EXHIBIT 10.22
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ASSET PURCHASE AGREEMENT
Between
WEIRTON STEEL CORPORATION, FW HOLDINGS, INC. and
WEIRTON VENTURE HOLDINGS CORPORATION, as Sellers,
AND
WSC ACQUISITION CORPORATION, as Buyer
Dated as of April 6, 2004
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TABLE OF CONTENTS
PAGE
ARTICLE 1. PURCHASE AND SALE OF THE ACQUIRED ASSETS ............................................................. 2
SECTION 1.1 Transfer of Acquired Assets .................................................................. 2
SECTION 1.2 Excluded Assets .............................................................................. 4
SECTION 1.3 Assumption of Liabilities. ................................................................... 6
SECTION 1.4 Retention of Liabilities. .................................................................... 7
SECTION 1.5 Non-Assignment of Contracts .................................................................. 9
SECTION 1.6 Identification of Additional and Excluded Contracts .......................................... 9
SECTION 1.7 Transition Services Agreement ................................................................ 10
SECTION 1.8 Exclusion of Nonoperating Assets ............................................................. 10
ARTICLE 2. CONSIDERATION ........................................................................................ 10
SECTION 2.1 Total Consideration .......................................................................... 10
SECTION 2.2 Accounts Payable and Payroll Liabilities ..................................................... 11
SECTION 2.3 Directors and Officers Insurance ............................................................. 12
ARTICLE 3. CLOSING AND DELIVERIES ............................................................................... 12
SECTION 3.1 Closing ...................................................................................... 12
SECTION 3.2 Sellers' Deliveries .......................................................................... 13
SECTION 3.3 Buyer's Deliveries ........................................................................... 13
ARTICLE 4. REPRESENTATIONS AND WARRANTIES ....................................................................... 15
SECTION 4.1 Representations and Warranties of Sellers .................................................... 15
SECTION 4.2 Representations and Warranties of Buyer ...................................................... 22
SECTION 4.3 Warranties Are Exclusive. .................................................................... 23
ARTICLE 5. COVENANTS AND OTHER AGREEMENTS ....................................................................... 24
SECTION 5.1 Pre-Closing Covenants of Sellers ............................................................. 24
SECTION 5.2 Pre-Closing Covenants of Buyer ............................................................... 28
SECTION 5.3 Other Covenants of Sellers and Buyer ......................................................... 29
SECTION 5.4 Employment Covenants and Other Undertakings .................................................. 30
SECTION 5.5 Covenants Relating to Offerings, Financings and Securities Law Compliance .................... 33
SECTION 5.6 Administration of Payroll Liabilities ........................................................ 34
SECTION 5.7 Ownership and Use of Weirton Steel Name ...................................................... 35
ARTICLE 6. TAXES ................................................................................................ 36
SECTION 6.1 Taxes Related to Purchase of Acquired Assets ................................................. 36
SECTION 6.2 Cooperation on Tax Matters ................................................................... 36
SECTION 6.3 Allocation of Total Consideration ............................................................ 37
ARTICLE 7. CONDITIONS PRECEDENT TO PERFORMANCE BY PARTIES ....................................................... 37
SECTION 7.1 Conditions Precedent to Performance by Sellers ............................................... 37
SECTION 7.2 Conditions Precedent to the Performance by Buyer ............................................. 38
ARTICLE 8. TERMINATION .......................................................................................... 41
SECTION 8.1 Conditions of Termination. ................................................................... 41
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SECTION 8.2 Effect of Termination ........................................................................ 42
ARTICLE 9. SURVIVAL AND INDEMNIFICATION ......................................................................... 42
SECTION 9.1 Survival; Indemnification. ................................................................... 42
SECTION 9.2 Specific Performance ......................................................................... 42
SECTION 9.3 Exclusive Remedy ............................................................................. 43
ARTICLE 10. MISCELLANEOUS ....................................................................................... 43
SECTION 10.1 Allowed Administrative Expenses ............................................................. 43
SECTION 10.2 Further Assurances .......................................................................... 43
SECTION 10.3 Successors and Assigns ...................................................................... 43
SECTION 10.4 Governing Law; Jurisdiction ................................................................. 44
SECTION 10.5 Expenses .................................................................................... 44
SECTION 10.6 Broker's and Finder's Fees .................................................................. 44
SECTION 10.7 Severability ................................................................................ 44
SECTION 10.8 Notices ..................................................................................... 45
SECTION 10.9 Amendments; Waivers ......................................................................... 46
SECTION 10.10 Public Announcements ....................................................................... 46
SECTION 10.11 Entire Agreement ........................................................................... 46
SECTION 10.12 No Third Party Beneficiaries ............................................................... 46
SECTION 10.13 Headings ................................................................................... 47
SECTION 10.14 Counterparts ............................................................................... 47
SECTION 10.15 Joint Drafting ............................................................................. 47
SECTION 10.16 Construction ............................................................................... 47
SECTION 10.17 Schedules .................................................................................. 47
ARTICLE 11. DEFINITIONS ......................................................................................... 47
SECTION 11.1 Certain Terms Defined ....................................................................... 47
SCHEDULES
Schedule 1.1(a) - Real Property
Schedule 1.1(b) - Owned Machinery and Equipment
Schedule 1.1(c) - Acquired Contracts
Schedule 1.1(e) - Inventory and Inventory Locations
Schedule 1.1(f) - Supplies and Supply Locations
Schedule 1.1(g) - Acquired Intellectual Property
Schedule 1.1(i) - Information Technology Owned, Leased or Licensed
Schedule 1.1(j) - Permits
Schedule 1.2(a) - Excluded Assets
Schedule 1.2(f) - Excluded Contracts
Schedule 1.2(k) - Miscellaneous Excluded Assets
Schedule 1.3 - Assumed Liabilities
Schedule 1.3(d) - Real and Personal Property Taxes
Schedule 1.3(e) - Payroll Liabilities
Schedule 1.3(g) - Mechanics Liens
Schedule 1.6(b) - Cure Costs
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Schedule 1.7 - Transition Services Assets
Schedule 1.8 - Nonoperating Assets
Schedule 4.1(d)(i) - WSC Reports not Filed
Schedule 4.1(f) - Subsidiaries
Schedule 4.1(g) - Sellers Consents and Approvals
Schedule 4.1(h) - Compliance with Laws
Schedule 4.1(i) - Litigation
Schedule 4.1(k)(i) - Overdue Intellectual Property Fees
Schedule 4.1(k)(ii) - Violations of Intellectual Property
Schedule 4.1(k)(iii) - Claims and Investigations of Intellectual Property
Schedule 4.1(m) - Permit Violations
Schedule 4.1(n) - Contract Actions; Invalid Contracts
Schedule 4.1(o) - Environmental Matters
Schedule 4.1(p) - Insurance
Schedule 4.1(q) - Real Property Matters
Schedule 4.1(r) - Accounts Receivable
Schedule 4.1(s) - Inventories
Schedule 4.1(t) - Absence of Certain Changes
Schedule 4.1(w) - Status under DIP Agreement and Certain Senior Debt
Schedule 4.2(e) - Buyer's Consents and Approvals
Schedule 4.2(h) - Litigation
Schedule 5.1(a) - Exceptions to Sellers Conduct of Business
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "AGREEMENT"), dated as of April 6,
2004, is made by and among Weirton Steel Corporation, a Delaware corporation
("WSC"), FW Holdings, Inc., a Delaware corporation ("FWH"), Weirton Venture
Holdings Corporation, a Delaware corporation ("WVHC"; collectively with WSC and
FWH; "SELLERS" and each of them individually, "Seller"), and WSC Acquisition
Corporation, a Delaware corporation ("BUYER"). Capitalized terms used in this
Agreement are defined or cross-referenced in Article 12.
BACKGROUND INFORMATION
A. On May 19, 2003 (the "WSC PETITION DATE"), WSC commenced a
voluntary case for reorganization (the "WSC BANKRUPTCY CASE") under chapter 11
of the Bankruptcy Code, 11 U.S.C. Section 101-1330 (the "BANKRUPTCY CODE"), in
the United States Bankruptcy Court for the Northern District of West Virginia
(the "BANKRUPTCY COURT"). Concurrently with the filing of the Bidding Procedures
and Sale Motion (the "FWH PETITION DATE"), FWH has commenced or will commence a
voluntary case for reorganization (the "FWH BANKRUPTCY CASE") under the
Bankruptcy Code in the Bankruptcy Court. Concurrently with the filing of the
Bidding Procedures and Sale Motion (the "WVHC PETITION DATE"; collectively with
the WSC Petition Date and the FWH Petition Date, the "PETITION DATES"), WVHC has
commenced or will commence a voluntary case for reorganization (the "WVHC
BANKRUPTCY CASE"; collectively with the WSC Bankruptcy Case and the FWH
Bankruptcy Case, the "BANKRUPTCY CASES") under the Bankruptcy Code in the
Bankruptcy Court.
B. On February 18, 2004 (the "EXECUTION DATE"), Sellers, ISG
Weirton Inc. ("ISG WEIRTON") and International Steel Group Inc. ("ISG") entered
into an asset purchase agreement, pursuant to which ISG Weirton agreed to
purchase the Acquired Assets and assume the Assumed Liabilities from Sellers
(the "ORIGINAL ISG AGREEMENT"). On February 25, 2004 (the "AMENDMENT DATE"),
Sellers, ISG Weirton and ISG entered into an amended and restated asset purchase
agreement (the "AMENDED ISG AGREEMENT"). The Amended ISG Agreement replaced and
superceded the Original ISG Agreement. The Amended ISG Agreement was further
amended pursuant to the terms of that certain Amendment No. 1 to Amended and
Restated Asset Purchase Agreement by and among Sellers, ISG Weirton and ISG.
C. Buyer desires to purchase the Acquired Assets and assume the
Assumed Liabilities from Sellers, and Sellers desire to sell, convey, assign and
transfer to Buyer the Acquired Assets together with the Assumed Liabilities, all
in the manner and subject to the terms and conditions set forth in this
Agreement and in accordance with sections 105, 363, 365 and 1146 and other
applicable provisions of the Bankruptcy Code.
D. The Acquired Assets and Assumed Liabilities are assets and
liabilities of Sellers that are to be purchased and assumed by Buyer pursuant to
an order, in form and substance satisfactory to Buyer, in its sole discretion
(the "BANKRUPTCY SALE ORDER"), approving such sale pursuant to sections 105, 363
and 365 of the Bankruptcy Code, which order will include the authorization for
the assumption by Sellers and assignment to Buyer of the Acquired Contracts and
liabilities thereunder in accordance with section 365 of the Bankruptcy Code,
all in the manner and subject to the terms and conditions set forth in this
Agreement and the Bankruptcy
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Sale Order and in accordance with other applicable provisions of the Bankruptcy
Code, and the Federal Rules of Bankruptcy Procedure (the "BANKRUPTCY RULES").
E. On March 8, 2004, the Bankruptcy Court entered the Order (A)
Approving Bidding Procedures and, Under Certain Circumstances, Termination
Payments to ISG Weirton Inc., and International Steel Group Inc.; (B) Scheduling
Bidding Deadline, Auction Date and Sale Hearing Date; (c) Establishing Procedure
for Determining Cure Costs; and (D) Fixing Notice Procedures and Approving Form
of Notice (the "BIDDING PROCEDURES ORDER").
F. Buyer acknowledges that: (1) the Buyer's offer to purchase the
Acquired Assets and assume the Assumed Liabilities from Sellers, all in the
manner and subject to the terms and conditions of this Agreement, is subject to
the Sellers' obligations to pay the Break-Up Fee (as that term is defined in the
Bidding Procedures Order) and the Expense Reimbursement (as that term is defined
in the Bidding Procedures Order); and (2) the Buyer will assume those
obligations related to the Sale Assets (as that term is defined in the Bidding
Procedures Order) that arise after the Closing under each of the Active Consent
Orders and Administrative Orders set forth on Schedule 1.1(j) to the Original
Agreement.
G. Buyer's offer to purchase the Acquired Assets and assume the
Assumed Liabilities from Sellers pursuant to this Agreement is being made as a
credit bid with the Notes Trustee and Bonds Trustee in accordance with the terms
of the Bidding Procedures Order and under the authority conferred under Section
363(k) of the Bankruptcy Code.
H. The transactions contemplated by this Agreement are essential
and necessary to the confirmation of the Sellers' liquidating plan of
reorganization.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and their respective
representations, warranties, covenants and agreements herein contained, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Sellers and Buyer hereby agree as follows:
ARTICLE 1. PURCHASE AND SALE OF THE ACQUIRED ASSETS
SECTION 1.1 Transfer of Acquired Assets.
At the Closing, and upon the terms and conditions herein set forth,
Sellers shall sell to Buyer, and Buyer shall acquire from Sellers, all right,
title and interest of Sellers in, to and under the Acquired Assets, free and
clear of all Liens other than Permitted Liens. "ACQUIRED ASSETS" shall mean all
of the properties, assets and rights of Sellers, wherever located, whether real
or personal, tangible or intangible, existing or hereafter acquired and whether
or not reflected on the books or financial statements of Sellers, excluding only
the Excluded Assets, including, without limitation:
(a) all owned real property (the "OWNED REAL PROPERTY"), and
leased real property (the "LEASED REAL PROPERTY," and together
with the Owned Real Property, the "REAL PROPERTY") together
with all appurtenant, subsurface and mineral rights,
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licenses, rights-of-way, privileges and easements belonging
to, appertaining to or benefiting the Real Property in any way
and all Improvements erected thereon, including, without
limitation, the Real Property listed on Schedule 1.1(a);
(b) all (i) owned equipment, machinery, furniture, fixtures and
improvements, tooling and spare parts of Sellers (the "OWNED
MACHINERY AND EQUIPMENT"), including, without limitation, all
Owned Machinery and Equipment that is being stored, repaired,
refurbished, modified or updated at a location other than the
Real Property, including without limitation the Owned
Machinery and Equipment listed on Schedule 1.1(b), and (ii)
rights of Sellers to the warranties and licenses received from
manufacturers and sellers of the Owned Machinery and
Equipment;
(c) those Contracts listed on Schedule 1.1(c) (collectively, the
"ACQUIRED CONTRACTS") and all deposits made under any Acquired
Contract;
(d) all accounts receivable and notes receivable of Sellers (the
"ACCOUNTS RECEIVABLE");
(e) all (i) Inventory of Sellers, including, without limitation,
all (A) Inventory at the locations listed on Schedule 1.1(e),
(B) Inventory held by third parties on a consignment basis,
(C) Inventory held by third-party processors, and (D)
Inventory located on any Real Property, and (ii) rights of
Sellers to the warranties received from suppliers with respect
to such Inventory (to the extent assignable) and related
Claims;
(f) all Supplies of Sellers, including, without limitation, the
Supplies located on any Real Property or at the locations
listed on Schedule 1.1(f);
(g) all Intellectual Property and Technology owned by any Seller
or licensed to any Seller pursuant to an Acquired Contract
(collectively, the "ACQUIRED INTELLECTUAL PROPERTY"),
including, without limitation, all rights to the name "Weirton
Steel Corporation" and the Intellectual Property and
Technology listed on Schedule 1.1(g);
(h) all cars, trucks, forklifts, railcars, other industrial
vehicles and other motor vehicles owned by Sellers ("OWNED
MOTOR VEHICLES");
(i) all computer hardware and software (including, without
limitation, process control software) owned by any Seller or
licensed to any Seller pursuant to an Acquired Contract,
including, without limitation, the hardware and software
listed on Schedule 1.1(i);
(j) all permits, authorizations and licenses (collectively, the
"PERMITS") issued to Sellers by any Government and all pending
applications therefor, including, without limitation, those
Permits set forth on Schedule 1.1(j) all to the extent
assignable;
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(k) except for the Employment Records or such records as may be
subject to the attorney/client privilege, copies or originals
of all books, files, documents and records owned by Sellers
(in whatever format they exist, whether in hard copy or
electronic format), including, without limitation, customer
lists, historical customer files, accounting records, test
results, product specifications, plans, data, studies,
drawings, diagrams, training manuals, engineering data, safety
and environmental reports and documents, maintenance schedules
and operating and production records, inventory records,
business plans, credit records of customers, and marketing
materials;
(l) to the extent assignable, all air emissions credits,
allowances, allotment trading units and other creditable
emission reductions that Sellers have, are entitled to or have
applied for, including, without limitation, any air emissions
where Sellers have credit for or have banked, applied to bank
or agreed to sell or trade;
(m) except as provided in Section 1.2(c) and Section 1.2(d), all
Claims of Sellers;
(n) all of Sellers' rights arising prior to Closing in all
proceeds (whenever received) under any Contract of insurance
or indemnity (or similar agreement) relating to any Acquired
Asset or any Assumed Liability;
(o) all prepaid expenses and deposits made by or on behalf of any
Seller;
(p) all goodwill of Sellers;
(q) all of WVHC's interests in WeBco International, L.L.C. and all
of WSC's interests in W&A Manufacturing Co., LLC; and
(r) except as provided on Schedule 1.2(k), all of the Nonoperating
Assets.
SECTION 1.2 Excluded Assets.
Notwithstanding anything to the contrary in this Agreement, Sellers
shall retain only the properties and assets of Sellers set forth below (all such
properties and assets not being acquired by Buyer being herein referred to as
the "EXCLUDED ASSETS"):
(a) all Sellers' cash held in the bank accounts listed on Schedule
1.2(a) on the Closing Date, and the assets of Sellers set
forth on Schedule 1.2(a) (and any proceeds from the
disposition thereof);
(b) other than as set forth in Section 1.1(n), all of Sellers'
rights to insurance proceeds or other Contracts of insurance
or indemnity (or similar agreement) recoveries, including,
without limitation, Sellers' Directors, Officers and Corporate
Liability Insurance Policy;
(c) all rights to or Claims for refunds, overpayments or rebates
of Taxes, as well as any rights to drawbacks, rebates or
reimbursements related to duties imposed on
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imported steel for periods (or portions thereof) ending on or
prior to the Closing Date;
(d) all Claims (i) arising under the Bankruptcy Code or under
similar state law, (ii) filed or commenced in any court by
Sellers as a plaintiff or (iii) not relating to any Acquired
Asset or any Assumed Liability, including but not limited to
claims arising from or related to sections 544 through 550 of
the Bankruptcy Code;
(e) any asset of Sellers that otherwise would constitute an
Acquired Asset but for the fact that it is conveyed, leased or
otherwise disposed of during the time from the Execution Date
until the Closing Date;
(f) all Contracts that are not Acquired Contracts, including,
without limitation, those listed on Schedule 1.2(f);
(g) all amounts due to Sellers from any Affiliate of any Seller;
(h) all books, files and records owned by Sellers that relate to
current or former employees and other personnel, including,
without limitation, books, files and records that are related
to medical history, medical insurance or other medical matters
and to workers' compensation and to the evaluation, appraisal
or performance of current or former employees and other
personnel of Sellers (collectively, the "EMPLOYMENT RECORDS");
(i) other than as set forth in Section 1.1(g), all (i) shares of
capital stock or equity or other ownership interest of any
Seller in any other Person and (ii) corporate seals, minute
books, charter documents, stock transfer records, record
books, original Tax and financial records and such other
files, books and records relating to any of the Excluded
Assets or to the organization, existence or capitalization of
Sellers or of any other Person;
(j) all Employee Benefit Plans sponsored by any Seller or any of
the Sellers' ERISA Affiliates (collectively, the "SELLERS
CONTROLLED GROUP") or their respective predecessors or with
respect to which the Sellers Controlled Group or their
respective predecessors has made or is required to make
payments, transfers or contributions in respect of any present
or former employees, directors, officers, shareholders,
consultants or independent contractors of any Seller or any of
the Sellers' ERISA Affiliates or their respective predecessors
(collectively, the "SELLERS BENEFIT PLANS") and all insurance
policies, fiduciary liability policies, benefit administration
contracts, actuarial contracts, trusts, escrows, surety bonds,
letters of credit and other contracts primarily relating to
any Sellers Benefit Plan; and
(k) all of the assets set forth on Schedule 1.2(k).
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SECTION 1.3 Assumption of Liabilities.
At the Closing, Buyer shall assume, and thereafter pay, perform and
discharge when due, all of the following liabilities (the "ASSUMED
LIABILITIES"), which Assumed Liabilities are listed by category, including
estimated amounts of such Assumed Liabilities on Schedule 1.3:
(a) all of Sellers' accounts payable that both (i) arise in the
ordinary course of business and (ii) in the case of each
Seller, arise after such Seller's respective Petition Date,
each of which are Allowed Administrative Expense Claims or
reasonably expected to be Allowed Administrative Expense
Claims (collectively, the "ACCOUNTS PAYABLE");
(b) all liabilities and obligations of Sellers first arising after
the Closing relating to the Acquired Contracts, including,
without limitation, all cure costs required to be paid
pursuant to section 365 of the Bankruptcy Code in connection
with the assumption and assignment of the Acquired Contracts
(such cure costs are, collectively, the "CURE COSTS");
(c) all liabilities and obligations of Sellers relating to the
Acquired Assets and arising under any Environmental Law (but
excluding, all liabilities and obligations of Sellers (i) for
any environmental health or safety matter (including any
liability or obligation arising under any Environmental Law)
relating to any property or assets other than the Acquired
Assets, (ii) resulting from the transport, disposal or
treatment of any Hazardous Materials by Sellers on or prior to
the Closing Date to or at any location other than the Real
Property, (iii) relating to any personal injury of any Person
resulting from exposure to Hazardous Materials or otherwise,
where such exposure or other event or occurrence occurred on
or prior to the Closing Date or as a consequence of any event
or occurrence prior to the Closing Date, and (iv) for any fine
or other monetary penalty arising under any Environmental Law
for acts or omissions of Sellers or otherwise relating to acts
or omissions or conditions with respect to the Acquired Assets
as of the Closing Date);
(d) all liabilities and obligations of Sellers as of the Closing
Date for real and personal property Taxes that are set forth
on Schedule 1.3(d);
(e) all liabilities and obligations of Sellers as of the Closing
Date for accrued but unpaid wages and salaries and related
liabilities as described on Schedule 1.3(e) (collectively,
"PAYROLL LIABILITIES");
(f) all liabilities and obligations for damages to Persons or
property (including, without limitation, liabilities and
obligations to repair or replace, or to refund the sales price
(or any other related expenses)) relating to alleged defects
in (i) products sold by, or arising under warranties issued
by, any Seller after such Seller's respective Petition Date or
(ii) buildings or structures that have been manufactured by,
or that incorporate products sold or manufactured by, any
Seller after such Seller's respective Petition Date;
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(g) all liabilities and obligations of Sellers as of the Closing
Date for the mechanics liens that are as a matter of law held
to be valid and properly perfected and that are set forth on
Schedule 1.3(g);
(h) all liabilities and obligations of WSC under the term loan
made pursuant to the Loan Agreement by and between WSC and
Steel Works Community Federal Credit Union ("STEEL WORKS"),
dated August 15, 2002 (the "STEEL WORKS LOAN"); and
(i) all liabilities and obligations of Sellers for the payment of
(A) the D&O Tail Premium and the D&O Deductible under the D&O
Tail Policy and the D&O Policy and (B) the Employment
Practices Premium and the Employment Practices Deductible
under the Employment Practice Policy and the Employment
Practices Tail Policy (collectively, the "INSURANCE
PAYMENTS"), but only to the extent such liabilities and
obligations do not exceed the amount of the Insurance
Payments.
SECTION 1.4 Retention of Liabilities.
Buyer is assuming only the Assumed Liabilities and is not assuming any
other liability or obligation of any Seller of whatever nature, whether
presently in existence or arising hereafter. All such other liabilities and
obligations shall be retained by, and remain liabilities and obligations of,
Sellers (all such liabilities are, collectively, the "EXCLUDED LIABILITIES").
The Excluded Liabilities include, without limitation, the following liabilities
and obligations:
(a) all liabilities and obligations of Sellers relating to
Excluded Assets;
(b) all liabilities and obligations for damages to Persons or
property (including, without limitation, liabilities and
obligations to repair or replace, or to refund the sales price
(or any other related expenses)) relating to alleged defects
in (i) products sold by, or arising under warranties issued
by, any Seller on or prior to such Seller's respective
Petition Date or (ii) buildings or structures that have been
manufactured by, or that incorporate products sold or
manufactured by, any Seller on or prior to such Seller's
respective Petition Date;
(c) all liabilities and obligations of Sellers under any
applicable labor or employment laws, any collective bargaining
Contract or other Contract with any labor union (including but
not limited to any pending grievances), or any employment
Contract, severance Contract or any key employee retention
plan or similar plan;
(d) except as provided in Section 1.3(e) or Section 5.4(h), all
liabilities and obligations of Sellers or the Sellers
Controlled Group to all present and former employees of
Sellers (and their respective spouses and dependents),
including, without limitation, all liabilities for
continuation coverage under any Employee Benefit Plan pursuant
to the requirements of section 4980B of the Code and Part 6 of
Subtitle B of Title I of ERISA ("COBRA");
(e) all liabilities and obligations of Sellers or the Sellers
Controlled Group to all present and former employees of
Sellers (and their respective spouses and
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dependents), including, without limitation, (i) all
liabilities under any Sellers Benefit Plan; (ii) all
liabilities in connection with and with respect to the Worker
Adjustment and Retraining Notification Act of 1988 ("WARN
ACT"); and (iii) all liabilities and obligations of Sellers
relating to employees, former employees, persons on laid-off
or inactive status, or their respective dependents, heirs or
assigns, who have received, who are receiving as of the
Closing Date, or who are or could become eligible to receive
any short-term or long-term disability benefits or any other
benefits of any kind arising out of or related in any way to
the employment of persons by the Sellers, including, without
limitation, benefits or claims under the West Virginia
unemployment compensation laws or any other similar state law,
Title VII of the Civil Rights Act of 1964, as amended, the Age
Discrimination in Employment Act, as amended, the Americans
with Disabilities Act of 1990, or the West Virginia Human
Rights Act;
(f) all liabilities and obligations of Sellers arising pursuant to
the West Virginia Workers' Compensation Act (West Virginia
Codess.23-1 et seq.), or pursuant to the actions, resolutions,
rules or regulations of the West Virginia Workers'
Compensation Commission, including all workers' compensation
claims or suits of any type, whether state or federal claims,
including, without limitation, any actions arising under West
Virginia Codess.23-4-2, actions for employment discrimination,
actions for wrongful opposition to a claim, or any other claim
or benefits of any kind, whether now known or unknown,
whenever incurred or filed, which have occurred or arise from
work-related injuries, diseases, death, exposures, intentional
torts, acts of discrimination or other incidents, acts, or
injuries prior to the Closing Date, or otherwise arising out
of or related to the employment of persons by the Sellers, and
all premiums, assessments or other obligations related in any
way to workers' compensation or work-related liabilities
arising prior to the Closing Date or otherwise arising out of
or related to the activities of Sellers;
(g) all liabilities and obligations of Sellers (i) for any
environmental health or safety matter (including any liability
or obligation arising under any Environmental Law) relating to
any property or assets other than the Acquired Assets, (ii)
resulting from the transport, disposal or treatment of any
Hazardous Materials by Sellers on or prior to the Closing Date
to or at any location other than the Real Property, (iii)
relating to any personal injury of any Person resulting from
exposure to Hazardous Materials or otherwise, where such
exposure or other event or occurrence occurred on or prior to
the Closing Date or as a consequence of any event or
occurrence prior to the Closing Date, and (iv) for any fine or
other monetary penalty arising under any Environmental Law for
acts or omissions of Sellers or otherwise relating to acts or
omissions or conditions with respect to the Acquired Assets as
of the Closing Date); and
(h) all liabilities and obligations of any Seller of whatever
nature whether presently in existence or hereafter arising,
other than the Assumed Liabilities.
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SECTION 1.5 Non-Assignment of Contracts.
Anything contained herein to the contrary notwithstanding, this
Agreement shall not constitute an agreement to assign any Acquired Contract or
any Permit, if, notwithstanding the provisions of sections 363 and 365 of the
Bankruptcy Code, an attempted assignment thereof, without the consent of any
other Person party thereto, would constitute a breach thereof or in any way
negatively affect the rights of either of the Sellers or Buyer (unless the
restrictions on assignment would be rendered ineffective pursuant to sections
9-406 through 9-409, inclusive, of the Uniform Commercial Code, as amended (the
"UCC"), as the assignee of such Acquired Contract or Permit, as the case may be,
thereunder. If, notwithstanding the provisions of sections 363 and 365 of the
Bankruptcy Code, such consent or approval is required but not obtained, Sellers
shall cooperate with Buyer without further consideration, in any reasonable
arrangement designed to provide Buyer with the benefits of or under any such
Acquired Contract or Permit, including, without limitation, enforcement (at
Buyer's expense) for the benefit of Buyer of any and all rights of Sellers
against any Person party to the Acquired Contract or Permit arising out of the
breach or cancellation thereof by such Person; provided, however, that after
Closing, Buyer shall be responsible for all payment and other obligations under,
and for all costs of enforcing rights under, such Acquired Contract or Permit.
Any assignment to Buyer of any Acquired Contract or Permit that shall,
notwithstanding the provisions of sections 363 and 365 of the Bankruptcy Code,
require the consent or approval of any Person for such assignment as aforesaid
shall be made subject to such consent or approval being obtained.
SECTION 1.6 Identification of Additional and Excluded Contracts.
(a) From time to time, at any time prior to the Closing, Buyer may
update Schedule 1.1(c) and/or Schedule 1.2(f) to add or remove
any Contract to or from such schedule. Any Contract added to
Schedule 1.1(c) shall become an Acquired Contract, shall be
deemed an Acquired Asset for all purposes of this Agreement,
and all liabilities and obligations first arising after the
Closing under such Contract shall be Assumed Liabilities for
all purposes of this Agreement. Any Contract removed from
Schedule 1.1(c) and/or added to Schedule 1.2(f) shall become
an Excluded Asset and shall not be an Acquired Contract for
all purposes of this Agreement and all liabilities and
obligations under such Contract shall be Excluded Liabilities
for all purposes of this Agreement.
(b) WSC has provided Buyer with a schedule of Sellers' reasonable
best estimates of Cure Costs for the Acquired Contracts
("SCHEDULE 1.6(b)"). Sellers shall, within three days after
Buyer amends Schedule 1.1(c) in accordance with Section
1.6(a), supplement Schedule 1.6(b) to update the Cure Costs
and update Schedule 4.1(n) to make any required disclosure
with regard to any Contract added to Schedule 1.1(c).
(c) Sellers have filed a Motion to Assume and Assign Certain
Contracts and Unexpired Leases to ISG Weirton, effective as of
the Closing Date, and establish Cure Costs relating thereto.
Sellers shall make such additional filings with the Bankruptcy
Court as may be necessary or desirable to effect the
provisions of this
9
Section 1.6 as they shall apply to Buyer; provided, however,
that all such filings shall contain provisions reasonably
acceptable to Buyer.
SECTION 1.7 Transition Services Agreement.
The parties shall negotiate in good faith, agree on and execute prior
to the Closing the Transition Services Agreement, which Transition Services
Agreement shall set forth the nature, scope, extent and duration of (i) Sellers'
access to and use of the Acquired Assets (including, without limitation, access
to and use of the Acquired Assets listed in Schedule 1.7 as may be necessary to
meet Sellers' legal obligations after Closing and consistent with Buyer's
ability to use the Acquired Assets to operate the business being acquired
pursuant to this Agreement and (ii) Sellers' services, if any, as may be
reasonably requested by Buyer. The Transition Services Agreement shall provide
that the party receiving the services under the Transition Services Agreement
shall reimburse the party providing the services for all reasonable direct
costs, including, without limitation, all third-party costs, incurred by the
providing party in performing the requested services. All services under the
Transition Services Agreement shall be provided without representation or
warranty or liability to the other party.
SECTION 1.8 Exclusion of Nonoperating Assets.
If, prior to Closing, any Seller sells, or enters into a Contract to
sell (which conditions sale only upon approval of the Bankruptcy Court and other
customary closing conditions), any of the assets set forth on Schedule 1.8
(collectively, the "NONOPERATING ASSETS"), for a net realizable value equal to
or greater than the estimated realizable value set forth on Schedule 1.8 for
such Nonoperating Asset, then such Nonoperating Asset will become an Excluded
Asset for all purposes of this Agreement. Sellers shall promptly update Schedule
1.2(k) to include the Excluded Asset. Buyer may, in its sole discretion based
upon information provided to Buyer by Sellers during the ten-day period after
the Execution Date, determine that the net realizable value set forth on
Schedule 1.8 should be increased, and if Buyer so determines it will notify
Sellers of such determination in writing promptly after the end of such period.
ARTICLE 2. CONSIDERATION
SECTION 2.1 Total Consideration.
The aggregate consideration for the sale, transfer, assignment and
conveyance of the Acquired Assets will be:
(a) $164,240,000 (the "AGGREGATE PURCHASE PRICE") consisting of:
(i) cash (A) in the amount necessary to cause the indefeasible
and final payment and satisfaction of the Senior Debt in full
at the Closing, which as of the date of this Agreement is
$132,500,000,1 and (B) in the amount of $6,240,000
(collectively, the "CASH PURCHASE PRICE"); provided, however,
that if the Cash Purchase Price is less than
------------------
(1) This amount reflects a $97.0 million balance on the revolving line of
credit, a $25.0 million balance on the term loan and $10.5 million for
Carveouts, Priming Liens and Sale Costs.
10
the amount of the Senior Debt, plus $6,240,000, then the Cash
Purchase Price will be further increased by the amount
necessary to indefeasibly and finally satisfy the Senior Debt
in cash in full at the Closing, plus $6,240,000 (such
increase, the "PURCHASE PRICE INCREASE"); and (ii) Senior
Secured Notes and/or Secured Pollution Control Bonds
(collectively, the "NOTES AND BONDS") with an aggregate face
amount (plus accrued and unpaid interest through the Petition
Date) in the amount of $25,500,0002 (the "CREDIT BID PURCHASE
PRICE"); and
(b) the assumption by Buyer of the Assumed Liabilities (such
assumption, together with the Aggregate Purchase Price and
Purchase Price Increase, the "TOTAL CONSIDERATION").
The Cash Purchase Price is subject to adjustment as provided
in Section 2.2 of this Agreement. The Aggregate Purchase Price shall be payable
in accordance with Section 3.3(b).
SECTION 2.2 Accounts Payable and Payroll Liabilities.
(a) From time to time, at any time prior to the Closing, upon
delivery of written notice thereof by Buyer to Sellers, Buyer
may remove any Accounts Payable otherwise includable in the
definition of Assumed Liabilities hereunder. Any Accounts
Payable so removed shall become an Excluded Liability for all
purposes of this Agreement.
(b) From time to time, at any time prior to the Closing, upon
delivery of written notice thereof by Buyer to Sellers, Buyer
may elect (in its sole discretion) not to assume the Payroll
Liabilities described on items 6 and 17 of Schedule 1.3(e), if
Buyer determines in its sole discretion that the
administration of such Payroll Liabilities will be unduly
burdensome or that it is reasonably likely that the accrual
for such liabilities will be inadequate to cover the actual
liabilities, and thereafter such Payroll Liabilities will not
be Assumed Liabilities.
(c) At the Closing, the Cash Purchase Price will be adjusted
upward and the Assumed Liabilities portion of the Total
Consideration will be adjusted downward, each on a
dollar-for-dollar basis, to reflect each dollar of Accounts
Payable and Payroll Liabilities so removed.
------------------
(2) This amount is calculated based upon the $158.0 million in cash payment
included in the Amended ISG Agreement, plus the $6,240,000 initial over-bid,
minus the amount of cash necessary to pay the Senior Debt in full at Closing,
minus $6,240,000. If it is determined prior to the Auction by the Sellers that
the cash purchase price contained in the Amended ISG Agreement is less than
$158,000,000, due to working capital and other adjustments, then the Credit Bid
Purchase Price will be decreased to an amount equal to the cash purchase price
payable under the Amended ISG Agreement, plus $6,240,000, minus the Cash
Purchase Price. If it is determined prior to the Auction by the Sellers that the
cash purchase price contained in the Amended ISG Agreement is more than
$158,000,000, due to working capital and other adjustments, then the Credit Bid
Purchase Price will be increased to an amount equal to the cash purchase price
payable under the Amended ISG Agreement, plus $6,240,000, minus the Cash
Purchase Price.
11
SECTION 2.3 Directors and Officers Insurance.
WSC will arrange for the exercise of any option available under the D&O
Policy for the establishment of an extended reporting period, or shall arrange
for a new policy of insurance or an extension of the reporting period for the
existing coverage to become effective at Closing that insures the current and
former directors and officers of WSC and its subsidiaries against claims made
after the Closing Date but before the sixth anniversary thereof with respect to
wrongful acts committed prior to the Closing Date, and which would have been
covered under the D&O Policy had such claims been made prior to the Closing Date
(in either case, the "D&O TAIL POLICY"). WSC will arrange for the exercise of
any option available under the Employment Practices Policy for the establishment
of an extended reporting period, or shall arrange for a new policy of insurance
or an extension of the reporting period for the existing coverage to become
effective at Closing that insures the current and former directors and officers
of WSC and its subsidiaries against claims made after the Closing Date but
before the second anniversary thereof with respect to wrongful acts committed
prior to the Closing Date, and which would have been covered under the
Employment Practices Policy had such claims been made prior to the Closing Date
(in either case, the "EMPLOYMENT PRACTICES TAIL POLICY"). As soon as available
to WSC (but no later than five Business Days prior to the Closing), WSC shall
provide to Buyer a calculation of the maximum deductible amounts that could
apply, after the Closing, to claims pending or made under (i) either or both of
the D&O Policy and the D&O Tail Policy (the aggregate of such amounts being the
"D&O DEDUCTIBLE") and (ii) either or both of the Employment Practices Policy and
the Employment Practices Tail Policy (the aggregate of such amounts being the
"EMPLOYMENT PRACTICES DEDUCTIBLE"). As soon as available to WSC (but no later
than five Business Days prior to the Closing), WSC shall provide to Buyer its
calculations of the (x) D&O Deductible as well as the form of such D&O Tail
Policy and all pertinent information relating to premiums (the "D&O TAIL
PREMIUM") therefor and (y) Employment Practices Deductible as well as the form
of such Employment Practices Tail Policy and all pertinent information relating
to premiums for the Employment Practices Tail Policy (the "EMPLOYMENT PRACTICES
TAIL PREMIUM"). Buyer and WSC will review WSC's calculations and seek to jointly
determine the amount of the Insurance Payments. Buyer may elect, at its expense,
to purchase additional insurance under the D&O Policy, the D&O Tail Policy, the
Employment Practices Policy or the Employment Practices Tail Policy to eliminate
the deductibles thereunder (in which case the amount included in the term
"INSURANCE PAYMENT" will be adjusted accordingly).
ARTICLE 3. CLOSING AND DELIVERIES
SECTION 3.1 Closing.
The consummation of the transactions contemplated hereby (the
"CLOSING") shall take place at the offices of Akin Gump ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇
LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ at 10:00 a.m. (E.S.T.) on the
first Business Day following the satisfaction or waiver by the appropriate party
of all the conditions contained in Article 7 or on such other date or at such
other place and time as may be mutually agreed to by the parties (the "CLOSING
DATE"). All proceedings to be taken and all documents to be executed and
delivered by all parties at the Closing shall be deemed to have been taken and
executed simultaneously and no proceedings
12
shall be deemed to have been taken nor documents executed or delivered until all
have been taken, executed and delivered.
SECTION 3.2 Sellers' Deliveries.
At the Closing:
(a) the sale, transfer, assignment, conveyance and delivery by
Sellers of the Acquired Assets to Buyer shall be effected on
the Closing Date by special or limited warranty deeds; bills
of sale, endorsements, assignments and other instruments of
transfer and conveyance (including an assignment of insurance
proceeds from Sellers as contemplated by Section 1.1(n)
reasonably satisfactory in form and substance to counsel for
Buyer);
(b) Sellers shall deliver three executed counterparts of the
Transition Services Agreement;
(c) each Seller shall deliver a certificate, dated the Closing
Date and signed by each of its President and Chief Executive
Officer and attested by the Secretary of such Seller,
certifying to the accuracy of the matters set forth in Section
7.2(a) and Section 7.2(b);
(d) provided Buyer notifies each Seller in writing of the Leased
Real Property subject to required estoppel certificates and
non-disturbance agreements at least 15 days prior to the
Closing Date, each Seller shall deliver estoppel certificates
and non-disturbance agreements for Leased Real Property deemed
significant by Buyer's lenders; and
(e) Sellers shall deliver to Buyer a release from the Agent, on
its own behalf and on behalf of the Lenders, effective upon
receipt in cash in full of the payments set forth in Section
3.3(b)(i), that releases Buyer from all obligations for the
full and indefeasible satisfaction of the DIP Obligations, in
form and substance satisfactory to Agent and Buyer.
SECTION 3.3 Buyer's Deliveries.
(a) Intentionally omitted.
(b) At the Closing, Buyer shall pay the Cash Purchase Price,
adjusted as provided in Section 2.2, and the Purchase Price
Increase at Closing as follows:
(i) notwithstanding anything to the contrary in this
Agreement, the amount necessary to indefeasibly and
finally satisfy the DIP Obligations in cash in full
shall be paid to Agent (to be applied on behalf of
WSC to Agent's and Lenders' claims against WSC) in
cash or by wire transfer of immediately available
funds to an account designated for such purpose by
Agent, and Buyer hereby waives its right to seek
disgorgement or return from the Agent or any Lender
of such amount (except for any
13
such right that may result from any overpayment of
the amount necessary to indefeasibly and finally
satisfy the DIP Obligations in full);
(ii) pursuant to the terms of an escrow agreement (the
"ESCROW AGREEMENT") to be negotiated by the parties
prior to the Closing Date, Buyer will deposit in
escrow with a financial institution to be agreed upon
prior to Closing, cash in the amount (the "PURCHASE
PRICE ESCROW") equal to the lesser of (A) the
Purchase Price Increase or (B) the amount reflected
on the Payoff Certificate of the claims that are
subject to the Carveouts and any other portion of the
Senior Debt (excluding the DIP Obligations) that has
not then been finally allowed by order of the
Bankruptcy Court (the "UNRESOLVED CLAIMS"), and any
portion of the Purchase Price Escrow not required to
satisfy the Unresolved Claims will promptly be
returned to Buyer in accordance with the terms of the
Escrow Agreement; and
(iii) any remainder (computed by subtracting the amounts
paid pursuant to Section 3.3(b)(i) and (ii) and the
Purchase Price Increase from the sum of the Cash
Purchase Price, shall be paid to WSC, on behalf of
Sellers.
(c) At the Closing, Buyer shall cause the Notes and Bonds
constituting the Credit Bid Purchase Price, together with all
other Senior Secured Notes and Secured Pollution Control Bonds
that are issued and outstanding on the Closing Date, to be
surrendered for cancellation in accordance with the Notes
Indenture and Bonds Indenture. Such surrender and cancellation
will be made (i) through Depository Trust and Transfer Company
("DTTC"), either by the manual delivery of the global Senior
Secured Note and the global Secured Pollution Control Bond, or
by book entry in accordance with DTTC's customary procedures;
or (ii) through such other means as shall be mutually
acceptable to the Sellers, Buyer, Notes Trustee and Bonds
Trustee;
(d) At the Closing or as soon as reasonably practicable
thereafter, Buyer shall deliver to DTTC a certificate issued
in the name of CEDE & Co. and evidencing 985,000 shares (the
"SHARES") of the common stock, $.001 par value per share (the
"COMMON STOCK"), of Weirton Holdings Corporation, a Delaware
corporation ("WHC"), which owns all of the capital stock of
Buyer. Such Shares shall be held by DTTC for the benefit of
the beneficial holders of the Senior Secured Notes and Secured
Pollution Control Bonds as of the close of business on the
Closing Date, and shall be received in exchange for such
Senior Secured Bonds and Secured Pollution Control Bonds and
the Liens securing the payment thereof. DTTC shall be
authorized to allocate the Shares pro rata among the
beneficial holders of the Senior Secured Notes and Secured
Pollution Control Bonds by book entry in accordance with
DTTC's customary procedures. As an alternative to the
provisions set forth in this Section 3.3(d), Buyer, acting in
consultation with the Notes Trustee and the Bonds Trustee, may
elect to distribute the Shares to or for the benefit of the
beneficial holders of the Senior Secured Notes and Secured
14
Pollution Control Bonds through a means of delivery and
distribution different from the means described herein;
(e) At the Closing or as soon as reasonably practicable
thereafter, Buyer shall deliver to the General Unsecured
Creditors Trustee a certificate issued in the name of the
General Unsecured Creditors Trustee and evidencing 15,000
shares (the "ADDITIONAL SHARES") of the Common Stock of WHC.
Such Additional Shares shall be held by the General Unsecured
Creditor Trustee for the benefit of the general unsecured
creditors (the "GENERAL UNSECURED CREDITORS") of the Sellers
as of the close of business on the Closing Date, and shall be
received in exchange for the claims of such General Unsecured
Creditors against the Sellers. As an alternative to the
provisions set forth in this Section 3.3(e), Buyer, acting in
consultation with the General Unsecured Creditors Trustee, may
elect to distribute the Additional Shares to or for the
benefit of the General Unsecured Creditors through a means of
delivery and distribution different from the means described
herein;
(f) At the Closing or as soon as reasonably practicable
thereafter, Buyer shall deliver to the General Unsecured
Creditors Trustee a warrant certificate issued in the name of
the General Unsecured Creditors Trustee and evidencing the
Warrants. Such Warrants shall be held by the General Unsecured
Creditors Trustee for the benefit of the General Unsecured
Creditors as of the close of business on the Closing Date, and
shall be received in exchange for the claims of such General
Unsecured Creditors against the Sellers. As an alternative to
the provisions set forth in this Section 3.3(f), Buyer, acting
in consultation with the General Unsecured Creditors Trustee,
may elect to distribute the Warrants to or for the benefit of
the General Unsecured Creditors through a means of delivery
and distribution different from the means described herein;
(g) At the Closing, Buyer shall deliver three executed
counterparts of the Transition Services Agreement;
(h) At the Closing, Buyer shall execute and deliver to Sellers an
instrument of assignment and assumption of liabilities with
respect to the Assumed Liabilities, reasonably satisfactory in
form and substance to counsel for Sellers; and
(i) At the Closing, Buyer shall each deliver a certificate, dated
the Closing Date, signed by its President and its Secretary,
certifying the accuracy of the matters set forth in Section
7.1(a) and Section 7.1(b).
ARTICLE 4. REPRESENTATIONS AND WARRANTIES
SECTION 4.1 Representations and Warranties of Sellers.
Sellers hereby represent and warrant to Buyer as follows:
(a) Corporate Organization. Each Seller is duly organized, validly
existing and in good standing under the laws of the State of
Delaware (other than with respect to
15
the payment of prepetition franchise and similar Taxes). Each
Seller has all requisite corporate power and authority to own
its properties and assets and to conduct its businesses as now
conducted.
(b) Qualification to Conduct Business. Each Seller is duly
qualified to do business and is in good standing in every
jurisdiction in which the character of the properties owned
or leased by it or the nature of the businesses conducted by
it makes such qualification necessary.
(c) Authorization and Validity. Each Seller has, or on the Closing
Date will have, as applicable, all requisite corporate power
and authority to enter into this Agreement and any Ancillary
Agreements to which such Seller is or will become a party and,
subject to the (i) Bankruptcy Court's entry of the Orders, and
(ii) receipt of all Consents, to perform its obligations
hereunder and thereunder, the execution and delivery of this
Agreement and each Ancillary Agreement to which such Seller is
or will become a party and the performance of such Sellers'
obligations hereunder and thereunder, has been, or on the
Closing Date will be, duly authorized by all necessary
corporate action of such Seller, and no other corporate
proceedings on the part of such Seller are necessary to
authorize such execution, delivery and performance. This
Agreement has been, and each Ancillary Agreement to which each
Seller is or will become a party has been, or on the Closing
Date will be, duly executed by each Seller, and, subject to
the Bankruptcy Court's entry of the Orders, constitute, or
will when executed and delivered constitute, each Seller's
valid and binding obligation, enforceable against each Seller
in accordance with their respective terms. The board of
directors of each Seller has resolved to request that the
Bankruptcy Court approve this Agreement and the transactions
contemplated hereby and each Ancillary Agreement to which such
Seller is or will become a party.
(d) Reports: Financial Statements.
(i) Other than as set forth on Schedule 4.1(d)(i), since
May 19, 2003, WSC has filed all reports, registration
statements, proxy statements and other materials,
together with any amendments required to be made with
respect thereto, that were required to be filed with
the SEC under the Securities Act or the Exchange Act
(all such reports and statements are, collectively,
the "WSC REPORTS"). As of their respective dates, the
WSC Reports complied in all material respects with
all of the statutes and published rules and
regulations enforced or promulgated by the SEC and
did not as of the date of filing thereof (or, if
amended or superseded by a filing prior to the date
of this Agreement, then on the date of such filing)
with the SEC contain any untrue statement of a
material fact or omit to state any material fact
required to be stated therein or necessary in order
to make the statements therein, in light of the
circumstances under which they were made, not
misleading; and
16
(ii) Each of the financial statements (including the
related notes) included in the WSC Reports presents
fairly, in all material respects, the consolidated
financial position and consolidated results of
operations and cash flows of Sellers as of the
respective dates or for the respective periods set
forth therein, all in conformity with GAAP
consistently applied during the periods involved
except as otherwise noted therein, and subject, in
the case of the unaudited interim financial
statements, to the absence of notes and normal
year-end adjustments that have not been and are not
expected to be material in amount. All of the WSC
Reports, as of their respective dates (and as of the
date of any amendment to the respective WSC Report),
complied as to form in all material respects with the
applicable requirements of the Securities Act and the
Exchange Act.
(e) No Conflict or Violation. Subject to the (i) receipt of all
Consents and (ii) the Bankruptcy Court's entry of the Orders,
the execution, delivery and performance by each Seller of this
Agreement and each Ancillary Agreement to which any of them is
or will become a party does not and will not (A) violate or
conflict with any provision of the Certificate of
Incorporation or By-laws of any Seller, (B) violate any
provision of law, or any order, judgment or decree of any
Government applicable to any Seller, (C) result in or require
the creation or imposition of any Liens (other than Permitted
Liens) on any of the Acquired Assets or (D) violate or result
in a breach of or constitute (with due notice or lapse of time
or both) a default under any Contract entered into by any
Seller after such Seller's respective Petition Date, by which
the applicable Seller is bound or to which the assets of the
applicable Seller are subject.
(f) Subsidiaries. Schedule 4.1(f) sets forth a true and complete
list of (i) each Person in which WSC owns, directly or
indirectly, any equity interests other than any equity
interests held by any Employee Benefit Plans and for each such
Person, (ii) all equity owners and the amount of equity owned
by each such equity owner.
(g) Consents and Approvals. Schedule 4.1(g) sets forth a true and
complete list of each consent, waiver, authorization or
approval of any Person and each material declaration to or
filing or registration with any Government that is required to
be obtained by any Seller in connection with the execution and
delivery by it of this Agreement and each Ancillary Agreement
to which it is or will become a party or the performance by it
of its obligations hereunder or thereunder, including, without
limitation, any and all material consents and approvals that
are required to be obtained, or rights of first refusal, first
offer or other similar preferential rights to purchase that
are required to be complied with, in connection with the
assignment or transfer of any Acquired Assets to Buyer in
accordance with the terms of this Agreement; provided,
however, that no Seller shall be required to comply with any
bulk sale rule that relates to any Taxes of any Seller
(collectively, the "CONSENTS").
17
(h) Compliance with Laws. Except as set forth on Schedule 4.1(h),
each Seller is in compliance with all applicable laws,
regulations, orders or other legal requirements to which such
Seller is subject. Except as set forth on Schedule 4.1(h), no
Seller has received written notice of any violation of any
law, regulation, order or other legal requirement and no
Seller is in default with respect to any order, writ,
judgment, award, injunction or decree of any Government.
Except as set forth on Schedule 4.1(h), no Seller is required
to maintain any bond, letter of credit or other similar
financial assurance instrument or to satisfy any financial
assurance obligation.
(i) Litigation. Except as set forth on Schedule 4.1(i), there are
no claims, actions, suits, proceedings, orders or
investigations pending or, to the Knowledge of Sellers,
threatened, before any Government that could reasonably be
expected to affect the ability of any Seller to consummate the
transactions contemplated by this Agreement and each Ancillary
Agreement.
(j) Title to Acquired Assets. Subject to the entry of the
Bankruptcy Sale Order, at the Closing, Sellers will obtain
good and marketable title to or a valid and enforceable right
by Contract to use, the Acquired Assets which shall be
transferred to Buyer free and clear of all Liens other than
Permitted Liens. Except for the Excluded Assets, the Acquired
Assets constitute all of the assets of Sellers and are
adequate to conduct the businesses of Sellers as currently
conducted.
(k) Intellectual Property.
(i) Schedule 1.1(g) is a list of all material items of
Acquired Intellectual Property, and such list
contains a complete and correct description of the
owner, title (in the case of patents and copyrights)
or trademark (in the case of trademarks),
registration or application number, if in existence,
and country of registration or application of each
such listed item of Acquired Intellectual Property.
Except as set forth on Schedule 4.1(k)(i), any and
all renewal and maintenance fees, annuities or other
similar fees due and payable in respect of the
Acquired Intellectual Property required to have been
listed on Schedule 1.1(g) are not overdue.
(ii) To the Knowledge of Sellers, the use of any
Technology (in the businesses conducted by Sellers)
does not infringe, constitute an unauthorized use of
or otherwise violate any Intellectual Property of any
other Person. Except as set forth on Schedule
4.1(k)(ii), to the Knowledge of Sellers, no other
Person is infringing, misappropriating or violating
any of the Acquired Intellectual Property owned by
Sellers.
(iii) Except as set forth on Schedule 4.1(k)(iii), there
has not been and there are no claims or
investigations pending or, to the Knowledge of
Sellers, threatened that (A) challenge the rights of
Sellers in respect of any Acquired Intellectual
Property owned by any Seller, or otherwise challenge
the registration, validity, enforceability, scope or
sole and
18
exclusive ownership of the Acquired Intellectual
Property owned by Sellers or (B) assert that the
operation of the businesses conducted by Sellers or
the use of Technology therein is or will be
infringing or otherwise in violation of any
Intellectual Property of any other Person.
(l) Information Technology. Together, Schedule 1.1(c) and Schedule
1.1(i), set forth a true and complete list of all material
items of hardware, software, databases, computer equipment and
other information technology, owned, leased or licensed by any
Seller (collectively, the "INFORMATION TECHNOLOGY"). Schedule
1.1(i) includes a true and complete list of all Contracts to
which any Seller is a party relating to the current use of the
Information Technology. Subject to receipt of the Consents,
and except for the Excluded Assets, upon consummation of the
transactions contemplated by this Agreement and the Ancillary
Agreements, Buyer will own, or have a valid and enforceable
right by Contract to use, all of the Information Technology
that is necessary to operate the businesses conducted by
Sellers.
(m) Permits. Schedule 1.1(j) sets forth a true and complete list
of all Permits, and all pending applications therefor held by
any Seller. Except as set forth on Schedule 4.1(m), each
such Permit has been duly obtained, is valid and in full force
and effect, and is not subject to any pending or, to the
Knowledge of Sellers, threatened administrative or judicial
proceeding to revoke, cancel, suspend or declare such Permit
invalid in any respect. None of the operations of the
businesses conducted by Sellers are being conducted in a
manner that violates any of the terms or conditions under
which any Permit was granted. Subject to the receipt of the
Consents, the consummation of the transactions contemplated by
this Agreement and the Ancillary Agreements will not result in
the termination or suspension of any such Permit.
(n) Contracts. Schedule 1.6(b) sets forth all Cure Costs for each
Acquired Contract set forth on Schedule 1.1(c). Except as set
forth on Schedule 4.1(n) and except for those defaults that
will be cured in accordance with the Bankruptcy Sale Order, no
Seller, and no other party to any Acquired Contract, has
commenced any action against any of the parties to such
Acquired Contract or given or received any written notice of
any default or violation under any Acquired Contract that has
not been withdrawn or dismissed. Except as set forth on
Schedule 4.1(n), each Acquired Contract is, or will be at the
Closing, valid, binding and in full force and effect for the
benefit of Buyer in accordance with its terms, except as may
be limited by bankruptcy or other laws affecting creditors'
rights and by equitable principles.
(o) Environmental Matters. To the Knowledge of Sellers, except as
set forth on Schedule 4.1(o):
(i) there has been no release, threatened release, spill,
leak, discharge or emission of any Hazardous
Materials to the air, surface water, groundwater or
soil of the Real Property requiring corrective,
response
19
or remedial action under, or that is a violation of,
any applicable Environmental Laws;
(ii) there are no pending or threatened Claims or
investigations that affect or apply to the Real
Property or the Acquired Assets and that relate in
any way to any Environmental Laws; and
(iii) Sellers have provided or made available to Buyer
copies of all information in possession of Sellers or
under the control of Sellers relating to the presence
or migration of Hazardous Materials on, in or under
the Real Property and the compliance with applicable
Environmental Laws associated with activities
conducted with respect to the Acquired Assets.
(p) Insurance. Schedule 4.1(p) sets forth a correct and complete
list of all current insurance policies covering any Seller and
a summary of each such policy, including any limits of
coverage, deductibles and premiums applicable to such policy.
Except as set forth on Schedule 4.1(p), all premiums required
to be paid under each insurance policy required to be set
forth on Schedule 4.1(g) have been paid when due, and all such
policies are in full force and effect.
(q) Real Property. Except as set forth on Schedule 4.1(g), Sellers
have not received any notice of (i) default from a landlord of
any Leased Real Property that might adversely affect the use
of any Leased Real Property as currently used by any Seller;
or (ii) threatened or contemplated condemnation or eminent
domain proceedings that might adversely affect the use of any
Real Property as currently used by any Seller. No Seller is a
"foreign person" within the meaning of section 1445(f)(3) of
the Code.
(r) Accounts Receivable. Except as set forth on Schedule 4.1(r),
all Accounts Receivable of Sellers have been properly recorded
on the books and records of Sellers in accordance with GAAP
consistently applied by Sellers in the ordinary course.
(s) Inventories. Except as set forth on Schedule 4.1(s), the
inventories of Sellers have been properly recorded on the
books and records of Sellers in accordance with GAAP
consistently applied by Sellers in the ordinary course.
(t) Absence of Certain Changes. Except as set forth on Schedule
4.1(t), since May 19, 2003, the businesses of Sellers have
been conducted in all respects in the ordinary course, and
there has not been:
(i) any material damage, destruction or other casualty or
loss (whether or not covered by insurance) affecting
any of the Acquired Assets or any portion thereof
that has not been repaired; or
(ii) any sale or other disposition of any assets
(including, without limitation, discounting of
accounts receivable) used or useful in the businesses
of
20
Sellers, other than sales of inventory in the
ordinary course of business consistent with Sellers'
past practice.
(u) Public Utility Matters. No Seller is subject to regulation by
any Government as a "public utility," an "electric utility," a
"gas utility," a "public utility holding company," a "holding
company," an "electrical corporation" or as a subsidiary or
affiliate of any of the foregoing, under (A) the Public
Utility Holding Company Act of 1935, as amended, the Federal
Power Act, as amended and the Public Utility Regulatory
Policies Act of 1978, as amended or (B) any similar Government
requirement.
(v) Coal Act. No Seller has any potential liability or obligation
of any nature, contingent or otherwise (including, without
limitation, any control group liability and liability as a
successor or as a successor-in-interest), arising under the
Coal Industry Retiree Health Benefit Act of 1992, 26 U.S.C.
Sections 9701-9722.
(w) DIP Agreement.
(i) Concurrently with the execution and delivery of this
Agreement, Sellers have provided Buyer with true and
complete copies of the DIP Agreement, the DIP Order,
the current budget approved by the Agent and the
Lenders and the most current borrowing base
certificate provided by WSC to the Agent. As of the
Execution Date, the amount required to satisfy the
DIP Obligations in full is $162,704,565. Schedule
4.1(w) lists all Priming Liens that are senior in
payment to Sellers' obligations under the DIP
Agreement and Sellers' best estimate as of the
Amendment Date of the projected amount of the Priming
Liens, the Carveouts (by category) and the Sale Costs
(by category) as of the Closing Date. Except for the
Priming Liens, the Carveouts and the Sale Costs,
Sellers have not incurred any Indebtedness or any
other obligation that ranks senior to or pari passu
with Sellers' obligations under the DIP Agreement.
(ii) Except as described on Schedule 4.1(w), no event or
condition has occurred that constitutes or would,
with the lapse of time or the giving of notice, or
both, constitute a "Default" or "Event of Default"
under the DIP Agreement.
(iii) All consents of the Agent or the Lenders required
under the DIP Agreement to Sellers' execution and
delivery of this Agreement, the consummation of the
transactions contemplated hereby and Sellers'
performance of their obligations hereunder have been
obtained.
(iv) Since February 17, 2004, Availability as evidenced by
WSC's borrowing base certificate has been greater
than $5,000,000 but less than $30,000,000.
21
(v) WSC has not requested, and the Agent and the Lenders
have not made, any Overadvance or Collateral
Protection Loan.
(vi) The budget referred to in Section 4.1(w)(i) contains
the true and correct budget for Sellers' professional
fees and expenses related to the Bankruptcy Case (as
defined in the DIP Agreement) as approved by the
Bankruptcy Court, the Agent and the Lenders.
(vii) Schedule 4.1(w) lists all Letters of Credit and LC
Guaranties that are outstanding under the DIP
Agreement.
SECTION 4.2 Representations and Warranties of Buyer.
Buyer hereby represents and warrants to Sellers as follows:
(a) Corporate Organization. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power and
authority to own its properties and assets and to conduct its
businesses as now conducted.
(b) Qualification to Conduct Business. Buyer is duly qualified to
do business as a foreign corporation and is in good standing
in every jurisdiction in which the character of the properties
owned or leased by it or the nature of the businesses
conducted by it makes such qualification necessary.
(c) Authorization and Validity. Buyer has, or on the Closing Date
will have, all requisite corporate power and authority to
enter into this Agreement and any Ancillary Agreement to which
Buyer is or will become a party and to perform its obligations
hereunder and thereunder. The execution and delivery of this
Agreement and any Ancillary Agreement to which Buyer is or
will become a party and the performance of Buyer's obligations
hereunder and thereunder have been, or on the Closing Date
will be, duly authorized by all necessary corporate action by
the Board of Directors of Buyer, and no other corporate
proceedings on the part of Buyer are necessary to authorize
such execution, delivery and performance. This Agreement has
been, and any Ancillary Agreement to which Buyer is or will
become a party has been, or on the Closing Date will be, duly
executed by Buyer and constitute, or will constitute, when
executed and delivered, Buyer's valid and binding obligations,
enforceable against it in accordance with their respective
terms except as may be limited by bankruptcy or other laws
affecting creditors' rights and by equitable principles.
(d) No Conflict or Violation. Subject to the receipt of the
consents set forth on Schedule 4.2(e), the execution, delivery
and performance by Buyer of this Agreement and any Ancillary
Agreement to which Buyer is or will become a party do not and
will not (i) violate or conflict with any provision of the
Certificate of Incorporation or Bylaws of Buyer, (ii) violate
any provision of law, or any order, judgment or decree of any
court or Government applicable to Buyer or (iii) violate or
result in a breach of or constitute (with due notice or lapse
of
22
time or both) a default under any Contract to which Buyer is
party or by which Buyer is bound or to which any of Buyer's
properties or assets is subject.
(e) Consents and Approvals. Schedule 4.2(e) sets forth a true and
complete list of each consent, waiver, authorization or
approval of any Person and each declaration to or filing or
registration with any Government that is required in
connection with the execution and delivery by Buyer of this
Agreement and each Ancillary Agreement to which Buyer is or
will become a party or the performance by Buyer of its
obligations hereunder or thereunder.
(f) Adequate Assurances Regarding Acquired Contracts. Buyer is
capable of satisfying the conditions contained in sections
365(b)(1)(C) and 365(f)(2)(B) of the Bankruptcy Code with
respect to the Acquired Contracts.
(g) Intentionally Deleted.
(h) Litigation. Except as set forth on Schedule 4.2(h), there are
no claims, actions, suits, proceedings or investigations
pending or, to the Knowledge of Buyer, threatened, before any
federal or state court, Government or Person brought by or
against Buyer, or any Related Person of Buyer that could
reasonably be expected to affect the ability of Buyer to
consummate the transactions contemplated by this Agreement and
each Ancillary Agreement.
(i) Adequacy of Funds. Buyer has access to sufficient resources to
fund the Total Consideration.
SECTION 4.3 Warranties Are Exclusive.
The parties acknowledge that the representations and warranties
contained in this Article 4 are the only representations or warranties given by
the parties and that all other express or implied warranties are disclaimed.
Without limiting the foregoing, Buyer acknowledges that, except for the
representations and warranties contained in Section 4.1, the Acquired Assets are
conveyed "AS IS," "WHERE IS" and "WITH ALL FAULTS" and that all warranties of
merchantability or fitness for a particular purpose are disclaimed. WITHOUT
LIMITING THE FOREGOING, BUYER ACKNOWLEDGES THAT, EXCEPT FOR THE REPRESENTATIONS
AND WARRANTIES CONTAINED IN SECTION 4.1, SELLERS AND THEIR RELATED PERSONS AND
AFFILIATES HAVE MADE NO REPRESENTATION OR WARRANTY CONCERNING ANY (A) USE TO
WHICH THE ACQUIRED ASSETS MAY BE PUT, (B) FUTURE REVENUES, COSTS, EXPENDITURES,
CASH FLOW, RESULTS OF OPERATIONS, FINANCIAL CONDITION OR PROSPECTS THAT MAY
RESULT FROM THE OWNERSHIP, USE OR SALE OF THE ACQUIRED ASSETS OR THE ASSUMPTION
OF THE ASSUMED LIABILITIES OR (C) OTHER INFORMATION OR DOCUMENTS MADE AVAILABLE
TO BUYER OR ITS AFFILIATES OR RELATED PERSONS.
23
ARTICLE 5. COVENANTS AND OTHER AGREEMENTS
SECTION 5.1 Pre-Closing Covenants of Sellers.
Sellers covenant to Buyer that, during the period from the Execution
Date through and including the Closing Date:
(a) Conduct of Business Before the Closing Date. Unless otherwise
agreed by Sellers and Buyer, Sellers shall conduct their
respective businesses in all material respects in the manner
in which they have been conducted since the WSC Petition Date,
the FWH Petition Date or the WVHC Petition Date, as the case
may be, and shall use commercially reasonable efforts to
preserve intact their respective businesses or organizations
and relationships with third parties. Except as set forth on
Schedule 5.1(a) or as required pursuant to the terms of this
Agreement, without obtaining the prior consent of Buyer to
take any actions not permitted or required by the following
clauses (i) - (xiv), Sellers:
(i) shall not take or agree to commit to take any action
that would make any representation or warranty of any
Seller inaccurate in any material respect at, or as
of any time prior to, the Closing Date;
(ii) shall not offer credit terms or trade promotions to
any customers except in all material respects in a
manner consistent with past practices with respect to
the applicable product lines of WSC or except to the
extent reasonably necessary to be competitive with
competitors' product offerings;
(iii) shall not borrow funds from any Person or declare or
pay dividends, to any Person, except for (A)
intercompany borrowing and related cash management
practices in all material respects in the ordinary
course of business consistent with past practices,
(B) borrowing under the DIP Facility, and (C)
granting or obtaining trade credit terms in the
ordinary course of business;
(iv) shall keep in full force and effect, and pay all
premiums and other amounts due under, the insurance
policies required to be set forth on Schedule 4.1(p);
(v) shall continue to take all actions consistent with
past practice and existing plans to comply, in all
material respects, with Environmental Laws,
including, without limitation, disposal of all
Hazardous Materials;
(vi) shall not make any change in its general pricing
practices or policies or any material change in its
credit or allowance practices or policies, except to
the extent reasonably necessary to be competitive;
(vii) shall not enter into any material Contract or any
material amendment, modification or termination
(partial or complete) of, grant any material
24
waiver under or give any material consent with
respect to, any Contract set forth on Schedule 1.1(c)
or that is otherwise required to be disclosed in the
Schedules to Section 1.1;
(viii) shall not place or impose any Lien other than
Permitted Liens on any material portion of the
Acquired Assets;
(ix) shall not sell or dispose of any Acquired Assets
other than sales of products, inventory and obsolete
equipment in the ordinary course of business;
(x) shall not enter into, amend, modify or terminate, in
any material respect, any Contract with respect to
the Intellectual Property rights of any Person;
(xi) shall not shut down the Number One and Number Four
blast furnaces during the same period of time (the
"WSC SHUTDOWN"); and
(xii) subject to Section 11.2, shall not take any other
action or enter into any other transaction (including
any transactions with Affiliates) other than in a
manner consistent with past practice or other than
the transactions contemplated by this Agreement or
any Ancillary Agreement to which Sellers are party,
or as required in connection with the Bankruptcy
Code.
(b) Cooperation. Sellers shall use commercially reasonable efforts
to (i) obtain the Consents, (ii) take, or cause to be taken,
all action and to do, or cause to be done, all things
necessary or proper, consistent with applicable law, to
consummate and make effective as soon as possible the
transactions contemplated hereby, including, without
limitation, commencing the FWH Bankruptcy Case and the WVHC
Bankruptcy Case and, after such commencement in the case of
FWH and WVHC, assuming and ratifying this Agreement in such
bankruptcy cases, and (iii) assist Buyer in the transfer of or
obtaining any Permits required to own the Acquired Assets.
Sellers acknowledge that Buyer has the right, in cooperation
with Sellers, to take any and all commercially reasonable
actions in order to obtain the Consents without the incurrence
of cost or obligation to Sellers. In addition, Sellers shall
use commercially reasonable efforts to obtain, and assist
Buyer in obtaining, such Consents; provided, however, that (A)
Buyer has no obligation to obtain the Consents (other than to
sign an assumption agreement, pay Cure Costs and provide
adequate assurances as contemplated by this Agreement), (B)
Buyer will not incur any liability under this Agreement or
otherwise for Buyer's failure to take any further actions to
obtain such Consents and (C) in no event will any failure of
Buyer to obtain such Consents be construed as a waiver by
Buyer of any of the conditions set forth in Section 7.2.
(c) Access to Records and Properties. Buyer shall be entitled, at
its expense, and Sellers shall permit Buyer, to conduct such
investigation of the condition
25
(financial or otherwise), businesses, assets, properties or
operations of Sellers as Buyer shall reasonably deem
appropriate. Sellers shall (i) provide Buyer and its Related
Persons full and complete access at any reasonable time to all
the facilities, offices and personnel of Sellers and to all of
the books and records of Sellers, including, without
limitation, to perform field examinations and inspections of
Sellers' inventories and other properties; (ii) cause Sellers'
respective Related Persons to furnish Buyer with such
financial and operating data and other information with
respect to the condition (financial or otherwise), businesses,
assets, properties or operations as Buyer shall reasonably
request; (iii) provide Buyer and the Title Company with all
customary documents, certificates and instruments required by
the Title Company to issue the title insurance contemplated by
Section 7.2(h); and (iv) permit Buyer to make such inspections
and copies thereof as Buyer may require, including, without
limitation, to conduct such environmental assessments and
investigations of the Real Property and surrounding real
property as Buyer or its advisors and consultants may deem
reasonably necessary or appropriate and to conduct sampling
and analysis of environmental media to detect the presence or
confirm the absence of contamination, including any
contamination which may be present in groundwater and the
sources of any such contamination; provided, however, that
Buyer shall use commercially reasonable efforts to prevent any
such investigation from unreasonably interfering with the
operation of the businesses of Sellers. In addition, at
Buyer's expense, Sellers shall (i) consistent with its
anti-trust guidelines, provide Buyer and its Related Persons
with full and complete access to its customers and suppliers
and the opportunity to make cooperative and investigative
sales calls on its customers; (ii) provide Buyer and its
Related Persons office space at its facilities and access to
such office space at all times; and (iii) permit Buyer and its
Related Persons to talk to the employees of any Seller as
Buyer deems appropriate for the purpose of determining the
suitability of such employees for employment by Buyer after
the Closing Date; provided, however, that Buyer shall use
reasonable efforts to prevent any such conversations from
unreasonably interfering with the operations of Sellers'
respective businesses and such employee's duties with Sellers.
(d) Notice of Certain Events. Sellers shall promptly notify Buyer
of, and furnish Buyer any information it may reasonably
request with respect to, the occurrence of any event or
condition or the existence of any fact that would reasonably
be expected to cause any of the conditions to Buyer's
obligations to consummate the transaction(s) contemplated by
this Agreement or by any Ancillary Agreement not to be
fulfilled.
(e) Buyer's Right to Advise. Buyer shall have the right to consult
with, and make specific recommendations to, Sellers regarding
all aspects of management and operations of Sellers and
potential cost-cutting measures that may be implemented prior
to the Closing Date. Sellers agree to consider in good faith,
and in their reasoned business judgment, any such
recommendations and to discuss such recommendations with
Buyer. Notwithstanding the foregoing, nothing in this
Agreement shall give Buyer or its Affiliates, directly or
indirectly, the right to
26
control or direct the management and operations of Sellers
prior to the Closing Date. Prior to the Closing Date, Sellers
shall exercise, consistent with the terms and conditions of
this Agreement, complete control, supervision and
decision-making authority over the management and operations
of Sellers.
(f) Reporting; Payoff Certificate. Sellers will provide Buyer with
periodic reports of the amount of the Senior Debt (including a
break-out of the components thereof) and all other
documentation reasonably requested by Buyer from time to time
prior to the Closing in connection with the determination of
the Aggregate Purchase Price and Sellers' compliance with the
covenants contained in Section 5.1(g). No later than two
Business Days prior to the Closing Date, Sellers will provide
Buyer with a certification of the amount required to
indefeasibly and finally satisfy the Senior Debt in full in
cash (except that for each Unresolved Claim Sellers will
instead certify as to their best estimate of the amount of
such Unresolved Claim as of the Closing Date) (the "PAYOFF
CERTIFICATE"), including a certification from the Agent of the
amount required to indefeasibly and finally satisfy the DIP
Obligations in full in cash on the Closing Date.
(g) Covenant Compliance.
(i) From the Execution Date until the Closing Date, WSC
will comply with all of its covenants under the DIP
Agreement and will not cause or permit to occur any
event or condition that constitutes a "Default" or
"Event of Default" under the DIP Agreement; provided
that (A) WSC's failure to comply with the Minimum
Cumulative EBITDAR, Minimum Monthly EBITDAR,
Cumulative Restructuring Expenses and Individual
Restructuring Expenses covenants listed on Exhibit
8.3 to the DIP Agreement will not be a breach
hereunder (1) if such failure is waived by the Agent
and the Lenders without amendment to the DIP
Agreement; or (2) if such waiver is not made or
obtained, so long as the failure to comply with any
such covenant or covenants does not result in a
material change in the Agent's or the Lenders'
administration of the loans under the DIP Agreement;
and (B) the execution and delivery of this Agreement
by Sellers, and the consummation of the transactions
contemplated hereby, will not be a breach hereunder
notwithstanding Section 8.2.9 and Section 10.1.21 of
the DIP Agreement.
(ii) From the Execution Date until the Closing Date, WSC
will not in any material respect amend or modify the
DIP Agreement or change its administration of its
borrowings thereunder, or permit any such amendment,
modification or change.
(iii) From the Execution Date until the Closing Date, WSC
will not request or permit the issuance of any
additional Letters of Credit or LC Guaranties or
amend, modify or extend any outstanding Letters of
Credit or LC Guaranties.
27
(iv) Nothing in this Agreement, including, without
limitation, the provisions of Section 4.1(w)(iii) and
Section 5.1(g)(i), shall be construed as a waiver by
the Agent or any Lender of any Default or Event of
Default under the DIP Agreement that may be
continuing on the Amendment Date or any Default or
Event of Default under the DIP Agreement that may
occur after the Amendment Date, and the parties
hereto acknowledge that the Agent and the Lenders
have not agreed to forbear with respect to any of
their respective rights or remedies concerning any
Default or Event of Default under the DIP Agreement
that may have occurred or are continuing as of the
Amendment Date or that may occur thereafter.
(h) Cash Sweeps. Sellers will continue to permit daily cash sweeps
of all of Sellers' bank accounts as currently required by the
Agent, and Agent will continue to apply all such cash to
reduce the DIP Obligations. Sellers do not currently own and
will not prior to the Closing Date acquire any cash
equivalents, including, without limitation, any money market
funds, certificates of deposit or similar investment
securities.
(i) Avoidance Claims. At or prior to Closing, the Debtors will
discharge and/or release all Claims with respect to the
Avoidance Actions and will take all actions necessary,
including, without limitation, filing all motions with the
Bankruptcy Court, to effectuate the foregoing.
SECTION 5.2 Pre-Closing Covenants of Buyer.
Buyer covenants to Sellers that, during the period from the date of
this Agreement through and including the Closing Date or the earlier termination
of this Agreement:
(a) Cooperation. Buyer shall use commercially reasonable efforts
to take, or cause to be taken, all action and to do, or cause
to be done, all things necessary or proper, consistent with
applicable law, to consummate and make effective as soon as
possible the transactions contemplated hereby.
(b) Adequate Assurances Regarding Acquired Contracts and Required
Orders. With respect to each Acquired Contract, Buyer shall
provide adequate assurance of the future performance of such
Acquired Contract by Buyer. Buyer shall promptly take such
actions as may be reasonably requested by Sellers to assist
Sellers in obtaining the Bankruptcy Court's entry of the
Bankruptcy Sale Order and any other order of the Bankruptcy
Court reasonably necessary to consummate the transactions
contemplated by this Agreement.
(c) Management of Expenses. Buyer shall use commercially
reasonable efforts to assist Sellers in minimizing the actual
amount of the Payroll Liabilities.
(d) Notice of Certain Events. Buyer shall promptly notify Sellers
of, and furnish Sellers any information it may reasonably
request with respect to, the occurrence of any event or
condition or the existence of any fact that would reasonably
be
28
expected to cause any of the conditions to Sellers'
obligations to consummate the transactions contemplated by
this Agreement or by any Ancillary Agreement not to be
fulfilled.
(e) Environmental Permits. Buyer shall use commercially reasonable
efforts to promptly obtain or consummate the transfer to Buyer
of any Permit required to operate the Acquired Assets under
applicable Environmental Laws and Buyer shall periodically
notify Sellers of the status of such efforts.
SECTION 5.3 Other Covenants of Sellers and Buyer.
(a) Litigation Assistance. From and after the Closing Date, at the
request and at the sole expense of Sellers, Buyer shall use
commercially reasonable efforts to secure the cooperation of
Buyer's employees in Sellers' defense of any postpetition
Claims and in Sellers' prosecution of any Claims.
(b) Improper Receipt of Payment. From and after the Closing Date,
(i) Sellers shall promptly forward to Buyer any and all
payments received by Sellers from customers or any other
Persons that constitute part of the Acquired Assets and (ii)
Buyer shall promptly forward to Sellers any and all payments
received by Buyer from customers or any other Persons that
constitute part of the Excluded Assets.
(c) Management of Expenses. Sellers shall use commercially
reasonable efforts to minimize the actual amount of the
Retained Liabilities and the Assumed Liabilities.
(d) Disclosure Supplements. Sellers, on the one hand, shall notify
Buyer of, and Buyer on the other hand, shall notify Sellers
of, and shall supplement or amend the Schedules to this
Agreement with respect to, any matter that (i) may arise after
the Execution Date and that, if existing or occurring at or
prior to the Execution Date, would have been required to be
set forth or described in the Schedules to this Agreement or
(ii) makes it necessary to correct any information in the
Schedules to this Agreement or in any representation and
warranty of Sellers or Buyer, as applicable, that has been
rendered inaccurate thereby. Each such notification and
supplementation shall be made no later than three days before
the date set for the Closing by the parties. No supplement or
amendment to the Schedules to this Agreement or any delivery
of Schedules after the Execution Date, unless expressly
acknowledged by Buyer or Sellers, as applicable, as a cure or
modification, shall be deemed to cure any inaccuracy of any
representation or warranty made in this Agreement or modify,
affect or diminish Buyer's right to exclude Contracts as
provided in Section 1.6(a) or Buyer's or Sellers' right to
terminate this Agreement pursuant to Section 8.1.
(e) Bulk Sale Compliance. Notwithstanding anything contained in
this Agreement, Buyer hereby waives compliance with any bulk
sale rule that relates to any Taxes of Sellers.
29
(f) Government Consents. Within ten business days following the
date of this Agreement, each of Buyer and WSC will file or
cause to be filed a Notification and Report Form and related
material with the Federal Trade Commission and the Antitrust
Division of the United States Department of Justice under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended, together with all of its implementing regulations
("HSR ACT"), will use its respective reasonable best efforts
to obtain early termination of the applicable waiting period
under all Antitrust Laws and will take all further actions and
make all further filings pursuant to the Antitrust Laws that
may be necessary, proper or advisable. Fees payable to any
Government in connection with filings required by the
Antitrust Laws will be shared equally by Buyer and WSC.
Nothing contained in this Agreement will require Buyer or any
of its Affiliates or Related Persons to enter into any
agreement, consent decree or other commitment requiring Buyer
or any of its Affiliates or Related Persons to (x) divest or
hold separate any assets of Sellers, Buyer or any of their
Affiliates or Related Persons, (y) litigate, pursue or defend
any action or proceeding challenging any of the transactions
contemplated hereby as violative of any Antitrust Laws, or (z)
take any other action. In connection with the foregoing, each
party (a) will promptly notify the other party in writing of
any communication received by that party or its Affiliates or
Related Persons from any Government, and subject to applicable
law, provide the other party with a copy of any such written
communication (or written summary of any oral communication),
and (b) will not participate in any substantive meeting or
discussion with any Government in respect of any filing,
investigation or inquiry concerning the transactions
contemplated by this Agreement unless it consults with the
other party in advance, and to the extent permitted by such
Government, give the other party the opportunity to attend and
participate thereat.
SECTION 5.4 Employment Covenants and Other Undertakings.
(a) Employee Benefits. Except as provided in Section 1.3(e),
Sellers shall retain all liabilities and obligations in
respect of its past, present and future employees under
applicable laws and the Sellers Benefit Plans. Without
limiting the generality of the foregoing or of Section 1.4,
Buyer shall have no liability or obligation whatsoever under
the Sellers Benefit Plans nor shall Buyer assume the
sponsorship of the Sellers Benefit Plans. Unless and until
such Sellers Benefit Plans are terminated, Sellers shall
retain sponsorship and all of its rights and obligations under
all of the Sellers Benefit Plans. Prior to or upon
commencement of employment with Buyer of any employees of
Sellers hired by Buyer as of or after the Closing, Buyer shall
offer such employees and their dependents employee benefits on
such terms and conditions as Buyer may, in its sole
discretion, determine, including, without limitation, such
terms and conditions as Buyer may in its sole discretion agree
with the ISU or with any other labor organization representing
such employees.
(b) Future Employment. Buyer, in its sole discretion, may offer
employment from and after the Closing to such employees or
former employees of Sellers, and on such terms and conditions
as required by an Acquired Contract or as Buyer may
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determine, in its sole discretion, including, without
limitation, such terms and conditions as Buyer may in its sole
discretion agree with the ISU or with any other labor
organization representing such employees.
(c) No Right to Employment. Nothing herein expressed or implied
shall confer upon any of the employees of any Seller, Buyer or
any of their or its respective Affiliates, any rights or
remedies, including any right to employment or continued
employment for any specified period, of any nature or kind
whatsoever under or by reason of this Agreement. Except as
required by law or labor agreement, Buyer shall not be
required to hire any employee of any Seller after the Closing,
and the employment of any such employees may be terminated
after the Closing in accordance with the applicable law or
labor agreement.
(d) Employment Records. Except as otherwise provided in the
Transition Services Agreement and for those records required
by law to be maintained by Buyer, Sellers shall use
commercially reasonable efforts to remove the Employment
Records from the Real Property as soon as practicable after
Sellers no longer require the use of such Employment Records.
Any Employment Records remaining on the Real Property after
Sellers no longer require the use of such Employment Records
may be removed, disposed of or destroyed by Buyer; provided,
however, that Buyer must give Sellers 30 days written notice
before removing, disposing of or destroying such Employment
Records, except as otherwise required by law.
(e) Labor Matters. During the period between the date of this
Agreement and the Closing Date, Buyer and Sellers shall
reasonably cooperate on labor matters to effect the
transactions contemplated by this Agreement and the orderly
transition of the operations of the Acquired Assets from
Sellers to Buyer. Sellers shall comply with any obligations to
bargain with any labor organizations representing their
employees with respect to the transactions contemplated by
this Agreement and/or the effects of such transactions on
their represented employees, in accordance with applicable
law.
(f) Plant Closing Laws. Other than the implementation of layoffs
associated with WSC's current coke shortage, without Buyer's
prior written consent, Sellers shall take no action that
results in a "plant closing" or "mass layoff" within the
definitions of the WARN Act or any applicable state laws prior
to the Closing. At least 60 days prior to the Closing, Sellers
shall provide a contingent notice (in a form subject to the
review and comment of Buyer) to all affected employees or
their labor representatives, as well as appropriate state and
local government officials, in compliance with the WARN Act
and any applicable state laws.
(g) Other Obligations. Except as otherwise required by law,
specified in this Agreement, or otherwise agreed in writing by
Buyer and/or its Affiliates, neither Buyer nor its Affiliates
shall be obligated to provide any severance, separation pay,
or other payments or benefits, including any key employee
retention payments, to any employee of any Seller on account
of any termination of such
31
employee's employment on or before the Closing Date, and such
benefits (if any) shall be payable by Sellers.
(h) Health Insurance Coverage. (i) Sellers shall comply with the
provisions of the Order Authorizing Termination of Benefits
entered on March 15, 2004 by the Bankruptcy Court in
connection with the Bankruptcy Cases.
(ii) Sellers shall, either directly or through a third
party at Sellers' expense, provide all notices that
Sellers' former employees and retirees are entitled
to receive under COBRA in connection with a group
health plan provided by Sellers, subject to the
timely review and comment of Buyer. Notices required
as a result of a qualifying event under Code section
4980B(f)(3) shall be provided promptly after the
qualifying event and shall include information with
regard to an individual's ability to receive the tax
credit provided under Code section 35. Sellers shall,
at Buyer's reasonable request, include with any
notice described in this Section 5.4(h) any materials
requested by Buyer in a timely manner, which
materials shall be subject to Sellers' review and
comment. If the materials included at Buyer's request
with the notice described in this Section 5.4(h)
increase the cost of such notice, Buyer shall be
responsible for paying the amount equal to such
increase in cost.
(iii) Sellers shall take reasonable actions necessary to
ensure that the initial COBRA continuation coverage
elections of its former employees, retirees and their
dependents are reported to Sellers. Sellers shall
maintain records ("COBRA RECORDS") of each of
Sellers' former employees, retirees and their
dependents who elect COBRA continuation coverage as a
result of receiving the notice described in this
Section 5.4(h) or who were receiving COBRA
continuation coverage from Sellers on the Closing
Date. Such COBRA Records shall include (i) the name
and address of the former employee or retiree, (ii)
the specific qualifying event (listed under Code
section 4980B(f)(3)) that entitled the former
employee or retiree and his or her dependents to
elect COBRA continuation coverage, (iii) the date on
which COBRA continuation coverage was elected, (iv)
the type of health plan coverage elected, and (v) the
name of the former employee or retiree's dependents
who elected COBRA continuation coverage.
(iv) Sellers shall provide Buyer with the COBRA Records
after the expiration of the time period during which
Sellers' former employees and retirees are entitled
to elect the COBRA continuation coverage. Beginning
on the later of the Closing Date or 60 days or such
shorter time as the parties may reasonably agree
after Seller provides Buyer with the COBRA Records,
Buyer shall provide the continuation coverage
pursuant to COBRA to any of Sellers' former
employees, retirees or their dependents who are "m &
a qualified beneficiaries" (as defined in 26
C.F.R. Section 54.4980B-9) and who elect such
coverage, if
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entitled to do so. Sellers shall provide the
continuation coverage pursuant to COBRA to any of
Sellers' former employees, retirees and their
dependents until Buyer begins COBRA continuation
coverage for such persons in accordance with this
paragraph.
(i) Employee and Retiree Information. To the extent necessary to
enable Buyer to meet any obligation Buyer may have to any
employees, former employees and retirees of Sellers after the
Closing Date, Sellers shall provide to Buyer, at Buyer's
request, in a format reasonably acceptable to Buyer, the name,
social security number, dates of service, most recent job
position, seniority, and most recent annual salary or wage
rate of each employee, retiree and any former employee with
reemployment or recall rights of Sellers and the name or names
of each such employee's, retiree's and former employee's
spouse and dependents; provided, however, that Sellers shall
be obligated to provide only such information as may be
reflected on Sellers' records. Sellers shall also provide to
Buyer, at Buyer's request, such additional available
information with regard to employees, former employees and
retirees of Sellers as Buyer may reasonably request in
connection with any obligation Buyer may have to such
employees, former employees and retirees of Sellers after the
Closing Date.
SECTION 5.5 Covenants Relating to Offerings, Financings and Securities
Law Compliance.
From and after the date of this Agreement, in connection with (i) any
Offering or (ii) obtaining any debt financing necessary to consummate the
transactions contemplated hereby (the "FINANCING"), Sellers shall (a) cooperate
with Buyer in all reasonable respects in connection with efforts by Buyer to
complete the Financing or the Offering, as the case may be, including with
respect to (x) the preparation and filing with the SEC of a registration
statement or, in the case of any private placement, a private placement
memorandum or similar document ("OFFERING MEMORANDUM") and (y) access to all
financial and other information in possession of Sellers reasonably necessary in
connection therewith upon reasonable advance notice; (b) make available, upon
reasonable advance notice, the senior management of Sellers for their
participation in any "road shows" or other meetings with potential financing
sources or investors for the Financing and any Offering and assist with
responding to questions and inquiries of financing sources and investors
regarding the Financing and any Offering; (c) upon the discovery of the
occurrence of any event which causes any prospectus included in any registration
statement or Offering Memorandum (or amendment or supplement thereto) to contain
any untrue statement of a material fact with respect to Sellers or to omit any
material fact necessary to make the statements therein with respect to Sellers,
in light of the circumstances under which they were made, not misleading,
promptly notify Buyer of such event and use their commercially reasonable
efforts to assist Buyer in preparing and filing with the SEC an appropriate
amendment or supplement to any such registration statement (and any prospectus
contained therein) or Offering Memorandum and, in the case of any registration
statement, filing the same with the SEC; (d) deliver to Buyer all financial
statements of Sellers, including historical audited and/or unaudited
consolidated balance sheets and related combined statements of net income and
cash flows (including selected financial data), for any periods ending on or
prior to the Closing Date, including, without limitation, the one-year period
ended December 31, 2003 and the partial year
33
period ended on the Closing Date, to be included or incorporated into any
registration statement, to the extent required by the Securities Act, and the
Exchange Act (collectively, the "SECURITIES LAWS") to be included therein (or in
the case of a private placement, as would be required for a registered offering
of similar securities), which financial statements and other information shall
comply with the requirements of Regulation S-X, and such other financial
statements and information as otherwise may be requested by any financing source
in connection with the Financing or required under the Securities Laws to be
included in any registration statement or Offering Memorandum not later than
five business days prior to the date such financial statements and information
are so required; (e) if the Securities Laws require financial statements
(including pro forma financial statements) for periods beginning before the
Closing Date to be provided in any registration statement (or in the case of a
private placement, as would be required for a registered offering of similar
securities) that do not conform to the historical financial statements prepared
by Sellers, deliver such financial information and provide Buyer with reasonable
assistance in the preparation of the additional financial statements required by
the Securities Laws not later than five business days prior to the date such
financial statements are so required; (f) use commercially reasonable efforts to
cause Sellers' independent public accountants to conduct all reviews and provide
all financial reports and information required by the Securities Laws, or as may
otherwise be customary for transactions such as any Offering, including
customary "comfort" letters and consents, to be completed in connection with the
preparation of any registration statement or Offering Memorandum; (g) reasonably
assist Buyer with the hosting of one or more meetings with Buyer's prospective
arrangers, agents and lenders in connection with any Offering; (h) reasonably
assist with the preparation of one or more confidential memoranda and other
marketing materials to be used in connection with the syndication of the credit
facilities contemplated by any Offering; and (i) use commercially reasonable
efforts to assist Buyer in obtaining ratings of the credit facilities
contemplated by any debt securities to be issued in any Offering, including,
without limitation, to cause Sellers senior management to meet with applicable
ratings agencies. Buyer shall pay all out-of-pocket expenses reasonably incurred
by Sellers in taking any actions contemplated by this Section 5.5.
SECTION 5.6 Administration of Payroll Liabilities.
WSC shall supply Buyer with such information regarding the Payroll
Liabilities as Buyer may reasonably request. At Buyer's request, WSC shall act
as Buyer's agent for the limited purpose of paying any or all Payroll
Liabilities assumed at the Closing. In such case, Buyer shall notify WSC of
those current and former employees of WSC, and those Payroll Liabilities, for
which WSC shall act as Buyer's agent. As promptly as practicable after such
notice is given, and in any event not less than three Business Days prior to the
date on which any assumed Payroll Liability is due to be paid, WSC shall provide
to Buyer a statement of the gross amount of the Payroll Liabilities and a
breakdown thereof in reasonable detail. WSC shall pay any Payroll Liability
assumed by Buyer on the later to occur of (i) the date on which such payment is
due and (ii) one Business Day after WSC receives from Buyer the funds to pay
such Payroll Liability. At Buyer's request and expense, WSC shall take such
steps as Buyer may reasonably request (including, without limitation,
establishment of one or more separate bank accounts not subject to the control
of any lender of WSC) to segregate and protect funds advanced by Buyer pursuant
to this Section 5.6.
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SECTION 5.7 Ownership and Use of Weirton Steel Name.
(a) Sellers covenant and agree that Sellers shall, and Sellers
shall cause all of their Affiliates which use the Weirton
Steel Name, to pass all required resolutions and to amend
their respective articles or certificate of incorporation or
other organizational documents to change their corporate or
company name to a name that does not include the words
"Weirton Steel" or any name intended or likely to be confused
or associated with any Weirton Steel Name no later than the
Closing Date. Promptly following receipt of confirmation that
each such name change has been effected, Sellers shall provide
to Buyer written proof that each such name change has been
effected.
(b) Sellers acknowledge that the Weirton Steel Name shall be and
remain, subsequent to the Closing, the sole and exclusive
property of Buyer or its Affiliates.
(c) On the Closing Date, Sellers shall grant Buyer an exclusive,
world-wide, royalty-free and irrevocable license to the use of
the Weirton Steel Name.
(d) Subsequent to the Closing, neither Sellers nor any of their
Affiliates shall have any right, title or interest in or to,
and Buyer is not granting Sellers or any of their Affiliates,
a license to use, the Weirton Steel Name.
(e) Sellers agree that, as soon as reasonably practicable, but, in
any event, within ten days following the Closing, no
stationery, purchase order, invoice, receipt or other similar
document containing any reference to the Weirton Steel Name
shall be printed, ordered or produced for use by any Seller or
any of its Affiliates and that Sellers shall, and Sellers
shall cause each of their respective Affiliates to, following
the Closing, cease to use any stationery, purchase order,
invoice, receipt or other similar document containing any
reference to the Weirton Steel Name or shall only use such
stationery, purchase order, invoice, receipt or other similar
document after having deleted, pasted over or placed a sticker
over such references. The obligations in this paragraph (e)
shall not apply (y) to the extent use of the Weirton Steel
Name is required by law or otherwise reasonably required
pending the registration of the change of corporate names (as
set out in this Section 5.7) or (z) to the extent use of the
Weirton Steel Name is reasonably required in order to enable
collection or payment of invoices issued by a Seller or any of
its Affiliates.
SECTION 5.8 Registration Statement.
As soon as reasonably practicable after the date of this Agreement, WHC
shall prepare and cause to be filed with the SEC a registration statement (the
"REGISTRATION STATEMENT") on an appropriate form relating to the offering and
distribution of the Shares, Additional Shares and Warrants, and shall use its
commercially reasonable efforts to cause the Registration Statement to become
effective under the Securities Act within 60 days thereafter (including, without
limitation, appropriate qualification under applicable blue sky or other state
securities laws and appropriate compliance with applicable regulations issued
under the Securities Act and any other
35
governmental requirements or regulations. The provisions of Section 5.5 shall
apply to the Registration Statement with the same effect as if the Registration
Statement was the registration statement described therein.
ARTICLE 6. TAXES
SECTION 6.1 Taxes Related to Purchase of Acquired Assets.
All Taxes, including, without limitation, all state and local Taxes in
connection with the transfer of the Acquired Assets, and all recording and
filing fees (collectively, "TRANSACTION TAXES"), that may be imposed by reason
of the sale, transfer, assignment and delivery of the Acquired Assets and that
are not exempt under section 1146(c) of the Bankruptcy Code, shall be borne by
Buyer. Buyer and Sellers shall cooperate to (a) determine the amount of
Transaction Taxes payable in connection with the transactions contemplated under
this Agreement, (b) provide all requisite exemption certificates and (c) prepare
and file any and all required Tax Returns for or with respect to such
Transaction Taxes with any and all appropriate Government taxing authorities.
SECTION 6.2 Cooperation on Tax Matters.
(a) Buyer and Sellers shall furnish or cause to be furnished to
each other, as promptly as practicable, such information and
assistance relating to the Acquired Assets and the Assumed
Liabilities as is reasonably necessary for the preparation and
filing of any Tax Return, claim for refund or other required
or optional filings relating to Tax matters, for the
preparation for and proof of facts during any Tax audit, for
the preparation for any Tax protest, for the prosecution or
defense of any suit or other proceeding relating to Tax
matters and for the answer to any Government relating to Tax
matters.
(b) Buyer shall retain possession of all accounting, business,
financial and Tax records and information (i) relating to the
Acquired Assets or the Assumed Liabilities that are in
existence on the Closing Date and transferred to Buyer
hereunder and (ii) coming into existence after the Closing
Date that relate to the Acquired Assets or the Assumed
Liabilities before the Closing Date, for a period of at least
three years from the Closing Date. Buyer shall give Sellers
notice and an opportunity to retain any such records in the
event that Buyer determines to destroy or dispose of them
after such period. In addition, from and after the Closing
Date, Buyer shall provide access to Sellers and their Related
Persons (after reasonable notice and during normal business
hours and without charge), to the books, records, documents
and other information relating to the Acquired Assets or the
Assumed Liabilities as Sellers may reasonably deem necessary
to (i) properly prepare for, file, prove, answer, prosecute
and/or defend any such Tax Return, claim, filing, tax audit,
tax protest, suit, proceeding or answer or (ii) administer or
complete any cases under chapter 11 of the Bankruptcy Code of
Sellers. Such access shall include, without limitation, access
to any computerized information retrieval systems relating to
the Acquired Assets or the Assumed Liabilities.
36
SECTION 6.3 Allocation of Total Consideration.
Buyer and Sellers will allocate the Total Consideration among the
Acquired Assets in accordance with a schedule to be reasonably agreed by them
prior to the Closing Date (the "ALLOCATION"). If the parties are not able to
agree upon the Allocation prior to the Closing Date, then Buyer's allocation
shall be the Allocation. The Allocation will be binding upon Buyer and Sellers
and their respective successors and assigns, and none of the parties to this
Agreement will take any position (whether in returns, audits or otherwise) that
is inconsistent with the Allocation. Buyer and Sellers will report the purchase
and sale of the Acquired Assets on all tax returns, including, without
limitation, Form 8594 as provided for in section 1060 of the Code, in accordance
with the Allocation and will cooperate in timely filing with the Internal
Revenue Service their respective Forms 8594.
ARTICLE 7. CONDITIONS PRECEDENT TO PERFORMANCE BY PARTIES
SECTION 7.1 Conditions Precedent to Performance by Sellers.
The obligation of Sellers to consummate the transactions contemplated
by this Agreement is subject to the fulfillment, at or before the Closing, of
the following conditions, any one or more of which (other than the conditions
contained in Section 7.1(c) and Section 7.1(e)) may be waived by Sellers, in
their sole discretion:
(a) Representations and Warranties of Buyer. The representations
and warranties of Buyer made in Section 4.2 of this Agreement,
in each case, shall be true and correct as of the date of this
Agreement and as of the Closing Date as though made by Buyer
again as of the Closing Date, except to the extent (i) such
representations and warranties expressly relate to an earlier
date, in which case such representations and warranties shall
be true and correct on and as of such earlier date, and (ii)
any inaccuracies in such representations and warranties would
not, individually or in the aggregate, reasonably be expected
to result in a Buyer Material Adverse Effect.
(b) Performance of the Obligations of Buyer. Buyer shall have
performed in all material respects all obligations required
under this Agreement or any Ancillary Agreement to which it is
party which are to be performed by it on or before the Closing
Date (except with respect to the obligation to pay the Total
Consideration in accordance with the terms of this Agreement
and any obligations qualified by materiality, which
obligations shall be performed in all respects as required
under this Agreement).
(c) Governmental Consents and Approvals. The Bankruptcy Court
shall have entered the Bankruptcy Sale Order, the Bankruptcy
Sale Order shall be in full force and effect, and no order
staying, reversing, modifying, vacating or amending the
Bankruptcy Sale Order shall be in effect on the Closing Date.
(d) No Violation of Orders. No preliminary or permanent injunction
or other order of any court or Government that declares this
Agreement invalid or unenforceable in
37
any material respect or which prevents the consummation of the
transactions contemplated hereby shall be in effect.
(e) HSR Act. All applicable waiting periods under any Antitrust
Laws shall have expired or been terminated.
(f) No Litigation. There shall not be pending or threatened in
writing by any Government any suit, action or proceeding (i)
challenging or seeking to restrain, prohibit, alter or
materially delay the consummation of any of the transactions
contemplated by this Agreement or (ii) seeking to obtain from
any Seller any damages in connection with the transactions
contemplated hereby.
(g) Workers' Compensation. Sellers shall have received a release
from the West Virginia Workers' Compensation Commission or the
West Virginia Workers' Compensation Fund (collectively, the
"WVWCF") and/or the "Commissioner" (as defined in WVA CSR
Sections 85-11-2.4) or the "Executive Director" (as defined in
WVA CSR Section 85-11-2.10) of, or other confirmation
reasonably satisfactory to Sellers from the WVWCF that it will
not assert, any claims the WVWCF may have against any "person"
(as defined in WVA CSR Section 85-11-3.10)) of any Seller or
any "responsible person" (as defined in WVA CSR Section
85-11-2.9(b)) of any Seller.
(h) Closing Deliveries. Buyer shall have made the deliveries
contemplated under Section 3.3.
SECTION 7.2 Conditions Precedent to the Performance by Buyer.
The obligations of Buyer to consummate the transactions contemplated by
this Agreement are subject to the fulfillment, at or before the Closing, of the
following conditions, any one or more of which (other than the conditions
contained in Section 7.2(c) and Section 7.2(e)) may be waived by Buyer, in its
sole discretion:
(a) Representations and Warranties of Sellers. The representations
and warranties of Sellers made in Section 4.1 of this
Agreement shall be true and correct as of the Execution Date
and as of the Closing Date as though made by Sellers again as
of the Closing Date, except to the extent (i) such
representations and warranties expressly relate to an earlier
date, in which case such representations and warranties shall
be true and correct on and as of such earlier date and (ii)
any inaccuracies in such representations and warranties would
not, individually or in the aggregate, reasonably be expected
to result in a Sellers Material Adverse Effect.
(b) Performance of the Obligations of Sellers. Sellers shall have
performed in all material respects all obligations required
under this Agreement or any Ancillary Agreement to which any
Seller is party to be performed by any Seller on or before the
Closing Date (except with respect to any obligations qualified
by materiality, which obligations shall be performed in all
respects as required under this Agreement).
38
(c) Governmental Consents and Approvals. The Orders shall have
been entered and become Final Orders.
(d) No Violation of Orders. No preliminary or permanent injunction
or other order of any court or Government that declares this
Agreement invalid in any material respect or prevents the
consummation of the transactions contemplated hereby shall be
in effect.
(e) HSR Act. All applicable waiting periods under any Antitrust
Laws shall have expired or been terminated.
(f) No Litigation. There shall not be pending or threatened in
writing by any Government any suit, action or proceeding, (i)
challenging or seeking to restrain, prohibit, alter or
materially delay the consummation of any of the transactions
contemplated by this Agreement, (ii) seeking to obtain from
Buyer or any of its Affiliates any damages in connection with
the transactions contemplated hereby or (iii) seeking to
prohibit Buyer or any of its Affiliates from effectively
controlling or operating any portion of the Acquired Assets.
(g) Third Party Consents and Approvals. Those Consents listed on
Schedule 4.1(g) as being closing conditions shall have been
obtained.
(h) Title Insurance. The Title Company shall have issued (or
advised Buyer in writing that it will issue), upon Buyer's
payment of the cost therefor and all fees and expenses of the
Title Company and upon Sellers' delivery of all customary
documents, certificates and instruments reasonably required by
the Title Company, an ALTA (or local equivalent) owner's
policy of title insurance or a signed marked up binder in
respect thereof, dated the Closing Date for each of the Real
Properties listed on Schedule 1.1(a) as requiring title
insurance, insuring in Buyer or its designee the interest
being acquired by Buyer in each property, subject only to
Permitted Liens (specifically deleting the standard exceptions
other than (i) the standard survey exception except for
properties where Buyer has obtained a survey; and (ii) the
parties-in-possession exception; provided, however, that
Sellers shall nonetheless agree to make a reasonable
knowledge-based representation for the Title Company as to
parties-in-possession as part of the customary title affidavit
requested by the Title Company) and including such
endorsements as are available in the particular states in
which the properties are located and as Buyer or its lenders
may reasonably require, and in each case in an amount not less
than the portion of the Total Consideration allocated to the
property being insured thereunder.
(i) Labor Agreement. The members of the ISU shall have ratified
the collective bargaining agreement between the ISU and Buyer.
(j) No Material Adverse Effect. There shall not have occurred any
event, fact or circumstance that has had, or is reasonably
likely to have, a Sellers Material Adverse Effect.
39
(k) Intentionally Omitted.
(l) Workers' Compensation. Buyer shall have reached an agreement
with the WVWCF (and other relevant parties), which agreement:
(1) will provide that (i) Buyer will enter the WVWCF as a
subscriber with an experience modification factor of .65 that
remains effective until the earlier of (A) July 1, 2005 or (B)
the date that Buyer becomes self-insured for its workers'
compensation risk in the State of West Virginia and (ii) if
Buyer does not become self-insured on or before July 1, 2005,
then as of July 1, 2005, Buyer's experience modification
factor shall be calculated based upon the experience of Buyer
from the period beginning the day after the Closing Date and
ending on July 1, 2005; or (2) shall include such other terms
and conditions as shall be mutually acceptable to Buyer and
the WVWCF.
(m) MABCO Lease. The MABCO Lease shall have been amended on terms
satisfactory to Buyer in its absolute discretion.
(n) Closing Deliveries. Sellers shall have made the deliveries
contemplated under Section 3.2.
(o) Coke Supply Agreement. Buyer shall have assumed WSC's rights
under the Amended Coke Supply Agreement, effective as of
January 1, 2004, by and between United States Steel
Corporation and WSC at a price per net ton for coke shipments
of screened metallurgical blast furnace coke that is
acceptable to Buyer in its absolute discretion.
(p) Amount of Senior Debt. The amount of the Senior Debt
(excluding the DIP Obligations) is not more than $10,500,000.
(q) Assignment of Liens. The Notes Trustee and Bonds Trustee each
shall have executed and delivered to Buyer an instrument (the
"Lien Assignment") pursuant to which the Notes Trustee and
Bonds Trustee shall assign, transfer and convey to Buyer any
and all Liens that have been granted to the Notes Trustee and
Bonds Trustee by any of the Sellers for the purpose of
securing the payment of the Senior Secured Notes and Secured
Pollution Control Bonds. Each such Lien Assignment shall be in
form and substance acceptable to Buyer, the Notes Trustee and
the Bonds Trustee.
(r) Name Change. Sellers shall have provided Buyer written
confirmation acceptable to Buyer evidencing Seller's
compliance with Section 5.7(a).
(s) Registration Statement. The SEC shall have declared the
Registration Statement effective pursuant to the requirements
of the Securities Act.
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ARTICLE 8. TERMINATION
SECTION 8.1 Conditions of Termination.
This Agreement may be terminated only in accordance with this Section
8.1. This Agreement may be terminated at any time before the Closing as follows:
(a) By mutual written consent of Sellers and Buyer;
(b) By WSC, by written notice to Buyer, or by Buyer, by written
notice to WSC, on or after the date that is 180 days after the
date of this Agreement (the "TERMINATION DATE"), subject,
however, to extension by the mutual written consent of Sellers
and Buyer, if the Closing shall not have occurred on or prior
to the Termination Date; provided, however, that a party shall
not have the right to terminate this Agreement under this
Section 8.1(b) if any Seller (in case of termination by WSC)
or Buyer (in case of termination by Buyer) is then in material
breach of this Agreement;
(c) By WSC, by written notice to Buyer, or by Buyer, by written
notice to WSC, if any injunction or other order contemplated
by Section 7.1(d) and Section 7.2(d) shall have become
effective; provided, however, that the party seeking to
terminate this Agreement pursuant to this Section 8.1(c) has
used its commercially reasonable efforts to remove such
injunction or other order;
(d) By WSC, by written notice to Buyer, if WSC has previously
provided Buyer with notice of any inaccuracy of any
representation or warranty contained in Section 4.2 which
inaccuracy could reasonably be expected to result in,
individually or in the aggregate with the results of other
inaccuracies, a Buyer Material Adverse Effect, or a material
failure to perform any covenant of Buyer contained in this
Agreement or any Ancillary Agreement to which Buyer is party,
and Buyer has failed, within 10 days after such notice, to
remedy such inaccuracy or perform such covenant or provide
reasonably adequate assurance to WSC of Buyer's ability, to
remedy such inaccuracy or perform such covenant; provided,
however, that WSC shall not have the right to terminate this
Agreement under this Section 8.1(d) if any Seller is then in
material breach of this Agreement;
(e) By Buyer, by written notice to WSC, if Buyer has previously
provided WSC with notice of any inaccuracy of any
representation or warranty of any Seller contained in Section
4.1, which inaccuracy could reasonably be expected to result
in, individually or in the aggregate with the results of other
inaccuracies, a Sellers Material Adverse Effect, or a material
failure to perform any covenant of any Seller contained in
this Agreement or any Ancillary Agreement to which any Seller
is party, and any Seller has failed, within 10 Business Days
after such notice, to remedy such inaccuracy or perform such
covenant or provide reasonably adequate assurance to Buyer of
such Seller's ability to remedy such inaccuracy or perform
such covenant; provided, however, that Buyer shall not
41
have the right to terminate this Agreement under this Section
8.1(e) if Buyer is then in material breach of this Agreement;
(f) By Buyer, by written notice to WSC, if any event, fact or
circumstance identified in Section 7.2(j) shall have occurred;
provided, however, that Buyer shall not have the right to
terminate this Agreement under this Section 8.1(f) if Buyer is
then in material breach of this Agreement;
(g) By Buyer, by written notice to WSC, if the Bankruptcy Sale
Order (in the form attached as Exhibit A or in other form
satisfactory to Buyer) is not entered by the Bankruptcy Court
within 30 days of the date of this Agreement;
(h) By Buyer, by written notice to WSC, if (i) a WSC Shutdown
occurs or WSC ceases substantially all of its business
operations, or either of the foregoing events is authorized by
WSC's board of directors, (ii) the Bankruptcy Court enters an
order authorizing (A) a WSC Shutdown or a cessation of
substantially all of WSC's business operations or (B) the
liquidation of WSC's estate or (iii) WSC's chapter 11 case is
converted to a chapter 7 case; or
(i) By Buyer, by written notice to WSC on or prior to May 31,
2004, if the members of the ISU have not ratified the
collective bargaining agreement between the ISU and Buyer.
SECTION 8.2 Effect of Termination.
In the event of termination pursuant to Section 8.1, this Agreement
shall become null and void and have no effect (other than Article 8, Article 11
and Article 12, which shall survive termination), with no liability on the part
of Sellers or Buyer, or their respective Affiliates or respective Related
Persons, with respect to this Agreement or any Ancillary Agreement, except for
any liability provided for in this Article 8.
ARTICLE 9. SURVIVAL AND INDEMNIFICATION
SECTION 9.1 Survival; Indemnification.
None of the representations and warranties of Sellers and Buyer made in
this Agreement shall survive the Closing Date, and all of such representations
and warranties shall be extinguished by the Closing. All covenants and
agreements of the parties contained in this Agreement shall survive the Closing,
except that Sellers shall have no monetary obligation to Buyer for breach of any
covenant or agreement. If the Closing occurs, Buyer shall indemnify and hold
harmless Sellers and their respective Affiliates and Related Persons against any
and all losses, liability, expense or damage that result from or arise out of
the Assumed Liabilities.
SECTION 9.2 Specific Performance.
Each party acknowledges that in case of any breach of their covenants
or other obligations, the others would suffer immediate and irreparable harm,
which money damages would be inadequate to remedy, and accordingly, in case of
any such breach each non-breaching
42
party shall be entitled to obtain specific performance and other equitable
remedies, in addition to other remedies provided in this Article 9.
SECTION 9.3 Exclusive Remedy.
Following the Closing Date, the respective parties' sole and exclusive
remedies for any claim arising out of or in connection with this Agreement shall
be those set forth in this Article 9.
ARTICLE 10. MISCELLANEOUS
SECTION 10.1 Allowed Administrative Expenses.
Any and all amounts owed to Buyer by Sellers hereunder or under any
Ancillary Agreement after the date of this Agreement shall constitute allowed
administrative expenses of the Sellers under sections 503(b)(1) and 507(A)(1),
as applicable, of the Bankruptcy Code.
SECTION 10.2 Further Assurances.
At the request and the sole expense of the requesting party, Buyer or
Sellers, as applicable, shall execute and deliver, or cause to be executed and
delivered, such documents as Buyer or Sellers, as applicable, or their
respective counsel may reasonably request to effectuate the purposes of this
Agreement and the Ancillary Agreements.
SECTION 10.3 Successors and Assigns.
(a) Buyer shall have the right to assign to an Affiliate (each, an
"ASSIGNEE") any of its rights or obligations (including the
right to acquire any of the Acquired Assets) and may require
any such Assignee to pay all or a portion of the Aggregate
Purchase Price and/or to assume all or a portion of those
Assumed Liabilities that are both described in Section 1.3 and
relate to the Acquired Assets acquired by the Assignee
("ASSIGNABLE LIABILITIES"). In addition, Buyer shall have the
right to assign to any person or persons other than an
Affiliate (each, an "OTHER ASSIGNEE") any of its rights or
obligations to acquire any of the Nonoperating Assets or the
portion of the Owned Real Property constituting [THE
HEADQUARTERS,] the Owned Real Property located in Jefferson
County, Ohio [AND THE ISLAND] and the personal property
located thereon (including the right to acquire such assets)
and may require any such Other Assignee to pay a portion of
the Aggregate Purchase Price and to assume the Assignable
Liabilities. In the event of any assignment pursuant to this
Section 10.3(a), Buyer shall not be relieved of any liability
or obligation hereunder; provided that, if any Other Assignee
fails to pay the portion of the Aggregate Purchase Price for
which such Other Assignee is obligated, Buyer will be liable
to Sellers for the payment of such amount; and provided
further that Buyer shall, with Sellers' approval, which shall
not be unreasonably withheld, be fully released from such
Assignable Liabilities upon their assumption by an Assignee or
an Other Assignee.
43
(b) Buyer shall have the right to assign this Agreement or any of
its rights or obligations hereunder collaterally to any lender
of Buyer; provided, however, that no such assignment shall
relieve Buyer of its obligations to Sellers hereunder.
(c) Sellers shall not assign this Agreement or any of their rights
or obligations hereunder. This Agreement shall inure to the
benefit of and shall be binding upon the successors and
permitted assigns of the parties hereto.
SECTION 10.4 Governing Law; Jurisdiction.
This Agreement shall be construed, performed and enforced in accordance
with, and governed by, the laws of the State of New York (without giving effect
to the principles of conflicts of laws thereof), except to the extent that the
laws of such State are superseded by the Bankruptcy Code or other applicable
federal law. For so long as Sellers are subject to the jurisdiction of the
Bankruptcy Court, the parties irrevocably elect, as the sole judicial forum for
the adjudication of any matters arising under or in connection with the
Agreement, and consent to the exclusive jurisdiction of, the Bankruptcy Court.
After Sellers are no longer subject to the jurisdiction of the Bankruptcy Court,
the parties irrevocably elect, as the sole judicial forum for the adjudication
of any matters arising under or in connection with this Agreement, and consent
to the jurisdiction of, any state or federal court having competent jurisdiction
over the Borough of Manhattan, New York, New York.
SECTION 10.5 Expenses.
Except as otherwise provided in this Agreement, each of the parties
shall pay its own expenses in connection with this Agreement and the
transactions contemplated hereby, including, without limitation, any legal and
accounting fees, whether or not the transactions contemplated hereby are
consummated. Buyer shall pay the cost of all surveys, title insurance policies
and title reports ordered by Buyer.
SECTION 10.6 Broker's and Finder's Fees.
Each of the parties represents and warrants that it has not engaged any
broker or finder in connection with any of the transactions contemplated by this
Agreement other than ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ whose fees and expenses
shall, as between the parties, be the sole responsibility of Sellers, and other
than Imperial Capital LLC whose fees and expenses shall, as between the parties,
be the sole responsibility of Buyer, and, insofar as such party knows, no other
broker or other Person is entitled to any commission or finder's fee in
connection with any of these transactions.
SECTION 10.7 Severability.
In the event that any part of this Agreement is declared by any court
or other judicial or administrative body to be null, void or unenforceable, said
provision shall survive to the extent it is not so declared, and all of the
other provisions of this Agreement shall remain in full force and effect only
if, after excluding the portion deemed to be unenforceable, the remaining terms
shall provide for the consummation of the transactions contemplated hereby in
substantially the same
44
manner as originally set forth at the later of (a) the date of this Agreement
and (b) the date this Agreement was last amended.
SECTION 10.8 Notices.
(a) All notices, requests, demands, consents and other communications
under this Agreement shall be in writing and shall be deemed to
have been duly given: (i) on the date of service, if served
personally on the party to whom notice is to be given; (ii) on the
day of transmission, if sent via facsimile transmission to the
facsimile number given below; (iii) on the day after delivery to
Federal Express or similar overnight courier or the Express Mail
service maintained by the United States Postal Service addressed
to the party to whom notice is to be given; or (iv) on the fifth
day after mailing, if mailed to the party to whom notice is to be
given, by first class mail, registered or certified, postage
prepaid and properly addressed, to the party as follows:
If to Sellers:
Weirton Steel Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP and: ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Buyer:
WSC Acquisition Corporation and: WSC Acquisition Corporation
c/o Corsair Partners LLC c/▇ ▇▇▇▇▇▇▇ Capital
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - 36th Floor Management, LLC
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Attention: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
45
With a copy to:
Akin Gump ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) Any party may change its address or facsimile number for the
purpose of this Section 10.8 by giving the other parties
written notice of its new address in the manner set forth
above.
SECTION 10.9 Amendments; Waivers.
This Agreement may be amended or modified, and any of the terms,
covenants, representations, warranties or conditions hereof may be waived, only
by a written instrument executed by Buyer and Sellers, or in the case of a
waiver, by the party waiving compliance. Any waiver by any party of any
condition, or of the breach of any provision, term, covenant, representation or
warranty contained in this Agreement, in any one or more instances, shall not be
deemed to be or construed as a furthering or continuing waiver of any such
condition, or of the breach of any other provision, term, covenant,
representation or warranty of this Agreement.
SECTION 10.10 Public Announcements.
Promptly after the date of this Agreement, the parties shall make a
joint press release in form and substance reasonably satisfactory to both of
them regarding the transaction contemplated herein. Thereafter, no party shall
make any press release or public announcement concerning the transactions
contemplated by this Agreement without first coordinating their communications
strategy with the other party, unless a press release or public announcement is
required by law, the rules of any stock exchange or order of the Bankruptcy
Court. If any such announcement or other disclosure is required by law, the
rules of any stock exchange or order of the Bankruptcy Court, the disclosing
party agrees to give the nondisclosing party or parties prior notice of, and an
opportunity to comment on, the proposed disclosure. The parties acknowledge that
Sellers shall file this Agreement with the Bankruptcy Court in connection with
obtaining the Bankruptcy Sale Order and with the SEC.
SECTION 10.11 Entire Agreement.
This Agreement and the Ancillary Agreements contain the entire
understanding between the parties with respect to the transactions contemplated
hereby and supersede and replace all prior and contemporaneous agreements and
understandings, oral or written, with regard to such transactions. Subject to
the provisions of Section 10.17, all Schedules hereto and any documents and
instruments delivered pursuant to any provision hereof are expressly made a part
of this Agreement as fully as though completely set forth herein.
SECTION 10.12 No Third Party Beneficiaries.
Nothing in this Agreement is intended to or shall confer any rights or
remedies under or by reason of this Agreement on any Persons other than Sellers
and Buyer and their respective
46
successors and permitted assigns. Nothing in this Agreement is intended to or
shall relieve or discharge the obligator or liability of any third Persons to
Sellers or to Buyer. This Agreement is not intended and shall not give any third
Persons any right of subrogation or action over or against Sellers or against
Buyer.
SECTION 10.13 Headings.
The article and section headings in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
SECTION 10.14 Counterparts.
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which shall constitute the same agreement.
SECTION 10.15 Joint Drafting.
The parties have participated jointly in the negotiation and drafting
of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement.
SECTION 10.16 Construction.
Any reference to any law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. Any reference to the
singular in this Agreement shall also include the plural and vice versa.
SECTION 10.17 Schedules.
Except as expressly provided herein, the Schedules designated herein
are the Schedules delivered by the Sellers to ISG Weirton and ISG, or delivered
by ISG Weirton and ISG to the Sellers, as the case may be, in connection with
the Original ISG Agreement, and are incorporated herein by reference. Schedule
1.3(e), in the form delivered by the Sellers, and Schedule 4.2(e), in the form
delivered by Weirton ISG or ISG (collectively, the "ORIGINAL SCHEDULES"), are
hereby deleted, and Schedules 1.3(e) and 4.2(e), in the form attached hereto,
are deemed to be substituted for the Original Schedules.
ARTICLE 11. DEFINITIONS
SECTION 11.1 Certain Terms Defined.
As used in this Agreement, the following terms have the following
meanings:
"ACCOUNTS PAYABLE" has the meaning set forth in Section 1.3(a).
47
"ACCOUNTS RECEIVABLE" has the meaning set forth in Section 1.1(d).
"ACQUIRED ASSETS" has the meaning set forth in Section 1.1.
"ACQUIRED CONTRACTS" has the meaning set forth in Section 1.1(c).
"ACQUIRED INTELLECTUAL PROPERTY" has the meaning set forth in Section
1.1(g).
"ADDITIONAL SHARES" has the meaning set forth in Section 3.3(e).
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under direct or indirect
common control with such Person.
"AGENT" has the meaning given that term in the DIP Agreement.
"AGREEMENT" has the meaning set forth in the Preamble.
"AGGREGATE PURCHASE PRICE" has the meaning set forth in Section 2.1.
"ALLOWED ADMINISTRATIVE EXPENSE CLAIM" means a claim under section
503(b) of the Bankruptcy Code entitled to priority under section 507(a)(1) of
the Bankruptcy Code, which is not disputed by Sellers.
"AMENDMENT DATE" has the meaning set forth in Recital B.
"ANCILLARY AGREEMENT" means the Transition Services Agreement.
"ANTITRUST LAWS" means the HSR Act and the other applicable
competition, merger control, antitrust or similar laws or regulations.
"ASSIGNABLE LIABILITIES" has the meaning set forth in Section 10.3(a).
"ASSIGNEE" has the meaning set forth in Section 10.3(a).
"ASSUMED LIABILITIES" has the meaning set forth in Section 1.3.
"AVAILABILITY" has the meaning given that term in the DIP Agreement.
"AVOIDANCE ACTIONS" means all Claims of a Debtor assertable or arising
under chapter 5 of the Bankruptcy Code, including, without limitation, all
preference, fraudulent transfer, and other Claims to avoid a transfer.
"BANKRUPTCY CASES" has the meaning set forth in Recital A.
"BANKRUPTCY CODE" has the meaning set forth in Recital A.
"BANKRUPTCY COURT" has the meaning set forth in Recital A.
"BANKRUPTCY RULES" has the meaning set forth in Recital D.
48
"BANKRUPTCY SALE ORDER" has the meaning set forth in Recital D.
"BIDDING PROCEDURES ORDER" has the meaning set forth in Recital E.
"BOND INDENTURE" means that certain Indenture of Trust dated as of June
18, 2002 between the City of Weirton, West Virginia, and the Bond Trustee,
pursuant to which the Secured Pollution Control Bonds were issued, as in effect
on the date thereof and as amended, supplemented, restated or otherwise modified
from time to time.
"BONDS TRUSTEE" means ▇.▇. ▇▇▇▇▇▇ Trust Company, National Association,
a national banking association, in its capacity as trustee under the Bond
Indenture.
"BUSINESS DAY" means any day other than Saturday, Sunday and any day
that is a legal holiday or a day on which banking institutions in New York City,
New York are authorized by law or other governmental action to close.
"BUYER" has the meaning set forth in the Preamble.
"BUYER MATERIAL ADVERSE EFFECT" means a state of facts, events, change
or effect with respect to Buyer and its subsidiaries that results in a material
adverse effect on the financial condition, business, operations, assets or
liabilities of Buyer and its subsidiaries, taken as a whole, but excludes any
state of facts, event, change or effect caused by events, changes or
developments relating to (A) changes or conditions affecting the steel industry
generally or (B) changes in economic, regulatory or political conditions
generally.
"CARVEOUTS" has the meaning given that term in the DIP Order.
"CASH" means all cash and cash equivalents.
"CASH PURCHASE PRICE" has the meaning set forth in Section 2.1(a).
"CLAIM" means all rights, claims, causes of action, defenses, debts,
demands, damages, obligations, and liabilities of any kind or nature under
contract, at law or in equity, known or unknown, contingent or matured,
liquidated or unliquidated, and all rights and remedies with respect thereto,
including, without limitation, causes of action arising under chapter 5 of the
Bankruptcy Code or similar state statutes.
"CLOSING" has the meaning set forth in Section 3.1.
"CLOSING DATE" has the meaning set forth in Section 3.1.
"COBRA" has the meaning set forth in Section 1.4(d).
"COBRA RECORDS" has the meaning set forth in Section 5.4(h).
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL PROTECTION LOAN" has the meaning given that term in the DIP
Agreement.
49
"COMMON STOCK" has the meaning set forth in Section 3.3(d).
"CONSENTS" has the meaning set forth in Section 4.1(g).
"CONTRACT" means any written contract, agreement, lease or sublease,
license or sublicense, instrument, indenture, commitment or undertaking.
"CURE COSTS" has the meaning set forth in Section 1.3(b).
"DIP AGREEMENT" means that certain Debtor-in-Possession Loan and
Security Agreement dated as of May 20, 2003 by and among WSC, Fleet Capital
Corporation, as agent thereunder, and the financial institutions party thereto
as lenders from time to time, as amended, modified or supplemented through the
Amendment Date.
"DIP FACILITY" means the Debtor-in-Possession Loan and Security
Agreement dated as of May 20, 2003, by and among Sellers and the lenders named
therein and including Fleet Capital Corporation, as lender and agent, as
amended.
"DIP OBLIGATIONS" means WSC's Obligations (as defined in the DIP
Agreement) as of the Closing Date except for any such obligations for
indemnification of the Agent or any Lender, as set forth in the certification of
the Agent referred to in Section 5.1(f). Buyer may elect, in its sole
discretion, to satisfy the portion of such obligations relating to Letters of
Credit or LC Guaranties by cash collateralizing such obligations as required
under the DIP Agreement (and any such cash collateral will be held in escrow and
upon the expiration of the Letter of Credit or LC Guaranties giving rise thereto
any cash collateral not required to satisfy such obligations will promptly be
returned to Buyer) or by causing a letter of credit for any remaining
obligations to be issued to the Agent), and in either such case the amount of
the DIP Obligations used in determining the Cash Purchase Price will not double
count any amounts arising from such Letters of Credit or LC Guaranties.
"DIP ORDER" means the Bankruptcy Court Order dated June 16, 2003
approving the DIP Agreement on a final basis, as amended, modified or
supplemented through the Amendment Date.
"DIRECTORS, OFFICERS AND CORPORATE LIABILITY INSURANCE POLICY" or "DSO
POLICY" means the D&O Policy issued by National Fire Insurance Co. of
Pittsburgh, Pennsylvania, Policy No. 4455673.
"DTTC" has the meaning set forth in Section 3.3(c).
"D&O DEDUCTIBLE" has the meaning set forth in Section 2.3.
"D&O TAIL POLICY" has the meaning set forth in Section 2.3.
"D&O TAIL PREMIUM" has the meaning set forth in Section 2.3.
"EMPLOYEE BENEFIT PLANS" means all employee benefit plans as defined in
section 3(3) of ERISA, all compensation, pay, severance pay, salary
continuation, bonus, incentive, stock
50
option, retirement, pension, profit sharing or deferred compensation plans,
Contracts, programs, funds or arrangements of any kind and all other employee
benefit plans, programs, funds or arrangements (whether written or oral,
qualified or nonqualified, funded or unfunded, foreign or domestic, currently
effective or terminated, and whether or not subject to ERISA) and any trust,
escrow or similar agreement related thereto, whether or not funded.
"EMPLOYMENT PRACTICES DEDUCTIBLE" has the meaning set forth in Section
2.3.
"EMPLOYMENT PRACTICES POLICY" means the Employment Practices Policy
issued by Max Re Managers, Policy No. 31263-10-UMB-2003.
"EMPLOYMENT PRACTICES PREMIUM" has the meaning set forth in Section
2.3.
"EMPLOYMENT PRACTICES TAIL POLICY" has the meaning set forth in Section
2.3.
"EMPLOYMENT RECORDS" has the meaning set forth in Section 1.2(h).
"ENVIRONMENTAL LAWS" means all applicable federal, state and local
statutes, ordinances, rules, orders, judgments, junctions, decrees, regulations
and other provisions having the force of law, all judicial and administrative
orders and determinations, and all common law concerning pollution or protection
of human health and the environment, including, without limitation, all those
relating to the presence, use, production, generation, handling, transportation,
treatment, storage, disposal, distribution, labeling, testing, processing,
discharge, release, threatened release, control or cleanup of any Hazardous
Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATE" means, with respect to any Person, any trade or
business (whether or not incorporated) (i) under common control within the
meaning of section 4001(b)(1) of ERISA with such Person or (ii) which together
with such Person is treated as a single employer under sections 414(b), (c),
(m), (n) or (o) of the Code.
"ESCROW AGREEMENT" has the meaning set forth in Section 3.3(b)(ii).
"EXCLUDED ASSETS" has the meaning set forth in Section 1.2.
"EXCLUDED LIABILITIES" has the meaning set forth in Section 1.4.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"EXECUTION DATE" has the meaning set forth in Recital B.
"FINAL ORDER" means (i) an order or judgment of the Bankruptcy Court or
any other court or adjudicative body as to which the time to appeal, petition
for certiorari, or move for reargument or rehearing has expired and as to which
no appeal, petition for certiorari, or other proceedings for reargument or
rehearing shall then be pending, or (ii) in the event that an appeal, writ of
certiorari, reargument, or rehearing thereof has been sought, such order of the
Bankruptcy
51
Court or any other court or adjudicative body shall have been affirmed by the
highest court to which such order was appealed, or certiorari has been denied,
or from which reargument or rehearing was sought, and the time to take any
further appeal, petition for certiorari or move for reargument or rehearing
shall have expired; provided, however, that no order shall fail to be a Final
Order solely because of the possibility that a motion pursuant to Rule 60 of the
Federal Rules of Civil Procedure or Bankruptcy Rule 9024 may be filed with
respect to such order.
"FINANCING" has the meaning set forth in Section 5.5.
"FWH" has the meaning set forth in the Preamble.
"FWH BANKRUPTCY CASE" has the meaning set forth in Recital A.
"FWH PETITION DATE" has the meaning set forth in Recital A.
"GAAP" means United States generally acceptable accounting principles
as in effect as of the Execution Date.
"GENERAL UNSECURED CREDITORS TRUSTEE" means the financial institution
selected by the Buyer and the Official Committee of Unsecured Creditors
appointed in connection with the Bankruptcy Cases, for the purpose of holding
and distributing the Additional Shares and Warrants.
"GOVERNMENT" means any agency, division, subdivision or governmental or
regulatory authority or any adjudicatory body thereof, of the United States, or
any state thereof.
"HAZARDOUS MATERIALS" means any hazardous or toxic substance or waste
or any contaminant or pollutant regulated or otherwise creating liability under
Environmental Laws, including, without limitation, "hazardous substances" as
defined by the Comprehensive Environmental Response Compensation and Liability
Act, as amended, "toxic substance" as defined by the Toxic Substance Control
Act, as amended, "hazardous wastes" as defined by the Resource Conservation and
Recovery Act, as amended, "hazardous materials" as defined by the Hazardous
Materials Transportation Act, as amended, thermal discharges, radioactive
substances, PCBs, natural gas, petroleum products or byproducts and crude oil.
"HSR ACT" has the meaning set forth in Section 5.3(f).
"INDEBTEDNESS" has the meaning given that term in the DIP Agreement.
"IMPROVEMENTS" means the buildings, improvements and structures of
Sellers now existing on the Real Property or demised under any lease of, or
other Contract for the use of, real property.
"INFORMATION TECHNOLOGY" has the meaning set forth in Section 4.1(l).
"INSURANCE PAYMENTS" has the meaning set forth in Section 1.3(i).
52
"INTELLECTUAL PROPERTY" means any and all patents, patent applications,
trademarks, service marks, trade names, trade dress rights, internet domain
names, trade secrets and copyrights; foreign equivalent or counterpart rights
having similar effect in any jurisdiction throughout the world; and
registrations and applications for registration of any of the foregoing.
"INVENTORY" means all the finished goods, raw materials, work in
process and inventoriable supplies owned by Sellers on the Closing Date.
"ISU" means Independent Steelworkers Union.
"KNOWLEDGE OF BUYER" or any other similar term or knowledge
qualification means the actual knowledge of ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
"KNOWLEDGE OF SELLERS" or any other similar term or knowledge
qualification means the actual knowledge of D. ▇▇▇▇▇▇▇ ▇▇▇▇, the Chief Executive
Officer of Sellers, ▇▇▇▇ ▇. ▇▇▇▇▇▇, President and Chief Financial Officer, and
▇▇▇▇ ▇▇▇▇▇▇▇▇, Director of Environmental Control.
"LC GUARANTIES" has the meaning given that term in the DIP Agreement.
"LEASED REAL PROPERTY" has the meaning set forth in Section 1.1(a).
"LENDERS" has the meaning given that term in the DIP Agreement.
"LETTERS OF CREDIT" has the meaning given that term in the DIP
Agreement.
"LIEN" means any mortgage, pledge, security interest, encumbrance, lien
(statutory or other), conditional sale agreement, claim or liability.
"MABCO LEASE" means the Lease Agreement, dated as of October 26, 2001,
by and between MABCO Steam Company, LLC, as lessor, and FWH, as lessee.
"MOTION DATE" means the date on which the Bidding Procedures and Sale
Motion is filed with the Bankruptcy Court.
"NOTES AND BONDS" has the meaning set forth in Section 2.1(a).
"NOTES INDENTURE" means that certain Indenture dated as of June 18,
2002 between WSC and the Notes Trustee, pursuant to which the Senior Secured
Notes were issued, as in effect on the date thereof, and as amended,
supplemented, restated or otherwise modified from time to time.
"NOTES TRUSTEE" means ▇.▇. ▇▇▇▇▇▇ Trust Company, National Association,
a national banking association, in its capacity as trustee under the Notes
Indenture.
"NONOPERATING ASSETS" has the meaning set forth in Section 1.8.
"OFFERING" shall mean any offering of securities of Buyer, any
Affiliate of Buyer or any other Person, whether offered or sold in a registered
public offering or in a private placement.
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"OFFERING MEMORANDUM" has the meaning set forth in Section 5.5.
"ORDERS" means the Bankruptcy Sale Order and the Bidding Procedures
Order.
"ORIGINAL AGREEMENT" has the meaning set forth in Recital B.
"ORIGINAL SCHEDULES" has the meaning set forth in Section 10.17.
"OVERADVANCE" has the meaning given that term in the DIP Agreement.
"OWNED MACHINERY AND EQUIPMENT" has the meaning set forth in Section
1.1(b).
"OWNED MOTOR VEHICLES" has the meaning set forth in Section 1.1(h).
"OWNED REAL PROPERTY" has the meaning set forth in Section 1.1(a).
"PAYOFF CERTIFICATE" has the meaning set forth in Section 5.1(f).
"PAYROLL LIABILITIES" has the meaning set forth in Section 1.3(e).
"PCB" has the meaning set forth in the definition of Hazardous
Materials.
"PERMITS" has the meaning set forth in Section 1.1(j).
"PERMITTED LIENS" mean: (a) Liens for Taxes, assessments and Government
or other similar charges that are not yet due and payable, (b) easements,
licenses, unrecorded real estate agreements, restrictions and other matters of
record which either (i) the title company has agreed to affirmatively insure
against loss caused thereby in the applicable title policy, by way of ALTA
coverage or other affirmative cover, reasonably acceptable to Buyer, or (ii) do
not materially and adversely effect the operation of the Real Property in
question as currently operated, (c) any state of facts a survey or other visual
inspection would show that do not materially and adversely effect the operation
of the Real Property in question as currently and previously used in the
operation of Sellers' businesses, and (d) Liens arising from the Assumed
Liabilities.
"PERSON" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or Government.
"PETITION DATES" has the meaning set forth in Recital A.
"PRIMING LIENS" means "Permitted Liens" as defined in the DIP
Agreement.
"PURCHASE PRICE ESCROW" has the meaning set forth in Section 2.1.
"PURCHASE PRICE INCREASE" has the meaning set forth in Section 2.1.
"REAL PROPERTY" has the meaning set forth in Section 1.1(a).
"RELATED PERSON" means, with respect to any Person, all past, present
and future directors, officers, members, managers, stockholders, employees,
controlling persons, agents,
54
professionals, attorneys, accountants, lenders, investment bankers or
representatives of any such Person.
"SALE COSTS" means any costs of the sale (including Sellers'
professional fees) of the Acquired Assets or other claims that are required
under the Sale Order to be paid prior to the satisfaction of the DIP
Obligations.
"SEC" means the U.S. Securities and Exchange Commission.
"SECURED POLLUTION CONTROL BONDS" means those certain Secured Pollution
Control Revenue Refunding Bonds (Weirton Steel Corporation Project) Series 2002
issued by the City of Weirton, West Virginia.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"SECURITIES LAWS" has the meaning set forth in Section 5.5.
"SELLERS" has the meaning set forth in the Preamble.
"SELLERS BENEFIT PLANS" has the meaning set forth in Section 1.2(j).
"SELLERS CONTROLLED GROUP" has the meaning set forth in Section 1.2(j).
"SELLERS MATERIAL ADVERSE EFFECT" means a state of facts, event, change
or effect with respect to the Acquired Assets, the Assumed Liabilities or the
enforceability of any Contract(s), that results in a material adverse effect on
the value of the Acquired Assets, taken as a whole, or a material increase in
the amount of the Assumed Liabilities, taken as a whole, but excludes any state
of facts, event, change or effect caused by events, changes or developments
relating to (A) changes or conditions affecting the steel industry generally;
(B) changes in economic, regulatory or political conditions generally; (C)
changes resulting from or from any motion, application, pleading or order filed
related to, the Bankruptcy Cases; or (D) any action of Sellers pursuant to any
order of the Bankruptcy Court entered prior to the date hereof, including,
without limitation, the transactions contemplated by this Agreement or any of
the Ancillary Agreements or the announcement thereof.
"SENIOR DEBT" means the DIP Obligations, the Carveouts, the Priming
Liens and any Sale Costs; provided that if any obligation constituting Senior
Debt is also an Assumed Liability, the amount of that obligation will not be
included in calculating Senior Debt.
"SENIOR SECURED NOTES" means those certain 10% Senior Secured Notes due
2008 issued by WSC.
"SHARES" has the meaning set forth in Section 3.3(d).
"STEEL WORKS" has the meaning set forth in Section 1.3(h).
"STEEL WORKS LOAN" has the meaning set forth in Section 1.3(h).
55
"SUPPLIES" means all supplies, items and materials (including spare
parts) owned by Sellers on the Closing Date.
"TAX RETURN" means any report, return, information return, filing or
other information, including any schedules, exhibits or attachments thereto, and
any amendments to any of the foregoing required to be filed or maintained in
connection with the calculation, determination, assessment or collection of any
Taxes (including estimated Taxes).
"TAXES" means all taxes, however denominated, including any interest,
penalties or additions to tax that may become payable in respect thereof,
imposed by any Government, whether payable by reason of contract, assumption,
transferee liability, operation of law or Treasury Regulation section
1.1502-6(a) (or any predecessor or successor thereof or any analogous or similar
provision under state, local or foreign law), which taxes shall include all
income taxes, payroll and employee withholding, unemployment insurance, social
security (or similar), sales and use, excise, franchise, gross receipts,
occupation, real and personal property, stamp, transfer, workmen's compensation,
customs duties, registration, documentary, value added, alternative or add-on
minimum, estimated, environmental (including taxes under section 59A of the
Code) and other assessments or obligations of the same or a similar nature,
whether arising before, on or after the Closing Date.
"TECHNOLOGY" means any and all inventions, discoveries, ideas,
processes, formulae, designs, models, industrial designs, know-how, confidential
information and proprietary information, whether or not patented or patentable,
writings and other copyrightable works and works in progress, databases and
software.
"TERMINATION DATE" has the meaning set forth in Section 8.1(b).
"TITLE COMPANY" means any one or more of Chicago Title Insurance
Company or such other title insurance company reasonably acceptable to Buyer.
"TOTAL CONSIDERATION" has the meaning set forth in Section 2.1(b).
"TRANSITION SERVICES AGREEMENT" means the Transition Services Agreement
to be entered into by Sellers and Buyer, in a form to be agreed to by Sellers
and Buyer on or prior to the Closing Date.
"UCC" has the meaning set forth in Section 1.5.
"UNRESOLVED CLAIMS" has the meaning set forth in Section 3.3(b)(ii).
"WARN ACT" has the meaning set forth in Section 1.4(e).
"WARRANTS" means Warrants to purchase 1.0% of the Common Stock to be
issued on the Closing Date (without regard to the Common Stock issuable under
the Warrants or any management incentive plan). The Warrants shall be
exercisable on or after January 1, 2005 and expire on the third anniversary of
the Closing Date and shall have an exercise price per share equal to the
aggregate face amount of the Senior Secured Notes and Secured Pollution Control
Bonds, plus accrued and unpaid interest thereon and all unpaid fees and charges
payable in
56
connection therewith, through the Petition Date, divided by the number of shares
of Common Stock to be issued on the Closing Date.
"WEIRTON STEEL NAME" shall mean any name that contains or is derived
from the words "Weirton Steel", any derivative thereof, or any name intended or
likely to be confused or associated with any such words.
"WHC" has the meaning set forth in Section 3.3(e).
"WSC" has the meaning set forth in the Preamble.
"WSC BANKRUPTCY CASE" has the meaning set forth in Recital A.
"WSC PETITION DATE" has the meaning set forth in Recital A.
"WSC REPORTS" has the meaning set forth in Section 4.1(d)(i).
"WSC SHUTDOWN" has the meaning set forth in Section 5.1(a)(xi).
"WVHC" has the meaning set forth in the Preamble.
"WVHC BANKRUPTCY CASE" has the meaning set forth in Recital A.
"WVHC PETITION DATE" has the meaning set forth in Recital A.
"WVWCF" has the meaning set forth in Section 7.1 (g).
[SIGNATURES ON FOLLOWING PAGE.]
57
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first above written.
BUYER:
WSC ACQUISITION CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
SELLERS:
WEIRTON STEEL CORPORATION
By:
--------------------------------
Name: D. ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Chief Executive Officer
FW HOLDINGS INC.
By:
--------------------------------
Name:
--------------------------
Title:
-------------------------
WEIRTON VENTURE HOLDINGS CORPORATION
By:
--------------------------------
Name:
--------------------------
Title:
-------------------------
SCHEDULE 1.3(e)
PAYROLL LIABILITIES
1. ISU Represented and WSC Acquisition Hires Wages and Holiday Pay Payable
2. Withholding for ISU Represented and WSC Acquisition Hires
3. ISU Represented and WSC Acquisition Hires Vacation
4. FICA for ISU Represented and WSC Acquisition Hires
5. Withholding Taxes for persons hired by WSC Acquisition after Closing
6. Incurred but Not Reported Health Care Benefits for persons hired by WSC
Acquisition
7. Incurred but Not Paid Health Care Benefits for retirees and persons not
hired by WSC Acquisition after Closing
8. Supplemental Unemployment Benefits for ISU Represented and WSC
Acquisition Hires
9. Unemployment Taxes for ISU Represented and WSC Acquisition Hires
10. Guards, Nurses & Exempt Not Hired By WSC Acquisition Wages and Holiday
Pay Payable
11. Withholding for Guards, Nurses & Exempt Not Hired By WSC Acquisition
12. Guards, Nurses & Exempt Not Hired By WSC Acquisition Accrued Vacation
13. FICA for Guards, Nurses & Exempt Not Hired By WSC Acquisition
14. Withholding Taxes for Guards, Nurses & Exempt Not Hired By WSC
Acquisition
15. Incurred but Not Reported Benefits for Guards, Nurses & Exempt Not
Hired By WSC Acquisition
16. Unemployment Taxes for Guards, Nurses & Exempt Not Hired By WSC
Acquisition
17. Misc. Incentive & other Benefits Payable e.g., Service Plan Bonus, rate
retention
2
SCHEDULE 4.2(e)
BUYER'S CONSENTS AND APPROVALS
1. HSR. Notices and approvals required under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended.
2. Bankruptcy Court. Any consents or approvals required of the Bankruptcy
Court, including, without limitation, the Orders.
3