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PURCHASE AGREEMENT
CLASS B UNITS
OF
RESERVE IRON & METAL LIMITED PARTNERSHIP
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TABLE OF CONTENTS
PAGE
ARTICLE I
PURCHASE AND SALE OF PURCHASED SECURITIES. . . . . . . . . . . . . . . . . . . 1
1.1 Purchase and Sale of Purchased Securities. . . . . . . . . . . . . . 1
1.2 The Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Closing Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.4 Adjustments to the Purchase Price. . . . . . . . . . . . . . . . . . 2
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF MTLM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Corporate Status . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Corporate Power and Authority. . . . . . . . . . . . . . . . . . . . 3
2.3 Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.4 No Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BBV. . . . . . . . . . . . . . . . . . . . . 4
3.1 Corporate Status . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.2 Corporate Power and Authority. . . . . . . . . . . . . . . . . . . . 4
3.3 Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.4 Ownership of Purchased Securities. . . . . . . . . . . . . . . . . . 4
3.5 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.6 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.7 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . 5
3.8 No Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.9 Partnership Matters. . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE IV
CONDUCT OF BUSINESS PENDING THE SALE AND PURCHASE OF STOCK. . . . . . . . 5
4.1 Conduct of Business by BBV Pending the Purchase and Sale of Stock. . 5
ARTICLE V
ADDITIONAL AGREEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.1 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.2 Cooperation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.3 Notification of Certain Matters. . . . . . . . . . . . . . . . . . . 6
5.4 Confidentiality; Publicity . . . . . . . . . . . . . . . . . . . . . 6
5.5 No Other Discussions . . . . . . . . . . . . . . . . . . . . . . . . 6
5.6 Trading in MTLM's Common Stock . . . . . . . . . . . . . . . . . . . 6
5.7 HSR Act Compliance . . . . . . . . . . . . . . . . . . . . . . . . . 6
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5.8 Purchase of Class A Units. . . . . . . . . . . . . . . . . . . . . . 7
5.9 Release of Claims. . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE VI
CONDITIONS TO THE OBLIGATIONS OF MTLM. . . . . . . . . . . . . . . . . . . . . 7
6.1 Accuracy of Representations and Warranties and Compliance with
Obligations 7
6.2 No Material Adverse Change or Destruction of Property. . . . . . . . 8
6.3 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.4 No Adverse Litigation. . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF BBV . . . . . . . . . . . . . . . . . . . . . 9
7.1 Accuracy of Representations and Warranties and Compliance with
Obligations 9
7.2 No Adverse Litigation. . . . . . . . . . . . . . . . . . . . . . . . 9
7.3 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . 9
7.4 Additional Deliveries. . . . . . . . . . . . . . . . . . . . . . . .10
7.5 Release. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
ARTICLE VIII
INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
8.1 Agreement by BBV to Indemnify. . . . . . . . . . . . . . . . . . . .10
ARTICLE IX
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
9.1 Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . .11
9.2 Other Definitional Provisions. . . . . . . . . . . . . . . . . . . .12
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER. . . . . . . . . . . . . . . . . . . . . . .12
10.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
10.2 Effect of Termination. . . . . . . . . . . . . . . . . . . . . . . .13
ARTICLE XI
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
11.1 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
11.2 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . .14
11.3 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
11.4 Amendment; Waiver. . . . . . . . . . . . . . . . . . . . . . . . . .14
11.5 Binding Effect; Assignment . . . . . . . . . . . . . . . . . . . . .15
11.6 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
11.7 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . .15
11.8 Governing Law; Interpretation. . . . . . . . . . . . . . . . . . . .15
11.9 Arm's Length Negotiations. . . . . . . . . . . . . . . . . . . . . .15
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PURCHASE AGREEMENT
This Purchase Agreement (this "Agreement") is entered into effective as
of March 12, 1997, by and between Metal Management, Inc., a Delaware
corporation (the "MTLM") and BancBoston Ventures Inc., a Massachusetts
corporation ("BBV").
RECITALS
A. BBV owns, and until the Closing (as defined herein) will own, 2,500
Class B limited partnership units (the "Purchased Securities") in Reserve Iron &
Metal Limited Partnership, a Delaware limited partnership (the "Company").
B. MTLM has determined it is in its best interests to purchase and BBV
has determined it is in its best interests to sell the Purchased Securities upon
the terms and subject to the conditions set forth in this Agreement.
TERMS OF AGREEMENT
In consideration of the mutual representations, warranties, covenants and
agreements contained herein, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF PURCHASED SECURITIES
1.1 PURCHASE AND SALE OF PURCHASED SECURITIES. Subject to the terms and
conditions of this Agreement, at Closing, MTLM agrees to purchase from BBV and
BBV agrees to sell, transfer and convey to MTLM, the Purchased Securities, for
the aggregate sum of Five Million Eight Hundred Seventy-Five Thousand Dollars
($5,875,000.00) (the "Purchase Price") payable at Closing.
1.2 THE CLOSING. Subject to the terms and conditions of this Agreement,
the consummation of the purchase and sale of the Purchased Securities (the
"Closing") shall take place as promptly as practicable (and in any event within
three business days) after satisfaction or waiver of the conditions set forth in
ARTICLES VI AND VII of the Class A Purchase Agreements (the "Closing Date") at
the law offices of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Ltd. in Chicago, Illinois, or at another
location that is mutually agreeable to BBV and MTLM.
1.3 CLOSING DELIVERIES. At the Closing, BBV shall deliver to MTLM the
following, in each case in a form reasonably acceptable to MTLM:
(a) an assignment of the Purchased Securities from BBV to MTLM (to
include a withdrawal by BBV from the Company) duly executed by an authorized
representative of BBV;
(b) an agreement terminating the agreements set forth on SCHEDULE 3.7
hereto, duly executed by an authorized representative of BBV and/or its
Affiliates as the case may be.
(c) the opinion of counsel described in SECTION 6.3;
(d) the release of claims described in SECTION 5.9; and
(e) all other previously undelivered agreements, certificates,
documents, instruments or writings required to be delivered by BBV at or prior
to the Closing pursuant to this Agreement or otherwise in connection herewith,
duly executed.
1.4 ADJUSTMENTS TO THE PURCHASE PRICE.
(a) Prior to Closing, ▇. ▇▇▇▇▇▇ Iron & Metal, Inc., as the Tax
Matters Person (as defined in the Code), jointly with the Company and ▇. ▇▇▇▇▇▇
Iron & Metal, Inc., the general partner of the Company (the "General Partner")
will cause to be prepared and delivered to BBV, in a manner consistent with past
practice and subject to the review and reasonable approval of MTLM, the
Company's federal and state tax returns for the tax year ending December 31,
1996 (the "1996 Returns"), and, within 90 days following the Closing, the (x)
Company's federal and state tax returns and (y) reports required to be
delivered by the General Partner to its limited partner pursuant to Section
9.4(a) of the Partnership Agreement, for the partial tax year ending as of the
Closing Date (the "1997 Partial Year Returns and Reports"). At Closing, MTLM
agrees to pay BBV as an adjustment to the Purchase Price, an amount equal to the
sum of: (i) the tax distribution payable to BBV by the Company for the period
from January 1, 1996, through December 31, 1996, to the extent not otherwise
paid by the Company to BBV, in accordance with the terms and provisions of
Section 8.2 (b) of the Partnership Agreement, and (ii) that portion of the
Amendment and Consent Fee payable to BBV, if any, to the extent not otherwise
paid by the Company calculated in accordance with Paragraph F of that certain
Amendment and Consent letter agreement dated as of December 4, 1995, between the
Company and BBV (the "Consent Fee") for the period from January 1, 1996, through
December 31, 1996 (collectively, the "Additional Payments"). Provided the
Closing has occurred. As further adjustment to the Purchase Price, MTLM agrees
to pay BBV on the date of delivery of the 1997 Partial Year Returns and Reports
an amount equal to the sum of (i) the tax distribution payable to BBV by the
Company for the period from January 1, 1997 to the Closing Date and (ii) the
Consent Fee, if any, for the period from January 1, 1997 to the Closing Date.
(b) If an audit examination of any federal or state tax returns of
either the Company or the General Partner (a "Return") results in any
adjustment, the effect of which is to impose any additional income taxes on BBV
(including interest and penalties) (the "Additional Tax
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Payments"), and provided the Closing has occurred, MTLM agrees to pay BBV as
an adjustment to the Purchase Price, an amount equal to the net tax effect on
BBV after decreasing the Additional Tax Payments by the amount of any
decrease in income taxes which will be due BBV as a result of any related
adjustments to a Return within fifteen (15) days after the conclusion of the
earlier of either the final determination of such adjustments or the
agreement to such adjustment by the Company or the General Partner as the
case may be. In addition, if subsequent to Closing any claim should be made
which could give rise to Additional Tax Payments (a "Tax Claim") MTLM will
cause the General Partner to prepare and deliver to BBV all reports required
to be delivered by the General Partner to its limited partners pursuant to
Section 9.4(a) of the Partnership Agreement consistent with past practice,
for the period covered by the Tax Claim.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF MTLM
As a material inducement to BBV to enter into this Agreement and to
consummate the transactions contemplated hereby, MTLM makes the following
representations and warranties to BBV:
2.1 CORPORATE STATUS. MTLM is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
2.2 CORPORATE POWER AND AUTHORITY. MTLM has, or will have at the time of
Closing, the corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. MTLM has taken, or will have taken at the
time of Closing, all action necessary to authorize the execution and delivery of
this Agreement, the performance of its obligations hereunder and the
consummation of the transactions contemplated hereby.
2.3 ENFORCEABILITY. This Agreement has been, or will have been at the
time of Closing, duly executed and delivered by MTLM and constitutes a legal,
valid and binding obligation upon MTLM, enforceable against it in accordance
with its terms, except as the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and general equitable principles regardless of
whether such enforceability is considered in a proceeding at law or in equity.
2.4 NO COMMISSIONS. MTLM has not incurred any obligation for any finder's
or broker's or agent's fees or commissions or similar compensation in connection
with the transactions contemplated hereby.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BBV
As a material inducement to MTLM to enter into this Agreement and to
consummate the transactions contemplated hereby, BBV makes the following
representations and warranties to MTLM:
3.1 CORPORATE STATUS. BBV is a corporation duly organized, validly
existing and in good standing under the laws of the State of Massachusetts.
3.2 CORPORATE POWER AND AUTHORITY. BBV has the power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. BBV has taken all action
necessary to authorize the execution and delivery of this Agreement, the
performance of its obligations hereunder and the consummation of the
transactions contemplated hereby.
3.3 ENFORCEABILITY. This Agreement has been duly executed and delivered
by BBV and constitutes a legal, valid and binding obligation upon BBV,
enforceable against it in accordance with its terms, except as the same may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and
general equitable principles regardless of whether such enforceability is
considered in a proceeding at law or in equity.
3.4 OWNERSHIP OF PURCHASED SECURITIES. Subject to the Partnership
Agreement, BBV owns and has an unqualified right to and shall transfer to MTLM
at the Closing, good, valid and marketable title to the Purchased Securities,
free and clear of all Liens. Other than this Agreement and the Partnership
Agreement, such Purchased Securities are not subject to any voting trust
agreement or other Contract, including any Contract restricting or otherwise
relating to the voting or disposition of such Purchased Securities. To the best
of BBV's knowledge, the Purchased Securities (i) represent all of the
outstanding units of limited partnership interests of the Company; and (ii) are
uncertificated.
3.5 NO VIOLATION. Except for any applicable requirements of the ▇▇▇▇-
▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976 and the rules and regulations
promulgated thereunder (the "HSR Act") the execution and delivery of this
Agreement by BBV, its performance of the respective obligations hereunder and
the consummation by it of the transactions contemplated by this Agreement will
not (i) contravene any provision of the articles of incorporation or bylaws of
BBV, (ii) violate or conflict with any law, statute, ordinance, rule,
regulation, decree, writ, injunction, judgment or order of any Governmental
Authority or of any arbitration award which is either applicable to, binding
upon or enforceable against BBV; or (iii) require the consent, approval,
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authorization or permit of, or filing with or notification to, any Governmental
Authority, any court or tribunal or any other Person.
3.6 LITIGATION. There is no action, suit, or other legal or administrative
proceeding or governmental investigation pending or, to the best of its
knowledge, threatened, anticipated or contemplated against, by or affecting BBV
which questions the validity or enforceability of this Agreement or the
transactions contemplated hereby, and there is no basis for any of the
foregoing.
3.7 TRANSACTIONS WITH AFFILIATES. Other than this Agreement and other
than the agreements listed on SCHEDULE 3.7 hereto, neither BBV nor any of its
Affiliates is a party to or bound by any Contract with, does business with or
has any obligations or liabilities to the Company.
3.8 NO COMMISSIONS. BBV has not incurred any obligation for any finder's
or broker's or agent's fees or commissions or similar compensation in connection
with the transactions contemplated hereby.
3.9 PARTNERSHIP MATTERS. BBV has not consented to any amendment or
modification of the Partnership Agreement other than the amendment dated
December 4, 1995. Except for the payment of the tax distributions, fees and
expenses described in SECTIONS 1.4, 7.4 AND 11.3, BBV has no claims against any
of the Company, the General Partner, or the Shareholders.
ARTICLE IV
CONDUCT OF BUSINESS PENDING THE SALE AND PURCHASE OF STOCK
4.1 CONDUCT OF BUSINESS BY BBV PENDING THE PURCHASE AND SALE OF STOCK.
BBV covenants and agrees that, between the date of this Agreement and the
Closing Date, BBV shall not (i) vote in favor of any matter under the
Partnership Agreement; (ii) waive, compromise, or modify any rights it has under
the Partnership Agreement; (iii) expand or alter its obligations under the
Partnership Agreement; or (iv) consent to any amendment to the Partnership
Agreement.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 FURTHER ASSURANCES. Each party shall execute and deliver such
additional instruments and other documents and shall take further actions as may
be necessary or appropriate to effectuate, carry out and comply with all of the
terms of this Agreement and the transactions contemplated hereby.
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5.2 COOPERATION. Each of the parties agrees to cooperate with the other
in the preparation and filing of all forms, notifications, reports and
information, if any, in connection with the transactions contemplated by this
Agreement and to use their respective best efforts to agree jointly on a method
to overcome any objections by any Governmental Authority to any such
transactions.
5.3 NOTIFICATION OF CERTAIN MATTERS. BBV and MTLM shall give prompt
notice to the other of the occurrence or non-occurrence of any event which would
likely cause any representation or warranty contained herein to be untrue or
inaccurate, or any covenant, condition, or agreement contained herein not to be
complied with or satisfied.
5.4 CONFIDENTIALITY; PUBLICITY. Except as may be required by law or as
otherwise permitted or expressly contemplated herein, no party hereto or their
respective Affiliates, employees, agents and representatives shall disclose to
any third party this Agreement or the subject matter or terms hereof without the
prior consent of the other parties hereto. No press release or other public
announcement related to this Agreement or the transactions contemplated hereby
shall be issued by any party hereto without the prior approval of the other
parties, except that MTLM may make such public disclosure which it believes in
good faith to be required by law provided that BBV shall be entitled to review
such disclosure before it is made public.
5.5 NO OTHER DISCUSSIONS. BBV and its respective Affiliates, employees,
agents and representatives will not (i) initiate, encourage the initiation by
others of discussions or negotiations with third parties or respond to
solicitations by third persons relating to BBV selling its interests in the
Company or (ii) enter into any agreement or commitment (whether or not binding)
with respect to any of the foregoing transactions. BBV will immediately notify
MTLM if any third party attempts to initiate any solicitation, discussion or
negotiation with respect to any of the foregoing transactions. This provision
is binding upon BBV until termination of this Agreement in accordance with
SECTION 10.1.
5.6 TRADING IN MTLM'S COMMON STOCK. Except as otherwise expressly
consented to by MTLM, from the date of this Agreement until the Closing Date,
BBV will not directly or indirectly purchase or sell (including short sales) any
shares of the Common Stock in any transactions effected on the Nasdaq Stock
Market or otherwise.
5.7 HSR ACT COMPLIANCE. BBV will as promptly as practicable file or cause
to be filed, at MTLM's expense, with the United States Federal Trade Commission
(the "FTC") and the United States Department of Justice (the "DOJ") the
notification and report form required for the transactions contemplated hereby
and any supplemental information requested in connection therewith pursuant to
the HSR Act. Any such notification and report form and supplemental information
will be in substantial compliance with the requirements of the HSR Act. Each of
MTLM, the General Partner, the Company and BBV will furnish to the others such
necessary information and reasonable assistance as the others may request in
connection with the preparation
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of any filing or submission which is necessary under the HSR Act. Each of
the Company, the General Partner, BBV and MTLM will keep each other apprised
of the status of any communications with, and inquiries or requests for
additional information addressed to the entity that filed a notification and
report form as an acquired or acquiring person form, the FTC or the DOJ and
shall comply or cause its respective filing person to comply promptly with
any such inquiry or request. Each of the Company, the General Partner, BBV
and MTLM will use commercially reasonable efforts to obtain any clearance
required under the HSR Act for the purchase and sale of the Purchased
Securities.
5.8 PURCHASE OF CLASS A UNITS. MTLM represents to BBV that attached
hereto as SCHEDULE 5.8 is a list of the only agreements relating to the purchase
by MTLM of the equity interests in the General Partner (the "Class A Purchase
Agreements") and the only employment arrangements to be entered into between the
Company and each of the Shareholders or any Affiliate of the Shareholders (the
"Employment Agreements"). MTLM has delivered accurate copies of the Class A
Purchase Agreements and Employment Agreements to BBV. MTLM agrees that, without
the prior written consent of BBV, it will not agree, whether prior to or
following the Closing, to any amendment to the terms of the Class A Purchase
Agreements which would have the effect of increasing in any material respect the
amounts payable thereunder. Anything in this SECTION 5.8 to the contrary
notwithstanding, neither the Company, the General Partner, nor MTLM shall be
precluded from (i) changing any of the terms of any of the Employment Agreements
subsequent to Closing or (ii) negotiating to acquire and /or acquiring any other
businesses or interests therein currently or hereafter owned by the
Shareholders.
5.9 RELEASE OF CLAIMS. At Closing, BBV and First Capital Corporation of
Boston shall deliver to MTLM a release of any claims either of them has or may
hereafter have against any of the Company, the General Partner or the
Shareholders arising from any act or failure to act prior to the Closing, in a
form reasonably satisfactory to MTLM's legal counsel, duly executed by BBV and
First Capital Corporation of Boston.
ARTICLE VI
CONDITIONS TO THE OBLIGATIONS OF MTLM
The obligations of MTLM hereunder shall be subject to the fulfillment at or
prior to the Closing Date of the following conditions, any or all of which may
be waived in whole or in part by MTLM:
6.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
OBLIGATIONS. The representations and warranties of BBV contained in this
Agreement shall be true and correct at and as of the Closing Date with the same
force and effect as though made at and as of that time except (i) for changes
specifically permitted by or disclosed pursuant to this Agreement, and (ii) that
those representations and warranties which address matters only as of a
particular date shall remain
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true and correct as of such date. BBV shall have performed and complied with
all of its obligations required by this Agreement to be performed or complied
with at or prior to the Closing Date. BBV shall have delivered to MTLM a
certificate, dated as of Closing Date, duly signed by or on behalf of BBV
stating that such representations and warranties are true and correct and
that all such obligations have been performed and complied with.
6.2 NO MATERIAL ADVERSE CHANGE OR DESTRUCTION OF PROPERTY. Between the
date hereof and the Closing Date, (i) there shall have been no Material Adverse
Change to the Company, (ii) there shall have been no adverse federal, state or
local legislative or regulatory change affecting in any material respect this
Agreement, and (iii) none of the properties and assets of the Company shall have
been damaged by fire, flood, casualty, act of God or the public enemy or other
cause (regardless of insurance coverage for such damage) which damages may have
a Material Adverse Effect thereon.
6.3 OPINION OF COUNSEL. MTLM shall have received an opinion dated as of
the Closing Date from counsel for BBV, in form and substance acceptable to MTLM,
to the effect that:
(i) BBV is a corporation duly organized and existing and
in good standing under the laws of the State of Massachusetts and is
authorized to carry on the business now conducted by it and authorized
to own the Purchased Securities and to sell them to MTLM;
(ii) BBV has obtained all necessary authorizations and
consents of its Board of Directors to effect the transactions
contemplated in this Agreement;
(iii) Except as set forth in SCHEDULE 3.6, such counsel
has no actual knowledge (without any independent investigation of any
sort) of any litigation, proceeding or investigation pending or
threatened which might result in any Material Adverse Change in the
validity of this Agreement; and
(iv) This Agreement is a valid and binding obligation of
BBV, and enforceable against it in accordance with its terms, except
as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of
creditors' rights generally.
6.4 NO ADVERSE LITIGATION. There shall not be pending or threatened any
action or proceeding by or before any court or other Governmental Authority
which shall seek to restrain, prohibit, invalidate or collect damages arising
out of the Agreement or any other transaction contemplated hereby, and which, in
the judgment of MTLM, makes it inadvisable to proceed with the Agreement and the
transactions contemplated hereby.
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6.5 GENERAL PARTNER'S CONSENT. The Partnership Agreement shall have been
amended to reflect BBV's withdrawal as a limited partner and MTLM's substitution
as a limited partner in its place.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF BBV
The obligations of BBV to sell the Purchased Securities shall be subject to
the fulfillment at or prior to the Closing Date of the following conditions, any
or all of which may be waived in whole or in part by BBV:
7.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
OBLIGATIONS. The representations and warranties of MTLM contained in this
Agreement shall be true and correct at and as of the Closing Date with the same
force and effect as though made at and as of that time except (i) for changes
specifically permitted by or disclosed pursuant to this Agreement, and (ii) that
those representations and warranties which address matters only as of a
particular date shall remain true and correct as of such date. MTLM shall have
performed and complied with all of its obligations required by this Agreement to
be performed or complied with at or prior to the Closing Date. MTLM shall have
delivered to BBV a certificate, dated as of the Closing Date, and signed by an
executive officer, certifying that such representations and warranties are true
and correct and that all such obligations have been performed and complied with.
7.2 NO ADVERSE LITIGATION. There shall not be pending or threatened any
action or proceeding by or before any court or other Governmental Authority
which shall seek to restrain, prohibit, invalidate or collect damages arising
out of the Agreement or any other transaction contemplated hereby, and which in
the judgment of BBV makes it inadvisable to proceed with the Agreement.
7.3 OPINION OF COUNSEL. BBV shall have received an opinion dated as of
the Closing Date from counsel for MTLM, in form and substance acceptable to the
BBV, to the effect that:
(i) MTLM is a corporation duly organized and existing and
in good standing under the laws of the State of Delaware and is
authorized to carry on the business now conducted by it;
(ii) MTLM has obtained all necessary authorizations and
consents of its Board of Directors to effect the transactions
contemplated in this Agreement hereto;
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(iii) Such counsel has no actual knowledge (without any
independent investigation of any sort) of any litigation, proceeding
or investigation pending or threatened which might result in any
Material Adverse Change in the validity of this Agreement; and
(iv) This Agreement is a valid and binding obligation of
MTLM, and enforceable against it in accordance with its terms, except
as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of
creditors' rights generally.
7.4 ADDITIONAL DELIVERIES. BBV shall have received (i) the reports
required to be delivered by the General Partner to its limited partners pursuant
to Section 9.4(a) of the Partnership Agreement for the fiscal year ending
December 31, 1996, (ii) payment in full of the Additional Payments described in
SECTION 1.4(a), and (iii) payment in full of an amount equal to the net tax
effect on BBV after decreasing any Additional Tax Payments as a result of the
audit examination of the Returns for 1993, 1994 and 1995, by the amount of any
decrease in income taxes which will be due BBV as a result of any related
adjustments to such Returns.
7.5 RELEASE. The Company, the General Partner and the Shareholders shall
have delivered to BBV a release of any claims they have or may have against BBV
arising from any act or failure to act prior to the Closing, in a form
reasonably satisfactory to BBV's legal counsel, duly executed by the Company,
the General Partner and the Shareholders.
ARTICLE VIII
INDEMNIFICATION
8.1 AGREEMENT BY BBV TO INDEMNIFY. BBV agrees to indemnify and hold MTLM
harmless from and against the aggregate of all Indemnifiable Damages (as defined
below) to the extent that the aggregate amount of such Indemnifiable Damages
does not exceed the Purchase Price.
For purposes of this Agreement, "Indemnifiable Damages" means, without
duplication, the aggregate of all expenses, losses, costs, deficiencies,
liabilities and damages (including, without limitation, related counsel and
paralegal fees and expenses) incurred or suffered by MTLM, to the extent (i)
resulting from any breach of a representation or warranty made by BBV in or
pursuant to this Agreement, (ii) resulting from any breach of the covenants or
agreements made by BBV pursuant to this Agreement, or (iii) resulting from any
inaccuracy in any certificate delivered by BBV pursuant to this Agreement.
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ARTICLE IX
DEFINITIONS
9.1 DEFINED TERMS. As used herein, the following terms shall have the
following meanings:
"Affiliate" shall have the meaning ascribed to it in Rule 12b-2
of the General Rules and Regulations under the Exchange Act, as in
effect on the date hereof.
"Class A Purchase Agreements" defined in SECTION 5.8.
"Closing Date" defined in SECTION 1.2.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means shares of MTLM's common stock, $.01 par value.
"Contract" means any indenture, lease, sublease, license, loan
agreement, mortgage, note, indenture, restriction, will, trust,
commitment, obligation or other contract, agreement or instrument,
whether written or oral.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Governmental Authority" means any nation or government, any
state, regional, local or other political subdivision thereof, and any
entity or official exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including, but not limited
to, any conditional sale or other title retention agreement, any lease
in the nature thereof, and the filing of or agreement to give any
financing statement under the Uniform Commercial Code or comparable
law or any jurisdiction in connection with such mortgage, pledge,
security interest, encumbrance, lien or charge).
"Material Adverse Change (or Effect)" means a change (or effect),
in the condition (financial or otherwise), properties, assets,
liabilities, rights, obligations, operations, business or prospects
which change (or effect) individually or in the aggregate, is
materially adverse to such condition, properties, assets, liabilities,
rights, obligations, operations, business or prospects.
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"Partnership Agreement" means that certain limited partnership
agreement of the Company dated as of October 1, 1990 as amended by
that certain amendment dated as of December 4, 1995.
"Person" means an individual, partnership, corporation, business
trust, joint stock company, estate, trust, unincorporated association,
joint venture, Governmental Authority or other entity, of whatever
nature.
"Purchase Price" defined in SECTION 1.1.
"Purchased Securities" defined in RECITAL A.
"Shareholders" means ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇.
9.2 OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in this Agreement shall have the defined
meanings when used in any certificates, reports or other documents made or
delivered pursuant hereto or thereto, unless the context otherwise requires.
(b) Terms defined in the singular shall have a comparable meaning
when used in the plural, and vice versa.
(c) As used herein, the neuter gender shall also denote the masculine
and feminine, and the masculine gender shall also denote the neuter and
feminine, where the context so permits.
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
10.1 TERMINATION. This Agreement may be terminated at any time prior to
the Closing Date:
(a) at any time prior to the Closing Date, by mutual written consent
of all of the parties hereto at any time prior to the Closing; or
(b) at any time prior to the Closing Date, by MTLM in the event of a
material breach by BBV of any provision of this Agreement which shall not have
been waived by MTLM in writing; or
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(c) at any time prior to the Closing Date, by either party if the
Closing shall not have occurred by April 30, 1997; provided, however, that
neither MTLM nor BBV shall be entitled to terminate this Agreement pursuant to
this SECTION 10.1(c), if such party's knowing or willful breach of this
Agreement has prevented the consummation of the transactions contemplated
hereby;
(d) at any time prior to the Closing Date, by either party if, prior
to the Closing Date, MTLM terminates the Class A Purchase Agreements, or
otherwise does not close on such purchase prior to or contemporaneously with the
Closing; or
(e) at any time within two business days following the expiration of
the "HSR Filing Deadline", as hereinafter defined, by BBV, in the event the
notification and report form required for the transactions contemplated by this
Agreement and the Class A Purchase Agreements pursuant to the HSR Act have not
been filed with the FTC and the DOJ. For purposes hereof, the "HSR Filing
Deadline" is the date seven business days following the date of this Agreement,
provided that for each day, if any, that such filing has been delayed by any
action or inaction on the part of BBV, then the HSR Filing Deadline shall be
extended by the number of days equal to such delay.
10.2 EFFECT OF TERMINATION. Except for the provisions of SECTION 5.4
which shall survive the termination of this Agreement, in the event of
termination of this Agreement pursuant to SECTION 10.1, this Agreement shall
forthwith become void.
ARTICLE XI
GENERAL PROVISIONS
11.1 NOTICES. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and shall be delivered by certified
or registered mail (first class postage prepaid), guaranteed overnight delivery,
or facsimile transmission if such transmission is confirmed by delivery by
certified or registered mail (first class postage pre-paid) or guaranteed
overnight delivery, to the following addresses and telecopy numbers (or to such
other addresses or telecopy numbers which such party shall designate in writing
to the other party):
(a) IF TO MTLM TO:
Metal Management, Inc.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: Chief Executive Officer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
WITH A COPY TO:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Ltd.
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▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) IF TO BBV TO:
BancBoston Ventures Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
WITH A COPY TO:
▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
AND TO:
▇. ▇▇▇▇▇▇ Iron & Metal, Inc
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
11.2 ENTIRE AGREEMENT. This Agreement (including the Schedules attached
hereto) and other documents delivered at the Closing pursuant hereto, contains
the entire understanding of the parties in respect of its subject matter and
supersedes all prior agreements and understandings (oral or written) between or
among the parties with respect to such subject matter. The Exhibits and
Schedules constitute a part hereof as though set forth in full above.
11.3 EXPENSES. Except as otherwise provided herein, (i) MTLM shall pay its
own fees and expenses, including its own counsel fees, incurred in connection
with this Agreement or any transaction contemplated hereby and (ii) as provided
in the Securities Purchase Agreement, dated October 1, 1990, as amended, the
Company, at Closing, shall pay all of the fees and expenses, including counsel
fees, incurred by BBV in connection with this Agreement and the transactions
contemplated hereby.
11.4 AMENDMENT; WAIVER. This Agreement may not be modified, amended,
supplemented, canceled or discharged, except by written instrument executed by
all parties. No
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failure to exercise, and no delay in exercising, any right, power or
privilege under this Agreement shall operate as a waiver, nor shall any
single or partial exercise of any right, power or privilege hereunder
preclude the exercise of any other right, power or privilege. No waiver of
any breach of any provision shall be deemed to be a waiver of any preceding
or succeeding breach of the same or any other provision, nor shall any waiver
be implied from any course of dealing between the parties. No extension of
time for performance of any obligations or other acts hereunder or under any
other agreement shall be deemed to be an extension of the time for
performance of any other obligations or any other acts. The rights and
remedies of the parties under this Agreement are in addition to all other
rights and remedies, at law or equity, that they may have against each other.
11.5 BINDING EFFECT; ASSIGNMENT. The rights and obligations of this
Agreement shall bind and inure to the benefit of the parties and their
respective successors and assigns. Nothing expressed or implied herein shall be
construed to give any other person any legal or equitable rights hereunder.
Except as expressly provided herein, the rights and obligations of this
Agreement may not be assigned by BBV without the prior written consent of MTLM.
11.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one and the same instrument.
11.7 INTERPRETATION. When a reference is made in this Agreement to an
article, section, paragraph, clause, schedule or exhibit, such reference shall
be deemed to be to this Agreement unless otherwise indicated. The headings
contained herein and on the schedules are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement or the
schedules. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation." Time shall be of the essence in this Agreement.
11.8 GOVERNING LAW; INTERPRETATION. This Agreement shall be construed in
accordance with and governed for all purposes by the laws of the State of
Illinois applicable to contracts executed and to be wholly performed within such
State.
11.9 ARM'S LENGTH NEGOTIATIONS. Each party herein expressly represents and
warrants to all other parties hereto that (a) before executing this Agreement,
said party has fully informed itself of the terms, contents, conditions and
effects of this Agreement; (b) said party has relied solely and completely upon
its own judgment in executing this Agreement; (c) said party has had the
opportunity to seek and has obtained the advice of counsel before executing this
Agreement; (d) said party has acted voluntarily and of its own free will in
executing this Agreement; (e) said party is not acting under duress, whether
economic or physical, in executing this Agreement; and (f) this Agreement is the
result of arm's length negotiations conducted by and among the parties and their
respective counsel.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
Date: March 10, 1997 By: /s/ T. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------- -----------------------------
Name: T. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
Title: Chairman of the Board
--------------------------
BANCBOSTON VENTURES INC., A
MASSACHUSETTS CORPORATION
Date: March 10, 1997 By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------- -----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Title: Vice President
--------------------------
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SCHEDULE 3.7
TRANSACTIONS WITH AFFILIATES
1. The Partnership Agreement
2. Amendment and Consent letter agreement dated as of December 4, 1995 between
the Company and BBV.
3. Securities Purchase Agreement dated as of October 1, 1990, between the
General Partner and BBV.
4. Consulting Agreement dated as of October 1, 1990, between the Company and
First Capital Corporation of Boston.
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SCHEDULE 5.8
LIST OF AGREEMENTS
1. Purchase Agreement, effective January 17, 1997, by and among Metal
Management, Inc., a Delaware corporation, ▇. ▇▇▇▇▇▇ Iron & Metal, Inc., an
Ohio corporation, ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ (the
"Purchase Agreement").
2. First Amendment to Purchase Agreement, effective March 6, 1997, by and
among Metal Management, Inc., a Delaware corporation, ▇. ▇▇▇▇▇▇ Iron &
Metal, Inc., an Ohio corporation, ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇.
3. Purchase Price Note, in the form attached as Exhibit A to the Purchase
Agreement, as amended.
4. Stock Pledge and Security Agreement, in the form attached as Exhibit B to
the Purchase Agreement, as amended.
5. Employment Agreements of ▇▇▇▇, ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇, in the forms
attached as EXHIBITS C, D AND E to the Purchase Agreement, as amended (the
"Employment Agreements").
6. Escrow Agreement, in the form attached as EXHIBIT F to the Purchase
Agreement, as amended.
7. Side letter agreement, to be dated as of the closing date under the
Purchase Agreement, addressed to ▇▇▇▇, ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ by Metal
Management, Inc.
8. Warrants, to be dated as of the closing date of the Purchase Agreement, for
an aggregate of 1,400,000 shares of the Common Stock of Metal Management,
Inc., exercisable as described in the Employment Agreements.
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