PURCHASE AND SALE AGREEMENT BY AND AMONG GLOBE METALS ENTERPRISES, INC., CORE METALS GROUP HOLDINGS LLC AND THE SELLERS SET FORTH HEREIN DATED MARCH 26, 2010
EXECUTION
COPY
CONFIDENTIAL
BY
AND AMONG
GLOBE
METALS ENTERPRISES, INC.,
CORE
METALS GROUP HOLDINGS LLC
AND
THE
SELLERS SET FORTH HEREIN
DATED
MARCH 26, 2010
TABLE
OF CONTENTS
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ARTICLE
I DEFINITIONS
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Section
1.1.
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Definitions
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1
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Section
1.2.
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Additional
Defined Terms.
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10
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Section
1.3.
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Construction.
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10
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Section
1.4.
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Annexes
and the Sellers Disclosure Letter
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11
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Section
1.5.
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Knowledge
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11
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ARTICLE
II SALE OF UNITS
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Section
2.1.
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Sale
of Units
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12
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Section
2.2.
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Purchase
Price; Delivery of Funds; Payment of Indebtedness and Company Transaction
Expenses
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12
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Section
2.3.
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Determination
of Purchase Price Adjustment
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13
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Section
2.4.
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Closing;
Closing Deliverables
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17
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ARTICLE
III REPRESENTATIONS AND WARRANTIES OF SELLERS
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Section
3.1.
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Due
Organization, Good Standing and Corporate Power of Sellers
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18
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Section
3.2.
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Authorization;
Noncontravention
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18
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Section
3.3.
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Ownership
of Units
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19
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Section
3.4.
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Solvency
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19
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Section
3.5.
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Exclusivity
of Representations
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19
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ARTICLE
IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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Section
4.1.
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Company,
Company Subsidiaries and Mexico Subsidiaries
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19
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Section
4.2.
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Authorization;
Noncontravention
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20
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Section
4.3.
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Capitalization
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21
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Section
4.4.
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Consents
and Approvals
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22
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Section
4.5.
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Financial
Statements
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22
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Section
4.6.
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Absence
of Certain Changes
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23
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Section
4.7.
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Compliance
with Laws
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24
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Section
4.8.
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Permits
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24
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Section
4.9.
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Litigation
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25
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Section
4.10.
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Employee
Benefit Plans
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25
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Section
4.11.
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Labor
Matters
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26
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Section
4.12.
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Tax
Matters
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27
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Section
4.13.
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Intellectual
Property
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29
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Section
4.14.
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Broker’s
or Finder’s Fee
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30
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Section
4.15.
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Material
Contracts
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30
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Section
4.16.
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Environmental
Matters
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31
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Section
4.17.
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Real
Property; Condition of Personal Property
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31
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Section
4.18.
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Insurance
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34
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Section
4.19.
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Affiliate
Transactions
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34
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Section
4.20.
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Books
and Records
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34
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Section
4.21.
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Competitively
Sensitive Representations
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35
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Section
4.22.
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Employee
Matters
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35
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Section
4.23.
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Solvency
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35
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Section
4.24.
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2008
Purchase Agreement
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36
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Section
4.25.
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Exclusivity
of Representations
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36
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ARTICLE
V REPRESENTATIONS AND WARRANTIES OF PURCHASER
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Section
5.1.
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Due
Organization, Good Standing and Corporate Power
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36
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Section
5.2.
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Authorization;
Noncontravention
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36
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Section
5.3.
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Consents
and Approvals
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37
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Section
5.4.
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Broker’s
or Finder’s Fee
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37
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Section
5.5.
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Funds
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37
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Section
5.6.
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Solvency
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37
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Section
5.7.
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Litigation
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38
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Section
5.8.
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Contact
with Customers and Suppliers
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38
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Section
5.9.
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Investment
Intent
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38
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Section
5.10.
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Investigation
by Purchaser; Company’s Liability
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38
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Section
5.11.
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No
Knowledge of Misrepresentation or Omission
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39
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Section
5.12.
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Affiliates
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39
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Section
5.13.
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Exclusivity
of Representations
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40
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Section
5.14.
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Clean
Team Members.
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40
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ARTICLE
VI COVENANTS
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Section
6.1.
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Access
to Information Concerning Properties and Records
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40
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Section
6.2.
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Confidentiality;
Competitively Sensitive Information
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41
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Section
6.3.
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Conduct
of the Business of the Company Pending the Closing Date
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42
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Section
6.4.
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Supplemental
Information
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44
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Section
6.5.
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Reasonable
Best Efforts
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44
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Section
6.6.
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Exclusive
Dealing
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44
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Section
6.7.
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Antitrust
Laws
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45
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Section
6.8.
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Certain
Employee Matters
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45
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Section
6.9.
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Provisions
in Organizational Documents.
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47
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Section
6.10.
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Public
Announcements
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47
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Section
6.11.
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Notification
of Certain Matters
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48
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Section
6.12.
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Preservation
of Records
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48
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Section
6.13.
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Resignation
of Officers and Directors
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49
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Section
6.14.
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Conflicts;
Privileges
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49
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Section
6.15.
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Compliance
with WARN Act and Similar Statutes
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49
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Section
6.16.
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Taxes
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49
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Section
6.17.
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Conduct
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50
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Section
6.18.
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Environmental
Obligations
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50
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Section
6.19.
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Mexico
Distributions
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50
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ARTICLE
VII CONDITIONS PRECEDENT
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Section
7.1.
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Conditions
to the Obligations of Each Party
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51
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Section
7.2.
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Conditions
to the Obligations of Purchaser
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51
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Section
7.3.
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Conditions
to the Obligations of Sellers
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52
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Section
7.4.
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Frustration
of Closing Conditions
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53
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ARTICLE
VIII TERMINATION AND ABANDONMENT
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Section
8.1.
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Termination
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53
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Section
8.2.
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Effect
of Termination
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54
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ARTICLE
IX MISCELLANEOUS
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Section
9.1.
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Fees
and Expenses
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54
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Section
9.2.
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Extension;
Waiver
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54
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Section
9.3.
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Notices
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54
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Section
9.4.
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Entire
Agreement
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55
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Section
9.5.
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Release
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55
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Section
9.6.
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Binding
Effect; Benefit; Assignment
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56
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Section
9.7.
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Sellers’
Representative
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57
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Section
9.8.
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Dispute
Resolution
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57
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Section
9.9.
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Survival
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59
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Section
9.10.
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Amendment
and Modification
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59
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Section
9.11.
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Counterparts
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59
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Section
9.12.
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Applicable
Law
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59
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Section
9.13.
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Severability
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59
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Section
9.14.
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Specific
Enforcement
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60
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Section
9.15.
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Waiver
of Jury Trial
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60
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Section
9.16.
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Rules
of Construction
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60
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Section
9.17.
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Headings
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60
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Section
9.18.
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Time
of the Essence
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60
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EXHIBITS
Exhibit
A Escrow
Agreement
Exhibit
B Parent
Guarantee
Exhibit
C Sample
Power Invoice
ANNEXES
Annex
A Additional
Defined Terms
Annex
B Form
of Joinder
Annex
C Competitive
Businesses and Products
Annex
D Acknowledgement
Annex
E Form
of Unit Power
This
PURCHASE AND SALE AGREEMENT (this “Agreement”) is dated
March 26, 2010 by and among Globe Metals Enterprises, Inc. (“Purchaser”), a
corporation organized under the Laws of the State of Delaware, Core Metals
Groups Holdings LLC (the “Company”), a limited
liability company organized under the Laws of the State of Delaware and each of
the Persons identified on Section 4.3(a) of the
Sellers Disclosure Letter as a holder of units of limited liability company
interests of the Company (each a “Seller,”
collectively, “Sellers”).
W I T N E S S E T
H:
WHEREAS,
Sellers own, beneficially and of record, all of the issued and outstanding units
of limited liability company interests of the Company (as more particularly
described in Section
4.3) (collectively, the “Units”);
WHEREAS,
Sellers desire to sell, and Purchaser desires to purchase, the Units pursuant to
this Agreement; and
WHEREAS,
it is the intention of the parties hereto that, upon consummation of the
purchase and sale of the Units pursuant to this Agreement, Purchaser shall own
all of the issued and outstanding units of limited liability company interests
of the Company.
NOW,
THEREFORE, in consideration of the premises and of the mutual covenants,
representations, warranties and agreements herein contained, the parties,
intending to be legally bound, agree as follows:
ARTICLE
I
DEFINITIONS
Section
1.1. Definitions
When used
in this Agreement, the following terms shall have the respective meanings
specified therefor below.
“Accounts Receivable”
means all accounts, accounts receivable, notes, notes receivable, trade
receivables, bonds, commissions, and other receivables and rights to payment of
the Company and the Company Subsidiaries, in each case calculated in accordance
with the policies and principles set forth on Section 1.1(b) of
Sellers Disclosure Letter.
“Action” shall mean
any action, complaint, petition, suit, arbitration or other proceeding, whether
civil or criminal, at law or in equity, before any Governmental Entity relating
to this Agreement or the transactions contemplated hereby.
“Affiliate” of any
Person shall mean any Person directly or indirectly controlling, controlled by,
or under common control with, such Person; provided, that, for
the purposes of this definition, “control” (including, with correlative
meanings, the terms “controlled by” and “under common control with”), as used
with respect to any Person, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by Contract or
otherwise.
“Antitrust
Authorities” shall mean the Federal Trade Commission, the Antitrust
Division of the United States Department of Justice, the attorneys general of
the several states of the United States and any other Governmental Entity having
jurisdiction with respect to the transactions contemplated hereby pursuant to
applicable Antitrust Laws.
“Antitrust Laws” shall
mean the Xxxxxxx Act, as amended; the Xxxxxxx Act, as amended; the Federal Trade
Commission Act, as amended; and all other federal, state and foreign statutes,
rules, regulations, orders, decrees, administrative and judicial doctrines and
other laws that are designed or intended to prohibit, restrict or regulate
actions having the purpose or effect of monopolization or restraint of trade,
including, but not limited to, the Competition Act
(Canada).
“Assets” means all of
Company’s and Company Subsidiaries’ right, title, and interest in and to all of
the assets, properties and rights of every nature, kind and description,
tangible and intangible (including goodwill), whether real, personal or mixed,
whether accrued, contingent or otherwise and whether now existing or acquired
prior to Closing, relating to or used or held for use in the operation of the
Business.
“Business” means the
entirety of the principal activities in which the Company and Company
Subsidiaries are currently engaged, including without limitation the manufacture
and sale of ferrovanadium, ferromolybdenum, ferrosilicon, fluorspar, and
fluxes.
“Business Day” shall
mean any day except a Saturday, a Sunday or any other day on which commercial
banks are required or authorized to close in New York, New York.
“Cash and Cash
Equivalents” shall mean cash, checks, money orders, marketable
securities, short-term instruments and other cash equivalents, funds in time and
demand deposits or similar accounts, cash security deposits and other cash
collateral posted with vendors, landlords and other parties, and any evidence of
indebtedness issued or guaranteed by any Governmental Entity.
“Claims” shall mean
any and all actions, causes of action, choses in action, complaints, defenses,
administrative proceedings, investigations, suits, claims, proceedings or
demands of any nature whatsoever, whether known or unknown, in law, equity or
otherwise.
“Clean Team Members”
shall mean Xxxxxxx Xxxxxxxx, Xxxxx Xxxxx, Xxxx Xxxxxxx, Xxx Xxxxxxxxx, Xxxxx
Xxxx, Xxxx Xxxxxxxxxx, Arent Fox LLP and KPMG LLP.
“Closing Cash” shall
mean the aggregate book balance of Cash and Cash Equivalents of the Company and
the Company Subsidiaries calculated in accordance with GAAP applied on a basis
consistent with the preparation of the Financial Statements as of 11:59 P.M. on
the Business Day immediately prior to the Closing Date, if any.
“Closing Indebtedness”
shall mean the aggregate amount outstanding of Indebtedness of the Company and
its Subsidiaries as of 11:59 pm on the Business Day immediately prior to the
Closing Date.
“COBRA” shall mean
Section 4980B of the Code and part 6 of subtitle B of Title I of
ERISA.
“Code” shall mean the
United States Internal Revenue Code of 1986, as amended, and the regulations
promulgated and the rulings issued thereunder.
“Company LLC
Agreement” shall mean that certain Amended and Restated Limited Liability
Company Agreement of the Company, dated as of December 4, 2009.
“Company Transaction
Expenses” shall mean (a) all expenses of the Company and the Company
Subsidiaries incurred or to be incurred (prior to and through the Closing Date)
in connection with the negotiation, preparation and execution of this Agreement
and the consummation of the transactions contemplated hereby and the Closing,
including fees and disbursements of attorneys, accountants and other advisors
and service providers, payable by the Company or the Company Subsidiaries (prior
to and through the Closing Date) pursuant to Section 9.1 and which
have not been paid as of the Closing Date, and (b) the Success Top-up Bonuses
and accrued Employee Incentive Bonuses, in each case, to the extent not paid by
the Company as of 11:59 pm on the Business Day immediately prior to the Closing
Date; provided,
that Indebtedness Consent Expenses shall not constitute, or be included in the
calculation of, Company Transaction Expenses.
“Contract” shall mean
any agreement, contract or instrument, whether written or oral, including all
amendments thereto.
“Contract Purchase
Price” shall mean $52,000,000.
“Dollars Charged”
shall mean, in the context of a Power Invoice from the Tennessee Valley
Authority (the “TVA”) (see the
example attached hereto as Exhibit C) the
difference of (a) the Total Amount Due/Credit Due from page 1 of such Power
Invoice, less (b) the sum (if any) of (x) Prepayment Received, (y) Interest
Accrued on Cash Deposits Per TVA-00056127 SUPP. No. 7, and (z) Early Payment
Credit, each from the Other Charges section of such Power Invoice.
“E&Y” shall mean
Ernst & Young LLP.
“E&Y Audit Cash
Payment” shall mean all the $62,000 in aggregate cash payments made by
the Company and/or the Company Subsidiaries to E&Y since February 1,
2010.
“Employee Incentive
Bonuses” shall mean the aggregate amount of all payments to be made to
Company Employees pursuant to the Company’s Performance Award Plan.
“Environmental Law”
shall mean any Law, Order, or other requirement of Law, relating to the
protection of the environment, including common law nuisance, property damage
and similar common law theories, or the manufacture, use, transport, treatment,
storage, disposal, release or threatened release of petroleum products or any
substance listed, classified or regulated as hazardous or toxic, or any similar
term, under such Law, Order or other requirement of Law.
“Escrow Agent” shall
mean Arent Fox LLP.
“Escrow Agreement”
shall mean the Escrow Agreement in the form of Exhibit A hereto to
be entered into by and among Purchaser, Sellers’ Representative and the Escrow
Agent at Closing.
“EOIP” shall mean the
Company’s Employee Ownership and Incentive Plan.
“EOIP Aggregate
Percentage” shall mean 4.0425%.
“EOIP Holdback
Payment” shall mean the amount of unexpended funds withheld from the
Initial Purchase Price by Sellers’ Representative, if any, owing to the EOIP
Holders from Sellers’ Representative pursuant to the Sellers’ Representative
Agreement.
“GAAP” shall mean
generally accepted accounting principles of the United States of America
consistently applied, as in effect from time to time.
“Governmental Entity”
shall mean any domestic or foreign court, arbitral tribunal, administrative
agency or commission or other governmental or regulatory agency or authority or
any securities exchange.
“Indebtedness” of any
Person shall mean (a) indebtedness for borrowed money or indebtedness issued or
incurred in substitution or exchange for indebtedness for borrowed money, (b)
indebtedness evidenced by any note, bond, debenture, mortgage or other debt
instrument or debt security, or (c) any accrued and unpaid interest owing by
such Person with respect to any indebtedness of a type described in clauses (a)
or (b); provided, that
Indebtedness shall not include capitalized lease obligations, current accounts
payable to trade creditors, accrued expenses arising in the Ordinary Course of
Business consistent with past practice, the endorsement of negotiable
instruments for collection in the Ordinary Course of Business and Indebtedness
owing from the Company to any Company Subsidiary or from any Company Subsidiary
to the Company.
“Initial Purchase
Price” shall mean an amount equal to the sum of (a) the Contract Purchase
Price, (b) plus
or minus, as
the case may be, the Estimated Working Capital Adjustment, (c) plus the Estimated
Closing Cash, (d) minus the Estimated
Closing Indebtedness, (e) minus the aggregate
amount, if any, of Company Transaction Expenses and (f) minus the Purchase
Price Escrow Amount.
“Intellectual
Property” shall mean any of the following (a) patents and patent
applications, (b) registered and unregistered trademarks and service marks,
pending trademark and service xxxx registration applications, including
intent-to-use registration applications, (c) registered and unregistered
copyrights and applications for registration thereof, (d) Internet domain names,
(e) trade secrets and (f) trade names.
“Inventories” means
all inventories of supplies, raw materials, work-in-process, finished products,
goods, replacement and component parts, and other similar materials or property
of the Company and Company Subsidiaries used in connection with the Business,
including Inventories held at any location controlled by the Company and Company
Subsidiaries and elsewhere, including Inventories previously purchased and in
transit to the Company and Company Subsidiaries, in each case, calculated in
accordance with the policies and procedures set forth on Section 1.01(b) to
the Sellers Disclosure Letter.
“Law” shall mean any
statute, law, ordinance, rule, order or judgment (whether temporary, preliminary
or permanent and whether consensual or non-consensual), regulation, writ, standards, code or directive,
any duties imposed under common law, writ, any judicial or administrative
decree, binding directives, notices, any binding request or demand
proclamation, or injunction of any regulatory agency, court or tribunal, issued,
enforced or administered by any Governmental Entity.
“Liabilities” shall
mean any and all debts, liabilities and obligations, whether accrued or fixed,
known or unknown, absolute or contingent, matured or unmatured or determined or
determinable.
“Liens” shall mean any
liens, security interests, charges, equitable interests or mortgages,
encumbrances, deeds of trust, other consensual liens, judgment liens, pledges,
assignments, liens for delinquent real property taxes or assessments, ground
leases, rights of possession, other tax liens or statutory liens, mechanics’
liens, materialmen’s liens, easements, covenants, conditions, restrictions,
consent orders, leases, subleases, licenses, rights of way, conditional sales
contracts, warrants, options, calls, rights of first refusal or rights of first
offer, or any other vested or contingent right or claim of any party other than
the Company or any Affiliate of the Company that is (or that without further
action by the Company or any Company Subsidiary would become) superior to the
Company’s or a Company Subsidiary’s right, title or interest in and to any
Asset.
“Loss” or “Losses” shall mean any and all
Claims, judgments, awards, Liabilities, losses, obligations, debts, sums of
money, costs or damages, including reasonable attorneys’ fees and, accountants’,
experts’ and investigators’ expenses.
“Material Adverse
Effect” shall mean any change or effect having a material adverse effect
on the results of operations or financial condition of the Company and the
Company Subsidiaries, taken as a whole; provided, however, that changes
or effects relating to: (a) adverse changes in global economic or political
conditions or the global financing, banking, currency or capital markets in
general; (b) any adverse changes in Laws or Orders or interpretations thereof or
changes in GAAP accounting requirements or any other change or effect arising
out of or relating to any proceeding, Action or Order before a Governmental
Entity; (c) any adverse changes generally affecting the industries or markets in
which the Company or the Company Subsidiaries conduct the Business, including as
a result of any natural disaster, terrorism, industrial sabotage or war (whether
or not declared) whether or not occurring or commenced before or after the date
of this Agreement; provided, that such
changes do not have a disproportionately negative impact on the Company and the
Company Subsidiaries, taken as a whole, or TAC as compared to other companies in
the industry, markets or geographic areas in which the Company and the Company
Subsidiaries operate; (d) the announcement, execution, pendency or performance
of this Agreement or the transactions contemplated hereby or any communication
by Purchaser or any of its Affiliates of its plans or intentions (including in
respect of employees) with respect to any of the businesses of the Company and
the Company Subsidiaries including (i) losses or threatened losses of, or any
adverse change in the relationship with, employees, customers, suppliers,
distributors, financing sources, joint venture partners, licensors, licensees or
others having relationships with the Company or any of the Company Subsidiaries
(other than any such losses or threatened losses resulting from a disclosure by
any Seller or Company Employee in violation of any confidentiality obligation
owing to Purchaser, Sellers, the Company and/or any Company Subsidiary) and (ii)
the initiation of litigation by any Person (other than a Governmental Entity)
with respect to this Agreement or any of the transactions contemplated hereby,
other than any litigation or administrative proceeding where (x) an injunction
or other equitable relief to prevent this Transaction is being sought, with a
reasonable likelihood of success or (y) material direct damages are sought, with
a reasonable likelihood of success; (e) the consummation of the transactions
contemplated by this Agreement or any actions by Purchaser or the Company taken
pursuant to this Agreement or in connection with the transactions contemplated
hereby; (f) any material action required to be taken under any Law or Order or
any existing Contract disclosed on the Sellers Disclosure Letter by which the
Company or any of the Company Subsidiaries (or any of their respective
properties) is bound; (g) any failure by the Company or any of the Company
Subsidiaries to meet any internal projections or forecasts; or (h) any matter
disclosed to Purchaser on the Sellers Disclosure Letter as of the date of this
Agreement, in the case of each such matter described in the foregoing clauses
(a) through (g) shall be deemed not to constitute a “Material Adverse Effect”
and shall not be considered in determining whether a “Material Adverse Effect”
has occurred. For the avoidance of doubt, a “Material Adverse Effect” shall be
measured only against past performance of the Company and the Company
Subsidiaries, and not against any forward-looking statements, financial
projections or forecasts of the Company and the Company
Subsidiaries.
“Mexican GAAP” means
Mexican generally accepted accounting principles consistently applied, as in
effect from time to time.
“Monetary Lien” means
any Lien that would be extinguished automatically, that the holder of which has
agreed to discharge and release, or that the holder of which would be obligated
to discharge and release, in each case upon payment of a sum of money,
excluding, however, Liens for Taxes not yet due and payable and inchoate
mechanic’s liens or materialman’s liens.
“Net Proceeds” shall
mean the Initial Purchase Price minus any amounts
withheld from the Initial Purchase Price by Sellers’ Representative pursuant to
the Sellers’ Representative Agreement.
“Order” shall mean any
judgment, order (whether temporary, preliminary or permanent and whether
consensual or nonconsensual), ruling, decision, verdict, injunction, decree,
writ, subpoena, mandate, command, directive, consent, approval, award, permit or
license or any determination or finding by, before, or under the supervision of
any Governmental Entity or any arbitrator, mediator, or other quasi-judicial or
judicially sanctioned Person or entity.
“Ordinary Course of
Business” means the normal manner of operation and conduct of the Company
and Company Subsidiaries and the Business, consistent with the Company’s and
Company Subsidiaries’ past custom and practice (including quantity and
frequency).
“Ospraie Directors”
shall mean Xxxxxx Xxxxxxxxx, Xxxx Xxxxxx and Xxxxxx Xxxxxxxxxxx.
“Ospraie Management
Agreement” shall mean that certain Management Agreement, dated February
13, 2008, by and among, Ospraie Advisors, L.P., Ospraie Management, LLC and the
Company.
“Ospraie Sellers”
shall mean Ospraie Special Opportunities Master Alternative Holdings LLC, The
Ospraie Fund L.P. and Ospraie Holdings, Inc.
“Parent Guarantee”
shall mean that certain Parent Guarantee in the form of Exhibit B
hereto, dated the date hereof, by and among Globe Specialty Metals, Inc.,
Sellers’ Representative and Purchaser.
“Payment Side Letter”
shall mean that certain letter agreement to be entered into at the Closing by
Sellers’ Representative and Purchaser in respect of certain third-party
payments.
“Permitted Liens”
shall mean (a) statutory Liens or other Liens arising automatically by operation
of law and securing payments not yet due, including inchoate mechanics’ Liens or
inchoate materialmens’ Liens, provided in all such cases that an adequate
reserve has been established in accordance with GAAP for the payments secured by
such Liens and that such payments are reflected in current liabilities, (b)
Liens for Taxes not yet due and payable or for current Taxes that may thereafter
be paid without penalty or which are being contested in good faith and by
appropriate proceedings and where an adequate reserve has been established in
accordance with GAAP and is reported as a current liability, excluding, for
purposes of this clause (b), any delinquent real property taxes, special
assessments, water and sewer rents, or other amounts assessed against the
Company or any Company Subsidiary by virtue of its holding title to a Parcel,
(c) the Liens of any mortgage, deed of trust or Uniform Commercial Code or
Personal Property Security Act registrations for personal property in any
jurisdiction relating to security interests in personal property securing
Closing Indebtedness, provided such Closing Indebtedness is paid in full at or
prior to Closing as required herein and provided further that such Liens are
released to Purchaser’s satisfaction at or prior to Closing, (d) Liens created
by licenses granted in the Ordinary Course of Business in any Intellectual
Property, (e) Liens evidenced or perfected by documents that are either included
as exceptions to title in the Updated Title Reports and/or that Seller has
provided or made available to Purchaser as part of the Title Information (but
excluding any defaults under such Liens) provided same are complied with except
as would not be reasonably likely to have a Material Adverse Effect; (f) any
other Liens not described in clauses (a) through (e) above created by this
Agreement or by the actions of Purchaser except as aforesaid; and (g) any and
all other Liens which would not be reasonably likely to have a Material Adverse
Effect; provided, however, that
“Permitted Liens” does not include any Monetary Liens, all of which shall be
discharged and released at Closing pursuant to the terms of this
Agreement.
“Person” shall mean
and include an individual, a partnership, a limited liability partnership, a
joint venture, a corporation, a limited liability company, a trust, an
unincorporated organization, a group and a Governmental Entity.
“Power Rate” shall
mean an amount equal to the quotient of (a) the sum total of Dollars Charged by
the TVA during the period divided by (b) the sum total of the KWh consumed
during the same period as identified as Energy Charges from page 1 of the same
Power Invoice as the Dollars Charged. Both the dollar amount in (a)
and the quantity of KWh in (b) are based on the actual billing from the
TVA.
“Pro Rata Portion”
shall mean, with respect to each Seller and/or EOIP Holder, the percentage set
forth opposite each Person’s name on Section 1.1(a) of the
Sellers Disclosure Letter.
“Property Condition
Reports” means (i) all material capital needs assessments, capital
improvement plans, operation and maintenance plans, engineering reports and
other assessments or evaluations regarding the physical condition of the
Parcels; and (ii) any material budgets or expense plans, projections or analyses
addressing the cost of remediation, renovation or extraordinary maintenance to
or on the Parcels, in either case, to the extent the same are, to the Knowledge
of the Company, in the possession or control of the Company or any Company
Subsidiary.
“Representatives” of
any Person shall mean such Person’s directors, managers, officers, employees,
agents, attorneys, consultants, advisors or other representatives.
“Securities Act” shall
mean the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“Seller Aggregate
Percentage” shall mean 95.9575%.
“Sellers’
Representative” shall mean Ospraie Special Opportunities Master
Alternative Holdings LLC.
“Sellers’ Representative
Agreement” shall mean that certain Sellers’ Representative Agreement,
dated the date hereof, by and among Sellers’ Representative, Sellers and the
EOIP Holders
“Solvent” shall mean,
with respect to any Person, that (a) the property of such Person, at a present
fair saleable valuation, exceeds the sum of its debts (including contingent and
unliquidated debts); (b) the present fair saleable value of the property of such
Person exceeds the amount that will be required to pay such Person’s probable
liability on its debts as they become due; (c) such Person has adequate capital
to carry on its business; (d) such Person has the ability to pay, and is paying,
debts in the Ordinary Course of Business other than as a result of bona fide
dispute; and (e) having the ability to pay, and paying, its debts as they become
due. In computing the amount of contingent or unliquidated liabilities at any
time, such liabilities will be computed at the amount which, in light of all the
facts and circumstances existing at such time, represents the amount that can
reasonably be expected to become actual or matured liabilities.
“Subsidiary”, with
respect to any Person, shall mean (a) any corporation more than fifty percent
(50%) of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is owned by such Person directly or indirectly
through one or more subsidiaries of such Person and (b) any partnership,
association, joint venture or other entity in which such Person directly or
indirectly through one or more subsidiaries of such Person has more than a fifty
percent (50%) equity interest.
“Success Top-up
Bonuses” shall mean the aggregate amount of all payments to be made to
Company Employees pursuant to the Company’s Project Everest Success Fee Program
in connection with the transactions contemplated hereby.
“TAC” shall mean
Tennessee Alloys Company LLC.
“Target Working
Capital” shall mean $13,500,000.
“Taxes” shall mean all
taxes, assessments, charges, duties, fees, levies or other governmental charges
including all United States, Canadian, Mexican, federal, state, provincial,
local, municipal, foreign and other income, gross receipts, franchise, profits,
capital gains, capital stock, transfer, sales, use, occupation, property (real
or personal), excise, severance, windfall profits, stamp, license, payroll,
withholding, employment, premium, environmental, social security (or similar),
unemployment, disability, transfer, registration, value added, alternative or
add-on minimum and other taxes, Canada Pension Plan, employer health tax,
workers’ compensation assessments and experience rating adjustments,
assessments, charges, duties, fees, levies or other governmental charges of any
kind whatsoever (whether payable directly or by withholding and whether or not
requiring the filing of a Return), all estimated taxes, deficiency assessments,
additions to tax, penalties and interest.
“Title Agent” means
the Commercial Services Division of Commonwealth Land Title Insurance Company in
Washington, DC, and/or such other closing agents as Purchaser may designate for
purposes of receiving payments of Closing Indebtedness and coordinating the
release of Liens relating thereto.
“Title Information”
shall mean all of the following that, to the Knowledge of the Company, is in the
possession of the Company, any Company Subsidiary or the Sellers’
Representative: (a) title insurance policies (including all endorsements), title
commitments, title reports and title abstracts relating to the Parcels or any
portion thereof; (b) copies of any documents referred to in any such title
insurance policies, title commitments, title reports or title abstracts; (c)
copies of any deeds, easements, dedications or other conveyances or grants to or
from the Company, any Company Subsidiary or any other Person to whom the Company
or any Company Subsidiary has succeeded (by grant, by operation of law or
otherwise) in title to any real property; and (d) any ALTA/ACSM surveys,
boundary surveys or plats relating to the Parcels or any portion
thereof.
“Transaction
Documents” shall mean all documents delivered by any of the Company,
Purchaser or any Seller on the date hereof or in connection with the Closing
(including the Parent Guarantee, the Escrow Agreement and the
Joinder).
“Updated Title
Reports” shall mean the Commitments for Title Insurance issued by the
Title Agent and referenced in Section 4.17(a) of
the Sellers Disclosure Letter.
“Working Capital”
shall mean an amount equal to the sum of (a) current assets of the Company and
the Company Subsidiaries (calculated as the sum of (i) Accounts Receivables;
(ii) Inventories and (iii) other current assets (other than other than Cash and
Cash Equivalents)), (b) plus the $385,000 cash deposit held by the TVA, (c) plus
E&Y Audit Cash Payments, (d) minus current liabilities of the Company and
the Company Subsidiaries (calculated as the sum of (x) accounts payable and (y)
other current liabilities (other than liabilities (A) accrued for Employee
Incentive Bonuses or (B) related to item 4 on Section 4.12 of the Sellers
Disclosure Letter)), and (e) minus $500,000, in each applicable case, as
determined in accordance with the GAAP applied on a basis consistent with the
Financial Statements and the policies and principles set forth on Section 1.1(b) of the
Sellers Disclosure Letter.
“2008 Purchase
Agreement” shall mean the Purchase and Sale Agreement by and between the
seller thereunder and Project Metals Acquisition LLC dated as of February 13,
2008.
Section
1.2. Additional Defined
Terms.
In
addition to the terms defined in Section 1.1,
additional defined terms used herein shall have the respective meanings assigned
thereto in the Sections indicated on Annex A.
Section
1.3. Construction.
In this
Agreement, unless the context otherwise requires:
(a) references
in this Agreement to “writing” or comparable expressions include a reference to
facsimile transmission or comparable means of communication;
(b) the
phrases “delivered” or “made available”, when used in this Agreement, shall mean
that the information referred to has been physically or electronically delivered
to the relevant parties (including, in the case of “made available” to
Purchaser, material that has been posted, retained and thereby made available to
Purchaser through the on-line “virtual data room” established by the
Company);
(c) words
expressed in the singular number shall include the plural and vice versa; words
expressed in the masculine shall include the feminine and neuter gender and vice
versa;
(d) references
to Articles, Sections, Annexes, Sections of the Sellers Disclosure Letter, the
Preamble and Recitals are references to articles, sections, annexes, disclosure
schedules, the preamble and recitals of this Agreement, and the descriptive
headings of the several Articles and Sections of this Agreement are inserted for
convenience only, do not constitute a part of this Agreement and shall not
affect in any way the meaning or interpretation of this Agreement;
(e) references
to “day” or “days” are to calendar days;
(f) references
to “the date hereof” shall mean as of the date of this Agreement;
(g) the words
“hereof”, “herein”, “hereto” and “hereunder”, and words of similar import, when
used in this Agreement, shall refer to this Agreement as a whole and not to any
provision of this Agreement;
(h) this
“Agreement” or any other agreement or document shall be construed as a reference
to this Agreement or, as the case may be, such other agreement or document as
the same may have been, or may from time to time be, amended, varied, novated or
supplemented;
(i) “include”,
“includes” and “including” are deemed to be followed by “without limitation”
whether or not they are in fact followed by such words or words of similar
import; and
(j) references
to dollars or “$” are to United States of America dollars.
Section
1.4. Annexes and the Sellers
Disclosure Letter
The
annexes (the “Annexes”) and the
Sellers Disclosure Letter are incorporated into and form an integral part of
this Agreement.
Section
1.5. Knowledge
(a) When
any representation, warranty, covenant or agreement contained in this Agreement
is expressly qualified by reference to the “Knowledge of the
Company” or words of similar import, it shall mean, unless otherwise
noted herein, the current, actual knowledge of the individuals set forth in
Section 1.5(a)
of the Sellers Disclosure Letter, after such inquiry as such Persons would
normally conduct in the ordinary course of their duties to the Company or the
Ospraie Sellers, as applicable. Where any representation, warranty or
other provision in this Agreement refers to notice or written notice having been
delivered or received by Sellers, the Company or any of the Company
Subsidiaries, or any of their respective Affiliates, such representation,
warranty or other provision shall be interpreted to include only any notice to
the individuals listed in the immediately preceding sentence or any notice of
which one of such individuals has actual knowledge, without any implication that
any such Person has made any inquiry or investigation as to the sending or
receipt of such notice.
(b) When any
representation, warranty, covenant or agreement contained in this Agreement is
expressly qualified by reference to the “Knowledge of
Purchaser” or words of similar import, it shall mean the current, actual
knowledge of the individuals set forth in Section 1.5(b) of the
Sellers Disclosure Letter, after such inquiry as such Persons would normally
conduct in the ordinary course of their duties to Purchaser.
ARTICLE
II
SALE OF
UNITS
Section
2.1. Sale of Units
(a) On
the terms and subject to the conditions set forth in this Agreement, Sellers
shall sell, assign, transfer and deliver to Purchaser on the Closing Date good
title to the Units, free and clear of Liens (other than any Liens automatically
created by Purchaser at the Closing by virtue of existing Purchaser or Purchaser
Affiliate credit facilities) and Purchaser shall purchase from Sellers on the
Closing Date, the Units. Sellers shall take such action as is
reasonably necessary and legally required to reflect the sale, assignment,
transfer and delivery of the Units on the books and records of the Company and
to provide Purchaser with such evidence of the same as is legally required or as
Purchaser shall reasonably request.
(b) Purchaser
has delivered to Sellers’ Representative, in conjunction with its execution of
this Agreement, the Parent Guarantee, in favor of Sellers’ Representative, on
behalf of Sellers, of Purchaser’s obligations of payment and performance under
this Agreement.
Section
2.2. Purchase Price; Delivery of
Funds; Payment of Indebtedness and Company Transaction
Expenses
(a) At
least two (2) Business Days, but not more than seven (7) Business Days prior to
the Closing Date, Sellers shall cause the Company to prepare and deliver to
Purchaser, a statement (the “Estimated Closing
Statement”) setting forth (i) the Company’s estimate of the amount of the
Closing Indebtedness (the “Estimated Closing
Indebtedness”), (ii) the Company’s estimate of the amount of the Closing
Cash (the “Estimated
Closing Cash”), (iii) the Company’s estimate of the amount of the
Company Transaction Expenses, (iv) the Company’s estimate of the Working Capital
(the “Estimated
Working Capital”) and (v) the Company’s estimate of the amount, if any,
by which the Target Working Capital differs from the Estimated Working Capital
(the “Estimated
Working Capital Adjustment”), in each case, as of 11:59 pm on the
Business Day immediately prior to the Closing Date, which shall quantify in
reasonable detail the items constituting such Closing Indebtedness, such Closing
Cash, such Company Transaction Expenses, and such Estimated Working Capital, and
in each case calculated in accordance with the terms of this
Agreement. The Estimated Closing Statement shall be prepared in
accordance with GAAP applied on a basis consistent with the Financial Statements
and the policies and principles set forth on Section 1.1(b) of the
Sellers Disclosure Letter. Any portion of Closing Indebtedness that
is secured by a Lien shall be, for purposes of calculating Estimated Closing
Indebtedness as required above, the amount set forth in the applicable payoff
letter to be delivered for such Indebtedness pursuant to Section 2.4(b)
below.
(b) At the
Closing, Purchaser shall pay to Sellers’ Representative, on behalf of Sellers,
in full consideration for the purchase by Purchaser of free and clear title to
the Units (other than any Liens automatically created by Purchaser at the
Closing by virtue of existing Purchaser or Purchaser Affiliate credit
facilities), the Initial Purchase Price, by wire transfer of immediately
available funds to the account of Sellers’ Representative, such account to be
notified by Sellers’ Representative in writing to Purchaser at least three (3)
Business Days prior to the Closing Date. Sellers’ Representative
shall (i) disburse the Net Proceeds in accordance with Section 2.2(b) of the
Sellers Disclosure Letter, which schedule shall include payments to CMG (the
“EOIP Payment”)
so that CMG will, on behalf of the Company, satisfy the Company’s obligations
under the EOIP (the “EOIP Holders”) and
(ii) disburse the portion of the Net Proceeds allocated to each Seller by means
of a wire transfer of immediately available funds to an account designated by
such Seller to Sellers’ Representative prior to, on, or after the
Closing. The portion of the Net Proceeds allocated to each EOIP
Holder and paid to CMG, for the benefit of the EOIP Holders, by Sellers’
Representative shall be paid to the account of such EOIP Holder, at least two
(2) Business Days, but not more than seven (7) Business Days after CMG’s receipt
of the EOIP Payment, by means of a wire transfer of immediately available funds,
subject to Section
2.2(g).
(c) Subject
to Sellers’ delivery of the payoff letters as required below, at the Closing,
Purchaser shall pay to the holders of the Closing Indebtedness (or, if Purchaser
so elects with respect to any Closing Indebtedness secured by a recorded Lien,
to the Title Agent) an amount sufficient to repay all such Indebtedness, with
the result that immediately following the Closing there will be no further
monetary obligations of the Company or any of the Company Subsidiaries with
respect to any Closing Indebtedness outstanding immediately prior to the
Closing.
(d) At the
Closing, Purchaser shall pay all Company Transaction Expenses as set forth in
the Estimated Closing Statement, in each case by wire transfer of immediately
available funds pursuant to written instructions provided to Purchaser by
Sellers’ Representative concurrently with the delivery of the Estimated Closing
Statement.
(e) At the
Closing, Purchaser shall establish and deposit $1,350,000 (the “Purchase Price Escrow
Amount”) into an escrow account (the “Purchase Price Escrow
Account”) to provide a partial source for payment of any amounts that
become due and payable to Purchaser from Sellers pursuant to Section 2.3 with the
Escrow Agent to serve in accordance with the Escrow Agreement to be executed at
the Closing.
(f) Notwithstanding
anything herein to the contrary, and notwithstanding provisions in this
Agreement that facilitate Sellers’ Representative’s payment of Sellers’
obligations to the following, Purchaser shall not be responsible for any
liability under the EOIP, the Project Everest Success Fee Plan, or the Company’s
Performance Award Plan.
(g) Notwithstanding
any provision hereof to the contrary, the Company and/or one or more of the
Company Subsidiaries shall deduct and withhold from any consideration otherwise
payable to each EOIP Holder under the terms of this Agreement through its normal
payroll procedures, such amounts as it is required to deduct and withhold
pursuant to any provision of Law related to or regarding Taxes. To
the extent that amounts are so withheld by the Company and/or any of the Company
Subsidiaries under any provision of this Agreement, such withheld amounts shall
be remitted by the Company and/or any of the Company Subsidiaries to the
applicable Governmental Entity in accordance with applicable Law.
Section
2.3. Determination of Purchase
Price Adjustment
(a) Promptly
after the Closing Date, and in any event not later than thirty (30) days
following the Closing Date, Purchaser shall cause the Company to prepare and
deliver to Sellers’ Representative, in each case, as of 11:59 pm on the Business
Day immediately prior to the Closing Date, (i) an unaudited consolidated balance
sheet of the Company (the “Closing Balance
Sheet”), and (ii) a statement (the “Closing Statement”)
setting forth Purchaser’s good faith calculations (the “Purchaser’s Proposed
Calculations”) of (A) the amount of the Closing Indebtedness, (B) the
amount of any Company Transaction Expenses not otherwise paid by the Company
prior to the Closing Date, deducted from the Initial Purchase Price or included
in the calculation of the Closing Working Capital, (C) the amount of the Closing
Cash, (D) the Working Capital of the Company (the “Closing Working
Capital”), (E) the amount, if any, by which the Target Working Capital
differs from the Closing Working Capital (the “Working Capital
Adjustment”) and (F) a recalculation of the Initial Purchase Price based
on such amounts and the provisions of this Section
2.3(a). Purchaser’s Proposed Calculations shall be made in
accordance with GAAP applied on a basis consistent with the Financial Statements
and the policies and principles set forth in Section 1.1(b) of the
Sellers Disclosure Letter and in the same manner and in accordance with the same
principles utilized in Section 2.2(a); in
the event of any conflict between such principles and GAAP the principles set
forth in Section
1.1(b) of the Sellers Disclosure Letter and the principles and procedures
utilized in Section
2.2(a) shall control. Upon delivery of the Closing Balance
Sheet and Purchaser’s Proposed Calculations by Purchaser, Purchaser shall cause
the Company to provide Sellers’ Representative and its Representatives with
reasonable access to the Company’s auditors and accounting and other personnel
and to the books and records of the Company, as the case may be, and any other
document or information reasonably requested by Sellers’ Representative, in
order to allow Sellers’ Representative to determine if Sellers’ Representative
agrees with the determination by Purchaser of Purchaser’s Proposed
Calculations.
(b) In the
event that Sellers’ Representative does not object to the Closing Balance Sheet
or Purchaser’s Proposed Calculations by written notice of objection (the “Notice of Objection”)
delivered to Purchaser within thirty (30) days after Sellers’ receipt of the
Closing Balance Sheet and Purchaser’s Proposed Calculations, the recalculation
of the Initial Purchase Price pursuant to Purchaser’s Proposed Calculations
shall be deemed final and binding. A Notice of Objection under this Section 2.3(b) shall
set forth in reasonable detail Sellers’ Representative’s alternative
calculations of (i) the amount of the Closing Indebtedness, (ii) the amount of
any Company Transaction Expenses not otherwise paid by the Company on or prior
to the Closing Date, deducted from the Initial Purchase Price or included in
Purchaser’s Proposed Calculations, (iii) the amount of the Closing Cash, (iv)
the Closing Working Capital and the Working Capital Adjustment calculated by
reference thereto and (v) a recalculation of the Initial Purchase Price based on
such amounts.
(c) If
Sellers’ Representative delivers a Notice of Objection to Purchaser within the
thirty (30) day period referred to in Section 2.3(b), then
(i) any amount of the adjustment to the Initial Purchase Price (or other
amount subject hereto) that is not in dispute on the date such Notice of
Objection is given shall be treated as final and binding and (ii) any dispute
(all such disputed amounts, the “Disputed Amounts”)
shall be resolved as follows:
(i) Sellers’
Representative and Purchaser shall promptly endeavor in good faith to resolve
the Disputed Amounts listed in the Notice of Objection. In the event that a
written agreement determining the Disputed Amounts has not been reached within
twenty (20) Business Days (or such longer period as may be agreed by Sellers’
Representative and Purchaser) after the date of receipt by Purchaser from
Sellers’ Representative of the Notice of Objection, the resolution of such
Disputed Amounts shall be submitted to Deloitte & Touche LLP (the “Arbitrator”);
(ii) Sellers’
Representative and Purchaser shall use their commercially reasonable efforts to
cause the Arbitrator to render a decision in accordance with this Section 2.3(c) along
with a statement of reasons therefor within thirty (30) days of the submission
of the Disputed Amounts, or a reasonable time thereafter, to the Arbitrator. The
decision of the Arbitrator shall be final and binding upon each party hereto and
the decision of the Arbitrator shall constitute an arbitral award that is final,
binding and non-appealable and upon which a judgment may be entered by a court
having jurisdiction thereover;
(iii) in the
event Sellers’ Representative and Purchaser submit any Disputed Amounts to the
Arbitrator for resolution, Sellers and Purchaser shall each pay their own costs
and expenses incurred under this Section
2.3(c). Sellers shall be responsible for that fraction of the
fees and costs of the Arbitrator equal to (1) the absolute value of the
difference between Sellers’ aggregate position with respect to the Disputed
Amounts and the Arbitrator’s final determination with respect to the Disputed
Amounts over (2) the absolute value of the difference between Sellers’ aggregate
position with respect to the Disputed Amounts and Purchaser’s aggregate position
with respect to the Disputed Amounts, and Purchaser shall be responsible for the
remainder of such fees and costs; and
(iv) the
Arbitrator shall act as an arbitrator to determine, based upon the provisions of
this Section
2.3(c), only the Disputed Amounts and the determination of each amount of
the Disputed Amounts shall be made in accordance with the procedures set forth
in Section
2.2(a) and, in any event shall be no less than the lesser of the amount
claimed by either Sellers’ Representative or Purchaser, and shall be no greater
than the greater of the amount claimed by either Sellers’ Representative or
Purchaser.
(d) Upon the
determination, in accordance with Section 2.3(b) or
Section 2.3(c),
of the final calculations of the amounts of the Closing Indebtedness, the
Company Transaction Expenses not otherwise paid by the Company prior to the
Closing Date, deducted from the Initial Purchase Price or included in
Purchaser’s Proposed Calculation of the Closing Working Capital, the Closing
Cash, the Closing Working Capital and the Working Capital Adjustment calculated
by reference thereto and in accordance with Section 2.3(a), the
Initial Purchase Price shall be recalculated using such finally determined
amounts in lieu of the amounts used in the Closing Statement. The
term “Final Purchase
Price” means the result of such recalculation of the Initial Purchase
Price, and, for the avoidance of doubt, shall not include the Purchase Price
Escrow Amount. If the Final Purchase Price is greater than the
Initial Purchase Price, then Purchaser shall be obligated to (i) pay to Sellers’
Representative, on behalf of Sellers, such deficiency at least two (2) Business
Days, but not more than seven (7) Business Days, after the determination of the
Final Purchase Price and (ii) take all actions required pursuant to Section 2.2(g) to
disburse to Sellers and the EOIP Holders the Purchase Price Escrow
Amount. If the Final Purchase Price is less than the Initial Purchase
Price, then Sellers’ Representative, on behalf of Sellers, shall be obligated to
pay to Purchaser such deficiency at least two (2) Business Days, but not more
than seven (7) Business Days, after the determination of the Final Purchase
Price. The amount payable by Sellers’ Representative, on behalf of
Sellers, or Purchaser pursuant to this Section 2.3(d) is
referred to herein as the “Purchase Price
Adjustment” and shall be treated as such for Federal, state, local and
foreign income tax purposes.
(e) If the
Final Purchase Price is greater than the Initial Purchase Price, the Purchaser
shall, at least two (2) Business Days, but not more than seven (7) Business
Days, after the determination of the Final Purchase Price, (i) pay by wire
transfer of immediately available funds, to the account of Sellers’
Representative an amount in cash (the “Final Unit Payment”)
equal to the Seller Aggregate Percentage multiplied by the Purchase Price
Adjustment and (ii) cause the Company to pay by wire transfer of immediately
available funds to the account of each EOIP Holder an amount in cash equal to
such EOIP Holder’s Pro Rata Portion of the Purchase Price Adjustment, subject to
Section 2.2(g),
and such payments shall fully satisfy Purchaser’s obligation to pay the Contract
Purchase Price. In addition, Sellers’ Representative and Purchaser shall, at
least two (2) Business Days, but not more than seven (7) Business Days, after
the determination of the Final Purchase Price, issue joint written instructions
to the Escrow Agent instructing the Escrow Agent to remit by wire transfer of
immediately available funds within three (3) Business Days after receipt of such
joint written instruction (x) to the account of each Seller, such Seller’s Pro
Rata Portion of the Purchase Price Escrow Amount and (y) to the Company, the
Purchase Price Escrow Amount multiplied by the
EOIP Holder Aggregate Percentage. The Company shall, at least two (2) Business
Days, but not more than seven (7) Business Days, after receiving the portion of
the Purchase Price Escrow Amount determined pursuant to clause (y) of the
immediately preceding sentence, deposit, or cause one or more of the Company
Subsidiaries to deposit, to the account of each EOIP Holder the amount of such
EOIP Holder’s Pro Rata Portion of the Purchase Price Escrow Amount, subject to
Section
2.2(g).
(f) If the
Final Purchase Price is less than the Initial Purchase Price: (i) Sellers’
Representative and Purchaser shall, at least two (2) Business Days, but not more
than seven (7) Business Days, following the determination of the Purchase Price
Adjustment pursuant to Section 2.3(d), issue
joint written instructions to the Escrow Agent instructing the Escrow Agent to
remit to Purchaser, by wire transfer of immediately available funds within three
(3) Business Days after receipt of such joint written instruction, to the
account of Purchaser, all or part of the Purchase Price Adjustment up to a
maximum amount equal to the Purchase Price Escrow Amount; (ii) if the Purchase
Price Adjustment is greater than the Purchase Price Escrow Amount (such
difference being referred to as the “Excess Purchase Price
Adjustment”), each Seller and EOIP Holder shall, at least two (2)
Business Days, but not more than seven (7) Business Days, following the
determination of the Purchase Price Adjustment pursuant to Section 2.3(d), pay
(without interest), by wire transfer of immediately available funds to the
account of Purchaser, its Pro Rata Portion of the Excess Purchase Price
Adjustment; and (iii) if the Purchase Price Adjustment is less than the Purchase
Price Escrow Amount (such difference being referred to as the “Remaining Escrow
Amount”), Sellers’ Representative and Purchaser shall, at least two (2)
Business Days, but not more than seven (7) Business Days, following the
determination of the Purchase Price Adjustment pursuant to Section 2.3(d), issue
joint written instructions to the Escrow Agent instructing the Escrow Agent to
remit by wire transfer of immediately available funds within three (3) Business
Days after receipt of such joint written instruction, (x) to the account of each
Seller, such Seller’s Pro Rata Portion of the Remaining Escrow Amount and (y) to
the Company, the Remaining Escrow Amount multiplied by the
EOIP Aggregate Percentage, which shall in turn distribute, or cause one or more
of the Company Subsidiaries to distribute, subject to Section 2.2(g), to
each EOIP Holder an amount in cash equal to such EOIP Holder’s Pro Rata Portion
of the Remaining Escrow Amount. Each Seller’s and EOIP Holder’s
liability with respect to obligations under this Section 2.3(f) shall
be several and not joint; provided, that the
Ospraie Sellers obligations hereunder shall be joint and several among such
Ospraie Sellers.
(g) Purchaser
shall cause CMG to accept, on behalf of the EOIP Holders, the EOIP Holdback
Payment, if any, from Sellers’ Representative. Promptly upon CMG’s
receipt of the EOIP Holdback Payment, if any, Purchaser shall cause the Company
to distribute, or cause one or more of the Company Subsidiaries to distribute,
subject to Section
2.2(g), to each EOIP Holder an amount in cash equal to such EOIP Holder’s
Pro Rata Portion of the EOIP Holdback Payment.
Section
2.4. Closing; Closing
Deliverables
(a) Unless
this Agreement shall have been terminated and the transactions contemplated
hereby shall have been abandoned pursuant to Article VIII, and
subject to the satisfaction or waiver of all of the conditions set forth in
Article VII,
the sale referred to in Section 2.1 (the
“Closing”)
shall take place on April 1, 2010 at 10:00 A.M. at the offices of White &
Case LLP, 1155 Avenue of the Americas, New York, New York, 10036-2787, or as
soon as practicable but in any event, within three (3) Business Days after the
last of the conditions set forth in Article VII is
satisfied or waived in writing by the party entitled to waive the same (other
than those conditions that by their nature are to be satisfied at the Closing,
but subject to the fulfillment or waiver of those conditions), or at such other
time, date or place as Purchaser and Sellers’ Representative shall agree in
writing. Such date is herein referred to as the “Closing
Date”. It being understood that Sellers’ Representative shall
have the authority to waive on behalf of Sellers or any Seller any delivery
required at or before the Closing by Purchaser hereunder or any other condition
to Sellers’ obligations under this Agreement.
(b) At or
prior to the Closing, Sellers’ Representative shall deliver or cause to be
delivered to Purchaser (i) a certificate signed by an authorized officer of
Sellers’ Representative, on behalf of Sellers, dated as of the Closing Date, to
the effect that the conditions set forth in Section 7.2(a), Section 7.2(b), Section 7.2(c), Section 7.2(d) and
Section 7.2(e)
have been satisfied, (ii) evidence of termination of the Ospraie Management
Agreement, (iii) payoff letters from the holders of Closing Indebtedness, which
letters include the agreement by the holders of such Closing Indebtedness to
release all related Liens and to terminate all agreements and other security
interests relating to Closing Indebtedness, subject only to payment to such
holders of the payoff amount stated in such payoff letters, (iv) certificates of
existence and good standing (or similar certificates) of the Company and the
Company Subsidiaries issued by the Secretary of State or other appropriate
official of the state or jurisdiction of each such entity’s organization or
formation dated as of a date not earlier than ten (10) days before the Closing
Date; (v) certificates of good standing and of foreign qualification, admission
to do business or registration as a foreign entity (or equivalent certificates)
for the Company and for each Company Subsidiary, from every other state or
jurisdiction in which the Company represents that such entity is qualified or
licensed to do business and in good standing in Section 4.1(a) and
Section 4.1(b),
as applicable, dated as of a date not earlier than ten (10) days before the
Closing Date; (vi) an executed signature page to the Escrow Agreement, as
executed by Sellers’ Representative; and (vii) the certificates described
in Section
7.2(f); (viii) any other documents and deliveries required to be
delivered by Sellers or Sellers’ Representative at or prior to Closing pursuant
to this Agreement; (ix) an original unit power in the form of Annex E executed by
each Seller; (x) an executed Sellers’ Representative Agreement executed by
Sellers’ Representative and each Seller; (xi) the resignation letters
described in Section
6.13; and (xii) an executed signature page to the Payment Side Letter
executed by Sellers’ Representative.
(c) At the
Closing, Purchaser shall deliver or cause to be delivered to Sellers’
Representative (i) the Initial Purchase Price and (ii) a certificate signed by
an authorized officer of Purchaser, dated as of the Closing Date, to the effect
that the conditions set forth in Section 7.3(a) and
Section 7.3(b)
have been satisfied, (iii) the Joinder, duly executed by an authorized officer
of each of the Company and the Company Subsidiaries, (iv) any other documents or
deliveries required to be delivered by Purchaser at or prior to the Closing
pursuant to this Agreement; (v) an executed signature page to the Escrow
Agreement, as executed by Purchaser; and (vi) an executed signature page to the
Payment Side Letter executed by Purchaser.
ARTICLE
III
REPRESENTATIONS AND
WARRANTIES OF SELLERS
Except as
set forth in the disclosure letter (the “Sellers Disclosure
Letter”) delivered by Sellers’ Representative to Purchaser concurrently
with the execution of this Agreement, each Seller hereby represents and warrants
to Purchaser as follows (with the understanding and agreement that (i) no Seller
(other than the Ospraie Sellers) makes any representation or warranty in this
Article III
with respect to any other Seller and (ii) the representations and warranties of
the Ospraie Sellers are being made jointly and severally):
Section
3.1. Due Organization, Good
Standing and Corporate Power of Sellers
If Seller
is not a natural person, such Seller is a corporation, limited liability company
or partnership, duly incorporated, organized or formed, validly existing and in
good standing (or the equivalent thereof) under the Laws of the state of its
incorporation, organization or formation and has all requisite power (corporate
or otherwise) and authority to own, lease and operate its properties and to
carry on its Business as now being conducted.
Section
3.2. Authorization;
Noncontravention
Each such
Seller has the requisite power (corporate or otherwise), legal right, capacity
and authority and has taken all actions (corporate or otherwise) necessary to
execute and deliver this Agreement, and the Transaction Documents to which it is
a party, to perform its obligations hereunder and thereunder and to consummate
the transactions contemplated hereby and thereby. The execution,
delivery and performance of this Agreement by such Seller, and the consummation
by it of the transactions contemplated hereby, have been duly authorized and
approved (by corporate action or otherwise to the extent such Seller is not a
natural person) by such Seller. No other corporate action on the part
of such Seller is necessary to authorize the execution, delivery and performance
of this Agreement by such Seller and the consummation of the transactions
contemplated hereby. This Agreement has been duly executed and
delivered by such Seller and, assuming that this Agreement constitutes a valid
and binding obligation of the other parties hereto, constitutes a valid and
binding obligation of such Seller enforceable against such Seller in accordance
with its terms, except to the extent that its enforceability may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors’ rights generally and by general
equitable principles. The execution and delivery of this Agreement do not, and
the consummation of the transactions contemplated by this Agreement will not,
(a) if such Seller is not a natural person, conflict with any of the provisions
of the certificate of incorporation or by-laws or other equivalent charter
documents, as applicable, of such Seller, in each case, as amended to the date
of this Agreement, (b) subject to the consents, approvals, authorizations,
declarations, filings and notices referred to in Section 4.4, conflict
with or result in a breach of, or default under, any Contract to which such
Seller is a party (with or without notice or lapse of time, or both) or (c)
subject to the consents, approvals, authorizations, declarations, filings and
notices referred to in Section 4.4,
contravene any domestic or foreign Law, Permit or Order currently in effect,
which, in the case of clauses (b) and (c) above, would be reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect or as would
not materially impair the ability of such Seller to consummate the transactions
contemplated by this Agreement.
Section 3.3. Ownership of
Units
Such
Seller is the beneficial and record owner and has good and valid title to all of
the Units set forth opposite such Seller’s name on Section 4.3(a) of the
Sellers Disclosure Letter free and clear of all Liens, other than any Liens
arising under the Company LLC Agreement. Upon payment for such Units
at Closing as provided in this Agreement, such Seller will convey to Purchaser
good and valid title to all of such Seller’s Units, free and clear of all Liens,
other than those created by Purchaser or arising out of ownership of the Units
by Purchaser and other than restrictions on transfer of unregistered securities
arising under applicable federal, state or foreign securities Laws.
Section
3.4. Solvency
Such
Seller is not entering the transactions contemplated hereby with actual intent
to hinder, delay or defraud either present or future
creditors. Immediately after giving effect to the transactions
contemplated hereby, such Seller will be Solvent. Immediately after
giving effect to the transactions contemplated by this Agreement, such Seller,
to the extent it is not a natural person, will have adequate capital to carry on
its business.
Section
3.5. Exclusivity of
Representations
The
representations and warranties made by each Seller in this Article III are the
exclusive representations and warranties made by such Seller. Such
Seller hereby disclaims any other express or implied representations or
warranties with respect to itself.
ARTICLE
IV
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
Except as
set forth in the Sellers Disclosure Letter, the Company hereby represents and
warrants to Purchaser as follows:
Section 4.1. Company, Company
Subsidiaries and Mexico Subsidiaries
(a) The
Company is a limited liability company duly organized, validly existing and in
good standing under the Laws of the State of Delaware and has all requisite
power and authority to own, lease and operate its properties and to carry on the
Business as now being conducted, except where the failure to have such power and
authority would not be reasonably likely to have a Material Adverse
Effect. The Company is duly qualified or licensed to do business and
is in good standing in each jurisdiction in which the character or location of
the properties owned, leased or operated by the Company or the nature of the
business conducted by the Company makes such qualification necessary, except for
such jurisdictions where the failure to be so qualified or licensed and in good
standing would not be reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect. Section 4.1(a) of the
Sellers Disclosure Letter lists such jurisdictions.
(b) Section 4.1(b) of the
Sellers Disclosure Letter lists each Subsidiary of the Company (each, a “Company
Subsidiary”). Each Company Subsidiary and, to the Knowledge of
the Company, each Mexico Subsidiary is a legal entity duly organized, validly
existing and in good standing under the Laws of the jurisdiction of its
incorporation or organization and each Company Subsidiary and, to the Knowledge
of the Company, each Mexico Subsidiary has all requisite power and authority to
own, lease and operate its properties and to carry on its Business as now being
conducted, except where the failure to have such power and authority would not
be reasonably likely to have a Material Adverse Effect. Each Company
Subsidiary and, to the Knowledge of the Company, Mexico Subsidiary that owns a
Parcel is duly qualified or licensed to do business and is in good standing in
the jurisdiction in which such Parcel is located. Each Company
Subsidiary and, to the Knowledge of the Company, each Mexico Subsidiary is also
duly qualified or licensed to do business and is in good standing in each
jurisdiction in which the character or location of the properties owned, leased
or operated by such Company Subsidiary or Mexico Subsidiary or the nature of the
business conducted by such Company Subsidiary or Mexico Subsidiary makes such
qualification necessary, except in such jurisdictions where the failure to be so
qualified or licensed and in good standing would not be reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect.
(c) There are
no restrictions of any kind which prevent or restrict the payment of dividends
or other distributions by any of the Company Subsidiaries or, to the Knowledge
of the Company, the Mexico Subsidiaries other than those imposed by the Laws of
general applicability of their respective jurisdictions of formation or
organization.
Section
4.2. Authorization;
Noncontravention
The
Company has the requisite power and authority and has taken all actions
necessary to execute and deliver this Agreement, and the Transaction Documents
to which it is a party, to perform its obligations hereunder and thereunder and
to consummate the transactions contemplated hereby. The execution,
delivery and performance of this Agreement by the Company, and the consummation
by it of the transactions contemplated hereby and thereby, have been duly
authorized and approved by the board of managers of the Company. No
other action on the part of the Company is necessary to authorize the execution,
delivery and performance of this Agreement by the Company and the consummation
of the transactions contemplated hereby. This Agreement has been duly
executed and delivered by the Company and, assuming that this Agreement
constitutes a valid and binding obligation of the other parties hereto,
constitutes a valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except to the extent that its
enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles. The
execution and delivery of this Agreement do not, and the consummation of the
transactions contemplated by this Agreement will not, (a) conflict with any of
the provisions of the certificate of incorporation or by-laws or other
equivalent charter documents, as applicable, of the Company, any Company
Subsidiary or, to the Knowledge of the Company, any Mexico Subsidiary, in each
case, as amended to the date of this Agreement, (b) subject to the consents,
approvals, authorizations, declarations, filings and notices referred to in
Section 4.4,
conflict with or result in a breach of, or default under, or allow any Person to
exercise default remedies or other negative or adverse rights under, any
Material Contract (with or without notice or lapse of time, or both) or (c)
subject to the consents, approvals, authorizations, declarations, filings and
notices referred to in Section 4.4,
contravene any domestic or foreign Law, Permit or Order currently in effect,
which, in the case of clauses (b) and (c) above, would be reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect.
Section 4.3. Capitalization
(a) The
Company has six (6) authorized classes of units of limited liability company
interests, designated as Class A-1 Common Units, Class A-2 Common Units, Class
A-3 Common Units, Class B-1 Common Units, Class B-2 Common Units and Class B-3
Common Units and such units are owned of record by Sellers in the respective
amounts set forth in Section 4.3(a) of the
Sellers Disclosure Letter. The Units have been duly authorized and
validly issued and are fully paid and nonassessable, and are not subject to any
preemptive rights. Except for the Units and as set forth on Section 4.3(a) of the
Sellers Disclosure Letter, no membership interests or other equity interests of
the Company are issued, reserved for issuance or outstanding. The
Company is not a party to any outstanding option, warrant, call, subscription or
other right (including any preemptive right), agreement or commitment which
obligates any of them to issue, sell or transfer, or repurchase, redeem or
otherwise acquire, any Units or other equity interest in the Company or any
Company Subsidiary. The Company does not have any authorized or
outstanding bonds, debentures, notes or other Indebtedness, the holders of which
have the right to vote (or convertible into, exchangeable for, or evidencing the
right to subscribe for or acquire securities having the right to vote) with
respect to the Company on any matter. Except as set forth in the
Company LLC Agreement, there are no irrevocable proxies and no voting agreements
with respect to any membership interests of or other equity or voting interest
in the Company.
(b) Each
Company Subsidiary has the capitalization set forth in Section 4.3(b) of the
Sellers Disclosure Letter. All issued and outstanding shares of
capital stock or other equity interests of each Company Subsidiary have been
duly authorized and validly issued in accordance with applicable Laws, including
compliance with securities laws, and are fully paid and nonassessable, and are
not subject to any preemptive rights. No other shares of capital
stock or other equity interests of any Company Subsidiary are issued, reserved
for issuance or outstanding. The Company Subsidiaries are not party
to any outstanding option, warrant, call, subscription or other right (including
any preemptive right), agreement or commitment which obligates any of them to
issue, sell or transfer, or repurchase, redeem or otherwise acquire, any shares
of the capital stock or other equity interest in the Company or any Company
Subsidiary. None of the Company Subsidiaries have any authorized or
outstanding bonds, debentures, notes or other Indebtedness, the holders of which
have the right to vote (or convertible into, exchangeable for, or evidencing the
right to subscribe for or acquire securities having the right to vote) with
respect to such Company Subsidiary on any matter. There are no
irrevocable proxies and no voting agreements with respect to any membership
interests of or other equity or voting interest in the Company
Subsidiaries.
(c) The
Company owns, beneficially and of record, 49% of all outstanding shares of
Fluorita de Mexico, S.A. de C.V., a Mexico corporation (“FDM”) and 1.63% of
all outstanding shares of Rancho Coahuila, S.A. de C.V., a Mexico corporation
(“RC”, and
collectively with FDM, the “Mexico Subsidiaries”)
(such shares, collectively, the “Mexico
Interests”). The Mexico Interests have been duly authorized
and validly issued and are fully paid and nonassessable and are not subject to,
nor were they issued in violation of, any preemptive rights, and are evidenced
by membership certificates. To the Knowledge of the Company, the
Mexico Subsidiaries are not party to any outstanding option, warrant, call,
subscription or other right (including any preemptive right), agreement or
commitment which obligates any of them to issue, sell or transfer, or
repurchase, redeem or otherwise acquire, any shares of the capital stock or
other equity interest in any Mexico Subsidiary. To the Knowledge of
the Company, none of the Mexico Subsidiaries have any authorized or outstanding
bonds, debentures, notes or other Indebtedness the holders of which have the
right to vote (or convertible into, exchangeable for, or evidencing the right to
subscribe for or acquire securities having the right to vote) with respect to
such Mexico Subsidiary on any matter. There are no irrevocable
proxies and no voting agreements to which the Company is a party or by which it
is bound with respect to any of its membership interests of, or other equity or
voting interest in, the Mexico Subsidiaries.
(d) The
Company has made available to Purchaser (i) true and complete copies of the
certificates of incorporation or formation (including all the amendments
thereto), the by-laws as amended and currently in force, certificates and
records and corporate minute books and records of the Company and each Company
Subsidiary, and (ii) to the Knowledge of the Company, the current governing or
organizational documents (including amendments thereto) for each Mexico
Subsidiary.
(e) Except as
otherwise set forth above, neither the Company nor any Company Subsidiary or, to
the Knowledge of the Company, any Mexico Subsidiary, owns, directly or
indirectly, any membership interests, shares of capital stock of any class of,
or other ownership interest in, any Person or any securities or interest
convertible into or evidencing the right to purchase any such shares or
ownership interest.
Section
4.4. Consents and
Approvals
No consent of or
filing with any Governmental Entity or any other third party, which has not been
received or made, is necessary or required with respect to the Company and/or
Company Subsidiaries in connection with the execution and delivery of this
Agreement by the Company or the consummation by the Company of the transactions
contemplated by this Agreement, except for (a) the consents or filings set forth
in Section 4.4
of the Sellers Disclosure Letter and (b) any other consents or filings which, if
not made or obtained, would not be reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect.
Section
4.5. Financial
Statements
(a) The
Company has furnished Purchaser with (i) the audited consolidated balance sheet
of Core Metals Group, LLC (“CMG”) and its
Subsidiaries (excluding, for the avoidance of doubt, the Mexico Subsidiaries) as
of December 31, 2008, and the related audited consolidated statements of
operations, members’ equity and cash flows for the income statement period ended
December 31, 2008, all certified by the CMG’s accountants (the financial
statements referred to above, including the footnotes thereto, collectively, the
“Audited Financial
Statements”), (ii) the unaudited consolidating balance sheet of CMG and
its Subsidiaries (excluding, for the avoidance of doubt, the Mexico
Subsidiaries) as of December 31, 2009 (the “Balance Sheet Date”),
and the related unaudited consolidated statements of income and cash flows for
the fiscal year ended December 31, 2009 (collectively, the “Interim Financial
Statements”, and together with the Audited Financial Statements, the
“Financial
Statements”), and (iii) the audited balance sheet of FDM as of December
31, 2008, and the related audited statements of income, changes in stockholders’
equity, cash flows and changes in financial position for FDM for the fiscal year
ended December 31, 2008 (collectively, the “FDM Financial
Statements”). The Financial Statements, including the
footnotes thereto, have been prepared in accordance with GAAP except as
otherwise described therein or on Section 4.5(a) of the
Sellers Disclosure Letter and in case of the Interim Financial Statements
subject to normal year end adjustments and the absence of disclosures normally
made in footnotes. To the Knowledge of the Company, without inquiry,
the FDM Financial Statements have been prepared in accordance with Mexican
GAAP.
(b) The
balance sheets of CMG referred to in Section 4.5 fairly
present, in all material respects, the financial position of CMG and its
Subsidiaries as of the dates thereof, respectively, and the related statements
of operations, members’ equity and cash flows fairly present, in all material
respects, the results of operations, members’ equity and cash flows of CMG and
its Subsidiaries for the periods indicated, respectively. To the
Knowledge of the Company, without inquiry, the FDM Financial Statements fairly
present, in all material respects, the financial position of FDM as of the date
thereof, and the related statements of income, operations, cash flows and
changes in financial position for FDM for the periods indicated.
Section
4.6. Absence of Certain
Changes
Except as
set forth on Section
4.6 of the Sellers Disclosure Letter, during the period from the Balance
Sheet Date to the date of this Agreement the Business has been conducted in all
material respects in the Ordinary Course of Business and neither the Company nor
any of the Company Subsidiaries has (a) materially increased the
compensation of any officer or granted any general salary or benefits increase
to their respective employees, other than in the Ordinary Course of Business,
(b) acquired any business or Person, by merger or consolidation, purchase
of substantial assets or equity interests, or by any other manner, in a single
transaction or a series of related transactions, or entered into any Contract,
letter of intent or similar arrangement with respect to the foregoing, (c) made
a material change in accounting principles, practices or methods except as
required or permitted by Law or GAAP, (d) sold, assigned, pledged, hypothecated
or otherwise transferred or subjected to a Lien, any of the Assets, other than
such sales, assignments, pledges, hypothecations or other transfers in the
Ordinary Course of Business which individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect, (e) suffered any
damage, destruction or other casualty loss (not covered by insurance) which
individually or in the aggregate would reasonably be expected to have a Material
Adverse Effect;); (f) materially increased the level of benefits under any
employee benefit plan, payment or arrangement for any employee; (g) sold,
transferred, licensed or otherwise conveyed or disposed of any Intellectual
Property; (h) been subject to the acceleration, material modification,
termination or cancellation of any material Contract to which the Company or any
Company Subsidiary is a party or by which any of them is bound; (i) made
any material capital expenditure outside the Ordinary Course of Business;
(j) made any material capital investment in, or any material loan to, any
other Person outside of the Ordinary Course of Business; (k) created,
incurred, assumed or guaranteed more than $100,000 in aggregate Indebtedness,
other than short-term Indebtedness or letters of credit incurred in the Ordinary
Course of Business or borrowings under existing credit facilities set forth in
Section 4.15 of
the Sellers Disclosure Letter, or make any loans or advances to any other
Person, other than loans and advances to employees consistent with past
practice; (l) made any change in or amendment to the Company or any Company
Subsidiary certificate of incorporation or by-laws or other equivalent charter
documents; (m) issued or sold, or authorized to issue or sell, any shares
of its capital stock or any other ownership interests, as applicable, or issue
or sell, or authorize to issue or sell, any securities convertible into or
exchangeable for, or options, warrants or rights to purchase or subscribe for,
or enter into any Contract with respect to the issuance or sale of, any shares
of its capital stock or any other ownership interests, as applicable; or
(n) entered into an agreement to do any of the foregoing.
Section
4.7. Compliance with
Laws
As of the
date hereof, neither the Business nor the operations of the Company and the
Company Subsidiaries has been and is being conducted in violation of any Law,
Permit or Order applicable to the Business, the Company or the Company
Subsidiaries, except for violations that would not be reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect, and neither the
Company nor any of the Company Subsidiaries has received any written notice that
any violation of the foregoing is being or may be
alleged. Notwithstanding the foregoing, the representations and
warranties contained in this Section 4.7 do not
apply to benefit plans and related matters, labor matters, taxes, intellectual
property and environmental laws and environmental matters, which subject matters
are addressed in their entirety and exclusively in Section 4.10, Section 4.11, Section 4.12, Section 4.13 and
Section 4.16,
respectively.
Section
4.8. Permits
As of the
date hereof, the Company and the Company Subsidiaries hold all federal, state,
provincial, territorial, municipal, local and foreign permits, approvals,
licenses, authorizations, certificates, rights, exemptions and orders from
Governmental Entities that are necessary for the operation of the Business as
presently conducted, or that are necessary for the lawful ownership and use of
their respective Assets except to the extent that any such failure to hold
Permits or any such default would not be reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect (collectively, the “Permits”). Section 4.8 of the
Sellers Disclosure Letter lists all material Permits. All the Permits
are in full force and effect and no action, claim, enforcement action, notice of
violation or other civil, criminal, formal or informal administrative or other
proceeding is pending, or, to the Knowledge of the Company, is threatened, to
suspend, revoke, revise, limit, restrict, modify, withdraw or terminate any of
such Permits or declare any such Permit invalid, and no administrative or
governmental action or proceeding has been taken, or, to the Knowledge of the
Company, threatened, in connection with the expiration, continuance or renewal
of any such Permit; nor, to the Knowledge of the Company, do any grounds exist
to cause any of the foregoing to occur. The Company and each of the
Company Subsidiaries are in compliance with all the Permits and the Company and
each Company Subsidiary has filed all necessary reports and maintained and
retained all necessary records pertaining to the Permits, other than where any
such failure to have complied, filed, maintained or retained that would not
reasonably be expected to have a Material Adverse
Effect. Notwithstanding the foregoing, the representations and
warranties contained in this Section 4.8 do not
apply to benefit plans and related matters, labor matters, taxes, intellectual
property and environmental laws and environmental matters, which subject matters
are addressed in their entirety and exclusively in Section 4.10, Section 4.11, Section 4.12, Section 4.13 and
Section 4.16,
respectively.
Section
4.9. Litigation
As of the
date of this Agreement, there is no action, suit, proceeding at law or in
equity, or any arbitration or any administrative or other proceeding by or
before any Governmental Entity, pending, or, to the Knowledge of the Company,
threatened, against or affecting the Company or any of the Company Subsidiaries,
or any of their respective properties or rights which (x) would be reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect or
(y) would or seeks to enjoin, rescind, or materially delay the transactions
contemplated by this Agreement or otherwise hinder the Company or Sellers from
timely complying with the terms and provisions of this
Agreement. Notwithstanding the foregoing, the representations and
warranties contained in this Section 4.9 do not
apply to benefit plans and related matters, labor matters, taxes, intellectual
property and environmental laws and environmental matters, which subject matters
are addressed in their entirety and exclusively in Section 4.10, Section 4.11, Section 4.12, Section 4.13 and
Section 4.16,
respectively.
Section
4.10. Employee Benefit
Plans
(a) Each
employee benefit plan within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), maintained
by the Company and/or any of the Company Subsidiaries, or to which the Company
and/or any of the Company Subsidiaries contributes (or has an obligation to
contribute) or is a party as of the date hereof, excluding any Canadian Employee
Benefit Plans (collectively, the “US Employee Benefit
Plans”), is listed in Section 4.10(a) of
the Sellers Disclosure Letter. Except as would not be reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect: (i)
each US Employee Benefit Plan is in compliance with applicable Law and has been
administered and operated in accordance with its terms; (ii) each US Employee
Benefit Plan which is intended to be “qualified” within the meaning of Section
401(a) of the Code has received, or has requested, a favorable determination
letter from the Internal Revenue Service and, to the Knowledge of the Company,
no event has occurred and no condition exists that would reasonably be expected
to result in the revocation of any such determination; (iii) no US Employee
Benefit Plan is a “multiemployer plan,” within the meaning of Section 4001(a)(3)
of ERISA; (iv) no US Employee Benefit Plan covered by Title IV of ERISA has been
terminated and no proceedings have been instituted to terminate or appoint a
trustee to administer any such plan; (v) no US Employee Benefit Plan subject to
Section 412 of the Code or Section 302 of ERISA has failed to satisfy the
minimum funding standard within the meaning of Section 412 of the Code or
Section 302 of ERISA, or obtained a waiver of any minimum funding standard or an
extension of any amortization period under Section 412 of the Code or Section
303 or 304 of ERISA; (vi) neither the Company nor any of the Company
Subsidiaries, nor, to the Knowledge of the Company, any other “disqualified
person” or “party in interest” (as defined in Section 4975(e)(2) of the Code and
Section 3(14) of ERISA, respectively) has engaged in any transactions in
connection with any US Employee Benefit Plan that would reasonably be expected
to result in the imposition of a penalty pursuant to Section 502(i) of ERISA or
a tax pursuant to Section 4975 of the Code; (vii) no claim, action or litigation
has been made, commenced or, to the Knowledge of the Company, threatened in
writing with respect to any US Employee Benefit Plan (other than routine Claims
for benefits payable in the ordinary course, and appeals of such denied Claims);
and (viii) each Plan that is a “nonqualified deferred compensation plan” (as
defined for purposes of Section 409A(d)(1) of the Code) that is subject to
Section 409A of the Code has since (A) February 13, 2008, been maintained and
operated in good faith compliance with Section 409A of the Code and Notice
2005-1 and (B) January 1, 2009, been in documentary and operational compliance
with Section 409A of the Code.
(b) Each
employee benefit plan meaning, all agreements and
arrangement available to (funded and unfunded) any employees or
former employees of the Company or any of the Company Subsidiaries, including,
insurance, health, welfare, disability, pension, retirement, travel,
hospitalization, medical, dental, legal, employee loan, salaries, wages,
bonuses, vacation entitlements, vacation pay, car allowances, commissions, fees,
stock option plans, stock purchase plans, incentive plans, deferred compensation
plans, profit-sharing plans, employee assistance, counseling, eye care and other
similar benefits, plans or arrangements, maintained or contributed
to by the Company and/or any of the Company Subsidiaries as of the date hereof
relating to their Canadian operations, other than those required to be provided
or contributed to by Law or by a government authority (collectively, the “Canadian Employee Benefit
Plans”), is listed in Section 4.10(b) of
the Sellers Disclosure Letter. Except as would not be reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect: (i)
each Canadian Employee Benefit Plan has been established and
administered in compliance with applicable Law and all related
guidelines or policies, and the Company or applicable Company Subsidiary has
performed all obligations required to be performed by it under, and is not in
default under, or in violation of, the terms of each Canadian Employee Benefit
Plan or any collective agreements applicable thereto; (ii) each Canadian
Employee Benefit Plan intended or required to be registered under the Income Tax
Act (Canada) has
been so registered thereunder and under any applicable provincial legislation,
and, to the Knowledge of the Company, no event has occurred and no condition
exists that would reasonably be expected to adversely affect the tax-exempt or
registered status of any such Canadian Employee Benefit Plan; (iii) no Canadian Employee Benefit
Plan is a “registered pension plan” as such term is defined in the Income Tax
Act (Canada); (iv) all contributions, payments, or premiums required to be
remitted, paid to or in respect of each Canadian Employee Benefit Plan have been
paid or remitted in a timely fashion in accordance with its terms and all Laws,
and no Taxes, penalties or fees are owing or exigible under any Canadian
Employee Benefit Plans; and (v) there are no actions, suits, claims demands,
investigations, arbitrations or other proceedings pending with respect to the
Canadian Employee Benefit Plans against the Company and/or any of the Company
Subsidiaries (other than routine Claims for benefits payable in the
ordinary course, and appeals of such denied Claims).
(c) The
representations and warranties in this Section 4.10 are the
sole and exclusive representations and warranties of the Company concerning
employee benefit plans and related matters.
Section
4.11. Labor
Matters
(a) Except
as set forth on Section 4.11 of the
Sellers Disclosure Letter, as of the date of this Agreement, no employee of the
Company or any of the Company Subsidiaries is represented by any union or any
collective bargaining agreement. As of the date of this Agreement,
(i) no labor organization or group of employees of the Company or any of the
Company Subsidiaries has made a pending demand for recognition or certification,
(ii) there are no representation or certification proceedings or petitions
seeking a representation proceeding presently pending or, to the Knowledge of
the Company, threatened to be brought or filed with the National Labor Relations
Board or any other labor relations tribunal or authority, (iii) except as set
forth on Section
4.11, there are no filed, pending, and
to the Knowledge of the Company threatened, unfair labor practice charges or
complaints, strikes, work stoppages, work slowdowns, lockouts or other material
labor disputes related to the Company, Company Subsidiaries and/or Company
Employees, (iv) to the Knowledge of the Company there is no material xxxxxxx’x
compensation liability currently outstanding, and (v) there is no
employment-related charge, complaint, grievance, or investigation, inquiry,
pending, or to the Knowledge of the Company, threatened by an employee of the Company
or any of the Company Subsidiaries, relating to an alleged violation or
breach of any law, regulation or Contract, which in the case of subsections
(iii), (iv) and/or (v) would be reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect. Since January 1, 2009,
there has been no action brought against the Company or any Company Subsidiary
for the failure to give any notice required under the WARN Act with respect to
the Business. Within the past 180 days, with respect to the Business,
neither the Company nor any Company Subsidiary has implemented any plant closing
or mass layoff of employees that would implicate the WARN Act.
(b) The
representations and warranties in this Section 4.11 are the
sole and exclusive representations and warranties of the Company concerning
labor matters.
Section
4.12. Tax
Matters
Except as set forth in Section 4.12 of the
Sellers Disclosure Letter:
(a) Tax Returns. The
Company and each of the Company Subsidiaries and, to the Knowledge of the
Company, without inquiry, the Mexico Subsidiaries has filed or caused to be
filed, or shall file or cause to be filed, all material returns, statements,
information returns, forms and reports for Taxes (each, a “Return”) that are
required to be filed by, or with respect to, the Company, the Company
Subsidiaries and the Mexico Subsidiaries on or prior to the Closing Date (taking
into account any applicable extension of time within which to
file). All such Returns, when filed, were correct and complete in all
material respects. The Company has delivered to Purchaser correct and
complete copies of all capital stock Tax returns, franchise Tax returns and
income Tax returns filed by the Company and the Company Subsidiaries since
February 13, 2008 and all examination reports and statements of deficiencies
assessed against or agreed to by the Company or a Company Subsidiary since
February 13, 2008.
(b) Payment of Taxes. All
material Taxes and material Tax liabilities of the Company and the Company
Subsidiaries and, to the Knowledge of the Company, without inquiry, the Mexico
Subsidiaries that are due and payable on or prior to the Closing Date have been
(or will be) paid on or prior to the Closing Date or accrued on the books and
records of the Company and the Company Subsidiaries in accordance with GAAP (or,
in the case of the Mexico Subsidiaries, Mexican GAAP).
(c) Other Tax
Matters.
(i) Neither
the Company nor any of the Company Subsidiaries and, to the Knowledge of the
Company, without inquiry, the Mexico Subsidiaries is currently the subject of an
audit or other examination relating to the payment of a material amount of Taxes
of the Company or the Company Subsidiaries or, to the Knowledge of the Company,
without inquiry, the Mexico Subsidiaries by the tax authorities of any nation,
state or locality (“Tax Authority”) nor
have the Company or the Company Subsidiaries or, to the Knowledge of the
Company, without inquiry, the Mexico Subsidiaries received any written notices
from any Tax Authority that such an audit or examination is
pending.
(ii) To the
Knowledge of the Company, no Taxes, other than those arising in the Ordinary
Course of Business, are proposed to be assessed against the Company or any of
the Company Subsidiaries or to the Knowledge of the Company without inquiry
against the Mexico Subsidiaries and no potential Tax deficiencies are expected
to be raised against the Company or any of the Company Subsidiaries by any Tax
Authority. No claim has ever been made by a Tax Authority in a
jurisdiction where the Company or any Company Subsidiary or, to the Knowledge of
the Company, without inquiry, the Mexico Subsidiaries does not file Returns that
it is or may be subject to taxation by that jurisdiction. There are
no Liens other than Permitted Liens on any of the Assets that arose in
connection with any failure to pay any Tax.
(iii) Neither
the Company nor any of the Company Subsidiaries or, to the Knowledge of the
Company, without inquiry, the Mexico Subsidiaries (A) have entered into a
written agreement or waiver extending any statute of limitations relating to the
payment or collection of a material amount of Taxes of the Company or the
Company Subsidiaries or, to the Knowledge of the Company, without inquiry, the
Mexico Subsidiaries that has not expired or (B) is presently contesting any
material Tax liability of the Company or the Company Subsidiaries or to the
Knowledge of the Company, without inquiry, the Mexico Subsidiaries before any
court, tribunal or agency.
(iv) All
material Taxes that the Company or the Company Subsidiaries or, to the Knowledge
of the Company, without inquiry, the Mexico Subsidiaries is (or was) required by
Law to withhold or collect in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder, member or other third
party have been duly withheld or collected, and have been paid over to the
proper authorities to the extent due and payable.
(v) Less than
50% of the value of the gross assets of the Company consists of U.S. real
property interests or less than 90% of the value of the gross assets of the
Company consists of U.S. real property interests plus any cash or cash
equivalents (as defined in Treasury Regulation § 1.1445-11T(d)(1)).
(vi) Neither
the Company nor any Company Subsidiary or, to the Knowledge of the Company,
without inquiry, the Mexico Subsidiaries (A) has any liability for the
Taxes of any other Person solely as a result of being a member of an affiliated,
consolidated, combined, unitary or similar group or as a result of transferee or
successor liability, (B) has any liability for the payment of any Taxes as a
result of being a party to a Tax sharing agreement or as a result of an
obligation to indemnify any other Person with respect to the payment of Taxes,
or (C) is a party to any advance pricing agreement, closing agreement or other
agreement relating to Taxes with any Tax Authority.
(vii) Neither
Core Metals Group Canada Holdings, Inc. nor Masterloy Products Company has
applied for, been granted, or agreed to any accounting method change for which
it will be required to take into account any adjustment under section 481 of the
Code or any similar provision of such Code or of the corresponding Tax laws of
any municipality, state or country. To the Knowledge of the Company,
no Tax Authority has proposed any such adjustment or change in method of
accounting nor will any such adjustment or change be required by reason of the
consummation of the Transactions contemplated by this
Agreement.
(viii) The
Company is, and continuously since at least February 13, 2008 has been, a
partnership for U.S. federal income Tax purposes; and each Company Subsidiary
(other than Core Metals Group Canada Holdings, Inc.) is, and continuously since
at least February 13, 2008 has been, disregarded for U.S. federal income Tax
purposes as an entity separate from its owner. No election has been filed
to treat the Company or the Company Subsidiaries (other than Core Metals Group
Canada Holdings, Inc.) as a corporation for U.S. federal income Tax
purposes.
(ix) The
Company and the Company Subsidiaries have filed all required Reports of Foreign
Bank and Financial Accounts on Form TD F 90-22.1 or such other form as may be
required.
(d) The
representations and warranties in this Section 4.12 are the
sole and exclusive representations and warranties of the Company concerning Tax
matters.
Section
4.13. Intellectual
Property
(a) Section 4.13 of the
Sellers Disclosure Letter sets forth a true and complete list and summary
description of all Intellectual Property used to operate the Business, including
without limitation (i) patented or registered Intellectual Property and pending
patent applications or other applications for registrations of Intellectual
Property; (ii) unregistered trademarks, unregistered service marks, trade names,
corporate names, and Internet domain names; (iii) significant unregistered
copyrights; (iv) computer software (other than commercially available
off-the-shelf software); and (v) any other significant Intellectual Property,
and including any royalties payable or receivable by the Company or any Company
Subsidiary and, with respect to registered items, contains a list of all
jurisdictions in which such items are registered, the filing or registration
dates thereof and all registration numbers.
(b) The
Company or one of the Company Subsidiaries owns or has the right to use, free
and clear of all Liens, except for Permitted Liens, all Intellectual Property
necessary to conduct the Business of the Company and the Company Subsidiaries
substantially as presently conducted except where the failure to so own or have
such right, or the presence of such Liens, would not be reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect.
(c) To the
Knowledge of the Company, neither the Company nor any Company Subsidiary has
infringed or misappropriated, and the operation of the Business as currently
conducted will not infringe or misappropriate any Intellectual Property of any
Person; and, to the Knowledge of the Company, no Person has infringed or
misappropriated any of the Intellectual Property of the Company and/or any
Company Subsidiary or used by the Company and/or any Company Subsidiary under
license or otherwise and neither the Company nor any Company Subsidiary is aware
of any facts that indicate a likelihood of the foregoing.
(d) The
Company and Company Subsidiaries have taken reasonable security measures to
protect the secrecy, confidentiality and value of its trade secrets and other
confidential information that relates to the Business.
(e) To the
Knowledge of the Company, no loss or expiration of any material Intellectual
Property of the Company and/or any Company Subsidiary or used by the Company
and/or any Company Subsidiary under license or otherwise is threatened, pending
or reasonably foreseeable, other than license renewals arising in the Ordinary
Course of Business.
(f) Neither
the Company nor any Company Subsidiary has agreed to indemnify any third party
for or against any alleged interference, infringement or misappropriation with
respect to any Intellectual Property.
(g) Since
January 1, 2009, neither the Company nor any Company Subsidiary has received
written notice of any Claim challenging the use or ownership by the Company or
the Company Subsidiaries of any Intellectual Property, except for Claims that
would not be reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect.
(h) The
representations and warranties in this Section 4.13 are the
sole and exclusive representations of the Company concerning Intellectual
Property.
Section
4.14. Broker’s or Finder’s
Fee
No agent,
broker, Person or firm acting on behalf of the Company, any Company Subsidiary
or any Mexico Subsidiary is, or shall be, entitled to any broker’s fees,
finder’s fees or commissions from the Company or any of the other parties hereto
in connection with this Agreement or any of the transactions contemplated
hereby.
Section
4.15. Material
Contracts
Section 4.15 of the Sellers
Disclosure Letter contains a list, as of the date hereof, of all Contracts
(each, a “Material
Contract”) to which the Company and/or one or more of the Company
Subsidiaries is either entitled to receive or obligated to pay at least One
Hundred Thousand Dollars ($100,000), including but not limited to: (a) Contracts
not made in the Ordinary Course of Business; (b) Contracts, made with customers
in the Ordinary Course of Business (with the names of such customers redacted);
(c) Contracts made with suppliers in the Ordinary Course of Business (with the
names of such suppliers redacted); (d) leases of personal or real property,
owned by a third party; (e) Contracts to provide services or facilities to
another person, firm or corporation, including service contracts with customers;
(f) licenses to use any Intellectual Property of any third person; (g) Contracts
or commitments for capital expenditures; (h) Contracts limiting freedom to
compete in any business or geographical area or with any person or entity; (i)
government Contracts; (j) Contracts for employment or consulting with employees
or consultants of the Company or any Company Subsidiary unless terminable
without penalty upon sixty (60) days or less notice; (k) engineering,
construction or other operating agreements; (l) all surety and other bonds; (m)
Contracts granting any Lien on property; (n) Contracts with any officer,
director or employee; (o) Contracts for Indebtedness of the Company or any
Company Subsidiary; and (p) any settlement, conciliation or similar
agreement. Notwithstanding anything in this Section 4.15,
“Material Contracts” shall not include any Contract that (i) will be fully
performed or satisfied as of or prior to Closing or (ii) is solely between the
Company and one or more Company Subsidiaries or is solely between Company
Subsidiaries. Except as would not be reasonably likely to have,
either individually or in the aggregate, a Material Adverse Effect, each
Material Contract is in full force and effect and constitutes a legal, valid and
binding obligation of the Company and to the Knowledge of the Company, the
counterparty(s), except to the extent that its enforceability may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
Laws affecting the enforcement of creditors’ rights generally and by general
equitable principles. Except as would not be reasonably likely to
have, either individually or in the aggregate, a Material Adverse Effect,
neither the Company nor any of the Company Subsidiaries is in default under any
Material Contract. To the Knowledge of the Company, no other party to
any such Material Contract is in default under any such Material Contract that
would be reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect. To the Knowledge of the Company, (i) the counterparty
to the Contract set forth as item 18 under the “Supplier Agreement” heading on
Section 4.15 of
Sellers Disclosure Letter (the “Power Contract”) has
not indicated that it shall stop providing power to TAC and (ii) the
counterparty to the Power Contract has not indicated to the Company that it will
not extend or renew the existing Power Contract.
Section
4.16. Environmental
Matters
(a) Except
as would not be reasonably likely to have a Material Adverse Effect, to the
Knowledge of the Company, (i) the Company is in material compliance with all
applicable Environmental Laws, has obtained, and is in material compliance with,
all permits required under applicable Environmental Laws in connection with the
operation of its Assets and Business; and (ii) there are no proceedings or
actions by any Governmental Entity or other Person pending or threatened in
writing in connection with the present operation of the Assets or Business of
the Company or any of the Company Subsidiaries under any Environmental
Law.
(b) (i) Since
February 13, 2008, no written notice, or to the Knowledge of the Company, no
oral notice or threat has been received by the Company asserting a claim, by the
United States or any State that the Company or any Company Subsidiary has or may
have liability for remediation or response costs under the Comprehensive
Environmental Response Compensation and Liability Act or any State analog
thereof (i) at any third-party disposal site not owned by the Company or any
Company Subsidiary or (ii) at any property formerly owned or leased by the
Company or any Company Subsidiary for operations or waste storage or disposal
but no longer owned or leased by the Company or any Company
Subsidiary. To the Knowledge of the Company, between March 26, 2005
and February 13, 2008, no such written notice was received.
(c) The
representations and warranties in this Section 4.16 are the
sole and exclusive representations and warranties of the Company concerning
environmental matters.
Section
4.17. Real Property; Condition of Personal
Property
(a) The
Company owns no real property. None of the Company Subsidiaries is a
party to any leases, subleases, concessions, licenses, occupancy agreements or
other agreements for the use or possession of real property, nor does any
Company Subsidiary use or occupy any real property pursuant to an unwritten
agreement. Section 4.17(a) of
the Sellers Disclosure Letter contains a list as of the date hereof of all real
property owned by the Company Subsidiaries (each such parcel, as more
particularly described in Section 4.17(a) of the Seller’s Disclosure Letter,
together with all improvements located thereon, an “Owned
Parcel”). Section 4.17(a) of
the Sellers Disclosure Letter contains a list as of the date hereof of all
leases, subleases, concessions, licenses and occupancy agreements pursuant to
which the Company has a right to use or occupy real property (together with any
amendments, modifications, riders, addenda, replacements or restatements thereto
or thereof, the “Real
Property Leases”), as well as a description of the premises to which each
Real Property Lease relates (each of such premises, as more particularly
described in the applicable Real Property Lease, a “Leased
Parcel”). With respect to the Owned Parcels listed on Section 4.17(a) of
the Sellers Disclosure Letter and the Leased Parcels listed on Section 4.17(a) of
the Sellers Disclosure Letter (collectively, the “Parcels”):
(i) the
Company Subsidiary owning each Owned Parcel has good and marketable fee simple
title to such Owned Parcel and the Company has a valid leasehold interest in
each Leased Parcel, in each case, free and clear of all Liens other than
Permitted Liens;
(ii) there are
no pending or, to the Knowledge of the Company, threatened condemnation
proceedings or other Claims relating to any Parcel;
(iii) other
than the Real Property Leases, there are no leases, subleases, licenses,
occupancy agreements, concessions or other written agreements granting to any
party the right of entry, use or occupancy of any portion of any
Parcel;
(iv) there are
no Persons (other than one or more of the Company Subsidiaries) in possession of
any Parcel;
(v) all
temporary or permanent certificates of occupancy have been obtained for each
Parcel, and all other material Permits and other significant licenses,
authorizations, consents, certificates and approvals required by all applicable
Laws and Governmental Entities having jurisdiction for the current use of such
Parcel, and the requisite certificates of the local board of fire underwriters
(or other body exercising similar functions) have been issued for each Parcel
have been paid for and are current and in full force and effect;
(vi) the
current ownership, use and operation of each Parcel does not violate or
contravene any Law, Permit, Lien or Permitted Lien, except as would not be
reasonably likely to have a Material Adverse Effect. Neither the
Company nor any Company Subsidiary nor, to the Knowledge of the Company, any
other Person has requested or applied for any change in any material Law,
Permit, Lien or Permitted Lien relating to the ownership, use, zoning, operation
or development of a Parcel;
(vii) neither
the Company nor any Company Subsidiary has received any notice, nor does the
Company have any Knowledge, that any insurance company or board of fire
underwriters or Governmental Entity (or other body exercising similar functions)
has claimed or is claiming the existence of any defects or deficiencies in any
Parcel or is requiring the performance of any repairs, alterations or other work
to any Parcel except as would not have a Material Adverse Effect;
(viii) the
operation and current uses of the buildings and other improvements included in
each Owned Parcel do not violate any zoning, subdivision, building or similar
Law or Permit or any Permitted Lien, any covenants, conditions, restrictions or
plats of record or any certificate of occupancy issued with respect to the
Parcel, except as would not be reasonably likely to have a Material Adverse
Effect;
(ix) the
Company has made available to Purchaser all Title Information;
(x) Section
4.17(a) of the Sellers Disclosure Letter identifies all deeds of trust,
mortgages, security interests, pledges, charges, or other monetary encumbrances
on any Leased Parcel that, to the Knowledge of the Company, have been granted
voluntarily by the Company, any Company Subsidiary or any other Person to whom
the Company or a Company Subsidiary has succeeded (by grant, by operation or law
or otherwise) in title to any Owned Parcel or any Leased Parcel or portion
thereof, and there is no monetary default or material non-monetary default under
any such deeds of trust, mortgages, security interests, pledges, charges or
monetary encumbrances;
(xi) there is no existing
agreement or option in favor of any Seller, or third party to purchase from the
Company or any Company Subsidiary relating to any of the Owned
Parcels;
(xii) except for the Permitted
Liens, none of the Company or any Company Subsidiary is a party to or bound by
or subject to any agreement, contract or commitment, or any option in favor of a
Seller or a third party to purchase any real property from a third party;
and
(xiii) the
Company has provided to Purchaser or has made available to Purchaser copies of
all Property Condition Reports prepared by, or provided to, the Company or any
Company Subsidiary.
(b) Copies of
the Real Property Leases have been made available to Purchaser. Each
Real Property Lease is in full force and effect and constitutes a legal, valid
and binding obligation of the Company and, to the Knowledge of the Company, the
counterparty or counterparties thereto. Neither the Company nor any
Company Subsidiary nor, to the Knowledge of the Company, any counterparty or
counterparties to any Real Property Lease, is in default under such Real
Property Lease, and no event has occurred that now or in the future is
reasonably likely to (a) constitute a default under such Real Property Lease by
the Company or, to the Knowledge of the Company, by any counterparty thereto, or
(b) permit the termination of such Real Property Lease by any counterparty
thereto or, to the Knowledge of the Company, by the Company. All
fixed rent, percentage rent, additional rent and other sums due under each Real
Property Lease are paid current. To the Company’s Knowledge, the
Company’s leasehold interest in each Leased Parcel, and the Company’s rights
under the Real Property Lease relating to such Leased Parcel, are not
subordinate to the terms, provisions or liens of any mortgage, deed of trust,
ground lease or other encumbrance. Section 4.17(b) of
the Sellers Disclosure Letter identifies(i) every notice received by the Company
or any Company Subsidiary regarding the existence of any mortgage, deed of
trust, ground lease or other Lien on the landlord’s interest in any Leased
Parcel, and (ii) every nondisturbance agreement or other agreement received by
the Company or any Company Subsidiary in which the holder of any such Lien
agrees not to disturb the tenant’s possession of a Leased Parcel under such Real
Property Lease.
(c) Neither
the Company nor any Company Subsidiary has entered into a sublease.
(d) One of
the Company Subsidiaries owns good title to or, in the case of leased assets a
valid leasehold interest in, free and clear of all Liens other than Permitted
Liens, all buildings, machinery, fixtures, equipment and other tangible and
intangible Assets included in the unaudited balance sheet included in the
Interim Financial Statements or thereafter acquired by such Company
Subsidiaries, except for Assets disposed of in the Ordinary Course of Business,
consistent with past practice, since the Balance Sheet Date; (ii) the buildings,
fixtures and equipment and other Assets and tangible properties owned, leased
and used by the Company and the Company Subsidiaries in the Business conducted
by such Person are in sufficient operating condition and repair to permit their
use in the operations of the Company and the Company Subsidiaries as such
operations are presently conducted, subject to normal wear and tear and required
maintenance to be performed after the date hereof; and (iii) the Assets which
are owned or leased by the Company or the Company Subsidiaries and are located
as of the Balance Sheet Date at the locations at which such Persons conduct
business are sufficient to enable the Company and the Company Subsidiaries to
operate the Business at such sites in substantially the same manner as they are
currently operated.
Section
4.18. Insurance
Section 4.18 of the
Sellers Disclosure Letter sets forth a list, as of the date hereof, of each
material insurance policy with respect to the Assets, or Business (collectively,
the “Insurance
Policies”) and any pending and to the Knowledge of Company threatened
Claims or request for reimbursement. Each such Insurance Policy is in
full force and effect and all premiums due and payable thereon have been paid in
full. As of the date hereof, neither the Company nor any of the
Company Subsidiaries has received either a written notice of or a written notice
that could reasonably be expected to be followed by a written notice of
cancellation or non-renewal of any Insurance Policy. The Insurance
Policies provide substantially the same coverage as the Company and Company
Subsidiaries have had insured during the past twenty-four (24)
months.
Section
4.19. Affiliate
Transactions
Except as
otherwise set forth in this Agreement and except for employment relationships
and compensation, benefits, travel advances and employee loans in the Ordinary
Course of Business or as disclosed in Section 4.19 of the
Sellers Disclosure Letter, neither the Company nor any of the Company
Subsidiaries is a party to any agreement with, or involving the making of any
payment or transfer of assets to, any Seller, or any equityholder, officer,
member, partner or director of any Seller or any Affiliate of any
Seller.
Section
4.20. Books and
Records
Neither
the Company nor any Company Subsidiary has any of its records, systems,
controls, data or information recorded, stored, maintained, operated or
otherwise wholly or partly dependent on or held by any means (including any
electronic, mechanical or photographic process, whether computerized or not)
which (including all means or access thereto and therefrom) are not under the
exclusive ownership and direct control of the Company or a Company
Subsidiary.
Section
4.21. Competitively Sensitive
Representations
Section 4.21 of the
Sellers Disclosure Letter sets forth the top ten (10) customers for TAC (with
the names of such customers redacted) by revenue for fiscal year 2009 and, as of
the date set forth on such section, the balances outstanding and the age of any
receivables owing to TAC by such customers. Section 4.21 of
Sellers Disclosure Letter sets forth the top ten (10) suppliers for TAC (with
the names of such suppliers redacted) by purchase dollars for fiscal year
2009. Except as set forth in Section 4.21 of the
Sellers Disclosure Letter, no current customer Contract is longer than twelve
(12) months from the date of this Agreement. Using the actual average
costs for the period beginning January 1, 2009 and ending February 28, 2010
(unless such cost is below that specified by a supplier purchase order, in which
case the actual cost of such purchase order will be used), no current customer
Contract results in an quarterly cash loss (calculated as revenue from such
customer less the cash cost of goods sold for the product sold to such customer
to generate such revenue) assuming a Ferrosilicon RN 75% NA Transaction price of
$0.75 or better as published in Ryan’s Notes: Ferrous and Nonferrous
News and Prices. Except as set forth Section 4.21 of
Sellers Disclosure Letter, no current supplier Contract is longer than twelve
(12) months from the date of this Agreement. Except as set forth
Section 4.21 of
Sellers Disclosure Letter, since the Balance Sheet Date and as of the date
hereof, none of the suppliers set forth on Section 4.21 of
Sellers Disclosure Letter has indicated that it shall stop, or decrease the rate
of supplying materials, products or services to the Company or any Company
Subsidiary, and no customer set forth on Section 4.21 of
Sellers Disclosure Letter has indicated that it shall stop, or decrease the rate
of buying materials, products or services from the Company or any Company
Subsidiary. For the twelve month period ended December 21, 2009, TAC’s Power
Rate was below the 12-month Power Rate set forth on Section 4.21 of the
Sellers Disclosure Letter and, for the three month period ended December 21,
2009, TAC’s Power Rate was below the 3-month Power Rate set forth on Section 4.21 of the
Sellers Disclosure Letter. For the three month period ended March 21,
2010, TAC’s Power Rate was below the 3-month Power Rate set forth on Section 4.21 of the
Sellers Disclosure Letter. The representations in this Section 4.21 are
referred to herein as the “Competitively Sensitive
Representations.”
Section
4.22. Employee
Matters
Section 4.22 of
Sellers Disclosure Letter sets forth (i) a list of all of the Company Employees
as of the date hereof and (ii) the date of employment, title and compensation
(including, without limitation any supplement or bonus, retention or stay bonus
arrangements) of such Company Employees (including (and designating as such) any
such Company Employee who is an inactive employee on paid or unpaid leave of
absence, short-term disability or long-term disability); provided, that the
names of the employees of Masterloy Products Company shall be
redacted. Section 4.22 of
Sellers Disclosure Letter designates all Company Employees (with the names of
such employees redacted) governed by a collective bargaining
agreement.
Section
4.23. Solvency
Immediately
prior to giving effect the transactions contemplated by this Agreement, the
Company and each of the Company Subsidiaries will have adequate capital to carry
on their respective businesses.
Section
4.24. 2008 Purchase
Agreement
Since
February 13, 2008, the Company and the Company Subsidiaries have complied in all
material respects with the obligations of and the prohibitions on the Company
and the Company Subsidiaries under Sections 7.1(d)(vi) through (ix) and 7.3(b),
(c), (d) and (g) of the 2008 Purchase Agreement, and, to the Knowledge of the
Company, no action has been taken by the Company or the Company Subsidiaries
that would be reasonably likely to cause the loss of the Company’s
indemnification rights thereunder.
Section
4.25. Exclusivity of
Representations
The
representations and warranties made by the Company in this Article IV are the
exclusive representations and warranties made with respect to the Company, the
Company Subsidiaries and the Mexico Subsidiaries, including the Assets of each
of them. The Company hereby disclaims any other express or implied
representations or warranties with respect to itself or any of its
Subsidiaries. Except as expressly set forth herein, the condition of
the Assets of the Company, any of the Company Subsidiaries or any of the Mexico
Subsidiaries shall be “as is” and “where is” and the Company makes no warranty
of merchantability, suitability, fitness for a particular purpose or quality
with respect to any of the tangible Assets of the Company, the Company
Subsidiaries or the Mexico Subsidiaries or as to the condition or workmanship
thereof or the absence of any defects therein, whether latent or
patent. The Company is not, directly or indirectly, making any
representations or warranties regarding any pro-forma financial
information, financial projections or other forward-looking statements of the
Company, any of the Company Subsidiaries or any of the Mexico
Subsidiaries. It is understood that any due diligence materials made
available to Purchaser or its Affiliates or their respective Representatives do
not, directly or indirectly, and shall not be deemed to, directly or indirectly,
contain representations or warranties of the Company or its Affiliates or their
respective Representatives.
ARTICLE
V
REPRESENTATIONS AND
WARRANTIES OF PURCHASER
Purchaser
hereby represents and warrants to each Seller and the Company as
follows:
Section
5.1. Due Organization, Good
Standing and Corporate Power
Purchaser
is a corporation duly incorporated validly existing and in good standing under
the Laws of the State of Delaware and has the requisite corporate power and
authority and all necessary governmental licenses, authorizations, permits,
consents and approvals to own, lease and operate its properties and to carry on
its business as now being conducted. Purchaser is duly qualified or
licensed to do business and is in good standing in each jurisdiction in which
the nature of its business or the ownership or leasing of its properties makes
such qualification or licensing necessary, other than in such jurisdictions
where the failure to be so qualified or licensed and in good standing would not
be reasonably likely to have, individually or in the aggregate, a material
adverse effect on Purchaser.
Section
5.2. Authorization;
Noncontravention
Purchaser
has the requisite corporate power and authority and has taken all corporate
action necessary to execute and deliver this Agreement and the Transaction
Documents to which it is a party, to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and
thereby. The execution, delivery and performance of this Agreement by
Purchaser, the consummation by it of the transactions contemplated hereby and
the performance by its obligations hereunder have been duly authorized and
approved by the Board of Directors of Purchaser. No other corporate
action on the part of Purchaser is necessary to authorize the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby. This Agreement has been, and the
Transaction Documents to which it is a party, when executed and delivered in
accordance with the terms hereof, will be, duly executed and delivered by
Purchaser and, assuming that this Agreement and the Transaction Documents
constitute or will constitute, as applicable, valid and binding obligations of
the other parties hereto, constitute a valid and binding obligations of
Purchaser, enforceable against Purchaser in accordance with their terms, except
that such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally, and by general equitable principles. The
execution and delivery of this Agreement and the Transaction Documents to which
it is a party does not, and the consummation of the transactions contemplated
hereby and thereby will not, (a) conflict with any of the provisions of the
certificate of incorporation or by-laws or other equivalent charter documents of
Purchaser, as amended to the date of this Agreement, (b) conflict with, result
in a breach of or default under (with or without notice or lapse of time, or
both) or give rise to a right of termination, cancellation or acceleration of
any obligation or to loss of a benefit under, or result in the creation of any
Lien upon any of the properties or assets of Purchaser under, any contract,
agreement, indenture, mortgage, deed of trust, lease or other instrument to
which Purchaser is a party or by which Purchaser or any of their respective
assets is bound or subject or (c) subject to the consents, approvals,
authorizations, declarations, filings and notices referred to in Section 5.3,
contravene any domestic or foreign Law or any Order currently in
effect.
Section
5.3. Consents and
Approvals
No
consent of or filing with any Governmental Entity or any other third party which
has not been received or made, is necessary or required by or with respect to
Purchaser in connection with the execution and delivery by Purchaser of this
Agreement or the Transaction Documents to which it is a party or the
consummation by Purchaser, as the case may be, of any of the transactions
contemplated by this Agreement or the Transaction Documents.
Section
5.4. Broker’s or Finder’s
Fee
No agent,
broker, Person or firm acting on behalf of Purchaser is or shall be entitled to
any fee, commission or broker’s or finder’s fees in connection with this
Agreement or any of the transactions contemplated hereby from any of the other
parties hereto or from any Affiliate of the other parties hereto.
Section
5.5. Funds
Purchaser
has, or will have at Closing, cash on hand in an aggregate amount sufficient to
pay the Contract Purchase Price. The obligations of Purchaser under
this Agreement, including paying the Final Purchase Price, are not contingent on
the availability of financing.
Section
5.6. Solvency
Purchaser
is not entering the transactions contemplated hereby with actual intent to
hinder, delay or defraud either present or future
creditors. Immediately after giving effect to the transactions
contemplated hereby, Purchaser and its Subsidiaries (including the Company and
the Company Subsidiaries) will be Solvent. Immediately after giving
effect to the transactions contemplated by this Agreement, the Company and each
of the Company Subsidiaries will have adequate capital to carry on their
respective businesses.
Section
5.7. Litigation
There is
no action, suit, proceeding at law or in equity, or any arbitration or any
administrative or other proceeding by or before any Governmental Entity pending
or, to the Knowledge of Purchaser, threatened, against or affecting Purchaser,
or any of their respective properties or rights with respect to the transactions
contemplated hereby.
Section
5.8. Contact with Customers and
Suppliers
Neither
Purchaser nor any of its employees, agents, representatives, financing sources
or Affiliates has, without the prior written consent of Sellers’ Representative,
directly or indirectly contacted any officer, director, employee, shareholder,
franchisee, supplier, distributor, customer or other material business relation
of the Company, any of the Company Subsidiaries or any Mexico Subsidiary prior
to the Closing for the purposes of discussing the Company, any of the Company
Subsidiaries or Mexico Subsidiaries in connection with the transactions
contemplated hereby.
Section
5.9. Investment
Intent
(a) Purchaser
is acquiring the Units for its own account, for investment purposes only and not
with a view toward, or for resale in connection with, any distribution thereof,
nor with any present intention of distributions or selling the Units, in
violation of the federal securities Laws or any applicable foreign or state
securities Law.
(b) Purchaser
qualifies as an “accredited investor”, as such term is defined in Rule 501(a)
promulgated pursuant to the Securities Act.
(c) Purchaser
understands that the acquisition of the Units to be acquired by it pursuant to
the terms of this Agreement involves substantial risk. Purchaser and its
officers have experience as an investor in securities and equity interests of
companies such as the ones being transferred pursuant to this Agreement, and
Purchaser can bear the economic risk of its investment (which may be for an
indefinite period) and has such knowledge and experience in financial or
business matters that Purchaser is capable of evaluating the merits and risks of
its investment in the Units to be acquired by it pursuant to the transactions
contemplated hereby.
(d) Purchaser
understands that the Units to be acquired by it pursuant to this Agreement have
not been registered under the Securities Act. Purchaser acknowledges
that such securities may not be transferred, sold, offered for sale, pledged,
hypothecated or otherwise disposed of without registration under the Securities
Act and any other provision of applicable state securities Laws or pursuant to
an applicable exemption therefrom. Purchaser acknowledges that there
is no public market for the Units.
Section
5.10. Investigation by Purchaser;
Company’s Liability
Purchaser
has conducted its own independent investigation, verification, review and
analysis of the business, operations, assets, liabilities, results of
operations, financial condition, technology and prospects of the Company, the
Company Subsidiaries and the Mexico Subsidiaries, which investigation, review
and analysis was conducted by Purchaser and its Affiliates and, to the extent
Purchaser deemed appropriate, by Purchaser’s
Representatives. Purchaser acknowledges that it and its
Representatives have been provided adequate access to the personnel, properties,
premises and records of the Company, the Company Subsidiaries and the Mexico
Subsidiaries and the audit workpapers of the Company’s auditors for such
purpose. In entering into this Agreement, Purchaser acknowledges that
it has relied solely upon the aforementioned investigation, review and analysis
and not on any factual representations or opinions of Sellers, Sellers’
Representative, the Company, any of the Company Subsidiaries, any of the Mexico
Subsidiaries or any of their respective directors, officers, stockholders,
members, employees, Affiliates, controlling Persons, agents, advisors,
representatives or any other Person (except the specific representations and
warranties of Sellers set forth in Article III and the
Company set forth in Article IV, and
Purchaser acknowledges and agrees, to the fullest extent permitted by law,
that:
(a) without
limiting the generality of the foregoing, none of Sellers or the Company makes
any representation or warranty regarding any third party beneficiary rights or
other rights which Purchaser might claim under any studies, reports, tests or
analyses prepared by any third parties for the Company, the Company
Subsidiaries, the Mexico Subsidiaries or any of their respective Affiliates,
even if the same were made available for review by Purchaser or its
Representatives; and
(b) without
limiting the generality of the forgoing, Purchaser expressly acknowledges and
agrees that none of the documents, information or other materials provided to it
at any time or in any format by Sellers or the Company or any of their
respective Affiliates or Representatives (including Sellers’ Representative)
constitute legal advice, and Purchaser hereby waives all rights to assert that
it received any legal advice from Sellers, the Company, any of their respective
Affiliates, or any of their respective Representatives (including Sellers’
Representative) or counsel, or that it had any sort of attorney-client
relationship with any of such Persons.
Section
5.11. No Knowledge of
Misrepresentation or Omission
Purchaser
has no actual knowledge that the representations and warranties of Sellers
and/or the Company made in this Agreement (as qualified by the Sellers
Disclosure Letter) are inaccurate or untrue (including any actual knowledge of
material errors in or material omissions from the Sellers Disclosure Letter) or
that Sellers and/or the Company are in breach of any agreement or covenant in
this Agreement.
Section
5.12. Affiliates
Except as set forth on Annex B, neither
Purchaser nor any Person or entity controlled by Purchaser, nor any Person or
entity that controls Purchaser owns any business similar to, or that has
competed against in the past twelve (12) months, the respective business of the
Company and the Company Subsidiaries as currently conducted. For
purposes of this Section 5.12, the
term “control” shall mean (i) the ability to exercise decisive influence over or
direct the management decisions of an undertaking or (ii) control as defined in
16 CFR Section 801.1(b), as amended from time to time (which definition
currently reads as follows: “The term control (as used in the terms control(s),
controlling, controlled by and under common control with) means: (1) either (i)
holding 50% or more of the outstanding voting securities of an issuer or (ii) in
the case of an unincorporated entity, having the right to 50% or more of the
profits of the entity, or having the right in the event of dissolution to 50% or
more of the assets of the entity; or (2) having the contractual power presently
to designate 50% or more of the directors of a for-profit or not-for-profit
corporation, or in the case of trusts described in paragraphs (c)(3) through (5)
of this section, the trustees of such a trust.”).
Section
5.13. Exclusivity of
Representations
The
representations and warranties made by Purchaser in this Article V are the
exclusive representations and warranties made by Purchaser. Purchaser
hereby disclaims any other express or implied representations or warranties with
respect to itself.
Section
5.14. Clean Team
Members.
No Clean
Team Member has responsibility for the day-to-day marketing, sales or operations
of Purchaser.
ARTICLE
VI
COVENANTS
Section
6.1. Access to Information
Concerning Properties and Records
(a) Subject
to Section 6.2,
during the period commencing on the date hereof and ending on the earlier of (i)
the Closing Date and (ii) the date on which this Agreement is terminated
pursuant to Section
8.1, Sellers shall, and shall cause the Company and the Company
Subsidiaries to, upon reasonable notice to Sellers’ Representative, afford
Purchaser and its Representatives, reasonable access during normal business
hours to the Representatives, auditors, properties, books and records of the
Company and the Company Subsidiaries and, during such period, Sellers shall
furnish promptly to Purchaser all information concerning the Business,
properties and personnel as Purchaser may reasonably request; provided, that
Sellers’ Representative or the Company or any Company Subsidiary may restrict
the foregoing access to the extent that in the reasonable judgment of Sellers’
Representative, any Law applicable to the Company requires it or the Company
Subsidiaries to restrict such access to any of its Assets, information or
personnel; and provided, further, that such access shall not unreasonably
disrupt the operations of the Company or any of the Company
Subsidiaries. Notwithstanding anything to the contrary contained in
this Agreement, none of Sellers, the Company or any Company Subsidiary shall be
required to (i) provide any information or access that Sellers’ Representative
or the Company reasonably believes could violate applicable Law, including
Antitrust Laws, rules or regulations or the terms of any confidentiality
agreement or cause forfeiture of attorney/client privilege or (ii) conduct, or
permit Purchaser or any of its Representatives to conduct, any invasive Phase I
environmental site assessment, Phase II investigation or any other physical
environmental soil or groundwater sampling or investigation or any sampling,
testing or investigation of air emissions, wastewater, drinking water, or any
substance or material on, at, under or relating to the Assets or the Business or
any real property owned by or leased to the Company, any Company Subsidiaries
and/or any Mexico Subsidiaries, provided, however, that in all
other respects Purchaser may continue its environmental due diligence based upon
documents provided under this Section 6.1(a) or
which are otherwise publicly available.
(b) Nothing
contained in this Agreement shall be construed to give to Purchaser, directly or
indirectly, rights to control or direct the Company’s, the Company Subsidiaries’
or the Mexico Subsidiaries’ operations prior to the Closing. Prior to
the Closing, the Company shall exercise, consistent with the terms and
conditions of this Agreement, complete control and supervision of its and the
Company Subsidiaries’ operations.
(c) Purchaser
hereby agrees that it is not authorized to and shall not (and shall not permit
any of its Representatives to) contact any agent, employee, landlord or
representative, or outside of the ordinary course of its business, any
competitor, distributor, supplier or customer, of the Company, any Company
Subsidiary or any Mexico Subsidiary prior to the Closing without the prior
written consent of Sellers’ Representative, it being acknowledged that any and
all such contacts will be arranged by Sellers’ Representative and that Purchaser
and Sellers’ Representative will mutually agree on the timing and manner of
contact with all suppliers, distributors, customers, employees, landlords and
other third parties.
Section
6.2. Confidentiality; Competitively Sensitive
Information
(a) The information
made available to Purchaser and its Representatives in connection with the
transactions contemplated by this Agreement shall be subject to the terms of the
Confidentiality Agreement by and among the Company, Ospraie Advisors, L.P. and
Purchaser, dated December 14, 2009 (the “Confidentiality
Agreement”). The terms of the Confidentiality Agreement shall
survive the termination of this Agreement and continue in full force and effect
thereafter and the Confidentiality Agreement shall not be modified, waived or
amended without the written consent of the Company and Ospraie Advisors, L.P.;
provided, that,
in the event the Closing occurs, the Confidentiality Agreement shall
automatically terminate as of the Closing.
(b) Promptly
upon the execution hereof, Sellers’ Representative and/or the Company shall,
subject to the restrictions set forth below in this Section 6.2(b),
disclose to Purchaser certain information that is designated by the Company as
competitively sensitive and that was redacted or otherwise not provided or made
available to Purchaser in the due diligence materials (the “Competitively Sensitive
Information”) to permit Purchaser to evaluate and verify the accuracy of
the Competitively Sensitive Representations (the “Permitted
Purpose”). To ensure that the disclosure of the Competitively
Sensitive Information to Purchaser is handled in an appropriate manner and in
compliance with applicable Law, the parties hereto hereby agree to the
following:
(i) Sellers
and/or the Company shall not be required to disclose the Competitively Sensitive
Information to any Person other than Clean Team Members.
(ii) Prior to
the Closing and/or in the event there is no Closing, Clean Team Members that
receive the Competitively Sensitive Information shall use the Competitively
Sensitive Information for only the Permitted Purpose.
(iii) In the
event that there is no Closing hereunder, then for a period of six (6) months
following the Closing, Purchaser shall not reassign a Clean Team Member to a
position in which that individual would have responsibility for the day-to-day
marketing, sales or operations of Purchaser.
(iv) Prior to
the Closing and/or in the event there is no Closing, Clean Team Members shall
not disclose the Competitively Sensitive Information, the contents thereof, any
notes or discussions with respect thereto, or any part or summary thereof, to
any Person (except other Clean Team Members) unless (x) such disclosure would be
permissible under the Confidentiality Agreement because such Competitively
Sensitive Information (or the contents, notes, discussions or summaries thereof,
as applicable) is no longer Confidential Information under the terms of the
Confidentiality Agreement, or (y) it receives prior written consent from
W&C.
(v) Each
Clean Team Member shall acknowledge agreement to abide by the terms of the
Confidentiality Agreement and the restrictions with regarding use of the
Competitively Sensitive Information by signing the acknowledgment included at
Annex
D.
Section
6.3. Conduct of the Business of
the Company Pending the Closing Date
(a)
Sellers and the Company agree that, except as (i) set forth in Section 6.3(a) of the
Sellers Disclosure Letter, (ii) may be required by or as otherwise set forth in
this Agreement, or (iii) required by Law, by a Governmental Entity, or by any
Contract to which the Company or any of the Company Subsidiaries is a party,
during the period commencing on the date hereof and ending on the earlier of (A)
the Closing and (B) the termination of this Agreement pursuant to Section 8.1 the
Company shall and shall cause each of the Company Subsidiaries to conduct their
respective operations in all material respects only in the Ordinary Course of
Business consistent with past practice; and
(i) the
Company shall not and shall cause each of the Company Subsidiaries not to effect
any of the following without the prior written consent of Purchaser (such
consent not to be unreasonably withheld, conditioned or delayed; provided, that the
consent of Purchaser shall be deemed to have been given if Purchaser does not
object within three (3) Business Days from the date on which request for such
consent is provided by Sellers to Purchaser)):
(A) make any
change in or amendment to its certificate of incorporation or by-laws or other
equivalent charter documents, as applicable, in a manner that would delay or
impede the Company’s ability to consummate the transactions contemplated by this
Agreement;
(B) issue or
sell, or authorize to issue or sell, any shares of its capital stock or any
other ownership interests, as applicable, or issue or sell, or authorize to
issue or sell, any securities convertible into or exchangeable for, or options,
warrants or rights to purchase or subscribe for, or enter into any Contract with
respect to the issuance or sale of, any shares of its capital stock or any other
ownership interests, as applicable;
(C) split,
combine, redeem or reclassify, or purchase or otherwise acquire, any shares of
its capital stock or its other securities, as applicable;
(D) other
than in the Ordinary Course of Business consistent with past practice, sell,
lease or otherwise dispose of any of its Assets other than Parcels and in no
event over $100,000 without Purchasers consent that shall not be unreasonably
delayed or withheld; provided that the
restrictions set forth in this Section 6.3(a)(i)
shall not apply to any sales of Inventory made after seven (7) calendar days
from the date hereof.
(E) sell,
lease or otherwise dispose of, or enter into any Contract or arrangement for the
sale, lease or other disposition of, any Parcel and will not buy or acquire
any legal or beneficial interest in any real property and not occupy, lease,
manage or control or agree to occupy, lease, manage or control any facility or
property;
(F) grant or
perfect, or permit the granting, attachment or perfection of, any Lien on any
Parcel (other than Permitted Liens);
(G) create
any Lien other than Permitted Liens;
(H) other
than in the Ordinary Course of Business consistent with past practice, amend in
any material respect or terminate any Material Contract or enter into a Contract
which, had it been entered into prior to the date hereof, would have been a
Material Contract; provided, however, that the
Company and the Company Subsidiaries may renegotiate the terms of, or otherwise
extend, any Material Contract that has expired in accordance with its terms
prior to the date hereof or is scheduled to expire in accordance with its terms
within six (6) months after the date hereof with, to the extent legally
permissible, Purchaser’s consent not to be unreasonably withheld or
delayed;
(I) incur any
Indebtedness, other than letters of credit incurred in the Ordinary Course of
Business or borrowings under existing credit facilities set forth in Section 4.15 of the
Sellers Disclosure Letter, except to the extent that they are deemed
Indebtedness for purposes of Working Capital, or make any loans or advances to
any other Person;
(J) grant or
agree to grant to any officer of the Company or any of the Company Subsidiaries
any increase in wages or bonus, contract extension, severance, profit
sharing, retirement, insurance
or other compensation or benefits, or establish any new compensation or benefit
plans or arrangements, or amend or agree to amend any existing employee benefit
plans, except (w) as may be required under applicable Law, (x) pursuant to
the employee benefit plans or collective bargaining agreements of the Company or
any of the Company Subsidiaries in effect on the date hereof, or (y) in the
Ordinary Course of Business;
(K) make any
tax election not required by Law that could have a continuing effect on the
Company following the Closing Date, or settle or compromise any material Tax
liability other than in the Ordinary Course of Business; unless it has received
Purchaser’s prior written consent, not to be unreasonably withheld or
delayed;
(L) (x) waive
any rights of substantial value or (y) cancel or forgive any material
Indebtedness owed to the Company or any of the Company Subsidiaries, other than
Indebtedness of the Company owed to a Subsidiary of the Company or Indebtedness
for borrowed money of a Company Subsidiary owed to the Company or to another
Company Subsidiary;
(M) except as
may be required by any Governmental Entity or under GAAP make any material
change in its methods, principles and practices of accounting, including tax
accounting policies and procedures;
(N) authorize
any of, or commit or agree to take any of, the foregoing actions in respect of
which it is restricted by the provisions of this Section
6.3;
(O) buy or
acquire any legal or beneficial interest or title in any real property, or
occupy, lease, mortgage or control (other than Parcels), or enter into any new
agreement to occupy, lease, mortgage or control, any real property or facility;
or
(P) terminate
any lease identified in Section 4.17(a) of
the Sellers Disclosure Letter, or enter into any new lease, amendment, renewal,
extension or other modification of any such lease.
(b) Notwithstanding
anything contained in this Agreement to the contrary, the Company and the
Company Subsidiaries shall be permitted to maintain through the Closing Date the
cash management systems and procedures of the Company and the Company
Subsidiaries as currently conducted by the Company and the Company Subsidiaries,
and periodically settle intercompany balances in the Ordinary Course of Business
consistent with past practices (including through dividends and capital
contributions and all such intercompany balances shall be settled at the Closing
in accordance with their terms). The Company and the Company
Subsidiaries are allowed to dividend all Cash and Cash Equivalents of the
Company and the Company Subsidiaries to Sellers immediately prior to
Closing.
(c) From the
date hereof until Closing, the Company and the Company Subsidiaries shall comply
in all material respects with the obligations of and the prohibitions on the
Company and the Company Subsidiaries under Sections 7.1(d)(vi) through (ix) and
7.3(b), (c), (d) and (g) of the 2008 Purchase Agreement.
Section
6.4. Supplemental
Information
Sellers
and the Company shall supplement or amend the Sellers Disclosure Letter (each
such supplement or amendment, a “Supplement”),
including one or more Supplements to correct any matter which would constitute a
breach of any representation, warranty, agreement or covenant contained
herein.
Section
6.5. Reasonable Best
Efforts
In
addition to and without limiting the covenants and obligations of Sellers, the
Company and Purchaser hereunder, and subject to the terms and conditions set
forth herein, and to applicable legal requirements, Sellers, the Company and
Purchaser shall cooperate and use their respective reasonable best efforts to
take, or cause to be taken, all necessary action, and do, or cause to be done,
and assist and cooperate with the other parties in doing, all things necessary,
proper or advisable to consummate and make effective, in the most expeditious
manner practicable, the transactions contemplated hereby, including the
satisfaction of the respective conditions set forth in Article
VII.
Section
6.6. Exclusive
Dealing
(a) During
the period from the date of this Agreement until the earlier of (i) the date
this Agreement is terminated in accordance with its terms and (ii) the Closing
Date, Sellers and the Company shall not, and shall direct their respective
Affiliates and their respective Representatives (including Sellers’
Representative) to refrain from taking any action to, directly or indirectly,
encourage, initiate, solicit or engage in negotiations with, or provide any
confidential information to, any Person, other than Purchaser (and its
Affiliates and Representatives), concerning (x) any purchase of any equity
interests or any material asset of the Company or any of the Company
Subsidiaries, (y) any merger, recapitalization or similar transaction involving
the Company or any of the Company Subsidiaries or (z) any purchase of the Mexico
Interests.
(b) Immediately
following the execution of this Agreement, Sellers and the Company shall, and
shall cause each of their respective Affiliates, and shall direct each of their
respective Representatives (including Sellers’ Representative), to terminate any
existing discussions or negotiations with any Persons, other than Purchaser (and
its Affiliates and Representatives), concerning (x) any purchase of any equity
interests or any material asset of the Company or any of the Company
Subsidiaries (y) any merger, recapitalization or similar transaction involving
the Company or any of the Company Subsidiaries or (z) any purchase of the Mexico
Interests.
Section
6.7. Antitrust
Laws
Each of Seller and
Purchaser shall, and shall cause their respective Affiliates, and shall direct
each of their respective Representatives (including Sellers’ Representative), to
(i) refrain from notifying any Antitrust Authority regarding any of the
transactions contemplated hereby; (ii) promptly inform the other parties of any
material communication received by such party from any Antitrust Authority
regarding any of the transactions contemplated hereby; (iii) use their
reasonable best efforts to respond to any requests for documents or information
received from any Antitrust Authority; (iii) subject to applicable Law, permit
the other parties hereto to review in advance any proposed material written
communications to the Antitrust Authorities and incorporate the other parties’
reasonable comments in such communications.
Section
6.8. Certain Employee
Matters
(a) For
a period not to exceed six (6) months following the Closing Date, so long as any
employee of the Company or any of the Company Subsidiaries who is employed on
the Closing Date (“Company Employees”)
continues to be so employed by the Company or a Company Subsidiary during such
period, the Company and/or the Company Subsidiaries shall provide each such
Company Employee with (A) salary or wages, as applicable, bonus opportunity and
vacation eligibility similar to that provided to similarly situated employees of
Purchaser and its Affiliates and (B) employee benefits under Purchaser’s (or its
Affiliate’s) employee benefits and programs similar to similarly situated
employees of Purchaser and its Affiliates. The Company shall bear the
cost of severance payments (if any) payable in relation to or otherwise
attributable to any Claim of a Company Employee (x) that his employment was
terminated after the consummation of the transactions herein contemplated and
(y) that he is entitled to any severance payment or benefit under any plan or
policy of the Company or any Company Subsidiary, and Company shall indemnify,
defend and hold harmless Sellers and their Affiliates from any and all such
Claims (and any Losses incurred in connection therewith). Without
limiting the generality of the foregoing, for a period not to exceed six (6)
months following the Closing Date, Purchaser shall cause the Company to (i)
maintain and continue in effect the Company's severance plan as in effect
immediately prior to the Closing Date, and not amend, suspend or terminate such
plan and (ii) provide Company Employees all benefits under such plan for which
they are eligible in accordance with the terms and conditions thereof; provided, however, that no
Company Employee shall have an automatic right or entitlement to participate in
any Purchaser pension plan
(b) After the
Closing, the Company and/or the Company Subsidiaries shall provide each Company
Employee with credit for service with the Company and any Company Subsidiary
(and any predecessor entity respectively thereof) which will count toward full
credit for all eligibility and vesting purposes under any employee benefit plans
or arrangements maintained by Purchaser or any of its Affiliates (including,
without limitation, any welfare plan, incentive plan, vacation program or
severance program); provided, however, that no
Company Employee shall have an automatic right or entitlement to participate in
any Purchaser pension plan.
(c) After the
Closing, the Company and/or the Company Subsidiaries shall, to the extent
permitted under the welfare benefits plan rules of Purchaser and its Affiliates,
(A) waive all limitations as to preexisting conditions, exclusions and waiting
periods with respect to participation and coverage requirements applicable to
the Company Employees under any welfare benefit plans of Purchaser or its
Affiliates in which such Company Employees may be eligible to participate on or
after the Closing Date to the extent any such conditions, exclusions or waiting
periods did not apply to any such Company Employee immediately prior to the
Closing Date under a similar plan; and (B) provide each Company Employee with
credit for any co-payments and deductibles paid by such Company Employee prior
to the Closing Date under a benefit plan during the plan year in which the
Closing Date occurs in satisfying any applicable deductible or out of pocket
requirements under any welfare benefit plans of Purchaser or its Affiliates that
any such Company Employee may be eligible to participate in on or after the
Closing Date.
(d) On and
after the Closing Date, the Company and/or the Company Subsidiaries shall
provide continuation coverage (within the meaning of COBRA) to the extent
required by Law for all eligible Company Employees.
(e) Notwithstanding
the provisions of this Section 6.8, with
respect to Company Employees covered by a collective bargaining agreement
applicable to the Company or any Company Subsidiary, the provisions of such
collective bargaining agreement shall govern the employee benefits,
compensation, employee relations and other matters regarding the employment of
such Company Employees to the extent provided therein, and the provisions of
this Section
6.8 (other than to the extent required by Law and/or the collective
bargaining agreement) shall not apply to such Company
Employees. Purchaser acknowledges that a number of Company Employees
currently are represented by unions and agrees that it shall after the Closing
cause the Company and any Company Subsidiary which has a collective bargaining
agreement with any union representing such Company Employees to continue to
recognize such union for the remainder of the term of such collective bargaining
agreement and discharge its obligations under the applicable collective
bargaining agreement.
(f) This
Agreement shall not: (A) confer upon any employee or former employee of the
Company or Company Subsidiary or any representative of any such employee or
former employee, any rights or remedies, including any right to employment or
continued employment for any period or terms of employment, of any nature
whatsoever; (B) be interpreted to prevent or restrict Purchaser or its
Affiliates from modifying or terminating the employment or terms of employment
of any Company Employee, including the amendment or termination of any employee
benefit or compensation plan, program or arrangement, after the Closing Date; or
(C) be treated as an amendment or other modification of any employee benefit
plan maintained by the Company, any Company Subsidiary, Purchaser or any of
their respective Affiliates, or shall limit the right of Purchaser or its
Affiliates to amend, terminate or otherwise modify any employee benefit plan
maintained by Purchaser or any such Affiliate on or following the Closing Date,
to the extent consistent with this Section
6.8.
Section
6.9. Provisions in Organizational
Documents.
(a) To the
extent Legally permissible, the Company shall ensure that the rights to
indemnification now existing in the charters and by-laws of the Company in favor
of any individual who, at or prior to the Closing Date, was a director, officer,
employee or agent of the Company or any of the Company Subsidiaries or who, at
the request of the Company or any of the Company Subsidiaries, served as a
director, officer, member, trustee or fiduciary of another corporation,
partnership, joint venture, trust, pension or other employee benefit plan or
enterprise (collectively, with such individual’s heirs, executors or
administrators, the “Indemnified Persons”)
as provided in the respective governing documents and indemnification agreements
to which the Company or any of the Company Subsidiaries is a party, shall
survive the Closing and shall continue in full force and effect for a period of
three (3) years from the Closing Date to the same extent and on similar terms as
those for similarly situated employees of Purchaser. The Company
shall reasonably cooperate with Sellers’ Representative (on behalf of Sellers),
upon its request, for Sellers’ Representative to purchase a tail policy to
replace the current policy of directors’ and officers’ liability insurance
maintained by the Company, which policy of the Company shall be terminated prior
to or at the Closing, and provide such assistance as Sellers’ Representative may
reasonably request, all at Sellers’ Representative’s cost, and without Purchaser
having to disclose any proprietary or privileged information, in connection with
the filing of any claim under such tail policy.
(b) In the
event the Company or any of the Company Subsidiaries, or any of their respective
successors or assigns, (i) consolidates with or merges into any other Person or
(ii) transfers all or substantially all of its properties or assets to any
Person, the Company and the Company Subsidiaries shall use commercially
reasonable efforts to cause its successors and assigns to honor the obligations
set forth in this Section
6.9.
(c) The
obligations of Purchaser under this Section 6.9 shall
survive the Closing and shall not be terminated or modified in such a manner as
to affect adversely any Indemnified Person to whom this Section 6.9 applies
without the consent of such affected Indemnified Person (it being expressly
agreed that the Indemnified Persons to whom this Section 6.9 applies
shall be third-party beneficiaries of this Section 6.9, each of
whom may enforce the provisions of this Section
6.9).
Section
6.10. Public
Announcements
No party
shall make any public disclosure or communication or any other disclosure unless
in conformity with the Confidentiality Agreement, prior to the
Closing. After the Closing, Sellers’ Representative and Purchaser
each shall (a) consult with each other before issuing any press release or
otherwise making any public statement with respect to the transactions
contemplated by this Agreement, (b) provide to such other party for review a
copy of any such press release or public statement and (c) not issue any such
press release or make any such public statement prior to such consultation and
review and the receipt of the prior consent of such other party to this
Agreement, unless required by applicable Law.
Section
6.11. Notification of Certain
Matters
(a) Purchaser
on the one hand, and Sellers, Sellers’ Representative and the Company, on the
other hand, shall promptly notify each other of (i) any material Claims in
connection with the transactions contemplated by this Agreement commenced or, to
the Knowledge of Purchaser or the Knowledge of the Company, threatened, against
Sellers, the Company, any of the Company Subsidiaries, any of the Mexico
Subsidiaries or Purchaser, as the case may be, or (ii) the occurrence or
non-occurrence of any fact or event which would be reasonably likely to cause
any condition set forth in Article VII not to be
satisfied; provided, that no
such notification, nor the obligation to make such notification, shall affect
the representations, warranties or covenants of any party or the conditions to
the obligations of any party to this Agreement.
(b) If prior
to the Closing, Purchaser shall have knowledge of any breach of a
representation, warranty, covenant, agreement or condition of Sellers, Purchaser
shall promptly notify Sellers’ Representative of such knowledge in reasonable
detail.
(c) If prior
to the Closing, Sellers or Company shall have knowledge of any breach of a
representation, warranty, covenant, agreement or condition of Purchaser, Sellers
or Company shall promptly notify Purchaser of such knowledge in reasonable
detail.
Section
6.12. Preservation of
Records
(a) For
the earlier of a period of five (5) years after the Closing Date or such other
earlier period required by applicable Law, the Company and the Company
Subsidiaries shall use commercially reasonable efforts to preserve and retain
all corporate, accounting, legal, auditing, human resources and other books and
records of the Company and each of the Company Subsidiaries (including any
documents relating to any governmental or non-governmental Claims) and (ii) all
Returns, schedules, work papers and other material records or other documents
relating to Taxes of the Company relating to the conduct of the Business and
operations of the Company and each of the Company Subsidiaries prior to the
Closing Date. Notwithstanding any other provisions hereof, the
Company and the Company Subsidiaries shall use commercially reasonable efforts
to make reasonably similar obligations of the Company and the Company
Subsidiaries contained in this Section 6.12 be
binding upon the successors and assigns of the Company and the Company
Subsidiaries. In the event Purchaser or any of its successors or
assigns (i) consolidates with or mergers into any other Person or (ii) transfers
all or substantially all of its Assets to any Person, then, and in each case,
the Purchaser will use commercially reasonable efforts to ensure that the
successors and assigns of Purchaser honor the obligations set forth in this
Section
6.12.
(b) In the
event and for so long as Purchaser, the Company, the Company Subsidiaries or
Sellers’ Representative (on behalf of Sellers) are actively contesting or
defending against any Claim in connection with any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction on or prior to the Closing Date
involving the Company or any of the Company Subsidiaries, each of the other
parties shall make commercially reasonable efforts to: cooperate with it and its
counsel in the defense or contest, make available their personnel and provide
such testimony and provide access to their books and records as shall be
necessary or reasonably requested in connection with the defense or contest, all
at the sole cost and expense of the contesting or defending party of the
Seller’s Representative.
Section
6.13. Resignation of Officers and
Directors
At the
written request of Purchaser (which request shall be delivered at least three
(3) Business Days prior to the Closing), the Company shall cause any so
requested officer and member of the boards of directors of the Company and the
Company Subsidiaries to tender his resignation from such position effective
immediately prior to the Closing Date. No such requested resignation
of an officer of the Company or the Company Subsidiaries, other than the Ospraie
Directors, shall be deemed a voluntary resignation for purposes of any
employment agreements and will not terminate, reduce or modify any severance or
other rights thereunder.
Section
6.14. Conflicts;
Privileges
It is
acknowledged by each of the parties hereto that Sellers have retained White
& Case LLP (“W&C”) to act as
their counsel in connection with the transactions contemplated hereby and that
W&C has not acted as counsel for any other Person in connection with the
transactions contemplated hereby and that no other party to this Agreement or
other Person has the status of a client of W&C in connection with the
transactions contemplated hereby for conflict of interest or any other purposes
as a result thereof.
Section
6.15. Compliance with WARN Act and
Similar Statutes
After the
Closing, the Company and/or the Company Subsidiaries shall not, unless
commercially unreasonable, at any time within ninety (90) days after the Closing
Date, effectuate or cause to be effectuated (a) a “plant closing” (as defined in
the Worker Adjustment and Retraining Notification Act of 1988 (the “WARN Act”)) affecting
any site of employment or one or more facilities or operating units within any
site of employment or facility of the Company or (b) a “mass layoff” (as defined
in the WARN Act) affecting any site of employment or facility of the Company;
and/or, in the case of clauses (a) and (b), any similar action under any
comparable Law requiring notice to employees in the event of a plant closing,
mass layoff or other action triggering statutory notice
requirements.
Section
6.16. Taxes
(a) Transfer
Taxes. All stamp, transfer, documentary, sales and use, value
added, registration and other such taxes and fees (including any penalties and
interest) incurred in connection with this Agreement or any other transaction
contemplated hereby (collectively, the “Transfer Taxes”)
shall be paid by Purchaser and Purchaser shall procure any stock or other
transfer stamps required by, and properly file on a timely basis all necessary
tax returns and other documentation with respect to, any of the Transfer
Taxes.
(b) Responsibility for Filing
Tax Returns. E&Y (or such other accountant as chosen by
Sellers’ Representative) shall prepare on behalf of the Sellers, at the Sellers’
Representative’s expense, and, the Sellers’ Representative shall file, or cause
to be filed, at the Sellers’ Representative’s expense, all income Tax returns
for the Company and Company Subsidiaries (except Core Metals Group Canada
Holdings, Inc. and its subsidiaries) (including any related information returns,
including those required by Code §6050K) for any Tax period ending on or before
the Closing Date. The Purchaser shall cause the Company and the
Company Subsidiaries to cooperate with, and assist, E&Y by providing any
assistance and information as is required by E&Y to prepare such Returns, in
a manner consistent with the preparation of Returns for the Company in prior
years. Such assistance shall include Purchaser’s obligation to cause
the Company and the Company Subsidiaries to prepare and provide to Sellers’
Representative a package of Tax information materials, including schedules and
work papers (the “Tax
Package”) required by Sellers’ Representative to enable it timely to file
all Returns required to be filed by it pursuant to this Section. The
Tax Package shall be prepared in good faith in a manner consistent with past
practices of the Company and the Company Subsidiaries.
(c) Cooperation on Tax
Matters. After the Closing Date, Purchaser, the Company and
the Company Subsidiaries, on the one hand, and Sellers’ Representative, on the
other hand, shall furnish or cause to be furnished to each other, upon
reasonable request and at the expense of the party making the request (excluding
obligations in Section
6.16(b)), as promptly as practicable, such information and assistance
(including access to books, records, work papers and Returns for any taxable
period beginning before the Closing Date) relating to the Company and the
Company Subsidiaries as is reasonably necessary for the preparation of any
Return, claim for refund or audit, and the prosecution or defense of any claim,
suit or proceeding relating to any proposed Tax adjustment (including the
Sellers’ cooperation to use reasonable efforts to obtain and provide Purchaser
with IRS Forms 6166, in a manner consistent with prior years, to mitigate
Mexican withholding taxes on payments made by the Mexico Subsidiaries to the
Company or the Company Subsidiaries in 2009 and 2010, solely to the extent that
Purchaser has determined, after reasonable inquiry, that the IRS Forms 6166
previously obtained by Sellers for the 2008 tax year are not operative for 2009
and 2010). Upon reasonable notice, Purchaser shall make its, or shall cause the
Company or the Company Subsidiaries, as applicable, to make their, employees and
facilities available on a mutually convenient basis to provide reasonable
explanation of any documents or information provided hereunder, at the expense
of the party making the request.
Section
6.17. Conduct
No party
shall, from the date of this Agreement to the Closing Date, take any action or
fail to take any action that is intended to, or would reasonably be expected to,
individually or in the aggregate, prevent, materially delay or materially impede
the ability of Purchaser to consummate the transactions contemplated by this
Agreement.
Section
6.18. Environmental
Obligations
From and
after the Closing, the Company shall, and shall cause the Company Subsidiaries
to, use commercially reasonable efforts to comply fully with the obligations of
and the prohibitions on the Company and the Company Subsidiaries under Sections
7.1(d)(vi) through (ix) and 7.3(b), (c), (d) and (g) of the 2008 Purchase
Agreement.
Section
6.19. Mexico
Distributions
Notwithstanding
anything to the contrary in this Agreement, any dividends declared but unpaid
prior to the Closing Date or other distributions owing to the Company from any
of the Mexico Subsidiaries prior to the Closing Date (“Pre-Closing Period Mexico
Distributions”) shall be excluded from the purchase and sale of the
Units, and shall not be taken into account when calculating the Initial Purchase
Price or any adjustment thereto. In the event the Pre-Closing Period
Mexico Distributions are not received by the Company prior to the Closing,
Purchaser shall cause the Company to, within two (2) Business Days after the
Company’s receipt of the Pre-Closing Period Mexico Distributions, if any, pay an
amount equal to such Pre-Closing Period Mexico Distributions net of any Taxes
imposed or reasonably anticipated to be imposed on the Company or its Affiliates
with respect to the receipt of the Pre-Closing Period Mexico Distributions to
Sellers’ Representative by wire transfer of immediately available funds to an
account designated in writing by Sellers’ Representative.
ARTICLE
VII
CONDITIONS
PRECEDENT
Section
7.1. Conditions to the
Obligations of Each Party
The
respective obligations of Sellers and Purchaser to consummate the transactions
contemplated hereby are subject to the satisfaction or waiver by Sellers or
Purchaser, as appropriate, at or before the Closing Date, the following
conditions: No court or other Governmental Entity shall have issued, enacted,
entered, promulgated or enforced any Law or Order (that is final and
non-appealable and that has not been vacated, withdrawn or overturned)
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement.
Section
7.2. Conditions to the
Obligations of Purchaser
The
obligations of Purchaser to consummate the transactions contemplated hereby are
subject to the satisfaction or waiver by Purchaser on or prior to the Closing
Date of the following further conditions:
(a) Performance. All
of the agreements and covenants of Sellers and the Company to be performed prior
to the Closing pursuant to this Agreement shall have been duly performed in all
material respects.
(b) Deliveries. All
documents and deliveries required by this Agreement to be delivered by or on
behalf of Seller on or before the Closing Date shall have been delivered,
including without limitation the Transaction Documents.
(c) Representations and
Warranties. The representations and warranties of Sellers and the Company
contained in Article
III and Article
IV (other than, for the avoidance of doubt, the Competitively Sensitive
Representations), respectively, shall be true and correct in all material
respects at and as of the Closing Date as if made at and as of the Closing Date
(other than those representations and warranties made at and as of a specified
date, which shall be true and correct in all material respects at and as of such
specified date), except for representations and warranties that contain a
materiality, Material Adverse Effect or similar qualifier, which representations
and warranties shall be true and correct in all respects, in each case without
regard to any Supplement pursuant to Section
6.4.
(d) Competitively Sensitive
Representations. The Competitively Sensitive Representations
shall be true and correct in all respects at and as of the Closing Date as if
made at and as of the Closing Date without regard to any supplement pursuant to
Section 6.4,
except for such failures to be true and correct that do not have, individually
or in the aggregate, a Material Adverse Effect, and shall have supplemented them
in accordance with Section 6.4 to ensure that they remain true and
correct.
(e) No Material Adverse
Effect. Since the date hereof, there shall not have occurred a
Material Adverse Effect.
(f) The
Sellers shall have delivered or caused to be delivered to Purchaser the
following:
(i) a
certificate, under penalties of perjury, dated the Closing Date and otherwise
satisfying the requirements of Treasury Regulation 1.1145-11T(d)(2)(i) stating
that less than 50% of the value of the gross assets of the Company consist of
U.S. real property interests or less than 90% of the value of the gross assets
of the Company consist of U.S. real property interests plus any cash or cash
equivalents (as defined in Treasury Regulation § 1.1445-11T(d)(1));
(ii) a
certificate, under penalties of perjury, stating that Core Metals Group Canada
Holdings, Inc. is not and has not been a United States real property holding
corporation, dated the Closing Date and in form and substance required under
Treasury Regulation 1.897-2(h) so that Purchaser is exempt from withholding any
portion of the Final Purchase Price allocable to such corporation;
and
(iii) for each
Seller other than Xxx Xxxxxxxxx, a non-foreign certificate dated the Closing
Date, under penalties of perjury, and in form and substance required under
Treasury Regulations issued pursuant to Code §1445 stating that such Seller is
not a “foreign person” as defined in Code §1445.
Section
7.3. Conditions to the
Obligations of Sellers
The
obligations of Sellers to consummate the transactions contemplated hereby are
subject to the satisfaction or waiver by Sellers on or prior to the Closing Date
of the following further conditions:
(a) Performance. All
of the agreements and covenants of Purchaser to be performed prior to the
Closing pursuant to this Agreement shall have been duly performed in all
material respects.
(b) Representations and
Warranties. The representations and warranties of Purchaser
contained in Article
V shall be true and correct in all material respects at and as of the
Closing Date as if made at and as of the Closing Date.
(c) Payments. Purchaser
shall have delivered to the holders of the Closing Indebtedness an amount
sufficient to repay all such Closing Indebtedness, with the result that
immediately following the Closing there will be no further monetary obligations
of the Company or any of its Affiliates with respect to any Closing
Indebtedness.
(d) Deliveries. All
documents and deliveries required by this Agreement to be delivered by or on
behalf of Purchaser on or before the Closing Date shall have been delivered,
including without limitation the Transaction Documents.
Section
7.4. Frustration of Closing
Conditions
Neither
Purchaser, on the one hand, nor Sellers or the Company, on the other hand, may
rely on the failure of any condition set forth in this Article VII to be
satisfied if such failure was caused by such party’s failure to act in good
faith or such party’s failure to use its reasonable best efforts to cause the
Closing to occur, as required by Section
6.5.
ARTICLE
VIII
TERMINATION AND
ABANDONMENT
Section
8.1. Termination
This
Agreement may be terminated and the transactions contemplated hereby may be
abandoned, at any time prior to the Closing:
(a) by mutual
written consent of Sellers’ Representative and Purchaser;
(b) by either
Sellers’ Representative or Purchaser, if:
(i) any court
or other Governmental Entity shall have issued, enacted, entered, promulgated or
enforced any Law or Order (that is final and non-appealable and that has not
been vacated, withdrawn or overturned) restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement; provided, that the
party seeking to terminate pursuant to this Section 8.1(b)(i)
shall have complied with its obligations, if any, under Section 6.5 and/or
Section 6.7;
or
(ii) the
Closing Date shall not have occurred on or prior to thirty (30) calendar days
from the date hereof (the “End Date”); provided, that
neither party may terminate this Agreement pursuant to this Section 8.1(b)(ii) if
such party is in material breach of this Agreement;
(c) by
Sellers’ Representative, if: (i) any of the representations and warranties of
Purchaser contained in Article V shall fail
to be true and correct, or (ii) there shall be a breach by Purchaser of any
covenant or agreement of Purchaser in this Agreement that, in either case, (A)
would result in the failure of a condition set forth in Section 7.3(a)or
Section 7.3(b)
and (B) which is not curable or, if curable, is not cured upon the occurrence of
the earlier of (x) the thirtieth (30th) day after written notice thereof is
given by Sellers’ Representative to Purchaser and (y) the day that is five (5)
Business Days prior to the End Date; provided, that
Sellers’ Representative may not terminate this Agreement pursuant to this Section 8.1(c) if
Sellers are in breach of this Agreement;
(d) by
Purchaser, if: (i) any of the representations and warranties of Sellers or the
Company contained in Article III and Article IV,
respectively, shall fail to be true and correct, or (ii) there shall be a breach
by Sellers or the Company of any covenant or agreement of Sellers or the Company
in this Agreement that, in either case, (A) would result in the failure of a
condition set forth in Section 7.2(a) or
Section 7.2(b)
and (B) which is not curable or, if curable, is not cured upon the occurrence of
the earlier of (x) the thirtieth (30th) day after written notice thereof is
given by Purchaser to Sellers’ Representative and (y) the day that is five (5)
Business Days prior to the End Date; provided, that
Purchaser may not terminate this Agreement pursuant to this Section 8.1(d) if
Purchaser is in breach of this Agreement; or
(e) by
Sellers’ Representative, if Purchaser does not notify Sellers’ Representative
within four (4) Business Days after the date hereof of the failure or
satisfaction by Sellers of the condition set forth in Section
7.2(d).
Section
8.2. Effect of
Termination
In the
event of the termination of this Agreement pursuant to Section 8.1 by
Purchaser, on the one hand, or Sellers’ Representative, on the other hand,
written notice thereof shall forthwith be given to the other party specifying
the provision hereof pursuant to which such termination is made, and this
Agreement shall be terminated and become void and have no effect, and there
shall be no liability hereunder on the part of Sellers, Purchaser or the
Company, except that Section 6.2
(Confidentiality), Article IX (Miscellaneous), Section 9.8 (Dispute
Resolution), and this Section 8.2 shall
survive any termination of this Agreement. Nothing in this Section 8.2 shall (i)
relieve or release any party to this Agreement of any liability or damages which
the parties acknowledge and agree shall not be limited to reimbursement of
expenses or out-of-pocket costs, and may include to the extent proven the
benefit of the bargain lost by a party’s equityholders (taking into
consideration relevant matters, including other combination opportunities and
the time value of money), which shall be deemed in such event to be damages of
such party arising out of such party’s material breach of any provision of this
Agreement or (ii) impair the right of any party hereto to request specific
performance by the other party or parties, as the case may be, of such party’s
obligations under this Agreement.
ARTICLE
IX
MISCELLANEOUS
Section
9.1. Fees and
Expenses
Except as
set forth herein, all costs and expenses incurred in connection with this
Agreement and the consummation of the transactions contemplated hereby shall be
paid by the party incurring such costs and expenses.
Section
9.2. Extension;
Waiver
Subject
to the express limitations herein, at any time prior to the Closing, Sellers’
Representative, on behalf of Sellers and the Company, or Purchaser, may in their
respective sole discretion (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties contained herein by the other
parties or in any document, certificate or writing delivered pursuant hereto by
such other parties or (c) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of any party
to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed by or on behalf of such party (it being understood
that Sellers’ Representative may sign any such instrument on behalf of Sellers
and the Company). No failure or delay on the part of any party hereto
in the exercise of any right hereunder shall impair such right or be construed
as a waiver of, or acquiescence in, any breach of any representation, warranty,
covenant or agreement herein, nor shall any single or partial exercise of any
such right preclude other or further exercise thereof or of any other
right.
Section
9.3. Notices
All
notices, consents, requests, demands, waivers and other communications required
or permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given if delivered in person or mailed, certified or
registered mail with postage prepaid, or sent by facsimile (upon confirmation of
receipt), as follows:
(a) If to
Sellers’ Representative or Sellers or to any Seller to Sellers or such Seller in
care of:
Ospraie
Special Opportunities Master Alternative Holdings LLC
c/o Ospraie Advisors,
L.P.
000 Xxxx Xxxxxx, 00xx
Xxxxx
Xxx Xxxx, Xxx Xxxx
00000
Attention: Xxxxx
Xxxx
Xxxxxx Xxxxxxxxx
Fax: (000)
000-0000
(000)
000-0000
with a
copy (which shall not constitute notice) to:
White
& Case LLP
0000 Xxxxxx xx xxx
Xxxxxxxx
Xxx Xxxx, Xxx Xxxx
00000
Attention:
Xxxxxxx
X. Xxxxx
Fax: (000)
000-0000; or
(b) if to
Purchaser, to:
Globe
Metals Enterprises, Inc.
000 X
00xx
Xx
Xxxxx
0000
XX, XX
00000
Attention:
Xxxxxxx Xxxxxxxx
Fax:
(000) 000-0000
or to
such other Person or address as any party shall specify by notice in writing in
accordance with this Section 9.3 to each
of the other parties. All such notices, requests, demands, waivers and
communications shall be deemed to have been received on the date of delivery
unless if mailed, in which case on the third (3rd) Business Day after the
mailing thereof, except for a notice of a change of address, which shall be
effective only upon receipt thereof.
Section
9.4. Entire
Agreement
This
Agreement together with the Transaction Documents and the Sellers Disclosure
Letter contains the entire understanding of the parties hereto with respect to
the subject matter contained herein and supersedes all prior agreements and
understandings, oral and written, with respect thereto, other than the
Confidentiality Agreement.
Section
9.5. Release
(a)
Effective as of the Closing Date, Purchaser (the “Purchaser Releasor”),
on behalf of itself and its respective officers, directors, stockholders,
Subsidiaries and Affiliates and Representatives and each of their respective
successors and assigns, hereby releases, acquits and forever discharges, to the
fullest extent permitted by Law, Sellers and their past, present and future
officers, managers, directors, stockholders, partners, members, Affiliates,
employees, counsel, agents and Representatives (including Sellers’
Representative) (each, a “Purchaser Releasee”)
of, from and against any and all Claims and Losses of every kind, nature and
description whatsoever, which such Purchaser Releasor or its successors or
assigns ever had, since the beginning of time, now has or may have on or by
reason of any matter, cause or thing whatsoever to the Closing Date. Each
Purchaser Releasor shall not, and shall cause its respective officers,
directors, stockholders, Subsidiaries and Affiliates and each of their
respective successors and assigns, not to, assert any Claim against the
Purchaser Releasees. Notwithstanding the foregoing, Purchaser does not release
its rights and interests under this Agreement, the Transaction Documents and the
Confidentiality Agreement.
(b) Effective
as of the Closing Date, Sellers (the “Seller Releasor”), on
behalf of themselves and their respective officers, directors, stockholders,
Subsidiaries and Affiliates and Representatives and each of their respective
successors and assigns, hereby release, acquit and forever discharge, to the
fullest extent permitted by Law, the Purchaser, the Company, the Company
Subsidiaries and their past, present and future officers, managers, directors,
stockholders, partners, members, Affiliates, employees, counsel, agents and
Representatives (each, a “Seller Releasee”) of,
from and against any and all Claims and Losses of every kind, nature and
description whatsoever, which such Seller Releasor or its successors or assigns
ever had, since the beginning of time, now has or may have on or by reason of
any matter, cause or thing whatsoever, which such Seller Releasor or its
successors or assigns ever had, since the beginning of time, now has or may have
on or by reason of any matter, cause or thing whatsoever to the Closing Date;
provided, however, that this
release does not extend to any Claim (other than any Claim of the Ospraie
Sellers to which the foregoing release does extend) against the Company and/or
Company Subsidiary (a) for accrued benefits under employee benefit plans to
which such Seller may be entitled or for any unpaid salary, expense
reimbursement, or any similar ordinary course employee-related benefits for the
period ending on or prior to the Closing Date (other than rights with respect to
the EOIP, the Success Top-up Bonuses and Employee Incentive Bonuses contemplated
to be made on or before Closing) or (b) arising under or pursuant to any
employment–related agreement entered into between the Company or any of the
Company Subsidiaries and such Seller. Each Seller Releasor shall not,
and shall cause its respective officers, directors, stockholders, Subsidiaries
and Affiliates and each of their respective successors and assigns, not to,
assert any Claim against the Seller Releasees. Notwithstanding the
foregoing, Seller does not release their rights and interests under this
Agreement, the Transaction Documents and the Confidentiality Agreement; provided
however that any Claim or Action brought against Purchaser shall be brought only
against Purchaser (or Globe Specialty Metals, Inc. in the case of a claim under
the guaranty) and not against any natural person (other than for
fraud).
Section
9.6. Binding Effect; Benefit;
Assignment
(a) This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and, with respect to the provisions of Section 6.9
(Provisions in Organizational Documents), Section 6.16
(Transfer Taxes), Section 9.5
(Release), Section 9.14
(Specific Enforcement) shall inure to the benefit of the Persons benefiting from
the provisions thereof all of whom are intended to be third-party beneficiaries
thereof. Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto without the prior
written consent of the other party. Any attempted assignment in
violation of this Section 9.6 will be
void.
(b) At
Closing, the Company and each Company Subsidiary shall execute a joinder to this
Agreement (the “Joinder”) in the form
of Annex B
hereto, pursuant to which they will be obligated, severally, and not on a joint
and several basis, to assume and perform each of the post-Closing obligations of
Purchaser (other than Purchaser’s obligations to pay the Purchase Price
Adjustment, if any), the Company and/or each Company Subsidiary as set forth in
this Agreement.
Section
9.7. Sellers’
Representative
(a) Pursuant
to the Sellers’ Representative Agreement, Sellers have constituted, appointed
and empowered effective from and after the date of such agreement, Ospraie
Special Opportunities Master Alternative Holdings LLC as Sellers’
Representative, for the benefit of Sellers and the EOIP Holders and the
exclusive agent and attorney-in-fact to act on behalf of each Seller and EOIP
Holder in connection with and to facilitate the consummation of the transactions
contemplated hereby.
(b) Purchaser
shall have the right to rely upon all actions taken or omitted to be taken by
Sellers’ Representative pursuant to this Agreement, all of which actions or
omissions shall be legally binding upon Sellers.
(c) The grant
of authority provided for herein (i) is coupled with an interest and shall be
irrevocable and survive the death, incompetency, bankruptcy or liquidation of
any Seller and (ii) shall survive the Closing.
(d) Each of
the Company, Sellers and Purchaser acknowledges and agrees that Sellers’
Representative is to perform certain administrative functions in connection with
the consummation of the transactions contemplated
hereby. Accordingly, each of the Company, Sellers and Purchaser
acknowledges and agrees that, Sellers’ Representative shall have no liability
to, and shall not be liable for any Losses of, any of the Company, Sellers and
Purchaser in connection with any obligations of Sellers’ Representative, in its
capacity as Seller’s Representative, under this Agreement, the Transaction
Documents or otherwise in respect of this Agreement, the Transaction Documents
or the transactions contemplated hereby, except to the extent such Losses shall
be proven to be the direct result of willful misconduct by Sellers’
Representative in connection with the performance of its obligations as Sellers’
Representative hereunder.
Section
9.8. Dispute
Resolution
(a) General. Any
disagreement, dispute, controversy or claim arising out of or relating to this
Agreement or the Transaction Documents or the interpretation hereof or thereof
or any arrangements relating hereto or thereto or contemplated herein or therein
or the validity, breach or termination hereof or thereof (with the exception of
disputes subject to Section 2.3, each,
individually, a “Dispute”) shall be
resolved and settled pursuant to the terms of this Section
9.8. In the event of a Dispute between the parties, Sellers’
Representative or Purchaser (the “Disputing Parties”),
any such party (the “Claimant”) may
initiate the Dispute resolution procedures of this Section 9.8 by
providing written notice (the “Notice of Claim”) to
such other party (the “Respondent”)
identifying the nature and scope of the Dispute and stating the desire to
resolve the Dispute. Insofar as is practicable, any documentation
that supports the Claimant’s Notice of Claim shall be included with said Notice
of Claim. Within fifteen (15) Business Days after receiving the
Notice of Claim, Respondent shall respond in writing by stating its position
(including any related Claims it may have) and setting forth a proposed
resolution of the Dispute. Insofar as is practicable, any
documentation that supports the Respondent’s position shall be included with
such response. If Claimant and Respondent are not able to resolve the
Dispute within ten (10) Business Days after receipt of the Respondent’s position
by the Claimant, then the parties shall proceed in accordance with the
provisions of Section
9.8(b) and (c)
hereof.
(b) Informal
Resolution. If a Dispute is not resolved within ten (10)
Business Days after the receipt of the Respondent’s position by the Claimant, as
specified in Section
9.8(a) hereof, then each Disputing Party shall promptly nominate a senior
officer of its management to meet to resolve the Dispute.
(c) Arbitration. If
the senior officers nominated by the Disputing Parties in accordance with Section 9.8(b) above
are not able to resolve the Dispute within twenty-five (25) Business Days after
receipt of the Respondent’s position by the Claimant, the Dispute shall be
resolved by arbitration, and may be so referred to arbitration by either
Disputing Party. The Disputing Party initiating arbitration shall
notify the other Disputing Party, and all other parties to the present
Agreement, in writing that arbitration of the Dispute is
demanded. The language of the arbitration shall be English and the
place of arbitration shall be New York, New York, unless the parties agree on a
different location. The arbitration shall be conducted in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
(the “AAA”, and
the AAA’s rules, the “AAA Rules”)) by one
(1) arbitrator, who shall be jointly appointed by agreement of the Disputing
Parties. If the Disputing Parties are unable to agree on an
individual arbitrator within ten (10) Business Days after initiation of any
arbitration proceeding, the sole arbitrator shall be selected in accordance with
the following procedure: (i) each Disputing Party shall appoint one (1)
appointing authority (each, an “Appointing
Authority”), who shall meet the same requirements to serve as a sole
arbitrator of the Dispute under the AAA Rules, obtain its appointee’s acceptance
of such appointment, and deliver written notification of such appointment and
acceptance to the other Disputing Party within fifteen (15) Business Days after
expiration of the ten (10) Business Day period set forth at the start of this
sentence; (ii) the two Appointing Authorities shall then jointly appoint an
arbitrator, obtain the appointee’s acceptance of such appointment and notify the
Disputing Parties in writing of such appointment and acceptance within fifteen
(15) Business Days after their appointment and acceptance and (iii) the
arbitrator appointed by the two Appointing Authorities shall serve as the sole
arbitrator. If either party fails to appoint its Appointing Authority
within the time limits specified herein, or if the Appointing Authorities fail
to appoint the sole arbitrator within the time limits specified herein, the AAA
shall, within fifteen (15) Business Days after the deadline for appointment of
the sole arbitrator by the Appointing Authorities has expired, appoint the sole
arbitrator in accordance with the AAA Rules. In the event that there
should be more than two Disputing Parties, all Claimants shall jointly appoint
one Appointing Authority, and all respondents shall jointly appoint one
Appointing Authority; provided that, if either the Claimants or the Respondents
should be unable to appoint their respective Appointing Authority within the
time limit specified in the preceding sentence, the AAA shall appoint the sole
arbitrator, as set forth in the preceding sentence. Any award(s)
rendered by the arbitrator shall be final and binding on the
parties. Each party hereby waives to the fullest extent permitted by
Law any right it may otherwise have under the Laws of any jurisdiction to any
form of appeal or collateral attack on any award(s) issued
hereunder. The arbitration agreement in this Section 9.8, and any
arbitration arising out of this provision, shall be governed by the Federal
Arbitration Act, to the exclusion of state Law inconsistent therewith and the
United States District Court for the Southern District of New York shall have
jurisdiction over any action brought to enforce the arbitration agreement
contained in this Section 9.8, and each
of the parties hereto submits to such jurisdiction for such
purpose. Notwithstanding the foregoing, application may be made to
any court of competent jurisdiction with respect to the enforcement of any
award(s) issued hereunder and judgment upon any such award(s) may be entered in
any court having jurisdiction thereof
(d) Costs. The
arbitrator shall award to the prevailing party, if any, as determined by the
arbitrator, all of the Dispute resolution costs and expenses, including
attorneys’ fees, arbitrators’ fees, experts’ fees and AAA fees.
Section
9.9. Survival
None of
the representations or warranties set forth in this Agreement or in any
certificate or document delivered at, or prior to, the Closing in connection
with this Agreement shall survive the Closing Date and the consummation of the
transactions contemplated hereby, and thereafter none of Sellers, the Company or
Purchaser shall be under any liability whatsoever with respect to any such
representation or warranty. Purchaser shall have no post-Closing
remedy for breaches of any representation, warranty, agreement or covenant set
forth in this Agreement or in any certificate delivered at the Closing; provided, that
notwithstanding the foregoing, the agreements and covenants set forth in Article I, Article II, and this
Article IX and
Section 6.7
(Antitrust Laws), Section 6.8 (Certain
Employee Matters), Section 6.9
(Provisions in Organizational Documents), Section 6.10 (Public
Announcements), Section 6.12
(Preservation of Records), Section 6.16
(Transfer Taxes) and Section 6.18
(Environmental Obligations) shall survive in accordance with their
terms.
Section
9.10. Amendment and
Modification
This
Agreement may not be amended except by a written instrument executed by Sellers’
Representative and Purchaser.
Section
9.11. Counterparts
This
Agreement may be executed in several counterparts, each of which shall be deemed
to be an original, and all of which together shall be deemed to be one and the
same instrument. Signed counterparts of this Agreement may be
delivered by facsimile and by scanned pdf image; provided, that each
party hereto uses commercially reasonable efforts to deliver to each other party
hereto (or, in the case of Sellers, Sellers’ Representative) original signed
counterparts as soon as possible thereafter.
Section
9.12. Applicable
Law
THIS
AGREEMENT AND THE LEGAL RELATIONS BETWEEN THE PARTIES HERETO SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE CONFLICT OF LAWS RULES THEREOF; NOTWITHSTANDING THE FOREGOING,
QUESTIONS HEREUNDER CONCERNING ARBITRABILITY SHALL BE GOVERNED EXCLUSIVELY BY
THE FEDERAL ARBITRATION ACT, 9 U.S.C. §§ 1-16.
Section
9.13. Severability
If any
term, provision, covenant or restriction contained in this Agreement is held by
a court of competent jurisdiction or other authority to be invalid, void,
unenforceable or against its regulatory policy, the remainder of the terms,
provisions, covenants and restrictions contained in this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated, and this Agreement shall be reformed, construed and enforced in
such jurisdiction as if such invalid, illegal or unenforceable term, provision,
covenant or restriction or any portion thereof had never been contained
herein.
Section
9.14. Specific
Enforcement
The
parties agree that irreparable damage may occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached or threatened to be breached and that
an award of money damages may be inadequate in such
event. Accordingly, it is acknowledged that the parties and the third
party beneficiaries of this Agreement shall be entitled to seek equitable
relief, including an injunction or injunctions or Orders for specific
performance to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement (including any Order sought by
Sellers to cause Purchaser to perform its agreements and covenants contained in
this Agreement), in addition to any other remedy to which they are entitled at
law or in equity as a remedy for any such breach or threatened breach. In
addition, subject to the provisions of Section 2.3 and Section 9.8, each of
the parties hereto (a) consents to submit itself to the personal jurisdiction of
the United States District Court for the Southern District of New York or any
court of the State of New York located in the Borough of Manhattan in connection
with the foregoing, (b) agrees that it shall not attempt to deny or defeat such
personal jurisdiction or venue by motion or other request for leave from any
such court and (c) agrees that it shall not bring any action relating to this
Agreement or any of the transactions contemplated by this Agreement in any court
other than such courts.
Section
9.15. Waiver of Jury
Trial
Each of
the parties to this Agreement hereby irrevocably waives, and shall cause its
Subsidiaries to waive, all right to a trial by jury in any action, proceeding or
counterclaim arising out of or relating to this Agreement or the transactions
contemplated hereby.
Section
9.16. Rules of
Construction
The
parties hereto agree that they have been represented by counsel during the
negotiation and execution of this Agreement and have participated jointly in the
drafting of this Agreement and, therefore, waive the application of any Law,
holding or rule of construction providing that ambiguities in an agreement or
other document will be construed against the party drafting such agreement or
document.
Section
9.17. Headings
The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this
Agreement.
Section
9.18. Time of the
Essence
Time is
of the essence in this Agreement. If the date specified for giving any notice or
taking any action is not a Business Day (or if the period during which any
notice is required to be given or any action taken expires on a date which is
not a Business Day), then the date for giving such notice or taking such action
(and the expiration date of such period during which notice is required to be
given or action taken) shall be the next date which is a Business
Day.
* * * *
*
IN
WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed by their respective officers thereunto duly authorized, all as of the
date first above written.
Sellers
|
|
OSPRAIE
SPECIAL OPPORTUNITIES MASTER ALTERNATIVE HOLDINGS LLC (in its capacity as
a Seller and Sellers’
Representative)
|
|
|
by
Ospraie Advisors, L.P., as Investment
Manager
|
|
|
By:
|
/s/ Xxxxx Xxxx |
Name: Xxxxx Xxxx
Title: Authorized Signatory
|
THE
OSPRAIE FUND L.P.
|
|
|
By:
|
/s/ Xxxxxxx Xxxxxxxxx |
Name: Xxxxxxx Xxxxxxxxx
Title: Authorized Signatory
|
OSPRAIE
HOLDINGS, INC.
|
|
|
By:
|
/s/ Xxxxxxx Puma |
Name: Xxxxxxx Puma
Title: Authorized Signatory
|
|
XXXXXXXX
XXXXXX
/s/ Xxxxxxxx Xxxxxx
|
|
XXXXXX
XXXXXXXX
/s/ Xxxxxx Xxxxxxxx
|
|
XXXXX
XXXXXXXX
/s/ Xxxxx Xxxxxxxx
|
|
XXX
XXXXXXXXX
/s/ Xxx Xxxxxxxxx
|
|
XXXXX
XXXX
/s/ Xxxxx
Xxxx
|
|
XXXXXX
XXXXXXXXXXX
/s/ Xxxxxx
Xxxxxxxxxxx
|
The Company
|
CORE
METALS GROUP HOLDINGS LLC
|
|
|
By:
|
/s/ Xxxxxx X. Xxxxxxxxx |
Name: Xxxxxx X. Xxxxxxxxx
Title: Manager
|
GLOBE
METALS ENTERPRISES, INC.
|
|
|
By:
|
/s/ Xxxx Xxxxxxx |
Name: Xxxx Xxxxxxx
Title: President
ANNEX
A
ADDITIONAL DEFINED
TERMS
|
Defined Term
|
Section
|
|
AAA
|
Section
9.8(c)
|
|
AAA
Rules
|
Section
9.8(c)
|
|
Agreement
|
Preamble
|
|
Annexes
|
Section
1.4
|
|
Appointing
Authority
|
Section
9.8(c)
|
|
Arbitrator
|
Section
2.3(c)(i)
|
|
Audited
Financial Statements
|
Section
4.5(a)
|
|
Balance
Sheet Date
|
Section
4.5(a)
|
|
Canadian
Employee Benefit Plan(s)
|
Section
4.10(b)
|
|
Claimant
|
Section
9.8(a)
|
|
Closing
|
Section
2.4(a)
|
|
Closing
Balance Sheet
|
Section
2.3(a)
|
|
Closing
Date
|
Section
2.4(a)
|
|
Closing
Statement
|
Section
2.3(a)
|
|
Closing
Working Capital
|
Section
2.3(a)
|
|
CMG
|
Section
4.5(a)
|
|
Company
|
Preamble
|
|
Company
Employees
|
Section
6.8(a)
|
|
Company
Subsidiary
|
Section
4.1(b)
|
|
Competitively
Sensitive Information
|
Section
6.2(b)
|
|
Competitively
Sensitive Representations
|
Section
4.21
|
|
Confidentiality
Agreement
|
Section
6.2
|
|
Dispute
|
Section
9.8(a)
|
|
Disputed
Amounts
|
Section
2.3(c)
|
|
Disputing
Parties
|
Section
9.8(a)
|
|
End
Date
|
Section
8.1(b)(ii)
|
|
EOIP
Holders
|
Section
2.2(b)
|
|
EOIP
Payment
|
Section
2.2(b)
|
|
ERISA
|
Section
4.10(a)
|
|
Estimated
Closing Cash
|
Section
2.2(a)
|
|
Estimated
Closing Indebtedness
|
Section
2.2(a)
|
|
Estimated
Closing Statement
|
Section
2.2(a)
|
|
Estimated
Working Capital Adjustment
|
Section
2.2(a)
|
|
Estimated
Working Capital
|
Section
2.2(a)
|
|
Excess
Purchase Price Adjustment
|
Section
2.3(f)
|
|
FDM
|
Section
4.3(c)
|
|
FDM
Financial Statements
|
Section
4.5(a)
|
|
Final
Purchase Price
|
Section
2.3(d)
|
|
Final
Unit Payment
|
Section
2.3(e)
|
|
Financial
Statements
|
Section
4.5
|
|
Indemnified
Persons
|
Section
6.9f
|
|
Insurance
Policies
|
Section
4.18
|
|
Interim
Financial Statements
|
Section
4.5(a)
|
|
Joinder
|
Section
9.6(b)
|
|
Knowledge
of Purchaser
|
Section
1.5(b)
|
|
Knowledge
of the Company
|
Section
1.5(a)
|
|
Leased
Parcel
|
Section
4.17(a)
|
|
Material
Contract(s)
|
Section
4.15
|
|
Mexico
Subsidiaries
|
Section
4.3(c)
|
|
Mexico
Interests
|
Section
4.3(c)
|
|
Notice
of Claim
|
Section
9.8(a)
|
|
Notice
of Objection
|
Section
2.3(b)
|
|
Owned
Parcel
|
Section
4.17(a)
|
|
Parcel
|
Section
4.17(a)
|
|
Permits
|
Section
4.8
|
|
Power
Contract
|
Section
4.15
|
|
Permitted
Purpose
|
Section
6.2(b)
|
|
Pre-Closing
Period Mexico Distributions
|
Section
6.19
|
|
Purchase
Price Adjustment
|
Section
2.3(d)
|
|
Purchase
Price Escrow Account
|
Section
2.2(e)
|
|
Purchase
Price Escrow Amount
|
Section
2.2(e)
|
|
Purchaser
|
Preamble
|
|
Purchaser
Releasee
|
Section
9.5(a)
|
|
Purchaser
Releasor
|
Section
9.5(a)
|
|
Purchaser’s
Proposed Calculations
|
Section
2.3(a)
|
|
RC
|
Section
4.3(c)
|
|
Real
Property Leases
|
Section
4.17(a)
|
|
Remaining
Escrow Amount
|
Section
2.3(f)
|
|
Respondent
|
Section
9.8(a)
|
|
Return
|
Section
4.12(a)
|
|
Seller(s)
|
Preamble
|
|
Seller
Releasee
|
Section
9.5(b)
|
|
Seller
Releasor
|
Section
9.5(b)
|
|
Sellers
Disclosure Letter
|
Article
III
|
|
Supplement
|
Section
6.4
|
|
Tax
Authority
|
Section
4.12(c)
|
|
Transfer
Taxes
|
Section
6.16
|
|
TVA
|
Section
1.1
|
|
Units
|
First
Recital
|
|
US
Employee Benefit Plan(s)
|
Section
4.10(a)
|
|
W&C
|
Section
6.14
|
|
WARN
Act
|
Section
6.15
|
|
Working
Capital Adjustment
|
Section
2.3(a)
|
