caldwell or any of its Affiliates
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<PAGE>
following the Closing), and any Environmental, Health and Safety Liabilities of
or relating to any Brown Party or any of its assets or properties as of or at
any time prior to the Closing (and, in the case of the Broad Street Property and
the Fayetteville Road Property, arising at any time following the Closing and
prior to the purchase by Caldwell or its Affiliate or designee of that property
as contemplated in Section 6.17, but only to the extent not caused or created by
the action or inaction (where it had a duty or obligation to act) of Caldwell or
any of its Affiliates following the Closing); (x) any obligation or liability to
any surety, guarantor or other lender (including without limitation, any
reimbursement obligation) on account of or by reason of any payment or
distribution of funds to any customer of any Brown Party or other Person under
any payment or performance bond or other similar surety commitment, resulting
from or arising out of any breach of performance or failure or delay in
performance by any Brown Party occurring prior to the Closing under any
contract, agreement, arrangement or commitment to which such Brown Party is or
was a Party, whether or not such payment or distribution of funds occurs prior
to the Closing; and (xi) the termination by any Brown Party of any of their
employees that are identified by Caldwell Tanks as employees to whom offers of
employment will not be made following the Closing, as contemplated in Section
6.13(e), or any failure or refusal by Caldwell or any Subsidiary to hire, re-
hire or re-employ any of those terminated employees following the Closing.
Notwithstanding the foregoing, the Retained Obligations shall not include the
representations and warranties contained in Sections 4.11, 4.12, 4.18, 4.19,
4.24(a) and 429, and Caldwell and Caldwell Tanks shall look solely to the
provisions of Section 10.2(a) of this Agreement for indemnification by Brown,
GSAC and Matrix with respect thereto. Except as otherwise provided in Section
6.13, Brown agrees to fully fund and contribute to each relevant Benefit Plan
all matching contributions and other funding requirements normally funded by
Matrix, GSAC, Brown or any Subsidiary, and required to fund all benefits to
which the employees of the Brown Parties have or shall become vested or
otherwise entitled by reason of their service for the relevant Brown Party prior
to the Closing, or otherwise by reason of their own contributions to such
Benefit Plans prior to the Closing.
(c) [Intentionally Omitted]
(d) Assignment of Certain Subsidiary Assets. Prior to the Closing,
Brown shall cause each Subsidiary to execute and deliver to Brown a Bill of Sale
and Assignment in a form reasonably
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satisfactory to the Parties (the "Subsidiary Bill of Sale"), pursuant to which
the Subsidiaries will assign and transfer to Brown as a dividend, for no
additional consideration, all of their respective assets and properties,
tangible and intangible, wherever situated, other than their Excluded Assets,
effective as of a time immediately prior to the Closing.
2.6 Allocation of Purchase Price. The Parties agree that the Purchase
Price shall be allocated among the Assets in the manner set forth on Exhibit D
---------
attached hereto.
3. Closing.
3.1 Closing. The closing of the transactions contemplated in this
Agreement ("Closing") shall take place at the offices of Greenebaum Doll &
McDonald PLLC, 3300 National City Tower, Louisville, Kentucky 40202, at 1:00
P.M., local time.
3.2 Closing Date. The Closing shall occur on August 31, 1999 if all of
the conditions set forth in Section 7 have been fulfilled by such date. If all
of such conditions have not been fulfilled by such date, and subject to the
termination rights provided for in Section 8.1, then the Closing shall take
place (a) on such other date which is two business days after the Party
obligated to fulfill such conditions shall have notified the other Parties that
the last of such conditions has been satisfied or waived, or (b) on such other
date as the Parties may agree (the "Closing Date").
4. Representations and Warranties of Brown, GSAC and Matrix. Brown,
GSAC and Matrix, jointly and severally, hereby represent and warrant as of the
Effective Date and the date of this Agreement to Caldwell and Caldwell Tanks as
follows:
4.1 Authority; Consents; Enforcement; Noncontravention.
(a) Authority of Brown, GSAC and Matrix; Binding Effect. This
Agreement has been duly executed and delivered by Brown, GSAC and Matrix and
constitutes, and each and every agreement and instrument executed by Brown, GSAC
and Matrix in connection herewith, including without limitation, the Broad
Street Property Agreement and the Fayetteville Road Property Agreement
contemplated in Section 6.17, and the Environmental Work Plan contemplated in
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Section 7.1(u) (collectively, the "Ancillary Documents"), will constitute, the
legal, valid and binding obligation of Brown, GSAC and Matrix, enforceable
against them in accordance with their respective terms. Brown, GSAC and Matrix
have the absolute and unrestricted right, power, authority and capacity,
corporate or otherwise, to execute and deliver this Agreement and the Ancillary
Documents, and to perform their respective obligations under this Agreement and
the Ancillary Documents. Brown is a corporation duly organized, validly
existing and in good standing under the laws of the State of Georgia. Matrix is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. GSAC is a corporation duly organized, validly
existing and in good standing under the laws of the State of Oklahoma. Neither
Brown, GSAC nor Matrix needs to give any notice to, make any filing with, or
obtain any authorization, declaration, consent or approval of any Governmental
Body in order to consummate the transactions contemplated herein and in the
Ancillary Documents, other than the filing of any releases under the UCC to the
extent required to effect the transactions contemplated in this Agreement, and
other than the consents or approvals from Governmental Bodies that are parties
to any of the WIP Contracts or the Other Work-in-Process Contracts required for
the assignment and transfer of those contracts to Caldwell as contemplated in
Section 1.1. Brown has, and at all times has had, full corporate power and
authority to own and lease its assets and properties as and where such assets
and properties are now owned and leased, and to conduct its businesses as and
where such businesses have been and are now being conducted. Set forth on
Schedule 4.1(a) are true and complete copies of the Articles or Certificate of
Incorporation and Bylaws of each Brown Party, as amended through the date
hereof.
(b) Noncontravention. Neither the execution and delivery of this
Agreement or the Ancillary Documents by Brown, GSAC or Matrix, nor their
compliance with or fulfillment of the terms, conditions and provisions hereof or
thereof, will (i) violate any Legal Requirement or Order applicable to Brown,
GSAC, any Subsidiary or Matrix (or their respective businesses), or any
provision of their Articles or Certificate of Incorporation or Bylaws; or (ii)
with notice, the passage of time or both, conflict with, result in a breach of,
constitute a default under, result in the acceleration of, or create in any
Person the right to accelerate, terminate, modify or cancel, any contract,
agreement, lease, license, Governmental Authorization, instrument, arrangement
or commitment to which Brown, GSAC, any Subsidiary or Matrix is a party or by
which it or any of
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their respective assets or properties are bound, or (iii) result in the
imposition or creation of any Encumbrance upon or with respect to any of the
assets or properties owned or used by any Brown Party (except for the Excluded
Assets other than the Broad Street Property and the Fayetteville Road Property,
which shall remain subject to the lien of the Bank Agreement after the Closing),
or (iv) require any notice under any contract, agreement, lease, Order, license,
instrument, arrangement or commitment to which Brown, GSAC, any Subsidiary or
Matrix is a party or by which it or they are bound or to which any of its or
their respective assets or properties are subject (other than the consent
required under the Bank Agreement, which shall be obtained by Matrix at its
expense prior to the Closing); or (v) require the approval, consent,
authorization or act of, or the making by any Brown Party, GSAC or Matrix of any
declaration, filing or registration with, any Person, other than the releases of
UCC Financing Statements referred to above and the consent required under the
Bank Agreement, other than, in the case of (iv) and (v) above, any notices to or
consents or approvals from the other parties to any of the WIP Contracts or the
Other Work-in-Process Contracts required for the assignment and transfer of the
Contracts to Caldwell as contemplated in Section 1.1.
4.2 Qualification of Brown Parties in Other States. Each Brown Party
is duly qualified to transact business as a foreign corporation, and is in good
standing, in the jurisdictions set forth on Schedule 4.2. Neither the nature of
the business of, nor the character and location of the assets and properties
owned or leased by, any Brown Party makes qualification of it as a foreign
corporation necessary under the laws of any jurisdiction other than as set forth
on Schedule 4.2.
4.3 Ownership of Brown and GSAC. GSAC holds of record and owns
beneficially all of the issued and outstanding capital stock of Brown, free and
clear of all Encumbrances. Matrix holds of record and owns beneficially all of
the issued and outstanding capital stock of GSAC, free and clear of all
Encumbrances. Brown holds of record and owns beneficially all of the issued and
outstanding capital stock of each of the Subsidiaries, free and clear of all
Encumbrances. Brown does not, directly or indirectly, (a) own, of record or
beneficially, any outstanding voting securities or other equity interests in any
Person other than the Subsidiaries, or (b) "Control" any Person which is
involved in or relates to Brown or its businesses other than the Subsidiaries.
As used in this Agreement, "Control" of a Person means the power, direct or
indirect, to direct or cause the direction
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of the management and policies of such Person, whether by ownership of
securities, contract, law or otherwise.
4.4 [Intentionally Omitted].
4.5 Financial Statements. Attached as Schedule 4.5 are the consolidated
balance sheet, statement of income and statement of EBITDA as at February 28,
1998 and for each of the fiscal quarters then ended commencing with the fiscal
quarter ended May 31, 1994, of Brown and its Subsidiaries prepared in accordance
with GAAP as included in the consolidated and consolidating financial statements
of Matrix which were audited by Ernst & Young LLP (the "Financial Statements").
The balance sheet included in the Financial Statements as of February 28, 1999,
is hereinafter referred to as the "Interim Balance Sheet." The Financial
Statements (including the notes thereto, if any) represent actual, bona fide
transactions, were prepared in accordance with GAAP, present fairly the
consolidated financial condition of Brown and the Subsidiaries as of the
respective dates of the Financial Statements, and the consolidated results of
operations and changes in EBITDA of Brown and the Subsidiaries for such periods,
and are consistent with the books and records of Brown and the Subsidiaries: (i)
subject in the case of any period ended prior to May 31, 1998, to normal year-
end adjustments (all of which are reflected in the Financial Statements for the
year ended May 31, 1994, 1995, 1996, 1997 and 1998), and (ii) in the case of the
Financial Statements as of February 28, 1999, subject to normal year-end
adjustments, in each case which shall not be material, individually or in the
aggregate, and lack footnotes and other presentation items that, if presented,
would not differ materially from those included in the balance sheet included in
the Financial Statements for the fiscal year ended May 31, 1998 (the
"Acquisition Balance Sheet"). No financial statement of any Person other than
Brown and the Subsidiaries is required by GAAP to be included in the Financial
Statements.
4.6 Absence of Undisclosed Liabilities. None of the Brown Parties has any
debts, obligations, duties or liabilities of any nature, whether known or
unknown, whether fixed, absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, whether matured or unmatured, whether
asserted or unasserted and whether due or to become due (collectively,
"Liability"), except as shown (and in the amounts shown) on the face of the
Interim Balance Sheet
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(rather than the notes thereto) or on Schedule 4.6. From the date of the Interim
Balance Sheet through the date hereof, except as shown on Schedule 4.6, the
Brown Parties have not incurred or become subject to any Liability, other than
Liabilities incurred in the Ordinary Course of Business of such Brown Parties,
all of which have been paid in full in the Ordinary Course of Business or are
reflected on the regular books of account of the Brown Parties, and none of
which is inconsistent with the representations, warranties and covenants of
Brown, GSAC and Matrix contained in this Agreement or with any other provisions
of this Agreement.
4.7 Absence of Certain Events. Since May 31, 1998, no Brown Party has,
except as set forth on the Schedules referred to in this Section 4.7:
(a) issued, sold, purchased or redeemed any stock, bonds, debentures,
notes or other corporate securities, or issued, sold or granted any option,
warrant or right to acquire any thereof;
(b) except as set forth on Schedule 4.7(b), waived or released any
debts, claims, rights of value or suffered any extraordinary loss or written
down the value of any inventories or other assets or written down or off any
receivable in excess of $25,000 for any single transaction or series of related
transactions, or in excess of $50,000 in the aggregate;
(c) except as set forth on Schedule 4.7(c), made any capital
expenditures or capital commitments in excess of $25,000 for any single
transaction or series of related transactions, or in excess of $50,000 in the
aggregate;
(d) except as set forth on Schedule 4.7(d), made any change in the
business or operations or the manner of conducting the business or operations of
that Brown Party, other than changes in the Ordinary Course of Business of that
Brown Party;
(e) except as set forth on Schedule 4.7(e), and except for the
termination of the employees not to be offered employment by Caldwell or
Caldwell Tanks following the Closing as contemplated in Section 6.13(e),
terminated, placed on probation, disciplined, warned, or
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experienced any material dissatisfaction with, any officer or supervisory
employee of that Brown Party;
(f) except as set forth on Schedule 4.7(f), experienced any
resignations of, or had any disputes involving the employment or agency
relationship with any of, the employees or agents of that Brown Party, other
than normal turn-over of the employees of the Brown Parties incurred in the
Ordinary Course of Business which has not had a material adverse effect on the
business, operations or prospects of any of the Brown Parties;
(g) suffered any casualty, damage, destruction or loss to any of its
properties in excess of $25,000 for any one event or in excess of $50,000 in the
aggregate;
(h) declared, set aside or paid any dividends or distributions in
respect of shares of its capital stock;
(i) except as set forth on Schedule 4.7(i), and except for severance
payments made to the employees terminated prior to the Closing but not to be
offered employment by Caldwell or Caldwell Tanks following the Closing as
contemplated in (e) above, paid or obligated itself to pay any bonuses or
extraordinary compensation to, or made any increase (except increases in the
Ordinary Course of Business of that Brown Party) in the compensation payable (or
to become payable by it) to, any of the directors, officers, employees, agents
or other representatives of that Brown Party;
(j) terminated or amended or suffered the termination or amendment of
any material contract, lease, agreement, license or other instrument to which it
is or was a party;
(k) except as set forth on Schedule 4.7(k), adopted, modified or
amended any plan or agreement listed on Schedule 4.14 so as to increase the
benefits due the employees of any Brown Party under any such plan or agreement;
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(l) made any loan or advance to any Person (except a normal travel or
other reasonable expense advance to its officers and employees);
(m) except as set forth on Schedule 4.7(m) and except for effects of
the environmental matters disclosed on Schedule 4.16(a), suffered any material
adverse change in such Brown Party's business, financial condition, results of
operations, assets or properties from that reflected in the Acquisition Balance
Sheet;
(n) except as set forth on Schedule 4.7(n), subjected or agreed to
subject any of its assets or properties to any Encumbrances (other than
Permitted Encumbrances) or to any other similar charge of any nature whatsoever;
(o) except as set forth on Schedule 4.7(o), paid any funds to any of
its officers or directors, or to any family member of any of them, or any Person
in which any of the foregoing have any direct or indirect interest, except for
the payment of installments of annual salaries and the bonuses accrued in the
Ordinary Course of Business of that Brown Party through the date hereof;
(p) disposed of or agreed to dispose of any of its properties or
assets other than in the Ordinary Course of Business of that Brown Party, and
except as contemplated in this Agreement;
(q) except as set forth on Schedule 4.7(q), entered into any
transactions other than in the Ordinary Course of Business of that Brown Party
(except for the transactions contemplated in this Agreement);
(r) made any change in such Brown Party's accounting principles,
methods or practices;
(s) except as set forth on Schedule 4.7(s), entered into any
agreement, contract, lease or license (or series of related agreements,
contracts, leases or licenses) involving consideration or goods and/or services
having a value in excess of $25,000, or having a term greater than one (1) year
in length;
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(t) delayed or postponed the payment of any accounts payable or other
Liabilities outside the Ordinary Course of Business of such Brown Party;
(u) except as set forth on Schedule 4.7(u), been a party to any other
occurrence, event, incident, action, failure to act, or transaction outside the
Ordinary Course of Business of that Brown Party, except where the same would not
subject any of the Brown Parties to a penalty, fine or judgment in excess of
$5,000 in any one case of $20,000 in the aggregate or render any of the Brown
Agreements void or unenforceable, result in any forfeiture of title to any of
its properties or assets or otherwise have a material adverse effect on the
business of any of the Brown Parties; or
(v) not granted credit to any material customer or other Person on
terms more favorable than the terms on which credit has been extended to such
customer or other Person in the past, nor materially changed the terms of any
credit previously extended;
(w) except as set forth on Schedule 4.7(w), entered into any agreement
or commitment (whether or not in writing) to do any of the foregoing;
and each Brown Party has:
(x) used its best efforts to preserve its business and organization,
and to keep available, without entering into any binding agreement, the services
of its employees (other than those employees terminated by the Brown Parties and
not to be offered employment by Caldwell or Caldwell Tanks following the Closing
as contemplated in (e) above), and to preserve the goodwill of its customers and
others having business relationships with it; and
(y) continued its business and maintained its assets, properties,
operations, books of account, and other books, records and files in the Ordinary
Course of Business.
4.8 Books of Account, Records and Minute Books. Prior to the execution
of this Agreement, Brown made available to Caldwell and Caldwell Tanks for their
examination the books of account, records (including without limitation,
computer data and records) and minute books of
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each Brown Party. Such books of account and records are true and complete in all
respects, have been maintained in accordance with sound business practices and
the requisite requirements of section 13(b)(2) of the Exchange Act (regardless
of whether or not that Brown Party is subject to such section) including the
maintenance of an adequate system of internal controls. The minute books of the
Brown Parties contain accurate and complete records of all meetings held of, and
corporate action taken by, the stockholders, the board of directors and the
committees of the board of directors of the Brown Parties, and no meeting of any
such stockholders, board of directors or committee has been held for which
minutes have not been prepared and are not contained in such minute books. There
has been duly and completely entered in the books and records of each Brown
Party all monies due or to become due from or to or owing by that Brown Party,
and all Liabilities of that Brown Party by reason of any transaction, matter, or
cause whatsoever. No changes or additions to the books and records of any Brown
Party have been made as of or for the period prior to the date such books and
records were first made available to Caldwell and Caldwell Tanks, and nothing
which should be set forth in said books and records, if prepared in the usual
and customary manner of that Brown Party, has occurred from the date such books
and records were first made available to Caldwell and Caldwell Tanks, except for
such changes, additions or events which have been made or have occurred, as the
case may be, in the Ordinary Course of Business of that Brown Party, or as
permitted or disclosed in Section 4.7 and Section 6.2 hereof. At the Closing all
books and records shall be in the possession of that Brown Party and shall be
delivered to Caldwell as contemplated in this Agreement.
4.9 Certain Payments. Neither Brown, GSAC, any Subsidiary nor Matrix,
nor to the knowledge of Brown, GSAC, any Subsidiary and Matrix any other Person
associated with or acting on behalf of Brown, GSAC, any Subsidiary or Matrix,
has directly or indirectly made any contribution or paid or delivered, or
committed itself or himself to pay or deliver, any fee, commis sion, gift,
bribe, rebate, payoff, influence payment or kickback, regardless of form,
whether in money, property or services, or any other payment of money or items
of property or services, however characterized, to any Person that in any manner
is related to the business or operations of any Brown Party, and which Brown,
GSAC, any Subsidiary, Matrix or such other Person, or any of them, knows, or has
reason to believe, were or are illegal under any Legal Requirement.
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4.10 Compliance With Legal Requirements; Governmental Authorizations.
(a) Compliance With Legal Requirements. Except as set forth in a
Schedule referred to in this Section 4.10, and except (in the case of (1) and
(2) below) with respect to (v) the Benefit Plans and related trust agreements
and annuity contracts of the Brown Parties, and all "group health plans" (as
defined in section 4980B(g)(2) of the Code) of the Brown Parties (which are the
subject of Section 4.14(c) and Section 4.14(h), respectively), (w) environmental
matters (which are the subject of Section 4.16), (x) labor matters (which are
the subject of Section 4.20), (y) Orders (which are the subject of Section
4.21(b)), and (z) Tax matters (which are the subject of Section 4.28):
(1) Each Brown Party is, and at all times has been, in full
compliance with each Legal Requirement that is or was applicable to it or to
the conduct or operation of its business or the ownership or use of any of its
assets, except where the failure to be in such compliance would not subject
that Brown Party to a penalty, fine or judgment in excess of $5,000 in any one
case of $20,000 in the aggregate or render any of the Brown Agreements void or
unenforceable, result in any forfeiture of title to any of its properties or
assets or otherwise have a material adverse effect on the business, operations
or prospects of that Brown Party;
(2) No event has occurred, nor does any circumstance exist,
that (with or without notice or lapse of time) (A) may constitute or result in
a violation by any Brown Party of, or a failure on the part of any Brown Party
to comply with, any Legal Requirement, or (B) may give rise to any obligation
on the part of any Brown Party to undertake, or to bear all or any portion of
the cost of, any remedial action of any nature, except for such violations or
obligations, if any, that would not subject that Brown Party to a penalty,
fine or judgment in excess of $5,000 in any one case of $20,000 in the
aggregate or render any of the Brown Agreements void or unenforceable, result
in any such forfeiture of title to any of its properties or assets or
otherwise have a material adverse effect on the business of that Brown Party;
and
(3) No Brown Party has received any notice or other
communication (whether oral or written) from any Person regarding (A) any
actual, alleged, possible or potential violation of, or failure to comply
with, any Legal Requirement, or (B) any actual, alleged, possible or
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potential obligation on the part of that or any other Brown Party to
undertake, or to bear all or any portion of the cost of, any remedial action
of any nature.
(b) Governmental Authorizations. Schedule 4.10(b) contains a complete
and accurate list of each Governmental Authorization that is held by any Brown
Party or that otherwise relates to the business of, or to any of the assets
owned or used by, any Brown Party. The Governmental Authorizations listed in
Schedule 4.10(b) collectively constitute all of the Governmental Authorizations
necessary to permit the Brown Parties to lawfully conduct and operate their
businesses in the manner currently conducted and operated, and to permit the
Brown Parties to own and use their assets in the manner in which they currently
own and use such assets. There will not be a material adverse effect on or with
respect to such Governmental Authorizations or the Brown Parties' (or, following
the Closing with respect to the Governmental Authorizations that are included in
the Assets, Caldwell's) maintenance of the same as a result of the consummation
of the transactions contemplated in this Agreement or in the Ancillary
Documents. Each Governmental Authorization listed or required to be listed in
Schedule 4.10(b) is valid and in full force and effect. Except as set forth in
Schedule 4.10(b):
(1) Each Brown Party is, and at all times has been, in full
compliance with all of the terms and requirements of each Governmental
Authorization identified or required to be identified in Schedule 4.10(b),
except where the failure to be in such compliance would not subject that Brown
Party to a penalty, fine or judgment in excess of $5,000 in any one case or
$20,000 in the aggregate or render any of the Brown Agreements void or
unenforceable, result in any forfeiture of title to any of its properties or
assets or otherwise have a material adverse effect on the business of that
Brown Party;
(2) No event has occurred, nor does any circumstance exist,
that may (with or without notice or lapse of time) (A) constitutes or could
result directly or indirectly in a violation of or a failure to comply with
any term or requirement of any Governmental Authorization listed or required
to be listed in Schedule 4.10(b), or (B) could result directly or indirectly
in the revocation, withdrawal, suspension, cancellation, or termination of, or
any
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modification to, any Governmental Authorization listed or required to be
listed in Schedule 4.10(b);
(3) No Brown Party has received any notice or other
communication (whether oral or written) from any Governmental Body or any
other Person regarding (A) any actual, alleged, possible or potential
violation of or failure to comply with any term or requirement of any
Governmental Authorization, or (B) any actual, proposed, possible, or
potential revocation, withdrawal, suspension, cancellation, termination of, or
modification to any Governmental Authorization; and
(4) All applications required to have been filed for the
renewal of the Governmental Authorizations listed or required to be listed in
Schedule 4.10(b) have been duly filed on a timely basis with the appropriate
Governmental Bodies, and all other filings required to have been made with
respect to such Governmental Authorizations have been duly made on a timely
basis with the appropriate Governmental Bodies.
4.11 Computer Systems; Software.
(a) Condition of Computers. All computers and computer systems owned,
leased or used by the Brown Parties (including, software, communication links
and storage media) (collectively, "Computers") comply with and are used in
accordance with all Legal Requirements, and to the Knowledge of Brown, GSAC and
Matrix: (1) are in operating order and fulfill the purposes for which they were
acquired, established and are currently used; (2) have adequate capacity for the
present needs of the Brown Parties and (taking into account the extent to which
the computer systems are expandable, but without considering the future plans
for the businesses and Assets of Brown or the Subsidiaries by Caldwell following
the Closing other than the operation of their respective businesses in the
Ordinary Course of Business, consistent with past practices) foreseeable future
needs; (3) have adequate security, back-ups, duplication, hardware and software
support and maintenance (including emergency cover) and trained personnel to
ensure: (A) that breaches of security, errors and breakdowns are kept to a
minimum; and (B) that no material disruption will be caused to the Brown Parties
(or, following the Closing, Caldwell) or any material
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part thereof in the event of a breach of security, error or breakdown; (4) are
properly established and documented by written technical descriptions and
manuals so as to enable them to be used and operated by any reasonably qualified
personnel; and (5) are under the sole control of the Brown Parties, are located
at branch locations of the Brown Parties, are not shared with, used by or on
behalf of or accessible by any other Person and, except for software properly
licensed to the Brown Parties, are owned by the Brown Parties.
(b) Condition of Software. All software used on or stored or resident
in the Computers ("Software"): (1) performs in accordance with its
specifications and does not contain any defect or feature which may materially
adversely affect its performance or the performance of any other software in the
future (providing such future software is otherwise compatible); (2)(A) in the
case of Software that is necessary for the businesses or operations of the Brown
Parties or is otherwise material to those businesses or operations
(collectively, "Core Software"), is lawfully held and used and does not infringe
the intellectual property rights of any Person and all copies held have been
lawfully made, and (B) in the case of Software that is not Core Software, is
lawfully held and used and does not infringe the intellectual property rights of
any Person and all copies held have been lawfully made, except where such
unlawful holding or use, such infringement or such unlawful copying would not,
individually or in the aggregate, have a material adverse affect on any of the
Brown Parties or, following the Closing, Caldwell; and (3) as to copyrights in
connection with the Core Software: (A) such Core Software written or
commissioned by any Brown Party is owned exclusively by that Brown Party, no
other person has the rights therein or rights to the use or copies of the Core
Software or source codes, and complete written listings and written copies of
the source codes for the Core Software are in the possession of the Brown
Parties; (B) standard packaged software, is licensed to the Brown Parties on an
express or implied license which does not require the Brown Parties to make any
further payments, is not terminable without the consent of the relevant Brown
Party and which imposes no material restrictions except as to copying or the use
or transfer of the Core Software; and (C) all other Core Software is licensed to
the Brown Parties on the terms of written licenses which require payment by the
Brown Parties of a fixed annual license fee at a rate not exceeding that paid in
calendar 1998, except for reasonable fees for software support, require the
Brown Parties to make no further or other payments, are not terminable, except
for failure
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to pay the license fee, without the consent of the Brown Parties, and impose no
material restrictions except as to copying or the use or transfer of the Core
Software.
(c) Ownership of Software. No Software owned by or licensed to any
Brown Party is used by or licensed or sublicensed by that Brown Party to any
other Person.
(d) Operation of Computers. No Person is in a position, by virtue of
its or his rights in, knowledge of or access to the Computers, to prevent or
impair the proper and efficient functioning of the Computers or to demand any
payment in excess of any current license fee or in excess of reasonable
remuneration for services rendered, or to impose any onerous condition, in order
to preserve the proper and efficient functioning of the Computers in the future.
The employees of the Brown Parties are adequately trained to enable them to use
and operate the Computers to perform the functions for which they were hired.
All data and records stored by electronic means are capable of ready access
through the Computers. The transactions contemplated in this Agreement will not
cause any license agreements as referred to in this Section 4.11 to be
terminated or the terms varied or any rates or royalties payable to be
increased.
4.12 Condition and Sufficiency of Assets. With due consideration for
their age, the buildings, plants, facilities, structures and equipment of the
Brown Parties are structurally sound, are free from defects (patent and latent),
have been maintained in accordance with normal industry practice, are in good
operating condition and repair (subject to normal wear and tear), and are
suitable for the purposes for which they presently are used and presently
proposed to be used, and none of such buildings, plants, facilities, structures
or equipment is in need of maintenance or repairs except for ordinary, routine
maintenance and repairs that are not material in nature or cost. The buildings,
plants, structures, and equipment of the Brown Parties are sufficient for the
continued conduct of their businesses, and the proposed business of Caldwell
after the Closing in substantially the same manner as conducted prior to the
Closing. The Brown Parties own or lease all buildings, machinery, equipment,
and other tangible property necessary for the conduct of the business of the
Brown Parties as presently conducted and as presently proposed to be conducted
by Caldwell.
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4.13 Contracts. Schedule 4.13 (or other Schedules that refer to
particular subsections of this Section 4.13) contains a complete and accurate
list of the following types and forms of contracts and other agreements to which
any of Brown Parties is a party or by which any of its assets or properties are
bound:
(a) any agreement (or group of related agreements), written or oral,
for the lease of personal property to or from any Person providing for lease
payments in excess of $25,000 per annum or which may not be terminated by the
relevant Brown Party (or, following the Closing, Caldwell) without penalty or
payment on 30 days, or less, notice;
(b) any agreement (or group of related agreements) for the purchase or
sale of real property, improvements, raw materials, commodities, equipment,
supplies, products, or other real or personal property, or for the furnishing or
receipt of services, the performance of which shall (i) extend over a period of
more than one year, (ii) result in a material loss to any Brown Party (or,
following the Closing, Caldwell), or (iii) involve consideration in excess of
$250,000;
(c) any agreement concerning a partnership or limited partnership,
joint venture, limited liability company or limited liability partnership,
including any agreement with or involving such an organization which provides
for a sharing of profits, losses, costs or liabilities of the Brown Parties (or
any of them) or such organization with any other Person;
(d) any agreement granting a power of attorney to any Person;
(e) any contract, arrangement or commitment with a labor union or
association or other employee group;
(f) any easements, right-of-way agreements or other similar agreements
or rights;
(g) any agreements, commitments or pledges for civic or charitable
donations;
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(h) any agreement involving a warranty, guaranty or other similar
understanding with respect to contractual performance extended by any Brown
Party;
(i) any agreement (or group of related agreements) under which any
Brown Party has created, incurred, assumed or guaranteed any indebtedness for
borrowed money, or any capitalized lease obligation, in excess of $25,000 or
under which it has imposed an Encumbrance on any of its assets or properties,
tangible or intangible;
(j) any agreement containing covenants by any Brown Party not-to-
compete in any line of business with any Person, or restricting the customers
from whom, or the area in which, any Brown Party may solicit or conduct
business, or any contract, arrangement or commitment involving a covenant of
confidentiality;
(k) any agreement under which it has advanced, lent or borrowed any
amount of money or property to or from any of its directors, officers,
shareholders or employees (other than advances to employees for expenses in the
Ordinary Course of Business);
(l) any agreement under which the consequences of a default or
termination could have a material adverse effect on the business, financial
condition, results of operations, assets or properties of any Brown Party;
(m) any agreement not made in the Ordinary Course of Business of any
Brown Party; or
(n) any other agreement (or group of related agreements) the
performance of which involves consideration in excess of $50,000 or has a term
in excess of one year.
Brown has delivered to Caldwell a correct and complete copy of each WIP
Contract, of each Other Work-in-Process Contract, of each Other Agreement, of
the Orion Contract, the Plate Roll Contract and the Corrosion Specialties
Contract, and of each other written agreement listed in Schedule 4.13,
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and a written summary setting forth the terms and conditions of each oral
agreement referred to in Schedule 4.13.
4.14 Employee Benefits.
(a) Benefit Plans. Except as set forth on Schedule 4.14(a), no Brown
Party is a "Plan Sponsor" (as defined in section 3(16)(B) of ERISA) or an "ERISA
Affiliate" (which shall mean, with respect to any Brown Party, any other Person
that, together with such Brown Party, would be treated as a single employer
under section 414 of the Internal Revenue Code of 1986, as amended (the
"Code")), and no Brown Party nor an ERISA Affiliate contributes or is obligated
to contribute to any "employee pension benefit plans" ("Pension Plans") or
"employee welfare benefit plans" ("Welfare Plans") (as described in section 3(2)
and (1), respectively, of ERISA), or to any "multiemployer plan" ("Multiemployer
Plans") (as defined in either section 3(37) of ERISA or section 414(f) of the
Code). Except as set forth on Schedule 4.14(a), no Brown Party nor an ERISA
Affiliate has any obligation, arrangement, practice, plan or agreement to
provide present or future benefits, other than salary, as compensation for
services rendered, to any of its present or former employees, officers,
directors, agents or representatives, nor any voluntary employees' beneficiary
association under section 501(c)(9) of the Code ("VEBA") whose members include
employees or former employees of any Brown Party or an ERISA Affiliate, nor any
obligation, arrangement, practice, plan or agreement providing stock options,
stock purchase, deferred compensation, bonus, severance, "fringe benefits" (as
described in section 132 of the Code), or any other employee benefits of any
nature whatsoever ("Compensation Plans"). Welfare Plans, Pension Plans and
Compensation Plans are collectively referred to as "Benefit Plans." The
consummation of the transactions contemplated in this Agreement shall not result
in the payment, vesting or acceleration of any benefit or right under any
Benefit Plan.
(b) Funding Method for Pension Plans. The funding method used in each
of the Pension Plans subject to Title I, Subtitle B, Part 3 of ERISA ("DB Plan")
is acceptable under ERISA, there is no accumulated funding deficiency, whether
or not waived, with respect to any DB Plan, and no event has occurred or
circumstance exists that may result in any accumulated funding deficiency as of
the last day of the current plan year of any DB Plan. The Brown Parties and
each ERISA
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Affiliate has met the minimum funding standard, and has made all contributions
required, under section 302 of ERISA and section 412 of the Code. Brown has
delivered to Caldwell a true and complete copy of the most recent actuarial
report with respect to each DB Plan identified on Schedule 4.14(a) and such
report fairly presents the financial condition and the results of operations of
each such DB Plan in accordance with GAAP. Since the last valuation date of each
DB Plan no event has occurred or circumstance exists that would increase the
amount of benefits under any DB Plan or that would cause the excess of plan
assets over benefit liabilities (as defined in section 4001 of ERISA) to
decrease, or the amount by which benefit liabilities exceed assets to increase.
If each DB Plan identified on Schedule 4.14(a) were terminated as of the Closing
Date, it would have sufficient assets so as to be terminated in a "standard
termination" (as described in section 4041(b) of ERISA). No Brown Party is
liable for any contributions or excise taxes due and unpaid under any Pension
Plans as of the date hereof. There is no Liability, and there are no
circumstances which may arise which would give rise to any such Liability, of
any Brown Party or Caldwell to the Pension Benefit Guaranty Corporation ("PBGC")
under Title IV of ERISA.
(c) Compliance of Benefit Plans With ERISA and Code. Each Brown Party
has performed all of its obligations under all Benefit Plans and has made
appropriate entries in its financial records and statements for all Liabilities
under all Benefit Plans that have accrued but are not due. All of the Benefit
Plans and any related trust agreements or annuity contracts (or any funding
instrument) comply currently, and have complied in the past, with the provisions
of ERISA and the Code, where required in order to be a qualified plan under
section 401(a) of the Code and tax exempt under section 501 of the Code, and all
other Legal Requirements, and any applicable collective bargaining agreements.
No event has occurred or circumstance exists that will or could give rise to
disqualification or loss of tax exempt status of any such Plan or trust, or
result in any Tax, excise Tax, fines or penalties, or amounts required to be
paid under any settlement with the U.S. Department of Labor, the IRS or the
PBGC. Neither the Brown Parties, nor any Person who is a fiduciary or otherwise
has a trust relationship with a Benefit Plan, has any liability to the Benefit
Plan, the IRS, the Department of Labor, or the PBGC with respect to a Benefit
Plan, or any Liability under sections 502 or 4071 of ERISA. All contributions
and payments made or accrued with respect to all Benefit Plans are deductible
under the Code. No amount, or any asset of any Benefit Plan, is subject to Tax
as unrelated business taxable income. All filings required by ERISA and the
Code
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as to each Benefit Plan have been timely filed, and all notices and disclosures
to participants required by either ERISA or the Code have been timely provided.
Other than routine Claims for benefits submitted by participants or
beneficiaries in the ordinary course, no Claim against, or Proceeding involving
any Benefit Plan is pending or Threatened. No payment that is owed or may become
due to any director, officer, employee or agent of any Brown Party will be non-
deductible to such Brown Party or subject to Tax under sections 280G or 4999 of
the Code, nor shall such Brown Party be required to "gross-up" or otherwise
compensate any such person because of the imposition of any Tax or excise Tax on
a payment to such person.
(d) Multiemployer Plans. Schedule 4.14(d) contains, for each
Multiemployer Plan, as of its last valuation date, the amount of potential
withdrawal liability of each Brown Party, calculated according to information
made available pursuant to section 4221(e) of ERISA. Neither the Brown Parties
nor an ERISA Affiliate has received any notice from any Multiemployer Plan that
it is in reorganization or is insolvent, that increased contributions may be
required to avoid a reduction in plan benefits or the imposition of any Tax,
excise Tax, or that such plan intends to terminate or has terminated. None of
the Brown Parties nor an ERISA Affiliate has withdrawn from any Multi-Employer
Plan with respect to which there is any outstanding Liability as of the date
hereof. No event has occurred or circumstance exists that presents a risk of the
occurrence of any withdrawal from, or the participation, termination,
reorganization or insolvency of, any Multi-Employer Plan that could result in
any Liability of any Brown Party or Caldwell to a Multi-Employer Plan. No
Multiemployer Plan to which any Brown Party or an ERISA Affiliate contributes or
has contributed is a party to any pending merger or asset or liability transfer
or is subject to any Proceeding brought by the PBGC.
(e) Post-Retirement Benefits. Schedule 4.14(e) contains a calculation
of the Liability of each Brown Party for post-retirement benefits for its past
and present officers, employees and directors (or their dependents or
beneficiaries) other than pensions, made in accordance with Financial Accounting
Statement 106 of the Financial Accounting Standards Board, regardless of whether
such Brown Party is required by this Statement to disclose such information.
Except as set forth on Schedule 4.14(e) or as required by section 601 et seq. of
ERISA and section 4980B of the Code, no Brown Party provides, or is obligated to
provide, health or welfare benefits (including
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without limitation, retiree medical insurance coverage or retiree life insurance
coverage), or pension benefits, for any retired or former officer, employee or
director, or any dependents or beneficiaries of the same, nor is it obligated to
provide any health or welfare benefits to any active employee following such
employee's retirement or other termination of service. Each Brown Party has the
right to modify and terminate benefits to retirees or their dependents or
beneficiaries (other than Pension Plan benefits) with respect to both retired
and active officers, employees and directors. To the extent of such health,
welfare or pension benefits to retirees (or their dependents or beneficia ries),
Schedule 4.14(e) sets forth the name, pension benefit, pension option election,
medical insurance coverage, and life insurance coverage for such retirees,
dependents or beneficiaries.
(f) Administration and Cost of Plans. Each of the Welfare Plans and
Pension Plans has been administered in compliance with the requirements of the
Code and ERISA and all reports required by any governmental agency with respect
to each such Plan have been timely filed. No statement, either written or oral,
has been made by any Brown Party or an ERISA Affiliate to any Person with regard
to any Benefit Plan that was not in accordance with the Benefit Plan and that
could have an adverse economic consequence to the Brown Parties or Caldwell.
Each Benefit Plan, and the participation by the Brown Parties in each Benefit
Plan, other than a DB Plan, can be terminated within 30 days without payment of
any additional contribution or amount and without the vesting or acceleration of
any benefits promised by such Plan. No event has occurred or circumstance
exists that could result in a material increase in premium costs of Benefit
Plans that are insured, or a material increase in benefit costs of such Plans
that are self-insured. None of the Brown Parties nor an ERISA Affiliate has
filed a notice of intent to terminate any current Plan or has adopted any
amendment to treat a Plan as terminated. The PBGC has not instituted
Proceedings to treat any DB Plan or Multiemployer Plan as terminated. No event
has occurred or circumstance exists that may constitute grounds under section
4041 of ERISA for the termination of, or the appointment of a trustee to
administer, any DB Plan or Multiemployer Plan. No amendment has been made, or
is reasonably expected to be made, to any DB Plan that has required or could
require the provision of security under section 307 of ERISA or section
401(a)(29) of the Code.
(g) No Prohibited Transactions. None of the Brown Parties, nor any of
their respective directors, officers or employees who are fiduciaries, nor any
other fiduciary of any of the Pension
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Plans or Welfare Plans, has engaged in any transaction in violation of section
406 of ERISA (for which no exemption exists under section 408 of ERISA) or any
"prohibited transaction" (as defined in section 4975(c)(1) of the Code) for
which no exemption exists under sections 4975(c)(2) or 4975(d) of the Code.
(h) Compliance of Health Plans. Each "group health plan" (as defined
in section 4980B(g)(2) of the Code) maintained by any of the Brown Parties, or
in which any of them participated, has been administered in compliance with the
continuation coverage and notice requirements of section 601 et seq. of ERISA,
section 4980B of the Code (and the regulations there under) and all other Legal
Requirements.
(i) PBGC Premiums. Each Brown Party, and each ERISA Affiliate, has
paid all premiums (and interest charges and penalties for late payment if
applicable) due to the PBGC with respect to each of the DB Plans described in
Schedule 4.14(a) in each plan year thereof for which such premiums are required.
There has been no "reportable event" (as defined in section 4043 of ERISA and
the regulations of the PBGC thereunder) with respect to any of the DB Plans
described in Schedule 4.14(a).
(j) Copies of Documents. Brown has furnished to Caldwell and Caldwell
Tanks a true and complete copy of all documents that set forth the terms of each
Benefit Plan described on Schedule 4.14(a) and the summary plan description
which any Brown Party or an ERISA Affiliate is obligated to prepare for such
plans, and all summaries and descriptions furnished to participants and
beneficiaries regarding Benefit Plans for which a summary plan description is
not required. In addition, Brown has furnished to Caldwell:
(1) a written description of any Benefit Plan, program or
practice that is not otherwise in writing;
(2) all personnel, payroll, and employment manuals and
policies;
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(3) all collective bargaining agreements pursuant to which
contributions have been made or obligations incurred (including both pension
and welfare benefits) by any Brown Party and all collective bargaining
agreements pursuant to which contributions are being made or obligations are
owed by any Brown Party;
(4) all registration statements filed with respect to any
Benefit Plan;
(5) all insurance policies purchased by or to provide benefits
under any Benefit Plan;
(6) all contracts with third party administrators, actuaries,
investment managers, consultants, and other independent contractors that
relate to any Benefit Plan;
(7) [Intentionally Omitted];
(8) a favorable determination letter as to the qualification
under the Code of each of the Pension Plans and each amendment thereto that
has been issued by the IRS and a true and correct copy of each such
determination letter has been delivered to Caldwell;
(9) all notifications to employees of their rights under
section 601 et seq. of ERISA and section 4980B of the Code; provided, in the
case of notices to multiple employees that are substantially identical, Brown
has only furnished to Caldwell and Caldwell Tanks a sample of such
notifications;
(10) the annual return (Form 5500 or Form 990 series) filed in
each of the most recent three plan years with respect to each Benefit Plan,
including all schedules thereto and the opinions of independent accountants;
(11) all notices that were given by any Brown Party, an ERISA
Affiliate or any Benefit Plan to the IRS, the PBGC, the Department of Labor or
any participant or
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beneficiary, pursuant to Legal Requirements, within the four years preceding
the date of this Agreement, including notices that are expressly mentioned
elsewhere in this Section 4.14;
(12) all notices that were given by the IRS, the PBGC or the
Department of Labor to any Brown Party, an ERISA Affiliate or any Benefit Plan
within the four years preceding the date of this Agreement;
(13) with respect to each Pension Plan and VEBA, the most recent
determination letter for each Plan; and
(14) with respect to each DB Plan, the Form PBGC-1 filed for
each of the three most recent plan years.
(k) Termination. Each Brown Party can unilaterally terminate, or
terminate its participation in, each of the Benefit Plans identified on Schedule
4.14(a) without incurring any material Liabilities.
4.15 Employees and Independent Contractors.
(a) List of Employees. Included as Schedule 4.15(a) is a true and
complete list of all officers and employees of the Brown Parties on the date
hereof along with the amount of the current annual salaries or hourly rate, job
title and vacation accrued, along with a full and complete description of any
commitments to such officers and employees with respect to compensation payable
hereafter. No Brown Party has, because of past practices or previous
commitments with respect to its officers or employees, established any rights or
expectations on the part of such officers or employees to receive additional
compensation inconsistent with past practices with respect to any period after
the date hereof. None of the officers or employees of the Brown Parties has
given notice to the Brown Parties that he or she intends to leave their
employment. Except as set forth in Schedule 4.15, no Brown Party has reason to
believe that any of its officers or employees shall leave such employment. Set
forth on Schedule 4.15 is a description of all claims made against the Brown
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Parties by their officers or employees within the last 24 months. No officer or
employee of the Brown Parties is employed outside the United States of America.
(b) Agreements With Employees and Independent Contractors. Except as
set forth on Schedule 4.15, no Brown Party is a party to or bound by any oral or
written:
(1) employee collective bargaining agreement, employment or
independent contractor agreement (other than agreements terminable by that
Brown Party without premium or penalty on notice of 30 days or less under
which the only monetary obligation of that Brown Party is to make current wage
or salary payments and provide current employee benefits), consulting,
advisory or service agreement, deferred compensation agreement,
confidentiality agreement or covenant not to compete; or
(2) contract or agreement with any officer or employee (other
than employment agreements disclosed in response to clause (1) or excluded
from the scope of clause (1)), agent, or attorney-in-fact of that Brown Party.
(c) Confidentiality and Noncompetition Agreements. No officer,
employee or director of any Brown Party is a party to, or is otherwise bound by,
any agreement or arrangement, including any confidentiality, noncompetition, or
proprietary rights agreement, between such officer, employee or director and any
other Person that in any way materially adversely affects or will materially
adversely affect (1) the performance of his or her duties as an officer,
employee or director of that Brown Party, or (ii) the ability of that Brown
Party to conduct its business, including any such agreement or arrangement with
Matrix, GSAC or Brown.
4.16 Environmental Matters.
(a) Compliance with Environmental Laws. Except as set forth on
Schedule 4.16(a), each Brown Party is, and at all times has been, in full
compliance with, and has not been and is not in violation of or liable under,
any Environmental Law, except for such violations or non-compliance (each an
"Immaterial Violation"), if any, that would (i) not subject any Brown Party or
Caldwell to,
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or cause any Brown Party or Caldwell to suffer or incur, any penalty, fine,
judgment, remediation, cost or other Damage in excess of $5,000 for any one
violation or event of non-compliance or $20,000 in the aggregate, (ii) not
render any of the Brown Agreements void or unenforceable, (iii) not result in
any forfeiture of title to any of the properties or assets of any Brown Party or
Caldwell, and (iv) not otherwise have a material adverse effect on the business
or operations of any Brown Party or Caldwell. To the knowledge of GSAC, Matrix
and Brown, there has not occurred nor does there now exist any Immaterial
Violations of any Environmental Laws by any Brown Party or Caldwell, except to
the extent set forth on Schedule 4.16(a). Neither Brown, GSAC, any Subsidiary
nor Matrix has any basis to expect, nor has any of them or any other Person for
whose conduct they are or may be held to be responsible received, any actual or
Threatened Order, notice, or other communication from any Governmental Body or
private citizen acting in the public interest, or from the current or prior
owner or operator of any Facilities, of any actual or potential violation or
failure to comply with any Environmental Law, or of any actual or Threatened
obligation to undertake or bear the cost of any Environmental, Health, and
Safety Liabilities with respect to any of the Facilities or any other properties
or assets (whether real, personal, or mixed) in which any Brown Party now has or
has had an interest, or with respect to any property or Facility at or to which
Hazardous Materials were generated, manufactured, refined, transferred,
imported, used, or processed by Brown, GSAC, any Subsidiary or Matrix, or any
other Person for whose conduct they are or may be held responsible, or from
which Hazardous Materials have been transported, treated, stored, handled,
transferred, disposed, recycled or received.
(b) No Claims. Except as set forth on Schedule 4.16(a), there are no
pending or, to the knowledge of Brown, GSAC, any Subsidiary and Matrix,
Threatened Claims, Encumbrances, Proceedings or other restrictions of any
nature, resulting from any Environmental, Health, and Safety Liabilities or
arising under or pursuant to any Environmental Law, with respect to or affecting
any of the Facilities or any other properties or assets (whether real, personal,
or mixed) in which any Brown Party has or has had an interest.
(c) No Orders. Except as set forth on Schedule 4.16(a), neither Brown,
GSAC, any Subsidiary nor Matrix has any basis to expect, nor has either of them
or any other Person for whose conduct they are or may be held responsible,
received, any citation, directive, inquiry, notice, order,
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summons, warning, or other communication that relates to Hazardous Activity,
Hazardous Materials, or any alleged, actual, or potential violation or failure
to comply with any Environmental Law, or of any alleged, actual, or potential
obligation to undertake or bear the cost of any Environmental, Health, and
Safety Liabilities with respect to any of the Facilities or any other properties
or assets (whether real, personal, or mixed) in which any Brown Party now has or
has had an interest, or with respect to any property or Facility to which
Hazardous Materials generated, manufactured, refined, transferred, imported,
used or processed by Brown, GSAC, any Subsidiary or Matrix, or any other Person
for whose conduct they are or may be held responsible, have been transported,
treated, stored, handled, transferred, disposed, recycled or received.
(d) No Environmental Liabilities. Except as set forth on Schedule
4.16(a), neither Brown, GSAC, any Subsidiary nor Matrix, or any other Person for
whose conduct they are or may be held responsible, has any Environmental,
Health, and Safety Liabilities with respect to the Facilities or with respect to
any other properties and assets (whether real, personal, or mixed) in which any
Brown Party (or any of its predecessors) now has or has had an interest, or at
any property geologically or hydrologically adjoining the Facilities or any such
other property or assets, except for such liabilities (each an "Immaterial
Liability"), if any, that would not result in any of the events or circumstances
described in Subclauses (i) through (iv) inclusive of Section 4.16(a), above. To
the knowledge of GSAC, Matrix and Brown, there has not occurred nor does there
now exist any Immaterially Liabilities of any Brown Party, except to the extent
set forth on Schedule 4.16(a).
(e) No Hazardous Materials. Except as set forth on Schedule 4.16(a),
there are no Hazardous Materials present on or in the Environment at the
Facilities or at any geologically or hydrologically adjoining property,
including any Hazardous Materials contained in barrels, above or underground
storage tanks, landfills, land deposits, dumps, equipment (whether moveable or
fixed) or other containers, either temporary or permanent, and deposited or
located in land, water, sumps, or any other part of the Facilities or such
adjoining property, or incorporated into any structure therein or thereon.
Neither Brown, GSAC, any Subsidiary nor Matrix, or any other Person for whose
conduct they are or may be held responsible, or to the knowledge of Brown, GSAC,
any Subsidiary and Matrix, any other Person, has permitted or conducted, or is
aware of, any Hazardous Activity conducted with respect to the Facilities or any
other properties or assets (whether real,
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personal, or mixed) in which any Brown Party now has or has had an interest,
except such activities as are and were in full compliance with all applicable
Environmental Laws.
(f) No Release. Except as set forth on Schedule 4.16(a), there has
been no Release or, to the knowledge of Brown, GSAC, any Subsidiary or Matrix,
Threat of Release, of any Hazardous Materials at or from the Facilities or at
any other locations where any Hazardous Materials were generated, manufactured,
refined, transferred, produced, imported, used or processed from or by the
Facilities, or from or by any other properties and assets (whether real,
personal, or mixed) in which any Brown Party now has or has had an interest, or
any geologically or hydrologically adjoining property, whether by Brown, GSAC,
any Subsidiary, Matrix or any other Person.
(g) Delivery of Reports, etc. GSAC has delivered to Caldwell true and
complete copies and results of all reports, studies, analyses, tests or
monitoring possessed or initiated by Brown, GSAC, any Subsidiary or Matrix
pertaining to Hazardous Materials or Hazardous Activities in, or under, the
Facilities, or concerning compliance by Brown, GSAC, any Subsidiary and Matrix
or any other Person for whose conduct they are or may be held responsible with
Environmental Laws.
4.17 Insurance. Schedule 4.17 sets forth the following information
with respect to each insurance policy (including policies providing property,
casualty, liability, and workers' compensation coverage and bond and surety
arrangements) to which any Brown Party has been a party, a named insured, or
otherwise the beneficiary of coverage at any time within the past five (5)
years: (a) the name, address, and telephone number of the agent; (b) the name of
the insurer, the name of the policyholder, and the name of each covered insured;
(c) the policy number and the period of coverage; (d) the scope (including an
indication of whether the coverage was on a claims made, occurrence, or other
basis) and amount (including a description of how deductibles and ceilings are
calculated and operate) of coverage; and (e) a description of any retroactive
premium adjustments or other loss-sharing arrangements. To the extent any such
insurance policy includes "occurrence" based coverages: (1) the policy is legal,
valid, binding, enforceable and in full force and effect; (2) the consummation
of the transactions contemplated in this Agreement shall not cause a loss of any
coverage or other rights (if any) of the Brown Parties thereunder and relating
to losses, events or other circumstances occurring or existing prior to the
Closing or which are otherwise
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Retained Obligations; (3) the policy has been issued by an insurer that is
financially sound and reputable; (4) no Brown Party is in breach or default
(including with respect to the payment of premiums or the giving of notices),
and no event has occurred which, with notice or the lapse of time, would
constitute such a breach or default, or permit termination, modification, or
acceleration, under the policy; (5) the policy does not provide for any
retrospective premium adjustment or other experience-based liability on the part
of any Brown Party; (6) taken together, the policies provide adequate insurance
coverage for the assets and the operations of the Brown Parties for all risks
normally insured against by a Person carrying on the same business or businesses
as the Brown Parties; and (7) no party to the policy has repudiated any
provision thereof. Each Brown Party has been covered during the past five (5)
years by insurance in scope and amount customary and reasonable for the
businesses in which it has engaged during the aforementioned period. Schedule
4.17 describes any self-insurance arrangements affecting the Brown Parties.
Schedule 4.17 further lists and describes all claims for payment made by any
Brown Party within the previous five (5) years under any such insurance policy
listed on that Schedule. Brown has furnished to Caldwell copies of each
insurance policy listed on Schedule 4.17.
4.18 Intellectual Property.
(a) Definition of Intellectual Property. The term "Intellectual
Property" as used in this Agreement shall mean and include all of the following:
(1) the names Brown Steel Contractors, Inc., Brown Tanks, Inc., Aqua Tanks,
Inc., Brown Steel Services, Inc., all fictional business names, trading names,
registered and unregistered trademarks, service marks and applications
(collectively, "Marks"); (2) all patents, patent applications and inventions and
discoveries that may be patentable (collectively, "Patents"); (3) all original
works of authorship fixed in any tangible medium protected by the Copyright Act,
17 U.S.C. (S)101 et seq. (collectively, "Copyrights"); (4) all rights in mask
works (collectively, "Rights in Mask Works"); and (5) all know-how, trade
secrets, confidential information, customer lists, technical information, data,
process technology, plans, forecasts, drawings and blue prints (collectively,
"Trade Secrets").
(b) Ownership of Intellectual Property. The Brown Parties own or have
the right to use all of the Intellectual Property necessary or desirable for the
operation of their businesses as they are currently conducted. Except for the
Intellectual Property licensed by the Brown Parties as a
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licensee, the Brown Parties own all right, title, and interest in and to all of
the Intellectual Property, free and clear of all liens, security interests,
charges, encumbrances, equities, and other adverse claims, and have the right to
use all of such Intellectual Property without payment to a third party.
(c) Patents. Set forth on Schedule 4.18(c) is a complete and accurate
list and summary description of all Patents owned or used by the Brown Parties.
Except as disclosed on Schedule 4.18(c): (1) all of the issued Patents are
currently in compliance with all applicable Legal Requirements (including
payment of filing, examination, and maintenance fees and proofs of working or
use), are valid and enforceable, and are not subject to any maintenance fees or
taxes or actions falling due within 90 days after the Closing Date; (2) no
Patent has been or is now involved in any interference, reissue, reexamination,
or opposition proceeding and, to the knowledge of the Brown Parties, GSAC and
Matrix, there is no potentially interfering patent or patent application of any
third party; (3) no Patent is infringed or, to the knowledge of Brown, GSAC, the
Subsidiaries and Matrix, has been challenged or threatened in any way; (4) none
of the products manufactured and sold, nor any process or know-how used, by the
Brown Parties infringes or is alleged to infringe any patent or other
proprietary right of any other Person; and (5) all products made, used, or sold
under the Patents have been marked with the proper patent notice.
(d) Marks. Set forth on Schedule 4.18(d) is a complete and accurate
list and summary description of all Marks. Except as disclosed on Schedule
4.18(d): (1) The Brown Parties are the owners of all right, title, and interest
in and to each of the Marks, free and clear of all liens, security interests,
charges, encumbrances, equities, and other adverse claims; (2) all Marks that
have been registered with the United States Patent and Trademark Office are
currently in compliance with all formal laws and regulations (including the
timely post-registration filing of affidavits of use and incontestability and
renewal applications), are valid and enforceable, and are not subject to actions
falling due within 90 days after the Closing Date; (3) no Mark has been or is
now involved in any opposition, invalidation, cancellation or infringement
action and, to the knowledge of Brown, GSAC, the Subsidiaries and Matrix, no
such action is threatened against any of the Marks; (4) none of the Marks used
by the Brown Parties infringes or is alleged to infringe any trade name,
trademark or service mark of any third party, nor, to the knowledge of Brown,
GSAC, the Subsidiaries and Matrix, is there any potentially interfering
trademark or trademark application of any other Person;
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and (5) all products and materials containing a Mark bear the proper federal
registration notice where permitted by law.
(e) Copyrights. Set forth on Schedule 4.18(e) is a complete and
accurate list and summary description of all Copyrights. Except as disclosed on
Schedule 4.18(e): (1) Each Brown Party is the owner of all right, title, and
interest in and to each of the Copyrights, free and clear of all Encumbrances
and other adverse claims; (2) all the Copyrights have been registered and are
currently in compliance with formal legal requirements, are valid and
enforceable, and are not subject to any taxes or actions falling due within 90
days after the date of Closing; (3) no Copyright is infringed or to the
knowledge of Brown, GSAC, the Subsidiaries and Matrix, has been challenged or
threatened in any way; (4) none of the subject matter of any of the Copyrights
infringes or is alleged to infringe any copyright of any third party or is a
derivative work based on the work of a third party.
(f) Trade Secrets. To the knowledge of GSAC, Matrix and Brown, (i)
each Trade Secret, and the documentation relating to such Trade Secret is
current, accurate, and sufficient in detail and content to identify and explain
it and to allow its full and proper use without reliance on the knowledge or
memory of any individual, (ii) Matrix, GSAC, Brown and the Subsidiaries have
taken all reasonable precautions to protect the secrecy, confidentiality, and
value of the Trade Secrets, (iii) the Brown Parties have good title and an
absolute and exclusive right to use the Trade Secrets, (iv) the Trade Secrets
are not part of the public knowledge or literature, and have not been used,
divulged or appropriated either for the benefit of any other person or to the
detriment of the Brown Parties, and (v) no Trade Secret is subject to any
adverse claim has been challenged or threatened in any way.
(g) Royalties. Schedule 4.18(g) contains a complete and accurate list
and summary description, including any royalties paid or received by the Brown
Parties, of all agreements or contracts relating to any of the Intellectual
Property to which any of Brown Parties is a party or by which it is bound,
except for any license implied by the sale of a product and perpetual, paid-up
licenses for commonly available programs with a value of less than $10,000 under
which such
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Brown Party is the licensee. There are no outstanding and to the knowledge of
Brown, GSAC, the Subsidiaries and Matrix, no threatened disputes or
disagreements relating to any such agreement.
(h) Employee Agreements. Except as set forth in Schedule 4.18(h), all
former and current employees of the Brown Parties have executed written
agreements with such Brown Parties that assign to such Brown Parties all rights
to any inventions, improvements, discoveries, or information relating to the
business of such Brown Parties. No employee of any Brown Party has entered into
any agreement that restricts or limits in any way the scope or type of work in
which the employee may be engaged or requires the employee to transfer, assign,
or disclose information concerning his work to anyone other than Brown.
4.19 Inventory. All Inventory of the Brown Parties, consists of a
quality and quantity usable and salable in the Ordinary Course of Business of
the Brown Parties, except for obsolete items and items of below-standard
quality, all of which have been written off or written down to net realizable
value on the accounting records of the Brown Parties as of the date hereof, as
the case may be. All Inventories not written off have been priced at the lower
of cost or market on a first in, first out basis. The quantities of each item
of Inventory (whether raw materials, work-in-process, or finished goods) are not
excessive, but are reasonable in the present circumstances of the Brown Parties.
The Inventory obsolescence policies of the Brown Parties are appropriate for the
nature of the products sold and the marketing methods used by the Brown Parties,
the reserve for Inventory obsolescence contained in the financial books and
records of the Brown Parties as of the date hereof fairly reflects the amount of
obsolete Inventory as of the date hereof, and the reserve for Inventory
obsolescence to be contained in the books and records of the Brown Parties as of
the Closing Date will fairly reflect the amount of obsolete Inventory as of the
Closing Date. No items included in the Inventories are pledged as collateral or
held by the Brown Parties on consignment from another Person.
4.20 Labor Relations; Compliance. No Brown Party has been nor is it
now a party to any collective bargaining or other labor contract. There has not
been, there is not presently pending or existing, and to the knowledge of Brown,
GSAC, the Subsidiaries and Matrix there is not Threatened, (a) any strike,
slowdown, picketing, work stoppage or employee grievance process, (b)
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any Proceeding against or affecting any Brown Party relating to the alleged
violation of any Legal Requirement pertaining to labor relations or employment
matters, including any charge or complaint filed by an employee or union with
the National Labor Relations Board, the Equal Employment Opportunity Commission,
or any comparable Governmental Body, organizational activity, or other labor or
employment dispute against or affecting any Brown Party or its premises, or (c)
any application for certification of a collective bargaining agent. No event has
occurred or circumstance exists that could provide the basis for any work
stoppage or other labor dispute. There is no lockout of any employees by any
Brown Party, and no such action is contemplated by any Brown Party. Each Brown
Party has complied in all material respects with all Legal Requirements relating
to employment, equal employment opportunity, nondiscrimination, immigration,
wages, hours, benefits, collective bargaining, the payment of social security
and similar taxes, occupational safety and health, and plant closing. No Brown
Party is liable for the payment of any compensation, damages, taxes, fines,
penalties, or other amounts, however designated, for failure to comply with any
of the foregoing Legal Requirements.
4.21 Litigation; Compliance With Legal Requirements, Etc.
(a) Proceedings. Except as set forth on Schedule 4.21(a), and except
for (i) Claims or Proceedings against or involving any of the Benefit Plans of
the Brown Parties (which are the subject of Section 4.14(c)), (ii) Claims or
Proceedings resulting from any Environmental, Health and Safety Liabilities or
arising under or pursuant to any Environmental Law (which are the subject of
Section 4.16(b)), (iii) Proceedings against or affecting any Brown Party
relating to the alleged violation of any Legal Requirement pertaining to labor
relations or employment matters (which are the subject of Section 4.20(b)), and
(iv) Claims or Proceedings pending or proposed against any Brown Party relating
to any Taxes or assessments or any Claims or deficiencies with respect thereto
(which are the subject of Section 4.28(b)), there is no Claim or Proceeding
pending or, to the knowledge of Brown, GSAC, the Subsidiaries or Matrix,
Threatened, against or relating to any Brown Parties or its properties or
assets. Brown, GSAC, the Subsidiaries and Matrix do not know or have any
reasonable grounds to know of any basis or alleged basis for any such Claim or
Proceedings or of any governmental investigation relative to the Brown Parties,
its properties or assets, and no event has occurred, nor does any circumstance
exist, that may give rise to or serve as a basis for the commencement of any
such Claim or Proceedings. No event or condition of any
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nature which might have a material adverse effect on the business, financial
condition, results of operations or assets or properties of any Brown Party or,
following the Closing, Caldwell has occurred, exists or, to the knowledge of
Brown, GSAC, any Subsidiary or Matrix, is anticipated. To the knowledge of
Brown, GSAC, any Subsidiary and Matrix, no legislative or regulatory proposal
has been adopted or is pending which could have a material adverse effect on the
business, financial condition, results of operations or assets or properties of
any Brown Party or, following the Closing, Caldwell. The Proceedings listed on
Schedule 4.21(a) shall not have a material adverse effect on the business,
financial condition, results of operations or assets or properties of any Brown
Party or, following the Closing, Caldwell.
(b) Orders. Except as set forth in Schedule 4.21(b), (1) there is no
Order to which any Brown Party, or any of the assets owned or used by any Brown
Party, is subject; (2) Matrix and GSAC are not subject to any Order that relates
to the business of, or any of the assets owned or used by any Brown Party; and
(3) to the knowledge of Brown, GSAC, any Subsidiary and Matrix no officer,
director, agent, or employee of any Brown Party is subject to any Order that
prohibits such officer, director, agent, or employee from engaging in or
continuing any conduct, activity or practice relating to the business of any
Brown Party. Except as set forth in Schedule 4.21(b): (A) each Brown Party is,
and at all times has been, in full compliance with all of the terms and
requirements of each Order to which it, or any of the assets owned or used by
it, is or has been subject; (B) no event has occurred, nor does any circumstance
exist that may constitute or result in (with or without notice or lapse of time)
a violation of or failure to comply with any term or requirement of any Order to
which any Brown Party, or any of the assets owned or used by any Brown Party, is
subject; and (C) no Brown Party has received any notice or other communication
(whether oral or written) from any Governmental Body or any other Person
regarding any actual, alleged, possible, or potential violation of, or failure
to comply with, any term or requirement of any Order to which such Brown Party,
or any of the assets owned or used by such Brown Party, is or has been subject.
4.22 No Agent, Finder or Broker. No Brown Party has any Liability or
obligation, contingent or otherwise, to pay any fees or commissions to any
agent, broker or finder with respect to the transactions contemplated in this
Agreement or the Ancillary Documents.
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4.23 Products.
(a) Product Warranties. Each product manufactured, sold, leased or
delivered by the Brown Parties (or any of them) has been in conformity with all
applicable contractual commitments and all express and implied warranties, and
no Brown Party has Liability (nor is there any basis for any present or future
Proceedings against it or Caldwell giving rise to any Liability) for replacement
or repair thereof or other damages in connection therewith, subject only to the
reserve for product warranty claims set forth on the face of the Interim Balance
Sheet (rather than in any notes thereto) as adjusted for the passage of time
through the Closing Date in the Ordinary Course of Business of the Brown
Parties. No product manufactured, sold, leased or delivered by the Brown
Parties is subject to any guaranty, warranty, or other indemnity beyond the
applicable standard terms and conditions of sale or lease. Schedule 4.23(a)
includes copies of the standard terms and conditions of sale or lease for the
Brown Parties (containing applicable guaranty, warranty, and indemnity
provisions).
(b) Product Liability. No Brown Party has Liability (nor is there any
basis for any present or future Proceedings against it or Caldwell giving rise
to any Liability) arising out of any injury to individuals or property as a
result of the ownership, possession or use of any product manufactured, sold,
leased or delivered by any of the Brown Parties.
4.24 Real Property.
(a) Owned Real Property. Schedule 4.24(a) lists and describes briefly
all real property that any Brown Party owns. With respect to each such parcel of
owned real property:
(1) the relevant Brown Party has good and marketable title to
the parcel of real property, free and clear of any Encumbrances (other than
Permitted Encumbrances), except as set forth on Schedule 4.24(a)(1);
(2) there are no pending, or to the knowledge of Brown, GSAC,
the Subsidiaries and Matrix, Threatened condemnation Proceedings relating to
the property or other matters affecting materially and adversely the current
use, occupancy or value thereof;
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(3) the legal description for the parcel contained in the
deed thereof describes such parcel fully and adequately, the buildings and
improvements are located within the boundary lines of the described parcels of
land, are not in violation of applicable setback requirements, zoning laws and
ordinances (and none of the properties or buildings or improvements thereon
are subject to "permitted non-conforming use" or "permitted non-conforming
structure" classifications), and do not encroach on any easement which may
burden the land, and the land does not serve any adjoining property for any
purpose inconsistent with the use of the land, and the property is not located
within any flood plain or subject to any similar type restriction for which
any permits or licenses necessary to the use thereof have not been obtained;
(4) except for those environmental permits expressly
referred to in the Environmental Work Plan as having been received or applied
for by Brown after the Effective Date, all facilities have received all
Governmental Authorizations required in connection with the ownership or
operation thereof and have been operated and maintained in accordance with all
applicable Legal Requirements;
(5) there are no leases, subleases, licenses, concessions
or other agreements, written or oral, granting to any other Person the right
of use or occupancy of any portion of the parcel of real property;
(6) there are no outstanding options or rights of first
refusal to purchase the parcel of real property, or any portion thereof or
interest therein, other than the Broad Street Property Agreement and the
Fayetteville Road Property Agreement described in Section 6.17;
(7) there are no Persons (other than Brown) or Governmental
Bodies in possession of the parcel of real property, other than tenants under
any leases disclosed in Schedule 4.24(a) who are in possession of space to
which they are entitled;
(8) all facilities located on the parcel of real property
are supplied with utilities and other services necessary for the operation of
such facilities, including gas, electricity,
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water, telephone, sanitary sewer, and storm sewer, all of which services are
adequate in accordance with all applicable Legal Requirements and are provided
via public roads or via permanent, irrevocable, appurtenant easements
benefitting the parcel of real property; and
(9) each parcel of real property abuts on and has direct
vehicular access to a public road, or has access to a public road via a
permanent, irrevocable, appurtenant easement benefitting the parcel of real
property, and access to the property is provided by paved public right-of-way
with adequate curb cuts available.
(b) Leased Real Property. Schedule 4.24(b) lists and describes
briefly all real property leased or subleased to any Brown Party (and all
related lease and sublease agreements), and also identifies the leased or
subleased properties for which title insurance policies are to be procured in
accordance with Section 64. Brown has delivered to Caldwell correct and complete
copies of the leases and subleases listed in Schedule 4.24(b), as amended. With
respect to each lease and sublease agreement listed in Schedule 4.24(b):
(1) there are no disputes, oral agreements, or forbearance
programs in effect as to the lease or sublease;
(2) the relevant Brown Party has not assigned, transferred,
conveyed, mortgaged, deeded in trust or encumbered any interest in the
leasehold or subleasehold;
(3) all facilities leased or subleased thereunder have
received all approvals of Governmental Authorities (including licenses and
permits) required in connection with the operation thereof and have been
operated and maintained in accordance with all Legal Requirements;
(4) all facilities leased or subleased thereunder are
supplied with utilities and other services necessary for the operation of said
facilities; and
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(5) to the knowledge of Brown, GSAC, the Subsidiaries and
Matrix, the owner of the facility leased or subleased has good and
marketable title to the parcel of real property, free and clear of any
Encumbrance, except for installments of special assessments not yet
delinquent and recorded easements, covenants, and other restrictions which
do not materially impair the current use, occupancy, or value, or the
marketability of title, of the property subject thereto.
4.25 Similar Business Ownership. Except as set on Schedule 4.25,
neither GSAC, Matrix, any of its Affiliates other than Brown, nor any officer,
director or employee of Brown, GSAC, Matrix or such Affiliates, nor any family
member of any of them, (a) owns, directly or indirectly, any interest in, or is
an officer, director or principal of, any corporation, partnership,
proprietorship, association or other entity which is engaged in a business
similar to that of any Brown Party, which has conducted any business of any type
whatsoever with any Brown Party, or which is a party to any contract or
agreement to which any Brown Party is a party or to which it may be bound, (b)
has directly or indirectly engaged in any transaction with any Brown Party,
except transactions inherent in the capacity of such person as an officer,
director or employee, or (c) owns, directly or indirectly, in whole or in part,
any property, assets or rights, real, personal or mixed, tangible or intangible,
which are associated with or necessary for the use, operation or conduct of any
of the businesses, assets or operations of any Brown Party.
4.26 Status of Contracts and Leases. Each of the WIP Contracts, the
Other Work-in-Process Contracts, the Other Agreements, the Plate Roll Contract,
the Corrosion Specialties Contract, and the other contracts and agreements
listed on Schedule 4.13 (collectively, the "Brown Agreements"), constitutes a
legal, valid, binding and enforceable obligation of the parties thereto and is
in full force and effect, and except for those Brown Agreements which by their
terms shall expire prior to the Closing Date or are, with the prior written
consent of Caldwell, otherwise terminated prior to the Closing Date in
accordance with the provisions thereof, the transactions contemplated in this
Agreement shall not have a material adverse effect on the Brown Agreements, and
they shall continue in full force and effect thereafter, in each case without
breaching the terms thereof or resulting in the forfeiture or impairment of any
rights thereunder, and without the consent, approval or act of, or the making of
any filing with, any other Person. Each Brown Party has fulfilled and per-
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formed in all material respects its obligations under each of Brown Agreements,
and the Brown Parties are not in, or alleged to be in, breach or default under,
nor is there or is there alleged to be any basis for termination of, any of the
Brown Agreements and, to the knowledge of Brown, GSAC, the Subsidiaries and
Matrix, no other party to any of the Brown Agreements has breached or defaulted
thereunder, and no event has occurred and no condition or state of facts exists
which, with the passage of time or the giving of notice or both, would
constitute such a default or breach by Brown or, to the knowledge of Brown,
GSAC, the Subsidiaries and Matrix, by any such other party. No Brown Party is
currently renegotiating any of the Brown Agreements or paying liquidated damages
in lieu of performance thereunder. None of the Brown Agreements contains terms
unduly burdensome or harmful to any Brown Party. True and complete copies of
each of the Brown Agreements have heretofore been delivered to Caldwell and
Caldwell Tanks by Brown. No party has repudiated any provision of any Brown
Agreement, and there are no existing disputes between Brown and the other
parties thereto.
4.27 Studies. Brown has delivered to Caldwell and Caldwell Tanks
copies of all engineering studies, environmental impact reports or assessments
and other reports and studies that are material to the businesses of the Brown
Parties.
4.28 Taxes; Tax Returns; Tax Elections.
(a) Definition of Tax and Tax Return. The term "Tax" as used herein
shall mean any taxes, however denominated, including income tax, capital gains
tax, value-added tax, sales tax, property tax, gift tax, estate tax, capital
stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, sales, use, transfer, registration, alternative or
add-on minimum, estimated, or other tax of any kind whatsoever and any related
charge or amount (including any fine, penalty, interest or addition to tax),
imposed, assessed or collected by or under the authority of any Governmental
Body or payable pursuant to any tax-sharing agreement or any other arrangement
relating to the sharing or payment of any such tax, levy, assessment, tariff,
duty, deficiency or fee, including any interest, penalty, or addition thereto,
whether disputed or not. The term "Tax Returns" as used herein shall mean any
return (including any information return), report, declaration of estimated
Taxes, statement, schedule, notice, form, or other document or information filed
with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection
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with the determination, assessment, collection, or payment of any Tax or in
connection with the administration, implementation, or enforcement of or
compliance with any Legal Requirement relating to any Tax.
(b) Tax Returns. Each Brown Party has prepared, signed and filed all
Tax Returns required to be filed prior to the date hereof. Included in Schedule
4.28 are copies of all Tax Returns relating to income and franchise Taxes filed
by the Brown Parties since 1994. All Tax Returns were correct and complete in
all respects, and the Brown Parties have timely paid or accrued all Taxes or
installments thereof of every kind and nature whatsoever which were due and
owing on Tax Returns or which were or are otherwise due and owing under all
applicable Legal Requirements for any periods for which Tax Returns were due,
whether or not reflected on the Tax Returns. The provision for Taxes in the
Acquisition Balance Sheet is sufficient for the payment of all Taxes
attributable to all periods ended on or before May 31, 1998, and adequate
accruals have been made by the Brown Parties for all liabilities for Taxes
accruing since the date of the Acquisition Balance Sheet. There are no
Proceedings, investigations or Claims now pending, nor, to the knowledge of
Brown, GSAC, the Subsidiaries and Matrix, proposed against any Brown Party, nor
are there any matters under discussion with the IRS, or any other Governmental
Body, relating to any Taxes or assessments, or any Claims or deficiencies with
respect thereto. The federal income Tax Returns of the Brown Parties have not
been audited by the IRS or relevant state authorities, except as set forth on
Schedule 4.28(b).
(c) Tax Basis and Tax Attributes. Schedule 4.28(c) contains accurate
and complete description of the Brown Parties' respective basis in their assets.
The current and accumulated earnings and profits of the Brown Parties, its tax
carryovers and tax elections are described in Schedule 4.28(c). Except as set
forth on Schedule 4.28, the Brown Parties have no net operating losses, or other
tax attributes presently subject to limitation under sections 382, 383 or 384 of
the Code.
(d) Tax Elections. The Brown Parties are not United States real
property holding corporations within the meaning of section 897(c)(2) of the
Code during the applicable period specified in section 897(c)(1)(A)(ii) of the
Code, and Caldwell is not required to withhold tax on the
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purchase of the Assets by reason of section 1445 of the Code. Neither GSAC nor
Matrix is a "foreign person" within the meaning of section 1445 of the Code. The
Brown Parties are not "consenting corporations" under section 341(f) of the
Code. The Brown Parties have not agreed, nor are they required to make, any
adjustment under section 481(a) of the Code by reason of a change in accounting
method or otherwise.
(e) Withholdings. Each Brown Party has withheld proper and accurate
amounts from its employees in full and complete compliance with the Tax
withholding provisions of the Code and other applicable Legal Requirements, and
has filed proper and accurate federal, foreign, state and local Tax Returns and
reports for all years and periods (and portions thereof) for which any Tax
Returns were due with respect to employee income, income Tax withholding,
withholding Taxes, social security taxes and unemployment Taxes. All payments
due from any Brown Party on account of employee Tax withholdings, including
income Tax withholdings, social security Taxes or unemployment Taxes in respect
to years and periods (and portions thereof) ended on or prior to the date hereof
were paid prior to such date on or before their due date.
(f) Waivers of Statute of Limitations. Except as set forth on
Schedule 4.28(f), the Brown Parties have not waived any statute of limitations
in respect of Taxes or agreed to any extension of time with respect to any Tax
assessment or deficiency.
(g) Tax Agreements. Except as set forth on Schedule 4.28(g), the
Brown Parties are not, nor have they ever been, a party to any tax allocation or
sharing agreement. No Brown Party has any liability for the Taxes of any
corporation or other entity under Treas. Reg. (S)1.1502-6 (or any similar
provision of state, local, or foreign law), as a transferee or successor, by
contract, or otherwise.
4.29 Title to Properties. Except for real property (which is the
subject of Section 4.24), the Brown Parties have good and marketable title to
all of their properties, interests in properties and assets, tangible and
intangible, owned or used by them in the business of the Brown Parties
(excluding leased properties) including all of their vehicles, equipment,
furniture and fixtures.
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Except as set forth in Schedule 4.29, all such properties, interest in
properties and assets of the Brown Parties are free and clear of all
Encumbrances (other than Permitted Encumbrances).
4.30 Contract Price; Billings; Customer Offsets. Exhibit B attached
---------
hereto sets forth a correct and complete listing, by WIP Contract, of the
respective Contract Price and Billings through April 30, 1999, with respect to
all of the WIP Contracts. No customer under any WIP Contract has notified any
Brown Party that it intends to withhold or otherwise deduct any amounts that are
or may be owing by that customer to that Brown Party or to Caldwell following
the Closing, on account of or as a set off against any damages incurred by, or
indebtedness of that Brown Party owing to, that customer prior to the Closing.
Except as set forth on Exhibit B, no such customer has prepaid any Brown Party
---------
prior to the Closing for goods or services to be delivered or performed by any
Brown Party or Caldwell following the Closing.
4.31 Bank Accounts. Included as Schedule 4.31 is a true and complete
list of the name of each bank, brokerage firm and other financial institution
with which the Brown Parties have a depositary, trading, margin, purchase,
lending, borrowing or similar account, a line of credit, or from which the Brown
Parties are authorized to effect loans, or any safe deposit boxes, and the names
of all persons authorized to draw on such accounts, effect such loans or who
have access to such safe deposit boxes.
4.32 Brown Family Claims; Dissolution of Georgia Steel Fabricators.
None of the Brown Parties is currently indebted or otherwise obligated to Sample
D. Brown, Patricia W. Brown, Alan S. Brown, Mark A. Brown, Leslie C. Binion,
Matthew K. Brown or Patricia W. Brown, as trustee of the Sample D. Brown 12-30-
76 Trusts B, C and D (collectively, the "Browns"), or to any of their respective
personal representatives, heirs, successors or assigns, or any of them, for any
debts, obligations or liabilities of any nature, including without limitation,
any debts, obligations or liabilities arising under or pursuant to (a) the Stock
Purchase Agreement dated as of February 22, 1994, among Matrix, GSAC, Georgia
Steel Fabricators, Inc. and the Browns, or (b) the two Employment and Non-
Competition Agreements of even date therewith between Brown and Mark A. Brown
and Sample D. Brown, respectively (collectively, the "Employment Agreements").
The terms of the Employment Agreements have expired, and the only provisions
thereof which remain
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in effect and enforceable are Sections 4 through 16 inclusive. Georgia Steel
Fabricators Inc. was dissolved by GSAC prior to the date hereof in accordance
with applicable Georgia Legal Requirements, and no Brown Party is currently
indebted or otherwise obligated to any Person for any debts, obligations or
liabilities previously owing by Georgia Steel Contractors, Inc.
4.33 Completeness of Statement; Effect of Representations and
Warranties. No representation or warranty of Brown, GSAC or Matrix in this
Agreement contains any untrue statement of a material fact, omits any material
fact necessary to make such representation or warranty, under the circumstances
which it was made, not misleading, or contains any misstatement of a material
fact. Brown, GSAC and Matrix have disclosed all adverse facts known to them
relating to the representations and warranties. All representations and
warranties contained in this Section 4 were correct and complete as of the
Effective Date, are correct and complete as of the date of this Agreement and
shall be correct and complete in all material respects (or, with respect to
representations and warranties that are expressly subject to materiality or that
include a specific dollar threshold, in all respects) as of the Closing Date as
though made then with the Closing Date being substituted for the date hereof
throughout this Section 4. Reference to a document, agreement, matter or other
information in one Exhibit or Schedule shall be deemed a reference to such
document, agreement, matter or information in all other Exhibits or Schedules,
but only to the extent the information or facts required to be disclosed with
respect to such other Exhibits or Schedules are manifest from a reading of the
Exhibit or Schedule itself and not from a reading of the agreements or other
documents annexed thereto, referenced therein or that constitute a part thereof.
Nothing in any auditor's report to Brown, GSAC or Matrix shall be deemed
adequate to disclose an exception to a representation or warranty made herein.
Without limiting the generality of the foregoing, the mere listing (or inclusion
of a copy) of a document or other item shall not be deemed adequate to disclose
an exception to a representation or warranty made in this Agreement (unless the
representation or warranty has to do with the existence of the document or other
item itself). All of the representations and warranties made by Brown, GSAC and
Matrix are made with the knowledge, expectation, understanding and desire that
Caldwell and Caldwell Tanks place complete reliance thereon. Neither the
representations and warranties of Brown, GSAC and Matrix, nor the indem
nification obligations of Brown, GSAC and Matrix, shall be affected, qualified,
modified or deemed
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waived by reason of the fact that Caldwell or Caldwell Tanks knew or should have
known that any representation or warranty is or might be inaccurate in any
respect.
5. Representations and Warranties of Caldwell and Caldwell Tanks.
Caldwell and Caldwell Tanks, jointly and severally, hereby represent and warrant
as of the Effective Date and the date of this Agreement to Brown, Matrix and
GSAC as follows:
5.1 Corporate Status. Caldwell Tanks is a corporation duly
incorporated and existing under the laws of the Commonwealth of Kentucky, is in
good standing with the Department of State of the Commonwealth of Kentucky, and
is authorized to transact business in such Commonwealth. Caldwell is a limited
liability company duly organized and existing under the laws of the State of
Georgia, is in good standing with the Department of State (or its equivalent) to
the State of Georgia, and is authorized to transact business in that State.
They each have, and at all times have had, full corporate power and authority to
own and lease their properties as such properties are now owned and leased and
to conduct their businesses as and where such businesses have and are now being
conducted.
5.2 Authority; Consents; Enforcement; Noncontravention.
(a) Authority of Caldwell and Caldwell Tanks; Binding Effect. This
Agreement has been duly executed and delivered by Caldwell and Caldwell Tanks,
and constitutes the legal, valid and binding obligation of them, enforceable
against them in accordance with its terms. Caldwell and Caldwell Tanks have the
absolute and unrestricted right, power, authority and capacity to execute and
deliver this Agreement and to perform their obligations under this Agreement.
Caldwell and Caldwell Tanks do not need to give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any Governmental Body
in order to consummate the transactions contemplated in this Agreement.
(b) Noncontravention. Neither the execution and the delivery of
this Agreement or the Ancillary Documents by Caldwell or Caldwell Tanks, nor
their compliance with or the fulfillment of the terms, conditions and provisions
hereof or thereof, will (i) violate any Legal Requirement applicable to them,
any provision of their Articles of Incorporation or Bylaws; or (ii) with notice,
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the passage of time or both, conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, any contract, agreement, lease,
license, instrument, arrangement or commitment to which Caldwell or Caldwell
Tanks is a party or by which any of its assets or properties are bound, or (iii)
result in the imposition of or creation of any Encumbrance upon or with respect
to any of the assets or properties owned or used by Caldwell or Caldwell Tanks
(other than such Encumbrances (if any) on the Assets as may be created pursuant
to Caldwell's or Caldwell Tanks' financing of the Purchase Price), or (iv)
require any notice under any agreement, contract, lease, license, instrument, or
other arrangement to which Caldwell or Caldwell Tanks is a party or by which it
is bound or to which any of its assets or properties are subject; or (v) require
the approval, consent, authorization or act of, or the making by Caldwell or
Caldwell Tanks of any declaration, filing or registration with, any Person.
5.3 No Agent, Finder or Broker. Caldwell and Caldwell Tanks have no
Liability or obligation, contingent or otherwise, to pay any fees or commissions
to any agent, broker or finder with respect to the transactions contemplated in
this Agreement.
5.4 [Intentionally Omitted]
5.5 Completeness of Statement; Effect of Representations and
Warranties. No representation or warranty of Caldwell or Caldwell Tanks in this
Agreement contains any untrue statement of a material fact, omits any material
fact necessary to make such representation or warranty, under the circumstances
which it was made, not misleading, or contains any misstatement of a material
fact. Caldwell and Caldwell Tanks have disclosed all adverse facts known to them
relating to the representations and warranties. The representations and
warranties of Caldwell and Caldwell Tanks contained in this Section 5 were
correct and complete on the Effective Date, are correct and complete as of the
date of this Agreement and shall be correct and complete in all material
respects as of the Closing Date as though made then with the Closing Date being
substituted for the date hereof throughout this Section 5. All of the
representations and warranties made by Caldwell and Caldwell Tanks are made with
the knowledge, expectation, understanding and desire that Brown, Matrix and GSAC
place complete reliance thereon. Neither the representations and warranties of
Caldwell or Caldwell Tanks, nor the indemnification obligations of Caldwell or
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Caldwell Tanks, shall be affected, qualified, modified or deemed waived by
reason of the fact that Brown, Matrix or GSAC knew or should have known that any
representation and warranty is or might be inaccurate in any respect.
5.6 Litigation. There is no action, suit, inquiry, proceeding or
investigation by or before any Governmental Body or by or on behalf of any other
Person pending or, to Caldwell's or Caldwell Tanks' knowledge, Threatened,
against or involving Caldwell or Caldwell Tanks or any of their Affiliates (i)
which alone or in the aggregate would, if adversely, determined have a material
adverse effect on the ability of Caldwell or Caldwell Tanks to perform its
obligations to Brown, Matrix and GSAC under this Agreement and the transactions
contemplated hereby, or (ii) which questions or challenges the validity of this
Agreement or any action taken or to be taken by Caldwell or Caldwell Tanks
pursuant to this Agreement or in connection with the transactions contemplated
hereby.
6. Covenants of the Parties.
6.1 No Negotiation. Until such time, if any, as this Agreement is
terminated pursuant to Section 8, neither Brown, GSAC nor Matrix, nor any
representative of Brown, GSAC or Matrix, shall, nor shall they permit any of
their Affiliates to, (a) directly or indirectly, entertain, solicit, initiate,
accept or encourage any inquiries, offers or proposals from, discuss or
negotiate with, provide any non-public information to, or consider the merits of
any unsolicited inquiries or proposals from, any Person (other than Caldwell or
Caldwell Tanks) relating to any transaction involving the sale or lease of the
business or assets (other than in the Ordinary Course of Business of the Brown
Parties) of the Brown Parties, or any of the capital stock of the Brown Parties,
or any merger, consolidation, business combination, or similar transaction
involving the Brown Parties, or (b) participate in any discussions or
negotiations regarding, furnish any information with respect to, assist or
participate in, or facilitate in any other manner any effort or attempt by any
Person to do or seek, any of the foregoing. Brown, GSAC and Matrix will notify
Caldwell Tanks immediately if any Person makes any proposal, offer, inquiry, or
contact with respect to any of the foregoing.
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6.2 Operations of Brown Parties Pending Closing. Brown, GSAC and
Matrix covenant and agree that from the Effective Date through the Closing Date,
without the prior written consent of Caldwell (which consent will not be
unreasonably withheld), the Brown Parties shall:
(a) continue the business and operations of the Brown Parties
substantially in the same manner as heretofore, not change any of the accounting
principles followed, not undertake any other transactions or enter into any
other contracts, commitments or arrangements other than in the Ordinary Course
of Business of the Brown Parties, use their reasonable best efforts to preserve
the present business and organization of the Brown Parties and to keep available
for the benefit of Caldwell (without entering into any binding agreement) the
services of their employees, and to preserve for the benefit of Caldwell the
goodwill of their customers, suppliers and others having business relationships
with them;
(b) not renew, extend, modify, terminate or waive any right under any
of the Brown Agreements, and not enter into, renew, extend, modify, terminate or
waive any right under any other material lease, contract or other instrument,
except in the Ordinary Course of Business of the Brown Parties;
(c) not increase the rate or change the nature of the compensation
payable to any of their employees, except in the Ordinary Course of Business of
the Brown Parties;
(d) not allow any of their assets and properties to be subject to any
Encumbrance (other than Permitted Encumbrances), or to be disposed of outside
the Ordinary Course of Business of the Brown Parties;
(e) except as otherwise provided in Section 4.17, maintain their
existing insurance coverages, subject to variations in amounts required by the
Ordinary Course of Businesses of the Brown Parties;
(f) confer with Caldwell concerning operational matters of a material
nature;
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(g) otherwise report periodically to Caldwell concerning the status
of the business, operations and finances of the Brown Parties;
(h) not amend or modify their articles or certificate of
incorporation or bylaws;
(i) maintain their corporate existence and good standing in their
respective state of incorporation and their qualifications as foreign
corporations in the jurisdictions set forth on Schedule 42;
(j) maintain their licenses, permits and franchises, and not take any
action, or refrain from taking any action, which could cause any license, permit
or franchise to be revoked, restricted or suspended;
(k) not authorize for issue or issue additional shares of capital
stock, nor grant any option, warrant or right to purchase or acquire capital
stock of itself;
(l) not declare or pay any dividend, nor, directly or indirectly,
redeem, purchase or otherwise acquire any of its securities;
(m) not make any investment in any other corporation, association,
partnership, joint venture or other business organization;
(n) not make any capital expenditures in excess of $150,000 for any
single item of equipment or other property;
(o) not incur or agree to incur any indebtedness for borrowed money;
(p) maintain all of its properties in good working order and repair
(ordinary wear and tear excepted) and take all steps reasonably necessary to
maintain its assets (exclusive of the Excluded Assets other than the Broad
Street Property and the Fayetteville Road Property) for Caldwell's use and
benefit;
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(q) not enter into any contract, commitment or arrangement to merge,
combine or consolidate with or into any other corporation or entity, or enter
into any other contract, commitment or arrangement to sell, transfer, or dispose
of any of its assets to any person or entity other than in the Ordinary Course
of Business;
(r) not increase the quantities of inventories, raw materials or
spare parts maintained by the Brown Parties to levels that are materially
greater than the levels historically maintained by the Brown Parties in the
Ordinary Course of Business;
(s) operate their businesses in compliance in all material respects
with all Legal Requirements, Governmental Authorizations and Orders applicable
to them; and
(t) not enter into any agreement or commitment to do any of the
foregoing.
6.3 Investigation of Brown by Caldwell and Caldwell Tanks. From the
Effective Date through the Closing, Matrix, GSAC and Brown shall afford to the
officers, employees and authorized representatives of Caldwell and Caldwell
Tanks (including independent public accountants and attorneys) complete access
to the offices, properties, employees and business and financial records
(including computer files, retrieval programs and similar documentation and such
access and information that may be necessary in connection with an environmental
audit) of the Brown Parties to the extent Caldwell or Caldwell Tanks shall deem
necessary or desirable, and shall furnish to Caldwell and Caldwell Tanks or
their authorized representatives such additional information concerning the
assets, properties and operations of the Brown Parties as shall be reasonably
requested, including all such information as shall be reasonably necessary or
appropriate to enable Caldwell, Caldwell Tanks or their representatives to
verify the accuracy of the representations and warranties contained in this
Agreement, to verify that the covenants of Brown, GSAC and Matrix contained in
this Agreement have been complied with, and to determine whether the conditions
set forth in Section 7.1 have been satisfied. Caldwell and Caldwell Tanks agree
that such investigation shall be conducted in such a manner as will not
interfere unreasonably with the operations of Brown, GSAC or Matrix. No
investigation made by Caldwell, Caldwell Tanks or their representatives
hereunder shall affect the representations and warranties of Brown, GSAC and
Matrix made in this Agreement.
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6.4 Title Insurance; Surveys. Brown will obtain, at its cost and
expense, and deliver to Caldwell within five business days after the Effective
Date, commitments to issue the following title insurance, meeting the following
requirements, at the Closing:
(a) Parcels of Real Estate. With respect to each parcel of real
estate that the Brown Parties own (each, a "Parcel"), a commitment to issue an
ALTA Owner's Policy of Title Insurance (Form 10/17/92 or its nearest equivalent
if a Parcel is located in a jurisdiction in which Form 10/17/92 is not
available) (each a "Commitment"), which Commitments shall be issued by a title
insurer reasonably satisfactory to Caldwell, committing to insure the interest
of Brown in each Parcel for such amount as Caldwell shall reasonably determine
to be the fair market value of the interest in such Parcel (including in all
improvements).
(b) State of Title. Within ten business days after the receipt by
Caldwell of a Commitment and of the Survey (as defined below) for a Parcel,
Caldwell shall notify Brown of any exceptions to title contained in that
Commitment or shown on that Survey which Caldwell finds, in its reasonable
discretion, to be unacceptable to Caldwell. Thereafter, Brown shall within five
business days notify Caldwell of its intention to take such action as may be
necessary to remove the exceptions objected to from the Commitment or the
Survey, as applicable, and an endorsement to that Commitment shall be issued or
the Survey amended, at least five business days prior to the Closing deleting
the exceptions so objected to from that Commitment or correcting the Survey
items objected to. All exceptions to title or survey issues as to each Parcel
as to which Caldwell shall not object (or shall subsequently withdraw its
objection) shall be deemed to be "Permitted Exceptions."
(c) Further Commitment Requirements. In addition to the matters set
forth in (a) and (b) above, each Commitment shall further commit (i) to insure
title to all recorded easements benefitting that Parcel, (ii) to issue an ALTA
Endorsement 3.1 (or equivalent) as to that Parcel, and (iii) to issue a standard
"non-imputation" endorsement.
(d) Surveys. With respect to each Parcel, Brown, Matrix and GSAC
will at their expense, within five business days after the Effective Date,
obtain and deliver to Caldwell a survey by a licensed surveyor reasonably
acceptable to Caldwell, certified to Caldwell and to the title
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company insuring that Parcel and conforming to the Minimum Detail Requirements
for ALTA/ACSM Land Surveys (Class A Survey) including all items contained in
items 11, 2, 3, 4, 6, 8 and 10 (each a "Survey"). All Surveys shall be updated
to conform to the deletion or correction of survey issues as described in
Section 6.4(b).
(e) Title at Closing. At the Closing, the state of title to each
Parcel shall be such that the title company issuing the Commitment for that
Parcel shall be prepared to and shall issue a title policy on the form mandated
by Section 6.4(a), insuring the interest of the Brown as a valid fee simple
interest, (i) subject only to the Permitted Exceptions, (ii) having deleted
therefrom the standard exceptions for parties in possession, survey, rights of
way and easements not of record and mechanics and materialmans liens, (iii)
insuring that the Parcel as described in the policy is the same property as is
described in the Survey for that Parcel, (iv) insuring the contiguity of the
Parcel if the Parcel consists of more than one tract or lot, and (v) insuring
direct and unencumbered pedestrian and vehicular access to the Parcel from each
street or roadway adjacent to the Parcel.
6.5 Lien and Litigation Searches. Caldwell or Caldwell Tanks may (in
their discretion) obtain, at their cost and expense, a Uniform Commercial Code
security interest search report, a tax lien search report and a litigation
search report, all dated within five days of the date of delivery thereof, with
an update within three days of the Closing Date, showing that there are no
Encumbrances against the assets, properties or rights of the Brown Parties,
other than those disclosed on Schedules 4.24(a)(1) and 4.29, and no litigation,
except as disclosed on Schedule 4.21.
6.6 Transition of Brown. Brown, GSAC and Matrix covenant with
Caldwell and Caldwell Tanks to cooperate with Caldwell and Caldwell Tanks to
effect the smooth transition of the control and operation of the Assets from
Brown to Caldwell, as contemplated herein, including the retention of the
customers of the Brown Parties, by such means that Caldwell or Caldwell Tanks
may reasonably request. Brown, GSAC and Matrix covenant to cooperate with
Caldwell and Caldwell Tanks in providing all information required hereunder and
access thereto and whatever is required to carry out the purposes and intent of
the transactions contemplated in this Agreement.
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6.7 Further Assurances. Each of the Parties hereto shall, at any
time, and from time to time, either before or after the Closing Date, upon the
request of the appropriate Party, do, obtain, execute, acknowledge and deliver,
or will cause to be done, obtained, executed, acknowledged and delivered, all
such further acts, consents, assignments, transfers, conveyances, and assurances
as may be reasonably required to complete the transactions contemplated in this
Agreement in compliance with applicable Legal Requirements and all Brown
Agreements. After the Closing Date, Brown, Matrix and GSAC shall, and shall use
their reasonable best efforts to assure that any necessary third party shall,
execute such documents and do such other acts and things as Caldwell or Caldwell
Tanks may reasonably require for the purpose of giving to Caldwell, Caldwell
Tanks and the Subsidiaries the full benefit of all the provisions of this
Agreement and as may be reasonably required to complete the transactions
contemplated in this Agreement.
6.8 Actions of the Parties.
(a) No Actions Constituting a Breach. From the date hereof through
the Closing Date, neither Brown, GSAC, Matrix, Caldwell Tanks nor Caldwell will
take or knowingly permit to be done anything in the conduct of the business of
the Brown Parties or Caldwell, as the case may be, or otherwise, which would be
in or represent a misrepresentation, breach of warranty or non-fulfillment of
any covenant or agreement on the part of that Party under this Agreement, and
each of the Parties hereto shall cause the deliveries for which such Party is
responsible at the Closing to be duly and timely made.
(b) Notification of Breaches. From the date hereof through the
Closing Date, each Party agrees to promptly notify the other Parties in writing
if such Party becomes aware of any fact or condition that causes or constitutes
a breach by that Party of any of its representations or warranties as of the
date of this Agreement, or if such Party becomes aware of the occurrence after
the date of this Agreement of any fact or condition that would (except as
expressly contemplated by this Agreement) cause or constitute such a breach by
that Party had its representations and warranties been made as of the time of
the occurrence or discovery of such fact or condition. Should any such fact or
condition require any change in the Schedules if the Schedules were dated the
date of the occurrence or discovery of any such fact or condition, Matrix, GSAC
and Brown will promptly deliver to Caldwell and Caldwell Tanks a supplement to
the Schedules specifying such change.
<PAGE>
During the same period, each Party agrees to promptly notify the other parties
of the occurrence of any breach of any covenant of that Party in this Agreement
or of the occurrence of any event that may make the satisfaction of the
conditions in Section 7 impossible or unlikely. No disclosure by any Party
pursuant to this Section 6.8(b), nor any supplement of the Schedules by Matrix,
GSAC or Brown as contemplated above, however, shall be deemed to amend or
supplement the Schedules for purposes of the conditions to Closing provided in
Section 7, to prevent or cure any misrepresentation or breach of a warranty or
covenant, or to otherwise amend or supplement any of the conditions to Closing
provided in Section 7.
6.9 Compliance With Conditions. Each Party hereto agrees to
cooperate fully with the other Parties, and shall use its reasonable best
efforts to cause the conditions precedent for which such Party is responsible to
be fulfilled. Each Party hereto further agrees to use its reasonable best
efforts, and act in good faith, to consummate this Agreement and the
transactions contemplated herein as promptly as possible.
6.10 Consents; Actions. Subject to the terms and conditions of this
Agreement, the Parties hereto undertake and agree to (a) in good faith, take all
steps that are within their power to cause to be fulfilled those of the
conditions precedent to each Party's obligations to consummate the transactions
contemplated herein as are dependent upon their actions; and (b) use their
reasonable best 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 to consummate and make effective the transactions contemplated and not to
take any actions that would be inimical to such result.
6.11 Accounts Receivable. Following the Closing, Caldwell agrees to
reasonably cooperate with Brown, at Brown's expense, in its efforts to collect
all amounts owing by third-Persons under the Accounts Receivable that are
included in the Excluded Assets to be retained by Brown. To the extent Caldwell
receives any amounts from third-Persons on account of any of those Accounts
Receivable at any time after the Closing, Caldwell agrees to promptly remit the
same to Brown. For the avoidance of doubt, the Parties agree that in the event
any amounts are received by Caldwell following the Closing on account of any one
or more WIP Contracts under which those Accounts Receivable remain owing to
Brown, such amounts shall first be deemed to be a payment
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by the relevant customer on such Accounts Receivable owing to Brown, with any
excess amounts being deemed to be a payment on amounts then owing to Caldwell,
in each case unless and to the extent the relevant customer notifies Caldwell in
writing that it is disputing the indebtedness to Brown, or that the amounts
remitted by that customer are specifically intended as a payment of amounts
owing to Caldwell for services performed or products delivered following the
Closing. Caldwell shall have no further obligation to assist Brown in the
collection of any Account Receivable which is disputed by the relevant customer
or that has otherwise become more than 90 days past due. Notwithstanding the
foregoing, Brown shall be solely responsible for the collection or non-
collection of any Accounts Receivable that are included in the Excluded Assets.
6.12 Matrix's Guaranty. Matrix hereby guarantees unconditionally and
absolutely to Caldwell and Caldwell Tanks: (a) the due and punctual payment and
performance by Brown and GSAC of all obligations of Brown and/or GSAC provided
for in this Agreement that are to be paid or performed by Brown and/or GSAC on
or prior to the Closing Date; and (b) the due and punctual payment and
performance by Brown and GSAC of all obligations of Brown and/or GSAC provided
for in this Agreement or in any Ancillary Document, whether such payment or
performance is required before or after the Closing. This is a guarantee of
payment and performance and not of collection, and this guarantee shall survive
any termination of this Agreement to the extent of any continuing obligations of
Brown or GSAC hereunder or under any Ancillary Document. The obligations of
Matrix hereunder shall remain in full force and effect without regard to, and
shall not be affected or impaired by, any of the following, any of which may be
taken without the consent of, or notice to, Matrix: (a) any exercise, non-
exercise or waiver by Caldwell or Caldwell Tanks of any right or privilege under
this Agreement or any Ancillary Document (provided, that any non-performance by
Caldwell or Caldwell Tanks that would be a defense to Brown's or GSAC's
performance under this Agreement or any Ancillary Document shall constitute a
defense to Matrix under this Section 6.12); (b) any bankruptcy, insolvency,
reorganization, dissolution, liquidation or other like proceeding relating to
Brown, GSAC or Matrix, whether or not Matrix shall have had knowledge of any of
the foregoing; (c) any permitted assignment or other transfer of this Agreement;
and (d) the invalidity or unenforceability of this Agreement or any Ancillary
Document, or any provision hereof or thereof. Matrix unconditionally waives all
demands, protests and notices of
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protests, any right to require Caldwell or Caldwell Tanks to first proceed
against Brown or GSAC, and any and all guarantor's defenses, whether general or
otherwise.
6.13 Certain Employee Matters. Notwithstanding any other provision
of this Agreement to the contrary, the Parties agree as follows:
(a) Accrued Vacation.
(1) With respect to all persons who are or were employed by
any of the Brown Parties as of or at any time prior to the Closing other than
(y) "field" employees and (z) the employees that are identified by Caldwell
Tanks as not to be offered employment following the Closing as contemplated in
Subsection (e) below (collectively, the "Non-Field Employees"): (a) Brown,
Matrix and GSAC shall be solely responsible for the costs of all vacation of
such Non-Field Employees accrued under the vacation policies of the Brown
Parties in effect as of or at any time prior to the Closing, based upon their
service with the relevant Brown Party at any time prior to January 1, 1999,
including without limitation, all vacation time to be taken in 1999 for
service to the Brown Parties during 1998; and (b) Caldwell shall be solely
responsible for the costs of all vacation of such Non-Field Employees accrued
based upon their service for the relevant Brown Party during the period from
January 1, 1999 through the Closing, including without limitation, all
vacation time to be taken in 2000 for service during 1999. Prior to the date
hereof, the Parties mutually agreed upon the amount of accrued vacation of the
Non-Field Employees for which Brown, Matrix and GSAC are responsible as
contemplated above, and such amount was deducted from the Purchase Price (the
deduction being already reflected in the amount set forth in Section 2.1). In
light of that deduction, all such accrued vacation shall be and remain an
Assumed Obligation and not a Retained Obligation. The Parties agree that any
accrued vacation of any of the employees that are identified by Caldwell Tanks
as not to be offered employment following the Closing as contemplated in
Subsection (e) below, whether of the type described in Subclause (a) or (b),
above, shall remain a Retained Obligation for all purposes under this
Agreement, and shall not be the subject of a deduction from the Purchase Price
as contemplated above.
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(2) With respect to all persons who are or were employed by
any of the Brown Parties as of or at any time prior to the Closing as "field"
employees (collectively, the "Field Employees"), Brown, Matrix and GSAC shall
be solely responsible for, and hereby agree to pay and discharge, and to
defend, indemnify and hold harmless the Subsidiaries, Caldwell Tanks and
Caldwell from and against, the costs of any vacation of such Field Employees
accrued under the vacation policies of the Brown Parties in effect as of or at
any time prior to the Closing (including without limitation, any amounts owed
to such Field Employees and any amounts required under applicable Legal
Requirements to be withheld from such employees and remitted to any
Governmental Body): (a) based upon their service for the relevant Brown Party
at any time during the period from January 1, 1999 through the Closing (it
being the belief of Brown, Matrix and GSAC that no such vacation has or will
accrue for the Field Employees for that period under the policies of the Brown
Parties or applicable Legal Requirements); and (b) based upon the service of
the Field Employees for the relevant Brown Party at any time prior to January
1, 1999.
(b) Severance, Sick Pay and Bonuses. Brown, Matrix and GSAC shall be
solely responsible for, and shall pay when due and defend, indemnify and hold
harmless Caldwell Tanks and Caldwell from and against: (i) any severance
benefits, termination benefits or other similar payments or benefits now or
hereafter owing under the policies of the Brown Parties in effect immediately
prior to the Closing to any of the employees of the Brown Parties who are
identified by Caldwell Tanks as not to be offered employment following the
Closing as contemplated in Subsection (e) below, and to any employees who are
offered such employment but who decline to accept the same (it being understood
by the Parties that Caldwell shall assume responsibility for any such severance
benefits, termination benefits and other similar payments or benefits that may
now or hereafter be owing to any employees of the Brown Parties that are
actually employed by Caldwell or Caldwell Tanks following the Closing, and the
same shall constitute Assumed Obligations); (ii) any bonuses or other incentive
compensation (over and above their base salary or wages), to which any past or
present employee of the Brown Parties is entitled as of the Closing, or to which
they may become entitled following the Closing by reason of their service to the
Brown Parties prior to the Closing, by reason of the performance (financial or
otherwise) of the Brown Parties prior to the Closing (it being the belief of
Brown, Matrix and GSAC that any such bonuses and incentive
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compensation payments may be made or made available, or withheld, by the Brown
Parties in their sole and absolute discretion and without obligation to those
employees); and (iii) any sick pay or sick leave benefits (including without
limitation, any short term disability benefits) to which any past or present
employee of the Brown Parties is entitled as of the Closing, or to which they
may become entitled following the Closing by reason of their service to the
Brown Parties prior to the Closing, in either case in excess of the sick pay or
sick leave benefits to which they may become entitled under the policies of
Caldwell Tanks and its Affiliates in effect following the Closing. Brown, Matrix
and GSAC shall have no obligation hereunder for any such bonuses, other
incentive compensation or sick leave or sick pay benefits that may accrue
following the Closing by reason of the service of any employees of Caldwell
following the Closing. Caldwell Tanks agrees that it shall not, and shall not
permit Caldwell to, pay any discretionary bonuses or incentive compensation to
any employees of the Brown Parties by reason of their service to the Brown
Parties prior to the Closing, or by reason of the performance (financial or
otherwise) of the Brown Parties prior to the Closing.
(c) 401(k) Plan Participation. Matrix agrees that it shall,
consistent with the last sentence of Section 2.5(b), make all contributions to
its 401(k) plan required of it, GSAC or any Brown Party for the benefit of the
employees of the Brown Parties participating therein, for all periods through
the Closing Date, shall (and shall cause GSAC and each of the Brown Parties to)
vest 100% of all such employer contributions to its 401(k) plan for the benefit
of the employees of the Brown Parties, and shall offer to all such employee
participants the options available under the terms of that 401(k) plan, which
include lump sum distributions and, depending upon amounts, continued investment
in the Matrix 401(k) plan. Matrix agrees to give each employee of the Brown
Parties who is a participant in the Matrix 401(k) plan, and who, as of the
Closing, has an outstanding loan owing to their 401(k) plan account, reasonable
prior notice that their loan must be repaid by them to their account prior to
the Closing in order to avoid a deemed distribution to them of such loan amounts
from their accounts. Brown, Matrix and GSAC acknowledge that Caldwell Tanks and
Caldwell do not intend to permit any such plan participant to roll his or her
401(k) plan account balances into the 401(k) plan of Caldwell Tanks until such
time as all previous loans taken from their Matrix 401(k) plan accounts have
been repaid.
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(d) Employees Currently Under Disability. Matrix agrees to cause the
benefits of its long term disability plan and workers compensation insurance
coverages (as applicable) in effect prior to the Closing for the employees of
the Brown Parties, to be made available following the Closing to all employees
of Caldwell (who were formerly employees of any of the Brown Parties) who are
off from work as of the Closing due to a disability or other injury, until such
time as those employees are no longer disabled or eligible for workers
compensation benefits under applicable Legal Requirements and Matrix's workers
compensation insurance policies. The covenant of Matrix in the preceding
sentence shall include, without limitation, all employees that are terminated by
the Brown Parties as contemplated in (e), below, and that may be hired by
Caldwell or Caldwell Tanks following the Closing.
(e) Termination of Certain Employees. The Brown Parties shall, and
Matrix and GSAC agree to cause the Brown Parties to, prior to the Closing,
terminate all of the employees of the Brown Parties immediately prior to the
Closing. Caldwell or Caldwell Tanks agrees to offer employment to all such
terminated employees following the Closing, based on job responsibilities
comparable to their previous positions with the Brown Parties (but otherwise on
terms that are satisfactory to Caldwell or Caldwell Tanks (as applicable)),
other than those employees who are identified by Caldwell Tanks, in a notice
delivered to Matrix at least ten (10) days prior to the anticipated Closing
Date, as not to be offered such employment following the Closing. Brown, Matrix
and GSAC shall be solely responsible for communicating to (and hereby agree to
communicate to) all employees of the Brown Parties all such notices regarding
their termination or otherwise that are required by applicable Legal
Requirements (including without limitation, sending to all employees the notice
required under COBRA), and shall provide whatever assistance as Matrix elects,
or the Brown Parties are otherwise required pursuant to Legal Requirements to
make or provide, to assist such designated employees. Brown, Matrix and GSAC
agree to use their commercially reasonable efforts from and after the date
hereof to obtain from all employees identified by Caldwell Tanks as not to be
offered employment following the Closing, a general release of claims in a form
reasonably satisfactory to Caldwell Tanks, releasing Caldwell Tanks and Caldwell
of and from any debts, obligations and liabilities of any nature to those
employees. The Parties further agree that Matrix shall initially pay all
premium payments that would otherwise be owing by the Field Employees who accept
the offer of employment by Caldwell or Caldwell Tanks as contemplated above, for
continued COBRA medical coverage under the Benefit Plans of Matrix
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throughout the ninety (90) day period immediately following their termination by
the relevant Brown Party (or throughout such shorter period following that
termination as they shall remain employees of Caldwell or Caldwell Tanks (as
applicable)). Following their payment of such premium payments, Matrix shall
either bill the total amount of such premium payments to the relevant Field
Employees (with a copy to Caldwell) or shall bill those premium payments to
Caldwell. If billed to a Field Employee, Caldwell shall promptly reimburse that
employee for the premium payments actually paid by him or her to Matrix for that
period. If billed to Caldwell, Caldwell shall remit and pay to Matrix the amount
of such premium payments within thirty (30) days after Caldwell's receipt of the
Matrix invoice.
(f) Medical Coverage. With respect to terminated employees of the
Brown Parties that are offered employment by Caldwell or Caldwell Tanks as
contemplated in (e) above, Caldwell Tanks shall use its commercially reasonable
efforts to attempt to have such employees made eligible for inclusion in the
health and medical Benefit Plans of Caldwell Tanks based upon their prior
service with the Brown Parties.
6.14 Books and Records. Matrix, GSAC, Caldwell and Brown agree to
retain, for a period of seven (7) years after the Closing Date, any and all
books and records (hard copy, electronic or otherwise) related to the Brown
Parties and their respective businesses for all periods through the Closing Date
or related to the transactions contemplated hereby; provided, however, that upon
--------
expiration of such seven (7) year period, the Party with custody of such books
and records shall give written notice to the other Party(s) and an opportunity
to such other Party(s) to ship such books and records at such other Party's
costs, expense and risk to a location chosen by it. In the event any Party
needs access to such books and records for purposes of verifying any
representations and warranties contained in this Agreement, responding to
inquiries regarding the Brown Parties' or Caldwell's businesses from
Governmental Bodies, indemnifying, defending and holding harmless Caldwell,
Caldwell Tanks, Brown, GSAC or Matrix, as the case may be, in accordance with
Section 10 or any other legitimate business purpose, each Party will allow
representatives of the other Party(s) access to such books and records upon
reasonable notice during regular business hours for the sole purpose of
obtaining information for use as aforesaid, and will permit such other Party(s)
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to make such extracts and copies thereof as may be necessary or convenient and,
if required for such purpose, to have access to and possession of original
documents.
6.15 Orion Contract. The Parties acknowledge that Brown, together
with Matrix (through its San Luis Tank Division) and Orion Refining Corporation,
are parties to an agreement pertaining to the completion of construction by
Matrix and Brown, as the Contractors, for Orion Refining Corporation, as the
Owner, of two (2) 69-foot diameter spheres (A and B) that were originally under
Contract K73524E (collectively, the "Orion Contract"). A complete copy of the
Orion Contact is set forth in Exhibit F attached hereto. The Parties agree that
---------
any and all debts, obligations and liabilities that Brown may now or hereafter
have arising out of or in any manner relating to the Orion Contract or Brown's
performance thereunder shall constitute Retained Obligations for all purposes
under this Agreement (but only to the extent not resulting from or arising out
of Caldwell's gross negligence or willful misconduct occurring following the
Closing in the conduct of its services described below), including without
limitation, any obligations or liabilities arising out of any breach or default
by Brown or Matrix (or their respective successors or assigns) under the Orion
Contract occurring following the Closing Date. Subject to the foregoing and to
the obligations of Brown, Matrix and GSAC to pay, indemnify, defend and hold
harmless Caldwell and the other Caldwell Indemnitees for, from and against such
Retained Obligations pursuant to Section 10.2, Caldwell shall endeavor to
perform the obligations of Brown under the Orion Contract as specified in the
June 2, 1999 memorandum that is included as a part of Exhibit F as being
---------
specifically allocated to Brown alone, based upon the form of the Orion Contract
set forth in Exhibit F (with such changes from that form as shall be approved in
---------
writing by Caldwell, which approval shall not be unreasonably withheld), and in
accordance with the code and standards established by the American Society of
Mechanical Engineers. Brown and Matrix shall pay or cause to be paid to
Caldwell, within thirty (30) days after its invoice for the same, all reasonable
costs and expenses that are incurred by Caldwell in rendering such performance,
at the rates specified in such June 2, 1999 memorandum. Caldwell agrees that
Matrix will oversee and direct the performance of Caldwell pursuant to the Orion
Contract, subject to the limitations described above; provided, that Caldwell
shall have no obligation to follow the directives of Matrix in the event
Caldwell shall reasonably believe that the same would result in a breach or
default by Caldwell under the terms of the Orion Contract or would give rise to
damages for which Brown and Matrix will be unable or will
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refuse to defend, indemnify and hold harmless Caldwell or any other Caldwell
Indemnitee pursuant to Section 10.2.
6.16 Permits. The Parties agree to reasonably cooperate with and
assist each other, at their respective cost and expense, to effect the transfer
or assignment to Caldwell of any existing Governmental Authorizations of the
Brown Parties that may be required by reason of, or that may result from, the
consummation of the transactions contemplated in this Agreement, and agree to
file any notices, requests, applications and the like with all relevant
Governmental Bodies in connection with those Government Authorizations (or their
assignment or transfer), including without limitation, any notices of the change
in control and ownership of the Assets required under applicable Legal
Requirements for the continued use, maintenance and effectiveness of such
Governmental Authorizations. To the extent any Governmental Authorization
included in the Assets is not assignable by Brown, or is not assignable by Brown
without the prior approval of one or more Governmental Bodies, Matrix, GSAC and
Brown agree to make those Governmental Authorizations otherwise available to
Caldwell at no additional cost to the greatest extent possible, and further
agree, with respect to Governmental Authorizations relating to the Broad Street
Property and/or the Fayetteville Road Property, or relating to the use or
operation thereof following the Closing (but exclusive of contractor's licenses,
foreign qualifications and other similar Governmental Authorizations), to use
their best efforts from and after the Closing to obtain the approval of those
Governmental Bodies, or to otherwise secure a replacement Governmental
Authorization for the account of Caldwell in place of the Governmental
Authorizations not assignable to Caldwell, in each case to the extent required
for Caldwell's full use and enjoyment of the Assets following the Closing as
contemplated herein.
6.17 Real Property Commitments. The parties acknowledge that the
exclusive use and enjoyment following the Closing of the buildings, facilities
and other improvements of Brown located on the Broad Street Property and the
Fayetteville Road Property represent a material and substantial portion of the
overall value to Caldwell and Caldwell Tanks of the transactions contemplated in
this Agreement. However, the discovery by the Parties of various forms of
groundwater and soil contamination at, on, under, across or with respect to the
Broad Street Property and the Fayetteville Road Property (with respect to each
of those properties, collectively, the
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"Contamination"), and the potential Environmental, Health and Safety Liabilities
associated with that Contamination, have resulted in Caldwell's unwillingness to
purchase those properties at the Closing. Despite this, the Parties desire to
proceed with the overall transaction by implementing a contractual arrangement
that will permit Caldwell (or an Affiliate designated by it) to utilize the
buildings, facilities and other improvements on the Broad Street Property and
the Fayetteville Road Property until the Contamination on those properties can
be properly remediated by Brown, Matrix and GSAC (at which time Caldwell or its
designee would purchase the Broad Street Property or the Fayetteville Road
Property (as applicable) from Brown). In light of the foregoing, the Parties
agree as follows:
(a) Real Property Agreements. At the Closing, Brown and Caldwell
shall execute and deliver a Facilities Use and Purchase Option Agreement
relating to the Broad Street Property, dated as of the Closing Date, and in a
form satisfactory to the Parties (the "Broad Street Property Agreement"), and
Brown and Caldwell shall execute and deliver a Facilities Use and Purchase
Option Agreement relating to the Fayetteville Road Property of even date
therewith and in a form satisfactory to the Parties (the "Fayetteville Road
Property Agreement") (the Broad Street Property Agreement and the Fayetteville
Road Property Agreement are hereinafter collectively referred to as the "Real
Property Agreements"). Pursuant to each of the Real Property Agreements, among
other transactions:
(i) Brown shall grant to Caldwell an exclusive right and license
to utilize all of the buildings, facilities and other improvements located on
the Broad Street Property or the Fayetteville Road Property (as applicable)
for any and all lawful purposes, consistent with the Non-Competition
Agreement, for a period of three (3) years following the Closing, in
consideration of the payment by Caldwell (or such Affiliate) to Brown of the
user fee contemplated in the Broad Street Property Agreement or the
Fayetteville Road Property Agreement (as applicable), and otherwise upon and
subject to the terms and conditions set forth in that agreement; and
(ii) Brown shall grant to Caldwell (or to the Person(s)
designated by Caldwell) an exclusive right and option to purchase all of
Brown's (and its successors and permitted
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assigns) rights, title and interests under, in and to the Broad Street
Property or the Fayetteville Road Property (as applicable), free and clear of
all Encumbrances other than Permitted Encumbrances, at any time during the
three (3) year period immediately following the Closing, for the consideration
provided for therein, and otherwise upon and subject to the other terms and
conditions set forth therein.
(b) Remediation of Contamination. Brown, GSAC and Matrix, at their
sole expense, agree: (i) (A) to use their commercially reasonable efforts from
and after the Closing to cause the Broad Street Property and the Fayetteville
Road Property not be placed for any reason by the Georgia Environmental
Protection Division ("Georgia EPD") on its Hazardous Site Inventory List, and
not to be placed by any other Governmental Body on any similar list designating
that property as being the subject of any monitoring by that Governmental Body
or any required remediation with respect to any Contamination (each a "List"),
and (B) if despite such efforts either or both of the Broad Street Property or
- ---
the Fayetteville Road Property is placed for any reason by the Georgia EPD or
any other Governmental Body on any List, to use their commercially reasonable
efforts from and after the Closing to cause the Broad Street Property and/or the
Fayetteville Road (as applicable) to be formally removed from that List by the
relevant Governmental Body (each a "Delisting" of the relevant property); and
---
(ii) to fully "Cleanup" (as defined in the definition of Environmental Health
and Safety Liabilities set forth on Exhibit A) in compliance with all applicable
---------
Legal Requirements, at no cost or expense to Caldwell or Caldwell Tanks, and
within a reasonable period of time following the Closing, all soil Contamination
on, under, across and at the Broad Street Property (exclusive of the soils
located directly beneath the floor of the fabrication shop located on that
property) and the Fayetteville Road Property, in each case to a level that is
below all Georgia Department of Natural Resources maximum permissible levels for
soil contamination (DNR Levels) that are relevant to that property, and (iii) to
---
cause, at their expense, all soils and back fill which were the subject of or
used in connection with any of the above-described Cleanup efforts (or efforts
to cause a Delisting) to be returned, to the reasonable satisfaction of
Caldwell, to a state or condition sufficient to accommodate storm water run-off
in compliance with all applicable Governmental Authorizations and Legal
Requirements, and sufficient for Caldwell's use of the property for its intended
purposes as contemplated in this Agreement, consistent with the past practices
of Brown. At such time, if ever, as Brown, GSAC and Matrix shall have obtained
such a Delisting of the
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relevant property, they shall promptly notify Caldwell of the same in writing,
and shall include with that notice a copy of the relevant Governmental Body's
notice of the Delisting and all accompanying information (if any). At such time
(but not before) as (A) the Broad Street Property or the Fayetteville Road
Property (as applicable) has been caused not to be placed on a List or has been
caused to be Delisted, each as contemplated above, and (B) there has been a full
---
Cleanup of all soil and water Contamination on, under, across and at that
property (other than, in the case of the Broad Street Property, soil
Contamination directly under the fabrication shop floor) in compliance with all
applicable Legal Requirements, at no cost or expense to Caldwell or Caldwell
Tanks, and to a level that is below all Georgia Department of Natural Resources
maximum permissible levels for soil contamination (DNR Levels), all Georgia
Maximum Contaminant Levels for groundwater contamination (MCL's) and all Georgia
---
HSRA Risk Reduction Standards (RRS) applicable to that property (collectively,
the "Remediation Levels"), and (C) all soils and back fill which were the
---
subject of or used in connection with any of the above-described Cleanup efforts
have, to the reasonable satisfaction of Caldwell, been returned to a state or
condition sufficient to accommodate storm water run-off in compliance with all
applicable Governmental Authorizations and Legal Requirements, and sufficient
for Caldwell's use of the property for its intended purposes as contemplated in
this Agreement, consistent with the past practices of Brown, then Brown, GSAC or
----
Matrix shall promptly so notify Caldwell, and shall include with that notice a
copy of the Georgia EPD's (or other relevant Governmental Body's) notice of the
Delisting (and all accompanying information, if any), together with a written
Phase II environmental audit report from an independent environmental auditing
and consulting firm reasonably satisfactory to Caldwell, opining to Caldwell
that the Remediation Levels have been fully achieved with respect to the Broad
Street Property or the Fayetteville Road Property (as applicable) as
contemplated above, and containing such exceptions, exclusions and other
limitations from or on that opinion as are reasonably satisfactory to Caldwell
(collectively, the "Remediation Notice"). If the Remediation Notice from Brown,
GSAC or Matrix is received by Caldwell prior to the third (3rd) anniversary of
the Closing Date, then Caldwell shall, or shall cause its relevant designee to,
thereafter exercise its right and option provided for in the Broad Street
Property Agreement or the Fayetteville Road Property Agreement (as applicable)
to purchase the Broad Street Property or the Fayetteville Road Property, upon
notice of exercise delivered within ten (10) days after its receipt of the
Remediation Notice from Brown, GSAC or Matrix (as applicable), and otherwise in
accordance with the Broad Street Property
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Agreement or the Fayetteville Road Property Agreement. Brown, GSAC and Matrix
agree to keep Caldwell and Caldwell Tanks, and their designated Representatives,
reasonably informed of their progress in remediating the Contamination,
obtaining the Georgia EPD (or other relevant Governmental Body's) notice of
Delisting and, as applicable, achieving the Remediation Levels, and agree to
promptly provide Caldwell with copies of all applications and related
correspondence to or from the Georgia EPD (or other relevant Governmental Body)
regarding the Contamination and/or the attempted Delisting, and to afford
Caldwell, Caldwell Tanks, and their designated Representa tives, a reasonable
opportunity to participate in all meetings and discussions with the Georgia EPD
(or other relevant Governmental Body) in connection therewith.
(c) Maintenance of Ownership; No Encumbrances. Brown shall not, and
Matrix and GSAC agree not to cause or permit Brown to, attempt to sell, assign,
convey, transfer or deliver to any other Person (other than to Caldwell or its
designee pursuant to the Broad Street Property Agreement or the Fayetteville
Road Property Agreement, as applicable) any rights, title or interests of Brown
under, in or to the Broad Street Property or the Fayetteville Road Property
Agreement at any time during the three (3) year period immediately following the
Closing, or thereafter to the extent Caldwell (or its relevant designee) has
exercised its Option but not yet purchased the Broad Street Property or the
Fayetteville Road Property as contemplated in the Broad Street Property
Agreement or the Fayetteville Road Property Agreement, in either case without
the prior written consent of Caldwell, which consent shall not be unreasonably
withheld, conditioned or delayed. No such sale, assignment, conveyance,
transfer or delivery shall be deemed to release or otherwise discharge Brown,
GSAC or Matrix of or from their covenants and agreements set forth in this
Agreement, the Broad Street Property Agreement or the Fayetteville Road Property
Agreement, and the Parties acknowledge that Caldwell shall in all cases be
entitled to withhold its consent (in its discretion) to that sale, assignment,
conveyance or transfer in the event the proposed purchaser, assignee or
transferee of the Broad Street Property or the Fayetteville Road Property fails
or refuses to agree in writing with Caldwell and Caldwell Tanks to become bound
by and subject to all of the terms and conditions of this Agreement and the
Broad Street Property Agreement or the Fayetteville Road Property Agreement (as
applicable), that relate to that property. Brown, Matrix and GSAC further
acknowledge that all Encumbrances on or affecting the Broad Street Property and
the Fayetteville Road Property arising under the Bank Agreement shall be fully
released and discharged
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by them, at their expense, prior to the Closing, and agree that they shall not
cause or permit any other Encumbrances (other than Permitted Encumbrances) to be
granted in, imposed or maintained against the Broad Street Property or the
Fayetteville Road Property at any time during the three (3) year period
immediately following the Closing (and during any period thereafter until
Caldwell or its relevant designee has purchased the Broad Street Property or the
Fayetteville Road Property pursuant to an exercise of its purchase Option in
accordance with the Broad Street Property Agreement or the Fayetteville Road
Property Agreement, as applicable).
(d) Monitoring Equipment. The Parties acknowledge and agree that the
Broad Street Property and/or the Fayetteville Road Property that may be
purchased by Caldwell or its designee pursuant to the Real Property Agreements
(or either of them) shall include, in addition to Brown's fee simple and other
title to the related real property and improvements, without limitation, all
groundwater monitoring wells, all other equipment or facilities of Brown used
for the monitoring and/or testing of Hazardous Activities, Hazardous Materials,
potential violations of Environmental Laws and/or potential Environmental Health
and Safety Liabilities on, under, across or at that property, and all previous
test results, monitoring results and other related data of Brown, Matrix and
GSAC.
(e) No Release of Claims. Nothing contained in this Section 6.17,
nor any actions taken or results achieved by Brown, GSAC or Matrix as
contemplated herein, shall release Brown, GSAC or Matrix of or from
responsibility for all Retained Obligations as contemplated elsewhere in this
Agreement or any Ancillary Document.
6.18 Caldwell Tanks' Guaranty. Caldwell Tanks hereby guarantees
unconditionally and absolutely to Brown, Matrix and GSAC the due and punctual
payment and performance by Caldwell of all obligations of Caldwell provided for
in this Agreement or in any Ancillary Document, whether such payment or
performance is required before or after the Closing. This is a guarantee of
payment and performance and not of collection, and this guarantee shall survive
any termination of this Agreement to the extent of any continuing obligations of
Caldwell hereunder or under any Ancillary Document. The obligations of Caldwell
Tanks hereunder shall remain in full force and effect without regard to, and
shall not be affected or impaired by, any of the following, any of which may
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be taken without the consent of, or notice to, Caldwell Tanks: (a) any exercise,
non-exercise or waiver by Brown, Matrix or GSAC of any right or privilege under
this Agreement (provided, that any non-performance by Brown, Matrix or GSAC that
would be a defense to Caldwell's performance under this Agreement shall
constitute a defense to Caldwell Tanks under this Section 6.18); (b) any
bankruptcy, insolvency, reorganization, dissolution, liquidation or other like
proceeding relating to Caldwell or Caldwell Tanks, whether or not Caldwell Tanks
shall have had knowledge of any of the foregoing; (c) any permitted assignment
or other transfer of this Agreement; and (d) the invalidity or unenforceability
of this Agreement or any Ancillary Document, or any provision hereof or thereof.
Caldwell Tanks unconditionally waives all demands, protests and notices of
protests, any right to require Brown, Matrix or GSAC to first proceed against
Caldwell, and any and all guarantor's defenses, whether general or otherwise.
6.19 Contract Consent Matters. The Parties acknowledge that certain
of the WIP Contracts, the Other Work-in-Process Contracts and the performance
bonds related thereto may not, by their terms, be assigned or transferred by
Brown to Caldwell as contemplated herein without the prior consent or approval
of the other parties to those contracts. In light of the foregoing, and
notwithstanding anything contained in Section 1 or elsewhere in this Agreement
or any Ancillary Document to the contrary, the Parties agree as follows: To the
extent the assignment or transfer of any WIP Contract, Other Work-in-Process
Contract or performance bond relating thereto by Brown to Caldwell requires the
consent or approval of the other party thereto, or would result in a breach or
default by Brown thereunder absent a waiver thereof by that other party, or
would afford that other party the right to terminate the contract absent a
waiver of that right, then this Agreement and the other Ancillary Documents
shall not be deemed (nor shall they be deemed to require) an assignment of that
WIP Contract, Other Work-in-Process Contract or performance bond relating
thereto to Caldwell, nor an assumption by Caldwell of that contract, at the
Closing. If such a consent, approval or waiver is not obtained by Brown at or
prior to the Closing, Brown, GSAC and Matrix agree to use their commercially
reasonable efforts, at their expense, to obtain that consent, approval or waiver
in writing from the other party to that contract at the earliest practicable
time following the Closing. Upon the receipt of that consent, approval or waiver
(as applicable), the relevant WIP Contract, Other Work-in-Process Contract or
performance bond relating thereto shall be deemed to be automatically assigned
and transferred to Caldwell, pursuant to this Agreement and the Assignment
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and Assumption Agreement, without further consideration or action on the part of
any Party. Until such time following the Closing as that consent, approval or
waiver (as applicable) is obtained and the relevant contract is so assigned to
Caldwell, Brown shall, and GSAC and Matrix agree to cause Brown to: (a) fully
enforce that contract or bond against the other party thereto (including without
limitation, all rights of collection against that other party), not waive or
relinquish any rights or remedies that Brown may have thereunder against that
other party, not amend, modify, renew, terminate or supplement that contract,
and fully perform and comply with each and every obligation of Brown thereunder
(subject to the performance obligations of Caldwell described below), in each
case without the prior written consent of Caldwell; and (b) in the case of the
WIP Contracts and the Other Work-in-Process Contracts, remit and pay over to
Caldwell, promptly following the receipt thereof, all fees, costs, expenses,
revenues and other consideration received on account of that WIP Contract or
Other Work-in-Process Contract following the Closing and attributable to work
performed or goods or services delivered thereunder following the Closing (and,
in the case of the Other Work-in-Process Contracts, prior to the Closing). As
and when requested by Caldwell, Brown shall permit Caldwell to enforce that WIP
Contract, Other Work-in-Process Contract or performance bond relating thereto
against the other party thereto in the name of Brown. Brown shall not attempt to
assign, transfer or subcontract any of its rights, interests or obligations
under any such WIP Contract, Other Work-in-Process Contract or performance bond
relating thereto (other than to Caldwell or its Affiliate) without the prior
written consent of Caldwell. To the extent Brown shall allocate and remit to
Caldwell all of the economic and other benefits of that WIP Contract, Other
Work-in-Process Contract or performance bond relating thereto as contemplated
above, Caldwell shall perform for the benefit of the other party to that
contract or bond, to the fullest extent permissible under applicable Legal
Requirements, all of the obligations of Brown thereunder which first arise or
accrue following the Closing (other than Retained Obligations).
7. Conditions To Closing.
7.1 Conditions to Obligations of Caldwell. The obligations of
Caldwell to purchase the Assets and for Caldwell and Caldwell Tanks to take the
other actions required to be taken by them at and subsequent to the Closing are
subject to the satisfaction at or prior to the Closing of each of the following
conditions, any one or more of which Caldwell and Caldwell Tanks may waive in
whole or in part at or prior to the Closing:
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(a) Representations True. The representations and warranties of
Brown, GSAC and Matrix contained in this Agreement (considered collectively) and
each of those representations and warranties (considered individually) must have
been true and correct in all material respects (or with respect to
representations and warranties that are expressly subject to materiality or that
include a specific dollar threshold, in all respects) as of the Effective Date
and the date of this Agreement, and (except as otherwise provided below) must be
true and correct in all material respects (or with respect to representations
and warranties that are expressly subject to materiality or that include a
specific dollar threshold, in all respects) on and as of the Closing Date
(including those representations and warranties which specifically speak as of
the Effective Date or the date of this Agreement) with the same effect as though
such representations and warranties had been made and this Agree ment had been
delivered on and as of the Closing Date, without giving effect to any supplement
to the Schedules. Notwithstanding the foregoing, in the event any of the
representations or warranties of Brown, GSAC and Matrix set forth in Section 4.6
of this Agreement are not true and correct as of the Effective Date and the date
of this Agreement, or are not true and correct on and as of the Closing Date,
each as contemplated above, then Caldwell and Caldwell Tanks shall be entitled
to assert such misrepresentation, breach of warranty or other failure as being
an unsatisfied condition precedent to its obligation to consummate the
transactions contemplated in this Agreement only to the extent Caldwell and
----
Caldwell Tanks shall reasonably believe that Brown, GSAC and Matrix will be
unable or will refuse to indemnify and hold harmless the Caldwell Indemnitees,
pursuant to Section 10.2 hereof, from and against all Damages resulting from or
arising out of such misrepresen tation, breach of warranty or other failure, or
will otherwise be unable or will refuse to assume and pay, perform and discharge
all Retained Obligations that were or are the subject of such misrepresentation,
breach of warranty or other failure. Caldwell and Caldwell Tanks shall not be
deemed to have waived their right, following the Closing, to seek the
indemnification and other remedies provided for in this Agreement regarding such
misrepresentation, breach of warranty or Retained Obligations, notwithstanding
Caldwell's or Caldwell Tanks' knowledge of such misrepresentation or breach of
warranty as of the Closing.
(b) Covenants Performed. All of the covenants, agreements and
conditions of Brown, GSAC and Matrix required to be performed or complied with
at or prior to the Closing pursuant to the terms of this Agreement (considered
collectively), and each of those covenants, agreements and
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conditions (considered individually), must have been duly performed and complied
with in all material respects.
(c) No Changes or Destruction of Property. Between the date hereof
and the Closing Date, there shall have been (i) no material adverse change in
the business, financial condition or results of operations of any of the Brown
Parties; (ii) no material adverse federal or state legislative or regulatory
change affecting any of the Brown Parties or their products or services; and
(iii) no material damage to any assets or properties of any of the Brown Parties
by fire, flood, casualty, act of God or public enemy or other cause, regardless
of insurance coverage for such damage.
(d) Necessary Consents Received. The Brown Parties shall have
received all consents and approvals, in form and substance reasonably
satisfactory to Caldwell, to the transactions contemplated in this Agreement
from the other parties to all contracts, leases, agreements and permits to which
the Brown Parties (or any of them) are parties or by which they or any of their
assets or properties are affected, and from all Governmental Bodies, in each
case to the extent necessary under those contracts, leases, agreements or
permits or under Legal Requirements.
(e) No Litigation. No Proceeding shall have been instituted or, to
the knowledge of Brown, GSAC and Matrix, be Threatened, before any Governmental
Body by any Person, (1) making any challenge to, or seeking damages or other
relief in connection with, the transactions contemplated in this Agreement, or
(2) that may have the effect of restraining, enjoining or prohibiting, making
illegal or otherwise interfering with such transactions.
(f) No Claim Regarding Assets. No claim shall have been made or
Threatened by any Person asserting that such Person (1) is the holder or the
beneficial owner of, or has the right to acquire or to obtain beneficial
ownership of, any Assets, or (2) is entitled to all or any portion of the
Purchase Price payable for the Assets.
(g) [Intentionally Omitted]
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(h) Closing Documents. Matrix, GSAC and Brown shall have executed
and delivered to Caldwell and Caldwell Tanks a Non-Competition Agreement in a
form reasonably satisfactory to the Parties (the "Non-Competition Agreement"),
and which is consistent with Section 5 of the non-binding letter of intent
between Matrix and Caldwell Tanks dated March 24, 1999 (the "Letter of Intent"),
a Fabrication Services Agreement in a form reasonably satisfactory to the
Parties (the "Fabrication Services Agreement"), and which is consistent with
Section 6 of the Letter of Intent, the Assignment & Assumption Agreement, the
bills of sale, assignments and other instruments contemplated in Section 1.3,
the Broad Street Property Agreement and the Fayetteville Road Property Agreement
contemplated in Section 6.17, and the other certificates, instruments, legal
opinion and documents contemplated in Section 9, and each of the Subsidiaries
shall have executed and delivered the Subsidiary Bill of Sale to Brown.
(i) Section 2.5 Matters. Each of the actions contemplated in Section
2.5 as being taken, completed or effected at or prior to the Closing shall have
been so taken, completed or effected.
(j) Financing. Caldwell Tanks and Caldwell shall have received a
binding written commitment from a lender reasonably satisfactory to them to
provide financing to them at the Closing for the full amount of the Purchase
Price, on such terms and conditions and shall be satisfactory to Caldwell and
Caldwell Tanks.
(k) Environmental Review Report. Caldwell and Caldwell Tanks shall
have received, at their expense (except as otherwise provided below) an
environmental review report from a person satisfactory to Caldwell and Caldwell
Tanks as to the absence of any violation of any Environmental Laws, and the
absence of any Environmental, Health and Safety Liabilities, in each case that
could materially adversely effect any Brown Party, Caldwell, Caldwell Tanks or
any of their respective businesses, assets or property, or otherwise relating to
any of the Brown Parties or any of their businesses, assets or property. Matrix
agrees to reimburse Caldwell and Caldwell Tanks for one-half of all consulting
fees, costs and other expenses incurred by them in conducting a "Phase II"
environmental audit of the Brown Parties and their respective assets and
properties, regardless of whether the Closing shall occur, which amounts shall
be payable within ten (10) days after the
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written request therefor delivered by Caldwell to Matrix, together with
reasonable documentation of such fees, costs and expenses.
(l) Caldwell's Investigation. The due diligence investigation by
Caldwell's and Caldwell Tanks' Representatives in connection with the
transactions contemplated in this Agreement shall not have caused Caldwell,
Caldwell Tanks or their Representatives to become aware of any facts or
circumstances relating to the businesses, operations, properties, Liabilities,
financial condition, results of operation or affairs of any of the Brown Parties
that, in the sole judgment of Caldwell and Caldwell Tanks, make it inadvisable
for them to proceed with the Closing and the transactions contemplated in this
Agreement.
(m) Revised Exhibit B. The parties shall have dated, executed and
delivered to each other Revised Exhibit B as contemplated in Section
---------
2.2(a)(3)(C).
(n) Inventory. The physical inventory of all Inventory of the Brown
Parties contemplated in Section 2.2(b) shall have been completed, and the
Parties shall have mutually agreed in writing on the Assigned Inventory Price as
contemplated in that Section.
(o) Release of Encumbrances. Brown, Matrix and GSAC shall have
delivered to Caldwell and Caldwell Tanks evidence reasonably satisfactory to
Caldwell and Caldwell Tanks of the complete and absolute release and discharge
of all Encumbrances on the Assets, as contemplated in Section 7.2(f), below.
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(p) [Intentionally Omitted]
(q) [Intentionally Omitted]
(r) Accrued Vacation. The Parties shall have agreed upon the accrued
vacation for Non-Field Employees as contemplated in Section 6.13(a).
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(s) Termination of Employees. The Brown Parties shall have terminated
their employees as contemplated in Section 6.13(e).
(t) [Intentionally Omitted]
(u) Environmental Work Plan. The Parties shall have each executed and
delivered to the others an Environmental Work Plan in a form satisfactory to the
Parties (the "Environmental Work Plan"), pursuant to which they shall agree upon
a plan of action for addressing certain environmental issues associated with the
assets and properties of Brown, and an allocation of responsibility for those
environmental issues.
7.2 Conditions to Obligations of Brown, GSAC and Matrix. The
obligations of Brown to sell the Assets and of Matrix, GSAC and Brown to take
the other actions required to be taken by them at and subsequent to the Closing
are subject to the satisfaction at or prior to the Closing of each of the
following conditions, any one or more of which Matrix (for itself and for GSAC
and Brown) may waive in whole or in part at or prior to the Closing:
(a) Representations True. The representations and warranties of
Caldwell and Caldwell Tanks contained in this Agreement (considered
collectively) and each of the representations and warranties (considered
individually) must have been true and correct in all material respects as of the
Effective Date and the date of this Agreement, and must be true and correct in
all material respects on and as of the Closing Date (including those
representations and warranties which speak specifically as of the Effective Date
and the date of this Agreement) with the same effect as though such
representations and warranties had been made and this Agreement had been
delivered on and as of the Closing Date.
(b) Covenants Performed. All of the covenants, agreements and
conditions of Caldwell and Caldwell Tanks required to be performed or complied
with at or prior to the Closing pursuant to the terms of this Agreement
(considered collectively), and each of those covenants, agreements and
conditions (considered individually), must have been duly performed and complied
with in all material respects.
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(c) No Litigation. No Proceeding shall have been instituted or, to
the knowledge of Caldwell and Caldwell Tanks, be Threatened, before any
Governmental Body by any Person, (1) making any challenge to, or seeking damages
or other relief in connection with, the transactions contemplated in this
Agreement, or (2) that may have the effect of restraining, enjoining or
prohibiting, making illegal or otherwise interfering with such transactions.
(d) [Intentionally Omitted]
(e) Closing Documents. Caldwell and/or Caldwell Tanks shall have
executed and delivered to Matrix the Non-Competition Agreement, the Assignment &
Assumption Agreement, the Broad Street Property Agreement, the Fayetteville Road
Property Agreement, and the other certificates, instruments, legal opinion and
documents contemplated in Section 9.
(f) Bank Consent and Release. Matrix shall have obtained, at its
expense, the consent of Bank One, Oklahoma, N.A. to the consummation of the
transactions contemplated in this Agreement and the Ancillary Documents in
accordance with the Bank Agreement and in form and substance satisfactory to
Matrix and Caldwell, and Matrix shall have obtained, at its expenses, a complete
and absolute release and discharge of all Encumbrances on, against or affecting
any of the assets or properties of the Brown Parties (including without
limitation, the Fayetteville Road Property and the Broad Street Property, but
excluding the other Excluded Assets) and in favor of Bank One, Oklahoma, N.A. or
any other Person, arising under or in connection with the Bank Agreement or the
transactions relating thereto.
(g) Revised Exhibit B. The parties shall have dated, executed and
delivered to each other Revised Exhibit B as contemplated in Section
---------
2.2(a)(3)(C).
(h) Inventory. The physical inventory of all Inventory of the Brown
Parties contemplated in Section 2.2(b) shall have been completed, and the
Parties shall have mutually agreed in writing on the Assigned Inventory Price as
contemplated in that Section.
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(i) [Intentionally Omitted].
(j) Accrued Vacation. The Parties shall have agreed upon the
accrued vacation for Non-Field Employees as contemplated in Section 6.13(a).
(k) Environmental Work Plan. The Parties shall have executed and
delivered the Environmental Work Plan contemplated in Section 7.1(u).
8. Termination.
8.1 Termination of Agreement. This Agreement may be terminated only
as follows:
(a) Mutual Consent. Caldwell, Caldwell Tanks, Matrix, GSAC and
Brown may terminate this Agreement prior to the Closing by mutual written
agreement.
(b) Conditions Not Satisfied.
(1) Caldwell and Caldwell Tanks may terminate this Agreement
upon notice to Matrix, GSAC and Brown delivered at any time following June
24, 1999 and prior to the Closing, in the event any of the conditions set
forth in Section 7.1 have not been satisfied for any reason on or prior to
that date (other than any failure of such condition(s) to be so satisfied
by reason of a breach by Caldwell or Caldwell Tanks of any of their
covenants set forth in this Agreement), or have not been waived by Caldwell
or Caldwell Tanks on or prior to that date.
(2) Matrix (on behalf of itself, GSAC and Brown) may
terminate this Agreement upon notice to Caldwell and Caldwell Tanks
delivered at any time following June 24, 1999 and prior to the Closing, in
the event any of the conditions set forth in Section 7.2 have not been
satisfied for any reason on or prior to that date (other than any failure
of such condition(s) to be so satisfied by reason of a breach by Matrix,
GSAC or Brown of any of their respective covenants set forth in this
Agreement), or have not been waived by Matrix on or prior to that date.
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Notwithstanding the provisions of Sections 8.1(b)(1) and 8.1(b)(2), above,
Caldwell, Caldwell Tanks and Matrix each agree that, in the event the Closing
shall not have occurred on or before June 24, 1999 by reason of a failure of any
condition precedent set forth in Section 7.1 or 7.2 to have been satisfied or
waived, and in the event the failure of such condition precedent to be so
satisfied relates primarily to a failure by any Brown Party or any of their
assets or properties to comply with any Environmental Laws, or to any
Environmental, Health and Safety Liability of or relating to any Brown Party,
then Caldwell, Caldwell Tanks and Matrix shall each refrain from exercising
their respective termination right provided for above until September 10, 1999,
and shall continue until that date to reasonably cooperate with each other in an
attempt to satisfy that condition precedent.
(c) Breach by a Party. Either Caldwell and Caldwell Tanks, on the one
hand, or Matrix (on behalf of itself, GSAC and Brown), on the other hand, may
terminate this Agreement if a breach of any of the provisions of this Agreement
has been committed by the other Party(s) or, in the case of a termination by
Caldwell and Caldwell Tanks, committed by GSAC or Brown, and such breach (if
curable) has not been (i) cured by such other Party (or GSAC or Brown, as
applicable) within ten (10) days after notice thereof is delivered by Caldwell
and Caldwell Tanks or Matrix (as applicable), or (ii) waived by Caldwell and
Caldwell Tanks or Matrix (as applicable) at or prior to the Closing.
(d) Other Permitted Terminations. Caldwell and Caldwell Tanks may
terminate this Agreement as contemplated in Section 2.2(a)(3)(C), and Caldwell
and Caldwell Tanks, or Matrix, as applicable, may terminate this Agreement as
contemplated in Section ? or ?.
8.2 Effect of Termination. Each Party's right of termination under
Section 8.1 is in addition to, and not in lieu of, any other rights or remedies
that it may have under this Agreement, at law, in equity or otherwise, and the
exercise of a right of termination will not be an election of remedies. No such
termination shall be deemed to relieve any Party from responsibility for any
breach by it under this Agreement occurring prior to such termination.
9. Deliveries and Actions To Be Taken At The Closing.
9.1 Deliveries by Brown, GSAC and Matrix. Brown, GSAC and Matrix agree
to deliver (duly executed where appropriate) to Caldwell at the Closing each of
the following:
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(a) Assets. Exclusive right and possession of the Assets.
(b) Resolutions. Copies of resolutions duly adopted by the Boards of
Directors of Matrix, GSAC and Brown, approving the transactions contemplated in
this Agreement in a form reasonably satisfactory to Caldwell, certified by an
officer of each of Matrix, GSAC and Brown as being correct, complete and in full
force and effect as of the Closing Date.
(c) Certificate. A Certificate from a duly authorized officer of
Brown, GSAC and Matrix, dated the Closing Date, certifying as to the fulfillment
of the conditions set forth in Section 7.1.
(d) Matrix's Release and Other Evidence. Brown, Matrix and GSAC shall
deliver to Caldwell and Caldwell Tanks written evidence of the releases and
discharges contemplated in Section 7.1(o).
(e) Non-Competition Agreement. Matrix, GSAC and Brown shall execute
and deliver to Caldwell and Caldwell Tanks the Non-Competition Agreement.
(f) Vehicles. Brown shall execute and deliver to Caldwell all Title
Certificates and other documents of transfer required to transfer all of Brown's
vehicles to Caldwell in compliance with applicable Legal Requirements.
(g) Payment of Liens and Encumbrances. Written confirmation that the
Encumbrances (other than Permitted Encumbrances) set forth on Schedules
4.25(a)(1) and 4.29, or as disclosed on the reports referred to in Section 6.5
(other than those accepted or waived in writing by Caldwell), have been paid,
released and discharged.
(h) Opinion of Counsel. An opinion from Hall, Estill, Hardwick,
Gable, Golden & Nelson, P.C., counsel for Matrix, GSAC and Brown, in a form
reasonably satisfactory to Caldwell.
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(i) Fabrication Services Agreement. Caldwell and Matrix shall execute
and deliver the Fabrication Services Agreement.
(j) Other Ancillary Documents. GSAC, Matrix, Brown and each of the
Subsidiaries shall execute and/or deliver the Assignment & Assumption Agreement,
bill(s) of sale and other instruments contemplated in Section 1.3, the Broad
Street Property Agreement, the Fayetteville Road Property Agreement, the
Subsidiary Bill of Sale, the Environmental Work Plan contemplated in Section
7.1(u), and the title insurance policy contemplated in Section 6.4(e).
(k) [Intentionally Omitted]
(l) Other Documents. Such other documents as may be reasonably
necessary to effect the closing of the transactions contemplated in this
Agreement as such closing is herein contemplated.
9.2 Deliveries by Caldwell. Caldwell covenants to deliver (duly
executed where appropriate) to Brown, Matrix and GSAC at the Closing each of
the following:
(a) Caldwell's Resolutions. A copy of resolutions duly adopted by the
Board of Directors of Caldwell and Caldwell Tanks, approving the transactions
contemplated in this Agreement and in a form reasonably satisfactory to Brown,
Matrix and GSAC, certified by an officer of Caldwell and Caldwell Tanks as being
correct, complete and in full force and effect as of the Closing Date.
(b) Purchase Price. The Purchase Price, by means of a wire transfer
of immediately available federal funds to such account or accounts as Brown
shall direct in writing at least two (2) business days prior to the Closing
Date.
(c) Certificate. A Certificate from a duly authorized officer of
Caldwell and Caldwell Tanks, dated the Closing Date, certifying as to the
fulfillment of the conditions set forth in Section 7.2.
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(d) Other Ancillary Documents. Caldwell and Caldwell Tanks shall
execute and deliver the Assignment & Assumption Agreement, the Non-Competition
Agreement and the Environmental Work Plan contemplated in Section 7.1(u), and
Caldwell shall execute and deliver the Broad Street Property Agreement and the
Fayetteville Road Property Agreement.
(e) Opinion of Counsel. An opinion from Greenebaum Doll & McDonald
PLLC, counsel for Caldwell, in a form reasonably satisfactory to Brown, Matrix
and GSAC.
(f) Other Documents. Such other documents as may be reasonably
necessary to effect the closing of the transactions contemplated in this
Agreement as such closing is herein contem plated.
9.3 Actions and Deliveries Simultaneous. Notwithstanding the order of
the deliveries by the Parties set forth above, all actions and deliveries shall
occur simultaneously and none shall be deemed to have been completed until each
of the actions and deliveries set forth in this Section 9 has been completed or
has been waived by the Party entitled to make such waiver.
10. Indemnification; Remedies.
10.1 Survival; Right to Indemnification Not Affected by Knowledge. All
representations, warranties, covenants and obligations set forth in this
Agreement, the certificates delivered pursuant to Sections 9.1(c) and 9.2(c),
and any other certificate or document delivered pursuant to this Agreement will
survive the Closing; provided, that the representations and warranties (i) in
Sections 4.19 and 4.24(a) shall expire after 12 months from the Closing Date,
and (ii) in Sections 4.11, 4.12, 4.18 and 4.29 shall expire after 18 months from
the Closing Date. The right to indemnification, payment of "Damages" (as defined
in Section 10.2) or other remedies based on such representations, warranties,
covenants and obligations will not be affected by the Closing, by any earlier
termination of this Agreement, or by any investigation conducted by any Person
with respect to, or any knowledge acquired by any Person at any time, whether
before or after the execution and delivery of this Agreement or the Closing
Date, with respect to, the accuracy or inaccuracy of or compliance with any such
representation, warranty, covenant or obligation. The waiver of any condition
based on the accuracy of any representation or warranty, or on the
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performance of or compliance with any covenant or obligation, will not affect
the right to indemnification, payment of Damages or other remedy based on such
representations, warranties, covenants and obligations.
10.2 Indemnification and Payment of Damages By Matrix, GSAC and Brown.
Matrix, GSAC and Brown each agrees, jointly and severally, to defend, indemnify
and hold Caldwell Tanks, Caldwell, and their respective directors, officers,
shareholders, Affiliates, successors and assigns (collectively, "Caldwell
Indemnitees"), harmless from and against, and to pay to the Caldwell Indemnitees
the amount of, any and all debts, obligations, losses, claims, damages
(including without limitation, direct, indirect, special incidental and
consequential damages), Liabilities, deficiencies, Proceedings, demands,
assessments, Orders, judgments, writs, decrees, costs and other expenses
(including without limitation, costs of investigation and defense and reasonable
attorneys' and accountants' fees), and diminution of value, whether or not
involving a third-party claim, of any nature and of any kind whatsoever
(collectively, "Damages"), that may be suffered or incurred by them (or any of
them) resulting from, arising, directly or indirectly, out of or in connection
with (without duplication):
(a) any misrepresentation or breach of warranty made by Brown, GSAC or
Matrix in this Agreement or in any Ancillary Document; provided, that in the
event the Closing does not occur, the Caldwell Indemnitees shall be entitled to
be defended, indemnified and held harmless by Brown, Matrix and GSAC pursuant to
this Subsection (a) only to the extent that Brown, Matrix or GSAC knew or should
reasonably have known that the relevant representation or warranty was not true
and correct in all material respects (or with respect to a representation or
warranty that is expressly subject to materiality or that includes a specific
dollar threshold, in all respects) as of the Effective Date or the date of this
Agreement; it being understood that the foregoing limitation on recovery shall
have no relevance in the event the Closing shall occur;
(b) any breach by Brown, GSAC or Matrix of any covenant, agreement or
obligation of Brown, GSAC or Matrix in this Agreement or in any Ancillary
Document; and
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(c) the Retained Obligations (and each of them); it being understood
and agreed by Matrix, GSAC and Brown that the foregoing right of the Caldwell
Indemnitees to be defended, indemnified and held harmless from and against the
Retained Obligations may be exercised by the Caldwell Indemnitees regardless of
whether such Retained Obligations are the subject of any representations or
warranties set forth in Section 4 or any disclosure(s) by Matrix, GSAC or Brown
in connection with those representations and warranties, and regardless of
whether the Caldwell Indemnitees have a claim for indemnification regarding the
same Damages pursuant to Subsection (a) or (b) above (except to the extent
otherwise provided in the second to last sentence of Section 2.5(b)).
The remedies provided in this Section 10.2 shall not be exclusive of or limit
any other remedies that may be available to the Caldwell Indemnitees. All Damage
payments to Caldwell or Caldwell Tanks hereunder shall be deemed adjustments to
the Purchase Price.
10.3 Limitation on Matrix's Indemnification. Notwithstanding the
provisions of Section 10.2, Brown, Matrix and GSAC shall have no obligation to
indemnify or hold harmless any Caldwell Indemnitee pursuant to Section 10.2(a)
until such time as the sum of all Damages that are suffered or incurred by all
Caldwell Indemnitees, collectively, resulting from or arising out of all
misrepresentations and breaches of warranties shall exceed $50,000 in the
aggregate, at which time Brown, Matrix and GSAC shall indemnify and hold
harmless all Caldwell Indemnitees pursuant to Section 102 for all Damages then
and thereafter suffered or incurred by them, including without limitation, that
initial $50,000 in Damages. The foregoing limitation on the Caldwell
Indemnitees' right to indemnification shall not apply to any Damages resulting
from, arising out of or in connection with any of the matters described in
Section 10.2(b) or Section 10.2(c), notwithstanding that such Damages may also
be recoverable pursuant to Section 10.2(a).
10.4 Indemnification By Caldwell. Caldwell and Caldwell Tanks, jointly
and severally, shall defend, indemnify and hold Brown, Matrix and GSAC, and
their respective directors, officers, shareholders, Affiliates, successors and
assigns (collectively, the "Matrix Indemnitees"), harmless from and against, and
will pay to the Matrix Indemnitees the amount of, all Damages suffered or
incurred by them (or any of them) resulting from, arising directly or indirectly
out of or in
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connection with: (a) any misrepresentation or breach of warranty made by
Caldwell or Caldwell Tanks in this Agreement or in any Ancillary Document to
which it is a party; (b) following the Closing, the Assumed Obligations; and (c)
any breach by Caldwell or Caldwell Tanks of any covenant, agreement or
obligation of Caldwell or Caldwell Tanks in this Agreement or in any Ancillary
Document to which it is a party; but excluding any Damages resulting from,
arising out of or in connection with any Retained Obligations. Notwithstanding
the foregoing, in the event the Closing does not occur, the Matrix Indemnitees
shall be entitled to be defended, indemnified and held harmless by Caldwell and
Caldwell Tanks pursuant to Subclause 10.4(a), above, only to the extent that
Caldwell or Caldwell Tanks knew or should have known that the relevant
representation or warranty was not true and correct in all material respects as
of the date of this Agreement (it being understood that the foregoing limitation
on recovery shall have no relevance in the event the Closing shall occur). The
remedies provided in this Section 10.4 shall not be exclusive of or limit any
other remedies that may be available to the Matrix Indemnitees.
10.5 Procedure for Indemnification.
(a) Notice of Claims. Promptly after receipt by a Party (the
"Claiming Party") of notice of the commencement or assertion of any claim,
action, suit, Proceeding, arbitration, audit, hearing, investigation, Order or
litigation (each a "Claim") against it or any Caldwell Indemnitee (in the case
of Caldwell and Caldwell Tanks) or any Matrix Indemnitee (in the case of Brown,
Matrix and GSAC), and if a claim is to be made by the Claiming Party against any
other Party (the "Indemnifying Party") for indemnification with respect to that
Claim pursuant to Section 10.2 or 10.4 (as applicable), the Claiming Party shall
promptly give notice to the Indemnifying Party of the commencement or assertion
of such Claim; provided, that the failure to so notify the Indemnifying Party of
the commencement or assertion of such Claim will not relieve the Indemnifying
Party of any liability that it may have to any Caldwell Indemnitee or Matrix
Indemnitee (as applicable) hereunder, except to the extent that such
Indemnifying Party demonstrates that the defense of such action was prejudiced
by the Claiming Party's failure to give such notice. The notice contemplated
herein shall describe the Claim and the specific facts and circumstances in
reasonable detail, shall include a copy of any related notices or written claims
from third-parties, and shall indicate the amount, if known, or an estimate, if
possible, of the Damages that have been or may be suffered or incurred.
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(b) Assumption of Defense. If any Claim is brought against a Caldwell
Indemnitee or a Matrix Indemnitee and the Claiming Party gives notice to the
Indemnifying Party of such Claim, the Indemnifying Party will, unless the Claim
involves Taxes (which shall be resolved in accordance with the procedures in
Section 4.28), be entitled to participate in such Claim and, to the extent that
it wishes (unless (i) such Indemnifying Party is also a party to such Claim and
the Claiming Party determines in good faith that joint representation would be
inappropriate, or (ii) the Indemnifying Party fails to provide reasonable
assurance to the Claiming Party of its financial capacity to defend such Claim
and provide indemnification with respect to such Claim), to assume the defense
of such Claim with counsel reasonably satisfactory to the Claiming Party and,
after notice from the Indemnifying Party to the Claiming Party of its election
to assume the defense of such Claim, the Indemnifying Party will not, as long as
it diligently conducts such defense, be liable to the Claiming Party or the
other relevant Caldwell Indemnitee(s) or Matrix Indemnitee(s) (as applicable)
under this Section 10 for any fees of other counsel or any other expenses with
respect to the defense of such Claim, in each case subsequently incurred by the
Claiming Party or the other relevant Caldwell Indemnitee(s) or Matrix
Indemnitee(s) (as applicable) in connection with the defense of such Claim,
other than their reasonable costs of investigation. If the Indemnifying Party
assumes the defense of a Claim, (i) it will be conclusively established for
purposes of this Agreement that the Claim (and any resulting Damages) are within
the scope of and subject to indemnification by the Indemnifying Party; (ii) no
compromise or settlement of such claims may be effected by the Indemnifying
Party without the Claiming Party's consent unless (A) there is no finding or
admission of any violation of Legal Requirements or any violation of the rights
of any Person and no effect on any other Claims that may be made against the
Claiming Party or any other Caldwell Indemnitee or Matrix Indemnitee (as
applicable), and (B) the sole relief provided is monetary damages that are paid
in full by the Indemnifying Party; and (iii) the Claiming Party and each
relevant Caldwell Indemnitee or Matrix Indemnitee (as applicable) will have no
liability with respect to any compromise or settlement of such Claims effected
without its consent. The Claiming Party and any relevant Caldwell Indemnitee or
Matrix Indemnitee shall be entitled to participate (at its expense) in the
defense of any Claim assumed by the Indemnifying Party as contemplated herein.
If notice is given to an Indemnifying Party of any Claim and the Indemnifying
Party does not, within ten days after the Claiming Party's notice is given, give
notice to the Claiming Party of its election to assume the defense of such
Claim, the Indemnifying Party will no longer have the right to assume that
defense, and will be bound by
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any determination made in such Claim or any compromise or settlement effected by
the Claiming Party or any other Caldwell Indemnitee or Matrix Indemnitee (as
applicable).
(c) Exception. Notwithstanding the foregoing, if a Claiming Party or
any other Caldwell Indemnitee or Matrix Indemnitee (as applicable), determines
in good faith that there is a reasonable probability a Claim (other than a claim
arising under Section 10.2(c) hereof) may adversely affect it or its Affiliates
other than as a result of monetary damages for which it would be entitled to
indemnification under this Agreement, that party or Person may, by notice to the
Indemnifying Party, assume the exclusive right to defend, compromise or settle
such Claim, but the Indemnifying Party will not be bound by any determination of
a Claim so defended or any compromise or settlement effected without its consent
(which may not be unreasonably withheld).
(d) Other Claims. A claim for indemnification for any matter not
involving a third-party Claim may be asserted by notice to the Party from whom
indemnification is sought.
(e) Cooperation of Parties. The Party assuming the defense of any Claim
shall keep the other Party(s) reasonably informed at all times of the progress
and development of the Party's defense of and compromise efforts with respect to
such Claim, and shall furnish the other Party(s) with copies of all relevant
pleadings, correspondence and other papers. In addition, the Parties to this
Agreement shall cooperate with each other, and make available to each other and
their representatives all available relevant records or other materials
required by them for their use in defending, compromising or contesting any
Claim.
11. Arbitration.
11.1 Referral. If any dispute under this Agreement or any Ancillary
Document arises and the relevant Parties are unable to resolve such dispute, the
unresolved dispute shall be resolved by arbitration if a Party requests
arbitration in accordance with this Section 11. The place of arbitration shall
be in Louisville, Kentucky. Arbitration shall be conducted under the auspices of
the American Arbitration Association ("AAA"). Except as otherwise provided in
this Section 11, the Rules of the AAA shall govern all proceedings; and in the
case of conflict between the AAA Rules and this Agreement, the provisions of
this Agreement shall govern.
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11.2 Demand. Any Party may initiate arbitration by making a demand on
the other relevant Party(s) and simultaneously filing copies of the demand,
together with the required fees, with the AAA office in Louisville, Kentucky.
The demand shall contain those provisions required by the Rules of the AAA and
shall also request the AAA to designate and appoint one person as the
arbitrator, who shall act as the sole arbitrator to resolve the matter.
11.3 Discovery. The Parties shall have the right of discovery in
accordance with the Federal Rules of Civil Procedure except that discovery may
commence immediately upon the service of the demand for arbitration. A Party's
unreasonable refusal to cooperate in discovery shall be deemed to be refusal to
proceed with arbitration and, until AAA has designated the arbitrator, the
Parties may enforce their rights (including the right of discovery) in the
courts. Such enforcement in the courts shall not constitute a waiver of a
Party's right to arbitration. Upon his or her appointment, the arbitrator shall
have the power to enforce the Parties' discovery rights.
11.4 Binding Decision. The Parties shall be bound by the decision of
the arbitrator and accept his or her decision as the final determination of the
matter in dispute. The prevailing Party(s) shall be entitled to enter a judgment
in any court upon any arbitration award made pursuant to this Section 11. The
arbitrator shall award the costs and expenses of the arbitration, including
reasonable attorneys' fees, disbursements, arbitration expenses, arbitrators'
fees and the administrative fee of the AAA, to the prevailing Party as shall be
determined by the arbitrator. The dispute resolution procedure set forth in
this Section 11 shall be the sole procedure by which disputes between the
Parties under this Agreement or any Ancillary Document shall be resolved.
12. Miscellaneous Provisions.
12.1 Confidentiality of Agreement. Each Party agrees that it will treat
in confidence all Confidential Information which such Party shall have obtained
regarding the other Parties during the course of the negotiations leading to the
consummation of the transactions contemplated in this Agreement (whether
obtained before or after the date hereof), the investigation provided for herein
and the preparation of this Agreement and the Ancillary Documents, and in the
event the transactions contemplated in this Agreement shall not be consummated,
each Party will return to the other Parties all copies of Confidential
Information which have been furnished in connection herewith. Such Confidential
Information shall not be communicated to any third Person (other than to each
Party's
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counsel, accountants, financial advisors and lenders). No other Party shall use
any Confidential Information in any manner whatsoever except solely for the
purpose of evaluating the proposed purchase and sale of the Assets; provided,
that after the Closing, Caldwell, Caldwell Tanks and their Affiliates may use or
disclose any Confidential Information included in the Assets or the assets,
properties or rights of the Subsidiaries, or otherwise reasonably related to the
Subsidiaries or their assets, properties or rights. The obligation of each Party
to treat such documents, materials and other information in confidence shall not
apply to any Confidential Information which (a) is required to be disclosed
under applicable Legal Requirements or judicial process, but only to the extent
it must be disclosed, or (b) such Party reasonably deems necessary to disclose
to obtain any of the consents or approvals contemplated herein.
12.2 Consent to Jurisdiction. Each of the Parties hereto consents and
voluntarily submits to personal jurisdiction in the Commonwealth of Kentucky and
in the courts in such state located in Jefferson County and the United States
District Court for the Western District of Kentucky in any Proceeding arising
out of or relating to this Agreement or any Ancillary Document which is not
subject to arbitration as provided in Section 11, and agrees that all claims in
respect of the Proceeding may be heard and determined in any such court. Each
of the Parties hereto further consents and agrees that such Party may be served
with process in the same manner as a Notice may be given under Section 12.12.
Brown, GSAC and Matrix agree that any action instituted by any of them against
Caldwell with respect to this Agreement or any Ancillary Document will be
instituted exclusively in the United States District Court for the Western
District of Kentucky or, if such Court does not have jurisdiction to adjudicate
such action, in the Courts of the Commonwealth of Kentucky located in Jefferson
County. Brown, GSAC and Matrix irrevocably and unconditionally waive and agree
not to plead, to the fullest extent permitted by law, any objection that they
may now or hereafter have to the laying of venue or the convenience of the forum
of any action with respect to this Agreement or any Ancillary Document in the
United States District Court for the Western District of Kentucky and the Courts
of the Commonwealth of Kentucky located in Jefferson County. Each Party agrees
that a final judgment in any Proceeding so brought, and in any arbitration
proceeding pursuant to Section 11, shall be conclusive and may be enforced by
suit on the judgment or in any other manner provided by law or in equity, in any
court or other tribunal having competent jurisdiction.
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12.3 Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement and the Ancillary Documents. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement or the relevant Ancillary Document shall be construed as if drafted
jointly by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement or such Ancillary Document. Any reference to any
Legal Requirement shall be deemed also to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise. In the event of
any inconsistency between the statements in the body of this Agreement and those
in the Schedules (other than an exception expressly set forth as such in the
Schedules rather than in any agreement or document referred to in or attached to
such Schedule), the statements in the body of this Agreement will control. The
Parties intend that each representation, warranty, covenant and obligation
contained herein or in any Ancillary Document shall have independent
significance. If any Party has breached any representation, warranty, covenant
or obligation contained herein or in any Ancillary Document in any respect, the
fact that there exists another representation, warranty, covenant or obligation
relating to the same subject matter (regardless of the relative levels of
specificity) which the Party has not breached shall not detract from or mitigate
the fact that the Party is in breach of the first representation, warranty,
covenant or obligation. Unless the context clearly states otherwise, the use of
the singular or plural in this Agreement or in any Ancillary Document shall
include the other and the use of any gender shall include all others. All
references to "Section" or "Sections" in this Agreement refer to the
corresponding Section or Sections of this Agreement. Unless otherwise expressly
provided, the word "including" does not limit the preceding words or terms.
12.4 Entire Agreement. This Agreement embodies the entire agreement and
understanding of the Parties hereto with respect to the subject matter herein
contained, and supersedes all prior agreements, correspondence, arrangements and
understandings relating to the subject matter hereof, subject to Section 12.17.
This Agreement may be amended, modified, superseded, or canceled only by a
written instrument signed by all of the Parties hereto, and any of the terms,
provisions, and conditions hereof may be waived only by a written instrument
signed by the waiving Party.
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12.5 Exhibits and Schedules. All Exhibits to this Agreement and the
Schedules hereto shall constitute part of this Agreement and shall be deemed to
be incorporated herein by reference, in their entirety and made a part hereof,
as if set out in full at the point where they first are mentioned. References
in this Agreement to a specific Schedule shall refer solely to such Schedule and
shall not be deemed to include material included in any other Schedule, unless
the Schedule specifically states that the material is to be included in another
specified Schedule.
12.6 Expenses. Except as otherwise specifically provided in this
Section 12.6 or elsewhere in this Agreement or any Ancillary Document, each
Party to this Agreement will bear its respective expenses incurred in connection
with the preparation, execution and performance of this Agreement, the Ancillary
Documents and the transactions contemplated herein and therein, including all
fees and expenses of agents, representatives, counsel and accountants. In the
event of the termination of this Agreement, the obligation of each Party to pay
its or his own expenses will be subject to any rights of each party arising from
a breach of this Agreement by another party.
12.7 Governing Law. This Agreement is executed and delivered in, and
shall be governed by and construed in accordance with the laws of, the
Commonwealth of Kentucky, without giving effect to any conflict of law rule or
principle that might require the application of the laws of another
jurisdiction.
12.8 Headings. The headings in this Agreement are included for purposes
of convenience only and shall not be considered a part of this Agreement in
construing or interpreting any provision hereof.
12.9 Invalidity of Provisions; Severability. If any provision of this
Agreement or any Ancillary Document, or the application thereof to any Person or
circumstance, shall to any extent be held in any Proceeding to be invalid,
illegal or unenforceable, the remainder of this Agreement or such Ancillary
Document, or the application of such provision to persons or circumstances other
than those to which it was held to be invalid, illegal or unenforceable, shall
not be affected thereby, and shall be valid, legal and enforceable to the
fullest extent permitted by Legal Requirements, but only if and to the extent
such enforcement would not materially and adversely frustrate the parties'
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essential objectives as expressed herein and therein. Notwithstanding the
foregoing, each Party hereto agrees that it has reviewed the provisions of this
Agreement and each Ancillary Document, and that the same, taken as a whole, are
fair and reasonable. The Parties hereto shall endeavor in good faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions, the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
12.10 No Public Announcement. Neither Caldwell, Caldwell Tanks, Brown,
GSAC nor Matrix shall, without the approval of the others, make any press
release or other public announce ment concerning the transactions contemplated
in this Agreement, except as and to the extent that any such Party shall be so
obligated by law or the rules of any stock exchange, in which case the other
Party shall be advised and the Parties shall use their reasonable best efforts
to cause a mutually agreeable release or announcement to be issued; provided,
the foregoing shall not preclude communications or disclosures necessary to
implement the provisions of this Agreement and the Ancillary Documents or to
comply with Securities and Exchange Commission disclosure obligations. Matrix
and Caldwell Tanks will consult with each other concerning the means by which
Brown's employees, customers, and suppliers and others having dealings with the
Brown Parties will be informed of the transactions contemplated in this
Agreement, and Caldwell Tanks will have the right to be present for any such
communication.
12.11 No Third Party Beneficiaries. This Agreement is not intended to,
and shall not be construed to, confer upon any third Person any right, remedy or
benefit nor is it intended to be enforceable by any third Person, and shall only
be enforceable by the Parties hereto, and their respective successors and
permitted assigns.
12.12 Notices.
(a) Giving of Notices. All notices, requests, consents, approvals,
waivers, demands and other communications required or permitted to be given or
made hereunder or under any Ancillary Document (except to the extent otherwise
expressly contemplated in that Ancillary Document) (collectively, "Notices")
shall be given or made in writing and (1) personally delivered against a written
receipt, or (2) sent by confirmed telephonic facsimile, or (3) delivered to a
reputable express
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messenger service (such as Federal Express, DHL Courier and United Parcel
Service) for overnight delivery, addressed as follows (or to such other address
as a Party shall have given Notice to the other):
If to Brown: Brown Steel Contractors, Inc.
c/o Matrix Service Company
10701 East Ute Street
Tulsa, Oklahoma 74116
Attn: Chief Financial Officer
Fax: 918/838-8810
With a copy (which shall
not constitute notice) to: Larry W. Sandel, Esq.
Hall, Estill, Hardwick, Gable, Golden & Nelson
320 South Boston Avenue, Suite 400
Tulsa, Oklahoma 74103-3708
Fax: 918/594-0505
If to Matrix: Matrix Service Company
10701 East Ute Street
Tulsa, Oklahoma 74116
Attn: Chief Financial Officer
Fax: 918/838-8810
With a copy (which shall not
constitute notice) to: Larry W. Sandel, Esq.
Hall, Estill, Hardwick, Gable, Golden & Nelson
320 South Boston Avenue, Suite 400
Tulsa, Oklahoma 74103-3708
Fax: 918/594-0505
If to GSAC: Georgia Steel Acquisition Corp.
c/o Matrix Service Company
10701 East Ute Street
Tulsa, Oklahoma 74116
Attn: Chief Financial Officer
Fax: 918/838-8810
With a copy (which shall not
constitute notice) to: Larry W. Sandel, Esq.
Hall, Estill, Hardwick, Gable, Golden & Nelson
320 South Boston Avenue, Suite 400
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<PAGE>
Tulsa, Oklahoma 74103-3708
Fax: 918/594-0505
If to Caldwell Tanks: Caldwell Tanks, Inc.
4000 Tower Road
Louisville, Kentucky 40219
Attn: President
Fax: 502/966-8732
With a copy (which shall not
constitute notice) to: Patrick R. Northam, Esq.
Greenebaum Doll & McDonald PLLC
3300 National City Tower
Louisville, Kentucky 40202
Fax: 502/587-3695
If to Caldwell: Caldwell Tanks Alliance, LLC
c/o Caldwell Tanks, Inc.
4000 Tower Road
Louisville, Kentucky 40219
Attn: President
Fax: 502/966-8732
With a copy (which shall not
constitute notice) to: Patrick R. Northam, Esq.
Greenebaum Doll & McDonald PLLC
3300 National City Tower
Louisville, Kentucky 40202
Fax: 502/587-3695
(b) Time Notices Deemed Given. All Notices shall be effective upon
being properly personally delivered, or upon confirmation of a telephonic
facsimile, or upon the delivery to a reputable express messenger service. The
period in which a response to any such Notice must be given shall commence to
run from the date on the receipt of a personally delivered notice, or the date
of confirmation of a telephonic facsimile or two days following the proper
delivery of the Notice to a reputable express messenger service, as the case may
be.
12.13 Specific Performance. Brown, GSAC, Matrix, Caldwell Tanks and
Caldwell acknowledge and agree that the others would be damaged irreparably in
the event any of the
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<PAGE>
provisions of this Agreement or any Ancillary Document are not performed in
accordance with their specific terms or otherwise are breached. Accordingly,
Brown, GSAC and Matrix, on the one hand, and Caldwell Tanks and Caldwell on the
other, agree that the other(s) shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement or any
Ancillary Document, and to enforce specifically this Agreement and the Ancillary
Documents and the terms and provisions hereof and thereof in any action
instituted in any court of the United States or any state thereof having
jurisdiction over Caldwell, Caldwell Tanks, Brown, GSAC and Matrix and the
matter (subject to the provisions set forth in Section 12.2), in addition to any
other remedy to which it or he may be entitled, at law or in equity.
12.14 Successors and Assigns.
(a) Assignment. The rights of any Party under this Agreement shall
not be assignable by such Party hereto prior to the Closing without the consent
of the other Parties, except that the rights of Caldwell hereunder may be
assigned prior to the Closing, without the consent of Brown, GSAC or Matrix, to
any corporation all of the outstanding capital stock of which is owned or
controlled by Caldwell Tanks, or to any general or limited partnership, or
limited liability company or partnership, in which Caldwell Tanks or any such
corporation is a general partner or controlling member; provided that (1) such
assignment shall not result in Caldwell, Caldwell Tanks, GSAC, Matrix or Brown
having to amend its respective Notification and Report Form filed under the Hart
Scott Rodino Antitrust Improvements Act in connection with the transactions
contemplated herein, (2) the assignee shall assume in writing all of Caldwell's
obligations to Brown, Matrix and GSAC hereunder, (3) Caldwell shall not be
released from any of its obligations hereunder by reason of such assignment, and
(4) Brown's, Matrix's and GSAC's obligations under this Agreement shall be
subject to the delivery by such assignee, on or prior to the Closing Date, of a
certificate signed on its behalf containing representations and warranties
similar to those made by Caldwell in Section 5 and an opinion of counsel for
Caldwell with respect to the assignee which is similar to the opinion with
respect to Caldwell set forth in Section 9.2. Following the Closing, any Party
may assign any of its rights hereunder or under any Ancillary Document, but no
such assignment shall relieve it of its obligations hereunder; provided, that no
such assignment by Brown of any of its rights under the Broad Street Property
Agreement or the Fayetteville Road Property Agreement may be effected without
the prior written consent of Caldwell, except as otherwise expressly permitted
therein.
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(b) Successors. All of the terms, provisions and conditions of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the Parties hereto and their successors and permitted assigns. The
successors and permitted assigns hereunder shall include without limitation,
in the case of Caldwell, any permitted assignee as well as the successors in
interest to such permitted assignee (whether by merger, liquidation (including
successive mergers or liquidations) or otherwise). This Agreement and all of
its provisions and conditions are for the sole and exclusive benefit of the
Parties and their successors and permitted assigns.
12.15 Time of Essence. Time is of the essence to the performance of the
obligations set forth in this Agreement.
12.16 Waiver. The rights and remedies of the Parties to this Agreement
are cumulative and not alternative. Neither the failure nor any delay by any
Party in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable Legal Requirement, (a) no claim or right
arising out of this Agreement or the documents referred to in this Agreement can
be discharged by one Party, in whole or in part, by a waiver or renunciation of
the claim or right unless in writing signed by the other Parties, (b) no waiver
that may be given by a Party will be applicable except in the specific instance
for which it is given, and (c) no notice to or demand on one Party will be
deemed to be a waiver of any obligation of such Party or of the right of the
party giving such notice or demand to take further action without notice or
demand as provided in this Agreement or the documents referred to in this
Agreement.
12.17 Preservation of Claims. Notwithstanding anything contained in
this Agreement or in any Ancillary Document to the contrary, and except as
otherwise provided in the following sentence, the Parties agree that any
misrepresentation, breach of warranty or non-fulfillment of any covenant or
agreement by a Party under or in the Original Agreement occurring prior to the
execution and delivery of this Agreement shall be deemed for all purposes to be
a misrepresentation, breach of warranty or non-fulfillment of such covenant or
agreement by that Party under this
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Agreement, and shall entitled the other Parties to all rights and remedies as
may be contemplated in this Agreement the same as if this Agreement had been
executed and effective as of the Effective Date. Notwithstanding the foregoing,
in the event the Closing occurs, Caldwell and Caldwell Tanks shall not
thereafter: (a) have a right to bring a misrepresentation or breach of warranty
claim against Brown, GSAC or Matrix as of the Effective Date or the Closing Date
for any matter, event or circumstance that was not (but should have been)
included in any of the disclosure Schedules of Brown, GSAC and Matrix attached
to and made a part of the Original Agreement, to the extent such matter, event
or circumstance is expressly disclosed by Brown, GSAC and Matrix in their
disclosure Schedules delivered in connection with this Agreement and dated as of
August 31, 1999; (b) have a right to bring a claim for breach by Brown, GSAC
and/or Matrix of any of their covenants and agreements contained in Section 6.2
of the Original Agreement or Section 6.2 of this Agreement with respect to any
action, omission, event or circumstance arising following the Effective Date and
expressly disclosed by Brown, GSAC and Matrix in their above-described
disclosure Schedules dated as of August 31, 1999; or (c) have a right to bring a
misrepresentation or breach of warranty claim against Brown, GSAC or Matrix as
of the Effective Date or the Closing Date based upon any representation or
warranty contained in the Original Agreement if the relevant matter, event or
circumstance giving rise to such claim would not have given rise to such a
misrepresentation or breach of warranty claim under this Agreement had it,
rather than the Original Agreement, been executed and delivered as of the
Effective Date.
12.18 Bulk Sales Compliance. Caldwell hereby waives compliance by Brown
with the provisions of any bulk sales or bulk transfer laws of the State of
Georgia or any other applicable jurisdictions, and Matrix, GSAC and Brown hereby
agree to defend, indemnify and hold harmless each of the Caldwell Indemnitees of
and from any Damages they may suffer or incur by reason of such non-compliance,
including without limitation, Damages arising out of any claims by creditors of
Brown or the Subsidiaries.
12.19 Transfer Taxes. Notwithstanding anything contained in Section 4.28
or elsewhere in this Agreement or any Ancillary Document to the contrary, Brown
shall be solely responsible for, and agrees to pay and discharge when due, any
and all sales, use, transfer and other similar Taxes that may at any time be
assessed against any of the Parties by reason of the sale of the Assets
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contemplated herein, or otherwise by reason of the consummation of the
transactions contemplated in this Agreement and the Ancillary Documents.
Caldwell shall execute such documents as may be reasonably requested by Matrix
in order to qualify such sale or other transaction for any available exemptions
from such sales, use, transfer or other similar Taxes.
[Signatures Are on the Following Page]
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In Witness Whereof, the Parties hereto have duly executed this Agreement as
of the date first above written.
Caldwell Tanks, Inc.
By:____________________________________
Title:_________________________________
("Caldwell Tanks")
Caldwell Tanks Alliance, LLC
By: ___________________________________
Title:_________________________________
("Caldwell")
Brown Steel Contractors, Inc.
By:____________________________________
Title:_________________________________
(the "Brown")
Matrix Service Company
By:____________________________________
Title:_________________________________
("Matrix")
Georgia Steel Acquisition Corp.
By:____________________________________
Title:_________________________________
("GSAC")
<PAGE>
EXHIBIT A
CERTAIN DEFINED TERMS
As used in the Amended and Restated Stock Purchase Agreement and Conversion
to Asset Purchase Agreement dated as of August 31, 1999, among Caldwell Tanks,
Inc., Caldwell Tanks Alliance, LLC, Brown Steel Contractors, Inc., Georgia Steel
Acquisition Corp. and Matrix Service Company, the following capitalized terms
shall have the meanings set forth below. References hereto to particular
Sections shall refer to Sections of that Agreement, unless the context clearly
requires a different construction.
"Acquisition Balance Sheet" -- shall have the meaning set forth in Section
4.5.
"Accounts Receivable" -- shall mean, without duplication, (i) all Billings,
(ii) the unbilled amount of the Contract Price of any contract, agreement or
work order that is identified on Exhibit B but is no longer a WIP Contract as of
the Closing, as contemplated in Section 2.2(a)(3)(B) of the Agreement, and (iii)
all other accounts that would be reflected as an account receivable of the Brown
Parties on a balance sheet of the Brown Parties as of the Closing on the Closing
Date prepared in accordance with GAAP, in each case except as contemplated in
Section 2.2(c).
"Acquisition Balance Sheet" -- shall have the meaning set forth in Section
4.5.
"Affiliate" -- any Person that, directly or indirectly, through one or more
intermediaries, controls or is controlled by, or is under common control with,
the Person specified. For purposes of this definition, "control" means the
power, direct or indirect, to direct or cause the direction of the management
and policies of the relevant Person, whether by ownership of securities,
contract, law or otherwise.
"Agreement" -- this Amended and Restated Stock Purchase Agreement and
Conversion to Asset Purchase Agreement, the Exhibits hereto, including those
executed and delivered by one or more of the parties prior to or at the Closing
pursuant hereto, and the Schedules hereto.
"Ancillary Documents" -- shall have the meaning set forth in Section 4.1(a).
"Aqua Tanks" -- shall mean Aqua Tanks, Inc., a Georgia corporation.
"Assets" -- shall have the meaning set forth in Section 1.
"Assignment & Assumption Agreement" -- shall have the meaning set forth in
Section 2.5(a).
"Assumed Obligations" -- shall have the meaning set forth in Section 2.5(a).
"Audit Firm" -- shall have the meaning set forth in Section 2.2(b).
"Bank Agreement" -- shall mean collectively, (a) the Amended and Restated
Credit Agreement dated as of October 22, 1998, among Matrix, Brown, Brown Tanks,
Aqua Tanks, certain
<PAGE>
other Affiliates of Matrix and Bank One, Oklahoma, N.A. (as successor in
interest to Liberty Bank and Trust Company of Tulsa, National Association) (the
"Credit Agreement"), and (b) the "Loan Documents" (as defined in the Credit
Agreement).
"Base Price" -- shall have the meaning set forth in Section 2.1.
"Benefit Plans" -- shall have the meaning set forth in Section 4.14(a).
"best efforts", "reasonable best efforts", "commercially reasonable efforts"
and words of similar effect shall mean -- the efforts that a prudent Person
desirous of achieving a result would use in similar circumstances to ensure that
such result is achieved as expeditiously as possible; provided, however, that an
obligation to use best efforts under any agreement does not require the Person
subject to that obligation to take actions that would result in a materially
adverse change in the benefits to such Person of such agreement and the
transactions described therein.
"Billings" -- shall have the meaning set forth in Section 2.2(a)(3)(A).
"Bond" -- shall have the meaning set forth in Section 6.20.
"Broad Street Property" -- shall have the meaning set forth in Section 1.2.
"Broad Street Property Agreement" -- shall have the meaning set forth in
Section 6.17.
"Brown" -- shall have the meaning set forth in the preamble of this
Agreement.
"Brown Acquisition Agreements" -- shall have the meaning set forth in Section
6.13.
"Brown Agreements" -- shall have the meaning set forth in Section 4.26.
"Brown Parties" -- shall have the meaning set forth in Section 2.1.
"Brown Steel" -- shall mean Brown Steel Services, Inc., a Georgia
corporation.
"Brown Tanks" -- shall mean Brown Tanks, Inc., a Georgia corporation.
"Caldwell" -- shall have the meaning set forth in the preamble of this
Agreement.
"Caldwell Indemnitees" -- shall have the meaning set forth in Section 10.2.
"Caldwell Tanks" -- shall have the meaning set forth in the preamble of this
Agreement.
"Claim" -- shall have the meaning set forth in Section 10.5.
"Claiming Party" -- shall have the meaning set forth in Section 10.5.
"Closing" -- shall have the meaning set forth in Section 3.1.
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"Closing Date" -- shall have the meaning set forth in Section 3.2.
"Code" -- shall have the meaning set forth in Section 4.14(a).
"Compensation Plans" -- shall have the meaning set forth in Section 4.14.
"Completion Costs" -- shall have the meaning set forth in Section
2.2(a)(3)(C).
"Computers" -- shall have the meaning set forth in Section 4.12(a).
"Confidential Information" -- Any information which is proprietary in nature
and non-public or confidential, in whole or in part; provided however
Confidential Information shall not include any information in the possession of
the receiving Party (a) that is independently developed by the such Party, (b)
is learned from a third Person not under any duty of confidence to the
disclosing Party or (c) becomes part of the public domain through no fault of
the receiving Party.
"Consent" -- any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).
"Contamination" -- shall have the meaning set forth in Section 6.17.
"Contract Price" -- shall have the meaning set forth in Section 2.2(a)(3)(A).
"Control" -- shall have the meaning set forth in Section 4.4.
"Copyrights" -- shall have the meaning set forth in Section 4.18.
"Core Software" -- shall have the meaning set forth in Section 4.11(b).
"DB Plan" -- shall have the meaning set forth in Section 4.14(b).
"Damages" -- shall have the meaning set forth in Section 10.2.
"Delisting" -- shall have the meaning set forth in Section 6.17.
"Disputed Contract" -- shall have the meaning set forth in Section
2.2(a)(3)(C).
"EBITDA" -- shall mean the sum of net income from operations before the
effect of changes in accounting principles and extraordinary items, plus the
following expenses or charges to the extent deducted from net income in such
period: depreciation, amortization, depletion, interest expense and income
Taxes, all determined in accordance with GAAP.
"Effective Date" -- shall mean June 9, 1999.
"Employment Agreements" -- shall have the meaning set forth in Section 4.32.
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"Encumbrance" -- any charge, claim, community property interest, deed of
trust, condition, equitable interest, lien, mortgage, easement, encumbrance,
servitude, right of way, option, pledge, purchase agreement, conditional sale
agreement, proxy, security interest, right of first refusal, or restriction of
any kind, including any restriction on use, voting, transfer, receipt of income,
or exercise of any other attribute of ownership.
"Entity" -- any corporation (including any non-profit corporation), general
or limited partnership, limited liability company, joint venture, estate, trust,
association or any other type of business organization.
"Environment" -- soil, land surface or subsurface strata, surface waters
(including navigable waters, ocean waters, streams, ponds, drainage basins, and
wetlands), groundwaters, drinking water supply, stream sediments, ambient air
(including indoor air), plant and animal life, and any other environmental
medium or natural resource.
"Environmental, Health, and Safety Liabilities" -- any cost, damages,
expense, liability, obligation, or other responsibility arising from or under
Environmental Law or Occupational Safety and Health Law and consisting of or
relating to:
(a) any environmental, health, or safety matters or conditions (including
on-site or off-site contamination, occupational safety and health, and
regulation of chemical substances or products);
(b) fines, penalties, judgments, awards, settlements, legal or
administrative Proceedings, damages, losses, claims, demands and response,
investigative, remedial, or inspection costs and expenses arising under
Environmental Law or Occupational Safety and Health Law;
(c) financial responsibility under Environmental Law or Occupational
Safety and Health Law for cleanup costs or corrective action, including any
investigation, cleanup, removal, containment, or other remediation or response
actions ("Cleanup") required by applicable Environmental Law or Occupational
Safety and Health Law (whether or not such Cleanup has been required or
requested by any Governmental Body or any other Person) and for any natural
resource damages; or
(d) any other compliance, corrective, investigative, or remedial measures
required under Environmental Law or Occupational Safety and Health Law.
The terms "removal," "remedial," and "response action," include the types of
activities covered by the United States Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. (S) 9601 et seq., as amended
("CERCLA").
"Environmental Law" -- any Legal Requirement that requires or relates to:
(a) advising appropriate authorities, employees, and the public of
intended or actual releases of pollutants or hazardous substances or materials,
violations of discharge limits, or other prohibitions and of the commencements
of activities, such as resource extraction or construction, that could have
significant impact on the Environment;
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(b) preventing or reducing to acceptable levels the release of pollutants
or hazardous substances or materials into the Environment;
(c) reducing the quantities, preventing the release, or minimizing the
hazardous characteristics of wastes that are generated;
(d) assuring that products are designed, formulated, packaged, and used
so that they do not present unreasonable risks to human health or the
Environment when used or disposed of;
(e) protecting resources, species, or ecological amenities;
(f) reducing to acceptable levels the risks inherent in the
transportation of hazardous substances, pollutants, oil, or other potentially
harmful substances;
(g) cleaning up pollutants that have been released, preventing the threat
of release, or paying the costs of such clean up or prevention; or
(h) making responsible parties pay private parties, or groups of them,
for damages done to their health or the Environment, or permitting self-
appointed representatives of the public interest to recover for injuries done to
public assets.
"Environmental Work Plan" -- shall have the meaning set forth in Section
7.1(u).
"ERISA" -- the Employee Retirement Income Security Act of 1974 or any
successor law, and regulations and rules issued pursuant to that Act or any
successor law.
"Exchange Act" -- the Securities Exchange Act of 1934, as amended, or any
similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.
"Excluded Assets" -- shall have the meaning set forth in Section 1.2.
"Fabrication Services Agreement" -- shall have the meaning set forth in
Section 7.1(h).
"Facilities" -- any real property, leaseholds, or other interests currently
or formerly owned or operated by the Brown Parties (and each of them) and any
buildings, plants, structures, or equipment (including motor vehicles, tank
cars, and rolling stock) currently or formerly owned or operated by any of the
Brown Parties.
"Fayetteville Road Property" -- shall have the meaning set forth in Section
1.2.
"Fayetteville Road Property Agreement" -- shall have the meaning set forth in
Section 6.17.
"Field Employees" -- shall have the meaning set forth in Section 6.13(a).
"Financial Statements" -- shall have the meaning set forth in Section 4.5.
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"GAAP" -- generally accepted United States accounting principles,applied on a
basis consistent with the basis on which the Balance Sheet and the other audited
Financial Statements referred to in Section 4.5 were prepared.
"Georgia EPD" -- shall have the meaning set forth in Section 6.17.
"Governmental Authorization" -- any approval, consent, certificate,
registration, variance, exemption, right of way, franchise, privilege, immunity,
grant, ordinance, license, permit, waiver, or other authorization issued,
granted, given, or otherwise made available by or under the authority of any
Governmental Body or pursuant to any Legal Requirement.
"Governmental Body" -- any (a) nation, state, county, city, town, village,
district, or other jurisdiction of any nature; (b) federal, state, local,
municipal, foreign, or other government; (c) governmental or quasi-governmental
authority of any nature (including any governmental agency, branch, department,
official, or entity and any court or other tribunal); (d) multi-national
organization or body; or (e) body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, police, regulatory or taxing
authority or power of any nature.
"Hazardous Activity" -- the distribution, generation, handling, importing,
management, manufacturing, processing, production, refinement, Release, storage,
transfer, transportation, treatment or use (including any withdrawal or other
use of groundwater) of Hazardous Materials in, on, under, about, or from the
Facilities or any part thereof into the Environment, and any other act,
business, operation, or thing that increases the danger, or risk of danger, or
poses an unreasonable risk of harm to persons or property on or off the
Facilities, or that may affect the value of the Facilities or any of the Brown
Parties.
"Hazardous Materials" -- any waste or other substance that is listed,
defined, designated, or classified as, or otherwise determined to be, hazardous,
radioactive, or toxic or a pollutant or a contaminant under or pursuant to any
Environmental Law, including any admixture or solution thereof, and specifically
including petroleum and all derivatives thereof or synthetic substitutes
therefor and asbestos or asbestos-containing materials.
"Immaterial Liabilities" -- shall have the meaning set forth in Section
4.16(d).
"Immaterial Violations" -- shall have the meaning set forth in Section
4.16(a).
"Indemnifying Party" -- shall have the meaning set forth in Section 10.5.
"Intellectual Property" -- shall have the meaning set forth in Section 4.18.
"Interim Balance Sheet" -- shall have the meaning set forth in Section 4.5.
"Inventory" -- shall have the meaning set forth in Section 2.1.
"Inventory Price" -- shall have the meaning set forth in Section 2.1.
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"IRC" -- the Internal Revenue Code of 1986 or any successor law, and
regulations issued by the IRS pursuant to the Internal Revenue Code or any
successor law.
"IRS" -- the United States Internal Revenue Service or any successor agency,
and, to the extent relevant, the United States Department of the Treasury.
"Legal Requirement" -- any federal, state, local, municipal, foreign,
international, multina tional, or other Order, constitution, law, ordinance,
principle of common law, regulation, statute, or treaty.
"Letter of Intent" -- shall have the meaning set forth in Section 7.l(h).
"Liability" -- shall have the meaning set forth in Section 4.6.
"List" -- shall have the meaning set forth in Section 6.17.
"Marks" -- shall have the meaning set forth in Section 4.18.
"Matrix" -- shall have the meaning in the preamble of this Agreement.
"Matrix Indemnitees" -- shall have the meaning set forth in Section 10.4.
"Multiemployer Plans" -- shall have the meaning set forth in Section 4.14(a).
"Net Billings" -- shall have the meaning set forth in Section 2.2(a)(3)(A).
"Non-Competition Agreement" -- shall have the meaning set forth in Section
7.1(h).
"Non-Field Employees" -- shall have the meaning set forth in Section 6.13(a).
"Notices" -- shall have the meaning set forth in Section 12.12.
"Occupational Safety and Health Law" -- any Legal Requirement designed to
provide safe and healthful working conditions and to reduce occupational safety
and health hazards, and any program, whether governmental or private (including
those promulgated or sponsored by industry associations and insurance
companies), designed to provide safe and healthful working conditions.
"Order" -- any award, decision, injunction, judgment, writ, decree, order,
ruling, subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator or
arbitration panel.
"Ordinary Course of Business" -- an action taken by a Person will be deemed
to have been taken in the "Ordinary Course of Business" only if:
(a) such action is consistent with the past practices of such Person and
is taken in the ordinary course of the normal day-to-day operations of such
Person;
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(b) such action is not required to be authorized by the board of
directors of such Person (or by any Person or group of Persons exercising
similar authority) and is not required to be specifically authorized by the
parent company (if any) of such Person; and
(c) such action is similar in nature and magnitude to actions customarily
taken, without any authorization by the board of directors (or by any Person or
group of Persons exercising similar authority), in the ordinary course of the
normal day-to-day operations of other Persons of similar size and similarly
situated that are in the same line of business as such Person.
"Original Agreement" -- shall have the meaning set forth in Recital A to this
Agreement.
"Orion Contract" -- shall have the meaning set forth in Section 6.15.
"Other Agreements" -- shall have the meaning set forth in Section 2.5(a).
"Other Work-in-Process Contracts" -- shall have the meaning set forth in
Section 2.2(a)(3)(B).
"Parties" -- shall have the meaning set forth in the preamble of this
Agreement.
"Patents" -- shall have the meaning set forth in Section 4.18.
"PBGC" -- shall have the meaning set forth in Section 4.14(b).
"Pension Plans" -- shall have the meaning set forth in Section 4.14.
"Permitted Encumbrances" -- shall mean (i) such Encumbrances and minor
imperfections of title that have arisen only in the Ordinary Course of Business;
(ii) Encumbrances for current Taxes not yet due or for Taxes being contested in
good faith by appropriate proceedings; (iii) any inchoate mechanic's and
materialmen's Encumbrances for construction in process; (iv) any workmen's,
repairmen's, warehousemen's and carriers Encumbrances arising in the Ordinary
Course of Business; (v) easements, quasi-easements, rights of way, restrictive
covenants and land use ordinances and zoning plans which are matters of public
record; (vi) deposits or pledges to secure obligations under workers'
compensation, social security or similar laws or under unemployment insurance;
(vii) any "Permitted Exceptions" (as contemplated in Section 6.4(b)); and (viii)
deposits or pledges to secure bids, tenders, contracts (other than contracts for
the payment of money), leases, statutory obligations, surety and appeal bonds
and other obligations of like nature arising in the Ordinary Course of Business;
in each case to the extent the same do not and will not detract in any material
respect from the value (determined as if such Encumbrance did not exist) of, or
impair the use or enjoyment of, or impair the sale, transfer, conveyance or
assignment for fair value (determined as if such Encumbrance did not exist) of,
any assets subject thereto or the operation of the businesses of the Brown
Parties as currently conducted or of Caldwell as proposed to be conducted.
"Person" -- any individual, entity, organization, labor union, or other
entity or Governmental Body.
"Plate Roll Contract" -- shall have the meaning set forth in Section 1.
-8-
<PAGE>
"Preliminary Determination Date" -- shall have the meaning set forth in
Section 2.2(a)(3)(C).
"Proceeding" -- any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative or
informal, and whether in law or in equity) commenced, brought, conducted, or
heard by or before, or otherwise involving, any Governmental Body or arbitrator
or arbitration panel.
"Proprietary Property" -- all Marks, Patents, Copyrights, Rights in Mask
Works and Trade Secrets.
"Purchase Price" -- shall have the meaning set forth in Section 2.1.
"Real Property Agreements" -- shall have the meaning set forth in Section
6.17.
"Release" -- any spilling, leaking, emitting, discharging, depositing,
escaping, leaching, dumping or other releasing into the Environment, whether
intentional or unintentional.
"Remediation Levels" -- shall have the meaning set forth in Section 6.17.
"Remediation Notice" -- shall have the meaning set forth in Section 6.17.
"Representative" -- with respect to a particular Person, any director,
officer, employee, agent, consultant, advisor, or other representative of such
Person, including legal counsel, accountants, and financial advisors.
"Retained Obligations" -- shall have the meaning set forth in Section 2.5.
"Revised Exhibit B" -- shall have the meaning set forth in Section
---------
2.2(a)(3)(C).
"Rights in Mask Work" -- shall have the meaning set forth in Section 4.18(a).
"Securities Act" -- the Securities Act of 1933, as amended, or any similar
Federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect from time to time.
"Software" -- shall have the meaning set forth in Section 4.11(b).
"Subsidiaries" -- shall mean Brown Tanks, Aqua Tanks and Brown Steel.
"Subsidiary Bill of Sale" -- shall have the meaning set forth in Section
2.5(d).
"Survey" -- shall have the meaning set forth in Section 6.4(d).
"Tax" -- shall have the meaning set forth in Section 4.28.
"Tax Return" -- shall have the meaning set forth in Section 4.28.
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<PAGE>
"Threat of Release" -- a substantial likelihood of a Release that may require
action in order to prevent or mitigate damage to the Environment that may result
from such Release.
"Threatened" -- a claim, Proceeding, dispute, action, or other matter will be
deemed to have been "Threatened" if any demand or statement has been made
(orally or in writing) or any notice has been given (orally or in writing), or
if any other event has occurred or any other circumstances exist, that would
lead a prudent Person to conclude that such a claim, Proceeding, dispute,
action, or other matter is likely to be asserted, commenced, taken, or otherwise
pursued in the future.
"Undisclosed Liabilities" -- shall have the meaning set forth in Section 4.6.
"Welfare Plans" -- shall have the meaning set forth in Section 4.14.
"WIP Contracts" -- shall have the meaning set forth in Section 2.2(a)(3)(B).
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<PAGE>
EXHIBIT A-2
EXCLUDED ASSETS
1. All cash on hand of the Brown Parties as of the Closing Date ($300,000 as of
May 31, 1999).
2. All Accounts Receivable of the Brown Parties as of the Closing Date, other
than Accounts Receivable relating to the Other Work-in-Process Contracts as
provided in Section 2.2(c).
3. The capital stock of the Subsidiaries.
4. The minute book and stock ledger of Brown and the Subsidiaries.
5. All prepaid assets and tax related assets of the Brown Parties as of the
Closing Date (zero at May 31, 1999).
6. The Broad Street Property.
7. The Fayetteville Property.
8. The ASME Code stamp.
9. The contractor's licenses and similar business licenses listed on Schedule
4.10(b).
10. Claims by GSAC, Matrix and Brown against the Browns (as defined in Section
4.32) arising out of or related to the representations and warranties made
in, and the transactions contemplated by, the Stock Purchase Agreement
referred to in Section 4.32.
<PAGE>
EXHIBIT D
PURCHASE PRICE ALLOCATION
The Purchase Price shall be allocated among the Assets in the manner set
forth below. In the event the Base Price shall be adjusted upward or downward
following the Closing pursuant to the application of Section 2.2(a) or Section
2.2(c), the Base Price as so adjusted shall continue to be allocated in the
percentages set forth below. Any adjustment upward or downward in the Inventory
Price following the Closing, pursuant to the application of Section 2.2(b),
shall serve to increase or decrease by a like amount the Inventory Price set
forth below. The Inventory Price set forth below shall also constitute the
agreement of Caldwell and Brown as to their estimate of the Inventory Price as
of the Closing (the Assigned Inventory Price) as contemplated in Section 2.2(b).
Base Price:
----------
Allocated Amount
----------------
Machinery & Equipment $ 3,421,400*
Inventory Price (To Be
---------------
Allocated Solely to Inventory) $ 848,183
* * * * * * *
_____________________
* Subject to Adjustment Following the Closing.
<PAGE>
EXHIBIT 99.2
COVENANT AND AGREEMENT NOT-TO-COMPETE
This Covenant and Agreement Not-To-Compete ("Agreement") is entered into as
of this 31st day of August, 1999, by and among Matrix Service Company, a
Delaware corporation ("Matrix"), Georgia Steel Acquisition Corp., an Oklahoma
corporation ("GSAC"), Caldwell Tanks, Inc., a Kentucky corporation ("Caldwell
Tanks"), Caldwell Tanks Alliance, LLC, a Georgia limited liability company
("Caldwell"), and Brown Steel Contractors, Inc., a Georgia corporation
("Brown").
Recitals:
A. Pursuant to the terms of a certain Amended and Restated Stock Purchase
Agreement and Conversion to Asset Purchase Agreement, dated as of August 31,
1999, as amended (the "Purchase Agreement"), among Matrix, GSAC, Caldwell,
Caldwell Tanks and Brown, Caldwell is this day acquiring certain assets and
properties of Brown, and the other parties to the Purchase Agreement are
engaging in certain other transactions as contemplated therein.
B. In connection with those transactions, the parties desire to enter into
this Agreement to provide that Brown, Matrix and GSAC will not engage in certain
activities that are detrimental to or competitive with Caldwell and/or Caldwell
Tanks, and that Caldwell and Caldwell Tanks will not engage in certain other
activities that are detrimental to or competitive with Brown, Matrix and GSAC.
C. It is a condition to the closing of Brown's sale and Caldwell's
purchase of the assets and properties of Brown, and to the other transactions
contemplated in the Purchase Agreement, that Matrix, GSAC, Caldwell, Caldwell
Tanks and Brown enter into this Agreement.
Agreement:
Now, Therefore, in consideration of the premises and for other valuable
consideration, the receipt of which is hereby acknowledged, the parties hereby
agree as follows:
1. Covenants Not-To-Compete.
1.1 Matrix Parties Covenant Not to Compete; Right of First Refusal.
Brown, Matrix and GSAC each hereby covenants and agrees with Caldwell and
Caldwell Tanks that for a period of five (5) years following the date hereof,
Brown, Matrix and GSAC shall not, and shall not cause or permit any of their
Affiliates to, directly or indirectly: (a) construct, fabricate, manufacture,
install, market, sell, design, lease or license, operate, maintain or repair
elevated water tanks, except as a subcontractor for Caldwell or Caldwell Tanks;
or (b) engage in any manner in the business of designing equipment, facilities
or methodologies for, procuring or selling equipment or facilities for,
contracting equipment or facilities for, providing project management regarding
equipment or facilities for, or otherwise consulting or providing other services
in connection with, cooling the air for combustion turbines used in any
industry; in either case anywhere within the "Territory" (as defined in Section
74.), whether for its own account or for the account of any other Person;
provided, that the foregoing covenants and agreements of Brown, Matrix and GSAC
shall not
<PAGE>
prohibit them (or any of their Affiliates) from engaging in any of the following
activities at any time within the Territory: (i) providing goods and services to
customers pursuant to any warranty, guaranty or other similar obligations under
contracts or agreements that are Retained Obligations as of the date hereof; or
(ii) serving in the capacity as a general contractor (or its equivalent) in
connection with the design, repair, construction, installation, retrofit or
refurbishment of any cogeneration power production facilities (or any portions
thereof) that include or involve equipment or processes for cooling the air for
combustion turbines used in such facilities. In the event Brown, Matrix, GSAC or
any of their Affiliates serve in the capacity as a general contractor (or its
equivalent) as contemplated in (ii) above, and in the event its duties or
authority include the performances of services and/or the provision of equipment
or other goods in connection with or relating to cooling the air for combustion
turbines used in such facilities, or the retention of one or more subcontractors
to perform those services or provide that equipment or those goods, then Matrix
shall, and shall cause Brown, GSAC, its other relevant Affiliate or the relevant
customer (as applicable) to, first afford Caldwell Tanks or its designated
Affiliate the right and option to perform or provide the same services,
equipment and/or goods for the benefit of Brown, Matrix, GSAC, their Affiliate
or the relevant customer (as applicable) as would be performed or provided by
Brown, Matrix, GSAC, their Affiliate or the relevant subcontractor(s), upon
terms that are no less favorable to Caldwell Tanks (or such Affiliate) than
those available to Brown, Matrix, GSAC, their Affiliate or the relevant
subcontractor(s). Matrix agrees to promptly notify Caldwell Tanks of each
opportunity to provide such services, equipment or goods, and shall include with
such notice a copy of any relevant contract(s) or subcontract(s), and a
description in reasonable detail of the nature of the services, equipment and/or
goods to be provided and the terms and conditions thereof. Caldwell Tanks shall
have a period of ten (10) days following its receipt of all such information to
exercise its right and option upon written notice delivered to Matrix or the
relevant customer (in the case of a right and option directly granted by that
customer).
1.2 Caldwell and Caldwell Tanks Covenants Not to Compete. Caldwell
and Caldwell Tanks each hereby covenants and agrees with Brown, Matrix and GSAC
that for a period of five (5) years following the date hereof, neither Caldwell
nor Caldwell Tanks shall, nor shall Caldwell Tanks permit any of its other
Affiliates to, directly or indirectly, construct, fabricate, manufacture,
install, market, sell, design, lease or license, operate, maintain or repair
above-ground petroleum storage tanks for the petro-chemical industry anywhere
within the Territory, whether for its own account or for the account of any
other Person (other than for Matrix or its Affiliates); provided, that the
covenants and agreements of Caldwell and Caldwell Tanks set forth in this
Section 1.2 shall immediately terminate and become null and void in the event,
during the above-described five-year period (a) Caldwell Tanks shall sell,
convey or transfer substantially all of its assets and properties to any
Person(s) that is not presently an Affiliate of Caldwell Tanks or of any of its
current shareholders (each a "Third-Party"), or (b) greater than 50% of the
outstanding voting common stock of Caldwell Tanks becomes owned of record or
beneficially by any one or more Third-Parties, in either case whether pursuant
to one transaction or a series of related transactions with Caldwell Tanks
and/or its current shareholders.
1.3 Certain Covered Activities. The parties each agree that any of
the following actions on the part of Matrix, GSAC, Caldwell, Caldwell Tanks or
Brown shall be deemed to be a violation of their respective covenants and
agreements set forth in Section 1.1 or 1.2 (as applicable);
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<PAGE>
provided, that such activities shall not be deemed to be exclusive of any other
actions which may also violate those covenants and agreements:
(a) If such party shall directly or indirectly enter the employ of,
or render any service to (other than services in the ordinary course of that
party's business which do not relate in any material respect to the provision of
services of the type(s) described in Sections 1.1 or 1.2 (as applicable) above),
or act in concert with, any Person engaged in any business or in the rendering
of any service of the type contemplated in Section 1.1 or 1.2, as applicable (a
"Competing Business");
(b) If such party shall directly or indirectly engage in any such
Competing Business for its, his or her own account;
(c) If such party shall become interested, directly or indirectly,
in any such Competing Business as an individual, partner, shareholder, member,
director, officer, principal, agent, consultant or in any other relationship or
capacity (other than as a subcontractor providing services in the ordinary
course of that party's business which do not relate in any material respect to
the provision of services of the type(s) described in Sections 1.1 or 1.2 (as
applicable) above); provided that the purchase of a publicly traded security of
a corporation engaged in such business or service shall not in itself be deemed
violative of this Agreement so long as that party does not own, directly or
indirectly, more than one percent (1%) of the securities of such entity; or
(d) If such party is engaged outside of the Territory in any of the
activities described above, and maintains a business address or telephone
listing with respect to those activities anywhere in the Territory.
2. Confidentiality Covenants.
2.1 Brown, Matrix and GSAC Confidentiality Covenants. Brown, Matrix
and GSAC shall not, and shall not cause or permit any of their Affiliates to, at
any time hereafter, divulge, furnish or make accessible to any Person any know-
how, information, methods, systems or other confidential information or trade
secrets with respect to the business, assets, operations or financial affairs of
Brown or any of its subsidiaries immediately prior to the consummation of the
transactions contemplated in the Purchase Agreement.
2.2 Caldwell and Caldwell Tanks Confidentiality Covenants. Caldwell
and Caldwell Tanks shall not, and Caldwell Tanks shall not cause or permit any
of its other Affiliates to, at any time hereafter, divulge, furnish or make
accessible to any Person any know-how, information, methods, systems or other
confidential information or trade secrets with respect to the business, assets,
operations or financial affairs of Brown (other than the assets and properties
purchased by Caldwell on the date hereof), Matrix or GSAC.
3. Nonsolicitation of Employees by Brown, Matrix and GSAC. Brown, Matrix and
GSAC shall not, nor shall they cause or permit any of their Affiliates to, for a
period of five (5) years following the date hereof, individually or on behalf of
any other Person, entice or induce, directly or indirectly, any employee of
Caldwell or any of its subsidiaries as of the date immediately
-3-
<PAGE>
following the date hereof to leave the employment of Caldwell (or such
subsidiary) to work with Brown, Matrix or GSAC, or with any other Person with
whom Brown, Matrix or GSAC is or becomes affiliated; provided, that the
foregoing covenant shall not apply to or prohibit solicitations made by Brown,
Matrix or GSAC to the public generally through print or e-mail solicitations or
advertising.
4. No Disparagement.
4.1 No Disparagement by Brown, Matrix and GSAC. Brown, Matrix and
GSAC shall not at any time publicly disparage Caldwell or Caldwell Tanks or
their respective business, operations, financial condition, reputation, products
or services, or any of their respective directors, officers, employees or
Affiliates.
4.2 No Disparagement by Caldwell or Caldwell Tanks. Neither
Caldwell nor Caldwell Tanks shall at any time publicly disparage Brown, Matrix
or GSAC or its business, operations, financial condition, reputation, products
or services, or any of its directors, officers, employees or Affiliates.
5. Reasonableness of Scope and Duration. Matrix, GSAC, Caldwell,
Caldwell Tanks and Brown acknowledge and agree that the covenants and agreements
contained in this Agreement are, taken as a whole, fair and reasonable in their
geographic scope and duration, and neither Matrix, GSAC, Caldwell, Caldwell
Tanks nor Brown shall raise any issue of the reasonableness of the scope or
duration of any such covenants or agreements in any proceeding to enforce any
such covenants or agreements.
6. Cumulative Remedies. The parties each acknowledge that Matrix, GSAC,
Brown, Caldwell Tanks and Caldwell have consummated the transactions
contemplated in the Purchase Agreement in reliance, among other things, upon the
fulfillment by the other parties hereto of their respective covenants and
agreements made in this Agreement. Each party understands and agrees that the
others may not be adequately compensated by damages for a breach of any of the
covenants and agreements contained herein, and that such other parties shall
each, in addition to all other remedies, be entitled to injunctive relief and
specific performance. Each party hereby affirmatively waives the requirement
that any other party post any bond, demonstrate the likelihood of irreparable
damage or demonstrate that any actual damages will be suffered as a result of
such party's breach of any provision of this Agreement. Nothing contained
herein shall be construed as prohibiting any party from pursuing any other
remedies available to it, for such breach or threatened breach, including,
without limitation, the recovery of money damages, and each party shall also be
entitled to the payment of any and all reasonable fees, disbursements, and other
charges of the attorneys and collection agents, court costs, and all other costs
incurred in enforcing its rights and remedies under this Agreement.
7. Definitions. The following terms, when used in this Agreement, shall
have the meanings set forth below:
7.1 Affiliate. Any Person controlled by, controlling or under common
control with such Party. For the purposes of this definition of Affiliate,
"control" of a Person means the power,
-4-
<PAGE>
direct or indirect, to direct or cause the direction of the management and
policies of such Person, whether by ownership of securities, contract, law or
otherwise; and the terms "controlling" and "controlled" shall have meanings
correlative to the foregoing.
7.2 Governmental Body. Any (i) nation, state, county, city, town,
village, district or other jurisdiction of any nature; (ii) federal, state,
local, municipal, foreign or other government; (iii) governmental or quasi-
governmental authority of any nature (including, without limitation, any
governmental agency, branch, department, official or entity and any court or
other tribunal); (iv) multi-national organization or body; or (v) body
exercising, or entitled to exercise, any administrative, executive, judicial,
legislative, police, regulatory or taxing authority or power of any nature; or
(vi) any other Person.
7.3 Person. Any individual, corporation (including, without
limitation, any non-profit corporation), general or limited partnership, limited
liability partnership or company, joint venture, estate, trust, association,
unincorporated organization, labor union, or other entity or Governmental Body.
7.4 Territory. All of the Continental United States.
8. Miscellaneous.
8.1 Binding Effect. All of the terms, provisions and conditions of
this Agreement shall be binding on Matrix, GSAC, Caldwell, Caldwell Tanks and
Brown, and their respective successors and permitted assigns, and shall inure to
the benefit of and be enforceable by Matrix, GSAC, Caldwell, Caldwell Tanks,
Brown and their respective successors and permitted assigns.
8.2 Limitation or Invalidation of Provisions; Severability.
(a) The covenants and agreements contained in this Agreement
shall be construed as separate covenants and agreements, and if any court shall
finally determine that the restraints provided for in any such covenants and
agreements are too broad as to the area, activity or time covered, said area,
activity or time covered shall be reduced to whatever extent the court deems
reasonable, and such covenants and agreements shall be enforced as to such
reduced area, activity or time.
(b) If any provision of this Agreement is limited as described
in Section 8.2(a) above, or the application of any provision of this Agreement
to any Person or circumstance shall to any extent be held in any proceeding to
be invalid, illegal or unenforceable, the remainder of this Agreement, or the
application of such provision to Persons or circumstances other than those to
which it was held to be invalid, illegal or unenforceable, shall not be affected
thereby, and shall be valid, legal and be enforceable to the fullest extent
permitted by law, but only if and to the extent such enforcement would not
materially and adversely frustrate the parties' essential objectives as
expressed herein.
-5-
<PAGE>
8.3 Construction and Interpretation of Agreement.
(a) Section titles or captions used in this Agreement are included
for purposes of convenience only, and shall not be considered a part of the
Agreement in construing or interpreting any of its provisions. All references in
this Agreement to Sections shall refer to Sections of this Agreement unless the
context clearly otherwise requires.
(b) When used in this Agreement, the word "including" shall have
its common meaning and any list of items that may follow such word shall not be
deemed to represent a complete list of the contents of the referent of the
subject.
(c) The parties have participated jointly in the negotiation and
drafting of this Agreement. If any ambiguity or question of intent or
interpretation arises, no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement.
(d) Unless the context otherwise requires, when used in this
Agreement, the singular shall include the plural, the plural shall include the
singular, and all nouns, pronouns and any variations thereof shall be deemed to
refer to the masculine, feminine or neuter, as the identity of the person or
persons may require.
(e) The parties do not intend that this Agreement shall confer on
any third party any right, remedy or benefit or that any third party shall have
any right to enforce any provision of this Agreement.
8.4 Exclusive Forum. Any action to enforce any provision of this
Agreement shall be instituted exclusively in the United States District Court
for the Western District of Kentucky or, if such Court does not have
jurisdiction to adjudicate such action, in the courts of the Commonwealth of
Kentucky located in Jefferson County. The parties irrevocably and
unconditionally waive and shall not plead, to the fullest extent permitted by
law, any objection that they may now or hereafter have to the jurisdiction of
such courts over the parties, the laying of venue or the convenience of the
forum of any action related to this Agreement that is brought in the United
States District Court for the Western District of Kentucky or in the Courts of
the Commonwealth of Kentucky located in Jefferson County.
8.5 Entire Agreement. This Agreement embodies the entire agreement and
understanding of the parties with respect to the subject matter herein
contained, and supersedes all prior agreements, correspondence, arrangements and
understandings relating to the subject matter hereof. No representation,
promise, inducement or statement of intention has been made by any party which
has not been embodied in this Agreement, and no party shall be bound by or be
liable for any alleged representation, promise, inducement or statement of
intention not so set forth. This Agreement may be amended, modified, superseded,
or canceled only by a written instrument signed by all of the parties, and any
of the terms, provisions, and conditions hereof may be waived, only by a written
instrument signed by the waiving party. Failure of any party at any time or
times to require performance of any provision hereof shall not be considered to
be a waiver of any succeeding breach of such provision by any party.
-6-
<PAGE>
8.6 Governing Law. This Agreement shall be governed by the laws of
the Commonwealth of Kentucky without giving effect to any conflict of law rule
or principle that might require the application of the laws of another
jurisdiction.
8.7 Notices.
(a) Giving of Notices. All notices, requests, consents,
approvals, waivers, demands and other communications required or permitted to be
given, made or delivered hereunder (collectively, "Notices") shall be deemed to
have been given if in writing and (1) personally delivered against a written
receipt, or (2) sent by confirmed telephonic facsimile, or (3) delivered to a
reputable express messenger service (such as Federal Express, DHL Courier and
United Parcel Service) for overnight delivery, addressed as follows (or to such
other address as a party shall have given Notice to the others):
If to Brown, Matrix or GSAC: c/o Matrix Service Company
10701 East Ute Street
Tulsa, Oklahoma 74116
Attn: Chief Financial Officer
Fax: 918/838-8810
With a copy (which shall not
constitute notice) to: Larry W. Sandel, Esq.
Hall, Estill, Hardwick, Gable,
Golden & Nelson
320 South Boston Avenue, Suite 400
Tulsa, Oklahoma 74103-3708
Fax: 918/594-0505
If to Caldwell or Caldwell Tanks: c/o Caldwell Tanks, Inc.
4000 Tower Road
Louisville, Kentucky 40219
Attn: President
Fax: 502/966-8732
With a copy (which shall not
constitute notice) to: Patrick R. Northam, Esq.
Greenebaum Doll & McDonald PLLC
3300 National City Tower
Louisville, Kentucky 40202
Fax: 502/587-3695
(b) Time Notices Deemed Given. All Notices shall be effective
upon being properly personally delivered, or upon confirmation of a telephonic
facsimile, or upon the delivery to a reputable express messenger service. The
period in which a response to any such Notice must be given shall commence to
run from the date on the receipt of a personally delivered Notice, or the date
of confirmation of a telephonic facsimile or two days following the proper
delivery of the Notice to a reputable express messenger service, as the case may
be.
-7-
<PAGE>
8.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original copy of this
Agreement and all of which, when taken together, shall be deemed to constitute
one and the same agreement.
In Witness Whereof, the parties have entered into this Agreement as of the
date first written above.
Matrix Service Company
By:____________________________
Title:_________________________
("Matrix")
Georgia Steel Acquisition Corp.
By:____________________________
Title:_________________________
("GSAC")
Caldwell Tanks, Inc.
By:____________________________
Title:_________________________
("Caldwell Tanks")
Caldwell Tanks Alliance, LLC
By:____________________________
Title:_________________________
("Caldwell")
Brown Steel Contractors, Inc.
By:____________________________
Title:_________________________
("Brown")
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<PAGE>
EXHIBIT 99.3
FACILITIES USE AND PURCHASE OPTION AGREEMENT
(Broad Street Property Agreement)
BETWEEN
BROWN STEEL CONTRACTORS, INC.
AND
CALDWELL TANKS ALLIANCE, LLC
AUGUST 31, 1999
<PAGE>
FACILITIES USE AND PURCHASE OPTION AGREEMENT
--------------------------------------------
(Broad Street Property Agreement)
THIS FACILITIES USE AND PURCHASE OPTION AGREEMENT ("Agreement") is made and
entered into as of this 31st day of August, 1999, by and between (i) Brown Steel
Contractors, Inc., a Georgia corporation ("Brown"), and (ii) Caldwell Tanks
Alliance, llc, a Georgia limited liability company ("Caldwell") (collectively,
the Parties").
Recitals:
A. Brown, certain of its Affiliates, Caldwell and Caldwell Tanks, Inc.
are parties to an Amended and Restated Stock Purchase Agreement and Conversion
to Asset Purchase Agreement dated as of August 31, 1999 (the "Purchase
Agreement"), pursuant to which, among other transactions, Brown agreed to sell
to Caldwell at the Closing certain Assets of Brown, upon and subject to the
terms and conditions set forth in the Purchase Agreement.
B. It was a condition to the Closing and the obligations of Caldwell and
Caldwell Tanks, Inc. under the Purchase Agreement and the other Ancillary
Documents contemplated therein that Brown enter into this Agreement with
Caldwell.
C. This Agreement is the Broad Street Property Agreement contemplated in
the Purchase Agreement, and capitalized terms used but not defined herein shall
have their same respective meanings as in the Purchase Agreement.
Agreement:
Now, Therefore, in consideration of the premises, the payment by Caldwell
to Brown of the sum of Ten Dollars ($10.00), and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Parties agree as
follows:
<PAGE>
1. Option to Purchase Broad Street Property.
(a) Option. Brown hereby grants and conveys to Caldwell (and/or to
any Person(s) designated in writing by Caldwell) an exclusive and irrevocable
(except as otherwise provided in Section 3) right and option to purchase all of
Brown's rights, title and interests under, in and to the real property of Brown
located in Coweta County, Georgia at 57 East Broad Street, Newnan, Georgia
30263, as more particularly described on Exhibit A attached hereto and made a
---------
part hereof, including without limitation (i) any buildings, improvements,
structures, fixtures, shrubs, trees, plants and appurtenances situated thereon
or thereunder, any mineral rights in respect thereof, and any water rights and
other rights appurtenant to that real property, and (ii) all easements and
hereditaments appertaining to that real property, including all rights, title
and interest of Brown (if any) in and to the streets, alleys, ways, easements
and rights-of-way abutting or adjoining that real property (collectively, the
"Broad Street Property"), free and clear of all Encumbrances other than
Permitted Encumbrances, and upon and subject to the terms and conditions set
forth in this Agreement (the "Option"). The Option may be exercised by Caldwell
(or its designee), in its discretion, at any time during the period commencing
on the date hereof and expiring on the third (3rd) anniversary of the date
hereof (the "Option Period"), upon delivery of written notice of exercise to
Brown during the Option Period in accordance with Section 12.12 of the Purchase
Agreement (the "Exercise Notice"). Caldwell shall be obligated to exercise the
Option to the extent required under Section 6.17 of the Purchase Agreement, but
not otherwise. Should Caldwell (or its designee) exercise the Option, this
Agreement shall thereupon constitute a binding agreement of sale between Brown,
on the one hand, and Caldwell and such designee, on the other hand, with respect
to the Broad Street Property.
(b) Option Purchase Price.
(i) Upon the exercise of the Option by Caldwell or its designee,
the aggregate purchase price ("Purchase Price") payable by Caldwell (or
such designee) to Brown for the Broad Street Property shall be the sum of
One Million Seven Hundred Forty Thousand Dollars ($1,740,000), without
interest or other adjustment (except for any accrued and unpaid User Fees
(as hereinafter defined)), which shall be payable by Caldwell or such
designee in
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immediately available funds at the "Closing" of the purchase as
contemplated below. The obligation to pay the Purchase Price shall be joint
and several as between Caldwell and any designee thereof.
(ii) Brown shall be entitled to no other compensation or
benefits from Caldwell or its designee (if any) in the event Caldwell or
such designee shall fail or refuse for any reason to exercise the Option;
provided, that the foregoing shall not release Caldwell or Caldwell Tanks
of or from any liability arising out of their breach of Section 6.17 of the
Purchase Agreement by reason of the failure or refusal by Caldwell or its
designee to exercise the Option during the Option Period as required
thereunder.
(c) Closing. Upon the exercise of the Option, the closing of the
purchase and sale of the Broad Street Property hereunder (the "Closing") shall
occur on the thirtieth (30th) day following the delivery by Caldwell (or its
designee) to Brown of the Exercise Notice described above; provided, that in the
event the 30th day following such notice falls on a Saturday or Sunday, the
Closing shall occur on the Monday next following that 30th day. The Closing
shall occur at the offices of Greenebaum Doll & McDonald PLLC in Louisville,
Kentucky at 10:00 a.m. local time on the appointed date. Notwithstanding the
foregoing, the Parties may agree upon a different date, time and/or place for
the Closing, provided such agreement is in writing. At the Closing, Brown shall
deliver absolute possession of the Broad Street Property to Caldwell or its
designee (if any).
(d) Investigation. From the date hereof through the expiration or
earlier termination of this Agreement, Brown shall afford to the Representatives
of Caldwell (and its designee, if any) complete access to the Broad Street
Property and the records of Brown (including computer files, retrieval programs
and similar documentation and such access and information that may be necessary
in connection with an environmental audit) to the extent Caldwell shall deem
necessary or desirable, and shall furnish to Caldwell, its designee and their
authorized Representatives such additional information concerning the Broad
Street Property as shall be reasonably requested, including all such information
as shall be reasonably necessary or appropriate to enable Caldwell, its designee
and their Representatives to verify the accuracy of the representations and
warranties contained in this Agreement or the Purchase Agreement, and to verify
that the covenants of Brown contained in this
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Agreement and the Purchase Agreement have been complied with. Caldwell agrees
that such investigation shall be conducted in such a manner as will not
interfere unreasonably with the operations of Brown. No investigation made by
Caldwell, its designee or their Representatives hereunder shall affect the
representations and warranties of Brown made in this Agreement or in the
Purchase Agreement.
(e) Title Insurance. Brown will obtain, at its cost and expense, and
deliver to Caldwell within ten (10) days after the date of delivery of an
Exercise Notice, a commitment to issue the following title insurance with
respect to the Broad Street Property, meeting the following requirements, at the
Closing:
(i) Commitment. With respect to each parcel of real estate
included in the Broad Street Property (each, a "Parcel"), a commitment to
issue an ALTA Owner's Policy of Title Insurance (Form 10/17/92 or its
nearest equivalent if a Parcel is located in a jurisdiction in which Form
10/17/92 is not available) (each a "Commitment"), which Commitment(s) shall
be issued by a title insurer reasonably satisfactory to Caldwell,
committing to insure the interest of Caldwell (and its relevant
designee(s)) in each Parcel for an amount equal to the Purchase Price.
(ii) State of Title. Within ten (10) days after the receipt by
Caldwell of a Commitment for a Parcel, Caldwell shall notify Brown of any
exceptions to title contained in that Commitment which Caldwell (or its
designee) finds, in its reasonable discretion, to be unacceptable to
Caldwell (or such designee). Thereafter, Brown shall within five (5) days
notify Caldwell of its intention to take such action as may be necessary to
remove the exceptions objected to from the Commitment, and an endorsement
to that Commitment shall be issued at least two (2) days prior to the
Closing deleting the exceptions so objected to from that Commitment. All
exceptions to title or survey issues as to each Parcel as to which Caldwell
(and its designee) shall not object (or shall subsequently withdraw its
objection) shall be deemed to be "Permitted Exceptions."
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(iii) Further Commitment Requirements. In addition to the
matters set forth in (i) and (ii) above, each Commitment shall further
commit (A) to insure title to all recorded easements benefitting that
Parcel, (B) to issue an ALTA Endorsement 3.1 (or equivalent) as to that
Parcel, and (C) to issue a standard "non-imputation" endorsement.
(iv) Title at Closing. At the Closing, the state of title to
each Parcel shall be such that the title company issuing the Commitment for
that Parcel shall be prepared to and shall issue a title policy on the form
mandated by Subsection (e)(i) above, insuring the interest of Caldwell (and
its relevant designee) in that Parcel as a valid fee simple interest, (A)
subject only to the Permitted Exceptions, (B) having deleted therefrom the
standard exceptions for parties in possession, survey, rights of way and
easements not of record and mechanics and materialmans liens, (C) insuring
that the Parcel as described in the policy is the same property as is
described in the Survey for that Parcel identified on Exhibit A attached
---------
hereto, (D) insuring the contiguity of the Parcel if the Parcel consists of
more than one tract or lot, and (E) insuring direct and unencumbered
pedestrian and vehicular access to the Parcel from each street or roadway
adjacent to the Parcel. In the event the actual state of title to each
Parcel is not as described above, the Closing regarding that Parcel shall
not occur absent the prior written consent of Caldwell.
(f) Further Assurances. Each of the Parties hereto shall, at any
time following an exercise of the Option by Caldwell (or its designee), and from
time to time, either before or after the Closing, upon the request of the
appropriate Party, do, obtain, execute, acknowledge and deliver, or will cause
to be done, obtained, executed, acknowledged and delivered, all such further
acts, consents, assignments, transfers, conveyances, and assurances as may be
reasonably required to complete the transactions contemplated in this Section 1.
(g) Permits. The Parties agree to reasonably cooperate with and
assist each other, at their respective cost and expense, upon an exercise of the
Option to effect the transfer or assignment to Caldwell (or its designee) of any
existing Governmental Authorizations of Brown relating to or required for the
operation of the Broad Street Property (to the extent not previously transferred
or assigned to Caldwell as contemplated in the Purchase Agreement), and agree to
file
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any notices, requests, applications and the like with all relevant Governmental
Bodies in connection with those Government Authorizations (or their assignment
or transfer), including without limitation, any notices of the change in control
and ownership of the Broad Street Property required under applicable Legal
Requirements for the continued use, maintenance and effectiveness of such
Governmental Authorizations by Caldwell (or its designee).
(h) No Assumption of Obligations. Caldwell and its designee (if any)
shall not, by reason of any exercise of the Option, any purchase of the Broad
Street Property or otherwise, be deemed to have assumed or to in any manner have
become responsible or liable for, and Brown agrees that it shall retain, pay,
perform and discharge in full, any and all debts, obligations and liabilities of
Brown of any nature, whether or not relating to the Broad Street Property, and
whether known or unknown, accrued or unaccrued, fixed, absolute, contingent or
otherwise, including without limitation, any liabilities relating to any
Contamination as contemplated in Section 6.17 of the Purchase Agreement;
provided, that the foregoing provisions of this Section 1(h) shall not, and are
not intended to, (x) eliminate, reduce or diminish (i) the agreement of Caldwell
to pay, perform and discharge the Assumed Obligations, or (ii) the agreement of
Caldwell to indemnify the Brown Indemnitees as provided in Section 2(f) of this
Agreement, or (y) except to the extent the same are Retained Obligations,
obligate Brown with respect to any matter arising after the Closing under this
Agreement (other than for the performance of Brown's covenants expressly set
forth herein).
(i) Representations and Warranties. At the Closing, and upon
delivery of the Deed contemplated in Section (j), below, Brown shall be deemed
to have once again made to Caldwell (and its designee, if any) as of that date
each of the representations and warranties of Brown set forth in the following
Sections of the Purchase Agreement (limited to this Agreement or the Broad
Street Property where the context requires): 4.1, 4.7(g) (except for such
casualties, damages, destruction of losses that have been cured and remain cured
as of the Closing), 4.7(n), 4.7(p) (except for such disposals consisting of land
or of any part of the building or of any other property having a value,
individually or in the aggregate, of not more than $50,000), 4.7(u) (subject to
the qualification that any material adverse effect on the business referred to
therein is to the business of Caldwell), 4.10, 4.16 (but only to the extent that
the matters referred to therein are not the subject of the Environmental Work
Plan or the remediation activities of Brown referred to in Section 6.17 of the
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Purchase Agreement), 4.24 and 4.33; provided, that Brown shall have no
responsibility or liability to Caldwell (or its designee) to the extent those
representations and warranties (or any of them) prove to be inaccurate in any
respect as of the Closing by reason of any actions or omissions on the part of
Caldwell or the Caldwell Group (as hereinafter defined), other than Matrix and
its Affiliates, occurring following the date hereof and prior to the Closing, or
by reason of any matter as to which the Brown Indemnitees are entitled to
indemnification as provided in Section 2(f) hereof.
(j) Delivery of Deed. At the Closing, Brown agrees to deliver to
Caldwell (or its designee) a Deed of Special Warranty in form reasonably
satisfactory to Caldwell (the "Deed"), conveying good and marketable fee simple
title to the Broad Street Property to Caldwell (and/or such designee, as
applicable), free and clear of all Encumbrances other than Permitted
Encumbrances. Brown shall be obligated to pay all transfer Taxes due and owing
in respect of the Deed, and Caldwell shall be obligated to cause the Deed to be
recorded and to pay the recording costs thereof. Caldwell (and its designee)
hereby waive any breach of the warranties contained in the Deed except to the
extent the same also constitute a breach of any of the representations and
warranties to be made by Brown as of the Closing as contemplated in Section 1(i)
of this Agreement and except to the extent the same are also Retained
Obligations.
(k) Sales Taxes, Etc. Notwithstanding anything contained in this
Agreement, the Purchase Agreement or any other Ancillary Document to the
contrary, Brown shall be solely responsible for, and agrees to pay and discharge
when due, any and all sales, use, transfer and other similar Taxes that may at
any time be assessed against any of the Parties or Caldwell's designee by reason
of the sale of the Broad Street Property contemplated herein, or otherwise by
reason of the consummation of the transactions contemplated in this Agreement.
(l) Status of Title to Property; Compliance. From the date hereof
through the Closing (or any earlier expiration or termination of the Option as
contemplated in Section 3), Brown agrees not to grant or permit any Encumbrances
(other than Permitted Encumbrances) against or on the Broad Street Property, not
to transfer or convey (whether voluntarily or involuntarily) Brown's fee simple
interest (or any portion thereof) in the Broad Street Property, and not to grant
or create any leasehold interest or other similar interest in or regarding the
Broad Street Property, in any case
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without the prior written consent of Caldwell. Furthermore, Brown agrees to
comply with each and every covenant and restriction of record and affecting the
Broad Street Property.
2. Use of Certain Facilities.
(a) Grant of Right and License. Brown hereby grants to Caldwell, for
itself and its suppliers, customers, Affiliates, Representatives and other
invitees (collectively, the "Caldwell Group"):
(i) an exclusive and irrevocable (except as contemplated in
Section 3) right and license, commencing on the date hereof and continuing
until the third (3rd) anniversary of such date (or until an earlier
termination of this right and license as contemplated in Section 3), to use
and maintain, from time-to-time, for any lawful purpose or purposes, any
and all building(s), facilities, fixtures and other improvements now or
hereafter located on or appurtenant to the Broad Street Property
(collectively, the "Facilities"), including without limitation, to use
those Facilities for the fabrication of steel plate and piping in support
of the elevated water tank businesses of Caldwell and its Affiliates in the
same manner as was conducted by Brown or its Affiliates prior to the date
hereof; and
(ii) full right of access to, and ingress and egress over, the
Broad Street Property throughout that three-year period, to the extent
necessary for the full use and enjoyment by Caldwell (and such other
Persons) of the Facilities in accordance with this Section 2.
Brown agrees that it will not grant to any other Person (other than Caldwell and
such other Persons described above) any right to utilize any of the Facilities
throughout the term of this Agreement (and will not use those Facilities for
Brown's own account), and further agrees that it will not cause or permit any of
Brown's Representatives or any other Persons to enter onto the Broad Street
Property for any reason other than (A) to ensure compliance by Caldwell with the
provisions of this Agreement, (B) to undertake the Contamination remediation
efforts contemplated in Section 6.17 of the Purchase Agreement, or (C) to
address or remediate any other Environmental, Health and
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Safety Liabilities or any violation of Environmental Laws in compliance with
those laws or the provisions of the Environmental Work Plan, or (D) to enable
Brown to comply with the terms and provisions of this Agreement, including
without limitation the provisions of Section 1(i) hereof (and then only to the
extent their entrance or presence on the Broad Street Property will not
unreasonably interfere with Caldwell's use, enjoyment and maintenance of the
same). Brown shall be solely responsible for, and shall defend, indemnify and
hold harmless Caldwell and its Affiliates and Representatives from and against,
any and all Damages that they may suffer or incur by reason of the entrance or
presence of those Representatives on the Broad Street Property, but only to the
extent not caused by the negligence or wilful misconduct of the Caldwell Group
(other than Matrix and its Affiliates). Brown agrees that the rights granted to
Caldwell as contemplated herein shall continue in force and effect following the
third (3rd) anniversary of the date hereof until the Closing pursuant to any
exercise by Caldwell of the Option in accordance with Section 1. Notwithstanding
anything contained herein to the contrary, Caldwell shall not use the Facilities
in any manner that would cause or result in a breach by Caldwell or Caldwell
Tanks of any of their covenants or agreements set forth in the Non-Competition
Agreement. Caldwell shall be entitled, throughout the term of this Agreement,
and to the maximum extent permissible under applicable Legal Requirements, to
rely upon, and to use and maintain the buildings, facilities, fixtures and other
improvements on the Broad Street Property pursuant to, all Governmental
Authorizations of Brown relating to that property.
(b) Payments by Caldwell.
(i) In consideration of the right and license granted to it as
contemplated above, Caldwell agrees to pay to Brown, each month during the
Term of that right and license (prorated for partial months), a user fee of
$10,875, without escalation or adjustment at any time hereafter (the "User
Fee"). The User Fee for a particular month shall become due and payable to
Brown on the fifth (5th) day of the month immediately following the month
for which due, and shall be paid in immediately available funds. Upon the
expiration or any earlier termination of the right and license (and related
access rights) granted to Caldwell pursuant to this Section 2, Brown shall
be entitled to receive the User Fee prorated through the date of expiration
or termination, but shall be entitled to no other compensation or benefits
in exchange for the right and license (and those access rights) granted to
Caldwell.
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(ii) Caldwell shall also pay or reimburse Brown for all taxes
and similar impositions which may be levied, assessed or imposed upon the
Broad Street Property accruing or becoming due and payable during the term
of this Agreement, provided that any such taxes shall be prorated between
Brown and Caldwell as of the date of this Agreement for the first year and
as of the expiration date of this Agreement for the last year. Caldwell
shall not be required to pay any tax, assessment, tax lien or other
imposition or charge upon or against the Broad Street Property, or any part
thereof, or the improvements situated thereon, so long as Caldwell shall,
in good faith and with due diligence, contest the same or the validity
thereof by appropriate legal proceeding which shall have the effect of
preventing the collection of the tax, assessment, tax lien or other
imposition or charge so contested.
(iii) During the term of this Agreement, Caldwell shall procure
and maintain policies of insurance, at its own cost and expense, insuring
the following:
(a) The improvements situated upon the Broad Street
Property against loss or damage by fire, lightning, wind storm, hail
storm, aircraft, vehicles, smoke, explosion, riot or civil commotion
as provided by the standard fire and extended coverage policy and all
other risks of direct physical loss as insured against under special
extended coverage endorsement. The insurance coverage shall be for
not less than $2,750,000 with all proceeds of insurance payable to
Caldwell, subject to the obligation of Caldwell provided in Section
2(g) below.
(b) Brown, the Matrix Indemnitees and Caldwell from all
claims, demands or actions for injury to or death of any person in an
amount of not less than Two Million Dollars ($2,000,000) for injury to
death of more than one person in any one occurrence to the limit of
One Million Dollars ($1,000,000), and for damage to property in an
amount of not less than Seven Hundred Fifty Thousand Dollars
($750,000) made by or on behalf of, any person or persons, firm or
corporation arising from, related to or connected with the Broad
Street Property.
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Such insurance shall be with companies and in form, substance and
amount (where not stated above) satisfactory to Brown.
(iv) Caldwell shall pay the cost of all utilities and service to
the property, including gas, water, sewer and electricity, incurred during
the term of this Agreement.
(c) Maintenance of Facilities; Limited Scope. Throughout the term of
the right and license granted to it pursuant to this Section 2, Caldwell shall,
at its expense, maintain the Facilities used by it in good working condition and
repair, ordinary wear and tear excepted (but subject to the obligations of
Brown, GSAC and Matrix under the Purchase Agreement and the other Ancillary
Documents with respect to the Retained Obligations and any misrepresentation(s)
or breach(es) of warranty by Brown, GSAC or Matrix with respect to the
Facilities or the condition thereof). Subject to those obligations on the part
of Brown, GSAC and Matrix, Caldwell shall be solely responsible for any Damages
that it or its Affiliates or Representatives may suffer or incur resulting from
or arising out of their use of or access to any of the Facilities pursuant to
that right and license. The Parties acknowledge that neither Caldwell nor any
of its Affiliates are, by reason of the right and license granted in this
Section 2 or otherwise, acquiring any interests (whether leasehold or otherwise)
in the fee simple title held by Brown in the Broad Street Property on the date
hereof, nor are Caldwell or any of its Affiliates undertaking any responsibility
(whether to Brown, its Affiliates or any other Persons) for the Contamination or
any other conditions at, affecting or relating to the Broad Street Property as
of the date hereof, for any future consequences of those conditions, or for any
resulting Environmental, Health and Safety Liabilities or violations of
applicable Legal Requirements, it being expressly understood and agreed that all
such responsibility shall remain a Retained Obligation from and after the date
hereof unless and to the extent any related Damages are the result of any
actions or inaction (where they had a duty or obligation to act) of the Caldwell
Group (other than Matrix or any of its Affiliates).
(d) Additions to Facilities. During the term of its right and
license under this Section 2, Caldwell shall be entitled, at its expense, to
construct on the Broad Street Property, and to install on or in connection with
the Facilities, such enhancements and improvements thereto as Caldwell shall
determine and as shall not materially damage or otherwise materially adversely
affect
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the use or value of the Facilities (including without limitation, the new or
modified paint booth facilities contemplated in the Environmental Work Plan),
provided such enhancements and/or improvements otherwise comply with all
applicable Legal Requirements. Upon their construction or installation, all such
enhancements and improvements shall constitute part of the Broad Street Property
for all purposes, shall be the property of Brown, and shall become subject to
the Option; provided, that upon the exercise of the Option Caldwell (or its
designee) shall not be obligated to pay any additional amounts above the
Purchase Price to purchase those enhancements and/or improvements. In the event
the right and license provided for in this Section 2 shall expire or be
terminated as contemplated in Section 3, and thereafter the Option shall expire
in accordance with its terms prior to any exercise of the same by Caldwell or
its designee, then Caldwell shall be deemed to have abandoned all such
enhancements and improvements, and the same shall remain the property of Brown.
(e) Cooperation. Caldwell and Brown agree to reasonably cooperate
with each other and their Representatives in order to permit Brown to undertake
and satisfy the matters referred to in clauses (A) through (D) of Section 2(a)
hereof, while at the same time minimizing the adverse effects of such activities
by Brown on the business and operations of Caldwell on the Broad Street
Property.
(f) Caldwell Indemnity. Caldwell hereby agrees to indemnify Brown
and its Affiliates for any Damages they may suffer by reason of (i) the use or
occupancy by Caldwell of the Broad Street Property during the term of this
Agreement, including any accident, injury to or death of persons or loss of or
damage to property occurring on or about the Broad Street Property or any part
thereof or the adjoining properties, sidewalks, curbs, streets or ways; (ii) any
failure on the part of Caldwell to perform or comply with any of the terms of
this Agreement; or (iii) the performance of any labor or services or the
furnishing of any materials or other property in respect of the Broad Street
Property or any part thereof (other than the performance of labor or services or
the furnishing of any materials or other property (A) pursuant to the
Fabrication Services Agreement or any other agreement between Matrix or any of
its Affiliates and Caldwell or any of its Affiliates, or (B) pursuant to the
Orion Contract); except, in each case, to the extent the same (y) is a Retained
Obligation or is a breach or misrepresentation of any covenant, agreement,
representation or
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warranty of Brown, Matrix or GSAC in this Agreement, the Purchase Agreement or
any other Ancillary Document, or (z) results from or arises out of any actions
or inaction (where they had a duty or obligation to act) of Brown, Matrix, GSAC
or any of their Representatives; provided that the foregoing indemnification
obligation of Caldwell shall apply to accidents, injuries or deaths of Brown's
or its Affiliates' Representatives, and to damages to Brown's or its Affiliates'
property, in either case while located on the Broad Street Property only to the
extent resulting from or arising out of the negligence or willful misconduct of
Caldwell, its Affiliates or its or their Representatives.
(g) Repair. In the event of damage to, or destruction of, any
improvements on the Broad Street Property, or of the fixtures and equipment
therein, during the term of this Agreement by fire or other casualty, Caldwell
shall promptly, at its expense, repair, restore or rebuild the same to the
extent that it shall deem necessary or desirable in connection with the
requirements of its business, provided that, upon the completion of such
repairs, restoration or rebuilding, the value and rental value of the
improvements upon the Broad Street Property shall be substantially equal to the
value and rental of the improvements thereon immediately prior to the happening
of such fire or other casualty.
(h) Condemnation. If the whole of the Broad Street Property, or so
much thereof, including a portion of the improvements, shall be taken or
condemned for a public use and as a result thereof the balance of the Broad
Street Property cannot be used for the purposes intended by this Agreement,
then, at the option of Caldwell: (i) this Agreement shall terminate when
possession of the Broad Street Property shall be so taken and surrendered, and
any award, compensation or damages (hereinafter sometimes called the "award"),
shall be paid to and be the sole property of Brown, whether such award shall be
made as compensation for diminution of the value of the license granted hereby
or the fee of the Broad Street Property or otherwise, and Caldwell hereby
assigns to Brown all of Caldwell's right, title and interest in and to any and
all such award; or (ii) Caldwell (or its designee) may exercise the Option,
purchase the Broad Street Property from Brown as contemplated above, and retain
the entire award of such condemnation for the sole account of Caldwell (or its
designee). Caldwell shall continue to pay the amounts required under this
Agreement until the term is so terminated or the Broad Street Property is so
purchased from Brown.
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(i) Certain Actions Prohibited. Caldwell shall not, without Brown's
prior written consent, sublicense the Broad Street Property or any part thereof,
or permit the use or occupancy of the Broad Street Property or any part thereof
by anyone other than Caldwell or its Affiliates and Representatives. Brown
agrees that it will not unreasonably withhold its consent.
3. Termination. This Agreement shall continue in force and effect from
and after the date hereof through the third (3rd) anniversary of such date
unless terminated earlier (in whole or in part) in the manner provided for in
this Section 3, but may not be terminated by the Parties in any other manner or
for any other reason.
(a) Termination by Caldwell. Caldwell shall be entitled, at its
option, to either: (i) terminate this Agreement in its entirety; or (ii)
terminate the right and license (and related access rights) and other provisions
of Section 2 of this Agreement, without terminating the remainder of this
Agreement (including without limitation, the Option); in the event: (A) Caldwell
shall determine, in good faith, that such termination is necessary in order to
reduce or mitigate its risk of responsibility for any Environmental, Health and
Safety Liabilities at or associated with the Broad Street Property or the use or
occupancy thereof; or (B) Caldwell shall determine, in good faith, that Brown,
GSAC and Matrix shall not cause the Broad Street Property to achieve the
"Remediation Levels" contemplated in Section 6.17 of the Purchase Agreement
prior to the third (3rd) anniversary of the Closing Date; or (C) Brown shall
breach or default under any covenant or agreement of Brown contained in this
Agreement, and such breach or default shall remain uncured for a period of
thirty (30) days after written notice thereof to Brown. A termination by
Caldwell as contemplated in (A) or (B) above shall be effected upon delivery by
Caldwell to Brown of thirty (30) days prior written notice of termination, and a
termination by Caldwell as contemplated in (C) above shall be effected upon
delivery by Caldwell to Brown of written notice of termination. Upon any
termination of this Agreement as contemplated above, Caldwell shall vacate the
Broad Street Property and return possession of the same to Brown within ten (10)
days after the effective date of termination, subject, in the case of a
termination pursuant to subclause (ii) above, to Caldwell's (or its designee's)
right to later acquire the Broad Street Property pursuant to the Option.
Notwithstanding any termination pursuant to subclause (ii), above, Caldwell
shall continue to thereafter pay Brown the User Fee throughout the remaining
term of this Agreement.
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(b) Termination by Brown. Brown shall be entitled to terminate this
Agreement in its entirety in the event Caldwell shall fail at any time to pay
the User Fee to Brown by the due date therefor, and such payment default is not
cured by Caldwell within ten (10) days following its receipt of notice thereof
from Brown. Brown shall not be entitled to terminate this Agreement, in whole
or in part, by reason of any other breach or default by Caldwell under this
Agreement or for any other reason, it being understood and agreed that Brown's
sole recourse in the event of such other breach or default shall be to seek
specific performance of Caldwell's obligations hereunder, the recovery of
Damages from Caldwell for such breach or default, and indemnification from
Caldwell and Caldwell Tanks as contemplated in the Purchase Agreement.
(c) Termination upon Purchase. This Agreement shall terminate in its
entirety without further action on the part of either Party, immediately upon
the purchase by Caldwell (or its designee) of the Broad Street Property from
Brown (or its successors or permitted assigns), whether pursuant to the Option
or otherwise.
(d) Termination by Mutual Agreement. This Agreement may also be
terminated, in whole or in part, by the mutual written agreement of the Parties.
(e) Effect of Expiration or Termination. No expiration or earlier
termination of this Agreement, in whole or in part, as contemplated above shall
be deemed to release any Party of or from responsibility for any breach or
default by that Party occurring prior to the expiration or termination, or for
any rights of indemnity provided under this Agreement, which responsibility
shall continue thereafter until discharged in full.
4. Remedies. In the event (a) either Party shall fail to fully perform
or comply with any of its respective covenants, agreements or other obligations
hereunder, including, but not limited to, Brown's obligations to execute and
deliver the Deed as contemplated in Section 1(j), or (b) any representation or
warranty made (or deemed to be made) by Brown herein shall prove to have been
untrue as of the Closing, or (c) any petition in bankruptcy or other similar
petition shall be filed by or against Brown, or (d) any assignment or
composition for the benefit of creditors shall be made or entered into by Brown,
or (e) any judgment or proceeding is entered or brought against Brown
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<PAGE>
or the Broad Street Property to foreclose any Encumbrance on the Broad Street
Property or any portion thereof, then the other Party may, in its sole
discretion, pursue any and all remedies that may be available to it at law, in
equity, by contract or otherwise, including without limitation, initiating an
action to compel specific performance of this Agreement by the non-performing
Party, to recover Damages for breach, and/or to exercise its termination rights
(if any) provided for in Section 3, all of which remedies shall be cumulative to
the maximum extent permissible under applicable Legal Requirements.
5. Brokers' Commissions. Each Party hereby represents and warrants to
the other that no real estate commission, broker's fee or other similar fee or
commission is now or shall at any time be due with respect to this Agreement or
in connection with the Option or any sale or purchase of the Broad Street
Property. If any claims for such fees are made against either of the Parties in
connection with this transaction, all such claims shall be handled and paid by
the Party whose actions or alleged commitments formed the basis of such claim,
and such Party further agrees to indemnify and hold harmless the other Party
from and against any and all such claims or demands.
6. Entry Upon Property. From the date hereof through the Closing (or any
earlier expiration of the Option), Caldwell, its designee (if any) and their
Representatives shall have the right to enter upon the Broad Street Property
from time to time, and the right of ingress and egress over, through and from
the Broad Street Property, for the purpose of inspecting, testing, making
surveys, conducting soil and environmental tests, and making such other
reasonable observations and inspections of the Broad Street Property as are
deemed necessary or appropriate by Caldwell, in addition to the other use and
access rights granted to Caldwell pursuant to Section 2.
7. Entire Agreement. This Agreement and the Purchase Agreement
constitute the entire agreement and understanding between the Parties hereto
with respect to the subject matter hereof and supersedes all prior agreements,
whether oral or written, pertaining to their subject matter. This Agreement
(and the provisions hereof) may be amended, modified or waived only by a written
instrument signed by each Party or, in the case of a waiver, by the waiving
Party.
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<PAGE>
8. Binding Effect; Assignments. This Agreement shall be binding upon and
inure to the benefit of each of the Parties hereto and their respective
successors and permitted assigns. This Agreement and the rights and interests
of Caldwell hereunder may be assigned or transferred, in whole or in part, by
Caldwell to any of its Affiliates without the prior consent of Brown; provided
that no such assignment or transfer shall release Caldwell from its obligations
hereunder.
9. Governing Law. This Agreement and the rights of the parties hereunder
shall be governed by, and construed and enforced in accordance with, the laws of
the State of Georgia, without regard to its conflicts of laws rules.
10. Time of the Essence. Time is of the essence in the performance of
this Agreement.
11. Recording. Brown agrees that Caldwell Tanks shall be entitled, at
its expense, to record one or more originals or copies of this Agreement with
such Governmental Bodies as Caldwell shall deem appropriate to protect its
rights and interests granted hereby. The Parties agree to execute such
amendments to this Agreement as shall be required so that the same shall be in
form suitable for such recording, to the extent not already in recordable form.
12. Rights Run With Land. The Parties acknowledge and agree that the
rights and interests granted to Caldwell under or pursuant to this Agreement,
including without limitation, the Option and the use and access rights granted
pursuant to Section 2, shall "run with the Broad Street Property," and shall be
binding on any voluntary or involuntary successor, transferee, or assignee of
Brown's interests in the Broad Street Property (or any of those interests) for
all purposes.
13. Defense of Third Party Actions. Brown agrees that it shall, at its
expense, use its best efforts to defend the rights and interests granted to
Caldwell pursuant to this Agreement against any and all actions by third-Persons
seeking to challenge those rights or any rights or interests of Brown in or to
the Broad Street Property.
IN TESTIMONY WHEREOF, witness the signatures of Brown and Caldwell as of
the date
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<PAGE>
first above written.
Brown Steel Contractors, Inc.
By:___________________________
Title:________________________
Attest:_______________________
Title:________________________
("Brown")
Signed, sealed and delivered
In the presence of:
_______________________________
Witness
_________________________________
Notary Public
Caldwell Tanks Alliance, llc
By:___________________________
Title:________________________
Attest:_______________________
Title:________________________
("Caldwell")
Signed, sealed and delivered
In the presence of:
_________________________________
Witness
_________________________________
Notary Public
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<PAGE>
The foregoing instrument was prepared by:
____________________________________
Patrick R. Northam, Esq.
Greenebaum Doll & McDonald PLLC
3300 National City Tower
Louisville, Kentucky 40202
(502) 587-3774
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<PAGE>
EXHIBIT A
PROPERTY DESCRIPTION
[To Be Completed]
<PAGE>
EXHIBIT 99.4
FACILITIES USE AND PURCHASE OPTION AGREEMENT
(Fayetteville Road Property Agreement)
BETWEEN
BROWN STEEL CONTRACTORS, INC.
AND
CALDWELL TANKS ALLIANCE, LLC
AUGUST 31, 1999
<PAGE>
FACILITIES USE AND PURCHASE OPTION AGREEMENT
--------------------------------------------
(Fayetteville Road Property Agreement)
THIS FACILITIES USE AND PURCHASE OPTION AGREEMENT ("Agreement") is made and
entered into as of this 31st day of August, 1999, by and between (i) Brown Steel
Contractors, Inc., a Georgia corporation ("Brown"), and (ii) Caldwell Tanks
Alliance, llc, a Georgia limited liability company ("Caldwell") (collectively,
the Parties").
Recitals:
A. Brown, certain of its Affiliates, Caldwell and Caldwell Tanks, Inc.
are parties to an Amended and Restated Stock Purchase Agreement and Conversion
to Asset Purchase Agreement dated as of August 31, 1999 (the "Purchase
Agreement"), pursuant to which, among other transactions, Brown agreed to sell
to Caldwell, at the Closing certain Assets of Brown, upon and subject to the
terms and conditions set forth in the Purchase Agreement.
B. It was a condition to the Closing and the obligations of Caldwell and
Caldwell Tanks, Inc. under the Purchase Agreement and the other Ancillary
Documents contemplated therein that Brown enter into this Agreement with
Caldwell.
C. This Agreement is the Fayetteville Road Property Agreement
contemplated in the Purchase Agreement, and capitalized terms used but not
defined herein shall have their same respective meanings as in the Purchase
Agreement.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises, the payment by Caldwell
to Brown of the sum of Ten Dollars ($10.00), and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Parties agree as
follows:
<PAGE>
1. OPTION TO PURCHASE FAYETTEVILLE ROAD PROPERTY.
(a) Option. Brown hereby grants and conveys to Caldwell (and/or
to any Person(s) designated in writing by Caldwell) an exclusive and irrevocable
(except as otherwise provided in Section 3) right and option to purchase all of
Brown's rights, title and interests under, in and to the real property of Brown
located in Coweta County, Georgia at 521 Lower Fayetteville Road, Newnan,
Georgia 30263, as more particularly described on Exhibit A attached hereto and
---------
made a part hereof, including without limitation (i) any buildings,
improvements, structures, fixtures, shrubs, trees, plants and appurtenances
situated thereon or thereunder, any mineral rights in respect thereof, and any
water rights and other rights appurtenant to that real property, and (ii) all
easements and hereditaments appertaining to that real property, including all
rights, title and interest of Brown (if any) in and to the streets, alleys,
ways, easements and rights-of-way abutting or adjoining that real property
(collectively, the "Fayetteville Road Property"), free and clear of all
Encumbrances other than Permitted Encumbrances, and upon and subject to the
terms and conditions set forth in this Agreement (the "Option"). The Option may
be exercised by Caldwell (or its designee), in its discretion, at any time
during the period commencing on the date hereof and expiring on the third (3rd)
anniversary of the date hereof (the "Option Period"), upon delivery of written
notice of exercise to Brown during the Option Period in accordance with Section
12.12 of the Purchase Agreement (the "Exercise Notice"). Caldwell shall be
obligated to exercise the Option to the extent required under Section 6.17 of
the Purchase Agreement, but not otherwise. Should Caldwell (or its designee)
exercise the Option, this Agreement shall thereupon constitute a binding
agreement of sale between Brown, on the one hand, and Caldwell and such
designee, on the other hand, with respect to the Fayetteville Road Property.
(b) Option Purchase Price.
(i) Upon the exercise of the Option by Caldwell or its
designee, the aggregate purchase price ("Purchase Price") payable by
Caldwell (or such designee) to Brown for the Fayetteville Road Property
shall be the sum of Four Hundred Eighty Thousand Dollars ($480,000),
without interest or other adjustment (except for any accrued and unpaid
User Fees (as hereinafter defined)), which shall be payable by Caldwell or
such designee in
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<PAGE>
immediately available funds at the "Closing" of the purchase as
contemplated below. The obligation to pay the Purchase Price shall be joint
and several as between Caldwell and any designee thereof.
(ii) Brown shall be entitled to no other compensation or
benefits from Caldwell or its designee (if any) in the event Caldwell or
such designee shall fail or refuse for any reason to exercise the Option;
provided, that the foregoing shall not release Caldwell or Caldwell Tanks
of or from any liability arising out of their breach of Section 6.17 of the
Purchase Agreement by reason of the failure or refusal by Caldwell or its
designee to exercise the Option during the Option Period as required
thereunder.
(c) Closing. Upon the exercise of the Option, the closing of the
purchase and sale of the Fayetteville Road Property hereunder (the "Closing")
shall occur on the thirtieth (30th) day following the delivery by Caldwell (or
its designee) to Brown of the Exercise Notice described above; provided, that in
the event the 30th day following such notice falls on a Saturday or Sunday, the
Closing shall occur on the Monday next following that 30th day. The Closing
shall occur at the offices of Greenebaum Doll & McDonald PLLC in Louisville,
Kentucky at 10:00 a.m. local time on the appointed date. Notwithstanding the
foregoing, the Parties may agree upon a different date, time and/or place for
the Closing, provided such agreement is in writing. At the Closing, Brown shall
deliver absolute possession of the Fayetteville Road Property to Caldwell or its
designee (if any).
(d) Investigation. From the date hereof through the expiration
or earlier termination of this Agreement, Brown shall afford to the
Representatives of Caldwell (and its designee, if any) complete access to the
Fayetteville Road Property and the records of Brown (including computer files,
retrieval programs and similar documentation and such access and information
that may be necessary in connection with an environmental audit) to the extent
Caldwell shall deem necessary or desirable, and shall furnish to Caldwell, its
designee and their authorized Representatives such additional information
concerning the Fayetteville Road Property as shall be reasonably requested,
including all such information as shall be reasonably necessary or appropriate
to enable Caldwell, its designee and their Representatives to verify the
accuracy of the representations and warranties contained in this Agreement or
the Purchase Agreement, and to verify that the covenants of Brown
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<PAGE>
contained in this Agreement and the Purchase Agreement have been complied with.
Caldwell agrees that such investigation shall be conducted in such a manner as
will not interfere unreasonably with the operations of Brown. No investigation
made by Caldwell, its designee or their Representatives hereunder shall affect
the representations and warranties of Brown made in this Agreement or in the
Purchase Agreement.
(e) Title Insurance. Brown will obtain, at its cost and expense,
and deliver to Caldwell within ten (10) days after the date of delivery of an
Exercise Notice, a commitment to issue the following title insurance with
respect to the Fayetteville Road Property, meeting the following requirements,
at the Closing:
(i) Commitment. With respect to each parcel of real estate
included in the Fayetteville Road Property (each, a "Parcel"), a commitment
to issue an ALTA Owner's Policy of Title Insurance (Form 10/17/92 or its
nearest equivalent if a Parcel is located in a jurisdiction in which Form
10/17/92 is not available) (each a "Commitment"), which Commitment(s) shall
be issued by a title insurer reasonably satisfactory to Caldwell,
committing to insure the interest of Caldwell (and its relevant
designee(s)) in each Parcel for an amount equal to the Purchase Price.
(ii) State of Title. Within ten (10) days after the receipt
by Caldwell of a Commitment for a Parcel, Caldwell shall notify Brown of
any exceptions to title contained in that Commitment which Caldwell (or its
designee) finds, in its reasonable discretion, to be unacceptable to
Caldwell (or such designee). Thereafter, Brown shall within five (5) days
notify Caldwell of its intention to take such action as may be necessary to
remove the exceptions objected to from the Commitment, and an endorsement
to that Commitment shall be issued at least two (2) days prior to the
Closing deleting the exceptions so objected to from that Commitment. All
exceptions to title or survey issues as to each Parcel as to which Caldwell
(and its designee) shall not object (or shall subsequently withdraw its
objection) shall be deemed to be "Permitted Exceptions."
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<PAGE>
(iii) Further Commitment Requirements. In addition to the
matters set forth in (i) and (ii) above, each Commitment shall further
commit (A) to insure title to all recorded easements benefitting that
Parcel, (B) to issue an ALTA Endorsement 3.1 (or equivalent) as to that
Parcel, and (C) to issue a standard "non-imputation" endorsement.
(iv) Title at Closing. At the Closing, the state of title
to each Parcel shall be such that the title company issuing the Commitment
for that Parcel shall be prepared to and shall issue a title policy on the
form mandated by Subsection (e)(i) above, insuring the interest of Caldwell
(and its relevant designee) in that Parcel as a valid fee simple interest,
(A) subject only to the Permitted Exceptions, (B) having deleted therefrom
the standard exceptions for parties in possession, survey, rights of way
and easements not of record and mechanics and materialmans liens, (C)
insuring that the Parcel as described in the policy is the same property as
is described in the Survey for that Parcel identified on Exhibit A attached
---------
hereto, (D) insuring the contiguity of the Parcel if the Parcel consists of
more than one tract or lot, and (E) insuring direct and unencumbered
pedestrian and vehicular access to the Parcel from each street or roadway
adjacent to the Parcel. In the event the actual state of title to each
Parcel is not as described above, the Closing regarding that Parcel shall
not occur absent the prior written consent of Caldwell.
(f) Further Assurances. Each of the Parties hereto shall, at any time
following an exercise of the Option by Caldwell (or its designee), and from time
to time, either before or after the Closing, upon the request of the appropriate
Party, do, obtain, execute, acknowledge and deliver, or will cause to be done,
obtained, executed, acknowledged and delivered, all such further acts, consents,
assignments, transfers, conveyances, and assurances as may be reasonably
required to complete the transactions contemplated in this Section 1.
(g) Permits. The Parties agree to reasonably cooperate with and
assist each other, at their respective cost and expense, upon an exercise of the
Option to effect the transfer or assignment to Caldwell (or its designee) of any
existing Governmental Authorizations of Brown relating to or required for the
operation of the Fayetteville Road Property (to the extent not previously
transferred or assigned to Caldwell as contemplated in the Purchase Agreement),
and
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<PAGE>
agree to file any notices, requests, applications and the like with all relevant
Governmental Bodies in connection with those Government Authorizations (or their
assignment or transfer), including without limitation, any notices of the change
in control and ownership of the Fayetteville Road Property required under
applicable Legal Requirements for the continued use, maintenance and
effectiveness of such Governmental Authorizations by Caldwell (or its designee).
(h) No Assumption of Obligations. Caldwell and its designee (if any)
shall not, by reason of any exercise of the Option, any purchase of the
Fayetteville Road Property or otherwise, be deemed to have assumed or to in any
manner have become responsible or liable for, and Brown agrees that it shall
retain, pay, perform and discharge in full, any and all debts, obligations and
liabilities of Brown of any nature, whether or not relating to the Fayetteville
Road Property, and whether known or unknown, accrued or unaccrued, fixed,
absolute, contingent or otherwise, including without limitation, any liabilities
relating to any Contamination as contemplated in Section 6.17 of the Purchase
Agreement; provided, that the foregoing provisions of this Section 1(h) shall
not, and are not intended to, (x) eliminate, reduce or diminish (i) the
agreement of Caldwell to pay, perform and discharge the Assumed Obligations, or
(ii) the agreement of Caldwell to indemnify the Brown Indemnitees as provided in
Section 2(f) of this Agreement, or (y) except to the extent the same are
Retained Obligations, obligate Brown with respect to any matter arising after
the Closing under this Agreement (other than for the performance of Brown's
covenants expressly set forth herein).
(i) Representations and Warranties. At the Closing, and upon
delivery of the Deed contemplated in Section (j), below, Brown shall be deemed
to have once again made to Caldwell (and its designee, if any) as of that date
each of the representations and warranties of Brown set forth in the following
Sections of the Purchase Agreement (limited to this Agreement or the
Fayetteville Road Property where the context requires): 4.1, 4.7(g) (except for
such casualties, damages, destruction of losses that have been cured and remain
cured as of the Closing), 4.7(n), 4.7(p) (except for such disposals consisting
of land or of any part of the building or of any other property having a value,
individually or in the aggregate, of not more than $50,000), 4.7(u) (subject to
the qualification that any material adverse effect on the business referred to
therein is to the business of Caldwell), 4.10, 4.16 (but only to the extent that
the matters referred to therein are not the subject
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<PAGE>
of the Environmental Work Plan or the remediation activities of Brown referred
to in Section 6.17 of the Purchase Agreement), 4.24 and 4.33; provided, that
Brown shall have no responsibility or liability to Caldwell (or its designee) to
the extent those representations and warranties (or any of them) prove to be
inaccurate in any respect as of the Closing by reason of any actions or
omissions on the part of Caldwell or the Caldwell Group (as hereinafter
defined), other than Matrix and its Affiliates, occurring following the date
hereof and prior to the Closing, or by reason of any matter as to which the
Brown Indemnitees are entitled to indemnification as provided in Section 2(f)
hereof.
(j) Delivery of Deed. At the Closing, Brown agrees to deliver to
Caldwell (or its designee) a Deed of Special Warranty in form reasonably
satisfactory to Caldwell (the "Deed"), conveying good and marketable fee simple
title to the Fayetteville Road Property to Caldwell (and/or such designee, as
applicable), free and clear of all Encumbrances other than Permitted
Encumbrances. Brown shall be obligated to pay all transfer Taxes due and owing
in respect of the Deed, and Caldwell shall be obligated to cause the Deed to be
recorded and to pay the recording costs thereof. Caldwell (and its designee)
hereby waive any breach of the warranties contained in the Deed except to the
extent the same also constitute a breach of any of the representations and
warranties to be made by Brown as of the Closing as contemplated in Section 1(i)
of this Agreement and except to the extent the same are also Retained
Obligations.
(k) Sales Taxes, Etc. Notwithstanding anything contained in this
Agreement, the Purchase Agreement or any other Ancillary Document to the
contrary, Brown shall be solely responsible for, and agrees to pay and discharge
when due, any and all sales, use, transfer and other similar Taxes that may at
any time be assessed against any of the Parties or Caldwell's designee by reason
of the sale of the Fayetteville Road Property contemplated herein, or otherwise
by reason of the consummation of the transactions contemplated in this
Agreement.
(l) Status of Title to Property; Compliance. From the date hereof
through the Closing (or any earlier expiration or termination of the Option as
contemplated in Section 3), Brown agrees not to grant or permit any Encumbrances
(other than Permitted Encumbrances) against or on the Fayetteville Road
Property, not to transfer or convey (whether voluntarily or involuntarily)
Brown's fee simple interest (or any portion thereof) in the Fayetteville Road
Property, and not to
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<PAGE>
grant or create any leasehold interest or other similar interest in or regarding
the Fayetteville Road Property, in any case without the prior written consent of
Caldwell. Furthermore, Brown agrees to comply with each and every covenant and
restriction of record and affecting the Fayetteville Road Property.
2. USE OF CERTAIN FACILITIES.
(a) Grant of Right and License. Brown hereby grants to Caldwell,
for itself and its suppliers, customers, Affiliates, Representatives and other
invitees (collectively, the "Caldwell Group"):
(i) an exclusive and irrevocable (except as contemplated in
Section 3) right and license, commencing on the date hereof and continuing
until the third (3rd) anniversary of such date (or until an earlier
termination of this right and license as contemplated in Section 3), to use
and maintain, from time-to-time, for any lawful purpose or purposes, any
and all building(s), facilities, fixtures and other improvements now or
hereafter located on or appurtenant to the Fayetteville Road Property
(collectively, the "Facilities"), including without limitation, to use
those Facilities for the fabrication of steel plate and piping in support
of the elevated water tank businesses of Caldwell and its Affiliates in the
same manner as was conducted by Brown or its Affiliates prior to the date
hereof; and
(ii) full right of access to, and ingress and egress over,
the Fayetteville Road Property throughout that three-year period, to the
extent necessary for the full use and enjoyment by Caldwell (and such other
Persons) of the Facilities in accordance with this Section 2.
Brown agrees that it will not grant to any other Person (other than Caldwell and
such other Persons described above) any right to utilize any of the Facilities
throughout the term of this Agreement (and will not use those Facilities for
Brown's own account), and further agrees that it will not cause or permit any of
Brown's Representatives or any other Persons to enter onto the Fayetteville Road
Property for any reason other than (A) to ensure compliance by Caldwell with the
provisions of this
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<PAGE>
Agreement, (B) to undertake the Contamination remediation efforts contemplated
in Section 6.17 of the Purchase Agreement, or (C) to address or remediate any
other Environmental, Health and Safety Liabilities or any violation of
Environmental Laws in compliance with those laws or the provisions of the
Environmental Work Plan, or (D) to enable Brown to comply with the terms and
provisions of this Agreement, including without limitation the provisions of
Section 1(i) hereof (and then only to the extent their entrance or presence on
the Fayetteville Road Property will not unreasonably interfere with Caldwell's
use, enjoyment and maintenance of the same). Brown shall be solely responsible
for, and shall defend, indemnify and hold harmless Caldwell and its Affiliates
and Representatives from and against, any and all Damages that they may suffer
or incur by reason of the entrance or presence of those Representatives on the
Fayetteville Road Property, but only to the extent not caused by the negligence
or wilful misconduct of the Caldwell Group (other than Matrix and its
Affiliates). Brown agrees that the rights granted to Caldwell as contemplated
herein shall continue in force and effect following the third (3rd) anniversary
of the date hereof until the Closing pursuant to any exercise by Caldwell of the
Option in accordance with Section 1. Notwithstanding anything contained herein
to the contrary, Caldwell shall not use the Facilities in any manner that would
cause or result in a breach by Caldwell or Caldwell Tanks of any of their
covenants or agreements set forth in the Non-Competition Agreement. Caldwell
shall be entitled, throughout the term of this Agreement, and to the maximum
extent permissible under applicable Legal Requirements, to rely upon, and to use
and maintain the buildings, facilities, fixtures and other improvements on the
Fayetteville Road Property pursuant to, all Governmental Authorizations of Brown
relating to that property.
(b) Payments by Caldwell.
(i) In consideration of the right and license granted to
it as contemplated above, Caldwell agrees to pay to Brown, each month
during the Term of that right and license (prorated for partial months), a
user fee of $3,000, without escalation or adjustment at any time hereafter
(the "User Fee"). The User Fee for a particular month shall become due and
payable to Brown on the fifth (5th) day of the month immediately following
the month for which due, and shall be paid in immediately available funds.
Upon the expiration or any earlier termination of the right and license
(and related access rights) granted to Caldwell
-9-
<PAGE>
pursuant to this Section 2, Brown shall be entitled to receive the User Fee
prorated through the date of expiration or termination, but shall be
entitled to no other compensation or benefits in exchange for the right and
license (and those access rights) granted to Caldwell.
(ii) Caldwell shall also pay or reimburse Brown for all
taxes and similar impositions which may be levied, assessed or imposed upon
the Fayetteville Road Property accruing or becoming due and payable during
the term of this Agreement, provided that any such taxes shall be prorated
between Brown and Caldwell as of the date of this Agreement for the first
year and as of the expiration date of this Agreement for the last year.
Caldwell shall not be required to pay any tax, assessment, tax lien or
other imposition or charge upon or against the Fayetteville Road Property,
or any part thereof, or the improvements situated thereon, so long as
Caldwell shall, in good faith and with due diligence, contest the same or
the validity thereof by appropriate legal proceeding which shall have the
effect of preventing the collection of the tax, assessment, tax lien or
other imposition or charge so contested.
(iii) During the term of this Agreement, Caldwell shall
procure and maintain policies of insurance, at its own cost and expense,
insuring the following:
(a) The improvements situated upon the Fayetteville
Road Property against loss or damage by fire, lightning, wind storm,
hail storm, aircraft, vehicles, smoke, explosion, riot or civil
commotion as provided by the standard fire and extended coverage
policy and all other risks of direct physical loss as insured against
under special extended coverage endorsement. The insurance coverage
shall be for not less than $500,000 with all proceeds of insurance
payable to Caldwell, subject to the obligation of Caldwell provided in
Section 2(g) below.
(b) Brown, the Matrix Indemnitees and Caldwell from
all claims, demands or actions for injury to or death of any person in
an amount of not less than Two Million Dollars ($2,000,000) for injury
to death of more than one person in any one occurrence to the limit of
One Million Dollars ($1,000,000), and for damage to property in an
amount of not less than Seven Hundred Fifty Thousand Dollars
-10-
<PAGE>
($750,000) made by or on behalf of, any person or persons, firm or
corporation arising from, related to or connected with the
Fayetteville Road Property.
Such insurance shall be with companies and in form, substance and
amount (where not stated above) satisfactory to Brown.
(iv) Caldwell shall pay the cost of all utilities and service to
the property, including gas, water, sewer and electricity, incurred during
the term of this Agreement.
(c) Maintenance of Facilities; Limited Scope. Throughout the term of
the right and license granted to it pursuant to this Section 2, Caldwell shall,
at its expense, maintain the Facilities used by it in good working condition and
repair, ordinary wear and tear excepted (but subject to the obligations of
Brown, GSAC and Matrix under the Purchase Agreement and the other Ancillary
Documents with respect to the Retained Obligations and any misrepresentation(s)
or breach(es) of warranty by Brown, GSAC or Matrix with respect to the
Facilities or the condition thereof). Subject to those obligations on the part
of Brown, GSAC and Matrix, Caldwell shall be solely responsible for any Damages
that it or its Affiliates or Representatives may suffer or incur resulting from
or arising out of their use of or access to any of the Facilities pursuant to
that right and license. The Parties acknowledge that neither Caldwell nor any of
its Affiliates are, by reason of the right and license granted in this Section 2
or otherwise, acquiring any interests (whether leasehold or otherwise) in the
fee simple title held by Brown in the Fayetteville Road Property on the date
hereof, nor are Caldwell or any of its Affiliates undertaking any responsibility
(whether to Brown, its Affiliates or any other Persons) for the Contamination or
any other conditions at, affecting or relating to the Fayetteville Road Property
as of the date hereof, for any future consequences of those conditions, or for
any resulting Environmental, Health and Safety Liabilities or violations of
applicable Legal Requirements, it being expressly understood and agreed that all
such responsibility shall remain a Retained Obligation from and after the date
hereof unless and to the extent any related Damages are the result of any
actions or inaction (where they had a duty or obligation to act) of the Caldwell
Group (other than Matrix or any of its Affiliates).
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<PAGE>
(d) Additions to Facilities. During the term of its right and license
under this Section 2, Caldwell shall be entitled, at its expense, to construct
on the Fayetteville Road Property, and to install on or in connection with the
Facilities, such enhancements and improvements thereto as Caldwell shall
determine and as shall not materially damage or otherwise materially adversely
affect the use or value of the Facilities (including without limitation, the new
or modified paint booth facilities contemplated in the Environmental Work Plan),
provided such enhancements and/or improvements otherwise comply with all
applicable Legal Requirements. Upon their construction or installation, all such
enhancements and improvements shall constitute part of the Fayetteville Road
Property for all purposes, shall be the property of Brown, and shall become
subject to the Option; provided, that upon the exercise of the Option Caldwell
(or its designee) shall not be obligated to pay any additional amounts above the
Purchase Price to purchase those enhancements and/or improvements. In the event
the right and license provided for in this Section 2 shall expire or be
terminated as contemplated in Section 3, and thereafter the Option shall expire
in accordance with its terms prior to any exercise of the same by Caldwell or
its designee, then Caldwell shall be deemed to have abandoned all such
enhancements and improvements, and the same shall remain the property of Brown.
(e) Cooperation. Caldwell and Brown agree to reasonably cooperate
with each other and their Representatives in order to permit Brown to undertake
and satisfy the matters referred to in clauses (A) through (D) of Section 2(a)
hereof, while at the same time minimizing the adverse effects of such activities
by Brown on the business and operations of Caldwell on the Fayetteville Road
Property.
(f) Caldwell Indemnity. Caldwell hereby agrees to indemnify Brown
and its Affiliates for any Damages they may suffer by reason of: (i) the use or
occupancy by Caldwell of the Fayetteville Road Property during the term of this
Agreement, including any accident, injury to or death of persons or loss of or
damage to property occurring on or about the Fayetteville Road Property or any
part thereof or the adjoining properties, sidewalks, curbs, streets or ways;
(ii) any failure on the part of Caldwell to perform or comply with any of the
terms of this Agreement; or (iii) the performance of any labor
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<PAGE>
or services or the furnishing of any materials or other property in respect of
the Fayetteville Road Property or any part thereof (other than the performance
of labor or services or the furnishing of any materials or other property (A)
pursuant to the Fabrication Services Agreement or any other agreement between
Matrix or any of its Affiliates and Caldwell or any of its Affiliates, or (B)
pursuant to the Orion Contract); except, in each case, to the extent the same
(y) is a Retained Obligation or is a breach or misrepresentation of any
covenant, agreement, representation or warranty of Brown, Matrix or GSAC in this
Agreement, the Purchase Agreement or any other Ancillary Document, or (z)
results from or arises out of any actions or inaction (where they had a duty or
obligation to act) of Brown, Matrix, GSAC or any of their Representatives;
provided that the foregoing indemnification obligation of Caldwell shall apply
to accidents, injuries or deaths of Brown's or its Affiliates' Representatives,
and to damages to Brown's or its Affiliates' property, in either case while
located on the Fayetteville Road Property only to the extent resulting from or
arising out of the negligence or willful misconduct of Caldwell, its Affiliates
or its or their Representatives.
(g) Repair. In the event of damage to, or destruction of, any
improvements on the Fayetteville Road Property, or of the fixtures and equipment
therein, during the term of this Agreement by fire or other casualty, Caldwell
shall promptly, at its expense, repair, restore or rebuild the same to the
extent that it shall deem necessary or desirable in connection with the
requirements of its business, provided that, upon the completion of such
repairs, restoration or rebuilding, the value and rental value of the
improvements upon the Fayetteville Road Property shall be substantially equal to
the value and rental of the improvements thereon immediately prior to the
happening of such fire or other casualty.
(h) Condemnation. If the whole of the Fayetteville Road Property, or
so much thereof, including a portion of the improvements, shall be taken or
condemned for a public use and as a result thereof the balance of the
Fayetteville Road Property cannot be used for the purposes intended by this
Agreement, then, at the option of Caldwell: (i) this Agreement shall terminate
when possession of the Fayetteville Road Property shall be so taken and
surrendered, and any award, compensation or damages (hereinafter sometimes
called the "award"), shall be paid to and be the sole property of Brown, whether
such award shall be made as compensation for diminution of the value of the
license granted hereby or the fee of the Fayetteville Road Property or
otherwise, and Caldwell hereby assigns to Brown all of Caldwell's right, title
and interest in and to any and all such award;
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<PAGE>
or (ii) Caldwell (or its designee) may exercise the Option, purchase the
Fayetteville Road Property from Brown as contemplated above, and retain the
entire award of such condemnation for the sole account of Caldwell (or its
designee). Caldwell shall continue to pay the amounts required under this
Agreement until the term is so terminated or the Fayetteville Road Property is
so purchased from Brown.
(i) Certain Actions Prohibited. Caldwell shall not, without Brown's
prior written consent, sublicense the Fayetteville Road Property or any part
thereof, or permit the use or occupancy of the Fayetteville Road Property or any
part thereof by anyone other than Caldwell or its Affiliates and
Representatives. Brown agrees that it will not unreasonably withhold its
consent.
3. Termination. This Agreement shall continue in force and effect from and
after the date hereof through the third (3rd) anniversary of such date unless
terminated earlier (in whole or in part) in the manner provided for in this
Section 3, but may not be terminated by the Parties in any other manner or for
any other reason.
(a) Termination by Caldwell. Caldwell shall be entitled, at its
option, to either: (i) terminate this Agreement in its entirety; or (ii)
terminate the right and license (and related access rights) and other provisions
of Section 2 of this Agreement, without terminating the remainder of this
Agreement (including without limitation, the Option); in the event: (A) Caldwell
shall determine, in good faith, that such termination is necessary in order to
reduce or mitigate its risk of responsibility for any Environmental, Health and
Safety Liabilities at or associated with the Fayetteville Road Property or the
use or occupancy thereof; or (B) Caldwell shall determine, in good faith, that
Brown, GSAC and Matrix shall not cause the Fayetteville Road Property to achieve
the "Remediation Levels" contemplated in Section 6.17 of the Purchase Agreement
prior to the third (3rd) anniversary of the Closing Date; or (C) Brown shall
breach or default under any covenant or agreement of Brown contained in this
Agreement, and such breach or default shall remain uncured for a period of
thirty (30) days after written notice thereof to Brown. A termination by
Caldwell as contemplated in (A) or (B) above shall be effected upon delivery by
Caldwell to Brown of thirty (30) days prior written notice of termination, and a
termination by Caldwell as contemplated in (C) above shall be effected upon
delivery by Caldwell to Brown of written notice of termination. Upon any
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<PAGE>
termination of this Agreement as contemplated above, Caldwell shall vacate the
Fayetteville Road Property and return possession of the same to Brown within ten
(10) days after the effective date of termination, subject, in the case of a
termination pursuant to subclause (ii) above, to Caldwell's (or its designee's)
right to later acquire the Fayetteville Road Property pursuant to the Option.
Notwithstanding any termination pursuant to subclause (ii), above, Caldwell
shall continue to thereafter pay Brown the User Fee throughout the remaining
term of this Agreement.
(b) Termination by Brown. Brown shall be entitled to terminate this
Agreement in its entirety in the event Caldwell shall fail at any time to pay
the User Fee to Brown by the due date therefor, and such payment default is not
cured by Caldwell within ten (10) days following its receipt of notice thereof
from Brown. Brown shall not be entitled to terminate this Agreement, in whole or
in part, by reason of any other breach or default by Caldwell under this
Agreement or for any other reason, it being understood and agreed that Brown's
sole recourse in the event of such other breach or default shall be to seek
specific performance of Caldwell's obligations hereunder, the recovery of
Damages from Caldwell for such breach or default, and indemnification from
Caldwell and Caldwell Tanks as contemplated in the Purchase Agreement.
(c) Termination upon Purchase. This Agreement shall terminate in its
entirety without further action on the part of either Party, immediately upon
the purchase by Caldwell (or its designee) of the Fayetteville Road Property
from Brown (or its successors or permitted assigns), whether pursuant to the
Option or otherwise.
(d) Termination by Mutual Agreement. This Agreement may also be
terminated, in whole or in part, by the mutual written agreement of the Parties.
(e) Effect of Expiration or Termination. No expiration or earlier
termination of this Agreement, in whole or in part, as contemplated above shall
be deemed to release any Party of or from responsibility for any breach or
default by that Party occurring prior to the expiration or termination, or for
any rights of indemnity provided under this Agreement, which responsibility
shall continue thereafter until discharged in full.
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<PAGE>
4. Remedies. In the event (a) either Party shall fail to fully perform or
comply with any of its respective covenants, agreements or other obligations
hereunder, including, but not limited to, Brown's obligations to execute and
deliver the Deed as contemplated in Section 1(j), or (b) any representation or
warranty made (or deemed to be made) by Brown herein shall prove to have been
untrue as of the Closing, or (c) any petition in bankruptcy or other similar
petition shall be filed by or against Brown, or (d) any assignment or
composition for the benefit of creditors shall be made or entered into by Brown,
or (e) any judgment or proceeding is entered or brought against Brown or the
Fayetteville Road Property to foreclose any Encumbrance on the Fayetteville Road
Property or any portion thereof, then the other Party may, in its sole
discretion, pursue any and all remedies that may be available to it at law, in
equity, by contract or otherwise, including without limitation, initiating an
action to compel specific performance of this Agreement by the non-performing
Party, to recover Damages for breach, and/or to exercise its termination rights
(if any) provided for in Section 3, all of which remedies shall be cumulative to
the maximum extent permissible under applicable Legal Requirements.
5. Brokers' Commissions. Each Party hereby represents and warrants to
the other that no real estate commission, broker's fee or other similar fee or
commission is now or shall at any time be due with respect to this Agreement or
in connection with the Option or any sale or purchase of the Fayetteville Road
Property. If any claims for such fees are made against either of the Parties in
connection with this transaction, all such claims shall be handled and paid by
the Party whose actions or alleged commitments formed the basis of such claim,
and such Party further agrees to indemnify and hold harmless the other Party
from and against any and all such claims or demands.
6. Entry Upon Property. From the date hereof through the Closing (or any
earlier expiration of the Option), Caldwell, its designee (if any) and their
Representatives shall have the right to enter upon the Fayetteville Road
Property from time to time, and the right of ingress and egress over, through
and from the Fayetteville Road Property, for the purpose of inspecting, testing,
making surveys, conducting soil and environmental tests, and making such other
reasonable observations and inspections of the Fayetteville Road Property as are
deemed necessary or appropriate by Caldwell, in addition to the other use and
access rights granted to Caldwell pursuant to Section 2.
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<PAGE>
7. Entire Agreement. This Agreement and the Purchase Agreement (of which
Caldwell is a third-party beneficiary) constitute the entire agreement and
understanding between the Parties hereto with respect to the subject matter
hereof and supersedes all prior agreements, whether oral or written, pertaining
to their subject matter. This Agreement (and the provisions hereof) may be
amended, modified or waived only by a written instrument signed by each Party
or, in the case of a waiver, by the waiving Party.
8. Binding Effect; Assignments. This Agreement shall be binding upon and
inure to the benefit of each of the Parties hereto and their respective
successors and permitted assigns. This Agreement and the rights and interests of
Caldwell hereunder may be assigned or transferred, in whole or in part, by
Caldwell to any of its Affiliates without the prior consent of Brown; provided
that no such assignment or transfer shall release Caldwell from its obligations
hereunder.
9. Governing Law. This Agreement and the rights of the parties hereunder
shall be governed by, and construed and enforced in accordance with, the laws of
the State of Georgia, without regard to its conflicts of laws rules.
10. Time of the Essence. Time is of the essence in the performance of
this Agreement.
11. Recording. Brown agrees that Caldwell Tanks shall be entitled, at
its expense, to record one or more originals or copies of this Agreement with
such Governmental Bodies as Caldwell shall deem appropriate to protect its
rights and interests granted hereby. The Parties agree to execute such
amendments to this Agreement as shall be required so that the same shall be in
form suitable for such recording, to the extent not already in recordable form.
12. Rights Run With Land. The Parties acknowledge and agree that the
rights and interests granted to Caldwell under or pursuant to this Agreement,
including without limitation, the Option and the use and access rights granted
pursuant to Section 2, shall "run with the Fayetteville Road Property," and
shall be binding on any voluntary or involuntary successor, transferee, or
assignee of Brown's interests in the Fayetteville Road Property (or any of those
interests) for all purposes.
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<PAGE>
13. Defense of Third Party Actions. Brown agrees that it shall, at its
expense, use its best efforts to defend the rights and interests granted to
Caldwell pursuant to this Agreement against any and all actions by third-Persons
seeking to challenge those rights or any rights or interests of Brown in or to
the Fayetteville Road Property.
IN TESTIMONY WHEREOF, witness the signatures of Brown and Caldwell as of
the date
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<PAGE>
first above written.
Brown Steel Contractors, Inc.
By:_____________________________________
Title:__________________________________
Attest:_________________________________
Title:__________________________________
("Brown")
Signed, sealed and delivered
In the presence of:
____________________________________
Witness
____________________________________
Notary Public
Caldwell Tanks Alliance, llc
By:_____________________________________
Title:__________________________________
Attest:_________________________________
Title:__________________________________
("Caldwell")
Signed, sealed and delivered
In the presence of:
____________________________________
Witness
____________________________________
Notary Public
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<PAGE>
The foregoing instrument was prepared by:
____________________________________
Patrick R. Northam, Esq.
Greenebaum Doll & McDonald PLLC
3300 National City Tower
Louisville, Kentucky 40202
(502) 587-3774
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<PAGE>
EXHIBIT A
PROPERTY DESCRIPTION
[To Be Completed]
<PAGE>
EXHIBIT 99.5
ENVIRONMENTAL WORK PLAN
This Environmental Work Plan (this "Agreement"), dated as of August 31,
1999, by and among Brown Steel Contractors, Inc., a Georgia corporation
("Brown"), Matrix Service Company, a Delaware corporation ("Matrix"), Georgia
Steel Acquisition Corp., an Oklahoma corporation ("GSAC" and, jointly and
severally with Brown and Matrix, the "Matrix Parties"), Caldwell Tanks Alliance,
llc, a Georgia limited liability company ("Caldwell"), and Caldwell Tanks, Inc.,
a Kentucky corporation ("Caldwell Tanks").
Witnesseth:
WHEREAS, the parties hereto have entered into an Amended and Restated Stock
Purchase Agreement and Conversion to Asset Purchase Agreement, dated as of
August 31, 1999 (as amended, the "Purchase Agreement"), pursuant to which, among
other transactions, Caldwell purchased certain of the assets and properties of
Brown, a direct and indirect wholly-owned subsidiary of GSAC and Matrix; and
WHEREAS, it was a condition to the of Closing under the Purchase Agreement
that the parties enter into this Agreement for the purpose of setting forth
their relative rights and obligations with respect to certain environmental
matters at Brown or with respect to its properties.
Agreement:
NOW, THEREFORE, the parties hereto, intending to be legally bound, do
hereby agree as follows:
1. Indemnification By Matrix Parties. Except as otherwise expressly provided
in Section 2 of this Agreement, this Agreement shall not modify or impair the
obligation of the Matrix Parties to indemnify the Caldwell Indemnitees (as this
and certain other terms are defined in Section 3.5 below) as provided in Section
10 of the Purchase Agreement.
2. Environmental Work Plan.
2.1 General Remediation Commitments.
(i) Prior to the date hereof, the parties, with the assistance of
their respective environmental consultants, identified various environmental
issues associated with the Brown Parties and/or their assets and properties
which, the parties agreed, required redress prior to the Closing. The parties
acknowledge that substantial progress has been made by Matrix, GSAC, Brown and
their environmental consultants in redressing those issues, but that certain
of them have not been completely resolved or addressed as of the date hereof.
Despite this, the parties are willing to proceed with the Closing, subject to
their respective covenants and agreements set forth in this Agreement and the
Purchase Agreement (including without limitation, Sections 6.17 and 6.20
thereof). Nothing contained in this Agreement, however, shall be deemed to be
(a) an acknowledgment by Caldwell Tanks or Caldwell as to the absence of any
other environmental issues associated with the Brown Parties or their assets
or properties, the existence of which
<PAGE>
would constitute a Retained Obligation or a breach of any representation or
warranty of the Matrix Parties contained in Section 4.16 of the Purchase
Agreement, (b) a waiver by Caldwell or Caldwell Tanks of any claims that they
may have against Brown, Matrix and/or GSAC, pursuant to the Purchase Agreement
or any Ancillary Document, or (c) except as expressly contemplated in this
Section 2, below, an assumption by Caldwell or Caldwell Tanks of any Retained
Obligations.
(ii) Brown, GSAC and Matrix, at their sole expense, agree: (i) (A)
to use their commercially reasonable efforts from and after the Closing to
cause the Broad Street Property and the Fayetteville Road Property not be
placed for any reason by the Georgia Environmental Protection Division
("Georgia EPD") on its Hazardous Site Inventory List, and not to be placed by
any other Governmental Body on any similar list designating that property as
being the subject of any monitoring by that Governmental Body or any required
remediation with respect to any Contamination (each a "List"), and (B) if
---
despite such efforts either or both of the Broad Street Property or the
Fayetteville Road Property is placed for any reason by the Georgia EPD or any
other Governmental Body on any List, to use their commercially reasonable
efforts from and after the Closing to cause the Broad Street Property and/or
the Fayetteville Road (as applicable) to be formally removed from that List by
the relevant Governmental Body (each a "Delisting" of the relevant property);
and (ii) to fully "Cleanup" (as defined in the definition of Environmental
---
Health and Safety Liabilities set forth on Exhibit A attached to the Purchase
---------
Agreement) in compliance with all applicable Legal Requirements, at no cost or
expense to Caldwell or Caldwell Tanks, and within a reasonable period of time
following the Closing, all soil Contamination on, under, across and at the
Broad Street Property (exclusive of the soils located directly beneath the
floor of the fabrication shop located on that property) and the Fayetteville
Road Property, in each case to a level that is below all Georgia Department of
Natural Resources maximum permissible levels for soil contamination (DNR
Levels) that are relevant to that property, and (iii) to cause, at their
---
expense, all soils and back fill which were the subject of or used in
connection with any of the above-described Cleanup efforts (or efforts to
cause a Delisting) to be returned, to the reasonable satisfaction of Caldwell,
to a state or condition sufficient to accommodate storm water run-off in
compliance with all applicable Governmental Authorizations and Legal
Requirements, and sufficient for Caldwell's use of the property for its
intended purposes as contemplated in the Purchase Agreement, consistent with
the past practices of Brown. Brown, GSAC and Matrix agree to keep Caldwell and
Caldwell Tanks, and their designated Representatives, reasonably informed of
their progress in remediating the Contamination, obtaining the Georgia EPD (or
other relevant Governmental Body's) notice of Delisting and, as applicable,
achieving the Remediation Levels, and agree to promptly provide Caldwell with
copies of all applications and related correspondence to or from the Georgia
EPD (or other relevant Governmental Body) regarding the Contamination and/or
the attempted Delisting, and to afford Caldwell, Caldwell Tanks, and their
designated Representatives, a reasonable opportunity to participate in all
meetings and discussions with the Georgia EPD (or other relevant Governmental
Body) in connection therewith.
2.2 Storm Water Permitting. Matrix, Brown and GSAC represent that, prior
to the date hereof, Brown received approval from the Georgia EPD of Brown's
FILAB Notices of Intent (NOI's) for its two facilities located in Newnan,
Georgia, which NOI's were included in the Assets acquired by Caldwell on the
date hereof (subject to Section 6.19 of the Purchase Agreement).
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<PAGE>
Caldwell and Caldwell Tanks agree that, from and after the date hereof, Brown,
Matrix and GSAC shall have no further responsibility for the maintenance,
renewal or replacement of those NOI's unless they are withdrawn or revoked by
the Georgia EPD as a direct and primary result of one or more Retained
Obligations, or one or more false or misleading statements made by Matrix, GSAC
and/or Brown in any application or other document filed by them with the Georgia
EPD prior to the date hereof.
2.3 Air Permitting/Title V. The parties acknowledge that prior to the
date hereof Brown received from the United States Environmental Protection
Agency ("USEPA") written permission to continue its operations at its facilities
in Newnan, Georgia in substantially the same manner as previously conducted,
pending the issuance by USEPA of one or more Title V air permits for those
facilities, and that such written permission (or the rights represented thereby)
were included in the Assets acquired by Caldwell on the date hereof (subject to
Section 6.19 of the Purchase Agreement). Caldwell and Caldwell Tanks agree that,
except for the continuing obligation of the Matrix Parties contained in Section
6.7 of the Purchase Agreement, Caldwell shall be responsible for obtaining those
Title V air permits following the date hereof, and the Matrix Parties shall have
no further responsibility with respect thereto, unless the written permission
described above is withdrawn by the USEPA, or the USEPA refuses to issue any of
those Title V air permits, as a direct and primary result of one or more
Retained Obligations, or one or more false or misleading statements made by
Matrix, GSAC and/or Brown in any application or other document filed by them
with the USEPA; provided that, the Matrix Parties shall be and remain liable (as
contemplated in the Purchase Agreement) for any fines, penalties and other
similar assessments, and for any Damage claims by any Governmental Bodies or
other Persons, that may be imposed or asserted against, or incurred by, any
Caldwell Indemnitees, as a result of any Brown Party or any of their assets or
properties not being in compliance with such matters or with applicable Legal
Requirements for all periods prior to the date hereof.
2.4 Paint Booths. The parties acknowledge that the new paint booth
facilities to be installed at the Lower Fayetteville Road and East Broad Street
facilities of Brown, and the modification and/or removal of the existing paint
booth facilities at those sites, each as contemplated in the parties' prior
discussions, have not been completed by Brown as of the date hereof. In light of
this, and out of business necessity, Caldwell and its employees will be required
to utilize those existing paint booth facilities, and to follow the past
practices of Brown in the use and operation of those existing facilities, in
order to meet their needs and the needs of Caldwell's and Caldwell Tanks'
customers, until such time as those new paint booth facilities have been fully
installed and are operational. Based on the foregoing, the parties agree as
follows:
(a) Caldwell agrees with Brown, Matrix and GSAC to use its
commercially reasonable efforts to complete the installation of the new paint
booth facilities at the earliest practicable time following the date hereof (and
in a manner consistent with the parties' prior discussions), with a view toward
discontinuing its use of the existing paint booth facilities as promptly as
possible.
(b) The parties have estimated that the total costs to be incurred by
Caldwell to complete the installation of the new paint booth facilities and
removal of the existing facilities (exclusive of the costs actually incurred by
Brown prior the Effective Date), each in accordance with applicable Legal
Requirements, will be $315,944. In order to provide Caldwell with the financial
resources to
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<PAGE>
complete that installation and removal following the date hereof, Brown has
agreed to reduce the Purchase Price otherwise payable by Caldwell at the Closing
by the amount of $315,944. In the event the actual costs incurred by Caldwell
following the date hereof to complete the installation of the new paint booth
facilities exceeds $315,944, Caldwell shall be entitled to no other
reimbursement from Brown, GSAC or Matrix for those excess completion costs. This
Section 2.4(b) shall be deemed to amend the Purchase Agreement to the extent of
the additional Purchase Price adjustment contemplated above.
(c) Brown, Matrix and GSAC hereby agree to defend, indemnify and hold
harmless each of the Caldwell Indemnitees from and against any and all Damages
that they may suffer or incur resulting from, arising out of or in connection
with the continued use and/or operation by Caldwell and its employees following
the date hereof of the existing paint booth facilities described above in a
manner consistent with the practices of Brown prior to the date hereof, except
to the extent such damages are the result of a breach by Caldwell of its
agreement in Section 2.4(a).
2.5 Waste Handling and Disposal. The parties agree that Caldwell shall be
solely responsible for its waste handling and disposal practices undertaken
following the date hereof. Matrix, GSAC and Brown shall be responsible for
paying their environmental consultants for their services in connection with the
development, prior to the date hereof, of plans regarding the waste handling,
characterization and disposal practices of Brown or Caldwell following the date
hereof, and Caldwell and Caldwell Tanks shall have the unqualified right,
following the date hereof, to use and rely upon those plans in their discretion
without further obligation to Brown, Matrix, GSAC or such environmental
consultants. Caldwell agrees to be solely responsible for the purchase and
installation of the solvent still for the Lower Fayetteville Road facility
previously discussed by the parties.
2.6 Asbestos. The Matrix Parties agree to pay and perform under the
contract attached hereto as Exhibit A to remove the asbestos at the facilities
of Caldwell (as successor in interest of Brown) described therein. The Matrix
Parties shall remain responsible for any improper or incomplete removal of such
asbestos pursuant to or in violation of those contracts or Legal Requirements,
and hereby agrees, upon the written request of Caldwell, to assign and transfer
to Caldwell all enforcement rights and related remedies of the Matrix Parties
against the other party(s) to those contracts, or to fully enforce those
contracts and pursue those remedies on behalf of and for the benefit of
Caldwell. Caldwell shall remain responsible, from and after the date hereof, for
any non-friable asbestos located at the facilities of Caldwell (as successor in
interest of Brown) in Newnan, Georgia that was specifically disclosed by Brown,
Matrix and GSAC in the Schedules attached to the Purchase Agreement, or that was
specifically identified in the Asbestos Report prepared by Ogden Environmental &
Energy Services in connection with the Purchase Agreement and provided to
Caldwell. Any other non-friable asbestos located at those facilities and not so
disclosed to Caldwell, and any friable asbestos located at or included in the
assets or properties of Brown or the Subsidiaries prior to the Closing
(including without limitation, any future abatement costs or other Damages
relating to or resulting from the same) shall remain the sole responsibility of
Brown, Matrix and GSAC, and shall constitute Retained Obligations for all
purposes, except to the extent that such Damages are aggravated by reason of the
action or inaction (where there is a duty or obligation to act) of Caldwell or
Caldwell Tanks, or their respective employees, following the date hereof.
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<PAGE>
2.7 UST's and AST's. The Matrix Parties agree that, except for the
continuing obligation of Caldwell and Caldwell Tanks contained in Section 6.7 of
the Purchase Agreement, the Matrix Parties shall, as contemplated in the
Purchase Agreement, be responsible for completing the actions (and shall
complete the actions) necessary to satisfy the closure to the satisfaction of
the USEPA of all underground storage tanks on the Broad Street Property and/or
the Fayetteville Road Property, and Caldwell and Caldwell Tanks shall have no
liability with respect thereto.
3. General.
3.1 Counterparts. This Agreement may be executed in one or more
counterparts.
3.2 Governing Law. All questions relating to this Agreement, including
contractual capacity, validity, performance, interpretation or remedies for
breach, shall be governed by Kentucky law, except that Kentucky choice of law
rules shall not apply.
3.3 Entire Agreement. This Agreement, together with the Purchase Agreement
and the other relevant Ancillary Documents, constitute the entire agreement
between the Company and Contractor with respect to the subject matter hereof.
3.4 Amendment. Any amendment to this Agreement shall be valid only if made
in writing and signed by the parties.
3.5 Definitions. Capitalized terms used but not defined herein shall have
their same respective meanings as in the Purchase Agreement. As used herein, the
term "Caldwell Indemnitees" shall be deemed to include Caldwell, Caldwell Tanks,
and each of their respective Affiliates, directors, officers, shareholders,
members, agents, employees, successors and assigns.
In Witness Whereof, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
Brown Steel Contractors, Inc.
By:______________________________
Title:___________________________
("Brown")
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<PAGE>
Matrix Service Company
By:___________________________________
Title:________________________________
("Matrix")
Georgia Steel Acquisition Corp.
By:___________________________________
Title:________________________________
("GSAC")
Caldwell Tanks Alliance, LLC
By:___________________________________
Title:________________________________
("Caldwell")
Caldwell Tanks, Inc.
By:___________________________________
Title:________________________________
("Caldwell Tanks")
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