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EXECUTION COPY
ASSET PURCHASE AGREEMENT
BY AND AMONG
STONE & WEBSTER, INCORPORATED,
CERTAIN SUBSIDIARIES
OF
STONE & WEBSTER, INCORPORATED
AND
THE SHAW GROUP INC.
DATED AS OF JULY 14, 2000
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LIST OF SCHEDULES AND EXHIBITS
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Schedule 2.01(a).................................................................................List of Real Property
Schedule 2.01(e).............................................................................List of Assumed Contracts
Schedule 2.01(f)...............................................................List of Licenses, Permits and Approvals
Schedule 2.01(g).......................................................................List of Intellectual Properties
Schedule 2.01(i)...................................................................................List of Investments
Schedule 2.02(b)...................................................................................Completed Contracts
Schedule 2.02(d).......................................................................................Excluded Assets
Schedule 2.03......................................................................................Assumed Liabilities
Schedule 2.02(e)................................................................................Special Project Claims
Schedule 2.05(c)...............................................................Schedule of Cold Storage Selling Prices
Schedule 3.02(b).............................................................Requisite Approvals, Consents and Filings
Schedule 3.02(c).........................................................................Breaches of Assumed Contracts
Schedule 3.04............................................................Agreements, Contracts, Commitments and Rights
Schedule 3.05..........................................................................Legal and Regulatory Compliance
Schedule 3.06...................................................Financial Statements and Quarterly Report on Form 10-Q
Schedule 3.07..................................................................................Undisclosed Liabilities
Schedule 3.08........................................................................................Recent Activities
Schedule 3.09...................................Subsidiaries and Affiliates; Direct, Indirect and Beneficial Interests
Schedule 3.11...............................................................................Title to Personal Property
Schedule 3.12(a)............................................................................Real Property Encumbrances
Schedule 3.12(b)..................................................................Permitted Real Property Encumbrances
Schedule 3.13(b)..................................................................................Environmental Claims
Schedule 3.13(c)............................................................................Contamination and Releases
Schedule 3.13(d).......................................................................Reports, Audits and Assessments
Schedule 3.13(f)......................................Materials of Environmental Concern and Underground Storage Tanks
Schedule 3.14.........................................................Intellectual Properties, Computer Software, Etc.
Schedule 3.15................................................................................................Insurance
Schedule 3.16.....................................................................................Permits and Licenses
Schedule 3.17........................................................................................List of Contracts
Schedule 3.18.....................................................................................Contract Disclosures
Schedule 3.19(b)......................................................................Employees and Employee Relations
Schedule 3.20(a)................................................................................Employee Benefit Plans
Schedule 3.20(b).......................................................Employee Benefit Plan Audits and Adverse Events
Schedule 3.20(e)...............................................................................Prohibited Transactions
Schedule 3.20(f)....................................................................Terminations and Reportable Events
Schedule 3.20(g)............................................................................Multi-Employer Plans, Etc.
Schedule 3.21...............................................................................Litigation and Proceedings
Schedule 3.22....................................................................................................Taxes
Schedule 3.32......................................................................................Accounts Receivable
Schedule 3.33...............................................................................Related Party Transactions
Schedule 4.08..................................................................................Actions and Proceedings
Schedule 5.01...........................................................................................Retention Plan
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Schedule 5.03...........................................................................Certain Actions: D&O Insurance
Schedule 5.04......................................................................................Employee Agreements
Schedule 5.15.............................................................................................Encumbrances
Schedule 5.16(b)............................................................................List of Rejected Contracts
Schedule 7.02(c)................................................................................Consents to Assignment
Exhibit A..............................................................................Form of Buyer's Counsel Opinion
Exhibit B.............................................................................Form of Sellers' Counsel Opinion
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TABLE OF CONTENTS
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1. DEFINITIONS AND REFERENCES..............................................................................1
1.01. Definitions....................................................................................1
1.02. Certain References............................................................................14
2. SALE OF ASSETS AND RELATED MATTERS.....................................................................14
2.01. Sale of Assets................................................................................14
2.02. Excluded Assets...............................................................................16
2.03. Assumed Liabilities...........................................................................17
2.04. Excluded Liabilities..........................................................................17
2.05. Equity Purchase Price; Indemnity Deposit, LC Deposit and Litigation Deposit;
Delivery of Consideration; Equity Purchase Price Adjustments; Allocation of Equity
Purchase Price................................................................................18
2.06. Registration Rights...........................................................................20
2.07. Addition of Sellers; Schedules................................................................21
3. REPRESENTATIONS AND WARRANTIES OF S & W................................................................21
3.01. Organization..................................................................................21
3.02. Powers; Consents; Absence of Conflicts, Etc...................................................21
3.03. Binding Agreement.............................................................................22
3.04. Subsidiaries, Investments and Third Party Rights..............................................22
3.05. Legal and Regulatory Compliance...............................................................22
3.06. Financial Statements..........................................................................22
3.07. Undisclosed Liabilities.......................................................................22
3.08. Recent Activities.............................................................................22
3.09. Subsidiaries and Affiliates; Assets...........................................................23
3.10. Equipment.....................................................................................23
3.11. Title to Personal Property....................................................................23
3.12. Real Property.................................................................................24
3.13. Environmental Matters.........................................................................24
3.14. Intellectual Properties, Computer Software, etc...............................................25
3.15. Insurance.....................................................................................25
3.16. Permits and Licenses..........................................................................26
3.17. Agreements and Commitments....................................................................26
3.18. The Contracts.................................................................................27
3.19. Employees and Employee Relations..............................................................28
3.20. Employee Benefit Plans........................................................................28
3.21. Litigation and Proceedings....................................................................30
3.22. Taxes.........................................................................................30
3.23. Brokers and Finders...........................................................................30
3.24. Payments......................................................................................31
3.25. Operation of the Business.....................................................................31
3.26. Customer List.................................................................................31
3.27. Backlog.......................................................................................31
3.28. Investment Experience and Intent; No Registration.............................................31
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3.29. Accredited Investor Status....................................................................31
3.30. Rule 144......................................................................................31
3.31. Government Contracting........................................................................32
3.32. Accounts Receivable...........................................................................32
3.33. Related Party Transactions....................................................................33
4. REPRESENTATIONS AND WARRANTIES OF BUYER................................................................33
4.01. Organization..................................................................................33
4.02. Corporate Powers; Consents; Absence of Conflicts, Etc.........................................33
4.03. Binding Agreement.............................................................................34
4.04. Issuance of Share Consideration...............................................................34
4.05. Brokers and Finders...........................................................................34
4.06. Payments 34
4.07. SEC Documents and other Reports...............................................................34
4.08. Actions and Proceedings.......................................................................35
4.09. Capital Structure.............................................................................35
4.10. Absence of Certain Changes or Events..........................................................35
5. COVENANTS AND AGREEMENTS OF THE PARTIES................................................................35
5.01. Bankruptcy Cases and Sale Motion; Entry of Sale Order; Additional Sellers.....................35
5.02. Operations....................................................................................35
5.03. Certain Actions...............................................................................36
5.04. Employee Matters..............................................................................37
5.05. Access to and Provision of Additional Information.............................................38
5.06. Post-Closing Maintenance of and Access to Information.........................................39
5.07. Governmental Authority Approvals: Consents to Assignment......................................40
5.08. Noncompetition................................................................................41
5.09. Use of Names..................................................................................42
5.10. Allocation of Equity Purchase Price for Tax Purposes..........................................42
5.11. Further Acts and Assurances...................................................................42
5.12. Costs and Expenses............................................................................42
5.13. Insurance Ratings.............................................................................43
5.14. Fulfillment of Conditions.....................................................................43
5.15. Release of Encumbrances.......................................................................43
5.16. Assumed and Assigned Contracts; Rejected Contracts............................................43
5.17. Bankruptcy Court Approval.....................................................................44
5.18. Transfer Taxes................................................................................45
5.19. Listing Application...........................................................................45
5.20. Bankruptcy Filings............................................................................45
5.21. Non-Solicitation..............................................................................46
5.22. Tail Insurance................................................................................46
5.23. Other Agreements..............................................................................46
5.24. Temporary Space...............................................................................46
5.25. Schenectady Lease.............................................................................46
5.26. Representation, Warranties and Covenants of Certain Subsidiaries..............................46
5.27. Jacobs Credit Agreement.......................................................................48
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5.28. Canadian Transfer.............................................................................48
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS.........................................................49
6.01. Representations and Warranties; Covenants.....................................................49
6.02. Adverse Actions or Proceedings................................................................49
6.03. Pre-Closing Confirmations.....................................................................49
6.04. Approval, Execution and Delivery of Additional Agreements.....................................49
6.05. Opinion of Buyer's Counsel....................................................................49
6.06. No Buyer Material Adverse Change..............................................................49
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER...........................................................49
7.01. Representations and Warranties; Covenants.....................................................50
7.02. Pre-Closing Confirmations and Contractual Consents............................................50
7.03. Adverse Actions or Proceedings................................................................50
7.04. Operations; No Material Adverse Effect........................................................50
7.05. Title Insurance Policies and Surveys..........................................................50
7.06. Opinion of Sellers' Counsel...................................................................51
7.07. Deliveries at Closing.........................................................................51
7.08. Lien Searches.................................................................................51
7.09. Approval, Execution and Delivery of Additional Agreements.....................................51
8. CLOSING; TERMINATION OF AGREEMENT......................................................................51
8.01. Closing.......................................................................................51
8.02. Action of Sellers at Closing..................................................................52
8.03. Action of Buyer at Closing....................................................................53
8.04. Termination Prior to Closing..................................................................53
9. INDEMNIFICATION........................................................................................54
9.01. Indemnification by Sellers....................................................................54
9.02. Sellers' Limitations..........................................................................55
9.03. Indemnification by Buyer......................................................................55
9.04. Buyer's Limitations...........................................................................55
9.05. Notice and Procedure..........................................................................56
9.06. Survival of Representations; Indemnity Periods................................................58
9.07. Limitations of Liability......................................................................59
10. GENERAL................................................................................................59
10.01. Schedules.....................................................................................59
10.02. Tax Effect....................................................................................59
10.03. Reproduction of Documents.....................................................................60
10.04. Time of Essence...............................................................................60
10.05. Consents, Approvals and Discretion............................................................60
10.06. Choice of Law; Submission to Jurisdiction.....................................................60
10.07. Benefit; Assignment...........................................................................60
10.08. No Third Party Beneficiary....................................................................60
10.09. Waiver of Breach, Right or Remedy.............................................................61
10.10. Notices.......................................................................................61
10.11. Misdirected Payments; Offset Rights...........................................................62
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10.12. Severability..................................................................................62
10.13. Entire Agreement; Counterparts; Amendment.....................................................63
10.14. Drafting .....................................................................................63
10.15. Confidentiality...............................................................................63
10.16. Publicity.....................................................................................63
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is made and entered into as
of the 14th day of July, 2000, by and among THE SHAW GROUP INC., a Louisiana
corporation (together with its assignees, if any, "Buyer"), and STONE & WEBSTER,
INCORPORATED, a Delaware corporation ("S & W"), and the Subsidiaries (as
defined) of S & W that become signatories to this Agreement in accordance with
the terms hereof (together with S & W, "Sellers").
WITNESSETH
WHEREAS, Buyer and Sellers desire to enter into a definitive agreement
for the sale and purchase of the Assets (as defined) and the assumption of the
Assumed Contracts (as defined) and the Assumed Liabilities (as defined) of
Sellers, as more fully described and defined in this Agreement;
WHEREAS, the Assets are owned by S & W and certain of its direct and
indirect Subsidiaries and this Agreement is being executed initially by S & W
and Buyer with the agreement of S & W as is set forth herein to cause any of its
Subsidiaries that has any right, title or interest in or to the Assets to become
a party to, and one of the Sellers under, this Agreement by an amendment hereto;
WHEREAS, in order to facilitate the Transaction (as defined), S & W has
filed, and has caused certain of the other Sellers to file, cases under chapter
11 of the Bankruptcy Code (as defined);
WHEREAS, in furtherance of the Transaction, Sellers have received
approval of the Executory Contract Assumption and Assignment Order (as defined)
and the Sale Order (as defined) from the Bankruptcy Court (as defined);
WHEREAS, the Parties intend to consummate the sale and purchase of the
Assets owned by the Foreign Sellers (as defined) outside of the Bankruptcy Cases
and in compliance with the Legal Requirements (as defined) of such foreign
jurisdictions governing the sale and purchase of such Assets; and
WHEREAS, Sellers desire to sell the Assets to Buyer, and Buyer desires
to purchase the Assets from Sellers, on the terms and subject to the conditions
set forth in this Agreement;
NOW, THEREFORE, for and in consideration of the foregoing premises, and
the agreements, covenants, representations and warranties hereinafter set forth,
and other good and valuable consideration, the receipt and adequacy of which are
forever acknowledged and accepted, the parties, intending to be legally bound,
hereby agree as follows:
1. DEFINITIONS AND REFERENCES
1.01. Definitions. As used in this Agreement, the following terms have
the meanings given:
Accounting Arbitrator: as defined in Section 2.05(c)(i)(C);
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Accounts Receivable: all accounts receivable of any Seller, of
whatever kind or nature, including all current or deferred rights to
payment for projects completed or commenced or services rendered on or
prior to the Closing Date, whether or not such services have been billed by
Sellers as of the Closing Date;
Accredited Investor: as defined in Rule 501 of Regulation D
promulgated under the Securities Act;
Adjustment Amount: as defined in Section 2.05(c)(i)(A);
Adjustment Assets: as defined in Section 2.05(c)(i)(A);
Adjustment Liabilities: as defined in Section 2.05(c)(i)(A);
Affiliate: any Person that, directly or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with
another Person, including the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of
securities, election or appointment of directors, by contract or otherwise;
Affiliated Group: any affiliated group within the meaning of Code Sec.
1504 or any similar group defined under a similar provision of state, local
or foreign law;
Aggregate Consideration: as defined in Section 2.05(a);
Agreement: this Asset Purchase Agreement and all Exhibits and
Schedules attached hereto, as amended, consolidated, supplemented, novated
or replaced by the parties from time to time;
Applicable Rate: shall mean a per annum rate of interest (computed on
the basis of the actual number of days elapsed (including the first but
excluding the last day) over a year of 365 or 366 days, as the case may be)
equal to 3% plus the Prime Rate as from time to time in effect, the
Applicable Rate to change automatically from time to time effective at the
beginning of each business day on which a change in the Prime Rate becomes
effective;
Assets: all assets, real, personal and mixed, tangible and intangible,
owned by Sellers or leased by Sellers pursuant to capital leases, including
the assets reflected on the March 31 Balance Sheet, in such amounts as
exist on the Closing Date, but excluding in any event the Excluded Assets;
Assumed Contracts: all Contracts of Sellers (including the Employee
Agreements) other than the Rejected Contracts and the Completed Contracts;
Assumed Liabilities: (i) all liabilities and obligations of Sellers
set forth on Schedule 2.03 as of the Closing Date and (ii) with respect to
such liabilities and obligations as are properly reflected on a balance
sheet under GAAP, in such amounts as are incurred in the ordinary course of
the Business and reflected on the Closing Balance
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Sheet and which are anticipated to be equal to or in excess of Four Hundred
Million Dollars ($400,000,000); provided, however, that, notwithstanding
anything contained in this Agreement to the contrary, Assumed Liabilities
shall not include any Excluded Liability, including those listed in Section
2.04;
Audited Financial Statements: the audited consolidated balance sheet
of S & W as of December 31, 1999 and the audited consolidated statements of
operations and comprehensive income and cash flows for the three fiscal
years then ended, together with the notes thereto and the report thereon of
PricewaterhouseCoopers LLP, independent certified public accountants, and
any audited restatements thereof;
Average Price: as defined in Section 2.05(a);
Bankruptcy Cases: the cases under chapter 11 of the Bankruptcy Code
filed by each of the Sellers (other than the Foreign Sellers) in the
Bankruptcy Court or any Person who hereafter becomes a Seller and files a
case under chapter 11 of the Bankruptcy Code pursuant to Section 5.01,
which cases have been administratively consolidated;
Bankruptcy Code: 11 U.S.C. 101 et. seq., and applicable federal rules
of bankruptcy procedure thereunder;
Bankruptcy Court: (a) the United States District Court for the
District of Delaware, which has jurisdiction over the Bankruptcy Cases or
(b) such other Court to which the Bankruptcy Cases may be transferred;
Bid: any quotation, bid or proposal by any Seller which, if accepted
or awarded, would lead to a Fixed Price Contract;
Business: any and all businesses owned, leased, managed or otherwise
operated or conducted by any of Sellers;
Buyer: as defined in the Preamble;
Buyer Material Adverse Effect: a material adverse change (or event or
condition that could result in a material adverse change) in the business,
condition (financial or other), operations, assets or liabilities of Buyer,
whether individually or in the aggregate;
Buyer SEC Documents: as defined in Section 4.07;
Buyer's Indemnified Persons: Buyer and Buyer's stockholders, members,
Affiliates, successors and assigns, and their respective stockholders,
partners, Affiliates, directors, trustees, officers, employees, agents and
representatives;
Canadian Assets: Assets held by direct or indirect Canadian
Subsidiaries of S & W;
Canadian Consideration: cash in the amount of Three Million Dollars
($3,000,000) and 255,688 shares of Common Stock having a market value of
Twelve
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Million One Hundred Twenty-One Thousand Two Hundred Twelve Thousand
Dollars ($12,121,212), which was determined by dividing Ten Million
Dollars ($10,000,000) based on the Average Price by the 82.5% rate at
which Common Stock was given credit in the auction relating to the
Transaction;
Canadian Liabilities: Assumed Liabilities of direct or indirect
Canadian Subsidiaries of S & W;
Canadian Transfer: as defined in Section 5.28(b);
Canadian Transfer Claim: as defined in Section 5.28(c);
Cash: cash and cash equivalents;
Cash Consideration: as defined in Section 2.05(a);
Claim Notice: written notification of a Third Party Claim by an
Indemnified Party to an Indemnifying Party under Article 9, including
a Revenue Agent's Report, Statutory Notice of Deficiency, Notice of
Proposed Assessment, or any other official written notice from a
Taxing authority that Taxes are due or that a Tax audit will be
conducted;
Closing: as defined in Section 8.01;
Closing Balance Sheet: the audited consolidated balance sheet of
S & W as of the Closing Date prepared in accordance with GAAP, except
for using estimated costs of completion, change order recoveries and
claim recoveries with respect to Rejected Contracts and Completed
Contracts and liability estimates with respect to matters set forth in
Section 2.04(f) as of March 31, 2000 without further revisions, and
recorded in a manner consistent with the preparation of the March 31
Balance Sheet;
Closing Date: the date on or as of which the Closing occurs;
Code: the Internal Revenue Code of 1986, as amended;
Cold Storage Business: the business of S & W conducted by and
through the Nordic Entities, together with all assets and property
used by such entities to conduct such business;
Common Stock: common stock, no par value per share, of Buyer;
Competing Proposal: a competitive bid or proposal from a third
party (a) to purchase (i) substantially all of Sellers' assets, (ii)
only the assets of the Cold Storage Business, or (iii) substantially
all of the assets of Sellers other than the Cold Storage Business, in
each case whether in a separate transaction or series of transactions
or as part of a plan of reorganization of Sellers or any of them, (b)
for any merger, consolidation, liquidation, dissolution or similar
transaction involving Sellers or any of them or (c) to provide debt or
equity financing to the Sellers or any of them;
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Completed Contracts: Contracts of Sellers, including those
specifically set forth on Schedule 2.02(b), under which substantially
all of the contractual work effort of Sellers has been completed, even
if such Contracts have continuing warranty obligations, administrative
matters or work related to warranty or other claims;
Completed Contracts Receivables: all Accounts Receivables related
to Completed Contracts;
Contracts: all commitments, contracts, leases, licenses,
agreements and understandings, written or oral, relating to the Assets
or the operation of the Business to which any Seller is a party or by
which it or any of its Assets are bound;
Controlled Group: with respect to Sellers, a group consisting of
each trade or business (whether or not incorporated) which, together
with Sellers, would be deemed a "single employer" within the meaning
of Section 4001(b)(l) of ERISA or subsections (b), (c), (m) or (o) of
Section 414 of the Code;
Cost Plus Contract: any Contract providing for the reimbursement
of costs and expenses incurred by a Person in connection with the
performance of such Contract, in addition to the payment of any fixed
or negotiated fees or charges related to the Contract;
Effective Date: the date of execution of this Agreement;
Employee Agreements: all agreements or arrangements set forth on
Schedule 5.04;
Employee Benefit Plan: any (a) nonqualified deferred compensation
or retirement plan or arrangement which is an Employee Pension Benefit
Plan, (b) qualified defined contribution retirement plan or
arrangement which is an Employee Pension Benefit Plan (including any
Multiemployer Plan), (c) qualified defined benefit retirement plan or
arrangement which is an Employee Pension Benefit Plan (including any
Multiemployer Plan), or (d) Employee Welfare Benefit Plan or material
fringe benefit plan or program;
Employee Pension Benefit Plan: as defined in ERISA Sec. 3(2);
Employee Welfare Benefit Plan: as defined in ERISA Sec. 3(1);
Encumbrances: liabilities, levies, claims, charges, assessments,
mortgages, security interests, liens, pledges, conditional sales
agreements, title retention contracts, leases, subleases, rights of
first refusal, options to purchase, restrictions and other
encumbrances, and agreements or commitments to create or suffer any of
the foregoing;
Environmental Claim: any oral or written notice by a Person
alleging liability (including liability for investigatory costs,
cleanup costs, Governmental Authority response costs, natural resource
damages, property damages, personal injuries, or penalties) arising
out of, based on or resulting from (a) the presence, or release into
the environment, of any Materials of Environmental Concern at any
location, whether or not owned by Sellers, (b) circumstances forming
the basis of any violation, or alleged
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violation, of any Environmental Laws; or (c) circumstances in which
Sellers have or may have retained or assumed either contractually or
by operation of law any liability for any Environmental Claims alleged
or asserted against any third party;
Environmental Laws: any and all Legal Requirements relating to
pollution or protection of human health or the environment (including
ground water, land surface or subsurface strata), including Legal
Requirements relating to emissions, discharges, releases or threatened
releases of Materials of Environmental Concern, or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, recycling, reporting or handling of Materials of
Environmental Concern;
Equity Purchase Price: as defined in Section 2.05(a);
ERISA: the Employee Retirement Income Security Act of 1974, as
amended;
ERISA Fiduciary: as defined in ERISA Section 3(21);
Escrow Agent: a financial institution acceptable to the parties;
ESOP: Employee Stock Ownership Plan of Stone & Webster,
Incorporated and Participating Subsidiaries;
ESOP Note: note receivable reflected on the March 31 Balance
Sheet relating to the ESOP;
Excluded Assets: as defined in Section 2.02;
Excluded Liabilities: any and all liabilities or obligations of
Sellers of any kind or nature, other than the Assumed Liabilities,
including those liabilities or obligations described in Section 2.04,
whether known or unknown, fixed or contingent, recorded or unrecorded,
and whether arising before or after the Closing, including claims
relating to professional liability, errors and omissions, pending and
threatened litigation, pending and future claims relating to asbestos,
and claims in connection with performance, surety or other bonds
relating to Completed Contracts or Rejected Contracts;
Excluded Subsidiary Stock: the capital stock of any direct or
indirect Subsidiary of S & W the Assets of which are purchased, but no
capital stock is purchased by the Buyer, in the Transaction;
Executory Contract Assumption and Assignment Order: an Order of
the Bankruptcy Court, which may be the Sale Order and must be in form
and substance acceptable to Buyer, which (a) approves the provisions
of Section 5.16(a), (b) authorizes and directs Sellers, pursuant to
Section 365 of the Bankruptcy Code, to assume and to assign to Buyer
the Assumed Contracts and to make all pre-petition and post-petition
payments related thereto that are not Assumed Liabilities and (c)
determines that Buyer has provided adequate assurance of future
performance relative to the Assumed Contracts;
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Final Order: an order of the Bankruptcy Court, the operation or
effect of which has not been stayed, and which is not subject to any
pending appeal, request for leave to appeal or request for
reconsideration and as to which the time for any such appeal, request
for leave to appeal or request for reconsideration has expired;
Financial Statements: the Audited Financial Statements, the
Unaudited Financial Statements, the Interim Financial Statements, the
Interim Closing Balance Sheet and the Closing Balance Sheet;
Fixed Price Contracts: "fixed-price", "guaranteed maximum price",
"flat rate" or similar Contracts with fixed or capped payment amounts,
including all such Contracts involving a joint venture, partnership or
teaming arrangement of any Seller and any other party;
Foreign Sellers: Sellers incorporated, or otherwise formed or
organized, and conducting business in any jurisdiction other than the
United States; provided, however, that Foreign Sellers shall not
include any Sellers that are eligible to be debtors under Section 109
of the Bankruptcy Code;
Foreign Subsidiaries: as defined in Section 5.26;
GAAP: as defined in Section 3.06;
Government Contract: (i) any Contract between any Seller and (a)
any Governmental Authority or (b) any prime contractor to any
Governmental Authority, and (ii) any Contract described in clause
(i)(a) or (i)(b) which is wholly or partially funded by, directly or
indirectly, or through any Governmental Authority;
Governmental Authorities: all agencies, authorities, bodies,
boards, commissions, courts (including the Bankruptcy Court),
instrumentalities, legislatures and offices of any nature whatsoever
of any federal, state, county, district, municipal, city, foreign or
other government or quasi-government unit or political subdivision;
Hired Employees: employees of Sellers as of the Closing Date
hired by Buyer pursuant to Section 5.04;
Holder: a Seller that is a party to the Registration Rights
Agreement;
HSR Act: the Hart-Scott Rodino Antitrust Improvements Act of
1976, as amended;
Immaterial Contracts: Contracts that (i) require (a) the future
payment by or to Sellers of (I) Five Hundred Thousand Dollars
($500,000) or less in the case of any Fixed Price Contract or (II)
Seven Hundred Fifty Thousand Dollars ($750,000) or less in the case of
Cost Plus Contracts or (b) the future performance by Sellers of
services having a value of (I) Five Hundred Thousand Dollars
($500,000) or less in the case of any Fixed Price Contract or (II)
Seven Hundred Fifty Thousand Dollars ($750,000) or less in the case of
Cost Plus Contracts, or (ii) are terminable by Sellers at any time
without cause
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upon 90 days' notice or less; provided, however, that, notwithstanding
the foregoing, Immaterial Contracts shall not include any Contracts
set forth on Schedule 3.17 or any Contracts that, pursuant to Section
365 of the Bankruptcy Code, are not assumable or assignable without
the consent of the non-debtor parties thereto;
Indemnified Party: any Person entitled to indemnification under
Article 9;
Indemnifying Party: any Person obligated to indemnify another
Person under Article 9;
Indemnity Deposit: shares of Common Stock having an aggregate
value of Twenty Five Million Dollars ($25,000,000) based on the
Average Price, to be delivered by Buyer to the Escrow Agent pursuant
to Section 8.03(b) and subject to the Indemnity Escrow Agreement, and
all accumulated dividends or distributions thereon, which shares will
be a part of and withheld from the Share Consideration;
Indemnity Escrow Agreement: the Indemnity Escrow Agreement by and
among S & W, Buyer and the Escrow Agent, dated as of the date hereof,
pursuant to which the Indemnity Deposit and the LC Deposit will be
delivered to the Escrow Agent at Closing to secure certain obligations
of indemnity of Sellers under this Agreement;
Indemnity Notice: written notification of a claim for indemnity
under Article 9 other than a Third Party Claim, made by an Indemnified
Party to an Indemnifying Party pursuant to Section 9.05;
Intellectual Properties: all of Sellers' marks, names, and all
variations of the foregoing, all trademarks, service marks, assumed
names, logos, including all goodwill associated therewith, patents,
patent rights, copyrights, trade secrets and similar intangibles
(including all variants thereof, applications therefor and renewals or
extensions thereof);
Interim Closing Balance Sheet: the unaudited consolidated balance
sheet of S & W as of the most recent month end available prior to the
Closing Date;
Interim Financial Statements: the unaudited consolidated balance
sheet of S & W as of April 30, 2000 and consolidated statement of
operations of S & W for the four months ended April 30, 2000, attached
to this Agreement as Schedule 3.06;
Investments: shares of capital stock of any corporation,
interests in partnerships or limited liability companies, or other
equity or debt instruments issued by any Person, and proceeds from the
sale thereof;
Jacobs: Jacobs Engineering Group Inc., a Delaware corporation;
Jacobs Asset Purchase Agreement: the Asset Purchase Agreement
dated as of June 1, 2000, by and among Jacobs, S & W and certain
subsidiaries of S & W, and all Exhibits and Schedules attached thereto,
as amended, consolidated, supplemented, novated or replaced by the
parties thereto from time to time;
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Jacobs Credit Agreement: the Revolving Credit Agreement dated as
of May 9, 2000, between S & W and Jacobs;
Jacobs DIP Agreement: the Debtor-In-Possession Credit Agreement
dated as of June 2, 2000, among Jacobs, S & W and certain subsidiaries
of S & W;
Knowledge of Buyer: with reference to this Agreement means the
knowledge of the executive officers of Buyer;
Knowledge of Sellers: with reference to this Agreement means the
knowledge of the executive officers of S & W, the senior officers or
managers of each of the other Sellers, or, with respect to any
environmental matters, each employee of each Seller responsible for
supervising environmental compliance, and the following additional
natural persons: James Callahan, Norman Spence, Peter Oppenheim, Keith
Dodson and Stanley Genega;
LC Deposit: shares of Common Stock having an aggregate value of
$13,564,051, to be delivered by Buyer to the Escrow Agent pursuant to
Section 8.03(b) and subject to the Indemnity Escrow Agreement, and all
accumulated dividends or distributions thereon, which shares will be a
part of and withheld from the Share Consideration;
Legal Requirements: with respect to any Person, all statutes,
ordinances, by-laws, codes, rules, regulations, restrictions,
judgments, orders, writs, injunctions, decrees, determinations or
awards of any Governmental Authority having jurisdiction over such
Person or any of such Person's assets or businesses;
Litigation Deposit: cash in the amount of Two Million Five
Hundred Thousand Dollars ($2,500,000) to be deducted from the Cash
Consideration and which shall be deposited in an account under the
control of the Massachusetts Court in connection with case number
99-CV-10939-NG, styled Roy L. Simons v. Stone & Webster Engineering
Corporation;
Losses: any and all damages, claims, costs, losses, liabilities,
expenses or obligations (including Taxes, interest, penalties, court
costs, costs of preparation and investigation, and reasonable
attorneys', accountants' and other professional advisors' fees and
expenses);
March 31 Balance Sheet: the consolidated balance sheet of S & W
as of March 31, 2000 as published with S & W's April 30, 2000 earnings
release, as corrected;
Massachusetts Court: United States District Court for the
District of Massachusetts;
Material Adverse Effect: a change (or event or condition that
could result in a change) resulting in a loss or diminution of value
equal to or in excess of Fifteen Million Dollars ($15,000,000) in the
business, condition (financial or other), operations, assets or
liabilities of Sellers, whether individually or collectively, other
than changes resulting from (a) disruptions to the Business as a
result of Sellers' financial condition as of the
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Effective Date, (b) the filing of the Bankruptcy Cases or (c) the
effect of the performance of the financial markets generally on the
Retirement Plan's assets and investments;
Materials of Environmental Concern: chemicals, pollutants,
contaminants, medical waste or specimens, toxic substances, petroleum
and petroleum products, including hazardous wastes under the Resource,
Conservation and Recovery Act, 42 U.S.C. Section 6903 et seq.,
hazardous substances under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. 9601 et seq.,
asbestos, polychlorinated biphenyls and urea formaldehyde, and
low-level nuclear materials, special nuclear materials or
nuclear-byproduct materials, all within the meaning of the Atomic
Energy Act of 1954, as amended, and any rules, regulations or policies
promulgated thereunder;
Multiemployer Plan: defined in ERISA Section 3(37) or Section
400l(a)(3);
Multiple Employer Plan: an Employee Pension Benefit Plan which is
not a Multiemployer Plan and for which a Person who is not a member of
a Controlled Group that includes any of Sellers is or has been a
contributing sponsor;
Nordic Entities: Nordic Holdings, Inc., a Delaware corporation,
Nordic Investors, Inc., a Nevada corporation, Nordic Rail Services,
Inc., a North Carolina corporation, Nordic Transportation Services,
Inc., a North Carolina corporation, Nordic Refrigerated Services,
Inc., a North Carolina corporation, Nordic Refrigerated Services,
Limited Partnership, a Georgia limited partnership, Commercial Cold
Storage, Inc., a Georgia corporation, and Polar Transport, Inc., a
North Carolina corporation;
Notice Period: as defined in Section 9.05(a)(i);
Other Plan: any Contract, program or arrangement which provides
cash or non-cash benefits or perquisites to current or former
employees of any of Sellers, but which is not an Employee Benefit
Plan, as set forth on Schedule 3.20(a);
Party: any party to this Agreement, its successors and assigns;
Party In Interest: a "party in interest" as defined in ERISA
Section 3(14), and a "party in interest" as defined in the Bankruptcy
Code;
Permits: all licenses, permits, consents, approvals and other
authorizations of or from all Governmental Authorities which are
necessary to the ownership of the Assets or in the conduct of the
Business as presently conducted and the ownership of the Assets;
Permitted Real Property Encumbrances: those Encumbrances set
forth on Schedule 3.12(b), which Encumbrances generally include
utility easements and other customary covenants and restrictions of
record that do not adversely affect the ownership of the Real Property
or the conduct of the Business and Encumbrances related to Assumed
Liabilities;
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Person: any individual, company, body corporate, association,
partnership, firm, joint venture, trust, trustee or Governmental
Authority;
Pre-Closing Environmental Matters: all liabilities arising from
(i) the pre-closing release of Materials of Environmental Concern
either in, on, under or from the Real Property or any current or
former facility where any Seller has conducted the Business,
including, without limitation, the effects of such release of
Materials of Environmental Concern on natural resources, persons or
property within or outside the boundaries of the Real Property or any
such current or former facility, (ii) the presence as of the Closing
Date of Materials of Environmental Concern in, on or under the Real
Property or any such current or former facility, (iii) the failure on
or prior to the Closing Date of the facility or any former facility or
any operations of Sellers to be in compliance with any Environmental
Laws in effect at the time of Closing, (iv) the disposal of Materials
of Environmental Concern by the Business or arrangement thereof at any
location other than the Real Property or the current or former
facilities on or prior to the Closing Date, and (v) any other
pre-Closing act, omission or condition existing with respect to any of
the Assets or related to the Business, the Real Property or any
current or former facility prior to the Closing Date which gives rise
to liability under any Environmental Laws in effect at the time of
Closing;
Preferred Stock: preferred stock, no par value per share, of
Buyer;
Prescient Business: the business of Sellers conducted by and
through Prescient Technologies, Inc., together with all assets and
property used by such entity to conduct its business;
Prime Rate: at the time any determination thereof is to be made,
the fluctuating per annum rate of interest then most recently reported
in the Wall Street Journal as the "Prime Rate" (the base rate on
corporate loans posted by at least 75% of the nation's 30 largest
banks) and if reported as a range, the interest rate shall be the
mid-point of the range. In the event that the Wall Street Journal
ceases to report the Prime Rate, then "Prime Rate" shall mean the
fluctuating interest rate per annum announced from time to time by
Bank One, NA as its "prime rate" (or, if otherwise denominated, such
bank's reference rate for interest rate calculations on general
commercial loans), which rate is not necessarily the lowest or best
rate that such bank may at any time or from time to time charge any of
its customers;
Process Business: certain assets (including real property) and
liabilities of Sellers with respect to ethylene process technology
(comprising hot-end ethylene technology and cold-end ethylene
technology) and fluid catalytic cracking technology;
Prohibited Transaction: as defined in ERISA Sec. 406 and Code
Sec. 4975;
Project Rejected Contracts: Rejected Contracts and Completed
Contracts related to projects as to which standby letters of credit
are outstanding under S & W's existing bank credit facilities, which
Contracts are set forth and designated as such on Schedule
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5.16(b) (as amended or supplemented in accordance with Section
5.16(b)) and to which the LC Deposit relates;
Purchase Price Adjustment Schedule: as defined in Section
2.05(c)(i)(A);
Real Property: all real property owned or leased by any Seller,
including the real property described on Schedule 2.01(a), together
with all buildings, improvements and fixtures thereon and all
appurtenances and rights thereto;
Real Property Encumbrances: those Encumbrances set forth on
Schedule 3.12(a) related to the Real Property;
Registration Rights Agreement: the Registration Rights Agreement
by and among Buyer and the Holders dated the date hereof;
Rejected Contracts: all Contracts of Sellers (including the
Project Rejected Contracts) designated as such on Schedule 5.16(b) and
any obligations (other than Assumed Liabilities) of Sellers in any
manner whatsoever connected with such Contracts, including, without
limitation, any obligations relating to surety bonds;
Rejected Contracts Receivables: all Accounts Receivable related
to Rejected Contracts;
Reportable Event: as defined in ERISA Sec. 4043;
Retirement Plans: The Stone & Webster Pension Plan, Fourth
Replacement Definitive Deed, dated 22 December 1999 (to which Stone &
Webster Engineering Limited is the Principal Employer) and the
Employee Retirement Plan of Stone & Webster Canada Limited;
Sale Motion: the motion or motions, in form and substance
reasonably acceptable to Buyer, filed by Sellers, pursuant to the
provisions of Sections 363 and 365 of the Bankruptcy Code, in the
Bankruptcy Cases, among other things, to obtain the Sale Order,
approve the Transaction and authorize the assumption and assignment of
the Assumed Contracts to Buyer;
Sale Order: the Order of the Bankruptcy Court, dated July 13,
2000, which, among other things, granted the Sale Motion, approved,
authorized and directed Sellers to assume this Agreement and
consummate the Transaction and otherwise contained the provisions
described in Section 5.17(a);
SEC: the Securities and Exchange Commission;
Sections: sections of the Agreement, unless the context indicates
otherwise;
Securities Act: the Securities Act of 1933, as amended;
Sellers: as defined in the Preamble;
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Sellers' Indemnified Persons: Sellers and any of Sellers'
members, Affiliates, successors and assigns, and their respective
shareholders, members, directors, trustees, officers, employees,
agents and representatives;
Share Consideration: as defined in Section 2.05(a);
Special Project Claims: any and all claims under the project
agreements set forth on Schedule 2.02(e) to the extent not reflected
on the March 31 Balance Sheet;
SWEC: as defined in Section 2.01(b);
Subsidiaries: as to any Person, a corporation, partnership,
limited liability company or other entity of which 50% or more of the
voting power of the outstanding voting equity securities or 50% or
more of the outstanding economic equity interest is held or
controlled, directly or indirectly, by such Person;
Tax: any income, unrelated business income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation,
privilege, premium, windfall profits, environmental (including taxes
under Code Section 59A), customs duties, capital stock, franchise,
profits, withholding, social security, unemployment, disability, real
property, personal property, stamp, sales, use, transfer,
registration, unclaimed property, value added, alternative or add-on
minimum, estimated or other tax, assessment, charge, levy or fee of
any kind whatsoever, including payments or services in lieu of Taxes,
interest or penalties on and additions to all of the foregoing, which
are due or alleged to be due to any Governmental Authority, whether
disputed or not;
Tax Return: any return, declaration, report, claim for refund,
information return or statement, including schedules and attachments
thereto and amendments, relating to Taxes;
Third Party Claim: as defined in Section 9.05(a)(i);
Time & Material Agreement: the Time & Material Agreement by and
among Buyer and Sellers dated as of the date hereof;
TPPI Contract: as defined in Section 2.01(b);
TPPI Equipment: as defined in Section 2.01(b);
Transaction: the sale and purchase of the Assets contemplated in
this Agreement, together with any and all related transactions
designed to implement, facilitate or expedite such sale and purchase
of the Assets;
Unaudited Financial Statements: the unaudited consolidated
balance sheet of S & W as of March 31, 2000, and the unaudited
consolidated statement of operations and unaudited consolidated
statement of cash flows for the three month period then ended, together
with the notes thereto, as reflected in S & W's quarterly report on
Form 10-Q for
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the quarter ended March 31, 2000 filed with the SEC, a copy of which
is attached to this Agreement as Schedule 3.06; and
WARN Act: the Worker's Adjustment and Retraining Notification
Act, 29 U.S.C. Sections 2101-2109.
1.02. Certain References. As used in this Agreement, and unless
the context requires otherwise:
(a) references to "include" or "including" mean including without
limitation;
(b) references to "partners" include general and limited partners
of partnerships and members of limited liability companies;
(c) references to "partnerships" include general and limited
partnerships, joint ventures and limited liability companies;
(d) references to "hereof", "herein" and derivative or similar
words refer to this Agreement;
(e) references to any document are references to that document as
amended, consolidated, supplemented, novated or replaced by the
parties thereto from time to time;
(f) references to any law are references to that law as amended,
consolidated, supplemented or replaced from time to time and all rules
and regulations promulgated thereunder;
(g) references to time are references to Wilmington, Delaware
time;
(h) the gender of all words includes the masculine, feminine and
neuter, and the number of all words includes the singular and plural;
and
(i) the Table of Contents, the divisions of this Agreement into
articles, sections and subsections and the use of captions and
headings in connection therewith are solely for convenience and shall
have no legal effect in construing the provisions of this Agreement.
2. SALE OF ASSETS AND RELATED MATTERS
2.01. Sale of Assets. Subject to the terms and conditions of this
Agreement, at Closing Sellers shall sell, assign, convey, transfer and deliver
to Buyer, or cause to be sold, assigned, conveyed, transferred and delivered to
Buyer, and Buyer shall purchase from Sellers, the Assets, free and clear of all
Encumbrances other than the Permitted Real Property Encumbrances, including the
following:
(a) the Real Property;
(b) all equipment, vehicles, furniture and furnishings and other
tangible personal property of Sellers, including all of the equipment purchased
by Stone & Webster Engineering
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Corporation ("SWEC"), a wholly-owned indirect Subsidiary of S & W, and certain
other Subsidiaries and Affiliates of S & W, pursuant to and under the
Engineering, Procurement and Construction Contract (the "TPPI Contract") dated
January 24, 1997 between P.T. Trans-Pacific Petrochemical Indotama and a
consortium consisting of AEC International Projects, Inc., Projects Engineers
Incorporated, SWEC and JGC Corporation (collectively, the "TPPI Equipment"), a
list of which equipment has been provided to or made available to Buyer;
(c) all usable supplies and inventory of Sellers;
(d) all financial, project-related, personnel and other records of the
Business (including equipment records, project plans, documents, catalogs,
books, records, files and operating manuals);
(e) all interests of Sellers in the Assumed Contracts;
(f) all Permits and other approvals (including pending approvals) of
Governmental Authorities relating to the ownership, development and operations
of the Business and the Assets, including the Permits described on Schedule
2.01(f), to the extent transferable or assignable under applicable Legal
Requirements;
(g) all interests of Sellers in and to all Intellectual Properties used
in connection with, or derived from or arising out of, the ownership and
operation of the Business and all computer software, programs and similar
systems owned or licensed by any Seller for use at or in connection with the
Business, including those set forth on Schedule 2.01(g);
(h) all interests of Sellers in all property, real, personal or mixed,
tangible or intangible, arising or acquired between the Effective Date and the
Closing Date;
(i) the Investments described on Schedule 2.01(i);
(j) general intangibles of the Business, including goodwill;
(k) any and all claims and causes of action, including privileges
related thereto, of any Seller against third parties relating to (i) the value,
condition or title to the Assets, manufacturer's or vendor's warranties with
respect to the Assets or product liability claims related to the Assets, whether
choate or inchoate, known or unknown, contingent or otherwise, (ii) the Assumed
Liabilities or the Assumed Contracts or (iii) the Project Rejected Contracts, to
the extent of any payments made by Buyer pursuant to letters of credit
outstanding with respect to Project Rejected Contracts which payments are not
reimbursed from the Indemnity Deposit or otherwise repaid to Buyer by Sellers;
(l) all corporate office furniture and equipment, data center hardware
and equipment, residential real property and other assets of Sellers wherever
located;
(m) all Accounts Receivable (other than Completed Contracts Receivables
and Rejected Contracts Receivables);
(n) all Cash (other than the Cash Consideration);
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(o) subject to the Sale Order, all of Sellers' right, title and
interest in the Cold Storage Business;
(p) all security or other deposits relating to, without limitation, the
Real Property and any equipment owned or leased by any Seller;
(q) any prepaid expenses other than those related to Excluded Assets;
(r) the Retirement Plans;
(s) subject to the Sale Order, all of Sellers' right, title and
interest in the Process Business; and
(t) all proceeds of the foregoing and all other property of Sellers of
every kind, character or description, tangible and intangible, known or unknown,
wherever located and whether or not reflected on the Financial Statements or
similar to the properties described above.
2.02. Excluded Assets. Notwithstanding the generality of Section 2.01,
the following assets are not a part of the sale and purchase contemplated by
this Agreement and are excluded from the Assets (the "Excluded Assets"):
(a) the Rejected Contracts, all Rejected Contracts Receivables, cash in
the project bank accounts relating to Rejected Contracts or Completed Contracts
(not to exceed $50,000 per Rejected Contract or Completed Contract) and drawings
related to, and equipment specifically purchased pursuant to the requirements
of, the Rejected Contracts;
(b) the Completed Contracts and all Completed Contracts Receivables and
drawings related to the Completed Contracts;
(c) inventory and supplies disposed of or exhausted prior to the
Closing Date in the ordinary course of Sellers' Business and Assets transferred
or disposed of in accordance with Section 5.03(e);
(d) those other assets of Sellers set forth on Schedule 2.02(d);
(e) the Special Project Claims and any avoidance claims available to
Sellers under Chapter 5 of the Bankruptcy Code and all claims relating to
Excluded Liabilities;
(f) the Share Consideration;
(g) the Cash Consideration;
(h) the Excluded Subsidiary Stock;
(i) items characterized as "deferred income taxes" on the March 31
Balance Sheet and the Closing Balance Sheet;
(j) the ESOP and the ESOP Note; and
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(k) any other assets excluded by mutual written agreement of the
parties.
2.03. Assumed Liabilities. As of the Closing Date, Buyer shall assume
the Assumed Liabilities.
2.04. Excluded Liabilities. Under no circumstance shall Buyer assume or
be obligated to pay, and none of the Assets shall be or become liable for or
subject to, any of the Excluded Liabilities, including the following
liabilities, which shall be and remain liabilities of Sellers:
(a) liabilities accrued on the Closing Balance Sheet other than the
Assumed Liabilities;
(b) liabilities or obligations for items characterized as deferred
income taxes on the March 31 Balance Sheet and the Closing Balance Sheet or
Taxes resulting from the consummation of the Transaction;
(c) liabilities or obligations associated with any Excluded Assets;
(d) liabilities or obligations associated with any and all indebtedness
of Seller for borrowed money not included in the Assumed Liabilities;
(e) liabilities or obligations under the Assumed Contracts that are not
Assumed Liabilities and liabilities or obligations arising under the Rejected
Contracts or the Completed Contracts;
(f) liabilities or obligations arising out of or in connection with
claims, litigation and proceedings (whether instituted prior to or after
Closing) for acts or omissions which occurred, or arise from events that
occurred, prior to the Closing Date, including such liabilities or obligations
as are reflected on the March 31 Balance Sheet and will be reflected on the
Closing Balance Sheet;
(g) liabilities or obligations (i) to Sellers' employees (other than
under the Employee Agreements), (ii) with respect to the Employee Benefit Plans
and Other Plans, (iii) of Sellers to the Internal Revenue Service, PBGC or any
other Governmental Authority relating to Sellers' employees, in each case
arising from or relating to periods prior to Closing (whether or not triggered
by the Transaction or the announcement thereof) except to the extent reflected
on the Closing Balance Sheet;
(h) liabilities or obligations related to the ESOP, including, without
limitation, those liabilities and obligations reflected on the Closing Balance
Sheet;
(i) penalties, fines, settlements, interest, costs and expenses arising
out of or incurred as a result of any actual or alleged violation by any of
Sellers of any Legal Requirement;
(j) liabilities or obligations under the WARN Act, if any, arising out
of or resulting from layoffs of employees by Sellers prior to Closing and/or the
consummation of the Transaction sufficient in the aggregate to require notice
under the WARN Act, but not those that may arise from any layoffs of Hired
Employees by Buyer after the Closing;
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(k) liabilities related to any debtor in possession financing under
Section 364(b), (c) or (d) of the Bankruptcy Code;
(l) all liabilities of Sellers for expenses (i) of the negotiation and
preparation of this Agreement, (ii) relating to the Transaction, (iii) of the
filing and administration of the Bankruptcy Cases, in each case to the extent
incurred by Sellers or any of them and including those related to legal counsel,
accounting, brokerage and investment advisors fees and disbursements and (iv)
any pending shareholder claim, litigation or proceeding; and
(m) any amounts paid by or on behalf of Sellers to Jacobs, including,
without limitation, any amounts paid by or on behalf of Sellers pursuant to the
Jacobs Asset Purchase Agreement (including the Break-Up Fee (as defined therein)
and the Expense Reimbursement (as defined therein)), the Jacobs Credit Agreement
or the Jacobs DIP Agreement.
2.05. Equity Purchase Price; Indemnity Deposit, LC Deposit and
Litigation Deposit; Delivery of Consideration; Equity Purchase Price
Adjustments; Allocation of Equity Purchase Price.
(a) Equity Purchase Price; Aggregate Consideration. Subject to the
terms and conditions hereof, in reliance upon the representations and warranties
of S & W and the covenants of Sellers herein set forth, and as consideration for
the sale and purchase of the Assets, at Closing, Buyer shall assume the Assumed
Liabilities and shall tender to Sellers as the purchase price for the Assets,
subject to the provisions of Section 2.05(b) and adjustment as provided in
Section 2.05(c), cash and Common Stock having an aggregate value of One Hundred
Forty-Three Million Four Hundred Thousand Dollars ($143,400,000) (the aggregate
Cash Consideration and Share Consideration being referred to collectively as the
"Equity Purchase Price") as follows: (i) cash (the "Cash Consideration") in the
amount of Thirty-Seven Million Six Hundred Thousand Dollars ($37,600,000) and
(ii) shares of Common Stock (the "Share Consideration") having a market value of
One Hundred Five Million Eight Hundred Thousand Dollars ($105,800,000), based on
the average closing price on the New York Stock Exchange of a share of Common
Stock for the ten trading days ending on the trading day immediately preceding
the Closing Date (the "Average Price"); provided, however, that if the Average
Price would be greater than Fifty-Five Dollars ($55.00) per share, then the
Average Price shall be deemed to be Fifty-Five Dollars ($55.00) per share for
purposes of calculating the number of shares of Common Stock to be delivered as
the Share Consideration portion of the Equity Purchase Price. The Parties agree
that the aggregate consideration to be paid by Buyer to Sellers in connection
with the Transaction (the "Aggregate Consideration") comprises (A) the Assumed
Liabilities, (B) the Cash Consideration and (C) the Share Consideration.
(b) Indemnity Deposit, LC Deposit and Litigation Deposit; Delivery of
Consideration. The Indemnity Deposit (which shall constitute a part of and be
withheld from the Share Consideration otherwise payable to Sellers) and the LC
Deposit (which shall constitute a part of and be withheld from the Share
Consideration otherwise payable to Sellers) shall be delivered by Buyer to the
Escrow Agent as provided in Section 8.03(b) and shall be held and disbursed by
the Escrow Agent in accordance with the terms and conditions of the Indemnity
Escrow Agreement. The Litigation Deposit (which shall be deducted from and
reduce the amount of Cash Consideration otherwise payable to Sellers) shall be
delivered by Buyer to an
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account under the control of the Massachusetts Court as provided in Section
8.03(c) and shall be held and disbursed by the Massachusetts Court. The Cash
Consideration (less the Litigation Deposit) shall be paid at the Closing by wire
transfer of immediately available funds to an account or accounts designated by
Sellers in writing (and, to the extent applicable, the Litigation Deposit shall
be transferred by wire transfer to the account designated by the Massachusetts
Court), and the Parties shall execute such receipts or other acknowledgments as
are reasonably necessary to evidence payment and receipt of the Cash
Consideration. The Share Consideration, less the Indemnity Deposit and the LC
Deposit, shall be paid at the Closing by the issuance of shares of Common Stock
to Sellers and the delivery to Sellers at the Closing of one or more stock
certificates in the name of Sellers or their designees representing the Common
Stock comprising the Share Consideration issued pursuant to this Agreement.
(c) Equity Purchase Price Adjustments.
(i) Within 60 days after the Closing Date, S & W shall prepare and
deliver to Buyer the Closing Balance Sheet together with the report of
PricewaterhouseCoopers LLP thereon. The Closing Balance Sheet will be prepared
in accordance with GAAP applied on a basis consistent with the presentation of
the March 31 Balance Sheet except with respect to the classification of the TPPI
Equipment and except for using estimated costs of completion, change order
recoveries and claim recoveries with respect to Rejected Contracts and Completed
Contracts and liability estimates with respect to matters set forth in Section
2.04(f) as of March 31, 2000 without further revisions. Buyer shall cause the
Hired Employees to assist Seller in connection with the preparation of the
Closing Balance Sheet. The Closing Balance Sheet shall be accompanied by an
additional schedule of information (the "Purchase Price Adjustment Schedule")
which shall contain (x) a detailed list of the assets of Sellers related to the
Rejected Contracts and Completed Contracts and the liabilities of Sellers
related to the Rejected Contracts, the Completed Contracts and the Excluded
Liabilities (other than the liabilities for items characterized as deferred
income taxes on the March 31 Balance Sheet and the Closing Balance Sheet,
liabilities and obligations related to the ESOP, Taxes resulting from the
consummation of the Transaction and those items referenced in Section 2.04(k)
and Section 2.04(l) and any liabilities relating to the TPPI Contract), in each
case that are included in the Closing Balance Sheet and (y) a calculation
showing the sum of such assets (the "Adjustment Assets") and the sum of such
liabilities (the "Adjustment Liabilities") and the difference resulting from the
Adjustment Assets less the Adjustment Liabilities (the "Adjustment Amount");
provided, however, any adjustments included in the Adjustment Amount as the
result of the write off or write down of accounts receivable related to Rejected
Contracts or Completed Contracts shall not exceed $2,000,000 in the aggregate.
(ii) If Buyer disagrees with the preparation of the Closing
Balance Sheet or the Purchase Price Adjustment Schedule, Buyer shall notify S &
W in writing of such disagreement within 30 days after delivery of the Closing
Balance Sheet and the Purchase Price Adjustment Schedule, which notice shall
describe the nature of any such disagreement and provide reasonable supporting
documentation for each such disagreement. During the 30 day period of its
review, Buyer shall have reasonable access to any documents, schedules or work
papers used in the preparation of the Closing Balance Sheet and the Purchase
Price Adjustment Schedule.
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(iii) Buyer and S & W agree to negotiate in good faith to resolve
any such disagreement regarding the preparation of the Closing Balance Sheet or
the Purchase Price Adjustment Schedule, and any resolution of such disagreement
agreed to in writing by Buyer and S & W shall be final and binding upon the
parties. If Buyer and S & W are unable to resolve all disagreements identified
by Buyer pursuant to Section 2.05(c)(ii) within 30 days after delivery to Seller
of written notice of such disagreement by Buyer, then the disputed matters shall
be referred for final determination to Deloitte & Touche LLP. If Deloitte &
Touche LLP is unable to serve, Buyer and S & W shall jointly select an arbiter
from one of the "Big 5" accounting firms that is not the independent auditor for
either Buyer or S & W; provided, however, that if Buyer and S & W are unable to
select such an arbiter within such time period, the American Arbitration
Association shall make such selection (Deloitte & Touche LLP or any other person
so selected shall be referred to herein as the "Accounting Arbitrator".) The
Accounting Arbitrator will only consider those items and amounts as to which
Buyer and S & W have disagreed within the time periods and on the terms
specified above and must resolve the matter in accordance with the terms and
provisions of this Agreement. The Accounting Arbitrator shall select as a
resolution the position of either Buyer or S & W for each item of disagreement
(based solely on presentations and supporting material provided by the parties
and not pursuant to any independent review) and may not impose an alternative
resolution. The Accounting Arbitrator shall deliver to Buyer and S & W, as
promptly as practicable and in any event within 45 days after its appointment, a
written report setting forth the resolution of any such disagreement determined
in accordance with the terms of this Agreement. Such report shall be final and
binding upon the parties to the fullest extent permitted by applicable law. The
fees, expenses and costs of the Accounting Arbitrator shall be borne one-half by
Buyer and one-half by S & W.
(iv) If the Adjustment Amount, as finally determined after the
procedures set forth in this Section 2.05(c), is a positive number the Equity
Purchase Price shall be decreased dollar for dollar by the Adjustment Amount,
and if the Adjustment Amount is a negative number, the Equity Purchase Price
shall be increased dollar for dollar by the Adjustment Amount (expressed as a
positive number). If the Equity Purchase Price is decreased as a result of the
purchase price adjustment, S & W shall pay to Buyer the amount of such decrease,
and if the Equity Purchase Price is increased as a result of such adjustment,
the Buyer shall pay to S & W the amount of such increase, in each case, by
delivery within 5 days of such determination shares of Common Stock calculated
on the basis of the Average Price; provided, however, that Buyer may, at its
election and in its sole discretion, pay Sellers all or any portion of any
increased Equity Purchase Price pursuant to this Section 2.05(c)(iv) in cash in
lieu of delivering some or all of any shares of Common Stock to be delivered
pursuant to this Section 2.05(c)(iv).
(d) Allocation of Equity Purchase Price. Buyer and Sellers agree that a
portion of the Equity Purchase Price shall be allocated and delivered to any
Foreign Seller as required by applicable Legal Requirements for the reasonable
protection of the Buyer or the Sellers, as the case may be.
2.06. Registration Rights. Sellers shall be given registration rights
with respect to the Common Stock comprising the Share Consideration, subject to
the terms and conditions of the Registration Rights Agreement by and among Buyer
and those Sellers who will hold Common Stock comprising the Share Consideration.
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2.07. Addition of Sellers; Schedules. S & W agrees that it will cause
this Agreement to be amended to add as Sellers hereunder any of its Subsidiaries
that have any right, title or interest in or to any of the Assets. S & W and
Buyer agree that any references herein to Sellers shall mean and include S & W
and all such Subsidiaries, and the representations and warranties of S & W in
this Agreement shall be made with respect to all Sellers as if all Sellers had
been Parties to this Agreement on the date hereof. The Schedules referred to in
this Agreement shall be delivered concurrently with the execution of this
Agreement. Such Schedules may be amended to reflect any changes required as a
result of the addition of applicable Subsidiaries as additional Sellers
hereunder. Buyer shall have two business days from the delivery of amended
Schedules to accept or reject the same.
3. REPRESENTATIONS AND WARRANTIES OF S & W
S & W hereby represents and warrants to Buyer as follows:
3.01. Organization. Each Seller is duly organized, validly existing
and, to the extent applicable in the case of Foreign Sellers, in good standing
under the laws of its jurisdiction of organization or incorporation, as the case
may be. Each Seller is licensed, registered, qualified or admitted to do
business in each jurisdiction in which the ownership, use or leasing of any of
such Seller's assets or properties (including the Assets), or the conduct or
nature of the Business, makes such licensing, registration, qualification or
admission necessary, except where such failure would not have a Material Adverse
Effect.
3.02. Powers; Consents; Absence of Conflicts, Etc. Subject to approval
of this Agreement by the Bankruptcy Court, each Seller has the requisite power
and authority to conduct its businesses as now being conducted, to enter into
this Agreement and to perform its respective obligations hereunder, and the
execution, delivery and performance by each Seller of this Agreement and the
consummation of the Transaction:
(a) are within such Seller's corporate powers, are not in contravention
of the terms of its articles or certificate of incorporation or other
organizational documents, as amended to date, or its bylaws and other governing
documents, as amended to date, and have been duly authorized by all appropriate
corporate, partnership, shareholder and partner action, as the case may be;
(b) except as otherwise expressly provided in this Agreement or as set
forth on Schedule 3.02(b), do not require any approval or consent of, or filing
with, any Governmental Authority;
(c) except as set forth on Schedule 3.02(c) or as excused by the
Bankruptcy Court, do not conflict with, or result in any breach or contravention
of, any Assumed Contract to which any Seller is a party or by which it is bound;
and
(d) do not violate any Legal Requirement to which any Seller or the
Assets may be subject;
except, in the case of the foregoing clauses (b), (c) and (d), for such
conflicts or violations as to which requisite waivers or consents have been
obtained or which would not have a Material Adverse Effect.
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3.03. Binding Agreement. This Agreement and all instruments and
agreements hereunder to which each Seller is or becomes a party are (or upon
execution will be) valid and legally binding obligations of each such Seller,
enforceable against each Seller in accordance with the respective terms hereof
or thereof, except as enforceability may be subject to general principles of
equity and enforceability may be restricted, limited or delayed by applicable
bankruptcy or other laws effecting creditors' rights generally.
3.04. Subsidiaries, Investments and Third Party Rights. After the
Closing, no Seller will conduct any business that competes with the Business and
no Seller will own or hold any interests in any Persons that conduct any
business that competes with the Business, except and solely to the extent
necessary to fulfill the obligations of any Seller under any Contracts other
than the Assumed Contracts. Except as set forth on Schedule 2.01(i), no Seller
holds any Investments that are not reflected as assets on the March 31 Balance
Sheet. Except as set forth on Schedule 3.04, there are no agreements with, or
options, commitments or rights in favor of, any Person to directly or indirectly
acquire any of the Assets, or any interest therein.
3.05. Legal and Regulatory Compliance. Except as set forth on Schedule
3.05, each Seller is in compliance with all Legal Requirements, and has timely
filed all reports, data and other information required to be filed with
Governmental Authorities, except where a failure to be in compliance or file
timely would not have a Material Adverse Effect.
3.06. Financial Statements. Attached as Schedule 3.06 are copies of the
Audited Financial Statements, the Unaudited Financial Statements, the Interim
Financial Statements and the interim financial statements as of June 30, 2000 of
the Foreign Subsidiaries. Except as disclosed on Schedule 3.08, the Financial
Statements are true, complete and accurate in all material respects and fairly
present the financial condition and results of operations of S & W as of the
respective dates thereof and for the periods therein referred to, all in
accordance with generally accepted accounting principles ("GAAP"), subject in
the case of the Unaudited Financial Statements and Interim Financial Statements
to normal recurring quarterly and year-end adjustments (the effect of which will
not, individually or in the aggregate, be materially adverse) and the absence of
notes (which, if presented, would not differ materially from those included in
the Audited Financial Statements); and the Financial Statements reflect the
consistent application of such accounting principles throughout the periods
involved.
3.07. Undisclosed Liabilities. Schedule 3.07 contains an accurate
description, to the Knowledge of Sellers, of all material liabilities of Sellers
not included in the Audited Financial Statements or the Unaudited Financial
Statements of any nature relating to the Assets or the Business, whether
accrued, absolute, contingent or otherwise, together with, in the case of those
liabilities which are not fixed in amount, a reasonable estimate of the maximum
amount which may be payable in respect thereof.
3.08. Recent Activities. Except as set forth on Schedule 3.08:
(a) Since April 30, 2000, and except for the announcement of the
Transaction, the filing of the Bankruptcy Cases and disruptions arising
therefrom, no event has occurred which has had a Material Adverse Effect.
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(b) Since December 31, 1999:
(i) to the Knowledge of Sellers, no material damage,
destruction or loss (whether or not covered by insurance) has occurred
affecting the Assets;
(ii) no Seller has increased or agreed to increase the
compensation payable to any of its employees or agents or made or
agreed to make any bonus or severance payment to any of its employees
or agents except in the ordinary course of the Business and consistent
with past practice, and no Seller has employed any additional
management personnel except in the ordinary course of the Business and
consistent with past practice;
(iii) no labor dispute, enactment of state or local law,
promulgation of state or local regulation, or other event or condition
has occurred which has had a Material Adverse Effect;
(iv) no Seller has sold, assigned, transferred, distributed or
otherwise disposed of any of the Assets, except in the ordinary course
of the Business;
(v) no Seller has canceled or waived any rights in respect of
the Assets, except in the ordinary course of the Business;
(vi) there has been no change in any accounting method, policy
or practice of any Seller, except as required by announcements of the
Financial Accounting Standards Board or as disclosed in S & W's Form
10-Q for the quarter ended March 31, 2000;
(vii) there has been no change in the manner in which any
Employee Benefit Plan and any assets or liabilities related thereto has
been administered; and
(viii) to the Knowledge of Sellers, no Seller has received
from any Governmental Authority notice that it is in material violation
of any Legal Requirement.
3.09. Subsidiaries and Affiliates; Assets. Each direct and indirect
Subsidiary and Affiliate of S & W that owns or has any interest in the Assets is
set forth on Schedule 3.09. Except as set forth on Schedule 3.09, no Person that
is not a Seller owns, holds title to or has any other direct, indirect or
beneficial interest in any of the Assets.
3.10. Equipment. All equipment that is material to the conduct of the
Business, whether reflected in the Financial Statements or otherwise, is well
maintained and in good operating condition, except for reasonable wear and tear.
All leased equipment that is material to the conduct of the Business is
maintained in all material respects (either by Sellers, the manufacturer or
lessor, as the case may be) in accordance with manufacturer and lessor
requirements.
3.11. Title to Personal Property. Except as described on Schedule 3.11,
Sellers own and hold good and valid title or leasehold title, as the case may
be, to all the Assets, other than the Real Property, free and clear of any
Encumbrances. At Closing Sellers will convey to Buyer good and valid title to
all the Assets, other than the Real Property, free and clear of any material
Encumbrances.
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3.12. Real Property.
(a) Sellers own or hold fee simple or leasehold title, as the case may
be, to the Real Property together with all buildings, improvements and fixtures
thereon and all appurtenances and rights thereto, free and clear of any
Encumbrances other than the Real Property Encumbrances.
(b) At the Closing, Sellers will convey to Buyer good and marketable
fee simple or leasehold title, as the case may be, to all Real Property, free
and clear of any Encumbrances other than the Permitted Real Property
Encumbrances.
(c) The Real Property comprises all of the real property owned or
leased by Sellers which is associated with or employed in the operation of the
Business.
(d) The buildings and other improvements constructed on the Real
Property and material to the conduct of the Business are in a state of good
condition and repair, in all material respects, and are in need of no
maintenance or repairs except for ordinary, routine maintenance.
(e) There are no pending or, to the Knowledge of Sellers, threatened
condemnation or similar proceedings or special assessments relating to the Real
Property or any part thereof.
(f) To the Knowledge of Sellers, no part of the Real Property contains,
is located within or abuts any flood plain, navigable water or other body of
water, tideland, wetland, marshland or any other area which is subject to
special State, federal or municipal regulation, control or protection.
(g) Sellers have received all required material approvals of
Governmental Authorities (including, without limitation, Permits and material
certificates of occupancy or other such certificates permitting lawful occupancy
of the Real Property) required in connection with the use of the Real Property
and all improvements thereon.
3.13. Environmental Matters.
(a) To the Knowledge of Sellers, the Business is, and since January 1,
1995 has been, in material compliance with all applicable Environmental Laws.
(b) Except as set forth on Schedule 3.13(b), no Seller has received any
written Environmental Claim nor, to the Knowledge of Sellers, is there any basis
for any Environmental Claim (including, without limitation, knowledge of any
actions, activities, circumstances, conditions, events or incidents, including
the release, emission, discharge or disposal of any Materials of Environmental
Concern, whether relating to the Assets or the Business or otherwise).
(c) Except as set forth on Schedule 3.13(c), to the Knowledge of
Sellers, there is no existing contamination by, and there has not been any
material release of, any Materials of Environmental Concern on, at, under or
around any of the Assets or on or in connection with the Business.
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(d) To the Knowledge of Sellers, true, complete and correct copies of
the written reports, and all parts thereof, of all environmental audits or
assessments which have been conducted with respect to any Seller or the
Business, either by any Seller or any environmental consultant or engineer
engaged for such purpose, have been made available to Buyer, and a list of all
such reports, audits and assessments and any other similar report, audit or
assessment is included on Schedule 3.13(d). To the Knowledge of Sellers, Sellers
have provided Buyer with true, complete and correct copies of all environmental
audits and assessments in the possession of Sellers relating to any of the
Assets or any Pre-Closing Environmental Matter.
(e) Each Seller has all material Permits required under applicable
Environmental Laws to own or lease its properties and to conduct the Business
thereon. All Permits currently held by Sellers pursuant to the Environmental
Laws are identified on Schedule 2.01(f).
(f) Without in any way limiting the generality of the foregoing, except
as set forth on Schedule 3.13(f), (i) all Materials of Environmental Concern are
handled and disposed of in material compliance with all applicable Environmental
Laws, (ii) to the Knowledge of Sellers, all underground storage tanks located on
the Real Property, and the capacity and contents of such tanks, are identified
on Schedule 3.13(f), (iii) to the Knowledge of Sellers, there is no exposed
friable asbestos contained in or forming part of any building, building
component, structure or office space owned or leased by Sellers and used in the
conduct of the Business, and (iv) no polychlorinated biphenyls are used or
stored at any Real Property owned or leased by Sellers.
(g) Notwithstanding the foregoing, the representations and warranties
in this Section 3.13 shall be deemed to be made without the benefit of any
knowledge or materiality qualifiers with respect to the matters applicable to
the Cold Storage Business and with respect to matters involving any handling,
storage or release of nuclear materials that constitute Materials of
Environmental Concern.
3.14. Intellectual Properties, Computer Software, etc. Except as
described on Schedule 3.14 and except for customary licensing fees payable under
the Contracts, Sellers have the right to use, free and clear of any royalty or
other payment obligations, claims of infringement against Intellectual
Properties or computer software, programs or similar systems owned by any Seller
or any liens, (a) all Intellectual Properties used or needed by Sellers in the
conduct of the Business, and (b) all computer software, programs and similar
systems owned by or licensed under Contracts to any Seller and used in the
conduct of the Business, and no Seller is in violation or infringement of, nor
has any Seller received any notice alleging any conflict with or violation or
infringement of, any rights of any other Person with respect to any such
Intellectual Properties or computer software, programs or similar systems.
Except as set forth on Schedule 3.14 and except for customary licensing fees
payable under the Contracts, subsequent to the Closing and without further
action or the payment of additional fees, royalties or other compensation to any
Person, Buyer will be entitled to unrestricted use of all Intellectual
Properties, computer software, programs and similar systems as currently used in
the Business.
3.15. Insurance. Schedule 3.15 describes all insurance arrangements,
including self-insurance, in place for the benefit of the Assets and the conduct
of the Business. True and correct copies of all such policies and any
endorsements thereto have been made available to Buyer.
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3.16. Permits and Licenses. Schedule 2.01(f) contains a complete and
accurate list and summary description of all material Permits and franchises
(including applications therefor) owned or held by Sellers relating to the
ownership, development or operations of the Business or the Assets, all of which
are in good standing and not subject to challenge. Each Seller is, with respect
to the Business, duly licensed by the appropriate Governmental Authorities,
except where the failure to be so licensed would result in liabilities of less
than Five Hundred Thousand Dollars ($500,000) in the aggregate. Each Seller is,
and the Business is and has at all time been conducted, in compliance with any
and all applicable licensing requirements, except where the failure to be so
licensed would result in liabilities of less than Five Hundred Thousand Dollars
($500,000) in the aggregate. There are no provisions in or agreements relating
to any such Permits or franchises (including applications therefor) which would
preclude or limit Buyer from operating the Business and using all Assets in
their current conditions and locations, except for such provisions relating to
the assignment or transfer of any Permit or franchise.
3.17. Agreements and Commitments.
(a) Schedule 3.17 is a true, complete and correct list of all Contracts
(other than Immaterial Contracts) conforming to the descriptions set forth in
this Section 3.17 to which any Seller is a party, copies of each of which have
been delivered or made available to Buyer:
(i) Contracts involving payments by or to any Seller in excess
of One Hundred Thousand Dollars ($100,000) not made in the ordinary
course of business;
(ii) any employee collective bargaining agreement or other
Contract with any labor union covering employees of any of the Sellers;
(iii) any Contract (including sales orders) involving the
obligation of any Seller to deliver products or services;
(iv) any option or other Contract to purchase or otherwise
acquire or sell or otherwise dispose of any interest in any real
property (including the Real Property);
(v) any Contract under which any Seller has agreed to
indemnify any third party with respect to, or to share, the Tax
liability of any third party;
(vi) any Contract to make a capital expenditure or to purchase
a capital asset in excess of Two Hundred Fifty Thousand Dollars
($250,000) by or on behalf of any Seller in connection with the Assets
or the operation of the Business other than capital expenditures
relating to assets which are to become part of a project;
(vii) any Contract relating to the location of employees or
minimum number of employees to be employed by any Seller with respect
to the Business;
(viii) any power of attorney (other than powers of attorney
given in the ordinary course of the Business with respect to routine
export, tax or securities matters);
(ix) any bond, indenture, note, loan or credit agreement
(other than the Jacobs Credit Agreement and the Jacobs DIP Agreement)
or other Contract relating to the
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borrowing of money or to the direct or indirect guarantee or assumption
of the obligations of any other Person for borrowed money;
(x) any Contract limiting or restricting in any material
manner the operation of the Business;
(xi) any lease or similar Contract under which (i) any Seller
is the lessee of, or holds or uses, any machinery, equipment, vehicle
or other tangible personal property or real property owned by any third
Person for an annual rent in excess of One Hundred Thousand Dollars
($100,000) or (ii) any Seller is the lessor of, or makes available for
use by any third Person, any tangible personal property or real
property owned by any Seller for an annual rent in excess of One
Hundred Thousand Dollars ($100,000), in each case, other than with
respect to machinery, equipment, vehicles or other tangible personal
property specifically for use in connection with a project;
(xii) except as set forth on Schedule 5.04, employment and
severance Contracts, including Contracts (i) to employ or terminate
executive officers or other personnel and other contracts with present
or former officers, directors or shareholders of any Seller or (ii)
that will or could result in the payment by or the creation of any
commitment or obligation (absolute or contingent) to pay on behalf of
Buyer or any Seller any severance, termination, "golden parachute," or
other similar payments to any present or former personnel following
termination of employment or otherwise as a result of the consummation
of the Transactions; and
(xiii) any joint venture or partnership Contracts.
(b) Sellers have made available to Buyer true, complete and correct
copies of any Contract (including purchase orders) involving the obligation of
any Seller to purchase products or services pursuant to which the aggregate of
payments to become due from such Seller is equal to or exceeds One Hundred
Thousand Dollars ($100,000).
3.18. The Contracts. Except (a) as otherwise set forth on Schedule
3.18, (b) as a result of Sellers' current financial condition, or (c) for events
of default that will arise or result from the filing of the Bankruptcy Cases:
(i) the Contracts constitute lawful, valid and legally binding
obligations of the Sellers who are parties thereto and are enforceable
against such Sellers in accordance with their terms;
(ii) each Contract is in full force and effect and constitutes
the entire agreement by and between the parties thereto;
(iii) in all material respects, all obligations required to be
performed under the Contracts by the Sellers who are parties thereto on
or prior to the date hereof have been performed, and no event has
occurred or failed to occur which constitutes, or with the giving of
notice, the lapse of time or both would constitute, a default by any
Seller under the Contracts;
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(iv) except for Government Contracts, no Contract prohibits or
requires the consent of any Person to the assignment to and assumption
by Buyer of the Contracts;
(v) no Contract will prohibit competition or restrict the
ability of Buyer to engage in any lawful business after Closing; and
(vi) the assignment of the Contracts to and assumption of such
Contracts by Buyer will not result in any penalty, premium or variation
of the rights, remedies, benefits or obligations of any party
thereunder.
3.19. Employees and Employee Relations.
(a) Sellers have made available to Buyer a complete list (as of the
date set forth therein) of names, positions, current annual salaries or wage
rates, and bonus and other compensation arrangements of all full-time and
part-time employees of each Seller (indicating in such list whether each
employee is part-time or full-time, whether such employee is employed under
written Contract, and, if such employee is not actively at work, the reason
therefor).
(b) There is no pending or, to the Knowledge of Sellers, threatened
employee strike, work stoppage or slowdown or labor dispute. Except as described
on Schedule 3.19(b), no employees of any Seller are represented by a labor union
or employee organization, and, to the Knowledge of Sellers, (i) no union or
employee organization has made a demand for recognition and (ii) no other union
organizing or collective bargaining activities by or with respect to any
employees of any Seller are taking place.
3.20. Employee Benefit Plans.
(a) Schedule 3.20(a) lists each Employee Benefit Plan and Other Plan
that any Seller or any member of the Controlled Group that includes any Seller
sponsors or maintains or has within the last five years sponsored or maintained
or to which it contributes (including employee elective deferrals) or has within
the last five years contributed or been required to contribute.
(b) Each Employee Benefit Plan (and related trust, insurance contract
or fund if the Employee Benefit Plan is funded through a trust or third party
funding vehicle) complies in form and in operation in all material respects with
applicable Legal Requirements, and has been administered and operated in all
material respects in accordance with all applicable Legal Requirements. Except
as set forth on Schedule 3.20(b), all required reports and descriptions required
to be filed with any Governmental Authority (including Form 5500 Annual Reports,
Summary Annual Reports, PBGC-1's and Summary Plan Descriptions) have been filed
or distributed appropriately with respect to each Employee Benefit Plan. Sellers
have delivered or made available to Buyer correct and complete copies of the
plan documents and summary plan descriptions, most recent determination letters
received from the Internal Revenue Service, most recent Form 5500 Annual Report,
and all related trust agreements, insurance contracts and other funding
agreements which implement each Employee Benefit Plan (and in the case of any
Employee Benefit Plan of any Foreign Seller, any comparable documents under the
applicable Legal Requirements of the appropriate Governmental Authorities).
Since January 1, 1995, no Employee Benefit Plan has been audited by any
Governmental Authority, no Seller has received any written notice that such an
audit will or may be conducted and no event has occurred since
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the date of such determination letter that would operate to jeopardize any
Employee Benefit Plan's qualification.
(c) Each Employee Pension Benefit Plan is in material compliance with
the requirements of a qualified plan under Code Sec. 401(a), and each qualified
plan has received a favorable determination letter from the Internal Revenue
Service that is current and valid and no event has occurred since the date of
such determination letter that would operate to jeopardize such Employee Pension
Benefit Plan's qualification. All contributions (including employer
contributions and employee salary reduction contributions) to each Employee
Pension Benefit Plan that are required to be paid have been paid, and all
Sellers' contributions in respect of periods ending the day prior to the Closing
Date will be accrued on the Closing Balance Sheet. The market value of all
assets under each Employee Pension Benefit Plan and the present value of all
vested and unvested liabilities thereunder have been determined and, with
respect to each such Employee Pension Benefit Plan, as of such date of
determination the vested and unvested liabilities thereunder were determined in
accordance with PBGC immediate and deferred factors and assumptions applicable
to an Employee Pension Benefit Plan terminating on the date for determination.
(d) All required premiums or other payments for all periods due on or
before the Closing Date have been or will have been paid with respect to each
Employee Welfare Benefit Plan.
(e) Except as set forth on Schedule 3.20(e), there have been no
Prohibited Transactions with respect to any Employee Benefit Plan that would
subject any Seller or any member of the Controlled Group that includes any
Seller to any material liability; no Seller has incurred or reasonably expects
to incur material excise tax liability under Chapter 43 and Chapter 47 under
Subtitle D of the Code; no ERISA Fiduciary has any material liability for breach
of fiduciary duty or any other failure to act or comply in connection with the
administration or investment of the assets of any Employee Benefit Plan; no
action, suit, proceeding, hearing or investigation with respect to the
administration or the investment of the assets of any Employee Benefit Plan
(other than routine claims for benefits) is pending or, to the Knowledge of
Sellers, threatened; and to the Knowledge of Sellers, there exists no basis for
any such action, suit, proceeding, hearing or investigation. No Party in
Interest has any interest in any assets of any Employee Benefit Pension Plan
other than as a beneficiary by virtue of such Person's participation in such
plan.
(f) Except as set forth on Schedule 3.20(f), no Employee Benefit Plan
which is an Employee Pension Benefit Plan has been completely or partially
terminated or the subject of a Reportable Event and no proceeding by the PBGC to
terminate any Employee Pension Benefit Plan has been instituted or threatened;
and no Seller has incurred any material liability to the PBGC (other than PBGC
premium payments) or otherwise under Title IV of ERISA (including any withdrawal
liability) or under the Code with respect to any Employee Pension Benefit Plan.
(g) Except as set forth on Schedule 3.20(g), no Seller, and no member
of the Controlled Group that includes any Seller, contributes to, ever has
contributed to, or ever has been required to contribute to any Multiple Employer
Plan or any Multiemployer Plan or has any liability (including withdrawal
liability) under any Multiple Employer Plan or any
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Multiemployer Plan. Except as set forth on Schedule 3.20(g), no Seller, and no
member of the Controlled Group that includes any Seller, maintains or
contributes, ever has maintained or contributed, or ever has been required to
maintain or contribute to any Employee Welfare Benefit Plan providing medical,
health or life insurance or other welfare-type benefits for current or future
retired or terminated employees, their spouses or their dependents (other than
in accordance with Code Section 4980B).
(h) Each Seller has complied in all material respects with the
requirements of Code Sections 4980B, 9801, 9802, 9811 and 9812.
3.21. Litigation and Proceedings. Except as set forth on Schedule 3.21,
(i) there are no claims, actions, suits, litigation, arbitration, mediations,
investigations or other proceedings (including qui tam actions) pending,
affecting or to the Knowledge of Sellers threatened against any Seller which
might have a Material Adverse Effect on the Business or the Assets, and (ii) to
the Knowledge of Sellers, there exist no facts that might form the basis of any
such claim, action, suit, litigation, arbitration, mediation, investigation or
other proceeding.
3.22. Taxes.
(a) Sellers have filed all Tax Returns required to be filed by or on
behalf of any of them, all such Tax Returns are correct and complete in all
material respects, and Sellers have duly paid or made provision in the Audited
Financial Statements for the payment of all Taxes; and as of Closing there will
be no Encumbrances on any Assets that arose in connection with any failure (or
alleged failure) to pay any Tax.
(b) Except as described on Schedule 3.22, each Seller has withheld
proper and accurate amounts from its employees' compensation in full and
complete compliance with all withholding and similar provisions of the Code and
any and all other applicable Legal Requirements, and has withheld and paid, or
caused to be withheld and paid, all Taxes on monies paid by Sellers to
independent contractors, creditors and other Persons for which withholding or
payment is required by law.
(c) Except as set forth on Schedule 3.22, no taxing authority has
advised any Seller that it intends to assess any additional Taxes for any period
for which Tax Returns have been filed. Except as set forth on Schedule 3.22,
there is no dispute or claim concerning any Tax liability of Sellers either
claimed or raised by any Governmental Authority in writing, or as to which any
Seller has notice or knowledge.
(d) Except as described on Schedule 3.22, no Seller has or may have any
liability for the Taxes of any Person other than Sellers under Reg. Section
1.1502-6 (or any similar provision of state, local, or foreign law), as a
transferee or successor, by Contract or otherwise.
3.23. Brokers and Finders. No Seller, nor any officer, director,
employee or agent thereof, has engaged any finder or broker in connection with
the Transaction, except that S & W has engaged Lazard Freres & Co. LLC and
Goldman Sachs & Co. to act as S & W's independent financial advisors in
connection with the transactions contemplated by this Agreement.
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3.24. Payments. No Seller has, directly or indirectly, paid or
delivered or agreed to pay or deliver any fee, commission or other sum of money
or item of property, however characterized, to any Person which is in any manner
related to the Assets or the Business in violation of any Legal Requirement. No
Seller, nor any officer, director or employee of any Seller, has received or, as
a result of the consummation of the transaction contemplated by this Agreement,
will receive any rebate, kickback or other improper or illegal payment from any
Person with whom Sellers conduct or have conducted business.
3.25. Operation of the Business. The Assets constitute all assets,
properties, goodwill and businesses necessary to operate the Business in all
material respects in the manner in which they been operated prior to the Closing
Date.
3.26. Customer List. Sellers have made available to Buyer a true,
complete and correct list of all customers of each Seller since January 1, 1997
which generated revenues in excess of One Million Dollars ($1,000,000) in any
fiscal year during such period.
3.27. Backlog. Sellers have made available to Buyer a true, complete
and correct list of all unfilled orders for products or services as of April 30,
2000, setting forth the date of such order and the current status.
3.28. Investment Experience and Intent; No Registration. Each Holder is
experienced in evaluating companies such as Buyer, is able to fend for itself in
transactions such as the Transaction, has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of acquiring and holding the Common Stock comprising the Share
Consideration. Except as may be required in connection with or pursuant to the
Bankruptcy Cases, each Holder is acquiring the Common Stock comprising the Share
Consideration for investment for its own account and not with the view to, or
for resale in connection with, any distribution thereof. Each Holder understands
that the Common Stock comprising the Share Consideration has not been registered
under the Securities Act by reason of a specific exemption from the registration
provisions of the Securities Act that depends upon, among other things, the bona
fide nature of the investment intent as expressed herein. Each Holder further
represents that it does not have any contract, undertaking, agreement or
arrangement with any Person to sell, transfer or grant participation to any
third party with respect to any of the Common Stock comprising the Share
Consideration. Each Holder understands and acknowledges that the Common Stock
comprising the Share Consideration will not be registered under the Securities
Act, unless and solely to the extent so required pursuant to the terms and
subject to the conditions of the Registration Rights Agreement.
3.29. Accredited Investor Status. As of the Effective Date, each Holder
is an Accredited Investor.
3.30. Rule 144. Each Holder acknowledges that the Common Stock
comprising the Share Consideration must be held indefinitely unless subsequently
registered under the Securities Act or an exemption from such registration is
available. Each Holder is aware of the provisions of Rule 144 promulgated under
the Securities Act that permit resale of shares purchased in a private placement
subject to the satisfaction of certain conditions. Each Holder covenants that,
in the absence of an effective registration statement covering the Common Stock
comprising the
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Share Consideration, it will sell, transfer or otherwise dispose of such Common
Stock only in a manner consistent with its obligations under the Registration
Rights Agreement or in compliance with applicable securities laws. In connection
therewith, each Holder acknowledges that Buyer will make a notation on its stock
books regarding the restrictions on transfers set forth in this Section 3.30 and
the Registration Rights Agreement and will transfer securities on the books of
Buyer only to the extent not inconsistent herewith and therewith.
3.31. Government Contracting.
(a) (i) No Seller, nor any director, officer, employee, agent or
consultant of any Seller, is (or during the last five years has been) under
administrative, civil or criminal investigation (including as a result of a qui
tam or similar action brought under the Civil False Claims Act or any similar
state or local law, rule or regulation), indictment or information, audit or
internal investigation with respect to any alleged irregularity, misstatement or
omission arising under or relating to any Government Contract or Bid or is (or
during the last five years has been) in violation of any statutes or regulations
relative to prohibited practices, including the Civil False Claims Act,
prohibitions against "Buying In", the Anti-Kickback Act, the Federal Election
Campaign Act, the Truth-In-Negotiations-Act, the Procurement Integrity Act, the
Foreign Corrupt Practices Act, International Trade in Arms Regulation, Cost
Accounting Standards, prohibitions against conflict of interest and anti-trust
laws or any governmental accounting regulations; (ii) no Seller has made a
voluntary disclosure to any Governmental Authority with respect to any alleged
irregularity, misstatement or omission arising under or relating to any
Government Contract or Bid that has led or would reasonably be expected to lead,
either before or after the Closing Date, to any of the consequences set forth in
clause (i) above or any other material damage, penalty assessment, recoupment of
payment or disallowances of cost.
(b) No Seller, nor any director, officer, employee, agent or consultant
of any Seller, is (or during the last five years has been) suspended or debarred
from doing business with any Governmental Authority or has been declared
nonresponsible or ineligible for U.S. Government contracting. To the Knowledge
of Sellers, there exist no circumstances that would warrant the institution of
suspension or debarment proceedings or the finding of nonresponsibility or
ineligibility in the future on the part of the Sellers or Buyer as the purchaser
of the Assets, except as may result from Sellers' current financial condition or
the filing of the Bankruptcy Cases.
(c) The Company and the Company Subsidiaries are in full compliance
with all Foreign Ownership and Control Interests ("FOCI") regulations and have
received all appropriate approvals within the last five years.
(d) Each Sellers' cost accounting and procurement systems with respect
to Government Contracts are in compliance in all material respects with all
applicable governmental regulations and rules.
3.32. Accounts Receivable. Except as described on Schedule 3.32, there
is (a) no account debtor that has refused (or to the Knowledge of Sellers,
threatened to refuse) to pay its obligations with respect to any Account
Receivable for any reason, (b) to Sellers' knowledge, no account debtor that is
insolvent or bankrupt, (c) no Account Receivable that was not generated in the
ordinary course of the Business, (d) no Account Receivable that is not
appropriately reserved
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and, as reserved, is not good and collectible within 90 days from the Closing
Date and (e) with respect to unbilled Accounts Receivable, there exists no fact
that would prohibit or restrict the billing of any such unbilled Accounts
Receivable in the ordinary course of business or, to the Knowledge of Sellers,
would render such unbilled Accounts Receivable uncollectable within 90 days from
the date of invoice.
3.33. Related Party Transactions. Except (i) for compensation and
benefits payable in the ordinary course of the Business, (ii) for normal travel
advances made in the ordinary course of the Business consistent with past
practice and (iii) as set forth on Schedule 3.33, to the Knowledge of Sellers,
no director, officer, partner, employee, "affiliate" or "associate" (as such
terms are defined in Rule 12b-2 under the Exchange Act) of any Seller (a) since
January 1, 1997, has lent or borrowed any monies to or from or has outstanding
any indebtedness or other similar obligations to any Seller, (b) owns any direct
or indirect interest of any kind (except with respect to the ownership of not
more than five percent (5%) of any class of equity security in a publicly held
company) in, or is a director, officer, employee, partner, "affiliate" or
"associate" of, or consultant or lender to, or borrower from, or has the right
to participate in the management, operations or profits of, any Person that is a
competitor, supplier, customer, distributor, lessor, tenant, creditor or debtor
of any Seller, (c) is otherwise a party to, or since January 1, 1997 has been a
party to, any Contract with any Seller involving payments equal to or in excess
of One Hundred Thousand Dollars ($100,000) per year or (d) owns or has any
rights in any assets, properties, licenses or rights which are used or leased
(or, since January 1, 1997, were used or leased) by any Seller in the conduct of
the Business.
4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Sellers as follows:
4.01. Organization. Buyer is a corporation duly organized and validly
existing in good standing under the laws of the State of Louisiana.
4.02. Corporate Powers; Consents; Absence of Conflicts, Etc. Buyer has
the requisite power and authority to conduct its business as now being
conducted, to enter into this Agreement, and to perform its obligations
hereunder. The execution, delivery and performance by Buyer of this Agreement
and the consummation of the Transaction by Buyer:
(a) are within Buyer's corporate powers and are not in contravention of
the terms of its Restated Articles of Incorporation or Amended and Restated
Bylaws, each as amended to date, and have been approved by all requisite
corporate and shareholder action;
(b) except as otherwise expressly provided in this Agreement or as set
forth on Schedule 3.02(b), do not require any approval or consent of, or filing
with, any Governmental Authority;
(c) do not conflict with, or result in any breach or contravention of,
any material agreement to which Buyer is a party or by which it is bound; and
(d) do not violate any Legal Requirement to which Buyer may be subject.
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4.03. Binding Agreement. This Agreement and all instruments and
agreements hereunder to which Buyer is or becomes a party are (or upon execution
will be) valid and legally binding obligations of Buyer enforceable against
Buyer in accordance with the respective terms hereof and thereof, except as
enforceability against Buyer may be restricted, limited or delayed by applicable
bankruptcy or other laws affecting creditors' rights generally and except as
enforceability may be subject to general principles of equity.
4.04. Issuance of Share Consideration. The issuance of the shares of
Common Stock comprising the Share Consideration has been duly and validly
authorized by all requisite corporate and shareholder action, and, when issued
in accordance with the terms and conditions of this Agreement, will be duly
authorized, validly issued, fully paid, and non-assessable.
4.05. Brokers and Finders. Neither Buyer, nor any Affiliate of Buyer,
nor any officer, director, employee or agent thereof, has engaged any finder or
broker in connection with the Transaction, except that Buyer has engaged
Jefferies & Company, Inc. and Morgan Keegan & Company, Inc. to act as Buyer's
independent financial advisors in connection with the Transaction.
4.06. Payments. Neither Buyer, nor any Affiliate of Buyer, nor any
officer, director, employee or agent thereof, has, directly or indirectly, paid
or delivered, offered to pay or deliver, or agreed to pay or deliver any fee,
commission or other sum of money or item of property, however characterized, to
any person which is now or was previously an affiliate or insider (as those
terms are defined in the Bankruptcy Code) of any Seller.
4.07. SEC Documents and Other Reports. Buyer has filed all required
documents with the SEC since January 1, 1997 (the "Buyer SEC Documents"). As of
their respective dates, the Buyer SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as the
case may be, and, at the respective times they were filed, none of the Buyer SEC
Documents contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The consolidated financial statements (including, in each case,
any notes thereto) of Buyer included in the Buyer SEC Documents complied as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, were prepared
in accordance with GAAP (except, in the case of the unaudited statements, as
permitted by Form 10-Q of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated therein or in the notes thereto)
and fairly present in accordance with GAAP the consolidated financial position
of Buyer and its consolidated Subsidiaries as at the respective dates thereof
and the consolidated results of their operations and their consolidated cash
flows for the periods then ended (subject, in the case of unaudited statements,
to any other adjustments described therein and normal year-end audit
adjustments). Except as disclosed in the Buyer SEC Documents filed prior to the
Effective Date or as required by GAAP, Buyer has not, since January 31, 2000,
made any change in the accounting practices or policies applied in the
preparation of financial statements. The books and records of Buyer and its
Subsidiaries have been, and are being, maintained in all material respects in
accordance with GAAP and other applicable legal and accounting requirements.
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4.08. Actions and Proceedings. Except as set forth in the Buyer SEC
Documents filed prior to the Effective Date or on Schedule 4.08, (a) there are
no outstanding orders, judgments, injunctions, awards or decrees of any
Governmental Authority against or involving Buyer or any of its Subsidiaries, or
involving any of its or their properties, assets or business, that would have a
Buyer Material Adverse Effect and (b) as of the Effective Date, there are no
actions, suits or claims or legal, administrative or arbitrative proceedings or
investigations pending or, to the Knowledge of Buyer, threatened against or
involving Buyer or any of its Subsidiaries, or involving any of its or their
properties, assets or business that, individually or in the aggregate, would
have a Buyer Material Adverse Effect.
4.09. Capital Structure. The authorized stock of Buyer consists of
50,000,000 shares of Common Stock and 5,000,000 shares of Preferred Stock. At
the close of business on February 29, 2000, (a) 15,298,921 shares of Common
Stock were issued and outstanding, all of which were validly issued, fully paid
and nonassessable and free of preemptive rights; (b) 8,224,236 shares of Common
Stock were held in the treasury of Buyer or by the Subsidiaries of Buyer; (c)
1,152,375 shares of Common Stock were reserved for future issuance pursuant to
stock option or stock purchase plans; and (d) no shares of Buyer Preferred Stock
were issued or outstanding. Except as disclosed in Buyer SEC Documents filed
prior to the date hereof, there are no outstanding contractual obligations of
Buyer or any of Buyer's Subsidiaries (i) restricting the transfer of, (ii)
affecting the voting rights of, (iii) requiring the registration for sale of, or
(iv) granting any preemptive or antidilutive rights with respect to, any shares
of Common Stock.
4.10. Absence of Certain Changes or Events. Except as disclosed in
Buyer SEC Documents filed prior to the date hereof, since February 29, 2000,
none of Buyer or any of its Subsidiaries has incurred any material liability or
obligations (direct, indirect or contingent), or entered into any material oral
or written agreement or other transaction, that is not in the ordinary course of
business or that would result in a Buyer Material Adverse Effect, except for any
changes or effects resulting from this Agreement, the Transaction or the
announcement thereof.
5. COVENANTS AND AGREEMENTS OF THE PARTIES
5.01. Bankruptcy Cases and Sale Motion; Entry of Sale Order; Additional
Sellers. Sellers shall pursue the Bankruptcy Cases, the Sale Motion and such
other motions as are necessary to implement the Transaction. Sellers shall
request a prompt hearing relative to, and shall use their respective best
efforts to obtain, entry of the Sale Order. From and after the Effective Date,
to the extent that any direct or indirect Subsidiary or Affiliate of any Seller
acquires, owns or holds any portion of the Assets or conducts any portion of the
Business and initially is not a Party hereto, Sellers shall cause each such
direct or indirect Subsidiary or Affiliate to become a Party as an additional
Seller. In addition, Sellers shall, and shall cause each such Subsidiary or
Affiliate to, execute and deliver such further documents and instruments and
take such further actions as may be necessary to file a Bankruptcy Case for each
Subsidiary and Affiliate of S & W as, in the reasonable judgment of Sellers
after consultation with Buyer, are necessary to consummate the Transaction.
5.02. Operations. From the Effective Date until the Closing Date,
except as otherwise expressly provided in this Agreement (including Section
5.03) and subject to the obligations of Sellers to comply with any applicable
order of the Bankruptcy Court and the provisions of the
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Bankruptcy Code and taking into account Sellers' current financial condition and
the Bankruptcy Cases, Sellers will:
(a) perform when due all Legal Requirements and obligations under
Contracts (including the Assumed Contracts) relating to or affecting the Assets
or the Business;
(b) carry on the Business in substantially the same manner as they have
heretofore;
(c) maintain the Assets in good working order and condition, ordinary
wear and tear excepted;
(d) take all actions necessary and appropriate to deliver to Buyer
title to the Assets free and clear of all Encumbrances (except for the Real
Property Encumbrances) and to obtain appropriate releases, consents, estoppels,
certificates, opinions and other instruments as Buyer may reasonably request;
(e) keep in full force and effect present insurance policies or other
comparable insurance benefiting the Assets and the conduct of the Business;
(f) maintain and preserve their business organizations and operations
substantially intact; use their respective commercially reasonable efforts to
retain the present employees at the Business (subject to the right of Sellers,
after consultation with Buyer, to discharge any employee in the ordinary course
of the Business); maintain their relationships with contractors, subcontractors,
suppliers, customers and other Persons doing business with Sellers; and take
such actions as are reasonably necessary and achievable to cause the smooth,
efficient and successful transition to Buyer of the Business at Closing;
(g) permit and allow reasonable access by Buyer to discuss and make
offers of post-Closing employment with any of Sellers' personnel, to advertise
for post-Closing employment at the Business, and to establish relationships with
contractors, subcontractors, suppliers and other Persons having business
relations with Sellers; and
(h) use their respective best efforts to accomplish the sale of the
Cold Storage Business and the Prescient Business pursuant to any Contracts for
such sale entered into and to be performed prior to the Closing Date.
5.03. Certain Actions. From the Effective Date until the Closing Date,
except as otherwise expressly provided in this Agreement or as set forth on
Schedule 5.03, Sellers shall not take any of the following actions without first
obtaining the consent of Buyer:
(a) amend or terminate any Assumed Contract other than an Immaterial
Contract, or enter into any Contract involving a commitment on the part of any
Seller in excess of One Hundred Thousand Dollars ($100,000);
(b) make offers to any employees of the Business for employment with
any Person after Closing or make any material change in personnel, operations,
finances, accounting policies, or real or personal property of the Business;
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(c) increase compensation payable or to become payable to, make a bonus
or severance payment to, or otherwise enter into one or more bonus or severance
agreements with, any employee or agent of any Seller;
(d) create, assume or permit to exist any new Encumbrance upon any of
the Assets, except for Encumbrances providing adequate protection as is required
by the Bankruptcy Court;
(e) sell, assign, transfer, distribute or otherwise dispose of any
property, plant or equipment of any Seller having an original cost in excess of
Fifty Thousand Dollars ($50,000);
(f) take any action outside the ordinary course of the Business;
(g) amend or agree to amend the articles or certificate of
incorporation or other organizational documents or the bylaws or other governing
documents of any Seller or otherwise take any action relating to any liquidation
or dissolution of any Seller;
(h) create, incur, assume, guarantee or otherwise become liable for any
liability of any Seller, or agree to do any of the foregoing;
(i) cancel, forgive, release, discharge or waive any receivable or any
similar Asset or right with respect to the Business, or agree to do any of the
foregoing;
(j) change any accounting method, policy or practice in the Financial
Statements; or
(k) terminate, amend or otherwise modify any Employee Benefit Plan or
Other Plan, except for amendments required to comply with applicable Legal
Requirements or as requested by Buyer.
5.04. Employee Matters.
(a) Subject to the exclusions set forth in this Section 5.04, Buyer may
communicate (after consulting with management of S & W) with any employees of
any Seller and may offer, or cause its Affiliates to offer, to employ as of the
Closing Date all active employees of Sellers working at the Business on the
Closing Date to whom Buyer, in its sole discretion, may choose to make offers of
employment, all in the manner and upon terms and conditions of employment which
are generally comparable to similarly situated employees of Buyer. It is the
intent of Buyer to make offers of employment to substantially all of Sellers'
operating employees. Employees employed under Employee Agreements in place as of
March 31, 2000 or authorized as set forth on Schedule 5.04 (the "Employee
Agreements") will not be offered employment pursuant to this Section 5.04, but
such Employee Agreements shall become Assumed Contracts whether or not the
employees employed thereunder become employed by Buyer or any of its Affiliates
and employment of any employees employed thereunder by Buyer or any of its
Affiliates shall be governed by the terms of the Assumed Contracts relating to
such employees. Buyer shall give all Hired Employees credit for their vacation
and holiday accumulations to the extent the same constitute Assumed Liabilities.
Sellers acknowledge that all employment offers are subject to the satisfactory
completion by Buyer of its customary employee background checks. Nothing
contained in this Section 5.04 or elsewhere in this Agreement shall be deemed to
limit or otherwise affect in any manner the right of Buyer or any Affiliate of
Buyer to
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terminate at will the employment of any Hired Employee (except as otherwise
provided in Assumed Contracts with such employees). Sellers shall be responsible
for and pay any and all liabilities or obligations arising under the WARN Act,
if any, arising out of or resulting from layoffs of employees prior to Closing
and/or the consummation of the Transaction, and Sellers shall remain liable for
any and all costs and expenses associated with continued employment, or
termination and severance, of all employees of Sellers other than the Hired
Employees and employees with respect to whom Buyer shall assume any liabilities
under the Employee Agreements, including any obligation imposed on Sellers or
Buyer to provide such employees with continued health, disability, life or other
retirement benefits (whether covered by insurance or not). Buyer shall not, at
any time prior to 90 days after the Closing Date, without complying fully with
the notice and other requirements of the WARN Act, effectuate (i) a "plant
closing" as defined in the WARN Act affecting any site of employment or one or
more facilities or operating units within any site of employment of the
Business; or (ii) a "mass layoff" as defined in the WARN Act affecting any site
of employment of the Business; or any similar action under applicable state or
foreign law requiring notice to employees in the event of a plant closing or
layoff. In addition, Buyer hereby agrees to indemnify and hold Sellers harmless
from and against any and all claims, losses, damages, expenses, obligations and
liabilities (including costs of collection, attorney's fees and other costs of
defense) which Sellers may incur in connection with any suit or claim of
violation brought against Sellers under the WARN Act or any similar state or
foreign law, which relates to actions taken by Buyer after the Closing Date with
regard to any site of employment or one or more facilities or operating units
within any site of employment of the Business.
(b) Buyer shall as of the Closing Date assume the sponsorship of the
Retirement Plans (but not any other Employee Benefit Plan listed on Schedule
3.20(a)), and in connection therewith shall assume all responsibility for the
administration of such plans and their assets and liabilities. Buyer shall be
responsible for all contributions to the Retirement Plans (but not any other
Employee Benefit Plan listed on Schedule 3.20(a)), due after the Closing Date.
Buyer shall arrange effective as of the Closing Date to enter into appropriate
agreements or modify existing agreements with trustees and other vendors
providing services to the Retirement Plans.
(c) Buyer and Sellers agree to negotiate in good faith with respect to
certain additional terms of employment for Hired Employees relating to
eligibility and participation (including recognition of S & W service) in the
Employee Benefit Plans of Buyer and the disposition of benefits under the
Employee Benefit Plans of Sellers.
5.05. Access to and Provision of Additional Information.
(a) From the Effective Date until the Closing Date, Sellers shall
cooperate fully with Buyer and Buyer's representatives in connection with
Buyer's due diligence investigation of the prospects, business, assets,
Contracts, rights, liabilities and obligations of Sellers and the Business, and
shall provide to Buyer and Buyer's representatives full and complete access to
and the right to inspect the Business, any facilities associated with or used in
the Business, the Assets, and books and records of Sellers relating to Sellers,
the Assets and the Business, and will furnish to Buyer all material information
concerning Sellers, the Assets and the Business not otherwise disclosed pursuant
to this Agreement, all pleadings and other documents or schedules filed with the
Bankruptcy Court, access to Sellers' files and other records regarding claims,
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actions, suits, litigation, arbitration, mediations, investigations and other
proceedings pending against or otherwise affecting any Seller, the Assets or the
Business, and such additional financial, operating and other data and
information regarding the Business as Buyer may from time to time reasonably
request, without regard to where such information may be located. In addition,
each Seller shall use its respective best efforts to cause its agents,
representatives, employees, officers, directors, vendors, suppliers, and
customers to cooperate with Buyer and Buyer's representatives in connection with
Buyer's due diligence review as it relates to any Contracts between any such
vendors, suppliers, and customers and any Seller.
(b) From the Effective Date until the Closing Date, Sellers shall cause
their respective officers and employees to confer on a regular and frequent
basis with one or more representatives of Buyer and to answer Buyer's questions
regarding matters relating to the conduct of the Business and the status of the
Transaction. Sellers shall notify Buyer in writing of any material changes in
the operations, financial condition or prospects of the Business and of any
complaints, investigations, hearings or adjudicatory proceedings (or
communications indicating that the same may be contemplated) of any Person and
shall keep Buyer reasonably informed of such matters.
(c) The exercise by Buyer of any right of access granted herein shall
not materially interfere with the business operations of Sellers.
(d) Except as provided in Article 8, each Party shall be responsible
for its own costs and expenses incurred pursuant to this Section 5.05.
5.06. Post-Closing Maintenance of and Access to Information.
(a) The parties acknowledge that after Closing each party may need
access to information or documents in the control or possession of another party
for the purposes of concluding the transactions herein contemplated, Tax Returns
or audits, the Assumed Contracts and other Legal Requirements, and the
prosecution or defense of third party claims. Accordingly, each party shall
keep, preserve and maintain in the ordinary course of business, and as required
by Legal Requirements and relevant insurance carriers, all books, records,
documents and other information in the possession or control of such party and
relevant to the foregoing purposes at least until the expiration of any
applicable statute of limitations or extensions thereof.
(b) Each party shall cooperate fully in connection with, and make
available for inspection and copying by, the other party, its employees, agents,
counsel and accountants and/or Governmental Authorities, upon written request
and at the expense of the requesting party, such books, records documents and
other information to the extent reasonably necessary to facilitate the foregoing
purposes. In addition, each party shall cooperate with, and shall permit and use
its best efforts to cause, at the expense of the requesting party, its
respective former and present directors, officers and employees to cooperate
with, the other party on and after Closing in furnishing information, evidence,
testimony and other assistance in connection with any action, proceeding,
arrangement or dispute of any nature with respect to the subject matters of this
Agreement and pertaining to periods prior to the Closing Date.
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(c) Sellers shall be entitled to remove from the Business, at Sellers'
sole risk and expense, any records that relate to events or periods prior to
Closing for purposes of pending litigation involving matters to which such
records refer, as certified in writing prior to removal by counsel retained by
Sellers in connection with such litigation. Any records so removed shall be
promptly returned to Buyer following their use by Sellers.
(d) The exercise by either party of any right of access granted herein
shall not materially interfere with the business operations of the other party.
5.07. Governmental Authority Approvals: Consents to Assignment.
(a) From the Effective Date until the Closing Date, each Seller and
Buyer shall (i) promptly apply for and use its respective commercially
reasonable efforts to obtain prior to Closing all consents, approvals,
authorizations and clearances of Governmental Authorities required of it to
consummate the transactions contemplated hereby, (ii) provide such information
and communications to Governmental Authorities as the other party or such
Persons may reasonably request, and (iii) assist and cooperate with other
parties to obtain all Permits and clearances of Governmental Authorities that
the other parties reasonably deem necessary or appropriate, and to prepare any
document or other information reasonably required of it by any such Persons to
consummate the transactions contemplated herein; provided, however, that,
notwithstanding the foregoing, no party shall have any obligation under such
provisions (x) to pay any cash amounts to Governmental Authorities other than
filing fees, or (y) to agree to divest assets or limit the operations of its
businesses.
(b) From the Effective Date until the Closing Date, each of the parties
shall file, if and to the extent required by law, all reports or other documents
required or requested by Governmental Authorities under the HSR Act concerning
the purchase and sale of the Assets and comply promptly with any requests by the
Governmental Authorities for additional information concerning the purchase and
sale of the Assets, so that the waiting period specified in the HSR Act with
respect to those Assets will expire as soon as reasonably possible after the
Effective Date. Each of the parties shall furnish to the other parties such
information as the other parties reasonably require to perform their obligations
under the HSR Act and shall exchange drafts of the relevant portions of each
other's report forms prior to filing.
(c) Sellers shall (i) obtain Bankruptcy Court approval of the
assumption by and assignment to Buyer of the Assumed Contracts and (ii) obtain
all other consents, approvals and novations required to assign the Assumed
Contracts to Buyer.
(d) In the event that any and all novations, transfer or other
agreements, consents, approvals or waivers necessary for the assignments,
transfer or novation of any Assumed Contracts, or any claim, right or benefit
arising thereunder or resulting therefrom, shall not have been obtained prior to
the Closing Date, then as of the Closing, this Agreement, to the extent
permitted by law, shall constitute full and equitable assignment by Sellers to
Buyer of all of Sellers' right, title and interest in and to, and all of
Sellers' obligations and liabilities under, such Assumed Contracts, and Buyer
shall be deemed Sellers' agent for the purpose of completing, fulfilling and
discharging all of Sellers' liabilities under any such Assumed Contracts. The
Parties shall take all necessary steps and actions to provide Buyer with the
benefits of such
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Assumed Contracts, and to relieve Sellers of the performance and other
obligations thereunder, including entry into subcontracts for the performance
thereof. Buyer agrees to pay, perform and discharge, and indemnify Sellers
against and hold Sellers harmless from, all obligations and liabilities of
Sellers relating to such performance or failure to perform under such Assumed
Contracts after the Closing Date, in accordance with the provisions of Article 9
of this Agreement.
(e) In the event Sellers shall be unable to make the equitable
assignment described in Section 5.07(d), or if such attempted assignment would
give rise to any right of termination, or would otherwise adversely affect the
rights of Sellers or Buyer under such Assumed Contracts, or would not assign all
Sellers' rights thereunder at the Closing, Sellers and Buyer shall continue to
cooperate and use all reasonable efforts to provide Buyer with all such rights.
To the extent that any such consents and waivers are not obtained, or until the
impediments to such assignment are resolved, Sellers shall use all reasonable
efforts (without the expenditure, in the aggregate, of any material sum) to (i)
provide to Buyer, at the request of Buyer, the benefits of any such Assumed
Contract to the extent related to the Business or the Assets, (ii) cooperate in
any lawful arrangement designed to provide such benefits to Buyer and (iii)
enforce, at the request of and for the account of Buyer, any rights of Sellers
arising from any such Assumed Contracts against any third Person (including any
Governmental Authority) including the right to elect to terminate in accordance
with the terms thereof upon the advice of Buyer. To the extent that Buyer is
provided the benefits of any Assumed Contract referred to herein (whether from
Sellers or otherwise), Buyer shall perform at the reasonable direction of
Sellers and for the benefit of any third Person (including any Governmental
Authority) the obligations of Sellers thereunder or in connection therewith, and
Buyer agrees to pay, perform and discharge, and indemnify Sellers against and
hold Sellers harmless from, all obligations and liabilities of Sellers relating
to such performance or failure to perform, after the Closing Date, in accordance
with the provisions of Article 9 of this Agreement.
5.08. Noncompetition.
(a) For a period of five years from and after the Closing Date, except
and solely to the extent as is required to perform any Rejected Contracts
assumed pursuant to Section 5.16(b) or Completed Contracts, no Seller shall,
directly or indirectly, in any capacity:
(i) own, lease, manage, operate, control, participate in the
management or control of, be employed by, or maintain or continue any
interest whatsoever in any enterprise engaged in any business
competitive with the Business; or
(ii) employ or solicit the employment of any Hired Employee
unless (x) such employee resigns voluntarily (without any solicitation
from Sellers), (y) Buyer consents in writing to such employment or
solicitation, or (z) such employee is terminated by Buyer after the
Closing Date; or
(iii) induce, cause or attempt to induce or cause any Person
to replace or terminate any Contract relating to the Business with
products or services of any other Person at any time after the Closing
Date.
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(b) Each Seller acknowledges and agrees that any remedy at law for any
breach of this Section 5.08 would be inadequate and consents to the granting by
any court of an injunction or other equitable relief, without the necessity of
actual monetary loss being proved, in order that a breach or threatened breach
of this Section may be effectively enjoined.
5.09. Use of Names. From and after Closing, Sellers shall not use any
of the names acquired pursuant to this Agreement or any variation of the
foregoing in the conduct of any of their businesses, except as is required in or
in connection with the Bankruptcy Cases and except and solely to the extent as
is required to perform any Rejected Contracts assumed pursuant to Section
5.16(b) or Contracts subject to Section 5.07(d) and Section 5.07(e).
5.10. Allocation of Equity Purchase Price for Tax Purposes. Sellers and
Buyer agree that, for tax purposes, the Equity Purchase Price shall be allocated
among the Assets as Buyer may determine, in accordance with their fair market
values consistent with Section 1060 of the Code, and such allocation shall be
binding upon the parties for all applicable federal, state, local and foreign
Tax purposes. Sellers and Buyer covenant to report gain or loss or cost basis,
as the case may be, in a manner consistent with such allocation on all Tax
Returns filed by any of them after Closing and not to voluntarily take any
inconsistent position therewith in any administrative or judicial proceeding
relating to such returns. Sellers and Buyer shall exchange mutually acceptable
and completed IRS Forms 8594 (including supplemental forms, if required), which
they shall use to report the transaction contemplated hereunder to the Internal
Revenue Service in accordance with such allocation. Notwithstanding anything to
the contrary, no allocation hereunder shall supersede or otherwise usurp the
jurisdiction of the Bankruptcy Court to value the assets for purposes of
distribution to the respective Sellers' estates under the Bankruptcy Code.
5.11. Further Acts and Assurances. At any time and from time to time at
and after the Closing, upon request of Buyer, each Seller shall do, execute,
acknowledge and deliver, or cause to be done, executed, acknowledged and
delivered, such further acts, deeds, assignments, transfers, conveyances, powers
of attorney, confirmations and assurances as Buyer may reasonably request to
more effectively convey, assign and transfer to and vest in Buyer, its
successors and assigns, full legal right, title and interest in and actual
possession of the Assets and the Business, to confirm such Seller's capacity and
ability to perform its pre-Closing and post-Closing covenants and agreements
under this Agreement, and to generally carry out the purposes and intent of this
Agreement. Each Seller shall also furnish Buyer with such information and
documents in its possession or under its control, or which such Seller can
execute or cause to be executed, as will enable Buyer to prosecute any and all
petitions, applications, claims and demands relating to or constituting a part
of the Assets and the Business.
5.12. Costs and Expenses.
(a) Except as otherwise expressly set forth in this Agreement, all
expenses of the negotiation and preparation of this Agreement and related to the
Transaction, including legal counsel, accounting, brokerage and investment
advisor fees and disbursements, shall be borne by the respective Party incurring
such expense, whether or not the Transaction is consummated. Sellers shall be
responsible for paying any allowed fees and expenses of Lazard Freres & Co.
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LLC and Goldman Sachs & Co. in connection with the transactions contemplated by
this Agreement.
(b) Buyer shall pay the cost of Buyer's owner's title insurance
policies described in Section 7.05, and Sellers shall pay the cost of removing
Encumbrances that are not Permitted Real Property Encumbrances. Buyer shall pay
the cost of Buyer's land title surveys of the Real Property, and environmental,
engineering and other professional studies undertaken by Buyer.
(c) In the event any Party elects to incur legal fees or expenses to
enforce or interpret any provision of this Agreement and subject to any required
approvals of the Bankruptcy Court, the prevailing Party will be entitled to
recover such legal fees and expenses, including attorneys' fees, costs and
necessary disbursements, in addition to any other relief to which such Party
shall be entitled.
5.13. Insurance Ratings. From the Effective Date until the Closing
Date, Sellers will take all actions reasonably requested by Buyer to enable
Buyer to succeed to the Workers' Compensation and Unemployment Insurance
ratings, insurance policies, deposits and other interests of Sellers and the
Business for insurance or other purposes. Buyer shall not be obligated to
succeed to any such rating, insurance policy, deposit or other interest, except
as it may elect to do so.
5.14. Fulfillment of Conditions. Each party will execute and deliver at
Closing each agreement, instrument or other document that such party is required
by this Agreement to execute and deliver as a condition to Closing, and will
take all commercially reasonable steps necessary or desirable and proceed
diligently and in good faith to satisfy each other condition to the obligations
of the parties contained in this Agreement, to the extent that satisfaction of
such condition is within the control of such party.
5.15. Release of Encumbrances. Except as set forth in this Agreement or
in the Sale Order, Sellers shall cause all Encumbrances other than the Permitted
Real Property Encumbrances to be released and discharged at or prior to Closing,
which Encumbrances, as to Sellers that have filed Bankruptcy Cases, may be
released and discharged by the Bankruptcy Court in the Sale Order.
5.16. Assumed and Assigned Contracts; Rejected Contracts.
(a) Assumed Contracts. Subject to the approval of the Bankruptcy Court
and pursuant to the Executory Contract Assumption and Assignment Order, the
Assumed Contracts, including the Employee Agreements, will be assumed by Sellers
and assigned to Buyer or Buyer's designee on the Closing Date under Section 365
of the Bankruptcy Code. Sellers shall, consistent with their current financial
condition and the Bankruptcy Cases, use their respective best efforts to
promptly comply with and perform any obligations under the Assumed Contracts
arising from and after the Effective Date and through the Closing Date. In the
Sale Motion, or in such additional or subsequent motions as may be appropriate,
Sellers will seek authority to assume and assign the Assumed Contracts to Buyer
(or Buyer's designee) in accordance with Section 365 of the Bankruptcy Code. All
Assumed Contracts shall be assigned to and assumed by Buyer (or Buyer's
designee) at Closing. Subject to the following right of Sellers to reject any
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Contract, the final determination of which Contracts Sellers will assume and
assign to Buyer shall be within the sole discretion of Buyer.
(b) Rejected Contracts. Schedule 5.16(b) contains the schedule of
Rejected Contracts. Subsequent to the Court's approval of this Agreement and
prior to Closing, Sellers shall consult with Buyer about any Contract Sellers
seek to reject and consider in good faith Buyer's opinions on any such
rejection, in recognition of Buyer's bona fide interest in preserving to the
maximum extent possible the Contracts which Buyer believes are reasonably
necessary to the continued operation and financial viability of the Business
after Closing, but Sellers shall have the right in their discretion to reject
any Contract which in their judgment Sellers believe must be rejected to
maintain the viability of the Business prior to the Closing Date or to comply
with any order of the Bankruptcy Court. In addition, subject to the approval of
the Bankruptcy Court and after receipt of Buyer's prior written consent (which
shall not be unreasonably withheld), Sellers may assume any Rejected Contract if
the total cost of completing such Rejected Contract would be materially less
costly than the reasonably anticipated damages that would be payable by Sellers
in connection with a claim for material breach of such Rejected Contract. In the
event that Sellers should assume any such Rejected Contract, Buyer shall grant
Sellers a non-exclusive, royalty-free license to use or exploit those items
constituting Intellectual Properties as may be reasonably necessary to perform
such Rejected Contract assumed by Sellers pursuant to this Section 5.16(b) and
the Completed Contracts.
5.17. Bankruptcy Court Approval.
(a) Sellers shall use their respective best efforts to obtain the Sale
Order which, among other things, (i) determines that this Agreement was proposed
by Buyer in good faith and represents the highest and best offer for the Assets
and should be approved, (ii) determines that Buyer is a good faith purchaser
under Section 363(m) of the Bankruptcy Code and that the provisions of Section
363(n) of the Bankruptcy Code have not been violated, (iii) authorizes and
directs Sellers to assume this Agreement and sell the Assets to Buyer pursuant
to this Agreement and Sections 363 and 365 of the Bankruptcy Code, free and
clear of all liens, claims, interests, liabilities and Encumbrances (including
any and all "interests" in the Assets within the meaning of Section 363(f) of
the Bankruptcy Code), other than the Assumed Liabilities and the Permitted Real
Property Encumbrances, such that Buyer shall not incur any liability as a
successor to the Business, (iv) authorizes and directs Sellers to execute,
deliver, perform under, consummate and implement, this Agreement, together with
all additional instruments and documents, including the Indemnity Escrow
Agreement, that may be reasonably necessary or desirable to implement the
foregoing; (v) authorizes claims and recourse by Buyer against the Indemnity
Deposit for any reason set forth in Section 9.01, including breach of any
representation and warranty of S & W in this Agreement, regardless of whether
such breach relates to Assets owned or leased by S & W or any other Seller
(regardless of whether such other Seller is a debtor in the Bankruptcy Cases),
(vi) authorizes claims and recourse by Buyer against the LC Deposit as provided
in the Indemnity Escrow Agreement and (vii) determines that Buyer is not a
successor to Sellers or otherwise liable for any Excluded Liability and
permanently enjoins each and every holder of an Excluded Liability from
commencing, continuing or otherwise pursuing or enforcing any remedy, claim or
cause of action against Buyer relative to such Excluded Liability.
(b) Sellers shall obtain the Executory Contract Assumption and
Assignment Order.
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(c) Sellers shall promptly make any filings, take all actions, and use
their respective best efforts to obtain any and all other approvals and orders
necessary or appropriate for consummation of the Transaction, subject to their
obligations to comply with any order of the Bankruptcy Court.
(d) In the event an appeal is taken, or a stay pending appeal is
requested, from the Sale Order or the Executory Contract Assumption and
Assignment Order, Sellers shall immediately notify Buyer of such appeal or stay
request and shall provide to Buyer within one business day a copy of the related
notice of appeal or order of stay. Sellers shall also provide Buyer with written
notice of any motion or application filed in connection with any appeal from
either of such orders.
(e) Buyer shall cooperate in providing such information and evidence as
is necessary to obtain the orders described in this Section 5.17.
5.18. Transfer Taxes. In accordance with Section 1146(c) of the
Bankruptcy Code, the making or delivery of any instrument of transfer, including
the filing of any deed or other document of transfer to evidence, effectuate or
perfect the rights, transfers and interest contemplated by this Agreement, shall
be in contemplation of a plan or plans of reorganization to be confirmed in the
Bankruptcy Cases, and as such shall be free and clear of any and all transfer
Tax, stamp Tax or similar Taxes. The instruments transferring the Assets to
Buyer shall contain the following endorsement:
"Because this [instrument] has been authorized pursuant to Order of the
United States Bankruptcy Court for the District of Delaware, in
contemplation of a plan of reorganization of the Grantor, it is exempt
from transfer taxes, stamp taxes or similar taxes pursuant to 11 U.S.C.
Section 1146(c)."
In the event real estate transfer Taxes are required to be paid in order to
record the deeds to be delivered to Buyer in accordance herewith, or in the
event any such Taxes are assessed at any time thereafter, such real estate
transfer Taxes incurred as a result of the transactions contemplated hereby
shall be paid by Buyer. In the event sales, use or other transfer Taxes are
assessed at Closing or at any time thereafter on the transfer of any other
Assets, such Taxes incurred as a result of the transactions contemplated hereby
shall be paid by Sellers.
5.19. Listing Application. Within 30 days following the Closing, Buyer
shall make an application to list the shares of Common Stock comprising the
Share Consideration on the New York Stock Exchange and shall execute and deliver
such further documents or instruments and take such further actions necessary to
consummate such listing expeditiously.
5.20. Bankruptcy Filings. From and after the Effective Date until the
Closing Date, Sellers shall deliver to Buyer (a) copies of all pleadings,
motions, notices, statements, schedules, applications, reports and other papers
that Sellers file in the Bankruptcy Cases within a reasonable time after filing,
but with respect to any such papers that relate, in whole or in part, to this
Agreement, the Transaction, or Buyer, its constituent members or its or their
agents or representatives, Sellers shall use all their respective reasonable
efforts to provide such prior notice as may be reasonable under the
circumstances before the filing of such papers and (b)
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copies of all pleadings, motions, notices, statements, schedules, applications,
reports and other papers filed in the Bankruptcy Cases.
5.21. Non-Solicitation. From and after the Effective Date, neither
Sellers nor any of their respective directors, employees, accountants,
attorneys, or other agents or representatives shall directly or indirectly
solicit or enter into discussions regarding, or respond to any inquiries or
proposals for, a Competing Proposal.
5.22. Tail Insurance. On or prior to the Closing (unless waived by
Buyer), Sellers shall purchase and obtain a three-year extended claims reporting
provision for all primary and excess insurance policies in force as of the
Effective Date which cover any Seller and each employee of any Seller (or for
which Seller otherwise has an obligation to provide such insurance) and which
are written on a claims made insuring agreement. At the election of Buyer,
Sellers shall designate Buyer and other Persons reasonably designated by Buyer
as additional named insureds with respect to all such policies except for
Sellers' directors and officers, fiduciary duty and wrongful termination
policies, and, to the extent such designation requires additional premiums,
Buyer shall pay such additional premiums.
5.23. Other Agreements. Buyer agrees, upon request by Sellers, to (a)
complete, on behalf of any Seller, any Rejected Contracts assumed by Sellers
pursuant to Section 5.16(b) and (b) perform any warranty work relating to any
Completed Contract, in each case pursuant to the Time & Material Agreement.
5.24. Temporary Space. From and after the Closing Date, Buyer agrees,
for so long as Buyer occupies the office space utilized as of the Effective Date
by S & W in Boston, Massachusetts, to provide S & W with temporary office space
at such location in a reasonable amount to be agreed between Buyer and S & W,
including the use of office furniture, computers and equipment at no rent;
provided, however, that S & W shall be responsible for and shall reimburse Buyer
for S & W's pro rata share of utilities, operating maintenance, insurance and
real property taxes.
5.25. Schenectady Lease. Buyer and Sellers shall negotiate in good
faith a lease by Buyer of the space comprising a part of the real property,
located in Schenectady, New York and set forth on Schedule 2.02(d), currently
used by Sellers' Power Technologies Group, which lease shall be at fair market
rental rates for an initial two year period with options to renew for additional
periods.
5.26. Representation, Warranties and Covenants of Certain Subsidiaries.
Each of Stone & Webster Engineering Limited, an English limited company, Stone &
Webster Group Limited, an English limited company, Stone & Webster Construction
Limited, an English limited company, Stone & Webster Services Limited, an
English limited company, Stone & Webster Engineering and Field Services Limited,
an English limited company, Stone & Webster Management Consultants Limited, an
English limited company, Stone & Webster Services SDN BHD, a Malaysian limited
company, Stone & Webster Anadolu Mohendislik Ltd. Sirketi, a Turkish limited
company, and Stone & Webster Canada Limited, a company incorporated under the
federal laws of Canada, joins this Agreement for purposes severally of providing
the representations, warranties and covenants stated in this Section 5.26. Each
of the companies
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listed in this Section 5.26 is a directly or indirectly wholly owned subsidiary
of S & W and each shall constitute a "Foreign Subsidiary" for purposes of this
Section 5.26 and as a "Subsidiary" or "Seller" for all other purposes of this
Agreement as applicable. Nothing set forth herein shall limit or replace any
other provision of this Agreement, it being the intention of the parties that
the provisions of this Section 5.26 are in addition to and not in substitution
for any other provision of this Agreement. Each Foreign Subsidiary hereby
severally represents, warrants and covenants as to itself to Buyer as follows:
(a) Adherence. The Board of Directors of such Foreign Subsidiary has
reviewed the terms of this Agreement and acknowledges that part of the
consideration payable hereunder by Buyer relates to assets of such Foreign
Subsidiary. Such Foreign Subsidiary warrants that the directors have determined
that the terms of this Agreement as they relate to such Foreign Subsidiary are
in the best interests of such Foreign Subsidiary and that such Foreign
Subsidiary has chosen freely to join this Agreement for all such purposes
hereunder as are applicable to such Foreign Subsidiary and its assets.
(b) Apportionment of Consideration. Such Foreign Subsidiary covenants
that it will agree to the apportionment and application of the consideration to
be paid by Buyer to S & W pursuant to this Agreement in respect of the assets of
such Foreign Subsidiary that are to be sold to Buyer hereunder; provided,
however, that the consideration to be allocated to such Foreign Subsidiary must
be paid to or effectively credited to such Foreign Subsidiary under governing
financial accounting practices and, provided further, that such Foreign
Subsidiary shall not be obligated to convey an asset if the consideration to be
paid in respect of the asset is determined by its directors acting in good faith
to be manifestly unfair to such Foreign Subsidiary or otherwise to constitute
less than fair value for such asset and such determination by the Board of
Directors is supported by the determination of a firm of independent chartered
accountants selected by such Foreign Subsidiary and Buyer for such purpose.
(c) Solvency. Such Foreign Subsidiary is solvent (under the law
applicable to such Foreign Subsidiary) as of the date hereof and will
immediately following Closing be solvent.
(d) Pension Plans. If Buyer should become liable under any applicable
law to succeed to employment obligations of such Foreign Subsidiary and if such
Foreign Subsidiary is a sponsor or employer under a pension plan on the date
hereof, then such Foreign Subsidiary covenants that it will exercise its best
efforts to complete agreement with Buyer at Buyer's election so as to ensure
that Buyer, in its capacity of employer or sponsor of such plan, succeeds to the
full benefit of such pension plan (including any funding surplus) in any
agreement between such Foreign Subsidiary and Buyer pursuant to which Buyer or
its designee elects to succeed to such Foreign Subsidiary's rights and
obligations under or in respect of such pension plan.
(e) Cooperation. Such Foreign Subsidiary, subject to the provisos of
Section 5.26(b), will provide its full and complete cooperation in the
completion of the sale or transfer of those of its assets to be sold or
transferred to Buyer or for its benefit pursuant to the terms of this Agreement
so as to vest irrevocable and unencumbered title to all such assets in Buyer or
its
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designee. In furtherance hereof, such Foreign Subsidiary agrees to take all such
actions as a Seller as are specified in Section 5.11.
5.27 Jacobs Credit Agreement. Buyer shall refinance or purchase from
Jacobs all advances outstanding (including any costs and expenses due) under the
Jacobs Credit Agreement within one business day after entry by the Bankruptcy
Court of the Sale Order.
5.28 Canadian Transfer.
(a) The Canadian Assets are included in the Assets. Sellers agree
to use best efforts to transfer the Canadian Assets to Buyer as soon as
practicable.
(b) Buyer shall not transfer the Canadian Consideration to
Sellers, and Buyer shall not assume the Canadian Liabilities, unless and until
Sellers shall make a legal, valid and effective transfer of the Canadian Assets
to Buyer (the "Canadian Transfer"). Notwithstanding anything contained in this
Agreement to the contrary, until the Canadian Transfer: (i) the Cash
Consideration, the Share Consideration and the Aggregate Consideration shall not
include the Canadian Consideration, (ii) the Canadian Assets shall be Excluded
Assets and (iii) the Canadian Liabilities shall be Excluded Liabilities.
Notwithstanding anything contained in this Agreement to the contrary, upon the
Canadian Transfer: (x) the Cash Consideration, the Share Consideration and the
Aggregate Consideration shall include the Canadian Consideration, (y) the Assets
shall include the Canadian Assets and (z) the Assumed Liabilities shall include
the Canadian Liabilities. This Section 5.28(b) does not relieve Sellers of their
obligations and liabilities under Section 5.28(a) and Section 5.28(c).
(c) If Sellers do not transfer the Canadian Assets to Buyer or if
Buyer must pay amounts in excess of the Canadian Consideration to acquire the
Canadian Assets, then Buyer shall have a claim or claims against Sellers under
the Agreement for the value of the Canadian Assets not transferred and/or such
additional amounts paid (a "Canadian Transfer Claim"), which can be satisfied
out of the Canadian Consideration, and if the Canadian Consideration is not
sufficient to satisfy such claim, the Canadian Transfer Claim in excess of the
Canadian Consideration shall have an administrative priority in Sellers' estates
under Sections 503(b) and 507(a)(1) of the Bankruptcy Code.
The parties reserve their right to dispute the appropriate
amount of the Canadian Transfer Claim, if any. The amount of the Canadian
Consideration shall not be evidence for either party of the appropriate amount
of such claim, nor shall it be evidence of the amount of the overall purchase
price attributable to the Canadian Assets.
If the Canadian Transfer does not occur, then the parties
shall attempt to agree upon the amount of the Canadian Transfer Claim; if they
cannot agree, then they shall submit the matter to the Bankruptcy Court for
resolution. If the Canadian Transfer does not occur, for purposes of calculating
the Adjustment Amount, the Canadian Assets attributable to Completed Contracts
and Rejected Contracts shall not be deemed to be Adjustment Assets and the
Canadian Liabilities shall not be deemed to be Adjustment Liabilities.
(d) No Seller nor any Affiliate of any Seller (including any
officer or director of any Seller or any Affiliate of any Seller) shall acquire,
bid for or otherwise seek to acquire, or
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assist (except as may be required under Canadian bankruptcy law) any other party
in any way in connection with the acquisition, bidding for or attempt to
acquire, the Canadian Assets. Sellers shall be liable to Buyer for any
out-of-pocket losses, costs or expenses actually incurred by Buyer as a result
of a breach of this Section 5.28(d).
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS
The obligations of Sellers hereunder are subject to the satisfaction on
or prior to the Closing Date of the following conditions, unless waived in
writing by Sellers:
6.01. Representations and Warranties; Covenants.
(a) Each of the representations and warranties of Buyer contained in
this Agreement shall be true and correct in all material respects on and as of
the Effective Date and, except where expressly limited to a specific date, on
and as of the Closing Date.
(b) Each and all of the terms, covenants and agreements to be complied
with or performed by Buyer on or before the Closing Date shall have been
complied with or performed in all material respects, including the obligations
of Buyer in Section 8.03.
6.02. Adverse Actions or Proceedings. No Governmental Authority shall
have taken any action or made any request of Sellers or Buyer as a result of
which Sellers reasonably and in good faith deem it inadvisable to proceed with
the Transaction, and there shall not be in effect any order restraining,
enjoining or otherwise preventing consummation of the Transaction.
6.03. Pre-Closing Confirmations. Sellers shall have obtained or
received from Buyer documentation or other evidence reasonably satisfactory to
Sellers that Sellers and Buyer have received or will receive all consents,
approvals, authorizations and clearances of Governmental Authorities required to
consummate the transactions contemplated hereby and that all applicable waiting
periods under the HSR Act have expired.
6.04. Approval, Execution and Delivery of Additional Agreements. The
Registration Rights Agreement, the Indemnity Escrow Agreement and the Time &
Material Agreement shall be approved by the Bankruptcy Court and executed and
delivered by Buyer.
6.05. Opinion of Buyer's Counsel. Sellers shall have received an
opinion or opinions from counsel to Buyer dated as of the Closing Date and
addressed to Sellers, substantially in the form attached as Exhibit A. In
rendering such opinion, such counsel may rely upon certificates of governmental
officials and may place reasonable reliance upon certificates of officers of
Buyer.
6.06. No Buyer Material Adverse Change. No event shall have occurred
that shall have had a Buyer Material Adverse Effect.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
The obligations of Buyer hereunder are subject to the satisfaction on
or prior to the Closing Date of each of the following conditions, unless waived
in writing by Buyer:
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7.01. Representations and Warranties; Covenants.
(a) Each of the representations and warranties of each Seller contained
in this Agreement shall be true, complete and correct in all material respects
on and as of the Effective Date (except with respect to representations and
warranties that require or reference a Schedule; which shall be deemed to have
been made and delivered as of the Effective Date) and, except where expressly
limited to a specific date, on and as of the Closing Date.
(b) Each and all of the terms, covenants and agreements to be complied
with or performed by each Seller on or before the Closing Date shall have been
complied with or performed in all material respects, including the obligations
of Sellers in Section 8.02.
7.02. Pre-Closing Confirmations and Contractual Consents. Buyer shall
have obtained or received from Sellers documentation or other evidence
reasonably satisfactory to Buyer that:
(a) Sellers and Buyer have received all consents, permits, approvals,
authorizations and clearances of Governmental Authorities required to consummate
the transactions herein contemplated;
(b) the Sale Order and the Executory Contract Assumption and Assignment
Order have been entered by the Bankruptcy Court and have become Final Orders,
unless Buyer, in its sole discretion, waives the requirement that one or more of
these Orders be a Final Order; provided, however, that, if Buyer waives this
requirement and closes prior to Final Orders, Sellers shall use their best
efforts, at their expense, to provide Buyer with Final Orders, including moving
to dismiss any appeals for mootness;
(c) Sellers have obtained consents to assignment of the Assumed
Contracts set forth on Schedule 7.02(c);
(d) Buyer has obtained such other consents and approvals as may be
legally or contractually required for Buyer's consummation of the transactions
described herein; and
(e) all applicable waiting periods under the HSR Act have expired.
7.03. Adverse Actions or Proceedings. No Governmental Authority shall
have taken any action or made any request of Sellers or Buyer as a result of
which Buyer reasonably and in good faith deems it inadvisable to proceed with
the Transaction, and there shall not be in effect any order restraining,
enjoining or otherwise preventing consummation of the Transaction.
7.04. Operations; No Material Adverse Effect. No event shall have
occurred which has had a Material Adverse Effect and there shall have been no
material adverse change in the financial markets generally.
7.05. Title Insurance Policies and Surveys. Buyer shall have received:
(a) commitments from a title insurance company or companies designated
by Buyer to issue as of the Closing Date one or more ALTA extended coverage
owner's title insurance
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policies for the Real Property, in amounts acceptable to Buyer, in form
satisfactory to Buyer and with such endorsements as Buyer may require; and
(b) ALTA surveys of the Real Property and improvements thereon, in form
satisfactory to Buyer and the title insurance company, from an engineering firm
designated by Buyer and certified to Buyer, the title insurance company and such
other Persons as Buyer may designate.
7.06. Opinion of Sellers' Counsel. Buyer shall have received an opinion
or opinions from counsel to Sellers dated as of the Closing Date and addressed
to Buyer, substantially in the form attached as Exhibit B. In rendering such
opinion, such counsel may rely upon certificates of governmental officials and
may place reasonable reliance upon certificates of officers of Sellers.
7.07. Deliveries at Closing. Sellers shall have delivered to Buyer, in
form reasonably acceptable to Buyer and approved by Buyer's counsel, deeds,
bills of sale, assignments or other instruments of transfer, and estoppels,
consents and waivers by others, necessary or appropriate to transfer to and
effectively vest in Buyer the Assets and all agreements, instruments,
certificates or other documents contemplated or required to be executed by any
Seller pursuant to this Agreement.
7.08. Lien Searches. Sellers shall have delivered to Buyer UCC lien
searches showing all Encumbrances on the Assets, accompanied by fully executed
UCC or other releases or conveyances relating to all Encumbrances that are not
Permitted Real Property Encumbrances.
7.09. Approval, Execution and Delivery of Additional Agreements. The
Registration Rights Agreement, the Indemnity Escrow Agreement and the Time &
Material Agreement shall be approved by the Bankruptcy Court and executed and
delivered by Sellers.
8. CLOSING; TERMINATION OF AGREEMENT
8.01. Closing.
(a) Consummation of the sale and purchase of the Assets and the
Business and the other transactions contemplated by and described in this
Agreement (the "Closing") shall take place at the offices of Fulbright &
Jaworski L.L.P., 1301 McKinney, Suite 5100, Houston, Texas at 10:00 a.m. on the
first business day following satisfaction or waiver of the conditions set forth
in Article 6 and Article 7, or at such time or place as the parties may mutually
agree. Unless otherwise agreed in writing by the parties at Closing, the Closing
shall be effective for accounting purposes as of 12:01 A.M. on the day following
the Closing Date.
(b) At the Closing, Buyer may designate one or more Affiliates to take
title to the Assets, and references to instruments or agreements to be executed
and delivered to or by Buyer in this Agreement at Closing shall apply to each
such designee with respect to the Assets acquired by it. Buyer shall notify
Sellers prior to Closing of the names of such designees and, from and after
Closing, the rights, privileges and benefits of this Agreement applicable to
Buyer shall benefit each such designee, subject to the terms, covenants and
conditions of this Agreement, with respect to the Assets acquired by it.
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8.02. Action of Sellers at Closing. At the Closing unless otherwise
waived in writing by Buyer, Sellers shall deliver:
(a) to Buyer deeds containing general warranties of title, fully
executed by Sellers in recordable form, conveying to Buyer good and marketable
fee title to the Real Property, free and clear of all Encumbrances other than
the Permitted Real Property Encumbrances;
(b) to Buyer bills of sale and assignment, fully executed by Sellers,
in form and substance acceptable to Buyer, conveying to Buyer good and valid
title to all Assets other than the Real Property, free and clear of all
Encumbrances;
(c) to Buyer assignments, fully executed by Sellers, in form and
substance acceptable to Buyer, conveying Sellers' interests in the Assumed
Contracts to Buyer;
(d) to Buyer the Indemnity Escrow Agreement, fully executed by S & W;
(e) to Buyer the Registration Rights Agreement, fully executed by each
Seller;
(f) to Buyer the Time & Material Agreement, fully executed by Sellers;
(g) to Buyer copies of resolutions or equivalent instruments duly
adopted by the governing body of each Seller and, if required, the partners or
members of such Seller, authorizing and approving the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby,
certified as true and in full force and effect as of the Closing Date by the
appropriate officers or partners of such Seller;
(h) to Buyer certificates of the duly authorized President or Vice
President or similar officer of each Seller certifying that, except where
expressly limited to a specific date, each of the representations and warranties
of each Seller contained in this Agreement is true and correct on and as of the
Closing Date in all material respects, and that each and all of the terms,
covenants and agreements to be complied with or performed by Sellers on or
before the Closing Date have been complied with and performed in all material
respects;
(i) to Buyer certificates of incumbency or evidence of appropriate
power of attorney for the respective directors or officers of each Seller
executing the Agreement and other Closing documents, dated as of the Closing
Date;
(j) to Buyer certificates of existence and good standing from each
jurisdiction in which each any Seller is incorporated or organized (and, with
respect to any Foreign Seller, only to the extent that the same or equivalent
certificates or documents may be obtained in its jurisdiction of organization),
each dated the within ten business days prior to Closing;
(k) to Buyer, appropriate letters or other documentation necessary to
transfer and sell the Accounts Receivable to Buyer and to advise the account
debtors of such transfer and sale; and
(l) to Buyer such other instruments, agreements, certificates and
documents as Buyer reasonably deems necessary to effect the transactions
contemplated hereby.
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8.03. Action of Buyer at Closing. At the Closing and unless otherwise
waived in writing by Sellers, Buyer shall deliver:
(a) to Sellers the Cash Consideration and the Share Consideration, less
the Indemnity Deposit and the LC Deposit;
(b) to the Escrow Agent the Indemnity Deposit and the LC Deposit in
accordance with the Indemnity Escrow Agreement;
(c) to the extent applicable, to an account under the control of the
Massachusetts Court, the Litigation Deposit;
(d) to Sellers an assumption agreement, fully executed by Buyer, in
form and substance reasonably acceptable to Sellers, pursuant to which Buyer
shall assume the future payment and performance of the Assumed Liabilities;
(e) to Sellers the Indemnity Escrow Agreement, fully executed by Buyer;
(f) to Sellers the Registration Rights Agreement, fully executed by
Buyer;
(g) to Sellers the Time & Material Agreement, fully executed by Buyer;
(h) to Sellers copies of resolutions duly adopted by the board of
directors of Buyer authorizing and approving Buyer's execution and delivery of
this Agreement and the Transaction, certified as true and in full force and
effect as of the Closing Date by an appropriate officer of Buyer;
(i) to Sellers certificates of the duly authorized President or a Vice
President of Buyer certifying that, except as expressly limited to a specific
date, each of the representations and warranties of Buyer contained in this
Agreement is true and correct on and as of the Closing Date in all material
respects, and that each and all of the terms, covenants and agreements to be
complied with or performed by Buyer on or before the Closing Date have been
complied with and performed in all material respects;
(j) to Sellers certificates of incumbency for the officers of Buyer
executing this Agreement and other Closing documents, dated as of the Closing
Date;
(k) to Sellers certificates of existence and good standing of Buyer
from the jurisdiction in which it is incorporated, dated within ten business
days date prior to Closing; and
(l) to Sellers such other agreements, instruments and documents as
Sellers reasonably deem necessary to effect the transactions contemplated
hereby.
8.04. Termination Prior to Closing.
(a) Notwithstanding anything herein to the contrary, this Agreement may
be terminated, and the transactions contemplated by this Agreement abandoned,
upon notice by the terminating party to the other parties:
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(i) at any time before the Closing, by mutual consent of Buyer
and Sellers;
(ii) at any time before the Closing, by Buyer on the one hand,
or S & W on the other hand, in the event of material breach of this
Agreement by the non-terminating party or if the satisfaction of any
condition to such party's obligations under this Agreement becomes
impossible or impracticable with the use of commercially reasonable
efforts and the failure of such condition to be satisfied is not caused
by a breach by the terminating party;
(iii) at any time after September 30, 2000, by S & W or Buyer
if the Transaction has not been consummated on or before such date;
(iv) at any time before the Closing, by Buyer, if any of the
following shall occur:
(A) any of the Bankruptcy Cases is dismissed or
converted to chapter 7 of the Bankruptcy Code or a trustee is
appointed for any of the Sellers; or
(B) both the Sale Order and the Executory Contract
Assumption and Assignment Agreement shall not have been
entered by July 31, 2000.
(b) If this Agreement is validly terminated pursuant to this Section
8.04, this Agreement will be null and void, and there will be no liability on
the part of any party (or any of their respective officers, directors, trustees,
employees, agents, consultants or other representatives).
9. INDEMNIFICATION
9.01. Indemnification by Sellers. Subject to and to the extent provided
in this Section 9, from and after the Closing, Sellers shall jointly and
severally indemnify, defend and hold harmless Buyer's Indemnified Persons, and
each of them, from and against any Losses incurred or suffered by Buyer's
Indemnified Persons, directly or indirectly, as a result of or arising from:
(a) any inaccuracy of any representation or warranty of any Seller,
whether or not Buyer's Indemnified Persons relied thereon or had knowledge
thereof;
(b) any claims or adjustments arising out of performance of the Assumed
Contracts prior to Closing, except to the extent such claims or adjustments
constitute an Assumed Liability, and any amount paid under letters of credit
called after Closing with respect to any Project Rejected Contracts or financial
guarantees in favor of insurance carriers;
(c) the nonfulfillment of any covenant, agreement or other obligation
of any Seller set forth in this Agreement or in any other agreement or
instrument delivered by any Seller pursuant to this Agreement; and
(d) the Excluded Liabilities.
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Sellers' obligations under this Section shall have the priority of a claim for
the cost of administration in the Bankruptcy Cases under Sections 503(b) and
507(a)(1) of the Bankruptcy Code.
9.02. Sellers' Limitations. No Seller shall have any liability under
Section 9.01 and no claim under Section 9.01 shall:
(a) accrue to any of Buyer's Indemnified Persons against any Seller
under Section 9.01(a) unless and until the total liability of Sellers in respect
of claims arising under Section 9.01(a) exceeds Two Million Five Hundred
Thousand Dollars ($2,500,000) in the aggregate; provided, however, that there
shall be no minimum Loss requirement, and liability of Sellers shall arise from
and after One Dollar ($1.00) of Losses, in respect of Losses resulting from any
Seller's intentional misrepresentation or fraud;
(b) be made unless notice thereof shall have been given by or on behalf
of any of Buyer's Indemnified Persons to Sellers in the manner provided in
Section 9.05; or
(c) be recoverable by Buyer except (i) until a plan of reorganization
in the Bankruptcy Cases has become effective or, if the cases are converted to
Chapter 7 cases, until each such case is closed, as administrative expenses of
Sellers' bankruptcy estates, (ii) against the Indemnity Deposit or the LC
Deposit for claims asserted within eighteen months after the Closing Date
(unless a longer period is specified in Section 9.06 with respect to a
representation and warranty), and (iii) pursuant to Buyer's rights of offset and
set off in Section 10.11;
provided, however, that all claims for indemnification made by Buyer under this
Section 9 will survive any termination or expiration described above and be
recoverable from the sources described above until such claims shall have been
satisfied or otherwise resolved as provided herein.
9.03. Indemnification by Buyer. Subject to and to the extent provided
in this Section 9, from and after the Closing Date, Buyer shall indemnify,
defend and hold harmless Sellers' Indemnified Persons, and each of them, from
and against any Losses incurred or suffered by Sellers' Indemnified Persons,
directly or indirectly, as a result of or arising from:
(a) any inaccuracy in any representation or warranty of Buyer, whether
or not Sellers' Indemnified Persons relied thereon or had knowledge thereof;
(b) the nonfulfillment of any covenant, agreement or other obligation
of Buyer set forth in this Agreement or in any other agreement or instrument
delivered by Buyer pursuant to this Agreement; and
(c) the Assumed Liabilities.
9.04. Buyer's Limitations. Buyer shall have no liability under Section
9.03 and no claim under Section 9.03 shall:
(a) accrue to any of Sellers' Indemnified Persons against Buyer under
Section 9.03(a) unless and until the total liability of Buyer in respect of
claims arising under Section 9.03(a)
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exceeds Two Million Five Hundred Thousand Dollars ($2,500,000) in the aggregate;
provided, however, that there shall be no minimum Loss requirement, and
liability of Buyer shall arise from and after One Dollar ($1.00) of Losses, in
respect of Losses resulting from Buyer's intentional misrepresentation or fraud;
or
(b) be made unless notice thereof shall have been given by or on behalf
of any of Sellers' Indemnified Persons to Buyer in the manner provided in
Section 9.05;
provided, however, that all claims for indemnification made by Sellers under
this Section 9 will survive any termination or expiration described above and be
recoverable from the sources described above until such claims shall have been
satisfied or otherwise resolved as provided herein.
9.05. Notice and Procedure. All claims for indemnification by any
Indemnified Party against an Indemnifying Party under this Section 9 shall be
asserted and resolved as follows:
(a)(i) If any claim or demand for which an Indemnifying Party
would be liable for Losses to an Indemnified Party is alleged or
asserted by a Person other than any Buyer's Indemnified Person or any
Sellers' Indemnified Person (a "Third Party Claim"), the Indemnified
Party shall deliver a Claim Notice with reasonable promptness to the
Indemnifying Party, together with a copy of all papers served, if any,
and specifying the nature of and alleged basis for the Third Party
Claim and, to the extent then feasible, the alleged amount or the
estimated amount of the Third Party Claim. If the Indemnified Party
fails to deliver the Claim Notice to the Indemnifying Party within 30
days after the Indemnified Party receives notice of such Third Party
Claim, the Indemnifying Party will not be obligated to indemnify the
Indemnified Party with respect to such Third Party Claim if and only to
the extent that the Indemnifying Party's ability to defend the Third
Party Claim has been irreparably prejudiced by such failure. The
Indemnifying Party will notify the Indemnified Party within 30 days
after receipt of the Claim Notice (the "Notice Period") whether the
Indemnifying Party intends, at the sole cost and expense of the
Indemnifying Party, to defend the Indemnified Party against the Third
Party Claim.
(ii) If the Indemnifying Party notifies the Indemnified Party
within the Notice Period that the Indemnifying Party intends to defend
the Indemnified Party against the Third Party Claim, then the
Indemnifying Party will have the right to defend, at its sole cost and
expense, the Third Party Claim by all appropriate proceedings, which
proceedings will be diligently prosecuted by the Indemnifying Party to
a final conclusion or settled at the discretion of the Indemnifying
Party (with the consent of the Indemnified Party). The Indemnifying
Party will have full control of such defense and proceedings; provided,
however, that the Indemnified Party may file during the Notice Period,
at the sole cost and expense of the Indemnified Party, any motion,
answer or other pleading that the Indemnified Party may deem necessary
or appropriate to protect its interests and not irrevocably prejudicial
to the Indemnifying Party (it being understood and agreed that, except
as provided in Section 9.05(a)(iii), if an Indemnified Party takes any
such action that is irrevocably prejudicial and conclusively causes a
final adjudication that is materially adverse to the Indemnifying
Party, the Indemnifying Party will be relieved of its obligations
hereunder with respect to that portion of the Third Party Claim
prejudiced
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by the Indemnified Party's action); provided, further, however, that,
if requested by the Indemnifying Party, the Indemnified Party shall
cooperate, at the sole cost and expense of the Indemnifying Party, with
the Indemnifying Party and its counsel in contesting any Third Party
Claim that the Indemnifying Party elects to contest or, if appropriate
in the judgment of the Indemnified Party and related to the Third Party
Claim, in making any counterclaim or cross-claim against any Person
(other than the Indemnified Party). The Indemnified Party may
participate in, but not control, any defense or settlement of any Third
Party Claim assumed by the Indemnifying Party pursuant to this Section
9.05(a)(ii) and, except as provided in the preceding sentence, the
Indemnified Party will bear its own costs and expenses with respect to
such participation. Notwithstanding the foregoing, the Indemnifying
Party may not assume the defense of the Third Party Claim if (1) the
Persons against whom the claim is made, or any impleaded Persons,
include both the Indemnifying Party and any Indemnified Party, and (2)
representation of both such Persons by the same counsel would be
inappropriate due to actual or potential differing interests between
them, in which case any Indemnified Party shall have the right to
defend the Third Party Claim and to employ counsel at the expense of
the Indemnifying Party.
(iii) If the Indemnifying Party fails to notify the
Indemnified Party within the Notice Period that the Indemnifying Party
intends to defend the Indemnified Party against the Third Party Claim,
or if the Indemnifying Party gives such notice but fails to diligently
prosecute or settle the Third Party Claim, or if the Indemnifying Party
fails to give any notice whatsoever within the Notice Period, then the
Indemnified Party will have the right (but not the obligation) to
defend, at the sole cost and expense of the Indemnifying Party, the
Third Party Claim by all appropriate proceedings, which proceedings
will be diligently prosecuted by the Indemnified Party to a final
conclusion or settled at the discretion of the Indemnified Party. The
Indemnified Party will have full control of such defense and
proceedings, including any compromise or settlement thereof; provided,
however, that, if requested by the Indemnified Party, the Indemnifying
Party shall cooperate, at the sole cost and expense of the Indemnifying
Party, with the Indemnified Party and its counsel in contesting the
Third Party Claim which the Indemnified Party is contesting, or, if
appropriate and related to the Third Party Claim in question, in making
any counterclaim or cross-claim against any Person (other than the
Indemnifying Party).
(iv) Notwithstanding Section 9.05(a)(iii), if the Indemnifying
Party notifies the Indemnified Party within the Notice Period that the
Indemnifying Party disputes its obligation to indemnify the Indemnified
Party against the Third Party Claim, and if such dispute is resolved
pursuant to Section 9.05(c) in favor of the Indemnifying Party, the
Indemnifying Party will not be required to bear the costs and expenses
of the Indemnified Party's defense pursuant to Section 9.05(a)(iii) or
of the Indemnifying Party's participation therein at the Indemnified
Party's request, and the Indemnified Party will reimburse the
Indemnifying Party in full for all such costs and expenses. The
Indemnifying Party may participate in, but not control, any defense or
settlement controlled by the Indemnified Party pursuant to Section
9.05(a)(iii), but the Indemnifying Party will bear its own costs and
expenses with respect thereto if such participation is not at the
request of the Indemnified Party.
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(b) In the event any Indemnified Party should have a claim against any
Indemnifying Party that is not a Third Party Claim, the Indemnified Party shall
deliver an Indemnity Notice with reasonable promptness to the Indemnifying Party
specifying the nature of and specific basis for the claim and, to the extent
then feasible, the amount or the estimated amount of the claim. The failure by
any Indemnified Party to give timely notice referred to in the preceding
sentence shall not impair such Person's rights hereunder except to the extent
that an Indemnifying Party demonstrates that it has been irreparably prejudiced
thereby. If the Indemnifying Party does not notify the Indemnified Party within
30 days following its receipt of the Indemnity Notice that the Indemnifying
Party disputes its obligation to indemnify the Indemnified Party hereunder, the
claim will be conclusively deemed a liability of the Indemnifying Party
hereunder.
(c) If the Indemnifying Party timely disputes its liability with
respect to a claim described in a Claim Notice or an Indemnity Notice, the
Indemnifying Party and the Indemnified Party shall proceed promptly and in good
faith to negotiate a resolution of such dispute within 60 days following receipt
of the Claim Notice or Indemnity Notice and, if such dispute is not resolved
through negotiations during such 60-day period, it shall be resolved pursuant to
arbitration pursuant to the then effective Commercial Arbitration Rules of the
American Arbitration Association to the fullest extent permitted by applicable
law.
(d) Except where liability is disputed pursuant to Section 9.05(c), the
Indemnifying Party shall pay the amount of any liability to the Indemnified
Party within 30 days following its receipt of a Claim Notice or an Indemnity
Notice, or on such later date (i) in the case of a Third Party Claim, as the
Indemnified Party suffers Losses in respect of the Third Party Claim, or (ii) in
the case of an Indemnity Notice in which the amount of the claim is estimated,
promptly after any Losses in respect of such claim are actually incurred by the
Indemnified Party. In the event the Indemnified Party is not paid in full for
its claim in a timely manner after the Indemnifying Party's obligation to
indemnify and the amount thereof has been determined, the amount due shall bear
interest from the date that the Indemnifying Party received the Claim Notice or
the Indemnity Notice until paid at the Applicable Rate, and in addition to any
other rights it may have against the Indemnifying Party, the Indemnified Party
shall have the right to set-off the unpaid amount of such claim against any
amounts owed by it to the Indemnifying Party.
(e) Any estimated amount of a claim submitted in a Claim Notice or an
Indemnity Notice shall not be conclusive of the final amount of such claim, and
the giving of a Claim Notice when an Indemnity Notice is properly due, or the
giving of an Indemnity Notice when a Claim Notice is properly due, shall not
impair such Indemnified Party's rights hereunder except to the extent that an
Indemnifying Party demonstrates that it has been irreparably prejudiced thereby.
Notice of any claim comprised in part of Third Party Claims and claims that are
not Third Party Claims may be given pursuant to either Section 9.05(a) or
Section 9.05(b).
9.06. Survival of Representations; Indemnity Periods. Notwithstanding
any right of Buyer (whether or not exercised) to investigate the Business or any
right of any party (whether or not exercised) to investigate the accuracy of the
representations and warranties of the other party contained in this Agreement,
Sellers have, on the one hand, and Buyer has, on the other hand, the right to
rely fully upon the representations, warranties, covenants and agreements of the
other contained in this Agreement. The representations and warranties in this
Agreement made by S & W and Buyer respectively will survive the Closing (a)
indefinitely with respect to matters
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covered by Section 2.04, Section 3.01 and Section 4.01, (b) until 60 days after
the expiration of all applicable statutes of limitations (including all periods
of extension, whether automatic or permissive) with respect to matters covered
by Section 3.05, Section 3.07, Section 3.13 and Section 3.22 and (c) until the
expiration of eighteen calendar months from the Closing Date in the case of all
other representations and warranties, except that:
(i) any representation, warranty, covenant or agreement that
would otherwise terminate in accordance with clause (b) or clause (c)
above shall survive if a Claim Notice or an Indemnity Notice shall have
been given on or prior to such termination date, until the related
claim for indemnification has been satisfied or otherwise resolved as
provided in this Section 9;
(ii) in the event of intentional misrepresentation or fraud in
the making of any representation or warranty, or intentional, willful
or reckless nonfulfillment or breach of any covenant in this Agreement,
all representations, warranties, covenants and agreements that are the
subject of the intentional misrepresentation, fraud, willful or
reckless nonfulfillment or breach, shall survive until 60 days after
the expiration of all applicable statutes of limitations (including all
periods of extension, whether automatic or permissive) with respect to
matters covered thereby; and
(iii) covenants and agreements to be performed after the
Closing Date will survive the Closing for the term specified therein,
or, if no term is specified, indefinitely.
9.07. Limitations of Liability. Notwithstanding anything in this
Section 9 to the contrary, (a) Sellers' liability for indemnification under this
Agreement shall be (i) limited in the case of claims other than those related to
(A) the letters of credit as shown on Schedule 5.16(b) with respect to the
Project Rejected Contracts or financial guarantees in favor of insurance
carriers or (B) the Canadian Transfer, to the Indemnity Deposit, (ii) limited in
the case of claims related to the letters of credit as shown on Schedule 5.16(b)
with respect to the Project Rejected Contracts or financial guarantees in favor
of insurance carriers, to the LC Deposit, or (iii) unlimited in the case of
claims related to the Canadian Transfer, provided that any such claim shall be
satisfied first from the Canadian Consideration, and (b) Buyer's liability for
indemnification under this Agreement shall be limited to the sum of Twenty Five
Million Dollars ($25,000,000).
10. GENERAL
10.01. Schedules. The Schedules and all Exhibits and documents referred
to in or attached to this Agreement are integral parts of this Agreement as if
fully set forth herein and all statements appearing therein shall be deemed to
be representations. Nothing in the Schedules shall be deemed adequate to
disclose an exception to a representation or warranty made herein unless the
Schedule identifies the exception with reasonable particularity.
10.02. Tax Effect. None of the parties (nor such parties' counsel or
accountants) has made or is making in this Agreement any representation to any
other party (or such party's counsel or accountants) concerning any of the Tax
effects or consequences on the other party of the transactions provided for in
this Agreement. Each party represents that it has obtained, or
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may obtain, independent Tax advice with respect thereto and upon which it, if so
obtained, has solely relied.
10.03. Reproduction of Documents. This Agreement and all documents
relating hereto, including consents, waivers and modifications which may
hereafter be executed, the documents delivered at the Closing, and financial
statements, certificates and other information previously or hereafter furnished
to any party may be reproduced by any party by any photographic, photostatic,
microfilm, micro-card, miniature photographic or other similar process and the
parties may destroy any original documents so reproduced. The parties stipulate
that any such reproduction shall be admissible in evidence as the original
itself in any judicial, arbitral or administrative proceeding (whether or not
the original is in existence and whether or not such reproduction was made in
the ordinary course of business) and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
10.04. Time of Essence. Time is of the essence in the performance of
this Agreement. This Section may be waived only in a writing expressly referring
hereto.
10.05. Consents, Approvals and Discretion. Except as herein expressly
provided to the contrary, whenever this Agreement requires any consent or
approval to be given by any party that is not in such party's sole discretion or
any party must or may exercise discretion (other than its sole discretion), such
consent or approval shall not be unreasonably withheld or delayed and such
discretion shall be reasonably exercised.
10.06. Choice of Law; Submission to Jurisdiction. Except as otherwise
provided in this Section 10.06, this Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard to
such state's conflicts of laws rules. Each of the Parties hereby (a) submits to
the non-exclusive jurisdiction of the courts of the State of Delaware for
purposes of all legal proceedings arising out of or relating to this Agreement
or the Transaction and irrevocably waives, to the fullest extent permitted by
law, any objection to the laying of venue of any such proceeding brought in such
court and any claim that such court is an inconvenient forum or (b) with respect
to the Bankruptcy Cases and issues relating thereto that are properly within the
jurisdiction of the Bankruptcy Court, submits to the exclusive jurisdiction of
the Bankruptcy Court for such purposes and irrevocably waives, to the fullest
extent permitted by law, any objection to the laying of venue of any such
proceeding brought in such Bankruptcy Court and any claim that such Bankruptcy
Court is an inconvenient forum; provided, however, that if the Bankruptcy Court
abstains or otherwise determines not to hear such proceeding, then the
provisions of clause (a) above shall apply.
10.07. Benefit; Assignment. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective legal
representatives, successors and assigns. No party may assign this Agreement
without the prior written consent of the other parties; provided, however, that
Buyer may assign this Agreement, in whole or in part, to any Affiliate of Buyer.
10.08. No Third Party Beneficiary. The terms and provisions of this
Agreement (including provisions regarding employee and employee benefit matters)
are intended solely for the benefit of the parties, Buyer's Indemnified Persons,
Sellers' Indemnified Persons, and their respective successors and permitted
assigns, and are not intended to confer third-party
60
<PAGE> 68
beneficiary rights upon any other Person. Any reference in this Agreement to one
or more Employee Benefit Plans of Buyer or S & W includes provisions, if any, in
such plans permitting their termination or amendment and any covenant in this
Agreement to provide benefits under any Employee Benefit Plan shall not be
deemed or construed to limit Buyer's right to terminate or amend such plan of
Buyer in accordance with its terms.
10.09. Waiver of Breach, Right or Remedy. The waiver by any party of
any breach or violation by another party of any provision of this Agreement or
of any right or remedy of the waiving party in this Agreement (a) shall not
waive or be construed to waive any subsequent breach or violation of the same
provision, (b) shall not waive or be construed to waive a breach or violation of
any other provision, and (c) shall be in writing and may not be presumed or
inferred from any party's conduct. Except as expressly provided otherwise in
this Agreement no remedy conferred by this Agreement is intended to be exclusive
of any other remedy, and each and every remedy shall be in addition to every
other remedy granted in this Agreement or now or hereafter existing at law or in
equity, by statute or otherwise. The election of any one or more remedies by a
party shall not constitute a waiver of the right of such waiving party to pursue
other available remedies. In addition to any other rights and remedies any party
may have at law or in equity for breach of this Agreement, each party shall be
entitled to seek an injunction to enforce the provisions of this Agreement.
10.10. Notices. Any notice, demand or communication required, permitted
or desired to be given hereunder shall be deemed effectively given if given in
writing (a) on the date tendered by personal delivery, (b) on the date received
by facsimile or other electronic means, (c) one day after the date tendered for
delivery by nationally recognized overnight courier, or (d) three days after the
date tendered for delivery by United States mail, with postage prepaid thereon,
certified or registered mail, return receipt requested, in any event addressed
as follows:
If to Buyer:
The Shaw Group Inc.
8545 United Plaza Blvd.
Baton Rouge, Louisiana 70809
Attn: Gary P. Graphia, Esq.
Facsimile: (225) 932-2642
with a copy to:
Fulbright & Jaworski L.L.P.
1301 McKinney, Suite 5100
Houston, Texas 77010
Attn: Charles L. Strauss, Esq. and
William H. Caudill, Esq.
Facsimile: (713) 651-5246
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<PAGE> 69
If to Seller:
Stone & Webster, Incorporated
245 Summer Street
Boston, Massachusetts 02210
Attn: General Counsel
Facsimile: (617) 589-2201
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Rodney Square
Wilmington, Delaware 19801
Attn: Gregg Galardi, Esq.
Facsimile: (302) 651-3001
or to such other address or number, and to the attention of such other Person,
as any party may designate at any time in writing in conformity with this
Section.
10.11. Misdirected Payments; Offset Rights. Sellers shall remit to
Buyer with reasonable promptness any monies received by Sellers constituting or
in respect of the Assets, Assumed Contracts and Assumed Liabilities. Buyer shall
remit to S & W with reasonable promptness any monies received by Buyer
constituting or in respect of the Excluded Assets, Rejected Contracts (except
Project Rejected Contracts to the extent Buyer has made unreimbursed payments
under letters of credit related thereto), Completed Contracts and Excluded
Liabilities. If any Person determines that funds previously paid or credited to
any Seller or the Business in respect of services rendered prior to the Closing
Date have resulted in an overpayment or must be repaid, Sellers shall be
responsible for the repayment of said monies (and the defense of such actions),
except to the extent that the repayment obligation was an Assumed Liability. If
Buyer suffers any deduction to or offset against amounts due Buyer of funds
previously paid or credited to any Seller or the Business in respect of services
rendered prior to the Closing Date, Sellers shall immediately pay to Buyer the
amounts so billed or offset upon demand, except to the extent that such amounts
represent billings in excess of cost and revenues recognized under the Assumed
Contracts. Any amounts due Buyer by Sellers, or due Sellers by Buyer, may be
offset against monies or other funds held by the party entitled to payment of
such amounts.
10.12. Severability. If any provision of this Agreement is held or
determined to be illegal, invalid or unenforceable under any present or future
law, and if the rights or obligations of any party under this Agreement will not
be materially and adversely affected thereby: (a) such provision will be fully
severable; (b) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof; (c) the
remaining provisions of this Agreement will remain in full force and effect and
will not be affected by the illegal, invalid or unenforceable provision or by
its severance herefrom; and (d) in lieu of such illegal, invalid or
unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible.
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<PAGE> 70
10.13. Entire Agreement; Counterparts; Amendment. This Agreement,
together with the Sale Order (but excluding Exhibit B to the Sale Order),
supersedes all prior or contemporaneous contracts, agreements and understandings
and constitutes the entire agreement of whatsoever kind or nature existing
between or among the parties representing the subject matter of this Agreement
and no party shall be entitled to benefits other than those specified herein. As
between or among the parties, any oral or written representation, agreement or
statement not expressly incorporated herein, whether given prior to or on the
Effective Date, shall be of no force and effect unless and until made in writing
and signed by the parties on or after the Effective Date. The representations
and warranties set forth in this Agreement shall survive the Closing and remain
in full force and effect as provided in Article 9, and shall survive the
execution and delivery of all other agreements, instruments or other documents
described, referenced or contemplated herein (including any deed, assignment,
transfer or conveyance to Buyer) and shall not be merged herewith or therewith.
Each representation, warranty and covenant contained in this Agreement has
independent significance and if any party has breached any representation,
warranty or covenant contained herein in any respect, the fact that there exists
another representation, warranty or covenant relating to the same subject matter
(regardless of the relative level of specificity) that such party has not
breached shall not detract from or mitigate the fact that the party is in breach
of the first representation, warranty or covenant. This Agreement may be
executed in two or more counterparts, each and all of which shall be deemed an
original and all of which together shall constitute but one and the same
instrument. This Agreement may not be amended except in a written instrument
executed the parties.
10.14. Drafting. No provision of this Agreement shall be interpreted
for or against any Person on the basis that such Person was the draftsman of
such provision, and no presumption or burden of proof shall arise favoring or
disfavoring any Person by virtue of the authorship of any provision of this
Agreement.
10.15. Confidentiality. The provisions of the confidentiality agreement
between Buyer and Sellers dated June 12, 2000 are hereby incorporated by this
reference as if fully set forth herein, and shall apply and remain in full force
and effect through the Closing Date.
10.16. Publicity. No party to this Agreement shall prior to the
Closing, without prior consultation with the other parties to the extent
practicable under the circumstances taking into account applicable laws and
stock exchange requirements, make any public disclosure with respect to the
Transaction, any negotiations or discussions concerning the Transaction or the
existence of this Agreement.
[Signature Pages Follow]
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<PAGE> 71
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in multiple originals by their duly authorized officers as of the
Effective Date.
STONE & WEBSTER, INCORPORATED THE SHAW GROUP INC.
By: By:
------------------------------ -------------------------------
Title: Title:
------------------------------ ----------------------------
64
<PAGE> 72
DOMESTIC SUBSIDIARIES
1435 ENCLAVE PARKWAY CORPORATION
By:
-------------------------------
Title:
----------------------------
245 SUMMER STREET CORPORATION
By:
-------------------------------
Title:
----------------------------
AEC INTERNATIONAL PROJECTS, INC.
By:
-------------------------------
Title:
----------------------------
ASSOCIATED ENGINEERS & CONSULTANTS, INC.
By:
-------------------------------
Title:
----------------------------
AUBURN VPS GENERAL CORPORATION
By:
-------------------------------
Title:
----------------------------
65
<PAGE> 73
AUBURN VPS LIMITED CORPORATION
By:
-------------------------------
Title:
----------------------------
BELMONT CONSTRUCTORS COMPANY, INC.
By:
-------------------------------
Title:
----------------------------
BELMONT CONSTRUCTORS COMPANY, L.P.
By:
-------------------------------
Title:
----------------------------
COMMERCIAL COLD STORAGE, INC.
By:
-------------------------------
Title:
----------------------------
DSS ENGINEERS, INC.
By:
-------------------------------
Title:
----------------------------
ENCLAVE PARKWAY REALTY, INC.
By:
-------------------------------
Title:
----------------------------
66
<PAGE> 74
FAST SUPPLY CORPORATION
By:
-------------------------------
Title:
----------------------------
GSES HOLDING, LLC
By:
-------------------------------
Title:
----------------------------
INTERNATIONAL ENGINEERS & CONSTRUCTORS, INCORPORATED
By:
-------------------------------
Title:
----------------------------
NORDIC HOLDINGS, INC.
By:
-------------------------------
Title:
----------------------------
NORDIC INVESTORS, INC.
By:
-------------------------------
Title:
----------------------------
NORDIC RAIL SERVICES, INC.
By:
-------------------------------
Title:
----------------------------
67
<PAGE> 75
NORDIC REFRIGERATED SERVICES, INC.
By:
-------------------------------
Title:
----------------------------
NORDIC REFRIGERATED SERVICES, LIMITED PARTNERSHIP
By:
-------------------------------
Title:
----------------------------
NORDIC TRANSPORTATION SERVICES, INC.
By:
-------------------------------
Title:
----------------------------
POLAR TRANSPORT, INC.
By:
-------------------------------
Title:
----------------------------
POWER TECHNOLOGIES, INC.
By:
-------------------------------
Title:
----------------------------
PRESCIENT TECHNOLOGIES, INC.
By:
-------------------------------
Title:
----------------------------
68
<PAGE> 76
PROJECTS ENGINEERS, INCORPORATED
By:
-------------------------------
Title:
----------------------------
ROCKTON ASSOCIATES, INCORPORATED
By:
-------------------------------
Title:
----------------------------
ROCKTON TECHNICAL SERVICES CORPORATION
By:
-------------------------------
Title:
----------------------------
SABAL CORPORATION
By:
-------------------------------
Title:
----------------------------
SABAL REAL ESTATE CORPORATION
By:
-------------------------------
Title:
----------------------------
SAW CONSULTING SERVICES, INC.
By:
-------------------------------
Title:
----------------------------
69
<PAGE> 77
SC WOOD, LLC
By:
-------------------------------
Title:
----------------------------
SELECTIVE TECHNOLOGIES CORPORATION
By:
-------------------------------
Title:
----------------------------
SLEEPER STREET REALTY CORPORATION
By:
-------------------------------
Title:
----------------------------
SNW BINGHAMTON I, LP
By:
-------------------------------
Title:
----------------------------
SNW BINGHAMTON II, LP
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER ABU DHABI (UNITED ARAB EMIRATES), INC.
By:
-------------------------------
Title:
----------------------------
70
<PAGE> 78
STONE & WEBSTER ASIA CORPORATION
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER AUBURN CORPORATION
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER BHARAT, INCORPORATED
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER BINGHAMTON CORPORATION
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER CIVIL AND TRANSPORTATION SERVICES, INC.
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER CONSTRUCTION COMPANY, INC.
By:
-------------------------------
Title:
----------------------------
71
<PAGE> 79
STONE & WEBSTER DEVELOPMENT CORPORATION
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER DOMINICAN REPUBLIC, INCORPORATED
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER ENGINEERING CORPORATION
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER ENGINEERS AND CONSTRUCTORS, INC.
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER FAR EAST TECHNICAL SERVICES CORP.
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER INDONESIA CORPORATION
By:
-------------------------------
Title:
----------------------------
72
<PAGE> 80
STONE & WEBSTER INDUSTRIAL TECHNOLOGY CORPORATION
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER INTER-AMERICAN CORPORATION
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER INTERNATIONAL CORPORATION
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER INTERNATIONAL PROJECTS CORPORATION
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER INTERNATIONAL SALES CORPORATION
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER ITALIA, INCORPORATED
By:
-------------------------------
Title:
----------------------------
73
<PAGE> 81
STONE & WEBSTER KOREA CORPORATION
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER KUWAIT, INCORPORATED
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER MANAGEMENT CONSULTANTS, INC.
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER MICHIGAN, INC.
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER MIDDLE EAST ENGINEERING SERVICES CORPORATION
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER OF ARGENTINA CORPORATION
By:
-------------------------------
Title:
----------------------------
74
<PAGE> 82
STONE & WEBSTER OF MEXICO ENGINEERING CORPORATION
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER OIL COMPANY, INC.
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER OPERATING CORPORATION
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER OVERSEAS CONSULTANTS, INC.
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER OVERSEAS DEVELOPMENT CORPORATION
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER OVERSEAS GROUP, INC.
By:
-------------------------------
Title:
----------------------------
75
<PAGE> 83
STONE & WEBSTER PACIFIC CORPORATION
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER POWER ENGINEERING CORPORATION
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER POWER PROJECTS CORPORATION
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER PROCUREMENT CORPORATION
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER PUERTO RICO, INCORPORATED
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER SAUDI ARABIA, INCORPORATED
By:
-------------------------------
Title:
----------------------------
76
<PAGE> 84
STONE & WEBSTER TAIWAN CORPORATION
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER TECHNOLOGY CORPORATION
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER WALLINGFORD CORPORATION
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER WORLDWIDE ENGINEERING CORPORATION
By:
-------------------------------
Title:
----------------------------
SWL CORPORATION
By:
-------------------------------
Title:
----------------------------
77
<PAGE> 85
FOREIGN SUBSIDIARIES
STONE & WEBSTER ANADOLU MOHENDISLIK LTD. SIRKETI
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER CONSTRUCTION LIMITED
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER ENGINEERING AND FIELD SERVICES LIMITED
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER ENGINEERING LIMITED
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER GROUP LIMITED
By:
-------------------------------
Title:
----------------------------
78
<PAGE> 86
STONE & WEBSTER MANAGEMENT CONSULTANTS LIMITED
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER SERVICES LIMITED
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER SERVICES SDN BHD
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER TECHNOLOGY B.V.
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER THAILAND LIMITED
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER INDIA LIMITED
By:
-------------------------------
Title:
----------------------------
79
<PAGE> 87
INTERNATIONAL ASSOCIATES (CAYMAN) LIMITED
By:
-------------------------------
Title:
----------------------------
ADVANCED TECHNOLOGIES (CAYMAN) LIMITED
By:
-------------------------------
Title:
----------------------------
PROCESS ENGINEERS (CAYMAN) LIMITED
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER DO BRAZIL LIMITADA
By:
-------------------------------
Title:
----------------------------
STONE & WEBSTER CANADA LIMITED
By:
-------------------------------
Title:
----------------------------
ROCKTON FIELD SERVICES OF CANADA LTD.
By:
-------------------------------
Title:
----------------------------
80
