Exhibit 10.1
EXECUTION VERSION
MEMBERSHIP INTEREST PURCHASE
AGREEMENT
BY AND AMONG
K-SEA OPERATING PARTNERSHIP
L.P.,
K-SEA TRANSPORTATION PARTNERS
L.P.
MARINE RESOURCES GROUP,
INC.
AND
SALTCHUK RESOURCES,
INC.
DATED AUGUST 23,
2005
TABLE OF CONTENTS
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iii
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EXHIBITS
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Exhibit A
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Seller’s Knowledge
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Exhibit B
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Form of Escrow Agreement
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Exhibit C
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Form of Release
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Exhibit D
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Vessel Purchase Agreement
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Exhibit E
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Form of Registration Rights
Agreement
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Exhibit F
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Contracts with Seller’s
Affiliates
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SCHEDULES
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Schedule 3.1
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Foreign Qualifications
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Schedule 3.2
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Authorization
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Schedule 3.4
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Non-Contravention
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Schedule 3.6
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Broker Involvement
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Schedule 3.7
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Litigation
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Schedule 3.8
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Title to Assets
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Schedule 3.9
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Continuity Prior to Closing Date
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Schedule 3.10
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Contracts and Commitments
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Schedule 3.11
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Trademarks, Trade Names and Intellectual
Property
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Schedule 3.12(a)
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Unaudited Annual Financial Statements
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Schedule 3.12(b)
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Unaudited Interim Financial
Statements
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Schedule 3.12(e)
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Liabilities of Sea Coast
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Schedule 3.12(f)
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Intercompany Transactions
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Schedule 3.13
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Bank Relations
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Schedule 3.14(a)(1)
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Assets
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Schedule 3.14(a)(2)
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Condition of Assets
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Schedule 3.14(a)(2)
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Material Assets Not Being Conveyed
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Schedule 3.14(b)
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Vessels
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Schedule 3.14(c)
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Vessel Occurrences
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Schedule 3.14(d)
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Coastwise Documentation and Permits
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Schedule 3.14(e)
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Certificates
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Schedule 3.15
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Undisclosed Liabilities
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Schedule 3.16(1)
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Real Estate
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Schedule 3.16(2)
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Public Service Interruptions
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Schedule 3.18
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Inventory
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Schedule 3.19
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Employees
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Schedule 3.20
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Employee Benefits
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Schedule 3.21
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Compliance with Law
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Schedule 3.22
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Environmental
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Schedule 3.22(d)
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Non-Compliance with Environmental Law and
Remedial Action
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Schedule 3.22(e)
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Releases
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Schedule 3.22(f)
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Notices
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Schedule 3.24
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Governmental Licenses, Permits and Related
Approvals
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Schedule 3.25
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Responsible Carriers Plan
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Schedule 3.26(a)
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Tax Returns
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Schedule 3.26(e)
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Federal Tax Liability
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Schedule 3.26(f)
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Federal Tax Depreciation and
Amortization
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Schedule 3.28
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Internal Controls
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Schedule 3.29
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Safety Reports
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Schedule 3.30
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Transactions with Certain Persons
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Schedule 3.31
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Investor Questionnaire
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Schedule 5.2
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Conduct of Business
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Schedule 5.10(a)(i)
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Tax Allocation
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Schedule 5.13
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Vessel Transfer to Sea Coast
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Schedule 5.15(c)
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Terminated Plans
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Schedule 5.15(d)(1)
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Retention Bonuses
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Schedule 5.15(d)(2)
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Change-in-Control and Similar
Payments
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MEMBERSHIP INTEREST PURCHASE
AGREEMENT
This Membership Interest Purchase
Agreement (“Agreement”), dated August 23, 2005, is
among K-Sea Operating Partnership L.P., a Delaware limited
partnership (“Buyer”), K-Sea Transportation Partners
L.P., a Delaware limited partnership (the
“Partnership”), Marine Resources Group, Inc., a
Washington corporation (“Seller”), and, for certain
provisions of this Agreement, Saltchuk Resources, Inc., a
Washington corporation (“Saltchuk”).
RECITALS
WHEREAS, Sea Coast
Towing, Inc., a Washington corporation (“Sea
Coast”), is engaged in the maritime transportation of refined
petroleum products and related businesses;
WHEREAS, the authorized capital
stock of Sea Coast consists of 100,000 shares of common stock, par
value $1.00 per share;
WHEREAS, Seller owns all of the
issued and outstanding shares of capital stock of Sea Coast (the
“Shares”);
WHEREAS, immediately prior to the
Closing (as defined herein), Sea Coast shall merge with and into a
limited liability company organized under the laws of the State of
Delaware (“Sea Coast LLC”), and the Shares shall be
converted into membership interests of Sea Coast LLC (the
“Membership Interests”); and
WHEREAS, Buyer wishes to purchase
from Seller, and Seller wishes to sell, transfer, convey, assign
and deliver to Buyer, the Membership Interests;
NOW, THEREFORE, in consideration of
the premises and the respective representations, warranties,
covenants and agreements stated herein, the parties agree as
follows:
ARTICLE I
DEFINITIONS
Capitalized terms used in this
Agreement have the meanings specified in (a) the preamble,
(b) the recitals, (c) this Article I or
(d) elsewhere in this Agreement, as the case may
be:
Accounts Receivable
means all accounts receivable of
Sea Coast and all other rights of Sea Coast to payment for goods
sold or leased or for services rendered, including, without
limitation, those which are not evidenced by instruments or chattel
paper, whether or not they have been written off or reserved
against as a bad debt or doubtful account in any financial
statements, together with all instruments and all documents of
title representing any of the foregoing, all rights in any
merchandise or goods which any of the same represent, and all
rights, title, security and guaranties in favor of Sea Coast with
respect to any of the foregoing.
Affiliate , with respect to any Person, means any Person
that directly or indirectly controls, is controlled by or is under
common control with such Persons.
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Barge Assets
means tank barges and related
charters.
Buyer Indemnified
Party means Buyer and its
Affiliates and each of their respective officers, directors,
employees, agents and counsel.
Ceiling Amount
means (i) $77,000,000, plus
(ii) 125,000 multiplied by the average of the Closing Prices
for the twenty consecutive trading days ending three trading days
before the Closing Date.
Closing Accounts Receivable
Target means Sea
Coast’s Accounts Receivable as reflected on the statement of
Working Capital of Sea Coast as of the Closing Date, as finally
determined pursuant to Section 2.4(a), less the allowance for
doubtful accounts included therein.
Closing Price
means for each trading day the per
unit closing price of Common Units as reported on the New York
Stock Exchange (or, in case no such reported sale takes place on
such trading day, the average of the reported closing bid and asked
prices of a Common Unit on such trading day on the New York Stock
Exchange (as reported in the Central edition of The Wall Street
Journal or, if not reported thereby, another authoritative
source)).
Code means the Internal Revenue Code of 1986, as
amended.
Common Units
means common units representing
limited partner interests in the Partnership.
Environmental Laws
means any federal, state, local,
foreign or international Law regulating or protecting the public
health and safety (including in the workplace) or regulating or
protecting the environment and natural resources, including, but
not limited to, the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. Sections 9602 et seq.),
the Hazardous Materials Transportation Act (49 U.S.C. Sections 1801
et seq.), the Resource Conservation and Recovery Act (42 U.S.C.
Sections 6901 et seq.), the Clean Water Act (33 U.S.C. Sections
1251 et seq.), the Clean Air Act (42 U.S.C. Sections 7401 et seq.),
the Toxic Substances Control Act (15 U.S.C. Sections 7401 et seq.),
the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C.
Sections 2014 et seq.), the Occupational Safety and Health Act
(“OSHA”) (29 U.S.C. Sections 651 et seq.), and the Oil
Pollution Act of 1990 (33 U.S.C. Sections 2701 et seq.) and the
regulations promulgated pursuant thereto.
ERISA means the Employee Retirement Income Security
Act of 1974.
ERISA Affiliate
means each entity which is or has
been treated as a single employer with Sellers for purposes of
Section 414 of the Code or Section 4001(a)(14) of
ERISA.
Governmental Body
means any (a) nation, state,
county, city, town, village, district, or other jurisdiction of any
nature, (b) federal, state, local, municipal, foreign, or
other government, (c) governmental or quasi-governmental
authority of any nature (including any governmental agency, branch,
department, official, or entity and any court or other tribunal),
(d) multinational governmental organization or body, or
(e) body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, police,
regulatory or taxing authority or power of any nature.
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HSR Act means the Hart-Scott-Rodino Antitrust
Improvements Act.
Hazardous Material
means any substance, material or
waste which is regulated pursuant to any Environmental Law,
including, without limitation, (a) petroleum (including crude
oil or any fraction thereof) or petroleum products, polychlorinated
biphenyls, asbestos or asbestos-containing materials, lead or
lead-based paints or materials, toxic mold, and (b) any
material or substance which is defined or regulated as a
“hazardous waste,” “hazardous material,”
“hazardous substance,” “extremely hazardous
waste,” “restricted hazardous waste,”
“contaminant,” “pollutant,” “toxic
waste,” or “toxic substance,” under any
Environmental Law.
Indemnified Amounts
means any and all claims, losses,
damages, liabilities, judgments, fines, penalties, assessments and
expenses (including, without limitation, reasonable
attorneys’ fees); provided, however, to the extent an
Indemnified Amount is compensated for by insurance for which the
Indemnified Party is loss payee or insured, the Indemnified Amount
is limited to the uninsured portion thereof as follows:
(A) any amount which Indemnifying Party is obligated to pay
Indemnified Party under Article VI shall be reduced by the
amount of insurance proceeds actually received by Indemnified Party
(net of any expenses (but excluding increases in current or future
insurance premiums) incurred by the Indemnified Party in obtaining
such insurance proceeds) with respect to the loss for which
indemnity is sought (but the Indemnifying Party shall not be
entitled to delay payment of any amounts in anticipation of receipt
of insurance proceeds for more than 120 days after the Indemnified
Party’s submission of a claim to an insurance carrier for
payment to the extent such claim remains unpaid), and (B) if
at any time after such payment is made by Indemnifying Party to
Indemnified Party hereunder, the Indemnified Party should receive
insurance proceeds with respect to the loss for which such
Indemnified Amount was previously paid hereunder, such party shall
reimburse Indemnifying Party the amount by which payment would have
been reduced had such insurance been received prior to such payment
by Indemnifying Party. All parties shall take such
commercially reasonable actions to preserve their rights to, and
obtain insurance proceeds available with respect to, any such
Indemnified Amount.
Laws means all statutes, treaties, codes, ordinances,
decrees, rules, regulations, municipal bylaws, judicial or arbitral
or administrative or ministerial or departmental or regulatory
judgments, orders, decisions, rulings or awards, policies,
certificates, codes, licenses, permits, approvals, guidelines,
voluntary restraints, inspection reports, or any provisions of such
laws, including general principles of common law and equity and the
requirements of all Governmental Bodies, binding or affecting the
Person referred to in the context in which such word is used; and
“Law” means any one of them.
Lien means any lien, pledge, claim, charge, security
interest, mortgage, charter option, title retention agreement,
security interest of any nature, adverse claim against title, title
exception, title reservation, easement, right of occupation, any
matter capable of registration against title, option, right of
pre-emption, privilege or other encumbrance, or any contract to
create any of the foregoing or other similar rights of any third
Person of any nature whatsoever, whether recorded, secret, state,
maritime or otherwise.
Partnership Agreement
means the Second Amended and
Restated Limited Partnership Agreement of the Partnership dated
January 14, 2004.
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Permitted Restricted
Businesses means the
ownership and/or operation of Barge Assets in a Restricted Business
acquired by a Restricted Party after the Closing Date if such Barge
Assets are acquired as part of a business in a larger transaction
in which the gross revenue generated by such Barge Assets
represents less than 50% of the gross revenue of the assets or
business acquired.
Person means any individual, firm, corporation,
partnership, limited liability company, joint venture, association,
trust, unincorporated organization, government or agency or
subdivision thereof or any other entity.
Purchase Price
means the purchase price set forth
in Section 2.2, as it may be adjusted pursuant to
Section 5.19.
Release means any spill, effluent, emission, leaking,
pumping, pouring, emptying, escaping, dumping, injection, deposit,
disposal, discharge, dispersal, leaching, abandoning, adding, or
migration into the indoor or outdoor environment, or into or out of
any property, facility or vessel.
Remedial Action
means all actions, including,
without limitation, any capital expenditures required by any
Governmental Body or required under or taken pursuant to any
Environmental Law or voluntarily taken to (a) clean up,
remove, treat, contain, assess, monitor or evaluate, or in any
other way, ameliorate or address any Release or threat of Release
of any Hazardous Material; (b) minimize the further Release of
any Hazardous Material so it does not endanger or threaten to
endanger the public or employee health or welfare or the indoor or
outdoor environment; (c) perform pre-remedial studies and
investigations or post-remedial monitoring and care pertaining to
or relating to a Release or threatened Release of any Hazardous
Material; or (d) bring any party, property, facility or vessel
into compliance with any Environmental Law.
Restricted Business
means the coastal marine
transportation of petroleum products by barges subject to the Jones
Act (46 U.S.C. App. 883); provided, however, that the
Restricted Business does not include (a) bunkering operations,
(b) the intra-harbor transportation of petroleum products,
(c) the coastal marine transportation of petroleum products
subject to the Jones Act (46 U.S.C. App. 883) to Chevron
Corporation or its Affiliates using barges with a capacity of
greater than 150,000 barrels per barge, (d) Permitted
Restricted Businesses, (e) the use by Delta Western of
unaffiliated third party providers of refined petroleum marine
transportation services or (f) the operation by Delta Western
of tugs and/or tank barges of less than 15,000 bbls. to deliver
petroleum products of Delta Western in Alaska.
Restricted Territory
means (a) the waters along the
coasts of Alaska, Washington, Oregon, California and Western
Canada, (b) the waters along the East Coast of the United
States and Eastern Canada, (c) the Gulf of Mexico,
(d) the Great Lakes, and (e) the waters around Puerto
Rico.
Seller Indemnified
Party means Seller and
its Affiliates and each of their respective officers, directors,
employees, agents and counsel.
Shelf Prospectus
means the prospectus contained in
the Partnership’s Registration
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Statement on Form S-3 (333-122668), as
amended or supplemented.
Taxes means any and all federal, state, local, foreign
and other taxes or other assessments imposed by a Governmental
Body, including, without limitation, all net income, gross income,
gross receipts, sales, use, ad valorem, transfer, franchise,
profits, profit share, license, lease, service, service use, value
added, withholding, payroll, employment, excise, estimated
severance, stamp, occupation, premium, property, windfall profits,
or other taxes of any kind whatsoever, together with any interests,
penalties, additions to tax, fines or other additional amounts
imposed thereon or related thereto, and the term “ Tax
” means any one of the foregoing Taxes.
Tax Returns
means all returns, declarations,
reports, statements and other documents of, relating to, or
required to be filed in respect of, any and all Taxes.
Threshold Amount
means $250,000.
“ to the knowledge of
Seller ” and phrases with similar wording, when used in
this Agreement to qualify a representation or warranty in
Article III, means the knowledge, after reasonable
investigation, of Seller and each Person identified on
Exhibit A .
Working Capital of Sea
Coast means (a) the
sum of cash and cash equivalents, trade accounts receivable
(including, without limitation, trade accounts receivable from
Delta Western), other non-affiliate related receivables, unbilled
services, prepaid expenses and inventory, minus (b) trade
accounts payable, accrued operating expenses and other
non-affiliate related payables, as determined in accordance with
generally accepted accounting principles applied consistently with
the application thereof in the Financial Statements and in
accordance with this Agreement, minus (c) deferred
revenue.
ARTICLE II
PURCHASE AND SALE OF MEMBERSHIP INTERESTS; CLOSING
Section 2.1
Purchase and
Sale of Membership Interests . Upon the terms and
subject to the conditions of this Agreement, and on the basis of
the representations and warranties hereinafter set forth, at the
Closing, Seller shall sell, transfer, convey, assign and deliver to
Buyer, and Buyer shall acquire and purchase from Seller, the
Membership Interests.
Section 2.2
Purchase
Price . The aggregate
purchase price payable to Seller for the Membership Interests shall
consist of:
(a)
$77,000,000 cash
to be paid at the Closing by wire transfer to the account or
accounts designated in writing by Seller, subject to adjustment as
provided in Section 2.4 and Section 5.19; and
(b)
the issuance and
delivery of 125,000 Common Units to Seller at the Closing (the
“Closing Common Units”).
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Section 2.3
Closing
.
(a)
The closing of
the transactions contemplated hereby (the “Closing”)
shall take place at the offices of Marine Resources
Group, Inc., 1177 Fairview Ave N., Seattle, WA 98040, at
8:00 a.m., Seattle time, on the later of
(1) October 21, 2005 or (2) the date that is three
business days following the first day on which all of the
conditions set forth in Article VII have been satisfied or
waived (other than conditions that by their nature are to be
satisfied at the Closing, but subject to the fulfillment or waiver
of those conditions), or at such other time and place as the
parties may agree. The date on which the Closing is held is
referred to in this Agreement as the “Closing
Date.”
(b)
On the Closing
Date, Buyer shall wire the cash portion of the Purchase Price and
deliver certificates representing the Closing Common Units to U.S.
Bank National Association, as escrow agent (“Escrow
Agent”), under the terms of an escrow agreement, the form of
which is attached hereto as Exhibit B . After the
Purchase Price has been delivered to the Escrow Agent, Sea Coast
shall merge with and into Sea Coast LLC, which shall continue as
the surviving limited liability company of the merger (the
“Pre-Closing Merger”). After the Pre-Closing
Merger has become effective, the Escrow Agent shall distribute the
Purchase Price to Seller.
Section 2.4
Post-Closing
Adjustments .
(a)
As soon as
practicable after the Closing, and in any event within ninety days
following the Closing Date, Buyer shall deliver to Seller a
statement of Working Capital of Sea Coast as of the Closing Date,
accompanied by a certificate of the chief financial officer of
Buyer to the effect that such statement has been prepared on a
basis consistent with the terms of this Agreement and the Closing
Date Balance Sheet. Within twenty days following the delivery
of such statement, Seller shall notify Buyer if Seller disagrees
with such determination of the Working Capital of Sea Coast as of
the Closing Date. If Seller does not so notify Buyer, Seller
shall be deemed to have accepted such determination. If
Seller does so notify Buyer that Seller disagrees with such
determination, and Seller and Buyer are thereafter unable to agree
within thirty days upon the amount of the Working Capital of Sea
Coast as of the Closing Date, such amount shall be determined by an
independent accounting firm selected by Buyer from a list of three
nationally recognized independent accounting firms provided by
Seller. The determination by such accounting firm shall be
final and binding on Buyer and Seller, and the fees and expenses of
such accounting firm shall be borne equally by Seller, on the one
hand, and Buyer, on the other hand. If the value of the
Working Capital of Sea Coast as of the Closing Date, as finally
determined pursuant to this Section 2.4, is less than
$800,000, then Seller shall promptly pay Buyer the difference
between $800,000 and the Working Capital of Sea Coast as of the
Closing Date by wire transfer to an account designated in writing
by Buyer or by a bank cashier’s check made payable to Buyer,
as specified by Buyer. If the value of the Working Capital of Sea
Coast as of the Closing Date, as finally determined pursuant to
this Section 2.4, is greater than $800,000, then Buyer shall
promptly pay Seller the difference between the Working Capital of
Sea Coast as of the Closing Date and $800,000 by wire transfer to
an account designated in writing by Seller or by a bank
cashier’s check made payable to Seller, as specified by
Seller.
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(b)
If after 120 days
following the Closing Date, Buyer is unable to collect Accounts
Receivable in an amount at least equal to the Closing Accounts
Receivable Target, Seller shall promptly refund to Buyer the
difference between the Closing Accounts Receivable Target and the
Accounts Receivable actually collected by wire transfer to an
account designated in writing by Buyer or by a bank cashier’s
check made payable to Buyer, as specified by Buyer. If after
120 days following the Closing Date Buyer collects Accounts
Receivable in an amount in excess of the Closing Accounts
Receivable Target, Buyer shall promptly pay to Seller the
difference between the Accounts Receivable actually collected and
the Closing Accounts Receivable Target, by wire transfer to an
account designated in writing by Seller or by a bank
cashier’s check made payable to Seller, as specified by
Seller. Buyer shall have no obligation to continue efforts to
collect the Accounts Receivable after 120 days following the
Closing Date, and any uncollected Accounts Receivable as of such
date shall be conveyed and assigned to Seller. Any amounts
received by Buyer in payment of an account shall be applied to the
oldest outstanding balances for that account, unless otherwise
specified by the party making such payment.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER AND SALTCHUK
Seller (and with respect to
Section 3.26, Saltchuk) represents and warrants to Buyer and
the Partnership as follows:
Section 3.1
Corporate
Status and Good Standing; Citizenship .
(a)
Each of Seller
and Sea Coast is a corporation duly organized, validly existing and
in good standing under the laws of the State of Washington, with
full corporate power and authority under its articles of
incorporation and bylaws to own and lease its properties and to
conduct business as the same exists on the date hereof and on the
Closing Date. Sea Coast is duly qualified to do business as a
foreign corporation in the jurisdictions set forth on
Schedule 3.1 . Sea Coast is duly qualified to do
business as a foreign corporation in all jurisdictions in which the
nature of its business requires such qualification and the failure
to do so would have an adverse effect on Sea Coast.
(b)
At or prior to
the Closing Date, neither Seller nor Sea Coast has taken any action
that would impair or otherwise affect the due organization, valid
existence or good standing under the laws of the State of Delaware
of Sea Coast LLC.
(c)
Each of Seller
and Sea Coast is, and as of the Closing Sea Coast LLC will be, a
citizen of the United States within the meaning of Section 2
of the Shipping Act, 1916, as amended, for the purpose of operating
the Vessels in the coastwise trade of the United
States.
Section 3.2
Authorization
.
(a)
Seller has full
corporate power and authority under its articles of incorporation
and bylaws, and its board of directors and stockholders have taken
all necessary action to authorize it, to execute and deliver this
Agreement and the exhibits and schedules hereto, to consummate the
transactions contemplated herein and therein and to take all
actions
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required to be
taken by it pursuant to the provisions hereof and thereof. A
certified copy of resolutions duly adopted by the board of
directors and authorizing and approving the execution and delivery
of this Agreement, including the exhibits and schedules hereto, and
the consummation of the transactions contemplated herein and
therein, is attached as Schedule 3.2 . There is
no action required by the stockholders of Seller to authorize or
approve the execution and delivery of this Agreement, including the
exhibits and schedules hereto, or the consummation of the
transactions contemplated herein or therein.
(b)
Each of this
Agreement and the exhibits and schedules hereto constitutes the
valid and binding obligation of Seller enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting
creditors’ rights generally and to the principles of equity
(whether enforcement is sought in a proceeding in equity or at
law).
Section 3.3
Capitalization; Title to
Shares; Title to Membership Interests .
(a)
The authorized
equity securities of Sea Coast consist of 100,000 shares of common
stock, par value $1.00 per share, of which 20,000 shares are issued
and outstanding and constitute the Shares. Seller owns
beneficially and of record all of the Shares and at the Closing
will own beneficially and of record all of the Membership
Interests, in each case free and clear of all Liens. Such
Shares are not and at Closing the Membership Interests will not be
subject to any agreements or understandings with respect to the
voting or transfer of any of the Shares or Membership Interests
(except the transfer of Membership Interests contemplated by this
Agreement and restrictions under applicable federal and state
securities laws). The Shares have been duly authorized and
validly issued and are fully paid and nonassessable. At
Closing, the Membership Interests will be duly authorized and
validly issued and will be fully paid and nonassessable.
Seller has full legal right to sell, assign, convey and transfer
the Shares, and at Closing will have full right to sell, assign,
convey and transfer the Membership Interests, to Buyer and will,
upon delivery of a certificate or certificates representing such
Membership Interests to Buyer pursuant to the terms hereof,
transfer to Buyer title to such Membership Interests, free and
clear of any Liens.
(b)
There are no
outstanding subscriptions, options, convertible securities,
warrants or calls or preemptive rights of any kind issued or
granted by, or binding upon, Sea Coast to purchase or otherwise
acquire or to sell or otherwise dispose of any security of or
equity interest in Sea Coast. At Closing, there will be no
outstanding subscriptions, options, convertible securities,
warrants or calls or preemptive rights of any kind issued or
granted by, or binding upon, Sea Coast LLC to purchase or otherwise
acquire or to sell or otherwise dispose of any security of or
equity interest in Sea Coast LLC, except the transfer of Membership
Interests contemplated by this Agreement.
(c)
Sea Coast does
not own or control and at Closing Sea Coast LLC will not own or
control, in either case directly or indirectly, any interest in any
Person and is not a participant in any partnership, joint venture
or similar arrangement.
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Section 3.4
Non-Contravention
. Except as
set forth on Schedule 3.4 , neither the execution and
delivery of this Agreement or any documents executed in connection
herewith, nor the consummation of the transactions contemplated
herein or therein, does or shall:
(a)
violate, conflict
with, result in a breach of or require notice or consent
under (i) any Law, (ii) the certificate or articles of
incorporation, certificate of formation, bylaws, limited liability
company agreement, board, stockholder or member resolutions or
other governing documents of Seller, Sea Coast or, at the Closing,
Sea Coast LLC or (iii) any provision of any agreement or
instrument to which Seller or Sea Coast is a party;
(b)
contravene,
conflict with, or result in a violation of, or give any
Governmental Body or other Person the right to challenge any of
such transactions or to exercise any remedy or obtain any relief
under, any Law, to which Seller or Sea Coast, or any of the assets
owned or used by Sea Coast, are bound;
(c)
contravene,
conflict with, or result in a violation of any of the terms or
requirements of, or give any Governmental Body the right to revoke,
withdraw, suspend, cancel, terminate, or modify, any license,
permit, consent, approval, authorization, qualification,
certificate, registration or order of any Governmental Body that is
held by Seller or Sea Coast or that otherwise relates to the
business of, or any of the assets owned or used by, Sea
Coast;
(d)
except as
required by the HSR Act, otherwise require notice to or consent of
any Governmental Body;
(e)
result in the
imposition or creation of any Lien upon or with respect to the
Shares, the Membership Interests or any assets of Sea Coast or Sea
Coast LLC; or
(f)
result in the
acceleration or mandatory prepayment of any indebtedness, or any
guaranty of Sea Coast or afford any holder of any indebtedness, or
any beneficiary of any guaranty the right to require Sea Coast to
redeem, purchase or otherwise acquire, reacquire or repay any
indebtedness, or to perform any guaranty.
Section 3.5
Validity
. There is
no investigation, claim, proceeding or litigation of any type
pending or, to the knowledge of Seller, threatened to which Seller
is a party that (i) questions or involves the validity or
enforceability of any of Seller’s obligations under this
Agreement or any of the exhibits hereto or (ii) seeks (or
reasonably might be expected to seek) (A) to prevent or delay
the consummation by Seller of the transactions contemplated by this
Agreement or (B) damages in connection with any such
consummation.
Section 3.6
Broker
Involvement . Seller has not hired,
retained or dealt with any broker or finder in connection with the
transactions contemplated by this Agreement, except as set forth on
Schedule 3.6 .
Section 3.7
Litigation
. Except as
set forth on Schedule 3.7 , there is no investigation,
claim, proceeding or litigation of any type pending or, to the
knowledge of Seller, threatened to which Sea Coast is or may become
a party or with respect to which any of Sea Coast’s
properties or assets could become subject. To the knowledge
of Seller, Schedule 3.7 sets
9
forth each judgment, order,
writ, injunction or decree of any Governmental Body or arbitral
tribunal against or involving Sea Coast. Except as set
forth on Schedule 3.7 , there is no judgment, order,
writ, injunction or decree of any Governmental Body or arbitral
tribunal against or involving Sea Coast that might have a material
adverse effect on Sea Coast, Buyer or any of Buyer’s
subsidiaries.
Section 3.8
Title to
Assets . Except as set forth
on Schedule 3.8 , Sea Coast has good and marketable
title to all of its owned assets that are used in its business,
free and clear of any and all Liens.
Section 3.9
Continuity
Prior to the Closing Date . Except as set forth
on Schedule 3.9 , from January 1, 2005, to and
including the Closing Date, Sea Coast has not conducted its
business other than in the usual and customary manner and in the
ordinary course of business, consistent with historical practice,
and there has not been:
(a)
any change in its
authorized capital stock or in any of its outstanding capital stock
or any grant, issuance or sale of any derivative security with
respect to its capital stock;
(b)
any sale, lease,
distribution, transfer, mortgage, pledge or subjection to Lien of
assets, except sales of inventory and obsolete or surplus equipment
in the ordinary and usual course of business;
(c)
any transaction
by Sea Coast not in the ordinary and usual course of
business;
(d)
any damage to or
destruction, loss or equipment failure related to any assets owned
or used by Sea Coast, whether or not covered by insurance,
requiring or that may require expenditures in excess of $75,000 in
order to return such asset to its condition prior to the happening
of such event;
(e)
a material
modification to the terms of any agreement of Sea Coast with its
vendors, suppliers or customers, the early termination or
threatened termination of any material contract or relationship of
Sea Coast with any vendor, supplier or customer or the non-renewal
or threatened non-renewal of any material contract or relationship
of Sea Coast with any vendor, supplier or customer;
(f)
any incurrence by
it of any indebtedness for borrowed money or guaranty or any
commitment to incur the same;
(g)
any change in
accounting methods or principles or the application thereof or any
change in Sea Coast’s policies or practices with respect to
items affecting working capital;
(h)
any delay or
reduction in capital expenditures in contemplation of this
Agreement or otherwise, or any failure to continue to make capital
expenditures in the ordinary course of business consistent with
past practice;
10
(i)
any acceleration
of shipments, sales or orders or other similar action in
contemplation of this Agreement or otherwise not in the ordinary
course of business consistent with past practice;
(j)
any bonus
payments, salary increases, commission increases or modifications,
the execution of or amendment of any employment agreement,
severance arrangement, or consulting arrangement or Plan, except as
contemplated in Section 5.15 or set forth on
Schedule 3.9 ;
(k)
any waiver of any
rights that, singly or in the aggregate, are material to Sea
Coast’s business, its assets or the financial condition or
results of operation of Sea Coast;
(l)
any labor strikes
or disruptions, union organizational activities or other similar
occurrence; or
(m)
any contract or
commitment to do or cause to be done any of the
foregoing.
Section 3.10
Contracts and
Commitments .
Schedule 3.10 lists all existing agreements,
commitments, contracts, undertakings or understandings (A) to
which Sea Coast is a party as of August 15, 2005 or
(B) which relate to any of its properties or assets,
including, but not limited to, trademark, trade name or patent
license agreements, service agreements, leases, charters, contracts
of affreightment, purchase or sale agreements, supply agreements,
distribution or distributor agreements, purchase orders, customer
orders and equipment rental agreements that, in the case of either
clause (A) or (B), are either material to Sea Coast or involve
consideration with a value of $75,000 or more. Sea Coast is
not in breach of or default under any agreement, lease, contract or
commitment listed or of a type required to be listed on
Schedule 3.10 (collectively, the
“Agreements”). Each Agreement is valid, binding
and in full force and effect and is an enforceable agreement of Sea
Coast and, to the knowledge of Seller, the other parties
thereto. To Seller’s knowledge, there has not occurred
any breach or default under any Agreement on the part of the other
parties thereto, and no event has occurred which with the giving of
notice or the lapse of time, or both, would constitute a default
under any Agreement. There is no dispute between the parties
to any Agreement as to the interpretation thereof or as to whether
any party is in breach or default thereunder, and no party to any
Agreement has indicated to Sea Coast its intention to terminate any
Agreement. Sea Coast is not a party to any covenant or
obligation of any nature limiting the freedom of Sea Coast to
compete in any line of business and binding on Buyer after the
Closing. Complete and correct copies of all Agreements listed
or referred to in Schedule 3.10 have either been made
available to Buyer or, if not provided because of pending antitrust
matters or confidentiality requirements, shall be provided as soon
as practicable to the extent permitted by the antitrust authorities
or the counterparties to such contracts, as applicable.
Section 3.11
Trademarks,
Trade Names and Intellectual Property .
Schedule 3.11 contains an accurate and complete list of
(a) all registered United States and foreign trademarks,
servicemarks, trade names, fictitious names, brand names, business
names, copyrights, designs and logos owned or used by Sea Coast in
connection with its business, and all registrations thereof,
(b) all unregistered United States and foreign trademarks,
servicemarks,
11
trade names, fictitious
names and logos used by Sea Coast in connection with its business,
and (c) all patents (including all reissues, divisions,
continuations and extensions thereof), pending patent applications,
patent rights, and invention memoranda owned or used by Sea Coast
in connection with its business (collectively, including all rights
to any of the foregoing, the “Intellectual
Property”). Sea Coast has the right to use all
Intellectual Property in the conduct of its business as it is
currently being conducted and the transactions contemplated by this
Agreement will not have the effect of terminating any such
right. There is no pending or, to the knowledge of Seller,
threatened action or claim that would impair any such
right.
Section 3.12
Financial
Statements; Budget.
(a)
The unaudited
financial statements of Sea Coast as of and for the three years
ended December 31, 2004 (including the related notes) (the
“Unaudited Annual Financial Statements”) present
fairly, in all material respects, the financial condition of Sea
Coast at the respective dates of the balance sheets included
therein and the results of operations, cash flows and
stockholders’ equity of Sea Coast for the respective periods
set forth therein and have been prepared in accordance with
generally accepted accounting principles in the United States
consistently applied (“GAAP”), except for the absence
of footnote disclosure. A copy of the Unaudited Annual
Financial Statements is attached hereto as
Schedule 3.12(a) .
(b)
The unaudited
financial statements of Sea Coast as of and for the six months
ended June 30, 2005 (including the related notes) (the
“Unaudited Interim Financial Statements”) present
fairly, in all material respects, the financial condition of Sea
Coast at the respective dates of the balance sheets included
therein and the results of operations, cash flows and
stockholders’ equity of Sea Coast for the respective periods
set forth therein and have been prepared in accordance with GAAP,
subject to normal recurring year end adjustments (the effect of
which will not, individually or in the aggregate, be materially
adverse) and the absence of footnote disclosure. A copy of
the Unaudited Interim Financial Statements is attached hereto as
Schedule 3.12(b) .
(c)
As of the Closing
Date, the audited financial statements of Sea Coast as of and for
the three years ended December 31, 2004 (including the related
notes) (the “Audited Financial Statements”) present
fairly, in all material respects, the financial condition of Sea
Coast at the respective dates of the balance sheets included
therein and the results of operations, cash flows and
stockholders’ equity of Sea Coast for the respective periods
set forth therein and have been prepared in accordance with
GAAP. As of the Closing Date, the unaudited financial
statements of Sea Coast as of and for the three and six months
ended June 30, 2005 (including the related notes) (the
“SAS 100 Reviewed Financial Statements” and, together
with the Audited Financial Statements, the Unaudited Annual
Financial Statements and the Unaudited Interim Financial
Statements, the “Financial Statements”) present fairly,
in all material respects, the financial condition of Sea Coast at
the respective dates of the balance sheets included therein and the
results of operations, cash flows and stockholders’ equity of
Sea Coast for the respective periods set forth therein and have
been prepared in accordance with GAAP. As of the Closing
Date, the Audited Financial Statements will
12
be consistent in
all material respects with the Unaudited Annual Financial
Statements and be free of a qualified opinion. As of the
Closing Date, the SAS 100 Reviewed Financial Statements will be
consistent in all material respects with the Unaudited Interim
Financial Statements. Neither the footnotes to the Audited
Financial Statements nor the footnotes to the SAS 100 Reviewed
Financial Statements will disclose any fact or circumstance (other
than facts or circumstances reflected on the schedules to this
Section 3.12) that could reasonably be expected to materially
and adversely affect the business, prospects, results of
operations, assets or financial condition of Sea Coast.
(d)
Sea Coast’s
fiscal 2005 budget and capital budget previously furnished by Sea
Coast to Buyer (i) are true and complete copies of Sea
Coast’s most recent internal budgets for fiscal 2005 and
(ii) were prepared by management of Sea Coast in good faith
and on a reasonable basis.
(e)
Schedule 3.12(e)
contains a
schedule of (i) any liability of Sea Coast (A) for
borrowed money or arising out of any extension of credit to or for
the account of Sea Coast, or (B) evidenced by notes, bonds,
debentures or similar instruments of Sea Coast and (ii) any
liability secured by any Lien upon any property or other assets of
Sea Coast. Schedule 3.12(e) also contains a
schedule of any liability, contingent or otherwise, of Sea
Coast guaranteeing or otherwise becoming liable for any obligation
of any other Person in any manner, whether directly or
indirectly.
(f)
Schedule 3.12(f)
reflects all
intercompany transactions between Sea Coast and Seller or any
Affiliates thereof since December 31, 2004.
Section 3.13
Bank
Relations; Powers of Attorney .
Schedule 3.13 sets forth: (a) the name of each
financial institution in which Sea Coast has borrowing or
investment arrangements, deposit or checking accounts or safe
deposit boxes; (b) the types of those arrangements and
accounts, including, as applicable, names in which accounts or
boxes are held, the account or box numbers and the name of each
Person authorized to draw thereon or have access thereto; and
(c) the name of each Person holding a general or special power
of attorney from Sea Coast and a description of the terms of each
such power.
Section 3.14
Condition of
Assets; Eligibility for Coastwise Trade.
(a)
Schedule 3.14(a)(1)
sets forth a list
of all material assets of Sea Coast other than the Vessels, which
are listed on Schedule 3.14(b) . Except as set
forth in Schedule 3.14(a)(2) , all tangible assets of
Sea Coast are in good, serviceable condition, subject only to
normal maintenance requirements and normal wear and tear reasonably
expected in the ordinary course of business. Except as set forth on
Schedule 3.14(a)(3) , there are no material assets
(whether or not owned by Sea Coast) not listed on
Schedule 3.14(a)(1) or
Schedule 3.14(b) that are used in or necessary
for the operation of the business of Sea Coast as currently
conducted.
(b)
Schedule 3.14(b)
sets forth a list
of each vessel (including vessels under construction) (the
“Vessels”) of Sea Coast, with an indication (as
applicable) of vessel type, year built, American Bureau of Shipping
Classification (including any recommendations), flag, capacity
(and/or horsepower as applicable), associated Liens, gross tonnage
and OPA 90 phase-out dates and date of last drydocking.
13
(c)
Except as set
forth in Schedule 3.14(c) , each of the Vessels is
seaworthy in all material respects. Each such Vessel is
equipped with the machinery, engines, instruments, rigging,
anchors, chains, cables, tackle, apparel, accessories, equipment,
radio installation and navigational equipment, inventory, spare
parts and all other appurtenances necessary for the operation of
such Vessel in the ordinary course of business consistent with past
practices. Except as set forth on
Schedule 3.14(c) , since the Vessels’ last
drydocking, no Vessel has been grounded, stranded or suffered any
other occurrence or casualty that could have caused or actually did
cause any damage to such Vessel.
(d)
Except as set
forth on Schedule 3.14(d) , each of the Vessels is duly
documented in Sea Coast’s name under the laws and flag of the
United States of America and satisfies the requirements for
coastwise documentation, has not been “sold foreign”
within the meaning of the Jones Act (46 U.S.C. App. 883) and all
coastwise licenses, permits, certificates, registrations, approvals
and other authorizations necessary to operate the Vessels as
currently operated are valid and current.
(e)
Except as set
forth in Schedule 3.14(e) , each Vessel has a valid,
current and unextended U.S. Coast Guard Inspection Certificate,
where applicable, and all other licenses, permits, certificates,
registrations, approvals and other authorizations (including
Certificates of Financial Responsibility (Water Pollution)) that
are required by applicable Law. There are no outstanding
CG-835 certificates or Captain of the Port orders with respect to
the Vessels or the operation thereof.
Section 3.15
Absence of
Undisclosed Liabilities . Except as set forth
in Schedule 3.15 , Sea Coast has no liability (whether
absolute, accrued, contingent, unliquidated or otherwise, whether
due or to become due), other than liabilities (i) reflected in
the Financial Statements, (ii) arising under Agreements
described in Schedule 3.10 (Contracts and Commitments)
or contracts entered in the ordinary course of business and
consistent with past practice that are not required to be disclosed
therein due to dollar thresholds, (iii) arising out of matters
reflected in Schedule 3.7 (Litigation) or
(iv) trade accounts payable incurred after March 31, 2005
in the ordinary course of business consistent with past
practice.
(a)
Sea Coast does
not currently own, and except as set forth on
Schedule 3.16 has never previously owned, any real
property. Schedule 3.16 sets forth a list and
summary description (including property location, parties and
annual rental payments) of all leases, subleases and other
agreements under which Sea Coast is lessor or lessee of, or uses or
occupies or allows the use or occupancy of, any real
property. All such leases, subleases and other agreements are
valid and subsisting and in full force and effect.
(b)
Except as set
forth on Schedule 3.16(1) , the real property listed on
Schedule 3.16 (i) has full and free access to and
from public highways, streets and roads and there is no proceeding
pending or threatened that could result in the termination of or
material limitations on such access and (ii) is connected to
and serviced by utilities and public services, all of which are
adequate for the use of the real property listed thereon as the
business of Sea Coast is currently conducted. Except as set
forth on Schedule 3.16(2) , Sea Coast has
not
14
experienced
during the three years preceding the date hereof any material
interruption in the delivery of adequate quantities of any
utilities (including, without limitation, electricity, natural gas,
potable water, water for cooling or similar purposes and fuel oil)
or other public services (including, without limitation, sanitary
and industrial sewer service) required in the operation of the
business of Sea Coast during such period and, to the knowledge of
Seller no such material interruption is threatened.
Section 3.17
Accounts
Receivable
. All accounts receivable of Sea Coast that are or will be
reflected in the Financial Statements and that will be reflected in
the Closing Date Balance Sheet represent sales actually made in the
ordinary course of business and are collectible, less the reserve
for doubtful accounts included therein.
Section 3.18
Inventory
.
Schedule 3.18 sets forth the location of all inventory
(including spare parts) related to the Vessels that is not aboard
such Vessels. Sea Coast has no inventory for sale in the
ordinary course of business. The value of all inventory of
Sea Coast has been recorded on the books of Sea Coast at the lower
of cost or market in accordance with GAAP.
Section 3.19
Employees and
Related Matters.
Schedule 3.19 is a complete list of all current
employees of Sea Coast, listing the title or position held, base
salary, any commissions or other cash compensation, including
bonuses, paid or payable, and the terms of any written or oral
employment agreement (including a copy of any such written
agreement and a description of any such oral agreement) with Sea
Coast or any Affiliate thereof. Sea Coast has no employees
covered by a collective bargaining agreement. There are no
facts or circumstances that have resulted or could result in a
claim for age discrimination against Sea Coast.
(a)
Schedule 3.20
contains a
complete list of each compensation or benefit plan, agreement,
program or policy (whether written or oral, formal or informal)
sponsored, maintained or contributed to by Sea Coast for the
benefit of any of its present or former directors, officers,
employees, agents, consultants or other similar representatives,
including, but not limited to, any “employee benefit
plan” as defined in section 3(3) of ERISA, other
than employment agreements or compensation practices described in
Section 3.19 above (the foregoing are hereinafter collectively
referred to as “Plans”). Except as set forth in
Schedule 3.20 , Sea Coast is not subject to any legal,
contractual, equitable or other obligation to enter into any new
Plan or to modify or change any existing Plan.
(b)
With respect to
each Plan, Sea Coast has provided to Buyer a true and correct copy
of each of the following, as applicable:
(i)
the current plan
document (including all amendments adopted since the most recent
restatement) and its most recently prepared summary plan
description and all summaries of material modifications prepared
since the most recent summary plan description, and all material
employee communications relating to such plan;
15
(ii)
annual reports or
information returns, including financial statements, for the last
three years;
(iii)
all contracts
relating to any plan with respect to which Sea Coast may have any
liability, including, without limitation, each related trust
agreement, insurance contract, service provider contract,
subscription or participation agreement, or investment management
agreement (including all amendments to each such document);
and
(iv)
the most recent
IRS determination letter or other opinion letter with respect to
the qualified status of such Plan under Code
Section 401(a) or the exempt status of a related trust
under Code Section 501(a) or 501(c)(9).
(c)
Each Plan
intended to be qualified under Section 401(a) of the Code
is and has been so qualified in form and operation. Each Plan
is and has been maintained in material compliance with its terms
and the provisions of all applicable laws, rules and
regulations, including, without limitation, ERISA and the
Code. Other than claims for benefits in the ordinary course,
there is no claim pending, or, to the Seller’s or Sea
Coast’s knowledge, threatened, involving any Plan by any
Person against such Plan. No Plan is subject to ongoing
audit, investigation or other administrative proceeding of the
Internal Revenue Service, the Department of Labor or any other
governmental agency, and no Plan is the subject of any pending
application for administrative relief under any voluntary
compliance program of the Internal Revenue Service, the Department
of Labor or any other governmental entity. There has been no
transaction that is prohibited under Section 4975 of the Code
or Section 406 of ERISA and not exempt under Section 4975
of the Code or Section 408 of ERISA, respectively, in relation
to any Plans. Schedule 3.20 contains a list of
each Plan which provides nonqualified deferred compensation and may
be subject to Section 409A of the Code, and each such Plan is
either exempt from Section 409A of the Code under current IRS
guidance or has been operated in good faith compliance with
Section 409A of the Code and the IRS guidance issued
thereunder.
(d)
Sea Coast does
not sponsor or maintain an “employee pension benefit
plan” subject to Title IV of ERISA or the minimum funding
requirements of section 412 of the Code. ERISA
Affiliates do sponsor or maintain “employee pension benefit
plans” subject to Title IV of ERISA or the minimum funding
requirements of section 412 of the Code. There are no
facts that have resulted or could result in a liability (whether or
not asserted as of the date hereof) to Sea Coast pursuant to Title
IV of ERISA. No ERISA Affiliate has terminated, and there is
no intention on the part of an ERISA Affiliate of terminating, any
employee pension benefit plan subject to Title IV of ERISA that is
sponsored, maintained or contributed to by it on or before
Closing. The execution of this Agreement and the consummation
of the transactions contemplated by this Agreement will not be a
“reportable event” with respect to any pension plan
pursuant to Section 4043 of ERISA, other than a reportable
event exempt from reporting to the Pension Benefit Guaranty
Corporation. There has been no partial or complete withdrawal
under any of the multiemployer plans (as defined in
Section 3(37) of ERISA) that are contributed to by ERISA
Affiliates and there are no circumstances which would lead to such
a partial or complete withdrawal or the assertion of any withdrawal
liability against any ERISA Affiliate by the trustees of such a
multiemployer
16
pension
plan. No multiemployer plan contributed to by an ERISA
Affiliate is in insolvency or reorganization.
(e)
No Plan provides
medical, surgical, hospitalization, death or similar benefits
(whether or not insured) for employees or former employees of Sea
Coast or any Affiliate for periods extending beyond their
retirement date or other termination of service other than
(i) coverage mandated by applicable law, (ii) death
benefits under any “pension plan” or
(iii) benefits the full cost of which is borne by the current
or former employee (or his beneficiary).
(f)
Except as set
forth on Schedule 3.20 , the execution and delivery of
this Agreement and the consummation of the transactions
contemplated by this Agreement will not (either alone or upon the
occurrence of any subsequent employment-related event)
(i) result in any payment becoming due to any employee, former
employee or group of employees or former employees, of Sea Coast or
any of its Affiliates, (ii) increase any benefits otherwise
payable under any Plan, (iii) result in the acceleration of
the time of payment or vesting of any such benefits,
(iv) result in the incurrence or acceleration of any other
obligation related to the Plans or to any employee, former employee
or group of employees or former employees or (v) cause any
payments to be nondeductible under Section 280G of the
Code.
(g)
Except as set
forth on Schedule 3.20 , Sea Coast has the right to, in
any manner, and without the consent of any employee, beneficiary or
dependent, employees’ organization or other Person,
terminate, modify or amend any Plan (or their participation in any
such Plan) at any time sponsored, maintained or contributed to by
Sea Coast, effective as of any date on or after the Closing except
to the extent that any retroactive amendment would be prohibited by
Section 204(g) of ERISA, would adversely affect an
accrued benefit or a previously granted award under any such plan
not subject to Section 204(g) of ERISA or would be
otherwise prohibited by applicable Law.
(h)
Except as set
forth on Schedule 3.20 , all individuals who perform
(or have performed within the last six years) compensatory services
for Sea Coast in any capacity have been properly classified for
purposes of employment and withholding taxes and eligibility to
participate in and coverage under any Plan.
Section 3.21
Compliance
With Law . Except as set forth
on Schedule 3.21 , Sea Coast is not in violation, in
any material respect, of any provision of any Law applicable to it,
including, without limitation, those governing the registration,
ownership and operation of vessels documented to engage in the
coastwise trade of the United States, and Sea Coast has not
received notice of any alleged violation of any such Law.
Without limiting the generality of the foregoing, (a) Sea
Coast has not made any offer, payment, promise to pay or
authorization of the payment of any money, or any offer, gift,
promise to give or authorization of the giving of anything of
value, directly or indirectly, to or for the use or benefit of any
official or employee of any Governmental Body or to or for the use
or benefit of any political party, official or candidate unless
such offer, payment, gift, promise or authorization is authorized
by the written laws or regulations of the Governmental Body and
(b) Sea Coast is familiar with and has complied with the
United States Foreign Corrupt Practices Act, 15 U.S.C. Sections
78dd-1 and 78dd-2.
17
(a)
Except as
described in Schedule 3.22 , Sea Coast has been and is
in material compliance with all Environmental Laws.
(b)
Sea Coast has
obtained all licenses, permits, approvals, consents, certificates,
registrations and other authorizations under Environmental Laws
(the “Environmental Permits”) required for the
operation of its business, all of which are listed in
Schedule 3.22 . Each Environmental Permit is
valid and in good standing, and any renewal application required to
keep each Environmental Permit in effect has been timely filed, and
Sea Coast is not in default or breach of any Environmental Permit,
and no proceeding is pending or, to the knowledge of Seller,
threatened to revoke, deny, condition or limit the renewal of any
Environmental Permit.
(c)
Sea Coast has not
used or permitted to be used, except in material compliance with
all Environmental Laws, any of its currently or formerly owned or
leased properties, facilities or Vessels to generate, manufacture,
process, distribute, use, treat, store, dispose of, transport or
handle any Hazardous Material.
(d)
Except as set
forth in Schedule 3.22(d) , Sea Coast has not received
any notice of nor been prosecuted for an offense alleging,
non-compliance with any Environmental Law. Except as set forth in
Schedule 3.22(d) , there are no outstanding orders
requiring Remedial Actions with respect to the businesses or
currently or formerly owned or leased properties of Sea Coast, nor
is Seller aware of any condition or circumstance that could
reasonably be expected to require Remedial Actions.
(e)
Except as set
forth in Schedule 3.22(e) , other than in compliance
with all Environmental Laws, there has been no Release of any
Hazardous Material on, into, under, or from Sea Coast’s
currently or formerly owned or leased properties, facilities,
Vessels or other assets that could reasonably be expected to
require Remedial Actions. All Hazardous Materials used in whole or
in part by Sea Coast or resulting from its business have been
disposed of, treated, transported and stored in compliance with all
Environmental Laws. Schedule 3.22(e) identifies
all of the locations where Hazardous Materials used in whole or in
part by Sea Coast have been or are being stored or disposed
of.
(f)
Sea Coast has not
received any notice that it is potentially responsible for a
federal, provincial, municipal, local or other clean-up site or
other corrective action under any Environmental Laws. Sea Coast has
not received any request for information in connection with an
inquiry from any Governmental Body with respect to its use of any
disposal sites.
(g)
Seller has made
available to Buyer true and complete copies of all environmental
audits, evaluations, assessments, studies or tests of which it is
aware relating to Sea Coast or any of its currently or formerly
owned or leased properties, facilities, Vessels or other
assets.
(h)
Sea Coast has
timely made all filings and timely submitted all reports required
under any Environmental Laws.
18
(i)
No Hazardous
Material is required to be removed, encapsulated or abated, and no
Remedial Action is otherwise required under any Environmental Laws,
with respect to any currently or formerly owned or leased property,
Vessel, facility or ot
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