EXHIBIT 11
STIPULATED AGREEMENT
This stipulated agreement ("Agreement") between Proler International
Corp. ("Proler") and Xxxx Xxx Corporation ("HNC"), acting through their
respective counsel, is entered as of October 2, 1996.
WHEREAS Proler and Xxxx Xxx are members of three joint ventures (the
"Joint Ventures");
WHEREAS Proler has entered into an agreement and plan of merger
("Merger Agreement") with Schnitzer Steel Industries, Inc. and PIC Acquisition
Corporation (collectively, "Schnitzer"), pursuant to which Proler agreed to
provide Schnitzer certain "due diligence" information ("Information") concerning
the Joint Ventures;
WHEREAS a dispute has arisen between HNC and Proler concerning
(among other things) the propriety of Proler making Information concerning the
Joint Ventures available to Schnitzer, and the manner and terms pursuant to
which Proler may do so, and the propriety of HNC's alleged conduct regarding
Proler and Schnitzer with respect to the Merger Agreement and the transactions
contemplated thereby, including without limitation the obtaining of the TRO and
the notice and pursuit of the Arbitration (both of which are defined below);
WHEREAS Proler has commenced a proceeding against HNC in the
District Court of Xxxxxx County, Texas, arising, among other things, out of
HNC's alleged conduct regarding Proler and Schnitzer with respect to the Merger
Agreement and the transactions contemplated thereby ("Texas Proceeding");
2
WHEREAS HNC has provided Proler with a notice calling for an
arbitration against Proler arising, among other things, out of Proler's entry
into the Merger Agreement, and the disclosure of Information to Schnitzer
concerning the Joint Ventures (the "Arbitration");
WHEREAS HNC has commenced a proceeding seeking an injunction in aid
of arbitration against Proler to prohibit certain disclosures of Information
concerning the Joint Ventures (the "Special Proceeding"), and the Supreme Court
of the State of New York, County of New York, issued, EX PARTE, a temporary
restraining order at HNC's request prohibiting Proler from making certain
Information available to Schnitzer without HNC's consent (the "TRO");
WHEREAS Proler has removed the Special Proceeding to the United
States District Court for the Southern District of New York, as action 96 Civ.
7353 (WK), and HNC has filed a motion to remand the Special Proceeding to the
Supreme Court of the State of New York, County of New York; and
WHEREAS HNC and Proler wish to obviate the need for judicial
intervention relating to the issues raised by the TRO, and to establish terms
and conditions pursuant to which Proler may, if it wishes, make information
available to Schnitzer, all without prejudice to the parties' respective legal
positions.
NOW, therefore, it is hereby STIPULATED as follows:
1. Proler shall cause Schnitzer to execute not later than the close
of business on October 1, 1996 a revised confidentiality agreement in the form
attached hereto as Exhibit A (the "Confidentiality Agreement"), which shall
govern Schnitzer's
3
treatment of all Information heretofore and hereafter provided to it concerning
the Joint Ventures pursuant to the Merger Agreement and the Confidentiality
Agreement.
2. Proler shall provide to HNC photocopies of all documents provided
by it to Schnitzer concerning the Joint Ventures, including copies of the
portions of those schedules attached to the Merger Agreement to the extent that
they pertain to the Joint Ventures, and shall deliver to HNC's attorneys in New
York City a substantial quantity of such documents on or before 5:30 p.m. on
October 4, 1996, and any remaining documents on or before 5:30 p.m. on October
8, 1996. To the extent that Proler hereafter provides documents to Schnitzer
pursuant to the Confidentiality Agreement and the Merger Agreement that are or
were obtained from the Joint Ventures or reflect information provided at any
time by the Joint Ventures, Proler shall promptly provide photocopies of such
documents to HNC. An inadvertent failure by Proler to produce photocopies
pursuant to this section shall not be deemed a material breach of this Agreement
that would excuse performance by HNC of any of its obligations under this
Agreement.
3. On or before 4:00 p.m. on October 2, 1996, the parties shall
execute a stipulation for entry by the Court in the form annexed as Exhibit B,
and the parties shall treat the TRO as dissolved immediately upon the filing of
the executed stipulation with the Court.
4. HNC and Proler shall hereafter provide reasonable advance notice
to the other party through its counsel before seeking any injunctive relief,
including a temporary restraining order or preliminary injunction, relating in
any way
4
to the Merger Agreement, the transactions contemplated hereby, or any other
dispute between the parties.
5. HNC acknowledges that Proler intends to continue to supply
Information to Schnitzer and its representatives subject to the Confidentiality
Agreement, including by, without limitation: (a) instructing the Joint Venture
personnel to provide copies of documents to Schnitzer and its representatives,
and with respect to those documents that Schnitzer is permitted to inspect but
of which it may not retain copies pursuant to the Confidentiality Agreement,
instructing the Joint Venture personnel to facilitate such inspections; and (b)
permitting Schnitzer representatives to make on-site visits to Joint Venture
locations, and instructing Joint Venture personnel to communicate with Schnitzer
representatives to the extent necessary and customary in a "Phase I"
environmental review. HNC will instruct Joint Venture personnel to cooperate
with Proler in such process (subject to the performance by Proler of its
obligations under the Confidentiality Agreement).
6. Notwithstanding any other provision of this Agreement or of the
Confidentiality Agreement, Proler shall not make available to Schnitzer, either
directly or indirectly, information disclosing unconsummated (E.G., where scrap
has not yet been delivered by the supplier or delivered to the customer)
purchases from suppliers or sales to customers of the Joint Ventures.
7. Notwithstanding the foregoing, HNC and Proler each continue to
have various claims against each other, and each reserves the right to seek all
appropriate relief (other than any form of temporary or preliminary injunctive
relief that would prohibit or restrict performance of any of the obligations
undertaken in this
5
Agreement) with respect to such claims in any action, proceeding, arbitration or
other dispute resolution forum, including without limitation in the Arbitration,
the Texas Proceeding or the Special Proceeding. Neither this Agreement nor any
action undertaken by the parties hereto in compliance with this Agreement shall
prejudice either HNC or Proler with respect to their respective positions
regarding any dispute between the parties, including without limitation their
respective positions concerning whether any particular forum (including without
limitation courts in New York, Texas or elsewhere, or one or more arbitral
tribunals) has jurisdiction or is otherwise an appropriate forum for the
resolution of any of the dispute between Proler and HNC.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first indicated above.
XXXX XXX CORPORATION
By: Xxxx Xxxxx Rifkind Xxxxxxx & Xxxxxxxx
/s/ XXXXXX XXXXXXXXXX
Xxxxxx Xxxxxxxxxx, A Member of the Firm
PROLER INTERNATIONAL CORP.
By: Xxxxxx Xxxxxxxx Xxxxx & Xxxxxxxx
/s/ XXXXXXX XXXXXXX
Xxxxxxx Xxxxxxx, A Member of the Firm
