ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of this 15th day of April, 1998, by and among MCKINNEY SMELTING, INC.,
a Texas corporation ("McKinney Smelting"), and XXXXXXXX X. XXXXX, the
principal shareholder of Seller ("Xxxxx) (XxXxxxxx Smelting and Xxxxx shall
be referred to collectively as "Sellers"), and FEREX METALS RECYCLING OF
XXXXXXXX, INC., a Texas corporation ("Purchaser").
WHEREAS, Sellers are engaged in the operation of a scrap metal
collection yard located in XxXxxxxx, Xxxxxx County, Texas (the "Collection
Facility"); and
WHEREAS, Purchaser desires to acquire from Sellers and Sellers have
agreed to sell to Purchaser the Collection Facility and the assets used by
Sellers in connection with the operation thereof;
NOW, THEREFORE, in consideration of the premises, the mutual covenants
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1
GENERAL
1.1 DEFINITIONS. Unless otherwise stated in this Agreement, the
following terms shall have the following meanings (the following definitions
to be equally applicable to both the singular and plural forms of any of the
terms herein defined):
"AFFILIATE": Any Person that, directly or indirectly, controls, or is
controlled by or under common control with, another Person. For the purposes
of this definition, "control" (including the terms "controlled by" and "under
common control with"), as used with respect to any Person, means the power to
direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities or
by contract or otherwise.
"AGREEMENT": As defined in the first paragraph hereof.
"ASSETS": As defined in Section 1.2(a).
"BALANCE SHEETS": As defined in Section 2.1(c).
"BUSINESS": the business of operating the Collection Facility.
"CLAIM": As defined in Section 6.2(a).
"CLOSING": As defined in Section 3.1.
"CLOSING DATE": As defined in Section 3.1.
"CODE": The Internal Revenue Code of 1986, as amended.
"CUSTOMER DATA": All of Sellers' customer lists, sales records and other
customer data (including credit data) relating to the Business.
"DAMAGES": As defined in Section 6.1(a).
"EFFECTIVE TIME OF CLOSING": As defined in Section 3.2.
"EMPLOYEES": Officers or employees of Sellers who perform services to,
in the name of, or on behalf of the Business.
"ENVIRONMENTAL LAWS": Any applicable federal, state, or local laws,
rules, regulations, codes or orders, and any judicial or administrative
interpretations thereof, including any judicial or administrative
interpretations thereof relating to pollution, protection of the environment,
public health and safety, air emissions, water discharges, hazardous or toxic
substances, solid or hazardous waste or occupational health and safety, as
any of these terms are or may be defined in such statutes, laws, rules,
regulations, codes, orders, rulings or ordinances, or judicial or
administrative interpretations thereof, including, without limitation, the
United States Department of Transportation Table (49 CFR 172, 101) or by the
Environmental Protection Agency, as hazardous substances (40 CFR Part 302)
and any amendments thereto; the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund Amendment
and Reauthorization Act of 1986, 42 U.S.C. Section 9601, et seq. (hereinafter
collectively "CERCLA"); the Solid Waste Disposal Act, as amended by the
Resource Conversation and Recovery Act of 1976 and subsequent Hazardous and
Solid Waste Amendments of 1984, 42 U.S.C. Section 6901 et seq.; the Hazardous
Materials Transportation Act, as amended, 49 U.S.C. Section 1801, et seq.;
the Clean Water Act, as amended, 33 U.S.C. Section 1311, et seq.; the Clean
Air Act, as amended (42 U.S.C. Section 7401-7642); the Toxic Substance
Control Act, as amended, 15 U.S.C. Section 2601 et seq.; the Federal
Insecticide, Fungicide, and Rodenticide Act as amended, 7 U.S.C. Section
136-13y; the Emergency Planning and Community Right-to-Know Act of 1986 as
amended, 42 U.S.C. Section 11001, et seq. (Title III of XXXX); the
Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. Section
651, et seq.; or any similar state statute.
"EQUIPMENT": As defined in Section 1.2(b)(2).
"ERISA": Employee Retirement Income Security Act of 1974, as amended.
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"ERISA AFFILIATE": Any corporation or trade or business which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as Seller or is under common control (within the
meaning of Section 414(c) of the Code) with Sellers.
"FINANCIAL STATEMENTS": As defined in Section 2.1(c).
"GENERAL CONVEYANCE, TRANSFER AND ASSIGNMENT": As defined in Section 1.6.
"GOVERNMENTAL BODY": Any court or any federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign.
"HOLD-BACK AMOUNT": As defined in Section 1.4(b).
"INDEMNITEES": "PURCHASER INDEMNITEES," as defined in Section 6.1(a),
or "Sellers Indemnitees," as defined in Section 7.1(b), as the context shall
require.
"INDEMNITOR": As defined in Section 6.2.
"INTANGIBLE ASSETS": As defined in Section 1.2(b)(4).
"INVENTORIES": As defined in Section 1.2(b)(5).
"LICENSES": As defined in Section 2.1(n)(2).
"LEASE": The lease agreement between Purchaser and the owner of the
Collection Facility, the form of which is attached hereto as EXHIBIT "A".
"LIEN": All mortgages, deeds of trust, liens, security interests,
pledges, leases, conditional sale contracts, judgment liens, claims, rights
of first refusal, options, liabilities, obligations, agreements, easements,
rights-of-way, reservations, restrictions or other encumbrances of any kind,
whether created under contract or arising as a matter of law.
"MATERIAL ADVERSE EFFECT": "Material Adverse Effect" means (a) any
change or effect in the business, results of operations, condition (financial
or otherwise), properties, assets, liabilities or prospects which change (or
effect), individually or in the aggregate, is materially adverse to such
condition, business, results of operations, properties, assets, liabilities
or prospects.
"OPERATIVE DOCUMENTS": This Agreement and all other agreements,
instruments, documents and certificates executed and delivered by or on
behalf of Sellers or Purchaser at or before the Closing pursuant to this
Agreement.
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"PBGC": The Pension Benefit Guaranty Corporation.
"PERMITS": All permits, authorizations, licenses or approvals,
necessary for Sellers' conduct of the Business.
"PERMITTED ENCUMBRANCES": (a) Liens for current taxes and assessments
not yet due and payable, and (b) such liens, minor imperfections of title, or
easements on real property, leasehold estates, or personalty as do not in any
material respect detract from the value thereof and do not interfere with the
present use of the property subject thereto.
"PERSON": An individual, partnership, joint venture, corporation, bank,
trust, unincorporated organization or a Governmental Body.
"PLAN": Any employee benefit or other plan established or maintained by
Borrower or any ERISA Affiliate and which is covered by Title IV of ERISA.
"PURCHASE PRICE": As defined in Section 1.3(a).
"PURCHASER": As defined in the opening paragraph of this Agreement.
"PURCHASER INDEMNITEES": As defined in Section 6.1(a).
"RECORDS": As defined in Section 1.2(b)(6).
"REPORTABLE EVENT": Any of the events set forth in Section 4043 of ERISA.
"SELLERS": As defined in the opening paragraph of this Agreement.
"SELLERS INDEMNITEES": As defined in Section 6.1(b).
"SETTLEMENT AGREEMENT(S)": The Agreement and Covenant Not to Xxx
entered into by and among Ferex Metals Recycling of McKinney, Inc., The
United States Department of Justice, The Environmental Protection Agency and
the agreement with the Texas Natural Resource Conservation Commission
regarding breaches of the Environmental Laws.
"STATEMENT OF WORK": The Statement of Work attached to the Settlement
Agreement that sets forth the actions required to remedy environmental
contamination at and around the Collection Facility.
"SUPPLIER DATA": All of Sellers' supplier lists and other supplier data
relating to the purchase of scrap metal, raw materials, utilities and other
supplies used in connection with the Business.
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"TRANSACTION": The sale and purchase of the Assets contemplated by this
Agreement.
1.2 AGREEMENT TO PURCHASE AND SELL.
(a) SALE OF ASSETS. On and subject to the terms and conditions of
this Agreement, Sellers hereby agree to sell, convey, transfer, assign and
deliver to Purchaser, and Purchaser hereby agrees to purchase from Sellers,
the assets, rights, franchises and properties described in Section 1.2(b)
(all such assets, rights, franchises and properties being herein collectively
referred to as the "Assets" and individually referred to as an "Asset") free
and clear of all Liens other than Permitted Encumbrances.
(b) TRANSFERRED ASSETS. The Assets shall consist of the assets,
rights, and properties described in the following clauses (1) through (8):
(1) VEHICLES. All the trucks, trailers and other certificated
vehicles described in EXHIBIT B attached hereto and made a part hereof (the
"Vehicles").
(2) EQUIPMENT. All furniture, equipment, machinery, apparatus,
tools, spare parts, computer equipment and supplies and all other tangible
personal property of every kind and description (other than the Vehicles
and the Inventories) located either on the Property or elsewhere insofar as
any of the foregoing relates to or is used in connection with the Business
(the "Equipment"). The Equipment includes, without limitation, all of the
items owned by Sellers listed in EXHIBIT C attached hereto and made a part
hereof and all the items leased by Sellers for use in the Business listed
on EXHIBIT C-1.
(3) PERMITS. All right, title and interest of Sellers in, to
and under all Permits relating to the Business or all or any of the Assets
to the extent that such rights are assignable by Sellers.
(4) INTANGIBLE ASSETS. All right, title and interest of Sellers
in, to and under all trade names, service marks, logos, trade secrets,
Customer Data, Supplier Data designs, rights and privileges related to or
used in the conduct of the Business, including all of Sellers' rights in
the names "XxXxxxxx Smelting, Inc.", "McKinney Metals, Inc." and "Mckinney
Junk Company", including any right to recover for the infringement thereof
(past or present) and any and all goodwill and going concern value
associated with the Business. All guaranties, warranties, indemnities and
similar rights in favor of Sellers with respect to any Asset (collectively,
the "Intangible Assets").
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(5) INVENTORIES. All of Sellers' inventories of scrap metal
located either at the Collection Facility or elsewhere (the
"Inventories").
(6) BOOKS AND RECORDS. All of Sellers' books, records, papers
and instruments of whatever nature and wherever located that relate to the
Business or the Assets or which are required or necessary in order for
Purchaser to conduct the Business from and after the Effective Time of
Closing in the manner in which it is presently being conducted, including,
without limitation, plats, maps, surveys, building and machinery diagrams,
accounting and financial records, maintenance records, personnel and labor
relations records, environmental records and reports, sales and property
tax records and returns, sales records, the Customer Data and the Supplier
Data, but excluding income tax records and returns and corporate minute
books and stock records (the "Records").
(7) TELEPHONE NUMBERS; POST OFFICE BOXES. The right to use all
telephone numbers and Post Office Boxes currently used in the Business.
(8) OTHER PROPERTY. All other or additional privileges, rights,
interests, properties and assets of Sellers of every kind and description
and wherever located that are used or intended for use in connection with,
or that are necessary to the continued conduct of, the Business as
presently being conducted, other than the Excluded Assets.
(c) EXCLUDED ASSETS. The following assets (the "Excluded Assets")
shall be excluded from the assets conveyed to Sellers:
(i) cash and cash equivalents; and
(ii) all accounts receivable of Sellers; and
(iii) the real property of Sellers.
1.3 PURCHASE PRICE. The purchase price for the Assets (the "Purchase
Price") shall be the sum of $2,940,000.
1.4 PAYMENT OF PURCHASE PRICE. The Purchase Price shall be payable to
Sellers as follows:
(a) PAYMENT OF ADVANCES BY PURCHASER'S AFFILIATES. The Purchase
Price shall be reduced by the amount of any advances made to Sellers by
Purchaser or its Affiliates prior to the Closing and any interest accrued on
said advances.
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(b) ESTIMATED COSTS OF PERFORMING STATEMENT OF WORK. The Purchase
Price shall be reduced by $600,000, the amount reasonably estimated by
Purchaser's contractors as the cost of completing the remediation plan
described in the Statement of Work (the "Holdback Amount"). In the event
that the actual cost of completing the remedial measures specified in the
Statement of Work is less than the Holdback Amount, the excess shall be paid
to Sellers.
(c) DISCHARGE OF LIENS OR ACQUISITION OF SECURED DEBT. The
Purchase Price shall be reduced by the amounts owed to the Sellers' creditors
holding Liens against the Assets in connection with securing the release of
such Liens or the acquisition of the debt underlying such Liens by the
Purchaser on or before the Closing.
(d) DIRECT PAYMENT OF CERTAIN TRADE CREDITORS. At or prior to
Closing, Purchaser shall have the right to apply portions of the Purchase
Price directly to the payment of amounts owed to unsecured creditors of
Seller, if, in the reasonable judgment of Purchaser, the failure to pay such
creditors would have a material adverse effect on the continuing business of
the Collection Facility. Such creditors shall include, without limitation,
those creditors listed on SCHEDULE 1.4(d) hereof.
(e) NET AMOUNT TO SELLERS. The balance of the Purchase Price
shall be paid to Sellers at the Closing in cash.
1.5 NO ASSUMPTION OF LIABILITIES. EXCEPT WITH RESPECT TO ANY CONTRACTS
SPECIFICALLY ASSUMED BY PURCHASER, AND LISTED ON EXHIBIT I-1 HEREOF,
PURCHASER DOES NOT ASSUME OR AGREE TO PAY, PERFORM OR DISCHARGE, AND SHALL
NOT BE RESPONSIBLE FOR, ANY LIABILITIES OR OBLIGATIONS OF SELLERS, WHETHER
ACCRUED, ABSOLUTE, CONTINGENT OR OTHERWISE.
1.6 INSTRUMENTS OF TRANSFER; FURTHER ASSURANCES. In order to
consummate the transactions contemplated hereby, at the Closing Sellers shall
execute and deliver to Purchaser a completed General Conveyance, Transfer and
Assignment, in the form attached hereto as EXHIBIT D and made a part hereof
("General Conveyance, Transfer and Assignment"), covering all of the Assets
and a Lease in the form of EXHIBIT A hereto. At the Closing, and at all
times thereafter as may be necessary, Sellers shall execute and deliver to
Purchaser such other instruments of transfer as shall be reasonably necessary
or appropriate to vest in Purchaser good and indefeasible title to the Assets
and to comply with the purposes and intent of this Agreement.
1.7 VALUE ASSIGNED TO THE ASSETS. The proportion of the consideration
to be allocated to each of the Assets purchased pursuant to this Agreement
shall be set forth in EXHIBIT E to be appended to this Agreement; provided,
however, that the value of inventory shall be agreed to be $150,000.
Purchaser and Sellers agree that they
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will not take any position or action inconsistent with such allocation in the
filing of any federal income tax returns.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF SELLERS. Sellers hereby jointly
and severally represent and warrant to Purchaser that the following are true
and correct on and as of the date of this Agreement and will be true and
correct through the Effective Time of Closing as if made on and as of that
date:
(a) CORPORATE STATUS OF SELLER. McKinney Smelting is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Texas and is qualified to transact business and is in
good standing as a foreign corporation in the jurisdictions where it is
required to qualify in order to conduct its business as presently conducted.
XxXxxxxx Smelting has the corporate power and authority to own, lease or
operate all properties and assets now owned, leased or operated by it and to
carry on its business as now conducted. XxXxxxxx Smelting has heretofore
delivered to Purchaser complete and correct copies of its Articles of
Incorporation and Bylaws, as amended and in effect on the date hereof.
(b) CONSENTS, AUTHORIZATIONS AND BINDING EFFECT.
(1) Sellers may execute, deliver and perform this Agreement
(including without limitation execution, delivery and performance of the
Operative Documents to which Sellers are a party) without the necessity of
Sellers obtaining any consent, approval, authorization or waiver or giving
any notice or otherwise, except for such consents, approvals,
authorizations, waivers and notices which have been obtained and are
unconditional and are in full force and effect.
(2) XxXxxxxx Smelting has the corporate power to enter into this
Agreement and to carry out its obligations hereunder. This Agreement has
been duly authorized, executed and delivered by Sellers and constitutes the
legal, valid and binding obligation of Sellers, enforceable against them in
accordance with its terms, except as may be limited by bankruptcy,
reorganization, fraudulent conveyance, insolvency and similar laws of
general application relating to or affecting the enforcement of rights of
creditors and subject to general principles of equity.
(3) The execution, delivery and performance of this Agreement by
Sellers does not and will not:
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(i) constitute a violation of the Articles of
Incorporation, as amended, or Bylaws, as amended of XxXxxxxx Smelting,
(ii) result in any Lien against the Assets,
(iii) constitute a violation of any statute, judgment,
order, decree or regulation or rule of any Governmental Body
applicable or relating to Sellers or the Assets or the Business, or
(iv) [RESERVED]
(4) Without limiting the foregoing, the execution, delivery and
performance of the Operative Documents, and consummation of the
transactions contemplated thereby, have been duly authorized and approved
by the Board of Directors and the shareholders of Sellers entitled to vote
on the Transaction.
(c) FINANCIAL STATEMENTS, ETC. Sellers have delivered to
Purchaser balance sheets of the Business as of December 31, 1995 and December
31, 1996 (the "Balance Sheets") and operating statements for the calendar
years 1995 and 1996 (together with related notes and schedules) (such Balance
Sheets and operating statements and the related notes and schedules being
hereinafter together referred to as the "Financial Statements"). The
Financial Statements have been prepared from the books and records of Sellers
on a basis consistent with preceding years and throughout the periods
involved and present fairly the financial position of the Business as of the
respective balance sheet dates and the results of operations for the periods
covered thereby.
Sellers' books of account have been kept accurately in all material
respects in the ordinary course of business, the transactions entered therein
represent bona fide transactions, and the revenues, expenses, assets and
liabilities of Sellers have been properly recorded in such books in all
material respects.
(d) TITLE AND CONDITION OF ASSETS. Except for the Liens set forth
on Exhibit F hereto (which exhibit sets forth the Liens against Sellers'
Assets, the holders of such Liens and the amounts owed to the holders of such
Liens), Sellers have good and indefeasible title to the tangible and
intangible personal property owned by it that comprise the Assets, free and
clear of Liens, other than Permitted Encumbrances.
To Sellers' knowledge except for the possible encroachment of a
fence on property owned by the Texas Department of Transportation, no
improvement or
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structure on any real property owned by Sellers encroaches on any adjacent
property. No improvement or structure on any real property owned or used by
Sellers has been damaged by any casualty or act of God, or been subject to
any condemnation proceedings which, individually or in the aggregate, would
have a Material Adverse Effect.
The tangible Assets (i) are in good operating condition and repair,
subject to ordinary wear and tear (taking into account the age of the
Equipment), and have been maintained in accordance with standard industry
practice, (ii) are capable of being used in the Business as presently being
conducted without present need for repair or replacement except in the
ordinary course of the Business and (iii) conform in all material respects
with all applicable legal requirements.
Since the date of the December 31, 1996 Balance Sheet, Sellers have
not sold, transferred, leased, distributed or otherwise disposed of any of
its assets, or agreed to do so, except in the ordinary course of business.
The Assets constitute all material assets and properties, real,
personal, tangible and intangible, that are necessary for the continued
conduct of the Business as conducted by Sellers prior to February 18, 1998.
(e) INSURANCE. Exhibit G attached hereto contains a list of all
policies of insurance maintained as of the date of this Agreement by Sellers
(the "Insurance Policies").
(f) LITIGATION AND COMPLIANCE WITH LAWS, ETC. Except as disclosed
on EXHIBIT H hereto, there are no claims, actions, suits or proceedings,
whether in equity or at law, or any governmental or administrative
investigations pending or, to the knowledge of Sellers, threatened against
Sellers or any Asset, except (1) for any claims, actions, suits or
proceedings which pertain to routine claims by Persons other than
Governmental Bodies that are covered by insurance (subject to the applicable
insurance deductibles), and (2) for other claims, actions, suits, or
proceedings which, individually or in the aggregate, would not have, if
prosecuted to judgment against Sellers or their Assets, a Material Adverse
Effect.
As of the date of this Agreement,
(1) Except with respect to the Environmental Laws, to Sellers'
knowledge the Business is in compliance in all material respects with, have
conducted and does conduct its business and operations in compliance with,
and is not in default or violation in any respect under any law,
regulation, writ, injunction, decree or order applicable to Sellers or the
Assets, including without limitation all safety and health, labor, equal
employment opportunity or employment discrimination laws, rules and
regulations, and
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(2) except as otherwise disclosed in writing to Purchaser, there
are no judgments outstanding and unsatisfied against Sellers or the Assets,
and
(g) ERISA. Sellers do not have and have never adopted any ERISA
Plans.
(h) COLLECTION FACILITY.
(1) Except with respect to the violations of Environmental Laws
previously disclosed to Purchaser in writing, to Sellers' knowledge the
real property on which the Collection Facility is located does not violate
any provisions of any applicable building code, fire, health or safety
regulations, or other governmental ordinances, orders or regulations. No
condition exists with respect to the Collection Facility which would
prevent, or require repair or modification thereof as a prerequisite to,
Purchaser using the Real Property in the ordinary conduct of the Business
except with respect to ordinary wear and tear and scheduled maintenance
and repair. Except for the OSHA report dated ______________, Sellers have
received no notice of noncompliance with any building code, fire, health or
safety regulations.
(2) The zoning classification of the real property on which the
Collection Facility is located is such that the Collection Facility may be
used as currently used in the Business.
(3) Except as otherwise disclosed to Purchaser in writing, there
are no parties in possession of any portion of the real property on which
the Collection Facility is located as lessees, tenants at sufferance or
trespassers.
(4) There is no pending or threatened condemnation or similar
proceeding or assessment affecting the real property on which the
Collection Facility is located, or any part thereof, nor to the best
knowledge and belief of Sellers is any such proceeding or assessment
contemplated by any Governmental Body.
(5) Except with respect to violations of the Environmental Laws
previously disclosed to Purchaser in writing, Sellers have complied with
all applicable laws, ordinances, regulations, statutes, rules and
restrictions relating to the Real Property, or any part thereof, to the
extent that any noncompliance would have a Material Adverse Effect.
(6) There are water, sewer, and electricity lines to the Real
Property which are available for "tap in" by Purchaser and which are
sufficient
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for service on the Real Property with respect to the ordinary conduct of
the Business.
(7) The real property on which the Collection Facility is
located has full and free access to and from public highways, streets or
roads and, to the best knowledge and belief of Seller, there is no pending
or threatened proceeding by any Governmental Body which would impair or
result in the termination of such access.
(i) ABSENCE OF CERTAIN CHANGES, ETC. Since December 31, 1996 Sellers
have
(1) not entered into any transaction or contract with any party
other than Purchaser, or amended or terminated any transaction or contract,
except normal transactions or contracts consistent in nature and scope with
prior practices and entered into in the ordinary course of business,
(2) not mortgaged, sold, leased, transferred, distributed or
otherwise disposed of any of its material Assets, except in the ordinary
course of business,
(3) not experienced any material damage, destruction or loss to
or of any of its material Assets except in the ordinary course of business
and except to the extent that any Asset damaged, destroyed or lost has been
repaired or replaced,
(4) incurred any material capital expenditures,
(5) not made or agreed to make any change in the compensation
payable to any Employee, except for increases in compensation in the
ordinary course of business substantially consistent with past practices
of Sellers, or
(6) not granted credit to any customer on terms materially more
favorable than the terms on which credit has been extended to such customer
in the past.
(j) SUBSIDIARIES. There is no corporation, partnership, joint
venture, business trust or other legal entity in which Sellers, either
directly or indirectly through one or more intermediaries, owns or holds
beneficial or record ownership of at least a majority of the outstanding
voting shares.
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(k) MATERIAL CONTRACTS, ETC. EXHIBIT I attached hereto and made a
part hereof lists all contracts, agreements and instruments material to the
Business of Sellers except the following:
(1) employment agreements terminable at will and contracts for
miscellaneous services terminable at will without the payment of any
penalty,
(2) purchase orders and contracts with suppliers and customers
entered into in the ordinary course of business that relate to a single
transaction or that can be terminated by either party upon notice, and
(3) miscellaneous contracts, agreements and instruments (with
Persons unaffiliated with Sellers) involving liabilities under all such
contracts, leases, agreements and instruments of not more than $10,000 in
the aggregate.
Sellers have heretofore delivered, or made available, to Purchaser or its
counsel complete copies of all contracts, agreements and instruments listed
on EXHIBIT I.
Sellers are not parties to any agreement, contract or covenant
limiting the freedom of Sellers or any party contracting with Sellers from
competing in any line of business or with any Person in any geographic area.
(l) LICENSES AND PERMITS. [RESERVED]
(m) ABSENCE OF CERTAIN BUSINESS PRACTICES. Neither Sellers nor
any officer, employee or agent of XxXxxxxx Smelting, nor any other Person
acting on behalf of Sellers, has, directly or indirectly, within the past
five years, given or agreed to give any gift or similar benefit to any
customer, supplier, government employee or other Person who is or may be in a
position to help or hinder the business of Sellers (or to assist Sellers in
connection with any actual or proposed transaction) which (1) might subject
Sellers to any damage or penalty in any civil, criminal or governmental
litigation or proceeding, (2) if not given in the past, might have had a
Material Adverse Effect on the assets, business or operations of Sellers as
reflected in its December 31, 1996 financial Statements, or (3) if not
continued in the future, might materially adversely effect the assets,
business operations or prospects of Sellers or which might subject Sellers to
suit or penalty in a private or governmental litigation or proceeding.
(n) ENVIRONMENTAL MATTERS. Sellers have no knowledge of facts
that would give rise to violations of the Environmental Laws that have not
been disclosed to Purchaser and the appropriate Governmental Bodies.
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(o) NO COLLECTIVE BARGAINING AGREEMENT. There are no collective
bargaining agreements in place for any employees at the Collection Facility.
No labor unions represent, purport to represent or attempt to represent any
employees in the operation of the Business.
(p) TAXES.
(1) Sellers have (or by the closing or within thirty (30) days
after Closing will have) duly and timely filed all tax returns relating to
the Business with respect to any federal income, ad valorem, payroll,
healthcare, withholding, or other similar tax, duty or other governmental
charge, and Seller have paid all such taxes, duties and charges and
assessments thereof or deficiencies therein (including all interest and
penalties thereon) (collectively, "Taxes"), except for Taxes set forth on
EXHIBIT J hereof. Except as otherwise set forth on EXHIBIT J all Taxes
required to be withheld by, or on behalf of Sellers in connection with
amounts paid or owing to any employee, independent contractor, creditor or
other party with respect to the Business (withholding taxes) have been
withheld, and such withheld taxes have either been duly and timely paid to
the proper governmental authorities or set aside in accounts for such
purpose.
(2) Except as otherwise disclosed to Purchaser, no agreement
or other document extending or having the effect of extending the period
of assessment or collection of any Taxes, and no power of attorney with
respect to any such Taxes has been filed with the Internal Revenue
Service or any other governmental authority.
(3) Purchaser will not be required to deduct and withhold any
amount pursuant to Section 1445(a) of the Code upon the transfer of the
Business to such Purchaser.
(4) Except as otherwise set forth on EXHIBIT H, there is no
litigation or administrative appeal pending or to the best knowledge of
Sellers, threatened against or relating to Seller in connection with any
Taxes.
(q) ABSENCE OF UNDISCLOSED LIABILITIES. Sellers have no
liabilities or obligations of any nature, whether known or unknown, absolute,
accrued, contingent or otherwise and whether due or to become due, arising
out of or relating to the Business except (i) as set forth on EXHIBIT K
hereto, (ii) as and to the extent disclosed or reserved against in the
Balance Sheets (excluding the notes thereto) and (iii) liabilities and
obligations that (A) that were incurred after the date of the Balance Sheets
in the ordinary course of business consistent with prior practice, (B)
individually and in the aggregate are not material to the Business and have
not had or
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resulted in, and will not have or result in, a material adverse affect on the
Business, and (C) interest accrual on Sellers' indebtedness.
2.2 REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser represents
and warrants to Sellers that the following are true and correct on and as of
the date of this Agreement and will be true and correct through the Effective
Time of Closing as if made on and as of that date:
(a) CORPORATE STATUS OF PURCHASER. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Texas and is qualified to transact business and is in good standing
as a foreign corporation in the jurisdictions where it is required to qualify
in order to conduct its business as presently conducted. Purchaser has the
corporate power and authority to own, lease or operate all properties and
assets now owned, leased or operated by it and to carry on its businesses as
now conducted.
(b) CONSENTS, AUTHORIZATIONS AND BINDING EFFECT.
(1) Purchaser may execute, deliver and perform this Agreement
without the necessity of Purchaser obtaining any consent, approval,
authorization or waiver, except for consents, approvals, authorizations and
waivers which have been obtained and are unconditional and are in full
force and effect.
(2) The execution, delivery and performance of this Agreement do
not and will not:
(i) constitute a violation of the Articles of
Incorporation, as amended, or the Bylaws, as amended, as the case may
be, of Purchaser,
(ii) constitute a violation of any statute, judgment,
order, decree or regulation or rule of any court, governmental authority
or arbitrator applicable or relating to Purchaser, or
(iii) constitute a default under any contract to which
Purchaser is a party except where such default would not have a Material
Adverse Effect upon the ability of Purchaser to perform its obligations
under this Agreement.
(c) AUTHORIZATION. This Agreement has been duly authorized, executed
and delivered by Purchaser. This Agreement constitutes the legal, valid and
binding obligation of Purchaser, enforceable in accordance with its terms,
except as may be
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limited by bankruptcy, reorganization, insolvency and similar laws of
general application relating to or affecting the enforcement of rights of
creditors.
ARTICLE 3
CONDITIONS OF CLOSING
3.1 PURCHASER'S CONDITIONS OF CLOSING. The obligations of Purchaser to
consummate the purchase and sale under this Agreement are subject to the
satisfaction of the following conditions:
(a) DELIVERY OF INSTRUMENTS. Sellers shall deliver to Purchaser
the duly authorized and executed General Conveyance, Transfer and Assignment,
the Lease and such other conveyance documents as Purchaser may reasonably
request to effect the transfer and conveyance of the Business to Purchaser.
(b) CONSENTS, NOTICES AND APPROVALS. Sellers shall deliver to
Purchaser all consents and approvals of all Persons necessary for the
consummation of the Transaction under Sellers' articles of incorporation or
bylaws or any agreement, permit, law or regulation.
(c) LEGAL OPINION. Sellers shall have obtained the legal opinion
of Seller's counsel in form and substance reasonably satisfactory to
Purchaser and its counsel.
(d) REPRESENTATIONS WARRANTIES AND COVENANTS. All representations
and warranties of Sellers contained in this Agreement shall be true and
correct at and as of the Closing. Sellers shall have complied in all
material respects with all covenants required to be performed by Sellers
prior to the Closing. On the Closing Date, XxXxxxxx'x Smelting's President
and Xxxxx shall deliver a certificate dated as of the Closing Date to the
effect that the representations and warranties of Sellers contained in this
Agreement are true and correct in all material respects.
(e) APPROVAL OF REMEDIATION PLAN. The Settlement Agreement(s)
shall have been approved by the United States Department of Justice, the
Environmental Protection Agency and the Texas National Resource Conservation
Commission in form and content satisfactory to Purchaser, in its sole
discretion, and no material modification shall be made to the Settlement
Agreement(s) following the public hearing to be held thirty (30) days after
the execution of the Settlement Agreement(s).
(f) ADVERSE CHANGE. No Material Adverse Effect in the results of
operations, financial condition or prospects of the Collection Facility shall
have occurred, and the Assets shall not have suffered any material adverse
change, loss, or damage, whether or not covered by insurance.
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(g) LEGAL ACTIONS OR PROCEEDINGS. No action or proceeding before
a court or other governmental agency or body shall have been instituted with
threatened restrain or prohibit the consummation of the transactions
contemplated by this Agreement, and no governmental agency or body shall have
taken any other action or made any request of Sellers or Purchaser as a
result of which Purchaser deems it inadvisable to proceed with the
transactions contemplated hereunder.
(h) LEASEHOLD TITLE INSURANCE POLICY. Sellers shall obtain, at
their sole cost and expense, a leasehold title insurance policy issued
through Republic Title of Texas, Inc. covering Purchaser's leasehold interest
in the real property. The Leasehold Title Insurance Policy shall contain no
exceptions other than the standard printed exceptions and other exceptions
approved by Purchaser in writing.
(i) NONDISTURBANCE AGREEMENT. If the real property that is the
subject of the Lease is encumbered by one or more mortgages, Sellers shall
deliver to Purchaser a nondisturbance agreement executed by the holders of
all mortgages covering said property. All nondisturbance agreements obtained
by Sellers shall be satisfactory to Purchaser in form and content.
(j) CERTIFICATE OF OCCUPANCY. The Purchaser shall have received a
certificate of Occupancy from the City of XxXxxxxx.
3.2 SELLERS' CONDITIONS TO CLOSING. The obligations of Sellers to
consummate the purchaser and sale under this Agreement are subject to the
satisfaction of the following conditions:
(a) PURCHASE PRICE AND OTHER PAYMENTS. Purchaser shall deliver to
Seller the Purchase Price, reduced by the Holdback Amount and the other
payments described in Section 1.4 hereof.
(b) REPRESENTATIONS AND WARRANTIES. All representations and
warranties of Purchaser contained in this Agreement shall be true and correct
at and as of the Closing. On the Closing Date, Purchaser's President shall
deliver a certificate dated as of the Closing Date to the effect that the
representations and warranties of Purchaser contained in this Agreement are
true and correct in all material respects.
(c) LEGAL ACTIONS OR PROCEEDINGS. No action or proceeding before
a court or other governmental agency or body shall have been instituted with
threatened restrain or prohibit the consummation of the transactions
contemplated by this Agreement, and no governmental agency or body shall have
taken any other action or made any request of Sellers or Sellers as a result
of which Sellers deem it inadvisable to proceed with the transactions
contemplated hereunder.
(d) LEASE. Purchaser shall have executed and delivered the Lease.
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ARTICLE 4
CLOSING DATE AND EFFECTIVE DATE
4.1 CLOSING DATE. The closing for the consummation of the purchase and
sale contemplated by this Agreement (the "Closing") shall take place at the
offices of Xxxxxx, Sweet & Xxxxxxx, L.L.P., in Dallas, Texas at 10:00 a.m.,
Dallas, Texas time on such date and time that the parties' conditions to
Closing are satisfied (the "Closing Date").
4.2 EFFECTIVE DATE. For all purposes hereof, the term "the Effective
Time of Closing" shall occur upon the delivery to Purchaser of the Lease, the
General Conveyance, Transfer and Assignment, and the other Operative
Documents as contemplated herein on the Closing Date.
ARTICLE 5
COVENANTS
5.1 COVENANTS OF SELLERS. Seller hereby agrees to the following
covenants, which shall, to the extent provided therein, survive the Closing:
(a) CONDUCT OF THE BUSINESS. From the date hereof to the Closing
Date, except as expressly permitted or required by this Agreement or as
otherwise consented to by the Purchaser in writing, Sellers will:
(1) carry on the Business in, and only in, the ordinary
course, in substantially the same manner as heretofore conducted, and use all
reasonable efforts to preserve intact its present business organization,
maintain its properties in good operating condition and repair, keep
available the services of its present officers and significant employees, and
preserve its relationship with customers, suppliers and others having
business dealings with it, to the end that the goodwill and on-going business
relationships of the Business shall be in all material respects unimpaired
following the Closing;
(2) pay accounts payable and other obligations of the
Business when they become due and payable in the ordinary course of business
consistent with prior practice;
(3) perform in all material respects all of its obligations
under all contracts and other agreements and instruments relating to or
affecting the Business or the Assets, and comply in all material respects
with all laws applicable to the Business;
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(4) not enter into or assume any material agreement, contract
or instrument relating to the Business, or enter into or permit any material
amendment, supplement, waiver or other modification in respect thereof;
(5) not grant (or commit to grant) any increase in the
compensation (including incentive or bonus compensation) of any employee
employed in the operation of the Business or institute, adopt or amend (or
commit to institute, adopt or amend) any compensation or benefit plan,
policy, program or arrangement or collective bargaining agreement applicable
to any such employee; and
(6) not take any action or omit to take any action, which
action or omission would result in a breach of any of the representations and
warranties set forth in Section 2.1(i) hereof.
(b) NO SOLICITATION. During the term of this Agreement, neither
Sellers, nor their respective Affiliates, nor any Person acting on behalf of
Sellers or their Affiliates shall (i) solicit or encourage any inquiries or
proposals for, or enter into any discussions with respect to, the acquisition
of any properties and assets held for use in connection with, necessary for
the conduct of, or otherwise material to, the Business or (ii) furnish or
cause to be furnished any non-public information concerning the Business to
any Person (other than Purchaser and its agents and representatives), other
than in the ordinary course of business or pursuant to legal requirements and
after prior written notice to the Purchaser. Sellers shall not sell,
transfer or otherwise dispose of, grant any option or proxy to any Person
with respect to, create any Lien upon, or transfer any interest in, any
Asset, other than in the ordinary course of business and consistent with this
Agreement.
(c) ACCESS AND INFORMATION.
(1) So long as this Agreement remains in effect, Sellers will
(and will cause each of their Affiliates) and their respective accountants,
counsel, consultants, employees and agents) furnish to Purchaser, Purchaser's
accountants, counsel, consultants, employees and agents, full access during
normal business hours to, and furnish them with all documents, records, work
papers and information with respect to, all of such Person's properties,
assets, books, contracts, commitments, reports and records relating to the
Business, as Purchaser shall from time to time reasonably request. In
addition, the Sellers will permit Purchaser and its accountants, counsel,
consultants, employees and agents reasonable access to such personnel of
Sellers during normal business hours as may be necessary or useful to
Purchaser in its review of the properties, assets and business affairs of the
Business and the above-mentioned documents and information. Sellers will
keep Purchaser generally informed of the affairs of the Business.
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(2) Sellers will retain all books and records relating to the
Business in accordance with Sellers' record retention policies as presently
in effect. During the seven-year period beginning on the Closing Date,
Sellers shall not dispose of or permit the disposal of any such books and
records not required to be retained under such policies without first giving
60 days' prior written notice.
(d) FURTHER ASSURANCES. Following the Closing, Sellers shall
execute and deliver such additional instruments, documents, conveyances or
assurances and take such other actions as shall be necessary, or otherwise
reasonably requested by Purchaser, to confirm and assure the rights and
obligations provided for in this Agreement and the other documents executed
in connection with the transactions contemplated hereby.
(e) LIABILITY FOR TRANSFER TAXES. Sellers shall be responsible
for the timely payment of, and shall indemnify and hold harmless Purchaser
against, all sales, use, documentary, transfer, conveyance, recording,
license and other similar taxes and fees arising out of or in connection with
or attributable to the transactions effected pursuant to this Agreement, and
the documents executed in connection herewith. Sellers shall promptly
prepare and file all returns required in respect of transfer taxes.
(f) USE OF BUSINESS NAME; NONCOMPETITION. After the Closing,
neither of the Sellers shall, directly or indirectly use, do business or
assist any third party in using or doing business under the trade names used
in the Business. Also, neither of the Sellers will engage in the scrap,
salvage, recycling or similar businesses that compete with the Business as
presently conducted within a 100 mile radius of the Collection Facility.
(g) DELIVERY OF DECEMBER 1997 BALANCE SHEET. Sellers agree to furnish
Purchaser with its December 31, 1997 balance sheet and income statement as
soon as such statements are prepared by Sellers' accountants.
5.2 COVENANTS OF PURCHASER. Purchaser hereby agrees to the following
covenants, which shall, to the extent provided therein, survive the Closing:
(a) FURTHER ASSURANCES. Following the Closing, Purchaser shall
execute and deliver such additional instruments, documents, conveyances or
assurances and take such other actions as shall be necessary, or otherwise
reasonably requested by Seller to confirm and assure the rights and
obligations provided for in this Agreement and the other documents executed
in connection with the transactions contemplated hereby.
(b) ACCESS TO INFORMATION. Purchaser shall xxxxx Xxxxxxx and
their representatives access (during normal business hours) to the books and
records of the Business for all periods prior to the Closing Date to the
extent that such access is
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necessary to enable Sellers to prepare their respective income tax returns
and for other reasonable business purposes. Sellers shall provide Purchaser
two business days's prior notice before examining the books and records of
the Business.
ARTICLE 6
INDEMNIFICATION
6.1 INDEMNITY.
(a) Subject to Section 6.1(c) hereof, Sellers hereby jointly and
severally agree to indemnify and hold Purchaser and Purchaser's officers,
directors, shareholders, Affiliates, employees and agents ("Purchaser
Indemnitees") harmless from any and all damages, losses (which shall include
any diminution in value), liabilities (joint and several), payments,
obligations, penalties, claims, litigation, demands, defenses, judgments,
suits, proceedings, costs, disbursements or expenses (including without
limitation, fees, disbursements and expenses of attorneys, accountants and
other professional advisors and of expert witnesses and costs of
investigation and preparation) of any kind or nature whatsoever (collectively
"Damages"), directly or indirectly resulting from, relating to or arising out
of:
(1) any breach of or inaccuracy in any representation or
warranty of Seller contained in Section 2.1 or in any Operative Document;
(2) any breach or non-performance, partial or total, by either
Seller of any covenant or agreement of Seller contained in this Agreement
or in any Operative Document;
(3) any liability for breach of the Environmental Laws
pertaining to matters that were not covered in the settlement agreements.
(4) the ownership, management or use of the Assets prior to the
Effective Time of Closing; the conduct of the Business prior to the
Effective Time of Closing; all contracts, agreements, obligations,
commitments and liabilities of Sellers of every kind and character relating
in any way to the assets or the business of Sellers other than any
obligations expressly assumed by Purchaser hereunder; and, all pension,
retirement, bonuses, severance pay, salaries and all other compensation
and benefits of whatsoever nature (including all liabilities to any Person
under ERISA and all liabilities to any Governmental Body) attributable to
service or to or employment by Sellers prior to the Effective Time of
Closing;
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(5) any labor organization claiming it had any right to
represent any Employees of Sellers who are employed by Purchaser subsequent
to the Closing Date of this Agreement, where such claims for representation
arise out of circumstances existing prior to the Closing Date; and
(6) any losses or costs of defending against any claims which
may be made against Purchaser by any Person claiming violations of any
local, state, or federal laws relating to employment relationships,
including, but not limited to, wages, hours, concerted activity,
nondiscrimination, occupational health and safety and the payment and
withholding of taxes, where such claims arise out of circumstances
occurring prior to the Closing Date.
(b) Subject to Section 6.1(c) hereof, Purchaser shall indemnify
and hold Sellers and Sellers' officers, directors and shareholders ("Seller
Indemnitees") harmless from, any and all Damages resulting from or arising
out of:
(1) any breach of any representation or warranty of Purchaser
contained in Section 2.2; and
(2) the non-performance, partial or total, of any covenant or
agreement of Purchaser contained in this Agreement, any Operative Document
or any instrument or agreement delivered pursuant to this Agreement.
(c) Sellers shall retain liability, and shall indemnify Purchaser,
for the payment of any tax liabilities with respect to the Assets and the
conduct of the Business during all periods ending as of or prior to the
Effective Time of Closing and the transactions contemplated by this Agreement
other than any liabilities expressly assumed by Purchaser hereunder.
6.2 NOTICE, PARTICIPATION AND DURATION.
(a) If a claim by a third party is made against a party
indemnified pursuant to this Article 6, the Indemnitee shall promptly, and in
any event within 60 days of the assertion of any claim or the discovery of
any fact upon which Indemnitee intends to base a claim for indemnification
under this Agreement ("Claim"), notify the party or parties from whom
indemnification is sought ("Indemnitor") of such Claim. In the event of any
Claim, Indemnitor, at its option, may assume (with legal counsel reasonably
acceptable to the Indemnitee) the defense of any claim, demand, lawsuit or
other proceeding in connection with the Indemnitee's Claim, and may assert
any defense of Indemnitee or Indemnitor; PROVIDED that Indemnitee shall have
the right at its own expense to participate jointly with Indemnitor in the
defense of any claim, demand, lawsuit or other proceeding in connection with
the Indemnitee's Claim. In the event that Indemnitor elects to undertake the
defense of any Claim hereunder, Indemnitee shall, at Indemnitor's expense,
cooperate with Indemnitor to the fullest
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extent possible in regard to all matters relating to the Claim (including,
without limitation, corrective actions required by applicable law, assertion
of defenses and the determination, mitigation, negotiation and settlement of
all amounts, costs, actions, penalties, damages and the like related thereto)
so as to permit Indemnitor's management of same with regard to the amount of
Damages payable by the Indemnitor hereunder. The Indemnitor shall not settle
any Claim without the prior written consent of the Indemnitee, which consent
shall not unreasonably be withheld.
6.3 INDEMNIFICATION IF NEGLIGENCE OF INDEMNITEE. The indemnification
provided in this Article 6 shall be applicable whether or not negligence of
the Indemnitee is alleged or proven.
6.4 REIMBURSEMENT. In the event that the Indemnitor shall undertake,
conduct or control the defense or settlement of any Claim and it is later
determined that such Claim was not a Claim for which the Indemnitor is
required to indemnify the Indemnitee under this Article 6, the Indemnitee
shall reimburse the Indemnitor for all its costs and expenses with respect to
such settlement or defense, including reasonable attorneys' fees and
disbursements.
6.5 NO THIRD PARTY BENEFICIARIES. The foregoing indemnification is
given solely for the purpose of protecting the parties to this Agreement and
the Purchaser Indemnitees and shall not be deemed extended to, or interpreted
in a manner to confer any benefit, right or cause of action upon, any other
Person.
6.6 OFFSET AGAINST LEASE PAYMENTS. Purchaser shall have the right to
offset from the rental payments due under the Lease any amounts which Sellers
are obligated to indemnify Purchaser under this Agreement.
ARTICLE 7
MISCELLANEOUS
7.1 FURTHER ACTIONS. From time to time, as and when requested by
Purchaser, Sellers shall execute and deliver, or cause to be executed and
delivered, such documents and instruments and shall take, or cause to be
taken, such further or other actions as may be reasonably necessary to
transfer, assign and deliver to Purchaser or its permitted assigns the
Business (or to evidence the foregoing) and to consummate and to effect the
other transactions expressly required to be performed by Seller hereunder.
7.2 NO BROKER. Sellers and Purchaser represent and warrant to the
other that they have no obligation or liability to any broker or finder by
reason of the transactions which are the subject of this Agreement. Each of
(a) Sellers and (b) Purchaser agree to indemnify the other against, and to
hold the others harmless from, at all times after
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the date hereof, any and all liabilities and expenses (including without
limitation legal fees) resulting from, related to or arising out of any claim
by any Person for brokerage commissions or finder's fees, or rights to
similar compensation, on account of services purportedly rendered on behalf
of Seller and Purchaser, as the case may be, in connection with this
Agreement or the transactions contemplated hereby.
7.3 EXPENSES. Except as otherwise specifically provided herein,
Sellers and Purchaser shall each bear their own legal fees, accounting fees
and other costs and expenses with respect to the negotiation, execution and
the delivery of this Agreement and the consummation of the transactions
hereunder, and Sellers will pay their expenses after the Effective Time of
Closing out of the Purchase Price paid by Purchaser to Sellers pursuant to
Section 1.4. Sellers shall pay all sales, transfer and documentary taxes
incident to the sale of the Business.
7.4 ENTIRE AGREEMENT. This Agreement and the Exhibits hereto, contain,
and are intended by the parties as a final expression of, the entire
agreement between Sellers and Purchaser with respect to the transactions
contemplated by this Agreement and supersede all prior oral or written
agreements, arrangements or understandings with respect thereto.
7.5 DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement
are for convenience only and shall not control or affect the meaning of
construction of any provision of this Agreement.
7.6 NOTICES. All notices or other communications which are required or
permitted hereunder shall be in writing and shall be delivered either
personally or by telegram, telex, telecopy or similar facsimile means, by
registered or certified mail (postage prepaid and return receipt requested),
or by express courier or delivery service, addressed as follows:
If to Seller: McKinney Smelting, Inc.
000 Xxxxx XxXxxxxx
XxXxxxxx, Xxxxx 00000
Telecopy No.
-------------
Xxxxxxxx X. Xxxxx
000 Xxxxx XxXxxxxx
XxXxxxxx, Xxxxx 00000
Telecopy No.
-------------
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With copies to: Xxxxx X. Xxxx, Esq.
Abernathy, Roeder, Xxxxxxxx & Joplin
000 X. Xxxxx Xx.
XxXxxxxx, Xxxxx 00000
Telecopy No. (000) 000-0000
If to Purchaser: Ferex Metals Recycling of McKinney, Inc.
15252 C.R. 1134
Tyler, TX 75709-9707
Attention: Xxxxx X. Xxxxxxxx
Telecopy No. (000) 000-0000
With copies to: Xxxxxx X. Xxxx, Esq.
Xxxxxx, Sweet & Xxxxxxx, L.L.P.
0000 X. Xxxxxxx Xxxxxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Telecopy No. (000) 000-0000
or such other address and number as either party shall have previously
designated by written notice given to the other party in the manner
hereinabove set forth. Notices shall be deemed given when received, if sent
by telegram, telex, telecopy or similar facsimile means (confirmation of such
receipt by confirmed facsimile transmission being deemed receipt of
communications sent by telex, telecopy or other facsimile means); and when
delivered and receipted for when sent by registered or certified mail.
7.7 APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Texas without giving
effect to the rules of conflicts of law.
7.8 ASSIGNABILITY. This Agreement shall not be assignable by Sellers
without the prior written consent of Purchaser. Purchaser shall have the
right to assign this Agreement to a wholly-owned subsidiary. Any other
assignments by Purchaser shall require the prior written consent of Sellers.
Any purported assignments by Purchaser contrary to the terms of this
Agreement shall be void.
7.9 WAIVERS AND AMENDMENTS. Any waiver of any term or condition of
this Agreement, or any amendment or supplementation of this Agreement, shall
be effective only if in writing. A waiver of any breach or failure to
enforce any of the terms or conditions of this Agreement shall not in any way
affect, limit or waive a
-25-
party's rights hereunder at any time to enforce strict compliance thereafter
with every term or condition of this Agreement.
7.10 THIRD PARTY RIGHTS. Notwithstanding any other provision of this
Agreement, this Agreement shall not create benefits on behalf of any Person
who is not a party to this Agreement (including without limitation any broker
or finder, notwithstanding the provisions of Section 7.2 hereof), and this
Agreement shall be effective only as between the parties hereto, their
successors and permitted assigns; PROVIDED, HOWEVER, that Purchaser
Indemnitees are intended third party beneficiaries hereof to the extent
provided in Sections 6.1 and 6.5.
7.11 ILLEGALITIES. In the event that any provision contained in this
Agreement shall be determined to be invalid, illegal or unenforceable in any
respect for any reason, the validity, legality and enforceability of any such
provision in every other respect and the remaining provisions of this
Agreement shall not, at the election of the party for whose benefit the
provision exists, be in any way impaired.
7.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an
original instrument, but all such counterparts together shall constitute but
one Agreement.
7.13 SURVIVAL; EXCLUSIVITY OF REMEDIES. The representations and
warranties, covenants and agreements of the parties hereto shall survive the
Closing, and the indemnification provided by Section 6.1 shall not be the
exclusive remedy available to the parties hereto.
7.14 EMPLOYEES.
(a) Sellers will permit Purchaser to offer employment to some or
all of the Employees prior to or on the Effective Date of Closing, and
Purchaser will inform Sellers of the names of any Employees who are offered
employment and of any Employees whom it employs. Purchaser shall have full
and absolute discretion in determining the terms, conditions and benefits
relating to such employment.
(b) Nothing contained in this Agreement shall obligate Purchaser
to continue the employment of any Employee. Nothing in this Section 7.14 is
intended to create any claim or right on the part of any employee of Sellers
and no such employee shall be entitled to assert any claim or right hereunder.
7.15 ACCESS TO RECORDS.
(a) Following the Effective Time of Closing, Purchaser shall give
to Sellers free and unrestricted access to (and the right to make copies at
the expense of Sellers) the Records and to the extent that such were
purchased by Purchaser
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hereunder and relate to the business, operations, income, expenses and assets
of Sellers existing on, accruing or arising prior to or occurring prior to
Effective Time of Closing, but any access pursuant to this Section 7.15 shall
be conducted in such manner as not to interfere unreasonably with the
operations of the Business following the Effective Time of Closing.
(b) Following the Effective Time of Closing, Sellers shall give to
Purchaser free and unrestricted access to (and the right to make copies at
the expense of Purchaser) the books, files, records and tax returns and
supporting schedules and work papers of Sellers to the extent that such
relate to the business, operations, income, expenses and assets of Sellers
existing on, accruing or arising prior to or occurring prior to the Effective
Time of Closing, but any access pursuant to this Section 7.15 shall be
conducted in such manner as not to interfere unreasonably with the operations
of the business of Seller following the Effective Time of Closing.
7.16 PRORATION. Notwithstanding anything to the contrary contained
elsewhere herein, ad valorem taxes on the Real Property shall be pro rated
between Sellers and Purchaser effective as of the Closing Date.
ARTICLE 8
DEFAULT AND TERMINATION
In the event any of the conditions required for the Closing of the
Transaction shall not have been met prior to the Closing Date (as the Closing
Date may be extended by the parties), for any reason other than the failure
of a party to perform its obligations under this Agreement, this Agreement
shall terminate, and the parties shall have no further obligations or
liabilities one to the other hereunder. If the Transaction is not
consummated by reason of a default by Sellers in the performance of any of
their respective obligations hereunder Purchaser may enforce specific
performance of this Agreement or exercise any other rights or remedies
available to Purchaser at law or in equity. The parties shall have the right
to terminate this Agreement by their mutual written consent.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
PURCHASER:
FEREX METALS RECYCLING OF XXXXXXXX, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Xxxxx X. Xxxxxxxx
Chairman of the Board
SELLER:
XXXXXXXX SMELTING, INC.
By: /s/ XXXXXXXX X. XXXXX
---------------------------
Name:
---------------------------
Title: Pres
---------------------------
/s/ XXXXXXXX X. XXXXX
-------------------------------
XXXXXXXX X. XXXXX, Individually
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