Exhibit 10.3
AMENDED AND RESTATED
ASSET PURCHASE AGREEMENT
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AMENDED AND RESTATED
ASSET PURCHASE AGREEMENT
BETWEEN
WEIRTON STEEL CORPORATION, FW HOLDINGS, INC. AND
WEIRTON VENTURE HOLDINGS CORPORATION, AS SELLERS,
AND
ISG WEIRTON INC., AS BUYER
AND
INTERNATIONAL STEEL GROUP INC.
DATED AS OF FEBRUARY 25, 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............................................................ 5
Section 1.4 Retention of Liabilities............................................................. 6
Section 1.5 Non-Assignment of Contracts.......................................................... 8
Section 1.6 Identification of Additional and Excluded Contracts.................................. 8
Section 1.7 Transition Services Agreement........................................................ 9
Section 1.8 Exclusion of Nonoperating Assets..................................................... 9
ARTICLE 2. CONSIDERATION................................................................................. 9
Section 2.1 Purchase Price....................................................................... 9
Section 2.2 Accounts Payable and Payroll Liabilities............................................. 9
Section 2.3 Directors and Officers Insurance..................................................... 10
Section 2.4 Purchase Price Adjustment............................................................ 11
ARTICLE 3. CLOSING AND DELIVERIES........................................................................ 12
Section 3.1 Closing.............................................................................. 12
Section 3.2 Sellers' Deliveries.................................................................. 13
Section 3.3 Buyer's Deliveries................................................................... 13
Section 3.4 Buyer's Right to Conduct an Audit of Inventory....................................... 14
ARTICLE 4. REPRESENTATIONS AND WARRANTIES................................................................ 14
Section 4.1 Representations and Warranties of Sellers............................................ 14
Section 4.2 Representations and Warranties of ISG and Buyer...................................... 20
Section 4.3 Warranties Are Exclusive............................................................. 22
ARTICLE 5. COVENANTS AND OTHER AGREEMENTS................................................................ 22
Section 5.1 Pre-Closing Covenants of Sellers..................................................... 22
Section 5.2 Pre-Closing Covenants of ISG and Buyer............................................... 26
Section 5.3 Other Covenants of Sellers, ISG and Buyer............................................ 27
Section 5.4 Employment Covenants and Other Undertakings.......................................... 28
Section 5.5 Covenants Relating to Offerings, Financings and Securities Law Compliance............ 31
Section 5.6 Administration of Payroll Liabilities................................................ 32
ARTICLE 6. TAXES......................................................................................... 32
Section 6.1 Taxes Related to Purchase of Acquired Assets......................................... 32
Section 6.2 Cooperation on Tax Matters........................................................... 33
Section 6.3 Allocation of Purchase Price......................................................... 33
ARTICLE 7. CONDITIONS PRECEDENT TO PERFORMANCE BY PARTIES................................................ 34
Section 7.1 Conditions Precedent to Performance by Sellers....................................... 34
Section 7.2 Conditions Precedent to the Performance by ISG and Buyer............................. 35
ARTICLE 8. TERMINATION................................................................................... 37
Section 8.1 Conditions of Termination............................................................ 37
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 8.2 Effect of Termination; Remedies...................................................... 38
Section 8.3 Exclusive Remedy..................................................................... 39
ARTICLE 9. SURVIVAL AND INDEMNIFICATION.................................................................. 39
Section 9.1 Survival; Indemnification............................................................ 39
Section 9.2 Specific Performance................................................................. 40
Section 9.3 Exclusive Remedy..................................................................... 40
ARTICLE 10. BIDDING PROCEDURES............................................................................ 40
Section 10.1 Bidding Procedures................................................................... 40
Section 10.2 Sale Hearing and Entry of Bankruptcy Sale Order...................................... 41
ARTICLE 11. MISCELLANEOUS................................................................................. 41
Section 11.1 Allowed Administrative Expenses...................................................... 41
Section 11.2 Alternative Transaction.............................................................. 41
Section 11.3 Further Assurances................................................................... 41
Section 11.4 Successors and Assigns............................................................... 42
Section 11.5 Governing Law; Jurisdiction.......................................................... 42
Section 11.6 Expenses............................................................................. 42
Section 11.7 Broker's and Finder's Fees........................................................... 42
Section 11.8 Severability......................................................................... 42
Section 11.9 Notices.............................................................................. 43
Section 11.10 Amendments; Waivers.................................................................. 44
Section 11.11 Public Announcements................................................................. 44
Section 11.12 Entire Agreement..................................................................... 44
Section 11.13 No Third Party Beneficiaries......................................................... 44
Section 11.14 Headings............................................................................. 44
Section 11.15 Counterparts......................................................................... 44
Section 11.16 Joint Drafting....................................................................... 44
Section 11.17 Construction......................................................................... 44
ARTICLE 12. DEFINITIONS................................................................................... 45
Section 12.1 Certain Terms Defined................................................................ 45
EXHIBIT
Exhibit A................................................................................. Bankruptcy Sale Order
Exhibit B................................................................................. Bidding Procedures Order
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
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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
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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AMENDED AND RESTATED
ASSET PURCHASE AGREEMENT
THIS AMENDED AND RESTATED ASSET PURCHASE AGREEMENT (this "AGREEMENT"),
dated as of February 25, 2004 (the "AMENDMENT DATE"), 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"), ISG Weirton Inc., a Delaware corporation ("BUYER"), and
International Steel Group Inc. ("ISG"). 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, Buyer and ISG
entered into an asset purchase agreement, pursuant to which Buyer agreed to
purchase the Acquired Assets and assume the Assumed Liabilities from Sellers
(the "ORIGINAL AGREEMENT"). This Agreement replaces and supercedes the Original
Agreement.
C. Buyer is a wholly owned subsidiary of ISG. 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 the form attached as Exhibit A or such other form 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 Sale Order and in
accordance with other applicable provisions of the Bankruptcy Code, and the
Federal Rules of Bankruptcy Procedure (the "BANKRUPTCY RULES").
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E. On the Execution Date, WSC, Buyer and The Huntington National Bank,
as escrow agent (the "ESCROW AGENT"), entered into a performance escrow
agreement (the "PERFORMANCE ESCROW AGREEMENT") pursuant to which Buyer has
deposited $2,000,000 (the "PERFORMANCE DEPOSIT") with the Escrow Agent as
security for the performance of Buyer's obligations hereunder. The Performance
Deposit shall be held and disbursed by the Escrow Agent in accordance with the
terms of the Performance Escrow Agreement and this Agreement.
F. 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, Buyer and ISG 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, 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
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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;
(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;
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(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 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(q), 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;
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(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).
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);
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(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;
(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;
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(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 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
Code Section 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 Code Section 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
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(h) all liabilities and obligations of any Seller of whatever
nature whether presently in existence or hereafter arising,
other than the Assumed Liabilities.
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 shall provide ISG with a schedule of Sellers' reasonable
best estimates of Cure Costs for the Acquired Contracts
("SCHEDULE 1.6(b)") within two Business Days after the
Amendment Date, which schedule shall be reasonably consistent
with the information previously provided by WSC to ISG on
WSC's estimate of contract cures dated January 19, 2004 (1:00
p.m.). 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) On the Amendment Date, Sellers shall file a Motion to Assume
and Assign Certain Contracts and Unexpired Leases to Buyer,
effective as of the Closing Date, and establish Cure Costs
relating thereto, in a form acceptable to Buyer and Sellers,
and Sellers shall make such additional filings with the
Bankruptcy
8
Court as may be necessary or desirable to effect the
provisions of this Section 1.6.
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 Purchase Price. The aggregate consideration for the sale,
transfer, assignment and conveyance of the Acquired Assets will be (a)
$158,000,000 in cash, subject to adjustment as provided in Section 2.2, Section
2.3 and Section 2.4 of this Agreement (as so adjusted, the "PURCHASE PRICE");
provided, however, that if, the Purchase Price, adjusted as provided in Section
2.2, Section 2.3 and Section 2.4(c), is less than the amount of the Senior Debt,
then the 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
(such increase, the "PURCHASE PRICE INCREASE"); and (b) the assumption by Buyer
of the Assumed Liabilities (such assumption, together with the Purchase Price
and the Purchase Price Increase, if any, the "TOTAL CONSIDERATION"). The
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.
9
(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. If Buyer so elects, the estimated
amount of the Payroll Liabilities included in the Specified
Liabilities shall be reduced by the estimated amount of such
liabilities not assumed and, in the case of the Payroll
Liabilities described in item 6, the amount of such reduction
shall be determined in a fair and equitable manner by Buyer
and Sellers based upon the sum of the estimated amounts for
the liabilities described in items 6 and 7 of Schedule 1.3(e)
multiplied by a fraction, the numerator of which equals the
number of employees of Sellers who are employed by Buyer
immediately after the Closing and the denominator of which is
the number of employees of Sellers immediately prior to the
Closing plus the number of retirees who are eligible for such
payments.
(c) At the Closing, the 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.
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
10
amount of the Insurance Payments. The Purchase Price shall be reduced by the sum
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).
Section 2.4 Purchase Price Adjustment.
(a) The Purchase Price will be increased, on a dollar for dollar
basis, to the extent the Final Working Capital of Sellers as
of the Closing Date, exceeds Target Working Capital. The
Purchase Price will be decreased, on a dollar for dollar
basis, to the extent the Target Working Capital exceeds Final
Working Capital.
(b) Not less than three days prior to the Closing Date, Sellers
will provide Buyer with a good faith estimate of the Net
Working Capital of Sellers as of the Closing Date. Buyer and
Sellers will review Sellers' estimate and seek in good faith
to jointly determine the estimated Net Working Capital of
Sellers as of the Closing Date. In the event Buyer and Sellers
cannot agree on the estimated Net Working Capital of Sellers
as of the Closing Date, then Buyer shall estimate the Net
Working Capital of Sellers as of the Closing Date. The amount
of Net Working Capital as determined pursuant to this Section
2.4(b) shall be referred to as the "ESTIMATED CLOSING WORKING
CAPITAL". In no event will the Estimated Closing Working
Capital exceed the Target Working Capital by more than
$10,000,000.
(c) At Closing, the Purchase Price shall be increased, on a dollar
for dollar basis, to the extent the Estimated Working Capital
exceeds Target Working Capital. The Purchase Price shall be
decreased, on a dollar for dollar basis, to the extent the
Target Working Capital exceeds the Estimated Working Capital.
(d) As promptly as practicable, but no later than 90 days after
the Closing Date, Buyer shall prepare and cause to be
delivered to WSC a calculation of final Net Working Capital as
of the close of business on the Closing Date with appropriate
supporting documentation.
(e) If WSC disagrees with Buyer's calculation of final Net Working
Capital, WSC, on behalf of Sellers, may, within 30 days after
receipt of Buyer's calculation of final Net Working Capital,
deliver a notice to Buyer disagreeing with such calculation
and setting forth WSC's calculation of such amount. Any such
notice of disagreement shall specify those items or amounts as
to which WSC disagrees and the reasons for WSC's
disagreements, and WSC shall be deemed to have agreed with all
other items and amounts contained in the calculation of final
Net Working Capital delivered by Buyer.
(f) If a notice of disagreement is duly delivered, Buyer and WSC
shall, during the 30 days following receipt of such notice by
Buyer, use their commercially reasonable efforts to reach
agreement on the disputed items or amounts in order to
determine, as may be required, the amount of final Net Working
Capital, which amount shall not be less than the amount
thereof shown in Buyer's calculation nor more than the amount
thereof shown in WSC's calculation. If during such period,
Buyer and WSC are unable to reach such agreement, they shall
promptly thereafter cause Ernst & Young, LLP (the "ACCOUNTING
REFEREE") to review this
11
Agreement and the disputed items or amounts and calculate
final Net Working Capital, which amount shall not be less than
the amount thereof shown in Buyer's calculation nor more than
the amount thereof shown in WSC's calculation. In making such
calculation, the Accounting Referee shall consider only those
items or amounts in Buyer's calculation with which WSC has
disagreed and shall be guided by the provisions of this
Section 2.4. The Accounting Referee shall deliver to Buyer and
WSC, as promptly as practicable (but in any case no later than
30 days from the date of engagement of the Accounting
Referee), a report setting forth such calculation. Such report
shall be final and binding upon Buyer and Sellers. The cost of
such review and report shall be borne by Buyer. The amount of
the final Net Working Capital as determined pursuant to this
Section 2.4(f) shall be referred to as the "CLOSING WORKING
CAPITAL".
(g) Buyer and Sellers shall, and shall cause their respective
Related Persons to, cooperate and assist in the calculation of
Closing Working Capital and in the conduct of the reviews
referred to in this Section 2.4, including, without
limitation, the making available to the extent necessary of
books, records, work papers and personnel. All amounts to be
determined pursuant to this Section 2.4 will be determined in
accordance with Sellers' historic accounting practices and
principles consistently applied between December 31, 2002 and
the Closing Date.
(h) If Estimated Closing Working Capital equals or exceeds Final
Working Capital, Sellers shall pay Buyer, an amount equal to
such excess, if any. Such payment shall be made by wire
transfer of immediately available funds within three Business
Days of the final determination of Final Working Capital. ISG
and Buyer hereby waive their right to seek disgorgement or
return from the Agent or any Lender of any amounts necessary
to fund this purchase price adjustment (except for any such
right that may result from any overpayment of the amount
necessary to indefeasibly and finally satisfy the DIP
Obligations in full).
(i) If Final Working Capital exceeds the sum of the Estimated
Closing Working Capital plus the Purchase Price Increase, if
any, Buyer shall pay WSC, on behalf of Sellers, an amount
equal to such excess. Such payment shall be made by wire
transfer of immediately available funds within three Business
Days of the final determination of Final Working Capital. ISG
and Buyer hereby waive their right to seek disgorgement or
return from the Agent or any Lender of any amounts necessary
to fund this purchase price adjustment (except for any such
right that may result from any overpayment of the amount
necessary to indefeasibly and finally satisfy the DIP
Obligations in full).
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 Xxxxx Day, 000
Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000 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 ISG and 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 ISG and Buyer from
all obligations for the full and indefeasible satisfaction of
the DIP Obligations, in form and substance satisfactory to
Agent, ISG and Buyer.
Section 3.3 Buyer's Deliveries.
At the Closing:
(a) Buyer shall cause the Escrow Agent to pay the Performance
Deposit to WSC, on behalf of Sellers, in accordance with the
terms of the Performance Escrow Agreement, by wire transfer of
immediately available funds to WSC's account;
(b) Buyer shall pay the Purchase Price, adjusted as provided in
Section 2.2, Section 2.3 and Section 2.4(c), 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 ISG and Buyer hereby waive their right to
seek disgorgement or return
13
from the Agent or any Lender of such amount (except
for any 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 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 an
amount (the "PURCHASE PRICE ESCROW") equal to the
lesser of (a) the Purchase Price Increase and (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 applicable escrow agreement; and
(iii) any remainder (computed by subtracting the amounts
paid pursuant to Section 3.3(b)(i) and (ii) and the
amount of the Performance Deposit from the sum of the
Purchase Price, adjusted as provided in Section 2.2,
Section 2.3 and Section 2.4(c), and the Purchase
Price Increase) shall be paid to WSC, on behalf of
Sellers.
(c) Buyer shall deliver three executed counterparts of the
Transition Services Agreement;
(d) 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
(e) Buyer and ISG 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).
Section 3.4 Buyer's Right to Conduct an Audit of Inventory. Buyer shall
have the right to conduct, or cause to be conducted, at its expense, an audit of
the Inventory prior to the Closing Date. If Buyer elects to conduct such an
audit, (a) such audit shall be scheduled so as to minimize unreasonable
interference with Sellers' production, (b) Sellers shall make available such
personnel, records, systems, machinery, equipment and assistance as Buyer shall
reasonably request to undertake such audit, (c) Sellers' representatives shall
have the right to observe such audit, and (d) the results of such audit shall be
utilized in determining the Estimated Closing Working Capital.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES
Section 4.1 Representations and Warranties of Sellers. Sellers hereby
represent and warrant to ISG and 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 the payment of
prepetition franchise and similar Taxes). Each Seller has all
14
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. Subject to the entry of the
Bidding Procedures Order, each Seller has full power and
authority to grant the Break-Up Fee and the Expense
Reimbursement.
(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
(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
15
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").
(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.
16
(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 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
17
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 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
18
under each insurance policy required to be set forth on
Schedule 4.1(p) 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(q), 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 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 ISG with true and
complete copies of the DIP Agreement, the DIP Order,
the current budget approved by the Agent and the
Lenders
19
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 $20,000,000.
(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 ISG and Buyer. ISG and
Buyer hereby represent and warrant 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
20
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 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) Reports; Financial Statements.
(i) Prior to the Execution Date, Buyer provided Sellers
with a copy of the Prospectus of ISG, dated December
11, 2003 (the "PROSPECTUS").
(ii) Since the date of the Prospectus, ISG has filed all
reports, schedules, forms, statements and other
documents filed or required to be filed with the SEC
(collectively, including the Prospectus, the "ISG
REPORTS"), each of which has complied in all material
respects with the applicable requirements of the
Securities Act of 1933, as amended (the "SECURITIES
ACT"), and the Exchange Act, as applicable, each as
in effect on the date so filed.
(iii) Each of the audited and unaudited consolidated
financial statements of ISG (including any related
notes thereto) included in the ISG Reports was
prepared in accordance with GAAP (except as indicated
in the notes
21
thereto and subject, in the case of any unaudited
interim financial statements, to the absence of
notes) and fairly presents the financial position and
results of operations and cash flows of ISG and its
subsidiaries as of the dates and for the periods
indicated, subject to normal year-end adjustments.
(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.
ARTICLE 5. COVENANTS AND OTHER AGREEMENTS
Section 5.1 Pre-Closing Covenants of Sellers. Sellers covenant to ISG
and 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;
22
(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 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.
23
(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 (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
24
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 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 Purchase Price Increase 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
25
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.
(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 ISG and Buyer. ISG and Buyer
covenant to Sellers that, during the period from the Execution Date 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
26
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 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, ISG 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 and ISG shall promptly forward to Sellers any and all
payments received by Buyer or ISG 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
ISG and 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, ISG 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
27
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, ISG and Buyer hereby waive compliance with any
bulk sale rule that relates to any Taxes of Sellers.
(f) Government Consents. Within ten business days following the
Execution Date, each of ISG 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
Xxxx-Xxxxx-Xxxxxx 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, ISG 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
28
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 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 Execution Date
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
29
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 employee's employment on or before
the Closing Date, and such benefits (if any) shall be payable
by Sellers.
(h) Health Insurance Coverage. (i) As soon as administratively
possible after the Execution Date, Sellers shall file a motion
with the Bankruptcy Court seeking to terminate their
obligations to provide health insurance benefits (other than
COBRA) to their retirees. Promptly upon the entry of such an
order, Sellers shall terminate their obligations to provide
health insurance benefits (other than COBRA) to their
retirees. Sellers shall take steps to ensure that such
termination of Sellers' obligations to provide retiree health
insurance benefits shall be effective prior to the Closing
Date. Buyer shall be entitled to review and comment on any
documents filed with the Bankruptcy Court related to the
termination of Sellers' retiree health insurance obligation
(including motions pursuant to Bankruptcy Code section 1114).
(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
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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 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 Motion Date, in connection with (i) any
Offering, (ii) obtaining the Lenders' Consent or any other debt financing
necessary to consummate the transactions contemplated hereby (the "FINANCING"),
and (iii) the preparation and filing of any ISG Reports, Sellers shall (a)
cooperate with ISG and Buyer in all reasonable respects in connection with
efforts by ISG and/or Buyer to complete the Financing, the Offering, or the
preparation and filing of the ISG Reports, 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 ISG and Buyer of such event and use their commercially
reasonable efforts to assist ISG and 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 ISG and
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 period ended on the
Closing Date, to be included or incorporated into any ISG
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Report or 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 ISG Report or 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 ISG Report or
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 ISG and 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 ISG Report or registration statement or Offering Memorandum;
(g) reasonably assist ISG and Buyer with the hosting of one or more meetings
with ISG's and 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 ISG and 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.
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
32
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.
Section 6.3 Allocation of Purchase Price. 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.
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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 ISG and Buyer. The
representations and warranties of ISG and Buyer made in
Section 4.2 of this Agreement, in each case, shall be true and
correct as of the Execution Date and as of the Closing Date as
though made by ISG and 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 an ISG
Material Adverse Effect.
(b) Performance of the Obligations of ISG and Buyer. Each of ISG
and 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 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
Section 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
34
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 ISG and Buyer.
The obligations of ISG and 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).
(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.
35
(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;
provided, however, that this closing condition will be deemed
to have been waived by Buyer if, on or before March 27, 2004,
Buyer has not exercised its right under Section 8.1(i) to
terminate this Agreement.
(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.
(k) Lenders Consent. The Lenders' Consent shall have been
obtained.
(l) Workers' Compensation. Buyer shall have reached an agreement
with the WVWCF (and other relevant parties), which agreement
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 ISG or Buyer, as applicable, becomes
self-insured for its workers' compensation risk in the State
of West Virginia and (ii) if ISG or Buyer does not become
self-insured on or before July 1, 2005, then as of July 1,
2005, ISG's or Buyer's experience modification factor shall be
calculated based upon the experience of ISG or Buyer, as
applicable, from the period beginning the day after the
Closing Date and ending on July 1, 2005.
(m) MABCO Lease. Either (i) Sellers shall have terminated the
MABCO Lease and obtained title to all of the property leased
thereunder, so that such property (rather than Sellers'
current leasehold interest therein) is included with the
Acquired Assets conveyed to Buyer at Closing, or (ii) 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.
36
(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) Purchase Price Increase. The amount of the Senior Debt
(excluding the DIP Obligations) is not more than $10,500,000.
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, ISG 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
Execution Date (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
or ISG (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, an ISG Material Adverse Effect, or a material
failure to perform any covenant of ISG or Buyer contained in
this Agreement or any Ancillary Agreement to which ISG or
Buyer is party, and ISG or Buyer, as applicable, has failed,
within 10 days after such notice, to remedy such inaccuracy or
perform such covenant or provide reasonably adequate assurance
to WSC of ISG's or 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
37
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
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 (i) the Bidding
Procedures and Sale Motion is not filed with the Bankruptcy
Court on the Execution Date or within five Business Days after
the Execution Date, (ii) the Bidding Procedures Order (in the
form attached as Exhibit B or in other form satisfactory to
Buyer) is not entered by the Bankruptcy Court within 25 days
of the Execution Date or (iii) 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 60
days of the Execution Date;
(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;
(i) By Buyer, by written notice to WSC on or prior to March 26,
2004, if the members of the ISU have not ratified the
collective bargaining agreement between the ISU and Buyer; or
(j) Automatically, if Sellers enter into an agreement providing
for an Alternative Transaction.
Section 8.2 Effect of Termination; Remedies.
(a) 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, ISG 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.
(b) If this Agreement is terminated pursuant to Section 8.1(a),
Section 8.1(b), Section 8.1(c), Section 8.1(f), Section
8.1(g), Section 8.1(h) or Section 8.1(i) then, within two
Business Days after such termination, the Performance Deposit,
together with any interest accrued thereon, shall be returned
to Buyer in accordance with the terms of the Performance
Escrow Agreement, and in the event of a termination pursuant
to, Section 8.1(g), Section 8.1(h) or Section 8.1(i) Sellers
also shall pay to Buyer the Expense Reimbursement in cash.
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(c) If this Agreement is terminated pursuant to Section 8.1(d)
then, within two Business Days after such termination, the
Performance Deposit, together with any interest accrued
thereon, shall be paid to WSC in accordance with the terms of
the Performance Escrow Agreement.
(d) If this Agreement is terminated pursuant to Section 8.1(e)
then, (i) within two Business Days after such termination, (A)
the Performance Deposit, together with any interest accrued
thereon, shall be returned to Buyer in accordance with the
terms of the Performance Escrow Agreement and (B) Sellers
shall pay to Buyer the Expense Reimbursement in cash and (ii)
if WSC enters into an agreement to consummate an Alternative
Transaction within one year after such termination, Sellers
also shall pay to Buyer a break-up fee in cash equal to
$6,375,000 (the "BREAK-UP FEE") at any closing of such
Alternative Transaction; provided that Buyer's right to
payment of the Break-Up Fee shall be subordinated to payment
of the Senior Debt.
(e) Any payments of the Break-Up Fee or Expense Reimbursement
under this Section 8.2 shall be made by Sellers by wire
transfer of immediately available funds to an account
designated in writing by Buyer. Sellers acknowledge that the
Break-Up Fee or Expense Reimbursement (or any portion thereof)
are necessary and appropriate expenses for the administration
of their estates, pursuant to sections 503 and 507 of the
Bankruptcy Code, and that the Break-Up Fee and Expense
Reimbursement (or any portion thereof) are allowed
administrative expenses against each of their estates. In
addition, the Break-Up Fee and the Expense Reimbursement shall
be payable directly from and secured by the cash component
consideration of the Alternative Transaction.
(f) If this Agreement is first terminated pursuant to Section
8.1(j) then, (i) within two Business Days after Sellers enter
into an agreement to consummate an Alternative Transaction,
(A) the Performance Deposit, together with any interest
accrued thereon, shall be returned to Buyer in accordance with
the terms of the Performance Escrow Agreement and (B) Sellers
shall pay to Buyer the Expense Reimbursement in cash, and (ii)
Sellers also shall pay to Buyer the Break-Up Fee in cash at
the closing of such Alternative Transaction and out of the
proceeds thereof.
Section 8.3 Exclusive Remedy. Prior to the Closing Date, the parties'
sole and exclusive remedies for any claim arising out of or in connection with
this Agreement shall be termination in accordance with this Article 8.
ARTICLE 9. SURVIVAL AND INDEMNIFICATION
Section 9.1 Survival; Indemnification. None of the representations and
warranties of Sellers, ISG 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 ISG or 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.
39
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 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. BIDDING PROCEDURES
Section 10.1 Bidding Procedures.
(a) Bankruptcy Court Approval. On the Execution Date or within
five Business Days after the Execution Date, Sellers shall
file with the Bankruptcy Court a bidding procedures and sale
motion in form and substance satisfactory to Buyer in its sole
discretion (the "BIDDING PROCEDURES AND SALE MOTION"), seeking
entry of a bidding procedures order in form and substance
satisfactory to Buyer (the "BIDDING PROCEDURES ORDER").
Sellers shall use commercially reasonable efforts to obtain
entry by the Bankruptcy Court of the Bidding Procedures Order
as soon as practicable. The Bidding Procedures Order shall
contain, among other provisions, those contained in Section
10.1(b) and Section 10.1(c) and, in addition, shall contain
additional provisions regarding qualification of bidders,
bidding requirements and other matters. Sellers shall provide
to Buyer copies of any and all pleadings filed in opposition
to or in respect of the Bidding Procedures and Sale Motion
immediately upon their receipt. Sellers shall use their best
efforts to receive or oppose, as applicable, any such
pleadings.
(b) Other Bids.
(i) Buyer acknowledges that Sellers may receive bids
("BIDS") from prospective purchasers (such
prospective purchasers who are Qualified Bidders (as
defined in the Bidding Procedures and Sale Motion),
the "BIDDERS"), including, without limitation, the
exercise by subordinated secured noteholders (so long
as such noteholders are Qualified Bidders (as defined
in the Bidding Procedures and Sale Motion)) of the
right to credit bid pursuant to applicable provisions
of the Bankruptcy Code, for the sale of all of the
Acquired Assets or other assets owned by Sellers as
provided in the Bidding Procedures Order. All Bids
shall be subject to bid incentives and protections
set forth in this Section 10.1(b) and overbid
protections set forth in Section 10.1(c) of this
Agreement. The Bidding Procedures Order shall require
that all Bids (other than Bids submitted by Buyer)
will be submitted with two copies of this Agreement
marked to show changes requested by the Bidder.
(ii) If Sellers receive any Bids, Sellers shall have the
right to select, and seek final approval of the
Bankruptcy Court for, the highest or otherwise better
Bid or Bids from the Bidders (the "SUPERIOR BID"),
which will be determined by considering, among other
things, the (A) identity of the
40
Bidder; (B) number, type and nature of any changes to
this Agreement requested by the Bidder; (C) extent to
which the identity of the Bidder or such
modifications are likely to delay closing of the sale
of the Acquired Assets and Assumed Liabilities to the
Bidder and the cost to Sellers of such modifications
or delay; (D) extent to which such Bid covers less
than or more than all of the Acquired Assets and
Assumed Liabilities; (E) form and amount of the total
consideration to be received by Sellers and their
bankruptcy estate; and (F) financial strength of the
Bidder. Sellers shall provide copies of all Bids to
Buyer.
(c) Overbid Protection.
(i) Sellers shall seek Bankruptcy Court approval of the
following overbid protections: (A) Bids will not be
considered by Sellers unless they are $1,000,000 more
than the sum of the (x) Total Consideration, (y)
Break-Up Fee and (z) Expense Reimbursement; (B) any
Bids thereafter must be at least $2,000,000 higher
than the then existing highest or better Bid; and (C)
a provision that Buyer will be credited with, and
have added to the aggregate amount of its bid when
comparing it to other bids, the amount of the
Break-Up Fee and the Expense Reimbursement that will
be earned by Buyer under Section 8.2 if it is not the
successful bidder for the Acquired Assets.
(ii) In determining the value of the consideration offered
under a Qualified Bid, Sellers shall value the
liabilities proposed to be assumed by the Bidder in a
manner consistent with the valuation methodology used
to value Buyer's and ISG's Qualified Bid as reflected
in the Agreement.
Section 10.2 Sale Hearing and Entry of Bankruptcy Sale Order. The
Bidding Procedures and Sale Motion shall also seek entry by the Bankruptcy Court
of the Bankruptcy Sale Order. Sellers shall use commercially reasonable efforts
to obtain entry by the Bankruptcy Court of the Bankruptcy Sale Order within 60
days of the Execution Date.
ARTICLE 11. MISCELLANEOUS
Section 11.1 Allowed Administrative Expenses. Any and all amounts owed
to Buyer by Sellers hereunder or under any Ancillary Agreement after the
Execution Date shall constitute allowed administrative expenses of the Sellers
under sections 503(b)(1) and 507(A)(1), as applicable, of the Bankruptcy Code.
Section 11.2 Alternative Transaction. Notwithstanding anything herein
or in any Ancillary Agreement to the contrary, Sellers may furnish information
concerning Sellers, the Acquired Assets and the Assumed Liabilities to any
Person in connection with a potential Alternative Transaction and negotiate,
enter into and consummate an Alternative Transaction.
Section 11.3 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.
41
Section 11.4 Successors and Assigns.
(a) Buyer shall have the right to assign to any Person or Persons
(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 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 the event of any assignment
pursuant to this Section 11.4(a), Buyer shall not be relieved
of any liability or obligation hereunder; provided, however,
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.
(b) ISG and Buyer shall have the right to assign this Agreement or
any of its rights or obligations hereunder collaterally to any
lender of ISG or Buyer; provided, however, that no such
assignment shall relieve ISG or 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 11.5 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 11.6 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 11.7 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 Xxxxxxxx Xxxxx
Xxxxxx & Xxxxx whose fees and expenses shall, as between the parties, be the
sole responsibility of Sellers, 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 11.8 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
42
be unenforceable, the remaining terms shall provide for the consummation of the
transactions contemplated hereby in substantially the same manner as originally
set forth at the later of (a) the Execution Date and (b) the date this Agreement
was last amended.
Section 11.9 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
000 Xxxxx Xxxxxxx Xxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxxx, President
Facsimile: (000) 000-0000
With a copy to:
XxXxxxx Xxxxx LLP and: Xxxxxxxxxxx & Xxxxxxxx
00xx Xxxxx, Xxxxxxxx Xxxxx 000 Xxxxxxxxxx Xxxxxx
000 Xxxxxxx Xxxxxx Xxxxxxxxxx, XX 00000-0000
Xxxxxxxxxx, XX 00000 Attention: Xxxxxxx X. XxXxxx
Attention: Xxxx X. Xxxxxxxxxxx Facsimile: (000) 000-0000
Facsimile: (000) 000-0000
If to ISG or Buyer:
International Steel Group Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxx Xxxxxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxxx Day
North Point
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx, Xx. and Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
(a) Any party may change its address or facsimile number for the
purpose of this Section 11.9 by giving the other parties
written notice of its new address in the manner set forth
above.
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Section 11.10 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 ISG,
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 11.11 Public Announcements. Promptly after the Execution Date,
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 11.12 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. 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 11.13 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, ISG and Buyer and their respective
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, ISG 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 ISG or Buyer.
Section 11.14 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 11.15 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 11.16 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 11.17 Construction. Any reference to any law shall be deemed
also to refer to all rules and regulations promulgated thereunder, unless the
context requires otherwise.
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The word "including" shall mean including without limitation. Any reference to
the singular in this Agreement shall also include the plural and vice versa.
ARTICLE 12. DEFINITIONS
Section 12.1 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).
"ACCOUNTS RECEIVABLE" has the meaning set forth in Section 1.1(d).
"ACCOUNTING REFEREE" has the meaning set forth in Section 2.4(f).
"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).
"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.
"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.
"ALTERNATIVE TRANSACTION" means any transaction (regardless of the form thereof)
involving a sale of all or any substantial portion of the Acquired Assets by
Sellers to a purchaser or purchasers other than Buyer, or the proposal by
Sellers of a plan of reorganization that does not contemplate the sale of the
Acquired Assets by Sellers to Buyer in accordance with the terms of this
Agreement.
"AMENDMENT DATE" has the meaning set forth in the preamble to this Agreement.
"ANCILLARY AGREEMENTS" means the Performance Escrow Agreement, the
Confidentiality Agreement, and 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 11.4(a).
"ASSIGNEE" has the meaning set forth in Section 11.4(a).
"ASSUMED LIABILITIES" has the meaning set forth in Section 1.3.
45
"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.
"BANKRUPTCY SALE ORDER" has the meaning set forth in Recital D.
"BIDDERS" has the meaning set forth in Section 10.1(b)(i).
"BIDDING PROCEDURES AND SALE MOTION" has the meaning set forth in Section
10.1(a).
"BIDDING PROCEDURES ORDER" has the meaning set forth in Section 10.1(a).
"BIDS" has the meaning set forth in Section 10.1(b)(i).
"BREAK-UP FEE" has the meaning set forth in Section 8.2(d).
"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.
"CARVEOUTS" has the meaning given that term in the DIP Order.
"CASH" means all cash and cash equivalents.
"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.
"CLOSING WORKING CAPITAL" has the meaning set forth in Section 2.4(f).
"COBRA" has the meaning set forth in Section 1.4(d).
"COBRA RECORDS" has the meaning set forth in Section 5.4(h).
46
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL PROTECTION LOAN" has the meaning given that term in the DIP
Agreement.
"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 any such obligations for indemnification of the Agent
or any Lender, as set forth in the Payoff Certificate. 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 Purchase Price Increase 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 "D&O POLICY"
means the D&O Policy issued by National Fire Insurance Co. of Pittsburgh,
Pennsylvania, Policy No. 4455673.
"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 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
47
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 AGENT" has the meaning set forth in Recital E.
"ESTIMATED CLOSING WORKING CAPITAL" has the meaning set forth in Section 2.4(b).
"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.
"EXPENSE REIMBURSEMENT" means reimbursement to Buyer of its actual documented
out-of-pocket expenses (including professional fees) incurred in connection with
the transactions contemplated by this Agreement, including expenses associated
with obtaining the Financing, not to exceed $500,000.
"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
48
certiorari, reargument, or rehearing thereof has been sought, such order of the
Bankruptcy 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.
"FINAL WORKING CAPITAL" shall mean the sum of (i) the lesser of (A) Closing
Working Capital or (B) the sum of $10,000,000 plus the Target Closing Working
Capital, (ii) the aggregate amount of the estimated realizable value for all of
the Nonoperating Assets set forth on Schedule 1.8 that are included in the
definition of Acquired Assets and (iii) the product of (A) $23 and (B) the
number of tons of blast furnace coke purchased by ISG from the Ukrainian Coke
Shipment provided, however, that such product shall not exceed $552,000.
"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.
"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).
"INTELLECTUAL PROPERTY" means any and all patents, patent applications,
trademarks, service marks, trade names, trade dress rights, internet domain
names, trade secrets and copyrights;
49
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.
"ISG" has the meaning set forth in the Preamble.
"ISG MATERIAL ADVERSE EFFECT" means a state of facts, events, change or effect
with respect to ISG and its subsidiaries that results in a material adverse
effect on the financial condition, business, operations, assets or liabilities
of ISG 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.
"ISG REPORTS" has the meaning set forth in Section 4.2(g)(ii).
"ISU" means Independent Steelworkers Union.
"KNOWLEDGE OF BUYER" or any other similar term or knowledge qualification means
the actual knowledge of Xxxxxx Xxxxxxx and Xxxxxxx Xxxxxxx.
"KNOWLEDGE OF SELLERS" or any other similar term or knowledge qualification
means the actual knowledge of D. Xxxxxxx Xxxx, the Chief Executive Officer of
Sellers, Xxxx X. Xxxxxx, President and Chief Financial Officer, and Xxxx
Xxxxxxxx, 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.
"LENDERS' CONSENT" means the consent of Buyer's Lenders as required under that
certain Credit and Guaranty Agreement dated as of May 7, 2003 among ISG and
certain of its subsidiaries and the financial institutions party thereto as
lenders and agents.
"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.
"NET WORKING CAPITAL" shall mean the excess of the sum of (i) Accounts
Receivable and Inventory of Sellers over (ii) the aggregate amount of the
Specified Liabilities.
"NON-COVERED ASSETS" has the meaning set forth in Section 10.1(c)(ii).
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"NONOPERATING ASSETS" has the meaning set forth in Section 1.8.
"OFFERING" shall mean any offering of securities of ISG, any Affiliate of ISG or
any other Person, whether offered or sold in a registered public offering or in
a private placement.
"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.
"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.
"PERFORMANCE DEPOSIT" has the meaning set forth in Recital E.
"PERFORMANCE ESCROW AGREEMENT" has the meaning set forth in Recital E.
"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.
"PROSPECTUS" has the meaning set forth in Section 4.2(g)(i).
51
"PURCHASE PRICE" has the meaning set forth in Section 2.1.
"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, 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.
"SECURITIES ACT" has the meaning set forth in Section 4.2(g)(ii).
"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. Sellers Material Adverse
Effect does not include any decrease in the amount of the Net Working Capital
that results in a decrease to the Purchase Price under Article 2.
"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.
"SPECIFIED LIABILITIES" shall mean the sum of (i) Accounts Payable (taking into
account any Accounts Payable that are excluded pursuant to Section 2.2), (ii)
the liabilities described in Section 1.3(d), Section 1.3(e) (taking into account
any Payroll Liabilities that are excluded
52
pursuant to Section 2.2), Section 1.3(g) and (iii) the reserve reflecting the
Sellers' estimate of any liability described in Section 1.3(f) provided,
however, that if ISG or Buyer negotiates any reduction in the amount of the
Specified Liabilities and in the case of Accounts Payable, such reduction is not
due to the exclusion of such Accounts Payable pursuant to Section 2.2, then such
reduction in Specified Liabilities will not be taken into account in calculating
Net Working Capital.
"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).
"SUPERIOR BID" has the meaning set forth in Section 10.1(b)(ii).
"SUPPLIES" means all supplies, items and materials (including spare parts) owned
by Sellers on the Closing Date.
"TARGET WORKING CAPITAL" shall mean the sum of (i) $141,700,000, (ii) the
aggregate amount of Accounts Payable, if any, excluded pursuant to Section 2.2,
and (iii) the aggregate amount of the Payroll Liabilities described in items 6
and 17 of Schedule 1.3(e) that were not assumed by Buyer.
"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.
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"TRADING PERIOD" means the ten-day trading period commencing 15 trading days
prior to the Closing Date and ending on the close of business of the sixth
trading day prior to the Closing Date.
"TRANSACTION TAXES" has the meaning set forth in Section 6.1.
"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.
"UKRAINIAN COKE SHIPMENT" means the shipment of approximately 24,000 tons of
blast furnace coke to ISG from the Ukraine.
"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).
"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.]
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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:
ISG WEIRTON INC.
By: /s/ Xxxxxx X. Xxxx
--------------------------------------------
Name: Xxxxxx X. Xxxx
Title: President and Chief Executive Officer
SELLERS:
WEIRTON STEEL CORPORATION
By: /s/ D. Xxxxxxx Xxxx
--------------------------------------------
Name: D. Xxxxxxx Xxxx
Title: Chief Executive Officer
FW HOLDINGS INC.
By: /s/ Xxxx X./ Xxxxxx
--------------------------------------------
Name: Xxxx X. Xxxxxx
Title: President
WEIRTON VENTURE HOLDINGS CORPORATION
By: /s/ Xxxx X./ Xxxxxx
--------------------------------------------
Name: Xxxx X. Xxxxxx
Title: President
ISG:
INTERNATIONAL STEEL GROUP INC.
By: /s/ Xxxxxx X. Xxxx
--------------------------------------------
Name: Xxxxxx X. Xxxx
Title: President and Chief Executive Officer
