U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
DATE OF REPORT:
(Date of earliest event reported)
January 6, 1998
MONROC, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-23880 87-0436697
(State or other jurisdiction of (Commission file number) (I.R.S. employer
incorporation or organization) identification no.)
P.O. Box 537, 1730 Beck Street
Salt Lake City, Utah 84116
(Address of principal executive offices)
(801) 359-3701
(Registrant's telephone number, including area code)
______________________________
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Item 5. Other Events
Acquisition of Treasure Valley Concrete, Inc.
On January 6, 1998, Monroc, Inc., a Delaware corporation (the
"Company") acquired all of the outstanding capital stock of the privately held
Treasure Valley Concrete, Inc., an Idaho corporation ("Treasure Valley
Concrete") for $3.35 million. Treasure Valley Concrete produces and sells
aggregates products and ready-mix concrete in Idaho. Treasure Valley Concrete
had annual revenues of approximately $7 million in 1997. The acquisition of
Treasure Valley Concrete increases the Company's presence in the Idaho market.
The company issued a press release on January 8, 1998 regarding this
transaction. A copy of which is attached hereto as an exhibit.
Page 2 of 4
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MONROC, INC.
(Registrant)
By: /s/ L. William Rands
-------------------------
L. William Rands
Its: Vice President --Finance,
Treasurer and Secretary
Date: January 12, 1998
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INDEX TO EXHIBITS
Exhibit No.
2.1 Stock Purchase Agreement (w/o Exhibits)
99.1 Press Release issued and dated January 8, 1998
Page 4 of 4
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is entered into this
6th day of January, 1998, by and among Monroc, Inc., a Delaware corporation
(the "Buyer"), and Treasure Valley Concrete, Inc., an Idaho corporation
("Treasure Valley") and Donald James Nelson, the sole shareholder of Treasure
Valley (the "Seller"). The Buyer, Treasure Valley and the Seller are referred
to collectively herein as the "Parties".
This Agreement contemplates a transaction in which the Buyer will
purchase from the Seller, and the Seller will sell to the Buyer, all of the
outstanding capital stock of Treasure Valley for cash.
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows:
1. DEFINITIONS
"Adverse Consequences" means all actions, suits, proceedings,
hearings, investigations, charges, complaints, claims, demands, injunctions,
judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs,
amounts paid in settlement, Liabilities, obligations, liens, losses, expenses,
and fees, including court costs and all attorneys' fees and expenses.
"Affiliate" means any person that controls, is controlled by or is
under common control with the Seller.
"Basis" means any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction that forms or could form the basis for
any specified consequence.
"Buyer" has the meaning set forth in the preface above.
"Closing" has the meaning set forth in Section 2.4 below.
"Closing Date" has the meaning set forth in Section 2.4 below.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" means any information concerning the
businesses and affairs of Treasure Valley that is not already generally
available to the public.
"Disclosure Schedules" means the Disclosure Schedules delivered by
the Parties concurrently with the execution and delivery of this Agreement.
Disclosure Schedules shall identify exceptions to the representations and
warranties made herein with particularity and shall identify all relevant
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facts. The Disclosure Schedules will be arranged in paragraphs corresponding
to the lettered and numbered paragraphs of this Agreement. Nothing in the
Disclosure Schedules shall be deemed adequate to disclose an exception to a
representation or warranty made herein, however, unless the Disclosure
Schedules identify the exception with particularity and describe the relevant
facts in detail. Without limiting the generality of the foregoing, the mere
listing (or inclusion of a copy) of a document or other item shall not be
deemed adequate to disclose an exception to a representation or warranty made
herein (unless the representation or warranty has to do with the existence of
the document or other item itself).
"Employee Benefit Plan" has the meaning set forth in ERISA section
3(3).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA
section 3(1).
"Environment" means soil, land, surface or subsurface strata,
surface waters (including navigable waters, ocean waters, streams, ponds,
drainage basins, and wetlands), ground waters, drinking water supply, stream
sediments, ambient air (including indoor air), plant and animal life or
natural resource.
"Environmental, Health, and Safety Liabilities" means any cost,
damage, expense, liability, obligation, or other responsibility arising from
any violation of or non-compliance with, any Environmental, Health, and Safety
Law and consisting of or relating to: (a) any environmental, health, or
safety matters or conditions (including on-site or off-site contamination,
occupational safety and health, and regulation of chemical substances
including their fractions, any admixtures or chemical products); (b) fines,
penalties, judgments, awards, settlements, legal or administrative
proceedings, damages (including attorney's fees), losses, claims, demands and
response, investigative, remedial, or inspection costs and expenses arising
under Environmental, Health, and Safety Law; (c) financial responsibility
under Environmental, Health, and Safety Law for remedial action costs, cleanup
costs or corrective action, including any investigation, cleanup, removal,
containment, or other remediation or response actions ("Cleanup") required by
applicable Environmental, Health, and Safety Law (whether or not such Cleanup
has been required or requested by any Governmental Body or any other Person)
and for any natural resource damages; or (d) any other compliance, corrective,
investigative, or remedial measures required under Environmental, Health, and
Safety Law. For purposes of this definition, the terms "removal," "remedial,"
and "response action," include the types of activities covered by the United
States Comprehensive Environmental Response, Compensation, and Liability Act,
42 U.S.C. section 9601 et. seq., as amended ("CERCLA"), the Idaho Land
Remediation Act, Idaho Code section 39.7201 et. seq., as amended, and the
Idaho Hazardous Substances Emergency Response Act, Idaho Code section 39-7101
et. seq., as amended.
"Environmental, Health, and Safety Law" means any legal requirement
that requires or relates to:
(a) advising appropriate authorities, employees, and the public
of intended or actual releases or pollutants or hazardous substances or
materials, violations or discharge limits, or other prohibitions and of the
commencements of activities, such as resource extraction or construction, that
do or could have significant impact on the Environment;
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(b) preventing or reducing to acceptable levels the release of
pollutants or Hazardous Materials or substances into the Environment;
(c) reducing the quantities, preventing the Release, or
minimizing the hazardous characteristics of wastes that are generated;
(d) assuring that products are designed, formulated, packaged,
and used so that they do not present unreasonable risks to human health or the
Environment when used or disposed of;
(e) protecting resources, species, or ecological amenities;
(f) reducing to acceptable levels the risks inherent in the
transportation of hazardous substances, pollutants, oil, its fractions or
synthetic substitutes, or other potentially harmful substances;
(g) cleaning up pollutants that have been released, preventing
the threat of release, or paying the costs of such clean up or prevention;
(h) making responsible parties pay private parties, or groups of
them, for damages done to their health or the Environment, or permitting self-
appointed representatives of the public interest to recover for injuries done
to public assets; or
(i) providing safe and healthful working conditions and to
reduce occupational safety and health hazards, including mining safety and
health.
"Environmental Permit" means any permit, license, approval,
consent, or authorization issued by a federal, state, or local government
entity concerning the Environment or any Environmental, Health, and Safety
Liability.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"Facilities" means the Property and any buildings, structures,
machinery or equipment on or affixed to the Property.
"Financial Statement" means any report summarizing the financial
condition or financial results of a person or organization on any date or for
any period. Financial Statements include the balance sheet, income statement,
statement of cash flow, and statement of changes in shareholder's equity.
"GAAP" means United States generally accepted accounting
principles as in effect from time to time applied on a consistent basis.
"Hazardous Activity" means the distribution, generation, handling,
importing, management, manufacturing, processing, production, refinement,
Release, storage, transfer, transportation, treatment, or use (including any
withdrawal or other use of groundwater) of Hazardous Materials in, on, under,
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about, or from the Facilities or any part thereof into the Environment.
"Hazardous Material" means any pollutant, toxic substance,
hazardous waste, hazardous material, hazardous substance, or oil listed or
defined in or pursuant to any Environmental, Health, and Safety Law, whether
existing as of the date hereof, previously enforced, or subsequently enacted,
including petroleum and all derivatives thereof or synthetic substitutes
therefor and asbestos or asbestos-containing materials.
"Indemnified Party" has the meaning set forth in Section 8.4
below.
"Indemnifying Party" has the meaning set forth in Section 8.4
below.
"Intellectual Property" means (a) all inventions (whether
patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications, and patent
disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions, and reexaminations thereof, (b)
all trademarks, service marks, trade dress, logos, trade names, and corporate
names, together with all translations, adaptations, derivations, and
combinations thereof and including all goodwill associated therewith, and all
applications, registrations, and renewals in connection therewith, (c) all
copyrightable works, all copyrights, and all applications, registrations, and
renewals in connection therewith, (d) all mask works and all applications,
registrations, and renewals in connection therewith, (e) all trade secrets and
confidential business information (including ideas, research and development,
know-how, formulas, compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, specifications, customer and
supplier lists, pricing and cost information, and business and marketing plans
and proposals), (f) all computer software (including data and related
documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium).
"Inventory" means (a) goods held for sale or lease or furnished
under contracts of service; and (b) raw materials, work in progress or
materials used or consumed in Treasure Valley's business.
"Knowledge" means actual knowledge after full investigation and
inquiry. For purposes of this definition, the Knowledge of the directors,
officers and employees of Treasure Valley is attributable to the Seller.
"Liability" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
"Most Recent Balance Sheet" means the balance sheet contained
within the Most Recent Financial Statements.
"Most Recent Financial Statements" has the meaning set forth in
Section 4.8 below.
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"Most Recent Fiscal Month End" has the meaning set forth in
Section 4.8 below.
"Most Recent Fiscal Year End" has the meaning set forth in Section
4.8 below.
"Nelson Construction" means Nelson Construction Company, an Idaho
corporation.
"Ordinary Course of Business" means the business of producing and
selling to the government, the residential market or unrelated parties in the
construction industry (dealing at arms length), ready-mix concrete, sand and
gravel products, including accessories for the concrete trade in accordance
with Treasure Valley's past custom and practice of dealing with such unrelated
parties at arms length (including with respect to size, quantity and
frequency). For purposes of this definition and without limiting the
generality of the foregoing, all transactions between Treasure Valley and the
Seller or any entity controlled by the Seller or any blood relative of the
Seller shall not be deemed to be made in the Ordinary Course of Business.
"Part[ies]" has the meaning set forth in the preface above.
"Person" means an individual, a partnership, a limited liability
company, a corporation, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization, or a governmental entity (or
any department, agency, or political subdivision thereof).
"Post-Closing Financial Statements" means the Financial Statements
for the fiscal year ended December 31, 1997 and for any portion of the period
beginning before the Closing Date.
"Property" means the real property described in Section 4.13.1 of
the Disclosure Schedules.
"Purchase Price" has the meaning set forth in Section 2.2 below.
"Release" means any spilling, leaking, emitting, discharging,
depositing, escaping, leaching, dumping, or other releasing into the
Environment, whether intentional or unintentional, in violation of, or not in
compliance with, any Environmental, Health, and Safety Law.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's, materialmen's,
and similar liens, (b) liens for Taxes not yet due and payable, (c) purchase
money liens and liens securing rental payments under capital lease
arrangements, and (d) other liens arising in the Ordinary Course of Business
and not incurred in connection with the borrowing of money.
"Seller" has the meaning set forth in the preface above.
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"Site" means the Property and all structures, operations and
Facilities located or conducted thereon.
"Survey" means a current survey prepared by a licensed surveyor
and conforming to current ALTA Minimum Detail Requirements for Land Title
Surveys, and showing access affirmatively to public streets and roads.
"Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, Environmental, Health, and Safety (including taxes
under section 59A of the Code), customs duties, capital stock, franchise,
profits, withholding, social security (or similar), unemployment, disability,
real property, personal property, sales, use, transfer, registration, value
added, alternative or add-on minimum, estimated, or other tax of any kind
whatsoever, including any interest, penalty, or addition thereto, whether
disputed or not.
"Tax Authority" means the Internal Revenue Service and any other
domestic or foreign governmental authority responsible for the administration
of any Taxes.
"Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"Third Party Claim" has the meaning set forth in Section 8.4.1
below.
"Threat of Release" means a substantial likelihood of a Release
which may require action to prevent or mitigate damage to the Environment
which may result from such Release.
"Treasure Valley" means Treasure Valley Concrete, Inc., an Idaho
corporation.
"Treasure Valley Shares" means any share of the Common Stock, par
value $1.00 per share, of Treasure Valley.
2. PURCHASE AND SALE OF TARGET SHARES
2.1 Basic Transaction. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to purchase from the Seller,
and the Seller agrees to sell to the Buyer, all of the outstanding Treasure
Valley Shares for the consideration specified below in this Section 2.
2.2 Purchase Price. The Buyer agrees to pay to the Seller at
the Closing, or as provided below, to certain third parties on the Seller's
behalf, an aggregate of Three Million Three Hundred Fifty Thousand Dollars
($3,350,000) (the "Purchase Price") in cash, payable by wire transfer or
delivery of other immediately available funds as follows:
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2.2.1 One Hundred Sixty-Five Thousand Nine Hundred Twenty-One
and 56/100 Dollars ($165,921.56) to Nelson Construction Company in
satisfaction of the obligation more fully described in Section 4.17 of the
Disclosure Schedules;
2.2.2 Six Thousand Four Hundred Twenty-Nine Dollars ($6,429)
to CANVEST, Inc., an Idaho corporation, in satisfaction of the obligation more
fully described in Section 4.17 of the Disclosure Schedules;
2.2.3 One Hundred Forty-Three Forty-Nine and 64/100 Dollars
($143,049.64) to U.S. Bank Corp., in satisfaction of the obligation more fully
described in Section 4.17 of the Disclosure Schedules; and
2.2.4 Any and all remaining amounts of the Purchase Price to
the Seller.
2.3 Allocation of Portion of Purchase Price to Consulting
Agreement and Non-Competition Agreement. Five Thousand Dollars ($5,000) of
the Purchase Price is allocated by the Parties to the covenant not to compete
to be entered into by the Seller and Treasure Valley. The form of Consulting
and Non-Competition Agreement to be entered into by and between Treasure
Valley and the Seller is attached hereto as Exhibit A. The Parties agree that
the Buyer may allocate such amounts to said covenant not to compete and
amortize such amounts over the life of said covenant not to compete. The
Seller agrees not to take a position on any tax return that would be
inconsistent with the contemplated tax treatment of such portion of the
Purchase Price by the Buyer on any tax return.
2.4 The Closing. The closing of the transactions contemplated
by this Agreement (the "Closing"), shall take place at the offices of Pioneer
Title of Ada County in Boise, Idaho at 1:00 p.m. local time) on January 5,
1998 or on such other date as the Parties may mutually determine (the "Closing
Date"). Subject to the provisions of Section 10 below, failure to complete
the Closing on the date and time and at the location determined by the Parties
will not terminate this Agreement or relieve any of the Parties of their
respective obligations hereunder.
2.5 Deliveries at the Closing. At the Closing, (i) the Seller
will deliver to the Buyer the various certificates, instruments, and documents
referred to in Section 7 below, (ii) the Buyer will deliver to the Seller the
various certificates, instruments, and documents referred to in Section 7
below, (iii) the Seller will deliver to the Buyer the stock certificate or
certificates representing all of his Treasure Valley Shares, endorsed in blank
or accompanied by duly executed assignment documents and all other documents,
instruments and agreements reasonably required by the Buyer to close the
transactions contemplated herein, and (iv) the Buyer will deliver to the
Seller the consideration specified in Section 2.2 above.
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3. REPRESENTATIONS AND WARRANTIES CONCERNING THE TRANSACTION
3.1 Representations and Warranties of the Seller.
3.1.1 Representations and Warranties of the Sellers. The
Seller represents and warrants to the Buyer that the statements contained in
this Section 3.1 are correct and complete as of the date of this Agreement,
and will be correct and complete in all material respects as of the Closing
Date (as though made then and as though the Closing Date were substituted for
the date of this Agreement throughout this Section 3.1) except as set forth in
Section 3 of the Disclosure Schedules attached hereto as Exhibit B.
3.1.2 Authorization of Transaction. The Seller has full
power and authority to execute and deliver this Agreement and to perform his
obligations hereunder. This Agreement constitutes the valid and legally
binding obligation of the Seller, enforceable in accordance with its terms and
conditions. The Seller need not give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or
governmental agency in order to consummate the transactions contemplated by
this Agreement.
3.1.3 Noncontravention. Neither the execution and the
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (i) violate any constitution, statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which the
Seller is subject or, (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Seller is a party or by which he is bound or to which any of the Seller's
assets is subject.
3.1.4 Brokers' Fees. The Seller has no Liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which the Buyer
could become liable or obligated.
3.1.5 Treasure Valley Shares. The Seller holds of record
and owns beneficially Five Hundred (500) shares of Treasure Valley Shares,
free and clear of any restrictions on transfer (other than any restrictions
under the Securities Act and state securities laws), Taxes, Security
Interests, options, warrants, purchase rights, contracts, commitments,
equities, claims, and demands. The Treasure Valley Shares owned by the Seller
constitute all of the issued and outstanding Treasure Valley Shares. The
Seller is not a party to any option, warrant, purchase right, or other
contract or commitment that could require the Seller to sell, transfer, or
otherwise dispose of any capital stock of Treasure Valley (other than this
Agreement). The Seller is not a party to any voting trust, proxy, or other
agreement or understanding with respect to the voting of any capital stock of
Treasure Valley.
3.2 Representations and Warranties of the Buyer. The Buyer
represents and warrants to the Seller that the statements contained in this
Section 3.2 are correct and complete as of the date of this Agreement and will
be correct and complete in all material respects as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date
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of this Agreement throughout this Section 3.2) except as set forth in Section
3.2 of the Disclosure Schedules attached hereto.
3.2.1 Organization of the Buyer. The Buyer is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Delaware.
3.2.2 Authorization of Transaction. The Buyer has full
power and authority (including full corporate power and authority) to execute
and deliver this Agreement and to perform its obligations hereunder. This
Agreement constitutes the valid and legally binding obligation of the Buyer,
enforceable in accordance with its terms and conditions. The Buyer need not
give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order to
consummate the transactions contemplated by this Agreement.
3.2.3 Noncontravention. Neither the execution and the
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (i) violate any constitution, statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which the
Buyer is subject or any provision of its charter or bylaws or (ii) conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract, lease,
license, instrument, or other arrangement to which the Buyer is a party or by
which it is bound or to which any of its assets is subject.
3.2.4 Brokers' Fees. The Buyer has no Liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which the
Seller could become liable or obligated.
3.2.5 Investment. The Buyer is not acquiring Treasure
Valley Shares with a view to or for sale in connection with any distribution
thereof within the meaning of the Securities Act.
4. REPRESENTATIONS AND WARRANTIES CONCERNING TREASURE VALLEY
4.1 Representations and Warranties of the Seller. The Seller
represents and warrants to the Buyer that each statement contained in this
Section 4 is correct and complete as of the date of this Agreement, except as
set forth in the corresponding sections of the Disclosure Schedules.
4.2 Organization, Qualification, and Corporate Power. Treasure
Valley is a corporation duly organized, validly existing, and in good standing
under the laws of the jurisdiction of the State of Idaho. Treasure Valley is
duly authorized to conduct business and is in good standing under the laws of
each jurisdiction where such qualification is required. Except as set forth
in Section 4.2 of the Disclosure Schedules, Treasure Valley has full corporate
power and authority and all licenses, permits, and authorizations necessary to
carry on the businesses in which it is engaged and in which it presently
proposes to engage and to own and use the properties owned and used by it.
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Section 4.2 of the Disclosure Schedules lists the directors and officers of
Treasure Valley. The Seller has delivered to the Buyer certified copies of
the certificate of incorporation and bylaws of Treasure Valley (as amended to
date). Except as set forth in Section 4.2 of the Disclosure Schedules, the
minute book (containing the records of meetings of the stockholders, the board
of directors, and any committees of the board of directors), the stock
certificate book, and the stock record book of Treasure Valley are correct and
complete. Treasure Valley is not in default under or in violation of any
provision of its charter or bylaws.
4.3 Capitalization. The entire authorized capital stock of
Treasure Valley consists of Five Thousand (5,000) shares of Common Stock,
$1.00 par value per share (the "Treasure Valley Shares") of which Five Hundred
(500) shares are issued and outstanding and Five Hundred (500) shares are held
as treasury shares. All of the issued and outstanding Treasure Valley Shares
have been duly authorized, are validly issued, fully paid, and nonassessable,
and are held of record by the Seller. There are no outstanding or authorized
options, warrants, purchase rights, subscription rights, conversion rights,
exchange rights, or other contracts or commitments that could require Treasure
Valley to issue, sell, or otherwise cause to become outstanding any of its
capital stock or other securities. There are no outstanding or authorized
stock appreciation, phantom stock, profit participation, or similar rights
with respect to Treasure Valley. There are no voting trusts, proxies, or other
agreements or understandings with respect to the voting of the capital stock
of Treasure Valley.
4.4 Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which Treasure Valley is subject
or any provision of the charter or bylaws of Treasure Valley or (ii) conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract, lease,
license, instrument, or other arrangement to which Treasure Valley is a party
or by which it is bound or to which any of its assets is subject (or result in
the imposition of any Security Interest upon any of its assets). Treasure
Valley does not need to give any notice to, make any filing with, or obtain
any authorization, consent, or approval of any government or governmental
agency in order for the Parties to consummate the transactions contemplated by
this Agreement.
4.5 Brokers' Fees. Treasure Valley does not have any Liability
or obligation to pay any fees or commissions to any broker, finder, or agent
with respect to the transactions contemplated by this Agreement.
4.6 Title to Assets. Treasure Valley has good and marketable
title to, or a valid leasehold interest in, the personal properties and assets
used by it, located on its premises, or shown on the Most Recent Financial
Statements (as defined below) or acquired after the date thereof, free and
clear of all Security Interests, except: (i) as shown in Section 4.6 of the
Disclosure Schedules; and (ii) for properties and assets disposed of in the
Ordinary Course of Business since the date of the Most Recent Financial
Statements.
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4.7 Subsidiaries. Treasure Valley has no Subsidiaries.
4.8 Financial Statements. Attached hereto as Exhibit C are the
following Financial Statements: (i) unaudited balance sheets and statements of
income, changes in stockholders' equity, and cash flow as of and for the
fiscal years ended December 31, 1996, December 31, 1995, and December 31, 1994
(the "Most Recent Fiscal Year End") for Treasure Valley; and (ii) unaudited
balance sheets and statements of income, changes in stockholders' equity, and
cash flow (the "Most Recent Financial Statements") as of and for the ten
months ended October 31, 1997 (the "Most Recent Fiscal Month End") for
Treasure Valley. The Financial Statements (including the notes thereto) have
been prepared in accordance with GAAP applied on a consistent basis throughout
the periods covered thereby, present fairly the financial condition of
Treasure Valley as of such dates and the results of operations of Treasure
Valley for such periods, are correct and complete, and are consistent with the
books and records of Treasure Valley (which books and records are correct and
complete).
4.9 Events Subsequent to Most Recent Fiscal Month End. Since
the Most Recent Fiscal Month End, there has not been any material adverse
change in the business, financial condition, operations, results of
operations, or future prospects of Treasure Valley. Except as set forth in
Section 4.9 of the Disclosure Schedules and without limiting the generality of
the foregoing, since the Most Recent Fiscal Month End:
4.9.1 Treasure Valley has not sold, leased, transferred,
or assigned any of its assets, tangible or intangible, to any Person outside
the Ordinary Course of Business;
4.9.2 Treasure Valley has not entered into any agreement,
contract, lease, or license (or series of related agreements, contracts,
leases, and licenses) with any Person involving more than $25,000 in the
aggregate;
4.9.3 No Person (including Treasure Valley) has
accelerated, terminated, modified, or cancelled any agreement, contract,
lease, or license (or series of related agreements, contracts, leases, and
licenses) involving more than $25,000 in the aggregate to which Treasure
Valley is a party or by which it is bound;
4.9.4 Treasure Valley has not imposed any Security
Interest upon any of its assets, tangible or intangible;
4.9.5 Treasure Valley has not made any capital
expenditure (or series of related capital expenditures) to any Person
involving more than $25,000;
4.9.6 Treasure Valley has not made any capital investment
in, any loan to, or any acquisition of the securities or assets of, any Person
(or series of related capital investments, loans, and acquisitions) involving
more than $10,000 in the aggregate;
4.9.7 Treasure Valley has not issued any note, bond, or
other debt security or created, incurred, assumed, or guaranteed any
indebtedness for borrowed money or capitalized lease obligation either
involving more than $10,000 singly or $25,000 in the aggregate;
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4.9.8 Treasure Valley has not delayed or postponed the
payment of accounts payable and other Liabilities;
4.9.9 Treasure Valley has not cancelled, compromised,
waived, or released any right or claim (or series of related rights and
claims) relating to any Person involving more than $10,000 in the aggregate;
4.9.10 Treasure Valley has not granted any license or
sublicense to any Person of any rights under or with respect to any
Intellectual Property;
4.9.11 There has been no change made or authorized in the
charter or bylaws of Treasure Valley;
4.9.12 Treasure Valley has not issued, sold, or otherwise
disposed of any of its capital stock or other securities, or granted any
options, warrants, or other rights to purchase or obtain (including upon
conversion, exchange, or exercise) any of its capital stock or other
securities;
4.9.13 Treasure Valley has not declared, set aside, or
paid any dividend or made any distribution with respect to its capital stock
(whether in cash or in kind) or redeemed, purchased, or otherwise acquired any
of its capital stock;
4.9.14 Treasure Valley has not experienced any damage,
destruction, or loss except for normal wear and tear (whether or not covered
by insurance) to its real or personal property involving more than $1,000 in
the aggregate;
4.9.15 Treasure Valley has not made any loan to, or
entered into any other transaction with, any of its directors, officers,
shareholders or employees or Nelson Construction;
4.9.16 Treasure Valley has not entered into any employment
contract or collective bargaining agreement, written or oral, or modified the
terms of any existing such contract or agreement;
4.9.17 Treasure Valley has not granted any increase in the
base compensation of any of its directors, officers, and employees;
4.9.18 Treasure Valley has not adopted, amended, modified,
or terminated any bonus, profit-sharing, retirement, pension, ERISA,
incentive, severance, or other plan, contract, or commitment for the benefit
of any of its directors, officers, and employees (or taken any such action
with respect to any other Employee Benefit Plan);
4.9.19 Treasure Valley has not made any other change in
employment terms for any of its directors, officers, and employees;
4.9.20 Treasure Valley has not made or pledged to make any
charitable or other capital contribution;
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4.9.21 There has not been any other occurrence, event,
incident, action, failure to act, or transaction outside the Ordinary Course
of Business involving Treasure Valley involving more than $1,000 in the
aggregate; and
4.9.22 Except for those transactions and agreements
contemplated in this Agreement, Treasure Valley has not committed to any of
the foregoing.
4.9.23 The Seller shall cause Treasure Valley to accrue or
create adequate reserves on Treasure Valley's books and records to allow the
Buyer to pay all Taxes described in Section 6.6.1 and Section 6.6.2 below.
4.10 Undisclosed Liabilities. Except as set forth in Section
4.10 of the Disclosure Schedules, Treasure Valley has no Liability (and there
is no Basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against Treasure Valley
giving rise to any Liability), except for (i) Liabilities set forth on the
face of the Most Recent Balance Sheet (rather than in any notes thereto) and
(ii) Liabilities which have arisen after the Most Recent Fiscal Month End in
the Ordinary Course of Business (none of which results from, arises out of,
relates to, is in the nature of, or was caused by any breach of contract,
breach of warranty, tort, infringement, or violation of law).
4.11 Legal Compliance. Except as set forth in Section 4.11 of
the Disclosure Schedules, Treasure Valley predecessors and Nelson
Construction, to the extent that it affects Treasure Valley or that any of its
acts or omissions could be attributed to Treasure Valley, have at all times
complied with all applicable laws (including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings, and charges thereunder) of
federal, state, local, and foreign governments (and all agencies thereof), and
no action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed or commenced against any of them alleging any
failure so to comply.
4.12 Tax Matters. Except as set forth in Section 4.12 of the
Disclosure Schedules:
4.12.1 Treasure Valley validly elected to be an "S
corporation" (within the meaning of section 1361(a) (1) of the Code), for
federal income tax purposes as of April 1, 1989, and has maintained its status
as an "S corporation" at all times prior to the Closing Date. Treasure Valley
has validly elected to be an "S corporation" in all state and local
jurisdictions where it would, absent such an election, be subject to corporate
income or franchise tax, and has maintained its status as an "S corporation"
in such jurisdictions at all times thereafter. No state of facts exists or
has existed, which presents or presented a material risk that Treasure
Valley's status as an "S corporation" is or was subject to termination or
revocation. Treasure Valley had "accumulated earnings and profits" (within
the meaning of section 1362(d) (3) (A) of the Code) from periods prior to
April 1, 1989 in an amount not exceeding $400,000.
4.12.2 Treasure Valley has timely filed all Tax Returns
that it was required to file. All such Tax Returns were true, correct and
complete in all respects. All Taxes owed by Treasure Valley or that may
become payable by Treasure Valley (whether or not shown on any Tax Return)
have been paid or accrued or adequate reserves therefore have been established
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on Treasure Valley's Financial Statements. There are no Security Interests on
any of the assets of Treasure Valley that arose in connection with any failure
(or alleged failure) to pay any Tax.
4.12.3 Treasure Valley is not, has not been and prior to
Closing will not be (with or without notice or lapse of time or both) in
violation of any applicable law or regulation relating to the payment or
withholding of Taxes; and Treasure Valley has duly and timely (taking into
account all valid extensions) withheld and paid over to the appropriate Tax
Authorities all amounts required to be so withheld and paid over under either
section 3402 of the Code or section 3405 of the Code (or similar provisions of
state, local or foreign law), for all periods under all applicable laws and
regulations, except for current liabilities as reflected on Treasure Valley's
Financial Statements.
4.12.4 The Seller does not expect any authority to assess
any additional Taxes for any period for which Tax Returns have been filed.
There is no dispute or claim concerning any Tax Liability of Treasure Valley
either (a) claimed or raised by any authority in writing or (b) as to which
the Seller has Knowledge based upon personal contact with any agent of such
authority. Section 4.12.4 of the Disclosure Schedules lists all federal,
state, local, and foreign income Tax Returns filed by or on behalf of Treasure
Valley for taxable periods ended on or after December 31, 1991, indicates
those Tax Returns that have been audited, and indicates those Tax Returns that
currently are the subject of audit. The Seller has delivered to the Buyer
correct and complete copies of all federal income Tax Returns, examination
reports, and statements of deficiencies assessed against or agreed to by
Treasure Valley since December 31, 1991.
4.12.5 For all taxable years ending on or prior to
December 31, 1993 and there are no outstanding agreements, waivers or
arrangements extending any statutory period of limitation, pertaining to any
claim for, or the period for the collection or assessment of, Taxes due from
or with respect to Treasure Valley or that may become payable by Treasure
Valley. No closing agreement pursuant to section 7121 of the Code (or any
predecessor provision) or any similar provision of any state, local or foreign
law has been entered into by or with respect to Treasure Valley. All written
rulings, technical advice memoranda or similar determinations relating to
Taxes issued to Treasure Valley by any Tax Authority have been provided to the
Buyer.
4.12.6 No claims have been asserted in writing against
Treasure Valley by any Tax Authority with respect to any Taxes, and there is
no unpaid deficiency or assessment for Taxes currently outstanding against
Treasure Valley. Neither the Seller nor Treasure Valley has received any
notice of deficiency, proposed deficiency or assessment from any Tax Authority
with respect to Taxes of Treasure Valley. No claim has ever been made by any
Tax Authority in a jurisdiction where Treasure Valley does not file Tax
Returns that it is or may be subject to taxation by that jurisdiction. There
are no outstanding requests, agreements, consents or waivers to extend the
statutory period of limitations applicable to any Taxes or deficiencies
against Treasure Valley, and neither Treasure Valley nor the Seller have been
informed formally or informally that any Tax Authority intends to audit,
challenge or assess Taxes with respect to any Tax Returns filed by Treasure
Valley prior to the Closing Date, except as set forth in Section 4.12.6 of the
Disclosure Schedules.
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4.12.7 There is no basis for any Tax deficiency of the
Seller that can be asserted against Treasure Valley.
4.12.8 No individual being treated by Treasure Valley as
an independent contractor constitutes an employee within the meaning of the
Code. Treasure Valley has not made any payments, is not obligated to make any
payments, and is not a party to any agreement that under certain circumstances
could obligate it to make any payments that will not be deductible under
section 280G of the Code. Treasure Valley has not been a United States real
property holding corporation within the meaning of Section 897(c)(2) of the
Code during the applicable period specified in section 897(c)(1)(A)(ii) of the
Code.
4.12.9 No power of attorney granted by Treasure Valley or
the Seller with respect to any Taxes of Treasure Valley is currently in force.
4.12.10 Section 4.12.10 of the Disclosure Schedules sets
forth the following information with respect to Treasure Valley as of December
31, 1996: (i) the tax basis and book basis of Treasure Valley in its assets;
and (ii) the amount of any earnings from operations, net earnings (or losses),
unused investment or other credit, unused foreign tax credit, or excess
charitable contribution allocable to Treasure Valley.
4.13 Real Property.
4.13.1 Section 4.13.1 of the Disclosure Schedules lists
and describes briefly all real property that Treasure Valley owns or uses in
connection with its business. Except as set forth in Section 4.13.1 of the
Disclosure Schedules, with respect to each such parcel of owned real property:
4.13.1.1 The three parcels of owned real property
listed in Section 4.13.1 of the Disclosure Schedules as subsections C, D and E
respectively, the parcels in Nampa (the "Nampa Property") and the parcel in
Boise (the "Boise Property"), are the only parcels of real property owned by
Treasure Valley.
4.13.1.2 Treasure Valley has good and marketable
title to all real property owned by it, free and clear of any Security
Interest, easement, covenant, or other restriction, except as outlined in
Section 4.13.1 of the Disclosure Schedules, the installments of special
assessments not yet delinquent, rights reserved in federal patents, state or
railroad deeds, building or use restrictions, building and zoning regulations
and ordinances of any governmental unit, and rights of way, easements or other
restrictions visible or of record, and other restrictions which do not impair
the current use, occupancy, or value, or the marketability of title, of the
property subject thereto;
4.13.1.3 There are no pending or threatened
condemnation proceedings, lawsuits, or administrative actions relating to the
property or other matters affecting adversely the current use, occupancy, or
value thereof;
4.13.1.4 The legal description for the parcel
contained in the deed thereof describes such parcel fully and adequately, the
buildings and improvements are located within the boundary lines of the
described parcels of land, are not in violation of applicable setback
requirements, zoning laws, and ordinances (and none of the properties or
buildings or improvements thereon are subject to "permitted non-conforming
use" or "permitted non-conforming structure" classifications), and do not
encroach on any easement which may burden the land, and the land does not
serve any adjoining property for any purpose inconsistent with the use of the
land, and the property is not located within any flood plain or subject to any
similar type restriction for which any permits or licenses necessary to the
use thereof have not been obtained;
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4.13.1.5 All facilities have received all approvals
of governmental authorities (including licenses and permits) required in
connection with the ownership or operation thereof and have been operated and
maintained in accordance with applicable laws, rules, and regulations;
4.13.1.6 There are no leases, subleases, licenses,
concessions, or other agreements, written or oral, granting to any other
Person or Persons the right of use or occupancy of any portion of the parcel
of real property;
4.13.1.7 There are no outstanding options or rights
of first refusal to purchase the parcel of real property, or any portion
thereof or interest therein;
4.13.1.8 No Person is in possession of the parcel
of real property, other than tenants under any leases disclosed in Section
4.13.1 of the Disclosure Schedules who are in possession of space to which
they are entitled;
4.13.1.9 All facilities located on the parcel of
real property are supplied with utilities and other services necessary for the
operation of such facilities, including gas, electricity, water, telephone and
septic system, all of which services are adequate in accordance with all
applicable laws, ordinances, rules, and regulations and are provided via
public roads or via permanent, irrevocable, appurtenant easements benefitting
the parcel of real property; and
4.13.1.10 Each parcel of real property abuts
on and has direct vehicular access to a public road, or has access to a public
road via a permanent, irrevocable, appurtenant easement benefitting the parcel
of real property, and access to the property is provided by paved public
right-of-way with adequate curb cuts available.
4.13.2 Treasure Valley has not leased or subleased any
real property at any time during the past twelve (12) months.
The representations and warranties of Section 4.13 with respect to the Boise
Property shall survive only until the consummation of the real property
exchange described in Section 6.1 of this Agreement.
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4.14 Intellectual Property.
4.14.1 Treasure Valley owns or has the right to use
pursuant to license, sublicense, agreement, or permission all Intellectual
Property necessary for the operation of the businesses of Treasure Valley as
presently conducted. Each item of Intellectual Property owned or used by
Treasure Valley immediately prior to the Closing hereunder will be owned or
available for use by Treasure Valley on identical terms and conditions
immediately subsequent to the Closing hereunder. Treasure Valley has taken
all necessary and desirable action to maintain and protect each item of
Intellectual Property that it owns or uses.
4.14.2 Treasure Valley has not interfered with, infringed
upon, misappropriated, or otherwise come into conflict with any Intellectual
Property rights of third parties, and to the Knowledge of the Seller, Treasure
Valley has never received any charge, complaint, claim, demand, or notice
alleging any such interference, infringement, misappropriation, or violation
(including any claim that any of Treasure Valley must license or refrain from
using any Intellectual Property rights of any third party). To the Knowledge
of the Seller, no third party has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual
Property rights of Treasure Valley.
4.14.3 Treasure Valley has never been issued a patent or
registration with respect to any of its Intellectual Property and Treasure
Valley does not have any pending patent application or application for
registration with respect to any of its Intellectual Property. Treasure
Valley has never granted to any third party a license, agreement or other
permission to use with respect to any of its Intellectual Property (together
with any exceptions). Treasure Valley does not own or license any copyright,
trade name or registered or unregistered trademark.
4.14.4 Treasure Valley does not use any items of
Intellectual Property that any third party owns and that Treasure Valley uses
pursuant to license, sublicense, agreement, or permission.
4.14.5 To the Knowledge of the Seller, Treasure Valley
will not interfere with, infringe upon, misappropriate, or otherwise come into
conflict with, any Intellectual Property rights of third parties as a result
of the continued operation of its businesses as presently conducted and as
presently proposed to be conducted.
4.14.6 The Seller has no Knowledge of any new products,
inventions, procedures, or methods of manufacturing or processing that any
competitors or other third parties have developed which reasonably could be
expected to supersede or make obsolete any product or process of any of
Treasure Valley.
4.15 Tangible Assets. Section 4.15 of the Disclosure Schedules
sets forth a list of the assets other than Inventory, either leased or owned
by Treasure Valley, including but not limited to, all buildings, machinery,
equipment, and other tangible assets necessary for the conduct of its
businesses as presently conducted and as presently proposed to be conducted.
Each such tangible asset is free from defects (patent and latent), has been
maintained in accordance with normal industry practice, is in good operating
condition and repair (subject to normal wear and tear), and is suitable for
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the purposes for which it presently is used and presently is proposed to be
used. Section 4.15 of the Disclosure Schedules also sets forth under a
separate heading a list of all assets, used by Treasure Valley in the conduct
of its business during the past twelve (12) months, but owned by Nelson
Construction, including, but not limited to, buildings, machinery, equipment
and other tangible assets. The representations and warranties of this Section
4.15 shall survive for only a period of thirty (30) days following the
Closing Date.
4.16 Inventory. Section 4.16 of the Disclosure Schedules sets
forth a list of Treasure Valley's Inventory as of November 30, 1997 and
December 9, 1997, including, but not limited to, raw materials and supplies,
manufactured and purchased parts, goods in process, and finished goods. All
of said Inventory is merchantable, and none of which is damaged or defective.
4.17 Contracts. Section 4.17 of the Disclosure Schedules lists
the following contracts and other agreements to which Treasure Valley has been
a party to within the last twelve (12) months:
4.17.1 Any agreement (or group of related agreements) for
the lease of personal property to or from any Person providing for lease
payments in excess of $15,000 per annum;
4.17.2 Any agreement (or group of related agreements) for
the purchase or sale of raw materials, commodities, supplies, products, or
other personal property, or for the furnishing or receipt of services, the
performance of which will extend over a period of more than one year, result
in a material loss to Treasure Valley, or involve consideration in excess of
$25,000;
4.17.3 Any agreement concerning a partnership or joint
venture;
4.17.4 Any agreement (or group of related agreements)
under which it has created, incurred, assumed, or guaranteed any indebtedness
for borrowed money, or any capitalized lease obligation, in excess of $15,000
or under which it has imposed a Security Interest on any of its assets,
tangible or intangible;
4.17.5 Any agreement concerning confidentiality or
noncompetition;
4.17.6 Any agreement with the Seller or Nelson
Construction involving more than $1,000;
4.17.7 Any profit sharing, stock option, stock purchase,
stock appreciation, deferred compensation, severance, or other plan or
arrangement for the benefit of its current or former directors, officers, and
employees;
4.17.8 Any collective bargaining agreement;
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4.17.9 Any agreement for the employment of any individual
on a full-time, part-time, consulting, or other basis providing annual
compensation in excess of $50,000 or providing severance benefits;
4.17.10 Any employment agreement that absent wrongful
conduct by Treasure Valley, it may not terminate without Liability upon thirty
(30) days notice;
4.17.11 Any agreement under which it has advanced or loaned
any amount to any of its directors, officers, and employees;
4.17.12 Any agreement under which the consequences of a
default or termination could have a material adverse effect on the business,
financial condition, operations, results of operations, or future prospects of
Treasure Valley; or
4.17.13 Any other agreement (or group of related
agreements) the performance of which involves consideration in excess of
$25,000.
The Seller has delivered to the Buyer a correct and complete copy of each
written agreement listed in Section 4.17 of the Disclosure Schedules (as
amended to date) and a written summary setting forth the terms and conditions
of each oral agreement referred to in Section 4.17 of the Disclosure
Schedules. Except as set forth on Section 4.17 of the Disclosure Schedules,
with respect to each such agreement: (i) Treasure Valley has not assigned the
agreement to any other Person; (ii) the agreement is legal, valid, binding,
enforceable, and in full force and effect; (iii) the agreement will continue
to be legal, valid, binding, enforceable, and in full force and effect on
identical terms following the consummation of the transactions contemplated
hereby; and (iv) no party is in breach or default, and no event has occurred
which with notice or lapse of time would constitute a breach or default, or
permit termination, modification, or acceleration, under the agreement; (v) no
party has repudiated any provision of the agreement.
4.18 Notes and Accounts Receivable; Notes and Accounts Payable.
Except as set forth on Section 4.18 of the Disclosure Schedules, all notes and
accounts receivable and notes and accounts payable of Treasure Valley are
reflected properly on its books and records, are valid receivables subject to
no setoffs or counterclaims, are current and collectible.
4.19 Powers of Attorney. There are no outstanding powers of
attorney executed on behalf of Treasure Valley.
4.20 Insurance. Section 4.20 of the Disclosure Schedules sets
forth the following information with respect to each insurance policy
(including policies providing property, casualty, liability, and workers'
compensation coverage and bond and surety arrangements) to which Treasure
Valley has been a party, a named insured, or otherwise the beneficiary of
coverage at any time within the past five (5) years:
4.20.1 The name, address, and telephone number of the
agent;
4.20.2 The name of the insurer, the name of the
policyholder, and the name of each covered insured;
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4.20.3 The policy number and the period of coverage;
4.20.4 The scope (including an indication of whether the
coverage was on a claims made, occurrence, or other basis) and amount
(including a description of how deductibles and ceilings are calculated and
operate) of coverage for the current policies only; and
4.20.5 Description of any retroactive premium adjustments
or other loss-sharing arrangements.
Except as set forth in Section 4.20 of the Disclosure Schedules, with respect
to each such insurance policy: (i) the policy is legal, valid, binding,
enforceable, and in full force and effect; (ii) the policy will continue to be
legal, valid, binding, enforceable, and in full force and effect on identical
terms following the consummation of the transactions contemplated hereby;
(iii) neither Treasure Valley nor any other party to the policy is in breach
or default (including with respect to the payment of premiums or the giving of
notices), and no event has occurred which, with notice or the lapse of time,
would constitute such a breach or default, or permit termination,
modification, or acceleration, under the policy; and (iv) no party to the
policy has repudiated any provision thereof. Treasure Valley has been covered
during the past five (5) years by insurance in scope and amount customary and
reasonable for the businesses in which it has engaged during the
aforementioned period. Section 4.20 of the Disclosure Schedules describes any
self-insurance arrangements affecting Treasure Valley.
4.21 Litigation. Section 4.21 of the Disclosure Schedules sets
forth each instance in which Treasure Valley (i) is subject to any outstanding
injunction, judgment, order, decree, ruling, or charge or (ii) is a party or
is threatened to be made a party to any action, suit, proceeding, hearing, or
investigation of, in, or before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction or before any
arbitrator. Section 4.21 of the Disclosure Schedules describes in detail each
action, including the procedural posture of each such action. Except as set
forth in Section 4.21 of the Disclosure Schedules, none of the actions, suits,
proceedings, hearings, and investigations could result in any adverse change
in the business, financial condition, operations, results of operations, or
future prospects of Treasure Valley. To the best Knowledge of the Seller,
there is no reason to believe that any such action, suit, proceeding, hearing,
or investigation may be brought or threatened against Treasure Valley.
4.22 Product Warranty. Each product manufactured, sold, or
delivered by Treasure Valley has been in conformity with all applicable
contractual commitments and all express and implied warranties, and Treasure
Valley has no Liability (and, to the Seller's Knowledge, there is no Basis for
any present or future action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand against it giving rise to any Liability)
for replacement or repair thereof or other damages in connection therewith.
No product manufactured, sold, leased, or delivered by Treasure Valley is
subject to any guaranty, warranty, or other indemnity beyond the applicable
standard terms and conditions of sale set forth in the applicable mix design
and customer purchase order. Section 4.22 of the Disclosure Schedules
includes copies of the standard terms and conditions of sale for Treasure
Valley (containing applicable guaranty, warranty, and indemnity provisions).
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4.23 Product Liability. Except as set forth in Section 4.23 of
the Disclosure Schedules, Treasure Valley has no Liability (and, to the
Seller's Knowledge, there is no Basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand
against Treasure Valley giving rise to any Liability) arising out of any
injury to individuals or property as a result of the ownership, possession, or
use of any product manufactured, sold, leased, or delivered by Treasure
Valley.
4.24 Employees. Except as set forth in Section 4.24 of the
Disclosure Schedules, to the Knowledge of the Seller, no executive, key
employee, or group of employees has any plans to terminate employment with
Treasure Valley. Treasure Valley is not a party to or bound by any collective
bargaining agreement, nor has Treasure Valley experienced any strikes,
grievances, claims of unfair labor practices, or other collective bargaining
disputes. Treasure Valley has not committed any unfair labor practice. The
Seller has no Knowledge of any organizational effort presently being made or
threatened by or on behalf of any labor union with respect to employees of
Treasure Valley.
4.25 Employee Benefits.
4.25.1 Section 4.25 of the Disclosure Schedules lists each
Employee Benefit Plan that Treasure Valley maintains or to which Treasure
Valley contributes.
4.25.1.1 The three plans listed in Section 4.25 of
the Disclosure Schedules, the Associated General Contractors Money Purchase
Pension Trust, the group medical, health and life insurance plan sponsored by
the Associated General Contractors of America and the group health and welfare
plan insured by Blue Cross of Idaho, are the only Employee Benefit Plans that
Treasure Valley has ever maintained or to which Treasure Valley has ever
contributed.
4.25.2 Treasure Valley has no Liability, and no Liability
can be attributed to Treasure Valley, in any respect regarding its
participation or contribution in any of the Associated General Contractors
Money Purchase Pension Trust, the group medical, health and life insurance
plan sponsored by the Associated General Contractors of America or the group
health and welfare plan insured by Blue Cross of Idaho.
4.25.3 Treasure Valley is not now, nor has it ever been, a
member of a controlled or control group of corporations (within the meaning of
section 414(b) of the Code or section 4001(a) of ERISA) or trade or business
under common control (within the meaning of section 414(c) of the Code or
section 4001(a) of ERISA).
4.25.4 Treasure Valley is not part of an affiliated
service group (within the meaning of section 414(m) of the Code and has not
used leased employees (within the meaning of section 414(m) of the Code).
4.26 Guaranties. Treasure Valley is not liable, as guarantor or
otherwise, for any Liability or obligation (including indebtedness) of any
other Person.
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4.27 Environmental, Health, and Safety Matters.
4.27.1 Except as disclosed in Section 4.27.1 of the
Disclosure Schedules, Treasure Valley, its predecessors, and any other Person
or entity for whose conduct Treasure Valley is or may be held responsible for,
has no Liability under, has never violated, and is presently in compliance
with all Environmental, Health, and Safety Laws applicable to the Site and any
Facilities and operations thereon, and, to the best of the Seller's Knowledge,
there exist no Environmental, Health, and Safety Liabilities with respect to
the Site or any Facilities or operations thereon, and Treasure Valley is not
presently engaging and has not engaged in any Hazardous Activities on the Site
or any Facilities or operations thereon.
4.27.2 Except as disclosed in Section 4.27.2 of the
Disclosure Schedules, Treasure Valley has all Environmental Permits necessary
and required for its activities, Facilities and operations at the Site, and
for any past or ongoing alterations, modifications or improvements at the
Site, and to the best of the Seller's Knowledge, Treasure Valley has complied
with, and is in compliance with, all such Environmental Permits, and all such
Environmental Permits are current and in full force and effect as of the Date
of Closing. A full and complete list of all such Environmental Permits is set
forth in Section 4.27.2 of the Disclosure Schedules, and the Seller has made
copies of all such Environmental Permits available to the Buyer for
inspection. The Seller represents and warrants that all such Environmental
Permits are transferrable, and no cessation of operations will occur upon
closing and transfer of the Property.
4.27.3 To the best of the Seller's Knowledge, and except
as set forth in Section 4.27.3 of the Disclosure Schedules, Treasure Valley,
or its predecessors, or any other Person for whose conduct Treasure Valley is
or may be held responsible, has not generated, manufactured, refined,
transported, treated, stored, handled, disposed of, transferred, produced, or
processed any Hazardous Material or any solid waste at the Site, except in
compliance with all applicable Environmental, Health, and Safety Laws, and has
no Knowledge of any Release or Threat of Release of any Hazardous Material at
or on the Site. Except as set forth in Section 4.27.3 of the Disclosure
Schedules, the Seller further has no actual knowledge of any Release or Threat
of Release of any Hazardous Material in the vicinity of the Site.
4.27.4 No lien has been imposed on the Site by any
federal, state, or local governmental agency in connection with the presence
on or off the Site of any Hazardous Material, Hazardous Activity, or
Environmental, Health and Safety Liabilities.
4.27.5 Except as disclosed in Section 4.27.5 of the
Disclosure Schedules, Treasure Valley or the Seller, their respective
predecessors, and any other Person for whose conduct Treasure Valley or the
Seller is or may be held responsible, has not: (i) entered into or been
subject to any consent decree, compliance order, or administrative order with
respect to the Site or any Facilities or operations thereon; (ii) received
notice under the citizen suit provision of any Environmental, Health, and
Safety Law in connection with the Site or any Facilities or operations
thereon; (iii) received any request for information, notice, demand letter,
administrative inquiry, or formal or informal complaint or claim with respect
to any Environmental, Health, and Safety Liabilities relating to the Site or
any Facilities or operations thereon; or (iv) been subject to or threatened
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with any governmental or citizen enforcement action with respect to the Site
or any Facilities or operations thereon; and Treasure Valley or the Seller,
except as disclosed in Section 4.27.5 of the Disclosure Schedules, and has no
reason to believe that any of the above events (i) through (iv) will be
forthcoming.
4.27.6 Except as set forth in Section 4.27.6 of the
Disclosure Schedules, none of the following exists at the Site: (i)
underground storage tanks; (ii) asbestos-containing material in any form or
condition; (iii) materials or equipment containing polychlorinated biphenyls
(PCBs); or (iv) landfills, surface impoundments, or disposal areas.
4.27.7 To the best of the Seller's Knowledge, no facts,
events or conditions relating to the past or present Facilities, properties or
operations of Treasure Valley, or any of its respective predecessors or any
other Person for whose conduct Treasure Valley or the Seller is or may be held
responsible, will prevent, hinder or limit continued compliance with
Environmental, Health, and Safety Laws, give rise to any investigatory,
remedial or corrective obligations pursuant to Environmental, Health, and
Safety Laws, or give rise to any other Environmental, Health, and Safety
Liabilities (whether accrued, absolute, contingent, unliquidated or
otherwise,) including without limitation any such liability relating to onsite
Releases or Threats of Release of Hazardous Materials, personal injury,
property damage or natural resources damage. Except as set forth in Section
4.27 of the Disclosure Schedules, the Seller has no actual knowledge of any
facts, events or conditions existing offsite or in the vicinity of the Site
which will prevent, hinder or limit continued compliance with Environmental,
Health and Safety Laws, or give rise to any other Environmental, Health, and
Safety Liability (whether accrued, absolute, contingent, unliquidated or
otherwise), including without limitation any such liability relating to any
offsite Release or Threat of Release of Hazardous Materials, personal injury,
property damage or natural resource damage.
4.28 Certain Business Relationships With Treasure Valley.
Section 4.28 of the Disclosure Schedules sets forth all business arrangements
or relationships that the Seller and his Affiliates had, have had or currently
have with Treasure Valley involving more than $5,000 in the aggregate within
the past twelve (12) months.
4.29 Disclosure. The representations and warranties contained in
this Section 4 do not contain any untrue statement of a fact or omit to state
any fact necessary in order to make the statements and information contained
in this Section 4 not misleading.
5. PRE-CLOSING COVENANTS
The Parties agree as follows with respect to the period before the
Closing Date.
5.1 General. Each of the Parties will use his or its reasonable
best efforts to take all action and to do all things necessary in order to
consummate and make effective the transactions contemplated by this Agreement.
5.2 Notices and Consents. The Seller will cause Treasure Valley
to give any notices to third parties, and will cause Treasure Valley to use
its best efforts to obtain any third party consents, that the Buyer may
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request in connection with the matters referred to in Section 4.4 above. Each
of the Parties will (and the Seller will cause Treasure Valley to) give any
notices to, make any filings with, and use its best efforts to obtain any
authorizations, consents, and approvals of governments and governmental
agencies in connection with the matters referred to in Section 3.1.2, Section
3.2.2, and Section 4.4 above.
5.3 Operation of Business. The Seller will not cause or permit
Treasure Valley to engage in any practice, take any action, or enter into any
transaction outside the Ordinary Course of Business. Without limiting the
generality of the foregoing, the Seller will not cause or permit Treasure
Valley to (i) declare, set aside, or pay any dividend or make any distribution
with respect to its capital stock or other securities or redeem, purchase, or
otherwise acquire any of its capital stock or other securities, or (ii)
otherwise engage in any practice, take any action, or enter into any
transaction of the sort described in Section 4.9 above.
5.4 Preservation of Business. The Seller will cause Treasure
Valley to keep its business and properties substantially intact, including its
present operations, physical facilities, working conditions, and relationships
with lessors, licensors, suppliers, customers, and employees.
5.5 Full Access. The Seller will permit, and the Seller will
cause Treasure Valley to permit, representatives of the Buyer to have full
access at all reasonable times, and in a manner so as not to interfere with
the normal business operations of Treasure Valley, to all premises,
properties, personnel, books, records (including Tax records), contracts, and
documents of or pertaining to Treasure Valley.
5.6 Notice of Developments. The Seller will give prompt written
notice to the Buyer of any material adverse development causing a breach of
any of the representations and warranties in Section 4 above. Each Party will
give prompt written notice to the other of any material adverse development
causing a breach of any of his or its own representations and warranties in
Section 3 above. No disclosure by any Party pursuant to this Section 5.6,
however, shall be deemed to amend or supplement the Disclosure Schedules or to
prevent or cure any misrepresentation, breach of warranty, or breach of
covenant.
5.7 Exclusivity. The Seller will not (and the Seller will not
cause or permit Treasure Valley to) (i) solicit, initiate, or encourage the
submission of any proposal or offer from any Person relating to the
acquisition of any capital stock or other voting securities, or any
substantial portion of the assets, of Treasure Valley (including any
acquisition structured as a merger, consolidation, or share exchange) or (ii)
participate in any discussions or negotiations regarding, furnish any
information with respect to, assist or participate in, or facilitate in any
other manner any effort or attempt by any Person to do or seek any of the
foregoing. The Seller will notify the Buyer immediately if any Person makes
any proposal, offer, inquiry, or contact with respect to any of the foregoing.
5.8 Confidentiality. Between the date of this agreement and the
Closing Date (and thereafter in the event Closing does not occur) the Buyer
and the Seller will maintain in confidence, and will cause the directors,
officers, employees, agents, and advisors of the Buyer and Treasure Valley to
maintain in confidence all Confidential Information, unless (i) such
information is already known to such Person or Persons not bound by a duty of
confidentiality or such information becomes publicly available through no
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fault of such party, (ii) the use of such information is necessary or
appropriate in making any filing or obtaining any consent or approval required
for the consummation of this Agreement or the transactions contemplated
herein, or (iii) the furnishing or use of such information is required,
necessary or appropriate in connection with legal proceedings. If the
transactions contemplated in this Agreement are not consummated, the Buyer
shall destroy, at the request and option of the Seller, all tangible
embodiments (including all copies) of the Confidential Information which are
in the Buyer's possession.
6. POST-CLOSING COVENANTS
The Parties agree as follows with respect to the period following
the Closing:
6.1 Real Property Exchange. Immediately subsequent to Closing,
Treasure Valley and Nelson Construction shall enter into an Exchange Agreement
in substantially the form attached hereto as Exhibit K pursuant to which
Treasure Valley will transfer the Boise Property described in Section 4.13.1.E
of the Disclosure Schedules to Nelson Construction in exchange for the real
property described in Exhibit D (the "Nelson Construction Property"). Said
real property exchange shall qualify as a tax deferred exchange pursuant to
section 1031 of the Code.
6.2 Title Insurance. The Seller will cause Treasure Valley to
obtain and deliver the following title insurance commitments, policies, and
riders in preparation for the Closing:
6.2.1 With respect to the Nampa Property and the Nelson
Construction Property, an ALTA Owner's Policy of Title Insurance Form B-1987
issued by Pioneer Title in such amount as the Buyer may determine to be the
fair market value of such real property (including all improvements located
thereon), insuring title to such real property to be in Treasure Valley as of
the Closing (subject only to the title exceptions described above in Section
4.13.1 of this Agreement); and
Each title insurance policy delivered pursuant to this Section 6 shall (i)
insure title to the real property and all recorded easements benefitting such
real property, (ii) contain an "extended coverage endorsement" insuring over
the general exceptions contained customarily in such policies, (iii) contain
an ALTA Zoning Endorsement 3.1 (or equivalent), (iv) contain an endorsement
insuring that the real property described in the title insurance policy is the
same real estate as shown on the Survey delivered with respect to such
property, (v) contain an endorsement insuring that each street adjacent to the
real property is a public street and that there is direct and unencumbered
pedestrian and vehicular access to such street from the real property, and
(vi) if the real property consists of more than one record parcel, contain a
"contiguity" endorsement insuring that all of the record parcels are
contiguous to one another.
6.3 General. In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of this Agreement,
each of the Parties will take such further action (including the execution and
delivery of such further instruments and documents) as any other Party may
request, all at the sole cost and expense of the requesting Party (unless the
requesting Party is entitled to indemnification therefor under Section 8
below). The Seller acknowledges and agrees that from and after the Closing
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the Buyer will be entitled to possession of all documents, books, records
(including Tax records), agreements, and financial data of any sort relating
to Treasure Valley.
6.4 Litigation Support. In the event and for so long as any
Party actively is contesting or defending against any action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand in
connection with (i) any transaction contemplated under this Agreement or (ii)
any fact, situation, circumstance, status, condition, activity, practice,
plan, occurrence, event, incident, action, failure to act, or transaction on
or prior to the Closing Date involving Treasure Valley, the other Party will
cooperate with him or it and his or its counsel in the contest or defense,
make available their personnel, and provide such testimony and access to their
books and records as shall be necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or defending Party
(unless the contesting or defending Party is entitled to indemnification
therefor under Section 8 below). Notwithstanding anything to the contrary in
this Section 6.4, the Seller agrees to indemnify, defend and hold harmless the
Buyer from all costs, expenses and fees (including court costs, whether on
appeal or otherwise, expert fees and attorneys' fees) relating to the
litigation regarding the Boise Property described on Section 4.21 of the
Disclosure Schedules and to pay such fees and costs as they are incurred by
the Buyer.
6.5 Transition. The Buyer and the Seller shall cooperate fully,
as and to the extent reasonably requested by the other Party, in connection
with the bookkeeping (including, but not limited to, the income, expenses and
accruals) of Treasure Valley for the months of December 1997 and February 1998
(the "Transition Period"). During the Transition Period, the Buyer and the
Seller shall retain (and upon the other Party's request) provide any
information, records and other documentation concerning Treasure Valley which
is reasonably necessary for the proper maintenance of the requesting Party's
files and records.
6.6 Covenants of the Buyer. During the Transition Period, the
Buyer agrees to:
6.6.1 Withhold and pay all Taxes required to be withheld
and paid in connection with amounts paid or owing to any employee, independent
contractor, creditor, or other third party, provided such amounts have been
properly accrued and reflected on the face of the Post-Closing Balance Sheet
or set forth in the Disclosure Schedules, for the following periods: December
28, 1997 through January 3, 1998 and January 4, 1998 through the Closing Date.
6.6.2 Pay all wages and salaries due to employees of
Treasure Valley, provided such amounts have been properly accrued and
reflected on the face of the Post-Closing Balance Sheet or set forth in the
Disclosure Schedules, for the following periods: December 28, 1997 through
January 3, 1998 and January 4, 1998 through the Closing Date.
6.6.3 The Buyer will make payment of all expenses and
accruals of Treasure Valley that have been properly accrued or adequate
reserves have been established or properly reflected on the Financial
Statements of Treasure Valley.
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6.7 Covenants of the Seller. During the Transition Period, the
Seller agrees:
6.7.1 Not to take any action that is designed or intended
to have the effect of undermining the goodwill or business of Treasure Valley
or discouraging any lessor, licensor, customer, supplier, or other business
associate of Treasure Valley from maintaining the same business relationships
with Treasure Valley after the Closing as it maintained with Treasure Valley
prior to the Closing;
6.7.2 To refer all customer inquiries relating to the
businesses of Treasure Valley to the Buyer from and after the Closing; and
6.7.3 The Seller shall prepare or cause to be prepared
and deliver to the Buyer within sixty (60) days of Closing Date the Post-
Closing Financial Statements of Treasure Valley as of or for the period ending
December 31, 1997 and, if applicable, for any portion of the taxable period
beginning before the Closing Date.
6.8 Confidentiality. The Seller will treat as confidential and
hold as such all of the Confidential Information relating to Treasure Valley,
and the Seller shall disclose Confidential Information only to Treasure
Valley's employees, agents and consultants or in connection with this
Agreement, except as shall be required by federal, state or local law. In the
event that the Seller is requested or required (by oral question or request
for information or documents in any legal proceeding, interrogatory, subpoena,
civil investigative demand, or similar process) to disclose any Confidential
Information, that the Seller will notify the Buyer promptly of the request or
requirement so that the Buyer may seek an appropriate protective order or
waive compliance with the provisions of this Section 6.8. If, in the absence
of a protective order or the receipt of a waiver hereunder, the Seller is, on
the advice of counsel, compelled to disclose any Confidential Information to
any tribunal or else stand liable for contempt, that the Seller may disclose
the Confidential Information to the tribunal; provided, however, that the
Seller shall use his best efforts to obtain, at the request of the Buyer, an
order or other assurance that confidential treatment will be accorded to such
portion of the Confidential Information required to be disclosed as the Buyer
shall designate. The foregoing provisions shall not apply to any Confidential
Information which is generally available to the public immediately prior to
the time of disclosure.
6.9 Covenant Not to Compete. For a period of five (5) years
from and after the Closing Date, the Seller will not engage directly or
indirectly in any business that Treasure Valley conducts as of the Closing
Date, including the ready-mix concrete business and the sand and gravel retail
business, in Ada County, and Canyon County, Idaho. Notwithstanding the
foregoing, the Seller will be allowed to make certain sales of sand and gravel
as more fully described in substantially the form of the Non-Competition
Agreement attached hereto as Exhibit A. Also, the Non-Competition Agreement
will not prohibit the Seller from continuing the operation of his Affiliate,
Nelson Construction, consistent with past practice in the construction
industry. If the final judgment of a court of competent jurisdiction declares
that any term or provision of this Section 6.9 is invalid or unenforceable,
the Parties agree that the court making the determination of invalidity or
unenforceability shall have the power to reduce the scope, duration, or area
of the term or provision, to delete specific words or phrases, or to replace
any invalid or unenforceable term or provision with a term or provision that
is valid and enforceable and that comes closest to expressing the intention of
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the invalid or unenforceable term or provision, and this Agreement shall be
enforceable as so modified after the expiration of the time within which the
judgment may be appealed.
6.10 Employment Agreements With Current Treasure Valley
Employees. The Buyer will negotiate and use its best efforts to enter into
employment agreements with Antone Chacartegui, Steven K. Mayes and William
North in substantially the form attached hereto as Exhibit F.
6.11 Environmental Compliance. The Seller has set forth in
Section 4.27 of the Disclosure Schedules its current endeavors to obtain
compliance with any Environmental, Health and Safety Laws. The Buyer agrees
to use its reasonable best efforts to continue to obtain or maintain
compliance with Environmental, Health and Safety Laws after Closing.
Notwithstanding the above, the Buyer reserves the right to choose and retain
its own environmental consultants. The Seller agrees that this Section 6.11
and/or the Buyer's continued effort to obtain or maintain compliance with
Environmental, Health and Safety Laws after Closing shall in no way limit or
mitigate the Seller's liability or the Buyer's right to indemnification
pursuant to Sections 4.27 and 8.5 of this Agreement.
6.12 Release of Certain Obligations. The Buyer agrees to
indemnify the Seller and Nelson Construction and shall use its best efforts
(including providing a guarantor, if necessary) to obtain releases for the
Seller and Nelson Construction Company, effective as of the Closing, from
liability incurred by them on any personal guaranties of the obligations of
Treasure Valley set forth on Section 4.17.4 of the Disclosure Schedules.
7. CONDITIONS TO OBLIGATION TO CLOSE
7.1 Conditions to Obligation of the Buyer. The obligation of
the Buyer to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction of the following conditions:
7.1.1 The representations and warranties set forth in
Section 3.1 and Section 4 above shall be true and correct in all material
respects at and as of the Closing Date;
7.1.2 Treasure Valley shall have procured all of the
third party consents specified in Section 5.2 above;
7.1.3 Except as set forth in the Disclosure Schedules no
action, suit, or proceeding shall be pending or threatened before any court or
quasi-judicial or administrative agency of any federal, state, local, or
foreign jurisdiction or before any arbitrator wherein an unfavorable
injunction, judgment, order, decree, ruling, or charge would (i) prevent
consummation of any of the transactions contemplated by this Agreement, (ii)
cause any of the transactions contemplated by this Agreement to be rescinded
following consummation, (iii) affect adversely the right of the Buyer to own
Treasure Valley Shares and to control Treasure Valley, or (iv) affect
adversely the right of Treasure Valley to own its assets and to operate its
businesses (and no such injunction, judgment, order, decree, ruling, or charge
shall be in effect);
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7.1.4 The Seller shall have delivered to the Buyer a
certificate to the effect that each of the conditions specified above in
Sections 7.1.1 through 7.1.3 is satisfied in all respects;
7.1.5 The Seller shall have delivered to Pioneer Title to
hold in escrow until the Closing Date, the stock certificate or certificates
representing all of the outstanding shares of Treasure Valley properly
endorsed or accompanied by stock powers properly endorsed for transfer;
7.1.6 Nelson Construction shall have entered into the
Sand and Gravel Lease regarding the Boise Property substantially in the form
attached hereto as Exhibit E and the same shall be in full force and effect;
7.1.7 The Seller shall have entered into the Consulting
and Non-Competition Agreement with Treasure Valley substantially in the form
attached hereto as Exhibit A and the same shall be in full force and effect;
7.1.8 Nelson Construction shall have entered into the
Aggregate Crushing Agreement with Treasure Valley in substantially the form
attached hereto as Exhibit G and the same shall be in full force and effect;
7.1.9 The Buyer shall have received from counsel to the
Seller an opinion in form and substance as set forth in Exhibit H attached
hereto, addressed to the Buyer, and dated as of the Closing Date;
7.1.10 The Buyer shall have received the resignations,
effective as of the Closing, of each director and officer of Treasure Valley;
7.1.11 All actions to be taken by the Seller in connection
with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to effect
the transactions contemplated hereby will be satisfactory in form and
substance to the Buyer; and
7.1.12 The Buyer shall have completed its due diligence
investigation of Treasure Valley and its operations and financial condition
and shall be satisfied in its discretion with such investigation and results
thereof and shall have approved the disclosures made by the Seller in the
Disclosure Schedules attached hereto.
The Buyer may waive any condition specified in this Section 7.1 if it executes
a writing so stating at or prior to the Closing.
7.2 Conditions to Obligation of the Seller. The obligation of
the Seller to consummate the transactions to be performed by him in connection
with the Closing is subject to satisfaction of the following conditions:
7.2.1 The representations and warranties set forth in
Section 3.2 shall be true and correct in all material respects at and as of
the Closing Date;
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7.2.2 The Buyer shall have performed and complied with
all of its covenants hereunder in all material respects through the Closing;
7.2.3 No action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any arbitrator
wherein an unfavorable injunction, judgment, order, decree, ruling, or charge
would (i) prevent consummation of any of the transactions contemplated by this
Agreement or (ii) cause any of the transactions contemplated by this Agreement
to be rescinded following consummation (and no such injunction, judgment,
order, decree, ruling, or charge shall be in effect);
7.2.4 The Buyer shall have delivered to the Seller a
certificate to the effect that each of the conditions specified above in
Sections 7.2.1 through 7.2.3 is satisfied in all respects;
7.2.5 The Buyer shall have entered into the Non-Competition
Agreement with the Seller in substantially the form attached
hereto as Exhibit A and the same shall be in full force and effect;
7.2.6 Monroc shall have entered into the Aggregate
Crushing Agreement with Nelson Construction in substantially the form attached
hereto as Exhibit G and the same shall be in full force and effect;
7.2.7 All actions to be taken by the Buyer in connection
with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to effect
the transactions contemplated hereby will be satisfactory in form and
substance to the Seller.
The Seller may waive any condition specified in this Section 7.2 if he
executes a writing so stating at or prior to the Closing.
8. REMEDIES FOR BREACHES OF THIS AGREEMENT
8.1 Survival of Representations and Warranties. Except for as
specifically set forth in Section 4.13 and Section 4.15 above, all of the
representations and warranties of the Parties contained in this Agreement
shall survive the Closing hereunder (even if the damaged Party knew or had
reason to know of any misrepresentation or breach of warranty or covenant at
the time of Closing) and continue in full force until the expiration of the
applicable statutes of limitations.
8.2 Indemnification Provisions for Benefit of the Buyer.
8.2.1 For purposes of determining the Seller's liability
and obligation to indemnify the Buyer under this Section 8, the Seller's
representations and warranties set forth in this Agreement and in the
documents, instruments and agreements referred to herein or related hereto,
shall be deemed to exclude Knowledge and materiality qualifiers, and such
representations and warranties shall be deemed to have been made to the Buyer
in a manner unqualified by materiality or Knowledge qualifications. Subject
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to Section 8.2.2, in the event the Seller breaches (or in the event any third
party alleges facts that, if true, would mean the Seller has breached) any of
his representations, warranties, and covenants contained herein, and, if there
is an applicable survival period pursuant to Section 8.1 above, provided that
the Buyer makes a written claim for indemnification against the Seller
pursuant to Section 11.8 below within such survival period, then the Seller
agrees to indemnify, defend and hold the Buyer, its officers, directors,
shareholders, employees, affiliates, control persons, agents as Indemnified
Parties (as defined in Section 8.4 below), harmless from and against the
entirety of any Adverse Consequences the Buyer may suffer through and after
the date of the claim for indemnification (including any Adverse Consequences
the Buyer may suffer after the end of any applicable survival period)
resulting from, arising out of, relating to, in the nature of, or caused by
the breach (or the alleged breach).
8.2.2 The Seller will have no Liability to the Buyer (for
indemnification or otherwise) with respect to the matters described in this
Section 8 (other than with respect to any Liability described in Sections 8.5,
8.6 and 8.7 below) until the Liability associated with such matters exceeds
$10,000, and then only for the amount by which such costs, expenses and
damages exceed $10,000. However, this Section 8.2 will not apply to any
Liability arising under Sections 8.5, 8.6 and 8.7 or in connection with any
breach of any of the Seller's representations and warranties of which either
the Seller had Knowledge at any time prior to the date on which such
representation and warranty is made or any intentional breach by the Seller of
any covenant or obligation.
8.3 Indemnification Provisions for Benefit of the Seller. In
the event the Buyer breaches (or in the event any third party alleges facts
that, if true, would mean the Buyer has breached) any of its representations,
warranties, and covenants contained herein, and, if there is an applicable
survival period pursuant to Section 8.1 above, provided that the Seller makes
a written claim for indemnification against the Buyer pursuant to Section 11.8
below within such survival period, then the Buyer agrees to indemnify the
Seller from and against the entirety of any Adverse Consequences the Seller
may suffer through and after the date of the claim for indemnification
(including any Adverse Consequences the Seller may suffer after the end of any
applicable survival period) resulting from, arising out of, relating to, in
the nature of, or caused by the breach (or any alleged breach).
8.4 Matters Involving Third Parties
8.4.1 If any third party shall notify any Party (the
"Indemnified Party") with respect to any matter (a "Third Party Claim") which
may give rise to a claim for indemnification against any other Party (the
"Indemnifying Party") under this Section 8.4, then the Indemnified Party shall
promptly notify each Indemnifying Party thereof in writing; provided, however,
that no delay on the part of the Indemnified Party in notifying any
Indemnifying Party shall relieve the Indemnifying Party from any obligation
hereunder unless (and then solely to the extent) the Indemnifying Party
thereby is prejudiced.
8.4.2 Any Indemnifying Party will have the right to
defend the Indemnified Party against the Third Party Claim with counsel of its
choice reasonably satisfactory to the Indemnified Party so long as (i) the
Indemnifying Party notifies the Indemnified Party in writing within fifteen
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(15) days after the Indemnified Party has given notice of the Third Party
Claim that the Indemnifying Party will indemnify the Indemnified Party from
and against the entirety of any Adverse Consequences the Indemnified Party may
suffer resulting from, arising out of, relating to, in the nature of, or
caused by the Third Party Claim, (ii) the Indemnifying Party provides the
Indemnified Party with evidence reasonably acceptable to the Indemnified Party
that the Indemnifying Party will have the financial resources to defend
against the Third Party Claim and fulfill its indemnification obligations
hereunder, (iii) the Third Party Claim involves only money damages and does
not seek an injunction or other equitable relief, (iv) settlement of, or an
adverse judgment with respect to, the Third Party Claim is not, in the good
faith judgment of the Indemnified Party, likely to establish a precedential
custom or practice adverse to the continuing business interests of the
Indemnified Party, and (v) the Indemnifying Party conducts the defense of the
Third Party Claim actively and diligently.
8.4.3 So long as the Indemnifying Party is conducting the
defense of the Third Party Claim in accordance with Section 8.4.2 above, (i)
the Indemnified Party may retain separate co-counsel at its sole cost and
expense and participate in the defense of the Third Party Claim, (ii) the
Indemnified Party will not consent to the entry of any judgment or enter into
any settlement with respect to the Third Party Claim without the prior written
consent of the Indemnifying Party (not to be withheld unreasonably), and (iii)
the Indemnifying Party will not consent to the entry of any judgment or enter
into any settlement with respect to the Third Party Claim without the prior
written consent of the Indemnified Party (not to be withheld unreasonably).
8.4.4 In the event any of the conditions in Section 8.4.2
above is or becomes unsatisfied, however, (i) the Indemnified Party may defend
against, and consent to the entry of any judgment or enter into any settlement
with respect to, the Third Party Claim in any manner it reasonably may deem
appropriate (and the Indemnified Party need not consult with, or obtain any
consent from, any Indemnifying Party in connection therewith), (ii) the
Indemnifying Parties will reimburse the Indemnified Party promptly and
periodically for the costs of defending against the Third Party Claim
(including reasonable attorneys' fees and expenses), and (iii) the
Indemnifying Parties will remain responsible for any Adverse Consequences the
Indemnified Party may suffer resulting from, arising out of, relating to, in
the nature of, or caused by the Third Party Claim to the fullest extent
provided in this Section 8.4.
8.5 Environmental Indemnification. Notwithstanding Section
8.2.2, the Seller agrees to indemnify, defend and hold harmless the Buyer and
its officers, directors, employees, agents, representatives, stockholders,
controlling persons, affiliates and their assigns from and against, and for
the amount of any Adverse Consequences, of whatever kind or nature, known or
unknown, disclosed or undisclosed, including but not limited to those items
disclosed on the Seller's Disclosure Schedules, contingent or otherwise, which
are or may be incurred by the Buyer after the date of execution of this
Agreement, whether or not involving a third-party claim, and that arise from
or relate in any way, directly or indirectly, in connection with:
8.5.1 Any Environmental, Health, and Safety Liabilities
arising out of or relating to: (i) (A) the Seller's or Treasure Valley's
actions, ownership, operation, or maintenance of the Facilities at any time on
or prior to the Closing Date, or (B) any Hazardous Materials or other
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contaminants that were present on the Facilities at any time on or prior to
the Closing Date; or (ii) (A) any Hazardous Materials or other contaminants,
wherever located, that were generated, transported, stored, treated, Released,
or otherwise handled by the Seller, Treasure Valley or by any other Person for
whose conduct the Seller is or may be held responsible at any time on or prior
to the Closing Date, or (B) any Hazardous Activities that were conducted by
the Seller, Treasure Valley or by any other Person for whose conduct the
Seller is or may be held responsible at any time on or prior to the Closing
Date; or
8.5.2 Any bodily injury (including illness, disability,
and death, and regardless of when any such bodily injury occurred, was
incurred, or manifested itself), personal injury, property damage, or other
damage of or to any Person, including any employee or former employee of the
Seller, Treasure Valley or any other Person for whose conduct it is or may be
held responsible, in any way arising from any Hazardous Activity conducted
with respect to the Facilities or the operation of the Seller or Treasure
Valley prior to the Closing Date in violation of, or non-compliance with, any
Environmental, Health, and Safety Law (i) present on or before the Closing
Date on or at the Facilities (or present on any other property, if such
Hazardous Material emanated or allegedly emanated from any of the Facilities
and was present on the Facilities on or prior to the Closing Date) or (ii)
Released by the Seller, Treasure Valley or any other Person for whose conduct
the Seller is or may be held responsible, at any time on or prior to the
Closing Date.
8.5.3 The Seller will have no Liability to the Buyer (for
indemnification or otherwise) with respect to the environmental matters
described in this Section 8.5 until the Liability associated with such matters
exceeds $1,000, and then only for the amount by which such costs, expenses and
damages exceed $1,000. Moreover, the Seller will have no Liability to the
Buyer (for indemnification or otherwise) with respect to the environmental
matters described in this Section 8.5 which are properly set forth in Section
4.27 of the Disclosure Schedules until the Liability associated with such
disclosed environmental matters exceeds $5,000, and then only for the amount
by which such costs, expenses and damages exceed $5,000. However, this
Section 8.5.3 will not apply to any Liability arising in connection with any
breach of any of the Seller's representations and warranties of which either
the Seller had Knowledge at any time prior to the date on which such
representation and warranty is made or any intentional breach by the Seller of
any covenant or obligation.
8.6 Tax Indemnification.
8.6.1 Tax Indemnification by the Seller.
8.6.1.1 Notwithstanding Section 8.2.2 above, the
Seller shall protect, defend, indemnify and hold harmless (on an after Tax
basis) the Buyer and Treasure Valley from and against, and agree to pay, all
Taxes imposed and all costs and expenses (including, without limitation,
litigation costs and reasonable attorneys' and accountants' fees and
disbursements) incurred as a result of a claim, notice of deficiency, or
assessment by, or any obligation owing to, any Tax Authority for any and all:
(i) Taxes of Treasure Valley or the Seller attributable to any Tax period
ending on or before the Closing Date, whether or not incurred in connection
with or as a result of the transaction contemplated hereby, unless such Taxes
have been properly accrued and reflected on the face of the Post-Closing
Balance Sheet or set forth in the Disclosure Schedules, (ii) liability for
Taxes asserted against the Buyer or Treasure Valley as a result of Treasure
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Valley having acquired assets from another person prior to the Closing Date
(whether as transferee or otherwise), unless such Taxes have been properly
accrued and reflected on the face of the Post-Closing Balance Sheet or set
forth in the Disclosure Schedules, (iii) liability for Taxes arising out of or
by virtue of any inaccuracy in or breach of any representation or warranty
made by the Seller in Section 4.12, unless such Taxes have been properly
accrued and reflected on the face of the Post-Closing Balance Sheet or set
forth in the Disclosure Schedules and (iv) Taxes and fees that the Seller has
agreed to pay pursuant to this Agreement, in each of the above cases together
with any reasonable out-of-pocket fees and expenses (including attorneys' and
accountants' fees) incurred by the Buyer or Treasure Valley in connection with
the assessment or collection thereof. For purposes of this Section 8.6, any
liability attributable to a taxable period which begins before and ends after
the Closing Date shall be apportioned between the portion of such period
ending on the Closing Date and the portion beginning on the day after the
Closing Date (i) in the case of real and personal property Taxes, by
apportioning such Taxes on a per diem basis, (ii) in the case of all Taxes
based on or in respect of income, on the basis of the taxable income or loss
of Treasure Valley as determined from its books and records for such partial
period, and (iii) in the case of all other Taxes, on the basis of the actual
activities of Treasure Valley as determined from its books and records for
such partial period.
8.6.1.2 The Buyer shall, to the extent permitted
by law, treat any payments made pursuant to this Section 8.6 as adjustments to
the Purchase Price. To the extent that any such payment is not permitted to
be treated as a Purchase Price adjustment by any Tax Authority, (i) the amount
of such payment shall be increased by the amount of any additional Tax
liability incurred as a result of its receipt of such payment; and (ii) the
amount of such payment shall be reduced by the amount of any net Tax benefit
actually received by the recipient as a result of its payment of the Tax to
which such indemnity payment relates.
8.6.2 Tax Indemnification by the Buyer. The Buyer shall
protect, defend, indemnify and hold harmless (on an after Tax basis) the
Seller from and against, and agree to pay, all Taxes described in Sections
6.6.1 and 6.6.2 above and all costs and expenses (including, without
limitation, litigation costs and reasonable attorneys' and accountants' fees
and disbursements) incurred as a result of a claim, notice of deficiency, or
assessment by, or any obligation owing to, any Tax Authority with respect
thereto, provided such Taxes have been properly accrued and reflected on the
face of the Post-Closing Balance Sheet or set forth in the Disclosure
Schedules.
8.6.3 Access to Information.
8.6.3.1 The Seller Information. The Seller shall
grant to the Buyer (or its designees) access at all reasonable times to all of
the information, books and records relating to Treasure Valley within the
possession of the Seller (including work papers and correspondence with Tax
Authorities), and shall afford the Buyer (or its designees) the right (at the
Buyer's expense) to take extracts therefrom and to make copies thereof, and
shall provide such other assistance as the Buyer shall reasonably request, to
the extent reasonably necessary to permit the Buyer (or its designees) to
prepare Tax Returns, to conduct negotiations with Tax Authorities, and to
implement the provisions of, or to investigate or defend any claims between
the parties arising under, this Agreement.
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8.6.3.2 Preservation of Records. Each of the
parties hereto will preserve and retain all schedules, work papers and other
documents relating to any Tax Returns of or with respect to Treasure Valley or
to any claims, audits or other proceedings affecting Treasure Valley until the
expiration of the statute of limitations (including extensions) applicable to
the taxable period to which such documents relate or until the final
determination of any controversy with respect to such taxable period, and
until the final determination of any payments that may be required with
respect to such taxable period under this Agreement.
8.6.4 Tax Indemnification Procedures.
8.6.4.1 Notice of Claims. If a claim shall be
made by any Tax Authority that, if successful, would result in the
indemnification of the Buyer or Treasure Valley under this Section 10.6
(referred to herein as the "Tax Indemnified Party"), (i) the Buyer shall
within fifteen (15) business days notify the Seller in writing of such fact
and (ii) from the date of this notice until the Seller has paid in full all
Taxes required to be indemnified under this Section 8.6, the Seller shall
indemnify and pay to the Buyer all of the costs incurred by the Buyer in
contesting any Tax claims, including, without limitation, the costs of
attorneys, accountants and other experts.
8.6.4.2 Notification of Proceedings; Control. The
Seller shall have the right to control any audit or examination by any Tax
Authority, initiate any claim for refund, file any amended return, contest,
resolve and defend against any assessment, notice of deficiency or other
adjustment or proposed adjustment relating or with respect to any Taxes of
Treasure Valley for taxable periods ending prior to or on the Closing Date;
however, to the extent that any audit, proceeding, or other event described in
the preceding clause of this sentence (an "Event") could result in liability
for the Buyer pursuant to this Agreement, the Seller shall notify the Buyer of
such Event, and shall consult with the Buyer with respect to the resolution of
any issue relating to Taxes arising as a result of or in connection with such
Event.
8.6.4.3 Settlements. The Tax Indemnified Party
may prosecute a contest with the applicable Tax Authority to a determination
in a court or other tribunal of initial or appellate jurisdiction or, subject
to the approval of the Seller, enter into a settlement of such contest.
8.6.4.4 Refunds. If, after actual receipt by the
Tax Indemnified Party of an indemnification amount, the extent of the
liability of the Tax Indemnified Party with respect to the claim is
established by the final judgment or decree of a court or other tribunal or a
final and binding settlement with an administrative agency having jurisdiction
thereof, the Tax Indemnified Party shall promptly repay to the Seller the
amount of any refund received by the Tax Indemnified Party with respect to the
claim together with any interest received thereon from the applicable Tax
Authority and any recovery of legal fees from such Tax Authority, net of any
Taxes as are required to be paid by the Tax Indemnified Party with respect to
such refund, interest or legal fees (calculated at the maximum applicable
statutory rate of Tax without regard to any other Tax Items). Notwithstanding
the foregoing, the Tax Indemnified Party shall not be required to make any
payment hereunder before such time as the Seller shall have made all payments
or indemnities then due with respect to the Tax Indemnified Party pursuant to
this Agreement.
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8.7 Current Litigation Indemnification. The Seller agrees to
indemnify, defend and hold harmless the Buyer from and against any and all
costs, expenses and fees (including court costs, whether incurred on appeal or
otherwise, expert fees and attorneys' fees) in connection with the litigation
described in Section 4.21 of the Disclosure Schedules. In the event that a
court of ultimate jurisdiction holds Treasure Valley liable for royalties or
other amounts in connection with said litigation, the Seller agrees to
indemnify, defend and hold harmless the Buyer from and against any and all
royalties and other amounts assessed against Treasure Valley for periods prior
to the Closing Date.
8.8 Other Indemnification Provisions. The foregoing
indemnification provisions are in addition to, and not in derogation of, any
statutory, equitable, or common law remedy (including without limitation any
such remedy arising under Environmental, Health, and Safety Liabilities) any
Party may have with respect to Treasure Valley or the transactions
contemplated by this Agreement. The Seller hereby agrees that he will not
make any claim for indemnification against Treasure Valley by reason of the
fact that he was a director, officer, employee, or agent of any such entity or
was serving at the request of any such entity as a partner, trustee, director,
officer, employee, or agent of another entity (whether such claim is for
judgments, damages, penalties, fines, costs, amounts paid in settlement,
losses, expenses, or otherwise and whether such claim is pursuant to any
statute, charter document, bylaw, agreement, or otherwise) with respect to any
action, suit, proceeding, complaint, claim, or demand brought by the Buyer
against the Seller (whether such action, suit, proceeding, complaint, claim,
or demand is pursuant to this Agreement, applicable law, or otherwise).
9. TAX MATTERS.
The following provisions shall govern the allocation of
responsibility as between the Buyer and the Seller for certain tax matters
following the Closing Date:
9.1 Periods Ending on or Before the Closing Date.
9.1.1 Tax Returns Other Than Income Tax Returns. The
Buyer shall prepare or cause to be prepared and file or cause to be filed all
Tax Returns for Treasure Valley for all periods ending on or prior to the
Closing Date which are due after the Closing Date other than income Tax
Returns with respect to such periods. The Buyer shall permit the Seller to
review and comment on each such Tax Return described in the preceding sentence
prior to filing. The Seller shall reimburse the Buyer for Taxes of Treasure
Valley with respect to such periods within fifteen (15) days after payment by
the Buyer or Treasure Valley of such Taxes to the extent such Taxes are not
reflected on the face of the Post-Closing Balance Sheet or to the extent such
Taxes are not set forth in the Disclosure Schedules.
9.1.2 Income Tax Returns. The Seller shall prepare or
cause to be prepared and file or cause to be filed all income Tax Returns for
Treasure Valley for all periods ending on or prior to the Closing Date which
are due after the Closing Date. The Seller shall permit the Buyer to review
and comment on each such Tax Return described in the preceding sentence prior
to filing.
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9.2 Periods Beginning Before and Ending After the Closing Date.
The Buyer shall prepare or cause to be prepared and file or cause to be filed
any Tax Returns of Treasure Valley for Tax periods which begin before the
Closing Date and end after the Closing Date. The Buyer shall permit the
Seller to review and comment on such Tax Return described in the preceding
sentence prior to filing. The Seller shall pay to the Buyer within fifteen
(15) days after the date on which Taxes are paid with respect to such periods
an amount equal to the portion of such Taxes which relates to the portion of
such Taxable period ending on the Closing Date to the extent such Taxes are
not reflected on the face of the Post-Closing Balance Sheet or to the extent
such Taxes are not set forth in the Disclosure Schedules.
9.3 Cooperation on Tax Matters.
9.3.1 The Buyer and the Seller shall cooperate fully, as
and to the extent reasonably requested by the other party, in connection with
the filing of Tax Returns pursuant to this Section 9 and any audit, litigation
or other proceeding with respect to Taxes. Such cooperation shall include the
retention and (upon the other party's request) the provision of records and
information which are reasonably relevant to any such audit, litigation or
other proceeding and making employees available on a mutually convenient basis
to provide additional information and explanation of any material provided
hereunder. The Buyer and the Seller agree (i) to retain all books and records
with respect to Tax matters pertinent to Treasure Valley relating to any
taxable period beginning before the Closing Date until the expiration of the
statute of limitations (and, to the extent notified by the Buyer or the
Seller, any extensions thereof) of the respective taxable periods, and to
abide by all record retention agreements entered into with any Tax Authority,
and (ii) to give the other party reasonable written notice prior to
transferring, destroying or discarding any such books and records and, if the
other party so requests, the requesting Party shall be allowed to take
possession of such books and records.
9.3.2 The Buyer and the Seller further agree, upon
request, to use their best efforts to obtain any certificate or other document
from any governmental authority or any other Person as may be necessary to
mitigate, reduce or eliminate any Tax that could be imposed (including, but
not limited to, with respect to the transactions contemplated hereby).
9.3.3 The Buyer and the Seller further agree, upon
request, to provide the other Party with all information that either Party may
be required to report pursuant to section 6043 of the Code and all Treasury
Department Regulations promulgated thereunder.
9.4 Certain Taxes. All transfer, documentary, sales, use,
stamp, registration and other such Taxes and fees (including any penalties and
interest) incurred in connection with this Agreement, shall be paid by the
Seller when due, and the Seller will, at his own expense, file all necessary
Tax Returns and other documentation with respect to all such transfer,
documentary, sales, use, stamp, registration and other Taxes and fees, and, if
required by applicable law, the Buyer will, and will cause its affiliates to,
join in the execution of any such Tax Returns and other documentation.
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10. TERMINATION
10.1 Termination of Agreement. Certain of the Parties may
terminate this Agreement as provided below:
10.1.1 The Buyer and the Seller may terminate this
Agreement by mutual written consent at any time prior to the Closing;
10.1.2 The Buyer may terminate this Agreement by giving
written notice to the Seller at any time prior to the Closing (i) in the event
the Seller has breached any representation, warranty, or covenant contained in
this Agreement in any material respect, the Buyer has notified the Seller of
the breach, and the breach has continued without cure for a period of thirty
(30) days after the notice of breach or (ii) if the Closing shall not have
occurred on or before January 31, 1998, by reason of the failure of any
condition precedent under Section 7.1 hereof (unless the failure results
primarily from the Buyer itself breaching any representation, warranty, or
covenant contained in this Agreement); and
10.1.3 The Seller may terminate this Agreement by giving
written notice to the Buyer at any time prior to the Closing (i) in the event
the Buyer has breached any representation, warranty, or covenant contained in
this Agreement in any material respect, the Seller has notified the Buyer of
the breach, and the breach has continued without cure for a period of thirty
(30) days after the notice of breach or (ii) if the Closing shall not have
occurred on or before January 31, 1998, by reason of the failure of any
condition precedent under Section 7.2 hereof (unless the failure results
primarily from the Seller himself breaching any representation, warranty, or
covenant contained in this Agreement).
10.2 Effect of Termination. Each party's right of termination
under this Section 10 is in addition to any other rights it may have under
this Agreement or otherwise, and the exercise of a right of termination will
not be an election of remedies. If any Party terminates this Agreement
pursuant to Section 10.1 above, all rights and obligations of the Parties
hereunder shall terminate without any Liability of any Party to any other
Party (except for any Liability of any Party then in breach) except for the
obligations set forth in Section 5.8, 6.8, 11.2, 11.9, 11.12 and 11.16.
11. MISCELLANEOUS
11.1 Nature of Certain Obligations.
11.1.1 The covenants of the Seller in Section 3.1 above
concerning the sale of his Treasure Valley Shares to the Buyer and the
representations and warranties of the Seller in Section 4 above concerning the
transaction are several obligations. This means that the Seller making the
representation, warranty, or covenant will be solely responsible to the extent
provided in Section 8 above for any Adverse Consequences the Buyer may suffer
as a result of any breach thereof.
11.1.2 The remainder of the representations, warranties,
and covenants in this Agreement are joint and several obligations. This means
that the Seller will be responsible to the extent provided in Section 8 above
for the entirety of any Adverse Consequences the Buyer may suffer as a result
of any breach thereof.
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11.2 Press Releases and Public Announcements. No Party shall
issue any press release or make any public announcement relating to the
subject matter of this Agreement prior to the Closing without the prior
written approval of the Buyer and the Seller; provided, however, that the
Parties may agree to issue a joint press release in a form agreed upon by both
Parties.
11.3 No Third-Party Beneficiaries. This Agreement shall not
confer any rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns.
11.4 Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement among the Parties and
supersedes any prior understandings, agreements, or representations by or
among the Parties, written or oral, to the extent they related in any way to
the subject matter hereof.
11.5 Succession and Assignment. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their respective
successors permitted assigns, heirs and estate. Without limiting the
generality of the foregoing, this Agreement shall be binding on the Seller's
heirs, estate, personal representatives and executors. No Party may assign
either this Agreement or any of his or its rights, interests, or obligations
hereunder without the prior written approval of the other party; provided,
however, that the Buyer may (i) assign any or all of its rights and interests
hereunder to one or more of its affiliates, (ii) designate one or more of its
affiliates to perform its obligations hereunder (in any or all of which cases
the Buyer nonetheless shall remain responsible for the performance of all of
its obligations hereunder), and (iii) assign any or all of its rights
hereunder to a person or entity acquiring all or substantially all of the
Buyer's assets or fifty percent (50%) or more of its outstanding capital
stock.
11.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
11.7 Headings. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning
or interpretation of this Agreement.
11.8 Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if (and
then two business days after) it is sent by registered or certified mail,
return receipt requested, postage prepaid, and addressed to the intended
recipient as set forth below:
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If to the Seller: Copy to:
Donald James Nelson Hall, Farley, Oberrecht & Blanton, P.A.
Nelson Construction Company 702 West Idaho Street, Suite 700
P.O. Box 16550 Boise, Idaho 83701
Boise, Idaho 83715 Attention: Angela K. Nelson
If to the Buyer: Copy to:
Monroc, Inc. LeBoeuf, Lamb, Greene & MacRae, L.L.P.
1730 North Beck Street 136 South Main Street, Suite 1000
Salt Lake City, Utah 84116 Salt Lake City, Utah 84101
Attention: Ronald D. Davis Attention: Nolan S. Taylor, Esq.
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger
service, telecopy, telex, ordinary mail, or electronic mail), but no such
notice, request, demand, claim, or other communication shall be deemed to have
been duly given unless and until it actually is received by the intended
recipient. Any Party may change the address to which notices, requests,
demands, claims, and other communications hereunder are to be delivered by
giving the other Parties notice in the manner herein set forth.
11.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Idaho without
giving effect to any choice or conflict of law provision or rule (whether of
the State of Idaho or any other jurisdiction) that would cause the application
of the laws of any jurisdiction other than the State of Idaho.
11.10 Amendments and Waivers. No amendment of any provision of
this Agreement shall be valid unless the same shall be in writing and signed
by the Buyer and the Seller. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
11.11 Severability. Any term or provision of this Agreement
that is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.
11.12 Expenses. Each of the Parties will bear his or its own
costs and expenses (including legal fees and expenses) incurred in connection
with this Agreement and the transactions contemplated hereby. The Seller
agrees that Treasure Valley has neither borne nor will bear the Seller's costs
and expenses (including any of his legal fees and expenses) in connection with
this Agreement or any of the transactions contemplated hereby; except costs
and expenses incurred for purposes of the transaction contemplated in this
Agreement which inure to the benefit of Treasure Valley. Costs and expenses
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which inure to the benefit of Treasure Valley include, costs and expenses
incurred for environmental clean-up, appraisals, surveys, inspections, title
insurance and the ancillary contracts set forth in Exhibits E, F, G and I.
11.13 Construction. The Parties have participated jointly in
the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof
shall arise favoring or disfavoring any Party by virtue of the authorship of
any of the provisions of this Agreement. Any reference to any federal, state,
local, or foreign statute or law shall be deemed also to refer to all rules
and regulations promulgated thereunder, unless the context requires otherwise.
The word "including" shall mean including without limitation. The Parties
intend that each representation, warranty, and covenant contained herein shall
have independent significance. 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 levels of specificity) which the
Party has not breached shall not detract from or mitigate the fact that the
Party is in breach of the first representation, warranty, or covenant.
11.14 Incorporation of Exhibits and Disclosure Schedules. The
Exhibits and Disclosure Schedules identified in this Agreement are
incorporated herein by reference and made a part hereof.
11.15 Specific Performance. Each of the Parties acknowledges and
agrees that the other Parties would be damaged irreparably in the event any of
the provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. Accordingly, each of the Parties
agrees that the other Parties shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically this Agreement and the terms and provisions hereof in any
action instituted in any court of the United States or any state thereof
having jurisdiction over the Parties and the matter, in addition to any other
remedy to which they may be entitled, at law or in equity.
11.16 Submission to Jurisdiction. Each of the Parties submits
to the jurisdiction of any state or federal court sitting in Boise, Idaho in
any action or proceeding arising out of or relating to this Agreement and
agrees that all claims in respect of the action or proceeding may be heard and
determined in any such court. Each Party also agrees not to bring any action
or proceeding arising out of or relating to this Agreement in any other court.
Each of the Parties waives any defense of inconvenient forum to the
maintenance of any action or proceeding so brought and waives any bond,
surety, or other security that might be required of any other Party with
respect thereto. Each of the Seller and the Buyer appoints its respective
registered agent to receive on his or its behalf service of copies of the
summons and complaint and any other process that might be served in the action
or proceeding. Any Party may make service on any other Party by any manner
permitted by law or at equity. Each Party agrees that a final judgment in any
action or proceeding so brought shall be conclusive and may be enforced by
suit on the judgment or in any other manner provided by law or at equity.
11.17 Deliveries at Signing of this Agreement. Simultaneous with
the signing of this Agreement, the Seller shall deliver to Pioneer Title to
hold in escrow until the Closing Date, the stock certificate or certificates
representing all of the outstanding Treasure Valley Shares properly endorsed
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in blank or accompanied by duly executed assignment documents and the Spousal
Consent substantially in the form attached hereto as Exhibit J.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
MONROC, INC., a Delaware corporation
By: /s/ Ronald D. Davis
--------------------------------
Ronald D. Davis
Title: President
TREASURE VALLEY CONCRETE, INC.
an Idaho corporation
By: /s/ Donald James Nelson
--------------------------------
Donald James Nelson
Title: President
/s/ Donald James Nelson
--------------------------------
Donald James Nelson, individually
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FOR IMMEDIATE RELEASE: Thursday, January 8, 1998
CONTACT: L. William Rands, CFO Madeleine Franco
Monroc, Inc. or Andrew Graft
(801) 359-3701 Jordan Richard Assoc.
(801) 595-8611
MONROC ANNOUNCES PURCHASE OF TREASURE VALLEY CONCRETE
SALT LAKE CITY, UTAH - Ronald D. Davis, president and chief executive officer
of Monroc, Inc. (NASDAQ: MROC), today announced the company's acquisition of
privately held Treasure Valley Concrete, Inc. (Boise, Idaho). With the close
of the transaction, Treasure Valley Concrete becomes a wholly owned subsidiary
of Monroc.
Treasure Valley Concrete, with annual revenues of approximately $7 million, is
a producer of ready-mix concrete, serving the greater Boise area. Under the
terms of the acquisition, Monroc has purchased all shares of ownership in
Treasure Valley Concrete in exchange for $3.35 million in cash.
"This acquisition of Treasure Valley Concrete fits well with our current
operations," said Davis. "We welcome them to our team and look forward to
building upon the company's proven success in Idaho's Treasure Valley area."
Monroc, Inc. produces and sells ready-mix concrete, sand and gravel products,
prestressed and precast concrete building components and accessories to the
construction industry and the concrete trade in the Mountain States region.
