Exhibit 10.7
TRANSITION SERVICES AGREEMENT
This TRANSITION SERVICES AGREEMENT (this "Agreement") is entered into as of
the 16th day of August, 2002 (the "Closing Date") by and among REPUBLIC
TECHNOLOGIES INTERNATIONAL, LLC, a Delaware limited liability company
("Republic"), NIMISHILLEN & TUSCARAWAS, LLC, a Delaware limited liability
company ("NT"), REPUBLIC TECHNOLOGIES INTERNATIONAL HOLDINGS, LLC, a Delaware
limited liability company ("Holdings"), BLISS & XXXXXXXX, LLC, a Delaware
limited liability company ("Bliss," and together with Republic, Holdings and NT,
collectively, "Seller"), REPUBLIC ENGINEERED PRODUCTS LLC, a Delaware limited
liability company ("Purchaser") and, solely for the purpose of consenting to
this Agreement, THE BANK OF NEW YORK, as indenture trustee and collateral agent
under the RTI Indenture (as defined below). Capitalized terms used but not
otherwise defined herein shall have the meanings ascribed thereto in the Asset
Purchase Agreement (as hereinafter defined).
WITNESSETH
WHEREAS, Seller and Purchaser have entered into an Asset Purchase Agreement
dated as of June 7, 2002 (as amended and supplemented, the "Asset Purchase
Agreement") pursuant to which Purchaser has agreed to purchase certain assets of
Republic;
WHEREAS, the Excluded Assets retained by Seller and set forth on Schedule I
attached hereto (the "Transition Assets") are important to facilitate the use of
the Purchased Assets by Purchaser;
WHEREAS, the wind down of Seller's bankruptcy estate will require the
assistance of Purchaser;
WHEREAS, in order to support the continued and uninterrupted operation of
the Business, Seller and Purchaser wish to enter into an agreement as
contemplated and required by the Asset Purchase Agreement whereby each party
agrees to supply certain transitional and support services to the other party in
accordance with the terms and conditions of this Agreement during the periods
referred to herein to facilitate an orderly transition of the Business;
WHEREAS, the execution and delivery of this Agreement is required by
Article X of the Asset Purchase Agreement as a condition to the closing of the
transaction contemplated thereunder;
WHEREAS, The Bank of New York serves as Successor First Mortgage Trustee
for the 13-3/4% Secured Notes under the terms of an indenture dated as of August
13, 1999 (the "RTI Indenture") by and among Republic and RTI Capital Corp., as
Issuers, Holdings, NT, Bliss and Canadian Drawn Steel Company Inc., as
Guarantors of the 13-3/4% senior secured notes due 0000 (xxx "XXX Xxxxx") xxx
Xxxxxx Xxxxxx Trust Company of New York, as predecessor trustee to The Bank of
New York; and
WHEREAS, CFSC Wayland Advisors, Inc. and Varde Partners, Inc. (together,
the "RTI Majority Noteholders") have advised Seller and Purchaser that they
currently hold or manage funds that own, in the aggregate, a majority of the
principal amount of the RTI Notes, and as such have certain rights under the RTI
Indenture;
NOW, THEREFORE, in consideration of the mutual covenants and undertakings
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
SERVICES
1.1 Transition Services.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, Seller shall provide to Purchaser certain transitional and support
services as set forth in Schedule I attached hereto (hereinafter referred to
individually as a "Service" or collectively as the "Services") until the
expiration of the Term or Renewal Term (each as hereinafter defined) unless
terminated earlier pursuant to Article V hereof. Upon the shutdown of any
Transition Asset during the Term or any Renewal Term, such asset will cease to
be a Transition Asset hereunder.
(b) Without limiting the foregoing, each party shall use commercially
reasonable efforts to make its personnel available to respond to reasonable
questions from the other party's personnel relating to the Business and shall
provide all assistance reasonably requested to ensure a smooth transition to
Purchaser's ownership and operation of the Business and Seller's wind down of
its bankruptcy estate. At the reasonable request of Purchaser, Seller shall meet
with representatives of Purchaser to discuss matters relating to the Services
that Seller provides to Purchaser under this Agreement. During the Term or any
Renewal Term of the Agreement, Purchaser shall provide to Seller reasonable
access during the normal business hours of Purchaser and upon reasonable prior
written notice to Purchaser, to any books and records of Purchaser that
constitute Purchased Assets under the Asset Purchase Agreement for use in
connection with the wind down of Seller's bankruptcy estate. Any services to be
provided pursuant to this paragraph shall be on reasonable terms and reasonable
advance notice and shall not interfere with the ordinary course operation of the
business of Purchaser.
(c) Except as otherwise provided herein, the attached Schedule I is
subject to change only upon the parties mutual written consent. To the extent
the Schedule is incomplete as of the date hereof in describing a Service, the
parties shall use good faith efforts to complete such Schedule as promptly as
practicable. Any element of a Service reflected on any such amended Schedule
shall thereafter be deemed a part of the "Service".
(d) In addition to the Services, the parties hereto acknowledge that
there may be additional services which have not been identified on Schedule I
and which may be necessary to operate the Business following the Closing Date or
a need during any Term or Renewal Term to extend the projected shutdown date for
one or more Transition Assets. If, within one hundred
2
and eighty (180) days of the Closing Date, any such additional services, or such
extensions of the shutdown date, are identified and requested by either party,
such other services shall be provided, or such shutdown date(s) shall be
extended, if the other party consents to the provision of such additional
services or such extensions, which consent shall not be unreasonably withheld,
at a cost to be negotiated in good faith. Such additional services shall not
include anything excluded by Section 3.2 hereof. In the event the additional
services requested pursuant to this Section 1.1(d) are materially different from
the Services identified on Schedule I or involve Excluded Assets other than the
Transition Assets, such additional services may only be provided with the prior
written consent of the RTI Majority Noteholders. Nothing in this Section 1.1(d)
shall result in any extension of the Term or any Renewal Term except as provided
in Section 5.1.
1.2 No Liens. None of the actions taken by Purchaser or Seller under
this Agreement shall result in any lien or encumbrance to be placed on or
asserted against the Excluded Assets, including the Transition Assets, that are
subject to the lien of the trustee and the collateral agent for the holders of
the RTI Notes, other than, with respect to the Transition Assets only, mechanics
liens that may arise in the ordinary course as a result of normal maintenance or
repairs performed during the Term or any Renewal Term with respect to the
Transition Assets which mechanics liens shall be the obligation of Seller to
satisfy.
1.3 Agreements to be Assumed and Assigned. Schedule II sets forth a
list of certain executory contracts and unexpired leases, other than the
Purchased Contracts assigned by Seller to Purchaser at Closing, that Seller
wishes to assign to Purchaser and Purchaser wishes to assume pursuant to Section
8.15 of the Asset Purchase Agreement following the Closing (the "Additional
Contracts"). Unless and until any such Additional Contract shall have been
assumed by and assigned to Purchaser, Seller and Purchaser shall cooperate to
establish an arrangement satisfactory to Purchaser and Seller 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 Seller
would enforce for the benefit of Purchaser, with Purchaser assuming and agreeing
to pay Seller's obligations, any and all claims, rights and benefits of Seller
against a third party thereto. In such event, (i) Seller will promptly pay to
Purchaser, when received, all moneys received by it under any such Additional
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.
ARTICLE II
SERVICE FEES
2.1 By Purchaser.
(a) During the Term or any Renewal Term of the Agreement, Purchaser
shall reimburse Seller for any actual, documented and reasonable costs incurred
by Seller that arise from providing the Services for Purchaser, including the
costs of operating any Transition Assets, costs associated with materials owned
or acquired by Seller that are necessary to provide the Services, and costs
(including salary and the benefits listed on Schedule I) of employing Seller's
employees involved in providing the Services. Services involving security,
3
environmental compliance, and asset sale activities for the Excluded Assets,
including, without limitation, the Transition Assets, are the sole and exclusive
responsibility and obligation of Seller. Without limiting the generality of the
foregoing, Purchaser shall have no responsibility or obligation to cause Seller
to maintain the operation of the Excluded Assets, including, without limitation,
the Transition Assets, in compliance with any applicable Environmental Laws.
(b) As contemplated by the Asset Purchase Agreement and defined
therein as Installment Payments, Purchaser shall pay a fee in an aggregate
amount of Five Million U.S. Dollars ($5,000,000.00) to compensate Seller for
Seller's operation of the Transition Assets (the "Services Fee") as contemplated
in this Agreement. The Services Fee shall be paid by Purchaser for the benefit
of the holders of outstanding RTI Notes to The Bank of New York, as successor to
United States Trust Company of New York, the trustee under the RTI Indenture, or
such other agent as designated in writing by the holders of a majority of the
outstanding face amount of the RTI Notes. The Services Fee shall be paid in five
(5) equal monthly installment payments of One Million U.S. Dollars
($1,000,000.00) each commencing thirty (30) days after the Closing Date and
ending six (6) months after the Closing Date. In the event Purchaser fails to
pay any such installment payment when due or any other amounts due under this
Section 2.1(b), the RTI Majority Noteholders, on behalf of the holders of RTI
Notes, may take any action available at law or in equity to enforce the payment
of such installment payment under this Section 2.1(b).
(c) Purchaser shall reimburse Seller for any actual, documented and
reasonable out-of-pocket expenses that are paid by Seller to third-party service
providers in the ordinary course of business consistent with past practice to
the extent any Services are provided through such third party service providers
during the Term or Renewal Term of the Agreement.
2.2 By Seller. Seller shall reimburse Purchaser for any actual,
documented and reasonable out-of-pocket costs that are incurred by Purchaser in
providing assistance to Seller, at Seller's request, in the wind down of
Seller's bankruptcy estate.
ARTICLE III
LIMITATION OF LIABILITY
3.1 Except as otherwise expressly provided in this Agreement, in no
event shall any party be liable for any indirect, special, incidental,
consequential or punitive damages resulting from such party's performance or
failure to perform or breach under this Agreement, or the furnishing,
performance or use of any Services provided pursuant hereto, whether due to
breach of contract, breach of warranty, negligence or otherwise, regardless of
whether the nonperforming party was advised of the possibility of such damages
or not.
3.2 During the Term or any Renewal Term of the Agreement, Seller
shall be solely responsible for the control, management, supervision and
performance of all environmental compliance and waste management activities
relating to the Services to be provided by Seller pursuant to this Agreement and
with respect to the operation of the Excluded Assets, and Purchaser shall have
no right, responsibility or obligation to control, manage, supervise or perform
any such environmental compliance or waste management activities. All
environmental records generated by the Seller in performing the Services shall
clearly indicate
4
that the Seller bears sole responsibility for all environmental compliance and
waste management activities. The performance of the Services by Seller and the
provisions of this Agreement shall not be construed to mean that the Purchaser
is the operator of any Excluded Asset, or that the Purchaser has arranged for
the disposal of any solid or hazardous waste generated by the Seller in the
performance of the Services or in the operation of the Excluded Assets.
ARTICLE IV
CONFIDENTIALITY
4.1 Confidentiality. Each party agrees that all confidential information
disclosed to it in connection with the transactions contemplated by this
Agreement shall be held in confidence in accordance with the terms of and in the
manner contemplated by Section 8.3 of the Asset Purchase Agreement, except that
the period during which such information shall be maintained in confidence shall
be two years.
4.2 Care and Inadvertent Disclosure. With respect to any confidential
information, each party agrees as follows:
(a) It shall use the same degree of care in safeguarding the confidential
information of the other party as a reasonably prudent person would
use to safeguard its own confidential information; and
(b) upon the discovery of any inadvertent disclosure or unauthorized use
of the confidential information of the other party, or upon obtaining
notice of such a disclosure or use from the other party, it shall take
all reasonable actions to prevent any further inadvertent disclosure
or unauthorized use.
4.3 Ownership and Maintenance of Data. All records, data files (and the
data contained therein), input materials or data or other information, reports
and other materials that Seller receives, computes, develops, processes or
stores for Purchaser (collectively the "Data") pursuant to this Agreement after
the Closing Date will be the exclusive property of Purchaser, and Seller shall
not possess any interest, title, lien or right in connection therewith. Seller
shall safeguard the Data from disclosure to third parties with the same degree
of care exercised by reasonably prudent persons engaged in similar business.
Data shall not be utilized by Seller for any purpose other than in support of
Seller's obligations hereunder or to the extent necessary to facilitate the sale
of the Excluded Assets and the wind down of Seller's bankruptcy estate. Neither
the Data nor any part thereof shall be disclosed, sold, assigned, leased or
otherwise disposed of to third parties by Seller or commercially exploited by or
on behalf of Seller, except to the extent that disclosure of such Data to a
governmental entity or to a court of law is required to comply with
environmental or other regulatory requirements, or with a judicial decree or
order. Upon termination of any Service provided hereunder, Seller shall provide
Purchaser reasonable access to retained Data for a period not to exceed ninety
(90) days following said termination, whereupon, upon Purchaser's request, such
Data will be transferred to Purchaser at Purchaser's cost, except in the event
of termination by Purchaser under Section 5.3 by reason of Seller's material
breach, in which case such transfer will be made at Seller's cost.
5
4.4 Access to Data. For a period of two (2) years from the date hereof,
Purchaser shall provide to Seller reasonable access during the normal business
hours of Purchaser and upon reasonable prior written notice to Purchaser, to any
Data to the extent necessary in connection with the wind down of Seller's
bankruptcy estate or to facilitate the sale of the Excluded Assets. Any such
access shall be on reasonable terms and reasonable advance notice and shall not
interfere with the ordinary course operation of the business of Purchaser.
4.5 Information for RTI Majority Noteholders. Seller and Purchaser shall
provide to the RTI Majority Noteholders or their counsel any information
reasonably requested by any such party regarding the use and operation of the
Transition Assets in connection with this Agreement, provided that such party
executes and delivers to Seller and Purchaser a confidentiality agreement in
form and substance reasonably acceptable to Seller and Purchaser.
ARTICLE V
TERM AND TERMINATION
5.1 Term. Subject to earlier termination pursuant to the terms and
conditions contained herein, this Agreement shall commence on the Closing Date
and shall remain in full force and effect for a period of seven (7) months (the
"Term"). Purchaser may elect to extend the Term for successive periods of two
(2) months (each, a "Renewal Term") by providing Seller with written notice
thereof at least two (2) Business Days prior to the expiration of the then
current Term or Renewal Term; provided, that any further Renewal Term following
the first Renewal Term shall require the prior written consent of the RTI
Majority Noteholders.
5.2 Termination by Mutual Agreement. The Agreement may be terminated at any
time upon the mutual written agreement of the parties.
5.3 Termination For Cause. The occurrence of any one or more of the
following events shall constitute an event of default and grounds for
termination of this Agreement by either party:
(a) Immediately upon written notice, if a party violates any covenant of
confidentiality obligation contained in this Agreement or otherwise
discloses, uses, permits the use of, copies, duplicates, records,
transmits or otherwise reproduces any confidential information without
the other party's prior written approval; or
(b) If a party fails to perform or breaches in any material respect any
covenant, obligation, or term in this Agreement and does not cure such
failure to perform or breach within thirty (30) days after written
notice thereof from the non-breaching party.
5.4 Termination by Purchaser. Notwithstanding the foregoing, Purchaser may
terminate any Service or Services provided pursuant to this Agreement upon
thirty (30) days prior written notice to Seller.
6
5.5 Survival of Obligations. Any termination or expiration of this
Agreement shall not relieve either party of its respective obligations under
this Agreement including, without limitation, the obligations of such party set
forth in Articles II, IV and VI of this Agreement.
ARTICLE VI
COVENANTS OF SELLER
6.1 Maintenance of Transition Assets. During the Term of this Agreement and
subject to Section 5.1, Seller shall continue to operate each Transition Asset,
from the date hereof until the shutdown date for such Transition Asset set forth
on Schedule I, in the ordinary course of business to provide the Services to
Purchaser pursuant to this Agreement; provided however, that Seller may, in
accordance with Section 6.3 hereof sell any such asset and cease to operate such
asset and perform the Services related to such asset. Without limiting the
generality of the foregoing, during the Term of this Agreement and subject to
Section 5.1, Seller shall continue to provide security services, insurance,
permits, utilities, adequate staffing and reasonable maintenance for each
Transition Asset on the same or substantially similar terms as existed prior to
the Closing. Subject to Section 5.1, in the event the Services requiring the use
of any Transition Asset set forth on Schedule I cannot be completed before the
shutdown date for such Transition Asset, Seller shall continue to operate such
Transition Asset in accordance with this Section 6.1 until the completion of
such Services. This Section 6.1 shall no longer apply to any Transition Asset
that has been sold or otherwise transferred in accordance with Section 6.3
hereof.
6.2 Access to Excluded Plants. During the Term or any Renewal Term of this
Agreement, Seller shall grant Purchaser, the RTI Majority Noteholders and their
designees access to the Excluded Plants during normal business hours for the
purpose of removing or transporting any Purchased Assets or, at the request of
Seller, to facilitate the sale of any Excluded Assets. Purchaser shall not
remove or transport Excluded Assets from the Excluded Plants or any other
location except, at the direction of Seller, to assist Seller in the wind down
of its bankruptcy estate.
6.3 Sale of Transition Assets. During the Term or any Renewal Term of this
Agreement, Seller shall not sell or otherwise transfer any Transition Assets to
any third party other than in accordance with the RTI Indenture and without
giving 60 days prior written notice thereof to Purchaser during the Term or any
Renewal Term, provided that such 60 days notice shall not have the effect of
extending the Term or any Renewal Term.
ARTICLE VII
MISCELLANEOUS
7.1 Expenses. Each party hereto shall bear its own costs and expenses
(including the fees and disbursements of legal counsel, investment bankers and
accountants) with respect to the transactions contemplated by this Agreement,
except as otherwise expressly provided herein.
7
7.2 Amendment. This Agreement may be amended, modified or supplemented only
by a written instrument signed by the parties hereto.
7.3 Notices. Any notice, request, instruction or other document to be given
hereunder by a party hereto shall be in writing and shall be deemed to have been
given: (a) when received if given in person or by courier or a courier service;
(b) on the date of transmission if sent by telex, facsimile or other wire
transmission; or (c) three (3) business days after being deposited in the U.S.
mail, certified or registered mail, postage prepaid:
If to Purchaser: With required copies to (which shall not
constitute notice):
Republic Engineered Products LLC
0000 Xxxxxxx Xxxxxxx KPS Special Situations Fund, L.P.
Xxxxx, Xxxx 00000 000 Xxxx Xxxxxx, 00xx Xxxxx
Attention: Xxxxxx Xxxxxxxx Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
--and--
Xxxx Investment Group, X.X.
Xxxxxxxx Place
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxxxx X. Xxxx, Xx.
--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
--and with respect to material notices--
the Majority Noteholders and their counsel as set
forth below
If to Seller: With required copies to (which shall not
constitute notice):
8
Republic Technologies International, LLC McDonald, Hopkins, Xxxxx & Xxxxx Co., L.P.A.
[confirm post-closing address] 2100 Bank One Center
Attention: Xxxxxxx Xxxxxx 000 Xxxxxxxx Xxxxxx, X.
Xxxxxxxxx, Xxxx 00000-0000
Attention: Xxxxx Xxxxx
--and--
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Simeon Gold
--and with respect to material notices--
the Majority Noteholders and their counsel as set forth
below
If to the RTI Majority Noteholders: With required copies to (which shall not
constitute notice):
CFSC Wayland Advisers, Inc. Xxxxxxx and Xxxxxx
00000 Xxxxxxxxxx Xxxxx 000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000 Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Xxxx Xxxxx
952.984.3054 (direct)
000.000.0000 (fax)
xxxx_x_xxxxx@xxxxxxx.xxx
Xxxxx Xxxxx
952.984.3404 (direct)
000.000.0000 (fax)
xxxxxx_xxxxx@xxxxxxx.xxx
Varde Partners, Inc.
0000 Xxxx 00xx Xxxxxx - Xxxxx 000
Xxxxxxxxxxx, XX 00000
Xxxxxx X. Xxxxxxx
952.893.1554 (direct)
000.000.0000 (fax)
xxxxxxx@xxxxxxxxxxxxx.xxx
9
or to such other individual or address as a party hereto may designate for
itself by notice given as herein provided.
7.4 Waivers. The failure of a party hereto at any time or times to require
performance of any provision hereof shall in no manner affect its right at a
later time to enforce the same. No waiver by a party of any condition or of any
breach of any term, covenant, representation or warranty contained in this
Agreement shall be effective unless in writing, and no waiver in any one or more
instances shall be deemed to be a further or continuing waiver of any such
condition or breach in other instances or a waiver of any other condition or
breach of any other term, covenant, representation or warranty.
7.5 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
7.6 Headings. The headings preceding the text of articles and sections
included in this Agreement and the headings to schedules attached to this
Agreement are for convenience only and shall not be deemed part of this
Agreement or be given any effect in interpreting this Agreement.
7.7 Interpretation. Unless otherwise indicated, words describing the
singular number shall include the plural and vice versa, and words denoting each
gender shall include the other gender and words denoting natural persons shall
include corporations and partnerships and vice versa. The use of the terms
"including" or "includes" shall in all cases herein mean "including, without
limitation" or "include, without limitation," respectively. Unless otherwise
indicated, references to articles, sections, subsections or schedules shall
refer to those portions of this Agreement. No specific representation, warranty
or covenant contained herein shall limit the generality or applicability of a
more general representation, warranty or covenant contained herein. A breach of
or inaccuracy in any representation, warranty or covenant shall not be affected
by the fact that any more general or less general representation, warranty or
covenant was not also breached or inaccurate.
7.8 Applicable Law. The validity, construction and effect of this Agreement
shall be governed by and construed and enforced in accordance with the laws of
the State of New York, without giving effect to the principles of conflicts of
law of such state, and, to the extent applicable, the Bankruptcy Code.
7.9 Jurisdiction; Waiver of Jury Trial. Any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with this Agreement shall be brought in the Bankruptcy Court. 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
10
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 6.3
(provided that nothing herein shall affect the right to effect service of
process in any other manner permitted by New York law). Each party hereto hereby
irrevocably waives any and all right to trial by jury in any legal proceeding
arising out of or related to this Agreement.
7.10 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns;
provided, however, that no assignment of any rights or obligations shall be made
by Seller without the written consent of Purchaser. Purchaser may assign this
Agreement without the written consent of Seller but may not assign this
Agreement without the written consent of the RTI Majority Noteholders unless
such assignment is to an Affiliate of Purchaser.
7.11 No Third Party Beneficiaries. This Agreement is solely for the benefit
of the parties hereto and, to the extent provided herein, their respective
assigns, directors, officers, employees, stockholders, managers, agents and
representatives, and no provision of this Agreement shall be deemed to confer
upon other third parties any remedy, claim, liability, reimbursement, cause of
action or other right. Notwithstanding the foregoing, the holders of the RTI
Notes, including the RTI Majority Noteholders, are third party beneficiaries
with respect to Section 2.1(b) and Section 5.1.
7.12 Severability. If any provision of this Agreement shall be held
invalid, illegal or unenforceable, the validity, legality or enforceability of
the other provisions shall not be affected thereby, and there shall be deemed
substituted for the provision at issue a valid, legal and enforceable provision
as similar as possible to the provision at issue.
7.13 Remedies Cumulative. The remedies provided in this Agreement shall be
cumulative and shall not preclude the assertion or exercise of any other rights
or remedies available by Law, in equity or otherwise.
7.14 Entire Understanding. This Agreement, together with the schedules
attached hereto, sets forth the entire agreement and understanding of the
parties hereto with respect to the matters described herein and supersedes any
and all prior agreements, arrangements and understandings among the parties with
respect thereto.
7.15 Relationship of the Parties. Each party hereto shall perform the
services described hereunder as an independent contractor and no joint venture,
partnership, employment or agency relationship is created by this Agreement.
Neither party shall have, nor shall either party hold itself out as having, any
power or right, either express or implied, to bind the other party contractually
unless such other party shall consent thereto in writing. The employees who
provide the Services shall remain at all times employees of Seller, and at no
time shall any employee of Seller become, or be considered to become, an
employee of Purchaser. Seller shall have the sole right and obligation to
control, supervise, hire, terminate, direct and pay salary and benefits to the
employees providing the Services, and Purchaser shall have no such rights or
obligations.
11
7.16 Force Majeure. Any delay or failure in performance hereunder by either
party, except with respect to the payment of any amounts hereunder, shall be
excused if and to the extent caused by occurrences beyond such party's
reasonable control, including but not limited to, decrees or restraints of
governments, acts of God, strikes, walk-outs or other labor disturbances
affecting the delivery of supplies or raw materials to either party, civil
commotion, sabotage, or other similar causes beyond such party's reasonable
control; provided, however, that the affected party shall promptly notify the
other party in writing of the nature and expected duration of such force
majeure, and in any event, if such force majeure continues for more than ninety
(90) days, the non-affected party shall have the right to terminate the
Agreement upon written notice to the other party.
7.17 Publicity. No party shall, without the prior written approval of the
other party, make any press release or other public announcement concerning the
terms of the transactions contemplated by this Agreement, except as and to the
extent that any such party shall be so obligated by Law or pursuant to a lawful
request of a Governmental Authority and except as may be required by the rules
or regulations of any securities exchange; provided that, prior to issuing any
such release, the issuing party shall provide the other party in interest with a
reasonable opportunity to review such release.
[Remainder of page intentionally left blank.]
12
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first above written.
REPUBLIC TECHNOLOGIES
INTERNATIONAL, LLC,
a Delaware limited liability company
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------------
Title: V.P. Finance
-------------------------------
NIMISHILLEN & TUSCARAWAS, LLC,
a Delaware limited liability company,
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------------
Title: Vice President
-------------------------------
BLISS & XXXXXXXX, LLC,
a Delaware limited liability company
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------------
Title: Vice President
-------------------------------
REPUBLIC TECHNOLOGIES INTERNATIONAL
HOLDINGS, LLC,
a Delaware limited liability company
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------------
Title: Vice President
-------------------------------
REPUBLIC ENGINEERED PRODUCTS LLC,
a Delaware limited liability company
By: /s/ Xxxxxxx Xxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxx
Title: President
CONSENTED TO:
THE BANK OF NEW YORK,
as trustee and collateral agent as aforesaid
By: /s/ Xxxx X. Xxxx, V.P.
--------------------------------
Name: Xxxx X. Xxxx
Title: Vice President
SCHEDULE I
Seller will operate the following Transition Assets after the Closing Date to
convert in-process inventory and to ship finished product. Billets, hot rolled
bars, and cold finished bars will be handled, rolled, finished, stored, and
shipped by Seller's employees utilizing the Transition Assets. Listed below are
the Transition Assets to be utilized and the expected shutdown dates:
Transition Asset Shutdown Date
---------------- -------------
Chicago 8-11-02
Lorain 12" Mill 8-31-02
Massillon 18" Mill 12-21-02
Canadian Drawn -------
Purchaser will reimburse Seller for costs incurred to convert and ship product
as follows:
. Salaries, wages and labor-related expenses including only base pay,
overtime premium, incentive earnings, shift differential, health
insurance premiums or contributions, scheduled vacation pay, and FICA.
. Purchase and payment for fuels, utilities, supplies, and services
required for conversion and shipment of steel products.
. Costs of providing administrative support (other than the salaries,
wages and labor-related expenses described above) including payroll,
safety, human resources, accounting, IT services, production
scheduling, maintenance, and transportation services.
The attached schedule includes the monthly budget for anticipated incurred costs
to operate the above Transition Assets. This budget does not include any idling,
shutdown, caretaker, or disposal costs.
Aug 02 Sep 02 Oct 02 Nov 02 Dec 02
------ ------ ------ ------ ------
(all amounts in thousands)
CHICAGO FINISHING
-----------------
Shipments - mnt 3.0
# of Employees 15
Direct Labor & Benefits $ 60
Fuel, Utilities, Gases $ 12
Support & Services $ 6
Non-Labor R&M 0
Consumables & Supplies $ 6
------
Total $ 84
LORAIN 12" ROLLING MILL
-----------------------
Production - mnt 22.5
# of Employees 166
Direct Labor & Benefits $ 970
Distributed Labor & Spending $ 168
Fuel, Utilities, Gases $ 375
Support & Services $ 84
Non-Labor R&M $ 78
Consumables & Supplies $ 100
Outside Processing $ 675
------
Total $2,449
MASSILLON 18" ROLLING MILL
--------------------------
Production - mnt 30.1 28.1 31.7 23.4 F&S Only
# of Employees 297 297 297 297 107
Direct Labor & Benefits $1,785 $1,785 $1,785 $1,694 $ 516
Distributed Labor & Spending $ 82 $ $78 $ 81 $ 78 $ 0
Fuel, Utilities, Gases $ 355 $ 344 $ 363 $ 270 $ 75
Support & Services $ 87 $ 86 $ 78 $ 63 $ 20
Non-Labor R&M $ 103 $ 73 $ 76 $ 50 $ 10
Consumables & Supplies $ 128 $ 119 $ 111 $ 64 $ 10
Outside Processing $ 0 $ 0 $ 0 $ 0 $ 0
------ ------ ------ ------ ------
Total $2,539 $2,486 $2,493 $2,220 $ 631
CANADIAN DRAWN
--------------
Production - mnt 4.0 3.7 4.0 3.8 3.5
# of Employees 80 80 80 80 80
Purchased Rough Stock $1,882 $1,742 $1,882 $1,787 $1,647
Direct Labor & Benefits $ 284 $ 284 $ 284 $ 284 $ 284
Fuels, Utilities, Gases $ 25 $ 24 $ 25 $ 25 $ 24
Support & Service $ 11 $ 10 $ 11 $ 10 $ 9
Non-Labor R&M $ 20 $ 19 $ 20 $ 20 $ 19
Consumables & Supplies $ 40 $ 37 $ 40 $ 38 $ 35
Total $2,262 $2,116 $2,262 $2,164 $2,018
OPERATING BUDGET TOTAL $7,334 $4,602 $4,755 $4,384 $2,649
SCHEDULE II
Additional Contracts
1. Lease dated June 13, 1994, as thereafter amended on February 12, 2001 between
Republic Technologies International, LLC and MB Operating Co., Inc. The Lease is
recorded in Volume 1674, Page 867, Xxxxx County, Ohio Records.
2. Lease dated August 30, 1945 between The Garaux Brothers Company, as Lessor,
and The East Ohio Gas Company, as assigned. The Lease is recorded in Volume 79,
Page 259, Xxxxx County, Ohio Records. The assignments are recorded in Volume
110, Page 631, and as Instrument No. 95020993, Xxxxx County, Ohio Records.
