Exhibit 99.2
ASSET PURCHASE AGREEMENT
dated as of April __, 2003
by and among
UNITED STATES STEEL CORPORATION
and
NATIONAL STEEL CORPORATION
and
THE SUBSIDIARIES OF NATIONAL STEEL CORPORATION
SET FORTH ON THE SIGNATURE PAGES HERETO
ARTICLE 1 DEFINITIONS..............................................................1
1.1 Defined Terms............................................................1
1.2 Interpretation...........................................................11
ARTICLE 2 TRANSFER OF ASSETS AND ASSUMPTION OF LIABILITIES.........................11
2.1 Assets to be Acquired....................................................12
2.2 Excluded Assets..........................................................14
2.3 Liabilities to be Assumed by Buyer.......................................15
2.4 Excluded Liabilities.....................................................15
2.5 Changes in List of Assumed Contracts.....................................17
ARTICLE 3 CLOSING; PURCHASE PRICE..................................................17
3.1 Closing; Transfer of Possession; Certain Deliveries......................17
3.2 Deposit Escrow...........................................................18
3.3 Purchase Price...........................................................18
3.4 Purchase Price Adjustment................................................18
3.5 Allocation of Purchase Price.............................................20
3.6 Designation of Affiliates by Buyer.......................................20
3.7 Section 338(h)(10) Election..............................................20
3.8 Designation of Exchange Accommodation Titleholder........................20
ARTICLE 4 [REMOVED]................................................................21
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF SELLER.................................21
5.1 Due Organization.........................................................21
5.2 Authorization; Validity..................................................21
5.3 No Violation.............................................................22
5.4 Third Party Approvals....................................................22
5.5 Title to Assets; Sufficiency and Condition of Assets.....................22
5.6 Intellectual Property....................................................22
5.7 Compliance with Laws.....................................................23
5.8 Title to Property........................................................23
5.9 Brokers and Finders......................................................24
5.10 Taxes....................................................................24
5.11 Labor Matters; Employee Relations........................................24
5.12 ERISA Compliance; Absence of Changes in Benefits Plans...................24
5.13 Litigation...............................................................25
5.14 Customers and Suppliers..................................................25
5.15 Accounts Receivable......................................................25
5.16 Inventory................................................................26
5.17 Financial Statements and SEC Filings.....................................26
5.18 Contracts................................................................26
5.19 Permits..................................................................27
5.20 Environmental Matters....................................................27
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5.21 Capital Expenditures.....................................................27
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF BUYER..................................27
6.1 Due Organization.........................................................28
6.2 Authority; Validity......................................................28
6.3 No Violation.............................................................28
6.4 Third Party Approvals....................................................28
6.5 Brokers and Finders......................................................28
6.6 Compliance with Laws.....................................................29
6.7 Litigation...............................................................29
ARTICLE 7 COVENANTS OF THE PARTIES.................................................29
7.1 Conduct of Business Pending the Closing..................................29
7.2 Bankruptcy Court Order...................................................30
7.3 Notification of Certain Matters..........................................30
7.4 Access...................................................................30
7.5 Public Announcements.....................................................32
7.6 Cure of Defaults.........................................................32
7.7 ERISA and Employment Matters.............................................32
7.8 Further Agreements.......................................................32
7.9 Payment of Transfer Taxes and Tax Filings................................32
7.10 Utilities................................................................33
7.11 Proration of Taxes and Certain Charges...................................33
7.12 Regulatory Approvals; Reasonable Efforts; Notification; Consent..........34
7.13 [Removed]................................................................35
7.14 Rejected Contracts.......................................................35
7.15 Further Assurances.......................................................35
7.16 Union Negotiations.......................................................35
7.17 Closing Financial Certificate............................................35
7.18 Transition Services Agreement............................................36
7.19 Credit Support Arrangements..............................................36
ARTICLE 8 CONDITIONS TO OBLIGATIONS OF THE PARTIES.................................36
8.1 Conditions Precedent to Obligations of Buyer.............................36
8.2 Conditions Precedent to the Obligations of Sellers.......................39
ARTICLE 9 TERMINATION..............................................................40
9.1 Termination of Agreement.................................................40
9.2 Consequences of Termination..............................................40
ARTICLE 10 INDEMNIFICATION..........................................................41
10.1 Indemnification of Buyer.................................................41
10.2 Indemnification of Sellers...............................................41
10.3 Indemnification Procedures...............................................41
10.4 Survival of Representations and Warranties; Sellers' Liability...........43
10.5 Termination of Indemnification...........................................43
10.6 Limitations on Indemnification...........................................43
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ARTICLE 11 MISCELLANEOUS............................................................44
11.1 Expenses.................................................................44
11.2 Assignment...............................................................44
11.3 Parties in Interest......................................................44
11.4 Notices..................................................................44
11.5 Choice of Law............................................................46
11.6 Entire Agreement; Amendments and Waivers.................................46
11.7 Counterparts.............................................................46
11.8 Invalidity...............................................................46
11.9 Headings.................................................................46
11.10 Exclusive Jurisdiction...................................................46
11.11 WAIVER OF RIGHT TO TRIAL BY JURY.........................................47
11.12 Beneficiaries............................................................47
11.13 Counting.................................................................47
11.14 Preparation of this Agreement............................................47
Exhibit A Form of Assignment and Assumption Agreement
Exhibit B Deposit Escrow Agreement
Exhibit C Form of Headquarters Lease
Exhibit D Form of Trademark License Agreement
Exhibit E Form of ▇▇▇▇ of Sale
Exhibit F Bankruptcy Court Approval
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of April __, 2003 (the
"Agreement Date") by and among National Steel Corporation, a Delaware
corporation (the "Company"), the Subsidiaries of the Company set forth on the
signature pages hereto and in Schedule 1 (collectively with the Company, the
"Sellers" and each a "Seller") and United States Steel Corporation, a Delaware
corporation (together with any designated Subsidiaries, "Buyer").
WITNESSETH:
WHEREAS, Sellers are engaged in, among other things, the production,
transportation and sale of coke and steel products;
WHEREAS, Sellers each commenced a case (collectively, the "Chapter 11
Case") on March 6, 2002 under chapter 11 of title 11 of the United States
Code, 11 U.S.C. Sections 101 et seq. (the "Bankruptcy Code") in the United
States Bankruptcy Court for the Northern District of Illinois, Eastern
Division (the "Bankruptcy Court"); and
WHEREAS, Sellers wish to sell to Buyer the assets of the Business as
are specified herein, and Buyer wishes to purchase such assets and to assume
those liabilities relating to the Business as are specified herein, all in the
manner and subject to the terms and conditions set forth in this Agreement and
pursuant to, inter alia, Sections 363 and 365 of the Bankruptcy Code.
NOW, THEREFORE, in consideration of the premises, and the
representations, warranties, covenants and agreements contained herein, and
for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and intending to be legally bound hereby, the
parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Defined Terms. As used herein, the terms below shall have the
following respective meanings:
"Accounts Payable" shall mean those trade accounts payable of Sellers
relating to the Business or the Acquired Assets, incurred in bona fide
business transactions in the ordinary course of business after the
commencement of the Chapter 11 Case. Accounts Payable shall not include any
Cure Amounts or any Excluded Liabilities.
"Accounts Receivable" shall mean: (i) all of Sellers' trade accounts
receivable relating to the Business and other rights to payment from customers
of the Business and the full benefit of all security for such accounts or
rights to payment, including all trade accounts receivable representing
amounts receivable in respect of goods shipped or products sold or services
rendered to customers of the Business; (ii) all other accounts or notes
receivable of Sellers and the full benefit of all security for such accounts
or notes receivable arising in the conduct of the Business; and (iii) any
claim, remedy or other right related to any of the foregoing, in each case
existing on the Agreement Date or arising in the ordinary course of the
conduct of the Business after the Agreement Date and in each case that have
not been satisfied or discharged prior to the close of business on the
Business Day immediately preceding the Closing Date or have not been written
off or sent to collection prior to the close of business on the Business Day
immediately preceding the Closing Date (it being understood that the receipt
of a check prior to the close of business on the Business Day immediately
preceding the Closing Date shall constitute satisfaction or discharge of the
applicable account or note receivable to the extent of the payment represented
thereby).
"Acquired Assets" shall have the meaning specified in Section 2.1.
"Acquired Entities" shall have the meaning specified in Section
2.1(o).
"Acquired Facilities" shall mean the following plants and facilities
of Sellers: Great Lakes Plant; Midwest Plant; Granite City Plant; Seller
headquarters (Mishawaka, IN); ProCoil processing and distribution center
(Canton, MI); and National Steel Pellet Company (Mesabi Iron Range, MN).
"Acquired Real Property" shall mean collectively the Owned Real
Property and the Leased Real Property.
"Adjustment Payment Date" shall have the meaning specified in Section
3.4(f).
"Affiliate" shall mean, with respect to any Person, any other Person,
directly or indirectly, controlling or controlled by or under direct or
indirect common control with such Person, including any officer, director or
greater than 10% shareholder of such Person. For the purposes of this
definition, "control" when used with respect to any Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agreement" shall mean this Asset Purchase Agreement, together with
the Exhibits, Schedules and the Disclosure Schedule, in each case as amended,
restated, supplemented or otherwise modified from time to time.
"Agreement Date" shall have the meaning specified in the preamble.
"Allocation" shall have the meaning specified in Section 3.5.
"Antitrust Law" shall mean the ▇▇▇▇▇▇▇ Act, as amended, the ▇▇▇▇▇▇▇
Act, as amended, the HSR Act, the Federal Trade Commission Act, as amended,
and all other federal, state and foreign Laws or Orders that require
notification to a Governmental Entity of mergers and acquisitions or that are
designed or intended to prohibit, restrict or regulate mergers and
acquisitions and actions having the purpose or effect of monopolization or
restraint of trade.
"Assignment and Assumption Agreement" shall mean the assignment and
assumption agreement to be entered into by Sellers and Buyer concurrently with
the Closing, substantially in the form of Exhibit A.
"Assumed Contracts" shall have the meaning specified in Section
2.1(c).
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"Assumed Liabilities" shall have the meaning specified in Section
2.3.
"Bad Debts Reserve" shall mean the Company's provision for doubtful
accounts, determined in accordance with GAAP and the Company's accounting
policies, attached hereto as Schedule 1.1(a), consistently applied by the
Company.
"Bankruptcy Code" shall have the meaning specified in the recitals.
"Bankruptcy Court" shall have the meaning specified in the recitals.
"Bankruptcy Court Approval" shall have the meaning specified in
Section 8.1(d).
"Basket Amount" shall have the meaning specified in Section 10.6(a).
"Benefits Plan" shall mean any employee welfare benefit plan (as
defined in Section 3(1) of ERISA) sponsored, maintained, contributed to or
required to be contributed to at any time by the Company or any of its
Subsidiaries for any of their respective present or former employees, retirees
or spouses, dependents or other beneficiaries of present or former employees
or retirees.
"Business" shall mean the production, sale and transportation of coke
and steel products carried on by Sellers, including the mining of ore and the
production of iron ore pellets at National Steel Pellet Company, but excluding
any other production of iron ore pellets and mining of ore and excluding the
mining of coal.
"Business Day" shall mean any day other than a Saturday, Sunday or a
legal holiday on which banking institutions in the State of New York are not
required to open.
"Buyer" shall have the meaning specified in the preamble.
"Buyer Material Adverse Effect" shall mean any state of facts,
events, changes or effects, that, individually or aggregated with other states
of facts, events, changes or effects, (a) is materially adverse to or
materially impairs the ability of Buyer to perform its obligations under this
Agreement, or (b) prevents or materially delays consummation of any of the
transactions contemplated by this Agreement.
"Cash Consideration" shall have the meaning specified in Section 3.3.
"Cash Discount Reserve" shall mean the Company's reserve for
discounts credited against Accounts Receivable paid in advance of their due
date, determined in accordance with GAAP and the Company's accounting
policies, attached hereto as Schedule 1.1(a), consistently applied by the
Company.
"Chapter 11 Case" shall have the meaning specified in the recitals.
"Claims Reserve" shall mean the Company's reserves, determined in
accordance with GAAP and the Company's accounting policies, attached hereto as
Schedule 1.1(a), consistently applied by the Company, to satisfy claims made
by customers with respect to products of the Company or any of its
Subsidiaries.
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"Closing" shall have the meaning specified in Section 3.1(a).
"Closing Date" shall have the meaning specified in Section 3.1(a).
"Closing Date Items" shall have the meaning specified in Section
3.4(c).
"Closing Financial Certificate" shall have the meaning specified in
Section 7.17.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Company" shall have the meaning specified in the preamble.
"Company Financial Statements" shall have the meaning specified in
Section 5.17(a).
"Company Reserves" shall mean, collectively, the Bad Debts Reserve,
the Cash Discount Reserve and the Claims Reserve.
"Company SEC Documents" shall have the meaning specified in Section
5.17(b).
"Confidentiality Agreement" shall mean that certain Confidentiality
Agreement dated as of September 14, 2001 between the Company and Buyer.
"Contract" shall mean any contract, lease, license, purchase order,
sales order or other agreement, practice, arrangement, understanding or
commitment, whether or not in written form, that is binding upon a Person or
its property.
"Cure Amounts" shall have the meaning specified in Section 2.4(n).
"Deposit Escrow" shall have the meaning specified in Section 3.2.
"Deposit Escrow Agreement" shall mean the Deposit Escrow Agreement of
even date herewith entered into by and among Buyer, the Company as the
representative of Sellers and the Escrow Agent substantially in the form of
Exhibit B.
"Disclosure Schedule" shall have the meaning specified in the first
paragraph of Article 5.
"Environmental Laws" shall mean all Laws relating to protection of
human health and the environment, including the Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C.ss.ss.9601 et. seq., the
Resource Conservation and Recovery Act, 42 U.S.C.ss.ss.6901 et. seq., the
Toxic Substances Control Act, 15 U.S.C.ss.ss.2601, et. seq., the Clean Water
Act, 33 U.S.C.ss.ss.1251 et. seq., the Oil Pollution Act, 33 U.S.C.ss.ss.2701
et. seq., the Clean Air Act, 42 U.S.C.ss.ss.7401 et. seq. and the Occupational
Safety and Health Act, 29 U.S.C.ss.ss.651 et. seq., and state and local
equivalents of all of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Agent" shall mean ▇.▇. ▇▇▇▇▇▇ Trust Company, N.A.
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"Estimated Inventory Value" shall mean the Inventory Value (excluding
the Inventory Value of the Inventory of National Steel Pellet Company)
determined as of the close of business on the last day of the month
immediately prior to the Closing Date.
"Estimated Net Receivables Amount" shall mean the aggregate amount of
Accounts Receivable (excluding the amount of Accounts Receivable of National
Steel Pellet Company) minus the aggregate amount of Accounts Payable
(excluding the amount of Accounts Payable of National Steel Pellet Company)
minus the Company Reserves (excluding the amount of Company Reserves related
to National Steel Pellet Company) calculated as of the close of business on
the last day of the month immediately prior to the Closing Date.
"Estimated Working Capital Adjustment" shall have the meaning
specified in Section 3.4(b).
"Estimated Working Capital Amount" shall have the meaning specified
in Section 3.4(b).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any successor federal statute, and the rules and regulations of
the SEC thereunder or under any successor federal statute.
"Excluded Assets" shall have the meaning specified in Section 2.2.
"Excluded Liabilities" shall have the meaning specified in Section
2.4.
"Final Order" shall mean an order or judgment of the Bankruptcy Court
(i) that is not the subject of a pending appeal, petition for certiorari,
motion for reconsideration or other proceeding for review, rehearing or
reargument, (ii) that has not been reversed, stayed, modified or amended, and
(iii) respecting which the time to appeal, to petition for certiorari, to move
for reconsideration or to seek review, rehearing or reargument shall have
expired, as a result of which such order shall have become final in accordance
with Rule 8002 of the Federal Rules of Bankruptcy Procedure and other
applicable Laws.
"Financing" shall mean the financing provided pursuant to any credit
agreement or other Contract evidencing indebtedness entered into by any Seller
after the commencement of the Chapter 11 Case.
"GAAP" shall mean generally accepted accounting principles as in
effect from time to time in the United States.
"Governmental Entity" shall mean any (i) federal, state, local,
municipal, foreign or other government; (ii) governmental or
quasi-governmental authority of any nature (including any governmental agency,
branch, department, official, or entity and any court or other tribunal); or
(iii) body exercising, or entitled to exercise, any administrative, executive,
judicial, legislative, police, regulatory, or taxing authority or power of any
nature, including any arbitration tribunal.
"Hazardous Substance" shall have the meaning specified in Section
5.20.
5
"Headquarters Lease" shall mean the lease for a portion of the
building located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, to be
entered into by and between Buyer and the Company concurrently with the
Closing, substantially in the form of Exhibit C.
"Hired Non-CB Employee" shall have the meaning specified in Section
7.7.
"HSR Act" shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act
of 1976, as amended, and any successor law and the rules and regulations
thereunder or under any successor law.
"Identified Employee" shall mean those Non-CB Employees identified by
Buyer prior to the Closing Date to whom Buyer shall offer employment effective
as of the Closing Date.
"Indemnified Party" shall have the meaning specified in Section
10.3(a).
"Indemnifying Party" shall have the meaning specified in Section
10.3(a).
"Indemnity Termination Date" shall have the meaning specified in
Section 10.5.
"Independent Accounting Firm" shall have the meaning specified in
Section 3.4(d).
"Intellectual Property" shall have the meaning specified in Section
2.1(k).
"Inventory" shall have the meaning specified in Section 2.1(e).
"Inventory Value" shall mean the value of all Inventory included in
the Acquired Assets determined in accordance with GAAP and the Company's
inventory policies, attached hereto as Schedule 1.1(a), consistently applied
by Sellers.
"Knowledge", with respect to Sellers or the Company and its
Subsidiaries, shall mean the knowledge of those individuals listed on Schedule
1.1(b) attached hereto, together with any other successor individuals who hold
the positions with the Company listed on Schedule 1.1(b), in each case,
including facts of which such individuals should be aware in the reasonably
prudent exercise of their duties.
"Law" shall mean any federal, state, provincial, local or foreign
statute, law, ordinance, regulation, rule, code, order, principle of common
law, judgment or decree enacted, promulgated, issued, enforced or entered by
any Governmental Entity, or court of competent jurisdiction, or other
requirement or rule of law.
"Leased Machinery and Equipment" shall have the meaning specified in
Section 2.1(b).
"Leased Real Property" shall have the meaning specified in Section
2.1(a).
"Letter of Agreement" shall have the meaning specified in Section
7.16.
"Liabilities" shall mean, as to any Person, all debts, adverse
claims, liabilities, commitments, responsibilities, and obligations of any
kind or nature whatsoever, direct or indirect, absolute or contingent,
including liabilities for compliance, investigation, remediation, removal and
response under Environmental Laws, of such Person, whether accrued, vested or
otherwise, whether known or unknown and whether or not actually reflected, or
required to be reflected, in such Person's balance sheet or other books and
records.
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"Lien" shall mean any claim, pledge, option, charge, hypothecation,
easement, security interest, right-of-way, encroachment, mortgage, deed of
trust, defect of title, restriction on transferability, restriction on use or
other encumbrance.
"Losses" shall have the meaning specified in Section 10.2.
"Machinery and Equipment" shall have the meaning specified in Section
2.1(b).
"Material Adverse Effect" shall mean any state of facts, events,
changes or effects that, individually or aggregated with other states of
facts, events, changes or effects, (a) is materially adverse to or materially
impairs, (i) the value, condition or use of the Acquired Assets taken as a
whole or the value or condition, financial or otherwise, of the Business taken
as a whole, other than (x) changes in economic or business conditions
generally or in the steel industry specifically (provided that the Business is
not materially disproportionately affected), (y) changes in laws and
regulations impacting the steel industry generally (except as otherwise
provided in Section 8.1(g)(i) hereof), or (z) changes or effects resulting
from the execution or announcement of this Agreement, provided, however, the
Company shall have the burden of proving that the execution or announcement of
the Agreement caused such changes or effects, or (ii) the ability of any party
hereto to perform its obligations under this Agreement, or (b) prevents or
materially delays consummation of any of the transactions contemplated by this
Agreement.
"Material Contract" shall mean any Contract with respect to the
Business to which the Company or any of its Subsidiaries is a party or by
which any of the Acquired Assets are bound and (i) which is outside of the
ordinary course of business; (ii) to which any Significant Customer is a
party; (iii) to which any Significant Supplier is a party; (iv) pursuant to
which the Sellers would be required to make payments in excess of $10 million
from and after the Agreement Date; (v) master agreements, blanket purchase
orders or other Contracts, which relate to the transportation or disposal of
Hazardous Substances, other than receipts, bills of lading, trip tickets and
purchase orders issued pursuant to such master agreements, purchase agreements
or other Contracts related to the transportation or disposal of Hazardous
Substances; (vi) which is an employment agreement or severance agreement or is
a collective bargaining agreement with any labor union; (vii) which creates a
joint venture or partnership or which otherwise involves the sharing of
profits, losses, costs or Liabilities with any other Person; (viii) which is a
lease for any real property or any material Machinery and Equipment used or
held for use in the Business; (ix) which is an Assumed Contract, other than an
Ordinary Course Contract; or (x) to which any officer or director of the
Company or any of its Subsidiaries, or any Affiliate of any such officer or
director is a party.
"Net Receivables Amount" shall have the meaning specified in Section
3.4(e).
"Non-CB Employees" shall mean employees of any Seller not represented
by a labor union for collective bargaining.
"Notices" shall have the meaning specified in Section 11.4.
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"Objection Notice" shall have the meaning specified in Section
3.4(d).
"Order" shall mean any judgment, order, injunction, writ, ruling,
decree, stipulation or award of any Governmental Entity or private arbitration
tribunal.
"Ordinary Course Contract" shall mean any Contract related to the
Business and the Acquired Assets entered into by any Seller after January 9,
2003 and prior to the Closing Date in the ordinary course of business, for the
provision of goods or services to or by any Seller in a bona fide business
transaction, and which (i) is for a term that does not exceed 12 months
following the Closing or that is terminable by such Seller, without Liability,
at will or upon advance notice not to exceed 30 days, and (ii) the performance
of which does not involve consideration in excess of (A) $1 million in any
twelve-month period following the Closing, (B) with the consent of Buyer,
which consent shall not be unreasonably withheld, $10 million in any
twelve-month period following the Closing, or (C) prevailing market terms,
solely with respect to purchases of goods on spot markets for a term not to
exceed 30 days; provided, however, in no event shall a Contract be deemed an
Ordinary Course Contract if (v) such Contract is a Material Contract, (w) such
Contract is with any current or former employee of the Company or any of its
Subsidiaries, (x) such Contract is with respect to any Financing, (y) the
counterparty to such Contract is also party to a Contract with a Seller
entered into prior to the commencement of the Chapter 11 Case as to which such
Seller has not satisfied all Liabilities thereunder, other than any such
Contract that is on prevailing market terms or (z) the execution, delivery and
performance of such Contract by any Seller would violate any provision of this
Agreement, including the covenants set forth in Section 7.1.
"Owned Machinery and Equipment" shall have the meaning specified in
Section 2.1(b).
"Owned Real Property" shall have the meaning specified in Section
2.1(a).
"Pension Plan" shall mean any employee benefit pension plan (as
defined in Section 3(2) of ERISA) sponsored, maintained, contributed to or
required to be contributed to at any time by the Company or any of its
Subsidiaries for any of their respective present or former employees or
retirees or spouses, dependents or other beneficiaries of present or former
employees or retirees.
"Permits" shall mean permits, licenses, registrations, certificates
of occupancy, approvals, consents, clearances and other authorizations issued
by any Governmental Entity.
"Permitted Liens" shall mean: (i) Liens for Taxes not yet due and
payable; (ii) easements, licenses or similar non-monetary liens or
non-monetary matters of record on Acquired Real Property or any zoning and
other restrictions imposed by a Governmental Entity that do not, individually
or in the aggregate, adversely impact the operation of the Business or the use
of the Acquired Assets; (iii) encumbrances arising under leases or subleases
of Acquired Real Property, which do not materially detract from the value of
such Acquired Real Property or interfere with the use of or conduct of
business on the Acquired Real Property; or (iv) such other Liens or title
exceptions as Buyer may approve in writing in its sole discretion.
"Person" shall mean an individual, a partnership, a joint venture, a
corporation, a business trust, a limited liability company, a trust, an
unincorporated organization, a joint stock company, a labor union, an estate,
a Governmental Entity or any other entity.
8
"Plans" shall mean all Benefits Plans and all Pension Plans and each
other plan, program, policy, practice or arrangement (written or oral, formal
or informal, whether done on an individual ad hoc basis or as part of a
consistent pattern or practice of providing benefits to similarly situated
individuals) relating to deferred compensation, bonus, performance
compensation, stock purchase, stock option, stock appreciation, severance,
vacation, sick leave, holiday pay, fringe benefits, personnel policy,
reimbursement program, incentive, insurance, welfare or similar plan, program,
policy, practice or arrangement, in each case sponsored, maintained or
contributed to, or required to be maintained or contributed to, by the Company
or any of its Subsidiaries or any other Person or entity that, together with
any of the Company or its Subsidiaries, is treated as a single employer within
the meaning of Section 4001 of ERISA for the benefit of any present or former
officer, employee or director, retiree or spouses, dependents or other
beneficiaries of any of the foregoing.
"Proceeding" shall mean any action, arbitration, audit, hearing,
investigation, litigation or suit (whether civil, criminal, administrative,
investigative, or informal), other than the Chapter 11 Case, commenced,
brought, conducted or heard by or before or otherwise involving, any
Governmental Entity or arbitrator.
"Purchase Price" shall have the meaning specified in Section 3.3.
"Railroad Assets" shall mean any Acquired Assets or any Subsidiaries
of the Company as to which a change of control is regulated by the Surface
Transportation Board.
"Release" shall have the meaning specified in Section 5.20.
"Representative" shall mean, with respect to any Person, such
Person's officers, directors, employees, agents, representatives and financing
sources (including any investment banker, financial advisor, accountant, legal
counsel, agent, representative or expert retained by or acting on behalf of
such Person or its Subsidiaries).
"SEC" shall mean the United States Securities and Exchange Commission
and any successor Governmental Entity.
"Securities Act" shall mean the Securities Act of 1933, as amended,
or any successor federal statute, and the rules and regulations of the SEC
thereunder, all as the same shall be in effect at the time. Reference to a
particular section of the Securities Act shall include reference to the
comparable section, if any, of such successor federal statute.
"Seller" shall have the meaning specified in the preamble.
"Seller Credit Support Arrangements" shall have the meaning specified
in Section 7.19.
"Seller Indemnitees" shall have the meaning specified in Section
10.2.
"Significant Customers" shall have the meaning specified in Section
5.14.
"Significant Suppliers" shall have the meaning specified in Section
5.14.
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"Statement" shall have the meaning specified in Section 3.4(c).
"Subsidiary" shall mean, with respect to any Person (a) a
corporation, a majority of whose capital stock with voting power, under
ordinary circumstances, to elect directors is at the time, directly or
indirectly, owned by such Person, by a subsidiary of such Person, or by such
Person and one or more subsidiaries of such Person, (b) a partnership in which
such Person or a subsidiary of such person is, at the date of determination, a
general partner of such partnership, or (c) any other Person (other than a
corporation) in which such Person, a subsidiary of such Person or such Person
and one or more subsidiaries of such Person, directly or indirectly, at the
date of determination thereof, has (i) at least a majority ownership interest
or (ii) the power to elect or direct the election of a majority of the
directors or other governing body of such Person.
"Supplies" shall have the meaning specified in Section 2.1(d).
"Surface Transportation Board" shall mean the Surface Transportation
Board established pursuant to the ICC Termination Act of 1995, as amended.
"Taxation," "Tax" or "Taxes" shall mean all forms of taxation,
assessment, levy, duty or other governmental charge imposed by any
Governmental Entity, including any income, alternative or add-on minimum,
accumulated earnings, personal holding company, franchise, capital stock,
environmental, profits, windfall profits, gross receipts, sales, use, value
added, transfer, registration, stamp, premium, excise, customs duties,
severance, real property, personal property, ad valorem, occupancy, license,
occupation, employment, payroll, social security, (including national
insurance contributions) disability, unemployment, withholding, corporation,
inheritance, value added, stamp duty reserve, estimated or other similar tax,
assessment, levy, duty (including duties of customs and excise) or other
governmental charge of any kind whatsoever, replaced by or replacing any of
them chargeable by any Taxation Authority together with all penalties,
interest and additions thereto, whether disputed or not.
"Tax Authority" or "Taxation Authority" shall mean any taxing or
other authority (whether within or outside the U.S.) competent to impose Tax.
"Tax Return" shall mean any and all returns, declarations, reports,
documents, claims for refund, or information returns, statements or filings
which are required to be supplied to any Tax Authority, including any schedule
or attachment thereto, and including any amendments thereof.
"Third Party Claim" shall have the meaning specified in Section
10.3(a).
"Trademark License Agreement" shall mean the Trademark License
Agreement to be entered into by and among Buyer and the Company concurrently
with the Closing, substantially in the form of Exhibit D.
"Trademarks" shall mean all trade names, logos, common law trademarks
and servicemarks and all registrations and applications therefor.
"Transition Services Agreement" shall have the meaning specified in
Section 7.18.
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"Transfer Tax" or "Transfer Taxes" shall mean any federal, state,
provincial, county, local, foreign and other sales, use, transfer, conveyance,
documentary transfer, recording or other similar Tax, fee or charge imposed
upon the sale, transfer or assignment of property or any interest therein or
the recording thereof, and any penalty, addition to Tax or interest with
respect thereto, but such term shall not include any Tax on, based upon or
measured by, the net income, gains or profits from such sale, transfer or
assignment of the property or any interest therein.
"WARN Act" shall mean the Worker Adjustment and Retraining
Notification Act of 1988, as amended, and any successor Law, and the rules and
regulations thereunder and under any successor Law.
"Working Capital Adjustment" shall have the meaning specified in
Section 3.4(e).
"Working Capital Amount" shall have the meaning specified in Section
3.4(e).
1.2 Interpretation.
(a) Whenever the words "include," "includes" or "including" are used
in this Agreement they shall be deemed to be followed by the words "without
limitation."
(b) Words denoting any gender shall include all genders. Where a word
or phrase is defined herein, each of its other grammatical forms shall have a
corresponding meaning.
(c) A reference to any party to this Agreement or any other agreement
or document shall include such party's successors and permitted assigns.
(d) A reference to any legislation or to any provision of any
legislation shall include any modification or re-enactment thereof, any
legislative provision substituted therefor and all regulations and statutory
instruments issued thereunder or pursuant thereto.
(e) All references to "$" and dollars shall be deemed to refer to
United States currency.
(f) All references to any financial or accounting terms shall be
defined in accordance with GAAP.
(g) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement, and Section, Schedule
and Exhibit references are to this Agreement unless otherwise specified.
(h) The meanings given to terms defined herein shall be equally
applicable to both singular and plural forms of such terms.
ARTICLE 2
TRANSFER OF ASSETS AND ASSUMPTION OF LIABILITIES
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2.1 Assets to be Acquired. At the Closing, and upon the terms and
conditions set forth herein and subject to the approval of the Bankruptcy
Court pursuant to Sections 105, 363 and 365 of the Bankruptcy Code, Sellers
shall sell, convey, assign, transfer and deliver to Buyer, and Buyer shall
purchase, acquire and accept, all of the right, title and interest, free and
clear of all Liens (other than Liens included in the Assumed Liabilities and
Permitted Liens), of Sellers in each and all of the Acquired Assets. "Acquired
Assets" shall mean all properties, assets and rights, except as set forth
herein, of every nature, tangible and intangible, of Sellers used, or held for
use, in the Business, real or personal, now existing or hereafter acquired,
whether or not reflected on the books or financial statements of the Sellers
as the same shall exist on the Closing Date, including the following assets:
(a) all right, title and interest of Sellers in the real property set
forth on Schedule 2.1(a)-1, together with all buildings, structures, fixtures,
and improvements erected thereon, and all rights, privileges, easements,
licenses, hereditaments and other appurtenances relating thereto (the "Owned
Real Property"), and all right, title and interest of Sellers in the real
property set forth on Schedule 2.1(a)-2, together with all buildings,
structures, fixtures, and improvements erected thereon, and all rights,
privileges, easements, licenses, hereditaments and other appurtenances
relating thereto (the "Leased Real Property"); provided, however, that the
Acquired Assets shall not include any of the real property set forth on
Schedule 2.2(i) or any other real property that is not identified on Schedule
2.1(a)-1 or Schedule 2.1(a)-2;
(b) all (i) Sellers' owned equipment, machinery, furniture, fixtures
and improvements and tooling used or held for use in the Business (the "Owned
Machinery and Equipment"), (ii) rights of Sellers to the equipment, machinery,
furniture, fixtures and improvements and tooling used or held for use in the
Business, which are leased pursuant to an Assumed Contract (the "Leased
Machinery and Equipment" and collectively with the Owned Machinery and
Equipment, the "Machinery and Equipment"), and (iii) rights of Sellers to the
warranties, express or implied, and licenses received from manufacturers and
sellers of the Machinery and Equipment;
(c) those leases (including leases and subleases of Acquired Real
Property and of Machinery and Equipment) and other Contracts (together with
all of Seller's deposits thereunder) entered into by any Seller that are
executory and unexpired as of the Closing Date and are set forth on Schedule
2.1(c), any other Contract added to the list of Assumed Contracts in
accordance with Section 2.5, and the Ordinary Course Contracts (collectively,
the "Assumed Contracts");
(d) all supplies, items, spare parts and other materials utilized to
operate and maintain the Machinery and Equipment or to process raw materials
and work in process used or held for use in the Business (the "Supplies");
(e) all inventories of raw materials, slabs, works in process,
finished products, goods, spare parts, replacement and component parts, and
office and other supplies used or held for use in the Business (the
"Inventory");
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(f) all cars, trucks, fork lifts, other industrial vehicles and other
motor vehicles owned by the Sellers and used or held for use in the Business
or leased by the Sellers where the lease for such vehicle is an Assumed
Contract;
(g) all railroad cars, railroad switching, service and repair
facilities, rolling stock and vehicles, machinery and related equipment used
or held for use in the Business;
(h) all Accounts Receivable;
(i) all Permits used in or necessary to conduct the Business or
applicable to the Acquired Assets and all pending applications therefor,
including those Permits set forth on Schedule 2.1(i);
(j) copies or originals of all books, records, files or papers,
whether in hard copy or electronic format, used in the Business or in respect
of the Acquired Assets, including engineering information, test results,
training manuals, sales and promotional literature, plans, processes, sales
and purchase correspondence, personnel and employment records (other than
records with respect to former employees or employees who do not become
employees of Buyer as of the Closing Date), customer lists, vendor lists,
catalogs, research material, technical information, diagrams, drawings,
quality control data, maintenance schedules, operating and production records,
safety and environmental reports, data, studies and documents, fixed asset
ledgers, Tax Returns regarding real property, personal property and ad valorem
taxes with respect to the Acquired Assets, including any exemption or
abatement agreements or certifications and supporting documentation for such
Tax Returns, including any such items classified as privileged, confidential
or proprietary material, and any right and interest any Seller may have to
possession or control of the knowledge of, any such material by, and related
expertise of, any employee, agent, contractor or supplier of any Seller;
(k) all right, title or interest in or to any computer software
(including process control software), source code and object code, and all
documentation related thereto, and any patents, patent registrations, patent
applications, Trademarks (other than the Trademarks set forth on Schedule
2.2(k)), copyrights, copyright applications, copyright registrations,
know-how, processes, trade secrets, proprietary data, formulae, and other
intangible property used or held for use in the Business (collectively, the
"Intellectual Property"), including those listed on Schedule 2.1(k); and all
rights thereunder or in respect thereof, including rights to ▇▇▇ and collect
and remedies against past, present and future infringements or
misappropriations thereof, and rights of priority and protection of interests
therein under the laws of any jurisdiction worldwide and all tangible
embodiments thereof used or held for use in the Business; provided, however,
with respect to any Intellectual Property not set forth on Schedule 2.1(k)(i),
to the extent Sellers have not obtained the necessary consents to assign any
such Intellectual Property to Buyer on or before the Closing Date, then
notwithstanding anything to the contrary contained herein, until such consents
are obtained, this Agreement shall not constitute an agreement to assign such
Intellectual Property, and Sellers shall (A) use all commercially reasonable
efforts to obtain such consents and (B) enter into any reasonable arrangement
designed to provide Buyer with the benefits of, and cause Buyer to bear the
costs and obligations of, Sellers' ownership of such Intellectual Property;
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(l) all goodwill associated with the Business or the Acquired Assets;
(m) all credits and allowances for air and water emissions and water
intakes Sellers have, are entitled to or have applied for, with respect to the
Acquired Facilities, including any air emissions for which Sellers have credit
or which Sellers have banked, applied to bank or agreed to sell or trade;
(n) all prepaid expenses and deposits of Sellers made in connection
with the Business, including those set forth on Schedule 2.1(n); and
(o) all of any Seller's equity interest in Double G Coatings, L.P.,
Double G Coatings, Inc., Delray Connecting Railroad Company and Steel Health
Resources LLC (collectively, the "Acquired Entities").
EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS
AGREEMENT, (i) THE ACQUIRED ASSETS ARE BEING SOLD ON AN "AS IS", "WHERE IS"
BASIS AND (ii) NO SELLER MAKES ANY OTHER WARRANTIES, INCLUDING
MERCHANTABILITY, FITNESS OR OTHERWISE WITH RESPECT TO THE ACQUIRED ASSETS.
2.2 Excluded Assets. The Acquired Assets do not include Sellers'
right, title or interest in or to any of the following properties and assets
of Sellers (collectively, the "Excluded Assets"):
(a) cash (including checks received prior to the close of business on
the Closing Date, whether or not deposited or cleared prior to the close of
business on the Closing Date), commercial paper, marketable securities,
certificates of deposit and other bank deposits, treasury bills and other cash
equivalents;
(b) shares of capital stock of any Seller or securities convertible
into, exchangeable or exercisable for shares of capital stock of any Seller;
(c) any Contract that is not an Assumed Contract;
(d) any assets of any Plan, including any plan or arrangement
providing pension benefits or post-retirement health or medical benefits to
any present or former employee of the Company or any of its Subsidiaries and
any rights under any such Plan or any Contract between any employee or
consultant and the Company or any of its Affiliates;
(e) all avoidance actions or similar causes of action, arising under
Sections 544 through 553 of the Bankruptcy Code, other than any such actions
related to any Assumed Contract;
(f) all rights to or claims for refunds, overpayments or rebates of
Taxes for periods ending on or prior to the Closing Date;
(g) all claims that Sellers may have against any third Person with
respect to any other Excluded Assets;
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(h) all rights of Sellers under any collective bargaining agreement,
agreement with any labor union, employment agreement or severance agreement;
(i) all real property that is set forth on Schedule 2.2(i) and any
other real property that is not set forth on Schedule 2.1(a)-1 or Schedule
2.1(a)-2;
(j) the company seal, minute books, charter documents, stock or
equity record books and such other books and records as pertain to the
organization, existence or capitalization of Sellers; and
(k) the properties and assets set forth in Schedule 2.2(k).
2.3 Liabilities to be Assumed by Buyer. At the Closing, Buyer will
assume only the following obligations of Sellers (the "Assumed Liabilities")
and no others: (i) the Accounts Payable; (ii) all Liabilities of Sellers under
the Assumed Contracts; provided, however, Buyer shall not assume or agree to
pay, discharge or perform any Liabilities arising out of any breach by Sellers
of any provision of any Assumed Contract, including Liability for breach,
misfeasance or under any other theory relating to Sellers' conduct prior to
the Closing; and (iii) those Liabilities listed on Schedule 2.3.
2.4 Excluded Liabilities. Other than the Assumed Liabilities, Buyer
shall not and does not assume any other Liability whatsoever (including
Liabilities relating to the conduct of the Business or to the Acquired Assets
(and the use thereof) at any time on or prior to the Closing Date), whether
relating to or arising out of the Business or Acquired Assets or otherwise,
fixed or contingent, disclosed (whether on the Disclosure Schedule or
otherwise), or undisclosed (collectively, the "Excluded Liabilities"). Without
limiting the foregoing, Buyer shall not and does not assume any of the
following (each of which shall be included within the definition of "Excluded
Liability"):
(a) all Liabilities relating to or arising, whether before, on or
after the Closing, out of, or in connection with, any of the Excluded Assets;
(b) all Liabilities, other than the Accounts Payable, that arise
(whether under the Assumed Contracts or otherwise) with respect to the
Acquired Assets or the use thereof on or prior to the Closing Date or relate
to periods ending on or prior to the Closing Date or are to be observed, paid,
discharged or performed on or prior to the Closing Date (in each case,
including any Liabilities that result from, relate to or arise out of tort or
other product liability claim);
(c) litigation and related claims and Liabilities or any other claims
against the Company or any of its Subsidiaries of any kind or nature
whatsoever, other than Accounts Payable, involving or relating to facts,
events or circumstances arising or occurring on or prior to the Closing Date,
no matter when raised (including Liability for breach, misfeasance or under
any other theory relating to the Company's or any such Subsidiary's conduct,
performance or non-performance);
(d) all Liabilities relating to any Contract between any employee or
consultant and the Company or any of its Subsidiaries;
15
(e) all Liabilities relating to any environmental, health or safety
matter (including any Liability or obligation arising under any Environmental
Law) arising out of or relating to the Company's or any of its Subsidiary's
operation of their respective businesses or their leasing, ownership or
operation of real property;
(f) all Liabilities for damages to persons or property arising out of
alleged defects in products sold by the Company or any of its Subsidiaries, or
arising under warranties, express or implied, issued by the Company or any of
its Subsidiaries;
(g) all Liabilities in excess of the Claims Reserve to repair or
replace, or to refund the sale price (plus related expenses) of, products sold
and delivered by the Company or any of its Subsidiaries prior to the Closing
Date;
(h) all Liabilities of the Company or any of its Subsidiaries under
any collective bargaining agreement, agreement with any labor union,
employment agreement or severance agreement;
(i) all Liabilities of the Company or any of its Subsidiaries, or of
any trust or other entity established to provide employee benefits, to their
present or former employees, retirees or spouses, dependents or other
beneficiaries of present or former employees or retirees, including all
Liabilities attributable to, incurred in connection with, arising from or
relating to, any Plan, whether formal or informal and whether legally binding
or not;
(j) all Liabilities of the Company or any of its Subsidiaries
attributable to, incurred in connection with, arising from, or relating to, a
violation of any Laws governing employee relations, including
anti-discrimination Laws, wage and hour Laws, labor relations Laws and
occupational safety and health Laws;
(k) all Liabilities related to (i) the termination of employment of
any employees of Sellers, including employees of Sellers who become employees
of Buyer, including all Liabilities arising under the WARN Act, and (ii)
earned but unpaid salary, bonuses, accrued but unpaid vacation days, accrued
but unpaid medical and dental expenses, accrued and unpaid other forms of
compensation and all other accrued welfare benefits of all employees of the
Company or any of its Subsidiaries, including employees of Seller who become
employees of Buyer and, whether or not accrued, any obligations under Section
4980B of the Code to provide continuation of group medical coverage with
respect to any such employee or other qualified beneficiary;
(l) except as set forth in Section 7.9, all Liabilities for any and
all Transfer Taxes due as a result of the transactions contemplated by this
Agreement;
(m) except as set forth in Section 7.9, all Liabilities for any and
all Taxes due or payable by the Company or any of its Subsidiaries for any
period ending on or before the Closing Date or as a result of the operation of
the Business or the ownership of the Acquired Assets on or before the Closing
Date, without regard to whether such taxes are within the scope of the
representation set forth in Section 5.10 hereof;
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(n) all amounts payable pursuant to Section 365(b)(1)(A) or (B) of
the Bankruptcy Code in order to effectuate, pursuant to the Bankruptcy Code,
the assumption by Sellers and assignment by Buyer of Assumed Contracts under
the Bankruptcy Court Approval (the "Cure Amounts"), other than as specifically
set forth herein;
(o) other than Accounts Payable, all notes, bonds or other evidences
of indebtedness, including any of the foregoing entered into with respect to
any of the Acquired Facilities; and
(p) all Liabilities for fraud, breach, misfeasance or under any other
theory relating to conduct, performance or non-performance of the Company or
any of its Subsidiaries.
2.5 Changes in List of Assumed Contracts. From time to time after the
date hereof and prior to the Closing, (i) Buyer may remove Contracts, other
than Ordinary Course Contracts, from the list of Assumed Contracts, (ii) Buyer
and the Company, by mutual agreement, may add Contracts to the list of Assumed
Contracts, and (iii) Buyer, in its sole discretion, may add to the list of
Assumed Contracts any material Contract the existence and terms of which were
not disclosed to Buyer in reasonable detail prior to the Agreement Date. If
any Contract is added to the list of Assumed Contracts, Sellers shall take
such steps as are necessary, including payment of all Cure Amounts, to cause
such Contract to be assumed by, and assigned to, Buyer.
ARTICLE 3
CLOSING; PURCHASE PRICE
3.1 Closing; Transfer of Possession; Certain Deliveries.
(a) The consummation of the transactions contemplated herein (the
"Closing") shall take place on the second Business Day after the satisfaction
of all of the conditions set forth in Article 8 (or the waiver thereof by the
party entitled to waive that condition) or on such other date as the parties
hereto shall mutually agree. The Closing shall be held at the offices of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois), at 10:00 a.m., local time,
unless the parties hereto otherwise agree. The actual date of the Closing is
herein called the "Closing Date." For purposes of this Agreement, from and
after the Closing, the Closing shall be deemed to have occurred at 12:01 A.M.
on the Closing Date.
(b) At the Closing, Sellers shall deliver to Buyer:
(i) duly executed bills of sale, substantially in the form of Exhibit
E attached hereto, transferring the Acquired Assets to Buyer;
(ii) duly executed real property special warranty (or the equivalent)
deeds in recordable form, in form and substance acceptable to Buyer, to effect
the sale, transfer, assignment and delivery of the Acquired Real Property;
(iii) the Assignment and Assumption Agreement, duly executed by
Sellers;
17
(iv) all other instruments of conveyance and transfer, in form and
substance reasonably acceptable to Buyer, as are necessary to convey the
Acquired Assets to Buyer; and
(v) all other previously undelivered certificates, agreements and
other documents required to be delivered by Sellers at or prior to the Closing
in connection with the transactions contemplated by this Agreement.
(c) At the Closing, Buyer shall deliver:
(i) to Sellers, the Purchase Price in accordance with the provisions
of Section 3.3;
(ii) the Assignment and Assumption Agreement, duly executed by Buyer;
and
(iii) all other previously undelivered certificates, agreements and
other documents required to be delivered by Buyer at or prior to the Closing
in connection with the transactions contemplated by this Agreement.
3.2 Deposit Escrow. On January 9, 2003, Buyer and Sellers executed
the Deposit Escrow Agreement and deposited with the Escrow Agent $6.5 million
(the "Deposit Escrow"). The Deposit Escrow shall be held and disbursed
pursuant to the terms of the Deposit Escrow Agreement and this Agreement.
3.3 Purchase Price. In consideration of the Acquired Assets, and
subject to the terms and conditions of this Agreement, Buyer shall assume the
Assumed Liabilities as provided in Section 2.3 and at the Closing shall pay to
Sellers an aggregate purchase price (together with the amount of the Indemnity
Escrow, the "Purchase Price") of $1,050 million comprised of: (a) the Deposit
Escrow, which shall be transferred directly to Sellers by the Escrow Agent;
(b) subject to Section 3.4(a) and Section 3.4(b), $843.5 million in
immediately available funds, by wire transfer to an account or accounts
designated by Sellers (together with the Deposit Escrow, the "Cash
Consideration"); and (c) $200 million by assumption of the Assumed
Liabilities. Each Seller shall receive that portion of the Cash Consideration
set forth opposite such Seller's name on Schedule 3.3 hereof.
3.4 Purchase Price Adjustment.
(a) The Purchase Price shall be increased for lease payments made by
Sellers pursuant to those Assumed Contracts set forth on Schedule 3.4(a) in
respect of lease payments due and payable on or after January 1, 2003, as
follows: (i) the Cash Consideration shall be increased by $1.00 for each $1.00
of lease payments set forth on Schedule 3.4(a) made by Seller, not to exceed
$2 million in the aggregate; and (ii) with respect to lease payments in excess
of $2 million in the aggregate, the Cash Consideration shall be increased by
$0.75 for each $1.00 of lease payments set forth on Schedule 3.4(a) made by
Seller.
(b) The Purchase Price may be reduced at the Closing, at Buyer's
election, on the basis of the Estimated Net Receivables Amount and the
Estimated Inventory Value set forth on the Closing Financial Certificate
delivered by the Company pursuant to Section 7.17. If the Estimated Net
Receivables Amount plus the Estimated Inventory Value (the "Estimated Working
Capital Amount") is less than $450 million, then Buyer may, at Buyer's
election, reduce the Cash Consideration to be paid to Sellers at the Closing
by the amount of such shortfall (the "Estimated Working Capital Adjustment").
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(c) The Purchase Price shall be adjusted pursuant to subsection (e)
of this Section 3.4 after the Closing. Within sixty (60) days following the
Closing Date, Buyer shall prepare and deliver to the Company a Notice (the
"Statement") setting forth the Net Receivables Amount and the Inventory Value
(together, the "Closing Date Items"), as of the close of business on the
Closing Date. The Closing Date Items shall be determined in accordance with
GAAP and the same accounting principles, procedures and methods that were used
to prepare the Company Financial Statements. After the Closing Date, at
Buyer's request, the Company and each of the other Sellers shall assist Buyer
and its Representatives in the preparation of the Statement and shall provide
Buyer and its Representatives any information reasonably requested and shall
further provide them with access at all reasonable times during regular
business hours and upon reasonable notice to personnel, books and records of
the Company and each of the other Sellers for such purpose.
(d) Unless the Company notifies Buyer in writing within 30 days after
Buyer's delivery of the Statement of any objection to any component of the
computation of the Closing Items set forth therein (the "Objection Notice"),
such computation shall be final and binding. The Objection Notice shall
specify the amount of and the basis for the objections set forth therein. The
Objection Notice shall include only objections based on (i) mathematical
errors in computation of the Closing Date Items, or (ii) Closing Date Items
not having been prepared in accordance with GAAP or the same accounting
principles, procedures and methods that were used to prepare the Company
Financial Statements. If Buyer and the Company cannot resolve any such
objections, then such objections shall be resolved by an independent
nationally recognized accounting firm reasonably acceptable to Buyer and the
Company (the "Independent Accounting Firm"). The determination of the
Independent Accounting Firm shall be made as promptly as practicable, and in
no event later than 75 days after delivery of the Statement, and shall be
final and binding on the parties, absent manifest error, which error may only
be corrected by such Independent Accounting Firm. The fees and expenses of the
Independent Accounting Firm shall be paid one-half by Buyer and one-half by
the Company.
(e) If the aggregate amount of Accounts Receivable included in the
Acquired Assets (excluding the amount of Accounts Receivable of National Steel
Pellet Company included in the Acquired Assets) minus (i) the aggregate amount
of Accounts Payable included in the Assumed Liabilities (excluding the amount
of Accounts Payable of National Steel Pellet Company included in the Assumed
Liabilities) and (ii) the Company Reserves (excluding the amount of Company
Reserves related to National Steel Pellet Company) (the "Net Receivables
Amount"), plus the Inventory Value (excluding the Inventory Value of the
Inventory of National Steel Pellet Company included in the Acquired Assets)
(the "Working Capital Amount") is less than $450 million then the Purchase
Price shall be decreased by the amount of the shortfall (the "Working Capital
Adjustment"). Any Working Capital Adjustment resulting from this Section
3.4(e) shall be offset by any reduction to the Purchase Price made at the
Closing based on the Estimated Working Capital Adjustment.
19
(f) The amount of the Working Capital Adjustment shall be paid on the
Adjustment Payment Date. The "Adjustment Payment Date" shall be the date that
is 35 days after the delivery of the Statement; provided, however, if Sellers
dispute the Statement, the Adjustment Payment Date shall be the date that is
15 days after the final determination of the Closing Date Items in accordance
with the provisions of Section 3.4(d).
3.5 Allocation of Purchase Price. Buyer and each Seller shall agree
upon an allocation of the Purchase Price and the Assumed Liabilities among the
Acquired Assets (the "Allocation") for all income Tax purposes. The Allocation
shall be consistent with the Code and based on an initial proposal by Buyer.
Sellers will have the right to raise reasonable objections to the Allocation
within 15 days after Buyer's delivery thereof, in which event Buyer and
Sellers will negotiate in good faith to resolve such dispute. If Buyer and
Sellers cannot resolve such dispute within 15 days after Sellers notify Buyer
of such objections, such dispute with respect to the Allocation shall be
presented to the Independent Accounting Firm, which shall, within 30 days
thereafter, render a decision, which shall be final and binding upon each of
the parties. The fees, costs and expenses incurred in connection therewith
shall be shared in equal amounts by Buyer and Sellers. Buyer and Sellers each
shall report and file all Tax Returns (including amended Tax Returns and
claims for refunds) consistent with the Allocation, and shall take no position
contrary thereto or inconsistent therewith (including in any audits or
examinations by any Tax Authority or any other Proceedings). Buyer and Sellers
shall cooperate in the preparation of, and shall timely file, any forms
(including Form 8594) with respect to the Allocation, including any amendments
to such forms required with respect to any adjustment to the Purchase Price,
pursuant to this Agreement. Notwithstanding any other provisions of this
Agreement, the foregoing agreement shall survive the Closing Date without
limitation.
3.6 Designation of Affiliates by Buyer. Prior to the Closing, Buyer
may designate one or more of its Subsidiaries to acquire at the Closing all or
part of the Acquired Assets, in which event all references to "Buyer" shall be
deemed to refer to each such Subsidiary with respect to the Acquired Assets to
be acquired by such Subsidiary; provided, however, that no designation
otherwise permitted by this Section 3.6 shall relieve Buyer from any of its
liabilities or obligations hereunder.
3.7 Section 338(h)(10) Election. Sellers shall cooperate with Buyer's
request to make an election under Section 338(h)(10) of the Code to treat the
purchase and sale of any Seller's equity interest in any of the Acquired
Entities as a purchase and sale of the assets of the entity, to the extent
permitted by the Code.
3.8 Designation of Exchange Accommodation Titleholder. Prior to
Closing, Buyer may designate one or more Persons as a "qualified intermediary"
within the meaning of Internal Revenue Service Regulation "1.1031(k)-1(g)(4),
or an "exchange accommodation titleholder" within the meaning of Internal
Revenue Service Revenue Procedure 2000-37, 2000-2 CB 308, to acquire at the
Closing all or part of Buyer's rights to this Agreement or the Acquired Assets
in order to effectuate a like-kind exchange under Section 1031 of the Code.
Buyer's Liabilities under this Agreement shall be no greater, and no less,
than such Liabilities would have been had the Buyer or its Subsidiaries
directly acquired the Acquired Assets.
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ARTICLE 4
[REMOVED]
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SELLER
In connection with the following representations and warranties,
attached to this Agreement is a disclosure schedule (the "Disclosure
Schedule") arranged in numbered parts corresponding to the Section numbering
in this Agreement of the following representations and warranties. The
information disclosed in any numbered part of the Disclosure Schedule shall be
deemed to relate to and to qualify only the particular representation or
warranty set forth in the corresponding numbered Section in this Agreement and
shall not be deemed to relate to or qualify any other representation or
warranty unless so stated otherwise, specifying each other representation and
warranty to which it relates. No reference to or disclosure of any item in the
Disclosure Schedule shall be construed as an admission or indication that such
item or other matter is material or that such item or other matter is required
to be referred to or disclosed in the Disclosure Schedule. Sellers jointly and
severally hereby represent and warrant to Buyer that, as of the Agreement Date
and as of the Closing Date (except with respect to representations and
warranties made as of a particular date, which shall be deemed to be made only
as of such date), except as set forth on the Disclosure Schedule:
5.1 Due Organization. Each Seller is a corporation, limited liability
company or partnership, duly organized under the laws of its jurisdiction of
incorporation or formation, with full power and authority to conduct its
business as presently conducted, to own or use its properties and assets and
to perform all of its obligations under all Assumed Contracts. Each Seller is
duly qualified to do business and in good standing under the Laws of each
jurisdiction in which either the ownership or use of the properties owned or
used by it, or the nature of the activities conducted by it, requires such
qualification, except where the failure to be so qualified and in good
standing would not reasonably be expected to have a Material Adverse Effect.
Schedule 5.1 of the Disclosure Schedule lists the form of organization, the
jurisdiction of incorporation or formation, and the holders of the outstanding
capital stock or other equity interests of each Seller and the Acquired
Entities.
5.2 Authorization; Validity. Each Seller has the requisite power and
authority to execute and deliver this Agreement and the other documents and
instruments to be executed and delivered by it pursuant hereto and to perform
its obligations hereunder and thereunder. The execution and delivery of this
Agreement by each Seller and the other agreements to be executed and delivered
by such Seller pursuant hereto, and the performance by such Seller of its
obligations hereunder, including the consummation of the transactions
contemplated hereby, have been duly authorized by all necessary corporate
action on the part of each Seller, including by any action or required
approval of the equityholder or equityholders of each Seller. This Agreement
has been duly and validly executed and delivered by each Seller and (assuming
this Agreement constitutes a valid and binding obligation of Buyer and each of
the other agreements to be executed and delivered by parties pursuant hereto
other than Sellers constitute a valid and binding obligation of such other
parties and subject to Bankruptcy Court Approval) constitutes, and each of the
other agreements to be executed and delivered by each Seller pursuant hereto
upon such Seller's execution and delivery will constitute, valid and legally
binding obligations of such Seller enforceable against such Seller in
accordance with its respective terms.
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5.3 No Violation. Subject to receipt and maintenance of the Orders,
consents, approvals, waivers and authorizations referred to in Section 5.4 and
the Bankruptcy Court Approval, the execution, delivery and performance by each
Seller of this Agreement and the transactions contemplated hereby, do not and
will not: (a) conflict with or result in, with or without the giving of notice
or lapse of time or both, any violation of or constitute a breach or default,
or give rise to any right of acceleration, payment, amendment, cancellation or
termination, under (i) the certificate of incorporation, bylaws or other
formation documents of such Seller, (ii) any mortgage, indenture, lease,
Contract, or other agreement to which any Seller is a party or by which any of
any Seller's assets or properties are subject, including any Assumed Contract,
or (iii) any Law or Order pertaining to the Business, the Acquired Assets or
to which any Seller is otherwise subject, except in the cases of clauses (ii)
and (iii) where such conflict, violation, breach, default or right would not
reasonably be expected to have a Material Adverse Effect; or (b) result in the
creation of any Lien (other than Liens included in the Assumed Liabilities and
Permitted Liens) upon any of the Acquired Assets.
5.4 Third Party Approvals. Schedule 5.4 of the Disclosure Schedule
sets forth a true and complete list of each Order, consent, approval, waiver
or authorization of any Governmental Entity and each material consent,
approval, waiver or authorization of any other Person that is required in
connection with the execution, delivery and performance by Sellers of this
Agreement and the other documents and instruments to be executed and delivered
by Sellers pursuant hereto and the transactions contemplated hereby and
thereby other than (a) Orders, consents, approvals, waivers or authorizations
of, or declarations or filings with, the Bankruptcy Court, (b) filings
pursuant to the HSR Act, and (c) approvals required by the Surface
Transportation Board in connection with the sale of the Railroad Assets.
5.5 Title to Assets; Sufficiency and Condition of Assets. All of each
Seller's right, title and interest in and to the Acquired Assets (or in the
case of any leased or licensed Acquired Assets, each Seller's rights under
such leases or licenses) shall be transferred to Buyer at Closing, free and
clear of all Liens (other than Liens included in the Assumed Liabilities and
Permitted Liens). At Closing, Sellers will have good and marketable title to
each of the Acquired Assets, except for those Acquired Assets leased by
Sellers, as to which Sellers will have valid leasehold interests. The Acquired
Assets constitute all of the properties, assets and rights used by the Sellers
or necessary or useful for Buyer to conduct and operate the Business as
conducted and operated by Sellers. All of the Acquired Assets are in good
order and repair for assets of comparable age and past use and are capable of
being used in the ordinary course of business in the manner necessary to
operate the Business, except where the failure to be in such condition would
not, individually or in the aggregate, have a Material Adverse Effect. The
condition of each Acquired Asset that is leased pursuant to an Assumed
Contract is in compliance with the provisions of such Assumed Contract.
5.6 Intellectual Property.
(a) Schedule 5.6(a) of the Disclosure Schedule sets forth a true and
complete list of all material Intellectual Property used or held for use in
the Business and all jurisdictions where such Intellectual Property is
registered or protected or where applications have been filed, together with
all patent, registration and application numbers. Sellers own and have the
right to use, or, in the case of licensed rights, have valid rights to use,
such Intellectual Property, free and clear of all Liens (other than Permitted
Liens).
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(b) Schedule 5.6(b) of the Disclosure Schedule sets forth a true and
complete list of all material licenses, sublicenses and other agreements
pursuant to which (i) any Seller has authorized any other Person to use
Intellectual Property, or (ii) any Person has authorized any Seller to use any
Intellectual Property.
(c) To the Knowledge of Sellers, the Intellectual Property does not
infringe upon, violate or misappropriate the rights of any Person.
Consummation of the transactions contemplated hereby will not result in the
loss or impairment of any of the material Intellectual Property or any
material right pertaining thereto. Sellers have taken reasonable precautions
and security measures to protect the secrecy, confidentiality and value of the
trade secrets of the Business. As of the Agreement Date, no Seller has
Knowledge of any infringement or unauthorized use by any Person of any
material Intellectual Property.
5.7 Compliance with Laws. Except with respect to those matters
covered by Section 5.11 and Environmental Laws (which are covered by Section
5.20), (i) each Seller is in compliance with all applicable Laws, except where
the failure to be in compliance would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, and (ii) as of the
Agreement Date, no Seller has received any notice of any alleged violation of
any Law applicable to it. No Seller is in default in any material respect of
any Order applicable to the Acquired Assets or the transactions contemplated
under this Agreement. No investigations, inquiries or reviews by any
Governmental Entity with respect to the Business have been commenced, nor to
the Knowledge of any Seller, are any contemplated that would impose any
material Liability on Buyer or, from and after the Closing Date, the Acquired
Assets or the Business.
5.8 Title to Property.
(a) Schedule 5.8(a) identifies all of the real property owned or
leased by the Company or any of its Subsidiaries and used or held for use in
the Business.
(b) Neither the Company nor any of its Subsidiaries has received any
written notice of, or has Knowledge of, condemnation or eminent domain
proceedings pending or threatened that affect the Acquired Real Property.
Neither the Company nor any of its Subsidiaries has received any written
notice of, or, except where any such violations would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect, has
any Knowledge of, any zoning, ordinance, building, fire or health code or
other legal violation affecting any such Acquired Real Property.
(c) There are no encroachments or other facts or conditions affecting
any of the Acquired Real Property that would be revealed by an accurate survey
or inspection thereof, which encroachments, facts or conditions would,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. None of the buildings and structures on such Acquired Real
Property encroaches in any material respect upon real property of another
Person or upon the area of any easement affecting the Acquired Real Property.
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5.9 Brokers and Finders. No broker, investment banker, financial
advisor or other Person is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission from Buyer in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company or any of its Subsidiaries.
5.10 Taxes.
(a) The Company and its Subsidiaries have timely filed with the
appropriate Tax Authorities all material Tax Returns required to be filed by
any of them. All Tax Returns filed by the Company and its Subsidiaries are
true, complete and correct in all material respects. All Taxes covered by such
Tax Returns (whether or not shown on any Tax Return) have been timely paid,
except for Taxes (i) disclosed on Schedule 5.10(a)(i) of the Disclosure
Schedule, (ii) which are being contested in good faith in appropriate
Proceedings and disclosed on Schedule 5.10(a)(ii), or (iii) which,
individually or in the aggregate, would not reasonably be expected to result
in any material Liability to Buyer or Sellers.
(b) None of the Acquired Assets is subject to a safe harbor lease
within the meaning of Section 168(f)(8) of the Internal Revenue Code of 1954
as in effect prior to the enactment of the Tax Reform Act of 1986, Public Law
99-514.
5.11 Labor Matters; Employee Relations.
(a) There are no material claims or Proceedings pending or, to the
Knowledge of any Seller, threatened, between the Company or its Subsidiaries
and any employees of the Company or any of its Subsidiaries. There are no
strikes, slowdowns, work stoppages, lockouts, or, to the Knowledge of any
Seller, threats thereof, by or with respect to any employees of the Company or
its Subsidiaries.
(b) The Company and each of its Subsidiaries is and has been in
compliance with all applicable Laws respecting employment, except where the
failure to be in compliance would not reasonably be expected to have a
Material Adverse Effect. The Company and each of its Subsidiaries have
complied with their obligations under the WARN Act, based on the transactions
contemplated by this Agreement.
5.12 ERISA Compliance; Absence of Changes in Benefits Plans. Schedule
5.12 of the Disclosure Schedule sets forth a true and complete list, as of the
Agreement Date, of all Plans. True and complete copies of each of the
following documents, including any amendments made on or prior to the
Agreement Date, have been made available by Sellers to Buyer: (i) each Plan
and all amendments thereto, and the most recent descriptions thereof which
have been distributed to plan participants; (ii) all funding arrangements with
respect to the Plans; (iii) all actuarial or other assumptions used to
calculate funding obligations with respect to any Plan or any change in the
manner in which such contributions are determined; and (iv) a brief
description of any Plan which is not in writing. No "reportable event," as
defined in Section 4043(b) of ERISA and the regulations promulgated
thereunder, has occurred under any Plan and to the Knowledge of the Sellers no
action is contemplated by any Seller or any other Person that would constitute
a reportable event, in each case which could reasonably result in the
imposition of any Liabilities upon Buyer. No Seller participates in any Plan
that is a "multiemployer plan," as such term is defined in Section 4001(a)(3)
of ERISA in respect of any employee of the Business.
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5.13 Litigation. Other than the Chapter 11 Case, there are no
material actions pending, or, to the Sellers' Knowledge, threatened against
any Seller in connection with the Acquired Assets or the Business or which
could give rise to or increase an Assumed Liability. There are no Orders
against any Seller or any of their respective properties or businesses that
would, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
5.14 Customers and Suppliers. Schedule 5.14 of the Disclosure
Schedule sets forth a complete and accurate list of all Significant Customers
and Significant Suppliers. "Significant Customers" are: (i) the 10 customers
that have purchased the most, in terms of dollar value, products or services
sold by the Business during the year ended December 31, 2001; and (ii) the 10
customers that have purchased the most, in terms of dollar value, products or
services sold by the Business during the year ended December 31, 2002.
"Significant Suppliers" are: (y) the 10 suppliers that have sold the most, in
terms of dollar value, products or services to the Business during the year
ended December 31, 2001; and (z) the 10 suppliers that have sold the most, in
terms of dollar value, products or services to the Business during the year
ended December 31, 2002. As of the Agreement Date, no Significant Customer or
Significant Supplier has given any Seller notice terminating, canceling or
materially reducing, or threatening to terminate, cancel or materially reduce,
any Contract or relationship with Seller. As of the Agreement Date, no
Significant Customer (i) has notified the Company or any Subsidiary that the
Company or any Subsidiary no longer meets the customers' quality
specifications or any certification requirements imposed upon steel suppliers
or (ii) to Sellers' Knowledge, has threatened to terminate such certification.
During the three-month period immediately preceding the Agreement Date, there
has been no material increase in (i) the dollar amount of customer claims
relating to the quality of Sellers' products or services, or (ii) the
percentage of products shipped by Sellers that do not conform, as determined
consistently with the Sellers' past practices, to original or prime product
requirements (whether full or limited warranty), in each case as compared with
the comparable period of the preceding calendar year.
5.15 Accounts Receivable. Schedule 5.15 of the Disclosure Schedule is
a complete and accurate list, as of November 30, 2002, of the Accounts
Receivable of Sellers, including an aging of all Accounts Receivable showing
amounts due in 30-day aging categories. Sellers have provided reserves for
Accounts Receivable in accordance with GAAP and the Company's accounting
policies attached hereto as Schedule 1.1(a), consistently applied by Sellers.
On the Closing Date, Sellers will deliver to Buyer a complete and accurate
list, as of a date within five Business Days of the Closing Date, of the
Accounts Receivable. All Accounts Receivable represent valid obligations
arising from bona fide business transactions in the ordinary course of
business consistent with past practice. Subject to the Company Reserves and
any write-down of any Accounts Receivable in connection with the Working
Capital Adjustment in Section 3.4, there is no contest, claim, counterclaim,
defense or right of set-off under any Contract or otherwise with any obligor
of any Account Receivable relating to the amount or validity of such Account
Receivable.
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5.16 Inventory. All Inventory is in good and merchantable quality and
is useable and saleable in the ordinary course of business, except for those
items the value of which (i) has been reduced in accordance with GAAP and the
Company's inventory policies, attached hereto as Schedule 1.1(a), consistently
applied by Sellers or (ii) is or will be reduced in connection with the
Working Capital Adjustment in Section 3.4.
5.17 Financial Statements and SEC Filings.
(a) The Company has delivered or made available to Buyer a true,
correct and complete copy of the audited consolidated balance sheet of the
Company as of December 31, 2002, and audited consolidated statements of
operations, changes in stockholders' equity (deficit) and cash flows for the
year then ended (the "Company Financial Statements"). The Company Financial
Statements are consistent in all material respects with the books and records
of the Business. The Company Financial Statements (including the related
notes) have been prepared in accordance with GAAP consistently applied and
fairly present the results of operations and financial condition of the
Company and its Subsidiaries for the periods covered thereby. Other than the
Financing, since December 31, 2002, Seller has not borrowed, incurred,
assumed, prepaid, guaranteed, or become subject to any material liability or
modified any existing material liability (absolute, accrued or contingent)
other than (i) in the ordinary course of business consistent with past
practice in nature and amount, (ii) as shown on the Company Financial
Statements or (iii) which has been discharged, satisfied or paid in the
ordinary course of business since December 31, 2002.
(b) Each of the forms, reports and documents filed by the Company
with the SEC since December 31, 2001 (the "Company SEC Documents") complied in
all material respects with all applicable requirements of the Securities Act
and the Exchange Act as in effect on the dates so filed. With respect to the
Acquired Assets, the Assumed Liabilities and the Business, none of the Company
SEC Documents (as of the respective filing dates or, if amended, as of the
date of the last such amendment filed prior to the Agreement Date) contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
made therein, in light of the circumstances under which they were made, not
misleading.
5.18 Contracts. All of the Assumed Contracts are in full force and
effect and constitute valid and binding agreements of the Company or the
Subsidiary party thereto, enforceable in accordance with their respective
terms, and to the knowledge of the Company or any Subsidiary that is a party
to any such Assumed Contract, the other parties thereto, subject, as to
enforceability against each such other party, to bankruptcy, moratorium or
other insolvency laws and to equitable principles of general application
(regardless if enforcement is sought at law or in equity). With respect to the
Assumed Contracts, upon entry of the Bankruptcy Court Approval and payment of
the Cure Amounts, (i) neither the Company nor any Subsidiary will be in breach
or default of its obligations thereunder, (ii) to the Knowledge of the Company
or any of its Subsidiaries, no conditions exist that with notice or lapse of
time or both would constitute a default thereunder, and (iii) to the Knowledge
of the Company or any of its Subsidiaries, no other party to any of the
Assumed Contracts is in breach or default thereunder, except in each case
where such breach or default would not reasonably be expected to have a
Material Adverse Effect. Schedule 5.18 of the Disclosure Schedule sets forth a
complete and correct list, as of the Agreement Date, of all Material Contracts
other than those Contracts that are "Material Contracts" solely because such
Contracts are "Assumed Contracts."
26
5.19 Permits. Schedule 5.19 of the Disclosure Schedule sets forth a
true, complete and correct list of all material Permits held by the Company or
its Subsidiaries as of the Agreement Date in connection with the Business or
the Acquired Assets (including the date of expiration of each Permit). Each
Permit is valid and in full force and effect and neither the Company nor any
of its Subsidiaries is in default under or in violation of, and no condition
exists that with notice or lapse of time or both would constitute a default
under or a violation of, any such Permit, except for such defaults or
violations which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.
5.20 Environmental Matters. Each Seller and each Acquired Entity is
in compliance with all Environmental Laws. Sellers possess and are in
compliance with all Permits required under Environmental Laws for the conduct
of the Business. There are no pending or, to the Knowledge of the Company or
any of its Subsidiaries, threatened Proceedings against the Company or any of
its Subsidiaries alleging a violation of or Liability under any Environmental
Law. There has been no Release of any Hazardous Substance that will or is
reasonably likely to require abatement or correction under Environmental Laws
at (A) any of the Acquired Real Property or (B) any property to which any
Seller sent waste materials for treatment, storage or disposal since January
1, 2001. Sellers have provided to Buyer copies of all information necessary
for an understanding of the presence or migration of any Hazardous Substance
on, in or under the Acquired Real Property. Schedule 5.20 of the Disclosure
Schedule sets forth: (i) with respect to the Acquired Assets and Assumed
Liabilities, all accruals or reserves of the Company or any of its
Subsidiaries relating to matters arising under any Environmental Law as of
November 30, 2002; and (ii) a list, as of the Agreement Date, of all
environmental audits and all Notices of Violation relating to the Business,
the Acquired Assets and the Assumed Liabilities. As used herein, "Release"
means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping or disposing into the
environment; and "Hazardous Substance" means any "hazardous substance" as
defined by the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 U.S.C. ▇▇.▇▇. 9601 et. seq., and petroleum, including crude
oil and any fraction or any derivative thereof.
5.21 Capital Expenditures. As of the Agreement Date, the Company has
made available to Buyer the most recent capital spending plans of the Company
and its Subsidiaries relating to the Business or the Acquired Assets,
including any plans relating to any matter arising under any Environmental
Law.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Sellers, as of the Agreement
Date and as of the Closing Date (except with respect to representations and
warranties made as of a particular date, which shall be deemed to be made only
as of such date), as follows (and Buyer makes no other representations or
warranties to Sellers):
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6.1 Due Organization. Buyer is a corporation validly existing and in
good standing under the laws of the state of its incorporation and has the
requisite corporate power and authority to own, lease and operate the assets
to be sold hereunder and to conduct its business as presently conducted. Buyer
is duly qualified to do business and in good standing under the laws of each
jurisdiction in which either the ownership or use of the properties owned or
used by it, or the nature of the activities conducted by it, requires such
qualification, except where the failure to be so qualified and in good
standing would not reasonably be expected to have a Buyer Material Adverse
Effect.
6.2 Authority; Validity. Buyer has the requisite power and authority
to execute and deliver this Agreement and the other documents and instruments
to be executed and delivered by Buyer pursuant hereto and to perform its
obligations hereunder and thereunder. The execution and delivery of this
Agreement and the other agreements to be executed and delivered by Buyer
pursuant hereto, and the consummation by Buyer of the transactions
contemplated hereby and thereby, have been duly authorized by all necessary
corporate action on the part of Buyer. This Agreement has been duly and
validly executed and delivered by Buyer and constitutes, and each of the other
agreements to be executed and delivered by Buyer pursuant hereto upon its
execution and delivery by Buyer will constitute (assuming in each case the due
and valid authorization, execution and delivery thereof by the other parties
thereto and the entry of the Bankruptcy Court Approval by the Bankruptcy
Court), valid and legally binding obligations of Buyer enforceable against
Buyer in accordance with its terms.
6.3 No Violation. The execution, delivery and performance by Buyer of
this Agreement and the transactions contemplated hereby do not and will not
conflict with or result in, with or without the giving of notice or lapse of
time or both, any violation of or constitute a breach or default, or give rise
to any right of acceleration, payment, amendment, cancellation or termination,
under (a) the certificate of incorporation or bylaws of Buyer, (b) any
mortgage, indenture, lease, Contract or other agreement to which Buyer is a
party or by which Buyer or any of its properties or assets is bound or
subject, or (c) any Law or Order to which Buyer is bound or subject, except in
the cases of clauses (b), and (c) where such conflict, breach, default or
right would not, individually or in the aggregate, reasonably be expected to
have a Buyer Material Adverse Effect.
6.4 Third Party Approvals. Except for any approvals required in order
to comply with the provisions of the HSR Act and approvals required by the
Surface Transportation Board in connection with the acquisition of the
Railroad Assets, the execution, delivery and performance by Buyer of this
Agreement and the other documents and instruments to be executed and delivered
by Buyer pursuant hereto and the transactions contemplated hereby and thereby
do not require any consents, waivers, authorizations or approvals of, or
filings with, any Governmental Entity or any other Person which have not been
obtained by Buyer.
6.5 Brokers and Finders. No broker, investment banker, financial
advisor or other Person is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission from Sellers in connection with
the transactions contemplated by this Agreement based upon arrangements made
by or on behalf of Buyer.
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6.6 Compliance with Laws. Buyer is in compliance with all applicable
Laws, except where the failure to be in compliance would not reasonably be
expected to have a Buyer Material Adverse Effect.
6.7 Litigation. Except as disclosed in the forms, reports and
documents filed by the Buyer with the SEC since December 31, 2001, there are
no actions pending against Buyer or any of its Subsidiaries or any of their
respective properties that would, individually or in the aggregate, reasonably
be expected to have a Buyer Material Adverse Effect.
ARTICLE 7
COVENANTS OF THE PARTIES
7.1 Conduct of Business Pending the Closing. During the period from
the date of this Agreement and continuing until the earlier of the termination
of this Agreement in accordance with its terms or the Closing, the Company
shall, and shall cause each of its Subsidiaries to, carry on the Business in
the ordinary course of business and, to the extent consistent therewith, use
all commercially reasonable efforts to preserve the Business intact and
preserve the goodwill of and relationships with Governmental Entities,
customers, suppliers, partners, lessors, licensors, licensees, contractors,
distributors, agents, officers and employees and others having business
dealings with the Business, provided that the foregoing shall not prevent
Sellers from rejecting Contracts that are not Assumed Contracts. During the
period from the date of this Agreement through the Closing Date, the Company
shall endeavor to maintain the Net Receivables Amount, the Inventory Value and
each component of Inventory at or in excess of the amounts set forth on
Schedule 7.1. Without limiting the generality of the first sentence of this
Section 7.1, during the period from the date of this Agreement through the
Closing Date, the Company shall not, and shall not permit any of its
Subsidiaries to, without the prior written consent of Buyer:
(a) abandon any rights under any of the Assumed Contracts; terminate,
amend, modify or supplement the terms of any Assumed Contract; or fail to
honor or perform, the Assumed Contracts;
(b) other than sales of Inventory in the ordinary course of business
or the disposition of obsolete equipment, lease, license, surrender,
relinquish, sell, transfer, convey, assign or otherwise dispose of any
Acquired Assets;
(c) mortgage, pledge or subject to Liens (other than Permitted
Liens), any property, business or any of the Acquired Assets, other than as
would not result in any Liability that would be or would increase an Assumed
Liability as of or subsequent to the Closing;
(d) incur or permit to be incurred any Liability (other than Accounts
Payable or in connection with the performance of Assumed Contracts) that would
be or would increase an Assumed Liability as of or subsequent to the Closing;
(e) fail to replenish the Inventory and Supplies of the Business in
the ordinary course of business;
29
(f) increase the salary of any Identified Employee at or after the
time such person becomes an Identified Employee, other than in the ordinary
course of business consistent with past practice;
(g) make or rescind any material Tax election or take any material
Tax position (unless required by law) or file any Tax Return or change its
fiscal year or financial or Tax accounting methods, policies or practices, or
settle any Tax Liability, except in each case as would not reasonably be
expected to affect the Buyer;
(h) institute, settle or agree to settle any litigation, action or
Proceeding before any court or Governmental Entity relating to the Acquired
Assets, or modify in any manner that is adverse to the Business or the
Acquired Assets, rescind or terminate a material Permit, allowance, or credit
(or application therefor) relating to the Business or the Acquired Assets;
(i) transfer or grant any rights under, modify any existing rights
under, or enter into any settlement regarding the breach or infringement of,
any material Intellectual Property; or
(j) enter into any Contract to do any of the foregoing.
7.2 Bankruptcy Court Order. Buyer agrees that it will promptly take
such actions as are reasonably requested by Sellers, on behalf of Sellers, to
assist in obtaining the Bankruptcy Court Approval, including furnishing
affidavits or other documents or information for filing with the Bankruptcy
Court for purposes, among others, of demonstrating that Buyer is a "good
faith" Buyer under Section 363(m) of the Bankruptcy Code. In the event the
Bankruptcy Court Approval shall be appealed, Sellers shall use all reasonable
efforts to defend such appeal.
7.3 Notification of Certain Matters. Sellers shall give prompt Notice
to Buyer, and Buyer shall give prompt Notice to Sellers, of (i) any notice or
other communication from any Person alleging that the consent of such Person
which is or may be required in connection with the transactions contemplated
by this Agreement is not likely to be obtained prior to Closing, and (ii) any
written objection or Proceeding that challenges the transactions contemplated
hereby or the entry of the Bankruptcy Court Approval. Sellers shall give
prompt Notice to Buyer of (i) any notice of any alleged violation of Law
applicable to any Seller; (ii) the commencement of any investigation, inquiry
or review by any Governmental Entity with respect to the Business or that any
such investigation, inquiry or review, to the Knowledge of any Seller, is
contemplated; (iii) the infringement or unauthorized use by any Person of any
material Intellectual Property (of which any Seller has Knowledge); and (iv)
the execution of any Material Contract (and Sellers shall deliver or make
available a copy thereof to Buyer). Sellers shall use commercially reasonable
efforts to give prompt Notice to Buyer of the execution of any Ordinary Course
Contract and, upon the request of Buyer to make available to Buyer copies of
any such Ordinary Course Contracts.
7.4 Access.
(a) Subject to applicable Law, from the date hereof until the Closing
Date, Sellers (i) shall give Buyer and its Representatives reasonable access
during normal business hours to the offices, properties, officers, employees,
accountants, auditors, counsel and other representatives, books and records of
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the Company and its Subsidiaries; provided, however, that Buyer's inspection
of Sellers' properties shall not, without the consent of the Company, which
consent shall not be unreasonably withheld or delayed, include the
environmental sampling of any environmental media, including air, soil,
surface water or groundwater, (ii) shall furnish to Buyer and its
Representatives such financial, operating and property related data and other
information as such persons reasonably request, and (iii) shall instruct the
Company's and its Subsidiaries' employees, counsel and financial advisors to
cooperate reasonably with Buyer in its investigation of the business of the
Company and its Subsidiaries. All such information shall be provided subject
to the provisions of the Confidentiality Agreement. In addition,
notwithstanding any provision of the Confidentiality Agreement to the
contrary, Buyer shall, with the prior consent of the Company, which consent
shall not be unreasonably withheld or delayed, have the right to contact and
negotiate directly with Seller's joint venturers and other partners, parties
to the Assumed Contracts and lenders with respect to any Acquired Assets or
Assumed Liabilities. The Company shall have the right to participate in such
negotiations and agrees to cooperate with Buyer, at Buyer's request, in any
such negotiations. It is acknowledged and understood that no investigation by
Buyer or other information received by Buyer shall operate as a waiver or
otherwise affect any representation, warranty or other agreement given or made
by Seller hereunder. Buyer agrees that any on-site inspections of any Acquired
Real Property, including any inspection or study pursuant to Section
7.4(b)(ii) or Section 7.4(b)(iii), shall be conducted in the presence of
Sellers or its Representatives. All inspections shall be conducted so as not
to interfere unreasonably with the use of the Acquired Real Property by
Sellers.
(b) From and after the Closing Date, Sellers shall give Buyer and
Buyer's Representatives reasonable access during normal business hours to the
offices, facilities, plants, properties, officers, employees, books and
records of Sellers pertaining to the Business, and Sellers shall cause their
Representatives to furnish to Buyer such financial, technical, operating and
other information pertaining to the Business as Buyer's Representatives shall
from time to time reasonably request and to discuss such information with such
Representatives. Sellers shall, and shall cause each of their Affiliates to,
cooperate with Buyer as may reasonably be requested by Buyer for purposes of
(i) enabling an independent accounting firm selected by Buyer to conduct an
audit of the Business, including access to the Company's independent auditors'
working papers pertaining to the Business or the Assets; (ii) undertaking,
with the consent of the Company, which consent shall not be unreasonably
withheld or delayed, any study of the condition or value of the Acquired
Assets including any environmental assessment; and (iii) undertaking any study
relating to Sellers' compliance with Laws, including Environmental Laws; and
the Company acknowledges that information or access may be requested and used
for such purpose.
(c) From and after the Closing Date, Buyer shall give Sellers and
Sellers' Representative reasonable access during normal business hours to the
books and records pertaining to the Excluded Assets and Excluded Liabilities
and, to the extent that Sellers retain any Liabilities with respect to such
items, the Acquired Assets or Assumed Liabilities. Buyer shall, and shall
cause each of its Affiliates to, cooperate with Sellers as may reasonably be
requested by Sellers for such purposes.
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7.5 Public Announcements. From the Agreement Date until the earlier
of the Closing or the termination of this Agreement, Buyer and the Company
will consult with each other before issuing, and provide each other the
opportunity to review and comment upon, any press release, any court filing or
pleading filed with the Bankruptcy Court relating primarily to this Agreement
or the transactions contemplated hereby, or other public statements with
respect to the transactions contemplated by this Agreement, and neither Buyer
nor any Seller shall issue any such press release or make any such public
statement without the prior approval of the other party, in each case except
as may be required by Law, court process or by obligations pursuant to any
listing agreement with any national securities exchange. Buyer and each Seller
shall cause its Affiliates, employees, officers and directors to comply with
this Section 7.5.
7.6 Cure of Defaults. Subject to Bankruptcy Court Approval, the
Sellers shall, on or prior to the Closing, cure any and all defaults and
breaches under and satisfy any Liability arising from or relating to
pre-Closing periods under the Assumed Contracts so that such Assumed Contracts
may be assumed by Sellers and assigned to Buyer in accordance with the
provisions of Section 365 of the Bankruptcy Code and this Agreement. Each
Seller agrees that it will promptly take such actions as are reasonably
necessary or desirable to obtain a Final Order of the Bankruptcy Court
providing for the assumption and assignment of the Assumed Contracts.
7.7 ERISA and Employment Matters. Buyer shall offer employment,
effective as of the Closing Date, to the Identified Employees on such terms as
Buyer shall determine in its sole discretion. Seller shall terminate the
employment of all Hired Non-CB Employees immediately prior to the Closing Date
and shall comply with any and all requirements of the WARN Act in connection
therewith. Each Identified Employee who accepts Buyer's offer of employment
shall be deemed to be a "Hired Non-CB Employee" on the day such employee
commences active employment with Buyer (not earlier than the Closing Date).
With respect to Buyer's medical insurance coverage benefit plans, such plans
shall (i) provide coverage to each Hired Non-CB Employee as of the day such
employee commences active employment with Buyer and (ii) waive pre-existing
condition limitations to the same extent waived under the applicable plan of
Buyer, except that the benefits under such plans, including any new plans, may
be adjusted or limited to take into account similar benefits provided under
any federal or state assistance programs, subject to applicable Law.
7.8 Further Agreements. Sellers shall use all commercially reasonable
efforts to promptly deliver to Buyer any mail or other communication received
by Sellers after the Closing Date pertaining to the Acquired Assets, the
Business or the Assumed Liabilities. Buyer shall use all commercially
reasonable efforts to promptly deliver to Sellers any mail or other
communication received by it after the Closing Date pertaining to the Excluded
Assets or any Excluded Liabilities and any cash, checks or other instruments
of payment in respect thereof. From and after the Closing Date, Sellers shall
use all commercially reasonable efforts to refer all inquiries with respect to
the Business, the Acquired Assets and the Assumed Liabilities to Buyer, and
Buyer shall use all commercially reasonable efforts to refer all inquiries
with respect to the Excluded Assets and the Excluded Liabilities to Sellers.
7.9 Payment of Transfer Taxes and Tax Filings. All Transfer Taxes
arising out of the transfer of the Assets and any Transfer Taxes required to
effect any recording or filing with respect thereto shall be borne one-half by
Buyer and one-half by Sellers. The Transfer Taxes shall be calculated assuming
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that no exemption from Transfer Taxes is available, unless otherwise indicated
in the Bankruptcy Court Approval or, at Closing, Sellers or Buyer, as
appropriate, provides an appropriate resale exemption certificate or other
evidence acceptable to Buyer or Seller, as appropriate, of exemption from such
Transfer Taxes. Sellers and Buyer shall cooperate to timely prepare and file
any Tax Returns relating to such Transfer Taxes, including any claim for
exemption or exclusion from the application or imposition of any Transfer
Taxes. Sellers shall pay such Transfer Taxes and shall file all necessary
documentation and returns with respect to such Transfer Taxes when due, and
shall promptly, following the filing thereof, furnish a copy of such return or
other filing and a copy of a receipt showing payment of any such Transfer Tax
to Buyer. Notwithstanding the foregoing, the parties shall seek to include in
the Bankruptcy Court Approval a provision that the sale, transfer, assignment
and conveyance of the Acquired Assets to Buyer hereunder shall be entitled to
the protections afforded under Section 1146(c) of the Bankruptcy Code. Each
party hereto shall furnish or cause to be furnished to the other, upon
request, as promptly as practicable, such information and assistance relating
to the Assets and the Business as is reasonably necessary for filing of all
Tax Returns, including any claim for exemption or exclusion from the
application or imposition of any Taxes or making of any election related to
Taxes, the preparation for any audit by any taxing authority and the
prosecution or defense of any claim, suit or proceeding relating to any Tax
Return.
7.10 Utilities. To the extent practicable, the parties hereto shall
notify the gas, water, sewage treatment, telephone and electric utility
companies that Buyer shall be responsible for the payment of all obligations
of the Business or the Acquired Assets incurred therefor on or after the
Closing Date. Sellers shall request the gas, water and electric utility
companies to cause meters to be read as of the Closing Date, and Sellers shall
be responsible for the payment of all charges for such services incurred and
provided through the Closing Date. Sellers shall cause the telephone companies
to render a ▇▇▇▇ for telephone service incurred through the Closing Date, and
Sellers shall be responsible for the payment of such bills. In the event that
after the Closing Date, any provider of phone, gas, water or electric
utilities seeks payment from Buyer of unpaid phone, gas, water or electric
utilities provided to Sellers on or prior to the Closing Date, Sellers shall
pay such unpaid amounts as promptly as is required (after reasonable Notice
from Buyer) to avoid any discontinuation of utility service to Buyer. To the
extent that Buyer pays such unpaid amounts, Sellers shall promptly reimburse
Buyer for the cost of such payments; provided, however, Sellers shall not be
obligated to reimburse Buyer for any such amounts included in Accounts Payable
for purposes of the Working Capital Adjustment.
7.11 Proration of Taxes and Certain Charges.
(a) Except as otherwise expressly provided herein, all real property
Taxes, personal property Taxes or similar ad valorem obligations levied with
respect to the Acquired Assets for any taxable period that includes the day
before the Closing Date and ends after the Closing Date, whether imposed or
assessed before or after the Closing Date, shall be prorated between Sellers
and Buyer as of 12:01 A.M. on the Closing Date. If any Taxes subject to
proration are paid by Buyer, on the one hand, or Sellers, on the other hand,
the proportionate amount of such Taxes paid (or in the event a refund of any
portion of such Taxes previously paid is received, such refund) shall be paid
promptly by (or to) the other after the payment of such Taxes (or promptly
following the receipt of any such refund); provided, however, Sellers shall
not be obligated to reimburse Buyer for any such amounts included in Accounts
Payable for purposes of the Working Capital Adjustment.
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(b) Except as otherwise expressly provided herein, all installments
of special assessments or other charges on or with respect to the Acquired
Assets payable by Sellers for any period in which the Closing Date shall
occur, including base rent, common area maintenance, royalties, all municipal,
utility or authority charges for water, sewer, electric or gas charges,
garbage or waste removal, and cost of fuel, shall be apportioned as of the
Closing Date and each party shall pay its proportionate share promptly upon
the receipt of any ▇▇▇▇, statement or other charge with respect thereto. If
such charges or rates are assessed either based upon time or for a specified
period, such charges or rates shall be prorated as of 12:01 A.M. on the
Closing Date. If such charges or rates are assessed based upon usage of
utility or similar services, such charges shall be prorated based upon meter
readings taken on the Closing Date.
(c) Except as otherwise expressly provided herein, all amounts due
pursuant to the terms of the Assumed Contracts, other than those Contracts set
forth on Schedule 3.4(a) attached hereto, for any period in which the Closing
Date shall occur shall be prorated as of 12:01 A.M. on the Closing Date.
(d) If any amounts subject to proration pursuant to subsections (b)
or (c) of this Section 7.11 are paid by Buyer, on the one hand, or Sellers, on
the other hand, the other party shall promptly reimburse the payor the other
party's proportionate amount of such payment; provided, however, Sellers shall
not be obligated to reimburse Buyer for any such amounts included in Accounts
Payable for purposes of the Working Capital Adjustment.
7.12 Regulatory Approvals; Reasonable Efforts; Notification; Consent.
(a) Each of the parties will use all reasonable efforts to take, or
cause to be taken, all actions and use all reasonable efforts to do, or cause
to be done, and to assist and cooperate with the other parties in doing, all
things necessary, proper or advisable to consummate and make effective, in the
most expeditious manner practicable, the transactions contemplated by this
Agreement, including (i) the obtaining of all other necessary actions,
nonactions, waivers, and Permits from Governmental Entities and the making of
all other necessary registrations and filings (including filings under the HSR
Act), (ii) the obtaining of all necessary consents, approvals or waivers from
third parties, and (iii) the execution and delivery of any additional
certificates, agreements, instruments, reports, schedules, statements,
consents, documents and information necessary to consummate the transactions
contemplated by this Agreement.
(b) Except as required by Law, each party hereto shall promptly
inform the other of any communication from any Governmental Entity regarding
any of the transactions contemplated by this Agreement. If any party hereto or
Affiliate thereof receives a request for additional information or documentary
material from any such Government Entity with respect to the transactions
contemplated by this Agreement, then such party will use its reasonable
efforts to make, or cause to be made, as soon as reasonably practicable and
after consultation with the other party, an appropriate response in compliance
with such request. Each party hereto shall bear its respective filing fees
associated with the filings required under the HSR Act or under any Antitrust
Law.
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(c) Neither Buyer nor any of its Subsidiaries shall be required to
(A) divest, or cause or permit the Company or its Subsidiaries or Affiliates
to divest, any of their respective businesses, product lines or assets, (B)
hold the Acquired Assets separately, or (C) take or agree to take any other
actions or agree to any limitations that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect or an adverse
effect on the value, financial condition, business or results of operations of
Buyer or its pre-closing Subsidiaries that would be material to an entity
having assets, liabilities, revenues and earnings similar in amount to those
of the Company. Buyer shall not be required to waive any of the conditions to
this Agreement set forth in Article 8.
7.13 [Removed]
7.14 Rejected Contracts. No Seller shall reject any Assumed Contract
in any bankruptcy proceeding following the date hereof without the prior
written consent of the Buyer.
7.15 Further Assurances. Subject to the terms and conditions herein
provided, following the Closing Date, Sellers shall execute and deliver to
Buyer such bills of sale, endorsements, assignments and other good and
sufficient instruments of assignment, transfer and conveyance, in form and
substance reasonably satisfactory to Buyer, as shall be necessary to vest in
Buyer all of Sellers' right, title and interest in and to the Acquired Assets.
Simultaneously with such delivery, Sellers shall take such reasonable steps as
may be reasonably necessary or appropriate at and after the Closing, so that
Buyer shall be placed in actual possession and operating control of the
Acquired Assets. Sellers shall, and shall cause their respective Affiliates
to, provide copies or otherwise make available to Buyer and Buyer's
Representatives, all information and records (financial and otherwise)
relating to, or otherwise used or useful in the Business, and not otherwise
included in the Acquired Assets.
7.16 Union Negotiations. Buyer and the United Steelworkers of America
have entered into a letter of agreement (the "Letter of Agreement") which
includes a tentative collective bargaining agreement including those items set
forth on Schedule 7.16. Buyer and the International Chemical Workers Union
have entered into a tentative collective bargaining agreement including those
items set forth on Schedule 7.16. Buyer agrees that it shall use all
reasonable efforts to propose collective bargaining agreements and initiate
negotiations of such collective bargaining agreements with each of the
Security, Police, Fire Professionals of America International Union, the
Bricklayers & Allied Craftworkers International Union and the Laborers'
International Union of North America and shall keep the Company reasonably
informed of the progress of any such negotiations.
7.17 Closing Financial Certificate. The Company shall prepare, in
good faith, and deliver to Buyer, at least three Business Days prior to the
Closing Date, a certificate signed by the Company's Chief Executive Officer
and Chief Financial Officer (the "Closing Financial Certificate") setting
forth the Estimated Net Receivables Amount and the Estimated Inventory Value.
35
7.18 Transition Services Agreement. Each of Buyer and the Company
shall use all reasonable efforts to negotiate a mutually satisfactory
transition services agreement, pursuant to which Buyer or one of its
Affiliates shall provide, in exchange for payment therefor, specified services
to the Company (the "Transition Services Agreement"), to be entered into as of
the Closing Date. The Transition Services Agreement shall not obligate Buyer
to be responsible for any Excluded Liabilities.
7.19 Credit Support Arrangements. Buyer acknowledges that, in the
course of the conduct of the Business by Sellers, Sellers have entered into
various arrangements (the "Seller Credit Support Arrangements"), including
letters of credit, guaranty, surety and other similar obligations (all as set
forth on Schedule 2.2(k)). Buyer and Sellers agree that the Seller Credit
Support Arrangements are not intended to inure to the benefit of Buyer after
the Closing and that Sellers intend to monetize the Seller Credit Support
Arrangements after the Closing. Buyer agrees that Sellers shall have no
responsibility to continue any of the Seller Credit Support Arrangements in
order to satisfy obligations with respect to the Business and the Acquired
Assets arising after the Closing Date. Buyer agrees that, to the extent that
the Seller Credit Support Arrangements serve to secure performance of
obligations relating to the Business or the Acquired Assets which arise after
the Closing, Buyer will enter into replacement credit support arrangements if
and as necessary to secure such post-Closing obligations. Sellers and Buyer
agree that: (i) Sellers are solely responsible for all workers' compensation
claims with respect to injuries or other occurrences which occur prior to the
Closing, and Buyer shall have no obligation to enter into replacement credit
support arrangements to the extent they relate to such obligations; and (ii)
Buyer shall be solely responsible for all workers' compensation claims with
respect to injuries or other occurrences which occur after the Closing, and
Buyer will enter into credit support arrangements if and as necessary to the
extent they relate to such obligations. In addition, Buyer agrees to cooperate
with Sellers to enable Sellers to monetize the Seller Credit Support
Arrangements for which Buyer is not required to enter into replacement credit
support arrangements in accordance with the immediately preceding two
sentences. Seller shall reimburse Buyer for reasonable out-of-pocket expenses
of Buyer in connection with such cooperation, it being understood that such
cooperation will not include any obligation to pay the counterparties to such
Seller Credit Support Arrangements.
ARTICLE 8
CONDITIONS TO OBLIGATIONS OF THE PARTIES
8.1 Conditions Precedent to Obligations of Buyer. The obligation of
Buyer to consummate the transactions contemplated by this Agreement is subject
to the satisfaction (or waiver by Buyer in Buyer's sole discretion) at or
prior to the Closing Date of each of the following conditions:
(a) Accuracy of Representations and Warranties. Each of the
representations and warranties of Sellers contained herein shall be true and
correct in all material respects on the date hereof and shall be true and
correct in all respects on and as of the Closing Date, with the same force and
effect as though such representations and warranties had been made on and as
of the Closing Date, except to the extent that any such representation or
warranty is expressly made as of a specified date, in which case such
representation or warranty shall have been true and correct as of such date;
provided, however, that the failure of any such representations or warranties
36
to be true and correct on and as of the Closing Date shall not constitute a
basis for Buyer to refuse to consummate the transactions contemplated hereby
unless such failure, either individually or in the aggregate, has resulted in
or would reasonably be expected to result in, a Material Adverse Effect;
provided, further, that for the purposes of this Section 8.1(a), all
references to materiality in Article 5 shall be disregarded.
(b) Performance of Obligations. Sellers shall have performed in all
material respects all obligations and agreements contained in this Agreement
required to be performed by them on or prior to the Closing Date.
(c) Officer's Certificate. Buyer shall have received a certificate,
dated the Closing Date, of an executive officer of each Seller to the effect
that the conditions specified in Sections 8.1(a) and (b) above have been
fulfilled.
(d) Bankruptcy Court Approval. The Bankruptcy Court shall have
entered an order or orders (the "Bankruptcy Court Approval") substantially in
the form set forth in Exhibit G hereto, which, among other things, (i)
approves, pursuant to Sections 105, 363 and 365 of the Bankruptcy Code, (A)
the execution, delivery and performance by Sellers of this Agreement,
including each and every term and condition hereof, and the other instruments
and agreements contemplated hereby, (B) the sale of the Assets to Buyer on the
terms set forth herein, and (C) the performance by Sellers of their respective
obligations under this Agreement; (ii) authorizes and directs the Sellers to
assume and assign to Buyer the Assumed Contracts; and (iii) finds that Buyer
is a "good faith" buyer within the meaning of Section 363(m) of the Bankruptcy
Code. The Bankruptcy Court Approval shall be in full force and effect and
shall not have been stayed, enjoined or modified. Sellers shall have delivered
to Buyer (i) a certified copy of the order or orders providing for Bankruptcy
Court Approval, and (ii) copies of all affidavits of service of Sellers'
motion seeking Bankruptcy Court Approval or notice of such motion filed by or
on behalf of Sellers.
(e) Assumed Contracts. All of the material Assumed Contracts shall
(i) be in full force and effect and assignable to and assumable by Buyer
without the consent of the other party thereto or consent thereto shall have
been obtained, and (ii) have had all of any Seller's breaches and defaults
thereunder cured in accordance with Section 7.6 hereof.
(f) No Material Adverse Change.
(i) Since December 31, 2002, no event, occurrence, fact, condition,
change, development or effect shall have occurred or shall exist that,
individually or in the aggregate, has had or would reasonably be expected to
have a Material Adverse Effect on the Company and Sellers, taken as a whole.
(ii) For the three-month period ending on the last day of the month
immediately preceding the Closing Date:
(A) the aggregate revenues from coated steel shipped to the
automotive market from the Company and its Subsidiaries shall not be less than
$95 million; and
37
(B) the aggregate revenues from chrome, tin and blackplate shipped to
the container market from the Company and its Subsidiaries shall not be less
than $65 million.
(g) No Intercompany Indebtedness; No Liens. Each of Delray Connecting
Railroad Company, Double G Coatings, L.P., Double G Coatings, Inc. and Steel
Health Resources, LLC shall have been released from its obligation to repay
indebtedness owing at or accruing prior to Closing to the Company or any of
its Subsidiaries and no indebtedness of any Seller to the Company or any of
its Subsidiaries shall give rise to or increase an Assumed Liability. The
assets of Delray Connecting Railroad Company shall be free and clear of all
Liens (other than Permitted Liens).
(h) No Violation of Orders. No provisions of any applicable Law or
Order enacted, entered, promulgated, enforced or issued by any Governmental
Entity shall be in effect that (i) prevents the sale and purchase of the
Acquired Assets or any of the other transactions contemplated by this
Agreement, (ii) would adversely affect or interfere with the operation of the
Business as contemplated to be conducted after the Closing in a manner that
would reasonably be expected to constitute a Material Adverse Effect, or (iii)
would require Buyer or any of its Affiliates to sell or otherwise dispose of,
hold separate or otherwise divest itself of, any of the Acquired Assets or any
of the assets, properties or business of Buyer or any of its Affiliates.
(i) HSR Act. Any applicable waiting period under the HSR Act or any
other applicable Antitrust Laws, in each case, if required, shall have expired
or shall have been earlier terminated, and all necessary approvals under all
applicable Antitrust Laws shall have been obtained.
(j) Title Insurance. At Buyer's sole cost and expense, a title
insurance company acceptable to Buyer in its sole discretion shall have issued
a commitment to issue to Buyer an ALTA (or local equivalent) owner's coverage
policy of title insurance for each of the properties described on Schedule
2.1(a)-1, insuring the interest to be acquired by Buyer in each property,
subject only to standard survey exceptions and Permitted Liens, and in each
case in an amount acceptable to Buyer in its sole discretion, but in no event
in an amount greater than the fair market value of each property.
(k) Transition Services Agreement. The Company shall have executed
and delivered to Buyer the Transition Services Agreement.
(l) Headquarters Lease. The Company shall have executed and delivered
to Buyer the Headquarters Lease.
(m) Trademark License Agreement. The Company shall have executed and
delivered to Buyer the Trademark License Agreement.
(n) Closing Financial Certificate. The Company shall have delivered
to Buyer the duly executed Closing Financial Certificate.
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8.2 Conditions Precedent to the Obligations of Sellers. The
obligation of Sellers to consummate the transactions contemplated by this
Agreement is subject to the satisfaction (or waiver by Seller) at or prior to
the Closing Date of each of the following conditions:
(a) Accuracy of Representations and Warranties. The representations
and warranties of Buyer contained herein shall be true and correct in all
material respects on the date hereof in and shall be true and correct in all
respects on and as of the Closing Date, with the same force and effect as
though such representations and warranties had been made on and as of the
Closing Date, except to the extent that any such representations or warranty
is made as of a specified date, in which case such representation or warranty
shall have been true and correct as of such date; provided, however, that the
failure of any such representations or warranties to be true and correct on
and as of the Closing Date shall not constitute a basis for Sellers to refuse
to consummate the transactions contemplated hereby unless such failure, either
individually or in the aggregate, has resulted in or would reasonably be
expected to result in, a Buyer Material Adverse Effect; provided, further,
that for the purposes of this Section 8.2(a), all references to materiality in
Article 6 shall be disregarded; and provided, further, that for the purposes
of the indemnification provision in Section 10.2(a), the references to
materiality and Buyer Material Adverse Effect in this Section 8.2(a) shall be
disregarded.
(b) Performance of Obligations. Buyer shall have performed in all
material respects all obligations and agreements contained in this Agreement
required to be performed by it prior to or on the Closing Date.
(c) Officer's Certificate. Sellers shall have received a certificate,
dated the Closing Date, of an officer of Buyer to the effect that the
conditions specified in Sections 8.2(a) and (b) above have been fulfilled.
(d) Bankruptcy Court Approval. The Bankruptcy Court Approval shall be
in full force and effect and shall not have been stayed, enjoined or modified.
(e) No Injunction. No preliminary or permanent injunction or other
Order issued by, and no Proceeding or Order by or before any Governmental
Entity nor any Law or Order promulgated or enacted by any Governmental Entity
shall be in effect or pending which declares this Agreement invalid or
unenforceable in any respect or which materially delays, restrains, enjoins or
otherwise prohibits or seeks to restrain, enjoin or otherwise prohibit the
transactions contemplated hereby.
(f) HSR Act. Any applicable waiting period under the HSR Act or any
other applicable Antitrust Laws, in each case, if required, shall have expired
or shall have been earlier terminated, and all necessary approvals under all
applicable Antitrust Laws shall have been obtained.
(g) Transition Services Agreement. Buyer shall have executed and
delivered to Sellers the Transition Services Agreement.
(h) Headquarters Lease. Buyer shall have executed and delivered to
Sellers the Headquarters Lease.
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(i) Trademark License Agreement. Buyer shall have executed and
delivered to Sellers the Trademark License Agreement.
ARTICLE 9
TERMINATION
9.1 Termination of Agreement. This Agreement may be terminated and
the transactions contemplated hereby abandoned at any time prior to the
Closing:
(a) by written agreement of the Company and Buyer;
(b) by either Buyer or the Company:
(i) if the Closing shall not have occurred on or before the date that
is the earliest of (x) May 21, 2003; and (y) twenty-two Business Days
following the entry of the Bankruptcy Court Approval; provided, however, that
the terminating party is not in material and willful breach of any of its
representations and warranties contained in this Agreement and has not failed
in any material respect to perform any of its obligations hereunder; or
(ii) if there shall be any Law or regulation that makes consummation
of the transactions contemplated hereby illegal or otherwise prohibited, or if
any judgment, injunction, order or decree permanently restraining, prohibiting
or enjoining Buyer or the Company from consummating the transactions
contemplated hereby is entered and such judgment, injunction, order or decree
shall become final;
(c) by Buyer:
(i) if there shall have been a breach by any Seller of any of its
representations, warranties, covenants or agreements contained in this
Agreement, which breach would result in the failure to satisfy one or more of
the conditions set forth in Section 8.1, and such breach shall be incapable of
being cured or, if capable of being cured, shall not have been cured within 15
days after written Notice thereof shall have been received by the Company; or
(ii) if (A) the Bankruptcy Court Approval shall not have been entered
on or before April 22, 2003 or (B) the Bankruptcy Court Approval shall fail to
be in full force and effect or shall have been stayed, enjoined, reversed,
modified or amended in any respect without the prior written consent of Buyer;
or
(d) by the Company if there shall have been a breach by Buyer of any
of its representations, warranties, covenants or agreements contained in this
Agreement, which breach would result in the failure to satisfy one or more of
the conditions set forth in Section 8.2, and such breach shall be incapable of
being cured or, if capable of being cured, shall not have been cured within 15
days after written Notice thereof shall have been received by Buyer.
9.2 Consequences of Termination. In the event of any termination of
this Agreement by either or both of Buyer and the Company pursuant to Section
9.1, written Notice thereof shall forthwith be given by the terminating party
to the other party hereto, specifying the provision hereof pursuant to which
such termination is made, and this Agreement shall thereupon terminate and
become void and of no further force and effect, and the transactions
contemplated hereby shall be abandoned without further action of the parties
hereto; provided, however, that such termination shall not relieve any party
hereto of any Liability for willful breach of this Agreement.
40
ARTICLE 10
INDEMNIFICATION
10.1 Indemnification of Buyer. [Removed.]
10.2 Indemnification of Sellers. Buyer hereby agrees to indemnify and
hold harmless each Seller, its officers, directors, employees, agents and
Affiliates (the "Seller Indemnitees") from and against, and pay or reimburse
the Seller Indemnitees for, any and all Liabilities, losses, claims, damages,
punitive damages, causes of action, lawsuits, administrative proceedings
(including informal proceedings), investigations, audits, demands,
assessments, adjustments, judgments, settlement payments, deficiencies,
penalties, fines, interest (including interest from the date of such damages)
and costs and expenses (including without limitation reasonable attorneys'
fees and disbursements of every kind, nature and description) (collectively,
"Losses") resulting from or arising out of:
(a) the inaccuracy of any representation or warranty made by Buyer
herein or in any certificate delivered pursuant to this Agreement;
(b) any failure of Buyer to perform any covenant or agreement made or
contained in this Agreement or to fulfill any other obligation in respect
hereof;
(c) the Assumed Liabilities; and
(d) Liabilities with respect to, arising out of or relating to, the
ownership, possession or use of the Acquired Assets and the operation of the
Business on or after the Closing Date.
10.3 Indemnification Procedures.
(a) In order for a Seller Indemnitee (an "Indemnified Party") to be
entitled to any indemnification provided for under this Agreement in respect
of, arising out of or involving a claim or demand made by any person or entity
against the Indemnified Party (a "Third Party Claim"), such Indemnified Party
must notify the parties obligated to provide indemnification pursuant to
Section 10.2 hereof (each, an "Indemnifying Party") in writing, and in
reasonable detail, of the Third Party Claim promptly after receipt by such
Indemnified Party of written Notice of the Third Party Claim; provided,
however, that failure to give any Notice or make any deliveries required under
this Article 10 shall not affect the indemnification provided hereunder except
to the extent the Indemnifying Party shall have been actually prejudiced as a
result of such failure. Such notice shall state the nature and the basis of
such claim and, if estimable, a reasonable estimate of the amount thereof.
Thereafter, the Indemnified Party shall deliver to the Indemnifying Party,
promptly after the Indemnified Party's receipt thereof, copies of all notices
and documents (including court papers) received by the Indemnified Party
relating to the Third Party Claim.
41
(b) The Indemnifying Party shall have the right to defend and settle,
at its own expense and by its own counsel (provided that such counsel is not
reasonably objected to by the Indemnified Party), any Third Party Claim;
provided that, and for so long as, the Indemnifying Party pursues the same in
good faith and diligently. If the Indemnifying Party undertakes to defend or
settle, it shall promptly notify the Indemnified Party of its intention to do
so, and the Indemnified Party shall cooperate with the Indemnifying Party and
its counsel in the defense thereof and in any settlement thereof. Such
cooperation shall include, but shall not be limited to, furnishing the
Indemnifying Party with any books, records or information reasonably requested
by the Indemnifying Party that are in the Indemnified Party's possession or
control and making employees of the Indemnified Party available on a mutually
convenient basis to provide additional information and explanation of any
materials provided hereunder. Notwithstanding the foregoing, the Indemnified
Party shall have the right to participate in any matter through counsel of its
own choosing at its own expense (unless there is a conflict of interest that
prevents counsel for the Indemnifying Party from representing the Indemnified
Party, in which case the Indemnifying Party will reimburse the Indemnified
Party for the reasonable expenses of its counsel). After the Indemnifying
Party has notified the Indemnified Party of its intention to undertake to
defend or settle any such asserted liability, and for so long as the
Indemnifying Party diligently pursues such defense, the Indemnifying Party
shall not be liable for any additional legal expenses incurred by the
Indemnified Party in connection with any defense or settlement of such
asserted liability, except to the extent such participation is requested by
the Indemnifying Party, in which event the Indemnified Party shall be
reimbursed by the Indemnifying Party for reasonable additional legal expenses
and out-of-pocket expenses.
(c) No Indemnifying Party shall, without the written consent of the
Indemnified Party, effect the settlement or compromise of, or consent to entry
of any judgment with respect to, any pending or threatened action or claim in
respect of which indemnification or contribution may be sought hereunder
(whether or not the Indemnified Party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes
an unconditional release of the Indemnified Party from all Liability arising
out of such action or claim, (ii) does not include a statement as to, or an
admission of, fault, culpability or a failure to act by or on behalf of any
Indemnified Party, and (iii) does not include any injunctive or non-monetary
relief.
(d) If the Indemnifying Party does not assume the defense of any
Third Party Claim, then the Indemnified Party may defend against such Third
Party Claim in such manner as it reasonably deems appropriate at the expense
of the Indemnifying Party.
(e) Notice given by Buyer to the Company shall constitute valid
Notice to all Seller Indemnitees, and with respect to any Third Party Claim
with respect to which more than one Seller Indemnitee is an indemnified party
or a potential indemnified party, all such Seller Indemnitees shall select a
single Seller Indemnitee to act as representative for all such Seller
Indemnitees with respect to such Third Party Claim, and (i) such
representative shall be authorized to make authorizations and consents on
behalf of each such Seller Indemnitee, and (ii) Buyer shall, with respect to
all matters relating to such Third Party Claim, be entitled to rely on the
statements, authorizations and consents of such representative as being the
statement, authorization or consent of each such Seller Indemnitee.
42
(f) In the event an Indemnified Party has indemnification claim
against any Indemnifying Party under the Agreement that does not involve a
Third Party Claim being asserted against or sought to be collected from such
Indemnified Party, the Indemnified Party shall deliver Notice of such claim
with reasonable promptness to the Indemnifying Party. The failure by any
Indemnified Party so to notify the Indemnifying Party shall not relieve the
Indemnifying Party from any liability that it may have to such Indemnified
Party, except to the extent that the Indemnifying Party has been actually
prejudiced by such failure. Such notice shall state the nature and the basis
of such claim, and, if estimable, a reasonable estimate of the amount thereof.
If the Indemnifying Party notifies the Indemnified Party that it does not
dispute the claim described in such Notice or does not respond to such claim
within 60 days of receipt thereof, the Loss arising from the claim specified
in such Notice will be conclusively deemed a liability of the Indemnifying
Party and the Indemnifying Party shall pay the amount of such Loss to the
Indemnified Party on demand following the final determination thereof. In the
event of any dispute of a claim, the Indemnifying Party and the Indemnified
Party will proceed in good faith to negotiate a resolution of such dispute,
and if not resolved through negotiations within a period of thirty (30) days,
such dispute shall be resolved by litigation in a court of competent
jurisdiction.
10.4 Survival of Representations and Warranties; Sellers' Liability.
The representations and warranties made in this Agreement shall survive until
the Closing Date and not beyond such date and shall not be extinguished by any
investigation made by or on behalf of any party hereto. In no event shall
Sellers' liability for breach of this Agreement, whether any claim or cause of
action asserted as the basis for such liability arises under contract, in tort
or otherwise, exceed $25 million in the aggregate.
10.5 Termination of Indemnification. The obligations to indemnify and
hold harmless any party pursuant to Section 10.2 shall terminate on the date
that is 12 months after the Closing Date (the "Indemnity Termination Date").
If, prior to the Indemnity Termination Date, an Indemnified Party shall have
given notice to the Indemnifying Party of a claim for indemnification then the
right to indemnification with respect to such claim shall remain in effect
without regard to when such matter shall have been finally determined.
10.6 Limitations on Indemnification. The indemnification provided for
in Section 10.2 shall be subject to the following limitations:
(a) Buyer shall not be obligated to pay any amounts for
indemnification under Section 10.2(a) until the aggregate indemnification
payments equal $1.25 million (the "Basket Amount"), whereupon Buyer shall be
obligated to pay all amounts in excess of the Basket Amount up to $25 million.
Buyer shall be obligated to pay any amounts for indemnification under Sections
10.2(b) and 10.2(c) from the first dollar of Loss in full up to $25 million.
(b) In no event shall Buyer's indemnification obligations under this
Agreement exceed $25 million.
(c) The indemnification provided for in this Article 10 shall be the
exclusive right and remedy of Sellers with respect to any claim or cause of
action based upon, relating to or arising out of this Agreement or otherwise
in respect of the transactions contemplated hereby, whether such claim or
43
cause of action arises out of any contract, tort or otherwise and no such
claim or cause of action shall be enforceable unless made in accordance with
the procedures, and within the time periods, set forth in this Article 10.
Notwithstanding the foregoing sentence, and the second sentence of Section
10.4, either party shall be entitled to any additional remedies that may be
available under law or equity for a breach of a representation or warranty to
the extent such party can demonstrate fraud or willful or knowing
misrepresentation by the other party in a non-appealable final action before a
court of competent jurisdiction.
ARTICLE 11
MISCELLANEOUS
11.1 Expenses. Except as set forth in this Agreement and whether or
not the transactions contemplated hereby are consummated, each party hereto
shall bear all costs and expenses incurred or to be incurred by such party in
connection with this Agreement and the consummation of the transactions
contemplated hereby. As between Buyer and Sellers, Sellers shall bear all
costs of any Persons (other than Buyer, its agents or Affiliates), entitled to
reimbursement by the Bankruptcy Court.
11.2 Assignment. Neither this Agreement nor any of the rights or
obligations hereunder may be assigned by Sellers without the prior written
consent of Buyer, or by Buyer without the prior written consent of Sellers,
provided, that Buyer may assign its rights hereunder to one or more
wholly-owned Subsidiaries of Buyer, which assignment shall not relieve Buyer
of its obligation hereunder. Subject to the foregoing, this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
11.3 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of Seller and Buyer, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
Person any rights, benefits or remedies of any nature whatsoever under or by
reason of this Agreement except as expressly set forth herein. Without
limiting the foregoing, no direct or indirect holder of any equity interests
or securities of either Seller or Buyer (whether such holder is a limited or
general partner, member, stockholder or otherwise), nor any Affiliate of
either Seller or Buyer, nor any Representative, or controlling Person of each
of the parties hereto and their respective Affiliates, shall have any
liability or obligation arising under this Agreement or the transactions
contemplated hereby.
11.4 Notices. All notices, demands, requests, consents, approvals or
other communications (collectively, "Notices") required or permitted to be
given hereunder or that are given with respect to this Agreement shall be in
writing and shall be personally served, delivered by a nationally recognized
overnight delivery service with charges prepaid, or transmitted by hand
delivery, or facsimile, addressed as set forth below, or to such other address
as such party shall have specified most recently by written Notice. Notice
shall be deemed given on the date of service or transmission if personally
served or transmitted by facsimile with confirmation of receipt; provided,
that if delivered or transmitted on a day other than a Business Day or after
normal business hours, notice shall be deemed given on the next Business Day.
Notice otherwise sent as provided herein shall be deemed given on the next
Business Day following timely deposit of such Notice with an overnight
delivery service:
44
If to any Seller: National Steel Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Senior Vice President and Chief Financial Officer
Tel: ▇▇▇.▇▇▇.▇▇▇▇
Fax: ▇▇▇.▇▇▇.▇▇▇▇
With copies to: National Steel Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior Vice President,
General Counsel and Secretary
Tel: ▇▇▇.▇▇▇.▇▇▇▇
Fax: ▇▇▇.▇▇▇.▇▇▇▇
and
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois)
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telephone: ▇▇▇.▇▇▇.▇▇▇▇
Fax: ▇▇▇.▇▇▇.▇▇▇▇
If to Buyer: United States Steel Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
President
Tel: ▇▇▇.▇▇▇.▇▇▇▇
Fax: ▇▇▇.▇▇▇.▇▇▇▇
With copies to: United States Steel Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Assistant General Counsel
Tel: ▇▇▇.▇▇▇.▇▇▇▇
Fax: ▇▇▇.▇▇▇.▇▇▇▇
and
45
▇▇▇▇▇▇, ▇▇▇▇▇ & Bockius LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Tel: ▇▇▇.▇▇▇.▇▇▇▇
Fax: ▇▇▇.▇▇▇.▇▇▇▇
Rejection of or refusal to accept any Notice, or the inability to deliver any
Notice because of changed address of which no Notice was given, shall be
deemed to be receipt of the Notice as of the date of such rejection, refusal
or inability to deliver.
11.5 Choice of Law. This Agreement shall be construed and
interpreted, and the rights of the parties shall be determined, in accordance
with the substantive laws of the State of Delaware, without giving effect to
any provision thereof that would require the application of the substantive
laws of any other jurisdiction, except to the extent that such laws are
superseded by the Bankruptcy Code.
11.6 Entire Agreement; Amendments and Waivers. This Agreement, the
Confidentiality Agreement and all agreements entered into pursuant hereto and
all certificates and instruments delivered pursuant hereto and thereto
constitute the entire agreement between the parties hereto pertaining to the
subject matter hereof and supersede all prior agreements, understandings,
negotiations, and discussions, whether oral or written, of the parties. This
Agreement may be amended, supplemented or modified, and any of the terms,
covenants, representations, warranties or conditions may be waived, only by a
written instrument executed by the Buyer and the Company, or in the case of a
waiver, by the party waiving compliance. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar), and no such waiver shall constitute
a continuing waiver unless otherwise expressly provided.
11.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument. Counterparts to this
Agreement may be delivered via facsimile. In proving this Agreement, it shall
not be necessary to produce or account for more than one such counterpart
signed by the party against whom enforcement is sought.
11.8 Invalidity. If any one or more of the provisions contained in
this Agreement or in any other instrument referred to herein, shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, the
parties shall use their reasonable efforts, including the amendment of this
Agreement, to ensure that this Agreement shall reflect as closely as
practicable the intent of the parties hereto on the date hereof.
11.9 Headings. The table of contents and the headings of the Articles
and Sections herein are inserted for convenience of reference only and are not
intended to be a part of, or to affect the meaning or interpretation of, this
Agreement.
11.10 Exclusive Jurisdiction. Without limiting any party's right to
appeal any order of the Bankruptcy Court, (a) the Bankruptcy Court shall
retain exclusive jurisdiction to enforce the terms of this Agreement and to
decide (insofar as they relate to Sellers) any claims or disputes which may
46
arise or result from, or be connected with, this Agreement, any breach or
default hereunder, or the transactions contemplated hereby, and (b) any and
all claims, actions, causes of action, suits and proceedings related to the
foregoing shall be filed and maintained only in the Bankruptcy Court, and the
parties hereby consent to and submit to the jurisdiction and venue of the
Bankruptcy Court and shall receive Notices at such locations as indicated in
Section 11.4.
11.11 WAIVER OF RIGHT TO TRIAL BY JURY. SELLERS AND BUYER HEREBY
WAIVE TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT THEY MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
11.12 Beneficiaries. Nothing in this Agreement, express or implied,
is intended to confer upon any other Person any rights or remedies of any
nature under or by reason of this Agreement, except as expressly provided
herein.
11.13 Counting. If the due date for any action to be taken under this
Agreement (including the delivery of Notices) is not a Business Day, then such
action shall be considered timely taken if performed on or prior to the next
Business Day following such due date.
11.14 Preparation of this Agreement. Buyer and Sellers hereby
acknowledge that (i) Buyer and Sellers jointly and equally participated in the
drafting of this Agreement and all other agreements contemplated hereby, (ii)
Buyer and Sellers have been adequately represented and advised by legal
counsel with respect to this Agreement and the transactions contemplated
hereby, and (iii) no presumption shall be made that any provision of this
Agreement shall be construed against either party by reason of such role in
the drafting of this Agreement and any other agreement contemplated hereby.
[Remainder of Page Intentionally Left Blank]
47
IN WITNESS WHEREOF, this Asset Purchase Agreement has been duly
executed and delivered by the duly authorized officers of Sellers and Buyer as
of the date first above written.
UNITED STATES STEEL CORPORATION
By:
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
NATIONAL STEEL CORPORATION
By:
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman of the Board and
Chief Executive Officer
D. W. PIPELINE COMPANY
By:
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Chief
Financial Officer
GRANITE INTAKE CORPORATION
By:
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Chief
Financial Officer
NATIONAL ACQUISITION CORPORATION
By:
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Chief
Financial Officer
NATIONAL CASTER ACQUISITION CORPORATION
By:
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Chief
Financial Officer
NATIONAL CASTER OPERATING COMPANY
By:
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Chief
Financial Officer
NATIONAL CASTING CORPORATION
By:
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Chief
Financial Officer
NATIONAL COATING LIMITED CORPORATION
By:
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Chief
Financial Officer
NATIONAL COATING LINE CORPORATION
By:
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Chief
Financial Officer
NATIONAL MATERIALS PROCUREMENT
CORPORATION
By:
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Chief
Financial Officer
NATIONAL PICKLE LINE CORPORATION
By:
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Chief
Financial Officer
NS HOLDINGS CORPORATION
By:
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Chief
Financial Officer
PROCOIL CORPORATION
By:
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Chief
Financial Officer
NATIONAL STEEL PELLET COMPANY
By:
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Chief
Financial Officer
▇▇▇▇▇ ORE MINING COMPANY
By:
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Chief
Financial Officer
