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Exhibit 2.1
ASSET PURCHASE AGREEMENT
BY AND AMONG
AEROSPACE METALS, INC.,
AEROSPACE PARTS SECURITY, INC.,
THE XXXXXXX TITANIUM CORPORATION,
XXXXXXX XXXXXXX,
METAL MANAGEMENT, INC.
AND
AMI ACQUISITION CO.
DATED AS OF JANUARY 20, 1998
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TABLE OF CONTENTS
Page
RECITALS ................................................................ 1
ARTICLE I - PURCHASE AND SALE ........................................... 1
1.1 Purchased Assets ..................................... 1
1.2 Excluded Assets ...................................... 3
1.3 Assumed Liabilities .................................. 3
1.4 Excluded Liabilities ................................. 4
ARTICLE II - PURCHASE PRICE ............................................. 5
2.1 Purchase Price ....................................... 5
2.2 Allocation of Purchase Price ......................... 5
2.3 Adjustment of Purchase Price ......................... 6
2.4 Adjustment to Stock Portion .......................... 6
ARTICLE III - CLOSING ................................................... 7
3.1 Closing Date ......................................... 7
3.2 Payment of the Purchase Price ........................ 7
3.3 Buyer's Additional Deliveries ........................ 7
3.4 Companies' Deliveries ................................ 8
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF THE COMPANIES AND THE
SHAREHOLDERS ............................................... 9
4.1 Corporate Status ..................................... 9
4.2 Power and Authority .................................. 9
4.3 Enforceability ....................................... 9
4.4 No Restrictions ...................................... 10
4.5 Capitalization of the Companies; Shareholder ......... 10
4.6 No Violation ......................................... 10
4.7 Records .............................................. 10
4.8 Subsidiaries ......................................... 11
4.9 Financial Statements ................................. 11
4.10 Changes Since the Current Balance Sheet Date ......... 11
4.11 Liabilities .......................................... 12
4.12 Litigation ........................................... 12
4.13 Environmental Matters ................................ 12
4.14 Real Estate .......................................... 18
4.15 Good Title to, Condition of and Adequacy of
Purchased Assets ................................... 19
4.16 Compliance with Laws ................................. 19
4.17 Labor and Employment Matters ......................... 20
4.18 Employee Benefit Plans ............................... 20
4.19 Tax Matters .......................................... 22
4.20 Insurance ............................................ 24
4.21 Receivables .......................................... 24
4.22 Licenses and Permits ................................. 24
4.23 Relationships with Customers and Suppliers;
Affiliated Transactions ............................ 25
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4.24 Intellectual Property ................................ 25
4.25 Contracts ............................................ 25
4.26 Customer Lists and Recurring Revenue ................. 26
4.27 Accuracy of Information Furnished to MTLM ............ 26
4.28 Investment Intent; Accredited Investor Status;
Securities Documents ............................... 26
4.29 Business Locations ................................... 27
4.30 Names; Prior Acquisitions ............................ 27
4.31 No Commissions ....................................... 27
4.32 Inventory ............................................ 27
4.33 Identification, Acquisition and Disposition of
Assets and Liabilities ............................. 28
4.34 Product Warranty ..................................... 28
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF BUYER ..................... 28
5.1 Corporate Status ..................................... 28
5.2 Corporate Power and Authority ........................ 28
5.3 Enforceability ....................................... 29
5.4 No Commissions ....................................... 29
5.5 SEC Filings and Financial Information ................ 29
5.6 Capitalization ....................................... 30
5.7 MTLM Shares. ......................................... 30
5.8 New Permits .......................................... 30
ARTICLE VI - CONDUCT OF BUSINESS PENDING THE CLOSING .................... 30
6.1 Affirmative Covenants Pending the Closing ............ 30
6.2 Negative Covenants Pending Closing ................... 31
ARTICLE VII - CONDITIONS TO THE OBLIGATIONS OF BUYER .................... 33
7.1 Accuracy of Representations and Warranties
and Compliance with Obligations .................... 33
7.2 No Material Adverse Change or Destruction of Property. 33
7.3 Corporate Certificate ................................ 33
7.4 Opinions of Counsel .................................. 34
7.5 Consents ............................................. 34
7.6 Governmental Approvals; HSR Act Compliance ........... 34
7.7 Securities Laws ...................................... 34
7.8 Title Documents; Title Insurance ..................... 34
7.9 No Adverse Litigation ................................ 34
7.10 Approvals; Consents .................................. 34
7.11 Intentionally Omitted ................................ 35
7.12 Intentionally Omitted ................................ 35
7.13 Other Closing Deliveries ............................. 35
7.14 Licenses and Permits ................................. 35
7.15 Employment Agreements ................................ 35
7.16 Lease and Option ..................................... 35
7.17 Defined Benefit Plan ................................. 35
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ARTICLE VIII - CONDITIONS TO THE OBLIGATIONS OF EACH OF THE COMPANIES
AND THE SHAREHOLDER ...................................... 35
8.1 Accuracy of Representations and Warranties
and Compliance with Obligations .................... 35
8.2 Purchase Price ....................................... 36
8.3 No Adverse Litigation ................................ 36
8.4 Other Closing Deliveries ............................. 36
8.5 Opinion of Counsel ................................... 36
8.6 Governmental Approvals; HSR Act Compliance ........... 36
8.7 Securities Laws ...................................... 36
ARTICLE IX - INDEMNIFICATION ............................................ 37
9.1 Agreement by the Companies and the Shareholder
to Indemnify ....................................... 37
9.2 Conditions of Indemnification of Buyer ............... 38
9.3 Agreement by Buyer to Indemnify ...................... 39
9.4 Conditions of Indemnification of Companies and
Shareholder ........................................ 40
9.5 Effect of Insurance and Taxes ........................ 41
9.6 Minimum Threshold for Indemnification ................ 41
9.7 Security for Indemnification Obligation .............. 42
9.8 Collection of Receivables ............................ 42
ARTICLE X - SECURITIES LAW MATTERS ...................................... 43
10.1 Legend ............................................... 43
10.2 Registration Rights .................................. 43
ARTICLE XI - ADDITIONAL AGREEMENTS ...................................... 43
11.1 Further Assurances ................................... 43
11.2 Compliance with Covenants ............................ 43
11.3 Cooperation .......................................... 43
11.4 Access to Information ................................ 44
11.5 Notification of Certain Matters ...................... 44
11.6 Tax Treatment ........................................ 44
11.7 No Other Discussions ................................. 44
11.8 Restrictive Covenants ................................ 44
11.9 Trading in MTLM's Common Stock ....................... 45
11.10 HSR Act Compliance ................................... 46
11.11 Corporate Authority .................................. 46
11.12 Taxes and Transfer Taxes ............................. 46
11.13 Other Agreements ..................................... 47
11.14 Employment Procedure ................................. 47
11.15 Corporate Name Change ................................ 47
11.16 Payments of Accounts Receivable ...................... 47
11.17 Securities Laws ...................................... 48
11.18 New Permits an ....................................... 48
11.19 Environmental Covenants of the Companies ............. 48
11.20 Environmental Covenants of Buyer ..................... 52
11.21 Covenants as to Management and
Containment Improvements ........................... 55
11.22 Buyer's Right to Cure the Companies' Noncompliance
with Remediation Obligation ........................ 55
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11.23 Payment of Estimated Amounts; Adjustments ............ 56
ARTICLE XII - TERMINATION ............................................... 56
12.1 Termination .......................................... 56
12.2 Notice of Termination ................................ 57
12.3 Effect of Termination ................................ 57
ARTICLE XIII - DEFINITIONS .............................................. 57
13.1 Defined Terms ........................................ 57
13.2 Other Definitional Provisions ........................ 63
ARTICLE XIV - GENERAL PROVISIONS ........................................ 64
14.1 Survival of Obligations .............................. 64
14.2 Confidential Nature of Information ................... 64
14.3 No Public Announcement ............................... 64
14.4 Notices .............................................. 65
14.5 Successors and Assigns ............................... 66
14.6 Access to Records after Closing ...................... 66
14.7 Entire Agreement; Amendments ......................... 67
14.8 Interpretation ....................................... 67
14.9 Waivers .............................................. 67
14.10 Expenses ............................................. 67
14.11 Partial Invalidity ................................... 67
14.12 Execution in Counterparts ............................ 68
14.13 Further Assurances ................................... 68
14.14 Governing Law ........................................ 68
14.15 Submission to Jurisdiction ........................... 68
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INDEX OF EXHIBITS
Exhibit A Lease Agreement
Exhibit B Option Agreement
Exhibit C Xxxx of Sale
Exhibit D-1 Opinion of Counsel to Buyer
Exhibit D-2(a) Opinion of Counsel to the Companies and the Shareholder
Exhibit D-2(b) Opinion of Counsel to the Companies and the Shareholder
Exhibit E Assumption Agreement
Exhibit F Cleanup Escrow Agreement
Exhibit G General Escrow Agreement
Exhibit H Registration Rights Agreement
Exhibit I Employment Agreements
INDEX OF SCHEDULES
Schedule 1.1(k) Prepaid Expenses
Schedule 1.2(c) Deferred Income Taxes
Schedule 1.2(e) Insurance Policies
Schedule 1.2(g) Other Excluded Assets
Schedule 1.2(h) Shareholder Personal Property
Schedule 4.1 Jurisdictions in which Qualified to do Business
Schedule 4.5 Capitalization of the Companies; Shareholder
Schedule 4.6 Violations; Conflicts; etc.
Schedule 4.8 Subsidiaries
Schedule 4.9 Financial Statements
Schedule 4.10 Changes since the Current Balance Sheet Date
Schedule 4.11 Liabilities
Schedule 4.12 Litigation
Schedule 4.13 Environmental Matters
Schedule 4.14(a) Owned Premises
Schedule 4.14(b) Leased Premises
Schedule 4.14(c) Additional Locations
Schedule 4.15 Title to and Condition of Assets
Schedule 4.16 Compliance with Laws
Schedule 4.17 Labor and Employment Matters
Schedule 4.18 Employee Benefit Plans
Schedule 4.19 Tax Matters
Schedule 4.20 Insurance
Schedule 4.21 Receivables
Schedule 4.22 Licenses and Permits
Schedule 4.23 Relationships with Customers and Suppliers
Schedule 4.24 Intellectual Property
Schedule 4.25 Purchased Contracts
Schedule 4.27 Documents Not Prepared by Companies or Shareholder
Schedule 4.30 Names
Schedule 4.31 Commissions
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Schedule 4.33(a) Fixed Asset Schedule
Schedule 4.33(b) Liability Schedule
Schedule 5.5 SEC Filings and Financial Information
Schedule 6.2 Negative Covenants
Schedule 11.19(a) Remediation Plan
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "AGREEMENT") is entered into effective
as of January 20, 1998, by and among Metal Management, Inc., a Delaware
corporation ("MTLM"); AMI Acquisition Co., a Delaware corporation and a
wholly-owned subsidiary of MTLM ("AMI" together with MTLM, "BUYER"); Aerospace
Metals, Inc., a Connecticut corporation ("AEROSPACE"); Aerospace Parts
Security, Inc., a Connecticut corporation ("SECURITY"); The Xxxxxxx Titanium
Corporation, a Connecticut corporation and a wholly-owned subsidiary of
Aerospace ("TITANIUM") (Aerospace, Security and Titanium are hereinafter
sometimes referred to individually as a "COMPANY" and collectively as the
"COMPANIES"); and Xxxxxxx Xxxxxxx, being the sole shareholder of Aerospace and
Security ("SHAREHOLDER"). Certain other capitalized terms used herein are
defined in Article XIII or elsewhere throughout this Agreement.
R E C I T A L S:
A. The Companies are engaged in the business of processing and recycling
high temperature nickel and cobalt alloys, titanium and other high grade alloy
metals (the "BUSINESS").
B. The Companies desire to sell to Buyer, and Buyer desires to purchase
from the Companies, on a going concern basis, substantially all of the
Companies' assets, properties and business, other than certain excluded assets,
all on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, it is hereby agreed as follows:
ARTICLE I
PURCHASE AND SALE
1.1 Purchased Assets. Upon the terms and subject to the conditions of
this Agreement, on the Closing Date, each of the Companies shall sell,
transfer, assign, convey and deliver to Buyer, and Buyer shall purchase from
each of the Companies, on a going concern basis, free and clear of all Liens
(except for Permitted Liens), all of the business and operations of each of the
Companies related to the Business and, except for the Excluded Assets as set
forth in Section 1.2 hereof, all of the assets and properties of each of the
Companies of every kind and description, wherever located, real, personal or
mixed, tangible or intangible, used in connection with the Business as the same
shall exist on the Closing Date (collectively, the "PURCHASED ASSETS"),
including, without limitation, all right, title and interest of each of the
Companies in, to and under:
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(a) All of the assets reflected on the Balance Sheet, including
without limitation the Receivables identified on Schedule 4.21, and those
assets acquired subsequent to the Balance Sheet Date, except those assets
disposed of or converted into cash after the Balance Sheet Date in the
ordinary course of business;
(b) All raw materials, supplies, parts, work-in progress, and other
materials (including all such materials subject to a consignment
relationship) included in the inventory of the Business ("INVENTORY");
(c) The Permits listed in Schedule 4.22;
(d) The Purchased Contracts identified in Schedule 4.25, as well as
all contracts-in-process;
(e) The personal property listed in the August 31, 1997 unaudited
financial statements of each of the Companies;
(f) The trademarks, trade names, service marks, and copyrights,
including but not limited to the names "Aerospace Metals, Inc.",
"Aerospace Parts Security, Inc.", "Xxxxxxx & Xxxxxxxxxx" and "The Xxxxxxx
Titanium Corporation" and all abbreviations or derivations thereof which
any of the Companies owns or has the right to use (and all goodwill
associated therewith), registered or unregistered, and the applications
for registration thereof, and the patents and applications
therefor, and the licenses relating to any of the foregoing listed in
Schedule 4.24 (as further defined in Section 4.24, the "INTELLECTUAL
PROPERTY");
(g) All mailing lists, telephone numbers, customer lists, subscriber
lists, processes, computer software, manuals or business procedures,
trade secrets, designs, engineering drawings and reports, know-how and
other proprietary or confidential information used in or relating to the
Business;
(h) All books and records (including all data and other information
stored on discs, tapes or other media) of each of the Companies relating
to the assets, properties and operations of the Business;
(i) All of the Companies' rights, claims or causes of action against
third parties relating to the assets, properties or operations of the
Business (other than those arising from the ownership of the Owned
Premises) arising out of transactions occurring prior to the Closing
Date;
(j) All of the Companies' interest in and to all telephone, telexes
and telephone facsimile numbers and other directory listings of the
Business and any assumed or fictitious names related to the Business;
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(k) All prepaid expenses and deposits that benefit the Buyer after
the Closing Date, a list of which is included in Schedule 1.1(k);
(l) All of the Companies' interests in, and the assets under, the
Employee Benefit Plans; and
(m) All of the Companies' rights, claims or causes of action against
third parties arising from warranties or guarantees received in
connection with materials, products or services purchased by the
Companies prior to the Closing Date.
1.2 Excluded Assets. Notwithstanding the provisions of Section 1.1, the
Purchased Assets shall not include the following (herein referred to as the
"EXCLUDED ASSETS"):
(a) All cash, bank deposits and cash equivalents;
(b) Any casualty, products liability or tort claim, or proceeds
thereof, relating to the operation of the Business and the property,
plant and equipment of the Companies, which arose prior to the Closing
Date;
(c) All deferred income taxes, income tax refunds and investments
set forth on Schedule 1.2(c);
(d) All corporate minute books and stock transfer books and the
corporate seal of each Company;
(e) Those insurance policies listed on Schedule 1.2(e);
(f) the real property parcels commonly known as 000 Xxxxxxxxxxx
Xxxxxx, 000 Xxxxxxxxxxx Xxxxxx and 000 Xxxxxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxxx, including any rights and easements of the Companies related
thereto each as more fully described or referred to in Schedule 4.14(a)
(the "OWNED PREMISES");
(g) Such other Excluded Assets as are listed on Schedule 1.2(g); and
(h) The Shareholder's personal property listed on Schedule 1.2(h),
which is owned by the Shareholder and not the Companies.
1.3 Assumed Liabilities. On the Closing Date, Buyer shall deliver to the
Companies the Assumption Agreement (attached hereto as Exhibit E) pursuant to
which Buyer shall assume and agree to discharge the following obligations and
liabilities of each of the Companies:
(a) All of the accounts payable and accrued expenses of each of the
Companies incurred in the ordinary course of business and as reflected on
each of the Companies' balance sheets as of the Closing Date;
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(b) All obligations of each of the Companies to be paid or performed
on or after the Closing Date under the Purchased Contracts; except:
(i) to the extent such liabilities and obligations, but for a
breach or default by any of the Companies, would have been
paid, performed or otherwise discharged on or prior to the Closing
Date or to the extent such liabilities and obligations arise out of
any such breach or default; and
(ii) to the extent such liabilities and obligations were not
taken into account as a deduction in connection with the adjustment
of the Purchase Price pursuant to Section 2.3;
(c) all obligations of the Companies under the Employee Benefit
Plans; and
(d) all obligations of the Companies under the Union Contract.
All of the foregoing liabilities and obligations to be assumed by Buyer
hereunder (excluding any Excluded Liabilities) are referred to herein as the
"ASSUMED LIABILITIES."
1.4 Excluded Liabilities. Buyer shall not assume or be obligated to pay,
perform or otherwise discharge any liability or obligation of the Companies,
direct or indirect, known or unknown, absolute or contingent, not expressly
assumed by Buyer pursuant to the Assumption Agreement (all such liabilities and
obligations not being assumed being herein called the "EXCLUDED LIABILITIES")
and, notwithstanding anything to the contrary in Section 1.3, none of the
following shall be "ASSUMED LIABILITIES" for purposes of this Agreement:
(a) Any liabilities of the Companies in respect of Taxes of the
Companies for which any of the Companies are liable pursuant to Section
4.19;
(b) Any intercompany payables and other liabilities or obligations
of the Companies to any of their respective Affiliates;
(c) Any costs and expenses incurred by any of the Companies or the
Shareholder incident to its negotiation and preparation of this Agreement
and its performance and compliance with the agreements and conditions
contained herein;
(d) Any liabilities or obligations in respect of any Excluded
Assets;
(e) Any debts or obligations owed by any of the Companies to any
Bank or other financial institution;
(f) Any liabilities or obligations, to the extent such liabilities
or obligations were not deducted in connection with the adjustment of the
Purchase Price pursuant to
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Section 2.3, arising from the violation or breach of, or default by
the Companies, the Shareholder, employees, agents or independent
contractors relating to the Owned Premises or Leased Premises under: (i)
any law, statute, ordinance, rule, regulation, decree, writ, injunction,
judgment or order of any Governmental Authority or of any arbitration
award which is either applicable to, binding upon or enforceable against
any of the Companies or the Shareholder; or (ii) any Contract which is
applicable to, binding upon or enforceable against any of the Companies
or the Shareholder;
(g) Any liabilities or obligations, whether under guaranty,
warranty, or indemnity provisions or otherwise, for replacement, return,
exchange or repair of, or other damages in connection with, products
sold, manufactured or delivered by any of the Companies, to the extent
such liabilities or obligations were not deducted in connection with the
adjustment of the Purchase Price pursuant to Section 2.3; or
(h) Any other liabilities of any kind or nature whatsoever other
than those described in Section 1.3.
ARTICLE II
PURCHASE PRICE
2.1 Purchase Price. Subject to the Purchase Price Adjustment, the
purchase price ("PURCHASE PRICE") for the Purchased Assets shall be
$24,250,000, consisting of:
(a) $18,000,000 in cash (the "CASH PORTION"), from which MTLM shall
withhold a total of $4,600,725 (the "ESCROW AMOUNT") and deliver to the
Escrow Agent to hold in separate escrow accounts pursuant to the Cleanup
Escrow Agreement and the General Escrow Agreement (together, the "ESCROW
AGREEMENTS") in accordance with Section 9.7; and
(b) 284,091 shares (valued at $22 per share based upon the closing
price of the Common Stock on the Nasdaq National Market on August 28,
1997) of Common Stock, subject to adjustment as set forth in Section 2.4
(the "STOCK PORTION"; such shares, together with the shares of Common
Stock, if any, issued in connection with a Purchase Price Adjustment, the
"MTLM SHARES") subject to the restrictions and entitled to the
registration and other rights set forth in the Registration Rights
Agreement and bearing the legend set forth in Section 10.1 of this
Agreement. The Registration Rights Agreement will provide, among other
terms and conditions, that MTLM will file a single registration statement
with respect to the MTLM Shares within 20 days after the Closing Date.
2.2 Allocation of Purchase Price. The Purchase Price shall be allocated
as set forth in a schedule to be mutually determined by Buyer and the Companies
on or prior to the Closing Date. Each of the Companies shall sign and submit
all necessary forms to report this transaction for
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federal and state income tax purposes in accordance with that allocation and
shall not take a position for tax purposes inconsistent therewith.
2.3 Adjustment of Purchase Price.
(a) Within four (4) days prior to the Closing Date, the Companies'
auditors shall perform a physical inventory (the "PRE-CLOSING INVENTORY")
of the Inventory of the Companies (which physical inventory shall be
observed and reviewed by AMI's auditors). The Pre-Closing Inventory
shall be adjusted for any transactions by the Companies between the date
of the Pre-Closing Inventory and the Closing Date and shall be used by
Buyer and the Companies to jointly prepare a statement calculating the
Valuation Date Amount. The Pre-Closing Inventory and all adjustments
through the Closing Date shall be valued using the "First In, First Out"
valuation method. The cost of such inventory shall be based on the cost
to each of the Companies as reflected on its books and records.
(b) The Purchase Price shall be increased or decreased (the
"PURCHASE PRICE ADJUSTMENT") as follows if the Valuation Date Amount and
the August 31 Valuation Amount differ by more than $100,000:
(i) if the Valuation Date Amount exceeds the August 31
Valuation Amount by more than $100,000, then the Stock Portion of
the Purchase Price shall be increased by the full amount of such
excess by increasing the Common Stock comprising the Stock Portion
by that number of shares of Common Stock derived by dividing (a)
the full amount of such excess by (b) $22, which additional Shares
of Common Stock shall be subject to the restrictions and entitled
to the registration and other rights set forth in the Registration
Rights Agreement, and bear the legend set forth in Section 10.2; or
(ii) if the August 31 Valuation Amount exceeds the Valuation
Date Amount by more than $100,000, then the Cash Portion of the
Purchase Price shall be decreased by the full amount of this
difference.
2.4 Adjustment of Stock Portion. If the closing price of the Common
Stock on the Nasdaq National Market on the trading day prior to the day of
Closing (the "CLOSING PRICE") is less than $19.50 per share, then the number of
shares in the Stock Portion of the Purchase Price shall equal the number
(rounded to the next highest whole number) obtained by dividing: (i) $5,539,774
(the product of 284,091 shares times $19.50 per share); by (ii) the Closing
Price. If the Closing Price is greater than $24.50 per share, then the number
of shares in the Stock Portion of the Purchase Price shall equal the number
(rounded to the next highest whole number) obtained by dividing: (i) $6,960,230
(the product of 284,091 shares times $24.50 per share); by (ii) the Closing
Price.
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ARTICLE III
CLOSING
3.1 Closing Date. The Closing of the transactions contemplated by this
Agreement shall be consummated after all of the conditions set forth in
Articles VII and VIII have been satisfied or waived, on a date mutually agreed
upon by the parties but no later than January 31, 1998, at the offices of
Xxxxxxx & Xxxxxxxx Ltd., 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxx 00000 or at such other place as shall be agreed upon by Buyer and the
Shareholder. The time and date on which the Closing is actually held is
sometimes referred to herein as the "CLOSING DATE." The Closing shall be
deemed to be effective as of 12:01 a.m. (Chicago time) on the Closing Date (the
"EFFECTIVE TIME").
3.2 Payment of the Purchase Price. Subject to fulfillment or waiver of
the conditions set forth in Article VII, the Purchase Price (subject to the
Purchase Price Adjustment) shall be payable by Buyer to the Companies at
Closing as follows: Buyer shall: (i) pay to the Companies an amount equal to
the Cash Portion minus the Escrow Amount by wire transfer of immediately
available funds to an account designated by the Companies in writing not less
than two (2) days prior to the Closing Date; (ii) deliver to the Companies a
certificate representing the Stock Portion and bearing the legend set forth in
Section 10.1; and (iii) deliver the Escrow Amount in accordance with the Escrow
Agreements.
3.3 Buyer's Additional Deliveries. At Closing Buyer shall deliver to
the Companies all the following:
(a) A certificate of the Secretary or an Assistant Secretary of each
of MTLM and AMI, dated as of the Closing Date, in form and substance
reasonably satisfactory to the Companies, as to: (i) no amendments to the
Articles of Incorporation of MTLM or AMI, as applicable, since a
specified date; (ii) the by-laws of MTLM or AMI, as applicable; (iii) the
resolutions of the Board of Directors of MTLM or AMI, as applicable,
authorizing the execution and performance of this Agreement, the Other
Agreements and the transactions contemplated thereby; and (iv) incumbency
and signatures of the officers of MTLM or AMI, as applicable, executing
this Agreement and the Other Agreements;
(b) The Other Agreements, each duly executed by each of MTLM and
AMI, as applicable;
(c) The certificate contemplated by Section 8.1, duly executed by
the President or any Vice President of each of MTLM and AMI;
(d) Such other documents as the Companies may reasonably request or
as may be otherwise necessary to evidence and effect the sale,
assignment, transfer, conveyance and delivery of the Purchased Assets to
Buyer;
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(e) A Certificate of Good Standing, issued by the Secretary of State
of Delaware, with respect to each of MTLM and AMI, dated no earlier than
thirty (30) days prior to the Closing Date;
(f) An opinion of counsel to Buyer substantially in the form of
Exhibit D-1; and
(g) The Assumption Agreement, duly executed and delivered by Buyer.
3.4 Companies' Deliveries. At Closing the Companies and the Shareholder
shall deliver to Buyer all the following:
(a) A certificate of the Secretary or an Assistant Secretary of each
of the Companies, dated the Closing Date, in form and substance
reasonably satisfactory to Buyer, as to: (i) no amendments to the
Certificate of Incorporation of such Company since a specified date; (ii)
the by-laws of such Company; (iii) the resolutions of the Board of
Directors and shareholders of such Company authorizing the execution and
performance of this Agreement, the Other Agreements and the transactions
contemplated thereby; and (iv) incumbency and signatures of the officers
of such Company executing this Agreement and the Other Agreements.
(b) Opinions of counsel to the Companies and the Shareholder
substantially in the form contained in Exhibit D-2(a) and Exhibit D-2(b).
(c) The Xxxx of Sale duly executed by each of the Companies in
substantially the form contained in Exhibit C;
(d) Certificates of title or origin (or like documents) with respect
to any aircraft, vehicles or equipment included in the Purchased Assets
for which a certificate of title or origin is required in order to
transfer title;
(e) The consents, waivers or approvals obtained by each of the
Companies with respect to the Purchased Assets or the consummation of the
transactions contemplated by this Agreement;
(f) The certificate contemplated by Section 7.1, duly executed by
the authorized officers of each of the Companies;
(g) Certificates of Existence issued by the Secretary of State of
Connecticut with respect to each of the Companies, dated no more than
thirty (30) days prior to the Closing Date;
(h) UCC-3 termination statements or other applicable releases
relating to any Liens other than Permitted Liens; and
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(i) Such other bills of sale, assignments and other instruments of
transfer or conveyance as Buyer may reasonably request or as may be
otherwise necessary to evidence and effect the sale, assignment,
transfer, conveyance and delivery of the Purchased Assets to Buyer.
In addition to the above deliveries, each of the Companies and the Shareholder
shall take all steps and actions as Buyer may reasonably request or as may
otherwise be necessary to put Buyer in actual possession or control of the
Purchased Assets.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE
COMPANIES AND THE SHAREHOLDERS
As a material inducement to MTLM and AMI to enter into this Agreement and
to consummate the transactions contemplated hereby, the Shareholder and each of
the Companies hereby jointly and severally make the following representations
and warranties to MTLM and AMI:
4.1 Corporate Status. Each of the Companies is a corporation duly
organized and legally existing, and has filed all required annual reports and
paid all required franchise and other taxes and fees, under the laws of the
State of Connecticut. Each of the Companies has the requisite power and
authority to own or lease its property and to carry on its business as now
being conducted. Each of the Companies is legally qualified to transact
business as a foreign corporation in all jurisdictions where the nature of its
respective properties and the conduct of its business requires such
qualification (all of which jurisdictions are listed on Schedule 4.1) and is in
good standing in each of the jurisdictions in which it is so qualified. There
is no pending or threatened proceeding for the dissolution, liquidation,
insolvency or rehabilitation of any of the Companies.
4.2 Power and Authority. Each of the Companies and the Shareholder has
the power and authority to execute and deliver this Agreement, to perform its
respective obligations hereunder and to consummate the transactions
contemplated hereby. Each of the Companies has taken all action necessary to
authorize the execution and delivery of this Agreement, the performance of its
respective obligations hereunder and the consummation of the transactions
contemplated hereby. The Shareholder is a resident of the State of Connecticut
and has the requisite competence to execute and deliver this Agreement and to
perform his obligations hereunder and to consummate the transactions
contemplated hereby.
4.3 Enforceability. Each of this Agreement and the Other Agreements has
been or will have been at the time of Closing duly executed and delivered by
each of the Companies and the Shareholder and constitutes or will constitute
the legal, valid and binding obligation of each of them, enforceable against
them in accordance with their respective terms.
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4.4 No Restrictions. There are no proxies, voting rights, Contracts or
other agreements or understandings with respect to the voting of shares in any
of the Companies or the transfer of the Purchased Assets other than as set
forth in this Agreement.
4.5 Capitalization of the Companies; Shareholder. The Shareholder is the
holder beneficially and of record of all issued and outstanding shares of
capital stock of Aerospace and Security, and the Shareholder owns such shares
as set forth on Schedule 4.5, free and clear of all Liens, restrictions and
claims of any kind, except as set forth on Schedule 4.5. Aerospace is the
holder beneficially and of record of all issued and outstanding shares of
capital stock of Titanium, and Aerospace owns such shares as set forth in
Schedule 4.5 free and clear of all Liens, restrictions and claims of any kind.
4.6 No Violation. Except as set forth on Schedule 4.6 and upon
compliance with any applicable requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976 and the rules and regulations promulgated thereunder
(the "HSR ACT"), the execution and delivery of this Agreement by each of the
Companies and the Shareholder, the performance by each of them of their
respective obligations hereunder and the consummation by them of the
transactions contemplated by this Agreement will not: (i) contravene any
provision of the certificate of incorporation or bylaws of the respective
Company; (ii) violate or conflict with any law, statute, ordinance, rule,
regulation, decree, writ, injunction, judgment or order of any Governmental
Authority or of any arbitration award which is either applicable to, binding
upon or enforceable against any of the Companies or the Shareholder; (iii)
conflict with, result in any breach of, or constitute a default (or an event
which would, with the passage of time or the giving of notice or both,
constitute a default) under, or give rise to a right to terminate, amend,
modify, abandon or accelerate, any Contract which is applicable to, binding
upon or enforceable against any of the Companies or the Shareholder; (iv)
result in or require the creation or imposition of any Lien upon or with
respect to any of the property or assets of any of the Companies; or (v)
require the consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Authority, any court or tribunal or any other
Person, except any SEC and other filings required to be made by MTLM.
4.7 Records. The copies of the respective certificate of incorporation
and bylaws of each of the Companies which were provided to MTLM are true,
accurate and complete and reflect all amendments made through the date of this
Agreement. The minute books for each of the Companies provided to MTLM for
review were correct and complete as of the date of such review, no further
entries have been made through the date of this Agreement, such minute books
contain the true signatures of the persons purporting to have signed them, and
such minute books contain an accurate record of all corporate actions of the
shareholders and directors (and any committees thereof) of each of the
Companies taken by written consent or at a meeting within ten (10) years of
the date hereof. All material corporate actions taken by each of the Companies
have been duly authorized or ratified. All accounts, books, ledgers and
official and other records of each of the Companies within ten (10) years of
the date hereof have been fully, properly and
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accurately kept and completed in all material respects, and there are no
material inaccuracies or discrepancies of any kind contained therein.
4.8 Subsidiaries. Except as set forth on Schedule 4.8, none of the
Companies owns, directly or indirectly, any outstanding voting securities of or
other interests in, or controls, any other corporation, partnership, joint
venture or other business entity. Except as set forth on Schedule 4.8, none of
the Companies has any liabilities or obligations, whether accrued, absolute,
contingent or otherwise, arising from its interest in the entities set forth on
such schedule.
4.9 Financial Statements. The Shareholder has delivered to MTLM: (i)
the financial statements of each of the Companies, except Security, as of May
31, 1997, including the notes thereto, audited by Coopers & Xxxxxxx L.L.P., and
the unaudited financial statements of Security as of May 31, 1997, and (ii) the
August 31, 1997 unaudited financial statements of each of the Companies
(collectively, the "FINANCIAL STATEMENTS"), copies of which are attached as
Schedule 4.9 hereto. The balance sheets dated as of August 30, 1997, included
in the Financial Statements are referred to herein as the "CURRENT BALANCE
SHEET". The Financial Statements fairly present the consolidated financial
position of each of the Companies (except Security) at each of the balance
sheet dates and the results of operations for the periods covered thereby and,
except as set forth in Schedule 4.9, have been prepared in accordance with GAAP
consistently applied throughout the periods indicated. Except as set forth in
Schedule 4.9, the books and records of each of the Companies fully and fairly
reflect the transactions, properties, assets and liabilities of the respective
Company. Except as set forth in Schedule 4.9, there are no material special or
non-recurring items of income or expense during the periods covered by the
Financial Statements, and the balance sheets included in the Financial
Statements do not reflect any writeup or revaluation increasing the book value
of any assets, except as specifically disclosed in the notes thereto. Except
as set forth in Schedule 4.9, the Financial Statements reflect all adjustments
necessary for a fair presentation of the financial information contained
therein.
4.10 Changes Since the Current Balance Sheet Date. Except as disclosed
in Schedule 4.10, since the date of the Current Balance Sheet, none of the
Companies has: (i) sold, leased or transferred any of its properties or assets
other than in the ordinary course of business consistent with past practice;
(ii) made any payment in respect of its liabilities other than in the ordinary
course of business consistent with past practice; (iii) incurred any
obligations or liabilities (including any indebtedness) or entered into any
transaction or series of transactions involving in excess of $10,000 in the
aggregate out of the ordinary course of business, except for this Agreement and
the transactions contemplated hereby; (iv) suffered any theft, damage,
destruction or casualty loss, not covered by insurance and for which a timely
claim was filed, in excess of $10,000 in the aggregate; (v) suffered any
extraordinary losses (whether or not covered by insurance); (vi) waived,
cancelled, compromised or released any rights having a value in excess of
$10,000 in the aggregate; (vii) made or adopted any change in its accounting
practices or policies; (viii) made any adjustment to its books and records
other than in respect of the conduct of its business activities in the
ordinary course of business consistent with past practice; (ix) entered into
any transaction with any Affiliate other than intercompany transactions in the
ordinary course of business consistent with past practice; (x) entered into any
employment agreement; (xi)
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terminated, amended or modified any agreement involving an amount in excess of
$50,000; (xii) imposed any security interest or other Lien on any of its assets
other than in the ordinary course of business consistent with past practice;
(xiii) delayed paying any account payable which is due and payable except to the
extent being contested in good faith and except in the ordinary course of its
business consistent with past practice; or (xiv) made or pledged any charitable
contribution other than in the ordinary course of business consistent with past
practice.
4.11 Liabilities. Except as set forth on Schedule 4.11, none of the
Companies has any liabilities or obligations, whether accrued, absolute,
contingent or otherwise, except: (i) to the extent reflected or taken into
account in the Current Balance Sheet and not heretofore paid or discharged;
(ii) to the extent specifically set forth in or incorporated by express
reference in any of the Schedules attached hereto; (iii) liabilities incurred
in the ordinary course of business consistent with past practice since the date
of the Current Balance Sheet (none of which relates to breach of contract,
breach of warranty, tort, infringement or violation of law, or which arose out
of any action, suit, claim, governmental investigation or arbitration
proceeding); (iv) normal accruals, reclassifications, and audit adjustments
which would be reflected on an audited financial statement and which would not
be material in the aggregate; and (v) liabilities incurred in the ordinary
course of business prior to the date of the Current Balance Sheet which, in
accordance with GAAP consistently applied, were not recorded thereon.
4.12 Litigation. Except as set forth on Schedule 4.12 or Schedule 4.13,
there is no action, suit, or other legal or administrative proceeding or
governmental investigation pending or threatened by or against the Companies or
the Shareholder or anticipated or contemplated by the Companies or the
Shareholder, nor, to the best knowledge of the Companies and the Shareholder,
is there any such action, suit, or other legal or administrative proceeding or
governmental investigation anticipated or contemplated against the Companies or
the Shareholder, affecting any of the Companies or any of their respective
properties or assets, or the Shareholder, or which question the validity or
enforceability of this Agreement or the transactions contemplated hereby, and
to the best knowledge of the Shareholder and each of the Companies, there is no
basis for any of the foregoing. Except as set forth in Schedule 4.12 or
Schedule 4.13, there are no outstanding orders, decrees or stipulations issued
by any Governmental Authority in any proceeding to which any of the Companies
is or was a party which have not been complied with in full or which continue
to impose any material obligations on any of the Companies.
4.13 Environmental Matters. Except as set forth on Schedule 4.13:
(a) Each of the Companies is and has at all times been in material
compliance with all Environmental, Health and Safety Laws (as defined
herein) governing its business, operations, properties and assets,
including, without limitation, Environmental, Health and Safety Laws with
respect to discharges into the ground water, surface water and soil,
emissions into the ambient air, and generation, accumulation, storage,
treatment, transportation, transfer, labeling, handling, manufacturing,
use, spilling, leaking, dumping, discharging, release or disposal of
Hazardous Substances (as defined herein), or other Waste (as defined
herein). None of the Companies is currently liable for any penalties,
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fines or forfeitures for failure to comply with any Environmental, Health
and Safety Laws. Each of the Companies is in material compliance with
all notice, record keeping and reporting requirements of all
Environmental, Health and Safety Laws, and has complied with all
informational requests or demands arising under the Environmental, Health
and Safety Laws.
(b) Each of the Companies has obtained, or caused to be obtained,
and is in material compliance with, all licenses, certificates, permits,
approvals and registrations (collectively "LICENSES") required by the
Environmental, Health and Safety Laws for the ownership of its properties
and assets and the operation of its business as presently conducted,
including, without limitation, all air emission, water discharge, water
use and solid waste, hazardous waste and other Waste generation,
transportation, transfer, storage, treatment or disposal Licenses, and is
in compliance in all material respects with all the terms, conditions and
requirements of such Licenses, and copies of such Licenses have been
provided to MTLM. There are no administrative or judicial investigations,
notices, claims or other proceedings pending or threatened by any
Governmental Authority or third parties against any of the Companies,
their respective businesses, operations, properties, or assets, which
question the validity or entitlement of any of the Companies to any
License required by the Environmental, Health and Safety Laws for the
ownership of each of the respective properties and assets of each of the
Companies and the operation of their respective business or wherein an
unfavorable decision, ruling or finding could have a Material Adverse
Effect on the Purchased Assets, the Business or any of the Companies, or
which would impose any liability upon MTLM in the event that the
transaction contemplated by this Agreement closes.
(c) None of the Companies has received or is aware of any
non-compliance order, warning letter, investigation, notice of violation,
claim, suit, action, judgment, or administrative or judicial proceeding
pending or threatened against or involving any of the Companies, their
respective business, operations, properties, or assets, issued by any
Governmental Authority or third party with respect to any Environmental,
Health and Safety Laws in connection with the ownership by any of the
Companies of its properties or assets or the operation of its business,
which has not been resolved to the satisfaction of the issuing
Governmental Authority or third party in a manner that would not impose
any obligation, burden or continuing liability on MTLM in the event that
the transaction contemplated by this Agreement closes, or which could
have a Material Adverse Effect on the Purchased Assets, the Business or
any of the Companies.
(d) Each of the Companies is in full compliance with, and is not in
breach of or default under any applicable writ, order, judgment,
injunction, governmental communication or decree issued pursuant to the
Environmental, Health and Safety Laws and no event has occurred or is
continuing which, with the passage of time or the giving of notice or
both, would constitute such non-compliance, breach or default thereunder,
or affect the Business or the Purchased Assets.
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(e) None of the Companies has generated, manufactured, used,
transported, transferred, stored, handled, treated, spilled, leaked,
dumped, discharged, released or disposed, nor has it allowed or arranged
for any third parties to generate, manufacture, use, transport, transfer,
store, handle, treat, spill, leak, dump, discharge, release or dispose
of, Hazardous Substances or other waste to or at any location other than
a site lawfully permitted to receive such Hazardous Substances or other
waste for such purposes, nor has it performed, arranged for or allowed by
any method or procedure such generation, manufacture, use,
transportation, transfer, storage, treatment, spillage, leakage, dumping,
discharge, release or disposal in contravention of any Environmental,
Health and Safety Laws. None of the Companies has generated,
manufactured, used, stored, handled, treated, spilled, leaked, dumped,
discharged, released or disposed of, or allowed or arranged for any
third parties to generate, manufacture, use, store, handle, treat, spill,
leak, dump, discharge, release or dispose of, Hazardous Substances or
other waste upon property currently or previously owned or leased by it,
except as permitted by law. For purposes of this Agreement, the term
"Hazardous Substances" shall be construed broadly to include any toxic or
hazardous substance, material, or waste, and any other contaminant,
pollutant or constituent thereof, whether liquid, solid, semi-solid,
sludge and/or gaseous, including without limitation, chemicals, compounds,
metals, by-products, pesticides, asbestos containing materials, petroleum
or petroleum products, and polychlorinated biphenyls, the presence of
which requires investigation or remediation under any Environmental,
Health and Safety Laws or which are or become regulated, listed or
controlled by, under or pursuant to any Environmental Health and Safety
Laws, including, without limitation, the United States Department of
Transportation Table (49 CFR 172, 101) or by the Environmental Protection
Agency as hazardous substances (40 CFR Part 302) and any amendments
thereto; the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendment and
Reauthorization Act of 1986, 42 U.S.C. Section 9601, et seq. (hereinafter
collectively "CERCLA"); the Solid Waste Disposal Act, as amended by the
Resource Conversation and Recovery Act of 1976 and subsequent Hazardous
and Solid Waste Amendments of 1984, 42 U.S.C. Section 6901 et seq.
(hereinafter, collectively "RCRA"); the Hazardous Materials Transportation
Act, as amended, 49 U.S.C. Section 1801, et seq.; the Clean Water Act, as
amended, 33 U.S.C. Section 1311, et seq.; the Clean Air Act, as amended
(42 U.S.C. Section 7401-7642); Toxic Substances Control Act, as amended,
15 U.S.C. Section 2601 et seq.; the Federal Insecticide, Fungicide, and
Rodenticide Act as amended, 7 U.S.C. Section 136-136y ("FIFRA"); the
Emergency Planning and Community Right-to-Know Act of 1986 as amended, 42
U.S.C. Section 11001, et seq. (Title III of XXXX) ("EPCRA"); the
Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. Section
651, et seq. ("OSHA"); any similar state statute, or any future amendments
to, or regulations implementing such statutes, laws, ordinances, codes,
rules, regulations, orders, rulings, or decrees, or which has been or
shall be determined or interpreted at any time by any Governmental
Authority to be a hazardous or toxic substance regulated under any other
statute, law, regulation, order, code, rule, order, or decree. For
purposes of this Section 4.13, the term "Waste" shall be construed broadly
to include agricultural wastes, biomedical wastes, biological wastes,
bulky wastes, construction and demolition debris, garbage,
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household wastes, industrial solid wastes, liquid wastes, recyclable
materials, sludge, solid wastes, special wastes, used oils, white goods,
and yard trash.
(f) None of the Companies has caused, allowed to be caused or
permitted, either by action or inaction, a Release or Discharge, or
threatened Release or Discharge, of any Hazardous Substance on, into or
beneath the surface of any parcel of the Purchased Assets, the Owned
Premises or the Leased Premises or to any properties adjacent thereto.
There has not occurred, nor is there presently occurring, a Release or
Discharge, or threatened Release or Discharge, of any Hazardous Substance
on, into or beneath the surface of any portion of the Owned Premises or
the Leased Premises or to any properties adjacent thereto. For purposes
of this Section, the terms "Release" and "Discharge" shall have the
meanings given them in the Environmental, Health and Safety Laws.
(g) None of the Companies has generated, handled, manufactured,
treated, stored, used, shipped, transported, transferred, or disposed of,
nor have they allowed or arranged, by contract, agreement or otherwise,
for any third parties to generate, handle, manufacture, treat, store,
use, ship, transport, transfer or dispose of, any Hazardous Substance or
other Waste to or at a site which, pursuant to CERCLA or any similar
state law: (i) has been placed on the National Priorities List or its
state equivalent; or (ii) the Environmental Protection Agency or the
relevant state agency has notified any of the Companies that it has
proposed or is proposing to place on the National Priorities List or its
state equivalent. None of the Companies nor the Shareholder has received
notice, and none of the Companies nor the Shareholder has knowledge of
any facts which could give rise to any notice, that any of the Companies
is a potentially responsible party for a federal or state environmental
cleanup site or for corrective action under CERCLA, RCRA or any other
applicable Environmental Health and Safety Laws. None of the Companies
has submitted nor was required to submit any notice pursuant to Section
103(c) of CERCLA with respect to the Leased Premises, the Owned Premises
or the Purchased Assets. None of the Companies has received any written
or oral request for information in connection with any federal or state
environmental cleanup site, or in connection with any of the real
property or premises where any of the Companies has transported,
transferred or disposed of other Wastes. None of the Companies has been
required to and has not undertaken any response or remedial actions or
clean-up actions of any kind at the request of any Governmental
Authorities or at the request of any other third party. None of the
Companies has any liability under any Environmental, Health and Safety
Laws for personal injury, property damage, natural resource damage, or
clean up obligations.
(h) None of the Companies uses, or has used, any Aboveground Storage
Tanks or Underground Storage Tanks, and there are not now nor have there
ever been any Underground Storage Tanks. For purposes of this Section
4.13, the terms "Aboveground Storage Tanks" and "Underground Storage
Tanks" shall have the meanings given them in Section 6901 et seq., as
amended, of RCRA, or any applicable state or local statute, law,
ordinance, code, rule, regulation, order ruling, or decree governing
Aboveground Storage Tanks or Underground Storage Tanks.
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(i) Schedule 4.13 identifies, regardless of their materiality: (i)
all environmental audits, assessments or occupational health studies
undertaken by any of the Companies or their respective agents, or by the
Shareholder, or by any Governmental Authority, or by any third party,
relating to or affecting any of the Companies or any of the Leased
Premises, the Owned Premises or the Purchased Assets; (ii) the results of
any ground, water, soil, air or asbestos monitoring undertaken by the any
of the Companies or their respective agents, or by the Shareholder, or by
any Governmental Authority, or by any third party, relating to or
affecting the Company or any of the Leased Premises, the Owned Premises
or the Purchased Assets; (iii) all written communications between any of
the Companies and any Governmental Authority arising under or related to
Environmental, Health and Safety Laws; and (iv) all citations issued
under OSHA, or similar state or local statutes, laws, ordinances, codes,
rules, regulations, orders, rulings, or decrees, relating to or affecting
any of the Companies or any of the Leased Premises, the Owned Premises
or the Purchased Assets.
(j) Schedule 4.13 contains a recent survey, including
recommendations for management, of "friable asbestos" (as such term is
identified under the Environmental, Health and Safety Laws) present on
the Owned Premises and Leased Premises. The recommendations have been
fully implemented as of the date of this Agreement. Each of the
Companies has operated and continues to operate in compliance with all
Environmental, Health & Safety Laws governing the handling, use and
exposure to and disposal of asbestos or asbestos-containing materials.
There are no claims, actions, suits, governmental investigations or
proceedings before any Governmental Authority or third party pending, or
threatened against or directly affecting any of the Companies, or any of
their respective assets or operations relating to the use, handling or
exposure to and disposal of asbestos or asbestos-containing materials in
connection with their assets and operations.
(k) As used in this Agreement, "Environmental, Health and Safety
Laws" means all federal, state, regional or local statutes, laws, rules,
regulations, codes, orders, plans, injunctions, decrees, rulings, and
changes or ordinances or judicial or administrative interpretations
thereof, whether currently in existence or hereafter enacted or
promulgated, any of which govern (or purport to govern) or relate to
pollution, protection of the environment, public health and safety, air
emissions, water discharges, hazardous or toxic substances, solid or
hazardous waste or occupational health and safety, as any of these terms
are or may be defined in such statutes, laws, rules, regulations, codes,
orders, plans, injunctions, decrees, rulings and changes or ordinances,
or judicial or administrative interpretations thereof, including, without
limitation, RCRA, CERCLA, the Hazardous Materials Transportation Act, the
Toxic Substances Control Act, the Clean Air Act, the Clean Water Act,
FIFRA, EPCRA and OSHA, as any of them may be or have been amended from
time to time, together with all regulations promulgated thereunder. In
the event any Environmental, Health and Safety Law is amended to broaden
the meaning of any term defined thereby, such broader meaning shall apply
subsequent to the effective date of such amendment.
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(l) Schedule 4.13 identifies the operations and activities, and
locations thereof, which have been conducted and are being conducted by
each of the Companies on any of the Purchased Assets, the Owned Premises
or the Leased Premises which have involved the generation, accumulation,
storage, treatment, transportation, labeling, handling, manufacturing,
use, spilling, leaking, dumping, discharging, release or disposal of
Hazardous Substances.
(m) Schedule 4.13 identifies the locations to which each of the
Companies has transferred, transported, hauled, moved, or disposed of
Waste over the past five years and the types and volumes of Waste
transferred, transported, hauled, moved, or disposed of to each such
location.
(n) None of the Purchased Assets, the Owned Premises or Leased
Premises presently includes, or has been constructed upon, any "wetlands"
as defined under applicable Environmental, Health and Safety Laws.
(o) Schedule 4.13 identifies all Material:
(i) Remediation of any and all Hazardous Substances Discharged
or Released from the operations of the Business and any other
investigative, clean-up and corrective actions, and the planning
thereof, including without limitation, corrective, remedial or
removal actions, and pre- or post-remediation monitoring, conducted
with respect to any Environmental Condition ("REMEDIAL ACTION"); or
(ii) Claims, citations, notices of violation or similar
notices, actions, suits, orders, governmental investigations or
proceedings, whether administrative or judicial and whether civil
or criminal, alleging the violation of any Environmental, Health or
Safety Laws ("LEGAL ACTION").
For purposes of this Section 4.13(o), the term "MATERIAL" when
applied to a Remedial Action shall mean: (i) any Remedial Action
(excluding attorneys fees) undertaken as a result of any Legal Action,
and for which the potential costs have exceeded or could reasonably be
expected to exceed $100,000; (ii) any Remedial Action not undertaken as a
result of any Legal Action, and for which the potential costs have
exceeded or could reasonably be expected to exceed $500,000. For purposes
of this Section 4.13(o), the term "MATERIAL" when applied to a Legal
Action shall mean: (i) any Legal Action to which any Governmental
Authority is a party, and for which the potential liability to the
Companies or the Shareholder collectively has exceeded or could
reasonably be expected to exceed $100,000; and (ii) any Legal Action to
which any Governmental Authority is not a party, and for which the
potential liability to the Companies or the Shareholder (excluding
attorneys fees) collectively has exceeded or could reasonably be expected
to exceed $500,000.
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(p) During the previous five years: (i) no employees, agents or
independent contractors of the Companies have died or sustained severe
personal injuries on the Owned Premises or Leased Premises or in the
course of their employment or engagement by the Companies; and (ii) none
of the Companies nor any of their properties has been the subject of
fines, penalties or charges issued or assessed by OSHA in excess of
$20,000.
4.14 Real Estate.
(a) None of the Companies owns any real property, or any interest
therein except as set forth on Schedule 4.14(a), which Schedule sets
forth the location and size of, and principal improvements and buildings
on, the Owned Premises.
(b) Schedule 4.14(b) sets forth a list of all leases, licenses or
similar agreements with respect to interests in real estate ("LEASES") to
which any of the Companies is a party (copies of which have previously
been furnished to MTLM), in each case, setting forth: (i) the lessor and
lessee thereof and the date and term of each of the Leases; (ii) the
legal description or street address of each property covered thereby; and
(iii) a brief description (including size and function) of the principal
improvements and buildings thereon (the "LEASED PREMISES"), all of which
are within the property set-back and building lines of the respective
property. The Leases are in full force and effect and have not been
amended except as set forth on Schedule 4.14(b), and no party thereto is
in default or breach under any such Lease. No event has occurred which,
with the passage of time or the giving of notice or both, would cause a
material breach of or default under any of such Leases. To the best
knowledge of the Companies and the Shareholder, there is no breach or
anticipated breach by any other party to such Leases. Except as set
forth on Schedule 4.14(b), with respect to each such Leased Premises:
(i) each of the Companies has valid leasehold interests in
the Leased Premises leased by it, which leasehold interests are free
and clear of any Liens, covenants and easements or title defects of
any nature whatsoever;
(ii) the portions of the buildings located on the Leased
Premises that are used in the business of each of the Companies are
in good repair and condition, normal wear and tear excepted, and
are in the aggregate sufficient to satisfy the respective Company's
current and reasonably anticipated normal business activities as
conducted thereat;
(iii) each of the Leased Premises: (a) has direct access to
public roads or access to public roads by means of a perpetual
access easement, such access being sufficient to satisfy the
current and reasonably anticipated normal transportation
requirements of each Company's respective business as presently
conducted at such parcel; and (b) is served by all utilities in
such quantity and quality as are sufficient to satisfy the current
normal business activities as conducted at such parcel; and
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(iv) none of the Companies has received notice of: (a) any
condemnation proceeding with respect to any portion of the Leased
Premises or any access thereto, and to the best knowledge of the
Companies and the Shareholder, no such proceeding is contemplated
by any Governmental Authority; or (b) any special assessment which
may affect any of the Leased Premises and to the best knowledge of
the Companies and the Shareholder, no such special assessment is
contemplated by any Governmental Authority.
(c) all of the Purchased Assets are located on the Owned Premises,
the Leased Premises or the other locations identified on Schedule
4.14(c).
4.15 Good Title to, Condition of and Adequacy of Purchased Assets.
(a) Except as set forth on Schedule 4.15, each of the Companies has
good and marketable title to all of the Purchased Assets, free and clear
of any Liens (other than Permitted Liens) or restrictions on use.
(b) The Purchased Assets are in good operating condition, normal
wear and tear excepted, and have been maintained in accordance with sound
industry practices.
(c) Except for the Owned Premises, the Purchased Assets constitute
all of the assets and properties necessary for the conduct of the
business of each of the Companies in the manner in which and to the
extent to which such business is currently being conducted.
4.16 Compliance with Laws.
(a) Except as set forth in Schedule 4.13 or Schedule 4.16, each of
the Companies is and has been in compliance in all material respects with
all laws, regulations and orders applicable to it, its respective
business and operations (as conducted by it now and in the past), and the
Purchased Assets. Except as set forth on Schedule 4.13 or Schedule 4.16,
none of the Companies has been cited, fined or otherwise notified of any
asserted past or present failure to comply with any laws, regulations or
orders which have not been permanently cured and no proceeding with
respect to any such violation is pending or threatened.
(b) None of the Companies has made any payment of funds in
connection with their business which is prohibited by law, and no funds
have been set aside to be used in connection with their business for any
payment prohibited by law.
(c) None of the Companies is subject to any Contract, decree or
injunction which restricts the continued operation of any business or the
expansion thereof to other geographical areas, customers and suppliers or
lines of business.
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4.17 Labor and Employment Matters. Schedule 4.17 sets forth the name,
address, social security number and current rate of compensation of each of the
employees of each of the Companies. Except as set forth in Schedule 4.17, none
of the Companies is a party to or bound by any collective bargaining agreement
or any other agreement with a labor union, and there have been no efforts by
any labor union during the 24 months prior to the date hereof to organize any
employees of any of the Companies into one or more collective bargaining units.
There is no pending or threatened labor dispute, strike or work stoppage which
affects or which may affect the business of any of the Companies or which may
interfere with their respective continued operations. None of the Companies
has within the last 24 months committed any unfair labor practice as defined in
the National Labor Relations Act, as amended, and there is no pending or
threatened charge or complaint against any of the Companies by or with the
National Labor Relations Board or any representative thereof. There has been
no strike, walkout or work stoppage involving any of the employees of any
Company during the 24 months prior to the date hereof. The Shareholder is not
aware that any executive or key employee or group of employees has any plans to
terminate his, her or their employment with any of the Companies as a result of
this Agreement or otherwise. Schedule 4.17 contains detailed information about
each contract, agreement or plan of the following nature, whether formal or
informal, and whether or not in writing, to which any of the Companies is a
party or under which it has an obligation: (i) employment agreements, (ii)
employee handbooks, policy statements and similar plans, (iii) noncompetition
agreements, and (iv) consulting agreements. None of the parties to any of the
contracts or agreements listed on Schedule 4.17 is an Affiliate of the
Shareholder, any Company or any of their respective directors, employees,
officers, relatives or Affiliates, except by reason of the contract or
agreement listed on Schedule 4.17. Each of the Companies has complied with
applicable laws, rules and regulations relating to employment, civil rights and
equal employment opportunities, including but not limited to, the Civil Rights
Act of 1964, the Fair Labor Standards Act and the Worker Adjustment and
Retraining Notification Act of 1988.
4.18 Employee Benefit Plans.
(a) Employee Benefit Plans. Schedule 4.18 contains a list setting
forth each employee benefit plan or arrangement of each of the Companies,
including but not limited to employee pension benefit plans, as defined
in Section 3(2) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), multiemployer plans, as defined in Section 3(37) of
ERISA, employee welfare benefit plans, as defined in Section 3(1) of
ERISA, deferred compensation plans, stock option plans, bonus plans,
stock purchase plans, hospitalization, disability and other insurance
plans, severance or termination pay plans and policies, whether or not
described in Section 3(3) of ERISA, in which employees, their spouses or
dependents, of each of the Companies participate ("EMPLOYEE BENEFIT
PLANS") (true and accurate copies of which, together with the most recent
annual reports on Form 5500 and summary plan descriptions with respect
thereto, were furnished to MTLM).
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(b) Compliance with Law. With respect to each Employee Benefit
Plan: (i) each has been administered in all material respects in
compliance with its terms and with all applicable laws, including, but
not limited to, ERISA and the Internal Revenue Code of 1986, as amended
(the "CODE"); (ii) no actions, suits, claims or disputes are pending, or
threatened; (iii) no audits, inquiries, reviews, proceedings, claims, or
demands are pending with any governmental or regulatory agency; (iv)
there are no facts which could give rise to any material liability in the
event of any such investigation, claim, action, suit, audit, review, or
other proceeding; (v) all reports, returns, and similar documents
required to be filed with any governmental agency or distributed to any
plan participant have been duly or timely filed or distributed; and (vi)
no "prohibited transaction" has occurred within the meaning of the
applicable provisions of ERISA or the Code.
(c) Qualified Plans. With respect to each Employee Benefit Plan
intended to qualify under Code Section 401(a): (i) the Internal Revenue
Service has issued a favorable determination letter, true and correct
copies of which have been furnished to MTLM, that such plans are
qualified and exempt from federal income taxes; (ii) no such
determination letter has been revoked nor has revocation been threatened,
nor has any amendment or other action or omission occurred
with respect to any such plan since the date of its most recent
determination letter or application therefor in any respect which would
adversely affect its qualification or materially increase its costs;
(iii) no such plan has been amended in a manner that would require
security to be provided in accordance with Section 401(a)(29) of the
Code; (v) no reportable event (within the meaning of Section 4043 of
ERISA) has occurred, other than one for which the 30-day notice
requirement has been waived; and (vi) as of the Effective Time, the
present value of all liabilities that would be "benefit liabilities"
under Section 4001(a)(16) of ERISA if benefits described in Code Section
411(d)(6)(B) were included will not exceed the then current fair market
value of the assets of such plan (determined using the actuarial
assumptions used for the most recent actuarial valuation for such plan);
(vii) except as disclosed on Schedule 4.18, all contributions to, and
payments from and with respect to such plans, which may have been
required to be made in accordance with such plans and, when applicable,
Section 302 of ERISA or Section 412 of the Code, have been timely made;
(viii) all such contributions to the plans, and all payments under the
plans (except those to be made from a trust qualified under Section
401(a) of the Code) and all payments with respect to the plans
(including, without limitation, PBGC and insurance premiums) for any
period ending before the Closing Date that are not yet, but will be,
required to be made are properly accrued and reflected on the Current
Balance Sheet or are disclosed on Schedule 4.18.
(d) Multiemployer Plans. None of the Companies contributes to, or
within the past ten years has contributed to, a multiemployer plan
described in Section 3(37) of ERISA.
(e) Welfare Plans. Other than as disclosed in Schedule 4.18: (i)
none of the Companies is obligated under any employee welfare benefit
plan as described in Section 3(1) of ERISA ("WELFARE PLAN"), whether or
not disclosed in Schedule 4.18, to provide
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medical or death benefits with respect to any employee or former
employee of any of the Companies or its predecessors after termination of
employment; (ii) each of the Companies has complied in all material
respects with the notice and continuation coverage requirements of Section
4980B of the Code and the regulations thereunder with respect to each
Welfare Plan that is, or was during any taxable year for which the statute
of limitations on the assessment of federal income taxes remains, open, by
consent or otherwise, a group health plan within the meaning of Section
5000(b)(1) of the Code; and (iii) there are no reserves, assets, surplus
or prepaid premiums under any Welfare Plan which is an Employee
Benefit Plan. The consummation of the transactions contemplated by this
Agreement will not entitle any individual to severance pay, and, will not
accelerate the time of payment or vesting, or increase the amount of
compensation, due to any individual.
(f) Controlled Group Liability. None of the Companies nor any
entity that would be aggregated with any of the Companies under Code
Section 414(b), (c), (m) or (o): (i) has ever terminated or withdrawn
from an employee benefit plan under circumstances resulting (or expected
to result) in liability to the Pension Benefit Guaranty Corporation
("PBGC"), the fund by which the employee benefit plan is funded, or any
employee or beneficiary for whose benefit the plan is or was maintained
(other than routine claims for benefits); (ii) has any assets subject to
(or expected to be subject to) a lien for unpaid contributions to any
employee benefit plan; (iii) has failed to pay premiums to the PBGC when
due; (iv) is subject to (or expected to be subject to) an excise tax
under Code Section 4971; (v) has engaged in any transaction which would
give rise to liability under Section 4069 or Section 4212(c) of ERISA; or
(vi) has violated Code Section 4980B or Section 601 through 608 of ERISA.
(g) Other Liabilities. Except as set forth on Schedule 4.18: (i)
none of the Employee Benefit Plans obligates any of the Companies to pay
separation, severance, termination or similar benefits solely as a result
of any transaction contemplated by this Agreement or solely as a result
of a "change of control" (as such term is defined in Section 280G of the
Code); (ii) all required or discretionary (in accordance with historical
practices) payments, premiums, contributions, reimbursements, or accruals
for all periods ending prior to or as of the Effective Date shall have
been made or properly accrued on the Current Balance Sheet or will be
properly accrued on the books and records of each of the Companies as of
the Effective Date; and (iii) none of the Employee Benefit Plans has any
unfunded liabilities which are not reflected on the Current Balance Sheet
or the books and records of any of the Companies.
4.19 Tax Matters. Except as set forth in Schedule 4.19 hereto, all Tax
Returns required to be filed prior to the date hereof with respect to each of
the Companies or any of their respective income, properties, franchises or
operations have been filed, each such Tax Return has been prepared in
compliance with all applicable laws and regulations, and all such Tax Returns
are true, complete and accurate in all respects. All Taxes due and payable by
or with respect to each of the Companies have been paid or accrued on the
Current Balance Sheet or will be accrued on its
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books and records as of the Closing. Except as set forth in Schedule 4.19
hereto: (i) with respect to each taxable period of each Company, no taxable
period has been audited by the relevant taxing authority; (ii) no deficiency or
proposed adjustment which has not been settled or otherwise resolved for any
amount of Taxes has been asserted or assessed by any taxing authority against
any of the Companies; (iii) none of the Companies has consented to extend the
time in which any Taxes may be assessed or collected by any taxing authority;
(iv) none of the Companies has requested or been granted an extension of the
time for filing any Tax Return to a date later than the Closing Date; (v) there
is no action, suit, taxing authority proceeding, or audit or claim for refund
now in progress, pending or threatened against or with respect to any of the
Companies regarding Taxes; (vi) none of the Companies has made an election or
filed a consent under Section 341(f) of the Code (or any corresponding provision
of state, local or foreign law) on or prior to the Closing Date; (vii) there are
no Liens for Taxes (other than for current Taxes not yet due and payable) upon
the assets of the any of the Companies; (viii) none of the Companies will be
required (A) as a result of a change in method of accounting for a taxable
period ending on or prior to the Closing Date, to include any adjustment under
Section 481(c) of the Code (or any corresponding provision of state, local or
foreign law) in taxable income for any taxable period (or portion thereof)
beginning after the Closing Date or (B) as a result of any "closing agreement,"
as described in Section 7121 of the Code (or any corresponding provision of
state, local or foreign law), to include any item of income or exclude any item
of deduction from any taxable period (or portion thereof) beginning after the
Closing Date; (ix) none of the companies is a party to or bound by any tax
allocation or tax sharing agreement or has any current or potential contractual
obligation to indemnify any other Person with respect to Taxes; (x) there is no
basis for any assessment, deficiency notice, 30-day letter or similar notice
with respect to any Tax to be issued to the any of the Companies with respect to
any period on or before the Closing Date; (xi) none of the Companies has made
any payments, and is or will not become obligated (under any contract entered
into on or before the Closing Date) to make any payments, that will be
non-deductible under Section 280G of the Code (or any corresponding provision of
state, local or foreign law); (xii) none of the Companies has been a United
States real property holding corporation within the meaning of Section 897(c)(2)
of the Code (or any corresponding provision of state, local or foreign law)
during the applicable period specified in Section 897(c)(1)(a)(ii) of the Code
(or any corresponding provision of state, local or foreign law); (xiii) no claim
has ever been made by a taxing authority in a jurisdiction where any of the
Companies does not file Tax Returns that is or may be subject to Taxes assessed
by such jurisdiction; and (xiv) none of the Companies has any permanent
establishment in any foreign country, as defined in the relevant tax treaty
between the United States of America and such foreign country; (xv) true,
correct and complete copies of all income and sales Tax Returns filed by or with
respect to each of the Companies for the past two years have been furnished or
made available to MTLM; (xvi) none of the Companies will be subject to any Taxes
for the period ending at the Closing Date for any period for which a Tax Return
has not been filed imposed pursuant to Section 1374 or Section 1375 of the Code
(or any corresponding provision of state, local or foreign law); and (xvii) no
sales or use tax or property transfer tax (other than sales tax on aircraft,
boats, mobile homes and motor vehicles), non-recurring intangibles tax,
documentary stamp tax or other excise tax (or comparable tax imposed by any
Governmental Authority) will be payable by any of the Companies or MTLM by
virtue of the transactions completed in this Agreement.
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4.20 Insurance. Each of the Companies is covered by valid, outstanding
and enforceable policies of insurance issued to it by reputable insurers
covering its properties, assets and businesses against risks of the nature
normally insured against by businesses in the same or similar lines of business
and in coverage amounts typically and reasonably carried by such businesses
(the "INSURANCE POLICIES"). Such Insurance Policies are in full force and
effect, all premiums due thereon have been paid, and each of the Companies has
complied with the provisions of such Insurance Policies. Schedule 4.20
contains: (i) a complete and correct list of all Insurance Policies and all
amendments and riders thereto (copies of which have been provided to MTLM); and
(ii) a detailed description of each pending claim under any of the Insurance
Policies for an amount in excess of $5,000 that relates to loss or damage to
the properties, assets or businesses of any of the Companies. None of the
Companies has failed to give, in a timely manner, any notice required under any
of the Insurance Policies to preserve its rights thereunder.
4.21 Receivables. All of the Receivables (as hereinafter defined) are
valid and legally binding, represent bona fide transactions and arose in the
ordinary course of business of each of the Companies, as the case may be. All
of the Receivables are good and collectible receivables, without set-off or
counterclaims. Each of the Companies and the Shareholder hereby absolutely and
unconditionally guarantees and agrees to be a surety for the full and prompt
payment to Buyer, no later than ninety (90) days following the Closing, of all
amounts owing under each of the Receivables included in the Purchased Assets,
as more fully identified and described on Schedule 4.21. Each of the Companies
and the Shareholder acknowledge that any failure to perform this guaranty
obligation shall constitute a breach of this Agreement and shall entitle the
Buyer to recover Indemnifiable Damages. Each of the Companies and the
Shareholder agrees: (i) to pay to Buyer, upon demand, all amounts owing under
any Receivables identified on Schedule 4.21 which have not been paid by the
applicable account debtor within ninety (90) days following the Closing; and
(ii) any amounts owing to Buyer from the Companies and the Shareholders under
this Section 4.21 shall be deducted from the Escrow Amount pursuant to the
General Escrow Agreement.
4.22 Licenses and Permits. Each of the Companies possesses all
environmental licenses and permits and all other licenses and required
governmental or official approvals, permits or authorizations (collectively,
the "PERMITS") for its respective Business and operations, including the
operation of the Owned Premises and the Leased Premises, which Permits are
listed on Schedule 4.22. All such Permits are valid and in full force and
effect, each of the Companies is in full compliance with the requirements
thereof, and no proceeding is pending or threatened to revoke or amend any of
them. Schedule 4.22 specifies all Permits which must be obtained by AMI in
order for AMI to own the Purchased Assets and operate the Business of the
Companies consistent with past practice (the "NEW PERMITS"). Except for the
New Permits, none of the Permits is or will be impaired or in any way affected
by the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby, and are freely transferable to AMI and will
be transferred to AMI at closing.
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4.23 Relationships with Customers and Suppliers; Affiliated Transactions.
No current supplier to any of the Companies of any items essential to the
conduct of its business has threatened to terminate its respective business
relationship with it for any reason. Except as set forth on Schedule 4.23,
none of the Companies or the Shareholder has any direct or indirect interest in
any customer, supplier or competitor of any of the Companies, or in any person
from whom or to whom any of the Companies leases real or personal property.
Except as set forth on Schedule 4.23, no officer, director or shareholder of
any of the Companies, nor any person related by blood or marriage to any such
person, nor any entity in which any such person owns any beneficial interest,
is a party to any Contract or transaction with any of the Companies or has any
interest in any property used by any of the Companies.
4.24 Intellectual Property. Schedule 4.24 sets forth a list of all
trademarks, service marks, trade names, copyrights, know-how, patents, trade
secrets, licenses (including licenses for the use of computer software
programs), and other intellectual property used in the conduct of each
Company's business (the "INTELLECTUAL PROPERTY") and all such rights, titles
and interests shall be transferred to AMI at Closing, free and clear of any
Liens or restrictions. Each of the Companies has full legal right, title and
interest in and to all Intellectual Property used in its respective business.
The conduct of the business of each of the Companies as presently conducted,
and the unrestricted conduct and the unrestricted use and exploitation of the
Intellectual Property, does not infringe or misappropriate any rights held or
asserted by any Person, and no Person is infringing on the Intellectual
Property. No payments are required for the continued use of the Intellectual
Property, except as set forth in Schedule 4.24. None of the Intellectual
Property has ever been declared invalid or unenforceable, or is the subject of
any pending or threatened action for opposition, cancellation, declaration,
infringement, or invalidity, unenforceability or misappropriation or like
claim, action or proceeding.
4.25 Contracts. Schedule 4.25 sets forth a list of each Contract to
which each of the Companies is a party or by which its properties or assets are
bound and which is material to its business, assets, properties or prospects
(the "PURCHASED CONTRACTS"), true and correct copies of which have been
provided to MTLM. The copy of each Purchased Contract furnished to MTLM is a
true and complete copy of the document it purports to represent and reflects
all amendments thereto made through the date of this Agreement. Except as set
forth on Schedule 4.25, none of the Companies has violated any of the material
terms or conditions of any Purchased Contract or any term or condition which
would permit termination or material modification of any Purchased Contract,
and all of the covenants to be performed by any other party thereto have been
fully performed and there are no claims for breach or indemnification or notice
of default or termination under any Purchased Contract. Except as set forth on
Schedule 4.25, no event has occurred which constitutes, or after notice or the
passage of time, or both, would constitute, a material default by any of the
Companies under any Purchased Contract, and to the best knowledge of the
Companies and the Shareholder, no such event has occurred which constitutes or
would constitute a material default by any other party. Except as set forth in
Schedule 4.25, all Purchased Contracts are freely assignable to AMI without
notice to or the consent of any third party and, none of the Companies is
subject to any liability or payment resulting from renegotiation of amounts
paid it under any Purchased Contract. As used in this Section, Purchased
Contracts shall include, without limitation:
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(a) loan agreements, indentures, mortgages, pledges, hypothecations,
deeds of trust, conditional sale or title retention agreements, security
agreements, equipment financing obligations or guaranties, or other sources of
contingent liability in respect of any indebtedness or obligations to any other
Person, or letters of intent or commitment letters with respect to same; (b)
contracts obligating any of the Companies to purchase or sell products or
services; (c) leases of real property, and leases of personal property not
cancelable without penalty on notice of 60 days or less or calling for payment
of an annual gross rental exceeding $10,000.00; (d) distribution, sales agency
or franchise or similar agreements, or agreements providing for an independent
contractor's services, or letters of intent with respect to same; (e) employment
agreements, management service agreements, consulting agreements,
confidentiality agreements, noncompetition agreements and any other agreements
relating to any employee, officer or director of any of the Companies; (f)
licenses, assignments or transfers of trademarks, trade names, service marks,
patents, copyrights, trade secrets or know how, or other agreements regarding
proprietary rights or intellectual property; (g) any Contract relating to
pending capital expenditures by any of the Companies; and (h) other material
Contracts or understandings, irrespective of subject matter and whether or not
in writing, not entered into in the ordinary course of business by any of the
Companies and not otherwise disclosed on the Schedules.
4.26 Customer Lists and Recurring Revenue. The Companies have provided a
true, correct and complete list of each of the Companies' 20 largest customers
("MATERIAL CUSTOMERS") and suppliers together with the applicable percentage of
total sales or purchases, as applicable. True, correct and complete copies of
any agreements with such customers or suppliers which are anticipated to endure
beyond the Closing have been furnished by the Shareholder to MTLM. Other than
Material Customers, no customer of any of the Companies as of the date of this
Agreement accounts for more than 3% of the combined annual revenue of such
Company. The list of the Companies' 20 largest customers and suppliers sets
forth each Material Customer's name, address, account number, term of franchise
or agreement, billing cycle, type of service and rates charged.
4.27 Accuracy of Information Furnished to MTLM. No representation,
statement or information made or furnished by the Shareholder or the Companies
to MTLM or any of MTLM's representatives, including those contained in this
Agreement and the various Schedules attached hereto and the other information
and statements referred to herein and previously furnished by any of the
Companies or the Shareholder, contains or shall contain any untrue statement
of a material fact or omits any material fact necessary to make the information
contained therein not misleading, provided, however, that the Companies and the
Shareholder make no representations or warranties as to the accuracy or
completeness of the documents listed on Schedule 4.27, which have been prepared
by persons other than the Companies or the Shareholder, or their
representatives. The Shareholder and the Companies have provided MTLM with
true, accurate and complete copies of all documents listed or described in the
various Schedules attached hereto.
4.28 Investment Intent; Accredited Investor Status; Securities Documents.
The Companies are acquiring their respective interests in MTLM Shares for
their own account for investment and not with a view to, or for the sale in
connection with, any distribution of their
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interest, except in compliance with applicable state and federal securities
laws. Each of the Companies and the Shareholder has been provided, to its or
his satisfaction, the opportunity to discuss the transactions contemplated
hereby with MTLM and has had the opportunity to obtain such information
pertaining to MTLM as has been requested, including but not limited to filings
made by MTLM with the SEC under the Exchange Act. Each of the Companies and the
Shareholder is an "accredited investor" within the meaning of Regulation D
promulgated under the Securities Act. Each of the Companies and the Shareholder
has such knowledge and experience in business and financial matters that it or
he is capable of evaluating the merits and risks of an investment in MTLM
Shares, and is capable of bearing the economic risks of such investment and is
able to bear a complete loss of its investment in MTLM Shares. Each of the
Companies and the Shareholder acknowledges that MTLM Shares have not been
registered under the Securities Act and understands that MTLM Shares must be
held indefinitely unless they are subsequently registered under the Securities
Act or such sale is permitted pursuant to an available exemption from such
registration requirement, in which case the Company desiring to sell the Common
Stock shall first supply to MTLM an opinion of counsel (which counsel shall be
satisfactory to MTLM and in whose opinion counsel to MTLM shall concur) that
such exemption is available. Each of the Companies and the Shareholder
acknowledges that it or he was not induced to acquire MTLM Shares through any
general solicitation or general advertising.
4.29 Business Locations. Except for the Owned Premises, as of the date
hereof, none of the Companies has any office or place of business other than as
identified on Schedules 4.14(a) and 4.14(b) and the principal place of business
and chief executive office (as such terms are used in subsection 9-401 of the
Uniform Commercial Code as enacted in the State of Connecticut as of the date
hereof) are indicated on Schedule 4.14(a) or 4.14(b), and all locations where
the equipment, inventory, chattel paper and books and records of each of the
Companies are located as of the date hereof are fully identified on Schedules
4.14(a) and 4.14(b).
4.30 Names; Prior Acquisitions. All names under which any of the
Companies does business as of the date hereof are specified on Schedule 4.30.
Except as set forth on Schedule 4.30, none of the Companies has changed its
name or used any assumed or fictitious name, or been the surviving entity in a
merger, acquired any business or changed its principal place of business or
chief executive office, within the past 10 years.
4.31 No Commissions. Except as specified on Schedule 4.31, none of the
Companies nor the Shareholder has incurred any obligation for any finder's or
broker's or agent's fees or commissions or similar compensation in connection
with the transactions contemplated hereby.
4.32 Inventory. All Purchased Assets that consist of inventory
(including raw materials and work-in-progress): (i) were acquired in the
ordinary course of business consistent with past practice; (ii) are of a
quality, quantity, and condition useable or saleable in the ordinary course of
business within the respective Company's normal inventory turnover experience;
and (iii) are valued at the lower of cost or net realizable market value. None
of the Companies has any material liability with respect to the return or
repurchase of any goods in the possession of any customer.
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4.33 Identification, Acquisition and Disposition of Assets and
Liabilities. Schedule 4.33(a) sets forth a listing of all of the assets and
properties (including real, personal and mixed) owned by each of the Companies
as of August 31, 1997. Not more than 10 days prior to the Closing Date, the
Companies shall deliver to MTLM a schedule reflecting any additions or
deletions to fixed assets as of such date relating to items which individually
have a value (defined as the higher of book value or fair market value) of
$10,000 or more (the "FIXED ASSET UPDATE SCHEDULE") and a revised Schedule
4.33(a) listing all of the assets and properties of each of the Companies as of
such date. Schedule 4.33(b) sets forth a listing of all of the liabilities of
each of the Companies as of August 31, 1997. Not more than 10 days prior to
the Closing, the Companies shall deliver to MTLM a revised Schedule 4.33(b)
listing all of the liabilities of each of the Companies as of such date. All
additions and deletions reflected in the Fixed Asset Update Schedule shall be
the result of transactions occurring in the ordinary course of business since
August 31, 1997 and no such additions or deletions will violate the covenants
contained in Section 6.1 nor would such additions or deletions have violated
the covenants contained in Section 6.1 if such addition or deletion had
occurred after the date of this Agreement.
4.34 Product Warranty. None of the Companies has any liability or
obligation (and there is no basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, or demand against any of
them giving rise to any liability or obligation) for replacement or repair
thereof or other damages in connection therewith. No product sold, manufactured
or delivered by any of the Companies is subject to any guaranty, warranty, or
other indemnity beyond the applicable standard terms and conditions of sale or
lease. Schedule 4.25 includes copies of the standard terms and conditions of
sale for each of the Companies, including applicable guaranty, warranty, and
indemnity provisions.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
As a material inducement to the Shareholder and each of the Companies to
enter into this Agreement and to consummate the transactions contemplated
hereby, each of MTLM and AMI makes the following representations and warranties
to the Shareholder and each of the Companies:
5.1 Corporate Status. Each of MTLM and AMI is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
5.2 Corporate Power and Authority. Each of MTLM and AMI has, or at the
time closing will have, the corporate power and authority to execute and
deliver this Agreement, to perform its respective obligations hereunder, and
consummate the transactions contemplated hereby. MTLM and AMI have or will
have taken at or prior to Closing all action necessary to authorize the
execution and delivery of this Agreement, the performance of their respective
obligations hereunder and the consummation of the transactions contemplated
hereby. The
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execution and delivery of this Agreement by MTLM and AMI, the performance by
them of their respective obligations hereunder and the consummation by them of
the transactions contemplated by this Agreement will not: (i) contravene any
provision of the Articles of Incorporation or Bylaws of either of them; (ii) in
any material respect violate or conflict with any law, statute, ordinance, rule
regulation, decree, writ, injunction, judgment or order of any Governmental
Authority or of any arbitration award which is either applicable to, binding
upon, or enforceable against either of them; (iii) conflict with, result in
breach of, or constitute a default (or any event which would, with the passage
of time or the giving of notice or both, constitute a default) under, or give
rise to a right to terminate, amend, modify, abandon or accelerate any material
contract; (iv) result in or require the creation or imposition of any lien upon
or with respect to any property or assets of MTLM or AMI; or (v) require the
consent, approval, authorization or permit of, or filing with or notification
to, any Governmental Authority, any court or tribunal or any other Person,
except any SEC and other securities or exchange filings required to be made by
MTLM following the Closing Date.
5.3 Enforceability. Each of this Agreement and the Other Agreements has
been, or will have been at the time of Closing, duly executed and delivered by
each of MTLM and AMI and constitutes or will constitute a legal, valid and
binding obligation of each of MTLM and AMI, enforceable against each of MTLM
and AMI in accordance with their respective terms.
5.4 No Commissions. Neither MTLM nor AMI has incurred any obligation for
any finder's or broker's or agent's fees or commissions or similar compensation
in connection with the transactions contemplated hereby.
5.5 SEC Filings and Financial Information. MTLM has filed with the
Commission: (i) MTLM's Annual Report on Form 10-K for the year ended Xxxxx 00,
0000, (xx) Quarterly Reports on Form 10-Q and 10-Q/A for the quarters ended
January 31, 1996, March 31, 1996, June 30, 1996, September 30, 1996, December
31, 1996, June 30, 1997 and September 30, 1997, (iii) all Current Reports on
Form 8-K required to be filed with the Commission since January 31, 1996, and
(iv) MTLM's definitive Proxy Statement dated November 20, 1997 for its Annual
Meeting of Shareholders, (v) any amendments to the foregoing and (vi) all
schedules and exhibits attached thereto (collectively, the "SEC Documents").
Except as set forth on Schedule 5.5 hereto, and except for the transactions
contemplated hereby, MTLM is not aware of any event that would require the
filing of a Form 8-K within fifteen (15) days following the Closing Date. Each
SEC Document, as of the date of the filing thereof with the Commission,
conformed in all material respects with the requirements of the Exchange Act,
and the rules and regulations thereunder and, as of the date of such filing or,
if such Disclosure Document was subsequently amended, as of the date of the
filing of any amendment thereto with the Commission, such Disclosure Document
did not contain an untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of MTLM, including the notes thereto,
included in the SEC Documents comply as to form in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto, have been prepared in accordance
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with GAAP consistently applied (except as may be indicated in the notes
thereto) and present fairly the consolidated financial position of MTLM at the
dates thereof and of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal audit adjustments).
5.6 Capitalization. The authorized capital stock of MTLM consists of:
80,000,000 shares of Common Stock and 4,000,000 shares of Preferred Stock.
As of the date hereof, 30,130,916 shares of Common Stock are validly issued and
outstanding, fully paid and non-assessable, 36,000 shares of Preferred Stock
have been designated as Series A Convertible Preferred Stock, face amount
$1,000 per share, 25,000 shares of which are issued and outstanding, and 23,000
shares of Preferred Stock have been designated as Series B Convertible
Preferred Stock, face amount $1,000 per share, 20,000 shares of which are
issued and outstanding. As of the date hereof, 10,586,923 shares of Common
Stock are issuable pursuant to various stock option plans, warrants, and
pending contracts for business acquisitions, and no other shares of Common
Stock or Preferred Stock, or any rights, options, warrants, convertible
securities, subscription rights or other agreements or commitments of any kind
obligating MTLM to issue or sell any other shares of Common Stock or Preferred
Stock, are outstanding or have been authorized, as of the date hereof. All
issued and outstanding shares of capital stock of AMI are owned beneficially
and of record by MTLM. No other shares of capital stock of AMI or any rights,
options, warrants, convertible securities, subscription rights or other
agreements, or commitments of any kind obligating AMI to issue or sell other
such shares are outstanding or have been authorized.
5.7 MTLM Shares. Upon consummation of the Closing and the issuance and
delivery of certificates representing the MTLM Shares to the Companies, the
MTLM Shares will be duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock.
5.8 New Permits. There are no facts known to MTLM or AMI that will
materially and adversely affect their eligibility for the transfer or
reissuance of any New Permits.
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE CLOSING
6.1 Affirmative Covenants Pending the Closing. At all times prior to the
Closing Date, each of the Companies covenants and agrees that it will:
(a) conduct the Business and operations only in the ordinary course
of business and use its commercially reasonable efforts consistent with
past practice to preserve intact its business organization, keep
available satisfactory relationships with suppliers, customers and others
having business relationships with it;
(b) maintain its cash management practices (including, without
limitation, the collection of Receivables and the payment of payables)
and its policies, practices and
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procedures with respect to collection of trade accounts receivable,
establishment of reserves for uncollectible accounts, accrual of accounts
receivable, inventory control, prepayment of expenses, payment of trade
accounts payable, accrual of other expenses, deferral of revenue, and
acceptance of customer deposits in accordance with past custom and
practice;
(c) cause its current insurance policies not to be canceled or
terminated or any of the coverage thereunder to lapse, unless,
simultaneously with such termination, cancellation or lapse, replacement
policies providing coverage equal to or greater than the coverage under
the canceled, terminated or lapsed policies to the extent practicable for
market premiums are in full force and effect;
(d) maintain, repair and replace its assets consistent with past
practices;
(e) use reasonable efforts to retain its present employees and to
maintain its relationships with its agents, distributors, licensees,
suppliers and customers;
(f) maintain its books, accounts and records in accordance with past
custom and practice as used in the preparation of the Financial
Statements;
(g) maintain in full force and effect the existence of all
Intellectual Property;
(h) comply in all material respects with all legal requirements and
contractual obligations applicable to or binding upon it;
(i) maintain all authorizations, consents, accreditation, Licenses,
Permits and approvals pertaining to it; and
(j) duly and timely file (by the due date or any duly granted
extension thereof) all income Tax reports an returns and non-income Tax
reports and returns required to be filed with federal, state, county,
local, foreign and other Tax authorities, promptly pay all Taxes
indicated by such returns or otherwise lawfully levied or assessed upon
it or any of its properties, unless it is contesting such levy or
assessment in good faith and, if appropriate, has established reasonable
reserves therefor, and withhold or collect and pay to the proper
governmental authorities or hold in separate bank accounts for such
payment all Taxes required by law to be so withheld or collected.
6.2 Negative Covenants Pending Closing. Except as set forth on Schedule
6.2, prior to the Closing Date, each of the Companies covenants and agrees that
except to the extent contemplated by this Agreement, it will not:
(a) issue, sell, pledge, dispose of, encumber, or, authorize the
issuance, sale, pledge, disposition, grant or encumbrance of: (i) any
shares of its capital stock of any class, or any options, warrants,
convertible securities or other rights of any kind to acquire any shares
of such capital stock, or any other ownership interest, of it; or (ii)
any of its
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respective assets, tangible or intangible, except in the ordinary course
of business consistent with past practice;
(b) (i) acquire (including, without limitation, for cash or shares
of stock or units, by merger, consolidation, or acquisition of stock or
assets) any interest in any corporation, partnership or other business
organization or division thereof or any assets, or make any investment
either by purchase of stock or securities, contributions of capital or
property transfer, or, except in the ordinary course of business,
consistent with past practice, purchase any property or assets of any
other Person; (ii) incur any indebtedness for borrowed money or issue any
debt securities or assume, guarantee or endorse or otherwise as an
accommodation become responsible for, the obligations of any Person, or
make any loans or advances; or (iii) enter into any Contract other than
in the ordinary course of business, consistent with past practice;
(c) increase the compensation payable or to become payable to its
respective officers or directors, or, except as presently bound to do,
grant any severance or termination pay to, or enter into any employment
or severance agreement with, any of its respective directors
or officers, or establish, adopt, enter into or amend or take any action
to accelerate any rights or benefits under any collective bargaining,
bonus, profit sharing, trust, compensation, stock option, restricted
stock, pension, retirement, deferred compensation, employment,
termination, severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any directors, officers or employees;
(d) take any action other than in the ordinary course of business
and in a manner consistent with past practice with respect to accounting
policies or procedures;
(e) pay, discharge or satisfy any existing claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the
ordinary course of business and consistent with past practice of due and
payable liabilities reflected or reserved against in its financial
statements, as appropriate, or liabilities incurred after the date hereof
in the ordinary course of business and consistent with past practice;
(f) increase or decrease prices charged to its respective customers,
except for previously announced price changes or except in the ordinary
course of business, or take any other action which might reasonably
result in any material increase in the loss of customers through
non-renewal or termination of contracts or other causes;
(g) forgive, cancel, or waive any rights of material value or any
debts or other material obligations owed to it, in each case, to the
extent included in the Purchased Assets; or
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(h) agree, in writing or otherwise, to take or authorize any of the
foregoing actions or any action which would make any representation or
warranty in Article IV untrue or incorrect.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF BUYER
The obligations of Buyer hereunder shall be subject to the fulfillment at
or prior to the Closing Date of the following conditions, any or all of which
may be waived in whole or in part by Buyer:
7.1 Accuracy of Representations and Warranties and Compliance with
Obligations. The representations and warranties of the Companies and the
Shareholder contained in this Agreement shall be true and correct in all
material respects at and as of the Closing Date with the same force and effect
as though made at and as of that time except: (i) for changes specifically
permitted by or disclosed pursuant to this Agreement; and (ii) that those
representations and warranties which address matters only as of a particular
date shall remain true and correct as of such date. Each of the Companies and
the Shareholder shall have performed and complied with all of their respective
obligations required by this Agreement to be performed or complied with at or
prior to the Closing Date. Each of the Companies and the Shareholder shall
have delivered to MTLM a certificate, dated as of the Closing Date, duly signed
(in the case of each of the Companies by their respective chief executive
officer and chief financial officer), stating that such representations and
warranties are true and correct and that all such obligations have been
performed and complied with.
7.2 No Material Adverse Change or Destruction of Property. Between the
date hereof and the Closing Date: (i) there shall have been no Material
Adverse Change to any of the Companies; (ii) there shall have been no adverse
federal, state or local legislative or regulatory change affecting in any
material respect the services, products or business of any of the Companies;
and (iii) none of the properties and assets of any of the Companies shall have
been damaged by fire, flood, casualty, act of God or the public enemy or other
cause (regardless of insurance coverage for such damage) which damages may have
a Material Adverse Effect thereon, and there shall have been delivered to MTLM
a certificate to that effect, dated the Closing Date and signed by or on behalf
of each of the Companies.
7.3 Corporate Certificate. The Shareholder shall have delivered to
MTLM: (i) copies of the certificate of incorporation and bylaws of each of the
Companies as in effect immediately prior to the Closing Date; (ii) copies of
resolutions adopted by the Board of Directors of each of the Companies and the
Shareholder authorizing the transactions contemplated by this Agreement;
and (iii) certificates of legal existence of each of the Companies issued by
the State of Connecticut and each other state in which each of them is
qualified to do business as of a date not more than thirty days prior to the
Closing Date, certified in each case as of the Closing Date by the Secretary as
being true, correct and complete.
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7.4 Opinions of Counsel. Buyer shall have received opinions dated as of
the Closing Date from counsel for each of the Companies and the Shareholder
substantially in the form of Exhibit D-2(a) and Exhibit D-2(b) attached
hereto.
7.5 Consents. MTLM shall have received written consents to the
transactions contemplated hereby and waivers of rights to terminate or modify
any material rights or obligations of the Company from any Person from whom
such consent or waiver is required under any Purchased Contract or instrument
as of a date not more than ten days prior to the Closing Date, or who, as a
result of the transactions contemplated hereby, would have such rights to
terminate or modify such Contracts or instruments, either by the terms thereof
or as a matter of law.
7.6 Governmental Approvals; HSR Act Compliance. All consents,
authorizations and approvals from, and all declarations, filings and
registrations with any governmental authority required to consummate the
transactions contemplated by this Agreement, including those set forth on
Schedule 4.6, shall have been obtained or made without the imposition of any
material conditions, and all applicable waiting periods under the HSR Act shall
have expired or terminated.
7.7 Securities Laws. MTLM shall have received all necessary consents
and otherwise complied with any state Blue Sky or securities laws applicable to
the issuance of MTLM Shares, in connection with the transactions contemplated
hereby.
7.8 Title Documents; Title Insurance. At the Closing: (i) the Company
shall have delivered all title documents evidencing the Purchased Assets held
by it in a form acceptable to MTLM for transfer on the books of the Company;
and (ii) MTLM shall have received title insurance commitments, policies and
riders acceptable to MTLM in its sole discretion with respect to the Owned
Premises and the Leased Premises. MTLM acknowledges receipt of Title
Commitment No. SP103070 of First American Title Insurance Company, effective
date of October 21, 1997 at 8:00 a.m. The Company shall deliver at the
Closing: (i) a title affidavit to enable Exceptions 1 and 3 of the Title
Commitment to be omitted; and (ii) releases or other assurances to enable
Exceptions 4, 7, 8, 9 and 10 to be omitted. MTLM has no objections to the
remaining Exceptions.
7.9 No Adverse Litigation. There shall not be pending or threatened any
action or proceeding by or before any court or other governmental body which
shall seek to restrain, prohibit, invalidate or collect damages arising out of
the Agreement or any other transaction contemplated hereby, and which, in the
judgment of MTLM, makes it inadvisable to proceed with the Agreement and other
transactions contemplated hereby.
7.10 Approvals; Consents. Within five (5) business days after the
execution hereof, the Board of Directors of MTLM and AMI shall have authorized
and approved this Agreement and the transactions contemplated hereby.
7.11 Intentionally Omitted.
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7.12 Intentionally Omitted.
7.13 Other Closing Deliveries. At Closing, the Buyer shall have
received:
(a) each Other Agreement to which any of the Companies or the
Shareholder is a party, duly executed by the Companies or the
Shareholders, as the case may be;
(b) resignations effective as of the Closing Date from such officers
and directors of the Company as MTLM or AMI shall have requested in
writing; and
(c) all other previously undelivered agreements, certificates,
documents, instruments or writings required to be delivered by the
Company and/or the Shareholder at or prior to the Closing pursuant to
this Agreement or otherwise in connection herewith, duly executed by the
Company and/or the Shareholder, as the case may be, who is a party
thereto.
7.14 Licenses and Permits. AMI shall have obtained all of the New
Permits and all assignable Permits shall have been duly assigned to AMI on or
before the Closing Date.
7.15 Employment Agreements. At Closing, MTLM shall have received each
of the Employment Agreements, executed by each of the parties thereto.
7.16 Lease and Option. At Closing, MTLM shall have received the Lease
and the Option Agreement, executed by each of the parties thereto.
7.17 Defined Benefit Plan. At Closing, MTLM shall have received a
certificate from CIGNA Retirement & Investment Services certifying to MTLM that
the Aerospace Metals, Inc. Hourly Pension Plan and the Aerospace Metals, Inc.
Salaried Retirement Plan are fully-funded as of the Closing Date.
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF
EACH OF THE COMPANIES AND THE SHAREHOLDER
The obligations of each of the Companies and the Shareholder to effect
this Agreement shall be subject to the fulfillment at or prior to the Closing
Date of the following conditions, any or all of which may be waived in whole or
in part by each of the Companies and the Shareholder:
8.1 Accuracy of Representations and Warranties and Compliance with
Obligations. The representations and warranties of Buyer contained in this
Agreement shall be true and correct in all material aspects at and as of the
Closing Date with the same force and effect as though made at and as of that
time except: (i) for changes specifically permitted by or disclosed pursuant
to
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this Agreement; and (ii) that those representations and warranties which
address matters only as of a particular date shall remain true and correct as
of such date. Buyer shall have performed and complied with all of its
obligations required by this Agreement to be performed or complied with at or
prior to the Closing Date. Each of MTLM and AMI shall have delivered to the
Shareholder a certificate, dated as of the Closing Date, and signed by an
executive officer, certifying that such representations and warranties are true
and correct and that all such obligations have been performed and complied
with.
8.2 Purchase Price. At the Closing, MTLM shall have delivered to the
Companies the Cash Portion minus the Escrow Amount and shares of Common Stock
representing the Stock Portion of the Purchase Price and shall have delivered
the Escrow Amount to the Escrow Agent.
8.3 No Adverse Litigation. There shall not be pending or threatened
any action or proceeding by or before any court or other governmental body
which shall seek to restrain, prohibit, invalidate or collect damages arising
out of the Agreement or any of the transactions contemplated hereby, and which
in the judgment of the Shareholder makes it inadvisable to proceed with the
Agreement or any other transaction contemplated hereby.
8.4 Other Closing Deliveries. At Closing, each of the Companies and
the Shareholder shall have received (a) each Other Agreement to which MTLM or
AMI is a party, duly executed by MTLM or AMI, as the case may be and (b) all
other previously undelivered agreements, certificates, documents, instruments
or writings required to be delivered by MTLM or AMI at or prior to the Closing
pursuant to this Agreement or otherwise in connection herewith, duly executed
by MTLM and/or AMI, as the case may be.
8.5 Opinion of Counsel. The Companies and the Shareholder shall have
received an opinion dated as of the Closing Date from counsel for each of MTLM
and AMI substantially in the form of Exhibit D-1 hereto.
8.6 Governmental Approvals; HSR Act Compliance. All consents,
authorizations and approvals from and all declarations, filings and
registrations with any Governmental Authority required to consummate the
transactions contemplated by this Agreement, including those set forth on
Schedule 4.6, shall have been obtained or made without the imposition of any
material conditions and all applicable waiting periods under the HSR Act shall
have expired or terminated.
8.7 Securities Laws. MTLM shall have received all necessary consents
and otherwise complied with any state Blue Sky or securities laws applicable to
the issuance of the MTLM Shares in connection with the transactions
contemplated hereby.
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ARTICLE IX
INDEMNIFICATION
9.1 Agreement by the Companies and the Shareholder to Indemnify. Each of
the Companies and the Shareholder agrees, jointly and severally, to indemnify,
defend and hold Buyer harmless from and against the aggregate of all Buyer
Indemnifiable Damages (as defined below); provided, however, that the aggregate
indemnification liability of the Companies and the Shareholder collectively
shall not exceed the Cash Portion of the Purchase Price (plus any costs of
collection), and the individual indemnification liability of the Shareholder
shall not exceed $12 million (plus any costs of collection).
(a) For purposes of this Agreement, "BUYER INDEMNIFIABLE DAMAGES"
means, without duplication, the aggregate of all expenses, losses, costs,
claims, deficiencies, liabilities and damages (including, without
limitation, related counsel and paralegal fees and expenses) incurred or
suffered by Buyer, to the extent: (i) resulting from any breach of a
representation or warranty made by any of the Companies or the
Shareholder in or pursuant to this Agreement; (ii) resulting from any
breach of the covenants or agreements made by any of the Companies or the
Shareholder pursuant to this Agreement; (iii) resulting from any
inaccuracy in any certificate or environmental report (except those
listed in Scheduled 4.27) delivered by any of the Companies or the
Shareholder pursuant to this Agreement; (iv) resulting from any Excluded
Liabilities; (v) resulting from any remediation, cleanup or other actions
required by this Agreement to be taken by the Companies or the
Shareholder that may be taken to ensure that the Owned Premises are in
compliance with all Environmental, Health and Safety Laws (the "CLEANUP
LIABILITY"); (vi) resulting from any default or failure to pay by the
account debtors with respect to any of the Receivables identified on
Schedule 4.21; or (vii) resulting from any fact, condition, event, act,
omission or other matter whose occurrence or failure to occur would have
constituted a breach of a representation or warranty made by any of the
Companies or the Shareholder in or pursuant to this Agreement were not
that representation or warranty qualified by the words "to the best
knowledge of the Companies and/or the Shareholder" or other words of
similar import.
(b) Each of the representations and warranties made by the
Shareholder and each of the Companies in this Agreement or pursuant
hereto shall survive for a period of 24 months after the Closing Date
except as follows: (i) the representations and warranties of the
Shareholder to the extent relating to tax attributes or liabilities with
respect to Taxes of each of the Companies, shall expire at the time the
period of limitations (including any extensions thereof pursuant to the
delivery of waivers of the applicable period of limitations) expires for
the assessment by the taxing authority of additional Taxes with respect
to which the representations and warranties relate; (ii) the
representations and warranties of the Shareholder and each of the
Companies contained in Sections 4.13 and 4.16 shall expire at the time
the latest period of limitations expires for the enforcement by an
applicable Governmental Authority of any remedy with respect to which the
particular
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representations and warranties of the Shareholder related and if there
is no such period of limitations, then the representations and warranties
shall continue indefinitely; and (iii) the representations and warranties
of the Shareholder and each of the Companies contained in Sections 4.1,
4.2, 4.3, 4.4, and 4.5 shall not expire, but shall continue indefinitely.
No claim for the recovery of Buyer Indemnifiable Damages may be asserted
by Buyer against any of the Companies or the Shareholder after such
representations and warranties shall thus expire; provided, however, that
claims for Buyer Indemnifiable Damages first asserted within the
applicable period shall not thereafter be barred. Notwithstanding any
knowledge of facts determined or determinable by any party by
investigation, each party shall have the right to fully rely on the
representations, warranties, covenants and agreements of the other parties
contained in this Agreement or in any other documents or papers delivered
in connection herewith (except those documents listed on Schedule 4.27).
Each representation, warranty, covenant and agreement of the parties
contained in this Agreement is independent of each other representation,
warranty, covenant and agreement.
(c) In the event that Buyer believes it is entitled to a claim for
any Buyer Indemnifiable Damages hereunder, Buyer shall promptly give
written notice to the Companies and the Shareholder of such claim and the
amount or the estimated amount of such claim, and the basis for such
claim. If none of the Companies nor the Shareholder pays the amount of
the claim for Buyer Indemnifiable Damages to Buyer within 10 days, then
Buyer may take any action or exercise any remedy available to Buyer by
appropriate legal proceedings to collect the Buyer Indemnifiable Damages
or make a claim for payment pursuant to the Escrow Agreements.
9.2 Conditions of Indemnification of Buyer. The obligations and
liabilities of the Companies and the Shareholder hereunder with respect to the
indemnities pursuant to this Article IX resulting from any claim or other
assertion of liabilities by third parties (hereinafter called collectively
"BUYER CLAIMS"), shall be subject to the following terms and conditions:
(a) Buyer must give the Companies and the Shareholder notice of any
such Buyer Claim promptly after Buyer receives notice thereof;
(b) the Companies and the Shareholder shall have the right to
undertake, by counsel or other representatives of their own choosing, the
defense of such Buyer Claim; provided, however, if a Buyer Claim is made
against Buyer which exceeds the value of the Indemnification Security at
such time, Buyer shall have the right to control the defense of the Buyer
Claim;
(c) in the event that the Companies and the Shareholder shall elect
not to undertake such defense, or within a reasonable time after notice
of any such Buyer Claim from Buyer shall fail to defend, Buyer (upon
further written notice to the Companies and the Shareholder) shall have
the right to undertake the defense, compromise or settlement of such
Buyer Claim, by counsel or other representatives of its own choosing, on
behalf of and for the account and risk of the Companies and the
Shareholder (subject to the right
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of the Companies and the Shareholder to assume defense of such Buyer
Claim at any time prior to settlement, compromise or final determination
thereof);
(d) anything in this Section 9.2 to the contrary notwithstanding:
(i) Buyer shall have the right, at its own cost and expense, to have its
own counsel to protect its own interests and participate in the defense,
compromise or settlement of the Buyer Claim; (ii) none of the Companies
nor the Shareholder shall, without Buyer's written consent, settle or
compromise any Buyer Claim or consent to entry of any judgement which
does not include as an unconditional term thereof the giving by the
claimant or the plaintiff to Buyer of a release from all liability in
respect of such Buyer Claim; and (iii) Buyer, by counsel or other
representatives of its own choosing and at its sole cost and expense,
shall have the right to consult with the Companies, the Shareholder and
their respective counsel or other representatives concerning such Buyer
Claim, and the Companies, the Shareholder and Buyer and their respective
counsel shall cooperate with respect to such Buyer Claim.
9.3 Agreement by Buyer to Indemnify. Each of MTLM and AMI agrees jointly
and severally to indemnify, defend and hold each of the Companies and the
Shareholder harmless from and against the aggregate of all Seller Indemnifiable
Damages (as defined below); provided, however, that the aggregate
indemnification liability of MTLM and AMI collectively shall not exceed the
Cash Portion of the Purchase Price (plus any costs of collection).
(a) For purposes of this Agreement, "SELLER INDEMNIFIABLE DAMAGES"
means, without duplication, the aggregate of all expenses, losses, costs,
claims, deficiencies, liabilities and damages (including, without
limitation, related counsel and paralegal fees and expenses) incurred or
suffered by any one or more of the Companies or the Shareholder to the
extent: (i) resulting from any breach of a representation or warranty
made by MTLM or AMI in or pursuant to this Agreement; (ii) resulting from
any breach of the covenants or agreements made by MTLM or AMI pursuant to
this Agreement; (iii) resulting from any inaccuracy in any certificate or
report prepared by or on behalf of MTLM or AMI delivered by MTLM or AMI
pursuant to this Agreement; or (iv) resulting from any default or failure
to pay or perform any of the Assumed Liabilities.
(b) Each of the representations and warranties made by MTLM and/or
AMI in this Agreement or pursuant hereto shall survive for a period of 24
months after the Closing Date. No claim for the recovery of Seller
Indemnifiable Damages may be asserted by any of the Companies or the
Shareholder against MTLM or AMI after such representations and warranties
shall thus expire; provided, however, that claims for Seller
Indemnifiable Damages first asserted within the applicable period shall
not thereafter be barred. Notwithstanding any knowledge of facts
determined or determinable by any party by investigation, each party
shall have the right to fully rely on the representations, warranties,
covenants and agreements of the other parties contained in this Agreement
or in any other documents or papers delivered in connection herewith.
Each representation, warranty, covenant and agreement of the parties
contained in this Agreement is independent of each other representation,
warranty, covenant and agreement.
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(c) In the event that any of the Companies or the Shareholder
believes it or he is entitled to a claim for any Seller Indemnifiable
Damages hereunder, the claimant shall promptly give written notice to
MTLM and AMI of such claim and the amount or the estimated amount of
such claim, and the basis for such claim. If neither MTLM nor AMI pays
the amount of the claim for Seller Indemnifiable Damages to the claimant
within 10 days, then the claimant may take any action or exercise any
remedy available to it by appropriate legal proceedings to collect the
Seller Indemnifiable Damages.
9.4 Conditions of Indemnification of Companies and Shareholder. The
obligations and liabilities of MTLM and AMI hereunder with respect to the
indemnities pursuant to this Article IX resulting from any claim or other
assertion of liabilities by third parties (hereafter called collectively
"SELLER CLAIMS"), shall be subject to the following terms and conditions:
(a) the Company or the Shareholder asserting the claim for
indemnification, as the case may be (the "INDEMNIFIED PARTY"), must give
notice of any such Seller Claim promptly after the Indemnified Party
receives notice thereof;
(b) MTLM and AMI shall have the right to undertake, by counsel or
other representatives of their own choosing, the defense of such Seller
Claim; provided, however, if a Seller Claim is made which exceeds
$100,000 the Indemnified Party shall have the right to control the
defense of the Seller Claim;
(c) in the event that MTLM and AMI shall elect not to undertake such
defense, or within a reasonable time after notice of any such Seller
Claim from the Indemnified Party shall fail to defend, the Indemnified
Party (upon further written notice to MTLM or AMI) shall have the right
to undertake the defense, compromise or settlement of such Seller Claim,
by counsel or other representatives of its own choosing, on behalf of and
for the account and risk of MTLM and AMI (subject to the right of MTLM
and AMI to assume defense of such Seller Claim at any time prior to
settlement, compromise or final determination thereof);
(d) anything in this Section 9.4 to the contrary notwithstanding:
(i) the Indemnified Party shall have the right, at its own cost and
expense, to have its own counsel to protect its own interests and
participate in the defense, compromise or settlement of the Seller Claim;
(ii) nether MTLM nor AMI shall, without the Indemnified Party's written
consent, settle or compromise any Seller Claim or consent to entry of any
judgment which does not include as an unconditional term thereof the
giving by the claimant or the plaintiff to the Indemnified Party of a
release from all liability in respect of such Seller Claim; and (iii) the
Indemnified Party, by counsel or other representatives of its own choosing
and at its sole cost and expense, shall have the right to consult with
MTLM and AMI and their respective counsel or other representatives
concerning such Seller Claim, and MTLM, AMI and the Indemnified Party and
their respective counsel shall cooperate with respect to such Seller
Claim.
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9.5 Effect of Insurance and Taxes.
(a) Any party or parties shall be deemed to have suffered a loss for
which the other party or parties shall be liable for indemnification only
to the extent that the party or parties claiming indemnification is or
are unable to obtain monetary recovery with respect thereto under an
insurance policy or from any other third party. If a party's entitlement
to such a recovery is discovered after payments of indemnification
hereunder, then the amount of such indemnification subject to such claim
of entitlement against such third party shall be refunded to the party or
parties who paid it, but only after and only to the extent of such
recovery from such insurance policy or third party. An indemnified party
who has received a recovery for a loss arising from a breach of a
representation, warranty or covenant under the Agreement which is subject
to indemnification shall have no right to recover twice for the same loss
under the indemnification provided in this Agreement.
(b) In determining the amount of any loss to an indemnified party,
any available tax benefits to the indemnified party, such as, for
example, the ability to take any deduction of all or any part of the
amount on such party's tax returns or the ability to exclude from income
for tax purposes amounts which would have been includable in such party's
income absent the loss, damage or expense, shall be taken into account,
such that only the net after tax effect of the loss or expense to the
indemnified party shall be considered a loss subject to the
indemnification provisions of this Agreement, provided, however, if any
indemnity payment is includable in the income of the indemnified party,
such payment shall be grossed up to the extent required to fully
compensate the indemnified party after taking into account the associated
tax liability.
(c) For purposes of this Section 9.5, the term "loss" means any
loss, liability, damage, cost or expense indemnified against under this
Article IX.
9.6 Minimum Threshold for Indemnification.
(a) By the Companies and the Shareholder. No indemnification shall
be paid by the Companies or the Shareholder hereunder until such time as
the amount for which indemnification would otherwise be due to any and
all parties entitled to indemnification from the Companies and the
Shareholder hereunder exceeds $50,000 in the aggregate, and then only to
the extent of the excess over $50,000; provided, however, that the
Companies and the Shareholder shall be obligated to pay to Buyer the full
amount of Buyer Indemnifiable Damages hereunder for any Buyer Claims,
regardless of the dollar amount claimed, arising from or related to: (i)
any sales taxes payable to the Connecticut Department of Revenue Services
as a result of operations of the Companies prior to the Closing Date; and
(ii) compliance with the Consent Order issued on January 9, 1998 by the
State of Connecticut Department of Environmental Protection regarding
Analytical and Effluent Violations, including without limitation the cost
of installing facilities necessary
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to achieve compliance with all material terms and conditions contained
in State Permit SP0000050, or any modifications thereof, issued by the
Commissioner of Environmental Protection of the State of Connecticut on
November 17, 1993, and any fines, penalties and charges relating thereto.
(b) By MTLM or AMI. No indemnification shall be paid by MTLM or AMI
hereunder until such time as the amount for which indemnification would
otherwise be due to any and all parties entitled to indemnification from
MTLM or AMI hereunder exceeds $50,000 in the aggregate, and then only to
the extent of the excess over $50,000.
9.7 Security for Indemnification Obligation. As security (the
"INDEMNIFICATION SECURITY") for the agreement by each of the Companies and the
Shareholder to indemnify and hold Buyer harmless as described in Section 9.1,
MTLM shall have the right to offset any Indemnifiable Damages against the
amounts held pursuant to the Escrow Agreements, subject to the provisions of
the Escrow Agreements as to agreement or final decision in legal proceedings
before release of funds, and provided that the amounts held pursuant the
Cleanup Escrow Agreement shall only be used to offset those Indemnifiable
Damages resulting from the Cleanup Liability. Notwithstanding any provision of
this Agreement or the Escrow Agreement to the contrary, the obligations of each
of the Companies and the Shareholder to indemnify and hold MTLM harmless with
respect to the Cleanup Liability shall not be limited to the amounts held
pursuant to the Cleanup Escrow Agreement. The administration, investment and
release of funds held pursuant to the Escrow Agreements shall, to the extent
not inconsistent with this Agreement, be governed by the terms of the Escrow
Agreements.
9.8 Collection of Receivables. AMI agrees to use all reasonable and
normal efforts to collect the Receivables and will cooperate with the Companies
and the Shareholder in such collection efforts, both before and after that date
which is ninety (90) days following the Closing. Payments received from
customers after the Closing shall be applied against the oldest Receivables
first unless a customer specifically directs otherwise in writing. If material
which is covered by uncollected Receivables is returned after the Closing, AMI
shall credit the value of the returned material against the uncollected
Receivables. The Companies agree to pay to AMI, promptly after AMI delivers
written notice to the Companies, an amount equal to any reduction in the amount
of a Receivable due to a sales adjustment made by a customer after the Closing.
If AMI subsequently collects any portion of a Receivable for which the
Companies and/or the Shareholder have paid AMI pursuant to the Section 4.21
guaranty of Receivables (whether directly or through a deduction from the
Escrow Amount), AMI will reimburse the Companies and/or the Shareholder by
payment in the amount of such subsequent collection to the source from which
such indemnification payment came, i.e., either the Companies and/or the
Shareholder if they paid AMI directly or the Escrow Amount if the
indemnification payment was deducted therefrom. AMI agrees that it will, at
the request of the Companies and/or the Shareholder, assign and transfer to the
Companies any uncollected Receivables for which AMI has been paid
indemnification pursuant to Section 4.21, and upon such assignment the
Companies will be free to use any lawful means to collect such Receivable.
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ARTICLE X
SECURITIES LAW MATTERS
The parties agree as follows with respect to the sale or other disposition
after the Closing Date of the Common Stock:
10.1 Legend. Each certificate representing the Common Stock shall bear the
following legend:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE MAY NOT
BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF BY THE HOLDER EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, WITH RESPECT THERETO OR IN
ACCORDANCE WITH AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER THAT AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.
MTLM may, unless a registration statement is in effect covering the Common
Stock, place stop transfer orders with its transfer agents with respect to such
certificates in accordance with federal securities laws.
10.2 Registration Rights. MTLM shall execute and deliver to the Companies
a registration rights agreement concerning the MTLM Shares substantially in the
form attached as Exhibit H hereto.
ARTICLE XI
ADDITIONAL AGREEMENTS
11.1 Further Assurances. Each party shall execute and deliver such
additional instruments and other documents and shall take such further actions
as may be necessary or appropriate to effectuate, carry out and comply with all
of the terms of this Agreement and the transactions contemplated hereby.
11.2 Compliance with Covenants. The Shareholder shall cause each of the
Companies to comply with all of the respective covenants of the Companies under
this Agreement.
11.3 Cooperation. Each of the parties agrees to cooperate with the other
in the preparation and filing of all forms, notifications, reports and
information, if any, required or reasonably deemed advisable pursuant to any
law, rule or regulation or the rules of the Nasdaq
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Stock Market in connection with the transactions contemplated by this
Agreement and to use their respective best efforts to agree jointly on a method
to overcome any objections by any Governmental Authority to any such
transactions.
11.4 Access to Information. From the date hereof to the Closing Date,
each of the Companies and MTLM shall (and shall cause its respective directors,
officers, employees, auditors, counsel and agents to) afford each other and
their officers, employees, auditors, counsel and agents reasonable access at
all reasonable times to its properties, offices, and other facilities, to its
officers and employees and to all books and records, and shall furnish such
persons with all financial, operating and other data and information as may be
requested. No information provided to or obtained by any of the parties hereto
shall affect any representation or warranty in this Agreement.
11.5 Notification of Certain Matters. The Shareholder and MTLM shall give
prompt notice to the other of the occurrence or non-occurrence of any event
which would likely cause any representation or warranty contained herein to be
untrue or inaccurate, or any covenant, condition, or agreement contained herein
not to be complied with or satisfied.
11.6 Tax Treatment. Each party to this Agreement has sought and received
its own advice as to the tax treatment of the transactions covered by this
Agreement and is not relying on any opinions of the other parties or their
respective advisers with respect thereto. All parties hereto agree to fully
and completely comply with the reporting requirements of the Internal Revenue
Service.
11.7 No Other Discussions. None of the Companies, the Shareholder, nor any
of their respective Affiliates, employees, agents or representatives shall: (i)
initiate or encourage the initiation by others of discussions or negotiations
with third parties (other than MTLM or AMI) or respond to solicitations by
third persons relating to any merger, sale, business combination, or other
disposition of any substantial part of the assets, business or properties of
any of the Companies (whether by merger, business combination, consolidation,
sale of stock or otherwise); (ii) respond in any way to an unsolicited
acquisition proposal; (iii) participate in any discussions or negotiations
relating to any acquisition proposal, or furnish any confidential
information concerning any of the Companies to any party other than Buyer; or
(iv) enter into any oral or written agreement or understanding that would have
the effect of preventing the consummation of the transactions contemplated by
this Agreement. Each of the Companies and the Shareholder will immediately
notify MTLM if any of the Companies or the Shareholder receives an acquisition
proposal or any inquiry which they reasonably believe could lead to an
acquisition proposal.
11.8 Restrictive Covenants. In order to assure that MTLM will realize the
benefits of this Agreement and in consideration of the transactions set forth
in this Agreement, each of the Companies and the Shareholder agrees with MTLM
that they shall not for a period of sixty (60) months from the Closing Date:
(a) directly or indirectly, alone or as a partner, joint venturer,
officer, director, employee, consultant, agent, independent contractor or
stockholder of any company or
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business, engage in any business activity in the Restricted Territory (as
defined below), and which is directly or indirectly in competition with
the business conducted by the Companies at the Closing Date; provided,
however, that, the beneficial ownership of less than 5% of the shares of
stock of any corporation having a class of equity securities actively
traded on a national securities exchange or over-the-counter market shall
not be deemed, in and of itself, to violate the prohibitions of this
Section. As used in this Section 11.8, the term "Restricted Territory"
means all states in which MTLM or any of its Subsidiaries operates a
facility on the Closing Date;
(b) directly or indirectly: (i) induce any Person which is a
customer of any of the Companies at the Closing Date to patronize any
business directly or indirectly in competition with the business
conducted by any of the Companies; (ii) canvass, solicit or accept from
any Person which is a customer of any of the Companies any such
competitive business; or (iii) request or advise any Person which is a
customer of any of the Companies at the Closing Date to withdraw, curtail
or cancel any such customer's business with any of the Companies;
(c) without the prior written consent of MTLM, directly or
indirectly, employ, or knowingly permit any company or business directly
or indirectly controlled by the Companies or the Shareholder, to employ,
any person who was employed by any of the Companies at or within six
months prior to the Closing Date, or in any manner seek to induce any
such Person to leave his or her employment;
(d) directly or indirectly, at any time following the Closing Date,
in any way utilize, disclose, copy, reproduce or retain in their
possession any of the Companies' proprietary rights or records,
including, but not limited to, any of their customer lists.
Each of the Companies and the Shareholder agrees and acknowledges that the
restrictions contained in this Section 11.8 are reasonable in scope and
duration and are necessary to protect MTLM after the Closing Date. If any
provision of this Section as applied to any party or to any circumstance is
adjudged by a court to be invalid or unenforceable, the same will in no way
affect any other circumstance or the validity or enforceability of this
Agreement. If any such provision, or any part thereof, is held to be
unenforceable because of the duration of such provision or the area covered
thereby, the parties agree that the court making such determination shall have
the power to reduce the duration and/or area of such provision, and/or to
delete specific words or phrases, and in its reduced form, such provision shall
then be enforceable and shall be enforced. The parties agree and acknowledge
that the breach of this Section will cause irreparable damage to MTLM and upon
breach of any provision of this Section, MTLM shall be entitled to injunctive
relief, specific performance or other equitable relief; provided, however, that
this shall in no way limit any other remedies which MTLM may have (including,
without limitation, the right to seek monetary damages).
11.9 Trading in MTLM's Common Stock. Except as otherwise expressly
consented to by MTLM, from the date of this Agreement until the Closing Date,
none of the Companies, nor
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the Shareholder (nor any Affiliates thereof) will directly or indirectly
purchase or sell (including short sales) any shares of the Common Stock in any
transactions effected on the Nasdaq Stock Market or otherwise.
11.10 HSR Act Compliance. Each of the Companies, the Shareholder and MTLM
will as promptly as practicable, but in no event later than 5 business days
following the execution and delivery of this Agreement, file or cause to be
filed with the United States Federal Trade Commission (the "FTC") and the
United State Department of Justice (the "DOJ") the notification and report form
required for the transactions contemplated hereby and any supplemental
information requested in connection therewith pursuant to the HSR Act. Any
such notification and report form and supplemental information will be in
substantial compliance with the requirements of the HSR Act. Each of the
Companies, MTLM and the Shareholder will furnish to the others such necessary
information and reasonable assistance as the others may request in connection
with the preparation of any filing or submission which is necessary under the
HSR Act. Each of the Companies, the Shareholder and MTLM will keep each other
apprised of the status of any communications with, and inquiries or requests
for additional information addressed to the entity that filed a notification
and report form as an acquired or acquiring person from, the FTC or the DOJ and
shall comply or cause its respective filing person to comply promptly with any
such inquiry or request. Each of the Companies, the Shareholder and MTLM will
use commercially reasonable efforts to obtain any clearance required under the
HSR Act for the purchase and sale of the MTLM Shares.
11.11 Corporate Authority. MTLM, AMI, each of the Companies and the
Shareholder agree to use their individual best efforts to obtain the
authorizations required for each to execute and deliver this Agreement and to
perform each of their respective obligations hereunder and to consummate the
transactions contemplated hereby.
11.12 Taxes and Transfer Taxes.
(a) The Companies shall be liable for and shall pay all Taxes
(whether assessed or unassessed) applicable to the Business or the
Purchased Assets, in each case attributable to periods (or portions
thereof) prior to the Closing Date. Buyer shall be liable for and shall
pay (i) all Taxes reflected as a liability on the Closing Date Statement
and (ii) all Taxes (whether assessed or unassessed) applicable to the
Business or the Purchased Assets, in each case attributable to periods
(or portions thereof) beginning on the Closing Date. For purposes of
this paragraph (a), any period beginning before and ending after the
Closing Date shall be treated as two partial periods, one ending on the
Closing Date and the other beginning after the Closing Date.
(b) Notwithstanding Section 11.13(a), any Tax (including a sales
Tax, use Tax, or gains Tax) directly attributable to the sale or transfer
of the Purchased Assets, shall be paid by the Companies. Buyer, each of
the Companies and the Shareholder agree to timely sign and deliver such
certificates or forms as may be necessary or appropriate to establish an
exemption from (or otherwise reduce), or make a report with respect to,
such Taxes.
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11.13 Other Agreements. Upon the Closing, each party hereto that is a
signatory to any of Exhibits A through I (the "OTHER AGREEMENTS") agrees to
execute and deliver such Other Agreements, as appropriate, to the other parties
to such Other Agreements, and each party who is a married individual shall
cause his spouse to execute all consents requested by MTLM to consummate the
transactions set forth herein. The parties agree that the non-competition
covenants contained in the Employment Agreements with the Shareholder attached
as Exhibit I are an integral part of this Agreement.
11.14 Employment Procedure.
(a) The Companies shall retain all liability for wages and payroll
deductions with respect to employees of the Companies for the period
ending on the day preceding the Closing Date.
(b) Effective as of the Closing Date, each of the Companies shall
assign all of its rights, and Buyer shall assume and shall timely perform
all of the Companies' obligations, under the collective bargaining
agreements listed in Schedule 4.17.
(c) Pursuant to IRS Revenue Procedure 84-77, Buyer shall assume the
Companies' obligations to furnish Forms W-2 to Employees for the calendar
year in which the Closing Date occurs.
(d) Nothing in this Section 11.14 express or implied shall confer
upon any Employee, any legal representative thereof or any third party
rights, benefits or remedies, including any right to employment, or
continued employment for any specified period, of any nature or kind
whatsoever under or by reason of this Agreement or any of the Other
Agreements.
(e) Buyer shall retain the right to amend or terminate any Employee
Benefit Plan, in accordance with the terms of such Employee Benefit Plan.
11.15 Corporate Name Change. Each of the Companies shall, immediately
following the Closing, execute and deliver to MTLM for filing all documents or
certificates necessary to change the legal, trade or assumed names of the
Companies to names which do not, in the sole discretion of MTLM, create any
likelihood of confusion with the names "Aerospace Metals, Inc.", "Aerospace
Parts Security, Inc." "Xxxxxxx & Xxxxxxxxxx", and "The Xxxxxxx Titanium
Corporation," any abbreviations or derivations thereof, or any other names
which are included in the Intellectual Property.
11.16 Payments of Accounts Receivable. In the event any of the Companies
or the Shareholder shall receive any instrument of payment of any of the
Receivables not repurchased from AMI by the Companies or the Shareholder, the
Companies or the Shareholder, whichever the
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case may be, shall forthwith deliver such payment or instrument to AMI,
endorsed where necessary, without recourse, in favor of AMI.
11.17 Securities Laws. Prior to or following the Closing, as applicable,
MTLM and AMI shall use reasonable efforts to obtain all necessary consents and
to otherwise comply with any state Blue Sky or securities laws applicable to
the issuance of MTLM Shares, in connection with the transactions contemplated
by this Agreement.
11.18 New Permits and Environmental Due Diligence. MTLM or AMI shall
duly file and diligently pursue all applications for New Permits and pay all
associated filing and permit transfer fees. The Companies shall use their best
efforts to assist the prompt transfer or assignment to AMI of all New Permits.
Any application for the renewal of any License due prior to the Closing Date
has been, or will be, timely filed prior to the Closing date. On and after
execution of this Agreement, the Companies will take all actions necessary to
assist AMI in obtaining all New Permits.
11.19 Environmental Covenants of the Companies.
(a) Remediation of Environmental Conditions.
(1) For purposes of this Agreement, the following words and
phrases shall have the meanings set forth below:
(i) "ENVIRONMENTAL CONDITION" means the Release or
Discharge or threatened Release or Discharge of Hazardous
Substances at, upon, under or emanating from the Owned
Premises.
(ii) "REMEDIATION" means all investigative, clean-up and
corrective actions, and the planning thereof, including
without limitation, corrective, remedial or removal actions,
and pre- or post-remediation monitoring, conducted under
applicable Environmental, Health and Safety Laws concerning
any Environmental Condition (including but not limited to
Remediation required as a result of governmental action
and/or litigation). Remediation shall include, without
limitation, groundwater monitoring, soil boring and soil
sampling, sample collection and analysis, delineation of
source areas, removal of floating product, bioremediation,
groundwater collection and treatment, off-site soil or debris
disposal, soil vapor sampling, monitoring or extraction, and
underground tank removal.
(iii) "REMEDIATION STANDARDS" shall mean the Remediation
Standard Regulations, Conn. Agencies Regs. 22a-133k-1 et seq.
adopted by the Connecticut Department of Environmental
Protection. The Companies may, within their sole discretion,
execute and record environmental land use restrictions
consistent with Connecticut General Statutes 22a-133o, and
the
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Conn. Agencies Regs 22a-133q-1 et seq., to allow
application of less stringent Remediation Standards,
consistent with the current use of the Owned Premises or any
other ferrous or non-ferrous scrap metal processing or
recycling operations, and MTLM and AMI shall subordinate any
interest they have in the Owned Premises or Leased Premises,
including but not limited to its leasehold interests, to such
restrictions, provided that such subordination will not
unreasonably interfere with AMI's business conducted pursuant
to the New Lease.
(2) Transfer Act Compliance. The Companies shall be
responsible for filing the appropriate forms with the Connecticut
Department of Environmental Protection ("DEP") pursuant to the
provisions of Connecticut General Statutes 22a-134 et seq. (the
"TRANSFER ACT"). The Companies shall act as the certifying party
with respect to the Transfer Act in connection with this
transaction.
(3) Remediation of the Owned Premises and Leased Premises.
(i) The Companies shall be solely responsible for the
Remediation of any Environmental Condition existing on or
emanating from the Owned Premises or Leased Premises prior to
the Closing Date to the extent required by Environmental,
Health and Safety Laws. At a minimum, however, the Companies
shall implement the Remediation Plan set forth in Schedule
11.19(a) (the "REMEDIATION PLAN") in accordance with the
schedule set forth therein. If during the Remediation, any
railroad ties are removed from the Owned Premises or Leased
Premises which Figures 4-2, 4-3 or 4-4, as applicable, of the
Remediation Plan indicate will be present after the
Remediation is completed, the Companies will replace these
railroad ties at the positions indicated in Figures 4-2, 4-3
or 4-4, as applicable, of the Remediation Plan. The Companies
shall reimburse MTLM and AMI on a time and materials basis
for the reasonable fees paid by them to Continental Placer
Inc. or such other environmental engineering firm selected by
MTLM and AMI as is reasonably satisfactory to the Companies
in connection with its work on the preparation of and
overseeing, on a regular and ongoing basis until completion,
the implementation of the Remediation Plan. An estimate for
such work is set forth in Schedule 11.19(a) attached hereto.
The Companies reserve the right to appeal any Governmental
Authority's determination regarding the appropriate
requirements for the Remediation. The Companies shall have
the right to seek application of any alternative or site
specific remediation standards or any variances approved by
the Commissioner of Environmental Protection that the
Companies deem necessary or desirable, provided that the
application of such alternative or site specific remediation
standards or of such variance shall be consistent with the
current use of the Owned
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Premises or other ferrous or non-ferrous scrap metal
processing and recycling operations.
(ii) The Companies shall also be responsible for the
Remediation of Total Petroleum Hydrocarbons ("TPH") Released
from operations in the ordinary course after the Closing Date
in the container storage area west of the Main building on
the South Property (as shown on the Remediation Plan); and
Hazardous Substances Discharged or Released from operations
in the ordinary course after the Closing Date in the
following specific locations on the North Property: the crane
runway, and the pads around the Shredder (as shown on the
Remediation Plan), until the Companies complete the
improvements as required in Section 11.21 of this Agreement in
each such location. Nothing in this Section 11.19(a)(3)(ii)
shall relieve MTLM and AMI of responsibility for the
Remediation of any Environmental Conditions created on and
after the Closing Date from the operation of the Business
other than in the ordinary course, including, without
limitation, Discharges or Releases caused by the negligent or
intentional conduct of MTLM or AMI employees or agents.
(iii) In accordance with the Remediation Plan, the
Companies expect to utilize bioremediation techniques for the
Remediation of certain TPH-contaminated soils. The
Remediation Plan sets forth certain milestones ("MILESTONES")
with respect to the excavation, on-site relocation and
treatment of those soils. Specifically, all TPH-contaminated
soils in the following specified areas (as identified in the
Remediation Plan) must by the dates indicated have been
excavated, relocated and treated by bioremediation to a level
no greater than the level required by the Remediation
Standards:
(A) By December 31, 1998 (the "PHASE ONE
MILESTONE"), all TPH-contaminated soils in Areas A and
B in the Container Storage Area, the Overhead Crane
Area, and the Shredder Area;
(B) By December 31, 1999 (the "PHASE TWO
MILESTONE"), all TPH-contaminated soils in the vicinity
of the ASP Building; and
(C) By December 31, 2000 (the "PHASE THREE
MILESTONE"), all TPH-contaminated soils in Area C of
the Container Storage Area and in all remaining
Non-Critical operational areas designated in the
Remediation Plan.
In the event that a Milestone is not met, Continental Placer
Inc. or such other party as MTLM shall designate to the
Companies in writing
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("MTLM'S CONSULTANT") shall, in its sole discretion,
following consultation with the Companies's remediation
consultant, determine whether to extend the applicable
Milestone to permit further bioremediation efforts. If
MTLM's Consultant determines not to extend the date of the
Milestone, the Companies shall promptly discontinue their
efforts to remediate the TPH-contaminated soils by
bioremediation and shall instead meet their obligations under
the Remediation Plan through removal and off-site disposal of
the TPH-contaminated soils. If MTLM's Consultant determines
to extend the date of a Milestone, it shall also, in its sole
discretion, determine whether and to what extent any
subsequent Milestone or Milestones shall also be extended.
All determinations by MTLM's Consultant under this subsection
(iii) shall be binding upon and shall not be appealable by the
Companies.
(iv) During the course of their implementation of the
Remediation Plan, the Companies shall at all times keep
MTLM's Consultant fully advised concerning all aspects of the
Remediation and shall provide to the Consultant all data and
other information with respect to the Remediation that the
Consultant shall request. In addition, the Companies shall
provide MTLM's Consultant with quarterly written reports
concerning the implementation of the Remediation Plan, in
such form and detail as the Consultant shall reasonably
request and shall afford the Consultant full opportunity to
comment upon and make non-binding suggestions concerning the
Remediation.
(v) The Companies covenant that completion of the Phase
One portion of the Remediation Plan shall not in any way
interfere with the operation of the fragmentizer equipment
used in connection with the Business.
(4) Satisfaction of Companies' Remediation Obligation.
(i) If, as a result of the aforementioned Transfer Act
filing, the Commissioner of Environmental Protection requires
DEP review and approval of Remediation of the Owned Premises
and Leased Premises, the Companies' responsibility for such
Remediation shall be satisfied upon written approval by the
DEP that all Remediation has been performed in accordance
with the Remediation Standards except postremediation
monitoring or natural attenuation monitoring.
(ii) If the Commissioner of Environmental Protection
allows a Licensed Environmental Professional ("LEP") to
verify that Remediation has been performed in accordance with
the Remediation Standards, the Companies' responsibility for
such Remediation shall be satisfied upon
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written verification by Xxx X. Xxxxxx, Inc. or another LEP
reasonably satisfactory to MTLM that the Remediation has been
performed in accordance with the Remediation Standards except
postremediation monitoring or natural attenuation monitoring,
or that no Remediation is necessary to achieve compliance with
the Remediation Standards. Upon issuance of such
verification, the Companies shall cause the LEP to
simultaneously certify such verification to MTLM and AMI.
(iii) Upon receipt of documentation under Sections
11.19(a)(4)(i) or (ii), above that the Environmental
Conditions and/or Remediation of the Owned Premises and
Leased Premises meet the Remediation Standards in effect at
that time, the Companies shall have no further responsibility
for the Remediation of the Owned Premises and Leased
Premises; provided, however, that nothing contained in this
Section 11.19(a)(4) shall relieve the Companies or the
Shareholder from liability for inaccuracy or breach of any of
the representations, warranties or covenants contained in
this Agreement. If postremediation monitoring or natural
attenuation monitoring is required it shall be the
responsibility of the Companies to conduct such monitoring
(which responsibility of the Companies shall continue after
purchase of the Owned Premises by Buyer), and if further
remediation of Environmental Conditions existing
on or emanating from the Owned Premises or Leased Premises
prior to the Closing Date is necessary based upon the results
of such monitoring, the Companies shall take such further
action to remediate the Owned Premises and Leased Premises in
accordance with the Remediation Standards (which
responsibility of the Companies shall continue after purchase
of the Owned Premises by Buyer).
(5) The Companies' Cooperation with Buyer during Remediation.
In connection with the Remediation of the Owned Premises and Leased
Premises, the Companies covenant that they shall take all
reasonable steps to minimize interference with Buyer's ability to
conduct operations in the ordinary course, including the provision
of reasonable advance notice of work to be performed.
(b) Off-Site Environmental Liabilities. The Companies covenant that
they shall be responsible for all actions brought or claims made pursuant
to any Environmental, Health and Safety Laws arising from the alleged
Discharge or Release, or threatened Discharge or Release of Hazardous
Substances transported off the Owned Premises or Leased Premises prior to
the Closing Date.
11.20. Environmental Covenants of Buyer.
(a) Buyer covenants that on and after the Closing Date, it will
comply with all applicable Environmental, Health and Safety Laws and will
maintain compliance in all material respects with the terms and
conditions of all Permits required for the ongoing
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operation of the Business and its use and occupancy of the Owned Premises
and Leased Premises, as more fully described in the Lease, a copy of which
is attached hereto as Exhibit A.
(b) Buyer covenants that on and after the Closing Date and until the
expiration of the term of the Lease, including any extensions thereof, it
will continue to operate the Business and will use and occupy the Owned
Premises and Leased Premises in substantially the same manner (as to type
of business) as the Companies currently operate the Business and use and
occupy the Owned Premises and Leased Premises. In addition Buyer may
engage in other ferrous and non-ferrous scrap metal processing and
recycling operations without the consent of the Companies or the lessor
under the Lease, and such other uses and activities as may be approved
in writing by the Companies and the lessor under the Lease.
(c) Remediation of Environmental Conditions Arising After Closing
Date. Buyer covenants that it shall be responsible for remediation of
Environmental Conditions resulting from its operations on the Owned
Premises and the Leased Premises after the Closing Date, except as set
forth in Section 11.19(a)(3) herein with respect to the Remediation of
certain post-closing Releases from operations in the ordinary course in
the areas specified in Section 11.19(a)(3). In addition to the
obligations in the foregoing sentence, with respect to each of the
locations identified in Section 11.19(a)(3), upon completion of the
improvements as required in Section 11.21 of this Agreement, Buyer shall,
for each respective location, be responsible for Remediation of any and
all Hazardous Substances Discharged or Released from the operations of
the Business at each such location.
(d) Buyer's Cooperation with Companies' Remediation.
(i) Buyer covenants that, except as provided in
subsection (ii) below, it will use reasonable efforts not to
materially interfere with or substantially increase the cost of
the Companies' performance of Remediation of any Environmental
Condition or any other obligations of the Companies required by
this Agreement other than in the ordinary course of business.
Buyer also covenants that it will cooperate with any application
by the Companies for any alternative or site specific remediation
standards, or any variances sought pursuant to the Remediation
Standards.
(ii) In the event that Buyer elects to modify or expand
its operations or activities in a way that materially
interferes with the Companies' performance of Remediation of any
Environmental Condition, Buyer shall reimburse the Companies for
any additional costs that they incur in the Remediation in excess
of those costs that the Companies would otherwise have incurred
in implementing the Remediation Plan (the "INCREMENTAL COSTS"),
and any Milestones and other conditions of the Remediation Plan
shall be extended to reflect such interference; provided,
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however, that Buyer may not modify or expand its operations or
activities in a way that prevents or substantially
interferes with the Companies' compliance with the orders or
directives of any Governmental Entity or prevents or
substantially jeopardizes the Companies' ability to complete
the Remediation Plan by December 31, 2001. Without limiting
the foregoing, if Buyer requires access to certain on-site
land for new operations and wishes the Companies to excavate
TPH-contaminated soils and replace those soils with clean
fill in a manner that is inconsistent with the Remediation
Plan, Buyer shall reimburse the Companies for any Incremental
Costs incurred and shall modify the Milestones to reflect the
consequences of such requirement.
(iii) Buyer shall allow the Companies to use its
treatment facilities in connection with the Companies'
Remediation, as long as: (x) such use does not unreasonably
interfere with Buyer's operations, and (y) the Companies
compensate Buyer for any incremental costs incurred by Buyer
in connection with the use of its facilities. In particular,
and without limiting the foregoing, Buyer covenants that it
will continue to operate and maintain the wastewater
treatment system in compliance with its wastewater discharge
permit, and will accept and treat wastewater collected in the
Companies' remediation trench system, as long as inclusion of
wastewater from the trench system does not result in a
violation of Buyer's wastewater discharge permit, and as long
as the Companies reimburse Buyer for any increased costs to
Buyer in operating Buyer's wastewater treatment system. To
the extent reasonably necessary, the Companies shall have
full right and privilege to the use of all utilities which
are reasonably necessary for performance of the Companies'
environmental obligations pursuant to this Agreement. The
Companies shall promptly reimburse Buyer for the costs of any
utilities consumed by the Companies.
(e) In recognition of the desirability of coordinating
communications with environmental agencies, unless otherwise required by
law, Buyer shall generally allow the Companies to serve as the liaison
with the DEP or other agencies with jurisdiction over Environmental
Conditions with respect to any Environmental Condition for which the
Companies are responsible, and, in the event Buyer desires to engage in
direct communications with the DEP or other such agency with respect to
any Environmental Condition for which the Companies are responsible,
Buyer will not initiate any such communications without first notifying
the Companies and affording the Companies a reasonable opportunity to
participate in such communications. Buyer will be provided with a
reasonable opportunity to comment on the Companies' proposed Remediation
plans. However, as long as such plans are consistent with the
Remediation Plan set forth in Schedule 11.19(a), final decisions as to
the manner and nature of the specific plans by which the Remediation Plan
is implemented shall be at the sole discretion of the
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Companies. Buyer shall promptly refer to the Companies any DEP or other
agency communications relating to any Environmental Condition which are
received by Buyer.
(f) Off-Site Environmental Liabilities. Buyer covenants that it
shall be responsible for all actions brought or claims made pursuant to
any Environmental, Health and Safety Laws arising from the alleged
Discharge or Release or threatened Discharge or Release of Hazardous
Substances transported off the Owned Premises or Leased Premises on or
after the Closing Date. This provision shall not apply to Hazardous
Substances transported off site by the Companies or their agents in
connection with the Remediation of the Owned Premises and Leased Premises
conducted by the Companies under this Agreement.
11.21 Covenants as to Management and Containment Improvements.
(a) As an adjunct to Remediation of the Owned Premises and Leased
Premises in the South and North Properties, (and in order to avoid
recontamination of certain portions of the Owned Premises and Leased
Premises, as shown on Schedule 11.19(a) after Remediation), the Companies
shall use their best efforts to complete no later than one year after the
Closing Date, but in no event later than the eighteen (18) month
anniversary of the Closing Date at their sole cost and expense, certain
improvements in the South and North Properties in the following specific
locations: (i) container storage area (west of the Main building on the
South Property), (ii) crane runway (North Property); and (iii) pads
around the Shredder (North Property). Schedule 11.19(a) attached hereto
contains a design of the required improvements. No changes to the design
or scope of the improvements, or reduction in size of the pads or
canopies included as part of the improvements, shall be made without the
prior written approval of MTLM's Consultant.
(b) Construction of the improvements described in Schedule 11.19(a)
shall be undertaken in phases and shall be closely coordinated between
the Companies and MTLM and AMI so as to minimize interference with MTLM's
and AMI's operations in the ordinary course and the Companies'
Remediation of the Owned Premises and Leased Premises. All construction
shall be performed in a good and workmanlike manner in accordance with
all applicable laws and building codes and to the reasonable satisfaction
of MTLM and AMI. Prior to implementation of the improvements, each of
the Shareholder, Xxxx Xxxx (or, if applicable, his successor) and Xxxxx
Xxxxxx (or, if applicable, his successor) shall certify in writing that
in his judgment implementation of the proposed improvements will not,
either during construction or thereafter, have a material adverse impact
on the current and anticipated operations of MTLM and AMI.
11.22 Buyer's Right to Cure the Companies' Noncompliance with Remediation
Obligation. In connection with the Companies' obligation to remediate
Environmental Conditions on the Owned Premises or Leased Premises pursuant to
Section 11.19 of this Agreement, if the Companies fail to comply with: (i) a
final administrative order (after appeal rights have been exhausted), (ii) a
consent order, (iii) a final judgment in an action brought by the Attorney
General
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to enforce the Transfer Act, or (iv) any requirement of the Remediation
Plan (unless an order, judgment or other directive of a governmental entity
requires otherwise), Buyer may give written notice of its intent to cure such
noncompliance, and unless the Companies shall within ten (10) days of receipt
of such notice, undertake and proceed with reasonable diligence to cure such
noncompliance, Buyer may at its election, but without the obligation so to do,
cause such work as is required to be performed in order to cure such failure of
compliance. Any amounts paid by Buyer as a result of the Companies' failure to
comply herewith, together with interest thereon at the Prime Rate announced
from time to time by LaSalle National Bank or its successor, shall be
immediately due and payable by the Companies to Buyer.
11.23 Payment of Estimated Amounts; Adjustments. The parties acknowledge
that certain accrued expenses and accounts payable of the Companies used in
determining the Valuation Date Amount (such as certain inventory which has not
yet been processed) have been estimated by the parties using good faith
estimates of the amount they actually expect to incur. In the event that the
actual amount of such estimated amounts (to be determined by the parties within
90 days following the Closing Date) are more or less than the amounts
estimated, AMI shall pay to the Companies the net amount of any excess of
estimated amounts over actual amounts, and/or the Companies shall pay to AMI the
net amount of any excess of actual amounts paid over such estimated amounts.
Personal and real property taxes payable to the City of Hartford shall be
adjusted between AMI and the Companies so that AMI shall bear the portion
thereof which is allocable to the period from and after the Closing Date and the
Companies shall bear the portion thereof which is allocable to the period prior
to the Closing Date. This adjustment shall be made as soon as is practical
following the Closing and any amounts due either AMI or the Companies, as the
case may be, shall be paid promptly after such adjustment is determined.
ARTICLE XII
TERMINATION
12.1 Termination. Anything contained in this Agreement to the contrary
notwithstanding, this Agreement may be terminated:
(a) at any time prior to the Closing Date, by mutual written consent
of all of the parties hereto;
(b) at any time prior to the Closing Date, by MTLM in the event of a
material breach by any of the Companies or the Shareholder of any
provision of this Agreement;
(c) at any time prior to the Closing Date, by the Companies or the
Shareholder in the event of a material breach by MTLM or AMI of any
provision of this Agreement;
(d) Intentionally Omitted;
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(e) By Buyer in the event that any of the conditions precedent to
Closing set forth in Articles VI and VII shall not have been satisfied or
waived on or prior to the Closing; or
(f) By the Companies or the Shareholder in the event that any of the
conditions precedent to Closing set forth in Article VIII shall not have
been satisfied or waived by the Companies or the Shareholder on or prior
to Closing.
12.2 Notice of Termination. Any party desiring to terminate this
Agreement pursuant to Section 12.1 shall give notice of such termination to the
other party to this Agreement.
12.3 Effect of Termination. In the event that this Agreement shall be
terminated pursuant to this Article XII all further obligations of the parties
under this Agreement (other than Sections 14.2 and 14.10) shall be terminated
without further liability of any party to the other, provided that nothing
herein shall relieve any party from liability for its breach of any provision
of this Agreement.
ARTICLE XIII
DEFINITIONS
13.1 Defined Terms. As used herein, the following terms shall have the
following meanings:
"Aboveground Storage Tanks" defined in Section 4.13(h).
"Affiliate" shall have the meaning ascribed to it in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act, as in effect on
the date hereof.
"Asbestos" or "Asbestos-containing material" defined in Section
4.13(j).
"Assumed Liabilities" defined in Section 1.3.
"Assumption Agreement" defined in Section 1.3.
"August 31, 1997 Valuation Amount" means the greater of: (a)
$20,000,000; and (b) (i) the net book value of the Purchased Assets as of
August 31, 1997, less (ii) the amount of the liabilities to be assumed as
of August 31, 1997 as reflected in the August 31, 1997 balance sheets of
the Companies subject to adjustment consistent with the Balance Sheet
Adjustments determined in accordance with GAAP, after making the Balance
Sheet Adjustments.
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"Balance Sheet" means the audited balance sheet of the Companies as
of May 31, 1997, included in Schedule 4.9.
"Balance Sheet Adjustments" means the adjustments to the balance
sheet listed below: (i) elimination of cash, deferred income taxes,
investments, officer's life insurance, intangible asset - pension plans,
income taxes payable, all notes payable (including the bank note
payable), pension liability, common stock, additional paid in capital,
retained earnings, pension liability adjustment and intercompany
Receivables and accounts payable between either Aerospace or Titanium and
Xxxxx Corp., a Connecticut corporation and a wholly-owned subsidiary of
Aerospace; (ii) increase in Receivables by the allowance for doubtful
accounts and the reserve for sales adjustments; (iii) increase or
decrease, as applicable, in inventory due to the change in inventory
valuation method from LIFO to FIFO; and (iv) decrease in (a) property,
plant and equipment by the net book value of real estate and (b) prepaid
items by the amount of all prepaid insurance premiums which will not
accrue to the benefit of the Buyer.
"Balance Sheet Date" means May 31, 1997.
"Xxxx of Sale" means the Xxxx of Sale in the form attached hereto as
of Exhibit C.
"Business" defined in the Recitals to this Agreement.
"Buyer Claims" as defined in Section 9.2.
"Buyer Indemnifiable Damages" defined in Section 9.1(a).
"Cash Portion" defined in Section 2.1(a).
"CERCLA" defined in Section 4.13(e).
"Cleanup Escrow Agreement" means the Escrow Agreement in the form
attached as Exhibit F.
"Cleanup Liability" defined in Section 9.1(a).
"Closing Date" defined in Section 3.1.
"Code" defined in Section 4.18(b).
"Common Stock" means shares of MTLM's common stock, $.01 par value
per share.
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"Contract" means any indenture, lease, sublease, license, loan
agreement, mortgage, note, indenture, restriction, will, trust,
commitment, obligation or other contract, agreement or instrument,
whether written or oral.
"Current Balance Sheet" defined in Section 4.9.
"DEP" defined in Section 11.19(a).
"Discharge" defined in Section 4.13(f).
"DOJ" defined in Section 11.10.
"Effective Time" defined in Section 3.1.
"Employee Benefit Plans" defined in Section 4.18(a).
"Employment Agreements" means the Employment Agreements between
Buyer and each of Xxxxxxx Xxxxxxx, Xxxx Xxxx, Xxxxx Xxxx, Xxxx Xxxxxx,
Xxxxxxxx Xxxxxxxx, Xxxxxxx Xxxxxx and Xxxx Xxxxxx in the forms attached
hereto as Exhibit I.
"Environmental Condition" defined in Section 11.19(a).
"Environmental, Health and Safety Laws" defined in Section 4.13(k).
"EPCRA" defined in Section 4.13(e).
"ERISA" defined in Section 4.18(a).
"Escrow Agreements" defined in Section 2.1(a).
"Escrow Amount" defined in Section 2.1(a).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Excluded Assets" defined in Section 1.2.
"Excluded Liabilities" defined in Section 1.4.
"FIFRA" defined in Section 4.13(e).
"Financial Statements" defined in Section 4.9.
"Fixed Asset Update Schedule" defined in Section 4.33.
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"FTC" defined in Section 11.10.
"GAAP" means generally accepted accounting principles in effect in
the United States of America from time to time, consistently applied.
"General Escrow Agreement" means the Escrow Agreement in the form
attached as Exhibit G.
"Governmental Authority" means any nation or government, any state,
regional, local or other political subdivision thereof, and any entity or
official exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Hazardous Substances" defined in Section 4.13(e).
"HSR Act" defined in Section 4.6.
"Incremental Costs" defined in Section 11.20(d).
"Indemnification Security" defined in Section 9.7.
"Indemnified Party" defined in Section 9.4(a).
"Insurance Policies" defined in Section 4.20.
"Intellectual Property" defined in Section 4.24.
"Lease" means the Lease Agreement in the form attached hereto as
Exhibit A.
"Leased Premises" defined in Section 4.14(b).
"Leases" defined in Section 4.14(b).
"LEP" defined in Section 11.19(a).
"Licenses" defined in Section 4.13(b).
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including, but not limited to, any
conditional sale or other title retention agreement, any lease in the
nature thereof, and the filing of or agreement to give any financing
statement under the Uniform Commercial Code or comparable law or any
jurisdiction in connection with such mortgage, pledge, security interest,
encumbrance, lien or charge).
"Milestones" defined in Section 11.19(a).
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"Material Adverse Change (or Effect)" means a change (or effect), in
the condition (financial or otherwise), properties, assets, liabilities,
rights, obligations, operations, business or prospects which change (or
effect) individually or in the aggregate, is materially adverse to such
condition, properties, assets, liabilities, rights, obligations,
operations, business or prospects.
"Material Customers" defined in Section 4.26.
"MTLM's Consultant" defined in Section 11.19(a).
"MTLM Shares" defined in Section 2.1(b).
"New Permits" defined in Section 4.22.
"Option Agreement" means the Option Agreement in the form attached
hereto as Exhibit B.
"OSHA" defined in Section 4.13(e).
"Other Agreements" defined in Section 11.13.
"Owned Premises" defined in Section 1.2(f).
"PBGC" defined in Section 4.18(f).
"Permits" defined in Section 4.22.
"Permitted Liens" means: (a) Liens for taxes and other governmental
charges and assessments which are not yet due and payable; (b) Liens of
landlords and liens of carriers, warehousemen, mechanics and materialmen
and other like Liens arising in the ordinary course of business for sums
not yet due and payable; and (c) other Liens or imperfections on property
which are not material in amount or do not materially detract from the
value of or materially impair the existing use of the property affected
by such Lien or imperfection.
"Person" means an individual, partnership, corporation, business
trust, joint stock company, estate, trust, unincorporated association,
joint venture, Governmental Authority or other entity, of whatever nature.
"Phase One Milestone" defined in Section 11.19(a).
"Phase Three Milestone" defined in Section 11.19(a).
"Phase Two Milestone" defined in Section 11.19(a).
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"Pre-Closing Inventory" defined in Section 2.3.
"Purchased Assets" defined in Section 1.1.
"Purchased Contracts" defined in Section 4.25.
"Purchase Price" defined in Section 2.1
"Purchase Price Adjustment" defined in Section 2.3.
"RCRA" defined in Section 4.13(e).
"Receivables" means all receivables of each the Companies, including
all trade account receivables arising from the provision of services or
sale of inventory, notes receivable, and insurance proceeds receivable.
"Register", "registered" and "registration" refer to a registration
of the offering and sale of securities effected by preparing and filing a
registration statement in compliance with the Securities Act and the
declaration or ordering of the effectiveness of such registration
statement.
"Registration Rights Agreement" means the Registration Rights
Agreement in the form attached hereto as Exhibit H.
"Release" defined in Section 4.13(f).
"Remediation" defined in Section 11.19(a).
"Remediation Plan" defined in Section 11.19(a).
"Remediation Standards" defined in Section 11.19(a).
"Restricted Territory" defined in Section 11.8(a).
"SEC" means the Securities and Exchange Commission.
"SEC Documents" defined in Section 5.5.
"Securities Act" means the Securities Act of 1933, as
amended.
"Seller Claims" as defined in Section 9.4.
"Seller Indemnifiable Damages" defined in Section 9.3(a).
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"Shareholder" defined in the introductory paragraph of this Agreement
"Stock Portion" defined in Section 2.1(b).
"Tax Return" means any tax return, filing or information statement
required to be filed in connection with or with respect to any Taxes; and
"Taxes" means all taxes, fees or other assessments, including, but
not limited to, income, excise, property, sales, franchise, intangible,
withholding, social security and unemployment taxes imposed by any
federal, state, local or foreign governmental agency, and any interest or
penalties related thereto.
"TPH" defined in Section 11.19(a).
"Transfer Act" defined in Section 11.19(a).
"Underground Storage Tanks" defined in Section 4.13(h).
"Union Contract" shall mean the collective bargaining agreement by
and between Xxxxxxx & Xxxxxxxxxx and the United Steelworkers of America
Local 14294.
"Valuation Date" means the close of business on the last day prior
to the Closing Date.
"Valuation Date Amount" means the net book value of the Purchased
Assets as of the Valuation Date less the amount of the liabilities to be
assumed as of the Valuation Date, which shall be those categories of
liabilities, but not necessarily the amounts, reflected in the August 31,
1997 balance sheets of the Companies, subject to adjustment consistent
with the Balance Sheet Adjustments, determined in accordance with GAAP.
"Waste" defined in Section 4.13(e).
"Welfare Plan" defined in Section 4.18(e).
13.2 Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the defined
meanings when used in any certificates, reports or other documents made
or delivered pursuant hereto or thereto, unless the context otherwise
requires.
(b) Terms defined in the singular shall have a comparable meaning
when used in the plural, and vice versa.
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(c) All matters of an accounting nature in connection with this
Agreement and the transactions contemplated hereby shall be determined in
accordance with GAAP applied on a basis consistent with prior periods,
where applicable.
(d) As used herein, the neuter gender shall also denote the
masculine and feminine, and the masculine gender shall also denote the
neuter and feminine, where the context so permits.
ARTICLE XIV
GENERAL PROVISIONS
14.1 Survival of Obligations. All representations, warranties, covenants
and obligations contained in this Agreement shall survive for such time as the
indemnity for the breach thereof shall survive as set forth in Sections 9.1,
9.2 and 9.3.
14.2 Confidential Nature of Information. Each party agrees that it will
treat in confidence all documents, materials and other information which it
shall have obtained regarding the other party during the course of the
negotiations leading to the consummation of the transactions contemplated
hereby (whether obtained before or after the date of this Agreement), the
investigation provided for herein and the preparation of this Agreement and
other related documents. Such documents, materials and information shall not
be communicated to any third Person (other than, in the case of Buyer, to its
counsel, accountants, financial advisors or lenders, and in the case of the
Companies and the Shareholder, to their counsel, accountants or financial
advisors). No other party shall use any confidential information in any manner
whatsoever except solely for the purpose of evaluating the proposed purchase
and sale of the Purchased Assets; provided, however, that after the Closing
Buyer may use or disclose any confidential information included in the
Purchased Assets. The obligation of each party to treat such documents,
materials and other information in confidence shall not apply to any
information which: (i) is or becomes available to such party on a
non-confidential basis from a source other than such party; (ii) is or becomes
available to the public other than as a result of disclosure by such party or
its agents; (iii) is required to be disclosed under applicable law or judicial
process, but only to the extent it must be disclosed; or (iv) such party
reasonably deems necessary to disclose to obtain any of the consents or
approvals contemplated hereby, provided that the disclosing party gives
reasonable prior notice to the other parties.
14.3 No Public Announcement. Neither Buyer nor any of the Companies, nor
the Shareholder, without the approval of the other, shall make any press
release or other public announcement concerning the transactions contemplated
by this Agreement, except as and to the extent that any such party shall be so
obligated by law, in which case the other party shall be advised and the
parties shall use their best efforts to cause a mutually agreeable release or
announcement to be issued; provided that the foregoing shall not: (i) preclude
communications or disclosures necessary to implement the provisions of this
Agreement or to comply with any
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accounting rules; or (ii) prevent MTLM from making any public disclosure
which MTLM believes in good faith is required by law or by the terms of any
listing agreement with or requirements of a securities exchange.
14.4 Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed given, delivered and received
(a) when delivered, if delivered personally by a commercial messenger delivery
service with verification of delivery, (b) four days after mailing, when sent
by registered or certified mail, return receipt requested and postage prepaid,
(c) one business day after delivery to a private courier service, when
delivered to a private courier service providing documented overnight service,
(d) on the date of delivery if delivered by facsimile and electronically
confirmed before 5:00 p.m. (local time) on any business day, or (e) on the next
business day if delivered by facsimile and electronically confirmed either
after 5:00 p.m. (local time) or on a non-business day, in each case addressed
as follows:
If to any of the Companies or the Shareholder:
c/o Xxxxxxx Xxxxxxx
00 Xxxxxxx Xxxx
Xxxx Xxxxxxxx, Xxxxxxxxxxx 00000
Telecopy No.: (000) 000-0000
with a copy to:
Mr. Xxxxxx Xxxxxxx
Murtha, Cullina, Xxxxxxx & Xxxxxx
Cityplace I
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Telecopy No.: (000) 000-0000
If to Buyer:
Metal Management, Inc.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn: Chief Executive Officer
Fax: (000) 000-0000
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with a copy to:
Xxxxxxx & Xxxxxxxx Ltd.
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Fax: (000) 000-0000
or to such other address or addresses as may hereafter be specified by notice
given by any of the above to the others.
14.5 Successors and Assigns.
(a) The rights of any party under this Agreement shall not be
assignable by such party hereto prior to the Closing without the written
consent of the other, except that the rights of Buyer (but not its
obligations) hereunder may be assigned without the consent of any of the
Companies or the Shareholder, (i) prior to the Closing, to any of its
Affiliates and (ii) to financial institutions from time to time providing
financing to Buyer or such Affiliate.
(b) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their successors and permitted assigns. The
successors and permitted assigns hereunder shall include without
limitation, in the case of Buyer, any Affiliate as well as the
successors in interest to such Affiliate (whether by merger, liquidation
(including successive mergers or liquidations) or otherwise). Nothing in
this Agreement, expressed or implied, is intended or shall be construed
to confer upon any Person other than the parties and successors and
assigns permitted by this Section 14.5 any right, remedy or claim under
or by reason of this Agreement.
14.6 Access to Records after Closing. For the period of the survival of
any indemnification obligations hereunder, each of the Companies and its
representatives shall have reasonable access to all of the books and records of
the Business transferred to Buyer hereunder to the extent that such access may
reasonably be required by any of the Companies or the Shareholder in connection
with matters relating to or affected by the operations of the Business prior to
the Closing Date or pursuant to any collections of accounts receivable. Such
access shall be afforded by Buyer upon receipt of reasonable advance notice and
during normal business hours. Each of the Companies shall be solely
responsible for any costs or expenses incurred by it pursuant to this Section
14.6. If Buyer shall desire to dispose of any of such books and records prior
to the expiration of such period, Buyer shall, prior to such disposition, give
the Companies a reasonable opportunity, at the Companies' expense, to segregate
and remove such books and records as the Companies may select.
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For a period of three years after the Closing Date, Buyer and its
representatives shall have reasonable access to all of the books and records
relating to the Business which any of the Companies or any of their Affiliates
may retain after the Closing Date. Such access shall be afforded by the
Companies and their respective Affiliates upon receipt of reasonable advance
notice and during normal business hours. Buyer shall be solely responsible for
any costs and expenses incurred by it pursuant to this Section 14.6. If any of
the Companies or any of their Affiliates shall desire to dispose of any of such
books and records prior to the expiration of such three-year period, such party
shall, prior to such disposition, give Buyer a reasonable opportunity, at
Buyer's expense, to segregate and remove such books and records as Buyer may
select.
14.7 Entire Agreement; Amendments. This Agreement and the Exhibits and
Schedules referred to herein and the documents delivered pursuant hereto
contain the entire understanding of the parties hereto with regard to the
subject matter contained herein or therein, and supersede all prior agreements,
understandings or letters of intent between or among any of the parties hereto.
This Agreement shall not be amended, modified or supplemented except by a
written instrument signed by an authorized representative of each of the
parties hereto.
14.8 Interpretation. Article titles and headings to sections herein are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement. The Schedules
and Exhibits referred to herein shall be construed with and as an integral part
of this Agreement to the same extent as if they were set forth verbatim herein.
14.9 Waivers. Any term or provision of this Agreement may be waived, or
the time for its performance may be extended, by the party or parties entitled
to the benefit thereof. Any such waiver shall be validly and sufficiently
authorized for the purposes of this Agreement if, as to any party, it is
authorized in writing by an authorized representative of such party. The
failure of any party hereto to enforce at any time any provision of this
Agreement shall not be construed to be a waiver of such provision, nor
in any way to affect the validity of this Agreement or any part hereof or the
right of any party thereafter to enforce each and every such provision. No
waiver of any breach of this Agreement shall be held to constitute a waiver of
any other or subsequent breach.
14.10 Expenses. Each party hereto will pay all costs and expenses
incident to its negotiation and preparation of this Agreement and to its
performance and compliance with all agreements and conditions contained herein
on its part to be performed or complied with, including the fees, expenses and
disbursements of its counsel and accountants.
14.11 Partial Invalidity. Wherever possible, each provision hereof shall
be interpreted in such manner as to be effective and valid under applicable
law, but in case any one or more of the provisions contained herein shall, for
any reason, be held to be invalid, illegal or unenforceable in any respect,
such provision shall be ineffective to the extent, but only to the extent, of
such invalidity, illegality or unenforceability without invalidating the
remainder of such invalid, illegal
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or unenforceable provision or provisions or any other provisions hereof,
unless such a construction would be unreasonable.
14.12 Execution in Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be considered an original instrument,
but all of which shall be considered one and the same agreement, and shall
become binding when one or more counterparts have been signed by each of the
parties hereto and delivered to each of the Companies, the Shareholder and
Buyer.
14.13 Further Assurances. On the Closing Date, the Companies shall: (i)
deliver to Buyer such other bills of sale, deeds, endorsements, assignments and
other good and sufficient instruments of conveyance and transfer, in form
reasonably satisfactory to Buyer and its counsel, as Buyer may reasonably
request or as may be otherwise reasonably necessary to vest in Buyer all the
right, title and interest of the Companies in, to or under any or all of the
Purchased Assets; and (ii) take all steps as may be reasonably necessary to put
Buyer in actual possession and control of all the Purchased Assets. From time
to time following the Closing, each of the Companies shall execute and deliver,
or cause to be executed and delivered, to Buyer such other instruments of
conveyance and transfer as Buyer may reasonably request or as may be otherwise
necessary to more effectively convey and transfer to, and vest in, Buyer and
put Buyer in possession of, any part of the Purchased Assets.
14.14 Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws (as opposed to the conflicts of law
provisions) of the State of Illinois.
14.15 Submission to Jurisdiction. Each of the Companies, the Shareholder
and Buyer hereby irrevocably submit in any suit, action or proceeding arising
out of or related to this Agreement or any of the transactions contemplated
hereby or thereby to the jurisdiction of the United States District Court for
the Northern District of Illinois and the jurisdiction of any court of the
State of Illinois located in Chicago and waive any and all objections to
jurisdiction that they may have under the laws of the States of Connecticut or
Illinois or the United States.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed the day and year first above written.
BUYER:
METAL MANAGEMENT, INC., A DELAWARE CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
AMI ACQUISITION CO., A DELAWARE
CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
THE COMPANIES:
AEROSPACE METALS, INC., A CONNECTICUT
CORPORATION
By: /s/ Xxxxxxx Xxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Chief Executive Officer
AEROSPACE PARTS SECURITY, INC. A
CONNECTICUT CORPORATION
By: /s/ Xxxxxxx Xxxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Chief Executive Officer
THE XXXXXXX TITANIUM CORPORATION, A
CONNECTICUT CORPORATION
By: /s/ Xxxxxxx Xxxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Chief Executive Officer
/s/ Xxxxxxx Xxxxxxx
----------------------------------
XXXXXXX XXXXXXX
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