Exhibit 2.02
CONFORMED COPY
STOCK PURCHASE AGREEMENT
BY AND AMONG
GREAT LAKES DREDGE & DOCK CORPORATION
AND
GREAT LAKES/NORTH AMERICAN SITE DEVELOPERS, INC.
AND
NORTH AMERICAN SITE DEVELOPERS, INC.
AND
THE STOCKHOLDERS
OF
NORTH AMERICAN SITE DEVELOPERS, INC.
TABLE OF CONTENTS
ARTICLE I Definitions....................................................... 1
ARTICLE II Purchase and Sale of Purchased Shares, Purchase Price
and Other Related Matters....................................... 6
ARTICLE III Closing and Closing Date Deliveries.............................10
ARTICLE IV Governmental Filings.............................................15
ARTICLE V Pre- and Post-Closing Covenants...................................15
ARTICLE VI Financial Statements and Other Documents Delivered
and Actions Taken...............................................20
ARTICLE VII Representations and Warranties of the Stockholders..............20
ARTICLE VIII Warranties and Representations of Purchaser and
GLD Corporation...............................................42
ARTICLE IX Indemnification..................................................44
ARTICLE X Conditions of Closing Applicable to Purchaser.....................49
ARTICLE XI Conditions to Closing Applicable to the Company
and the Stockholders............................................52
ARTICLE XII Termination.....................................................54
ARTICLE XIII [Intentionally omitted]........................................55
ARTICLE XIV Stockholders Representative.....................................55
ARTICLE XV Miscellaneous....................................................57
i
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is made and entered
into as of this 17th day of April, 2001 by and among Great Lakes Dredge & Dock
Corporation, a Delaware corporation ("GLD Corporation"), Great Lakes/North
American Site Developers, Inc., a Massachusetts corporation and a wholly-owned
subsidiary of GLD Corporation ("Purchaser"), North American Site Developers,
Inc., a Massachusetts corporation (the "Company"), and all of the stockholders
of the Company (hereinafter individually referred to as a "Stockholder" and
collectively referred to as the "Stockholders").
RECITALS:
A. The Stockholders own all of the issued and outstanding shares of
capital stock of the Company, consisting of 400 shares of common stock, without
par value (collectively, the "Purchased Shares").
B. Purchaser desires to purchase from the Stockholders and the
Stockholders desire to sell to Purchaser, the Purchased Shares, on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.01. Each term defined in the first paragraph and Recitals shall have
the meaning set forth above whenever used herein, unless otherwise expressly
provided or unless the context clearly requires otherwise.
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1.02. In addition to the terms defined in the first paragraph and
Recitals, whenever used herein, the following terms shall have the meanings set
forth below unless otherwise expressly provided or unless the context clearly
requires otherwise:
"2000 Undistributed Earnings" shall mean the taxable earnings of the
Company from January 1, 2000 to and including December 31, 2000 LESS any prior
distributions thereof determined as part of the Final Adjustment Calculations
pursuant to Section 2.05 hereof.
"2001 Undistributed Earnings" shall mean the taxable earnings of the
Company from January 1, 2001 to and including March 31, 2001 LESS any prior
distributions thereof determined as part of the Final Adjustment Calculations
pursuant to Section 2.05 hereof.
"Adjustment Amount" - As defined in Section 2.05(h).
"Adjustment Report" - As defined in Section 2.05(c)
"Affiliate" shall mean a Person which, directly or indirectly, is
controlled by, controls, or is under common control with another Person. As used
in the preceding sentence, "control" shall mean and include, but not necessarily
be limited to, (i) the ownership of 50% or more of the voting securities or
other voting interest of any Person, or (ii) the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through ownership of voting securities, by
contract or otherwise.
"Authority" shall mean any governmental, regulatory or administrative
body, agency or authority, any court of judicial authority, any arbitrator or
any public, private or industry regulatory authority, whether foreign, federal,
state or local.
"Balance Sheet" shall mean the audited balance sheet of the Company as
of December 31, 2000, included in the Financial Statements.
"Balance Sheet Date" shall mean December 31, 2000.
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"Benefit Arrangements" - As defined in Section 7.12(g).
"Cash Amount" - As defined in Section 2.02(b).
"Cash Portion" - As defined in Section 2.02(b).
"CERCLA" - As defined in Section 7.15(a).
"Closing" - As defined in Section 3.01.
"Closing Balance Sheet" - As defined in Section 2.05(e).
"Closing Date" - As defined in Section 3.01
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder.
"Date of the Notice of Claim" - As defined in Section 9.07.
"Disclosure Letter" shall mean the letter dated of even date herewith
delivered to Purchaser from the Company and the Stockholders pursuant to Section
6.01(d) of this Agreement simultaneously with the execution and delivery of this
Agreement, as amended from time to time.
"Employee Benefit Programs" - As defined in Section 7.12(a).
"Employee Pension Benefit Plans" - As defined in Section 7.12(a).
"Employee Welfare Benefit Plans" As defined in Section 7.12(a).
"Employment Agreements" - As defined in Section 3.02(a)(viii).
"Environmental Laws" - As defined in Section 7.15(h).
"Environmental Risk Policy" - As defined in Section 9.02(g).
"Equity Shares" - As defined in Section 2.02(a)(i).
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations promulgated thereunder.
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"ERISA Affiliate" - As defined in Section 7.12(a).
"Final Adjustment Calculations" - As defined in Section 2.05(a).
"Financial Statements" shall mean the audited financial statements of
the Company as of December 31, 1999 and December 31, 2000.
"FIRPTA" shall mean the Foreign Investment in Real Property Tax Act,
as amended, and the rules and regulations promulgated thereunder.
"GLD Guarantee" - As defined in Section 3.02(c).
"Hazardous Material" - As defined in Section 7.15(a).
"Income Statement" - As defined in Section 2.05(e).
"Indemnitee" - As defined in Section 9.03.
"Indemnitor" - As defined in Section 9.03.
"IRS" shall mean the Internal Revenue Service.
"Law" shall mean any law, statute, regulation, rule, ordinance,
requirement, announcement or other binding action or requirement of an
Authority.
"Lien" shall mean any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or security agreement or preferential arrangement of any kind or nature
whatsoever.
"Material Contracts" - As defined in Section 7.11(b).
"Multi-Employer Plan" - As defined in Section 7.12(a).
"Net Working Capital" shall mean the total current assets (total
current assets shall be reduced by the amount, if any, of the Undistributed
Earnings, whether or not actually paid on or after the Closing Date) of the
Company MINUS total current liabilities of the Company.
"Net Working Capital Deficiency" - As defined in Section 2.05(g).
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"Net Worth" shall mean the total assets (total assets shall be reduced
by the amount, if any, of the Undistributed Earnings, whether or not actually
paid on or after the Closing Date) of the Company MINUS the total liabilities of
the Company.
"Net Worth Deficiency" - As defined in Section 2.05(f).
"Non-Tax Warranty Claims" - As defined in Section 9.02(c).
"Note" - As defined in Section 2.02(a)(ii).
"Notice of Claim" - As defined in Section 9.03.
"Operating Stockholder" shall mean Xxxxxxxxxxx X. Xxxxxxx or Xxxxxx X.
Xxxxxxx, individually and "Operating Stockholders" shall mean Xxxxxxxxxxx X.
Xxxxxxx and Xxxxxx X. Xxxxxxx, collectively.
"Order" shall mean any decree, order, judgment, writ, award,
injunction, stipulation or consent of or by an Authority.
"Other Stockholders" shall mean all stockholders of the Company other
than the Operating Stockholders.
"PBGC" - As defined in Section 7.12(e).
"PCBs" - As defined in Section 7.15(a).
"Person" shall mean any natural person, corporation, limited liability
company, partnership, joint venture, trust, association or unincorporated entity
of any kind.
"Pro Rata Percentage" means, as to each Stockholder, the percentage of
the Purchased Shares owned by such Stockholder.
"Purchased Shares" - As defined in the recitals hereto.
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"Purchaser Common Stock" shall mean 1,000 shares of Purchaser's common
stock, with $.01 per share par value, 800 of which are voting shares and 200 of
which are non-voting shares.
"Real Property" - As defined in Section 7.15(b).
"Release" - As defined in Section 7.15(b).
"Representative" - As defined in Section 14.01.
"Stockholders Agreement" - As defined in Section 3.02(a)(xv).
"Tax Claims" - As defined in Section 9.02(a).
"Taxes" - As defined in Section 7.20(a).
"Threshold" - As defined in Section 9.02(c).
"Underground Storage Tanks" - As defined in Section 7.15(d).
"Undistributed Earnings" shall mean the 2000 Undistributed Earnings
and the 2001 Undistributed Earnings.
ARTICLE II
PURCHASE AND SALE OF PURCHASED SHARES,
PURCHASE PRICE AND OTHER RELATED MATTERS
2.01. PURCHASE AND SALE. Upon the terms and subject to the conditions
of this Agreement, and in reliance upon the representations, warranties,
covenants and agreements made herein, each Stockholder shall sell, assign,
convey, transfer and deliver the Purchased Shares owned by such Stockholder to
Purchaser at the Closing on the Closing Date, and Purchaser shall purchase the
Purchased Shares from each such Stockholder at the Closing on the Closing Date.
2.02. PURCHASE PRICE. The aggregate consideration for the Purchased
Shares shall be the sum of the following:
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(a) The Purchaser shall issue and deliver to the Operating
Stockholders (i) certificates representing 200 shares of Purchaser Non-Voting
Common Stock, representing when issued, 20% of the total issued and outstanding
Purchaser Common Stock (collectively, "Equity Shares"); and (ii) junior
subordinated promissory notes in the aggregate original principal amount of $3
Million ("Note") bearing interest at the per annum rate stated therein and each
in the form set forth in EXHIBIT A attached hereto and made a part hereof. The
number of Equity Shares and principal amount of the Note issuable to each
Operating Stockholder shall be as set forth on EXHIBIT B attached hereto and
made a part hereof.
(b) The Purchaser shall pay to the Stockholders an aggregate amount
equal to $35 Million ("Cash Amount") LESS any Adjustment Amount ("Cash
Portion"). Each Stockholder's respective percentage of the Cash Amount and the
Adjustment Amount is as follows:
% OF CASH % OF ADJUSTMENT
STOCKHOLDERS AMOUNT AMOUNT
Xxxxxxx X. Xxxxxxxxxxx 28.57% 25%
Xxxxxx X. XxXxxxxxxxx 28.57% 25%
Xxxxxx X. Xxxxxxx 10.72% 12.5%
Xxxxxxxxxxx X. Xxxxxxx 32.14% 37.5%
------ ----
TOTAL 100% 100%
2.03. PAYMENT OF CONSIDERATION.
(a) At the Closing on the Closing Date, Purchaser shall:
(i) issue and deliver to the Operating Stockholders certificates
representing the Equity Shares;
(ii) issue and deliver to the Operating Stockholders a Note; and
(iii) pay to the Stockholders their respective amount of the Cash
Portion.
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(b) The Cash Portion payable pursuant to Section 2.03(a)(iii) above
shall be by wire transfer of immediately available federal funds for credit to
the recipient thereof to a bank account or accounts designated by the recipient
in writing to Purchaser prior to Closing.
2.04. UNDISTRIBUTED EARNINGS. Immediately prior to the Closing, the
Company shall pay to the Stockholders their Pro Rata Percentage of the
Undistributed Earnings by wire transfer of immediately available federal funds
for credit to the recipient thereof to a bank account or accounts designated by
the recipient in writing to the Company prior to the Closing.
2.05. ADJUSTMENT. (a) The Stockholders shall cause the Company to
prepare from the books and records of the Company and deliver to Purchaser and
the Stockholders at least ten (10) days prior to the Closing Date (i) an
unaudited balance sheet of the Company as of March 31, 2001 (the "Closing
Balance Sheet"); (ii) a related unaudited operating statement of the Company for
the three (3) months ended March 31, 2001 ("Income Statement"); (iii) the
certification of the Company's President and Treasurer stating that such
financial statements have been prepared in accordance with generally accepted
accounting principles consistently applied; and (iv) calculations of the Net
Worth and Net Working Capital of the Company as of March 31, 2001, the 2000
Undistributed Earnings and the Company's best estimate of the 2001 Undistributed
Earnings, in each case prepared on the basis of the Closing Balance Sheet,
Income Statement and the financial records (through the Closing Date) of the
Company (collectively the "Final Adjustment Calculations").
(b) Purchaser shall be entitled to observe any activities of the
Company in the preparation of the Closing Balance Sheet, including without
limitation the taking of any physical inventory, the Income Statement and the
Final Adjustment Calculations. The Closing Balance
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Sheet, Income Statement and the Final Adjustment Calculations shall be prepared
in a manner consistent with generally accepted accounting principles and the
Financial Statements.
(c) Within five (5) days after the Closing Balance Sheet, Income
Statement and the Final Adjustment Calculations are delivered to Purchaser
pursuant to Section 2.05(a) hereof, Purchaser shall complete its examination
thereof and shall deliver to the Representative either (i) a written
acknowledgment accepting the Closing Balance Sheet, Income Statement and the
Final Adjustment Calculations; or (ii) a written report setting forth in
reasonable detail any proposed adjustments to the Closing Balance Sheet, Income
Statement and the Final Adjustment Calculations (the "Adjustment Report"). If
Purchaser fails to respond to the Representative within such five (5) day
period, Purchaser shall be deemed to have accepted and agreed to the Closing
Balance Sheet, Income Statement and the Final Adjustment Calculations as
delivered pursuant to Section 2.05(a) hereof.
(d) In the event the Representative and Purchaser fail to agree on any
of Purchaser's proposed adjustments contained in the Adjustment Report prior to
the Scheduled Closing Date, then the Closing Date shall be delayed, subject to
Article XII, until the Closing Balance Sheet, Income Statement and Final
Adjustment Calculations are agreed to by the parties hereto.
(e) The term "Closing Balance Sheet", "Income Statement" and "Final
Adjustment Calculation" as those terms have been hereinbefore and will be
hereinafter used, shall mean the Closing Balance Sheet and Income Statement
delivered pursuant to Section 2.05(a), as adjusted, if at all, pursuant to this
Section 2.05.
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(f) In the event the Net Worth as reflected on the Closing Balance
Sheet is less than $6 Million, the amount of such deficiency is hereinafter
referred to as the "Net Worth Deficiency."
(g) In the event the Net Working Capital as reflected on the Closing
Balance Sheet is less than $5.0 Million, the amount of such deficiency is
hereinafter referred to as the "Net Working Capital Deficiency."
(h) The greater of the Net Worth Deficiency and the Net Working
Capital Deficiency is hereinafter referred to as the "Adjustment Amount."
ARTICLE III
CLOSING AND CLOSING DATE DELIVERIES
3.01. CLOSING AND CLOSING DATE. The term "Closing" as used herein
shall refer to the actual conveyance, transfer, assignment and delivery of the
certificates representing the Purchased Shares to Purchaser in exchange for the
consideration set forth in Section 2.03(a) of this Agreement. The Closing shall
take place at the offices of Winston & Xxxxxx, 00 Xxxx Xxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxx at 10:00 a.m. Chicago local time, on the fifth business day following
the date upon which all of the conditions precedents set forth in Articles X and
XI of this Agreement are satisfied or waived by the appropriate party hereto,
subject to Article XII of this Agreement (the "Closing Date"), or at such other
place and time or on such other date as is mutually agreed to in writing by the
Representative and Purchaser.
3.02. CLOSING DELIVERIES. At the Closing on the Closing Date:
(a) Each Stockholder or the Company, as appropriate, shall deliver to
Purchaser the following:
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(i) certificates representing all of the Purchased Shares, which
certificates shall be either (A) duly endorsed or (B) accompanied by stock
powers duly executed with signatures guaranteed;
(ii) written resignations, effective on the Closing Date, of all
of the officers and directors of the Company;
(iii) all corporate and other records of the Company, including
but not limited to, minute books, stock books and registers, books of account,
leases and contracts, tax returns, reports and relevant workpapers, financial
records, tax returns and records and personnel records;
(iv) Articles of Incorporation or other appropriate charter
documents of the Company, certified as of a date not earlier than ten (10) days
prior to the Closing Date by the Secretary of State of the Commonwealth of
Massachusetts;
(v) certificates, dated as of a date not earlier than ten (10)
days prior to the Closing Date, of the Secretary of State of the Commonwealth of
Massachusetts and of each of the jurisdictions in which the Company is qualified
to transact business as a foreign entity as to the good standing of the Company
in such jurisdictions;
(vi) By-laws of the Company certified, as of the Closing Date, by
its clerk or other appropriate corporate officer;
(vii) the opinion of Messrs. Xxxxxxxx, Xxxxx and Xxxxxxx, counsel
to the Company and the Stockholders, dated the Closing Date, with respect to the
matters set forth on EXHIBIT C attached hereto;
(viii) Messrs. Xxxxxxxxxxx and Xxxxxx X. Xxxxxxx shall have each
executed an Employment Agreement with the Company in the form attached hereto as
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EXHIBIT D (collectively, the "Employment Agreements") and executed a termination
agreement with respect to their prior employment agreements in a form
satisfactory to Purchaser;
(ix) certified copies of minutes or unanimous written consents of
the Board of Directors of the Company approving the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated under this Agreement;
(x) an agreement among the Stockholders agreeing to the allocation
of the consideration as set forth in this Agreement and a general release of
Purchaser with respect to such allocation in a form satisfactory to Purchaser
and its counsel;
(xi) an executed original of each consent required to be obtained
pursuant to Section 10.05;
(xii) all releases necessary to terminate and discharge any Liens
on the Purchased Shares and the Company's assets, other than, with respect to
the Company assets, the Liens set forth in Section 7.08(a) of the Disclosure
Letter;
(xiii) evidence of the repayment in full of the aggregate amount
of all loans (including, without limitation, principal, interest and fees) due
and owing to the Company from any Stockholder or any Affiliate, officer,
director or employee of the Company;
(xiv) evidence that Stockholders have designated Xxxxxxxxxxx X.
Xxxxxxx as the Representative in accordance with Section 14.01;
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(xv) The Operating Stockholders shall have executed the
Stockholders Agreement with GLD Corporation and the Purchaser in the form set
forth in EXHIBIT E attached hereto ("Stockholders Agreement");
(xvi) a mutual general release between the Stockholders and the
Company pursuant to which all pre-Closing claims are released and discharged,
such release to be in the form set forth in EXHIBIT F attached hereto ("Mutual
Release"); and
(xvii) such other documents to be delivered by the Stockholders
and the Company, as appropriate, hereunder or as Purchaser or its counsel may
reasonably request to carry out the purposes of this Agreement.
(b) Purchaser and GLD Corporation, as appropriate, shall deliver to
the Stockholders or the Company, as appropriate, or, in the case of clause (iv)
below, cause the Company to pay or deliver, the following:
(i) the payment of the Cash Portion to be delivered by Purchaser
pursuant to Section 2.03(a)(iii);
(ii) the certificates for the Equity Shares to be delivered by
Purchaser pursuant to Section 2.03(a)(i);
(iii) the Note to be delivered by Purchaser pursuant to Section
2.03(a)(ii);
(iv) the Undistributed Earnings to be paid by the Company pursuant
to Section 2.04 hereof.
(v) certified copies of minutes or unanimous written consents of
the Board of Directors of Purchaser approving the execution, delivery and
performance
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of this Agreement and the consummation of the transactions contemplated under
this Agreement;
(vi) certified copies of minutes or unanimous written consents of
the Boards of Directors of GLD Corporation approving the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated under this Agreement;
(vii) Certificate of Incorporation of Purchaser, certified as of a
date not earlier than ten (10) days prior to the Closing Date by the Secretary
of the Commonwealth of Massachusetts;
(viii) Certificate of Incorporation of GLD Corporation, certified
as of a date not earlier than ten (10) days prior to the Closing Date by the
Secretary of State of the State of Delaware;
(ix) certificate, dated as of a date not earlier than ten (10)
days prior to the Closing Date, of the Secretary of the Commonwealth of
Massachusetts as to the good standing of Purchaser in such jurisdiction;
(x) certificate, dated as of a date not earlier than ten (10) days
prior to the Closing Date, of the Secretary of State of the State of Delaware as
to the good standing of GLD Corporation in such jurisdiction;
(xi) By-laws of Purchaser certified, as of the Closing Date, by
its clerk or other appropriate corporate officer;
(xii) the opinions of Winston & Xxxxxx and special Massachusetts
counsel to Purchaser, each dated the Closing Date, with respect to the matters
set forth on EXHIBIT G attached hereto;
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(xiii) the Stockholders Agreement executed by GLD Corporation and
the Purchaser; and
(xiv) such other documents to be delivered by Purchaser hereunder
or as the Representative or Stockholders' counsel may reasonably request to
carry out the purposes of this Agreement.
(c) At the Closing on the Closing Date, GLD Corporation shall issue to
the Operating Stockholders its subordinated guaranty of the Notes in the form
set forth in EXHIBIT H attached hereto ("GLD Guarantee").
3.03. POST CLOSING COOPERATION. The Stockholders and Purchaser
shall, on request, on and after the Closing Date, cooperate with one another
by furnishing any additional information, executing and delivering any
additional documents and/or instruments and doing any and all such other
things as may be reasonably required by the parties or their counsel to
consummate or otherwise implement the transactions contemplated by this
Agreement.
ARTICLE IV
GOVERNMENTAL FILINGS
4.01. OTHER FILINGS. The Stockholders, the Company and Purchaser
covenant and agree with each other to (a) promptly file, or cause to be promptly
filed, with any Authority, all such notices, applications or other documents as
may be necessary to consummate the transactions contemplated hereby and (b)
thereafter diligently pursue all consents or approvals from any Authority as may
be necessary to consummate the transactions contemplated hereby.
ARTICLE V
PRE- AND POST-CLOSING COVENANTS
5.01. ACCESS. The Company shall at all reasonable times prior to the
Closing Date make the offices, on-site personnel and equipment, facilities,
machinery and equipment,
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inventories, books of account and records of the Company available for
examination and inspection by Purchaser and its representatives, advisors and
agents; PROVIDED, HOWEVER, prior to any on-site visit or contact or any other
communication with non-Stockholder employees of the Company, Purchaser shall
obtain Xxxxx Xxxxxxx'x consent thereto, which consent will not be unreasonably
withheld. No such examination, inspection or audit by Purchaser or its
representatives, advisors or agents shall in any way affect, diminish or
terminate any of the representations, warranties or covenants of the Company or
the Stockholders herein expressed.
5.02. PRE-CLOSING COVENANTS. From and after the date hereof and until
the Closing Date, the Company shall (and the Stockholders shall cause the
Company to), unless Purchaser shall otherwise agree in writing:
(a) operate and maintain the business of the Company in the ordinary
course of business and refrain from doing, or causing to be done, anything which
is represented and warranted not to have been done since the Balance Sheet Date
in Sections 7.18(a) through (o) hereof;
(b) continue to insure the Company's Real Property, assets and risks
substantially in accordance with the manner set forth in the Disclosure Letter,
and use, operate, maintain and repair all such Real Property, assets and risks
in accordance with the Company's prior practice to the extent not inconsistent
with Section 5.02(g) hereof;
(c) use its best efforts (without making any commitments on behalf of
Purchaser) to preserve the Company's business organizations intact, keep
available the services of the Company's present employees, and preserve the
Company's present relationships with its employees, vendors, suppliers and
customers and others having business relationships with it;
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(d) refrain from doing any act or omitting to do any act, or
permitting any act or omission to act, which will cause a breach of any material
agreement, contract, commitment or obligation of the Company;
(e) furnish to Purchaser such accounting information or financial
statements regularly generated by the Company promptly after the same is
available;
(f) not solicit, encourage, cooperate with or facilitate (by way of
furnishing information, or otherwise) any inquiries or proposals (other than the
transaction contemplated hereby) for the acquisition of the stock, assets or
business of the Company;
(g) maintain and keep the facilities, machinery and equipment of the
Company that are necessary to the operation of the business being conducted by
the Company in good operating condition and repair, except for ordinary wear and
tear;
(h) not merge or consolidate with any other Person;
(i) consult with Purchaser regarding all significant developments,
transactions and proposals relating to the business and operations of the
Company;
(j) promptly notify Purchaser of any material adverse change which may
hereafter occur with respect to (i) the condition, financial or otherwise,
operations, prospects, assets, liabilities, contracts, licenses, rights or
results of operations of the Company whether or not covered by insurance, or
with respect to relationships between the Company and any of its employees,
creditors, suppliers, vendors, customers or others having business relationships
with the Company or (ii) any Law or regulation applicable to the Company;
(k) not enter into, or become obligated under, any lease, contract,
agreement or commitment (other than project bids or contracts which are governed
by Section 5.02(l) below), except for any lease, contract, agreement or
commitment (i) having a term of one (1)
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year or less and involving either a payment by or to the Company of less than
$250,000, and (ii) entered into in the ordinary and regular course of business;
(l) not submit any binding bids for projects or enter into, or become
obligated under, any contracts, agreements or commitments necessary to perform
projects, which are in excess of $4 million, without the prior review and
approval of Purchaser which will not be unreasonably withheld;
(m) not change, amend, terminate or otherwise modify any material
lease, contract, agreement or commitment;
(n) not make any non-cash distributions to any of the Stockholders;
and
(o) promptly notify Purchaser of any claims, including without
limitation claims for indemnification, asserted against the Company and of any
pending or threatened claims as to which the Company or any Stockholder becomes
aware.
5.03. SUPPLEMENTAL DISCLOSURES. The Stockholders shall have the
continuing obligation to supplement promptly and amend the Disclosure Letter as
necessary or appropriate with respect to any matter hereafter arising or
discovered which, if existing or known at the date of this Agreement, would have
been required to be set forth or described in the Disclosure Letter; PROVIDED,
HOWEVER, that for the purpose of the rights and obligations of the parties
hereunder, any such supplemental or amended disclosure shall not, except as
Purchaser may otherwise agree in writing, be deemed to have cured any material
breach of any representation or warranty made in this Agreement.
5.04. PRE-CLOSING TAXES. (a) The Operating Stockholders shall be
jointly and severally liable for all taxes imposed on or incurred by the Company
for any taxable period ending on or before the Closing Date; and (b) the Other
Stockholders shall be severally liable for
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their Pro-Rata Percentage for all taxes imposed or incurred by the Company for
any taxable period which includes the period from January 1, 1998 to the Closing
Date.
5.05. ESTOPPEL LETTERS. With respect to each parcel of real estate
leased by the Company and identified in EXHIBIT I-1, the Company shall deliver
to Purchaser at the Closing on the Closing Date an Estoppel Letter in the form
attached hereto as EXHIBIT I-2 executed by the appropriate lessor.
5.06. OFFICE LEASE. Pending Closing, the Company shall execute a
written lease agreement for its office location at 000 Xxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxxxxx on terms and conditions acceptable to Purchaser and the Company.
5.07. CONSENTS AND APPROVALS. The Company will use its best efforts to
deliver to Purchaser the written consents, waivers, approvals, licenses and
authorizations, governmental or otherwise, in form and substance reasonably
satisfactory to Purchaser which are required to be obtained by the Company prior
to the consummation of any of the transactions contemplated hereby, whether
pursuant to Law, agreement, commitment or otherwise.
5.08. STOCKHOLDER ADVANCES. On or prior to the Closing on the Closing
Date, any Stockholder who owes any indebtedness to the Company shall pay in cash
in full to the Company the entire outstanding balance of principal and interest
of such indebtedness and such amounts when paid shall be treated as if paid
prior to March 31, 2001 for purposes of determining the Adjustment Amount.
5.09. POST-CLOSING COVENANT. GLD Corporation and Purchaser covenant
and agree with the Stockholders that the Company will not amend any Tax returns
of the Company for periods prior to the Closing Date which would result in the
Stockholders or the Company being required to pay additional Taxes, unless such
amendment is required by applicable law.
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ARTICLE VI
FINANCIAL STATEMENTS AND OTHER DOCUMENTS
DELIVERED AND ACTIONS TAKEN
6.01. PRE-SIGNING DELIVERIES. Prior to the date hereof, the Company
and the Stockholders have heretofore delivered to Purchaser:
(a) the Financial Statements;
(b) a true and correct copy of the Articles of Incorporation or other
appropriate charter documents of the Company, including all amendments thereto,
certified to by the clerk of the Company;
(c) a true and correct copy of the By-laws of the Company, certified
to by the clerk of the Company; and
(d) a disclosure letter (the "Disclosure Letter") of even date
herewith addressed to Purchaser and signed by the Company and each Stockholder,
accompanied or preceded by a copy of each contract, agreement, commitment or
plan or other document or instrument referred to therein (except as provided in
the last sentence of Section 7.11(a) hereof).
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
As an inducement to Purchaser to enter into and perform this
Agreement, and in consideration of the covenants of Purchaser contained herein,
the Stockholders, jointly and severally, represent and warrant to Purchaser
(which warranties and representations shall survive the Closing regardless of
what examination, inspections, audits and other investigations Purchaser has
heretofore made or may hereafter make, with respect to such warranties and
representations), subject to the limitations set forth in Article IX, as
follows:
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7.01. DUE INCORPORATION AND AUTHORITY. (a) The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has the corporate power and lawful
authority to (i) own its properties and to transact the business in which it is
currently engaged and (ii) approve this Agreement and to consummate the
transactions contemplated hereby. The Company is duly qualified to do business
and is in good standing as a foreign corporation in each jurisdiction where it
owns or leases real property and where the nature of its business requires it to
be so qualified; and
(b) The execution and delivery by the Company of this Agreement, and
the performance by the Company of its obligations hereunder, have been duly and
validly authorized and approved by all necessary corporate action on the part of
the Company. This Agreement is binding upon, and enforceable against, the
Company and each Stockholder in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws affecting
creditors' rights generally and by general principles of equity (whether in a
proceeding at law or in equity).
7.02. NO SUBSIDIARIES. The Company does not own any capital stock or
other securities or any other direct or indirect interest or investment in any
Person.
7.03. NO CONFLICTS. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby, nor
compliance by the Company and the Stockholders with any of the provisions
hereof, will:
(a) violate, or conflict with, or result in a breach of any provisions
of, or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or result in the termination of, or
accelerate the performance required by, or result in the creation of any Lien
upon any of the properties or assets of the Company or the Purchased
- 21 -
Shares, under any of the terms, conditions or provisions of the Certificate of
Incorporation or By-laws of the Company, or any note, bond, mortgage, indenture,
deed of trust or any other material license, agreement, lease or other
instrument or obligation to which the Company or any Stockholder is a party, or
by which the Company or the Company's properties or assets or any Stockholder
may be bound or affected;
(b) except as set forth in the Disclosure Letter, require the consent
or approval of, or the making of any filing with, any third Person; or
(c) violate any Law or Order applicable to the Company or any
Stockholder or any of the properties or assets of the Company.
7.04. CAPITALIZATION. (a) The Company has, and on the Closing Date
will have, total authorized capital stock of 1,000 shares of common stock,
without par value. The Purchased Shares constitute the only shares of capital
stock of the Company which are issued and outstanding. The Company does not hold
any of its shares of capital stock in its treasury.
(b) The Purchased Shares are validly issued, fully paid and
nonassessable and are not subject to any preemptive rights, and there are no
voting trust agreements or other contracts, agreements or arrangements
restricting voting or dividend rights or transferability with respect to the
Purchased Shares.
(c) The Stockholders own the Purchased Shares free and clear of any
Liens and upon delivery of the payment by Purchaser to each Stockholder of his
allocable amount of the Cash Portion, as the case may be, Purchaser will acquire
good and marketable title to the Purchased Shares free and clear of all Liens.
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(d) There are no outstanding options, warrants, rights, privileges or
other arrangements, preemptive, contractual or otherwise, to acquire any shares
of capital stock or other securities of, or equity interests in the Company.
7.05. FINANCIAL STATEMENTS. The Financial Statements (a) were prepared
in accordance with the books and records of the Company; (b) present fairly in
all material respects the financial position and results of operations of the
Company at the dates and for the periods indicated therein; and (c) have been
prepared in accordance with generally accepted accounting principles, applied on
a consistent basis.
7.06. UNDISCLOSED LIABILITIES. (a) On the Balance Sheet Date, the
Company did not have any debts, liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise), which were not fully
disclosed, reflected or reserved against in the Balance Sheet or the notes
thereto, except (i) as disclosed in the Disclosure Letter and (ii) for
immaterial liabilities or obligations of a nature not required by generally
accepted accounting principles to be disclosed on a balance sheet. Except for
current liabilities or obligations which have been incurred since the Balance
Sheet Date in the ordinary course of business and other immaterial liabilities
and obligations of a nature not required by generally accepted accounting
principles to be disclosed on a balance sheet, since the Balance Sheet Date the
Company has not incurred any debt, liability or obligation of any nature
(whether accrued, absolute, contingent or otherwise).
(b) Except for immaterial liabilities and obligations of a nature not
required by generally accepted accounting principles to be disclosed on a
balance sheet, the Closing Balance Sheet shall reflect all debts, liabilities or
obligations of the Company of any nature (whether accrued, absolute, contingent
or otherwise).
- 23 -
7.07. REAL ESTATE. (a) The Disclosure Letter contains a true and
complete list and brief description of all real property owned, leased,
subleased, occupied, operated or used by the Company, as lessee, sublessee or
otherwise, including all significant structures located thereon. The Disclosure
Letter also lists all real property which the Company has ever owned, leased,
subleased, occupied, operated or used.
(b) The Company has a valid and enforceable leasehold interest in each
parcel of real property disclosed in the Disclosure Letter as being leased or
subleased by it and has performed all the obligations required to be performed
by it to the date hereof under the leases relating thereto.
(c) Except as disclosed in the Disclosure Letter, the Stockholders and
the Company are not aware of anything which is not disclosed herein or in the
Disclosure Letter which would materially interfere with or materially impair the
present use by the Company of any portion of such real property.
7.08. TITLE AND CONDITION. (a) The Company has good and marketable
title to all assets and properties reflected on the Balance Sheet and all assets
and properties acquired since the Balance Sheet Date, free and clear of all
Liens, except for (i) Liens reflected on the Balance Sheet, (ii) the Liens set
forth in the Disclosure Letter, and (iii) sales and dispositions of inventory
since the Balance Sheet Date in the ordinary course of business.
(b) All tangible personal property owned by the Company is in normal
operating condition and repair, subject to customary wear and tear.
7.09. RELATED PARTY TRANSACTIONS. Except as described in the
Disclosure Letter, no Affiliate, Stockholder, officer or director of the Company
or any person who would be an heir or descendant of such Affiliate, Stockholder
officer or director if he were not now living, and, to
- 24 -
the best knowledge of the Stockholders, no employee of the Company (a) has any
direct or indirect interest in (i) any Person which transacts business with the
Company; or (ii) any property, asset or right which is used by the Company in
the conduct of its business; or (b) has any contractual relationship with the
Company other than such relationship as attaches to being an employee, officer
or director. All transactions, if any, between the Company and any officer,
director, stockholder, employee or Affiliate thereof within the three (3) year
period immediately preceding the date hereof have been made on the basis of an
arms-length transaction.
7.10. ACCOUNTS RECEIVABLE. The accounts, notes, contracts and other
receivables which are reflected in the Closing Balance Sheet and which were
acquired since December 31, 2000 were acquired by the Company in the ordinary
course of business and are bona fide and due and will be collected without
setoff, compensation or counterclaim subject to the reserve set forth in the
Closing Balance Sheet or the Disclosure Letter.
7.11. CONTRACTS. (a) The Disclosure Letter contains a true and
complete list of all written and oral contracts, agreements, or commitments to
which the Company is a party or is bound, including but not limited to,
demolition contracts, project contracts, purchase or other commitments,
distributorship, franchise or similar agreements, patent or trademark license
agreements (either as licensor or licensee), lease or sublease agreements
(either as lessor or lessee), equipment leases, employment agreements
(including, but not limited to, agreements entered into by employees of the
Company relating to the transfer and/or safeguarding of intellectual property
rights), consulting agreements and union or collective bargaining agreements,
guarantees, loan agreements, non-competition agreements, severance agreements,
letters of credit, joint venture or partnership agreements, supply or
requirements contracts, except for any contracts, agreements or commitments
which were entered into in the ordinary course of
- 25 -
business and either (i) involve payments to or by the Company of $500,000 or
less over the remaining term of the agreement or (ii) are terminable by the
Company on sixty (60) days' or less notice without penalty. Purchaser agrees
that with respect to the project bids and contracts of the Company listed in the
Disclosure Letter, the Company does not need to deliver copies thereof to
Purchaser, except for those specifically requested and need only provide
Purchaser with access thereto.
(b) All contracts, agreements and commitments (whether oral or
written) required to be set forth in the Disclosure Letter by Section 7.11(a)
hereof (herein referred to as "Material Contracts") to which the Company is a
party, or under which the Company may be obligated, or to which the Company or
any of their respective rights, properties or assets may be subject or bound,
are valid, binding and enforceable in accordance with their terms.
(c) Neither the Company, nor to the best knowledge of the
Stockholders, any other Person is in breach of, or default under, any Material
Contract to which the Company is a party; and no event or action has occurred,
is pending, or to the best knowledge of the Stockholders, is threatened, which
after the giving of notice, or the lapse of time, or otherwise, would constitute
or result in a breach or default by the Company, or to the best knowledge of the
Stockholders, any other Person under any Material Contract to which the Company
is a party.
7.12. ERISA. (a) The Disclosure Letter contains a true and complete
list of all "employee pension benefit plans," as defined in Section 3(2) of
ERISA (the "Employee Pension Benefit Plans"), and all "employee welfare benefit
plans, " as defined in Section 3(1) of ERISA (the "Employee Welfare Benefit
Plans"), which are established, maintained or contributed to by the Company, or
any ERISA Affiliate and that covers any employee or former employee of the
Company or under which the Company has any liability (collectively, the
"Employee Benefit
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Programs"). For purposes of this Section 7.12, "ERISA Affiliate" means any
person which, together with the Company, is treated as a single employer for any
purpose under Section 414(b) or (c) of the Code or Section 4001(b)(1) of ERISA.
Each Employee Benefit Program which is (i) an Employee Pension Benefit Plan;
(ii) a multi-employer plan as defined in Section 3(37) of ERISA (a
"Multi-Employer Plan"); (iii) a plan maintained in connection with any trust
described in Section 501(c)(9) of the Code; or (iv) subject to Title IV of
ERISA, is so identified in the Disclosure Letter. Neither the Company nor any
ERISA Affiliate has caused to be terminated in whole or in part or merged any
Employee Benefit Program during the five-year period ending on the Closing Date.
(b) With respect to each Employee Benefit Program, to the extent
applicable to such program, the Company has, or before the Closing Date will
have, delivered or made available to Purchaser true and complete copies of: (i)
the most recent IRS determination letter; (ii) the most recent Annual Report
(Form 5500 Series) and accompanying schedules, as filed pursuant to applicable
law; (iii) the Summary Plan Description (as currently in effect) distributed to
employees; (iv) the most recent trustee reports, financial statements, actuarial
reports and audit reports prepared in connection therewith; (v) any material
written communications distributed to employees that modify the Summary Plan
Description; (vi) any written interpretation of such Employee Benefit Programs
prepared by or at the request of the Company and (vii) the most recent documents
(including the plan, related trust and insurance contracts and any amendments
thereto) governing the Employee Benefit Programs.
(c) Each Employee Pension Benefit Plan and Employee Welfare Plan
complies currently, and has complied in the past in each case in all material
respects both as to form and operation, with the terms of such plans and with
the applicable provisions of ERISA,
- 27 -
the Code and other applicable Laws. All necessary governmental approvals for the
Employee Benefit Programs have been obtained and a favorable determination as to
the qualification under Section 401(a) of the Code, of each of the Employee
Pension Benefit Plans and each amendment thereto has been made by the IRS, and a
recognition of exemption from federal income taxation under Section 501(a) of
the Code of each of the funded Employee Welfare Benefit Plans has been made by
the IRS, and nothing has occurred since the date of such determination or
recognition letter that would adversely affect such qualification or exemption.
(d) With respect to any Employee Benefit Program: (i) there are no
actions, suits or claims (other than routine, non-contested claims for benefits)
pending or, to the knowledge of the Stockholders, threatened which could
reasonably be expected to be asserted against the Company or an ERISA Affiliate
in connection therewith or against any administrator or fiduciary thereof; (ii)
no "prohibited transaction" (within the meaning of Section 406 of ERISA or
Section 4975 of the Code) has occurred; and (iii) nothing done or omitted to be
done and no transaction or holding of any asset under or in connection therewith
has or will make the Company or an ERISA Affiliate or any officer or director of
the Company or an ERISA Affiliate subject to any liability under Title I of
ERISA or liable for any tax pursuant to Section 4972, Sections 4975 through
4980, inclusive, or Section 4980B of the Code.
(e) With respect to an Employee Pension Benefit Plan: (i) no
"accumulated funding deficiency" (as defined in Section 412 or the Code) exists,
whether or not waived; (ii) no "reportable event" (as defined in Section 4043(b)
of ERISA) has occurred or is continuing to occur with respect thereto; (iii) no
notice of intent to terminate has been filed nor has any such Plan been
terminated pursuant to the provisions of Section 4041 of ERISA; (iv) the Pension
Benefit Guaranty Corporation (the "PBGC") has not instituted proceedings to
terminate (or
- 28 -
appoint a trustee to administer) any such plan and no event has occurred or
condition exists which might constitute grounds under the provisions of Section
4042 of ERISA for the termination of (or the appointment of a trustee to
administer) any such plan; and (v) the amount for which the Company or an ERISA
Affiliate would be liable pursuant to the provisions of Sections 4062, 4063, or
4064 of ERISA would be zero if such plans had terminated as of the date of this
Agreement.
(f) Neither the Company nor any ERISA Affiliate has (i) ceased
operations of a facility so as to become subject to the provisions of Section
4062(f) of ERISA; (ii) withdrawn as a substantial employer so as to become
subject to the provisions of Section 4063 of ERISA; (iii) ceased making
contributions on or before the date of this Agreement to any Employee Pension
Benefit Plan subject to the provisions of Section 6064(a) of ERISA to which such
entity made (or was obligated to make) contributions during any of the five
years prior to the date of this Agreement; (iv) incurred or caused to occur a
complete withdrawal (within the meaning of Section 4203 of ERISA) or a partial
withdrawal (within the meaning of Section 4205 of ERISA) from a Multi-Employer
Plan so as to incur withdrawal liability under Section 4201 of ERISA (without
regard to subsequent reduction or waiver of such liability under Section 4207 or
4208 of ERISA); or (v) been a party to any transaction or agreement with respect
to which the provisions of Section 4204 of ERISA were applicable.
(g) The Disclosure Letter lists each employment, severance or other
similar contract, arrangement or policy and each plan or arrangement (written or
oral) providing for insurance coverage (including any self-insured
arrangements), workers' compensation, disability benefits, supplemental
unemployment benefits, vacation benefits, retirement benefits or deferred
compensation, profit-sharing, bonuses, stock options, stock appreciation or
other forms of
- 29 -
incentive compensation or post-retirement insurance, compensation or benefits
which (i) is not an Employee Benefit Program, a Multi-Employer Plan or a benefit
described in a collective bargaining agreement a copy of which has been
furnished to Purchaser pursuant to this Agreement; (ii) is established,
maintained or contributed to by the Company, or an ERISA Affiliate; (iii) covers
any employee or former employee of the Company, or an ERISA Affiliate or under
which the Company, or an ERISA Affiliate has any liability (the "Benefit
Arrangements"). With respect to each Benefit Arrangement, the Company has, or
before the Closing will have, delivered or made available to Purchaser true and
complete copies of such contracts, plans, arrangements and descriptions
(including descriptions of the number and level of employees covered thereby)
governing such Benefit Arrangement. Each Benefit Arrangement has been maintained
in substantial compliance with its terms and with the requirements prescribed by
any and all statutes, rulings and regulations which are applicable to such
Benefit Arrangement.
(h) Except as described in the Disclosure Letter: (i) no Employee
Benefit Program or Benefit Arrangement provides post-retirement health, medical
or death benefits for retired employees of the Company or an ERISA Affiliate;
(ii) no action has been taken by the Company that would prevent Purchaser from
amending or terminating any Employee Benefit Program or Benefit Arrangement with
respect to any active employees of the Company or an ERISA Affiliate other than
any limitations imposed under the terms of a collective bargaining agreement;
(iii) there is no accrued liability under any Employee Benefit Program or
Benefit Arrangement which has not been fully provided for by contributions to
such programs or arrangements or which has not been provided for on the Balance
Sheet; and (iv) there has been no amendment thereto, written interpretation or
announcement (whether or not written) by the
- 30 -
Company or any ERISA Affiliate, or change in employee participation or coverage
under any Employee Benefit Program or Benefit Arrangement which would increase
materially the expense of maintaining such Employee Benefit Program or Benefit
Arrangement above the level of expense incurred in respect thereof for the
fiscal year ending on December 31, 1999.
(i) The execution and performance of this Agreement will not
constitute a stated triggering event under any Employee Benefit Program or
Benefit Arrangement that will result in any payment (whether of severance pay or
otherwise) become due from Purchaser or the Company to any employee of the
Company.
(j) The Disclosure Letter contains a true and complete list of the
names, addresses and titles of all current officers, directors, employees,
agents and representatives of the Company. The Company has previously delivered
to Purchaser a true and complete schedule stating the rates of compensation
payable (or paid, as the case may be) to each such person.
7.13. INTELLECTUAL PROPERTY. The Disclosure Letter contains a true and
complete list and brief description of all patents, trademarks, trade names,
service marks and copyrights (whether or not such trademarks, trade names,
service marks and copyrights are registered), and all pending applications
therefor, owned by the Company, or in which the Company has any interest,
together with copies of all licenses, assignments and agreements relating
thereto.
(a) Other than as set forth in the Disclosure Letter, to the best
knowledge of the Stockholders no other patents, trademarks, trade names, service
marks or copyrights are necessary for the conduct of the businesses of the
Company as presently operated.
(b) There is not now and has not been during the past three (3) years
any infringement, misuse or misappropriation by the Company asserted by a third
party in writing to the Company of any valid patent, trademark, trade name,
service xxxx, copyright or trade secret
- 31 -
which relates to the businesses of the Company and which is owned by any third
party, and there is not now any existing or, to the best knowledge of the
Stockholders, threatened claim against the Company of infringement, misuse or
misappropriation of any patent, trademark, trade name, service xxxx, copyright
or trade secret.
(c) There is no pending or threatened claim by the Company against
others for infringement, misuse or misappropriation of any patent, trademark,
trade name, service xxxx, copyright or trade secret owned by the Company.
(d) Neither the Stockholders nor any Affiliate, officer or director of
the Company owns, directly or indirectly, in whole or in part, any invention,
patent, proprietary right, trademark, service xxxx, trade name, brand name or
copyright or application therefor (i) which the Company is presently using; (ii)
the use of which is necessary for the business of the Company; or (iii) which
pertains to the business in which the Company is engaged.
7.14. LITIGATION AND OTHER MATTERS. (a) Except as disclosed in the
Disclosure Letter, there are no actions, suits or proceedings pending, or to the
best knowledge of the Stockholders, threatened against or affecting the Company
or any of its properties or businesses, at law or in equity, or before or by any
Authority. The Stockholders do not have any knowledge of any state of facts or
contemplated event which may reasonably be expected to give rise to any such
claim, action, suit, proceeding or investigation. Except as otherwise expressly
indicated in the Disclosure Letter, all actions, suits or proceedings referenced
in the Disclosure Letter are covered by valid and collectible insurance policies
in favor of the Company, as to which any required claims in respect of such
actions, suits or proceedings have been duly asserted by the Company, and such
insurance will respond for its full limits and to its expected extent with
- 32 -
respect to such claims. The Company is not operating under, or subject to, or in
default with respect to, any Order.
(b) The Company is not conducting or carrying on and has not conducted
or carried on its business or affairs in violation of any Law or Order.
(c) There is no labor trouble, dispute, grievance, controversy, strike
or request for union representation pending, or to the Stockholders' best
knowledge, threatened against the Company relating to or affecting its
businesses or operations, and the Stockholders do not know of the occurrence of
any event which would give rise to any such labor trouble, dispute, controversy,
strike or request for representation.
(d) The Company has all governmental licenses, permits, authorizations
and approvals necessary to own and operate its properties and to carry on and
conduct its business as presently carried on and conducted, except for any
immaterial licenses, permits, authorizations and approvals which would not
impair the operations of the Company. Such licenses, franchises, permits and
other governmental authorizations are valid and in effect and the Company has
not received any notice that any Authority intends to cancel, terminate or not
renew any of the same. The Disclosure Letter contains a true, correct, complete
and accurate list of governmental licenses, permits, authorizations and
approvals obtained by or issued to the Company.
7.15. ENVIRONMENTAL MATTERS. To the best knowledge of the
Stockholders: (a) the Company has not in the conduct of its business or
operations transported, stored, treated or disposed, nor has it allowed or
arranged for any third Person to transport, store, treat or dispose, of
Hazardous Material or other waste to or at any location other than a site
lawfully permitted at the time to receive such Hazardous Material or other waste
for such purposes, nor has it performed, arranged for or allowed by any method
or procedure such transportation, storage,
- 33 -
treatment or disposal in contravention of any laws or regulations in force at
the time or giving rise to any liability whatsoever. The Disclosure Letter lists
the Hazardous Materials used, generated, stored or disposed of by the Company in
the operation of their businesses. For purposes of this Section 7.15, the term
"Hazardous Material" shall mean (a) any "hazardous substance" as defined in the
Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C.
Section 9601, et seq.), as amended, and the regulations promulgated pursuant
thereto ("CERCLA"), or any similar state law; (b) any petroleum, including crude
oil or any exaction thereof; (c) natural gas liquids, liquefied natural gas or
synthetic gas usable for fuel; (d) any "hazardous chemical" as defined pursuant
to 29 C.F.R. part 1910; and (e) any asbestos, polychlorinated biphenyl ("PCB")
or isomer of dioxin, or any material or thing containing or composed of such
substance.
(b) The Company has not used, generated, treated, stored or disposed
of Hazardous Materials on, into or beneath the surface of any real property
owned, leased, subleased, occupied, operated or used by the Company ("Real
Property") except in compliance with applicable Environmental Laws. There has
not occurred, nor is there presently occurring, in the conduct of the business
or operations of the Company, a Release of any Hazardous Material on, into or
beneath the surface of any Real Property, and no part of such Real Property or,
to the best knowledge of the Stockholders, no part of any adjacent parcels to
the Real Property, including the ground water located thereon, is presently
contaminated by Hazardous Materials. For purposes of this Section 7.15 the term
"Release" shall mean releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, disposing or dumping.
- 34 -
(c) To the best knowledge of the Stockholders, the Company has not
transported or disposed, nor has it allowed or arranged for any third parties to
transport or dispose, in the conduct of its business or operations any Hazardous
Materials or other waste to or at a site which, pursuant to CERCLA or any
similar state law, (i) has been placed on the National Priorities List or its
state equivalent, or (ii) the United States Environmental Protection Agency or
the relevant state agency has proposed or is proposing to place on the National
Priorities List or its state equivalent. Except as described in the Disclosure
Letter, the Company has not received notice, and has no knowledge of any facts
which could give rise to any notice, that the Company is a potentially
responsible party for a federal or state environmental cleanup site arising from
or relating to the business or operations of the Company or for corrective
action arising from or relating to the business or operations of the Company
under CERCLA or any other applicable law or regulation. Except as described in
the Disclosure Letter, the Company has not received any written or oral request
for information in connection with any federal or state environmental cleanup
site arising from or relating to the business or operations of the Company or
has not undertaken (or been requested to undertake) any response or remedial
actions or cleanup action of any kind arising from or relating to the business
or operations of the Company at the request of any federal, state or local
governmental entity, or at the request of any other person or entity.
(d) Except as identified in the Disclosure Letter, there are no
Underground Storage Tanks, asbestos containing materials, or PCB capacitors and
transformers on the Real Property. There has been no Release from any
Underground Storage Tank or any PCB transformer or capacitor. None of the
Underground Storage Tanks or the PCB capacitors and transformers identified in
the Disclosure Letter has within the last three (3) years been, and none
- 35 -
now need to be, repaired or replaced. For purposes of this Section 7.15(d), the
terms "Underground Storage Tanks" shall have the meaning given it in the Solid
Waste Disposal Act 42 U.S.C. Sections 6991 and the applicable state law or
regulation.
(e) The Disclosure Letter identifies (i) all environmental audits,
assessments, or occupational health studies (other than routine safety surveys
of job sites) undertaken by the Company or any of its affiliates with respect to
the business or operations of the Company within the past three (3) years, (ii)
the results of any groundwater, soil, air or asbestos monitoring undertaken with
respect to any of the Real Property, (iii) all citations issued with respect to
the business or operations of the Company within the past three years under the
Occupational Safety and Health Act (29 U.S.C. Sections 651 et. seq.) and (iv)
all claims, liabilities, litigation, notices of violation, administrative
proceedings, whether pending or threatened, or judgment or orders issued with
respect to the Company within the past three years under the applicable
Environmental Laws.
(f) The Company has (i) no pending or on file any application to
treat, incinerate or dispose of PCBs or holds any permit, license or right to
incinerate PCBs, (ii) not engaged in the land filling of Hazardous Materials
except in compliance with applicable Environmental Laws or (iii) not engaged in
any road oiling activities nor have they applied or used oil or Hazardous
Materials for dust control or paving purpose.
(g) The Company has been and is currently in compliance with all
applicable Environmental Laws, including without limitation, obtaining and
maintaining in effect all permits, licenses or other authorizations required by
applicable Environmental Laws and the Company has been and is currently in
compliance with all such permits, licenses and authorizations.
- 36 -
(h) For purposes of this Section 7.15, "Environmental Laws" shall
mean any and all Federal, state or local laws, statutes, ordinances, codes,
rules, regulations, orders, decrees and directives imposing liability or
standards of conduct for or relating to the protection of health, safety or
the environment including, but not limited to, the following statutes as now
written and amended, and as amended hereafter, including any and all
regulations promulgated thereunder and any and all State and local
counterparts: the Federal Water Pollution Control Act, 33 U.S.C. Section 1251
et. seq., the Clean Air Act, 42 U.S.C. Section 7401 et seq., the Toxic
Substances Control Act, 15 U.S.C. Section 2601 et. seq., the Solid Waste
Disposal Act, 42 U.S.C. Section 6901 et seq., the Comprehensive Environmental
Response Compensation and Liability Act, 42 U.S.C. Section 9601 et seq., the
Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C.Section
11001 et seq., and the Safe Drinking Water Act, 42 U.S.C.Section 300f et seq.
7.16. REQUIRED ASSETS. There are no significant assets used or
required by the Company in the conduct of its business which are not either
owned by it or licensed or leased to it under one of the licenses or leases
listed in the Disclosure Letter.
7.17. INSURANCE. The Disclosure Letter contains a list of every policy
of fire, liability or other form of insurance held by or applicable to the
Company and such policies are in full force and effect and will not terminate as
to the Company upon the sale of the Purchased Shares. The Disclosure Letter
describes any self insurance policies of the Company. With respect to each
policy listed in the Disclosure Letter, the Disclosure Letter lists and
describes all claims made under such policy within the three year period prior
to the Closing Date and sets forth the current status of each such claim.
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7.18. CHANGES SINCE THE BALANCE SHEET DATE. Since the Balance Sheet
Date, the Company has conducted its business only in the ordinary course, and,
except as contemplated by this Agreement or as disclosed in the Disclosure
Letter, there has not been any:
(a) adverse change in the financial condition, results of operations,
assets, liabilities, business, prospects or properties of the Company or with
respect to the Company's business relations with any of its employees,
suppliers, vendors or customers and no state of facts exist which may be
reasonably expected to give rise to any such adverse change;
(b) sale, assignment, transfer, mortgage, pledge or lease of any
assets of the Company, except in the ordinary course of business;
(c) issuance, sale or other disposition by the Company of any stock,
stock options, bonds, notes or other securities of or equity interests in such
company;
(d) any declaration or payment of a non-cash dividend by the Company
or any other declaration, payment or distribution to any stockholder of the
Company of a non-cash type or purchase or redemption of any shares of the
Company's capital stock;
(e) incurrence of any obligation or liability (absolute or
contingent), except for current liabilities incurred, and obligations under
contracts entered into, in the ordinary course of business;
(f) increase in the rates of direct compensation payable or to become
payable by the Company to any officer, employees, agent or consultant, other
than routine increases made in the ordinary course of business, or any bonus,
percentage compensation, service award or other like benefit, granted, made or
agreed to for any such officer, employee, agent or consultant, or any welfare,
pension, retirement or similar payment or arrangement made or agreed to which is
greater than any such bonus, percentage compensation, service award or
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other like benefit or any welfare, pension, retirement or similar payment or
arrangement existing or made pursuant to arrangements, agreements, or plans
existing at the Balance Sheet Date;
(g) discharge or satisfaction of any Lien, or payment of any
obligation or liability, absolute or contingent, by the Company, other than
current liabilities and long-term debt shown on the Balance Sheet and current
liabilities incurred since that date in the ordinary course of business;
(h) cancellation of any debts or claims, except in each case in the
ordinary course of business;
(i) incurrence of any extraordinary losses or waiver of any rights of
substantial value;
(j) capital expenditures in excess of $50,000 for any single item or
$250,000 in the aggregate;
(k) change in accounting methods or practices (including, without
limitation, any change in depreciation or amortization policies or rates or
income recognition methods) by the Company;
(l) revaluation by the Company of any of its assets;
(m) damage, destruction or loss (whether or not covered by insurance)
adversely affecting the properties or business of the Company;
(n) loan by the Company to any person or entity, or guaranty by the
Company of any loan; or
(o) agreement by the Company to do any of the foregoing.
7.19. BANK ACCOUNTS. The Disclosure Letter contains a true, correct
and complete schedule setting forth the name of every bank in which the Company
has one or more
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accounts, savings or other certificates, or safe deposit boxes; the names of
every person authorized to draw on such accounts, redeem such certificates or
have access to such boxes; and the principal terms of such certificates and the
contents of such boxes.
7.20. TAX MATTERS. (a) For purposes of this Agreement, "Taxes" means
all income, capital gains, gross income, gross receipts, sales, use, transfer,
ad valorem, franchise, profits, licenses, withholding, payroll, employment,
excise, severance, stamps, occupation, premium, property, windfall profits or
other taxes or customs duties, or any interest, any penalties, additions to tax
or additional amounts assessed or similarly charged by any taxing authority
(domestic or foreign) upon the Company. For purposes of the definition of Taxes,
any interest, penalties, additions to tax or additional amounts that relate to
Taxes for any period, or a portion of any period, ended on or before the Closing
Date shall include any interest, penalties, additions to tax, or additional
amounts relating to Taxes for such periods, regardless of whether such items are
incurred, accrued, assessed or similarly charged on, before or after the Closing
Date.
(b) The Company has timely filed true, correct and complete federal,
foreign, state and local tax returns, reports or estimates (including, but not
limited to, returns and reports with respect to employee tax withholding and
social security and unemployment taxes), all prepared in accordance with
applicable laws, for all years and periods (and portions thereof) for which any
such returns, reports or estimates were due. All Taxes, as due and payable in
respect of such returns, reports and estimates have been paid, and there is no
liability, contingent or otherwise, for any Taxes due in connection with any
such return.
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(c) The Company has not filed a consent to the application of Section
341(f) of the Code with respect to the Company. The Company has not been a
member of an affiliated, combined, consolidated or unitary group.
(d) The federal and state income tax returns of the Company have not
been examined by the IRS or any state or local tax or revenue agency and there
are no audits, administrative proceedings or court proceedings presently pending
with regard to any Taxes. No deficiencies for any taxes have been proposed,
asserted or assessed against the Company by any federal, state, local or foreign
taxing authority.
(e) No asset of the Company, whether owned or leased pursuant to a
capital lease, has been financed by industrial development bonds within the
meaning of Section 103(b) of the Code; the Company is not a "principal user," as
that term is used in the context of Section 103(b) of the Code, of any building
which has been so financed.
(f) No property owned by the Company is property that Purchaser or the
Company is or will be required to treat as being owned by another person
pursuant to the provisions of Section 168(f)(8) of the Internal Revenue Code of
1954, as amended and in effect prior to the enactment of the Tax Reform Act of
1986, or is "tax-exempt use property" within the meaning of Section 168(h)(l) of
the Code.
(g) The Company has not executed or filed with the IRS or any other
taxing authority any agreement or other document extending or having the effect
of extending the period for assessment or collection of any Taxes, and no power
of attorney granted by the Company with respect to any Taxes is currently in
force.
(h) There is no contract, agreement, plan or arrangement covering any
employee or former employee of the Company that, individually or collectively,
could give rise
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to the payment by the Company of any amount that would not be deductible by
reason of Section 280G of the Code.
(i) The Company has qualified since January 1, 1998 as a corporation
taxable pursuant to Subchapter S of the Code and has taken all necessary action
to maintain such qualification since such date.
7.21. NO ALTERNATIVE TRANSACTION. Neither the Company nor any
Stockholder is a party to or otherwise bound by any agreement or understanding
in any way relating to an alternative transaction to sell the stock or assets of
the Company or merge or consolidate the Company or any similar transaction.
7.22. FULL DISCLOSURE. This Agreement, the Financial Statements, the
Disclosure Letter and all other certificates, documents and instruments
furnished by the Company or any of its stockholders, directors, officers or
employees in connection with this Agreement, or any other transaction
contemplated by this Agreement, are true and complete in all material respects,
and neither this Agreement, the Disclosure Letter or the Financial Statements,
nor any other certificate, document or instrument furnished by the Company or
any of its stockholders, directors, officers or employees in connection with
this Agreement, contains an untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements included herein
or therein not misleading in light of the circumstances under which they were
made.
ARTICLE VIII
WARRANTIES AND REPRESENTATIONS OF PURCHASER AND GLD CORPORATION
As an inducement to the Company and each Stockholder to enter into and
perform their obligations under this Agreement, and in consideration of the
covenants of the Company and each Stockholder contained herein, Purchaser and
GLD Corporation, jointly and severally,
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warrant and represent to and covenant with the Company and Stockholders (which
warranties and representations shall survive the Closing regardless of what
examination, inspections, audits and other investigations the Company or
Stockholders have heretofore made or may hereafter make, with respect to such
warranties and representations) as follows:
8.01. DUE INCORPORATION. Purchaser and GLD Corporation are each a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and each has the corporate power and
lawful authority to own its properties and to transact its business as now
conducted. This Agreement is binding upon, and enforceable against, Purchaser
and GLD Corporation in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws affecting creditors rights
generally and by general principles of equity (whether in a proceeding at law or
in equity).
8.02. AUTHORITY. Purchaser and GLD Corporation have each taken all
requisite corporate action to approve this Agreement and consummation of the
transactions contemplated hereby.
8.03. INVESTMENT REPRESENTATION. Purchaser confirms that it is
acquiring the Purchased Shares for investment for its own account and not with a
view to the sale or distribution of any part thereof.
8.04. NO CONFLICTS. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby, nor
compliance by Purchaser or GLD Corporation with any of the provisions hereof,
will:
(a) violate, or conflict with, or result in a breach of any provisions
of, or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or result in the termination of, or
accelerate the performance required by, or result
- 43 -
in the creation of any Lien upon any of the properties or assets of Purchaser or
GLD Corporation, under any of the terms, conditions or provisions of the
Certificate of Incorporation or By-laws of Purchaser or GLD Corporation, or any
note, bond, mortgage, indenture, deed of trust, license, agreement, lease or
other instrument or obligation to which Purchaser or GLD Corporation is a party,
or by which Purchaser or GLD Corporation or their respective properties or
assets may be bound or affected;
(b) except as set forth in the Disclosure Letter, require the consent
or approval of, or the making of any filing with, any third Person; or
(c) violate any Law or Order applicable to Purchaser or GLD
Corporation or any of the properties or assets of Purchaser or GLD Corporation.
ARTICLE IX
INDEMNIFICATION
9.01. STOCKHOLDERS INDEMNIFICATION. Subject to the limitations set
forth in Section 9.02 hereof, the Stockholders agree to indemnify and hold
Purchaser harmless against any loss, damage or expense (including reasonable
attorneys' fees) suffered by Purchaser or the Company resulting from (a) any
breach by the Company or the Stockholders of any covenant, agreement or
obligation under this Agreement; (b) any inaccuracy in or breach of any of the
representations or warranties made by the Company or the Stockholders herein or
in the Disclosure Letter; and (c) any inaccuracy or misrepresentation in the
Disclosure Letter or in any certificate or affidavit delivered by the Company or
the Stockholders at the Closing in accordance with the provisions of this
Agreement.
9.02. STOCKHOLDERS' INDEMNIFICATION LIMITATIONS. Purchaser's right to
indemnification pursuant to Section 9.01 hereof is subject to the following
specific limitations:
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(a) Purchaser shall not be entitled to assert any right of
indemnification hereunder for any loss, damage or expense suffered by Purchaser
or the Company arising from a breach of the covenant set forth in Section 5.04
or the representations or warranties contained in Section 7.20 (collectively,
the "Tax Claims") after the expiration of the statute of limitations (including
any extensions thereof) imposed by the Code or any other applicable law with
respect to foreign, federal or state tax liability of the Company for all
taxable years or periods ending on or prior to the Closing Date, except that if
there shall then be pending any dispute, claim, proceeding or action involving a
Tax Claim under this Agreement, Purchaser shall continue to have the right to be
indemnified with respect to such Tax Claim.
(b) Purchaser shall not be entitled to assert any right of
indemnification hereunder for any loss, damage or expense suffered by Purchaser
or the Company arising from a breach by the Company or the Stockholders of any
representation, warranty or covenant set forth (i) in Article VII (except
Sections 7.04, 7.08, 7.15 and 7.20) or any covenants set forth in this Agreement
(except Section 5.04 and this Article IX), after April 30, 2002, or (ii) in
Sections 7.04, 7.08 and 7.15 (Sections 7.20 and 5.04 are provided for in Section
9.02(a) above) or this Article IX after the expiration of the applicable statute
of limitations with respect thereto, except that (A) if there shall on April 30,
2002 be pending any dispute, claim, proceeding or action involving a claim under
Article VII (except Sections 7.04, 7.08, 7.15 and 7.20) or any covenants set
forth in this Agreement (except Section 5.04 and this Article IX) under this
Agreement or (B) if there shall be pending on the applicable statute of
limitations expiration date any dispute, claim, proceeding or action involving
claims under Sections 7.04, 7.08, 7.15 or this Article IX under this Agreement,
Purchaser shall continue to have the right to be indemnified with respect
thereto.
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(c) Purchaser shall not be entitled to indemnification hereunder for
breach of any covenant made in this Agreement (other than Section 5.04) or for
claims under Article VII (other than Tax Claims) (hereinafter referred to as
"Non-Tax Warranty Claims") until the aggregate losses, damages or expenses
suffered by Purchaser or the Company with respect thereto exceed $500,000
("Threshold"), whereupon Purchaser shall be entitled to indemnification
hereunder from the Stockholders for the aggregate losses, damages or expenses
suffered by Purchaser or the Company with respect to the Non-Tax Warranty Claims
in excess of the Threshold. Tax Claims are not subject to the Threshold.
(d) Purchaser shall not be allowed to recover for any Non-Tax Warranty
Claims after the Purchaser has recovered from the Stockholders an aggregate of
$12.5 million in respect of Non-Tax Warranty Claims ("Liability Cap"), and
PROVIDED, FURTHER, Purchaser shall not be entitled to recover from any
individual Stockholder an amount in excess of the Liability Cap multiplied by
such Stockholder's Pro-Rata Percentage. Notwithstanding anything contained in
this Section 9.02(d) to the contrary, the limits set forth in this Section shall
not apply to Tax Claims or, with respect to the Operating Stockholders, for any
indemnification claims which arise from any fraud or willful misconduct by any
of the Stockholders and the Operating Stockholders shall be jointly and
severally liable with respect to such indemnification claims arising from any
fraud or willful misconduct.
(e) Subject to the other provisions of this Section 9.02, with respect
to any Tax Claims the Stockholders' liability to Purchaser therefor shall be as
follows:
(i) the Operating Stockholders are jointly and severally liable
for all Tax Claims; and
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(ii) the Other Stockholders are severally liable for their Pro
Rata Percentage of Tax Claims relating to any taxable period which includes the
period from January 1, 1998 to the Closing Date.
(f) Subject to the other provisions of this Section 9.02, with respect
to any Non-Tax Warranty Claims no Stockholder shall be liable to Purchaser for
the amount of any Non-Tax Warranty Claim in excess of his respective Pro-Rata
Percentage.
(g) The parties hereby agree and acknowledge that Purchaser is
acquiring the insurance policy set forth at EXHIBIT J hereto ("Environmental
Risk Policy") as of the Closing and that the Stockholders' indemnification
obligations to Purchaser for any breach of Section 7.15 are limited to the
amounts of such indemnification claim not paid by the Environmental Risk Policy
and are subject to the Threshold and the Liability Cap. GLD Corporation shall
pay the premium costs of the Environmental Risk Policy.
9.03. PURCHASER'S AND GLD CORPORATION'S INDEMNIFICATION. Purchaser and
GLD Corporation jointly and severally agree to indemnify and hold each
Stockholder harmless against any loss, damage or expense (including reasonable
attorneys' fees) suffered by any Stockholder resulting from any inaccuracy in or
breach of any of the representations, warranties or covenants made by either
Purchaser or GLD Corporation under this Agreement.
9.04. INDEMNIFICATION NOTIFICATION. Upon obtaining knowledge of any
claim or demand which has given rise to, or could reasonably give rise to, a
claim for indemnification hereunder (including indemnity claims not
recoverable because the Threshold has not been met or because said claims are
entitled to be paid by the Environmental Risk Policy), the Person who is, or
may be, entitled to indemnification under this Agreement ("Indemnitee") shall
give written notice of such claim or demand to the Person against whom
Indemnitee is, or may be, entitled to
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indemnification hereunder for said claim or demand ("Indemnitor") (provided
notices to Stockholders need only be given to the Representative) ("Notice of
Claim"). Indemnitee shall furnish to Indemnitor in reasonable detail such
information as Indemnitee may have with respect to such indemnification claim
(including copies of any summons, complaint or other pleading which may have
been served on it and any written claim, demand, invoice, billing or other
document evidencing or asserting the same). Subject to the limitations set
forth in Sections 9.02(a) or 9.02(b) hereof, no failure or delay by
Indemnitee in the performance of the foregoing shall reduce or otherwise
affect the obligation of Indemnitor to indemnify and hold Indemnitee
harmless, except to the extent that such failure or delay shall have
adversely affected Indemnitor's ability to defend against, settle or satisfy
any liability, damage, loss, claim or demand for which Indemnitee is entitled
to indemnification hereunder.
9.05. INDEMNIFICATION PROCEDURE. If the claim or demand set forth in
the Notice of Claim given by Indemnitee pursuant to Section 9.04 hereof is a
claim or demand asserted by a third party, the Indemnitor shall have fifteen
(15) days after the Date of the Notice of Claim to notify Indemnitee in writing
of its election to defend such third party claim or demand on behalf of the
Indemnitee; provided that such written notification shall expressly acknowledge
Indemnitor's responsibility to indemnify and hold Indemnitee harmless from such
third party claim or demand. If Indemnitor elects to defend such third party
claim or demand, Indemnitee shall make available to Indemnitor and his agents
and representatives all records and other materials which are reasonably
required in the defense of such third party claim or demand and shall otherwise
cooperate with, and assist the Indemnitor in the defense of, such third party
claim or demand, and so long as the Indemnitor defending such third party claim
in good faith, Indemnitee shall not pay, settle or compromise such third party
claim or demand. If the
- 48 -
Indemnitor elects to defend such third party claim or demand, Indemnitee shall
have the right to participate in the defense of such third party claim or
demand, at Indemnitee's own expense. If the Indemnitor does not elect to defend
such third party claim or demand or does not defend such third party claim or
demand in good faith, Indemnitee shall have the right, in addition to any other
right or remedy it may have hereunder, at the Indemnitor's expense, to defend
such third party claim or demand; provided, however, that (a) Indemnitee shall
not have any obligation to participate in the defense of, or defend, any such
third party claim or demand; and (b) Indemnitee's defense of or its
participation in the defense of any such third party claim or demand shall not
in any way diminish or lessen the obligations of the Indemnitor under the
agreements of indemnification set forth in this Article IX.
9.06. SATISFACTION OF CLAIM. Except for third party claims being
defended in good faith, the Indemnitor shall satisfy its obligations hereunder
within thirty (30) days after the Date of Notice of Claim. In addition to any
remedy Purchaser may have with respect to indemnification under this Agreement,
Purchaser shall have the right of set-off against amounts due under the Note,
subject to Section 9.02(d) hereof.
9.07. DATE OF NOTICE OF CLAIM. The term "Date of the Notice of Claim"
as used in this Article IX shall mean the date the Notice of Claim is effective
pursuant to Section 15.10 of this Agreement.
ARTICLE X
CONDITIONS OF CLOSING APPLICABLE TO PURCHASER
The obligations of Purchaser hereunder (including the obligation of
Purchaser to close the transactions herein contemplated) are subject to the
satisfaction (or waiver by Purchaser) of the following conditions precedent:
- 49 -
10.01. NO TERMINATION. Neither Purchaser nor the Company shall have
terminated this Agreement pursuant to Section 12.01 hereof.
10.02. BRING DOWN CERTIFICATE. The warranties and representations made
by the Company and the Stockholders herein to Purchaser shall be true and
correct in all material respects on and as of the Closing Date with the same
effect as if such warranties and representations had been made on and as of the
Closing Date and the Company and the Stockholders shall have performed and
complied with all agreements, covenants and conditions on their part required to
be performed or complied with on or prior to the Closing Date; and at the
Closing, Purchaser shall have received a certificate executed by the President
or Chairman of the Board of the Company and each Stockholder to the foregoing
effect.
10.03. MATERIAL ADVERSE CHANGE. Between the Balance Sheet Date and the
Closing Date there shall have been no materially adverse change in (i) the
condition, financial or otherwise, operations, prospects, assets, liabilities,
contracts, licenses, rights or results of operations of the Company whether or
not covered by insurance including, without limitation, a material adverse
change in the business relationship or arrangement between the Company and any
of its employees, creditors, suppliers, customers, vendors or others having
business relationships with the Company or (ii) any Law or regulation applicable
to the Company.
10.04. NO ACTIONS. No Law shall have been enacted or promulgated and
no investigation, action, suit or proceeding by any Authority, and no action,
suit or proceeding by any other Person, shall be pending on the Closing Date
which challenges, or might result in a challenge to, this Agreement or any
transactions contemplated hereby, or which claims, or might give rise to a claim
for, damages in a material amount as a result of the consummation of this
Agreement.
- 50 -
10.05. REQUIRED CONSENTS. All consents, approvals or authorizations of
any Authority or other Person required on the part of the Company, or any
Stockholder in connection with the performance by the Company and the
Stockholder of their respective obligations under this Agreement and the
consummation of the transactions contemplated hereby, including without
limitation, any consents, approvals or authorizations described in the
Disclosure Letter, shall have been duly obtained and shall be in full force and
effect as of the Closing Date, and the Company and the Stockholder shall have
complied with any applicable Law requiring any notification, declaration,
filing, registration and/or qualification with any governmental authority in
connection with such performance and consummation.
10.06. COMPLIANCE WITH AGREEMENT; NECESSARY PROCEEDINGS. The Company,
Representative and each Stockholder shall have performed or complied in all
material respects with the covenants, agreements and obligations required under
this Agreement to be performed thereby prior to the Closing Date. All
proceedings to be taken in connection with the consummation of the transactions
contemplated by this Agreement and all documents incident thereto, shall be
reasonably satisfactory in form and substance to Purchaser and its counsel, and
Purchaser shall have received copies of such documents as Purchaser and its
counsel may reasonably request in connection with said transactions, including,
without limitation, those to be delivered pursuant to Section 3.02(a) of this
Agreement.
10.07. INVESTIGATION. Subject to the limitation set forth in Section
5.01 hereof, each of Purchaser and Purchaser's agents shall have been afforded
access to the Company's books and records, officers, employees, agents,
facilities and personnel relating to the business of the Company, and Purchaser
and Purchaser's agents and lenders shall have completed their respective due
diligence reviews of the assets, properties, liabilities, business and books and
- 51 -
records (including, but not limited to, financial and tax books and records) of
the business of the Company, and the results thereof shall be satisfactory to
Purchaser in its sole discretion. Without limiting the foregoing, Purchaser
shall have been reasonably satisfied that the consummation of the transactions
contemplated hereby shall not have an adverse effect on the Company's
relationship with any material customer or vendor.
10.08. FINANCING. Purchaser shall have obtained financing in an amount
sufficient to consummate the transactions contemplated by this Agreement and for
its future working capital requirements on such terms and conditions
satisfactory to Purchaser, in the exercise of its sole discretion.
10.09. NO OUTSTANDING AMOUNTS UNDER NASDI REVOLVER. As of the Closing,
there shall be no amount outstanding under the NASDI Revolver described in
Section 10.09 of the Disclosure Letter.
10.10. CLOSING BALANCE SHEET. The Closing Balance Sheet, Income
Statement and Final Adjustment Calculations shall have been agreed to between
Purchaser and the Stockholders.
Purchaser shall have the right to waive any of the foregoing
conditions precedent.
ARTICLE XI
CONDITIONS TO CLOSING APPLICABLE TO THE COMPANY AND THE STOCKHOLDERS
The obligations of the Company and the Stockholders hereunder
(including the obligation of the Company and the Stockholders to close the
transactions herein contemplated) are subject to the satisfaction (or waiver by
the Representative) of the following conditions precedent:
11.01. NO TERMINATION. Neither Purchaser nor the Company shall have
terminated this Agreement pursuant to Section 12.01 hereof.
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11.02. BRING DOWN CERTIFICATE. All warranties and representations made
by Purchaser and GLD Corporation herein to the Company and the Stockholders
shall be true and correct in all material respects on and as of the Closing Date
with the same effect as if such warranties and representations had been made on
and as of the Closing Date, and Purchaser and GLD Corporation shall have
performed and complied with all agreements, covenants and conditions on their
part required to be performed or complied with on or prior to the Closing Date,
and at the Closing, the Stockholders shall have received a certificate executed
by the Chief Executive Officer, President or any Vice President of Purchaser and
GLD Corporation to the foregoing effect.
11.03. NO ACTIONS. No Law shall have been enacted or promulgated and
no investigation, action, suit or proceeding by any Authority, and no action,
suit or proceeding by any other Person shall be pending on the Closing Date
which challenges or might result in a challenge to this Agreement or any
transaction contemplated hereby, or which claims, or might give rise to a claim
for, damages in a material amount as a result of the consummation of the
transactions contemplated hereby.
11.04. COMPLIANCE WITH AGREEMENT; NECESSARY PROCEEDINGS. Purchaser and
GLD Corporation shall have performed or complied in all material respects with
the covenants, agreements or obligations on their respective part required under
this Agreement to be performed thereby prior to the Closing Date. All
proceedings to be taken in connection with the consummation of the transactions
contemplated by this Agreement, and all documents incident thereto, shall be
reasonably satisfactory in form and substance to the Stockholders and their
counsel, and the Stockholders and their counsel shall have received copies of
such documents as
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it and its counsel may reasonably request in connection with said transactions,
including, without limitation, those to be delivered pursuant to Section 3.02(b)
of this Agreement.
11.05. CLOSING BALANCE SHEET. The Closing Balance Sheet, Income
Statement and Final Adjustment Calculations shall have been agreed to between
Purchaser and the Stockholders.
The Stockholders shall have the right to waive any of the foregoing
conditions precedent.
ARTICLE XII
TERMINATION
12.01. TERMINATION. This Agreement may be terminated at any time prior
to the Closing as follows, and in no other manner:
(a) by mutual written consent of Purchaser, Representative and the
Company;
(b) by Purchaser or by the Representative, if at or before the Closing
any conditions set forth herein for the benefit of Purchaser or the Company and
the Stockholders, respectively, shall not have been timely met or cannot be
timely met;
(c) by Purchaser or by the Representative if the Closing of the
transactions contemplated by this Agreement shall not have occurred on or before
April 30, 2001, or such later date as may have been agreed upon in writing by
the parties hereto; or
(d) by Purchaser or by the Representative if any representation or
warranty made herein for the benefit of Purchaser or the Stockholders,
respectively, or in any certificate, schedule or documents furnished to
Purchaser, or any Stockholders, respectively, pursuant to this Agreement is
untrue in any material respect, or Purchaser or the Stockholders, respectively,
shall have defaulted in any material respect in the performance of any material
covenant, agreement or obligation under this Agreement.
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Any termination pursuant to this Article XII shall not limit or
restrict the rights or other remedies of any party hereto.
ARTICLE XIII
[INTENTIONALLY OMITTED]
ARTICLE XIV
STOCKHOLDERS REPRESENTATIVE
14.01. APPOINTMENT. Each of the Stockholders hereby irrevocably makes,
constitutes and appoints Xxxxxxxxxxx X. Xxxxxxx as his or their agent and
representative (the "Representative") for all purposes under this Agreement. In
the event of the death, resignation or incapacity of Xxxxxxxxxxx X. Xxxxxxx, the
Stockholders shall promptly designate another individual or individuals
hereunder so that at all times there will be at least one Representative with
the authority provided in this Article XIV. Such successor Representative shall
be designated by the Stockholders by an instrument in writing signed by those
Stockholders (or their successors in interest) holding a majority of the
Purchased Shares entitled to vote for the election of directors of the Company
prior to the Closing, and such appointment shall become effective as to each
such successor Representative when such instrument shall have been delivered to
him and a copy thereof delivered to Purchaser.
14.02. POWERS. Each Stockholder hereby authorizes the Representative,
on behalf and in the name of, such Stockholder, to:
(a) Receive all notices or documents given or to be given to him by
Purchaser pursuant hereto or in connection herewith and to receive and accept
service of legal process in connection with any suit or other proceeding arising
under this Agreement. The Representative promptly shall forward a copy of such
notice or process to each Stockholder;
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(b) Sign and deliver to Purchaser at the Closing a receipt for his
portion of the Cash Portion of the consideration and forward such amount to such
Stockholder;
(c) Deliver to Purchaser at Closing all certificates and documents to
be delivered to Purchaser by the Stockholders pursuant to this Agreement,
together with any other certificates and documents executed by the Stockholders
and deposited with the Representative for such purposes;
(d) Engage legal counsel, and such accountants and other advisors for
the Stockholders, and incur such other expenses on behalf of the Stockholders in
connection with this Agreement and the transactions contemplated hereby as the
Representative may deem appropriate; and
(e) Take such action on behalf of the Stockholders as the
Representative may deem appropriate in respect of:
(i) Waiving any inaccuracies in the representations or warranties
of Purchaser contained in this Agreement or in any document delivered by them
pursuant hereto;
(ii) Waiving the fulfillment of any of the conditions precedent to
the Stockholders' obligations hereunder;
(iii) Taking such other action as he is authorized to take under
this Agreement;
(iv) Receiving all documents or certificates and making all
determinations, on behalf of the Stockholders, required under this Agreement;
and
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(v) All such other matters as Representative may deem necessary or
appropriate to consummate this Agreement and the transactions contemplated
hereby and thereby.
14.03. IRREVOCABLE. The appointment of the Representative hereunder is
irrevocable and any action taken by Representative pursuant to the authority
granted in this Article XIV shall be effective and absolutely binding on each
Stockholder notwithstanding any contrary action of, or direction from, a
Stockholder, except for actions taken by the Representative which are in bad
faith or grossly negligent. The death or incapacity of any Stockholder shall not
terminate the prior authority and agency of the Representative.
14.04. RESIGNATION. Representative may resign at any time by giving
notice to the Stockholders, and, if there does not exist any previously
designated successor thereto, upon the appointment and qualification of a
successor. A Representative may be discharged, and replaced by another person to
act as his successor, by an instrument in writing signed by the Stockholders (or
their successors in interest) holding a majority of the Purchased Shares
entitled to vote for the election of directors of the Company prior to the
Closing.
14.05. RELIANCE. Purchaser shall not be obliged to inquire into the
authority of the Representative, and Purchaser shall be fully protected in
dealing with him.
ARTICLE XV
MISCELLANEOUS
15.01. EXPENSE. (a) If this Agreement is consummated, immediately
prior to the Closing the Company shall pay the costs and expenses (including
attorneys' fees and other legal costs, expenses and accounting fees and other
accounting costs and other expenses other than the fees and expenses of Mage
Consultants LLC ("Mage")) incurred by the Company and the Stockholders in
connection with this Agreement and the transactions contemplated hereby. At or
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prior to the Closing the Stockholders shall pay the fees and expenses of Mage.
The amount paid by the Company hereunder shall be used in the calculation of the
Adjustment Amount.
(b) If this Agreement is not consummated, the Company shall pay the
costs and expenses (including attorneys' fees and other legal costs and expenses
and accountant's fees and other accounting costs and expenses) incurred by the
Company and the Stockholders in connection with this Agreement and the
transactions contemplated hereby.
(c) Whether or not this Agreement is consummated, GLD Corporation
shall pay all of the costs and expenses (including attorneys' fees and other
legal costs and expenses and accountants' fees and other accounting costs and
expenses) incurred by it or Purchaser in connection with this Agreement and the
transactions contemplated hereby.
15.02. ADVISORS FEES (a) Neither the Company nor any Stockholder has
retained any broker, finder, investment banker or financial advisor in
connection with this Agreement or the transactions contemplated hereby except
for Mage and the Company has not incurred or paid, and neither Purchaser nor the
Company will incur or be required to pay, any broker's, finder's, investment
banker's, financial advisor's or similar fee in connection with this Agreement
or any transactions contemplated hereby to any Person acting as broker, finder,
investment banker, financial advisor or in any similar capacity on behalf of the
Company, or any Stockholder, except for Mage, whose fees and expenses will be
paid by the Stockholders at or prior to the Closing.
(b) Purchaser has not retained any broker, finder, investment banker
or financial advisor in connection with this Agreement or the transactions
contemplated hereby, and neither the Company nor any Stockholder will incur or
be required to pay any broker's, finder's, investment banker's, financial
advisor's or similar fee in connection with this Agreement or the
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transactions contemplated hereby to any Person acting as broker, finder,
investment banker, financial advisor or in any similar capacity on behalf of
Purchaser.
(c) Purchaser and the Company and the Stockholders (jointly and
severally) agree to hold each other harmless from any loss, damage or expense
resulting from a breach by such party of their respective warranties set forth
in this Section 15.02.
15.03. SURVIVAL. All warranties, representations, agreements and
covenants made by the respective parties hereto in this Agreement shall survive
the Closing Date, subject to the limitations set forth in Sections 9.02(a) and
(b) hereof.
15.04. ENTIRE AGREEMENT. This Agreement (including the Disclosure
Letter and the Exhibits thereto) contain the entire agreement between the
parties hereto with respect to the transactions contemplated hereunder, and
supersedes all negotiations, representations, warranties, commitments, offers,
contracts and writings prior to the date hereto including, without limitation,
the letter agreement dated September 7, 2000, as amended by that certain letter
dated December 18, 2000, among Purchaser, the Company and the Stockholders. No
waiver and no modification or amendment of any provisions of this Agreement
shall be effective unless specifically made in writing and duly signed by the
party to be bound thereby.
15.05. PRE-CLOSING PUBLICITY. Except as otherwise expressly provided
in this Section 15.05, prior to the Closing Date, all notices to third parties
and other publicity relating to the transaction contemplated by this agreement
shall be jointly planned, coordinated and agreed to by Purchaser and the
Company. Prior to the Closing Date, none of the parties hereto shall act
unilaterally in this regard without the prior written approval of the others;
PROVIDED, HOWEVER, (i) such approval shall not be unreasonably withheld,
(ii) nothing in this Section 15.05 shall be deemed to restrict a party from
unilaterally making any communication which such party
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determines to be necessary in order to comply with applicable Laws and (iii)
nothing in this Section 15.05 shall prohibit or otherwise restrict Purchaser
from making any communications it deems necessary with its financing sources,
advisors or bonding providers.
15.06. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which,
together, shall constitute one and the same instrument.
15.07. ASSIGNABILITY. None of the parties hereto shall transfer or
assign any of their rights or obligations hereunder without the prior written
consent of the other parties hereto. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their permitted successors and
assigns.
15.08. HEADING. The captions of the various Articles and Sections of
this Agreement have been inserted only for convenience and shall not be deemed
to modify, explain, enlarge or restrict any of the provisions of this Agreement.
15.09. GOVERNING LAW. The validity, interpretation and effect of this
Agreement shall be governed by the laws of the State of Illinois excluding the
"conflicts of laws" rules thereof.
15.10. NOTICES. (a) All notices, requests, demands and other
communications under this Agreement shall be in writing and delivered in person
or sent by registered or certified mail, postage prepaid, and properly addressed
as follows:
TO PURCHASER:
------------
Great Lakes Dredge & Dock Corporation
0000 Xxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Chief Executive Officer
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WITH COPIES TO:
--------------
Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx, Esq.
TO THE COMPANY AND THE STOCKHOLDERS:
-----------------------------------
North American Site Developers, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxxxxxx X. Xxxxxxx
President
WITH A COPY TO:
--------------
Xxxxxxx X. Xxxxxxxx, Esq.
Xxxxxxxx, Xxxxx and Xxxxxxx, LLP
00 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000-0000
(b) Any party may from time to time change its address for the purpose
of notices to that party by a similar notice specifying a new address, but no
such change shall be deemed to have been given until it is actually received by
the party sought to be charged with its contents.
(c) All notices and other communications required or permitted under
this Agreement which are addressed as provided in this Section 15.10 if
delivered personally, shall be effective upon delivery; and if delivered by
mail, shall be effective upon deposit in the United States mail, postage
prepaid.
15.11. CURRENCY. All amounts expressed in this Agreement and all
payments required by this Agreement are in United States dollars.
15.12. SAVINGS CLAUSE. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under any present of future law, rule or
regulation, such provision shall
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be fully severable and this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof.
The remaining provisions of this Agreement shall remain in full force and effect
and shall not be affected by the illegal, invalid or unenforceable provision or
by its severance herefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as a part of this
Agreement, a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible.
15.13. INTERPRETATIONS. Unless the context of this Agreement otherwise
requires, (a) words of any gender shall be deemed to include each other gender,
(b) words using the singular or plural number shall also include the plural or
singular number, respectively, and (c) references to "hereof", "herein" and
similar terms shall refer to this entire Agreement.
15.14. SUBMISSION TO JURISDICTION AND VENUE. For purposes of any
action or proceeding in connection with this Agreement, the parties hereto each
hereby expressly submit to the jurisdiction of the state and federal Courts
located in the State of Massachusetts. Further, the parties hereto each consent
that any order, process, notice of motion or other application to or by any said
court or a judge thereof may be served within or without such court's
jurisdiction by registered mail or by personal service, provided a reasonable
time for appearance is allowed (but not less than the time otherwise afforded by
any law or rule), and waives any right to contest the appropriateness of any
action brought in any such court based upon lack of personal jurisdiction,
improper venue or forum non conveniens.
(Signature Page to Follow)
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IN WITNESS WHEREOF, the parties hereto have duly executed this Stock
Purchase Agreement on the day and year first above written.
GREAT LAKES DREDGE & DOCK
CORPORATION
By: /S/ XXXXXXX X. XXXXXX
-----------------------------------------
Title: PRESIDENT & C.E.O.
--------------------------------------
GREAT LAKES/NORTH AMERICAN SITE
DEVELOPERS, INC.
By: /S/ XXXXXXX X. XXXXXX
-----------------------------------------
Title: PRESIDENT
--------------------------------------
NORTH AMERICAN SITE DEVELOPERS, INC.
By: /S/ XXXXXXXXXXX X. XXXXXXX
-----------------------------------------
Title: PRESIDENT
--------------------------------------
STOCKHOLDERS:
/S/ XXXXXXXXXXX X. XXXXXXX
---------------------------------------------
Xxxxxxxxxxx X. Xxxxxxx
/S/ XXXXXX X. XXXXXXX
---------------------------------------------
Xxxxxx X. Xxxxxxx
/S/ XXXXXX X. XXXXXXXXXXX
---------------------------------------------
Xxxxxx X. XxXxxxxxxxx
/S/ XXXXXXX X. XXXXXXXXXXX
---------------------------------------------
Xxxxxxx X. Xxxxxxxxxxx
REPRESENTATIVE:
/S/ XXXXXXXXXXX X. XXXXXXX
---------------------------------------------
EXHIBITS *
EXHIBIT DESCRIPTION SECTION
A Note 2.02(a)(ii)
B Allocation of Equity Shares and Note 2.02(a)
C Opinion of Company's Counsel 3.02(a)(vii)
D Employment Agreement 3.02(a)(viii)
E Stockholders Agreement 3.02(a)(xv)
F Mutual Release 3.02(a)(xvi)
G Opinion of Counsel to GLD Corporation and Purchaser 3.02(b)(xii)
H GLD Corporation Subordinated Guaranty 3.02(c)
I-1 Leased Parcels 5.05
I-2 Estoppel Letter Form 5.05
J Environmental Risk Policy 9.02(g)
* NOT FILED HEREIN