SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8K
CURRENT REPORT
Date of Report: December 23, 1998
Commission File No. 0-15543
METAL RECOVERY TECHNOLOGIES INC.
(Exact name of Registrant as specified in its charter)
Delaware 71-0628061
(State of Incorporation) (IRS Employee Identification No.)
415 East 151st Street
East Chicago, Indiana 46312
(Address of principle executive office) (Zip Code)
Registrant's telephone number, including area code: (219) 397-6261
Item 5. Other Events
On the 2nd December 1998 the Company signed an Asset Purchase and Sale Agreement
selling its dezincing assets and patents to a newly formed United Kingdom
company, Metals Investment Trust Ltd. A copy of the agreement is attached
hereto.
In summary the transaction is as follows:
The assets of Metals Investment Trust Ltd is comprised of the Company's former
dezincing technology assets and patents , previously held by the Company's
operating subsidiaries Metal Recovery Industries (US) Inc and Zinc Recovery
(East Chicago) Inc, plus $3,500,000 of cash. Metals Investment Trust Ltd is
owned 50% by the Company and 50% by a group of International Investors.
The $3,500,000 of cash is being utilized by Metals Investment Trust Ltd to
finance the engineering upgrade at the East Chicago facility to bring it into
commercial operation.
In order for this transaction to be concluded Plenbrick Ltd and Zinc Investments
Inc, the Company's collateral lenders agreed to remove their security presently
secured on the assets, patents and shares of Metal Recovery Industries (US) Inc
and Zinc Recovery (East Chicago) Inc. New conversion rates of their existing
loans are currently being negotiated.
Signed
/s/ Roy Pearce /s/
Company Secretary
<PAGE>
ASSET PURCHASE AND SALE AGREEMENT
dated December 7, 1998
by and among
METALS INVESTMENT TRUST LTD.
as Buyer,
METAL RECOVERY INDUSTRIES (U.S.), INC.
and
ZINC RECOVERY (EAST CHICAGO), INC.
and
POWERSCOURT LIMITED,
as Sellers
and
METAL RECOVERY TECHNOLOGIES, INC.,
and
MICHAEL LUCAS
<PAGE>
ASSETPURCHASE AND SALE AGREEMENT dated November,__ 1998 by and among Metals
Investment Trust Ltd., a company organized under the laws of England and Wales
("Buyer"), Metal Recovery Industries (U.S.), Inc., a Delaware corporation
("MRI"), Zinc Recovery (East Chicago), Inc., an Indiana corporation ("ZRI"),
Powerscourt Limited, a Nevis company ("Powerscourt," and together with ZRI and
MRI, "Sellers," and each, individually, a "Seller"), Metal Recovery
Technologies, Inc., a Delaware corporation ("MRT," and together with Sellers,
the "Corporate Seller Parties," and each, a "Corporate Seller Party") and
Michael Lucas ("Lucas" and, together with the Corporate Seller Parties, the
"Seller Parties," and each, a "Seller Party").
W I T N E S S E T H:
WHEREAS, Sellers, collectively, own certain patent rights and other
personal property and real property relating to a metal recycling business that
extracts zinc coatings from galvanized ferrous scrap through a caustic leaching
process which recovers a high-quality ferrous scrap and an electro-deposited
zinc powder (the "Business");
WHEREAS, MRI and ZRI are wholly-owned subsidiaries of MRT and in order to
induce Buyer to enter into this Agreement, MRT has agreed to undertake certain
obligations hereunder;
WHEREAS, Lucas is a shareholder of MRT and in order to induce Buyer to
enter into this Agreement, Lucas has agreed to undertake certain obligations
hereunder; and,
WHEREAS, Sellers desire to sell to Buyer, and Buyer desires to purchase
from Sellers, the aforesaid assets from Sellers on the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Buyer and each of the Seller Parties (collectively, the "Parties" and,
individually, a "Party"), intending to be legally bound, hereby agree as
follows:
ARTICLE 1 - PURCHASE AND SALE OF ASSETS; CLOSING; RELATED AGREEMENTS
1.1 Sale and Purchase. Subject to the terms and conditions (including, the
schedules attached hereto) set forth herein, at the Closing, each of the Sellers
shall sell, assign and deliver to Buyer free and clear of all pledges, security
interests, liens, claims and other encumbrances (collectively, "Encumbrances,"
each, an "Encumbrance"), and Buyer shall purchase and accept from Sellers, all
of Sellers' right, title and interest in and to the following assets and rights
(collectively, the "Assets"):
(a) Powerscourt shall convey good, marketable and insurable fee simple
title to the buildings and improvements located on the real property
described on Schedule 1.1(a)(i) (the "Real Property") to Buyer by warranty
deed in the form of the deed attached hereto as Exhibit 1.1(a), free and
clear of all Encumbrances, subject only to the items set forth on Schedule
1.1(a)(ii) (the "Permitted Title Exceptions"), and any leases or any other
matters of title to which Buyer shall expressly consent in writing pursuant
hereto. Seller shall remove any Encumbrances (other than Permitted Title
Exceptions) against the Real Property at or before the Closing (as defined
below). The Parties agree that the value of the Real property is Five
Hundred Thousand dollars ($500,000.00).
(b) MRI shall sell, transfer and assign to Buyer free and clear of all
Encumbrances except as otherwise set forth herein all of MRI's rights,
title and interest in and to (i) the. patent identified as U.S. Patent No.
5,779,878 and attached hereto as Exhibit 1.1(b)(i) (the "Patent"),
including, but not limited to, all patents and patent applications based in
whole or in part on the Patent, and (ii) the patent application identified
as U.S. Patent Application Serial No. 08/680,345 and attached hereto as
Exhibit 1.1(b)(ii) (the "Patent Application"), including, but not limited
to, all patents and patent applications (including divisional, continuing
or reissue applications) related thereto (collectively, with the aforesaid
rights relating to the Patent, the ("Patent Rights"), pursuant to
assignments substantially in the form of Exhibit 1.1(b)(iii) attached
hereto (the "Patent Assignments"); and
(c) ZRI shall sell, transfer and assign to Buyer free and clear of all
Encumbrances the plant, fixtures and fittings described on Schedule 1.1(c)
attached hereto (the "ZRI Assets") pursuant to a bill of sale in the form
of Exhibit 1.1(c) attached hereto.
1.2 Consideration. In consideration for the sale, assignment and delivery
of the Assets under this Agreement, Buyer shall deliver to Sellers at the
Closing (as defined below), respectively, the following (collectively, the
"Purchase Price"):
(a) Two Hundred Eighty-Seven Thousand Five Hundred (287,500) "B"
Shares of 3.126 pence each of Buyer ("Buyer Shares") to Powerscourt, plus
repayment of Powerscourt's debt in the amount of Two Hundred Twelve
Thousand Five Hundred dollars ($212,500) as set forth in Schedule 1.2(a)
attached hereto or, at the option of Buyer, Two Hundred Six Thousand Five
Hundred dollars ($206,500) with respect to such debt, plus payment of Six
Thousand dollars ($6,000) to the appropriate authorities with respect to
sales tax relating to the transfer of the Real Property pursuant hereto;
(b) Three Million Two Hundred Twelve Thousand Five Hundred (3,212,500)
Buyer Shares to MRI, plus repayment of MRI's debt in the amount of Two
Hundred Eighty-Seven Thousand Five Hundred dollars ($287,500) as set forth
in Schedule 1.2(a); and
(c) Five Hundred Thousand (500,000) Buyer Shares to ZRI.
1.3 No Assumption of Liabilities. Buyer shall not assume in connection with
its acquisition of the Assets hereunder or otherwise any debts, liabilities or
obligations of any of the Sellers, whether known, unknown, contingent, disclosed
or undisclosed, including, but not limited to, any liabilities set forth in any
schedule hereto ("Seller Debts") and Buyer shall not otherwise have any
liability for any of the Seller Debts, incurred prior to or after the Closing or
arising out of any transaction by, or any event occurring with respect to any of
the Sellers prior to or after the Closing.
1.4 Passage of Title at Closing. Upon delivery of the instruments of sale,
conveyance, assignment, transfer and delivery, title to the Assets shall pass to
Buyer at the Closing. At the Closing, Sellers shall put Buyer in full, complete
and quiet possession and enjoyment of all of the Assets and from and after the
Closing the ownership and operation of the Assets shall be for the account and
risk of Buyer.
1.5 Lease Payment Forgiveness. As of the Closing Date (as defined below)
Powerscourt shall forgive the payment by ZRI of any and all amounts due from ZRI
to Powerscourt with respect to ZRI's use of the Real Property prior to the
Closing Date.
1.6 Closing: Time And Place. The closing of the transactions contemplated
hereby (the "Closing") shall occur on or before November 20, 1998 (the "Closing
Date") at the offices of Kelley Drye & Warren LLP, 1200 19th Street, N.W., Suite
500, Washington, D.C. 20036, unless the Parties mutually agree to another time
or location.
1.7 Certain Closing Events. The Buyer Shares to be delivered at the Closing
shall be held by Young pending the receipt of evidence satisfactory to counsel
to Buyer that all of the obligations described on Schedule 1.2(a) have been
satisfied.
ARTICLE 2 - REPRESENTATIONS AND WARRANTIES REGARDING BUYER
Buyer hereby represents and warrants to Sellers as follows:
2.1 Organization. Buyer is a company duly organized and validly existing
under the laws of England and Wales and has all requisite power and authority,
corporate and otherwise, necessary to (a) carry on its business as presently
conducted by it; (b) execute, deliver and perform its obligations under this
Agreement; and (c) consummate the transactions contemplated hereby.
2.2 Authorization, etc. The execution and delivery by Buyer of this
Agreement, the performance by Buyer of its obligations hereunder and the
consummation by Buyer of the transactions contemplated hereby have been duly
authorized by all necessary shareholder, board and other corporate action on the
part of Buyer. This Agreement constitutes the legal, valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms,
except insofar as enforceability may be limited by bankruptcy, insolvency,
moratorium or other laws that may affect creditors' rights and remedies
generally and by principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).
2.3 No Breach. The execution and delivery by Buyer of this Agreement, the
performance by Buyer of its obligations hereunder and the consummation by Buyer
of the transactions contemplated hereby will not (a) conflict with, result in
any violation of or constitute a default under the Memorandum of Association or
Articles of Association of Buyer, or (b) constitute a default under, result in a
violation or breach of, result in the cancellation or termination of, accelerate
the performance required under or result in the creation of any Encumbrance upon
any of the properties of Buyer pursuant to any contract, mortgage, guaranty,
deed of trust, note, indenture, bond, lease, agreement or other instrument to
which Buyer is a party or by which any of such properties is bound.
2.4 Buyer Shares. Upon consummation of the Closing, pursuant to the terms
hereof, all of the Buyer Shares to be delivered at the Closing shall have been
duly authorized, validly issued, fully paid and non-assessable and title thereto
shall pass to the Sellers free and clear of all preemptive rights, liens, claims
and Encumbrances, except as otherwise created by this Agreement.
2.5 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on by Buyer directly with the
Seller Parties and without the intervention of any other person and in such
manner as not to give rise to any valid claim against any of the Parties for any
finder's fee, brokerage commission or like payment.
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES REGARDING SELLERS
Each of the Seller Parties, jointly and severally, hereby represents and
warrants to Buyer as follows, except that Powerscourt shall only be deemed to
represent and warrant with respect to itself and shall not be deemed to
represent and warrant with respect to Sections 3.3, 3.6, 3.8, 3.10, 3.11, 3.12,
3.13, 3.14, 3.15, 3.16, 3.17, 3.20, 3.23, 3.24, 3.25, 3.27, 3.28, and 3.29.
3.1 Organization. Except as set forth in the last three sentences of this
Section 3.1, each of the Corporate Seller Parties is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization and has all of the requisite power and authority,
corporate and otherwise, necessary to (a) carry on its business as presently
conducted by it; (b) execute, deliver and perform its obligations under this
Agreement and the other agreements described herein or contemplated hereby to
which such Corporate Seller Party will be a party (the "Related Seller
Agreements"); (c) consummate the transactions contemplated hereby and thereby;
and (d) own, lease or use the properties owned, leased or used by it. Each
Corporate Seller Party is duly qualified or licensed and in good standing as a
foreign corporation authorized to do business under the laws of all
jurisdictions in which the ownership of such Seller Party's assets or the
conduct of such Corporate Seller Party's business require it to be so qualified
or licensed. MRT has failed to pay taxes in the State of Delaware in connection
with the maintenance of its corporate franchise (the "Unpaid Taxes").
Accordingly, MRT is not in good standing in the State of Delaware. Immediately
upon the payment in full of the Unpaid Taxes, all of the representations and
warranties with respect to MRT in this Section 3.1 will be true and accurate in
all respects as of the date hereof.
3.2 Authorization, etc. The execution and delivery by Sellers of this
Agreement and the Related Seller Agreements, the performance by Sellers of their
respective obligations hereunder and, except as set forth in Section 3.3, below,
thereunder and the consummation by Sellers of the transactions contemplated
hereby and thereby have been duly authorized by all necessary, shareholder,
board and other corporate action on the part of Sellers. This Agreement and the
Related Seller Agreements constitute the legal, valid and binding obligations of
Sellers, enforceable against them in accordance with their respective terms,
except insofar as enforceability may be limited by bankruptcy, moratorium or
other laws that may affect creditors' rights and remedies generally and by
principles of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law).
3.3 MRT Shareholder Approval. No approval by the shareholders of MRT is
required for the consummation of any or all of the transactions contemplated
hereby.
3.4 No Breach. Except as set forth in Schedule 3.4 attached hereto, the
execution and delivery by each of the Seller Parties of this Agreement and the
Related Seller Agreements to which such Seller Party is a party, the performance
by the Seller Parties of their respective obligations hereunder and thereunder
and the consummation by the Seller Parties of the transactions contemplated
hereby and thereby will not (a) conflict with, result in any violation of or
constitute a default under their respective certificate of incorporation,
articles of incorporation, or memorandum of association, as the case may be, or
articles of association or by-laws, as the case may be, in each case as amended
to date (collectively, "Charter Documents"), (b) constitute a default under,
result in a violation or breach of, result in the cancellation or termination
of, accelerate the performance required under or result in the creation of any
Encumbrance upon any of the properties of any of the Seller Parties, pursuant to
any contract, mortgage, guaranty, deed of trust, note, indenture, bond, lease,
agreement or other instrument to which any of the Seller Parties is a party or
by which any of their respective properties is bound or (c) result in a
violation of, or conflict with, any law, ordinance, rule, regulation, order,
writ, judgment, award, edict or decree applicable to any Seller Party.
3.5 Consents. Except as set forth in Schedule 3.5 attached hereto, no
consent, approval, exemption or authorization is required to be obtained from,
no notice is required to be given to and no filing is required to be made with
any third party (including, without limitation, any governmental and
quasi-governmental agency, authority and instrumentality or court of competent
jurisdiction) by any Seller Party, (a) in order to authorize or permit the
consummation by the Seller Parties of the transactions contemplated by this
Agreement and the Related Seller Agreements or (b) under or pursuant to any
governmental or quasi-governmental permits, licenses, consents, authorizations
or approvals held by or issued to any Seller Party (including, without
limitation, environmental, health, safety and operating permits and licenses) by
reason of this Agreement or any of the Related Seller Agreements or the
consummation of the transactions contemplated hereby or thereby.
3.6 Tax Matters.
(a) Except as set forth in Schedule 3.6(a) attached hereto, (i) each
of the Corporate Seller Parties has filed, in a timely manner, all returns
required to be filed with all federal, state, local and non-United States
authorities or instrumentalities ("Tax Returns") with respect to any and
all income, real and personal property, excise and other taxes or similar
charges or assessments ("Taxes") and all such Tax Returns were correct and
complete in all respects; (ii) all Taxes owed by any of the Corporate
Seller Parties (whether or not shown on any Tax Return) have been paid;
(iii) none of the Corporate Seller Parties currently is the beneficiary of
any extension of time within which to file any Tax Return; (iv) no claim
has ever been made by an authority in a jurisdiction where any of the
Corporate Seller Parties does not file Tax Returns that it is or may be
subject to taxation by that jurisdiction; and (iv) there are no security
interests on any of the assets of any of the Corporate Seller Parties that
arose in connection with any failure (or alleged failure) to pay a Tax.
(b) Except as set forth in Schedule 3.6(b), each of the Corporate
Seller Parties has withheld and paid all Taxes required to have been
withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, shareholder or other third party.
(c) No shareholder, director or officer (or employee responsible for
Tax matters) of any of the Seller Parties expects any authority to assess
any additional Taxes for any period for which Tax Returns have been filed.
There is no dispute or claim concerning any liability for any Taxes of any
of the Corporate Seller Parties either (i) claimed or raised by any
authority in writing or (ii) as to which any of the shareholders, directors
and officers (and employees responsible for Tax matters) of the Corporate
Seller Parties has knowledge based upon personal contact with any agent of
such authority. Schedule 3.6(c) lists all federal, state, local, and
non-United States income Tax Returns filed with respect to any of the
Corporate Seller Parties for taxable periods ended on or after December 31,
1993, indicates those Tax Returns that have been audited, and indicates
those Tax Returns that currently are the subject of audit. The Corporate
Seller Parties have delivered to the Buyer correct and complete copies of
all federal income Tax Returns, examination reports, and statements of
deficiencies assessed against or agreed to by any of the Corporate Seller
Parties since December 31, 1993.
(d) None of the Seller Parties has waived any statute of limitations
in respect of Taxes or agreed to any extension of time with respect to a
Tax assessment or deficiency.
(e) The unpaid Taxes of each of the Corporate Seller Parties (i) does
not exceed the reserve for Tax Liability (rather than any reserve for
deferred Taxes established to reflect timing differences between book and
Tax income) set forth on the face of the most recent balance sheet of such
Corporate Seller Party (including, where applicable, any such reserve
reflected in a consolidated balance sheet with respect to MRT, MRI and ZRI
(a "Consolidated Reserve")), which balance sheet for each Corporate Seller
Party is identified on Schedule 3.6(e) (rather than in any notes thereto)
and (ii) do not exceed that reserve, including a Consolidated Reserve, as
adjusted for the passage of time through the Closing Date in accordance
with the past custom and practice of the Corporate Seller Parties in filing
their Tax Returns. Each balance sheet attached as Exhibit 3.6(e) is
accurate in all respects.
(f) Each of the Corporate Seller Parties has disclosed on its federal
income tax returns all positions taken therein that could give rise to a
substantial understatement of federal income Tax within the meaning of
Sections 6662 of the Internal Revenue Code of 1986, as amended (the
"Code"). None of the Corporate Seller Parties is a party to any Tax
allocation or sharing agreement. None of the Corporate Seller Parties (i)
has been a member of an affiliated group filing a consolidated federal
income Tax Return (other than a group the common parent of which was MRT)
or (ii) has any liability for the Taxes of any individual, entity or person
(other than any of the Corporate Seller Parties) under Treasury Regulation
Section 1.1502-6 (or any similar provision of state, local, or foreign
law), as a transferee or successor, by contract, or otherwise.
3.7 Real Property.
(a) Schedule 1.1(a) accurately identifies: (i) by legal description
all of the real property upon which the Business has been conducted to
date; (ii) all of the easements, rights of way, covenants, restrictions and
other rights and interests (including leases (the "Leases") to third
parties ("Tenants") by Sellers) that pertain to the Real Property; and
(iii) all suits, actions, proceedings, investigations and written claims
and all final orders, judgments and stipulations of any court of competent
jurisdiction presently outstanding that pertain to the Real Property.
(b) Except as described on Schedule 3.7(b) attached hereto, there are
no (i) pending or threatened condemnation proceedings relating to the Real
Property; (ii) pending or, to the knowledge of Sellers, threatened
litigation or administrative actions relating to the Real Property; or (ii)
other matters affecting materially and adversely the current use, occupancy
or value of the Real Property.
(c) The legal description set forth in Schedule 1.1(a) describes such
Real Property fully and adequately, the buildings and improvements are
located within the boundary lines of the described parcels of land, are not
in violation of applicable setback requirements, zoning laws or ordinances
(and none of the properties or buildings or improvements thereon are
subject to "permitted non-conforming use" or "permitted non-conforming
structure" classifications) and do not encroach on any easement that may
burden the land, the land does not serve any adjoining property for any
purpose inconsistent with the use of the land, the property is not located
within any flood plain or subject to any similar type restriction for which
any material permits or licenses necessary to the use thereof have not been
obtained and access to the property is provided by paved public
right-of-way.
(d) All facilities located on the Real Property have received all
approvals of governmental authorities (including licenses and permits)
required in connection with the ownership or operation thereof and have
been operated and maintained in accordance with applicable laws, rules and
regulations.
(e) Other than as described on Schedule 3.7(e), there are no leases,
subleases, licenses, concessions or other agreements, written or oral,
granting to any party or parties the right of use or occupancy of any
portion of the Real Property.
(f) There are no outstanding options or rights of first refusal to
purchase any of the Real Property, or any portion thereof or interest
therein.
(g) Other than ZRI, there are no parties in possession of the Real
Property.
(h) All facilities located on the Real Property are supplied with
utilities and other services necessary for the operation of such
facilities, including gas, electricity, water, telephone, sanitary sewer,
and storm sewer, all of which services are adequate in accordance with all
applicable laws, ordinances, rules and regulations and are provided via
public roads or via permanent, irrevocable, appurtenant easements
benefiting the Real Property.
(i) Each parcel of the Real Property abuts on and has direct vehicular
access to a public road or access to a public road via a permanent,
irrevocable, appurtenant easement benefiting such parcel of Real Property.
(j) A true, complete and accurate list of all of the service or
management contracts, equipment, labor or material contracts, maintenance
or repair contracts or other agreements (other than the Leases) that are in
force and effect and affect the Real Property or the operation, repair or
maintenance thereof, a complete list of such contracts or agreements being
contained in Schedule 3.7(j) attached hereto and by this reference made a
part hereof (the "Service Contracts"). All Service Contracts are in full
force and effect in accordance with their respective terms.
(k) There is no pending litigation or dispute, and Seller has received
no notice of any disputes, concerning the location of the lines and corners
of the Real Property, and Seller has not been served with any legal action
concerning the location of the lines and corners of the Real Property.
(l) To the best of Seller's knowledge and belief, there are no
material defects in or damage to any structures on the Real Property (the
"Building") or the other improvements located on the Real Property,
including, without limitation, the roof, the elevators, the structure and
the heating, air conditioning, plumbing, electrical, drainage, fire alarm
and exhaust systems and their component parts, the Building is structurally
sound and the operation of the Real Property complies with all applicable
zoning, environmental protection, fire, electrical, building and
development codes, rules and regulations (collectively, the "Codes").
Seller is not aware of, and has not received, any notification from any
governmental or public authority that the Real Property or any portion
thereof violates any of the Codes or that any work is required to be done
upon or in connection with the Real Property or any portion thereof. No
notice or warning from any governmental authority with respect to any
failure or alleged failure of Seller to comply with any of the Codes has
been issued or given, or, to the best of Seller's knowledge and belief, is
any such notice or warning proposed or threatened. The paved parking area
constructed on the Real Property currently contains sufficient parking
space for automobiles with respect to all present and foreseeable persons
working on, and visitors to, the Real Property and such spaces meet all
requirements of any governmental authority having jurisdiction over the
Real Property. No Tenant and no other party has any contractual parking
rights except as set forth in the Leases. There is no license, approval or
permit, necessary for either the lawful operation of the Real Property or
the lawful occupancy thereof, including, without limitation, utility,
building, zoning, subdivision control, land and water use, environmental
protection and flood hazard permits, which has not been obtained, and all
required permits and licenses have been paid for, are in full force and
effect, and are assignable by Seller at the Closing.
(m) Powerscourt will have, at the Closing, good, insurable and
marketable fee simple title to the Real Property, free and clear of all
liens and Encumbrances, other than the Permitted Title Exceptions and the
rights of tenants under the Leases in possession, as tenants only, and none
of the Real Property will be subject to any prior conveyance or assignment
to, or any superior possessory rights in, any third party.
(n) Other than as expressly set forth in this Agreement or otherwise
disclosed in writing to Buyer pursuant to this Agreement, there are no
undisclosed liabilities or agreements affecting the Real Property (or any
portion necessary) or Powerscourt, in its capacity as owner of the Real
Property.
(o) To the best of each of the Seller Parties' knowledge, all water,
sewer, gas, electric, telephone and drainage facilities and service
necessary to adequately supply the Real Property for its present use are
available on the Real Property and will be available at the time of the
Closing.
(p) None of the Seller Parties has taken any action (or failed to take
any action) and has received no notice from any insurance carrier or any of
the Tenants of any defects or inadequacies in the Real Property or any
portion thereof which would adversely affect the insurability of the Real
Property or the cost of such insurance.
(q) The Real Property is not subject to or affected by any special
assessment for public improvements or otherwise, whether or not presently a
lien upon the Real Property (or any portion necessary). None of the Seller
Parties has made a commitment to any governmental authority, utility
company, school board, church or other religious body, homeowner or
homeowner's association or any other organization, group or individual
relating to the Real Property that would impose an obligation upon any of
the Seller Parties or its successors or assigns to make any contributions
or dedications of money or land, or to construct, install or maintain any
improvements of a public or private nature as part of the Real Property or
upon separate lands. No governmental authority has imposed any requirement
that any of the Seller Parties pay, directly or indirectly, any special
fees or contributions or incur any expenses or obligations in connection
with the development of the Real Property or any portion thereof, other
than any regular and nondiscriminatory local real estate or school taxes
assessed against the Real Property. The Real Property is separately
assessed for real property tax assessment purposes and is not combined with
any other real property for tax assessment purposes. None of the Seller
Parties has received a notice of any contemplated or actual reassessment of
the Real Property or any portion thereof for general real estate tax
purposes. As of the date hereof, all due and payable taxes, assessments,
water charges and sewer charges affecting the Real Property or any portion
thereof have been paid.
(r) The Real Property constitutes a separately subdivided, legally
distinct parcel of land. Each of the Seller Parties has complied with all
applicable laws, ordinances, regulations, statutes, rules and restrictions
pertaining to and affecting the Real Property which relate to such
subdivision.
(s) No portion of the Real Property is located in an area designated
as a "flood hazard area" in accordance with the document entitled
"Department of Housing and Urban Development, Federal Insurance
Administration - Special Flood Hazard Area Maps" or within the 100-year
flood plain as depicted on the U.S. Army Corps of Engineers Geodetic Maps
of such flood plain areas. No portion of the Real Property is located
within an environmentally sensitive area (such as wetlands).
(t) The Real Property is zoned industrial under the zoning ordinance
of Lake County, Indiana and such zoning permits the current use of the Real
Property. All conditions and contingencies, of whatever nature, related to
such zoning have been satisfied.
(u) There is no default or breach by any of the Seller Parties nor, to
the best of each of the Seller Parties' knowledge, any other party thereto,
under any covenants, conditions, restrictions or easements which may affect
the Real Property or any portion or portions thereof which are to be
performed or complied with by the owner of the Real Property, and no
condition or circumstance exists which, with the giving of notice or the
passage of time, or both, would constitute a default or breach by any of
the Seller Parties nor, to the best of each of the Seller Parties'
knowledge, any other party thereto, under any such covenants, conditions,
restrictions, rights-of-way or easements.
(v) All permits, authorizations and consents required to maintain the
existing curb cuts serving the Real Property have been obtained, are in
full force and effect and are assignable to Buyer. All access driveways and
walkways required in connection with the full, complete and lawful
operation and use of the Real Property are located entirely within the
title lines of the Real Property, and none of such driveways, walkways or
other facilities is subject to any easement or license for the use thereof
by any adjacent, nearby or other lands or other Persons, except as set
forth in the Permitted Title Exceptions.
3.8 ZRI Assets All of the ZRI Assets are in good operating condition,
reasonable wear and tear excepted, and the ZRI Assets constitute all of the
property necessary for the (a) conduct of the Business and (b) commercial
exploitation of the Patent Rights.
3.9 Liens and Encumbrances. Except for the Encumbrances set forth in
Schedule 3.9 attached hereto (the "Liens"), each of Powerscourt (with respect to
the Real Property), MRI (with respect to the Patent Rights) and ZRI (with
respect to the ZRI Assets) has good and marketable title to the Assets, free and
clear of all Encumbrances:
3.10 Certain Arrangements
(a) Schedule 3.10(a) sets forth a complete list of each of the
following to which any of the Corporate Seller Parties is a party or by
which any of its properties is bound and that presently remains executory
in whole or in any part (collectively, "Commitments"):
(i) each partnership, joint venture or cost-sharing agreement;
(ii) each guaranty or suretyship, indemnification or contribution
agreement or performance bond;
(iii) each instrument, agreement, commitment or other obligation
evidencing or relating to indebtedness of any of the Corporate Seller
Parties or to money lent or to be lent to another party (the
"Liabilities"), including, for each Liability, the name of the
creditor or obligor, the nature of the obligation (monetary or
otherwise), the amount of the debt, where applicable, whether such
debt is overdue or a default otherwise exists with respect thereto and
a description of any litigation or other adversary proceedings related
thereto;
(iv) each contract to purchase or sell real property;
(v) each agreement or commitment for the acquisition or provision
of services, supplies, equipment, inventory, fixtures or other
property;
(vi) each agreement containing any noncompetition covenant;
(vii) each agreement providing for the purchase from a supplier
of a particular product or service; and
(viii) each other agreement or commitment made in the ordinary
course of business of Corporate Seller Party.
(b) True, correct and complete copies of all written items listed
above, and true, correct and complete written descriptions of all oral
items listed above, have heretofore been delivered or made available to
Buyer.
3.11 Powers of Attorney. Schedule 3.11 attached hereto lists the names of
all persons, if any, holding powers of attorney from Sellers and a summary
statement of the terms thereof.
3.12 Employees.
(a) Schedule 3.12(a) attached hereto (a) lists the names of all
employees and consultants of each of the Corporate Seller Parties as of a
date hereof and the rate at which compensation is being paid to each such
person as of the date hereof (including the maximum amount of any bonuses
to which any of such employees may be eligible); (b) describes any proposed
or agreed to increase in such rates of compensation or bonuses; and (c)
describes any existing or proposed oral or written employment, consulting
or similar agreement to which any of the Corporate Seller Parties is a
party.
(b) The Corporate Seller Parties have paid all wages and other amounts
due to all employees of the Corporate Seller Parties through the date
hereof.
3.13 Permits; Licenses. Schedule 3.13(i) attached hereto sets forth all of
the governmental and quasi-governmental consents, approvals, permits, licenses,
franchises and other authorizations that are necessary to, or advisable for the
conduct of the Business as presently conducted by any of the Corporate Seller
Parties or as proposed to be conducted to Buyer (collectively, "Permits").
Except as set forth in Schedule 3.13(ii) attached hereto, the Corporate Seller
Parties have obtained all of the Permits. Except as set forth in Schedule
3.13(iii), all of the Permits are in full force and effect, and no violations
exist in respect of any thereof, and no proceeding is pending or, to the
knowledge of any of the Seller Parties, threatened to revoke or limit any
thereof. All of the Permits are transferable to Buyer without the need for any
governmental approvals or consents.
3.14 Patent Rights.
(a) Exhibits 1.1(b)(i) and 1.1(b)(ii) set forth accurate and complete
descriptions of the Patent and the Patent Application, respectively. MRI is
the sole and exclusive owner of all of the Patent Rights and no other party
has any interest in any of the Patent Rights.
(b) Except as set forth on Schedule 3.14(b)(i) attached hereto, none
of the Patent Rights is subject to any pending or threatened challenge or
reversion, and the consummation of the transactions contemplated by this
Agreement shall not result in any change in the terms or provisions of the
Patent or the Patent Application or create any right of termination,
cancellation or reversion with respect thereto anywhere in the world.
Except as set forth on Schedule 3.14(b)(ii), MRI has not licensed,
sublicensed, assigned, transferred or otherwise conveyed any of the Patent
Rights, or any right, title or interest therein, to any person or entity.
MRI has exercised quality control with respect to the Patent Rights
licensed by MRI to the extent necessary to preserve the validity of the
Patent Rights. To the best of knowledge of each of the Seller Parties, no
person is infringing or otherwise acting adversely with respect to MRI's
rights under or in respect of any of the Patent Rights.
(c) None of the Seller Parties has infringed on any proprietary right,
trademark, trade name, service mark or copyright of others, and there is no
claim for damages or any proceeding pending, or threatened against any of
the Seller Parties with respect thereto.
(d) Each of the Patent and the Patent Application and any other United
States applications (including divisional, continuing or reissue
applications) based in whole or in part on the Patent and Patent
Application, any foreign applications, including those under the Patent
Cooperation Treaty, based in whole or in part on the Patent and Patent
Application, and any and all patents (including extensions thereof) of any
country which have been or may be granted based in whole or in part on the
Patent and Patent Application is currently in compliance with formal legal
requirements (including payment of filing, examination, and maintenance
fees and proofs of working or use), is valid and enforceable, and is not
subject to any maintenance fees or taxes or other assessments or actions
falling due within ninety days after the Closing Date.
(e) Neither the Patent nor the Patent Application nor any other United
States applications (including divisional, continuing or reissue
applications) based in whole or in part on the Patent and Patent
Application, any foreign applications, including those under the Patent
Cooperation Treaty, based in whole or in part on the Patent and Patent
Application, and any and all patents (including extensions thereof) of any
country which have been or may be granted based in whole or in part on the
Patent and Patent Application has been or is now involved in any
interference, reissue, reexamination or opposition proceeding. There is no
patent or patent application of any party potentially interfering with or
infringing on the Patent.
(f) Neither the Patent nor the Patent Application nor any other United
States applications (including divisional, continuing or reissue
applications) based in whole or in part on the Patent and Patent
Application, any foreign applications, including those under the Patent
Cooperation Treaty, based in whole or in part on the Patent and Patent
Application, and any and all patents (including extensions thereof) of any
country which have been or may be granted based in whole or in part on the
Patent and Patent Application is infringed or, to the knowledge of any
Seller Party, has been challenged or threatened in any way. None of the
products manufactured or to be manufactured in accordance with any process
or know-how used or to be used, based on the Patent Rights, infringes or is
alleged to infringe or would infringe any patent or other proprietary right
of any other entity or person.
(g) All products made, used, or sold under the Patent have been marked
with the proper patent notice.
(h) The Patent Rights comprise the entirety of the intellectual
property rights held by the Seller Parties.
3.15 Labor Matters. Except as described in Schedule 3.15(i) attached
hereto, there are no collective bargaining agreements or other agreements with
labor unions or associations representing employees to which any of the
Corporate Seller Parties is a party. Except as set forth in Schedule 3.15(ii)
attached hereto, there have been no strikes, slowdowns, picketing, work
stoppages, labor troubles or unrest or other similar events in which employees
of any of the Corporate Seller Parties have participated.
3.16 Employee Benefits.
(a) None of the Corporate Seller Parties has ever had any (i) pension,
profit sharing, stock bonus, deferred compensation, retirement or other
"employee pension benefit plans," as that term is defined in Section 3(2)
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") (the "Pension Plans"), including, without limitation, those plans
that have been terminated or with respect to which an application with
respect to termination is presently pending before the Internal Revenue
Service or the Pension Benefit Guaranty Corporation, that are maintained or
to which contributions have been made by the Corporate Seller Parties; (ii)
"employee welfare benefit plans" as that term is defined in Section 3(1) of
ERISA, whether insured or otherwise, maintained or to which contributions
have been made by a Corporate Seller Party (the "Welfare Benefit Plans");
(iii) multiemployer plans within the meaning of Section 3(37) of ERISA (the
"Multiemployer Plans") to which a Corporate Seller Party contributes; or
(iv) any other employee benefit plans, that have ever been subject to any
of the provisions of ERISA arrangements or other similar program, whether
or not formally designated as a plan (all of such plans shall hereinafter
be referred to collectively as "Benefit Plans").
(b) None of the Corporate Seller Parties has any liability or
potential liability with respect to any Multiemployer Plan, with respect to
any plan of the type described in Section 4063 and 4064 of ERISA.
(c) Except as set forth in Schedule 3.16(c) attached hereto, none of
the Corporate Seller Parties has maintained, contributed to or had any
liability or potential liability with respect to any employee benefit plan
(whether or not terminated) that provides health, life insurance, accident
or other "welfare-type" benefits to former employees, their spouses or
dependents (except for medical benefit continuation coverage required in
accordance with Section 4980B of the Code). The Corporate Seller Parties
have complied with the requirements of Section 4980B of the Code.
3.17 Business Operations; Changes. Except as set forth in Schedule 3.17
attached hereto, the description of the Business described under "Current
Operations" in the annual report on Form 10-K for MRT for fiscal year 1997 (a
copy of which is attached hereto as Exhibit 3.17) accurately describes the
Business as of the date hereof.
3.18 Compliance with Laws. Except as set forth in Schedule 3.18 attached
hereto, none of the Corporate Seller Parties are in default under or in
violation of any federal, state, local or non-United States law, ordinance,
regulation or rule or any judgment, writ, order, award, edict or decree of any
court of competent jurisdiction or any governmental or quasi-governmental
agency, authority or instrumentality of competent jurisdiction.
3.19 Except as described in Schedule 3.19 attached hereto, there are no
outstanding suits, actions, proceedings, investigations, audits, claims, orders,
judgments, writs or awards presently pending or, to the best of the knowledge of
any of the Seller Parties, threatened against any of the Seller Parties or any
of the Assets (collectively, "Litigation") and, to the best of the knowledge of
any of the Seller Parties, there is no basis for any such Litigation. There are
no final orders, judgments, writs or decrees presently outstanding against the
Seller Parties, the Assets or with respect to the Business.
3.20 Insurance. All policies of insurance of any kind maintained, owned or
held by the Corporate Seller Parties are set forth in Schedule 3.20 attached
hereto and such policies are in full force and effect, all premiums with respect
thereto covering all periods up to and including the Closing Date have been
paid, and no notice of cancellation or termination has been received with
respect to any such policy that has not been replaced on substantially similar
terms prior to the date of such cancellation or termination. The insurance
policies to which any of the Corporate Seller Parties are a party are sufficient
for compliance with all requirements of applicable laws and all agreements to
which such Corporate Seller Party is a party or by which such Corporate Seller
Party is bound and the coverages provided by said policies are sufficient to
cover all risks insured against.
3.21 Full Disclosure. Neither this Agreement nor any of the Related Seller
Agreements, or any agreement, document, instrument, certificate or statement
made or furnished to Buyer in connection with this Agreement and the
transactions contemplated hereby contains any untrue statement of a material
fact or omits the statement of a material fact required to be stated in order to
make the statements contained herein and therein not misleading.
3.22 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on by the Seller Parties with
Buyer and without the intervention of any other person and in such manner as not
to give rise to any valid claim against Buyer for any finder's fee, brokerage
commission or like payment.
3.23 Investment. Sellers acknowledge that the Buyer Shares have not been,
and will not be, registered under the Securities Act of 1933, as amended (the
"Securities Act"), or under any state securities laws, and are being offered and
sold in reliance upon federal and state exemptions for transactions not
involving any public offering. Sellers are acquiring the Buyer Shares solely for
their own respective accounts for investment purposes, and not with a view to
the distribution thereof. Sellers have received certain information concerning
Buyer and have had the opportunity to obtain additional information as desired
in order to evaluate the merits and risks inherent in holding the Buyer Shares
and are able to bear the economic risk and lack of liquidity inherent in holding
the Buyer Shares.
3.24 No Violation on Transfer. The sale and purchase and related transfer
of the Assets, including, but not limited to, the Patent Rights, pursuant to
this Agreement will not violate any United States federal, state or local or any
non-United States law or regulation or order of any court or other governmental
or quasi-governmental authority (collectively, "Laws"), including, but not
limited to, any Laws relating to restrictions on the transfer of inventions,
technologies or processes from owners resident or domiciled in the United States
("U.S. Owners") to non-U.S. Owners.
3.25 The Assets. The Assets contain all of the assets and rights, whether
tangible or intangible, necessary to and used by the Sellers in the conduct of
the Business.
3.26 None of the Seller Parties has made, offered or agreed to offer
anything of value to any governmental official, political party or candidate for
government office that would cause the Seller Party to be in violation of the
Foreign Corrupt Practices Act of 1977 or any Law.
3.27 Subsidiaries. Schedule 3.27 sets forth the name, form of organization
and jurisdiction of organization of each parent and subsidiary of each of the
Corporate Seller Parties as well as the identity of the owners of the equity
interests thereof (other than with respect to MRT).
3.28 Accounts Payable/Receivable. Schedule 3.28 sets forth a list of each
account payable and each account receivable due and owing to or by, as the case
may be, any of the Corporate Seller Parties, including for each account, the
name of the party that the account is with, the amount of money due or owing and
whether such account is overdue. None of the Corporate Seller Parties has any
accounts receivable.
3.29 Necessary Future Expenditures. Schedule 3.29 attached hereto sets
forth a complete and accurate listing of all the expenditures necessary to
enable the Business to fully exploit the Patent Rights in the United States.
ARTICLE 4 - COVENANTS EXTENDING TO THE CLOSING DATE
4.1 Access and Cooperation: Due Diligence; Consents
(a) From the date hereof and until the Closing Date, the Seller
Parties shall (i) afford to the representatives of Buyer reasonable access
to all the key employees, sites, properties, books and records of each of
the Corporate Seller Parties, (ii) provide Buyer with such additional
financial and operating data and other information relating to the business
and properties of each of the Corporate Seller Parties as Buyer may from
time to time reasonably request and (iii) cooperate with Buyer and its
representatives in the preparation of any documents or other material that
may be required in connection with this Agreement or any of the Related
Seller Agreements.
(b) Each of the Corporate Seller Parties will use their best efforts
to secure, as soon as practicable after the date hereof, all approvals or
consents of any other party, person or entity, as the case may be, as may
be necessary to consummate the transactions contemplated hereby.
4.2 Conduct of Business Pending the Closing Date
(a) From the date hereof and until the Closing, each of the Corporate
Seller Parties shall:
(i) carry on its businesses in substantially the same manner as
it has heretofore and not introduce any material new method of
management, operation or accounting;
(ii) maintain its properties and facilities, including those held
under leases, in as good working order and condition as at present,
ordinary wear and tear excepted;
(iii) perform all its obligations under agreements relating to or
affecting its assets, properties and other rights;
(iv) keep in full force and effect without interruption all its
present insurance policies or other comparable insurance coverage;
(v) use reasonable commercial efforts to (i) maintain and
preserve its business organization intact, (ii) retain its present
employees and (iii) maintain its relationships with suppliers,
customers and others having business relations with it;
(vi) comply with all Laws; and
(vii) except as required or expressly permitted by this
Agreement, maintain the instruments and agreements governing its
outstanding Liabilities on their present terms and not incur new or
amended Liabilities, without the prior written consent of Buyer (which
consent will not be unreasonably withheld).
(b) Except as set forth on Schedule 4.2(b), notwithstanding the
foregoing, from the date hereof and until the Closing, without the prior
written consent of Buyers, none of the Corporate Seller Parties shall:
(i) make any change in its Charter Documents;
(ii) issue any of its shares or issue or otherwise create any
options, warrants or rights to acquire any of its shares;
(iii) enter into any agreement or commitment or incur or agree to
incur any liability or make any capital or other expenditures,
including, but not limited to, making any deposits or other payments
with respect to any machinery or other equipment; provided, however,
that the Corporate Seller Parties may pay wages to employees
consistent with practice as of the date hereof;
(iv) increase or commit or promise to increase the cash
compensation payable or to become payable to any officer, director,
stockholder, employee or agent, consultant or independent contractor
of any of the Corporate Seller Parties or make any discretionary bonus
or management fee payment to any such person, except bonuses or salary
increases to employees at the times and in the amounts consistent with
its past practice;
(v) create, assume or permit to be created or imposed any
Encumbrance upon any of its assets or properties, whether now owned or
hereafter acquired;
(vi) sell, assign, lease or otherwise transfer or dispose of any
of its owned or leased property or equipment otherwise than pursuant
hereto in the ordinary course of its business and consistent with its
past practice;
(vii) merge, consolidate or effect a share exchange with, or
agree to merge, consolidate or effect a share exchange with, any other
entity;
(viii) waive any of its material rights or claims, provided that
it may negotiate and adjust bills in the course of good faith disputes
with parties with which it has an agreement in a manner consistent
with past practice;
(ix) commit a material breach of or amend or terminate any
agreement to which it may be a party; or
(x) enter into any other transaction that is not in the ordinary
course of its business and consistent with its past practice or that
is prohibited hereby.
4.3 Transfer of Patent, etc. Promptly after the execution hereof, Buyer, on
the one hand, and Lucas and MRI, on the other, shall take all steps necessary to
effect the transfer to Buyer of all registrations and applications with respect
to the Patent Rights.
4.4 Wages. Except as set forth in Schedule 4.4, the Corporate Seller
Parties have paid all wages and other amounts due to all employees of the
Corporate Seller Parties through the Closing Date.
4.5 Notice to Buyer. Each of the Seller Parties shall provide written
notice to Buyer immediately upon learning of any (a) damage, theft or other
activity or occurrence that adversely affects any of the Assets, (b) malfunction
in any of the Assets, and (c) activity or occurrence that results in, or could
reasonably be expected to be result in, a breach of any of the representations
and warranties set forth in Article 3 above.
4.6 Resolution of Litigation. Lucas and MRT shall use their best efforts to
effect settlements of the class action litigation pending against MRT in
Delaware and Texas.
ARTICLE 5 - CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
The obligation of Buyer to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment, prior to or at Closing, of each
of the following conditions (any or all of which may be waived by Buyer in its
sole discretion):
(a) Each of the representations and warranties of the Seller Parties
set forth in Article 3 hereof shall be true and correct as of the Closing;
(b) The Seller Parties shall have performed and complied with all
covenants, obligations and undertakings required by this Agreement and the
Related Seller Agreements to be performed and complied with by the Seller
Parties on or prior to the Closing;
(c) No action, suit or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any federal,
state, local or non-United States jurisdiction that seeks to restrain,
enjoin or otherwise prevent consummation of the transactions contemplated
by this Agreement, and no judgment, order or decree shall have been
rendered that has the effect of enjoining the consummation of the
transactions contemplated by this Agreement;
(d) ZRI shall have executed and delivered the bill of sale in the form
of Exhibit 1.1(c) attached hereto;
(e) MRI shall have executed and delivered to Buyer the Patent
Assignments and all required actions to effect the transfer of the Patent
Rights to Buyer and to effect the registration of such transfer with all
appropriate governmental authorities shall have been taken to the
reasonable satisfaction of counsel to Buyer;
(f) Each of the Corporate Seller Parties shall have executed and
delivered a certificate in a form reasonably satisfactory to Buyer executed
by an authorized officer of the Corporate Seller Party, certifying as to
(i) the fulfillment of the conditions specified in Articles 5(a) and 5(b)
hereof, and (ii) other matters customary for transactions of this nature;
(g) MRT shall have delivered an opinion of Richards, Layton & Finger,
P.A., special counsel to MRT, in form and substance reasonably satisfactory
to counsel for Buyer (i) with respect to the representations and warranties
with respect to MRT in Sections 3.1 and 3.2, above; and (ii) that approval
of the shareholders of MRT is not required for MRT, MRI and ZRI to execute
and deliver this Agreement and Related Seller Agreements, perform their
respective obligations hereunder and thereunder and consummate the
transactions contemplated hereby and thereby;
(h) Powerscourt shall have delivered a certificate in form and
substance reasonably satisfactory to counsel for Buyer with respect to the
representations and warranties of Powerscourt in Sections 3.1 and 3.2;
(i) MRI shall have delivered an opinion of MRI's counsel in form and
substance reasonably satisfactory to Buyer with respect to the
representations and warranties of MRI in Sections 3.1 and 3.2, above;
(j) ZRI shall have delivered an opinion of ZRI's counsel in form and
substance reasonably satisfactory to Buyer, with respect to the
representations and warranties of ZRI in Sections 3.1 and 3.2, above;
(k) The Seller Parties shall have procured the third party consents
listed on Schedule 3.5;
(l) Powerscourt shall have (i) delivered to Buyer a deed and all other
documents reasonably requested by Buyer to effectuate the sale and transfer
of the Real Property from Powerscourt to Buyer free and clear of
Encumbrances, subject only to the Permitted Title Exceptions, in form and
substance reasonably satisfactory to counsel to Buyer, and (ii) paid all
taxes, charges, and other fees required in connection with such sale and
transfer;
(m) The Seller Parties shall have delivered to Buyer evidence that all
contracts, books, records and other data relating to the Assets and the
business to be operated therewith that have been since January 1, 1998 in
the possession or control of any of the Sellers, including, but not limited
to, all documents relating to the operation, maintenance and repair of any
of the ZRI Assets are located and available for inspection in the principal
office located on the Real Property;
(n) Sellers shall have delivered to Buyer instruments in form and
substance reasonably satisfactory to the Buyer evidencing the termination
and release of each of the Liens;
(o) Sellers shall have delivered to Buyer certified minutes of the
board of directors of ZRI and MRI authorizing the ZRI and MRI to execute
and deliver this Agreement and Related Seller Agreements (reflecting, among
other things, the value of the Assets being transferred pursuant to this
Agreement by each Seller); perform the ZRI's and MRI's respective
obligations hereunder and thereunder and consummate the transactions
contemplated hereby and thereby;
(p) Sellers shall have delivered such other executed and acknowledged
instruments, certificates and documents as Buyer or Buyer's counsel shall
reasonably request;
(q) The Seller Parties shall have taken all actions reasonably
requested by Buyer to comply with the Foreign Investment in Real Property
Tax Act ("FIRPTA") with respect to the Real Property, including, but not
limited to, obtaining and delivering to Buyer a "qualifying statement"
pursuant to section 1445(b)(4)(B) of the Code;
(r) Buyer shall have entered into an arrangement reasonably
satisfactory to Buyer providing for the employment by Buyer of Leon Lohman
in connection with Buyer's use of the Assets;
(s) Powerscourt, at Buyer's sole cost and expense, shall, within three
(3) days of the date hereof, cause Lawyers Title Insurance Company (the
"Title Insurer") to deliver to Buyer its title insurance commitment,
including copies of all exceptions to title referred to therein
(collectively, the "Title Commitment"), showing good, marketable and
insurable title to the Real Property to be vested in Seller and committing
to insure such title in Buyer by the issuance of Title Insurer's ALTA Form
B-1970 extended coverage owner's policy of title insurance in the amount of
five hundred thousand dollars (U.S. $500,000) which meets the reasonable
requirements of counsel to Buyer. Buyer shall have until the tenth (10th)
day from the date hereof (the "Inspection Date") by which to examine title
to the Real Property, and to give written notice to Seller of any
objections which Buyer may have.
ARTICLE 6 - CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS
The obligation of Sellers to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment, prior to or at the Closing, of
each of the following conditions (any or all of which may be waived by Sellers
in their sole discretion):
(a) Each of the representations and warranties of Buyer set forth in
Article 2, above, hereof shall be true and correct as of the Closing;
(b) Buyer shall have performed and complied with all covenants,
obligations and undertakings required by this Agreement to be performed and
complied with by Buyer prior to the Closing;
(c) No action, suit or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any federal,
state, local or foreign jurisdiction that seeks to restrain, enjoin or
otherwise prevent consummation of the transactions contemplated by this
Agreement, and no judgment, order or decree shall have been rendered that
has the effect of enjoining the consummation of the transactions
contemplated by this Agreement;
(d) Buyer shall deliver to Young pursuant to Section 1.7, above,
certificates representing the Buyer Shares required to be delivered
pursuant to Section 1.2, above, that contain a legend substantially in the
following form:
The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or the
securities laws of any state. Such shares may not be sold or
transferred in the absence of such registration or an opinion of
counsel satisfactory to the issuer that such registration is not
required by said act or state laws.
(e) Buyer shall have executed and delivered a certificate in a form
reasonably satisfactory to Seller executed by an authorized officer of
Buyer, certifying as to (i) the fulfillment of the conditions specified in
Articles 6(a) and 6(b) hereof and (ii) other matters customary for
transactions of this nature;
(f) Buyer shall have delivered to Sellers certified minutes of the
board of directors of Buyer authorizing Buyer to execute and deliver this
Agreement, perform Buyer's respective obligations hereunder and thereunder
and consummate the transactions contemplated hereby and thereby; and
(g) Buyer shall have delivered to Sellers such other executed and
acknowledged instruments, certificates and documents as any of the Sellers
or its counsel shall reasonably request.
ARTICLE 7 - POST CLOSING COVENANTS
7.1 Lucas Obligations. Lucas shall cooperate with Buyer, and share all of
his knowledge regarding the Assets, in order to enable Buyer to (i) operate the
ZRI equipment properly and with maximum efficiency and (ii) fully exploit the
Patent Rights.
7.2 MRT Reinstatement. Lucas and MRT shall take all actions necessary to
reinstate the good standing status of MRT in Delaware and Indiana forthwith
after funds are made available to MRT by Buyer Pursuant to Section 1.2(b), above
(the "Reinstatement").
7.3 Resolution of Litigation. Lucas and MRT shall use their best efforts to
effect settlements of the class action litigation pending against MRT in
Delaware and Texas.
7.4 MRT Board Action. Promptly after the Reinstatement, MRT shall convene a
meeting of its board of directors for the purpose of ratifying the execution and
delivery of this Agreement and the Related Seller Agreements and the
consummation of the transactions contemplated hereby and thereby. Lucas shall
use his best efforts to cause the board of directors to approve the aforesaid
ratification.
7.5 MRI Reinstatement. Lucas and MRI shall take all actions necessary to
reinstate the good standing status of MRI in Indiana forthwith after funds are
made available to MRI by Buyer Pursuant to Section 1.2(b).
ARTICLE 8 - NON-COMPETITION.
8.1 Non-Competition. Each of the Seller Parties covenants and agrees that
for a period of three (3) years following the Closing Date, no Seller Party
shall, in any portion of the United States, Canada or the European Union,
engage, directly or indirectly, whether as principal, agent, officer, director,
employer, employee, consultant, partner, shareholder of any person, firm,
corporation or other entity or group or otherwise, alone or in association with
any other person firm, corporation or other entity or group, in any Competing
Business. For purposes of this Agreement, the term "Competing Business" shall
mean any person, firm, corporation or other entity or group that offers or sells
or attempts to offer or sell any product or services that are the same as, or
similar to, or otherwise competes with the products or services offered or sold
by the Buyer or any of its affiliates, successors or assigns. Notwithstanding
the foregoing, a Seller Party is not precluded from (i) maintaining a passive
investment in publicly held entities provided that the Seller Party does not
have more than a five percent (5%) beneficial ownership in any such entity or
(ii) serving as an officer or director of any entity, the majority of the voting
securities of which is owned, directly or indirectly, by the Buyer.
8.2. Non-Solicitation of Customers and Suppliers. Each of the Seller
Parties agrees that no Seller Party shall, as a principal, agent, officer,
director, employer, employee, consultant, partner or shareholder of any person,
firm, corporation or other entity or group, or in any individual representative
capacity whatsoever or otherwise, directly or indirectly, solicit the trade of,
or trade with, any customer, prospective customer, supplier, or prospective
supplier of Buyer or any of its affiliates, successors or assigns for any
purpose other than for the benefit of Buyer. The Seller Parties further agree
that for three (3) years following the Closing Date for any reason, a Seller
Party shall not, directly or indirectly, solicit the trade of, or trade with,
any customers or suppliers, or prospective customers or suppliers, of Buyer or
any of its affiliates, successors or assigns. Notwithstanding the foregoing,
Seller Parties are not precluded from (i) maintaining a passive investment in
publicly held entities provided that the Seller Party does not have more than a
five percent (5%) beneficial ownership in any such entity or (ii) serving as an
officer or director of any entity, the majority of the voting securities of
which is owned, directly or indirectly, by the Buyer.
8.3 Non-Solicitation of Employees, Etc. Each of the Seller Parties agrees
that following the Closing Date for a period of three (3) years, no Seller Party
shall, as a principal, agent, employee, employer, consultant, officer, director,
shareholder or partner of any person, firm, corporation or other entity or group
or in any individual representative capacity whatsoever or otherwise, directly
or indirectly, without the prior express written consent of Buyer approach,
counsel or attempt to induce any person who is then in the employ of, or then
serving as independent contractor with, Buyer or any affiliate, successor or
assign thereof to leave the employ of, or terminate such independent contractor
relationship with, Buyer or such affiliate, successor or assign or employ or
attempt to employ any such person or persons who at any time during the
preceding six (6) months was in the employ of, Buyer or any such affiliate,
successor or assign. Notwithstanding the foregoing, the Seller Parties are not
precluded from (i) maintaining a passive investment in publicly held entities
provided that the Seller Party does not have more than a five percent (5%)
beneficial ownership in any such entity or (ii) serving as an officer or
director of any entity, the majority of the voting securities of which is owed,
directly or indirectly, by Buyer.
8.4. Non-Disclosure of Confidential Information. Each Seller Party agrees
to hold and safeguard all confidential information with respect to the Business,
the Patent Rights and Buyer ("Confidential Information") in trust for Buyer, its
successors and assigns and agrees that the Seller Party shall not, without the
prior written consent of Buyer, misappropriate or disclose or make available to
anyone for use outside Buyer's organization at any time, any of the Confidential
Information, whether or not developed by the Seller Party, except as required in
the performance of a Seller Party's duties to Buyer.
8.5. Damages. Because of the difficulty of measuring economic losses to
Buyer as a result of any breach by a Seller Party of its covenants in Sections
8.1, 8.2, 8.3 and 8.4, above, and because of the immediate and irreparable
damage that could be caused to Buyer for which it would have no other adequate
remedy, in the event of any such breach, each Seller Party agrees that Buyer may
enforce the provisions of this Article 8 by injunctions and restraining orders
against that Seller Party if it breaches any of those provisions.
8.6. Reasonable Restraint. The Parties each agree that Sections 8.1, 8.2,
8.3 and 8.4 impose a reasonable restraint on the Seller Parties in light of the
activities and business of Buyer on the date hereof and the current business
plans of Buyer.
8.7 Severability; Reformation. The covenants in this Article 8 are
severable and separate, and the unenforceability of any specific covenant in
this Article 8 is not intended by any Party, and shall not, affect the
provisions of any other covenant in this Article 8. If any court of competent
jurisdiction shall determine that the scope, time or territorial restrictions
set forth in Sections 8.1, 8.2, 8.3 and 8.4 are unreasonable as applied to any
Seller Party, the Parties, including that Seller Party, acknowledge their mutual
intention and agreement that those restrictions be enforced to the fullest
extent the court deems reasonable, and thereby shall be reformed to that extent
as applied to that Seller Party and any other Seller Party similarly situated.
8.8. Independent Covenant. All the covenants in this Article 8 are intended
by each Party, and shall, be construed as an agreement independent of any other
provision in this Agreement, and the existence of any claim or cause of action
of any Seller Party against Buyer, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by Buyer of any
covenant in this Article 8. It is specifically agreed that the period specified
in Sections 8.1, 8.2, 8.3 and 8.4 shall be computed in the case of each Seller
Party by excluding from that computation any time during which that Seller Party
is in violation of any provision of Sections 8.1, 8.2, 8.3 and 8.4. The
covenants contained in this Article 8 shall not be affected by any breach of any
other provision hereof by any Party.
8.9. Materiality. Buyer and each Seller Party, severally and not jointly
with any other person, hereby agree that this Article 8 is a material and
substantial part of the transactions contemplated hereby.
ARTICLE 9 - TRANSFER TAXES AND OTHER COSTS
Sellers shall be responsible for all income, gain, sales, use, transfer,
conveyance, excise, documentary and other governmental taxes, duties, charges,
fees, imposts and assessments, and all interest and penalties thereon, imposed
at any time by any taxing authority with respect to this Agreement, the sale,
assignment or delivery of the Assets or the consummation of the transactions
contemplated hereby or the Related Seller Agreements (the "Transactional
Taxes").
ARTICLE 10 - SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
10.1 Survival of Representations of Buyer. The representations and
warranties set forth in Article 2, above, or certificate or instrument delivered
by or on behalf of Buyer, shall survive the Closing for a period of three (3)
years. Notwithstanding anything contained herein to the contrary, Sellers shall
have the right to commence a suit, action or proceeding after the expiration of
such three-year period with respect to claims arising out of or relating to such
representations and warranties that shall have been asserted in writing by
Sellers before the expiration of such three-year period.
10.2 Survival of Representations of Sellers and Shareholders. The
representations and warranties of Sellers set forth in Article 3, above, and in
any Related Seller Agreement or certificate or instrument delivered by or on
behalf of Sellers, shall survive the Closing for a period of three (3) years.
Notwithstanding anything contained herein to the contrary, Buyer shall have the
right to commence a suit, action or proceeding after the expiration of such
three-year period with respect to claims arising out of or relating to such
representations and warranties that shall have been asserted in writing by Buyer
before the expiration of such three-year period.
10.3 Indemnification by the Seller Parties. Each of the Seller Parties,
jointly and severally (collectively, the "Seller Indemnitors" and, together with
Buyer as an indemnitor under Section 10.4 below, each an "Indemnitor"), agrees
to indemnify and hold harmless Buyer and each of Buyer's officers, directors,
shareholders (other than MRT), employees, agents and attorneys (each a "Buyer
Indemnified Party"), against any losses, claims, damages, liabilities,
penalties, actions, proceedings or judgments (collectively, "Losses") to which a
Buyer Indemnified Party may become subject related to or arising out of (a) any
breach by any of the Seller Parties; of any covenant or agreement contained in
this Agreement or in any of the Related Seller Agreements; (b) any breach by any
of the Seller Parties of any of the warranties or representations set forth in
Article 3, above, or in any of the Related Seller Agreements; (c) any of the
Transactional Taxes; or (d) any of the Liabilities and will reimburse a Buyer
Indemnified Party for all legal and other expenses, including reasonable
attorneys' fees incurred by such Buyer Indemnified Party in connection with
investigating, defending or settling any Loss whether or not in connection with
pending or threatened litigation in which such Buyer Indemnified Party is a
party. Any reference to an "Indemnitor" in the singular in this Article 10 shall
not be deemed to limit in any way the joint and several liability of each of the
Seller Indemnitors.
10.4 Indemnification by Buyer. Buyer agrees to indemnify and hold harmless
each Seller and each of Seller's officers, directors, shareholders, employees,
agents and attorneys (each a "Seller Indemnified Party" and, together with the
Buyer Indemnified Parties, collectively, the "Indemnified Parties" and,
individually, an "Indemnified Party"), against any Losses, to which a Seller
Indemnified Party may become subject related to or arising out of any breach by
Buyer of any of the representations and warranties contained in Article 2,
above, and will reimburse Seller Indemnified Party for all legal and other
expenses, including reasonable attorneys' fees incurred by such Seller
Indemnified Party in connection with investigating, defending or settling any
Loss whether or not in connection with pending or threatened litigation in which
such Indemnified Party is a party.
10.5 Notice. Upon obtaining knowledge thereof, an Indemnified Party shall
promptly give each Indemnitor written notice of any Loss that the Indemnified
Party has determined has given, or could give, rise to a claim for
indemnification hereunder (a "Notice of Claim"); provided, however, that, any
delay in giving such notice shall not excuse an Indemnitor unless such
Indemnitor is materially prejudiced by such delay. A Notice of Claim shall
specify in reasonable detail the nature and all known particulars related to the
Loss for which indemnification is sought under this Article 10. Each Indemnitor
shall commence to perform its obligations in respect of all Losses described in
a Notice of Claim within fifteen (15) days after the giving of such Notice of
Claim. Each Indemnitor shall keep an Indemnified Party informed on a regular
basis of material matters relating to proceedings for which indemnification is
being provided under this Article 10.
10.6 Procedure. An Indemnified Party shall have the right, but not the
obligation, to control the defense of any pending or threatened litigation or
investigation pertaining to any Losses or potential Losses and shall be entitled
to receive reimbursement of expenses on a monthly basis prior to any final
determination of any investigation or litigation within thirty (30) days after
giving notice in reasonable detail of the expenses incurred. The Indemnified
Party, if it chooses not to control such defense, shall have the right, but not
the obligation, to participate, at its own cost and expense, in the defense,
contest or other opposition of any Loss through legal counsel selected by it and
shall have the right, but not the obligation, to assert any and all cross-claims
or counterclaims that it may have. The Indemnified Party shall, at Indemnitor's
expense, (a) at all times cooperate in all reasonable ways with, make its
relevant files and records available for inspection and copying by, make its
employees reasonably available to and otherwise render reasonable assistance to
each Indemnitor upon request, and (b) not compromise or settle such Loss without
the prior written consent of each Indemnitor, which consent shall not be
unreasonably withheld. If an Indemnitor fails to perform its obligations under
this Article 10, or if an Indemnitor shall have informed the Indemnified Party
in writing in accordance herewith that the Indemnitor does not have an
indemnification obligation hereunder in respect of any Loss, then the
Indemnified Party shall have the right, but not the obligation, to take the
actions that such Indemnitor would have had the right to take in connection with
the performance of such obligations and, if the Indemnified Party is entitled to
indemnification hereunder in respect of the event or circumstance as to which
the Indemnified Party takes such actions, then an Indemnitor shall, in addition
to indemnifying the Indemnified Party for the Loss, indemnify the Indemnified
Party for all of the legal, accounting and other costs, fees and expenses
reasonably and actually incurred in connection with such actions taken by the
Indemnified Party. If an Indemnitor proposes to settle or compromise any Loss,
each Indemnitor shall give written notice to that effect (together with a
statement in reasonable detail of the terms and conditions of such settlement or
compromise) to the Indemnified Party a reasonable time prior to effecting such
settlement or compromise. Notwithstanding anything contained herein to the
contrary, the Indemnified Party shall have the right to object to the settlement
or compromise of any such Loss whereupon (i) the Indemnified Party will assume
the defense, contest or other opposition of any such Loss for its own account
and as if it were an Indemnitor and (ii) each Indemnitor shall be released from
any and all liability with respect to any such Loss to the extent that such
liability exceeds the liability which an Indemnitor would have had in respect of
such a settlement or compromise.
10.7 Option of Buyer. If Buyer is entitled to indemnification under this
Article 10, in lieu of receiving all or any amount of cash due in connection
with such indemnification thereof, Buyer shall be entitled, at the option of
Young, to require any or all of the Sellers to surrender to Buyer a number of
Buyer Shares based on the amount of the Losses for which such indemnification is
sought with Buyer being entitled to one (1) Buyer Share for each U.S. dollar of
the amount of such Losses. Sellers agree that any failure by any Seller to
deliver to Buyer a certificate representing Buyer Shares pursuant to this
Section 10.7 shall not prevent Buyer from deeming such Buyer Shares to have been
transferred or prevent Buyer from deeming the certificate or certificates, as
the case may be, cancelled and of no further force and/or effect, if such
surrender is otherwise called for by this Section 10.7. In addition, execution
of this Agreement by the Sellers shall be deemed to constitute the granting by
Sellers of powers of attorney to Buyer to effect the surrender of Buyer Shares
and cancellation of the certificates therefore in accordance with this Section
10.7. If MRT becomes a holder of any of the Buyer Shares, MRT agrees to be bound
by this Section 10.7.
ARTICLE 11 - RISK OF LOSS
If prior to the Closing all or a Material part (as defined below in this Article
11) of the Real Property or the ZRI Assets is destroyed by fire or the elements
or by any other cause or is taken by eminent domain (collectively, a
"Casualty"), Buyer may, by notice to Seller (as defined below in this Article
11) given prior to the completion of the Closing, elect to terminate this
Agreement. In the event that Buyer shall so elect, the Parties shall be relieved
and released of and from any further liability hereunder (except as otherwise
provided herein). Unless this Agreement is so terminated, or if only an
Immaterial part (as defined below in this Article 11) of the Real Property or
the ZRI Assets is destroyed or damaged by fire or other cause under
circumstances in which the entire loss (less than amount of any deductible) is
covered by insurance or is taken by eminent domain, this Agreement shall remain
in full force and effect, and Seller at the Closing shall pay to Buyer any sums
of money collected by Seller under policies of insurance, after deducting
reasonable collection costs, and in addition Seller shall assign, transfer and
set over to the Buyer all of Seller's right, title and interest in and to such
policies and any further sums payable thereunder and all of the Sellers' right,
title and interest in and to any awards by reason of such taking by eminent
domain. In such circumstances Seller shall file its proof of loss promptly (or
authorize and empower the Buyer to do so) and cooperate with the Buyer in the
processing and adjustment of such claim. As used in this Article 11, "Material"
means destruction or damage which is not repaired or restored prior to the
Closing and which results in five percent (5%) or more of the Real Property
being rendered unoccupiable or five percent (5%) or more of the ZRI Assets being
rendered unusable for the purposes of conducting the Business. "Immaterial"
means destruction or damage which is not Material. The provisions of this
Article 11 shall survive the Closing. For purposes of this Article 11, herein,
the term "Seller" shall be deemed to refer to Powerscourt with respect to the
Real Property, and ZRI with respect to the ZRI Assets.
ARTICLE 12 - PUBLICITY
None of the Seller Parties shall issue any press release or make any public
announcement relating to the subject matter of this Agreement or otherwise
publicize the execution and delivery of this Agreement, the provisions hereof or
the transactions contemplated hereby without the prior written approval of the
form and content of such press release or publicity by Young.
ARTICLE 13 - NOTICES
Any notices, demands or other communication given in connection herewith shall
be in writing and be deemed given (i) when personally delivered, (ii) sent by
facsimile transmission to a number provided in writing by the addressee and a
confirmation of the transmission is received by the sender, or (iii) three (3)
days after being deposited for delivery with a recognized overnight courier,
such as FedEx, with directions to deliver within three (3) days, and addressed
or sent, as the case may be, to the address or facsimile number set forth below
or to such other address or facsimile number as such Party may designate in
accordance herewith:
When Buyer is the intended recipient:
Metals Investment Trust Ltd.
2nd Floor
Berkeley Square House
Berkeley Square
London, England W1X 6EA
Attention: Martin Young
Telephone: 011-44-171-887-6045
Telecopy No.: 011-44-171-887-6540
with a copy to:
Kelley Drye & Warren LLP
1200 19th Street, N.W.
Suite 500
Washington, D.C. 20036
Attention: Robert C. Boehm, P.A.
Telephone: (202) 955-9600
Telecopy No.: (202)955-9792
When any of the Seller Parties are the intended recipients:
Michael Lucas
415 East 151st Street
East Chicago, IN 46312
Telephone: (219) 397-6261
Telecopy No.: (219) 397-6234
with a copy to:
Stein Simpson & Rosen, P.A.
Two University Plaza, Suite 109
Hackensack, New Jersey 07601-6202
Attention: David B. Simpson, Esq.
Telephone: (201) 342-0062
Telecopy No.: (201) 342-1821
ARTICLE 14 - CERTAIN EXPENSES
Except as otherwise provided in this Agreement and regardless of whether the
transactions contemplated by this Agreement are consummated, each Party agrees
to pay all expenses, fees and costs (including, without limitation, legal and
accounting expenses) incurred by it in connection with the transactions
contemplated hereby.
ARTICLE 15 - GOVERNING LAW; FORUM
The validity, interpretation, performance and enforcement of this Agreement
shall be governed by the laws of the State of New York (without giving effect to
the laws, rules or principles of the State of New York regarding conflicts of
laws). Each Party agrees that any proceeding arising out of or relating to this
Agreement or the breach or threatened breach of this Agreement may be commenced
and prosecuted in a state court in the county of New York, State of New York.
Each Party consents and submits to the non-exclusive personal jurisdiction of
any such court in respect of any such proceeding. Each Party consents to service
of process upon it with respect to any such proceeding by registered mail,
return receipt requested, and by any other means permitted by applicable laws
and rules. Each Party waives any objection that it may now or hereafter have to
the laying of venue of any such proceeding in any such court and any claim that
it may now or hereafter have that any such proceeding in any such court has been
brought in an inconvenient forum.
ARTICLE 16 - BINDING EFFECT; ASSIGNMENT; THIRD PARTY BENEFICIARIES
This Agreement shall be binding upon the Parties and their respective successors
and assigns and shall inure to the benefit of the Parties and their respective
successors and permitted assigns. No Party shall assign any of its rights or
delegate any of its duties under this Agreement (by operation of law or
otherwise) without the prior written consent of the other Parties. Any
assignment of rights or delegation of duties under this Agreement by a Party
without the prior written consent of the other Parties shall be void. No person
(including, without limitation, any employee of a Party) shall be, or be deemed
to be, a third party beneficiary of this Agreement.
ARTICLE 17 - ENTIRE AGREEMENT
This Agreement together with the Exhibits and Schedules attached hereto and the
agreements, certificates and instruments delivered pursuant hereto constitutes
the entire agreement among the Parties with respect to the subject matter hereof
and cancels and supersedes all of the previous or contemporaneous agreements,
representations, warranties and understandings (whether oral or written) by,
between or among the Parties with respect to the subject matter hereof.
ARTICLE 18 - FURTHER ASSURANCES
At any time and from time to time after the Closing, each Party shall, at its
own cost and expense, execute, deliver and acknowledge such other documents and
take such further actions as may be reasonably requested by the other Party in
order to fully perform such Party's obligations as contemplated hereby.
ARTICLE 19 - AMENDMENTS
No addition to, and no cancellation, renewal, extension, modification or
amendment of, this Agreement shall be binding upon a Party unless such addition,
cancellation, renewal, extension, modification or amendment is set forth in a
written instrument that states that it adds to, amends, cancels, renews, extends
or modifies this Agreement and is executed and delivered by each Party.
ARTICLE 20 - WAIVERS
No waiver of any provision of this Agreement shall be binding upon a Party
unless such waiver is expressly set forth in a written instrument that is
executed and delivered by such Party. Such waiver shall be effective only to the
extent specifically set forth in such written instrument. Neither the exercise
(from time to time and at any time) by a Party of, nor the delay or failure (at
any time or for any period of time) to exercise, any right, power or remedy
shall constitute a waiver of the right to exercise, or impair, limit or restrict
the exercise of, such right, power or remedy or any other right, power or remedy
at any time and from time to time thereafter. No waiver of any right, power or
remedy of a Party shall be deemed to be a waiver of any other right, power or
remedy of such Party or shall, except to the extent so waived, impair, limit or
restrict the exercise of such right, power or remedy.
ARTICLE 21 - HEADINGS; COUNTERPARTS
The headings set forth in this Agreement have been inserted for convenience of
reference only, shall not be considered a part of this Agreement and shall not
limit, modify or affect in any way the meaning or interpretation of this
Agreement. This Agreement, and any agreement delivered pursuant hereto, may be
signed in any number of counterparts, each of which shall be deemed an original
and all of which together shall constitute one and the same instrument.
ARTICLE 22 - SEVERABILITY
If any provision of this Agreement shall be held to be invalid, unenforceable or
illegal, in whole or in part, in any jurisdiction under any circumstances for
any reason, (i) such provision shall be reformed to the minimum extent necessary
to cause such provision to be valid, enforceable and legal while preserving the
intent of the Parties as expressed in, and the benefits to the Parties provided
by, this Agreement or (ii) if such provision cannot be so reformed, such
provision shall be severed from this Agreement and an equitable adjustment shall
be made to this Agreement (including, without limitation, addition of necessary
further provisions to this Agreement) so as to give effect to the intent as so
expressed and the benefits so provided. Such holding shall not affect or impair
the validity, enforceability or legality of such provision in any other
jurisdiction or under any other circumstances. Neither such holding nor such
reformation or severance shall affect or impair the legality, validity or
enforceability of any other provision of this Agreement.
ARTICLE 23 - RIGHTS AND REMEDIES
All rights, powers and remedies afforded to a Party under this Agreement, by law
or otherwise, shall be cumulative (and not alternative) and shall not preclude
assertion or seeking by a Party of any other rights or remedies.
ARTICLE 24 - CERTAIN DEFINITIONS
As used herein, the word "person" shall include an individual and an entity of
any kind and the neuter gender shall be deemed to include both the masculine and
feminine genders, as the case may be. The Terms "herein," "hereunder," "hereof"
or similar terms shall, unless otherwise indicated, refer to this Agreement as a
whole and not to any particular provision or provisions of this Agreement.
IN WITNESS WHEREOF, the Parties have duly executed and delivered this
Agreement as of the date first above written.
METALS INVESTMENT TRUST LTD.
By: /s/ Martin Young /s/
Name: ___________________________
Title: CEO
METAL RECOVERY INDUSTRIES, INC.
By: /s/ Michael Lucas /s/
Name: ___________________________
Title: President
ZINC RECOVERY, INC.
By: /s/ Michael Lucas /s/
Name: ___________________________
Title: President
POWERSCOURT LIMITED
By: /s/ Michael Lucas /s/
Name: ___________________________
Title: President
METAL RECOVERY TECHNOLOGIES, INC.
By: /s/ Michael Lucas /s/
Name: ___________________________
Title: President
/s/ Michael Lucas /s/
- ---------------------------------
Michael Lucas, Individually
<PAGE>
Schedule 1.1(a)(i)
[Description of Real Property]
<PAGE>
Exhibit 1.1(a)
WARRANTY DEED
[Indiana]
THIS INDENTURE WITNESSETH, That Powerscourt Limited, a company organized and
existing under the laws of the British Virgin Islands ("Grantor"), conveys and
warrants to Metals Investment Trust Ltd., a company organized under the laws of
England and Wales Grantee"), for valuable consideration, the receipt of which is
hereby acknowledged, the real estate in Lake County, Indiana, more particularly
described in the attached Exhibit A.
Subject to any and all easements, agreements and restrictions of record.
The address of such real estate is commonly known as 415 East 151st Street, East
Chicago, Indiana.
Tax bills should be sent to Grantee at such address.
The undersigned persons executing this deed on behalf of Grantor represents
and certifies that he is a manager of Grantor and has been fully empowered, by
proper action of Grantor, to execute and deliver this deed; the Grantor has full
capacity to convey the real estate described herein; and that all necessary
actions for the making of such conveyance has been taken and done.
<PAGE>
Exhibit 1.1(a)
(continued)
IN WITNESS WHEREOF, Grantor has executed this deed this __________ day of
_______________, 199__.
POWERSCOURT LIMITED
ATTEST:
By: By:
Name
Title
STATE OF )
SS:
COUNTY OF )
Before me, a Notary Public in and for said County and State, personally
appeared ___________________, the ___________________ of Powerscourt Limited,
who acknowledged execution of the foregoing Deed for and on behalf of said
Grantor, and who, having been duly sworn, stated that the representations
therein contained are true.
Witness my hand and Notarial Seal this ______ day of ___________, 199__.
My commission expires:
, Notary Public
This instrument was prepared by Kelley Drye & Warren LLP.
<PAGE>
Exhibit A
[To Exhibit 1.1(a)]
<PAGE>
Schedule 1.1(a)(ii)
[PERMITTED TITLE EXCEPTIONS]
<PAGE>
Exhibit 1.1(b)(i)
[Attach Copy of Patent]
<PAGE>
Exhibit 1.1(b)(ii)
[Attach Copy of Patent Application]
<PAGE>
Exhibit 1.1(b)(iii)
ASSIGNMENT
("Process for Dezincing Galvanized Steel")
The undersigned, Metal Recovery Industries (U.S.) Inc. ("Assignor"), owns a
certain patent set forth in U.S. Patent No. 5,779,878 issued on July 14, 1998
entitled "Process for Dezincing Galvanized Steel" (the "PATENT") and Metals
Investment Trust Limited (together with its successors and assigns, "Assignee")
is desirous of acquiring the title, right, benefit and privilege to the PATENT
and of confirming the same or any part thereof heretofore acquired by Assignee.
Now, therefore, for valuable consideration furnished by Assignee to
Assignor, receipt and sufficiency of which Assignor hereby acknowledges,
Assignor hereby, without reservation:
1. Assigns and conveys to and confirms in Assignee the entire right, title
and interest in and to the PATENT, and any reissues and extensions of the PATENT
granted for the inventions and discoveries based upon the PATENT and upon which
the PATENT is based, any foreign applications, including, without limitation,
PCT Patent Application No. PCT/US98/08296 entitled "Process for Dezincing
Galvanized Steel," based in whole or in part on the PATENT, any and all patents
(including extensions thereof) of any country based in whole or in part upon the
PATENT (including extensions thereof), and every priority right that is or may
be predicated upon or arise from the PATENT;
2. Authorizes and requests the Commissioner of Patents of the United States
of America and the empowered officials of all other governments to issue or
transfer the PATENT to Assignee, as assignee of the entire right, title and
interest therein or otherwise as Assignee may direct, including, without
limitation, the right to correct inventorship to include Assignee as a named
inventor who was inadvertently omitted from being named in the patent
application that was filed, which resulted in the PATENT;
3. Warrants that Assignor has not knowingly conveyed to others any right in
the PATENT or any license to use the same or to make, use or sell anything
embodying or utilizing any of the PATENT; and that Assignor has good authority
to assign the same to Assignee without encumbrance;
4. Binds the successors, assigns and legal representatives, as well as
Assignor to do, upon Assignee's request and at its expense, but without
additional consideration to Assignor or its successors, assigns and legal
representatives, all acts reasonably serving to assure that the PATENT shall be
held and enjoyed by Assignee as fully and entirely as the same could have been
held and enjoyed by Assignor or its successors and assigns if this assignment
had not been made; and particularly to execute and deliver to Assignee all
lawful application documents, including petitions, specifications, oaths and all
assignments, disclaimers and lawful affidavits in form and substance as may be
requested by Assignee; to communicate to Assignee all facts known to Assignor
relating to the PATENT or the history thereof; and to furnish Assignee with
Exhibit 1.1(b)(iii)
(continued)
any and all documents in Assignor's control or in the control of Assignor's
successors and assigns and that may be useful for establishing the facts of the
inventions and discoveries upon which the PATENT is based.
The effective date of this instrument is December 7, 1998.
In testimony of which the undersigned has executed this document by its
duly authorized officer.
METAL RECOVERY INDUSTRIES (U.S.) INC.
By: /s/ Michael Lucas /s/
Name: ______________________
Title: President
<PAGE>
Exhibit 1.1(b)(iii)
(continued)
ASSIGNMENT
("Process for Dezincing Galvanized
Steel Using An Electrically Isolated Conveyor")
The undersigned, Metal Recovery Industries (U.S.) Inc. ("Assignor"), owns a
certain application for a United States patent Serial No. 08/680,345 filed July
17, 1996 entitled "Process for Dezincing Galvanized Steel Using An Electrically
Isolated Conveyor" (the "APPLICATION") and Metals Investment Trust Limited
(together with its successors and assigns, "Assignee") is desirous of acquiring
the title, right, benefit and privilege to the APPLICATION and of confirming the
same or any part thereof heretofore acquired by Assignee.
Now, therefore, for valuable consideration furnished by Assignee to
Assignor, receipt and sufficiency of which Assignor hereby acknowledges,
Assignor hereby, without reservation:
1. Assigns and conveys to and confirms in Assignee the entire right, title
and interest in and to the APPLICATION, any other United States applications
(including divisional, continuing or reissue applications) based in whole or in
part on the APPLICATION, and any foreign applications, including, without
limitation, PCT Patent Application No. PCT/US98/08289 entitled "Process for
Dezincing Galvanized Steel Using An Electrically Isolated Conveyor," based in
whole or in part on the APPLICATION, any and all patents (including extensions
thereof) of any country that have been or may be granted on the APPLICATION, and
every priority right that is or may be predicated upon or arise from the
APPLICATION;
2. Authorizes and requests the Commissioner of Patents of the United States
of America and the empowered officials of all other governments to issue or
transfer the APPLICATION to Assignee, as assignee of the entire right, title and
interest therein or otherwise as Assignee may direct, including, without
limitation, the right to correct inventorship to include Assignee as a named
inventor who was inadvertently omitted from being named in the APPLICATION; 3.
Warrants that Assignor has not knowingly conveyed to others any right in the
APPLICATION or any license to use the same or to make, use or sell anything
embodying or utilizing any of the APPLICATION; and that Assignor has good
authority to assign the same to Assignee without encumbrance;
4. Binds the successors and legal representatives, as well as Assignor to
do, upon Assignee's request and at its expense, but without additional
consideration to Assignor or its successors, assigns and legal representatives,
all acts reasonably serving to assure that the APPLICATION, and any registration
that results therefrom, shall be held and enjoyed by Assignee as fully and
entirely as the same could have been held and enjoyed by Assignor or its
successors and assigns if this assignment had not been made; and particularly to
execute and
Exhibit 1.1(b)(iii)
(continued)
deliver to Assignee all lawful application documents, including petitions,
specifications, oaths and all assignments, disclaimers and lawful affidavits in
form and substance as may be requested by Assignee; to communicate to Assignee
all facts known to me relating to the APPLICATION or the history thereof; and to
furnish Assignee with any and all documents in Assignor's control or in the
control of Assignor or its successors and assigns and that may be useful for
establishing the facts of the inventions and discoveries upon which the
APPLICATION is based.
The effective date of this instrument is December 7, 1998. In testimony of
which the undersigned has executed this document by its duly authorized officer.
METAL RECOVERY INDUSTRIES (U.S.) INC.
By: /s/ Michael Lucas /s/
Name: ____________________
Title: President
<PAGE>
Schedule 1.1(c)
Zinc Recovery (East Chicago) Inc.
Inventory
2 Feed Conveyors
Dezinc Drum and tank with 100HP Drive 3 Lift Drums with 10HP Drives 3 Rinse
Tanks Discharge Conveyor Low Pressure Boiler Cooling Tower 7 20,000 gal(US)
Vertical Storage Tanks 2 10,000 gal(US) Horizontal Storage Tanks 3 Electrowin
Tanks Copper Buss and Plates for 1 Electrowin Tank 6 Misc. Pumps Rotary Drum
Filter Rotary Pan Filter 40 HP Vacuum Pump Complete Motor Control Center Fork
Lift Miscellaneous. Tools Miscellaneous Office Furniture 5 Pentium Computers
Miscellaneous Laboratory Equipment
<PAGE>
Exhibit 1.1(c)
BILL OF SALE
THIS BILL OF SALE ("Bill of Sale"), is made effective as of December 7,
1998, by Zinc Recovery (East Chicago), Inc. ("Seller");
RECITALS
WHEREAS, Seller, Metals Investment Trust Ltd. ("Buyer") and certain other
Parties have entered into that certain Asset Purchase and Sale Agreement, dated
as of ______________, 1998 (the "Asset Purchase Agreement") (capitalized terms
not otherwise defined herein shall have the meanings assigned to such terms in
the Asset Purchase Agreement), whereby Seller has agreed to sell, transfer,
assign, convey, and deliver to Buyer the assets identified on Schedule A
attached hereto (the "Assets"), at the Closing in consideration for the payment
by Buyer to Seller of the consideration specified in the Asset Purchase
Agreement; and
WHEREAS, the parties desire that this Bill of Sale shall and does formalize
certain of the conveyances and transactions contemplated by the Asset Purchase
Agreement.
NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS: that, for good and valuable
consideration, the receipt and legal sufficiency of which is hereby
acknowledged, and the performance by Buyer of its obligations set forth in the
Asset Purchase Agreement, including payment of the Purchase Price with respect
to the Assets, receipt of which is hereby acknowledged by Seller, Seller does
hereby bargain, sell, transfer, assign, convey and deliver to Buyer free and
clear of all security interests, pledges, liens, claims and encumbrances of
every kind and nature, the Assets.
TO HAVE AND TO HOLD all of the Assets unto Buyer, its successors and
assigns, forever.
Seller covenants that it will do or cause to be done all such further acts,
and shall execute and deliver, or cause to be executed and delivered, all
transfers, assignments and conveyances, evidences of title, notices, powers of
attorney, and assurances necessary or desirable to put Buyer and its successors
and assigns, in actual possession and operating control of the Assets, or as
Buyer shall reasonably require to better assure and confirm title of Buyer to
the Assets.
Seller hereby constitutes and appoints Buyer the true and lawful attorney
of Seller, with full power of substitution, in the name and stead of Seller or
otherwise, for the account and benefit of Buyer:
(i) to demand and receive from time to time any and all of the Assets;
(ii) to give receipts and releases for and in respect to the Assets or
any part thereof; and
Exhibit 1.1(c)
(continued)
(iii) to give any notices and to do all acts and things in relation to
the Assets as Buyer shall deem desirable, including, but not limited to,
executing any and all legal or administrative documents or proceedings to
assert or enforce any claim, right or title in or to any of the Assets.
Seller hereby represents and warrants that: (i) it is the lawful owner of
all of the Assets; (ii) that all of the Assets are free and clear of all
security interests, pledges, liens, claims and encumbrances of every kind and
nature; and (iii) that Seller has good right and lawful authority to bargain and
sell the Assets and the rights transferred in connection therewith in the manner
and form set forth herein. Seller further warrants and agrees that it shall
defend for the benefit of Buyer, at Seller's sole cost and expense, the Assets
and rights transferred in connection therewith against all claims and demands of
any individual, firm, corporation or entity whatsoever.
IN WITNESS WHEREOF, Seller has duly executed this Bill of Sale as of the
day and year first above written.
ZINC RECOVERY (EAST CHICAGO), INC.
By: /s/ Michael Lucas /s/
Name: ___________________________
Title: President
The foregoing Bill of Sale is hereby accepted, as of December 7, 1998.
METAL INVESTMENT TRUST LTD.
By: /s/ Martin Young /s/
Name: ___________________________
Title: CEO
<PAGE>
Schedule A to Exhibit 1.1(c)
Zinc Recovery (East Chicago) Inc.
Inventory
2 Feed Conveyors
Dezinc Drum and tank with 100HP Drive 3 Lift Drums with 10HP Drives 3 Rinse
Tanks Discharge Conveyor Low Pressure Boiler Cooling Tower 7 20,000 gal(US)
Vertical Storage Tanks 2 10,000 gal(US) Horizontal Storage Tanks 3 Electrowin
Tanks Copper Buss and Plates for 1 Electrowin Tank 6 Misc. Pumps Rotary Drum
Filter Rotary Pan Filter 40 HP Vacuum Pump Complete Motor Control Center Fork
Lift Miscellaneous. Tools Miscellaneous Office Furniture 5 Pentium Computers
Miscellaneous Laboratory Equipment
<PAGE>
Schedule 1.2(a)
Outstanding Items to be Paid at Closing
Creditor Amount Debtor
America National Bank $20,000 MRI
State of Delaware (franchise tax) $57,500 MRT*
Lake County, Indiana $212,500 Powerscourt
Class Action Escrow Account $175,000 MRT*
Richards, Layton & Finger $35,000 MRT*
*MRI owes in excess of the aggregate of these amounts to MRT; accordingly, MRI
will permit these amounts to paid on behalf of MRT.
<PAGE>
Schedule 3.4
None
<PAGE>
Schedule 3.5
Permit for the operation of a low pressure boiler
<PAGE>
Schedule 3.6(a)
See Schedule 3.9
<PAGE>
Schedule 3.6(b)
Unpaid payroll Taxes
MRI $150,634
ZRI $36,799
<PAGE>
Schedule 3.6(c)
USA federal (Form 1120) and state income tax returns filed for MRT, MRI and ZRI
for tax years 1993 through 1997. None of the returns have been audited, nor has
there been a notice of audit issued for any of the returns. No taxes owed for
any such tax years.
<PAGE>
Schedule 3.6(e)
Zinc Recovery (East Chicago) Inc.
Balance Sheet as of 30th September 1998
ASSETS
Cash 26,791
Property Plant & Equipment 3,333,682
$3,360,473
LIABILITIES
Accounts payable 15,425
Loan - MRI 3,000,000
Loan - MRT 345,048
-----------
$3,360,473
Metal Recovery Industries (US) Inc.
Balance Sheet as of 30th September 1998
ASSETS
Patent 2,500,000
Due from Zinc Recovery 3,000,000
$5,500,000
LIABILITIES
Accounts payable 1,652,294
Due to MRT 8,040,879
D.O.E. Grant 505,000
-----------
$10,198,173
Stockholders equity (4,698,173)
$ 5,500,000
<PAGE>
Schedule 3.6(e)
(continued)
Metal Recovery Technologies Inc.
Balance Sheet as of 30th September 1998
ASSETS
Cash 38,528
Due from MRI 8,040,879
Due from Zinc Recovery 345,048
-----------
$8,424,455
LIABILITIES
Accounts payable 807,426
Convertible loan 2,750,901
Lawsuit settlement 2,375,000
---------
5,9343,127
Stockholders equity 2,491,328
$8,424,455
<PAGE>
Exhibit 3.6(e)
Zinc Recovery (East Chicago) Inc.
Balance Sheet as of 30th September 1998
ASSETS
Cash 26,791
Property Plant & Equipment 3,333,682
$3,360,473
LIABILITIES
Accounts payable 15,425
Loan - MRI 3,000,000
Loan - MRT 345,048
-----------
$3,360,473
Metal Recovery Industries (US) Inc.
Balance Sheet as of 30th September 1998
ASSETS
Patent 2,500,000
Due from Zinc Recovery 3,000,000
$5,500,000
LIABILITIES
Accounts payable 1,652,294
Due to MRT 8,040,879
D.O.E. Grant 505,000
-----------
$10,198,173
Stockholders equity (4,698,173)
$ 5,500,000
<PAGE>
Exhibit 3.6(e)
(continued)
Metal Recovery Technologies Inc.
Balance Sheet as of 30th September 1998
ASSETS
Cash 38,528
Due from MRI 8,040,879
Due from Zinc Recovery 345,048
-----------
$8,424,455
LIABILITIES
Accounts payable 807,426
Convertible loan 2,750,901
Lawsuit settlement 2,375,000
---------
5,9343,127
Stockholders equity 2,491,328
$8,424,455
<PAGE>
Schedule 3.7(b)
Property Taxes due to Lake County, Indiana $262,000
<PAGE>
Schedule 3.7(e)
ZINC RECOVERY -- Oral one year lease from September 15, 1997 from Powerscourt
Ltd. at $120,000 per annum regarding 415 East 151st Street East Chicago,
Indiana.
<PAGE>
Schedule 3.7(j)
None
<PAGE>
Schedule 3.9
COMPLETE LIST OF CREDITORS/CLAIMS/LIEN
METAL RECOVERY INDUSTRIES (US) INC
JUDGEMENTS
Budget Maintenance 10,062.22 + costs
Joseph Turner 5,891.87 + costs
Konrad Electric 3,288.38 + costs
Arctic Engineering 20, 807.45 + costs
Howard Industries 67,044.19 + costs
Mary Wong 44,016.78 + costs
William Condon & Co. Ltd. 34,501.57 + costs
Vannoort & Associates 4,520.96 + costs
T & M Rentals 9,290.24 + costs
Berry Company 13,500.21 + costs
UCC FILINGS
American National Bank (Negotiated Settlement for $20,000)
Plenbrick Ltd. $3,000,000
STATE TAX LIENS
Indiana State Withholding $11,352.53
Personal Property Tax $4,000.00
<PAGE>
Schedule 3.9
(continued)
METAL RECOVERY TECHNOLOGIES INC
JUDGEMENTS
Calumet Lumber $4,864.09 + costs
Joseph Turner $5,891.87 + costs
Arctic Engineering $20,803.45 + costs
Global Travel $65,597.99 + costs
Howard Industries $109,215.37 + costs
Berry Bearing $13,500.21 + costs
Cambridge-Lee Industries $19,226.69 + costs
UCC FILINGS
Plenbrick Ltd.
Howard Industries
Alma Tractor
Stanley Smith Security, Inc.
Berry Bearing Company
Arctic Engineering
T&M Rentals, Inc.
Danville Bank
TAXES
Delaware Franchise Tax $57,500
<PAGE>
Schedule 3.9
(continued)
ZINC RECOVERY (EAST CHICAGO) INC
JUDGEMENTS
None
UCC FILINGS
Regent Trust Company S.A.
Plenbrick Ltd.
<PAGE>
Schedule 3.9
(continued)
POWERSCOURT LTD
JUDGEMENTS
None
TAX LIENS
Real Estate Taxes $262,000
<PAGE>
Schedule 3.10(a)
See Schedule 3.29
Payroll Issues
For paychecks written or due up to and including November 6, 1998, representing
pay periods through October 29, 1998 Zinc Recovery (East Chicago), Inc. has
outstanding payroll and payroll tax liabilities:
Direct Payroll $ 20,633.42
Federal Taxes $ 36,799.83
State Taxes $ 7,992.72
Court Ordered Child
Support Payments $ 735.00
-----------------
TOTAL $ 60,878.24
Contract Issues
The following is a list of vendors with whom Zinc Recovery (East Chicago), Inc.
has entered into contracts along with a brief description of the current status
of the contract-
Ristich Asphalt
Contracted to repave a pomon of the property. Contract price
$37,369.85. Work complete. Paid $12,000, outstanding and
past due $25,369.85
Norris
Scale Contracted to provide and install a truck scale on
site. Contract Price $35,000. Down Payment of $10,000 made.
Progress payments due September 1 ($10,000) and final
payment due October 1, 1998 with installation during the
month of September.
Aaron's
Equipment Contract for purchase of used equipment necessary
for the project. Contract price $165,000. Down payment
S25,000 made. Original contract called for full payment and
removal of purchased equipment from Aaron's property by
October 1, 1998. Terms extended to November 1, 1998.
Custom Steel Bldg.
Contracted to erect a steel building on site to house
electrowinning operations. Contract price $171,000. Progress
payments to be made based on stages of construction. Current
status: building shell complete, pouring of concrete floor
delayed until ZRI establishes locations for and pours
concrete for equipment foundations. Progress payments
currently due $111,000, balance due on completion and
occupancy.
Clinton Power
Contracted to provide rectifying transformers for the
electro-win process. In order to secure preferred pricing
the contract is for the delivery of rectifiers capable of
10,000 KvA. This project will utilize 24 units with a total
capacity of 2,000 KvA. The total cost of units for this
project will be $388,541. Units for this project were to be
purchased in four installments based on Clinton's production
capabilities making the per installment cost $97,135. A down
payment of $28,000 was made against the first installment
with other progress payments due. These progress payments
were not made on time. Owing to this fact Clinton is
requiring full payment for the first installment and all
future installments prior to initiating construction of the
units. This makes the current due $69,135 and the total due
for the balance of this project $360,541.
Conclusion:
Total contracts currently in place $795,910
Monies paid $ 75,000
Due in total $720,910
Past due or immediately due $355,504
Administrative Bills
The following is a list of current normal administrative bills
due, or past due:
Insurance
Health $ 2,529.70
General Liability $ 3,669.84
Utilities
NIPSCO
Plant gas $ 2,057.66
Plant elec. $ 931.93
Office gas/elec. $ 1,324.14
Phone
Ameritech (local) $ 1,326.56
PNG (long dist) $ 586.88
Water
East Chicago $ 72.47
Castlewood $ 114.08
Garbage $ 70.53
ADT Security $ 244.34
Leases
Danka (copy mach) $ 483.66
Chase
Truck $ 749.07
Car $ 696.59
Freight
DHL (air parcel) $ 207.10
R&L (trucking) $ 238.28
Chgo Sub (trucking) $ 27.00
Misc.
David Lade $ 6,000.00
Van Dyne (uniform svc) $ 639.17
Senniger Powers (Atty.) $ 1,855.21
Corporate $45,000.00
Total $68,824.21
<PAGE>
Schedule 3.11
None
<PAGE>
Schedule 3.12(a)
<PAGE>
Schedule 3.13(i)
MRI Authority to do business in Indiana
MRT Authority to do business in Indiana
ZRI Low pressure boiler permit
<PAGE>
Schedule 3.13(ii)
MRT Authority to do business in Indiana
MRI Authority to do business in Indiana
<PAGE>
Schedule 3.13(iii)
MRT Authority to do business in Indiana
MRI Authority to do business in Indiana
<PAGE>
Schedule 3.14(b)(i)
None
<PAGE>
Schedule 3.14(b)(ii)
See attached Department of Energy document.
<PAGE>
Schedule 3.15(i)
None
<PAGE>
Schedule 3.15(ii)
The Company was subject to an industrial dispute in 1996 that resulted in a
negotiated settlement.
<PAGE>
Schedule 3.16(c)
None
<PAGE>
Schedule 3.17
On 29 April 1998 all of the tangible and intangible assets of Metal Recovery
Industries (US) Inc. (excluding the patent) were transferred to Zinc Recovery
(East Chicago) Inc., a wholly owned subsidiary of Metal Recovery Technologies
Inc. Zinc Recovery (East Chicago) Inc. was incorporated in Indiana on 31 March
1998.
<PAGE>
Exhibit 3.17
[10-K business Descriptions]
<PAGE>
Schedule 3.18
None
<PAGE>
Schedule 3.19
Outstanding Litigation
See Schedule 3.9
MRT
Class Action lawsuits in Delaware and Texas
METAL RECOVERY INDUSTRIES (US) INC
Fisher Scientific seeking $3,400
Indiana Department of Revenue has pending action for $11,148.00 for back taxes.
<PAGE>
<TABLE>
<CAPTION>
Schedule 3.20
All insurance Provided by the Hartford Insurance Company
COMMERCIAL PROPERTY
<S> <C> <C>
- ------------------------------ ---------------------------------------------------- --------------------------------
COVERAGE LIMITS PREMIUM
- ------------------------------ ---------------------------------------------------- --------------------------------
- ------------------------------ ---------------------------------------------------- --------------------------------
Building Total limit: $741,300
Deductible: $1,000 $1,335
Per schedule Coinsurance: 80%
Valuation: Replacement cost
- ------------------------------ ---------------------------------------------------- --------------------------------
- ------------------------------ ---------------------------------------------------- --------------------------------
Business personal property Total limit: $924,000
Deductible: $1,000 $4,279
Per Schedule Coinsurance: $80%
Valuation: Replacement cost
- ------------------------------ ---------------------------------------------------- --------------------------------
- ------------------------------ ---------------------------------------------------- --------------------------------
Business Income Total limit: $1,080,000
Deductible: 12-hour waiting per. $1,426
Including Extra Expense Coinsurance: 80%
Valuation: Replacement cost
- ------------------------------ ---------------------------------------------------- --------------------------------
- ------------------------------ ---------------------------------------------------- --------------------------------
Boiler & Machinery Total limit: $1,000,000 $1,102
Coverage Form:
Comp. Syst. Brkdwn
Business Income Include? Yes
Deductible: $1,000 Direct DMG & 12 hour
business income
- ------------------------------ ---------------------------------------------------- --------------------------------
- ------------------------------ ---------------------------------------------------- --------------------------------
Ordinance of Law Bldg. No/Prem. No.: All/All
Coverage A $ 622
Coverage B: 117,000
Coverage C: 368,000
- ------------------------------ ---------------------------------------------------- --------------------------------
- ------------------------------ ---------------------------------------------------- --------------------------------
Off Premises Power $500,000 $ 275
- ------------------------------ ---------------------------------------------------- --------------------------------
- ------------------------------ ---------------------------------------------------- --------------------------------
TOTAL PROPERTY PREMIUM $9,039
- ------------------------------ ---------------------------------------------------- --------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Schedule 3.20
(Continued)
COMMERCIAL CRIME
<S> <C> <C>
- ------------------------------------- ----------------------------------------------------- -------------------------
COVERAGE LIMITS PREMIUM
- ------------------------------------- ----------------------------------------------------- -------------------------
- ------------------------------------- ----------------------------------------------------- -------------------------
Fidelity Coverage $50,000 $ 592
- ------------------------------------- ----------------------------------------------------- -------------------------
- ------------------------------------- ----------------------------------------------------- -------------------------
Computer Fraud Coverage $10,000 $ 158
Form F
- ------------------------------------- ----------------------------------------------------- -------------------------
- ------------------------------------- ----------------------------------------------------- -------------------------
Extortion Coverage $10,000 $ 21
Form G
- ------------------------------------- ----------------------------------------------------- -------------------------
- ------------------------------------- ----------------------------------------------------- -------------------------
Depositor's Forgery $10,000 $ 123
- ------------------------------------- ----------------------------------------------------- -------------------------
- ------------------------------------- ----------------------------------------------------- -------------------------
Robbery & Safe Burglary $10,000 $ 357
- ------------------------------------- ----------------------------------------------------- -------------------------
- ------------------------------------- ----------------------------------------------------- -------------------------
TOTAL FOR CRIME $1,251
- ------------------------------------- ----------------------------------------------------- -------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Schedule 3.20
(Continued)
COMMERCIAL AUTO
<S> <C> <C>
- ------------------------------------- ----------------------------------------------------- -------------------------
COVERAGE LIMITS PREMIUM
- ------------------------------------- ----------------------------------------------------- -------------------------
- ------------------------------------- ----------------------------------------------------- -------------------------
Automobile Liability $500,000 each accident $ 1,172
- ------------------------------------- ----------------------------------------------------- -------------------------
- ------------------------------------- ----------------------------------------------------- -------------------------
Automobile Medical Payments $5,000 each insured $ 60
- ------------------------------------- ----------------------------------------------------- -------------------------
- ------------------------------------- ----------------------------------------------------- -------------------------
Uninsured Motorist and Underinsured $500,000 each accident $ 121
Motorist
- ------------------------------------- ----------------------------------------------------- -------------------------
- ------------------------------------- ----------------------------------------------------- -------------------------
Comprehensive Physical Damage Various $ 218
(including hired at a $20,000 limit)
- ------------------------------------- ----------------------------------------------------- -------------------------
- ------------------------------------- ----------------------------------------------------- -------------------------
Collision Physical Damage Various $ 343
(including hired at limit of
$20,000)
- ------------------------------------- ----------------------------------------------------- -------------------------
- ------------------------------------- ----------------------------------------------------- -------------------------
Commercial Automobile Broad Form INCLUDED
Endorsement
- ------------------------------------- ----------------------------------------------------- -------------------------
- ------------------------------------- ----------------------------------------------------- -------------------------
TOTAL ANNUAL PREMIUM $1,914
- ------------------------------------- ----------------------------------------------------- -------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Schedule 3.20
(continued)
GENERAL LIABILITY
<S> <C> <C>
- ------------------------------------- ----------------------------------------------------- -------------------------
COVERAGE LIMITS PREMIUM
- ------------------------------------- ----------------------------------------------------- -------------------------
- ------------------------------------- ----------------------------------------------------- -------------------------
Premises/Operations Liability $1,000, 000 each occurrence $ 990
$2,000,000 aggregate
- ------------------------------------- ----------------------------------------------------- -------------------------
- ------------------------------------- ----------------------------------------------------- -------------------------
Personal and Advertising Injury $1,000,000 each occurrence Included
Liability
- ------------------------------------- ----------------------------------------------------- -------------------------
- ------------------------------------- ----------------------------------------------------- -------------------------
Fire Damage $300,000 Included
- ------------------------------------- ----------------------------------------------------- -------------------------
- ------------------------------------- ----------------------------------------------------- -------------------------
Medical Expense $10,000 Included
- ------------------------------------- ----------------------------------------------------- -------------------------
- ------------------------------------- ----------------------------------------------------- -------------------------
Products/Completed Operations $1,000,000 each occurrence $5,150
Liability
- ------------------------------------- ----------------------------------------------------- -------------------------
- ------------------------------------- ----------------------------------------------------- -------------------------
Employment Practices $1,000,000 per claim $2,500 Minimum
Liability Insurance $1,000,000 annual aggregate Premium
Declined by John Dewy 8/14/98
- ------------------------------------- ----------------------------------------------------- -------------------------
- ------------------------------------- ----------------------------------------------------- -------------------------
Employee Benefits $1,000,000 per claim $ 84
$2,000,000 annual aggregate
- ------------------------------------- ----------------------------------------------------- -------------------------
- ------------------------------------- ----------------------------------------------------- -------------------------
TOTAL GENERAL LIABILITY $6,224
PREMIUM (without EPLI indication)
- ------------------------------------- ----------------------------------------------------- -------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Schedule 3.20
(continued)
WORKERS' COMPENSATION
<S> <C> <C>
- ------------------------------------- ----------------------------------------------------- -------------------------
COVERAGE LIMITS PREMIUM
- ------------------------------------- ----------------------------------------------------- -------------------------
- ------------------------------------- ----------------------------------------------------- -------------------------
Workers' Compensation Statutory $15,147
- ------------------------------------- ----------------------------------------------------- -------------------------
- ------------------------------------- ----------------------------------------------------- -------------------------
Employers' Liability $500,000 bodily injury by accident - each accident Included
$500,000 bodily injury by disease - policy limit
$500,000 bodily injury by disease - each employee
- ------------------------------------- ----------------------------------------------------- -------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Schedule 3.20
(continued)
COMMERCIAL UMBRELLA QUOTE
<S> <C> <C>
- ------------------------------------- ----------------------------------------------------- -------------------------
COVERAGE LIMITS PREMIUM
- ------------------------------------- ----------------------------------------------------- -------------------------
- ------------------------------------- ----------------------------------------------------- -------------------------
Umbrella Liability $5,000,000 each occurrence $4,000
$5,000,000 general aggregate
$5,000,000 products/completed operations
$5,000,000 bodily injury from disease aggregate
- ------------------------------------- ----------------------------------------------------- -------------------------
- ------------------------------------- ----------------------------------------------------- -------------------------
Self Insured Retention $10,000 each occurrence Not Applicable
- ------------------------------------- ----------------------------------------------------- -------------------------
- ------------------------------------- ----------------------------------------------------- -------------------------
TOTAL UMBRELLA PREMIUM $4,000
- ------------------------------------- ----------------------------------------------------- -------------------------
- ------------------------------------- -------------------------------------------------------------------------------
COVERAGE LIMITS
- ------------------------------------- -------------------------------------------------------------------------------
- ------------------------------------- -------------------------------------------------------------------------------
General Liability $1,000,000 each occurrence
$2,000,000 general aggregate
$1,000,000 products/completed operations
$2,000,000 aggregate
- ------------------------------------- -------------------------------------------------------------------------------
- ------------------------------------- -------------------------------------------------------------------------------
Automobile Liability $500,000 each accident
- ------------------------------------- -------------------------------------------------------------------------------
- ------------------------------------- -------------------------------------------------------------------------------
Employers' Liability $500,000 bodily injury from disease aggregate
- ------------------------------------- -------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Schedule 3.20
(continued)
PREMIUM SUMMARY
<S> <C> <C> <C> <C>
- -------------------- ---------------------------------- --------------------- --------------------- -------------------
POLICY # TYPE OF CONTRACT LIMITS EXPIRATION DATE PREMIUMS
- -------------------- ---------------------------------- --------------------- --------------------- -------------------
- -------------------- ---------------------------------- --------------------- --------------------- -------------------
Property (including machinery & $ 7,657 $ 9,039
Equip.)
- -------------------- ---------------------------------- --------------------- --------------------- -------------------
- -------------------- ---------------------------------- --------------------- --------------------- -------------------
36 UUN PS2686 General Liability $18,607 8/31/99 $ 6,224
- -------------------- ---------------------------------- --------------------- --------------------- -------------------
- -------------------- ---------------------------------- --------------------- --------------------- -------------------
36 UUN PS2686 Commercial Marine $ 270 8/31/99 $0
*Declined by John
Dewy 8/14/97
- -------------------- ---------------------------------- --------------------- --------------------- -------------------
- -------------------- ---------------------------------- --------------------- --------------------- -------------------
36 UUN PS2686 Crime & Employee Dishonesty $ 1,106 8/31/99 $ 1,251
- -------------------- ---------------------------------- --------------------- --------------------- -------------------
- -------------------- ---------------------------------- --------------------- --------------------- -------------------
36 UUN PS2686 Commercial Automobile $ 2,770 8/31/99 $ 1,914
- -------------------- ---------------------------------- --------------------- --------------------- -------------------
- -------------------- ---------------------------------- --------------------- --------------------- -------------------
PACKAGE SUBTOTAL $30,410 $18,428
- -------------------- ---------------------------------- --------------------- --------------------- -------------------
- -------------------- ---------------------------------- --------------------- --------------------- -------------------
36 WEBC 4368 Worker's Compensation $15,629 8/31/99 $15,147
- -------------------- ---------------------------------- --------------------- --------------------- -------------------
- -------------------- ---------------------------------- --------------------- --------------------- -------------------
36 RNUPU 3894 Commercial Umbrella $10,000 8/31/99 $ 4,000*
*Declined by John
Dewy 8/14/97
- -------------------- ---------------------------------- --------------------- --------------------- -------------------
- -------------------- ---------------------------------- --------------------- --------------------- -------------------
Foreign Coverage $ $
*Declined by John
Dewy 8/14/97
- -------------------- ---------------------------------- --------------------- --------------------- -------------------
- -------------------- ---------------------------------- --------------------- --------------------- -------------------
TOTAL ACCOUNT PREMIUM $56,039 $33,575
*EPLI and Umbrella quote
excluded from premium total
- -------------------- ---------------------------------- --------------------- --------------------- -------------------
</TABLE>
<PAGE>
Schedule 3.27
MRI: 100% of capital stock held by MRT
ZRI: 100% of capital stock held by MRT
<PAGE>
<TABLE>
<CAPTION>
Schedule 3.28
MRI Creditors
<S> <C>
AAA Valley Equipment 82.95
Acn Scribe 346.50
Airborne Express 462.14
Alexander Chemical 5,659.31
Allwaste 835.00
Ameritronic Industries 4,387.50
American Recycling 198.00
Ameritech Cellular 829.65
Associated Box 161.00
Autocatalytic Sales 2,704.19
B Hough 6,286.00
Bay Tech 486.90
Budget Maintenance 1,319.52
Burns Security 16,395.14
Calumet Electric 832.16
Charles Kawin 50.00
Chicago Crane 10,963.56
Control Techniques 14,487.27
Copy America 599.60
Corrosion Fluid 1,141.54
Dove Lighting 286.61
Dtech 915.00
EPI Quality Environmental 1,070.00
ERM North Central 1,190.00
Federal Value 11,123.37
Fisher Scientific 3,400.67
Fitzpatrick Transport 3,225.93
Franks Equipment 398.13
Freund Can Co. 193.58
Garman Custom Color 1,947.75
Gateway 90.07
Gene Lauer 1,029.61
General Motors 377,110.43
Grainger 2,339.42
Greenwood Tool 1,526.00
Heritage 822.50
Hessville Cable 249.52
Holloway Meyers 10,347.00
HR Direct 163.23
IDC 453.72
Ikon 2,616.10
Ikon Office 1,587.60
Illiana Disposal 182.17
Imperial Crane 825.00
Indiana Dep't. of Revenue 570.86
Industrial Kiln 1,446.64
Igenco Inc. 1,720.25
Jack Gray 1,268.02
Joseph Turner 5,891.87
Journeyman 1,037.21
Konrad Electric 3,288.38
Korte Bros. 109.40
Krooswyk Tracking 2,047.50
KTM Sales 2,038.78
Lab Safety 1,188.51
Lake County Indiana 711.04
Lindy's ACE Hardware 3,529.54
Lucky Pennage 19,381.03
MAB Paints 175.30
Manpower Inc. 2,690.64
Master Garage 90.61
McMaster Carr 3,911.36
McCann Power 454.58
Meade Industrial 815.75
Merrill Corp. 6,258.41
Metal Bulletin 1,122.00
Metal Bulletin Inc. 750.00
Metech 3,862.00
Mindermann Trucking 314.50
North America van Lines 7,042.83
OK Safety 1,101.04
Omega Engineering 895.55
Ozinga 3,083.50
Park Davidson 10,450.00
Patten 1,945.91
Payroll Taxes - State and Federal 150,634.21
Personal Property Tax - Indiana 4,000.00
Peterson Bros. 495.88
Pinkerton Oil 8,683.07
Pitney Bowes 134.65
Pitney Bowes Purchase 716.44
Planet Inc. 248.00
PNG 962.51
Poly Bond 1,548.75
Process Electronics 110.00
Quality Construction 2,084.50
Reporting Associates 337.40
Revere Electric 12,035.50
S&M Building 1,582.85
S&M Building Management 725.00
Sargent Electric 982.96
Security Life 356.54
Sigma Aldrich 801.32
Southeastern Medical 210.00
SSOE Inc. 260,380.13
Store Transport 1,131.17
Superior Sanitation 552.00
TCI Inc. 96.88
The Nolan Group 7,641.67
University of California 182,854.00
Unlimited Graphix 459.25
Van Dywe Inc. 1,439.81
Nidimos Inc. 5,459.77
Wilson Rentals 652.68
NLRB (National Labor Relation Board) 30,000.00
Ace Hose & Rubber 371.28
Aga Gas 1,016.07
American National Bank 20,000.00
Artic Engineering 20,807.45
Ardillo Corp. 7,203.48
B & B Instruments 316.23
Barr Glove 455.60
Biotek 108.22
Budget Maintenance 10,062.22
Butler Trucking 4,048.60
Cal Region Supply 83.06
Camadon Inc. 84.78
Cambridge Lee 2,144.70
Cares Inc. 62.22
CF Motorfreight 158.70
Chemsearch 535.47
Clark Maintenance 72.76
Colombia Pipe 148.29
Contractors Power 375.00
Conran Plumbing 3,849.48
Crowe Foundry 8,022.13
E J & E Inc. 2,880.00
E. McTigne 2,298.20
Emergency Medicine 182.00
Fargo 3,059.40
Glass Parts Tire 995.00
Howard Industries Inc. 82,282.09
Konrad Electric 945.00
Larry Woolfe 180.00
Mack Pump 2,660.01
Mary Wong 15,000.00
Metron Steel 82.88
Mills Electric CO. 150.15
Mitsui 2,055.00
Monarch Steel 373.02
Nassan & Thompson 82.92
PBB 1,371.89
Quest 161.50
Ramada 1,396.77
Reliable Transportation 455.00
S&S Repair 750.00
Sargent Electric 21,285.70
Sprint 1,556.49
St. Catherines Hospital 507.29
St. Margarets Hospital 321.13
T&M Rentals 3,859.49
Target Rentals 64.83
Towne Airfreight 102.47
Vail Rubber 2,985.38
WR Scientific 2,894.87
Wells Lamonk 177.90
Wm. Condon 15,000.00
1,590,086.96
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Schedule 3.28
(continued)
ZRI CREDITOR LIST
CREDITOR AMOUNT DUE
- -------------------------------------------------------------------- ---------------------------
<S> <C>
Aaron Equipment $135,000.00
Bearing Headquarters $1,000.00
Clinton Power $69,135.00
Custom Steel Buildings $111,000.00
Journeyman $1,403.41
Norris Scale $10,000.00
Ristick Asphalt $24,552.00
Anthem $5,256.69
R & L Carriers $238.28
Dep't of Water Works $53.67
Nipsco $2,057.27
Nipsco $996.88
Van Dyne Crotty $233.88
Nipsco $931.93
Ameritech $1,326.56
Png Communications $586.88
Castlewood $114.08
Chase - Auto $696.59
Chase - Auto $749.07
Illiana Disposal & Waste $70.53
Danka $239.76
DHL $31.80
Indiana Dept. Of Revenue $546.91
Payroll Taxes 443,789.00
Powerscourt Ltd. (Lease) 130,000.00
----------
TOTAL $940,010.19
</TABLE>
<TABLE>
<CAPTION>
Schedule 3.28
(continued)
MRT Creditors
<S> <C>
Abrahamson Read 20,000.00
Berry Bearing 13,500.21
Calumet Lumber 4,864.09
Joseph Turner 5,891.87
Arctic Engineering 20,803.45
Howard industries 109,215.37
Global Travel 65,597.99
Cambridge-Lee Industries 19,226.69
Plenbrick Ltd. 3,000,000.00
Stanley Smith Security, Inc, 5,000.00
Crowe & Dunlevy 10,158.41
Delaware franchise Taxes 60,000.00
Dorman Jeffrey 22,070.77
Franchise Tax - State of Delaware 57,500.00
Global Travel 21,940.02
Grossclose 2,350.00
Liddell Sapp 55,916.55
F. Raghzzio, Esq. 6,393.00
Richards Layton & Finger 80,386.75
Scott Spooner 8,377.00
Summit Shipping 4,441.23
The Times 1,652.04
Real Estate Taxes Property Lien 250,000.00
Mikinda Cottrell 10,000.00
Class Action lawsuit 175,000.00
American National Bank 20,000.00
Salaries 14,000.00
Mannlink Travel 8,000.00
-------------
4,072,285.44
</TABLE>
<PAGE>
Schedule 3.29
Immediate requirements are as follows:
Past payroll including taxes $ 72,994
Owed Vendors $ 354,672
Local business expenses $ 35,402
Corporate $ 45,000
------------
Total $ 508,068
From the accompanying spreadsheet
The original project budget $ 2,687,265
Less spent to date
This figure includes the $485,206
Sited above $ 832,260
-----------
Balance needed to complete project $ 1,855,005
Forward Cash Flow
Cash requirements for the weeks of November 9 and November 16, 1998 will be as
follows:
Total labor (including taxes) $ 8,500 per week
Administrative expenses $10,000 total
New contracts $55,000 approximate
Direct local construction costs $35,000 approximate
Total $117,000 approximate
Summary
The immediate financial requirement to reinitiate the project at East
Chicago is:
$508,068
<PAGE>
Schedule 4.2(b)
None
<PAGE>
Schedule 4.4
ZINC RECOVERY [$17,089]
<PAGE>
