Stock Purchase Agreement (2007)Full Document 

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STOCK PURCHASE AGREEMENT

BY AND AMONG

TUBE CITY IMS CORPORATION,

MILL SERVICES HOLDINGS, LLC,

THE OTHER SELLERS SET FORTH ON ANNEX A HERETO

AND

METAL SERVICES ACQUISITION CORP.

DATED AS OF NOVEMBER 10, 2006


TABLE OF CONTENTS

 

          Page

ARTICLE 1 DEFINITIONS

   1

1.1

   Definitions    1

1.2

   Other Capitalized Terms    9

1.3

   Interpretive Provisions    11

ARTICLE 2 PURCHASE AND SALE OF SHARES

   12

2.1

   Share Purchase    12

2.2

   Treatment of Options    13

2.3

   Estimated Closing Statement    14

2.4

   Purchase Price Adjustment    14

2.5

   Transactions to be Effected at the Closing    15

2.6

   Payment of Option Consideration    16

2.7

   Relationship Among the Securityholders    16

2.8

   Escrow Account    18

2.9

   Closing Indebtedness    19

2.10

   Closing Deliveries of Sellers    19

2.11

   Closing Deliveries of the Buyer    20

ARTICLE 3 THE CLOSING

   20

3.1

   Closing; Closing Date    20

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE SELLERS

   21

4.1

   Organization    21

4.2

   Binding Obligations    21

4.3

   No Defaults or Conflicts    21

4.4

   No Governmental Authorization Required    22

4.5

   The Shares    22

4.6

   Litigation    22

4.7

   Brokers    23

4.8

   Foreign Person    23

4.9

   Exclusivity of Representations    23

ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE COMPANY

   23

5.1

   Organization and Qualification    23

5.2

   Capitalization of the Company    24

5.3

   Subsidiaries    24

5.4

   Binding Obligation    25

5.5

   No Defaults or Conflicts    25

5.6

   No Governmental Authorization Required    26

5.7

   Financial Statements    26

5.8

   Intellectual Property    27

5.9

   Compliance with the Laws    28

5.10

   Contracts    28

 

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5.11

   Litigation    30

5.12

   Taxes    30

5.13

   Permits    31

5.14

   Employee Benefit Plans    31

5.15

   Environmental Compliance    33

5.16

   Insurance    34

5.17

   Real Property    34

5.18

   Affiliate Transactions    35

5.19

   Absence of Certain Changes or Events    35

5.20

   Suppliers and Customers    35

5.21

   Brokers    35

5.22

   Labor and Employee Relations    36

5.23

   Certain Payments    36

5.24

   Exclusivity of Representations    36

ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF BUYER

   36

6.1

   Organization    37

6.2

   Binding Obligation    37

6.3

   No Defaults or Conflicts    37

6.4

   No Governmental Authorization Required    37

6.5

   Litigation    38

6.6

   Brokers    38

6.7

   Sufficient Funds    38

6.8

   Buyer’s Reliance    38

6.9

   Investment Purpose    39

6.10

   Business of Buyer    39
ARTICLE 7 COVENANTS    40

7.1

   Conduct of Business of the Company    40

7.2

   Access to Information; Confidentiality; Public Announcements    42

7.3

   Financing    44

7.4

   Filings and Authorizations; Consummation    45

7.5

   Resignations    46

7.6

   Further Assurances    46

7.7

   Officer and Director Indemnification and Insurance    46

7.8

   Transfer of Shares    47

7.9

   Termination of Agreements    47

7.10

   Waiver of Conflicts Regarding Representation    47

7.11

   Exclusivity    47

7.12

   Release    48

7.13

   Net Revolver Calculations    48

ARTICLE 8 CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER

   48

8.1

   Representations and Warranties    48

8.2

   Performance    49

8.3

   Officer’s Certificate    49

8.4

   HSR Act; Legal Prohibition    49

 

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8.5

   Financing    49

8.6

   Material Adverse Effect    50

8.7

   Hedging Transactions    50

ARTICLE 9 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLERS

   50

9.1

   Representations and Warranties Accurate    50

9.2

   Performance    50

9.3

   Officer Certificate    50

9.4

   HSR Act; Legal Prohibition    50

ARTICLE 10 INDEMNIFICATION

   51

10.1

   Securityholders’ Indemnification    51

10.2

   Buyer’s Indemnification    52

10.3

   Limitations on Amount of Damages    52

10.4

   Procedures    55

10.5

   Survival    57

10.6

   Mitigation of Damages    58

10.7

   Calculation of Damages    58

10.8

   Exclusive Remedy    58

10.9

   Treatment of Indemnification Payments    59

10.10

   Interpretation of Limitations    59

10.11

   Knowledge and Investigation    59

10.12

   Limitation of Damages    59

ARTICLE 11 TERMINATION

   60

11.1

   Termination    60

11.2

   Survival After Termination    60

ARTICLE 12 MISCELLANEOUS

   61

12.1

   Expenses    61

12.2

   Amendment    61

12.3

   Entire Agreement    61

12.4

   Headings    62

12.5

   Notices    62

12.6

   Exhibits and Schedules    64

12.7

   Waiver    64

12.8

   Binding Effect; Assignment    64

12.9

   No Third Party Beneficiary    64

12.10

   Counterparts; Parties    64

12.11

   Governing Law and Jurisdiction    65

12.12

   Consent to Jurisdiction and Service of Process    65

12.13

   WAIVER OF JURY TRIAL    65

12.14

   Conveyance Taxes    65

12.15

   Severability    65

12.16

   Specific Performance    66

 

iv


STOCK PURCHASE AGREEMENT

STOCK PURCHASE AGREEMENT (the “Agreement”), dated as of November 10, 2006, by and among Tube City IMS Corporation, a Delaware corporation (the “Company”), Mill Services Holdings, LLC, a Delaware limited liability company (“Wellspring”) as a Seller and as Securityholder Representative, the other sellers listed on Annex A (Wellspring and each other seller listed on Annex A each individually referred to herein as a “Seller” and collectively, the “Sellers”), and Metal Services Acquisition Corp., a Delaware corporation (the “Buyer”).

RECITALS

WHEREAS, as of the date hereof, each Seller is the record owner of the shares of Common Stock (hereinafter defined) of the Company set forth opposite such Seller’s name on Annex A attached hereto (the “Shares”), which represent in the aggregate all of the issued and outstanding capital stock of the Company.

WHEREAS, except with respect to the Rollover Shares (as defined below) owned by the Management Sellers (as defined below), the Sellers wish to sell to the Buyer, and the Buyer wishes to purchase from the Sellers, all of the Shares upon the terms and subject to the conditions set forth in this Agreement.

NOW THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties to this Agreement agree as follows:

ARTICLE 1

DEFINITIONS

1.1 Definitions. The following terms, whenever used herein, shall have the following meanings for all purposes of this Agreement.

Action” means any complaint, claim, prosecution, indictment, action, suit, arbitration or proceeding by or before any Governmental Authority or arbitrator.

Affiliate” means, with respect to any Person, any other Person controlling, controlled by or under common control with, or the parents, spouse, lineal descendants or beneficiaries of, such Person. The term “control” (as used in the terms “controlling”, “controlled by” or “under common control with”) means holding the power to direct or cause the direction of the management and policies of a Person, whether by ownership of equity securities, contract or otherwise.

 

1


Antitrust Laws” means the HSR Act and any other United States federal or state or foreign statutes, rules, regulations, orders, decrees, administrative or judicial doctrines or other laws that are designed to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade.

Average Net Revolver” means an amount equal to the excess of (i) the arithmetic average of the Net Revolver as of the opening of business for each of the Business Days during the 60 days prior to the Closing Date, over (ii) the expenditures up to $3,000,000 of expenditures to the extent made between September 30, 2006 and December 31, 2006 with respect to the items described on Schedule 1.1.

Balance Sheet” means unaudited condensed consolidated balance sheet of the Company and its Subsidiaries as of the Balance Sheet Date.

Balance Sheet Date” means June 30, 2006.

Business Day” means any day other than a Saturday, a Sunday or a day on which banks in New York City are authorized or obligated by law or executive order to close.

Cap” means $46,500,000.

Closing Cash” means all cash, all lock box receipts, all cash equivalents, and all marketable securities, in each case of the Company and its Subsidiaries as of the Designated Time immediately prior to Closing, determined in accordance with GAAP.

Closing Indebtedness” means the Indebtedness (as defined in clauses (i), (ii) and (iii) of the definition of Indebtedness) of the Company and its Subsidiaries and, without duplication, guarantees by the Company and its Subsidiaries of Indebtedness (as defined in clauses (i), (ii) and (iii) of the definition of Indebtedness) of any other Person, in each case outstanding as of the Designated Time, including all accrued and unpaid interest on such Indebtedness through and including the Designated Time and all premiums, penalties and other amounts then due and owing in respect of such Indebtedness.

Closure Plan Approval” means the approval by PADEP and ACDH of a closure plan for the West Mifflin Landfill pursuant to the West Mifflin Consent Order.

Code” means the United States Internal Revenue Code of 1986, as amended.

Collateral Source Payments” means (i) any amounts recovered by an Indemnified Party, the Company or its Subsidiaries pursuant to any indemnification by, or indemnification agreement with, any Person other than the Indemnifying Party, and (ii) any insurance proceeds or other cash receipts or reimbursements received by an Indemnified Party, the Company or its Subsidiaries from any Person other than the Indemnifying Party.

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