ASSET PURCHASE AGREEMENT
BETWEEN
Excaliber Tubular Corporation
AND
Laclede Steel Company
January 10, 1997
TABLE OF CONTENTS
Page
1. Definitions; interpretation. . . . . 1
2. Basic Transaction. . . . . . . . . .10
3. Representations and Warranties . . .13
4. Representations and Warranties of the Buyer26
5. Pre-Closing Covenants. . . . . . . .27
6. Conditions Precedent to Close. . . .30
7. Post-Closing Covenants . . . . . . .33
8. Remedies for Breaches of This Agreement36
9. Termination. . . . . . . . . . . . .42
10. Miscellaneous. . . . . . . . . . . .43
EXHIBITS
Exhibit A -- Form of Buyer Note
Exhibit B -- ▇▇▇▇ of Sale
Exhibit C -- Conversion Services Agreement
Exhibit D -- Supply Agreement
Exhibit E -- Deed (Real Property)
Exhibit F --Assumption Agreement
Exhibit G -- Operating Statements
Exhibit H -- Price Increases
SCHEDULES
Real Property Schedule
Contracts Schedule
Excluded Contracts Schedule
Permits and Licenses Schedule
Employees Schedule
Litigation Schedule
Standard Terms Schedule
Employee Benefit Plan Schedule
ASSET PURCHASE AGREEMENT
This Agreement is made as of January 10, 1997, by and
between Excaliber Tubular Corporation, a Delaware corporation (the
"Buyer"), and Laclede Steel Company, a Delaware corporation (the
"Seller"). (The Buyer and the Seller are referred to collectively as the
"Parties".)
Subject to the terms and conditions set forth in this Agreement
the Buyer will purchase the Acquired Assets (as defined herein) and
assume certain of the liabilities of the Seller at and relating to the
Seller's Benwood, West Virginia facility ("Facility") in return for cash
and the Buyer Note (as defined herein).
In consideration of the premises and the mutual promises herein
made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows.
I.Definitions; interpretation.
"Accredited Investor" has the meaning set forth in Regulation
D promulgated under the Securities Act.
"Accrued Vacation Pay" means the total dollar amount of
vacation pay and sick pay accrued on the books and records of the
Company with respect to the Employees as of the Closing Date.
"Acquired Assets" means all right, title, and interest in and to
all of the assets constituting the Seller's assets customarily located at
the Facility and all other assets of the Seller (other than the Excluded
Assets or as specified below) used primarily in the operation of the
business as presently conducted at or by the Facility (the "Business"),
including, without limitation, all of the following to the extent they
are not Excluded Assets:
A.real property, leaseholds and subleases therein, used primarily
in the Business, including without limitation, the real property listed in
the Real Property Schedule and all improvements, fixtures, and fittings
thereon, and easements, rights-of-way, and other appurtenants thereto
(such as appurtenant rights in and to public streets) ("Real Property");
B.all inventory of the Business, including, without limitation,
all raw materials, work in process, finished goods and goods in transit
other than Excess Inventory (as defined herein) and reject inventory as
that term is defined by custom and practice in the industry;
C.all tangible personal property used primarily in the Business
(such as leasehold improvements, machinery, equipment, manufactured
and purchased parts, furniture, automobiles, trucks, tractors, trailers,
tools, jigs, dies, spares, parts and store supplies);
D.Intellectual Property (as defined herein), goodwill associated
therewith, licenses and sublicenses granted and obtained with respect
thereto, and rights thereunder, remedies against infringements thereof,
and rights to protection of interests therein under the laws of all
jurisdictions;
E.all contracts, leases, licenses, supply and distribution arrange-
ments, sales and purchase agreements and orders, confidentiality
agreements and other agreements (including dealership, service, mainte-
▇▇▇▇▇, vendor, customer and service agreements) and business arrange-
ments primarily related to the Business (including all such items listed
in the Contracts Schedule or specifically identified on the other
Schedules attached hereto or not required to be described thereon due
to specific dollar thresholds specified in this Agreement but not
including the Excluded Contracts) (the "Contracts");
▇.▇▇▇▇▇▇, deposits, prepayments, refunds, causes of action,
choses in action, rights of recovery, rights of set off, and rights of
recoupment relating primarily to the Business ("Deposits");
▇.▇▇ the extent transferable to the Buyer, all franchises,
approvals, permits, licenses, orders, registrations, certificates, variances,
and similar rights obtained from governments and governmental
agencies primarily related to the Business including all the foregoing
listed or described in the Permits and Licenses Schedule and the rights
to all data and records held by such bodies and agencies;
▇.▇▇▇▇▇▇▇▇ records and files, books, records, ledgers, files,
documents, correspondence, lists, plates, architectural plans, drawings,
and specifications, creative materials, advertising and promotional
materials, studies, reports, and other printed or written materials, in
each case primarily used in the operation of the Business;
I.all other properties, assets, rights and interests owned by the
Seller or in which the Seller has an interest which are used primarily
in the Business as of the Closing Date; and
J.all goodwill as a going concern and all other intangible
property primarily relating to the Business.
"Adverse Consequences" means all actions, suits, proceedings,
hearings, investigations, charges, complaints, claims, demands,
injunctions, judgments, orders, decrees, rulings, damages, dues,
penalties, fines, costs, amounts paid in settlement, Liabilities,
obligations, Taxes, liens, losses, expenses, and fees, including court
costs and reasonable attorneys' fees and expenses.
"Affiliate" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange Act provided,
however, for purposes of this Agreement Ivaco, Inc. and its subsidiaries
(other than Seller) shall not be deemed affiliates of Seller.
"Affiliated Group" means any affiliated group within the
meaning of Code Section 1504(a) or any similar group defined under
a similar provision of state, local, or foreign law.
"Applicable Rate" means the corporate base rate of interest
publicly announced from time to time by Nations Bank in St. Louis,
Missouri.
"Assumed Liabilities" means only the obligations of the Seller
under the Contracts (but only to the extent such Contracts are assigned
to the Buyer and excluding any liability or obligation arising out of or
in connection with any breach thereof occurring prior to the Closing)
and the Accrued Vacation Pay.
"Assumption Agreement" means the agreement by the Buyer to
assume the Assumed Liabilities in form and substance as set out in
Exhibit F.
"Basis" means any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction that forms or could form the valid
basis for any specified consequence.
"▇▇▇▇ of Sale" means the ▇▇▇▇ of sale in form and substance as
set out in Exhibit B.
"Buyer's Note" means the non interest bearing promissory note
substantially in the form set out in Exhibit A and in a form as is
reasonably satisfactory to the Buyer's lender and the Seller.
"Closing Inventory Amount" means the aggregate value of the
Inventory and Finished Goods and Production Supplies located at the
Facility on the Closing Date (other than the Excess Inventory),
determined in accordance with the procedures specified in Section 2(g),
based on the following value for the Inventory and Finished Goods and
Production Supplies:
Type of Inventory &
Finished Goods
Value per Ton
Mater Coil $290
Slit Coil $310
Finished Goods $384
Production Supplies Seller's cost
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" means any information exclusively
related to the businesses and affairs of the Business that is not already
generally available to the public.
"Controlled Group of Corporations" has the meaning set forth
in Code Section 1563.
"Conversion Services Agreement" means the agreement in form
and substance set out in Exhibit C.
"Employees" means all persons employed by the Seller at the
Facility, being those persons listed on the Employees Schedule.
"Employee Benefit Plan" means any (a) nonqualified deferred
compensation or retirement plan or arrangement which is an Employee
Pension Benefit Plan, (b) qualified defined contribution retirement plan
or arrangement which is an Employee Pension Benefit Plan, (c)
qualified defined benefit retirement plan or arrangement which is an
Employee Pension Benefit Plan (including any Multiemployer Plan),
or (d) Employee Welfare Benefit Plan or material fringe benefit plan
or program.
"Employee Pension Benefit Plan" has the meaning set forth in
ERISA Section 3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in
ERISA Section 3(1).
"Environmental, Health, and Safety Requirements" shall mean
all federal, state, local and foreign statutes, regulations, ordinances and
other provisions having the force or effect of law, all judicial and
administrative orders and determinations, all contractual obligations and
all common law concerning public health and safety, worker health and
safety, and pollution or protection of the environment, including
without limitation all those relating to the presence, use, production,
generation, handling, transportation, treatment, storage, disposal,
distribution, labeling, testing, processing, discharge, release, threatened
release, control, or cleanup of any hazardous materials, substances or
wastes, chemical substances or mixtures, pesticides, pollutants,
contaminants, toxic chemicals, petroleum products or byproducts,
asbestos, polychlorinated biphenyls, noise or radiation, each as
amended.
"ERISA" means the Employee Retirement Income Security Act
of 1974, as amended.
"Excess Inventory" means any Inventory and Finished Goods
located at or in transit to the Facility on the Closing Date in excess of
the amounts set out below:
Type of Prime Inventory or
Prime Finished Goods
Amount (in Net Tons)
Master coil 4500
Slit coil 2000
Finished goods 4500
and any secondary inventory determined in accordance with Section
2(g).
"Excluded Assets" means:
A.the corporate charter, qualifications to conduct business as a
foreign corporation, arrangements with registered agents relating to
foreign qualifications, taxpayer and other identification numbers, seals,
minute books, stock transfer books, blank stock certificates, and other
documents relating to the organization, maintenance, and existence of
the Seller as a corporation;
B.any of the rights of the Seller under this Agreement (or under
any side agreement between the Seller on the one hand and the Buyer
on the other hand entered into on or after the date of this Agreement);
C.all of the Seller's cash, cash equivalents and marketable
securities;
D.all of the Seller's accounts, notes and other receivables except
to the extent that such accounts relate to work in progress arising from
the Contracts;
E.Excess Inventory;
F.any reject inventory as such terms are defined by industry
custom and practice;
G.any finished goods that were sold by the Seller prior to
Closing but are returned to the Facility or the Buyer at any time after
the Closing Date; and
H.production supplies not primarily related to or used in the
Business including without limitation pipe coupling lubricator and pipe
coating.
"Excluded Contracts" means the contracts identified on the
Excluded Contracts Schedule including, without limitation, any and all
sales representative agreements.
"Excluded Intellectual Property" means any intellectual property
used by Seller in connection with the administrative services provided
by the other locations of Seller to the Facility.
"Excluded Liabilities" means any of Seller's debts, liabilities or
obligations of any nature whatsoever (other than the Assumed
Liabilities and Buyer's other obligations under this Agreement),
whether accrued, absolute or contingent, whether known or unknown,
whether due or to become due and whether related to the Business or
the Acquired Assets, and regardless of when or by whom asserted,
including the following debts, liabilities and obligations:
1.any of Seller's liabilities or obligations under this
Agreement and the Schedules and Exhibits hereto;
2.any of Seller's liabilities or obligations for expenses,
fees or taxes incident to or arising out of the negotiation, preparation,
approval or authorization of this Agreement or the consummation (or
preparation for the consummation) of the transactions contemplated
hereby (including all attorneys' and accountants' fees, brokerage fees
and transfer taxes);
3.any liability or obligation of Seller for Taxes which
are imposed on or measured by the income of Seller for any period
(including interest, penalties and additions to such Taxes, and any
liability or obligation relating to Taxes arising as a result of Seller at
any time being a member of an affiliated group (as defined in Section
1504(a) of the Code));
4.any liability or obligation under or with respect to any
Seller Employee Benefit Plan maintained or contributed to by any
member of the controlled group of companies (as such term is defined
in Section 414 of the Code) of which Seller and/or Parent is or was
a member or with respect to which such controlled group member has
any liability;
5.any liability or obligation (whether absolute, contin-
gent, or otherwise) relating to workers compensation, health care
claims or other similar employee welfare claims which were filed on
or before the Closing Date or relate to claims which arose due to
occurrences or events on or before the Closing Date in relation to the
Employees;
6.any liability or obligation for salary, bonuses or other
payments of any kind to any Employee with respect to periods on or
before the Closing Date;
7.any liabilities or obligations with respect to any
products that were sold or services by the Business that were rendered
by Seller and are subsequently returned to Buyer or otherwise rejected
by the purchaser thereof as a result of a breach of warranty or other
breach of Seller to such purchaser;
8.any of Seller's liabilities or obligations for
indebtedness for borrowed money or indebtedness secured by liens on
the Acquired Asset or Business or guarantees of any of the foregoing;
9.any of Seller's liabilities or obligations relating to,
arising from or in connection with the Business (A) arising by reason
of any violation or alleged violation of any federal, state, local or
foreign law, rule or regulation or any other requirement of any govern-
mental authority, (B) arising from acts, omissions or conditions
occurring or existing prior to the Closing Date under any Environmen-
tal and Safety Requirements or (C) arising by reason of any breach or
alleged breach by Seller of any agreement, contract, lease, license,
commitment, instrument, judgment, order or decree (regardless of when
any such liability or obligation is asserted);
10.any of Seller's liabilities or obligations which Buyer
may become liable for as a result of or in connection with the failure
by Buyer or Seller to comply with any bulk sales or bulk transfers laws
or as a result of any "defacto merger" or "successor-in-interest" theories
of liability;
11.any of Seller's liabilities or obligations for product
liability occurrences (including occurrences relating to the destruction
of property, personal injury or death or any occurrence resulting from
any failure to warn or any deficit in design, engineering or
construction) with respect to products manufactured or services
rendered by the Business on or prior to the Closing Date and any
related claims and litigation arising prior to on or after the Closing
Date whether or not disclosed on the schedules hereto;
12.any of Seller's liabilities or obligations relating to any
other legal action or proceeding arising out of or in connection with
Seller's conduct of the Business or any other conduct of Seller, Seller's
officers, directors, Employees, consultants, agents or advisors on or
prior to the Closing Date, whether or not disclosed on the Schedules
hereto;
13.any of Seller's liabilities or obligations (including,
without limitation, severance or termination pay) relating to the
Employees who are offered employment by Buyer but who decline to
accept such offer except any liability or obligation under the Workers'
Assistance and Retraining Notification Act in connection with the
Business arising from any action by Buyer after the Closing;
14.any liabilities or obligations arising out of or in
connection with any agreements, contracts, purchase orders and other
similar arrangements which are designated on the Excluded Contracts
Schedule;
15.any liabilities or obligations with respect to any of the
Excluded Assets (including, without limitation, under any contracts,
leases, commitments or understandings related thereto).
16.any other liability or obligation of Seller not
expressly within the definition of Assumed Liabilities.
"Fiduciary" has the meaning set forth in ERISA Section 3(21).
"GAAP" means United States generally accepted accounting
principles as in effect from time to time.
"Intellectual Property" means:
A.all patents, patent applications, and patent disclosures and all
inventions (whether patentable or unpatentable and whether or not
reduced to practice) owned by the Seller that are used primarily in the
operation of the Business, if any, and all improvements thereto, and
together with all reissuances, continuations, continuations-in-part,
revisions, extensions, and reexaminations thereof ("Patents and
Inventions");
B.all trademarks, service marks, trade dress, logos, trade names,
and corporate names owned by the Seller that are used primarily in
the operation of the Business, if any, and used together with all
translations, adaptations, derivations, and combinations thereof and
including all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith ("Trademarks and
Trade Names") ;
C.all copyrightable works, all copyrights, and all applications,
registrations, and renewals owned by the Seller that are used primarily
in the operation of the Business, if any ("Copyrights");
D.all mask works and all applications, registrations, and
renewals in connection therewith that are used primarily in the
operation of the Business, if any ("Mask Works");
E.all trade secrets and confidential business information
(including ideas, research and development, know-how, formulas,
compositions, manufacturing and production processes and techniques,
technical data, designs, drawings, specifications, customer and supplier
lists, pricing and cost information, and business and marketing plans
and proposals) owned by the Seller that are used primarily in the
operation of the Business ("Trade Secrets");
F.all computer software (including data and related
documentation) that is used primarily in the operation of the business
as presently conducted and proposed to be conducted at the Facility;
G.all other proprietary rights owned by the Seller that are used
primarily in the operation of the Business; and
H.all copies and tangible embodiments thereof (in whatever
form or medium).
"Inventory and Finished Goods" means all Master Coil and Slit
Coil inventory and finished goods as determined in accordance with
Section 2(g) located at the Facility on the Closing Date excluding the
Excess Inventory.
"Investment" as applied to any Person means (i) any direct or
indirect purchase or other acquisition by such Person of any quotes,
obligations, instruments, stock, securities or ownership interest
(including partnership interests and joint venture interests) of any other
Person and (ii) any capital contribution by such Person to any other
Person.
"Knowledge" means actual knowledge of the officers of Seller
and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, plant manager at the Facility.
"Labor Agreement" means the agreement, dated February 25,
1996, between Seller and the United Steelworkers of America (AFL-CIO-CLC).
"Liability" means any liability or obligation (whether known or
unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or
unliquidated, and whether due or to become due), including any
liability for Taxes.
"Licensed Intellectual Property" means intellectual property
(other than Excluded Intellectual Property) used by Seller in the
operation of the Facility that would be Intellectual Property except that
such property is not used primarily in the operation of the Business.
"Loan Agreement" means the Loan and Security Agreement
with Bank America Business Credit, Inc. and certain other lenders,
dated September 7, 1994, and as amended thereafter.
"Multiemployer Plan" has the meaning set forth in ERISA
Section 3(37)
"Ordinary Course of Business" means the ordinary course of
business consistent with Seller's past custom and practice (including
with respect to quantity and frequency).
"Operating Statements" has the meaning set forth in Section
3(f).
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Liens" means (i) statutory liens for current taxes or
other governmental charges with respect to the Real Property not yet
due and payable or the amount or validity of which is being contested
in good faith by appropriate proceedings by Seller and for which
appropriate reserves have been established in accordance with GAAP;
(ii) mechanics, carriers workers, repairers and similar statutory liens
arising or incurred in the ordinary course of business for amounts
which are not delinquent and which are not, individually or in the
aggregate, material to the Business; (iii) zoning, entitlement, building
and other land use regulations imposed by governmental agencies
having jurisdiction over the Real Property which are not violated by
the current use and operation of the Real Property; and (iv) covenants,
conditions, restrictions, easements, rights of way and other similar
matters of record affecting title to the Real Property which do not
materially impair the occupancy or use of the Real Property for the
purposes for which it is currently used in connection with the Business.
"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a
trust, a joint venture, an unincorporated organization, or a
governmental entity (or any department, agency, or political sub
Facility thereof).
"Production Supplies" means mill coolants, ERW welding
components, material handling, packaging supplies, storeroom supplies,
cutting oil and pipe stenciling ink.
"Prohibited Transaction" has the meaning set forth in ERISA
Section 406 and Code Section 4975.
"Reportable Event" has the meaning set forth in ERISA Section
4043.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act
of 1934, as amended.
"Security Interest" means any mortgage, pledge, lien,
encumbrance, charge, or other security interest.
"Subsidiary" means, with respect to any Person, any
corporation, limited liability company, partnership, association or other
business entity of which (i) if a corporation, a majority of the total
voting power of shares of stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors,
managers, or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof, or (ii) if a limited
liability company, partnership, association or other business entity, a
majority of the partnership or other similar ownership interest thereof
is at the time owned or controlled , directly or indirectly, by any
Person or one or more Subsidiaries of that Person or a combination
thereof. For purposes hereof, a Person or Persons shall be deemed to
have a majority ownership interest in a limited liability company,
partnership, association or other business entity if such Person or
Persons shall be allocated a majority of limited liability company,
partnership, association or other business entity gains or losses or shall
be or control any managing director or general partner of such limited
liability company, partnership, association or other business entity.
"Supply Agreement" means the agreement in form and
substance as set out in Exhibit D.
"Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes
under Code Section 59A), customs duties, capital stock, franchise,
profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated, or
other tax of any kind whatsoever, including any interest, penalty, or
addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including
any schedule or attachment thereto, and including any amendment
thereof.
II.Basic Transaction.
A.Purchase and Sale of Assets. On and subject to the terms
and conditions of this Agreement, the Buyer agrees to purchase from
the Seller, and the Seller agrees to sell, transfer, convey, and deliver to
the Buyer, all of the Acquired Assets free and clear of all Security
Interests other than Permitted Liens at the Closing for the consideration
specified below in this Section 2.
B.Assumption of Liabilities. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to assume and become
responsible for all of the Assumed Liabilities at the Closing. The
Buyer will not assume or have any responsibility, however, with
respect to any of the Excluded Liabilities and nothing contained in this
Agreement will deem the Buyer liable for any obligation or Liability
of the Seller except for the Assumed Liabilities.
C.Purchase Price. The purchase price for the Acquired Assets
(the "Purchase Price") shall be equal to $ 11,373,000 less the amount,
if any, by which the Closing Inventory Amount is less than $3,653,000
and less the amount of Accrued Vacation Pay.
D.Preliminary Purchase Price. At closing the Buyer shall pay
to the Seller an amount (the "Preliminary Purchase Price") equal to the
Purchase Price as estimated in good faith by the Buyer on the basis of
an estimate of the value of the Closing Inventory Amount ("Estimated
Inventory Amount") and the Accrued Vacation Pay ("Estimated
Accrued Vacation Pay") jointly prepared in good faith by the Buyer
and the Seller not less than 3 days before Closing.
E.Payment of Preliminary Purchase Price. At Closing the
Buyer will pay to the Seller the Preliminary Purchase Price by:
1.the Buyer Note with a principal amount of $1,653,000;
and
▇.▇▇▇▇ in the sum of the remainder of the Preliminary
Purchase Price payable by wire transfer or delivery of other
immediately available funds.
▇.▇▇▇▇ Closing Adjustment to Purchase Price. Within 30
days after the Closing Date, the Buyer shall deliver to the Seller a
determination of the Closing Inventory Amount and Accrued Vacation
Pay prepared in good faith and, with respect to the Closing Inventory
Amount, in accordance with paragraph (g) below, as of the Closing
Date. During the period immediately following Seller's receipt of the
Buyer's determination of the Closing Inventory Amount and Accrued
Vacation Pay and until they are finally determined pursuant to this
Section 2(f), Seller and its representatives and agents shall be permitted
to review Buyer's books and records and working papers related to
Buyer's determination of the Closing Inventory Amount and Accrued
Vacation Pay. The Buyer's determination of the Closing Inventory
Amount and Accrued Vacation Pay shall become final and binding
upon the parties 30 days after Seller's receipt thereof, unless Seller
gives written notice of its disagreement ("Notice of Disagreement") to
Buyer prior to such date. Any Notice of Disagreement shall specify in
reasonable detail the nature of any disagreement so asserted and shall
only include disagreements based upon the Closing Inventory Amount
and Accrued Vacation Pay not being calculated in accordance with this
Agreement. If a timely Notice of Disagreement is received by Buyer,
then the determination of the Closing Inventory Amount and Accrued
Vacation Pay (as revised in accordance with clause (x) or (y) below)
shall become final and binding upon the parties on the earliest of (x)
the date the parties hereto resolve in writing any differences they have
with respect to the matters specified in the Notice of Disagreement or
(y) the date all matters in dispute are finally resolved in writing by the
Accounting Firm specified below. During the 30 days following
delivery of a Notice of Disagreement, Buyer and Seller shall seek in
good faith to resolve in writing any differences which they may have
with respect to the matters specified in the Notice of Disagreement.
During such period, Buyer shall be permitted to review Seller's books
and records and working papers relating to the Notice of Disagreement.
At the end of such 30-day period, Buyer and Seller shall submit to a
mutually acceptable accounting firm (the "Accounting Firm") for
review and resolution of all matters which remain in dispute which
were properly included in the Notice of Disagreement, and the
Accounting Firm shall make a final determination of the Closing
Inventory Amount and the Purchase Price in accordance with the terms
and conditions set forth in this Agreement. If Buyer and Seller are
unable to mutually agree on an Accounting Firm, Buyer and Seller
shall select a "big-six" Accounting Firm by lot (after excluding one
big-six accounting firm selected by each of Buyer and Seller). The
Closing Inventory Amount and/or the Accrued Vacation Pay as
determined in accordance with this Section 2(h) shall become final and
binding on the parties on the date the Accounting Firm delivers its
final resolution in writing to the parties. The fees and expenses of the
Accounting Firm shall be shared equally by Buyer and Seller.
G.Inventory Count; determination of Inventory and
Finished Goods. For purposes of determining the Inventory and
Finished Goods, preparing the Closing Inventory Amount and
determining the Purchase Price:
1.Buyer shall as soon as reasonably practical after the
Closing Date take a physical count of all Inventory and Finished Goods
included in the Acquired Assets as of the Closing and the Seller shall
be entitled to have representatives observe such physical count;
2.all inventory and finished goods of the type to be
included within the definition of Inventory and Finished Goods that has
been manufactured within 6 months of the Closing Date shall be
deemed Inventory and Finished Goods; and
3.all inventory and finished goods manufactured at any
time prior to 6 months of the Closing Date shall only be treated as
Inventory and Finished Goods upon inspection and the good faith
agreement by both Parties that such inventory or finished goods is
prime inventory or prime finished goods, as such terms are defined by
custom and practice within the industry; and
4.all inventory and finished goods not agreed by the
Parties to be Inventory and Finished Goods pursuant to paragraph (iii)
above shall be deemed secondary inventory or finished goods.
▇.▇▇▇▇▇ adjustment. The parties agree that if the Closing
Inventory Amount is less than the Estimated Inventory Amount and/or
the Accrued Vacation Pay is more than the Estimated Accrued
Vacation Pay, within ten business days after both such amounts have
become final and binding on the parties hereunder, the Purchase Price
shall be reduced by the amount of such deficiency or excess, as
applicable, and the Seller shall pay to the Buyer the amount of such
deficiency or excess, as applicable, together with interest thereon at the
Applicable Rate calculated on the basis of the actual number of days
elapsed over 365, from the Closing Date to the date of payment. If the
Closing Inventory Amount exceeds the Estimated Inventory Amount
and/or the Accrued Vacation Pay is less than the Estimated Accrued
Vacation Pay, within 10 business days after both amounts have become
final and binding upon the parties, the Purchase Price shall be
increased (but not to exceed $11,373,000) by the amount of such
excess or deficiency, as applicable, and the Buyer shall pay to the
Seller the amount of such excess or deficiency, as applicable, together
with interest thereon at the Applicable Rate calculated on the basis of
the actual number of days elapsed over 365, from the Closing Date to
the date of payment.
I.The Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of ▇▇▇▇▇
▇▇▇▇ LLP in St. Louis, Missouri, commencing at 9:00 a.m. local time
on the business day following the satisfaction or waiver of all
conditions precedent to closing set out in Section 6 or such other date
as the Parties may mutually determine (the "Closing Date") provided,
however, that the Parties shall use reasonable best efforts to close on
or before January 31, 1997.
▇.▇▇ Closing the Seller will deliver to the Buyer:
1.the duly executed Supply Agreement and Conversion
Services Agreement;
2.▇▇▇▇ of Sale;
3.an executed Special Warranty Deed for each parcel of
Real Property in form and substance as set out in Exhibit E; and
4.an executed quitclaim deed covering any surveyor's
legal description differing from that set forth in the deed by which
Seller acquired title to the Real Property; and
5.such other instruments of assignment and conveyance
necessary to transfer and convey the Acquired Assets as reasonably
may be requested by the Buyer (together with the items referred to in
(ii), (iii) and (iv) above, the "Transfer Documents").
▇.▇▇ Closing the Buyer will deliver to the Seller:
1.the consideration specified in Section 2(c) above;
2.the duly executed Supply Agreement and Conversion
Services Agreement; and
3.the duly executed Assumption Agreement.
III.Representations and Warranties.
The Seller represents and warrants to the Buyer that the statements
contained in this Section 3 are correct and complete as of the date of
this Agreement.
A.Organization of the Seller. The Seller is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
B.Authorization of Transaction. The Seller has full corporate
power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. Without limiting the generality of
the foregoing, the board of directors of the Seller have duly authorized
the execution, delivery, and performance of this Agreement by the
Seller and no other corporate proceedings on its part or its shareholders
or Affiliates is necessary to authorize the execution, delivery or
performance of this Agreement. This Agreement constitutes the valid
and legally binding obligation of the Seller, enforceable in accordance
with its terms and conditions.
C.Noncontravention.
1.Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated
hereby (including the assignments and assumptions referred to in
Section 2 above), will:
a.violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction
of any government, governmental agency, or court to which the Seller,
or any of the Acquired Assets, is subject or any provision of the
charter or bylaws of the Seller; or
b.conflict with, result in a breach of, constitute
a default under, result in the acceleration of, create in any party the
right to accelerate, terminate, modify, or cancel, or require any notice,
or consent, under any agreement, contract, lease, license, instrument,
or other arrangement to which the Seller is a party or by which it is
bound or to which any of the Acquired Assets is subject (or result in
the imposition of any Security Interest upon any of the Acquired
Assets) including, without limitation, the Contracts.
c.subject to execution of Amendment Number 9
to the Loan Agreement (the "Loan Amendment"), require the Seller to
give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in
order for the Parties to consummate the transactions contemplated by
this Agreement (including the assignments and assumptions referred to
in Section 2 above).
2.the Permits and Licenses Schedule lists all approvals,
permits, Licenses, orders, registrations, certificates, variances and
similar rights obtained from governments and government agencies
necessary for the operation of the business presently conducted at the
Facility.
D.Brokers' Fees. The Seller has no Liability or obligation to
pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which
the Buyer could become liable or obligated.
E.Title to Assets. Except for the Permitted Liens and liens
granted pursuant to the Loan Agreement, the Seller has marketable title
to all of the Acquired Assets, free and clear of any Security Interest or
restriction on transfer.
F.Operating Statements. Attached hereto as Exhibit G are the
following financial statements (collectively the "Operating
Statements"):
1.unaudited statements of operation for the fiscal years
ended December 31, 1993, December 31, 1994 and December 31, 1995
(the "Most Recent Fiscal Year End") for the Business; and
2.unaudited statements of operation for the 11 months
ended November 30, 1996 for the Business (the "Most Recent
Operating Statements").
The Operating Statements are consistent with the books
and records of Seller; provided that the Most Recent Operating
Statements are subject to normal year end adjustments.
▇.▇▇▇▇▇▇ Subsequent to Most Recent Fiscal Year End.
Except as set forth in the Most Recent Operating Statements, since the
Most Recent Fiscal Year End, there has not been any material adverse
change in the financial condition, operations, results of operations of
the Business or to the Knowledge of the Seller the future prospects of
the Business. Without limiting the generality of the foregoing, since
that date and to the extent that the matters below relate to this
Agreement, the Facility, the Business or the Acquired Assets:
1.the Seller has not sold, leased, transferred, or assigned
any of its assets, tangible or intangible, other than for a fair
consideration in the Ordinary Course of Business;
▇.▇▇ party (including the Seller) has accelerated,
terminated, modified, or cancelled any agreement, contract, lease, or
license (or series of related agreements, contracts, leases, and licenses)
relating to the Business involving more than $25,000 to which the
Seller is a party or bound;
3.the Seller has not imposed any Security Interest upon
any of the Acquired Assets other than pursuant to the Loan Agreement;
4.the Seller has not delayed or postponed the payment
of accounts payable arising from the Contracts outside the Ordinary
Course of Business;
5.the Seller has not made any capital investments in, any
loan to, or any acquisition of the securities or assets of , any other
Person (or series of related capital investments, loans, and acquisitions)
either involving more than $25,000 singly or $50,000 in the aggregate.
6.the Seller has not cancelled, compromised, waived, or
released any right or claim (or series of related rights and claims)
either involving more than $25,000 or outside the Ordinary Course of
Business arising from the Contracts;
7.the Seller has not granted any license or sublicense of
any rights under or with respect to any Intellectual Property;
8.the Facility has not experienced any damage,
destruction, or loss (whether or not covered by insurance) to its
property in excess of $25,000;
9.other than the Labor Agreement, the Seller has not
entered into any employment contract or collective bargaining
agreement, written or oral, or modified the terms of any existing such
contract or agreement;
10.other than the Labor Agreement, the Seller has not
granted any increase in the base compensation of any of the Employees
outside the Ordinary Course of Business;
11.other than the Labor Agreement, the Seller has not
adopted, amended, modified, or terminated any bonus, profit-sharing,
incentive, severance, or other plan, contract, or commitment for the
benefit of any Employee), or taken any such action with respect to any
other Employee Benefit Plan;
12.the Seller has not made or pledged to make any
charitable or other capital contribution outside the Ordinary Course of
Business;
13.other than payments pursuant to the Loan Agreement
or in the Ordinary Course of Business the Seller has not paid any
amount to any third party with respect to any Liability or obligation
(including any costs and expenses the Seller has incurred or may incur
in connection with this Agreement and the transactions contemplated
hereby) which would not constitute an Assumed Liability if in
existence as of the Closing;
14.other than the Labor Agreement, there has not been
any other material occurrence, event, incident, action, failure to act, or
transaction outside the Ordinary Course of Business involving the
Facility; and
15.the Seller has not committed to any of the foregoing.
H.Undisclosed Liabilities. The Seller does not have any
Liability related to or incurred in connection with the Business (and to
the Knowledge of Seller there is no Basis for any present or future
action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand against it giving rise to any Liability), except for
Liabilities which have arisen in the Ordinary Course of Business (none
of which results from, arises out of, relates to, is in the nature of, or
was caused by any breach of contract, breach of warranty, tort,
infringement, or violation of law) or under the Loan Agreement.
▇.▇▇▇▇▇ Compliance. The Facility and the Seller in connection
with the Business are in compliance in all material respects with all
applicable laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of federal,
state, local, and foreign governments (and all agencies thereof), and no
action, suit, proceeding, hearing, investigation, charge, complaint,
claim, demand, or notice has been filed or commenced against any of
them alleging any failure so to comply.
▇.▇▇▇ Matters.
1.The Seller has timely filed all federal, state, local and
foreign income, information and other Tax returns which are required
to be filed with respect to its business, activities, properties, employees
or ownership where failure to file would have a material adverse effect
on the Acquired Assets.
2.All such returns are true, complete and accurate in all
material respects, and such filings accurately reflect the Tax liabilities
of Seller.
3.All Taxes, assessments and other governmental charges
imposed upon Seller, or upon any of the assets, income or franchises
of Seller, have been timely paid or, if not yet payable, shall be timely
paid and are adequately accrued on Seller's books and records where
failure to pay would have a material adverse effect on the Acquired
Assets.
4.There are no actual or proposed Tax deficiencies,
assessments or adjustments with respect to Seller or any assets or
operations of Seller affecting the Acquired Assets.
5.There are no ongoing or pending Tax audits by any
taxing authority against Seller directly affecting the Acquired Assets.
6.None of the Acquired Assets are subject to any
agreement relating to the allocation or payment of Taxes.
K.Real Property.
1.The Real Property Schedule lists and describes briefly
all real property used primarily in the operation of the Business. With
respect to each such parcel of owned real property:
a.the Seller has good and marketable title to the
parcel of real property, free and clear of any Security Interest,
easement, covenant, or other restriction, except for Permitted Liens;
b.there are no pending or, to the Knowledge of
the Seller, threatened condemnation proceedings, lawsuits, or
administrative actions relating to the property, or other matters
affecting adversely the current use, occupancy, or value thereof;
c.Seller has received all governmental licenses
and permits required to own and operate the real property in
accordance with applicable laws, rules, and regulations subject to
Permitted Liens;
d.there are no leases, subleases, licenses,
concessions, or other agreements, written or oral, granting to any party
or parties the right of use or occupancy of any portion of the parcel of
real property other than such as may be included in the Permitted
Liens;
e.there are no outstanding options or rights of
first refusal to purchase the parcel of real property, or any portion
thereof or interest therein;
f.there are no parties (other than the Seller and
beneficiaries of easement access included in the Permitted Liens) in
possession of the parcel of real property;
g.all facilities located on the parcel of real
property are supplied with utilities and other services necessary for the
continued, current operation of such facilities, including gas, electricity,
water, telephone, sanitary sewer, and storm sewer, as required via
public roads or via permanent, irrevocable, appurtenant easements
benefitting the parcel of real property;
h.the real property (including any noncontiguous
parcels) abuts on and has direct vehicular access to a public road, or
has access to a public road via a permanent, irrevocable, appurtenant
easement benefitting the parcel of real property, and access to the
property is provided by paved public right-of-way with adequate curb
cuts available; and
2.There is no real property leased or subleased to the
Seller which real property is used primarily in the operation of the
Business other than that certain Lease Agreement dated January 1,
1996 between Bipco, Ltd., as Lessor, and Seller, as Lessee.
L.Intellectual Property.
1.Other than the Excluded Intellectual Property, the
Intellectual Property and the Licensed Intellectual Property comprise
all of the intellectual property necessary for the conduct of the Business
as currently conducted and:
2.Other than third party software licensed to Seller, Seller
owns and possesses
all right, title and interest in, to and under the Intellectual Property, and
no claim by any third party contesting the validity, enforceability, use
or ownership of any of the Intellectual Property has been made, is
currently outstanding or is (to Seller's knowledge) threatened;
3.Seller owns or has the valid right to use all Intellectual
Property necessary for
the operation of the Business as currently conducted;
4.Seller has not received any notices of, nor is it aware of
any facts which
indicate a likelihood of, any infringement or misappropriation by, or
conflict with, any third party with respect to the rights set forth in the
attached Intellectual Property Schedule including, without limitation,
any demand or request that Seller license rights from a third party; and
5.Seller is not aware of any infringement, misappropriation or
conflict which
will occur as a result of the continued operation of the Business as
currently conducted or as currently proposed to be conducted.
6.All Intellectual Property to be assigned by Seller are
or shall be properly assigned or licensed to Seller at the ▇▇▇▇ ▇▇▇▇▇▇
assigns such rights to Buyer. The transactions contemplated by this
Agreement shall have no material adverse effect on any of the
Intellectual Property. To the Knowledge of Seller, Seller has taken all
necessary and desirable action to protect the Intellectual Property and
shall continue to maintain those rights prior to and as of Closing so as
to not adversely affect the validity or enforcement of such Intellectual
Property.
7.The Intellectual Property does not consist of any
Patents and Inventions, Trademarks and Trade Names, Copyrights or
Mask Works.
M.Tangible Assets. The Seller owns or leases all buildings,
machinery, equipment, and other tangible assets necessary for the
conduct of the Business. The tangible assets included in the Acquired
Assets are in all material respects in good operating condition and
repair (subject to normal wear and tear), and are suitable for the
purposes for which it presently is used other than the idle Mechanical
ERW Mill. Other than the administrative services provided by Seller
from locations other than the Facility ("Administrative Services") and
the Licensed Intellectual Property, the Acquired Assets include all of
the assets whether tangible or intangible, real or personal, that are
necessary for the conduct of the Business as currently conducted. The
Seller owns, or leases under valid leases, all buildings, machinery,
equipment and other tangible assets used in the conduct of the Business
in conformity with past practices, and all such assets have been
installed and maintained in all material respects in accordance with all
applicable laws, regulations and ordinances.
N.Inventory. The inventory of the Business included in the
Acquired Assets consists of raw materials and supplies, manufactured
parts, goods in process, and finished goods, all of which is
merchantable and fit for the purpose for which it was procured or
manufactured, and none of which is damaged or defective.
O.Contracts.
1.The Contracts Schedule lists the following contracts
and other agreements to which the Seller is a party and which
primarily relate to, or are used primarily in, the operation of the
Business:
a. any agreement (or group of related agreements)
for the lease of personal property to or from any Person providing for
lease payments in excess of $25,000 per annum and any agreement for
the lease of real property;
b.any agreement (or group of related agreements)
for the purchase or sale of raw materials, commodities, supplies,
products, or other personal property, or for the furnishing or receipt of
services, the performance of which will extend over a period of more
than one year, result in a material loss to the Business or the Seller, or
involve consideration in excess of $25,000;
c.any agreement concerning a partnership or joint
venture relating to the Business;
d.any agreement (or group of related agreements)
under which it has created, incurred, assumed, or guaranteed any
indebtedness for borrowed money, or any capitalized lease obligation,
in excess of $25,000 or under which it has imposed a Security Interest
on any of the Acquired Assets, tangible or intangible other than the
Loan Agreement;
e.any agreement concerning confidentiality or
noncompetition with respect to the Business;
f. any profit sharing, stock option, stock
purchase, stock appreciation, deferred compensation, severance, or
other material plan or arrangement for the benefit of the current or
former Employees of the Seller;
g.any collective bargaining agreement;
h.any agreement for the employment of any
individual with respect to the Business on a full-time, part-time,
consulting, or other basis providing annual compensation in excess of
$50,000 or providing severance benefits;
i.any agreement under which it has advanced or
loaned any amount to any Employees of the Business outside the
Ordinary Course of Business;
j.any agreement under which the consequences
of a default or termination could have a material adverse effect on the
business, financial condition, operations, results of operations, or future
prospects of the Business; or
k.any other agreement (or group of related
agreements) relating to the Business the performance of which involves
consideration in excess of $25,000.
2.The Seller has delivered to the Buyer a correct and
complete copy of each written agreement listed in the Contracts
Schedule amended to date and a written summary setting forth the
terms and conditions of each oral agreement referred to therein. In
respect to each such agreement:
a.the agreement is legal, valid, binding,
enforceable, and in full force and effect;
b.except for the consents disclosed on the
Contracts Schedule which are required and not obtained, the agreement
will continue to be legal, valid, binding, enforceable, and in full force
and effect on identical terms following the consummation of the
transactions contemplated hereby (including the assignments and
assumptions referred to in Section 2 above);
c.Seller is not and, to the Knowledge of Seller,
the other party to such agreement is not in breach or default, and no
event has occurred which with notice or lapse of time would constitute
a breach or default, or permit termination, modification, or
acceleration, under the agreement; and
d.Seller has not and, to the Knowledge of Seller,
the other party to such agreement has not repudiated any provision of
the agreement.
▇.▇▇▇▇▇▇ of Attorney. There are no outstanding powers of
attorney executed on behalf of the Seller with respect to the Business.
▇.▇▇▇▇▇▇▇▇▇. True, complete and correct copies of each
insurance policy maintained by the Seller with respect to the Business
have been made available to the Buyer. All of the Seller's insurance
policies are in full force and effect, and the Seller is not in default with
respect to its obligations under any of such insurance policies. If
between the date hereof and the Closing Date, the Seller desires to alter
any insurance policy, the Seller shall obtain Buyer's prior written
consent to any such change.
R.Litigation. The Litigation Schedule sets forth each instance
in which the Seller or any of the Acquired Assets:
▇.▇▇ subject to any outstanding injunction, judgment,
order, decree, ruling, or charge arising from or in relation to the
operation of the Business or Acquired Assets; or
▇.▇▇ a party or, to the Knowledge of the Seller, is
threatened to be made a party to any action, suit, proceeding, hearing,
or investigation of, in, or before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign jurisdiction
or before any arbitrator. None of the actions, suits, proceedings,
hearings, and investigations set forth in the Litigation Schedule could
result in any material adverse change in the business, financial
condition, operations or results of operations of the Business.
S.Product Warranty. Each product manufactured, sold,
leased, or delivered by the Business has been in conformity with all
applicable contractual commitments and all express and implied
warranties, and the Seller has no Liability (and, to the Knowledge of
Seller, there is no Basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand
against it giving rise to any Liability) for replacement or repair thereof
or other damages in connection therewith. No product of the Business
manufactured, sold, leased, or delivered by the Seller is subject to any
guaranty, warranty, or other indemnity beyond the applicable standard
terms and conditions of sale or lease. The Standard Terms Schedule
includes copies of the standard terms and conditions of sale or lease by
the Facility and the Seller (containing applicable guaranty, warranty,
and indemnity provisions).
T.Product Liability. The Seller has no Liability (and, to the
Knowledge of Seller, there is no Basis for any present or future action,
suit, proceeding, hearing, investigation, charge, complaint, claim, or
demand against it giving rise to any Liability) arising out of any injury
to individuals or property as a result of the ownership, possession, or
use of any product of the Business manufactured, sold, leased, or
delivered by the Seller.
U.Employees. To the Knowledge of the Seller, no executive,
key employee, or group of Employees has any plans to terminate
employment with the Seller. Except for the Labor Agreement, the
Seller in connection with the Business is not a party to or bound by
any collective bargaining agreement, nor has any of them experienced
any strikes, grievances or other labor disputes. To the Knowledge of
the Seller, it has not, within the prior 2 years of the date of this
Agreement, received any charge or complaint of any unfair labor
practice at the Facility or otherwise in the operation of the Business
other than during the period of the negotiation of the Labor Agreement
(copies of which have been delivered to Buyer). To the Knowledge of
the Seller it is unaware of any pending or threatened charge or
complaint alleging unfair labor practices. The Seller and its
Subsidiaries has no Knowledge of any organizational or decertification
effort presently being made or threatened with respect to the
Employees.
V.Employee Benefits.
1.The Employee Benefit Plan Schedule lists each
Employee Benefit Plan that the Seller maintains or to which the Seller
contributes in relation to the Employees.
2.Each such Employee Benefit Plan (and each related
trust, insurance contract, or fund) complies in all material respects in
form and in operation in all respects with the applicable requirements
of ERISA, the Code, and other applicable laws.
3.The requirements of Part 6 of Subtitle B of Title I of
ERISA and of Code Section 4980B have in all material respects been
met with respect to each such Employee Benefit Plan which is an
Employee Welfare Benefit Plan.
4.All contributions (including all employer contributions
and employee salary reduction contributions) which are due have been
paid to each such Employee Benefit Plan which is an Employee
Pension Benefit Plan and all contributions for any period ending on or
before the Closing Date which are not yet due have been paid to each
such Employee Pension Benefit Plan or accrued in accordance with the
past custom and practice of the Seller. All premiums or other payments
for all periods ending on or before the Closing Date have been paid
with respect to each such Employee Benefit Plan which is an Employee
Welfare Benefit Plan.
5.Each such Employee Benefit Plan which is an
Employee Pension Benefit Plan meets the requirements of a "qualified
plan" under Code Section 401(a) and has received, within the last two
years, a favorable determination letter from the Internal Revenue
Service.
6.The market value of assets under each such Employee
Benefit Plan which is an Employee Pension Benefit Plan (other than
any Multiemployer Plan and the Laclede Salaried Employees' Pension
Plan) equals or exceeds the present value of all vested and nonvested
Liabilities thereunder determined in accordance with PBGC methods,
factors, and assumptions applicable to an Employee Pension Benefit
Plan terminating on the date for determination.
7.With respect to each Employee Benefit Plan that the
Seller maintains or ever has maintained or to which it contributes, ever
has contributed, or ever has been required to contribute in relation to
the Employees:
▇.▇▇ such Employee Benefit Plan which is an
Employee Pension Benefit Plan (other than any Multiemployer Plan)
has been completely or partially terminated or been the subject of a
Reportable Event as to which notices would be required to be filed
with the PBGC. No proceeding by the PBGC to terminate any such
Employee Pension Benefit Plan (other than any Multiemployer Plan)
has been instituted or, to the Knowledge of the Seller and the directors
and officers (and employees with responsibility for employee benefits
matters) of the Seller and its Subsidiaries, threatened.
b.There have been no Prohibited Transactions
with respect to any such Employee Benefit Plan. No Fiduciary has any
Liability for breach of fiduciary duty or any other failure to act or
comply in connection with the administration or investment of the
assets of any such Employee Benefit Plan. No action, suit, proceeding,
hearing, or investigation with respect to the administration or the
investment of the assets of any such Employee Benefit Plan (other than
routine claims for benefits) is pending or, to the Knowledge of the
Seller and the directors and officers (and employees with responsibility
for employee benefits matters) of the Seller and its Subsidiaries,
threatened. None of the Seller and the directors and officers (and
employees with responsibility for employee benefits matters) of the
Seller and its Subsidiaries has any Knowledge of any Basis for any
such action, suit, proceeding, hearing, or investigation.
c.The Seller has not incurred, and none of the
directors and officers (and employees with responsibility for employee
benefits matters) of the Seller and its Subsidiaries has any reason to
expect that the Seller will incur, any Liability to the PBGC (other than
PBGC premium payments) or otherwise under Title IV of ERISA
(including any withdrawal Liability) or under the Code with respect to
any such Employee Benefit Plan which is an Employee Pension Benefit
Plan.
8.With respect to each Employee Benefit Plan that the
Seller maintains or ever has maintained or to which it contributes, ever
has contributed, or ever has been required to contribute in relation to
the Employees:
a.The Seller does not contribute to, ever has
contributed to, or ever has been required to contribute to any
Multiemployer Plan or has any Liability (including withdrawal
Liability) under any Multiemployer Plan.
b.The Seller does not maintain or ever has
maintained or contributes, ever has contributed, or ever has been
required to contribute to any Employee Welfare Benefit Plan providing
medical, health, or life insurance or other welfare-type benefits for
current or future retired or terminated employees, their spouses, or their
dependents (other than in accordance with Code Section 4980B).
W.Guaranties. The Seller in connection with the Business is
not a guarantor or otherwise is liable for any Liability or obligation
(including indebtedness) of any other Person.
X.Environmental, Health, and Safety Matters.
1.The Seller is in compliance in all material respects
with all Environmental, Health and Safety Requirements with respect
to the operation of the Business.
2.Without limiting the generality of the foregoing, the
Seller has obtained and complied with, and is in compliance with, in
all material respects, all permits, licenses and other authorizations that
are required pursuant to Environmental, Health and Safety
Requirements for the occupation of the Facility and the operation of
the Business: a list of all such permits, licenses and other
authorizations is set forth in the Permits and Licenses Schedule.
3.The Seller has not received any written or oral notice,
report or other information regarding any actual or alleged violation of
Environmental, Health, and Safety Requirements, or any liabilities or
potential liabilities (whether accrued, absolute, contingent, unliquidated
or otherwise), including any investigatory, remedial or corrective
obligations, relating to the operation of the Business arising under
Environmental, Health, and Safety Requirements.
4.None of the following exists at the Facility:
a.underground storage tanks;
b.asbestos-containing material in any form or
condition;
c.materials or equipment containing
polychlorinated biphenyls; or
d.landfills, surface impoundments, or hazardous
waste disposal areas.
5.With respect to the operations of the Business, the
Seller at the Facility has not treated, stored, disposed of, arranged for
or permitted the disposal of, transported, handled, or released any
substance, including without limitation any hazardous substance, or
owned or operated any property or facility (and no such property or
facility is contaminated by any such substance) in a manner that has
given or would give rise to material liabilities, including any liability
for response costs, corrective action costs, personal injury, property
damage, natural resources damages or attorney fees, pursuant to the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended ("CERCLA"), the Solid Waste Disposal Act,
as amended ("SWDA") or any other Environmental, Health, and Safety
Requirements.
6.Neither this Agreement nor the consummation of the
transaction that is the subject of this Agreement will result in any
obligations for site investigation or cleanup, or notification to or
consent of government agencies or third parties, pursuant to any of the
so-called "transaction-triggered" or "responsible property transfer"
Environmental, Health, and Safety Requirements.
7.Neither the Seller nor its predecessors or Affiliates has,
either expressly or by operation of law, assumed or undertaken any
liability, including without limitation any obligation for corrective or
remedial action, of any other Person relating to Environmental, Health,
and Safety Requirements with respect to the operation of the Business.
8.With respect to the Seller's operation of the Business
no facts, events or conditions relating to the facilities, properties or
operations of the Seller, or any of its respective predecessors or
Affiliates will prevent, hinder or limit continued compliance in all
material respects with Environmental, Health, and Safety Requirements,
give rise to any investigatory, remedial or corrective obligations
pursuant to Environmental, Health, and Safety Requirements, or give
rise to any other material liabilities (whether accrued, absolute,
contingent, unliquidated or otherwise) pursuant to Environmental,
Health, and Safety Requirements, including without limitation any
relating to onsite or offsite releases or threatened releases of hazardous
materials, substances or wastes, personal injury, property damage or
natural resources damage.
Y.Certain Business Relationships with the Business. Other
than the Administrative Services and the supply of raw materials to the
Business, neither the Seller nor any of its Affiliates or employees
(other than the Employees) has provided services to the Business or
been involved in any business arrangement or relationship with the
Business within the past 12 months.
Z.Disclosure. To the Knowledge of Seller, the representations
and warranties contained in this Section 3 do not contain any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements and information contained in this
Section 3 not misleading.
AA.Investment. The Seller
1.understands that the Buyer Note has not been, and will
not be, registered under the Securities Act, or under any state securities
laws, and is being offered and sold in reliance upon federal and state
exemptions for transactions not involving any public offering;
▇.▇▇ acquiring the Buyer Note solely for its own account
for investment purposes, and not with a view to the distribution
thereof;
▇.▇▇ a sophisticated investor with knowledge and
experience in business and financial matters;
4.has received certain information concerning the Buyer
and has had the opportunity to obtain additional information as desired
in order to evaluate the merits and the risks inherent in holding the
Buyer Note;
▇.▇▇ able to bear the economic risk and lack of liquidity
inherent in holding the Buyer Note; and
▇.▇▇ an Accredited Investor for the reasons set forth in
the Buyer's Note.
IV.Representations and Warranties of the Buyer. The Buyer
represents and warrants to the Seller that the statements contained in
this Section 4 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for
the date of this Agreement throughout Section 4).
A.Organization of the Buyer. The Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
B.Authorization of Transaction. The Buyer has full power
and authority (including full corporate power and authority) to execute
and deliver this Agreement and to perform its obligations hereunder.
This Agreement constitutes the valid and legally binding obligation of
the Buyer, enforceable in accordance with its terms and conditions.
C.Noncontravention. Neither the execution and the delivery
of this Agreement, nor the consummation of the transactions
contemplated hereby (including the assignments and assumptions
referred to in Section 2 above), will (i) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or
other restriction of any government, governmental agency, or court to
which the Buyer is subject or any provision of its charter or bylaws or
(ii) conflict with, result in a breach of, constitute a default under, result
in the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to
which the Buyer is a party or by which it is bound or to which any of
its assets is subject. The Buyer does not need to give any notice to,
make any filing with, or obtain any authorization, consent, or approval
of any government or governmental agency in order for the Parties to
consummate the transactions contemplated by this Agreement
(including the assignments and assumptions referred to in Section 2
above).
D.Brokers' Fees. The Buyer has no Liability or obligation to
pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which
the Seller could become liable or obligated.
V.Pre-Closing Covenants. The Parties agree that in the period
between the execution of this Agreement and Closing:
A. General. Each of the Parties will use its reasonable best
efforts to take all action and to do all things necessary in order to
consummate and make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the Closing
conditions set forth in Section 6 below).
B.Notices and Consents. The Seller will give any notices to
third parties, and the Seller will use its reasonable best efforts to obtain
any third party consents, that the Buyer reasonably may request in
connection with the matters referred to in Section 3(c) above. Each of
the Parties will give any notices to, make any filings with, and use its
reasonable best efforts to obtain any authorizations, consents, and
approvals of governments and governmental agencies in connection
with the matters referred to in Section 3(c) and Section 4(c) above.
C.Operation of Business. The Seller will:
1.conduct the Business and run the Facility in the
Ordinary Course of Business;
2.maintain the Acquired Assets in good working
condition;
▇.▇▇▇ all accounts payable, purchase inventory, spares,
parts and supplies and collect all accounts receivable arising out of the
business run at the Facility in the Ordinary Course of Business;
4.make capital and maintenance expenditures in the
Ordinary Course of Business;
5.use best endeavors to maintain the Facility's business,
Employees, customers, sales order backlog, assets and operations as
an ongoing business and in the Ordinary Course of Business; and
6.use reasonable efforts to implement the previously
announced October 1, 1996 price increase as set out in Exhibit H
attached hereto.
D.Preservation of Business. The Seller will not:
1.enter into any transaction in respect of the Business or
Acquired Assets other than in the Ordinary Course of Business;
2.sell, transfer or otherwise dispose of any of the
Acquired Assets (other than sales of inventory and finished product in
the Ordinary Course of Business);
3.grant any increase in compensation or benefits of any
Employee;
4.enter into any transaction between the Facility and the
Seller or any of the Seller's Affiliates except in the Ordinary Course
of Business;
5.take any action, engage in any practice or enter into
any transaction which would require disclosure under Section 3(g); or
6.commit or enter into any agreement to do any of the
foregoing.
E.Full Access. The Seller will permit representatives of the
Buyer to have full access at all reasonable times, and in a manner so
as not to interfere with the normal business operations of the Business
to all premises, properties, personnel, books, records (including Tax
records), contracts, and documents of or pertaining to the Business.
F.Exclusivity. The Seller will (and the Seller will cause any
Affiliate, employee, officer, director, shareholder, agent or other Person
acting on its behalf to):
1.cease and cause to be terminated any and all
discussions with any Person regarding the possible sale of all the
Business or any of the Acquired Assets (whether by sale of stock,
assets, merger, reorganization, liquidation, dissolution or similar
transactions) (a "Company Transaction");
2.only provide information concerning the Facility and
the Acquired Assets to Persons in the Ordinary Course of Business if
the Seller has no reason to believe that the information may be utilized
to evaluate a possible Company Transaction;
3.not solicit, initiate, or encourage the submission of any
proposal or offer from any Person relating to a Company Transaction;
or
4.not participate in any discussions or negotiations
regarding, or furnish any information with respect to or assist or
participate in or facilitate in any other manner any effort or attempt by
any Person to enter into a Company Transaction.
The Seller will notify the Buyer immediately if any Person
makes any proposal, offer, inquiry, or contact with respect to any of
the foregoing.
G.Notices and Consents. The Seller will give any notices to
third parties, and the Seller will use its reasonable best efforts to obtain
any third party consents, that the Buyer may request in connection with
the Permits and Licenses and Contracts and the Loan Amendment.
Each of the Parties will give any notices to, make any filings with, and
use its reasonable best efforts to obtain any authorizations, consents,
and approvals of governments and governmental agencies in connection
with the Permits and Licenses and third parties in respect of the
Contracts.
H.Notice of Developments. Each Party will give prompt
written notice to the other Party of any breach of any of its own
representations and warranties in Section 3 and Section 4 above or any
material adverse development anticipated to prevent such party from
delivering the certificate contemplated by Section 6(a)(v) or Section
6(b)(iv). No disclosure by any Party pursuant to this Section 5(h),
however, shall be deemed to prevent or cure any misrepresentation,
breach of warranty, or breach of covenant.
I.Title Insurance. The Buyer will obtain the following title
insurance commitments, policies, and riders in preparation for the
Closing with respect to each parcel of Real Property, an ALTA
Owner's Policy of Title Insurance Form B-1970 (or equivalent policy
reasonably acceptable to the Buyer if the real property is located in a
state in which an ALTA Owner's Policy of Title Insurance Form
B-1970 is not available) issued by a title insurer reasonably satisfactory
to the Buyer (and, if requested by the Buyer, reinsured in whole or in
part by one or more insurance companies and pursuant to a direct
access agreement reasonably acceptable to the Buyer), in such amount
as the Buyer reasonably may determine to be the fair market value of
such real property (including all improvements located thereon),
insuring title to such real property to be in the Buyer as of the Closing.
Each title insurance policy delivered under Section 5(i) above
shall:
a. insure title to the real property and all recorded
easements benefitting such real property;
b.contain an "extended coverage endorsement"
insuring over the general exceptions contained customarily in such
policies;
c.contain an ALTA Zoning Endorsement 3.1 (or
equivalent);
d.contain an endorsement insuring that the real
property described in the title insurance policy is the same real estate
as shown on the Survey delivered with respect to such property;
e.contain an endorsement insuring pedestrian and
vehicular access to the real property via public streets or private streets
benefited by appropriate access easements;
f. if available, contain an inflation endorsement
providing for annual adjustments in the amount of coverage in
accordance with the title insurer's standard endorsement;
g.if the real property consists of adjacent record
parcels, contain a "contiguity" endorsement insuring that all of the
record parcels together form a contiguous whole;
h.contain a "non-imputation" endorsement to the
effect that title defects known to the officers, directors, and
stockholders of the owner prior to the Closing shall not be deemed
"facts known to the insured" for purposes of the policy; and
i.contain such other commercially available
endorsements as Buyer and Buyer's lender, if any, may reasonably
request in order to insure over any exceptions not constituting
Permitted Liens.
J.Surveys. With respect to each parcel of Real Property that
the Seller owns, and as to which a title insurance policy is to be
procured pursuant to Section 5(i) above, the Buyer will procure in
preparation for the Closing a current survey of the real property
certified to the Buyer, prepared by a licensed surveyor and conforming
to current ALTA Minimum Detail Requirements for Land Title
Surveys, disclosing the location of all improvements, easements, party
walls, sidewalks, roadways, utility lines, and other matters shown
customarily on such surveys, and showing access affirmatively to
public streets and roads or to private streets via appropriate easements
(the "Survey"). The Survey shall not disclose any survey defect or
encroachment from or onto the real property which has not been cured
or insured over prior to the Closing. Survey matters constituting
Permitted Liens will not be deemed defects or encroachments for
purposes of this section.
K.Employees. Prior to Closing, Seller shall give all notices
required under any law or collective bargaining agreement and Seller
shall perform all bargaining obligations with respect to any employee
representatives. The Seller shall use reasonable best efforts to obtain
prior to Closing a substitution agreement in form and substance
reasonably satisfactory to Buyer that provides for the substitution of
Buyer in the place of Seller under the Labor Agreement (the
"Substitution Agreement").
VI.Conditions Precedent to Close.
A.Buyer's conditions precedent. The obligation of the Buyer
to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction of the following conditions:
1.the representations and warranties set forth in Section
3 above shall be true and correct in all material respects at and as of
the Closing Date;
2.the Seller shall have performed and complied with all
of its covenants hereunder in all material respects through the Closing;
3.the Seller shall have procured all of the third party
consents specified in Section 5(g) above;
▇.▇▇ action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency
of any federal, state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement, (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, (C) materially affect adversely the right of the Buyer
to own the Acquired Assets, to operate the Business, or (D) materially
affect adversely the right of the Seller to own the Acquired Assets and
to operate the Business (and no such injunction, judgment, order,
decree, ruling, or charge shall be in effect);
5.the Seller shall have delivered to the Buyer a
certificate to the effect that each of the conditions specified above in
Section 6(a)(i)-(iv) is satisfied in all respects;
6.the Buyer shall have procured all of the title insurance
commitments, policies, and riders specified in Section 5(i) above, and
all of the surveys specified in Section 5(j) above;
7.the Buyer shall have received all other authorizations,
consents, and approvals of governments and governmental agencies
referred to in Section 5(f);
8.the relevant parties shall have entered into:
a.the Supply Agreement;
b.the Conversion Services Agreement; and
c.the Substitution Agreement.
9.the Buyer shall have received from counsel to the
Seller an opinion in form and substance reasonably satisfactory to
Buyer, addressed to the Buyer, and dated as of the Closing Date;
10.the Buyer shall have obtained on terms and
conditions satisfactory to it all of the financing it needs in order to
consummate the transactions contemplated hereby and fund the
working capital requirements of the Business after the Closing;
11.all actions to be taken by the Seller in connection
with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Buyer;
12.there shall have been no material adverse change in
the financial condition, operating results, assets, operations, and
customer, supplier and employee relations of the Business;
13.the Buyer shall have employed all of the salaried
employees listed on the Employees Schedule;
14.the Buyer shall have received the Transfer
Documents; and
15.the Seller shall have delivered to the Buyer a
FIRPTA affidavit of the Seller in accordance with Section 1445 of the
Code.
The Buyer may waive any condition specified in this Section 6(a) by
giving written notice to the Seller at any time prior to Closing.
B.Seller's conditions precedent. The obligation of the Seller
to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction of the following conditions:
1.the Buyer's representations and warranties in Section
4 above shall be true and correct in all material respects at and as of
the Closing Date;
2.the Buyer shall have performed and complied with all
of its covenants hereunder in all material respects through the Closing;
▇.▇▇ action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency
of any federal, state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement or (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation (and no such injunction, judgment, order, decree, ruling,
or charge shall be in effect);
4.the Buyer shall have delivered to the Seller a
certificate to the effect that each of the conditions specified above in
Sections 6(b)(i)-(iii) is satisfied in all respects;
5.the Buyer shall have received all other authorizations,
consents, and approvals of governments and governmental agencies
referred to in Section 5(g), including, without limitation, the Loan
Amendment;
6.the relevant parties shall have entered into;
a.the Supply Agreement; and
b.the Conversion Services Agreement.
7.the Seller shall have received from counsel to the
Buyer an opinion in form and substance reasonably satisfactory to
Seller, addressed to the Seller, and dated as of the Closing Date; and
8.all actions to be taken by the Buyer in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Seller.
The Seller may waive any condition specified in this Section 6(b) by
giving written notice to the Buyer at any time prior to Closing.
VII.Post-Closing Covenants. The Parties agree as follows with respect
to the period following the Closing.
A.General. If at any time after the Closing any further action
is necessary or desirable to carry out the purposes of this Agreement,
each of the Parties will take such further action (including the
execution and delivery of such further instruments and documents) as
the other Party reasonably may request, at the sole cost and expense of
the requesting Party (unless the requesting Party is entitled to
indemnification therefor under Section 8 below). The Seller
acknowledges and agrees that from and after the Closing the Buyer will
be entitled to possession of all documents, books, records (including
Tax records), agreements, and financial data included in the Acquired
Assets.
B.Books and Records. For a period of five years following the
Closing, or for such longer periods as may be required to satisfy
applicable laws, regulations or agreements:
1.Seller shall retain all books and records relating to the
Business and the Acquired Assets that are integrated or non-separable
from the books and records related to any of the businesses of Seller
other than the Business,
2.Buyer shall retain all other books and records of the
Business, including, without limitation, all other such books and
records of the Business (A) relating to Taxes, including, without
limitation, accounting and tax records and information pertaining to
events occurring prior to the Closing Date and (B) required to be
retained pursuant to obligations imposed by any statute, rule or
regulation (such books and records of the Business described in clause
(i) above and this clause (ii), collectively, the "Records");
3.each party hereto shall provide to duly authorized
representatives of the other party who wishes to review any Records
for bona fide business reasons reasonable access, during regular
business hours and without disrupting such other party's normal
business operations, to (A) such Records, (B) employees of such party,
if any, who are familiar with such Records and who can assist such
representatives of such other party, at such other party's own expense,
in locating, explaining or otherwise reviewing such Records and (C)
use of such party's copying facilities, clerical services and telephone in
a reasonable manner at such other party's own expense; and
4.neither Seller, on the one hand, nor Buyer, on the
other hand, shall dispose of or destroy any Records without written
permission of the other party.
If original records are required to respond to legal process in
connection with the conduct by any party of any litigation, arbitration,
audit, settlement proceedings or negotiations with third parties with
respect to the conduct of the Business or Buyer's conduct of its
business after the Closing, such party, subject to applicable laws,
regulations or agreements, shall be permitted to remove the Records
temporarily from another party's premises, provided that such party
shall return such original documents to such other party as promptly as
practicable after such time when such original documents are no longer
required in connection with such legal proceedings.
C.Litigation Support. In the event and for so long as any Party
actively is contesting or defending any action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand in connection with:
1.any transaction contemplated under this Agreement; or
2.any fact, situation, circumstance, status, condition,
activity, practice, plan, occurrence, event, incident, action, failure to
act, or transaction on or prior to the Closing Date involving the Facility
or the Acquired Assets,
the other Party will cooperate with the contesting or defending Party
and its counsel in the contest or defense, make available its personnel,
and provide such testimony and access to its books and records as shall
be necessary in connection with the contest or defense, all at the sole
cost and expense of the contesting or defending Party (unless the
contesting or defending Party is entitled to indemnification therefor
under Section 8 below).
D.Transition. The Seller will not take any action that is
designed or intended to have the effect of discouraging any lessor,
licensor, customer, supplier, or other business associate who prior to
Closing had a business relationship with the Seller arising from the
Business from maintaining the same business relationships with the
Buyer after the Closing. The Seller will refer all customer inquiries
relating to the Business to the Buyer from and after the Closing.
E.Confidentiality. The Seller will treat and hold as such all of
the Confidential Information, refrain from using any of the Confidential
Information except in connection with this Agreement, and deliver
promptly to the Buyer or destroy, at the request and option of the
Buyer, all tangible embodiments (and all copies) of the Confidential
Information which are in its possession. In the event that the Seller is
requested or required (by oral question or request for information or
documents in any legal proceeding, interrogatory, subpoena, civil
investigative demand, or similar process) to disclose any Confidential
Information, the Seller will notify the Buyer promptly of the request
or requirement so that the Buyer may seek an appropriate protective
order or waive compliance with the provisions of this Section 7(d). If,
in the absence of a protective order or the receipt of a waiver
hereunder, the Seller is, on the advice of counsel, compelled to disclose
any Confidential Information to any tribunal or else stand liable for
contempt, the Seller may disclose the Confidential Information to the
tribunal; provided, however, that the Seller shall use its reasonable best
efforts to obtain, at the reasonable request of the Buyer, an order or
other assurance that confidential treatment will be accorded to such
portion of the Confidential Information required to be disclosed as the
Buyer shall designate.
F.Covenant Not to Compete. For a period of five years from
the Closing Date, neither the Seller nor any of its Subsidiaries or
Affiliates will:
1.manufacture or sell A500 Grade B or Grade C hollow
structural sections or A-513 ERW Mechanical tubing; or
2.engage, or hold or own an interest, directly or
indirectly in any business that manufactures, converts or sells A500
Grade B or Grade C hollow structural sections or A-513 ERW
Mechanical tubing,
in any geographic area in which the Seller conducts the
Business as of the Closing Date or has conducted the Business at any
time within 5 years of the Closing Date.
If the final judgment of a court of competent jurisdiction
declares that any term or provision of this Section 7(e) is invalid or
unenforceable, the Parties agree that the court making the determination
of invalidity or unenforceability shall have the power to reduce the
scope, duration, or area of the term or provision, to delete specific
words or phrases, or to replace any invalid or unenforceable term or
provision with a term or provision that is valid and enforceable and
that comes closest to expressing the intention of the invalid or
unenforceable term or provision, and this Agreement shall be
enforceable as so modified after the expiration of the time within
which the judgment may be appealed.
G.Allocation. As soon as practicable after Closing the Buyer
shall allocate the Purchase Price (plus the Assumed Liabilities) among
the Acquired Assets and deliver to the Seller a schedule setting forth
such allocation. The Parties shall use their reasonable best efforts to
agree upon the final form and substance of the allocation schedule.
The mutually agreed allocation schedule shall be used by the parties in
preparing (i) Form 8594, Asset Acquisition Statement, for Buyer and
Seller and (ii) all Tax Returns. Buyer and Seller shall each file Form
8594 prepared in accordance with this Section with its federal income
tax return for its tax period which includes the Closing Date. All
allocations made pursuant to this Section shall be binding upon the
parties and upon each of their successors and assigns, and the parties
shall report the transactions contemplated by this Agreement in accor-
dance with such allocations.
VIII.Remedies for Breaches of This Agreement.
A.Survival of Representations and Warranties.
The representations and warranties and covenants in this
Agreement and the Schedules and Exhibits hereto or in any writing
delivered by Buyer or the Seller to any other party in connection with
this Agreement (including the certificate required to be delivered by
Seller pursuant to Section 6(a)(v) above and the certificate required to
be delivered by Buyer pursuant to Section 6(g)(iv) above) shall survive
the Closing as follows:
1.the representations and warranties contained in
Sections 3(g) (Tax) and 3(w) (Employee Benefits) (including such
representations and warranties as they are remade in the certificate
delivered pursuant to Section 6(a)(v)) shall terminate when the
applicable statutes of limitations with respect to the liabilities in
question expire (giving effect to any extensions or waivers thereof),
plus 60 days;
2.the representations and warranties in Sections 3(e)
(Title to Assets), 3(g) (Authorization of Transaction) and 3(d)
(Brokers' Fees) (including such representations and warranties as they
are remade in the certificate delivered pursuant to Section 6(a)(v)) shall
not terminate;
3.the representations and warranties in Section 3(y)
(Environmental, Health and Safety) (including such representations and
warranties as they are remade in the certificate delivered pursuant to
Section 6(a)(v)) shall terminate on the fourth anniversary of the
Closing Date; and
4.all other representations and warranties in this
Agreement and the Schedules and Exhibits hereto or in any writing
delivered by Buyer or the Seller to any other party in connection with
this Agreement including the certificate required to be delivered by
Buyer pursuant to Section 6(a)(v) above) shall terminate 18 months
after the Closing Date;
provided that any representation or warranty in respect of which
indemnity may be sought under Sections 8(b) and 8(c), and the
indemnity with respect thereto, shall survive the time at which it would
otherwise terminate pursuant to this Section 8(a) if notice of the
inaccuracy or breach thereof giving rise to such right of indemnity
shall have been given to the party against whom such indemnity may
be sought prior to such time. The representations and warranties in
this Agreement and the Schedules and Exhibits hereto or in any writing
delivered by Buyer or the Seller to any other party in connection with
this Agreement (including the certificate required to be delivered by
Seller pursuant to Section 6(g)(iv) above and the certificate required to
be delivered by Buyer pursuant to Section 6(a)(v) above) shall survive
for the periods set forth in this Section 8(a) and shall in no event be
affected by any investigation, inquiry or examination made for or on
behalf of Buyer or the Seller or the knowledge of any of Buyer's or
the Sellers' officers, directors, shareholders, employees or agents or the
acceptance by Buyer or the Seller of any certificate or opinion
hereunder.
B.Indemnification of the Buyer.
The Seller shall jointly and severally indemnify Buyer and its
Affiliates, stockholders, officers, directors, employees, agents,
representatives, successors and permitted assigns (collectively, the
"Buyer Parties") and save and hold each of them harmless against and
pay on behalf of or reimburse such Buyer Parties as and when incurred
for any loss (but excluding diminution in value and consequential
damages), liability, demand, claim, action, cause of action, cost,
damage, deficiency, tax, penalty, fine or expense, whether or not
arising out of third party claims (including, without limitation, interest,
penalties, reasonable attorneys' fees and expenses and all amounts paid
in investigation, defense or settlement of any of the foregoing)
(collectively, "Losses") which any such Buyer Party may suffer,
sustain or become subject to, as a result of, in connection with, relating
or incidental to or by virtue of:
1.any misrepresentation or breach of representation or
warranty under Section 3 of this Agreement or in any of the certificates
or other instruments or documents furnished to Buyer by Seller
pursuant to this Agreement (it being understood that the certificate
delivered pursuant to Section 6(a)(v) above shall be deemed to omit
any reference to materiality in such certificate for purposes of
determining breaches thereof);
2.any nonfulfillment or breach of any covenant,
agreement or other provision by Seller under this Agreement or the
Schedules and Exhibits hereto;
3.any liability or obligation of Seller which is an
Excluded Liability;
4.any liability or obligation of Buyer arising by
operation of law under any bulk transfer law which arises out of the
transactions contemplated hereby and which is not an Assumed
Liability;
5.any liability or obligation relating to the Employees
who are offered employment by Buyer but who decline to accept such
offer;
6.any claims of any Employee or former employee of
Seller to whom Buyer has no obligation to offer employment under this
Agreement;
7.any liability or obligation for severance benefits,
termination benefits or other benefits (including pension, savings, profit
sharing, incentive compensation, vacation or welfare benefits) with
respect to those Employees not employed by the Buyer; and
8.the lawsuit captioned "▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ and ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ v. Laclede Steel Company" filed with the Circuit Court of
▇▇▇▇▇▇▇▇ County, West Virginia.
provided that the Seller Entities shall not have any liability under
Section 8(b) above (other than Section 8(b)(viii) and with respect to the
representations and warranties contained in Section 3(d) (Brokerage),
Section 3(b) (Authorization) and Section 3(e) (Title)) unless the
aggregate of all Losses relating thereto for which the Seller would, but
for this proviso, be liable exceeds an amount equal to $150,000 and
only in excess of such amount; provided further, however, the Seller's
aggregate liability under Section 8(b)(i) above (other than with respect
to the representations and warranties contained in Section 3(b), Section
3(d) and of Section 3(e)) shall in no event exceed $11,373,000. This
Section 8(b) shall not govern any claims by the Buyer Parties with
respect to the covenants and indemnifications provided under Section
8(f) (Environmental) or Section 8(g) (Tax). All indemnification
payments under this Section 8 shall be deemed adjustments to the Final
Purchase Price for the Acquired Assets set forth in Section 2.
C.Indemnification of the Seller Entities. The Buyer shall
indemnify the Seller and its respective Affiliates, officers, directors,
employees, agents, representatives, successors and permitted assigns
(collectively, the "Seller Parties") and hold them harmless against any
Losses which the Seller Parties may suffer, sustain or become subject
to, as the result of, in connection with, relating or incidental to or by
virtue of:
1.any misrepresentation or breach of representation or
warranty under Section 4 of this Agreement or in any of the certificates
or other instruments or documents furnished to Seller by Buyer
pursuant to this Agreement;
2.any nonfulfillment or breach of any covenant,
agreement or other provision by Buyer under this Agreement or the
Schedules and Exhibits hereto;
3.any Assumed Liability;
4.any claims made by Employees employed by the
Buyer arising out of any change in the base pay or incentive
compensation or job duties of such Employees occurring after the
Closing Date or the termination by Buyer of their employment after the
Closing Date;
5.any liability or obligation relating to Buyer's violation
of Environmental, Health and Safety Requirements after the Closing
Date to the extent such liability is not an Excluded Liability or Buyer
is not otherwise entitled to indemnification hereunder; or
6.any liability or obligation relating to any injury, to
individuals or property as a result of the ownership, possession or use
of any product of the Business manufactured, sold, leased or delivered
by the Buyer after the Closing Date (other than with respect to
Inventory and Finished Goods included in the Acquired Assets).
D.Manner of Payment. Any indemnification of the Buyer
Parties or the Seller Parties pursuant to this Section 8 shall be effected
by wire transfer of immediately available funds from the Seller or
Buyer, as the case may be, to an account designated by Buyer or
Seller, as the case may be, within 30 days after the determination
thereof.
E.Defense of Third Party Claims. Any party making a claim
for indemnification under this Section 8 (an "Indemnitee") shall notify
the indemnifying party (an "Indemnitor") of the claim in writing
promptly after receiving written notice of any action, lawsuit,
proceeding, investigation or other claim against it (if by a third party)
or discovering the liability, obligation or facts giving rise to such claim
for indemnification, describing the claim, the amount thereof (if known
and quantifiable) and the basis thereof; provided that the failure to so
notify an Indemnitor shall not relieve the Indemnitor of its obligations
hereunder except to the extent that (and only to the extent that) the
Indemnitor is prejudiced by such failure. Any Indemnitor shall be
entitled to participate in the defense of such action, lawsuit, proceeding,
investigation or other claim giving rise to an Indemnitee's claim for
indemnification at such Indemnitor's expense, and at its option (subject
to the limitations set forth below) shall be entitled to appoint a
nationally recognized and reputable counsel reasonably acceptable to
the Indemnitee to be the lead counsel in connection with such defense;
provided further that, prior to the Indemnitor assuming control of such
defense, it shall first verify to the Indemnitee in writing that such
Indemnitor shall be responsible (with no more than a reasonable
reservation of rights under the circumstances) for all liabilities and
obligations relating to such claim for indemnification and that it shall
provide indemnification (whether or not otherwise required hereunder)
to the Indemnitee with respect to such action, lawsuit, proceeding,
investigation or other claim giving rise to such claim for
indemnification hereunder; and provided further that:
1.the Indemnitee shall be entitled to participate in the
defense of such claim and to employ counsel of its choice for such
purpose; provided that the fees and expenses of such separate counsel
shall be borne by the Indemnitee (other than any fees and expenses of
such separate counsel that are incurred prior to the date the Indemnitor
effectively assumes control of such defense which, notwithstanding the
foregoing, shall be borne by the Indemnitor);
2.the Indemnitor shall not be entitled to assume control
of such defense and shall pay the fees and expenses of counsel retained
by the Indemnitee if (i) the claim for indemnification relates to or
arises in connection with any criminal proceeding, action, indictment,
allegation or investigation; (ii) the Indemnitee reasonably believes an
adverse determination with respect to the action, lawsuit, investigation,
proceeding or other claim giving rise to such claim for indemnification
would be detrimental to or injure the Indemnitee's reputation or future
business prospects; (iii) the claim seeks an injunction or equitable relief
against the Indemnitee; or (iv) upon petition by the Indemnitee, the
appropriate court rules that the Indemnitor failed or is failing to
vigorously prosecute or defend such claim; and
3.if the Indemnitor shall control the defense of any such
claim, the Indemnitor shall obtain the prior written consent of the
Indemnitee (which shall not be unreasonably withheld) before (i)
entering into any settlement of a claim or ceasing to defend such claim
if, pursuant to or as a result of such settlement or cessation, injunctive
or other equitable relief shall be imposed against the Indemnitee or if
such settlement does not expressly and unconditionally release the
Indemnitee from all liabilities and obligations with respect to such
claim, without prejudice and (ii) taking any remedial actions with
respect to any environmental matters (including investigations and
cleanups) with respect to the Facility.
F.Certain Environmental Matters.
1.The Seller covenants that it will, at its sole cost and
expense, within six months of the date of this Agreement:
a.remove from the Real Property and the Facility,
and dispose of, the concrete supports, coating residues and the
surrounding soil to the conditions and pursuant to the standards set
forth in Exhibit I under the heading "Coating Area";
b.deliver to the Buyer a confirmation analysis
report containing the analysis set forth in Exhibit I under the heading
"Coating Area" and prepared by Environmental Management Associates
of Wexford, Pennsylvania, ▇▇▇▇▇ Consulting or such other consulting
engineers as approved by the Buyer (which approval shall not be
unreasonably withheld) which states that the remediation work set out
in paragraph (i) (A) above has been completed; and
c.fill and grade the area surrounding the
remediation work undertaken in accordance with paragraph (i)(A)
above to restore such areas to the grade existing prior to the
commencement of such work.
2.The Seller covenants that it will, at its sole cost and
expense, within six months of the date of this Agreement:
a.remove and dispose of hydrocarbon impacted
soils surrounding the 5 gallon bucket outside the south side of building
No. 1 at the Facility and the shallow pit south of the area to the
conditions and pursuant to the standards set forth in Exhibit I under the
headings "Compressor Area" and "Shallow Pit";
b.deliver to the Buyer a confirmation analysis
report containing the analysis set forth in Exhibit I under the headings
"Compressor Area" and "Shallow Pit" and prepared by Environmental
Management Associates of Wexford, Pennsylvania, ▇▇▇▇▇ Consulting
or such other consulting engineers as approved by the Buyer (which
approval shall not be unreasonably withheld) which states that the
remediation work set out in paragraph (ii)(A) above has been
completed; and
c.fill and grade the area surrounding the
remediation work undertaken in accordance with paragraph (ii)(A)
above to restore such area to the grade existing prior to the
commencement of such work.
3.The Seller covenants that it will, at its sole cost and
expense, within six months of the date of this Agreement:
a.remove and dispose of all paint chips and soil
around the entire building perimeter at the Facility in accordance with
the conditions and pursuant to the standards set forth in Exhibit I under
the heading "Building Perimeter";
b.deliver to the Buyer a confirmation analysis
report containing the analysis specified in Exhibit I under the heading
"Building Perimeter" and prepared by Environmental Management
Associates of Wexford, Pennsylvania, ▇▇▇▇▇ Consulting or such other
consulting engineers as approved by the Buyer (which approval shall
not be unreasonably withheld) which states to the reasonable
satisfaction of the Buyer that the remediation work set out in paragraph
(iii)(A) above has been completed; and
c.fill and grade the area surrounding the
remediation work undertaken in accordance with paragraph (iii)(A)
above to restore such area to the grade existing prior to the
commencement of such work.
4.The Seller covenants that it will as soon as reasonably
practical after the date of this Agreement procure, at its sole cost and
expense, all sampling and analysis required to meet the permit
reporting requirements for the West Virginia General Permit for storm
water discharge from the Facility.
▇.▇▇▇ Indemnification.
1.Seller shall remain liable, and shall indemnify Buyer,
for any liability or obligation in respect of any amount of federal, state,
local or foreign Taxes which are imposed with respect to or measured
by the income of Seller, value of property owned by Seller, or the
conduct of the Business by Seller, for any taxable period up to and
including the Closing Date. Seller shall also indemnify Buyer, and
shall be liable, for any state real estate documentary stamp tax imposed
with respect to the transfer of real property pursuant to this Agreement.
2.Any indemnification payment provided for under this
Section 8(g) shall include reasonable costs and expenses (including
attorneys' fees and expenses and accountants' fees and expenses)
incurred in contesting the amounts against which Buyer is indemnified,
or incurred in satisfying any filing or other procedural requirements
with respect to amounts against which Buyer is indemnified. Any
indemnification payment provided for under this Section 8(g) shall be
paid in the manner provided in Section 8(d) above and shall also
include any amount necessary to indemnify Buyer and hold it harmless
against any Loss which Buyer may suffer, sustain or become subject
to as a result of Seller's failure to pay, or unreasonable delay in
paying, any amounts for which Buyer is indemnified. Any
indemnification payment provided for under this Section 8(g) shall be
grossed up to include any Taxes payable by Buyer because of the
receipt of such indemnification payment (including such gross-up).
H.Other Limitations and Exclusive Remedy. For purposes
of Section 8, "Losses" shall be computed considering the present value
of net Tax benefits or detriments to the indemnified person arising
from the indemnified matter. The provisions of this Section 8 shall
constitute the exclusive remedy of the Parties with respect to any
claims or Losses resulting from or arising out of any other claims or
Losses, whether based on tort, contract, law, investigation by
government, or otherwise, resulting from or arising out of the
transactions contemplated hereby which may be asserted after the
Closing; provided, that the foregoing shall not preclude any claim for
actual fraud, injunctive or other non-monetary equitable relief.
I.Recoupment Under Buyer Note. The Buyer shall have the
option of recouping all or any part of any Loss it may suffer (in lieu
of seeking any indemnification to which it is entitled under this Section
8) by notifying the Seller that the Buyer is reducing the principal
amount outstanding under the Buyer Note. This shall affect the timing
and amount of payments required under the Buyer Note in the same
manner as if the Buyer had made a permitted prepayment (without
premium or penalty) thereunder.
IX.Termination.
A.Termination of Agreement. The Parties may terminate this
Agreement as provided below:
1.the Buyer and the Seller may terminate this Agreement
by mutual written consent at any time prior to the Closing;
2.the Buyer may terminate this Agreement by giving
written notice to the Seller at any time prior to the Closing (A) in the
event the Seller has breached any material representation, warranty, or
covenant contained in this Agreement in any material respect, the
Buyer has notified the Seller of the breach, and the breach has
continued without cure for a period of 30 days after the notice of
breach or (B) if the Closing shall not have occurred on or before 30
days from the date of this Agreement, by reason of the failure of any
condition precedent under Section 7(a) hereof (unless the failure results
primarily from the Buyer itself breaching any representation, warranty,
or covenant contained in this Agreement); and
3.the Seller may terminate this Agreement by giving
written notice to the Buyer at any time prior to the Closing (A) in the
event the Buyer has breached any material representation, warranty, or
covenant contained in this Agreement in any material respect, the
Seller has notified the Buyer of the breach, and the breach has
continued without cure for a period of 30 days after the notice of
breach or (B) if the Closing shall not have occurred on or before 30
days from the date of this Agreement, by reason of the failure of any
condition precedent under Section 7(b) hereof (unless the failure results
primarily from the Seller itself breaching any representation, warranty,
or covenant contained in this Agreement).
B.Effect of Termination. If any Party terminates this
Agreement pursuant to Section 9(a) above, all rights and obligations of
the Parties hereunder shall terminate without any Liability of any Party
to the other Party (except for any Losses of any Party then in breach).
X.Miscellaneous.
▇.▇▇▇▇▇ Releases and Public Announcements. No Party shall
issue any press release or make any public announcement relating to
the subject matter of this Agreement without the prior written approval
of the other Party; provided, however, that any Party may make any
public disclosure it believes in good faith is required by applicable law
or any listing or trading agreement concerning its publicly-traded
securities (in which case the disclosing Party will use its reasonable
best efforts to advise the other Party prior to making the disclosure).
▇.▇▇ Third-Party Beneficiaries. This Agreement shall not
confer any rights or remedies upon any Person other than the Parties
and their respective successors and permitted assigns.
C.Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement between the Parties
and supersedes any prior understandings, agreements, or representations
by or between the Parties, written or oral, to the extent they have
related in any way to the subject matter hereof.
D.Succession and Assignment. This Agreement shall be
binding upon and inure to the benefit of the Parties named herein and
their respective successors and permitted assigns. No Party may assign
either this Agreement or any of its rights, interests, or obligations
hereunder without the prior written approval of the other Party;
provided however, that the Buyer may (i) assign any or all of its rights
and interests hereunder to one or more of its Affiliates and (ii)
designate one or more of its Affiliates to perform its obligations
hereunder (in any or all of which cases the Buyer nonetheless shall
remain responsible for the performance of all of its obligations
hereunder). In addition the Buyer may assign its rights pursuant to this
Agreement (including its rights to indemnification) to any of its lenders
as collateral security.
E.Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all
of which together will constitute one and the same instrument.
F.Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request,
demand, claim, or other communication hereunder shall be deemed
duly given if (and then two business days after) it is sent by registered
or certified mail, return receipt requested, postage prepaid, and
addressed to the intended recipient as set forth below:
If to the Seller: Laclede Steel Company
▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
If to the Buyer: Excaliber Tubular Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set
forth above using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail, or
electronic mail), but no such notice, request, demand, claim, or other
communication shall be deemed to have been duly given unless and
until it actually is received by the intended recipient. Any Party may
change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other
Party notice in the manner herein set forth.
G.Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of
Missouri without giving effect to any choice or conflict of law
provision or rule (whether of the State of Missouri or any other
jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Missouri.
H.Amendments and Waivers. No amendment of any
provision of this Agreement shall be valid unless the same shall be in
writing and signed by the Buyer and the Seller. No waiver by any
Party of any default, misrepresentation, or breach of warranty or
covenant hereunder, whether intentional or not, shall be deemed to
extend to any prior or subsequent default, misrepresentation, or breach
of warranty or covenant hereunder or affect in any way any rights
arising by virtue of any prior or subsequent such occurrence.
I.Severability. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and
provisions hereof or the validity or enforceability of the offending term
or provision in any other situation or in any other jurisdiction.
J.Expenses. Each of the Buyer and the Seller will bear his or
its own costs and expenses (including legal fees and expenses) incurred
in connection with this Agreement and the transactions contemplated
hereby. The Seller agrees that the Facility has not borne and will not
bear any of the costs and expenses of the Seller (including any of its
legal fees and expenses) in connection with this Agreement or any of
the transactions contemplated hereby.
▇.▇▇▇▇▇▇▇▇▇▇▇▇. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity
or question of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the Parties and no presumption or
burden of proof shall arise favoring or disfavoring any Party by virtue
of the authorship of any of the provisions of this Agreement. Any
reference to any federal, state, local, or foreign statute or law shall be
deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. The word "including"
shall mean including without limitation. Without limiting the
generality of the foregoing, the mere listing (or inclusion of a copy) of
a document or other item shall not be deemed adequate to disclose an
exception to a representation or warranty made herein (unless the
representation or warranty has to do with the existence of the document
or other item itself). The Parties intend that each representation,
warranty, and covenant contained herein shall have independent
significance. If any Party has breached any representation, warranty, or
covenant contained herein in any respect, the fact that there exists
another representation, warranty, or covenant relating to the same
subject matter (regardless of the relative levels of specificity) which the
Party has not breached shall not detract from or mitigate the fact that
the Party is in breach of the first representation, warranty, or covenant.
For purposes of Article 3 and 4 hereof, the modification of any
representation or warranty by the use of the words "material", " in all
material respects" or "material adverse effect" or other words of similar
meaning shall mean that such representation or warranty shall be
deemed breached hereunder if the Loss resulting from a breach of such
representation or warranty absent such words or modification exceeds
$25,000. For purposes of the foregoing, any Losses resulting from
facts or circumstances having the same factual or legal basis shall be
aggregated as one Loss.
L.Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.
M.Specific Performance. Each of the Parties acknowledges
and agrees that the other Party would be damaged irreparably in the
event any of the provisions of this Agreement are not performed in
accordance with their specific terms or otherwise are breached.
Accordingly, each of the Parties agrees that the other Party shall be
entitled to an injunction or injunctions to prevent breaches of the
provisions of this Agreement and to enforce specifically this Agreement
and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over
the Parties and the matter, in addition to any other remedy to which it
may be entitled, at law or in equity.
N.Employee Benefits Matters.
1.Treatment of Employees-General. At the Closing,
Buyer shall, and shall be deemed to, offer immediate or continuing
employment (so that no period of unemployment occurs) to all hourly
and salaried employees of Seller who are actively employed in the
Business immediately prior to Closing with substantially the same
hours, pay and other terms and conditions of employment, as exist as
of the Closing. Buyer will recognize the rights of all members covered
under the Labor Agreement.
2.Welfare Benefits. As of the Closing Date, Buyer shall
sponsor a health plan to provide benefits to employees substantially
similar to those benefits provided under Seller's health plan
immediately prior to the Closing Date. Buyer shall use reasonable
efforts to waive any waiting periods or pre-existing condition or other
benefit restrictions which may be contained in any of Buyer's
applicable welfare benefit plans or programs with respect to employees
of Seller who participated in such plans or programs immediately prior
to the Closing Date. Buyer shall be liable for benefits provided under
its health plan with respect to claims which arise due to occurrences on
or after the Closing Date. Seller shall remain liable for benefits
provided under its welfare benefit plans.
3.Buyer's Assumption of Liability. As of any after
Closing Date, Buyer shall recognize each collective bargaining
representative of the Employees, and shall assume any and all
liabilities, responsibilities and obligations of Seller specifically set forth
in the Labor Agreement arising on or after the Closing Date (excluding
any liability or obligation arising out of or in connection with any
breach thereof occurring prior to Closing).
4.Plant Closing Law. The Seller represents and warrants
that it has not in connection with the Business terminated any
employee during the six-month period prior to the date of this
Agreement. In reliance upon such representation, Buyer shall bear all
responsibility for any liability or obligation under the Workers'
Assistance and Retraining Notification Act ("WARN") in connection
with the Business arising from the transactions contemplated by this
Agreement or any action by Buyer.
O.Bulk Transfer Laws. The Buyer acknowledges that the
Seller will not comply with the provisions of any bulk transfer laws of
any jurisdiction in connection with the transactions contemplated by
this Agreement. Seller shall indemnify the Buyer against any Adverse
Consequences which the Buyer may suffer due to the Seller's failure
to comply.
P.Nonassignable Contracts. To the extent that the assignment
hereunder by the Seller to the Buyer of any Contract is not permitted
without the consent of any other party to such Contract, this Agreement
shall not be deemed to constitute an assignment of such Contract if
such consent is not given or if such assignment otherwise would
constitute a breach of, or cause a loss of contractual benefits under, any
such Contract, the Buyer shall assume no obligations or liabilities under
such Contract. Seller shall use its reasonable best efforts to advise
Buyer promptly in writing with respect to any Contract which Seller
knows or has substantial reason to believe will or may not be subject
to assignment to Buyer hereunder. Without in any way limiting
Seller's obligation to obtain all consents and waivers necessary for the
sale, transfer, assignment and delivery of the Contracts and the
Acquired Assets to Buyer hereunder, if any such consent is not
obtained and the Closing hereunder is consummate, Seller shall
cooperate with Buyer following Closing Date in any reasonable
arrangement designed to provide Buyer with the rights and benefits
(subject to the obligations) under such Contract, including enforcement
for the benefit of Buyer of any and all rights of Seller against any
other party arising out of any breach or cancellation of any such
Contract by such other party and, if requested by Buyer, acting as an
agent of behalf or as Buyer shall otherwise reasonably require, at
Buyer's expense.
XI.Transfer Taxes. Buyer and Seller shall each bear one half of the
expense of any federal, state, local or foreign Taxes imposed with
respect to the transfer of assets pursuant to this Agreement (other than
the West Virginian real estate documentary stamp tax which shall be
borne by Seller).
XII.Licensed Intellectual Property. As of the Closing and in
consideration for the Purchase Price and no other consideration, Seller
hereby grants Buyer a perpetual, non-exclusive, world-wide license to
the Licensed Intellectual Property, if any. As of the Closing and in
consideration for receipt of the Acquired Assets and no other
consideration, Buyer hereby grants Seller a perpetual, non-exclusive,
world-wide license to the Intellectual Property, if any, used by Seller
as of the Closing Date at any location of Seller other than the Facility.
* * * * *
IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement on and as of the date first above written.
EXCALIBER
TUBULAR
CORPORATION
By:
Title:
LACLEDE STEEL
COMPANY
By:
Title:
