[GRAPHIC OMITTED]
October 12, 2007
X. Xxxxxx & Partners Inc.
000 Xxxx Xxxxxx, Xxxxx #0000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xx. Xxxxx Xxxxxx XXx CIRP
Re: Steelbank Tubular, Inc.
0000 Xxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxx
X0X 0X0
Asset Engineering Corporation (hereinafter referred to as "AEC" or the
"Purchaser") and X. Xxxxxx & Partners Inc. in its capacity as Interim Receiver
of the property, assets and undertakings of Steelbank Tubular Inc. (hereinafter
referred to as "Receiver") hereby agree to the following terms and conditions.
1) AEC hereby makes an enbloc offer to purchase the assets of Steelbank
Tubular, Inc. to include all furniture, fixtures, machinery, equipment,
computers, warehouse racking, material handling equipment as inspected on a
wall-to-wall, floor-to-ceiling basis, excluding all inventory (the
"Purchased Assets", for the sum of $1,405,800, ONE MILLION, FOUR HUNDRED
AND FIVE THOUSAND, EIGHT HUNDRED DOLLARS (the "Purchase Price").
2) AEC does not assume responsibility for disposal or proper treatment of any
hazardous materials as defined by municipal, provincial or federal
legislation.
3) AEC shall be permitted to use the name "Steelbank Tubular Inc." for the
duration of the sale.
Asset Engineering Corporation
0 Xxxxxxxxx Xxxx Xxxx, Xxxxxxx, Xxxxxxx X0X 0X0
000-000-0000 * 000-000-0000 / fax 000-000-0000 * 000-000-0000
xxx.xxxxxxxxxxxxxxxx.xxx
X. Xxxxxx & Partners Inc.
Receiver for Steelbank Tubular Inc.
Att: Xx. Xxxxx Xxxxxx
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4) The Receiver shall provide the free use of and exclusive unrestricted
access to the serviced premises to AEC from closing date to December 21,
2007. The Receiver requires shared access to the premises during that
period to effect the orderly liquidation of the inventory, collect accounts
receivables and attend to the orderly removal of accounting and other
pertinent documentation. The Receiver and/or designated employees of
Steelbank shall be provided reasonable access to the premises, during
regular business hours to effect the above activities.
5) The premises shall be left in a clean, broom-swept xxxxxxx-like condition
upon vacating. AEC shall be responsible for clean up and garbage removal.
The Receiver shall, upon the submission of invoices or other documentation
acceptable to the Receiver, reimburse AEC for clean up and garbage removal
costs up to a maximum of $5,000. Any cleanup or garbage removal costs in
excess of $5,000 shall be exclusively for the account of AEC.
6) The Receiver shall make best efforts to obtain a Vesting Order from the
Ontario Superior Court of Justice vesting all of the Receiver and the
Company's right, title and interest in the property to AEC, free and clear
of and from any and all valid claims against the Purchased Assets.
7) It is agreed by AEC that there shall be no deduction from the Purchase
Price in the event that the Receiver is unable to deliver the overhead
cranes, crane supports and crane rails that were referenced as items 1) and
2) on page 5 of the list of assets that was appended to the Receiver's
Invitation for Offers (provided for information purposes only and not
verified by the Receiver).
8) The Receiver acknowledges that AEC may be adding consignment inventory to
enhance the sale. AEC shall insure all of the consignment inventory.
9) AEC reserves the right to amend its Proposals in the event that between the
date of this letter and the date or proposed date of the auction or sale
there occurs an event of force majeure, which is any event or occurrence
not within the reasonable control of AEC, and includes, but is not limited
to, acts of God, riots, civil disturbances, strikes, lock-outs, acts of
war, terrorism, insurrection and the like.
10) The Additional Terms & Conditions of Sale (Attached as Schedule "A" hereto)
shall apply to this transaction and shall be an integral part of the
agreement between the Receiver and AEC.
Asset Engineering Corporation
Steelbank Tubular Purch Proposal.doc
Page 2
X. Xxxxxx & Partners Inc.
Receiver for Steelbank Tubular Inc.
Att: Xx. Xxxxx Xxxxxx
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Yours truly,
Asset Engineering Corporation
per:
/s/ Xxxx Xxxxxxx
Xxxx Xxxxxxx
Accepted by:
X. XXXXXX & PARTNERS INC. in its capacity as Interim Receiver of the property,
assets and undertakings of Steelbank Tubular Inc. and not in its personal or
corporate capacity per:
/s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx CA-CIRP
(authorized signing officer)
Date: October 12, 2007
-----------------------------------
Asset Engineering Corporation
Steelbank Tubular Purch Proposal.doc
Page 3
X. Xxxxxx & Partners Inc.
Receiver for Steelbank Tubular Inc.
Att: Xx. Xxxxx Xxxxxx
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Schedule "A"
Additional Terms and Conditions
1. Closing. The closing of the transactions contemplated by this agreement (the
"Closing") shall be subject to the receipt of the Approval Order no later than
October 18, 2007, and shall take place on October 18, 2007, unless otherwise
extended by agreement of the parties (the "Closing Date").
a. "As is, Where is". The sale of Assets shall be on an "as is, where is"
and "without recourse" basis. Neither the Company ------------------
nor the Receiver nor any of their respective directors, officers,
employees, professional consultants or advisors, agents or
representatives have or will make or grant any representations,
warranties, terms, conditions, understandings or collateral
agreements, express or implied, statutory or otherwise, including,
without limitation, under the Sale of Goods Act (Ontario), all of
which are expressly waived by the Purchaser, with respect to title,
encumbrances, outstanding liens, assignability, merchantability,
condition, description, present or future uses, fitness for purpose or
use, quality, quantity, cost, value or the validity, invalidity, or
enforceability of any patent, copyright or trade-mark right, or as to
any other matter whatsoever regarding the Assets, or otherwise
concerning the Assets or the right of the Receiver to sell, transfer
or assign the same. The Purchaser has relied entirely on its own
judgement, inspection and investigation of the Purchased Assets and
acknowledges that it, at its own expense, has inspected the Purchased
Assets; that it is satisfied with, and has relied entirely on, its
own, inspection, investigations and judgment; and in making an offer
and proceeding with and completing the purchase of the Purchased
Assets pursuant thereto, accepts the Purchased Assets on an "as is,
where is" and "without recourse" basis. Except as may otherwise be
provided herein, all Purchased Assets shall be as they exist on the
Closing Date without adjustment to the Purchase Price or any other
terms and conditions herein for changes of any kind to the Purchased
Assets, including, without limitation, changes in the condition,
quality or quantity of the Purchased Assets from the date hereof to
such Closing Date. The Receiver shall not be required to produce
evidence as to title, other than those in its possession.
b. Payment of the Purchase Price. The Purchaser(s) shall pay the Purchase
on the Closing Date by bank draft or certified cheque.
Asset Engineering Corporation
Steelbank Tubular Purch Proposal.doc
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X. Xxxxxx & Partners Inc.
Receiver for Steelbank Tubular Inc.
Att: Xx. Xxxxx Xxxxxx
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c. Taxes. In addition to the balance of the Purchase Price, on the
Closing Date the Purchaser(s) shall pay to the Receiver all ----- the
applicable federal and provincial taxes, duties, fees or like charges
exigible in connection with the sale, conveyance or transfer of the
Purchased Assets together with all registration fees or other charges
properly payable or exigible upon or in connection with such
transaction(s), including, without limitation, all federal and
provincial sales taxes, use taxes, consumption taxes, land transfer
taxes and similar taxes and all goods and services taxes imposed under
the Excise Tax Act (Canada) ("Taxes"), unless the necessary
certificates, if applicable, in form and substance ----- satisfactory
to the Receiver, to exempt the Purchaser(s) therefrom are provided to
the Receiver on or before the Closing Date. The Purchaser(s) shall
indemnify and save the Receiver harmless from and against any and all
costs, expenses, liabilities and damages incurred or suffered by the
Receiver as a result of the failure of the Purchaser(s) to pay any
Taxes.
d. Expenses. The Purchaser shall be responsible for and pay as and when
required, in addition to the balance of the Purchase Price,
(i) costs, if any, of dismantling or removing the Purchased Assets
from their present location; and
(ii) the cost of repairing any damage caused by the Purchaser(s) by
dismantling or removal of the Purchased Assets from their present
location. The Purchaser(s) shall repair and be liable for any
damages or claims caused by or in any way arising out of such
dismantling and removal of any Purchased Assets from the premises
leased by the Company in any manner. Prior to the removal of any
such property, the Purchaser(s) shall provide evidence
satisfactory to the Receiver regarding the nature of and
arrangement for the repairs to be effected to the premises
subsequent to the removal of the Purchased Assets. The Receiver
and the Company will not be responsible for any damages or costs
whatsoever which may arise if the Purchaser(s) fails to remove
such Purchased Assets. The Purchaser(s) hereby indemnifies and
saves harmless the Receiver and the Company of and from any and
all actions, causes of action, damages, claims, costs, losses,
liabilities and other amounts which the Receiver or the Company
may incur or suffer by reason of any default by the Purchaser
with respect to the obligations herein.
(v) AEC shall not be responsible for occupancy costs relative to the
Premises from date of closing to December 21, 2007. Any extension
of time required by AEC will be as negotiated directly between
AEC and the landlord and AEC will solely be responsible for those
occupancy costs.
Asset Engineering Corporation
Steelbank Tubular Purch Proposal.doc
Page 5
X. Xxxxxx & Partners Inc.
Receiver for Steelbank Tubular Inc.
Att: Xx. Xxxxx Xxxxxx
--------------------------------------------------------------------------------
e. Conditions of Closing. The obligation of the Receiver to complete the
transactions contemplated by herein, shall be subject to the
satisfaction of certain terms and conditions at or prior to the time
of the Closing (the "Closing Time"), which conditions are for the sole
benefit of the Receiver and which may be waived by the Receiver in its
sole and absolute discretion, including, without limitation, that:
(i) The representations and warranties of the Purchaser(s) made
herein shall be true and correct at the Closing Time with the
same force and effect as if made at and as of the Closing Time;
the covenants contained herein to be performed by the
Purchaser(s) at or prior to the Closing Time shall have been
performed; the Purchaser(s) shall not be in breach of any
agreement on its part contained herein and the Receiver shall
have received certificates confirming the foregoing, signed for
and on behalf of the Purchaser(s) by a duly authorized officer(s)
thereof;
(ii) All documents relating to the due authorization and completion of
the transactions contemplated herein and all actions and
proceedings taken at or prior to the Closing Time in connection
with the performance by the Purchaser(s) of its obligations
hereunder shall be satisfactory to the Receiver and its counsel,
and the Receiver shall have received copies of all such documents
and evidence that all such actions and proceedings have been
taken as it may reasonably request in form and substance
satisfactory to the Receiver and its counsel;
(iii) The Receiver shall have received the Approval Order and an order
of the Court vesting all right, title and interest in and to the
Purchased Assets in and to the Purchaser(the "Vesting Order"),
and any consents which it deems in its sole and absolute
discretion to be necessary or admissible in connection with this
agreement.
In the event that any of the foregoing conditions are not satisfied at
the Closing Time, then the Receiver in its sole and absolute
discretion may either terminate this agreement without any further
consequence or obligation to the Purchaser(s), or waive compliance
with any such condition without prejudice to its right of termination
in the event of non-fulfillment of any other condition
f. Other Approvals and Compliance. Other than the Approval Order and
Vesting Order, it shall be the sole responsibility of the Purchaser(s)
to obtain, and pay the cost of obtaining, any consents, permits,
licenses or other authorizations necessary or desirable for the sale,
transfer or conveyance to the Purchaser(s) of the Company's and the
Receiver's right, title and interest, if any, in and to the Purchased
Assets. The Purchaser(s) shall assume, at its cost, complete
responsibility for compliance with all municipal, provincial and
federal laws insofar as the same apply to the Purchased Assets or the
right, title, and interest of the Company and or the Receiver therein,
if any, and use thereof by such Purchaser(s).
Asset Engineering Corporation
Steelbank Tubular Purch Proposal.doc
Page 6
X. Xxxxxx & Partners Inc.
Receiver for Steelbank Tubular Inc.
Att: Xx. Xxxxx Xxxxxx
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g. Conveyance. Any deed or bill of sale or assignment provided on closing
shall only contain a conveyance of the Company's right, title, and
interest, if any, in the Purchased Assets, and shall not contain any
covenants other than a covenant that the Receiver has the right to
sell the Purchased Assets and that the Receiver has done nothing to
encumber the Purchased Assets.
h. Taking Delivery. The Purchaser(s) shall take delivery of the Purchased
Assets where situated immediately upon closing at the Closing Time.
Unless otherwise agreed between the Purchaser(s) and the Landlord of
the premises in which the Purchased Assets are situated (the
"Premises"), the Purchaser(s) agrees to have the Purchased Assets
removed from the Premises by no later than December 21, 2007. The
Premises shall be left in a clean, broom swept condition.
i. Risk. Prior to the Closing Time, the Purchased Assets shall be and
remain in the possession of and at the risk of the ------- Company,
and the Company will hold all policies of insurance effected thereon
and the proceeds thereof for the Company. After the Closing Time, the
Purchased Assets shall be at the sole risk of the Purchaser(s). In the
event of theft or substantial damage to the Purchased Assets occurring
before the Closing Time the Purchaser may either have the proceeds of
insurance and complete this agreement or may cancel this agreement and
have all monies paid returned without interest, deduction, costs or
compensation whatsoever. Where any damage is not substantial, the
Purchaser shall be obliged to complete the purchase and shall be
entitled to the proceeds of insurance referable to such damage, but
not to any other costs or compensation whatsoever, and the Purchaser
shall have no claim or cause of action against the Receiver or the
Company.
j. Receiver Obligation to Close. The obligation of the Receiver to
complete a sale of the Purchased Assets shall be relieved if, on or
before the Closing Time, the assets which are the subject of the sale
have been removed from the control of the Receiver by any means or
process, enjoined, or any asset is redeemed whereupon the only
obligation of the Receiver shall be return the applicable deposit,
without interest, deduction, costs, or compensation. In this event,
the Receiver shall have no further obligation to the Purchaser(s).
k. Representations and Warranties. The Purchaser(s) shall make certain
representations and warranties, including, without limitation that:
(i) It is a corporation duly incorporated, organized and subsisting
and in good standing under the laws of its jurisdiction of
incorporation;
(ii) It is not a non-resident of Canada as defined in the Investment
Canada Act or the Income Tax Act (Canada).
(iii) It has the corporate power and authority to enter into and
perform its obligations under this agreement and all necessary
actions and approvals have been taken or obtained by the
Purchaser(s) to authorize the creation, execution, delivery and
Asset Engineering Corporation
Steelbank Tubular Purch Proposal.doc
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X. Xxxxxx & Partners Inc.
Receiver for Steelbank Tubular Inc.
Att: Xx. Xxxxx Xxxxxx
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performance of this agreement; the agreement has been duly
executed and delivered by the Purchaser(s) and constitutes a
legal, valid and binding obligation of the Purchaser(s); and the
agreement is enforceable against the Purchaser(s) in accordance
with its terms.
l. Merger. The Terms and Conditions herein as well as the terms of this
agreement shall not merge on the closing of the transaction but shall
survive such closing and remain in full force and effect and be
binding on the Purchaser(s) thereafter.
m. Further Assurances. Each of the parties shall, from time to time,
before and after the Closing Date, at the expense and request of the
other, take or cause to be taken such actions and execute and deliver
or cause to be executed and delivered to the other such documents or
future assurances as may be reasonably necessary to give effect to
this agreement.
n. Assignment. The Purchaser(s) shall not assign its rights and
obligations under this agreement without the written consent of the
Receiver, which may be withheld on the Receiver's sole and absolute
discretion.
o. Entire Agreement. This agreement shall constitute the entire agreement
between the parties to it pertaining to the subject matter thereof and
shall supersede all prior and contemporaneous agreements,
understandings, negotiations and discussions, whether oral or written,
of the parties and there shall be no agreements or understandings
between the parties in connection with the subject matter thereof
except as specifically set forth herein.
p. Governing Law. The validity and interpretation this agreement shall be
governed by the laws of Ontario and the laws of Canada applicable in
therein.
q. Confidentiality Agreement. The Purchaser acknowledges that it is bound
by the terms of the Confidentiality Agreement.
r. Commission. No commission or brokerage fee of any kind whatsoever
shall be paid by the Receiver to any person acting as agent, broker,
intermediary or in any other capacity for the Purchaser.
s. Receiver's Capacity. The Receiver is acting solely in its capacity as
receiver of the assets, property and undertaking of the Company and
shall have no personal or corporate liability of any kind whatsoever,
whether in contract or in tort or otherwise, in connection herewith or
the transactions contemplated hereby.
t. Time. Time is of the essence.
Asset Engineering Corporation
Steelbank Tubular Purch Proposal.doc
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