Exhibit 99.1
------------
ASSET PURCHASE AGREEMENT
by and among
RT ACQUISITION LLC
as Purchaser,
and
REPUBLIC TECHNOLOGIES INTERNATIONAL, LLC,
NIMISHILLEN & TUSCARAWAS, LLC,
BLISS & XXXXXXXX, LLC,
REPUBLIC TECHNOLOGIES INTERNATIONAL HOLDINGS, LLC
and
RTI CAPITAL CORP.
as Sellers
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS.............................................................................................2
Section 1.1 Definitions...................................................................................2
Section 1.2 Terms Generally..............................................................................12
ARTICLE II PURCHASE AND SALE OF ASSETS...........................................................................13
Section 2.1 Purchase and Sale of the Purchased Assets....................................................13
Section 2.2 Excluded Assets..............................................................................15
ARTICLE III LIABILITIES ASSUMED..................................................................................16
Section 3.1 Assumption of Liabilities....................................................................16
ARTICLE IV PURCHASE PRICE........................................................................................20
Section 4.1 Purchase Price for Purchased Assets..........................................................20
Section 4.2 Payment of Purchase Price....................................................................20
ARTICLE V REPRESENTATIONS AND WARRANTIES AND RELATED UNDERTAKINGS................................................21
Section 5.1 Representations and Warranties of Sellers....................................................21
Section 5.2 Representations and Warranties of Purchaser..................................................35
Section 5.3 Amendments to Disclosure Schedules...........................................................36
ARTICLE VI EMPLOYEE MATTERS......................................................................................36
Section 6.1 Employees....................................................................................36
Section 6.2 Employee Benefit Plans.......................................................................37
Section 6.3 Workers' Compensation........................................................................39
Section 6.4 Management Incentive Plans...................................................................39
Section 6.5 Mutual Cooperation...........................................................................39
ARTICLE VII TAX MATTERS..........................................................................................40
Section 7.1 Transfer Taxes...............................................................................40
Section 7.2 Proration of Real and Personal Property Taxes................................................40
Section 7.3 Tax Returns; Cooperation on Tax Matters......................................................41
Section 7.4 Allocation Purchase of Price and Purchase Price Allocation Forms.............................42
ARTICLE VIII COVENANTS AND ADDITIONAL AGREEMENTS.................................................................42
Section 8.1 Approval Proceedings.........................................................................42
Section 8.2 Good Faith Deposit...........................................................................42
Section 8.3 Access to Information, Confidentiality.......................................................43
Section 8.4 Notification of Certain Matters..............................................................44
Section 8.5 HSR Act......................................................................................44
Section 8.6 Filings and Approvals Regarding the Railroad Subsidiary......................................45
Section 8.7 Further Action...............................................................................45
Section 8.8 Conduct of the Business......................................................................46
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Section 8.9 Non-Assignable Contracts.....................................................................48
Section 8.10 Acquisition Agreements.......................................................................48
Section 8.11 Indemnification Agreements...................................................................49
Section 8.12 Litigation...................................................................................49
Section 8.13 Public Announcements.........................................................................50
Section 8.14 Filings and Authorizations...................................................................50
Section 8.15 Amendment to List of Purchased Contracts.....................................................50
Section 8.16 Use of Cartersville Proceeds.................................................................50
Section 8.17 Insurance....................................................................................51
Section 8.18 Bulk Sale....................................................................................51
Section 8.19 Creation of Easement.........................................................................51
ARTICLE IX CONDITIONS TO THE CLOSING.............................................................................51
Section 9.1 Conditions to Obligations of Purchaser.......................................................51
Section 9.2 Conditions to Obligations of Seller..........................................................53
ARTICLE X CLOSING ...............................................................................................54
Section 10.1 Closing......................................................................................54
Section 10.2 Documents to be Delivered at Closing by Sellers..............................................54
Section 10.3 Documents to be Delivered at Closing by Purchaser............................................56
ARTICLE XI INDEMNIFICATION.......................................................................................56
Section 11.1 Survival; Representations and Warranties.....................................................56
Section 11.2 Indemnification of Purchaser.................................................................57
Section 11.3 Indemnification of Sellers...................................................................57
Section 11.4 Limitation on Seller' Indemnification Liability..............................................57
Section 11.5 Limitation on Purchaser's Indemnification Liability..........................................58
Section 11.6 Satisfaction of Purchaser Claims.............................................................58
ARTICLE XII TERMINATION, AMENDMENT AND WAIVER....................................................................58
Section 12.1 Termination..................................................................................58
Section 12.2 Effect of Termination........................................................................60
Section 12.3 Break-Up Fee; Expense Reimbursement..........................................................60
ARTICLE XIII MISCELLANEOUS.......................................................................................61
Section 13.1 Expenses.....................................................................................61
Section 13.2 Governing Law; Forum.........................................................................61
Section 13.3 Notices......................................................................................61
Section 13.4 Headings.....................................................................................62
Section 13.5 No Assignment; Benefit to Third Parties......................................................62
Section 13.6 Entire Agreement.............................................................................63
Section 13.7 Counterparts.................................................................................63
Section 13.8 Waiver.......................................................................................63
Section 13.9 Amendment....................................................................................63
Section 13.10 Severability.................................................................................63
Section 13.11 Further Assurances...........................................................................63
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EXHIBITS
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Assumption Agreement Exhibit A
Bidding Procedures Order Exhibit B
Xxxx of Sale Exhibit C
Lender Retention Program Exhibit D
Successor Labor Agreement Exhibit E
Limited Warranty Deed Exhibit F
lease assignment and assumption agreement Exhibit G
Seller's Officer's Certificate Exhibit H
Seller's Secretary Certificate Exhibit I
Sellers' FIRPTA Certificate Exhibit J
Purchaser's Officer's Certificate Exhibit K
Purchaser's Secretary Certificate Exhibit L
Indemnity Interest Formula Exhibit M
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SCHEDULES
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Excluded Plants Schedule 1.1
Real Property Schedule 2.1(a)
Owned Machinery and Equipment Schedule 2.1(b)
Railroad Subsidiary Assets Schedule 2.1(d)
Seller's Corporate Headquarters Assets Schedule 2.1(e)
Purchased Plants - Fixed Assets Schedule 2.1(f)
Purchased Contracts Schedule 2.1(k)
Claims of Credit Schedule 2.1(n)
Sellers Excluded Assets or Properties Schedule 2.2(b)
Excluded Real Property Schedule 2.2(f)
Consents, Approvals or Authorizations Schedule 5.1(c)
Intellectual Property Rights Schedule 5.1(d)
Material Contracts Schedule 5.1(e)(i)
Terminated Material Contracts; Cure Amounts Schedule 5.1(e)(ii)
Non-Violative Agreement Exceptions Schedule 5.1(g)
Governmental Authority - Permits and Licenses Schedule 5.1(h)
Owned Real Property Schedule 5.1(i)
Leased Real Property Schedule 5.1(j)
Violations; Defects Schedule 5.1(m)
Tax Certiorari Proceedings Schedule 5.l(p)
Certain Actions Schedule 5.1(q)
Compliance With Laws Schedule 5.1(r)(i)
Environmental Matters Schedule 5.1(r)(ii)
Employee Matters Schedule 5.1(s)
Employer Plan Liability Schedule 5.1(t)(i)
Liability Under Employee Benefit Plans Subject to Non-U.S. Laws Schedule 5.1(t)(ii)
Unaudited Financial Statements Schedule 5.1(u)(iii)
Tax Matters Schedule 5.1(v)
35 Largest Customers Schedule 5.l(w)(i)
35 Largest Suppliers Schedule 5.1(w)(ii)
Customer and Supplier Status Schedule 5.1(w)(iii)
Inventory Schedule 5.1(x)
Affiliate Transactions Schedule 5.1(y)
Insurance Schedule 5.1(aa)
Certain Changes or Events Schedule 5.1(bb)
Fees Schedule 5.1(dd)
Litigation Schedule 5.1(gg)
Vacation Accruals Schedule 6.2(b)
Key Managers Schedule 6.4(a)
Key Management Severance and Termination Plans Schedule 6.4(b)
System-Wide or Regional Changes Schedule 8.8(i)
Prohibited Agreements Schedule 8.8(j)
Indemnification Agreements Schedule 8.11
Consents and Approvals Related to Purchased Contracts Schedule 9.1(e)
Required Consents and Approvals Schedule 9.2(e)
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ASSET PURCHASE AGREEMENT
------------------------
This ASSET PURCHASE AGREEMENT, dated as of June 7, 2002, by
and among REPUBLIC TECHNOLOGIES INTERNATIONAL, LLC, a Delaware limited liability
company ("Republic"), NIMISHILLEN & TUSCARAWAS, LLC, a Delaware limited
liability company, BLISS & XXXXXXXX, LLC, a Delaware limited liability company,
REPUBLIC TECHNOLOGIES INTERNATIONAL HOLDINGS, LLC, a Delaware limited liability
company, and RTI CAPITAL CORP., a Delaware corporation (together with Republic,
"Sellers" and each a "Seller") which Sellers, other than Nimishillen &
Tuscarawas, LLC, are debtors in possession under Chapter 11 of Title 11, United
States Code (as amended from time to time, the "Bankruptcy Code"), and RT
ACQUISITION LLC, a Delaware limited liability company ("Purchaser").
WHEREAS, Sellers have determined that it is in their best
interest to sell to Purchaser and Purchaser desires to purchase certain of the
assets used or usable in connection with Sellers' business (the "Business"), and
Purchaser desires to assume certain specified liabilities of Sellers which are
related to the Business, all on the terms and subject to the conditions set
forth in this Agreement; and
WHEREAS, Republic and certain of its subsidiaries commenced
cases in the United States Bankruptcy Court for the Northern District of Ohio,
Eastern Division under Chapter 11 of the Bankruptcy Code on April 2, 2001
(collectively, the "Chapter 11 Cases"); and
WHEREAS, Republic and certain of its subsidiaries continue in
the management and possession of their properties as debtors in possession in
the Chapter 11 Cases pursuant to sections 1107(a) and 1108 of the Bankruptcy
Code and, following approval of this Agreement, subject to the terms and
conditions of this Agreement; and
WHEREAS, the transactions contemplated by this Agreement have
been implemented through the filing of a motion seeking the entry of an order by
the Bankruptcy Court approving this Agreement and the terms of the sale of the
Purchased Assets and the assumption of the Assumed Liabilities pursuant to
Section 363 of the Bankruptcy Code in accordance with the terms of this
Agreement; and
WHEREAS, subject to the entry of the Sale Order and on the
terms and conditions set forth herein, Purchaser shall purchase the Purchased
Assets and assume the Assumed Liabilities of Sellers.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements hereinafter set forth, the parties hereto agree
as follows:
ARTICLE I
DEFINITIONS
-----------
Section 1.1 Definitions. As used in this Agreement, the following terms
shall have the following meanings:
"Acquisition Agreements" has the meaning set forth in Section
8.10.
"Action" means any claim, charge, action, suit, arbitration,
mediation, inquiry, proceeding or investigation by any Person or Governmental
Authority before any Governmental Authority.
"Adjustment Date" has the meaning set forth in Section 7.2.
"Affiliate" of a Person means any other Person that directly
or indirectly, through one or more intermediaries, Controls, is Controlled by,
or is under common Control with, the first mentioned Person.
"Agreement" means this Agreement, including the Schedules and
the Exhibits, as amended from time to time in accordance with its terms.
"Allocation" has the meaning set forth in Section 7.4.
"Approvals" means all certificates, licenses, permits or other
approvals required to be obtained by Seller or its Subsidiaries in connection
with the use or ownership of its or their assets or properties or the operation
of its or their business.
"Assets" means the assets of every type and description,
tangible or intangible, real or personal that are owned, leased or licensed by
any Seller.
"Assumed Liabilities" has the meaning set forth in Section
3.1(a).
"Assumption Agreement" means one or more assignment and
assumption agreements in substantially the form attached to this Agreement as
Exhibit A.
"Attendant Documents" has the meaning set forth in Section
5.1(a).
"Auction" means, as more fully described in the Bidding
Procedures Order, the auction to be held prior to the Sale Hearing for
consideration of qualifying higher and better offers that may be presented to
Sellers.
"Audited Financial Statements" has the meaning set forth in
Section 5.1(u)(ii).
"Bank Lenders" means the institutional lenders that are
parties to the Debtor-in-Possession Revolving Credit Facility at the date
hereof.
"Bankruptcy Code" has the meaning set forth in the Preamble.
2
"Bankruptcy Court" means the United States Bankruptcy Court
for the Northern District of Ohio, Eastern Division, or such other court as may
have jurisdiction over the Chapter 11 Cases.
"Bidding Procedures Order" means the order of the Bankruptcy
Court entered on May 31, 2002, a copy of which is attached hereto as Exhibit B.
"Xxxx of Sale" means one or more bills of sale in
substantially the form attached to this Agreement as Exhibit C.
"Break-Up Fee" has the meaning set forth in Section 12.3.
"Business" has the meaning set forth in the Recitals.
"Business Combination" means with respect to any Person any
(a) merger, consolidation or combination to which such Person is a party, (b)
any sale, dividend, split or other disposition of any capital stock or other
equity interests of such Person, or any acquisition of capital stock or equity
interests or securities of such Person, representing in any such case at least
25% of such class of capital stock or equity interests, (c) any tender offer
(including, without limitation, a self-tender), exchange offer or
recapitalization for or affecting the outstanding equity or debt securities of
such Person, (d) any plan of reorganization under Chapter 11 of the Bankruptcy
Code, (e) any liquidation, dissolution or similar transaction involving such
Person, (f) any sale, dividend or other disposition of all or a material portion
of the assets of such Person or (g) the entering into of any agreement or
understanding, or the granting of any rights or options, with respect to any of
the foregoing.
"Business Day" means any day that is not a Saturday, a Sunday
or other day on which banks are required or authorized by Law to be closed in
the City of New York.
"Canadian Steel Asset Purchase Agreement" means the asset
purchase agreement by and between Purchaser and Canadian Drawn Steel Company,
Inc., a wholly owned Subsidiary of Republic pursuant to which Purchaser will
purchase substantially all of the assets of such subsidiary in the form
reasonably acceptable to each of Purchaser and Republic.
"Canton EPA Corrective Action Order" means the Administrative
Order on Consent (U.S. EPA Docket No. R8H-5-99-006) ordered by the U.S.
Environmental Protection Agency, Region 5, on June 16, 1999 proceeding under
Section 3008(h) of the Resource Conservation and Recovery Act, as amended, in
the matter of Republic Engineered Steels, Inc., with respect to the facility at
0000 Xxxxxx Xxxxxx X.X., Xxxxxx, Xxxx 00000.
"Cartersville Asset Sale" means the sale of certain assets
associated with the Cartersville Cold Finishing Plant, located in Cartersville,
Georgia pursuant to the terms of that certain asset purchase agreement, dated as
of May 20, 2002, by and between Republic and AmeriSteel Corporation.
"Cash Consideration" has the meaning set forth in Section
4.1(a).
"Chapter 11 Cases" has the meaning set forth in the Recitals.
3
"Chapter 11 Expenses" means the costs incurred and expenses
paid or payable by Debtor Sellers in connection with the administration of the
Chapter 11 Cases, including, without limitation, (a) fees and expenses related
to the Debtor-in-Possession Revolving Credit Agreement, (b) obligations to pay
professionals' fees and expenses in connection with the Chapter 11 Cases
(including, without limitation, fees of attorneys, accountants, investment
bankers, financial advisors, and consultants retained by Debtor Sellers, the
Creditors' Committee or the pre-petition lenders, and any compensation for
making a substantial contribution in the Chapter 11 Cases) and reimbursement of
any expenses incurred by Debtor Sellers prior to the Closing Date in connection
therewith (including, without limitation, any obligations to pay any holdback of
any such fees and expenses), (c) fees and expenses payable to the United States
trustee under Section 1930 of title 28, United States Code and (d) expenses of
members of the Creditors' Committee.
"Closing" has the meaning set forth in Section 10.1.
"Closing Date" has the meaning set forth in Section 10.1.
"Code" means the Internal Revenue Code of 1986, as amended,
together with the rules and regulations promulgated thereunder.
"Competing Bid" means a Qualified Bid that is determined to be
the highest or best offer at the Auction in accordance with the procedures set
forth in the Bidding Procedures Order.
"Competing Bidder" means a Person other than Purchaser that
submits a Qualified Bid.
"Conducted" has the meaning set forth in Section 5.1(a).
"Contract" means any written agreement, arrangement,
understanding, lease or instrument or other contractual or similar arrangement.
"Control" (including the terms "Controlled by" and "under
common Control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the management
policies of a Person, whether through the ownership of capital stock, including
as trustee (other than a Chapter 11 trustee) or executor, by contract or credit
arrangement or otherwise.
"Copyrights" has the meaning set forth in Section 2.1(i).
"Creditors' Committee" means the statutory committee of
unsecured creditors appointed by the United States trustee in the Chapter 11
Cases.
"Cure Costs" means all monetary liabilities, including
pre-petition monetary liabilities, of Debtor Sellers that must be paid or
otherwise satisfied to cure all of each Debtor Seller's monetary defaults under
the Purchased Contracts or Reference Leases at the time of the assumption
thereof and assignment to Purchaser as provided hereunder as such amounts are
determined by the Bankruptcy Court.
4
"DB Plan" means a defined benefits plan as described in
Section 3(35) of ERISA.
"Debtor-in-Possession Revolving Credit Agreement" means the
Debtor-in-Possession Revolving Credit Agreement, dated as of April 3, 2001,
among Republic, Republic's subsidiary guarantors that are a party thereto and
the Bank Lenders, as supplemented or modified from time to time.
"Debtor Sellers" means those Sellers that are named as debtors
and debtors-in-possession in the Chapter 11 Cases.
"DOJ" has the meaning set forth in Section 8.5(b).
"Employee Benefit Plan" means (1) each employee benefit plan
within the meaning of Section 3(3) of ERISA and (2) each personnel policy; stock
option plan; collective bargaining agreement; bonus plan or arrangement;
incentive award plan or arrangement; workers' compensation program; vacation
policy; voluntary employees' beneficiary association (VEBA); severance pay plan,
policy or agreement; deferred compensation agreement or arrangement; executive
compensation or supplemental income arrangement; consulting agreement;
employment agreement; and other employee benefit plan, agreement arrangement,
program, practice, or understanding, which is sponsored, maintained, or
contributed to by Republic or any ERISA Affiliate for the benefit of any
employee(s), former employee(s), independent contractor(s), or agent(s) of
Republic or any ERISA Affiliate, or has been so sponsored, maintained, or
contributed to at any time since 1974.
"Encumbrance" means (except for any lien for Taxes not yet
due) any claim, liability, charge, lease, covenant, easement, encumbrance,
security interest, lien, option, pledge, right of others, mortgage,
hypothecation, conditional sale, or restriction (whether on voting, sale,
transfer, defenses, set-off or recoupment rights, disposition, or otherwise)
against or with respect to tangible or intangible property or rights, whether
imposed by agreement, understanding, law, equity, or otherwise, except for any
restrictions on transfer generally arising under any applicable federal or state
securities law.
"Environmental Law" has the meaning set forth in Section
5.1(r)(iii)(B).
"Environmental Reports" has the meaning set forth in Section
5.1(r)(iii)(C).
"Equipment" means all Owned Machinery and Equipment and all of
Sellers' equipment, machinery, furniture, fixtures and improvements and tooling
located at or associated with the operation of the Purchased Plants that are
leased pursuant to Purchased Contracts;
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, together with the rules and regulations promulgated
thereunder.
"ERISA Affiliate" has the meaning set forth in Section
5.1(t)(i).
"Escrow Agent" has the meaning set forth in Section 8.2.
"Excluded Assets" has the meaning set forth in Section 2.2
hereof.
5
"Excluded Contracts" means any Contracts to which any Seller
is a party or its assets are bound that are not Purchased Contracts.
"Excluded Liabilities" has the meaning set forth in Section
3.1(b).
"Excluded Plants" means the plants and xxxxx described on
Schedule 1.1.
"Expense Reimbursement Amount" has the meaning set forth in
Section 12.3.
"Final Order" means an order of the Bankruptcy Court (a) as to
which the time to appeal shall have expired and as to which no appeal shall then
be pending, or (b) if an appeal shall have been filed or sought, either (i) no
stay of the order shall be in effect or (ii) if such a stay shall have been
granted by the Bankruptcy Court, then (A) the stay shall have been dissolved or
(B) a final order of the district court having jurisdiction to hear such appeal
shall have affirmed the order and the time allowed to appeal from such
affirmance or to seek review or rehearing thereof shall have expired and the
taking or granting of any further hearing, appeal or petition for certiorari
shall not be permissible, and if a timely appeal of such district court order or
timely motion to seek review or rehearing of such order shall have been made,
any court of appeals having jurisdiction to hear such appeal or motion (or any
subsequent appeal or motion to seek review or rehearing) shall have affirmed the
district court's (or lower appellate court's) order upholding the order of the
Bankruptcy Court and the time allowed to appeal from such affirmance or to seek
review or rehearing thereof shall have expired and the taking or granting of any
further hearing, appeal or petition for certiorari shall not be permissible;
provided, however, that Purchaser in its sole discretion may treat as not being
a Final Order, any order for which an appeal, motion to seek review, motion to
seek rehearing, or any similar motion is pending notwithstanding that such order
is not then subject to stay.
"FTC" has the meaning set forth in Section 8.5(b).
"Good Faith Deposit" has the meaning set forth in Section 8.2.
"Governmental Authority" means any United States federal,
state or local, or any foreign, government, governmental, regulatory or
administrative authority, agency or commission or any court, tribunal or
judicial or arbitral body.
"Governmental Order" means any order, writ, judgment,
injunction, decree, stipulation, determination or award entered by or with any
Governmental Authority.
"Hazardous Substance" has the meaning set forth in Section
5.1(r)(iii)(A).
"Hired Employees" has the meaning set forth in Section 6.1(a).
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
"ICC Termination Act" means the ICC Termination Act of 1995,
as amended.
6
"Indebtedness" means, at any time and with respect to any
Person, (a) all indebtedness of such Person for borrowed money, (b) all
indebtedness of such Person for the deferred purchase price of property or
services (other than property, including inventory, and services purchased, and
trade payables, other expense accruals and deferred compensation items arising,
in the ordinary course of business, consistent with past practice), (c) all
obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments (other than performance, surety and appeal bonds arising in
the ordinary course of business in respect of which such Person's liability
remains contingent), (d) all indebtedness of such Person created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of Sellers
or lender under such agreement in the event of default are limited to
repossession or sale of such property), (e) all obligations of such Person under
leases which have been or should be, in accordance with U.S. GAAP, recorded as
capital leases, to the extent required to be so recorded, (f) all reimbursement,
payment or similar obligations of such Person, contingent or otherwise, under
acceptance, letter of credit or similar facilities, (g) all Indebtedness of
others referred to in clauses (a) through (f) above guaranteed directly or
indirectly by such Person, or in effect guaranteed directly or indirectly by
such Person through an agreement (i) to pay or purchase such Indebtedness or to
advance or supply funds for the payment or purchase of such Indebtedness, (ii)
to purchase, sell or lease (as lessee or lessor) property, or to purchase or
sell services, primarily for the purpose of enabling the debtor to make payment
of such Indebtedness, (iii) to supply funds to or in any other manner invest in
the debtor (including any agreement to pay for property or services irrespective
of whether such property is received or such services are rendered) or (iv)
otherwise to assure a creditor against loss in respect of such Indebtedness, and
(h) all Indebtedness referred to in clauses (a) through (g) above secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Encumbrance upon or in property (including,
without limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
Indebtedness, and including in clauses (a) through (h) above any accrued and
unpaid interest thereon.
"Indemnification Agreements" has the meaning set forth in
Section 8.11.
"Indemnification Claim" has the meaning set forth in Section
8.10.
"Indemnity Escrow" has the meaning set forth in Section 11.6.
"Indemnity Escrow Agreement" has the meaning set forth in
Section 11.6.
"Indemnity Interests" has the meaning set forth in Section
11.6.
"Insurance Policies" has the meaning set forth in Section
5.1(aa).
"Intellectual Property Rights" has the meaning set forth in
Section 2.1(i).
"Inventory" has the meaning set forth in Section 2.1(l).
"IRS" means the U.S. Internal Revenue Service.
7
"Key Managers" has the meaning set forth in Section 6.4(a).
"Knowledge" means the knowledge, after reasonable inquiry, of
any of the following executive officers and managers of Republic and other
Sellers: Xxxxxx X. Xxxxxxxx, Xxxx X. Xxxxxx, Xxxxxx X. Xxxxxx, Xxxxx X. Xxxxx,
Xxx Macuzak, Xxxxx Xxxx, Xxxxxxx Xxxxxxxxxx and Xxxx X. Xxxxxxxxxx.
"Law" means any federal, state, local or foreign statute, law,
ordinance, regulation, rule, code, order, other requirement or rule of law
(other than an Environmental Law).
"Lease Assignment and Assumption Agreement" has the meaning
set forth in Section 10.2(c).
"Lender Retention Program" means the plan or program attached
hereto as Exhibit D created for the benefit of each of the Key Managers and
certain other employees of Republic by the Bank Lenders pursuant to which the
Bank Lenders have agreed to provide compensation to such employees in order to
create an incentive for such Persons to complete any liquidation of Debtor
Sellers.
"Letter of Intent" means that certain letter of intent, dated
on or about May 17, 2002, between Republic and RTI Acquisition Corporation.
"Lorain Property" has the meaning set forth in Section 8.19.
"Material Adverse Effect" means, with respect to Sellers, any
change, circumstance or effect that, individually or in the aggregate with other
changes, circumstances and effects, is materially adverse to (i) the business,
operations, assets, liabilities, financial condition, results of operations or
prospects of such entity and its subsidiaries taken as a whole or (ii) the
validity or enforceability of this Agreement or the ability of Sellers to
perform their respective obligations hereunder in a timely fashion.
"Material Contracts" has the meaning set forth in Section
5.1(e).
"New Credit Facility" means an amended and restated credit
facility by and among Purchaser, or any affiliated designee of Purchaser, and
the Bank Lenders to be executed at Closing to refinance up to a maximum amount
of Three Hundred Twenty Million U.S. Dollars ($320,000,000.00) of Indebtedness
at Closing under the Debtor-in-Possession Revolving Credit Facility.
"Non-Debtor Sellers" means those Sellers that are not named as
debtors or debtors-in-possession in the Chapter 11 Cases.
"Owned Machinery and Equipment" has the meaning set forth in
Section 2.1(b).
"Patents" has the meaning set forth in Section 2.1(i).
8
"Permits" means licenses, franchises, permits, certificates of
authority, authorizations, approvals, registrations, franchises and similar
consents granted from any Governmental Authority.
"Permitted Real Estate Liens" means (i) all presently existing
and future liens of real estate taxes or assessments and water rates, water
meter charges, water frontage charges and sewer taxes, rents and charges, if
any, provided that such items are not yet due and payable and are apportioned to
the extent provided in this Agreement; (ii) rights of tenants in possession, if
any, under leases disclosed by Sellers to the Purchaser provided same does not
materially and adversely affect the use and operation of the applicable parcel
of Real Property as currently being used and operated by the applicable Seller;
(iii) unpaid state and local franchise, general corporation and/or income taxes,
mechanics liens, or other monetary liens; provided that, based upon a deposit by
any Seller with the Title Company, an indemnity by any Seller to the Title
Company, the order of a bankruptcy court having jurisdiction, or other
assurances by the applicable Seller to the Title Company, such Seller is able to
induce the Title Company to omit such lien or encumbrance as an exception to
title, or insure against its collection out of or enforcement against the
applicable Real Property with respect to the applicable Title Policy issued by
the Title Company; (iv) such matters as the Title Company shall be willing to
omit as exceptions to coverage or, subject to Purchaser's reasonable approval,
by endorsement in form and substance acceptable to Purchaser in its reasonable
discretion, insure against collection out of or enforcement against such Real
Property, with respect to the applicable Title Policy issued by the Title
Company; (v) minor variations between the tax lot lines and the legal
description of each parcel of Real Property; or (vi) any other matter or thing
affecting title to any parcel of Real Property that does not materially and
adversely affect the marketability or the use and operation of the applicable
parcel of Real Property as such parcel of Real Property is currently used and
operated.
"Person" means an individual, corporation, partnership,
association, limited liability company, trust, joint venture, unincorporated
organization, other entity or group (as defined in Section 13(d)(3) of the
Securities and Exchange Act of 1934, as amended).
"Purchase Price" has the meaning set forth in Section 4.1(a).
"Purchased Assets" has the meaning set forth in Section 2.1.
"Purchased Contracts" has the meaning set forth in Section
2.1(k).
"Purchased Plants" has the meaning set forth in Section
2.1(a).
"Purchaser" has the meaning set forth in the Preamble.
"Purchaser Interests" means membership interests of Purchaser.
"Purchaser Member" means a limited partnership to be formed by
affiliates of Purchaser which will be the sole member of Purchaser immediately
prior to the Closing.
"Purchaser Operating Agreement" means the amended and restated
limited liability company agreement among the Purchaser Member and Republic in
such form reasonably acceptable to each of Purchaser and Republic which
9
agreement shall, among other things, include the terms set forth in Sections
II.B and III.B.5 of the Letter of Intent.
"Purchaser Representatives" has the meaning set forth in
Section 8.3(c).
"Purchaser's Plans" has the meaning set forth in Section
6.2(a).
"Qualified Bid" means a bid submitted at the Auction to
purchase assets of Sellers pursuant to the Bidding Procedures Order.
"Railroad Subsidiary" has the meaning set forth in Section
2.1(d).
"Real Property" has the meaning set forth in Section 2.1(a).
"Reference Lease" means a lease, sublease, license, use or
occupancy agreement or other arrangement conveying the right to use real or
personal property (tangible or intangible, or a combination thereof) to be
assumed by Sellers and assigned to Purchaser as set forth on Schedule 5.1(j).
"Republic" has the meaning set forth in the Preamble.
"Required Creditor Notices" has the meaning set forth in
Section 8.1(c).
"Sale Hearing" means the hearing before the Bankruptcy Court
to approve this Agreement and the consummation of the transactions contemplated
by this Agreement as more fully described in the Bidding Procedures Order.
"Sale Order" means an order of the Bankruptcy Court in form
and substance satisfactory to Purchaser and Sellers granting, among other
things, (i) a general release by Sellers and the bankruptcy estate to Purchaser
at the time of Closing, including a release of successor liability, that
specifically, upon Closing, the Purchaser shall not be deemed to (A) be the
successor of Sellers, (B) have, de facto or otherwise, merged with or into the
Sellers, or (C) be a mere continuation or substantial continuation of Sellers or
the enterprise of the Sellers; (ii) that such sale shall be, pursuant to
Sections 105, 363(b) and 363(f) of the Bankruptcy Code, free and clear of all
Encumbrances other than Assumed Liabilities; (iii) that all agreements,
contracts, and leasehold interests required to be assumed by Sellers and
assigned to Purchaser are so assumed and assigned free and clear of all
Encumbrances and Excluded Liabilities other than Assumed Liabilities and
Permitted Real Estate Liens pursuant to Section 365 of the Bankruptcy Code; (iv)
that Purchaser is deemed to have purchased the Purchased Assets in good faith
pursuant to Section 363(m) of the Bankruptcy Code; and (v) that Sellers are
authorized and directed to execute, upon request by Purchaser, one or more
assignments in form, substance, and number reasonably acceptable to Purchaser,
evidencing the conveyance of the Purchased Assets to Purchaser.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" has the meaning set forth in the Preamble.
10
"Seller SEC Reports" has the meaning set forth in Section
5.1(u).
"Sellers" has the meaning set forth in the Preamble.
"Sellers' Employees" has the meaning set forth in Section
6.1(a).
"Senior Secured Notes" means the senior secured notes to be
governed by the Senior Secured Note Indenture and issued at Closing by Purchaser
or an affiliated designee of Purchaser in the aggregate principal amount equal
to the lesser of (i) 105% of the net orderly liquidation value of the assets
included in the Purchased Assets that secure the outstanding 13 3/4% Senior
Secured Notes of Republic, as agreed by Purchaser and the holders of such 13
3/4% Senior Secured Notes on the basis of a valuation provided by McDonald
Investments Inc. or as determined by the Bankruptcy Court or (ii) Fifty Million
U.S. Dollars ($50,000,000.00).
"Senior Secured Note Indenture" means the indenture governing
the Senior Secured Notes in such form reasonably acceptable to each of Purchaser
and Republic which agreement shall, among other things, include the terms set
forth in Section V of the Letter of Intent.
"Subsidiary" means any corporation, limited liability company,
partnership, joint venture or other legal entity of which any Seller or any
other Person, as the case may be (either alone or through or together with any
other Subsidiary), owns, directly or indirectly, 50% or more of the capital
stock or other equity interests the holders of which are generally entitled to
vote for the election of the board of directors or other governing body of such
corporation, limited liability company, partnership, joint venture or other
legal entity.
"Successor Labor Agreement" means the collective bargaining
agreement, dated on or about April 24, 2002, between Purchaser and the United
Steel Workers of America attached hereto as Exhibit E.
"Surveys" means current surveys of each parcel of owned Real
Property, prepared in insurable form in accordance with ALTA standards
applicable to registered and licensed land surveyors making surveys in the state
in which such Real Property is located.
"SWMU/AOC" has the meaning set forth in Section 3.1(a)(viii).
"Tax" or "Taxes" means any and all taxes, fees, levies,
duties, tariffs, imposts, and other charges of any kind (together with any and
all interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any Tax authority including, without limitation:
taxes or other charges on or with respect to income, franchises, windfall or
other profits, gross receipts, property, sales, use, capital stock, payroll,
employment, social security, workers' compensation, unemployment compensation,
or net worth; taxes or other charges in the nature of excise, withholding, ad
valorem, stamp, transfer, value added, or gains taxes; and customs' duties,
tariffs, and similar charges; and liability for the payment of any of the
foregoing as a result of (x) being a member of an affiliated, consolidated,
combined or unitary group, (y) being party to any tax sharing agreement and (z)
any obligation to indemnify any other Person with respect to the payment of any
of the foregoing.
11
"Tax Return" means any return, declaration, report, and claim
for refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"Third Party Lease" means each lease or other right of
occupancy affecting or relating to a property in which any Seller (or an entity
in which it directly or indirectly has an interest) is the landlord, either
pursuant to the terms of a lease agreement or as successor to any prior
landlord.
"Title Company" means any nationally recognized title
insurance company or companies engaged to deliver the Title Policies.
"Title Policies" means the ALTA owner's (extended coverage)
policies of title insurance with respect to each parcel of owned Real Property
issued by the Title Company.
"Trademarks" has the meaning set forth in Section 2.1(i).
"Transfer Tax" has the meaning set forth in Section 7.1.
"Transition Services Agreement" means the transition services
agreement between Purchaser and Republic pursuant to which Purchaser will be
permitted to remove certain assets from the Excluded Plants and Republic will
operate certain of the Excluded Plants designated by Purchaser in such form
reasonably acceptable to each of Purchaser and Republic which agreement shall
include the terms set forth in Section III.B.6 of the Letter of Intent.
"Unaudited Balance Sheet" has the meaning set forth in Section
5.1(u)(iii).
"Unaudited Financial Statements" has the meaning set forth in
Section 5.1(u)(iii).
"U.S. GAAP" means United States generally accepted accounting
principles in effect from time to time.
"WARN Act" means the Worker Adjustment and Retraining
Notification Act.
Section 1.2 Terms Generally. As used in this Agreement (a) words in the
singular shall be held to include the plural and vice versa, (b) words of one
gender shall be held to include the other genders as the context requires, (c)
the terms "hereof", "herein" and "herewith" and words of similar import shall,
unless otherwise stated, be construed to refer to this Agreement and not to any
particular provision of this Agreement, (d) references to Article, Section,
paragraph, Exhibit and Schedule are references to the Articles, Sections,
paragraphs, Exhibits and Schedules to this Agreement, unless otherwise
specified, (e) the word "including" and words of similar import when used in
this Agreement, shall mean "including, without limitation", unless otherwise
specified, and (f) the word "or" shall not be exclusive.
12
ARTICLE II
PURCHASE AND SALE OF ASSETS
---------------------------
Section 2.1 Purchase and Sale of the Purchased Assets. On the Closing
Date, Sellers shall transfer, sell, assign, and deliver to Purchaser, and
Purchaser shall purchase from Sellers, in each case on the terms and subject to
the conditions set forth in this Agreement and the Sale Order, all of Sellers'
right, title and interest in, to and under any and all assets, properties and
business of every kind and description, whether tangible or intangible, real,
personal or fixed wherever situated, owned, held or used by Sellers or in which
Sellers have any right, title or interest, other than the Excluded Assets (all
such assets, properties and business are referred to in this Agreement as the
"Purchased Assets"), free and clear of all Encumbrances, other than the Assumed
Liabilities and the Permitted Real Estate Liens. The Purchased Assets include,
without limitation, the following:
(a) all real property and leases or subleases of, and any
other interests in, real property used or owned or held for use in the Business
and listed on the attached Schedule 2.1(a) (the "Real Property"), in each case
together with all buildings and other structures, facilities or improvements
currently or hereafter located thereon, all fixtures of Sellers attached or
appurtenant thereto and all easements, licenses, rights and appurtenances
relating to the foregoing (the "Purchased Plants");
(b) all Sellers' owned equipment, machinery and tooling
located at or associated with the operation of the Purchased Plants and the
equipment, machinery, furniture, fixtures and improvements and tooling listed on
the attached Schedule 2.1(b) (the "Owned Machinery and Equipment");
(c) all cars, trucks, fork lifts, other industrial vehicles
and other motor vehicles owned by Sellers located at, or associated with, the
operation of the Purchased Plants;
(d) all Assets of Nimishillen & Tuscarawas, LLC (the "Railroad
Subsidiary"), including all owned, leased or subleased real property of the
Railroad Subsidiary, and any other interests in, real property used or owned by
the Railroad Subsidiary, rights of way, locomotives, cars and track repair
equipment, including, but not limited to, the Assets listed on the attached
Schedule 2.1(d);
(e) all Assets of or related to Republic's corporate
headquarters located at 0000 Xxxxxxx Xxxxxxx, Xxxxx, Xxxx, including, but not
limited to, the Assets listed on the attached Schedule 2.1(e);
(f) all furniture, fixtures, improvements and other fixed
assets that are located at or associated with the Purchased Plants, including
the assets listed on the attached Schedule 2.1(f);
13
(g) to the extent transferable under applicable Law and
applicable Environmental Law, all Permits used in the Business in conjunction
with the Purchased Assets and all pending applications therefor, including,
without limitation, those Permits described on the attached Schedule 5.1(h);
(h) customer relationships, the goodwill and all other
intangible assets relating to, symbolized by or associated with the Business;
(i) all (i) patents, patent applications, provisional patent
applications, patent disclosures, and all related continuation,
continuation-in-part, divisional, reissue, re-examination, utility model,
certificate of invention and design patents, patent application, registrations
and applications for registrations ("Patents"), (ii) trademarks, service marks,
trade dress, logos, trade names, domain names and corporate names and
registrations and applications for registration thereof ("Trademarks"), (iii)
copyrights, copyright applications and registrations ("Copyrights"), (iv)
commercial and technical trade secrets, know-how, confidential information,
other proprietary property rights and interests, and (v) licenses, engineering,
production and other designs, drawings, specifications, formulae, technology,
computer and electronic data processing programs and software, software
licenses, and proprietary property rights and interests and any licenses in
respect thereof (collectively, "Intellectual Property Rights") which are used in
connection with the operation of the Business, including those set forth on the
attached Schedule 5.1(d);
(j) copies or originals of all books, files and records used
in the Business relating to the Purchased Assets described in this Section 2.1,
including plans, data, test results, drawings, diagrams, employment records,
sales records, customer and supplier lists, advertising and promotional
materials, engineering data, safety and environmental reports and documents,
maintenance schedules and operating and production records, all other files,
indices, market research studies, surveys, reports, analyses and similar
information of every kind and nature, and in whatever format used in connection
with the operation of the Business;
(k) all contracts, agreements and purchase orders set forth on
Schedule 2.1(k) (the "Purchased Contracts");
(l) all items of inventory of the Business wherever located,
including, without limitation, raw materials, work in process, finished goods,
supplies used to operate and maintain the Equipment or process raw materials and
work in process, spare parts and supply and packaging items including any of the
aforementioned owned by Sellers but in the possession of manufacturers,
customers, suppliers or dealers, or in transit or returned goods ("Inventory"),
which, for avoidance of doubt, includes any Inventory related to or located at
any of the Excluded Plants;
(m) all notes (including notes from employees), accounts
receivable and other receivables, cash, deposits, advances and prepaid expenses
(other than prepaid Taxes) of Sellers related to the Business together with any
unpaid interest or fees accrued thereon or other amounts due with respect
thereto, and any security or collateral therefor, including recoverable advances
and deposits, which, for avoidance of doubt, includes any of the foregoing
related to the Excluded Plants;
14
(n) all prepayments, prepaid expenses and deferred items,
refunds, rights, claims, credits, causes of action, condemnation proceedings,
rights of set-off or other rights against third parties (other than Tax refunds
and credits), including without limitation any rights concerning any litigation
in which, in connection with or with respect to the Business, any Sellers is a
claimant, including without limitation, those identified on Schedule 2.1(n),
except Bankruptcy Code avoiding power actions and claims;
(o) all rights under or pursuant to all warranties,
representations and guarantees made by suppliers, manufacturers and contractors
in connection with the operation of the Business or affecting the Equipment;
(p) all computer hardware, software programs, databases and
other technology assets whether owned, licensed (subject to applicable
restrictions), leased or internally developed and all documentation related to
such computer software programs and databases used or held for use by Sellers
and wherever located, including any of the foregoing related to the Excluded
Plants;
(q) that portion of any refunds or refunded pre-payments
related to the Insurance Policies equal to the relative value of the Purchased
Assets compared to the Excluded Assets;
(r) any and all assets held in a VEBA (as described in Section
501(c)(9) of the Code) or other trust or welfare benefit fund used to fund
medical, dental, disability, or other welfare benefits for active or retired
employees but only if and to the extent such assets have not been used to pay
benefits under any disability plan that is funded through the VEBA (determined
as of the signing of this Agreement) as of the date Republic no longer has any
obligations to participants under such plan;
(s) to the extent that the Cartersville Asset Sale is
consummated after the Closing, all proceeds from the Cartersville Asset Sale;
and
(t) all air emissions credits and allowances Sellers have, are
entitled to or have applied for, relating to the Purchased Assets or other
emissions units now or previously located on the Real Property, including any
such air emissions credits and allowances that Sellers have credit for or have
banked, applied to bank or agreed to sell or trade.
Section 2.2 Excluded Assets. Any provision of this Agreement to the
contrary notwithstanding, the following (collectively, the "Excluded Assets")
shall not be included in the Purchased Assets and shall not be sold or assigned
by Sellers to Purchaser pursuant to this Agreement:
(a) the minute books, stock books, corporate seals and other
corporate records of Sellers relating to their respective organization and
existence; provided, however, that after execution of this Agreement, Sellers
shall, on request by Purchaser, provide copies of such books, records and other
materials not previously provided to Purchaser;
(b) any assets or properties of the Sellers described on
attached Schedule 2.2(b);
15
(c) all Tax Returns of Sellers; provided, however, that after
execution of this Agreement, Republic shall, on request by Purchaser, provide
copies of such Tax Returns not previously provided to Purchaser;
(d) any capital stock owned beneficially or of record by any
Seller;
(e) causes of actions and recoveries, in each case under
chapter 5 of the Bankruptcy Code; and
(f) the real property associated with the Excluded Plants and
the other real property set forth on Schedule 2.2(f);
(g) except as otherwise specifically provided herein, any
Contract associated with any Employee Benefit Plan;
(h) any refunds or refunded pre-payments related to the
Insurance Policies not acquired by Purchaser pursuant to Section 2.1(q); and
(i) all air emissions credits and allowances Sellers have, are
entitled to or have applied for, including any such air emissions credits and
allowances that Sellers have credit for or have banked, applied to bank or
agreed to sell or trade, to the extent not conveyed pursuant to Section 2.1(t).
ARTICLE III
LIABILITIES ASSUMED
-------------------
Section 3.1 Assumption of Liabilities.
-------------------------
(a) Assumed Liabilities. On and as of the Closing Date, in
connection with its acquisition of the Purchased Assets, Purchaser shall, except
to the extent specifically excluded under Section 3.1(b) as an Excluded
Liability, assume, and indemnify, defend and hold Sellers harmless with respect
to, the following liabilities and obligations of Sellers and no others
(collectively, the "Assumed Liabilities"):
(i) Indebtedness of Republic equal to the aggregate principal
amount outstanding at Closing under the Debtor-in-Possession Revolving
Credit Agreement up to an aggregate of Three Hundred Twenty Million
U.S. Dollars ($320,000,000.00), which Indebtedness shall be assumed by
Purchaser pursuant to the terms and conditions of the New Credit
Facility;
(ii) executory obligations of any Seller arising or continuing
after the Closing Date under the Purchased Contracts, including Cure
Costs, if any, payable in connection with the assumption and assignment
of the Purchased Contracts to Purchaser;
16
(iii) trade payables of any Seller incurred in the ordinary
course of business after the filing of the Chapter 11 Cases in an
aggregate amount not to exceed Thirty-Two Million U.S. Dollars
($32,000,000.00), which amount shall include up to but not more than
Nine Million U.S. Dollars ($9,000,000.00) of trade payables owed to
U.S. Steel Corp.;
(iv) obligations of any Seller arising or continuing after the
Closing Date under each Reference Lease relating to leased Real
Property, including Cure Costs, if any, payable in connection with the
assumption and assignment of the Reference Leases to Purchaser;
(v) accrued freight, utilities, revolver fees and other
miscellaneous current liabilities incurred by any Seller in the
ordinary course of business after the filing of the Chapter 11 Cases in
an aggregate amount of up to Two Million Six Hundred Thousand U.S.
Dollars ($2,600,000.00);
(vi) real property Taxes incurred by any Seller in the
ordinary course of business solely with respect to the Real Property
after the filing of the Chapter 11 Cases in an aggregate amount of up
to Three Million Six Hundred Thousand U.S. Dollars ($3,600,000.00);
(vii) all liabilities arising from or under the Purchased
Assets, but only to the extent that all of the events or states of
facts giving rise to any such liability occur wholly and entirely after
the Closing Date and not as a result of any pre-Closing act or omission
by Sellers or their respective predecessors; and
(viii) the post-Closing Date prospective obligations of any
Seller under the Canton EPA Corrective Action Order to perform Work (as
defined therein) with respect to the release or potential release of
hazardous waste or hazardous constituents from solid waste management
units or areas of concerns ("SWMU/AOC") (all as defined therein)
located on the Real Property located in Canton, Ohio, to be acquired by
Purchaser pursuant to this Agreement, provided that (A) Purchaser does
not assume hereunder and shall not be liable for any Work or other
obligation of Seller under the Canton EPA Corrective Action Order, or
otherwise, relating to any Hazardous Substance existing on any other
property whatsoever, including without limitation (i) SWMU/AOCs
identified now or in the future under the Canton EPA Corrective Action
Order that are not located on Real Property, including without
limitation SWMU/AOCs 1, 2, 4 (described as the "RCRA EAF Dust Waste
Area" in the Order), 15, 16, 18, 19, 20, 21, 23, 24, 25, 27, 28, 31,
85, 87, 89, 91 and 106 (described as "Xxxxxx Triangle"), and (ii) any
groundwater, surface water or sediment located outside of such Real
Property (unless and only to the extent such contamination is solely
attributable to SWMU/AOCs located on the Real Property); and (B)
Purchaser does not assume hereunder, and shall not be liable for, any
remedies, sanctions, stipulated penalties or penalties assertable or
assessable by the U.S. Environmental Protection Agency for any
violation of such Order by any Seller or the Respondent (as defined
therein).
17
(b) Excluded Liabilities. Purchaser shall not assume and shall
not be liable for, and Sellers shall indemnify, defend and hold Purchaser
harmless against, any of the following liabilities or obligations of Sellers,
regardless of the type or nature of such liabilities or obligations
(collectively, the "Excluded Liabilities"):
(i) Sellers' professional fees and expenses for advisors,
including without limitation, advisors retained pursuant to an order of
the Bankruptcy Court;
(ii) Chapter 11 Expenses;
(iii) all existing Contracts, whether written or oral, between
Sellers and their respective advisors and consultants;
(iv) all employment and change in control agreements (or such
similar agreements) and all stock option agreements and stock purchase
agreements to which any Seller is a party, except for the employment
agreement between Xxxxxx Xxxxxxxx and Republic to be assumed and
assigned to Purchaser pursuant to this Agreement;
(v) all Contracts, whether written or oral, between Sellers
and their respective Affiliates, unless any such Contract is a
Purchased Contract;
(vi) liabilities of Sellers to Sellers' Employees not
expressly assumed under this Agreement;
(vii) other than as expressly assumed herein, any liabilities
attributable to or incurred in respect of Hired Employees prior to the
Closing, including by reason of the WARN Act;
(viii) all obligations, liabilities or amounts payable to any
existing equity holders of Sellers pursuant to any Contract or
otherwise;
(ix) any liabilities or obligations in respect of or relating
to the Excluded Assets, except as expressly set forth in the Transition
Services Agreement;
(x) all Taxes other than (i) real property Taxes to the extent
set forth in Section 3.1(a)(vi), (ii) Taxes allocated to Purchaser to
the extent set forth in Section 7.2, and (iii) Taxes with respect to
any indemnity provision, tax sharing agreement or other arrangement
contained in a Purchased Contract but only to the extent that all of
the events or states of facts giving rise to any such liability occur
wholly and entirely after the Closing;
(xi) liabilities or obligations in respect of Indebtedness,
except for any that are Assumed Liabilities;
(xii) liabilities and obligations, whether known or unknown,
relating to any environmental, health or safety matter (including,
without limitation, any liability or obligation arising under Laws or
Environmental Laws) that are not expressly assumed under this
Agreement, including without limitation:
18
(A) any liabilities or obligations associated with
any of the Excluded Plants or the real property associated
therewith;
(B) any liabilities or obligations of Sellers
resulting from the transport, storage, disposal, treatment, or
other management of any Hazardous Substance by Sellers, any
predecessors of Sellers, or any other Person in connection
with the Business prior to the Closing (whether generated at
the Purchased Plants or the Excluded Plants) to or at any
location or facility other than the Real Property;
(C) any liabilities, obligations or claims for
personal injury resulting from exposure to Hazardous
Substances or otherwise, where such exposure or other event or
occurrence occurred prior to the Closing;
(D) any liabilities under application of any Laws or
Environmental Laws imposing successor liability, creating
obligations with respect to any Excluded Assets, or imposing
joint and several liability for any co-mingled contamination;
(E) any liabilities or obligations under the Canton
EPA Corrective Action Order not expressly assumed under
Section 3.1(a)(viii);
(F) any liabilities or obligations under the
Director's Final Findings and Order issued on June 16, 1999,
to Republic Engineered Steels, Inc., as now or hereafter
amended, or otherwise relating to the EAF Dust Waste Area
located on the excluded portion of the property at Canton
(including closure and post-closure obligations imposed by
Environmental Law);
(G) any fines or penalties associated with violations
or alleged violations arising out of or relating to events,
conditions or circumstances occurring prior to the Closing;
(H) any other liabilities, whether known or unknown
and whether arising prior to or after the Closing Date,
relating to, arising from, or occurring on, at, or from any
Excluded Assets or property other than Real Property,
including but not limited to (i) excluded properties adjacent
or proximate to the Purchased Plant located in Lorain, Ohio
(which excluded properties include the former coke plant
complex, the blast furnace slag processing area, a
construction/debris disposal area, the Charleston Gate area,
the Pipe Mill Lagoon, and various locations, such as those
known as the East Fill and North Fill and the area near the
heron rookery, used for by-product material staging and/or
historic waste and dredgings disposal), (ii) excluded
properties adjacent or proximate to the Purchased Plant
located in Canton, Ohio (which excluded properties include
those SWMUs/AOCs identified in Section 3.1(a)(viii)), and
(iii) excluded properties adjacent or proximate to the
Purchased Plant located in Gary, Indiana (which excluded
19
properties include the former iron bearing landfill area and
an ancillary building at the Xxxx Dunes Plant);
(xiii) trade payables or general unsecured claims not
expressly assumed under this Agreement;
(xiv) obligations, other than Cure Costs, arising under each
Reference Lease relating to leased Real Property prior to the Closing
Date; (xv) obligations, other than Cure Costs, arising under each
Purchased Contract prior to the Closing Date;
(xvi) the Excluded Contracts;
(xvii) all obligations and liabilities associated with any
Employee Benefit Plan; and
(xviii) any other liability or obligation not expressly
assumed pursuant to Section 3.1(a).
ARTICLE IV
PURCHASE PRICE
--------------
Section 4.1 Purchase Price for Purchased Assets.
-----------------------------------
(a) The purchase price for the Purchased Assets shall be (i)
Ten Million U.S. Dollars ($10,000,000.00) in cash (the "Cash Consideration");
(ii) the Senior Secured Note; (iii) Purchaser Interests which shall represent
twenty-five percent (25%) of the issued and outstanding Purchaser Interests as
of the Closing Date calculated without giving effect to any Purchaser Interests
issuable pursuant to any management incentive plan of Purchaser; and (iv) the
assumption by Purchaser of the Assumed Liabilities (clauses, (i), (ii), (iii)
and (iv), collectively, the "Purchase Price").
Section 4.2 Payment of Purchase Price.
-------------------------
(a) On the Closing Date, Purchaser shall deliver to Republic
(i) in cash, by wire transfer (pursuant to wire transfer instructions provided
by Republic at least two (2) Business Days prior to the Closing Date), in
immediately available funds, the Cash Consideration, a portion of which
Purchaser may satisfy pursuant to Section 8.2 herein; (ii) the Senior Secured
Note, duly executed by Purchaser and authenticated by the trustee under the
Senior Secured Note Indenture; and (iii) a certificate, duly authorized and
issued by Purchaser, representing the Purchaser Interests to be issued to
Republic or other evidence that the Purchaser Interests to be issued to Republic
have been issued, which on the Closing Date will be validly issued, fully paid
and nonassessable.
20
(b) On the Closing Date, Purchaser or its designees shall
execute and deliver to Sellers the Assumption Agreement and Sellers shall
execute and deliver to Purchaser or its designees the Xxxx of Sale and the
Assumption Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES AND RELATED UNDERTAKINGS
-------------------------------------------------------
Section 5.1 Representations and Warranties of Sellers. Sellers hereby
jointly represent and warrant to Purchaser as follows:
(a) Authority. Each Seller is organized and validly existing
under the laws of the jurisdiction of its organization, and has all corporate or
other power required to own, lease and operate the Purchased Assets and to carry
on the Business as now conducted by such Sellers ("Conducted"). Subject only to
the approval of the Bankruptcy Court in the case of the Debtor Sellers, each
Seller has the corporate or other power and authority to enter into this
Agreement, to enter into any and all agreements contemplated in this Agreement
(the "Attendant Documents") to which it is or is intended to be a party and to
consummate the transactions contemplated hereby and thereby. Subject only to the
approval of the Bankruptcy Court in the case of the Debtor Sellers, this
Agreement and all of the Attendant Documents to which each Seller is a party,
and the consummation of the transactions contemplated hereby and thereby, have
been duly authorized and approved by all necessary and proper corporate or other
action on the part of each Seller. Subject to the approval of the Bankruptcy
Court in the case of the Debtor Sellers, this Agreement, and all of the
Attendant Documents to which each Seller is a party, have been (or to the extent
to be entered into on or prior to the Closing, will be) duly authorized and duly
and validly executed and delivered, and constitute legal, valid and binding
obligations of each Seller enforceable against each Seller in accordance with
their respective terms. Each Non-Debtor Seller is duly authorized to conduct its
business and is in good standing under the laws of each jurisdiction where such
qualification is required. There is no pending or, to Sellers' Knowledge,
threatened action for the dissolution, liquidation, insolvency or rehabilitation
of any Non-Debtor Seller.
(b) Assets. Other than the Excluded Assets, there are no
Assets necessary to the operation of the Business as Conducted which are not
included in the Purchased Assets. Upon consummation of the transactions
contemplated hereby, Purchaser will have acquired good and insurable title in
and to, or a valid leasehold interest in or assignment of each of the Purchased
Assets to be acquired by it, free and clear of all Encumbrances, except for the
Assumed Liabilities and Permitted Real Estate Liens. The Purchased Assets
constitute, in the aggregate, all of the Assets necessary for the conduct of the
Business at the Purchased Plants substantially in the manner in which and to the
extent to which such Business is Conducted at the Purchased Plants during the
pendency of the Chapter 11 Cases. The Purchased Assets have been maintained in
accordance with normal industry practices.
(c) Consents, Approvals or Authorizations. Except as set forth
in Schedule 5.1(c), no consent, approval, waiver, or authorization of, filing or
registration with, or notification to, any Governmental Authority is required in
connection with the execution and delivery of this Agreement by Sellers or the
21
consummation by Sellers of the transactions contemplated hereby. Except as set
forth in Schedule 5.1(c), no consent, approval, waiver or authorization of any
Person is required in connection with the execution and delivery of this
Agreement by Sellers or the consummation by Sellers of the transactions
contemplated hereby. Schedule 5.1(c) sets forth all consents that must be
obtained from any Person in order to sell, transfer and assign to Purchaser any
Purchased Assets to be acquired from any Non-Debtor Seller pursuant to this
Agreement.
(d) Intellectual Property. Except as set forth in Schedule
5.l(d), Sellers hold free and clear of all Encumbrances (other than Encumbrances
set forth in Schedule 5.1(d), which upon the Closing will be released, or
Assumed Liabilities) and free and clear from all contractual restrictions and
any other restriction, all right, title and interest in and to, or valid and
subsisting licenses in, all Intellectual Property Rights material to the
operation of the Purchased Assets as Conducted. All of such Intellectual
Property Rights registrations are valid and subsisting and all pending
applications for such Intellectual Property Rights are live. Sellers are not in
default, and, to Sellers' Knowledge, no event has occurred which with notice or
lapse of time would constitute a material default under any of the agreements,
licenses or sublicenses of Sellers relating to Intellectual Property Rights. To
Sellers' Knowledge, none of the Intellectual Property Rights of Sellers are used
by Sellers in violation of the rights of any third party and no Seller has
received notice alleging that it is infringing on or in violation of the
intellectual property rights of others. Schedule 5.1(d) lists all agreements,
licenses and sublicenses by which Sellers have granted to a third party any
rights to use or possess any Intellectual Property Rights of Sellers. Schedule
5.1(d) lists all Patents, Trademarks and Copyrights owned by Sellers and all
Contracts relating to any third party Intellectual Property Rights licensed or
sublicensed to Sellers. Except as set forth in Schedule 5.1(d), to Sellers'
Knowledge no third party has infringed upon, misappropriated or wrongfully used
any of Sellers' Intellectual Property Rights. Other than the Intellectual
Property Rights, no intellectual property is necessary to enable Sellers to
conduct the Business as Conducted. There are no claims, demands or proceedings
instituted or pending or, to the Sellers' Knowledge, threatened in writing by
any Person contesting or challenging the right of any Seller to use any
Intellectual Property Rights of Sellers. To Sellers' Knowledge, there are no
patents, trademarks, trade names, copyrights, trade secrets or similar
intellectual property rights owned by a Person other than the Sellers which any
Seller is using without a license to do so.
(e) Material Contracts.
(i) The attached Schedule 5.1(e)(i) identifies all Contracts
(collectively, the "Material Contracts") in effect as of the date of
this Agreement to which any Seller is a party as set forth below:
(A) any lease of personal property involving any
annual expense in excess of Two Hundred Thousand U.S. Dollars
($200,000.00) and not cancelable without liability within 90
days;
(B) any Contract for the purchase of materials,
supplies, goods, services, consulting, equipment or other
assets that provides for either (x) annual payments from and
after December 31, 2001 by Sellers of Two Hundred Thousand
22
U.S. Dollars ($200,000.00) or more or (y) aggregate payments
by Sellers of Two Hundred Thousand U.S. Dollars ($200,000.00)
or more, in each case that is not cancelable without liability
within 90 days;
(C) any sales, distribution or similar Contract
providing for the sale by any Seller of materials, supplies,
goods, services, equipment or other assets that provide for
either (x) annual payments to Sellers of Two Hundred Thousand
U.S. Dollars ($200,000.00) or more or (y) aggregate payments
to Sellers of Two Hundred Thousand U.S. Dollars ($200,000.00)
or more, in each case that is not cancelable without liability
within 90 days;
(D) any Contract substantially related to the
ownership of the Purchased Assets or operation of the Business
containing warranty obligations on the part of Sellers;
(E) any Contract substantially related to the
ownership of the Purchased Assets or operation of the Business
containing provisions or covenants limiting the freedom of
Sellers to engage in any line of business or compete with any
Person or prohibiting or limiting the ability of any Person to
compete with Sellers or prohibiting or limiting disclosure of
confidential or proprietary information;
(F) any Contract substantially related to the
ownership of the Purchased Assets or operation of the Business
relating to Indebtedness for borrowed money, the issuance of
any debt security or the assumption, guarantee or endorsement
of the obligations of any Person;
(G) any Contract between or among any Seller and any
Affiliate of any Seller;
(H) (x) all Contracts providing for a commitment of
employment or consultation services for a specified or
unspecified term, the name, position and rate of compensation
of each Person to such Contract and the expiration date of
each such Contract; and (y) any severance agreements or any
Contracts or written or unwritten representations,
commitments, promises, communications or courses of conduct
involving an obligation of Sellers to make payments (with or
without notice, passage of time, or both) to any Person in
connection with, or as a consequence of, the transactions
contemplated hereby;
(I) all partnership, joint venture, shareholders' or
other similar Contracts with any Person substantially related
to the Purchased Assets;
(J) all Contracts with independent contractors,
distributors, dealers, manufacturers' representatives, sales
agencies or franchisees substantially related to the Purchased
Assets;
(K) all Contracts substantially related to the
Purchased Assets and concerning (x) the future disposition or
acquisition of any asset or property, other than dispositions
23
or acquisitions in the ordinary course of business and the
provisions of this Agreement, and (y) any Business
Combination;
(L) all Contracts substantially related to the
Purchased Assets and concerning the sharing, allocation or
indemnification for Taxes;
(M) all Contracts that contain a right of first
refusal with respect to any Purchased Assets or properties
with a fair market value in excess of Two Hundred Thousand
U.S. Dollars ($200,000.00);
(N) all Contracts substantially related to the
Purchased Assets that provide for the payment or receipt of
any licensing fee, royalty payment or the like;
(O) all Contracts substantially related to the
Purchased Assets that provide for hedging or any similar
financial arrangement;
(P) all Contracts substantially related to the
Purchased Assets pursuant to which a third party has agreed to
indemnify any Seller;
(Q) all Reference Leases relating to Real Property
and all Third Party Leases; and
(R) all licenses substantially related to the
Purchased Assets with respect to computer software that are
necessary for the operation of the Business.
(ii) Each Contract required to be disclosed in Schedule
5.1(e)(i) was entered into in the ordinary course of business, and
except as set forth on Schedule 5.1(e)(ii), each such Contract that is
material to the Purchased Assets or to the operation of the Business at
the Purchased Plants is in full force and effect and constitutes a
legal, valid and binding agreement, enforceable in accordance with its
terms, of Sellers and, to Sellers' Knowledge, each other party thereto;
and no Seller has received written notice that it is in violation or
breach of or default under any such contract (or with notice or lapse
of time or both, would be in violation or breach of or default under
any such contract). Except as set forth on Schedule 5.1(e)(ii), no
"cure" amount will be payable upon the assumption by the Sellers or any
of its Subsidiaries of any Contract.
(iii) True and complete copies (or written summaries in the
case of oral Contracts) of all of the Sellers' Contracts have been
provided or made available to Purchaser.
(f) Personal Property. Sellers own or hold under a valid lease
all personal property reflected on the Unaudited Balance Sheet and all personal
property of Sellers acquired by Sellers since the date thereof (except such
property as have been disposed of in the ordinary course of business), that is
material to the Purchased Assets or the operation of the Business at the
Purchased Plants free and clear of any Encumbrance, except for those that will
be discharged concurrently with the Closing and Assumed Liabilities. To Sellers'
Knowledge, each of the Purchased Plants (together with all Equipment therein) is
24
in condition satisfactory to permit operation of such plants (together with all
Equipment therein) consistent with past practice during the pendency of the
Chapter 11 Cases in all material respects.
(g) Non-Violative Agreement. Except as set forth on Schedule
5.1(g), neither the execution and delivery of this Agreement or the Attendant
Documents to which any Seller is a party nor the consummation of the
transactions contemplated in this Agreement do or will (i) conflict with or
violate in any material respect any Law, Environmental Law or Governmental Order
applicable to Sellers or by which any of their respective assets or properties
is bound, (ii) result in any breach of or constitute a default under (or an
event which, with notice or lapse of time or both, would become a default), or
give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of an Encumbrance on any of the
properties or assets of any Seller pursuant to, any Material Contract that is a
Purchased Contract, (iii) with respect to any Non-Debtor Seller, conflict with
or violate the certificate of formation or operating agreement (or other charter
documents) of such Non-Debtor Seller or (iv) with respect to any Non-Debtor
Seller, result in any breach of or constitute a default under (or an event
which, with notice or lapse of time or both, would become a default), or give to
others any rights of termination, amendment, acceleration or cancellation of, or
result in the creation of an Encumbrance on any of the properties or assets of
any Non-Debtor Seller pursuant to, any agreement, contract, lease, license,
instrument or other arrangement to which any Non-Debtor Seller is a party, to
which any Non-Debtor Seller is bound or to which the properties or assets of any
Non-Debtor Seller is subject.
(h) Permits. The attached Schedule 5.1(h) contains a complete
and true list of Permits that relate to the Business or any of the Purchased
Assets and that are material to the conduct, use or operation or ownership
thereof. Sellers currently have and will use their commercially reasonable
efforts to maintain in effect until the Closing Date all such Permits. No
governmental proceeding is pending nor, to Sellers' Knowledge, is there any
threat by any Governmental Authority to cancel, modify, or fail to renew any
such Permit. All such Permits held by Sellers shall, to the extent permissible,
be transferred to Purchaser at the Closing.
(i) Owned Real Property. Schedule 5.1(i) contains a complete
and correct list of all Real Property owned by Sellers.
(j) Leased Real Property. Schedule 5.1(j) contains a complete
and correct list of all Real Property leased by or to Sellers. True, correct and
complete copies of all Reference Leases relating to the leased Real Property
have heretofore been delivered by Sellers to Purchaser. Each such Reference
Lease is valid, binding and in full force and effect and is enforceable by each
Seller that is a party thereto and no Seller has subleased, demised or otherwise
granted any interest in any such Reference Lease or property subject thereto,
except as set forth on Schedule 5.1(j). Sellers have good and valid title to the
leasehold estate or other interest created under each Reference Lease, and to
Sellers' Knowledge, no lessee under any Reference Lease relating to leased Real
Property is in material default of its obligations thereunder.
25
(k) Use and Operation. To Sellers' Knowledge, the use and
operation of the Real Property in the conduct of the Business does not in any
material respect violate any instrument of record or agreement affecting the
Real Property.
(l) Title Insurance. To Sellers' Knowledge, Sellers have
provided true and complete copies of all title insurance policies in Sellers'
possession that insure the respective Sellers' fee simple title to the Real
Property owned by such Seller and all surveys conducted in connection with
obtaining such title insurance policies. No material claim has been made against
any such title insurance policy.
(m) Violations; Defects. Except as provided in Schedule
5.1(m), (i) each Permit or license from any Governmental Authority having
jurisdiction over any of the Purchased Plants or any agreement, easement or
other right which is material and is necessary to permit the lawful use and
operation of the buildings and improvements on any of the Real Property (as
currently being used and operated by Seller) or which is material and is
necessary to permit the lawful use and operation (as currently being used and
operated by Seller) of all driveways, roads and other means of egress and
ingress to and from any of the Purchased Plants has been obtained and is in full
force and effect, and to Sellers' Knowledge there is no pending threat of
modification or cancellation of any of the same, (ii) no Seller has received
written notice issued by any Governmental Authority of any violation of any
federal, state or municipal law, ordinance, order, regulation or requirement
relating to the Real Property, (iii) to Sellers' Knowledge there are no material
structural defects relating to any Purchased Plant, or (iv) to Sellers'
Knowledge there is no material physical damage to any Purchased Plant for which
there is no insurance in effect covering the cost of the restoration. To
Sellers' Knowledge, Republic has made available to Purchaser all engineering
reports in Sellers' possession with respect to the Purchased Plants.
(n) Condemnation; Zoning. No Seller has received any notice in
writing that (i) any condemnation proceeding is pending or threatened with
respect to any Real Property or (ii) any zoning, building or similar law, code,
ordinance, order or regulation is or will be violated by the continued
maintenance, operation or use of any buildings or other improvements on any Real
Property or by the continued maintenance, operation or use of the parking areas.
(o) Oral Agreements. To Sellers' Knowledge, Sellers have no
material oral agreements with respect to the Conduct of the Business.
(p) Tax Certiorari Proceedings. Except as set forth in
Schedule 5.l(p), there are no ongoing tax certiorari proceedings with respect to
Real Property owned by Sellers.
(q) Certain Actions. Except as disclosed in Schedule 5.1(q):
(i) there are no Actions or proceedings pending or, to the
Knowledge of any Seller, threatened against, relating to or affecting
any of the Purchased Assets individually or in the aggregate, which, if
adversely decided against Sellers, would reasonably be expected to
result in the imposition of material liability against Sellers;
26
(ii) to Sellers' Knowledge, there are no facts or
circumstances relating to the Purchased Assets that would give rise to
any Action or proceeding against any Seller that would reasonably be
expected to result in a Material Adverse Effect;
(iii) none of the Sellers has received written notice, and no
Seller otherwise has Knowledge, of any orders outstanding against any
Seller; and
(iv) prior to the execution of this Agreement, Republic has
delivered or made available to Purchaser all responses of counsel for
Sellers to auditors' requests for information regarding Actions or
proceedings pending or threatened against, relating to or affecting
Sellers during the three-year period prior to the date hereof.
(r) Compliance with Applicable Laws and Regulations.
(i) General. Except as set forth on Schedule 5.1(r)(i), to
Sellers' Knowledge, Sellers are and for the last three (3) years have
been in compliance in all material respects with all Laws that are (or
were) material to the operation of the Business.
(ii) Environmental Matters. To Sellers' Knowledge, except as
set forth on Schedule 5.1(r)(ii), (a) the Business and the Purchased
Assets are and for the last five (5) years have been in compliance in
all material respects with Environmental Laws; (b) there have not been
and there are no actions, activities, circumstances, conditions, events
or incidents, including, without limitation, the release, emission,
discharge, presence or disposal of any Hazardous Substance on any of
the Real Property, that could reasonably be expected to prevent, hinder
or limit continued compliance in all material respects with
Environmental Laws or could reasonably be expected to form the basis of
a material environmental claim against Sellers or against any Person
whose liability for any environmental claim a Seller has or may have
retained or assumed either contractually or by operation of law; (c)
none of the following exists at any of the Real Property: (i) under- or
above-ground storage tanks, (ii) friable asbestos containing material,
(iii) transformers containing polychlorinated biphenyls at
concentrations greater than 500 parts per million, or (iv) landfills,
surface impoundments, or disposal areas (except as could not reasonably
be expected to form the basis of a material claim); and (d) Sellers
have provided true and accurate copies of (i) all material reports,
studies and analyses of the cost for the Business as Conducted to
maintain or achieve compliance with proposed future requirements of
Environmental Law, and (ii) Environmental Reports.
(iii) Definitions. For purposes of this agreement:
(A) "Hazardous Substance" means any material,
substance, or waste, or combination thereof which is
classified as hazardous, toxic, pollutant or contaminant or
words of similar meaning, whether solid, liquid or gaseous in
nature, under Environmental Laws, including without limitation
petroleum (including crude oil or any fraction thereof),
polychlorinated biphenyls (PCBs), asbestos and radioactive
materials;
27
(B) "Environmental Law" means any and all applicable
federal, state, and local statutes, laws, regulations,
ordinances, orders, common law, and similar provisions
currently in existence and applicable and having the force or
effect of law, concerning public health or safety, worker
health or safety, pollution or protection of the environment,
including, but not limited to, the Clean Air Act, 42
U.S.C.ss.7401 et seq. (the "Clean Air Act"), the Clean Water
Act, 33 U.S.C.ss.1251 et seq., the Resource Conservation
Recovery Act, 42 U.S.C. 6901 et seq. ("RCRA"), the Toxic
Substances Control Act, 15 U.S.C.ss.2601 et seq., the
Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C.ss.9601 et seq. ("CERCLA"), the
Occupational Safety and Health Act of 1970 (but only to the
extent it regulates occupational exposure to Hazardous
Substances), all as amended, and any and all other applicable
laws, all as amended, which govern: (i) the existence,
cleanup, removal and/or remedy of contamination or threat of
contamination at, on or under owned or leased real property;
(ii) the release, threatened release, emission or discharge of
Hazardous Substances into the environment; (iii) the control
of Hazardous Substances; or (iv) the presence, use,
manufacturing, refining production, generation, transport,
treatment, storage, disposal, distribution, importing,
labeling, testing, processing, removal, recycling, handling or
recovery of Hazardous Substances; and
(C) "Environmental Reports" means any and all
environmental review and assessment reports that Republic, its
corporate predecessors, or any Subsidiary of Republic has ever
caused to be prepared or has ever received within the last
five (5) years with respect to the owned Real Property or
leased Real Property.
(s) Employment and Labor Matters. Except as set forth on
Schedule 5.1(s), (A) there are no material claims or Actions pending or, to
Sellers' Knowledge, threatened between Republic or any of its Subsidiaries and
any of their respective employees; (B) neither Republic nor any of its
Subsidiaries is a party to any collective bargaining agreement or other labor
union contract applicable to Persons employed by Republic or any such
Subsidiary; (C) there are no unfair labor practice complaints pending or to
Sellers' Knowledge threatened against Republic or any of its Subsidiaries before
the National Labor Relations Board or any similar state or foreign agency or any
current union representation questions involving employees of Republic or any of
its Subsidiaries; (D) there are no union claims to represent the employees of
the Business; (E) there is no material grievance arising out of any collective
bargaining agreement or other grievance procedure; (F) there are no concerted
strikes slowdowns, work stoppages or lockouts by or with respect to any group of
employees of Republic or any of its Subsidiaries and during the past five years
there has not been any such action; (G) there is not any organizational effort
presently being made or, to Sellers' Knowledge, threatened involving any of
Republic's or its Subsidiaries' employees; (H) Republic and each of its
Subsidiaries are, and have at all times been, in material compliance with all
applicable Laws relating to employment and employment practices, including,
without limitation, provisions thereof relating to terms and conditions of
employment, wages, hours of work, occupational safety and health, collective
bargaining, the payment of social security and other payroll or similar taxes,
equal employment opportunity, employment discrimination or harassment, and are
not engaged in any unfair labor practices as defined in the National Labor
Relations Act or other applicable Law, ordinance or regulation; (I) to Sellers'
28
Knowledge, neither Republic nor any of its Subsidiaries is liable for any
arrears of wages or penalties for failure to comply with any of the foregoing;
(J) Sellers have not received notice of the intent of any federal, state, local
or foreign agency responsible for the enforcement of labor or employment laws to
conduct an investigation with respect to Sellers and, to Sellers' Knowledge, no
such investigation is in progress; and (K) there are no complaints, lawsuits or
other proceedings pending or, to Sellers' Knowledge, threatened in any forum by
or on behalf of any present or former employee of Republic or any Subsidiary of
Republic, any applicant for employment or classes of the foregoing alleging
breach of any express or implied contract for employment, any law or regulation
governing employment or the termination thereof or other discriminatory,
wrongful or tortious conduct in connection with the employment relationship.
Except as set forth in Schedule 5.1(s), there are no employment contracts or
severance agreements with any employee of Republic or any Subsidiary of
Republic.
(t) Employee Benefits.
(i) Except as set forth in Schedule 5.1(t)(i), Republic, any
Subsidiary of Republic or by any trade or business, whether or not
incorporated that, together with Republic or a Subsidiary of Republic,
would be deemed a "single employer" within the meaning of Section
414(b), (e), (m), or (o) of the Code or Section 4001(b) of ERISA (an
"ERISA Affiliate") have no liability, and this transition will not
cause Purchaser to have any liability (including, but not limited to,
withdrawal liability) with respect to any multi-employer plan as
defined in ERISA Section 4001(a)(3) or any Employee Benefit Plan
subject to Title IV of ERISA.
(ii) Except as set forth in Schedule 5.1(t)(ii), with respect
to all employee benefit plans and policies of Seller and its ERISA
Affiliates which are subject to Laws other than those of the United
States, each such plan has been operated and funded in accordance with
its terms and applicable Law and in such a manner such that there is no
lien on the Purchased Assets as of the Closing Date or earlier.
(iii) There has been no material failure of a group health
plan (as defined in Section 5000(b)(1) of the Code) sponsored,
contributed to, or maintained by Republic or any ERISA Affiliate to
meet the requirements of Section 4980B(f) of the Code with respect to a
qualified beneficiary (as defined in Section 4980B(f) of the Code).
Republic has provided or will provide to Purchaser: (i) copies of all
such group health plans and their respective summary plan descriptions,
and (ii) accurate and complete information regarding the costs of such
group health plans for active employees, retirees and COBRA
participants for the last two (2) years, including an accurate
breakdown of numbers of plan participants by category (actives, COBRA,
retirees) and plant location (for COBRA recipients and retirees, the
last plant where they worked).
(iv) A true and complete copy of the Lender Retention Program
is attached hereto as Exhibit D. Such program or plan is in full force
and effect and has not been modified, amended, supplemented or
replaced.
29
(v) With respect to each Employee Benefit Plan under which
Purchaser may incur any liability as a result of Purchaser complying
with any provision of this Agreement, including any Assumed Liability,
all obligations, whether arising by operation of applicable Law or
under the terms of such Employee Benefit Plan and its operative
documents, required to be performed with respect to such Employee
Benefit Plan have been performed and performed timely in all material
respects, and there have been no material defaults, omissions, or
violations by any party with respect to such Employee Benefit Plan, and
each such Employee Benefit Plan has been administered in compliance in
all material respects with its governing documents and all applicable
Law.
(u) Reports and Financial Statements.
(i) Republic and Republic Technologies International Holdings,
LLC have filed, other than immaterial filings, all required reports,
schedules, forms and other documents required or agreed to be filed by
either of them with the Securities and Exchange Commission since April
10, 1999 (collectively, including all exhibits thereto, the "Seller SEC
Reports"). None of the Seller SEC Reports, as of their respective dates
(and if amended or superseded by a filing prior to the date of this
Agreement of the Closing Date, then the date of such filing), contained
an untrue statement of material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(ii) Each of the financial statements (including related
notes) included in the Seller SEC Reports present fairly, in all
material respects, the consolidated financial position and consolidated
results of operation and cash flows of the filer thereof and its direct
and indirect Subsidiaries as of the respective dates or for the
respective periods set forth therein, all in conformity with U.S. 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 complete notes and normal
year-end adjustments. Such financial statements include the audited
balance sheet of Republic Technologies International Holdings, LLC and
its direct and indirect Subsidiaries on a consolidated basis as of
December 31, 2001 (the "Audited Balance Sheets"), and the related
audited statements of income and cash flows for the fiscal year then
ended filed as part of the Republic Technologies International
Holdings, LLC Annual Report on Form 10-K as filed with the Securities
and Exchange Commission on April 1, 2002 (together with the Audited
Balance Sheets, including the notes thereto, the "Audited Financial
Statements").
(iii) The unaudited combined consolidating balance sheets of
Sellers as of March 31, 2002 (the "Unaudited Balance Sheets") and the
related combined consolidating statements of income and cash flows for
the Sellers for the three-month period then ended (together with the
Unaudited Balance Sheet, including the notes thereto, the "Unaudited
Financial Statements") are attached as Schedule 5.1(u)(iii) and were
prepared from, and in accordance with, Sellers' books and records in
accordance with U.S. GAAP consistently applied, and present fairly in
all material respects the financial position, results of operations and
30
cash flows of Sellers on a combined consolidating basis as of the dates
and for the periods indicated, subject to the absence of complete notes
and normal year-end adjustments.
(v) Tax Matters.
(i) Except as set forth on the attached Schedule 5.1(v), to
the Sellers' Knowledge (A) no Encumbrances have been filed on or
against the Purchased Assets as a result of Sellers' failure to pay, in
whole or in part, any Taxes; (B) Sellers have no reason to believe that
an Encumbrance might be filed or imposed in the future on or against
the Purchased Assets or any owned Real Property or leased Real Property
as a result of Sellers' failure to pay, in whole or in part, any Taxes;
(C) Sellers have timely and properly filed all Tax Returns required to
be filed by them, and such Tax Returns are true, correct and complete
and, except as prohibited or stayed by the Bankruptcy Court, Sellers
have paid all Taxes due from them; and (D) none of the Sellers has
received any notice of any audit, dispute or claim threatened by any
taxing authority.
(ii) None of the Sellers is a foreign person for purposes of
Section 1445 of the Code.
(iii) Except as set forth on the attached Schedule 5.1(v), to
Sellers' Knowledge (A) Republic has not been and is not now in
violation (and with notice or lapse of time, or both, would not be in
violation) of any applicable Law relating to the payment or withholding
of Taxes; and (B) Republic has duly and timely withheld from employee
salaries, wages and other compensation and paid over to the appropriate
taxing authorities all amounts required to be so withheld and paid over
for all periods under all applicable Laws.
(w) Substantial Customers and Suppliers. Schedule 5.l(w)(i)
lists the thirty-five (35) largest customers of Sellers, other than the Railroad
Subsidiary, on the basis of revenues for goods sold or services provided for the
most recent fiscal year. Schedule 5.1(w)(ii) lists the thirty-five (35) largest
suppliers of Sellers, other than the Railroad Subsidiary, on the basis of cost
of goods or services purchased for the most recent fiscal year. Except as
disclosed in Schedule 5.1(w)(iii), to Sellers' Knowledge, since December 31,
2001, no such customer or supplier has ceased or materially reduced its
purchases from or sales or provision of services to, or materially modified its
relationship with, Sellers and has not threatened to cease or materially reduce
such purchases or sales or provision of services or has any reason to terminate
or modify such relationship. To Sellers' Knowledge, no such customer or supplier
is threatened with bankruptcy or insolvency.
(x) Inventory; Accounts Receivable.
(i) Except as disclosed in Schedule 5.1(x), to Sellers'
Knowledge, all Inventory reflected on the Unaudited Balance Sheet
included in Section 5.1(u) consisted, and all such Inventory acquired
since the date of that balance sheet, consists of a quality and
quantity usable and salable in the ordinary course of business
consistent with past practice, net of any applicable reserve, and was
produced or acquired by Sellers in the ordinary course of business.
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(ii) The accounts and notes receivable of the Sellers
reflected on the Audited Balance Sheet and the Unaudited Balance Sheet
included in the Unaudited Financial Statements and all accounts and
notes receivable arising subsequent to the date of the Unaudited
Balance Sheet (A) arose from bona fide sales transactions in the
ordinary course of business consistent with past practice and are
payable on ordinary trade terms, (B) are legal, valid and binding
obligations of the respective debtors enforceable in accordance with
their respective terms, (C) are not subject to any valid set-off or
counterclaim, (D) do not represent obligations for goods sold on
consignment, on approval or on a sale-or-return basis or subject to any
other repurchase or return arrangement, and (E) are not the subject of
any Actions or Governmental Order brought by or on behalf of the Seller
or any Subsidiary.
(y) Affiliates. Except as disclosed in Schedule 5.1(y) and for
transactions solely between Republic and its Subsidiaries, no Seller is a party
to any transaction with any Affiliate of any Seller. All of such Contracts
listed on Schedule 5.1(y) have been entered into on an arm's-length basis and
are commercially reasonable.
(z) Disclosure. No representation or warranty by Sellers
contained in this Agreement and no statement contained in any of the Attendant
Documents or any other certificate or instrument furnished or to be furnished
pursuant to this Agreement or in connection with the transactions contemplated
in this Agreement contains or will contain any untrue statement of a material
fact, or omits or will omit to state a material fact, necessary in order to make
any of the statements, in light of the circumstances under which they were made,
not misleading.
(aa) Insurance. Sellers are covered by valid, outstanding and
enforceable policies of insurance covering their respective properties, assets
and business against risks of the nature normally insured against by companies
in the same or similar lines of business and in coverage amounts typically and
reasonably carried by such companies including, without limitation, policies
with respect to workers compensation (the "Insurance Policies"). Such Insurance
Policies are valid and binding and in full force and effect, and all premiums
due thereon have been paid. Sellers have complied with all material provisions
of such Insurance Policies. Schedule 5.1(aa) contains a complete and correct
list of all Insurance Policies and all amendments and riders thereto, and
identifies the name and address of the insurers, the expiration dates thereof,
type(s) and amounts of insurance coverage, policy numbers, the annual premiums
and payment terms thereof, the policy periods for each policy and a brief
description of the interests insured thereby, copies of which have been provided
or made available to Purchaser by Seller. During the three-year period prior to
the date hereof, no Seller has made any claim under any of the Insurance
Policies, or has suffered any losses that would give rise to any such claims,
for any amount in excess of Two Hundred Fifty Thousand U.S. Dollars
($250,000.00), except as set forth on Schedule 5.1(aa). Schedule 5.1(aa)
contains a list of all outstanding claims made under any insurance policy
covering Sellers for any amount in excess of Two Hundred Fifty Thousand U.S.
Dollars ($250,000.00). No Seller (i) has permitted or suffered any act or
omission that would cause nor (ii) knows of any reason or state of facts that
could lead to, the cancellation of or reduction of coverage provided by such
policies. The Insurance Policies listed in Schedule 5.1(aa) are in amounts and
have coverages as required by any Contract to which such Seller is a party or by
which any of their Purchased Assets or properties is bound. No Seller has (i)
32
received written notice, and Seller does not otherwise have Knowledge, that any
insurer under any policy referred to in this Section 5.1(aa) is denying
liability with respect to a claim thereunder or defending under a reservation of
rights clause nor (ii) assigned, pledged, mortgaged, hypothecated or otherwise
transferred the rights under such insurance policies. Sellers have recorded a
reserve for such liabilities in and no liability beyond such reserve would
reasonably be expected to result in a Material Adverse Effect. Workers'
compensation claims outside the State of Ohio for all employees of Sellers have
been covered under fully insured programs since December 31, 2001 and there have
been no gaps in such coverage.
(bb) Absence of Certain Changes or Events. From and after
March 31, 2002, except (x) as contemplated or permitted by this Agreement, or
(y) as set forth in Schedule 5.1(bb), Sellers have conducted their business only
in the ordinary course and in a manner in all material respects consistent with
past practice, and whether or not in the ordinary course during such period,
there has not been any event which, individually or together with any other
events, has had or would reasonably be expected to result in, a Material Adverse
Effect. In addition, without limiting the foregoing, except as expressly
contemplated hereby and except as disclosed in Schedule 5.1(bb), there has not
occurred since March 31, 2002 (i) any damage, destruction or loss (whether or
not covered by insurance) with respect to any Purchased Assets in excess of
$200,000.00, (ii) any material change by Sellers in their accounting methods,
principles or practices, (iii) any revaluation by Sellers of any of the
Purchased Assets, including, without limitation, writing down the value of
inventory or writing off notes or accounts receivable other than in the ordinary
course of business, (iv) any entry by Sellers into any commitment or
transaction, or series of commitments or transactions, in respect of
Indebtedness of Sellers, (v) any declaration, setting aside or payment of any
dividends or distributions in respect of the capital stock of Sellers or any
redemption, purchase or other acquisition of any of its securities, (vi) any
transfer, lease or other disposition of any of Sellers' assets or properties,
except for fair consideration in the ordinary course of business consistent with
past practices or pursuant to a Bankruptcy Court order, (vii) any acquisition of
any of Sellers' assets or properties, except in the ordinary course of business,
consistent with past practices, (viii) any investment of a capital nature,
whether by purchase of stock or securities, contributions to capital, property
transfers or otherwise, in any partnership, corporation or other entity, or
entry into any agreement or commitment to do the same, (ix) any acquisition of
(or commitment to acquire) the stock or equity interests of any entity or the
operating assets of any going business, (x) any forgiving, release,
cancellation, compromise or lapse of any debt or claim of Sellers, other than in
the ordinary course of business consistent with past practices or pursuant to a
Bankruptcy Court order, (xi) any incurrence of Indebtedness by Sellers or (xii)
any increase in the compensation payable or to become payable to any officer or
employee of Sellers except for increases in salaries or wages in the ordinary
course of business and in a manner consistent with past practice, or any
material increase in the benefits under, or the establishment of, any employee
benefit plan, including any DB Plan; and Sellers have not agreed to, and do not
intend, to take any action contemplated by the foregoing clauses (i) through
(xii) of this Section 5.1(bb).
(cc) Undisclosed Liabilities. None of Sellers has any material
liability, except for (i) liabilities set forth on the face of the Unaudited
Balance Sheet (rather than in any notes thereto) and (ii) liabilities which have
arisen after March 31, 2002 in the ordinary course of business of Sellers.
33
(dd) Other Negotiations; Brokers. None of Sellers or any
Person retained by or acting for or on behalf of any Seller, or any Affiliate of
any such Person (i) has entered into any agreement that conflicts with any of
the transactions contemplated by this Agreement or (ii) has entered into any
agreement or had any discussions with any third party regarding any transaction
involving any Seller, which could result in any such Seller, Purchaser, or their
respective shareholders, members or any general partner, limited partner,
manager, officer, director, employee, agent or Affiliate of any of them being
subject to any claim for liability to said third party as a result of entering
into this Agreement or consummating the transactions contemplated hereby or
thereby. Except as set forth in Schedule 5.1(dd), no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
commission payable by Seller or any Subsidiary of Seller in connection with this
Agreement or the transactions contemplated hereby based upon arrangements made
by and on behalf of Seller.
(ee) Investment. Each Seller (i) understands that the
Purchaser Interests and the Senior Secured Note have not been, and will not be,
registered under the Securities Act or under any state securities Laws, and are
being offered and sold in reliance upon federal and state exemptions for
transactions not involving any public offering, (ii) will bear the economic risk
of acquiring the Purchaser Interests and the Senior Secured Note and will not be
deemed to be an underwriter under the Securities Act or any rules or regulations
promulgated thereunder, (iii) acknowledges that Purchaser has made no
representations or warranties to it as to the future financial performance or
prospects of Purchaser, the present or future value of the Purchaser Interests
and the Senior Secured Note, or the likelihood that the obligations constituting
the Purchaser Interests and the Senior Secured Notes will be paid in full and in
a timely fashion, (iv) agrees that it has, independently and without reliance on
Purchaser, and based on each such Seller's detailed knowledge of the Purchased
Assets as owner of such assets and the Assumed Liabilities and such other
documents and information as it has deemed appropriate, made its own analysis of
Purchaser, its future financial performance and its prospects and value of the
Purchaser Interests and the Senior Secured Note and has made its own decision to
accept the Purchaser Interests and the Senior Secured Note as part of the
Purchase Price, (v) agrees that it will, independently and without reliance upon
Purchaser, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement and the Attendant Documents,
and (vi) is an "accredited investor" as defined in Regulation D promulgated
under the Securities Act. Each Seller further acknowledges that each Seller will
be restricted from transferring the Purchaser Interests pursuant to the terms of
the Purchaser Operating Agreement or from transferring the Senior Secured Note
pursuant to the terms thereof.
(ff) Solvency of Non-Debtor Sellers. None of the Non-Debtor
Sellers is now insolvent, nor will any Non-Debtor Seller be rendered insolvent
by any of the transactions contemplated by this Agreement. As used in this
Section 5.1(ff), the term "insolvent" means that the sum of the debts and other
probable liabilities of the applicable Non-Debtor Seller exceeds the fair
present value of such Non-Debtor Seller's assets. Immediately after giving
effect to the consummation of the transactions contemplated by this Agreement:
(A) each Non-Debtor Seller will be able to pay its liabilities as they become
due in the ordinary course of business of such Non-Debtor Seller; and (B) each
Non-Debtor Seller will not have unreasonably small capital with which to conduct
its present or proposed business.
34
(gg) Litigation. Schedule 5.1(gg) sets forth each instance in
which any Non-Debtor Seller (i) is subject to any outstanding injunction,
judgment, order, decree, ruling, or charge or (ii) is a party or, to Sellers'
Knowledge, threatened to be made a party to any action, suit, proceeding,
hearing, or investigation of, in, or before any court or administrative agency
of any federal, state, local, or foreign jurisdiction. None of the actions,
suits, proceedings, hearings and investigations set forth in Schedule 5.1(gg)
questions the enforceability of this Agreement or the transactions contemplated
by this Agreement or, if adversely determined, would reasonably be expected to
adversely affect the Purchased Assets to be acquired from such Non-Debtor
Seller, individually or in the aggregate, by an amount of Two Hundred Thousand
U.S. Dollars ($200,000.00) or more.
Section 5.2 Representations and Warranties of Purchaser. Purchaser
hereby represents and warrants to Sellers the following:
(a) Good Standing and Authority. Purchaser is a limited
liability company organized, validly existing and in good standing under the
laws of the State of Delaware. Purchaser is duly qualified to do business as a
foreign entity and is in good standing in each jurisdiction in which it is
required to be qualified. Purchaser has full limited liability company power and
authority to enter into this Agreement, to enter into the Attendant Documents to
which it is a party and to consummate the transactions contemplated in this
Agreement. This Agreement and all of the Attendant Documents to which Purchaser
is a party, and the consummation of the transactions contemplated in this
Agreement, have been or will be, on or prior to the Closing Date, duly
authorized and approved by all necessary and proper limited liability company
action on the part of Purchaser. This Agreement, and all of the Attendant
Documents to which Purchaser is a party, when executed and delivered, will
constitute legal, valid and binding obligations of Purchaser enforceable against
such Purchaser in accordance with their respective terms.
(b) Non-Violative Agreement. Neither the execution and
delivery of this Agreement or the Attendant Documents to which Purchaser is a
party nor the consummation of the transactions contemplated in this Agreement
will conflict with, result in the breach or violation of or constitute a default
under the terms, conditions or provisions of Purchaser's certificate of
formation or limited liability company agreement or any other material agreement
or instrument to which Purchaser is a party, or by which Purchaser is bound.
(c) Consents, Approvals or Authorizations. Except as
contemplated by this Agreement, no consent, approval or authorization of, filing
or registration with, or notification to, any Governmental Authority is required
in connection with the execution and delivery of this Agreement by Purchaser or
the consummation by Purchaser of the transactions contemplated hereby, other
than any consent, approval or authorization, filing or registration with, or
notification to, which if not obtained or made would not materially and
adversely affect Purchaser's ability to consummate the transactions contemplated
hereby. No consent, approval or authorization of any Person is required in
connection with the execution and delivery of this Agreement by Purchaser or the
consummation by Purchaser of the transactions contemplated hereby.
35
(d) Purchaser Interests. All of the issued and outstanding
Purchaser Interests (i) have been duly authorized, are validly issued, fully
paid, and nonassessable, and (ii) were issued in compliance with all applicable
state and federal securities Laws. The Purchaser Interests to be issued pursuant
to this Agreement will be duly authorized, validly issued, fully paid and
nonassessable and will on the Closing Date be issued in compliance with all
applicable federal and state securities Laws.
(e) Options and Warrants. There is no existing option,
warrant, call, right, commitment or other agreement of any character to which
the Purchaser or Purchaser Member is a party requiring, and there are no
securities of Purchaser outstanding which upon conversion or exchange would
require, the issuance, sale or transfer of any additional Purchaser Interests or
other equity securities of Purchaser or other securities convertible into,
exchangeable for or evidencing the right to subscribe for or purchase Purchaser
Interests or other equity securities of Purchaser. Except for the limited
liability company agreement of Purchaser, neither the Purchaser nor the
Purchaser Member is a party to any voting trust or other voting agreement with
respect to any of the Purchaser Interests or to any agreement relating to the
issuance, sale, redemption, transfer or other disposition of equity interests of
Purchaser.
(f) Operations of Purchaser. Purchaser was formed solely for
the purpose of engaging in the transactions contemplated hereby, has engaged in
no other business activities and has and on the Closing Date will have,
conducted its operations only as contemplated hereby.
(g) Financing. Purchaser shall have on the Closing Date
sufficient unrestricted funds on hand or committed lines of credit or funds to
pay the Cash Consideration.
Section 5.3 Amendments to Disclosure Schedules. From time to time prior
to the Closing, Sellers shall, by written notice to Purchaser or upon the
written request of Purchaser, amend the Schedules to this Agreement to reflect
any matters hereafter arising or which hereafter come to their attention which,
if existing, occurring or known to Sellers at the date of this Agreement, would
have been required to be set forth or described in the Schedules to this
Agreement; provided that (i) no such notice or amendment to the Schedules
pursuant to this Section 5.3 shall be deemed to cure any breach of any
representation or warranty which is made in this Agreement as of the date hereof
as of the date of such delivery, and (ii) no such notice or amendment shall have
any effect for purposes of determining whether the condition in Section 9.1(c)
has been satisfied.
ARTICLE VI
EMPLOYEE MATTERS
----------------
Section 6.1 Employees.
---------
(a) Termination and Rehire of Sellers' Employees. Effective as
of the Closing Date, Sellers shall terminate the employment of all employees of
Sellers at the Purchased Plants ("Sellers' Employees") and Purchaser shall offer
or cause to be offered employment to certain of Sellers' Employees in accordance
with the xxxxxxx plan agreed to by Purchaser and Republic as of the date hereof
36
and as may be amended from time to time by mutual agreement prior to the
Closing. Nothing contained in this Agreement shall require the Purchaser to
maintain the employment of any Hired Employee. For purposes of this Agreement,
Sellers' Employees who are offered and, on or after the Closing Date, accept and
actually commence employment with Purchaser or any Subsidiary of Purchaser shall
be referred to herein as "Hired Employees."
(b) WARN Act Notices. The Sellers shall indemnify and hold
harmless Purchaser and its Affiliates from all costs, liabilities and expenses,
including, without limitation, reasonable attorneys fees, incurred by Purchaser
or any of its Affiliates as a result of any violation of, or failure to comply
with, the WARN Act based on the transaction contemplated by this Agreement. For
purposes of the WARN Act and this Section 6.1(b), "Closing Date" shall mean the
"effective date" of the transaction contemplated by this Agreement, as defined
in the WARN Act. Notwithstanding the foregoing, prior to the Closing Date,
Purchaser shall have the right to negotiate terms of employment with non-union
represented individuals to become effective immediately after the Closing with
such employees of Sellers as is determined by Purchaser in its sole discretion.
(c) Alternative Tax Procedure. Pursuant to the "Alternative
Procedure" provided in Section 5 of Revenue Procedure 96-60, 1996-2 C.B. 399,
(i) Purchaser and Republic shall report on a predecessor/successor basis as set
forth therein, (ii) Sellers will be relieved from filing a Form W-2 with respect
to any Hired Employees for the year that includes the Closing Date; and (iii)
Purchaser will undertake to file (or cause to be filed) a Form W-2 and any of
the other tax related forms permitted to be filed on a predecessor/successor
basis in Section 5 of Revenue Procedure 96-60 for each such Hired Employees for
the year that includes the Closing Date (including the portion of such year that
such employee was employed by Seller). Republic shall provide Purchaser on a
timely basis with all payroll and employment-related information with respect to
each Hired Employee.
Section 6.2 Employee Benefit Plans.
----------------------
(a) Employee Benefit Plans and Fringe Benefit Plans and
Policies. Effective as of the Closing Date, Purchaser shall cause the Hired
Employees to be covered under new or existing employee benefit plans and fringe
benefit plans which, in the aggregate, provide Hired Employees with such
benefits as Purchaser deems appropriate in its sole discretion ("Purchaser's
Plans"); provided, however, that Purchaser's Plans shall meet the requirements
of each collective bargaining agreement to which Purchaser is a party with
respect to those Hired Employees whose terms and conditions of employment are
subject to such collective bargaining agreement; provided further that the
compensation and benefits offered by Purchaser to the Hired Employees shall be
sufficient so as not to constitute a "constructive termination" for purposes of
triggering the WARN Act and other applicable state and federal law.
(b) Current Vacation Accruals. Effective as of the Closing
Date, Purchaser shall, in accordance with Schedule 6.2(b), provide each Hired
Employee with the number of his or her unused accrued vacation days (but not
sick or other paid time off days) outstanding as of the Closing Date under the
applicable vacation policy of Sellers or the Successor Labor Agreement and shall
not cause any forfeiture of any such days such that Purchaser shall pay the cash
37
equivalent of any such days that remain unused as of the Hired Employee's
termination of employment with Purchaser to the extent applicable; provided,
however, that in determining the number of any such days that are unused as of a
Hired Employee's termination of employment with Purchaser, such Hired Employee
shall be deemed to have used days credited under this Section 6.2(b) prior to
any vacation days accrued while such Hired Employee is employed by Purchaser.
(c) Group Health Plan. Republic shall continue to maintain its
group health plan for so long as there are any employees at either Republic or
any ERISA Affiliate; provided, however, that Republic may terminate such group
health plan prior to the termination of all such employees if and when it
becomes prohibitively expensive for Republic to maintain such group health plan,
but in no event shall such plan be terminated prior to January 1, 2003.
(d) Expense Reimbursement. Purchaser will reimburse Republic
for pre-Closing compensation expenses with respect to both the Hired Employees
and Sellers' employees who do not become Hired Employees, but only if and to the
extent such expenses (i) were incurred in the ordinary course of business
consistent with past practice, (ii) were accrued as of the Closing Date, (iii)
are not covered by any insurance maintained by any Seller, not payable from any
assets held in a VEBA or other welfare benefit fund of any Seller, and not the
obligation of any third party, (iv) consist exclusively of accrued wages, back
payroll taxes (withholding only), accrued vacation benefits, accrued management
performance incentives, health insurance benefits incurred but not reported, and
workers' compensation, and (v) do not in the aggregate exceed Twenty-Nine
Million, Five Hundred Thousand U.S. Dollars ($29,500,000.00), subject to the
following conditions and limitations:
(i) Such accrued wages will be reimbursed only for (x) hourly
employees (both hourly Hired Employees and hourly employees who do not
become Hired Employees) and (y) if Closing occurs other than on the
15th or last work day of a month, salaried employees (both salaried
Hired Employees and salaried employees who do not become Hired
Employees).
(ii) Such accrued vacation will be reimbursed only for Hired
Employees (both hourly Hired Employees and salaried Hired Employees).
(iii) Such incurred but unreported health insurance benefits
will be reimbursed only for (x) Hired Employees (both hourly Hired
Employees and salaried Hired Employees) and (y) Sellers' hourly
employees represented by the United Steel Workers of America who do not
become Hired Employees, but in the case of such hourly employees who do
not become Hired Employees, only if and to the extent such expenses
consist exclusively of health insurance benefits incurred but not
reported and only if and to the extent such expenses do not in the
aggregate exceed Two Million, One Hundred Thousand U.S. Dollars
($2,100,000.00).
(iv) Such workers' compensation claims will be reimbursed only
for Ohio employees (both Ohio Hired Employees and Ohio employees who do
not become Hired Employees).
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(v) Such back payroll taxes will be reimbursed for both Hired
Employees and employees who do not become Hired Employees.
(vi) Such management incentives will be reimbursed only for
salaried employees (both salaried Hired Employees and salaried
employees who do not become Hired Employees).
(vii) Reimbursement will be made by Purchaser as soon as
administratively practicable following receipt of written notice of
payment of any such eligible expenses along with documentation that
such payment complies with the requirements for reimbursement set forth
herein.
(viii) Purchaser will have no reimbursement obligation under
this Section 6.2(d) for any expenses for which Purchaser receives
notice of a claim following thirteen months after the Closing.
Section 6.3 Workers' Compensation. Sellers shall be responsible for all
workers' compensation claims arising out of events occurring on or prior to the
Closing Date, except as expressly assumed by Purchaser in this Agreement.
Purchaser shall be responsible for all workers' compensation claims arising out
of events occurring after the Closing Date.
Section 6.4 Management Incentive Plans.
(a) Key Management Employment Benefits. Purchaser shall
provide to the managers listed on Schedule 6.4(a) ("Key Managers") employment
benefits similar to those provided by Sellers to such individuals at the date
hereof other than those provided under the Lender Retention Program.
(b) Key Management Severance and Termination Plans. Purchaser
shall assume the severance and termination plans and protections provided by
Sellers described in Schedule 6.4(b) with respect to Key Managers or adopt new
severance and termination plans and protections on substantially similar terms.
(c) Equity Incentive Plan. After the Closing, Purchaser shall
adopt an equity-based incentive program for the managers of Purchaser and such
other Persons as the board of directors of Purchaser may determine from time to
time. Such equity-based incentive program initially shall reserve up to 9% of
the Purchaser Interests outstanding immediately after Closing and shall grant
equity incentives to participants in such plan under terms, conditions and
amounts to be determined by the board of directors of Purchaser. The terms of
any such plan will provide for the granting of options and the issuance of
Purchaser Interests. Purchaser Interests issued under such plan will dilute
ratably all equity interests in Purchaser that are outstanding immediately after
Closing.
Section 6.5 Mutual Cooperation. Each of the parties hereto shall
mutually cooperate and provide the other party with such records, information,
documentation and assistance as such party reasonably requests in order to carry
out the party's respective obligations under this Article VI.
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ARTICLE VII
TAX MATTERS
Section 7.1 Transfer Taxes. Subject to bankruptcy court approval, in
accordance with Section 1146(c) of the Bankruptcy Code, the making or delivery
of any instrument of transfer under a plan confirmed under Section 1129 of the
Bankruptcy Code shall not be taxed under any law imposing a stamp tax or similar
tax. The instruments transferring the Purchased Assets to Purchaser shall
contain the following endorsement:
"Because this [instrument] has been authorized pursuant to Order of the
United States Bankruptcy Court for the Northern District of Ohio,
Eastern Division, relating to a plan of reorganization of the Grantor,
it is exempt from transfer taxes, stamp taxes or similar taxes pursuant
to 11 U.S.C. ss. 1146(c), and any officer receiving this [instrument]
is hereby authorized and directed to permit the transfer contemplated
by this [instrument] without the payment of any stamp tax, transfer tax
or similar tax."
Purchaser and Sellers shall cooperate in providing each other with any
appropriate resale exemption certifications and other similar documentation.
In the event real estate, stamp taxes or similar taxes (including,
without limitation, transfer taxes) ("Transfer Taxes") are required to be paid
in order to record the deeds to be delivered to Purchaser in accordance
herewith, or in the event any such Transfer Taxes are assessed at any time
thereafter, such real estate Transfer Taxes incurred as a result of the
transactions contemplated hereby shall be paid 50% by Purchaser and 50% by
Sellers. In the event sales, use or other Transfer Taxes are assessed on the
transfer of any Purchased Assets as a result of the transactions contemplated
hereby, such Transfer Taxes shall be paid 50% by Purchaser and 50% by Sellers.
Purchaser and Sellers agree to cooperate to determine the amount of
Transaction Taxes payable in connection with the transactions contemplated under
this Agreement. Purchaser agrees to assist Sellers reasonably in the preparation
and filing of any and all required returns for or with respect to such
Transaction Taxes with any and all appropriate taxing authorities. Nothing in
this Section 7.1 shall require Purchaser to be liable for any of the income tax
liability of Seller.
Section 7.2 Proration of Real and Personal Property Taxes. The real and
personal property Taxes and assessments on the Purchased Assets for any taxable
period commencing prior to the day immediately preceding the Closing Date (the
"Adjustment Date") and ending after the Adjustment Date shall be prorated
between Purchaser and Seller as of the close of business on the Adjustment Date.
All such prorations shall be allocated so that items relating to time periods
ending on the Adjustment Date shall be allocated to Republic based upon the
number of days in the period prior to the Closing Date and items related to time
periods beginning after the Adjustment Date shall be allocated to Purchaser
based on the number of days in the period from and after the Closing Date;
provided, however, that the parties shall allocate any real property Tax subject
40
to the limitation set forth in Section 3.1(a)(vi). The amount of all such
prorations shall be settled and paid on the Closing Date; provided, however,
that final payments with respect to prorations that are not able to be
calculated on the Closing Date shall be calculated and paid as soon as
practicable thereafter.
Section 7.3 Tax Returns; Cooperation on Tax Matters.
---------------------------------------
(a) Republic shall be responsible for the preparation and
filing of all Tax Returns for Sellers for all periods as to which Tax Returns
are due after the Closing Date (including the consolidated, unitary and combined
Tax Returns for such Seller) which include the operations of the Business for
any period ending on or before the Closing Date. Republic shall make all
payments required with respect to any such Tax Returns, to the extent not
prohibited, stayed or discharged by the Bankruptcy Court.
(b) Purchaser shall be responsible for the preparation and
filing of all Tax Returns for the Business for all periods as to which Tax
Returns are due after the Closing Date (other than for Taxes with respect to
periods for which the consolidated, unitary, and combined Tax Returns of
Republic will include the operations of the Business). Purchaser will make all
payments required with respect to any such Tax Returns; provided, however, that
Republic shall reimburse Purchaser three (3) Business Days prior to the due date
for filing such Tax Returns to the extent any payment Purchaser makes relates to
the operation of the Business for any period or portion thereof ending on or
before the Closing Date.
(c) Purchaser and Republic agree to furnish or cause to be
furnished to each other, as promptly as practicable, such information and
assistance relating to the Purchased 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 governmental or regulatory
inquire relating to Tax matters.
(d) Purchaser agrees to retain possession, at its own expense,
of all accounting, business, financial and Tax records and information (i)
relating to the Purchased Assets or the Assumed Liabilities that are in
existence on the Closing Date and transferred to Purchaser hereunder and (ii)
coming into existence after the Closing Date that relate to the Purchased Assets
or the Assumed Liabilities before the Closing Date, for a period of at least six
years from the Closing Date. In addition, from and after the Closing Date,
Purchaser agrees that it will provide access to Sellers and their attorneys,
accountants and other representatives (after reasonable notice, during normal
business hours and in a manner so as not to interfere with the normal business
operations of Purchaser), to the books, records, documents and other information
relating to the Purchased Assets or the Assumed Liabilities and to any officers
of Purchaser that are Hired Employees as Sellers may reasonably deem necessary
to (x) 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 (y) 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
Purchased Assets or the Assumed Liabilities.
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Section 7.4 Allocation Purchase of Price and Purchase Price Allocation
Forms. Purchaser and Sellers agree to allocate the Purchase Price and the
Assumed Liabilities among the Purchased Assets (and among Sellers) in accordance
with a schedule to be reasonably agreed to between them prior to the Closing
Date (the "Allocation"), provided that if Purchaser and Sellers are not able to
agree on the Allocation prior to the Closing Date, Purchaser's schedule of
allocation will be the Allocation with Republic's consent, which consent shall
not be unreasonably withheld. Sellers and Purchaser will cooperate in filing
with the IRS their respective Forms 8594 as provided for in Section 1060 of the
Code on a basis consistent with the Allocation, and the Allocation shall be
reflected on any Tax Returns required to be filed as a result of the
transactions contemplated hereby.
ARTICLE VIII
COVENANTS AND ADDITIONAL AGREEMENTS
-----------------------------------
Section 8.1 Approval Proceedings.
--------------------
(a) Sellers shall refrain from knowingly taking any action
that would be likely to result in the revocation of, the entry of the Bidding
Procedures Order.
(b) Sellers shall (i) use their commercially reasonable
efforts to cause the entry of the Sale Order by the Bankruptcy Court on or
before July 15, 2002, which date Purchaser may waive or extend at its sole
discretion, and (ii) use their commercially reasonable efforts to obtain, and
shall refrain from knowingly taking any action that would be likely to delay,
prevent, impede or result in the revocation of the entry by the Bankruptcy Court
of the Sale Order.
(c) Sellers shall provide notice of the proposed sale of the
Purchased Assets, in form and substance reasonably acceptable to Purchaser and
in such manner as may be required by Law, to Sellers' creditors, all
Governmental Authorities that have filed a notice of appearance in the Chapter
11 Cases, all parties to the Purchased Contracts and Reference Leases and all
parties entitled to notice of the Sale Motion by such date as shall allow
sufficient time for the Sale Order to be entered by the Bankruptcy Court on or
before July 9, 2002 (the "Required Creditor Notices").
Section 8.2 Good Faith Deposit. Within two (2) Business Days after the
deadline for receipt of Qualified Bids, but, in any event, prior to the date of
the Auction, Purchaser shall cause to be issued a letter of credit to an escrow
agent to be jointly selected by Purchaser and Republic (the "Escrow Agent") in
the amount of Five Million U.S. Dollars ($5,000,000.00) (the "Good Faith
Deposit"). The Escrow Agent shall hold the Good Faith Deposit pursuant to a
customary escrow agreement in form and substance reasonably satisfactory to
Purchaser and Republic. Purchaser shall not be required to provide the Good
Faith Deposit in the event Seller does not receive any Qualified Bids by the
deadline therefor. The Good Faith Deposit may be drawn down by Republic only if
(a) Republic terminates this Agreement pursuant to Section 12.1(e) and Sellers
are not then in material breach of their representations, warranties or
covenants under this Agreement or (b) at Closing, at the sole election of
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Purchaser, to satisfy a portion of the Cash Consideration. In all other
circumstances, the Good Faith Deposit shall be promptly returned to Purchaser.
Section 8.3 Access to Information, Confidentiality.
--------------------------------------
(a) Sellers shall, and shall cause each of their respective
officers, directors, employees, auditors and other agents of Sellers to afford
the Affiliates, officers, directors, employees, auditors and other agents of
Purchaser and its Affiliates reasonable access during normal business hours to
the officers, directors, employees, agents, properties, offices, plants and
other facilities of Sellers and to all books and records of Sellers, and shall
furnish Purchaser and its Affiliates with all financial, operating and other
data and information with respect to the business and properties of Sellers as
Purchaser, through its Affiliates and their respective officers, employees or
agents.
(b) Sellers shall promptly provide Purchaser with drafts of
all documents, motions, orders, filing or pleadings that Seller or any of its
Subsidiaries proposes to file with the Bankruptcy Court which relate to (i) this
Agreement or the transactions contemplated hereunder, (ii) entry of the Sale
Order and, (iii) the sale of the Purchased Assets by Sellers and assumption of
Assumed Liabilities by Purchaser, and will provide Purchaser with a reasonable
opportunity to review such documents in advance of their service and filing.
Sellers shall consult and cooperate with Purchaser, and consider in good faith
the views of Purchaser with respect to all such filings. Notwithstanding any
provision to the contrary herein, Sellers shall not seek to amend or modify any
provision of the Bidding Procedures Order or the Sale Order without the prior
written consent of Purchaser.
(c) From the date hereof until the Closing Date, except as may
be required by Law, neither Purchaser nor its Affiliates, employees, agents, and
representatives (collectively, "Purchaser Representatives") will disclose to any
third party the information concerning Sellers that it may have acquired from
Sellers in the course of its due diligence investigation with respect to Sellers
in Section 8.3(a) and (b) hereof without the prior written consent of Seller;
provided, however, Purchaser Representatives may disclose any such information
as follows: (i) to the extent that the information is or becomes generally
available to the public through no fault of any Purchaser Representative making
such disclosure; (ii) to the extent that the same information is in the
possession of the Purchaser Representative making such disclosure prior to
receipt of such information; (iii) to the extent that the Purchaser
Representative that received the information independently developed the same
information prior to the date the Purchaser Representative received such
information from Sellers without relying on any information; or (iv) to the
extent that the same information becomes available to such Purchaser
Representative making such disclosure on a non-confidential basis from a source
other than a Purchaser Representative which is not known by Purchaser
Representative to be confidential. If the transactions contemplated hereby are
not consummated, the Purchaser Representatives will return or destroy the
confidential information upon the written request of Seller. In the event that
Purchaser or any Purchaser Representative is required by Law or legal process to
disclose all or any part of any such confidential information, Purchaser shall
promptly notify Republic of the existence, terms and circumstances surrounding
such a request so that it may seek an appropriate protective order, at
Republic's sole cost and expense, prior to Purchaser's disclosure of such
information.
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Section 8.4 Notification of Certain Matters. Sellers shall give prompt
notice to Purchaser of (i) the occurrence or non-occurrence of any event the
occurrence or non-occurrence of which would be likely to cause any
representation or warranty contained in this Agreement to be materially untrue
or inaccurate (without giving effect to any limitation as to "materiality" set
forth therein), (ii) any failure of Sellers to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder and (iii) the occurrence or non-occurrence of any event the occurrence
or non-occurrence of which would have a Material Adverse Effect; provided,
however, that the delivery of any notice pursuant to this Section 8.4 shall not
limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
Section 8.5 HSR Act.
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(a) Subject to the terms and conditions of this Agreement, each of the
parties will (i) use commercially reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary under
applicable antitrust Laws to consummate the transactions contemplated by this
Agreement, (ii) use commercially reasonable efforts to supply as promptly as
practicable any additional information and documentary material that may be
requested pursuant to the HSR Act and (iii) use commercially reasonable efforts
to cause the expiration or termination of the applicable waiting periods under
the HSR Act as soon as practicable.
(b) In connection with the efforts to obtain all requisite approvals
and authorizations for the transactions contemplated by this Agreement under the
HSR Act or any other antitrust Law, each of the parties shall use commercially
reasonable efforts to (i) cooperate, and assist as reasonably requested, with
each other in connection with any filing or submission and in connection with
any investigation or other inquiry, including any proceeding initiated by a
private party, (ii) keep the other parties informed in all material respects of
any material communication received by such party from, or given by such party
to, the Federal Trade Commission (the "FTC"), the Antitrust Division of the
Department of Justice (the "DOJ") or any other Governmental Authority and of any
material, communication received or given in connection with any proceeding by a
private party, in each case regarding any of the transactions contemplated
hereby and (iii) permit the other parties to review any material communication
given to it by, and consult with each other in advance of any meeting or
conference with, the FTC, the DOJ or any other Governmental Authority in
connection with any proceeding by a private party. Each of the parties thereto
will coordinate and cooperate fully with the other parties hereto in exchanging
information and providing such assistance as such other parties may reasonably
request in connection with the foregoing and in seeking early termination of any
applicable waiting periods under the HSR Act. Sellers shall maintain in the
strictest confidence any material, non-public information about Purchaser or any
of Purchaser's direct or indirect Affiliates obtained in connection with the
foregoing efforts and shall cause any employee, officer, director or
representative of Sellers to maintain such information in the strictest
confidence.
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Section 8.6 Filings and Approvals Regarding the Railroad Subsidiary.
-------------------------------------------------------
(a) As soon as practicable following the date of this Agreement,
Purchaser shall make or cause to be made all filings with and submissions to the
Surface Transportation Board under the ICC Termination Act that are required in
connection with the consummation of the transactions contemplated by this
Agreement in respect of the Railroad Subsidiary. Sellers shall assist and
support, and Republic shall cause the Railroad Subsidiary to assist and support,
Purchaser in the preparation of such filings and submissions, and Purchaser
shall provide Republic an opportunity to review and comment on all such filings
and submissions prior to their transmittal to the Surface Transportation Board.
(b) If the approvals or exemptions of the transactions from the Surface
Transportation Board contemplated by this Agreement in respect of the assets of
the Railroad Subsidiary have not been obtained or become effective by the
Closing Date, Sellers shall continue to use their commercially reasonable
efforts to obtain all approvals or exemptions and, notwithstanding anything to
the contrary herein, until such approvals or exemptions are obtained, this
Agreement shall not constitute an agreement to assign the assets of the Railroad
Subsidiary and to the extent permitted by Law and subject to any required
exemptions or approvals, from and after the Closing Date (i) Republic shall use
commercially reasonable efforts to cause the Railroad Subsidiary to continue to
operate in the ordinary course of business or as otherwise reasonably directed
by Purchaser, (ii) Republic shall, and Republic shall cause the Railroad
Subsidiary to, enter into any reasonable arrangement designed to provide
Purchaser with the benefits of, and cause Purchaser to bear the costs and
obligations of, Republic's ownership of the Railroad Subsidiary and (iii)
Purchaser shall indemnify Sellers for any losses arising out of the operation of
the Railroad Subsidiary from and after the Closing Date.
Section 8.7 Further Action.
--------------
(a) Upon the terms and subject to the conditions hereof, each
of the parties hereto shall use its commercially reasonable efforts to take or
cause to be taken all appropriate action and to do or cause to be done all
things necessary, proper or advisable under applicable Laws to consummate the
transactions contemplated by this Agreement as promptly as practicable,
including using its commercially reasonable efforts to obtain all Permits and
orders from Governmental Authorities and consents, approvals and authorizations
from parties to contracts with any Seller as are necessary for the consummation
of the transactions contemplated by this Agreement and to fulfill the conditions
to the Closing. Sellers shall use their commercially reasonable efforts, in
cooperation with Purchaser, to secure, transfer, assign or otherwise convey to
Purchaser all Permits necessary for the continued post-Closing operation of the
Purchased Assets or discharge the Assumed Liabilities in compliance with all
applicable Laws and Environmental Laws.
(b) Each party hereto agrees to cooperate in obtaining any
other consents and approvals that may be required in connection with the
transactions contemplated by this Agreement; provided, however, that no party
hereto shall be required to compensate any third party to obtain any such
consent or approval.
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(c) Prior to the execution and delivery of this Agreement,
Purchaser instructed a Title Company to obtain title insurance commitments and
corresponding Surveys. Promptly after Purchaser receives such title commitments
and corresponding Surveys, Purchaser shall deliver copies thereof, as well as
further continuations, supplements or revisions thereto, directly to Sellers.
Purchaser shall use commercially reasonably efforts for the market in which the
respective properties are located to cause the Title Company to deliver title
insurance commitments and to cause the corresponding Surveys to be completed as
soon as possible and in any event delivered prior to Closing.
Section 8.8 Conduct of the Business. Except as contemplated by this
Agreement or with the prior written consent of Purchaser, Sellers covenant and
agree that, during the period between the date of this Agreement and the
Closing, Sellers shall (i) conduct the Business in a manner consistent with past
practice, and (ii) confer on a regular and frequent basis with one or more
Purchaser Representatives to report operational matters and the general status
of ongoing operations including sales levels, profit margins, cost increases,
changes or modifications to the operations of Sellers or their Subsidiaries and
adverse trends. Notwithstanding the generality of the foregoing, Sellers and
their Subsidiaries shall not, during the period between the date of this
Agreement and the Closing, directly or indirectly do, or propose or commit to
do, any of the following, except as provided by this Agreement or following (x)
the prior written notice thereof to Purchaser and (y) receipt by Sellers of
Purchaser's written non-objection thereto:
(a) amend or otherwise change the Certificates of
Incorporation, Bylaws or other constitutive documents of Sellers;
(b) issue, sell, pledge, dispose of or encumber, or authorize
the issuance, sale, pledge, disposition or encumbrance of, (i) any shares of
capital stock of any class or any securities, or any options, warrants,
convertible securities or other rights of any kind to acquire any shares of
capital stock or any securities, or any other ownership interest, of Republic or
any of its Subsidiaries or (ii) any Purchased Assets, except for sales of
inventory in the ordinary course of business and in a manner consistent with
past practice;
(c) reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly, any of its capital stock or any of
its securities;
(d) (i) acquire (by merger, consolidation or acquisition of
stock or assets) any corporation, partnership or other business organization or
division thereof or collection of assets constituting all or substantially all
of a business or business unit; (ii) incur any Indebtedness or issue any debt
securities or assume, guarantee or endorse, or otherwise as an accommodation
become responsible for, the obligations of any Person (provided that Seller
shall be permitted to borrow money under the Debtor-in-Possession Revolving
Credit Agreement); (iii) enter into any material Contract, agreement or lease
other than in the ordinary course of business and in a manner consistent with
past practice; or (iv) enter into or amend any contract, agreement, commitment
or arrangement with respect to any of the matters set forth in this Section
8.10(d);
(e) enter into any Contract or amend or modify any existing
Contract with any of its shareholders, members, officers, directors, employees,
including making any loan or advance to any such Affiliate other than advances
historically made to employees in the ordinary course in connection with the
46
performance of their employment, vacation advances, relocation loans and travel
advances, in each case made in the ordinary course of business and consistent
with past practice.
(f) close any production facility or reject any Reference
Leases or Third Party Leases, provided that Sellers shall renew in accordance
with its terms any Reference Lease that is subject to renewal if, but only if,
Purchaser shall have delivered written notice to Sellers not less than 15
Business Days prior to the lease renewal date for such Reference Lease directing
Seller to renew such Reference Lease;
(g) pay, discharge or satisfy any material claims, liabilities
or obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the ordinary
course of business of liabilities reflected or reserved against in the Unaudited
Financial Statements of Sellers or incurred in the ordinary course of business
in a manner consistent with past practice including payments due and payable
under the Debtor-in-Possession Revolving Credit Agreement;
(h) restructure, write-off or forgive, or agree to restructure
write-off or forgive, any receivables;
(i) introduce system-wide or regional changes in operations or
products, other than operations or products consistent with the continuing
operation of the production facilities and purchase orders of Republic and any
of its Subsidiaries, except as described on attached Schedule 8.8(i);
(j) other than in the ordinary course of business, (A) enter
into, or agree to enter into, any new purchasing or distribution agreements, or
amend or agree to amend any existing purchasing or distribution agreements or
(B) enter into, or agree to enter into, any contract or agreement of a type
which, if it had been in effect on the date of this Agreement, would have been
required to have been identified on Schedule 5.1(e)(i), except, in each case, as
described on attached Schedule 8.8(j);
(k) enter into new leases in respect of real property not
leased by Sellers as of the date hereof or modify the terms of any Reference
Lease or enter into any sublease with respect to any Reference Lease;
(l) change or revoke any federal, state, local or foreign Tax
election, settle any federal, state, local or foreign Tax audit or file any
amended Tax Return with respect to federal, state, local or foreign Taxes for
which Purchaser would be responsible;
(m) change any method or period of accounting or change any
significant accounting policy, practice, or procedure or any material estimates;
(n) take or omit to take any action that would make any
representation or warranty of Seller and its Subsidiaries hereunder inaccurate
in any material respect;
47
(o) increase, except pursuant to existing contracts or
established practice, the salary, compensation or benefits payable to any
employees, directors or consultants or modify, establish or enter into any
employee benefit plan, including any DB Plan; or
(p) agree or otherwise commit to take any of the actions
prohibited by the foregoing clauses (a) through (o).
Section 8.9 Non-Assignable Contracts.
------------------------
(a) Notwithstanding anything contained in this Agreement to
the contrary, this Agreement shall not constitute an agreement to assign any
Purchased Contract or any claim, right or benefit arising thereunder or
resulting therefrom if an attempted assignment thereof without the consent of a
third party thereto would constitute a breach or other contravention thereof,
would be ineffective with respect to any such third party, or would in any way
adversely affect the rights of Purchaser or Sellers thereunder.
(b) With respect to any such Purchased Contract for which the
consent of a party thereto shall not have been obtained at Closing and any
claim, right or benefit arising thereunder or resulting therefrom, Sellers and
Purchaser shall each use their reasonable good faith efforts to obtain as
expeditiously as possible the written consent of the other parties to such
Purchased Contract for the assignment thereof to Purchaser.
(c) Unless and until any consent, waiver, confirmation,
novation or approval is obtained with respect to any such Purchased Contract,
Sellers and Purchaser shall cooperate to establish an arrangement satisfactory
to Purchaser under which Purchaser would obtain the claims, rights and benefits
and assume the corresponding liabilities and obligations thereunder (including
by means of any subcontracting, sublicensing or subleasing arrangement) or under
which Sellers would enforce for the benefit of Purchaser, with Purchaser
assuming and agreeing to pay Sellers' obligations, any and all claims, rights
and benefits of Sellers against a third party thereto. In such event, (i)
Sellers will promptly pay to Purchaser, when received, all moneys received by it
under any such Purchased Contract or any claim, right or benefit arising
thereunder, and (ii) Purchaser will promptly pay, perform or discharge, when
due, any and all obligations and liabilities arising thereunder, other than
those being contested in good faith.
Section 8.10 Acquisition Agreements. To the extent that any of the
acquisition agreements set forth on the attached Schedule 2.1(k) (the
"Acquisition Agreements") are not assignable without the consent of another
party, such consent is not obtained and there is hereafter discovered any event
or occurrence for which Purchaser would have been entitled to indemnification if
such Acquisition Agreement had been assigned to Purchaser (an "Indemnification
Claim"), Sellers shall, upon receipt of written notice from Purchaser, pursue
such Indemnification Claim on Purchaser's behalf at Purchaser's sole reasonable
expense. Purchaser shall control the investigation, defense and settlement
(including choice of counsel in its sole discretion) of any Indemnification
Claim and shall reimburse Sellers for all reasonable costs and expenses relating
thereto promptly upon presentation by Sellers of invoices or other documentation
evidencing such amounts to be reimbursed. Sellers shall make available to
Purchaser, at Purchaser's reasonable expense, its counsel and other
representatives, all information and documents available to them that relate to
such Indemnification Claim. Sellers shall also render to Purchaser, at
48
Purchaser's reasonable expense, such assistance and cooperation as may
reasonably be required to ensure the proper and adequate pursuit of such
Indemnification Claim. Sellers shall promptly remit and turn over to Purchaser
any recovery (including pursuant to any settlement, arbitration, judicial
proceeding or otherwise) relating to any such Indemnification Claim and such
recovery shall be deemed to be a Purchased Asset.
Section 8.11 Indemnification Agreements. Sellers and Purchaser shall
cooperate to establish arrangements reasonably acceptable to each of Purchaser
and Republic under which Purchaser would obtain certain claims, rights and
benefits and assume certain corresponding liabilities and obligations under the
indemnification agreements set forth on the attached Schedule 8.11 (the
"Indemnification Agreements") with respect to the Purchased Assets. Without
limiting the generality of the foregoing, if there is discovered any event or
occurrence for which indemnification would have been provided under such
Indemnification Agreements, Sellers shall, upon receipt of written notice from
Purchaser, pursue such indemnification claim on Purchaser's behalf at
Purchaser's sole reasonable expense. Purchaser shall control the investigation,
defense and settlement (including choice of counsel in its sole discretion) of
any such indemnification claim asserted under any Indemnification Agreement and
shall reimburse Sellers for all reasonable costs and expenses relating thereto
promptly upon presentation by Sellers of invoices or other documentation
evidencing such amounts to be reimbursed. Sellers, at Purchaser's reasonable
expense, shall make available to Purchaser, its counsel and other
representatives, all information and documents available to them that relate to
any such indemnification claim. Sellers also shall, at Purchaser's reasonable
expense, render to Purchaser such assistance and cooperation as may reasonably
be required to ensure the proper and adequate pursuit of any such
indemnification claim. Sellers shall promptly remit and turn over to Purchaser
any recovery (including pursuant to any settlement, arbitration, judicial
proceeding or otherwise) relating to any such indemnification claim and such
recovery shall be deemed to be a Purchased Asset. Purchaser shall be entitled to
satisfy any payment obligation, threshold amount or other condition to the
receipt of indemnification under any Indemnification Agreement. To the extent
that Purchaser and Republic may benefit from an indemnification claim asserted
under any Indemnification Agreement, and Purchaser contributes to the
satisfaction of any payment obligation, threshold or other condition, then
Purchaser and Republic shall share in the benefit of any recovery therefrom pro
rata based upon their respective contributions to the satisfaction of any such
condition. To the extent that any liability for which Purchaser is indemnified
by Sellers under Section 11.2 would be covered under any of the Indemnification
Agreements, such claim may be asserted by Purchaser against Sellers, but any
such claim for indemnification shall not be due and payable to Purchaser until
such claim has been asserted by Sellers under such Indemnification Agreement and
no recovery is obtained thereunder.
Section 8.12 Litigation. Sellers will promptly supply to Purchaser
copies of all litigation or legal proceedings pertaining to the Purchased Assets
which may arise subsequent to the execution of this Agreement but prior to the
Closing Date, and will also advise Purchaser promptly in writing of any written
threat of litigation or other legal proceeding (including actions or motions in
the Bankruptcy Court) which is made between the date of this Agreement and the
Closing Date pertaining to the Purchased Assets or the Seller' ability to
perform its obligations under this Agreement.
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Section 8.13 Public Announcements. Prior to the Closing Date, the
parties shall consult with each other before issuing any press release or
otherwise making any public statement or holding any discussion with the Bank
Lenders, Creditors Committee, and any ad hoc meeting of trade creditors with
respect to this Agreement and the transactions contemplated hereby, and shall
not issue any such press release or make any such public statement without the
prior approval thereof by the other party, which approval shall not be
unreasonably withheld. Nothing in this Section 8.13 shall prevent disclosure by
Sellers or Purchaser, or any of their Affiliates, with respect to this Agreement
and the transactions contemplated hereby as Sellers or Purchaser, or such
Affiliate, may be required to make by applicable Law or as may be required to
the Bank Lenders, provided, however, that the party required to make such
disclosure shall give prior notice to the other party of the nature of the
requirement, the identity of the Person or Persons to whom disclosure is
required to be made and the information to be disclosed.
Section 8.14 Filings and Authorizations. Each of Sellers and Purchaser,
as promptly as practicable, shall (i) make, or cause to be made, all such
filings or submissions under Laws applicable to it as may be required for it to
consummate the transaction contemplated herein; (ii) use its and their
commercially reasonable efforts to obtain, or cause to be obtained, all
authorizations, approvals, consents and waivers from all Persons and
Governmental Authorities necessary to be obtained by it in order for it so to
consummate such transactions; and (iii) use its and their commercially
reasonable efforts to take, or cause to be taken, all other actions necessary,
proper or advisable in order for it to fulfill its obligations hereunder.
Section 8.15 Amendment to List of Purchased Contracts. Notwithstanding
anything herein to the contrary, at any time prior to the Closing Purchaser
shall be entitled in its sole discretion to remove any executory Contracts or
unexpired leases from the list of Purchased Contracts by providing written
notice thereof to Republic and any Contracts so removed shall not constitute
Purchased Assets at Closing. At any time before or after the Closing Purchaser
shall be entitled in its sole discretion to request the Sellers to add to the
list of Purchased Contracts any executory Contracts or unexpired leases of
Sellers by providing written notice thereof to Republic, and any Contracts so
added shall constitute Purchased Assets; provided that Purchaser shall not be
entitled to add to the list of Purchased Contracts any executory Contracts or
unexpired leases of Sellers that any Seller has rejected by order of the
Bankruptcy Court. Sellers shall give written notice to Purchaser prior to the
submission of any motion in the Chapter 11 Cases to reject any executory
Contracts or unexpired leases. Sellers shall use commercially reasonable efforts
to have such Contracts and leases assigned to the Purchaser as soon as
practicable after receipt of such notice (but no earlier than the Closing).
Section 8.16 Use of Cartersville Proceeds. To the extent that the
Cartersville Asset Sale has been consummated prior to the Closing, Sellers shall
promptly pay to the Bank Lenders the net proceeds therefrom, after repayment of
the industrial revenue bonds that are secured by the assets of the Cartersville
facility, for the exclusive purpose of repaying any outstanding principal and
accrued and unpaid interest on the Debtor-in-Possession Revolving Credit
Agreement.
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Section 8.17 Insurance. Following the Closing Date, Sellers shall
maintain insurance policies that provide the same level of coverage as the
Insurance Policies and that cover claims made and events occurring prior to the
Closing Date; provided, however that such insurance policies may only cover the
Excluded Assets and liabilities not assumed by Purchaser hereunder.
Section 8.18 Bulk Sale. Each of the parties to this Agreement hereby
waives compliance with the bulk sales or bulk transfer laws that are applicable
to the sale of the Purchased Assets with respect to the Excluded Liabilities.
Section 8.19 Creation of Easement. With respect to the property known
as 0000 Xxxx 00xx Xxxxxx in Lorain, Ohio (the "Lorain Property"), Purchaser and
Sellers shall, prior to Closing, negotiate and record an easement agreement
reasonably acceptable in all respects to Purchaser and Sellers over the portion
of the Lorain Property being transferred to Purchaser in order to provide
ingress and egress to a public road from the portion of the Lorain Property
being retained by Sellers.
ARTICLE IX
CONDITIONS TO THE CLOSING
-------------------------
Section 9.1 Conditions to Obligations of Purchaser. The obligations of
Purchaser to effect the Closing shall be subject to the prior and/or
simultaneous satisfaction or written waiver by Purchaser of each of the
following conditions:
(a) Bidding Procedures Order. The Bidding Procedures Order (i)
shall not have been stayed, modified, amended, dissolved, revoked or rescinded
without Purchaser's consent and (ii) shall be in full force and effect on the
Closing Date.
(b) Sale Order. The Sale Order (i) shall have been entered on
or before July 15, 2002, which date may be waived or extended by Purchaser in
its sole discretion, (ii) shall not have been stayed, modified, amended,
dissolved, revoked or rescinded without Purchaser's consent and (iii) shall be
in full force and effect on the Closing Date. The Sale Order shall be in form
and substance reasonably acceptable to Purchaser.
(c) Representations and Warranties. (i) The representations
and warranties of Sellers set forth in this Agreement qualified by materiality
shall be true and correct in all respects as of the date of this Agreement and
as of the Closing Date as though made on and as of the Closing Date (except that
to the extent such representations and warranties expressly speak as of an
earlier date, such representations and warranties shall be true and correct in
all respects as of such specified date); (ii) the representations and warranties
of Sellers set forth in this Agreement that contain no qualification with
respect to materiality shall be true and correct in all material respects as of
the date of this Agreement and as of the Closing Date as though made on and as
of the Closing Date (except to the extent such representations and warranties
expressly speak as of an earlier date, such representations and warranties shall
be true and correct in all material respects as of such specified date); and
(iii) Purchaser shall have received a certificate dated the Closing Date signed
by the Chief Executive Officer of each Seller to such effect.
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(d) Covenants. Sellers shall have performed in all material
respects all of the obligations, covenants and agreements required to be
performed by them under this Agreement at or prior to the Closing Date and
Purchaser shall have received a certificate, dated the Closing Date and signed
by the Chief Executive Officer of each Seller to that effect.
(e) Consents, Approvals and Permits. Sellers and Purchaser
shall have received all consents or approvals and made all applications,
requests, notices and filings with any Person or Governmental Authority required
to be obtained or made in connection with the consummation of the transactions
contemplated by this Agreement, including, but not limited to, any required
consents to the assignment of Purchased Contracts, which required consents and
approvals are set forth on Schedule 9.1(e). Purchaser shall have either (i)
obtained (whether by transfer, assignment or otherwise) all Permits necessary
for the continued post-Closing operation of the Purchased Assets in compliance
with all applicable Laws and Environmental Laws, or (ii) be in the process of
obtaining such Permits with adequate assurances from Governmental Authorities
that such lawful post-Closing operation of the Purchased Assets may continue
pending receipt of such Permits.
(f) No Order. No Governmental Authority shall have enacted,
issued, promulgated, enforced or entered any statute, rule, regulation,
injunction or other Governmental Order (whether temporary, preliminary or
permanent) which is in effect and has the effect of making the transactions
contemplated by this Agreement illegal or otherwise restraining or prohibiting
consummation of such transactions; or which would otherwise materially adversely
affect or interfere with the operation of the Business following Closing.
(g) New Credit Facility. Purchaser shall have entered into the
New Credit Facility on terms, conditions and a duration satisfactory to
Purchaser.
(h) Qualification of Senior Note Indenture. The Senior Secured
Note Indenture shall have been qualified under the Trust Indenture Act of 1939,
as amended.
(i) No Material Adverse Effect. There shall not have occurred
any event, change, occurrence, development or state of facts or circumstances
which has had or would reasonably be expected to have a Material Adverse Effect,
but excluding effects resulting from or arising in connection with this
Agreement, the transactions contemplated hereby or the announcement hereof.
(j) Closing Deliveries. Sellers shall have delivered or caused
to be delivered to Purchaser each of the items listed in Section 10.2 hereof.
(k) HSR Waiting Period. The applicable waiting period under
the HSR Act shall have expired or terminated.
(l) Canadian Steel Asset Purchase Agreement. All conditions to
the consummation of the transactions contemplated by the Canadian Steel Asset
Purchase Agreement shall have been satisfied or waived.
(m) Successor Labor Agreement. All conditions to the
effectiveness of the Successor Labor Agreement shall have been satisfied or
waived.
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(n) Xxxxxxxx Employment Contract. Xx. Xxxxxx Xxxxxxxx'x
current employment agreement with Republic shall have been assumed by Republic
and assigned to Purchaser pursuant to this Agreement.
(o) Title Policy and Surveys. (i) The Title Company shall have
issued the Title Policies, without any exceptions thereto, except for the
Assumed Liabilities and the Permitted Real Estate Liens; and (ii) Purchaser
shall have received the Surveys, containing the original signature and seal of
the surveyor and any additional matter required by the Title Company showing no
Encumbrances other than the Assumed Liabilities and the Permitted Real Estate
Liens.
(p) No Termination. This Agreement shall not have been
terminated pursuant to Section 12.1.
Section 9.2 Conditions to Obligations of Seller. The obligations of
Sellers to effect the Closing shall be subject to the prior and/or simultaneous
satisfaction or written waiver by Seller of each of the following conditions:
(a) Bidding Procedures Order. The Bidding Procedures Order (i)
shall not have been stayed, modified, amended, dissolved, revoked or rescinded
without Purchaser's consent and (iii) shall be in full force and effect on the
Closing Date.
(b) Sale Order. The Sale Order (i) shall have been entered on
or before July 15, 2002, which date may be waived or extended by Purchaser in
its sole discretion, (ii) shall not have been stayed, modified, amended,
dissolved, revoked or rescinded without Purchaser's consent and (ii) shall be in
full force and effect on the Closing Date. The Sale Order shall be in form and
substance reasonably acceptable to Purchaser.
(c) Representations and Warranties. (i) The representations
and warranties of Purchaser set forth in this Agreement qualified by materiality
shall be true and correct in all respects as of the date of this Agreement and
as of the Closing Date as though made on and as of the Closing date (except that
to the extent such representations and warranties expressly speak as of an
earlier date, such representations and warranties shall be true and correct in
all respects as of such specified date); (ii) the representations and warranties
of Purchaser set forth in this Agreement that contain no qualification with
respect to materiality shall be true and correct in all material respects as of
the date of this Agreement and as of the Closing Date as though made on and as
of the Closing Date (except to the extent such representations and warranties
expressly speak as of an earlier date, such representations and warranties shall
be true and correct in all material respects as of such specified date); and
(iii) Republic shall have received a certificate dated the Closing Date and
signed on behalf of Purchaser by the chief executive officer of Purchaser to
such effect.
(d) Covenants. Purchaser shall have performed in all material
respects all obligations, covenants and agreements required to be performed by
it under this Agreement at or prior to the Closing Date and Republic shall have
received a certificate, dated the Closing Date and signed by the chief executive
officer of Purchaser, to that effect.
53
(e) Consents and Approvals. Sellers and Purchaser shall have
received all consents or approvals and made all applications, requests, notices
and filings with any Person or Governmental Authority required to be obtained or
made in connection with the consummation of the transactions contemplated by
this Agreement which required consents and approvals are set forth in the
attached Schedule 9.2(e).
(f) No Order. No Governmental Authority shall have enacted,
issued, promulgated, enforced or entered any statute, rule, regulation,
injunction or other Governmental Order (whether temporary, preliminary or
permanent) which is in effect and has the effect of making the transactions
contemplated by this agreement illegal or otherwise restraining or prohibiting
consummation of such transactions.
(g) Closing Deliveries. Purchaser shall have delivered or
caused to be delivered to Seller each of the items listed in Section 10.3
hereof.
(h) HSR Waiting Period. The applicable waiting period under
the HSR Act shall have expired or terminated.
(i) Successor Labor Agreement. All conditions to the
effectiveness of the Successor Labor Agreement shall have been satisfied or
waived.
(j) Canadian Steel Asset Purchase Agreement. All conditions to
the consummation of the transactions contemplated by the Canadian Steel Asset
Purchase Agreement shall have been satisfied or waived.
(k) No Termination. This Agreement shall not have been
terminated pursuant to Section 12.1.
ARTICLE X
CLOSING
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Section 10.1 Closing. The closing (the "Closing") of the transactions
contemplated in this Agreement shall take place as soon as practicable after the
satisfaction or waiver of each of the conditions set forth in Article IX (the
"Closing Date") at the offices of Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
located at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other time and
place as the parties may agree.
Section 10.2 Documents to be Delivered at Closing by Sellers. At the
Closing, Sellers shall properly execute (if necessary) and deliver (or cause to
be delivered) to Purchaser:
(a) The Purchaser Operating Agreement, duly executed by
Republic.
(b) The Transition Services Agreement, duly executed by
Republic or its designees.
54
(c) The Indemnity Escrow Agreement, duly executed by Republic
and the escrow agent thereunder.
(d) The Xxxx of Sale, duly executed by Sellers.
(e) The Assumption Agreement, duly executed by Sellers.
(f) Such other deeds, bills of sale, assignments, releases,
consents to assignments and other instruments of sale, conveyance, assignment,
assumption and transfer as Purchaser or its counsel may reasonably request,
satisfactory in form and in substance to Purchaser and its counsel, in order to
convey to Purchaser all of Sellers' rights, title and interests in and to the
Purchased Assets and to assign to Purchaser all of the Assumed Liabilities in
the manner provided for in this Agreement.
(g) Limited warranty deeds for each parcel of the owned Real
Property substantially in the form of Exhibit F attached hereto.
(h) Lease Assignment and Assumption Agreements with respect to
each parcel of leased Real Property substantially in the form of Exhibit G
attached hereto (the "Lease Assignment and Assumption Agreement"), duly executed
by Sellers.
(i) Any other duly executed document or instrument effecting
transfer of the Real Property which is required by the Title Company in order to
insure the Purchaser's title to the Real Property under the Title Insurance
Policies; and all consents of third parties required under any Reference Lease
or Third Party Lease, in form and substance as agreed to by the parties.
(j) Certified copies of the Sale Order and the Bidding
Procedures Order and a copy of the docket sheet for the Chapter 11 Cases showing
their entry and that no order has been entered that modifies, amends, stays,
dissolves, revokes or rescinds either of such orders and that no motion seeking
any such relief has been filed.
(k) A certificate of the Secretary of each Seller in the form
attached hereto as Exhibit H.
(l) A certificate of an officer of each Seller referred to in
Section 9.1(d) in the form attached hereto as Exhibit I.
(m) A certificate of Republic certifying that each of the
Sellers is not a foreign person for the purposes of section 1445 of the Code,
which certificate shall comply with the requirements of Treasury Regulation
1.1445-2 and shall be in the form of Exhibit J.
(n) A cross-receipt for the Cash Consideration paid by
Purchaser to Sellers at the Closing.
(o) Such other documents and instruments as are contemplated
in this Agreement or as Purchaser or Purchaser's counsel may reasonably request
55
in order to evidence or consummate the transactions contemplated by this
Agreement or to effectuate the purpose or intent of this Agreement.
Section 10.3 Documents to be Delivered at Closing by Purchaser. At the
Closing, Purchaser shall properly execute (if necessary) and deliver (or caused
to be delivered) to Sellers:
(a) The Cash Consideration, a portion of which Purchaser may
satisfy with the proceeds of the Good Faith Deposit, if any.
(b) The Transition Services Agreement, duly executed by
Purchaser.
(c) The Senior Secured Note, dated as of the Closing Date and
authenticated by the trustee under the Senior Secured Note Indenture.
(d) A stock certificate representing the Purchaser Interests
which, as of the Closing Date, shall be duly authorized, validly issued, fully
paid and nonassessable.
(e) The Purchaser Operating Agreement, duly executed by
Purchaser and the Purchaser Member.
(f) The Assumption Agreement, duly executed by Purchaser or
any designee of Purchaser.
(g) The Lease Assignment and Assumption Agreement, duly
executed.
(h) The Indemnity Escrow Agreement, duly executed by Purchaser
and the escrow agent thereunder.
(i) A certificate of an officer of Purchaser referred to in
Section 9.2(b) and Section 9.2(c) in the form attached hereto as Exhibit K.
(j) A certificate of the Secretary of Purchaser in the form
attached hereto as Exhibit L.
(k) Such other documents and instruments as are contemplated
in this Agreement or as Sellers or Sellers' counsel may reasonably request in
order to evidence or consummate the transactions contemplated in this Agreement
or to effectuate the purpose or intent of this Agreement.
ARTICLE XI
INDEMNIFICATION
---------------
Section 11.1 Survival; Representations and Warranties. All
representations and warranties made in this Agreement shall survive for a period
of one (1) year after the Closing Date and shall not be extinguished by the
Closing or any investigation made by or on behalf of any party hereto.
56
Section 11.2 Indemnification of Purchaser. From and after the Closing
Date, Sellers hereby agree to jointly and severally indemnify, defend and hold
harmless Purchaser and its Affiliates from and against any and all liabilities,
damages and losses, including reasonable attorney's fees and expenses, suffered
or incurred ("Losses") by Purchaser or any of its Affiliates resulting or
arising from claims asserted within the period specified in Section 11.1 insofar
as such Losses arise out of or are based upon (a) the inaccuracy or breach of
any representation or warranty of any Seller contained in this Agreement or an
Attendant Document; (b) any breach of any covenant or agreement of any Seller
contained in this Agreement or an Attendant Document; or (c) any Excluded
Liabilities; provided, however, that within sixty (60) days after learning of
the assertion of any third party claim against which Purchaser claims
indemnification under this Article XI, Purchaser shall notify Sellers and afford
them the opportunity to join in the defense or settlement thereof at Sellers'
own expense with counsel of their choosing, and Purchaser shall cooperate to
make available to Sellers all pertinent information under its control or in its
possession. Failure to so notify shall not effect the obligation to indemnify
unless material prejudice results therefrom. Purchaser shall have the right to
afford Sellers the opportunity to assume the defense or settlement of such third
party claims at their own expense with counsel of their choosing; provided that
Sellers shall not settle any such claim without the prior written consent of the
indemnified party, which consent shall not be unreasonably withheld, conditioned
or delayed.
Section 11.3 Indemnification of Sellers. From and after the Closing
Date, Purchaser hereby agrees to indemnify, defend and hold harmless Sellers and
their Affiliates from and against any and all Losses resulting or arising from
claims asserted within the period specified in Section 11.1 insofar as such
Losses arise out of or are based upon (a) the inaccuracy or breach of any
representation or warranty of Purchaser contained in this Agreement or an
Attendant Document to which Purchaser is a Party; (b) any breach of any covenant
or agreement of Purchaser contained in this Agreement or an Attendant Document
to which Purchaser is a party; or (c) any Assumed Liabilities; provided,
however, that within sixty (60) days after learning of the assertion of any
third party claim against which any Seller claims indemnification under this
Article XI, Sellers shall notify Purchaser and afford it the opportunity to join
in the defense or settlement thereof at Purchaser's own expense with counsel of
its choosing, and Sellers shall cooperate to make available to Purchaser all
pertinent information under their control or in their possession. Failure to so
notify shall not effect the obligation to indemnify unless material prejudice
results therefrom. Republic shall have the right to afford Purchaser the
opportunity to assume the defense or settlement of such third party claims at
its own expense with counsel of its choosing; provided that Purchaser shall not
settle any such claim without the prior written consent of Republic, which
consent shall not be unreasonably withheld, conditioned or delayed.
Section 11.4 Limitation on Seller' Indemnification Liability. The
Sellers' aggregate liability for money damages under this Agreement and all
Attendant Documents related to the inaccuracy or breaches of representations or
warranties and breaches of covenants or agreements shall not exceed an amount
equal to Fifteen Million U.S. Dollars ($15,000,000.00), which shall be satisfied
as set forth in Section 11.6. The Sellers shall have no liability for money
damages related to the inaccuracy of the representations or warranties or the
breaches of covenants or agreements contained herein until the aggregate damages
claimed under Section 11.2 exceeds Two Hundred Fifty Thousand U.S. Dollars
($250,000.00).
57
Section 11.5 Limitation on Purchaser's Indemnification Liability. The
Purchaser's aggregate liability for money damages under this Agreement and all
Attendant Documents related to the inaccuracy or breaches of representations or
warranties and breaches of covenants or agreements shall not exceed an amount
equal to Five Million U.S. Dollars ($5,000,000.00). Purchaser shall have no
liability for money damages related to the inaccuracy of the representations or
warranties or the breaches of covenants or agreements contained herein until the
aggregate damages claimed under Section 11.3 exceeds Two Hundred Fifty Thousand
U.S. Dollars ($250,000.00). Sellers shall not have any additional recourse
against Purchaser for such indemnity claims, except in instances of fraud by
Purchaser.
Section 11.6 Satisfaction of Purchaser Claims. The amount of
indemnifiable damages or losses arising from any claim under this Article 11
made by Purchaser or its Affiliates shall be paid by issuing additional
Purchaser Interests ("Indemnity Interests") to the Purchaser Member, in
accordance with the formula set forth on Exhibit M attached hereto. The parties
acknowledge and agree that the value of Purchaser Interests used for the purpose
of calculating the number of Indemnity Interests, if any, to be issued to
satisfy indemnity claims under this Agreement shall not be binding on the
parties or determinative of such value for any other purpose. Notwithstanding
the foregoing, at Closing, Seller shall establish an escrow account (the
"Indemnity Escrow") pursuant to an escrow agreement in form and substance
reasonably acceptable to Purchaser (the "Indemnity Escrow Agreement") and shall
promptly thereafter fund such escrow account with up to Five Million U.S.
Dollars ($5,000,000.00) of available cash and for the first six months after the
Closing Date, Purchaser also may satisfy indemnifiable Losses from the Indemnity
Escrow. The Cash Consideration shall not be a source from which indemnifiable
claims may be satisfied. In no event shall Purchaser be entitled to payment for
indemnity claims under this Article XI for the inaccuracy of representations or
warranties or breaches of covenants or agreements contained in this Agreement in
excess of Fifteen Million U.S. Dollars ($15,000,000.00), up to Five Million U.S.
Dollars ($5,000,000.00) of which may be satisfied from the Indemnity Escrow as
set forth above and the remainder of which shall be satisfied with the issuance
of Indemnity Interests as calculated in accordance with Exhibit M attached
hereto. Any claim for indemnification of Purchaser pursuant to this Article XI
shall be paid solely out of the Indemnity Escrow and the Indemnity Interests,
and Purchaser shall not have any additional recourse against Sellers for such
indemnity claims, except in instances of fraud by Sellers.
ARTICLE XII
TERMINATION, AMENDMENT AND WAIVER
---------------------------------
Section 12.1 Termination. Notwithstanding anything herein to the
contrary, this Agreement may be terminated and the transactions contemplated
hereby abandoned at any time prior to the Closing:
(a) by mutual written consent of Purchaser and Republic; or
(b) by Purchaser, if any or all of Sellers agree to transfer a
material portion of the Purchased Assets to a third party; or
58
(c) by Purchaser or Republic, if the Bankruptcy Court or any
other court of competent jurisdiction in the United States or other Governmental
Authority shall have issued an order, decree, ruling or taken any other action
restraining, enjoining or otherwise prohibiting the purchase of the Purchased
Assets on the terms and conditions contained herein and such order, decree,
ruling or other action shall have become a Final Order; or
(d) by Purchaser if there is a material breach by any Seller
of any representation, warranty or covenant of the Sellers under this Agreement
and Sellers are unable or shall fail or refuse to cure such breach within ten
(10) days after written notice from Purchaser specifying such breach; or
(e) by Republic if there is a material breach by Purchaser of
any representation, warranty or covenant of Purchaser under this Agreement and
Purchaser is unable or shall fail or refuse to cure such breach within ten (10)
days after written notice from Republic specifying such breach; or
(f) by Purchaser on or prior to June 14, 2002 if Purchaser
determines in its sole discretion that the results of Purchaser's due diligence
with respect to any matters, other than environmental matters, related to the
prospects, business, assets, contracts, rights, liabilities and obligations of
Sellers (and of Purchaser after giving effect to the Closing), including,
without limitation, engineering, financial, marketing, employee, labor, ERISA,
employee benefits, legal and regulatory matters, are not satisfactory; provided
that Purchaser shall be deemed to have waived its right of termination under
this Section 12.1(f) for all purposes if it does not terminate this Agreement by
such date; or
(g) by Purchaser on or prior to June 28, 2002 if Purchaser
determines in its sole discretion that the results of Purchaser's due diligence
with respect to environmental matters related to the Purchased Assets and the
prospects, business, assets, contracts, rights, liabilities and obligations of
Sellers (and of Purchaser after giving effect to the Closing) are not
satisfactory; provided that Purchaser shall be deemed to have waived its right
of termination under this Section 12.1(g) for all purposes if it does not
terminate this Agreement by such date; or
(h) by Purchaser, if (i) the Bidding Procedures Order shall
not have become a Final Order on or prior to the date that is 10 days after its
entry or (ii) the Sale Order shall not have been entered by the Bankruptcy Court
on or prior to July 15, 2002 or (iii) the Sale Order shall not have become a
Final Order on or prior to the date that is ten (10) days after the entry of the
Sale Order unless Purchaser has waived the requirement for a Final Order; or
(i) by Purchaser on or before 5:00 p.m., July 2, 2002 if
Purchaser shall not have obtained from appropriate environmental Governmental
Authorities written assurances, satisfactory to Purchaser in the exercise of
Purchaser's reasonable discretion, that such Governmental Authorities shall not
seek to impose on Purchaser any Excluded Liabilities or obligations as described
hereinabove in Section 3.1(b)(ix) and Section 3.1(b)(xii); or
59
(j) by Purchaser or Republic, if the Closing shall not have
occurred on or prior to July 31, 2002; provided, however, that the right to
terminate this Agreement under this Section 12.1(i) shall not be available to
any party whose failure to fulfill any obligation under this Agreement shall
have been the cause of, or shall have resulted in, the failure of the Closing or
the failure to enter the Sale Order or the failure of such Sale Order to become
a Final Order on or prior to such date; or
(k) by Purchaser, upon the conversion of the Chapter 11 Cases
to cases under chapter 7 of the Bankruptcy Code, appointment of a Chapter 11
trustee or an examiner with expanded powers, or entry of an order pursuant to
Section 362 of the Bankruptcy Code lifting the automatic stay with respect to
any material portion of the Purchased Assets; provided, however that Purchaser
shall not be entitled to exercise its right to terminate this Agreement pursuant
to this Section 12.1(k) until Purchaser has given Republic five days' prior
written notice, and Republic shall be permitted to cure any such event during
such five-day period.
Section 12.2 Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 12.1, this Agreement shall forthwith become
void and have no effect and there shall be no liability on the part of any party
hereto or its Affiliates, directors, officers, shareholders, or agents except
under Section 8.2, with respect to the Good Faith Deposit, if any, and Section
12.3.
Section 12.3 Break-Up Fee; Expense Reimbursement. From and after the
entry of the Bidding Procedures Order, if this Agreement is terminated for any
reason other than pursuant to Section 12.1(e), Sellers shall reimburse Purchaser
(and the direct and indirect owners of the equity of Purchaser) for documented
reasonable out-of-pocket costs and expenses (including legal, accounting,
engineering and other consultant fees and expenses) incurred in connection with
this Agreement and the transactions contemplated hereby (the "Expense
Reimbursement Amount") in an amount up to (i) One Million U.S. Dollars
($1,000,000.00) or (ii) Two Million U.S. Dollars ($2,000,000.00) in the event
this Agreement is terminated pursuant to Section 12.1(b) or as a result of
Seller accepting a Competing Bid. From and after (i) the date on which Purchaser
has waived its rights to terminate this Agreement pursuant to Section 12.1(f)
and (g) or both such rights have lapsed due to the passage of time, and (ii) the
receipt by Purchaser of a firm commitment from the Bank Lenders with respect to
the New Credit Facility, if this Agreement is terminated for any reason other
than pursuant to Section 12.1(e), Sellers shall pay Purchaser (x) the Expense
Reimbursement Amount in an amount up to Two Million U.S. Dollars ($2,000,000.00)
plus (y) Three Million U.S. Dollars ($3,000,000.00) (the "Break-Up Fee") in the
event this Agreement is terminated pursuant to Section 12.1(b) or as a result of
Seller accepting a Competing Bid. The payment of the Expense Reimbursement
Amount and the Break-Up Fee shall be made by wire transfer of immediately
available funds promptly following the termination of this Agreement and, in the
event this Agreement is terminated pursuant to Section 12.1(d) or as a result of
Seller accepting a Competing Bid, no later than the date that any definitive
agreement is executed with respect thereto and shall be paid first from any
deposits by a third party purchasers of a material portion of the Purchased
Assets. The claim of Purchaser against Sellers with respect to the Break-Up Fee
and the Expense Reimbursement Amount pursuant to this Section 12.3 shall
constitute an administrative expense claim in the Chapter 11 Cases that will
rank pari passu with all other administrative expense claims, including claims
under Section 507(b) of the Bankruptcy Code.
60
ARTICLE XIII
MISCELLANEOUS
-------------
Section 13.1 Expenses. Except as otherwise set forth in this Agreement
(including without limitation Section 12.3), Sellers and Purchaser shall each
bear the expenses incurred by them in connection with the preparation and
negotiation of this Agreement and the Attendant Documents and the consummation
of the transactions contemplated in this Agreement, including, without
limitation, that Sellers shall pay all fees and expenses of McDonald Investments
Inc.
Section 13.2 Governing Law; Forum. This Agreement shall be governed by,
and construed in accordance with, the Laws of the State of New York and, to the
extent applicable, the Bankruptcy Code. If the Bankruptcy Court does not have
subject matter jurisdiction over any action or proceeding arising out of or
relating to this Agreement, then each party (a) agrees that all such actions or
proceedings shall be heard and determined in federal court of the United States
for the Southern District of New York, (b) irrevocably submits to the
jurisdiction of such court in any such action or proceeding, (c) consents that
any such action or proceeding may be brought in such court and waives any
objection that such party may now or hereafter have to the venue jurisdiction or
that such action or proceeding was brought in an inconvenient court, and (d)
agrees that service of process in any such action or proceeding may be effected
by mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to such party at its address as provided
in Section 13.3 (provided that nothing herein shall affect the right to effect
service of process in any other manner permitted by New York law).
Section 13.3 Notices. Any and all notices, requests, demands and other
communications permitted under or required pursuant to this Agreement shall be
in writing and shall be deemed given if personally delivered or if mailed,
postage prepaid, certified or registered mail, return receipt requested, to the
parties at the addresses set forth below, or at such other addresses as they may
indicate by written notice given as provided in this Section 13.4:
If to Purchaser: With required copies to (which shall not constitute
--------------- ---------------------------------------------------
notice):
-------
RT Acquisition LLC KPS Special Situations Fund, L.P.
000 Xxxx Xxxxxx, 00xx Xxxxx 000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx Attention: Xxxxxxx Xxxxxx
--and--
Xxxx Investment Group, X.X.
Xxxxxxxx Place
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxxx Xxxxx
61
--and--
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxx
--and--
Xxxxxx & Xxxxxx, L.L.P.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxxx
If to Seller: With required copies to (which shall not constitute
------------ ---------------------------------------------------
notice):
-------
Republic Technologies International, LLC McDonald, Hopkins, Xxxxx & Xxxxx Co., L.P.A.
0000 Xxxxxxx Xxxxxxx 0000 Xxxx Xxx Xxxxxx
Xxxxx, Xxxx 00000 000 Xxxxxxxx Xxxxxx, X.
Attention: Xxxxxx Xxxxxxxx Xxxxxxxxx, Xxxx 00000-0000
Attention: Xxxxx Xxxxx
--and--
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Simeon Gold
Section 13.4 Headings. The headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
Section 13.5 No Assignment; Benefit to Third Parties.
(a) No party may assign its rights and obligations under this
Agreement without the prior written consent of the other parties, except that
Purchaser may assign all or any of its rights and obligations hereunder to any
wholly owned Subsidiary of Purchaser upon the execution of a written instrument
whereby any such assignee agrees to assume all of the assignor's obligations
hereunder and be bound by all the terms and conditions of this Agreement, and,
after the Closing, Sellers may assign all of their rights and obligations
hereunder pursuant to an order of the Bankruptcy Court to a single entity whose
primary purpose is the liquidation of Sellers' assets; provided that the Sellers
may assign the Senior Secured Notes to a separate entity for such primary
purpose pursuant to an order of the Bankruptcy Court so long as such assignment
is subject to all rights of Purchaser with respect to such Senior Secured Notes
under this Agreement; provided, further, that Purchaser may assign any of its
62
rights hereunder to one or more of its financing sources as security for
financing for collateral purposes; provided, however, that no such assignment
shall relieve the assigning party of its obligations hereunder. This Agreement
shall be binding on and inure to the benefit of the parties and their respective
successors and assigns.
(b) The terms and provisions of this Agreement (including
provisions regarding employee and employee benefit matters) are intended solely
for the benefit of the parties hereto and their respective successors and
permitted assigns and are not intended to, and shall not, confer third-party
beneficiary rights upon any other Person.
Section 13.6 Entire Agreement. This Agreement, including the Exhibits
and the Schedules attached or to be attached to it, together with the Attendant
Documents is and shall be deemed to be the complete and final expression of the
agreement between the parties as to the matters contained in and related to this
Agreement and supersedes any previous agreements between the parties pertaining
to such matters.
Section 13.7 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which, taken
together, shall be considered one and the same agreement.
Section 13.8 Waiver. At any time prior to the Closing Date, any party
hereto may (a) extend the time for the performance of any of the obligations or
other acts of the other parties hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any of the agreements or
conditions contained herein. Any such extension or waiver shall only be valid if
set forth in an instrument in writing signed by the party or parties to be bound
thereby. The failure of any party to assert any of its rights hereunder shall
not constitute a waiver of any such rights. The waiver by any party of any
breach of any provision of this Agreement shall not operate or be construed as a
waiver of any subsequent or similar breach.
Section 13.9 Amendment. This Agreement may only be amended by written
agreement executed by each of the parties hereto.
Section 13.10 Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision will
not affect the validity or enforceability of the other provisions hereof, and
this Agreement shall be interpreted so as to most fully give effect to its terms
and still be valid and enforceable; provided, however, that any provision
altered pursuant to this Section 13.10 shall not result in a material adverse
impairment of the rights or obligations of any party hereto.
Section 13.11 Further Assurances. From time to time after the Closing
Date, at Purchaser's request and without further consideration, Sellers shall
execute and deliver or cause to be executed and delivered such further
instruments of conveyance, assignment and transfer and shall take such other
action as Purchaser may reasonably request in order more effectively to convey,
transfer, reduce to possession or record title to any of the Purchased Assets
purchased pursuant to this Agreement. On Purchaser's request, Sellers shall
cooperate and use their commercially reasonable efforts to have their officers,
directors, employees and agents cooperate with Purchaser on or after the Closing
63
Date by furnishing information, evidence, testimony and other assistance in
connection with any actions, proceedings, arrangements or disputes involving
Purchaser and which are based on contracts, leases, arrangements or acts of
Sellers which were in effect or occurred on or prior to the Closing Date.
[Rest of Page Intentionally Left Blank]
64
IN WITNESS WHEREOF, the parties hereto have caused this Asset
Purchase Agreement to be executed by its duly authorized officers as of the day
and year first written above.
RT ACQUISITION LLC
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President
REPUBLIC TECHNOLOGIES INTERNATIONAL, LLC
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
NIMISHILLEN & TUSCARAWAS, LLC
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
BLISS & XXXXXXXX, LLC
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
REPUBLIC TECHNOLOGIES INTERNATIONAL HOLDINGS, LLC
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
RTI CAPITAL CORP.
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
