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Exhibit 10.1
ASSUMPTION, MODIFICATION AND TRANSITION AGREEMENT
THIS ASSUMPTION, MODIFICATION AND TRANSITION AGREEMENT (the "Agreement")
is entered into as of the 9th day of March, 2000 by and between GENEVA STEEL
COMPANY, Debtor and Debtor in Possession ("Geneva") and MANNESMANN PIPE AND
STEEL COMPANY, a New York corporation ("Mannesmann").
Recitals:
A. Geneva and Mannesmann entered into a certain Amended and Restated
Sales Representation Agreement dated October 30, 1998, as amended (the
"Representation Agreement"), wherein Mannesmann agreed to provide certain
services and Geneva granted to Mannesmann certain rights in connection with the
sale and distribution of Products in a Territory, as such terms are used in the
Agreement.
B. Geneva is currently a debtor-in-possession in a bankruptcy proceeding
under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code")
pending in the United States Bankruptcy Court for the District of Utah as Case
Number 00-0-00000 (the "Chapter 11 Proceeding").
C. Geneva desires to assume the Representation Agreement pursuant to
Section 365(a) of the Bankruptcy Code, and Mannesmann desires to consent to such
assumption, subject to the releases, terms and conditions set forth herein.
D. Once assumed, the parties have determined that it is in their mutual
interests to terminate the Representation Agreement as of June 30, 2000 and
provide for the orderly transition to Geneva of the services, customers and
certain employees affected by such termination.
Agreement:
NOW, THEREFORE, in consideration of the promises and covenants set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Mannesmann and Geneva agree as
follows:
1. DEFINITIONS. The capitalized terms used in this Agreement shall have
the same meanings ascribed to such terms in the Representation Agreement.
2. ASSUMPTION. Subject to Bankruptcy Approval, as hereinafter defined,
Geneva hereby assumes the Representation Agreement pursuant to Section 365(a) of
the Bankruptcy Code. Mannesmann hereby consents to and accepts such assumption
and agrees that any and all defaults of the Representation Agreement, cure
obligations, if any, and obligations to provide adequate assurance of future
performance with respect thereto pursuant to Section 365(b) of the Bankruptcy
Code, have been fully satisfied.
3. TERMINATION DATE. The Representation Agreement is hereby modified so
that it shall automatically terminate as of 11:59 p.m. Mountain Standard Time on
June 30, 2000 (the "Termination Date"). Prior to the Termination Date,
Mannesmann and Geneva shall perform in accordance with the terms and conditions
of the Representation Agreement.
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4. POST TERMINATION TRANSITION. The provisions of this Section 4 shall
apply commencing on the Termination Date notwithstanding anything in the
Representation Agreement to the contrary:
4.1. Employees. The parties agree that the provisions of Sections
3.3(a), (b) and (c) of the Representation Agreement shall continue to apply
through and including 11:59 p.m. on July 31, 2000.
4.2. Assignment of Open Accounts. On September 30, 2000,
Mannesmann shall assign to Geneva any and all receivables for Products sold by
Mannesmann on or before the date of termination and which remain uncollected on
such date and Geneva will fund such receivables to Mannesmann within five (5)
days after having received notice of such assignment.
4.3. Geneva Option. Notwithstanding the payment dates provided
for in Section 4.2 above, if the aggregate of such payment exceeds $3 million
Geneva shall have the right to defer the assignment of Open Accounts and payment
of such amount through and including December 28, 2000 upon the giving of at
least thirty (30) days prior written notice to Mannesmann.
4.4. Administration of Open Orders. Mannesmann, upon Geneva's
request, shall continue to administer all orders that are open on the
Termination Date, including, but not limited to, making payment for any material
delivered or produced and identified to such orders, such payment to be made by
Mannesmann in accordance with the terms provided for in the Representation
Agreement. The administration of any orders which remain open after September
30, 2000 shall become the responsibility of Geneva, and any payments which
Mannesmann may have made for material under such orders that remain undelivered
at such time shall be refunded to Mannesmann no later than October 5, 2000. If
any warehouse receipt has been issued for any of the material covered by such
order, as a condition to such payment Mannesmann shall deliver to Geneva the
original of such warehouse receipt(s) and thereupon title to such material shall
vest in Geneva. Mannesmann shall promptly cause any protective form UCC-1 filed
in any state with respect to such material to be terminated and released of
record.
4.5. No Affect on Other Provisions. Except as expressly set forth
in this Section 4, the provisions of the Representation Agreement intended to
survive termination shall survive such termination, including, but not limited
to, the provisions of Section 3.3(d) and Section 12 thereof which the parties
hereby agree shall apply in full force and effect notwithstanding the
termination effected by this Agreement.
5. EX-L-TUBE SETTLEMENT. Concurrently with the execution of this
Agreement, the parties agree to enter into that certain Settlement Agreement
among Geneva, Mannesmann and Ex-L-Tube, Inc. ("Ex-L-Tube") attached as Exhibit 5
hereto (the "Ex-L-Tube Settlement"). The Ex-L- Tube Settlement Agreement
provides for an initial payment to Geneva by Ex-L-Tube of $2.0 million (the
"Initial Settlement Amount"). Upon receipt by Geneva of the Initial Settlement
Amount from Ex-L-Tube, Geneva shall pay to Mannesmann the sum of $700,000.00
which payment shall represent Mannesmann's
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entire right, title or interest in any amounts to be received by Geneva from
Ex-L-Tube pursuant to the such Settlement Agreement. In no event shall
Mannesmann be entitled to receive from Ex-L-Tube or Geneva any other amount, and
Mannesmann hereby waives any claim or right or remedy against Ex-L-Tube or
Geneva in relation to the matters that are the subject of the
Ex-L-Tube-Settlement, including any right to any additional payment. In the
event the payment of the Initial Settlement Amount received by Geneva from
Ex-L-Tube should for any reason subsequently be determined to be void, avoidable
or the property of another, in whole or in part, including, without limitation,
fraudulent conveyances, preferential transfers or property subject to a prior
perfected security interest or lien of another entity, and if Geneva is required
to repay or restore any portion thereof, or, upon the advice of Geneva's
counsel, does so after demand, then, as to such amount repaid or restored,
Mannesmann shall immediately pay to Geneva its pro rata portion of such amount
repaid or restored.
6. WAIVER OF PRE-PETITION CLAIMS BY MANNESMANN. In consideration of
Geneva's entering into this Agreement, Mannesmann has agreed to waive and
release and hereby waives and releases all pre-petition claims, disputes and
controversies against Geneva arising out of the Representation Agreement and
relating in any way to periods prior to the commencement of the Chapter 11
Proceeding , including, without limitation all such claims of Mannesmann filed
or listed, or which could have been filed or listed, in the Chapter 11
Proceeding but excluding those pre-petition product claims, if any, identified
in Section 8 hereof. Without limiting the generality of the foregoing,
Mannesmann expressly waives and releases all claims identified in the Proof of
Claim filed by Mannesmann on July 30, 1999, a copy of which is attached hereto
as Exhibit 6.
7. MUTUAL RELEASE OF CLAIMS. In consideration of Mannesmann's release of
its Proof of Claim and Geneva's assumption of the Representation Agreement, the
parties hereby release and discharge each other from all claims and obligations,
except for the obligations set forth in and claims arising under this Agreement
and, subject to Section 6 hereof, the Representation Agreement as assumed.
8. PRODUCT CLAIMS. Geneva agrees that the provisions of Section 4 of the
Representation Agreement shall continue in full force and effect with respect to
Products produced by Geneva and sold under the Representation Agreement.
9. BANKRUPTCY COURT APPROVAL. The rights and obligations of the parties
hereto are subject to the approval ("Bankruptcy Approval") of the United States
Bankruptcy Court for the District of Utah in the Chapter 11 Proceeding. In the
event the Bankruptcy Court does not approve this Agreement by June 30, 2000,
this Agreement shall automatically expire and be of no further force or effect
unless extended by the written agreement of Geneva and Mannesmann. Each of the
parties hereto agrees to use commercially reasonable efforts to obtain the
Bankruptcy Approval.
10. INCORPORATION BY REFERENCE. Sections 15 through 26 of the
Representation Agreement (excluding Section 22 thereof) are hereby incorporated
herein by reference as if they had been set forth herein in their entirety.
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11. ENTIRE AGREEMENT. The provisions set forth in this Agreement (or
incorporated herein by reference) contain the entire understanding between the
parties with respect to the subject matter hereof and supercede all prior
understandings between the parties with respect to the termination of the
Representation Agreement and the transition necessitated thereby.
12. COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be executed
in any number of counterparts, each of which shall constitute one agreement.
Facsimile signatures shall have the same force and effect as original
signatures.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first above written.
"Mannesmann"
MANNESMANN PIPE & STEEL CORPORATION
a New York corporation
By /s/ Xxx X. Xxxxxx
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Its Vice President of Finance
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"Geneva"
GENEVA STEEL COMPANY,
Debtor and Debtor in Possession
By /s/ Xxx X. Xxxxxxx
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Xxx X. Xxxxxxx
Executive Vice President
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