ASSET PURCHASE AGREEMENT
dated as of April 30, 2001
by and among
HUNTCO STEEL, INC., a Delaware corporation
HUNTCO INC., a Missouri corporation
and
ENRON INDUSTRIAL MARKETS LLC, a Delaware limited liability company
TABLE OF CONTENTS
1. PURCHASE AND SALE
1.1 Purchase and Sale
1.2 Excluded Assets
1.3 Definitions
1.4 Purchase Price
1.5 Assumed Contract Obligations
1.6 Excluded Liabilities
1.7 Exculpation
1.8 The Closing
1.9 Value Assigned to the Assets
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE STOCKHOLDER
2.1 Due Organization
2.2 Authorization
2.3 Capital Stock of the Company
2.4 Permits and Intangibles
2.5 Environmental Matters
2.6 Personal Property
2.7 Real Property
2.8 Contracts and Commitments
2.9 Collective Bargaining Agreements
2.10 Employee Obligations
2.11 Conformity with Law; Litigation
2.12 Taxes
2.13 No Violations; All Required Consents Obtained
2.14 Absence of Changes
2.15 Financial Statements
2.16 Bulk Transfer Laws
2.17 Sufficiency of Assets
2.18 Intentionally Deleted
2.19 Date Compliance
2.20 Bonds.
2.21 Disclosure
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER
3.1 Due Organization
3.2 Authorization
3.3 No Violations
3.4 Validity of Obligations
4. COVENANTS PRIOR TO CLOSING
4.1 Access and Cooperation; Due Diligence
4.2 Conduct of Business Pending Closing
4.3 Prohibited Activities
4.4 No Shop
4.5 Notification of Certain Matters
4.6 Positions Offered to Employees
4.7 Further Assurances
4.8 Notices and Consents
4.9 Commitment
5. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND THE STOCKHOLDER
5.1 Representations and Warranties; Performance of Obligations
5.2 Satisfaction
5.3 Consents and Approvals
5.4 Closing Documents
5.5 Opinion of Counsel
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
6.1 Representations and Warranties; Performance of Obligations
6.2 Master Purchase Agreement
6.3 No Adverse Changes
6.4 Satisfaction
6.5 Consents and Approvals
6.6 Instruments of Transfer and Title Insurance
6.7 Condition of the Business and Assets
6.8 Bonds and Tax Abatement Agreement
6.9 GECC Leases
6.10 Tolling Obligations
6.11 Closing of Business
6.12 Opinion of Counsel
7. POST-CLOSING COVENANTS
7.1 Future Cooperation
7.2 Expenses
7.3 Payment of Liabilities; Bulk Transfer Compliance
7.4 Access to Books and Records
7.5 Railroad Access Agreement
8. INDEMNIFICATION
8.1 Survival of Representations and Warranties
8.2 General Indemnification by the Company and the Stockholder
8.3 Indemnification by Purchaser
8.4 Specific Indemnification
8.5 Third Person Claims
8.6 Limitations on Indemnification
9. TERMINATION OF AGREEMENT
9.1 Termination
9.2 Liabilities in Event of Termination
10. GENERAL
10.1 Successors and Assigns
10.2 Entire Agreement
10.3 Counterparts
10.4 Notices
10.5 Governing Law
10.6 Survival of Representations and Warranties
10.7 Effect of Investigation
10.8 Exercise of Rights and Remedies
10.9 Time
10.10 Reformation and Severability
10.11 Captions
10.12 Press Releases and Public Announcements
10.13 No Third-Party Beneficiaries
10.14 Dispute Resolution
10.15 Waiver of Certain Damages
10.16 Schedules
SCHEDULES
1.1(a) - Tangible Personal Property and Equipment
1.1(b) - Real Property
1.1(c) - Vehicles
1.1(d) - Commonly Used Assets
1.2(a) - Survey Showing Excluded Assets
1.2(b) - Listed Excluded Tangible Personal Property
1.2(c) - Listed Excluded Software and Intellectual Property
1.2(d) - Excluded Vehicles
1.5 - Assumed Contracts
1.6 - Excluded Liabilities
1.9 - Value Assigned to the Assets
2.4 - Intangible Assets of the Stockholder Parties
2.5 - Environmental Matters
2.8 - Contracts and Commitments
2.11 - Conformity with Law; Litigation
2.12 - Taxes
2.13 - Listed Required Consents
2.14 - Absence of Changes
2.17 - Sufficiency of Assets
4.1 - Due Diligence Schedule
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of April 30, 2001 by and among ENRON INDUSTRIAL MARKETS LLC, a
Delaware limited liability company ("Purchaser"), HUNTCO STEEL, INC., a
Delaware corporation (the "Company"), and HUNTCO INC., a Missouri corporation,
as the indirect owner of all of the outstanding equity interests in the
Company (the "Stockholder").
WHEREAS, the Company is engaged in the business of operating a cold mill
steel processing plant, which includes without limitation, a pickling line, a
reversing cold reduction mill, annealing furnaces, and a tempering mill,
located west of ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇ near the City of Blytheville,
Arkansas (the "Business"), but excludes the Excluded Assets (as defined
below); and
WHEREAS, the Company is currently planning on closing the Business and
anticipates closing the Business prior to the Closing Date (as defined below);
and
WHEREAS, Purchaser desires to purchase, and the Company desires to sell,
the Business along with substantially all of the assets of the Company used in
the Business, whether owned by the Company, the Stockholder or any direct or
indirect subsidiary of the Stockholder (the Company, the Stockholder and any
such subsidiary being referred to individually herein as a "Stockholder Party"
and collectively as the "Stockholder Parties"), including the Commonly Used
Assets (as defined below), but excluding the Excluded Assets (as defined
below), all upon the terms and conditions set forth in this Agreement (the
"Transaction"); and
WHEREAS, Purchaser is only purchasing the assets as set forth herein,
and is not assuming any liabilities of the Company except for the Assumed
Contract Obligations (as defined below);
NOW, THEREFORE, in consideration of the premises and of the agreements
contained herein, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. PURCHASE AND SALE
1.1 Purchase and Sale. Upon the terms and subject to the conditions
of this Agreement, at the Closing (as defined below), the Company hereby
agrees to sell, convey, transfer, assign and deliver to Purchaser and
Purchaser hereby agrees to purchase from the Company, the assets described
below (collectively, the "Assets"), free and clear of all security interests,
liens, claims and encumbrances of any kind except as expressly noted below
with respect to the Equipment and Real Property:
(a) Tangible Personal Property and Equipment. Excluding the
Excluded Assets, and subject to any liens or security interests granted under
the Series 1992 Lease and the Series 1995 and 1996 Lease, all of the tangible
personal property on the Real Property (as defined below), including without
limitation (i) the tangible personal property identified on Schedule 1.1(a),
(ii) certain property currently subject to lease agreements (with such
properties to be separately noted on Schedule 1.1(a)), including without
limitation the GECC Leases (as defined below), and (iii) any other equipment,
cranes, machinery, tools, appliances, furniture, telephone systems, copy
machines, fax machines, implements, spare parts, supplies and other tangible
personal property used or useful in the Business (the "Equipment").
(b) Real Property. Subject to the Permitted Encumbrances (as
defined below), all of the real property, whether owned or leased, identified
on Schedule 1.1(b), including all improvements thereon and all of Company's
right, title and interest in and to all easements, tenements, hereditaments,
privileges and appurtenances in any way belonging to said real property (the
"Real Property").
(c) Vehicles. The vehicles, trailers and other transportation
equipment identified on Schedule 1.1(c).
(d) Goodwill. The goodwill of the Business.
(e) Intangible Assets. All right, title and interest of the
Stockholder Parties in, to and under all patents, trademarks, service marks,
technology, know-how, copyrights and applications used in connection with the
Business.
(f) Assumed Contracts. All right, title and interest of the
Stockholder Parties in, to and under (and subject to the terms and conditions
of) the existing contracts and agreements of the Stockholder Parties set forth
on Schedule 1.5 (the "Assumed Contracts"). The obligations assumed by the
Purchaser under the Assumed Contracts (the "Assumed Contract Obligations") are
more fully described in Section 1.5.
(g) Licenses, Franchises and Permits. All right, title and
interest of the Stockholder Parties in, to and under all transferable
licenses, franchises, permits, authorizations, certificates, approvals,
registrations and other governmental authorizations used in connection with
the Business (collectively, the "Governmental Approvals") relating to all or
any of the Assets.
(h) Computers and Software. Excluding the Excluded Computers and
Software (as defined below), all right, title and interest of the Stockholder
Parties in computer equipment and hardware used in connection with the Assets
or Business, including, without limitation, all central processing units,
terminals, disk drives, tape drives, electronic memory units, printers,
keyboards, screens, peripherals (and other input/output devices), modems and
other communication controllers, networking equipment, and any and all parts
and appurtenances thereto, together with all software and intellectual
property used by the Stockholder Parties with such computer equipment and
hardware.
(i) Books and Records. Copies of the Stockholder Parties'
books, records, papers and instruments of whatever nature and wherever located
that relate principally to the Assets or which Purchaser reasonably requests
in connection with Purchaser's use or proposed use of the Assets.
(j) Commonly Used Assets. All tangible and intangible real and
personal property used in connection with both the Business and the Excluded
Assets as listed on Schedule 1.1(d), as such schedule may be modified with the
agreement of the parties (the "Commonly Used Assets").
(k) Other Property. All other or additional privileges, rights,
interests, properties and assets of the Stockholder Parties not referred to
above (and not excepted from the sale) of every kind and description and
wherever located that (i) are located in, on or under or are appurtenant to
the Real Property and (ii) are used or intended for use in connection with, or
that are necessary to the continued conduct of, the Business as presently
conducted. Notwithstanding the foregoing, cash will not be transferred to
Purchaser.
1.2 Excluded Assets. The Company will not sell to Purchaser under this
Agreement and Company hereby retains, the assets described below
(collectively, the "Excluded Assets"):
(a) Tangible Personal Property and Equipment. The eastern most
Pickling Line located in the Pickling Building, which building is shown on the
survey attached hereto as Schedule 1.2(a), the tangible personal property
listed on Schedule 1.2(b) attached hereto and the tangible personal property
and equipment located within the Subleased Buildings (as defined below) which
are not Commonly Used Assets (the "Excluded E&TPP").
(b) Eastern Property. The land owned or leased by the Company
located east of ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇ near the City of Blytheville,
Arkansas, together with all improvements, equipment and personal property
located thereon and intangible personal property used in connection therewith,
but excluding any Commonly Used Assets (the "Eastern Property").
(c) Accounts and Notes Receivable. All of the accounts and
notes receivable of the Company.
(d) Excluded Inventory. All inventory owned by the Company or
any third party , including raw materials, work in progress and finished goods
existing as of the Closing Date (the "Excluded Inventory").
(e) Excluded Computers and Software. The computers, equipment,
software and intellectual property listed on Schedule 1.2(c) and any computer
equipment and hardware not located at the Real Property, including, without
limitation, all central processing units, terminals, disk drives, tape drives,
electronic memory units, printers, keyboards, screens, peripherals (and other
input/output devices), modems and other communication controllers, networking
equipment, and any and all parts and appurtenances thereto, together with all
software and intellectual property used by the Stockholder Parties with such
computer equipment and hardware (the "Excluded Computers and Software").
(f) Excluded Vehicles. The vehicles, trailers and other
transportation equipment identified on Schedule 1.2(d) (the "Excluded
Vehicles").
(g) Employees. All employment agreements or other rights to
employ the employees employed in connection with the Business as of the
Closing Date and the Stockholder Parties' rights, title, interests and
liabilities in or to any employee benefit plans, medical or dental plans, or
retirement plans maintained for such employees.
(h) Railroad Access Agreement. Seller's rights in that certain
Rail Access and Indemnification Agreement dated April 20, 1993, by and between
the Company and Nucor Corporation.
1.3 Definitions. As used in this Agreement, the following terms shall
have the following meanings (unless otherwise indicated, such meanings to be
equally applicable to both the singular and plural forms of the terms
defined):
"Bonds" means any bond or bonds authenticated and delivered under
and pursuant to either the Series ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ or the Series 1995 and 1996
Indenture, including the Series 1992 Bonds, the Series 1995 Bonds and the
Series 1996 Bonds, and any additional bonds issued pursuant to such
Indentures.
"City" means the City of Blytheville, a municipal corporation
organized and existing under the laws of the State of Arkansas.
"Closing Documents" means the Sublease, the final versions of all
of the schedules to this Agreement (even if preliminary versions are already
attached hereto) and all of the following documents in form and substance to
be agreed upon by the Company and the Purchaser:
(a) a completed Special Warranty Deed , covering the Real
Property owned in fee, if any, free and clear of all liens, security
interests, pledges, claims, conditional sales agreements, charges or
restrictions on transfer, encumbrances, or any other matter affecting the Real
Property whatsoever other than encumbrances and other matters affecting title
to the Real Property that Purchaser has waived in writing in its sole
discretion ("Permitted Encumbrances"),
(b) completed Assignment and Assumption of Lease Agreement(s),
covering the leased Real Property, executed by all necessary parties
(including the current lessor(s) of each parcel of Real Property currently
leased) , such that Purchaser will hold the lessee's leasehold estate under
such leases free and clear of all liens, security interests, pledges, claims,
conditional sales agreements, charges or restrictions on transfer,
encumbrances, or any other matter affecting the Real Property whatsoever other
than the Permitted Encumbrances and the rights running to the lessors under
such leases,
(c) a completed General Conveyance, Transfer, Assignment and
Assumption Agreement, covering the Business and all of the Assets,
(d) certificates of title to any Asset covered by a certificate
of title,
(e) such other instruments of transfer as may be reasonably
necessary or appropriate to vest in Purchaser good and indefeasible title to
the Business and the Assets, free and clear of any security interest, lien,
claim or encumbrance except as provided herein,
(f) an Owner's Policy of Title Insurance for each parcel of Real
Property owned by the Company or a Leasehold Policy of Title Insurance for
each parcel of Real Property leased by the Company, each (i) dated as of the
Closing Date, (ii) naming Purchaser as the insured party, (iii) issued by a
title company to be selected by Purchaser, (iv) in the face amount of the
allocated value as set forth on Schedule 1.9, of each parcel of Real Estate
owned by the Company or the value (as reasonably determined by Purchaser) of
the leasehold interest, as the case may be, (v) subject only to the Permitted
Encumbrances, (vi) in form customary for the locale in which the Real Property
is located; and
(g) a completed Operating and Maintenance Agreement covering the
operation of the Assets on behalf of Purchaser. If by May 15, 2001, Seller
and Purchaser are unable to agree on acceptable terms of an Operating and
Maintenance Agreement, Purchaser may enter into an Operating and Maintenance
Agreement with a third party, in which case the Company will not have the
right to approve the form or substance of the Operating and Maintenance
Agreement.
"ENA" means Enron North America Corp.
"Excluded Liabilities" means all Liabilities, other than Assumed
Contract Obligations, accruing from, related to, incurred in connection with
or secured by the Business or the Assets prior to the Closing, including, but
not limited to (a) the Liabilities set forth on Schedule 1.6; (b) any
Liabilities of any Stockholder Party other than the Assumed Contract
Obligations; (c) any act, omission, event, condition or circumstance involving
or relating to the Business or Assets occurring or existing before the Closing
Date; (d) the ownership or operation of the Business or Assets before the
Closing Date; (e) any brokers' or finders' fees or commissions arising with
respect to brokers or finders retained or engaged by any person other than
Purchaser and resulting from or relating to the transactions contemplated in
this Agreement; (f) any liability or obligation to employees or former
employees of any Stockholder Party or their beneficiaries arising from or
relating to the employment, severance or discharge (or constructive severance
or discharge) of such employees by such Stockholder Party, or arising from or
relating to their rights to receive benefits under any employee benefits plan
or any other employment agreement, contract or arrangement with any
Stockholder Party; (g) any Liabilities related to any disputes with third
parties, including any Governmental Authorities; and (h) all Liabilities
related to the Excluded Assets.
"GECC Leases" means collectively (a) that certain lease commencing
December, 1997, between GE Capital Business Asset Funding Corporation (as
successor to MetLife Capital) and Company pertaining to the lease by Company
of the New Delta Brands Push Pull Pickling Line and (b) that certain lease
commencing January, 1997, between General Electric Capital Corporation and
Company pertaining to the lease by Company of the ▇▇▇▇▇ Annealing Furnaces.
"Huntco Nevada" means Huntco Nevada, Inc., a subsidiary of
Stockholder.
"Liabilities" shall mean any and all direct or indirect demands,
claims, notices of violation, filings, investigations, administrative
proceedings, actions, causes of action, suits, other legal proceedings,
payments, charges, judgments, assessments, indebtedness, liabilities, damages,
deficiencies, penalties, fines, obligations, responsibilities, costs and
expenses paid or incurred, or diminutions in value of any kind or character
(whether or not asserted prior to the date hereof, and whether known or
unknown, fixed or unfixed, conditional or unconditional, based on negligence,
strict liability or otherwise, ▇▇▇▇▇▇ or inchoate, liquidated or unliquidated,
secured or unsecured, accrued, absolute, contingent or otherwise), including,
without limitation, penalties, interest on any amount payable to a third party
as a result of the foregoing and any legal or other expenses reasonably
incurred in connection with investigating or defending any claim, demand or
legal proceeding, whether or not resulting in any liability, and all amounts
paid in settlement of claims, demands, or legal proceedings.
"Master Purchase Agreement" means that certain Master Steel
Purchase and Sale Agreement dated as of April 6, 2001, between ENA and
Company.
"Railroad Access Agreement" means that certain Rail Access and
Indemnification Agreement dated April 20, 1993, between Nucor Corporation and
Company.
"Series 1992 Bondholder" means the registered owner of any Series
1992 Bond.
"Series 1992 Bonds" means the Industrial Development Revenue Bonds
(Huntco Steel, Inc. Project), Series 1992, of City issued in the initial
principal amount of $2,000,000 pursuant to the Series 1992 Indenture.
"Series 1992 Indenture" means the Trust Indenture dated as of June
1, 1992, between City and the Series 1992 Trustee, relating to the Bonds, as
supplemented by First Supplemental Trust Indenture dated as of August 17,
1993, and any indentures supplemental thereto.
"Series 1992 Lease" means that certain Lease Agreement dated as of
June 1, 1992, between City and Company, pertaining to the Real Property and
the "Leased Equipment" as described on Exhibit B thereto, as previously
amended and as may be amended from time to time.
"Series 1992 Trustee" means BNY Trust Company of Missouri, St.
Louis, Missouri, as Trustee, as successor to the initial trustee, ▇▇▇▇▇▇▇
Trust Company, Inc., Little Rock Arkansas, or any successor trustee under the
Series 1992 Indenture.
"Series 1995 Bonds" means the Taxable Industrial Development
Revenue Bonds (Huntco Steel, Inc. Project), Subordinate Series 1995, of City
issued pursuant to the Series 1995 and 1996 Indenture, authorized in the total
principal amount of not to exceed $30,000,000, as described in the Series 1995
and 1996 Indenture.
"Series 1996 Bonds" means the Taxable Industrial Development
Revenue Bonds (Huntco Steel, Inc. Project), Subordinate Series 1996, of City
issued pursuant to the Series 1995 and 1996 Indenture, authorized in the total
principal amount of not to exceed $12,000,000, as described in the Series 1995
and 1996 Indenture.
"Series 1995 and 1996 Indenture" means the Trust Indenture, dated
as of May 1, 1995, between City and Huntco Nevada, Inc., as Trustee, relating
to the Bonds, as supplemented by First Supplemental Trust Indenture dated as
of January 1, 1996, and any indentures supplemental thereto.
"Series 1995 and 1996 Lease" means that certain Lease Agreement,
dated as of May 1, 1995, between City and Company, pertaining to the Real
Property and the "Leased Equipment" as described on Exhibit B thereto, as
previously amended and as may be amended from time to time.
"Series 1995 and 1996 Trustee" means Huntco Nevada, Inc., and any
successor trustee under the Series 1995 and 1996 Indenture.
"Sublease" means the sublease to be executed by Purchaser, as
sublessor, and Company, as sublessee, in a form to be agreed upon by Purchaser
and Company, pertaining to (a) the sublease of the Subleased Land and the
Subleased Buildings subject to the Series 1992 Lease and the Series 1995 and
1996 Lease, (b) the non-exclusive right to use of the western most Pickling
Line located in the Pickling Building (which building is shown on the survey
attached hereto as Schedule 1.2(a)), subject to Purchaser's right to use such
line, (c) the right to leave the eastern most Pickling Line located in the
Pickling Building(which building is shown on the survey attached hereto as
Schedule 1.2(a)) in such building for a time period after Closing to be agreed
upon by the parties and use such line in such location, (d) the non-exclusive
use of the Commonly Used Assets and allocation of costs between Purchaser and
Company related thereto, and (e) certain services such as maintenance of the
Assets and railroad transportation and access to be provided by Company to
Purchaser.
"Subleased Buildings" means the two buildings labeled Stamping
Plant and CTL/Slitter Building on the survey attached hereto as
Schedule 1.2(a) (the "Subleased Buildings")
"Subleased Land" shall mean only the land directly under the
Subleased Buildings and such other areas for parking and coil storage as are
agreed to by the parties.
"Tax Agreement" means that certain Agreement For Payments In Lieu
of Taxes dated as of March 15, 1994, between City and Company, as amended by a
document dated as of December 19, 1995, between City and Company.
"Transaction Documents" has the meaning given such term in the
Master Purchase Agreement.
1.4 Purchase Price. The aggregate purchase price for the Assets (the
"Purchase Price") shall be Seventeen Million Dollars ($17,000,000) less the
sum of the outstanding principal and accrued interest on the Series 1992 Bonds
as of the Closing Date which has not already been escrowed with the Series
1992 Trustee.
At the Closing, the Purchaser shall pay the Purchase Price to the
title company providing the Owner's Policy of Title Insurance for payment to
the Company and the creditors that need to be paid in connection with the
Closing, by wire transfer pursuant to instructions provided to the Purchaser.
At the Closing, all ad valorem taxes relating to the Assets for the calendar
year in which the Closing Date occurs shall be prorated between Company and
Purchaser as of the Closing Date, based upon the best available estimates of
the amount of taxes that will be due and payable on the Assets during the
calendar year in which the Closing Date occurs. If such taxes have not yet
been paid, Company shall pay to Purchaser in cash at the Closing or credit
against the Purchase Price, Company's pro rata portion of such estimated
taxes. If such taxes have already been paid, Purchaser shall pay to Company in
cash at the Closing, Purchaser's pro rata portion of such taxes. Within
thirty (30) days of the date the amount of taxes on the Property for such year
is known, Company and Purchaser shall readjust the amount of taxes to be paid
by each party with the result that Company shall pay for those taxes
attributable to the period of time prior to the Closing Date.
1.5 Assumed Contracts. At the Closing, Purchaser shall assume the
obligations of the Company under the Assumed Contracts set forth on Schedule
1.5 hereto which are scheduled to be performed after the Closing Date, but
shall not assume or otherwise become liable (a) for any liability or
obligation under the Assumed Contracts that Company was required to perform,
or which was incurred or existed or resulted from an act or event occurring on
or prior to the Closing Date, (b) for any liability or obligation that arises
under the Assumed Contracts with respect to a breach or default prior to the
Closing Date, or (c) for any other liability or obligation whatsoever.
1.6 Excluded Liabilities. All Excluded Liabilities are expressly
excluded from the Assets purchased and sold hereunder and the Assumed
Contracts assumed hereunder, and Purchaser shall not assume or otherwise
become liable for any such Liability whatsoever in connection therewith. The
Company and the Stockholder agree that they shall remain solely responsible
for the Excluded Liabilities.
1.7 Exculpation. Except for the Assumed Contract Obligations,
Purchaser does not assume or agree to pay, perform or discharge, and shall not
be responsible for, any other Liabilities of the Company or the Stockholder,
or any affiliate of any of them, whether accrued, absolute, contingent or
otherwise.
1.8 The Closing. The Closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇, L.L.P., ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, commencing
at 9:00 a.m. local time on the date seven (7) days following the date of
expiration of the Inspection Period (or such other date as may be agreed upon
by the parties) following the satisfaction or waiver of all conditions to the
obligations of the parties to consummate the transactions contemplated hereby
(other than conditions with respect to actions the respective parties will
take at the Closing itself) or such other date as the parties may mutually
determine (the "Closing Date").
1.9 Value Assigned to the Assets. The Purchase Price shall be
allocated among the Assets as set forth on Schedule 1.9 hereto for all
federal, state and local tax purposes. Purchaser, the Company and the
Stockholder agree that they shall not take any position or action inconsistent
with such allocation in the filing of any federal income or other tax returns.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE STOCKHOLDER
The Company and the Stockholder jointly and severally represent and
warrant to Purchaser as follows:
2.1 Due Organization. The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware
and has full power and authority to carry on its business as it is now being
conducted. The Stockholder is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Missouri and has
full power and authority to carry on its business as it is now being
conducted. Each of the Company and the Stockholder is duly authorized or
qualified to do business and is in good standing in each jurisdiction in which
the nature of its business or the ownership or leasing of its properties makes
such qualification necessary, except where the failure to be so authorized or
qualified would not (i) have any material adverse change in the condition
(financial or otherwise), Assets or Business, or (ii) impair the ability of
the Company or the Stockholder to perform on a timely basis its obligations
under this Agreement or the consummation of the Transaction contemplated by
this Agreement.
2.2 Authorization. (i) The representatives of the Company and the
Stockholder executing this Agreement have full power and authority to execute
and deliver this Agreement and (ii) each of the Company and the Stockholder
has full corporate power and authority to enter into this Agreement and the
Transaction. This Agreement and the Transaction have been approved by Huntco
Nevada and the Stockholder and approved by the boards of directors of Huntco
Nevada, the Company and the Stockholder, and does not require the approval of
the stockholders of the Stockholder. This Agreement has been validly executed
and delivered by the Company and the Stockholder and constitutes the legal,
valid and binding obligation of each of them enforceable in accordance with
its terms, except as may be limited by bankruptcy, insolvency, reorganization
or similar laws now or hereafter in effect relating to creditors' rights
generally.
2.3 Capital Stock of the Company. The authorized capital stock of the
Company consists solely of shares of common stock (the "Company Stock"). All
of the shares of the Company Stock are owned of record and beneficially by
Huntco Nevada free and clear of all voting trusts, voting agreements, proxies
and voting restrictions of any kind except for liens and security interests
granted pursuant to the Transaction Documents. All of the shares of the common
stock and any preferred stock of Huntco Nevada are owned of record and
beneficially by the Stockholder free and clear of all voting trusts, voting
agreements, proxies and voting restrictions of any kind except for liens and
security interests granted pursuant to the Transaction Documents.
2.4 Permits and Intangibles. Schedule 2.4 sets forth an accurate list
of all licenses, permits and other governmental authorizations, franchises and
titles owned or held by any of the Stockholder Parties that relate, directly
or indirectly, to the Assets or the Business (including licenses, franchises,
certificates, trademarks, trade names, patents, patent applications and
copyrights owned or held by any of the Stockholder's employees that relate,
directly or indirectly, to the Assets or the Business (including interests in
software or other technology systems, programs and intellectual property)),
and the Stockholder Party or employee who owns or holds such item.
Collectively, the items on Schedule 2.4 are referred to as the "Intangible
Assets" (it being understood and agreed that a list of all environmental
permits and other environmental approvals is set forth on Schedule 2.5). The
Company is not infringing on any Intangible Assets owned by the Stockholder
or, to its knowledge, by any third party, and to the Company's knowledge,
neither the Stockholder nor any third party is infringing on any Intangible
Assets owned by the Company. The Intangible Assets and other governmental
authorizations listed on Schedules 2.4 and 2.5 are valid or enforceable as the
case may be. The Company has not received any notice that any person intends
to cancel, terminate or not renew any such Intangible Assets or other
governmental authorization. The Company has conducted and is conducting the
Business in compliance with the requirements, standards, criteria and
conditions set forth in the Intangible Assets and other governmental
authorizations listed on Schedules 2.4 and 2.5 and is not in violation of any
of the foregoing. Except for the Excluded Assets and as specifically set
forth on Schedule 2.4 or 2.5, all of the rights of and benefits afforded to
the Company by any such Intangible Assets or other governmental authorizations
are transferable to the Purchaser and are being transferred to the Purchaser
on the Closing Date.
2.5 Environmental Matters. Except as set forth on Schedule 2.5, the
Company is in compliance with all federal, state, local and foreign statutes,
laws, ordinances, regulations, rules, notices, permits, judgments, orders and
decrees applicable to the Business relating to environmental protection
(collectively "Environmental Laws") including, without limitation,
Environmental Laws relating to air, water, land and the generation, storage,
use, handling, transportation, treatment or disposal of Hazardous Wastes,
Hazardous Materials and Hazardous Substances including petroleum and petroleum
products (as such terms are defined in any applicable Environmental Law)
(collectively referred to herein as "Hazardous Substances"). The Company has
obtained and adhered to all necessary permits and any and all other approvals
required pursuant to Environmental Laws for the Business, a list of all of
which permits and approvals is set forth on Schedule 2.5. The Company has
reported to the appropriate authorities, to the extent required by any
Environmental Law, the treatment, storage, disposal of, transportation or
otherwise handling of Hazardous Substances in connection with the Business.
Except as set forth on Schedule 2.5, there have been no releases or threats of
releases (as defined in Environmental Laws) at, from, in, to, under or on any
Real Property, other than such releases permitted by Environmental Laws.
There is no on-site or off-site location to which the Company has transported
or disposed of Hazardous Substances from the Business or arranged for the
transportation or disposal of Hazardous Substances from the Business which, to
Company's knowledge, is the subject of any federal, state, local or foreign
enforcement action or any other investigation which could lead to any claim
against Purchaser for any clean-up cost, remedial work, damage to natural
resources, property damage or personal injury, including, but not limited to,
any claim under (i) the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, (ii) the Resource Conservation and Recovery
Act, as amended, (iii) the Hazardous Materials Transportation Act, as amended
or (iv) comparable state or local statutes and regulations. The Company has
no contingent liability in connection with any release of any Hazardous
Substance into the environment in connection with the Business.
2.6 Personal Property. Except for the Excluded Assets, Schedule
1.1(a) sets forth an accurate list of (a) all tangible personal property owned
by any of the Stockholder Parties and used in connection with the Business and
who the particular owner is and (b) a list of all operating leases of personal
property used in connection with the Business. Except for the Excluded Assets,
all (i) tangible personal property used by the Company in the Business is
either owned by the Company or leased by the Company pursuant to a lease
included on Schedule 1.1(a), (ii) the tangible personal property included on
Schedule 1.1(a), taken as a whole, is in good working order and operating
condition, ordinary wear and tear excepted, so as to render the facilities
operable and able to perform in the ordinary course of business, and (iii)
leases and agreements included on Schedule 1.1(a) are in full force and
effect, are not subject to any default and constitute valid and binding
agreements of the parties (and their successors) thereto in accordance with
their respective terms. The Company has good and marketable title to all
owned tangible and intangible personal property included in the Assets, free
and clear of all liens (other than personal property subject to operating
leases, liens for personal property taxes not yet due and payable, liens and
security interests under the Series 1992 Lease and the Series 1995 and 1996
Lease, and liens to be discharged by the Company at Closing), security
interests, pledges, claims, conditional sales agreements, charges or
restrictions on transfer (other than restrictions on transfer noted on
Schedule 1.1(a)), encumbrances, or any other matter affecting the personal
property whatsoever.
2.7 Real Property. The Real Property described in Schedule 1.1(b)
sets forth an accurate list of all real property owned or leased by any
Stockholder Party used in the conduct of the Business, but specifically
excluding the Eastern Property. Company is the lessee under both the Series
1992 Lease and the Series 1995 and 1996 Lease. The Company has good and
marketable title to any owned Real Property. All Real Property, whether owned
or leased, is free and clear of all liens, security interests, pledges,
claims, conditional sales agreements, charges or restrictions on transfer,
encumbrances, or any other matter affecting the Real Property whatsoever
(other than liens for real estate taxes not yet due and payable, liens to be
discharged by the Company at Closing, liens and security interests under the
Series 1992 Lease and the Series 1995 and 1996 Lease, and the liens and
security interests securing the Bonds); provided, however, Permitted
Encumbrances shall not be deemed to violate the terms of this Section 2.7. The
Company has provided the Purchaser with true, complete and correct copies of
all leases included on Schedule 1.1(b), the Tax Agreement and the Railroad
Access Agreement. All of such leases and agreements are in full force and
effect and constitute valid and binding agreements of the parties (and their
successors) thereto in accordance with their respective terms, no defaults
have occurred under such leases or agreements, and no events or omissions have
occurred which, but for the passing of time or giving of notice or both, would
be a default under such leases or agreements, on the part of Company or any
other party to any of such leases or agreements.
2.8 Contracts and Commitments. Schedule 2.8 sets forth an accurate
list of all contracts, commitments and similar agreements related or
pertaining to the Business or by which any of the Assets are bound. Except as
described on Schedule 2.8, (a) the Company has complied in all material
respects with all commitments and obligations pertaining to the Business or
Assets, is not in default and has no knowledge of any matter which with
notice, the passage of time or both would constitute a default under any
contracts or agreements listed on Schedule 2.8, and no notice of default under
any such contract or agreement has been received and (b) no party has canceled
or substantially reduced or, to the knowledge of the Company, is currently
attempting or threatening to cancel or substantially reduce the scope of any
such contract or agreement. Except as specifically set forth on Schedule 2.8,
(a) the Transaction will not result in a default under or a breach or
violation of, or adversely affect the rights and benefits afforded to the
Company by, any of the Assumed Contracts, and (b) all of the rights and
benefits under all of the Assumed Contracts are transferable to the Purchaser
and will be transferred to the Purchaser as of the Closing Date.
2.9 Collective Bargaining Agreements. The Company is not a party to
or obligated under any collective bargaining or similar agreement.
2.10 Employee Obligations. Except as set forth in Section 4.6 hereof,
the Purchaser will not, as a result of its purchase of the Assets or
consummation of the Transaction, upon such consummation at any time
thereafter, incur any liability or obligation of any nature whatsoever on
behalf of any employee or former employee of the Company relating to any
period prior to or after the Closing, including, but not limited to, any
obligation arising under the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), any liability, including, but not limited to, withdrawal
liability, to any multi-employer or employee pension benefit plan under ERISA
or any other federal, state or local statute regulation.. The Purchaser and
the Company acknowledge that the Purchaser is not obtaining or assuming any
right or interest in the existing employee benefit plans maintained by or on
behalf of the Company.
2.11 Conformity with Law; Litigation. Except as set forth on Schedule
2.11 there are no claims, actions, suits or proceedings, pending or, to the
knowledge of the Company, threatened against or affecting the Business or any
of the Assets, at law or in equity, or before or by any federal, state,
municipal or other governmental department, commission, board, bureau, agency
or instrumentality having jurisdiction over the Business or any of the Assets.
Except as set forth on Schedule 2.11 no notice of any claim, action, suit or
proceeding, whether pending or threatened, pertaining to the Business or any
of the Assets has been received by the Company during the last two years and,
to the knowledge of the Company, there is no basis therefor. Except as set
forth on Schedule 2.11 the Company has conducted the Business for the past two
years and now conducts the Business in material compliance with all laws,
regulations, writs, injunctions, decrees and orders of governmental
authorities applicable to the Business or the Assets. The Company and the
other Stockholder Parties are not in material violation of any law or
regulation or any order of any court or federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality
having jurisdiction over any of them that could materially and adversely
impact the Business or the Purchaser's use of any of the Assets on and after
the Closing Date. The Company and the other Stockholder Parties have
conducted and are conducting the Business in material compliance with the
requirements, standards, criteria and conditions set forth in applicable
federal, state and local statutes, ordinances, permits, licenses, orders,
approvals, variances, rules and regulations, including the Governmental
Approvals and all such permits, licenses, orders and other governmental
approvals set forth on Schedules 2.4 and 2.5.
2.12 Taxes. For purposes of this Agreement, the term "Taxes" shall
mean all taxes, charges, fees, levies or other assessments including, without
limitation, income, gross receipts, excise, property, sales, withholding,
social security, unemployment, occupation, use, service, license, payroll,
franchise, transfer and recording taxes, fees and charges, imposed by the
United States or any state, local or foreign government or subdivision or
agency thereof, whether computed on a separate, consolidated, unitary,
combined or any other basis; and such term shall include any interest, fines,
penalties or additional amounts attributable to or imposed with respect to any
such taxes, charges, fees, levies or other assessments. The Company and the
other Stockholder Parties have timely filed all requisite federal, state and
other tax returns or extension requests for all fiscal periods ended on or
before the Closing Date. Except as set forth on Schedule 2.12, there are no
examinations in progress or pending claims against the Company or the other
Stockholder Parties for federal, state or other taxes (including penalties and
interest) and no notice of any claim for taxes, whether pending or threatened,
has been received. All tax, including interest and penalties (whether or not
shown on any tax return) owed by the Company, any member of an affiliated or
consolidated group which includes or included the Company has been paid. The
amounts shown as accruals for Taxes on the Financial Statements (as defined
below) are correct. The Company uses the accrual method of accounting for
income tax purposes, and the Company's methods of accounting have not changed
in the past three years. The Company is not an investment company as defined
in Section 351(e)(1) of the Internal Revenue Code of 1986, as amended, and any
successor statute.
2.13 No Violations; All Required Consents Obtained. The Company is not
in violation of its Articles of Incorporation or Bylaws, each as amended to
date ("Charter Documents"), nor is it or any of the other Stockholder Parties
in default under any of the Assumed Contracts, nor does it have knowledge of
any matter which with notice, the passage of time or both would constitute a
default under any of the Assumed Contracts. The execution of this Agreement
by the Company and the performance by the Company of its obligations hereunder
and the consummation of the transactions contemplated hereby will not result
in any violation or breach or constitute a default under any of the terms or
provisions of the Charter Documents. Notwithstanding anything contained in
this Agreement to the contrary, except for those consents set forth in
Schedule 2.13 attached hereto (the "Listed Required Consents"), no consents
are required in connection with the closing of the Transaction.
2.14 Absence of Changes. Since March 31, 2001, the Company has
conducted its operations in the ordinary course of business and, except as set
forth on Schedule 2.14 there has not been:
2.14.1.1 any adverse change affecting any of the Assets or the
Business;
2.14.1.2 any plan, agreement or arrangement granting any preferential
rights to purchase or acquire any interest in any of the assets,
property or rights of the Company or requiring consent of any
party to the transfer and assignment of any such assets,
property or rights;
2.14.1.3 any acceleration, termination, modification or cancellation
by any party (including the Company, management of the Company
and the Stockholder) of any agreement, contract, lease or
license (or series of related agreements, contracts, leases and
licenses) related to or pertaining to the Business or the Assets
and involving more than $5,000;
2.14.1.4 any damage, destruction or loss (whether or not covered by
insurance) to any of the Assets; or
2.14.1.5 any other occurrence, event, incident, action, failure to
act or transaction outside the ordinary course of business
involving any of the Assets.
2.15 Financial Statements. The Stockholder has provided to the
Purchaser complete and correct copies of the Stockholder's audited,
consolidated financial statements dated as of December 31, 1999, its
unaudited, unadjusted consolidated and consolidating financial statements at
and for the twelve months ended December 31, 2000, as well as its unaudited,
unadjusted consolidated and consolidating financial statements at and for the
months ended January 2001 and February 2001, as well as its unaudited
consolidated financial statements at and for the three and nine months ended
September 30, 2000 included within Stockholder's Quarterly Report on Form 10-
Q. Such financial statements include the balance sheet as of such respective
date, and the related statements of operations, cash flows and changes in
shareholders' equity for the periods then ended. These financial statements
are accurate and complete in all material respects, subject to year end
accounting adjustments applicable to the financial statements at and for the
year ended December 2000, the reciprocal adjustments stemming from such
potential adjustments that may impact the financial statements at and for the
periods ended January and February 2001, and those obligations and commitments
under the Transaction and the Transaction Documents, and present fairly
(subject to the above-referenced potential adjustments) the financial
condition of Stockholder and such consolidated parties as of such date in
accordance with generally accepted accounting principles.
As of the date of the aforementioned financial statements, there were no
material contingent obligations, liabilities for taxes, unusual forward or
long-term commitments, or unrealized or anticipated losses of the Stockholder
Parties, except as disclosed in such financial statements and those
obligations and commitments under the Transaction and the Transaction
Documents, and adequate reserves for such items have been made in accordance
with generally accepted accounting principles.
2.16 Bulk Transfer Laws. The consummation of the Transaction shall not
result in any claims, losses, demands, damages, liabilities, losses, costs and
expenses under the bulk transfer provisions of the Uniform Commercial Code (or
any similar law).
2.17 Sufficiency of Assets. Except for those assets on Schedule 2.17
attached hereto, the Assets constitute all of the assets, properties and
rights necessary to operate the Business, as it is presently conducted by the
Company.
2.18 Intentionally Deleted.
2.19 Date Compliance. To the best of Company's knowledge and belief,
the computer-based systems used in connection with the Business are able to
operate and effectively process data that includes dates on and after
January 1, 2000.
2.20 Bonds. The Company or the Stockholder has provided Purchaser
with true and correct copies of all material agreements executed in connection
with the Bonds, including without limitation the Series ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and the
Series 1995 and 1996 Indenture. All of the Series 1995 Bonds and Series 1996
Bonds are held by Huntco Nevada. The trustee under the Series 1995 and 1996
Indenture is the Series 1995 and 1996 Trustee. To the best of Company's
knowledge and belief, all of the Series 1992 Bonds are held by Arkansas
Teachers' Retirement System. The trustee under the Series ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ is
the Series 1992 Trustee. The outstanding principal amount of the 1992 Series
Bonds consists of $255,000 of 6.5% bonds due June 1, 2002 and $175,000 of
bonds due June 1, 2001 of which the Company has funded approximately
$158,000into escrow with the Series 1992 Trustee towards such June 1, 2001
maturity as of March 31, 2001.
2.21 Disclosure. The Company or the Stockholder has provided Purchaser
with all material information pertaining to the Business and Assets and all
the information that Purchaser has requested in analyzing whether to
consummate the transactions contemplated hereby. None of the information so
provided nor any representation or warranty of the Company or the Stockholder
contained in this Agreement contains any untrue statement of a material fact
or omits to state any material fact necessary in order to make the statements
herein or therein, in light of the circumstances under which they were made,
not misleading. There is no material fact known to any Stockholder Party on
the date of this Agreement that has not been disclosed to Purchaser which
could reasonably be expected to cause a material adverse change in the overall
business, condition (financial or otherwise) or prospects of the Business or
Assets; provided, however, that Purchaser acknowledges that prior to the
Closing the Company will shut down the Business and neither the Company nor
any of the other Stockholder Parties make any representations about what will
be required to re-start the operation of the Business. The Company
acknowledges and agrees that the Company intends to shut down the Business
regardless of whether the Transaction closes or not.
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Company and Stockholder that all of
the following representations and warranties in this Section 3 are true at the
date of this Agreement and will be true at the time of Closing.
3.1 Due Organization. Purchaser is a limited liability company duly
organized, validly existing and in good standing under the laws of the state
of Delaware and has the requisite power and authority to carry on its business
as it is now being conducted.
3.2 Authorization. (i) The representatives of the Purchaser executing
this Agreement have full power and authority to execute and deliver this
Agreement and (ii) the Purchaser has full power and authority to enter into
this Agreement and the Transaction. This Agreement and the transactions
contemplated hereby have been approved by the Purchaser, and do not require
the approval of the sole member of Purchaser. This Agreement has been validly
executed and delivered by the Purchaser and constitutes its legal, valid and
binding obligation, enforceable in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization or similar laws now or
hereafter in effect relating to creditors' rights generally. All other
documents to be executed and delivered to Company by Purchaser, when so
executed and delivered, will constitute the valid, legal and binding
obligations of Purchaser, enforceable in accordance with their respective
terms, except as may be limited by bankruptcy, insolvency, reorganization or
similar laws now or hereafter in effect relating to creditors' rights
generally.
3.3 No Violations. The execution of this Agreement, the other
agreements and documents required to be executed by Purchaser, and the
performance of the obligations hereunder and the consummation of the
transactions contemplated hereby will not result in any violation or breach or
constitute a default under any of the terms or provisions of the Certificate
of Incorporation, the Bylaws or any other agreement of Purchaser.
3.4 Validity of Obligations. The execution and delivery of this
Agreement by Purchaser, the execution of the other agreements and documents
required to be executed by Purchaser, and the performance of the transactions
contemplated herein have been duly and validly authorized by the Board of
Directors of Purchaser and this Agreement has been duly and validly authorized
by all necessary corporate action and is, or when so executed and delivered
will be, the legal, valid and binding obligation of Purchaser.
4. COVENANTS PRIOR TO CLOSING
4.1 Access and Cooperation; Due Diligence. Between the date of this
Agreement and the date which is the earlier of (a) sixty (60) days following
the date of this Agreement and (b) the date fourteen (14) days following the
receipt and/or completion, as applicable, by Purchaser of the due diligence
matters described in this Section 4.1 (the "Inspection Period"), the Company
and the Stockholder will afford to the officers and authorized representatives
of Purchaser reasonable access to all of the Stockholder Parties' properties,
books and records related to the Business and the Assets and will furnish
Purchaser with such additional financial and operating data and other
information as to the Business and Assets as follows:
4.1.1.1 during the Inspection Period the Company and the Stockholder
will permit Purchaser and its agents and contractors to have
access to all Assets and the Business for the purpose of (a)
conducting environmental site assessments, including, but not
limited to, such soil and/or groundwater sampling and analysis
as may be deemed appropriate by Purchaser and otherwise
evaluating potential compliance and liability matters under
applicable Environmental Laws (collectively, the "Environmental
Review"), and (b) to review and conduct due diligence with the
matters set forth on Schedule 4.1 attached hereto. For those
matters set forth on Schedule 4.1 attached hereto that are in
the possession of a Stockholder Party and have not yet been
provided to the Purchaser, the Company will cause such matters
to be delivered to the Purchaser as soon as practical following
the date of this Agreement. The Company and the Stockholder
represent and warrant that (a) for those matters set forth on
Schedule 4.1 that have been denoted "None", that no such matters
exist with respect to the Assets or Business and (b) for those
matters set forth on Schedule 4.1 that have been denoted
"Already Provided" the Company has already provided to the
Purchaser all such matters related to the Assets or Business.
When the Company has provided all of the matters on Schedule 4.1
that the Company is responsible for delivering to the Purchaser
the Company shall give the Purchaser written notice that the
Company has completed such deliveries. The Purchaser shall have
five (5) days from receipt of such letter to object in writing
to the Company if the Purchaser believes that assertion is
incorrect.
4.1.1.2 Within fifteen (15) days following the date of this Agreement,
the Company shall deliver to Purchaser, at the Company's sole
cost and expense, (a) a current Commitment for Title Insurance
covering the Real Property meeting the requirements of Section
1.3 (the "Title Commitment"), together with correct and legible
copies of all instruments referred to in the Title Commitment as
conditions or exceptions to title to the Real Property,
including but not limited to liens, easements and recorded
plats; and (b) a current survey of the Real Property which shall
(i) establish and stake all exterior corners and peripheral
boundary lines (courses and distances) of the Real Property;
(ii) contain a metes and bounds description of the Real
Property; (iii) have all fences, drainage ditches, encroach-
ments, visible rights-of-way, creek beds, and easements and
rights-of-way of record drawn on the survey plat showing the
width and location thereof, and where applicable reference
thereto by recording data; (iv) have all structures and
improvements located on the Real Property drawn and located on
the survey plat; (v) show the location of all public road
rights-of-way adjoining the Real Property as they are paved on
the ground, as they are dedicated of record, or otherwise as
located; (vi) show all matters reflected in the Title Com-
mitment; (vii) show the location of all 500 year and 100 year
flood plains or flood zones, if any, encumbering the Real
Property; (viii) contain a certification acceptable to Purchaser
and (ix) otherwise be in form and substance which is customary
for the location of the Real Property and acceptable for the
issuance of the title insurance contemplated by this Agreement.
4.1.2 During the Inspection Period, the Company and the Stockholder will
negotiate in good faith the forms of the Closing Documents; provided, however,
that the Closing Documents must be acceptable to the parties executing such
documents in such parties' sole discretion. The Company and the Stockholder
will cooperate with Purchaser, its representatives, auditors and counsel in
the preparation of any other documents or other material which may be required
in connection with the transactions contemplated by this Agreement.
4.1.3 Purchaser shall deliver written notice to Company of the date
Purchaser has completed the Purchaser's due diligence review of the matters
described in this Section 4.1. During the Inspection Period, the Purchaser
shall have the option to terminate this Agreement if the Purchaser is not
satisfied for any reason with the results or information obtained or provided
in connection with the Environmental Review or any of the matters set forth on
Schedule 4.1, which such option to terminate and satisfaction shall be in the
Purchaser's sole discretion. In consideration of this option to terminate and
Company's and Stockholder's execution of this Agreement, Purchaser shall
deliver to Company, contemporaneously with the execution of this Agreement,
Purchaser's check in the amount of Fifty and No/100 ($50.00) ("Independent
Option Consideration"), which amount the parties bargained for and agreed to
as consideration for Company's and Stockholder's execution and delivery of
this Agreement and Purchaser's option to terminate. The Independent Option
Consideration is in addition to and independent of any other consideration or
payment provided for in this Agreement, is non-refundable, and shall be
retained by Company, notwithstanding any other provision of this Agreement, or
whether the purchase and sale contemplated herein is closed; provided that,
should the purchase and sale contemplated herein close the Independent Option
Consideration will be credited against the Purchase Price payable at Closing.
In the event that Purchaser delivers written notice to Company within the In-
spection Period that Purchaser desires to terminate this Agreement as provided
above, this Agreement shall terminate. In addition, in the event Purchaser
has not terminated this Agreement by written notice to the Company within the
Inspection Period, it shall be conclusively presumed that Purchaser has
elected Purchaser's option to terminate this Agreement pursuant to the
provisions of this Section 4.1. Only if Purchaser provides written notice of
Purchaser's election to not terminate this Agreement pursuant to the
provisions of this Section 4.1 (which notice would contain an express waiver
of the Purchaser's termination right under this Section 4.1.3), shall this
Agreement not terminate.
4.2 Conduct of Business Pending Closing. Between the date of this
Agreement and the Closing Date, the Company and the Stockholder covenant that
the Company will:
4.2.1.1 close the Business as provided in Section 6.11;
4.2.1.2 maintain the Assets in the same manner as it has heretofore;
4.2.1.3 perform all of its obligations in all material respects under
agreements materially or directly relating to or affecting the
Assets or the Business;
4.2.1.4 use all reasonable efforts to keep in full force and effect
present insurance policies or other comparable insurance
coverage covering any of the Assets;
4.2.1.5 subject to the closing of the Business, use its reasonable
efforts to maintain and preserve its business relationships with
suppliers, customers, and others having business relations with
the Business;
4.2.1.6 maintain compliance with all permits, laws, rules and
regulations, consent orders, and all other orders of applicable
courts, regulatory agencies and similar governmental authorities
necessary for the ongoing conduct of the Business;
4.2.1.7 use its best efforts to obtain all necessary third party
consents to assign the Assumed Contracts to Purchaser, including
without limitation the Series 1992 Lease and the Series 1995 and
1996 Lease.
4.3 Prohibited Activities. Between the date hereof and the Closing
Date, the Company and the Stockholder covenant that the Company will not,
without prior written consent of Purchaser, which consent shall not be
unreasonably withheld:
4.3.1.1 make any change in its articles or certificate of incorporation
or by-laws;
4.3.1.2 except for Transaction Documents, issue any securities, options,
warrants, calls, conversion rights or commitments relating to
its securities of any kind;
4.3.1.3 create, assume or permit to exist any mortgage, pledge or other
lien or encumbrance upon any of the Assets or the Business
(other than pursuant to any Transaction Documents, personal
property subject to operating leases, liens for personal
property taxes not yet due and payable, liens and security
interests under the Series 1992 Lease and the Series 1995 and
1996 Lease, and liens to be discharged by the Company at
Closing);
4.3.1.4 sell, assign, lease or otherwise transfer or dispose of any of
the Assets, except for the sale of inventory in the ordinary
course of business;
4.3.1.5 merge or consolidate or agree to merge or consolidate with or
into any other corporation or other entity, except for the
dissolution of the Company's wholly-owned subsidiary, HSI
Aviation, Inc., into the Company at the Company's election;
4.3.1.6 except for Transaction Documents, enter into any other
transaction outside the ordinary course of its business or
prohibited hereunder; or
4.3.1.7 except for Transaction Documents, purchase or enter into any
commitments to purchase inventory, except in the ordinary course
of business.
4.4 No Shop. Neither the Stockholder, the Company, nor any agent,
officer, director, trustee or any representative of any of the foregoing will,
during the period commencing on the date of this Agreement and ending with the
earlier to occur of the Closing Date or the termination of this Agreement in
accordance with its terms, directly or indirectly or in any manner whatsoever
(including, without restriction, through any representative or otherwise
through any affiliate or subsidiary or through any agency, trust or nominee
arrangement):
4.4.1.1 solicit or initiate the submission of proposals or offers from
any person pertaining to, or
4.4.1.2 enter into or agree to enter into any binding agreement with
any party other than Purchaser or ENA with respect to, or
4.4.1.3 participate in any discussions pertaining to, or
4.4.1.4 furnish any information to any person other than Purchaser or
its authorized agents relating to (other than as necessary to
fulfill the Company's duties under this Agreement),
any acquisition, purchase or finance of any of the Assets or Business. Company
will immediately notify Purchaser regarding any contact between any
Stockholder Party or its representatives and any other person regarding any
such offer or proposal or any related inquiry. For any breach of this Section
4.4, Purchaser shall be entitled to all equitable and injunctive relief
available under applicable laws.
4.5 Notification of Certain Matters. The Purchaser, on the one hand,
and the Company and the Stockholder, on the other hand, shall give prompt
notice to the other of (i) the occurrence or non-occurrence of any event the
occurrence or non-occurrence of which would be likely to cause any
representation or warranty of such party contained herein to be untrue or
inaccurate at or prior to the Closing and (ii) any failure of such party to
comply with or satisfy any covenant, condition or agreement to be complied
with or satisfied by such person hereunder, and (iii) any matter which if
known at the date of this Agreement would have required an addition to or
correction of any Schedule hereto. In the event the Company or the
Stockholder delivers any such notice to the Purchaser, Purchaser shall have
the right to terminate this Agreement within ten (10) business days after its
receipt of such notice. In the event that the Purchaser delivers any such
notice to the Company or the Stockholder, the Company and the Stockholder
shall have the right to terminate this Agreement within ten (10) business days
after its receipt of such notice.
4.6 Positions Offered to Employees. Subject to the parties'
agreement on the terms and provisions of the Sublease, Purchaser shall be
entitled to offer any employee of any of the Stockholder Parties whose
employment has been or will be terminated an offer of employment, with such
employment to commence after such employee's termination of employment. Such
offers may be made prior to the Closing Date. With respect to each employee
offered employment, the position offered by Purchaser shall be on an at-will
basis. Upon request of Purchaser, the Company shall provide or make available
to Purchaser data that is in the Company's possession regarding the dates of
hire, compensation and job description of such employees of the Company
working in the Business as of the date of Purchaser's request made not earlier
than the date which is the earlier of (a) fifteen (15) days prior to the
Closing Date and (b) the date any of the Stockholder Parties either publicly
announces the closing of the Business or notifies the employees in the
Business of such closing. Such data shall be provided by the Company not
later than five (5) days after the Company receives Purchaser's request.
Purchaser acknowledges that Company is not transferring to Purchaser, and
Purchaser is not assuming liabilities with respect to, any Excluded Assets
related to employees.
4.7 Further Assurances. The parties hereto agree to execute and
deliver, or cause to be executed and delivered, such further instruments or
documents or take such other action as may be reasonably necessary or
convenient to carry out the transactions contemplated hereby.
4.8 Notices and Consents. The Company and the Stockholder will give
any notices to third parties, and the Company and the Stockholder shall use
their best efforts to obtain any third party consents, (i) that may be
necessary to consummate the transactions contemplated hereby, (ii) that may be
necessary to assign any contract, permit, license or claim or any right or
benefit arising thereunder or resulting therefrom or (iii) that Purchaser may
otherwise request.
4.9 Commitment. The Stockholder hereby agrees to cause the Company to
comply with its obligations under this Agreement and to use diligent efforts
to cause the conditions to the Closing to be satisfied.
5. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND THE STOCKHOLDER
The obligations of the Company and the Stockholder with respect to
actions to be taken on the Closing Date are subject to the satisfaction or
waiver on or prior to the Closing Date of all of the following conditions.
5.1 Representations and Warranties; Performance of Obligations. All
representations and warranties of Purchaser contained in Section 3 shall be
true and correct as of the Closing Date as though such representations and
warranties had been made as of that time; all of the terms, covenants and
conditions of this Agreement to be complied with or performed by Purchaser on
or before the Closing Date, as the case may be, shall have been duly complied
with or performed, and the Purchaser shall have delivered to the Company
certificates dated as of the Closing Date and signed by Purchaser to such
effect.
5.2 Satisfaction. All actions, proceedings, instruments and documents
required to carry out this Agreement or incidental hereto and all other
related legal matters shall be satisfactory to the Company and the Stockholder
and their counsel. All of the Post Closing Items ("Post Closing Items", as
such term is defined in the Post Closing Agreement dated April 6, 2001 by and
among the Company, ENA and the other signatories thereto) have been satisfied
or waived.
5.3 Consents and Approvals. All Listed Required Consents and all
other necessary consents of: (i) any governmental authority or agency
(including any necessary filings); and (ii) any party to any Assumed Contracts
for which consent is required for assumption by Purchaser (unless the
requirement of consent is waived by Purchaser), relating to the consummation
of the Transaction, shall have been obtained and made and no action or
proceeding shall have been instituted or threatened to restrain or prohibit
the transactions contemplated hereby; and no action or proceeding shall have
been instituted or threatened to restrain or prohibit the Transaction and no
governmental agency or body shall have taken any other action or made any
request of the Company as a result of which the Company deems it inadvisable
to proceed with the Transaction.
5.4 Closing Documents; Purchase Price. The Purchaser shall have (a)
executed and delivered to or caused to be executed and delivered to the
Company all Closing Documents to which the Purchaser or any of its affiliates
is a party and (b) paid the Purchase Price as provided in Section 1.4.
5.5 Opinion of Counsel. Company shall have received the opinion of
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, as counsel to Purchaser, in form and substance
reasonably acceptable to the parties.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser with respect to actions to be taken on the
Closing Date are subject to the satisfaction or waiver on or prior to the
Closing Date of all of the following conditions.
6.1 Representations and Warranties; Performance of Obligations. All
the representations and warranties of the Company and the Stockholder
contained in this Agreement shall be true and correct as of the Closing Date
with the same effect as though such representations and warranties had been
made on and as of such date; all of the terms, covenants and conditions of
this Agreement to be complied with or performed by the Company and the
Stockholder on or before the Closing Date, as the case may be, shall have been
duly performed or complied with, and the Company and Stockholder shall have
delivered to Purchaser certificates dated as of the Closing Date and signed by
them to such effect.
6.2 Master Purchase Agreement. No default by any Stockholder Party
shall exist under the Master Purchase Agreement or any of the other
Transaction Documents.
6.3 No Adverse Changes. Except for the closing of the Business in
accordance with the provisions of this Agreement, no events or circumstances
shall have occurred individually or in the aggregate with respect to the
Assets or the Business since March 31, 2001 which would constitute a material
adverse change in the condition (financial or otherwise) of the Assets or
Business and the Company shall not have suffered any material loss or damage
to any of the Assets since March 31, 2001, whether or not covered by
insurance.
6.4 Satisfaction. All actions, proceedings, instruments and documents
required to carry out this Agreement or incidental hereto and all other
related legal matters shall be satisfactory to the Purchaser and its counsel.
All of the Post Closing Items have been satisfied or waived.
6.5 Consents and Approvals. All necessary consents of and filings
with any governmental authority or agency relating to the consummation of the
transactions contemplated herein shall have been obtained and made; all Listed
Required Consents and all other consents and approvals of third parties
necessary to consummate this Agreement shall have been obtained or the
requirement to obtain such consent shall have been waived by Purchaser; all
consents necessary to assign any contract, permit, license, lease or claim or
any right or benefit arising thereunder or resulting therefrom to Purchaser
shall have been obtained, or the requirement to obtain such consent shall have
been waived by Purchaser; and no action or proceeding shall have been
instituted or threatened to restrain or prohibit the transactions contemplated
hereby and no governmental agency or body shall have taken any other action or
made any request of Purchaser as a result of which Purchaser deems it
inadvisable to proceed with the Transaction.
6.6 Instruments of Transfer and Title Insurance. The Company and the
Stockholder shall have executed and delivered to Purchaser the Closing
Documents to which any of the Stockholder Parties are to be a party. At all
times hereafter as may be necessary, the Company and the Stockholder shall
execute and deliver to Purchaser such additional instruments of transfer as
shall be reasonably necessary or appropriate to vest in Purchaser good and
marketable title to the Business and the Assets and to comply with the
purposes and intent of this Agreement and the Closing Documents.
6.7 Condition of the Business and Assets. The Inspection Period shall
have expired and Purchaser shall not have terminated this Agreement pursuant
to its rights under Section 4.1.
6.8 Bonds and Tax Abatement Agreement. In connection with the Bonds
the following shall have occurred in a manner satisfactory to the parties:
6.8.1.1 The Series 1992 Lease, the Series 1995 and 1996 Lease and the
Tax Abatement Agreement shall have been assigned to the
Purchaser and all consents necessary for such assignment shall
have been obtained. The Purchaser shall have received an
estoppel certificate from the City stating that no defaults have
occurred under such leases or agreement, and no events or
omissions have occurred which, but for the passing of time or
giving of notice or both, would be a default under such leases
or agreement, on the part of Company or any other party to any
of such leases or agreement.
6.8.1.2 The Series 1995 and 1996 Trustee shall have been removed and an
entity designated by the Purchaser shall replace such entity as
the trustee under the Series 1995 and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
6.8.1.3 The Series 1995 and 1996 Bondholder shall have conveyed the
Series 1995 Bonds and the Series 1996 Bonds to an entity
designated by the Purchaser. Prior to such conveyance the
parties shall agree upon the amount of the Series 1995 Bonds and
the 1996 Bonds to be outstanding at the time of such conveyance.
6.8.1.4 Notwithstanding the foregoing, at the option of Purchaser, the
Series 1995 and 1996 Bonds shall be retired and, if requested by
Purchaser, the Series 1995 and 1996 Lease shall be terminated.
6.9 GECC Leases. Contemporaneously with the Closing Company shall
make all payments under the GECC Leases necessary to purchase the assets
leased pursuant to the GECC Leases and shall acquire title to such assets,
free and clear of all security interests, liens, claims and encumbrances of
any kind.
6.10 Tolling Obligations. The Stockholder Parties shall have completed
all tolling requirements under any tolling agreements that may be entered into
between any of the Stockholder Parties and ENA or any affiliate of ENA, which
tolling agreements contemplate the utilization of any of the Assets or the
Business.
6.11 Closing of Business. The Company shall have closed the Business
and terminated the employment of all employees employed in connection with the
Assets or Business (except for those employees that the Company desires to
employ in connection with the Excluded Assets and the performance of the
Company's obligations under the Sublease) in compliance with all federal,
state, local and foreign statutes, laws, ordinances, regulations, rules,
notices, permits, judgments, orders and decrees applicable thereto
6.12 Opinion of Counsel. The Purchaser shall have received the opinion
of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ LLP, as counsel to the Company and the
Stockholder, in form and substance reasonably acceptable to the parties.
7. POST-CLOSING COVENANTS
The parties to this Agreement further covenant and agree as follows:
7.1 Future Cooperation. The Stockholder, the Company and Purchaser
shall each deliver or cause to be delivered to the other following the date
hereof such additional instruments as the other may reasonably request for the
purpose of transferring, assigning and delivering to Purchaser and its assigns
the Assets and fully carrying out the intent of this Agreement and the Closing
Documents.
7.2 Expenses. Purchaser will pay the fees, expenses and disbursements
of Purchaser and its agents, representatives, financial advisors, accountants
and counsel incurred in connection with the execution, delivery and
performance of this Agreement. The Company will pay the fees, expenses and
disbursements of the Company and the Stockholder and their respective agents,
representatives, financial advisors, brokers, accountants and counsel incurred
in connection with the negotiation, preparation, execution, delivery and
performance of this Agreement. Further, the Company or Stockholder agrees to
pay for all charges for the recordation of the instruments conveying rights to
the Real Property, the cost of the title insurance policy in the forms
contemplated hereunder, and all charges for the preparation and recordation of
any releases or instruments required to clear the Company's title for
conveyance in accordance with the provisions of this Agreement.
7.3 Payment of Liabilities; Bulk Transfer Compliance. The Company
shall pay or otherwise satisfy in the ordinary course of business consistent
with customary practices all of its trade payables, other current liabilities
and all other liabilities of the Company accruing with respect to the period
prior to the Closing. The Company shall fully pay or otherwise satisfy all
Excluded Liabilities accruing with respect to the period prior to the Closing.
The Company and the Stockholder hereby indemnify and hold Purchaser harmless
from and against all claims, losses, demands, damages, liabilities, losses,
costs and expenses resulting from or relating to non-compliance by the Company
with the bulk transfer provisions of the Uniform Commercial Code (or any
similar law) in connection with the sale and transfer of the Business and
Assets to Purchaser. The Company or the Stockholder shall pay when due any
sales, transfer or similar Taxes which may become applicable in respect of the
Company's sale of the Business and Assets to Purchaser.
7.4 Access to Books and Records. After the Closing Date, Purchaser
shall permit, at any time and from time to time, the Stockholder and the
Company and their representatives reasonable access, during regular business
hours and upon reasonable advance notice, to the Company's books and records
in connection with the preparation and review of tax returns and any audit
thereof, and as necessary to prosecute or defend any litigation involving the
Company.
7.5 Railroad Access Agreement. The Company shall not voluntarily
terminate the Railroad Access Agreement.
8. INDEMNIFICATION
The Company, Stockholder and Purchaser each make the following covenants
that are applicable to them, respectively:
8.1 Survival of Representations and Warranties.
8.1.1 The representations, warranties and pre-Closing covenants of the
Company and the Stockholder made in this Agreement and in the documents and
certificates delivered in connection herewith shall (a) if related to any
representation, warranty or pre-Closing covenant pertaining to environmental
or tax matters survive until the date which is the later of (i) two years from
the Closing Date and (ii) the date of the expiration of the applicable
statutes of limitations (including any extensions thereof) and (b) if related
to any other representation, warranty or pre-Closing covenant survive until
the date which is two years from the Closing Date, provided, however, that
representations, warranties and pre-Closing covenants with respect to which
a claim is made within the applicable survival period shall survive until
such claim is finally determined and paid.
8.1.2 The representations and warranties of Purchaser made in this
Agreement and in the certificates delivered in connection herewith shall
survive for a period of two years following the Closing Date; provided,
however, that representations and warranties with respect to which a claim is
made within such two year period shall survive until such claim is finally
determined and paid.
8.1.3 The date on which a representation or warranty expires as provided
herein is herein called the "Expiration Date." No claim for indemnification
may be made with respect to a representation or warranty after the Expiration
Date, other than claims based on fraud.
8.2 General Indemnification by the Company and the Stockholder. The
Company and the Stockholder covenant and agree that they will jointly and
severally indemnify, defend, protect, and hold harmless Purchaser, and its
respective subsidiaries and officers, directors, employees, stockholders,
agents, representatives and affiliates at all times from and after the date
hereof from and against all claims, damages, actions, suits, proceedings,
demands, assessments, adjustments, costs and expenses (including specifically,
but without limitation, reasonable attorneys' fees and expenses of
investigation) (collectively "Damages") incurred by such indemnified person as
a result of or incident to (i) any breach of any representation or warranty of
the Company or the Stockholder set forth herein or in the certificates or
other documents delivered in connection herewith, (ii) any breach or
nonfulfillment of any covenant or agreement by the Company or the Stockholder
under this Agreement, and (iii) any broker or finder claiming any compensation
in connection with any aspect of the Transaction by, through or under any of
the Stockholder Parties. Purchaser shall not be entitled to indemnification
hereunder to the extent that Purchaser is compensated for any Damages
sustained by Purchaser by any insurance policy proceeds paid to Purchaser as a
result of such Damages.
8.3 Indemnification by Purchaser. Purchaser covenants and agrees that
it will indemnify, defend, protect and hold harmless the Company and
Stockholder, and their respective employees, officers, directors,
stockholders, agents, representatives and affiliates, at all times from and
after the date hereof from and against all Damages incurred by the Company or
Stockholder as a result of (i) any breach of any representation or warranty of
Purchaser set forth herein or in the certificates or other documents delivered
in connection herewith; and (ii) any breach or nonfulfillment of any covenant
or agreement by Purchaser under this Agreement.
8.4 Specific Indemnification. In addition to the indemnification
provided for in Section 8.2, the Company and the Stockholder covenant and
agree that they will jointly and severally indemnify, defend, protect and hold
harmless, Purchaser and its subsidiaries, officers, directors, employees,
stockholders, agents, representatives and affiliates from and against all
Damages incurred by any of them in connection with:
8.4.1.1 the presence, emanation, migration, disposal, release or
threatened release of any oil or other petroleum products or
Hazardous Materials or Hazardous Substances on, within, or to or
from any of the Assets or any properties presently or previously
owned or leased by the Company or any predecessor of the Company
as a result of (i) the presence of and closure or removal of any
underground storage tank on such property prior to the Closing,
including any future manifestations of such conditions, (ii) the
operations of the Company or any predecessor of the Company
prior to the Closing, including any future manifestations of
such conditions, or (iii) the condition of such properties prior
to the Closing, including any future manifestations of such
conditions;
8.4.1.2 any liability or obligation, either arising prior to Closing or
resulting from facts arising or occurring prior to Closing, of
any nature whatsoever, to or on behalf of any employee or former
employee of the Company, including, but not limited to, any
claim arising under any applicable workers' compensation
statute, any applicable states' civil rights statute, the Age
Discrimination in Employment Act of 1967, the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"),
any withdrawal liability to any multi-employer or employee
pension benefit plan applicable under ERISA, the Americans with
Disabilities Act of 1990, the Rehabilitation Act of 1973,
Executive Order 11246, the Civil Rights Acts of 1866, 1964 and
1991, the Family and Medical Leave Act of 1993, the Equal Pay
Act, all tort and/or common law claims, and all claims for past
or future employment benefits, including, but not limited to,
wages, bonuses, vacation pay, or insurance coverage. This also
includes, but is not limited to, those claims which any employee
or former employee has asserted, or could have asserted, against
Company arising out of or relating in any way to such employee's
employment with, separation from and/or affiliation with
Company; and
8.4.1.3 any Excluded Liability or any liability or obligation of any
nature whatsoever relating to any of the Excluded Liabilities or
the Excluded Assets.
8.5 Third Person Claims. Promptly after any party hereto (the
"Indemnified Party") has received notice of or has knowledge of any claim by a
person not a party to this Agreement ("Third Person") or the commencement of
any action or proceeding by a Third Person that may give rise to a right of
indemnification hereunder, such Indemnified Party shall give to the party
obligated to provide indemnification hereunder (an "Indemnifying Party")
written notice of such claim or the commencement of such action or proceeding;
provided, however, that the failure to give such notice will not relieve such
Indemnifying Party from liability under this Section with respect to such
claim, action or proceeding, except to the extent that the Indemnifying Party
has been actually prejudiced as a result of such failure. The Indemnifying
Party (at its own expense) shall have the right to defend any such claim, suit
or proceeding, provided that the Indemnified Party, at its own expense, shall
have the right to associate with the Indemnifying Party in such defense.
Neither the Indemnifying Party nor the Indemnified Party shall, except at its
own cost, make any settlement with respect to any such claim, suit or
proceeding without the prior consent of the other party, which consent shall
not be unreasonably withheld or delayed. It is understood and agreed that in
situations where failure of a party to settle a claim expeditiously could have
an adverse effect on the other party, the failure of the refusing party to act
upon the other party's request for consent to such settlement within five
business days of such party's receipt of notice thereof from the other party
shall be deemed to constitute consent by such party of such settlement for
purposes of this Section.
8.6 Limitations on Indemnification. No person shall be entitled to
indemnification under this Section if and to the extent that such person's
claim for indemnification is directly or indirectly caused by a breach by such
person of any representation, warranty, covenant or other agreement set forth
in this Agreement.
9. TERMINATION OF AGREEMENT
9.1 Termination. This Agreement may be terminated at any time
prior to the Closing Date solely:
9.1.1.1 by mutual consent of Purchaser and the Company;
9.1.1.2 by the Purchaser or by the Company, if the transactions
contemplated by this Agreement to take place at the Closing
shall not have occurred by June 30, 2001 (the "Termination
Date"), unless the failure of such transactions to be
consummated is due to the willful failure of the party seeking
to terminate this Agreement to perform any of its obligations
under this Agreement to the extent required to be performed by
it prior to or on the Closing Date;
9.1.1.3 by the Purchaser or by the Company if a breach or default shall
be made by the other in the observance or in the due and timely
performance of any of the covenants or agreements contained
herein, and the curing of such default shall not have been made
within ten days after written notice thereof is delivered to the
breaching or defaulting party by the other party;
9.1.1.4 by the Purchaser or by the Company, if the transactions
contemplated by this Agreement to take place at the Closing
shall not have occurred by the Termination Date because a
condition precedent to such party's performance in Article 6 and
5, respectively, has not been satisfied by the Termination Date;
or
9.1.1.5 by any party pursuant to a termination right otherwise granted
such party under this Agreement.
9.2 Liabilities in Event of Termination. Following a termination of
this Agreement the parties hereto shall have no further obligations or
liabilities hereunder one to the other; provided that he termination of this
Agreement will in no way (a) limit any obligation or liability of any party
based on or arising from a breach or default by such party with respect to any
of its representations, warranties, covenants or agreements contained in this
Agreement including, but not limited to, legal and audit costs and out of
pocket expenses or (b) terminate the provisions of Articles 8 and 10, all of
which provisions shall survive such termination.
10. GENERAL
10.1 Successors and Assigns. This Agreement and the rights of the
parties hereunder may not be assigned, directly or indirectly, by operation of
law or otherwise, by any party without the prior written consent of the other
party; provided, however, that the Purchaser may assign, convey, transfer or
otherwise dispose of all or any portion of its interest in, or its rights and
obligations under, this Agreement and such other documents and instruments to
(i) any party that acquires a substantial portion of the Assets or the
Business, (ii) any affiliate of Enron Corp., (iii) an entity approved by the
Company, or (iv) any financial institution financing or refinancing the
transaction contemplated hereby or otherwise extending credit to the Purchaser
or any of its affiliates and provided further, that upon the foreclosure, sale
in lieu of foreclosure, deed in lieu of foreclosure, or deed of the assets of
the Purchaser, or a substantial portion thereof by or to any such financial
institution, any of its affiliates, or any other person, the representations,
warranties and covenants contained herein and in such other documents and
instruments shall inure to the benefit of and shall be enforceable by such
financial institution, affiliate or other person. Any assignment, conveyance,
transfer or other disposition made or attempted in violation of this Section
10.1 shall be void and of no effect. This Agreement shall be binding on the
heirs, executors, administrators, personal representatives, successors and
permitted assigns of the parties hereto.
10.2 Entire Agreement. This Agreement (including the schedules,
exhibits and annexes attached hereto) and the documents delivered pursuant
hereto constitute the entire agreement and understanding of the parties and
supersede any prior agreement and understanding relating to the subject matter
of this Agreement. This Agreement, upon execution, constitutes a valid and
binding agreement of the parties hereto enforceable in accordance with its
terms and may be modified or amended only by a written instrument executed by
the parties.
10.3 Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, by facsimile or otherwise, each of which shall be
deemed an original and all of which together shall constitute but one and the
same instrument.
10.4 Notices. All notices and communications required or permitted
hereunder shall be in writing and may be given by depositing the same in
United States mail, addressed to the party to be notified, postage prepaid and
registered or certified with return receipt requested, or by delivering the
same in person or by facsimile to an officer or agent of such party, as
follows:
If to Purchaser, addressed to it at:
Enron Industrial Markets LLC
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn:▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
And a copy to:
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Bracewell & ▇▇▇▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Company, addressed to it at:
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President & CEO
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
And a copy to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇. Adoor
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Stockholder addressed to it at:
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President & CEO
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
And a copy to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
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Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as any party hereto shall specify pursuant to this
Section from time to time.
10.5 Governing Law. This Agreement shall be construed in accordance
with the laws of the State of Texas other than its principles governing
conflicts of laws.
10.6 Survival of Representations and Warranties. The representations,
warranties, covenants and agreements of the parties made herein or in writing
delivered pursuant to the provisions of this Agreement shall survive the
consummation of the transactions contemplated hereby and any examination on
behalf of the parties until the applicable Expiration Date or as otherwise
provided herein.
10.7 Effect of Investigation.
10.7.1 No investigation by any party hereto in connection with this
Agreement or otherwise shall affect the representations, warranties, covenants
and other agreements of the parties contained herein or in any schedule,
certificate or other document delivered in connection herewith and each such
representation, warranty, covenant and other agreement shall survive such
investigation.
10.7.2 When a representation or warranty contained herein or in any
certificate or other document delivered in connection herewith is made to the
"knowledge" of a party, such party shall be deemed to know all facts and
circumstances that a reasonable investigation of the subject matter of such
representation or warranty would have revealed.
10.8 Exercise of Rights and Remedies. No delay of or omission in the
exercise of any right, power or remedy accruing to any party as a result of
any breach or default by any other party under this Agreement shall impair any
such right, power or remedy, nor shall it be construed as a waiver of or
acquiescence in any such breach or default, or of any similar breach or
default occurring later; nor shall any waiver of any single breach or default
be deemed a waiver of any other breach or default occurring before or after
that waiver.
10.9 Time. Time is of the essence with respect to this Agreement.
10.10 Reformation and Severability. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, it shall, to the extent
possible, be modified in such manner as to be valid, legal and enforceable but
so as to most nearly retain the intent of the parties, and if such
modification is not possible, such provision shall be severed from this
Agreement, and in either case the validity, legality and enforceability of the
remaining provisions of this Agreement shall not in any way be affected or
impaired thereby.
10.11 Captions. The headings of this Agreement are inserted for
convenience only, and shall not constitute a part of this Agreement or be used
to construe or interpret any provision hereof.
10.12 Confidentiality; Press Releases and Public Announcements. The
existence of this Agreement and its contents are intended to be confidential
and are not to be discussed with or disclosed to any third party (other than
financial and legal advisors retained by the parties to work on the
Transaction), except (i) with the express prior written consent of the parties
hereto, (ii) as may be required or appropriate in response to any summons or
discovery order, or to comply with any applicable law, order, regulation, or
ruling including rules and regulations of the Securities and Exchange
Commission and the New York Stock Exchange, (iii) as Purchaser, ENA and the
Company, or their designees, reasonably deem appropriate in order to conduct
due diligence or other investigation relating to the contemplated Transaction
or in connection with discussions with potential lenders, (iv) to Congress
Financial Corporation (Central), or (v) to other third parties as reasonably
required in connection with the performance of the covenants contained in this
Agreement. Without the prior written consent of the other, no party will, and
each party will cause their respective officers, directors, employees, agents,
counsel, accountants, financial advisors, consultants and other
representatives (collectively, "Representatives") not to, make any release to
the press or other public disclosure with respect to either the fact that
discussions or negotiations are taking place concerning the foregoing or the
existence or contents of this Agreement, except for such public disclosure as
may be necessary, in the written opinion of outside counsel, for the party
proposing to make the disclosure not to be in violation of or default under
any applicable law, regulation or governmental order including rules and
regulations of the Securities and Exchange Commission and the New York Stock
Exchange. If either party proposes to make any disclosure based upon such an
opinion, that party will deliver a copy of such opinion to the other party,
together with the text of the proposed disclosure, as far in advance of its
disclosure as is practicable, and will in good faith consult with and consider
the suggestions of the other party concerning the nature and scope of the
information it proposes to disclose.
10.13 No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person other than the parties and their respective
successors and permitted assigns, except as otherwise expressly provided
herein.
10.14 Dispute Resolution. Any action, dispute, claim or controversy of
any kind between the parties arising out of, or pertaining to this Agreement
or the transactions contemplated hereby (a "Dispute") shall be resolved by
binding arbitration in accordance with the terms hereof. Any party may, by
summary proceedings, bring an action in court to compel arbitration of any
Dispute. Any arbitration shall be administered by the American Arbitration
Association (the "AAA") in accordance with the terms of this Section 10.14,
the Commercial Arbitration Rules of the AAA, and, to the maximum extent
applicable, the Federal Arbitration Act. Judgment on any award rendered by an
arbitration panel may be entered in any court having jurisdiction. Any
arbitration shall be conducted by an arbitration panel consisting of three
arbitrators. Each party shall designate one arbitrator. The third arbitrator
shall be designated by the two arbitrators designated by the parties. If
either party fails to designate an arbitrator within 10 days after the filing
of the Dispute with the AAA, such arbitrator shall be appointed in the manner
prescribed by the AAA. An arbitration proceeding hereunder shall be conducted
in Houston, Texas. Each proceeding shall be concluded within 180 days of the
filing of the Dispute with the AAA. The arbitration panel shall be empowered
to award sanctions and to take such other actions as they deem necessary, to
the same extent a judge could impose sanctions or take such other actions
pursuant to the Federal Rules of Civil Procedure and applicable law. No award
by the arbitration panel shall assess consequential, punitive or exemplary
damages but may assess costs and expenses in a manner deemed equitable. The
arbitration panel shall make specific written findings of fact and conclusions
of law. The decision of the majority of the arbitration panel shall be final
and binding on each party.
10.15 Waiver of Certain Damages. IN NO EVENT WILL EITHER PARTY BE
LIABLE OR RESPONSIBLE TO THE OTHER FOR ANY TYPE OF INCIDENTAL, PUNITIVE,
INDIRECT OR CONSEQUENTIAL OR ECONOMIC DAMAGES, INCLUDING, BUT NOT LIMITED TO,
LOST REVENUE, LOST PROFITS, LOST GOODWILL OR CUSTOMER COMPLAINTS, REPLACEMENT
GOODS, FINANCING COSTS, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES,
WHETHER ARISING UNDER THEORY OF CONTRACT, TORT (INCLUDING FRAUD, FRAUD IN THE
INDUCEMENT, NEGLIGENCE, NEGLIGENT MISREPRESENTATION, AND GROSS NEGLIGENCE),
INDEMNITY, STRICT LIABILITY, CONTRIBUTION, PROFESSIONAL LIABILITY, PRODUCTS
LIABILITY, EQUITY, OR OTHERWISE.
10.16 Schedules. Prior to the execution of this Agreement, Company has
delivered to Purchaser certain proposed Schedules to this Agreement.
Purchaser acknowledges the receipt of such Schedules but has not reviewed or
approved all of such Schedules. The parties hereto acknowledge that prior to
Closing the form and substance of all Schedules to this Agreement will be
agreed to by parties as Closing Documents, all as more fully provided for in
Section 4.1.2.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
PURCHASER:
ENRON INDUSTRIAL MARKETS LLC, a Delaware
limited liability company
By:
Name: ___________________________________
Title: ____________________________________
COMPANY:
HUNTCO STEEL, INC., a Delaware corporation
By:
Name: ___________________________________
Title: ___________________________________
STOCKHOLDER:
HUNTCO INC., a Missouri corporation
By:
Name: ___________________________________
Title: ___________________________________