EXHIBIT 2.2
AMENDMENT TO ASSET PURCHASE AGREEMENT
AMENDMENT, dated as of April 11, 2002, to Asset Purchase Agreement, dated
as of February 26, 2002 (the "Asset Purchase Agreement"), by and among LTV Steel
Company, Inc., River Terminal Railway Company, Chicago Short Line Railway
Company, The Cuyahoga Valley Railway Company, The LTV Corporation, LTV
Electro-Galvanizing, Inc. and International Steel Group Inc. (formerly WLR
Acquisition Corp.).
RECITALS
WHEREAS, Buyer and the LTV Companies entered into the Asset Purchase
Agreement; and
WHEREAS, Buyer and the LTV Companies desire to amend the Asset Purchase
Agreement as set forth herein.
NOW, THEREFORE, in consideration of the foregoing and their respective
agreements herein contained, and other good and valuable consideration the
receipt and sufficiency of which are acknowledged, the LTV Companies and Buyer
hereby agree as follows:
ARTICLE I
1.1 DEFINITIONS. Capitalized terms used herein without definition have
the meanings ascribed thereto in the Asset Purchase Agreement.
ARTICLE II
2.1 SECOND CLOSING DATE. Notwithstanding anything in the Asset Purchase
Agreement to the contrary, subject to the satisfaction of the conditions set
forth in SECTION 2.10 hereof, the closing (the "Second Closing") for the sale of
the Additional Assets to Buyer shall occur on a date not later than May 13, 2002
as notified by Buyer to LTV at least one Business Day in advance of the Second
Closing. Upon the consummation of the Second Closing, the Additional Assets
shall constitute Acquired Assets.
2.2 CLOSING DATE INVENTORY. Sellers acknowledge that Hilco Appraisal
Services, LLC ("Hilco") is conducting a verification of LTV's inventory (the
"Physical Inventory") of slabs, raw materials, iron ore chips and Excess
Supplies located at the Real Property and coal located at the Chicago Coke
Battery. Buyer will notify LTV of the results of Hilco's verification (the
"Verification Statement"). After the Closing Date and prior to the Second
Closing, Sellers will reflect any adjustments that Buyer and Sellers determine
to make to the Closing Date Inventory delivered pursuant to SECTION 3.2(b) of
the Asset Purchase Agreement. Any adjustment to the Closing Date Inventory as a
result of the Verification Statement or as otherwise agreed shall be final and
binding for all purposes under the Asset Purchase Agreement. Seller shall not be
obligated to make any adjustment reflected in the Verification Statement, and
Buyer shall not waive any rights it may have pursuant to the Asset Purchase
Agreement with respect to
adjustments included in the Verification Statement that are not reflected in the
Closing Date Inventory (or adjusted).
2.3 INVENTORY PURCHASE PRICE. In accordance with the Asset Purchase
Agreement, the Inventory Purchase Price shall be determined based on the prices
determined pursuant to SECTION 1.6(b) to the Asset Purchase Agreement with
respect to the Negotiated Inventory (including the coal located at the Chicago
Coke Battery) identified in the Closing Date Inventory (as adjusted, if
adjusted, pursuant to SECTION 2.2) plus (without duplication) $350,000 for the
Excess Supplies.
2.4 INTERMEDIATE PURCHASES AND REMOVALS OF INVENTORY.
(a) From time to time prior to the Second Closing, upon not less
than one Business Day's written notice to LTV, Buyer shall have the right to
purchase a portion of the Negotiated Inventory (any such portion, a "Inventory
Portion"), provided that Buyer (a) certifies to LTV with reasonable specificity
the identity, location and amount of the Inventory Portion to be purchased, and
(b) pays to Sellers the corresponding portion of the Inventory Purchase Price
therefor (determined in accordance with SECTION 2.3 hereof). Upon payment of
such purchase price to Sellers in accordance with SECTION 2.6 hereof, Seller
shall sell such Inventory Portion to Buyer and will deliver the documents with
respect thereto set forth in SECTION 2.5 hereof.
(b) Between the Closing Date and May 13, 2002 Sellers (or purchaser
of Removable Inventory) shall have the right to enter the Real Property and
remove Removable Inventory. Sellers shall have the right, at Sellers costs and
expense (based on Buyer's costs actually incurred) to use Buyer's equipment and
personnel as is reasonably necessary to load and remove the Removable Inventory;
PROVIDED, HOWEVER, that such use shall be coordinated so as not to adversely
affect the conduct of Buyer's business operations and; PROVIDED, FURTHER, that
Sellers shall advance Buyer the direct costs to be incurred by Buyer, based on
Buyer's reasonable estimate thereof.
2.5 SELLER'S DELIVERIES AT SECOND CLOSING. The sale, transfer and
delivery by Sellers of the Additional Assets to Buyer, as herein provided, shall
be effected on the date of the Second Closing (or prior thereto in accordance
with SECTION 2.4 hereof) by bills of sale and other instruments of transfer and
conveyance, excluding any representations, warranties or covenants and shall
otherwise be consistent with the terms of this Agreement and the Asset Purchase
Agreement reasonably satisfactory in form and substance to counsel for Buyer.
Seller shall also deliver all such documents as maybe necessary or reasonably
desirable to evidence the release of Sellers' interest in the Acquired Assets.
2.6 BUYER'S DELIVERIES AT THE SECOND CLOSING. At the Second Closing (or
prior thereto in accordance with SECTION 2,4 hereof), Buyer shall pay to the
Sellers the Inventory Purchase Price (or portion thereof in accordance with
SECTION 2.4), by wire transfer of immediately available funds to the Seller's
Account. If Buyer has purchased one or more Inventory Portions pursuant to
SECTION 2.4 the Inventory Purchase Price payable at the Second Closing shall be
reduced by the aggregate amount paid by Buyer for the purchase of such Inventory
Portions.
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2.7 SELLER'S REPRESENTATION AND WARRANTY. At the Second Closing and on
the date of any purchase of an Inventory Portion pursuant to SECTION 2.4 hereof,
the LTV Companies will have the right to transfer the Additional Assets to Buyer
free and clear of all Liens, other than Permitted Liens.
2.8 SELLER'S COVENANT. From the date hereof through the Second Closing,
Sellers shall not sell, lease or otherwise dispose of any item of Negotiated
Inventory.
2.9 BUYER'S COVENANTS.
(a) From the Closing Date through the date of the Second Closing,
Buyer shall allow Sellers, upon reasonable notice and during normal business
hours, to enter onto the Real Property solely for the purpose of inspecting the
Additional Assets, provided, however, that Sellers shall cooperate with Buyer to
insure that any such inspection shall not adversely affect the conduct of
Buyer's business operations.
(b) At all times from the Closing Date to the date of the Second
Closing (or the date of the purchase of an Inventory Portion, as the case
may be), Buyer shall keep the Negotiated Inventory physically segregated from
Buyer's other inventory, with the location accessible and documented, and
designated as Sellers' property on Buyer's inventory systems and records.
(c) Prior to the date of the Second Closing (or the date of the
purchase of an Inventory Portion, as the case may be), Buyer shall provide to
Sellers at any time upon Sellers' request any and all documents and other
evidence (including, but not limited to, financing statements designed to give
UCC-1 notice to third parties of Sellers' ownership of the Negotiated Inventory
and other written documentation acknowledging such ownership and any security
interests granted by LTV to one or more third parties) and take any and all
action as may be required or appropriate to prove or demonstrate to any third
party that title to the Negotiated Inventory remains with Sellers.
(d) Risk of loss with respect to the Negotiated Inventory shall pass
to Buyer on the Closing Date, and Buyer shall have an insurable interest
therein. Buyer shall use commercially reasonable efforts to preserve and protect
the Negotiated Inventory and shall indemnify Sellers from any loss or damage
thereto. Buyer shall be responsible for and shall indemnify, defend and hold
Sellers harmless against any injury, loss or damage to persons arising out of
the handling, storage, preservation or use of the Negotiated Inventory while
situated at the Real Property and titled to Sellers; PROVIDED, HOWEVER, that
except in case of Buyer's gross negligence or willful misconduct, Buyer shall
have no liability under this SECTION 2.9(d) for any loss, damage or injury to
any employee or agent of any LTV Party. Buyer, at its expense, shall use
commercially reasonable efforts to obtain following the Closing Date and
thereafter shall keep and maintain "all risks" insurance against physical loss
or damage to the Negotiated Inventory in an amount sufficient to protect the
full interest of Sellers in the Negotiated Inventory that are in possession of
Buyer.
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2.10 CONDITIONS TO SECOND CLOSING. Buyer's and the LTV Companies'
respective obligations to consummate the Second Closing are subject to the
consummation of the Closing. In addition Buyer's obligation to consummate the
Second Closing is subject to the representation and warranty of Sellers set
forth in SECTION 2.7 being true and correct as of the Closing Date, except for
such inaccuracies as would not, together with the inaccuracies, if any, of
Sellers' representations and warranties contained in the Asset Purchase
Agreement, result in a Material Adverse Effect, and the Sellers having performed
and complied in all material respects with the covenant set forth in SECTION
2.8. If any of the conditions to the Second Closing are not satisfied or waived,
Buyer shall not be obligated to purchase the Additional Assets. If the condition
to the Second Closing set forth in the first sentence of this SECTION 2.10 is
not satisfied or waived, Sellers shall not be obligated to sell the Additional
Assets. .
2.11 REMOVAL OF INVENTORY. In the event that the Second Closing does not
occur, Sellers shall, upon reasonable notice, have the right (a) to enter the
Real Property (with or without potential purchasers of Inventory) in connection
with efforts to market and sell the Inventory, and (b) to enter (or allow
purchasers of Inventory to enter) the Real Property to remove the Inventory,
provided, however, that Buyer and Seller shall cooperate to insure that such
removal does not adversely affect the conduct of the Buyer's business
operations. Sellers shall have the right, at Sellers' cost and expense (based on
Buyer's costs actually incurred) use (or allow purchasers of Inventory to use)
Buyer's equipment and personnel as is reasonably necessary to load and remove
any inventory; provided, however, that such use shall be coordinated so as not
to adversely affect the conduct of Buyer's business operations and; PROVIDED,
FURTHER, that Sellers shall advance Buyer the direct costs to be incurred by
Buyer, based on Buyer's reasonable estimate thereof.
2.12 AMENDMENT TO SECTION 8.1. Each reference to "45 days after the date
hereof" or "45 days after the date of this Agreement" contained in SECTION
8.1(b), (d), (e) and (g) of the Asset Purchase Agreement is hereby amended and
restated to read as follows: "60 days after the date hereof".
ARTICLE III
3.1 TITLE INSURANCE. Subject to the satisfaction of all of the other
conditions to Closing set forth in SECTION 7.2 of the Asset Purchase Agreement,
Buyer agrees that it will waive the condition to Closing set forth in SECTION
7.2(g) of the Asset Purchase Agreement to the extent (and only the extent) that
it applies to the Real Properties owned or leased by the Chicago Short Line. The
foregoing shall not be deemed a waiver of any other condition to Closing
(including, without limitation, the provisions of SECTION 7.2(g) as they relate
to the Real Properties owned or leased by any Seller other than the Chicago
Short Line). Notwithstanding the foregoing, before and following the Closing
Date, Sellers agree to continue to cooperate with Buyer in connection with
obtaining title insurance, including but not limited to, any factually accurate
affidavit required by the title company to be delivered by Seller to remove
certain exceptions on such title insurance policy, with respect to the Real
Properties owned or leased by Chicago Short Line.
3.2 USSC. Sellers acknowledge that United States Steel Corporation and
its affiliates (collectively, "USSC") disputes the cure costs claimed by LTV
and its Affiliates under the
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contracts set forth on the Disclosure Schedules between Sellers and USSC
(collectively, the "USSC Agreements"). Buyer acknowledges that LTV disputes
USSC's claimed cure costs and that LTV claims the amounts owed by USSC to LTV
under the USSC Agreements exceed the amounts owed by LTV to USSC thereunder. If
the Bankruptcy Court determines that there are any cure costs with respect to
such USSC Agreements or if Sellers and USSC otherwise agree on the amount of
such cure costs, LTV shall upon issuance of such order (or such agreement with
USSC), authorize the Escrow Agent (The Huntington National Bank, N.A.) under the
Escrow Amount Escrow Agreement to release immediately to Buyer from the Escrow
Amount an amount equal to the cure costs determined by the Bankruptcy Court (or
as agreed with USSC). .
3.3 DEPOSITS. Notwithstanding anything to the contrary contained in the
Asset Purchase Agreement or SCHEDULE 1.1(p) thereof, in consideration of Buyer's
agreement to pay $54,575 (the "Deposit Price") to Sellers at Closing (in
addition to the Acquired Asset Purchase Price), all of the deposits referred to
on SCHEDULE 1.1(p) to the Asset Purchase Agreement shall be deemed to be
Acquired Assets (without any portion thereof attributable to Excluded Assets)
upon payment of the Deposit Price to Sellers at Closing. Sellers agree to
cooperate with Buyer following the Closing Date in connection with providing
First Energy and/or First Energy IEU-Ohio Pool with any documentation required
by them to evidence transfer of ownership of such deposits to Buyer.
3.4 WCI AGREEMENT. Notwithstanding anything in the Asset Purchase
Agreement or the Schedules thereto to the contrary, (a) that certain Road, Rail
and Utilities Agreement between LTV Steel Company, Inc. and Xxxxxx Consolidated
Industries, Inc., dated August 31, 1988 (the "WCI Agreement"), is an Excluded
Contract and such agreement shall not constitute an Executory Contract for
purposes of the Asset Purchase Agreement, (b) pursuant to SECTION 9.2 of the
Asset Purchase Agreement, immediately upon deposit of the $8,000,000 in the
Escrow Amount Escrow Agreement, the parties shall direct and authorize the
Escrow Agent thereunder (The Huntington Bank, N.A.) to disburse to Seller
$2,000,000 (such deposit and release to be netted at Closing such that Buyer's
actual deposit in the Escrow Amount Escrow Account at Closing shall be
$6,000,000), and (c) payment of the amount described in SECTION 3.4(b) shall
satisfy and fully discharge any and all claims of Buyer against all LTV Parties
arising out of or in connection with the WCI Agreement or any inaccuracy of
representation or warranty with respect thereto.
3.5 RECORDS. Buyer will afford Sellers reasonable access to any Employee
Records retained by Buyer upon reasonable notice, and during regular business
hours.
ARTICLE IV
4.1 AMENDMENT OF SECTION 1.2(b). SECTION 1.2(b) of the Asset Purchase
Agreement is amended and restated as follows:
"(b) all of Sellers' prepaid insurance premiums and insurance
deposits and rights to refunds or adjustments in respect of
periods prior to the Closing Date with respect thereto and all
rights to insurance proceeds, reinsurance proceeds or other
insurance
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Contract recoveries, other than rights assigned to Buyer pursuant
to SECTION 12.1;"
4.2 AMENDMENT OF SECTION 5.1(d). The following sentence is added as the
last sentence of SECTION 5.1(d).
"Notwithstanding the foregoing, at the request of Buyer at any
time after the Closing Date, the LTV Companies shall, at their
sole expense, execute and deliver, any and all quit-claim deeds
and/or real estate transfer documents required to effectuate the
purchase of the Real Properties."
4.3 AMENDMENT TO SECTION 10.1. The second sentence of SECTION 10.1 is
hereby amended and restated to read as follows: "Buyer will have the right to
assign this Agreement to one or more of its Affiliates, provided that Buyer
shall remain jointly and severally liable under this Agreement with any
Affiliate assignee for any obligation assigned to such Affiliate."
4.4 ADDITION OF ARTICLE 12. The Asset Purchase Agreement is amended by
the addition of the following Article:
"ARTICLE 12. ASSIGNMENTS WITH RESPECT TO CERTAIN
INSURANCE AND REINSURANCE POLICIES.
"SECTION 12.1 CERTAIN RIGHTS TO PRE-CLOSING POLICIES. Pursuant to the
terms and subject to the conditions of this Agreement, the Sellers do hereby,
effective as of Closing, assign, transfer, convey and deliver to Buyer and each
of its subsidiaries (each, a "Buyer Sub"), and each Buyer Sub shall at Closing
acquire from the Sellers, a joint interest with the Sellers in and to all rights
to coverage under the general liability insurance policies and reinsurance
policies that the Sellers and/or their predecessors and affiliates acquired
prior to the Closing (the "Pre-Closing Policies") with respect to Acquired
Assets and/or the Assumed Liabilities that are acquired and/or assumed by each
such Buyer Sub pursuant to the Asset Purchase Agreement or any document
delivered pursuant thereto. For the avoidance of doubt, the Sellers do not
hereby assign, transfer, convey and/or deliver any joint interest in any rights
to coverage under the Pre-Closing Policies that do not relate specifically to
the Acquired Assets or the Assumed Liabilities."
"SECTION 12.2 ASSIGNMENT OF CERTAIN PROCEEDS FROM PRE-CLOSING POLICIES.
Pursuant to the terms and subject to the conditions of this Agreement, each
Buyer Sub does hereby, effective as of Closing, assign, transfer, convey and
deliver to the Sellers the right to any and all proceeds and/or any and all
amounts collected or recovered by such Buyer Sub (or on its behalf) after the
Closing from the Pre-Closing Policies', insurers and/or reinsurers (or any
assignee or successor thereto) with respect to the Pre-Closing Policies;
PROVIDED, HOWEVER, that Sellers shall pay Buyer (or its designee) twenty-five
percent (25%) of (x) any and all proceeds and/or any and all amounts collected
or recovered after the Closing from the Pre-Closing Policies' insurers and/or
reinsurers (or any assignee or successor thereto) with respect to the
Pre-Closing Policies, minus (y) all fees and expenses paid after Closing to
Xxxxxxxxx and Xxxxxxx and the consultants
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Xxxxxxx Xxxxxxx & Associates and Insolutions engaged by Sellers in connection
with the realization of such proceeds and amounts. The terms of such engagements
shall be determined by Sellers, with consent of Buyer. Sellers agree that to
effectuate the foregoing, Sellers shall arrange to have such proceeds and/or
amounts, less said fees and expenses, paid directly into an escrow account for
the benefit of Sellers and Buyer (the "Escrow Account") at the law firm of
Xxxxxxxxx & Xxxxxxx for distribution to Buyer (or its designee) and Sellers in
accordance with the terms of this Agreement."
"SECTION 12.3 PROSECUTION OF CLAIMS WITH RESPECT TO PRE-CLOSING POLICIES.
Effective as of the Closing, Buyer Sub and Sellers agree that Xxxxxxxxx &
Xxxxxxx shall act as joint counsel for Buyer, and Buyer Subs and Sellers to
exclusively to manage claims and attempt to recover any proceeds and/or amounts
with respect to the Pre-Closing Policies. The Sellers will be solely responsible
for the prosecution of claims with respect to the Pre-Closing Policies, and
Buyer shall not, and shall cause the Buyer Parties not to, independently seek to
prosecute claims with respect to the Pre-closing Policies without the prior
written consent of the Sellers. Further, Sellers shall not enter into any
settlement agreements with respect to such prosecution of claims without Buyer's
consent, such consent not to be unreasonably withheld. In no event shall Sellers
have any liability to Buyer or any Buyer Sub as the result of the manner in
which Sellers undertake or fail to undertake the prosecution of claims. Buyer
hereby acknowledges and agrees to provide, and to cause the Buyer Subs to
provide, reasonable assistance to the Sellers, at the Sellers' expense, that the
Sellers might reasonably request in connection with the Sellers' prosecution of
claims with respect to the Pre-Closing Policies. Notwithstanding the foregoing,
Buyer and the Buyer Subs shall not be required to incur any expense unless
Sellers have advanced the amount thereof to Buyer. Any expenses which Buyer or
any Buyer Sub may incur concerning the prosecution of claims with respect to the
Pre-Closing Policies which are incurred other than as a result of Sellers'
request for assistance shall be borne by Buyer or such Buyer Sub. The parties
hereto hereby acknowledge that the Sellers might need access to certain non-
public information regarding the Business and might need to provide such
non-public information regarding the Business to the Pre-Closing Policies'
insurers and/or reinsurers. Buyer shall not, and shall cause the Buyer Subs not
to, unreasonably withhold such information or restrict the ability of Sellers to
provide such information to the Pre-Closing Policies' insurers and/or
reinsurers. For the avoidance of doubt, the parties hereto hereby acknowledge
that the Sellers' access to and provision of such non-public information to the
Pre-Closing Policies' insurers and/or reinsurers for the purpose of the
prosecution of claims with respect to the Pre-Closing Policies will not violate
the covenant made by the LTV Companies in Section 5.1(e) of this Agreement.
Buyer will execute any releases relating to the Pre-Closing Policies that are
reasonably required by a Pre-Closing Policies' insurer and/or reinsurer in order
for the Sellers to prosecute and/or settle any claims with respect to the
Pre-Closing Policies, provided that no such release contains any affirmative
obligation for Buyer or any Buyer Sub or otherwise adversely affects Buyer's or
any Buyer Sub's conduct of the business. In addition, each party will execute
and deliver promptly any other documents reasonably requested by another party
hereto to evidence the covenants and appointments set forth in this ARTICLE 12."
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ARTICLE V
5.1 FULL FORCE AND EFFECT. Except as specifically amended or modified
hereby, the Asset Purchase Agreement remains in full force and effect in
accordance with its terms. This Amendment is a part of the Asset Purchase
Agreement and shall be subject to the terms and conditions thereof (as amended
hereby).
5.2 COUNTERPARTS. This Amendment may be executed in counterparts, each of
which shall be deemed an original, but all of which shall constitute the same
instrument.
(The remainder of this page is intentionally left blank.)
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first above written.
INTERNATIONAL STEEL GROUP INC.
By: /s/ Xxxxxx X. Xxxx, Xx.
------------------------------
Name: Xxxxxx X. Xxxx, Xx.
Title: Chairman
LTV STEEL COMPANY, INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Title: CEO
RIVER TERMINAL RAILWAY COMPANY
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: CEO
CHICAGO SHORT LINE RAILWAY COMPANY
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: CEO
THE CUYAHOGA VALLEY RAILWAY
COMPANY
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: CEO
THE LTV CORPORATION
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Title: Chairman & CEO
LTV ELECTRO-GALVANIZING, INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Title: Chairman & CEO
