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EXHIBIT 10.1
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of December
19, 1997, by and among Metal Management, Inc., a Delaware corporation (the
"Company"), and Samstock, L.L.C., a Delaware limited liability company
("Purchaser").
RECITALS
A. The Company wishes to issue and sell to Purchaser, and
Purchaser wishes to buy from the Company, on the terms and subject to the
conditions set forth in this Agreement in the aggregate (i) 1,470,588 shares
(the "Shares") of the Company's Common Stock, $.01 par value per share (the
"Common Stock"), representing approximately 5.2% of the Common Stock
outstanding, or 3.6% of the Fully Diluted Common Stock (as hereinafter
defined), together with (ii) a warrant (the "Warrant") in the form of Exhibit A
hereto to purchase an additional 600,000 shares of the Common Stock (the
"Warrant Shares"), representing approximately 1.5% of the Fully Diluted Common
Stock. The Warrant Shares shall have an exercise price (subject to adjustment
as provided in the Warrant) of $20.00 per share for 400,000 Warrant Shares and
$23.00 per share for 200,000 Warrant Shares. The Shares, the Warrant and the
Warrant Shares are collectively referred to herein as the "Securities" and each
as a "Security".
B. The Company has agreed to effect the registration of the
Shares and the Warrant Shares under the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to a Shelf Registration Rights Agreement of even
date herewith among the Company and Purchaser (the "Shelf Registration Rights
Agreement") and an Amended and Restated Registration Rights Agreement dated as
of the date hereof among the Company, Purchaser, T. Xxxxxxxx Xxxxxxxx, Xxxxxx
X. Xxxxxx, Xxxxxx X. Xxxxx, Xxxxx X. Xxxxx and Xxxxxxx X. Xxxxx (the "Amended
and Restated Registration Rights Agreement").
C. The sale of the Shares and the Warrant by the Company to
Purchaser will be effected in reliance upon the exemption from securities
registration afforded by the provisions of Regulation D ("Regulation D"), as
promulgated by the Securities and Exchange Commission (the "Commission") under
the Securities Act.
The Company and the Purchasers hereby agree as follows:
1. PURCHASE AND SALE OF THE SHARES AND THE WARRANT.
1.1 Agreement to Purchase and Sell. Upon the terms and subject to
the satisfaction of the conditions set forth herein, the Company agrees to sell
at the Closing (as defined below), and Purchaser agrees to purchase 1,470,588
Shares at a purchase price of $17.00 per Share, together with the Warrants in
each case free and clear of all Liens (as hereinafter defined).
1.2 Closing. Subject to the satisfaction of the conditions set
forth herein, the closing of the purchase and sale of the Shares and the
Warrant will be deemed to occur when this Agreement
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and the other Transaction Documents (as defined below), have been executed and
delivered by the Company and Purchaser, and full payment of the Purchase Price
has been made by Purchaser by wire transfer of immediately available funds to
an account designated by the Company against delivery by the Company of duly
executed certificates to Purchaser representing the Shares purchased by
Purchaser hereunder, as well as the Warrant to be delivered in connection
therewith (the "Closing"). The date on which the Closing is deemed to take
place is referred to herein as the "Closing Date". The aggregate Purchase Price
for all of the Shares and the Warrant to be purchased by Purchaser at the
Closing (assuming the satisfaction of the conditions described in Section 5
below) shall be Twenty-Four Million Nine Hundred Ninety-Nine Thousand Nine
Hundred Ninety-Six and 00/100 Dollars ($24,999,996.00).
1.3 Certain Definitions. When used herein:
(A) "business day" shall mean any day on which the New York Stock
Exchange and commercial banks in the city of New York are open for business;
(B) an "affiliate" of a party shall mean any person or entity
controlling, controlled by or under common control with that party;
(C) "control" shall mean, with respect to an entity, the ability to
direct the business, operations or management of such entity, whether through
an equity interest therein or otherwise;
(D) "subsidiary" shall mean any entity in which the Company has an
equity interest of 50% or greater;
(E) "Fully Diluted Common Stock" shall mean the total number of shares
of Common Stock outstanding after taking into account the following: (i) all
shares of Common Stock outstanding (exclusive of the Shares), (ii) all Shares
and Warrant Shares (assuming full exercise of the Warrant and issuance of all
Warrant Shares), (iii) all shares of Common Stock issuable upon conversion,
exchange or other exercise of the Company's Equity Securities outstanding, and
(iv) adjustments needed to account or adjust for stock splits, stock dividends,
recapitalizations, recombinations and similar events;
(F) "Equity Securities" shall mean, with respect to the Company or any
subsidiary, as the case may be: (i) any class or series of common stock,
preferred stock or other capital stock, whether voting or non-voting,
including, without limitation, with respect to the Company, Common Stock,
Series A Convertible Preferred Stock and Series B Convertible Preferred Stock,
(ii) any other equity securities issued by the Company or such subsidiary, as
the case may be, whether now or hereafter authorized for issuance by the
Company's or such subsidiary's, as the case may be, Certificate of
Incorporation, (iii) any debt, hybrid or other securities issued by the Company
or such subsidiary, as the case may be, which are convertible into, exercisable
for or exchangeable for any other Equity Securities, whether now or hereafter
authorized for issuance by the Company's or such subsidiary's, as the case may
be, Certificate of Incorporation, (iv) any equity equivalents (including,
without
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limitation, stock appreciation rights, phantom stock or similar rights),
interests in the ownership or earnings of the Company or such subsidiary, as
the case may be, or other similar rights, (v) any written or oral rights,
options, warrants, subscriptions, calls, preemptive rights, rescission rights
or other rights to subscribe for, purchase or otherwise acquire any of the
foregoing, (vi) any written or oral obligation of the Company or such
subsidiary, as the case may be, to issue, deliver or sell, any of the
foregoing, (vii) any written or oral obligations of the Company or such
subsidiary, as the case may be, to repurchase, redeem or otherwise acquire any
Equity Securities, and (viii) any bonds, debentures, notes or other
indebtedness of the Company or such subsidiary, as the case may be, having the
right to vote (or convertible into, or exchangeable for securities having the
right to vote) on any matters on which the stockholders of the Company or such
subsidiary, as the case may be, may vote; and
(G) "Lien" shall mean any preemptive or similar rights of any third
party, purchase options, calls, proxies, voting trusts, voting agreements,
judgments, pledges, charges, taxes, assessments, levies, escrows, rights of
first refusal or first offer, transfer restrictions, mortgages, indentures,
claims, liens, equities, mortgages, deeds of trust, deeds to secure debt,
security interests and other encumbrances of every kind and nature whatsoever,
whether arising by agreement, operation of law or otherwise, other than any
created by Purchaser.
2. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
Purchaser, solely with respect to it, hereby makes the following
representations and warranties to the Company (which shall be true as of the
date hereof and as of the Closing Date) and agrees with the Company that:
2.1 Authorization; Enforceability. Purchaser is duly and validly
organized, validly existing and in good standing as a limited liability company
under the laws of the State of Delaware with full power and authority to
purchase the Shares and the Warrant and to execute and deliver this Agreement.
This Agreement constitutes Purchaser's valid and legally binding obligation,
enforceable in accordance with its terms, except as such enforcement may be
limited by (i) applicable bankruptcy, insolvency, reorganization or other laws
of general application relating to or affecting the enforcement of creditors'
rights generally and (ii) general principles of equity.
2.2 Accredited Investor; Investment Intent. Purchaser is an
accredited investor as that term is defined in Rule 501 of Regulation D, and is
acquiring the Shares and the Warrant solely for its own account for investment
purposes as a principal and not with a present view to the public resale or
distribution of all or any part thereof, except pursuant to sales that are
exempt from the registration requirements of the Securities Act and/or sales
registered under the Securities Act; provided, however that in making such
representation, Purchaser does not agree to hold the Securities for any minimum
or specific term and reserves the right to sell, transfer or otherwise dispose
of the Securities at any time in accordance with the provisions of this
Agreement and with Federal and state securities laws applicable to such sale,
transfer or disposition.
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2.3 Information. The Company has provided Purchaser with, and
Purchaser has reviewed, the written information regarding the Company set forth
on Schedule 2.3, and has granted to Purchaser the opportunity to ask questions
of and receive answers from representatives of the Company, its officers,
directors, employees and agents concerning the business, operations and
financial condition of the Company and materials relating to the terms and
conditions of the purchase and sale of the Shares and the Warrant hereunder.
Neither such information nor any other investigation conducted by Purchaser or
any of its representatives shall modify, amend or otherwise affect Purchaser's
right to rely on the Company's representations and warranties contained in this
Agreement.
2.4 Limitations on Disposition. Purchaser acknowledges that,
except as provided in the Shelf Registration Rights Agreement or the Amended
and Restated Registration Rights Agreement, the Securities have not been and
are not being registered under the Securities Act and may not be transferred or
resold without registration under the Securities Act or unless pursuant to an
exemption therefrom. Purchaser agrees not to sell, transfer or otherwise
dispose of the Securities unless and until:
(a) there is then in effect a registration statement under
the Securities Act covering such proposed disposition and such
disposition is made in accordance with such registration statement; or
(b) (i) Purchaser shall have notified the Company in advance
of the proposed disposition, and (ii) if reasonably requested by the
Company, Purchaser shall have furnished the Company with an opinion of
counsel (the cost of which shall be borne by the Purchaser),
reasonably satisfactory to the Company, that such disposition will not
require registration under the Securities Act. It is agreed that no
opinion of counsel will be required for the transfer of the Securities
to an affiliate of Purchaser or with respect to a sale thereof made
pursuant to Rule 144 under the Securities Act ("Rule 144").
2.5 Legend. Purchaser understands that the certificates
representing the Securities may bear at issuance, in addition to any
restrictive legend required pursuant to the Amended and Restated Stockholders
Agreement, a restrictive legend in substantially the following form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), or any state securities laws, and may not
be sold, transferred or assigned in the absence of an
effective registration statement under the Securities Act and
any such state law or an exemption from the registration
requirements thereunder."
Notwithstanding the foregoing, it is agreed that, as long as the sale
of the Warrant Shares are registered pursuant to an effective registration
statement or such shares are eligible for resale under Rule 144(k), the Warrant
Shares shall be issued upon exercise of the Warrant pursuant to the terms of
the Warrant, without any legend or other restrictive language. The legend set
forth above shall be
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removed and the Company shall issue a new certificate without such legend to
the holder of any Security upon which it is stamped if (i) the sale of such
Security is registered under the Securities Act, (ii) such holder provides the
Company with an opinion of counsel, in form, substance and scope customary for
opinions of counsel in comparable transactions (the cost of which shall be
borne by the Purchaser) to the effect that such Security can be sold publicly
without registration under the Securities Act or (iii) such holder provides the
Company with reasonable assurances that such Security can be sold pursuant to
Rule 144 without any restriction as to the number of shares of such Security
that can then be immediately resold.
2.6 No Reliance by Purchaser. Purchaser acknowledges that (i) it
has such knowledge in business and financial matters as to be fully capable of
evaluating this Agreement, the other Transaction Documents (as defined below)
and the transactions contemplated hereby and thereby, (ii) it is not relying on
any advice or representation of the Company in connection with entering into
this Agreement, the other Transaction Documents or such transactions (other
than the representations made by the Company in this Agreement and the other
Transaction Documents, and in the written information described in paragraph
2.3 above), (iii) it has not received from the Company any assurance or
guarantee as to the merits (whether legal, regulatory, tax, financial or
otherwise) of entering into this Agreement or the other Transaction Documents
or the performance of its obligations hereunder and thereunder, and (iv) it has
consulted with its own legal, regulatory, tax, business, investment, financial
and accounting advisors to the extent that it has deemed necessary, and has
entered into this Agreement and the other Transaction Documents based on its
own independent judgment and on the advice of its advisors as it has deemed
necessary, and not on any view (whether written or oral) expressed by the
Company.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby makes the following representations, warranties and
covenants to Purchaser (which shall be true as the date hereof and as of the
Closing Date, provided that the representations and warranties made by the
Company in paragraph 3.18 hereof shall be true as of the date specified
therein) and agrees with Purchaser that:
3.1 Organization, Good Standing and Qualification. Each of the
Company and its subsidiaries is an entity duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation or
organization and has all requisite power and authority, corporate and
otherwise, to carry on its business as now conducted. Each of the Company and
its subsidiaries is duly qualified to transact business and is in good standing
in each jurisdiction in which the failure so to qualify would have a material
adverse effect on the consolidated business or financial condition of the
Company and its subsidiaries taken as a whole.
3.2 Authorization; Consents. The Company has the requisite
corporate power and authority to enter into and perform this Agreement, the
Registration Rights Agreement and the Warrant, to issue and sell the Shares and
the Warrant to Purchaser in accordance with the terms hereof, and to issue the
Warrant Shares upon exercise of the Warrant in accordance with its terms.
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All corporate action on the part of the Company by its officers, directors and
stockholders necessary for the authorization, execution and delivery of, and
the performance by the Company of its obligations under: (i) this Agreement;
(ii) the Registration Rights Agreement; (iii) the Warrant; (iv) the Amended and
Restated Registration Rights Agreement; (v) the Amended and Restated
Stockholders' Agreement dated as of the date hereof among the Company,
Purchaser, T. Xxxxxxxx Xxxxxxxx, Xxxxxx X. Xxxxxx, Xxxxxx X. Xxxxx, Xxxxx X.
Xxxxx and Xxxxxxx X. Xxxxx (the "Amended and Restated Stockholders'
Agreement"); and (vi) all other agreements, documents, certificates or other
instruments delivered by the Company at the Closing (the instruments described
in (i), (ii), (iii), (iv), (v) and (vi) being collectively referred to herein
as the "Transaction Documents") has been obtained and no further consent or
authorization of the Company, its Board of Directors or its stockholders is
required.
3.3 Enforcement. The Transaction Documents constitute valid and
legally binding obligations of the Company, enforceable in accordance with
their respective terms, except as such enforcement may be limited by (i)
applicable bankruptcy, insolvency, reorganization or other laws of general
application relating to or affecting the enforcement of creditors' rights
generally and (ii) general principles of equity. Except as otherwise provided
in the Transaction Documents, the Company has obtained all governmental or
regulatory consents and approvals required for it to execute, deliver and
perform its obligations under the Transaction Documents.
3.4 Disclosure Documents; Material Agreements; Other Information.
The Company has filed with the Commission: (i) the Company's Annual Report on
Form 10-K for the year ended March 31, 1997; (ii) Quarterly Reports on Form
10-Q and 10-Q/A for the quarters ended January 31, 1996, June 30, 1996,
September 30, 1996, December 31, 1996, June 30, 1997 and September 30, 1997;
(iii) Transition Report on Form 10-Q for the period from November 1, 1995
through March 31, 1996; (iv) all Current Reports on Form 8-K required to be
filed with the Commission since January 31, 1996; (v) the Company's definitive
Proxy Statement for its 1995 Annual Meeting of Shareholders; (vi) the Company's
definitive proxy statement for its 1997 Annual Meeting of Shareholders, a copy
of which has been provided to Purchaser (the "Proxy Statement"); (vii) any
amendments to the foregoing; and (viii) all schedules and exhibits attached
thereto (collectively, the "Disclosure Documents"). Except as described in the
1997 Proxy Statement, and except for the transactions contemplated hereby, the
Company is not aware of any event that would require the filing of a Form 8-K
within fifteen (15) days following the Closing Date. Each Disclosure Document,
as of the date of the filing thereof with the Commission, conformed in all
material respects to the requirements of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and the rules and regulations thereunder and,
as of the date of such filing or, if such Disclosure Document was subsequently
amended, as of the date of the filing of any amendment thereto with the
Commission, such Disclosure Document did not contain an untrue statement of
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. All material agreements required to be
filed as exhibits to the Disclosure Documents have been filed as required. The
written information provided to such Purchaser as described in paragraph 2.3
above does not contain an untrue statement of material fact or omit to state a
material fact required to be
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stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Except as set forth
in the financial statements of the Company included in the Disclosure
Documents, the Company has no liabilities, contingent or otherwise, other than
liabilities incurred in the ordinary course of business which, under generally
accepted accounting principles, are not required to be reflected in such
financial statements and which, individually or in the aggregate, are not
material to the business, operations or financial condition of the Company and
its subsidiaries taken as a whole.
3.5 Capitalization. The capitalization of the Company as of the
date hereof, including the authorized capital stock, the number of shares
issued and outstanding, the number of shares reserved for issuance pursuant to
the Company's stock option plans, the number of shares reserved for issuance
pursuant to securities exercisable for, or convertible into or exchangeable for
any shares of Common Stock and the number of shares initially to be reserved
for issuance upon exercise of the Warrant is set forth on Schedule 3.5 hereto.
All of such outstanding shares of capital stock have been, or upon issuance
will be, validly issued, fully paid and non-assessable. No shares of the
capital stock of the Company are subject to preemptive rights or any other
similar rights of the stockholders of the Company or any liens or encumbrances
created by or through the Company. Except as disclosed on Schedule 3.5, or as
contemplated herein, as of the date of this Agreement and as of the Closing
Date, there are no outstanding Equity Securities of the Company or any
subsidiary. The Shares shall represent approximately 3.6% of the Fully Diluted
Common Stock and 5.2% of the outstanding shares of Common Stock as of the
Closing Date. The Warrant Shares shall represent approximately 1.5% of the
Fully Diluted Common Stock as of the Closing Date.
3.6 Valid Issuance. The Shares are duly authorized and, when
issued, sold and delivered in accordance with the terms hereof: (i) will be
duly and validly issued, fully paid and nonassessable, free and clear of all
Liens; and (ii) based in part upon the representations of Purchaser in this
Agreement, will be issued, sold and delivered in compliance with all applicable
Federal and state securities laws. The Warrant Shares are duly authorized and
reserved for issuance and, upon exercise of the Warrant in accordance with its
terms, will be duly and validly issued, fully paid and nonassessable, free and
clear of all Liens. Upon payment of the Purchase Price at the Closing,
Purchaser will acquire good and marketable title to the Shares, free and clear
of all Liens. Upon payment of the Purchase Price at the Closing, Purchaser
will acquire good and marketable title to the Warrant, free and clear of all
Liens. Upon exercise of the Warrant in accordance with its terms, including
payment of the consideration in the form and amount specified therein,
Purchaser will acquire good and marketable title to the Warrant Shares, free
and clear of all Liens.
3.7 No Conflict with Other Instruments. Neither the Company nor
any of its subsidiaries is in violation of any provisions of its Certificate of
Incorporation or Bylaws as amended and in effect on and as of the date hereof;
the Company is not in default (and no event has occurred which, with notice or
lapse of time or both, would constitute a default) under any material provision
of any material instrument or contract to which it is a party or by which it is
bound, or of any provision of any Federal or state judgment, writ, decree,
order, statute, rule or governmental regulation applicable to the Company,
which would have a material adverse effect on the business, operations or
financial
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condition of the Company and its subsidiaries taken as a whole. The execution,
delivery and performance of this Agreement and the other Transaction Documents,
and the consummation of the transactions contemplated hereby and thereby
(including without limitation the issuance and reservation for issuance of the
Warrant Shares) will not result in any such violation or be in conflict with or
constitute, with or without the passage of time and giving of notice, either a
default under any such provision, instrument or contract or an event which
results in the creation of any lien, charge or encumbrance upon any assets of
the Company.
3.8 Financial Condition; Taxes; Litigation.
3.8.1 The Company's financial condition is, in all material
respects, as described in the Disclosure Documents, except for changes in the
ordinary course of business and normal year-end adjustments that are not, in
the aggregate, materially adverse to the Company. Except as otherwise
described in the Disclosure Documents, as of the date hereof and as of the
Closing there has been no material adverse change to the Company's business,
operations, properties, financial condition or results of operations since the
date of the Company's most recent audited financial statements contained in the
Disclosure Documents.
3.8.2 The Company has filed all tax returns required to be
filed by it and paid all taxes which are due, except for taxes which it
reasonably disputes or which could not reasonably be expected to have a
material adverse effect on the consolidated business or financial condition of
the Company.
3.8.3 Except as set forth on Schedule 3.8.3, the Company is
not the subject of any pending or, to its knowledge, threatened investigation
or administrative or legal proceeding by the Internal Revenue Service, the
taxing authorities of any state or local jurisdiction, the Commission or any
state securities commission or other governmental entity which could reasonably
be expected to have a material adverse effect on the business, operations or
financial condition of the Company and its subsidiaries taken as a whole.
3.8.4 Except as set forth on Schedule 3.8.4, there is no
material claim, litigation or administrative proceeding pending, or, to the
best of the Company's knowledge, threatened, against the Company or against any
officer, director or employee of the Company in connection with such person's
employment therewith. The Company is not a party to or subject to the
provisions of, any order, writ, injunction, judgment or decree of any court or
government agency or instrumentality which could reasonably be expected to have
a material adverse effect on the business, operations or financial condition of
the Company and its subsidiaries taken as a whole.
3.9 Reporting Company; Form S-3. The Company is subject to the
reporting requirements of the Exchange Act, has a class of securities
registered under Section 12 of the Exchange Act, and has filed all reports
required thereby. The Company is eligible to register for resale shares of its
Common Stock on a registration statement on Form S-3 under the Securities Act.
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3.10 No Reliance by Company. The Company acknowledges that (i) it
has such knowledge in business and financial matters as to be fully capable of
evaluating this Agreement, the other Transaction Documents and the transactions
contemplated hereby and thereby, (ii) it is not relying on any advice or
representation of Purchaser in connection with entering into this Agreement,
the other Transaction Documents or such transactions (other than the
representations made by Purchaser in this Agreement and the other Transaction
Documents), (iii) it has not received from Purchaser any assurance or guarantee
as to the merits (whether legal, regulatory, tax, financial or otherwise) of
entering into this Agreement or the other Transaction Documents or the
performance of its obligations hereunder and thereunder, and (iv) it has
consulted with its own legal, regulatory, tax, business, investment, financial
and accounting advisors to the extent that it has deemed necessary, and has
entered into this Agreement and the other Transaction Documents based on its
own independent judgment and on the advice of its advisors as it has deemed
necessary, and not on any view (whether written or oral) expressed by
Purchaser.
3.11 Acknowledgment of Dilution. The Company acknowledges that the
issuance of the Warrant Shares upon exercise of the Warrant Shares in
accordance with its terms may result in dilution of the outstanding shares of
Common Stock, which dilution may be substantial under certain market
conditions. The Company further acknowledges that its obligation to issue
Warrant Shares upon exercise of the Warrant in accordance with its terms is
unconditional and absolute regardless of the effect of any such dilution.
3.12 Registration Rights; Rights of Participation. Except as
described on Schedule 3.12 hereto, (A) the Company has not granted or agreed to
grant to any person or entity any rights (including "piggy-back" registration
rights) to have any securities of the Company registered with the Commission or
any other governmental authority and (B) no person or entity, including, but
not limited to, current or former shareholders of the Company, underwriters,
brokers, agents or other third parties, has any right of first refusal,
preemptive right, right of participation, or any similar right to participate
in the transactions contemplated by this Agreement or any other Transaction
Document which has not been waived.
3.13 Trading on Nasdaq. The Common Stock is authorized for
quotation on the Nasdaq National Market, and trading in the Common Stock on
Nasdaq has not been suspended as of the date hereof and as of the Closing Date.
3.14 Solicitation. Neither the Company nor any of its subsidiaries
or affiliates, nor any person acting on its or their behalf, (i) has engaged in
any form of general solicitation or general advertising (within the meaning of
Regulation D) in connection with the offer or sale of the Shares and the
Warrant; or (ii) has, directly or indirectly, made any offers or sales of any
security or solicited any offers to buy any security, under any circumstances
that would require registration of the Shares or the Warrant under the
Securities Act.
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3.15 Fees. The Company is not obligated to pay any compensation or
other fee, cost or related expenditure to any underwriter, broker, agent or
other representative in connection with the transactions contemplated hereby.
3.16 Foreign Corrupt Practices. Neither the Company, nor any of
its subsidiaries nor any director, officer, agent, employee or other person
acting on behalf of the Company or any subsidiary has (i) used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expenses relating to political activity, (ii) made any direct or indirect
unlawful payment to any foreign or domestic government official or employee,
(iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as
amended, or made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment to any foreign or domestic government official or
employee.
3.17 Pending Acquisitions. With respect to any acquisition of
assets or securities by the Company or any of its subsidiaries, the agreement
for which has been executed as of the date of this Agreement, the closing of
such acquisition, and the obligations of the parties thereunder, are not
conditioned in any respect on the maintenance at any given level of the closing
bid, ask or sale price of the Common Stock as quoted by Nasdaq.
3.18 Environmental Matters. Except as set forth in the Disclosure
Documents or on Schedule 3.18 hereof, the following representations and
warranties shall be true with respect to the Company and its subsidiaries (and
only those subsidiaries owned by the Company as of May 16, 1997) as of May 16,
1997:
3.18.1 To the best of the Company's knowledge, the Company and
each of its subsidiaries is in material compliance with all Environmental,
Health and Safety Laws (as defined below) governing its business, operations,
properties and assets. Neither the Company nor any of its subsidiaries is
currently liable for any penalties, fines or forfeitures for failure to comply
with any Environmental, Health and Safety Laws.
3.18.2 The Company and each of its subsidiaries has obtained,
or caused to be obtained, and to the best of the Company's knowledge, is in
material compliance with, all applicable and material licenses, certificates,
permits, approvals and registrations required by the Environmental, Health and
Safety Laws (collectively, "Licenses"). 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
or any of its subsidiaries, their respective businesses, operations, properties
or assets, which question the validity or entitlement of the Company or any of
its subsidiaries to any License wherein an unfavorable decision, ruling or
finding could have a material adverse effect on the Company or any of its
subsidiaries.
3.18.3 Neither the Company nor any of its subsidiaries has
received or is aware of any non-compliance order, warning letter,
investigation, notice of violation, claim, suit, action, judgment or
administrative or judicial proceeding pending or threatened against or
involving the Company or any of its subsidiaries, issued by any governmental
authority or third party with respect
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to any Environmental, Health and Safety Laws, which has not been resolved to
the satisfaction of the issuing governmental authority or third party and which
could have a material adverse effect on the Company or any of its subsidiaries.
3.18.4 To the best of the Company's knowledge, neither the
Company nor any of its subsidiaries has generated, manufactured, used,
transported, transferred, stored, handled, treated, Discharged, Released or
disposed of, nor has it allowed or arranged for any third parties to generate,
manufacture, use, transport, transfer, store, handle, treat, Discharge, Release
or dispose of, Hazardous Substances or other Waste (as defined below) to or at
any location other than a site lawfully permitted to receive such Hazardous
Substances or other waste for such purposes, nor has it performed, arranged for
or allowed by any method or procedure such generation, manufacture, use,
transportation, transfer, storage, treatment, spillage, leakage, dumping,
Discharge, Release or disposal in material contravention of any Environmental,
Health and Safety Laws. To the best of the Company's knowledge, neither the
Company nor any of its subsidiaries has generated, manufactured, used, stored,
handled, treated, Discharged, Released or disposed of, or allowed or arranged
for any third parties to generate, manufacture, use, store, handle, treat,
spill, leak, dump, discharge, release or dispose of, any material quantities of
Hazardous Substances or other waste upon property currently or previously owned
or leased by it, except as permitted by law. For purposes of this Agreement,
the term "Hazardous Substances" means any toxic or hazardous substance,
material, or waste, any other contaminant, pollutant or constituent thereof,
whether liquid, solid, semi-solid, sludge and/or gaseous, including without
limitation, chemicals, compounds, metals, by-products, pesticides, asbestos
containing materials, petroleum or petroleum products, and polychlorinated
biphenyls, the presence of which requires investigation or remediation under
any Environmental, Health and Safety Laws or which are or become regulated,
listed or controlled by, under or pursuant to any Environmental Health and
Safety Laws. For purposes of this Agreement, the term "Waste" means
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.
3.18.5 To the best of the Company's knowledge, neither the
Company nor any of its subsidiaries has caused, nor allowed to be caused or
permitted, either by action or inaction, a Release or Discharge, or threatened
Release or Discharge, of any material quantity of Hazardous Substances on, into
or beneath the surface of any parcel of the Owned Properties or the Leased
Premises or to any properties adjacent thereto which would have a material
adverse effect on the Company or its subsidiaries. To the best of the
Company's knowledge, there has not occurred, nor is there presently occurring,
a Release or Discharge, or, threatened Release or Discharge, of any material
quantity of Hazardous Substances on, into or beneath the surface of any parcel
of the Owned Properties or the Leased Premises or to any properties adjacent
thereto which would have a material adverse effect on the Company or its
subsidiaries. For purposes of this Agreement, the terms "Release" and
"Discharge" shall have the meanings given them in the Environmental, Health and
Safety Laws.
3.18.6 To the best of the Company's knowledge, neither the
Company nor any of its subsidiaries has generated, handled, manufactured,
treated, stored, used, shipped, transported,
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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 Hazardous
Substances or other Waste to or at a site which, pursuant to CERCLA or any
similar state law, has been placed or been proposed for placement on the
National Priorities List or its state equivalent. Neither the Company nor any
of its subsidiaries has received notice, and neither the Company nor any of its
subsidiaries has knowledge of any facts which could give rise to any notice,
that the Company or any of its subsidiaries is a potentially responsible party
for a federal or state environmental cleanup site or for corrective action
under Environmental Health and Safety Laws. Neither the Company nor any of its
subsidiaries has 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. Neither the Company nor any of its subsidiaries has received any
written 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 or any of its subsidiaries has transported,
transferred or disposed of other Wastes. Neither the Company nor any of its
subsidiaries has been required to or has undertaken any response or remedial
actions or clean-up actions of any kind at the request of any governmental
authorities or at the request of any other third party. To the best of the
Company's knowledge, neither the Company nor any of its subsidiaries has any
material liability under any Environmental, Health and Safety Laws for personal
injury, property damage, natural resource damage, or clean up obligations.
3.18.7 To the best of the Company's knowledge, there are no
Aboveground Storage Tanks or Underground Storage Tanks on the Owned Properties
or the Leased Premises. For purposes of this Agreement, the terms "Aboveground
Storage Tanks" and "Underground Storage Tanks" shall have the meanings given
them in Section 6901 et seq., as amended, of RCRA, or any applicable state or
local statute, law, ordinance, code, rule, regulation, order, ruling or decree
governing Aboveground Storage Tanks or Underground Storage Tanks.
3.18.8 Schedule 3.18 identifies (i) all material environmental
audits, assessments or occupational health studies, of which the Company is
aware, undertaken by the Company, its subsidiaries or their agents, or by any
governmental authority, or by any third party, relating to or affecting the
Company, its subsidiaries or any of the Leased Premises or the Owned
Properties; and (ii) all material 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 its subsidiaries or
any of the Leased Premises or the Owned Properties.
3.18.9 Schedule 3.18 contains a list of the assets of the
Company and its subsidiaries which have been confirmed to contain "Asbestos" or
"Asbestos-Containing Material" (as such terms are identified under the
Environmental, Health and Safety Laws). The Company and each of its
subsidiaries 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. There
are no claims, actions, suits, governmental investigations or proceedings
before any governmental authority or third party pending, or threatened against
or directly affecting the Company, any of its subsidiaries, or any of their
respective assets or operations
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relating to the use, handling or exposure to and disposal of asbestos or
asbestos-containing materials in connection with their assets and operations.
3.18.10 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, any of
which govern (or purport to govern) or relate to pollution, protection of the
environment, public health and safety, air emissions, water discharges,
hazardous or toxic substances, solid or hazardous waste or occupational health
and safety, as any of these terms are or may be defined in such statutes, laws,
rules, regulations, codes, orders, plans, injunctions, decrees, rulings and
changes or ordinances, or judicial or administrative interpretations thereof,
including, without limitation, the United States Department of Transportation
Table (49 CFR 172, 101) or by the Environmental Protection Agency as hazardous
substances (40 CFR Part 302) and any amendments thereto; the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendment and Reauthorization Act of 1986, 42 U.S.C. Section
9601, et seq. (collectively, "CERCLA"); the Solid Waste Disposal Act, as
amended by the Resource Conservation and Recovery Act of 1976 and subsequent
Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. section 6901 et seq.
(collectively "RCRA"); the Hazardous Materials Transportation Act, as amended,
49 U.S.C. Section 1801, et seq.; the Clean Water Act, as amended, 33 U.S.C.
Section 1311, et seq.; the Clean Air Act, as amended (42 U.S.C. Section
7401-7642); Toxic Substances Control Act, as amended, 15 U.S.C. Section 2601 et
seq.; the Federal Insecticide, Fungicide, and Rodenticide Act as amended, 7
U.S.C. Section 136-136y ("FIFRA"); the Emergency Planning and Community
Right-to-Know Act of 1986 as amended, 42 U.S.C. Section 11001, et seq. (Title
III of XXXX) ("EPCRA"); the Occupational Safety and Health Act of 1970, as
amended, 29 U.S.C. Section 651, et seq. ("OSHA"); any similar state statute, or
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.
3.18.11 Schedule 3.18 identifies the operations and
activities, and locations thereof, which have been conducted and are being
conducted by the Company or any of its subsidiaries 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.
3.18.12 To the best of the Company's knowledge, none of the
Owned Properties or Leased Premises presently includes, or has been
constructed upon, any "Wetlands" as defined under applicable Environmental,
Health and Safety Laws.
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14
3.18.13 Unless otherwise specified herein, as used in Section
3.18, the terms "Owned Properties" and "Leased Premises" are deemed to refer
only to the properties currently owned or leased by the Company.
4. COVENANTS.
4.1 Covenants of the Company. The Company hereby agrees and
covenants with Purchaser as follows:
4.1.1 Corporate Existence. The Company shall, so long as
Purchaser beneficially owns any Securities, maintain its corporate existence in
good standing and shall pay all its taxes when due except for taxes which the
Company reasonably disputes or which could not reasonably be expected to have a
material adverse effect on the business, operations or financial condition of
the Company and its subsidiaries taken as a whole.
4.1.2 Form D; Blue-Sky Qualification. The Company agrees to
file a Form D with respect to the Securities as required under Regulation D and
to provide a copy thereof to Purchaser promptly after such filing. The Company
shall, on or before the Closing, take such action as is necessary to qualify
the Shares and the Warrant Shares for sale under applicable state or "blue-sky"
laws or obtain an exemption therefrom, and shall provide evidence of any such
action to Purchaser at or prior to the Closing.
4.1.3 Reporting Status. As long as Purchaser or any
affiliate of Purchaser beneficially owns any Securities and until the date on
which any of the foregoing may be sold to the public pursuant to Rule 144(k)
(or any successor rule or regulation), (i) the Company shall timely file with
the Commission all reports required to be so filed pursuant to the Exchange Act
and (ii) the Company shall not terminate its status as an issuer required by
the Exchange Act to file reports thereunder even if the Exchange Act or the
rules or regulations thereunder would permit such termination. The Company will
issue a press release (the form and content of which shall be subject to
Purchaser's prior written comment) describing the transactions contemplated by
this Agreement no later than the business day following the Closing Date.
4.1.4 Use of Proceeds. The Company shall use the proceeds
from the sale of the Shares and Warrant for general corporate purposes and
shall not use such proceeds to make a loan to or an investment in any other
corporation, partnership or other entity, provided that the Company may use
such proceeds as full or partial consideration for the purchase of more than
50% of the voting equity or substantially all of the assets of any corporation,
partnership or other entity.
4.1.5 Quotation on Nasdaq. The Company shall promptly secure
the designation and quotation of the Warrant Shares on the Nasdaq National
Market and shall use its best efforts to maintain the designation and quotation,
or listing, of the shares of Common Stock on the Nasdaq National Market or, if
not quoted on such market, the New York Stock Exchange or other national
securities exchange.
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4.1.6 Use of Purchaser Name. The Company shall not use,
directly or indirectly, Purchaser's name in any advertisement, announcement,
press release or other similar communication unless it has received the prior
written consent of Purchaser for the specific use contemplated, or except as it
may be required to do so, in the reasonable opinion of counsel to the Company,
pursuant to applicable law or regulation, provided, whenever practicable, the
Company first consults with Purchaser concerning the timing, form and content
of such use before such use is made.
4.1.7 Company's Instructions to Transfer Agent. On or prior
to the Closing, the Company shall execute and deliver a letter to its transfer
agent (the "Transfer Agent"), thereby appointing the Transfer Agent as the
Company's exercise agent and irrevocably instructing the Transfer Agent: (i)
to issue certificates representing the Warrant Shares upon exercise of the
Warrant in accordance with its terms upon receipt of a valid exercise from
Purchaser; (ii) to issue certificates representing the number of Warrant Shares
specified in such exercise notice, free of any restrictive legend, in the name
of Purchaser or its nominee as long as the sale of the Warrant Shares is
registered pursuant to an effective registration statement or such shares are
eligible for resale under Rule 144(k); and (iii) to deliver certificates to
such Purchaser no later than the close of business on the later to occur of (i)
the third (3rd) business day following the date of exercise and (ii) the
business day following the day on which the Warrant is received by the Company.
As long as purchases and sales of shares of Common Stock are eligible for
settlement at the Depository Trust Company ("DTC"), the Company may instruct
the Transfer Agent that, in lieu of delivering physical certificates to
Purchaser upon exercise of the Warrant, the Transfer Agent may effect delivery
of Warrant Shares by crediting the account of Purchaser or its nominee at DTC
for the number of shares for which delivery is required hereunder within the
time frame specified above for delivery of certificates. The Company represents
to and agrees with Purchaser that it will not give any instruction to the
Transfer Agent that will conflict with the foregoing instruction or otherwise
restrict Purchaser's right to exercise the Warrant or receive Warrant Shares in
accordance with the terms of the Warrant, the Registration Rights Agreement and
this Agreement, respectively. In the event the Company's relationship with the
Transfer Agent should be terminated for any reason, the Transfer Agent shall
continue acting as transfer agent pursuant to the terms hereof until such time
that a successor transfer agent is appointed by the Company and agrees to be
bound by the terms hereof.
4.1.8 Reservation of Shares. As long as the Warrant has
not expired and all of the Warrant Shares issuable thereunder have not been
issued, the Company at all times shall have authorized and reserved for
issuance the number of shares of Common Stock remaining issuable thereunder.
4.1.9 Board Representation. Until the third anniversary of
the Closing Date, so long as Purchaser and its affiliates do not sell or
otherwise dispose of more than one-third of the Shares and the Warrant Shares
(on an as exercised basis), other than to affiliates of Purchaser: (a)
Purchaser shall be entitled to designate one director to the Company's board of
directors; and (b) the Company shall take all necessary or appropriate action
to assist in the nomination and election of Purchaser's designee as a director
of the Company, with such designee's initial term of office to begin no later
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than six months after the Closing Date, provided, that the director so
designated by Purchaser shall be either Mr. Xxx Xxxx or Xx. Xxx X. Xxxxxxxx.
4.2 Covenant of Purchaser.
No Tender Offers. For a period of one year from the Closing
Date, unless such shall have been specifically invited by the Company, neither
Purchaser nor any of its affiliates (as defined under the Securities Exchange
Act of 1934, as amended) (other than any public affiliates) will: (i) propose
to the Company or any other person any transaction between Purchaser and the
Company and/or its security holders or involving any of its securities or
security holders, whether by merger, tender offer or otherwise; (ii) acquire,
or assist, advise or encourage any other persons in acquiring, directly or
indirectly, control of the Company, whether by solicitation of proxies or
otherwise, or any of the Company's securities, businesses or assets; or (iii)
request or demand the call, or participate with or in any way assist any other
person in requesting or demanding the call of a special or annual meeting of
shareholders. Purchaser also agrees that the Company shall be entitled to
equitable relief, including injunction, in the event of any breach of the
provisions of this paragraph; provided, however, that, notwithstanding anything
to the contrary in this Section 4.2, Purchaser shall be entitled to sell or
pledge the Shares, the Warrant and the Warrant Shares to any party whatsoever.
5. CONDITIONS TO CLOSING.
5.1 Conditions to Purchaser's Obligations at Closing. Purchaser's
obligations at the Closing, including without limitation its obligation to
purchase the Shares and the Warrant, are conditioned upon the fulfillment of
each of the following events:
5.1.1 the representations and warranties of the Company set
forth in this Agreement shall be true and correct in
all material respects as of the date of the Closing as
if made on such date; provided that the
representations and warranties made by the Company in
paragraph 3.18 shall be true and correct in all
material respects as of the date specified therein;
5.1.2 the Company shall have complied with or performed all
of the agreements, obligations and conditions set
forth in this Agreement that are required to be
complied with or performed by the Company on or
before the Closing;
5.1.3 the Company shall have delivered to Purchaser a
certificate, signed by an officer of the Company,
certifying that the conditions specified in
paragraphs 5.1.1 and 5.1.2 above have been fulfilled;
5.1.4 the Company shall have delivered to Purchaser an
opinion of counsel for the Company, dated as of the
date of the Closing, in the form attached as Exhibit
5.1.4 hereto;
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5.1.5 the Company and the other parties thereto shall have
executed and delivered the Shelf Registration Rights
Agreement, the Amended and Restated Registration
Rights Agreement and the Amended and Restated
Stockholders' Agreement;
5.1.6 the Common Stock shall be designated for quotation
and actively traded on the Nasdaq National Market;
5.1.7 there shall have been no material adverse changes in
the consolidated business or financial condition of
the Company and its subsidiaries taken as a whole
since the date of the Company's most recent audited
financial statements contained in the Disclosure
Documents; and
5.1.8 the Company shall have authorized and reserved for
issuance upon exercise of the Warrant in full the
number of shares of Common Stock issuable thereunder.
5.2 Conditions to Company's Obligations at Closing. The Company's
obligations at the Closing are conditioned upon the fulfillment of each of the
following events:
5.2.1 the representations and warranties of Purchaser shall
be true and correct in all material respects as of
the date of the Closing as if made on such date;
5.2.2 Purchaser shall have complied with or performed all
of the agreements, obligations and conditions set
forth in this Agreement that are required to be
complied with or performed by Purchaser on or before
the Closing; and
5.2.3 Purchaser shall have delivered to the Company a
certificate, signed by an officer of Purchaser,
certifying that the conditions specified in
paragraphs 5.2.1 and 5.2.2 above have been fulfilled.
6. INDEMNIFICATION.
The Company agrees to indemnify and hold harmless Purchaser and its
officers, directors, employees and agents, and each person who controls
Purchaser within the meaning of the Securities Act or the Exchange Act (each, a
"Purchaser Indemnified Party") against any losses, claims, damages, liabilities
or reasonable out-of-pocket expenses (including the reasonable fees and
disbursements of counsel) as incurred, joint or several, to which it, they or
any of them, may become subject and not otherwise reimbursed, arising out of or
in connection with the breach by the Company of any of its representations,
warranties or covenants made herein. In addition, in the event of a breach or
inaccuracy (a) by Xxxxx Iron & Metal, Inc. ("Xxxxx"), Xxxxxx X. Xxxxx, Xxxxx X.
Xxxxx or Xxxxxxx X. Xxxxx (the "Xxxxx Shareholders") of the representation and
warranty contained in Section 4.13 of that certain Agreement and Plan of Merger
dated May 16, 1997 by and
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among Xxxxx, the Xxxxx Shareholders, the Company and CIM Acquisition Co. (the
"Xxxxx Agreement"), and/or (b) by the Xxxxx Corporation, Ferrex Trading
Corporation, Paulding Recycling, Inc., Briquetting Corporation of America (the
"Xxxxx Companies"), or any of the former shareholders of the Xxxxx Companies
(the "Xxxxx Shareholders") of the representation and warranty contained in
Section 4.13 of that certain Purchase Agreement and Plan of Merger dated June
23, 1997 by and among the Xxxxx Companies, the Xxxxx Shareholders, the Company
and Xxxxx Acquisition Corporation (the "Xxxxx Agreement"), for which the
Company is entitled to indemnification pursuant to the Xxxxx Agreement or the
Xxxxx Agreement, as the case may be, the Company shall indemnify and hold
harmless Purchaser against any losses, claims, damages, liabilities or
reasonable out-of-pocket expenses (including the reasonable costs and
disbursements of counsel) incurred by Purchaser as a result of such breach or
inaccuracy.
Purchaser agrees to indemnify and hold harmless the Company and its
officers, directors, employees and agents, and each person who controls the
Company within the meaning of the Securities Act or the Exchange Act (each, a
"Company Indemnified Party") (a Purchaser Indemnified Party and a Company
Indemnified Party are each hereinafter referred to as an "Indemnified Party")
against any losses, claims, damages, liabilities or expenses (including the
fees and disbursements of counsel) as incurred, joint or several, to which it,
they or any of them, may become subject and not otherwise reimbursed, arising
out of or in connection with the breach by Purchaser of any of its
representations, warranties or covenants made herein.
Promptly after receipt by an Indemnified Party of notice of the
commencement of any action pursuant to which indemnification may be sought
hereunder, such Indemnified Party will, if a claim in respect thereof is to be
made against the other party (the "Indemnifying Party"), deliver to the
Indemnifying Party a written notice of the commencement thereof and, upon
delivery to the Indemnified Party of the Indemnifying Party's undertaking and
agreement that such claim is within the scope of the Indemnifying Party's
indemnity to the Indemnified Party under this Agreement, the Indemnifying Party
shall have the right to participate in and to assume the defense thereof with
counsel reasonably selected by the Indemnifying Party, provided, however, that
an Indemnified Party shall have the right to retain its own counsel, with the
reasonably incurred fees and expenses of such counsel to be paid by the
Company, if representation of such Indemnified Party by the counsel retained by
the Indemnifying Party would be inappropriate due to actual or potential
conflicts of interest under applicable standards of professional conduct
between such Indemnified Party and any other party represented by such counsel
in such proceeding. The failure to deliver written notice to the Indemnifying
Party within a reasonable time of the commencement of any such action will not
relieve the Indemnifying Party of any of its obligations hereunder with respect
to such action except to the extent such failure is prejudicial to the
Indemnifying Party's ability to defend any such action.
No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of pending or threatened action in
respect of which an Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party unless
such settlement includes an unconditional release of such Indemnified Party
from all liability
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on any claims that are the subject matter of such action. An Indemnifying
Party will not be liable for any settlement of any action or claim effected
without its written consent.
7. MISCELLANEOUS.
7.1 Survival; Severability. The representations and warranties
made by the parties herein shall survive the Closing until the sooner to occur
of the date which is (i) eighteen (18) months from the date hereof or (ii) the
first date on which the Purchaser no longer owns any Shares or Warrant Shares
(on an as exercised basis), notwithstanding any due diligence investigation
made by or on behalf of the Purchaser. No claim may be asserted by Purchaser
for any breach or misrepresentation of any representation or warranty of the
Company after such representations and warranties have expired; provided,
however, that any claims first asserted within the survival period shall not
thereafter be barred. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that no such severability shall be effective
if it materially changes the economic benefit of this Agreement to either
party.
7.2 Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement. The Purchaser may assign its rights hereunder (other than
those under Section 4.1.9 hereof), in connection with any private sale or
transfer of the Shares, so long as, as a condition precedent to such transfer,
the transferee executes an acknowledgment agreeing to be bound by the
applicable provisions of this Agreement, in which case the term "Purchaser"
shall be deemed to refer to such transferee as though such transferee were an
original signatory hereto.
7.3 Injunctive Relief. The Company acknowledges that a breach by
it of its obligations hereunder will cause irreparable harm to Purchaser and
that the remedy or remedies at law for any such breach will be inadequate and
agrees, in the event of any such breach, in addition to all other available
remedies, to an injunction restraining any breach and requiring immediate and
specific performance of such obligations without the necessity of showing
economic loss.
7.4 Governing Law; Jurisdiction. This Agreement shall be governed
by and construed under the laws of the State of Delaware without regard to the
conflict of laws provisions thereof. Each party hereby irrevocably submits to
the jurisdiction of the state and federal courts sitting in the City of
Wilmington, Delaware for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding
is improper. Each party hereby irrevocably waives personal service of process
and consents to process being served in any
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such suit, action or proceeding by mailing a copy thereof to such party at the
address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner permitted by law.
7.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
7.6 Headings. The headings used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting
this Agreement.
7.7 Notices. Any notice, demand or request required or permitted
to be given by any party to any other party pursuant to the terms of this
Agreement shall be in writing and shall be deemed given: (i) when delivered
personally or by verifiable facsimile transmission (with a hard copy to follow)
on or before 5:00 p.m., eastern time, on a business day or, if such day is not
a business day, on the next succeeding business day; (ii) on the next business
day after timely delivery to an overnight courier; and (iii) on the third
business day after deposit in the U.S. mail (certified or registered mail,
return receipt requested, postage prepaid), addressed to the parties as
follows:
If to the Company:
Metal Management, Inc.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
Fax: (000) 000-0000
With a copy to:
Xxxxxxx & Xxxxxxxx Ltd.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx. Esq.
Fax: (000) 000-0000
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21
If to Purchaser:
Samstock, L.L.C.
Two Xxxxx Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxx X. Xxxxxxxx
Fax: (000) 000-0000
With a copy to:
Xxxxxxxxx & Xxxxxxxxxxx, P.C.
Two Xxxxx Xxxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx
Fax: (000) 000-0000
or to such other address or fax number as any party shall specify in writing to
the other parties.
7.8 Expenses. Except as otherwise specified herein, each of the
Company and each Purchaser shall pay all costs and expenses that it incurs in
connection with the negotiation, execution, delivery and performance of this
Agreement.
7.9 Entire Agreement; Amendments. This Agreement and the other
Transaction Documents constitute the entire agreement between the parties with
regard to the subject matter hereof and thereof, superseding all prior
agreements or understandings, whether written or oral, between or among the
parties. Except as expressly provided herein, neither this Agreement nor any
term hereof may be amended except pursuant to a written instrument executed by
the Company and Purchaser, and no provision hereof may be waived other than by
a written instrument signed by the party against whom enforcement of any such
waiver is sought.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first-above written.
METAL MANAGEMENT, INC., a Delaware
corporation
By:/s/ XXXXXX X. XXXXXX
--------------------------------------
Name: XXXXXX X. XXXXXX
------------------------------------
Title: CHIEF EXECUTIVE OFFICER
-----------------------------------
SAMSTOCK, L.L.C., a Delaware
limited liability company
By: SZ Investments, L.L.C., its
managing member
By: Xxxx General Partnership,
Inc., its managing member
By:/s/ XXX XXXXXXXX
---------------------------------
Name: XXX XXXXXXXX
-------------------------------
Title: VICE PRESIDENT
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