ASSET PURCHASE AGREEMENT
BY AND BETWEEN
MAVERICK TUBE, L.P.
AS BUYER
AND
EX-L-TUBE OF KANSAS, INC.
AS SELLER
TABLE OF CONTENTS
PAGE
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SECTION 1. DEFINITIONS 1
SECTION 2. SALE AND TRANSFER OF ASSETS; ASSUMPTION OF ASSUMED
LIABILITIES; CLOSING 6
2.1 Purchase and Sale 6
2.2 Purchase Price/Escrow 6
2.3 No Assumption of Liabilities 7
2.4 Closing 7
2.5 Pending the Closing 7
2.6 Transactions at Closing 8
2.7 Taxes 9
2.8 Excluded Assets 10
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER 10
3.1 Organization and Good Standing 10
3.2 Authority; No Conflict 10
3.3 Leased Property 11
3.4 Good Title to Assets 11
3.5 Condition of Assets; Limitations on Warranty 11
3.6 Systems and Equipment Year 2000 Compliant 11
3.7 Legal Proceedings; Orders 11
3.8 Contracts; No Defaults 12
3.9 Disclosure 13
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER 13
4.1 Organization and Good Standing 13
4.2 Authority; No Conflict 13
SECTION 5. COVENANTS 14
5.1 Access and Investigation 14
5.2 Maintenance of Assets 14
5.3 Required Approvals 14
5.4 Notification 14
5.5 No Negotiation 15
5.6 Best Efforts 15
5.7 Removal 15
SECTION 6. EMPLOYMENT MATTERS 15
6.1 Termination and Severance Pay 15
SECTION 7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE 15
7.1 Accuracy of Representations 15
7.2 Performance by Seller 16
7.3 Consents 16
7.4 Additional Documents 16
(i)
7.5 No Prohibition 16
7.6 Material Adverse Change 16
SECTION 8. CONDITIONS PRECEDENT TO THE OBLIGATION OF SELLER TO CLOSE 16
8.1 Accuracy of Representations 16
8.2 Buyer's Performance 17
8.3 Consents 17
8.4 Additional Documents 17
8.5 No Injunction 17
SECTION 9. TERMINATION 17
9.1 Termination Events 17
9.2 Effect of Termination 18
SECTION 10. INDEMNIFICATION; REMEDIES 18
10.1 Survival; Right to Indemnification Not Affected by Knowledge;
Exceptions 18
10.2 Indemnification and Payment of Damages by Seller 19
10.3 Environmental Acknowledgment 19
10.4 Time Limitations 20
10.5 Limitation on Amount - Seller 20
10.6 Indemnification and Payment of Damages by Buyer 20
10.7 Procedure for Indemnification - Third Party Claims 20
10.8 Procedure for Indemnification - Other Claims 21
10.9 Legal Fees and Expenses 21
SECTION 11. ARBITRATION 21
11.1 Arbitration 21
SECTION 12. GENERAL PROVISIONS 22
12.1 Expenses 22
12.2 Public Announcements 22
12.3 Confidentiality 22
12.4 Notices 23
12.5 Waiver 23
12.6 Bulk Sales Laws 24
12.7 Entire Agreement and Modification 24
12.8 Assignments; Successors; No Third-Party Rights 24
12.9 Severability 24
12.10 Section Headings; Construction 24
12.11 Time of Essence 24
12.12 Governing Law 24
12.13 Counterparts. 24
12.14 Waiver of Jury Trial 25
(ii)
LIST OF SCHEDULES AND EXHIBITS
Exhibits
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Exhibit A Equipment
Exhibit B Escrow Agreement - Kansas City Leased Equipment
Exhibit C Opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇, P.L.L.P.
Exhibit D Opinion of Gallop, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇.▇.
Disclosure Schedules
--------------------
3.2(b) No Conflict
3.3 Leasehold Interests
3.4 Exception to Good Title
3.6 Exception to Year 2000 Compliance
3.7(a) Exception to Pending Proceedings
3.7(b) Exception to Orders
3.7(c) Exception to Compliance of Orders
3.8(a) Lease, Rental or Occupancy Agreements
3.8(b) Exception to Contracts In Full Force
3.8(c) Exception to Compliance
3.8(d) Exception to Renegotiations
(iii)
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is made and entered
into as of September 3, 1999, by and between MAVERICK TUBE, L.P., a
Delaware limited partnership ("Buyer"), on the one hand, and EX-L-TUBE
OF KANSAS, INC., a Kansas corporation ("Seller"), on the other hand.
RECITALS
A. Seller owns or leases certain machinery, equipment, related
tooling and spare parts used for the manufacture of steel tubular
products.
B. Seller desires to sell and assign its ownership or other
interest in such machinery, equipment and related tooling and spare
parts to Buyer and Buyer desires to purchase Seller's ownership and/or
other interest in such machinery, equipment and related tooling and
spare parts, to be removed by Buyer from the Premises within 30 days
following the Closing, for the consideration and on the terms and
conditions set forth in this Agreement.
C. Simultaneously with the execution of this Agreement, Buyer
has delivered to Seller the Deposit.
AGREEMENT
The parties, in consideration of the recitals and the mutual
covenants contained herein, intending to be legally bound, agree as
follows:
SECTION 1.
DEFINITIONS
For purposes of this Agreement, the following terms have the
meanings specified or referred to in this SECTION 1:
"AFFILIATE" OR "AFFILIATES" -- any Person controlled by,
controlling or under common control with a party to this Agreement,
including (without limitation) any subsidiary of a party to this
Agreement. For purposes of this definition, "control," when used with
respect to any specified Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise.
"ASSURANCE AMOUNT" -- the sum of Two Million Dollars
($2,000,000.00).
"BEST EFFORTS" -- the efforts that a prudent Person desirous of
achieving a result would use in similar circumstances to ensure that
such result is achieved as expeditiously as possible.
"▇▇▇▇ OF SALE" -- as defined in Section 2.6(a)(i).
"BONDS" -- as defined in Section 2.2(c).
"BREACH" -- a "Breach" of a representation, warranty, covenant,
obligation, or other provision of this Agreement or any instrument
delivered pursuant to this Agreement will be deemed to have occurred if
there is or has been any inaccuracy in or breach of, or any failure to
perform or comply with, such representation, warranty, covenant,
obligation, or other provision.
"BUYER" -- as defined in the first paragraph of this Agreement.
"BUYER INDEMNIFIED PERSONS" -- as defined in Section 10.2.
"BUYER CLOSING DOCUMENTS" -- as defined in Section 4.2.
"CITY" - the Unified Government of Wyandotte County/Kansas City,
Kansas, successor to Kansas City, Kansas.
"CLEANUP" -- as defined under "Environmental, Health and Safety
Liabilities."
"CLOSING" -- the consummation of the Contemplated Transactions.
"CLOSING DATE" -- the date and time as of which the Closing
occurs.
"CODE" -- the Internal Revenue Code of 1986, as amended.
"CONSENT" -- any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).
"CONTEMPLATED TRANSACTIONS" --the sale of the EX-L Assets by
Seller to Buyer.
"CONTRACTS" -- as defined in Section 3.8(a).
"CRANES" - all cranes located on the Premises, including but not
limited to, the 30 ton P&H Overhead Crane and four (4) 10 ton Overhead
Cranes that are subject to the Private Activity Revenue Bonds
Transaction.
"CREDIT ENTITY" - ABN AMRO Bank, N.V., a Netherlands bank.
"DAMAGES" -- as defined in Section 10.2.
"DEFEASANCE AMOUNT" -- the amount required to defease the Bonds
pursuant to Section 7.01 of the Trust Indenture under which the Bonds
were issued.
"DEPOSIT" -- the sum of One Hundred Twenty-Five Thousand Dollars
($125,000.00), payable by Buyer upon execution of this Agreement.
"EMPLOYEE OBLIGATION" - any liability or obligation of Seller to
any current or former employee, agent, partner, officer, director, or
shareholder of Seller based upon facts or exposures occurring or
existing on or prior to the Closing Date, including without limitation,
any actual or alleged tortuous or unlawful conduct of the Seller or any
of its employees or agents, or any obligation under any existing or pre-
existing employment agreements, or severance pay, or relocation
expenses, or accrued salaries, wages or commissions, accrued vacation,
sick leave, employee benefits or incentives, or any other obligations to
employees of the Seller including,
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but not limited to, payments due under, or with respect to the
termination of, any pension, profit sharing, retirement, health, life
insurance or other benefit plans, and the offering of COBRA
"Continuation Coverage" to any current or former employee of Seller, or
any eligible beneficiary of such an employee, receiving COBRA coverage
prior to the Closing Date for any reason or to any employee of Seller or
any spouse or dependent of such an employee.
"ENCUMBRANCE" -- any charge, claim, community property interest,
condition, encumbrance, covenant, equitable interest, lien, option,
pledge, security interest, right of first refusal, or restriction of any
kind, including any restriction on use, transfer, receipt of income, or
exercise of any other attribute of ownership with respect to any
personal property arising out of the use or ownership of such property
by Seller, but excluding any lien created by personal property taxes
assessed in 2000.
"ENVIRONMENT" -- soil, land surface or subsurface strata, surface
waters (including navigable waters, ocean waters, streams, ponds,
drainage basins, and wetlands), ground waters, drinking water supply,
stream sediments, ambient air (including indoor air), plant and animal
life, and any other environmental medium or natural resource.
"ENVIRONMENTAL, HEALTH AND SAFETY LIABILITIES" -- any cost,
expense, liability, obligation, or other responsibility arising from or
under Environmental, Health and Safety Requirements and consisting of or
relating to: (a) any environmental, health, or safety matters or
conditions (including on-site or off-site contamination, occupational
safety and health, and regulation of chemical substances or products);
(b) fines, penalties, judgments, awards, settlements, legal or
administrative proceedings, damages, losses, claims, demands and
response action, investigative, remedial, or inspection costs and
expenses; (c) financial responsibility for cleanup costs or corrective
action, including any investigation, cleanup, removal, containment, or
other remediation or response actions ("Cleanup") (whether or not such
Cleanup has been required or requested by any Governmental Body or any
other Person) and for any natural resource damages; (d) liability for
personal injury, property damage or natural resource damage; or (e) any
other compliance, corrective, investigative, or remedial measures under
Environmental, Health and Safety Requirements. The terms "removal,"
"remedial," and "response action," include the types of activities
covered by the United States Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq., as
amended ("CERCLA").
"ENVIRONMENTAL, HEALTH AND SAFETY REQUIREMENTS" -- all federal,
state, local and foreign statutes, regulations, ordinances and other
provisions having the force or effect of law, all judicial and
administrative orders and determinations, all contractual obligations
and all common law concerning public health and safety, worker health
and safety, and pollution or protection of the Environment, including
without limitation all those relating to the presence, use, production,
generation, handling, transportation, treatment, storage, disposal,
distribution, labeling, testing, processing, discharge, release,
threatened release, control, or cleanup of any hazardous materials,
substances or wastes, chemical substances or mixtures, pesticides,
pollutants, contaminants, toxic chemicals, petroleum products or
byproducts, asbestos, polychlorinated biphenyls, noise or radiation,
each as amended and as now or hereafter in effect.
"ENVIRONMENTAL LIABILITIES" -- as defined in Section 10.2(e)
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"EQUIPMENT" -- that machinery and equipment in the possession of
Seller, the Kansas City Leased Equipment and the other Leased Equipment,
all as described on EXHIBIT A.
"EX-L ASSETS" -- the Equipment, related tooling, spare parts, all
manuals, prints, and documentation relating to the mill and slitter
identified on EXHIBIT A, and software for the exit system on the mill
identified on EXHIBIT A.
"EXCLUDED ASSETS" -- all real and personal property of Seller
other than the EX-L Assets, including, without limitation, the accounts
receivable, inventory, Contracts, Cranes, trademarks, trademark
applications, trademark rights, trade names and all derivations thereof
(including, without limitation, all rights to the name EX-L-Tube used in
connection with the business operated by Seller or any Affiliate of
Seller with or without the EX-L Assets), fictitious business names,
service ▇▇▇▇, logos, copyrights, uncopyrighted work, and accounting and
inventory control software computer package.
"EXPENSES" -- as defined in Section 10.2.
"GOVERNMENTAL AUTHORIZATION" -- any approval, consent, license,
permit, waiver, or other authorization issued, granted, given, or
otherwise made available by or under the authority of any Governmental
Body or pursuant to any Legal Requirement.
"GOVERNMENTAL BODY" -- any: (a) nation, state, county, city,
town, village, district, or other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign, or other government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or
entity and any court or other tribunal); (d) multi-national organization
or body; or (e) body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, police, regulatory, or
taxing authority or power of any nature.
"KANSAS CITY LEASED EQUIPMENT" - the machinery and equipment
described on EXHIBIT A and designated thereon as being leased from the
City pursuant to that certain Lease Agreement dated as of October 1,
1995, between the City, as Lessor, and Seller, as Lessee (the "Kansas
City Equipment Lease").
"KANSAS CITY EQUIPMENT LEASE" -- as defined under "Kansas City
Leased Equipment."
"KNOWLEDGE" -- an individual will be deemed to have "Knowledge" of
a particular fact or other matter if: (a) such individual is actually
aware of such fact or other matter; or (b) a prudent individual could be
expected to discover or otherwise become aware of such fact or other
matter in the course of conducting a reasonably comprehensive
investigation concerning the existence of such fact or other matter.
"LEASED EQUIPMENT" -- that machinery and equipment described on
EXHIBIT A and designated thereon as being subject to a lease, including
the Kansas City Leased Equipment.
"LEGAL REQUIREMENT" -- any federal, state, local, municipal,
foreign, international, multinational, or other administrative order,
constitution, law, ordinance, principle of common law, regulation,
statute, or treaty.
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"ORDER" -- any award, decision, injunction, judgment, order,
ruling, subpoena, or verdict entered, issued, made, or rendered by any
court, administrative agency, or other Governmental Body or by any
arbitrator.
"ORDINARY COURSE OF BUSINESS" -- an action taken by a Person will
be deemed to have been taken in the "Ordinary Course of Business" of
such Person only if: (a) such action is consistent with the past
practices of such Person and is taken in the ordinary course of the
normal day-to-day operations of such Person; (b) such action is not
required to be authorized by the board of directors of such Person (or
by any Person or group of Persons exercising similar authority); and
(c) such action is similar in nature and magnitude to actions
customarily taken, without any authorization by the board of directors
(or by any Person or group of Persons exercising similar authority), in
the ordinary course of the normal day-to-day operations of other Persons
that are in the same line of business as such Person.
"PERSON" -- any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company,
joint venture, estate, trust, association, organization, labor union, or
other entity or Governmental Body.
"PREMISES" -- the real property on which the Equipment is located,
and any facilities located thereon.
"PREDECESSOR" -- any Person having an ownership or possessory
interest in the Premises prior to that of Seller.
"PRIVATE ACTIVITY REVENUE BONDS TRANSACTION" - the issuance, sale
and delivery by the City of Kansas City, Kansas (n/k/a the City), of its
Private Activity Revenue Bonds, Series 1995 (EX-L-TUBE of Kansas, Inc.
Project) dated October 30, 1995, in the original principal amount of
$6,456,000.
"PROCEEDING" -- any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal,
administrative, or investigative) commenced, brought, conducted, or
heard by or before any Governmental Body or arbitrator.
"PURCHASE PRICE" -- as defined in Section 2.2(a).
"REMOVAL" - as defined in Section 5.7.
"SELLER CLOSING DOCUMENTS" -- as defined in Section 3.2(a).
"SELLER" -- as defined in the first paragraph of this Agreement.
"SELLER INDEMNIFIED PERSONS" -- as defined in Section 10.6.
"TERMINATION DATE" -- as defined in Section 5.1.
"THREATENED" -- a claim, Proceeding, dispute, action, or other
matter will be deemed to have been "Threatened" if any demand or
statement has been made (orally or in writing) or any notice has been
given (orally or in writing), to the Person that is affected by such
claim
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Proceeding, dispute, action, or other matter, that such a claim,
Proceeding, dispute, action, or other matter is likely to be asserted,
commenced, taken, or otherwise pursued in the future.
"TRUST INDENTURE" -- that certain indenture under which the Bonds
were issued.
"TRUSTEE" - BNY Trust Company of Missouri, and any successor
trustee at the time serving in connection with the Private Activity
Revenue Bonds Transaction.
SECTION 2.
SALE AND TRANSFER OF ASSETS; ASSUMPTION OF ASSUMED LIABILITIES; CLOSING
2.1 PURCHASE AND SALE. Subject to the terms and conditions of
this Agreement, at the Closing, Seller will sell, transfer, convey and
assign ownership of the EX-L Assets to Buyer, and Buyer will purchase
the EX-L Assets from Seller, free and clear of all Encumbrances.
2.2 PURCHASE PRICE/ESCROW.
(a) The total purchase price (the "Purchase Price") for the EX-L
Assets will be the sum of Eleven Million Seven Hundred and Fifty
Thousand Dollars ($11,750,000), payable at Closing by wire transfer of
immediately available funds pursuant to wire transfer instructions
delivered by Seller to Buyer no less than two (2) business days prior to
Closing, subject and pursuant to Section 2.6(b), subject to the deposit
of a portion of such funds in escrow pursuant to paragraph (c) of this
Section 2.2 and subject to any adjustments required by Section 2.7.
(b) Buyer and Seller acknowledge and agree that the EX-L Assets
are personal property and will be characterized as such in all tax
returns and filings with federal and state taxing authorities.
(c) Buyer and Seller acknowledge that legal title to the Kansas
City Leased Equipment is held by the City, subject to Seller's leasehold
interest therein and cannot be transferred to Buyer free and clear of
the interest of the City and the secured interest of the Trustee, until
(i) payment of the Defeasance Amount with respect to the Bonds issued
pursuant to the Private Activity Revenue Bonds Transaction (the "Bonds")
shall have been provided for by irrevocably depositing with the Trustee
in trust, and irrevocably setting aside exclusively for such payment,
funds constituting "Eligible Moneys" under the Trust Indenture
sufficient for such payment; (ii) all necessary and proper fees,
compensation and expenses of the Trustee and the City pertaining to the
Bonds shall have been paid or deposited with the Trustee; (iii) an
opinion of independent counsel shall have been delivered stating that
the funds deposited in escrow do not constitute preferential payments
within the provisions of Section 547(b) of the U.S. Bankruptcy Code,
(iv) the Bonds have been deemed redeemed in full and the full purchase
price for the Kansas City Leased Equipment has been paid or deposited
with the Trustee, and (v) Seller has provided to the City and/or the
Trustee any further documentation or payments as required under the
Trust Indenture and Kansas City Equipment Lease. At Closing, an amount
equal to the sum of the Defeasance Amount plus any additional amount
required to purchase the all of the property subject to the Kansas City
Equipment Lease shall be withheld from the Purchase Price and either
(i) deposited into an interest bearing escrow account to be held by the
Trustee pursuant to an escrow agreement, in the form and substance
substantially the same as
6
EXHIBIT B attached hereto, provided that the amount to be withheld will
be determined taking into account the Assurance Amount that will already
have been so deposited, and any interest that will have accrued thereon,
or (ii) used to reimburse the Credit Entity and/or General Electric
Capital Corporation, as appropriate. Also at the Closing, all right,
title and interest in, to and under the Kansas City Leased Equipment
will be transferred to Buyer, free and clear of all Encumbrances
pursuant to an Assignment and ▇▇▇▇ of Sale duly executed by the Seller,
which shall have received all right, title and interest in, to and under
the Kansas City Leased Equipment pursuant to an Assignment and ▇▇▇▇ of
Sale duly executed by the City and a release of security interest
executed by the Trustee. NOTWITHSTANDING ANYTHING CONTAINED IN THIS
AGREEMENT TO THE CONTRARY, SELLER SHALL NOT BE IN DEFAULT UNDER THIS
AGREEMENT AND BUYER SHALL NOT HAVE ANY TERMINATION RIGHTS UNDER
SECTION 9 DUE TO THE FACT THAT THE CITY WILL HAVE AN OWNERSHIP INTEREST
IN THE KANSAS CITY LEASED EQUIPMENT UNTIL THE DEFEASANCE OF THE BONDS
AND THE PURCHASE OF THE KANSAS CITY LEASED EQUIPMENT AT CLOSING, AND THE
TRUSTEE WILL HAVE A SECURITY INTEREST IN THE KANSAS CITY LEASED
EQUIPMENT UNTIL THE DEFEASANCE OF THE BONDS AT CLOSING.
2.3 NO ASSUMPTION OF LIABILITIES. Except as expressly provided
in this Agreement, in no event shall Buyer assume or incur any liability
or obligation hereunder of Seller or any of its subsidiaries or
Affiliates. Without limiting the generality of the foregoing, Buyer
assumes no liability hereunder with respect to (i) liabilities or
obligations arising out of Seller's failure to perform any agreement,
contract, commitment or lease in accordance with its terms prior to or
after the Closing, (ii) any product liability, claim of defective
products or similar claim for injury to person (including death) or
property or for recall of a defective product, regardless of when made
or asserted, for any products made or sold by Seller, (iii) any trade or
other account payable, (iv) any liability or obligation of Seller under
any mortgage, deed of trust, security agreement, financing statement or
capital lease or any note, bond or other instruments secured thereby,
(v) any liability or obligation of Seller existing at or arising after
the Closing under any contract or agreement which results from the
breach or wrongful action or inaction of Seller prior to the Closing,
(vi) any Employee Obligation, including, without limitation, any
liability or obligation of Seller in respect of any plan, agreement,
arrangement or understanding under which benefits or employment is
provided to any employee, (vii) any liability arising out of Seller's
operation of its business or the EX-L Assets, including all
Environmental Health and Safety Liabilities and the breach of any
product warranty, whether explicit or implied, made by Seller, or
(viii) any federal or state tax liability, including sales and use tax,
accruing prior to the Closing.
2.4 CLOSING. The Closing provided for in this Agreement will
take place at the offices of Gallop, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇.▇., ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ at 9:00 a.m. on January 3,
2000, or at such other time and place as the Buyer and Seller may agree
in writing.
2.5 PENDING THE CLOSING.
(a) The parties acknowledge that concurrent with the execution
hereof, Buyer has delivered to Seller the Deposit by wire transfer of
immediately available funds pursuant to Seller's wire transfer
instructions. The Deposit constitutes a partial payment of the Purchase
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Price as set forth herein, and, subject only to the provisions of
Section 9.2, shall be non-refundable.
(b) On September 17, 1999, if this Agreement has not been
terminated in accordance with the provisions hereof on or before such
date, Buyer shall deposit into the interest bearing escrow account
described in Section 2.2(c), by wire transfer of immediately available
funds pursuant to Seller's wire transfer instructions delivered to Buyer
no later than September 15, 1999, an amount equal to the Assurance
Amount. The Assurance Amount constitutes a partial payment of the
Purchase Price as set forth herein, and shall be entirely refundable to
Buyer if Buyer terminates this Agreement pursuant to Section 9.1(a)(i),
9.1(b)(i) or 9.1(e), or if this Agreement is terminated pursuant to
Section 9.1(d). If Seller terminates this Agreement pursuant to Section
9.1(a)(ii) or 9.1(b)(ii), the Assurance Amount shall be distributed from
escrow to Seller.
2.6 TRANSACTIONS AT CLOSING. Except for the Escrow Agreement
referred to in paragraphs (a)(ii) and (b)(ii) below, which shall be
executed upon Buyer's deposit of the Assurance Amount as provided in
Section 2.5 above, and on the basis of the representations, warranties,
covenants and agreements made herein and in the Exhibits and Disclosure
Schedules hereto and in the certificates and other instruments delivered
pursuant hereto, and subject to the terms and conditions hereof:
(a) Seller will deliver to Buyer:
(i) an Assignment and ▇▇▇▇ of Sale and any other title
transfer documents reasonably requested by Buyer with respect to
all of the EX-L Assets executed by Seller on terms reasonably
acceptable to Buyer (the "▇▇▇▇ of Sale") and security interest and
lien terminations with respect to all Encumbrances on such EX-L
Assets or reasonably acceptable payoff letters and/or executed
releases from the party holding an Encumbrance if the funds
necessary to satisfy such Encumbrance are collected or escrowed at
Closing for disbursement to the party holding the Encumbrance,
including the parties described in Section 2.2(c);
(ii) copies of the Escrow Agreement in form and substance
substantially the same as EXHIBIT B attached hereto (having
previously been executed and delivered) indicating the receipt by
the Trustee of the Defeasance Amount;
(iii) a good standing certificate regarding Seller, issued
as of a recent date by the Secretary of State of Seller's state of
organization;
(iv) resolutions duly adopted by the directors of Seller,
and the shareholder(s) of Seller authorizing the execution,
delivery and performance of the terms of this Agreement and the
consummation of the transactions contemplated by this Agreement,
certified to Buyer's reasonable satisfaction;
(v) copies of the books and records maintained by Seller
that relate to the operation of the Equipment;
(vi) evidence reasonably satisfactory to Buyer that the
Trustee has released its security interest in the Kansas City
Leased Equipment;
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(vii) evidence reasonably satisfactory to Buyer that all
obligations of the Seller to the Credit Entity have been paid in
full;
(viii) an Assignment and ▇▇▇▇ of Sale from the City to
Seller for the Kansas City Leased Equipment;
(ix) Instructions from the Trustee with respect to the
Defeasance Amount required to be escrowed under Section 2.2(c);
(x) the certificate referred to in Section 10.1; and
(xi) such other documents required pursuant to the terms of
this Agreement or as reasonably requested by Buyer, the City, the
Trustee and/or the Credit Entity in order to facilitate or effect
the transfer and conveyance of the EX-L Assets to Buyer.
(b) Buyer will deliver to Seller:
(i) by wire transfer of immediately available funds, an
amount equal to the Purchase Price, less (A) the Deposit, (B) the
Assurance Amount, and (C) any other amounts deposited into Escrow
pursuant to Sections 2.2(c);
(ii) copies of the Escrow Agreement in form and substance
substantially the same as EXHIBIT B attached hereto (having
previously been executed and delivered) indicating the receipt by
the Trustee of the Defeasance Amount;
(iii) good standing certificates with respect to Buyer and
its general partner, issued as of a recent date by the Secretary
of State of Buyer's and its general partner's state of
organization;
(iv) resolutions duly adopted by the directors of Buyer's
general partner authorizing the execution, delivery and
performance of the terms of this Agreement and the consummation of
the transactions contemplated by this Agreement, certified to
Seller's reasonable satisfaction;
(v) the certificate referred to in Section 10.1; and
(vi) any such other documents required pursuant to the
terms of this Agreement or as reasonably requested by Seller, the
City, the Trustee and/or the Credit Entity.
2.7 TAXES. Seller shall be responsible for all personal
property taxes, and payments in lieu of personal property taxes, with
respect to the EX-L Assets that were assessed, due or payable in 1999
and all prior years. Buyer shall be responsible for all personal
property taxes assessed in January, 2000, and payments in lieu of
personal property taxes payable in 2000, with respect to the EX-L
Assets. Buyer and Seller shall make appropriate adjustments at Closing
to reflect any such personal property taxes and payments in lieu of
personal property taxes that are prepaid and to reflect any such
personal property taxes and payments in lieu of personal property taxes
that are accrued but unpaid, all in accordance with the previous two
sentences. All real estate and other transfer taxes which are payable
or arise as a result of this Agreement or the
9
Closing pursuant to this Agreement shall be paid by Seller
notwithstanding how such taxes are imposed by statute. Buyer and Seller
agree to cooperate in good faith to allocate between them payments due
in lieu of taxes in 2000 and payments due for taxes assessed in January
2000, based on property that is subject to such payments, owned by each
of them immediately following the Closing.
2.8 EXCLUDED ASSETS. Notwithstanding the foregoing, Seller
shall not transfer to Buyer, and Buyer shall not acquire, and the EX-L
Assets shall not include, any of the Excluded Assets.
SECTION 3.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer, as follows:
3.1 ORGANIZATION AND GOOD STANDING. Seller is a corporation,
duly organized, validly existing, and in good standing under the laws of
the State of Kansas, with full corporate power and authority to conduct
its business as it is now being conducted, and to own or use the
properties and assets that it purports to own or use.
3.2 AUTHORITY; NO CONFLICT.
(a) This Agreement constitutes the legal, valid, and binding
obligation of Seller, enforceable against Seller in accordance with its
terms. Upon the execution and delivery by Seller of the documents
described in Section 2.6(a) (collectively, the "Seller Closing
Documents"), the Seller Closing Documents will constitute the legal,
valid, and binding obligations of Seller enforceable against Seller in
accordance with their respective terms. Seller has the absolute and
unrestricted corporate right, power, authority, and capacity to execute
and deliver this Agreement and the Seller Closing Documents and to
perform its obligations under this Agreement and the applicable Seller
Closing Documents.
(b) Except as set forth on DISCLOSURE SCHEDULE 3.2(B), neither
the execution and delivery of this Agreement nor the consummation or
performance of any of the Contemplated Transactions will (with or
without notice or lapse of time):
(i) contravene, conflict with, or result in a violation of
(A) any provision of Seller's articles of incorporation or by-
laws, or (B) any resolution adopted by the board of directors or
the stockholders of Seller;
(ii) contravene, conflict with, or result in a violation of
any of the terms or requirements, or give any Governmental Body or
other Person the right to challenge any of the Contemplated
Transactions, or to exercise any remedy or obtain any relief
under, any Legal Requirement or any Order to which Seller or any
EX-L Asset is or would be bound;
(iii) contravene, conflict with, or result in a violation of
any of the terms or requirements of, or give any Governmental Body
the right to revoke, withdraw, suspend,
10
cancel, terminate, or modify, any Governmental Authorization that
is held by Seller and that otherwise relates to, or affects, any
EX-L Asset;
(iv) cause Buyer to become subject to, or to become liable
for the payment of, any tax (including, but not limited to,
transfer, sales, income, gross receipts, license, payroll,
employment, excise, severance, stamp occupation, premium, windfall
profit, environmental, customs, duties, capital stock, franchise,
real property, registration, including any interest or penalty
interest or addition thereto) with the exception of those incurred
in the ordinary course of Buyer's business after the Closing Date
and unrelated to the Contemplated Transactions;
(v) to Seller's Knowledge, cause any EX-L Asset to be
reassessed or revalued by any taxing authority or other
Governmental Body; or
(vi) result in the imposition or creation of any
Encumbrance upon or with respect to any EX-L Asset.
3.3 LEASED PROPERTY. DISCLOSURE SCHEDULE 3.3 contains a
complete and accurate list of all leasehold interests in personal
property which constitute part of the EX-L Assets. Seller has delivered
or made available to Buyer copies of such leases.
3.4 GOOD TITLE TO ASSETS. Except as set forth on DISCLOSURE
SCHEDULE 3.4, (a) Seller has good title to all of the EX-L Assets,
(b) all of the EX-L Assets are free and clear of restrictions on or
conditions to transfer or assignment, and (c) all of the EX-L Assets are
free and clear of all Encumbrances.
3.5 CONDITION OF ASSETS; LIMITATIONS ON WARRANTY.
(a) Except as expressly set forth in Section 3.6, Seller makes
no warranties as to the physical condition of the Equipment, all of
which will be sold "AS IS", "WHERE IS" at the Closing.
3.6 SYSTEMS AND EQUIPMENT YEAR 2000 COMPLIANT. Except as set
forth on DISCLOSURE SCHEDULE 3.6, to Seller's Knowledge, all Equipment
containing imbedded microchips necessary to enable the operation of the
Equipment (including systems and equipment supplied by others or with
which the Equipment interfaces) is Year 2000 Compliant. Seller has
furnished to Buyer copies of all programs and plans of Seller, if any
currently exist related to making the Equipment Year 2000 Compliant.
For purposes of this Section 3.6, the term "Year 2000 Compliant" means
that such systems and equipment shall be able accurately to process
(including, without limitation, calculate, compare and sequence) date
and time data from, into and between the years 1999 and 2000 and any
other years in the Twentieth and Twenty-first Centuries. Except as set
forth on DISCLOSURE SCHEDULE 3.6, Seller has no actual knowledge of any
inability on the part of any supplier or customer of, or service
provider to, Seller at the Facilities to timely ensure that its systems
and equipment are Year 2000 Compliant.
3.7 LEGAL PROCEEDINGS; ORDERS.
(a) Except as set forth on DISCLOSURE SCHEDULE 3.7(a) there is
no pending Proceeding: (i) that has been commenced by or against Seller
or that otherwise relates to or may affect the
11
EX-L Assets; or (ii) that challenges, or that may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any
of the Contemplated Transactions. No such Proceeding has been
Threatened, and to Seller's Knowledge, no event has occurred or
circumstance exists that may give rise to or serve as a basis for the
commencement of any such Proceeding. Seller has made available to Buyer
copies of all pleadings, correspondence, and other documents relating to
each Proceeding listed on DISCLOSURE SCHEDULE 3.7(a).
(b) Except as set forth on DISCLOSURE SCHEDULE 3.7(b): (i) there
is no Order to which any of the EX-L Assets is subject; and (ii) Seller
is not subject to any Order that relates to the EX-L Assets.
(c) Except as set forth on DISCLOSURE SCHEDULE 3.7(c): (i) Seller
is, and at all times since January 1, 1997, has been, in full compliance
compliance with all of the terms and requirements of each Order listed
or required to be listed on DISCLOSURE SCHEDULE 3.7(b); (ii) to Seller's
Knowledge, no event has occurred or circumstance exists that may
constitute or result in (with or without notice or lapse of time) a
violation of or failure to comply with any term or requirement of any
Order to which any of the EX-L Assets is subject; and (iii) Seller has
not received, at any time since January 1, 1997, any notice or other
communication (whether oral or written) from any Governmental Body
regarding any actual, alleged, possible, or potential violation of, or
failure to comply with, any term or requirement of any Order to which
any of the EX-L Assets is subject.
3.8 CONTRACTS; NO DEFAULTS.
(a) DISCLOSURE SCHEDULE 3.8(a) contains a complete and accurate
list, and Seller has delivered to Buyer true and complete copies, of
each lease, license, installment and conditional sale agreement, and
other contract in full force and effect and affecting the ownership of,
leasing of, title to, use of, or any leasehold or other interest in, any
EX-L Asset and each amendment, supplement, and modification (whether
oral or written) in respect of any of the foregoing (collectively, the
"Contracts"). Buyer waives compliance with the delivery requirements
described in the immediately preceding sentence to the extent noted on
DISCLOSURE SCHEDULE 3.8(a).
(b) Except as set forth on DISCLOSURE SCHEDULE 3.8(b), each
Contract identified on DISCLOSURE SCHEDULE 3.8(a) is in full force and
effect and is valid and enforceable in accordance with its terms.
(c) Except as set forth on DISCLOSURE SCHEDULE 3.8(c):
(i) Seller is, and at all times has been, in full
compliance with all material terms and requirements of each
Contract;
(ii) Seller has not given to or received from any other
Person, any notice or other communication (whether written or
oral) regarding any actual, alleged, possible, or potential
violation or breach of, or default under, any Contract.
(d) Except as set forth on DISCLOSURE SCHEDULE 3.8(d), there are
no renegotiations of, attempts to renegotiate, or outstanding rights to
renegotiate any material amounts payable by
12
Seller under current or completed Contracts with any Person and no such
Person has made written demand for such re-negotiation.
3.9 DISCLOSURE.
(a) No representation or warranty of Seller in this Agreement
and no statement in a Disclosure Schedule to this Agreement contains any
untrue statement of material fact or omits to state a material fact
necessary in order to make the statements made herein or therein, in the
light of the circumstances under which they were made, not misleading.
No notice given pursuant to Section 5.4 will contain any untrue
statement or omit to state a material fact necessary to make the
statements therein or in this Agreement, in the light of the
circumstances under which they were made, not misleading.
(b) Seller has conducted a reasonable investigation with respect
to the representations and warranties contained in this Agreement.
SECTION 4.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 ORGANIZATION AND GOOD STANDING. Buyer is a limited
partnership duly organized, validly existing, and in good standing under
the laws of the State of Delaware. Buyer's general partner is a
corporation, duly organized, validly existing, and in good standing
under the laws of the State of Delaware.
4.2 AUTHORITY; NO CONFLICT.
(a) This Agreement constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its
terms. Upon the execution and delivery by Buyer of the documents
described in Section 2.6(b) (collectively, the "Buyer Closing
Documents"), the Buyer Closing Documents will constitute the legal,
valid and binding obligation of Buyer, enforceable against Buyer in
accordance with their terms. Buyer has the absolute and unrestricted
right, power, and authority to execute and deliver this Agreement and,
subject to the approval of Buyer's general partner, Buyer has the
absolute and unrestricted right, power, and authority to execute and
deliver the Buyer Closing Documents and to perform its obligations under
this Agreement and the Buyer Closing Documents.
(b) Neither the execution and delivery of this Agreement by
Buyer nor the consummation or performance of any of the Contemplated
Transactions by Buyer will give any Person the right to prevent, delay,
or otherwise interfere with any of the Contemplated Transactions
pursuant to:
(i) any provision of Buyer's certificate of limited
partnership;
(ii) any resolution adopted by the general partner of
Buyer;
(iii) any Legal Requirement or Order to which Buyer may be
subject; or
13
(iv) any Contract to which Buyer is a party or by which
Buyer may be bound.
SECTION 5.
COVENANTS
5.1 ACCESS AND INVESTIGATION. Between the date of this
Agreement and the earlier of the date this Agreement is terminated
pursuant to SECTION 9 (the "Termination Date") and the Closing Date,
Seller will permit representatives, agents, employees, surveyors,
contractors, lenders, appraisers and engineers designated by Buyer
access to and entry upon the Premises during normal business hours to
examine, sample, inspect, measure and test any of the EX-L Assets at
Buyer's cost and expense.
5.2 MAINTENANCE OF ASSETS. Between the date of this Agreement
and the earlier of the Termination Date and the Closing Date, Seller
will:
(a) maintain the EX-L Assets in customary repair, order and
condition, damage by casualty excepted, maintain all insurance with
respect to the EX-L Assets in effect on the date of this Agreement, and,
in the event of casualty, loss or damage to any EX-L Asset prior to the
Closing Date for which it is insured, either repair or replace such
damaged property or, at the Buyer's option, transfer the proceeds of
such insurance to Buyer at the Closing upon Buyer's payment of the full
Purchase Price; and
(b) comply in all material respects with all Legal Requirements
and contractual obligations applicable to the EX-L Assets including,
without limitation, any leases regarding the EX-L Assets. The
disclosure by Seller in DISCLOSURE SCHEDULE 3.8(C) shall not be deemed a
Breach of this Section 5.2(b).
5.3 REQUIRED APPROVALS. As promptly as practicable after the
date of this Agreement, Seller will make all filings required by Legal
Requirements to be made by Seller in order to consummate the
Contemplated Transactions. Between the date of this Agreement and the
earlier of the Termination Date and the Closing Date, on a Best Efforts
basis, Seller will cooperate with Buyer with respect to all filings that
Buyer elects to make or is required by Legal Requirements to make in
connection with the Contemplated Transactions.
5.4 NOTIFICATION. Between the date of this Agreement and the
earlier of the Termination Date and the Closing Date, Seller will
promptly notify Buyer in writing if Seller becomes aware of any fact or
condition that causes or constitutes a Breach of any of the
representations and warranties of Seller as of the date of this
Agreement, or if Seller becomes aware of the occurrence after the date
of this Agreement of any fact or condition that would cause or
constitute a Breach of any such representation or warranty had such
representation or warranty been made as of the time of occurrence or
discovery of such fact or condition. Should any such fact or condition
require any change in a Disclosure Schedule hereto if the Disclosure
Schedule were dated the date of the occurrence or discovery of any such
fact or condition, Seller will promptly deliver to Buyer a supplement to
such Disclosure Schedule specifying such change. During the same
period, Seller will promptly notify Buyer of the occurrence of any
Breach of any covenant of Seller in this SECTION 5 or of the occurrence
of any event that may make the satisfaction of the conditions in
SECTION 7 impossible or unlikely.
14
5.5 NO NEGOTIATION. Until such time, if any, as this Agreement
is terminated pursuant to SECTION 9, neither Seller nor any of its
shareholders will, and Seller will notify each of its agents or brokers
not to, directly or indirectly solicit, initiate, or encourage any
inquiries or proposals from, discuss or negotiate with, provide any non-
public information to, or consider the merits of any unsolicited
inquiries or proposals from, any Person (other than Buyer) relating to
any transaction involving the sale of the EX-L Assets (other than in the
Ordinary Course of Business), or any of the capital stock of Seller, or
any merger, consolidation, business combination, or similar transaction
involving Seller.
5.6 BEST EFFORTS. Between the date of this Agreement and the
earlier of the Termination Date and the Closing Date, Seller and Buyer
will use their respective reasonable Best Efforts to cause the
conditions in SECTION 7 and SECTION 8 to be satisfied.
5.7 REMOVAL. For a period of thirty (30) days following the
Closing, Seller will permit representatives, agents, employees,
surveyors, contractors, lenders, appraisers and engineers designated by
Buyer access to and entry upon the Premises during normal business hours
to prepare for and to carry out Buyer's removal of the EX-L Assets (the
"Removal"). Buyer will use its Best Efforts to complete the Removal in
a workmanlike manner during such thirty (30) day period. Seller will
permit Buyer to maintain the EX-L Assets at and within the Premises
pending the Removal, without additional expense to Buyer for the first
30 days following the Closing (by way of lease or otherwise), although
risk of loss with respect to the EX-L Assets shall pass to Buyer at
Closing. Furthermore, if the EX-L Assets shall not have been removed by
the thirtieth day following the Closing, Buyer shall pay to Seller a
reasonable market rental until the EX-L Assets shall be removed.
SECTION 6.
EMPLOYMENT MATTERS
6.1 TERMINATION AND SEVERANCE PAY. Seller will be responsible
for any and all Employee Obligations related to or arising in connection
with the consummation of the Contemplated Transactions, including,
without limitation, termination and severance pay related to or arising
in connection with any termination of Seller's employees, and Buyer
shall not assume or be responsible for any Employee Obligation.
SECTION 7.
CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to purchase the EX-L Assets and to take the
other actions required to be taken by Buyer at the Closing is subject to
the satisfaction, at or prior to the Closing, of each of the following
conditions (any of which may be waived by Buyer, in whole or in part):
7.1 ACCURACY OF REPRESENTATIONS. All of the representations and
warranties of Seller in this Agreement (considered collectively), and
each of these representations and warranties (considered individually),
must be accurate in all material respects as of the Closing Date as if
made on the Closing Date, without giving effect to any supplement to the
Disclosure Schedules; provided that each of the representations and
warranties of Seller in Section 3.4 must have been accurate in all
respects as of the date of this Agreement (or any such inaccuracy must
have been cured by the Seller as of the Closing Date), and must be
accurate in all respects as of the Closing
15
Date as if made on the Closing Date, without giving effect to any
supplement to the Disclosure Schedule described in such Section 3.4.
7.2 PERFORMANCE BY SELLER. All of the covenants and obligations
that Seller is required to perform or to comply with pursuant to this
Agreement at or prior to the Closing (considered collectively), and each
of these covenants and obligations (considered individually), must have
been duly performed and complied with in all material respects. Each
document required to be delivered pursuant to Section 2.6(a) must have
been delivered, and each of the other covenants and obligations in
Sections 5.3 and 5.6 must have been performed and complied with in all
respects.
7.3 CONSENTS. Each of the Consents identified on DISCLOSURE
SCHEDULE 3.2(b), must have been obtained and must be in full force and
effect.
7.4 ADDITIONAL DOCUMENTS. Each of the following documents must
have been delivered to Buyer:
(a) an opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇, P.L.L.P., counsel to Seller,
dated the Closing Date, substantially in the form of EXHIBIT C;
(b) a certificate of Seller representing and warranting to Buyer
that the conditions set forth in Sections 7.1, 7.2 and 7.5 have been
fulfilled; and
(c) such other documents as Buyer may reasonably request for the
purpose of (i) enabling its counsel to provide the opinion referred to
in Section 8.4(a), (ii) evidencing the accuracy of any of the
representations and warranties of Seller, (iii) evidencing the
performance by Seller of, or the compliance by Seller with, any covenant
or obligation required to be performed or complied with by the Seller,
(iv) evidencing the satisfaction of any condition referred to in this
SECTION 7, or (v) otherwise facilitating the consummation or performance
of any of the Contemplated Transactions.
7.5 NO PROHIBITION. There must not be in effect any Legal
Requirement or any injunction or other Order that (a) prohibits the sale
of the EX-L Assets by Seller to Buyer, and (b) has been adopted or
issued, or has otherwise become effective, since the date of this
Agreement.
7.6 MATERIAL ADVERSE CHANGE. There shall not have occurred any
material adverse change to the condition of the EX-L Assets.
SECTION 8.
CONDITIONS PRECEDENT TO THE OBLIGATION OF SELLER TO CLOSE
The obligation of Seller to sell the EX-L Assets and the
obligation of Seller to take such other actions required to be taken by
Seller at the Closing are subject to the satisfaction, at or prior to
the Closing, of each of the following conditions (any of which may be
waived by Seller in whole or in part):
8.1 ACCURACY OF REPRESENTATIONS. All of Buyer's representations
and warranties in this Agreement (considered collectively), and each of
these representations and warranties
16
(considered individually), must be accurate in all material respects as
of the Closing Date as if made on the Closing Date.
8.2 BUYER'S PERFORMANCE.
(a) All of the covenants and obligations that Buyer is required
to perform or to comply with pursuant to this Agreement at or prior to
the Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been performed and
complied with in all material respects. Buyer's covenants and
obligations in Section 5.6 must have been performed and complied with in
all respects.
(b) Buyer must have delivered each of the documents required to
be delivered by Buyer pursuant to Section 2.6(b) and must have paid the
Purchase Price as required pursuant to Section 2.6(b).
8.3 CONSENTS. Each of the Consents identified on DISCLOSURE
SCHEDULE 3.2(b) must have been obtained and must be in full force and
effect.
8.4 ADDITIONAL DOCUMENTS. Buyer must have caused the following
documents to be delivered to Seller:
(a) an opinion of Gallop, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇.▇., counsel to
Buyer, dated the Closing Date, substantially in the form of EXHIBIT D;
(b) a certificate of Buyer representing and warranting to Seller
that the conditions set forth in Sections 8.1, 8.2 and 8.5 have been
fulfilled; and
(c) such other documents as Seller may reasonably request for
the purpose of (i) enabling Seller's counsel to provide the opinion
referred to in Section 7.4(a), (ii) evidencing the accuracy of any
representation or warranty of Buyer, (iii) evidencing the performance by
Buyer of, or the compliance by Buyer with, any covenant or obligation
required to be performed or complied with by Buyer, (iv) evidencing the
satisfaction of any condition referred to in this SECTION 8, or
(v) otherwise facilitating the consummation of any of the Contemplated
Transactions.
8.5 NO INJUNCTION. There must not be in effect any Legal
Requirement or any injunction or other Order that (a) prohibits the sale
of the EX-L Assets by Seller to Buyer, and (b) has been adopted or
issued, or has otherwise become effective, since the date of this
Agreement.
SECTION 9.
TERMINATION
9.1 TERMINATION EVENTS. This Agreement may, by notice given
prior to or at the Closing (except for Subparagraph (c) below), be
terminated:
(a) (i) by Buyer, if a material Breach of any provision of this
Agreement has been committed by Seller and Seller has not cured such
Breach within thirty (30) days after receipt of such notice but in no
event later than the Closing, and (ii) by Seller if a material Breach of
any
17
provision of this Agreement has been committed by Buyer and Buyer has
not cured such Breach within thirty (30) days after receipt of such
notice but in no event later than the Closing, provided that the non-
Breaching party has not waived such Breach;
(b) (i) by Buyer if any of the conditions in SECTION 7 have not
been satisfied as of the Closing Date or if satisfaction of such a
condition is or becomes impossible (other than through the failure of
Buyer to comply with its obligations under this Agreement) and Buyer has
not waived such condition on or before the Closing Date; or (ii) by
Seller if any of the conditions in SECTION 8 have not been satisfied as
of the Closing Date or if satisfaction of such a condition is or becomes
impossible (other than through the failure of Seller to comply with its
obligations under this Agreement) and Seller has not waived such
condition on or before the Closing Date;
(c) by Buyer, on or before September 17, 1999, if the Board of
Directors of Buyer's General Partner, Maverick Tube Corporation, a
Delaware corporation, shall have failed to approve this Agreement and
the consummation of the Contemplated Transactions for any reason or no
reason, including, without limitation, the availability of financing
with respect to the Contemplated Transactions in such amount and on such
terms as shall be satisfactory to such Board of Directors in its sole
and absolute discretion.
(d) by mutual written consent of Buyer and Seller; and/or
(e) by Buyer or Seller if the Closing has not occurred (other
than through the failure of any party seeking to terminate this
Agreement to comply fully with its obligations under this Agreement) on
or before February 28, 2000, or such later date as the parties may agree
upon.
9.2 EFFECT OF TERMINATION. Each party's right of termination
under Section 9.1 is in addition to any other rights it may have under
this Agreement or otherwise, and the exercise of a right of termination
will not be an election of remedies. If this Agreement is terminated
pursuant to Section 9.1, all further obligations of the parties under
this Agreement will terminate, except that the obligations in this
Section 9.2 and Sections 12.1 and 12.3 will survive. If this Agreement
is terminated by Buyer pursuant to Section 9.1(a)(i), 9.1(b)(i) or
9.1(e), then Seller shall pay to Buyer an amount equal to the Deposit.
SECTION 10.
INDEMNIFICATION; REMEDIES
10.1 SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY
KNOWLEDGE; EXCEPTIONS. All representations, warranties, covenants, and
obligations in this Agreement, the Disclosure Schedules, the supplements
to the Disclosure Schedules, and any other certificate or document
delivered pursuant to this Agreement will survive the Closing. The
right to indemnification, payment of Damages or other remedy based on
such representations, warranties, covenants, and obligations will not be
affected by any investigation conducted with respect to, or any
Knowledge acquired (or capable of being acquired) at any time, whether
before or after the execution and delivery of this Agreement or the
Closing Date, with respect to the accuracy or inaccuracy of or
compliance with, any such representation, warranty, covenant, or
obligation; provided that Seller and Buyer shall each sign a certificate
at Closing disclosing whether such party has Knowledge with respect to
the inaccuracy of or noncompliance with any
18
representation, warranty, covenant, or obligation by the other party.
The waiver of any condition based on the accuracy of any representation
or warranty, or on the performance of or compliance with any covenant or
obligation, will not affect the right to indemnification, payment of
Damages, or other remedy based on such representations, warranties,
covenants, and obligations.
10.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLER. Seller
will indemnify and hold harmless Buyer, and its partners, controlling
persons, and Affiliates (collectively, the "Buyer Indemnified Persons")
for, and will pay to the Buyer Indemnified Persons the amount of, any
loss, liability, claim, damage (excluding consequential damages),
expense (including costs of investigation and defense and reasonable
attorney's fees) (collectively, the "Expenses") or diminution of value,
whether or not involving a third-party claim incurred by the Buyer
Indemnified Persons (collectively, "Damages") and arising from or in
connection with:
(a) any Breach of any representation or warranty made by Seller
in this Agreement, the Disclosure Schedules (without giving effect to
any supplement to the Disclosure Schedules), or any other certificate or
document delivered by Seller pursuant to this Agreement;
(b) any Breach of any representation or warranty made by Seller
in this Agreement as if such representation or warranty were made on and
as of the Closing Date;
(c) any Breach by Seller of any covenant or obligation of Seller
in this Agreement;
(d) any claim against Buyer by any Person that Buyer is liable
to any extent for any liability of Seller other than obligations
specifically assumed hereunder, including, without limitation any claim
with respect to an Employee Obligation; or
(e) any Damages (including costs of Cleanup, containment or
other remediation) arising, directly or indirectly, before or after
Closing, out of, relating to, or based upon any Environmental
Liabilities (as defined below) arising out of or relating to the EX-L
Assets (before the Closing) or the Premises (at any time), except to the
extent that any such Damages are directly caused by the negligent acts
or willful misconduct of Buyer or its agents, officers, directors, or
employees following the Closing. For purposes of this Agreement, the
term Environmental Liabilities shall mean those Environmental, Health
and Safety Liabilities that arise due to (i) environmental conditions on
the Premises or (ii) any other compliance, corrective, investigative or
remedial measures concerning pollution or protection of the Environment.
10.3 ENVIRONMENTAL ACKNOWLEDGMENT. Seller acknowledges that,
prior to Closing, Buyer has not generated, handled, stored, treated,
transported, disposed of, or in any way whatsoever taken responsibility
for any toxic or hazardous substance or other material found,
identified, or as yet unknown at the Premises. Buyer and Seller further
acknowledge and understand that the Buyer's Removal may result in the
discovery or exposure of certain conditions, including without
limitation the potential discovery of friable asbestos on the Premises.
Accordingly, Seller waives any claim against the Buyer Indemnified
Persons and hereby agrees to indemnify, defend, and hold harmless the
Buyer Indemnified Persons from any Damages allegedly arising from, or in
connection with, Buyer's Removal activities, including without
limitation, the existence of actual or suspected friable asbestos or
other hazardous materials or contamination, but excluding any Damages
described in Section 10.6(e) which are subject to indemnification by
Buyer. If Buyer discovers any hazardous material or other
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environmental conditions during the Removal, Buyer shall promptly
notify Seller of such discovery.
10.4 TIME LIMITATIONS. Seller will have no liability (for
indemnification or otherwise) with respect to the matters described in
Section 10.2, other than Section 10.2(e) unless on or before six months
from the Closing Date, Buyer notifies Seller of a Breach or claim
described in Section 10.2 specifying the factual basis of that Breach or
claim in reasonable detail to the extent then known by Buyer.
10.5 LIMITATION ON AMOUNT - SELLER. Seller will have no
liability (for indemnification or otherwise) with respect to the matters
described in Section 10.2, other than Section 10.2(e), for any Damages
in excess of Five Hundred Thousand Dollars ($500,000).
10.6 INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER. Buyer will
indemnify and hold harmless Seller, its stockholders and Affiliates
(collectively, the "Seller Indemnified Persons") and will pay to the
Seller Indemnified Persons the amount of any Expenses and Damages
arising, directly or indirectly, from or in connection with: (a) any
Breach of any representation or warranty made by Buyer in this Agreement
or in any certificate delivered by Buyer pursuant to this Agreement;
(b) any Breach of any representation or warranty made by Buyer in this
Agreement as if such representation or warranty were made on and as of
the Closing Date; (c) any Breach by Buyer of any covenant or obligation
of Buyer in this Agreement; (d) any claim against Seller by any person
that has been reduced to judgment that Seller is liable to any extent
for any liability of Buyer expressly assumed by Buyer from Seller
hereunder; or (e) relating to or based upon any Damage to the Premises
(including Environmental Liabilities) caused by Buyer's Removal of the
Equipment, to the extent and only to the extent that such Expenses and
Damages are not the result of a pre-existing condition on the Premises,
and not including such Expenses and Damages that are directly caused by
the negligent acts or willful misconduct of Seller or its affiliates,
agents, officers, directors or employees.
10.7 PROCEDURE FOR INDEMNIFICATION - THIRD PARTY CLAIMS.
(a) Promptly after receipt by an indemnified party under
Section 10.2 or 10.6 of notice of the commencement of any Proceeding
against it, such indemnified party will, if a claim is to be made
against an indemnifying party under such Section, give notice to the
indemnifying party of the commencement of such Proceeding, but the
failure to notify the indemnifying party will not relieve the
indemnifying party of any liability that it may have to any indemnified
party, except to the extent that the indemnifying party demonstrates
that the defense of such action is prejudiced by the indemnified party's
failure to give such notice.
(b) If any Proceeding referred to in Section 10.7(a) is brought
against an indemnified party and it gives notice to the indemnifying
party of the commencement of such Proceeding, the indemnifying party
will be entitled to participate in such Proceeding and, to the extent
that it wishes (unless (i) the indemnifying party is also a party to
such Proceeding and the indemnified party determines in good faith that
joint representation would be inappropriate, (ii) the indemnifying party
fails to provide reasonable assurance to the indemnified party of its
financial capacity to defend such Proceeding and provide indemnification
with respect to such Proceeding, or (iii) the outcome of the Proceeding
will have a continuing effect on the indemnified party), to
20
assume the defense of such Proceeding with counsel satisfactory to the
indemnified party and, after notice from the indemnifying party to the
indemnified party of its election to assume the defense of such
Proceeding, the indemnifying party will not, as long as it diligently
conducts such defense, be liable to the indemnified party under this
Section 10.7(b) for any fees of other counsel or any other expenses with
respect to the defense of such Proceeding, in each case subsequently
incurred by the indemnified party in connection with the defense of such
Proceeding, other than reasonable costs of investigation. If the
indemnifying party assumes the defense of a Proceeding, (i) no
compromise or settlement of such claims may be effected by the
indemnifying party without the indemnified party's consent unless
(A) there is no finding or admission of any violation of Legal
Requirements or any violation of the rights of any Person and no effect
on any other claims that may be made against the indemnified party, and
(B) the sole relief provided is monetary Damages that are paid in full
by the indemnifying party; and (ii) the indemnified party will have no
liability with respect to any compromise or settlement of such claims
effected without its consent. If notice is given to an indemnifying
party of the commencement of any Proceeding and the indemnifying party
does not, within ten (10) days after the indemnified party's notice is
given, give notice to the indemnified party of its election to assume
the defense of such Proceeding, the indemnifying party will be bound by
any determination made in such Proceeding or any compromise or
settlement effected by the indemnified party.
(c) Notwithstanding the foregoing, if an indemnified party
determines in good faith that there is a reasonable probability that a
Proceeding may adversely affect it or its Affiliates other than as a
result of monetary Damages for which it would be entitled to
indemnification under this Agreement, the indemnified party may, by
notice to the indemnifying party, assume the exclusive right to defend,
compromise, or settle such Proceeding, but the indemnifying party will
not be bound by any determination of a Proceeding so defended or any
compromise or settlement effected without its consent (which may not be
unreasonably withheld).
(d) Seller hereby consents to the non-exclusive jurisdiction of
any court in Kansas or Missouri in which a Proceeding is brought against
any Indemnified Person for purposes of any claim that an Indemnified
Person may have under this Agreement with respect to such Proceeding or
the matters alleged therein, and agrees that process may be served on
Seller and its shareholders with respect to such a claim anywhere in the
world.
10.8 PROCEDURE FOR INDEMNIFICATION - OTHER CLAIMS. A claim for
indemnification for any matter not involving a third-party claim may be
asserted by notice to the party from whom indemnification is sought.
10.9 LEGAL FEES AND EXPENSES. Except as expressly set forth in
this SECTION 10, each party shall pay its own legal expenses with
respect to all matters arising under this SECTION 10.
SECTION 11.
ARBITRATION
11.1 ARBITRATION. Any dispute arising under this Agreement,
except for a dispute that is required by statute or applicable law to be
heard by a court having jurisdiction of such dispute, shall be settled
by arbitration in Kansas City, Missouri, before a single arbitrator
pursuant to the
21
rules of the American Arbitration Association. Arbitration may be
commenced at any time by any party hereto by giving written notice to
each party to a dispute that such dispute has been referred to
arbitration. The arbitrator shall be selected by the joint agreement of
Buyer and Seller, but if they do not so agree within twenty (20) days
after the date of the notice referred to above, the selection shall be
made pursuant to the rules from the panels of arbitrators maintained by
such Association. Any award rendered by the arbitrator shall be
conclusive and binding upon the parties hereof; provided, however, that
any such award shall be accompanied by a written opinion of the
arbitrator giving the reasons for the award. This provision for the
arbitration of disputes shall be specifically enforceable by the parties
and the decision of the arbitrator in accordance herewith shall be final
and binding and there shall be no right of appeal therefrom, except for
claims of bias. The submission of any dispute to arbitration shall not
relieve the parties hereto from the respective obligations under this
Agreement that are not the specific subject matter of such dispute.
SECTION 12.
GENERAL PROVISIONS
12.1 EXPENSES. Except as otherwise expressly provided in this
Agreement, each party to this Agreement will bear its respective
expenses incurred in connection with the preparation, execution, and
performance of this Agreement and the Contemplated Transactions,
including all fees and expenses of agents, representatives, counsel, and
accountants. In the event of termination of this Agreement, the
obligation of each party to pay its own expenses will be subject to any
rights of such party arising from a Breach of this Agreement by another
party.
12.2 PUBLIC ANNOUNCEMENTS. Any public announcement or similar
publicity with respect to this Agreement or the Contemplated
Transactions will be issued, if at all, at such time and in such manner
as Buyer determines, upon prior consultation with Seller to the extent
practicable under the circumstances. Unless consented to by Buyer in
advance, or unless required by Legal Requirements, prior to the Closing,
Seller shall keep this Agreement strictly confidential and may not make
any disclosure of this Agreement to any Person other than Seller's
attorneys, accountants, banks, brokers or other professionals, who shall
be notified by Seller to maintain the confidentiality of information
relating to this Agreement.
12.3 CONFIDENTIALITY. Between the date of this Agreement and the
Closing Date, Buyer, Seller and Seller's shareholders will maintain in
confidence, and will cause the directors, officers, partners, employees,
agents, and advisors of Buyer and Seller to maintain in confidence, and
not use to the detriment of another party any written, oral, or other
information obtained in confidence from another party in connection with
this Agreement or the Contemplated Transactions, unless (a) such
information is already known to such party or to others not bound by a
duty of confidentiality or such information becomes publicly available
through no fault of such party, (b) the use of such information is
necessary or appropriate in making any filing or obtaining any consent
or approval required for the consummation of the Contemplated
Transactions, or (c) the furnishing or use of such information is
required by any Proceeding.
If the Contemplated Transactions are not consummated, each party
will return or destroy as much of such written information as the other
party may reasonably request.
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12.4 NOTICES. All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be
deemed to have been duly given when (a) delivered by hand (with written
confirmation of receipt), (b) sent by telecopier (with written
confirmation of receipt), provided that a copy is mailed by registered
mail, return receipt requested, or (c) when received by the addressee,
if sent by a nationally recognized overnight delivery service (receipt
requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier
numbers as a party may designate by notice to the other parties):
SELLER: EX-L-TUBE OF KANSAS, INC.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Mr. ▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇ & ▇▇▇▇, P.L.L.P.
4200 Multifoods Tower
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
BUYER: MAVERICK TUBE, L.P.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: GALLOP, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇.▇.
Interco Corporate Tower
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
12.5 WAIVER. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither the failure nor
any delay by any party in exercising any right, power, or privilege
under this Agreement or the documents referred to in this Agreement will
operate as a waiver of such right, power, or privilege, and no single or
partial exercise of any such right, power, or privilege will preclude
any other or further exercise of such right, power, or privilege or the
exercise of any other right, power, or privilege. To the maximum extent
permitted by applicable law, (a) no claim or right arising out of this
Agreement or the documents referred to in this Agreement can be
discharged by one party, in whole or in part, by a waiver or
renunciation of the claim or right unless in writing signed by the other
party; (b) no waiver that may be given by a party will be applicable
except in the specific instance for which it is given; and (c) no notice
to or demand on one party will be deemed to be a waiver of any
obligation of such party
23
or of the right of the party giving such notice or demand to take
further action without notice or demand as provided in this Agreement or
the documents referred to in this Agreement.
12.6 BULK SALES LAWS. The parties hereto waive compliance with
the requirements of any applicable Bulk Sales Law in connection with the
consummation of the Contemplated Transactions.
12.7 ENTIRE AGREEMENT AND MODIFICATION. This Agreement
supersedes all prior agreements between the parties with respect to its
subject matter (including the Option Agreement dated June 2, 1999, as
amended) and constitutes (along with the documents referred to in this
Agreement) a complete and exclusive statement of the terms of the
agreement between the parties with respect to its subject matter. This
Agreement may not be amended except by a written agreement executed by
the party to be charged with the amendment.
12.8 ASSIGNMENTS; SUCCESSORS; NO THIRD-PARTY RIGHTS. No party
may assign any of its rights under this Agreement without the prior
consent of the other party except that Buyer may assign any of its
rights under this Agreement to any Subsidiary or Affiliate of Buyer and
may collaterally assign its rights hereunder to any financial
institution or institutions providing financing to Buyer. Subject to
the preceding sentence, this Agreement will apply to, be binding in all
respects upon, and inure to the benefit of the successors and permitted
assigns of the parties. Nothing expressed or referred to in this
Agreement will be construed to give any Person other than the parties to
this Agreement any legal or equitable right, remedy, or claim under or
with respect to this Agreement or any provision of this Agreement. This
Agreement and all of its provisions and conditions are for the sole and
exclusive benefit of the parties to this Agreement and their permitted
successors and assigns.
12.9 SEVERABILITY. If any provision of this Agreement is held
invalid or unenforceable by an arbitrator or any court of competent
jurisdiction, the other provisions of this Agreement will remain in full
force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and
effect to the extent not held invalid or unenforceable.
12.10 SECTION HEADINGS; CONSTRUCTION. The headings of Sections in
this Agreement are provided for convenience only and will not affect its
construction or interpretation. All references to "Section" or
"Sections" refer to the corresponding Section or Sections of this
Agreement. All words used in this Agreement will be construed to be of
such gender or number as the circumstances require. Unless otherwise
expressly provided, the word "including" does not limit the preceding
words or terms.
12.11 TIME OF ESSENCE. With regard to all dates and time periods
set forth or referred to in this Agreement, time is of the essence.
12.12 GOVERNING LAW. This Agreement will be interpreted in
accordance with the internal, substantive laws of the State of Missouri
applicable to contracts executed and performed entirely within such
state.
12.13 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of
this Agreement and all of which, when taken together, will be deemed to
constitute one and the same agreement. Copies of executed
24
counterparts transmitted by telecopy, telefax or other electronic
transmission service shall be considered original executed counterparts
for purposes of this Section 12.13 provided that receipt of such copies
is confirmed.
12.14 WAIVER OF JURY TRIAL. ALL PARTIES TO THIS AGREEMENT HEREBY
WAIVE ANY RIGHT TO A JURY TRIAL IN ANY LITIGATION ARISING OUT OF OR WITH
RESPECT TO THIS AGREEMENT.
* * * * *
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THIS AGREEMENT CONTAINS BINDING ARBITRATION PROVISIONS WHICH MAY
BE ENFORCED BY THE PARTIES.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
BUYER: SELLER:
MAVERICK TUBE, L.P. EX-L-TUBE OF KANSAS, INC.
By: Maverick Tube Corporation,
its General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇ White
-------------------------------- --------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Name: ▇▇▇ White
Title: President Title: President