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STOCK PURCHASE AGREEMENT
BY AND AMONG
IMCO RECYCLING INC.
("PURCHASER"),
IMSAMET, INC.
("IMSAMET")
AND
ENVIROSOURCE, INC.
("SELLER")
DATED: NOVEMBER 26, 1996
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TABLE OF CONTENTS[*]
PAGE
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ARTICLE I CERTAIN DEFINITIONS
"Accounting Firm" . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Accounts Receivable" . . . . . . . . . . . . . . . . . . . . . . . . 1
"Action". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Adjustment Items". . . . . . . . . . . . . . . . . . . . . . . . . 1
"Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Agreement Date". . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Announcement". . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Benefit Plan". . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Bid Balance Sheet" . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Blue Sky Laws" . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"CERCLA". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"CERCLIS" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Closing Adjustment". . . . . . . . . . . . . . . . . . . . . . . . . 2
"Closing Balance Sheet" . . . . . . . . . . . . . . . . . . . . . . . 2
"Closing Date". . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Code". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Companies" and "Company" . . . . . . . . . . . . . . . . . . . . . . 2
"Company Benefit Plans" . . . . . . . . . . . . . . . . . . . . . . . 2
"Consent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Contract". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Deadline Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Disclosure Schedule" . . . . . . . . . . . . . . . . . . . . . . . . 3
"Environmental Claims". . . . . . . . . . . . . . . . . . . . . . . . 3
"Environmental Law" . . . . . . . . . . . . . . . . . . . . . . . . . 3
"ERISA" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Exchange Act". . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Financial Statements". . . . . . . . . . . . . . . . . . . . . . . . 3
"FTC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"GAAP". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Hazardous Substance" . . . . . . . . . . . . . . . . . . . . . . . . 3
"HSR Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"I/Arizona" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"I/Idaho" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"I/Utah". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"IMSAMET" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"Income Taxes". . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"Indemnified Person". . . . . . . . . . . . . . . . . . . . . . . . . 4
"Indemnifying Person" . . . . . . . . . . . . . . . . . . . . . . . . 4
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* This Table of Contents and the cover page are not a part of this Agreement.
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TABLE OF CONTENTS (CONT'D)
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"Initial Environmental Liability" . . . . . . . . . . . . . . . . . . 4
"Intellectual Property Rights". . . . . . . . . . . . . . . . . . . . 4
"IRS" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"Justice" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"Laws". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"Liens" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"Losses". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
"Management". . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
"Material Adverse Effect" . . . . . . . . . . . . . . . . . . . . . . 5
"Net Working Capital" . . . . . . . . . . . . . . . . . . . . . . . . 5
"Non-Environmental Basket". . . . . . . . . . . . . . . . . . . . . . 5
"Non-Environmental Claims". . . . . . . . . . . . . . . . . . . . . . 5
"Notice". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
"Objection Notice". . . . . . . . . . . . . . . . . . . . . . . . . . 5
"Permits" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
"Permitted Lien". . . . . . . . . . . . . . . . . . . . . . . . . . . 5
"Provisional Closing Adjustment". . . . . . . . . . . . . . . . . . . 5
"Purchase and Sale" . . . . . . . . . . . . . . . . . . . . . . . . . 5
"Purchase Price". . . . . . . . . . . . . . . . . . . . . . . . . . . 5
"Purchaser" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
"Purchaser Documents" . . . . . . . . . . . . . . . . . . . . . . . . 6
"Purchaser's Indemnified Persons" . . . . . . . . . . . . . . . . . . 6
"Real Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
"Released". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
"SALTS" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
"Securities Act". . . . . . . . . . . . . . . . . . . . . . . . . . . 6
"Section 5.01(m) Matter". . . . . . . . . . . . . . . . . . . . . . . 6
"Seller". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
"Seller Benefit Plans". . . . . . . . . . . . . . . . . . . . . . . . 6
"Seller Documents". . . . . . . . . . . . . . . . . . . . . . . . . . 6
"Seller Income Tax Periods" . . . . . . . . . . . . . . . . . . . . . 6
"Seller's Indemnified Persons". . . . . . . . . . . . . . . . . . . . 6
"Shares". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
"Straddle Period Returns" . . . . . . . . . . . . . . . . . . . . . . 6
"Subsidiaries". . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
"Tangible Personal Property". . . . . . . . . . . . . . . . . . . . . 6
"Tax Returns" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
"Tax" or "Taxes". . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE II PURCHASE AND SALE; ET AL.
2.01. Purchase and Sale (a). . . . . . . . . . . . . . . . . . . 7
(b) Purchase Price . . . . . . . . . . . . . . . . . . . . 7
2.02. Adjustment of the Purchase Price. . . . . . . . . . . . . . 7
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TABLE OF CONTENTS (CONT'D)
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ARTICLE III REPRESENTATIONS AND WARRANTIES
3.01. Representations and Warranties of IMSAMET and Seller . . . . . 8
(a) Organization and Good Standing. . . . . . . . . . . . . . . 8
(b) Consents, Authorizations and Conflicts. . . . . . . . . . . 9
(c) Minute and Stock Transfer Books . . . . . . . . . . . . . 10
(d) Financial Statements and Liabilities. . . . . . . . . . . . 10
(e) Title, Condition and Nature of Tangible Assets. . . . . . 10
(f) Intellectual Property Rights. . . . . . . . . . . . . . . 11
(g) Litigation and Compliance . . . . . . . . . . . . . . . . 11
(h) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(i) Benefit Plans . . . . . . . . . . . . . . . . . . . . . . 12
(j) Employees and Labor Relations . . . . . . . . . . . . . . 13
(k) Environmental Matters . . . . . . . . . . . . . . . . . . 13
(l) Contracts . . . . . . . . . . . . . . . . . . . . . . . . 14
(m) Customers and Suppliers . . . . . . . . . . . . . . . . . . 14
(n) Absence of Certain Changes. . . . . . . . . . . . . . . . 14
(o) Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . 15
(p) Capitalization and Title to Shares. . . . . . . . . . . . 15
(q) Bank Accounts . . . . . . . . . . . . . . . . . . . . . . 15
(r) Accounts Receivable . . . . . . . . . . . . . . . . . . . 16
(s) Insurance . . . . . . . . . . . . . . . . . . . . . . . . 16
(t) Inventory . . . . . . . . . . . . . . . . . . . . . . . . 16
3.02. Representations and Warranties of Purchaser. . . . . . . . . 16
(a) Organization and Good Standing. . . . . . . . . . . . . . 16
(b) Consents, Authorizations and Conflicts. . . . . . . . . . 16
(c) Financing . . . . . . . . . . . . . . . . . . . . . . . . 17
3.03. To the Best Knowledge, etc. . . . . . . . . . . . . . . . . 17
3.04. No Other Representations and Warranties by IMSAMET and
Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE IV CONDUCT AND TRANSACTIONS PRIOR TO CLOSING; AFTER CLOSING
4.01. Access to Records and Properties of the Companies. . . . . . 18
4.02. Operation of IMSAMET . . . . . . . . . . . . . . . . . . . . 18
4.03. Consents and Notices . . . . . . . . . . . . . . . . . . . . 19
4.04. HSR Act. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.05. Best Efforts to Satisfy Conditions . . . . . . . . . . . . . 20
4.06. Indebtedness to Seller . . . . . . . . . . . . . . . . . . . 20
4.07. Transfer Restrictions . . . . . . . . . . . . . . . . . . . 20
4.08. Confidential Information . . . . . . . . . . . . . . . . . . 20
4.09. Tax Returns and Payments . . . . . . . . . . . . . . . . . . 21
4.10. Cooperation. . . . . . . . . . . . . . . . . . . . . . . . . 22
4.11. Competing Offers . . . . . . . . . . . . . . . . . . . . . . 22
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TABLE OF CONTENTS (CONT'D)
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ARTICLE V CONDITIONS OF CLOSING
5.01. Conditions to Obligations of Purchaser. . . . . . . . . . . . . 22
(a) Representations and Warranties; Performance of Obligations. 22
(b) Consents and Notices. . . . . . . . . . . . . . . . . . . . 23
(c) Legal Restraints. . . . . . . . . . . . . . . . . . . . . . . 23
(d) Release of Guarantees . . . . . . . . . . . . . . . . . . . 23
(e) Share Certificates. . . . . . . . . . . . . . . . . . . . . 23
(f) Receipts. . . . . . . . . . . . . . . . . . . . . . . . . . 23
(g) Resignations. . . . . . . . . . . . . . . . . . . . . . . . 24
(h) Opinion of Counsel. . . . . . . . . . . . . . . . . . . . . 24
(i) Minute Books. . . . . . . . . . . . . . . . . . . . . . . . 24
(j) Bank Signature Cards. . . . . . . . . . . . . . . . . . . . 24
(k) Corporate Documents . . . . . . . . . . . . . . . . . . . . 24
(l) Title Policy. . . . . . . . . . . . . . . . . . . . . . . . 24
(m) Environmental Report. . . . . . . . . . . . . . . . . . . . 24
(n) Updated Property Schedules. . . . . . . . . . . . . . . . . 25
(o) Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . 25
5.02. Conditions to Obligations of Seller. . . . . . . . . . . . . . 25
(a) Representations and Warranties; Performance of
Obligations. . . . . . . . . . . . . . . . . . . . . . . . 25
(b) Consents and Notices. . . . . . . . . . . . . . . . . . . . 25
(c) Legal Restraints. . . . . . . . . . . . . . . . . . . . . . 26
(d) Release of Guarantees . . . . . . . . . . . . . . . . . . . 26
(e) Closing Date Purchase Price . . . . . . . . . . . . . . . . 26
(f) Receipt . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(g) Opinion of Counsel. . . . . . . . . . . . . . . . . . . . . 26
(h) Corporate Documents . . . . . . . . . . . . . . . . . . . . 26
ARTICLE VI CLOSING DATE AND TERMINATION
6.01. Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.02. Termination of Agreement . . . . . . . . . . . . . . . . . . . 26
ARTICLE VII INDEMNIFICATION
7.01. By Seller. . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.02. By Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.03. "Losses" Defined . . . . . . . . . . . . . . . . . . . . . . . 30
7.04. Notice of Claims . . . . . . . . . . . . . . . . . . . . . . . 30
7.05. Survival of Provisions . . . . . . . . . . . . . . . . . . . . 30
7.06. No Punitive Damages. . . . . . . . . . . . . . . . . . . . . . 31
7.07. Exclusive Remedy . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE VIII MISCELLANEOUS
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TABLE OF CONTENTS (CONT'D)
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8.01. Further Actions. . . . . . . . . . . . . . . . . . . . . . . . 31
8.02. Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.03. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.04. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 32
8.05. Descriptive Headings; References . . . . . . . . . . . . . . . 32
8.06. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.07. Governing Law and Forum. . . . . . . . . . . . . . . . . . . . 33
8.08. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.09. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.10. Waivers and Amendments . . . . . . . . . . . . . . . . . . . . 34
8.11. Third Party Rights . . . . . . . . . . . . . . . . . . . . . . 34
8.12. Illegalities . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.13. Nature of the Transaction. . . . . . . . . . . . . . . . . . . 35
8.14. Public Announcements . . . . . . . . . . . . . . . . . . . . . 35
8.15. Gender and Plural Terms. . . . . . . . . . . . . . . . . . . . 35
8.16. License of Logo. . . . . . . . . . . . . . . . . . . . . . . . 35
8.17. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 36
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
EXHIBIT A -- Bid Balance Sheet
EXHIBIT B -- Form of Opinion of Counsel to IMSAMET and Seller
EXHIBIT C -- Form of Opinion of Counsel to Purchaser
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THIS STOCK PURCHASE AGREEMENT, dated November 26, 1996, is by and among (1)
IMCO Recycling Inc., a Delaware corporation ("PURCHASER") whose principal
offices are located at ▇▇▇▇ ▇. ▇'▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, (2) IMSAMET, Inc., a Delaware corporation ("IMSAMET") whose principal
offices are located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, and (3) EnviroSource, Inc., a Delaware corporation ("SELLER") whose
principal offices are located at Horsham Business Center, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
BACKGROUND
IMSAMET has issued and outstanding 1,000 shares (the "SHARES") of Common
Stock, par value $1.00 per share, all of which are owned by Seller. IMSAMET
owns all the outstanding capital stock of Imsamet of Idaho, Inc., a Delaware
corporation and Imsamet of Utah, Inc., a Delaware corporation, and a 70%
partnership interest in Imsamet of Arizona, an Arizona partnership and a 50%
partnership interest in Solar Aluminum Technology Services, a Utah partnership.
Seller desires to sell to Purchaser, and Purchaser desires to purchase from
Seller, the Shares on the terms and subject to the conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual benefits to be derived and
the representations and warranties, conditions, covenants and agreements herein
contained, and intending to be legally bound hereby, the parties hereto hereby
agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
In this Agreement, the term:
"ACCOUNTING FIRM" has the meaning set forth in Section 2.02(c).
"ACCOUNTS RECEIVABLE" has the meaning set forth in Section 3.01(r).
"ACTION" has the meaning set forth in Section 5.01(c).
"ADJUSTMENT ITEMS" has the meaning set forth in Section 2.02(a).
"AGREEMENT" means this Agreement, as the same may be modified,
amended, supplemented and/or restated from time to time.
"AGREEMENT DATE" means the date of this Agreement, as set forth in the
preamble of this Agreement.
"ANNOUNCEMENT" means and includes any announcement to the public or to
the trade, the employees or any customer or supplier of the Companies with
respect to this Agreement or any of the transactions contemplated hereby.
"BENEFIT PLAN" means and includes any pension benefit plan (as defined
in Section 3(2) of ERISA), welfare benefit plan (as defined in Section 3(1) of
ERISA), bonus, stock purchase, stock ownership, stock option, deferred
compensation, incentive,
severance, termination or other compensation plan or arrangement, or other
employee fringe benefit plan.
"BID BALANCE SHEET" means the consolidated balance sheet of IMSAMET in
the form attached hereto as EXHIBIT A, the first column of which (headed "Actual
as of 9/30/96") is the consolidated balance sheet of IMSAMET as of September 30,
1996 which is included as part of the Financial Statements.
"BLUE SKY LAWS" means and includes the securities or blue sky laws of
any state of the United States.
"CERCLA" means the federal Comprehensive Environmental Response,
Compensation and Liability Act, as the same may have been or may from time to
time be amended.
"CERCLIS" means the federal Comprehensive Environmental Response,
Compensation and Liability Information System.
"CLOSING" means the closing and consummation of the Purchase and Sale
and the other transactions contemplated by this Agreement.
"CLOSING ADJUSTMENT" has the meaning set forth in Section 2.02(a).
"CLOSING BALANCE SHEET" means the unaudited consolidated balance sheet
of IMSAMET as of the close of business on the day before the Closing Date,
prepared by consistently applying the accounting practices applied in preparing
the consolidated balance sheet of IMSAMET as of September 30, 1996 which is
included as part of the Financial Statements (notwithstanding whether such
accounting practices are fully in accordance with GAAP) and certified and signed
by Seller's principal financial officer as provided in Section 2.02(a).
"CLOSING DATE" means such date mutually agreed upon by Purchaser and
Seller that is within five business days after the first date upon which all
Consents and Notices (including such as are required under the HSR Act), which
at the time remain conditions to the obligations of the parties to effect the
Purchase and Sale shall have been obtained or given.
"CODE" means the Internal Revenue Code of 1986, as the same may have
been or may from time to time be amended.
"COMPANIES" means IMSAMET and its Subsidiaries, collectively; and
"COMPANY" means each or any of the Companies, as the context may require or
permit.
"COMPANY BENEFIT PLAN" has the meaning set forth in Section 3.01(i).
"CONSENT" means and includes any governmental, judicial or private
party consent, approval, permission, authorization, waiver or exemption.
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"CONTRACT" means and includes any contract, agreement, instrument,
undertaking, commitment or arrangement, of any kind or description whatsoever to
which IMSAMET, any of its Subsidiaries or SALTS is a party or by which any
property, assets, capital stock or partnership interest (as the case may be) of
IMSAMET, any of its Subsidiaries or SALTS is subject or bound.
"DEADLINE DATE" has the meaning set forth in Section 6.02.
"DISCLOSURE SCHEDULE" means the Disclosure Schedule, comprising the
Schedules referred to in Section 3.01 hereof, delivered by IMSAMET and Seller to
Purchaser contemporaneously with this Agreement (or prior thereto), as the same
may be updated as provided in Section 5.01(a).
"ENVIRONMENTAL CLAIMS" has the meaning set forth in Section
7.01(b)(3).
"ENVIRONMENTAL LAW" means and includes any federal, state, local or
foreign Law of, any Permit from, or any consent decree or agreement with, any
federal, state, regional, special district, local or foreign governmental
authority regulating, relating to or imposing liability or standards of conduct
relating to environmental matters or the protection of human health or the
environment, including, without limitation, (as the same may have been or may be
amended from time to time) the federal Clean Air Act, the federal Clean Water
Act, the federal Resource Conservation and Recovery Act, CERCLA, any so-called
"Superfund" or "Superlien" Law, the Occupational Safety and Health Act, the
federal Toxic Substances Control Act and any similar state, local or foreign
Law.
"ENVIRONMENTAL CLAIMS" has the meaning set forth in Section
7.01(b)(2).
"ENVIRONMENTAL REPORT" has the meaning set forth in Section 5.01(m).
"ERISA" means the federal Employee Retirement Income Security Act of
1974, as the same may have been or may from time to time be amended.
"EXCHANGE ACT" means the federal Securities Exchange Act of 1934, as
the same may have been or may from time to time be amended.
"FINANCIAL STATEMENTS" means and includes the financial statements of
the Companies included in SCHEDULE 3.01(d).
"FTC" means the U.S. Federal Trade Commission.
"GAAP" means generally accepted accounting principles in the United
States.
"HAZARDOUS SUBSTANCE" means and includes any hazardous, toxic or
polluting contaminant, substance or waste, including, without limitation, any
solid waste, toxic substance, hazardous substance, hazardous material, hazardous
chemical, pollutant or hazardous or acutely hazardous waste defined or
qualifying as such in (or for the purposes of) any Environmental Law, and shall
also include (but not be limited to) petroleum
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(including, without limitation, crude oil and any fraction thereof), any
radioactive material (including, without limitation, any source and special
nuclear by-product material as defined at 42 U.S.C. Section 2011 ET SEQ., as
amended or hereafter amended), polychlorinated biphenyls (PCBs) and asbestos
in any form or condition.
"HSR ACT" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, and the rules and regulations promulgated thereunder, as the same may have
been or may be amended from time to time.
"I/ARIZONA" means Imsamet of Arizona, an Arizona partnership.
"I/IDAHO" means Imsamet of Idaho, Inc., a Delaware corporation.
"I/UTAH" means Imsamet of Utah, Inc., a Delaware corporation.
"IMS" means International Mill Service, Inc., a Pennsylvania
corporation and wholly-owned subsidiary of Seller.
"IMSAMET" means IMSAMET, Inc., a Delaware corporation.
"IMSAMET LOGO" has the meaning set forth in Section 8.16.
"INCOME TAXES" means all U.S. federal income taxes and all taxes
imposed by states, territories and possessions of the United States and
political subdivisions thereof which are based on or measured by net income or
net profits together with all interest, penalties and additions imposed with
respect to such taxes.
"INDEMNIFIED PERSON" has the meaning set forth in Section 7.04 hereof.
"INDEMNIFYING PERSON" has the meaning set forth in Section 7.04
hereof.
"INITIAL ENVIRONMENTAL LIABILITY" has the meaning set forth in Section
3.01(k).
"INTELLECTUAL PROPERTY RIGHTS" means and includes all patents, patent
applications, trademarks, trademark registrations, applications for trademark
registrations, trade names, brand names, service marks, trade dress rights,
logos and registered copyrights.
"IRS" means the U.S. Internal Revenue Service.
"JUSTICE" means the U.S. Department of Justice.
"LAWS" means and includes all federal, state, regional, special
district, local and foreign laws, statutes, ordinances, codes, judgments,
orders, decrees, directives, rules and regulations of any governmental
authority, court or arbitrator.
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"LIENS" means and includes all liens, security interests, mortgages,
pledges, covenants, easements and similar encumbrances and defects in title.
"LOSSES" has the meaning set forth in Section 7.03 hereof.
"MANAGEMENT" means, in relation to any substance, the treatment,
storage, recycling, disposal, generation, transportation, handling or Release
thereof.
"MATERIAL ADVERSE EFFECT" means a condition or event which has had, or
if it should come about is reasonably expected to have, a material adverse
effect on the business, financial condition, earnings or prospects of the
Companies taken as a whole as compared to September 30, 1996.
"NET WORKING CAPITAL" means current assets minus current liabilities
of IMSAMET on a consolidated basis. Net Working Capital may be a negative
amount.
"NON-ENVIRONMENTAL BASKET" has the meaning set forth in Section
7.01(b)(3).
"NON-ENVIRONMENTAL CLAIMS" has the meaning set forth in Section
7.01(b)(3).
"NOTICE" means any notice, announcement, communication or other
advice.
"OBJECTION NOTICE" has the meaning set forth in Section 2.02(c).
"PERMITS" means and includes all governmental licenses, permits,
rights, privileges, registrations, required reports, franchises, authorizations
and other consents which are required under any applicable Law to own and/or
operate the business of any of the Companies.
"PERMITTED LIEN" means and includes: (i) Liens for taxes not yet due
and payable; (ii) Liens imposed by law, such as banker's, warehousemen's,
mechanic's and materialmen's liens, and other similar statutory or common law
liens arising in the ordinary course of business; (iii) Liens arising out of
pledges, bonds or deposits under worker's compensation laws, unemployment
insurance, old age pension or other social security or retirement benefits or
similar legislation and deposits securing obligations for self-insurance
arrangements in connection with any of the foregoing; (iv) easements, rights of
way, building restrictions, minor defects or irregularities in title and such
other encumbrances or charges against property (real, personal or mixed) as are
of a nature that do not in a materially adverse way affect the marketability of
the same or interfere with the use thereof in the ordinary course of business as
presently conducted; (v) Liens of landlords arising under leases as to which a
Company is lessee and which are disclosed in SCHEDULE 3.01(l); (vi) Liens
securing indebtedness disclosed or reflected in the Financial Statements; and
(vii) other Liens created in connection with senior bank financing provided to
Seller and its subsidiaries which will be released and discharged in full on or
prior to the Closing Date.
"PROVISIONAL CLOSING ADJUSTMENT" has the meaning set forth in Section
2.02(b).
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"PURCHASE AND SALE" means the transactions provided for in Section
2.01.
"PURCHASE PRICE" has the meaning set forth in Section 2.01(b).
"PURCHASER" means IMCO Recycling Inc., a Delaware corporation, and its
successors and permitted assigns.
"PURCHASER DOCUMENTS" means and includes this Agreement and the other
agreements, instruments, certificates or other documents executed and delivered
by Purchaser or any affiliate thereof in connection with this Agreement and/or
the Closing.
"PURCHASER'S INDEMNIFIED PERSONS" means and includes Purchaser, its
directors, officers, employees and agents, the Companies and SALTS and each of
their respective directors, officers, employees and agents serving as such after
the Closing at the request of Purchaser.
"REAL PROPERTY" has the meaning set forth in Section 3.01(e).
"RELEASED" means, in relation to any substances, released, spilled,
leaked, discharged, disposed of, pumped, poured, emitted, emptied, injected,
leached, dumped or allowed to escape.
"SALTS" means Solar Aluminum Technology Services, a Utah partnership.
"SECURITIES ACT" means the Securities Act of 1933, as the same may
have been or may from time to time be amended.
"SECTION 5.01(m) MATTER" has the meaning set forth in Section 5.01(m).
"SELLER" means EnviroSource, Inc., a Delaware corporation, and its
successors and permitted assigns.
"SELLER BENEFIT PLANS" has the meaning set forth in Section 3.01(i).
"SELLER DOCUMENTS" means this Agreement, and the other agreements,
instruments, certificates or other documents executed and delivered by Seller,
IMSAMET or any other Company in connection with this Agreement and/or the
Closing.
"SELLER INCOME TAX PERIODS" has the meaning set forth in Section
4.09(a).
"SELLER'S INDEMNIFIED PERSONS" means and includes Seller and the
directors, officers, employees and agents of IMSAMET and its Subsidiaries who
served as such for any period while Seller owned IMSAMET.
"SHARES" means the shares of IMSAMET's stock described in the
"Background" section of this Agreement.
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"STRADDLE PERIOD RETURNS" means all Tax Returns of the Companies for
taxable periods beginning before and ending after the Closing Date.
"SUBSIDIARIES" means I/Arizona, I/Idaho, and I/Utah, collectively.
"TANGIBLE PERSONAL PROPERTY" has the meaning set forth in Section
3.01(e).
"TAX RETURNS" means and includes all returns (including information
returns) and reports with respect to Taxes, including all schedules and other
information and materials filed, submitted or required to be filed or submitted
therewith.
"TAX" or "TAXES" means all taxes, charges, levies or other like
assessments, including without limitation all net income, gross income, gross
receipts, sales, use, ad valorem, transfer, franchise, profits, capital,
payroll, employment, excise, stamp, property or other taxes, together with any
interest and any penalties, additions to tax or additional amounts imposed by
any governmental authority.
ARTICLE II
PURCHASE AND SALE; ET AL.
2.01. PURCHASE AND SALE. (a) Subject to the terms and conditions of
this Agreement, on the Closing Date, Seller shall sell, transfer, assign, grant,
convey and set over to Purchaser, and its successors and assigns forever, and
Purchaser shall purchase and receive from Seller, free and clear of any and all
Liens, all of Seller's right, title and interest in, to and under the Shares.
(b) PURCHASE PRICE. In consideration of Seller's sale of the Shares
to Purchaser as aforesaid, Purchaser shall pay to Seller Fifty-Eight Million
United States Dollars (US$58,000,000) in cash (the "PURCHASE PRICE"), by a wire
transfer of immediately available funds to an account in the United States
designated in writing by Seller.
2.02. ADJUSTMENT OF THE PURCHASE PRICE. (a) After the Closing,
Purchaser and Seller shall cooperate in preparing the Closing Balance Sheet as
promptly as practicable, but not later than 30 days, after the Closing.
Representatives of both Purchaser and Seller shall be entitled to observe and
participate in the preparation of the Closing Balance Sheet. Such rights of
observation and participation shall specifically include the right of Seller and
its representatives to have access to the facilities and records of the
Companies and SALTS where the Companies' and SALTS's records are located during
normal business hours (or as the parties may otherwise agree). When the Closing
Balance Sheet has been completed to Seller's satisfaction, it shall be certified
and signed by Seller's principal financial officer and delivered to Purchaser.
The sum of the amounts of (1) "Property, plant and equipment, at cost", (2)
"Investment in SALTS" and (3) Net Working Capital (collectively, the "ADJUSTMENT
ITEMS") on the Closing Balance Sheet shall be compared to the sum of the amounts
of the Adjustment Items on the Bid Balance Sheet (I.E., $35,319,000). If the
sum of such amounts on the Closing Balance Sheet is greater than the sum of such
amounts on the Bid Balance Sheet, then Purchaser shall pay the amount of the
difference to Seller; if the sum of such amounts on the Closing Balance Sheet is
less
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than the sum of such amounts on the Bid Balance Sheet, then Seller shall pay
the amount of the difference to Purchaser (in either case, the "CLOSING
ADJUSTMENT").
(b) The Closing Adjustment shall be payable in the manner provided in
Section 2.01(b) within 15 days after the delivery of the Closing Balance Sheet
to Purchaser. If no Objection Notice is delivered as set forth in Section
2.02(c) below, then the Closing Adjustment calculated based on the Closing
Balance Sheet shall be final, binding and conclusive upon the parties hereto.
In the event that an Objection Notice is so delivered, then Seller shall
nevertheless pay to Purchaser any amount shown to be so payable as the Closing
Adjustment calculated based on the Closing Balance Sheet and/or Purchaser shall
pay to Seller any amount shown to be so payable in the Objection Notice (either
such payment, the "PROVISIONAL CLOSING ADJUSTMENT"). Such payments shall be
made in the manner provided in Section 2.01(b) within 15 days after the delivery
of the Closing Balance Sheet to Purchaser. The amount of any Adjustment Item
not objected to in an Objection Notice delivered as provided in the following
Section 2.02(c) shall be final, binding and conclusive upon the parties hereto.
(c) Purchaser may, within 15 days after the delivery of the Closing
Balance Sheet, give Seller a notice (an "OBJECTION NOTICE"): (i) stating that
Purchaser in good faith objects to the Closing Balance Sheet and/or the proposed
Closing Adjustment, and (ii) setting forth in full detail Purchaser's
determination of the Closing Adjustment and the reasons therefor. Purchaser and
Seller shall thereafter negotiate in good faith in order to agree upon the
amount of the Closing Adjustment. If Purchaser and Seller fail to so agree
within 30 days after the delivery of any Objection Notice, then either such
party may submit the determination of the amount of the Closing Adjustment to
Ernst & Young LLP (or, if Ernst & Young LLP shall fail or refuse to accept such
assignment, then another accounting firm selected by Ernst & Young LLP) (as the
case may be, the "ACCOUNTING FIRM"). The Accounting Firm shall be jointly
retained by Seller and Purchaser, and all the fees, costs and expenses of the
Accounting Firm shall be borne one-half by Seller and one-half by Purchaser.
After affording each of Seller and Purchaser and their respective accountants
and other representatives the opportunity to present their respective positions
as to the amount of the Closing Adjustment (which opportunity shall not extend
for more than 30 days from the date the Accounting Firm is retained), the
Accounting Firm shall determine the amount of the Closing Adjustment; PROVIDED
that the amount so determined shall be: (i) equal to the amount thereof as set
forth in or based on either (x) the Closing Balance Sheet or (y) the relevant
Objection Notice, or (ii) an amount between such amounts.
(d) The determination of the amount of the Closing Adjustment as
provided under the foregoing Section 2.02(c) (whether through negotiation or by
the Accounting Firm) shall be final, binding and conclusive upon the parties
hereto. Without limiting the generality of the foregoing, any determination of
the Closing Adjustment as provided in Section 2.02(c) shall be enforceable in
court as an arbitration award. Within five days after the determination of the
Closing Adjustment, the appropriate party shall pay the Closing Adjustment,
taking into account any previous Provisional Closing Adjustment payment(s), in
the manner provided in Section 2.01(b).
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01. REPRESENTATIONS AND WARRANTIES OF IMSAMET AND SELLER. Seller and
IMSAMET, jointly and severally, hereby represent and warrant to Purchaser as
follows:
(a) ORGANIZATION AND GOOD STANDING. IMSAMET and each of its
corporate Subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation (as
indicated in Article I) and is qualified to transact business and is in good
standing as a foreign corporation in each jurisdiction in which either the
ownership or use of the properties owned or used by it, or the nature of the
activities conducted by it, requires such qualification, as indicated in
SCHEDULE 3.01(a). IMSAMET and each of its corporate Subsidiaries have the full
corporate power and authority to own, lease and operate their properties and
assets and to carry on their businesses as presently conducted. Each of
I/Arizona and SALTS is a partnership formed, validly existing and subsisting
under the laws of its jurisdiction of formation (as indicated in Article I) and
is qualified to transact business and is in good standing as a foreign
partnership in each jurisdiction in which (x) either the ownership or use of the
properties owned or used by it, or the nature of the activities conducted by it,
requires such qualification and (y) the Laws of such jurisdiction require such
qualification of partnerships, as indicated in SCHEDULE 3.01(a). Each of
I/Arizona and SALTS has the full power and authority to own, lease and operate
its properties and assets and to carry on its business as presently conducted.
(b) CONSENTS, AUTHORIZATIONS AND CONFLICTS. (1) Neither the
execution and delivery by Seller and IMSAMET of this Agreement or of any of the
other Seller Documents, nor the performance by Seller and IMSAMET of their
respective obligations thereunder, require any Consent or the giving of any
Notice applicable to Seller or any Company or SALTS (as opposed to Purchaser),
except for such Consents and Notices that:
(i) may be required under the HSR Act,
(ii) are contemplated or called for elsewhere in this
Agreement, and
(iii) may be required under the terms and conditions of
certain Contracts listed in SCHEDULE 3.01(l) and Permits listed in
SCHEDULE 3.01(g), or
(iv) have been or will be obtained or given on or before,
and remain in full force and effect as of the Closing Date.
(2) This Agreement has been duly authorized, executed and
delivered by Seller and IMSAMET and constitutes the legal, valid and binding
obligation of Seller and IMSAMET enforceable against Seller and IMSAMET in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, reorganization, insolvency, fraudulent
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conveyance or similar laws of general application relating to or affecting
the enforcement of creditors' rights. From and after the Closing, each other
Seller Document will be duly authorized, executed and delivered by the
Company or Seller party thereto and will constitute the legal, valid and
binding obligation of such parties enforceable against such party(ies) in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, reorganization, insolvency, fraudulent conveyance or similar laws
of general application relating to or affecting the enforcement of creditors'
rights.
(3) The execution and delivery by any Company or Seller of the
Seller Documents to which they are respectively a party, and the performance by
such parties of their respective obligations thereunder, does not and will not
contravene, conflict or be inconsistent with, result in a breach of, constitute
a violation of or default under, or require or result in any right of
acceleration or create or impose any Lien under (all or any of the foregoing a
"breach"): (i) any Company's, Seller's or SALTS's respective articles or
certificate of incorporation or by-laws (or other organizational documents),
(ii) any Law applicable or relating to any Company, Seller or SALTS or any of
the businesses or assets of the Companies or SALTS, or (iii) any Contract listed
in SCHEDULE 3.01(l) or Permit listed in SCHEDULE 3.01(g).
(c) MINUTE AND STOCK TRANSFER BOOKS. IMSAMET or Seller has made
available to Purchaser the original or true copies of the minute books and stock
or other equity transfer records of the Companies. Such stock or other equity
transfer records are current and accurate, and all documentary and stock
transfer tax stamps required in connection with the issuance and transfer of the
capital stock of the Companies have been duly affixed and cancelled. At the
Closing, such minute books and stock or other equity transfer records will be in
the possession of IMSAMET.
(d) FINANCIAL STATEMENTS AND LIABILITIES. (1) The Financial
Statements, which are included in the Disclosure Schedule as SCHEDULE 3.01(d),
consist of a consolidated income statement and (except as to 1993) a
consolidated cash flow statement for each of the three years ended December 31,
1993, 1994 and 1995 and for the nine months ended September 30, 1996 and
consolidated balance sheets as of December 31, 1993, 1994 and 1995 and as of
September 30, 1996. The Financial Statements present fairly, in all material
respects, the consolidated financial position of IMSAMET at December 31, 1993,
1994 and 1995 and September 30, 1996, and its consolidated results of operations
and (except as to 1993) cash flows for each of the three years in the period
ended December 31, 1995 and for the nine months ended September 30, 1996 in a
manner that is consistent with IMSAMET's historical financial accounting and
reporting practices and that, while not inconsistent with GAAP, is not in
conformity with GAAP because, among other things: (i) certain disclosures
required by GAAP are not included; (ii) deferred Income Taxes are not included
in the Financial Statements; (iii) Seller's corporate staff supply centralized
banking and cash management services to the Companies, and provide tax, general
accounting, auditing, human resources and legal services to the Companies, none
of which has been charged to the Companies or included in the Financial
Statements; and (iv) Seller has not charged the Companies any general corporate
allocation, and no such allocation is included in the Financial Statements. The
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Financial Statements reflect the consistent application of accounting principles
throughout the periods involved.
(2) At September 30, 1996, IMSAMET, on a consolidated basis, had
no indebtedness, liabilities or obligations (other than deferred Income Taxes)
required by GAAP to be included on a balance sheet which are not included in its
consolidated balance sheet at September 30, 1996 included in the Financial
Statements. Since September 30, 1996, IMSAMET, on a consolidated basis, has
incurred no indebtedness, liabilities or obligations of any nature whatsoever
except for those incurred in the ordinary course of business or as disclosed in
the Disclosure Schedule.
(e) TITLE, CONDITION AND NATURE OF TANGIBLE ASSETS. SCHEDULE
3.01(e)(1) contains a complete list of all real property ("REAL PROPERTY") and
tangible personal property and fixtures ("TANGIBLE PERSONAL PROPERTY") owned by
any of the Companies or SALTS as of October 31, 1996 having a purchase cost of
$5,000 or more. SCHEDULE 3.01(e)(2) contains a complete list of all Real
Property and Tangible Personal Property leased by any of the Companies or SALTS
as of October 31, 1996 having a fair market value (at lease inception) of $5,000
or more. The Companies and SALTS have good and marketable title to their
respective interests in Real Property and Tangible Personal Property free and
clear of all Liens other than Permitted Liens. Except as disclosed in SCHEDULE
3.01(e)(3), the buildings, structures, improvements, fixtures and appurtenances
owned, leased or operated by any of the Companies or SALTS on any Real Property,
and the Tangible Personal Property owned, leased or operated by any of the
Companies or SALTS, are maintained in a reasonable state of repair and are
adequate to operate their respective businesses. The Companies and SALTS have
received no notice of any pending or overtly threatened condemnation or eminent
domain proceeding in respect of any Real Property or Tangible Personal Property,
and the business of the Companies and SALTS is not conducted under any
restriction imposed upon the Companies and SALTS (but not imposed upon other
persons or entities conducting similar businesses or operating similar assets
for similar purposes in the same localities by any zoning, environmental, health
and safety or other Law).
(f) INTELLECTUAL PROPERTY RIGHTS. SCHEDULE 3.01(f) sets forth a
complete list of: (i) all Intellectual Property Rights owned, licensed or used
by any of the Companies or SALTS, and (ii) all license and other agreements with
respect to any of the foregoing. The Companies and SALTS own their interests in
such Intellectual Property Rights, free and clear of all Liens other than
Permitted Liens. There are no pending or overtly threatened claims (x) against
the Companies, SALTS or Seller by any person or entity claiming any adverse
right of ownership or use of any of the Intellectual Property Rights, or (y)
that the Companies, SALTS or Seller are infringing any rights in or to the
intellectual property of any other person or entity.
(g) LITIGATION AND COMPLIANCE. Except as disclosed in SCHEDULE
3.01(g) hereto, there are no governmental authority or private party actions,
suits, claims, proceedings or investigations pending or, to the best knowledge
of IMSAMET and Seller, threatened against the Companies, SALTS, Seller or any
subsidiary or affiliate thereof: (x) relating to any of the Companies or SALTS,
the ownership or business of any of the
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Companies or SALTS, any of the Shares or any properties or assets currently
owned, leased or operated by the Companies or SALTS, or (y) which questions
or challenges Seller's right, title or interest in or to any of the Shares.
Neither the Companies or SALTS, the ownership or business of the Companies or
SALTS, any of the Shares, nor any of the properties or assets now or
previously owned, leased or operated by the Companies or SALTS, is the
subject of any judgment, order or decree of any governmental authority, court
or arbitrator. Except as disclosed in SCHEDULE 3.01(g) hereto, the Companies
and SALTS have obtained all Permits. SCHEDULE 3.01(g) contains a complete
list of all Permits held by or issued in favor of the Companies or SALTS as
of the Agreement Date. Except as disclosed in SCHEDULE 3.01(g): (i) all
Permits so listed are valid and in full force and effect, (ii) there exists
no default or violation by the Companies or SALTS under any Permit issued
under any Environmental Law (and, with respect to all other Permits, there
exists no default or violation which could reasonably be expected to have a
Material Adverse Effect), and (iii) no event, act or omission has occurred
which has resulted, or (with or without notice, the passage of time or the
occurrence of any other event) could result, in the revocation or non-renewal
of any Permit issued under any Environmental Law (and, with respect to all
other Permits, which could reasonably be expected to have a Material Adverse
Effect).
(h) TAXES. Each of the Companies and SALTS has duly filed when due
(taking into account any extensions) all Tax Returns in connection with and in
respect of the Companies or SALTS. All Taxes that the Companies and SALTS were,
or will be, required by law to pay, withhold, deposit or collect as of the
Closing Date have been, or will be, duly paid, withheld, deposited or collected
and, to the extent due, have been, or will be, paid to the relevant taxing
authority. No notice has been received of any Tax deficiency outstanding,
proposed or assessed against or allocable to IMSAMET, any Subsidiary or SALTS,
and there is no waiver of any statute of limitations on the assessment or
collection of any such Tax. Neither IMSAMET, any Subsidiary nor SALTS has
executed or filed with the IRS or any other governmental authority any agreement
now in effect extending the period for assessment or collection of any Taxes
against IMSAMET, any Subsidiary or SALTS. There are no Tax Liens upon, pending
against or, to the best knowledge of IMSAMET and Seller, threatened against the
Shares or any asset of IMSAMET. The Companies and SALTS are not a party to, nor
are they bound by, nor do they have any obligation under, any Tax sharing
agreement or similar contract which would survive the Closing Date.
(i) BENEFIT PLANS. (1) The only Benefit Plans that cover only
employees of any one or more of the Companies or SALTS (and not employees of
Seller or any other subsidiary of Seller) presently maintained by, or
contributed to by, any of the Companies or SALTS are the: (i) Principal
Healthcare PPO Plan, administered in Des Moines, Iowa, covering salaried and
hourly employees of I/Arizona, (ii) Blue Cross and Blue Shield of Utah PPO Plan,
administered in Salt Lake City, Utah, covering salaried and hourly employees of
SALTS, (iii) Solar Aluminum Technology Services 401(k) Plan, covering salaried
and hourly employees of SALTS, and (iv) I/Arizona's and SALTS's disability and
life insurance plans (collectively, the "COMPANY BENEFIT PLANS"). True,
complete and correct copies of those Company Benefit Plans requested by
Purchaser have been furnished to Purchaser. The only Benefit Plans that cover
employees of any one or more
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of the Companies or SALTS as well as employees of Seller (or subsidiaries of
Seller) are the: (a) EnviroSource, Inc. Profit Sharing Plan, (b)
EnviroSource, Inc. Savings Plan, (c) EnviroSource, Inc. Health Care Plan, and
(d) Retirement Plan for Salaried Employees of International Mill Service,
Inc. (collectively, the "SELLER BENEFIT PLANS"). The Companies, SALTS, the
Company Benefit Plans and the Seller Benefit Plans are each in substantial
compliance with the applicable provisions of ERISA, and those provisions of
the Code applicable to any of them. Neither the Companies, SALTS nor
Purchaser will incur any liability with respect any of the Seller Benefit
Plans or any other Benefit Plan (excepting Company Benefit Plans) covering
employees of Seller or any other entity that would be treated as a single
employer under Code Section 414 with one or more of the Companies (prior to
Closing).
(2) All contributions to, and payments from, any Company Benefit
Plan which may have been required to be made in accordance with the terms of
such Company Benefit Plan or applicable law have been duly and timely made.
(3) All reports, returns and similar documents with respect to
any Company Benefit Plan required to be filed with any governmental agency or
distributed to the applicable Company Benefit Plan participants have been duly
and timely filed or distributed.
(4) To the best knowledge of IMSAMET and Seller, there are no
pending investigations by any governmental authority involving the Company
Benefit Plans, no termination proceedings involving the Company Benefit Plans,
and no overtly threatened or pending claims (except for claims for benefits
payable in the normal operation of the Company Benefit Plans), suits or
proceedings against the Company Benefit Plans or asserting any rights or claims
to benefits under the Company Benefit Plans which could give rise to any
liability.
(j) EMPLOYEES AND LABOR RELATIONS. SCHEDULE 3.01(j) contains a
complete list of all of the officers and directors of the Companies and SALTS
and all employees of the Companies and SALTS earning a base salary greater than
$50,000 per year. Except as disclosed in SCHEDULE 3.01(l), no employee of the
Companies or SALTS is covered by any collective bargaining agreement or a party
to any Contract with the Companies or SALTS. The Companies and SALTS are in
compliance with all Laws relating to the employment of labor, including, without
limitation, those relating to wages, hours, unfair labor practices,
discrimination and payment of social security and similar Taxes. There are no
complaints against the Companies or SALTS pending or, to the best knowledge of
IMSAMET and Seller, threatened before the National Labor Relations Board or any
similar state or local labor agency by or on behalf of any employee of the
Companies or SALTS.
(k) ENVIRONMENTAL MATTERS. The Companies and SALTS are and have been
in compliance with all applicable Environmental Laws (including with respect to
the Management of Hazardous Substances), except where the direct or indirect
out-of-pocket cost to IMSAMET to bring the Companies and SALTS into compliance
with such Environmental Laws would not exceed $500,000 in the aggregate. All
Hazardous
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Substances shipped off-site have been disposed of properly and in compliance
with Environmental Laws. Except with respect to the matter as to which
Seller has agreed to indemnify Purchaser under Section 7.01(a)(4) or as
disclosed in SCHEDULE 3.01(k): (1) no unresolved or outstanding notice,
citation, summons or order has been issued, no complaint has been filed, no
penalty has been assessed and no investigation or review is pending or
threatened by any governmental authority or private party with respect to any
(i) actual or alleged violation by the Companies or SALTS of any
Environmental Law, (ii) actual or alleged failure by the Companies or SALTS
to have or obtain any Permit required under any Environmental Law in
connection with any of their business or operations, or (iii) the Management
of any Hazardous Substance (A) by or on behalf of the Companies or SALTS or
(B) on or at any of the facilities operated by the Companies or SALTS, and
(2) neither the Companies, SALTS nor Seller has received any presently
unresolved or outstanding request for information, notice of claim, demand or
notification that the Companies or SALTS are or may be potentially
responsible with respect to any investigation or clean-up of any threatened
or actual Release of any Hazardous Substance. For purposes of this
Agreement, the out-of-pocket cost directly or indirectly to IMSAMET to bring
the Companies and SALTS into compliance with Environmental Laws and the
Losses directly or indirectly incurred by Purchaser as a result of breaches
of this Section 3.01(k), up to $500,000 in the aggregate, is referred to as
the "INITIAL ENVIRONMENTAL LIABILITY".
(l) CONTRACTS. SCHEDULE 3.01(l) sets forth a complete list of all
Contracts except for: (1) routine purchase orders (including purchase orders for
aluminum scrap and dross for any period not exceeding three months); (2)
employment and other Contracts terminable at will or on 60 days' (or less)
notice without penalty; (3) any Contract listed on any other Disclosure
Schedule; and (4) any other Contract involving liabilities or obligations for
future payments by any Company or SALTS of not more than $50,000. Seller or
IMSAMET has heretofore delivered to Purchaser copies of all Contracts requested
by Purchaser. Except as may be indicated on SCHEDULE 3.01(l) all such Contracts
are in full force and effect in accordance with the terms thereof (except to the
extent that any courses of dealing have effected deviations therefrom, none of
which are materially adverse to any Company or SALTS), and there are no
outstanding defaults by any party under any such Contract.
(m) CUSTOMERS AND SUPPLIERS. The Companies and SALTS have not lost,
nor to the best knowledge of IMSAMET and Seller has there been any threatened
loss of: any customer, supplier or account of the Companies or SALTS, the loss
of which will have a Material Adverse Effect. SCHEDULE 3.01(m) sets forth a
true and correct list of the following materials suppliers (in terms of pounds
of materials received) to the Subsidiaries: (i) I/Idaho: top five for the ten
months ended October 31, 1996, and (ii) for each of I/Arizona and I/Utah: top
ten for the ten months ended October 31, 1996.
(n) ABSENCE OF CERTAIN CHANGES. Since September 30, 1996, except as
otherwise expressly contemplated by this Agreement or as set forth in SCHEDULE
3.01(n): (i) there has not been a material adverse change in the business,
financial condition, earnings or prospects of IMSAMET on a consolidated basis,
and (ii) each of the
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Companies and SALTS: (A) has conducted its business and operations only in
the ordinary course consistent with recent past practice and (B) has not:
(1) issued or sold any shares of its capital stock or debt
securities or partnership interests, or granted any rights calling for
the issuance or sale of any of the foregoing (including, without
limitation, options, warrants, convertible or exchangeable securities
or similar rights);
(2) amended its certificate or articles of incorporation or
by-laws or partnership certificate or partnership agreement;
(3) granted any right to severance or termination payment
to any of its officers, directors, partners or employees;
(4) created or otherwise become liable with respect to any
indebtedness for borrowed money (except for indebtedness owed to
Seller or its subsidiaries, other than another Company, which will be
capitalized at Closing as provided under Section 4.06);
(5) guaranteed, indemnified or otherwise become liable for
the obligations or liabilities of another person or entity except in
the ordinary course of business; or
(6) agreed or committed, whether or not in writing, to do
any of the foregoing.
(o) SUBSIDIARIES. The only subsidiaries of IMSAMET are I/Idaho and
I/Utah, both of which are 100% owned by IMSAMET, and I/Arizona, which is 70%
owned by IMSAMET. IMSAMET has no other equity interest in any other entity
except for its 50% partnership interest in SALTS.
(p) CAPITALIZATION AND TITLE TO SHARES. The authorized capital stock
of IMSAMET consists of 5,000 shares of Common Stock, par value $1.00 per share,
of which 1,000 shares (the "Shares") are issued and outstanding and held by
Seller, and are the only issued and outstanding shares of capital stock of
IMSAMET. All of the Shares have been duly authorized and are validly issued,
fully paid and nonassessable, and no personal liability attaches to the
ownership thereof. Seller is the lawful record and beneficial owner of the
Shares, all of which will at Closing be free and clear of all Liens. Except as
imposed under Permitted Liens described in clause (vii) of the definition
thereof in Article I, Seller has all requisite right, title, power and authority
to sell, assign, transfer and deliver the Shares to Purchaser. Except as
provided in any of the Contracts listed in SCHEDULE 3.01(l), there are no:
(A) proxies, voting trusts or other agreements or
understandings with respect to the voting of any of the shares of
capital stock or other equity interests of the Companies or SALTS
(except as imposed under Permitted Liens described in clause (vii) of
the definition thereof in Article I);
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(B) securities convertible into or exchangeable for any
shares of capital stock or other equity interests of the Companies or
SALTS;
(C) options, warrants or other rights to purchase or
subscribe for any shares of capital stock or other equity interests
of the Companies or SALTS or for securities convertible into or
exchangeable for any shares of capital stock or other equity interests
of the Companies or SALTS;
(D) plans, agreements or commitments of any kind or
description relating to the issuance or purchase of any shares of
capital stock or other equity interests of the Companies or SALTS, any
such convertible or exchangeable securities or any such options,
warrants or other rights; or
(E) agreements or commitments of any kind or description
which may obligate any of the Companies or SALTS to issue or purchase
or otherwise acquire any of its securities.
(q) BANK ACCOUNTS. SCHEDULE 3.01(q) sets forth a complete list of
the names and locations of all banks, brokers, depositories and other financial
institutions in which the Companies have an account or safe deposit box,
including all relevant account titles, account numbers and the identity of
persons authorized to withdraw funds (or other items) therefrom.
(r) ACCOUNTS RECEIVABLE. All accounts receivable of IMSAMET that
will be reflected on the Closing Balance Sheet ("ACCOUNTS RECEIVABLE") will
represent valid obligations arising from sales actually made or services
actually performed in the ordinary course of business. The Accounts Receivable
will be, as of the Closing Date, current and collectible.
(s) INSURANCE. SCHEDULE 3.01(s) contains a list of all of the
policies of insurance maintained as of the Agreement Date by the Companies
and/or SALTS or by Seller providing coverage for the Companies and/or SALTS
(excluding those providing benefits for employees thereof) in effect as of the
Agreement Date. Neither the Companies, SALTS nor Seller is in default with
respect to any provisions of any such policy (as it applies to any Company or
SALTS) nor, to the best knowledge of IMSAMET and Seller, has any of them failed
to give notice or present any claim of any Company or SALTS thereunder in a due
and timely fashion. No insurance carrier has given written notice of its
intention to discontinue any insurance coverage provided under any such policy
(as it applies to any Company or SALTS).
(t) INVENTORY. All inventory of the Companies and SALTS consists of
materials usable or saleable in the ordinary course of business, and the
aggregate market value of the inventory included in the Bid Balance Sheet is at
least equal to the value specified therefor in the Bid Balance Sheet.
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3.02. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser
represents and warrants to IMSAMET and Seller as follows:
(a) ORGANIZATION AND GOOD STANDING. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the full corporate power and authority to own, lease and
operate its properties and assets and to carry on its businesses as presently
conducted.
(b) CONSENTS, AUTHORIZATIONS AND CONFLICTS. Neither the execution
and delivery by Purchaser of this Agreement or any of the other the Purchaser
Documents, nor the performance by Purchaser of its obligations thereunder,
require any Consent or Notice applicable to Purchaser (as opposed to IMSAMET or
Seller) (including, without limitation, Consents and Notices necessary or
required under or with respect to any contract or license of Purchaser, its
parent corporation or any subsidiary thereof) except for such Consents and
Notices that (i) may be required under the HSR Act or (ii) have been duly
obtained (in the case of Consents) or given (in the case of Notices) and are
unconditional and in full force and effect. This Agreement has been duly
authorized, executed and delivered by Purchaser and constitutes the legal, valid
and binding obligation of Purchaser enforceable against Purchaser in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
reorganization, insolvency, fraudulent conveyance or similar laws of general
application relating to or affecting the enforcement of creditors' rights. From
and after the Closing, each other Purchaser Document will be duly authorized,
executed and delivered by Purchaser and will constitute the legal, valid and
binding obligation of Purchaser enforceable against Purchaser in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
reorganization, insolvency, fraudulent conveyance or similar laws of general
application relating to or affecting the enforcement of creditors' rights. The
execution and delivery by Purchaser of the Purchaser Documents, and the
performance by Purchaser of its obligations thereunder, does not and will not
contravene, conflict or be inconsistent with, result in a breach of, or
constitute a violation of or default under: (i) Purchaser's articles or
certificate of incorporation or by-laws, (ii) any Law applicable or relating to
Purchaser or (iii) any contract or license of Purchaser, its parent corporation
or any subsidiary thereof.
(c) FINANCING. (i) By the close of business on December 6, 1996,
Purchaser shall deliver to Seller copies of such existing credit lines of
Purchaser, and/or such firm commitments to provide additional debt or equity
financing to Purchaser, as Purchaser shall then have in order to provide to
Purchaser at the Closing (together with its own financial resources) the moneys
necessary in order to pay the entire Purchase Price, together with such
financial and other information with respect to such financing(s), the sources
of such financing(s) and Purchaser's own financial resources as shall be
reasonably requested by Seller. From and after December 6, 1996 and at all
times through the Closing, Purchaser will have sufficient financial resources in
order to provide to Purchaser the moneys necessary to pay the entire Purchase
Price at the Closing. Any such financial and other information with respect to
such financings(s), financing source(s) and financial resources (if any)
delivered to Seller hereunder will be, to the best knowledge of Purchaser, true,
correct and complete in all material respects. Purchaser and its subsidiaries
will comply with all covenants with respect to, and all conditions within their
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control to, such financing(s), and Purchaser will promptly advise Seller of any
facts, circumstances or events reasonably likely to prevail or occur that would
grant any such financing source the right to refuse to fund, or otherwise lead
such financing source to refuse to or be unable to fund, the financing(s)
committed to by such source(s).
(ii) In the event that Purchaser fails to deliver the documents
and information called for under the first sentence of Section 3.02(c)(i) above
by the time specified therein, then Purchaser shall have the right to terminate
this Agreement forthwith upon written or oral (confirmed in writing) notice to
Seller. In order to avoid any doubt, the parties confirm that the obligation of
Seller to consummate the Purchase and Sale is not subject to any financing
contingency or condition.
3.03. "TO THE BEST KNOWLEDGE, ETC." For all purposes of this
Agreement, any use of the phrases "to the best knowledge", "to the knowledge",
or "to the awareness" of IMSAMET, any other Company and/or Seller, and words of
similar import, when modifying any particular representation or warranty set
forth herein or in any other Seller Document, shall mean that the officers and
managerial, professional and supervisory technical employees of such party or
both such parties (as the context may indicate) have no knowledge that such
representation and warranty is not complete and correct in all respects, and
that: (A) such party or parties (as the context may indicate) have made such
reasonable investigation, and have made such reasonable inquiries as a
reasonable person under the circumstances would to determine the accuracy of
such representation and warranty, and (B) nothing has come to the attention of
the officers and managerial, professional and supervisory technical employees of
such party or parties (as the context may indicate) in the course of such
investigation and review, or otherwise, which would reasonably cause any of them
to believe that such representation and warranty is not complete and correct.
3.04. NO OTHER REPRESENTATIONS AND WARRANTIES BY IMSAMET AND SELLER.
Seller and IMSAMET shall not be deemed to have made to Purchaser (or any other
person or entity) any representation or warranty other than as expressly made by
Seller and IMSAMET in Section 3.01 hereof (as such representations and
warranties are modified by the Disclosure Schedules relating thereto). Without
limiting the generality of the foregoing, and notwithstanding any other express
representations and warranties made by Seller and IMSAMET in Section 3.01 hereof
(or elsewhere in this Agreement or in any certificate or document delivered
pursuant hereto), Seller and IMSAMET make no representation or warranty to
Purchaser (or any other person or entity) with respect to:
(1) any projections, estimates or budgets heretofore delivered to or
made available of future revenues, expenses or expenditures, future results
of operations (or any component thereof), future cash flows or future
financial condition (or any component thereof) of the Companies and/or
SALTS or the future business and operations of the Companies and/or SALTS;
(2) the availability or value to the Companies and/or SALTS after the
Closing of any net operating losses ("NOLs") that may now be available to
them.
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(3) any other information or documents made available with respect to
the Companies and/or SALTS or the business and operations of the Companies
and/or SALTS, except as expressly covered by a representation and warranty
contained in Section 3.01 hereof.
ARTICLE IV
CONDUCT AND TRANSACTIONS PRIOR TO CLOSING; AFTER CLOSING
4.01. ACCESS TO RECORDS AND PROPERTIES OF THE COMPANIES. (a) IMSAMET
and Seller shall give Purchaser and Purchaser's counsel, accountants, lenders
and their respective employees, agents and representatives such access (during
normal business hours) to, and opportunity to examine, the books, records,
files, documents, properties and assets of, the Companies, and cause the
officers, directors, employees, agents, representatives, legal counsel,
accountants, auditors and actuaries of the Companies to furnish such financial
and operating data and other information with respect to the Companies, as
Purchaser shall from time to time reasonably request. Any investigation
pursuant to this Section 4.01 shall be conducted in such manner as not to
interfere unreasonably with the ordinary course of the business and operations
of the Companies or with the confidentiality respecting the transactions
contemplated by this Agreement.
4.02. OPERATION OF THE COMPANIES. (a) From the date hereof to the
Closing Date, except to the extent that Purchaser shall consent in writing, the
Companies shall operate their respective businesses only in the ordinary course
consistent with past practice. Without limiting the generality of the
foregoing, the Companies shall:
(1) not merge or consolidate with any other entity, acquire
any other business or entity, or agree to do any of the foregoing;
(2) notify Purchaser of any significant loss of, damage to
or destruction of any of its material properties or assets;
(3) maintain in full force and effect all present insurance
coverages and apply the proceeds received under any such coverages as
a result of any loss of, damage to or destruction of any of its
properties or assets to the repair, restoration or replacement
thereof;
(4) use their reasonable best efforts to preserve the
present managerial employees (except for ▇▇▇▇ Minders, with whom
IMSAMET has entered into an agreement whereby his employment will
terminate on January ▇, ▇▇▇▇), ▇▇▇▇▇▇▇▇▇▇ and business relationships
of the Companies with persons and entities having business dealings
with it;
(5) refrain from taking any action which (if not remedied)
would render any representation and warranty contained in Section 3.01
inaccurate at and as of the Closing Date, and shall promptly advise
Purchaser of any such event or circumstance.
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(b) Notwithstanding Section 4.02(a), the Companies and Seller shall
be free to dividend or otherwise remove cash from the Companies and to effect
the transactions contemplated by Section 4.06.
(c) Purchaser shall make all commercially reasonable efforts in order
to timely obtain the firm financing commitments contemplated by Section 3.02(c).
Purchaser shall refrain from taking any action which (if not remedied) would
render any representation or warranty contained in Section 3.02 hereof
inaccurate at and as of the Closing Date to not be fulfilled, and shall promptly
notify Seller of any other breach of any representation, warranty, covenant,
condition or obligation of Purchaser hereunder.
4.03. CONSENTS AND NOTICES. Promptly after the date hereof, the
parties hereto shall use their respective best efforts to obtain all Consents
and give all Notices which may be necessary in order to consummate the Purchase
and Sale and/or any of the other transactions contemplated hereby in accordance
with the terms hereof. The parties hereto shall otherwise cooperate with each
other in discharging their respective obligations under this Section 4.03, and
shall promptly advise the other parties hereto of any difficulties encountered
in obtaining any such Consents or giving any such Notices.
4.04. HSR ACT. In furtherance of and without limitation upon Seller's,
IMSAMET's and Purchaser's obligations under Sections 4.03 and 4.05, Seller
shall, and shall cause IMSAMET to, and Purchaser shall, prepare and file with
Justice and the FTC any and all notifications, special reports, documents,
materials and information, and take any and all other actions that, in each
case, may be reasonably necessary or desirable in order to obtain any Consent or
give any Notice with respect to this Agreement, the Purchase and Sale and the
other transactions contemplated hereby and thereby under the HSR Act or any
other law, rule or regulation administered by Justice or the FTC. In addition
the parties hereto shall not file any documents, materials or information with,
or take any other action before or at the request of, Justice or the FTC without
first consulting with (in the case of IMSAMET or Seller) counsel to Purchaser
identified in Section 5.02(g) and (in the case of Purchaser) counsel to IMSAMET
and Seller identified in Section 5.01(h). Subject to the foregoing, the parties
hereto shall promptly comply with any request of Justice or the FTC for
additional documents, materials or information and shall use their respective
best efforts to obtain early termination of any applicable waiting periods under
the HSR Act or otherwise.
4.05. BEST EFFORTS TO SATISFY CONDITIONS. Each of Purchaser, Seller
and IMSAMET shall use its best efforts to cause the conditions to the Closing
set forth in Article V hereof to be satisfied, to the extent that the
satisfaction of such conditions is in the control of such party, as soon as
practicable after the date hereof; PROVIDED, HOWEVER, the foregoing shall not
constitute a limitation upon the covenants and obligations of any party
otherwise expressly set forth in this Agreement.
4.06. INDEBTEDNESS TO SELLER. On or before the Closing Date, any
indebtedness owed by any Company to Seller or any subsidiary of Seller (other
than another Company) shall be contributed to the capital of such Company, in
full satisfaction of such indebtedness.
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4.07. TRANSFER RESTRICTIONS. From and after the date hereof and until
the Closing, Seller shall not sell, assign, pledge, donate, transfer, encumber
or otherwise dispose of any of the Shares, and IMSAMET shall not sell, assign,
pledge, donate, transfer, encumber or otherwise dispose of any of its ownership
interests in the Subsidiaries or SALTS (except, in each case, for Permitted
Liens).
4.08. CONFIDENTIAL INFORMATION. (a) In the event the Closing shall
not occur, Purchaser and Purchaser's counsel, accountants, lenders and their
respective employees, agents and representatives shall treat in confidence all
confidential documents and materials and other confidential information which
they shall have obtained regarding the Companies or Seller during the course of
the negotiations leading to the transactions contemplated hereby, the
investigation of the Companies and the preparation of this Agreement, and shall
return all copies (including computer files) of non-public documents and
materials which have been furnished in connection therewith. However, nothing
contained herein shall prohibit Purchaser or any such other person or entity
from (subject to the penultimate sentence of Section 4.03 and to Section 8.14)
supplying or filing such documents, materials or other information with Justice
or the FTC or such federal, state, regional, special district, local or foreign
government, agency or authority which Purchaser deems necessary or appropriate
in connection with the matters contemplated by Sections 4.03 and 4.04.
(b) In the event the Closing shall occur, Seller and Seller's
counsel, accountants, lenders and their respective employees, agents and
representatives shall treat in confidence all confidential documents and
materials and other confidential information which they shall have obtained
regarding the Companies, Purchaser or any affiliate thereof, if obtained at any
time insofar as the same relates to the Companies, or, (as the same relates to
Purchaser or any affiliate), if obtained during the course of the negotiations
leading to the transactions contemplated hereby, the investigation of the
Companies and the preparation of this Agreement, and shall return or destroy all
copies (including computer files) of non-public confidential documents and
materials which have been furnished in connection therewith or which contain or
incorporate any of the foregoing. However, nothing contained herein shall
prohibit Seller or any such other person or entity from (subject to the second
sentence of Section 4.03 and to Section 8.14) supplying or filing such
documents, materials or other information with Justice or the FTC or such
federal, state, regional, special district, local or foreign government, agency
or authority which Seller deems necessary or appropriate in connection with the
matters contemplated by Sections 4.03 and 4.04.
4.09. TAX RETURNS AND PAYMENTS. (a) The Income Tax returns, reports
and filings of Seller shall include all items of income, gain, loss, deduction
or credit of the Companies attributable to all Income Tax periods (or portions
thereof) ending prior to the Closing Date (herein referred to as the "SELLER
INCOME TAX PERIODS"); and, Seller shall be responsible for and shall pay all
Income Taxes payable (other than deferred Income Taxes) as a consequence of the
inclusion or omission of such items in the consolidated Income Tax returns,
reports and filings of Seller for Seller Income Tax Periods and shall timely
file such tax returns and reports.
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(b) With respect to the Seller Income Tax Period between the end of
the most recent taxable period of the Companies and the day immediately
preceding the Closing Date, Purchaser shall cause to be prepared and delivered
to Seller (to the extent not already prepared and delivered) in the normal time-
frame followed by Seller and the Companies consistent with past practice and in
all events within 15 days after it shall have been requested by Seller, the
package of Income Tax information materials heretofore provided to Seller by the
Companies in accordance with past practice, including past practice as to
information schedules and work papers and as to the method of computation of
separate taxable income or other relevant measure of income of the Companies.
(c) Except as otherwise provided in Section 4.09(a) and (b), IMSAMET
or the Purchaser shall timely pay all Taxes for the periods to which the
Straddle Period Returns relate, and the Closing Balance Sheet shall include
appropriate recorded liabilities for all such Taxes. Any such liabilities for
Taxes based on payroll shall include both Taxes withheld and Taxes accrued (and
remaining unpaid) attributable to any period prior to the Closing Date. Any
such liabilities for sales and use Taxes (remaining unpaid) shall be accrued for
all sales or purchases attributable to any period prior to the Closing Date.
Taxes on Real Property or personal property shall be prorated on the Closing
Balance Sheet consistent with recent past practice, resulting in either prepaid
expenses or accrued liabilities, as the case may be.
(d) If any IRS examination of any Seller Income Tax Period results in
one or more adjustments that, together with cumulative book/tax differences as
of the Closing Date, result in Income Tax payments by Purchaser and the
Companies greater than the "Deferred income taxes" liability included on the Bid
Balance Sheet, Seller shall reimburse Purchaser for such additional Income Tax
payments. If, on the other hand, any IRS examination of any Seller Income Tax
Period results in one or more adjustments that reduce Purchaser's or the
Companies' Income Taxes for any period subsequent to the Closing Date, Purchaser
shall pay to Seller an amount equal to the resulting Income Tax savings. Except
as provided in the foregoing two sentences of this Section 4.09(d), as between
Seller and the Companies, Income Tax provisions recorded through the Closing
Date are deemed final, notwithstanding any elections Seller may have made in its
consolidated federal Income Tax returns regarding the allocation of income taxes
among the members of Seller's consolidated group.
4.10. COOPERATION. After the Closing Date, IMSAMET, Purchaser and
Seller shall (1) make available to each other, as reasonably requested, and to
any taxing authority or any accountant or other authorized employee
representative, all information, records or documents (i) relating to Tax
liabilities or potential Tax liabilities of the Companies for all periods prior
to or including the Closing Date, and (ii) reasonably necessary in order to
prepare consolidated GAAP financial statements for any period prior to or
including the Closing Date, and (2) shall preserve all such information, records
and documents until the expiration of any applicable statute of limitations
(including extensions thereof) or other relevant period. Except as required by
Law, neither IMSAMET nor Purchaser shall take any action with respect to Taxes
or Tax Returns which could result in any liability, payment or obligation to
Seller in respect of any Taxes owing by the Companies under this Agreement or
otherwise, without the prior written consent of Seller. IMSAMET and
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Purchaser shall promptly notify Seller in writing of any notice, inquiry,
audit, examination or other state of fact which could result in any
liability, payment or obligation to Seller in respect of any Taxes owing by
any of the Companies under this Agreement or otherwise. Seller shall be
responsible for any assessment of tax for periods up to the Closing Date,
shall control any audit or assessment process, and shall bear its own costs.
Notwithstanding any other provisions hereof, each party shall bear its own
expenses in complying with the foregoing provisions.
4.11. COMPETING OFFERS. From the date hereof until the Closing Date,
Seller will not, nor will it permit any of its subsidiaries, affiliates or
agents to: solicit or encourage an offer or accept an unsolicited offer from, or
enter into any negotiations, agree in principle, commit to or contract with, any
other person or entity with respect to any sale or other disposition of the
Companies or SALTS or any interest therein.
ARTICLE V
CONDITIONS OF CLOSING
5.01. CONDITIONS TO OBLIGATIONS OF PURCHASER. The obligations of
Purchaser to consummate the Purchase and Sale are subject to the satisfaction of
the following conditions, each of which may be waived by Purchaser (in whole or
in part).
(a) REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. The
representations and warranties of IMSAMET and Seller set forth in Section 3.01
or in any other Seller Document (other than Section 3.01(k) and, with respect to
environmental matters only, 3.01(n)(i) or any "bring-downs" thereof, inasmuch as
Section 5.01(m) hereof expresses the Closing condition agreement of the parties
as it relates to environmental matters) shall be true and correct on the Closing
Date as though made on and as of the Closing Date, except to the extent that any
failure of any one or more of such representations or warranties (other than
those set forth in Section 3.01(o) or 3.01(p), or any "bring-down" thereof)
shall not in the aggregate have a Material Adverse Effect. IMSAMET and Seller
shall have performed the agreements and obligations required to be respectively
performed by them under this Agreement prior to the Closing Date. IMSAMET and
Seller shall have executed and delivered to Purchaser a certificate or
certificates certifying to their compliance with the foregoing. Notwithstanding
the first sentence of this Section 5.01(a): (1) from time to time on or prior to
the Closing, Seller and IMSAMET shall be permitted to deliver to Purchaser
information which changes, modifies or supplements the representations and
warranties set forth in Section 3.01 and/or the Disclosure Schedule because of
the occurrence or non-occurrence of any event, or any circumstance arising,
after the Agreement Date; (2) upon such delivery such representations and
warranties (and/or Disclosure Schedule) shall deemed to be amended by such
information, and (3) if such event(s) or circumstance(s) result(s) in the
aggregate in a Material Adverse Effect, then the condition stated in the first
sentence of this Section 5.01(a) shall be deemed not to have been satisfied.
If, notwithstanding (x) any failure of such condition as provided in the
foregoing clause "(3)", or (y) any misrepresentation on the part of Seller
and/or IMSAMET as to which Purchaser has received written notice from or on
behalf of Seller prior to the Closing, Purchaser proceeds with the Closing, then
such failure of
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condition and/or such misrepresentation (as the case may be) shall be deemed
for all purposes to be waived.
(b) CONSENTS AND NOTICES. All Consents and Notices which may be
necessary in order to consummate the Purchase and Sale, or any of the other
transactions contemplated hereby in accordance with the terms hereof, shall have
been duly obtained (in the case of Consents) or given (in the case of Notices)
and shall be unconditional and in full force and effect. Without limiting the
generality of the foregoing, all waiting periods (including any extensions)
shall have expired or shall have been earlier terminated under the HSR Act.
(c) LEGAL RESTRAINTS. There shall not have been proposed or enacted
any Law, or any change in any existing Law, which prohibits or delays, or
threatens to prohibit or delay, the consummation of any of the Purchase and Sale
or any of the other transactions contemplated by this Agreement or which could
reasonably have a Material Adverse Effect. No order, decree, judgment or ruling
by any court or governmental authority shall have been rendered or issued, no
action, suit, claim or proceeding ("ACTION") shall have been commenced or
threatened by any governmental authority, and no non-frivolous Action shall have
been commenced by any private party, to restrain, enjoin or hinder, or to seek
damages from Purchaser, any affiliate thereof or the Companies on account of the
consummation of any of the Purchase and Sale or any of the other transactions
contemplated by this Agreement.
(d) RELEASE OF GUARANTEES. The Companies shall have been released
from all liability under any guarantee of contracts or other obligations of the
Seller and/or any of its subsidiaries (other than the Companies and SALTS).
(e) SHARE CERTIFICATES. Seller shall have delivered to Purchaser a
certificate or certificates representing the Shares, duly endorsed in blank or
accompanied by a stock power covering such Shares duly executed in blank by
Seller, and with all required stock transfer tax stamps affixed.
(f) RECEIPTS. Seller shall have executed and delivered one or more
written instruments, in form and substance reasonably satisfactory to Purchaser,
acknowledging Seller's receipt of the Purchase Price.
(g) RESIGNATIONS. Each officer and director of IMSAMET and the
Subsidiaries which are corporations holding such positions immediately prior to
the Closing Date shall have executed and delivered to the Purchaser a
resignation from such positions. Each officer, general manager and member of
the operating committee of I/Arizona appointed by IMSAMET, if any, holding such
positions immediately prior to the Closing Date shall have executed and
delivered to the Purchaser a resignation from such positions. Each officer and
member of the partnership board of SALTS appointed by IMSAMET, if any, holding
such positions immediately prior to the Closing Date shall have executed and
delivered to the Purchaser a resignation from such positions.
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(h) OPINION OF COUNSEL. Purchaser shall have received an opinion of
Dechert Price & ▇▇▇▇▇▇, special counsel to IMSAMET and Seller, dated the Closing
Date and substantially as provided in EXHIBIT B hereto.
(i) MINUTE BOOKS. The minute books and stock transfer records of
each of the Companies, and their respective corporate seals, shall have been
delivered to Purchaser.
(j) BANK SIGNATURE CARDS. IMSAMET shall have delivered such
signature cards or other required documents for each of the Companies'
respective accounts and safe deposit boxes at banks, brokers, depositories or
other financial institutions so as to enable Purchaser to designate the persons
authorized to withdraw funds (or other items) therefrom from and after the
Closing.
(k) CORPORATE DOCUMENTS. Seller and IMSAMET shall have delivered to
Purchaser: (i) a certified copy of a certificate of good standing, the
certificate of incorporation and by-laws of Seller, IMSAMET, I/Idaho and I/Utah;
(ii) a certified copy of the partnership agreement of I/Arizona; (iii)
certified copies of the partnership agreement of SALTS; and (iv) a certified
copy of resolutions of the board of directors of Seller and IMSAMET authorizing
the execution, delivery and performance of this Agreement and any other
documents delivered by Seller and IMSAMET hereunder.
(l) TITLE POLICY. Purchaser shall have received an owner's policy of
title insurance, half the expense of which shall be borne by Seller, issued by a
title company reasonably acceptable to Purchaser, with respect to each owned
parcel of Real Property and in the amount of the fair market value thereof (as
accepted by such title company), which title policy shall show that the owner
Company has good and marketable title to each such parcel of Real Property, free
and clear of all Liens except (i) Permitted Liens, and (ii) non-Permitted Liens
waived or accepted by Purchaser in writing prior to Closing.
(m) ENVIRONMENTAL REPORT. Purchaser shall have a separate
environmental audit report covering each parcel of Real Property, which
report(s) (the "ENVIRONMENTAL REPORT") is (are) to be: (1) prepared by an
environmental engineering firm reasonably acceptable to Seller and Purchaser and
the fees and expenses of which shall be borne one-half by each of Seller and
Purchaser, and (2) in accordance with the ASTM Standard for Phase 1
environmental assessments, including a review of waste management and record-
keeping compliance with respect to the operations at each parcel of Real
Property. If the Environmental Report identifies and specifies any non-
compliance(s) with Environmental Laws (i) the failure to remediate or cure of
which would prevent the Companies and SALTS from continuing to operate their
businesses in the ordinary course consistent with past practice, and (ii) the
out-of-pocket cost directly or indirectly to IMSAMET of which to bring the
Companies and SALTS into compliance with such Environmental Laws would be in
excess of $500,000 in the aggregate, then this condition shall be deemed not to
have been satisfied; UNLESS, HOWEVER, Seller either: (A) remediates or cures
such non-compliance(s) (or agrees to do so, on terms reasonably acceptable to
Purchaser) so that such out-of-pocket cost does not exceed $500,000 in the
aggregate, or (B) agrees to designate such non-compliance(s) as a "Section
5.01(m) Matter",
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indemnifiable by Seller under Section 7.01(a)(5) hereof (any such
non-compliance(s) as to which Seller so agrees, a "SECTION 5.01(M) MATTER").
In the event that the costs described in the foregoing clause (ii) shall
exceed $2,500,000, then the indemnification limit provided for under Section
7.01(b)(5)(A) shall be increased by the amount of such excess (up to an
additional $7,500,000). In the event that the costs described in the
foregoing clause (ii) shall exceed $10,000,000, then notwithstanding any
agreement of Seller to remediate or cure the underlying non-compliance or to
designate that same as a "Section 5.01(m) Matter", this condition shall be
deemed not to have been satisfied.
(n) UPDATED PROPERTY SCHEDULES. Seller shall have delivered to
Purchaser updates to Schedules 3.01(e)(1) and 3.01(e)(2).
(o) BENEFIT PLANS. Seller shall take any and all actions necessary
or appropriate to cause each of the Companies and SALTS to cease to be a
participating employer or participating sponsor of any of the Seller Benefit
Plans effective as of the Closing Date. Benefits accrued for employees of any
of the Companies or SALTS under any of the Seller Benefit Plans through the
Closing Date shall be paid to such employees in accordance with the terms of the
Seller Benefit Plans, as applicable.
5.02. CONDITIONS TO OBLIGATIONS OF SELLER. The obligations of Seller
to consummate the Purchase and Sale are subject to the satisfaction of the
following conditions, each of which may be waived by Seller (in whole or in
part).
(a) REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF OBLIGATIONS. The
representations and warranties of Purchaser set forth in Section 3.02 hereof or
in any Purchaser Document shall be true and correct in all material respects on
the Closing Date as though made on and as of the Closing Date. Purchaser shall
have performed the agreements and obligations required to be performed by it
under this Agreement prior to the Closing Date. Purchaser shall have executed
and delivered to Seller a certificate or certificates certifying to its
compliance with the foregoing, in form and substance reasonably satisfactory to
Seller.
(b) CONSENTS AND NOTICES. All Consents and Notices the failure to
obtain or to give of which may result in any material liability to or obligation
of Seller shall have been duly obtained (in the case of Consents) or given (in
the case of Notices) and shall be unconditional and in full force and effect.
Without limiting the generality of the foregoing, all waiting periods (including
any extensions) shall have expired or shall have been earlier terminated under
the HSR Act.
(c) LEGAL RESTRAINTS. There shall not have been proposed or enacted
any Law, or any change in any existing Law, which prohibits or delays, or
threatens to prohibit or delay, the consummation of any of the Purchase and Sale
or any of the other transactions contemplated by this Agreement or which could
reasonably have a Material Adverse Effect. No order, decree, judgment or ruling
by any court or governmental authority shall have been rendered or issued, no
Action shall have been commenced or threatened by any governmental authority,
and no non-frivolous Action shall have been commenced by any private party, to
restrain, enjoin or hinder, or to seek damages from
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Purchaser, any affiliate thereof or the Company on account of the
consummation of any of the Purchase and Sale or any of the other transactions
contemplated by this Agreement.
(d) RELEASE OF GUARANTEES. Seller and its subsidiaries shall have
been released from all liability under any guarantee of Contracts listed on
SCHEDULE 3.01(I).
(e) PURCHASE PRICE. Purchaser shall have delivered to Seller the
Purchase Price, in the manner provided in Section 2.01(b).
(f) RECEIPT. Purchaser shall have executed and delivered to Seller a
written instrument, in form and substance reasonably satisfactory to Seller,
acknowledging Purchaser's receipt of the certificate or certificate(s)
representing the Shares.
(g) OPINION OF COUNSEL. Seller shall have received an opinion of
▇▇▇▇▇▇ and ▇▇▇▇▇, LLP, legal counsel to Purchaser, dated the Closing Date, and
substantially as provided in EXHIBIT C hereto.
(h) CORPORATE DOCUMENTS. Purchaser shall have delivered to Seller:
(i) a certified copy of the certificate of incorporation and by-laws of
Purchaser; and (ii) a certified copy of resolutions of the board of directors of
Purchaser authorizing the execution, delivery and performance of this Agreement
and any other document delivered by Purchaser hereunder.
ARTICLE VI
CLOSING DATE AND TERMINATION
6.01. CLOSING DATE. The Closing shall take place at the offices of
▇▇▇▇▇▇ and ▇▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, at 10:00 A.M.,
local time, on the Closing Date, unless another place is agreed to by Purchaser
and Seller.
6.02. TERMINATION OF AGREEMENT. (a) This Agreement may be terminated
by either Purchaser or Seller, upon notice to the other parties hereto, if the
Closing shall not have occurred on or before January 31, 1997 (the "DEADLINE
DATE"); PROVIDED, HOWEVER, that: (1) if on such Deadline Date the Closing shall
not have occurred by reason of the failure to obtain the Consent required under
the HSR Act due to a request by Justice or the FTC for additional information,
then the Deadline Date shall automatically be extended to the date that is three
business days following the date that such Consent is obtained (PROVIDED that in
no event shall the Deadline Date be extended to beyond March 31, 1997; (2)
Purchaser shall not be permitted to terminate this Agreement under this Section
6.02 if the Closing shall not have occurred by the Deadline Date by reason of a
breach by Purchaser of its obligations under Section 4.05; and (3) Seller shall
not be permitted to terminate this Agreement under this Section 6.02 if the
Closing shall not have occurred by the Deadline Date by reason of a breach by
either Seller or IMSAMET of their obligations under Section 4.05.
(b) Termination of this Agreement under this Section 6.02 shall
automatically and irrevocably terminate all liabilities and obligations of the
terminating party
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(and in the case such party is Seller, IMSAMET) arising under this Agreement;
all rights of the terminating party (and in the case such party is Seller,
IMSAMET) arising under this Agreement, and all liabilities and obligations of
the other party or parties hereto, shall survive any such termination.
Notwithstanding the foregoing, the liabilities and obligations arising under
Section 4.08 shall survive any termination of this Agreement.
ARTICLE VII
INDEMNIFICATION
7.01. BY SELLER. (a) Subject to the limitations set forth below in
this Section 7.01, from and after the Closing Date, Seller shall indemnify the
Purchaser against, and hold the Purchaser harmless from, any and all Losses
directly or indirectly incurred, suffered, sustained or required to be paid by,
or sought to be imposed upon Purchaser, including Purchaser's share of Losses
incurred, suffered, sustained or required to be paid by, or sought to be imposed
upon any of the Purchaser's Indemnified Persons, resulting from, relating to or
arising out of:
(1) any breach as of the Closing Date of any of the
representations or warranties of IMSAMET or Seller set forth in
Section 3.01 hereof and/or the Disclosure Schedule,
(2) any breach of any covenant or agreement made by IMSAMET
(excluding actions taken by IMSAMET after Closing) or Seller under
this Agreement,
(3) subject to the first sentence of Section 4.09(d), any
liability, payment or obligation in respect of any Taxes owing by the
Companies or SALTS for periods prior to the Closing Date (other than
"Deferred income taxes" included on the Bid Balance Sheet) including
any liability imposed upon the Companies or SALTS because of joint and
several liability as a member of Seller's consolidated group,
(4) any liability, payment or obligation of Seller or the
Companies or SALTS or any post-Closing affiliate thereof in connection
with the removal and disposal of any radioactive material owned by
Ameristeel Corp. (formerly named Florida Steel Corporation) located at
I/Utah's Wendover, Utah facility, or any other actions required with
respect thereto pursuant to any Environmental Law or by any relevant
Orders for Compliance of the Utah Solid and Hazardous Waste Control
Board,
(5) any Section 5.01(m) Matter (without duplication for
Losses indemnifiable under clause (1) of this Section 7.01(a)), and
(6) the Contract between IMSAMET and ▇▇▇▇▇ ▇. ▇▇▇▇▇, the
former President of IMSAMET, with respect to post-employment benefits.
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(b) The right to indemnification under this Section 7.01 is subject
to the following limitations:
(1) The indemnification rights under this Section 7.01
shall expire at the respective times set forth in Section 7.05, and
Seller shall have no liability under this Section 7.01 or otherwise in
connection with the transactions contemplated by this Agreement unless
the Purchaser gives written notice to Seller asserting a claim for
Losses, including reasonably detailed specific facts and circumstances
pertaining thereto, before the expiration of the periods of time that
the underlying representations, warranties, covenants and agreements
survive under Section 7.05 hereof.
(2) "ENVIRONMENTAL CLAIMS" means claims for indemnification
under: (i) clause (1) of Section 7.01(a), to the extent that such
claims relate to breaches of Section 3.01(k), and (ii) clause (5) of
Section 7.01(a). Environmental Claims shall not be payable in any
event with respect to Losses directly or indirectly incurred by
Purchaser that do not in the aggregate exceed the Initial
Environmental Liability.
(3) "NON-ENVIRONMENTAL CLAIMS" means claims for
indemnification under: (i) clause (1) of Section 7.01(a), except to
the extent that such claims relate to breaches of Section 3.01(k), and
(ii) clause (2) of Section 7.01(a). Non-Environmental Claims shall
not be payable in any event with respect to Losses directly or
indirectly incurred by Purchaser that do not exceed in the aggregate
(x) $500,000 LESS (y) one-half of the Initial Environmental Liability.
(4) After the fifth anniversary of the Closing Date,
Seller's liability for Environmental Claims shall be: (A) restricted
to those Environmental Claims that arise out of a claim, action, suit
or proceeding alleged or asserted by any non-affiliated third party
against a Purchaser's Indemnified Person, and (B) limited, as to each
Environmental Claim that is first asserted by the Purchaser during any
of the following one-year periods, to the following percentages of the
full amount of the Losses relating to such Environmental Claims: (i)
the one-year period ending on the sixth anniversary of the Closing
Date: 83.33%, (ii) the one-year period ending on the seventh
anniversary of the Closing Date: 66.67%, (iii) the one-year period
ending on the eighth anniversary of the Closing Date: 50.00%, (iv) the
one-year period ending on the ninth anniversary of the Closing Date:
33.33%, and (v) the one-year period ending on the tenth anniversary of
the Closing Date: 16.67%.
(5) (A) Seller's liability for claims under this Section
7.01 (except to the extent that such claims relate to breaches of
Section 3.01(o) and 3.01(p) hereof) shall not exceed $17,500,000 (as
adjusted pursuant to Section 5.01(m)), and (B) Seller's liability for
claims under this Section 7.01 relating to breaches of Section 3.01(o)
and 3.01(p) hereof shall not exceed
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the Purchase Price (as adjusted pursuant to Section 2.02); PROVIDED,
HOWEVER, that in no event shall Seller's liability for claims (of any
description) under this Section 7.01 exceed the Purchase Price (as
adjusted pursuant to Section 2.02).
(6) LOSSES OF SALTS AND I/ARIZONA. Seller's
indemnification of Purchaser hereunder for the Losses of SALTS and
I/Arizona shall be limited to 50% and 70%, respectively; PROVIDED,
HOWEVER, that if (i) SALTS and the other owner(s) thereof are
insolvent Seller will further indemnify Purchaser if Purchaser is
required to pay more than 50% of such Losses, and (ii) I/Arizona and
the other owner(s) thereof are insolvent Seller will indemnify
Purchaser if Purchaser is required to pay more than 70% of such
Losses; PROVIDED FURTHER, HOWEVER, that the foregoing proviso shall
not apply to the extent that Purchaser or any affiliate thereof shall
be the owner of more than 50% of SALTS (in the case of clause (i)) or
more than 70% of I/Arizona (in the case of clause (ii)).
7.02. BY PURCHASER. (a) Subject to the limitations set forth below in
this Section 7.02, from and after the Closing Date, Purchaser shall indemnify
the Seller's Indemnified Persons against, and hold the Seller's Indemnified
Persons harmless from, any and all Losses directly or indirectly incurred,
suffered, sustained or required to be paid by, or sought to be imposed upon, any
of the Seller's Indemnified Persons resulting from, relating to or arising out
of:
(1) any breach as of the Closing Date of any of the
representations or warranties of Purchaser set forth in Section 3.02
hereof,
(2) any breach of any covenant or agreement made by
Purchaser under this Agreement,
(3) any obligation that arises from an event that occurs,
or circumstance that arises, after the Closing Date involving any of
the Purchaser's Indemnified Persons.
(b) The right to indemnification under this Section 7.02 is subject
to the following limitations:
(1) The indemnification rights under this Section 7.02
shall expire at the respective times set forth in Section 7.05, and
Purchaser shall have no liability under this Section 7.02 or otherwise
in connection with the transactions contemplated by this Agreement
unless a Seller's Indemnified Person gives written notice to Purchaser
asserting a claim for Losses, including reasonably detailed specific
facts and circumstances pertaining thereto, before the expiration of
the periods of time that the underlying representations, warranties,
covenants and agreements survive under Section 7.05 hereof.
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(2) Indemnification for claims under this Section 7.02
shall be payable hereunder only if and to the extent that the
aggregate amount of all Losses of the Seller's Indemnified Persons to
which this Section 7.02 hereof applies shall exceed $500,000, and
shall not be payable in any event with respect to the first $500,000
of such Losses.
(3) Purchaser's liability for all claims under this Section
7.02 shall not exceed $17,500,000.
7.03. "LOSSES" DEFINED. In this Agreement, the term "LOSSES" means and
includes all losses, claims, damages, judgments, liabilities, payments,
obligations, costs and expenses (including, without limitation, any reasonable
legal fees and costs and expenses incurred after the Closing Date in defense of
or in connection with any alleged or asserted liability, payment or obligation
as to which indemnification may apply hereunder), regardless of whether or not
any liability, payment, obligation or judgment is ultimately imposed against the
Purchaser's Indemnified Persons or Seller's Indemnified Persons and whether or
not the Purchaser's Indemnified Persons or Seller's Indemnified Persons are made
or become parties to an action, suit or proceeding in respect thereof,
voluntarily or involuntarily.
7.04. NOTICE OF CLAIMS. With respect to any matter as to which any
person or entity (the "INDEMNIFIED PERSON") is entitled to indemnification from
any other person or entity (the "INDEMNIFYING PERSON") under this Article VII,
the Indemnified Person shall have the right, but not the obligation, to contest,
defend or litigate, and to retain counsel of its choice in connection with, any
claim, action, suit or proceeding by any third party alleged or asserted against
the Indemnified Person in respect of, resulting from, relating to or arising out
of such matter, and the costs and expenses thereof shall be subject to the
indemnification obligations of the Indemnifying Person hereunder; PROVIDED,
HOWEVER, that if the Indemnifying Person acknowledges in writing its obligation
to indemnify the Indemnified Person in respect of such matter to the fullest
extent provided by this Article VII, the Indemnifying Person shall be entitled,
at its option, to assume and control the defense of such claim, action, suit or
proceeding at its expense through counsel reasonably acceptable to the
Indemnified Person of its choice if it gives prompt notice of its intention to
do so to the Indemnified Person. Neither an Indemnified Person nor an
Indemnifying Person shall be entitled to settle or compromise any such claim,
action, suit or proceeding without the prior written consent of the other party
hereto (and for purposes of this provision the "other party hereto" shall be:
(i) Purchaser, for any Indemnified Person or Indemnifying Person who is a
Seller's Indemnified Person, and (ii) Seller, for Purchaser, which consent shall
not be unreasonably withheld.
7.05. SURVIVAL OF PROVISIONS. (a) All representations and warranties
contained herein or made pursuant to this Agreement shall survive the Closing
until (but excluding) the date that is eighteen months after the Closing Date,
except that the representations and warranties contained in or made pursuant to
(i) Sections 3.01(o) and 3.01(p) shall survive the Closing without limitation,
(ii) Section 3.01(k) shall survive the Closing until (but excluding) the tenth
anniversary of the Closing Date (subject to Section 7.01(b)(4) hereof), (iii)
Section 3.01(h) shall survive the Closing until (but excluding) the fifth
anniversary of the
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Closing Date, and (iv) Section 3.01(i) shall survive the Closing until (but
excluding) the sixth anniversary of the Closing Date.
(b) All covenants and agreements of the parties contained in or made
pursuant to this Agreement and required to be performed prior to the Closing
Date shall not survive the Closing and shall be deemed to have been waived by
the party for whose benefit the covenant or agreement exists. All other
covenants and agreements contained in or made pursuant to this Agreement
(including Section 7.01 and 7.02) shall survive the Closing for so long as any
claim may be made in respect of such matters under any applicable statute of
limitations, except that Sections 7.01(a)(4) and (5) shall survive the Closing
until (but excluding) the tenth anniversary of the Closing Date (subject to
Section 7.01(b)(4) hereof). This Section 7.05 shall survive the Closing without
limitation.
7.06. NO PUNITIVE DAMAGES. Notwithstanding anything to the contrary
set forth in this Agreement, no party hereto shall have any liability to any
other party hereto, Purchaser or any of Seller's Indemnified Persons for any
punitive, consequential or special damages by virtue of any breach of any
representation, warranty, covenant or agreement in or pursuant to this
Agreement, any Seller Document or Purchaser Document or any other agreement,
document or instrument executed and delivered pursuant hereto or in connection
herewith or the Closing; PROVIDED that the foregoing shall not be deemed to
limit the obligation of any party hereunder to indemnify for Losses constituting
punitive, consequential or special damages awarded to any third-party claimant.
7.07. EXCLUSIVE REMEDY. Each party hereto agrees that the sole
liability of any other party hereto for any claim with respect to the
transactions contemplated under this Agreement from and after the Closing Date
shall be limited to indemnification under this Article VII; PROVIDED; HOWEVER,
that the foregoing shall not be deemed to prohibit or restrict the availability
of any equitable remedies (including specific performance) in the event of any
violation or threatened violation of Section 4.08.
ARTICLE VIII
MISCELLANEOUS
8.01. FURTHER ACTIONS. From time to time after the Closing Date, the
parties hereto shall execute and deliver (or cause to be executed and delivered)
such other and further documents and instruments and shall take (or cause to be
taken) such other and further actions, as any other party hereto may reasonably
request in order to further effect and/or evidence the transactions contemplated
hereby or to otherwise consummate and give effect to the covenants and
agreements set forth herein.
8.02. BROKERS. Seller shall indemnify Purchaser against, and hold
Purchaser harmless from, at all times after the date hereof, any and all Losses
resulting from, relating to or arising out of any agreement, arrangement or
undertaking made or alleged to have been made by Seller, IMSAMET or any officer,
director, employee, agent, representative or affiliate of Seller, and/or IMSAMET
with any third party for brokerage or finder fees or other commissions in
connection with this Agreement or the transactions contemplated hereby or
thereby. Purchaser shall indemnify Seller against, and hold Seller harmless
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from, at all times after the date hereof, any and all Losses resulting from,
relating to or arising out of any agreement, arrangement or undertaking made or
alleged to have been made by Purchaser or any officer, director, employee,
agent, representative or affiliate of Purchaser with any third party for
brokerage or finder fees or other commissions in connection with this Agreement
or the transactions contemplated hereby or thereby. Seller shall be responsible
to pay the fees and expenses of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated.
8.03. EXPENSES. Seller shall bear its and the Companies' legal fees,
appraisal fees, investment banking fees and other costs and expenses with
respect to the negotiation, execution and the delivery of this Agreement and the
consummation of the transactions hereunder. Purchaser shall bear its own legal
fees, appraisal fees, investment banking fees and other costs and expenses with
respect to the negotiation, execution and the delivery of this Agreement and the
consummation of the transactions hereunder. Seller shall pay any and all sales,
transfer and documentary stamp taxes and other expenses incident to the transfer
of the Shares.
8.04. ENTIRE AGREEMENT. This Agreement, which includes the Exhibits
hereto and the Disclosure Schedule, and the other Seller Documents and Purchaser
Documents and the confidentiality agreement, dated August 28, 1996 between
Purchaser and Seller contain the entire agreement among IMSAMET, Seller and
Purchaser with respect to the subject matter hereof and thereof, and supersede
all prior agreements, arrangements and understandings with respect thereto.
8.05. DESCRIPTIVE HEADINGS; REFERENCES. The descriptive headings of
this Agreement and other Seller Documents and Purchaser Documents are for
convenience of reference only and shall not control or affect the meaning or
construction of any provision hereof or thereof. Article, Section and Exhibit
references in this Agreement are to the referenced Articles and Sections of and
Exhibits to, this Agreement, unless the context otherwise requires. Schedule
reference in this Agreement are to the referenced Schedules in the Disclosure
Schedule, unless the context otherwise requires.
8.06. NOTICES. Any notice or other communication which is required or
permitted hereunder or under any other Seller Document or Purchaser Document
shall be in writing and shall be deemed to have been delivered and received (x)
on the day of (or, if not a business day, the first business day after) its
having been personally delivered or telecopied to the following address or
telecopy number, (y) on the first business day after its having been sent by
overnight delivery service to the following address, or (z) if sent by regular,
registered or certified mail, when actually received at the following address:
If to Purchaser or (after the Closing) IMSAMET:
IMCO Recycling Inc.
Central Tower at ▇▇▇▇▇▇▇ Square
▇▇▇▇ ▇▇▇▇▇ ▇'▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
ATTENTION: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
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Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ and ▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
ATTENTION: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
If to Seller or (prior to the Closing) IMSAMET:
EnviroSource, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
ATTENTION: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
and (prior to the Closing):
IMSAMET, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTENTION: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to (if on or prior to 18 months after the Closing Date):
Dechert Price & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
ATTENTION: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Any party may by notice change the address or telecopier number to which notices
or other communications to it are to be delivered, telecopied or sent.
8.07. GOVERNING LAW AND FORUM. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware (other than the
choice of law principles thereof), except that any representations and
warranties with respect to real or tangible personal property shall be governed
by and construed in accordance with the laws of the jurisdiction where such
property is situated if other than in the State of Delaware. Any claim, action,
suit or other proceeding initiated by any of the Seller's
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Indemnified Persons against Purchaser, or by any of the Purchaser's
Indemnified Persons against Seller, under or in connection with this
Agreement or any Seller Document or Purchaser Document shall exclusively be
asserted, brought, prosecuted and maintained in any federal or state court in
the State of Delaware, as the party bringing such action, suit or proceeding
shall elect, having jurisdiction over the subject matter thereof, and Seller
and Purchaser hereby irrevocably (i) submit to the jurisdiction of such
courts, (ii) waive any and all rights to object to the laying of venue in any
such court, (iii) waive any and all rights to claim that any such court may
be an inconvenient forum, and (iv) agree that service of process on them in
any such action, suit or proceeding may be effected by the means by which
notices may be given to it under this Agreement.
8.08. ASSIGNMENT. This Agreement, and the respective rights and
obligations of the parties hereunder, may not be assigned or delegated otherwise
than by operation of law (x) by Purchaser or (after the Closing) IMSAMET without
the prior written consent of Seller or (y) by Seller or (prior to the Closing)
IMSAMET without the prior written consent of Purchaser, and any purported
assignment or delegation by any party hereto in violation of the foregoing shall
be void AB INITIO; PROVIDED, HOWEVER, that any or all rights of any party to
receive the performance of the obligations of the other parties hereunder (but
not any obligations of any party hereunder) and rights to assert claims against
the other parties in respect of breaches of representations, warranties or
covenants may be assigned to any entity extending credit to such party or any of
its affiliates, but any assignee of such rights shall take such rights subject
to any defenses, counterclaims and rights of set-off to which the non-assigning
parties might be entitled under this Agreement. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors, and permitted assigns.
8.09. REMEDIES. Purchaser and Seller acknowledge that any violation or
threatened violation of Section 4.08 hereof will cause irreparable injury to the
other party and that the remedy at law for any such violation or threatened
violation will be inadequate. Purchaser and Seller agree that the other party
shall be entitled to temporary and permanent injunctive relief for any such
violation or threatened violation without the necessity of proving (i) that the
other party will be irreparably injured thereby, (ii) that the remedy at law for
such violation or threatened violation is inadequate or (iii) actual damages.
8.10. WAIVERS AND AMENDMENTS. Any waiver of any term or condition of
this Agreement, or any amendment or supplementation of this Agreement, shall be
effective only if in a writing executed by each of the parties hereto. A waiver
of any breach or failure to enforce any of the terms or conditions of this
Agreement shall not in any way affect, limit or waive a party's rights hereunder
at any time to enforce strict compliance thereafter with every term or condition
of this Agreement.
8.11. THIRD PARTY RIGHTS. Notwithstanding any other provision of this
Agreement, and except as expressly provided in Article VII or as permitted
pursuant to Section 8.08 hereof, this Agreement and the other Seller Documents
and Purchaser Documents shall not create benefits on behalf of any employee,
agent or representative of IMSAMET or any other person or entity not party
hereto (including, without limitation, any accountant, broker
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or finder, notwithstanding the provisions of Section 8.02), and this
Agreement shall be effective only as between the parties hereto, their
successors, and permitted assigns.
8.12. ILLEGALITIES. In the event that any provision contained in this
Agreement shall be determined to be invalid, illegal or unenforceable in any
respect for any reason, the validity, legality and enforceability of any such
provision in every other respect, and the remaining provisions of this
Agreement, shall not, at the election of the party for whose benefit the
provision exists, be in any way impaired.
8.13. NATURE OF THE TRANSACTION. (a) Purchaser and Seller agree that
the Purchase and Sale hereunder is a purchase of a business in its entirety as a
going concern to be directed and operated by the Purchaser, and not an
investment in securities although the transaction will be effectuated by a sale
of the Shares for purposes of convenience and tax planning.
(b) For purposes of the Securities Act Purchaser hereby acknowledges
its understanding that the Shares are not registered under the Securities Act,
or registered or qualified under any Blue Sky Laws, on the grounds that the
offering, sale, issuance and delivery thereof is exempt from the registration
and/or qualification requirements thereof, and that Seller's reliance on such
exemption is predicated in part on the following covenants, agreements and
acknowledgments of Purchaser. Purchaser hereby represents and warrants to and
covenants and agrees with Seller that Purchaser: (i) is acquiring the Shares
for its own account for investment purposes only, with no present intention of
offering, selling, transferring, distributing or otherwise disposing of the
same, any part thereof or any interest therein (subject, nevertheless, to any
requirement of law that the disposition of its securities shall at all times be
within its control), and (ii) will not offer, sell, transfer, distribute or
otherwise dispose of the Shares except in compliance with the Securities Act and
all applicable Blue Sky Laws.
8.14. PUBLIC ANNOUNCEMENTS. No party hereto shall make any
Announcement to which the other parties hereto shall reasonably object, however,
Seller and Purchaser will be required under the Exchange Act to report this
Agreement and the transactions contemplated hereby, and such reporting shall be
permitted in all events. Each party shall afford the other parties hereto the
opportunity to review and comment upon each Announcement proposed to be made by
it prior to the release thereof.
8.15. GENDER AND PLURAL TERMS. Words of gender or neuter may be read
as masculine, feminine or neuter, as required by the context. Singular and
plural forms of defined and other terms herein may be read as singular or
plural, as required or permitted by the context.
8.16. LICENSE OF LOGO. Purchaser acknowledges its understanding (as
disclosed in SCHEDULE 3.01(f)) that the rights to the "IMSAMET" logo (I.E., the
"IMSAMET" name superimposed on a stylized globe that is also used in the IMS
logo) (the "IMSAMET LOGO") is not owned by any Company, but is rather informally
licensed by the Companies from Seller or IMS. Seller, for itself and IMS,
hereby grants to the Companies, for a period of six months after the Closing
Date, the right to use the IMSAMET Logo in connection with
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the business locations and operations of the Companies as they exist on the
Closing Date; PROVIDED that the license hereby granted shall remain in effect
only for so long as the Companies maintain the quality of products and
services provided by such locations and operations at a level at or above
that presently provided by the Companies.
8.17. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
[the remainder of this page is intentionally blank]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
PURCHASER: SELLER:
IMCO RECYCLING INC. ENVIROSOURCE, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------- -------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President and CEO Title: Senior Vice President
IMSAMET:
IMSAMET, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
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