Exhibit 10.2

EXECUTION VERSION

 

 

 

 

ASSET PURCHASE AGREEMENT

dated as of December 31, 2010

by and among

GREAT LAKES DREDGE & DOCK COMPANY, LLC,

L.W. MATTESON, INC.

and

LAWRENCE W. MATTESON

and

LARRY W. MATTESON

 

 

 

 

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TABLE OF CONTENTS

 

            Page   ARTICLE I  Definitions      1      1.1      Previously
Defined Terms      1      1.2      Definitions      1      1.3      Additional
Defined Terms      11      1.4      Interpretation      13    ARTICLE
II  Purchase and Sale, Purchase Price, Allocation and Other Related Matters     
13      2.1      Purchase and Sale      13      2.2      Purchase Price      14
     2.3      Payment of the Aggregate Purchase Price      14      2.4     
Determination of Estimated Net Working Capital; Purchase Price Adjustment     
15      2.5      Closing Date Balance Sheet      16      2.6      Purchase Price
Settlement      18      2.7      Assumed Liabilities      18      2.8     
Transfer Taxes      20      2.9      Allocation      20    ARTICLE III  Closing
and Closing Date Deliveries      21      3.1      Closing      21      3.2     
Closing Deliveries by Seller      21      3.3      Closing Deliveries by
Purchaser      23      3.4      Cooperation      24    ARTICLE
IV  Representations and Warranties of Seller      24      4.1      Due
Incorporation      24      4.2      Authority      25      4.3      No
Violations and Consents      25      4.4      Brokers      25      4.5     
Required Assets      26      4.6      Related Party Transactions      26   
  4.7      Title to Purchased Assets      26      4.8      Condition of Assets
     27      4.9      Real Estate      27        4.10      Marine Assets      28
       4.11      Litigation and Compliance with Laws      30        4.12     
Intellectual Property      31        4.13      Contracts      32        4.14
     Financial Statements and Related Matters      32        4.15      Changes
Since the Interim Balance Sheet Date      33        4.16      Insurance      34
       4.17      Licenses and Permits      34        4.18      Environmental
Matters      34   

 

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    4.19      Employee Benefit Plans      36        4.20      Employment and
Labor Matters      38        4.21      Taxes      39        4.22      Suppliers;
Customers      40        4.23      Government Contracts      41    ARTICLE
V  Representations and Warranties of Purchaser      44      5.1      Due
Incorporation      44      5.2      Authority      44      5.3      No
Violations      44      5.4      Disclaimer      44      5.5      Litigation   
  44      5.6      Brokers      45    ARTICLE VI  Indemnification      45   
  6.1      Indemnification by Seller      45      6.2      Indemnification by
Purchaser      45      6.3      Claim Procedure/Notice of Claim      46      6.4
     Survival of Representations, Warranties and Covenants; Determination of
Adverse Consequences      48      6.5      Limitations on Indemnification
Obligations      48      6.6      Set-Off      50    ARTICLE VII  Employee
Matters      50      7.1      Employees to be Hired by Purchaser      50   
  7.2      Workers’ Compensation, Medical Claims and Retirees      52    ARTICLE
VIII  Certain Other Agreements      52      8.1      Post Closing Access to
Record      52      8.2      Consents Not Obtained at Closing      53      8.3
     Novation of Government Contracts      53      8.4      Performance of
Government Contracts Pending Novation      55      8.5      Failure to Obtain
Consent      55      8.6      Avoidance of Double Withholding Taxes      55   
  8.7      Bulk Sale Waiver and Indemnity      56      8.8      Post-Closing
Confidentiality      56      8.9      Non-Competition; Non-Solicitation      56
       8.10      Use of L.W. Matteson Name      58        8.11     
Shareholders’ Guarantee      58        8.12      Tax Allocation      58   
    8.13      Seller’s Insurance      58        8.14      Property on Adjacent
Parcel      59    ARTICLE IX  Miscellaneous      59      9.1      Cost and
Expenses      59      9.2      Entire Agreement      59   

 

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  9.3      Counterparts      59      9.4      Assignment, Successors and Assigns
     59      9.5      Severability      60      9.6      Headings      60   
  9.7      Risk of Loss      60      9.8      Governing Law      60      9.9
     Press Releases and Public Announcements      60        9.10      U.S.
Dollars      60        9.11      Notices      60        9.12      SUBMISSION TO
JURISDICTION; VENUE      62        9.13      WAIVER OF JURY TRIAL      62   
    9.14      Waiver      62        9.15      No Third-Party Beneficiary      62
       9.16      Enforcement Costs      62   

 

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Exhibit Index

 

Exhibit

    

Description

    

Section Reference

          A      Form of Set-Off Indemnity Escrow Agreement      6.6   

 

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Disclosure Schedule Index

 

Section 4.1(a) -    Foreign Qualifications Section 4.1(b) -    Capitalization
Section 4.3 -    Required Consents and Approvals Section 4.4 -    Brokers
Section 4.6 -    Related Party Transactions Section 4.7(c)(i) -    Seller
Personal Property Section 4.8 -    Condition of Assets Section 4.9(a) -   
Facilities Section 4.9(b) -    Owned Real Property Section 4.9(c) -    Leasehold
Interests Section 4.10(a) -    Vessels and Marine Assets Section 4.10(b) -   
Chartered Vessels Section 4.10(c) -    Deficiencies with regard to Marine Assets
and Chartered Vessels Section 4.10(d) -    Exceptions to U.S. documentation with
coastwise trade endorsements Section 4.10(g) -    Pending Maritime Claims
Section 4.10(h) -    List of Vessels Under Construction Section 4.10(i) -   
List of Marine Personnel Section 4.10(j) -    List of Actual or Alleged
Violations Section 4.11 -    Litigation and Compliance with Laws Section 4.12 -
   Intellectual Property Section 4.13 -    Contracts Section 4.14(f) -   
Financial Statements; Backlog Section 4.14(g) -    Financial Statements;
Non-Recurring Contracts Section 4.14(h) -    Financial Statements; Capital
Expenditures Section 4.14(i) -    Financial Statements; Indebtedness
Section 4.15 -    Changes Since the Interim Balance Sheet Date Section 4.16 -   
Insurance Section 4.17 -    Licenses and Permits Section 4.18(b) -   
Environmental Matters; Hazardous Materials—Properties Section 4.18(d) -   
Environmental Matters; Storage Tanks Section 4.19 -    Employee Benefits
Section 4.19(d) -    Certain Benefit Plan Matters Section 4.20 -    Employee and
Labor Matters Section 4.21 -    Tax Matters Section 4.22(a) -    Suppliers
Section 4.22(b) -    Customers Section 4.23(a) -    Government Contracts and
Subcontracts Section 4.23(i) -    Government Contracts - Technical Data
Section 4.23(k) -    Government Contracts - Liquidated Damages Section 4.23(p) -
   Certain Government Contracts

 

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Schedule Index

 

Schedule 1.1 -      Certain Permitted Liens     Schedule 2.1 -      Certain
Retained Assets     Schedule 2.3(b) -      Illustrative Calculation of Earnout
Payments     Schedule 2.7 -      Certain Retained Liabilities     Schedule 2.9 -
     Purchase Price Allocation Schedule     Schedule 3.2(f) -      Certain
Required Consents and Approvals    

 

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ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement is made and entered into as of December 31, 2010
(this “Agreement”) by and among GREAT LAKES DREDGE & DOCK COMPANY, LLC, a
Delaware limited liability company (“Purchaser”), L.W. MATTESON, INC., an Iowa
corporation (“Seller”), and LAWRENCE W. MATTESON and LARRY W. MATTESON (each a
“Shareholder” and together with Seller, the “Seller Parties”).

RECITALS:

A.      Seller is engaged in the dredging business, including inland lake and
river dredging, inland levee and construction dredging, environmental
restoration and habitat improvement (the “Business”).

B.      Seller desires to sell the Business and substantially all of its assets
and properties and transfer certain specified liabilities and Purchaser desires
to acquire the Business and substantially all of the assets and properties, and
assume certain specified liabilities, of Seller, on the terms and subject to the
conditions hereinafter set forth.

C.      The Shareholders, together, own, beneficially and of record, all of the
outstanding capital stock of Seller in the amounts set forth on Section 4.1(b)
of the Disclosure Schedule.

D.      In addition, Mr. Lawrence W. Matteson owns certain assets and property
used by Seller in the Business, which he will convey to Purchaser in connection
with the transactions contemplated hereby.

NOW, THEREFORE, in consideration of the foregoing recitals, the representations,
warranties and covenants set forth herein, and other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

ARTICLE I

Definitions

1.1     Previously Defined Terms. Each term defined in the first paragraph and
Recitals shall have the meaning set forth above whenever used herein, unless
otherwise expressly provided or unless the context clearly requires otherwise.

1.2     Definitions. Whenever used herein, the following terms shall have the
meanings set forth below unless otherwise expressly provided or unless the
context clearly requires otherwise:

“Accounts Receivable” - As defined in clause (i) of the definition of Purchased
Assets.

“ACH” means Automated Clearing House.

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“Adverse Consequences” means all Proceedings, claims, demands, Orders, damages,
dues, penalties, fines, costs, amounts paid in settlement, Liabilities, Taxes,
interest, Liens, losses, expenses and fees, including all reasonable accounting,
consultant and attorneys’ fees and court costs, costs of expert witnesses and
other expenses of Proceedings; provided, that Adverse Consequences shall not
include punitive or exemplary damages except to the extent asserted against an
Indemnified Party by a third party.

“Affiliate” means (a) with respect to an individual, (i) the members of the
immediate family (including parents, siblings and children) of the individual,
(ii) the individual’s spouse, and (iii) any Business Entity that directly or
indirectly, through one or more intermediaries is Controlled by, or is under
common Control with, any of the foregoing individuals, or (b) with respect to
any Person other than an individual, any other Person that, directly or
indirectly, Controls, is Controlled by, or is under common Control with or of,
such Person. The term “Control” (including, with correlative meaning, the terms
“Controlled by” and “under common Control with”), as used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise. Each
Shareholder shall be deemed an Affiliate of Seller.

“Affiliate Receivables” means all accounts, notes, contract or other receivables
owed to Seller by a Shareholder or any other Affiliate of Seller or either
Shareholder, including any and all receivables owed to Seller by MMS.

“Audited Financial Statements” means the audited balance sheets of Seller as of
December 31, 2009, December 31, 2008, and December 31, 2007 and the related
audited statements of income, shareholders’ equity and cash flows for the years
then ended, together with the report thereon of McGladrey & Pullen or CPA
Associates, as applicable, Seller’s independent certified public accountants.

“Backlog” means work not yet started and remaining work in progress under
Contracts of the Business transferred to Purchaser with respect to services to
be performed by Purchaser subsequent to the Closing Date, as determined on a
percentage of completion basis as of the Closing Date.

“Business Day” means any day other than a Saturday or Sunday or other day on
which banks in Chicago, Illinois are authorized or required to be closed.

“Business EBITDA” means, for any Earnout Period, the income of the Business
before interest, income taxes, depreciation and amortization for such Earnout
Period, calculated in accordance with GAAP and based on the same accounting
principles and procedures applied in the preparation of the Most Recent Audited
Financial Statements; provided, however, that the parties hereto acknowledge and
agree as follows:

(a)      Business EBITDA shall not include the following:

  (i)     any income, gains, losses or expenses from any other business of
Purchaser, including any business of Purchaser that Purchaser may from or after
the Closing combine with the Business (provided, however, that Purchaser shall
use commercially reasonable efforts to ensure that Business EBITDA shall
continue to be determinable notwithstanding any such combination of business
with the Business);

 

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  (ii)     any gain or loss on the sale of equipment, Marine Assets or
investments; or

  (iii)    any transaction costs or fees incurred by Purchaser or its Affiliates
in connection with the consummation of the transactions contemplated by this
Agreement;

(b)        for any vessels or other equipment utilized by the Business, which
are owned or leased by Purchaser but do not constitute Purchased Assets, the
Business EBITDA shall be reduced by an amount equal to the customary rate
charged internally by Purchaser for the use of such vessels or other equipment
on a project or contract of Purchaser (provided that such rate shall be reduced
by any depreciation component otherwise included therein);

(c)        for any personnel of Purchaser utilized by the Business, the Business
EBITDA shall be reduced by an amount reflecting the fully-loaded cost for such
personnel and the time spent for the Business (except to the extent the cost of
any such personnel already has been deducted in the calculation of Business
EBITDA);

(d)        for any contract awarded to the Business after the Closing primarily
due to the Business then being owned by Purchaser (e.g., due to Purchaser’s
greater bonding capacity), or any contract or additional work delegated or
assigned after Closing by Purchaser to the Business, the Business EBITDA shall
be reduced by any amount equal to any direct costs incurred by Purchaser in
connection therewith (and not otherwise already charged against Business
EBITDA);

(e)        for any project on which the majority of the dredges used by the
Business are not dredges that Purchaser acquired from Seller in connection with
the transactions contemplated hereby, the Business EBITDA shall be reduced by an
amount equal to twenty-five percent (25%) of the net margin realized on such
project in such Earnout Period; and

(f)         for each EBITDA Period, the Business EBITDA shall be reduced by an
overhead charge in an amount equal to 0.4% of the revenues of the Business for
such Earnout Period.

“Business EBITDA Shortfall” means, for any Earnout Period, the amount, if any,
by which $9,000,000 exceeds the Business EBITDA for such Earnout Period.

“Business Entity” means any Person other than an individual or a Governmental
Authority.

“Cash Purchase Price” means an amount equal to Thirty-Seven Million Five Hundred
Thousand Dollars ($37,500,000).

“CERCLA” - As defined in clause (i) of the definition of Hazardous Material.

 

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“Closing Accounts Receivable” means all Accounts Receivable outstanding as of
the Closing Date.

“Code” means the Internal Revenue Code of 1986, as amended.

“Confidential Information” means any Information concerning the Business or
Purchased Assets, other than information that (i) is already part of the public
domain, (ii) becomes publicly known through no wrongful act or omission of any
Seller Party or (iii) is required to be disclosed under the terms of a valid and
effective subpoena or order issued by a court of competent jurisdiction or by a
demand or information request from an executive or administrative agency or
other Governmental Authority; provided, however, the applicable Seller Party
shall promptly notify Purchaser of the existence, terms and circumstances
surrounding such demand or request, and shall reasonably cooperate with
Purchaser (at the sole cost and expense of Purchaser) in taking legally
available steps to resist or narrow such demand or request.

“Contract Bid” means any outstanding bid, quotation or proposal by Seller that
if accepted or awarded could lead to a Government Contract.

“Contracts” means, with respect to any Person, any contract, agreement, deed,
mortgage, lease, license, commitment, arrangement or undertaking, written or
oral, or other document or instrument to which or by which such Person is a
party or otherwise subject or bound or to which or by which any asset, property
or right of such Person is subject or bound.

“Current Assets” means Seller’s Accounts Receivable, costs and estimated
earnings in excess of billings on uncompleted Contracts of the Business,
deposits and Prepaids; provided, that Current Assets do not include any Retained
Assets.

“Current Liabilities” means those liabilities that constitute accounts payable,
accrued expenses, accrued but unpaid employee compensation and benefits
(including accrued vacation, holiday or leave time), billings in excess of costs
and estimated earnings on uncompleted Contracts of the Business; provided, that
Current Liabilities do not include the note payable to the City of Decatur, any
claims payable or other Retained Liabilities.

“Disclosure Schedule” means the letter dated as of even date herewith delivered
to Purchaser by Seller simultaneously with the execution and delivery of this
Agreement.

“Employment and Non-Compete Agreement” means the employment and non-compete
agreements entered into on the Closing Date between Purchaser and each of Larry
W. Matteson and Jon G. Nieman.

“Environmental Laws” means any and all Laws, permits, approvals, authorizations,
Orders and other requirements having the force and effect of law, whether local,
state, territorial or national, at any time in force or effect relating to:
(i) emissions, discharges, spills, releases or threatened releases of Hazardous
Materials; (ii) the use, treatment, storage, disposal, handling, manufacturing,
transportation or shipment of Hazardous Materials; (iii) the regulation of
storage tanks; or (iv) otherwise relating to pollution or the protection of
human health, safety or the environment, including the following statutes as now
written and amended,

 

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and as amended hereafter, including any and all regulations promulgated
thereunder and any and all state and local counterparts: CERCLA, the Federal
Water Pollution Control Act, 33 U.S.C. §1251 et seq., the Clean Air Act, 42
U.S.C. §7401 et seq., the Toxic Substances Control Act, 15 U.S.C. §2601 et seq.,
the Solid Waste Disposal Act, 42 U.S.C. §6901 et seq., the Emergency Planning
and Community Right-to-Know Act of 1986, 42 U.S.C. §11001 et seq., and the Safe
Drinking Water Act, 42 U.S.C. §300f et seq.

“ERISA” means the Employee Retirement Income Security Act of 1974 and the rules
and regulations promulgated thereunder.

“ERISA Affiliate” means, with respect to any Person, each corporation, trade or
business that is, along with such Person, part of the controlled group of
corporations, trades or businesses under common control within the meaning of
sections 414(b), (m) or (o) of the Code.

“Final Net Working Capital” means the Net Working Capital as reflected on the
Final Closing Balance Sheet.

“Financial Statements” means the Audited Financial Statements and the Interim
Financial Statements.

“GAAP” means United States generally accepted accounting principles as in effect
from time to time.

“Geographical Area” means North America, Central America, South America, the
Caribbean, the Middle East, Africa, India, Australia, and Asia.

“Government Contract” means any Contract between Seller and any Governmental
Authority.

“Government Subcontract” means any Contract between Seller and any prime
contractor or upper-tier subcontractor relating to a Contract between such
Person and any Governmental Authority.

“Governmental Authority” means the government of the United States or any
foreign country or any state or political subdivision thereof and any entity,
body or authority exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, including
quasi-governmental entities established to perform such functions.

“Hazardous Material” means (i) all substances, wastes, pollutants, contaminants
and materials (collectively, “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 these
statutes’ implementing regulations: the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601 et seq. (“CERCLA”), the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S. C. Section 136 et
seq; the Atomic Energy Act, 42 U.S.C. Section 22011 et seq; and the Hazardous
Materials Transportation Act, 42 U.S.C. Section 1801 et seq; (ii) all Substances
with respect to which any Governmental Authority otherwise requires
environmental investigation, monitoring, reporting, or remediation;
(iii) petroleum and petroleum products and by products including crude oil and
any fractions thereof; (iv) natural gas, synthetic gas, and any mixtures
thereof; and (v) radon, radioactive substances, asbestos, urea formaldehyde, and
polychlorinated biphenyls (“PCBs”).

 

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“Indebtedness” means any (a) obligations relating to indebtedness for borrowed
money or for the deferred purchase price of property or services (including
reimbursement obligations related to banker’s acceptances, surety bonds or
letters of credit, whether or not matured), (b) obligations evidenced by a note,
bond, debenture or similar instrument, (c) capital lease obligations, (d) letter
of credit arrangements, (e) obligations in respect of futures contracts, forward
contracts, swaps, options, hedging or similar arrangements and (f) obligations
of the types referred to in the preceding clauses (a) through (e) of any other
Person guaranteed by the Seller or secured by a Lien on any assets of the
Seller.

“Interim Balance Sheet” means the balance sheet included in the Interim
Financial Statements.

“Interim Balance Sheet Date” means September 30, 2010.

“Interim Financial Statements” means the unaudited balance sheet of Seller as of
the Interim Balance Sheet Date and the related unaudited statements of income
and cash flows for the portion of the fiscal year then ended.

“Inventory” - As defined in clause (iii) of the definition of Purchased Assets.

“IRS” means the Internal Revenue Service.

“Law” means any law, statute, code, regulation, ordinance, rule, Order, or
governmental requirement enacted, promulgated, entered into, agreed, imposed or
enforced by any Governmental Authority.

“Leasehold Interests” - See clause (v) of definition of Purchased Assets.

“Liabilities” means any obligation or liability (whether known or unknown,
whether asserted or unasserted, whether absolute or contingent, whether accrued
or unaccrued, whether liquidated or unliquidated and whether due or to become
due), including any liability for Taxes.

“Lien” means any mortgage, lien, charge, restriction, pledge, security interest,
option, lease or sublease, right of any third party, easement, encroachment or
other encumbrance.

“Material Adverse Change” means a change that is or could reasonably be expected
to be materially adverse to (a) the results of operations, financial condition,
business, rights, properties, assets or liabilities of Seller, the Business or
the Purchased Assets, taken as a whole (b) Seller’s relations with its
management, employees, creditors, suppliers, customers, regulators, insurers or
others having material business relationships with Seller or the Business, or
(c) the ability of Seller or Purchaser to consummate the transactions
contemplated hereby or perform its obligations hereunder; provided, that none of
the following shall be deemed to constitute, either alone or in combination, and
none of the following shall be taken into account in determining whether there
has been, a Material Adverse Change: (i) any adverse change or

 

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development relating to the United States financial, banking or securities
markets, (ii) conditions resulting from the announcement of the transactions
contemplated hereby or (iii) national or international political or social
conditions.

“MMS” means Matteson Marine Services, Inc., an Iowa corporation.

“Most Recent Audited Balance Sheet” means Seller’s audited balance sheet as of
December 31, 2009.

“Most Recent Audited Balance Sheet Date” means December 31, 2009.

“Most Recent Audited Financial Statements” means Seller’s audited financial
statements as of, and for the year ended, December 31, 2009.

“Mr. Matteson” means Lawrence W. Matteson.

“Net Working Capital” means the Current Assets minus the Current Liabilities,
which shall be calculated in accordance with GAAP and based on the same
accounting principles and procedures applied in the preparation of the Most
Recent Audited Financial Statements.

“Order” means any decree, order, judgment, writ, award, injunction, stipulation
or consent of or by, or settlement agreement with, a Governmental Authority.

“Ordinary Course” means the ordinary course of business of Seller, consistent
with past practice and custom (including with respect to quantity and
frequency).

“Past Due Rate” means an interest rate equal to nine percent (9%) per annum.

“PCBs” - As defined in clause (v) of the definition of Hazardous Material.

“Permitted Liens” means (a) liens for Taxes not yet due and payable or for Taxes
that are being contested in good faith and by appropriate proceedings and for
which adequate reserves have been established on the books and records of
Seller, (b) landlord and lessor liens existing under the terms and conditions of
leases of real or personal property, but not any such lien that has arisen or
exists as a result of a default or breach by Seller of any obligation thereunder
or the failure of any condition thereunder to be satisfied, (c) carrier’s,
warehousemen’s, mechanic’s, materialmen’s or similar liens arising in the
Ordinary Course securing amounts not yet due and payable, and (d) liens
described on Schedule 1.1.

“Person” means any natural person, corporation, partnership, limited liability
company, joint venture, trust, association or unincorporated entity of any kind.

“Prepaids” - As defined in clause (ii) of the definition of Purchased Assets.

“Proceeding” means any action, complaint, suit, litigation, arbitration or
proceeding (including any civil, criminal, administrative, investigative or
appellate proceeding), hearing, inquiry, audit, examination or investigation
commenced, brought, conducted or heard by or before, or otherwise involving any
court, tribunal or other Governmental Authority or any arbitrator or arbitration
panel.

 

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“Purchased Assets” means the Business and all assets, rights and properties
owned by (a) Seller (other than the Retained Assets) and (b) Mr. Matteson (but
only to the extent constituting Shareholder Assets and in any event excluding
any real property), in each case, on the Closing Date, whether or not carried
and reflected on the books of Seller, wherever located, including the following:

  (i)       all accounts, notes, contract or other receivables of Seller, other
than Affiliate Receivables (collectively, “Accounts Receivable”);

  (ii)      all deposits and advances, prepaid expenses and other prepaid items
of Seller, to the extent the foregoing are transferable to Purchaser and the
full amount thereof is realizable by Purchaser after the Closing, but not
including any prepaid Taxes and licenses (collectively, “Prepaids”);

  (iii)     all inventories of Seller, including all inventories of parts and
supplies (collectively, “Inventory”);

  (iv)     all Marine Assets (and all drawings, records and logs relating
thereto) and other tangible assets, including vehicles, trucks, tractors,
trailers and other transportation equipment, machinery, equipment, tools,
strapping, pallets, spare parts, operating supplies, fuel, furniture and office
equipment, fixtures, construction-in-progress, telephone systems, telecopiers,
photocopiers and computer hardware, of Seller, including all tangible assets
listed in Section 4.7(c)(i) of the Disclosure Schedule and Sections 4.10(a) and
(b) of the Disclosure Schedule;

  (v)      all of Seller’s right, title and interest in and to the Facilities,
including the real property leases described in Section 4.9(c) of the Disclosure
Schedule and the leasehold improvements situated on the leased real property
which is the subject of each such lease (collectively, the “Leasehold
Interests”), other than the Owned Real Property;

  (vi)     all of Seller’s right, title and interest in, to or under the
(A) Contracts described in Section 4.13 of the Disclosure Schedule (other than
the Contracts set forth on Schedule 2.1) and (B) any executory Contracts of
Seller which relate to the Business and are not required to be listed in the
Disclosure Schedule pursuant to Section 4.13 of this Agreement;

  (vii)    all of Seller’s right, title and interest in and to the following
intellectual property: trade names (including “L.W. Matteson” and “Matteson
Dredging”), trademarks, trademark registrations, trademark applications, service
marks, service mark registrations, service mark applications; copyrights,
copyright registrations, copyright applications; patent rights (including issued
patents, applications, divisions, continuations and continuations-in-part,
reissues, patents of addition, utility models and inventors’ certificates);
domain names; licenses with respect to any of the foregoing; trade secrets,
proprietary manufacturing information and know-how; computer software,
inventions, inventors’ notes, drawings and designs; customer and vendor lists
and the goodwill associated with any of the foregoing, including any of the
foregoing described in Section 4.12 of the Disclosure Schedule;

 

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  (viii)   all Permits to the extent transferable or assignable to Purchaser;

  (ix)     all of Seller’s right, title and interest in choses in action, claims
and causes of action or rights of recovery or set-off of every kind and
character, including under warranties, guarantees and indemnitees;

  (x)      all of Seller’s files, papers, documents and records, including
credit, sales and accounting records, price sheets, catalogues and sales
literature, books, processes, advertising material, stationery, office supplies,
forms, catalogues, manuals, correspondence, logs, employment records and any
other information reduced to writing;

  (xi)     a copy of Seller’s general ledgers and books of original entry;

  (xii)    all of Seller’s right, title and interest in, to or under restrictive
covenants and obligations of its present and former employees, agents,
representatives, independent contractors and others;

  (xiii)   the Shareholder Assets;

  (xiv)   the Business of Seller as a going concern; and

  (xv)    all other assets owned and used by Seller in the conduct of the
Business, other than the Retained Assets.

“Registered Vessel” means each Vessel that is listed as a “Registered Vessel” on
Section 4.10(a) of the Disclosure Schedule.

“Release” means releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, disposing or dumping.

“Retained Assets” means the following:

  (i)       all cash and cash equivalents and marketable securities of Seller;

  (ii)      Seller’s corporate seal, minute books and stock record books, the
general ledgers and books of original entry, all Tax Returns and other Tax
records, reports, data, files and documents;

  (iii)     all of Seller’s right, title and interest in and to the Owned Real
Property;

  (iv)     all of Seller’s right, title and interest in choses of action, claims
and causes of action or rights of recovery or set-off of every kind and
character, including under warranties, guarantees and indemnitees, but only to
the extent related to another Retained Asset or a Retained Liability;

 

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  (v)      all Affiliate Receivables;

  (vi)     Seller’s rights under this Agreement;

  (vii)    all of Seller’s right, title and interest in any insurance policies,
including those identified in Section 4.16 of the Disclosure Schedule, together
with the right to make claims thereunder and to seek refunds of premiums paid on
account thereof;

  (viii)   any funds or assets of any Benefit Plan sponsored or maintained by
the Seller, except to the extent owned by Seller’s employees;

  (ix)     all of Seller’s rights, title and interest in prepaid Taxes, Tax
refunds and credits;

  (x)      all of Seller’s right, title and interest in, to and under the assets
identified on Schedule 2.1;

  (xi)     Seller’s rights under the Surety Contract;

  (xii)    Seller’s rights under the “Employment Contracts” listed in
Section 4.19(a) of the Disclosure Schedule (the “Seller’s Employment
Contracts”); and

  (xiii)   all of Seller’s rights to project modification proceeds, but only for
work completed by Seller prior to the Closing Date on projects completed prior
to the Closing Date and not assigned to Purchaser.

“Security Agreement” means the Equipment Security Agreement entered into on the
Closing Date between Purchaser and Seller pursuant to which Purchaser grants to
Seller a security interest in certain of the Purchased Assets as security for
the payment of the Seller Note.

“Seller Government Contract” means any Contract Bid or Government Contract.

“Seller Government Subcontract” means any Subcontract Bid or Government
Subcontract.

“Seller’s Employment Contracts” has the meaning assigned thereto in clause
(xii) of the definition of “Retained Assets”.

“Seller’s Knowledge” means the actual knowledge of either Shareholder, Jon G.
Nieman or Brad Callison, each after due inquiry and investigation (including a
reasonable review of such person’s applicable files and, where appropriate,
conferring with legal counsel and financial advisors).

“Set-Off Indemnity Escrow Agreement” means an Escrow Agreement among Purchaser,
Seller and a nationally recognized bank or trust company selected by Purchaser
and reasonably satisfactory to Seller, substantially in the form of Exhibit A or
with such changes thereto as are required by the escrow agent and reasonably
acceptable to Purchaser and Seller, which shall be entered into if and when
contemplated by Section 6.6.

 

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“Shareholder Assets” means those assets identified on Section 4.10(a) of the
Disclosure Schedule that have “Lawrence” under the heading “Asset ID” therefor.

“Shareholder Assets Purchase Price” means $750,000.

“Shareholder Consulting and Non-Compete Agreement” means the Consulting and
Non-Compete Agreement entered into on the Closing Date between Mr. Matteson and
Purchaser.

“Subcontract Bid” means any outstanding bid, quotation or proposal by Seller
that if accepted or awarded could lead to a Government Subcontract.

“Substances” - As defined in clause (i) of the definition of Hazardous Material.

“Surety Contract” means the General Agreement of Indemnity dated as of
February 16, 1998 between Seller and Travelers Casualty and Surety Company of
America, as amended.

“Target Net Working Capital” means Three Million Three Hundred Fifty Thousand
Dollars ($3,350,000).

“Tax Return” means any report, return or other information required to be
supplied to a Governmental Authority in connection with any Taxes.

“Taxes” means all taxes, charges, fees, duties (including custom duties), levies
or other assessments, including income, gross or net receipts, gross or net
proceeds, capital gains, profits, gaming, capital, estimated, alternative or
add-on minimum, registration, natural resources, premium, ad valorem, turnover,
real or personal property (tangible and intangible), sales, use, franchise,
excise, value added, stamp, leasing, lease, user, transfer, fuel, excess
profits, occupational, interest equalization, windfall profits, license,
payroll, environmental, capital stock, disability, severance, employee’s income
withholding, other withholding, unemployment and Social Security taxes, which
are imposed by any Governmental Authority, and such term shall include any
interest, penalties or additions to tax attributable thereto.

“USCG” means the United States Coast Guard.

“VDR” means the virtual data room made available to Purchaser and its counsel by
or on behalf of Seller for purposes of facilitating the transactions
contemplated hereby.

1.3     Additional Defined Terms. For purposes of this Agreement, the following
terms have the meanings specified in the indicated Section of this Agreement:

 

Defined Term

  

Section

Adjustment Report

   2.5(b)

Agreement

   Introduction

Aggregate Purchase Price

   2.2

Assignment of Lease

   3.2(i)

Assumed Liabilities

   2.7(a)

 

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Assumption Agreement    3.2(c) Benefit Plans    4.19(b) Burlington Lease   
3.2(h) Business    Recitals Chartered Vessels    4.10(b) Claim Notice    6.3(a)
Claimed Amount    6.3(a) Closing    3.1(a) Closing Date    3.1(a) Controlling
Party    6.3(d) Crew    4.10(i)

Critical Representations

  

6.4(b)

Earnout Payment

  

2.3(b)(i)

Earnout Period

  

2.3(b)(i)

Effective Time

  

3.1(b)

Estimated Cash Purchase Price

  

2.4(b)

Estimated Net Working Capital

  

2.4(a)

Facilities

  

4.9(a)

Final Closing Balance Sheet

  

2.5(d)

Finally Determined

  

6.6

Final Net Working Capital Calculation   

2.5(a)

Indemnified Party

  

6.3(a)

Indemnifying Party

  

6.3(a)

Independent Accounting Firm

  

2.5(c)

Interim Period

  

8.4(a)

Lower Limit

  

2.5(c)

Marine Assets

  

4.10(a)

Net Business EBITDA

  

2.3(b)(ii)

Non-controlling Party

  

6.3(c)

Novation Agreement

  

8.3(b)

Objection Notice

  

6.3(b)

Owned Real Property

  

4.9(b)

Permits

  

4.17

Preferred Bidder Status

  

4.23(p)

Properties

  

4.9(c)

Purchase Price Allocation Schedule   

2.9

Purchaser

  

Introduction

Purchaser Indemnitees

  

6.1

Request

  

8.3(b)

Response

  

6.3(b)

Restricted Person

  

8.9(e)

Restrictive Covenant

  

8.9(e)

Retained Liabilities

  

2.7(b)

Seller

  

Introduction

Seller Bill of Sale and Assignment

Agreement

  

3.2(a)

 

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Seller Indemnitees    6.2 Seller Marine Assets    4.10(a) Seller Note   
2.3(a)(i) Seller Vessels    4.10(a) Seller Party    Introduction Settlement Date
   2.5(d) Shared Insurance Proceeds    6.5(e)

Shareholder Bill of Sale and

        Assignment Agreement

   3.2(b) Shareholder Marine Assets    4.10(a) Shareholder Vessels    4.10(a)
Statute of Limitation Representations    6.4(b) Subcontract Agreement    3.2(o)
Transfer Taxes    2.8 Transferred Employees    7.1(a) Upper Limit    2.5(c)
Vessels    4.10(a)

1.4     Interpretation. Unless the context of this Agreement otherwise requires,
(a) words of any gender shall be deemed to include each other gender, (b) words
using the singular or plural number shall also include the plural or singular
number, respectively, (c) references to “hereof”, “herein”, “hereby” and similar
terms shall refer to this entire Agreement, (d) all references in this Agreement
to Articles, Sections and Exhibits shall mean and refer to Articles, Sections
and Exhibits of this Agreement, (e) all references to statutes and related
regulations shall include all amendments of the same and any successor or
replacement statutes and regulations, (f) references to any Person shall be
deemed to mean and include the successors and permitted assigns of such Person
(or, in the case of a Governmental Authority, Persons succeeding to the relevant
functions of such Person), (g) the term “including” shall be deemed to mean
“including, without limitation” and “including, but not limited to” and
(h) references to “have been made available to Purchaser,” “have been delivered
to Purchaser,” or “have been provided to Purchaser” (and with any correlative
word or phrase) means was made available to Purchaser by Seller in the VDR or
have been otherwise given to Purchaser and its representatives.

ARTICLE II

Purchase and Sale, Purchase Price,

Allocation and Other Related Matters

2.1     Purchase and Sale. Upon the terms and subject to the conditions of this
Agreement, at the Closing on the Closing Date, (a) Seller shall sell, assign,
convey, transfer and deliver to Purchaser, and Purchaser shall acquire and
assume from Seller, the Purchased Assets (other than the Shareholder Assets) and
the Assumed Liabilities, free and clear of any Liens, other than Permitted Liens
and (b) Mr. Matteson shall sell, assign, convey, transfer and deliver to
Purchaser, and Purchaser shall assume from Mr. Matteson, the Shareholder Assets,
free and clear of any Liens, other than Permitted Liens. Notwithstanding
anything herein to the contrary, the Retained Assets will be retained by Seller
and not sold, assigned, conveyed, transferred or delivered to Purchaser
hereunder.

 

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2.2     Purchase Price. The aggregate purchase price payable by Purchaser for
the Purchased Assets shall be (i) Forty-Five Million Dollars ($45,000,000) (the
“Base Purchase Price”), as adjusted, up or down, by the difference between the
Final Net Working Capital and the Target Net Working Capital plus (ii) the
assumption by Purchaser at the Closing of the Assumed Liabilities plus (iii) the
Earnout Payments, if any, in accordance with Section 2.3(b) (collectively, the
“Aggregate Purchase Price”).

2.3     Payment of the Aggregate Purchase Price.

(a)      Payment of Base Purchase Price. At the Closing, Purchaser shall pay the
Base Purchase Price as follows:

  (i)     delivery by Purchaser to Seller of an executed secured promissory note
in the original principal amount of Seven Million Five Hundred Thousand Dollars
($7,500,000) (the “Seller Note”);

  (ii)    delivery by Purchaser to Seller in accordance with Section 2.4(b) of
an amount equal to (A) the Estimated Cash Purchase Price minus (B) the
Shareholder Assets Purchase Price; and

  (iii)   delivery by Purchaser to Mr. Matteson in accordance with
Section 2.4(b) of an amount equal to the Shareholder Assets Purchase Price.

(b)      Earnout. Purchaser shall pay the Earnout Payments, if any, to Seller on
the following terms and conditions:

  (i)     for each of (i) calendar year 2011, (ii) calendar year 2012 and
(iii) calendar year 2013 (each, an “Earnout Period”), Purchaser shall make a
cash payment (each, an “Earnout Payment”) to Seller based on the Business EBITDA
for that Earnout Period;

  (ii)    for each Earnout Period, (A) if the Business EBITDA for such Earnout
Period (minus any unapplied Business EBITDA Shortfall for the preceding Earnout
Periods) (the “Net Business EBITDA”) exceeds Nine Million Dollars ($9,000,000)
but is equal to or less than Twelve Million Dollars ($12,000,000), the Earnout
Payment shall be an amount equal to the product of (I) the amount by which the
Net Business EBITDA for such Earnout Period exceeds Nine Million Dollars
($9,000,000) multiplied by (II) fifteen percent (15%), and (B) if the Net
Business EBITDA for such Earnout Period is greater than Twelve Million Dollars
($12,000,000), the Earnout Payment shall be in an amount equal to the sum of
(I) Four Hundred Fifty Thousand Dollars ($450,000) plus (II) the product of
(x) the amount by which the Net Business EBITDA for such Earnout Period exceeds
Twelve Million Dollars ($12,000,000) multiplied by (y) twenty-five percent
(25%);

 

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  (iii)   no Earnout Payment will be paid to Seller for an Earnout Period in the
event the Net Business EBITDA for such Earnout Period does not exceed Nine
Million Dollars ($9,000,000);

  (iv)   the Earnout Payments, if any, are subject to set-off in accordance with
Section 6.6;

  (v)    for each Earnout Period, Purchaser shall make the Earnout Payment
promptly, and in no event later than the earlier of (A) the fifteenth (15th) day
following Purchaser’s public announcement of its financial results for such
Earnout Period and (B) March 30 following such Earnout Period; and

  (vi)   Purchaser shall provide Seller with all supporting documentation
reasonably requested by Seller for purposes of verifying Purchaser’s calculation
of any Earnout Payment. In the event Purchaser and Seller disagree as to the
amount of an Earnout Payment, such dispute shall be resolved in accordance with
the procedures described in Section 2.5(c). An illustrative calculation of
“Earnout Payment” is attached hereto as Schedule 2.3(b).

(c)      It is expressly acknowledged and understood by the parties hereto that
the inclusion of the Earnout Payment(s) as part of this Agreement is a principal
term hereof and the opportunity to achieve the same constitutes substantial
consideration for Seller’s and the Shareholders’ willingness to execute this
Agreement and consummate the transactions contemplated herein. In light of the
foregoing, during the Earnout Periods, Purchaser shall (i) not intentionally
divert any material business opportunity relating to the Business to other
business units of Purchaser primarily for the purpose of frustrating the
Seller’s achievement of the Earnout Payments; (ii) not operate the Business in a
manner intended to thwart or prevent the earning of the Earnout Payment(s); and
(iii) maintain books and records necessary to properly account for the Business
EBITDA, even if the Business is combined by Purchaser with another division or
operating unit.

(d)      All payments to be made pursuant to this Section 2.3 shall be made by
ACH to accounts designated by Seller, which accounts will be designated by
Seller in writing at least five (5) Business Days prior to the date of the
required payment Any amounts required to be paid pursuant to Section 2.6(b)
which are not paid when due will accrue interest at the Past Due Rate until paid
in full.

2.4      Determination of Estimated Net Working Capital; Purchase Price
Adjustment.

(a)      Not later than five (5) Business Days prior to the Closing, Seller
shall provide to Purchaser (i) an estimated balance sheet of Seller prepared in
accordance with the books and records of the Seller as of the Closing,
(ii) Seller’s good faith calculation of the Net Working Capital as of the date
of, and based on, such balance sheet (the “Estimated Net Working Capital”),
(iii) a statement identifying any adjustments to the Cash Purchase Price
pursuant to Section 2.4(b) as a result of Estimated Net Working Capital
exceeding or being less than the Target Net Working Capital, and (iv) reasonable
access during normal business hours and

 

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without undue disruption of the Business to the appropriate Seller personnel and
all supporting financial statements, work sheets and other documentation used to
determine the Estimated Net Working Capital that are reasonably requested by
Purchaser. As promptly as practicable but not later than one (1) Business Day
prior to the Closing, Purchaser will identify any adjustments that it reasonably
believes are required to such statements delivered by Seller. If Seller disputes
any such adjustments, Purchaser and Seller will use all commercially reasonable
efforts to resolve such dispute, after which Seller will re-deliver to Purchaser
the statements with such adjustments as the parties have agreed are appropriate.

(b)     On the Closing Date, (i) Purchaser shall pay to Seller an amount equal
to (A) the Cash Purchase Price plus (B) the amount by which the Estimated Net
Working Capital exceeds the Target Net Working Capital or minus (C) the amount
by which the Target Net Working Capital exceeds the Estimated Net Working
Capital (the “Estimated Cash Purchase Price”) minus (D) the Shareholder Assets
Purchase Price and (ii) Purchaser shall pay to Mr. Matteson an amount equal to
the Shareholder Assets Purchase Price, in each case in accordance with the
payment procedures set forth in Section 2.6(c). No adjustment to the Cash
Purchase Price will be made in the event Estimated Net Working Capital is equal
to the Target Net Working Capital.

2.5     Closing Date Balance Sheet.

(a)     Within ninety (90) days after the Closing, Purchaser shall provide to
Seller (i) a balance sheet of the Business based upon the Purchased Assets and
Assumed Liabilities as of the Closing Date and prepared in accordance with the
same accounting principles and procedures applied in the preparation of the Most
Recent Audited Financial Statements (the “Final Closing Balance Sheet”); and
(ii) Purchaser’s good faith calculation of the Net Working Capital as reflected
on the Final Closing Balance Sheet (the “Final Net Working Capital
Calculation”). At the election of Purchaser, any Closing Accounts Receivable
which remain uncollected at the end of such ninety (90) day period may be
treated as a reduction to Net Working Capital in the Final Net Working Capital
Calculation, but (A) only to the extent such uncollected Closing Accounts
Receivable are in excess of any reserves for doubtful accounts included in the
Final Net Working Capital and (B) only if Purchaser promptly thereafter conveys
to Seller all of its rights in and to such uncollected Closing Accounts
Receivable, without representation or warranty (other than a representation and
warranty that such uncollected Closing Accounts Receivable are free and clear of
Liens, other than Permitted Liens). In the event Purchaser elects not to reduce
the Final Net Working Capital by the amount of any such Closing Accounts
Receivable that remained uncollected at the end of such ninety (90) day period
and such Closing Accounts Receivable remains uncollected on the one year
anniversary of the Closing Date, Seller shall pay to Purchaser the amount of
such uncollected Closing Accounts Receivable immediately upon Purchaser’s
conveyance to Seller of all of Purchaser’s rights therein, without
representation or warranty (other than a representation and warranty that such
uncollected Closing Accounts Receivable are free and clear of Liens, other than
Permitted Liens). Following the Closing, Purchaser agrees to use commercially
reasonable efforts to collect the Closing Accounts Receivable, and agrees to
provide Seller with written notice of uncollected Closing Accounts Receivable
sixty (60) days after Closing. For purposes of the Final Net Working Capital
Calculation, the amount of the Closing Accounts Receivable shall not be reduced
to the extent of any amount of such Closing Accounts Receivable compromised,

 

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settled or adjusted by Purchaser without the prior written consent of Seller,
which consent shall not unreasonably be withheld. The parties hereto agree that
“commercially reasonable efforts” shall not require Purchaser to commence any
Proceeding, or retain any third parties (e.g., collection agencies or
attorneys), to seek collection of the Closing Accounts Receivable. Purchaser
shall provide to Seller and its agents and representatives access to the
appropriate Purchaser personnel and all supporting financial statements, work
sheets and other documentation used to make the Final Net Working Capital
Calculation that are reasonably requested by Seller, but only at reasonable
times during normal business hours and with reasonable prior notice to
Purchaser.

(b)     Within thirty (30) days after the Final Closing Balance Sheet and the
Final Net Working Capital Calculation are received by Seller pursuant to
Section 2.5(a), Seller shall complete its examination thereof and shall deliver
to Purchaser either (i) a written acknowledgement accepting the Final Closing
Balance Sheet and the Final Net Working Capital Calculation; or (ii) a written
report setting forth in reasonable detail any proposed adjustments to the Final
Closing Balance Sheet and the Final Net Working Capital Calculation (“Adjustment
Report”). If Seller fails to respond to Purchaser within such thirty (30) day
period, Seller shall be deemed to have accepted and agreed to the Final Closing
Balance Sheet and the Final Net Working Capital Calculation as delivered
pursuant to Section 2.5(a).

(c)     In the event Seller and Purchaser fail to agree on any of Seller’s
proposed adjustments contained in the Adjustment Report within thirty (30) days
after Purchaser receives the Adjustment Report, then Seller and Purchaser agree
that a mutually acceptable nationally recognized independent accounting firm or
other mutually acceptable nationally recognized financial services provider
(“Independent Accounting Firm”) shall be jointly retained to make the final
determination with respect to the correctness of the proposed adjustments in the
Adjustment Report in light of the terms and provisions of this Agreement. Each
of Purchaser, on the one hand, and Seller, on the other hand, shall submit an
affidavit to the other evidencing no conflict or material prior professional or
business relationship with the selected Independent Accounting Firm, and such
firm shall so certify to Purchaser and Seller that no such conflict or
relationship exists. Purchaser and Seller shall use their commercially
reasonable efforts to select the Independent Accounting Firm within ten
(10) days of the expiration of such period and to cause the Independent
Accounting Firm to resolve all disagreements as soon as practicable, but in any
event within sixty (60) days after submission of the dispute to the Independent
Accounting Firm. The Independent Accounting Firm shall limit itself only to the
specific items under dispute between the parties, and the decision of the
Independent Accounting Firm shall be final and binding on Seller and Purchaser.
Each party (and its respective representatives and advisors) shall be entitled
to make a presentation to the Independent Accounting Firm (which may include
submission of back-up materials and workpapers) in support of its position in
the dispute. The parties hereto agree that, if the Independent Accounting Firm
assigns to any item a value greater than the greatest value for such item
claimed by either Purchaser or Seller (the “Upper Limit”) or less than the
smallest value for such item claimed by Purchaser or Seller (the “Lower Limit”),
the Determination for such item shall be adjusted to the Upper Limit or the
Lower Limit, as applicable, and not beyond. Seller and Purchaser shall each pay
one-half of the Independent Accounting Firm’s fees and expenses in connection
with this Section 2.5(c).

 

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(d)     The terms “Final Closing Balance Sheet” and “Final Net Working Capital”)
as those terms have been hereinbefore and will be hereinafter used, shall mean
the Final Closing Balance Sheet and corresponding Final Net Working Capital
delivered pursuant to Section 2.5(a), as adjusted, if at all, pursuant to this
Section 2.5. The date on which the Final Closing Balance Sheet and Final Net
Working Capital Calculation are finally determined pursuant to this Section 2.5
shall hereinafter be referred to as the “Settlement Date.”

2.6     Purchase Price Settlement.

(a)     In the event the Final Net Working Capital is less than the Estimated
Net Working Capital, then Seller shall pay to Purchaser within five (5) days
after the Settlement Date an amount equal to such deficiency.

(b)     In the event the Final Net Working Capital is more than the Estimated
Net Working Capital, then Purchaser shall pay to Seller within five (5) days
after the Settlement Date an amount equal to such excess.

(c)     Any payment required pursuant to Section 2.6(a) or (b) shall be made by
ACH for credit to the recipient at a bank account designated by such recipient
in writing. Any amounts required to be paid pursuant to this Section 2.6 which
are not paid when due will accrue interest at the Past Due Rate until paid in
full.

2.7     Assumed Liabilities.

(a)     As additional consideration for the purchase of the Purchased Assets,
Purchaser shall, at the Closing, by its execution and delivery of the Assumption
Agreement, assume, agree to perform, and pay and discharge as and when due, only
the following obligations and liabilities of Seller relating to the Business
(collectively, the “Assumed Liabilities”):

  (i)    the obligations and liabilities of Seller reflected or reserved for on
the Final Closing Balance Sheet as Current Liabilities (other than Retained
Liabilities), including accounts payable, accrued expenses, and billings in
excess of costs and estimated earnings, but only to the extent of the monetary
amount of such obligations or liabilities so reflected;

  (ii)   the obligations and liabilities of Seller arising after the Closing
Date under (A) Contracts described in Section 4.13 of the Disclosure Schedule
(other than the Contracts set forth on Schedule 2.1); and (B) any executory
Contracts which relate to the Business and are not required to be listed in the
Disclosure Schedule pursuant to Section 4.13(a); provided, however, Purchaser is
not assuming (x) any Liabilities of Seller in respect of a breach of or default
under any such Contracts and (y) any Liabilities of Seller under any Contract
(written or oral) with MMS; and

  (iii)  any Liability for Transfer Taxes allocated to Purchaser under
Section 2.8.

(b)     Purchaser shall not assume or pay any, and Seller shall continue to be
responsible for each, Liability of Seller whether or not relating to the
Business, not expressly assumed by Purchaser in Section 2.7(a) (collectively,
the “Retained Liabilities”). Specifically, without limiting the foregoing, the
Retained Liabilities shall include the following:

  (i)    any Indebtedness of Seller, including the note payable to the City of
Decatur;

 

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  (ii)     any Liability arising out of or relating to the Retained Assets;

  (iii)    any Liability (whether direct or as a result of transferee liability,
joint and several liability, contractual liability) of Seller for Taxes
(including all income Taxes incurred on, after, or before the Closing Date) that
are unrelated to the Purchased Assets, the Business, or the Transferred
Employees (whether accrued or payable on, after, or before the Closing Date and
whether or not reserved for on the Final Closing Balance Sheet) and any
Liability (whether direct or as a result of transferee liability, joint and
several liability, contractual liability) for Taxes (excluding Transfer Taxes)
for periods (or portions thereof) ending on the Closing Date (including, for the
avoidance of doubt, any Taxes allocated to such periods (or portions thereof)
pursuant to Section 8.12) that are related to the Purchased Assets, the
Business, or the Transferred Employees (whether accrued or payable on, after, or
before the Closing Date and whether or not reserved for on the Final Closing
Balance Sheet);

  (iv)   any Liability for Transfer Taxes allocated to Seller under Section 2.8;

  (v)    all Seller’s income Taxes resulting from the transactions contemplated
by this Agreement;

  (vi)   all Liabilities and obligations relating to current or former
employees, directors, agents, consultants or other independent contractors
relating to services performed, benefit accruals or claims accrued or incurred
prior to the Closing Date, including (A) any and all amounts owed to any current
or former employee under any deferred compensation arrangement (including
amounts owed to Jon G. Nieman) and (B) any Liabilities arising out of Seller’s
participation in or under any multiemployer plan, including any withdrawal
liability thereunder;

  (vii)   all Liabilities of Seller (other than Assumed Liabilities) arising out
of any Proceeding or Order related to the Business, the Purchased Assets or
Seller arising out of events, transactions, facts, acts or omissions which
occurred prior to the Closing, including personal injury or property damage,
product liability or strict liability, in all cases, whether or not disclosed in
the Disclosure Schedule (including any subsequent Proceeding or Order related to
any pending matters);

  (viii)  any Liabilities of Seller (other than Assumed Liabilities) related to
the Business or the Purchased Assets of any kind or nature, whether known or
unknown, absolute, accrued, contingent or otherwise, or whether due or to become
due, arising out of events, transactions, facts, acts or omissions which
occurred prior to the Closing, in all cases, whether or not disclosed in the
Disclosure Schedule or in the Financial Statements;

 

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  (ix)    any Liabilities arising out of or related to any Contract to which
Seller is a party or bound (including any Government Contract or Government
Subcontract) to the extent such Liability results from, arises out of, or is
caused by any act of (or failure to act by) Seller prior to the Closing,
including a breach of or default under any such Contracts prior to the Closing
or any Liability of Purchaser to any Person (including any Governmental
Authority) resulting from any obligation of Purchaser to guarantee, indemnify,
or assume the liabilities of Seller’s performance of any such Contract under the
terms of any consent or Novation Agreement;

  (x)    any Liability (other than Assumed Liabilities referenced in
Section 2.7(a)(ii)) arising from guarantees, warranty claims or other Contract
terms with respect to services rendered by Seller on or prior to the Closing
Date;

  (xi)    any accrued insurance charges or insurance claims, retroactive
insurance rate adjustments or insurance premiums payable for pre-Closing
periods;

  (xii)   any amounts payable to a Shareholder or any Affiliate of such
Shareholder;

  (xiii)  any Liabilities of the Seller of any kind or nature, whether known or
unknown, absolute, accrued, contingent or otherwise, arising out of events,
transactions, facts, acts or omissions which occur subsequent to the Closing;

  (xiv)  any Liability under the Surety Contract;

  (xv)   any Liability under any Seller’s Employment Contract; and

  (xvi)  all Liabilities listed on Schedule 2.7 attached hereto.

2.8      Transfer Taxes. Any and all transfer, sales, use, purchase, value
added, excise, real property, personal property, intangible stamp, or similar
Taxes (collectively, “Transfer Taxes”) imposed on, or resulting from, the
transfer (as contemplated by this Agreement or the documents delivered in
accordance with Article III) of any Purchased Assets (including those Transfer
Taxes imposed on Purchaser or the Purchased Assets), regardless of when payable,
shall be paid fifty percent (50%) by Seller and fifty percent (50%) by
Purchaser. Seller and Purchaser shall cooperate with each other in good faith,
and take such commercially reasonable actions as are available, to reduce or
eliminate any Transfer Taxes. Unless applicable law requires that Seller file
and pay a Transfer Tax or the parties otherwise agree, Purchaser shall prepare
and timely file any Tax Returns required to be filed with respect to Transfer
Taxes and shall timely pay any Taxes due and owing with respect to such Tax
Returns, subject to receipt from Seller of its share of such Taxes.

2.9      Allocation. Purchaser and Seller agree to allocate the Aggregate
Purchase Price (and Assumed Liabilities and other relevant items) among the
Purchased Assets (including the Backlog) in accordance with Schedule 2.9 (the
“Purchase Price Allocation Schedule”). For this purpose, the parties agree that
the Cash Purchase Price and the Assumed Liabilities shall be allocated first to
the Class II assets (as defined under Section 1060 of the Code), then Class III,
then Class IV, etc., in an amount not in excess of the fair market value of each
respective class

 

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(except Class VII shall not be so limited) and then the Seller Note and finally,
the Earnout, if any, shall be allocated to any remaining asset classes,
provided, however, that $541,000 of the Cash Purchase Price shall be allocated
to the covenants-not-to-compete under this Agreement and any ancillary
agreements. The parties hereto agree for all Tax reporting purposes to report
the transactions in accordance with the Purchase Price Allocation Schedule and
to not take any position during the course of any audit or other proceeding
inconsistent with such schedule unless required by a determination of the
applicable Governmental Authority that is final. The parties hereto shall make
appropriate adjustments to the Purchase Price Allocation Schedule to reflect
changes in the Aggregate Purchase Price.

ARTICLE III

Closing and Closing Date Deliveries

3.1     Closing.

(a)      Closing. The term “Closing” as used herein shall refer to the actual
conveyance, transfer, assignment and delivery of the Purchased Assets to
Purchaser in exchange for the consideration delivered to Seller pursuant to
Section 2.3(a). The Closing shall take place at the offices of Winston & Strawn
LLP, 35 West Wacker Drive, Chicago, Illinois 60601, at 10:00 a.m. local time on
the date hereof, or at such other place and time or on such other date (or by
exchange of facsimile or PDF signatures) as is mutually agreed to in writing by
Seller and Purchaser (“Closing Date”).

(b)      Effective Time. The Closing shall be deemed effective as of 12:01 a.m.
on the Closing Date (the “Effective Time”).

3.2     Closing Deliveries by Seller. At the Closing, Seller shall deliver to
Purchaser:

(a)      a Bill of Sale and Assignment Agreement (the “Seller Bill of Sale and
Assignment Agreement”), as executed by Seller; and all such other bills of sale,
lease assignments, trademark assignments, copyright assignments, patent
assignments, employee work product assignments, contract assignments, vehicle
and vessel titles (and any other appropriate vessel title transfer
documentation) and other documents and instruments of sale, assignment,
conveyance and transfer, as Purchaser may deem reasonably necessary or
desirable;

(b)      a Bill of Sale and Assignment Agreement (the “Shareholder Bill of Sale
and Assignment Agreement”), as executed by Mr. Matteson with respect to the
Shareholder Assets; and all such other bills of sale, contract assignments,
vehicle and vessel titles (and any other appropriate vessel title transfer
documentation) and other documents and instruments of sale, assignment,
conveyance and transfer, as Purchaser may deem reasonably necessary or
desirable;

(c)      the Assumption Agreement (the “Assumption Agreement”), as executed by
Seller reflecting the assumption by Purchaser of the liabilities set forth in
Section 2.7(a);

(d)      a certificate of the Secretary or an Assistant Secretary of Seller
certifying as to: (i) the articles of incorporation of Seller, as certified by
the Secretary of State of the State

 

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of Iowa not earlier than thirty (30) days prior to the Closing Date; (ii) the
by-laws, as amended, of Seller; (iii) resolutions of the Board of Directors of
Seller and the Shareholders authorizing and approving the execution, delivery
and performance by Seller of this Agreement and any agreements, instruments,
certificates or other documents executed by Seller pursuant to this Agreement;
and (iv) the incumbency and signatures of the officers of Seller;

(e)      a certificate of the Secretary of State of the State of Iowa and in
each other state set forth in Section 4.1(a) of the Disclosure Schedule, in each
case as of a date not earlier than thirty (30) days prior to the Closing Date,
as to the good standing and foreign qualification in each such state;

(f)      the consents, authorizations, approvals and novations of the
Governmental Authorities and other Persons set forth in Schedule 3.2(f),
together with any and all other consents, authorizations and approvals of other
Persons under additional Contracts identified in Section 4.3 of the Disclosure
Schedule that have been obtained by Seller as of the Closing;

(g)     with respect to the Little Rock Lease, a Landlord Consent and Estoppel
Certificate, as executed by the landlord of such Leasehold Interest;

(h)      a lease for Seller’s corporate headquarters and primary operating
facility located in Burlington, Iowa (the “Burlington Lease”), as executed by
Seller as “landlord” thereunder;

(i)      an assignment of lease (the “Assignment of Lease”), as executed by
Seller, reflecting the assignment to Purchaser of that certain Lease Agreement,
dated January 1, 2007, between W.B. Isgrig & Sons, Inc. and Seller (the “Little
Rock Lease”);

(j)      each Employment and Non-Compete Agreement as executed by Larry W.
Matteson and Jon G. Nieman, respectively;

(k)     the Shareholder Consulting and Non-Compete Agreement as executed by
Mr. Matteson;

(l)      a certificate, duly completed and executed by Seller pursuant to
Section 1.1445-2(b)(2) of the Treasury regulations promulgated under the Code,
certifying that such Seller is not a “foreign person” within the meaning of
Section 1445 of the Code;

(m)    for each Registered Vessel, copies of all current Coast Guard
Certificates of Documentation on such Registered Vessel, and Title Abstracts for
each Registered Vessel issued by the USCG no more than five (5) calendar days
prior to the Closing Date;

(n)     all documents necessary to amend Seller’s name to not include “L.W.
Matteson,” “Matteson Dredging” or any derivative thereof or any other similar
name, which shall be duly executed and in a form that Purchaser may file in the
State of Iowa and in each other state in which Seller is qualified to transact
business;

 

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(o)      a subcontract between Seller and Purchaser, as executed by Seller,
pending novation and consent of Government Contracts and Government Subcontracts
(the “Subcontract Agreement”);

(p)      a certificate, in form and substance reasonably satisfactory to
Purchaser, pursuant to which Mr. Matteson represents and warrants to Purchaser
that all Shareholder Assets are owned by Mr. Matteson and he has good and valid
title to all such Shareholder Assets free and clear of any Liens other than
Permitted Liens;

(q)      evidence, in form reasonably satisfactory to Purchaser, of the renewal
of the Little Rock Lease for a twelve-month term ending on December 31, 2011;
and

(r)       such other documents as Purchaser may reasonably request to carry out
the purposes of this Agreement.

3.3     Closing Deliveries by Purchaser. At the Closing, Purchaser shall deliver
to Seller:

(a)      the Seller Note and the Security Agreement, each as executed by
Purchaser together with all UCC financing statements contemplated thereby;

(b)      the payments to be delivered by Purchaser pursuant to
Section 2.3(a)(ii) and Section 2.3(a)(iii);

(c)      a certificate of the Secretary or an Assistant Secretary of Purchaser
certifying as to: (i) the certificate of formation of Purchaser, as certified by
the Secretary of State of the State of Delaware not earlier than thirty
(30) days prior to the Closing Date; (ii) the limited liability company
agreement of Purchaser; (iii) the resolutions of the Board of Directors of
Purchaser authorizing and approving the execution, delivery and performance by
Purchaser of this Agreement and any agreements, instruments, certificates or
other documents executed by Purchaser pursuant to this Agreement; and (iv) the
incumbency and signatures of the officers of Purchaser;

(d)      a certificate of the Secretary of State of the State of Delaware, as of
a date not earlier than thirty (30) days prior to the Closing Date, as to the
good standing of Purchaser;

(e)      the Assumption Agreement as executed by Purchaser;

(f)       the Seller Bill of Sale and Assignment Agreement as executed by
Purchaser;

(g)      the Shareholder Bill of Sale and Assignment Agreement as executed by
Purchaser;

(h)      the Burlington Lease as executed by Purchaser;

(i)       the Assignment of Lease as executed by Purchaser;

 

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(j)       the Employment and Non-Compete Agreements as executed by Purchaser;

(k)      the Shareholder Consulting and Non-Compete Agreement as executed by
Purchaser;

(l)       the Subcontract Agreement as executed by Purchaser; and

(m)     such other documents as Seller may reasonably request to carry out the
purposes of this Agreement.

3.4     Cooperation. Seller and Purchaser shall, on written request, on and
after the Closing Date, reasonably cooperate with one another by furnishing any
additional information, executing and delivering any additional documents and/or
instruments and doing any and all such other things as may be reasonably
required by the parties to consummate or otherwise implement the transactions
contemplated by this Agreement, in each case without materially increasing such
party’s legal or economic burden.

ARTICLE IV

Representations and Warranties of Seller

Seller represents and warrants to Purchaser as follows, in each case as of the
date hereof (or, if made as of a specified date, as of such date). Any
information set forth in a particular section or subsection of the Disclosure
Schedule shall be deemed to be disclosed in each other section or subsection of
the Disclosure Schedule to which the relevance of such information is reasonably
apparent from the nature of the information or disclosure.

4.1     Due Incorporation.

(a)      Seller is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Iowa. Seller is not required to be
qualified as a foreign corporation in any jurisdiction, other than in the States
set forth in Section 4.1(a) of the Disclosure Schedule and Seller is so
qualified and in good standing therein. Seller has all requisite corporate power
and authority to carry on the Business and to own and use the assets and
properties owned and used by it.

(b)      Each Shareholder owns, beneficially and of record, the number of shares
of capital stock of Seller set forth opposite such Shareholder’s name in
Section 4.1(b) of the Disclosure Schedule, which are all of the issued and
outstanding shares of capital stock of Seller. Shareholders own, beneficially
and of record, all of the issued and outstanding shares of capital stock of MMS.

(c)      Seller does not own, directly or indirectly, any capital stock of, or
other equity interests in, any corporation, partnership, limited liability
company, joint venture or other entity.

 

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4.2     Authority.

(a)      Seller has the corporate right and power to enter into, and perform its
obligations under this Agreement and each other agreement delivered in
connection herewith to which it is a party; and has taken all requisite
corporate action to authorize the execution, delivery and performance of this
Agreement and each such other agreement and the consummation of the sale of the
Purchased Assets and other transactions contemplated by this Agreement; and this
Agreement has been duly authorized, executed and delivered by Seller and is
binding upon, and enforceable against, Seller in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting enforcement of
creditors’ rights generally and by general principles of equity (whether applied
in a proceeding at law or in equity).

(b)      Each Shareholder has the legal capacity, right and power to enter into,
and perform his obligations under this Agreement and each other agreement
delivered in connection herewith to which he is a party; and this Agreement has
been duly executed and delivered by such Shareholder and is binding upon, and
enforceable against, such Shareholder in accordance with its terms, except as
such enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting enforcement of creditors’ rights
generally and by general principles of equity (whether applied in a proceeding
at law or in equity).

4.3      No Violations and Consents.

(a)      Neither the execution, delivery and performance of this Agreement by
Seller or either Shareholder nor the consummation of the sale of the Purchased
Assets, does or will, after the giving of notice, or the lapse of time, or
otherwise, (i) conflict with, result in a breach of, or constitute a default
under, the articles of incorporation or by-laws of Seller, or any Law or Order
to which Seller is a party or by which Seller or any of the Purchased Assets is
subject or bound; or (ii) result in the creation of any Lien or other material
adverse interest upon any of the Purchased Assets.

(b)      Except as set forth in Section 4.3 of the Disclosure Schedule, (i) no
consent, authorization or approval of, filing or registration with or giving of
notice to, any Governmental Authority or any other Person is necessary in
connection with the execution, delivery and performance by Seller or either
Shareholder of this Agreement or the consummation of the transactions
contemplated hereby and (ii) neither the execution, delivery and performance of
this Agreement by Seller or either Shareholder nor the consummation of the sale
of the Purchased Assets, does or will, after the giving of notice, or the lapse
of time, or otherwise, (A) terminate, amend or modify, or give any party the
right to terminate, amend, modify, abandon, or refuse to perform, or take any
other action under, any Contract or plan to which Seller is a party; or
(B) accelerate or modify, or give any party the right to accelerate or modify,
the time within which, or the terms under which, any duties or obligations are
to be performed, or any rights or benefits are to be received, under any
Contract or plan to which Seller is a party.

4.4     Brokers. Except as set forth in Section 4.4 of the Disclosure Schedule,
neither this Agreement nor the sale of the Purchased Assets was induced or
procured through any Person acting on behalf of, or representing the
Shareholders or Seller or any of its Affiliates as broker, finder, investment
banker, financial advisor or in any similar capacity.

 

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4.5     Required Assets. All of the rights, properties and assets utilized or
required by Seller in connection with owning and operating the Business as
currently conducted are (a) either owned by Seller or licensed or leased to
Seller under one of the Contracts conveyed to Purchaser under this Agreement;
and (b) included in the Purchased Assets (other than the Retained Assets).
Seller does not have any rights, properties or assets other than the Purchased
Assets or the Retained Assets.

4.6     Related Party Transactions. Except as set forth in Section 4.6 of the
Disclosure Schedule, neither Seller or any of its Shareholders or Affiliates nor
any of their respective directors, officers or management employees (a) owns
five percent (5%) or more of any class of securities of, or has an equity
interest of five percent (5%) or more in, any Person which has any business
relationship (as charterer, lessor, supplier, customer, consultant or otherwise)
with the Business; or (b) owns, or has any interest in, any right, property or
asset which is utilized or required by Seller in connection with owning or
operating the Business.

4.7     Title to Purchased Assets.

(a)

  (i)       On the Interim Balance Sheet Date, Seller had, and on the date
hereof Seller has, good and valid title to all of the Purchased Assets (other
than the Shareholder Assets) existing on such date free and clear of any Liens,
other than Permitted Liens and Liens contemplated by this Agreement to be
released upon the Closing.

  (ii)      On the Interim Balance Sheet Date, Mr. Matteson had, and on the date
hereof Mr. Matteson has, good and valid title to all of the Shareholder Assets
existing on such date free and clear of any Liens, other than Permitted Liens
and Liens contemplated by this Agreement to be released upon the Closing.

(b)

  (i)       At the Closing, Seller shall sell, assign, convey, transfer and
deliver to Purchaser good and valid title to all of the Purchased Assets (other
than the Shareholder Assets) free and clear of any Liens, other than Permitted
Liens.

  (ii)      At the Closing, Mr. Matteson shall sell, assign, convey, transfer
and deliver to Purchaser good and valid title to all of the Shareholder Assets
free and clear of any Liens, other than Permitted Liens.

(c)

  (i)       Set forth as Section 4.7(c)(i) of the Disclosure Schedule is a
correct and complete list of all of Seller’s personal property utilized or
required by Seller in connection with owning or operating the Business as of
December 24, 2010, other than any item of such personal property having a cost
basis of less than $10,000.

 

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  (ii)      Mr. Matteson does not own any property utilized or required by
Seller in connection with owning or operating the Business, other than the
Shareholder Assets and other than any such property that is personal in nature
and not material to the Business.

4.8     Condition of Assets. To Seller’s Knowledge, except as set forth in
Section 4.8 of the Disclosure Schedule, all of the equipment, machinery, tools
and other tangible personal property included in the Purchased Assets (other
than the Marine Assets, as to the condition of which Seller represents in
Section 4.10(c)), including the Shareholder Assets, are in good operating
condition and repair, ordinary wear and tear excepted, and are free from defects
other than such minor defects as do not interfere with the intended use thereof
in the conduct of the Business or materially adversely affect the resale value
thereof. Purchaser acknowledges and agrees that Seller shall have no obligation
hereunder, including under Section 6.1, to complete or pay for the repairs,
maintenance and deficiencies described in Section 4.8 of the Disclosure
Schedule.

4.9     Real Estate.

(a)      Section 4.9(a) of the Disclosure Schedule sets forth a correct and
complete list of each location at or from which Seller conducts the Business
(the “Facilities”).

(b)      Section 4.9(b) of the Disclosure Schedule sets forth a correct and
complete list of each parcel of real property owned by Seller (together with all
buildings, fixtures and improvements erected thereon and all easements and other
rights and interests appurtenant thereto, including the straddle crane attached
to the Burlington, Iowa property owned by Seller, the “Owned Real Property”),
showing the record title holder and legal address with respect to such Owned
Real Property. Except as set forth in Section 4.9(b) of the Disclosure Schedule,
the Company has not leased or otherwise granted to any Person the right to use
or occupy such Owned Real Property or any portion thereof. Seller owns each
parcel of Owned Real Property free and clear of all Liens, other than Permitted
Liens.

(c)      Section 4.9(c) of the Disclosure Schedule sets forth a correct and
complete list of all Leasehold Interests (collectively referred to as the
“Leased Real Properties” and together with the Owned Real Property, the
“Properties”) leased by Seller. With respect to each Leasehold Interest, except
as set forth in Section 4.9(c) of the Disclosure Schedule: (i) Seller has a
valid and assignable interest or estate in such Leasehold Interest, free and
clear of all Liens other than Permitted Liens; (ii) such Leasehold Interest is
in full force and effect, valid and enforceable by and against Seller and, to
Seller’s Knowledge, the lessor or landlord thereof in accordance with its terms;
(iii) such Leasehold Interest constitutes the entire agreement to which Seller
is a party with respect to the leasing or use of the subject Leased Real
Property; (iv) except for Permitted Liens, Seller has not assigned, sublet,
transferred, conveyed, mortgaged, deeded in trust or encumbered any interest in
the interest or estate created thereby; (v) to Seller’s Knowledge, all
facilities located on or comprising the Properties have received all permits
required in connection with the operation thereof and Seller has not received
any written notice of any material violation of applicable Laws with respect
thereto; and (vi) Seller has not received any notice of default pursuant to a
Leasehold Interest, no rentals are past due and no condition exists that is or
could be a default by any party under a Leasehold Interest.

 

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(d)      There are no claims, governmental investigations, litigation or
proceedings which are pending or, to the Seller’s Knowledge, threatened in
writing against the Properties or Seller with respect to the Properties. No
condemnation or eminent domain proceedings have been initiated by service of
process on Seller which relate to the Properties, and no such proceedings are,
to Seller’s Knowledge, threatened in writing or have been filed by any
Governmental Authority with respect to the Properties.

(e)      Seller is not in default under and has not breached, and the Properties
do not violate, and no event has occurred or is continuing which with notice or
the passage of time, or both, would constitute a default by the Seller under any
covenants, restrictions, rights-of-way, licenses, agreements or easements
affecting title to or relating to the use of the Properties, and no such
covenants, restriction, right-of-way, license, agreement or easement prohibits
in any material way the right of Seller to operate the Business at the
Properties, nor has Seller received any written notice or have any Knowledge of
any fence dispute, boundary dispute, boundary line question, water dispute or
drainage dispute concerning or affecting the Properties.

4.10    Marine Assets.

(a)

  (i)       Section 4.10(a) of the Disclosure Schedule sets forth a correct and
complete list of all vessels (the “Seller Vessels”) and all material
vessel-related equipment, parts, and supplies owned by Seller (collectively with
the Seller Vessels, the “Seller Marine Assets”). Section 4.10(a) of the
Disclosure Schedule sets forth a correct and complete list of all vessels (the
“Shareholder Vessels”, and together with the Seller Vessels, the “Vessels”) and
all material vessel-related equipment, parts, and supplies owned by Mr. Matteson
(collectively with the Shareholder Vessels, the “Shareholder Marine Assets”, and
together with the Seller Marine Assets, the “Marine Assets”). Except as set
forth in Section 4.10(a) of the Disclosure Schedule, neither Seller nor
Mr. Matteson has chartered or otherwise granted to any Person the right to use,
control or dispose of any such Marine Assets.

  (ii)      Seller owns, and has good and valid title to, all Seller Marine
Assets free and clear of all Liens other than Permitted Liens.

  (iii)     Mr. Matteson owns, and has good and valid title to, the Shareholder
Marine Assets free and clear of all Liens other than Permitted Liens.

  (iv)     Seller has provided Purchaser with copies of all mortgages, claims of
lien, and related documents related to the Vessels and other Marine Assets.
Section 4.10(a) of the Disclosure Schedule identifies each Vessel under the
heading “Registered Vessels” that is properly documented under the laws of the
United States and the owner thereof.

(b)     Section 4.10(b) of the Disclosure Schedule sets forth a correct and
complete list of all vessels over which Seller may exercise control by charter
or other specified agreement (the “Chartered Vessels”). Except as set forth in
Section 4.10(b) of the Disclosure Schedule, the Seller has not sub-chartered or
otherwise granted to any Person the right to use,

 

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control or dispose of any such Chartered Vessels. With respect to such Chartered
Vessels, (i) Seller has not received any written notice that it is in default of
any charter or other specified agreement and, to Seller’s Knowledge, there are
no circumstances that would constitute, as of the Closing Date or with the
passage of time or the giving of notice, a default of any such charter or other
specified agreement; (ii) Seller has the right to assign and transfer its
interests in such Chartered Vessels and any required consents or approvals of
the owners or owners pro hac vice of such Chartered Vessels has been obtained as
set forth in Section 4.10(b) of the Disclosure Schedule; and (iii) Seller is in
compliance with all terms and conditions of any charters or other agreements
related to such Chartered Vessels and is not in default under any such charters
or other agreements.

(c)      To Seller’s Knowledge, except as otherwise set forth in Section 4.10(c)
of the Disclosure Schedule, all the Vessels, Chartered Vessels, and other Marine
Assets are in class, in good working order, with all applicable surveys,
inspections, drydock and/or underwater examinations up to date, with all
required certificates and approvals current, valid, and up to date. Purchaser
acknowledges and agrees that Seller shall have no obligation hereunder,
including under Section 6.1, to complete or pay for the repairs, maintenance and
deficiencies described in Section 4.10(c) of the Disclosure Schedule. Seller has
provided to Purchaser copies of all current surveys, inspections, condition
reports, and other documents related to the physical condition of the Vessels,
Chartered Vessels, and other Marine Assets.

(d)      Except as otherwise set forth in Section 4.10(d) of the Disclosure
Schedule, all Vessels (i) were built in the United States, (ii) are properly
documented under the flag of the United States in the name of Seller with valid
United States coastwise trade endorsements or are exempt from documentation but
would otherwise be eligible for documentation and coastwise trade endorsements,
and (iii) are not, or would not be, subject to loss or revocation of United
States documentation or coastwise trade privileges pursuant to 46 U.S.C. § 12132
or otherwise.

(e)

  (i)       Seller is, and has been at all times that it has held any ownership
interest in the Seller Vessels, or any of them, a citizen of the United States
as defined by 46 U.S.C. § 50501 and eligible to own vessels in the United States
coastwise trade pursuant to 46 U.S.C. § 12103.

  (ii)      Mr. Matteson is, and has been at all times that he has held any
ownership interest in the Shareholder Vessels, or any of them, a citizen of the
United States as defined by 46 U.S.C. § 50501 and eligible to own vessels in the
United States coastwise trade pursuant to 46 U.S.C. § 12103.

(f)      All Vessels, Chartered Vessels, and other Marine Assets are insured
against risk of loss and/or property damage by policies of hull insurance as
listed in Section 4.16 of the Disclosure Schedule. All Vessels, Chartered
Vessels, and other Marine Assets are insured against risk of claims arising from
torts, salvage, collision, allusion, personal injury, death, or otherwise under
policies of marine protection and indemnity insurance as listed in Section 4.16
of the Disclosure Schedule. Seller has delivered to Purchaser complete and
correct copies of all policies of hull and machinery insurance, protection and
indemnity insurance, and any other forms of insurance covering such Vessels,
Chartered Vessels, and other Marine Assets.

 

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(g)      Section 4.10(g) of the Disclosure Schedule sets forth a correct and
complete listing of all pending claims against Seller and/or Mr. Matteson or any
of the Vessels, Chartered Vessels, or other Marine Assets by any Person, and all
pending claims by Seller and/or Mr. Matteson or any of the Vessels, Chartered
Vessels, or other Marine Assets against any Person, including against its or his
insurers, whether or not submitted for payment or resolution. For purposes of
this subsection, the term “pending claims” shall include all actual or, to
Seller’s Knowledge, potential claims.

(h)      Section 4.10(h) of the Disclosure Schedule sets forth a correct and
complete list of all vessels under construction, directly or indirectly on
behalf of Seller, or over which Seller exercises any control or in which Seller
has any financial or executive interest, and Section 4.10(h) of the Disclosure
Schedule further sets forth the most recent status of such vessels under
construction and the current delivery schedule for such vessels under
construction. With regard to all such vessels under construction, Seller has
delivered to Purchaser complete and correct copies of all vessel construction
contracts, specifications, progress reports, financing documents, refund
guarantees, vessel supervisor subcontracts, contracts for owner-furnished
equipment, and all other material related documents.

(i)       Section 4.10(i) of the Disclosure Schedule sets forth a correct and
complete listing of all personnel employed by Seller on the Vessels or Chartered
Vessels as officers, seamen or otherwise (all such persons, collectively,
“Crew”), and to Seller’s Knowledge, the licenses or merchant marine credentials
held by such Crew, and any employment contracts, collective bargaining
agreements, or other arrangements under which such Crew are employed on the
Vessels or Chartered Vessels.

(j)       Except as disclosed in Section 4.10(j) of the Disclosure Schedule,
there is no pending or, to Seller’s Knowledge, threatened violation of Law,
condition of class or condition of relevant bonds and certificates of financial
responsibility related to the use or operation of any of the Vessels, Chartered
Vessels, other Marine Assets or Crew.

4.11   Litigation and Compliance with Laws.

(a)      Except as set forth in Section 4.11 of the Disclosure Schedule, there
is no Proceeding pending or, to Seller’s Knowledge, threatened against or
affecting Seller, Shareholders or the Business, or any of the Purchased Assets
or Seller’s right to own the Purchased Assets or operate the Business; and, to
Seller’s Knowledge, there are no facts or contemplated events which may
reasonably be expected to give rise to any such Proceeding. Seller is not
subject to any Order.

(b)      There are no Proceedings pending or, to Seller’s Knowledge, threatened
against Seller or Shareholders with respect to this Agreement, or in connection
with the transactions contemplated hereby.

(c)      Except as disclosed in Section 4.11 of the Disclosure Schedule, Seller
has owned and operated the Business and the Purchased Assets, and owns and
operates the Business

 

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and the Purchased Assets, in compliance with all applicable Laws. Seller has no
Liability with respect to any violation of any applicable Law, including any
remediation required by, or penalties or other amounts payable to, the USCG.
Without limiting the generality of the foregoing, all of the violations
referenced in the USCG Notices of Violation dated October 7, 2009, March 17,
2010 and April 13, 2010 received by Seller have been corrected to the
satisfaction of the USCG.

4.12    Intellectual Property.

(a)      Section 4.12 of the Disclosure Schedule sets forth the correct and
complete schedule of all material trade names, trademarks, trademark
registrations, trademark applications, domain names, servicemarks, servicemark
registrations, servicemark applications; copyrights, copyright registrations,
copyright applications; patent rights (including issued patents, applications,
divisions, continuations and continuations-in-part, reissues, patents of
addition, utility models and inventors’ certificates) owned by Seller and any
licenses or sublicenses with respect to the foregoing which are utilized or
required in the conduct of the Business (other than shrink-wrapped software with
a replacement cost and/or annual license fee of less than a total cost of Ten
Thousand Dollars ($10,000)). All registrations listed in Section 4.12 of the
Disclosure Schedule are in good standing, valid, subsisting and in full force
and effect in accordance with their terms. Except as set forth in Section 4.12
of the Disclosure Schedule, no licenses, sublicenses, covenants or agreements
have been granted or entered into by Seller in respect of any of such trade
names, trademarks, servicemarks, copyrights or patents or any applications
therefor.

(b)      There are no patents, trademarks, trade names, servicemarks or
copyrights necessary for the conduct of the Business as presently operated,
except those included in the Purchased Assets.

(c)      To Seller’s Knowledge, there is not now and has not been during the
past three (3) years any infringement, misuse or misappropriation by Seller of
any patent, trademark, trade name, servicemark, copyright or trade secret and
which is owned or licensed by any third party, and there is not now any pending
or, to Seller’s Knowledge, threatened Proceeding against Seller for
infringement, misuse or misappropriation of any patent, trademark, trade name,
servicemark, copyright or trade secret of any third party.

(d)      There is no pending or threatened Proceeding by Seller against others
for infringement, misuse or misappropriation of any patent, trademark, trade
name, servicemark, copyright or trade secret owned or licensed by Seller and
which is utilized or required in the conduct of the Business.

(e)      No Shareholder, officer, director or Affiliate of Seller owns, directly
or indirectly, in whole or in part, any invention, patent, proprietary right,
trademark, servicemark, trade name, brand name or copyright or application
therefor (i) which Seller is presently using in the conduct of the Business; and
(ii) the use of which is necessary for the conduct of the Business.

 

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4.13     Contracts.

(a)       Section 4.13 of the Disclosure Schedule contains a correct and
complete list of all personal property leases and all other Contracts, to which
Seller is a party and relating to the Purchased Assets or operation of the
Business, except Contracts which have a term of one (1) year or less and involve
payment by or to Seller of $25,000 or less.

(b)       All Contracts to be transferred, assigned or conveyed to Purchaser
under this Agreement are valid, binding and enforceable by and against Seller
and, to Seller’s Knowledge, the other parties thereto in accordance with their
terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting enforcement of
creditors’ rights generally and by general principles of equity (whether applied
in a proceeding at law or in equity).

(c)       Neither Seller nor, to Seller’s Knowledge, any other Person is in
breach of, or default under, any Contract to be conveyed to Purchaser under this
Agreement, and no event or action has occurred, is pending, or, to Seller’s
Knowledge, is threatened, which, after the giving of notice, or the lapse of
time, or otherwise, would constitute a breach by Seller, or to Seller’s
Knowledge, any other Person, or a default by Seller, or, to Seller’s Knowledge,
any other Person, under any Contract to be conveyed to Purchaser under this
Agreement.

4.14     Financial Statements and Related Matters.

(a)       Seller has delivered to Purchaser correct and complete copies of the
Financial Statements. The Financial Statements were prepared in accordance with
GAAP consistently applied and present fairly in all material respects the
financial position and results of operations of Seller at the dates and for the
periods indicated therein; provided, however, that the Interim Financial
Statements do not contain all notes required under GAAP for audited financial
statements and are subject to normal year-end audit adjustments (the effect of
which will not, individually or in the aggregate, be material).

(b)       Seller maintains and complies in all material respects with a system
of accounting controls sufficient to provide reasonable assurances that: (i) its
business is operated in accordance with management’s general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of Seller’s financial statements in conformity with GAAP, and to maintain
accountability for items therein; (iii) access to properties and assets is
permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for items is compared with
the actual levels at regular intervals and appropriate actions are taken with
respect to any differences.

(c)       Except to the extent reflected or reserved for on the Interim Balance
Sheet or included as a Current Liability in the Estimated Net Working Capital,
Seller does not have any Liabilities, other than (a) Liabilities under Contracts
entered into in the Ordinary Course of Business (which, to the extent required
by Section 4.13, are identified on Section 4.13 of the Disclosure Schedule),
(b) Liabilities incurred since the Interim Balance Sheet Date in the Ordinary
Course and not otherwise in contravention of this Agreement and (c) Retained
Liabilities.

 

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(d)      All of the Accounts Receivable which are reflected in the Interim
Balance Sheet (other than the Affiliate Receivables) were acquired by Seller in
the Ordinary Course; and all of the Accounts Receivable which have been or will
be acquired by Seller since the Interim Balance Sheet Date (other than the
Affiliate Receivables) were or will be acquired in the Ordinary Course. Each of
such Accounts Receivable (other than the Affiliate Receivables) arose or will
arise from bona fide sales of goods or services in the Ordinary Course to
Persons that are not Affiliates of Seller or either Shareholder.

(e)      The determination of the Estimated Net Working Capital hereunder,
including the calculation of costs and estimated earnings in excess of billings
on uncompleted Contracts of the Business and the calculation of billings in
excess of costs and estimated earnings on uncompleted Contracts of the Business,
will be prepared in accordance with GAAP consistently applied and will be based
on the same accounting principles and procedures applied in the preparation of
the Most Recent Audited Financial Statements.

(f)       A correct and complete list of the Backlog in respect of all firm
service orders and Contracts for the delivery of services by Seller pending as
of the date hereof is set forth on Section 4.14(f) of the Disclosure Schedule.
All Contracts related to any Backlog are valid, binding and enforceable by and
against Seller, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
enforcement of creditors’ rights generally and by general principles of equity
(whether applied in a proceeding at law or in equity). No event or action has
occurred, is pending, or, to Seller’s Knowledge, is threatened, which, after the
giving of notice, or the lapse of time, or otherwise, would constitute a breach
or default by Seller, or to Seller’s Knowledge, any other Person, under any
Contract related to Backlog.

(g)       Except as set forth in Section 4.14(g) of the Disclosure Schedule, no
Contracts included in the Backlog as of the Closing Date or reflected in the
Most Recent Audited Financial Statements or the Interim Financial Statements
were entered into as a result of, or arose from, the American Recovery and
Reinvestment Act, the 8(a) Business Development Program as administered by the
U.S. Small Business Administration or any other small or minority business
awards.

(h)       Except as set forth in Section 4.14(h) of the Disclosure Schedule,
(i) there is no scheduled, and Seller has not authorized any, capital
expenditures for the Business and (ii) no capital expenditures are necessary for
the operation of the Business as currently conducted.

(i)        As of the date hereof, Seller has no Indebtedness except as described
in Section 4.14(i) of the Disclosure Schedule; and, as of the Closing, Seller
will have no Indebtedness, except as described in Section 4.14(i) of the
Disclosure Schedule.

4.15    Changes Since the Interim Balance Sheet Date. Since the Interim Balance
Sheet Date, except as set forth in Section 4.15 of the Disclosure Schedule:

(a)       the Business has been conducted and carried on only in the Ordinary
Course;

 

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(b)       except for inventory and supplies purchased, sold or otherwise
disposed of in the Ordinary Course, Seller has not purchased, sold, leased,
mortgaged, pledged or otherwise acquired or disposed of any properties or assets
of or for the Business in an aggregate amount exceeding $25,000;

(c)       Seller has not sustained or incurred any loss or damage (whether or
not insured against) to its properties or assets on account of fire, flood,
accident or other calamity which has interfered with or affected in any material
respect, or may interfere with or affect in any material respect, the operation
of the Business;

(d)       Seller has not made, or become committed to make, any payment,
contribution or award under or into any bonus, pension, profit sharing, deferred
compensation or similar plan, program or trust covering any employee of the
Business, except as disclosed in Section 4.19 of the Disclosure Schedule;

(e)        there has been no Material Adverse Change and, to Seller’s Knowledge,
no state of facts exists which would reasonably be expected to result in a
Material Adverse Change;

(f)        Seller has not made any loans, advances or capital contributions to,
or investments in, any other Person;

(g)       Seller has not changed any accounting systems, policies, principles or
practices (including any change in depreciation or amortization policies or
rates) used with respect to the Business, except as required by GAAP; or

(h)       Seller has not agreed to do any of the items set forth in
Section 4.15(b), (d), (f) or (g).

4.16     Insurance. Section 4.16 of the Disclosure Schedule sets forth all
policies of insurance which are maintained by Seller; and, to Seller’s
Knowledge, all of such policies of insurance in full force and effect in
accordance with their terms. Seller has not been refused any insurance with
respect to the Purchased Assets or Business, and its coverage has not been
limited in any material respect by any insurance carrier to which it has applied
for any such insurance or with which it has carried.

4.17     Licenses and Permits. Section 4.17 of the Disclosure Schedule sets
forth a complete and correct list of all licenses, franchises, permits, fuel
permits, operating authorities, state operating licenses or registrations and
other interstate or intrastate regulatory licenses and other governmental
authorizations held by Seller relating to the Business (collectively,
“Permits”). The Permits are valid and in effect and Seller has not received any
written notice that any Governmental Authority intends to cancel, terminate or
not renew any of the same. Seller holds all permits necessary for the conduct of
the Business as heretofore conducted.

4.18     Environmental Matters.

(a)       During the five years prior to the date hereof, no Hazardous Materials
have been used, transported, manufactured, processed, stored, treated or
disposed, in, beneath or on the Owned Real Property except as necessary to the
conduct of the Business and in compliance with applicable Environmental Laws.

 

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(b)      Except as set forth in Section 4.18(b) of the Disclosure Schedule,
during the five years prior to the date hereof, Seller has not transported,
used, generated, treated, stored or disposed of Hazardous Materials on, into or
beneath the surface of any of the Properties in violation of any applicable
Environmental Laws. There has not occurred, nor is there presently occurring, a
Release or threatened Release of any Hazardous Material on, into, from or
beneath the surface of any of the Properties, and no part of the Properties or,
to Seller’s Knowledge, no part of any parcels adjacent to the Properties,
including the ground water located thereon, is presently contaminated by
Hazardous Materials.

(c)      During the five years prior to the date hereof, Seller has not treated,
transported or disposed, nor has it allowed or arranged for any third parties to
treat, transport, or dispose, any Hazardous Materials, (i) to or at a site
which, was not lawfully permitted to receive such Hazardous Material for such
purpose, (ii) to or at a site which has been placed on the National Priorities
List or its state equivalent, (iii) to or at a site which the United States
Environmental Protection Agency or the relevant state agency has proposed or is
proposing to place on the National Priorities List or its state equivalent, or
(iv) in violation of, or in a manner which gives rise to Liability under, any
Environmental Laws. Seller has not received written notice that Seller is, a
potentially responsible party for a federal or state environmental cleanup site
or for corrective action under any Environmental Law. Seller has not
(A) received any written or oral request for information in connection with any
federal or state environmental cleanup site or (B) undertaken (or been requested
in writing to undertake) any response or remedial actions or cleanup action of
any kind at the request of any Governmental Authority, or at the request of any
other Person.

(d)      Except as identified in Section 4.18(d) of the Disclosure Schedule,
there are no underground storage tanks, aboveground storage tanks, asbestos
containing materials, or PCB containing capacitors, transformers or other
equipment on any of the Owned Real Properties, and to Seller’s Knowledge, on any
of the Leased Real Property. During the five (5) years prior to the date hereof,
there has been no Release from any underground or aboveground storage tank or
any PCB containing transformer, capacitor or equipment, other than in compliance
with applicable Laws. To Seller’s Knowledge, none of the underground or
aboveground storage tanks or the PCB containing capacitors, transformers or
equipment identified in Section 4.18(d) of the Disclosure Schedule has within
the last three (3) years been, and none now need to be, repaired or replaced in
accordance with applicable Laws. Prior to the date hereof, Seller has pumped out
the underground septic tank and remediated the drainage from the maintenance
shed at its Burlington, Iowa facility, in each case in accordance with
applicable law.

(e)      Seller has provided to Purchaser copies of (i) all environmental
audits, assessments, or occupational health studies in the possession of Seller
with respect to the Business or the Purchased Assets within the past three
(3) years, (ii) the results of any groundwater, soil, air or asbestos monitoring
undertaken with respect to any of the Properties, (iii) all citations issued
with respect to the Business or the Purchased Assets within the past three years
under the Occupational Safety and Health Act (29 U.S.C. Sections 651 et seq.)
and (iv) all

 

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claims, Liabilities, litigation, notices of violation, administrative
proceedings or Orders issued with respect to the Business within the past three
(3) years under applicable Environmental Laws.

(f)       Seller does not (i) have pending or on file any application to treat,
incinerate or dispose of PCBs or hold any permit, license or right to incinerate
PCBs, (ii) engage (and it has not engaged) in the land filling of Hazardous
Materials except in compliance with applicable Environmental Laws or
(iii) engage (and it has not engaged) in any road oiling activities nor has it
applied or used oil or Hazardous Materials for dust control or paving purposes.

(g)       Seller is in compliance with all applicable Environmental Laws,
including obtaining and maintaining in effect all Permits required by applicable
Environmental Laws, and Seller is currently in compliance with all such Permits.
Seller has no remaining Liability with respect to the sinking of the vessel, the
“Davy Crockett”, the discharge of oil or other Hazardous Materials as a result
of such accident or any actions or omissions of Seller arising therefrom.

4.19    Employee Benefit Plans.

(a)       Except as set forth in Section 4.19 of the Disclosure Schedule, Seller
does not maintain, sponsor, contribute to or have any liability or contingent
liability with respect to:

(i)        any “employee welfare benefit plan” or “employee pension benefit
plan” as those terms are respectively defined in sections 3(1) and 3(2) of
ERISA, or a “multiemployer plan” (as defined in section 3(37) of ERISA);

(ii)       any retirement or deferred compensation plan, incentive compensation
plan, stock plan, unemployment compensation plan, vacation pay, severance pay,
bonus or benefit arrangement, insurance or hospitalization program or any other
fringe benefit arrangements for any current or former employee, director,
consultant or agent, whether pursuant to contract, arrangement, custom or
informal understanding, which does not constitute an “employee benefit plan” (as
defined in section 3(3) of ERISA); or

(iii)      any employment agreement.

(b)      A correct and complete copy of each of the plans, arrangements and
agreements set forth in Section 4.19 of the Disclosure Schedule (collectively,
the “Benefit Plans”), and all material contracts or agreements relating thereto,
or to the funding thereof, including all material trust agreements, insurance
contracts, administration contracts, investment management agreements,
subscription and participation agreements, and recordkeeping agreements, each as
in effect on the date hereof, has been provided to Purchaser. In the case of any
Benefit Plan which is not in written form, Purchaser has been provided with a
correct and complete description of such Benefit Plan as in effect on the date
hereof. A correct and complete copy of the three (3) most recent annual reports,
and the most recent summary plan description and IRS determination letter with
respect to each such Benefit Plan, to the extent applicable, and the most
recently prepared schedule of assets (and the fair market value thereof assuming
liquidation of any asset which is not readily tradeable) held with respect to
any funded Benefit Plan has been provided to Purchaser.

 

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(c)      As to all Benefit Plans, except as set forth in Section 4.19(c) of the
Disclosure Schedule:

(i)       all Benefit Plans comply in all material respects and have been
administered in form and in operation in all material respects with all
requirements of Law applicable thereto, and there has been no written notice
issued by any Governmental Authority questioning or challenging such compliance;

(ii)      all Benefit Plans that are employee pension benefit plans (as defined
in section 3(2) of ERISA) comply in form and in operation in all material
respects with all applicable requirements of sections 401(a) and 501(a) of the
Code; each such Benefit Plan has a current determination letter issued with
respect thereto by the IRS or otherwise is relying on an opinion letter issued
to the sponsor of the underlying prototype plan; and no event has occurred which
will give rise to disqualification of any such Benefit Plan under such sections
or to a Tax under section 511 of the Code;

(iii)      none of the assets of any Benefit Plan is invested in employer
securities or employer real property;

(iv)      each of the Benefit Plans complies in all material respects with the
requirements of section 409A of the Code;

(v)       all contributions and premiums required by law or the terms of a
Benefit Plan to be paid prior to the Closing have been or will be timely made or
paid in full prior to the Closing;

(vi)       there has been no act or omission which has given rise to fines,
penalties, Taxes, or related charges under sections 502(c), 502(i), 502(l) or
4071 of ERISA or Chapters 43, 47, or 68 of the Code for which Seller or any
ERISA Affiliate of Seller is liable;

(vii)      no action has been taken to correct any defects with respect to any
Benefit Plan under any IRS correction procedure and to Seller’s Knowledge no
such action is required;

(viii)     none of the payments contemplated by the Benefit Plans would, in the
aggregate, constitute excess parachute payments as defined in Section 280G of
the Code (without regard to subsection (b)(4) thereof);

(ix)       neither the execution of this Agreement nor the consummation of the
transactions contemplated by this Agreement will, either alone or in combination
with another event result in (A) any payment of severance or other compensation
to any current or former employee of Seller or (B) result in the acceleration of
the time of payment or vesting of any compensation or benefit;

(x)       there are no material actions, suits or claims (other than routine
claims for benefits) pending or, to Seller’s Knowledge, threatened involving
such Benefit Plans or the assets thereof, and, to Seller’s Knowledge, no facts
exist which would give rise to any such actions, suits or claims (other than
routine claims or benefits);

 

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(xi)     no Benefit Plan is subject to Title IV of ERISA for the funding
requirements of Section 412 of the Code; and no benefit plan is a multiemployer
plan as described in Section 3(37) of ERISA;

(xii)     each Benefit Plan which constitutes a “group health plan” (as defined
in section 607(1) of ERISA or section 4980B(g)(2) of the Code), has been
operated in compliance in all material respects with applicable Law;

(xiii)    neither Seller nor any ERISA Affiliate of Seller has Liability under
any Benefit Plan or otherwise for providing post-retirement medical or life
insurance benefits, other than statutory liability for providing group health
plan continuation coverage under Part 6 of Title 1 of ERISA and section 4980B
(or any predecessor section thereto) of the Code;

(xiv)    there has been no act or omission that would impair the right or
ability of Seller or any ERISA Affiliate of Seller unilaterally to amend or
terminate any Benefit Plan; and

(xv)     there are no pending claims against Seller under any workers
compensation plan or policy or for long term disability.

(d)      Set forth in Section 4.19(d) of the Disclosure Schedule is a correct
and complete list of each former employee of Seller currently receiving health
care continuation coverage under a Seller plan.

4.20    Employment and Labor Matters.

(a)      Prior to the date hereof, Seller has provided to Purchaser a correct
and complete list of all of its employees and their respective start dates,
salary or wages.

(b)      Except as disclosed in Section 4.20 of the Disclosure Schedule, there
is no labor trouble, dispute, grievance, controversy, strike or request for
union representation pending or, to Seller’s Knowledge, threatened against
Seller or affecting the Business.

(c)      Seller is in compliance with all applicable Laws regarding employment
and employment practices, terms and conditions of employment and wages and
hours, and is not engaged in any unfair labor practice. There are no disputes
pending or, to Sellers’ Knowledge, threatened, between Seller and any current or
former employees, which controversies have resulted, or would reasonably be
expected to result, in a Proceeding. There is no unfair labor practice charge or
complaint against Seller pending before the National Labor Relations Board, the
labor relations board or comparable body of any state or foreign jurisdiction,
or any Governmental Authority, and, to Seller’s Knowledge, none is threatened.

(d)      Except as set forth on Section 4.20 of the Disclosure Schedule, Seller
is not a party to, or bound by, any collective bargaining agreement, employment
contract or

 

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consulting agreement. Neither Seller, nor, to Sellers’ Knowledge, any employee
of Seller is in violation of any material term of any employment contract,
noncompetition agreement, collective bargaining agreement, or any restrictive
covenant to a former employer relating to the right of any such employee to be
employed by Seller because of the nature of the business conducted or presently
proposed to be conducted by Seller or to the use of proprietary information of
others. No current employees of Seller have given written notice to Seller, nor,
to Sellers’ Knowledge, does any such employee intend to, terminate his or her
employment with Seller.

4.21    Taxes. Except as otherwise set forth on Section 4.21 of the Disclosure
Schedule:

(a)      Seller has complied in all respects with all Laws relating to Taxes and
all Tax Returns of Seller required to be filed have been duly and timely filed.
All such Tax Returns are correct and complete. All Taxes due and payable with
respect to any Tax Returns (whether or not shown as payable), or otherwise due
and payable by Seller, have been timely paid to the appropriate Governmental
Authority or otherwise have been adequately reserved for on the books and
records of Seller. There are no existing liens for Taxes on any of the Purchased
Assets, except for Permitted Liens. All applicable sales Taxes required to be
paid by Seller were paid when the Purchased Assets were acquired. Seller has
provided to Purchaser correct and complete copies of (i) all federal, state,
local, and foreign income, franchise, sales and use and payroll Tax Returns
filed by Seller (or its Affiliates) with respect to the Business, the
Transferred Employees, or the Purchased Assets in the past three (3) years and
(ii) all notices, correspondence, and similar material received by Seller (or
its Affiliates) from any Governmental Authority with respect to any proposed
adjustment, audit or examination with respect to Taxes.

(b)      Seller has, in accordance with applicable Laws, (i) withheld all
required amounts from payments to employees and timely remitted such amounts to
the proper Governmental Authorities, (ii) withheld all required amounts from
payments to agents, contractors and nonresidents and timely remitted such
amounts to the proper Governmental Authorities; (iii) timely paid all required
employer contributions and premiums to the Governmental Authorities; and
(iv) filed all federal, state, local and foreign returns and reports with
respect to employee income Tax withholding, social security Taxes and premiums,
and unemployment Taxes and premiums.

(c)      None of the Purchased Assets is Tax exempt use property under Code
Section 168(h). None of the Purchased Assets is property that Seller is required
to treat as being owned by any other Person pursuant to the safe harbor lease
provision of former Code Section 168(f)(8). None of the Purchased Assets
constitutes stock in a corporate subsidiary or a joint venture, partnership,
limited liability company interest, or other arrangement or contract which is
taxed as a partnership for U.S. federal income Tax purposes.

(d)      Seller is not a foreign person within the meaning of Code Section 1445.
Seller has no (and has not previously had any) permanent establishment in any
foreign country and Seller does not engage (and has not previously engaged) in a
trade or business within the meaning of the Code relating to the creation of a
permanent establishment in any foreign country.

 

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(e)       Neither the Code nor any other provision of Law requires Purchaser to
withhold any portion of the Aggregate Purchase Price.

(f)       Seller has no obligation for Taxes pursuant to any contract that
Purchaser is assuming as a result of the transactions contemplated by this
Agreement. Seller has not extended any statute of limitations relating to Taxes
for which Purchaser could be liable under this Agreement or pursuant to
applicable Law. No Governmental Authority has made a written claim that Seller
is obligated to pay Taxes in a jurisdiction in which Seller is not filing Tax
Returns. No audits or other proceedings are ongoing or, to Seller’s Knowledge,
threatened in writing with respect to any Taxes relating to the Business, the
Purchased Assets, or the Transferred Employees for which Purchaser could have
liability under this Agreement or under applicable Laws. There are no unpaid or
proposed assessments for Taxes with respect to any of the Purchased Assets.

(g)       Seller has duly elected to be treated as an S corporation pursuant to
Code Section 1362(a). This election was initially effective as of July 1, 1989.

4.22    Suppliers; Customers.

(a)       Suppliers. Section 4.22(a) of the Disclosure Schedule sets forth the
ten (10) largest suppliers of Seller (based on dollar amounts paid by Seller for
products or services supplied to Seller) for the year ended December 31, 2009
and the nine-month period ended September 30, 2010 (the “Material Suppliers”)
and the amounts paid by Seller to such Material Suppliers during such periods.
Except as set forth in Section 4.22(a) of the Disclosure Schedule, (i) all
Material Suppliers continue to be suppliers of Seller; (ii) since the Most
Recent Audited Balance Sheet Date, no Material Supplier has terminated its
relationship with Seller or, to Seller’s Knowledge, threatened to do so;
(iii) since the Most Recent Audited Balance Sheet Date, no Material Supplier has
modified or, to Seller’s Knowledge, indicated that it intends to modify its
relationship with Seller in a manner which would reasonably be expected to
result in a Material Adverse Change; and (iv) Seller is not involved in any
material claim, dispute or controversy with any Material Supplier. To Seller’s
Knowledge, no Material Supplier has threatened to take any of the actions
described in this Section 4.22(a) as a result of the transactions contemplated
by this Agreement. To Seller’s Knowledge, since the Most Recent Audited Balance
Sheet Date, there has been no other material adverse change in the relationship
between Seller and any Material Supplier.

(b)       Customers. Section 4.22(b) of the Disclosure Schedule sets forth the
ten (10) largest customers of Seller (based on dollar amounts of services
purchased from Seller) for the year ended December 31, 2009 and the nine-month
period ended September 30, 2010 (the “Material Customers”) and the amounts for
which Seller invoiced such Material Customers during such periods. Except as set
forth in Section 4.22(b) of the Disclosure Schedule, (i) all Material Customers
continue to be customers of Seller, (ii) since the Most Recent Audited Balance
Sheet Date, no Material Customer has terminated its relationship with Seller or,
to Seller’s Knowledge, threatened to do so; (iii) since the Most Recent Audited
Balance Sheet Date,

 

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no Material Customer has modified or, to Seller’s Knowledge, indicated that it
intends to modify its relationship with Seller in a manner which would
reasonably be expected to result in a Material Adverse Change; and (iv) Seller
is not involved in any material claim, dispute or controversy with any Material
Customer. To Seller’s Knowledge, no Material Customer has threatened to take any
of the actions described in this Section 4.22(b) as a result of the transactions
contemplated by this Agreement. To Seller’s Knowledge, since the Most Recent
Audited Balance Sheet Date, there has been no other material adverse change in
the relationship between Seller and any Material Customer.

4.23    Government Contracts. With respect to each Seller Government Contract
and each Seller Government Subcontract:

(a)       Each such Seller Government Contract or Seller Government Subcontract
(i) is set forth on Section 4.23(a) of the Disclosure Schedule, (ii) was, to
Seller’s Knowledge, legally awarded and is in full force and effect, (iii) is
binding on Seller and, to Seller’s Knowledge, the other parties thereto; and
(iv) Seller has complied with the terms and conditions of such contracts,
including all clauses, provisions and requirements incorporated expressly, by
reference, or by operation of any Law.

(b)       Seller is not currently in, and the execution and delivery of this
Agreement by Seller and the consummation of the Transactions by Seller will not
result in any, violation, breach or default of any term or provision of any
Seller Government Contract or Seller Government Subcontract. All representations
and certifications with respect to any Seller Government Contract or Seller
Government Subcontract made by Seller were current, accurate and complete when
made, and Seller has complied with all such representations and certifications.

(c)       Seller is not in violation, breach or default of any provision of any
Order or Law governing any Seller Government Contract or Seller Government
Subcontract. No written allegation that Seller is in breach, violation or
default of any Order or Law has been made to Seller and not withdrawn. Seller
does not have credible evidence of a violation of Federal criminal law involving
fraud, conflict of interest, bribery, or gratuity violations found in Title 18
of the United States Code; violation of the civil False Claims Act (31 U.S.C.
3729-3733); or significant overpayment(s) on any Seller Government Contract or
Seller Government Subcontract, other than overpayments resulting from contract
financing payments as defined in FAR 32.001.

(d)       Seller has not received a written cure notice, a written show cause
notice or a written stop work notice, nor has Seller been notified or threatened
in writing with termination for default or convenience under any Seller
Government Contract or Seller Government Subcontract.

(e)       To Seller’s Knowledge, there are no material disputes between Seller
and a Governmental Authority under any Seller Government Contract or between
Seller and any prime contractor, subcontractor, vendor, or other third party
arising under or relating to any Seller Government Contract or Seller Government
Subcontract, and, to Seller’s Knowledge, there is no fact, event or circumstance
likely to give rise to a material dispute under any Seller Government Contract
or Seller Government Subcontract.

 

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(f)      Seller has not been audited by any Governmental Authority, is not
currently being audited by any Governmental Authority and no such audit, to
Seller’s Knowledge, has been threatened by any Governmental Authority. No cost
incurred by Seller pertaining to a Seller Government Contract or Seller
Government Subcontract is or has been the subject of any audit or, to Seller’s
Knowledge, investigation or has been disallowed in writing by any Governmental
Authority.

(g)      Neither Seller nor, to Seller’s Knowledge, any of its officers,
directors or principals (as defined in FAR 52.209-5), employees, consultants or
agents has been suspended or debarred from eligibility to receive contracts or
subcontracts with any Governmental Authority in connection with the conduct of
the Business; and no such suspension or debarment has been initiated or, to
Seller’s Knowledge, threatened. To Seller’s Knowledge, there exist no facts or
circumstances that would warrant the institution of suspension, debarment, or
finding of non-responsibility or ineligibility of Seller or any of its
personnel, agents or consultants with respect to any Government Contract.

(h)      To Seller’s Knowledge, there is no ongoing or threatened Proceeding by
any Governmental Authority relating to any Seller Government Contract or Seller
Government Subcontract or the violation of any Law relating to any Seller
Government Contract or Seller Government Subcontract. There are no outstanding
written claims or requests for equitable adjustments or, to Seller’s Knowledge,
threatened claims or threatened requests for adjustments, between Seller and any
Governmental Authority and any prime contractor, subcontractor, vendor or other
third party arising under or relating to any Seller Government Contract or
Seller Government Subcontract and there are no facts that would give rise to any
claims or requests for equitable adjustments by or against Seller arising under
or relating to any Seller Government Contract or Seller Government Subcontract.

(i)       Except as set forth on Section 4.23(i) of the Disclosure Schedule, no
Governmental Authority has any rights with respect to any technical data or
computer software that are material to the Business.

(j)       No current operations of Seller are restricted by the Organizational
Conflicts of Interest restrictions as set forth in Federal Acquisition
Regulation Subpart 9.5. Neither any Governmental Authority nor any prime
contractor or subcontractor has notified Seller in writing or, to Seller’s
Knowledge, orally, that the Seller has an actual or potential organizational
conflict of interest under any clause contained in any Seller Government
Contract or Seller Government Subcontract relating to organizational conflicts
of interest or is otherwise subject to any restrictions on its ability to
compete for any future Government Contract.

(k)      Except as set forth on Section 4.23(k) of the Disclosure Schedule,
there are no liquidated damages or indemnification or similar provisions or any
obligations under any Seller Government Contract or Seller Government
Subcontract.

 

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(l)       None of Seller nor, to Seller’s Knowledge, any of its directors,
officers, managers, employees, consultants or agents is or has been (except as
to routine security investigations) under administrative, civil or criminal
investigation, audit, indictment or information by any Governmental Authority or
threatened with any administrative, civil or criminal investigation, audit,
indictment or information by any Governmental Authority.

(m)      Seller has complied with all applicable cost accounting standards and
cost principles of a Governmental Authority, and Seller has not received written
notice from the sponsoring United States Government Agency Administrative
Contracting Officer or any other Governmental Authority of any intent to
suspend, disapprove or disallow any material costs.

(n)       To Seller’s Knowledge, all former U.S. government personnel that are
employed by Seller comply with applicable Laws specifically related to post
government employment.

(o)       Seller has complied with proprietary marking requirements of all
Governmental Authorities for proposal submissions in response to solicitations
and deliverable submissions under Seller Government Contracts and Seller
Government Subcontracts.

(p)       Except as set forth in Section 4.23(p) of the Disclosure Schedule,
there are no open Government Contracts or Government Subcontracts awarded to
Seller where Seller represented to the applicable Government Authority or prime
contractor that Seller was qualified as a “small business,” “small disadvantaged
business,” “veteran owned business,” participant in the Section 8(a) Business
Development program, or other preferential status (including participation in
preferential status programs such as the Historically Underutilized Business
Zone program) or other “set aside” status, or entitlement to an evaluation
preference under the terms of the applicable solicitation) (collectively, a
“Preferred Bidder Status”). Seller does not have any pending Contract Bids in
connection with any Government Contract that has been set aside for, or which
provided an evaluation preference based on, Preferred Bidder Status.

(q)       During the past five (5) years, Seller has not conducted or initiated
any internal investigation or made a voluntary disclosure to a Governmental
Authority, with respect to any alleged non-compliance with a Law, irregularity,
misstatement or omission arising under or relating to a Seller Government
Contract; and there exist no circumstances that require Seller to answer any of
the questions in FAR 52.209-5 in the affirmative.

(r)       As of the Closing Date, Seller does not have any pending or open
Contract Bids or Subcontract Bids.

 

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ARTICLE V

Representations and Warranties of Purchaser

Purchaser represents and warrants to Seller and the Shareholders as follows:

5.1      Due Incorporation. Purchaser is a limited liability company duly
formed, validly existing and in good standing under the laws of the State of
Delaware.

5.2      Authority. Purchaser has the limited liability company right and power
to enter into, and perform its obligations under this Agreement and each other
agreement delivered in connection herewith to which it is a party, and has taken
all requisite limited liability company action to authorize the execution,
delivery and performance of this Agreement and such other agreements and the
consummation of the purchase of the Purchased Assets and other transactions
contemplated by this Agreement; and this Agreement has been duly executed and
delivered by Purchaser and is binding upon, and enforceable against, Purchaser
in accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting enforcement of creditors’ rights generally and by general principles
of equity (whether applied in a proceeding at law or in equity.)

5.3      No Violations. Neither the execution, delivery or performance of this
Agreement by Purchaser, nor the consummation of the purchase of the Purchased
Assets or any other transaction contemplated by this Agreement, does or will,
after the giving of notice, or the lapse of time, or otherwise conflict with,
result in a breach of, or constitute a default under, the certificate of
formation or limited liability company agreement of Purchaser, or any Law or
Order, or any Contract or plan to which Purchaser is a party. No consent,
authorization or approval of, filing or registration with or giving of notice
to, any Governmental Authority or any other Person is necessary in connection
with the execution, delivery and performance by Purchaser of this Agreement.

5.4      Disclaimer. The representations and warranties of Seller set forth in
Article IV are the only representations and warranties made by Seller with
respect to the Business and the Purchased Assets. Except as specifically set
forth in this Agreement, Seller is selling the Purchased Assets to Purchaser “as
is” and “where is” and with all faults. EXCEPT AS SPECIFICALLY SET FORTH IN THIS
AGREEMENT, SELLER MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO ANY MATTER
WHATSOEVER RELATING TO THE PURCHASED ASSETS, INCLUDING THE CONDITION OF THE
PURCHASED ASSETS, THEIR MERCHANTABILITY OR THEIR FITNESS FOR ANY PARTICULAR
PURPOSE. Purchaser acknowledges that it has made its own determination as to the
values of the Business and the Purchased Assets, and is not relying on any
information (with the exception of representations and warranties of Seller
contained in this Agreement or in the Disclosure Schedule) as to Seller’s past
or present profitability or business prospects associated with the Purchased
Assets.

5.5      Litigation. There is no Proceeding pending or, to Purchaser’s actual
knowledge, threatened against or affecting Purchaser with respect to this
Agreement, or in connection with the transactions contemplated hereby.

 

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5.6      Brokers. Neither this Agreement nor the purchase of the Purchased
Assets was induced or procured through any Person acting on behalf of, or
representing, Purchaser or any of its Affiliates as broker, finder, investment
banker, financial advisor or in any similar capacity.

ARTICLE VI

Indemnification

6.1      Indemnification by Seller. Subject to the provisions of this
Article VI, Seller covenants and agrees after the Closing to indemnify and hold
harmless Purchaser and its Affiliates, and their respective officers, directors,
stockholders, employees and agents (collectively, the “Purchaser Indemnitees”),
from and against any and all Adverse Consequences, together with interest on
cash disbursements actually made with written notice to Seller in connection
therewith at the Past Due Rate from the date of each such disbursement until
paid by Seller, incurred or suffered by the Purchaser Indemnitees resulting from
any of the following:

(a)      any inaccuracy in or breach of, or, with respect to a third-party
claim, any alleged breach or inaccuracy of, any representation or warranty of
Seller set forth in this Agreement (or the Disclosure Schedule) or in any
transaction document or certificate delivered by Seller or Mr. Matteson at
Closing in connection with this Agreement;

(b)      any breach of any covenant or agreement of Seller set forth herein or
in any document or certificate delivered by Seller in connection with this
Agreement or any breach by MMS of its obligations under Section 1(c) of the
Lease;

(c)      any Retained Liabilities;

(d)      any Retained Assets;

(e)      any breach of an agreement or covenant of any Shareholder under such
Shareholder’s Employment and Non-Compete Agreement or Shareholder Consulting and
Non-Compete Agreement, as applicable; or

(f)      any litigation, non-compliance matters or outstanding insurance claims
disclosed in Sections 4.10(g), 4.10(j), 4.11 or 4.11(c) of the Disclosure
Schedule; the environmental non-compliance issues identified in the Phase I
environmental reports obtained by Purchaser in connection with the transactions
contemplated hereby and provided to Seller prior to the date hereof; the sinking
of the Davy Crockett; the May 2008 break away of barges in Burlington, Iowa; and
the sunk barges in the waterway at the Burlington site.

6.2     Indemnification by Purchaser. Subject to the provisions of this
Article VI, Purchaser covenants and agrees after the Closing to indemnify and
hold harmless Seller and the Shareholders (collectively, the “Seller
Indemnitees”) from and against any and all Adverse Consequences, together with
interest on cash disbursements actually made with written notice to Purchaser in
connection therewith at the Past Due Rate from the date of each such
disbursement until paid by Purchaser, incurred or suffered by the Seller
Indemnitees resulting from any of the following:

(a)      any inaccuracy in or breach of, or, with respect to a third-party
claim, any alleged breach or inaccuracy of, any representation or warranty of
Purchaser set forth in this Agreement or in any transaction document or
certificate delivered by Purchaser at Closing in connection with this Agreement;

 

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(b)      any breach of any covenant or agreement of Purchaser set forth herein
or in any document or certificate delivered by Purchaser in connection with this
Agreement;

(c)      any Assumed Liability; or

(d)      any liability for Taxes allocable to Purchaser pursuant to
Section 8.12.

6.3      Claim Procedure/Notice of Claim.

(a)      A party entitled, or seeking to assert rights, to indemnification under
this Article VI (an “Indemnified Party”) shall give written notification (a
“Claim Notice”) to the party from whom indemnification is sought (an
“Indemnifying Party”) which contains (i) a reasonable description and the amount
(the “Claimed Amount”), if then known, of any Adverse Consequences actually
incurred or reasonably expected to be incurred by the Indemnified Party and
(ii) a statement that the Indemnified Party is entitled to indemnification under
this Article VI for such Adverse Consequences and a reasonable explanation of
the basis therefor and identifying the applicable Section under which
indemnification is being sought.

(b)      Within thirty (30) days after receipt of a Claim Notice, the
Indemnifying Party shall deliver to the Indemnified Party a written response
(the “Response”) in which the Indemnifying Party shall either: (i) agree that
the Indemnified Party is entitled to receive all of the Claimed Amount or
(ii) dispute that the Indemnified Party is entitled to receive any or all of the
Claimed Amount and the basis for such dispute (in such an event, the Response
shall be referred to as an “Objection Notice”). If no Response is delivered by
the Indemnifying Party to the Indemnified Party within such 30-day period, the
Indemnifying Party shall be deemed to have agreed that an amount equal to the
entire Claimed Amount shall be payable to the Indemnified Party and such Claimed
Amount shall, subject to Section 6.4(e), be promptly paid to Purchaser or
Seller, as applicable.

(c)      In the event that the parties are unable to agree on whether Adverse
Consequences exist or on the amount of such Adverse Consequences within the
30-day period after receipt of an Objection Notice, either Purchaser or Seller
may (but are not required to do so) petition or file an action in a court of
competent jurisdiction for resolution of such dispute.

(d)      In the event that the Indemnified Party is entitled, or is seeking to
assert rights, to indemnification under this Article VI relating to a
third-party claim, the Indemnified Party shall give written notification to the
Indemnifying Party of the commencement of any suit or other legal proceeding
relating to such third-party claim. Such notification shall be given within
twenty (20) days after receipt by the Indemnified Party of notice of such suit
or proceeding, shall be accompanied by reasonable supporting documentation
submitted by such third party (to the extent then in the possession of the
Indemnified Party) and shall describe in reasonable detail (to the extent known
by the Indemnified Party) the facts constituting the basis for such suit or
proceeding and the amount of the claimed Adverse Consequences, if then known;

 

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provided, however, that no delay or deficiency on the part of the Indemnified
Party in so notifying the Indemnifying Party shall relieve the Indemnifying
Party of any liability or obligation hereunder except to the extent of any
liability caused by or arising out of such failure. Within twenty (20) days
after receipt of such notification, the Indemnifying Party may, upon written
notice thereof to the Indemnified Party, assume control of the defense of such
suit or proceeding with counsel reasonably satisfactory to the Indemnified
Party; provided, however, that (i) the Indemnifying Party may only assume
control of such defense if it acknowledges in writing to the Indemnified Party
that any Adverse Consequences that may be assessed against the Indemnified Party
in connection with such suit or proceeding constitute Adverse Consequences for
which the Indemnified Party shall be indemnified pursuant to this Article VI,
and (ii) the Indemnifying Party may not assume control of the defense of a suit
or proceeding (A) involving criminal liability, (B) in which any relief other
than monetary damages is sought against the Indemnified Party, (C) in which
increased statutory, enhanced or treble damages are sought based on willful
misconduct or (D) with respect to which the Indemnified Party has reasonably
determined that (x) there is a conflict of interest between the Indemnified
Party and the Indemnifying Party in the conduct or defense of such third-party
claim or (y) the Indemnified Party has one or more defenses not available to the
Indemnifying Party. In addition, notwithstanding anything to the contrary in the
foregoing, in the event that an Indemnified Party in good faith determines that
the conduct of the defense of any claim, suit or proceeding or any proposed
settlement of any such claim, suit or proceeding by the Indemnifying Party could
reasonably be expected to materially adversely affect the Indemnified Party’s
Tax liability or the ability of the Indemnified Party to conduct its business
(including relationships with Governmental Authorities, customers, suppliers or
other Persons with whom the Indemnified Party conducts business), the
Indemnified Party shall have the right at all times to take over and assume
control over the defense, settlement or negotiations relating to any such claim,
suit or proceeding at the sole cost of the Indemnifying Party. If the
Indemnifying Party does not so assume control of such defense, the Indemnified
Party may control such defense at the Indemnifying Party’s expense. The party
not controlling such defense (the “Non-controlling Party”) may participate
therein at its own expense. The party controlling such defense (the “Controlling
Party”) shall keep the Non-controlling Party reasonably advised of the status of
such suit or proceeding and the defense thereof and shall consider in good faith
recommendations made by the Non-controlling Party with respect thereto. The
Non-controlling Party shall furnish the Controlling Party with such information
as it may have with respect to such suit or proceeding (including copies of any
summons, complaint or other pleading which may have been served on such party
and any written claim, demand, invoice, billing or other document evidencing or
asserting the same) and shall otherwise cooperate with and assist the
Controlling Party in the defense of such suit or proceeding. The Indemnifying
Party shall not agree to any settlement of, or the entry of any judgment arising
from, any such suit or proceeding without the prior written consent of the
Indemnified Party, which consent shall not be unreasonably withheld, conditioned
or delayed. The Indemnified Party shall not agree to any settlement of, or the
entry of any judgment arising from, any such suit or proceeding without the
prior written consent of the Indemnifying Party, which shall not be unreasonably
withheld, conditioned or delayed. If the Indemnifying Party does not elect to
assume control or otherwise participate in the defense of any third-party claim,
the Indemnifying Party will be bound by the results obtained in good faith by
the Indemnified Party with respect to such claim.

 

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6.4     Survival of Representations, Warranties and Covenants; Determination of
Adverse Consequences.

(a)      Except as set forth in Section 6.4(b), the representations and
warranties of Seller and Purchaser contained in this Agreement and the
certificates delivered pursuant to this Agreement shall survive until the date
that is eighteen (18) months after the Closing Date, at which time such
representations and warranties and any right to make an indemnification claim
based thereon will terminate. All covenants and agreements contained in this
Agreement and the documents and certificates delivered pursuant to this
Agreement shall survive the Closing Date in accordance with their terms.

(b)      The representations and warranties of Seller contained Section 4.18
(Environmental Matters), Section 4.19 (Employee Benefit Plans) and Section 4.21
(Taxes) (collectively, the “Statute of Limitation Representations”), shall
survive until the expiration of the applicable statute of limitations plus
thirty (30) days, at which time such representations and warranties and any
right to make an indemnification claim based thereon shall terminate. The
representations and warranties of Seller contained in Section 4.1(b)
(Capitalization), Section 4.2 (Authority), Section 4.3 (No Violation and
Consents), Section 4.4 (Brokers), Section 4.7 (Title to Purchased Assets) and
Sections 4.10(a)(ii) and (a)(iii), (d) and (e) (Marine Assets), and of Purchaser
contained in Section 5.2 (Authorization), Section 5.3 (No Violation) and
Section 5.6 (Brokers) (collectively, the “Critical Representations”), shall
survive indefinitely.

(c)      Notwithstanding anything to the contrary in this Agreement, if an
Indemnified Party in good faith delivers to an Indemnifying Party, before
expiration of a representation or warranty, a Claim Notice based upon a breach
of such representation or warranty, then the applicable representation or
warranty shall survive until, but only for purposes of, the resolution of the
matter covered by such notice.

(d)      The representations, warranties and covenants of Seller shall not be
affected or deemed waived by reason of any investigation made by or on behalf of
Purchaser or by reason of any facts or circumstances that Purchaser (or any of
its representatives) knew or should have known.

(e)      Purchaser shall have set-off rights as set forth in Section 6.6.

(f)       For all purposes under this Article VI, the qualification “in all
material respects” as used in Section 4.19 shall be disregarded in each instance
in which it appears and the applicable representations and warranties construed
as if no such qualification was included.

6.5     Limitations on Indemnification Obligations.

(a)      Seller shall have no obligation to indemnify the Purchaser Indemnitees
with respect to Adverse Consequences arising under Section 6.1(a) (other than
the Critical Representations and the Statute of Limitation Representations)
until the aggregate amount of all Adverse Consequences thereunder exceeds Three
Hundred Fifty Thousand Dollars ($350,000), in which event Seller shall be
obligated to indemnify the Purchaser Indemnitees for all Adverse Consequences
including the amount under such threshold.

 

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(b)      Seller shall have no obligation to indemnify the Purchaser Indemnitees
with respect to Adverse Consequences arising under Section 6.1(a) (other than
the Critical Representations and the Statute of Limitation Representations) in
excess of Four Million Five Hundred Thousand Dollars $4,500,000.

(c)      Notwithstanding anything to the contrary in this Agreement, Purchaser
Indemnitees’ rights to indemnification with respect to Adverse Consequences
arising under Sections 6.1(b)-(f), the Critical Representations or the Statute
of Limitation Representations, or based upon fraud, willful misconduct or
intentional misrepresentation, shall not be subject to the limitations set forth
in Sections 6.4, 6.5(a) and 6.5(b).

(d)      Any Adverse Consequences of an Indemnified Party shall be reduced by
any Tax Benefit that the Indemnified Party or any of its Affiliates actually
realizes as a result of incurring the Adverse Consequences. A “Tax Benefit”
shall equal the actual reduction in income Taxes payable by the Indemnified
Party and its Affiliates realized in the year that the Adverse Consequences
would be taken into account for U.S. federal income tax purposes (computed after
taking into account the income Tax consequences of receiving the indemnity
payment). The Indemnifying Party shall indemnify and hold the Indemnified Party
harmless from and against any subsequent disallowance or loss of a Tax Benefit
that has resulted in a reduction to the Adverse Consequences payable by the
Indemnifying Party under this Article VI.

(e)      In the event an Indemnified Party receives insurance proceeds with
respect to Adverse Consequences for which the Indemnified Party has made an
indemnification claim prior to the date on which the Indemnifying Party is
required pursuant to this Article VI to pay such indemnification claim, the
indemnification claim shall be reduced by an amount equal to fifty percent
(50%) of the amount of such insurance proceeds received by the Indemnified Party
(the “Shared Insurance Proceeds”). If such insurance proceeds are received by
the Indemnified Party after the date on which the Indemnifying Party has
satisfied such indemnification claim by payment or set-off, (a) if such
indemnification claim was satisfied by set-off under the Seller Note and the
Seller Note remains outstanding, the principal outstanding on the Seller Note
shall be deemed automatically increased by the amount of the Shared Insurance
Proceeds as of the date of Purchaser’s receipt of such insurance proceeds, or
(b) if such indemnification claim was satisfied by set-off against an Earnout
Payment or by the payment of money, the Indemnified Party shall, no later than
ten (10) Business Days after the receipt of such insurance proceeds, reimburse
the Indemnifying Party in an amount equal to the Shared Insurance Proceeds.

(f)       The indemnification provided in this Article VI shall be the sole and
exclusive remedy and recourse for monetary damages for any matter arising out of
this Agreement, other than any matter arising out of fraud.

(g)      Any indemnity payments made pursuant to this Article VI shall be
treated for all income Tax purposes by the parties hereto as an adjustment to
the Aggregate Purchase Price.

(h)      Purchaser acknowledges and agrees that Seller shall have no obligation
under this Article VI with respect to the repairs, maintenance and deficiencies
described in Section 4.8 of the Disclosure Schedule or in Section 4.10(c) of the
Disclosure Schedule.

 

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6.6      Set-Off.    If Seller is obligated to indemnify Purchaser or any other
Purchaser Indemnitee for any indemnification claim in accordance with Article
VI, Purchaser may set-off the amount of such claim against any amounts payable
by Purchaser to Seller under this Agreement, including the Earnout Payments or
the Seller Note, as the same becomes due; provided, however, that Purchaser
agrees that it shall seek satisfaction of any indemnification claim under
Section 6.1(a) in the following order: first, by exhausting its set-off rights
under the Seller Note; second, by exhausting its set-off rights against any
Earnout Payments that have been earned but not yet paid at the time of such
indemnification claim; third, by exhausting its set-off rights against any other
payments due to Seller hereunder at the time of such indemnification claim; and
finally, by recourse to Seller or either Shareholder (including any successors
thereto or heirs or estates thereof). If Purchaser intends to set-off any amount
hereunder, Purchaser shall provide not less than thirty (30) days’ prior written
notice to Seller of its intention to do so, together with a reasonably detailed
explanation of the basis therefor (a “Set-Off Notice”). If, within ten (10) days
of its receipt of a Set-Off Notice, Seller provides Purchaser with written
notice of Seller’s dispute with Purchaser’s right to make such set-off,
Purchaser and Seller (and their respective representatives and advisors) shall
meet (which may be accomplished telephonically) in good faith within five
(5) days to attempt to resolve their dispute. If such dispute remains unresolved
despite Purchaser’s good faith attempt to meet with Seller and resolve such
dispute, Purchaser may set-off under this Section 6.6 only (a) with respect to
those indemnifications claims that have been Finally Determined (as defined
below), (b) as described in the following sentence or (c) with the prior written
consent of Seller. In the event of a dispute with respect to any indemnification
claim against Seller made in good faith pursuant to this Article VI, and the
liability for and amount of Adverse Consequences therefor, Purchaser may, in its
reasonable discretion, withhold any payments due to Seller under this Agreement,
including the Earnout Payments or the Seller Note, up to the amount of the
disputed amount, but only if Purchaser deposits such withheld amounts into
escrow in accordance with a Set-Off Indemnity Escrow Agreement, provided that
(i) if Seller refuses to execute and deliver the Set-Off Indemnity Escrow
Agreement promptly upon written request by Purchaser, Purchaser shall be
entitled to retain the withheld amount until the earlier of Seller’s execution
and delivery of a Set-Off Indemnity Escrow Agreement or resolution of the
dispute and (ii) in no event may Purchaser set-off against amounts payable under
the Seller Note an aggregate amount in excess of Three Million Seven Hundred
Fifty Thousand Dollars ($3,750,000). For purposes of this Agreement, the term
“Finally Determined” shall mean with respect to any indemnification claim made,
and the Liability for and amount of Adverse Consequences therefor, when the
parties to such claim have so determined by mutual agreement or, if disputed,
when a judgment has been issued by a court having proper jurisdiction.

ARTICLE VII

Employee Matters

7.1      Employees to be Hired by Purchaser.

(a)      Purchaser will offer employment to all current active employees of
Seller (other than Lawrence W. Matteson), which employment is to be effective as
of the Effective Time. With respect to bargaining unit employees of Seller, the
terms of their employment will be subject to Purchaser’s ability to negotiate or
implement new or modified wages, hours and other terms and conditions of
employment with the appropriate authorized collective bargaining

 

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representative at each applicable location. Until such time as new or modified
wages, hours and terms and conditions are negotiated or implemented, such
bargaining unit employees will continue to work under the existing wages, hours
and other terms and conditions of employment set forth in the existing
collective bargaining agreement at each such location. All employees of the
Business who accept employment with Purchaser and commence such employment
immediately after the Closing shall be referred to as the “Transferred
Employees”. Seller shall terminate the employment of all Transferred Employees
effective as of the Closing (or, in the case of Transferred Employees who are on
disability or leave of absence, as soon as they are removed from disability
status or return from leave).

(b)      Except as provided in this Section 7.1(b), Seller shall retain
responsibility for all of the Benefit Plans. Seller shall retain responsibility
for all Liability for any health care continuation coverage or notice
requirement under Section 4980B of the Code and Part G of Subtitle B of Title 1
of ERISA arising on or before the Closing Date with respect to any Benefit Plan,
and, after the Closing, Purchaser shall be responsible for any such health care
continuation coverage or notice requirements arising after the Closing with
respect to (i) any Transferred Employee, and (ii) to the extent Purchaser is
required by applicable Law, any former employee of Seller currently receiving
health care continuation coverage under a Seller plan

(c)      Seller shall be solely responsible for any severance claims or any
other benefits, claims or causes of action asserted by any employee of the
Business not hired by Purchaser at Closing. In addition, Seller agrees to
indemnify and hold Purchaser harmless from and against any Adverse Consequences
Purchaser suffers resulting from any claim by the Transferred Employees that the
transaction gives rise to a right to receive severance payments or any such
other benefits.

(d)      As of the Closing, Seller shall have paid any amounts due and payable
to any Transferred Employees as of the Closing, including the payment of any
accrued vacation, leave and/or bonus (or any portion thereof earned as of the
Closing).

(e)      Transferred Employees (and, where applicable, their eligible
dependents) shall be:

  (i)     eligible to participate in a group health plan (within the meaning of
Section 5000(b) of the Code) as of the Closing Date without regard to or
application of any pre-existing condition, exclusion or limitation;

  (ii)    given credit under a Welfare Plan (as defined in Section 3(1) of
ERISA) adopted or maintained by Purchaser for their service with Seller for
purposes of satisfying any waiting periods, evidence of insurability or good
health requirements, or the application of any pre-existing condition
limitations; and

  (iii)   given credit for past service with Seller for (x) eligibility and
vesting purposes in Purchaser’s qualified plans that are Pension Plans (as
defined in Section 3(2) of ERISA), except that Transferred Employees shall not
receive such credit for satisfying the three-year vesting period for the
profit-sharing portion of Purchaser’s 401(k) plan, and (y) determining
entitlement to vacation.

 

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(f)      Purchaser shall cause the appropriate tax-qualified defined
contribution plan established or maintained by Purchaser to accept eligible
rollover distributions (as defined in Section 402(c)(4) of the Code) from
Transferred Employees with respect to any account balances distributed to them
from Seller’s tax-qualified Benefit Plans. The distributions described herein
shall comply with applicable Laws, and each party shall make all filings and
take any actions required of such party under applicable Laws in connection
therewith.

(g)      The provisions of this Section 7.1 are a covenant between Purchaser and
Seller and shall not, in any manner, create any contractual right of employment
for any employee of Seller or any Transferred Employee.

7.2      Workers’ Compensation, Medical Claims and Retirees.

(a)      Seller shall remain solely responsible for Liability arising from
workers’ compensation claims, both medical and disability, or other
government-mandated programs which are based on injuries occurring prior to
Closing regardless of when such claims are filed. Purchaser shall be solely
responsible for such claims of Transferred Employees based on injuries occurring
after Closing.

(b)      Seller shall remain solely responsible in accordance with its employee
welfare benefit plans for the satisfaction of all claims for medical, dental,
life insurance, health, accident or disability benefits brought by or in respect
of employees of the Business under any of Seller’s welfare benefit plans which
claims relate to events or injuries incurred prior to the Closing regardless of
when such claim was filed.

(c)      As of the Closing, with respect to former and retired employees of the
Business who had terminated employment or retired on or prior to the Closing,
Seller shall be liable for all Liabilities in connection with claims for
benefits brought by or in respect of such former or retired employees of the
Business under any of Seller’s welfare benefit plans with respect to medical,
dental, life insurance, health, accident or disability benefits or otherwise.

ARTICLE VIII

Certain Other Agreements

8.1      Post Closing Access to Record.    Purchaser and Seller shall provide
each other with such assistance as may reasonably be requested by the other in
connection with the preparation of any return or report of Taxes, any audit or
other examination by any Governmental Authority, any judicial or administrative
proceedings relating to liabilities for Taxes, or for any other reasonable
purpose (including any litigation or claim by or with any third party in respect
of the Purchased Assets or the Business as conducted on or prior to the Closing
Date). Such assistance shall include making employees available on a mutually
convenient basis to provide additional information or explanation of material
provided hereunder and shall include providing copies of relevant Tax Returns
and supporting material and available relevant documents, books and records. The
party requesting assistance hereunder shall reimburse the assisting party for
reasonable out-of-pocket expenses incurred in providing assistance. Purchaser
and Seller will retain for the full period of any statute of limitations and
provide the others with any records or information which may be relevant to such
preparation, audit, examination, proceeding or determination.

 

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8.2      Consents Not Obtained at Closing.

(a)      Seller shall use all commercially reasonable efforts to obtain and
deliver to Purchaser at or prior to the Closing such consents as are required to
allow the assignment by Seller to Purchaser of the Seller’s right, title and
interest in, to and under any Contract included in the Purchased Assets. To the
extent any Contract or Government Contract is not capable of being assigned
without the consent or waiver of the other party thereto or any third party
(including any Governmental Authority), or if such assignment or attempted
assignment would constitute a breach thereof or a violation of any Law or Order,
neither this Agreement nor the Bill of Sale and Assignment Agreement shall
constitute an assignment or an attempted assignment of such Contract.

(b)      Notwithstanding anything in this Agreement or the Bill of Sale and
Assignment Agreement to the contrary, Seller is not obligated to transfer to
Purchaser any of its rights and obligations in and to any Contract or Government
Contract without first having obtained all necessary consents and waivers. After
the Closing Date, Seller shall use all commercially reasonable efforts, and
Purchaser shall cooperate with Seller at Seller’s expense, to obtain any
consents and waivers necessary to convey to Purchaser all Contracts intended to
be included in the Purchased Assets.

(c)      If any such consents and waivers are not obtained with respect to any
Contract, the Bill of Sale and Assignment Agreement shall constitute an
equitable assignment by Seller to Purchaser of all of Seller’s rights, benefits,
title and interest in and to such Contract (excluding any Government Contract),
to the extent permitted by Law, and Purchaser shall be deemed to be the Seller’s
agent for the purpose of completing, fulfilling and discharging all of Seller’s
rights and liabilities arising after the Closing Date under such Contract;
provided that Purchaser shall undertake to pay or satisfy the corresponding
liabilities for the enjoyment of such benefits to the extent Purchaser would
have been responsible therefor if such consent or approval had been obtained.

8.3      Novation of Government Contracts.

(a)      With respect to each Government Contract and Government Subcontract,
promptly after the Closing Date, Purchaser and Seller shall use all reasonable
efforts to obtain the written consent of the other parties to each such
Government Contract and Government Subcontract for the assignment or novation
thereof to Purchaser or written confirmation from such parties that such consent
is not required. With respect to any Government Contracts or Government
Subcontracts that are not assigned or novated to Purchaser on or before the
Closing Date, the performance obligations of Seller thereunder shall, unless
prohibited by such Government Contract or Government Subcontract, be performed
by Purchaser in accordance with this Section 8.3, until such Contracts have been
assigned or novated, including through a subcontract or similar arrangement;
provided, however, that with respect to any Government Contract or Government
Subcontract under which Seller must obtain prior consent to Purchaser’s
performance thereunder, Purchaser and Seller shall use their best efforts to
obtain such consent

 

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and, until such consent is obtained, shall cooperate in an arrangement
reasonably satisfactory to Purchaser and Seller under which Purchaser would
obtain, to the extent practicable, the claims, rights and benefits, including
all contract revenue, and assume the corresponding obligations thereunder in
accordance with this Agreement.

(b)      As soon as practicable but in any event within thirty (30) days after
the Closing Date, Purchaser shall, in accordance with FAR Subpart 42.12, and
with the cooperation of Seller, submit in writing to each Responsible
Contracting Officer (as such term is defined in FAR 42.1202(a)), a request (the
“Request”) for the United States Government to recognize Purchaser as Seller’s
successor in interest to the Government Contracts, which are to be sold,
assigned, transferred and conveyed to Purchaser in accordance with this
Agreement. Seller shall promptly deliver to Purchaser such information as shall
be required from Seller pursuant to FAR 42.1204(e)-(f) or otherwise reasonably
requested by the Responsible Contracting Officer for the purpose of enabling
Purchaser to submit the Request and prepare, execute and deliver to the United
States Government a novation agreement (the “Novation Agreement”), as required
by FAR 42.12, to effectuate the novation of the Government Contracts from Seller
to Purchaser.

(c)      With respect to Government Contracts not held by the United States
Government, Purchaser shall, with the cooperation of Seller and as soon as
practicable but in any event within thirty (30) days after the Closing Date,
submit in writing to each Contracting Officer any requests or notifications
necessary for the Governmental Authority to recognize Purchaser as Seller’s
successor in interest to the Government Contracts, which are to be sold,
assigned, transferred and conveyed to Purchaser in accordance with this
Agreement. Seller shall promptly deliver to Purchaser such information as shall
be required from Seller or otherwise reasonably requested by the Governmental
Authority for the purpose of enabling Purchaser to submit any request or
notification, and to prepare, execute and deliver to the Governmental Authority
a novation agreement, assignment, or other document to effectuate the novation,
consent, waiver or confirmation of such Government Contracts from Seller to
Purchaser.

(d)      With respect to each Government Subcontract, Purchaser shall, within
thirty (30) days after the Closing Date and with the cooperation of Seller,
submit documentation seeking the written waiver or approval of the other
contracting party to the transfer and assignment of such Government Subcontract,
as necessary.

(e)      Seller and Purchaser shall each use commercially reasonable efforts to
obtain all consents, approvals and waivers required for the purpose of
processing, entering into and completing the consents, Novation Agreements, and
assignments described in this Section 8.3, including responding to any requests
for information by the Governmental Authority or prime contractor with regard to
the consents, Novation Agreements or assignments, as applicable.

 

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8.4      Performance of Government Contracts Pending Novation.

(a)      The period between the Closing Date and the granting of novation and
assignments of all Government Contracts or Government Subcontracts shall be
known as the “Interim Period.”

(b)      During the Interim Period:

  (i)     Purchaser and Seller shall cooperate in a lawful and commercially
reasonable manner to (A) enable Purchaser to receive the economic benefits under
the Government Contracts or Government Subcontracts in connection with its
performance of such Contracts during the Interim Period, and (B) enable Seller
to be relieved from its obligations and burdens in connection with performance
of the Government Contracts or Government Subcontracts during the Interim
Period;

  (ii)     Seller shall not take any action or omit to take any action that
would frustrate the intent of, or prevent Purchaser from performing its
obligations under, or otherwise materially and adversely affect the Government
Contracts and Government Subcontracts;

  (iii)    Neither party shall amend any Government Contract or Government
Subcontract in any material respect without the consent of the other party,
which consent shall not be unreasonably withheld or delayed in light of the
intent and objectives of the parties as contemplated by this Section;

  (iv)    Seller will enforce, at the reasonable request of and for the benefit
of Purchaser, any and all claims, rights, benefits of Seller against any third
party arising from any Government Contract or Government Subcontract; and

  (v)    Seller will promptly pay to Purchaser, when received, all monies
received by Seller under any Government Contract or Government Subcontract or
any claim, right or benefit arising under any such Contracts.

8.5      Failure to Obtain Consent.      If any novation, consent, waiver or
confirmation is not obtained with respect to any Government Contract or
Government Subcontract, Purchaser and Seller shall cooperate in an arrangement
reasonably satisfactory to Purchaser and Seller under which Purchaser would
obtain, to the extent practicable and permitted, the claims, rights and benefits
and assume the corresponding obligations thereunder in accordance with this
Agreement, including subcontracting, sub-licensing or sub-leasing to Purchaser,
or under which Seller would enforce for the benefit of Purchaser, with Purchaser
assuming Seller’s obligations, any and all claims, rights and benefits of Seller
against a third party thereto. Purchaser shall not be required to enter into any
arrangement that would impose any additional cost, expense or liability upon
Purchaser or that would deprive Purchaser of any benefits or profits arising out
of the Purchased Asset in question.

8.6      Avoidance of Double Withholding Taxes. With respect to employment Tax
matters (i) Purchaser shall assume Seller’s entire obligation to prepare, file
and furnish IRS Form W-2s with respect to the Transferred Employees for the year
including the Closing Date;

 

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(ii) Seller and Purchaser shall agree to elect the “predecessor-successor” basis
with respect to each Transferred Employee pursuant to the alternative procedure
prescribed by Section 5 of Revenue Procedure 2004-53, 34 I.R.B 320; and
(iii) Seller and Purchaser shall work in good faith to adopt similar procedures
under applicable wage payment, reporting and withholding Laws for all
Transferred Employees in all appropriate jurisdictions. Seller shall indemnify
and hold Purchaser harmless from any Taxes incurred by Purchaser as a result of
assuming Seller’s obligations to prepare and file IRS Form W-2s that result from
Seller’s failure to comply with appropriate employment Tax matters.

8.7      Bulk Sale Waiver and Indemnity.   The parties hereto acknowledge and
agree that no filings with respect to any bulk sales or similar laws have been
made, nor are they intended to be made, nor are such filings a condition
precedent to the Closing; and, in consideration of such waiver by Purchaser,
Seller shall indemnify and hold Purchaser Indemnitees harmless against any
Adverse Consequences (but not including any Current Liabilities included in the
Final Net Working Capital) resulting or arising from such waiver and failure to
comply with applicable bulk sales laws upon presentment of appropriate
documentation.

8.8      Post-Closing Confidentiality.    From and after the Closing, the Seller
Parties will treat and hold as confidential all of the Confidential Information
and shall refrain from using any of the Confidential Information. In the event
that any Seller Party is requested or required pursuant to written or oral
question or request for information or documents in any legal proceeding,
interrogatory, subpoena, civil investigation demand, or similar process to
disclose any Confidential Information, such Seller Party will notify Purchaser
promptly of the request or requirement so that Purchaser may seek an appropriate
protective order or waive compliance with the provisions of this Section 8.8.
If, in the absence of a protective order or the receipt of a waiver hereunder,
any Seller Party is, on the advice of counsel, compelled to disclose any
Confidential Information to any tribunal or else stand liable for contempt, then
such Seller Party may disclose the Confidential Information to the tribunal;
provided, however, that it shall use all commercially reasonable efforts to
obtain, at the request and expense of Purchaser, an order or other assurance
that confidential treatment will be accorded to such portion of the Confidential
Information required to be disclosed as Purchaser shall designate.

8.9      Non-Competition; Non-Solicitation.

(a)      Non-Competition.    Each Seller Party hereby acknowledges that it is
familiar with the trade secrets of the Business and other Confidential
Information. Each Seller Party acknowledges and agrees that Purchaser and its
Affiliates would be irreparably damaged if such Seller Party were to provide
services or to otherwise participate in the business of any Person competing
with the Business or in a similar business and that any such competition by such
Seller Party would result in a significant loss of goodwill by Purchaser in
respect of the Business. Each Seller Party further acknowledges and agrees that
the covenants and agreements set forth in this Section 8.9 were a material
inducement to Purchaser to enter into this Agreement and to perform its
obligations hereunder, and that Purchaser and its Affiliates would not obtain
the benefit of the bargain set forth in this Agreement as specifically
negotiated by the parties hereto if any Seller Party breached the provisions of
this Section 8.9. Therefore, in further consideration of the Aggregate Purchase
Price, each Seller Party agrees that for the period

 

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beginning on the Closing Date and ending on the five (5) year anniversary of the
Closing Date such Seller Party shall not, and shall cause it or his Affiliates
not to, directly or indirectly, either for himself, herself, itself or through
any other Person, engage in, render service to, participate in, or permit such
Person’s name to be used by any enterprise engaging in, any business or
enterprise (including any division, group or franchise of a larger organization)
that competes with the Business as conducted as of the Closing Date in the
Geographical Area; provided, however, that this restriction shall not prohibit
such Seller Party from (x) passive beneficial ownership of less than five
percent (5%) of any class of securities of a publicly-held corporation whose
stock is traded on a U.S. national securities exchange or traded in the
over-the-counter market, (y) providing harbor, fleeting and towing services
through MMS or (z) leasing barges owned by a Seller Party to third parties. For
purposes of this Agreement, the term “participate” includes any direct or
indirect interest in any enterprise, whether as a shareholder, member, partner,
joint venturer, investor, lender, franchisor, franchisee, executive, consultant
or otherwise or rendering any direct or indirect service or assistance to any
Person. Each Seller Party agrees that this covenant is reasonably designed to
protect the Purchaser’s substantial investment and is reasonable with respect to
its duration, geographical area and scope.

(b)      Non-Solicitation/No Hire.    For so long as the Seller Parties have
continuing obligations under Section 8.9(a), no Seller Party shall (and each
Seller Party shall cause his or its Affiliates not to) directly, or indirectly
through another Person, (i) induce or attempt to induce any employee of
Purchaser (or any of its Affiliates) related to the Business to leave his or her
employment, or in any way interfere with the relationship between Purchaser (or
any of its Affiliates) and any such employee, (ii) hire any person who was an
employee of Purchaser (or any of its Affiliates) related to the Business at any
time during the six-month period immediately prior to the date on which such
hiring would take place (except as a result of a general solicitation for
employment not specifically targeted at such employee), or (iii) call on,
solicit or service any customer, charterer, lessor, vendor, licensee or licensor
of the Business in order to induce or attempt to induce such Person to cease
doing or decrease their business with Purchaser and the Business or its
Affiliates, or in any way interfere with the relationship between any such
customer, charterer, lessor, vendor, licensee or licensor of the Business
(including making any negative statements or communications about the Business,
Purchaser or its Affiliates).

(c)      Modification.    If, at the time of enforcement of any of the
provisions of this Section 8.9, a court determines that the restrictions stated
herein are unreasonable under the circumstances then existing, the parties
hereto agree that the maximum period, scope or geographical area reasonable
under the circumstances shall be substituted for the stated period, scope or
area. The parties further agree that such court shall be allowed to revise the
restrictions contained herein to cover the maximum period, scope or geographical
area permitted by Law.

(d)      Extension of Restricted Period.    Notwithstanding anything to the
contrary contained herein, the restricted periods set forth in Section 8.9(a) or
(b), respectively, shall be extended with respect to any breaching party for a
period equal to any time period that such breaching party is in violation of
Section 8.9(a) or (b), respectively.

(e)      Irreparable Harm.    If any Seller Party or any of his or its
Affiliates (the “Restricted Persons”) breaches, or threatens to commit a breach
of, any of the provisions of

 

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Section 8.8 or this Section 8.9 (the “Restrictive Covenants”), Purchaser shall
have the right and remedy to have the Restrictive Covenants specifically
enforced by any court of competent jurisdiction, it being agreed that any breach
or threatened breach of the Restrictive Covenants would cause irreparable injury
to Purchaser and that money damages would not provide an adequate remedy to
Purchaser. Each of the rights and remedies set forth herein shall be independent
of the others, severally enforceable, and in addition to, and not in lieu of,
any other rights and remedies available to Purchaser at law or in equity.

8.10    Use of L.W. Matteson Name.   After the Closing, Seller may not, directly
or indirectly, use the name “L.W. Matteson,” “Matteson Dredging” or any
derivative thereof or any similar name to identify itself, except solely in
connection with the performance of, and solely during the term of, the
Subcontract Agreement. Seller shall be responsible for all filing fees required
to be paid in connection with filing Seller’s change of name amendments in the
State of Iowa and in each other state in which it is qualified to transact
business. For avoidance of doubt, this restriction shall not prohibit the
Shareholders from using the name “Matteson Marine Service” for the sole purposes
of providing harbor, fleeting and towing services.

8.11    Shareholders’ Guarantee.   The Shareholders hereby, jointly and
severally, unconditionally and irrevocably guarantee for the benefit of
Purchaser, the Purchaser Indemnitees and their respective heirs, successors and
assigns all of the obligations of Seller under this Agreement, including under
Article VI, and under each other agreement, contract or instrument executed and
delivered by Seller to Purchaser in connection with the transactions
contemplated by this Agreement; provided, however, that (a) any Liability
regarding any breach of Section 6.1(e) shall be several, and not joint and
several and (b) the Shareholders’ maximum aggregate liability under this
Section 8.11 for indemnification of Adverse Consequences under Sections 6.1(a),
6.1(c) and 6.1(d) shall not exceed an amount equal to the aggregate net
after-tax proceeds received by the Seller under this Agreement (not taking into
account any transaction fees and expenses paid by Seller).

8.12    Tax Allocation. For purposes of this Agreement, (i) liability for any
Taxes determined by reference to income, capital gains, gross income, gross
receipts, sales, net profits, windfall profits or similar items or resulting
from a transfer of assets incurred during a period beginning before and ending
after the Closing Date shall be allocated between the portion of the period
beginning prior to and ending on the Closing Date and the portion of the period
ending after the Closing Date shall be based on the date on which such items
accrued; (ii) liability for all other Taxes such as real property Taxes and
personal property Taxes shall be pro rated between such periods on a per diem
basis based on the number of days in the taxable period for which each party is
liable for Taxes hereunder; and (iii) any interest, penalties, additions to tax
or additional amounts that relate to Taxes for any period, or a portion of any
period, ended on or before the Closing Date shall be treated as occurring on or
prior to the Closing Date whether such items are incurred, accrued, assessed or
similarly charged on, before or after the Closing Date.

8.13    Seller’s Insurance.   Seller shall cause all of its occurrence-based
insurance policies to remain in full force and effect after the Closing in
accordance with the terms thereof.

 

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8.14    Property on Adjacent Parcel.    Within thirty (30) days after the
Closing, Seller shall either (a) cause to be removed from the property adjacent
to its Burlington, Iowa yard all property stored on such property and, in
connection therewith, to remediate any and all damage caused by such storage,
all at the sole cost and expense of Seller, or (b) obtain from the owner of such
adjacent property written permission, in form and substance reasonably
satisfactory to Purchaser, for such property to remain.

ARTICLE IX

Miscellaneous

9.1      Cost and Expenses.    Purchaser will pay its own costs and expenses
(including attorneys’ fees, accountants’ fees and other professional fees and
expenses) in connection with the negotiation, preparation, execution and
delivery of this Agreement and the consummation of the purchase of the Purchased
Assets and the other transactions contemplated by this Agreement (except as
otherwise specifically provided for herein); and Seller will pay its own costs
and expenses (including attorneys’ fees, accountants’ fees and other
professional fees and expenses) in connection with the negotiation, preparation,
execution and delivery of this Agreement and the consummation of the sale of the
Purchased Assets and the other transactions contemplated by this Agreement
(except as otherwise specifically provided for herein).

9.2      Entire Agreement.     The Disclosure Schedule, the Schedules and the
Exhibits referenced in this Agreement are incorporated into this Agreement and
together contain the entire agreement between the parties hereto with respect to
the transactions contemplated hereunder, and supersede all negotiations,
representations, warranties, commitments, offers, contracts and writings prior
to the date hereof, including the letter of intent dated November 2, 2010
between Purchaser and Seller; provided, however, that unless and until there is
a Closing, the parties shall continue to be bound by that certain
Confidentiality Agreement, dated September 2, 2010, between Purchaser and
Seller. No waiver and no modification or amendment of any provision of this
Agreement shall be effective unless specifically made in writing and duly signed
by the party to be bound thereby.

9.3      Counterparts.   This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which, together, shall constitute
one and the same instrument. Facsimiles or other electronic copies of signatures
will be deemed to be originals.

9.4      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 parties; provided, however, that Purchaser may
assign all or part of its rights under this Agreement and delegate all or part
of its obligations under this Agreement to one or more of its Affiliates, in
which event all the rights and powers of Purchaser and remedies available to it
under this Agreement shall extend to and be enforceable by each such Affiliate.
Any such assignment and delegation shall not release Purchaser from its
obligations under this Agreement. 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 of Purchaser where reference is made to actions to
be taken with respect to the acquisition of the Business or Purchased Assets,
and shall be deemed to include both Purchaser and each such Affiliate where
appropriate, including with respect to all obligations of Purchaser under this
Agreement. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their successors and permitted assigns.

 

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9.5      Severability.      If any provision hereof shall be held invalid or
unenforceable by any court of competent jurisdiction or as a result of future
legislative action, such holding or action shall be strictly construed and shall
not affect the validity or effect of any other provision hereof.

9.6      Headings.    The captions of the various Articles and Sections of this
Agreement have been inserted only for convenience of reference and shall not be
deemed to modify, explain, enlarge or restrict any of the provisions of this
Agreement.

9.7      Risk of Loss.   Risk of loss, damage or destruction to the Purchased
Assets shall be upon Seller until the Closing, and shall thereafter be upon
Purchaser. In the event of any loss, damage or destruction to the Purchased
Assets prior to the Closing, the proceeds of, or any claims or any loss payable
under, any insurance policy of Seller, or judgment or award with respect thereto
shall be payable to Seller, which, assuming Purchaser closes the transactions
contemplated hereby, shall repair, replace or restore any such property to
Purchaser’s reasonable satisfaction or make such other provision as the Seller
and Purchaser may agree.

9.8      Governing Law.   The validity, interpretation and effect of this
Agreement shall be governed exclusively by the laws of the State of Illinois,
excluding the “conflict of laws” rules thereof.

9.9      Press Releases and Public Announcements.    Following the Closing, no
Seller Party shall, and shall not cause his or its Affiliates or representatives
to, issue any press release or other public statement regarding this Agreement
or the transactions contemplated by this Agreement without the prior approval of
Purchaser.

9.10    U.S. Dollars. All amounts expressed in this Agreement and all payments
required by this Agreement are in United States dollars.

9.11    Notices.

(a)      All notices, requests, demands and other communications under this
Agreement shall be in writing and delivered in person, or sent by facsimile or
sent by reputable overnight delivery service and properly addressed as follows:

To Purchaser:

Great Lakes Dredge & Dock Company, LLC

2122 York Road

Oak Brook, IL 60523

Fax: (630) 574-3007

Attention: President

and

 

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Great Lakes Dredge & Dock Company, LLC

2122 York Road

Oak Brook, IL 60523

Fax: (630) 574-3007

Attention: Assistant General Counsel

With a copy to:

Winston & Strawn LLP

35 West Wacker Drive

Chicago, IL 60601

Fax: (312) 558-5700

Attention: Patrick O. Doyle

To Seller:

L.W. Matteson, Inc.

P.O. Box 667

Burlington, IA 52601

Attention: Lawrence W. Matteson

With a copy to:

Duane Morris LLP

190 S. LaSalle Street, Suite 3700

Chicago, IL 60603

Fax: (312) 499-6701

Attention: Brian P. Kerwin

To Lawrence W. Matteson:

#1 South Point

Burlington, Iowa 52601

To Larry W. Matteson:

#1 South Point

Burlington, Iowa 52601

(b)      Any person may from time to time change its address for the purpose of
notices to that person by a similar notice specifying a new address, but no such
change shall be deemed to have been given until it is actually received by the
person sought to be charged with its contents.

(c)      All notices and other communications required or permitted under this
Agreement which are addressed as provided in this Section 9.11 if delivered
personally or courier, shall be effective upon delivery; if sent by facsimile,
shall be delivered upon receipt of proof of transmission.

 

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9.12    SUBMISSION TO JURISDICTION; VENUE. THE PARTIES HERETO HEREBY IRREVOCABLY
SUBMIT TO THE EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT LOCATED
WITHIN IN PEORIA, ILLINOIS OVER ANY DISPUTE ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY AND EACH PARTY HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH DISPUTE OR ANY SUIT,
ACTION OR PROCEEDING RELATED THERETO SHALL BE HEARD AND DETERMINED IN SUCH
COURTS. THE PARTIES HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY SUCH DISPUTE BROUGHT IN SUCH COURT OR ANY DEFENSE OF
INCONVENIENT FORUM FOR THE MAINTENANCE OF SUCH DISPUTE. EACH OF THE PARTIES
HERETO AGREES THAT A JUDGMENT IN ANY SUCH DISPUTE MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.

9.13    WAIVER OF JURY TRIAL.   TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW
THAT CANNOT BE WAIVED, EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, AND
COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR
OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE,
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING IN WHOLE OR IN PART UNDER,
RELATED TO, BASED ON OR IN CONNECTION WITH THIS AGREEMENT, THE SUBJECT MATTER
HEREOF OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH, OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN)
OR ACTIONS OF ANY PARTY HERETO IN CONNECTION WITH ANY SUCH AGREEMENTS, WHETHER
NOW EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING IN TORT OR CONTRACT OR
OTHERWISE. ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION 9.13 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH
PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

9.14    Waiver.   Any party hereto may waive compliance by or extend the time of
performance of any obligation or act for any other party with respect to any
provision of this agreement. No waiver of any provision or extension shall be
construed as a waiver of any other provision or an extension of time for the
performance of any other obligation or act hereunder. Any waiver or extension
must be in writing.

9.15    No Third-Party Beneficiary.   This Agreement is being entered into
solely for the benefit of the parties hereto, the Purchaser Indemnitees, the
Seller Indemnitees, and the parties do not intend that any employee or any other
person shall be a third-party beneficiary of the covenants by either Seller or
Purchaser contained in this Agreement.

9.16    Enforcement Costs.    In the event that either party seeks to enforce
its rights or remedies under this Agreement (whether for injunctive relief or
damages or both) or seeks a declaration of costs or obligations under this
Agreement, the prevailing party shall be awarded its reasonable attorneys’ fees,
costs and expenses.

 

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[signature page follows]

 

- 63 -

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IN WITNESS WHEREOF, the parties hereto have executed this Asset Purchase
Agreement as of the date first written above.

 

SELLER:     L.W. MATTESON, INC.     By:  

/s/ Lawrence W. Matteson

    Name:  

Lawrence W. Matteson

    Title:  

President

PURCHASER:     GREAT LAKES DREDGE & DOCK COMPANY, LLC     By:  

/s/ Bruce J. Biemeck

    Name:  

Bruce J. Biemeck

    Title:  

President and Chief Financial Officer

SHAREHOLDERS:        

/s/ Lawrence W. Matteson

    Lawrence W. Matteson    

/s/ Larry W. Matteson

    Larry W. Matteson

--------------------------------------------------------------------------------

Schedule 2.3(b)

Illustrative Calculation of Earnout Payments

 

Example:    Yr. 1      Yr. 2      Yr. 3  

Business EBITDA

   $ 8.0M       $ 8.5M       $ 15.0M   

Hurdle EBITDA

   $ 9.0M       $ 9.0M       $ 9.0M                              

Annual Total

   ($ 1.0M)       ($ 0.5M)       $ 6.0M   

Less Deficit

      ($ 1.0M)       ($ 1.5M)                              

Cumulative EBITDA for Earn-Out

   ($ 1.0M)       ($ 1.5M)       $ 4.5M                              

Earnout Payment

   $ 0       $ 0       $ 825,000   

Calculated as follows:

        

$ 3.0M x 15%

         $ 450,000   

$ 1.5M x 25%

         $ 375,000                  

Total

         $ 825,000                  

--------------------------------------------------------------------------------

Schedule 2.9

Purchase Price Allocation Schedule

Pursuant to Section 2.9 of the Agreement, the Aggregate Purchase Price (and
Assumed Liabilities and other relevant items) less a reduction in the Cash
Purchase Price in an amount equal to $541,000 and less the amount of the
Shareholder Assets Purchase Price shall be allocated, in the order in which such
consideration is specified in Section 2.9, among the Purchased Assets (other
than the Shareholder Assets) in the following manner:

1.         First, to accounts receivable (including construction contract
receivable, costs and estimated earnings in excess of billings on uncompleted
contracts and deposits) and prepaid expenses in an amount equal to their book
value as of the Closing Date;

2.         Next, to equipment and other tangible assets (including parts and
supplies) in an amount not in excess of $40.0 million; and

3.         Finally, any remaining Aggregate Purchase Price not allocated under
items 1. and 2., to goodwill and going concern value.

With respect to the Cash Purchase Price, an amount equal to the Shareholder
Assets Purchase Price shall be allocated to the Shareholder Assets.

With respect to the Cash Purchase Price, $541,000 shall be allocated to the
covenants-not-to-compete under this Agreement and any ancillary agreements.

--------------------------------------------------------------------------------

December 31, 2010

Great Lakes Dredge & Dock Company, LLC

2122 York Road

Oak Brook, IL 60523

Ladies and Gentlemen:

Attached hereto is the Disclosure Schedule referred to in that certain Asset
Purchase Agreement, dated as of December 31, 2010 (the “Agreement”), by and
among Great Lakes Dredge & Dock Company, LLC, a Delaware limited liability
company (“Purchaser”), L.W. Matteson, Inc., an Iowa corporation (“Seller”), and
Lawrence W. Matteson and Larry W. Matteson (each a “Shareholder” and together
with Seller, the “Seller Parties”). Capitalized terms used but not defined
herein have the respective meanings specified in the Agreement.

Unless otherwise indicated herein, all section references are to Sections of the
Agreement. The disclosures contained in this Disclosure Schedule: (i) relate to
certain matters concerning the disclosures required and the transactions
contemplated by the Agreement, (ii) are qualified in their entirety by reference
to specific provisions of the Agreement, and (iii) are not intended to
constitute and shall not be construed as indicating that such matters are
required to be disclosed herein, nor shall such disclosures be construed as
admissions that such information is material with respect to Seller or any
Shareholder, except to the extent required by the Agreement.

If and to the extent any information required to be furnished in any section of
this Disclosure Schedule is contained in another section of this Disclosure
Schedule, such information will be deemed to be included in all sections of this
Disclosure Schedule in which such information is required to be included to the
extent such information is clearly cross-referenced on the applicable section of
this Disclosure Schedule. The following comprise the disclosures authorized and
contemplated by the Agreement:

--------------------------------------------------------------------------------

Section 4.1(a)

Foreign Qualifications

1.   State of Alabama

2.   State of Arizona

3.   State of Arkansas

4.   State of Florida

5.   State of Georgia

6.   State of Illinois

7.   State of Iowa

8.   State of Indiana

9.   State of Kansas

10. State of Louisiana

11. State of Michigan

12. State of Minnesota

13. State of Mississippi

14. State of Missouri

15. State of Nebraska

16. State of Oklahoma

17. State of Virginia

18. State of Wisconsin

 

2

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Section 4.1(b)

Capitalization

 

     Shares Owned              

 

Lawrence W. Matteson

  

 

 

 

664

 

  

    

 

Larry W. Matteson

  

 

 

 

   396

 

  

    

 

Total No. of Shares

  

 

 

 

1,060

 

  

  

 

3

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Section 4.3

Required Consents and Approvals

Open Government Contracts and Subcontracts

 

1)

  Title of Contract:   McClellan-Kerr Station Dredging   Date of Award:   July
30, 2010   Contract Number:   W9127S-10-D-0019   Parties Involved:   U.S. Army
Corps of Engineers (“USACE”), Little Rock / L.W. Matteson, Inc. (“LWM”)

2)

  Title of Contract:   Chain of Rocks South Seepage Berms   Date of Award:  
August 25, 2010   Contract Number:   W912P9-10-D-0529   Parties Involved:  
USACE, St. Louis District / A&H Contractors / LWM (sub for A&H)

3)

  Title of Contract:   Iowa River - Flint Creek Levee District #16 (notice)  
Date of Award:   September 27, 2010   Contract Number:   09-2916.101/00936-16  
Parties Involved:   Flint Creek Levee District #16 / Klingner & Associates / LWM

4)

  Title of Contract:   Lake Decatur Dredging   Date of Award:   March 31, 2010  
Contract Number:   W09-16   Parties Involved:   City of Decatur, IL / Homer L.
Chastain / LWM

5)

  Title of Contract:   Pond A Bridgeway Acres Landfill   Date of Award:  
December 15, 2010   Contract Number:   101-0048-CP(RM)   Parties Involved:  
Pinellas County, FL Utilities / LWM

6)

  Title of Contract:   Lease of Cutterhead, Hydraulic, Pipeline Dredge (NLT
22-Inch Diameter) Fully Operated with Attendant Plant and Personnel, with a
Draft NTE 11 Feet, for Construction and Maintenance Dredging within the
Vicksburg and adjacent Districts   Date of Award:   March 31, 2010   Contract
Number:   W912EE-10-C-0011   Parties Involved:   USACE, Vicksburg / LWM

7)

  Title of Contract:   Chain of Rocks, Berm #6   Date of Award:   June 12, 2009
  Contract Number:   W912P9-07-D-0513   Parties Involved:   USACE, St. Louis /
A&H Contractors / LWM (sub for A&H Contractors)

8)

  Title of Contract:   Kaskaskia Dredging 2009 (pending modification)   Date of
Award:   July 20, 2009   Contract Number:   W912P9-09-C-0415   Parties Involved:
  USACE, St. Louis / A&H Contractors / LWM (sub for A&H)

 

4

--------------------------------------------------------------------------------

9)

  Title of Contract:   Henderson County Drainage District No. 1 Levee Repairs  
Date of Award:   August 28, 2009   Contract Number:   W912EK-09-C-0094   Parties
Involved:   USACE, Rock Island District / LWM

10)

  Title of Contract:   Louisa County Drainage District No. 11 Levee Repairs  
Date of Award:   September 24, 2009   Contract Number:   W912EK-09-C-0106  
Parties Involved:   USACE, Rock Island District / LWM

Service Contracts

1.   WINOPS

2.   HYPACK

3.   Timberline Accounting

4.   ABRA HR / Payroll

5.   Bureau of National Affairs

Charter Agreement

Barge Charter Party dated February 10, 2010 between Serodino, Inc. and L.W.
Matteson, Inc.

Team Agreement

Team Agreement dated May 27, 2009 between Newt Marine, Peterson Contractors,
Inc. and L.W. Matteson, Inc.

Apartment Rental

Residential Lease Agreement dated February 17, 2010 between Longacre Ponds
Apartments and L.W. Matteson, Inc.

 

5

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Section 4.4

Brokers

McGladrey Capital Markets, LLC

1 S. Wacker Drive, Suite 800

Chicago, IL 60606-4650

 

6

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Section 4.6

Related Party Transactions

 

1. Matteson Marine Service

#1 South Point

Burlington, IA 52601

 

    Owners:    Shares         

 

Lawrence W. Matteson

  

 

 

 

6,264

 

  

    

 

Larry W. Matteson

  

 

 

 

  3,736

 

  

          10,000      

Description of Business:

Matteson Marine Service, Inc. operates a harbor service in Burlington, IA and
surrounding area.

 

2. L.W. Matteson, Inc. Corporate Office

#1 South Point

Burlington, IA 52601

* Owned by Seller

 

3. L.W. Matteson, Inc. Storage Building

1230 S. Main Street

Burlington, IA 52601

* Owned by Seller

 

4. L.W. Matteson, Inc. Maintenance Yard

2815 – 91st Avenue

Burlington, IA 52601

* Owned by Seller

 

7

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Section 4.7(c)(i)

Seller Personal Property

 

 

L.W Matteson, Inc.

   12/24/10 9:00AM     

Fixed Asset Listing - Non Marine

    

For the Period 1/28/81 to 12/31/10

                 

Asset ID

   Description    Serial Number       

LWM000009

   ‘75 Trailer - Gooseneck    18579     

LWM000014

   MCELROY FUSION UNIT        

LWM000018

   FUSION UNIT ACCES        

LWM000019

   ‘74 Trailer - Fusion Unit - Special    IA19004     

LWM000049

   5TH WHEEL TRAILER        

LWM000050

   3-CONCRETE BUCKETS        

LWM000052

   SWIVEL JOINT -BARGE        

LWM000056

   JD DOZER        

LWM000065

   BOOM FOR MANITOWOC        

LWM000080

   CLAM BUCKET        

LWM000083

   MANITOWOC REPAIRS        

LWM000084

   ‘83 Chevy C-30 1 Ton    1GCHC34J8DJ149139     

LWM000089

   Crane-Manitowoc 3900 - 1970    39884     

LWM000091

   USED BOAT & TRAILER        

LWM000092

   1970 Grove TM120 10-Ton Barge Crane    3951     

LWM000107

   REPAIRS-BARGE TENDER        

LWM000118

   KEY CABINET        

LWM000160

   RUDDER ANGLE INDICTR        

LWM000176

   BOOSTER PUMP-ENG GON        

LWM000185

   VAN BOX        

LWM000191

   Crane-P&H Omega 18 All Terrain    44700     

LWM000193

   BALL JOINT ASSEMBLY        

LWM000218

   1971 Link-Belt LS108B 45-Ton Crawler Crane    9LG4160     

LWM000226

   WRECKING BALL        

LWM000244

   WINCH-GEARMATIC A22        

LWM000245

   WINCH-GEARMATIC A22        

LWM000246

   FUSION UNIT        

LWM000247

   Crane - Linkbelt 418 - 1967    4ER210     

LWM000256

   DRAGLINE BUCKET        

LWM000257

   DREDGE PIPE AN#200        

LWM000258

   CARGO CONTAINER        

LWM000262

   CARGO TOOL SHED        

LWM000263

   ROOT RAKE        

LWM000275

   PLASTIC PIPE AN#207        

LWM000276

   STEEL DREDGE PIPE        

LWM000278

   22”BOOSTER W/2 CAT E        

LWM000287

   22” PIPE AN#200        

LWM000288

   U TWN DISC CLTCH 207        

LWM000289

   GRATING FOR DREDGE        

LWM000290

   DISCHARGE HOSES 200        

LWM000291

   D6C CAT CRAWLER      

 

8

--------------------------------------------------------------------------------

  LWM000296    USED PIPE AN#200         LWM000297    USED CEMENT BUCKETS        
LWM000299    USED 435 CAT SCRAPPR         LWM000300    12”BOOSTER DETROIT-T   
     LWM000302    GEAR BOX AN#200         LWM000303    CUTTER HEAD AN#200      
  LWM000308    ‘90 Chevy Pickup    2GCGK39N1L198167      LWM000309    USED HOSE
        LWM000310    USED HOSE         LWM000311    NEW WINCH         LWM000312
   NEW WINCH         LWM000313    NEW SHEANE         LWM000316    ANCHOR AN#313
        LWM000317    PIPE ADDITION AN#         LWM000318    CAT 70 PULL SCRAPER
        LWM000322    12” NEW PLASTIC PIPE         LWM000324    50B AM HOIST USED
        LWM000354    40’ & 20’ CONTAINER         LWM000355    12” NEW PLASTIC
PIPE         LWM000356    BARGE - Used         LWM000357    GAS BOY PUMP        
LWM000358    DRIP PAN-FUEL TANK         LWM000359    FUEL PUMP - JAEGER 2X2   
     LWM000360    FUEL PUMP - JAEGER 2X2         LWM000361    DOZER -
CATERPILLAR D7H         LWM000362    DOZER - CATERPILLAR D7H         LWM000363
   CUTTER DRIVE - IOWA         LWM000364    SPARE SHAFT - IOWA         LWM000368
   BLADE - CAT 7U FOR D7         LWM000369    22” Y VALVE         LWM000370   
22” Y VALVE         LWM000371    22” Y VALVE         LWM000377    TUBULAR JIB &
20’EXT         LWM000383    TIMBERLINE SOFTWARE         LWM000385    Crane -
Pettibone Hydraulic Multi - 1979    97-S-A16830      LWM000386    ‘76 Trailer -
Transcraft    TC9675      LWM000387    500 GAL TANK         LWM000390   
ALUMACRAFT JOHN BOAT         LWM000391    ‘92 Trailer - Wesco Boat   
1W71611TON1000417      LWM000396    PIPELAYER - CAT 561 -U         LWM000419   
Work Boat #1 - Plowboy         LWM000421    DREDGE LADDER - USED        
LWM000423    Booster#1 18”w/ct399         LWM000434    JD PUMP SYSTEM NO 1      
  LWM000435    JD PUMP SYSTEM NO 2         LWM000437    Booster#2 16”w/Ct399   
     LWM000443    CLYDE DB DRAWN WINCH         LWM000444    TUG W/TRAILER      
  LWM000445    TUG W/TRAILER         LWM000452    ‘90 CLARK 21’ WKBOAT      

 

9

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  LWM000454    125KW GENSET-PIPEMOV         LWM000455    EXTENSION FOR GENSET   
     LWM000461    WINCH FOR CAT D6H         LWM000468    24” MCELROY FUSION U   
     LWM000469    ‘66 MONARK 19’ WKBOA         LWM000478    HYSTER FORKLIFT   
     LWM000492    Dozer - CAT D6H LGP         LWM000493    Dozer - CAT D6H XL   
     LWM000494    Excavator - CAT 325L         LWM000495    Dozer - CAT D7H   
     LWM000507    20”SDR9.3 PIPE 45 FT         LWM000508    26 18SDR17 FLG ADPTR
        LWM000512    WINCH - GEARMATIC         LWM000513    WINCH - GEARMATIC   
     LWM000515    WINCH - 10 TON MANUAL         LWM000516    WINCH - 10 TON
MANUAL         LWM000520    20 FT CARGO CONTAINR         LWM000525    11X23
LOADING RAMP         LWM000526    7000 FT PIPE         LWM000532    SPUD PIPE   
     LWM000544    550gal Tank Lite Skd         LWM000553    TRANSFORMER   
1E00334      LWM000568    PUMP IMPELLER SHAFT         LWM000573    1960 FT POLY
PIPE         LWM000574    12 STUBENDS W/RINGS         LWM000582    CUMMINS
GENERATR SET    F820625185      LWM000583    550 GAL TANK/FITTNGS        
LWM000584    PWR DISTRIBTN SWITCH         LWM000585    5000’ POLY PIPE        
LWM000586    10 12” FLANGE ADAPTR         LWM000587    10 BLACKUP RINGS        
LWM000589    CUMMINS GENERATR SET         LWM000591    COMM SHEARNG DBL PMP   
     LWM000601    Crane - National 300A - 1996    16213      LWM000604    BLOCK
        LWM000605    BLOCK         LWM000606    NAT’L CRANE BARGE        
LWM000607    8 12” FLANGE ADAPTOR         LWM000610    1000 GAL SKID TANK      
  LWM000611    1000 GAL SKID TANK         LWM000614    PIPE - Used - 20” & 16”
        LWM000618    SPUD FOR LW DREDGE         LWM000638    LADDER PUMP        
LWM000640    WINCH FOR IA DREDGE         LWM000641    RADAR FOR BULL FROG      
  LWM000642    RADAR FOR MELISSA K         LWM000643    RADAR-COLEE        
LWM000644    LADDER PUMP-STARTUP         LWM000721    RUBBER HOSE        
LWM000724    STORAGE CONTAINR 40’      

 

10

--------------------------------------------------------------------------------

 

LWM000725

   STORAGE CONTAINR 40’        

LWM000729

   22”BOOSTER W/ALCO EN        

LWM000732

   40 PONTOONS/PIPE CRA        

LWM000733

   PLASMA CUTTER/TORCH        

LWM000735

   ADD TO ALCO BOOSTER        

LWM000737

   Mobile Office, Turbo    43030698     

LWM000740

   Trailer - Boat    1Z9BB1622WA056022     

LWM000743

   PIPE MOVER        

LWM000746

   PUMP SHELL-LADDER PU        

LWM000758

   BEVEL MACHINE        

LWM000762

   ‘94 Chevy K3500    1GBHK34N8RE194219     

LWM000764

   ‘99 Ford F350 S/C    1FWDX37F4XEE02940     

LWM000765

   Fork Truck, Clark“C”        

LWM000767

   Crane, Terex RT 450        

LWM000769

   ‘99 Chev K20 Ext Cab    1GCGK29U1XE221193     

LWM000770

   Srv Body-‘99 F350        

LWM000773

   Topper-‘99 Chev K20        

LWM000785

   Compressor, 5hp        

LWM000786

   Tank w/Stand        

LWM000787

   Engine,3406 LW Dredge        

LWM000788

   Booster #1 -Cat 3516    027Z00803     

LWM000789

   Booster #2 - Cat 3516    027Z00804     

LWM000790

   Booster #3 - Cat 3516    027Z00805     

LWM000791

   Engine&Pump-Sandpiper    027Z00806     

LWM000792

   Engine,Aux-Sandpiper    06TB18548     

LWM000800

   Engine Recond-AMMCO        

LWM000801

   Generator, @125KW        

LWM000802

   ‘00 Ford F250 S/C    1FTNX21S6YEA03223     

LWM000808

   Water Server System        

LWM000809

   Tractor, Cat D6CLGP    069U00372     

LWM000815

   Storage Containr 20’        

LWM000816

   Storage Containr 20’        

LWM000817

   Tank, 9000 gal 8x24        

LWM000818

   Tank, 9000 gal 8x24        

LWM000820

   Generator, 100kw        

LWM000821

   Generator, Cat used        

LWM000822

   Tanks-40 @ 2350 gal        

LWM000823

   Tank, Upright        

LWM000831

   Hyd Tank-LW Drg-Repl        

LWM000839

   Anti 2 Block-GrovCrn        

LWM000840

   Tank-8x26’ Sngle Wal        

LWM000841

   Bucket-for Cat 345BL        

LWM000842

   ‘00 Ford F350 S/C 4x4    1FDWX37F8YED03555     

LWM000843

   2-Compressors, 5hp        

LWM000844

   Compressor,3hp Horiz        

LWM000855

   ‘00 Honda TRX350FMY        

LWM000858

   Truck Service Body        

LWM000859

   Compressor, Curtis        

LWM000860

   Compressor, Quincy        

LWM000862

   3 Compressors,Boostr      

 

11

--------------------------------------------------------------------------------

 

  LWM000863    Fathometer         LWM000870    Tanks(20)-48”x12’Wht        
LWM000878    Gen Set, Cat 3304         LWM000879    Gen Set, Cat 3304        
LWM000899    Mobile Office, 8’x32’    00-21358T      LWM000902    Excavator, Cat
345BL    4SS00277      LWM000903    Valve System, Hofer 14”         LWM000908   
Crane, OH Yard Bldg    S01542      LWM000910    ‘99 GMC K2500   
1GTGK29U5XE527541      LWM000915    Depth Sounder    172      LWM000916    End
Dump - Morooka    3119      LWM000925    Crane Ext Section - 20’    9M2258     
LWM000926    ‘03 GMC Ext Cab    1GTHK29U93E185574      LWM000927    Paint System
        LWM000933    GPS Receiver         LWM000934    Truck - ‘03 Ford F350   
1FDWX37P13EC42454      LWM000936    Bevel Machine & Attachments    B4C5645     
LWM000937    Compressor - Curtis-D-97    D97A45FO30044AP      LWM000938    Jib -
Manitowoc Crane         LWM000939    Generator - Wacker G25    53401G62     
LWM000942    Truck - ‘03 GMC Sierra    1GTHK29U63E368091      LWM000943    Truck
- ‘03 GMC Sierra    2GTEK19T631371157      LWM000944    Winch    H4443     
LWM000946    Spreader - Liquid Manure         LWM000947    Tractor -
Agricultural    8858501      LWM000948    Winch - Pullmaster Hydraulic    69871
     LWM000949    Copier/Printer         LWM000950    Computer - Sandpiper      
  LWM000953    Loader - Mod 4810 Positrack    ANC 00219      LWM000955    Air
Compressor - 185CFM    319940      LWM000956    Air Compressor - 90CFM    220070
     LWM000967    Dredge pipes and pontoons         LWM000968    Pipe - Steel
(New)         LWM000969    Hose Assemblies - Rubber (Used)         LWM000970.1
   Pipe (Steel) & Elbows - 12 3/4”         LWM000970.2    Pipe (Steel) & Elbows
        LWM000971    Pipe (Steel) - 20”         LWM000972    Pipe (Steel) - 20”
        LWM000973    Pipe (Steel) - 20”         LWM000975    Welder - Thermal
Arc    N92103AK1707      LWM000976    Air Compressor - IR    37FU28X33     
LWM000977    Pipe - Used Carbon Steel         LWM000978    Loader - Volvo, used
   62161      LWM000979    Forks for loader         LWM000980    Engine Replaced
- F250    1FTNX21S6YEA03223      LWM000981    Racks for Pipe         LWM000982
   Loader - JD 644G Wheel    562219      LWM000983    Loader - JD Wheel   
563337      LWM000984    Forks - Pair for FA#982         LWM000985    Forks for
     

 

12

--------------------------------------------------------------------------------

  LWM000986    Trailer - 2004 20’    5L3CX20224L001688      LWM000987    GPS
System    TR040044,40001,40043,40042      LWM000988    Forklift - Hyster used   
C007D01739E      LWM000989    Dredgepack software on LW         LWM000992   
Winch, Hydraulic    71395      LWM000993    Crane - RT160 Terex    58213     
LWM000994    Welder - Linc         LWM000995    Truck - ‘04 GMC Sierra   
2GTEK19T241117625      LWM000996    Truck - ‘04 Chevy    1GCEK19T54E344158     
LWM000998    Generator - Leroy-Sommer 60kw    LSA4326J6-04      LWM001004    GPS
System    0224091410      LWM001009    Pipe - 22” x .375” Wall         LWM001010
   Storage Container    GLDU020436-6      LWM001011    Storage Container   
GLDU021405-0      LWM001012    Storage Container - Seacon    GLDU020847-0     
LWM001013    Storage Container - Seacon    GLDU021857-0      LWM001014    Truck
- ‘05 GMC Sierra    1GTEK19B55E151596      LWM001016    Refurbish - D6H LGP   
03YG05718      LWM001020    Generator Set, DR50C4-JH    M02275      LWM001021   
Topper - for Truck asset #832    096886      LWM001024    Booster Pump   
99U1632      LWM001025    Generator Set, JD         LWM001026    Winch - 40 Ton
Hydra-electric         LWM001032    Laptop Computer         LWM001033    Grove
TM600 60 Ton Hydraulic Truck Crane         LWM001035    2 Float Tanks for Swamp
Buggy         LWM001037    2004 GMC Envoy    1GKDT13SX42225178      LWM001041   
John Deere Generator Set W/Lifting Bail    PE4045T517570      LWM001044    1998
GMC Sierra Pickup    2GTEK19R9W1515504      LWM001047    Kubota Generator   
17058OR      LWM001048    Deere Base Engine PE4045DF150    PE4045D467830     
LWM001050    Pipe 22” x .312”W x 23,285.20 L.F.         LWM001053   

2006 GMC Sierra 1500 4WD Ext Cab

#157953

   1GTEK19Z157953      LWM001054    22”x.312x1277.5’ Used Pipe Beveled Ends   
     LWM001056   

2006 GMC Sierra 1500 4WD Ext Cab

Vin#244203

   1GTEK19ZX6Z244203      LWM001057    Service Water Unit         LWM001062   

2006 GMC Sierra 1500 4WD Est Cab Pickup

Vin 4152

   1GTEK19B26Z134152      LWM001063    2006 GMC Sierra 1500 4WD Ext Cab White   
1GTEK19Z266009      LWM001064    2006 GMC Sierra 1500 4WD Ext Cab Grey   
1GTEK19B661133935      LWM001065    Gen Set 300KW    30313408      LWM001067   
Pump System 200 HP VFD 460         LWM001069   

Standalone Survey Controller Software Office

Software Trimble

   TRM39843-30&TRM50559-00   LWM001071    John Deere 644J Wheel Loader   
DW644JX594245      LWM001072    Electric-On-Frame Pump 16”    15672     
LWM001074    Forks    QC600CUF      LWM001078    KJT270FSW Kubota Generator   
1712768R   

 

13

--------------------------------------------------------------------------------

LWM001079    KJT270FSW Kubota Generator    1712768R    LWM001084    John Deere
644H Wheel Loader    DW644HX581727    LWM001085    Service Water Unit    10HT12
LM29923AA FR286    LWM001086    CK60DM-3 Generator Set    PE4045T574312   
LWM001087   

Grove 1982 RT980 80 Ton Rough Terrain

Crain

   49950    LWM001088    Toshiba E Studio 232 Digital Copier       LWM001091   
20” Boom Insert for LS 418 Crane       LWM001092    CBA Containers (4)   
CAXU2552595 CAXU6108547    LWM001093    Generator Set John Deer CK60DM-2   
E4045T574313    LWM001096    Small Flatbed Trailer    0290LX12200601   
LWM001097    Service Water Unit       LWM001100    Field Office Trailer
W/Furniture       LWM001101    COE Office Trailer       LWM001102    Two (2)
Kiewit Barges (135”x35’x7’)       LWM001104    Weeks Discharge Pontoons (45)   
   LWM001105    Fuel Tank       LWM001106    270 foot 20” Rubber Hose 30 Foot
Section       LWM001107    680 Feet 20” Rubber Hose 40 Foot Sections      
LWM001109    Hydrotec Survey Instrument    10970    LWM001110    Flowmeter
600/24”    35SH6H-999FC51A21A    LWM001111    Flowmeter 500/20”   
35SH5H-999FC51A21A    LWM001112    Geramic Model Re-Man Spud Hoist   
34-12-10-11-30/2200    LWM001113    Turbocharger Iowa Dredge    05SJ00226   
LWM001114    1973 Grove Hydraulic Truck Crane TW275LP    22773    LWM001115   
Hyster Forklift H100XL2 with sideshift    G005D14617W    LWM001116    4 CBA
Containers    2353,0496,3815,0873    LWM001117   

Hewlett Packard Laser Jet 5200TN Printer

(Accounting)

      LWM001119    4 Lincoln LN-25 Wire Feeders       LWM001120    American
Model 75 Winch Powered by GM 3-71 Disel Engine      

M/V Davey Crockett Registration #269829

55x18 HP650

   269829    LWM001126    Open Bay Office 20’    AS20MYW0416    LWM001127   

3 Lincoln K1728-5 Welder w/K449LN25 Wire

Feeder

   U1070106983,U1070303758 & 761 LWM001128    Separator       LWM001131    3 CK
Deere Power Engines for Winch Units    263968,625203, 625206    LWM001136   
1964 Allis Chalmers Tractomotive    12453    LWM001137    1956 Allis Chalmers
Tractomotive    1213    LWM001138    Krohne EMF electromagnetic flow      
LWM001139    Berthold Nuclear Detector and Electronics       LWM001142    Iowa
Traveling Spud System       LWM001143    Cat D6H XL Series II Crawler Tractor   
9KJ014456    LWM001144    Cat D6HLGP Crawler Tractor    6FC00577    LWM001147   
155 Dry Manifold Marine Engine CK606BT    PE6068T669446    LWM001148    Deere
Prime Gen Set CKD40M    PE4045D634698    LWM001149    Deere Prime Gen Set
CKMD40M    PE4045D634699    LWM001150    Rebuilt Gear Box    2019-0001C   
LWM001151    Deere Prime Gen Set    PE5030T145893   

 

14

--------------------------------------------------------------------------------

  LWM001152    1999 Cat D6R LGP Crawler Tractor    9PN01180      LWM001153   
Cat D6R LGP Crawler Tractor    9PN00487      LWM001154    Cat D6R LGP Crawler
Tractor    9PN00471      LWM001155    Cleveland Diesel Engine Type 16V278A      
  LWM001156    Kubota Generator SQ3250SW    G11087      LWM001157    Kubota
Generator SQ3250SW    H09058      LWM001158    Lightsource Tower w/Kubota
Generator    6676366979      LWM001159    2007 GMC Sierra Pickup   
2GTEK19J971601228      LWM001160    Caterpillar Model 350L Excavator   
              3ML00924      LWM001161    Rebuilt Philadelphia Gear Unit
Sandpiper Dredge      LWM001162    Repair Engine D6H Dozer   
              06FC00577      LWM001172    Booster Control Station        
LWM001173    Water Canon         LWM001176    2007 Yamaha Motor 150HP 4 Stroke
F150TRL                  63PL1068214      LWM001178    Steel Pipe 20” DR 17 IPS
HDBE 3408 AWWA 5000 L.F.      LWM001179    1999 Link Belt 3400 Q Excavator   
              EZ191637      LWM001180    20” Steel Pipe 2000 L.F.        
LWM001182    20”x.312 Used Steel Pipe 2811.30 L.F.         LWM001183    72”
Bucket EHD 400 Class W/Pins For Cat 345         LWM001184    Cat 3406BDITA
Generator                  02WB00913      LWM001185    Rimble R8 Mosel 2 GNSS
System                  4748K31256,               30874070,08145636,     
LWM001186    2002 Ford F450 Pickup                  1FDXF47F02EA32043  
LWM001187    2 Maine Containers 20’ Grey   

              IMNU 210263-9 IMNU

              210212-0

  LWM001188    1966 Link Belt LS418 100 Ton Crawler Crane   
              4ER171      LWM001189    2 Crane Buckets         LWM001190   
Trolley Hoist W/12 Ft Lift         LWM001191    2000 HP VFD Drive for Booster   
     LWM001192    Hydraulic Clamshell Bucket SMAG Model HZG2000-20     
LWM001194    Rebuilt GE 45KVA Transformer 4160-208/120 Nem 1 Enclosure     
LWM001195    1998 Morooka 2200 Track Dump                  U10394      LWM001197
   1995 Morooka MST2200 Track Dump                  221263      LWM001198   
Morooka MST2200 Crawler Dumper                  22635      LWM001200    2004
Deere 644J Loader                  594143      LWM001201    Hydraulic Clamshell
Bucket w/Dual Rotation         LWM001203    2 DKDM45D Gen Sets   
              PE4045L36865 &               PE4045L036866      LWM001204    Used
Generator                  S/N 7100036-8      LWM001205    Transformers        
LWM001207    Morooka MST2000 Truck                  20854      LWM001209   
Morooka MST3300 s/n 33102                  33102      LWM001212    Gen Set
w/Battery CK125DM-12 125KW 3 Phase Skid Mounted      LWM001214    Cat D6R LGP
Crawler Tractor                  9PN00546      LWM001216    2008 GMC Sierra
Pickup                  1GTEK19098Z313502   LWM001217    2008 GMC Sierra Pickup
                 2GTEK19J281106287   LWM001218    2008 GMC Sierra Pickup   
              2GTEK190781215335   LWM001219    20I” Steel Pipe 2459 L.F., Ball
Joints, Flanges,Beveling Machine      LWM001220    2002 Dodge Ram 1500 Quad
Pickup Truck                  509TX12200801      LWM001221    John Deere 644H   
              551884   

 

15

--------------------------------------------------------------------------------

  LWM001222    Caterpillar320CLw/ Root Ripper                  ANB01855     
LWM001223    20” Steel Pipe 5250 L.F. 17IPS x 50’ Stick         LWM001230    5
Computers Dell 2.406HZ         LWM001231    12” Steel Pipe 2440 L.F.        
LWM001233    Ingersoll Rand Light Source                  394484      LWM001234
   Ingersoll Rand Light Source                  394485      LWM001235    Kubota
Generator                  F1238      LWM001236    Kubota Generator   
              F1240      LWM001237    Kubota Generator                  F1242   
  LWM001238    Caterpillar D6R LGP Crawler Tractor w/winch   
              9PN01527      LWM001239    Caterpillar D6R LGP Crawler Tractor
w/winch                  9PN01420      LWM001240    Caterpillar C6R LGP w/winch
                 09PN00964      LWM001241    Caterpillar C6R LGP w/winch   
              09PN01582      LWM001242    2008 Chevrolet Silverado Pickup Truck
        LWM001243    2008 Kubota RTV-1100 Large All Terrain   
              KU8257      LWM001244    20’ Open Bay Office   
              AS2OUYW0034      LWM001245    16 Cylinder 645E2 Marine EMD Engine
(Used)                  72-A1-1034      LWM001246    2008 Kubota RTV1100 All
Terrain Vehicle                  19872      LWM001247    2001 Caterpillar D6R
LGP Tractor                  9PN01638      LWM001248    2008 Kubota Large All
Terrain Vehicle                  18169      LWM001249    Caterpillar D6R LGP
Tractor                  9PN01046      LWM001253    Transformer 3000KVA Upgrade
Asset#1205                  12470-4160D      LWM001257    Ingersoll Rand
Portable Compressor                  6678108126      LWM001258    Ingersoll Rand
Portable Compressor                  6678108126      LWM001265    Morooka
MST3300 S/N 33301                  33301      LWM001266    Morooka MST 2600
Crawler Track Truck                  26147      LWM001267    20” .312 Used Steel
pipe 1399.8 L.F.         LWM001268    20” x .312 Used Steel Pipe 2806.6 L.F.   
     LWM001269    22” x .375 Used Steel Pipe 2553.10 L.F.         LWM001270   
22”x.375 Used Steel Pipe 5185.10 L.F.         LWM001271    22” x .375 Used Steel
Pipe 3111 L.F.         LWM001272    22” x .375 Used Steel Pipe 3187 L.F.        
LWM001273    22”x.375 Used Steel Pipe 1553.7 L.F.         LWM001274    20” x
.312” Used Steel Pipe 404.9 L.F.         LWM001275    22”x.312 Used Steel Pipe
2594.2 L.F.         LWM001276    12.75”x.5 Steel Pipe         LWM001277   
12.75” x .5 Steel Pipe         LWM001278   
Ingersoll Rand Light Source Kubota Diesel Powered                  368740     
LWM001279    Deere Gen Set CK125DM                  PE4045L065434      LWM001280
   John Deere Gen Set                  PE4045L065465      LWM001281    1998
Caterpillar 330BL Excavator                  6DR02722      LWM001282    2005
Caterpillar 325CL Excavator                  CAT0325CLBMM00696   LWM001283   
2003 Cat325CL Hydraulic Excavator                  CAT0325CEBFF00921   LWM001285
   2005 Link Belt 240LS Hydraulic Excavator                  K4J59949     
LWM001287    16 Cylinder EMD Marine Engine for Jolly Roger   
              62F-73      LWM001289    Trimble Survey Equipment   
              4835157026-4825154956   LWM001291   
Bearing Assembly 9” Cartridge Little Rock Dredge         LWM001292    Cummins
Engine For Morooka                  46891757      LWM001293    Ck45T280-80B
Power Units                  PE4045L073253      LWM001294    Ck45T280-80B Power
Units                  PE4045L0732259   

 

16

--------------------------------------------------------------------------------

    LWM001295    CK45T280-80B                  PE4045L073260        LWM001296   
30’ Barge           LWM001297    2002 Volvo L120E Wheel Loader   
              L120EV64047        LWM001298    20” A54 5/8 Wall Steel Pipe 739
L,.F.           LWM001299    Used American Model 70B double Drum Gasoline
Powered Hoist        LWM001300    Used Terex RT175 Rough Terrain Crane          
LWM001301    1986 Hyster H350B Forklift                  B019D0-1727E       
LWM001302    2004 Cat D6R Series II LGP Crawler Tractor   
              CAT00D6READE00564        LWM001303    2006 Cat D6N LGP Crawler
Tractor                  CAT00D6NKALY02087        LWM001304    2009 Ford F350
White Pickup                  1FDWX37R79EA68741        LWM001305    2009 Ford
F350 White Pickup                  JFDWX37R29EA57999        LWM001306    Pipe
Forks W/96” Tines                  102-0609        LWM001307    John Deere
Engine PE6068TF150                  PE6068T763834        LWM001308    John Deere
Engine PE6068TF150                  PE6068T76835        LWM001309    2001 Dodge
Ram3500 Passenger Van                  2B5WB35Z91K548486        LWM001310   
2009 Sierra 1500 4WD Est Cable SLE Sr.                  1GTEK29049Z163886       
LWM001311    Two Used Caterpillar 3306B Engines, Twin Disc Gears and #36”
Thrusters        LWM001318    2009 Chevrolet Silverado 3500 4wd WTRKCHASSIS   
              1GBJK79629E131305        LWM001319    2009 Chevrolet Silverado P/U
                 1GBJK79669E131002        LWM001321    2009 GMC Sierra K1500 P/U
                 2GTEK290391131519        LWM001322    3 Drum Gas Hoist, 3 Drum
Air Hoist, 2 Drum Electric Hoist, 2 Drum Diesel Hoist   

              H3534, H3975,H3593-

              1,H3396

    LWM001323    2009 Chevrolet Truck Silverado   
              1GCEK29019Z207116        LWM001324    2009 Chevrolet Silverado   
              2GCEK290X91126463        LWM001326    CatD25D 4x4 Articulate Dump
Truck                  1HK00121        LWM001327    Caterpillar D25D 4x4
Articulate Dump Truck                  1HK00118        LWM001328   

Genset Ck15068H285 150KW 120/208V 39H Gen Set

W/ Battery 175 Gal Tank

                 PE6068L066578        LWM001329    Boom LS418 Crane   
              4ER171        LWM001330    2009 Chevy Sierra TK1500 SLE   
              1GTEK29J69Z18019        LWM001331    Fusion Machine          
LWM001332    Knapheide Service Body                  1GBJK79669E131002       
LWM001333    Knapheide Service Body   

              1GBJK79629E1313333330

              5

    LWM001335    24” Steel Pipe .5 CS 163 L.F.           LWM001337    2009 GMC
Sierra 4WD Club Cab                  1GTHK49K29E145601        LWM001339    Two
Twin Disc marine Transmission Type MG-514           LWM001340    Marine Water
Evaporator System                  BV10285e        LWM001341    2007 Used GMC
Sierra Pickup                  1GTHK29087E100620     LWM001346    Internal Radio
5800 Rover Kit and Range Pole                  4913168781        LWM001349   
16” Steel Pipe 135.92 L.F.           LWM001350    Honda BF135ALA Motor   
              BARJ-1300232        LWM001351    Honda BF135AXA   
              BARJ-1301583        LWM001352    Cummins Engine DR26225RX 94N14C
                 60533094        LWM001353    Cummins Engine DR26225RX 94N14C   
              60533110        LWM001354    Cummins Engine DR26225RX 94N14C   
              60533111        LWM001355    Cummins Engine DR26225RX 94N14C   
              60533109        LWM001358    3 Nabrico 40 Ton Hydra Electric Winch
LW Spill Barge        LWM001359    Degasser           LWM001360    Little Rock
Dredge Repairs 2009-2009      

 

17

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  LWM001361    2009 Ford F450 Pickup         LWM001362    2008 ASV ST-50 Scout
                 CFA00349      LWM001363   
HADU 1900 Series Top Input Gear Box Sandpiper                  HDU 1900     
LWM001364    Cat 3406CDITA 500 HP                  03ER06330      LWM001372   
2003 DSC 3508 Floating (Barge)Booster Pump Station      LWM001373    2003 DSC
3508 Land Booster Pump Station         LWM001374    Lufkin Gear Box w/Heat
Exchanger         LWM001375    6 MAFCO 40’x10’x5’ Barges         LWM001376   
Pullmaster Hydraulic Winch                  094986      LWM001377    Pullmater
Hydraulic Winch         LWM001381    20” Steel Pipe 3826 L.F.         LWM001382
   Pullmaster Hydraulic Winch                  092714      LWM001383   
Pullmaster Hydraulic Winch                  093836      LWM001384    2010 GMC
Sierra                  1GTSKVE37AZ157198   LWM001386    Trimble GPS System   
              K7696      LWM001387    Booster Stations      

L.W. Matteson, Inc. Transferred Trucks and Trailers

 

Year   Make   Color   Model   VIN # 1982   Chevy   Gray/Red   K20  
1GCGK24J4CJ127789 1983   Chevy   Red   C-30 1-Ton   1GCHC34J8DJ149139 1984  
Chevy   White   K30   1GBHK3WXEV117449 1989   GMC   Red   Sierra C1500  
2GTDC14Z1K1545784 1990   Chevy   Red/Black   K3500 1-Ton   2GCGK39N1L1198167
1991   Chevy   Wht/Silv   K3500   1GCHK34N8ME158387 1994   Chevy   White   K3500
  1GBHK34N8RE194219 1995   Chevy   White   K3500   1GBJK34F1SE250047 1995   GMC
  White   Sierra K2500   1GTGK29N6SE501323 1999   GMC   White   Sierra K2500  
1GTGK29U5XE527541 1999   Chevy   Gray   K2500 Silverado   1GCGK29U1XE221193 1999
  Ford   White   F350   1FDWX37F4XEE02940 2000   Ford   White   F350 Super Duty
  1FDWX37FXYED89760 2000   Ford   White   F250 Super Duty   1FTNX21S6YEA03223
2000   Ford   White   F350 Super Duty   1FDWX37F8YED03555 2001   Dodge   Wht/Grn
  Ram 3500 Van   2B5WB35Z91K548486 2002   Ford   Black   F450  
1FDXF47F02EA32043 2002   Dodge   Grey   Ram 1500 Q-Cab   3D7HU18252G150710 2003
  GMC   White   Sierra K2500 HD   1GTHK29U93E185574 2003   Ford   White   F350
Super Duty   1FDWX37P13EC42454 2003   GMC   White   Sierra K1500  
2GTEK19T631371157 2003   GMC   Pewter   Sierra K2500 HD   1GTHK29U63E368091

 

18

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2004   GMC   White   Sierra 1500   2GTEK19T241117625 2004   Chevy   White  
Silverado   1GCEK19T54E344158 2004   GMC   Silver   Envoy SLE  
1GKDT13SX42225178 2005   GMC   White   Sierra K1500   1GTEK19B75E344235 2005  
Chevy   White   Silverado K2500   1GCHK29UX5E249205 2005   GMC   White   Sierra
K1500   1GTEK19B55E151596 2006   GMC   Grey   Sierra K1500   1GTEK19Z36Z266009
2006   GMC   White   Sierra K1500   1GTEK19B26Z134152 2006   GMC   White  
Sierra K1500   1GTEK19Z36Z266009 2006   GMC   White   Sierra K1500  
1GTEK19ZX6Z244203 2007   GMC   White   Sierra K1500   2GTEK19J971601228 2007  
GMC   White   Sierra K1500   1GTHK29U87E100620 2008   Chevy   White   Silverado
K2500   1GCHK29K48E180174 2008   GMC   White   Sierra K1500   1GTEK19098Z313502
2008   GMC   White   Sierra K1500   2GTEK19J281106287 2008   GMC   White  
Sierra K1500   2GTEK190781215335 2009   GMC   Silver   Sierra K1500  
1GTEK29049Z163886 2009   Ford   White   F350   1FDWX37R79EA68741 2009   Chevy  
White   Silverado 3500   1GBJK79669E131002 2009   Chevy   White   Silverado 3500
  1GBJK79629E131305 2009   GMC   White   Sierra K1500   2GTEK290391131519 2009  
Chevy   White   Silverado 1500   1GCEK29019Z207116 2009   Chevy   White  
Silverado 1500   2GCEK290X91126463 2009   GMC   White   Sierra K1500  
1GTEK29J69Z180195 2009   GMC   White   Sierra K1500   1GTHK49K29E145601 1974  
SPC   Black   Trailer   IA 19004 1975   SPC   Black   Trailer   18579 1984   SPC
  Black   Boat Trailer   NONE 1992   Wesco   N/A   Trailer   1W71611T0N1000417
1995   Kann   Black   Boat Trailer   1K9BM2022SK009937 1998   Turbo   Grn.White
  Office Trailer   43030698 1998   Oquawka   Gray   Boat Trailer  
1Z9BB1622WA056022 2002   Special   Silver   Regular Trailer   NONE 2004   T-Man
  Silver   20’ Car Trailer   5L3CX20224L001688 2007   Clark   Black   Boat
Trailer   1C9BB22297B766511 2008   Oquawka   Silver   Flatbed Trailer  
1Z9AF20248A056191

 

19

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Section 4.8

Condition of Assets

 

  L.W Matteson, Inc.         Fixed Asset Listing - Non Marine     For the Period
1/28/81 to 12/31/10                  

Asset ID

 

  

Description

 

  

Serial Number

 

  

Seller’s Comments

 

  

Repair Cost Estimate

 

  LWM000247    Crane - Linkbelt 418 - 1967    4ER210    Change out swing brakes,
needs new injectors    $4,000±   LWM000300    12”BOOSTER DETROIT-T       Not
used; needs work    For parts only   LWM001087    1982 Grove RT980 Crane   
49950    Needs body work    $6,000 - $8,000   LWM001104   

Weeks Discharge Pontoons

(45)

      Needs bottom skin    $60,000±   LWM001115    Hyster Fork Truck       Needs
fuel system work    $2,000 - $3,000   LWM001188    1966 Link Belt LS418 100 Ton
Crawler Crane    4ER171    Needs transmission work    $8,000 - $12,000  
LWM001198    Morooka MST 2200 Crawler Dumper    22635    Needs drive train work
   $3,000 - $6,000   LWM001209    Morooka MST 3300    33102    Needs drive train
work    $3,000 - $6,000   LWM001265    Morooka MST 3300    33301    Needs drive
train work    $3,000 - $6,000   LWM001266   

Morooka MST 2600 Crawler

Track Truck

   26147    Needs engine work (have engine)    $1,000 - $3,000   LWM0001301   
1986 Hyster Fork Truck       Needs engine work (have replacement engine)     
LWM001322   

American Model 120B Double Drum Winch System (anchor

winch system)

   H3396    Needs drum re-attached and bearing work    $3,000 - $6,000  
LWM001326    Caterpillar D25 4 x 4 Articulate Dump Truck    1HK00121    May need
tires and transmission work    $3,000 - $6,000   LWM001327    Caterpillar D25 4
x 4 Articulate Dump Truck    1HK00118    May need tires and transmission work   
$2,000 - $3,000

Note:      Some company pickup trucks may need brakes and transmission work.

 

20

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Section 4.9(a)

Facilities

 

1. L.W. Matteson, Inc. Corporate Office

#1 South Point

Burlington, IA 52601

 

2. L.W. Matteson, Inc. Maintenance Yard (North Bottoms, Des Moines County, IL)

2815 – 91st Avenue

Burlington, IA 52601

 

3. L.W. Matteson, Inc. Maintenance Yard

6501 Fourche Dam Pike

Little Rock, AR 72206

 

4. L.W. Matteson, Inc. Storage Building

1230 S. Main Street

Burlington, IA 52601

 

5. L.W. Matteson, Inc. Rock Island County, IL Yard

Drury Township – Parcel No. 455-1

PIN No. 19-02-400-001

12.3 acres

 

21

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 Section 4.9(b)

     

Owned Real Property

  

 

1. L.W. Matteson, Inc. Corporate Office

#1 South Point

Burlington, IA 52601

 

2. L.W. Matteson, Inc. Maintenance Yard (North Bottoms, Des Moines, County, IL)

2815 – 91st Avenue

Burlington, IA 52601

 

3. L.W. Matteson, Inc. Storage Building

1230 S. Main Street

Burlington, IA 52601

 

4. L.W. Matteson, Inc. Rock Island County, IL Yard

Drury Township – Parcel No. 455-1

PIN No. 19-02-400-001

12.3 acres

 

Note:

Shareholders have various personal items stored on L.W. Matteson’s property i.e.
boats, motorcycles, motorcycle parts, and miscellaneous collectibles. Matteson
Marine Service has boats, propellers, shafts, rudders, engines, generators,
pumps, packing, and boat-related supplies stored onsite.

 

22

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Section 4.9(c)

Leasehold Interests

Property:

Maintenance Yard

6501 Fourche Dam Pike

Little Rock, AR 72206

Lessee:

L.W. Matteson, Inc.

Lessor:

WB Isgrig & Sons, Inc.

1615 N. Palm

Little Rock, AR 72206

 

(i)    None (ii)    None (iii)    None (iv)    None (v)    None (vi)    None

 

23

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Section 4.10(a)

Vessels and Marine Assets

 

 

L.W Matteson, Inc.

    

Fixed Asset Listing - Marine

    

For the Period 1/28/81 to 12/31/10

                           

Asset ID

   Description    Serial Number           Farmboy        

LWM000028

   BOAT-MELISSA K        

LWM000058

   MELISSA K REPAIRS        

LWM000095

   BARGE-CORPS OF ENG        

LWM000146

   DREDGE-SANDPIPER        

LWM000172

   FUEL BARGE WATERBOY        

LWM000202

   DREDGE-IOWA        

LWM000220

   DREDGE- LW        

LWM000231

   BULLFROG        

LWM000242

   87 ALWELD JON BOAT        

LWM000243

   MARSH BUGGY - H-5        

LWM000253

   BARGE, Pat Bark        

LWM000254

   BARGE, Pat Bark        

LWM000266

   MARSH BUGGY        

LWM000314

   TOWBOAT “COLEE I”        

LWM000325

   Barge 40x12x5        

LWM000326

   Barge 40x12x5        

LWM000327

   Barge 40x12x5        

LWM000328

   Barge 40x12x5        

LWM000419

   Plowboy    5002     

LWM000484

   16’ JON BOAT OQUAWKA        

LWM000501

   DCK BARGE 37x175x8.5        

LWM000502

   DCK BARGE 37x175x8.5        

LWM000503

   DCK BARGE 37x175x8.5        

LWM000564

   95 OQUAWKA JON BOAT    OQBZ32I2F595     

LWM000565

   95 OQUAWKA JON BOAT    OQBZ32I3F595     

LWM000566

   95 OQUAWKA JON BOAT    OQBZ32I4F595     

LWM000567

   95 OQUAWKA JON BOAT    OQBZ32I5F595   

 

24

--------------------------------------------------------------------------------

 

LWM000752

   ‘99 Oquawka Jon Boat        

LWM000753

   ‘99 Oquawka Jon Boat        

LWM000774

   Dredge-LP Dredge        

LWM000775

   Barge, UniV #10404-3        

LWM000776

   Barge, UniV #10404-4        

LWM000777

   Barge,UniV #10404-6        

LWM000778

   Barge, UniV #10404-7        

LWM000779

   Barge,UniV #10404-10        

LWM000780

   Barge,UniV #10404-13        

LWM000781

   Spudwell, 22” #SW6        

LWM000782

   Spudwell, 22” #SW7        

LWM000783

   Spud 20’x22” #S1        

LWM000784

   Spud 20’x22” #S2        

LWM000851

   Boat-Oquawka 1660LD        

LWM000852

   Boat-Oquawka 1660LD        

LWM000853

   Boat-Oquawka 1660LD        

LWM000861

   Barge, Univessel        

LWM000877

   Refurbish-LW Dredge        

LWM000882

   Barge, Univ 10x40x4        

LWM000883

   Barge, Univ 10x40x4        

LWM000884

   Barge, Univ 10x40x4        

LWM000885

   Barge, Univ 10x40x4        

LWM000886

   Barge, Univ 10x40x4        

LWM000887

   Barge, Univ 10x40x4        

LWM000888

   Barge, Univ 10x40x4        

LWM000889

   Barge, Univ 10x40x4        

LWM000890

   Barge, Univ 10x40x4        

LWM000891

   Barge, Univ 10x40x4        

LWM000892

   Barge, Univ 10x20x4        

LWM000893

   Barge, Univ 10x20x4        

LWM000894

   Spudwell, Univ -Used        

LWM000895

   Barge, Porta 10x40x5        

LWM000896

   Barge, Porta 10x40x5        

LWM000900

   Dredge, Chris L        

LWM000911

   Barge 20x10x4 Raked Univessel    M-10204R-03     

LWM000912

   Barge, 20x10x4 Raked Univessel    M-10204R-04   

 

25

--------------------------------------------------------------------------------

 

LWM000930

   Sandpiper Side-tanks deepened        

LWM000940

   Traveling Spud for Sandpiper        

LWM001001

   Boat - Oquawka    OQB Z32B3 K405     

LWM001002

   Boat - Oquawka    OQB Z32B4 K405     

LWM001003

   Boat - Oquawka    OQB Z32B5 K405     

LWM001017

   Boat - Choreboy    IBW247     

LWM001029

   Lake Lady Improvements        

LWM001073

   Barge & Sliding Spud        

LWM001094

   Oquawka Boat Model 1660 Flat Bottom Flat Bow        

LWM001103

   Flat Deck Barge (70’x27’x6’)        

LWM001121

   Barge 12’x24’x3’        

LWM001125

   Dredge Jolly Roger and Auxiliary Dredging Equipment        

LWM001125

   Louis I 60x20 760 HP    269771     

LWM001125

   Captain Zed 54x19 HP650    514106     

LWM001129

   Walking Spud Barge: 4 Unit        

LWM001132

   Starter Traveling Spud        

LWM001134

   Clark Boat Company 22’ Vee Bow Boat 2 90 HP Mercury Motors     

LWM001163

   Poseidon 10’x40’x5’ Sectional Barge    P101Q     

LWM001164

   Poseidon 10’x40’x5’ Sectional Barge    P103Q     

LWM001165

   Poseidon 10”x40’x5’ Sectional Barges    P1040     

LWM001166

   Poseidon 10’x40’x5’ Sectional Barges    P105Q     

LWM001167

   Poseidon 10’x40’x5’ Sectional Barge    P107Q     

LWM001168

   Poseidon 10’x40’x5’ Sectional Barges    P109Q     

LWM001169

   2 Poseidon ISpud Pockets    PA262 PA229     

LWM001170

   Poseidon Used Spud    SP262 SP229     

LWM001171

   44 Poseidon Hairpin Connectors        

LWM001179

   1999 Link Belt 3400 Q Excavator    EZ191637     

LWM001193

   3 10’x40’x5’ Barges, 20 Hairpins, 2 Spud Pockets, 2 20’ Spuds     

LWM001196

   7 10’x40’x5’ Barges/Pins, Spudwells    P-114-M P-110F P-107F     

LWM001210

   Inshore Aluminum 1994 Crew Boat        

LWM001215

   Widgeon 1970 Crew Boat Anne Elizabeth    NYZP7875D303     

LWM001224

   Betty Sue Steel Boat Twin 855’s Length 49.5’        

LWM001225

   1988 Spill Barge 26’x70’x5’        

LWM001226

   Anchor Barge 26’x40’x4’ 3 Drum Winch        

LWM001227

   Deck Barge 20’x50’x4’        

LWM001228

   0987 Fuel Barge w/8000 Gal. Tank 26’x50’x4’      

 

26

--------------------------------------------------------------------------------

 

LWM001229

   Little Rock Dredge        

LWM001232

   4 Oquawka Boat Model 1660 Flat Bottom Flat Bow        

LWM001250

   1985 40 Foot Aluminum Landing Craft Work Boat    WNZ2361CJ585     

LWM001251

   Oquawka Model 2096FB Flat Bed Tandem Axle Trailer    1Z9AF20248A056191     

LWM001254

   Oquawka Boat Model 1660 Flat Bottom Flat Bow    OQBZ32I9J809     

LWM001255

   Oquawka Boat Model 1660 Flat Bottom Flat Bow    OQBZ3210K809     

LWM001290

   M/V” Decatur” Work Boat 38.5’x12.5’x4.4’ w.2/671 GMC HP        

LWM001342

   (1) Flat Barge 20’Lx91’Wx24”H (1) Flat Barge (1) Flat Barge 20’Lx111”Wx24”H
    

LWM001344

   Steel Inland Push Boat 25”9”x16’0”x5’6” Hull Number IBW321        

LWM001345

   Hull#134 350 HP Truckable Boat        

LWM001347

   Survey Boat        

LWM001365

   Dredge Ladder/Gearbox        

LWM001366

   Fort Smith Twin Screw Tow Boat    10673027 10673028     

LWM001367

   Monark 22’ Boat, Aluminum Hull, Trailer    DUR8943274     

LWM001368

   2003 DSC 16” Shark Hydraulic Cutter Head Dredge        

LWM001369

   2003 DSC Traveling Spud Carriage        

LWM001370

   1993 Anchor Boat W/A-Frame Hoist        

LWM001371

   2003 Onsite Marine 3000 Gallon Fuel Barge w/ hydraulic controls     

LWM001375

   6 MAFCO 40’x10’x5’ Barges        

LWM001378

   Work Barge 20’Lx91”Wx24”H        

LWM001379

   Working Barge 20’Lx91”Wx24”H        

LWM001380

   Working Barge 20”Lx91”Wx24”H        

LWM001385

   Davey Crockett 55x18 HP650    269829     

Lawrence

   Barge 110’x50’x7’    LWM160-Harry White     

Lawrence

   Barge 100’x40’x6.5’    BR102     

Lawrence

   Barge 120’x32’x8’    BR103     

Lawrence

   Barge 100’x45’x6.5’    PC1128     

Lawrence

   Barge 80’x45’x6.5’    PC529     

Lawrence

   Barge 100’x45’x7’    LWM104   

 

27

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Registered Vessels

 

 

L.W Matteson, Inc.

 

Marine Assets - USCG Documented

 

For the Period 1/28/81 to 12/31/10

           

Asset ID

  

Description

 

   Registration Number          Farmboy    1224790  

LWM000028

   BOAT-MELISSA K    255365  

LWM000231

   Bullfrog    240269  

LWM000314

   TOWBOAT “M/V COLEE I”    277527  

LWM000419

   Plowboy    1225873  

LWM001017

   Boat – Choreboy    1170704  

LWM001125

   Louis I 60x20 760 HP    269771  

LWM001125

   Captain Zed 54x19 HP650    514106  

LWM001215

   Widgeon 1970 Crew Boat (M/V Anne Elizabeth)    1216169  

LWM001224

   Betty Sue Steel BoatTwin 855’s Length 49.5’    290154  

LWM001229

   Little Rock Dredge    531592  

LWM001290

   M/V” Decatur” Work Boat 38.5’x12.5’x4.4’ w.2/671 GMC HP    574110  

LWM001344

   Steel Inland Push Boat 25”9”x16’0”x5’6” Hull Number IBW321 (M/V White River)
   1225351  

LWM001345

   Hull#134 350 HP Truckable Boat (M/V Uniserve)    1225870  

LWM001366

   Fort Smith Twin Screw Tow Boat *    598562  

LWM001385

   Davey Crockett 55x18 HP650    269829  

Lawrence

   Sheely barge #103    267617  

Lawrence

   Sheely barge #106    267620  

Lawrence

   Sheely barge #109    267623      LM-145 Barge    680868      M/V Henry J II
   257117      M/V John B    280019      Workboat #1    1047004

 

* Documentation of this vessel previously listed in the name of Arkansas Valley
Dredging Company expired November 30, 2008. We are in the process of getting it
documented under L.W. Matteson, Inc.

 

28

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Section 4.10(b)

Chartered Vessels

 

1. Hopper Barge – 200’ x 35’ x 12’                    $180.00 / day

Owner:

Serodino, Inc.

P.O. Box 4539

Chattanooga, TN 37405-0539

Charterer:

L.W. Matteson, Inc.

Barge Charter Party dated February 10, 2010 between Serodino, Inc. and L.W.
Matteson, Inc.

 

29

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Section 4.10(c)

Deficiencies with Regard to Marine Assets and Chartered Vessels

 

  

L.W Matteson, Inc. -Fixed Asset Listing – Marine

For the Period 1/28/81 to 12/31/10

        Asset ID    Description    Seller’s Comments    Repair Cost Estimate   
LWM000095    BARGE-CORPS OF ENG    May need repair    $5,000 - $10,000   
LWM00172    FUEL BARGE WATERBOY    Single hull will need double hull    $90,000
- $120,000    LWM000146    DREDGE-SANDPIPER    Some side tank work   

$30,000 – $50,000 (repair)

$115,000 (replace)

   LWM000202    DREDGE-IOWA    Repairs already discussed    $68,000 - $80,000   
LWM000231    BULLFROG    Needs generators, plumbing work & toilets, and prop &
shaft work    $65,000 – $70,000    LWM000314    TOWBOAT “M/V COLEE I”    Thin
skin, needs new generator, change cutlass bearings    $11,000 - $15,000      
Crane Barge w/ Deck-Mounted Grove Crane 24’x45’x3’    Needs bottom skin   
$25,000 - $40,000    LWM000501    DCK BARGE 37x175x8.5    Knuckles    $30,000 -
$45,000    LWM000502    DCK BARGE 37x175x8.5    Knuckles    $30,000 - $45,000   
LWM000503    DCK BARGE 37x175x8.5    Knuckles    $30,000 - $45,000    LWM000774
   Dredge-LP Dredge    Two (2) extension barges have stress cracks    $4,000 -
$6,000    LWM000900    Dredge, Chris L    Planning on replacing pump and
overhauling engine    $40,000 - $60,000    LWM001029    Lake Lady Improvements *
   Needs major refurbishing; engine, gear, pump, ladder (have parts)      
LWM001125   

Dredge Jolly Roger and Auxiliary

Dredging Equipment

   Engine replacement (have engine)    $20,000 - $40,000    LWM001125    Louis I
60x20 760 HP    New engines (in stock), fan tail leaks    $20,000 - $30,000   
LWM001125    Captain Zed 54x19 HP650    New engines (in stock)    $20,000 -
$30,000    LWM001210    Inshore Aluminum 1994 Crew Boat    May need outboard
engine       LWM001215    Widgeon 1970 Crew Boat Anne Elizabeth    New engine   
$6,000 - $8,000    LWM001224    Betty Sue Steel Boat Twin 855’s Length 49.5’   
Needs gear box ratio changes (have parts)    $6,000 - $8,000    LWM001229   
Little Rock Dredge    Needs hull (have plate)    $150,000 - $190,000   
LWM001290    M/V” Decatur” Work Boat 38.5’x12.5’x4.4’ w.2/671 GMC HP   
Replacing engines and some hull work (have engines)    $3,000 - $8,000   
LWM001385    Davey Crockett 55 x 18 HP650 *    Salvaged; no engines or
transmissions, super structure damage       Lawrence    Barge 80’x45’x6.5’ PC529
*    Needs new bottom (we have the steel)   

 

* THIS EQUIPMENT IS ON LAND AND IS NOT BEING SOLD AS TO BE IN USABLE CONDITION

 

Note: Several small barges on land in Burlington, IA and Little Rock, AR are in
need of repair and are not being sold as usable equipment.

 

30

--------------------------------------------------------------------------------

Section 4.10(d)

Exceptions to U.S. Documentation with Coastwise Trade Endorsements

Clauses (ii) and (iii)

 

1.

M/V Willow Bill – No U.S. Coast Guard certification

 

2.

M/V Fort Smith – No U.S. Coast Guard certification *

 

Note:

No Vessels eligible on any coastwise trade endorsements.

 

*

Documentation of this vessel previously listed in the name of Arkansas Valley
Dredging Company expired November 30, 2008. We are in the process of getting it
documented under L.W. Matteson, Inc.

 

31

--------------------------------------------------------------------------------

Section 4.10(g)

Pending Maritime Claims

See Section 4.11 of the Disclosure Schedule

 

32

--------------------------------------------------------------------------------

Section 4.10(h)

List of Vessels Under Construction

None

 

33

--------------------------------------------------------------------------------

Section 4.10(i)

List of Marine Personnel

 

1.

J.T. White – Licensed Pilot - Operator of uninspected towing vessel Western
Rivers

License No. 2015426

 

2.

James Trachta – Coast Guard Tankerman

License No. 191205

 

Note:

Currently only the two individuals listed are employed. Additional personnel
hired on as-needed basis; “at will” employee

 

34

--------------------------------------------------------------------------------

Section 4.10(j)

List of Actual or Alleged Violations

See Section 4.11(c) of the Disclosure Schedule

 

35

--------------------------------------------------------------------------------

Section 4.11

Litigation and Compliance with Laws

 

1.

  

Case Number:

  

0-09-14271CV

  

Description of Claim:

  

Employee Litigation/Personal Injury Claim/Jones Act Claim

  

District Court:

  

Brooks County, TX / 79th Judicial District

  

Claimant:

  

Alfonso Rivera

2.

  

Case Number:

  

LALA005656

  

Description of Claim:

  

On 1/19/2010, Mr. Todd R. Pardall, a Matteson Marine Service employee was
driving an L.W. Matteson, Inc. truck and struck a van broadside, killing the
driver, Mr. Bernard Boyle.

  

District Court:

  

Iowa District Court / Lee County, IA

  

Defendants:

  

L.W. Matteson, Inc. / Todd Pardall / Allied Insurance / National Mutual
Insurance

  

Plaintiffs:

  

Deanna Boyle (administrator of the estate of Bernard A. Boyle, deceased), Andrew
Boyle, and Danielle Boyle

3.

  

District Court:

  

New York State District Court

  

Defendants:

  

Sevenson Environmental / TN Valley Authority

  

Plaintiff:

  

L.W. Matteson, Inc.

 

36

--------------------------------------------------------------------------------

Section 4.11(c)

Coast Guard Violations

June 23, 2008

On June 23, 2008, L.W. Matteson, Inc. were notified by the South Dakota
Department of Environment and Natural Resources that there was a sheen
surrounding the LW dredge moored in Charlie’s cove at the Lewis and Clark
jobsite. An investigation found that a 5 gallon diesel can had been tipped over
and a small amount of diesel fuel had entered the water.

Outcome:  All deficiencies were rectified to the satisfaction of the
Environmental Protection Agency (“EPA”). L.W. Matteson, Inc. was fined a total
of $500, which was wired to the appropriate department at the U.S. EPA to settle
the fine for the fuel spill.

March 5, 2010

On March 5, 2010, L.W. Matteson, Inc. received a “Notice of Violation” relating
to the actual violation date of December 24, 2009.

Outcome:    The documentation received on March 5, 2010 was determined to be a
warning. No fines were paid in connection with this incident.

March 17, 2010

On March 17, 2010, L.W. Matteson, Inc. received a “Violation Notification
Letter” along with documentation relating to the actual violation date of
October 7, 2009.

Outcome:    All deficiencies were rectified to the satisfaction of the U.S.
Coast Guard. L.W. Matteson, Inc. was fined a total of $11,650.00, which was
wired to the appropriate department of the U.S. Coast Guard, and the restriction
order placed on the UTV Louis I was cancelled.

April 13, 2010

On April 13, 2010, L.W. Matteson, Inc. received a “Violation Notification
Letter” along with documentation relating to the actual violation date of
February 10, 2010.

Outcome: The deficiency was rectified to the satisfaction of the U.S. Coast
Guard. L.W. Matteson, Inc., was fined a total of $5,000, which was paid in full
by check # 158839 dated April 22, 2010, to the U.S. Coast Guard.

 

37

--------------------------------------------------------------------------------

Section 4.12

Intellectual Property

 

1.

WINOPS – Dredge positioning software (Great Lakes does not use)

 

2.

HYPACK – Surveying software (Great Lakes already has support contract)

 

3.

Timberline Accounting – (Great Lakes does not use)

 

4.

Primavera – Scheduling software

 

5.

AutoCad – 3-D design software

Domain Names

 

Domain Name

  

Registrar

LWMATTESON.COM

  

TUCOWS, INC.

LWMATTESONINC.COM

  

TUCOWS, INC.

 

38

--------------------------------------------------------------------------------

Section 4.13

Contracts

 

Service Contracts    Annual Payment

1.    WINOPS

   $  1,400.00

2.    HYPACK

   $  2,500.00

3.    Timberline Accounting

   $2,956.10

4.    ABRA HR / Payroll

   $1,452.30

6.    Bureau of National Affairs

   $1,161.76 Apartment Rental    Monthly Payment

Longacre Ponds

   $1,875.00

Residential Lease Agreement dated February 17, 2010 between Longacre Ponds
Apartments and L.W. Matteson, Inc.

Service Agreement

Commercial Service Agreement dated October 9, 2010 between Waste Management and
L.W. Matteson, Inc.

Charter Agreement

Barge Charter Party dated February 10, 2010 between Serodino, Inc. and L.W.
Matteson, Inc.

Union Contracts

Collective Bargaining Agreement dated August 11, 1989 between Local 150
International Union of Operating Engineers and L.W. Matteson, Inc.

Collective Bargaining Agreement dated December 9, 1998 between International
Union of Operating Engineers Local No. 649

Collective Bargaining Agreement dated December 2, 2010 between Laborers Local
No. 397 and L.W. Matteson, Inc.

Collective Bargaining Agreement dated December 4, 2009 between Laborers Local
No. 459 and L.W. Matteson, Inc.

Collective Bargaining Agreement dated November 4, 2008 between Local 513
International Union of Operating Engineers

Collective Bargaining Agreement dated February 6, 2009 between International
Union of Operating Engineers Local 520

Holcim Contract

Proposal for additional dredging work for Holcim (US), Inc. relating to
Agreement No. 0001-05 dated July 12, 2010 between Holcim (US), Inc. and L.W.
Matteson, Inc.

 

39

--------------------------------------------------------------------------------

        Open Government Contracts and Subcontracts

 

1)   Title of Contract:    McClellan-Kerr Station Dredging   Date of Award:   
July 30, 2010   Contract Number:    W9127S-10-D-0019   Parties Involved:   
USACE, Little Rock / L.W. Matteson, Inc. (LWM) 2)   Title of Contract:    Chain
of Rocks South Seepage Berms   Date of Award:    August 25, 2010  
Contract Number:    W912P9-10-D-0529   Parties Involved:    USACE, St. Louis /
A&H Contractors / LWM (sub for A&H Contractors) 3)   Title of Contract:    Iowa
River - Flint Creek Levee District #16   Date of Award:    September 27, 2010  
Contract Number:    09-2916.101/00936-16   Parties Involved:    Flint Creek
Levee District #16 / Klingner & Associates / LWM 4)   Title of Contract:    Lake
Decatur Dredging   Date of Award:    March 31, 2010   Contract Number:    W09-16
  Parties Involved:    City of Decatur, IL / Homer L. Chastain / LWM 5)   Title
of Contract:    Pond A Bridgeway Acres Landfill   Date of Award:    December 15,
2010   Contract Number:    101-0048-CP(RM)   Parties Involved:    Pinellas
County, FL Utilities / LWM 6)   Title of Contract:    Lease of Cutterhead,
Hydraulic, Pipeline Dredge (NLT 22-Inch Diameter) Fully Operated with Attendant
Plant and Personnel, with a Draft NTE 11 Feet, for Construction and Maintenance
Dredging within the Vicksburg and adjacent Districts   Date of Award:    March
31, 2010   Contract Number:    W912EE-10-C-0011   Parties Involved:    USACE,
Vicksburg / LWM 7)   Title of Contract:    Chain of Rocks, Berm #6   Date of
Award:    June 12, 2009   Contract Number:    W912P9-07-D-0513   Parties
Involved:    USACE, St. Louis / A&H Contractors / LWM (sub for A&H Contractors)
8)   Title of Contract:    Kaskaskia Dredging 2009 (pending modification)   Date
of Award:    July 20, 2009   Contract Number:    W912P9-09-C-0415   Parties
Involved:    USACE, St. Louis / A&H Contractors / LWM (sub for A&H Contractors)

 

40

--------------------------------------------------------------------------------

 

9)   Title of Contract:    Henderson County Drainage District No. 1 Levee
Repairs   Date of Award:    August 28, 2009   Contract Number:   
W912EK-09-C-0094   Parties Involved:    USACE, Rock Island District / LWM 10)  
Title of Contract:    Louisa County Drainage District No. 11 Levee Repairs  
Date of Award:    September 24, 2009   Contract Number:    W912EK-09-C-0106  
Parties Involved:    USACE, Rock Island District / LWM

 

41

--------------------------------------------------------------------------------

Section 4.14(f)

Financial Statements; Backlog

Estimated Work in process schedule through December 31, 2010

 

             Remaining           Based on FIELD COST            Revenue     
Costs      Margin     Billings  

              Total project life

              

Decatur Lake

         9,650,000         4,705,560         4,944,440        9,713,250   

Chain of Rocks Berm #6, 2007

         49,600         200,000         (150,400 )      55,658   

Chain of Rocks South Berm 2010

         3,371,796         1,837,848         1,533,948        3,336,796   

McClellan Kerr 2010 - Base year

         2,362,960         1,000,000         1,362,960        2,312,960   

Ouachita River- Option year

         4,831,265         2,300,000         2,531,265        4,831,265   

Pond A, Pinellas Co. FL

         3,962,926         2,307,007         1,655,919        3,962,926   

Flint Creek

         598,900         550,000         48,900        441,000                  
                                       24,827,447         12,900,415        
11,927,032        24,653,855   

                  Not Awarded

              

Kaskaskia River

         2,254,602         1,131,697         1,122,905        2,254,602   

McClellan Kerr 2010 -Option year

         3,924,440         1,700,000         2,224,440        3,924,440   

Holcim- dredge rental *

              

* Request for Proposal was issued. We supplied a cost for dredge rental. Have
yet to hear back.

 

42

--------------------------------------------------------------------------------

Section 4.14(g)

Financial Statements; Non-Recurring Contracts

 

1. Chain of Rocks, Berm #6 – Sub to A&H Contractors 8A Program

 

2. Chain of Rocks, South Seepage Berms – Sub to A&H Contractors 8A Program

 

3. Kaskaskia River – Sub to A&H Contractors 8A Program (pending modification)

 

4. McClellan-Kerr Station Dredging – Small Business Set-A-Side $33.5 Million*

 

5. Ouachita River – Partially funded by ARRA ($1,864,691.05)

 

6. Henderson County Levee Repair Contract with U.S. Army Corps of Engineers –
Total HubZone Set Aside, Size Standard $33.5 Million **

* Met requirements of Small Business Set Aside at time of letting

** Met requirements of HubZone Small Business Set Aside at time of letting

 

Note: L.W. Matteson, Inc. no longer qualifies as a Small Business under the
Dredging or Excavation and Grading codes or as a HubZone Set Aside.

 

43

--------------------------------------------------------------------------------

Section 4.14(h)

Financial Statements; Capital Expenditures

 

Equipment    Repair Cost Estimate

1.    Dredge Iowa – hull repairs (necessary)

   $68,000 – $75,000

2.    Idler Barge – hull repairs (necessary)

   $75,000 – $85,000

3.    Crane Barge – spud wells repair (necessary)

   $  8,000 – $13,000

4.    Dredge Iowa – 24” upgrade (optional)

   $50,000 – $60,000

 

44

--------------------------------------------------------------------------------

Section 4.14(i)

Financial Statements; Indebtedness

None

 

45

--------------------------------------------------------------------------------

Section 4.15

Changes Since the Interim Balance Sheet Date

Machinery and Equipment was increased by $1,069,688.00 for Capitalization of two
Booster Pumps and improvements to LW Dredge. A portion of this amount was from
Construction in Progress.

Bonuses of $430,335 were paid to employees on December 20, 2010.

 

46

--------------------------------------------------------------------------------

Section 4.16

Insurance

L.W. MATTESON, INC.

2010 – 2011

 

BUSINESS AUTO

Allstate Insurance Company

Policy #: 048747009BAP

11/1/10 to 11/1/11

 

INLAND MARINE EQUIPMENT

Fireman’s Fund Ins. Co.

Policy #: MZI97707726*

11/4/09 to 11/4/10*

* Old Policy still in place – new paper policy has not been issued yet.

 

MARINE GENERAL LIABILITY

Continental Insurance Company – MOAC

Policy #: ML0872774

6/30/10 to 6/30/11

 

HULL and P & I

Continental Insurance Company – MOAC

Policy #: H0864101

6/30/10 to 6/30/11

 

WORKER’S COMPENSATION

Commerce and Industry Insurance Company

Policy #: WC ###-##-####

6/14/10 to 6/14/11

 

MARINE EXCESS LIABILITY

AGCS Marine Insurance (50%)

Policy #: OXL92003348

6/30/10 to 6/30/11

 

New York Marine & General Insurance Company (50%)

Policy #: ML10142510

6/30/10 to 6/30/11

  

LLOYDS EXCESS MARINE LIABILITY

Policy #: LCX-016302

6/30/10 to 6/30/11

 

COMMERCIAL PROPERTY & SHOP BUILDING

Peerless Insurance Company

Policy #: CBP 8668552

5/15/10 to 5/5/11

 

Continental Insurance Company – MOAC

Policy #: MP0863880

7/3/10 to 7/3/11

 

VESSEL POLLUTION

Lloyds of London

Policy #: 04917-08

5/8/10 to 5/8/11

 

EMPLOYERS MUTUAL ERISA BOND*

Employers Mutual Casualty Co.

Policy #: T233938

*Employee Theft & Forgery (401k)

 

EMPLOYEE DISHONEST BOND POLICY*

Employers Mutual Insurance Company

Policy #: T221872

*Employee Theft & Forgery (401k)

 

 

 

Charles L. Crane Agency

Insurance Agents & Brokers

100 North Broadway, Ste. 900

St. Louis, MO 63102

Agent Code: 3201165

 

47

--------------------------------------------------------------------------------

Section 4.17

Licenses and Permits

 

1.    Type:    FCC Radio License    Callsign:    WNBM588    File Number:   
0002011272    Expires:    2/23/2015 2.    Type:    General Contractor’s License
   State / No.    Arkansas / License No. 0200240411       Iowa / License No.
C000254       Florida / License No. QB62307 / Qualifying Agent – CGC1515848   
   Louisiana / License No. 51264       Virginia / License No. 2705 031710A 3.   
Type:    NRC Nuclear Permit    License No.    14-25212-01    Expires:   
2/28/2013

 

48

--------------------------------------------------------------------------------

Section 4.18(b)

Environmental Matters; Hazardous Materials—Properties

Seller is working with the landowner, Burlington River Terminal, to get an
easement for Seller property stored on Burlington River Terminal’s parcel
adjacent to the Burlington, Iowa facility.

 

49

--------------------------------------------------------------------------------

Section 4.18(d)

Environmental Matters; Storage Tanks

Excavation has been done and contaminated soil is in D25 off road truck. We are
considering our options in dealing with situation henceforth. Above ground used
oil tank is not able to be tested at this time. However, it is scheduled to be
pumped after first of the year by our waste oil disposal service.

 

50

--------------------------------------------------------------------------------

Section 4.19(a)

Employee Benefits

 

1. Wellmark Blue Cross Blue Shield of Iowa - Group No. 20577-0272

 

2. Delta Dental of Iowa - Group No. 01049

 

3. Matteson 401(k) Plan invested through Charles Schwab Company

 

4. Vacation policy – Office

 

5. Vacation policy – Field

 

6. Disability policy – AFLAC (employee paid)

 

7. Midwest Operating Engineers Pension Trust (Local 150)

 

8. Central Pension Fund of the International Union of Operating Engineers and
Participating Employers (Local 649)

 

9. Central Laborers Pension Fund (Local 459)

 

10. Local Union 513 Pension Fund (Local 513)

 

11. Employer and Operating Engineers Local 520 Pension Fund (Local 520)

 

12. Laborers Locals 100 and 397 Pension Fund (Local 397)

Employment Contracts

Employment Contract dated February 25, 2009 between Tony Strickland and L.W.
Matteson, Inc.

Employment Contract dated April 11, 2007 between Kevin Burke and L.W. Matteson,
Inc.

Employment Contract dated June 9, 2010 between Timothy Cantwell and L.W.
Matteson, Inc.

Employment Contract dated August 16, 2004 between Mark Erickson and L.W.
Matteson, Inc.

Employment Contract dated September 5, 2005 between Brad Callison and L.W.
Matteson, Inc.

Employment Contract dated February 28, 2001 between Tina Snyder and L.W.
Matteson, Inc.

Note: These need to be terminated upon closing of the transaction per the
Purchase Agreement (Section 7.1(a))

 

51

--------------------------------------------------------------------------------

Section 4.19(c)

Certain Benefit Plan Matters

Items 7 – 12 in the Disclosure Schedule for Section 4.19(a) are multi-employer
pension plans.

 

52

--------------------------------------------------------------------------------

Section 4.19(d)

COBRA Coverage

Former L.W. Matteson Employees on COBRA Coverage

 

1. Ron Lawton

 

2. David Blair

 

53

--------------------------------------------------------------------------------

Section 4.20

Employee and Labor Matters

 

(b) None

 

(d) Collective Bargaining Agreement dated August 11, 1989 between Local 150
International Union of Operating Engineers and L.W. Matteson, Inc.

Collective Bargaining Agreement dated December 9, 1998 between International
Union of Operating Engineers Local No. 649

Collective Bargaining Agreement dated December 2, 2010 between Laborers Local
No. 397 and L.W. Matteson, Inc.

Collective Bargaining Agreement dated December 4, 2009 between Laborers Local
No. 459 and L.W. Matteson, Inc.

Collective Bargaining Agreement dated November 4, 2008 between Local 513
International Union of Operating Engineers

Collective Bargaining Agreement dated February 6, 2009 between International
Union of Operating Engineers Local 520

 

54

--------------------------------------------------------------------------------

Section 4.21

Taxes

None

 

55

--------------------------------------------------------------------------------

Section 4.22(a)

Suppliers

 

Thru 12/31/09

  

1.

   Hagler Systems, Inc.    $ 981,329.90   

2.

   Charles L. Crane Agency    $ 973,285.78   

3.

   Altorfer, Inc.    $ 666,690.10   

4.

   W.W. Transport, Inc.    $ 648,503.17   

5.

   County Contractors, Inc.    $ 541,564.83   

6.

   Green & Chapman, Inc.    $ 534,082.20   

7.

   Yazoo River Towing, Inc.    $ 522,672.33   

8.

   Weymiller Marine, Inc.    $ 437,946.38   

9.

   Wellmark Blue Cross    $ 423,527.42   

10.

   AIG American Int’l Co.    $ 331,497.00   

Thru 9/30/10

  

1.

   County Contractors, Inc.    $ 1,658,219.10   

2.

   Altorfer, Inc.    $ 663,505.86   

3.

   Delta Fuel Company    $ 632,771.67   

4.

   Charles L. Crane Agency    $ 617,383.85   

5.

   Heritage Petroleum Co. LLC    $ 542,302.10   

6.

   Yazoo River Towing, Inc.    $ 415,885.29   

7.

   Green & Chapman, Inc.    $ 409,773.23   

8.

   Hagler Systems, Inc.    $ 393,336.55   

9.

   Richards Electric Motor Co.    $ 388,766.72   

10.

   Wellmark Blue Cross    $ 368,537.60   

 

Note:   These suppliers are utilized on an as-needed basis; therefore purchases
from individual supplies can and do change based on the needs of the Business.

 

56

--------------------------------------------------------------------------------

Section 4.22(b)

Customers

 

Thru 12/31/09

  

1.

   USACE, Rock Island District    $ 12,100,331.83   

2.

   USACE, St. Paul District    $ 4,839,908.43   

3.

   USACE, Little Rock District    $ 4,761,202.40   

4.

   Newt Marine    $ 4,208,916.48   

5.

   Sevenson Environmental Services    $ 3,601,497.82   

6.

   Mike Hooks, Inc.    $ 2,719,946.93   

7.

   City of North Little Rock    $ 2,704,837.75   

8.

   Iowa Department of Natural Resources    $ 2,498,648.16   

9.

   USACE, Memphis District    $ 1,404,057.00   

10.

   A&H Contractors, Inc.    $ 960,200.00   

Thru 9/30/10

  

1.

   A&H Contractors, Inc.    $ 14,521,990.14   

2.

   USACE, Vicksburg District    $ 6,078,481.90   

3.

   USACE, Rock Island District    $ 3,479,184.45   

4.

   USACE, Little Rock District    $ 3,268,955.37   

5.

   Sevenson Environmental Services    $ 2,752,264.60   

6.

   Mike Hooks, Inc.    $ 2,247,780.63   

7.

   City of Decatur, IL    $ 2,036,750.00   

8.

   Holcim US, Inc.    $ 1,896,155.57   

9.

   USACE, Memphis District    $ 1,885,112.00   

10.

   Flint Creek Levee District #16    $ 1,157,900.00   

Note: Given the nature of the Business customers can and do change from year to
year.

 

57

--------------------------------------------------------------------------------

Section 4.23(a)

Government Contracts and Subcontracts

 

1)

   Title of Contract:   McClellan-Kerr Station Dredging    Date of Award:   July
30, 2010    Contract Number:   W9127S-10-D-0019    Parties Involved:   USACE,
Little Rock / L.W. Matteson, Inc. (LWM)

2)

   Title of Contract:   Chain of Rocks South Seepage Berms    Date of Award:  
August 25, 2010    Contract Number:   W912P9-10-D-0529    Parties Involved:  
USACE, St. Louis / A&H Contractors / LWM (sub for A&H)

3)

   Title of Contract:   Iowa River - Flint Creek Levee District #16    Date of
Award:   September 27, 2010    Contract Number:   09-2916.101/00936-16   
Parties Involved:   Flint Creek Levee District #16 / Klingner & Associates / LWM

4)

   Title of Contract:   Lake Decatur Dredging    Date of Award:   March 31, 2010
   Contract Number:   W09-16    Parties Involved:   City of Decatur, IL / Homer
L. Chastain / LWM

5)

   Title of Contract:   Pond A Bridgeway Acres Landfill    Date of Award:  
December 15, 2010    Contract Number:   101-0048-CP(RM)    Parties Involved:  
Pinellas County, FL Utilities / LWM

6)

   Title of Contract:   Lease of Cutterhead, Hydraulic, Pipeline Dredge (NLT
22-Inch Diameter) Fully Operated with Attendant Plant and Personnel, with a
Draft NTE 11 Feet, for Construction and Maintenance Dredging within the
Vicksburg and adjacent Districts    Date of Award:   March 31, 2010    Contract
Number:   W912EE-10-C-0011    Parties Involved:   USACE, Vicksburg / LWM

7)

   Title of Contract:   Chain of Rocks, Berm #6    Date of Award:   June 12,
2009    Contract Number:   W912P9-07-D-0513    Parties Involved:   USACE, St.
Louis / A&H Contractors / LWM (sub for A&H Contractors)

8)

   Title of Contract:   Kaskaskia Dredging 2009 (pending modification)    Date
of Award:   July 20, 2009    Contract Number:   W912P9-09-C-0415    Parties
Involved:   USACE, St. Louis / A&H Contractors / LWM (sub for A&H)

 

58

--------------------------------------------------------------------------------

9)

   Title of Contract:   Henderson County Drainage District No. 1 Levee Repairs
   Date of Award:   August 28, 2009    Contract Number:   W912EK-09-C-0094   
Parties Involved:   USACE, Rock Island District / LWM

10)

   Title of Contract:   Louisa County Drainage District No. 11 Levee Repair   
Date of Award:   September 24, 2009    Contract Number:   W912EK-09-C-0106   
Parties Involved:   USACE, Rock Island District / LWM

 

59

--------------------------------------------------------------------------------

Section 4.23(i)

Government Contracts – Technical Data

None

 

60

--------------------------------------------------------------------------------

Section 4.23(k)

Government Contracts – Liquidated Damages

 

1)

  

Title of Contract:

  

McClellan-Kerr Station Dredging

  

Liquidated Damages:

  

None

  

Indemnification Clause:

  

None

2)

  

Title of Contract:

  

Chain of Rocks South Seepage Berms

  

Liquidated Damages:

  

Per Contract Specs – Section 00700, Clause 52.211-12(a)

  

Indemnification Clause:

  

None

3)

  

Title of Contract:

  

Iowa River - Flint Creek Levee District #16

  

Liquidated Damages:

  

Per Specs – Section 005200 Contract Agreement, Para. 2.

  

Indemnification Clause:

  

Per Specs – “Standard General Conditions of the Construction Contract”, Article
6.20

4)

  

Title of Contract:

  

Lake Decatur Dredging

  

Liquidated Damages:

  

Per “ILDOT Standards and Specs for Road and Bridge Construction”, Article 108.09

  

Indemnification Clause:

  

Per “ILDOT Standards and Specs for Road and Bridge Construction”, Article 107.26

5)

  

Title of Contract:

  

Pond A Bridgeway Acres Landfill

  

Liquidated Damages:

  

Per Specs – Section B Special Conditions, Para. 21(B)

  

Indemnification Clause:

  

Per Specs – Section H Agreement, Para. 1(J)

6)

  

Title of Contract:

  

Lease of Cutterhead, Hydraulic, Pipeline Dredge (NLT 22-Inch Diameter) Fully
Operated with Attendant Plant and Personnel, with a Draft NTE 11 Feet, for
Construction and Maintenance Dredging within the Vicksburg and adjacent
Districts.

  

Liquidated Damages:

  

None

  

Indemnification Clause:

  

None

7)

  

Title of Contract:

  

Chain of Rocks, Berm #6

  

Liquidated Damages:

  

Per Contract Specs – Section 00700, Clause 52.211-12(a)

  

Indemnification Clause:

  

None

 

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8)

   Title of Contract:    Kaskaskia Dredging 2009 (pending modification)   
Liquidated Damages:    Per Contract Specs – Section 00700, Clause 52.211-12(a)
   Indemnification Clause:    Per Contract Specs – Section 00700, Clause
52.250-1

9)

   Title of Contract:    Henderson County Drainage District No. 1 Levee Repairs
   Liquidated Damages:    Per Contract Specs – Section 00700, Clause
52.211-12(a)    Indemnification Clause:    None

10)

   Title of Contract:    Louisa County Drainage District No. 11 Levee Repairs   
Liquidated Damages:    Per Contract Specs – Section 00700, Clause 52.211-12(a)
   Indemnification Clause:    None

 

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Section 4.23(p)

Certain Government Contracts

 

1)

   Title of Contract:    McClellan-Kerr Station Dredging *    Date of Award:   
July 30, 2010    Contract Number:    W9127S-10-D-0019    Parties Involved:   
USACE, Little Rock / L.W. Matteson, Inc.

2)

   Title of Contract:    Henderson County Drainage District No. 1 Levee Repairs
**    Date of Award:    August 28, 2009    Contract Number:    W912EK-09-C-0094
   Parties Involved:    USACE, Rock Island District / L.W. Matteson, Inc.

* Met requirements of Small Business Set Aside at time of letting

** Met requirements of HubZone Small Business Set Aside at time of letting

 

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Schedule 1.1

Certain Permitted Liens

None

 

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Schedule 2.1

Certain Retained Assets

 

1. Straddle crane located in Burlington, IA Maintenance Yard

 

2. LM145 – 45’ x 95’ x 5’ spud barge (#680868)

 

3. LS418 Crane located in Burlington, IA Maintenance Yard

 

4. Fiberglass deck boat located in Burlington, IA Maintenance Yard

 

5. Any and all motorcycles located anywhere on L.W. Matteson controlled property
and any motorcycle parts, and paraphernalia

 

6. Any collectibles located on Matteson-controlled property (model cranes,
boats, etc.) that are not used in the Business

 

7. Antique diving gear

 

8.

Anything designated as Matteson Marine service items by Seller located at 2815 –
91st Avenue or #1 South Point, Burlington, IA

 

9. Anything that isn’t or hasn’t been used in the normal operation of the
business of L.W. Matteson, Inc.

 

10. Cash

 

11. Any scrap metal (excluding pipe)

 

12. 2002 GMC Yukon Denali LX

 

13. Any anchor weighing in excess of 3,000 lbs.

 

14.

Two new 40-ton Nabrico winches located at 2815 – 91st Avenue in Burlington, IA

 

15.

Two new 30-ton Patterson winches located at 2815 – 91st Avenue in Burlington, IA

 

16. 1971 Link-Belt LS108B 45-Ton Crawler Crane – S/N 9LG4160

 

17. 2010 Silver GMC Sierra K1500 VIN: *************7198

 

18. Sheely barges 103 (#267617), 106 (#267620), and 109 (#267623)

 

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Schedule 2.7

Certain Retained Liabilities

None

 

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Schedule 3.2(f)

Certain Required Consents and Approvals

Lease, dated January 1, 2007, between W.B. Isgrig & Sons, Inc. and L.W.
Matteson, Inc.

Subcontract Agreement for Chain of Rocks South Seepage Berm, dated November 23,
2010, between A&H Contractors and L.W. Matteson, Inc.

Subcontract Agreement for Kaskaskia River, dated August 21, 2009, between A&H
Contractors and L.W. Matteson, Inc.

Subcontract Agreement No. LES-IL/NBD-001, for Contract No.: W912P9-07-D-0513,
Dredging of Chain of Rock Berm #6, Madison County, Illinois, dated August 31,
2007, between Lakeshore Engineering and L.W. Matteson, Inc.

 

67