EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
THIS AGREEMENT, dated September 30, 1995, is by and between Klockner
Namasco Corporation, a Delaware corporation ("Seller"), and Wheeling-Pittsburgh
Steel Corporation, a Delaware corporation ("Buyer").
W I T N E S S E T H:
WHEREAS, Seller is in the business of manufacturing and selling roofing
and siding products through its Namasco Building Products Division (the
"Division"); and WHEREAS, Buyer desires to purchase and Seller desires to sell
certain of the assets of the Division (a) located at Seller's (i) Norcross,
Georgia facility and associated warehouses (the "Norcross Facility"), (ii)
Memphis, Tennessee facility (the "Memphis Facility"), (iii) Clinton, North
Carolina facility (the "Clinton Facility") and (iv) Ocoee, Florida facility (the
"Ocoee Facility") and (b) on consignment with a customer of Seller located in
Holmesville, Ohio on the terms and subject to the conditions set forth in this
Agreement; NOW, THEREFORE, in consideration of the premises and the mutual
promises herein contained, Buyer and Seller hereby agree as follows:
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ARTICLE I. ASSETS TO BE PURCHASED
SECTION 1.1. DESCRIPTION OF ASSETS. Upon the terms and subject to the
conditions set forth in this Agreement, at the Closing (as hereinafter defined),
Seller shall convey, sell, transfer, assign and deliver to Buyer, and Buyer
shall purchase from Seller, all right, title and interest of Seller at the
Closing in and to those certain operating assets, properties and rights
(contractual or otherwise) of Seller which are used in connection with the
business and operations of the Division (the "Business") as set forth below: (a)
The machinery, equipment, tooling, parts, furniture, supplies and other tangible
personal property (the "Personal Property") listed on Schedule 1.1(a);
(b) All prime raw materials, component parts,
work-in-process and finished goods inventory and other primary
inventory of the Division on hand at Closing (the "Inventory") but
excluding all Inventory determined by the Buyer to not be "prime
material" (the "Non-Prime Inventory") and listed on Schedule 1.1(b);
(c) The trademarks used in conducting the Business and all
applications therefor, registrations thereof and licenses, sublicenses
or agreements in respect thereof, which Seller owns or has the right to
use or to which Seller is a party and all filings, registrations or
issuances of any of the foregoing with or by any Federal, state, local
or foreign regulatory, administrative or governmental agency listed on
Schedule 1.1(c) (collectively, the "Marks");
(d) All leases of equipment, vehicles or other tangible
personal property (the "Personal Property Leases") listed on Schedule
1.1(d);
(e) All purchase and sales orders (the "Contracts") listed
on Schedule 1.1(e);
(f) All books of account, customer lists, files, papers and
records used in conducting the Business (all of which shall be subject
to Seller's right to inspect and copy at Seller's expense during
Buyer's normal business hours); and
(g) All goodwill relating to the Division.
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Notwithstanding the foregoing, there shall be excluded from the assets,
properties, rights (contractual and otherwise) and business of Seller to be
conveyed, sold, transferred, assigned and delivered to Buyer under this
Agreement including, without limitation, the following: (i) cash and cash
equivalents and investment securities, (ii) all accounts receivables (the
"Receivables") relating to or arising out of the operation of the Division,
(iii) notes receivable from Seller and third parties to the Division, (iv) tax
refunds paid to Seller, whether or not such tax refunds relate to the Division,
(v) all corporate minute books, stock records, tax returns and supporting
schedules, books of original financial entry and internal accounting documents
and records (all which shall be subject to Buyer's right to inspect and copy at
Buyer's expense during Seller's normal business hours) and (vi) Non-Prime
Inventory. All of the assets, properties, rights (contractual and otherwise) and
business to be conveyed, sold, transferred, assigned and delivered to Buyer
pursuant to this Section 1.1 are hereinafter collectively referred to as the
"Property."
SECTION 1.2. NON-ASSIGNMENT OF CERTAIN PROPERTY. To the extent that the
assignment hereunder of any of the Personal Property Leases or Contracts shall
require the consent of any other party (or in the event that any of the same
shall be non- assignable), neither this Agreement nor any action taken pursuant
to its provisions shall constitute an assignment or an agreement to assign if
such assignment or attempted assignment would constitute a breach thereof or
result in the loss or diminution thereof; provided, however, that in each such
case, Seller shall use its
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best efforts to obtain the consents of such other party to an assignment to
Buyer. If such consent is not obtained, Seller shall cooperate with Buyer in any
reasonable arrangement designed to provide for Buyer the benefits of any such
Personal Property Lease or Contract not assigned including, without limitation,
enforcement, for the account and benefit of Buyer, of any and all rights of
Seller against any other person with respect to any such Personal Property Lease
or Contract; provided, however, that all expenses related thereto shall be borne
by Buyer.
SECTION 1.3. ACCOUNTS RECEIVABLE. At the Closing, Seller will deliver
to Buyer a statement showing the name and amount of all Receivables existing as
of the Closing other than any Receivables referred to a collection agency by
Seller prior to the Closing Date (as hereinafter defined). Buyer will use
reasonable commercial efforts to assist Seller in collecting all Receivables
during the 90-day period following the Closing (the "Collection Period"), but in
no event will Buyer be obligated to institute suit, retain a collection agency
or institute any other extraordinary means of collection to collect any such
Receivable. In the absence of any dispute by a Receivable debtor concerning a
Receivable, all monies received from such debtor by the Buyer during the
Collection Period will be applied to the Receivable until the account is fully
paid before any monies are applied to Buyer's account with such debtor arising
from Buyer's operation of the Division. In the event that a Receivable debtor
notifies Buyer of a dispute by such debtor concerning a Receivable, all monies
received from such debtor by the Buyer will be applied to the undisputed
portion, if any, of such debtor's account with Seller
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until such undisputed portion is fully paid before any monies are applied to
Buyer's account with such debtor. Buyer shall pay over to Seller promptly after
each week after the Closing an amount equal to any Receivable paid to Buyer
during the preceding week. Buyer acknowledges that Seller shall be free to take
all action, including the institution of legal proceedings, to collect any and
all monies owing to Seller with respect to any Receivable, provided all such
collection efforts shall be consistent with Seller's past practices. Seller
acknowledges that Buyer has a substantial interest in the continued goodwill of
the Division and the current relationships between the Division and its account
debtors, and agrees that Seller will use commercially reasonable efforts not to
interfere unduly with Buyer's relationships with the Division's account debtors.
ARTICLE II. ASSUMPTION OF OBLIGATIONS
SECTION 2.1. ASSUMPTION OF CERTAIN LIABILITIES. Buyer shall assume and
perform all liabilities and obligations arising under the Personal Property
Leases and the Contracts (except to the extent noted on Schedule 1.1(e)), to the
extent such liabilities and obligations are first required to be performed after
the Closing. The liabilities of Seller being assumed by Buyer are hereinafter
referred to as the "Assumed Liabilities."
SECTION 2.2. LIABILITIES NOT ASSUMED. With the exception of the Assumed
Liabilities, Buyer shall not by execution and performance of this Agreement, or
otherwise, assume or otherwise be responsible for any liability or obligation of
any nature of Seller, whether relating to the Division or any of Seller's other
assets, operations, businesses or activities, or
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claims of such liability or obligation, matured or unmatured, liquidated or
unliquidated, fixed or contingent, or known or unknown, whether arising out of
occurrences prior to, at or after the date hereof including, without limitation,
any liability (i) as of the Closing for wages, salaries, severance, pension or
welfare benefits including, without limitation, accrued sick days and vacation
days, for employees or former employees of the Division (except to the extent
that Buyer receives the benefit of a pro rata adjustment pursuant to Section 3.5
hereof for any of such costs at Closing), (ii) as of the Closing for employee
medical benefits based upon claims arising prior to the Closing, whether or not
notice of such claim is received prior to or after Closing, (iii) for
retroactive premium adjustments for workers' compensation, (iv) for commissions
and other fees earned prior to the Closing by agents, salesmen and other
employees or former employees of the Division, (v) under any workers'
compensation claims based upon claims arising prior to the Closing, whether or
not notice of such claim is received prior to or after the Closing and (vi)
claims of any nature or kind relating to or arising out of products shipped
prior to the Closing.
ARTICLE III. PURCHASE PRICE
SECTION 3.1. CONSIDERATION. (a) Upon the terms and subject to the
conditions set forth in this Agreement, in consideration for the Property and
Seller's covenant not to compete set forth in Section 5.1 hereof and in full
payment therefor, at the Closing Buyer shall (i) assume the Assumed Liabilities
as provided in Section 2.1 hereof, (ii) deliver to Seller a certificate or
certificates representing shares
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of restricted common stock, par value $.01 per share (the "Common Stock"), of
WHX Corporation ("WHX") in accordance with Section 3.1(b) hereof and (iii) pay
to Seller the consideration in the form and quantities described in, and in
accordance with, Section 3.1(c) hereof (collectively, the "Purchase Price").
(b) (i) The number of shares of Common Stock of WHX (the "WHX Common
Stock") to be delivered by Buyer pursuant to Section 3.1(a) hereof shall be
initially determined to be equal to the number (rounded to the highest whole
number) derived by dividing (x) Two Million Dollars ($2,000,000) by (y) the
"Average Market Price" (as hereinafter defined). Average Market Price shall mean
$11.875, representing the average of the daily closing price of WHX Common Stock
for the ten consecutive trading days preceding the Closing Date. Notwithstanding
the foregoing, to the extent that the Average Market Price is different from the
average of the daily closing price of WHX Common Stock for the ten consecutive
trading days preceding the date upon which a registration statement (the
"Registration Statement") with respect to the WHX Common Stock to be delivered
hereunder is filed (the "Subsequent Average Market Price"), then an adjustment
shall be made to the number of shares of WHX Common Stock to be delivered by
Buyer to Seller in accordance with this Section 3.1(b). The amount of such
adjustment shall be equal to the product (which may be positive or negative) of
(A) the difference between the Average Market Price and the Subsequent Average
Market Price multiplied by (B) the number of shares of WHX Common Stock to be
delivered by Buyer to Seller at Closing (the "Adjustment Amount").
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(ii) (A) If the Average Market Price exceeds the Subsequent Average
Market Price, Buyer shall, as soon as practicable thereafter, deliver to Seller
an additional certificate representing the sum of (X) the Adjustment Amount and
(Y) the Interest Factor (as hereinafter defined).
(B) If the Average Market Price is less than the Subsequent Average
Market Price such that the Adjustment Amount reflects a decrease in the number
of shares of WHX Common Stock to be delivered by Buyer to Seller in accordance
with Section 3.1(a) hereof, but such Adjustment Amount is less than the Interest
Factor, Buyer shall, as soon as practicable thereafter, deliver to Seller an
additional certificate representing the net amount of the Interest Factor.
(C) If the Average Market Price is less than the Subsequent Average
Market Price such that the Adjustment Amount reflects a decrease in the number
of shares of WHX Common Stock to be delivered by Buyer to Seller in accordance
with Section 3.1(a) hereof, and such Adjustment Amount exceeds the Interest
Factor, Seller shall promptly return to Buyer the stock certificate previously
delivered thereby and, as soon as practicable thereafter, Buyer shall deliver to
Seller a certificate representing (i) the number of shares of WHX Common Stock
previously delivered thereto plus (ii) the Interest Factor less (iii) the
foregoing Adjustment Amount. (D) The Interest Factor represents shares of WHX
Common Stock and shall equal:
($2,000,000) x (.09) x Z
----
365
------------------------------
Subsequent Average Market Price
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with "Z" representing the number of days elapsed between the Closing Date and
the date upon which the Registration Statement is filed (the "Filing Date").
(iii) (A) From the Filing Date until the date upon which the
Registration Statement is declared effective (the "Effective Date") by the
Securities and Exchange Commission (the "Commission"), interest shall accrue on
the $2,000,000 represented by the WHX Common Stock to be delivered by Buyer to
Seller hereunder at the rate of 9% per annum. Buyer shall pay Seller such
interest in cash within five business days of the Effective Date.
(B) Within one business day following the Effective Date, Buyer
shall cause the delivery to Seller of an opinion of counsel, from counsel
reasonably satisfactory to Seller, with respect to (i) the effectiveness of the
Registration Statement and (ii) the due authorization and valid issuance of the
shares of WHX Common Stock delivered by Buyer to Seller hereunder.
(iv) In the event Seller, following the Effective Date, is prohibited
from trading the WHX Common Stock to be delivered thereto hereunder by the terms
of the Registration Rights Agreement (as hereinafter defined), interest shall
accrue on the value of the WHX Common Stock then owned by Seller at such time at
the rate of 9% per annum until such time as Seller is free to trade the WHX
Common Stock in accordance with the Registration Rights Agreement. Buyer shall
pay Seller such interest in cash within five business days of the date upon
which such trading prohibition terminates.
(v) Anything set forth in this Agreement to the contrary
notwithstanding, if the Registration Statement is not declared effective by the
Commission on or prior to December 31, 1995,
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(A) Buyer shall pay to Seller, within five business days thereafter, $2,000,000
plus interest in cash at the rate of 9% per annum from the Closing Date through
and including December 31, 1995, (B) Buyer shall have no obligation whatsoever
to deliver shares of WHX Common Stock to Seller and (C) Seller shall promptly
return to Buyer any certificates representing shares of WHX Common Stock
previously delivered to Seller by Buyer.
(c) (i) In consideration of the Inventory in the form of raw materials
(the "Raw Materials Inventory") to be purchased by Buyer in accordance with this
Agreement and at Gross Book Value (as hereinafter defined), Buyer shall, subject
to Section 3.1(c)(ii) hereof, transfer to Seller an equivalent dollar value of
(A) hot dipped galvanized coils, (B) hot rolled coils, (C) cold rolled coils or
(D) a combination thereof (collectively, the "Buyer Raw Materials"), in the
quantities and of the quality set forth on, and priced in accordance with,
Schedule 3.1. Buyer Raw Materials shall be adjusted to reflect the value of that
certain product set forth on Schedule 3.1 which has previously been sold to
Seller by Buyer but, as of the date of Closing, has not been paid for by Seller.
Upon the effectiveness of the Closing, Seller shall be deemed to have timely and
fully paid for all such product. Interest shall accrue on any unpaid balance of
Buyer Raw Materials due Seller not received by 12:00 noon on the last business
day of each month during which such balance is due at a rate of .75% per month
following the Closing and such interest shall be payable by Buyer in the form of
Buyer Raw Materials.
(ii) In consideration of the finished Inventory (the "Finished
Inventory") to be purchased by Buyer in accordance with
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this Agreement, Buyer shall pay to Seller, in cash by wire transfer of
immediately available funds to a bank account designated by Seller, an amount
equal to the Gross Book Value of the Finished Inventory up to a maximum of One
Million Three Hundred Thousand Dollars ($1,300,000); provided, however, that if
the Gross Book Value of the Finished Inventory exceeds $1,300,000, Buyer shall
pay to Seller such excess in the form of Buyer Raw Materials, the type, quality
and quantities of which shall be mutually agreed upon by Buyer and Seller.
Anything to the contrary set forth in this Agreement notwithstanding, if the
Gross Book Value of the Finished Inventory is less than $1,300,000, the
difference (up to $1,300,000) shall be paid by Buyer to Seller, in cash by wire
transfer of immediately available funds to a bank account designated by Seller,
in consideration of the Raw Materials Inventory to be purchased by Buyer
pursuant to Section 3.1(c)(i) hereof. For purposes of this Section 3.1(c),
"Gross Book Value" shall mean the sum of (A) the actual material cost paid by
Seller, (B) actual cost of inbound freight and (C) storage, processing, handling
and manufacturing charges, each of which shall be consistent with Seller's past
practices.
SECTION 3.2. ADJUSTMENT OF INVENTORY.
(a) Immediately after the Closing Date, Seller and Buyer shall jointly
audit the Gross Book Value of Inventory other than Non-Prime Inventory (the
"Inventory Valuation"). The accounting procedures used to prepare the Inventory
Valuation shall include the taking of a physical inventory on the day preceding
the Closing Date or such other date as shall be mutually agreed upon by Buyer
and Seller. Buyer and its independent public accountants shall be
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entitled to participate in the taking of such physical inventory. During the
ten-day period following the Closing Date, Buyer and its accountants shall be
permitted to discuss with Seller and its accountants the proposed Inventory
Valuation and Buyer and its accountants shall from and after the Closing Date
have full access upon reasonable notice and at all reasonable times during
normal business hours to the work papers and supporting records of Seller and
its accountants related to the Inventory Valuation.
(b) If within fifteen (15) days after the Closing Date, Buyer notifies
Seller in writing that modifications are required to be made in order for the
Inventory Valuation to present fairly the Gross Book Value of the Inventory in
accordance with this Agreement (the "Modification Notice"), the Inventory
Valuation shall be so modified effective as of the fifteenth (15) day after
Seller's receipt of the Modification Notice; provided, however, if within
fourteen (14) days after receipt of the Modification Notice from Buyer, Seller
notifies Buyer of Seller's disagreement with respect to any of the
modifications, the modifications subject to such disagreement shall be
determined by a "big six" accounting firm mutually acceptable to Buyer and
Seller (the "Independent Public Accountant") in accordance with the terms of
this Agreement, on the basis of such procedures as the Independent Public
Accountant, in its sole judgment, deems applicable and appropriate, taking into
account the nature of the issues, the amount(s) in dispute and the respective
positions asserted by the parties. If Buyer does not notify Seller that
modifications to the Inventory Valuation are required within such fifteen (15)
day period, Buyer shall be deemed to have accepted the Inventory Valuation;
provided, however, that
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such deemed acceptance of Buyer shall not modify or alter the representations
and warranties of Seller contained in this Agreement. The Independent Public
Accountant shall review the disputed matters and as promptly as practicable
deliver to Buyer and Seller a statement in writing setting forth its
determination as to the proper treatment of the modifications as to which there
was disagreement, and such determination shall be final and binding upon the
parties hereto without any further right of appeal. All charges of the
Independent Public Accountant incurred in making such determination shall be
borne equally by Buyer and Seller.
(c) If the Gross Book Value of the Inventory reflected on the Inventory
Valuation, as may be adjusted pursuant to Section 3.2(b), exceeds the estimated
value paid at Closing, the Purchase Price shall be increased by an amount equal
to the amount of such excess (such amount a "Purchase Price Increase"). If the
Gross book Value of Inventory reflected on the Inventory Valuation, as may be
adjusted pursuant to Section 3.2(b), is less than the estimated value paid at
Closing, the Purchase Price shall be decreased by an amount equal to the amount
of such shortfall (such amount a "Purchase Price Decrease").
(d) If there is a Purchase Price Increase, Buyer shall pay to Seller,
on such date as shall be mutually agreed upon by Buyer and Seller following the
date of the final determination thereof, the amount of the Purchase Price
Increase. If there is a Purchase Price Decrease, Seller shall pay to Buyer, on
such date as shall be mutually agreed upon by Buyer and Seller following the
date of the final determination thereof, the amount of the Purchase Price
Decrease. Any payment made by Buyer to Seller pursuant to
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this Section 3.2(d) shall be payable in accordance with Section 3.1(c) hereof.
SECTION 3.3. PURCHASE PRICE ALLOCATION. Seller and Buyer hereby agree
that the Purchase Price for the Property shall be allocated for purposes of this
Agreement and for Federal, state and local tax purposes as set forth on an
allocation certificate in the form attached hereto as Exhibit A (the "Allocation
Certificate") to be executed by Buyer and Seller at the Closing. Buyer and
Seller shall file all Federal, state, local and foreign tax returns, including
Internal Revenue Form 8594, in accordance with the allocation set forth on such
Allocation Certificate. Any aggregate Purchase Price Increase or Purchase Price
Decrease shall adjust the dollar value allocated to the asset categories to
which it is attributable.
SECTION 3.4. ADJUSTMENTS. The Closing shall be deemed to occur as of
11:59 p.m. on the Closing Date and for all purposes, any adjustments under this
Agreement including, without limitation, pursuant to Section 3.2 hereof, shall
be deemed to be made as of such time. Section 3.5. Prorations. Seller and Buyer
shall pro-rate between them, as of the Closing, all personal property taxes,
sewer, water, gas, electrical and similar utility charges applicable to the
Business (collectively, the "Pro Rated Items"). The Pro Rated Items shall be
calculated as soon as practical after the Closing by Seller and Buyer but in no
event later than thirty (30) days after Closing and the appropriate party shall
be paid within five (5) business days of the determination thereof.
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ARTICLE IV. REPRESENTATIONS AND WARRANTIES
SECTION 4.1. Buyer represents and warrants to Seller that:
(a) CORPORATE EXISTENCE. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware.
(b) AUTHORIZATION; VALIDITY. Buyer has all requisite
corporate power and authority to enter into this Agreement, perform its
obligations hereunder and to consummate the transactions contemplated
hereby. All necessary corporate action has been taken by Buyer with
respect to the execution, delivery and performance by Buyer of this
Agreement and the consummation of the transaction contemplated hereby.
Assuming the due execution and delivery of this Agreement by Seller,
this Agreement is a legal, valid and binding obligation of Buyer,
enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization and moratorium laws and other
laws of general application affecting the enforcement of creditors'
rights generally, and the discretion of the court before which any
proceeding therefore may be brought.
(c) LITIGATION. There is no claim, litigation, action, suit,
proceeding, investigation or inquiry, administrative or judicial,
pending or, to the best knowledge of Buyer, threatened against Buyer,
at law or in equity, before any Federal, state or local court or
regulatory agency, or other governmental authority, which might have an
adverse effect on Buyer's ability to perform any of its obligations
under this Agreement or upon the consummation of the transactions
contemplated by this Agreement.
(d) NO BREACH OF STATUTE OR CONTRACT. Neither the execution
and delivery of this Agreement nor the consummation by Buyer of the
transactions contemplated hereby nor compliance by Buyer with any of
the provisions hereof will violate or cause a default under any statute
(domestic or foreign), judgment, order, writ, decree, rule or
regulation of any court or governmental authority applicable to Buyer
or any of its material properties; breach or conflict with any of the
terms, provisions or conditions of the Certificate of Incorporation, as
amended, or By-laws, as amended, of Buyer; or violate, conflict with or
breach any agreement, contract, mortgage, instrument, indenture or
license to which Buyer is party or by which Buyer is or may be bound,
or constitute a default (in and of itself or with the giving of notice,
passage of time or both) thereunder, or result in the creation or
imposition of any encumbrance upon, or give to any other party or
parties, any claim, interest or right, including rights of termination
or cancellation in, or with respect to any of Buyer's properties.
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(e) BROKERS. All negotiations relative to this Agreement and
the transactions contemplated hereby have been carried on by or on
behalf of Buyer in such a manner as not to give rise to any claim
against Buyer, Seller or the Property for a finder's fee, brokerage
commission, advisory fee or other similar payment.
(f) WHX COMMON STOCK. The authorized capital stock of WHX
consists of 60,000,000 shares of common stock, par value $.01 per
share, and 10,000,000 shares of Preferred Stock, par value $.10 per
share. As of September 27, 1995, 27,821,756 shares of WHX Common Stock
were issued and outstanding. All shares of WHX Common Stock to be
issued and delivered to Seller in connection with the transactions
contemplated hereby will be duly and validly issued, fully paid and
nonassessable. There is no personal liability, and there are no
preemptive or similar rights, attached to the WHX Common Stock.
(g) Buyer Raw Materials. The value of the Buyer Raw Materials
reflected in Buyer's financial statements has been determined in
accordance with generally accepted accounting principles applied on a
basis consistent with past practice and such Buyer Raw Materials have
been valued for purposes of such financial statements in accordance
with Buyer's normal inventory policy of stating inventory at the lower
of cost or market. The Buyer Raw Materials to be delivered to Seller
pursuant to Section 3.1(c) hereof do not include any non-prime scrap or
regrind materials. The Buyer Raw Materials are free and clear of all
pledges, liens, security interests, encumbrances, charges, equities and
other restrictions whatsoever.
Section 4.2. Seller represents and warrants to Buyer that:
(a) CORPORATE EXISTENCE. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware and has the corporate power to own, operate or lease
the Property and to carry on the Business as now being conducted. As a
result of the Business conducted by the Division or the character or
location of the Property, Seller is duly qualified to do business and
is in good standing in those jurisdictions listed on Schedule 4.2(a),
which are the jurisdictions where the Property is located.
(b) AUTHORIZATION: VALIDITY. Seller has all requisite
corporate power and authority to enter into this Agreement, perform its
obligations hereunder and to consummate the transactions contemplated
hereby without the approval of any third party except as set forth on
Schedule 4.2(b). All necessary corporate action has been taken by
Seller with respect to the execution, delivery and performance by
Seller of this Agreement and the consummation of the transactions
contemplated hereby. Assuming the due execution and delivery
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of this Agreement by Buyer, this Agreement is a legal, valid and
binding obligation of Seller, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization and
moratorium laws and other laws of general application affecting the
enforcement of creditors' rights generally, and the discretion of the
court before which any proceeding therefor may be brought.
(c) NO BREACH OF STATUTE OR CONTRACT. Except as set forth on
Schedule 4.2(c), neither the execution and delivery of this Agreement
nor the consummation by Seller of the transactions contemplated hereby
nor compliance by Seller with any of the provisions hereof will violate
or cause a default under any statute (domestic or foreign), judgment,
order, writ, decree, rule or regulation of any court or governmental
authority applicable to Seller which would have a materially adverse
effect on the Property; breach or conflict with any of the terms,
provisions or conditions of the Certificate of Incorporation, as
amended, or By-Laws, as amended, of Seller; or violate, conflict with
or breach any material agreement, contract, mortgage, instrument,
indenture or license to which Seller is a party or by which Seller is
or may be bound with respect to the Property or the Business, or
constitute a material default (in and of itself or with the giving of
notice, passage of time or both) thereunder, or result in the creation
or imposition of any encumbrance upon, or give to any other party or
parties any claim, interest or right, including rights of termination
or cancellation in, or with respect to the Property.
(d) SUBSIDIARIES. Seller has no subsidiaries which conduct or
carry on the Business, or equity investments in any other corporation,
association, partnership, joint venture or other entity which conducts
or carries on the Business.
(e) FINANCIAL STATEMENTS. The following financial statements
of Seller, which have been furnished previously to Buyer by Seller and
initialed for identification by officers of Seller and Buyer are true
and correct in all material respects and, with respect to the Business
and the Division, complete, have been derived from and are in
accordance with the books and records of Seller and fairly present the
financial condition of the Division as at the dates stated and the
results of operations of the Division for the periods then ended: the
financial statements and notes thereto included in the Building
Products Information Package, dated May 31, 1995 (the "Financial
Statements").
(f) LIABILITIES. Except as set forth on Schedule 4.2(f),
Seller has no liability or obligation of any nature (whether
liquidated, unliquidated, accrued, absolute, contingent or otherwise
and whether due or to become due) in respect of the Property except:
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(i) those set forth or reflected in the Financial
Statements which have not been paid or discharged since the
date thereof;
(ii) those arising under agreements or other commitments
expressly identified in any Schedule hereto including, but
not limited to, the Personal Property Leases and the
Contracts; and
(iii) current liabilities arising in the ordinary and
usual course of the Business subsequent to May 31, 1995 which
are accurately reflected on its books and records in a manner
consistent with past practice.
(g) MARKS. Schedule 1.1(c) sets forth all trademarks used in
conducting the Business and all applications therefor, registrations
thereof and licenses, sublicenses or agreements in respect thereof
which Seller owns or has the right to use or to which Seller is a party
and all filings, registrations or issuances of any of the foregoing
with or by any Federal, state, local or foreign regulatory,
administrative or governmental agency or agencies. Except as set forth
on Schedule 4.2(g), Seller is the sole and exclusive owner of all
right, title and interest in and to the Marks free and clear of all
liens, claims, charges, equities, rights of use, encumbrances and
restrictions whatsoever. To the best knowledge of Seller and except as
disclosed herein, the Business as conducted prior to the Closing, and
the sale by Seller and ownership by Buyer of any of the Property was
not, is not and will not be in contravention of any of the Marks or
other proprietary right of any third party.
Except as set forth in Schedule 4.2(g), none of the Marks has been
hypothecated, sold, assigned or licensed by Seller or, to the best
knowledge of Seller, any other person, corporation, firm or other legal
entity; or infringe upon or violate the rights of any person, firm,
corporation, or other legal entity, Except as set forth in Schedule
4.2(g), Seller has not given any indemnification against trademark
infringement as to any equipment, materials, products, services or
supplies which the Division uses, licenses or sells; there is not
pending or, to the best knowledge of Seller, threatened any claim to
sell, engage in or employ any such product, process, method or
operation.
(h) COMPLIANCE WITH LAWS. Except as set forth on Schedule
4.2(h), Seller is in compliance in all material respects with all
laws, ordinances, regulations and orders applicable to the Property
and has no notice of any material violations, whether actual, claimed
or alleged, thereof.
(i) BROKERS. All negotiations relative to this Agreement and
the transactions contemplated hereby have been carried on by or on
behalf of Seller in such a manner as not to give rise to any claim
against Seller or the Property for
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a finder's fee, brokerage commission, advisory fee or other similar
payment.
(j) EMPLOYEES. With respect to the employees of Seller set
forth on Schedule 4.2(j) (the "Scheduled Employees"), there are no
outstanding liabilities or obligations related to their employment by
Seller. With respect to (i) the Scheduled Employees, in the event they
are terminated by Seller and subsequently hired by Buyer following the
Closing, or (ii) any other present or former employee of Seller, Buyer
shall not be subject to any claims of liability whatsoever.
(k) RESTRICTIVE DOCUMENTS OR LAWS. Seller is not a party to
or bound under any, and there is no pending, proposed or, to the best
knowledge of Seller, threatened certificate, mortgage, lien, lease,
agreement, contract, instrument, order, judgment or decree, or any
similar restriction which materially adversely affects, or reasonably
could be expected materially adversely to affect the Property.
(l) TITLE TO PROPERTIES. Except as set forth on Schedule
4.2(l), and except with respect to personal property leased pursuant to
the Personal Property Leases, Seller has marketable title to the
Property. Except as set forth on Schedule 4.2(l), all such properties
are held free and clear of all mortgages, pledges, liens, security
interests, encumbrances and restrictions of any nature whatsoever.
Except as set forth on Schedule 4.2(l) which liens shall be
discharged by Seller prior to the Closing, no financing statement under
the Uniform Commercial Code or similar law naming the Seller as debtor
has been filed in any jurisdiction in respect of the Property, and
Seller is not a party to or bound under any agreement or legal
obligation authorizing any party to file any such financing statement.
All machinery and equipment is being purchased by Buyer in "as
is" and "where is" condition and Seller makes no warranties, express or
implied, of merchantability or fitness for particular purpose.
(m) CONTRACTS AND COMMITMENTS. Schedules 1.1(d) and 1.1(e)
list all personal property leases, and purchase and sales orders used
in conducting or related to the Business, other than purchase and sale
orders incurred in the ordinary course of business of the Division
which are currently in effect and do not exceed $10,000. All of the
Personal Property Leases and the Contracts are valid and binding, in
full force and effect and enforceable in accordance with their
respective provisions, except as enforceability may be limited by
applicable law and general rules of equity. Seller has not assigned,
mortgaged, pledged, encumbered, or otherwise hypothecated any of its
right, title or interest under the Personal Property Lease or the
Contracts. Neither Seller nor, to the best knowledge of Seller, any
other party thereto is in
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material violation of, in default in respect of nor has there occurred
an event or condition which, with the passage of time or giving of
notice (or both), would constitute a material violation or a default of
any Personal Property Lease or Contract. No notice has been received by
Seller claiming any such default by Seller or indicating the desire or
intention of any other party thereto to amend, modify, rescind or
terminate the same.
(n) Inventories. Except as set forth on Schedule 4.2(n), the
Inventory (i) reflected in the Financial Statements has been determined
on a basis consistent with past practice, has been valued for purposes
of the Financial Statements in accordance with the Seller's normal
inventory valuation policy of stating inventory at the lower of cost
(on a first-in, first-out weighted average basis) or market and (ii)
does not include any non-prime scrap or regrind materials. The level of
the Inventory is reasonable by the present circumstances of the
Business. Since the date of the Financial Statements, there have been
no changes in the Inventory except changes in the ordinary course of
business of the Division. Except as set forth on Schedule 4.2(n) which
liens will be discharged at or prior to the Closing, the Inventory is
free and clear of all pledges, liens, security interests, encumbrances,
charges, equities and other restrictions whatsoever.
(o) Books of Account: Records. The general ledgers, books of
account and other records of Seller in respect of the Business are in
all material respects complete and correct, have been maintained in
accordance with good business practices and the matters contained
therein are appropriately and accurately reflected in the Financial
Statements.
(p) Credit Terms; Product Warranties. Schedule 4.2(p) sets
forth all the terms and conditions of credit given to any customer of
the Division in the ordinary course and all discounts given by Seller
to its customers. Schedule 4.2(p) sets forth a copy of Seller's
standard warranties and guarantees and any material departures
therefrom.
(q) Clinton Facility. Seller has removed a certain barrel of
dye located at the Clinton Facility and caused the remediation of
surrounding soils and groundwater to the extent such soils or
groundwater have become contaminated due to such barrel of dye and
required remediation pursuant to law or pursuant to regulatory order.
(r) Investment Representation. Seller will acquire the shares
of WHX Common Stock to be delivered to it pursuant to this Agreement
for investment and not with a view to the resale or distribution
thereof. Seller is an "accredited investor" as such term is defined in
Rule 501 promulgated under the Securities Act of 1933, as amended (the
"Securities Act"), or has such knowledge and experience in financial
and
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business matters that it is capable of evaluating the merits and risks
of the prospective investment and Seller acknowledges that when issued
such shares will be restricted securities which may not be sold without
registration or exemption from registration under the Securities Act
and applicable state securities laws and that, except as provided in
the Registration Rights Agreement, Buyer has no present intention of
registering the shares of WHX Common Stock, and that the certificate
evidencing said shares will bear a legend reading substantially as
follows:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"). THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY
NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES
UNDER THE ACT OR AN OPINION OF COUNSEL TO THE CORPORATION
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT."
(s) COMPLETE DISCLOSURE. No representation or warranty made
by Seller in this Agreement and no exhibit, schedule or certificate
furnished to Buyer by or on behalf of Seller pursuant to this Agreement
or in connection with the transactions contemplated hereby, contains or
will contain at Closing, any untrue statement of a material fact or
omits or will omit to state at Closing a material fact necessary to
make the statements contained herein and therein not misleading.
ARTICLE V. COVENANTS
SECTION 5.1. COVENANT NOT TO COMPETE. Seller agrees that it will not,
for a period of five years following the date of this Agreement, engage,
directly or indirectly, whether on its own account or as a shareholder, partner,
joint venturer or agent of any person, firm, corporation or other entity or
otherwise, directly or indirectly, in any or all of the following activities:
(a) enter into or engage in any business which competes with the
Business in the manufacturing and sale of roofing and siding products
(the "Products") to the construction market in the United States; or
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(b) solicit customers or business patronage which results in
competition with the Business for the purchase of Products within the
United States.
Notwithstanding the foregoing, Seller shall be free from this and all
other restrictions to sell, transfer and otherwise dispose of, at its
discretion, (i) the finished Non-Prime Inventory not purchased by Buyer, (ii)
non-prime coils to manufacturers of roofing and siding products and (iii) any
inventory and products not transferred to Buyer following Buyer's physical
inventory related to Seller's customer in Holmesville, Ohio.
SECTION 5.2. COVENANT AGAINST DISCLOSURE. Except as required by law or
court order, Seller agrees not to (a) disclose to any person, association, firm,
corporation or other entity (other than Buyer or those designated in writing by
Buyer) in any manner, directly or indirectly, any confidential information or
data constituting assets of the Business, whether of a technical or commercial
nature, or (b) use, or permit or assist, by acquiescence or otherwise, any
person, association, firm, corporation, limited liability company or other
entity (other than Buyer or those designated in writing by Buyer) to use, in any
manner, directly or indirectly, any such information or data, excepting only use
of such data or information as is at the time generally known to the public and
which did not become generally known through any breach of any provision of
Sections 5.1 and 5.2 hereof by Seller. The parties further agree to be bound by
the terms of that certain Confidentiality Agreement, dated July 12, 1995, by and
between Buyer and Seller; provided, however, that this Agreement shall govern in
the event of any conflict. Anything set forth in this
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Agreement to the contrary notwithstanding, this provision confers on Buyer no
rights with respect to any information applicable to the business of the Buyer
other than the Business.
SECTION 5.3. COVENANT AGAINST HIRING. Seller understands that in
Buyer's view it is essential to the successful operation of the Business
acquired from Seller that Buyer retain substantially unimpaired (to an extent
determined by Buyer in its sole discretion) the Division's operating
organization. Seller shall not take any action which would induce any employee
or representative of the Division not to become or continue as an employee or
representative of Buyer. Without limiting the generality of the foregoing,
Seller shall not without the prior written consent of Buyer, whether directly or
indirectly, through any subsidiary or affiliate, employ, whether as an employee,
officer, agent, consultant or independent contractor, or enter into any
partnership, joint venture or other business association with, any person who
was at the time of Closing an employee, representative or officer of the
Division and who accepts a position of employment with Buyer within 30 days of
Closing, for a period of eight (8) months after such person ceases or has
ceased, for any reason, to be an employee, representative or officer of Seller.
SECTION 5.4. INJUNCTIVE RELIEF. Seller acknowledges and agrees that
Buyer's remedy at law for any breach of any of Seller's obligations under
Section 5.1, 5.2 or 5.3 hereof would be inadequate, and agrees and consents that
temporary and permanent injunctive relief may be granted in a proceeding which
may be
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brought to enforce any provision of Section 5.1, 5.2 or 5.3 without the
necessity of proof of actual damage.
SECTION 5.5. ACCESS TO RECORDS. Except as provided in the next
sentence, between the date hereof and the Closing, Seller shall provide Buyer
and its agents with full access to the properties and records of Seller
pertaining to the Property during normal business hours and shall allow Buyer
and its agents, at Buyer's expense, to make copies of such documents, records
and other information pertaining to the Business as Buyer may request. If this
Agreement is terminated pursuant to Article IX hereof, any documents supplied by
Seller to Buyer or its agents shall be delivered by Buyer and such agents to
Seller.
SECTION 5.6. CONDUCT OF BUSINESS PRIOR TO CLOSING. Seller agrees that
on and or after May 31, 1995 (except for Section 5.6(vi) hereof, in which case
August 9, 1995 shall be the reference date) and prior to the Closing, Seller
shall not in respect of the Property without the consent of Buyer:
(i) incur or become subject to, or agree to incur or become
subject to, any obligation or liability (absolute or contingent) except
current liabilities incurred, and obligations under contracts entered
into, in the ordinary course of business;
(ii) discharge or satisfy any lien or encumbrance or pay any
obligation or liability (absolute or contingent) other than liabilities
payable in the ordinary course of business;
(iii) mortgage, pledge or subject to lien, charge or any
encumbrance, any of the Property or agree so to do;
(iv) sell or transfer or agree to sell or transfer any of the
Property, or cancel or agree to cancel any debt or claim, except in
each case in the ordinary course of business;
(v) terminate any Contract to which it is a party; or
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(vi) directly or indirectly, solicit or encourage (including by
way of furnishing any nonpublic information concerning the Business),
or enter into any negotiations or discussions concerning, any
Acquisition Proposal (as hereinafter defined). Seller will notify Buyer
promptly by telephone, and thereafter promptly confirm in writing, if
any such information is requested from, or any Acquisition Proposal is
received by, Seller. As used in this Agreement, "Acquisition Proposal"
shall mean any proposal received by Seller prior to the Closing for a
merger or other business combination involving the Division, or for the
acquisition of, or the acquisition of a substantial equity interest in,
or a substantial portion of the assets of the Division, other than the
one contemplated by this Agreement.
SECTION 5.7. SEVERABILITY. With respect to any provision of this
Article V finally determined by a court of competent jurisdiction to be
unenforceable, Seller and Buyer hereby agree that such court shall have
jurisdiction to reform such provision so that it is enforceable to the maximum
extent permitted by law, and the parties agree to abide by such court's
determination. In the event that any provision of this Article V cannot be
reformed, such provision shall be deemed to be severed from this Agreement, but
every other provision of Article V of this Agreement shall remain in full force
and effect.
SECTION 5.8. FURTHER ASSURANCES. On and after the Closing, Seller shall
prepare, execute and deliver, at Buyer's expense, such further and necessary
instruments of conveyance, sale, assignment or transfer, and shall take or cause
to be taken such other or further and necessary action as Buyer's counsel shall
reasonably request at any time or from time to time in order to perfect, confirm
or evidence in Buyer title to all or any part of the Property or to consummate,
in any other manner, the terms and conditions of this Agreement. On and after
the Closing, Buyer shall prepare, execute and deliver, at Seller's expense, such
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further and necessary instruments, and shall take or cause to be taken such
other or further and necessary action as Seller's counsel shall reasonably
request at any time or from time to time in order to confirm or evidence Buyer's
assumption of the Assumed Liabilities or to consummate, in any other manner, the
terms and conditions of this Agreement.
SECTION 5.9. ANNOUNCEMENTS. Neither party to this Agreement shall make
any public announcements prior to the Closing with respect to this Agreement or
the transactions contemplated hereby without the consent of the other party
hereto, except as required by law.
SECTION 5.10. CONSENTS. The parties hereto agree to use all reasonable
efforts to obtain all permits, approvals, authorizations and consents of all
third parties necessary for the consummation of the transactions contemplated
hereby.
SECTION 5.11. EMPLOYEE MATTERS.
Seller recognizes that Buyer shall not be required to employ any
employees of Seller or the Business. Buyer recognizes that the scope of
employment of many of the employees of Seller includes responsibilities other
than matters related to the Business and therefore the service of such employees
may have continuing value to the Seller. Consequently, Buyer agrees that it will
not make any offer of employment to any present employees without first
obtaining the consent of the Seller. Buyer shall not interfere with Seller's
offering continued employment to such employees. In the event that Buyer, with
the Seller's consent, shall employ an employee of the Seller, Buyer shall not be
deemed a successor employer.
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ARTICLE VI. CLOSING
SECTION 6.1. CLOSING. This transaction shall close and all deliveries
to be made at the time of closing shall take place at 10:00 a.m., New York time,
September 30, 1995, at the offices of Xxxxxx Xxxxxxxx Frome & Xxxxxxxxxx LLP,
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, or at such other place or date as
may be agreed upon from time to time in writing by Seller and Buyer (the
"Closing"). The date upon which the Closing shall occur is referred to in this
Agreement as the "Closing Date."
SECTION 6.2. DELIVERIES BY SELLER. At or prior to the Closing, Seller
shall deliver to Buyer, duly and properly executed, the following:
(a) Good and sufficient General Conveyance, Assignment and Xxxx of
Sale, in the form attached hereto as Exhibit B, conveying, selling,
transferring and assigning to Buyer title to all of the Property, free and
clear of all security interests, liens, charges, encumbrances or equities
whatsoever, except for those assumed by Buyer pursuant to this Agreement or
approved in writing by Buyer prior to the Closing (the "General
Conveyances, Assignment and Xxxx of Sale").
(b) Assignments and Assumptions of the Personal Property Leases and the
Contracts, in the form attached hereto as Exhibit C, and shall include, to
the extent obtained, the written consents of all parties necessary in order
to duly transfer all of Seller's rights thereunder to Buyer (the
"Assignment and Assumption Agreement").
(c) Assignment of the Marks, in the form attached hereto as Exhibit D,
conveying, transferring and assigning to Buyer, all of Seller's right,
title and interest to such Marks (the "U.S. Trademarks Assignment").
(d) Resolutions of the Board of Directors of Seller, authorizing the
execution and delivery of this Agreement by Seller and the performance of
its obligations hereunder, certified by the Divisional Controller of
Seller.
(e) The Certificate of Incorporation of Seller, certified as of a
recent date by the Secretary of State of Delaware.
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(f) A certificate of the Secretary of State of Delaware, dated as of a
recent date, as to the good standing of Seller in such state, along with
telephonic confirmation of such good standing on the Closing Date.
(g) A certificate of the Secretary of State of each state listed on
Schedule 4.2(a), dated as of a recent date, as to the good standing of
Seller in each such state.
(h) The legal opinion of counsel to Seller, in the form attached hereto
as Exhibit E.
(i) Toll Processing Agreements for the production of roofing and siding
products at each of the Norcross Facility and Memphis Facility, the
material terms of which are set forth in Exhibit F attached hereto, which
agreement with respect to the Norcross Facility may be terminated by Buyer
upon 60 days' prior written notice to Seller and which agreement with
respect to the Memphis Facility shall terminate on November 30, 1995
(together, the "Toll Processing Agreements"). If Buyer fails to remove any
Property from the Norcross Facility following the termination of the Toll
Processing Agreement related thereto, Buyer shall pay Seller an amount
equal to the pro rata portion of all amounts due under the lease related to
the Norcross Facility based upon (A) the square footage occupied by the
Property and (B) the length of time following termination of such Toll
Processing Agreement that such Property remains at the Norcoss Facility.
Buyer shall make such payment or payments to Seller within five business
days following the end of each month during which the Property remains at
the Norcross Facility following termination of the Toll Processing
Agreement related thereto.
(j) An Agreement as to Lease with respect to the Clinton Facility, in
the form attached hereto as Exhibit G (the "Agreement to Lease").
(k) An Investment Representation letter, in the form attached hereto as
Exhibit J.
(l) Such other separate instruments of sale, assignment or transfer
that Buyer may reasonably deem necessary or appropriate in order to
perfect, confirm or evidence title to all or any part of the Property.
SECTION 6.3. DELIVERIES BY BUYER. On or prior to the Closing, Buyer
shall deliver to Seller the Purchase Price in accordance with Sections 3.1 and
3.2 hereof, and shall deliver to Seller, all duly and property executed, the
following:
(a) The Assignment and Assumption Agreement.
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(b) Resolutions of the Executive Committee of the Board of Directors of
Buyer, authorizing the execution and delivery of this Agreement by Buyer
and the performance of its obligations hereunder, certified by the
Secretary of Buyer.
(c) Resolutions of the Executive Committee of the Board of Directors of
WHX, authorizing the issuance of the WHX Common Stock to be delivered to
Seller in accordance with Section 3.1(b) hereof and the execution and
delivery of the Registration Rights Agreement by WHX and the performance of
its obligations thereunder, certified by the Assistant Secretary of WHX.
(d) The Certificate of Incorporation of Buyer, as amended, certified as
of a recent date by the Secretary of State of Delaware.
(e) The Certificate of Incorporation of WHX, as amended, certified as
of a recent date by the Secretary of State of Delaware.
(f) A certificate of the Secretary of State of Delaware dated as of a
recent date as to the good standing of Buyer in such state, along with
telephonic confirmation of such good standing on the Closing Date.
(g) A certificate of the Secretary of State of Delaware dated as of a
recent date as to the good standing of WHX in such state, along with
telephonic confirmation of such good standing on the Closing Date.
(h) The legal opinion of counsel to Buyer, in the form attached hereto
as Exhibit H.
(i) The Toll Processing Agreements.
(j) A Registration Rights Agreement, in the form attached hereto as
Exhibit I (the "Registration Rights Agreement").
(k) Such other separate instruments of assumption that Seller may
reasonably deem necessary or appropriate in order to confirm or evidence
Buyer's assumption of the Assumed Liabilities.
Section 6.4. Environmental Transfer Statutes. Seller shall have
prepared, delivered and filed the appropriate environmental transfer documents,
if any, required under the applicable state environmental transfer statutes.
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ARTICLE VII. CONDITIONS PRECEDENT TO OBLIGATIONS
SECTION 7.1. CONDITIONS TO OBLIGATIONS OF BUYER. Each and every
obligation of Buyer to be performed at the Closing shall be subject to the
satisfaction as of or before the Closing of the following conditions (unless
waived in writing by Buyer):
(a) Representations and Warranties. Seller's representations and
warranties set forth in Section 4.2 hereof shall have been true and correct
in all material respects when made and shall be true and correct in all
material respects at and as of the Closing as if such representations and
warranties were made as of the Closing.
(b) Performance of Agreement. All covenants, conditions and other
obligations under this Agreement which are to be performed or complied with
by Seller, shall have been fully performed and complied with in all
material respects on or prior to the Closing including, without limitation,
the delivery of the fully executed instruments and documents in accordance
with Section 6.2.
(c) No Adverse Proceeding. There shall be no pending or threatened
claim, action, litigation or proceeding, judicial or administrative, or
governmental investigation against Buyer, Seller or the Property for the
purpose of enjoining or preventing the consummation of this Agreement, or
otherwise claiming that this Agreement or the consummation hereof is
illegal.
(d) Environmental Transfer Statutes. Seller shall have prepared,
delivered and filed the appropriate environmental transfer documents, if
any, required under the applicable state environmental transfer statutes.
SECTION 7.2. CONDITIONS TO OBLIGATIONS OF SELLER. Each and every
obligation of Seller to be performed at the Closing shall be subject to the
satisfaction as of or before such time of the following conditions (unless
waived in writing by Seller): (a) Representations and Warranties. Buyer's
representations and warranties set forth in Section 4.1 hereof shall have been
true and correct when made and shall be true and correct at and as of the
Closing as if such representations and warranties were made as of such time and
date.
(b) Performance of Agreement. All covenants, conditions and other
obligations under this Agreement which are to be
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performed or complied with by Buyer shall have been fully performed and
complied with in all material respects on or prior to the Closing including
the delivery of funds and the fully executed instruments and documents in
accordance with Section 6.3.
(c) No Adverse Proceeding. At the Closing there shall be no pending or
threatened claim, action, litigation or proceeding, judicial or
administrative, or governmental investigation against Buyer, Seller or the
Property for the purpose of enjoining or preventing the consummation of
this Agreement, or otherwise claiming that this Agreement or the
consummation hereof is illegal.
ARTICLE VIII. INDEMNIFICATION
SECTION 8.1. SURVIVAL OF REPRESENTATIONS,
WARRANTIES AND AGREEMENTS.
Subject to the limitations set forth in this Article VIII and
notwithstanding any investigation conducted at any time with regard thereto by
or on behalf of Buyer or Seller, all representations, warranties, covenants and
agreements of Buyer and Seller in this Agreement and in the Additional Documents
(as set forth hereinbelow) shall survive the execution, delivery and performance
of this Agreement and shall be deemed to have been made again by Buyer and
Seller at and as of the Closing. All statements contained in any Additional
Document or Schedule or Exhibit hereto shall be deemed representations and
warranties of Buyer and Seller set forth in this Agreement within the meaning of
this Article.
SECTION 8.2. INDEMNIFICATION.
(a) Subject to the limitations set forth in this Article VIII, Seller
shall indemnify and hold harmless Buyer from and against any and all
losses, liabilities, damages, demands, claims, suits, actions, judgments or
causes of action, assessments, costs and expenses including, without
limitation, interest, penalties, reasonable attorneys' fees, any and all
reasonable expenses incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever,
and any and all amounts paid in settlement of any claim or litigation
excluding, however, recoveries in respect of lost profits or consequential
damages
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(collectively, "Damages"), asserted against, resulting to, imposed upon, or
incurred or suffered by Buyer, directly or indirectly, as a result of or
arising from the following (individually an "Indemnifiable Claim" and
collectively "Indemnifiable Claims" when used in the context of buyer as
the Indemnified Party (as defined below)):
(i) Any inaccuracy in or breach of any of the
representations, warranties or agreements made by Seller in
this Agreement or the non-performance of any covenant or
obligation to be performed by Seller;
(ii) Any liability imposed upon Buyer as transferee of
the Property, or otherwise relating to the conduct of the
Business and operations of the Division prior to the Closing
including, without limitation, liability under the Workers
Adjustment and Retraining Notification Act, as amended, or
any similar federal, state or local plant closing,
employment termination or related laws, except to the extent
such liability may be expressly assumed by Buyer pursuant to
Section 2.1 hereof;
(iii) Any liability imposed upon Buyer by virtue of
Buyer's status as a party to this Agreement and the
transactions contemplated hereby and arising out of or
relating to any of Seller's other assets, operations,
businesses or activities which are not a part of the
Division;
(iv) Any misrepresentation in or any omission from any
certificate, Schedule or Exhibit (collectively, the
"Additional Documents") furnished or to be furnished by or
on behalf of Seller under this Agreement;
(v) Any liability for payment by Seller of Federal,
state or local taxes; or
(vi) Seller's failure to comply with the bulk transfer
laws of any state or its misapplication of the proceeds of
the purchase price of the Property in fraud of its
creditors.
(b) Subject to the limitations set forth in this Article VIII, Buyer
shall indemnify and hold harmless Seller from and against any and all
Damages asserted against, resulting to, imposed upon, or incurred or
suffered by Seller, directly or indirectly, as a result of or arising from
the following (individually an "Indemnifiable Claim" and collectively
"Indemnifiable Claims" when used in the context of Seller as the
Indemnified Party):
(i) Any inaccuracy in or breach of any of the
representations, warranties or agreements made by Buyer in
this Agreement or the non-performance of any covenant or
obligation to be performed by Buyer;
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(ii) Any liability imposed upon Seller as a result of
Buyer's use of the Property after the Closing; or
(iii) The nonperformance or nonpayment by Buyer of any
of the Assumed Liabilities.
(c) For purposes of this Article VII, all Damages shall be computed
net of any insurance coverage with respect thereto which, reduces the
Damages that would otherwise be sustained; provided, however, that in all
cases, the timing of the receipt or realization of insurance proceeds shall
be taken into account in determining the amount of reduction of Damages.
(d) Without duplication of Damages, Buyer or Seller, as the case may
be, shall be deemed to have suffered Damages arising out of or resulting
from the matters referred to in subsections (a) and (b) above if the same
shall be suffered by any parent, subsidiary or affiliate of Buyer or
Seller, respectively.
SECTION 8.3. LIMITATIONS ON INDEMNIFICATIONS. Rights to
indemnification hereunder are subject to the following limitations:
(a) Neither Buyer nor Seller shall be entitled to indemnification
hereunder with respect to an Indemnifiable Claim (or, if more than one
Indemnifiable Claim is asserted, with respect to all Indemnifiable Claims)
unless the aggregate amount of Damages with respect to such Indemnifiable
Claim or Claims exceeds $50,000 in which event the indemnity provided for
in Section 8.2 hereof shall be effective with respect to only so much of
such damages as exceeds $50,000.
(b) Any term or provision of this Agreement to the contrary
notwithstanding, the liability of each party to the other party under this
Agreement and the indemnification provisions set forth herein shall not
exceed One Million Dollars ($1,000,000).
(c) The obligation of indemnity provided herein with respect to the
representations and warranties set forth in Section 4.2(h) hereof shall
terminate three years after the Closing.
(d) The obligation of indemnity provided herein with respect to the
representations and warranties set forth in Section 4.2(l) hereof as they
relate to title shall not terminate.
(e) The obligation of indemnity provided herein with respect to the
representations and warranties set forth in Section 4.2(j) hereof shall
terminate upon expiration of the
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statutes of limitations applicable to the items contained therein.
(f) The obligation of indemnity provided herein resulting from the
assertion of liability by third parties with respect to the representations
and warranties set forth in Section 4.1 and Section 4.2 hereof (except
Section 4.2(h), Section 4.2(l) as they relate to title and Section 4.2(j)
hereof) shall terminate one year after the Closing.
(g) The obligation of indemnity provided herein with respect to the
representations and warranties set forth in Section 4.2(q) hereof shall
terminate six years after the Closing.
(h) If, prior to the termination of any obligation to indemnify as
provided for herein, written notice of a claimed breach is given by the
party seeking indemnification (the "Indemnified Party") including in detail
the basis therefor to the party from whom indemnification is sought (the
"Indemnifying Party") or a suit or action based upon a claimed breach is
commenced against the Indemnified Party, the Indemnified Party shall not be
precluded from pursuing such claimed breach or suit or action, or from
recovering from the Indemnifying Party (whether through the courts or
otherwise) on the claim, suit or action, by reason of the termination
otherwise provided for above.
SECTION 8.4. INDEMNITY PROCEDURES WITH RESPECT TO
THIRD PARTY CLAIMS.
The Indemnified Party will give the Indemnifying Party prompt written
notice of any third party claim, demand, assessment, suit or proceeding to which
the indemnity set forth in Section 8.2 applies, which notice to be effective
must describe said claim in reasonable detail (the "Indemnification Notice").
Notwithstanding the foregoing, the Indemnified Party shall not have any
obligation to give any notice of any assertion of liability by a third party
unless such assertion is in writing and the rights of the Indemnified Party to
be indemnified hereunder in respect of any third party claim shall not be
adversely affected by its failure to give notice pursuant to the foregoing
unless and, if so, only to the extent that, the Indemnifying Party is materially
prejudiced
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thereby. The Indemnifying Party will have the right to control the defense or
settlement of any such action subject to the provisions set forth below, but the
Indemnified Party may, at its election, participate in the defense of any action
or proceeding at its sole cost and expense. Should the Indemnifying Party fail
to defend any such action (except for failure resulting from the Indemnified
Party's failure to timely give the Indemnification Notice), then, in addition to
any other remedy, the Indemnified Party may settle or defend such action or
proceeding through counsel of its own choosing and may recover from the
Indemnifying Party the amount of such settlement, demand, or any judgment or
decree and all of its costs and expenses, including reasonable fees and
disbursements of counsel. The Indemnified Party will not compromise or settle
any claim without the prior written consent of the Indemnifying Party which
consent shall not be unreasonably withheld; provided, however, if such approval
is unreasonably withheld, the liability of the Indemnified Party will be limited
to the total sum represented in the amount of the proposed compromise or
settlement and the amount of the Indemnified Party's reasonable counsel fees
incurred in defending such claim, as permitted by the preceding sentence,
accrued at the time said approval is unreasonably withheld. Notwithstanding the
preceding sentence, the foregoing limitation on the liability of the Indemnified
Party shall only be applicable if (i) a complete release of the Indemnifying
Party is contemplated to be part of the proposed compromise or settlement of
such third party claim and (ii) the Indemnifying Party withholds its consent to
such compromise or settlement.
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SECTION 8.5. PROCEDURE FOR INDEMNIFICATION WITH
RESPECT TO NON-THIRD-PARTY CLAIMS.
In the event that the Indemnified Party asserts the existence of an
Indemnifiable Claim (but excluding claims resulting from the assertion of
liability by third parties), it shall give written notice to the Indemnifying
Party specifying the nature and amount of the claim asserted (the
"Indemnification Notice"). If the Indemnifying Party, within 30 days (or such
greater time as may be necessary for the Indemnifying Party to investigate such
Indemnifiable Claim not to exceed 60 days), after receiving the Indemnification
Notice from the Indemnified Party, shall not give written notice to the
Indemnified Party announcing their intent to contest such assertion of the
Indemnified Party (the "Contest Notice"), such assertion shall be deemed
accepted and the amount of claim shall be deemed a valid Indemnifiable Claim.
During the time period set forth in the preceding sentence, the Indemnified
Party shall cooperate fully with the Indemnifying Party in respect of such
Indemnifiable Claim. In the event, however, that the Indemnifying Party contests
the assertion of a claim by giving a Contest Notice to the Indemnified Party
within said period, then if the parties hereto, acting in good faith, cannot
reach agreement with respect to such claim within ten days after such notice,
the contested assertion of a claim shall be referred to arbitration in
accordance with Section 10.11 hereof.
ARTICLE IX. TERMINATION
Section 9.1. Termination by Either Party. This Agreement may be
terminated and cancelled at any time prior to the Closing by Buyer or Seller
upon written notice to the other if: (i)
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any of the representations or warranties of the other party, as the case may be,
contained herein or in any Schedule attached hereto shall prove to be inaccurate
or untrue in any material respect; or (ii) any obligation, term or condition to
be performed, kept or observed by such other party, as the case may be,
hereunder has not been performed, kept or observed in any material respect at or
prior to the time specified in this Agreement.
SECTION 9.2. TERMINATION BY BUYER. This Agreement may be terminated and
cancelled by Buyer without penalty, damages, payments or liabilities whatsoever
to either party: (i) with or without cause at any time prior to the close of
business on October 3, 1995, upon reimbursement to Seller of its reasonable
costs and expenses incurred in connection with its negotiations of, and
preparation to consummate the transactions contemplated by, this Agreement; or
(ii) at any time prior to the Closing in the event of a material adverse loss or
damage to the Property in excess of $100,000, it being understood by the parties
that none of the risk of any such loss or damage prior to the Closing shall be
borne by Buyer. In the event of a loss or damage to the Property prior to the
Closing and the Closing shall have occurred, Buyer shall be entitled to receive
any insurance proceeds received by Seller in respect of such loss or damages.
ARTICLE X. MISCELLANEOUS PROVISIONS
SECTION 10.1. NOTICES. All notices and other communications required or
permitted under this Agreement shall be deemed to have been duly given and made
if in writing and if served either by personal delivery to the party for whom
intended (which
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shall include delivery by Federal Express or similar service) or three (3)
business days after being deposited, postage prepaid, certified or registered
mail, return receipt requested, in the United States mail bearing the address
shown in this Agreement for, or such other address as may be designated in
writing hereafter by, such party: If to Seller: Klockner Namasco Corporation 000
Xxxxx Xxxxxx Xxxxx Xxxxx 0000 Xxxxx, Xxxxxxx 00000 Attention: Xxxxx Xxxxx
With a copy to: Xxxxxx Xxxxxxxxx Xxxxxx & Xxxxxx
000 Xxxxxxxxx Xxxxxx, X.X.
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx, Esq.
If to Buyer: Wheeling-Pittsburgh Steel Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxx Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
V.P. - Director Long Range Planning
With a copy to: Xxxxxx Xxxxxxxx Frome & Xxxxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx, Esq.
SECTION 10.2. ENTIRE AGREEMENT. This Agreement, the Additional
Documents and the documents referred to herein embody the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof,
and supersede all prior and contemporaneous agreements and understandings, oral
or written, relative to said subject matter.
SECTION 10.3. BINDING EFFECT; ASSIGNMENT. This Agreement and the
various rights and obligations arising hereunder shall inure to the benefit of
and be binding upon Seller, its
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successors and permitted assigns, and Buyer, its successors and permitted
assigns. Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be transferred or assigned (by operation of law or otherwise) by
any of the parties hereto without the prior written consent of the other party
or parties except that Buyer shall have the right to assign its rights but not
its obligations hereunder to an affiliate of Buyer, provided such assignment
does not adversely affect the satisfaction of any of the conditions set forth in
Section 7.2 or the obligations of Buyer under this Agreement. Any transfer or
assignment of any of the rights, interests or obligations hereunder in violation
of the terms hereof shall be void and of no force or effect.
SECTION 10.4. CAPTIONS. The Article and Section headings of this
Agreement are inserted for convenience only and shall not constitute a part of
this Agreement in construing or interpreting any provision hereof. Section 10.5.
Expenses of Transaction. Except as provided in Section 9.2, Seller shall pay all
costs and expenses incurred by it in connection with this Agreement and the
transactions contemplated hereby, and will make all necessary arrangements so
that the Property will not be charged with or diminished by any such cost or
expense. Buyer shall pay all costs and expenses incurred by it in connection
with this Agreement and the transactions contemplated hereby. The liability for
sales, real estate transfer and/or documentary taxes (but not income or similar
type taxes) in connection with the sale and delivery of the Property shall be
the responsibility of Seller.
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SECTION 10.6. WAIVER; CONSENT. This Agreement may not be changed,
amended, terminated, augmented, rescinded or discharged (other than by
performance), in whole or in part, except by a writing executed by the parties
hereto, and no waiver of any of the provisions or conditions of this Agreement
or any of the rights of a party hereto shall be effective or binding unless such
waiver shall be in writing and signed by the party claimed to have given or
consented thereto. Except to the extent that a party hereto may have otherwise
agreed to in writing, no waiver by that party of any condition of this Agreement
or breach by the other party of any of its obligations or representations
hereunder or thereunder shall be deemed to be a waiver of any other condition or
subsequent or prior breach of the same or any other obligation or representation
by the other party, nor shall any forbearance by the first party to seek a
remedy for any noncompliance or breach by the other party be deemed to be a
waiver by the first party of its rights and remedies with respect to such
noncompliance or breach.
SECTION 10.7. NO THIRD PARTY BENEFICIARIES. Subject to Section 10.3
hereof, nothing herein, expressed or implied, is intended or shall be construed
to confer upon or give to any person, firm, corporation, limited liability
company or legal entity, other than the parties hereto, any rights, remedies or
other benefits under or by reason of this Agreement.
SECTION 10.8. COUNTERPARTS. This Agreement may be executed
simultaneously in multiple counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.
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SECTION 10.9. GENDER. Whenever the context requires, words used in the
singular shall be construed to mean or include the plural and vice versa, and
pronouns of any gender shall be deemed to include and designate the masculine,
feminine or neuter gender.
SECTION 10.10. REMEDIES OF BUYER AND SELLER. The Property and the Buyer
Raw Materials are unique and not readily available. Accordingly, each of Buyer
and Seller acknowledges that, in addition to all other remedies to which they
are entitled, Buyer and Seller shall have the right to enforce the terms of this
Agreement by a decree of specific performance, provided the party seeking such
remedy is not in material default hereunder.
SECTION 10.11. ARBITRATION. If the parties in good faith cannot resolve
any controversy or claim arising out of or related to this Agreement or in
connection with a breach of this Agreement within 10 days after the claimant
gives written notice of such controversy or claim to the other parties, any
party may demand and commence arbitration of the controversy or claim. In the
event of a demand for arbitration, Buyer shall select one arbitrator and Seller
shall select one arbitrator, within thirty (30) days after such demand shall
have been given (the "Demand Date") and the two arbitrators, within forty-five
(45) days after the Demand Date shall select a third arbitrator. If the third
arbitrator shall not be selected within forty-five (45) days of the Demand Date,
either Buyer or Seller may apply to the American Arbitration Association (or any
successor thereto) for the appointment of an arbitrator in New York, New York or
such other city (the "Place of Arbitration") as the parties may agree upon,
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and the parties shall be bound by the appointments made by such Association. The
arbitration shall be held as promptly as practicable thereafter under the rules
of the American Arbitration Association in effect at the time such controversy,
claim or breach is submitted to arbitration. The determination made in
accordance with such rules shall be delivered in writing to the parties hereto
and shall be final, binding and conclusive upon them and, in the case of
arbitration pursuant to this Section 10.11 hereof, the amount of the claim, if
any, of Buyer determined to exist shall be a valid Indemnifiable Claim.
SECTION 10.12. GOVERNING LAW. This Agreement shall in all respects be
construed in accordance with and governed by the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
WITNESSES: BUYER:
WHEELING-PITTSBURGH STEEL
CORPORATION
-------------------------------
By:
------------------------------
Name:
Title:
SELLER:
KLOCKNER NAMASCO CORPORATION
-------------------------------
By:
-----------------------------
Name:
Title
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ASSET PURCHASE AGREEMENT
BY AND BETWEEN
WHEELING-PITTSBURGH STEEL CORPORATION
AND KLOCKNER NAMASCO CORPORATION
LIST OF SCHEDULES AND EXHIBITS
SCHEDULES
Schedule 1.1(a) Personal Property
Schedule 1.1(b) Non-Prime Inventory
Schedule 1.1(c) Marks
Schedule 1.1(d) Personal Property Leases
Schedule 1.1(e) Contracts
Schedule 3.1 Buyer Raw Materials
Schedule 4.2(a) Jurisdictions in Which the Property is
Located
Schedule 4.2(b) Necessary Consents
Schedule 4.2(c) Breach of Statute or Contract
Schedule 4.2(f) Liabilities
Schedule 4.2(g) Marks
Schedule 4.2(h) Compliance with Laws
Schedule 4.2(j) Scheduled Employees
Schedule 4.2(l) Title to Properties
Schedule 4.2(n) Inventories
Schedule 4.2(p) Credit Terms; Product Warranties
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EXHIBITS
A Allocation Certificate
B General Conveyance, Assignment and Xxxx of Sale
C Assignment and Assumption Agreement
D U.S. Trademarks Assignment
E Opinion of Counsel to Seller
F Toll Processing Agreements
G Agreement as to Lease
H Opinion of Counsel to Buyer
I Registration Rights Agreement
J Investment Representation Letter
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