EXHIBIT 10.22
PERSONAL PROPERTY
ASSET PURCHASE AGREEMENT
THIS PERSONAL PROPERTY ASSET PURCHASE AGREEMENT, made and entered into as
of February 8, 2002, by and among NEW YORK JOB DEVELOPMENT AUTHORITY d/b/a
EMPIRE STATE DEVELOPMENT CORPORATION, (the "Seller"), and DUNKIRK ACQUISITION,
LLC (the "Buyer") provides:
RECITALS
WHEREAS, Seller is the secured creditor of and has liens on certain assets
owned by EMPIRE SPECIALTY STEEL, INC. ("ESSI") located in Chautauqua County, New
York ("Facility"); and
WHEREAS, Seller desires to sell to Buyer substantially all of ESSI's
personal property constituting all of the Assets (as defined below) relating to
ESSI's business, and Buyer desires to purchase such Assets all on the terms and
conditions set forth below (the "Transaction"); and
NOW THEREFORE, in consideration of the promises and of the mutual
agreements and covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto, each intending to be legally bound, do hereby agree as follows:
ARTICLE 1
DEFINITIONS
INTENTIONALLY OMITTED
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ARTICLE 2
PURCHASE AND SALE
ARTICLE 2.1 AGREEMENT TO PURCHASE AND SELL. Subject to and in accordance
with the terms and conditions of this Agreement, at Closing, Buyer agrees to
purchase from Seller in a secured creditor's private sale pursuant to Article 9
of the New York Uniform Commercial Code, and Seller agrees to sell, in a secured
creditor's private sale pursuant to Article 9 of the New York Uniform Commercial
Code, on February 13, 2002, transfer, convey and assign all of its rights, title
and interests in and good and marketable title, free and clear of all claims,
liabilities, obligations, security interests, liens (including tax liens),
mortgages, leases or leasehold interests, encumbrances and rights of others of
any kind whatsoever (except as permitted in Article 2.5 below) to the following
assets (collectively, the "Assets"):
a) EQUIPMENT: machinery and equipment including all machine
tools, cranes, spare parts, operating supplies, mobile
equipment, office furniture, office equipment, computer
equipment (collectively or "PP&E") with respect to the
Facility, as listed on Appendix A attached hereto and
incorporated herein;
b) INVENTORY: Raw materials including scrap, work-in-process,
and finished goods inventory (collectively, the "INVENTORY")
located at the Facility or held by others, including any
inventory on consignment by ESSI as listed on Appendix B
attached hereto and incorporated herein;
c) INTANGIBLES: All of the general intangibles as the phrase
was defined under New York Uniform Commercial Code prior to
the recent statutory revisions that became effective on July
1, 2001, excluding therefrom any and all accounts, chattel
paper, payment intangibles, or promissory notes;
d) CONTRACT RIGHTS: All of Seller's rights to all contracts and
contract rights, which Buyer so chooses and which were
entered into by ESSI in the ordinary course of its business
prior to the Closing Date (as defined below) relating to the
Assets to be acquired as listed on Appendix C attached
hereto and incorporated herein [the parties hereby
acknowledge that their intent is to sell all of the
contracts identified in Appendix C and
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that the parties will cooperatively work to achieve such
sale but that Seller is not warranting that all such
contracts are freely assignable];
ARTICLE 2.2 PURCHASE PRICE.
a) Buyer agrees to pay an aggregate amount to Seller of Two
Million, Nine Hundred Thousand and 00/100 Dollars ($2,900,000.00) pursuant to
the payment schedule outlined in this Agreement (the "Purchase Price"). All
funds payable under this Article shall be paid by means of a wire transfer to an
account designated by Seller, unless otherwise mutually agreed to by Buyer and
Seller.
b) MANNER OF PAYMENT.
(i) Buyer has paid to Escrow Agent concurrent with Buyer's
execution and delivery of this Agreement, an initial deposit (the "Deposit") of
One Million and no/100 Dollars ($1,000,000.00) and Escrow Agent acknowledges
receipt of the initial deposit, which shall be credited towards the Purchase
Price. Buyer acknowledges and agrees that if it is in default of this Agreement
or the Real Property Asset Purchase Agreement and fails to consummate Buyer's
purchase of the Assets pursuant to the terms and conditions herein contained,
Seller shall be entitled to retain the Deposit as its non-exclusive liquidated
damages. Seller acknowledges and agrees that if Seller fails to deliver the
Assets pursuant to this Agreement and the Assets as described in and pursuant to
the Real Property Asset Purchase Agreement that the Buyer shall be entitled to
the return of the Deposit on February 15, 2002.
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(ii) The sum of One Million, Nine Hundred Thousand and
no/100 Dollars ($1,900,000.00) consisting of the balance of the Purchase Price
shall be paid to Seller at the Closing of the Buyer purchasing the Real Property
in the form of a promissory note (the "Note") in the form of the Attached
Appendix D, in the principal amount of $1,900,000.00, which note shall bear
interest at a rate of five percent per annum. No payments or interest shall
accrue until the first anniversary of the Closing Date. Thereafter, principal
and interest shall be paid in one hundred and eight equal monthly installments
beginning on the first day of the month following the first anniversary of the
Closing Date.
ARTICLE 2.3. EXCLUDED ASSETS AND LIABILITIES. The list of Assets described
in this Agreement as being purchased is pursuant to the descriptions herein and
the attached Appendices and the Parties agree that all remaining assets of ESSI
and/or Seller are not to be purchased pursuant to this Agreement and shall be
Excluded Assets. It is further agreed that in acquiring the Assets, Buyer is not
assuming or undertaking to assume and shall have no responsibility for any
liabilities whether fixed or contingent, past, present or future, or direct or
indirect, arising out of or in connection with the Assets, or any other acts or
omissions of Seller or ESSI in connection therewith prior to the Closing
(collectively referred to as the "Excluded Liabilities"), including without
limitation, (i) any claim arising out of or in connection with the failure by
Seller or ESSI to comply with any applicable government regulation; (ii)
federal, state or local tax liabilities (including any depreciation, investment
tax credit recapture and rollback taxes); (iii) any claim arising out of or in
connection with any Employee Plans of Seller or ESSI or with the employment by
Seller or ESSI of any of its employees or any past employees or with the
termination of any current employees; (iv) any claim resulting from defective
products or workmanship (including any recalls or returns with respect thereto)
related to goods or services
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invoiced prior to Closing; (v) any claim arising from environmental liabilities,
and (vi) any claim under any provision of the New York Uniform Commercial Code
or bulk sales law.
LIMITATIONS ON WARRANTIES. EXCEPT FOR THOSE WARRANTIES EXPRESSLY SET FORTH
IN THIS AGREEMENT, SELLER EXPRESSLY DISCLAIMS AND NEGATES AND BUYER HEREBY
WAIVES, ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR
OTHERWISE. AS EXAMPLES AND FOR THE AVOIDANCE OF DOUBT, BUT WITHOUT LIMITATION OF
THE FOREGOING, THE ASSETS SHALL BE CONVEYED PURSUANT HERETO WITHOUT ANY WARRANTY
OR REPRESENTATION WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT
TO THE QUANTITY, PROFITABILITY, COLLECTIBILITY, QUALITY, CONDITION, SIZE,
WEIGHT, SERVICEABILITY, CONFORMITY TO SAMPLES OR ANY OTHER ASPECT OF THE
FIXTURES, EQUIPMENT OR OTHER PERSONAL PROPERTY INCLUDED AMONG THE ASSETS, ALL OF
WHICH SHALL BE CONVEYED TO THE BUYER AS IS, WHERE IS, AND WITH ALL FAULTS AND
DEFECTS AND IN THEIR PRESENT CONDITION AND STATE OF REPAIR AND WITHOUT ANY
WARRANTIES WHATSOEVER OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE.
THE BUYER ACKNOWLEDGES THAT THIS WAIVER IS CONSPICUOUS.
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ARTICLE 2.4. ESCROW.
a) DEPOSIT OF DEPOSIT. The Deposit shall be held in escrow by
Escrow Agent in an interest bearing account until the Closing of the Transaction
as contemplated herein and the transaction contemplated in the Real Property
Asset Purchase Agreement, at which time the Deposit shall be paid to Seller, or
shall be paid over to the party who is entitled to same as otherwise provided
under the terms of this Agreement.
b) NOTICE. Notwithstanding the foregoing or any provisions herein
regarding the disbursement of the escrowed funds, Escrow Agent shall not
disburse the escrowed funds (except pursuant to this Agreement or pursuant to a
writing signed by all Parties and containing instructions to Escrow Agent
concerning the payment of the Deposit) unless it shall first give notice, to the
Seller and Buyer, in accordance with the notice provisions of this Agreement of
its intent to disburse the escrowed funds, together with a statement describing
the amount of the proposed disbursement and the party to whom such disbursement
is to be made. If Escrow Agent shall receive written notice of objection to the
disbursement from either Buyer or Seller on or before the fifth (5th) business
day after the giving of such notice of intent to disburse, it shall not disburse
said funds. Escrow Agent may give such notice one or more times, as it deems
warranted under the circumstances. Buyer and/or Seller can compel Escrow Agent
to disperse the Deposit in accordance with this Agreement.
c) CONFLICTS. The duties of the Escrow Agent are purely
ministerial in nature. Buyer and Seller acknowledge that McNamee, Lochner, Xxxxx
& Xxxxxxxx, P.C. is the Escrow Agent as well as counsel to the Seller. Buyer and
Seller agree that the dual role of Escrow Agent, by itself alone, is not a
conflict of interest, and that such role will serve to expedite the transactions
contemplated by this Agreement. If a conflict arises as to the disbursement of
the deposit, the Escrow Agent shall disburse the funds solely in accordance with
the terms of this
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Agreement, but shall otherwise be free and unencumbered to aggressively
represent the interests of its client.
d) CONFLICT RESOLUTION. If Buyer and Seller disagree as to the
disposition of the Deposit or if the Deposit disposition conditions shall be
unsatisfied within a period of time which Escrow Agent, in its sole discretion
shall deem unreasonable, or should Escrow Agent otherwise deem it appropriate in
its sole discretion, the Escrow Agent may, in its sole discretion, file an
action in the Supreme Court located in Chautauqua County New York to resolve the
disagreement or seek a resolution as to the distribution of the Deposit and the
Escrow Agent shall have the right to deposit the Deposit with the Supreme Court
located in Chautauqua County New York to permit the Buyer and the Seller to
assert a claim to such monies in an interpleader action. Upon such deposit with
such court, the Escrow Agent shall be relieved and discharged of all obligations
and responsibilities hereunder.
e) RESIGNATION OF ESCROW AGENT. The Escrow Agent may at any time
resign upon ten (10) days written notice to Seller and Buyer. If a successor
Escrow Agent is not appointed by agreement of the Buyer and the Seller within
this ten (10) day period, the Escrow Agent may, but is under no obligation to,
petition a court of competent jurisdiction to place the escrow monies into court
and to permit the Buyer and the Seller to assert a claim to such monies in an
interpleader action
f) TERMINATION. Escrow Agent's obligations hereunder, and any and
all liability of Escrow Agent hereunder, shall immediately cease upon the
transfer of the escrowed funds in accordance with the terms of this Agreement,
or upon the resignation of Escrow Agent as set forth above.
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ARTICLE 2.5 SECURITY INTEREST. At the Closing, Buyer shall grant to
Seller a Security Interest in the Assets to secure the Note. Buyer agrees to
execute all documents necessary to grant to Seller such a Security Interest,
including but not limited to the documents ordinarily used by Seller. Copies of
such documents that are applicable to this transaction are attached hereto as
Appendix E.
ARTICLE 3
CLOSING
ARTICLE 3.1. CLOSING. The Closing of the sale of the Assets contemplated by
this Agreement ( "Closing") shall take place as soon as possible according to
the foreclosure process on personal property and when all contingency items have
been released, but not later than February 13, 2002 (the "Closing Date"), at a
mutually agreeable location in Chautauqua County, New York or such other earlier
time and place as the Parties may mutually agree. All funds transfers to be made
and documents to be delivered on the Closing Date shall be consummated at that
time and place. Delivery in place and peaceful possession of the Assets shall be
contemporaneous therewith. TIME IS OF THE ESSENCE.
ARTICLE 3.2. SELLER'S CLOSING DOCUMENTS. At the Closing, Seller shall
deliver or cause to be delivered to Buyer in form satisfactory to Buyer's
counsel a Xxxx of Sale and Assignment necessary to convey title and possession
to the Assets into the name of the Buyer, free and clear of all liens and
encumbrances and UCC-3 termination statements, terminating all liens and
security interests on the Assets held by Seller by assignment or otherwise. A
copy of the Xxxx of Sale and Assignment is attached hereto as Appendix F.
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A certificate signed by Seller's authorized officer that the
representations and warranties herein are true as of the Closing Date.
ARTICLE 3.3. BUYER'S CLOSING DOCUMENTS. At the Closing, Buyer shall deliver
or cause to be delivered to Seller in form satisfactory to Seller's Escrow Agent
payment of the Purchase Price.
A certificate signed by Buyer's authorized officer that the representations
and warranties herein are true as of the Closing Date.
ARTICLE 4
COVENANTS
ARTICLE 4.1. COVENANTS OF SELLER.
a) The Seller, to the best of its ability and to the extent such
books, records and properties are available from ESSI, will afford Buyer, its
advisors and representatives, and its potential debt and equity financing
sources and their advisors and representatives, immediate and continuing access
to such of the books, records and properties of ESSI as may be necessary in the
opinion of Buyer, its counsel, accountants, environmental consultants and other
representatives to conduct a satisfactory due diligence investigation of all
aspects of ESSI, including, without limitation, the following areas:
environmental, employee obligations, intellectual property, financial, labor
agreements, commercial, operations, utilities, real estate orders and contracts.
In connection with Buyer's due diligence investigation, the Seller will
permit Buyer and its counsel, financial and other advisors, accountants,
environmental consultants, potential debt
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and equity financing sources, and their representatives to conduct such
investigation of ESSI's businesses, assets, liabilities, books and records as
Buyer may desire, and will cooperate fully with Buyer in such investigation.
Buyer will be afforded an opportunity to discuss the environmental status and
condition of the PP&E with applicable government authorities. Further, the
Seller will use its reasonable best efforts to cooperate with Buyer and its
auditors in connection with the review of all available financial statements and
tax returns of ESSI and the determination that ESSI's fixed assets and inventory
balances are reasonably stated in accordance with generally accepted accounting
principles.
b) Seller shall use its reasonable efforts to cause the
transactions contemplated by this Agreement to be consummated, and shall use its
reasonable efforts to obtain all consents and authorizations of third parties
and to make all filings with and give all notices to third parties which may be
necessary or reasonably required in order to effect the transactions
contemplated hereby.
c) From the date of this Agreement Seller will not sell, exchange or
compromise its existing claims against ESSI or its property.
ARTICLE 4.2. COVENANTS OF BUYER.
a) Buyer shall use its reasonable efforts to cause the
transactions contemplated by this Agreement to be consummated, and shall use its
reasonable efforts to obtain all consents and authorizations of third parties
and to make all filings with and give all notices to third parties which may be
necessary or reasonably required in order to effect the transactions
contemplated hereby.
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b) After Closing, Buyer will preserve for a reasonable length of
time all books and records included in the Assets and will give Seller the
right, during normal business hours, to inspect the same and make copies thereof
for all reasonable purposes.
ARTICLE 5
MATERIAL TERMS AND CONDITIONS TO TRANSACTION
In addition to the satisfactory completion of due diligence, the Closing is
subject to satisfaction of various conditions, including the following unless
such condition is waived by Buyer in writing if Seller, through no fault of
Buyer, is unable to satisfy:
a) DEFINITIVE AGREEMENT AND RELATED DOCUMENTATION
. The negotiation, execution and delivery of a definitive
Real Property Asset Purchase Agreement in form and
substance satisfactory to Buyer and its counsel and to
Seller and its counsel.
. The assignment by Seller to Buyer of all executory
contracts and unexpired leases, to be identified by
Buyer and listed in Appendix C to this Agreement
(collectively, the "ASSUMED Contracts"). Except as
otherwise expressly stated, there shall be no claims by
the other parties to the Assumed Contracts against
Buyer for any pre-assignment claims or defaults under
said contracts.
. Obtaining any necessary consents from the parties to
such Assumed Contracts.
. The execution and delivery of all necessary permits,
and all supply and utility agreements necessary to the
respective operations of the Facility on terms
satisfactory to Buyer by February 12, 2002.
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b) PROTECTION OF PURCHASED ASSETS
. Seller will immediately take all necessary steps to
protect the Assets from exposure to adverse weather
conditions.
c) FINANCING
. The obtaining of all necessary consents from Buyer's
lenders. o There shall have been no material adverse
change, in the condition of the Assets since June 29,
2001, except as set forth in Appendix G.
d) REGULATORY CONSENTS
. Obtaining appropriate antitrust and other regulatory
permits, consents and approvals and the absence of any
injunction or proceeding which seeks to block the
consummation of the Transaction or any related
transaction.
e) ENVIRONMENTAL MATTERS
. With respect to any existing environmental condition,
on or at the Facility or in connection with the Assets,
that may be reasonably expected to impose requirements
for remediation in order to comply with existing
environmental laws, obtaining the agreement or approval
from applicable federal and state regulatory agencies
(in the form of a prospective purchaser agreement,
voluntary remediation agreement, or similar arrangement
under applicable federal or state environmental laws
and programs) as to remediation requirements with
respect to such existing environmental conditions, on
terms that are reasonably acceptable to Buyer. In this
regard, Buyer shal1 have entered into an agreement with
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the New York DEC regarding environmental matters, the
terms of which shall be satisfactory to Buyer.
f) CORPORATE APPROVALS
. The receipt of all required approvals of the Board of
Managers of Buyer with respect to the consummation of
the Transaction and related transactions.
. The receipt of all required approvals of the Board of
Directors of the Seller with respect to the
consummation of the Transaction and related
transactions.
g) Title and Possession of Assets
. Seller, on to the Closing Date, shall transfer good and
marketable title to and possession of the Assets, free
and clear of all liens, claims and encumbrances.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
Seller hereby represents and warrants to Buyer as follows:
. Organization and Qualification. Seller is a public benefit corporation
duly organized, validly existing and in good standing under the laws
of the State of New York, and has all requisite corporate power and
authority to own, and lease the properties and assets it now owns, or
is foreclosing on and to carry on its business as presently conducted
to execute and deliver this Agreement and the other documents and
instruments to be executed and delivered by Seller
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hereunder, and to consummate the transactions contemplated hereby and
thereby. Seller is duly licensed or qualified to do business and is in
good standing in each jurisdiction in which the ownership, operation
or lease of the Assets by it, except where the failure to be so
licensed or qualified or in good standing would not have a material
adverse effect on the business or financial condition of Seller taken
as a whole. Seller has delivered to Buyer true and correct copies of
its Amended Articles of Incorporation and Regulations, in each case as
presently in effect.
. Authority Concerning this Agreement. The execution and delivery of
this Agreement and the other documents and instruments to be executed
and delivered by Seller hereunder, the performance by Seller of its
obligations hereunder and thereunder, and the consummation by Seller
of the transactions contemplated hereby and thereby have been duly
authorized by the Board of Directors, of Seller. Seller will deliver
to Buyer at or prior to the Closing a complete and correct copy,
certified by its corporate secretary or assistant secretary, of all
resolutions theretofore duly and validly adopted by its Board of
Directors evidencing such authorization (which resolution will not
have been modified or rescinded prior to and will be in full force and
effect on the Closing Date). No other corporate act or proceeding on
the part of Seller is necessary to approve the execution and delivery
of this Agreement by Seller, the execution and delivery of the other
documents and instruments to be executed and delivered by Seller
hereunder, the performance by Seller of its obligations hereunder and
thereunder and the consummation of the transactions contemplated
hereby and thereby.
. Execution and Binding Effect. This Agreement has been duly and validly
executed and delivered by Seller and constitutes, and the other
documents and
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instruments to be executed and delivered by Seller hereunder upon
their execution and delivery by Seller on or prior to the Closing Date
will constitute (assuming in each case the due and valid
authorization, execution and delivery thereof by the other parties
thereto), valid and binding agreements of Seller, enforceable against
Seller in accordance with their respective terms, except that
enforceability may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights, and (b) the remedies of specific
performance or injunctive and other forms of equitable relief may be
subject to certain equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought.
. Absence of Certain Changes or Events. Except as contemplated by this
Agreement or as set forth on Appendix G attached hereto, since June
29, 2001, there has not been:
a) Any mortgage or pledge or material lien or other encumbrance
which has not been extinguished by Seller's UCC sale to Buyer,
upon any of the Assets, other than Permitted Liens (as set forth
in Appendix E hereof);
b) Any sale, transfer or other disposition of any assets of ESSI
that would be included in this Agreement but for such sale,
transfer or other disposition by Seller, and Seller has not
entered into any contract or commitment material to the business
or operations of ESSI, except in the course of business with
Buyer.
c) Any destruction or casualty loss, whether or not covered by
insurance, adversely affecting the Assets.
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d) Seller knows of no material adverse change, in the condition of
the Assets since June 29, 2001, except as set forth in Appendix
G.
. Seller has the right to sell and deliver peaceful possession of the
Assets to Buyer and such sale is free and clear of all liens, claims
and encumbrances.
. Seller has legally enforceable debt and lien claims against ESSI
as follows:
1. Note dated January 31, 2001, in the face amount of
$3,360,000.00 amount owed: $2,523,971.39 plus interest and
other charges from December 14, 2001 secured by: mortgage
dated January 31, 2001, executed by Empire Specialty Steel
Inc. to New York Job Development Authority, and recorded in
the Chautauqua County Clerk's Office on January 31, 2001, in
Book 02434 at Page 0372; security agreement in machinery,
equipment furniture and fixtures dated January 31, 2001
between Empire Specialty Steel Inc. and New York Job
Development Authority d\b\a Empire State Development Corp.;
security agreement dated October __, 1999 between Dunkirk
Specialty Steel Inc. and Atlas Steels Inc. and thereafter
assigned to New York Job Development Authority d\b\a Empire
State Development Corp. pursuant to a subordination
agreement dated January 31, 2001.
2. Note dated October __, 1999, in the face amount of
$2,499.000.00 amount owed: $1,990,666.60 plus interest and
other charges from October 31, 2001 secured by: mortgage in
the face amount of $10,000,000.00 given by Al Tech Specialty
Steel Corporation to New York State, Department of Commerce-
Trust Fund 226-01, and recorded in the Chautauqua County
Clerk's office on August 2, 1976, in Book 1376 of Mortgages
at page 175, as corrected by correction mortgage recorded in
the Chautauqua County Clerk's office on January 25, 1979, in
Book 1501 of Mortgages at page 186, which was subsequently
subordinated to the aforementioned mortgage dated January
31, 2001; security agreement in equipment dated October __,
1999 between Dunkirk Specialty Steel Inc. and New York Job
Development Corp. d\b\a Empire State Development Corp.
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3. Note dated January 31, 2001, in the face amount of
$1,000,000.00 amount owed: $973,395.15 plus interest and
other charges from October 31, 2001 secured by: security
agreement in machinery, equipment, furniture and fixtures
dated January 31, 2001, between Empire Specialty Steel Inc.
and New York Job Development Authority d\b\a Empire State
Development Corp.
Buyer hereby represents and warrants to Seller as follows:
Organization and Qualification. Buyer is a Limited Liability Company
duly organized, validly existing and in good standing under the laws of the
State of Delaware, and has all requisite corporate power and authority to
own, and lease the properties and assets it now owns, or is foreclosing on
and to carry on its business as presently conducted to execute and deliver
this Agreement and the other documents and instruments to be executed and
delivered by Buyer hereunder, and to consummate the transactions
contemplated hereby and thereby. Buyer is duly licensed or qualified to do
business and is in good standing in each jurisdiction in which the
ownership, operation or lease of the Assets by it or the conduct of the
business of Dunkirk requires such licensing or qualification, except where
the failure to be so licensed or qualified or in good standing would not
have a material adverse effect on the business or financial condition of
Buyer taken as a whole. Buyer has delivered to Buyer true and correct
copies of its Articles of Organization and Operating Agreement, in each
case as presently in effect.
Authority Concerning this Agreement. The execution and delivery of
this Agreement and the other documents and instruments to be executed and
delivered by Buyer hereunder, the performance by Buyer of its obligations
hereunder and thereunder, and the consummation by Buyer of the transactions
contemplated hereby and thereby
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have been duly authorized by the Board of Managers, of Buyer. Buyer will
deliver to Seller at or prior to the Closing a complete and correct copy,
certified by its corporate secretary or assistant secretary, of all
resolutions theretofore duly and validly adopted by its Board of Managers
evidencing such authorization (which resolution will not have been modified
or rescinded prior to and will be in full force and effect on the Closing
Date). No other corporate act or proceeding on the part of Buyer is
necessary to approve the execution and delivery of this Agreement by Buyer,
the execution and delivery of the other documents and instruments to be
executed and delivered by Buyer hereunder, the performance by Buyer of its
obligations hereunder and thereunder and the consummation of the
transactions contemplated hereby and thereby.
Execution and Binding Effect. This Agreement has been duly and validly
executed and delivered by Buyer and constitutes, and the other documents
and instruments to be executed and delivered by Buyer hereunder upon their
execution and delivery by Buyer on or prior to the Closing Date will
constitute (assuming in each case the due and valid authorization,
execution and delivery thereof by the other parties thereto), valid and
binding agreements of Buyer, enforceable against Buyer in accordance with
their respective terms, except that enforceability may be limited by (a)
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights, and (b) the
remedies of specific performance or injunctive and other forms of equitable
relief may be subject to certain equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
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ARTICLE 7
CONDITIONS PRECEDENT
ARTICLE 7.1. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER. Subject to
Article 9.1 of this Agreement, Seller's obligations hereunder are contingent
upon the fulfillment of the following conditions:
a) Buyer shall not be in default of any of its other agreements
with Seller and shall have performed in all material
respects its obligations hereunder to be performed on or
before the Closing Date.
b) The Seller shall have signed an Agreement (acceptable to
Seller) with the New York State Department of Environmental
Conservation regarding the environmental condition of the
Facility and release from liabilities relating thereto.
c) Satisfactory completion of Article 5 of the Agreement
applicable to Seller.
d) Seller to receive Representations and Warranties from Buyer
as to the authority to buy the Property.
ARTICLE 7.2. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER. Subject to
Article 9.1 of this Agreement, Buyer's obligations hereunder (unless waived by
Buyer in writing) are contingent upon the fulfillment of the following
conditions:
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a) Seller shall not be in default of any of its other
agreements with Buyer and shall have performed in all
material respects its obligations hereunder to be performed
on or before the Closing Date.
b) Buyer shall have performed its due diligence, as discussed
in Article 4.1, no later than 1 day prior to the Closing
date and Buyer has not terminated this Agreement as a result
thereof.
c) The Closing shall have occurred not later than February 13,
2002.
d) The Buyer shall have signed an Agreement (acceptable to
Buyer) with the New York State Department of Environmental
Conservation regarding the environmental condition of the
Facility and release from liabilities relating thereto.
e) The Buyer shall have received from the New York State
Department of Environmental Conservation and others all
applicable permits to operate the Facility.
f) Seller and Buyer shall have entered into a Real Property
Asset Purchase Agreement for the real property with Buyer
and such agreements shall be in full force and affect.
g) The conditions contained in Article 5 and 8 applicable to
Buyer.
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ARTICLE 8
RISK OF LOSS; INSURANCE
ARTICLE 8.1 The risk of loss to any of the Assets shall remain with Seller
until Seller verifies receipt of the portion of the Purchase Price to be paid at
Closing, and shall then pass to Buyer and from that time on Buyer shall be
entitled to the proceeds of any insurance obtained by the Buyer and covering the
Assets upon loss due to an insured event or occurrence. In the event of any
material destruction of, or loss or damage to all or any material portion of the
Assets by any casualty prior to the Closing, Buyer may, at its option, either
(i) terminate this Agreement or (ii) waive the foregoing right of termination
and notify Seller of its election to hold the Closing as provided herein. If
Buyer shall so notify Seller, any proceeds of insurance shall be paid to Seller
and Seller, to the extent of insurance proceeds received by Seller, plus any
coinsurance penalty stipulated in the insurance policy promptly, but in any
event not later than thirty (30) days after the casualty, shall replace or
repair that portion of the Assets so damaged such that the Assets are in as good
condition and equivalent value and fit for Buyer's purposes as were the Assets
immediately prior to the casualty, to Buyer's reasonable satisfaction, and the
Purchase Price payable hereunder as to the affected Assets shall not be
adjusted. In the event of any non-material destruction of, or damage or other
casualty to, any of the Assets, or any part thereof, any proceeds of insurance
shall be paid to the Seller, and the Purchase Price payable hereunder as to the
affected Assets shall be appropriately adjusted on the Closing Date.
ARTICLE 9
TERMINATION
ARTICLE 9.1 TERMINATION EVENTS. This Agreement may be terminated by:
a) Buyer, upon written notice to Seller prior to the Closing Date, if any
of the conditions in Article 7.2 have not been satisfied as of the Closing Date
or if satisfaction of such a condition is or becomes impossible (other than
through the failure of Buyer to comply with its obligations under this
Agreement) and Buyer has not waived such condition on or before the Closing
Date; or
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b) Seller, upon written notice to Buyer prior to the Closing Date, if any
of the conditions in Article 7.1 have not been satisfied as of the Closing Date
or if satisfaction of such a condition is or becomes impossible (other than
through the failure of Seller to comply with its obligations under this
Agreement) and Seller has not waived such condition on or before the Closing
Date; or
c) By Buyer if no later than 1 day prior to the Closing date the results of
the Due Diligence conducted by the Buyer are not satisfactory.
d) Mutual consent of Buyer and Seller.
ARTICLE 10
MISCELLANEOUS
ARTICLE 10.1 CONFIDENTIALITY. This Agreement and any and all discussions
and negotiations related hereto shall be treated as confidential and proprietary
information by each Party, and shall not be disclosed to any third party, except
those parties with a need to know such information to assist such Party in
completing its obligations hereunder, and each Party shall use at least the same
degree of care in protecting such confidential information as it uses in
protecting its own proprietary and confidential information. This obligation of
confidentiality shall terminate with respect to the existence of this Agreement
on the date upon which the Parties jointly and publicly announce the signing of
this Agreement. Any such public announcement shall be mutually agreed to by
Buyer and Seller prior to dissemination.
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ARTICLE 10.2 EXPENSES AND COMMISSIONS. Seller and Buyer agree to bear their
own legal, accounting and other expenses in connection with the preparation and
consummation of this Agreement and the transactions contemplated hereby. In the
event of a breach of this Agreement, the prevailing party in a lawsuit or other
dispute resolution procedure shall be entitled to recover its reasonable
attorney's fee, costs and expenses from the other party.
ARTICLE 10.3 BENEFIT OF AGREEMENT; ASSIGNMENT. The terms of this Agreement
shall be binding upon and inure to the benefit of the heirs, successors and
assigns of the Parties hereto. No Party shall assign its interest under this
Agreement, by operation of law or otherwise, without the prior written consent
of the other Parties.
ARTICLE 10.4 NOTICES. All notices, demands or other communications given
under this Agreement shall be in writing, and shall be sent by certified or
registered mail, postage prepaid, return receipt requested or by personal
delivery or by overnight courier and addressed as follows: if to Buyer at:
Dunkirk Acquisition LLC, C/O Universal Stainless & Alloy Products, Inc., General
Counsel, 000 Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxxxxx 00000, with a copy to
Buyer's counsel at Xxxxxxx X. Xxxxx, Esq., 0000 XXXX Xxxxxx, Xxxxxxx, Xxx Xxxx
00000; if to Seller at Empire State Development Corporation, Xxxxx Xxxx, 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 with a copy to Seller's counsel at
McNamee, Lochner, Xxxxx & Xxxxxxxx, P.C. , Attn: Xxxxx Xxxxxxxxxxx, Esq., 00
Xxxxx Xxxxxx, X.X. Xxx 000, Xxxxxx, Xxx Xxxx 00000-0000; or to such other
address as may be designated in writing, which notice of change of address shall
be given in the same manner. A notice shall be deemed delivered (a) three (3)
business days after sending, if sent by certified or registered mail, (b) upon
delivery, if personally delivered, or (c) one (1) business day after sending if
sent by overnight courier.
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Notices relating to Article 9, Termination may be made by facsimile, e-
mail or in person and are effective immediately upon sending such notice.
ARTICLE 10.5 SEVERABILITY. All agreements and covenants herein are
severable. In the event that any provision of this Agreement should be held to
be unenforceable, the validity and enforceability of the remaining provisions
hereof shall not be affected thereby.
ARTICLE 10.6 GOVERNING LAW; JURISDICTION. This Agreement shall be enforced,
construed and performed in accordance with the laws of the State of New York as
applied to contracts made and fully performed in such state, without any effect
to the choice of law principles thereof. Seller and Buyer hereby agree that any
suit, action or proceeding arising out of or based upon any claim under this
Agreement shall be instituted in the Supreme Court located in Chautauqua County,
New York, and the Seller and Buyer waive any objection which it may have to the
laying of venue of such suit, action or proceeding therein.
ARTICLE 10.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts (by
facsimile or otherwise), each of which, when so executed and delivered, shall be
an original, but all the counterparts shall together constitute one and the same
instrument.
ARTICLE 10.8 ENTIRE AGREEMENT. This Agreement, together with agreements
executed contemporaneously herewith, constitutes the entire agreement among the
Parties in respect of the transactions contemplated hereby and supersedes all
prior agreements, arrangements and undertakings relating to the subject matter
hereof. No covenants or conditions not expressed in this Agreement or in the
agreements executed contemporaneously herewith shall affect or be
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effected to interpret, change or restrict this Agreement. This Agreement may be
amended only by a writing specifically amending the Agreement and signed by all
of the Parties hereto.
ARTICLE 10.9 MODIFICATION; WAIVER. This Agreement may not be modified,
terminated, rescinded, discharged or canceled, nor may any provision be waived
without the prior written consent of the Party or Parties against whom such
modification, termination, recision, discharge, cancellation or waiver is or may
be asserted. No delay or omission by any Party to exercise any right or power
shall impair any such right or power or be construed to be a waiver thereof. A
waiver of any provision of this Agreement on any occasion shall not constitute a
waiver of such provision on any succeeding occasion.
ARTICLE 10.10 CUMULATIVE REMEDIES. Unless stated otherwise, all remedies
available under this Agreement shall be cumulative and in addition to and not in
lieu of any other remedies available at law, in equity or otherwise. The use of
any one right or remedy by any Party shall not preclude or waive its right to
use any or all other remedies.
ARTICLE 10.11 HEADINGS. The section headings and subheadings contained in
this Agreement, Exhibits, and Schedules are for convenient reference only, and
shall not in any way affect the meaning or interpretation of this Agreement.
ARTICLE 10.12. STRICT CONSTRUCTION. The parties agree that this Agreement
was a result of their joint representation and negotiations. IN THE EVENT THAT
ANY PARTY TO THIS AGREEMENT IS NOT REPRESENTED BY AN ATTORNEY, THEY ARE HEREBY
ADVISED THAT THEY SHOULD CONSULT WITH AN ATTORNEY AND THAT THEY HAVE THE RIGHT
TO NEGOTIATE THE TERMS OF THIS AGREEMENT. THIS CONSTITUTES A VALID AND BINDING
AGREEMENT. The parties hereby agree that no
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provision shall be construed against a particular party to this Agreement on the
basis that this Agreement or any particular provision in this Agreement was
proposed, negotiated or written by such party. This rule of construction is
important so that none of the parties are discouraged from drafting this
Agreement.
ARTICLE 10.13 GUARANTEE. All of Buyer's obligations under this Agreement
are hereby unconditionally and irrevocably guaranteed by Universal Stainless &
Alloy Products, Inc. upon the conveyance to Buyer of the Premises pursuant to
and as defined in the Real Property Asset Purchase Agreement of even date
herewith.
ARTICLE 10.14 INDEMNIFICATION. Seller shall indemnify and hold each of
Universal Stainless & Alloy Products, Inc. and Dunkirk Acquisition, LLC and
their respective directors, managers, officers, employees and related parties
harmless from, and against, any and all liabilities, obligations, losses,
damages, penalties, claims, actions, judgments, suits, costs, expenses, and
disbursements of any kind or nature whatsoever (including without limitation,
counsel and special counsel fees and disbursements in connection with any
litigation, investigation, hearing or other proceeding) (collectively,
"Liabilities") in connection with, or with respect or in any way related to, or
arising directly or indirectly from this Agreement or Transaction related to
Seller's failure to dispose of the Assets according to law and in a commercially
reasonable manner or to sell, transfer, convey and assign title and interests in
and good and marketable title, free and clear of liabilities, obligations,
security interests, liens (including tax liens), mortgages, leases or leasehold
interests, encumbrances and rights of others of any kind whatsoever (except as
permitted in Article 2.5 herein). This indemnification shall survive the Closing
and the termination of this Agreement.
* * *
[Note: In accordance with Item 601(b)(2) of Regulation S-K, the registrant has
omitted the appendices to this Agreement referenced herein. The registrant
hereby agrees to furnish supplementally a copy of any omitted appendix to the
Commission upon request.]
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IN WITNESS WHEREOF, the Parties have executed, or caused to be executed,
this Agreement in a manner sufficient to bind them as of the day and year first
above written.
STATE OF NEW YORK NEW YORK JOB
COUNTY OF ______________________________________ DEVELOPMENT AUTHORITY
d/b/a EMPIRE STATE
DEVELOPMENT CORPORATION
On this the __________ day of _________, 20 ____,
Before me __________________________________, the By: /s/ Xxxxx X. Xxxx
undersigned officer, personally appeared, known ----------------------------
to me (or satisfactorily proven) to be the person
whose name is subscribed to the within instrument,
and acknowledge that he/she executed the same for Its: Controller
the purposes therein contained. ----------------------------
In witness whereof, I hereunto set my hand and
Official seals.
________________________________________________
Notary Public
COMMONWEALTH OF PENNSYLVANIA DUNKIRK ACQUISITION, LLC
COUNTY OF ______________________________________
On this the _______________ day of _________, 20____,
Before me __________________________________, the By: /s/ Xxxx X. XxXxxxx
undersigned officer, personally appeared, known ----------------------------
to me (or satisfactorily proven) to be the person
whose name is subscribed to the within instrument,
and acknowledge that he/she executed the same for Its: Executive Officer
the purposes therein contained. ----------------------------
In witness whereof, I hereunto set my hand and
Official seals.
________________________________________________
Notary Public
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COMMONWEALTH OF PENNSYLVANIA UNIVERSAL STAINLESS & ALLOY
PRODUCTS, INC.
COUNTY OF _______________________________________ Guarantor pursuant to Article 10.13
On this the __________ day of ______________, 20_____,
Before me __________________________________, the By: /s/ X.X. XxXxxxxx
undersigned officer, personally appeared, known -------------------------------------
to me (or satisfactorily proven) to be the person
whose name is subscribed to the within instrument,
and acknowledge that he/she executed the same for Its: President and Chief Executive Officer
the purposes therein contained. -------------------------------------
In witness whereof, I hereunto set my hand and
Official seals.
_________________________________________________
Notary Public
STATE OF NEW YORK MCNAMEE, LOCHNER, XXXXX & XXXXXXXX, P.C.
COUNTY OF _______________________________________ ESCROW AGENT
On this the __________ day of ______________, 20_____,
Before me __________________________________, the By: /s/ Xxxxx Xxxxxxxxxxx
undersigned officer, personally appeared, known -------------------------------------
to me (or satisfactorily proven) to be the person
whose name is subscribed to the within instrument,
and acknowledge that he/she executed the same for Its: Principal
the purposes therein contained. -------------------------------------
In witness whereof, I hereunto set my hand and
Official seals.
_________________________________________________
Notary Public
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