Exhibit 10.9
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.
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
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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 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
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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 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).
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"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 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
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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."
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
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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.)
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
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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
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