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Exhibit 4.11
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
METAL MANAGEMENT, INC.
HCS ACQUISITION, INC.
HOUSTON COMPRESSED STEEL CORP.
AND
THE SHAREHOLDERS OF
HOUSTON COMPRESSED STEEL CORP.
DATED DECEMBER 11, 1997
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement") is dated as of
December 11, 1997, by and among Metal Management, Inc., a Delaware corporation
("MTLM"), HCS Acquisition, Inc., a Texas corporation ("Acquisition"), Houston
Compressed Steel Corp., a Texas corporation (the "Company"), and the
shareholders of the Company set forth on the signature page hereof
(collectively the "Shareholders").
W I T N E S S E T H:
WHEREAS, the Shareholders are holders of all of the issued and outstanding
common stock of the Company ("Company Common Stock");
WHEREAS, MTLM proposes to acquire the Company through a merger of
Acquisition, its wholly-owned subsidiary corporation, with and into the Company
(the "Merger") pursuant to which the shares of Common Stock of the Company
would be converted into Common Stock of MTLM ("Common Stock"), on the terms and
conditions set forth herein;
WHEREAS, the parties hereto wish to set forth the representations,
warranties, agreements and conditions under which a merger (the "Merger") of
Acquisition with and into the Company will occur; and
WHEREAS, the parties intend for the Merger to be a tax-free reorganization
under Section 368(a)(2)(E) of the Code.
NOW, THEREFORE, in consideration of the premises, the representations,
warranties and agreements herein contained and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto hereby agree as follows:
I.
THE MERGER AND RELATED MATTERS
A. MERGER
1. Upon the terms and subject to the conditions of this
Agreement, Acquisition shall be merged with and into the Company in accordance
with the Texas Business Corporation Act ("TBCA"). The Company shall be the
surviving corporation in the Merger (the "Surviving Corporation"). The
Surviving Corporation shall continue its corporate existence under and be
organized under and be governed by the TBCA and possess all the rights and
assets of Acquisition and the Company and be subject to all of
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the liabilities and obligations of Acquisition and the Company in accordance
with the provisions of the TBCA.
1. The Articles of Incorporation and the Bylaws of Acquisition, as
in effect immediately prior to the date and time when the Merger shall
become effective (the "Effective Time"), shall be the Articles of Incorporation
and Bylaws, respectively, of the Surviving Corporation until thereafter
amended, except that Article One of the Articles of Incorporation of
Acquisition shall be amended to change the name of Acquisition to "Houston
Compressed Steel Corp."
1. The directors of Acquisition immediately prior to the Effective
Time shall be the directors of the Surviving Corporation and the officers
of the Company immediately prior to the Effective Date shall be the officers of
the Surviving Corporation, each to hold office from the Effective Time until
their respective successors are duly elected or appointed and qualified in the
manner provided in the Bylaws of the Surviving Corporation, or as otherwise
provided by law.
1. The Merger shall have the effects set forth in the TBCA. If at
any time after the Effective Time, the Surviving Corporation shall
consider or be advised that any further assignments or assurances in law or
otherwise are necessary or desirable to vest, perfect or confirm, of record or
otherwise, in the Surviving Corporation, all rights, title and interests in all
personal property and all privileges, powers and franchises of the Company and
Acquisition, the Surviving Corporation and its proper officers and directors,
in the name and on behalf of the Company and Acquisition, shall execute and
deliver all such proper assignments and assurances in law and do all things
necessary and proper to vest, perfect or confirm title to such property or
rights in the Surviving Corporation and otherwise to carry out the purpose of
this Agreement, and the proper officers and directors of the Surviving
Corporation are fully authorized in the name of the Company or otherwise to
take any and all such action. It is acknowledged and agreed that prior to the
Merger, the Company may, without notice or consent, transfer all of its real
property, improvements, fixtures and its interest in Heights Armature Works to
a third party (or related party), such that the Surviving Corporation shall
have no interest in any such assets.
A. CLOSING AND EFFECTIVE TIME. Subject to the provisions of
Article VI and Article VII hereof, the closing (the "Closing") of the Merger
shall take place at 9:00 a.m., Houston time, on a date to be designated by all
parties hereto (at least three business days in advance), at the offices of
Xxxxxx & Xxxxxx L.L.P., 0000 Xxxxxx, Xxxxxxx, Xxxxx, or if any of the
conditions set forth in Article VI or Article VII hereof have not been
satisfied, then as soon as practicable thereafter, or at such other time and
place or such other date as MTLM and the Company shall agree (the "Effective
Time"). The Merger shall be effective when properly executed Articles of
Merger (together with any other documents required by law to effectuate the
Merger) shall have been filed with the Secretary of State of the State of Texas
in accordance with the provisions of the TBCA, which filing shall be made as
soon as practical on or after the Effective Time.
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A. CONVERSION OF STOCK.
1. At the Effective Time, by virtue of the Merger and without any
action on the part of any holder of any shares of Company Common Stock, the
four (4) shares of Company Common Stock outstanding immediately prior to the
Effective Time shall be converted into the right to receive, and shall be
immediately exchangeable for, upon the surrender to MTLM at the Closing of the
certificates formerly representing such shares, an aggregate number of shares
of MTLM Common Stock equal to 253,176 shares. The shares of MTLM Common Stock
to be issued to the Shareholders is herein called the "Merger Consideration"
and shall be issued and delivered to the Shareholders free and clear of all
Liens and claims. At the time of Closing, ten percent (10%) of the Merger
Consideration shall be placed in escrow pursuant to an Escrow Agreement (the
"Escrow Shares"), the form of which Escrow Agreement is attached hereto as
Exhibit A and made a part hereof.
1. No fractional shares of MTLM Common Stock shall be issued to any
holder of Company Common Stock in the Merger. To the extent the
application of the conversion rate to all shares of Company Common Stock held
by a Shareholder would result in a fractional number of shares of MTLM Common
Stock being issued to such holder in the Merger, the number of shares of MTLM
Common Stock issuable to such holder in respect of all such shares in the
Merger shall be rounded up to the next whole number of shares of MTLM Common
Stock.
1. Each share of Acquisition Common Stock outstanding immediately
prior to the Effective Time shall be converted into one share of stock in
the Surviving Corporation.
1. As of and after the Effective Time, no holder of any certificate
that immediately prior to the Effective Time represented shares of Company
Common Stock shall have any rights as a holder of Company Common Stock other
than to receive his pro rata part of the Merger Consideration issuable pursuant
to the Merger.
A. ESCROW.
The Escrow Shares will be held under the Escrow Agreement for a period of
one year, in accordance with the terms and provisions of the Escrow Agreement.
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A. EXCHANGE.
At the Closing, each Shareholder shall surrender to MTLM the certificates
for Company Common Stock owned by such Shareholder and each Shareholder shall
receive one or more certificates (with all appropriate legends) representing
such Shareholder's pro rata share of the Merger Consideration. Until so
surrendered, certificates for shares of Company Common Stock shall represent,
after the Effective Time, solely the right to receive the Merger Consideration
issuable in respect of such shares determined pursuant to Section 1.3 hereof.
I.
REPRESENTATIONS AND WARRANTIES
OF MTLM AND ACQUISITION
As a material inducement to the Company and the Shareholders to enter into
this Agreement and to consummate the transactions contemplated hereby, MTLM and
Acquisition make the following representations and warranties to the Company
and the Shareholders:
A. CORPORATE STATUS. MTLM is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware. Acquisition is a corporation duly organized, validly existing and in
good standing under the laws of the State of Texas.
A. CORPORATE POWER AND AUTHORITY. MTLM and Acquisition have, or
will have at the time of Closing, the corporate power and authority to
execute and deliver this Agreement, to perform their obligations hereunder and
to consummate the transactions contemplated hereby. MTLM and Acquisition have,
or will have at the time of Closing, taken all action necessary to authorize
their execution and delivery of this Agreement, the performance of its
obligations hereunder and the consummation of the transactions contemplated
hereby; including, without limitation, approval of their respective boards of
directors. MTLM and Acquisition each have the corporate power and authority to
own or lease their respective properties and to carry on their businesses as
now being conducted.
A. ENFORCEABILITY. This Agreement has been, or will have been at
the time of Closing, duly executed and delivered by MTLM and Acquisition
and constitutes a legal, valid and binding obligation of MTLM and Acquisition,
enforceable against them in accordance with its terms, except as the same may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and
general equitable principles regardless of whether such enforceability is
considered in a proceeding at law or in equity.
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A. NO COMMISSIONS. MTLM and Acquisition have incurred no
obligation for any finder's or broker's or agent's fees or commissions or
similar compensation in connection with the transactions contemplated hereby.
A. SEC FILINGS AND FINANCIAL INFORMATION. MTLM has timely made
all filings required to be made by it with the SEC (as defined herein).
None of such filings contains any untrue statement of material fact or omits to
state a material fact necessary to make the statements therein not misleading
in light of the circumstances in which they were made. Between the first and
second anniversary of the Closing, MTLM will use its best efforts to timely
file all SEC reports required to maintain trading of its shares under SEC Rule
144; provided, however, the sale of shares of MTLM Common Stock pursuant to
Rule 144 may be subject to necessary blackout periods for pending acquisitions
and other corporate events.
A. FINANCIAL INFORMATION. MTLM has delivered to the Company true
copies of the following: (i) its annual report on Form 10-K for the most
recent year end; (ii) all Form 8-K's for the past twelve months; (iii) its
quarterly reports on Form 10-Q for the three most recently ended calendar
quarters; (iv) its proxy statement dated November 20, 1997; and (v) all
exhibits filed with such documents. The foregoing documents, as of their
respective dates, did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading. Since November 24, 1997 (the
"Report Date"), there has not been any material adverse change in the business,
properties, financial condition or prospects of MTLM. Acquisition has
conducted no business prior to the Effective Date.
A. RELATED PARTY MATTERS. All material Contracts between MTLM and
any of its Affiliates are disclosed in public SEC filings, except as set
forth on Schedule 2.7.
A. TAXATION. MTLM has prepared and filed with the appropriate
governmental agencies all federal, state and local tax returns required to
be filed by it and has paid all taxes shown thereon to be payable or which have
become due pursuant to any assessment, deficiency notice or similar notice
received by it. MTLM is not a party to any pending action or proceeding by any
governmental authority for assessment or collection of taxes and no claim
therefor has been asserted against it.
A. MTLM STOCK. The MTLM common stock to be issued pursuant to
Section 1.3, above, is validly issued and authorized and shall be issued and
delivered free and clear of all Liens, claims and encumbrances and MTLM is not
a party to any agreement creating rights in any person with respect to such
shares of stock (other than this Agreement) or relating to the voting thereof.
The registration rights given to the Shareholders in Article IX hereof are
enforceable according to their terms.
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A. FINANCIAL AND BUSINESS. Acquisition has no material assets or
liabilities other than the stock it is acquiring in the Company. All of
the issued and outstanding capital stock of Acquisition is owned by MTLM.
A. OTHER AGREEMENTS. Neither MTLM nor Acquisition is a party to,
bound by or otherwise subject to any contract or agreement which would
conflict with or violate any covenant of MTLM and/or Acquisition in this
Agreement or documents delivered in connection herewith; including, without
limitation, the provisions of Article IX hereof.
A. LITIGATION. Except as set forth on Schedule 2.12, there is no
action, suit or other legal or administrative proceeding or governmental
investigation, pending or, to the Knowledge of MTLM, threatened against, by or
affecting MTLM or any of its properties or assets, or which question the
validity or enforceability of this Agreement or the transactions contemplated
hereby, and there is no reasonable basis for any of the foregoing. There are
no outstanding orders, decrees or stipulations issued by any Governmental
Authority in any proceeding to which MTLM is or was a party which have not been
complied with in full or which continue to impose any material obligations on
MTLM.
A. NO VIOLATION. The execution and delivery of this Agreement by
MTLM and Acquisition and the performance of their obligations hereunder
will not (i) contravene any provision of their charter or bylaws, (ii) violate
any law, statute, ordinance, rule, regulation, decree, writ, injunction,
judgment or order of any Governmental Authority or (iii) require the consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Authority, any court or tribunal or any other Person, except any
SEC and other filings required to be made by MTLM.
I.
REPRESENTATIONS AND WARRANTIES
OF THE SHAREHOLDERS
As a material inducement to MTLM to enter into this Agreement and to
consummate the transactions contemplated hereby, each of the Shareholders
hereby jointly and severally make the following representations and warranties
to MTLM.
A. CORPORATE STATUS. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Texas.
The Company has the requisite power and authority to own or lease its property
and to carry on its business as now being conducted. The Company is legally
qualified to transact business in all jurisdictions where the nature of its
property and the conduct of its business requires such qualification (all of
which jurisdictions are listed on Schedule 3.1) and is in good standing in each
of the jurisdictions in which it is so qualified, except where the failure to
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be so qualified would not have a Material Adverse Effect on the Company. There
is no pending or, to the knowledge of the Shareholders, threatened proceeding
for the dissolution, liquidation, insolvency or rehabilitation of the Company.
A. POWER AND AUTHORITY. The Company and each of the Shareholders
has the power and authority to execute and deliver this Agreement, to perform
its and their respective obligations hereunder and to consummate the
transactions contemplated hereby. The Company has taken all action necessary
to authorize the execution and delivery of this Agreement, the performance of
its obligations hereunder and the consummation of the transactions contemplated
hereby. Each of the Shareholders is a resident of the State of Texas and has
the requisite competence to execute and deliver this Agreement and to perform
his obligations hereunder and to consummate the transactions contemplated
hereby.
A. ENFORCEABILITY. This Agreement has been duly executed and
delivered by the Company and each of the Shareholders and constitutes
the legal, valid and binding obligation of each of them, enforceable against
them in accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and general equitable
principles regardless of whether such enforceability is considered in a
proceeding at law or in equity.
A. CAPITALIZATION. Schedule 3.4 sets forth, with respect to the
Company: (i) the number of authorized shares of each class of its capital
stock, (ii) the number of issued and outstanding shares of each class of its
capital stock, and (iii) the number of shares of each class of its capital
stock which are held in treasury. All of the issued and outstanding shares of
capital stock of the Company (i) have been duly authorized and validly issued
and are fully paid and non-assessable, (ii) were issued in compliance with all
applicable state and federal securities laws, and (iii) were not issued in
violation of any preemptive rights or rights of first refusal. No preemptive
rights or rights of first refusal exist with respect to the shares of capital
stock of the Company and no such rights arise by virtue of or in connection
with the transactions contemplated hereby. There are no outstanding or
authorized rights, options, warrants, convertible securities, subscription
rights, conversion rights, exchange rights or other agreements or commitments
of any kind that could require the Company to issue or sell any shares of its
capital stock (or securities convertible into or exchangeable for shares of its
capital stock). There are no outstanding stock appreciation, phantom stock,
profit participation or other similar rights with respect to the Company.
There are no proxies, voting rights or other agreements or understandings with
respect to the voting or transfer of the capital stock of the Company. The
Company is not obligated to redeem or otherwise acquire any of its outstanding
shares of capital stock.
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A. SHAREHOLDERS OF THE COMPANY. Schedule 3.5 sets forth, with
respect to the Company, (i) the name, address and federal taxpayer
identification number of, and the number of outstanding shares of each class of
its capital stock owned by each shareholder of record as of the close of
business on the date of this Agreement; and (ii) the name, address and federal
taxpayer identification number of, and number of shares of each class of its
capital stock beneficially owned by, each beneficial owner of outstanding
shares of capital stock (to the extent that record and beneficial ownership is
different). The Shareholders are the holders of all issued and outstanding
shares of capital stock of the Company and the Shareholders own such shares as
set forth on Schedule 3.5, free and clear of all Liens, restrictions and claims
of any kind, except as set forth on Schedule 3.5. Such shares are not subject
to any voting trust agreement, proxy or other Contract.
A. NO VIOLATION. Except as set forth on Schedule 3.6 and any
applicable requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976 and the rules and regulations promulgated thereunder (the "HSR
Act"), the execution and delivery of this Agreement by the Company and the
Shareholders, the performance by each of them of their respective obligations
hereunder and the consummation by them of the transactions contemplated by this
Agreement will not (i) contravene any provision of the articles of
incorporation or bylaws of the Company, (ii) violate any law, statute,
ordinance, rule, regulation, decree, writ, injunction, judgment or order of any
Governmental Authority or of any arbitration award which is either applicable
to, binding upon or enforceable against the Company or the Shareholders; (iii)
result in any breach of, or constitute a default (or an event which would, with
the passage of time or the giving of notice or both, constitute a default)
under, or give rise to a right to terminate, amend, modify, abandon or
accelerate, any Contract which is applicable to, binding upon or enforceable
against the Company or the Shareholders, (iv) result in or require the creation
or imposition of any Lien upon or with respect to any of the property or assets
of the Company, or (v) require the consent, approval, authorization or permit
of, or filing with or notification to, any Governmental Authority, any court or
tribunal or any other Person, except any SEC and other filings required to be
made by MTLM.
A. RECORDS. The copies of the respective articles of
incorporation and bylaws of the Company which were or will be provided
to MTLM are true and complete and reflect all amendments made through the date
of this Agreement. The minute books for the Company made available to MTLM for
review were true and complete as of the date of such review, no further entries
have been made through the date of this Agreement, such minute books contain
the true signatures of the persons purporting to have signed them, and such
minute books contain an accurate record of all material corporate actions of
the shareholders and directors (and any committees thereof) of the Company
taken by written consent or at a meeting since incorporation. All corporate
actions taken by the Company requiring board of directors' approval have been
duly authorized or ratified. All accounts, books, ledgers and official and
other records of the Company have been fully, properly and accurately kept and
completed in all material respects, and there are no material inaccuracies or
discrepancies of any kind contained
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therein. The stock ledgers of the Company, as previously made available to
MTLM, contain accurate and complete records of all issuances, transfers and
cancellations of shares of the capital stock of the Company.
A. SUBSIDIARIES. Except as set forth on Schedule 3.8, the Company
does not, as of the Closing, own, directly or indirectly, any outstanding
voting securities of or other interests in, or control, any other corporation,
partnership, joint venture or other business entity. Except as set forth on
Schedule 3.8, the Company does not have any liabilities or obligations, whether
accrued, absolute, contingent or otherwise, arising from its interest in the
entities set forth on such schedule.
A. FINANCIAL STATEMENTS. The Shareholders have delivered to MTLM
(i) the consolidated financial statements of the Company as of May 31, 1996 and
1995, including the notes thereto, audited by Xxxxxxx, Xxxxxxxxx & Co., Inc.
and (ii) the May 31, 1997 consolidated financial statements including footnotes
of the Company, "reviewed" by Xxxxxxx, Xxxxxxxx & Co., P.C., and the September
30, 1997 consolidated financial statement including footnotes of the Company
(collectively, the "Financial Statements"), copies of which are attached as
Schedule 3.9 hereto. The balance sheet dated as of September 30, 1997 included
in the Financial Statements is referred to herein as the "Current Balance
Sheet". The Financial Statements fairly present the consolidated financial
condition of the Company at each of the balance sheet dates and the results of
operations for the periods covered thereby, and have been prepared in
accordance with GAAP consistently applied for the periods indicated; provided,
however, the September 30, 1997 consolidated financial statement has not been
"reviewed" by the Company's independent accountants as to its compliance with
GAAP. The Financial Statements of the Company fairly reflect the transactions,
properties, assets and liabilities of the Company. There are no material
special or non-recurring items of income or expense during the periods covered
by the Financial Statements, and the balance sheets included in the Financial
Statements do not reflect any writeup or revaluation increasing the book value
of any assets, except as specifically disclosed in the notes thereto in
accordance with GAAP consistently applied throughout the periods indicated. The
Financial Statements reflect all adjustments necessary for a fair presentation
of the financial information contained therein.
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A. CHANGES SINCE THE CURRENT BALANCE SHEET DATE. Except as
disclosed in Schedule 3.10, or elsewhere in this Agreement, since the date
of the Current Balance Sheet, the Company has not (i) issued any capital stock
or other securities; (ii) made any distribution of or with respect to its
capital stock or other securities or purchased or redeemed any of its
securities; (iii) paid any bonus to or increased the rate of compensation of
any of its officers or salaried employees or amended any other terms of
employment of such persons; (iv) sold, leased or transferred any of its
properties or assets other than in the ordinary course of business consistent
with past practice; (v) made or obligated itself to make capital expenditures
out of the ordinary course of business consistent with past practice; (vi) made
any payment in respect of its liabilities other than in the ordinary course of
business consistent with past practice; (vii) incurred any obligations or
liabilities (including any indebtedness) or entered into any transaction or
series of transactions involving in excess of $100,000, in the aggregate out of
the ordinary course of business, except for this Agreement and the transactions
contemplated hereby and the transactions relating to the refinancing of the
Company's debt from Texas Commerce Bank to Merchants Bank; (viii) suffered any
theft, damage, destruction or casualty loss, not covered by insurance and for
which a timely claim was filed, in excess of $50,000 in the aggregate; (ix)
suffered any extraordinary losses (whether or not covered by insurance); (x)
waived, canceled, compromised or released any rights having a value in excess
of $25,000 in the aggregate; (xi) made or adopted any change in its accounting
practice or policies; (xii) made any adjustment to its books and records other
than in respect of the conduct of its business activities in the ordinary
course consistent with past practice; (xiii) entered into any transaction with
any Affiliate other than intercompany transactions in the ordinary course of
business consistent with past practice; (xiv) entered into any employment
agreement; (xv) terminated, amended or modified any agreement involving an
amount in excess of $50,000; (xvi) imposed any security interest or other Lien
on any of its assets other than in the ordinary course of business consistent
with past practice; (xvii) delayed paying any accounts payable which is due and
payable except to the extent being contested in good faith and except in the
ordinary course of its business; (xviii) made or pledged any charitable
contribution other than in the ordinary course of business consistent with past
practice; (xix) entered into any other transaction or been subject to any event
which has or may have a Material Adverse Effect on the Company; or (xx) agreed
to do any of the foregoing.
A. LIABILITIES. Except as set forth on Schedule 3.11, the Company
does not have any liabilities or obligations, whether accrued, absolute,
contingent or otherwise, except (i) to the extent reflected or taken into
account in the Current Balance Sheet or any notes thereto and not heretofore
paid, discharged or otherwise satisfied, (ii) to the extent specifically set
forth in or incorporated by express reference in any of the Schedules attached
hereto, (iii) liabilities incurred in the ordinary course of business
consistent with past practice since the date of the Current Balance Sheet (none
of which relates to a breach of contract, breach of warranty, tort,
infringement or violation of law, or which arose out of any action, suit,
claim, governmental investigation or arbitration proceeding), (iv) normal
accruals, reclassifications, and audit adjustments which would
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be reflected on an audited financial statement and which would not be material
in the aggregate, and (v) liabilities incurred in the ordinary course of
business prior to the date of the Current Balance Sheet which, in accordance
with GAAP consistently applied, were not recorded thereon. The consolidated net
worth of the Company will be no less than a negative $300,000 as of the
Effective Time due to the Company's divestiture of all Company real estate and
Heights Armature Works.
A. LITIGATION. Except as set forth on Schedule 3.12, there is no
action, suit, or other legal or administrative proceeding or governmental
investigation, pending or, to the Knowledge of the Company, threatened against,
by or affecting the Company or any of its properties or assets, or the
Shareholders, or which question the validity or enforceability of this
Agreement or the transactions contemplated hereby, and there is no reasonable
basis for any of the foregoing. There are no outstanding orders, decrees or
stipulations issued by any Governmental Authority in any proceeding to which
the Company is or was a party which have not been complied with in full or
which continue to impose any material obligations on the Company.
A. ENVIRONMENTAL MATTERS. Except as set forth on Schedule 3.13:
1. The Company is in material compliance with all Environmental,
Health and Safety Laws, including, without limitation, Environmental,
Health and Safety Laws with respect to discharges into the ground water,
surface water and soil, emissions into the ambient air, and generation,
accumulation, storage, treatment, transportation, transfer, labeling, handling,
manufacturing, use, spilling, leaking, dumping, discharging, release or
disposal of Hazardous Substances (as defined herein), or other Waste (as
defined herein). The Company is not currently liable for any penalties, fines
or forfeitures for failure to comply with any Environmental, Health and Safety
Laws. The Company is in material compliance with all required notice, record
keeping and reporting requirements of all Environmental, Health and Safety
Laws, and has complied with all informational requests or demands arising under
applicable Environmental, Health and Safety Laws.
1. The Company has obtained, or caused to be obtained, and is in
material compliance with, all licenses, certificates, permits, approvals
and registrations (collectively "Licenses") required by applicable
Environmental, Health and Safety Laws for the ownership of its properties and
assets and the operation of its business as presently conducted, including,
without limitation, all air emission, water discharge, water use and solid
waste, hazardous waste and other Waste generation, transportation, transfer,
storage, treatment or disposal Licenses, and the Company is in material
compliance with all the terms, conditions and requirements of such Licenses,
and copies of such Licenses have been made available to MTLM. There are no
administrative or judicial investigations, notices, claims or other proceedings
pending or threatened by any Governmental Authority or third parties against
the Company, its business, operations, properties, or assets, which question
the validity or entitlement of the Company to any License required by the
Environmental, Health and Safety Laws for the ownership of each of the
respective
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properties and assets of the Company and the operation of its
business or wherein an unfavorable decision, ruling or finding would have a
Material Adverse Effect on the Company.
1. The Company has not received and is not aware of any
non-compliance order, warning letter, investigation, notice of violation,
claim, suit, action, judgment, or administrative or judicial proceeding pending
or threatened against or involving the Company, its business, operations,
properties, or assets, issued by any Governmental Authority or third party with
respect to any Environmental, Health and Safety Laws in connection with the
ownership of its properties or assets or the operation of its business, which
has not been resolved to the satisfaction of the issuing Governmental Authority
or third party, or which could have a Material Adverse Effect on the Company.
1. The Company is in compliance with, and is not in breach of or
default under any applicable writ, order, judgment, injunction, governmental
communication or decree issued pursuant to any Environmental, Health and Safety
Laws and no event has occurred or is continuing which, with the passage of time
or the giving of notice or both, would constitute such non-compliance, breach
or default thereunder, or affect the Owned Properties or Leased Premises.
1. The Company has not generated, manufactured, used, transported,
transferred, stored, handled, treated, spilled, leaked, dumped, discharged,
released or disposed, nor has it arranged for any third parties to generate,
manufacture, use, transport, transfer, store, handle, treat, spill, leak, dump,
discharge, release or dispose of, Hazardous Substances or other waste in an
amount so as to require remedial efforts to or at any location other than a
site permitted to receive such Hazardous Substances or other waste, nor has it
performed, arranged for or allowed by any method or procedure such generation,
manufacture, use, transportation, transfer, storage, treatment, spillage,
leakage, dumping, discharge, release or disposal in material contravention of
any Environmental, Health and Safety Laws except as necessary to the conduct of
the Company's business and then in compliance with applicable law. The Company
has not generated, manufactured, used, stored, handled, treated, spilled,
leaked, dumped, discharged, released or disposed of, or arranged for any third
parties to generate, manufacture, use, store, handle, treat, spill, leak, dump,
discharge, release or dispose of, any Hazardous Substances or other waste upon
property currently or previously owned or leased by it, except in compliance
with Environmental, Health and Safety Laws except as necessary to the conduct
of the Company's business and then in compliance with applicable law. For
purposes of this Section 3.13, the term "Hazardous Substances" shall include
any toxic or hazardous substance, material, or waste, and any other
contaminant, pollutant or constituent thereof, whether liquid, solid,
semi-solid, sludge and/or gaseous, including without limitation, chemicals,
compounds, metals, by-products, pesticides, asbestos containing materials,
petroleum or petroleum products, and polychlorinated biphenyls, the presence of
which requires remediation under any Environmental, Health and Safety Laws in
effect on the Closing Date, including, without limitation, the United
14
States Department of Transportation Table (49 CFR 172, 101) or by the
Environmental Protection Agency as hazardous substances (40 CFR Part 302) and
any amendments thereto; the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended by the Superfund Amendment and
Reauthorization Act of 1986, 42 U.S.C. Section 9601, et seq. (hereinafter
collectively "CERCLA"); the Solid Waste Disposal Act, as amended by the
Resource Conversation and Recovery Act of 1976 and subsequent Hazardous and
Solid Waste Amendments of 1984, 42 U.S.C. Section 6901 et seq. (hereinafter,
collectively "RCRA"); the Hazardous Materials Transportation Act, as amended,
49 U.S.C. Section 1801, et seq.; the Clean Water Act, as amended, 33 U.S.C.
Section 1311, et seq.; the Clean Air Act, as amended (42 U.S.C. Section
7401-7642); Toxic Substances Control Act, as amended, 15 U.S.C. Section 2601 et
seq.; the Federal Insecticide, Fungicide, and Rodenticide Act as amended, 7
U.S.C. Section 136-136y ("FIFRA"); the Emergency Planning and Community
Right-to-Know Act of 1986 as amended, 42 U.S.C. Section 11001, et seq. (Title
III of XXXX) ("EPCRA"); the Occupational Safety and Health Act of 1970, as
amended, 29 U.S.C. Section 651, et seq. ("OSHA") (but excluding the very broad
definitions established under OSHA's hazard communication standard); any
similar state statute or regulations implementing such statutes, laws,
ordinances, codes, rules, regulations, orders, rulings, or decrees, or which
has been or shall be determined or interpreted at any time by any Governmental
Authority to be a hazardous or toxic substance regulated under any other
statute, law, regulation, order, code, rule, order, or decree. For purposes of
this Section 3.13, the term "Waste" shall include toxic agricultural wastes,
biomedical wastes, biological wastes, bulky wastes, construction and demolition
debris, garbage, household wastes, industrial solid wastes, liquid wastes,
recyclable materials, sludge, solid wastes, special wastes, used oils, white
goods, and yard trash; provided, however, the term "Waste" shall not include
scrap metal.
1. The Company has not caused a Release or Discharge of any
Hazardous Substance on, into or beneath the surface of any parcel of the
Owned Properties or the Leased Premises or to any properties adjacent thereto
except in compliance with applicable Environmental, Health and Safety Laws; and
there has not occurred, nor is there presently occurring, a Release or
Discharge, or threatened Release or Discharge, of any Hazardous Substance on,
into or beneath the surface of any parcel of the Owned Properties or the Leased
Premises or to any properties adjacent thereto. For purposes of this Section,
the terms "Release" and "Discharge" shall have the meanings given them in the
Environmental, Health and Safety Laws.
1. Except as necessary to the conduct of the Company's business
and then only in compliance with applicable law, the Company has not
generated, handled, manufactured, treated, stored, used, shipped, transported,
transferred, or disposed of, nor has it allowed or arranged, by contract,
agreement or otherwise, for any third parties to generate, handle, manufacture,
treat, store, use, ship, transport, transfer or dispose of, any material
quantity of Hazardous Substance or other Waste to or at a site which, pursuant
to CERCLA or any similar state law (i) has been placed on the National
Priorities List or its state equivalent; or (ii) the Environmental Protection
Agency or the relevant state agency has notified the Company that it has
proposed or is proposing to place on the National
15
Priorities List or its state equivalent, except as disclosed on Schedule
3.13. Neither the Company nor the Shareholders have received notice or have
Knowledge of any facts which could give rise to any notice, that the Company is
a potentially responsible party for a federal or state environmental cleanup
site or for corrective action under CERCLA, RCRA or any other applicable
Environmental Health and Safety Laws. The Company has not submitted or was
required to submit any notice pursuant to Section 103(c) of CERCLA with respect
to the Leased Premises or the Owned Properties. The Company has not received
any written or, to the Knowledge of the Company, oral request for information
in connection with any federal or state environmental cleanup site, or in
connection with any of the real property or premises where the Company has
transported, transferred or disposed of other Wastes. The Company has not been
required to and has not undertaken any response or remedial actions or clean-up
actions at the request of any Governmental Authorities or at the request of any
other third party. The Company does not have any material liability under any
Environmental, Health and Safety Laws for personal injury, property damage,
natural resource damage, or clean up obligations.
1. Except as set forth on Schedule 3.13, the Company does not have
any Aboveground Storage Tanks or Underground Storage Tanks. For purposes
of this Section 3.13, the terms "Aboveground Storage Tanks" and "Underground
Storage Tanks" shall have the meanings given them in Section 6901 et seq., as
amended, of RCRA, or any applicable state or local statute, law, ordinance,
code, rule, regulation, order ruling, or decree, as in effect as of the Closing
Date, governing Aboveground Storage Tanks or Underground Storage Tanks.
1. The following have been made available to MTLM regardless of
their materiality, (i) all environmental audits, assessments or occupational
health studies of which the Company is aware undertaken by the Company or their
agents, or by the Shareholders, or by any Governmental Authority, or by any
third party, relating to the Company or any of the Leased Premises or the Owned
Properties; (ii) the results of which the Company is aware of any ground,
water, soil, air or asbestos monitoring undertaken by the Company or its
agents, or by the Shareholders, or by any Governmental Authority, or by any
third party, relating to the Company or any of the Leased Premises or the Owned
Properties; (iii) all written communications between the Company and any
Governmental Authority arising under or related to Environmental, Health and
Safety Laws; and (iv) all citations issued under OSHA, or similar state or
local statutes, laws, ordinances, codes, rules, regulations, orders, rulings,
or decrees, relating to or affecting the Company or any of the Leased Premises
or the Owned Properties.
1. Schedule 3.13 contains a list of the assets of the Company
which are known to contain "asbestos" or "asbestos-containing material" (as
such terms are identified under the Environmental, Health and Safety Laws).
Except as set forth in Schedule 3.13, the Company has operated and continues to
operate in material compliance with all Environmental, Health and Safety Laws
governing the handling, use and exposure to and disposal of asbestos or
asbestos-containing materials. Except as set forth in Schedule 3.13, there are
no claims, actions, suits, governmental investigations or
16
proceedings before any Governmental Authority or third party pending, or
to the Shareholders' Knowledge, threatened against or directly affecting the
Company or any of its assets or operations relating to the use, handling or
exposure to and disposal of asbestos or asbestos-containing materials in
connection with their assets and operations.
1. As used in this Agreement, "Environmental, Health and Safety
Laws" means all federal, state, regional or local statutes, laws, rules,
regulations, codes, orders, plans, injunctions, decrees, rulings, and changes
or ordinances or judicial or administrative interpretations thereof, as in
effect on the Closing Date, any of which govern or relate to pollution,
protection of the environment, public health and safety, air emissions, water
discharges, hazardous or toxic substances, solid or hazardous waste or
occupational health and safety, as any of these terms are in such statutes,
laws, rules, regulations, codes, orders, plans, injunctions, decrees, rulings
and changes or ordinances, or judicial or administrative interpretations
thereof, including, without limitation, RCRA, CERCLA, the Hazardous Materials
Transportation Act, the Toxic Substances Control Act, the Clean Air Act, the
Clean Water Act, FIFRA, EPCRA and OSHA.
1. Schedule 3.13 identifies the operations and activities, and
locations thereof, which have been conducted and are being conducted by
the Company on any of the Owned Properties or the Leased Premises which have
involved the generation, accumulation, storage, treatment, transportation,
labeling, handling, manufacturing, use, spilling, leaking, dumping,
discharging, release or disposal of any material quantities of Hazardous
Substances.
1. Schedule 3.13 identifies the locations to which the Company
has transferred, transported, hauled, moved, or disposed of Waste over
the past five years and the types and volumes of Hazardous Substances
(excluding saleable scrap metals) transferred, transported, hauled, moved, or
disposed of to each such location.
1. None of the Owned Properties or Leased Properties presently
includes, any "wetlands" as defined under applicable Environmental, Health
and Safety Laws, nor have any improvements on the Owned Properties or Leased
Properties been constructed upon any "wetlands" in violation of applicable
Environmental, Health and Safety Laws.
1. As used in this Section 3.13, the term "Company" is deemed to
refer to the Company or any of its subsidiaries, predecessors-in-interest
and other entities in which the Company has an ownership interest.
1. As used in Section 3.13(f) and (l), the terms "Owned Properties
" and "Leased Properties" are deemed to also refer to any properties
previously owned or leased by the Company.
17
A. REAL ESTATE.
1. The Company does not own any real property or any interest
therein.
1. Except as set forth on Schedule 3.14(b), there are no material
leases, licenses or similar agreements ("Leases") to which the Company is a
party.
A. GOOD TITLE TO AND CONDITION OF ASSETS.
1. Except as set forth on Schedule 3.15, the Company has good and
indefeasible title to all of its Assets, free and clear of any Liens or
restrictions on use. For purposes of this Agreement, the term "Assets" means
all of the properties and assets owned by the Company, other than the Owned
Properties and the Leased Premises, whether personal or mixed, tangible or
intangible, wherever located.
1. The Fixed Assets currently in use for the business and
operations of the Company are in good operating condition, normal wear
and tear excepted and have been maintained in accordance with sound industry
practices. For purposes of this Agreement, the term "Fixed Assets" means all
vehicles, machinery, equipment, tools, supplies, leasehold improvements,
furniture and fixtures owned by the Company or set forth on the Current Balance
Sheet or acquired by the Company since the date of the Current Balance Sheet
and listed on Schedule 3.33 or acquired by the Company after 5-31-97, except
(i) any such item which is not material to the Company and (ii) any such item
listed on Schedule 3.15.
A. COMPLIANCE WITH LAWS.
1. The Company is in material compliance with all laws,
regulations and orders applicable to it, its respective business and
operations (as conducted by it now and in the past), the Assets, the Owned
Properties and the Leased Premises and any other properties and assets (in each
case owned or used by it now or in the past). Except as set forth on Schedule
3.16, the Company has not been, within the past five (5) years, cited, fined or
otherwise notified of any asserted past or current material failure to comply
with any laws, regulations or orders and no proceeding with respect to any such
material violation is pending or, to the Company's Knowledge, threatened.
1. The Company has not made any payment of funds in connection
with its business which is prohibited by law, and no funds have been set
aside to be used in connection with its business for any payment prohibited by
law.
1. The Company has complied with the terms and provisions of the
Immigration Reform and Control Act of 1986, as amended (the "Immigration
Act"). With respect to each Employee (as defined in 8 C.F.R. 274a.1(f)) of the
Company for
18
whom compliance with the Immigration Act as employer is required,
the Company has on file a true, accurate and complete copy of (i) each
Employee's Form I-9 (Employment Eligibility Verification Form) and (ii) all
other records, documents or other papers prepared, procured and/or retained by
the Company pursuant to the Immigration Act. The Company has not, within the
past five (5) years, been cited, fined, served with a Notice of Intent to Fine
or with a Cease and Desist Order, nor has any action or administrative
proceeding been initiated or, to the Knowledge of the Company, threatened
against it, by the Immigration and Naturalization Service by reason of any
actual or alleged failure to comply with the Immigration Act.
1. Except as fully described on Schedule 3.16, the Company is not
subject to any Contract, decree or injunction which restricts the continued
operation of any business or the expansion thereof to other geographical areas,
customers and suppliers or lines of business.
A. LABOR AND EMPLOYMENT MATTERS. Schedule 3.17 sets forth the
name, address, social security number and current rate of compensation of
each of the executives and key employees of the Company. The Company is not a
party to or bound by any collective bargaining agreement or any other agreement
with a labor union, and there have been no efforts by any labor union during
the 24 months prior to the date hereof to organize any employees of the Company
into one or more collective bargaining units. There is no pending or, to the
Company's Knowledge, threatened labor dispute, strike or work stoppage which
affects or which may affect the business of the Company which may interfere
with its continued operations. The Company has not within the last 24 months
committed any unfair labor practice as defined in the National Labor Relations
Act, as amended, and there is no pending or, to the Company's Knowledge,
threatened charge or complaint against the Company by or with the National
Labor Relations Board or any representative thereof. There has been no strike,
walkout or work stoppage involving any of the employees of the Company during
the 24 months prior to the date hereof. The Shareholders have no Knowledge
that any executive or key employee or group of employees has any plans to
terminate his, her or their employment with the Company as a result of this
Agreement or otherwise. There are no contracts, agreements or plans of the
following nature, whether formal or informal, and whether or not in writing, to
which the Company is a party or under which it has an obligation: (i)
employment agreements, (ii) noncompetition agreements, and (iii) consulting
agreements. The Company has complied in all material respects with applicable
laws, rules and regulations relating to employment, civil rights and equal
employment opportunities, including but not limited to, the Civil Rights Act of
1964, the Fair Labor Standards Act and the Worker Adjustment and Retraining
Notification Act of 1988, as in effect on the Closing Date.
A. EMPLOYEE BENEFIT PLANS.
1. Employee Benefit Plans. Schedule 3.18 contains a list setting
forth each employee benefit plan or arrangement of the Company, including
but not limited to
19
employee pension benefit plans, as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), multiemployer
plans, as defined in Section 3(37) of ERISA, employee welfare benefit plans, as
defined in Section 3(1) of ERISA, deferred compensation plans, stock option
plans, bonus plans, stock purchase plans, hospitalization, disability and other
insurance plans, severance or termination pay plans and policies, whether or
not described in Section 3(3) of ERISA, in which employees, their spouses or
dependents, of the Company participate ("Employee Benefit Plans") (true and
accurate copies of which, together with the most recent annual reports on Form
5500 and summary plan descriptions with respect thereto, were made available to
MTLM).
1. Compliance with Law. With respect to each Employee Benefit
Plan (i) each has been administered in all material respects in compliance
with its terms and with all applicable laws, including, but not limited to,
ERISA and the Internal Revenue Code of 1986, as amended (the "Code"); (ii) no
actions, suits, claims or disputes are pending, or threatened; (iii) no audits,
inquiries, reviews, proceedings, claims, or demands are pending with any
governmental or regulatory agency; (iv) to the Knowledge of the Company, there
are no facts which could give rise to any material liability in the event of
any such investigation, claim, action, suit, audit, review, or other
proceeding; (v) all material reports, returns, and similar documents required
to be filed with any governmental agency or distributed to any plan participant
have been duly or timely filed or distributed; and (vi) no "prohibited
transaction" has occurred within the meaning of the applicable provisions of
ERISA or the Code.
1. Qualified Plans. With respect to each Employee Benefit Plan
intended to qualify under Code Section 401(a) or 403(a) (i) the Internal
Revenue Service has issued a favorable determination opinion letter, true and
correct copies of which have been made available to MTLM, that such plans are
qualified and exempt from federal income taxes; (ii) no such determination
letter has been revoked nor has revocation been threatened, nor has any
amendment or other action or omission occurred with respect to any such plan
since the date of its most recent determination letter or application therefor
in any respect which would adversely affect its qualification or materially
increase its costs; (iii) all such contributions to the plans, and all payments
under the plans (except those to be made from a trust qualified under Section
401(a) of the Code) and all payments with respect to the plans (including,
without limitation, PBGC and insurance premiums) for any period ending before
the Closing Date that are not yet, but will be, required to be made are
properly accrued and reflected on the Current Balance Sheet or are disclosed on
Schedule 3.18; and (iv) no such plan is subject to Code Sections 312 or 302 of
Title IV of ERISA.
1. Welfare Plans. Other than as disclosed in Schedule 3.18, (i)
the Company is not obligated under any employee welfare benefit plan as
described in Section 3(1) of ERISA ("Welfare Plan"), whether or not disclosed
in Schedule 3.18, to provide medical or death benefits with respect to any
employee or former employee of the Company, or its predecessors after
termination of employment; (ii) each of the
20
Company has complied with the notice and continuation coverage requirements
of Section 4980B of the Code and the regulations thereunder with respect to
each Welfare Plan that is, or was during any taxable year for which the statute
of limitations on the assessment of federal income taxes remains open by
consent or otherwise, a group health plan within the meaning of Section
5000(b)(1) of the Code, and (iii) there are no reserves, assets, surplus or
prepaid premiums under any Welfare Plan which is an Employee Benefit Plan. The
consummation of the transactions contemplated by this Agreement will not
entitle any individual to severance pay, and, will not accelerate the time of
payment or vesting, or increase the amount of compensation, due to any
individual.
1. Controlled Group Liability. Neither the Company, nor any
entity that would be aggregated with it under Code Section 414(b), (c),
(m) or (o): (i) has ever terminated or withdrawn from an employee benefit plan
under circumstances resulting (or expected to result) in liability to the
Pension Benefit Guaranty Corporation ("PBGC"), the fund by which the employee
benefit plan is funded, or any employee or beneficiary for whose benefit the
plan is or was maintained (other than routine claims for benefits); (ii) has
any assets subject to (or expected to be subject to) a lien for unpaid
contributions to any employee benefit plan; (iii) has failed to pay premiums to
the PBGC when due; (iv) is subject to (or expected to be subject to) an excise
tax under Code Section 4971; or (v) has engaged in any transaction which would
give rise to liability under Section 4069 or Section 4212(c) of ERISA.
1. Other Liabilities. Except as set forth on Schedule 3.18 for
the listed plans, (i) none of the Employee Benefit Plans obligates the
Company to pay separation, severance, termination or similar benefits solely as
a result of any transaction contemplated by this Agreement or solely as a
result of a "change of control" (as such term is defined in Section 280G of the
Code), (ii) all required or discretionary (in accordance with historical
practices) payments, premiums, contributions, reimbursements, or accruals for
all periods ending prior to or as of the Closing Date shall have been made or
properly accrued on the Current Balance Sheet or will be properly accrued on
the books and records of the Company as of the Closing Date, and (iii) none of
the Employee Benefit Plans has any unfunded liabilities which are not reflected
on the Current Balance Sheet or the books and records of the Company.
A. TAX MATTERS. There are no Tax Returns required to be filed
prior to the date hereof with respect to the Company, or any of its income,
properties, franchises or operations which have not been filed, each such Tax
Return has been prepared in compliance with all applicable laws and
regulations, and all such Tax Returns are true and complete in all respects.
All Taxes due and payable by or with respect to the Company have been paid or
accrued on the Current Balance Sheet or will be accrued on its books and
records as of the Closing. With respect to any open tax year: (i) no taxable
period has been audited by the relevant taxing authority; (ii) no deficiency or
proposed adjustment which has not been settled or otherwise resolved for any
amount of Taxes has been asserted or assessed by any taxing authority; (iii)
the Company has not consented to extend the time in which any Taxes may be
assessed or collected by any taxing authority;
21
(iv) the Company has not requested or been granted an extension of the
time for filing any Tax Return to a date later than the Closing Date, other
than the current fiscal year federal income tax return for which an extension
has been granted to February 1998; (v) there is no action, suit, taxing
authority proceeding, or audit or claim for refund now in progress, pending or,
to the Knowledge of the Company, threatened against or with respect to the
Company regarding Taxes; (vi) the Company has not made an election or filed a
consent under Section 341(f) of the Code (or any corresponding provision of
state, local or foreign law) on or prior to the Closing Date; (vii) there are
no Liens for Taxes (other than for current Taxes not yet due and payable) upon
the assets of the Company, (viii) the Company will not be required (A) as a
result of a change in method of accounting for a taxable period ending on or
prior to the Closing Date, to include any adjustment under Section 481(c) of
the Code (or any corresponding provision of state, local or foreign law) in
taxable income for any taxable period (or portion thereof) beginning after the
Closing Date or (B) as a result of any "closing agreement," as described in
Section 7121 of the Code (or any corresponding provision of state, local or
foreign law), to include any item of income or exclude any item of deduction
from any taxable period (or portion thereof) beginning after the Closing Date;
(ix) the Company is not a party to or bound by any tax allocation or tax
sharing agreement or has any current or potential contractual obligation to
indemnify any other Person with respect to Taxes; (x) there is no basis for any
assessment, deficiency notice, 30-day letter or similar notice with respect to
any Tax to be issued to the Company with respect to any period on or before the
Closing Date; (xi) the Company has not made any payments, and is or will not
become obligated (under any contract entered into on or before the Closing
Date) to make any payments, that will be non-deductible under Section 280G of
the Code (or any corresponding provision of state, local or foreign law); (xii)
the Company has not been a United States real property holding corporation
within the meaning of Section 897(c)(2) of the Code (or any corresponding
provision of state, local or foreign law) during the applicable period
specified in Section 897(c)(1)(a)(ii) of the Code (or any corresponding
provision of state, local or foreign law); (xiii) no claim has ever been made
by a taxing authority in a jurisdiction where the Company does not file Tax
Returns that is or may be subject to Taxes assessed by such jurisdiction; and
(xiv) the Company does not have any permanent establishment in any foreign
country, as defined in the relevant tax treaty between the United States of
America and such foreign country; (xv) true and complete copies of all income
and sales Tax Returns filed by or with respect to the Company for the past two
years has been made available to MTLM; (xvi) the Company will not be subject to
any Taxes for the period ending at the Closing Date for any period for which a
Tax Return has not been filed imposed pursuant to Section 1374 or Section 1375
of the Code (or any corresponding provision of state, local or foreign law);
and (xvii) to the Knowledge of the Company, no sales or use tax or property
transfer tax (other than sales tax on aircraft, boats, mobile homes and motor
vehicles), non-recurring intangibles tax, documentary stamp tax or other excise
tax (or comparable tax imposed by any Governmental Authority) will be payable
by the Company by virtue of the transactions contemplated in this Agreement.
22
A. INSURANCE. The Company is covered by valid, outstanding and
enforceable policies of insurance issued to it by insurers covering its
properties, assets and business (the "Insurance Policies"). Such Insurance
Policies are in full force and effect, and all premiums due thereon have been
paid on or before the due date. As of the Closing Date each of the Insurance
Policies will be in full force and effect and the Company will assist MTLM in
having comparable coverage to be in place for the Surviving Corporation. The
Company has complied with the provisions of such Insurance Policies in all
material respects. Schedule 3.20 contains (i) a complete and correct list of
all Insurance Policies (copies of which have been made available to MTLM) and
(ii) a detailed description of each pending claim under any of the Insurance
Policies for an amount in excess of $5,000 that relates to loss or damage to
the properties, assets or business of the Company. The Company has not failed
to give, in a timely manner, any notice required under any of the Insurance
Policies to preserve its rights thereunder.
A. RECEIVABLES. All of the Receivables represent bona fide
transactions and arose in the ordinary course of business of the Company.
Ninety-Five Percent (95%) of the Receivables (subject to certain variances
described on Schedule 3.21) are good and collectible receivables, and will be
collected in full in accordance with the terms of such receivables (and in any
event within six months following the Closing), without set off or
counterclaims, subject to the allowance for doubtful accounts, if any, set
forth on the Current Balance Sheet as reasonably adjusted since the date of the
Current Balance Sheet in the ordinary course of business consistent with past
practice. For purposes of this Agreement, the term "Receivables" means all
receivables of the Company, including all trade account receivables arising
from the provision of services or sale of inventory, notes receivable, and
insurance proceeds receivable.
A. LICENSES AND PERMITS. The Company possesses all material
licenses and required governmental or official approvals, permits or
authorizations (collectively, the "Permits") for its business and operations,
including the operation of the Owned Properties and Leased Premises, which
Permits are listed on Schedule 3.22. All such Permits are valid and in full
force and effect, the Company is in material compliance with the requirements
thereof, and no proceeding is pending or, to the Knowledge of the Company,
threatened to revoke or amend any of them. Except as set forth on Schedule
3.22, none of such Permits is or will be impaired or in any way affected by the
execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
A. ADEQUACY OF THE ASSETS; RELATIONSHIPS WITH CUSTOMERS AND
SUPPLIERS; AFFILIATED TRANSACTIONS. The Assets, Owned Properties and
Leased Premises constitute, in the aggregate, all of the assets and properties
necessary for the conduct of the business of the Company in the manner in which
and to the extent to which such business is currently being conducted. To the
Knowledge of the Company, no current supplier to the Company of items essential
to the conduct of its business will or, to the Knowledge of the Company, has
threatened to terminate its respective business
23
relationship with it for any reason. The Company does not have any direct
or indirect interest in any customer, supplier or competitor of the Company, or
in any person from whom or to whom the Company leases real or personal property
(although all real property, improvements and fixtures used by the Company
prior to Closing will be owned by Heights Armature Works). Except as set forth
on Schedule 3.23, no officer, director or Shareholder of the Company, nor any
person related by blood or marriage to any such person, nor any entity in which
any such person owns any beneficial interest, is a party to any Contract or
transaction with the Company or has any interest in any property used by the
Company.
A. INTELLECTUAL PROPERTY. The Company has full legal right,
title and interest in and to all trademarks, service marks, trade names,
copyrights, know-how, patents, trade secrets, licenses (including licenses for
the use of computer software programs), and other intellectual property used
in the conduct of its business (the "Intellectual Property"). The conduct of
the business of the Company as currently conducted, and the unrestricted
conduct and the unrestricted use and exploitation of the Intellectual Property,
does not infringe or misappropriate any rights held or asserted by any Person,
and no Person is infringing on the Intellectual Property. No payments are
required for the continued use of the Intellectual Property. None of the
Intellectual Property has ever been declared invalid or unenforceable, or is
the subject of any pending or, to the Knowledge of the Company, threatened
action for opposition, cancellation, declaration, infringement, or invalidity,
unenforceability or misappropriation or like claim, action or proceeding.
A. CONTRACTS. Schedule 3.25 sets forth a list of each Contract
to which the Company is a party or by which its properties and assets are
bound and which is material to its business, assets, properties or prospects
(the "Designated Contracts"), true and correct copies of which have been made
available to MTLM. The copy of each Designated Contract made available to MTLM
is a true and complete copy of the document it purports to represent and
reflects all amendments thereto made through the date of this Agreement.
Except as set forth on Schedule 3.25, the Company has not violated any of the
material terms or conditions of any Designated Contract or any term or
condition which would permit termination or material modification of any
Designated Contract, and, to the Knowledge of the Company, all of the covenants
to be performed to the date hereof by any other party thereto have been fully
performed and there are no asserted claims for breach or indemnification or
notice of default or termination under any Designated Contract. Except as set
forth on Schedule 3.25, no event has occurred which constitutes, or after
notice or the passage of time, or both, would constitute, a material default by
the Company under any Designated Contract, and, to the Knowledge of the
Company, no such event has occurred which constitutes or would constitute a
material default by any other party. The Company is not subject to any
material liability or payment resulting from renegotiation of amounts paid to
them under any Designated Contract (see Schedule 3.21). As used in this
Section, Designated Contracts shall include, without limitation, (a) loan
agreements, indentures, mortgages, pledges, hypothecations, deeds of trust,
conditional sale or title retention agreements, security
24
agreements, equipment financing obligations or guaranties, or other sources of
contingent liability in respect of any indebtedness or obligations to any other
Person, or letters of intent or commitment letters with respect to same; (b)
contracts obligating the Company to purchase or sell products or services; (c)
leases of real property, and leases of personal property not cancelable without
penalty on notice of 60 days or less or calling for payment of an annual gross
rental exceeding $10,000.00; (d) distribution, sales agency or franchise or
similar agreements, or agreements providing for an independent contractor's
services, or letters of intent with respect to same; (e) employment agreements,
management service agreements, consulting agreements, confidentiality
agreements, noncompetition agreements and any other agreements relating to any
employee, officer or director of the Company; (f) licenses, assignments or
transfers of trademarks, trade names, service marks, patents, copyrights, trade
secrets or know how, or other agreements regarding proprietary rights or
intellectual property; (g) any Contract relating to pending capital
expenditures in excess of $10,000 by the Company; and (h) other material
Contracts or understandings, irrespective of subject matter and whether or not
in writing, not entered into in the ordinary course of business by the Company
and not otherwise disclosed on the Schedules.
A. CUSTOMER LISTS AND RECURRING REVENUE. At or before the
Closing, the Company will make available to MTLM a true, correct and
complete list of its 20 largest customers ("Material Customers") and suppliers
together with the applicable percentage of total sales or purchases, as
applicable. True, correct and complete copies of any agreements with such
customers or suppliers which are anticipated to endure beyond the Closing have
been furnished by the Shareholders to MTLM. Other than Material Customers, no
customer of the Company as of the date of this Agreement accounts for more than
1% of its combined annual revenue.
A. ACCURACY OF INFORMATION FURNISHED BY THE SHAREHOLDERS. No
representation, restatement or information made or furnished by the
Shareholders to MTLM or any of MTLM's representatives including those contained
in this Agreement and the various Schedules attached hereto and the other
information and statements referred to herein and previously furnished by the
Company and the Shareholders, contains or shall contain any untrue statement of
a material fact or omits or shall omit any material fact necessary to make the
information contained therein not misleading. The Shareholders have provided
MTLM with true, accurate and complete copies of all documents listed or
described in the various Schedules attached hereto.
A. INVESTMENT INTENT; ACCREDITED INVESTOR STATUS; SECURITIES
DOCUMENTS. Each of the Shareholders is acquiring his interest in the
Common Stock of MTLM for his own account for investment and not with a view to,
or for the sale in connection with, any distribution of his interest, except in
compliance with applicable state and federal securities laws. Each of the
Shareholders has been provided, to his satisfaction, the opportunity to discuss
the transactions contemplated hereby with MTLM and has had the opportunity to
obtain such information pertaining to MTLM as has been requested, including but
not limited to filings made by MTLM with the SEC under the
25
Exchange Act. Each of the Shareholders is an "accredited investor" within
the meaning of Regulation D promulgated under the Securities Act. Each of the
Shareholders has such knowledge and experience in business and financial
matters that he is capable of evaluating the merits and risks of an investment
in the Common Stock of MTLM, and is capable of bearing the economic risks of
such investment and is able to bear a complete loss of his investment in the
Common Stock of MTLM. Each of the Shareholders acknowledges that the Common
Stock of MTLM has not been registered under the Securities Act and understands
that the Common Stock of MTLM must be held indefinitely unless such shares are
subsequently registered under the Securities Act or such sale is permitted
pursuant to an available exemption from such registration requirement.
A. BUSINESS LOCATIONS. As of the date hereof, the Company does
not have any office or place of business other than 101 Yale, Houston,
Texas, 00000 Xxxxxxxxxx Xxxx, Xxxxxxx, Xxxxx, and ____ Interstate Drive,
Navasota, Texas and constitute all locations where the equipment, inventory,
chattel paper and books and records of the Company are located as of the date
hereof.
A. NAMES; PRIOR ACQUISITIONS. All of the names under which the
Company does business as of the date hereof are specified on Schedule 3.30.
Except as set forth on Schedule 3.30, the Company has not changed its name or
used any assumed or fictitious name, or been the surviving entity in a merger,
acquired any business or changed its principal place of business or chief
executive office, within the past 10 years.
A. NO COMMISSIONS. Other than certain potential claims as to
which MTLM has received notice, neither the Company nor the Shareholders have
incurred any obligation for any finder's or broker's or agent's fees or
commissions or similar compensation in connection with the transactions
contemplated hereby.
A. INVENTORY. All material Assets that consist of inventory
(including raw materials and work-in-progress): (i) were acquired in the
ordinary course of business consistent with past practice; (ii) are of a
quality, quantity, and condition useable or saleable in the ordinary course of
business within the Company's normal inventory turnover experience; and (iii)
are reflected on the books in accordance with GAAP. The Company does not have
any material liability with respect to the return or repurchase of any goods in
the possession of any customer outside the ordinary course of business.
A. IDENTIFICATION, ACQUISITION AND DISPOSITION OF ASSETS AND
LIABILITIES. Schedule 3.33 sets forth a listing of all of the material
depreciable and amortizable assets and properties (including real, personal and
mixed) owned by the Company as of September 30, 1997.
26
A. RESTRICTIONS. There are no non-competition, non-solicitation,
confidentiality and other restrictive covenants to which the Company and/or
Shareholders is a party or otherwise bound (other than with MTLM, Hou-Tex
Metals, Xxxxxx Xxxxxx [and Investment Banking Group Advisory] and Proler
Southwest, Inc.); see Schedule 3.25. Except as set forth on Schedule 3.34,
there are no contracts or other conditions, circumstances, events or agreements
which would in any way limit or restrict the rights of MTLM, or the Company
from engaging in any business anywhere in the world.
3.35 REAL PROPERTY. Notwithstanding any other provision of this Agreement
to the contrary, all parties hereto acknowledge and agree that all of the real
property and improvements heretofore used by the Company (excluding Heights
Armature Works, Inc.) at 101 Yale will be leased to the Surviving Corporation
by Heights Armature Works, Inc. (now owned directly by the Shareholders) in
accordance with Section 6.10(a) hereof.
I.
CONDUCT OF BUSINESS PENDING THE CLOSING
A. CONDUCT OF BUSINESS OF THE COMPANY PENDING THE CLOSING .
Except as set forth on Schedule 4.1, the Company covenants and agrees that,
between the date of this Agreement and the Closing Date (which the parties
understand shall be the same date), the business of the Company shall be
conducted only in, and the Company shall not take any action except in, the
ordinary course of business, consistent with past practice and in material
compliance with all rules, regulations and laws. The Company shall use
commercially reasonable efforts to preserve and keep intact its business
organization, to keep available the services of its current officers, employees
and consultants, and to preserve its present relationships with customers,
suppliers and other persons with which it has significant business relations.
By way of amplification and not limitation, except as contemplated by this
Agreement, or in the ordinary course of business, the Company shall not,
between the date of this Agreement and the Closing Date, directly or
indirectly, do or propose or agree to do any of the following without the prior
written consent of MTLM:
1. amend or otherwise change its articles of incorporation or
bylaws;
1. issue, sell, pledge, dispose of, encumber, or, authorize the
issuance, sale, pledge, disposition, grant or encumbrance of (i) any shares of
its capital stock of any class, or any options, warrants, convertible
securities or other rights of any kind to acquire any shares of such capital
stock, or, (ii) any of their respective assets, tangible or intangible, except
in the ordinary course of business consistent with past practice;
27
1. declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect to
any of its capital stock;
1. reclassify, combine, split, subdivide or redeem, purchase or
otherwise acquire, directly or indirectly, any of its capital stock;
1. (i) acquire (including, without limitation, for cash or shares
of stock, by merger, consolidation, or acquisition of stock or assets) any
interest in any corporation, partnership or other business organization or
division thereof or any assets, or make any investment either by purchase of
stock or securities, contributions of capital or property transfer, or, except
in the ordinary course of business, consistent with past practice, purchase any
property or assets of any other Person, (ii) incur any indebtedness for
borrowed money or issue any debt securities or assume, guarantee or endorse or
otherwise as an accommodation become responsible for, the obligations of any
Person, or make any loans or advances, or (iii) enter into any Contract other
than in the ordinary course of business, consistent with past practice;
1. increase the compensation payable or to become payable to its
respective officers or directors, or, except as presently bound to do,
grant any severance or termination pay to, or enter into any employment or
severance agreement with, any of its respective directors or officers, or
establish, adopt, enter into or amend or take any action to accelerate any
rights or benefits under any collective bargaining, bonus, profit sharing,
trust, compensation, stock option, restricted stock, pension, retirement,
deferred compensation, employment, termination, severance or other plan,
agreement, trust, fund, policy or arrangement for the benefit of any directors,
officers or employees;
1. sell, pledge or otherwise dispose of any asset or the stock of
any subsidiary or take any other action other than in the ordinary course
of business and in a manner consistent with past practice with respect to
accounting policies or procedures;
1. pay, discharge or satisfy any existing claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the ordinary
course of business and consistent with past practice of due and payable
liabilities reflected or reserved against in its financial statements, as
appropriate, or liabilities incurred after the date hereof in the ordinary
course of business and consistent with past practice;
1. increase or decrease prices charged to its respective
customers, except for previously announced price changes or except in the
ordinary course of business, or take any other action which might reasonably
result in any material increase in the loss of customers through non-renewal or
termination of contracts or other causes; or
28
1. agree, in writing or otherwise, to take or authorize any of the
foregoing actions or any action which would make any representation or
warranty in Article III untrue or incorrect.
Notwithstanding the provisions of this Section 4.1, it is acknowledged and
agreed that the Company may, without consent or notice to MTLM, transfer out of
the Company all real property, improvements and fixtures and the stock of
Heights Armature Works.
A. CONDUCT OF BUSINESS OF MTLM PENDING THE CLOSING. MTLM
covenants and agrees that, between the date of this Agreement and the Closing
Date, the business of MTLM shall be conducted only in the ordinary and usual
course, consistent with past practices, and MTLM will notify the Company of any
material developments. Notwithstanding the foregoing, the Company acknowledges
that the nature of the ordinary and usual course of MTLM's business includes
acquisitions in the line of business in which MTLM is engaged and related
businesses hereafter acquired. MTLM shall promptly provide the Company with a
copy of any of MTLM's press releases and, upon request of the Company, any of
its SEC filings. Furthermore, MTLM shall not declare a stock split, stock
dividend or similar transaction. In addition, MTLM will use its commercially
reasonable efforts to preserve and keep intact its business organization, to
keep available to MTLM the services of its current employees, including
officers, and to preserve the goodwill of the customers, suppliers, creditors
and others having business relations with MTLM.
I.
ADDITIONAL AGREEMENTS
A. FURTHER ASSURANCES. Each party shall execute and deliver such
additional instruments and other documents and shall take such further
actions as may be necessary or appropriate to effectuate, carry out and comply
with all of the terms of this Agreement and the transactions contemplated
hereby.
A. COMPLIANCE WITH COVENANTS. The Shareholders shall cause the
Company to comply with all of the respective covenants of the Company
under this Agreement.
A. COOPERATION. Each of the parties agrees to cooperate with the
other in the preparation and filing of all forms, notifications, reports and
information, if any, required or reasonably deemed advisable pursuant to any
law, rule or regulation or the rules of any exchange on which the MTLM Common
Stock is listed (the Nasdaq National Market) in connection with the
transactions contemplated by this Agreement and to use their respective best
efforts to agree jointly on a method to overcome any objections by any
Governmental Authority to any such transactions.
29
A. ACCESS TO INFORMATION. From the date hereof to the Closing
Date, the Company and MTLM and Acquisition shall (and shall cause its
respective directors, officers, employees, auditors, and agents to) afford
each other and their officers, employees, auditors, counsel and agents
reasonable access at all reasonable times to its properties, offices, and other
facilities, to its officers and employees and to all books and records, and
shall furnish such persons with all financial, operating and other data and
information as may be requested. All financial statements, customer
information and other documents and material furnished in connection therewith
to MTLM and/or Acquisition shall be treated as confidential, except as
disclosed in the performance of this Agreement or as required by law, and if
the Closing shall not take place, all such financial statements, customer
information and other documents and materials and all copies thereof, if any,
shall be returned to the Company and shall not be used in any way detrimental
to the Company.
A. NOTIFICATION OF CERTAIN MATTERS. The Shareholders and MTLM
shall give prompt notice to the other of the occurrence or non-occurrence
of any event which would likely cause any representation or warranty contained
herein to be untrue or inaccurate, or any covenant, condition, or agreement
contained herein not to be complied with or satisfied.
A. TAX TREATMENT. Each party to this Agreement has sought and
received its own advice as to the tax treatment of the transactions
covered by this Agreement and is not relying on any representations of the
other parties or their respective advisers with respect thereto. All parties
hereto agree to fully and completely comply with the reporting requirements of
the Internal Revenue Service.
A. CONFIDENTIALITY; PUBLICITY. Before the Closing, none of the
parties hereto shall make any public release of information regarding the
matters contemplated herein except (i) that a joint press release in agreed
form may be issued by the parties after the execution of this Agreement and the
Closing, (ii) that the parties may each continue their own communications with
their respective employees, customers, suppliers, franchisees, lenders,
lessors, stockholders and other particular groups as may be legally required or
necessary or appropriate and not inconsistent with the best interests of the
other parties or the prompt consummation of this Agreement, and (iii) as
required by law.
A. NO OTHER DISCUSSIONS. Prior to September 30, 1997, the Company
shall not, nor shall it permit any of its subsidiaries or affiliates to,
nor shall it authorize or permit any officer, director, employee, investment
banker, attorney or other advisor or representative of the Company or any of
its subsidiaries to, (a) solicit, initiate or encourage the submission of any
merger proposal with respect to the Company, (b) enter into any agreement with
respect to any such proposal, or (c) participate in any discussions or
negotiations regarding, or furnish to any person any information with respect
to, or take any other action to facilitate any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to, any merger
proposal
30
with respect to the Company. Without limiting the foregoing, it is
understood that any violation of the restrictions set forth in the preceding
sentence by any executive officer of the Company or any of its subsidiaries or
affiliates or any investment banker or other advisor to any representative of
the Company, whether or not such person is purporting to act on behalf of the
Company or otherwise, shall be deemed to be a breach of this Section by the
Company. For this Agreement, "a merger proposal" means any proposal, other
than a proposal by MTLM or any of its affiliates, for a merger or other
business combination involving the Company or any proposal or offer, other than
a proposal or offer by MTLM or any of its affiliates, to acquire in any manner,
directly or indirectly, an equity interest in the Company, any voting
securities of the Company or a substantial portion of the assets of the
Company, taken as a whole.
A. TRADING IN MTLM'S COMMON STOCK. Except as otherwise expressly
consented to by MTLM, from the date of this Agreement until the Closing
Date, none of the Company, nor the Shareholders (nor any Affiliates thereof)
will directly or indirectly purchase or sell (including short sales) any shares
of the Common Stock of MTLM in any transactions effected on the Nasdaq National
Market or otherwise.
A. OTHER AGREEMENTS. Upon the Closing, each party hereto that is
a signatory to any Exhibits (the "Other Agreements") agrees to execute and
deliver such Other Agreements, as appropriate, to the other parties to such
Other Agreements, and each party who is a married individual shall cause his
spouse to execute all consents requested by MTLM to consummate the
transactions set forth herein.
A. HSR ACT COMPLIANCE. If required, the Company, the Shareholders
and MTLM will as promptly as practicable file or cause to be filed with
the United States Federal Trade Commission (the "FTC") and the United State
Department of Justice (the "DOJ") the notification and report form required for
the transactions contemplated hereby and any supplemental information requested
in connection therewith pursuant to the HSR Act. Any such notification and
report form and supplemental information will be in substantial compliance with
the requirements of the HSR Act. Each of MTLM, the Company and the
Shareholders will furnish to the others such necessary information and
reasonable assistance as the others may request in connection with the
preparation of any filing or submission which is necessary under the HSR Act.
Each of the Company, the Shareholders and MTLM will keep each other apprised of
the status of any communications with, and inquiries or requests for additional
information addressed to the entity that filed a notification and report form
as an acquired or acquiring person from, the FTC or the DOJ and shall comply or
cause its respective filing person to comply promptly with any such inquiry or
request. Each of the Company, the Shareholders and MTLM will use commercially
reasonable efforts to obtain any clearance required under the HSR Act for the
consummation of this Agreement.
A. CORPORATE AUTHORITY. MTLM, the Company and the Shareholders
agree to use their respective best efforts to obtain the authorizations
31
required for each to execute and deliver this Agreement and to perform each of
their respective obligations hereunder and to consummate the transactions
contemplated hereby.
A. EMPLOYMENT AGREEMENTS. Each of the Shareholders agrees to
enter into an Employment Agreement substantially in the form of Exhibits B
and B-1 attached hereto and made a part hereof.
A. NO SOLICITATION OF EMPLOYEES. MTLM agrees that for the three-
year period after the date of this Agreement, MTLM will not, and will cause
its Affiliates to not, directly or indirectly, (i) solicit for employment by
any such person, its Affiliates or anyone else, any employee or then currently
active independent contractor of the Company or its Affiliates, or any person
who was an employee or then currently active independent contractor of the
Company or its Affiliates, within the six-month period immediately preceding
such solicitation of employment, other than such person (a) whose employment or
independent contractor relationship was terminated by either of the Company or
any Affiliate, or (b) who independently responded to a general solicitation for
employment by MTLM or its Affiliates; or (c) induce or attempt to induce, any
employee or independent contractor of the Company or its Affiliates, to
terminate such employee's employment or independent contractor's active
contractual relationship; provided, however, the foregoing shall not apply if
the foregoing does not occur due to a breach of this Agreement by the Company
or the Shareholders.
The Company agrees that for the three-year period after the date of this
Agreement, the Company will not, and will cause its Affiliates to not, directly
or indirectly, (i) solicit for employment by any such person, its Affiliates or
anyone else, any employee or then currently active independent contract of MTLM
or its Affiliates, or any person who was an employee or then currently active
independent contractor of MTLM or its Affiliates, within the six-month period
immediately preceding such solicitation of employment, other than such person
(a) whose employment or independent contractor relationship was terminated by
MTLM or its Affiliate, or (b) who independently responded to a general
solicitation for employment by the Company, or (ii) induce or attempt to
induce, any employee or independent contractor of MTLM or its Affiliates, to
terminate such employee's employment or independent contractor's active
contractual relationship.
I.
CONDITIONS TO THE OBLIGATIONS OF MTLM
The obligations of MTLM hereunder shall be subject to the fulfillment at
or prior to the Closing Date of the following conditions, any or all of which
may be waived in whole or in part by MTLM:
32
A. ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
OBLIGATIONS. The representations and warranties of the Company and the
Shareholders contained in this Agreement shall be true and correct at and as of
the Closing Date with the same force and effect as though made at and as of
that time except (i) for changes specifically permitted by or disclosed
pursuant to this Agreement, and (ii) that those representations and warranties
which address matters only as of a particular date shall remain true and
correct as of such date. The Company and the Shareholders shall have performed
and complied with all of their respective obligations required by this
Agreement to be performed or complied with at or prior to the Closing Date.
The Company and the Shareholders shall have delivered to MTLM a certificate,
dated as of the Closing Date, duly signed (in the case of the Company by its
chief executive officer and chief financial officer) stating that such
representations and warranties are true and correct and that all such
obligations have been performed and complied with.
A. NO MATERIAL ADVERSE CHANGE OR DESTRUCTION OF PROPERTY. Between
the date hereof and the Closing Date, (i) there shall have been no
Material Adverse Change or Effect to the Company, (ii) there shall have been no
adverse federal, state or local legislative or regulatory change affecting in
any material respect the services, products or business of the Company, and
(iii) none of the properties and assets of the Company shall have been damaged
by fire, flood, casualty, act of God or the public enemy or other cause
(regardless of insurance coverage for such damage) which damages may have a
Material Adverse Change or Effect thereon, and there shall have been delivered
to MTLM a certificate to that effect (with item [ii], above, qualified to the
Knowledge of the Shareholders), dated the Closing Date and signed by or on
behalf of the Company.
A. CORPORATE CERTIFICATE. The Shareholders shall have delivered
to MTLM (i) copies of resolutions adopted by the Board of Directors of the
Company and the Shareholders authorizing the transactions contemplated by this
Agreement, and (ii) certificate of good standing of the Company issued by the
State of Texas and each other state in which the Company is qualified to do
business as of a date not more than ten days prior to the Closing Date,
certified in each case as of the Closing Date by the Secretary as being true,
correct and complete.
A. OPINION OF COUNSEL. MTLM shall have received an opinion dated
as of the Closing Date from counsel for the Company and the Shareholders,
in form and substance acceptable to MTLM, to the effect that:
(i) the Company is validly existing and in good standing
under the laws of its state of incorporation, and has the power
and authority to carry on the business now conducted by it and to
own or lease the properties now owned or leased by it;
33
(ii) the Company has obtained all necessary authorizations
and consents of its directors and Shareholders to effect the
transactions contemplated in this Agreement;
(iii) all issued and outstanding shares of capital stock of
the Company are owned as set forth on Schedule 3.5 hereto;
(iv) except as set forth in Schedule 3.12, such counsel has
no actual knowledge (without any independent investigation of any
sort) of any litigation, proceeding or investigation pending or
threatened which would result in any material adverse change in
the properties, or business or in the condition of the Company, or
which questions the validity of this Agreement; and
(v) each of this Agreement and the Escrow Agreement and all
other agreements executed and delivered by the parties hereto is a
valid and binding obligation of each of the Company and the
Shareholders, as the case may be, and enforceable against each of
them in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or
other laws affecting the enforcement of creditors' rights
generally.
A. CONSENTS. MTLM shall have received written consents to the
transactions contemplated hereby and waivers of rights to terminate or
modify any material rights or obligations of the Company from any Person from
whom such consent or waiver is required under any Designated Contract or
instrument as of a date not more than ten days prior to the Closing Date, or
who, as a result of the transactions contemplated hereby, would have such
rights to terminate or modify such Contracts or instruments, either by the
terms thereof or as a matter of law.
A. GOVERNMENTAL APPROVALS. All consents, authorizations and
approvals from, and all declarations, filings and registrations with any
governmental authority required to consummate the transactions contemplated by
this Agreement, including those set forth on Schedule 3.6, shall have been
obtained or made without the imposition of any material conditions, and all
applicable waiting periods, if any, under the HSR Act shall have expired or
terminated.
A. SECURITIES LAWS. MTLM shall have received all necessary
consents and otherwise complied with any state Blue Sky or securities laws
applicable to the issuance of MTLM securities, in connection with the
transactions contemplated hereby.
A. COMPANY SECURITIES. At the Closing, the Shareholders shall have delivered
all certificates evidencing the Common Stock of the Company held by them,
34
together with stock powers duly executed in blank, with signatures guaranteed,
and otherwise in form acceptable to MTLM.
A. NO ADVERSE LITIGATION. There shall not be pending or
threatened any action or proceeding by or before any court or other
governmental body which shall seek to restrain, prohibit, invalidate or collect
damages arising out of the Agreement or any other transaction contemplated
hereby, and which, in the judgment of MTLM, makes it inadvisable to proceed
with the Agreement and other transactions contemplated hereby.
A. OTHER CLOSING DELIVERIES. At Closing, MTLM shall have received:
1. an executed lease from the owners of the Company's Yale Street
property in Houston, Texas (excluding the approximately two acres on the
east side of Yale and the property with the building operating as Heights
Armature Works) in favor of MTLM or HCS in a form acceptable to MTLM and such
owners.
1. each Other Agreement executed by the Company and/or the
Shareholders, as the case may be, who is a party thereto;
1. the stock books, stock ledgers, minute books, corporate seal
and other books and records of the Company; and
1. all other previously undelivered agreements, certificates,
documents, instruments or writings required to be delivered by the Company
and/or the Shareholders at or prior to the Closing pursuant to this Agreement
or otherwise in connection herewith, duly executed by each of the Company
and/or the Shareholders, as the case may be, who is a party thereto.
A. LICENSES AND PERMITS. Each of the licenses and permits set
forth on Schedule 3.22 shall be in full force and effect.
I.
CONDITIONS TO THE OBLIGATIONS
OF THE COMPANY AND THE SHAREHOLDERS
The obligations of the Company and each of the Shareholders hereunder
shall be subject to the fulfillment at or prior to the Closing Date of the
following conditions, any or all of which may be waived in whole or in part by
the Company and the Shareholders:
A. ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
OBLIGATIONS. The representations and warranties of MTLM and Acquisition
contained in this Agreement shall be true and correct in all material respects
at and as of
35
the Closing Date except (i) for changes specifically permitted by or
disclosed pursuant to this Agreement, and (ii) that those representations and
warranties which address matters only as of a particular date shall remain true
and correct as of such date. MTLM shall have performed and complied with all
of their obligations required by this Agreement to be performed or complied in
all material respects with at or prior to the Closing Date. MTLM and
Acquisition shall have delivered to the Shareholders a certificate, dated as of
the Closing Date, and signed by an executive officer, certifying that such
representations and warranties are true and correct in all material respects
and that all such obligations have been performed and complied with.
A. MTLM PURCHASE PRICE. At the Closing, MTLM shall have delivered
to the Shareholders the Merger Consideration.
A. NO ADVERSE LITIGATION. There shall not be pending or
threatened any action or proceeding by or before any court or other
governmental body which shall seek to restrain, prohibit, invalidate or collect
damages arising out of the Agreement or any of the transactions contemplated
hereby, and which in the judgment of the Shareholders makes it inadvisable to
proceed with the Agreement or any other transaction contemplated hereby.
A. OPINION OF COUNSEL. The Shareholders shall have received an
opinion dated as of the Closing Date from counsel for MTLM and Acquisition,
in form and substance acceptable to the Shareholders, to the effect that:
(i) MTLM and Acquisition are corporations validly existing
and in good standing under the laws of the State of Delaware and
Texas, respectively, and are authorized to carry on the business
now conducted by them and to own or lease the properties now owned
or leased by them;
(ii) MTLM and Acquisition have obtained all necessary
authorizations and consents of their Board of Directors and all
corporate acts required to be taken have been taken, to effect the
transactions contemplated in this Agreement;
(iii) such counsel has no actual knowledge (without any
independent investigation of any sort) of any litigation,
proceeding or investigation pending or threatened which would
result in any material adverse change in the properties, or
business or in the condition of MTLM, or which questions the
validity of this Agreement;
(iv) this Agreement is a valid and binding obligation of MTLM
and Acquisition, and enforceable against it in accordance with its
terms, except as enforcement may be limited by bankruptcy,
insolvency,
36
reorganization, moratorium or other laws affecting the
enforcement of creditors' rights generally;
(v) the MTLM Common Stock (including the Escrow Shares) is
(1) duly authorized and validly issued and is listed for trading
on The Nasdaq National Market System; (2) not subject to any
preemptive rights; (3) free and clear of all Liens, claims and
encumbrances; and (4) represented by certificates which have all
appropriate legends therein which are required by law or any
agreements to which such shares or certificates are subject.
(vi) such counsel has no actual knowledge (without any
independent investigation of any sort) that any event has occurred
or state of facts exist which would constitute a breach of any of
the representations and warranties made by MTLM and/or Acquisition
pursuant to Article II of this Agreement;
(vii) no approval, consent or withholding of the objection on
the part of, or filing, registration or qualification with, any
governmental body, federal, state or local, is necessary in
connection with the performance by MTLM or Acquisition of any
matter required of MTLM or Acquisition thereunder;
(viii) based on the accuracy of the representations of the
Shareholders set forth in Section 3.28 hereof, the issuance and
delivery of the Common Stock is an exempt transaction under the
Securities Act of 1933, as amended (the "Act"), does not require
the registration thereof under the Act and will not violate any
federal or state securities laws; and
(ix) no preemptive rights of shareholders (or other purchase
rights) exist with respect to any of the MTLM Common Stock
(including the Escrow Shares) under applicable law, MTLM's
Articles of Incorporation or Bylaws, or any agreement or
instrument to which MTLM is a party.
A. NO MATERIAL ADVERSE CHANGE OR EFFECT OR DESTRUCTION OF
PROPERTY. Between the date hereof and the Closing Date, (i) there shall
have been no Material Adverse Change or Effect to MTLM (other than its
acquisition of other similar businesses), (ii) there shall have been no adverse
federal, state or local legislative or regulatory change affecting in any
material respect the services, products or business of MTLM, and (iii) none of
the properties and assets of MTLM shall have been damaged by fire, flood,
casualty, act of God or the public enemy or other cause (regardless of
insurance coverage for such damage) which damages may have a Material Adverse
Change or Effect thereon, and there shall have been delivered to the Company a
certificate to that effect, dated the Closing Date and signed by or on behalf
of MTLM.
37
A. SHAREHOLDERS' EMPLOYMENT AGREEMENTS. The Shareholders and
other necessary parties shall have entered into the Employment Agreements
described in Section 5.13 hereof.
A. RELEASE OF GUARANTEES/COLLATERAL. MTLM shall have caused the
guarantees of the Shareholders for indebtedness of the Company to Merchants
Bank in Houston, Texas, together with any collateral belonging to the
Shareholders or Heights Armature Works (or any party other than the Company as
of the Closing) including all of the real property, to be released and the
Shareholders shall have received a consent from Merchants Bank to the
transactions contemplated under this Agreement.
7.8 GOVERNMENTAL APPROVALS. All consents, authorizations and approvals
from, and all declarations, filings and registrations with any governmental
authority required to consummate the transactions contemplated by this
Agreement, including those set forth on Schedule 3.6, shall have been obtained
or made without the imposition of any material conditions, and all applicable
waiting periods, if any, under the HSR Act shall have expired or terminated.
7.9 DELIVERY OF LEASE. At Closing, the Shareholders shall have received
an executed Lease from MTLM or HCS, as described in Section 6.10(a) above.
I.
INDEMNIFICATION
A. AGREEMENT BY THE SHAREHOLDERS TO INDEMNIFY. The Shareholders
agree to severally indemnify, defend and hold MTLM harmless (with each
Shareholder's liability to MTLM being equal to such Shareholder's proportionate
share, as set forth in Schedule 3.1 hereto, of any Indemnifiable Damages,
subject to the limitations set forth in Section 8.1(e) below) from and against
the aggregate of all Indemnifiable Damages (as defined below).
1. For purposes of this Agreement, "Indemnifiable Damages" means,
without duplication, the aggregate of all actual expenses, losses, costs,
deficiencies, liabilities and damages (including, without limitation, related
counsel and paralegal fees and expenses) incurred or suffered by MTLM, on a
pre-tax consolidated basis to the extent (i) resulting from any breach of a
representation or warranty made by the Company or the Shareholders in or
pursuant to this Agreement, (ii) resulting from any breach of the covenants or
agreements made by the Company or the Shareholders pursuant to this Agreement,
(iii) resulting from any material inaccuracy in any certificate delivered by
the Company or any Shareholders pursuant to this Agreement or (iv) resulting
from any environmental matter listed on Schedule 3.12 or Schedule 3.13.
38
1. Without limiting the generality of the foregoing, with respect
to the measurement of Indemnifiable Damages, MTLM shall have the right to be
put in the same pre-tax consolidated financial position as MTLM would have been
in had each of the representations and warranties of the Shareholders hereunder
been true and correct and had the covenants and agreements of the Company and
the Shareholders hereunder been performed in full.
1. Each of the covenants, representations and warranties made by
the Shareholders in this Agreement or pursuant hereto shall survive for a
period of 12 months after the Closing Date except the representations and
warranties of the Shareholders contained in Sections 3.1 through 3.5 shall not
expire, but shall continue indefinitely and the Shareholders shall be obligated
to indemnify MTLM for the environmental matters listed on Schedule 3.12 and
Schedule 3.13 for a period of ten (10) years from the Closing. No claim for
the recovery of Indemnifiable Damages or with respect to the representations
and warranties may be asserted by MTLM against the Shareholders after such
representations and warranties shall expire, provided, however, that claims for
Indemnifiable Damages first asserted within the applicable period shall not
thereafter be barred. Notwithstanding any knowledge of facts determined or
determinable by any party by investigation, each party shall have the right to
fully rely on the representations, warranties, covenants and agreements of the
other parties contained in this Agreement or in any other documents or papers
delivered in connection herewith. Each representation, warranty, covenant and
agreement of the parties contained in this Agreement is independent of each
other representation, warranty, covenant and agreement.
1. If MTLM believes it is entitled to a claim for any
Indemnifiable Damages hereunder, MTLM shall promptly give written notice to
the Shareholders of such claim and the amount or the estimated amount of such
claim, and the basis for such claim. If the Shareholders do not pay the amount
of the claim for Indemnifiable Damages to MTLM within 10 days, then MTLM may
exercise its respective rights under Section 8.4 and/or take any action or
exercise any remedy available to it by appropriate legal proceedings to collect
the Indemnifiable Damages.
1. Notwithstanding anything to the contrary contained in this
Section 8.1, the Shareholders' liability for Indemnifiable Damages shall
be limited as follows:
a) MTLM shall have no claim for Indemnifiable Damages unless and
until all Indemnifiable Damages incurred by MTLM exceed an aggregate of
$200,000, in which event the Shareholders shall be liable for only such
Indemnifiable Damages in excess of $200,000;
a) the total amount of Indemnifiable Damages for which the
Shareholders shall be liable to MTLM shall not exceed the value of the
Merger Consideration, which shall be valued as provided in Section 8.4(a)(iv).
39
1. The remedies set forth in this Section 8.1 shall be the
exclusive remedies of MTLM under this Agreement.
A. AGREEMENT BY MTLM TO INDEMNIFY. MTLM agrees to indemnify,
defend and hold the Shareholders harmless from and against the aggregate of all
Shareholders Indemnifiable Damages (as defined below).
1. For purposes of this Agreement, "Shareholders Indemnifiable
Damages" means, without duplication, the aggregate of all expenses, losses,
costs, deficiencies, liabilities and damages (including, without limitation,
reasonable related counsel and paralegal fees and expenses) incurred or
suffered by the Shareholders, on a pre-tax consolidated basis, to the extent
(i) resulting from any breach of a representation or warranty made by MTLM or
Acquisition in or pursuant to this Agreement, or (ii) resulting from any breach
of the covenants or agreements made by MTLM or Acquisition in or pursuant to
this Agreement, (iii) resulting from any inaccuracy in any certificate
delivered by MTLM or Acquisition pursuant to this Agreement.
40
1. Without limiting the generality of the foregoing, with respect
to the measurement of Shareholders Indemnifiable Damages, the Shareholders
have the right to be put in the same pre-tax consolidated financial position as
he, she or it would have been in had each of the representations and warranties
of MTLM hereunder been true and correct and had the covenants and agreements of
MTLM hereunder been performed in full.
1. Each of the covenants, representations and warranties made by
MTLM and Acquisition in this Agreement or pursuant hereto shall survive
for a period of one year after the Closing Date, notwithstanding any
investigation at any time made by or on behalf of the Shareholders, except that
the representations and warranties of MTLM and Acquisition contained in
Sections 2.1 through 2.5 and 2.9 shall not expire but shall continue
indefinitely. No claim for the recovery of Shareholders Indemnifiable Damages
may be asserted by the Shareholders against MTLM after such representations and
warranties shall thus expire, provided, however, that claims for Shareholder
Indemnifiable Damages first asserted within the applicable period shall not
thereafter be barred. Notwithstanding any knowledge of facts determined or
determinable by any party by investigation, each party shall have the right to
fully rely on the representations, warranties, covenants and agreements of the
other parties contained in this Agreement or in any other documents or papers
delivered in connection herewith. Each representation, warranty, covenant and
agreement of the parties contained in this Agreement is independent of each
other representation, warranty, covenant and agreement.
1. In the event that the Shareholders believe they are entitled
to a claim for any Shareholder Indemnifiable Damages hereunder, the
Shareholders shall promptly give written notice to MTLM of such claim and the
amount or the estimated amount of such claim, and the basis for such claim. If
MTLM does not pay the amount of the claim for Shareholders Indemnifiable
Damages to the Shareholders (according to each Shareholder's proportionate
share, as set forth in Schedule 3.1 hereof) within ten (10) days, then the
Shareholders, or either of them, may exercise any remedy available to them by
appropriate legal proceedings to collect the Shareholders Indemnifiable
Damages.
1. Notwithstanding anything to the contrary contained in this
Section 8.2, the Shareholders shall have no claim for Shareholder
Indemnifiable Damages unless and until all Shareholder Indemnifiable Damages
incurred by the Shareholders shall exceed an aggregate of $200,000, in which
event MTLM shall be liable for only such Shareholder Indemnifiable Damages in
excess of $200,000.
1. The remedies set forth in this Section 8.2 shall be the
exclusive remedies of the Shareholders under this Agreement.
41
A. CONDITIONS OF INDEMNIFICATION. The obligations and liabilities
of the Shareholders and MTLM hereunder with respect to their respective
indemnities pursuant to this Article VIII resulting from any claim or other
assertion of liabilities by third parties (hereinafter called collectively
"Claims"), shall be subject to the following terms and conditions:
1. the party seeking indemnification (the "Indemnified Party")
must give the other party or parties, as the case may be (the "Indemnifying
Party"), notice of any such Claim 10 business days after the Indemnified Party
receives notice thereof;
1. the Indemnifying Party shall have the right to undertake, by
counsel or other representatives of its own choosing, the defense of such
Claim; provided, however, if a Claim is made against MTLM, then MTLM shall have
the right to control the defense of the Claim, with MTLM's attorneys being
reasonably available for consultation with the Shareholders' counsel.
1. if the Indemnifying Party shall elect not to undertake such
defense, or within a reasonable time after notice of any such Claim from
the Indemnified Party shall fail to defend, the Indemnified Party (upon further
written notice to the Indemnifying Party) shall have the right to undertake the
defense, compromise or settlement of such Claim, by counsel or other
representatives of its own choosing, on behalf of and for the account and risk
of the Indemnifying Party (subject to the right of the Indemnifying Party to
assume defense of such Claim at any time prior to settlement, compromise or
final determination thereof);
1. anything in this Section 8.3 to the contrary notwithstanding,
(A) the Indemnified Party shall have the right, at its own cost and expense, to
have its own counsel to protect its own interests and participate in the
defense, compromise or settlement of the Claim, (B) the Indemnifying Party
shall not, without the Indemnified Party's written consent, settle or
compromise any Claim or consent to entry of any judgement which does not
include as an unconditional term thereof the giving by the claimant or the
plaintiff to the Indemnified Party of a release from all liability in respect
of such Claim, and (C) the Indemnified Party, by counsel or other
representatives of its own choosing and at its sole cost and expense, shall
have the right to consult with the Indemnifying Party and its counsel or other
representatives concerning such Claim, and the Indemnifying Party and the
Indemnified Party and their respective counsel shall cooperate with respect to
such Claim.
A. ESCROW SHARES AND RIGHTS OF SETOFF TO SECURE THE SHAREHOLDERS'
INDEMNIFICATION OBLIGATION. As security for the agreement by the Shareholders
to indemnify and hold MTLM harmless as described in Section 8.1, at the
Closing, MTLM shall cause the certificates representing the Escrow Shares to be
held under the Escrow Agreement.
42
1. MTLM may set off against the Escrow Shares (provided, however,
the Shareholders may elect to satisfy any indemnification obligation payable in
Escrow Shares by a payment in cash) for any Shareholder Indemnifiable Damages
for which Shareholders may be responsible pursuant to this Agreement, subject,
however, to the following terms and conditions:
a) MTLM shall give written notice to the Shareholders of any claim for
Shareholders Indemnifiable Damages hereunder, which notice shall set forth (i)
the amount of Shareholders Indemnifiable Damages, and (ii) the basis of such
claim;
a) Such set off shall be effected on the later to occur of the expiration of
10 business days from the date of such notice (the "Notice of Contest Period")
or, if such claim is contested, the date the dispute is resolved, and such set
off shall be charged proportionally (as to each Shareholder) against the Escrow
Shares;
a) If, prior to the expiration of the Notice of Contest Period, the
Shareholders shall notify MTLM in writing of an intention to dispute the claim
and if such dispute is not resolved within 30 days after expiration of such
period (the "Resolution Period"), then either MTLM or either of the
Shareholders may elect that such dispute shall be resolved by a committee of
three arbitrators (one appointed by the Shareholders, one appointed by MTLM and
one appointed by the two arbitrators so appointed), which shall be appointed
within 30 days after the expiration of the Resolution Period. The arbitrators
shall abide by the rules of the American Arbitration Association and their
decision shall be made within 45 days of being appointed and shall be final and
binding on all parties;
a) For purposes of this Section 8.4, the value for purposes of set off of the
Escrow Shares shall be the average of the closing bid and asked prices of
MTLM's common stock on The Nasdaq National Market System for the 20 business
days prior to the date of MTLM's claim for indemnification.
1. Except with respect to shares transferred pursuant to the
foregoing right of set off (and in the case of such shares, until the same
are transferred), all Escrow Shares shall be deemed to be owned by the
Shareholders and the Shareholders shall be entitled to vote the same; provided,
however, that there shall also be deposited with the Escrow Agreement subject
to the terms of this Section 8.4, all shares of MTLM Common Stock issued to the
Shareholders as a result of any stock dividend or stock split and all cash
issuable to the Shareholders as a result of any cash dividend, with respect to
the Escrow Shares. All stock and cash issued or paid upon Escrow Shares shall
be distributed to the person or entity entitled to receive such Escrow Shares
together with such Escrow Shares.
43
I.
SECURITIES LAW MATTERS
The Parties agree as follows with respect to the sale or other disposition
after the Closing Date of MTLM securities and related matters:
A. DISPOSITION OF MTLM SECURITIES. Each of the Shareholders
represents and warrants that Common Stock of MTLM being acquired by him
hereunder is being acquired and will be acquired for his own account and will
not be sold or otherwise disposed of, except pursuant to (i) an exemption from
the registration requirements under the Securities Act, which does not require
the filing by MTLM with the SEC of any registration statement, offering
circular or other document, in which case the Shareholders shall first supply
to MTLM an opinion of counsel (which counsel and opinions shall be satisfactory
to MTLM) that such exception is available, or (ii) an effective registration
statement filed by MTLM with the SEC under the Securities Act.
A. PIGGYBACK REGISTRATION RIGHTS.
1. If, at any time after the date hereof, MTLM proposes to
register under the Securities Act any shares of MTLM Common Stock for sale
by it pursuant to an underwritten public offering of the MTLM Common Stock or
other equity securities for sale by it (except with respect to registration
statements filed on Form S-4 or such other forms as shall be prescribed under
the Securities Act for the same purposes as such form), it will at each such
time, prior to the filing of any such registration statement, give written
notice to the Shareholders who then hold shares of MTLM Common Stock of its
intention so to do and, upon the written request (which must specify the number
of shares of MTLM Common Stock to participate in such underwritten offering) of
any of the Shareholders delivered to MTLM within five business days of receipt
of MTLM's notice, MTLM will use its best efforts to cause any MTLM Common Stock
issued to such requesting Shareholder pursuant to the Merger as to which
registration shall have been so requested to be included in the securities to
be covered by the registration statement proposed to be filed by MTLM for sale
by it in such offering, all to the extent requisite to permit the sale or other
disposition (in accordance with the written request of the Shareholders as
aforesaid) by such of the Shareholders of such MTLM Common Stock in such
offering as have so requested such registration. Nothing contained in this
Section 9.2 shall, however, limit MTLM's right to cancel, postpone or withdraw
any such proposed registration for any reason.
44
1. If the request by the Shareholders to MTLM is a response in
connection with a sale of MTLM Common Stock or other equity securities pursuant
to a public underwriting, it shall be on the same terms and conditions as the
shares of MTLM Common Stock to be registered, if any, and sold through
underwriters under such registration; provided, however, that as a condition to
such inclusion the requesting Shareholders shall execute an underwriting
agreement acceptable to the underwriters and, if requested, a custody agreement
having such customary terms as the underwriters shall request, including
indemnification, and if the managing underwriter determines and advises in
writing that the inclusion in the underwriting of all MTLM Common Stock
proposed to be included by the requesting Shareholders and any other shares of
MTLM Common Stock sought to be registered by any other stockholder of MTLM
exercising rights comparable to those of the Shareholders under this Agreement
(the "Other Common Stock") would, in its reasonable and good faith judgment,
interfere with the successful marketing of the securities proposed to be
registered for underwriting by MTLM or by any holder of MTLM Common Stock
having the right to require MTLM to file a registration statement to register
such MTLM Common Stock, then the number of shares of MTLM Common Stock and
Other Common Stock requested to be included in the underwriting shall be
reduced pro rata among the stockholders of MTLM and the holders of Other Common
Stock requesting such registration and inclusion in the underwriting and may,
in the determination of such managing underwriter and consistent with pro rata
reduction, be reduced to zero.
1. If and whenever MTLM is obligated by the provisions of this
Agreement to effect the registration of any MTLM Common Stock pursuant to
subparagraph (a) above, MTLM will, subject to the provisions of this Section
9.2:
a) as expeditiously as reasonably practicable, prepare and file
with the SEC a registration statement on the appropriate form with respect to
such MTLM Common Stock and seek to cause such registration statement to become
and remain effective;
a) as expeditiously as reasonably practicable, prepare and file
with the SEC such amendments and supplements to such registration statement
and the prospectus used in connection therewith as may be necessary to keep
such registration statement effective and to comply with the provisions of the
Securities Act with respect to the disposition of such MTLM Common Stock
covered by such registration statement in accordance with the intended method
of distribution set forth in such registration statement;
a) as expeditiously as reasonably practicable, furnish to each of
the Shareholders selling MTLM Common Stock registered, or to be registered
under the Securities Act, such number of copies of prospectuses and preliminary
prospectuses in conformity with requirements of the Securities Act, and such
other documents as such Shareholders may reasonably request, in order to
facilitate the public sale or other disposition of such MTLM Common Stock owned
by such Shareholders; provided, however, that the obligation of MTLM to deliver
copies of prospectuses or preliminary prospectuses to
45
such Shareholders shall be subject to the receipt by MTLM of reasonable
assurances from such Shareholders that they will comply with the applicable
provisions of the Securities Act and of such other securities laws as may
be applicable in connection with any use by it of any prospectuses or
preliminary prospectuses;
a) as expeditiously as reasonably practicable, furnish, at the request of the
Shareholders requesting registration pursuant to this Agreement, on the date
that such MTLM Common Stock is to be delivered to the underwriters for sale
pursuant to such registration or, if such MTLM Common Stock is not being sold
through underwriters, on the date the registration statement with respect to
such MTLM Common Stock becomes effective an opinion, dated such date, of the
independent counsel representing MTLM for the purposes of such registration,
addressed to the underwriters, if any, and to the Shareholders making such
request, stating that such registration statement became effective under the
Securities Act and the (A) to the best knowledge of such counsel, no stop order
suspending the effectiveness of such registration statement has been instituted
or is pending or contemplated under the Securities Act; (B) the registration
statement, the related prospectus, and each amendment or supplement thereto,
including all documents incorporated by reference therein, comply as to form in
all material respects with the requirements of the Securities Act and the
applicable rules and regulations of the SEC thereunder (except that such
counsel need express no opinion as to financial statements or other financial
or statistical or reserve date contained or incorporated by reference therein);
and (C) no facts have come to the attention of such counsel that caused such
counsel to believe (with customary qualifications) that either the registration
statement or the final prospectus, or any amendment or supplement thereto,
including all documents incorporated by reference therein, in light of the
circumstances under which they were made, contains any untrue statement of a
material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading (except that such
counsel need express no belief as to financial statements or other financial or
statistical or reserve data contained or incorporated by reference therein or
as to any information provided by the Shareholders or any underwriter for
inclusion therein); and (ii) a letter, dated such date, from the independent
certified public accountants of MTLM, addressed to the underwriters, if any,
and to the Shareholders making such request, stating that they are independent
certified public accountants within the meaning of the Securities Act and that
in the opinion of such accountants, the financial statements and other
financial data of MTLM included in the registration statement or the
prospectus, or any amendment or supplement thereto, including all documents
incorporated by reference therein, comply as to form in all material respects
with the applicable accounting requirements of the Securities Act. Such letter
from the independent certified public accountants shall additionally cover such
other customary financial matters (including information as to the period
ending not more than five business days prior to the date of such letter) with
respect to the registration in respect of which such letter is being given as
such underwriters, if any, or the Shareholders making such request may
reasonably request;
46
a) as expeditiously as reasonably practicable, use its best efforts to
register or qualify MTLM Common Stock covered by such registration statement
under such other securities laws of such United States jurisdictions as the
Shareholders making such request shall reasonably request (considering the
nature and size of the offering) and do any and all other acts and things
which may be necessary or desirable to enable the Shareholders making such
request to consummate the public sale or other disposition in such
jurisdictions of MTLM Common Stock owned by such Shareholders; provided,
however, that MTLM shall not be required to qualify to transact business as a
foreign corporation in any jurisdiction in which it would otherwise not be
required to be so qualified or to take any action which would subject it to
general service of process in any jurisdiction in which it is not then so
subject;
a) bear all Registration Expenses (as defined below) in connection with all
registrations hereunder; provided, however, that all Selling Expenses (as
defined below) of MTLM Common Stock held by the Shareholders and all fees and
disbursements of counsel for the Shareholders in connection with each
registration pursuant to this Agreement shall be borne by such Shareholders pro
rata in proportion to the number of shares of MTLM Common Stock covered thereby
being sold or in such proportion as they may agree. For purposes of this
Section 9.2, expenses incurred by MTLM in complying with this Agreement,
including, without limitation: (i) all registration and filing fees; (ii) all
printing expenses; (iii) all fees and disbursements of counsel for MTLM; (iv)
all blue sky fees and expenses; and (v) all fees and expenses of accountants
for MTLM are herein referred to as "Registration Expenses." All underwriting
fees and discounts and brokerage and selling commissions and fees and expenses
of the counsel for the Shareholders and any underwriter's counsel applicable to
the sales in connection with any such registration are herein referred to as
"Selling Expenses."
47
1. In the event of a registration of any MTLM Common Stock under
the Securities Act pursuant to this Agreement, MTLM will indemnify and hold
harmless each of the Shareholders and any other Person, if any, who controls
such Shareholders within the meaning of Section 15 of the Securities Act,
against any losses, claims, damages or liabilities, joint or several, to which
such Shareholders or such controlling Person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities or actions in respect thereof arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained, on
the effective date thereof, in any registration statement under which such MTLM
Common Stock was registered under the Securities Act, any preliminary
prospectus distributed with the consent of MTLM or final prospectus contained
therein, or any amendment thereof or supplement thereto, including all
documents incorporated by reference therein, or arise out of or are upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse each of such Shareholders and each such controlling Person for
any legal or any other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that MTLM will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, such preliminary prospectus, such final
prospectus or such amendment or supplement, including all documents
incorporated by reference therein, in reliance upon and in conformity with
written information furnished to MTLM by or on behalf of any of the
Shareholders or a controlling Person of any of the Shareholders specifically
for use in the preparation thereof.
48
In the event of any registration of any MTLM Common Stock under the
Securities Act pursuant to this Agreement, each of the selling
Shareholders of such MTLM Common Stock will severally indemnify and hold
harmless MTLM and each Person, if any, who controls MTLM within the
meaning of Section 15 of the Securities Act, each officer of MTLM who
signs the registration statement, each director of MTLM and each
underwriter (if any) and each Person who controls any underwriter (if
any) within the meaning of Section 15 of the Securities Act, against any
and all such losses, claims, damages, liabilities or actions which MTLM
or such officer, director, underwriter (if any) or controlling Person may
become subject under the Securities Act or otherwise, and will reimburse
MTLM, each such officer, director, underwriter (if any) and controlling
Person for any legal or any other expenses reasonably incurred by such
party in connection with investigating or defending any such loss, claim,
damage, liability or action, if (a) any such loss, claim, damage,
liability or action in respect thereof arises out of or is based upon any
untrue statement or alleged untrue statement of any material fact
contained in any such registration statement or any such prospectus, or
any amendment thereof or supplement thereto, or arises out of or is based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading which was furnished by such selling Shareholder and (b)
any such statement or omission of a material fact was made in reliance
upon and in conformity with information furnished to MTLM by or on behalf
of the Shareholders specifically for use in connection with the
preparation of such registration statement or prospectus. In connection
with any transaction contemplated by Section 4.2 hereof, the Shareholders
also agree to indemnify each such underwriter and each Person who
controls any such underwriter as set forth above within the meaning of
Section 15 of the Securities Act as may reasonably and customarily be
requested by the underwriters in connection with any underwritten
offering of such MTLM Common Stock.
Promptly after receipt by any indemnified Person of notice of any
claim or commencement of any action in respect of which indemnity is to
be sought against an indemnifying Person pursuant to this Agreement, such
indemnified Person shall promptly notify the indemnifying Person in
writing of such claim or of the commencement of such action, and, subject
to provisions hereinafter stated, in case any such action shall be
brought against an indemnified Person and such indemnifying Person shall
have been notified of the same, such indemnifying Person shall be
entitled to participate therein, and, to the extent it shall wish, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified Person, and after notice from the indemnifying Person to such
indemnified Person of its election to assume the defense thereof, such
indemnifying Person shall not be liable to such indemnified Person in
connection with the defense thereof; provided, however, if there exists
or will exist a conflict of interest which would make it inappropriate in
the reasonable judgment of the
49
indemnified Person for the same counsel to represent both the indemnified
Person and such indemnifying Person then such indemnifying Person shall be
entitled to retain its own counsel at the expense of such indemnifying
Person; provided further, however, the indemnifying Person shall not be
required to pay for more than one separate counsel for all of the
indemnified Persons in addition to any local counsel.
1. If Rule 144 or Rule 145 as promulgated under the Securities Act
or any successor or similar rule or statute shall permit the sale of the
shares of MTLM Common Stock received by the Shareholders in compliance with the
conditions thereof and the provisions thereof, the rights of the Shareholders
as to registration provided for in this Agreement as to such MTLM Common Stock
shall terminate immediately.
A. LEGEND. Each of the MTLM Common Stock certificates shall bear
the following legend:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE MAY NOT BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF BY THE HOLDER EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT OF
1933, AS AMENDED WITH RESPECT THERETO OR IN ACCORDANCE WITH AN OPINION OF
COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER THAT AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
MTLM may, unless a registration statement is in effect covering MTLM
Securities, place stop transfer orders with its transfer agents with respect to
such certificates in accordance with federal securities laws.
I.
DEFINITIONS
A. DEFINED TERMS. As used herein, the following terms shall have
the following meanings:
"Aboveground Storage Tanks" defined in Section 3.13 (h).
"Affiliate" shall have the meaning ascribed to it in Rule
12b-2 of the General Rules and Regulations under the Exchange
Act, as in effect on the date hereof.
"Asbestos" or "Asbestos-containing material" defined in Section
3.13 (j).
50
"Assets" defined in Section 3.15 (a).
"CERCLA" defined in Section 3.13 (e).
"Claims" defined in Section 8.3.
"Closing" defined in Section 1.2.
"Code" defined in Section 3.18 (b).
"Common Stock" means shares of MTLM's common stock, $.01 par value.
"Company" means, unless the context indicates otherwise, the
Company.
"Contract" means any indenture, lease, sublease, license,
loan agreement, mortgage, note, indenture, restriction, will,
trust, commitment, obligation or other contract, agreement or
instrument, whether written or oral.
"Current Balance Sheet" defined in Section 3.9.
"Designated Contracts" defined in Section 3.25.
"Discharge" defined in Section 3.13 (f).
"Employee Benefit Plans" defined in Section 3.18 (a).
"Environmental Assessment" defined in Section 5.9.
"Environmental, Health and Safety Laws" defined in Section 3.13
(k).
"EPCRA" defined in Section 3.13 (e).
"ERISA" defined in Section 3.18 (a).
"Escrow Agreement" referred to in Section 1(a)(i) and attached as
Exhibit A.
"Escrow Shares" defined in Section 1(a)(i).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"FIFRA" defined in Section 3.13 (e).
51
"Financial Statements" defined in Section 3.9.
"Fixed Assets" defined in Section 3.15 (b).
"GAAP" means generally accepted accounting principles in
effect in the United States of America for the period indicated.
"Governmental Authority" means any nation or government, any
state, regional, local or other political subdivision thereof, and
any entity or official exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining
to government.
"Hazardous Substances" defined in Section 3.13 (e).
"Immigration Act" defined in Section 3.16 (c).
"Indemnifiable Damages" defined in Section 8.1 (a).
"Indemnified Party" defined in Section 8.3 (a).
"Insurance Policies" defined in Section 3.20.
"Intellectual Property" defined in Section 3.24.
"Knowledge" means (a) in the case of an individual, actual,
conscious knowledge of information by such individual or (b) in the case
of a corporation, limited liability company or similar entity, actual,
conscious knowledge by a current officer thereof who devotes substantive
attention to matters of such nature in the ordinary course of his
employment with such corporation, limited liability company or other
entity.
"Leased Premises" defined in Section 3.14 (b).
"Leases" defined in Section 3.14 (b).
"Licenses" defined in Section 3.13 (b).
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including, but not
limited to, any conditional sale or other title retention
agreement, any lease in the nature thereof, and the filing of or
agreement to give any financing statement under the Uniform
Commercial Code or comparable law or any jurisdiction in
connection with such mortgage, pledge, security interest,
encumbrance, lien or charge).
52
"Material Adverse Change (or Effect)" means a change (or effect),
in the condition (financial or otherwise), properties, assets,
liabilities, rights, obligations, operations, business or prospects which
change (or effect) individually or in the aggregate, is materially
adverse to such condition, properties, assets, liabilities, rights,
obligations, operations, business or prospects.
"Material Customers" defined in Section 3.26.
"Merger Consideration" defined in Section 1.2(a).
"MPPA Plan" defined in Section 3.18 (d).
"Other Agreements" defined in Section 5.12.
"OSHA" defined in Section 3.13 (e).
"Owned Properties" defined in Section 3.14 (a).
"Permits" defined in Section 3.22.
"Person" means an individual, partnership, corporation,
business trust, joint stock company, estate, trust, unincorporated
association, joint venture, Governmental Authority or other
entity, of whatever nature.
"PBGC" defined in Section 3.18 (f).
"RCRA" defined in Section 3.13 (e).
"Receivables" defined in Section 3.21.
"Register", "registered" and "registration" refer to a
registration of the offering and sale of securities effected by
preparing and filing a registration statement in compliance with
the Securities Act and the declaration or ordering of the
effectiveness of such registration statement.
"Release" defined in Section 3.13 (f).
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as
amended.
"Shareholders" defined in the introductory paragraph of this
Agreement.
"Shareholders Indemnifiable Damages" defined in Section 8.2 (a).
53
"Tax Return" means any federal, state or local tax return,
filing or information statement required to be filed in connection
with or with respect to any Taxes; and
"Taxes" means all taxes, fees or other assessments,
including, but not limited to, income, excise, property, sales,
franchise, intangible, withholding, social security and
unemployment taxes imposed by any federal, state, local or foreign
governmental agency, and any interest or penalties related
thereto.
"Underground Storage Tanks" defined in Section 3.13 (h).
"Waste" defined in Section 3.13 (e).
A. OTHER DEFINITIONAL PROVISIONS.
1. All terms defined in this Agreement shall have the defined
meanings when used in any certificates, reports or other documents made or
delivered pursuant hereto or thereto, unless the context otherwise requires.
1. Terms defined in the singular shall have a comparable meaning
when used in the plural, and vice versa.
1. All matters of an accounting nature in connection with this
agreement and the transactions contemplated hereby shall be determined in
accordance with GAAP applied on a basis consistent with prior periods, where
applicable.
As used herein, the neuter gender shall also denote the masculine and
feminine, and the masculine gender shall also denote the neuter and feminine,
where the context so permits.
I.
TERMINATION, AMENDMENT AND WAIVER
A. TERMINATION. This Agreement may be terminated:
1. at any time prior to the Closing Date, by mutual written
consent of all of the parties hereto at any time prior to the Closing;
1. at any time prior to the Closing Date, by MTLM in the event of
a material breach by the Company or the Shareholders of any provision of
this Agreement;
54
1. at any time prior to the Closing Date, by the Shareholders or
the Company in the event of a material breach by MTLM of any provision of this
Agreement;
1. at any time prior to the Closing Date, by any of MTLM or the
Shareholders or the Company if the Closing shall not have occurred by December
31, 1997; provided, however, that neither MTLM, nor the Shareholders nor the
Company shall be entitled to terminate this Agreement pursuant to this Section
11.1(d), if such party's knowing or willful breach of this Agreement has
prevented the consummation of the transactions contemplated hereby.
A. EFFECT OF TERMINATION. Except as provided in Article VI, in
the event of termination of this Agreement pursuant to Section 11.1, this
Agreement shall forthwith become void; provided, however, that nothing herein
shall relieve any party from liability for the willful breach of any of its
representations, warranties, covenants or agreements set forth in this
Agreement, so long as a claim for such liability is made within ninety (90)
days after such termination.
I.
GENERAL PROVISIONS
A. NOTICES. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and shall be delivered by
certified or registered mail (first class postage prepaid), guaranteed
overnight delivery, or facsimile transmission if such transmission is confirmed
by delivery by certified or registered mail (first class postage pre-paid) or
guaranteed overnight delivery, to the following addresses and telecopy numbers
(or to such other addresses or telecopy numbers which such party shall
designate in writing to the other party):
1. IF TO MTLM TO:
Metal Management, Inc.
000 X. Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx Xxxxxx
Telecopy No.: (000) 000-0000
55
WITH A COPY TO:
Xxxxxx & Xxxxxx L.L.P.
0000 Xxxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Xx.
Telecopy No.: (000) 000-0000
1. IF TO THE COMPANY OR THE SHAREHOLDERS TO:
Xxxx Xxxxx
Xxxxxx Xxxxx
Houston Compressed Steel Corp.
000 Xxxx Xxxxxx
Xxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
WITH A COPY TO:
Xxxxxx X. Xxxxxxx
Dow, Xxxxxxx & Xxxxxxxx, P.C.
Nine Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
A. ENTIRE AGREEMENT. This Agreement (including the Exhibits and
Schedules attached hereto) and the other documents delivered at the Closing
pursuant hereto supersedes all prior agreements and understandings (oral or
written) between or among the parties with respect to such subject matter.
The Exhibits and Schedules constitute a part hereof as though set forth in
full above.
A. EXPENSES. Except as otherwise provided herein, MTLM shall pay
its own fees and expenses, including its own counsel fees, incurred in
connection with this Agreement or any transaction contemplated hereby, and the
Company shall pay its own fees and expenses, including its own counsel fees in
connection with this Agreement or any transaction contemplated hereby. Fees
and expenses attributable to the Shareholders shall be paid by the
Shareholders.
A. AMENDMENT; WAIVER. This Agreement may not be modified, amended,
supplemented, canceled or discharged, except by written instrument executed by
all parties. No failure to exercise, and no delay in exercising, any right,
power or privilege under this Agreement shall operate as a waiver, nor shall
any single or partial exercise of any right, power or privilege hereunder
preclude the exercise of any other right, power or privilege. No waiver of any
breach of any provision shall be deemed to be a waiver of any preceding or
succeeding breach of the same or any other provision, nor
56
shall any waiver be implied from any course of dealing between the parties.
No extension of time for performance of any obligations or other acts hereunder
or under any other agreement shall be deemed to be an extension of the time for
performance of any other obligations or any other acts. Except as otherwise
provided herein, the rights and remedies of the parties under this Agreement
are in addition to all other rights and remedies, at law or equity, that they
may have against each other.
A. BINDING EFFECT; ASSIGNMENT. The rights and obligations of this
Agreement shall bind and inure to the benefit of the parties and their
respective successors and assigns. Nothing expressed or implied herein shall
be construed to give any other Person any legal or equitable rights
hereunder. Except as expressly provided herein, the rights and obligations of
this Agreement may not be assigned by any of the Shareholders without the prior
written consent of MTLM or by MTLM without the prior written consent of the
Shareholders.
A. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together
shall constitute one and the same instrument.
A. INTERPRETATION. When a reference is made in this Agreement to
an article, section, paragraph, clause, schedule or exhibit, such reference
shall be deemed to be to this Agreement unless otherwise indicated. The
headings contained herein and on the Schedules are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement
or the Schedules. Whenever the words "include," "includes" or "including" are
used in this Agreement, they shall be deemed to be followed by the words
"without limitation." Time shall be of the essence in this Agreement.
A. GOVERNING LAW; INTERPRETATION. This Agreement shall be
construed in accordance with and governed for all purposes by the laws of
the State of Texas applicable to contracts executed and to be wholly performed
within such State.
A. ARM'S LENGTH NEGOTIATIONS. Each party herein expressly
represents and warrants to all other parties hereto that (a) before executing
this Agreement, said party has fully informed itself of the terms, contents,
conditions and effects of this Agreement; (b) said party has relied solely and
completely upon its own judgment in executing this Agreement; (c) said party
has had the opportunity to seek and has obtained the advice of counsel before
executing this Agreement; (d) said party has acted voluntarily and of its own
free will in executing this Agreement; (e) said party is not acting under
duress, whether economic or physical, in executing this Agreement; and (f) this
Agreement is the result of arm's length negotiations conducted by and among the
parties and their respective counsel.
57
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
METAL MANAGEMENT, INC.
By:
Xxxxxx X. Xxxxxxx
Executive Vice President
HCS ACQUISITION, INC.
By:
Xxxxxxx X. Xxxxxx
President
HOUSTON COMPRESSED STEEL CORP.
By:
Xxxx Xxxxx
President
Xxxx Xxxxx
Shareholder
Xxxxxx Xxxxx
Shareholder
58
INDEX OF SCHEDULES
Schedule 2.7 Related Party Matters
Schedule 2.12 Litigation
Schedule 3.1 Jurisdictions in which Qualified to do Business
Schedule 3.4 Capitalization
Schedule 3.5 Shareholders of the Company
Schedule 3.6 Violations; Conflicts; etc.
Schedule 3.8 Subsidiaries
Schedule 3.9 Financial Statements
Schedule 3.10 Changes since the Current Balance Sheet Date
Schedule 3.11 Liabilities
Schedule 3.12 Litigation
Schedule 3.13 Environmental Matters
Schedule 3.14(a) Owned Real Estate
Schedule 3.14(b) Leases
Schedule 3.15 Title to and Condition of Assets
Schedule 3.16 Compliance with Laws
Schedule 3.17 Labor and Employment Matters
Schedule 3.18 Employee Benefit Plans
Schedule 3.20 Insurance
Schedule 3.21 Billing and Receivable Variances
Schedule 3.22 Licenses and Permits
Schedule 3.23 Relationship with Customers & Suppliers
Schedule 3.25 Contracts
Schedule 3.30 D/B/A
Schedule 3.33 Asset Update Schedule
Schedule 3.34 Restrictions
Schedule 4.1 Conduct of Business Pending Closing
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INDEX OF EXHIBITS
Exhibit A Form of Escrow Agreement
Exhibit B Form of Employment Agreement with Xxxx Xxxxx
Exhibit B-1 Form of Employment Agreement with Xxxxxx Xxxxx
