[Execution]
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ASSET PURCHASE AGREEMENT
Dated as of February 7, 2001
between
PITT-DES MOINES, INC.,
as Seller
and
CHICAGO BRIDGE & IRON COMPANY N.V. and
CB&I CONSTRUCTORS, INC.,
as Purchaser
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS....................................................................... 1
1.1. Definitions.............................................................. 1
1.2. Certain Interpretive Matters............................................. 11
1.3. Knowledge................................................................ 12
ARTICLE II
PURCHASE AND SALE OF ASSETS....................................................... 12
2.1. Purchase and Sale of Assets.............................................. 12
2.1.1. Owned Real Property............................................. 12
2.1.2. Tangible Personal Property...................................... 12
2.1.3. Inventories and Stores and Supplies............................. 12
2.1.4. Contract Rights................................................. 13
2.1.5. Accounts Receivable............................................. 13
2.1.6. Intellectual Property........................................... 13
2.1.7. Permits......................................................... 13
2.1.8. Prepaid Expenses, Advances and Deposits......................... 14
2.1.9. Records......................................................... 14
2.1.10. Claims and Insurance Proceeds................................... 14
2.1.11. Lists, Sales Materials and Software............................. 14
2.1.12. Cash............................................................ 14
2.1.13. Significant Subsidiaries........................................ 14
2.1.14. Certain Plan Assets............................................. 14
2.1.15. Strategic Plans................................................. 14
2.2. Excluded Assets.......................................................... 14
2.2.1. Cash............................................................ 14
2.2.2. Certain Receivables............................................. 15
2.2.3. Certain Contracts............................................... 15
2.2.4. Nonassignable Contracts and Nonassignable Permits............... 15
2.2.5. Employee Plans.................................................. 15
2.2.6. Retained Records and Information Resources...................... 15
2.2.7. Other Assets.................................................... 15
2.2.8. PDM Name........................................................ 15
2.3. Nonassignable Contracts and Nonassignable Permits........................ 15
2.3.1. Nonassignability................................................ 15
2.3.2. Seller To Use Commercially Reasonable Efforts................... 16
2.3.3. If Waivers or Consents are Not Obtained......................... 16
ARTICLE III
PURCHASE PRICE.................................................................... 17
3.1. Purchase Price........................................................... 17
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3.2. Purchase Price Adjustment............................................... 17
3.3. Collection of Receivables Constituting Excluded Assets.................. 18
ARTICLE IV
ASSUMPTION OF LIABILITIES......................................................... 19
4.1. Assumed Liabilities..................................................... 19
4.2. Excluded Liabilities.................................................... 20
ARTICLE V
REPRESENTATIONS AND WARRANTIES.................................................... 21
5.1. Representations and Warranties of Seller................................ 21
5.1.1. Corporate Organization; Good Standing.......................... 21
5.1.2. Authorization and Effect of Agreement.......................... 22
5.1.3. No Conflicts................................................... 22
5.1.4. Financial Statements........................................... 23
5.1.5. Absence of Changes............................................. 24
5.1.6. Compliance with Laws........................................... 25
5.1.7. Assets Used in the Businesses.................................. 25
5.1.8. Title to Assets................................................ 25
5.1.9. Brokers........................................................ 25
5.1.10. Intellectual Property.......................................... 25
5.1.11. Legal Proceedings.............................................. 26
5.1.12. Contract Rights................................................ 26
5.1.13. Employee Relations............................................. 28
5.1.14. Employee Benefit Plans......................................... 29
5.1.15. Environmental Matters.......................................... 30
5.1.16. Tax Matters.................................................... 32
5.1.17. Undisclosed Liabilities........................................ 33
5.1.18. Product Warranty............................................... 33
5.1.19. Inventories.................................................... 33
5.1.20. Accounts Receivable............................................ 33
5.1.21. Real Properties and Leases..................................... 33
5.1.22. Insurance...................................................... 34
5.1.23. Related Party Transactions..................................... 34
5.1.24. Investment Representations..................................... 35
5.1.25. Limitations on Representations and Warranties.................. 36
5.2. Representations and Warranties of Purchaser............................. 36
5.2.1. Organization; Power............................................ 36
5.2.2. Authorization; No Conflicts; Required Consents................. 37
5.2.3. Charter Documents.............................................. 38
5.2.4. SEC Documents.................................................. 38
5.2.5. Capitalization................................................. 38
5.2.6. Absence of Applicable Rights Agreements........................ 39
5.2.7. Litigation..................................................... 39
5.2.8. Compliance with Environmental Laws............................. 39
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5.2.9. Liabilities and Obligations...................................... 39
5.2.10. Intellectual Property............................................ 39
5.2.11. Material Contracts............................................... 40
5.2.12. Insurance........................................................ 40
5.2.13. Employee Matters................................................. 41
5.2.14. Compliance With ERISA, Labor Laws................................ 41
5.2.15. Absence of Changes............................................... 42
5.2.16. Broker's Fees.................................................... 43
5.2.17. Limitations on Representations and Warranties.................... 43
ARTICLE VI
THE CLOSING.......................................................................... 44
6.1. The Closing................................................................ 44
6.2. Conditions Precedent to Obligations of Purchaser........................... 44
6.2.1. No Legal Obstruction............................................. 44
6.2.2. Transfer Documents............................................... 44
6.2.3. Consents; Customer Notices....................................... 44
6.2.4. Related Agreements............................................... 45
6.2.5. EBITDA........................................................... 45
6.2.6. Lien Search and Title Commitments................................ 45
6.2.7. Financing........................................................ 45
6.2.8. Bank Consent..................................................... 45
6.2.9. Opinion of Counsel to the Seller................................. 45
6.2.10. Good Standing Certificates....................................... 45
6.2.11. FIRPTA Statement................................................. 46
6.3. Conditions Precedent to Obligations of Seller.............................. 46
6.3.1. No Legal Obstruction............................................. 46
6.3.2. Purchase Price and Letter of Credit.............................. 46
6.3.3. Related Agreements............................................... 46
6.3.4. Assumption Agreement............................................. 46
6.3.5. NYSE Listing..................................................... 46
6.3.6. Opinion of Counsel to the Purchaser.............................. 46
ARTICLE VII
COVENANTS............................................................................ 47
7.1. Personnel Matters.......................................................... 47
7.1.1. Offer of Employment.............................................. 47
7.1.2. Limitation of Rights............................................. 47
7.1.3. Collective Bargaining Agreements................................. 47
7.1.4. Pension Plans.................................................... 47
7.1.5. Welfare Benefit Plans and Fringe Benefits........................ 50
7.2. Publicity.................................................................. 50
7.3. Post-Closing Access; Records; Cooperation.................................. 51
7.4. Certain Tax Matters........................................................ 52
7.5. Non-Disclosure of Confidential Information by Seller....................... 53
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7.6. Further Assurances; Customer Notices............................ 54
7.7. Allocations..................................................... 54
7.8. Non-Competition................................................. 55
7.9. Assets Located at Fresno, CA.................................... 55
7.10. Letters of Credit............................................... 55
7.11. Delivery of Baseline Report..................................... 56
7.12. Woodlands Lease................................................. 56
7.13. Records Storage................................................. 56
ARTICLE VIII
INDEMNIFICATION........................................................... 56
8.1. Termination of Representations and Warranties................... 56
8.2. Indemnification................................................. 57
8.3. Defense of Claims............................................... 58
8.4. Seller's Insurance.............................................. 60
8.5. Mitigation...................................................... 62
8.6. Insurance Proceeds and Tax Benefits............................. 62
8.7. Remedies Exclusive.............................................. 62
ARTICLE IX
MISCELLANEOUS PROVISIONS.................................................. 62
9.1. Notices......................................................... 62
9.2. Expenses........................................................ 63
9.3. Assignment; Successors and Assigns.............................. 63
9.4. Waiver; Amendment............................................... 64
9.5. Entire Agreement................................................ 64
9.6. No Third Party Beneficiaries.................................... 64
9.7. Bulk Sales...................................................... 64
9.8. APPLICABLE LAW.................................................. 64
9.9. Captions and Headings........................................... 64
9.10. Passage of Title and Risk of Los................................ 64
9.11. Execution in Counterparts....................................... 65
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SCHEDULES
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PDM Disclosure Schedule
Section 2.1.1 Owned Real Property
Section 2.1.4 Leased Real Property
Section 2.2.2 Certain Receivables Constituting Excluded Assets
Section 4.2(f) Workers' Compensation Claims
Section 5.1.1 Significant Subsidiaries
Section 5.1.3 Conflicts
Section 5.1.6 Compliance with Laws
Section 5.1.8 Liens
Section 5.1.10 Intellectual Property
Section 5.1.11 Legal Proceedings
Section 5.1.12 Contract Rights
Section 5.1.14 Employee Benefit Plans
Section 5.1.15 Environmental Matters
Section 5.1.16 Tax Matters
Section 5.1.21 Real Property Transfer Consents and Subleases
Section 5.1.22 Insurance Policies and Coverage
CB&I Disclosure Schedule
Section 5.2.1 Material Subsidiaries
Section 5.2.2 Conflicts
Section 5.2.5 Capitalization
Section 5.2.6 Rights Agreements
Section 5.2.7 Litigation
Section 5.2.8 Environmental Matters
Section 5.2.10 Intellectual Property
Section 5.2.11 Material Contracts
Section 5.2.12 Insurance
Section 5.2.13(a) Employment Agreements
Section 5.2.13(b) CB&I Plans
Section 5.2.14 ERISA, Labor Matters
Section 5.2.15 Absence of Changes
Schedule 2.2.3 Certain Contracts Included in the Assets
Schedule 2.2.7 Other Excluded Assets
Schedule 4.1(e) Severance Plans
Schedule 6.2.3 Contract Consents to be Obtained by Closing Date
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ASSET PURCHASE AGREEMENT
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This ASSET PURCHASE AGREEMENT (this "Agreement") is dated as of
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February 7, 2001 among PITT-DES MOINES, INC., a Pennsylvania corporation
("Seller"), CHICAGO BRIDGE & IRON COMPANY N.V., a Netherlands company ("CB&I"),
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and CB&I CONSTRUCTORS, INC., a Texas corporation ("CB&I Sub", and collectively
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with CB&I, the "Purchaser").
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RECITALS
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A. Seller is engaged, among other things, in the businesses (the
"Businesses") of engineering, fabricating and erecting (i) tanks and systems for
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liquid and cryogenic storage through its Engineered Construction Division, and
(ii) water storage systems through its Water Division (collectively, the
"Divisions").
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B. Seller conducts the Business of the Engineered Construction
Division directly in the United States and indirectly outside the United States
through PDM International Ltd. and its subsidiaries.
C. Seller conducts the Business of the Water Division both directly
and through its subsidiary HyCon, Inc.
D. Seller desires to sell and assign to Purchaser, and Purchaser
desires to purchase (or to cause one or more of its subsidiaries or Affiliates
to purchase) and assume from Seller, substantially all of the assets used by the
Divisions in the conduct of the Businesses (other than the Excluded Assets, as
hereinafter defined), subject to Purchaser's assumption of all liabilities and
obligations of Seller relating to the Businesses (other than the Excluded
Liabilities, as hereinafter defined), on the terms and subject to the conditions
set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, the parties hereto, intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS
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1.1. Definitions. As used herein, the following terms shall have the
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meanings set forth below:
"Adjusted Net Working Capital of the Divisions" has the meaning
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specified in Section 3.2(a).
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"Affiliate" means, as to any specified Person, any other Person that,
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directly or indirectly through one or more intermediaries or otherwise,
controls, is controlled by or is under common control with the specified Person.
As used in this definition, "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a Person (whether through ownership of voting capital stock of that
Person, by contract or otherwise).
"Agreement" means this Agreement, including all attached Exhibits and
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Schedules, as the same may be amended, modified or supplemented from time to
time.
"Assets" has the meaning specified in Section 2.1.
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"Assumed Liabilities" has the meaning specified in Section 4.1.
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"Audited Final Balance Sheet" has the meaning specified in Section
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3.2(a).
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"Balance Sheet Date" has the meaning specified in Section 5.1.4.
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"Base Balance Sheet" means the unaudited combined statement of
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financial condition and equity of the Divisions as of December 31, 2000 referred
to in Section 5.1.4(c).
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"Baseline Reports" means those reports prepared for the properties
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subject to the ▇▇▇▇▇▇ Lease and the Des Moines Lease by Aware Environmental,
Inc. regarding existing or historic environmental issues on or relating to such
properties and delivered to Seller (and so identified as a "Baseline Report")
within ten (10) days of Purchaser's receipt thereof.
"Businesses" has the meaning specified in the Recitals.
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"CB&I" has the meaning specified in the Introduction.
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"CB&I Disclosure Schedule" means the disclosure schedule delivered by
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CB&I to Seller concurrently with the execution and delivery of this Agreement.
"CB&I Shares" means 2,848,172 shares of the common stock of CB&I, par
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value NLG .01 per share.
"CB&I Sub" has the meaning specified in the Introduction.
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"CERCLA" means the Comprehensive Environmental Response, Compensation
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and Liability Act, as amended, 42 U.S.C. (S) 9601 et seq.
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"Cash Amount" has the meaning specified in Section 3.1(a).
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"Clive Plan" has the meaning specified in Section 7.1.4(j)(ii).
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"Closing" has the meaning specified in Section 6.1.
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"Closing Date" has the meaning specified in Section 6.1.
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"Code" means the Internal Revenue Code of 1986, as amended, reformed
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or otherwise modified from time to time.
"Collective Bargaining Agreement" has the meaning specified in Section
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5.1.13.
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"Contracts" has the meaning specified in Section 2.1.4.
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"Covered Entities" means the Divisions and their predecessors and
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subsidiaries.
"Customer Notices" means those certain notifications, prepared by
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Purchaser (as to which the form and content thereof has been approved by
Seller), to be sent by Seller pursuant to Section 7.6(b) to (i) all obligors of
Accounts Receivable transferred to, or to be collected by, Purchaser under this
Agreement (other than those specifically excepted by Seller), (ii) all clients
and customers of the Divisions (other than those specifically agreed to by the
parties), and (iii) such other third parties as Purchaser may from time to time
reasonably request.
"Des Moines Lease" means that certain six-month lease agreement of
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even date herewith relating to certain property located in Des Moines, Iowa
between Seller, as lessor, and Purchaser, as lessee.
"Direct Claim" has the meaning specified in Section 8.3(d).
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"Divisions" has the meaning specified in the Recitals.
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"Effective Time" has the meaning specified in Section 9.10.
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"Employee" means any employee of Seller employed in the operations of
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either of the Divisions or the Businesses, excluding employees on layoff,
disability or otherwise carried on the employment roster of any of the Divisions
or the Businesses but who are inactive.
"Enron LNG Project" means that certain Puerto Rico LNG import terminal
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project in ▇▇▇▇▇▇▇▇, Puerto Rico constructed by Seller's Engineered Construction
Division for Enron Power I.
"Environmental Laws" means all Laws (including but not limited to
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common law) or requirements having the force and effect of Law relating to (a)
emissions, discharges, spills, Releases or threatened Releases of Hazardous
Substances, (b) the use, treatment, storage, disposal, handling, manufacturing,
transportation or shipment of Hazardous Substances, (c) the regulation of
storage tanks or (d) otherwise relating to pollution, or the protection of human
health and safety from exposure to Hazardous Substances, or the protection of
the environment;
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in each case including, but not limited to, CERCLA, the Resource Conservation
and Recovery Act, 42 U.S.C. (S) 6901 et seq. ("RCRA"), the Federal Water
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Pollution Control Act, 33 U.S.C. (S) 1251 et seq., the Federal Air Pollution
Control Act, 42 U.S.C. (S) 7401 et seq., the Toxic Substances Control Act, and
their state counterparts and regulations. (In all cases, Environmental Laws
shall mean such Laws as they may be amended from time to time; provided,
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however, that solely for purposes of determining the accuracy of Seller's
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representations and warranties in Section 5.1.15, Environmental Laws shall mean
such Laws as in force as of the Closing Date.)
"Environmental On-Site Liabilities and Costs" means all Losses,
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whether direct or indirect, known or unknown, current or potential, past,
present or future and any claims, actions or proceedings (excluding criminal):
(a) imposed by or instituted, under or pursuant to Environmental Laws,
including all Losses related to any removal, remedial or response action or any
Remedial Actions, and all fees, capital costs, disbursements and expenses of
counsel, experts, contractors, personnel and consultants based on, arising out
of or otherwise in respect of: (i) the operation of the Businesses at the Owned
Real Property or the Leased Real Property, the Owned Real Property or the Leased
Real Property; (ii) conditions existing on, under, around or above the Owned
Real Property or the Leased Real Property; and (iii) expenditures necessary to
cause the Owned Real Property or the Leased Real Property or any aspect of the
Businesses on such properties to be in compliance with any and all requirements
of Environmental Laws; and (b) in respect of bodily injury, death of a person,
personal injury, property damage, damage to natural resources or punitive
damages arising from or relating to Releases of Hazardous Substances on, from or
relating to such Owned Real Property or Leased Real Property.
"Environmental Off-Site Liabilities and Costs" means all Losses,
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whether direct or indirect, known or unknown, current or potential, past,
present or future (excluding criminal): (a) imposed by or instituted, under or
pursuant to Environmental Laws, including all Losses related to Remedial
Actions, and all fees, capital costs, disbursements and expenses of counsel,
experts, contractors, personnel and consultants based on, arising out of or
otherwise in respect of: (i) any site or facility to which Seller, through the
operation of the Businesses at the Owned Real Property or the Leased Real
Property, has sent, whether directly or through a third party, Hazardous
Substances for storage, treatment, disposal, recycling, or other management;
(ii) conditions existing on, under, around or above any such site or facility;
and (iii) expenditures necessary to cause any such site or facility to be in
compliance with any and all requirements of Environmental Laws; and (b) in
respect of bodily injury, death of a person, personal injury, property damage,
damage to natural resources or punitive damages arising from or relating to
Releases of Hazardous Substances on, from or relating to such site or facility.
"Environmental Permits" means any Permit required under applicable
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Environmental Laws for the activities or operations of the Businesses conducted
by the Divisions on any Owned Real Property or Leased Real Property as currently
conducted.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended.
"ERISA Related Person" has the meaning specified in Section 5.1.14(b).
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"Excess Shares" has the meaning specified in the Shareholder
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Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"Excluded Accounts Receivable" has the meaning specified in Section
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3.3.
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"Excluded Assets" has the meaning specified in Section 2.2.
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"Excluded Employees" has the meaning specified in Section 7.1.l.
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"Excluded Liabilities" has the meaning specified in Section 4.2.
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"Final Closing Date Benefit Liabilities" has the meaning specified in
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Section 7.1.4(j).
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"Financial Statements" has the meaning specified in Section 5.1.4.
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"Foreign Monopoly Laws" has the meaning specified in Section 5.1.3(b).
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"Governmental Authority" means (a) any nation or government, any
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state, province or other political subdivision thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to a government, including any government agency, department, board,
commission or instrumentality of the United States, any State of the United
States, any foreign jurisdiction in which the Businesses have been conducted or
any political subdivision thereof, and any governmental tribunal or
arbitrator(s) of competent jurisdiction, or (b) any Person having the authority
under any applicable Law to assess and collect Taxes for its own account.
"Hazardous Substances" means (a) all substances, wastes, pollutants,
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contaminants and materials ("Substances") regulated, or defined or designated as
hazardous, extremely or imminently hazardous, dangerous or toxic, under the
following federal statutes and their state counterparts, as well as the
statutes' implementing regulations thereunder: CERCLA; the Federal Insecticide,
Fungicide, and Rodenticide Act, 7 U.S.C. Section 136 et seq; the Atomic Energy
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Act, 42 U.S.C. Section 22011 et seq; and the Hazardous Materials Transportation
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Act, 42 U.S.C. Section 1801 et seq.; (b) all Substances with respect to which
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any state, local, territorial or federal Governmental Authority otherwise
requires environmental investigation, monitoring, reporting or remediation; (c)
petroleum and petroleum products, including crude oil and any fractions thereof;
(d) natural gas, synthetic gas and any mixtures thereof; and (e) radon,
radioactive substances, asbestos, urea formaldehyde and polychlorinated
biphenyls.
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"▇▇▇ ▇▇▇" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
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1976, as amended from time to time.
"Indebtedness" of any Person means, without duplication, (a) any
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liability of that Person (i) for borrowed money or arising out of any extension
of credit to or for the account of that Person (including reimbursement or
payment obligations with respect to surety bonds, letters of credit, banker's
acceptances and similar instruments), for the deferred purchase price of
property or services or arising under conditional sale or other title retention
agreements, other than trade payables arising in the ordinary course of
business, (ii) evidenced by notes, bonds, debentures or similar instruments,
(iii) in respect of capital leases or (iv) in respect of interest rate
protection agreements, (b) any liability secured by any Lien upon any property
or assets of that Person (or upon any revenues, income or profits of that Person
therefrom), whether or not that Person has assumed that liability or otherwise
become liable for the payment thereof or (c) any liability of others of the type
described in the preceding clauses (a) or (b) in respect of which that Person
has incurred, assumed or acquired a liability by means of a guaranty.
"Indemnifiable Losses" has the meaning specified in Section 8.2(b).
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"Indemnifiable Purchaser Losses" has the meaning specified in Section
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8.2(a).
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"Indemnifiable Seller Losses" has the meaning specified in Section
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8.2(b).
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"Indemnifying Party" has the meaning specified in Section 8.2(c).
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"Indemnitee" has the meaning specified in Section 8.2(c).
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"Indemnity Payment" has the meaning specified in Section 8.2(c).
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"Insurance Policies" means any type of insurance contract or policy
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maintained on or before the Closing Date by the Seller for the benefit of the
Covered Entities as well as any type of insurance maintained at any time on or
before the Closing Date by the Covered Entities, including, but not limited to,
commercial liability and/or general liability insurance, commercial automobile
insurance, products and completed operations insurance, professional liability
insurance, property insurance, crime and fiduciary insurance, excess liability
insurance, boiler and machinery insurance, workers compensation insurance,
pollution liability insurance, directors and officers insurance, or any other
type of insurance coverage maintained as provided above by Seller and/or the
Covered Entities.
"Intellectual Property" has the meaning specified in Section 2.1.6.
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"International Plan" has the meaning specified in Section 5.1.14(d).
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"Inventories" has the meaning specified in Section 2.1.3.
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"Law" means, at any time, any domestic or foreign law, statute, code,
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ordinance, order, rule, regulation, judgment, decree or injunction of any
Governmental Authority in effect at that time.
"Leased Real Property" has the meaning specified in Section 2.1.4.
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"Letters of Credit" has the meaning specified in Section 7.10.
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"License Agreement" means that certain Trademark License Agreement,
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dated the Closing Date relating to the use of the PDM name, to be agreed upon
between Seller and Purchaser.
"Lien" means, with respect to any property or asset of any Person (or
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any revenues, income or profits of that Person therefrom) (in each case whether
the same is consensual or nonconsensual or arises by contract, operation of law,
legal process or otherwise), any mortgage, lien, security interest, pledge,
attachment, levy or other charge or encumbrance of any kind thereupon or in
respect thereof.
"Losses" has the meaning specified in Section 8.2(a).
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"Material Adverse Effect" means, with respect to the Divisions and the
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Businesses, the result of one or more events, changes or effects which,
individually or in the aggregate, would have a material adverse effect on the
business, operations, properties or assets, liabilities or condition (financial
or otherwise) of the Divisions and the Businesses, taken as a whole, except for
(a) any event, change or effect resulting from general economic, financial or
market conditions in the United States, (b) any event, change or effect
resulting from conditions or circumstances generally affecting the industries in
which either of the Businesses compete, including, but not limited to, actual
changes in any applicable Law, or (c) changes that are not reasonably
foreseeable as a consequence of, but which are demonstrably related to or
resulting from, the taking of any action contemplated by this Agreement or the
Related Agreements.
"Material Adverse Effect on CB&I" means, when used with respect to
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CB&I and/or its subsidiaries, a material adverse effect on the business,
operations, property or assets, or financial condition of CB&I and its
subsidiaries, taken as a whole, except for (a) any event, change or effect
resulting from general economic, financial or market conditions in the United
States, (b) any event, change or effect resulting from conditions or
circumstances generally affecting the industries in which CB&I and its
subsidiaries compete, including, but not limited to, actual changes in any
applicable Law, or (c) changes that are not reasonably foreseeable as a
consequence of, but which are demonstrably related to or resulting from, the
taking of any action contemplated by this Agreement or the Related Agreements.
"Material Contract" has the meaning specified in Section 5.1.12 when
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used with respect to Seller and the meaning specified in Section 5.2.11 when
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used with respect to Purchaser.
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"Net Working Capital of the Divisions" means, as of the date of
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determination, the total consolidated current assets of the Divisions (but only
to the extent constituting Assets) minus the total consolidated current
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liabilities of the Divisions (but only to the extent constituting Assumed
Liabilities), in each case as determined in accordance with U.S. generally
accepted accounting principles applied on a basis consistent with the Financial
Statements.
"Nonassignable Contracts" has the meaning specified in Section 2.3.1.
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"Nonassignable Permits" has the meaning specified in Section 2.3.1.
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"Owned Real Property" has the meaning specified in Section 2.1.1.
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"PDM Disclosure Schedule" has the meaning specified in Section 2.1.1.
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"Permits" means all permits, authorizations, approvals, franchises,
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registrations, orders and other similar rights issued by any Governmental
Authority.
"Permitted Liens" means (i) mechanics', carriers', workmen's,
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repairmen's or other like Liens arising or incurred in the ordinary course of
business, (ii) Liens for taxes which are not due and payable or which are being
contested in good faith, (iii) Liens arising pursuant to the terms of any
operating leases, (iv) Liens incurred in the ordinary course of business in
connection with deposit accounts or to secure the performance of bids, tenders,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of like nature, and (v) with respect to assets constituting real
property, other imperfections of title or encumbrances, if any, which are not
material in amount or do not materially impair the use of the property subject
thereto in the applicable businesses as conducted as of the Closing Date.
"Person" means any natural person, corporation, firm, joint venture,
------
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any Governmental Authority.
"Plan" means each "employee benefit plan", as such term is defined in
----
section 3(3) of ERISA, that provides welfare, retirement or deferred
compensation benefits and each bonus, incentive compensation, deferred
compensation, severance, change of control, retention, stock option or other
equity based performance or other employee benefit plan, program, agreement or
policy that provides benefits or compensation in respect of any employee (in the
case of CB&I) or in respect of an Employee or former Employee (in the case of
Seller).
"Post-Closing Risk Allocation Agreement" means that certain Post-
--------------------------------------
Closing Risk Allocation Agreement of even date herewith between Purchaser and
Seller.
"Provo Plan" has the meaning specified in Section 7.1.4(j)(iii).
---------- ---------------------
"Purchase Price" has the meaning specified in Section 3.1(a).
-------------- --------------
-8-
"Purchaser" has the meaning specified in the Introduction.
---------
"Purchaser Environmental Site Assessments" means the Phase I
----------------------------------------
Environmental Site Audit reports prepared by Aware Environmental, Inc. for CB&I
as to the Owned Real Property and Leased Real Property.
"Purchaser Indemnitees" has the meaning specified in Section 8.2(a).
--------------------- --------------
"Purchaser's Trust" has the meaning specified in Section 7.1.4(j).
----------------- ----------------
"Purchaser's Union 401(k) Plan" has the meaning specified in Section
----------------------------- -------
7.1.4(h).
--------
"Records" has the meaning specified in Section 7.3(a).
------- --------------
"Related Agreements" means the Shareholder Agreement, the ▇▇▇▇▇▇
------------------
Lease, the Des Moines Lease, the Woodlands Sublease, the License Agreement, the
Post-Closing Risk Allocation Agreement and the Standby Funding Agreement.
"Related Party" means any director, officer, 10% or more common
-------------
stockholder, or "affiliate" or "associate" (as such terms are defined in Rule
12b-2 under the Securities Exchange Act of 1934) of Seller or any subsidiary of
Seller.
"Release" means anything defined as a "release" under CERCLA or RCRA.
-------
"Remedial Action" means any and all measures required pursuant to
---------------
applicable Environmental Laws to reduce the level of Hazardous Substances to
levels which comply with applicable Remediation Standards.
"Remediation Standards" means any attainment or risk-based standards
---------------------
applicable to a Remedial Action or the least stringent standards (without the
use of institutional controls unless consent is obtained from the owner of the
property, which consent shall not be unreasonably withheld) for performing a
Remedial Action that are required pursuant to applicable Environmental Laws
which govern in the jurisdiction where the property subject to Remedial Action
is located.
"Representatives" means, with respect to any Person, such Person's
---------------
officers, directors, employees, advisors, consultants, representatives, agents
and Affiliates.
"Retained Records" has the meaning specified in Section 7.3(a).
---------------- --------------
"SEC" means the U.S. Securities and Exchange Commission.
---
"SEC Documents" has the meaning specified in Section 5.2.4.
------------- -------------
-9-
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Seller" has the meaning specified in the Introduction.
------
"Seller Environmental Site Assessments" means those reports prepared
-------------------------------------
in 1992 and 1993 with respect to Seller's properties located at Provo, Utah;
Neville Island, PA; and Clive, Iowa.
"Seller Indemnitees" has the meaning specified in Section 8.2(b).
------------------ --------------
"Seller's ESOP" has the meaning specified in Section 7.1.4(d).
------------- ----------------
"Seller's Hourly 401(k) Plan" has the meaning specified in Section
--------------------------- -------
7.1.4(b).
--------
"Seller's Salaried 401(k) Plan" has the meaning specified in Section
----------------------------- -------
7.1.4(a).
--------
"Seller's Third Party Claims" has the meaning specified in Section
--------------------------- -------
8.3.
"Severance Plans" has the meaning specified in Section 4.1(e).
--------------- --------------
"Shareholder Agreement" means that certain Shareholder Agreement of
---------------------
even date herewith between CB&I, Seller and certain CB&I shareholders.
"Significant Subsidiary" means HyCon, Inc. and Construcciones PDM
----------------------
Venezuela.
"Standby Funding Agreement" means that certain Standby Funding
-------------------------
Agreement of even date herewith among Seller, CB&I and Farinvest, Ltd.
"Stock Amount" has the meaning specified in Section 3.1(a).
------------ --------------
"Tampa Sea-3 Project" means that certain terminal project at the Port
-------------------
of Tampa, Florida constructed by Seller's Engineered Construction Division for
Sea-3 of Florida, Inc.
"Tangible Personal Property" has the meaning specified in Section
-------------------------- -------
2.1.2.
-----
"Target Adjusted Net Working Capital of the Divisions" has the meaning
----------------------------------------------------
specified in Section 3.2(a).
--------------
"Tax" or "Taxes" means any or all federal, state, county, local,
--- -----
foreign and other taxes, governmental assessments, levies, charges, fees and
duties of any kind whatsoever, including use taxes, gross receipts taxes, sales
taxes, value-added taxes, income, capital gains, profits, franchise, capital,
goods and services taxes, occupation taxes, real property taxes, transfer taxes,
excise taxes, personal property taxes, ad valorem taxes, payroll related taxes,
employment taxes, social security taxes, license fees, import and export duties,
and any estimated
-10-
withholding, or minimum taxes with respect thereto, together with any related
penalties, fines, additions to tax or interest.
"Third Party Claim" has the meaning specified in Section 8.3.
----------------- -----------
"Transfer" has the meaning specified in Section 2.1.
-------- -----------
"Transfer Documents" has the meaning specified in Section 6.2.2.
------------------ -------------
"Transferred Employees" has the meaning specified in Section 7.1.1.
--------------------- -------------
"Transferred Intellectual Property" has the meaning specified in
---------------------------------
Section 2.1.6.
-------------
"Union Pension Plan" has the meaning specified in Section 7.1.4(j).
------------------ ----------------
"▇▇▇▇▇▇ Lease" means that certain two-year lease agreement of even
------------
date herewith relating to certain real property located in Warren, Pennsylvania
between Seller, as lessor, and Purchaser, as lessee.
"▇▇▇▇▇▇ Plan" has the meaning specified in Section 7.1.4(j)(i).
----------- -------------------
"Woodlands Landlord" means Woodlands Office Equities - '95 Limited, a
------------------
Texas limited partnership.
"Woodlands Lease" means that certain Lease Agreement between the
---------------
Woodlands Landlord, as lessor, and Seller, as lessee, dated June 13, 1996, as
amended by Expansion, Modification and Ratification of Lease dated May 7, 1998,
Expansion, Modification and Ratification of Lease dated October 14, 1998,
Assignment of Lease Agreement, Modification and Consent executed by the
Woodlands Landlord, Seller and Araxas Energy Corp., an Oklahoma corporation,
dated November 1, 1999, and Modification and Ratification of Lease dated
December 20, 2000, pursuant to which the Woodlands Landlord has leased to Seller
32,357 square feet of net rentable space on the third and fourth floor of the
building located at 10200 ▇▇▇▇▇▇'▇ Mill Road, The Woodlands, Texas.
"Woodlands Sublease" means that certain Sublease Agreement of even
------------------
date herewith between Seller, as sublessor, and Purchaser, as sublessee,
relating to the Woodlands Lease premises.
1.2. Certain Interpretive Matters. Unless the context otherwise
----------------------------
requires, (a) all references to Sections, Articles, Exhibits or Schedules are to
Sections, Articles, Exhibits or Schedules of or to this Agreement, (b) the term
"or" is disjunctive but not necessarily exclusive, (c) words in the singular
include the plural and vice versa and (d) the term "including" means "including,
without limitation".
-11-
1.3. Knowledge. Except as provided in the immediately following
---------
sentence, where any statement is qualified by the expression "to the Seller's
knowledge" or by a similar expression, that statement shall be deemed to be the
actual personal knowledge of Wm. ▇. ▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇. The statements
in Section 5.1.15 qualified by the expression "to Seller's knowledge" shall be
--------------
deemed to be the actual personal knowledge, without due inquiry, of Wm. ▇.
▇▇▇▇▇, ▇. ▇. ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇. Where any statement is
qualified by the expression "to the Purchaser's knowledge" or by a similar
expression, that statement shall be deemed to be the actual personal knowledge
of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
The statements in Section 5.1.15 qualified by the expression "within the
--------------
knowledge of Purchaser" shall be deemed to be the actual personal knowledge,
without due inquiry, of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ or R. ▇▇▇▇▇ ▇▇▇▇▇▇▇.
ARTICLE II
PURCHASE AND SALE OF ASSETS
2.1. Purchase and Sale of Assets. On the terms and subject to the
---------------------------
conditions hereof, at the Closing, Seller will sell, transfer, convey, assign
and deliver ("Transfer") to Purchaser and Purchaser will purchase and acquire
--------
from Seller, all of Seller's right, title and interest in and to the properties
and assets used by the Divisions in the conduct of the Businesses (collectively,
and in each case exclusive of any Excluded Assets, the "Assets"), free and clear
------
of all Liens except Permitted Liens, including the following Assets:
2.1.1. Owned Real Property. The real property described in
-------------------
Section 2.1.1 of the disclosure schedule delivered by Seller to Purchaser
concurrently with the execution and delivery of this Agreement (the "PDM
---
Disclosure Schedule"), together with all of the structures, fixtures and
-------------------
improvements located on such real property (the "Owned Real Property").
-------------------
2.1.2. Tangible Personal Property. All design, fabrication,
--------------------------
manufacturing, construction, erection, maintenance, research and development,
testing and other machinery and equipment, vehicles, tools, dies, molds,
furniture, fixtures, office equipment, field equipment (including a 120 by 240
foot unassembled toolhouse building of Seller located at Fresno, CA), supplies
and other tangible personal property (together with all spare and maintenance
parts, operating manuals, equipment specifications and diagrams) used by the
Divisions in the conduct of the Businesses (including (i) all machinery,
equipment, trade fixtures, furniture and other tangible personal property at
Seller's Warren, PA plant and Des Moines, IA toolhouse and (ii) all Computer
Numerically Controlled equipment and computer equipment) (collectively, the
"Tangible Personal Property").
--------------------------
2.1.3. Inventories and Stores and Supplies. All raw
-----------------------------------
materials, components, work-in-process, finished products, packaging and
shipping materials and supplies
-12-
and other inventories (on-site, off-site and consigned) owned by Seller and used
by the Divisions in the conduct of the Businesses (collectively, the
"Inventories").
-----------
2.1.4. Contract Rights. Subject to Section 2.3, all leases (including
--------------- -----------
the real property leases described in Section 2.1.4 of the PDM Disclosure
Schedule relating to certain office, toolhouse and other properties leased by
Seller or its Affiliates and used by the Divisions in the conduct of the
Businesses, the "Leased Real Property"), customer contracts, supply
--------------------
agreements and procurement contracts (including raw materials, utilities,
maintenance supplies and services, and capital equipment), consulting
agreements, alliance and partnering agreements, agency, representative and
distribution agreements, licenses, purchase and sales orders, backlog,
commitments and other agreements and proposals and other contractual rights,
commitments or obligations of Seller with respect to the Divisions, including
those listed or described on Section 5.1.12 of the PDM Disclosure Schedule, but
excluding those listed or described in Section 2.2.3 (collectively, the
-------------
"Contracts").
----------
2.1.5. Accounts Receivable. All accounts, notes, lease receivables
-------------------
and other receivables of Seller with respect to the Divisions and all rights of
Seller with respect to the Divisions to ▇▇▇▇ and receive payment for services
performed and/or facilities or products provided or delivered but unbilled or
unpaid as of the Closing, other than receivables specified in Section 2.2.2.
-------------
2.1.6. Intellectual Property. All United States and foreign patents
---------------------
and applications therefor, copyrights and registrations therefor, trademarks and
registrations and applications therefor, service marks and registrations and
applications therefor and trade names and registrations and applications
therefor, all computer software, all product registrations and licenses, and all
translations, adaptations, derivations and combinations of the foregoing,
including those listed or described in Section 5.1.10 of the PDM Disclosure
Schedule; any and all data, know-how, trade secrets, proprietary processes and
formulae, designs, drawings and inventions (including all registrations,
licenses and similar agreements and research, analysis and supporting
documentation in respect of the foregoing), unregistered trademarks, service
marks, tradenames and trade dress of Seller used by the Divisions in the conduct
of the Businesses; and all income, royalties, damages and payments which accrue
as of the Closing or thereafter with respect to any of the things listed in this
Section 2.1.6, including damages and payments for past, present or future
-------------
infringements or misappropriation thereof, the right to ▇▇▇ and recover for past
infringements or misappropriation thereof and any and all corresponding rights
that now or hereafter may be secured anywhere in the world; and all goodwill
associated with any of the foregoing items in this Section 2.1.6 (collectively,
"Intellectual Property"). For purposes of this Agreement, items of Intellectual
---------------------
Property included in the Assets are referred to collectively as the "Transferred
-----------
Intellectual Property".
---------------------
2.1.7. Permits. Subject to Section 2.3, all Permits used by, and
------- -----------
pending Permits (to the extent assignable and transferable) to be used by, the
Divisions in the conduct of the Businesses.
-13-
2.1.8. Prepaid Expenses, Advances and Deposits. All prepaid expenses
---------------------------------------
of the Divisions, advances to third parties (other than any Related Party),
deposits with third parties by the Divisions (other than any Related Party),
deposits by third parties with the Divisions (other than any Related Party) and
credits from third parties (other than any Related Party) available to the
Divisions.
2.1.9. Records. Records other than Retained Records.
-------
2.1.10. Claims and Insurance Proceeds. All insurance, warranty and
-----------------------------
condemnation proceeds received after the Closing Date and all indemnity claims,
judgments, rights of recovery, rights of set-off and recoupment and causes of
action of the Seller or the Businesses against third parties with respect to
damage, non-conformance of or loss to the Assets occurring on or prior to the
Closing Date, and all rights to proceeds under insurance policies in respect of
any such damage or loss, in each case net of any amounts with respect thereto
that are reflected as a liability on the Audited Final Balance Sheet.
2.1.11. Lists, Sales Materials and Software. All of the following
-----------------------------------
items of Seller used by the Divisions in the conduct of the Businesses: (a)
customer and contact lists, including names, addresses and telephone numbers,
(b) sales, product and promotional data, brochures, forms, mailing lists and
advertising materials, (c) vendor lists, including names, addresses and the
names of their Representatives, (d) project designs and specifications and plans
and drawings related thereto, and (e) computer software (including Computer
Aided Design software).
2.1.12. Cash. Cash on hand held by Seller as of the Effective Time in
----
its own bank accounts with respect to the Divisions (which cash or bank accounts
will be transferred to Purchaser), other than such cash as is specified in
Section 2.2.1.
-------------
2.1.13. Significant Subsidiaries. Seller's interest in the capital
------------------------
stock or ownership interests of the Significant Subsidiaries.
2.1.14. Certain Plan Assets. Those assets of the Union Pension Plans
-------------------
described in Section 7.1.4.
-------------
2.1.15. Strategic Plans. All marketing studies, strategic plans and
---------------
similar analyses and compilations of data prepared by Seller primarily relating
to the Businesses.
2.2. Excluded Assets. Notwithstanding the foregoing, the Assets shall not
---------------
include the following items, which shall be retained by Seller (the "Excluded
--------
Assets"):
------
2.2.1. Cash. (a) Cash received after December 31, 2000 with respect
----
to the Divisions and relating to the accounts and notes receivable which are
listed or described in Schedule 2.2.2 of the PDM Disclosure Schedule, and (b)
cash in certain foreign bank accounts not exceeding $1,054,270 in aggregate
amount.
-14-
2.2.2. Certain Receivables. (a) All accounts and notes receivable
-------------------
with respect to the Divisions which are listed or described in Section 2.2.2 of
the PDM Disclosure Schedule, (b) all accounts and notes receivable in which a
Related Party is a debtor; (c) all receivables relating to the Enron LNG Project
and the Tampa Sea-3 Project; and (d) the Argentina value added tax receivable in
the approximate amount of $1,200,000.
2.2.3. Certain Contracts. (a) All contracts with a Related Party;
-----------------
(b) the construction contracts of Seller's Engineered Construction Division
relating to (i) the Enron LNG Project, (ii) the Tampa Sea-3 Project and (iii)
subject to Section 2.3.2(b) below, the Contracts listed in subsection (a) of
----------------
Section 5.1.12 of the PDM Disclosure Schedule other than those Contracts listed
or described in Schedule 2.2.3 (such Contracts listed in Schedule 2.2.3 to be
-------------- --------------
included in the Assets); and (c) the Mo ▇▇▇▇▇▇▇ Consulting Agreement.
2.2.4. Nonassignable Contracts and Nonassignable Permits. Without
-------------------------------------------------
limiting the effect of Section 2.3, (a) any Nonassignable Contract or
-----------
Nonassignable Permit for which, but only so long as, the required consent,
approval, novation or waiver of a third Person necessary for the Transfer
thereof has not been obtained, (b) any nontransferable qualification or license
to do business in any jurisdiction (domestic or foreign), and (c) any other
asset not material to the Businesses, the benefits of which will not be and
cannot be made available to Purchaser after the Closing as a result of the
Transfer of the Assets.
2.2.5. Employee Plans. All the rights of Seller in, and all assets
--------------
of, the Plans other than to the extent rights or assets of any Union Pension
Plan are specifically transferred to Purchaser pursuant to Section 7.1.4.
-------------
2.2.6. Retained Records and Information Resources. All Retained
------------------------------------------
Records and all rights and interests of the Seller in any computer software
license or related service agreements not used primarily in the Businesses.
2.2.7. Other Assets. Any asset, property, interest in property or
-------------
right (a) listed or described on Schedule 2.27, or (b) owned by the Seller and
-------------
used or generated in connection with Seller's non-Divisional corporate staff
function with respect to the Businesses (including its shared facilities
services) and not used, generated or held primarily in connection with the
Businesses.
2.2.8. PDM Name. Subject to the terms of the License Agreement, the
--------
names "Pitt-Des Moines" or "PDM", or any variation materially derived therefrom.
2.3. Nonassignable Contracts and Nonassignable Permits.
-------------------------------------------------
2.3.1. Nonassignability. Nothing in this Agreement will constitute
----------------
a Transfer or an attempted Transfer of any Contract, Permit or Environmental
Permit which is not capable of being Transferred without the consent, approval,
novation or waiver of a third party (including a Governmental Authority), or any
Contract, Permit or Environmental Permit the
-15-
Transfer or attempted Transfer of which would constitute a breach of such
Contract, Permit or Environmental Permit or a violation of any applicable Law
(collectively, the "Nonassignable Contracts" and the "Nonassignable Permits,"
----------------------- ---------------------
respectively).
2.3.2. Seller To Use Commercially Reasonable Efforts. (a) Not-
---------------------------------------------
withstanding anything contained in this Agreement to the contrary, Seller will
not be obligated to Transfer to Purchaser any of its rights and obligations in
and to any Nonassignable Contract or Nonassignable Permit without first having
obtained all consents, approvals, novations and waivers necessary for such
Transfer. For a period of six (6) months after the Closing Date, each of Seller
and Purchaser will, and will cause its respective Affiliates to, use
commercially reasonable efforts and cooperate with each other in obtaining all
consents, approvals, novations and waivers necessary to Transfer to Purchaser
all Nonassignable Contracts and Nonassignable Permits; provided, however, that,
-------- -------
in each such case, neither Purchaser nor Seller will be obligated to commence
any litigation or offer or grant any accommodation (financial or otherwise) to
any Person or incur any other obligation or liability therefor, and Purchaser
and Seller shall each bear their own costs and expenses in connection therewith.
(b) Notwithstanding Section 2.2.3(b)(iii) above, Seller shall,
---------------------
upon written request of Purchaser from time to time during the six-month period
subsequent to the Closing Date, sell, transfer and assign, by written instrument
reasonably satisfactory to Purchaser, all of Seller's right, title and interest
in any or all (as requested by Purchaser) of the Contracts listed in subsection
(a) of Section 5.1.12 of the PDM Disclosure Schedule and otherwise cooperate
with Purchaser to enable Purchaser to achieve the benefits of such specified
Contracts. Seller agrees not to terminate (or fail to take action necessary to
prevent termination) of any such Contracts prior to the expiration of such six-
month period.
2.3.3. If Waivers or Consents are Not Obtained. To the extent that a
---------------------------------------
consent, approval, novation or waiver referred to in Section 2.3.2 with respect
-------------
to a Nonassignable Contract or Nonassignable Permit is not obtained on or prior
to the Closing Date, Seller will, at Purchaser's reasonable request and
direction, in any reasonable and lawful arrangement (including entering into a
subcontract with Purchaser), seek to provide Purchaser the benefits and risks of
such Nonassignable Contract or Nonassignable Permit to the extent relating to
the Businesses for the period commencing with the Closing Date and continuing
until the earlier of (i) the expiration of the original term of the applicable
Nonassignable Contract or Nonassignable Permit, (ii) Seller's receipt of written
notice from Purchaser that Purchaser has obtained an adequate replacement for
such Nonassignable Contract or Nonassignable Permit or (iii) the assignment to
Purchaser of the applicable Nonassignable Contract or Nonassignable Permit.
Purchaser shall indemnify, defend and hold harmless Seller and any Seller
Indemnitee from any and all Indemnifiable Losses (including any increase in the
liability of Seller or any Affiliate thereof in respect of Taxes) arising out of
such requested cooperation and arrangements; provided that, to the extent the
--------
parties are successful in providing such remaining benefits, if any, of such
Nonassignable Contract or Nonassignable Permit to Purchaser, Purchaser will pay,
honor, perform and discharge when due the corresponding liabilities, obligations
and
-16-
commitments of Seller arising thereunder; and, provided further that, to the
-------- -------
extent the parties are not successful in so providing such remaining benefits,
if any, of any Nonassignable Contract or Nonassignable Permit to Purchaser,
Purchaser will have no obligation to pay, honor, perform and discharge when due
the corresponding liabilities, obligations and commitments of Seller arising
thereunder, which shall be treated as Excluded Liabilities.
ARTICLE III
PURCHASE PRICE
--------------
3.1. Purchase Price. (a) On the terms and subject to the conditions
--------------
hereof, in consideration of the Transfer of the Assets and the other
undertakings of Seller, at the Closing, Purchaser shall (i) pay to Seller cash
in the amount of Forty Million Dollars ($40,000,000.00) (the "Cash Amount"),
-----------
(ii) issue the CB&I Shares to Seller as registered shares (by making an entry in
the U.S. part of the CB&I shareholders registry) and deliver to Seller legended
certificates issued for the CB&I Shares (the "Stock Amount"), subject to
------------
adjustment as provided in Section 3.2, and (iii) assume the Assumed Liabilities.
-----------
The Cash Amount and the Stock Amount (subject to adjustment as provided in
Section 3.2) shall constitute the purchase price of the Assets (the "Purchase
----------- --------
Price"). For purposes of determining any adjustment provided in Section 3.2 and
----- -----------
for purposes of determining the issue price, the CB&I Shares shall be deemed to
have a value equal to $17.15 per share.
(b) At the Closing, Purchaser shall deliver to Seller
immediately available funds equal to the Cash Amount by bank wire transfer to
Seller's account, which account shall be designated by Seller to Purchaser not
later than the close of business two (2) business days immediately preceding the
Closing Date.
3.2. Purchase Price Adjustment. (a) As soon as practicable, and in
-------------------------
no event later than 30 days after the Closing Date, Seller shall have prepared
and delivered to Purchaser (i) audited combined statements of financial
condition of the Divisions as of December 31, 2000 (the "Audited Final Balance
---------------------
Sheet") and December 31, 1999, and the related audited combined statements of
-----
income, equity and cash flows for the years then ended, prepared in accordance
with United States generally accepted accounting principles on a basis
consistent with the Financial Statements, together with a report thereon by
Ernst & Young, LLP, and (ii) a calculation of the Net Working Capital of the
Divisions as of December 31, 2000 derived therefrom, but appropriately adjusted
to exclude from such calculation Excluded Assets and Excluded Liabilities (the
"Adjusted Net Working Capital of the Divisions"). Within five (5) business days
----------------------------------------------
thereafter:
(1) if the Adjusted Net Working Capital of the Divisions as
so calculated is greater than $41,400,000 (the "Target Adjusted Net Working
---------------------------
Capital of the Divisions"), the Cash Amount shall be increased by the difference
------------------------
between such Adjusted Net
-17-
Working Capital of the Divisions and the Target Adjusted Net Working Capital of
the Divisions, and Purchaser shall pay Seller cash in an amount equal to such
difference; or
(2) if the Adjusted Net Working Capital of the Divisions as so
calculated is less than the Target Adjusted Net Working Capital of the
Divisions, the Stock Amount (in the form of Excess Shares valued at $17.15 per
Share) shall be reduced by the difference between the Target Adjusted Net
Working Capital of the Divisions and such Adjusted Net Working Capital of the
Divisions, and Seller shall by deed transfer to CB&I for no consideration ("om
--
niet") such Excess Shares having an aggregate value equal to such difference,
----
and Seller shall surrender to CB&I the legended certificates issued for such
Excess Shares (and the transfer shall be entered in the U.S. part of the CB&I
shareholders register).
(b) Each party will provide the other party and its accountants
reasonable access to the books, records, workpapers, facilities and employees of
the Divisions and to the workpapers of their respective accountants in
connection with the preparation and review of the Audited Final Balance Sheet.
3.3. Collection of Receivables Constituting Excluded Assets. The
------------------------------------------------------
parties acknowledge that Seller has facilitated the consummation of the
transactions contemplated by this Agreement by agreeing to retain as Excluded
Assets certain accounts receivable (including certain unbilled retainage) as set
forth in Section 2.2.2 of the PDM Disclosure Schedule (collectively, "Excluded
--------
Accounts Receivable"). Following the Closing Date, Purchaser agrees (a) to use
-------------------
its prompt commercially reasonable best efforts (i) to perform (at Purchaser's
sole cost and expense) all work as and when necessary and required under each
contract to which such Excluded Accounts Receivable relate in order to enable
Seller to collect the Excluded Accounts Receivable in full on a timely basis and
(ii) acting as agent on behalf of Seller, to collect (without being obligated to
resort to suit or third party or other extraordinary collection efforts) all
Excluded Account Receivables, and (b) to remit to Seller all checks, money and
other cash proceeds received by Seller with respect to each such Excluded
Account Receivable within five (5) days of the receipt by Seller of the same.
Purchaser shall cooperate with Seller in all reasonable respects in the
collection of the Excluded Accounts Receivable, including but not limited to,
making available to Seller records and employees of Purchaser. Notwithstanding
any other provision of this Agreement to the contrary, Purchaser acknowledges
and agrees the Excluded Accounts Receivable constitute the sole and exclusive
property of Seller; provided, however, that Purchaser shall have a right to
-------- -------
setoff against any amount payable pursuant to this Section 3.3 the amount of any
-----------
sum payable to Purchaser by Seller hereunder or otherwise in regard to any
liquidated amount (i.e., any amount which Seller has agreed is owed) or any
----
amount determined to be payable by a court, Governmental Authority or
arbitrator.
-18-
ARTICLE IV
ASSUMPTION OF LIABILITIES
-------------------------
4.1. Assumed Liabilities. On the terms and subject to the conditions
-------------------
hereof, at the Closing, Purchaser shall assume, and thereafter pay, fully
satisfy, perform and discharge, when due, in accordance with their respective
terms, all liabilities and obligations of Seller relating to the Businesses,
including, but not limited to, those set forth below, other than any Excluded
Liabilities (such liabilities and obligations being referred to collectively
herein as the "Assumed Liabilities"):
-------------------
(a) All liabilities and obligations reflected on the Base Balance
Sheet, and all liabilities and obligations of the Seller, to the extent related
to the Divisions, incurred in the ordinary course of business between the
Balance Sheet Date and the Closing;
(b) All liabilities and obligations arising under or related to
all Contracts;
(c) All liabilities and obligations with respect to any warranty
or similar liabilities relating to facilities, products and services which were
provided prior to the Closing;
(d) Liabilities and obligations relating to Transferred Employees
and the Union Pension Plans to the extent set forth in Section 7.1;
-----------
(e) All liabilities and obligations relating to Seller's regular
and special severance plans pertaining to the Divisions, but only to the extent
described on Schedule 4.1(e) (the "Severance Plans");
--------------- ---------------
(f) All liabilities and obligations to or in respect of any
Employee which relate to any and all claims for workers' compensation benefits
except for any such claims which (i) are listed on Section 4.2(f) of the PDM
Disclosure Schedule, (ii) have been reported to Seller prior to the Closing Date
or (iii) are the result of any injury or accident occurring prior to the Closing
Date; and
(g) All liabilities (including, but not limited to, Losses and
administrative or civil fines, penalties or assessments) and obligations
(excluding any such liabilities and obligations relating to the ▇▇▇▇▇▇ and
DesMoines properties, unless specifically set forth in the ▇▇▇▇▇▇ Lease or the
DesMoines Lease) relating to or concerning (i) any Environmental On-Site
Liabilities and Costs; (ii) any Environmental Off-Site Liabilities and Costs;
(iii) the inability to transfer, prior to the Closing Date, from the Seller to
the Purchaser any Environmental Permit required for the operation of the
Businesses; (iv) the Purchaser's operation of the Businesses or use, ownership,
occupation or operation of the Assets under any Environmental Permit (including
any Nonassignable Permit) issued to Seller which, as of the
-19-
Closing Date, is not transferred to Purchaser; (v) any matter, circumstance, set
of facts or any actual or alleged violation of Environmental Laws described or
set forth in Section 5.1.15 of the PDM Disclosure Schedule; and (vi) any matter,
circumstance, set of facts or any actual or alleged violation of Environmental
Laws described or set forth in any Purchaser Environmental Site Assessment and
any Seller Environmental Site Assessment; and
(h) Any liability or obligation relating to deductibles (other than
(i) deductibles and self-insurance retentions relating to workers compensation
insurance and (ii) deductibles relating to any accident or loss known to Seller
at or prior to the Closing Date) or self-insured retentions or retroactive
premium adjustments (to the extent such adjustments relate to risks relating to
the Businesses) with respect to liabilities covered under the Insurance Policies
pursuant to Section 8.4.
-----------
4.2. Excluded Liabilities. Notwithstanding the provisions of Section 4.1,
-------------------- -----------
Purchaser shall not assume any of the following liabilities and obligations of
the Seller or of the Businesses (the "Excluded Liabilities"):
--------------------
(a) Any liability or obligation relating to Indebtedness of Seller or
of any Affiliate of Seller, and any account payable in which the creditor is a
Related Party;
(b) Without limiting the effect of Section 2.3, any liability or
-----------
obligation relating to any Excluded Asset (including, but not limited to, any
liabilities, warranties or performance obligations relating to the Contracts
referred to in Section 2.2.3), and any liability or obligation of Seller to the
-------------
extent, and only to the extent, not related to the Assets or the Businesses;
(c) Any liability relating to the Businesses to the extent, and only
to the extent, of the coverage available under the Insurance Policies for losses
occurring prior to the Closing Date (as further provided in Section 8.4),
-----------
including as an Excluded Liability (i) any deductible or self-insurance
retention relating to workers compensation insurance and (ii) any deductible
relating to any accident or loss known to Seller at or prior to the Closing
Date;
(d) Any liability or obligation with respect to Nonassignable
Contracts and Nonassignable Permits to the extent such liability or obligation
is deemed an Excluded Liability pursuant to Section 2.3.3;
-------------
(e) (i) Any liability or obligation relating to Plans except those
liabilities assumed pursuant to Section 7.1.4, (ii) any liability or obligation
-------------
that arises from the failure, on or prior to the Closing Date, of (A) any Union
Pension Plan being assumed by Purchaser pursuant to Section 7.1.4(j) to be
----------------
qualified under Section 401(a) of the Code, or (B) any trust forming a part
thereof to have received a favorable determination letter from the Internal
Revenue Service as to its qualification under the Code and to the effect that
the trust is exempt from taxation under section 501(a) of the Code, and (iii)
any withdrawal or other liability
-20-
relating to Seller's participation in any "multiemployer pension plan" as
defined in Section 3(37) of ERISA;
(f) All liabilities and obligations to or in respect of any Employee
which relate to any and all claims for workers' compensation benefits which (i)
are listed on Section 4.2(f) of the PDM Disclosure Schedule, (ii) have been
reported to Seller prior to the Closing Date or (iii) are the result of any
injury or accident occurring prior to the Closing Date;
(g) Any liability for Taxes, other than those liabilities properly
accrued on the Audited Final Balance Sheet, of Seller or any of its Affiliates
or attributable to the ownership of the Assets or the operations of the
Businesses for all taxable periods (or portions thereof) ending on or before the
Effective Time, including, without limitation, potential liability relating to
the application of Venezuela income tax credits;
(h) Any liabilities or obligations relating to Seller's properties
located at Des Moines, Iowa or Warren, Pennsylvania except to the extent
expressly assumed by Purchaser pursuant to the DesMoines Lease or the ▇▇▇▇▇▇
Lease; and
(i) Any liabilities (including, but not limited to, Losses and
administrative, civil or criminal fines, penalties or assessments) or
obligations relating to or concerning (i) any alleged or actual violation of
Environmental Laws, or any Release or threatened Release of Hazardous Substances
at any property formerly owned, used, occupied or leased by Seller, or (ii) any
site or facility to which the Seller has or the Divisions have transported or
arranged for the transportation, whether directly or indirectly by a third
party, of Hazardous Substances for storage, treatment, disposal or other
management to the extent such Hazardous Substances were generated by Seller at
any property formerly owned, used, occupied or leased by Seller.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
5.1. Representations and Warranties of Seller. Seller represents and
----------------------------------------
warrants to Purchaser as follows:
5.1.1. Corporate Organization; Good Standing. (a) Each Significant
-------------------------------------
Subsidiary is a corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has all
requisite corporate power and authority to own, lease or otherwise hold its
properties and to carry on that part of the Businesses conducted by it. Each
Significant Subsidiary is duly qualified to transact business and is in good
standing as a foreign corporation in each jurisdiction in which the failure to
be so qualified would reasonably be expected to have a Material Adverse Effect.
Seller has caused true, complete and correct copies of the charter documents,
each as in effect on the date hereof, and the minute
-21-
books and similar corporate records of each Significant Subsidiary to be
delivered or otherwise made available to Purchaser.
(b) Section 5.1.1 of the PDM Disclosure Schedule sets forth for each
Significant Subsidiary its jurisdiction of organization, capitalization and
percentage of outstanding capital stock owned by Seller or another subsidiary of
Seller. Except as set forth in Section 5.1.1 of the PDM Disclosure Schedule,
Seller directly or indirectly owns all of the outstanding capital stock of each
Significant Subsidiary free and clear of any Lien, claim, option, right of first
refusal, agreement limitation or restriction of any kind; Seller has full voting
power over such capital stock subject to no proxy, shareholders agreement or
voting trust. Upon consummation of the transactions contemplated by this
Agreement, Seller will transfer to Purchaser good title to all outstanding
capital stock of each Significant Subsidiary free and clear of any Lien.
5.1.2. Authorization and Effect of Agreement. (a) The Seller has all
-------------------------------------
requisite corporate power and authority to execute and deliver this Agreement
and the Related Agreements and to perform its obligations hereunder and
thereunder. The execution and delivery by the Seller of this Agreement and the
Related Agreements and the performance by Seller of its obligations hereunder
and thereunder have been duly and validly authorized by all necessary corporate
action on the part of Seller.
(b) This Agreement and each of the Related Agreements has been duly
and validly executed and delivered by Seller and each constitutes a valid and
binding obligation of Seller, enforceable against Seller in accordance with its
terms, except to the extent that such enforceability is limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other similar
laws relating to or affecting creditors' rights generally and by general
equitable principles (including the exercise of judicial discretion in
accordance with such principles).
5.1.3. No Conflicts. (a) The execution and delivery of this Agreement and
-------------
the Related Agreements by Seller does not, and the performance by Seller of its
obligations hereunder and thereunder will not, conflict with, result in a
violation of, or constitute a default (with or without notice or lapse of time,
or both) under, give rise to a right of termination, cancellation or
acceleration of any obligation under, or result in the creation of any Lien upon
the Businesses or any of the Assets under, any provision of (i) Seller's Amended
Articles of Incorporation or Bylaws, (ii) any indenture, credit agreement,
mortgage or Material Contract of Seller, (iii) any Permit of Seller or (iv) any
order, writ, judgment, injunction, decree or Law applicable to Seller or any of
its properties, except in any such case for any such conflicts, violations,
defaults, rights of termination, cancellation or acceleration or Liens (A) that
are listed or described in Section 5.1.3 of the PDM Disclosure Schedule or that
could not reasonably be expected to result in a Material Adverse Effect, or (B)
as to which necessary consents, approvals, orders or authorizations of, or
registrations declarations or filings with, Governmental Authorities or other
Persons have been obtained or made prior to the date hereof.
-22-
(b) Except as listed or described in Section 5.1.3 of the PDM
Disclosure Schedule, no material consent, approval, order or authorization of,
or registration, declaration or filing with, any Governmental Authority or other
Person is required to be obtained or made by or with respect to Seller in
connection with the execution, delivery and performance of this Agreement or any
Related Agreement, except for (i) the filing of a premerger notification report
by Seller under the HSR Act, (ii) consents, approvals, orders, authorizations,
registrations, declarations and filings under any applicable foreign laws
intended to prohibit, restrict or regulate actions having the purposes or effect
of monopolization or restraint of trade ("Foreign Monopoly Laws"), (iii) filings
---------------------
and consents as may be required under any environmental, health or safety law or
regulation pertaining to any notification, disclosure or required approval
triggered by the consummation of the transactions contemplated hereby, which
necessary consents, approvals, orders, authorizations, registrations,
declarations and filings referred to in (i), (ii) and (iii) above have been
obtained or made prior to the date hereof or (iv) consents, approvals, novations
or waivers with respect to Nonassignable Contracts and Nonassignable Permits.
(c) Except as provided to Purchaser under this Agreement, no Person
has any option, right of first refusal, right of first offer or similar right to
purchase or otherwise acquire the Businesses or any substantial portion of the
Assets and neither the Seller nor any of its Affiliates has entered into any
letter of intent, commitment or agreement with any other Person regarding any
such purchase or acquisition.
5.1.4. Financial Statements. Seller has previously furnished to Purchaser
--------------------
"Liquid & Cryogenic and Water Storage Combined Financial Statements" containing
(a) audited combined statements of financial condition of the Divisions as of
December 31, 1999 and 1998, and the related audited combined statements of
income, equity and cash flows for each of the three years in the period ended
December 31, 1999, together with a report thereon by Ernst & Young LLP, (b)
unaudited combined statements of financial condition and equity of the Divisions
as of September 30, 2000, and related unaudited combined statements of income
and cash flows for the nine-month periods ended September 30, 2000 and 1999, and
(c) unaudited combined statements of financial condition and equity of the
Divisions as of December 31, 2000 (the "Balance Sheet Date"), and related
------------------
unaudited combined income statement for the year ended December 31, 2000 (such
financial statements referred to in (a), (b) and (c) above are collectively
referred to herein as the "Financial Statements"). The Financial Statements (i)
--------------------
have been prepared from and are based upon the books and records of the Seller,
(ii) present fairly the combined financial position and results of operations of
the Divisions and the Businesses as of the dates thereof and for the periods
indicated therein, and (iii) have been prepared in accordance with United States
generally accepted accounting principles consistently applied, subject in the
case of the unaudited Financial Statements to normal year-end audit adjustments
and the lack of footnotes and other presentation items.
-23-
5.1.5. Absence of Changes. Except as expressly contemplated by this
------------------
Agreement, since the Balance Sheet Date the Businesses have been conducted in
the ordinary course of business consistent with past practice and there has not
been:
(a) any adverse change in the Assets, financial condition or
results of operations of the Businesses involving an amount, either individually
or in the aggregate, in excess of $500,000, or any material increase in long-
term liabilities relating to the Businesses;
(b) any damage, destruction or casualty loss (whether or not
covered by insurance) affecting any Asset that, in any individual case, has
resulted in a loss in excess of $100,000 or, in the aggregate, losses in excess
of $250,000;
(c) any material amendment or termination (prior to the
scheduled expiration) of any Material Contract that could reasonably be expected
to have a Material Adverse Effect;
(d) any license, Transfer, pledge, mortgage or other
disposition of, or granting of a Lien on, any Asset material to the operation of
the Businesses (including any sale of real property), except in the ordinary
course of business;
(e) any increase in compensation payable to any Employee other
than in the ordinary course of business or in accordance with any employment,
severance, bonus or consulting agreement;
(f) any change in the accounting methods, practices or
policies used by the Divisions, except as required by applicable accounting
authorities;
(g) any notice of any significant union organizing efforts
involving Employees of either Division;
(h) any agreement or commitment by the Seller to become party
to any transaction relating to the Businesses or the Assets with any officer,
director, Employee, stockholder or Affiliate of any Seller or any individual
related by blood marriage or adoption to any such Person in which such
individual or Person receives any payment (whether in the form of compensation
or otherwise) other than normal compensation paid to directors, officers and
Employees in the ordinary course of business;
(i) any settlement or compromise of any material litigation or
governmental investigation involving the Businesses or any Asset; or
(j) any agreement, commitment or understanding, whether in
writing or otherwise, for the Seller to take any of the actions specified in
items (c), (d), (e), (f), (h) or (i) above.
-24-
5.1.6. Compliance with Laws. Except as described in Section 5.1.6
--------------------
of the PDM Disclosure Schedule, Seller holds all Permits necessary for the
conduct of the Businesses, except for such Permits the failure to hold or obtain
would not result in a Material Adverse Effect. Seller has complied with, and is
not in default under, any Laws applicable to the Businesses, except for such
violations as, individually or in the aggregate, have not resulted in and will
not result in a Material Adverse Effect; provided, however, that Seller makes no
-------- -------
representation or warranty in this Section 5.1.6 with respect to Plans, ERISA or
-------------
other employee benefit matters (which are addressed exclusively in Section
-------
5.1.14), environmental matters (which are addressed exclusively in Section
------ -------
5.1.15) or Taxes (which are addressed exclusively in Section 5.1.16).
------ --------------
5.1.7. Assets Used in the Businesses. The Assets include all assets,
-----------------------------
properties, interests in properties and rights (real, personal and mixed,
tangible and intangible) used (or, in the case of Inventories and Tangible
Personal Property, held for use) necessary to operate the Businesses as
currently conducted by Seller (subject to dispositions in the ordinary course of
business), except for (a) the Excluded Assets and (b) assets used in providing
certain corporate administrative services (including accounting, legal,
personnel, tax, insurance, cash management, financing and credit support,
strategic planning and other similar corporate administrative services).
5.1.8. Title to Assets. (a) Seller has good title to the Assets
---------------
consisting of property purported to be owned by Seller, and valid and
enforceable leasehold rights to the Assets consisting of property purported to
be leased by Seller, in each case free and clear of all Liens, except for (i)
Liens that are listed or described in Section 5.1.8 of the PDM Disclosure
Schedule and (ii) Permitted Liens.
(b) The leases and other agreements or instruments included
in the Contracts under which Seller holds, leases or is entitled to the use of
any real or personal property used in the Businesses, are in full force and
effect and all rentals or other payments payable thereunder prior to the date
hereof have been paid and Seller enjoys peaceable and undisturbed possession
under all such leases.
5.1.9. Brokers. No broker, finder or investment bank is entitled to
-------
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Seller, other than the fees of ▇▇▇▇▇▇ & Co., Inc. which are payable
by Seller.
5.1.10. Intellectual Property. Section 5.1.10 of the PDM Disclosure
---------------------
Schedule lists all of the owned or licensed patents and registered designs
(issued or pending), trademarks (registered or pending), service marks
(registered or pending), copyrights (registered or pending), trade and corporate
names, computer software and other Intellectual Property used in respect of the
Businesses and the Assets, and any licenses granted to or by Seller relating
thereto. The Transferred Intellectual Property, together with commercially
available software,
-25-
includes all Intellectual Property necessary for the conduct and operation of
the Businesses as presently conducted. Except as set forth in Section 5.1.10 of
the PDM Disclosure Schedule, (a) the Seller owns (or has the right to use
pursuant to a valid license) all Transferred Intellectual Property free and
clear of any Liens except for Permitted Liens; (b) to Seller's knowledge, there
is no infringement or misappropriation by any other Person of the Transferred
Intellectual Property; (c) the Seller has received no written notice of (i)
infringement or misappropriation of or conflict with the asserted rights of
others in connection with the Transferred Intellectual Property or the continued
operation of the Businesses as currently conducted, or (ii) written claims made
against the Seller or any of its Affiliates asserting the invalidity, misuse or
unenforceability of the Transferred Intellectual Property; and (d) the Seller
has not granted or assigned to any other Person any license or other right to
use any Transferred Intellectual Property. All Transferred Intellectual Property
will be owned or licensed and available to Purchaser immediately subsequent to
the Closing, subject to the same limitations and conditions as were theretofore
applicable to Seller. All patentable technology invented by any Employee and
used in the Businesses has been validly transferred to Seller.
5.1.11. Legal Proceedings. (a) Except as described in Section 5.1.11
-----------------
of the PDM Disclosure Schedule, there are no legal, governmental,
administrative, arbitral or other proceedings, claims, actions or suits
(collectively, "legal proceedings and claims") pending, or to Seller's
knowledge, threatened, against the Seller and/or relating to the Divisions,
Businesses or Assets which, if determined adversely to Seller, would result in a
judgment in excess of $50,000. The reserves covering any and all such potential
legal proceedings and claims relating to the Divisions, Businesses or Assets set
forth in the Financial Statements have been determined in accordance with United
States generally accepted accounting principles consistently applied and such
reserves as reflected on the Audited Final Balance Sheet will be determined in
accordance with United States generally accepted accounting principles
consistently applied. There is no claim, action, suit, proceeding, arbitration,
investigation or hearing or notice of hearing pending or, to Seller's knowledge,
threatened, that questions or involves the validity or enforceability of any
obligation of Seller under this Agreement or any Related Agreement or seeks to
prevent or delay consummation by Seller of the transactions contemplated by this
Agreement.
(b) The Seller is not subject to or bound by any
injunction, order, judgment or decree relating to either Business or the Assets.
5.1.12. Contract Rights. Except as listed or described in Section
---------------
5.1.12 of the PDM Disclosure Schedule (each Contract listed in Section 5.1.12 of
the PDM Disclosure Schedule is referred to herein as a "Material Contract"),
-----------------
Seller is not a party to or bound by any Contract, written or oral, which
relates to either of the Businesses or any of the Assets and which is of a type
described below (other than any Excluded Asset):
(a) any partnership, joint venture agreement, alliance or
partnering agreement, joint bidding ("teaming") agreement or similar agreement;
-26-
(b) any guaranty or suretyship, contribution agreement or
performance bond;
(c) any contract to purchase or sell, lease or sublease real
property;
(d) any agreement with dealers or sales or commission agents
or representatives, public relations or advertising agencies, accountants or
attorneys (other than in connection with this Agreement and the transactions
contemplated hereby) involving the potential for total payments within any 12-
month period in excess of $50,000;
(e) any agreement for the acquisition or provision of
services, supplies, equipment, inventory, fixtures or other property, including
any construction contract, which individually has a cost to a Division of
$500,000 or more in any twelve-month period or which individually entitles a
Division to receive $500,000 or more in any twelve-month period;
(f) any contract containing any noncompetition covenant, or
containing any confidentiality or secrecy provision not made in the ordinary
course of business;
(g) any agreement providing for the purchase from a supplier
of all or substantially all of the requirements of a Division of a particular
product or service;
(h) any agreement relating to employment, consulting,
continuation of benefits, retention, severance or termination with any current
Employee or consultant to either Business;
(i) any collective bargaining agreement with any labor union
relating to current Employees;
(j) any license or royalty agreement requiring aggregate
annual payments of $50,000 or more; or
(k) any indenture, mortgage, loan or credit agreement under
which Seller or any subsidiary of Seller has pledged Assets or otherwise created
any Lien thereon (other than Permitted Liens).
Except as set forth in Section 5.1.12 of the PDM Disclosure Schedule, (i) each
Material Contract is a valid and binding obligation of Seller and, to the
knowledge of Seller, any other party thereto and is in full force and effect,
and (ii) Seller and, to the knowledge of Seller, any other party thereto each
has performed all material obligations required to be performed by them to date
under the Material Contracts. Neither Seller nor, to the knowledge of Seller,
any other party thereto is (with or without the lapse of time or the giving of
notice, or both) in breach or default in any material respect under any Material
Contract. Except as set forth in Section 5.1.12 of the
-27-
PDM Disclosure Schedule, true and complete copies of each Material Contract have
been made available by Seller to Purchaser for review.
5.1.13. Employee Relations. (a) Except for four existing collective
------------------
bargaining agreements (each, a "Collective Bargaining Agreement") with (i) the
-------------------------------
International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths,
Forgers and Helpers of America Union (the "Boilermakers Union"), Local 659 at
Warren, Pennsylvania, (ii) the Boilermakers Union, ▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇,
(▇▇▇) the Shopman's Local No. 493 of the Iron Workers Union at Clive, Iowa, and
(iv) the International Union of Operating Engineers Local No. 825 for work
performed in Camden, New Jersey, neither Seller nor any of its subsidiaries is a
party to any collective bargaining agreement or labor contract relating to the
Businesses. Neither Seller nor any of its subsidiaries has engaged in any unfair
labor practice with respect to any Persons employed by or otherwise performing
services primarily for Seller or any of its subsidiaries relating to the
Businesses. There is no grievance or unfair labor practice charge against Seller
or any of its subsidiaries before the National Labor Relations Board or any
comparable state agency pending or threatened in writing with respect to any
such Persons. There is no labor strike, dispute, slowdown, work stoppage, and,
to Seller's knowledge, there is not threatened nor has there been threatened,
any organizing effort or activity by any employees or labor unions at the
Divisions or relating to the Businesses, any petition for certification of a
collective bargaining representative regarding Employees of either Division,
pending or, to Seller's knowledge, threatened against or affecting Seller or any
of its subsidiaries which may interfere with the business activities of either
Business.
(b) There has not been, nor is there presently pending or
existing, and, to Seller's knowledge, there is not threatened nor has there been
threatened, any claims, lawsuits, charges, complaints, grievances,
investigations, audits, arbitrations, or disputes initiated or brought before
any federal or state judicial, administrative or governmental body, agency or
tribunal against or affecting Seller or any of its subsidiaries relating to the
Businesses regarding any actual or alleged violation of any and all laws,
regulations, ordinances, statutes or codes enacted by any federal or state
judicial, administrative or governmental body, agency or tribunal regarding or
pertaining to labor, employment, hiring, firing, equal employment opportunity,
discrimination, layoffs, cessation of employment, leaves of absence,
immigration, wages, hours, benefits, collective bargaining, labor relations, the
payment of social security and similar taxes, occupational safety and health,
plant closing, employment loss (as that term is used in the Worker Adjustment
and Retraining Notification Act), independent contracting, affirmative action,
or continuation or portability of insurance benefits, including but not limited
to, any charge or complaint filed by any Employee or union with the National
Labor Relations Board, the Equal Employment Opportunity Commission, the
Department of Labor, the Office of Federal Contract Compliance Programs, the
Immigration and Naturalization Service, the Occupational Safety and Health
Administration or any comparable state or local governmental body which would
have a Material Adverse Effect.
-28-
(c) Seller and its subsidiaries have, and at all previous
times when required have had, workers' compensation insurance covering all of
their employees, former employees and contractors.
5.1.14. Employee Benefit Plans. (a) Section 5.1.14 of the PDM
----------------------
Disclosure Schedule identifies each Plan. Each Plan complies in form and
operation in accordance with its terms and all applicable laws. Each Plan which
is intended to be tax-qualified has received a favorable determination letter
from the Internal Revenue Service, and no event has occurred which could result
in the loss of tax-qualified status of such Plan. Except as set forth in Section
5.1.14 of the PDM Disclosure Schedule, (i) Seller has not made any commitment or
taken any action to adopt or establish any additional employee benefit plans or
to materially increase the benefits under any of the Plans, and (ii) no action
has been taken to correct any defects with respect to any Plan under any IRS
correction procedure, and no such action is required. No Plan is under audit by
the IRS or the Department of Labor. No fiduciary of any Plan has any liability
for breach of fiduciary duty or any other failure to act or comply in connection
with the administration of or investment of the assets of any Plan.
(b) Neither Seller nor any other trade or business, whether
or no incorporated, which, together with Seller, is treated as a single employer
under section 414(b) or (c) of the Code (an "ERISA Related Person") has engaged
--------------------
in any transaction that would cause Purchaser or its Subsidiaries to be subject
to any liability under section 4069 of ERISA. Neither Seller nor any ERISA
Related Person has incurred any liability under Title IV of ERISA which could
reasonably be expected to become a liability of the Purchaser following the
Closing and no event has occurred with respect to any Plan which could
reasonably be expected to result in any such liability to the Purchaser. Seller
has not engaged in any non-exempt "prohibited transaction" in connection with
which Purchaser would be subject to any liability. There are no material pending
or, to Seller's knowledge, threatened claims by any Employee involving any Plan
(other than routine claims for benefits) or any other litigation involving any
Plan that could reasonably be expected to result in any such liability to the
Purchaser. No Plan that is subject to the minimum funding standards of ERISA or
the Code has incurred an accumulated funding deficiency, within the meaning of
section 412 of the Code or section 302 of ERISA, whether or not waived. All
contributions required to have been made by Seller to any Plan pursuant to Law
(including ERISA and the Code) or the terms of such Plan have been made within
the time prescribed by such Law or the terms of such Plan. Insofar as the
representation made in the previous sentence applies to sections 4064, 4069 or
4204 of Title IV of ERISA, it is made with respect to any employee benefit plan,
program, agreement or arrangement subject to Title IV of ERISA to which Seller
or any ERISA Related Person made, or was required to make, contributions during
the five-year period ending on the last day of the most recent plan year ended
prior to the Closing Date. All insurance premiums with respect to the Plans for
all periods prior to the Closing Date have been timely paid in full.
(c) No amounts payable under the Plans will fail to be
deductible for federal income tax purposes by virtue of section 280G of the
Code.
-29-
(d) Each material employee benefit plan that provides
welfare, retirement or deferred compensation benefits and each material bonus,
incentive compensation, deferred compensation, severance, change of control,
retention, stock option or other equity based, performance or other employee
benefit plan, program, agreement or policy that provides benefits or
compensation in respect of any non-U.S. Transferred Employee and that is
maintained by a Seller or a subsidiary of Seller or to which the Seller or a
subsidiary of Seller contributes or is a party (an "International Plan") has
------------------
been maintained by the Seller or such subsidiary in all material respects in
compliance with its terms and with the requirements prescribed by any and all
applicable Laws (including any special provisions relating to registered or
qualified plans where such International Plan was intended to so qualify) and
has been maintained in good standing with applicable Governmental Authorities.
(e) With respect to each Plan, Seller has heretofore
delivered or made available to Purchaser true and complete copies of each of the
following documents, to the extent applicable: (i) the Plan document, trust
agreement and any amendments thereto, (ii) the two most recent annual reports
and actuarial reports, (iii) the most recent Summary Plan Description, (iv) the
most recent determination letter received from the Internal Revenue Service, (v)
insurance contracts, (vi) investment management agreements and (vii) third party
administration agreements.
(f) Except as set forth in Section 5.1.14 of the PDM
Disclosure Schedule or as otherwise provided in this Agreement, the consummation
of the transactions contemplated by this Agreement will not, either alone or in
combination with another event, (i) entitle any Transferred Employee to any
payment or (ii) accelerate the time of payment or vesting, or increase the
amount of compensation due any Transferred Employee. The reserves covering
unused accrued vacation benefits for Transferred Employees set forth in the
Financial Statements have been determined in accordance with United States
generally accepted accounting principles consistently applied and such reserves
as reflected on the Audited Final Balance Sheet will be determined in accordance
with United States generally accepted accounting principles consistently
applied.
(g) Except as set forth in Section 5.1.14 of the PDM
Disclosure Schedule, no Plan, nor any plan of an ERISA Related Person, is a
"multiemployer pension plan" as defined in section 3(37) of ERISA, and no
withdrawal liability has been incurred by or asserted against the Seller or any
ERISA Related Person. No Plan is a plan described in section 4063(a) of ERISA.
Seller's contributions for the last three years to each multiemployer Plan
listed in Section 5.1.14 of the PDM Disclosure Schedule which covers an Employee
or former Employee are set forth in Section 5.1.14 of the PDM Disclosure
Schedule. The withdrawal liability that could be imposed on Seller if it
withdrew in a complete withdrawal from each such Plan on the Closing Date would
not exceed $100,000.00 in the aggregate.
5.1.15. Environmental Matters. To Seller's knowledge, except for
---------------------
actual or alleged violations of Environmental Laws or any actual or potential
business environmental
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risk, recognized environmental condition or any other environmental condition,
concern or risk identified in the Purchaser Environmental Site Assessments, the
Seller Environmental Site Assessments, the items described in Section 5.1.15 of
the PDM Disclosure Schedule and any other similar matters demonstrated by Seller
to be within the knowledge of Purchaser as of the Closing Date:
(a) The operations and activities of the Businesses conducted
by Seller or the Divisions, in either case, on or relating to the Owned Real
Property and the Leased Real Property are and have been in compliance in all
material respects with applicable Environmental Laws;
(b) Each of the Divisions, as to the Owned Real Property and
the Leased Real Property, possesses all material Environmental Permits required
pursuant to applicable Environmental Laws for the operations and activities of
its relevant Business and all such Environmental Permits, and each Division is
in compliance in all material respects with all terms and conditions of its
Environmental Permits;
(c) Neither of the Divisions nor Seller with respect to the
Divisions or the Businesses has received any written or oral notification
pursuant to any Environmental Law that the Divisions or Seller with respect to
the Divisions or the Businesses at any Owned Real Property or Leased Real
Property, any sites or facilities to which Seller has transported or arranged
for the transportation of Hazardous Substances generated by or concerning the
Divisions or Seller with respect to the Divisions or the Businesses at any Owned
Real Property or Leased Real Property is the subject of any proceeding or
investigation as to whether, or any claim or lawsuit by any Governmental
Authority or other Person asserting that, (i) any Remedial Action is or may be
required pursuant to any applicable Environmental Law; (ii) the Divisions or
Seller with respect to the Divisions or the Businesses is, or may be, a
"potentially responsible party" for a Remedial Action pursuant to any
Environmental Law; or (iii) the Divisions or Seller with respect to the
Divisions or the Businesses is in alleged or actual violation of any other
Environmental Law;
(d) Neither Seller, with respect to the Divisions or in
connection with the Businesses, nor the Divisions have entered into any
agreement with any Governmental Authority or any other Person by which it has
assumed responsibility, either directly or as a guarantor or surety, for the
remediation of any condition arising from or relating to a Release or threatened
Release of a Hazardous Substance at or from any Owned Real Property or Leased
Real Property;
(e) No Hazardous Substances have been used, stored,
manufactured or processed by the Divisions on any Owned Real Property or Leased
Real Property, except as necessary to the conduct of the Businesses and in
compliance in all material respects with all applicable Environmental Laws;
-31-
(f) There has been no disposal or Release of Hazardous
Substances caused by Seller or the Divisions or, to Seller's knowledge, by any
other Person in material violation of applicable Environmental Laws on or from
the Owned Real Property or the Leased Real Property, or caused by the Divisions
in connection with the Businesses; and
(g) Seller has provided Purchaser copies of or access to all
environmental reports, assessments, audits or investigations performed by or on
behalf of the Divisions concerning the Owned Real Property, the Leased Real
Property.
For purposes of this Section 5.1.15, "material" compliance or
--------------
"in all material respects" means that any Losses from non-compliance that would
not exceed $50,000 individually or in the aggregate.
5.1.16. Tax Matters. (a) Except (i) as set forth in Section 5.1.16 of
-----------
the PDM Disclosure Schedule or (ii) with respect to Taxes which are reflected in
the Audited Final Balance Sheet as a recorded liability or obligation or as an
accrual or reserve in respect of any liability or obligation, which such
accruals and reserves are adequate, all Tax returns and reports required to be
filed on or prior to the Closing have been or will be filed on or prior to the
Closing Date by or on behalf of Seller. Such returns and reports as filed are or
will be correct and complete in all material respects; and all Taxes due and
payable as shown in such returns and reports or otherwise required to be paid
have been or will be paid.
(b) Except as set forth in Section 5.1.16 of the PDM
Disclosure Schedule, no Tax deficiency, assessment, penalty or claim is proposed
in writing or assessed against Seller with respect to the Businesses or Assets.
Section 5.1.16 of the PDM Disclosure Schedule identifies those Tax returns of
Seller with respect to the Businesses or the Assets which have been audited
since 1996 and, where applicable, accepted by the relevant taxing authorities
for the fiscal years indicated in such Schedule, and, except as indicated
therein, there is no ongoing audit, litigation, or similar proceeding concerning
any Tax returns of Seller with respect to the Businesses or the Assets nor does
there exist any extension of time with respect to the date on which any such Tax
return was or is due to be filed or any waiver or agreement for the extension of
time for the assessment of any such Tax with respect to the Businesses or the
Assets.
(c) None of the Assets is property required to be treated as
being owned by any other person or entity pursuant to the so-called safe harbor
provisions of former section 168(f)(8) of the Code, nor are the Assets tax-
exempt use property under section 168(h) of the Code.
(d) Except as set forth in Section 5.1.16 of the PDM
Disclosure Schedule, any joint venture constituting part of the Assets is
treated as a corporation (and not as a partnership or other passthrough entity)
for U.S. federal income tax purposes. Section 5.1.16 of the PDM Disclosure
Schedule contains a complete list of all permanent establishments and all trades
or businesses in any foreign country, as such terms are defined in the Code.
-32-
(e) None of the Assets secures any debt the interest on which
is tax-exempt under section 103 of the Code. None of the Assets or Businesses is
subject to or affected by an agreement or arrangement for the sharing of Tax
liabilities or benefits.
(f) Neither the Code nor any other provision of Law requires
the Purchaser to withhold any portion of the Purchase Price.
5.1.17. Undisclosed Liabilities. Seller has no liability or
-----------------------
obligation relating to the Divisions or the Businesses of any nature, whether
primary or secondary, direct or indirect, or absolute, accrued, contingent or
otherwise, except for (a) liabilities or obligations reflected or reserved
against in the Base Balance Sheet, (b) liabilities or obligations which have
arisen after the Balance Sheet Date in the ordinary course of business, (c)
Excluded Liabilities, (d) liabilities disclosed in the PDM Disclosure Schedule,
(e) liabilities or obligations resulting from, arising out of or in the nature
of Contracts, and (f) liabilities or obligations resulting from or arising out
of the Plans, including the International Plans.
5.1.18. Product Warranty. All warranty reserves will be reflected on
----------------
the Audited Final Balance Sheet in accordance with United States generally
accepted accounting principles consistently applied.
5.1.19. Inventories. None of the Inventories reflected on the Base
-----------
Balance Sheet and to be reflected on the Audited Final Balance Sheet will be
obsolete, damaged or defective, except to the extent of the aggregate reserve
for obsolete, damaged or defective Inventories to be reflected on the Audited
Final Balance Sheet.
5.1.20. Accounts Receivable. All of the accounts and notes receivable
-------------------
of Seller reflected on the Base Balance Sheet and to be reflected on the Audited
Final Balance Sheet are or will be valid receivables and will be collected in
the ordinary course, in each case net of allowance for doubtful accounts and
reserves reflected on the Base Balance Sheet or to be reflected on the Audited
Final Balance Sheet, as the case may be.
5.1.21. Real Properties and Leases. (a) Sections 2.1.1 and 2.1.4 of
--------------------------
the PDM Disclosure Schedule list and describe all real property and leasehold
interests in real property that will constitute part of the Assets and, for each
of such properties, the address and use of such property in the Businesses.
(b) Except for Permitted Liens, Seller or a subsidiary of
Seller owns in fee, and has good, valid and indefeasible title to, free and
clear of all Liens, the Owned Real Property.
(c) No parcel of Owned Real Property or Leased Real Property
is subject to any governmental decree or order to be sold, nor is being
condemned, expropriated or otherwise taken by any public authority with or
without payment of compensation therefor,
-33-
nor, to the Seller's knowledge, has any such condemnation, expropriation or
taking been proposed.
(d) Seller has provided Purchaser with true, correct and
complete copies of all written leases under which Seller or a subsidiary of
Seller is leasing each of the Leased Real Properties listed in Section 2.1.4 of
the PDM Disclosure Schedule and (i) each of those leases is valid and binding on
Seller, and to Seller's knowledge, on the lessor party thereto, (ii) neither
Seller nor any subsidiary of Seller has sublet any of the leased premises to any
Person except as set forth in Section 5.1.21 of the PDM Disclosure Schedule, and
(iii) there exists no material default under any such lease by Seller, or to
Seller's knowledge, by any lessor party thereto, nor any event which, with
notice or lapse of time or both, would constitute a material default thereunder
by Seller, or to Seller's knowledge, by any lessor party thereto.
(e) None of the Owned Real Property is in material violation
of any zoning ordinances or law. Seller has not received any notice of any
violation of any use or occupancy restriction, limitation, commission or
covenant of record, or any material building law, code or ordinance or public
utility or other easements, and Seller has not received any notices of a
violation of any of the foregoing with respect to the Leased Real Property.
(f) Except as set forth in Section 5.1.21 of the PDM
Disclosure Schedule, no third party consents (from fee or leasehold mortgagees
or landlords) are required to transfer the Owned Real Property or the Leased
Real Property to Purchaser.
5.1.22. Insurance. Section 5.1.22 of the PDM Disclosure Schedule sets
---------
forth a list of all insurance policies which provide coverage for any liability,
loss or damage to the extent relating to the Assets or the Businesses. Seller
has previously provided Purchaser with (a) a complete list of all insurance loss
runs and workers' compensation claims relating to the Businesses for the most
recently ended two policy years and (b) accurate summaries of all current
insurance policies carried by Seller or any of its Affiliates to the extent
relating to the Assets or the Businesses, all of which (i) have been issued by
insurers of recognized responsibility and (ii) currently are, and will remain
without interruption through the Closing Date, in full force and effect.
5.1.23. Related Party Transactions. No Related Party (a) has borrowed
--------------------------
any monies from or has outstanding any Indebtedness or other similar obligations
to Seller or any subsidiary of Seller relating to the Businesses; (b) to
Seller's knowledge, owns any direct or indirect interest of any kind in, or is a
director, officer, employee, partner, affiliate or associate of, or a consultant
or lender to or borrower from, or has the right to participate in the
management, operations or profits of, any Person or entity which is (i) a
competitor, supplier, customer, distributor, lessor, tenant, creditor or debtor
of Seller or any subsidiary of Seller relating to the Businesses, (ii) engaged
in a business related to the Businesses, or (iii) participating in any
transaction to which Seller or any subsidiary of Seller is a party relating to
-34-
the Businesses; or (c) is otherwise a party to any contract, arrangement or
understanding with Seller or any subsidiary of Seller relating to the
Businesses.
5.1.24. Investment Representations. (a) Seller understands that the
--------------------------
offer, sale and transfer of the CB&I Shares to be issued to Seller hereunder (i)
have not been registered with the SEC or pursuant to any state securities laws
in reliance on the exemption afforded by Section 4(2) of the Securities Act and
comparable exemptions from applicable state laws, and (ii) that such Shares will
be restricted securities under the Securities Act and various states' securities
laws, and that these laws impose limitations on the Persons to whom sales of
shares may be made. The certificates representing the CB&I Shares to be
delivered to Seller as part of the Purchase Price will bear a legend
substantially as follows:
"THE ISSUANCE OF THE SHARES REPRESENTED HEREBY HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR ANY STATE
SECURITIES LAWS. SUCH SHARES MAY NOT BE OFFERED, SOLD, TRANSFERRED (BY
MERGER OR OTHERWISE), ASSIGNED, DEVISED, EXCHANGED, GIFTED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS AND UNTIL REGISTERED
UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS SUCH
TRANSFER IS EXEMPT FROM REGISTRATION, AND CHICAGO BRIDGE & IRON
COMPANY N.V. (THE "COMPANY") SHALL HAVE BEEN FURNISHED WITH AN OPINION
OF COUNSEL, SATISFACTORY TO THE COMPANY, TO SUCH EFFECT.
THE SHARES EVIDENCED BY THIS CERTIFICATE (A) ARE SUBJECT TO THE
RESTRICTIONS ON TRANSFER AS SET FORTH IN THAT CERTAIN SHAREHOLDER
AGREEMENT DATED AS OF FEBRUARY 7, 2001 AMONG THE COMPANY, PITT-DES
MOINES, INC. AND WEDGE GROUP INCORPORATED (THE "SHAREHOLDER
AGREEMENT") AND (B) ARE DESIGNATED AS ["LC SHARES"] ["PUT SHARES"]
["EXCESS SHARES"] UNDER THE TERMS OF THE SHAREHOLDER AGREEMENT. NO
TRANSFER OF THESE SHARES WILL BE EFFECTIVE UNLESS AND UNTIL THE TERMS
AND CONDITIONS OF SUCH SHAREHOLDER AGREEMENT HAVE BEEN COMPLIED WITH
IN FULL AND NO PERSON MAY REQUEST THE COMPANY TO RECORD THE TRANSFER
OF ANY SHARES IF SUCH TRANSFER IS IN VIOLATION OF SUCH SHAREHOLDER
AGREEMENT. A COPY OF THE SHAREHOLDER AGREEMENT IS ON FILE AT THE
ADMINISTRATIVE OFFICES OF THE COMPANY IN PLAINFIELD, ILLINOIS AND WILL
BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF SUCH SHARES UPON WRITTEN
REQUEST. THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON VOTING PROVIDED FOR IN THE
-35-
SHAREHOLDER AGREEMENT AND NO VOTE OF SUCH SHARES THAT CONTRAVENES THE
SHAREHOLDER AGREEMENT SHALL BE EFFECTIVE.
(b) Seller represents that it (i) is an "accredited investor"
(as defined in Rule 501(a)(3) under the Securities Act, (ii) has such knowledge,
sophistication and experience in financial and business matters as to be capable
of evaluating the merits and risks of its investment in the CB&I Shares, and
(iii) is able to bear the economic risk of its investment in the CB&I Shares.
Seller is acquiring the CB&I Shares for its own account for investment and
(subject to the disposition of its property being at all times within its
control) not with a present view to, or for sale or other disposition in
connection with, any distribution of all or any part of the CB&I Shares. Seller
acknowledges that (x) neither CB&I nor any Person representing CB&I has made any
representation to Seller with respect to CB&I or the CB&I Shares other than as
contained in this Agreement and (y) Seller has had access to such financial and
other information concerning CB&I and the CB&I Shares as Seller has deemed
necessary in connection with its investment decision to purchase the CB&I Shares
constituting part of the Purchase Price, including an opportunity to ask
questions of and request information from CB&I.
5.1.25. Limitations on Representations and Warranties. EXCEPT
---------------------------------------------
AS AND TO THE EXTENT EXPRESSLY SET FORTH IN THIS SECTION 5.1 OR INCLUDED ON ANY
SCHEDULE HERETO EXPRESSLY PURSUANT TO THIS AGREEMENT, SELLER MAKES NO OTHER
REPRESENTATIONS OR WARRANTIES (INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE ASSETS), AND DISCLAIMS
LIABILITY AND RESPONSIBILITY FOR ANY REPRESENTATION, WARRANTY, STATEMENT OR
INFORMATION MADE OR COMMUNICATED (ORALLY OR IN WRITING) TO PURCHASER OR ANY OF
ITS REPRESENTATIVES (INCLUDING ANY OPINION, INFORMATION, PROJECTION OR ADVICE
THAT MAY HAVE BEEN PROVIDED TO PURCHASER BY ANY REPRESENTATIVE OF SELLER OR ANY
AFFILIATE THEREOF).
5.2. Representations and Warranties of Purchaser. Purchaser
-------------------------------------------
represents and warrants to Seller as follows:
5.2.1. Organization; Power. (a) CB&I is an N.V. company duly
-------------------
organized and validly existing under the laws of the Netherlands. CB&I Sub is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Texas. Each of CB&I and CB&I Sub has all requisite corporate
power and authority under the laws of its jurisdiction of organization and its
charter documents to own or lease and to operate its properties presently and
following the Closing Date and to carry on its business as now conducted and as
proposed to be conducted following the Closing Date. CB&I Sub is a wholly-owned
subsidiary of CB&I.
-36-
(b) A true and complete list of each material CB&I
subsidiary, together with its jurisdiction of organization and the percentage of
its outstanding capital stock owned by CB&I and any other CB&I subsidiary, is
set forth in Section 5.2.1 of the CB&I Disclosure Schedule. Except as disclosed
in Section 5.2.1 of the CB&I Disclosure Schedule, CB&I does not directly or
indirectly own any equity or similar interest in, or any interest convertible
into or exchangeable or exercisable for, any equity or similar interest in, any
entity which is material to CB&I. Except as set forth in the SEC Documents or
Section 5.2.1 of the CB&I Disclosure Schedule, neither CB&I nor any of its
subsidiaries is subject to any obligation to make any material investment in any
other Person.
5.2.2. Authorization; No Conflicts; Required Consents. (a) Each
----------------------------------------------
of CB&I and CB&I Sub has full corporate authority to enter into this Agreement
and the Related Agreements and to perform its obligations hereunder and
thereunder. The execution and delivery of this Agreement and the Related
Agreements and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary action on the part of CB&I and CB&I Sub,
and this Agreement has been duly executed and delivered by CB&I and CB&I Sub.
This Agreement constitutes, and the Related Agreements when executed and
delivered will constitute, the legal, valid and binding obligation of CB&I and
CB&I Sub, as applicable, enforceable against each in accordance with its terms,
except that enforceability may be (i) limited by any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and (ii) subject to general principles of equity
(regardless of whether that enforceability is considered in a proceeding in
equity or at law).
(b) The execution, delivery and performance in accordance
with their respective terms by CB&I and CB&I Sub of this Agreement and the
Related Agreements to which each is a party have not and will not (i) violate,
breach or constitute a default under (A) either of their charter documents, (B)
any Law, order, writ, injunction or decree applicable to them, or (C) any note,
bond, mortgage, indenture or material agreement or obligation to which either is
a party or by which either is bound, except for such violations, breaches,
terminations, and defaults that are set forth in Section 5.2.2 of the CB&I
Disclosure Schedule, (ii) result in the acceleration or mandatory prepayment of
any Indebtedness of CB&I or CB&I Sub, or afford any holder of any of that
Indebtedness the right to require CB&I or CB&I Sub to redeem, purchase or
otherwise acquire, reacquire or repay any of that Indebtedness, (iii) cause or
result in the imposition of, or afford any Person the right to obtain, any Lien
upon any property or assets of CB&I or CB&I Sub, except for certain covenants of
Purchaser contained in its primary bank credit facility, or (iv) result in the
revocation, cancellation, suspension or material modification, in any single
case or in the aggregate, of any material Permits possessed by CB&I or CB&I Sub
at the date hereof and necessary for the ownership or lease and the operation of
its properties or the carrying on of its business as now conducted.
(c) Except (i) as may be required by the HSR Act, Foreign
Monopoly Laws or applicable state securities or blue sky laws or (ii) as set
forth in Section 5.2.2
-37-
of the CB&I Disclosure Schedule, no material consent, approval, order or
authorization of, or registration, declaration or filing with, any Governmental
Authority is required to be obtained or made by CB&I or CB&I Sub for the
execution, delivery or performance by CB&I and CB&I Sub of this Agreement or the
Related Agreements to which it is a party, the enforcement against CB&I or CB&I
Sub of its obligations hereunder or thereunder or the effectuation of the
transactions contemplated hereby and thereby.
5.2.3. Charter Documents. No breach or violation of any charter
-----------------
document of CB&I or CB&I Sub has occurred and is continuing that could
reasonably be expected to have a Material Adverse Effect on CB&I.
5.2.4. SEC Documents. Purchaser has made available to Seller a
-------------
true and complete copy of each report, schedule, registration statement and
definitive proxy statement filed by CB&I with the SEC since January 1, 1998 and
prior to the date of this Agreement (the "SEC Documents") which are all the
-------------
documents (other than preliminary material) that CB&I has been required to file
with the SEC since such date. As of their respective dates, the SEC Documents
complied in all material respects with the requirements of the Securities Act or
the Exchange Act, as the case may be, and the rules and regulations of the SEC
thereunder applicable to such SEC Documents, and none of the SEC Documents
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. The
financial statements of CB&I contained in the SEC Documents complied as to form
in all material respects with the published rules and regulations of the SEC
with respect thereto, were prepared in accordance with United States generally
accepted accounting principles applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto or, in the case of the
unaudited statements, as permitted by Rule 10-01 of Regulation S-X of the SEC)
and fairly present in accordance with applicable requirements of United States
generally accepted accounting principles (subject, in the case of the unaudited
statements, to normal, recurring adjustments, none of which will be material)
the consolidated financial position of CB&I and its consolidated subsidiaries as
of their respective dates and the consolidated results of operations and the
consolidated cash flows of CB&I and its consolidated subsidiaries for the
periods presented therein, respectively.
5.2.5. Capitalization. The capitalization of CB&I is set forth in
--------------
Section 5.2.5 of the CB&I Disclosure Schedule. As of the Closing Date, all of
the CB&I Shares will be duly authorized for issuance and will be validly issued,
fully paid and nonassessable. Except as set forth in Section 5.2.5 of the CB&I
Disclosure Schedule, there are no outstanding subscriptions, options, warrants,
calls or rights of any kind to acquire any shares of any class of securities or
any securities convertible into any shares of any class of securities of CB&I,
nor are there any obligations to issue any such options, warrants, calls, rights
or securities. There are no restrictions of any kind on the transfer by CB&I to
Seller of the CB&I Shares, except as may be imposed by applicable securities
laws.
-38-
5.2.6. Absence of Applicable Rights Agreements. Except as set
---------------------------------------
forth in CB&I's proxy statement dated November 24, 2000 or in Section 5.2.6 of
the CB&I Disclosure Schedule, there are no rights agreements or other agreements
by or between CB&I and any of its shareholders that could ultimately result in
the grant of additional shares of CB&I capital stock, additional rights to
purchase any such CB&I capital stock, any new class or type of security of CB&I
or other rights or benefits to CB&I's shareholders as of the date hereof which
would apply to the execution and delivery of this Agreement, the Related
Agreements, the issuance to Seller of the CB&I Shares or any other transaction
contemplated hereby or thereby. Further, no such grant of additional shares of
CB&I capital stock, additional rights to purchase any such CB&I capital stock,
any new class or type of security of CB&I or other rights or benefits to CB&I's
shareholders as of the date hereof will result by operation of (i) the Law of
the Netherlands, (ii) any provision of CB&I's Articles of Association or (iii)
any combination thereof.
5.2.7. Litigation. Except as set forth in the SEC Documents or in
----------
Section 5.2.7 of the CB&I Disclosure Schedule, no claim, action, suit,
proceeding, arbitration or investigation is pending or, to the knowledge of
Purchaser, threatened to which CB&I or any of its subsidiaries is or may become
a party that (a) questions or involves the validity or enforceability of any
obligation of CB&I or CB&I Sub under this Agreement or any Related Agreement,
(b) seeks (or reasonably may be expected to seek) (i) to prevent or delay
consummation by CB&I or CB&I Sub of the transactions contemplated by this
Agreement to be consummated by CB&I or CB&I Sub or (ii) damages from CB&I or
CB&I Sub in connection with any such consummation, or (c) which would have, or
would reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on CB&I. No Governmental Authority has provided
notification to CB&I or any of its subsidiaries of an intention to conduct any
audit, investigation or other review with respect to CB&I or any of its
subsidiaries, which audit, investigation or review would, if adversely
determined, individually or in the aggregate, have a Material Adverse Effect on
CB&I.
5.2.8. Compliance with Environmental Laws. Except as disclosed in
----------------------------------
the SEC Documents or in Section 5.2.8 of the CB&I Disclosure Schedule, CB&I and
its subsidiaries are in compliance in all material respects with all applicable
Environmental Laws, except for any such noncompliance which would not have a
Material Adverse Effect on CB&I.
5.2.9. Liabilities and Obligations. There are no material
---------------------------
liabilities of any kind, character and description and whether accrued,
absolute, or fixed, of CB&I that (a) reasonably could be expected to have a
Material Adverse Effect on CB&I other than as set forth in Section 5.2.9 of the
CB&I Disclosure Schedule or as disclosed in the SEC Documents, and (b) (i) had
been incurred prior to the most recent SEC Document but are not reflected on
that SEC Document or (ii) were incurred after the most recent SEC Document
otherwise than in the ordinary course of business and consistent with past
practice.
5.2.10. Intellectual Property. To the knowledge of Purchaser,
---------------------
except as set forth in Section 5.2.10 of the CB&I Disclosure Schedule, CB&I or
its subsidiaries owns, free and
-39-
clear of all Liens other than Permitted Liens, or has the legal right to use,
all intellectual property that is necessary to the conduct of their business as
now conducted, in each case free of any claims or infringements. Section 5.2.10
of the CB&I Disclosure Schedule (a) lists the material intellectual property of
CB&I and its subsidiaries and (b) indicates that intellectual property owned by
CB&I or its subsidiaries and, for those not listed as so owned, the agreement or
other arrangement pursuant to which they are possessed. Except as set forth in
Section 5.2.10 of the CB&I Disclosure Schedule, to the knowledge of Purchaser,
(a) no consent of any Person will be required for the use of any such material
intellectual property by CB&I or any subsidiary of CB&I following the Closing
Date and (b) no governmental registration of any such material intellectual
property has lapsed or expired or been canceled, abandoned, opposed or has been
the subject of any reexamination request.
5.2.11. Material Contracts. Section 5.2.11 of the CB&I Disclosure
------------------
Schedule sets forth a complete list of all Material Contracts (as defined below)
not listed on the Exhibit Index to CB&I's Form 10-K Annual Report for the fiscal
year ended December 31, 1999, previously made available to Seller. Each such
Material Contract is in full force and effect and is enforceable against the
parties thereto other than CB&I and its subsidiaries in accordance with its
terms, and no condition or state of facts exists that, with notice or the
passage of time or both, would constitute a material default by CB&I or its
applicable subsidiary or, to the knowledge of Purchaser, any third party under
any such Material Contract. CB&I or its applicable subsidiary has duly complied
in all material respects with the provisions of each such Material Contract to
which it is a party. For the purpose of this Agreement, a Material Contract
with respect to CB&I or its subsidiaries shall mean:
(i) those material agreements required to be filed by CB&I
pursuant to applicable SEC rules and regulations;
(ii) any instrument, agreement or other obligation
evidencing or relating to Indebtedness of CB&I or any of its subsidiaries or to
money lent or to be lent to another Person involving more than $1,000,000; and
(iii) any agreement for the acquisition or provision of
services, supplies, equipment, inventory, fixtures or other property involving
more than $500,000 individually the costs for which are not passed through to
the customers of CB&I or its subsidiaries in the ordinary course of business,
and all earnout agreements.
5.2.12. Insurance. Section 5.2.12 of the CB&I Disclosure Schedule
---------
sets forth a list of all insurance policies currently in force carried by CB&I
or its subsidiaries which relate to their businesses. All such insurance
policies (i) have been issued by insurers of recognized responsibility and (ii)
currently are, and will remain without interruption through the Closing Date, in
full force and effect. CB&I has previously made available to Seller a complete
list of all insurance loss runs and workers' compensation claims relating to
CB&I's business and received for the most recently ended two (2) policy years.
-40-
5.2.13. Employee Matters. (a) Employment Agreements. Section
----------------
5.2.13(a) of the CB&I Disclosure Schedule contains a list of all of the
following: (i) employment agreements and (ii) plans, programs, agreements and
other arrangements with or relating to employees containing change of control or
similar provisions not otherwise listed in the SEC Documents remaining executory
in whole or in part on the date hereof, and CB&I has made available to Seller
true, complete and correct copies of all those employment agreements and such
plans, programs, agreements and other arrangements. CB&I is not party to any
oral employment agreement.
(b) Employee Benefit Plans. For purposes of this Section
-------
5.2.13 and Section 5.2.14, all references to "CB&I" shall be deemed to refer to
------ --------------
CB&I and its subsidiaries and any trade or business, whether or not
incorporated, that together with CB&I and its subsidiaries would be deemed or
treated as a "single employer" within the meaning of ERISA Section 4001 or Code
Section 414.
(i) Each Plan is listed in Section 5.2.13(b) of the
CB&I Disclosure Schedule. Except as discussed in Section 5.2.13(b) of the CB&I
Disclosure Schedule, no Plan is or has been (w) covered by Title IV of ERISA,
(x) subject to the minimum funding requirements of Section 412 of the Code, (y)
a "multi-employer plan" as defined in Section 3(37) of ERISA or (z) a voluntary
employees' beneficiary association within the meaning of Code Section 501(c)(9).
(ii) Except as described in Section 5.2.13(b) of the
CB&I Disclosure Schedule, (x) CB&I has no obligation to make any payments that
would be "excess parachute payments" under Section 280G of the Code; and (y) no
Plan provides for the continuation of medical or health benefits or death
benefits after an employee's termination of employment (including retirement)
other than (A) coverage mandated by applicable law, (B) deferred compensation
benefits reflected as liabilities on the books of CB&I or (C) benefits the full
cost of which is borne by the current or former employee or his beneficiary.
5.2.14. Compliance With ERISA, Labor Laws. (a) Each Plan complies
---------------------------------
in form and operation in all material respects with its governing documents and
ERISA, the Code and all other applicable Laws except where such noncompliance
would not have a Material Adverse Effect on CB&I. CB&I has no commitment or
obligation to establish or adopt any new or additional Plans or to materially
increase the benefits under any existing Plan.
(b) To the knowledge of Purchaser, with respect to the
Plans, no event has occurred and there exists no condition or set of
circumstances in connection with which CB&I could be subject to any liability
(except for contributions and Plan expenses) under the terms of such Plans,
ERISA, the Code or any other applicable Law except where such failure would not
have a Material Adverse Effect on CB&I. All Plans that are intended to be
qualified under Section 401(a) of the Code have been determined by the IRS to be
so qualified, and
-41-
nothing has occurred to the knowledge of Purchaser since the date of
determination which could cause any such Plan to be disqualified.
(c) Except as set forth in Section 5.2.14 of the CB&I
Disclosure Schedule, neither CB&I nor any of its subsidiaries is a party to any
material collective bargaining agreement or labor contract. Except as set forth
in Section 5.2.14 of the CB&I Disclosure Schedule, to the knowledge of
Purchaser, neither CB&I nor any of its subsidiaries has engaged in any unfair
labor practice with respect to any Persons employed by or otherwise performing
services primarily for CB&I or any of its subsidiaries. Except as set forth in
Section 5.2.14 of the CB&I Disclosure Schedule, there is no grievance or unfair
labor practice charge against CB&I or any of its subsidiaries before the
National Labor Relations Board or any comparable state agency pending or
threatened in writing with respect to any such Persons. There is no labor
strike, dispute (to the knowledge of Purchaser), slowdown, work stoppage, and,
to the knowledge of Purchaser, there is not threatened nor has there been
threatened, any organizing effort or activity by any employees or labor unions
at or relating to CB&I or any of its subsidiaries, any petition for
certification of a collective bargaining representative regarding employees of
CB&I or any of its subsidiaries, pending or, to the knowledge of Purchaser,
threatened against or affecting CB&I or any of its subsidiaries which would have
a Material Adverse Effect on CB&I.
5.2.15. Absence of Changes. Since the most recent SEC Document,
------------------
except as set forth in Section 5.2.15 of the CB&I Disclosure Schedule, none of
the following has occurred with respect to CB&I's business:
(a) any increase in, or any commitment or promise to
increase, other than ordinary and customary bonuses and salary increases for
employees at the times and in the amounts consistent with its past practice, (i)
the rates of cash compensation or (ii) except as would not have a Material
Adverse Effect on CB&I or as required by applicable Laws, any increase in the
amounts or other benefits paid or payable under any Plans;
(b) any work interruptions, labor grievances or claims
filed, or any similar event or condition of any character, that will have a
Material Adverse Effect on CB&I following the Closing Date;
(c) any distribution, sale or transfer of, or any
commitment to distribute, sell or transfer, assets of CB&I or any of its
subsidiaries of any kind that singly is, or in the aggregate are, material to
CB&I's business, other than distributions, sales or transfers in the ordinary
course of its business and consistent with its past practices;
(d) any cancellation, or agreement to cancel, any material
Indebtedness, obligation or other liability owing to CB&I or its subsidiaries,
including any material Indebtedness, obligation or other liability of any
Affiliate, provided that CB&I and its
-42-
subsidiaries may negotiate and adjust bills and invoices in the course of good-
faith disputes with customers in a manner consistent with past practice;
(e) any purchase or acquisition of, or agreement, plan or
arrangement to purchase or acquire, any property, rights or assets outside of
the ordinary course of operating CB&I's business consistent with its past
practices;
(f) any waiver of any of the rights or claims of CB&I or
any of its significant subsidiaries that singly is, or in the aggregate are,
material to CB&I's business;
(g) any transaction by CB&I or any of its significant
subsidiaries outside the ordinary course of operating CB&I's business or not
consistent with the past practices of its business;
(h) any incurrence by CB&I or any of its significant
subsidiaries of any of the following: any material Indebtedness or any material
guaranty not constituting Indebtedness, or any commitment to incur any such
Indebtedness or any such guaranty (except for a new primary bank revolving
credit facility in the maximum available amount of $200,000,000 and except for
CB&I guaranties of the performance of its subsidiaries and Affiliates in the
ordinary course of business); or
(i) any cancellation or termination of a material agreement
relating to CB&I's business (other than the termination of CB&I's prior primary
bank revolving credit facility in connection with the establishment of its new
primary bank credit facility referred to in clause (h) immediately above).
5.2.16. Broker's Fees. Except for certain fees payable by CB&I to
-------------
Bear ▇▇▇▇▇▇▇ & Co., Inc., CB&I and CB&I Sub have no liability or obligation to
pay any fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement or the Related Agreements.
5.2.17. Limitations on Representations and Warranties. EXCEPT AS
---------------------------------------------
AND TO THE EXTENT EXPRESSLY SET FORTH IN THIS SECTION 5.2 OR INCLUDED ON ANY
SCHEDULE HERETO EXPRESSLY PURSUANT TO THIS AGREEMENT, PURCHASER MAKES NO OTHER
REPRESENTATIONS OR WARRANTIES, AND DISCLAIMS LIABILITY AND RESPONSIBILITY FOR
ANY REPRESENTATION, WARRANTY, STATEMENT OR INFORMATION MADE OR COMMUNICATED
(ORALLY OR IN WRITING) TO SELLER OR ANY OF ITS REPRESENTATIVES (INCLUDING ANY
OPINION, INFORMATION, PROJECTION OR ADVICE THAT MAY HAVE BEEN PROVIDED TO SELLER
BY ANY REPRESENTATIVE OF PURCHASER OR ANY AFFILIATE THEREOF).
-43-
ARTICLE VI
THE CLOSING
-----------
6.1. The Closing. Subject to the provisions of Section 10.1, the
----------- ------------
closing (the "Closing") of the transactions contemplated hereby shall occur
-------
within two (2) business days after the conditions to Closing set forth in this
Article VI (other than receipt of closing documentation) have been satisfied or
----------
waived, or such other date and time as the parties may mutually agree (the
"Closing Date"). The Closing will be held at the offices of Winston & ▇▇▇▇▇▇,
-------------
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
6.2. Conditions Precedent to Obligations of Purchaser. The
------------------------------------------------
obligations of Purchaser under this Agreement are subject to the satisfaction of
the following conditions as of the Closing Date, any or all of which may be
waived by Purchaser in its sole discretion:
6.2.1. No Legal Obstruction. All required waiting periods
--------------------
under the HSR Act and Foreign Monopoly Laws shall have expired or been
terminated. There shall not have been entered a preliminary or permanent
injunction, temporary restraining order or other judicial or administrative
order or decree in any jurisdiction, the effect of which has not been dissolved
or set aside and which prohibits the Closing or imposes any conditions on the
consummation of the transactions contemplated hereby which could reasonably be
expected to have a Material Adverse Effect or which materially adversely affects
how the Businesses may be conducted by the Purchaser.
6.2.2. Transfer Documents. There shall have been delivered
------------------
to Purchaser or its Affiliates, as designated by Purchaser, the following duly
and validly executed conveyance documents relating to the Assets (the "Transfer
--------
Documents"), each dated as of the Closing Date:
---------
(a) bills of sale and general assignments;
(b) deeds relating to the Owned Real Property
(confirmed by the title company issuing the
title commitments to be in proper recordable
form to convey fee simple title therein to
Purchaser);
(c) powers of attorney to transfer motor vehicle
titles and assignments relating to motor
vehicles;
(d) assignments of Contracts (including leases)
and Environmental Permits (to the extent
assignable in the absence of consent by any
Governmental Authority);
(e) Transferred Intellectual Property
assignments; and
(f) any other instruments necessary to convey the
Assets described in Section 2.1.
-----------
6.2.3. Consents; Customer Notices. (a) Seller shall have
--------------------------
obtained all third party consents required to be obtained in order (i) to convey
to Purchaser fee simple in and
-44-
to the Owned Real Property and Seller's leasehold estate in and to the Leased
Real Property (as such consents are set forth on Schedule 6.2.3), and (ii) to
--------------
assign the other Contracts and agreements listed on Schedule 6.2.3.
--------------
(b) Seller shall have executed and delivered to
Purchaser the Customer Notices.
6.2.4. Related Agreements. Seller shall have executed
------------------
delivered to Purchaser the Shareholder Agreement, the Standby Funding
Agreement,the ▇▇▇▇▇▇ Lease, the Des Moines Lease, the Woodlands Sublease, the
License Agreement and the Post-Closing Risk Allocation Agreement.
6.2.5. EBITDA. Earnings before interest, taxes,
------
depreciation and amortization of the Divisions for the fiscal year ending
December 31, 2000, calculated in accordance with United States generally
accepted accounting principles consistent with the Financial Statements, shall
be not less than $12,000,000 (excluding the corporate allocation charge of
$2,102,400).
6.2.6. Lien Search and Title Commitments. (a) Purchaser
---------------------------------
shall have received UCC, tax lien and judgment search reports, reasonably
satisfactory to Purchaser and its counsel, of a reputable search company
indicating that there are no Liens (other than Permitted Liens and the Assumed
Liabilities) of record with respect to the Assets.
(b) There shall have been issued to Purchaser a
commitment for an Owner's Policy of Title Insurance on an ALTA standard form
with respect to each of the sites of Owned Real Property showing fee simple
title in Seller and subject to no Liens other than Permitted Liens.
6.2.7. Financing. CB&I shall have completed a private
---------
placement issuance of shares of its common stock to First Reserve Fund VIII,
L.P. and WEDGE Group Incorporated, the proceeds from which shall be sufficient
to fund the Cash Amount.
6.2.8. Bank Consent. Purchaser shall have obtained a
------------
consent or waiver to consummate the transactions contemplated hereby under its
primary bank credit facility.
6.2.9. Opinion of Counsel to the Seller. Purchaser shall
--------------------------------
consent or received the opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Professional Corporation,
dated the Closing Date, in form and content reasonably satisfactory to Purchaser
and its counsel.
6.2.10. Good Standing Certificates. Purchaser shall have
--------------------------
received a certificate dated within fifteen days prior to the Closing Date from
the appropriate governmental official in the relevant state certifying that each
of Seller and HyCon, Inc. is validly existing and in good standing under the
laws of (i) its state of organization and (ii) such other states (as
-45-
Purchaser may reasonably specify) where Seller or HyCon, Inc. conducts
substantial operations or holds significant assets.
6.2.11. FIRPTA Statement. Seller shall have delivered to
----------------
Purchaser a certification of non-foreign status as contemplated under Section
1.1445-2(b)(2) of the Treasury Regulations, certifying that Seller is not a
foreign person.
6.3. Conditions Precedent to Obligations of Seller. The
---------------------------------------------
obligations of Seller under this Agreement are subject to the satisfaction of
the following conditions as of the Closing Date, any or all of which may be
waived by Seller in its sole discretion:
6.3.1. No Legal Obstruction. All required waiting
--------------------
periods under the HSR Act and Foreign Monopoly Laws shall have expired or been
terminated. There shall not have been entered a preliminary or permanent
injunction, temporary restraining order or other judicial or administrative
order or decree in any jurisdiction, the effect of which has not been dissolved
or set aside and which prohibits the Closing or imposes any conditions on the
consummation of the transactions contemplated hereby which could reasonably be
expected to have a material adverse effect on Seller.
6.3.2. Purchase Price and Letter of Credit. Purchaser
-----------------------------------
shall have (i) paid the Cash Amount, and delivered the CB&I Shares, to Seller in
the manner specified in Section 3.1 and (ii) delivered the irrevocable standby
-----------
Letter of Credit referred to in the Shareholder Agreement.
6.3.3. Related Agreements. Purchaser (and Farinvest,
------------------
Ltd. and WEDGE Group Incorporated (as guarantor), in the case of the Standby
Funding Agreement) shall have executed and delivered to Seller the Shareholder
Agreement, the Standby Funding Agreement, the ▇▇▇▇▇▇ Lease, the Des Moines
Lease, the Woodlands Sublease, the License Agreement and the Post-Closing Risk
Allocation Agreement.
6.3.4. Assumption Agreement. There shall have been
--------------------
delivered to Seller an assumption agreement pursuant to which the Purchaser will
assume the Assumed Liabilities.
6.3.5. NYSE Listing. Purchaser shall have made
------------
application, and received approval, for listing of the CB&I Shares on a "when-
issued" basis on the New York Stock Exchange, Inc.
6.3.6. Opinion of Counsel to the Purchaser. Seller shall
-----------------------------------
have received the opinion of DeBrauw Blackstone Westbroek P.C. and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇, Esq., each dated the Closing Date, in form and content reasonably
satisfactory to Seller and its counsel.
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ARTICLE VII
COVENANTS
---------
7.1. Personnel Matters.
-----------------
7.1.1. Offer of Employment. On the Closing Date, Seller will
-------------------
terminate the employment of each Employee employed by the Divisions and actively
at work on that date. Purchaser will offer employment to each Employee of the
Divisions who, as of the Closing Date, is employed by the Divisions and actively
at work in connection with Seller's operation of the Businesses. Each such
offer of employment will be at the same base salary (or hourly compensation)
level as in effect immediately prior to the Closing Date. For purposes of this
Agreement, Employees who accept Purchaser's offer of employment shall be
referred to herein as "Transferred Employees" and all other Employees shall be
---------------------
referred to herein as "Excluded Employees". Subject to the provisions of
------------------
Section 4.1(e), Purchaser shall have no obligations whatsoever in respect of
--------------
Excluded Employees.
7.1.2. Limitation of Rights. Nothing herein shall be
--------------------
construed to prohibit or prevent Purchaser subsequent to the Closing Date from
(i) modifying the terms and conditions of compensation and benefits of any
Transferred Employee or (ii) terminating the employment of any Transferred
Employee. No Transferred Employee or Excluded Employee or any other Person not a
party to this Agreement will have any rights with respect to any obligation of
either party under this Agreement, and nothing contained herein, express or
implied, is intended to confer on any such Person any rights or remedies.
7.1.3. Collective Bargaining Agreements. At the Closing,
--------------------------------
Seller shall assign to Purchaser, and Purchaser shall assume, each Collective
Bargaining Agreement.
7.1.4. Pension Plans. (a) Seller's Salaried 401(k) Plan.
------------- -----------------------------
Seller shall take, or cause to be taken, all action required under the PDM
Savings and Investment 401(k) Plan ("Seller's Salaried 401(k) Plan") to (i) make
-----------------------------
all contributions required of it for each participating Employee for all periods
of time up to and including the Closing Date, (ii) fully vest each participating
Employee in the balance of his account as of the Closing Date, and (iii) make
distributions of accounts available to each such Employee upon termination of
employment with Seller.
(b) Seller's Nonunion Hourly 401(k) Plan Participants.
-------------------------------------------------
With respect to participating Employees who are not covered by a Collective
Bargaining Agreement, Seller shall take, or cause to be taken, all action
required under the CIGNA Retirement and 401(k) Investment Plan ("Seller's Hourly
---------------
401(k) Plan") to (i) make all contributions required of it for each such
-----------
participating Employee for all periods of time up to and including the Closing
Date, (ii) fully vest each such participating Employee in the balance of his
account as of the Closing Date and (iii) make distributions of accounts
available to each such Employee upon termination of employment with Seller.
-47-
(c) Seller's Union 401(k) Plan Participants. Seller
---------------------------------------
shall make all contributions required of it under Seller's Hourly 401(k) Plan
for each participating Employee who is covered by a Collective Bargaining
Agreement for all periods of time up to and including the Closing Date, and
shall direct the trust-to-trust transfer to Purchaser's Union 401(k) Plan
described in paragraph (i) of this section.
(d) Seller's ESOP. Seller shall take, or cause to be
-------------
taken, all action required under the PDM Employee Stock Ownership Plan (the
"Seller's ESOP") to (i) fully vest each participating Employee in the balance of
-------------
his account as of the Closing Date, and (ii) make distributions of accounts
available to each such Employee upon termination of employment with Seller.
(e) Seller's Salaried Pension Plan. Seller shall
------------------------------
take, or cause to be taken, all action required under the PDM Retirement Plan
For Salaried Employees to (i) fully vest each participating Employee in his
accrued benefit as of the Closing Date, (ii) offer any participating Employee
who meets the age and service requirements for a special early retirement
benefit the ability to elect such benefit if he is offered a lesser position or
a position requiring a relocation of more than 50 miles by Purchaser which he
declines, and (iii) treat those Transferred Employees who are eligible for a
normal retirement pension or early retirement pension at the Closing Date as
terminated for purposes of pension commencement.
(f) Seller's Nonunion Hourly Pension Plan. Seller
-------------------------------------
shall take, or cause to be taken, all action required under the PDM Pension Plan
for Certain Hourly Employees to (i) fully vest each participating Employee in
his accrued benefit as of the Closing Date, and (ii) treat those Transferred
Employees who are eligible for a normal retirement pension or early retirement
pension at the Closing Date as terminated for purposes of pension commencement.
(g) Purchaser's Pension Benefit Plans. Purchaser will
---------------------------------
offer to each Transferred Employee who is not covered by a Collective Bargaining
Agreement the same pension benefits offered to similarly situated employees of
the Purchaser. Purchaser will offer to each Transferred Employee who is covered
by a Collective Bargaining Agreement such pension benefits as are required by
such Collective Bargaining Agreement. Purchaser shall grant each Transferred
Employee credit for all service with Seller for all purposes under Purchaser's
pension benefit plans, except that there shall be no duplication of benefits for
the same period of service. Purchaser shall cause the Chicago Bridge & Iron
Savings Plan to accept rollovers of eligible rollover distributions in cash on
behalf of Transferred Employees from Seller's Salaried 401(k) Plan, Seller's
Hourly 401(k) Plan, and the Seller's ESOP.
(h) Purchaser's Union 401(k) Plan. Purchaser shall
-----------------------------
establish, effective as of the Closing Date, a 401(k) plan which shall cover
those Employees covered by the Collective Bargaining Agreements and have all the
terms, conditions and benefits required by the Collective Bargaining Agreements
("Purchaser's Union 401(k) Plan"). Purchaser's Union 401(k)
-----------------------------
-48-
Plan shall be intended to be tax-qualified, and Purchaser shall take reasonable
action to obtain a favorable determination letter from the Internal Revenue
Service with respect to such plan. Purchaser's Union 401(k) Plan shall grant
credit for all service with Seller counted under Seller's Union 401(k) Plan for
purposes of eligibility and vesting.
(i) Transfer From Seller's Hourly 401(k) Plan to
--------------------------------------------
Purchaser's Union 401(k) Plan. As soon as practicable after the Closing Date,
-----------------------------
Seller shall cause the account balances of all participating Transferred
Employees who are covered by a Collective Bargaining Agreement to be transferred
in a trust-to-trust transfer from Seller's Hourly 401(k) Plan to Purchaser's
Union 401(k) Plan. Each party agrees to cooperate with the other in order to
accomplish such transfer.
(j) Purchaser's Assumption of Seller's Union Pension Plans.
------------------------------------------------------
Purchaser shall establish, effective as of the Closing Date, one or more trust
agreements intended to qualify under Section 501(a) of the Code or one or more
group annuity contracts ("Purchaser's Trust"). As soon as practical after the
-----------------
Closing Date, but no later than 60 days thereafter, an actuary chosen by Seller
and approved by Purchaser shall compute the benefit liabilities, as defined in
Section 4001(a)(16) of ERISA, of the following plans (referred to individually
as a "Union Pension Plan"), using the actuarial methods and assumptions required
------------------
by the Pension Benefit Guaranty Corporation upon termination of trusted plans
under Section 4044 of ERISA and the regulations thereunder and, to the extent
not specified therein, as set forth in the most recent actuarial valuation:
(i) PDM Pension Plan for ▇▇▇▇▇▇ Shop Employees (the
"▇▇▇▇▇▇ Plan");
-----------
(ii) PDM Pension Plan for Des Moines and Clive Shop
Employees (the "Clive Plan"); and
----------
(iii) PDM Pension Plan for Provo Shop Employees (the
"Provo Plan.")
------------
The benefit liabilities so computed for the Clive Plan shall show separately
such obligations for Des Moines and Clive participants. The actuary shall
provide Seller and Purchaser with a copy of the reports containing such
computations. Seller and Purchaser shall have 15 business days thereafter to
review the reports for accuracy and to submit any objections or corrections. If
Seller and Purchaser are unable to reach an agreement, ▇▇▇▇▇▇ Associates, or
another independent national actuarial firm mutually agreed upon by Seller and
Purchaser, shall be retained to resolve any disputes in the reports, and the
resolution reached by such firm shall be final and binding on Seller and
Purchaser. The costs of retaining such firm shall be borne equally by Seller
and Purchaser. Upon acceptance, the benefit liabilities set forth in such
reports shall be deemed final (referred to individually as the "Final Closing
-------------
Date Benefit Liabilities"). As soon as practical after the Closing Date, but no
------------------------
later than the date the reports containing the
-49-
computations of benefit liabilities for the Union Pension Plans are provided to
Purchaser, Seller shall cause the assets of each Union Pension Plan to be
invested in a short-term investment fund ("STIF Fund"), and furnish Purchaser
---------
with a report for each Union Pension Plan showing the value of assets invested
in such STIF Funds. If the Final Closing Date Benefit Liabilities of any Union
Pension Plan exceeds the value of assets of such plan invested in such STIF
Funds, Seller shall contribute such excess in cash to such plan within ten
business days following the date of determination of such Final Closing Date
Benefit Liabilities. As soon as practical after such contributions and all
required government filings have been made, Seller shall transfer to Purchaser,
and Purchaser shall assume from Seller, the ▇▇▇▇▇▇ Plan, the Provo Plan, and the
portion of the Clive Plan covering Clive participants, and all assets (in cash
or property acceptable to the trustee of Purchaser's Trust) with respect to each
such plan or portion thereof shall be transferred to Purchaser's Trust. Seller
agrees that during the period from the Closing Date to the date of such
transfers, Seller shall continue to administer each Union Pension Plan in
accordance with its terms and applicable Law.
7.1.5. Welfare Benefit Plans and Fringe Benefits. (a) Seller's
----------------------------------------- --------
Welfare Benefit Plan and Fringe Benefit Responsibilities. Seller shall retain,
--------------------------------------------------------
and Purchaser shall not assume or be responsible for, any liability relating to
Seller's group health or welfare benefit plans or fringe benefits with respect
to former employees of the Divisions and their dependents except to the extent
described in Sections 4.1(e).
---------------
(b) Seller's COBRA Responsibilities. Seller shall retain,
-------------------------------
and Purchaser shall not assume or be responsible for, any liability with respect
to group health continuation coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA") for former employees of the
Divisions and their dependents based on their coverage under Seller's group
health plans.
(c) Purchaser's Welfare Benefit Plans. Purchaser will
---------------------------------
offer to each Transferred Employee who is not covered by a Collective Bargaining
Agreement the same welfare and fringe benefits offered to similarly situated
employees of the Purchaser. Purchaser will offer to each Transferred Employee
who is covered by a Collective Bargaining Agreement such welfare and fringe
benefits as are required by such Collective Bargaining Agreement. Purchaser
shall grant to each Transferred Employee credit for all service with Seller for
all purposes under Purchaser's welfare and fringe benefit plans; provided,
--------
however, that no such credit shall be given for purposes of any post-retirement
-------
medical or other post-retirement welfare benefit prior to satisfying the service
requirement with Purchaser and other eligibility requirements applicable to such
benefits.
7.2. Publicity. The parties hereto agree to consult with one another
---------
prior to the issuance of any press release or public statement relating to or
concerning this Agreement or the matters contained herein. Such consultation
shall be satisfied by the giving of prior notification of a party's intent to
issue a press release accompanied by a copy of the proposed language of such
press release or public statement. If Purchaser or Seller is required to issue
a press release
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by law or a securities exchange, it shall use its best efforts to inform the
other party hereto prior to such issuance.
7.3. Post-Closing Access; Records; Cooperation. (a) On the Closing
-----------------------------------------
Date or as soon thereafter as practicable, Seller will deliver or cause to be
delivered to Purchaser all original agreements, documents, books, records and
files in the possession of Seller and its Affiliates relating exclusively to the
Businesses or the Assets, including property records, production records,
engineering records, purchasing and sales records, payroll records, accounting
records, mailing lists, customer and vendor lists and records, market studies
and other historical business plans (collectively, "Records"), except that
-------
Seller shall retain and not Transfer to Purchaser the following (the "Retained
--------
Records"): (i) Records which contain only incidental non-material information
-------
relating to the Businesses or relate to Seller or the businesses of Seller other
than the Businesses; and (ii) any tax returns or other materials or reports with
respect to Excluded Taxes or including any information relating to Tax items of
Seller or its Affiliates not relating to the Businesses or the Assets.
(b) For a period of five (5) years after the Closing, upon
reasonable notice, each of Purchaser and Seller (and any successor of Seller)
will give, or cause to be given, to the Representatives of the other access to
and permission to copy, during normal business hours, at the requesting party's
expense, Records relating to periods prior to the Closing and access to
employees, to the extent reasonably requested by the other party, in connection
with financial reporting matters, audits, legal proceedings, employee benefits
claims, governmental investigations and other reasonable business purposes
related to the fact of Seller's prior ownership of the Businesses; provided,
--------
however, that nothing herein will obligate any party to take actions that would
-------
unreasonably disrupt the normal course of its business, violate the terms of any
contract to which it is a party or to which it or any of its assets is subject,
or grant access to any of its proprietary, confidential or classified
information which does not relate to the Businesses or the Assets.
(c) For a period of three (3) years after the Closing, in the
event and for so long as any party actively is pursuing an affirmative recovery
or contesting or defending against any charge, complaint, action, suit,
proceeding, hearing, investigation, claim or demand by any Person (including any
Governmental Authority) in connection with (i) any transaction contemplated
under this Agreement or any Related Agreement or (ii) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act or transaction on or prior to the Closing Date
involving the Businesses or the Assets, the other party will cooperate with such
party and its counsel in the pursuit, contest or defense as may be reasonably
requested. Notwithstanding the foregoing, no provision of this Section 7.3(b) or
--------------
(c) shall be construed so as to limit Seller's obligation to transfer to
---
Purchaser all of the records included in the Assets; and, provided further, that
the foregoing provisions of this Section 7.3(c) shall not apply (A) where
--------------
compliance therewith could reasonably be expected to result in the loss of a
party's attorney-client, work product or similar privilege or defense or (B) as
to matters involving a dispute between the parties hereto.
-51-
(d) Following the Closing, Purchaser may receive and open
all mail or telecopies addressed to Seller and deal with the contents thereof in
its discretion to the extent, and only to the extent, that such mail or
telecopies and the contents thereof relate to the Businesses or the Assets.
Seller agrees to promptly deliver to Purchaser all of the mail, checks, money,
telecopies and any other information to the extent, and only to the extent,
related to the Businesses or the Assets received by Seller following the
Closing. Purchaser agrees to promptly deliver to Seller all Excluded Assets
received by or held by Purchaser after the Closing. Seller will cooperate with
Purchaser, and take such actions as Purchaser reasonably requests, to assure
that customers of the Businesses send their remittances directly to Purchaser.
(e) For a period of six (6) months after the Closing, at
reasonable compensation payable by PDM to Purchaser as agreed upon between the
parties, Purchaser will permit PDM reasonable access to and use of the AS400
computer being purchased by Purchaser as part of the Assets in order for Seller
to close out its corporate accounting records relating to the Divisions.
7.4. Certain Tax Matters. (a) Any and all applicable sales, use,
-------------------
transfer, stamp, conveyance and other similar Taxes imposed by any taxing
jurisdiction, domestic or foreign, with respect to the Transfer of the Assets
(including the Transferred Intellectual Property), and any deficiency, interest
or penalty asserted with respect thereto, and any and all recording and filing
fees, notarial fees and other similar costs of closing with respect to the
Transfer of the Assets or the other transactions contemplated hereby shall be
the sole responsibility of Purchaser.
(b) Seller and Purchaser shall each (i) provide the other party
with such information or assistance as may be reasonably requested by the other
party in connection with the preparation and filing of any return or report, any
audit or examination by any taxing authority, any judicial or administrative
proceeding, or any other reasonable business purpose relating to liability for
Taxes; (ii) retain for the statute of limitations (including any extensions)
applicable with respect to such returns, audits, examinations, or proceedings,
such material records or information as may be relevant thereto; (iii) provide
the other party with reasonable access to, and allow the other party to make
copies and extracts of, such records or information, and prior to disposing of
any such records or information allow the other party (at the first party's cost
and expense of shipping) the right to obtain the originals of such records or
information; (iv) in connection with such returns, audits, examinations, and
proceedings, cause its relevant Representatives to be reasonably available to
the other party and to provide to the other party reasonable technical support
(including the provision of interpretation, analyses, and testimony with respect
to inventory, contract backlog orders, engineering drawings, software, and other
intangibles); and (v) provide the other party with any final determination of
any such audit, examination, or proceeding that affects the amount required to
be shown on any Tax return of the other party for any period. The party
requiring assistance shall reimburse the other party for all reasonable out-of-
pocket costs incurred as a direct result thereof. Access to records and
information relating to Taxes shall be governed by this Section 7.4, and not by
-----------
Section 7.3.
-----------
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(c) Except as otherwise provided in this paragraph, Purchaser
shall prepare and file or cause to be prepared and filed on a timely and proper
basis all returns and documents required to be filed following the Closing Date
with respect to Taxes that are Assumed Liabilities and pay or cause to be paid
all such Taxes required to be paid following the Effective Time. With respect to
Taxes that are Assumed Liabilities and for which Purchaser is required to
prepare and file the related Tax returns, Purchaser shall promptly send to
Seller copies of all such Tax returns and documents and proof of the payment of
such Taxes, if any. If Purchaser is not permitted by law to file any such Tax
return or document, no later than ten days prior to the due date for the filing
of the Tax return or document (or, in the case of deposits of any Taxes, two
days before the deposits are due), Purchaser shall prepare and submit or cause
to be prepared and submitted to Seller the Tax return or document reflecting the
relevant Tax items, together with payment for the amount of Taxes, if any, shown
as due on the Tax return or document. Seller shall (provided that Purchaser is
in compliance with the preceding sentence) on a timely basis file such Tax
return or document and pay such Taxes so remitted to it by Purchaser, and Seller
shall promptly send Purchaser copies of such Tax return or document and proof of
the payment of such Taxes, if any. The filing by Seller of any Tax return or
document and/or payment by Seller of any Taxes remitted to it by Purchaser
pursuant to this paragraph shall not change the fact that such Taxes and any
additional interest, penalties or additions to Tax payable with respect thereto
are obligations for which the Purchaser shall be solely liable to the extent so
provided in the other relevant provisions of this Agreement if one of the
principal reasons for the assessment of such additional interest, penalty or
addition to tax is the failure of Purchaser to remit to Seller sufficient funds
on a timely basis in order to pay such Tax.
(d) Except as provided in Section 7.4(a) and 7.7, Seller shall
-------------- ---
be liable and indemnify Purchaser for all Taxes, other than those properly
accrued on the Audited Final Balance Sheet and constituting an Assumed
Liability, attributable to the Seller or its Affiliates, the ownership of the
Assets, or the operations of the Businesses for all taxable periods (or portions
thereof) ending on or before the Closing Date.
7.5. Non-Disclosure of Confidential Information by Seller. Seller
----------------------------------------------------
acknowledges that Purchaser would be irreparably damaged if, after the Closing,
Seller's or any of its Affiliate's, confidential knowledge of the Businesses
were disclosed to or utilized on behalf of others. Accordingly, Seller shall
not, and shall cause its Affiliates and Representatives not to, disclose,
directly or indirectly, any confidential or proprietary information relating to
the Businesses to any Person, and Seller shall not, and shall cause its
Affiliates and Representatives not to, make use, directly or indirectly, of any
such confidential or proprietary information for its own benefit or for the
benefit of any Person. For the purpose of this Section 7.5, the term
-----------
"confidential or proprietary information" shall mean all information which is
known to Seller or any of its Affiliates or Representatives relating exclusively
to the Businesses, including, but not limited to, trade secrets, know how,
customer and mailing lists, pricing and credit techniques, policies, practices
and information, research and development activities, books and records,
financial statements, forecasts, plans, strategies, suppliers and private
processes. For the purpose of this Section 7.5, the term "confidential or
-----------
proprietary information" shall exclude: (A)
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information which is generally known to or available for use by the public other
than as a result of Seller's or any of its Affiliate's or Representative's acts
or omissions, (B) information received by Seller or any Affiliate thereof from
any third party not known by Seller to be bound by any confidentiality agreement
with respect to such information, (C) information required to be disclosed by
Law, (D) information to the extent related to or used or held for use in
connection with businesses of Seller other than the Businesses, or (E)
information necessary to establish Seller's rights under this Agreement or any
Related Agreement; provided that, prior to the disclosure of any information not
--------
deemed to be "confidential or proprietary information" as a result of either of
the foregoing clauses (C) or (E), Seller shall give Purchaser prompt notice of
such disclosure to permit Purchaser to attempt to obtain a protective order or
other assurance that confidential treatment will be accorded such information
and shall cooperate with Purchaser, at Purchaser's expense, in obtaining such
order or assurance.
7.6. Further Assurances; Customer Notices. (a) After the Closing
------------------------------------
Date, Seller shall, at the request and expense of Purchaser, execute,
acknowledge and deliver to Purchaser without further consideration, all such
further assignments, conveyances, endorsements, consents and other documents as
Purchaser may reasonably request (a) to Transfer to and vest in Purchaser and
protect its right, title and interest in, all of the Assets, (b) to aid in the
collection of accounts receivable, (c) to obtain any consent required to an
assignment of a Contract or a commitment, and (d) otherwise to consummate the
transactions contemplated by this Agreement and the Related Agreements.
Purchaser shall take such action, at the request and expense of Seller, to
further and more completely evidence the assumption and performance of the
Assumed Liabilities as shall be reasonably requested by Seller.
(b) On the first business day following the Closing Date, Seller
shall, at Purchaser's expense, by first class mail, send the Customer Notices,
and thereafter from time to time during the five-month period following the
Closing Date send such further Customer Notices as the Purchaser may reasonably
request.
7.7. Allocations. All property taxes levied with respect to the Owned
-----------
Real Property and any personal property included in the Assets for a taxable
period that includes (but does not end as of) the Effective Time shall be
apportioned between Seller and Purchaser as of the Effective Time based on the
number of days of such taxable period included in the pre-Effective Time tax
period and the number of days of such taxable period included in the post-
Effective Time tax period. Seller shall be liable for the proportionate amount
of such taxes that is attributable to the pre-Effective Time tax period, and
Purchaser shall be liable for the proportionate amount of such taxes that is
attributable to the post-Effective Time tax period. Each utility payment shall
also be allocated between Purchaser and Seller so that Seller shall be liable
for that portion of such payment that relates to the pre-Effective Time period
and Purchaser shall be liable for that portion of such payment that relates to
the post-Effective Time period. Within thirty (30) days after the Closing,
Seller and Purchaser shall present a statement to the other setting forth the
amount of reimbursement to which each is entitled under this Section 7.7,
-----------
together with such supporting evidence as is reasonably necessary to calculate
the
-54-
proration amount. Unless provided for on the Audited Final Balance Sheet, the
proration amount shall be paid by the party owing it to the other within 30 days
after delivery of such statement. Purchaser and Seller shall cooperate to agree
on mutually acceptable allocations based on the Effective Time with respect to
any other cost typically allocated in connection with similar real property
closings.
7.8. Non-Competition. (a) Seller hereby covenants and agrees that
---------------
it will not, directly or indirectly, use, or allow any successor or Person which
in competition with the Purchaser or its Affiliates, sells, markets, distributes
or deals in all or any portion of the Businesses to use, the names Pitt-Des
Moines or PDM, or any variation materially derived therefrom, in connection with
any business which is competitive to all or any portion of the Businesses.
(b) Seller acknowledges that the foregoing restriction on the
use of the Pitt-Des Moines or PDM name, in view of the nature of the Businesses
and Purchaser's intention to continue to operate the Businesses throughout the
world, is fair and reasonable and is reasonably required for the protection of
Purchaser.
7.9. Assets Located at Fresno, CA. Within thirty (30) days
----------------------------
following the Closing Date, Purchaser, at its sole cost and expense, shall
remove all Tangible Personal Property (including, without limitation, the 120 by
240 foot unassembled toolhouse building constituting a part of the Assets)
located at Seller's Fresno, California plant location. Purchaser acknowledges
and agrees that any Tangible Personal Property remaining at such plant location
following the expiration of such thirty (30) day period may be retained by
Seller and any ownership rights of Purchaser therein shall be deemed to be
forfeited.
7.10. Letters of Credit. With respect to the letters of credit
-----------------
listed or described in Section 5.1.3 of the PDM Disclosure Schedule
(collectively, the "Letters of Credit" and individually, a "Letter of Credit"),
----------------- ----------------
Purchaser agrees that (a) it shall indemnify Seller for the costs and expenses
of maintaining such Letters of Credit from and after the Effective Time, (b) to
the extent any Letter of Credit is drawn upon after the Effective Time,
Purchaser shall defend, indemnify and hold Seller and its Affiliates harmless
from and against any and all Losses arising out of or relating to such draw and
such Letter of Credit, and (c) if Seller shall so request in writing at any time
after May 31, 2001, Purchaser shall replace on or before June 30, 2001 each such
Letter of Credit having an expiration date ending after June 30, 2001.
Purchaser acknowledges and agrees that a breach by Purchaser of the covenant set
forth in subparagraph (c) above will cause Seller to sustain injury for which it
would not have an adequate remedy at law for money damages. Therefore,
Purchaser agrees that in the event of any such breach, Seller shall be entitled
to the remedy of specific performance of such covenant and other equitable
relief in addition to any other remedy to which it may be entitled, at law or
equity.
-55-
7.11. Delivery of Baseline Report. Within (10) days of receipt
---------------------------
thereof, Purchaser shall deliver to Seller the Baseline Reports for the
properties subject to the Des Moines Lease and the ▇▇▇▇▇▇ Lease.
7.12. Woodlands Lease. Notwithstanding anything to the contrary
---------------
contained in this Agreement, Seller shall send a notice to the Woodlands
Landlord to terminate the Woodlands Lease pursuant to Section 2, Paragraph 1 of
the Woodlands Lease on or before March 31, 2001 and Purchaser shall deliver to
Seller, contemporaneous with the adjustments made pursuant to Section 9.10, the
------------
following sums in cash or immediately available funds: (i) $159,367.56 plus
(ii) one (1) month's Base Rent (as defined in the Woodlands Lease) at the rental
rate that would have been in effect at the beginning of the 64/th/ full calendar
month of the Term of the Woodlands Lease plus (iii) Base Rent and Additional
Rent that Seller is obligated to pay to the Woodlands Landlord for the period
from the Effective Time through February 6, 2001. The remaining payments of
Base Rent and Additional Rent that Seller is obligated to pay to the Woodlands
Landlord for the period from February 7, 2001 through December 31, 2001 shall be
payable as rent monthly on the 1/st/ date of each month commencing February 7,
2001 pursuant to the Woodlands Sublease, and provided further that Purchaser
shall be obligated to pay all of the amounts set forth in this Section 7.12
------------
regardless of whether the Woodlands Landlord consents to the Sublease or Seller
is able to deliver use and occupancy of the Premises through December 30, 2001,
the expiration date as set forth in the Woodlands Sublease.
7.13. Records Storage. From the Closing Date through May 31, 2001,
---------------
Purchaser grants to Seller, at no cost, a license and right to use, access, and
occupy the premises commonly known as the Annex Building and ▇▇▇▇▇▇ Building
located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ (collectively, the
"▇▇▇▇▇▇ Building"), together with rights of ingress and egress to and from the
▇▇▇▇▇▇ Building across lands of Purchaser ("License"), for the delivery, storage
and retrieval of documents and records of Seller (the "▇▇▇▇▇▇ Records"). On or
before May 31, 2001, Seller shall remove all of the ▇▇▇▇▇▇ Records from the
▇▇▇▇▇▇ Building. Purchaser shall not be liable for, and Seller hereby releases
and relieves the Purchaser Indemnitees from liability in connection with, any
damage to or loss or destruction of the ▇▇▇▇▇▇ Records from (i) any fire, other
casualty, accident, occurrence or condition in or about the premises of the
▇▇▇▇▇▇ Building and (ii) any negligent act or omission (including gross
negligence) of any of the Purchaser Indemnitees, but not including willful
misconduct of any Purchaser Indemnitee.
ARTICLE VIII
INDEMNIFICATION
---------------
8.1. Termination of Representations and Warranties. (a) The
---------------------------------------------
representations and warranties contained in Sections 5.1 and 5.2 shall terminate
------------ ---
and expire on the Closing Date, except that in the case of any fraudulent
misrepresentation, the applicable representation
-56-
warranty will not terminate and expire until two (2) years after discovery of
the condition, circumstance or fact constituting such fraudulent
misrepresentation.
(b) Unless a specified period is set forth in this Agreement (in
which event such specified period will control), all covenants contained in this
Agreement (including the covenants set forth in this Article VIII) will survive
------------
the Closing and remain in full force and effect without time limit.
8.2. Indemnification. (a) Subject to Section 8.1, from and after the
--------------- -----------
Closing, Seller shall indemnify, defend and hold harmless Purchaser and its
Affiliates and their respective directors, officers, employees and
Representatives (collectively, "Purchaser Indemnitees") from and against any and
---------------------
all claims, demands or suits (by any Person, including any Governmental
Authority), losses, liabilities, damages (including, without limitation,
indirect, consequential and punitive damages), fines, penalties, obligations,
payments, costs and expenses, paid or incurred, whether or not relating to,
resulting from or arising out of any Third Party Claim, including the costs and
expenses of any and all actions, suits, proceedings, demands, assessments,
judgments, settlements, and compromises relating thereto and reasonable
attorneys' fees in connection therewith (collectively, "Losses", provided, that
------ --------
Losses shall not include any indirect, consequential or punitive damages of any
Purchaser Indemnitee, including damages for lost profits and lost business
opportunities, arising in connection with any claim other than a Third Party
Claim; such Losses individually and collectively, "Indemnifiable Purchaser
-----------------------
Losses"), resulting from or arising out of any of the following:
------
(i) any fraudulent misrepresentation by Seller of any of
the representations and warranties of Seller contained in Section 5.1;
-----------
(ii) any breach by Seller of any covenant of Seller
contained in this Agreement, the ▇▇▇▇▇▇ Lease or the Des Moines Lease;
(iii) any Excluded Liability; and
(iv) any claim by the licensor of licensed software listed
in Section 5.1.10 of the PDM Disclosure Schedule that the transfer to, or use
by, Purchaser of such software in connection with the Businesses violates the
provisions of the relevant license agreement or any other rights of such
licensor.
(b) Subject to Section 8.1, from and after the Closing, CB&I and
-----------
CB&I Sub shall, jointly and severally, indemnify, defend and hold harmless
Seller and its Affiliates and their respective directors, officers, employees
and Representatives (collectively, "Seller Indemnitees") from and against any
------------------
and all Losses (provided, that Losses shall not include any indirect,
--------
consequential or punitive damages of any Seller Indemnitee, including damages
for lost profits and lost business opportunities arising in connection with any
claim other than a Third Party Claim; such Losses individually and collectively,
"Indemnifiable Seller
--------------------
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Losses"; and, collectively with Indemnifiable Purchaser Losses,"Indemnifiable
------ -------------
Losses") resulting from or arising out of any of the following:
------
(i) any fraudulent misrepresentation by Purchaser of any
of the representations and warranties of Purchaser contained in Section 5.2;
-----------
(ii) any breach by Purchaser of any covenant of Purchaser
contained in this Agreement, the ▇▇▇▇▇▇ Lease or the Des Moines Lease; and
(iii) any Assumed Liability.
Notwithstanding the terms of any Transfer Documents, CB&I acknowledges and
agrees the indemnification rights of Seller under this Section 8.2(b) relative
--------------
to any Assumed Liability shall not be altered, modified, extinguished or
otherwise impaired by reason of the sole assumption by CB&I Sub of any Assumed
Liability under any Transfer Document.
(c) For purposes of this Agreement (i) "Indemnity Payment" means
-----------------
any amount of Indemnifiable Losses required to be paid pursuant to this Section
-------
8.2, (ii) "Indemnitee" means any Person entitled to indemnification under this
--- ----------
Agreement and (iii) "Indemnifying Party" means any Person required to provide
------------------
indemnification under this Agreement.
8.3. Defense of Claims. (a) If any Indemnitee receives notice of the
-----------------
assertion of any claim or cause of action or of the commencement of any action,
proceeding or investigation by any Person (including any Governmental Authority)
who is not a party to this Agreement or an Affiliate of such a party (a "Third
-----
Party Claim") against such Indemnitee, with respect to which an Indemnifying
-----------
Party is obligated to provide indemnification under this Agreement, the
Indemnitee will give such Indemnifying Party prompt written notice thereof, but
in any event not later than 30 calendar days after receipt of such notice of
such Third Party Claim. Such notice will describe the Third Party Claim in
reasonable detail, and will indicate the estimated amount, if reasonably
practicable, of the Indemnifiable Loss that has been or may be sustained by the
Indemnitee. The Indemnifying Party shall assume the defense of any Third Party
Claim at such Indemnifying Party's own expense and by such Indemnifying Party's
own counsel (reasonably satisfactory to the Indemnitee), and the Indemnitee will
cooperate in good faith in such defense; provided, however, that the
-------- -------
Indemnifying Party shall not have the right to assume the defense of any Third
Party Claim if the named parties to any such action or proceeding (including any
impleaded parties) include both the Indemnitee and the Indemnifying Party and
the Indemnitee shall have been advised by counsel that there are one or more
legal or equitable defenses available to the Indemnitee which are different from
or additional to those available to the Indemnifying Party so as to result in a
potential conflict of interest between the Indemnitee and the Indemnifying
Party; then, if the Indemnitee notifies the Indemnifying Party in writing that
the Indemnitee elects to employ separate counsel at the expense of the
Indemnifying Party, the Indemnifying Party shall not have the right to assume
the defense of the Indemnitee, it being understood, however, that the
Indemnifying Party shall not, in connection
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with any one such action or proceeding in separate but substantially similar or
related actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to local
counsel if appropriate) at any time for all Indemnitees. Notwithstanding
anything in this Section 8.3, if Seller is an Indemnifying Party with respect to
-----------
a Third Party Claim relating to, resulting from or arising out of (i) Taxes of
Seller incurred on or before the Closing Date, or (ii) an Indemnifiable Loss
under Section 8.2(a)(iii) (collectively, "Seller's Third Party Claims"), then
------------------- ---------------------------
Seller, by giving written notice to the Indemnitee, shall at all times have the
right to assume the defense of such Third Party Claim. In the event the
Indemnifying Party shall not have assumed the defense and the Indemnitee is
conducting the defense, the Indemnifying Party shall be entitled to monitor the
defense by the Indemnitee, to consult with the Indemnitee with respect to such
claim and to be kept fully informed by the Indemnitee of such Third Party Claim,
which shall include, without limitation, the right to review and obtain copies
of all pleadings, motions and correspondence, and other non-privileged
documentation and information in connection with such Third Party Claim, in each
case as the Indemnifying Party may reasonably request. The Indemnifying Party
and the Indemnitee shall make available to each other and their attorneys and
accountants as reasonably requested all books and records relating to Third
Party Claims, and the parties hereto agree to render to each other such
assistance as they may reasonably require to ensure the proper and adequate
defense of any Third Party Claim. The right to assume the defense of any Third
Party Claim shall include, without limitation, the right to assert, for the
benefit of the Indemnitee, cross-claims and counterclaims in connection with
such Third Party Claim which are directly related to such Third Party Claim.
(b) If, within 20 calendar days after giving notice of a Third
Party Claim to an Indemnifying Party pursuant to Section 8.3(a), an Indemnitee
--------------
receives written notice from the Indemnifying Party that the Indemnifying Party
has assumed the defense of such Third Party Claim as provided in Section 8.3(a),
--------------
the Indemnifying Party will not be liable for any legal expenses subsequently
incurred by the Indemnitee in connection with the defense thereof; provided,
--------
however, that if the Indemnifying Party fails to take reasonable steps necessary
-------
to defend diligently such Third Party Claim within 20 calendar days after
receiving written notice from the Indemnitee that the Indemnitee believes the
Indemnifying Party has failed to take such steps, the Indemnitee may assume its
own defense, and the Indemnifying Party will be liable for all costs or expenses
paid or incurred by the Indemnitee in connection therewith.
(c) Without the prior written consent of the Indemnitee, which
consent shall not unreasonably be withheld, the Indemnifying Party will not
enter into any settlement of any Third Party Claim which (i) does not include as
an unconditional term thereof the release by the claimant or the plaintiff of
the Indemnitee and its Affiliates from all liability in respect of such Third
Party Claim; (ii) could reasonably be expected to lead to liability or create
any financial or other obligation on the part of the Indemnitee or any Affiliate
thereof for which the Indemnitee or any Affiliate thereof is not entitled to
indemnification hereunder; (iii) would require the Indemnitee or any Affiliate
thereof to change in any material respect the way it conducts business; or (iv)
would require any admission of wrongdoing by the Indemnitee or any
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Affiliate thereof. If a firm offer is made to settle a Third Party Claim which
could not be expected to lead to liability or the creation of a financial or
other obligation on the part of the Indemnitee or any Affiliate thereof for
which the Indemnitee or any Affiliate thereof is not entitled to indemnification
hereunder or to require the Indemnitee or any Affiliate thereof to change in any
material respect the way it does business or an admission of wrongdoing by the
Indemnitee or any Affiliate thereof, and the Indemnifying Party desires to
accept and agree to such offer, the Indemnifying Party will give written notice
to Indemnitee to that effect. If the Indemnitee fails to consent to such firm
offer within 20 calendar days after its receipt of such notice, the Indemnitee
may, at its sole cost and expense, continue to contest or defend such Third
Party Claim and, in such event, the maximum liability of the Indemnifying Party
as to such Third Party Claim will not exceed the amount of such settlement
offer.
(d) Any claim by an Indemnitee on account of an Indemnifiable
Loss which does not result from a Third Party Claim (a "Direct Claim") shall be
------------
asserted by such Indemnitee by giving the Indemnifying Party reasonably prompt
written notice thereof after learning of such Direct Claim and the Indemnifying
Party will have a period of 30 calendar days within which to respond in writing
to such Direct Claim. If the Indemnifying Party does not so respond within such
30 calendar day period, the Indemnifying Party will be deemed to have rejected
such claim. In such event, or in the event the Indemnifying Party sends notice
to the Indemnitee objecting to the matters set forth in such notice of
indemnification, each of the parties shall be free to pursue such remedies as
may be available to it.
(e) A failure to give timely notice as provided in this Section
-------
8.3 or in Section 8.4 will not affect the rights or obligations of any party
--- -----------
hereunder except and only to the extent that, as a result of such failure, any
party which was entitled to receive such notice was deprived of its right to
recover any payment under its applicable insurance coverage or was otherwise
actually damaged as a result of such failure.
(f) If the amount of any Indemnifiable Loss, at any time
subsequent to the making of an Indemnity Payment, is reduced by recovery,
settlement or otherwise under or pursuant to any insurance coverage, or pursuant
to any claim, recovery, settlement or payment by or against any other Person,
the amount of such reduction, less any costs, expenses, premiums or other
offsets incurred in connection therewith, will promptly be repaid by the
Indemnitee to the Indemnifying Party. Upon making any Indemnity Payment, the
Indemnifying Party will, to the extent of such Indemnity Payment, be subrogated
to all rights of the Indemnitee against any third party that is not an Affiliate
of the Indemnitee in respect of the Indemnifiable Loss to which the Indemnity
Payment relates. Without limiting the generality or effect of any other
provision hereof, each such Indemnitee will duly execute upon request all
instruments reasonably necessary to evidence and perfect the above-described
subrogation rights.
8.4. Seller's Insurance. (a) It is understood and agreed that, for
------------------
purposes of this Agreement, Excluded Liabilities shall include any liability
relating to the Businesses to the extent, and only to the extent, of the
coverage available under the Insurance Policies for losses
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occurring prior to the Closing Date (including as an Excluded Liability (i) any
deductible or self-insurance retention relating to workers compensation
insurance and (ii) any deductible relating to any accident or loss known to
Seller at or prior to the Closing Date).
(b) In order to assist Purchaser in determining which
liabilities relating to the Assets or the Businesses may be covered under the
Insurance Policies, Seller will provide to Purchaser a list of all Insurance
Policies known to Seller to be applicable to the Covered Entities from 1980 to
the present within 30 days of the Closing Date. Within 90 days of the Closing
Date, Seller will provide to Purchaser copies of all Insurance Policies within
its possession or control which formerly provided or currently provide coverage
to any of the Covered Entities.
(c) With respect to any liability relating to the Businesses
which Purchaser believes in good faith is potentially covered under the
Insurance Policies (and therefore an Excluded Liability), Purchaser shall
provide prompt notice to Seller, and Seller shall provide prompt notice to all
insurance companies under all potentially applicable Insurance Policies.
Purchaser hereby agrees to cooperate and assist Seller as reasonably necessary
with respect to presenting claims and securing recoveries under the Insurance
Policies. Seller will pursue coverage under the Insurance Policies in good faith
and will use its commercially reasonable efforts to maximize insurance
recoveries under the Insurance Policies. In the event that Seller fails to meet
its obligations under this Section 8.4(c) with respect to any Excluded Liability
--------------
relating to the Businesses potentially covered under the Insurance Policies,
Seller shall assign to Purchaser (to the extent assignable) all rights to pursue
recoveries under the Insurance Policies for defense, indemnification, losses,
damages, settlements or other payments or reimbursements of any kind with
respect to such Liability. This Section 8.4(c) shall not be interpreted to
--------------
require Seller to file or prosecute any legal action or suit under the Insurance
Policies, and in the event that Seller elects not to so prosecute such action or
suit for insurance recoveries, Purchaser may elect to pursue such action or suit
at its own expense.
(d) With respect to any claim as to which an insurer disputes
its obligation under the Insurance Policies, Seller may settle its claim under
the Insurance Policies with the advice and consent of Purchaser. If Seller
reaches a written letter of intent or agreement in principle to settle with any
insurers under the Insurance Policies as to a liability relating to the
Businesses, Seller shall give Purchaser notice and copy of such letter of intent
or agreement in principle and 20 days within which to approve the settlement or
take assignment of the claim against such insurer. If Purchaser elects to take
assignment of the claim against such insurer, the underlying liability relating
to the Businesses shall thereafter be deemed to be an Assumed Liability under
this Agreement (to the extent not otherwise excluded hereunder) and Purchaser
will be entitled to retain any recoveries it receives from its prosecution of
such claim against such insurer.
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8.5. Mitigation. Every Indemnitee seeking indemnification under this
----------
Agreement shall correct or mitigate, to the extent reasonably practicable, any
Indemnifiable Losses suffered by such Indemnitee for which indemnification is
claimed hereunder.
8.6. Insurance Proceeds and Tax Benefits. The amount payable to an
-----------------------------------
Indemnified Party by the Indemnifying Party in respect of any Indemnifiable
Losses shall be reduced by the amount of any insurance or other indemnification
proceeds theretofore or thereafter actually received by the Indemnified Party
from a third party. Where any Tax benefit is realized by an Indemnified Party
with respect to an indemnifiable event, the amount of the Indemnity Payment
shall be reduced by an amount determined so that the Indemnified Party is left
in the same after-Tax position as the one in which it would have been in if no
Indemnity Payment were due. Where an Indemnified Party is taxed on the receipt
of an Indemnity Payment, the Indemnifying Party shall, in addition to the
Indemnity Payment, pay an additional amount to the Indemnified Party equal to
the amount of such tax; provided, however, that the Indemnified Party shall use
-------- -------
commercially reasonable efforts to avoid taxation of such Indemnity Payment
receipt.
8.7. Remedies Exclusive. The remedies provided in this Agreement
------------------
(which for this purpose shall not include any Related Agreement) shall be
exclusive of any other rights or remedies available to the parties hereto,
either at law or in equity.
ARTICLE IX
MISCELLANEOUS PROVISIONS
------------------------
9.1. Notices. Unless otherwise provided in this Agreement, all
-------
notices and other communications required or permitted hereunder will be in
writing and will be deemed to have been duly given when delivered in person or
sent by confirmed telefax transmission or one business day after having been
dispatched by a recognized overnight courier service to the appropriate party at
the address specified below:
(a) If to Seller to:
Pitt-Des Moines, Inc.
Town Center One
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President-Finance
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With copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Professional Corporation
One Oxford Centre, 20th Floor
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
(b) If to Purchaser to:
Chicago Bridge & Iron Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: Secretary
With a copy to:
Winston & ▇▇▇▇▇▇
▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
or to such other address or addresses as any such party may from time to time
designate as to itself by like notice.
9.2. Expenses. Except as otherwise expressly provided herein
--------
(including Section 7.8(a)), (i) Seller will pay any expenses incurred by it and
--------------
its Affiliates incident to this Agreement and in preparing to consummate and
consummating the transactions provided for herein and (ii) Purchaser will pay
any expenses incurred by it incident to this Agreement and in preparing to
consummate and consummating the transactions provided for herein.
9.3. Assignment; Successors and Assigns. The respective rights and
----------------------------------
obligations of the parties hereto shall not be assignable without the prior
written consent of the other party; provided, however, that Purchaser may assign
-------- -------
its rights and delegate its obligations under this Agreement to any Affiliate
or, following the Closing, to any Person that acquires, directly or indirectly,
all, or substantially all, of the Assets and the Businesses, in which event all
the rights of Purchaser and remedies available to it under this Agreement with
respect to such rights shall extend to and be enforceable by such Affiliate or
assignee; provided further, however, that (a) no such assignment and delegation
----------------
shall release Purchaser from its obligations under this Agreement and Purchaser
shall remain primarily liable to perform the terms of this Agreement, and (b) no
such assignment shall cause any consent or approval required to be
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obtained hereunder to be withheld, delayed or otherwise conditioned. In the
event of any such assignment and delegation the term "Purchaser" as used in this
---------
Agreement shall be deemed to refer to each such Affiliate or assignee of
Purchaser where reference is made to actions taken or to be taken with respect
to the acquisition of the Businesses or the Assets and the assumption of
liabilities, and shall be deemed to include both Purchaser and each such
Affiliate or assignee where appropriate. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
9.4. Waiver; Amendment. Purchaser and Seller by written notice to
-----------------
the other may extend the time for performance of any of the obligations or other
actions of the other under this Agreement or waive compliance with any of the
conditions or covenants of the other contained in this Agreement. This
Agreement may not be amended or supplemented orally, but only by an instrument
in writing signed by the parties hereto.
9.5. Entire Agreement. This Agreement (together with the Related
----------------
Agreements, Exhibits and Schedules hereto) supersedes any other agreement,
whether written or oral, that may have been made or entered into by Purchaser
and Seller (or by any Representative of any thereof) relating to the matters
contemplated hereby, including that certain Confidentiality Agreement dated July
7, 2000 and that certain Letter of Intent dated August 29, 2000, each between
Purchaser and Seller. This Agreement (together with the Exhibits and Schedules
hereto) and the Related Agreements constitute the entire agreement by and
between Seller and Purchaser relating to the matters contemplated hereby.
9.6. No Third Party Beneficiaries. Nothing expressed or implied in
----------------------------
this Agreement is intended or will be construed to confer upon or give any
Person other than the parties hereto and the Indemnitees under Article VIII any
------------
rights or remedies under or by reason of this Agreement or any transaction
contemplated hereby.
9.7. Bulk Sales. To the extent applicable, if at all, the parties
----------
hereto waive compliance with the provisions of the so-called bulk sales or
transfer laws of any jurisdiction in connection with the Transfer of the Assets
pursuant to this Agreement.
9.8. APPLICABLE LAW. EXCEPT TO THE EXTENT OTHERWISE EXPRESSLY
--------------
PROVIDED HEREIN OR IN A RELATED AGREEMENT, THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF ILLINOIS,
WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF.
9.9. Captions and Headings. Captions and headings to Articles and
---------------------
Sections herein are inserted for convenience of reference only, and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement.
9.10. Passage of Title and Risk of Loss. Legal title, equitable
---------------------------------
title and risk of loss with respect to the Assets will not pass to Purchaser
until the Assets are Transferred at the
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Closing, which Transfer, once it has occurred, will be deemed effective for Tax,
accounting and other computational purposes as of 11:59 p.m. (Central Time) on
December 31, 2000 (the "Effective Time"). Notwithstanding any other provision of
--------------
this Agreement to the contrary, from and after the Effective Time through
February 9, 2001, any revenue or income received or recognized by Seller with
respect to the Divisions shall be for the benefit of, and be paid to, Purchaser,
and any cost or expense paid or incurred by Seller with respect to the Divisions
shall be for the account of, and be reimbursed by, Purchaser. Within a
reasonable period after the Closing Date (and in no event later than thirty (30)
days thereafter), Purchaser shall prepare and present a statement to Seller
setting forth a calculation of (i) all moneys loaned, advanced or paid by Seller
to, or for the benefit of, the Divisions from and after the Effective Time
through February 9, 2001, and (ii) all moneys loaned, advanced, dividended, paid
or applied by or from the Divisions to, or for the benefit of, the Seller
(excluding the Divisions) or any Affiliate of Seller (including, but not limited
to, any amounts so paid or applied relating to any Excluded Liability, corporate
overhead charge or other corporate allocation) from and after the Effective Time
through February 9, 2001, together with such documentation as is reasonably
necessary to support such calculations. The net difference between the total
amounts shown in (i) and (ii) shall be paid by Seller or Purchaser, as the case
may be, at the time of the Purchase Price adjustment provided in Section 3.2.
-----------
9.11. Execution in Counterparts. This Agreement may be executed in
-------------------------
counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same agreement.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Asset
Purchase Agreement as of the date first written above.
PITT-DES MOINES, INC.
By: /s/ ▇. ▇. ▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Title: Vice President - Finance
---------------------------------------
CHICAGO BRIDGE & IRON COMPANY N.V.
By: CHICAGO BRIDGE & IRON COMPANY B.V.,
its Managing Director
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Title: Managing Director
---------------------------------------
CB&I CONSTRUCTORS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Title: Chairman
---------------------------------------
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